Nutreco announces today additional notes to the trading update for the third quarter as published by Nutreco on 20 October 2014. These notes are complementary to the Q3 and YTD Q3 interim financial statements as published in section 15 of the Offer Memorandum that is published on 5 December 2014 by SHV, pursuant to its public offer for the shares of Nutreco.
Key figures
(€ x million)
Q3 2014 Q3 2013 % YTD Q3 2014 YTD Q3 2013 %
Revenue (third parties) 1,428.9 1,490.5 -4.1 3,888.9 3,889.2 0.0
EBITDA before exceptional items 102.7 103.5 -0.1 241.1 227.1 6.2
EBITA
Animal Nutrition 30.1 25.6 17.6 89.7 82.5 8.7
Fish Feed 53.0 57.9 -8.5 96.5 93.0 3.8
Compound Feed & Meat Iberia 10.7 12.0 -10.8 28.8 25.8 11.6
Corporate -6.2 -6.9 -10.1 -19.2 -18.6 3.2
EBITA before exceptional items 87.6 88.6 -1.1 195.8 182. 7.2
Total result for the period 55.4 55.0 0.7 113.0 108.5 4.1
Basic earnings per share 0.79 0.79 0.0 1.61 1.57 2.5
Nutreco
Revenue for Nutreco's continuing operations in the third quarter amounted to € 1,428.9 million, a decrease of 4.1% compared to last year (Q3 2013: € 1,490.5 million). The volume effect was -1.0%, with positive volume developments in Animal Nutrition and Compound Feed & Meat Iberia, offset by declining volumes in Fish Feed. The price effect was -1.0%. The foreign exchange rate effect was -2.1%.
Q3 YTD revenue was flat at € 3,888.9 million (YTD Q3 2013: € 3,889.2 million). The volume effect was 2.8%, the price effect was -1.3%, the acquisition effect was 1.9% and the foreign exchange rate effect was -3.4%.
Q3 YTD EBITA increased by 7.2% to € 195.8 million (Q3 YTD 2013: € 182.7 million). The exceptional items amounted to € -11.3 million (Q3 YTD 2013: € -8.9 million) and consist of costs related to impairments in Spain, restructuring costs, and costs related to acquisitions as well as divestments. The foreign exchange impact on EBITA before exceptional items was € -6.2 million (Q3 YTD 2013 € -5.7 million) and mainly related to the Canadian dollar and the Norwegian krone.
The EBITA in Q3 of € 87.6 million was 1.1% lower than the same quarter last year (Q3 2013: € 88.6 million).
OPERATING SEGMENT INFORMATION
*All key figures are before exceptional items
Animal Nutrition
(€ x million)
Q3 2014 Q3 2013 % YTD Q3 2014 YTD Q3 2013 %
Revenue (third parties) 454.9 444.6 2.3 1,339.2 1,351.6 -0.9
EBITDA* 34.1 29.7 14.8 101.5 94.5 7.4
EBITA* 30.1 25.6 17.6 89.7 82.5 8.7
Operating margin (EBITA*/revenue) 6.6% 5.8% 6.7% 6.1%
Revenue for the Animal Nutrition segment in the third quarter amounted to € 454.9 million, an increase of 2.3% compared to last year (Q3 2013: € 444.6 million). The volume effect was 3.2%, driven by positive performances in Canada, Brazil, Europe and young animal feed. The price effect was 0.9%. The acquisition effect was -0.1% due to a small divestment in Canada. The foreign exchange rate effect was -1.7%.
Q3 YTD revenue decreased 0.9% to € 1,339.2 million (YTD Q3 2013: € 1,351.6 million). The volume effect was 2.0%, the price effect was 0.4%, the acquisition effect was 0.8% and the foreign exchange rate effect was -4.1%.
Q3 YTD EBITA for the Animal Nutrition segment of € 89.7 million was 8.7% higher than in Q3 YTD 2013 (€ 82.5 million). This increase was driven by good performances in most markets, as well as certain product categories such as young animal feed. The EBITA in Q3 of € 30.1 million was 17.6% higher than the same quarter last year (Q3 2013: € 25.6 million). As a result of this performance the Q3 YTD EBITA margin increased to 6.7% (Q3 YTD 2013: 6.1%); this increase is attributable to improved margins in Europe, mainly due to good performance of young animal feeds and to improved margins in our Canadian business.
