CapMan Plc offers to acquire Norvestia Oyj – Norvestia’s Board of Directors recommends accepting the voluntary exchange offer

CapMan Plc      Stock Exchange Release                       3 November 2016 at 8.35 a.m. EET

This stock exchange release may not be published or distributed, in whole or in part, directly or indirectly, in or into or to any person located or a resident of the United States of America, Australia, Canada, Hong Kong, Japan, New Zealand, South Africa, or any other country where such publication or distribution would violate applicable regulation or would require additional measures in addition to the requirements under Finnish law.

CapMan Plc offers to acquire Norvestia Oyj – Norvestia’s Board of Directors recommends accepting the voluntary exchange offer

Highlights of the arrangement:

• Norvestia strengthens CapMan’s position significantly as a leading Nordic private equity asset management and investment company.
• The combined turnover of the combined group would have been approx. €27.2 million, operating profit approx. €21.8 million and earnings per share approx. €0.11 for the period of 1 January – 30 September 2016.¹⁾
• The combined group’s strengthened balance sheet and the own investment capacity of approximately € 200 million enables faster growth.
• CapMan expects the arrangement to generate cost and financing synergies exceeding €3 million per annum.
• The Management Company and Services business pursuing growth, a strong balance sheet and operating cash flow provides a foundation for the execution of the dividend policy. CapMan’s objective is to pay at least 75 per cent of its earnings per share as dividend following the consummation of the arrangement.
• If the exchange offer materialises, all CapMan’s Series A shares will be converted into Series B shares (1:1) and the Articles of Association will be amended so that CapMan only has one share series.
• Norvestia’s Board of Directors recommends that Norvestia’s shareholders accept the exchange offer. Norvestia’s Board of Directors proposes to Norvestia’s extraordinary general meeting that an extraordinary dividend of € 3.35 per share be paid before the consummation of the exchange offer, conditional on the consummation of the exchange offer.
• After the dividend payment, CapMan’s offer consideration is six (6) CapMan’s shares for each Norvestia’s share and security entitling to a share. The offer consideration corresponds to a premium of approximately 23.2 per cent in comparison to Norvestia’s volume-weighted average share price less the extraordinary dividend (€ 5.94) over the reference period 4 October – 2 November 2016.
• Total value of the exchange offer, taking into account the extraordinary dividend, is in total approx. € 117.9 million based on the closing price of CapMan’s share (€ 1.24) on 2 November 2016. Correspondingly, the total value of the exchange offer is in total approx. € 116.6 million based on the volume-weighted average share price (€ 1.22 over the reference period 4 October – 2 November 2016.

1. Illustrative unaudited combined key figures of the Combined Group

CapMan Plc (“CapMan” or the “Company”) offers to acquire all of Norvestia Oyj’s (“Norvestia”) shares (“Norvestia’s shares”) and securities entitling to shares which are not held by Norvestia Group or CapMan Group in a voluntary public tender offer (“Exchange Offer”). Before the Exchange Offer, CapMan holds 28.7 per cent of Norvestia’s shares.

In the Exchange Offer, CapMan offers six (6) new shares of the Company (“Offer Consideration”) for each Norvestia’s share. In conjunction with the arrangement, Norvestia’s Board of Directors proposes to Norvestia’s extraordinary general meeting that an extraordinary dividend of € 3.35 per share be paid (“Extraordinary Dividend”). The Extraordinary Dividend is conditional on the consummation of the Exchange Offer and is paid to those Norvestia shareholders, who own Norvestia’s shares when CapMan announces that the conditions for consummating the Exchange Offer have been fulfilled and CapMan will consummate the Exchange Offer (“Exchange Offer Confirmation Date”). The aforementioned arrangements offer Norvestia’s shareholders the opportunity to receive a considerable Extraordinary Dividend while continuing as shareholders in the group combining the businesses of CapMan and Norvestia (“Combination” and “Combined Group”).

The Offer Consideration corresponds to a premium of approximately 23.2 per cent in comparison to Norvestia’s volume-weighted average share price less the Extraordinary Dividend (€ 5.94) on Nasdaq Helsinki Ltd (the “Helsinki Stock Exchange”) in the 30-day period prior to the announcement of the Exchange Offer ending on 2 November 2016, when the Offer Consideration is valued at the volume-weighted average share price of CapMan in the same period (€ 1.22).

The Offer Consideration corresponds to a premium of approximately 21.0 per cent in comparison to the Norvestia share’s closing price less the Extraordinary Dividend (€ 6.15) on the Helsinki Stock Exchange on 2 November 2016 based on the closing price of the CapMan share (€ 1.24) on the same day.

