Notice Regarding Scheduled Commencement of Tender Offer for Shares of Honshu Chemical Industry Co., Ltd. (Securities Code: 4115)
This announcement is for our U.S.
To whom it may concern:
Company Name: Mitsui Chemicals, Inc.
Name of Representative:
President & CEO
(Securities code: 4183)
Contact:
General Manager of Corporate Communications Division
Phone: +81-3-6253-2100
Company Name: Mitsui & Co., Ltd.
Name of Representative:
President and Chief Executive Officer
(Securities code: 8031)
Contact:
General Manager of Investor Relations Division
Phone: +81-3-3285-7657
Notice Regarding Scheduled Commencement of Tender Offer for Shares of Honshu Chemical Industry Co., Ltd. (Securities Code: 4115)
Mitsui Chemicals, Inc. ("Mitsui Chemicals") and Mitsui & Co., Ltd. ("Mitsui & Co.," and together with Mitsui Chemicals, the "Offerors") announce that they resolved today to jointly acquire shares of the common stock (the "Target's Shares") of Honshu Chemical Industry Co., Ltd. (the "Target") through a tender offer (meaning the tender offer pursuant to the Financial Instruments and Exchange Act (Act No. 25 of 1948, as amended; the "Act") and related laws and regulations, the "Tender Offer"), as follows:
The Offerors plan to promptly implement the Tender Offer upon the satisfaction (or waiver by the Offerors) of certain conditions, including the completion of the procedures and actions required by antitrust laws of
1. Purposes of the Purchase
(1) Outline of the Tender Offer
As of the date of this Press Release, each of the Offerors (Note 1) holds 3,098,000 shares (Shareholding Ratio (Note 2): 26.99%) of the Target's Shares, which are listed on the Second Section of Tokyo Stock Exchange, Inc. (the "TSE"), making the Target an equity method affiliate of each Offeror.
(Note 1) As of
(Note 2) "Shareholding Ratio" refers to the ratio (rounded to the second decimal place) to the number of Target's Shares (11,476,846 shares) obtained by deducting the number of treasury shares owned by the Target as of
The Offerors entered into a joint tender offer agreement (the "Joint Tender Offer Agreement") as of the date of this Press Release, and each of the Offerors resolved to jointly implement the Tender Offer for all of the Target's Shares (excluding the Target's Shares owned by the Offerors and the treasury shares owned by the Target; hereinafter the same) as part of the series of transactions (the "Transaction") to make the Offerors the sole shareholders of the Target, with Mitsui Chemicals' and Mitsui & Co.'s voting right percentages in the Target after the privatization being 51% and 49%, respectively, subject to the satisfaction (or waiver by the Offerors) of the Conditions as provided in the Joint Tender Offer Agreement, as follows:
(i) The special committee established by the Target issued a written report in favor of the Target (x) supporting the Tender Offer and (y) recommending the shareholders of the Target to tender in the Tender Offer and (z) implementing the Share Consolidation (as defined in (III) Establishment of independent special committee at the Target and procurement of written report from the said committee" under "(3) Measures to ensure the fairness of the Tender Offer, such as measures to ensure the fairness of the Tender Offer Price and measures to avoid conflict of interests" below; hereinafter the same), and this report has not been withdrawn;
(ii) The Target's board of directors, excluding directors who have or may have interests with the Offerors, reached an unanimous resolution to support the Tender Offer and to recommend the Target's shareholders to tender in the Tender Offer, and this resolution was publicly announced and no resolution has been made to withdraw this opinion or that conflicts with this opinion;
(iii) It has been confirmed that there have been no material facts concerning the Target's business (those facts stipulated in Article 166, Paragraph 2 of the Act) that have not been publicly disclosed (as defined in Article 166, Paragraph 4 of the Act) by the Target;
(iv) The Offerors have agreed between themselves on the contents of the disclosure documents to be filed or announced jointly by the Offerors by the date of public notice concerning commencement of the Tender Offer;
(v) Necessary procedures were performed, necessary arrangements were made, and waiting periods (if any) have lapsed (including to receive notice that no cease and desist order will be issued) pursuant to the antitrust laws of
(vi) There are no filings, litigation or procedures pending at judicial or administrative agencies that seek to restrict or prohibit any of the Transaction, and there is no judgment or a concrete possibility for a judgment to be made, by any judicial or administrative agency that restricts or prohibits any of the Transaction;
(vii) Each company in the Target Group (as defined in "(I) Background and purposes of the Tender Offer and decision-making process leading to the consummation of the Tender Offer" under "(2) Background and purposes of the Tender Offer and decision-making process leading to the consummation of the Tender Offer and management policy after the Tender Offer" below) has received written confirmations from the counterparties to the agreements executed by each company in the Target Group that are materially important for business stating that those counterparties will not exercise their rights upon execution and performance of the Joint Tender Offer Agreement, and these confirmations have not been rescinded;
(viii) The Shareholders Agreement (as defined in "(II) Management policy after the Tender Offer" under "(2) Background and purposes of the Tender Offer and decision-making process leading to the consummation of the Tender Offer and management policy after the Tender Offer" below) is executed between the Offerors and has been effective;
(ix) The representations and warranties made by the Offerors (for the specific details thereof, see "(II) Joint Tender Offer Agreement" under "(6) Matters concerning material agreements regarding the Tender Offer" below) under the Joint Tender Offer Agreement are true and accurate in all material respects;
(x) All obligations that must be performed, or complied with, by the Offerors by
(xi) There has been no material change in the business or property of the Target or any of its subsidiaries, and there has been no other circumstance that would materially impede the achievement of the purpose of the tender offer as provided in the proviso to Article 27-11, Paragraph 1 of the Act.
As of the date of this Press Release, the Tender Offerors are not aware of any event that would materially impede the satisfaction of the Conditions. The Tender Offerors will perform the procedures and actions that are required by antitrust laws of
The Offerors have set the minimum number of tendered shares to be purchased in the Tender Offer at 1,455,200 shares (Shareholding Ratio: 12.68%), and if the total number of shares, etc. tendered in the Tender Offer (the "Tendered Shares") is less than the minimum number of tendered shares to be purchased in the Tender Offer, the Offerors will purchase none of the Tendered Shares. Meanwhile, with the intention of privatizing the Target's Shares, the Offerors have not set the maximum number of tendered shares to be purchased in the Tender Offer. If the total number of the Tendered Shares is no less than the minimum number of tendered shares to be purchased in the Tender Offer, the Offerors will purchase all of the Tendered Shares. The minimum number of tendered shares to be purchased in the Tender Offer (1,455,200 shares) has been set so that the sum of the voting rights in the Target held by the Offerors upon the successful completion of the Tender Offer should be no less than two thirds (2/3) of the total number of voting rights in the Target (114,768, which is the number of voting rights pertaining to the number of shares (11,476,846 shares) obtained by deducting the number of treasury shares owned by the Target as of
As already mentioned, the Offerors intend to eventually set Mitsui Chemicals' and Mitsui & Co.'s respective voting right percentages in the Target at 51% and 49% through the Transaction and jointly seek to enhance the Target's corporate value. Mitsui Chemicals is considering aggressively investing business resources in the Target for research and development and production technologies by making it a consolidated subsidiary of Mitsui Chemicals. Mitsui & Co. believes that the privatization of the Target's Shares will enable it to invest business resources in the Target more aggressively, although the Target will remain an equity method affiliate of Mitsui & Co. The method of fixing the number of the Tendered Shares to be purchased by each of Mitsui Chemicals and Mitsui & Co. upon the successful completion of the Tender Offer has not been determined as of the date of this Press Release. The Offerors will determine such method by the commencement of the Tender Offer through consultation.
If the Offerors fail to acquire all of the Target's Shares in the Tender Offer despite the successful completion of the Tender Offer, the Offerors will implement the series of procedures to make themselves the sole shareholders of the Target, as stated in "(4) Policies on the organizational restructuring, etc. after the Tender Offer (matters concerning "two-step acquisition")" below.
According to the "Statement of Opinion on the Tender Offer for Shares of Honshu Chemical Industry Co., Ltd. by Mitsui Chemicals, Inc. and Mitsui & Co., Ltd. and Recommendation for Tender" published today by the Target (the "Target's Press Release"), the Target resolved at its board of directors meeting held today to express its current opinion in support of the Tender Offer, if commenced, and to recommend that its shareholders tender their shares in the Tender Offer. For details of the process of decision-making by the board of directors of the Target, see the Target's Press Release and "(V) Unanimous approval of all disinterested directors of the Target and the opinion of all auditors that they have no objection" under "(3) Measures to ensure the fairness of the Tender Offer, such as measures to ensure the fairness of the Tender Offer Price and measures to avoid conflicts of interest" below.
(2) Background and purposes of the Tender Offer and decision-making process leading to the consummation of the Tender Offer and management policy after the Tender Offer
(I) Background and purposes of the Tender Offer and decision-making process leading to the consummation of the Tender Offer
Mitsui Chemicals is a new company established by the equal merger of Mitsui Petrochemical Industries, Ltd. ("MPI") and Mitsui Toatsu Chemicals, Inc. as of
(Note 1) "IoT" is an acronym for Internet of Things, meaning the interconnection via the Internet of computing devices embedded in everyday objects.
(Note 2) "ICT" is an acronym for Information and Communication Technology.
Mitsui & Co. was incorporated under the trade name of Daiichi Bussan Kaisha, Ltd. in
(Note 3) "Specialty chemicals" mean materials for green chemicals, materials for detergents, surface activating agents and their materials and materials for lubricants.
(Note 4) "Tank terminal business" is a business engaged in the storage, preservation and shipment services for petroleum products and petrochemicals, which is a major infrastructure in the energy and chemical industries.
(Note 5) "Healthcare/Nutrition" is a business field expected to drive creation of multifaceted value using existing businesses as a platform in order to create multifaceted value through integration of medicine and food including hospitals and their ancillary business, medical data business, integrated facility management, nutrition/presymptomatic diseases measures.