Fish Feed
€ x million)
Q3 2014 Q3 2013 % YTD Q3 2014 YTD Q3 2013 %
Revenue (third parties) 639.4 696.1 -8.1 1,567.7 1,467.0 6.9
EBITDA* 60.2 63.9 -5.8 117.1 111.2 5.3
EBITA* 53.0 57.9 -8.5 96.5 93.0 3.8
Operating margin (EBITA*/revenue) 8.3% 8.3% 6.2% 6.3%
Third quarter revenue in Fish Feed decreased by 8.1% to € 639.4 million compared to last year (Q3 2013: € 696.1 million). The volume effect was -5.8%, mostly due to -10.1% lower demand for salmonid feed. The lower demand occurred mainly in Norway due to lower volumes to Marine Harvest (as anticipated) and in the context of the strong quarter a year ago. This was partially offset by 5.4% volume growth in non-salmonid feed, with growth in Ecuador, Japan, southern Europe and Vietnam. The price effect was 1.2%. The foreign exchange rate effect was -3.5%.
Q3 YTD revenue increased by 6.9% to € 1,567.7 million (YTD Q3 2013: € 1,467.0 million). The volume effect was 8.1%, the price effect was -0.4%, the acquisition effect was 4.4% (Egypt, Ecuador) and the foreign exchange rate effect was -5.2%.
The volume share in YTD Q3 revenues of fish feed for non-salmonid species was 41% compared with 37% in the same quarter last year.
Q3 YTD EBITA in Fish Feed was 3.8% higher at € 96.5 million compared with € 93.0 million in Q3 YTD 2013. The higher EBITA in Q3 YTD 2014 is mainly caused by higher salmon feed volumes in Norway in the first half-year and the contribution of the businesses in Ecuador and Egypt which were acquired in the first half of 2013 as part of our strategy to grow in non-salmonid species and growth geographies. The increase in salmonid feed volumes in the first half year was mainly caused by favourable growing conditions especially in Norway compared to the exceptionally cold seawater temperatures last year which reduced feed volumes. The EBITA in Q3 of € 53.0 million was 8.5% lower than the same quarter of 2013 (€ 57.9 million). This was mostly due to lower sales in Norway (impact Marine Harvest) and China, offset by good performance in almost all other geographies. EBITA margin is slightly down Q3 YTD at 6.2% (2013 Q3 YTD: 6.3%).
In June 2014 Nutreco signed an agreement to enter into a joint venture in Nigeria with Durante, a leading supplier of fish feed in Nigeria and our existing distribution partner. The joint venture Skretting Nigeria will invest in the local production of extruded fish feed for Nigeria as well as the wider West African region. The financials are consolidated as from 18 September 2014 onwards.
Compound Feed & Meat Iberia
(€ x million)
Q3 2014 Q3 2013 % YTD Q3 2014 YTD Q3 2013 %
Revenue (third parties) 334.6 349.8 -4.3 982.0 1,070.6 -8.3
EBITDA* 14.4 16.3 -11.7 40.9 39.2 4.3
EBITA* 10.7 12.0 -10.8 28.8 25.8 11.6
Operating margin (EBITA*/revenue) 3.2% 3.4% 2.9% 2.4%
Revenue for the Compound Feed & Meat Iberia segment in the third quarter amounted to € 334.6 million, a decrease of 4.3% compared to last year (Q3 2013: € 349.8 million). The volume effect was 3.3%, with good progress made in increasing sales to customers across various channels. This compensated substantially for lower volumes to Mercadona due to disengagement process. The year-to-date volumes in tonnes to Mercadona were 28% lower than the last comparable 9 month period before the start of the disengagement process. We have successfully replaced approximately 75% of these volumes. The price effect was -7.6% caused by lower raw material prices.
Q3 YTD revenue decreased 8.3% to € 982.0 million (YTD Q3 2013: € 1,070.6 million). The volume effect was -3.6% and the price effect was -4.7%.
Q3 YTD EBITA of Compound Feed & Meat Iberia increased by 11.6% to € 28.8 million (Q3 YTD 2013: € 25.8 million). The increase was related to a better performance in all business unit operations due to lower raw material prices and good chicken and pork meat markets in the first half. The EBITA of € 10.7 million in Q3 was 10.8% lower than the same quarter last year due to declining poultry prices.
Corporate costs
The corporate costs are 3.2% higher than in Q3 YTD 2013 at € 19.2 million (Q3 YTD 2013: € 18.6 million).
