Regulatory News:
This press release has been established by
Latécoère (Paris:LAT) and released in accordance with the
provisions of article 231-16 of the general regulation of the AMF
on September 16, 2019.
This document is an
unofficial English-language translation of the press release
relating to the filing of the draft response document. The French
version shall prevail.
THE DRAFT OFFER, THE DRAFT OFFER DOCUMENT
AND THE DRAFT RESPONSE DOCUMENT REMAIN SUBJECT TO REVIEW BY THE
AMF.
The draft response document (the “Draft Response
Document”) is available on the websites of Latécoère
(www.latecoere.aero) of the AMF (www.amf-france.org) and may be
obtained free of charge upon request to the registered office of
Latécoère located at 135, rue de Périole in Toulouse (31500).
I. PRESENTATION OF THE OFFER
Pursuant to Title III of Book II, and more specifically to
Articles 232-1 et seq. of the AMF General Regulation, SCP SKN
HOLDING I S.A.S., a simplified joint stock company (société par
actions simplifiée) whose registered office is located at 39, rue
de la Gare de Reuilly in Paris (75012), and registered with the
Company Registry of Paris under number 851 128 835 R.C.S. Paris1
(the “Offeror”), irrevocably proposes to the shareholders of
Latécoère, a public limited company (société anonyme) whose
registered office is located at 135, rue de Périole in Toulouse
(31500), and registered in the Company Registry of Toulouse under
number 572 050 169 R.C.S. Toulouse (“Latécoère” or the
“Company”), whose shares are admitted to trading on the
regulated market of Euronext Paris (“Euronext Paris”) under
ISIN code FR0000032278, ticker symbol “LAT”, to acquire all their
shares by means of a cash tender offer under the conditions
described below, at a share price of 3.85 euros per Latécoère share
(the “Offer Price”).
The Offer follows the acquisition by the Offeror, on June 26,
2019, of 24,697,727 Latécoère shares representing as many voting
rights, i.e. a stake of 26,05% of the share capital and 25.73% of
the theoretical voting rights of the Company2, from certain
investment funds managed by affiliates of Apollo Global Management,
LLC, Monarch Master Funding 2 (Luxembourg) S.à.r.l. and CVi
Partners SARL (the “Sellers”), for a total amount of
106,838,909.32 US dollars, representing a price of 3.85 euros per
Latécoère share based on the conversion rate agreed between the
parties of EUR 1 = USD 1.1236 (the “Acquisition of the
Stake”).
The Offer targets all outstanding Latécoère shares not held,
directly or indirectly, alone or in concert, by the Offeror,
representing at the date hereof, a maximum number of 70,470,791
shares of the Compay3 representing 74.05% of the share capital and
74.36% of the voting rights of the Company, determined as
follows:
Outstanding shares4
94,818,518
minus shares held by the
Offeror
24,697,727
Total number of shares
targeted by the Offer
70,120,791
It is indicated that, as of the date of the Draft Response
Document, the free shares of the Company allocated at the meetings
of the Board of Directors of the Company on 2 March 2016, 5 March
2018 and 5 March 2019, which represent a number equal to 1,334,206
Latécoère shares, will, unless in exceptional cases of waiver of
their unavailability provided by applicable legal or regulatory
provisions (death or disability of the beneficiary):
(i) for 146,290 of them, shares still in the
vesting period at the closing date of the Offer, which are
therefore not targeted by the Offer; and
(ii) for 1,187,916 of them, shares that will
still be in the retention period at the closing date of the Offer,
and which are targeted by the Offer and therefore included in the
70,120,791 shares targeted by the Offer indicated above. Among
these 1,187,916 shares under retention period, it is specified that
1,000,716 are registered shares held by employees and corporate
officers of the Company and the remaining 187,200 shares were
contributed to the FCPE B via the employee saving scheme and are
now held by the FCPE B.
The beneficiaries of free shares and the FCPE B will be offered
to subscribe to the liquidity mechanism described in sections 1.3.7
and 1.3.8 of the Draft Response Document and sections 2.2.6 and
2.2.7 below.
To the Company’s knowledge, there are no other equity securities
or financial instruments that could give access, immediately or in
the future, to share capital or voting rights of Latécoère.
The Offer will be carried out in accordance with the normal
procedure pursuant to Articles 232-1 et seq. of the AMF General
Regulation and will be open for a period of 25 trading days,
without prejudice to the possible reopening of the Offer by the AMF
in accordance with Article 232-4 of the AMF General Regulation.
The Offer is subject to the withdrawal threshold described in
section 2.6 of the Draft Offer Document.
II. CONTEXT ANDCHARACTERISTICS OF THE
OFFER
2.1. Context of the Offer
The Offer is being filed following the announcement of Latécoère
on April 2, 2019, by way of a press release, of the signing of an
acquisition agreement regarding the transfer by the Sellers to the
Offeror of their entire stake in the Company, representing
approximately 26% of the share capital of the Company (the
“Share Purchase Agreement”).
