09 December 2019

ams announces acceptance threshold for ams’ takeover offer for OSRAM is satisfied

Press release

- ams has today exceeded the minimum acceptance threshold of 55 % 

- Additional acceptance period to run from 11 until 24 December, 24.00 CET 

- ams looks forward to working closely with the OSRAM management team and all OSRAM and ams stakeholders to realize shared goal of a global leader in sensor solutions and photonics 

- ams intends to invite its shareholders to an EGM to be held in January 2020 to authorize the proposed equity capital raising 

Premstaetten, Austria (6 December 2019) -- ams (SIX: AMS), a leading worldwide supplier of high performance sensor solutions, is pleased to announce that today the acceptance threshold of 55% for its all-cash takeover offer for OSRAM Licht AG ("OSRAM") (the "Offer") announced on 7 November 2019 has been satisfied. The period in which acceptances can continue to be booked into the Offer continues until Monday, 9 December 2019 and the final results of the Offer will be published on Tuesday, 10 December 2019.

"We are pleased to announce that we have been successful in achieving the minimum acceptance threshold in our Offer for OSRAM," says Alexander Everke, CEO of ams. "We would like to thank OSRAM shareholders for placing their trust in us and understanding the compelling strategic and industrial logic of the transaction. We look forward to creating a European based global leader in sensor solutions and photonics through the combination of ams and OSRAM. Based on this shared objective, we will work closely with the OSRAM management team and all OSRAM and ams stakeholders to make the combination a resounding success and create a strong path forward for OSRAM and ams. OSRAM shareholders who have not yet tendered their shares can still do so during the additional acceptance period, ending on 24 December 2019."

„Following ams’ successful takeover bid for OSRAM, we can now jointly establish a world class photonics and sensor champion,” said Olaf Berlien, CEO of OSRAM Licht AG.

Further steps to implement the transaction are expected to commence in the very near future and ams continues to expect the closing of the transaction in the first half of 2020. ams intends to invite its shareholders to an Extraordinary General Meeting ("EGM") to be held in January 2020, to resolve on the proposed equity capital raising in conjunction with the Offer. Subject to such resolution, ams currently expects to execute the equity capital raising in a timely manner. Further details on the transaction will be communicated in due course. 

08 October 2019

Uniper: “Will analyze the matter taking into consideration the interests of the company”

Press release of Uniper SE of 8 October 2019

Uniper's major shareholder Fortum announced today that it has entered into agreements with shareholders Elliott and Knight Vinke to acquire in excess of 20.5 percent of the shares in Uniper. Upon closing of the transaction, Fortum's stake in Uniper would increase to more than 70.5 percent. The closing of the transaction is subject to the approvals of the regulatory authorities in Russia and the US, which Fortum expects to receive by the end of the first quarter of 2020.

A Uniper spokesman explains: “Our major shareholder Fortum has announced its plan for Uniper. Conversations with the management of Fortum have been going on and we expect these to continue. Our business is solid, and our focus has always been to find solutions that offer the best perspectives for the Uniper employees, our business and customers, our shareholders and partners.”

Once new results are available, Uniper will report accordingly.

About Uniper

Uniper is a leading international energy company with activities in more than 40 countries and around 11,000 employees globally. Its business is the secure provision of energy and related services. Its main activities include power generation in Europe and Russia as well as global energy trading. The company is headquartered in Düsseldorf, Germany.

04 October 2019

ams offer for OSRAM did not achieve minimum acceptance threshold; ams remains committed to pursue the acquisition of OSRAM

Press release of 4 October 2019

- Minimum acceptance threshold of 62.5% not achieved 

- ams largest shareholder in OSRAM with a direct shareholding of 19.99% 

- ams committed to continue pursuing the acquisition of OSRAM to create a global leader in sensor solutions and photonics 

Premstaetten, Austria (4 October 2019) -- ams (SIX: AMS), a leading worldwide supplier of high performance sensor solutions, announces that the minimum acceptance threshold of 62.5% required in conjunction with the all-cash takeover offer for OSRAM Licht AG ("OSRAM") announced on 3 September 2019 ("ams Offer") was not achieved. The final acceptances level was 51.6%.

As a result of purchases prior to the expiry of the ams Offer, ams is currently the largest shareholder in OSRAM with a direct shareholding of 19.99%. ams will not exceed this current direct shareholding of 19.99% before having obtained required merger control and other regulatory clearances.

ams continues to view the combination of ams and OSRAM as strategically compelling given that it would enable the creation of a global leader in sensor solutions and photonics. To this effect and supported by ams shareholders, ams continues to explore strategic options to pursue the acquisition of OSRAM, on the basis of its shareholding position, as this will translate into a stronger combined company.

“While the highly attractive ams Offer for OSRAM at a full valuation was not successful, the strategic logic and the significant advantages of combining ams and OSRAM are unchanged,” said Alexander Everke, CEO of ams. “Our vision with OSRAM is to create a global leader in sensor solutions and photonics built around European technology, which will ensure that Europe remains at the forefront of optical technology globally. We intend to leverage our position as OSRAM's largest shareholder in a dialog with OSRAM as we continue to pursue the full acquisition of the company, securing a solid future for OSRAM.”

ams AG buys further 4.74 % of the share capital of OSRAM

Opal BidCo GmbH
Frankfurt am Main, Germany 

Announcement pursuant to section 23 para. 2 of the German Securities Acquisition and Takeover Act (Wertpapiererwerbs- und Übernahmegesetz – “WpÜG”) 

On 3 September 2019, Opal BidCo GmbH, Frankfurt am Main, Germany, (the “Bidder”) has published the offer document for its voluntary public takeover offer (cash offer) to the shareholders of OSRAM Licht AG, Munich, Germany, to acquire their no-par value registered shares (ordinary shares) in OSRAM Licht AG (ISIN DE000LED4000) (the “OSRAM Shares”) against payment of a cash consideration of initially EUR 38.50 per OSRAM Share (the “Takeover Offer”). On 27 September 2019, ams AG, a person acting jointly with the Bidder within the meaning of section 2 para. 5 WpÜG, entered into an agreement on the purchase of 100 OSRAM Shares outside of the Takeover Offer at a purchase price of EUR 41.00 per OSRAM Share (the “Parallel Purchase”). As a result of this Parallel Purchase, the offer consideration under the Takeover Offer has increased from EUR 38.50 to EUR 41.00 per OSRAM Share pursuant to section 31 para. 4 WpÜG. The acceptance period of the Takeover Offer expired on 1 October 2019, 24:00 hours (local time Frankfurt am Main, Germany).