Net financing costs
Net financing costs amounted to € 22.0 million (Q3 YTD 2013: € 21.8 million). Financial expenses were slightly lower at € 24.0 million (Q3 YTD 2013: € 25.5 million). Financial income decreased to € 2.0 million (Q3 YTD 2013: € 3.1 million).
Income tax expense
Income tax expense for the first nine months increased from € 36.2 million in 2013 to € 40.9 million in 2014. This corresponds to an effective tax rate of 26.5% in the first nine months of 2014 which is 1.5% higher than the prior year period mainly as a result of the fiscal amortisation of the goodwill in Brazil in 2013.
Result for the period
The total result for the period increased by 4.1% from € 108.5 million to € 113.0 million. Basic earnings per share increased by 2.5% to € 1.61 (Q3 YTD 2013: € 1.57). The total result for the period attributable to owners of Nutreco was € 111.4 million (Q3 YTD 2013: € 108.7 million).
Cash position and capital structure
The net debt position as at 30 September 2014 was € 486.9 million compared to € 477.9 million as at 30 September 2013. Total equity as at 30 September 2014 was € 968.7 million (30 September 2013: € 943.1 million).
On 20 October 2014 Nutreco terminated the share buy-back programme of € 100 million which commenced on 26 August 2014. Pursuant to this programme, that had the purpose of optimising the efficiency of the balance sheet and enhancing future earnings per share, Nutreco purchased 1,680,553 of its ordinary shares at an average price of € 29.25 per share, for a total consideration of € 49.2 million (up to 20 October 2014).
Per 30 September 2014, Nutreco purchased 933,445 of its ordinary shares under this programme for a total consideration of € 27.7 million (at an average price of € 29.66 per share).
Nutreco currently holds 4.4% of its ordinary shares. The issued share capital per today amounts to 70,237,364 ordinary shares.
Outlook full year 2014
Based on current trading conditions and barring any unforeseen circumstances we expect EBITA before exceptional items for continuing operations for the full year 2014 to be at least equal to last year (2013: € 256.3 million), which is a confirmation of the outlook we provided as part of our Q3 trading update, dated 20 October 2014.
Due to seasonality of the business, the majority of Nutreco's result is generated in the second half of the year.
Recommended cash offer by SHV for all outstanding ordinary Nutreco shares
JOINT PRESS RELEASE
This is a joint press release by Nutreco N.V. and SHV Investments Ltd. pursuant to the provisions of Section 10, paragraph 3 and Article 18, paragraph 3 of the Decree on Public Takeover Bids (Besluit openbare biedingen Wft) in connection with the recommended public offer by SHV Investments Ltd. for all the issued and outstanding ordinary shares in the capital of Nutreco N.V. This announcement does not constitute an offer, or any solicitation of any offer, to buy or subscribe for any securities in Nutreco N.V. Any offer will be made only by means of the Offer Memorandum which is available as of today. This announcement is not for release, publication or distribution, in whole or in part, in or into, directly or indirectly, Canada and Japan. Terms not defined in this press release will have the meaning as set forth in the Offer Memorandum.
Publication of Offer Memorandum - Offer discussed at Nutreco EGM on 9 February 2015 - Offer Period ends 17 February 2015
Transaction highlights
Recommended public cash offer for all Nutreco shares at an offer price of EUR 44.50 (cum dividend) in cash per Share representing a premium of 58% to the closing price of Friday 17 October 2014, the last trading day before the Initial Offer
The Executive Board and the Supervisory Board of Nutreco (the "Boards") fully support and unanimously recommend the Offer to all Shareholders for acceptance
SHV, a privately owned company with a true long-term focus and commitment, will financially support Nutreco with investment needs for capital expenditures and acquisitions in accordance with Nutreco's long-term growth strategy
In the interest of Nutreco's stakeholders, Nutreco and SHV have agreed on certain important Non-Financial Covenants, including no break up of Nutreco, headquarters remaining in the Netherlands, no redundancies and employee rights being respected
SHV will finance the proposed transaction with cash from its own available resources
The Offer is subject to satisfaction or waiver of the Offer Conditions as set out in the Offer Memorandum, including a 95% acceptance condition which the Offeror can waive to 66 2/3% without the approval of the Boards
The Offer Period commences on 10 December 2014 at 09.00 hours CET and ends on 17 February 2015 at 17.40 hours CET, unless extended
Nutreco will convene an extraordinary general meeting of shareholders to be held on 9 February 2015 at 14.30 hours CET during which, among other matters, the Offer will be discussed
Amersfoort/Utrecht, the Netherlands, 5 December 2014 - With the publication of the Offer Memorandum today, Nutreco N.V. ("Nutreco") and SHV Investments Ltd. (the "Offeror"), an indirect wholly owned subsidiary of SHV Holdings N.V. ("SHV"), jointly announce that the Offeror is making a recommended cash offer to all holders of issued and outstanding ordinary shares with a nominal value of EUR 0.12 each in the capital of Nutreco (the "Shares") to acquire their Shares at an offer price of EUR 44.50 (cum dividend) in cash for each Share (the "Offer").