The Company welcomed this proposed transaction, during which the
Offeror expressed its support for the strategy proposed by
management and approved by the Board of Directors. The Company
confirmed on that occasion that the nomination of three members
proposed by Searchlight would be submitted to its Board of
Directors.
On June 26, 2019, the Offeror completed the Acquisition of the
Stake for a total amount of 106,838,909.32 US dollars, representing
a price of 3.85 euros per Latécoère share based on the euro-dollar
conversion rate on the signing date of the Share Purchase
Agreement5.
The Share Purchase Agreement contains a top-up provision in the
event that, within twelve months following the completion of the
Acquisition of the Stake, the Offeror, directly or indirectly,
alone or in concert, files with the AMF an exclusively cash tender
offer or including a cash component at a price per Latécoère share
higher than that of the Acquisition of the Stake (i.e. 3.85 euros
per share, adjusted, if necessary (a) in proportion to the new
outstanding number of Latécoère shares in the event of any
subdivision or consolidation of shares completed at any time
between the date of the Share Purchase Agreement and the date of
payment of the additional consideration, and (b) any distribution
of dividend or reduction of share capital of the Company made
between these two same dates), and whose outcome would be
successful (i.e., as a result of which the Offeror would hold more
than the threshold referred to in article 231-9 I 1° of the AMF
General Regulation, such threshold being more than 50% of the share
capital or voting rights of the Company).
In such case, the Offeror shall pay to the Sellers an additional
consideration (the “Top-Up”) exclusively in cash and in US dollars
equal to the sum, if positive, of:
(a) the number of shares acquired from the Sellers pursuant to
the Acquisition of the Stake multiplied by the difference, if
positive, between (i) the highest price per Latécoère share paid by
the Offeror in the tender offer up to a maximum price of 4 euros,
and (ii) 3.85 euros (as adjusted in the cases indicated above, if
applicable); and
(b) the number of shares acquired from the Sellers pursuant to
the Acquisition of the Stake, multiplied by 50% of the difference
between (i) the highest price per Latécoère share paid by the
Offeror in the tender offer (if it exceeds 4 euros) and (ii) 4
euros.
The payment of the Top-Up is subject to the completion of the
aforementioned tender offer and should be paid by the Offeror to
the Sellers no later than the 12th business day following the last
settlement-delivery of the said tender offer.
It is specified for the avoidance of doubt that the filing of
the Offer will not give rise to any additional consideration for
the benefit of the Sellers as long as the Offer Price does not
exceed 3.85 euros per Latécoère share.
On June 28, 2019, the Offeror announced its intention to file
this Offer.
Prior to the filing of the Offer, the Company has made available
to the Offeror a certain amount of information concerning it in the
context of a “data room” procedure in accordance with the
recommendations of the AMF on the procedures of data room contained
in the “Guide de l’information permanente et de la gestion de
l’information privilégiée DOC-2016- 08”. The Company considers that
this data room did not contain any privileged information relating
to the Company which would not have been made public as of the date
hereof.
2.2. Terms of the Offer
2.2.1. Main terms of the
Offer
In accordance with the provisions of Article 231-13 of the AMF
General Regulation, JPMorgan Chase Bank N.A., acting through its
Paris branch, acting on behalf on the Offer as presenting banks,
have filed the Offer with the AMF on September 16, 2019. It is
specified that only Natixis, acting as presenting and guaranteeing
bank, guarantees the content and the irrevocable nature of the
commitments undertaken by the Offeror in connection with the
Offer.
The Offer would be carried out in accordance with the normal
procedure pursuant to Articles 232-1 et seq. of the AMF General
Regulation.
The Offeror irrevocably undertakes to purchase from the
shareholders of the Company all the shares targeted by the Offer
and which will be tendered to the Offer, at a price of 3.85 euros
per Latécoère share, to be paid exclusively in cash, for a period
of 25 trading days, unless reopened by the AMF in accordance with
Article 232-4 of the AMF General Regulation.
2.2.2. Adjustment of the terms of
the Offer
In the event that between the date hereof and the date of the
last settlement-delivery of the Offer (included), the Company makes
any form of distribution of (i) a dividend, interim dividend,
reserve, premium, or any other distribution (in cash or in kind),
or (ii) to a redemption or reduction of its share capital, and in
both cases, for which the detachment date or the record date is set
before the date of the last settlement-delivery of the Offer, the
Offer Price would be adjusted accordingly to take into account such
transaction.
Any adjustment of the Offer Price would be subject to the prior
approval of the AMF and will be subject of a press release.
2.2.3. Number and type of shares
targeted by the Offer
It is recalled that, at the date of the Draft Response Document,
in accordance with the terms of the Draft Offer Document, the
Offeror holds, directly or indirectly, alone or in concert,
24,697,727 shares representing approximatively 26.05% of the share
capital and 25.73% of the theoretical voting rights (calculated in
accordance with Article 223-11 of the AMF General Regulation).