On 1 October 2019, ams AG, a person acting jointly with the Bidder within the meaning of section 2 para. 5 WpÜG, entered into agreements on the purchase of 4,589,824 OSRAM Shares outside of the Takeover Offer. This corresponds to approx. 4.74 % of the share capital and the voting rights in OSRAM Licht AG. The purchase agreements will be settled on 4 October 2019.

The average purchase price amounted to EUR 40.93 per OSRAM Share, the maximum purchase price amounted to EUR 41.00 per each OSRAM Share.

Frankfurt am Main, 2 October 2019

Opal BidCo GmbH
The Managing Director

28 September 2019

ams is the largest shareholder in OSRAM with a direct shareholding of 14.69 %

Premstaetten, Austria (27 September 2019) -- ams (SIX: AMS), a leading worldwide supplier of high performance sensor solutions, announces that following today’s increase in the price of its all-cash takeover offer for 100% of the share capital of OSRAM Licht AG ("OSRAM") to EUR 41.00 per OSRAM share (the "Best and Final Offer") ams now holds 14.69% of all OSRAM shares as a direct shareholding including shares unconditionally bought today but not counting the shares already tendered into the Best and Final Offer. This makes ams the largest shareholder in OSRAM based on the latest information available.

As the Best and Final Offer will expire on 1 October 2019, 24:00 CEST, ams continues to urge all remaining OSRAM shareholders to tender their shares prior to 1 October 2019 to ensure they capitalise on this superior offer. 

ams presents best and final takeover offer for OSRAM at EUR 41.00 per share expiring on 1 October

Press release

- Increased price reflects a premium of 42% to undisturbed OSRAM share price (EUR 28.92) and an increase of EUR 2.50 per share to the previous offer of EUR 38.50 

- Significantly better, secure and immediately actionable transaction for OSRAM shareholders compared to speculating on an uncertain Indicative Third Party Offer 

- EUR 4.4bn committed bridge facility and EUR 1.6 bn underwritten equity issuance, resulting in pro-forma Dec-2019 net debt/EBITDA ratio of 4.5x or 3.4x adjusted for runrate synergies 

- Takeover offer comes with holistic protective covenants for OSRAM employees and German manufacturing sites, in excess of commitments indicated by Indicative Third Party Offer 

- All other terms and conditions of the takeover offer remain unchanged compared to the offer document published on 3 September 2019, including 62.5% acceptance threshold 

- ams urges all OSRAM shareholders to tender their shares prior to 1 October 2019 

Premstaetten, Austria (27 September 2019) -- ams (SIX: AMS), a leading worldwide supplier of high performance sensor solutions, acknowledges the announcement by OSRAM Licht AG ("OSRAM") dated 25 September 2019 with respect to the indicative offer from Advent and Bain Capital (the "Indicative Third Party Offer"). ams notes that the Indicative Third Party Offer remains uncertain as it is subject to, amongst other things, confirmatory due diligence over the coming weeks, conclusion on a new committed financing structure and final investment committee approval.

In consideration of the Indicative Third Party Offer, ams is pleased to announce that it has increased the price of its all-cash takeover offer for 100% of the share capital of OSRAM to EUR 41.00 per OSRAM share (the "Best and Final Offer"). All other terms and conditions of the Best and Final Offer remain unchanged compared to the offer document published by ams on 3 September 2019 as amended by the offer amendment of 16 September 2019 given that the price increase results from a purchase of an OSRAM share at EUR 41.00. The offer continues to expire on 1 October 2019, 24:00 CEST.

"We enable OSRAM shareholders to benefit from our Best and Final Offer at significantly improved terms and we seek to put an end to any speculation about an uncertain Indicative Third Party Offer," said Alexander Everke, CEO of ams. "The Best and Final Offer is immediately actionable and is highly attractive for all of OSRAM's stakeholders whilst consistent with the M&A criteria of ams. Our strategic vision is to create a global technology leader in sensor solutions and photonics. We have provided comprehensive commitments aimed at safeguarding employees and production facilities of OSRAM in Germany and have carefully planned the successful integration of both companies. We offer a superior proposal to all stakeholders, including the OSRAM employees, given our strategic vision, higher growth, better cash flows and lower cost of capital, which compared to the Indicative Third Party Offer translates into a stronger company."

ams has entered into a Cooperation Agreement with the Management and Supervisory Board of OSRAM which includes binding, comprehensive commitments aimed at safeguarding OSRAM employees and manufacturing sites in Germany. ams will

- Continue to operate OSRAM’s existing German production sites – Regensburg, Berlin, Schwabmünchen, Herbrechtingen, Traunreut, Eichstätt – for a minimum period of 3 years (Standortsicherung)

- Create jobs in manufacturing and engineering in Germany given the strategic nature of the Best and Final Offer

- Designate Munich to serve as a co-headquarter of the combined group with a meaningful presence for global corporate functions

- Continue existing shop agreements (Betriebsvereinbarungen), collective bargaining agreements (Tarifverträge) and similar agreements in Germany, including the “Eckpunktepapier Zukunftskonzept Deutschland” entered into with IG Metall and OSRAM’s workforce representatives in July 2017

- Ensure existing pension plans will remain unchanged

In addition, ams’ concept for the successful integration of both companies encompasses the OSRAM stakeholders, including unions and employee representatives. Taken together, these commitments go beyond the indications of the Indicative Third Party Offer.