According to the Target's Press Release, the Target was initially founded by Asajiro Yura and his partners as Yuraseiko & Company in
(Note 6) "Aniline" is a type of aromatic compounds used as synthetic coating material of leather products. As of 1914, it was the main material for navy-blue Kasuri print. The first synthetic dye discovered is said to be coal-tar dye (aniline dye) discovered by Sir Perkins of the UK in 1856, and much research on synthetic dye was conducted in
(Note 7) "Synthetic phenol" is a type of aromatic compounds used as a material for various chemicals such as dye, surface-active agent, bactericide, agrichemical, medicine and other intermediates. The Target, which was also successful in benzene distillation in addition to synthesis of aniline as of 1914, succeeded in the production of phenol from benzene using synthesis technology.
After the change of its corporate name, the Target began domestic production of bisphenol A (Note 8; "BPA") for the first time in
(Note 8) "Bisphenol A (BPA)" is a chemical mainly used as a material for plastic (polycarbonate resin and epoxy resin).
Furthermore, the Target transferred its business related to the previous major product BPA to MPI in 1988, and accelerated the change of its focus from basic chemicals to unique products for niche markets, and also drastically changed its course to become a fine chemical specialist engaged in R&D. As a result, the Target is now equipped with a system to seamlessly conduct small-volume test production to large-scale production in accordance with the demands of customers by using plants operating switchable production of multiple products, and has achieved stable business management. In addition, for the purpose of strengthening the production of specialty bisphenol (Note 9), the Target established a joint venture company called Hi-Bis GmbH (consolidated subsidiary of the Target; "Hi-Bis") together with the Mitsui & Co. Group and other investors in 2001. In order to respond to further increase in demands, the second plant has been operating in Hi-Bis since 2014.
(Note 9) "Specialty bisphenol" is a chemical used as a material for specialty polycarbonate resin (for use in automobile components, optical and electronic components) and specialty epoxy resin (for use in semiconductor sealant, laminated plates), in order to enforce heat resistant features and optical properties.
The Mitsui Chemicals Group and the Target have built a relationship through capital relationships and business transactions through the present. Their relationship began in 1959 when the Target commenced to supply phenol to MPI, the predecessor company of Mitsui Chemicals. Thereafter, the Target continued to supply aniline, BPA and a number of other products to the Mitsui Chemicals Group. In
The Mitsui & Co. Group and the Target have also built a relationship through capital relationships and business transactions through the present. As a general trading company handling chemicals, the Mitsui & Co. Group has, since its days as one of its predecessor companies, Daiichi-Trading, conducted transactions to supply raw materials to the Target and to sell the Target products both in and outside
The Target Group's management policy is to "act as Global Fine Chemical Specialist for developing and utilizing its original technologies thus creating valuable products, and thereby realizing sustainable growth in collaboration with our clients. It is also our goal to make ourselves a genuinely reliable company and to gain respect from our clients, employees, shareholders and the regional society." Currently, under this policy, the Target has four (4) core businesses; namely, (i) Cresol Derivatives (Note 10); (ii) Biphenol (Note 11); (iii) Electronic Chemicals (Note 12); and (iv) Specialty Bisphenols. Based on these products, the Target is actively operating in
(Note 10) "Cresol Derivatives" are chemicals used as materials for vitamin E (additive for animal feeds), electronic chemicals and antioxidants.
(Note 11) "Biphenol" is a chemical used as a material for liquid crystal polymers (LCP) used in components of electronic devices such as personal computers, smartphones and digital home electronic appliances, and for polyphenyl sulfone (PPSU) used in medical areas and aircrafts.
(Note 12) "Electronic Chemicals" produced by the Target Group are used in the production processes for semiconductors and flat panel displays (LC displays and organic EL displays).
In addition, in order to become a Global Fine Chemical Specialist and build a competitive, profitable and strong business base, the Target Group has set up a long-term vision for 2030 called "HCI 500." Moreover, the Target Group has developed a 4-year medium-term management plan commencing from 2020 called "Medium-term Management Plan 20" (devised in
(Note 13) "5G" is a 5th generation technology standard for broadband cellular network after 4G.
(Note 14) "Materials informatics" is a method of informatics using statistical analysis in order to discover new materials from mass data.
(Note 15) "Bench facilities" refer to small-scale facilities that conduct prior test production or necessary measurement of design data upon full production.
(Note 16) "ESG" stands for Environment, Social and Governance.
(Note 17) "Sustainability" refers to a concept to maintain a long-term good natural environment and human society without depleting or damaging any functions and systems based on three (3) perspectives, i.e. environmental, social and economic aspects.
While customer needs and market needs for materials are expected to diversify and intensify given the full commencement of 5G services in the near future, the penetration of CASE (Note 18), further advancement of digital transformation (Note 20) via AI (Note 19) and IoT, the Offerors believe that, through their past capital and transactional relationships with the Target, the Target has a high potential for growth with its various high-technologies in domains of high-performance monomer (Note 21) related to ICT, Mobility and Healthcare. However, and concurrently, in order to draw out the potential of the Target and achieve sustainable growth even in the midst of dramatic changes in the external environment, such as the progress of CASE and 5G, increased competition with competitors in
(Note 18) "CASE" stands for Connected, Autonomous/Automated, Shared & Service, and Electric.
(Note 19) "AI" is an acronym for Artificial Intelligence, a technology that "aims to make a high level of inference accurately for a large amount of knowledge data (Prospectus of The Japanese Society for Artificial Intelligence)."
(Note 20) "Digital transformation" means any transformation of products, services and business models by companies based on customer needs and social needs in order to respond to rapid changes in business environment and by using data and digital technology, and any transformation of business, organization, process, corporate culture and features in order to gain competitive advantages over other competitors.
(Note 21) "Monomer" means a small molecule comprising polymers (e.g. ethylene).
The Offerors have been seeking to build alliances regarding individual businesses and products with the Target. However, there are certain restrictions in efficient and aggressive investments of business resources in the Target, and mutual use of business resources and personnel exchange among the Offerors and the Target pursuant to the limited capital relationship in which the Target remains as an equity method affiliate of each Offeror. In addition, even if any support from the Offerors for the challenges stated in (i), (ii) and (iii) above is beneficial for the Target, the Offerors are forced to be cautious when considering whether such support should be provided if the question of whether such support is beneficial for the Offerors themselves remains unclear. Also, if there are any conflicts of interest between the Offerors and the Target's minority shareholders, it is difficult for the Target to completely match the interests of the Offerors and those of the Target's minority shareholders. Therefore, the Offerors must carefully consider, on a case-by-case basis, measures to avoid conflicts of interest whenever any measures to deal with the challenges listed in (i), (ii) or (iii) are implemented or any transactions between the Target and the Offerors are conducted. As a result, prompt decision-making and implementation of measures are difficult.
Under such circumstances, since both the Mitsui Chemicals Group that deems ICT as a domain of growth in terms of business strategy and the Mitsui & Co. Group that seeks to increase the profitability of the high-performance monomer business as part of existing business growth based on the basic strategy of the Chemicals segment regard the Target as a strategic investment target given its deemed high potential for growth in the ICT business domain and the high-performance monomer business, the Offerors have intermittently engaged in discussions with the Target since late
(i) Strengthening of existing businesses and products
Existing businesses and products will be strengthened from various angles. This includes the use of customer networks, supply chains and technical bases of the Offerors to increase distributors of the existing products and to execute long-term contracts with customers, the reinforcement of production capacity for biphenol and optical specialty bisphenol, and the development of purposes of use for specialty bisphenols business of Hi-Bis. In addition, although the ICT-related businesses developed by the Target and the Mitsui Chemicals Group respectively were similar in nature, specific alliances have hardly been formed between the two parties although the possibilities were considered because there was an issue with conflicts of interest with the minority shareholders and there were certain restrictions in efficient and aggressive investments and mutual utilization of business resources under the limited capital relationship of an equity method affiliate. When the Target becomes a consolidated subsidiary of Mitsui Chemicals through the Transaction, this will enable aggressive and mutual utilization of business resources, and offerings to customers will be expanded by intensified material designs and combination of materials. Accordingly, the Offerors believe that this will enable the group as a whole to make higher value-added offerings to customers.
(ii) Creation of new businesses and products
Based on the unique technical capabilities of the Target to promptly and stably produce high-quality new products in the high-performance monomer business domain related to ICT, Mobility and Healthcare that have been cultivated since its foundation, and by making the Offerors as the sole shareholders of the Target through the Transaction, more efficient and aggressive investment and mutual utilization of business resources, which were difficult considering the issue of possible conflicts of interest with minority shareholders under the current limited capital relationships, are possible. The investment and mutual utilization specifically refer to the aggressive utilization of a wide range of research and development and production technology base such as polymers and catalytic technologies built by the Mitsui Chemicals Group as a general chemical manufacturer, as well as the consolidation of marketing and solution proposal capacities using the global network of the Mitsui & Co. Group as a general trading company. The Offerors also believe that expansion of product lineups and entry into new business domains are possible. Furthermore, advanced technologies including AI and materials informatics that are being adopted by the Offerors will also be introduced. Specifically, the Offerors are contemplating development of new monomers for which demand is increasing in ICT-related markets, joint development using organic synthesis, polymers, simulation and materials informatics technologies and research and development supports.
(iii) Personnel development and development of basis for sustainable development
Personnel development will be conducted to win global competition through joint use of personnel development platforms and programs held by the Offerors and exchange of personnel and technology, and also to respond to social requirements on ESG and to seek to strengthen the sustainable business base by the alliance of three (3) parties.