According to Article 231-6 of the AMF General Regulation, the
Offer targets all outstanding Latécoère shares not held, directly
or indirectly, alone or in concert, by the Offeror, representing at
the date of the Draft Response Document, a maximum total number of
70,120,791 shares of the Company representing 73.93% of the share
capital and 74.27% of the voting rights of the Company, determined
as follows:
Outstanding shares6
94,818,518
minus shares held by the
Offeror
24,697,727
Total number of shares
targeted by the Offer
70,120,791
It is indicated that, as of the date of the Draft Response
Document, the free shares of the Company allocated at the meetings
of the Board of Directors of the Company on 2 March 2016, 5 March
2018 and 5 March 2019, which represent a number equal to 1,334,206
Latécoère shares, will, unless in exceptional cases of waiver of
their unavailability provided by applicable legal or regulatory
provisions (death or disability of the beneficiary):
(i) for 146,290 of them, shares still in the
vesting period at the closing date of the Offer, which are
therefore not targeted by the Offer; and
(ii) for 1,187,916 of them, shares that will
still be in the retention period at the closing date of the Offer,
and which are targeted by the Offer and therefore included in the
70,120,791 shares targeted by the Offer indicated above. Among
these 1,187,916 shares under retention period, it is specified that
1,000,716 are registered shares held by employees and corporate
officers of the Company and the remaining 187,200 shares were
contributed to the FCPE B via the employee saving scheme and are
now held by the FCPE B.
The beneficiaries of free shares and the FCPE B will be offered
to subscribe to the liquidity mechanism described in sections 1.3.7
and 1.3.8 of the Draft Response Document and sections 2.2.6 and
2.2.7 below.
To the Company’s knowledge, there are no other equity securities
or financial instruments that could give access, immediately or in
the future, to share capital or voting rights of Latécoère.
2.2.4. Regulatory, administrative
and antitrust clearances
Clearance from the Committee on
Foreign Investment in the United States
In accordance with the provisions of Article 231-32 of the AMF
General Regulation, the opening of the Offer was subject to the
approval of the Committee on Foreign Investment in the United
States (the “CFIUS”), pursuant to the Defense Production Act
of 1950, relating to foreign investments made in the United States
of America.
A notification to the CFIUS has been made on July 3, 2019. The
CFIUS authorization was obtained on July 25, 2019.
Clearance from the Ministry of
Economy
In accordance with the provisions of Article 231-32 of the AMF
General Regulation, the opening of the Offer is subject to the
prior approval of the French Ministry of the Economy pursuant to
Article L. 151-3 of the French Monetary and Financial Code relating
to foreign investments made in France.
A request for prior authorization was filed with the French
Ministry of Economy on June 27 2019.
Authorization by the German
competition authority (Bundeskartellamt)
On July 1, 2019, the Offeror filed an application for approval
of the proposed acquisition under the Offer with the
Bundeskartellamt. The approval was obtained on July 12, 2019.
2.2.5. Situation of the
beneficiaries of free shares and liquidity mechanism
The table below sets out the main characteristics of the free
shares allocated by the Company at the date hereof:
Plan
MIP 1
Plan 2018
MIP 2
Tranche 1
Tranche 2
Tranche 3
Tranche 4
Tranche 1
Tranche 2
Tranche 3
Date of the general meeting of
shareholders
15/07/2015
15/07/2015
03/06/2016
03/06/2016
03/06/2016
03/06/2016 and 14/05/2018
Date of the decision of the Board of
Directors on the shares attributable to the beneficiaries
22/09/2015
10/11/2016 and
19/05/2017
05/03/2018
N/A
16/01/2018 and
05/03/2018
16/01/2018 and
05/03/2019
16/01/2018
Total number of free shares attributable
under conditions
350,050
495,894
847.132
847,132
N/A
513,100
568,800
448,8007
Number of beneficiaries
4
0
7
0
1381
16
21
7
Date of the free shares granted by the
Board of Directors
02/03/2016
10/03/2017
05/03/2018
05/03/2019
05/03/2018
05/03/2019
03/2020
03/2021
Total number of free shares granted
350,050
0
423,566
0
471,900
146,290
-
-
Vesting date of free shares
02/03/2018
02/03/2019
05/03/2019
05/03/2020
05/03/2019
05/03/2020
05/03/2021
05/03/2022
Total number of free shares vested
350,050
0
423,566
0
414,300
-
-
-
End date of the retention
period
02/03/2020
02/03/2021
05/03/2020
03/2021
05/03/2020
03/2021
03/2022
03/2023
Cumulative number of shares cancelled or
lapsed
0
495,894
423,566
847,132
57,600
366,810
-
-
Total number of remaining attributable
free shares
0
0
0
0
0
0
568,800
448,800
Unless in exceptional cases of waiver of their unavailability
provided by applicable legal or regulatory provisions (death or
disability of the beneficiary):
(i) for the 146,290 free shares granted by
the Board of Directors on March 5, 2019 under tranche 1 of the Plan
MIP 2, and for which the final vesting has not occurred yet, such
free shares will still be in the course of the vesting period at
the closing date of the Offer and are therefore not targeted by the
Offer (the “Free Shares under Vesting Period”);
(ii) for the 1,187,916 free shares granted,
corresponding to the sum of:
a) the 350,050 free shares granted by the
Board of Directors on March 2, 2016 under tranche 1 of the Plan MIP
1,
b) the 423,566 free shares granted by the
Board of Directors on March 5, 2018 under tranche 3 of the Plan MIP
1, and
c) the 227,100 free shares granted by the
Board of Directors on March 5, 2019 under the Plan 2018 and which
were not contributed by the employees to the FCPE via the employees
saving scheme;
for which the retention period will not have expired at the
closing date of the Offer, are targeted by the Offer (the “Free
Shares under Retention Period”).