The financing of the Best and Final Offer has been secured through a EUR 4.4 billion bridge facility fully underwritten by HSBC, UBS and BAML which will be refinanced through a combination of equity and debt issuances. ams intends to raise EUR 1.6 billion (issue currency CHF) of new equity, which is fully underwritten by HSBC and UBS, primarily in the form of a rights issue and other equity-linked instruments. Pro-forma for the equity issuance, ams expects that the Transaction will result in a pro-forma Dec-2019 leverage of approximately 4.5x net debt/EBITDA or approximately 3.4x net debt/EBITDA adjusted for run-rate cost and revenue synergies. ams expects to quickly achieve significantly lower leverage levels based on the expected strong cash flows profile of the combined group.

The Best and Final Offer will expire on 1 October 2019, 24:00 CEST.

24 September 2019

E.ON Verwaltungs SE raises cash compensation for tendered innogy shares to EUR 37.59

E.ON Verwaltungs SE Düsseldorf 

Announcement according to section 23 paragraph 2 German Securities Acquisition and Takeover Act (Wertpapiererwerbs- und Übernahmegesetz – “WpÜG”) 

On 27 April 2018, E.ON Verwaltungs SE, Düsseldorf (“Bidder“), has published the offer document for its voluntary public takeover offer (“Takeover Offer“) to the shareholders of innogy SE, Essen, Germany, to acquire their no-par-value bearer shares in innogy SE (ISIN DE000A2AADD2) (“innogy Shares“) for a cash consideration of EUR 36.76 per innogy Share. In accordance with Section 4.1 of the offer document, the offer consideration was increased to EUR 37.00 per innogy Share. The additional acceptance period of the Takeover Offer pursuant to section 16 paragraph 2 sentence 1 WpÜG ended on 25 July 2018, 24.00 hrs (local time in Frankfurt am Main, Germany); the Takeover Offer can therefore no longer be accepted.

Pursuant to Section 4.2 (ii) of the offer document, the Bidder undertakes in the event that the Bidder, persons acting jointly with the Bidder or their subsidiaries acquire innogy Shares outside the stock exchange until 31 December 2019 and the value of the consideration granted or agreed for those innogy Shares exceeds the offer consideration, to pay a cash consideration to the innogy shareholders who have accepted the Takeover Offer in the amount equal to the difference in accordance to the statutory provisions of section 31 paragraph 5 WpÜG.

On 18 September 2019, E.ON SE, a person acting jointly with the Bidder, acquired 426,624,685 innogy Shares outside the stock exchange as part of a single purchase transaction for a consideration in the amount of rounded up EUR 37.59 per innogy Share. This corresponds to approximately 76.79% of the share capital and voting rights of innogy SE.

The consideration per innogy Share granted in connection with the aforementioned purchase transaction exceeds the offer consideration by EUR 0.59. Therefore, pursuant to Section 4.2 (ii) of the offer document in conjunction with section 31 paragraph 5 WpÜG, the Bidder is obliged to pay the innogy shareholders who have accepted the Takeover Offer a cash payment in the amount of EUR 0.59 per innogy Share for which the Takeover Offer has been accepted. This cash payment will be credited – together with the aforementioned offer consideration – in the course of the settlement of the Takeover Offer, which is expected to take place on 26 September 2019.

Important Information: 

This announcement is neither an offer to purchase nor a solicitation of an offer to sell shares of innogy SE. The final terms and further provisions regarding the public takeover offer by E.ON Verwaltungs SE to the shareholders of innogy SE are set forth in the offer document whose publication has been approved by the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht) on 26 April 2018. Investors and shareholders of innogy SE are strongly recommended to read the offer document and all other announcements and documents published in connection with the Takeover Offer because they contain important information.

Essen, 19 September 2019 

E.ON Verwaltungs SE

(convenience translation)

ams expects to hold EGM to approve EUR 1.5 billion equity issuance around end of October; lowers acceptance threshold of offer for OSRAM to 62.5% to capitalise on momentum

Press release of ams

- ams convinced of the successful acquisition of OSRAM, reinforced by broad positive feedback received during global investor roadshow 

- ams expects to hold Extraordinary General Meeting around end of October 2019 to approve EUR 1.5 billion equity issuance for partial refinancing of EUR 4.2 billion acquisition bridge facility 

- ams to lower minimum acceptance threshold of the offer for OSRAM to 62.5% to achieve success sooner 

Premstaetten, Austria (16 September 2019) -- ams (SIX: AMS), a leading worldwide supplier of high performance sensor solutions, announces that it expects to hold an extraordinary general meeting ("EGM") around the end of October 2019 to approve the equity issuance in conjunction with the allcash takeover offer for OSRAM Licht AG ("OSRAM") published on 3 September 2019 ("Offer"). The invitation to the EGM will be published in due course, including further details on the proposed EUR 1.5 billion equity issuance to partially refinance the EUR 4.2 billion acquisition bridge facility in conjunction with the Offer.

This decision reflects the positive feedback ams has received from shareholders and investors during a global investor roadshow over the last two weeks. Based on extensive interaction with investors in Europe, the US and Asia, ams sees strong support for its strategic vision including OSRAM which is reinforcing ams’ conviction for the Offer.

Capitalising on this positive momentum, ams intends to lower the acceptance threshold of the Offer to 62.5% from the previous 70% to de-risk the Offer reflecting further analysis of OSRAM’s shareholder base, and achieve success sooner. ams continues to encourage all OSRAM shareholders to tender into the Offer. All other terms and conditions of the Offer remain unchanged and the Offer is due to expire on 1 October 2019 at midnight (CEST). 

ams announces start of acceptance period of takeover offer for OSRAM Licht AG

Press release of ams

- Offer document published following approval by BaFin 

- Acceptance period runs four weeks from 3 September until 1 October 2019 

- Attractive offer price of EUR 38.50 in cash provides unique opportunity to secure high premium to recent OSRAM trading levels 

- ams offers a premium to OSRAM shareholders of additional EUR 3.50 per share compared to lower offer by Bain Capital and The Carlyle Group 

- OSRAM shareholders who already have tendered into the lower offer from Bain Capital and The Carlyle Group can secure premium offered by ams by withdrawing and retendering their shares into the ams offer 

- Offer will become unconditional when the minimum acceptance threshold of 70 percent of all OSRAM shares is met 

Premstaetten, Austria (3 September 2019) -- ams (SIX: AMS), a leading worldwide supplier of high performance sensor solutions, today has published the offer document and announces the start of the acceptance period of its offer (the “Offer”) for all outstanding shares of OSRAM Licht AG ("OSRAM") through its wholly-owned subsidiary Opal BidCo GmbH. The offer document was today approved by the German Federal Financial Supervisory Authority BaFin (Bundesanstalt für Finanzdienstleistungsaufsicht).

