Metro International: Statement by the Independent Committee of the Board of Directors of Metro International S.A. in relation to the public takeover offer by Investment AB Kinnevik

The Independent Committee[1] of the Board of Directors of Metro International S.A. (“Metro”) unanimously recommends the shareholders and the warrant holders to accept the public offer made by Investment AB Kinnevik (“Kinnevik”).

Background

This statement is made by the Independent Committee of the Board of Directors (the “Committee”) of Metro pursuant to section II.19 of the NASDAQ OMX Stockholm’s Rules concerning Bids on the Stock Market (the “Takeover Rules”).

Kinnevik has today announced a public all cash offer, through the wholly-owned subsidiary Kinnevik Media Holding AB, to acquire (either directly or in the form of Swedish depository receipts) all outstanding shares in Metro at a price of SEK 0.90 per series A share, SEK 0.94 per series B share, all outstanding warrants issued by Metro at a price of SEK 0.50 per warrant and all outstanding debentures issued by Metro at a price of SEK 0.425 per debenture (the “Offer”).[2] The total offer value (excluding Kinnevik’s holdings) for all shares and warrants issued by Metro amounts to approximately SEK 560.0 million, and approximately SEK 815.7 million including debentures. The Offer values Metro at approximately SEK 1,145.5 million.[3]

According to the indicative timetable set out in the press release through which the Offer was announced (the “Offer Announcement”), the acceptance period for the Offer is expected to commence on 22 February 2012 and end on 20 March 2012. Settlement is expected to occur on 29 March 2012.

Kinnevik is Metro’s main shareholder, warrant holder and debenture holder, with a holding of 112,122,875 shares of series A and 133,798,591 shares of series B (in total 46.6 per cent of the shares), 717,715,821 warrants and 717,715,821 debentures (in total 54.4 per cent of the warrants and debentures respectively).

For further information about the Offer, reference is made to the Offer Announcement, which was made public earlier today.

As part of the Committee’s evaluation of the Offer, the Committee has engaged Carnegie Investment Bank AB (“Carnegie”) as financial advisor and Advokatfirman Cederquist as Swedish legal advisor.

The Committee’s recommendation

The Committee’s statement is based on an assessment of a number of factors that the Committee has considered relevant to the evaluation of the Offer. These factors include, but are not limited to, Metro’s current position, the expected future development of Metro and possibilities and risks related thereto.

The Offer is not conditional upon Kinnevik achieving any given level of acceptance. In terms of applicable squeeze-out rules, the Committee shares the view expressed by Kinnevik in the Offer Announcement that there are currently no rules under Luxembourg law or otherwise that provides for any squeeze-out rights in relation to, or available for, any remaining minority shareholders and warrant holders in Metro following the Offer.

The Committee has noted that the offered price for the shares represents a premium of approximately 46 per cent for the series A shares and approximately 47 per cent for the series B shares compared to Metro’s volume-weighted average share prices on NASDAQ OMX Stockholm during the last three months up to and including 3 February 2012, which were approximately SEK 0.62 for the series A share and approximately SEK 0.64 for the series B share. Compared to the closing prices on NASDAQ OMX Stockholm on 3 February 2012 (the last trading day before the announcement of the Offer), such closing prices being SEK 0.75 for the series A share and SEK 0.78 for the series B share, the offered price for the shares represents a premium of approximately 20 per cent for the series A shares and approximately 21 per cent for the series B shares.

The offered price for the shares represents a premium of approximately 41 per cent for the series A share and approximately 49 per cent of the series B share compared to the last closing prices at NASDAQ OMX Stockholm on 2 February 2012, such closing prices being SEK 0.64 for the series A share and SEK 0.63 for the series B share.[4]

The offered price for the warrants represents a premium of approximately 106 per cent compared to Metro’s volume-weighted average price for the warrants on NASDAQ OMX Stockholm during the last three months up to and including 3 February 2012, of approximately SEK 0.24 per warrant. Compared to the last closing price on NASDAQ OMX Stockholm on 3 February 2012, being the last day of trading prior to the announcement of the Offer, of SEK 0.33 per warrant, the offered price represents a premium of approximately 52 per cent per warrant. Compared to the last closing price on NASDAQ OMX Stockholm on 2 February 2012, of SEK 0.28 per warrant, the offered price represents a premium of approximately 79 per cent per warrant.

