Enedo Oyj's Board of Directors' Statement on Inission AB's Mandatory Public Tender Offer for Enedo Oyj's Shares

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Enedo Oyj's Board of Directors' Statement on Inission AB's Mandatory Public Tender Offer for Enedo Oyj's Shares

Inission AB ("Inission" or the "Offeror") and Enedo Oyj ("Enedo" or the "Company") have announced in stock exchange releases dated on August 1, 2022 that Inission will make a mandatory purchase offer for all of Enedo's issued and outstanding shares ("Tender Offer").

The board of directors of Enedo has on September 5, 2022 decided to issue the following statement on the Tender Offer as required by the Securities Market Act (746/2012, as amended).

PURCHASE OFFER IN BRIEF

Inission AB ("Inission"), a North European contract manufacturer listed on Nasdaq First North Growth Market Stockholm, has on 1 July 2022 disclosed its duty to make a mandatory public tender offer in accordance with Chapter 11, Section 19 of the Finnish Securities Market Act (“Offer”) for all the shares and securities entitling to the shares in Enedo Plc ("Enedo" or the "Company"), an international designer and producer of high quality electronic power supplies and systems listed on Nasdaq Helsinki, as a result of an acquisition of 21,113,257 shares in Enedo from Joensuun Kauppa ja Kone Oy, Rausanne Oy, Soinitilat Oy and 10 other major shareholders (“Selling Shareholders”) of the Company for a purchase price of EUR 0.26 per share on 1 July 2022. Inission owns currently altogether 55,113,257 Enedo shares corresponding approximately to 80.43 per cent of all the shares and related voting rights in the Company.

The cash consideration to be offered in the mandatory public tender offer for each Enedo share validly tendered in accordance with the terms and conditions of the Offer will be EUR 0.26 (“Offer Price”). Alternatively, Inission will also offer a share consideration whereby 0.086 new Inission Class B shares listed on Nasdaq First North Growth Market Stockholm are offered for each Enedo share validly tendered in accordance with the terms and conditions of the Offer.

The Offer Price corresponds to the price agreed with the Selling Shareholders when Inission acquired approximately 31 per cent of all the shares in Enedo from the Selling Shareholders on 1 July 2022 in exchange for new Inission Class B shares. The Offer Price is also the highest price paid by Inission for any Enedo share during the six-month period preceding the date when Inission became obligated to make the Offer. The closing price of Enedo on Nasdaq Helsinki was EUR 0.27 on 30 June 2022, i.e. on the last trading day preceding the date when Inission became obligated to make the Offer.

The share exchange ratio to be used in the share consideration alternative of the Offer is the same share exchange ratio used with the Selling Shareholders when Inission acquired their Enedo shares on 1 July 2022 in exchange for new Inission Class B shares.

The closing price of Inission on Nasdaq First North Growth Market Stockholm was SEK 32.50 (EUR 3.03) on 30 June 2022, i.e. on the last trading day preceding the date when Inission became obligated to make the Offer.

Enedo has no other securities entitling to the shares in Enedo which should be subject to the mandatory public tender offer.

If Inission obtains more than 90 per cent of all the shares and related voting rights in Enedo as a result of the Offer, Inission will initiate mandatory redemption proceedings for the remaining shares in accordance with the Finnish Companies Act and, thereafter, Enedo will apply for delisting of its shares from Nasdaq Helsinki.

Inission estimates there to be significant untapped revenue, cost and financial synergies, which could be materialized in the future, if it manages to take full ownership of Enedo as a result of the Offer. The effect of the Offer on Inission’s profit and financial position is limited by the fact that Enedo already is Inission’s approximately 80.43 per cent owned subsidiary and also depends on the rate of acceptance of the Offer by Enedo shareholders and their preference for cash or share consideration. If all remaining Enedo shareholders accept the cash consideration in the Offer, the payment of the aggregate cash purchase price amounts to approximately EUR 3.5 million (SEK 36.0 million) and has a corresponding effect on Inission’s net debt position. The above amount corresponds to approximately EUR 0.17 (SEK 1.81) per each current Inission share. If all remaining Enedo shareholders accept the share consideration in the Offer, the respective new Class B shares in Inission represent approximately 5.45 per cent of all the shares and approximately 2.69 per cent of all the voting rights in Inission.

Inission does not expect the execution of the Offer to have any significant imminent effect on the business or assets or the position of the management or other employees of Inission or Enedo.