Total value of the exchange offer, taking into account the Extraordinary Dividend, is approximately € 117.9 million based on the closing price of CapMan’s share (€ 1.24) on 2 November 2016. Correspondingly, the total value of the exchange offer is approx. € 116.6 million based on the volume-weighted average share price (€ 1.22) over the reference period 4 October – 2 November 2016.

Each new CapMan share under the Offer Consideration carry one (1) vote and together with the existing shares equal rights to dividend and other distributions of Company’s assets to shareholders.  CapMan will not make any distributions from the Company before the consummation of the Exchange Offer.

Norvestia’s Board of Directors have formed a composition to evaluate and process the Exchange Offer consisting of Hannu Syrjänen, Georg Ehrnrooth and Arja Talma, who are Norvestia’s Board of Directors independent of CapMan. Members of Norvestia’s Board of Directors who are not independent of CapMan, that is, Heikki Westerlund and Niko Haavisto, have not in any way participated in the decision making related to the matter in Norvestia’s Board of Directors. Norvestia’s Board of Directors in its aforementioned composition has stated that it deems the terms of the Exchange Offer are economically fair, and that it recommends that Norvestia’s shareholders accept the Exchange Offer. Norvestia’s financial advisor Nordea Corporate & Investment Banking has prepared a fairness opinion statement for Norvestia on the Exchange Offer. Norvestia’s Board of Directors will publish its final statement on the Exchange Offer in line with the Securities Market Act before the publication of the Offer Document.

Sampo Plc (on behalf of Norvestia’s major shareholders Mandatum Life and Mutual Limited Liability Insurance Company Kaleva), Mr Mikko Laakkonen, Mr Hannu Laakkonen and Mr Jukka Immonen, who together with CapMan represent approx. 50.8 per cent of all shares and votes prior to the Exchange Offer, have given an undertaking, subject to certain conditions, to accept the Exchange Offer and vote in favour of the Extraordinary Dividend at Norvestia’s extraordinary general meeting. Mikko and Hannu Laakkonen, Jukka Immonen as well as Sampo Oyj may cancel their commitments in certain situations, for instance if Norvestia’s Board of Directors cancels their recommendation to accept the Exchange Offer. CapMan is also committed to vote in favour of the Extraordinary Dividend in Norvestia’s extraordinary general meeting.  

CapMan has no undertakings with regard to any compensation or other fees payable to the management and/or Board of Directors of Norvestia as a result of consummation of the Exchange Offer. CapMan and Norvestia’s shareholders have not agreed on any additional arrangements related to the offer.

The new CapMan shares offered as the Offer Consideration are intended to be issued in a directed share issue. CapMan’s Board of Directors will propose that CapMan’s extraordinary general meeting to be convened on 8 December 2016 will grant the Board of Directors with the necessary authorisation. As of the date of the publication of the Exchange Offer, shareholders representing approximately 60.3 per cent of the aggregate votes in CapMan have agreed to vote in favour of the authorisation for the directed share issue.  As part of the arrangement, all of CapMan’s A-shareholders have agreed to convert their A-shares into B-shares in accordance with CapMan’s articles of association so that one (1) A-share corresponds to one (1) B-share and to vote at CapMan’s extraordinary general meeting in favour of amending CapMan’s Articles of Association so that CapMan only has one share series. The conversion and the vote in favour of amending the Articles of Association are conditional to CapMan’s announcement that it will consummate the Exchange Offer. The changes to the Articles of Association will be registered before the Exchange Offer is consummated.  

The offer period of the Exchange Offer is intended to begin on or about 21 November 2016 and is initially intended to end on 16 December 2016, unless the offer period is extended (the “Offer Period”). The combined exchange offer document and listing prospectus, including the unaudited pro forma financial information illustrating the financial effects of the combination of CapMan and Norvestia, is expected to be published on or about 18 November 2016 (“Offer Document”). 

The Exchange Offer is conditional, inter alia, to CapMan obtaining, in the aggregate, more than ninety (90) per cent of the issued and outstanding shares and votes in Norvestia through the Exchange Offer, CapMan’s extraordinary general meeting authorising the Board of Directors to decide on the directed share issue to be used for the consummation of the Exchange Offer, and no material adverse change having occurred in Norvestia as described in more detail in the terms of the Exchange Offer. In the event that the Company acquires ownership of more than ninety (90) per cent of all shares and votes granted by the shares in Norvestia, CapMan’s intention is to redeem any possible minority holdings and to request for permission to delist Norvestia’s shares from the Helsinki Stock Exchange. CapMan reserves the right to waive the fulfilment of the conditions of the Exchange Offer, including waiving the condition concerning obtaining ninety (90) per cent of ownership, and may consummate the Exchange Offer also based on an ownership of less than ninety (90) per cent of Norvestia’s shares. The conditions for the consummation of the Exchange Offer are presented as an attachment to this release.