OSRAM shareholders are from today able to tender their shares into the Offer at EUR 38.50 until the acceptance period of the Offer expires on 1 October 2019 at midnight (CEST). The Offer represents a premium of 40.6% over the volume-weighted average stock exchange price in the last month until 2 July 2019, i.e. the date prior to that when OSRAM published an ad-hoc announcement confirming the binding offer it has received from Bain Capital and The Carlyle Group, and a 10% premium to the offer from Bain Capital and The Carlyle Group at EUR 35.00 per share. The Offer – if successfully implemented and accepted by OSRAM shareholders – will allow all OSRAM shareholders to realise a premium value to the offer made by Bain Capital and The Carlyle Group, independent of OSRAM's future performance as a stand-alone publicly traded company. In case the 70% acceptance threshold is not reached and the Offer fails, ams believes that the stock exchange price for OSRAM shares could show a significant decline.

Shareholders, who already have decided to tender into the lower offer from Bain Capital and The Carlyle Group, can secure the premium of EUR 3.50 per share offered by ams by withdrawing and retendering their OSRAM shares into the Offer. Shareholders should inquire with their custodian banks for any steps required to withdraw and retender their shares and any relevant deadlines that may require action during the offer period.

OSRAM shareholders can only benefit from the EUR 3.50 per share premium offered by ams if the Offer is successful. In order to tender their shares, OSRAM shareholders must issue a written or electronic declaration to their respective custodian bank. Further information on this and other details of the Offer can be found in the offer document. Settlement of the Offer will be subject to a minimum acceptance threshold of 70% of all OSRAM shares and further customary conditions, including merger control and a foreign investment control approval.

ams and OSRAM have entered into a cooperation agreement on 21 August 2019, including agreeing on a comprehensive set of covenants aimed at protecting the employees and production facilities of OSRAM in Germany. The management of ams is convinced that creating a global leader in sensor solutions and photonics delivers tangible benefits for employees and customers alike. In addition, both management teams share the conviction that close co-operation among stakeholders is critically important in combining the two companies and delivering sustained success. The management team of ams is confident that combining the two companies on this basis will create significant value for all stakeholders of ams and OSRAM.

"Our Offer and the combination of OSRAM and ams represents a better option to all stakeholders than the private equity proposal,” says Alexander Everke, CEO of ams. "We intend to leverage OSRAM’s strong position in optical semiconductors and automotive and create a global leader in sensor solutions and photonics. We are prepared for the integration of both companies, drawing on our in-depth understanding of the industry, due diligence and successful M&A track record. Our strategic vision is to create a technology leader enabling profitable growth in the long-term interest of our combined employee, customer and shareholder base. Compared to private equity ownership, we offer a superior way forward due to our higher growth potential, significant cash flows and lower cost of capital, translating into an expected faster deleveraging and more available investment for the combined business."

Further information about the offer document – website FAQ and hotline for retail shareholders 

A FAQ section for shareholders will be available online at http://www.ams-osram.com.
A takeover offer hotline for retail shareholders is available between 9 a.m. and 6 p.m. (CEST) from Monday to Friday as of today under the phone number +49 69 9517 9985.
The German version of the offer document (together with a non-binding English translation which has not been reviewed by BaFin) is now available online at http://www.ams-osram.de as well as for distribution free of charge in the Federal Republic of Germany at HSBC Trinkaus & Burkhardt AG, Königsallee 21-23, 40212 Düsseldorf, Germany, fax: +49 211 91091870, email: angebotsunterlage-ams-osram@hsbc.de 

09 August 2019

EPGC: Discussions with Meridian and Beisheim constructive but not successful

Press Statement  

Grünwald, 5. August 2019 – EPGC held open and constructive discussions with the main shareholders Meridian Stiftung and Beisheim Holding about their potential support of the tender offer by EPGC. Although EPGC was exploring several alternatives with the two shareholders, it became clear during the discussions that EPGC and the two shareholders have different views on the valuation of METRO and therefore unfortunately the parties did not find a common ground for an agree-ment under which the two shareholders would support the offer.

EPGC appreciates the tone and atmosphere of the discussions and regrets that they were not successful but continues to believe that the offer represents a unique opportunity for all shareholders to exit at an attractive price and in EPGC’s view includes a significant premium to the current fundamental value of METRO. EPGC also continues to believe that the company itself would significantly benefit from a simplified shareholder structure under clear leadership with a long-term strategic view to help METRO to successfully complete the necessary transformation in the challenging market environment.

EPGC confirms that it will neither increase the offer price, nor lower the minimum acceptance threshold, nor otherwise amend the offer. The acceptance period for the offer expires on 7 August 2019.  

EPGC expects public takeover offer for METRO AG likely not successful

8. 8. 2019

EPGC expects that the public takeover offer for METRO AG will very likely not be successful given the latest figures of tendered shares and including shares owned by, or attributed to, the bidder that indicate that the minimum acceptance threshold will not be reached.

press release of EPGC

08 August 2019

EUWAX decision of the County Court of Stuttgart (appeal pending)

Elliott Shares Its Perspectives on Scout24

LONDON & FRANKFURT, Germany - Elliott Advisors (UK) Limited (“Elliott”), which advises funds that collectively hold a long economic interest representing in excess of 7% of the share capital of Scout24 A.G. (“Scout24” or “the Company”), today released a letter outlining its perspectives on the significant value-creation potential at Scout24.