2.2.6. Liquidity
mechanism
For Free Shares under Retention Period
relating to the tranche 1 of the Plan MIP 1
Free Shares under Retention Period relating to the tranche 1 of
the Plan MIP 1 (corresponding to 350,050 shares to date) (the
“Free Shares 1”) are offered a liquidity mechanism
consisting in reciprocal put and call options between the
beneficiaries of the Free Shares 1 (the “Beneficiaries 1”)
and the Offeror.
Under the terms of this liquidity mechanism:
(i) Beneficiaries 1 will be granted with a
put option allowing them to sell all (and only all) their Free
Shares 1 to the Offeror (or any entity that may be substituted to
it) within the 30 calendar days as from March 3, 2020 subject that
on such date the Offeror holds, alone or in concert, more than 75%
of the share capital of the Company; and
(ii) the Offeror (or any entity that may be
substituted to it) will be granted with a call option allowing it
to acquire all (and only all8) the Free Shares 1 from the
Beneficiaries 1 within the 60 calendar days as from the first
business day following the expiry date of the exercise period of
the put option abovementioned.
In the event such put or call options are exercised, the
purchase price of the Free Shares 1 will correspond to the Offer
price (i.e. €3.85 per Latécoère share); it being specified that in
case of occurrence of an event having a significant impact on the
valuation of the Company before March 3, 2020, the parties will
agree in good faith in order to subsequently adjust the price. In
case of absence of agreement, an expert will be designated to
determine the amount at stake.
For Free Shares under Retention Period
relating to the tranche 3 of the Plan MIP 1, to the Plan 2018, to
the Free Shares under Vesting Period and to the shares that have
not been attributed yet
Free Shares under Retention Period relating to the tranche 3 of
the Plan MIP 1 (i.e. 423,566 shares to date) and to the Plan 2018
registered shares held by employees (i.e. 227,100 shares), Free
Shares under Vesting Period (i.e. 146,290 shares) and free shares
that have not been attributed yet but that are still attributable
under tranche 2 and 3 of the Plan MIP 2 (i.e. 1,017,600 shares)
(together the “Free Shares 2”, corresponding to a maximum of
1,814,556 shares) are offered a liquidity mechanism consisting in
reciprocal put and call options between the beneficiaries of such
Free Shares 2 (the “Beneficiaries 2”) and the Offeror.
Under the terms of this liquidity mechanism:
(i) Beneficiaries 2 will be granted with a
put option allowing them to sell all (and only all) their Free
Shares 2 to the Offeror (or any entity that may be substituted to
it) within the 30 calendar days as from the first business day
following the date of the first anniversary of the expiry date of
the retention period of such free shares (the “Exercise
Date”), subject that, on the Exercise Date the Offeror holds,
alone or in concert, more than 75% of the share capital of the
Company; and
(ii) the Offeror (or any entity that may be
substituted to it) will be granted with a call option allowing it
to acquire all (and only all 8 ) the free shares from the
Beneficiaries 2 within the 30 calendar days as from the first
business day following the expiry date of the exercise period of
the put option abovementioned.
In the event such put and call options are exercised, the
purchase price of the Free Shares 2 will be set as follows:
a) in the event the shares of the Company are
not listed on Euronext Paris anymore on the Exercise Date, the
purchase price of the Free Shares 2 will be calculated on the basis
of the multiple of the 2018 current gross operating surplus induced
by the Offer price;
b) in the event the Offeror holds, alone or
in concert, more than 75% of the share capital of the Company and
the shares of the Company are still admitted to trading on Euronext
Paris on the Exercise Date, the sale price of Free Shares 2 will be
equal to the average price weighted by the transaction volumes of
the Latécoère share during the twenty trading days preceding the
Exercise Date. By way of exception, in the event that the average
daily trading volume of Latécoère shares during the twenty trading
days preceding the Exercise Date is less than 0.05% of the
Company's share capital on that date, the price of the Free Shares
2 will be calculated in the same manner as in (a) above.
It will also be provided that in the event that the Offeror
holds, alone or in concert, more than 75% of the Company's share
capital and the Company's shares remain admitted to trading on
Euronext Paris, the Company will be required to subscribe to and
maintain a liquidity and animation agreement with an investment
services provider.
For the avoidance of doubt, the Beneficiaries 1 and the
Beneficiaries 2 do not act in concert with the Offeror. They are
invited to contact the Offeror in order to enter into the liquidity
mechanisms abovedescribed, at the latest on November 8, 2019
(included).