Pursuant to such recognition, the Offerors began to specifically consider the Transactions from early
As a result of these discussions and negotiations, the Offerors and the Target agreed in early
(II) Management policy after the Tender Offer
As of the date of this Press Release, the board of directors of the Target consists of nine (9) members, and its board of auditors consists of four (4) members. The Offerors plan to newly nominate an individual to be appointed as director(s) of the Target for the purpose of building a better business structure for efficient implementation of each measure stated in "(I) Background and purposes of the Tender Offer and decision-making process leading to the consummation of the Tender Offer" above. Specifically, the Offerors agreed pursuant to the shareholders agreement (the "Shareholders Agreement") entered into as of the date of this Press Release, that after the completion of the Transaction: (i) the number of directors of the Target will be no more than seven (7), the Offerors are entitled to appoint three (3) directors each and one director from the Target may be appointed by respecting the opinion of the representative directors of the Target; and (ii) the number of representative directors of the Target will be two (2) and Mitsui Chemicals is entitled to appoint the President and Representative Director and Mitsui & Co. is entitled to appoint the Vice President and Representative Director. Each Offeror intends to consider and nominate the personnel who is most capable at the time to maximize the corporate value regardless of his/her department or position as the representative director of the Target. Moreover, the Offerors agreed under the Shareholders Agreement that after the completion of the Transaction: (iii) the Target's Audit & Supervisory Board shall be abolished and shall have three (3) auditors, the Target is entitled to appoint one (1) full-time auditor and the Offerors are entitled to appoint one (1) part-time auditor each; and (iv) the Offerors shall establish a shareholder steering committee for the operation of the Target, and its members will be the responsible persons of the Offerors and the persons appointed by the Offerors.
For an overview of the Shareholders Agreement, see "(I) Shareholders Agreement" under "(6) Matters concerning material agreements regarding the Tender Offer" below.
In addition, the Offerors responded regarding the management policy of the Target after the Transaction during discussions with the Target concerning the Request Dated
The Offerors intend to implement and promote in good faith the matters provided in response to the Target concerning the relevant Requests.
(III) Decision-making process leading to and grounds for the opinion in favor of the Tender Offer by the Target
According to the Target's Press Release, as stated in "(I) Background and purposes of the Tender Offer and decision-making process leading to the consummation of the Tender Offer" above, the Target received an initial proposal for the Transaction from the Offerors in late
After receiving the proposal, as stated in "(3) Measures to ensure the fairness of the Tender Offer, such as measures to ensure the fairness of the Tender Offer Price and measures to avoid conflicts of interest" below, because (i) the Offerors respectively own 3,098,000 shares of the Target's Shares (Shareholding Ratio: 26.99%) as of the date of this Press Release and this Transaction constitutes the acquisition of an equity method affiliate by other associated companies of the Target that are the Target's major shareholders and top shareholders, (ii) the Offerors own a total of 6,196,000 shares (Shareholding Ratio: 53.99%) of the Target's Shares, and therefore are controlling shareholders of the Target, which could give rise to an issue of structural conflicts of interest and information asymmetry with general shareholders in the process of consideration of the Transaction by the Target, and because (iii) of the total of nine (9) directors of the Target, six (6) (Messrs.
On
While receiving advice from Nagashima Ohno & Tsunematsu, the Target resolved at its board of directors' meeting on
Furthermore, on
Subsequently, the Target considered the appropriateness of the Transaction through numerous discussions and considerations with the Offerors based on the outline of the Tender Offer including the purpose of the Transaction, the effects on the Target resulting from the Transaction, the details of the management policy after the Transaction and the current stock price trend, and also while receiving advice from Nagashima Ohno & Tsunematsu and Deloitte Tohmatsu Financial Advisory. During the following process of discussions and considerations, the Target reported to the Special Committee from time to time and has been handling, pursuant to the handling policies confirmed in advance by the Special Committee and opinions, instructions and requests given by the Special Committee upon important negotiation phases.
First, regarding the initial proposal from the Offerors received in late
Next, regarding the rationality of the purpose of the Transaction, the Target repeatedly discussed with the Offerors in order to specifically confirm and analyze the synergies in the Transaction. The Target and Mitsui Chemicals discussed the synergies on
The Target also came to acknowledge that it is crucial to ensure the independence of the management by the Target after the Transaction for the enhancement of the corporate value of the Target because having a pioneering spirit has always been the Target's basic policy while it engaged in the creation of a number of products (first in
Subsequently, on
Based on the abovementioned discussions with the Offerors and the details of the abovementioned answers received from the Offerors, the Target decided that the synergies explained below can be expected and that the independent management by the Target can be ensured even after the Transaction as stated in "(II) Management policy after the Tender Offer" above. Consequently, the Target was able to confirm the rationality of the purpose of the Transaction, and commenced specific discussions and considerations on the terms and conditions of the Transaction, including the Tender Offer Price.
The Offerors and the Target commenced to discuss and consider the specific terms and conditions of the Transaction including the Tender Offer Price, from early
Regarding the Tender Offer Price, the Target received an initial proposal from the Offerors of
Furthermore, the Target received necessary legal advice from Nagashima Ohno & Tsunematsu concerning the method and process of decision-making of the Target's meeting of the board of directors and other concerns, including procedures for the Transaction, and received a written report from the Special Committee as of
The Target Group has built various cooperative relationships on sales to customers and research and development not only limited to its major shareholders, the Mitsui Chemicals Group and the Mitsui & Co. Group, and has gained trust from customers through its continuous efforts in research and development, production and sales/marketing in order to satisfy customer's demands based on its customer-first policy and its prompt attainment of goals. However, the business environment of the Target Group is significantly affected not only by trends of the fine chemical industry to which the Target Group belongs, but also by trends of periphery markets. In the automobile market, medium and long-term trends involve EV and automated driving, and there is a slowdown in growth due to the current decrease in travel as a result of the COVID-19 pandemic. In addition, in the IT-related goods market, competitions to establish de facto standards (Note 1) for various materials for 5G and ICT high-performance device are gaining speed at an unprecedented level, and customer needs and market needs of materials are diversifying and intensifying. As stated above, while the changes in the market environment of the Target Group are accelerating, and customer needs are diversifying and intensifying, the Target believes that in order to attain growth strategies with a sense of speed ahead of other competitors and gain profit therefrom, the Target must urgently build new products and new business domains and expand the production system. In order to deal with these matters, the Target is aggressively engaged in employment of professionals, utilization of external institutions and increase of open innovation, but there is a limit in investing significant resources given its current size of business.
(Note 1)"Competitions to establish de facto standards" mean that since existing standard materials are unable to meet the demand functions in high-speed and large-capacity cellular market mainly related to 5G where demands are rapidly increasing, related companies are making efforts to allow their own standards to be adopted as the new standard materials in order to ensure their competitive superiority in the relevant market.
Under such circumstances, the Target figured that pursuant to the customer-first policy, in order to place various cooperative relationships regarding sales to customers and research and development as a top-priority as before without impairing such trust, and to satisfy customers' needs with more speed, it is important to obtain the following business resources through the Transaction. The Target wishes to attain the Target's sustainable growth for years to come by gaining more trust from the customers. The Target believes that the synergies listed in (i) through (iii) below as stated in "(I) Background and purposes of the Tender Offer and decision-making process leading to the consummation of the Tender Offer" above are expected as a result of the Transaction.
(i) Strengthening of existing businesses and products
Existing businesses and products of the Target may be strengthened from various angles. This includes more possibilities of the use of customer network, supply chains and technical base of the Offerors to increase distributors of the existing products and to execute long-term contracts with customers, the reinforcement of production capacity for biphenol and optical specialty bisphenol, and the development of purposes of use for specialty bisphenols business of Hi-Bis.
(ii) Creation of new businesses and products
Based on the unique technical capabilities of the Target to promptly and stably produce high-quality new products in the high-performance monomer business domain related to ICT, Mobility and Healthcare that it has been cultivating since its foundation, the Target believes it can expand and accelerate the development of new products including existing businesses and the development of new monomers for which demand is increasing in ICT-related markets through the aggressive utilization of a wide range of research and development and production technology base such as polymers and catalytic technologies built by the Mitsui Chemicals Group as a general chemical manufacturer, the consolidation of marketing and solution proposal capacities using the global network of the Mitsui & Co. Group as a general trading company, as well as the introduction of advanced technologies, including AI and materials informatics, which are being adopted by the Offerors.
(iii) Personnel development and development of basis for sustainable development
Personnel development will become possible to be conducted by the Target to win global competition through joint use of personnel development platforms and programs held by the Offerors and exchange of personnel and technology, and also the Target believes it can seek to strengthen a sustainable business base that responds to social requirements on ESG by the alliance of three (3) parties.
In addition, the utilization of abundant business resources of the Offerors is expected to expand the Target's business scale through an increase in the Target's production volume, expansion of business, expansion or increase of production sites based on business continuous plan, and prompt and definite securement of necessary business resources. The Target also believes that flexible and prompt resolution of challenges that were difficult to be handled by the Target alone will be possible, and that offering of solutions and new values to various customers as before will further increase the feasibility of the Target's long-term vision "HCI 500."
In accordance with the above reasons, the Target concluded in early
The Target's board of directors determined that the Transaction, including the Tender Offer, is expected to enhance the Target's corporate value, the Tender Offer Price and other terms and conditions of the Tender Offer are appropriate for all shareholders of the Target, and that the Tender Offer offers reasonable opportunities to all shareholders of the Target to sell the shares based on the following facts relating to the Tender Offer Price (1,830 yen): (i) regarding the share valuation results of the Target's Shares calculated by Deloitte Tohmatsu Financial Advisory as stated in "(II) Procurement of Share Valuation Report by the Target from an independent third-party valuator" under "(3) Measures to ensure the fairness of the Tender Offer, such as measures to ensure the fairness of the Tender Offer Price and measures to avoid conflicts of interest," the Tender Offer Price exceeds the maximum of the price range based on the average market price method, is within the price range based on the comparable company analysis method and exceeds the median of the price range based on the DCF Method, the price accounts for a 41.86% premium (rounded to the second decimal place; hereinafter the same in calculation of the premiums (%) over the stock prices) over the closing price (
Thus, the Target resolved at its board of directors' meeting as of the date of this Press Release with unanimous approval of all nine (9) directors of the Target who participated in the discussions and the resolution that, as the current opinion of the Target, the Target will express its opinion to support the Tender Offer if the Tender Offer is commenced and recommend its shareholders to tender their shares in the Tender Offer. Three (3) auditors of the Target (excluding Mr.
