Scania: Scania's Board of Directors Recommends That Shareholders Do Not Accept Porsche's Mandatory Offer
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STOCKHOLM, Sweden February 3, 2009: Scania's shareholders have received an offer to tender their shares to Porsche for a consideration of SEK 68.52 in cash for each A share and SEK 67.10 in cash for each B share
Scania's Board of Directors* unanimously recommends that shareholders do not accept the offer
On 5 January 2009, Porsche announced that it had acquired indirect control of Scania AB by increasing its holding in Volkswagen to approximately 50.76 percent of shares with voting rights in Volkswagen. As a result of this increase and the fact that Volkswagen's interest in Scania exceeds the statutory threshold of 30 percent of all voting rights, Porsche acquired indirect control of Scania according to Swedish takeover law and was therefore obliged to announce a mandatory offer for those Scania shares that are not under its direct or indirect control.
On 19 January 2009, Porsche published a mandatory offer to acquire all shares in Scania that are not (directly or indirectly) held by Volkswagen or that otherwise (directly or indirectly) are controlled by Porsche (the "Offer"). Under the terms of the Offer, Porsche offers SEK 68.52 in cash for each Scania A share and SEK 67.10 in cash for each Scania B share. The price offered for the Scania shares corresponds to the minimum prices required by applicable rules, which are calculated on the basis of the volume-weighted average stock exchange price of the relevant share during the 20 trading days up to and including 2 January 2009, the last trading day before Porsche's acquisition of indirect control of Scania.
In the Offer, Porsche emphasised:
– that Porsche did not present the Offer voluntarily but only due to a legal obligation;
– that Porsche has no interest in acquiring any Scania shares; and
– that Porsche has no plans for Scania's future operations.
Porsche further stated that in its opinion, the Offer will not result in any substantial impact on Scania's future operations, its employees or management, including substantial impact or change in employment conditions or the locations where Scania operates.
The Scania Board of Directors' recommendation
In accordance with the provisions of the Takeover Rules of the NASDAQ OMX Nordic Exchange Stockholm, the Board of Scania has evaluated the Offer with the assistance of Deutsche Bank and Morgan Stanley.
The Board of Scania has based its recommendation on an assessment of factors that the Board has deemed relevant in relation to the Offer, including, but not limited to assumptions regarding Scania's business and financials.
Due to Porsche's majority holding in Volkswagen, the representatives of Volkswagen on Scania's Board of Directors, Mr. Martin Winterkorn, Mr. Francisco J. Garcia Sanz and Mr. Hans Dieter Pötsch, have abstained from participating in the Board's evaluation of the Offer. Further, Mr. Peter Wallenberg Jr was unable to participate in the Board meeting where the Board's recommendation was adopted.
The Board of Scania unanimously recommends that shareholders do not accept the Offer due to the following;
- Scania is a company with a strong, well positioned business with best in class profitability and excellent long-term prospects in heavy vehicles and services. The previously communicated plan of reaching 150,000 deliveries towards the mid of next decade remains unchanged.
- The Offer is the minimum price prescribed by applicable rules, which is approximately 15% lower than the pre-Offer price of Scania (i.e. 5 January 2009, when Porsche announced that it had acquired indirect control of Scania).
- Whilst recognising current financial market volatility, the Board believes that the Offer does not reflect the long-term value of Scania.
The position of the Board is supported by the fairness opinion provided by Deutsche Bank and Morgan Stanley, respectively. Both opinions conclude that as at 3 February, and based on and subject to the assumptions and other consideration set forth in such opinions, the "A Share Offer Consideration and the B Share Offer Consideration are inadequate from a financial point of view to the holders of the A Shares and B Shares respectively, other than Porsche, Volkswagen and their respective affiliates".
The fairness opinions from Deutsche Bank and Morgan Stanley are available in full at www.scania.com. Under the Takeover Rules the Board of Scania is required, based on Porsche's statements in the Offer Document, to express its views on the effects of the Offer on Scania. Given that Porsche in the Offer has stated that it has no plans for the future operations of Scania, the Board is not able to evaluate what the potential impact of the implementation of the Offer would be on Scania's future operations, its employees or management, including employment conditions or the locations where Scania operates.
Södertälje, 3 February 2009
Scania
The Board of Directors
* Due to Porsche's majority holding in Volkswagen, the representatives of Volkswagen on Scania's Board of Directors, Mr. Martin Winterkorn, Mr. Francisco J. Garcia Sanz and Mr. Hans Dieter Pötsch, have abstained from participating in the Board's evaluation of the Offer. Further Mr. Peter Wallenberg Jr was unable to participate in the Board meeting where the Board's recommendation was adopted.
Scania is one of the world's leading manufacturers of trucks and buses for heavy transport applications, and of industrial and marine engines. A growing proportion of the company's operations consists of products and services in the financial and service sectors, assuring Scania customers of cost-effective transport solutions and maximum uptime. Employing 35,000 people, Scania operates in about 100 countries. Research and development activities are concentrated in Sweden, while production takes place in Europe and South America, with facilities for global interchange of both components and complete vehicles. In 2007, invoiced sales totalled SEK 84.5 billion and net income amounted to SEK 8.6 billion.