Pursuant to Article L. 233-9, I., 4° of the French Commercial
Code, and subject to the Offer holding, alone or in concert, more
than 75% of the share capital of the Company, the Free Shares under
Retention Period for which a call option has been granted by the
Offeror under the abovementioned liquidity mechanism before the
closing of the Offer (and before the closing of the Reopened Offer,
if any) will be assimilated to the shares held by the Offeror and
will not be transferred to the Offeror in the context of a
potential squeeze-out.
2.2.7. Situation of the Latécoère
shares held through the Company Mutual Fund (FCPE)
The Latécoère shares held through the Company Mutual Funds A and
B are targeted by the Offer.
The supervisory board of the FCPE A and B, which respectively
hold 124,000 and 2,032,300 Latécoère shares (including, for the
latter, the 187,200 free shares granted under Plan 2018, which were
contributed to the FCPE by employees under the company savings
plan, and which are now held by the FCPE B), will decide whether or
not to tender the Latécoère shares they hold.
In addition, the FCPE B is offered to enter into a liquidity
mechanism consisting in reciprocal put and call options between the
FCPE B and the Offeror.
Under the terms of this liquidity mechanism:
(i) the FCPE B will be granted a put option
allowing it to sell all (and only all9) its Latécoère shares to the
Offeror (or any entity that may be substituted to it) within the 30
calendar days as from July 2024, subject that, on such date the
Offeror holds, alone or in concert, more than 75% of the share
capital of the Company; and
(ii) the Offeror (or any entity that may be
substituted to it) will be granted with a call option allowing it
to acquire all (and only all) the Latécoère shares owned by the
FCPE B within the 30 calendar days as from the first business day
following the expiry date of the exercise period of the put option
abovementioned.
In the event such put and call options are exercised, the
purchase price of the Latécoère shares owned by the FCPE B will be
set as follows:
a) in the event the shares of the Company are
not listed on Euronext Paris anymore in July 2024, the purchase
price of the Latécoère shares owned by the FCPE B will be
calculated on the basis of the multiple of the 2018 current gross
operating surplus induced by the Offer price;
b) in the event the Offeror holds, alone or
in concert, more than 75% of the share capital of the Company and
the shares of the Company are still admitted to trading on Euronext
Paris on the Exercise Date, the sale price of the shares held by
the FCPE B will be equal to the average price weighted by the
transaction volumes of the Latécoère share during the twenty
trading days preceding the Exercise Date. By way of exception, in
the event that the average daily trading volume of Latécoère shares
during the twenty trading days preceding the Exercise Date is less
than 0.05% of the Company's share capital on that date, the price
of the shares of the FCPE B will be calculated in the same manner
as in (a) above.
For the avoidance of doubt, the FCPE B does not act in concert
with the Offeror. The FCPE B is invited to contact the Offeror in
order to enter into the liquidity mechanism above described, at the
latest on November 8, 2019 (included).
Pursuant to Article L. 233-9, I., 4° of the French Commercial
Code, and subject to the Offer holding, alone or in concert, more
than 75% of the share capital of the Company, the share held by the
FCPE B for which a call option has been granted by the Offeror
under the abovementioned liquidity mechanism before the closing of
the Offer (and before the closing of the Reopened Offer, if any)
will be assimilated to the shares held by the Offeror and will not
be transferred to the Offeror in the context of a potential
squeeze-out.
2.2.8. Intentions regarding a
squeeze-out or a delisting following the Offer
Intentions regarding a
squeeze-out following the Offer
If the legal conditions are fulfilled, the Offeror intends to
implement a squeeze-out at the end of the Offer under the
conditions required by applicable regulations.
In the event that the number of Company shares not tendered to
the Offer by the Company’s minority shareholders does not represent
more than 10% of the share capital and voting rights of the
Company, the Offeror intends to request, within three months of the
closing date of the Offer, in accordance with the provisions of
Article L. 433-4 II of the French Monetary and Financial Code and
Articles 237-1 et seq. of the AMF General Regulation, the
implementation of a squeeze-out procedure to transfer the shares
not tendered to the Offer, in consideration for a compensation for
compensation equal to the Offer Price, net of all costs, it being
specified that this squeeze-out procedure will lead to the
delisting of the Company’s shares from Euronext Paris.
The amount of the indemnity will be paid, net of all fees, after
the squeeze-out, into a blocked account opened for this purpose
with Natixis, designated as the centralizing agent for the
squeeze-out indemnification operations. After the closure of the
affiliates’ accounts, Natixis, upon presentation of the balance
certificates issued by Euroclear France, will credit the
depositaries responsible for the amount of the indemnity, with the
latter being responsible for crediting the accounts of holders of
Latécoère shares.
In accordance with Article 237-8 of the AMF Regulations,
unrestricted funds corresponding to the indemnification of
Latécoère shares whose beneficiaries have remained unknown will be
retained by Natixis for a period of ten (10) years from the date of
the delisting and paid to the Caisse des dépôts et consignations at
the end of this period. These funds will be held at the disposal of
the beneficiaries, subject to the thirty-year prescription for the
benefit of the State.
Intentions regarding a
delisting of the Company’s shares
The Offeror reserves the right, if it does not implement a
squeeze-out, to request Euronext Paris to delist the shares of the
Company from the Euronext Paris market.
