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2007-03-22 News Release
Rank closer to acquiring
packaging biz
Rank plans to create a leading global beverage packaging company, drawing
of the respective strengths of both BevPack and SIG.
The Board of Directors of SIG has taken notice of Rank’s Revised
Offer. The Board has further taken notice of the announcement of CVC/FERD
to refrain from further increasing its CHF 400.- offer and to have already
divested the majority of their SIG shares.
Find Information and Suppliers of aseptic
packaging.
The Board analysed Rank’s Revised Offer Price of CHF 435.- per SIG
share in cash and benchmarked it against SIG's inherent value. The Board,
together with its financial adviser, came to the conclusion that Rank’s
Revised Offer Price adequately reflects SIG’s inherent value based
on the following facts:
• the implied transaction multiple of 16.0x EV/EBIT (based on 2006
figures) is comparable with the multiples offered in precedent transactions
in the packaging sector;
• the implied transaction multiple also reflects an adequate premium
to the current trading multiples of SIG's industry peers;
• Ranks’ Revised Offer Price represents a premium of 43% to
SIG's last closing price (CHF 305.25), and 52% to SIG's 30-day average
opening price (CHF 285.85) prior to CVC/FERD's first offer on September
25, 2006. These premia are higher than those paid in recent contested
public offers in the Swiss market.
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The Board regards Rank as an attractive partner for SIG SIG Holding AG . Through
its investment in Carter Holt Harvey and the recent acquisition of International
Paper’s Beverage Packaging division (“BevPack”), Rank
has significant experience and expertise in the forest products and packaging
sector. The Board supports Rank’s intention to combine the geographically
complementary BevPack and SIG businesses as to create a leading global
beverage packaging company, drawing of the respective strengths of both
companies. A combination of BevPack’s product range in the fresh
dairy and juice market and SIG’s aseptic packaging portfolio means
that the combined group will offer its customers a comprehensive range
of packaging solutions and provide important strategic advantages in terms
of scale, market presence and global footprint. The Board is pleased with
Rank’s intentions to continue to operate SIG under its current management
team and to position SIG as a platform for future growth as well as to
maintain SIG’s headquarters in Switzerland and to keep the SIG name
and brands.
The Board has further reviewed Rank's ability to complete the proposed
transaction under the terms and conditions of the offer. As outlined in
its first report as of February 9, 2007, the Board maintains its view
that Rank will be able to complete the offer as proposed.
Based on the considerations summarized below, the Board considers that
Rank’s Revised Offer is in the best interest of all shareholders
and stakeholders of SIG:
• Rank’s Revised Offer Price of CHF 435.- per share adequately
reflects SIG’s inherent value;
• Rank is committed to SIG’s current strategy and intends
to position SIG as platform for future growth;
• A combination of SIG and BevPack has a clear industrial logic
and allows to realize important strategic advantages for the future;
• Rank intends not to significantly alter SIG’s current organisational
structure;
• Rank’s Revised Offer is likely to complete, in particular
after having obtained antitrust approval from the EU Commission; and
• as of today, there is no competing offer for SIG that is more
attractive than Rank’s Revised Offer.
If and when Rank will declare the offer as successful, expected for
no later than April 4, 2007, the Board intends to call for an AGM which
would take place on May 7, 2007. The Board intends to make the propositions
which are necessary to fulfil Rank’s offer conditions, i.e., among
others, to lift the statutory registration limitations (“Vinkulierung”)
and voting right restrictions.
With regards to the respective voting procedure at the AGM, the Board
intends to grant Rank an exemption from the registration limitations and
voting right restrictions acc. to art. 6 (6) and art. 13 (4) of SIG’s
article of association; however, this undertaking remains subject to the
following conditions:
• no competing offer with a higher price has been published by the
end of the main offer period; and
• The shareholders tender such number of SIG-Shares into Rank’s
Offer that Rank will ultimately hold such number of SIG-Shares that, taking
the SIG-Shares already held by Rank into account, exceeds at least 50%
of the outstanding SIG-Share.
As communicated in SIG’s 2006 result announcement, the Board will
refrain from proposing a dividend payment to the AGM if Rank declares
the offer successful on the basis that the gross amount of a dividend
or any other dilution effect which becomes effective before settlement
would be deducted from Rank’s Revised Offer Price. Instead, the
Board will propose that the net profit is carried forward.
Rank’s Revised Offer of CHF 435.- reflects SIG’s inherent
value and includes a significantly higher premium than the CVC/FERD offer.
The Board therefore recommends the SIG shareholders to decline the financially
less attractive CVC/FERD offer which is also exposed to more completion
risks. Furthermore, the Board therefore unanimously recommends to SIG’s
shareholders to accept Rank’s Revised Offer and to tender their
shares into Rank’s Revised Offer and to unanimously recommends to
SIG’s shareholders to decline the CVC/FERD offer and not to tender
their shares into the CVC/FERD offer.
PRELIMINARY TIMETABLE
March 29, 2007, 4:00 pm (CET) End of main offer period
March 30, 2007 Publication of preliminary results of main offer period
April 4, 2007 Publication of final results of main offer period
April 4, 2007 Start of additional acceptance period
April 19, 2007, 4:00 pm (CET) End of additional offer period
April 20, 2007 Publication of preliminary results of additional offer
period
April 25, 2007 Publication of final results of additional offer period
May 7, 2007 Annual General Meeting
Thereafter Settlement/completion
ADDITONAL INFORMATION REQUIRED BY THE SWISS TAKEOVER LAW
At the current offer price, the Board-approved incentive scheme for employees
involved in the offer process amounts to the maximum sum of CHF 10,400,000.
A reduction of the incentive payments is not required as the increase
of the offer price is unrelated to the best price rule.
The Board is not aware of any material changes in SIG’s financial
situation and outlook since the publication of the FY06 results on March
6, 2007.
Find information about Rank
Group Holdings Ltd.
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