M&A Activity • Sep 20, 2011
M&A Activity
Open in ViewerOpens in native device viewer
BNP Par Roth ribas hschild & Cie Corpor e Banque Crédit Agr rate and Inve ricole estment Bank S k H Société Géné HSBC France érale e
M Maximum n Terms number to s of the Off be purchas Bo fer: €30 per sed in conn ouygues sha r Bouygues nection with ares s share h the Offer r: 41,666,66 66
Dur ration of th he Offer: [2 21] calenda r days ([16 ] trading d days)
This and 2 Auth press release 231-17 of the hority, or "AM e, prepared by General Regu MF"). y Bouygues, i ulation of the A is published p Autorité des m pursuant to th marchés finan he provisions nciers (French of Articles 23 h Financial Ma 31-16 arkets
Purs R 22 of a publ Shar notic uant to the pr 25-154 of the press release, lic buyback o reholders conv ce in a journal ovisions of A French Comm , indicating th offer has been vened on 10 l of legal notic rticles 231-32 mercial Code, hat the resolut n validly adop October 201 ces and in the 2 of the Gener the Offer sha tion relating to pted by the E 1, and after t BALO (the F ral Regulation all be open aft o the reductio Extraordinary the publicati French Officia of the AMF a fter the publica on of the share General Mee on by Bouyg al Journal of L and R 225-15 ation by Bouy e capital throu eting of Bouy gues of a pur Legal Notices) 3 and ygues ugh a ygues chase .
The d Bouyg draft offer do gues (www.bo ocument is av ouygues.com), vailable on t , and may be o the websites obtained free of the AMF of charge from (www.amf-f m: france.org) an nd of
After having approved the principle of the transaction on 30 August 2011, the Board of Directors of Bouygues, a French société anonyme with a share capital of €356,307,709, the registered office of which is located at 32, avenue Hoche – 75008 Paris, France and which is registered under number 572 015 246 on the Paris Trade & Companies Register (hereinafter "Bouygues" or the "Company"), decided at its meeting held on 20 September 2011 to implement a public buyback offer over the shares of the Company (hereinafter the "Offer") in view of their cancellation, pursuant to Articles L.225-204 and L.225-207 of the French Commercial Code. The Company's shares are listed on Euronext Paris (Compartment A) under ISIN code FR0000120503.
This Offer is implemented pursuant to the provisions of Title III of Book II and more specifically pursuant to Article 233-1(5) et seq. of the General Regulation of the AMF, subject to the approval by the Extraordinary General Meeting of Bouygues shareholders convened on 10 October 2011, of the resolution relating to the reduction of the share capital for a maximal amount of €41,666,666 through a public buyback offer concerning a maximum of 41,666,666 shares each having a par value of €1.
A maximum of 41,666,666 shares may be repurchased through the Offer which is made at the price of €30 per Bouygues share.
Pursuant to the provisions of Article 231-13 of the General Regulation of the AMF, among the presenting banks acting on behalf of Bouygues, only BNP Paribas, Crédit Agricole Corporate and Investment Bank, HSBC France and Société Générale shall guarantee the content and the irrevocable nature of the undertakings of the Company in connection with the Offer.
In response to the recent massive fall in its share price amid heavy trading volumes resulting from unfavourable market conditions experienced since August 2011, Bouygues is offering a liquidity opportunity to those shareholders who wish to take it allowing them to obtain a 29% premium to the one-month average share price prior to the announcement of the Offer and a 30% premium over the closing price of 30 August 2011 (market day preceding the announce of the Offer).
The Offer also protects the interests of shareholders who wish to remain invested in Bouygues on a longer term basis, as it is expected to have a strongly accretive impact on earnings per share (approximately 11% on EPS1 assuming 100% of the targeted shares being actually repurchased).
The group has a solid balance sheet structure and follows a prudent financial management policy. In the event of a 100% of the targeted shares being actually repurchased, Bouygues' proforma net debt as of 31 December 2010 would be €3.7 billion, compared with proforma shareholders' equity of €9.3 billion as of the same date. The proforma net debt/EBITDA ratio would therefore be 1.1x as of 31 December 2010. Consequently, the company's financial structure would be preserved.
1 2011 earnings per share calculated on the FactSet consensus basis of net income attributable to the group, lowered by the impact of the post-tax financial costs incurred in connection with the transaction on a full year basis.