It is recalled that the procedure for the implementation of the
aforementioned delisting is governed by the provisions of Article
6905 of Book I (Harmonised Rules) of the Euronext Market Rules. In
this context, Euronext Paris may remove securities admitted to
listing and/or trading on its market at the written request of the
Company, which must indicate the reasons for its request. Euronext
Paris may decide not to delist the shares as requested if such
delisting would adversely impact the fair, orderly and efficient
functioning of the market Euronext Paris. Euronext Paris may also
subject any removal of securities to such additional requirements
as it deems appropriate.
III. REASONNED OPINION OF THE BOARD OF
DIRECTORS OF THE COMPANY
In accordance with the provisions of Article 231-19 of the AMF
General Regulation, a meeting of the Board of Directors of the
Company was held on 12 September 2019, convened and chaired by
Pierre Gadonneix, Chairman of the Board of Directors, to examine
the Offer and render a reasoned opinion on the interest and the
consequences of the Offer for the Company, its shareholders and its
employees.
All members of the Board of Directors were physically present
and / or by audio conference.
The deliberation of the Board of Directors containing the
reasoned opinion is reproduced below.
“It is specified that the three directors appointed by
Searchlight, the Offeror, namely Mr. Ralf Ackermann, Ms. Helen Lee
Bouygues and Mr. Grégoire Huttner, have decided not to take part in
the vote on the Board of Directors’ reasoned opinion on the
Offer.
The Chairman reminds that, on the basis of the information
provided and in accordance with the provisions of Article 231-19 of
the AMF General Regulation, the Board of Directors must deliver its
reasoned opinion on the interest of the Offer and its consequences
for employees, the Company and its shareholders.
After deliberation, the Board of Directors, having considered
(i) the terms of the Offer, (ii) the Offeror’s reasons and
intentions, and the valuation elements prepared by J.P. Morgan and
Natixis as set out in the draft information notice, (iii) the
valuation and analysis of the related agreements, as set out in the
independent expert’s report, (iv) the opinion of the ad hoc
committee and (v) the opinion of the Works Council,
acknowledges that:
- the Offer is in line with Searchlight
Capital Partners’ acquisition, on June 26, 2019, of a block of
shares of the Company representing approximately 26% of the share
capital (the « Block Acquisition») from certain investment
funds managed by affiliates of Apollo Global Management LLC and
Monarch Master Funding 2 (Luxembourg) and CVi Partners SARL;
- as the Offeror holds less than 30% of the
share capital or voting rights of the Company, the Offer is
voluntary;
- the Offer will lapse if, on the date of its
closing, Searchlight does not hold a number of shares of the
Company representing a fraction of the share capital or voting
rights of the Company greater than 50%;
- the opening of the Offer remains subject to
the obtaining of the required authorization from the French
Minister of Economy for investment control (it being specified that
the authorization from the Committee on Foreign Investment in the
United States (CFIUS) was obtained on July 25, 2019 and the
required authorization from the German competition authority was
obtained on July 12, 2019);
- the Offeror intends to request the AMF
under the Offer to implement a mandatory squeeze-out of the
Company’s shares and to request the delisting of the Company’s
shares from the regulated market of Euronext in Paris if the shares
not presented in the Offer do not represent more than 10% of the
Company’s share capital and voting rights or any other percentage
of the Company’s share capital and voting rights that would be
applicable at the closing of the takeover bid. Under the
squeeze-out, shares of the Company other than those held by the
Offeror that have not been tendered to the Offer will be
transferred to it for the same compensation as the Offer price,
i.e. €3.85 per share, net of any costs;
- employees and corporate officers holding
free shares as well as FCPE B, subject to the decision of its
Supervisory Board, will be offered the opportunity to subscribe to
the liquidity mechanism consisting of cross promises to buy and
sell between the beneficiaries and the Offeror.
also notes that:
- the price of €3.85 per share of the
Company, proposed in the Offer, reflects a premium of 34.1% on the
Company’s closing price on June 28, 2019 (last trading day prior to
the announcement of the Offer) and 29.7%, 22.3% and 23.8%
respectively compared to the average of the prices weighted by
trading volumes over the one, three and six months respectively
preceding June 28, 2019;
- the price offered is identical to the price
offered by the Offeror in connection with the Company’s Block
Acquisition, namely €3.85 per share of the Company;
- the Offer price compares favorably with all
the valuation criteria as presented in the Offer price assessment
elements prepared by Natixis and JP Morgan, the institutions
presenting the Offer, and set out in section 3 of the Offeror’s
draft information notice.
further notes that the Offeror’s intentions, as described
in the draft information notice, are as follows:
- in terms of the Company’s industrial and
commercial strategy and policy, the Offeror intends to support the
existing management team and the development of the Company. It
does not intend to modify the strategic orientations implemented by
Latécoère in order to pursue its development. It does not intend to
modify Latécoère’s industrial, commercial and financial strategy or
policy;
- in terms of employment, the Offer is in
line with Latécoère’s business continuity and development strategy
and should not have a particular impact on Latécoère’s workforce,
salary policy or human resources management policy. The Offer is
therefore not expected to have any impact on employment at
Latécoère
- in the area of dividends, at this stage,
Searchlight does not intend to change the dividend distribution
policy. However, it reserves the right to review the Company’s
dividend distribution policy at the end of the Offer in the light
of changes in the Company’s distribution capacity.