The Offerors plan to promptly implement the Tender Offer upon the satisfaction of the Conditions (or waiver by the Offerors). As of the date of this Press Release, the Offerors aim to commence the Tender Offer in or around
Accordingly, the Target also resolved at the abovementioned meeting of the board of directors that: (i) upon the commencement of the Tender Offer, the Special Committee established by the Target shall consider whether changes should be made to the Written Report submitted to the Target's board of directors as of
For details of the resolution of the Target's meeting of the board of directors as of the date of this Press Release, see "(V) Unanimous approval of all disinterested directors of the Target and the opinion of all auditors that they have no objection" under "(3) Measures to ensure the fairness of the Tender Offer, such as measures to ensure the fairness of the Tender Offer Price and measures to avoid conflicts of interest."
(3) Measures to ensure the fairness of the Tender Offer, such as measures to ensure the fairness of the Tender Offer Price and measures to avoid conflict of interests
As of the date of this Press Release, the Target is not a consolidated subsidiary of the Offerors, and the Tender Offer does not constitute a tender offer by the controlling shareholder. However, because: (i) the Offerors respectively own 3,098,000 shares of the Target's Shares (Shareholding Ratio: 26.99%) as of the date of this Press Release, and this Transaction constitutes the acquisition of an equity method affiliate by other associated companies of the Target that are the Target's major shareholders and top shareholders; (ii) the Offerors own a total of 6,196,000 shares (Shareholding Ratio: 53.99%) of the Target's Shares, and therefore are equivalent to controlling shareholders of the Target, which could give rise to an issue of structural conflicts of interest and information asymmetry with general shareholders in the process of consideration of the Transaction by the Target; and (iii) of the total of nine (9) directors of the Target, six (6) (Messrs.
Furthermore, as of the date of this Press Release, the Offerors decided that because the Offerors own a total of 6,196,000 shares (Shareholding Ratio: 53.99%) of the Target's Shares, that if the minimum of the so-called "Majority of Minority" is set, the establishment of the Tender Offer would be rather destablized, which in turn might not serve the interests of minority shareholders who wish to tender in the Tender Offer, and, therefore, no minimum of the so-called "Majority of Minority" was set in this Tender Offer. However, because the Offerors and the Target assumed the measures below in (I) through (VI), the Offerors and the Target believe that due consideration was given to the interests of the Target's minority shareholders.
(I) Procurement of a Share Valuation Report from an independent third-party valuator retained by the Offerors
In order to ensure fairness of the Tender Offer Price, Mitsui Chemicals retained SMBC Nikko Securities, Mitsui Chemicals' financial advisor, to serve as a third- party valuator independent from the Offerors and the Target to calculate the share value of the Target's Shares in order to determine the Tender Offer Price. For details on the share valuation report concerning the share value of the Target's Shares (the "Share Valuation Report (SMBC Nikko Securities)") procured by Mitsui Chemicals from SMBC Nikko Securities, see "(i) Basis of calculation by Mitsui Chemicals" under "(I) Basis of calculation" under "(4) Basis of calculation of the price of tender offer" under "2. Summary of tender offer" below.
In order to ensure fairness of the Tender Offer Price, Mitsui & Co. retained Nomura Securities, Mitsui & Co.'s financial advisor, to serve as a third-party valuator independent from the Offerors and the Target to calculate the share value of the Target's Shares in order to determine the Tender Offer Price. For details on the share valuation report concerning the share value of the Target's Shares (the "Share Valuation Report (Nomura Securities)") procured by Mitsui & Co. from Nomura Securities, see "(ii) Basis of calculation by Mitsui & Co." under "(I) Basis of calculation" under "(4) Basis of calculation of the price of tender offer" under "2. Summary of tender offer" below.
(II) Procurement of Share Valuation Report by the Target from an independent third-party valuator
The Target, in expressing its opinion concerning the Tender Offer, retained Deloitte Tohmatsu Financial Advisory as its third-party valuator independent from the Target and the Offerors to calculate the share value of the Target's Shares, and procured the Share Valuation Report on
Deloitte Tohmatsu Financial Advisory considered multiple calculation methods to apply in calculating the share value of the Target's Shares. On the assumption that the Target is a going concern, and that multifaceted valuation of the Target's Shares is appropriate, Deloitte Tohmatsu Financial Advisory decided to apply: (i) the average market price method given that the Target's Shares are listed on the Second Section of the TSE and thus the market price thereof is available; (ii) the comparable company analysis method given that there are multiple listed companies that are engaged in business relatively similar to the Target's business, and the availability of an analogy of the share value thereof by comparison with companies that are determined to be engaged in business similar to the business of the Target; and (iii) the DCF Method to reflect the future business activities of the Target in valuation, in calculating the per share value of the Target's Shares. The share price range per share of the Target's Shares as calculated by each of the above methods is as follows.
Average market price method: |
From |
Comparable company analysis method: |
From |
DCF Method: |
From |
Pursuant to the average market price method, as of the reference date of calculation on
Pursuant to the comparable company analysis method, the listed companies that are judged to be engaged in business similar to the business of the Target and therefore comparable with the Target were chosen for comparison, and the share value of the Target's Shares was calculated by using the EBITDA ratio against the enterprise value. For this purpose, ADEKA Corporation, Sumitomo Bakelite Company Limited, Osaka Organic Chemical Industry Ltd., Taoka Chemical Company, Limited, Hokko Chemical Industry Co., Ltd., and Koei Chemical Company, Limited were chosen as the listed companies that were judged to be engaged in business similar to the business of the Target. As a result, the share value range per share of the Target's Shares was calculated to be
Pursuant to the DCF Method, the Target's enterprise value and share value were calculated by using various elements such as the business plan from its Fiscal Year ending
The concrete figures for the Target's financial forecast that Deloitte Tohmatsu Financial Advisory used as the basis for the calculation pursuant to the DCF Method are as follows. Deloitte Tohmatsu Financial Advisory does not project significant increase or decrease in profits in comparison with the previous years. Also, because the synergistic effects that could be expected by executing the Transaction, including the Tender Offer, are difficult to estimate at present, Deloitte Tohmatsu Financial Advisory did not take these into account in its financial forecasts. The Offerors were informed that these financial forecasts were analyzed and reviewed through several sessions of questions and answers conducted by Deloitte Tohmatsu Financial Advisory with the Target.
(Unit: million yen)
|
|
|
|
|
Net sales |
10,673 |
24,227 |
27,691 |
29,557 |
Operating income |
730 |
3,088 |
3,468 |
4,274 |
EBITDA |
1,477 |
4,896 |
5,839 |
6,927 |
Free cash flow |
(757) |
(1,802) |
(1,562) |
3,998 |
(Note 1) EBITDA is calculated by adding depreciation to operating income, and free cash flow is calculated based on the EBITDA.
(Note 2) Deloitte Tohmatsu Financial Advisory, in principle, straightforwardly used information received from the Target and information publicly disclosed by it, etc. in calculating the share value of the Target's Shares and did not independently verify their accuracy and completeness, on the basis that all such materials and information are accurate and complete and that there are no facts that were not disclosed to Deloitte Tohmatsu Financial Advisory that may materially affect the calculation of the share value of the Target's Shares. In addition, as for the information concerning the Target's financial forecast, it was assumed that such information was reasonably prepared based on the best estimate and judgment that could be currently made by the Target's management. Furthermore, Deloitte Tohmatsu Financial Advisory did not independently evaluate and assess, or retain a third party firm to appraise or assess, the Target and its affiliates' assets and liabilities (including financial derivative products, off-book assets and liabilities, and other contingent liabilities). The calculation of Deloitte Tohmatsu Financial Advisory is said to reflect the above information through
(III) Establishment of independent special committee at the Target and procurement of written report from the said committee
As indicated above in "(III) Decision-making process leading to and grounds for the opinion in favor of the Tender Offer by the Target" under "(2) Background and purposes of the Tender Offer and decision-making process leading to the consummation of the Tender Offer and management policy after the Tender Offer," the Target established the Special Committee by resolution of its board of directors at the meeting of the board of directors held on
Accordingly, the Target's board of directors established the Special Committee on
- whether the purpose of the Transaction is reasonable (including whether the Transaction will contribute to the enhancement of enterprise value);
- whether the terms of the Transaction (including the Tender Offer Price) are appropriate from the point of view of protecting the interests of the Target's minority shareholders;
- whether due consideration was given to protecting the interests of the Target's minority shareholders through fair procedures of the Transactions;
- whether the Target's board of directors should support or object to the Tender Offer that is the subject of the Transaction under the final terms, and whether it should recommend that the Target's shareholders tender in the Tender Offer; and
- whether the Transaction (including the Target's opinion concerning the Tender Offer) is disadvantageous to the Target's minority shareholders.
The Target, at its board of directors meeting described above, made a resolution with respect to the decision concerning the Tender Offer by the Target's board of directors, that it would fully respect the judgment of the Special Committee, including the Special Committee's views on its support or objection to the Tender Offer and recommendation to tender in the Tender Offer, and in particular, that if the Special Committee determines that the purpose of the Transaction or the terms and conditions of the Transaction are inappropriate, the Target will not support the Tender Offer and will not recommend to tender in the Tender Offer. It was also resolved to grant to the Special Committee the (a) authority to negotiate the terms and conditions of the Transaction, (b) authority to approve the advisors chosen by the Target (financial advisor and legal advisor), (c) authority to appoint, if necessary and at the Target's expense, an advisor (financial advisor, legal advisor, and other advisor) to solely advise the Special Committee, and authority to seek professional advice from the Target's advisors (financial advisor and legal adviser), and (d) authority to acquire information (authority to request the Target's officers and employees and the Offerors to provide necessary information).
It was also resolved at the Target's board of directors meeting held on
At the Special Committee, Ms.