Elliott believes there are concrete and prudent steps that the Management and Supervisory Boards of Scout24 should be taking that could drive the share price of Scout24 to more than €65 per share. A more ambitious buyback programme, with leverage levels closer to those recommended by the Boards just a few months ago, as well as a comprehensive strategic review focused on achieving a full separation of the AutoScout24 business would create meaningful value for all stakeholders. Elliott looks forward to continuing to engage with the Boards of Scout24 to help deliver this outcome.

The full text of the letter follows and a copy is available on our website www.ScoutingForValue.com.

***

26 July 2019

FAO: Tobias Hartmann

CC: Dr. Hans-Holger Albrecht

Scout24 AG
Bothestr. 11-15
81675 Munich
Germany

Dear Mr. Hartmann,

We are writing to you on behalf of funds advised by Elliott Advisors (UK) Limited (“Elliott” or “we”), which collectively hold an economic interest representing in excess of 7% of the share capital of Scout24 AG (“Scout24” or the “Company”). We appreciate you taking the time to meet with us over the past several weeks. As one of Scout24’s largest investors, we remain committed to constructive engagement and open dialogue. We are hopeful that our ongoing communication can translate into meaningful and tangible progress in creating value for all stakeholders.

In an effort to continue our constructive dialogue and encourage greater ambition, we want to share with you in greater detail our perspectives on the following topics:
The Value Potential. Our perspectives on the significant value within both ImmobilienScout24 (“IS24”) and AutoScout24 (“AS24”), two independently strong businesses;
The Missed Opportunities. Our concerns with Scout24’s recent missteps – including the ill-advised recommendation to shareholders that they sell their Scout24 holdings at a price clearly well below its true potential as well as last week’s surprise announcement that lacked clarity and ambition; and
The Path Forward. Our recommendations regarding the strategic steps needed to realize the full potential of Scout24.

We believe there is a growing demand among a wide array of stakeholders for Scout24’s leadership to demonstrate a level of urgency that has thus far been lacking. We hope our perspectives can help clarify what is required for Scout24 to regain credibility with its shareholders. We remain committed to working collaboratively in achieving a win-win outcome.

I. The Value Potential

As we outlined to you during our meetings, Elliott’s strong view is that, fundamentally, IS24 and AS24 are two exceptional businesses. Having spent significant time and resources researching and following Scout24 over the years, we have come to admire the businesses that the Scout24 team has shepherded from fledgling start-ups in 1998 to large, attractive businesses today. We believe that Scout24 has achieved this success through hard work and innovation on all fronts: technology, branding, business model evolution, and client service. The quality of these businesses, coupled with the dislocation between their true value and the value that the market places on them today, is why we are investors in Scout24.

Along with our team of advisors (including a leading global strategy consulting firm), we have conducted over 100 interviews with real estate agents and auto dealers; have commissioned three surveys (on real estate agents, real estate consumers, and auto consumers); and have spoken to over 30 competitors, industry experts, and other market participants (including other investors in publically listed online classifieds, several strategics with classifieds businesses >€5 billion, and many private equity sponsors with experience in the classifieds industry). All of this work has substantiated our view that the true value of Scout24 is in excess of €65 per share.

The significant interest in Scout24’s assets (rumoured or confirmed interest from two strategics and several sponsors) is a testament to the underlying value that could be unlocked. The interest from financial sponsors is especially informative for IS24’s and AS24’s standalone values (i.e. if sponsors can underwrite high valuations while generating >20% IRRs, what should public valuations be?). The interest from strategics suggests an even higher valuation might be attainable once synergies are accounted for.

IS24: Simply put, we believe that IS24 is one of the best online classifieds businesses in the world given its leading market position in one of the most attractive classifieds markets globally, underpinned by strong lead generation and NPS scores highlighting its value to customers. We are particularly attracted to the multiple levers of further value creation available for the asset. We believe that, fully and properly valued, IS24 is worth in excess of €5 billion, i.e. almost the entire market value of the consolidated Scout24 business today.

AS24: As the largest pan-European auto classifieds platform, AS24 offers investors unique exposure to leadership positions across the continent as well as a clear pricing runway and a promising new product pipeline. Recent unsolicited approaches from multiple strategics, as well as several sponsors, demonstrate that AS24 is a highly valuable asset. These approaches also suggest that the value-maximizing owner of AS24 is almost certainly not Scout24.

Scout24’s current market valuation does not reflect the quality and value of its assets. For instance, Scout24 trades materially below 20x EV / EBITDA while three of its closest peers trade far in excess of that level even though their prospects are arguably less bright than those of Scout24. We believe that a major reason for the valuation gap is the current structure of the business: two distinct businesses that do not have any material synergies sitting under one roof. The existing structure does not efficiently allocate resources across divisions, nor does it provide tightly aligned incentive structures for employees or a single-minded focus on customers.

Our experience suggests that focused businesses significantly outperform their less focused peers on operational and valuation metrics, and we expect this experience to apply directly to Scout24. Separated from each other, IS24 and AS24 would have an opportunity to achieve their full potential, not to mention the potential synergies a new owner could bring. Should you take the decisive action needed to remove the impediments holding back Scout24, we believe the share price could rise to in excess of €65 per share. Unfortunately, recent events have us wondering if the Scout management team shares our optimism for these high quality businesses.

II. The Missed Opportunities

Assessing the past year

In April 2019, Scout24’s Management Board and Supervisory Board recommended selling Scout24 at a price of €46 per share. This recommendation is not consistent with the underlying value of the business.

Your recommendation was also at odds with the views of your shareholders, and fewer than 30%1 of shares were tendered into the offer that you recommended. This was a significant rebuke of the Management Board and Supervisory Board. Indeed, this tender acceptance level implies that Scout24’s leadership team dramatically misread its shareholders’ perception of value. The failed bid raised a number of key questions that require answers:

- Was a proper process run to maximize shareholder value?

- Were higher bids on the table?

- Was the market price actually indicative of fair value at the time the bidders approached?

- Was the premium over fair value appropriate?

This episode also raised wider issues with the direction of Scout24. From operational issues to concerns about the way Scout24 communicates with its owners, many have been left scratching their heads:

- Why did Scout24 not update the market about its strategic vision between its April recommendation to sell at €46 and its July buyback announcement at ~€49?