The purpose and objectives of the proposed Combination

The Combined Group is expected to create added value to both CapMan’s and Norvestia’s shareholders based on growth, benefits from operating as a larger entity in the private equity field, a more effective utilisation of the existing asset base, as well as tangible cost synergies, among others. The objective of the Combined Group is to offer the best private equity experience and have a positive impact on the economic development of its stakeholders.

Key strategic growth themes

• The utilisation of CapMan’s brand and network in versatile investment activities: CapMan has a long-standing operating history and is a front-runner in private equity, especially in the Nordic countries. Due to its position, CapMan is well-positioned to evaluate deal flow, i.e. investment opportunities available in the market. CapMan is well-equipped to make use of these opportunities within existing investment strategies or by creating new funds or solutions tailored to suitable groups of investors.
   
• A versatile selection of investment strategies and services: CapMan’s objective is to offer the best private equity experience by developing innovative and effective solutions that offer attractive returns for investors. For example, the intention is to expand investments in growth equity by utilising CapMan’s current resources and expertise.
   
• The launch of new investment solutions: Fund raising and making investments from fund proceeds in line with their respective investment strategies continues as a central part of CapMan’s business operations. In addition, in areas where CapMan does not have actively investing funds, CapMan may make investments directly from its own balance sheet in the form of a new so called “Tactical Opportunity” investment strategy as well as sell such investment interests to investors. CapMan may also offer liquidity for its fund investors by buying and selling fund interests in the secondary market. 
   
• Result oriented business culture: CapMan’s larger investment capacity allows for more flexibility and enables quicker investment decisions. A more active balance sheet management emphasises the significance of ownership as it relates to performance. CapMan’s and Norvestia’s combined and diverse personnel resources allow further development of existing products and developing and introducing new products. A stronger CapMan is also an attractive employer.

Active and efficient use of own balance sheet supports developing the business

• A significantly stronger investment capacity combined with a net gearing objective of on average no more than 40 per cent reduces the dependency of the business of external fundraising and increases the efficiency of the investment business. Own investment capacity of around € 200 million will be allocated more actively into private equity investments in the future, including investments into private equity funds, growth equity and Tactical Opportunity investments.  A more active allocation of the investment capacity from market investments to the unlisted market will improve the return profile of the investment portfolio.

Significant synergies

• The annual cost and financing synergies generated by the combination are expected to exceed €3 million per annum as a result of removal of overlapping operations, lower fixed costs, centralised administration and reduced financial costs, among other factors.

Objective to grow dividend

• The Management Company and Services business that pursues selective and profitable growth, a strong balance sheet and good operating cash flow, creates a foundation for executing an active dividend policy. CapMan’s objective is to pay at least 75 per cent of its earnings per share as dividend following the consummation of the Combination.   

Comments of the management of CapMan and Norvestia

Heikki Westerlund, CEO of CapMan

“Private equity is a growing field that interests a broader investor base.  As one of the front-runners in the field, we have offered our customers diverse investment strategies for more than 25 years. Strong focus on value creation abilities and the creation of products that are based on such value creation is at the core of our growth strategy. Norvestia strengthens CapMan’s position as a solid and leading Nordic private equity asset management and investment company.

We have been an anchor owner of Norvestia since May 2015, when CapMan became the largest single shareholder of Norvestia. We identify excellent growth opportunities in, among others, the Growth Equity strategy that invests in unlisted companies, but it is difficult to build growth on Norvestia’s well-managed Market Investments portfolio. We have an extensive private equity experience especially as active value creation professionals, a broad and international customer base, good access to potential investments and a strong brand.

After the consummation of the Exchange Offer, CapMan’s own investment capacity will be around € 200 million. In the future, own investments will be made in the private equity asset class both through our own funds as well as direct investments in growth companies. We are also evaluating the possibility to utilise our own balance sheet actively in areas, which are not covered by the investment strategies implemented by our current funds. We may, for example, introduce new investment strategies, or offer liquidity to our fund investors. Further streamlining of cost structures supports our objective to improve profitability of our Management Company and Services business. I believe that the Combined Group will create added value to shareholders, investors and other stakeholders that are central to our business.”

Karri Kaitue, Chairman of the Board of CapMan

“Adding Norvestia as part of CapMan is a logical continuation of the Company’s long-term strategy. CapMan’s scalable business model and experienced organisation in combination with Norvestia’s strong balance sheet and a well-managed investment portfolio create a strong foundation for growth. The Combined Group is a significantly larger business entity compared to either CapMan or Norvestia in their current forms, which benefits the shareholders, clients and employees of both companies. The profitable growth pursued by the Management Company and Services business, strong balance sheet and operating cash flow create a solid foundation for the delivery and execution of our strategy and financial target setting.”  