The Special Committee held a total of 18 meetings from
Specifically, at the first meeting of the Special Committee, the members confirmed that the legal advisor retained by the Target, Nagashima Ohno & Tsunematsu, and the financial advisor retained by the Target, Deloitte Tohmatsu Financial Advisory, were both professionally qualified and independent, and both would be approved as the Target's legal advisor and financial advisor, respectively, and the Special Committee had no objections to receiving professional advice from these two firms, and if the Special Committee determined it to be necessary, the Special Committee would, at the expense of the Target, retain other lawyers, certified public accountants and other advisors as necessary and seek advice therefrom. The Special Committee also confirmed that as its policy for involvement in negotiations with the Offerors, it would conduct direct negotiations through the Target and the Target's financial advisor, Deloitte Tohmatsu Financial Advisory, as the liaison, and proposals and other opinions from the Special Committee should be conveyed to the Offerors in principle through the Target or the Target's financial advisor, Deloitte Tohmatsu Financial Advisory, and if the Special Committee requested, the Special Committee shall be authorized to directly question and discuss with the Offerors, the Special Committee should receive timely reports from the Target or the Target's financial advisor, Deloitte Tohmatsu Financial Advisory, on the status of discussions with the Offerors, the Special Committee would determine the policy for negotiating the terms if necessary, and may state and opinion thereto, and the Special Committee could become substantially involved in the process of negotiation concerning the terms for the Transaction through the above arrangements.
Accordingly, the Special Committee, from and after its second meeting, based on the materials received from the Target, received explanation from the Target concerning the contents of the proposal from the Offerors, the purpose and reason for conducting the Transaction, the effect of the Transaction to the Target's enterprise value, the Target's requests to the Offerors upon executing the Transaction, the Target's business plan (including the rationale and process of formulating the plan), the terms of the Transaction and how these terms were decided, and held a question and answer session on the foregoing. The Special Committee received an explanation from Deloitte Tohmatsu Financial Advisory concerning the calculation of the Target's share value and held a question and answer session on this issue, and received legal advice from Nagashima Ohno & Tsunematsu concerning the contents of measures to ensure fairness of the Transaction and measures to avoid conflicts of interests and other matters overall related to the Transaction and held a question and answer session concerning the foregoing. Furthermore, the Special Committee received an explanation from the Offerors concerning the purpose and reasons for conducting the Transaction, the Target's management policies after execution of the Transaction, and views towards various terms of the Transaction, including the Tender Offer Price, and held a question and answer session concerning the foregoing. The Special Committee is also receiving reports from time to time from the Target and Deloitte Tohmatsu Financial Advisory concerning the system, circumstances, and contents of discussions and negotiation on the Transaction between the Offerors and the Target and are discussing on those contents.
The Special Committee determined with respect to the fact that the Offerors expect a so-called indirect market check (Note) that while the purchase period for the Tender Offer (the "Tender Offer Period") is set to twenty (20) business days which is a statutory minimum period, there is a long period of time from the time of the announcement of the scheduled commencement of the Tender Offer until actual commencement of the Tender Offer, and it could therefore be said that a relatively long period of time is ensured after the announcement, and that no agreement will be executed that restricts competitive potential purchasers from contacting the Target, such as an agreement, etc. that contains a provision to protect the transaction by prohibiting the Target from contacting competitive potential purchasers, an indirect market check is properly functioning and fairness of the Transaction is not undermined.
(Note1) An “indirect market check” is a term used in the “Fair M&A Guidelines: Enhancing Corporate Value and Securing Shareholders’ Interests” dated
Furthermore, after the Target received a proposal from the Offerors on
The Special Committee received an explanation on the Target's draft Press Release that is scheduled to be disclosed by the Target, and, having received advice from Nagashima Ohno & Tsunematsu, confirmed that detailed informative disclosure would be made concerning the Transaction.
Accordingly, the Special Committee, after carefully and repeatedly discussing and reviewing the Items for Advice, by unanimous resolution, submitted its written report substantially as described below on the Items for Advice to the Target's board of directors on
(i) whether the purpose of the Transaction is reasonable (including whether the Transaction will contribute to enhancement of enterprise value):
(a) The Offerors' explanation of the purposes of the Transaction, the synergies of the Transaction, and the management policy after the Transaction are, in summary, as indicated above in "(I) Background and purposes of the Tender Offer and decision-making process leading to the consummation of the Tender Offer" and "(II) Management policy after the Tender Offer" under "(2) Background and purposes of the Tender Offer and decision-making process leading to the consummation of the Tender Offer and management policy after the Tender Offer." However, the Target's view of the purposes of the Transaction and synergies of the Transaction are, in summary, as indicated above in "(III) Decision-making process leading to and grounds for the opinion in favor of the Tender Offer by the Target" under "(2) Background and purposes of the Tender Offer and decision-making process leading to the consummation of the Tender Offer and management policy after the Tender Offer."
(b) (Concerning the purposes of the Transaction) The Target and the Offerors' views on the present state of the business environment surrounding the Target and the Target's managerial issues are consistent with the contents of the general explanation given concerning the Target's current business content and the market environment and the contents of the explanation and the contents of the materials provided from the Target, and the Special Committee has no objections. The purposes of the Transaction are understood to be: (i) whereas in a closed capital relationship of an equity method affiliate, there are issues of conflicts of interests with minority shareholders and restrictions on efficient and proactive introduction and mutual use of managerial resources, the above issues and restrictions could be resolved by making the Offerors the sole shareholders of the Target through the Transaction, by achieving transition to a trinity management system with a more solid capital relationship, and (ii) to enhance the Target's enterprise value by creating synergy as indicated above in "(III) Decision-making process leading to and grounds for the opinion in favor of the Tender Offer by the Target" under "(2) Background and purposes of the Tender Offer and decision-making process leading to the consummation of the Tender Offer and management policy after the Tender Offer." Therefore, the purposes of the Transaction are reasonable.
(c) (Concerning synergy) The Target and Offerors' explanations concerning synergy of the Transaction are not unreasonable and they gave a concrete explanation of the basis for the Target's business content and managerial conditions. Because there are also no facts that could raise doubts from other materials provided to the Special Committee and explanations given from the Target and Offerors, the Transaction could be expected to create reasonable synergy in strengthening the Target's existing businesses and products, creation of new businesses and products, personnel development, and enhancement of a basis for sustainable development.
(d) (Concerning management system after the Transaction) In view of the Target's history and corporate culture, in order for the Target to continue to contribute to society by introducing products of value to customers, including in niche fields, it is important to ensure a certain level of independence (autonomy) for the Target and to maintain motivation of the employees, which is the source of enterprise value. Also, where Mitsui Chemicals and Mitsui & Co. will jointly operate the business after the Transaction, it is important for a system to be established to enable these two companies to conduct the Target's business smoothly and quickly, and with consistency and continuity. In this regard, the Special Committee reviewed, from the perspective of operating the business with independence, maintaining motivation of the employees, and operating business smoothly, quickly, consistently and continuously, how the privatization of the Target would affect the officers and employees' motivation while maintaining the confidentiality of the business counterparties' secrets, how the business counterparties will react towards incorporation of the Target into the Mitsui group, and how this would affect the systems, and the Special Committee determined that reasonable measures were assumed from the perspective of business operation, and that the Target was given a certain level of freedom in its business operation, and that there are no conspicuous or detrimental disadvantages in any other aspects.
Thus, the Special Committee believes that the Transaction will contribute to enhancing the enterprise value of the Target, and that the purposes of the Transaction are reasonable.
(ii) whether the terms of the Transaction (including the Tender Offer Price) are appropriate from the view of protecting the interests of the Target's minority shareholders:
(a) (Concerning the premises for calculating the value) The method for calculating the share value per share of the Target's Shares by Deloitte Tohmatsu Financial Advisory, a third party valuator, is the typical calculation method, and the reasons given for applying each of the average market price method, comparable company analysis method, and the DCF Method are not unreasonable. Furthermore, because the results of calculation based on each of these calculation methods are by Deloitte Tohmatsu Financial Advisory, a third-party valuator with extensive experience, the results of calculation of share value per share of the Target's Shares do not seem unreasonable. There are also no unreasonable aspects with respect to financial forecast and preconditions that are the bases for applying the above calculation methods and their calculation results.
(b) (Appropriateness of the Tender Offer Price) The Tender Offer Price (
(c) (Appropriateness of the terms other than the Tender Offer Price) The Offerors anticipate that the so-called indirect market check will function, and they are scheduled to set the Tender Offer Period to 20 business days, which is a statutory minimum period. However, the Offerors aim to commence the Tender Offer from around
Accordingly, the terms of the Transaction, including the Tender Offer Price, are appropriate from the perspective of protection of interests of the Target's minority shareholders.
(iii) whether due consideration is given to protect the interests of the Target's minority shareholders through fair procedures of the Transactions:
(a) (Establishment of independent special committee) The Special Committee was established promptly (on
(b) (Internal review system) At the Target, a project team comprised of seven (7) directors of the Target (excluding Ms.
(c) (Procurement of advice from legal advisor) As indicated below in "(IV) Advice procured by the Target from an independent law firm," the Target retained Nagashima Ohno & Tsunematsu as its legal advisor independent from the Target and the Offerors and professionally qualified. The Target is receiving necessary legal advice from the firm concerning the method and process of decision making by the Target's board of directors concerning the Transaction, including the Tender Offer and other matters that must be noted.