- Why is the capital markets day not being held until Q4?

- Why weren’t top shareholders consulted on recent changes to Scout24’s leadership?

Assessing last week’s missed opportunity

To our surprise—and the surprise of many fellow shareholders—you issued a press release last Friday that lacked ambition and clarity. As you will recall, we had spoken just two days prior to your announcement, setting out privately many of the thoughts that we have now committed to paper in this letter; you promised to provide us with feedback on our proposals. Instead of providing us the promised feedback, you provided the entire market with yet another affirmation of our underlying concerns in the form of your 19 July press release, an announcement that widely missed the mark. The share price reaction confirms the underwhelming nature of your announcement: instead of significantly decreasing the gap to Scout24’s fair value, the 19 July announcement has barely affected Scout24’s share price, thus indicating that shareholders were unimpressed by your update.

We acknowledge that your announcement included some small steps in the right direction, most notably a modest initiative to restructure Scout24 into two cleanly separable units. However, this announcement was inadequate, failing to signal Scout24’s intention to fully separate AS24, a topic we discussed extensively on 17 July and to which you did not offer any disagreement.

Your announcement of a €300 million share buyback programme marked another disappointment: The appearance of forward momentum, yet grossly lacking in ambition. An incremental €300 million of net debt would bring Scout24 to ~3x net debt to EBITDA. For a team that had recommended only a few months ago2 that Scout24 increase its leverage to ~8x (and up to ~6x while remaining publically listed), the announcement of such a small buyback was frustratingly insufficient. Given that you are now apparently buyers of your shares at ~€49 per share having recommended unanimously that shareholders sell their shares for €46 per share two months ago, your own confidence in the business seems to have increased significantly. We do not understand how ~8x EBITDA could have been the appropriate leverage ratio a few months ago whereas today the appropriate leverage ratio is ~3x. How can you be more confident about the business prospects while at the same time being substantially less confident about the credit-worthiness of the business?

Both of the above missed opportunities (i.e. the nature of structural reform and the size of the buyback programme), as well as the ill-advised recommendation to sell at €46 per share, paint a picture of a leadership team that is lacking in ambition. This lack of ambition is particularly shocking for a public company with the qualities and prospects of Scout24.

Another key component of your 19 July announcement was the addition of three new Supervisory Board nominees. The proposed Board refresh is a welcome acknowledgment of the need for fresh perspectives at Scout24. While we look forward to meeting the candidates, we were disappointed that you did not consult widely prior to their nomination. As such, we view the changes to the Supervisory Board as yet another missed opportunity to reassure shareholders of Scout24’s commitment to improving its poor track record of corporate governance and Board decision-making.

In summary, the past year was fraught with poor judgment and suboptimal communication on the part of Scout24. Despite these concerns, we remain upbeat about the Company’s prospects. Given the substantial value of IS24 and AS24, the Management Board and Supervisory Board have an opportunity to restore trust with the shareholder base and take Scout24 to another level.

III. The Path Forward

As we have discussed in person, we strongly encourage Scout24 to put forward a plan that properly reflects the Company’s underlying value. Specifically, we recommend the following steps:
Separate AS24, given strategic and private interest at attractive valuations

We believe that a full3 separation of IS24 and AS24 would be beneficial for all stakeholders. Employees could focus fully on their respective businesses and be compensated with greater alignment to their specific performance. With more precise focus and allocation of capital, customers would benefit from products and services delivered with greater efficiency. And shareholders would benefit from material value creation.
Commence a more robust buyback

As mentioned above, the Investment Agreement with the sponsors contemplated significantly more leverage than what you proposed on 19 July. A more ambitious, yet prudent, buyback programme is not only appropriate, it is urgent. The opportunity to buy back shares at the current discount to fair value may not be available in the future; as such, immediate action is required.
Meaningfully reengage with shareholders

Your top shareholders should not be surprised by big strategic announcements and major leadership changes. The lack of clarity in the 19 July press release could have been prevented with stronger shareholder engagement. We would remind you of the fact that we offered to work closely with you on a future announcement of strategic priorities and capital structure, and we were willing to enter into an agreement where we could privately collaborate in greater detail in a manner that is compliant with fiduciary duties and securities regulations.

Earnest dialogue can often garner positive change. Shareholders can often provide useful insights and fresh perspectives to a company struggling to make the most of its valuable assets. At the same time, an engaged management team help bridge areas of disagreement. We often adjust our own recommendations based upon relevant facts provided by management, producing a more informed, constructive dialogue and superior outcomes. In the wake of major missteps, there is heightened need for this leadership team to engage if it hopes to regain the confidence of its shareholders. Shareholder engagement cannot be a box-ticking exercise.

The above plan—1) Separate AS24; 2) Launch a robust buyback; 3) Reengage shareholders—must be pursued without delay. We believe this plan can take Scout24 significantly closer to its fair value of more than €65 per share. A critical question on the minds of Scout24’s major shareholders: Is the team that recommended shareholders sell their shares at €46 per share the right team to take this business beyond €65 per share? To reassure sceptical shareholders, you must demonstrate more ambition and vision. Fortunately, the 13 August earnings update presents an ideal opportunity to clarify your plans.

As ever, we remain available to discuss any of the above in more detail. We trust that you will share this letter with the rest of the Management and Supervisory Boards, and we extend our offer of open dialogue to both Boards.

Yours sincerely,

Elliott Advisors (UK) Limited

About Elliott

Elliott Management Corporation manages two multi-strategy funds which combined have approximately $38 billion of assets under management. Its flagship fund, Elliott Associates, L.P., was founded in 1977, making it one of the oldest funds of its kind under continuous management. The Elliott funds’ investors include pension plans, sovereign wealth funds, endowments, foundations, funds-of-funds, and employees of the firm. Elliott Advisors (UK) Limited is an affiliate of Elliott Management Corporation.

