Belgium's Tessenderlo & Picanol clarify group structure before merger

In the framework of the proposed transaction, the reference shareholders Luc Tack and Patrick Steverlynck will contribute directly or indirectly the Picanol Group shares they hold as a result of a voluntary public exchange offer in accordance with the Law of April 1, 2007 on public takeover bids (the ‘Law on Takeover Bids’) and the Royal Decree of April 27, 2007 on public takeover bids (the ‘Royal Decree on Takeover Bids’) made by Tessenderlo Group for the Picanol Group shares (the ‘Exchange Offer’), according to a joint press release by Picanol Group and Tessenderlo Group.

The remaining Picanol Group shareholders (10.66 per cent) would also be offered the possibility to become direct shareholders of Tessenderlo Group at the same exchange ratio, whereby 1 Picanol Group share could be exchanged for 2.43 Tessenderlo Group shares. On August 25, 2022, Picanol Group and Tessenderlo Group published the consolidated results HY22, as well as a revision of the outlook for FY22. The bidder (Tessenderlo Group) has revised the valuations of Picanol Group and Tessenderlo Group in light of the published half year reports and a review of the long-term outlook based on the latest market developments.

Compared to the values of €830.8 million and €1,655.9 million for Picanol Group and Tessenderlo Group respectively, the revision results in a decrease in value of €0.2 million for Picanol Group (excluding shares held in Tessenderlo Group) and an increase of €95.6 million for Tessenderlo Group. This results in a value of €830.6 million and €1,751.5 million for Picanol Group and Tessenderlo Group respectively. These adjusted valuations correspond to a value per Tessenderlo Group share of €40.59 and a value per Picanol Group share (including Tessenderlo Group shares) of €95.80.

Based on this information, Tessenderlo Group and Picanol Group have consulted and agreed to adjust the exchange ratio from 2.43 Tessenderlo Group shares for 1 Picanol Group share to 2.36 Tessenderlo Group shares for 1 Picanol Group share. Picanol Group, Verbrugge nv (‘Verbrugge’), Tessenderlo Group, Artela nv (‘Artela’), Luc Tack, Manuco International nv (‘Manuco International’) and Symphony Mills nv (‘Symphony Mill’) (together the ‘parties’) have agreed their respective rights and obligations in respect of, and the terms and conditions of, the Exchange Offer by signing an integration protocol (the ‘Integration Protocol’) on July 7, 2022.

The approval of the Integration Protocol by Picanol Group was subject to the procedure set out in Article 7:97 of the Belgian Companies and Associations Code (‘BCAC’). In order to adjust the exchange rate to 2.36 Tessenderlo Group shares for 1 Picanol Group share, as described above, the parties and Oostiep Group BV (‘Oostiep Group,’ a company controlled by Luc Tack through which he will indirectly hold his shares in Tessenderlo Group and Picanol Group) entered into an addendum to the Integration Protocol on September 6, 2022.

Luc Tack controls Artela and Symphony Mills, which currently hold respectively 64.86 per cent and 24.48 per cent of the shares in Picanol Group, and is also CEO of Picanol Group. Luc Tack thus exercises control over Picanol Group through the abovementioned companies and his position as CEO. In addition, Luc Tack is the sole shareholder and director of Oostiep Group, which would acquire a majority stake in Picanol Group in the framework of the Pre-Closing Simplification and the Capital Increase.

Manuco International currently holds, via Artela, a significant shareholding in Picanol Group, and would become a direct shareholder of Picanol Group in the framework of the Pre-Closing Simplification. Tessenderlo Group and Verbrugge are part of Picanol Group. Each of the above companies and Luc Tack are parties to the Integration Protocol and the Addendum and on the basis of the foregoing (potentially) qualify as related parties within the meaning of the international accounting standards adopted in accordance with Regulation (EC) 1606/2002 (‘IFRS’).

The Capital Increase to be proposed and the accession to the Addendum by Picanol Group (together the ‘Decisions’) may not fall under any of the exceptions of Article 7:97 BCAC. For this reason, the conflict-of-interest procedure of article 7:97 BCAC was applied, to the extent applicable, to the Decisions. To this end, the board of directors of Picanol Group established an ad hoc committee consisting of three independent members of the board of directors of Picanol Group (the ‘Committee’) and requested it to provide an opinion in application of article 7:97 BCAC. The Committee assessed the Decisions and issued its opinion thereon on September 6, 2022, to the board of directors of Picanol Group in accordance with article 7:97, §3 BCAC, to the extent applicable, added the release.

The board of directors of Picanol Group then, on September 6, 2022, decided to approve the Decisions and presented these Decisions to the statutory auditor of Picanol Group in accordance with article 7:97, §3 BCAC.

ALCHEMPro News Desk (NB)