Hannu Syrjänen, Vice Chairman of the Board of Norvestia

“The Combination is a strategic step, as CapMan’s expertise and resources are well-suited to support the implementation of Norvestia’s Growth Equity strategy and future growth. In addition, the Combination enables synergies. The Combined Group is a larger operating entity and has a broader investor base, which present Norvestia’s shareholders with an opportunity for improved liquidity as shareholders of the Combined Group. The Exchange Offer provides Norvestia’s shareholders with a marked premium compared to the share price, taking into account Norvestia’s Extraordinary Dividend. Norvestia’s Board of Directors recommends that shareholders accept the Exchange Offer.”    

The Combined Group

General overview

Norvestia is a public listed investment company with operating profit of € 15.3 million and earnings per share of 84 cents for the period of 1 January – 30 September 2016. On 30 September, Norvestia had seven employees and approximately €182.1 million in investments. The Combination strengthens CapMan’s position as an international private equity investment and asset management company. The Combined Group will offer investment opportunities to the growing client base investing in the asset class. The Combined Group combines versatile investment strategies and themes with actively managed balance sheet investments. The Combined Group has two business segments, the “Management Company and Services” business and the “Investment” business.  

Management Company and Services business

The Combined Group will manage assets that have been invested according to various investment strategies mainly through own funds, but also through solutions tailored for customers. The main investment strategies under the Management Company and Services business are real estate investments (“Real Estate”), buyout investments (“Buyout”), private debt investments (“Credit”) and minority investments to Russia (“Russia”). The Combined Group offers specialised private equity services through a purchasing scheme for growth companies, private equity investors and other fund managers operating in the industry. The Combined Group strives to develop its service offering further.

Management fees are, in general, a highly predictable source of income, and provide, in combination with other fees from services in private equity, stable cash flow to the business. In addition, the management company is entitled to carried interest, which is a portion of a fund’s cash flow after deductions from the return of paid-in capital to the fund investors and the preferential annual return. Where a fund’s investment activity is successful, carried interest income increases the Combined Group’s return on equity. In terms of fund advisory services, a successful fundraising typically generates one-off success fees.

Investment business

The Combined Group utilises its expertise and significant investment capacity to actively invest in the private equity asset class. Investments are made into the Combined Group’s own investment strategies mainly through funds that invest in the strategies. Growth Equity investments and Tactical Opportunity investments will be made directly from the Combined Group’s balance sheet. Income from the Investment business is based on fair value changes of such investments and realised cash flow.  

Illustrative unaudited combined key figures of the Combined Group

Principles

The unaudited financial information presented below are based on CapMan’s 2015 financial statements, Norvestia’s adjusted income statement information for the financial year 2015 and the interim financial information for 1 January – 30 September 2016 for both companies. The combined financial information is presented for illustrative purposes. The combined financial information represents the turnover and result of the Combined Group as if the combination would have occurred in the beginning of the last financial year. The illustrative key figures of the Combined Group for the balance sheet are shown as if the Combination would have occurred on 30 September 2016. The combined financial information is based on a hypothetical situation and are not to be considered as pro forma financial information, which CapMan will publish in the Offer Document, which it submits to the Financial Supervisory Authority around 3 November 2016, as the allocation of the Offer Consideration, the costs related to the arrangement or accounting principles and differences in forms of presentation have not been taken into account in this instance. The preliminary difference between the Offer Consideration and Norvestia’s equity is presented in the balance sheet key figures under equity.

Combined key figures for the income statement and balance sheet have been adjusted for the fair value of CapMan’s ownership of Norvestia’s shares as well as the distribution of the Extraordinary Dividend as presented in the reference information below.        

Illustrative unaudited combined income statement key figures of the Combined Group

Illustrative unaudited combined balance sheet key figures of the Combined Group

Illustrative unaudited combined key figures of the Combined Group

      1)        The change in the fair value of CapMan’s previously held ownership of 28.7 per cent of Norvestia is eliminated in the illustrative combined income statement. The amount of the elimination is €4.4 million for the financial year 2015 and €3.5 million for the period 1.1.-30.9.2016.

      2)        The number of shares when calculating illustrative basic earnings per share is 151,834,716 shares for the period 1.1.-30.9.2016 and 151,825,971 shares for the period 1.1.2015-31.12.2015.

      3)        The number of shares when calculating illustrative diluted earnings per share is 153,159,716 shares for the period 1.1.-30.9.2016 and 153,050,971 shares for the period 1.1.2015-31.12.2015.

      4)        The value of CapMan’s previously held ownership of 28.7 per cent of Norvestia’s shares has been eliminated from the illustrative balance sheet information.