Pursuant to the Finnish Securities Markets Act Section 22 of Chapter 11, the offer period in the mandatory tender offer shall begin within a month from the publishing of the tender offer. However, the Finnish Financial Supervisory Authority has granted Inission an exemption to start the offer period by 15 September 2022. The offer period is expected to commence on or about 8 September 2022 at 9:30 am (Finnish time) and expire on or about 29 September 2022 at 4:00 pm (Finnish time) unless the offer period is extended in accordance with the terms and conditions of the Offer. The tender offer document is expected to be published on or about 8 September 2022 including detailed instructions and terms and conditions of the Offer.

Based on Inission’s understanding, the completion of the Offer does not require approval from the competition authorities.

Inission has sufficient financial arrangements in place to carry out the Offer as far as the offer consideration is paid in cash and the Board of Directors of Inission has been authorised by the Annual General Meeting of Inission to issue a sufficient number of new Class B shares in Inission to enable Inission to carry out the Offer also as far as the offer consideration is paid in new Class B shares in Inission.

Inission reserves the right to acquire shares in the Company before the commencement of the offer period, during the offer period and/or after the offer period of the Offer through public trading on Nasdaq Helsinki or otherwise.

In the Offer Inission will comply with the recommendation in accordance with Chapter 11, Section 28 of the Finnish Securities Market Act on the procedures to be complied with in public tender offers (Helsinki Takeover Code).

STATEMENT OF THE BOARD OF DIRECTORS

1. Background of the statement

In accordance with the Securities Market Act, Enedo's board of directors must publish a statement on the Tender Offer.

The statement must present a reasoned assessment of the Tender Offer from the point of view of Enedo and its shareholders, as well as the strategic plans presented by Inission in the Tender Offer and their likely effects on Enedo's operations and employment at Enedo.

For the purpose of issuing this statement, Inission has submitted the draft of the Tender Offer to board of directors of Enedo on 2 September 2022

While preparing the statement, Enedo's board of directors has used information that Inission has presented in the announcement regarding the Tender Offer published on August 1, 2022 and in the draft of the Tender Offer. Enedo's board of directors has not independently evaluated the information on the Tender Offer. For this reason, Enedo's board of directors' assessment of the effect of the Tender Offer on Enedo's business operations or personnel must be considered carefully.

2. The board's assessment from the perspective of Enedo and its shareholders

Introduction

When evaluating the Tender Offer, analyzing Enedo's potential alternative opportunities and deciding on its opinion, the board has taken several factors into consideration, such as Enedo's current financial situation, current position and future prospects, as well as the historical trading prices of Enedo's shares.

To support its evaluation of the Tender Offer, Enedo's Board of Directors has received an expert opinion on the fairness of the Tender Offer ("Fairness Opinion") from Aktia Alexander Corporate Finance Oy. In the Fairness Opinion dated September 2, 2022, in accordance with the assumptions and conditions presented therein, it is stated that the cash consideration offered for the shares is fair in the financial sense at the time of issuing the Fairness Opinion. The Fairness Opinion statement is attached to this statement in Appendix 1.

Board's assessment

Enedo's board of directors assesses, based on the elements considered essential for the evaluation of the Tender Offer, that the consideration offered by the Inission to Enedo's shareholders is fair. The assessment is based among other things on the following:

•         Enedo's current critical financial situation and liquidity and the fact that there is currently no full certainty of the adequacy of long-term, short-term or working capital financing;

  • Under certain circumstances, certain loans of Enedo might become convertible into shares at an agreed conversion price. Should this happen, it would have a significant dilutive effect

•         Offered -3.7 percent premium to Enedo's closing share price on Nasdaq Helsinki on June 30, 2022;

•      Illiquidity of the Enedo share and the concentration of the share ownership

•     The price of the purchase offer is the same at which Enedo's previous significant shareholders exchanged their shares for shares of Inission AB;

•      Aktia Alexander Corporate Finance Oy's Fairness Opinion statement.

The Board of Directors has determined that the Tender Offer is a positive option for the shareholders taking into account the risks and uncertainties and the terms of the draft of the Tender Offer.

3. Assessment of the strategic plans presented by the Offeror and their likely effects on Enedo's operations and employment at Enedo

Information provided by the Offeror in the Offer Document

Enedo's board of directors has evaluated the Offeror's strategic plans based on the information presented in the announcement regarding the Offeror's Tender Offer published on August 1, 2022, and in the draft of the Tender Offer document.

