Share Issue/Capital Change • Apr 16, 2009
Share Issue/Capital Change
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Today, the Board of Directors of Bang & Olufsen a/s (the "Company" or "Bang & Olufsen") has decided to use its authorisation to increase the Company's share capital. Therefore, the Company publishes a prospectus today in connection with an offering of shares with preemptive rights to the Company's existing A and B shareholders (the "Offering").
The Offering comprises 24,162,676 B shares with a nominal value of DKK 10 each (the "Offer Shares"), offered at the ratio of 2 : 1 (which means that two subscription rights are allocated for each existing share held and that one subscription right entitles the holder to subscribe one new B share) and at a subscription price of DKK 19 per B share.
As regards the Company's expectations to the current financial year (2008/09) and the coming financial year (2009/10), please refer to the Company's announcement no. 08.21 of 14 April 2009.
The reason for the Offering is to strengthen the Company's financial position and thereby to establish a stronger financial basis for the future development of the Company in a market characterised by substantial uncertainty due to the general economic downturn and lack of predictability.
At the end of 2008, the Company announced the strategy plan "Pole Position Strategy 2008".
The purpose of this Strategy Plan is to secure the future operations and development of Bang & Olufsen in accordance with the group's overall strategy of developing luxury audio/video products through the following initiatives:
Upon subscription of the Offering, the gross proceeds will be approximately DKK 459 million and the net proceeds (gross proceeds less estimated costs to the Company relating to the Offering) are expected to be approximately DKK 432 million.
The management expects to use the net proceeds from the Offering to strengthen the Company's financial position and thereby to establish a stronger financial basis for the future development of the Company in a market characterised by substantial uncertainty due to the general economic downturn and lack of predictability. Likewise, the Offering is intended to secure the financial foundation for implementing the strategy plan ("Pole Position 2008"), and will fund the group's investments in the development of the shared digital technology platform. Thus, the proceeds will be used in the group's operations and contribute to ensuring development of new products for a stronger future product portfolio and to financing fluctuations in working capital and other investments related to operations etc.
A temporary credit facility granted by one of the Company's banking connections, which had been drawn down by DKK 61 million as at 31 March 2009, will be repaid with part of the proceeds from the Offering.
Subject to the satisfaction of certain conditions in the underwriting agreement of 16 April 2009 (the "Underwriting Agreement") between Bang & Olufsen and Danske Markets (Division of Danske Bank A/S) ("Danske Markets"), the Offer Shares that have not been subscribed for by holders of subscription rights, will be subscribed for by Danske Markets and subject to the satisfaction of certain conditions, the Company is therefore ensured the subscription of 24,162,676 Offer Shares.
A group of shareholders, i.e., Arbejdsmarkedets Tillægspension, Den Professionelle Forening LD, Nordea Liv & Pension, livsforsikringsselskab A/S, Nykredit Realkredit A/S, Chr. Augustinus Fabrikker Aktieselskab and PKA A/S (the "Shareholder Group") have given binding advance undertakings, subject to the satisfaction of certain conditions, to exercise their respective subscription rights to subscribe for a total of 4,978,188 Offer Shares corresponding to gross proceeds of approximately DKK 95 million. In addition, the Færchfonden has made a binding advance undertaking, subject to the satisfaction of certain conditions, to exercise its subscription rights to subscribe for a total of 1,232,000 Offer Shares corresponding to total gross proceeds of approximately DKK 23 million. Furthermore, the Shareholder Group has made a binding agreement with Danske Markets about purchasing up to 13,124,981 Offer Shares from Danske Markets at the Offer Price on specified terms if Danske Markets may subscribe for Offer Shares pursuant to the Underwriting Agreement.
If the subscription by Danske Markets under the Underwriting Agreement totals less than 17,952,488 Offer Shares, each shareholder's obligation to Danske Markets to purchase Offer Shares subscribed for by Danske Markets under the Underwriting Agreement will be reduced proportionally at the ratio between Danske Markets and the Shareholder Group.
Moreover, the Chairman of the Board of Directors Jørgen Worning, Thorleif Krarup, Niels Bjørn Christiansen, Anette Revsgaard Sejbjerg, Jesper Olesen and Knud Olesen as well as President & CEO Karl Kristian Hvidt Nielsen have all indicated that they intend to subscribe for Offer Shares in respect of the subscription rights allocated to them. In addition, Deputy Chairman Lars Brorsen has indicated that he intends to purchase subscription rights and exercise them to subscribe for new B shares in a total amount corresponding to DKK 1 million.