Whilst the Committee has no obligation under the Takeover Rules to evaluate the offer to the debenture holders of Metro, the Committee has noted that the offered price of SEK 0.425 per debenture correspond to 85.0 per cent of the nominal value and that Kinnevik has stated (i) that the last closing price of the debentures on NASDAQ OMX Stockholm of SEK 0.4175 on 3 February 2012, being the last day of trading prior to the announcement of the Offer, corresponds to approximately 83.5 per cent of the nominal value and (ii) that if the debentures would be redeemed by Metro in accordance with the terms and conditions for early redemption, the redemption holder would receive approximately 75 per cent of the nominal value.

Carnegie has issued a fairness opinion to the Committee stating that the offer to the holders of series A shares and series B shares, as well as to the holders of warrants, is deemed fair from a financial point of view for the shareholders and warrant holders. Carnegie’s fairness opinion is attached to this press release.

Pursuant to the Takeover Rules, the Committee must, based on what Kinnevik has expressed in its Offer Announcement, express its views on (i) the impact that completion of the Offer will have on Metro, particularly in terms of employment, and (ii) Kinnevik’s strategic plans for Metro, and the impact these could be expected to have on employment and Metro’s business locations. In the Offer Announcement, Kinnevik has expressed that Kinnevik greatly values the work carried out by Metro’s employees and does currently not foresee that the implementation of the Offer or Kinnevik’s strategic plans will cause any changes for the employment and operations on sites where Metro currently conducts business. Further, Kinnevik does not foresee any material changes to the employees and management or their terms of employment. The Committee assumes that these statements in the Offer Announcement are correct and has no reason to take a different view.

On the basis of the above, the Committee unanimously recommends Metro’s shareholders and warrant holders to accept the Offer made by Kinnevik.

This statement sha
ll in all respects be governed by and construed in accordance with Swedish law. Any dispute arising out of or in connection with this statement shall be settled exclusively by Swedish courts.

Stockholm, 6 February 2012

METRO INTERNATIONAL S.A.

The Independent Committee of the Board of Directors


[1] At an extraordinary Board meeting in January 2012, the Board of Directors decided to establish an independent committee, consisting of Patrick Ståhle, Nigel Cooper, Michelle Guthrie, Didier Breton and Mario Queiroz to evaluate the offer presented by Kinnevik and handle matters related to the offer. As a result, in the decision to recommend the shareholders and warrant holders to accept the offer presented by Kinnevik, the three board members that are affiliated with Kinnevik, namely Mia Brunell Livfors, Cristina Stenbeck and Erik Mitteregger, have not participated due to their conflict of interest.

[2] Metro is incorporated under the laws of Luxembourg and has issued shares of series A and series B. The shares are listed on NASDAQ OMX Stockholm through Swedish depository receipts. The series A shares are ordinary shares with one vote per share. The series B shares hold no voting rights, except in relation to certain matters as set out in Luxembourg company law, but are entitled to preferential rights to the reimbursement of their contribution should Metro be dissolved as well as preference on dividends. According to the articles of association of Metro, the holders of series B shares shall be entitled to the greater of (i) a cumulative preferred dividend corresponding to 0.5% of the accounting par value of the series B shares in Metro and (ii) 2% of the overall dividend distributions made in a given year. The debentures and warrants are listed on NASDAQ OMX Stockholm through Swedish depository receipts. The warrants are exercisable into series A shares at an exercise price of SEK 0.40 if the holders of such depository receipts give notice thereof during the period 28 October to 22 November 2013.

[3] Based on the total number of outstanding shares and warrants issued by Metro.

[4] Metro announced its year-end report for 2011 on the morning of February 2, 2012. In the afternoon, on February 3, 2012 at 4.35 p.m. CET, NASDAQ OMX suspended trading in Metro’s shares, warrants and debentures.

For further information please visit www.metro.lu or contact:

Patrick Ståhle Chairman of the Independent Committee Tel: +46 73 620 80 40

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ABOUT METRO INTERNATIONAL AND METRO

Metro is the largest international newspaper in the world. Metro is published in over 100 major cities in 22 countries across Europe, North & South America and Asia. Metro has a unique global reach – attracting a young, active, well-educated Metropolitan audience of over 17 million daily readers. 

Metro International S.A. shares are listed on Nasdaq OMX Stockholm through Swedish Depository Receipts of series A and series B under the symbols MTROA and MTROB.

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