Akzo Nobel N.V. (AKZA; AKZOY) has today made a comprehensive non-binding proposal to acquire Tikkurila. The proposed combination of AkzoNobel and Tikkurila would create a strong platform for future growth, better able to serve customers with more innovative and sustainable solutions, building on a shared European heritage.
The proposal includes an all-cash public offer for all issued and outstanding shares of Tikkurila at an offer price of €31.25 per share (“potential offer”) and total equity value of around €1.4 billion. This represents a premium of 113% to Tikkurila’s volume weighted average share price for the undisturbed three-month period ending December 17, 2020 and is 13% higher than the current offer made on January 5, 2021.
Thierry Vanlancker, AkzoNobel CEO, commented: “The natural combination of AkzoNobel and Tikkurila would build on centuries of industry experience and a shared European heritage to create significant value for customers, employees, shareholders and other stakeholders. Bringing together our premium brands and leading portfolios would provide customers with a wider range of innovative products and services, including the most sustainable paints and coatings solutions.”
To obtain merger clearance and ensure deal certainty for Tikkurila and its shareholders, AkzoNobel has agreed with Hempel key terms for the sale of assets, including the decorative paints business of AkzoNobel in the Nordics and the Baltics, to be completed after closing of AkzoNobel's proposed public offer for Tikkurila.
The Nordic culture and strong presence of Tikkurila in Finland would be reflected in the future organization. The main offices and production facilities of Tikkurila in Finland would become the vital hub for the combined business in the Baltic Sea region and substantial investment would be made in production facilities to supply future growth. Employees and management would benefit from new and exciting career and professional development opportunities, in Finland and the wider organization.
AkzoNobel and Tikkurila have a common approach to sustainability – it’s embedded in the way we operate – and AkzoNobel is widely recognized as the leader in the paints and coatings industry. Joining forces would build on the sustainable purpose of Tikkurila and continue to make a difference for all stakeholders, including local communities.
Thierry Vanlancker continued: “Our complementary geographic profiles would create superior value compared to any other combination, including growth opportunities for the company and its employees. Our collective procurement capabilities, expanded production, and combined sales and distribution channels would deliver substantial value creation. AkzoNobel and Tikkurila would have an exciting and sustainable future together, continuing the recent positive momentum and performance improvement, as a global frontrunner in the industry.”
The transaction is expected to be EPS accretive in 2022, is aligned with the capital allocation priorities of AkzoNobel, and will be financed using existing cash and credit lines. AkzoNobel will continue its current €300 million share buyback program and maintains a target leverage ratio of 1-2x net debt/EBITDA.
AkzoNobel invites the Board of Directors of Tikkurila to enter into negotiations with a view to reaching agreement on a recommended voluntary public cash tender offer.
Implied premia of the potential offer:
· 108% premium compared to the closing price of Tikkurila share on December 17, 2020, the last trading day prior to Tikkurila announcement regarding the tender offer
· 113% premium compared to the volume-weighted average trading price of Tikkurila share during the three-month period prior to December 17, 2020
· 122% premium compared to the volume-weighted average trading price of Tikkurila share during the 12-month period prior to December 17, 2020
On January 18, 2021, AkzoNobel will host a conference call for media at 09:00 CET and for investors and analysts at 10:00 CET.
Participant dial-in numbers:
Finland: +358 981710310
Sweden: +46 856642651
United Kingdom: +44 3333000804
United States: +1 6319131422
Netherlands: +31 207095189
Media (9:00 CET) PIN: 22805884#
Investors and analysts (10:00 CET) PIN: 12011347#
Please register or join the call 5-10 minutes prior to the start of the event. By registering for the event or joining the call participants agree to the collection of information, such as participant name and company name. The conference call will be recorded.
AkzoNobel is being advised by HSBC and J.P. Morgan as financial advisers and De Brauw Blackstone Westbroek and Roschier, Attorneys Ltd. as legal advisers.
Key terms for launch and completion of the potential offer
The final decision to make the potential offer to Tikkurila shareholders is subject to certain conditions, including: 1) the Board of Directors of Tikkurila entering into negotiations with AkzoNobel, 2) customary due diligence on Tikkurila, 3) entering into a combination agreement between AkzoNobel and Tikkurila, 4) the Board of Directors of Tikkurila recommending to the shareholders of Tikkurila that they accept the tender offer of AkzoNobel, 5) obtaining an irrevocable undertaking from Oras Invest Oy to accept the potential offer and 6) final approval by the Supervisory Board of AkzoNobel.
The potential offer would be made pursuant to an offer document to be approved by the Finnish Financial Supervisory Authority (the “offer document”). The offer document would include all terms and conditions of the potential offer. The potential offer would only be accepted on the basis of the offer document.
The announcement of the potential offer, if any, depends on the time taken for the Board of Directors of Tikkurila to respond to this proposal and for negotiations to be concluded in relation to this transaction. If negotiations advance quickly, a potential offer could be announced in February and the transaction completed as soon as possible in 2021.
The completion of the potential offer, if announced, would be subject to customary conditions substantially similar to those included in the current tender offer document, dated January 14, 2021, such as reaching a 90% acceptance level and obtaining required regulatory approvals, and would not be conditional on financing. AkzoNobel would reserve the right, at its sole discretion, to waive any of the conditions for completion of the potential offer.
Shareholders are advised there can be no certainty that this proposal will eventually lead to any agreement between AkzoNobel and Tikkurila, the making of an offer to Tikkurila shareholders, or the timing and terms of any such agreement or offer. The terms of the potential offer, if announced, may differ from the terms set out in the proposal and this announcement.
AkzoNobel is aware, based on public information, that the combination agreement amended on January 5, 2021, includes procedures allowing the offeror to negotiate should the Board of Directors of Tikkurila contemplate effecting a change of its recommendation.
AkzoNobel reserves the right to acquire shares of Tikkurila prior to announcing a potential offer in public trading or otherwise. At the date of this announcement, AkzoNobel does not hold any shares of Tikkurila.