Disclaimer

As of today, Elliott holds a long economic interest in Scout24 which may cause a conflict of interest. Elliott intends to review its investments in the Company on a continuing basis and depending upon various factors, including without limitation, the Company’s financial position and strategic direction, the outcome of any discussions with the Company, overall market conditions, other investment opportunities available to Elliott, and the availability of Company securities at prices that would make the purchase or sale of Company securities desirable, Elliott Management may at any point in time (in the open market or in private transactions, including in the short term and since the inception of Elliott Management’s position) buy, sell, cover, hedge or otherwise change the form or substance of any of its investments (including any or all Company securities or related financial instruments) to any degree in any manner permitted by law and expressly disclaims any obligation to notify others of any such changes. Elliott Management also reserves its right to take any actions with respect to its investments in the Company as it may deem appropriate.

________

1 Excluding shares controlled directly or via proxy by the bidders.

2 As part of the Investment Agreement accompanying the tender offer.

3 For example, a partial IPO of AS24 would be counterproductive, as it would create new governance headaches and avoid the clarity and simplicity presented by the superior forms of separation.

Highlight Communications AG: Notification pursuant to Section 23 para. 1 sentence 1 no. 1 of the German Securities Acquisition and Takeover Act (Wertpapiererwerbs- und Übernahmegesetz, WpÜG) in conjunction with Section 39 para. 2 sentence 3 no. 1 of the German Stock Exchange Act (Börsengesetz, BörsG)

On 31 July 2019, Highlight Communications AG, Pratteln, Switzerland (the "Bidder"), published the offer document (the "Offer Document") for its public delisting tender offer to the shareholders of Constantin Medien AG, Ismaning, Germany ("Constantin Medien"), regarding the acquisition of all no-par value bearer shares of Constantin Medien (ISIN DE0009147207) with a nominal value of EUR 1.00 per share, together with all associated rights as at the date of settlement (each a "Constantin Share" and collectively the "Constantin Shares"), which are not directly held by the Bidder, against payment of a cash consideration of EUR 2.30 per Constantin Share (the "Delisting Offer"). The acceptance period for the Delisting Offer started on 31 July 2019 and ends on 28 August 2018, 24:00 hours (Frankfurt am Main (Germany) local time) unless extended pursuant to statutory provisions of the WpÜG.

1. Until 6 August 2019, 17:30 hours (Frankfurt am Main (Germany) local time) ("Reference Date"), the Delisting Offer has been accepted for 117,384 Constantin Shares. This corresponds to approximately 0.13% of the share capital and voting rights of Constantin Medien.

2. As of the Reference Date, the Bidder directly held 74,353,541 Constantin Shares. This corresponds to approximately 79.44% of the share capital and voting rights of Constantin Medien. This interest is attributed in full to Highlight Event and Entertainment AG as well as Mr Bernhard Burgener and Mrs Rosmarie Burgener pursuant to Section 30 para. 2 WpÜG and, in addition, to Highlight Event and Entertainment AG also pursuant to Section 30 para. 1 sentence 1 No 1 and sentence 3 WpÜG.

3. Other than that, as of the Reference Date, neither the Bidder nor persons acting jointly with the Bidder pursuant to Section 2 para. 5 WpÜG, nor any of their subsidiaries, held any Constantin Shares or any instruments in relation to Constantin Shares within the meaning of Sections 38, 39 of the German Securities Trading Act (Wertpapierhandelsgesetz, WpHG). Moreover, as of the Reference Date, no further voting rights attached to Constantin Shares were attributed to them pursuant to Section 30 WpÜG.

4. The total number of Constantin Shares for which the Delisting Offer has been accepted until the Reference Date, plus the shares directly held by the Bidder, as mentioned in section 2, amount to 74,470,925 Constantin Shares as of the Reference Date. This corresponds to approximately 79.56% of the share capital and voting rights of Constantin Medien.

Pratteln, 7 August 2019

Highlight Communications AG

07 August 2019

METRO AG: METRO major shareholders Meridian and Beisheim intend to conclude a pooling agreement

Disclosure of an inside information acc. to Article 17 MAR of the Regulation (EU) No 596/2014

METRO AG has taken note of a joint press release by Meridian Foundation and Beisheim Group, in which they inform about their intention to enter into negotiations for the conclusion of a pooling agreement for the total of 20.55% of ordinary shares in METRO AG held by them according to the press release. In the press release, Meridian Foundation and Beisheim Group further state that they intend to gradually expand their shareholdings in case of appropriate buying opportunities.

Declared objective of Meridian Foundation and Beisheim Group is to consistently exercise the voting rights of the METRO shares held by them and to act unanimously vis-à-vis METRO AG and its other shareholders in material matters, in order to secure a positive development of METRO AG in the future.

The shareholdings of Meridian Foundation are managed by Palatin Verwaltungsgesellschaft mbH which currently holds approximately 14.19% of the ordinary shares in METRO AG. Beisheim Holding GmbH, Baar/Switzerland, and Beisheim Capital GmbH, Düsseldorf, currently jointly hold approximately 6.36% of the ordinary shares of METRO AG. 

METRO AG’s management board and supervisory board recommend shareholders not to accept EPGC offer

Today, the Management Board and the Supervisory Board of METRO AG published their Joint Reasoned Statement as per § 27 of the German Securities Acquisition and Takeover Act (WpÜG).

- The Management Board and Supervisory Board welcome EPGC‘s general support for METROs transformation process

- The Management Board and Supervisory Board of METRO AG are convinced that the Offer Prices for ordinary and preference shares do not reflect METROs fundamental value based on its growth and profitability potential and substantially undervalue METRO

- A takeover by EPGC could limit METROs operational flexibility and its strategic ability to act due to the high leverage

Having completed a thorough assessment, both Boards recommend that shareholders of METRO do not accept the unsolicited Voluntary Takeover Offer EP Global Commerce VI GmbH (EPGC), a holding company controlled by Daniel Křetínský, published on 10 July 2019.

The Management Board and the Supervisory Board are of the opinion that the Offer Prices of €16.00 per METRO ordinary share and €13.80 per METRO preference share substantially undervalue METRO with respect to its earnings and value potential.