(d) (Procurement of Share Valuation Report from a third-party valuator) As indicated above in "(II) Procurement of Share Valuation Report by the Target from an independent third-party valuator," the Target retained Deloitte Tohmatsu Financial Advisory as its independent and professional financial adviser. The Target requested Deloitte Tohmatsu Financial Advisory, a third-party valuator, to calculate the share value of the Target's Shares and procured the Share Valuation Report from the same on
(e) (Ensure opportunity for other purchasers to make purchase offer (market check), establishment of Majority of Minority terms) As indicated above in "(ii) whether the terms of the Transaction (including the Tender Offer Price) is appropriate from the view of protecting the interests of the Target's minority shareholders; (c)," the opportunities of general shareholders of the Target to make appropriate judgments in tendering to the Tender Offer and the opportunities of parties other than the Offerors to purchase the Target's Shares are ensured, and the Offerors and the Target have not made any agreement that would restrict contact by competitive purchasers with the Target. Accordingly, an indirect market check is correspondingly functioning for the Transaction and the fairness of the Transaction is not hindered. Furthermore, the Offerors are not scheduled to set the minimum of the so-called "Majority of Minority" in the Tender Offer, but due consideration will be given to the interests of the Target's minority shareholders because the Offerors and the Target assumed the measures in this paragraph.
(f) (Provision of detailed information to general shareholders and enhancement of transparency of the process) The Special Committee received an explanation concerning the Target's Press Release scheduled to be disclosed by the Target and the Offerors’ Press Release, and having received advice from Nagashima Ohno & Tsunematsu, confirmed that a detailed informative disclosure will be made concerning the Transaction.
(g) (Elimination of pressure) As indicated below in "(4) Policies on the organizational restructuring, etc. after the Tender Offer (matters concerning "two-step acquisition")," after the Tender Offer is successfully completed, the Offerors are scheduled to conduct Share Consolidation, which shall be conducted promptly after completion of settlement for the Tender Offer. Arrangements shall be made to allow the Target's shareholders who opposed the Share Consolidation to claim for the Target to purchase all fractional shares of the Target that they own at a fair price and to allow them to file with the court to determine the price of the Target's Shares. In this respect, the Offerors are scheduled to disclose in the Offerors’ Press Release that the consideration to be paid to each shareholder of the Target who did not tender in the Tender Offer will be in the same amount as the Tender Offer Price.
Accordingly, due consideration was given to the interests of the Target's minority shareholders by ensuring fair procedures in the Transaction.
(iv) whether the Target's board of directors should support or object to the Tender Offer that is the subject of the Transaction under the final terms, and whether it should recommend the Target's shareholders to tender in the Tender Offer:
Based on the decisions made above in (i) to (iii), it is considered appropriate for the Target's board of directors to support the Tender Offer under the final terms, and to recommend the Target's shareholders to tender in the Tender Offer.
(v) whether the Transaction (including the Target's opinion concerning the Tender Offer) is disadvantageous to the Target's minority shareholders:
Based on the decisions made above in (i) to (iii), the Transaction (for the Target's board of directors to support the Tender Offer under the final terms, and to recommend the Target's shareholders to tender in the Tender Offer above in (iv)) is not disadvantageous to the Target's minority shareholders.
(IV) Advice procured by the Target from an independent law firm
The Target, in order to ensure fairness and appropriateness in the method and process of decision-making by the Target's board of directors concerning the Transaction, including the Tender Offer, retained Nagashima Ohno & Tsunematsu as its legal advisor independent from the Target and the Offerors. The Target is receiving necessary legal advice from the firm concerning the method and process of decision making by the Target's board of directors concerning the Transaction, including the Tender Offer, and other matters that must be noted.
Nagashima Ohno & Tsunematsu is not a related party of the Target and the Offerors and has no material interests in the Transaction, including the Tender Offer. Nagashima Ohno & Tsunematsu will be paid a fee calculated by multiplying the hours of service rendered by an hourly rate regardless of whether the Transaction is executed and its fee does not include a performance fee conditioned on execution of the Transaction. The Special Committee confirmed at its first meeting that Nagashima Ohno & Tsunematsu is independent and approved this firm as the Target's legal advisor.
(V) Unanimous approval of all disinterested directors of the Target and the opinion of all auditors that they have no objection
The Target, based on legal advice received from Nagashima Ohno & Tsunematsu, and the Share Valuation Report received from Deloitte Tohmatsu Financial Advisory, and giving full respect to the written report from the Special Committee (see above "(III) Establishment of independent special committee at the Target and procurement of written report from the said committee" concerning the members of the Special Committee and its concrete activities), carefully reviewed the terms of the Transaction, including the Tender Offer.
As a result, as indicated above in "(III) Decision-making process leading to and grounds for the opinion in favor of the Tender Offer by the Target" under "(2) Background and purposes of the Tender Offer and decision-making process leading to the consummation of the Tender Offer and management policy after the Tender Offer," the Target's board of directors determined that with respect to this Transaction, it could be expected that this Transaction, including the Tender Offer, will enhance the Target's corporate value, the Tender Offer Price and other terms of the Tender Offer are appropriate for the Target's shareholders, and the Tender Offer provides a reasonable opportunity for the Target's shareholders to sell their shares. At the Target's board of directors meeting held as of the date of this Press Release, the nine (9) directors of the Target who participated in the discussion and resolution unanimously resolved that the Target's current opinion is that in the event the Tender Offer is commenced, the Target will express its opinion in support of the Tender Offer and will recommend the Target's shareholders to tender in the Tender Offer. At the board of directors meeting described above, three (3) auditors of the Target (excluding Mr.
Of the nine (9) directors of the Target, six (6) were employees of the Offerors within the most recent ten (10) years (Messrs.
Mr.
(VI) Measures to ensure purchase opportunities for other purchasers
The Offerors aim to commence the Tender Offer from around
In addition, the Offerors and the Target have not made any agreement containing a transaction protection clause that prohibits the Target from contacting competitive purchasers, or any other agreement that restricts contacts between competitive purchasers and the Target.
Because sufficient time is provided until commencement of the Tender Offer and opportunities are provided to allow competitive offers to be made, the Offerors are giving due consideration to ensure fairness of the Tender Offer.
(4) Policies on the organizational restructuring, etc. after the Tender Offer (matters concerning "two-step acquisition")
As stated above in "(1) Outline of the Tender Offer," if the Offerors were unable to acquire all of the Target's Shares in the Tender Offer, then after the successful completion of the Tender Offer, the Offerors are scheduled to implement a series of procedures to make the Offerors the sole shareholders of the Target as follows.
Promptly after completion of settlement for the Tender Offer, the Offers will request the Target to convene an extraordinary shareholders' meeting (the "Extraordinary Shareholders' Meeting") preferably in
The ratio of consolidation of the Target's Shares is undecided as of the date of this Press Release, however, the Target shall be requested to decide such ratio based on the number of the Target's Shares owned by the Offerors after the Share Consolidation to result in the Offerors being the sole shareholders of the Target's Shares (excluding the treasury shares owned by the Target). The specific procedures and the time of implementation shall be agreed through discussions with the Target and are scheduled to be promptly announced by the Target as soon as they are fixed.
The Offerors are also scheduled to implement procedures so that after the Share Consolidation, Mitsui Chemicals' and Mitsui & Co.'s percentage of voting rights held in the Target after it is privatized will be 51% and 49%, respectively. The specific procedures are undecided as of the date of this Press Release and they are scheduled to be decided by taking into account the situation of ownership, etc. of the Target's Shares by the Offerors and the Target's shareholders other than the Offerors after the Tender Offer. Regardless of which procedure is chosen, the transaction is scheduled to be implemented at a price that will not undermine uniformity of the tender offer price.
The Tender Offer is not a solicitation for the Target's shareholders to vote in support of the proposals at the Extraordinary Shareholders' Meeting. The Target's shareholders are also requested to confirm with professionals, such as tax accountants, at their responsibility concerning tax treatment for tendering in the Tender Offer or in each of the other procedures above.
(5) Possibility of delisting and reason therefor
The Target's Shares are listed on the Second Section of the TSE as of the date of this Press Release. Because the Offerors did not set a maximum number of shares to be purchased in the Tender Offer, the Target's Shares may become delisted through the prescribed procedures in accordance with TSE's delisting criteria depending on the results of the Tender Offer. Also, even if such delisting criteria are not met as of the time of establishment of the Tender Offer, if the Tender Offer is established, the Offerors intend to implement a series of procedures to make the Offerors the sole shareholders of the Target thereafter as explained above in "(4) Policies on the organizational restructuring, etc. after the Tender Offer (matters concerning "two-step acquisition")" where in such case, the Target's Shares will be delisted through the prescribed procedures in accordance with TSE's delisting criteria. After the Target's Shares are delisted, the Target's Shares may no longer be traded on the Second Section of the TSE.
(6) Matters concerning material agreements regarding the Tender Offer
-
Shareholders Agreement
As indicated above in "(II) Management policy after the Tender Offer" under "(2) Background and purposes of the Tender Offer and decision-making process leading to the consummation of the Tender Offer and management policy after the Tender Offer," as of the date of this Press Release, the Offerors executed the Shareholders Agreement containing the following contents concerning joint operation of the Target Group. In this regard, it is stipulated that the Shareholders Agreement, excluding general provisions and some other provisions, shall take effect when the Offerors become the sole shareholders of the Target (excluding the Target and persons who have rights to fractional shares) in accordance with the provisions of the Joint Tender Offer Agreement.
