Rokiskio Suris — M&A Activity 2017

Nov 21, 2017

/Translation from Lithuanian/

CIRCULAR OF THE NON-COMPETITIVE TAKEOVER BID TO BUY OUT THE SHARES OF ROKIŠKIO SŪRIS AB GRANTING THE VOTING RIGHTS

1. The terms of the Takeover Bid:

By a decision of the extraordinary meeting of shareholders of Rokiškio sūris AB held on 22 September 2017, Rokiškio sūris AB (hereinafter referred to as the Company) made a new issue of 3,586,797 shares and increased the authorised capital of ‘the Company’ to EUR 10,401,711.30. The new share issue was acquired by a strategic investor the company Fonterra (Europe) Coöperatie U.A. of New Zealand.

On 13 October 2017, the Strategic Investment Agreement and the Shareholders Agreement were signed between the shareholders of the Company: Pieno pramonės investicijų valdymas UAB, RSU Holding SIA, Antanas Trumpa and Ledina Trumpienė, Dalius Trumpa and Rasa Trumpienė, the strategic investor Fonterra (Europe) Coöperatie U.A., and the Company, Rokiškio sūris AB. The objective of the agreement is to establish relations of the parties in respect of the Company, to ensure joint actions in carrying out the development of the Company and exercising voting rights at general meetings of shareholders, to agree on specific terms of and restrictions on the disposal of shares, and to enable shareholders to protect their interests related to their investments in the Company.

Upon the closing of the aforementioned transaction and signing of the Shareholders Agreement and the Strategic Investment Agreement on 13 October 2017, the shareholders, i.e. Pieno pramonės investicijų valdymas UAB, RSU Holding SIA, Antanas Trumpa and Ledina Trumpienė, Dalius Trumpa and Rasa Trumpienė, the strategic investor Fonterra (Europe) Coöperatie U.A. (hereinafter referred to as ‘the Members of the Group’) became persons acting in concert as provided for in Article 26(1)(2) of the Law of the Republic of Lithuania on Securities, who jointly own shares of the Company granting more than 1/3 of the votes in the general meeting of shareholders of the Company.

The holding of the persons acting in concert together with Fonterra (Europe) Coöperatie U.A., a new person acting in concert, grants 29,273,654 votes, which accounts for 81.62% of all shares issued by Rokiškio sūris AB and votes granted by them.

Acting in the pursuance of the provisions of Articles 35, 36, and 38 of the Law of the Republic of Lithuania on Securities, the Members of the Group acting in concert (hereinafter referred to as ‘the Takeover Bid Offerors’) hereby announce and implement a takeover bid to buy up the remaining ordinary registered shares of the Company with a nominal value of EUR 0.29 granting the voting rights.

The Takeover Bid Offerors hereby announce a takeover bid to buy up the remaining 6,594,316 (six million five hundred ninety-four thousand three hundred sixteen) ordinary registered shares of the Company with a nominal value of EUR 0.29, ISIN code: LT0000100372, which accounts for 18.38% of all the shares issued by the Company and the votes.

The price of the takeover bid is EUR 2.75 (two euros and seventy-five euro cents) for 1 (one) ordinary registered share of the Company with a nominal value of EUR 0.29.

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The settlement for the Company's shares being bought up shall be made in cash.

1. The name, legal form, legal entity code, office address, telephone and fax numbers, e-mail and website address of the offeree company.

Name	Rokiškio sūris AB
Legal form	Public limited liability company
Legal entity code	173057512
Office address	Pramonės str. 3, LT-42150 Rokiškis, Lithuania
Telephone number	+370 458 55200
Fax number	+370 458 55300
E-mail address	rokiskio.suris@rokiskio.com
Website address	www.rokiskio.com

1. The details of the takeover bid offeror:

3.1. The forename, surname, residential place address, telephone and fax numbers of the takeover bid offeror (when the takeover bid offeror is a natural person):

Forename and surname	Residential place address	Telephone number	Fax number
Antanas Trumpa	Sodų str. 41A, LT-42127 Rokiškis	+370 458 55200	+370 458 55300
Ledina Trumpienė	Sodų str. 41A, LT-42127 Rokiškis	+370 458 55201	No
Dalius Trumpa	Sodų str. 31 LT-42127 Rokiškis	+370 458 55204	+370 458 55300
Rasa Trumpienė	Sodų str. 31 LT-42127 Rokiškis	+370 698 03866	No

3.2. The name, legal form, legal entity code, office address, telephone and fax numbers, e-mail and website address of the takeover bid offeror (when the takeover bid offeror is a legal person):

Name and legal form	Legal entity code / reg. No	Office address	Telephone / fax numbers	E-mail	Website address
Pieno pramonės investicijų valdymas UAB, a private limited liability company established and operating in accordance with the laws of the Republic of Lithuania	173748857	Pramonės str. 3, LT-42150, Rokiškis	+370 458 55203	No	No
RSU Holding SIA, a company established and operating in accordance with the laws of the Republic of Latvia	40103739795	Elizabetes iela 45/47, LV-1010 Riga	+371 27765507	No	No