Knut Nesse, CEO of Nutreco said: "From the very beginning when SHV approached us, we have ensured a process to maximize value for our shareholders while safeguarding the interests of all stakeholders involved. SHV fully supports Nutreco in executing the existing "driving sustainable growth" strategy, including geographical expansion. The complete package of the SHV offer is compelling to the shareholders, employees and other stakeholders of Nutreco. The offer represents an attractive price, implies an above average EV/EBITDA multiple of 10.6 and provides high deal certainty for shareholders. Nutreco's Executive Board and Supervisory Board both fully support and unanimously recommend it for acceptance by our shareholders."
Stephan Nanninga, Chairman of the Executive Board of SHV said: "We are very pleased with the launch of the recommended public offer to acquire Nutreco, a true global leader in fish feed and animal nutrition. We consider Nutreco a very promising and exciting company with a good long-term growth opportunity, solid management and company values similar to SHV. Besides offering an attractive premium of 58% to Nutreco's shareholders, we truly believe our offer is in the best interest of all Nutreco's stakeholders. SHV will fully support Nutreco's growth strategy as a group and drive investment, innovation and sustainability for the benefit of its customers and employees in the Netherlands and internationally alike. As part of this SHV has given a firm commitment to keep Nutreco as a separate group with headquarters, central management and key support functions in the Netherlands and maintain Nutreco's corporate identity, values and culture. We look forward to working with Nutreco's management and employees to continue feeding the future."
The Offer
The Offeror is making the Offer on the terms and subject to the conditions and restrictions contained in the offer memorandum dated 5 December 2014 (the "Offer Memorandum"). Holders of one or more Shares (the "Shareholders") tendering their Shares under the Offer will be paid in consideration for each Share validly tendered and transferred (geleverd) an amount in cash of EUR 44.50 (forty-four euros and fifty cents) cum dividend (the "Offer Price").
The Offer values 100% of the Shares of Nutreco at EUR 2,988 million. The Offer Price represents a premium of 58% to the closing price of 17 October 2014[1] and a premium of 49% to the average closing share price of the last 3 months prior to that date. This premium compares favourably against the median premium of around 31% for similar Dutch transactions. In addition, the offer price implies an EV/EBITDA multiple of 10.6 (Last Twelve Months ending 30 September 2014).
The Offer is subject to the satisfaction or waiver, as the case may be, of the Offer Conditions as set out in the Offer Memorandum, including a 95% acceptance condition. The Offeror may waive the 95% acceptance condition to 66 2/3% at any time without the approval of the Boards.
The Offeror confirmed in press releases dated 20 October 2014, 10 November 2014 and 11 November 2014 that it has sufficient cash funds available to complete the Offer.
Strategic rationale
Attractive premium and high level of deal certainty for Shareholders
Nutreco's current Shareholders can benefit from an attractive premium and high deal certainty due to SHV's ability to finance the total consideration from its own cash resources and no anti-trust issues are expected.
Long-term growth perspective
SHV fully supports Nutreco in executing its 'Driving sustainable growth' strategy, including geographical expansion. SHV welcomes Nutreco's focus on innovation and R&D, to support its 'Feeding the Future' mission. SHV has the financial strength to realise Nutreco's ambitions based on a prudent finance strategy. Historically, SHV has a longstanding business track-record and good relations in Asia and other emerging markets which are considered to be growth markets for Nutreco.
The aim of SHV is to build valuable businesses creating a sustainable future for all stakeholders involved. Sustainable long-term growth and transferring value to the next generation is the core of its approach to businesses. SHV has acquired new businesses in the past and subsequently built those businesses organically and through acquisitions.
Key similarities
The continuation of Nutreco's corporate identity, culture, values, brands, prudent financing, organisation and strategic direction provides the right future perspective for employees, suppliers and customers.