Based on the information provided by the Offeror, the Offeror's goal is to restore the Company's sustainable profitability and further develop its business worldwide. The Offeror focuses on securing long-term financial profitability and is committed to taking the necessary actions for this goal. The target of the Offeror is that Enedo will become a wholly owned subsidiary of the Offeror.

Board's assessment

Enedo's board of directors believes that the Inission has the necessary resources and expertise to support, stabilize and develop the Company and to provide the necessary short- and long-term additional financing. According to the board's view, these opportunities benefit Enedo's operations.

Enedo's board of directors believes that the Tender Offer offers a good and sustainable solution to Enedo's financial needs. In addition, Enedo's board believes that Tender Offer offers the Company the opportunity to continue operations (going concern), further develop its business and products, and provide jobs within the group in the future.

Enedo's board of directors considers that the information about the Inission's strategic plans for Enedo presented in the announcement published on August 1, 2022, and in the draft of the Tender Offer are of a general nature. However, taking into account the company's critical financial position, Enedo's board of directors estimates that it cannot be ruled out that the implementation of the Tender Offer could have an impact on Enedo's business operations, locations or the number of jobs.

As of the date of this statement, Enedo's board has not received any formal statement from Enedo's employees regarding the effects of the Purchase Offer on employment at Enedo.

4. Board recommendation

Enedo's board of directors has carefully evaluated the Tender Offer and its terms based on the draft of the Tender Offer, the Fairness Opinion statement and other available information.

Based on the above, Enedo's board of directors considers that the Tender Offer and the amount of consideration offered for its shares are fair for Enedo's shareholders. The Board does not give any guidance on the mutual superiority of cash and share consideration or give any recommendation related thereto. Each shareholder must evaluate himself, in connection with a possible approval, which consideration he wants to receive.

The Board of Directors bases its opinion on the assessment of matters and facts that the Board of Directors has deemed essential in the evaluation of the Tender Offer, including, among other things, information and assumptions about Enedo's current financial situation and solvency as well as business activities at the time of this opinion and their assumed development in the future.

Board chairman Olle Hulteberg and board member Fredrik Berghel have not participated in decision-making. Olle Hulteberg and Fredrik Berghel have considered themselves dependent on a significant shareholder and the author of the Tender Offer and have decided not to participate in the decision-making regarding this statement.

Antti Sivula as a board member owns shares in the Company. Each board member has independently assessed his own possibilities, free of side effects, to participate in the preparation of this statement and decision-making on recommending the Tender Offer to the shareholders and promoting the interests of the shareholders. Each of them has stated that their share ownership in the Company does not affect their ability to act as a member of the board of directors in accordance with their duty of care towards the shareholder collective.

The independence assessment of the board members can be found on Enedo's website.

5. Other matters

Enedo is committed to complying with the takeover bid code referred to in Chapter 11, Section 28 of the Securities Markets Act, issued on the procedures to be followed in public takeover bids.

This statement by Enedo's board of directors is not investment or tax advice in nature. The board cannot be required to specifically assess the general course development or investment-related risks. Shareholders should decide whether to accept or reject the Tender Offer independently, and shareholders should take into consideration all relevant information available to them, including the information presented in the Offer Document and this statement and other factors affecting the value of the shares.

In case Inission AB successfully acquires more than 90% of the shares in Enedo, the company will start the redemption procedure in accordance with Companies Act and will apply to remove Enedo's shares from trading.

5 September 2022

ENEDO, BOARD OF DIRECTORS

APPENDIX: 1. Aktia Alexander Corporate Finance Oy’s Fairness Opinion statement

For further information please contact Mr. Mikael Fryklund, CEO, tel. +358 40 500 6864.

DISTRIBUTIONNasdaq Helsinki OyPrincipal mediaEnedoEnedo is a European designer and producer of high-quality electronic power supplies and systems for critical equipment even in the most demanding environments. Enedo´s mission is to make electricity better – more reliable, more secure, more energy efficient – and just right to fit its purpose. Enedo´s three main product categories are Led Drivers, Power supplies and Power Systems. In 2021 the group´s revenue was EUR 36,4 million. Enedo has 330 employees, and its main functions are located in Finland, Italy, Tunisia and USA. The group´s head office is in Finland and parent company Enedo Oyj is listed on Nasdaq Helsinki Oy.

Attachment

  • Fairness Opinion 02.09.2022
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