      5)        The Extraordinary Dividend of €3.35 per share has been eliminated from the short-term assets of the illustrative combined balance sheet. The total amount of the Extraordinary Dividend contingent to the consummation of the Exchange offer is approx. €51.3 million. A closing price of €1.25 as of 1 November 2016 per CapMan share has been used when calculating the Offer Consideration.  

      6)        Calculated dividing the net of interest bearing liabilities and cash by equity at the end of the period. 

Synergies and items affecting comparability generated by the arrangement

The annual cost and financing synergies generated by the combination are expected to exceed €3 million per annum as a result of elimination of overlapping operations, lower fixed costs, centralised administration and reduced financial costs, among other factors. The combined effect of the cost and financing synergies is positive and expected to be at least €3 million per annum. The Company expects to reach these cost and financing synergies during 2017 and in full starting from 2018.

The Combination will also offer numerous opportunities for synergies arising from long-term returns on investing activities due to the combination of resources and expertise.

Transaction costs and other costs arising from the Combination that affect comparability are expected to be €3 million according to CapMan and will be allocated to 2016 and 2017.

The impact of the Exchange Offer on the outlook for 2016

Consummation of the Exchange Offer is not expected to have impact on CapMan’s outlook for 2016. CapMan has published its outlook for 2016 in connection with the January-September 2016 interim report published on 3 November 2016. After consummation of the Exchange Offer, Norvestia will continue its operations as CapMan’s subsidiary.

Financial objectives to be updated following the consummation of the Exchange Offer

CapMan will update its financial targets as follows, if the Exchange Offer is consummated:

• The annual growth target for the Management Company and Services business is on average over 10 percent. CapMan has not previously published any such growth targets.
• Target ratio for net gearing (i.e. interest-bearing net debt to equity) is on average a maximum of 40 per cent. CapMan has not previously published any targets for net gearing. CapMan’s target range for the equity ratio is currently at 45-60 per cent.
• Target for the return on equity is more than 20 per cent per year on average and will remain unchanged from the current target.
• CapMan’s objective is to pay at least 75 per cent of the earnings per share as dividend. CapMan’s current objective is to pay at least 60 per cent of the earnings per share as dividend.

Key information regarding the Exchange Offer

Offer and Offer Consideration

CapMan has offered to acquire, in accordance with terms of the Exchange Offer, through a voluntary exchange offer, all issued and outstanding Norvestia’s shares, and subscription rights that are not held by Norvestia group or CapMan group. In the Exchange Offer, CapMan shall offer six (6) CapMan shares for each share and subscription right in Norvestia, provided the Exchange Offer has been approved in accordance with its terms and the approval has not been duly withdrawn.

CapMan holds a total of 4,393,976 of a total of 15,316,560 shares in Norvestia. CapMan’s ownership represents 28.7 per cent of the total number of shares, share capital and votes in Norvestia. CapMan has not acquired Norvestia’s shares during the 12-month period preceding the Exchange Offer. The number of shares issued as Offer Consideration (“Offer Shares”) shall be a maximum of 65,576,292 in total with a total value of € 80.0 million based on volume-weighted average price of the B-share during the one-month period ended on 2 November 2016. The Offer Shares correspond to approximately 75.9 per cent of all shares in CapMan before the Exchange Offer and approximately 43.2 per cent of all shares in CapMan after the Exchange Offer provided that the Exchange Offer is accepted in full and all of the A-shares issued by CapMan will be fully converted to B-shares.

The Exchange Offer will be consummated as a directed share issue of shares that correspond to CapMan’s current B-shares. At present, CapMan has two series of shares, A-series and B-series. Each of the Company’s A-shares is entitled to ten (10) votes at the Company’s general meeting and each of B-shares is entitled to one (1) vote. All shares of the Company carry equal rights to dividend and other distributions of Company’s assets to shareholders. The shares have no nominal value.

CapMan’s Board of Directors proposes to the extraordinary general meeting, to be held on 8 December 2016, that the extraordinary general meeting will decide on authorising the Board of Directors to decide on the share issue in order to consummate the Exchange Offer as well as on the removal of the share series A, conditional to CapMan’s confirmation that it will consummate the Exchange Offer and that all A-shares have been converted into B-shares. All holders of CapMan’s A-shares have consented to the conversion (1:1) conditional to CapMan’s confirmation that it will consummate the Exchange Offer. CapMan’s shareholders representing approximately 60.3 of all voting rights, have agreed offer to vote in favour of the proposals presented by the Board of Directors. The amendment of the Articles of Association will be registered before the consummation of the Exchange Offer, after which all CapMan’s shares have equal rights.  

Based on the above-mentioned, CapMan considers that it has the necessary capacity to implement the Exchange Offer.