- Matters concerning the organization and operation of the Target (to provide that after the Transaction is completed: (a) the Target shall have no more than seven (7) directors, the Offerors are entitled to appoint three (3) directors respectively, and one (1) director from the Target may be appointed by respecting the opinion of the representative directors of the Target, (b) the number of representative directors of the Target will be two (2) and Mitsui Chemicals is entitled to appoint the President and Representative Director and Mitsui & Co. is entitled to appoint the Vice President and Representative Director, (c) the Target's Audit & Supervisory Board shall be abolished and the Target shall have three (3) auditors, the Target is entitled to appoint one (1) full-time auditor and the Offerors are each entitled to appoint one (1) part-time auditor, (d) the Offerors shall establish a shareholder steering committee to smoothly and appropriately operate the business of the Target, and the members of this committee shall be comprised of the responsible persons of the Offerors and the persons appointed by he Offerors, and (e) matters that are subject to agreement with the Offerors concerning operation of the Target Group, etc. (amendment of important internal regulations, M&A transactions, capital strategies, major transactions, business plans and budgets, employment of key employees, instituting and settling litigations, and other important matters), etc.);
-
Matters concerning the role, etc. of each party in operating the business of the Target Group (After completion of the Transaction, for the Offerors to support the Target Group in overall management, and enforce sales and marketing inside and outside of
Japan to enhance the Target Group's enterprise value and maximize its profits, etc.); - Matters concerning rights and obligations of the Offerors ((a) the rights and obligations of the Offerors when the Target Group requires financing (for example, while the Offerors have no obligations to provide financing to the Target Group, if the Target issues shares, the Offerors shall have a preemptive right to subscribe to those shares in accordance with its respective ratio of voting rights held in the Target as at the time of issuance of those shares), (b) obligations to report when material events concerning the Target Group occur, and (c) matters concerning the Target's dividend policy); and
- Matters concerning shares, etc. of the Target (in principle, to prohibit the transfer of the Target's Shares owned by the Offerors for a certain period, and preemptive purchase right and tag along right after lapse of a certain period, etc.).
-
Joint Tender Offer Agreement
As indicated above in "(1) Outline of the Tender Offer," the Offerors executed the Joint Tender Offer Agreement that includes the following contents as of the date of this Press Release.
- The Offerors shall consummate the Tender Offer jointly;
- The commencement of the Tender Offer shall be conditional upon satisfaction of all of the following preconditions:
- The Special Committee established by the Target issued a written report in favor of the Target (i) supporting the Tender Offer, (ii) recommending the shareholders of the Target to tender in the Tender Offer, and (iii) implementing the Share Consolidation, and this report has not been withdrawn;
- The Target's board of directors, excluding directors who have, or may have, interest in the Offerors, reached an unanimous resolution to support the Tender Offer and to recommend the Target's shareholders to tender in the Tender Offer, and this resolution was publicly announced and no resolution has been made to withdraw this opinion or which conflicts with this opinion;
- It has been confirmed that there have been no material facts concerning the Target's business (those facts stipulated in Article 166, Paragraph 2 of the Act) that have not been publicly disclosed (as defined in Article 166, Paragraph 4 of the Act) by the Target;
- The Offerors have agreed between themselves on the contents of the disclosure documents to be filed or announced jointly by the Offerors by the date of public notice concerning commencement of the Tender Offer;
-
Necessary procedures were performed, necessary arrangements were made, and waiting periods (if any) have lapsed (including to receive notice that no cease and desist order will be issued) pursuant to the antitrust laws of
Japan ,Europe ,China ,Taiwan , andTurkey with respect to the Transaction, and it is reasonably projected that no measures or procedures will be assumed that would prevent the implementation of the Transaction by the antitrust authorities and other judicial or administrative agencies concerning antitrust laws of those countries or regions; - There are no filings, litigation or procedures pending at judicial or administrative agencies that seek to restrict or prohibit any of the Transaction, and there is no judgment, or a concrete possibility of a judgment, by any judicial or administrative agency that restricts or prohibits any of the Transaction;
- Written confirmations were received from the counterparties to the agreements executed by each company in the Target Group that are materially important for business stating that those counterparties will not exercise their rights upon execution and performance of the Joint Tender Offer Agreement, and these confirmations have not been rescinded (Note 1);
- The Shareholders Agreement is executed between the Offerors and has been effective;
- The representations and warranties (Note 2) made by the Offerors pursuant to the Joint Tender Offer Agreement are true and accurate in all material respects;
-
All obligations that must be performed or complied with by the Offerors by
3 PM on the business day immediately preceding the date of public notice of commencement of the Tender Offer pursuant to the Joint Tender Offer Agreement have been performed and complied with in all material respects; and - There has not been any material change in the business or property of the Target or any of its subsidiaries, nor has there been any other circumstance that would materially impede the achievement of the purpose of the tender offer as provided in the proviso to Article 27-11, Paragraph 1 of the Act.
- On condition that the Tender Offer is established and the settlement is completed, promptly as practically possible after the settlement is completed, procedures shall be assumed to cause Mitsui Chemicals and Mitsui & Co.'s percentage of voting rights held in the Target to become 51% and 49%, respectively.
-
During the period from the date of execution of the Joint Tender Offer Agreement until completion of the Transaction, the Offerors shall exercise care as prudent managers to cause the Target Group to, in principle, engage in its ordinary business that it conducted prior to execution of the Joint Tender Offer Agreement.
(Note 1) The "counterparties to the agreements that are materially important for business" will be determined by the Offerors based on the results of due diligence that were conducted or which may be further conducted in the future by the Offerors towards the Target.
(Note 2) The Offerors made the following representations and warranties with respect to themselves in the Joint Tender Offer Agreement: (a) that they are duly and effectively established and are existing and have necessary power and authority to conduct their business; (b) that the Shareholders Agreement and Joint Tender Offer Agreement have been duly executed and procedures required thereunder have been performed; (c) that they are in compliance with laws and regulations; (d) that there are no possibilities for compulsory execution; (e) that they acquired all necessary licenses and permits; (f) that they have legitimate and effective ownership in the Target's Shares without any encumbrances; and (g) that they have no transactions with anti-social forces.
2. Summary of tender offer
(1) Summary of the Target
(i) |
Name |
Honshu Chemical Industry Co., Ltd. |
|
(ii) |
Location |
3-9, Nihombashi 3-chome, Chuo-ku, |
|
(iii) |
Name and title of representative |
President and CEO, |
|
(iv) |
Description of business |
Manufacture and sale of materials for high-performance resins, such as liquid crystal polymers, specialty polycarbonate resins and specialty epoxy resins, as well as various chemicals that serve as materials for electronic chemicals, pharmaceuticals and agricultural chemicals |
|
(v) |
Amount of share capital |
|
|
(vi) |
Date of incorporation |
(Note) Originating from its predecessor, Yuraseiko & Company, Honshu Chemical Industry Co., Ltd. (the "Former Company") merged with Honshu Chemical Industry Co., Ltd. (the "New Company") in |
|
(vii) |
Major shareholders and shareholding ratio
(as of (Note) |
Mitsui & Co., Ltd.
|
26.99% |
Mitsui Chemicals, Inc. |
26.99% |
||
BBH FOR FIDELITY LOW-PRICED STOCK FUND (PRINCIPAL ALL SECTOR SUBPORTFOLIO)
|
6.53% |
||
|
2.87% |
||
BNY GCM CLIENT ACCOUNT JPRD AC ISG (FE-AC)
|
2.77% |
||
Japan Trustee Services Bank, Ltd. (Trust Account) |
2.43% |
||
The Master Trust Bank of Japan, Ltd. (Trust account) |
2.20% |
||
STATE STREET BANK AND TRUST COMPANY 505224
|
1.74% |
||
Gakko-hojin Tanaka Ikuei-kai (incorporated educational institution) |
1.22% |
||
BBH FOR FIDELITY GROUP TRUSTBENEFIT (PRINCIPAL ALL SECTOR SUBPORTFORIO)
|
1.09% |
||
(viii) |
Relationships between the Offerors and the Target |
||
|
Capital relationship |
As of the date of this Press Release, the Offerors each own 3,098,000 shares of the Target's Shares (Shareholding Ratio: 26.99%). |
|
|
Personal relationship |
One among four auditors of the Target concurrently serves as an employee of Mitsui Chemicals. Mitsui Chemicals also dispatches four employees to the Target and Mitsui & Co. dispatches two employees to the Target. |
|
|
Business relationship |
The Target purchases raw materials from Mitsui Chemicals and sells products manufactured by consignment to the same. The Target purchases raw materials from Mitsui & Co. and sells products to the same. |
|
|
Status as related party |
The Target is an equity method affiliate of each of the Offerors, and constitutes a related party of the Offerors. |
|
(Note) "Major shareholders and shareholding ratio (as of
(2) Schedule
The Offerors plan to promptly implement the Tender Offer upon the satisfaction of (or waiver by the Offerors of) the Conditions. As of the date of this Press Release, the Offerors' target is to commence the Tender Offer in or around
(3) Price of tender offer
(4) Basis of calculation of the price of tender offer
(I) Basis of calculation
Mitsui Chemicals retained SMBC Nikko Securities, Mitsui Chemicals' financial advisor, to serve as the third-party valuator independent from the Offerors and the Target to calculate the stock value of the Target's Shares in order to determine the Tender Offer Price.
SMBC Nikko Securities considered several methods to apply in calculating the share value of the Target Shares from among multiple share value calculation methods. SMBC Nikko Securities decided to apply: (i) the average market price method given that the Target's Shares are listed on the Second Section of the TSE and thus the market price thereof is available; and (ii) the DCF Method to reflect the future business activities of the Target in valuation. Mitsui Chemicals procured the Share Valuation Report (SMBC Nikko Securities) from SMBC Nikko Securities on
According to the Share Valuation Report (SMBC Nikko Securities), the range of share value per share of the Target's Shares calculated through each of the above methods is as follows:
Average market price method: from
DCF Method: from
Pursuant to the average market price method, as of the reference date of calculation on
Pursuant to the DCF Method, the share value range per share of the Target's Shares was calculated to be
Mitsui & Co. retained Nomura Securities, Mitsui & Co.'s financial advisor, to serve as the third-party valuator independent from the Offerors and the Target to calculate the stock value of the Target's Shares in order to determine the Tender Offer Price.