This assessment is based on the reasons described in more detail in the Reasoned Statement and on the Management Board’s and Supervisory Board’s assessment that the Offer Prices for ordinary shares and preference shares do not reflect METROs fundamental value based on its growth and profitability potential.

Olaf Koch, Chairman of the Management Board of METRO AG, said: “We are convinced that our strategy creates sustainable and profitable growth for METROs future. Since 2012, we have been taking decisive action to transform our company and focus it entirely on wholesale. In a changing market environment, METRO is well positioned to play a leading role in the HoReCa and Trader sector.

Sustainable like-for-like growth has further accelerated in recent quarters, driven by the increased relevance for our customers. This is further evidenced by our like-for-like sales growth of 2.3% in the first nine months of the 2018/19 financial year, which we published on 23 July.

We always welcome new investors in the shareholder structure. Irrespective of this, the Management Board and the Supervisory Board believe that METRO is already capable to respond to the dynamically changing market environment. We consider the price offered by EPGC to be inadequate as it substantially undervalues METRO and, even after reviewing its further conditions, recommend our shareholders not to accept the Offer.”

Juergen Steinemann, Chairman of METRO AG’s Supervisory Board, explained: “METRO has a strategic plan in place, backed by the Supervisory Board, that positions METRO as a leading international wholesaler and food specialist. The Supervisory Board also believes the price offered is not adequate as it substantially undervalues METRO. In addition, more clarity is required regarding EPGC's planned future strategy and the effects of the acquisition financing on the company's ability to act.“

The Management Board and the Supervisory Board welcome EPGC's general support for METROs well-advanced transformation process and appreciate constructive dialogue.

Among other considerations, the recommendation of METROs Management Board and Supervisory Board to reject the Takeover Offer is based on the following reasoning:

METROs current and future value potential

- Focus on wholesale strategy: Over the past years, METRO has implemented a far-reaching transformation process, which has progressed well, and developed the company from a conglomerate into a leading wholesale specialist. EPGC also supports key steps of the transformation process that has been underway since 2012, including the sale process for Real and the search for a strategic partner for METROs China business.

- Growth and profit: This transformation is also becoming increasingly apparent in METROs key financial figures. Despite a challenging sector backdrop, METROs wholesale like-for-like sales have been growing for six consecutive years. Most recently a group-wide like-for-like sales growth of 3.4% was achieved in the third quarter of the current financial year, which just ended, despite the challenging situation in the Russia wholesale business. METRO is a healthy and profitable company that has reduced its debt by around €5 bn to €2.7 bn in recent years (both as of September 30, 2012 and 2017/18). This provides financial leeway and flexibility for future growth initiatives.

- Focus on high-growth customer: In the wholesale sector, METRO focuses in particular on two target groups characterized by attractive, sustainable growth dynamics: HoReCa (hotels, restaurants and catering companies) and Trader (independent traders). The like-for-like sales growth of these two target groups, which are characterized, among others, by attractive basket sizes, longer-term customer relationships and high shopping frequencies, amounts to 4-5% (9M 2018/19).

- Business model expansion: Over the past years, METRO has developed numerous innovative digital solutions that enable independent caterers to become even more successful. In combination with additional services, METRO will expand its range of services in the coming years and thus further enhance its attractiveness and relevance for customers. This will provide further growth and earnings potential for METRO.

- Use of funds: As part of the repositioning, METRO improved its cash generation, which is partly reinvested in digitalizing customers and the core business as well as in providing shareholders with an attractive dividend. As a result of these investments, METRO has become an innovative solutions provider.

In the view of METRO AG's Management Board and Supervisory Board, the achieved progress and the resulting growth potential are not sufficiently reflected in the Offer Prices.

This applies even though the Management Board and the Supervisory Board indicate that realizing these potentials involves risks. Accordingly, the Management Board and the Supervisory Board acknowledge that short-term investors may decide to accept the Offer, although the Offer Prices are not adequate from the Management Board’s and the Supervisory Board’s point of view.

Assessment of EPGC‘s Offer

- Share price development: EPGC’s share price analysis over the last twelve months is of limited relevance as it focuses on a selection of EPGC-related events only, ignoring progress against METROs transformation strategy. This includes the sale process for the Real business, the search for potential partners for METRO China, the digitization of customers and core business, the improvement measures initiated at METRO Russia and the increased focus on the growing HoReCa and Trader business.

- Premium: With a premium of around 2.9%, the Offer Price for METROs ordinary shares is only marginally above the closing price on the day the Offer was announced (21 June 2019). In addition, it only corresponds to a premium of around 10% versus the volume weighted three-month average price of €14.55 as determined by BaFin. This is well below the average control premiums customary for public takeovers in Germany. The multiples implied by the Offer Price are considerably lower than the EV/EBITDA multiples of comparable transactions in the wholesale and food service sector.
Analyst target prices: EPGC’s claims that analyst target prices have only been significantly raised due to takeover speculation cannot be substantiated. Various analysts have also referred to the strategic progress in their reports.

- High leverage burden:
  • EPGC’s Offer is highly leveraged with significant repayment and interest requirements, most likely burdening the company in the event of a successful takeover with a significantly increased debt level. This could limit METROs strategic flexibility and financial leeway and gives reason to suspect that the company‘s substance could be used for debt servicing.
  • The expected high proportion of leverage could also have a negative impact on METROs credit rating and would in all likelihood have a negative impact on refinancing requirements, refinancing possibilities and their terms and conditions. The rating agency Standard & Poor's has already placed METROs rating on the watch list with a negative outlook. A significant downgrade of METROs credit rating seems likely in case of a consummation of the transaction.
The recommendation of METRO AG's Boards is supported by inadequacy opinions from Bank of America Merrill Lynch and Goldman Sachs (for the Management Board) and Rothschild & Co (for the Supervisory Board). The Management Board is also advised by J.P. Morgan. The Management Board is legally advised by Hengeler Mueller and the Supervisory Board by Berner Fleck Wettich.

The complete explanation of the Management Board’s and the Supervisory Board’s recommendation to reject the Offer can be found in the Reasoned Statement pursuant to § 27 WpÜG, which is available at www.metroag.de/reasoned-statement