Basis for pricing of the Exchange Offer

In connection with the Exchange Offer, Norvestia’s Board of Directors proposes to Norvestia’s extraordinary general meeting to be held on 8 December 2016 that an Extraordinary Dividend of € 3.35 per share be paid to each share in Norvestia, conditional to the fulfilment or waiver of the conditions of the Exchange Offer and it shall be paid to those Norvestia’s shareholders, who have been registered in the shareholder register maintained by Euroclear Finland Oy on the dividend record date which shall be prior to the completion trades of the Exchange Offer. The dividend record date is intended to be the second settlement date following the Exchange Offer Confirmation Date. The Extraordinary Dividend shall not be paid on the Subscription Rights. The Exchange Offer will not be consummated until the decision to pay the Extraordinary Dividend has been made and consummated.

CapMan will not during the Offer Period until the transactions under the Exchange Offer have been settled make decisions regarding dividends or other distributions to its shareholders or (except for the consummation of the Exchange Offer) the issue of shares or any rights entitling to shares, the acquisition, disposal or pledge of own shares or any rights entitling to shares (including pursuant to any authorisations given to the Board of Directors, or otherwise) except for the issue of new CapMan B-shares following share subscriptions made under CapMan’s Option Programme 2013.

The Offer Consideration corresponds to a premium of approximately 23.2 per cent in comparison to Norvestia’s volume-weighted average share price less the Extraordinary Dividend (€ 5.94) on the Helsinki Stock Exchange in the 30-day period prior to the announcement of the Exchange Offer ending on 2 November 2016, when the Offer Consideration is valued at the volume-weighted average share price of CapMan in the same period (€ 1.22).

The Offer Consideration corresponds to a premium of approximately 21.0 per cent in comparison to the

Norvestia share’s closing price less the Extraordinary Dividend (€ 6.15) on the Helsinki Stock Exchange on 2 November 2016 based on the closing price of the CapMan share (€ 1.24) on the same day.

The Offer Consideration corresponds to a premium of approximately 12.7 per cent in comparison to the

Norvestia share’s all-time highest closing price less the Extraordinary Dividend (€6.60) on the Helsinki Stock Exchange on 3 January 2006 based on the closing price of the CapMan share (€ 1.24) on 2 November 2016.

Total value of the Exchange Offer, taking into account the Extraordinary Dividend, is approx. € 117.9 million based on the closing price of CapMan’s share (€ 1.24) on 2 November 2016. Correspondingly, the total value of the Exchange Offer is approx. € 116.6 million based on the volume-weighted average share price (€ 1.22) over a 30-day reference period prior to the announcement of the Exchange Offer, ending on 2 November 2016.

Arrangements relating to the Exchange Offer

Sampo Plc (on behalf of Norvestia’s major shareholders Mandatum Life and Mutual Limited Liability Insurance Company Kaleva), Mr Mikko Laakkonen, Mr Hannu Laakkonen and Mr Jukka Immonen, who together with CapMan represent approx. 50.8 per cent of all shares and votes prior to the Exchange Offer, have made a commitment to, subject to certain conditions, accept the Exchange Offer and participate in Norvestia’s Extraordinary General Meeting with all their shares and votes and vote in favour of the Board of Directors’ proposal to distribute the Extraordinary Dividend. Sampo Oyj, Mikko and Hannu Laakkonen and Jukka Immonen may cancel their commitments in certain situations, for instance if Norvestia’s Board of Directors cancels their recommendation to accept the Exchange Offer.

Norvestia’s Board of Directors proposes to Norvestia’s extraordinary general meeting to be held on 8 December 2016 that the Extraordinary Dividend be paid conditional to the fulfilment or waiver of the conditions of the Exchange Offer and that the dividend record date, which defines the shareholders entitled to the Extraordinary Dividend, is set before the transactions consummating the Exchange Offer. The decision is effective until the beginning of the next annual general meeting. The Exchange offer will not be consummated until the decision to pay the Extraordinary Dividend has been made and consummated. The Extraordinary Dividend will be paid to each shareholder in Norvestia who is registered in the company’s register of shareholders maintained by Euroclear Finland Ltd on the record date of the dividend. It is intended that the dividend record date is the second settlement date following the Exchange Offer Confirmation Date. Norvestia’s Board of Directors proposes that the dividend shall be paid on the fifth banking day after the record date of the dividend.

CapMan has not committed to pay any compensation or fees to Norvestia’s management and/or Board of Directors due to the consummation of the Exchange Offer. 

CapMan reserves the right to buy Norvestia’s shares during the Offer Period in public trading on the Helsinki Stock Exchange or otherwise.

According to CapMan’s understanding the consummation of the Exchange Offer does not require any permits, approvals or clearances from authorities other than the Finnish Financial Supervisory Authority approval.