Both Nutreco and SHV are reputable Dutch head-quartered companies with a global presence and a long heritage. In addition, Nutreco and SHV share a focus on business-to-business activities, a preference for industries with low turbulence and fulfilling basic daily needs, such as food. Additionally, the companies share a strong focus on people development and are expected to strengthen each other with regards to attracting and developing talent.
Strategic diversification
SHV has a wide range of businesses in various geographies. Nutreco provides an interesting strategic diversification for SHV into food-related markets, provides for a good growth platform in emerging markets, has a strong and reputable management and a leading position in niche markets.
Governance
Nutreco and SHV have agreed that following Settlement of the Offer, the supervisory board of Nutreco (the "Supervisory Board") will comprise of five members of which Mr Stephan Nanninga, Mr Boudewijn Beerkens and Mr Wouter van der Woerd are designated by SHV and Mr Piero Overmars and Mr Jaap Vink will continue as members of the Supervisory Board. These two Supervisory Board members will be independent as meant in the Dutch Corporate Governance Code and will have certain veto rights. It is intended that Mr Overmars will act as the chairman of the Supervisory Board following Settlement. There will be no changes to the executive board of Nutreco (the "Executive Board") upon Settlement of the Offer.
Non-Financial Covenants
Nutreco has obtained from SHV certain important Non-Financial Covenants with regard to the business strategy, M&A strategy, structure and governance, financing, holding costs, minority Shareholders, employment and other matters, including:
SHV supports Nutreco's sustainable growth strategy, including investments;
SHV supports Nutreco in pursuing acquisitions;
Nutreco, together with its subsidiaries, will have its own operating and reporting structure within SHV's group of activities;
Nutreco's headquarters, central management and key support functions will remain in the Netherlands;
Nutreco will retain its corporate identity, values and culture. Nutreco's mission shall continue to be 'Feeding the Future';
SHV shall not break up Nutreco's group or its business units;
SHV respects all existing rights and benefits of the Nutreco employees;
Nutreco's group shall remain prudently financed, including the arrangement that no acquisition debt will be levied at Nutreco and that the refinancing (if any) of any existing debt of Nutreco shall be at the same or more attractive terms than currently in place.
The Non-Financial Covenants mentioned above have not been amended since SHV and Nutreco entered into the Merger Agreement on 19 October 2014.
Decision-making and unanimous recommendation from the Executive Board and the Supervisory Board
Taking into account all of the relevant factors, the Executive Board and Supervisory Board have unanimously determined that the benefits for the Shareholders and all other stakeholders in Nutreco that arise from the Offer outweigh the benefits of any possible alternative currently available to Nutreco.
The Boards have received extensive legal and financial advice and given due and careful consideration to the strategic, financial and social aspects and consequences of the proposed transaction (as described in its Position Statement, published on 5 December 2014).
The Boards have also received a fairness opinion from ING Corporate Finance and the Supervisory Board has received a fairness opinion from Leonardo & Co. Both ING Corporate Finance and Leonardo & Co. have opined that the Initial Offer announced on 20 October 2014 is fair to the Shareholders from a financial point of view. Further reference is made to the fairness opinions, which are included in the Position Statement.
With reference to the Position Statement, the Boards fully support and unanimously recommend the Offer to the Shareholders of Nutreco for acceptance. Each member of the Executive Board has irrevocably undertaken to tender under the Offer any unrestricted Shares which such member directly or indirectly holds, subject to the Executive Board continuing to support and recommend the Offer.
Extraordinary general meeting of Shareholders of Nutreco
In accordance with Article 18, paragraph 1 of the Decree on Public Takeover Bids (Besluit openbare biedingen Wft) (the "Decree"), Nutreco shall convene an extraordinary general meeting of shareholders (the "EGM") to discuss the Offer. The EGM shall be held at De Flint, Coninckstraat 60 in Amersfoort, the Netherlands on 9 February 2015, 14:30 hours CET.
Nutreco has also agreed with SHV that the Shareholders shall be requested at the EGM to vote, subject to Settlement and effective as per the Settlement Date, on certain resolutions.
A position statement providing further information to the Shareholders as required pursuant to Article 18, paragraph 2 of the Decree (the "Position Statement"), including the agenda for the EGM (and explanatory notes thereto), is made available by Nutreco as of today.
Nutreco expects to make its full year results 2014 available to the Shareholders on its website on 5 February 2015 before market trading commences on Euronext Amsterdam.