The Board of Directors has taken note of:
- the independent expert’s conclusion that
the Offer price of €3.85 per share is fair from a financial point
of view to Latécoère shareholders in the context of the Offer and
in the event that the mandatory squeeze-out procedure is
implemented at the end of the Offer, in particular after applying
and comparing the main valuation methods for the shares; In this
respect, the Independent Expert notes in particular that the
proposed price shows a premium of +34% compared to the closing
price before the announcement of the Offer, and premiums of between
+18% and +29% compared to the weighted average volume prices over 1
month, 3 months, 6 months and 12 months; the Independent Expert
also points out that the price offered is above the ranges of
values resulting from valuation methods deemed relevant, based on a
multi-criteria approach; the Independent Expert also points out
that the agreements that may have a significant influence on the
assessment of the Offer, namely the block sale contract, the
executive compensation mechanisms and the liquidity mechanisms
offered to holders of free shares, do not contain any provisions
that would call into question the fairness of the Offer from a
financial point of view;
- the work carried out by the ad hoc
committee; and
- the favorable opinion of the Works Council
as mentioned above.
After an exchange of views on the draft Offer, after analysis,
in particular, of the Offeror’s draft information notice, which
includes the Offeror’s intentions, the draft takeover response
document prepared by the Company, the independent expert’s report
and the opinion of the ad hoc committee and the Works Council, the
Board of Directors:
decides unanimously by the directors who took part in the
vote, to issue a favorable opinion on the draft Offer as presented,
considering that the Offer is in accordance with the interests:
- of the Company’s employees, the Offer not
having any particular impact on employment;
- the Company, in that the backing of a solid
controlling shareholder, such as the Offeror, will support the
Company’s development strategy in France and abroad and its
participation in the consolidation, as well as its research and
development activities; and
- the Company’s shareholders, as the latter
will benefit, if they so wish, from an immediate liquidity
opportunity on the entirety of their participation at a price per
share representing a premium of 34.1% on the Company’s closing
price on June 28, 2019 (last trading day preceding the announcement
of the Offer) and, respectively, of 29.7%, 22.3% and 23.8% compared
to the average of the prices weighted by trading volumes over one,
three and six months respectively preceding that same date,
decides, therefore unanimously by the directors who took
part in the vote, to recommend to those of the shareholders who
would like to benefit from a certain liquidity, to tender their
shares to the Offer,
approves unanimously by the directors who took part in
the vote the Company’s draft takeover response document, the draft
"Other Information" document relating to the Company’s legal,
financial, accounting and other characteristics, as well as the
draft press release relating to the Board’s reasoned opinion, and
gives full powers to the Company’s Chief Executive Officer to
finalize, sign and file these documents with the AMF.
Claire Deyfus-Cloarec and Pierre Gadonneix have indicated that
they intend to tender their shares to the Offer, it being specified
that there is no statutory provision requiring directors to hold a
minimum number of shares. Yannick Assouad has indicated that she
intends not to tender its shares to the Offer as soon as they are
reinvested in the Offeror’s capital as part of the incentive scheme
set up for the benefit of the Company’s managers and employees.
In addition, after deliberation, the Board of Directors decides,
unanimously by the directors who took part in the vote, to tender
to the Offer all of the Company’s treasury shares, excluding the
treasury shares allocated to the liquidity contract entered into
with Gilbert Dupont, shares intended to be cancelled and those that
may be delivered under the executive and employee incentive plans,
i.e. a total of 369,410 shares to be tendered to the Offer.”
IV. OPINION OF THE WORKS COUNCIL
In accordance with the provisions of Articles L. 2323-35 et seq.
Of the Labor Code, the works council (comité d’entreprise) of
Latécoère was consulted in the context of the
information-consultation of the representative bodies of the
Company’s employees and rendered, on 26 July 2019, a favorable
opinion on the proposed Offer. This opinion is reproduced in its
entirety in Appendix 1 of the Draft Response Document, in
accordance with the provisions of Article 231-19 of the AMF
Regulations and Article L. 2323-39 of the Labor Code.
The works council of Latécoère has appointed the expert firm
Syncea, pursuant to the provisions of Articles L. 2323-38 et seq.
of the Labor Code. Syncea’s report is reproduced in its entirety in
Appendix 2 of the Draft Response Document, in accordance with the
provisions of Article 231-19 of the AMF General Regulation and
Article L. 2323-39 of the Labor Code.