Furthermore, the contemplated transaction does not affect the development perspectives of the Bouygues Group insofar as its self-financing capacity covers the fluctuations in its working capital requirement as well as its investments, according to the Company's forecasts.
Bouygues intends to pursue its activities in accordance with its current strategy, while closely monitoring opportunities and changes required by the global economic context.
There will be no changes in the composition of the corporate and management bodies of Bouygues as a result of the implementation of the Offer. There will be no consequence on the employment situation.
The Company does not intend to amend its Articles of Association further to the Offer, with the exception of any changes required in order to reflect the consequences of the implementation of the Offer.
The Company does not intend to request the delisting of Bouygues shares from Euronext Paris after the Offer.
The implementation of the Offer will not affect the dividends' policy of the Company, which will be continued in a pragmatic manner.
As this is a public buyback offer, the Offer is not part of a plan to merge Bouygues with other companies. Consequently, no synergies or financial gains will be made.
Subject to approval by the Extraordinary General Meeting of Bouygues shareholders of the resolution mentioned above, a maximum of 41,666,666 shares may be repurchased with a view to their subsequent cancellation, pursuant to Articles L. 225-204 and L. 225-207 of the French Commercial Code. The shares would be bought at a price of €30 per share.
The Company will announce on 10 October 2011 after its Extraordinary General Meeting, whether the above mention resolution has been approved or not. A financial notice will also be published for this respect in the daily newspaper Les Echos on 12 October 2011 and will be posted on the Company's website (http://www.bouygues.com).
| Price per share (€) | Premium inducted by the Offer price (€30.0 per share) |
||||
|---|---|---|---|---|---|
| Share price on 30 august 2011 |
€ 23.09 | +30% | |||
| Average share price 1 month |
€ 23.20 | +29% | |||
| Average share price 3 months |
€ 26.56 | +13% | |||
| Average share price 6 months | € 29.54 | +2% | |||
| Average share price 12 months |
€ 31.04 | -3% | |||
| Lowest share price over the last 12 months |
€ 20.88 | +44% | |||
| Highest share price over the last 12 months |
€ 35.05 | -14% | |||
| Intrinsic « Sum-of-the parts » |
€ 28.4 - € 34.6 | +6% - -13% | |||
| Market « Sum-of-the parts » |
€ 27.2 - € 31.0 | +10% - -3% |
The following table summarizes the valorizations exteriorized by the selected evaluation criteria together with the premium inducted by the Offer price.
SCDM, a company controlled by Messrs. Martin and Olivier Bouygues, which currently holds 66,374,020 shares of the Company representing 18.63% of Bouygues' share capital and 27.53% of its voting rights, announced that it will not tender any of its shares to the Offer.
"6. Summary of our work
With the completion of our work, the price offered in the context of the Offer, i.e., 30 euros per Bouygues share, comprises the following premiums and discounts relating to the values resulting from the valuation methods we deemed relevant:
| Ricol, Lasteyrie | € | Premium/(discount) at 30 € |
Presenting banks | € | Premium/(discount) at 30 € |
||||
|---|---|---|---|---|---|---|---|---|---|
| low | high | low | high | low | high | low | high | ||
| Principal methods applied | Valuation criteria applied | ||||||||
| Share price | 23.1 | 29.6 | 29.9% | 1.4% | Stock price | 23.1 | 26.6 | 29.9% | 12.8% |
| Sum of DCF shares | 32.4 | 35.2 | (7.3%) (14.7%) Sum of DCF shares | 28.5 | 34.7 | 5.3% | (13.5%) | ||
| Sum of market shares | 25.9 | 31.0 | 15.8% | (3.3%) Sum of market shares | 27.3 | 31.1 | 9.9% | (3.5%) | |
| Other methods applied | |||||||||
| Global DCF | 31.9 | 34.6 | (5.8%) (13.2%) | ||||||
| Transactions involving Bouygues shares | 27.2 | 32.8 | 10.3% | (8.5%) |
Our report was prepared in the context of a public share buyback offer, for which the Company purchasing its shares has appointed us independent appraiser pursuant to Article 261-3 of the AMF General Regulations.
SCDM, the company controlled by Messrs. Martin and Olivier Bouygues, informed the Company of its commitment not to contribute its shares to the Offer.