Nomura Securities considered several methods to apply in calculating the share value of the Target's Shares from among multiple share value calculation methods. Nomura Securities decided to apply: (i) the average market price method given that the Target's Shares are listed on the Second Section of the TSE; and (ii) the DCF Method to reflect the future business activities of the Target in valuation. Mitsui & Co. procured the Share Valuation Report (Nomura Securities) from Nomura Securities on
According to the Share Valuation Report (Nomura Securities), the range of share value per share of the Target's Shares calculated through each of the above methods is as follows:
Average market price method: from
DCF Method: from
Pursuant to the average market price method, as of the reference date of calculation on
Pursuant to the DCF Method, the share value range per share of the Target's Shares was calculated to be
The Offerors comprehensively considered the results of valuation indicated in the Share Valuation Report (SMBC Nikko Securities) and the Share Valuation Report (Nomura Securities) respectively procured from SMBC Nikko Securities and Nomura Securities on
The Tender Offer Price of
-
Process of calculation
(Background of decision to consummate the Tender Offer Price)
As indicated in "(2) Background and purposes of the Tender Offer and decision-making process leading to the consummation of the Tender Offer and management policy after the Tender Offer" under "1. Purposes of the Purchase," formal discussions and negotiations were conducted several times with the Target concerning the management system and business policies and terms for the Transaction since early
- Names of third parties from whom opinion was heard in the process of calculation
Mitsui Chemicals referred to the Share Valuation Report (SMBC Nikko Securities) that was submitted from SMBC Nikko Securities, a third-party valuator independent from the Offerors and the Target in determining the Tender Offer Price. Mitsui Chemicals has not obtained an opinion concerning fairness of the Tender Offer Price (fairness opinion) from SMBC Nikko Securities.
Mitsui & Co. referred to the Share Valuation Report (Nomura Securities) that was submitted from Nomura Securities, a third-party valuator independent from the Offerors and the Target in determining the Tender Offer Price. Mitsui & Co. has not obtained an opinion concerning fairness of the Tender Offer Price (fairness opinion) from Nomura Securities.
- Summary of those opinions
SMBC Nikko Securities calculated the share value of the Target's Shares by applying each of the average market price method and the DCF Method and the range of share value per share of the Target's Shares calculated through each method is as follows:
Average market price method: from
DCF Method: from
Nomura Securities calculated the share value of the Target's Shares by applying each of the average market price method and the DCF Method and the range of share value per share of the Target's Shares calculated through each method is as follows.
Average market price method: from
DCF Method: from
- Circumstances leading to the decision of the purchase price based on those opinions
As indicated above in "(I) Basis of calculation," in addition to the results of calculation set forth in the Share Valuation Report (SMBC Nikko Securities) and the Share Valuation Report (Nomura Securities) that the Offerors respectively procured from SMBC Nikko Securities and Nomura Securities on
(III) Relationship with valuation agencies
SMBC Nikko Securities as a financial advisor and third-party valuator for Mitsui Chemicals is not a related party of the Offerors or of the Target, and does not have any material interest in the Transaction, including the Tender Offer.
Nomura Securities as a financial advisor and third-party valuator for Mitsui & Co. is not a related party of the Offerors or of the Target, and does not have any material interest in the Transaction, including the Tender Offer.
(5) Number of shares to be purchased
Number of tendered shares to
|
Minimum number of tendered
|
Maximum number of shares
|
5,280,846 shares |
1,455,200 shares |
- |
(Note 1) If the total number of the Tendered Shares is less than the minimum number of tendered shares to be purchased in the Tender Offer (1,455,200 shares), the Offerors will purchase none of the Tendered Shares. If the total number of the Tendered Shares is no less than the minimum number of tendered shares to be purchased in the Tender Offer, the Offerors will purchase all of the Tendered Shares.
(Note 2) The number of tendered shares to be purchased is the maximum number of the Target's Shares (5,280,846 shares) that the Offerors will acquire by the Tender Offer. This maximum number is obtained by deducting the number of treasury shares owned by the Target as of
(Note 3) Shares less than one unit are also subject to the Tender Offer. If a shareholder exercises the right to claim for purchase of shares less than one unit pursuant to the Companies Act, the Target may purchase its shares during the Tender Offer Period in accordance with statutory procedures.
(Note 4) The treasury shares owned by the Target are not scheduled to be acquired through the Tender Offer.
(Note 5) The method to determine the number of Tendered Shares to be purchased respectively by Mitsui Chemicals and Mitsui & Co. if the Tender Offer is established is undecided as of the date of this Press Release. This method shall be decided by the time the Tender Offer commences through consultation between the Offerors.
(6) Change in shareholding ratio after the Tender Offer
Number of voting rights pertaining to the shares held by the Offerors before the Tender Offer |
61,960 |
(Shareholding Ratio before the Tender Offer 53.99%) |
Number of voting rights pertaining to the shares held by special related parties before the Tender Offer |
To be decided |
(Shareholding Ratio before the Tender OfferTo be decided) |
Number of voting rights pertaining to the shares held by the Offerors after the Tender Offer |
114,768 |
(Shareholding Ratio after the Tender Offer100.00%) |
Number of voting rights pertaining to the shares, etc. held by special related parties after the Tender Offer |
0 |
(Shareholding Ratio after the Tender Offer0.00%) |
Total number of voting rights of all shareholders of the Target |
114,674 |
|
(Note 1) "Number of voting rights pertaining to the shares held by special related parties before the Tender Offer" and their "Shareholding Ratio before the Tender Offer" are undecided as of the date of this Press Release. This will be investigated and disclosed before commencement of the Tender Offer. As the shares held by each special related party (excluding the Target's Shares held by the Offerors that mutually constitute a special related party of the other and the treasury shares held by the Target) are also subject to the Tender Offer, the "Number of voting rights pertaining to the shares, etc. held by special related parties after the Tender Offer" is indicated as 0.
(Note 2) "Total number of voting rights of all shareholders of the Target" is the number of the voting rights of all shareholders as of
(Note 3) "Shareholding Ratio before the Tender Offer" and "Shareholding Ratio after the Tender Offer" are indicated by rounding to the second decimal place.
(7) Aggregate tender offer price (estimate)
(Note) The aggregate tender offer price indicated is the amount obtained by multiplying the number of shares scheduled to be purchased in the Tender Offer (5,280,846 shares) by the Tender Offer Price (
(8) Other conditions and method of the Tender Offer
(I) The conditions and their contents in each item of Article 27-13, Paragraph 4 of the Act, if any
If the total number of the Tendered Shares is less than the minimum number of tendered shares to be purchased in the Tender Offer (1,455,200 shares), the Offerors will purchase none of the Tendered Shares. If the total number of the Tendered Shares is no less than the minimum number of tendered shares to be purchased in the Tender Offer, the Offerors will purchase all of the Tendered Shares.
(II) Other conditions and method of the Tender Offer
Method of settlement, date of public notice on commencement of the Tender Offer, and other conditions and method of the Tender Offer shall be announced as soon as the details are fixed. SMBC Nikko Securities is scheduled to be appointed as the tender offer agent.
(III) Others
The Tender Offer is not, and will not be, made, directly or indirectly, in or to the U.S., or by using the U.S. Postal Service or any other means or instruments of interstate or foreign commerce (including, but not limited to telephone, telex, facsimile, e-mail, and internet communication), or through any facilities of a securities exchange in the U.S. No one may tender shares in the Tender Offer by any means or instruments above, or through any facility above, or from the U.S.
In addition, the tender offer registration statement or other related documents are not, and may not be, sent or delivered by the postal service or any other means in, to, or from the U.S. Any tender of shares in the Tender Offer that directly or indirectly breaches any of the restrictions above will not be accepted.
Each person who tenders shares in the Tender Offer (or the standing proxy in the case of non-resident shareholders) is required to represent and warrant the following: (i) the person is not located in the U.S. at the time of tendering shares or sending the tender offer acceptance form; (ii) the person did not receive or send any information regarding the Tender Offer or any document regarding the purchase within, to or from the U.S.; (iii) the person did not use, directly or indirectly, the U.S. Postal Service or any other means or instruments of interstate or foreign commerce (including but not limited to telephone, telex, facsimile, e-mail and internet communication) or facilities of a securities exchange in the U.S. with respect to the purchase or to signing or delivering the tender offer acceptance form; and (iv) the person is not acting as an attorney, a trustee or a mandatary without discretion for any other person (except for the case where the latter provides all instructions for the purchase outside the U.S.).
3. Policies after the Tender Offer and perspectives
For our policies after the Tender Offer, see "(2) Background and purposes of the Tender Offer and decision-making process leading to the consummation of the Tender Offer and management policy after the Tender Offer," "(4) Policies on the organizational restructuring, etc. after the Tender Offer (matters concerning "two-step acquisition")" and "(5) Possibility of delisting and reason therefor" under "1. Purposes of the Purchase" above.
4. Others
(1) Agreements between the Offerors and the Target or its directors and officers, and the details thereof
According to the Target's Press Release, it was resolved at the Target's board of directors' meeting held on the date of the Press Release that if the Tender Offer is commenced, the Target will express its opinion in favor of the Tender Offer and the Target will recommend the shareholders of the Target to tender in the Tender Offer. For the details of the process of decision-making by the board of directors of the Target, see "(V) Unanimous approval of all disinterested directors of the Target and the opinion of all auditors that they have no objection" under "(3) Measures to ensure the fairness of the Tender Offer, such as measures to ensure the fairness of the Tender Offer Price and measures to avoid conflicts of interest" under "1. Purposes of the Purchase" above.
(2) Other information considered to be necessary for investors to determine whether to tender their shares in the Tender Offer
(I) Publication of "Consolidated Financial Results for the Six Months Ended
The Target announced its "Consolidated Financial Results for the Six Months Ended
(i) Consolidated profit and loss
Six month results |
For the Six Months ended |
Net sales |
|
Cost of sales |
|
Selling, general and administrative expenses |
|
Non-operating income |
|
Non-operating expenses |
|
Net income attributable to owners of parent |
|
(ii) Consolidated per share information
Six month results |
For the Six Months ended |
Net income per share |
|
Dividends per share |
|
(II) Publication of "Notice concerning revision of dividend forecast (no dividends to be paid) for the year ending
The Target revised its dividend forecast for the year ending
END
Soliciting Regulations
Solicitation to purchase securities or other equivalents is not conducted to residents in the U.S. or within the U.S., and those sent to the Offerors by residents in the U.S. or from the U.S. will not be accepted.
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20201111005338/en/
Source: Mitsui & Co Ltd
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