Notification of the Social Economic Council
The secretariat of the Social Economic Council (Sociaal Economische Raad) has been notified in writing of the Offer in accordance with the Merger Code (SER-besluit Fusiegedragsregels 2000).
No works council advice is required in connection with the Offer. Nevertheless, the European Information and Consultation Council of Nutreco and Nutreco's Dutch Central Works Council have informally indicated their full support for the Offer, which support is, in particular, based on the Non-Financial Covenants as agreed with SHV.
Offer Period (aanmeldingstermijn)
The offer period will commence at 09:00 hours CET on 10 December 2014 and will expire at 17:40 hours CET on 17 February 2015 (such date, the "Closing Date" and such period, the "Offer Period"), unless the Offer Period is extended, in which case the Closing Date shall be the date on which the extended Offer Period expires.
Shares tendered on or prior to the Closing Date may not be withdrawn, subject to the right of withdrawal of any tender of Shares during the Offer Period in accordance with the provisions of Article 5b, paragraph 5, Article 15, paragraphs 3 and 8 and Article 15a paragraph 3 of the Decree. In case of extension of the Offer Period, any Shares previously tendered and not withdrawn will remain subject to the Offer.
Acceptance by Shareholders
Shareholders who hold their Shares through an Admitted Institution are requested to make their acceptance known through their custodian, bank or stockbroker no later than 17:40 hours CET on the Closing Date, unless the Offer Period is extended in accordance with Section 5.7 of the Offer Memorandum. The custodian, bank or stockbroker may set an earlier deadline for communication by Shareholders in order to permit the custodian, bank or stockbroker to communicate its acceptances to ABN AMRO Bank N.V. (the "Paying and Exchange Agent") in a timely manner.
Admitted Institutions may tender Shares for acceptance only to the Paying and Exchange Agent and only in writing. In submitting the acceptance, Admitted Institutions are required to declare that (i) they have the Tendered Shares in their administration, (ii) each Shareholder who accepts the Offer irrevocably represents and warrants that the Tendered Shares are being tendered in compliance with the restrictions set out in Sections 2 (Restrictions) and 3 (Important Information) of the Offer Memorandum and (iii) they undertake to transfer these Tendered Shares to the Offeror prior to or ultimately on the Settlement Date, provided that the Offer has been declared unconditional (gestand is gedaan).
Declaring the Offer unconditional (gestanddoening)
The Offer will be subject to the satisfaction of the offer conditions set out in Section 6.7(a) (Offer Conditions) of the Offer Memorandum (the "Offer Conditions"). The Offer Conditions may be waived as set out in Section 6.7(b) (Waiver) of the Offer Memorandum.
The Offer Conditions set out in Section 6.7(a) of the Offer Memorandum include a 95% acceptance condition. The Offeror may waive the 95% acceptance condition to 66 2/3% at any time without the approval of the Boards.
No later than on the third (3rd) Business Day following the Closing Date, such date being the "Unconditional Date", the Offeror will determine whether the Offer Conditions have been satisfied or are to be waived. In addition, the Offeror will announce on such date, in accordance with Article 16 of the Decree whether (i) the Offer has been declared unconditional (gestand is gedaan), (ii) the Offer will be extended in accordance with Article 15 of the Decree or (iii) the Offer is terminated, as a result of the Offer Conditions not having been satisfied or waived in accordance with Sections 6.7(b) (Waiver) and 6.7(c) (Satisfaction) of the Offer Memorandum.
Extension
If one or more of the Offer Conditions is not satisfied by the Closing Date or waived in accordance with Section 6.7(b) (Waiver) or 6.7(c) (Satisfaction) of the Offer Memorandum, the Offeror may, in accordance with Article 15, paragraph 1 and paragraph 2 of the Decree, extend the Offer Period at its discretion for a minimum period of two (2) weeks and a maximum period of ten (10) weeks in order to have such Offer Conditions satisfied or waived.
Extension of the Offer Period may in any event occur once (extension for more than one period is subject to clearance of the AFM, which will only be given in exceptional circumstances). In case of such extension all references in the Offer Memorandum to 17:40 hours CET on the Closing Date shall, unless the context requires otherwise, be changed to the latest date and time to which the Offer Period has been so extended.
If the Offer Period is extended, so that the obligation pursuant to Article 16 of the Decree to announce whether the Offer is declared unconditional (gestand wordt gedaan) is postponed, a public announcement to that effect will be made ultimately on the third (3rd) Business Day following the Closing Date in accordance with the provisions of Article 15, paragraph 1 and paragraph 2 of the Decree. If the Offeror extends the Offer Period, the Offer will expire on the latest time and date to which the Offeror extends the Offer Period.