V. REPORT OF THE INDEPENDENT EXPERT IN
ACCORDANCE WITH ARTICLE 261-1 OF THE AMF REGULATIONS
Pursuant to article 261-1 of the RGAMF, the Board of Directors
of the Company has appointed Finexsi as an independent expert to
report on the financial terms of the Offer and a possible Squeeze
out. The conclusion of the report dated September 16, 2019 is
reproduced below:
The conclusion of Finexsi is the following:
“The Offer price of €3.85 per share corresponds to the price of
the transaction concluded between the Offeror and the investment
funds Apollo, Monarch and CVI Partners, namely the Offeror’s
acquisition on 1 April 2019 of a 26% block of the Company’s shares.
This price constitutes a direct and relevant reference because it
is the result of (i) a very open and competitive process for the
sale of the Company and (ii) a negotiation between independent
parties. We were also able to verify that the agreements concluded
between the Offeror and the Sellers are not such as to cause
unequal treatment of the Company’s other shareholders in the
framework of this Offer. This Offer gives the Company’s minority
shareholders immediate access to liquidity, the price of which
reflects a 34% premium on the closing price before announcement of
the Offer, and premiums of between 18% and 29% in relation to the
1-month, 3-month, 6‑month and 12-month volume weighted average
price. The Latécoère share price did not attain the Offer price
following the transaction between the Offeror and Apollo, Monarch
and CVI Partners or after announcement of the Offer. The Company’s
share is historically highly volatile, reflecting market perception
of the Company’s intrinsic risk.
The Offer price reflects a 16% premium on the central value
resulting from the discounted cash flow valuation, based on
management projections which include anticipated revenue growth and
significant improvements in the Company’s profitability, in
particular due to the LiFi technology, which is not yet marketed.
From our standpoint, the use of these management projections in the
DCF valuation consequently gives the Company’s full value.
We also find that the Offer price yields premiums on the values
derived from comparable companies (39% on the central value) and
comparable transactions (2%). A synthesis of analysts’ target
prices before announcement of the Offer yields a 6% discount on the
Offer price, though we consider that in this particular instance
the criterion should be regarded as of secondary importance.
From our review of agreements that could have a material impact
on assessment of the Offer, namely the block acquisition agreement,
the arrangements for the remuneration of senior executives and the
liquidity arrangements offered to holders of free shares, described
in the Draft Offer Document, we consider that they do not contain
provisions likely to cast doubt on the fairness of the Offer from a
financial standpoint.
Consequently, it is our opinion that the Offer price of €3.85
per share is fair from a financial standpoint for Latécoère’s
shareholders.
It is our opinion that this Offer price of €3.85 per share is
fair from a financial standpoint should the Squeeze-Out Procedure
be implemented on conclusion of this Offer.”
The report of the independent expert is reproduced in Annex 3 of
the Draft Response Document.
1 SCP SKN HOLDING I S.A.S. is indirectly and wholly owned by SCP
EPC II UK Limited, a company incorporated under British law, which
is managed by Searchlight Capital Partners II GP, L.P., a limited
partnership registered in the Cayman Islands (which is ultimately
controlled and managed by Searchlight Capital Partners II GP, LLC,
a Delaware limited liability company, United States, whose three
founding members are Mr. Eric Zinterhofer, Mr. Erol Uzumeri and Mr.
Oliver Haarmann, each of them holding a one-third interest in
Searchlight Capital Partners II GP, LLC. 2 On the basis of a total
number of 95,168,518 shares and 96,330,699 theoretical voting
rights of the Company (information as at August 30, 2019 published
by the Company on its website in accordance with Article 223-16 of
the AM General Regulation), minus, in share capital and voting
rights, the 350,000 Latécoère shares whose cancellation was decided
by the meeting of the Board of directors of Latécoère held on
September 12, 2019. In accordance with Article 223-11 of the AMF
General Regulation, the total number of voting rights is calculated
on the basis of all shares to which voting rights are attached,
including shares without voting rights. 3Ibid. 4 Including the
664.232 treasury shares as of the date hereof, it being specified
that such number takes into account the cancellation of 350,000
Latécoère decided by the meeting of the Board of directors of
Latécoère held on September 12, 2019. 5 The exchange rate on the
signing date of the Share Purchase Agreement was equal to 1 EUR =
1,1236 USD. 6 Including the 664.232 treasury shares as of the date
hereof, it being specified that such number takes into account the
cancellation of 350,000 Latécoère decided by the meeting of the
Board of directors of Latécoère held on September 12, 2019. 7 It
being specified that 174.999 shares may be allocated with respect
to this tranch in accordance with the regulations of the MIP 2
Plan. 8 It being specifed that it will be proposed to the corporate
officers holding free shares subject to the mandatory retention of
a certain number of registered shares, pursuant to Article L.
225-197-1 II of the French commercial Code and the regulations of
the corresponding plans, to enter into cross-sell and buy-in
agreements in the event of the departure, provided that on that
date the Offeror holds, alone or in concert, more than 75% of the
share capital, under the same conditions as those provided for
under the liquidity mechanism. 9 Intermediary exercise periods
would also be put in place to allow FCPE B to meet its regular
liquidity needs.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190916005650/en/
Latécoère
Latecoere (EU:LAT)
Historical Stock Chart
From Mar 2024 to Apr 2024
Latecoere (EU:LAT)
Historical Stock Chart
From Apr 2023 to Apr 2024