In connection with the Offering, subscription rights will be allocated to the Company in respect of its treasury shares. Pursuant to the Danish Public Companies Act, the Company is not allowed to exercise such subscription rights, for which reason the Company expects to sell the subscription rights allocated to it in respect of its treasury shares.
Upon registration of the capital increase in connection with the Offering with the Danish Commerce and Companies Agency, the Board of Directors intends to file for registration of the resolution passed at Bang & Olufsen's general meeting held on 4 March 2009 to abolish the Company's system of multiple share classes, to the effect that Bang & Olufsen will have one share class only in future.
Offer price
The Offer Shares are offered at DKK 19 per B share of DKK 10 nominal value, free of brokerage.
On 23 April 2009 at 12:30 pm CET, anyone who is registered with VP Securities A/S as a shareholder of Bang & Olufsen and holders of A shares of Bang & Olufsen will be allocated subscription rights. Shares traded after 21 April 2009 at 9:00 am CET will be traded ex subscription rights. Existing shareholders will be allocated two (2) subscription rights for each existing share of DKK 10 held, and for one (1) subscription right, the holder is entitled to subscribe for one (1) Offer Share of DKK 10 nominal value. The subscription rights may be traded on NASDAQ OMX Copenhagen during the period from 21 April 2009 at 9:00 am CET until 4 May 2009 at 5:00 pm CET. Subscription rights that are not exercised during the subscription period will lapse with no value, and the holder of such subscription rights will not be entitled to compensation.
The rights issue is completed at the ratio of 2 : 1 for Bang & Olufsen's existing shareholders.
The Offer Shares may be subscribed from 24 April 2009 at 9:00 am CET to 7 May 2009 at 5:00 pm CET.
The Offer Shares are issued under a temporary securities identification code and approved for admission to trading and official listing on NASDAQ OMX Copenhagen as from 21 April 2009. Registration of the Offer Shares with the Danish Commerce and Companies Agency will take place following completion of the Offering, expected to be on 12 May 2009, and as soon as possible thereafter, the temporary securities identification code will be merged with the securities identification code of the existing B shares. Immediately following the merger of the Company's share classes, the Company's A shares will be admitted for trading and official listing on NASDAQ OMX Copenhagen.
Danske Markets (Division of Danske Bank A/S).
Expected timetable of principal events
| Publication of prospectus | 16 April 2009 |
|---|---|
| Trading in shares ex subscription rights begins (assuming that such shares are traded with customary value of three trading days) |
21 April 2009 at 9:00 am CET |
| Admission to trading and official listing of the Offer Shares and the subscription rights |
21 April 2009 at 9:00 am CET |
| Rights trading period begins | 21 April 2009 at 9:00 am CET |
| Allocation date of subscription rights | 23 April 2009 at 12:30 pm CET |
| Subscription period begins | 24 April 2009 at 9:00 am CET |
| Rights trading period ends | 4 May 2009 at 5:00 pm CET |
| Subscription period ends | 7 May 2009 at 5:00 pm CET |
| Expected date of registration of the Offer Shares and of the merger of the share classes with the Danish Commerce and Companies Agency |
12 May 2009 |
| Expected date of completion of the Offering and publication of the results of the Offering |
12 May 2009 |
| Expected date of merger of the temporary securities identification code of the Offer Shares with the existing code |
14 May 2009 |
| Expected date of admission to trading and official listing of the existing A shares (admission to trading and official listing will be in the securities identification code of the existing B shares) |
14 May 2009 |
Requests for copies of the prospectus containing detailed information about Bang & Olufsen and the complete terms and conditions of the Offering may be addressed to:
Danske Bank A/S Corporate Actions Holmens Kanal 2-12 DK-1092 Copenhagen K
Tel: +45 70 23 08 34 Fax: +45 43 55 12 23 Email: [email protected]
The prospectus will be available at the Company's registered office in Struer. Subject to certain exceptions, the prospectus can also be downloaded from the Company's website: www.bangolufsen.com.
This announcement does not constitute an offer or an invitation to invest in the Company. Subscription for shares should only take place based on the published Prospectus.
Regardless of the above, Bang & Olufsen expects that due to restrictions under applicable law and rules, some or all investors residing in the United States, Canada, Australia, Japan and other jurisdictions outside Denmark may not have the prospectus distributed to them and may not be able to exercise their subscription rights or subscribe for the Offer Shares. The prospectus does not constitute an offer of or an invitation to purchase any subscription rights or subscribe for any Offer Shares in any jurisdiction in which such offer or invitation would be unlawful.
Struer, 16 April 2009
Jørgen Worning Karl Kristian Hvidt Nielsen Chairman President & CEO
For additional information, please contact: Karl Kristian Hvidt Nielsen, President & CEO, tel. +45 9684 5004
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