During an extension of the Offer Period, any Shares previously tendered and not withdrawn will remain subject to the Offer, subject to the right of each Shareholder to withdraw the Shares he or she has already tendered in accordance with Article 15, paragraph 3 of the Decree and subject to any withdrawal rights available pursuant to Article 5b, paragraph 5, Article 15, paragraph 8 and Article 15a, paragraph 3 of the Decree.
Settlement
In the event that the Offeror announces that the Offer is declared unconditional (gestand wordt gedaan), Shareholders who have tendered and transferred (geleverd) their Shares for acceptance pursuant to the Offer on or prior to the Closing Date will within five (5) Business Days following the Closing Date receive the Offer Price in respect of each Tendered Share (the "Settlement Date"), at which point dissolution or annulment of a Shareholder's tender or transfer (levering) shall not be permitted.
Liquidity, delisting and post-closing restructuring measures
The purchase of Shares by the Offeror pursuant to and outside the Offer, among other things, will reduce the number of Shareholders and the number of Shares that might otherwise trade publicly.
In the event that the Offeror acquires 95% or more of the Shares, the Offeror intends to take steps to terminate the listing of the Shares on Euronext Amsterdam as soon as possible. This may adversely affect the liquidity and market value of any (listed) Shares not tendered.
If, following the Settlement Date, the Offeror holds at least 95% of the Shares, the Offeror will commence a compulsory acquisition procedure (uitkoopprocedure) or takeover buy-out procedure (uitstotingsprocedure) to buy out the holders of Shares that have not tendered their Shares under the Offer. If, after expiration of the post-closing acceptance period, the Offeror holds less than 95% of the Shares, the Offeror is likely to propose to effect certain other post-closing restructuring measures as set out in the Offer Memorandum for the purpose of achieving an optimal operational, legal, financial and/or fiscal structure. In effectuating any post-closing restructuring measure, due consideration will be given to the interests of minority Shareholders of Nutreco. The most likely post-closing restructuring measures are (i) a legal (triangular) merger (juridische (driehoeks-)fusie) between Nutreco, the Offeror and/or one or more affiliates of the Offeror, and (ii) a sale by Nutreco of all its assets and liabilities to the Offeror or an affiliate. The implementation of any post-closing restructuring measure shall be subject to the approval of the Supervisory Board, including the affirmative vote of the two independent supervisory board members.
Reference is made to Section 6.13(c) of the Offer Memorandum which sets out the most likely post-closing restructuring measures in detail.
Announcements
Any further announcements in relation to the Offer will be issued by press release. Subject to any applicable requirements of the applicable rules and without limiting the manner in which the Offeror may choose to make any public announcement, the Offeror will have no obligation to communicate any public announcement other than as described above.
Offer Memorandum, Position Statement and further information
The Offeror is making the Offer on the terms and subject to the conditions and restrictions contained in the Offer Memorandum, dated 5 December 2014, which is available as of today. In addition, as of today, Nutreco makes available the Position Statement, containing the information required by Article 18, paragraph 2 and Annex G of the Decree in connection with the Offer.
This announcement contains selected, condensed information regarding the Offer and does not replace the Offer Memorandum and/or the Position Statement. The information in this announcement is not complete and additional information is contained in the Offer Memorandum and the Position Statement.
Shareholders are advised to review the Offer Memorandum and the Position Statement in detail and to seek independent advice where appropriate in order to reach a reasoned judgment in respect of the Offer and the content of the Offer Memorandum and the Position Statement. In addition, Shareholders may wish to consult with their tax advisors regarding the tax consequences of tendering their Shares under the Offer.
A digital copy of the Offer Memorandum is available on the websites of Nutreco (www.nutreco.com) and SHV (www.shv.nl). Copies of the Offer Memorandum are also available free of charge at the offices of Nutreco, SHV and the Paying and Exchange Agent, who distributes the Offer Memorandum on behalf of the Offeror, at the addresses mentioned below. The Nutreco and SHV websites do not constitute a part of, and are not incorporated by reference into, the Offer Memorandum. A digital copy of the Position Statement is available on the website of Nutreco (www.nutreco.com).
The Paying and Exchange Agent
ABN AMRO Bank N.V.