Compliance with the recommendation set forth in Chapter 11 Section 28 of the Finnish Securities Markets Act

CapMan undertakes to comply with the Helsinki Takeover Code issued by the Finnish Securities Market Association, which is referred to in Section 28 of Chapter 11 of the Finnish Securities Markets Act.

Future plans regarding Norvestia’s shares and Norvestia

CapMan’s intention is to acquire all shares and Subscription Rights in Norvestia and not held by Norvestia Group or CapMan Group. If the Exchange Offer is consummated in such a way where CapMan receives more than ninety (90) per cent of all issued and outstanding shares and votes in Norvestia, CapMan will take measures to acquire the remaining shares in Norvestia through redemption proceedings in accordance with Chapter 18 of the Companies Act.

Following this, CapMan will aim at Norvestia applying for delisting of its shares from the Helsinki Stock Exchange at the earliest permitted and practicable occasion under the applicable laws, regulations and Helsinki Stock Exchange rules.

The Combination is not intended to have an immediate effect on the composition of CapMan’s or Norvestia’s Board of Directors or senior management. CapMan and Norvestia have, to some extent, overlapping functions, and necessary arrangements related thereto will be considered in the Combined Group to achieve the synergies of the Combination.

Estimate on the offer process and its duration

The Offer Period commences on or about 21 November 2016 and is initially expected to end on 16 December 2016 (at 6:30 p.m), unless the Offer Period is extended. CapMan may extend the Offer period at any time, under the limitations that the Offer Period can be no more than 10 weeks, unless reasons as referred to in the Securities Markets Act Chapter 11 Section 12 are present. The combined exchange offer document and listing prospectus will be published on or about 18 November 2016

Advisors

Summa Capital Ltd acts as CapMan’s financial advisor, and Summa Capital Markets Ltd acts as the lead manager. Borenius Attorneys Ltd acts as CapMan’s legal advisor. FIM Arvopaperipalvelut at S-Pankki Ltd acts as the technical organiser of the Exchange Offer.

Press, analyst and investor conference today at 10 a.m.

CapMan will hold a press, analyst and investor conference today, on 3 November 2016, at 10:00 a.m. at CapMan’s head office in Helsinki, at Korkeavuorenkatu 32. CapMan’s CEO Heikki Westerlund, CapMan’s Chairman of the Board Karri Kaitue and Norvestia’s Vice Chairman of the Board Hannu Syrjänen will present at the conference. The presentation material is available at CapMan’s website at the beginning of the event. The conference will be held in Finnish. Welcome!

Appendix Conditions of the consummation of the Exchange Offer (http://www.capman.com/investors/shares-and-shareholders/exchange-offer/)

Additional information:

Karri Kaitue, Chairman of the Board, CapMan Plc, tel. +358 40 501 5054  

Heikki Westerlund, CEO, CapMan Plc, tel. +358 50 559 6580

CAPMAN PLC

BOARD OF DIRECTORS

Distribution:

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Principal media

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CapMan

www.capman.com

CapMan is a leading Nordic investment and asset management company. For more than 25 years, we have been developing companies and real estate and supporting their sustainable growth. We are committed to understanding the needs of our customers in an ever-changing market environment. Our objective is to provide attractive returns and innovative solutions for our investors and value adding services for professional investment partnerships, growth-oriented companies and tenants. Our independent investment partnerships – Buyout, Real Estate, Russia and Nest Capital – as well as our associated company Norvestia are responsible for investment activities and value creation. CapMan’s service business offering includes fundraising advisory services, purchasing activities and fund management services to both internal and external customers. CapMan has 100 professionals and assets under management of €2.8 billion.

Important Notice

This release may not be released or otherwise distributed, in whole or in part, in or into or to any person located or a resident of the United States of America, Australia, Canada, Hong Kong, Japan, New Zealand or South Africa or any other jurisdiction where prohibited by applicable laws or rules. This release is not a share exchange offer document or a prospectus and as such does not constitute an offer or invitation to make a sales offer. Investors shall accept the exchange offer for the shares only on the basis of the information provided in an exchange offer document and prospectus in respect of the exchange offer. Offers will not be made directly or indirectly in any jurisdiction where either an offer or participation therein is prohibited by applicable law or where any exchange offer document or registration or other requirements would apply in addition to those undertaken in Finland.

The exchange offer document and prospectus in respect of the exchange offer as well as related acceptance forms will not and may not be distributed, forwarded, or transmitted into, in, or from any jurisdiction where prohibited by applicable law. In particular, the exchange offer is not being made, directly or indirectly, in or into, Australia, Canada, Hong Kong, Japan, New Zealand, South Africa, or the United States of America. The exchange offer cannot be accepted from within Australia, Canada, Hong Kong, Japan, New Zealand, South Africa, or the United States of America.