Upon completion of our work, we noted that the price of 30 euros per Bouygues share offered in the context of this Offer comprises:
Regarding a Company buy-back offer of its own shares, the fairness of the offered price must be assessed with regard to the shareholders' situation, whether or not they contribute their shares to the Offer. In this specific case, the Offer targets a maximum of 41.6 million shares, i.e., 11.7% of the share capital; in the event that the number of shares contributed by shareholders exceeds the number of shares covered, a mechanism of reduction will be applied to each vendor shareholder pro rata the number of shares he holds, with no shareholder then being able to contribute all their shares to the Offer.
Within this framework, the price must represent a balance between, on the one hand, a shortterm market value and, on the other hand, an intrinsic value, assuming a longer-term view and reflecting the share's appreciation potential.
In this specific case, the price of 30 euros proposed as part of this deal offers a premium over market values (share price and analogical approaches), justifying the interest in selling by those shareholders who so wish, and a reasonable discount from the Company's intrinsic values (DCF analyses), justifying the interest, by shareholders who continue to hold company equities, in the company's buyback of its own shares.
Within this context and on these bases, we are of the opinion that the price of 30 euros is fair to Bouygues' shareholders from a financial point of view, in the context of a voluntary Offer for all shareholders.
Done at Paris, 20 September 2011
Jean-François Sablier Sonia Bonnet-Bernard"
The Board of directors of Bouygues held on 20 September 2011 issued the following reasoned opinion: « The board of directors of Bouygues has been convened on 20 September 2011 to resolve upon the filing by the Company of a public buyback offer (the « Offer ») over a maximum of 41,666,666 of its own shares, representing 11.7% of the share capital and at least 8.7% of the voting rights. The Chairman of the Board has presented the main conditions of the Offer.
1. The Board of Directors of Bouygues has reviewed the draft offer document which is expected to be filed today with the Autorité des marchés financiers and which contains the valuation work conducted by Rothschild & Cie Banque, BNP Paribas, Crédit Agricole CIB, HSBC France and Société Générale. In this respect, the Board of Directors considered that this Offer is an opportunity for the shareholders of Bouygues wishing to sale shares to do so at a price offering them the following premiums:
The Board also acknowledged that the contemplated transaction will have an accretive impact on earnings per share, in proportion with the Offer take-up, for the shareholders who choose not to tender their shares (approximately 11%, assuming a 100% of the targeted shares being actually repurchased).
Ricol Lasteyrie, represented by Ms. Sonia Bonnet-Bernard, acting as independent appraiser appointed by the company pursuant to provisions of article 261-3 of the General Regulation of the Autorité des marchés financiers in order to deliver a fairness opinion on the financial terms of the Offer, concluded that the price of the Offer was fair for all shareholders whether they would choose to tender their shares or not, which was acknowledged by the Board.
2. The Board of Directors further noticed that the implementation of the Offer will have no impact on the employment policy; similarly the implementation of the Offer will neither affect the strategy of the Bouygues Group, nor the dividends' policy of the Company. Moreover, it is acknowledged that the Offer will have no general impact on Bouygues financial situation even in the event of 100% of the targeted shares being actually repurchased; in such case, the Group's proforma net debt as of 31 December 2010 would amount to €3.7 billion, compared to proforma shareholders' equity of €9.3 billion as of the same date. The proforma net debt/EBITDA ratio would therefore be 1.1x as of 31 December 2010.
3. The undertaking by SCDM – the company controlled by Messrs. Martin and Olivier Bouygues which currently holds 18.6% of Bouygues' share capital - not to tender its shares to the Offer has been taken into consideration by the Directors for issuing this reasoned opinion.
4. After further discussions, all members of the Board of Directors, present or represented, on the basis of, inter alia, the report of the independent appraiser which concluded that the price of the Offer was fair for all Bouygues' shareholders, unanimously decided that the implementation of the Offer was in the interest of Bouygues, its shareholders and its employees.
Press contact: + 33 1 44 20 12 01 [email protected]
This press release must not be published, transmitted or distributed, directly or indirectly, on the territory of the United States, Canada, Japan or Australia. This press release does not constitute an offer of securities or any request to purchase securities in the United States or in any country other than France.
The dissemination, publication or distribution of this press release in certain countries may constitute a violation of current laws and regulations. Consequently, those physically present in these countries and in which this press release is disseminated, published or distributed must inform themselves of, and conform to, these laws and regulations.
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.