Corporate Broking Department HQ7050
Gustav Mahlerlaan 10,
1082 PP Amsterdam
Letter to shareholders regarding the recommended cash offer by SHV for all outstanding ordinary Nutreco shares
Dear Nutreco shareholder,
It is our pleasure to provide you with further information on SHV's recommended cash offer for Nutreco at an offer price of € 44.50 (cum dividend) per ordinary share. Today we are publishing our Position Statement and SHV its Offer Memorandum.
By means of the Position Statement we would like to provide you with more insight into the support for the SHV offer, the process the Executive Board and the Supervisory Board of Nutreco have followed, including the key events that have occurred, the financial and strategic merits and the reasoned opinion of our Boards in recommending the SHV offer. This letter highlights some aspects of our Position Statement. The Boards strongly encourage shareholders to read the Position Statement and the Offer Memorandum carefully.
Benefits for shareholders and other stakeholders
The offer price of € 44.50 per share represents a premium of 58% to the closing price on Friday 17 October 2014. This premium compares favourably against the median premium of around 31% for similar Dutch transactions. In addition, the offer price implies an EV/EBITDA multiple of 10.6 (Last Twelve Months ending 30 September 2014). Furthermore, the offer by SHV has a high deal certainty, because SHV has the cash available from its own financial resources and no anti-trust issues are expected. The transaction process with SHV as a committed bidder enables us to be swift and efficient.
SHV fully supports Nutreco in executing its existing "Driving sustainable growth" strategy including geographical expansion. SHV welcomes Nutreco's focus on innovation and R&D, to fuel this strategy. SHV is committed to fund Nutreco's investment needs for capital expenditures and acquisitions. Both parties have agreed that Nutreco shall remain prudently financed.
Nutreco's corporate identity, values and culture will be maintained. Operating as a separate group within SHV, Nutreco's headquarters, central management and key support functions remain in the Netherlands. In addition, SHV has agreed to respect all existing employee rights. Nutreco's works councils support the offer by SHV.
Thorough process
The Nutreco Boards followed a thorough process since the initial, unsolicited, SHV proposal of 19 September 2014. This proposal was serious, concrete and precise. In the following weeks, both Boards entered into an intensive process with senior management and advisors to appropriately assess, analyse and evaluate the proposal against the current stand-alone position of Nutreco, alternative options as well as the impact on stakeholders. We intensively negotiated the key terms of the possible transaction with SHV in a timeframe of approximately three weeks, also to prevent public leaks. SHV was allowed to conduct a high-level due diligence during which no price sensitive or forward looking information was provided. Further negotiations led to a Merger Agreement and the recommended offer to shareholders on Monday 20 October 2014.
After this announcement Nutreco was approached by Cargill, Incorporated ("Cargill"). In the first contacts on 2 November 2014, Cargill confirmed that it was not sufficiently advanced in its analysis and that it was not yet possible for Cargill to provide a clear proposal. On 8 November 2014, Cargill expressed an interest in pursuing a cash offer through a structured transaction with private equity firm Permira, which Cargill said it was still exploring. Cargill's letter did not include a non-binding offer.
In accordance with its obligations under the Merger Agreement, Nutreco notified SHV of Cargill's expression of interest shortly after receipt of Cargill's draft letter. SHV decided to raise its bid to at least € 43.20 to match the price mentioned in Cargill's expression of interest. After further negotiations with Nutreco's Boards, SHV raised its bid to € 44.50 (cum dividend) in cash per ordinary share. The Boards retained the flexibility to recommend any offer exceeding SHV's offer price by at least 8% and including similar non-financial covenants. The increased SHV offer was announced on Monday 10 November 2014.
As stated in its press release of 26 November 2014, Nutreco understood from Cargill that they are still evaluating the situation.
Recommendation
The starting point of the Boards during the whole process has been to maximize value for its shareholders while safeguarding the interests of the stakeholders involved. The complete package of the SHV offer is compelling to the shareholders, employees and other stakeholders of Nutreco. It represents an attractive price and provides high deal certainty for shareholders. For this reason, Nutreco's Executive Board and Supervisory Board both fully support and unanimously recommend it for acceptance by Nutreco shareholders.
EGM
An Extraordinary General Meeting of Shareholders ("EGM") to discuss the SHV offer and our Position Statement will be held at De Flint in Amersfoort at 14.30 hours, CET, on 9 February 2015. Instructions will be included in the EGM announcement and can be found on our website: http://www.nutreco.com/en/About-us/Corporate-Governance.
We look forward to discussing the offer with you at the EGM