CapMan’s shares have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), or under any of the relevant securities laws of any state or other jurisdiction of the United States of America. CapMan’s shares may not be offered or sold in the United States, except pursuant to an exemption from the Securities Act or in a transaction not subject to the registration requirements of the Securities Act.

Certain statements herein which are not historical facts, including, without limitation, those regarding expectations for general economic development and the market situation, expectations for the combined company’s development and profitability and the realization of synergy benefits and cost savings, and statements preceded by “expects”, “estimates”, “forecasts” or similar expressions, are forward-looking statements. These statements are based on current decisions and plans and currently known factors. They involve risks and uncertainties which may cause the actual results to materially differ from the results currently expected for the combined company. Such factors include, but are not limited to, general economic conditions, including fluctuations in exchange rates and interest levels which influence the operating environment and profitability of customers and thereby the orders received by the combined company and their margin; the competitive situation; the combined company’s own operating conditions, such as the success of production and product development and their continuous development and improvement; and the success of future acquisitions.

Appendix

Conditions of the consummation of the Exchange Offer

The consummation of the Exchange Offer requires that the consummation conditions presented below (the “Consummation Conditions”) are met or that CapMan waives one or more of the Consummation Conditions to the extent allowed under applicable laws and regulations.

1. the extraordinary general meeting convened by CapMan to be held on 8 December 2016 shall authorise CapMan’s Board of Directors to issue the Offer Shares;
2. the total number of Norvestia shares validly tendered in accordance with the terms of the Exchange Offer on the date of publishing the final result of the Exchange Offer together with Norvestia shares held by CapMan is more than ninety (90) per cent of the total number of Norvestia shares issued and outstanding, and votes attached to the shares, as calculated pursuant to Chapter 18, Section 1 of the Finnish Companies Act concerning the right and obligation to commence the mandatory redemption process;
3. after the announcement of the Exchange Offer, Norvestia has not resolved to distribute any dividend or other assets to its shareholders, other than the Extraordinary Dividend;
4. no such order has been issued or any such official action has been taken by any court or public authority of competent jurisdiction that would prevent or significantly delay the consummation of the Exchange Offer;
5. the members of Norvestia’s Board of Directors who are independent of CapMan have unanimously recommended accepting the Exchange Offer and the recommendation remains in force and has not been rescinded, or modified in this respect;
6. no Material Adverse Change (as defined below) has occurred after the announcement of the Exchange Offer; and
7. no information made public by Norvestia or disclosed to CapMan by Norvestia is materially inaccurate, incomplete or misleading, and Norvestia has not failed to make public any information that should have been made public by it under applicable laws and regulations, nor has CapMan received any new information after the announcement of the Exchange Offer previously undisclosed to CapMan or its representatives that, when realised has resulted in or constituted, or that can reasonably be expected to result in or constitute a Material Adverse Change.

A “Material Adverse Change” means (i) any divestment of any material part or asset of Norvestia or its subsidiaries or any material reorganisation thereof which is not in the ordinary course of the investment business of the companies or in relation to payment of the Extraordinary Dividend; or (ii) bankruptcy, administration, insolvency or similar proceedings of Norvestia; or (iii) a negative change of at least 10 per cent in the net asset value of Norvestia published on 27 October 2016.

For the sake of clarity, no Material Adverse Change shall be considered to having occurred to the extent such alleged Material Adverse Change has resulted from such other matter that Norvestia has published through a stock exchange release or as part of its obligation to disclose periodic information or that has otherwise been reasonably disclosed to CapMan prior to the announcement of the Exchange Offer.

CapMan shall only be able to refer to any Consummation Condition in order to cause the progress, interruption or withdrawal of the Exchange Offer in situations where, from the viewpoint of the Exchange Offer, such Consummation Condition is of such material importance to CapMan as is referred to in the Financial Supervisory Authority Regulations and guidelines 9/2013 (Takeover bid and obligation to launch a bid, and in the Helsinki Takeover Code). Considering the aforesaid, CapMan shall retain the right to withdraw the Exchange Offer if any of the Consummation Conditions have not been fulfilled or will not be fulfilled.

CapMan may, within the limits of the laws, waive such Consummation Condition which has not been fulfilled. If all the Consummation Conditions have been fulfilled at the closing or interruption of the Offer Period or Extended Offer Period or CapMan has waived any Consummation Condition that has not been fulfilled, CapMan shall consummate the Exchange Offer in accordance with its terms at the closing of the Offer Period by acquiring Norvestia shares and Subscription Rights by paying the Offer Consideration to such shareholders of Norvestia and holders of Subscription Rights who have duly approved the Exchange Offer and have not duly withdrawn their approval.

CapMan shall announce by a stock exchange release that the Consummation Conditions are fulfilled or that the Company shall waive conditions that have not been fulfilled.