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Fonterra (Europe) Coöperatie U.A., a company established and operating in accordance with the laws of the Netherlands	CCI 50122541, RSIN 822560100	Barbara Strozzilaan 356-360, EurBld2, 3e verdieping, 1083HN Amsterdam, the Netherlands	+312058117 11 / +312058117 10	No	www.fonterra.com;

3.3. The forename, surname, residential place address, telephone and fax numbers of the representative of the takeover bid offeror (when the representative is a natural person):

The Takeover Bid Offerors who are legal entities shall be represented by:

Takeover Bid Offeror	Forename and surname of the representative	Residential place address of the representative	Grounds for representation	Telephone/ fax	E-mail
Pieno pramonès investiciju valdymas UAB, a private limited liability company	Dalius Trumpa	Sodų str. 31 LT-42127 Rokiškis	Acting in accordance with the Agreement on the Announcement and Implementation of the Takeover Bid concluded on 27 October 2017	+370 458 55204	dalius.trumpa@rokiskio.com
RSU Holding SIA, a private limited liability company
Fonterra (Europe) Coöperatie U.A.

3.4. The name, office address, legal entity code, telephone and fax numbers of the representative of the takeover bid offeror (when the representative is a legal person):

There are no legal persons representing the Takeover Bid Offerors.

4. The person consulting the takeover bid offeror (name of the legal person, forename and surname, headquarters address, and telephone and fax numbers of the consultant).

There are no persons consulting the Takeover Bid Offerors.

5. The duration of the implementation of the takeover bid (in days).

The duration of the implementation of the takeover bid shall be 14 (fourteen) calendar days.

6. The number of shares issued by the offeree company by type, class, ISIN code, their nominal value, and number of owned shares.

Information on shares issued by Rokiškio sūris AB:

Number of shares	Type and class of	ISIN code	Nominal value,	Number of owned

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	shares	LT0000100372	EUR	shares
35,867,970	Ordinary registered shares	0.29	No owned shares

1. Information on the admission of securities issued by the offeree company to trading on a regulated market.

35,867,970 (thirty-five million eight hundred sixty-seven thousand nine hundred seventy) ordinary registered shares issued by Rokiškio suris AB are listed on the Official Trading List of Nasdaq Vilnius AB.

1. The minimum and maximum number of securities of the offeree company to be bought up by type, class, and ISIN code; if the owners of securities of the offeree company do not provide the number of securities to be bought up, the takeover bid shall be considered as failed (to be filled in when announcing a voluntary takeover bid).

Not applicable.

1. The number of securities issued by the offeree company by type, class, and ISIN code, the number of votes granted by those securities (%), which:

9.1. The takeover bid offeror owned (owns) at the moment of the exceeding of the 1/3 votes threshold at the general meeting of shareholders of the offeree company and on the day of the subscription of this circular (to be filled in when submitting a mandatory takeover bid); which the takeover bid offeror owns on the day of the subscription of this circular (to be filled in when announcing a voluntary takeover bid);

At the moment of the exceeding of the 1/3 votes threshold at the general meeting of shareholders, the Takeover Bid Offeror held (holds) 29,273,654 ordinary registered shares of Rokiškio suris AB (ISIN code LT0000100372), which accounts for 81.62% of the votes granted.

9.2. each of the parties acting in concert owned (owns) at the moment of the exceeding of the 1/3 votes threshold at the general meeting of shareholders of the offeree company and on the day of the subscription of this circular (to be filled in when submitting a mandatory takeover bid); which each of the parties acting in concert owns on the day of the subscription of this circular (to be filled in when announcing a voluntary takeover bid);

Mandatory takeover bid offeror	Number of shares owned by the ownership right	Votes granted (%)
Antanas Trumpa	6,980,233	19.46
Ledina Trumpienė	0	0
Dalius Trumpa	83,500	0.23
Rasa Trumpienė	0	0
Pieno pramonės investicijų valdymas UAB	9,713,777	27.08
RSU Holding SIA	8,909,347	24.84
Fonterra (Europe) Coöperatie U.A.	3,586,797	10.00
Total:	29,273,654	81.62

9.3. The persons initiated in Points 9.1–9.2 have the right to acquire securities of the offeree company on their own initiative according to an effective agreement;

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Not applicable

9.4. third parties have provided to the persons indicated in Points 9.1–9.2 who have the right to exercise the voting rights granted by those securities at their own discretion.

Not applicable.

1. The type, class, ISIN code (if assigned), and number of securities issued by the takeover bid offeror, which are owned by the offeree company, as well as the number of votes held by the offeree company at the general meeting of shareholders of the takeover bid offeror.

Rokiškio suris AB holds no securities issued by any of the Takeover Bid Offerors and/or votes granted by them at the general meeting of shareholders.

1. The method of payment for the securities of the offeree company being bought up (cash, securities, or a combination of cash and securities).

According to this Takeover Bid, settlement for the shares to be bought up shall be made in cash and the settlement currency shall be euro.

1. The price (exchange rate if settlement is to be made in securities or a combination of securities and cash, i.e. the integer number of cash and securities offered for exchange falls on one security of the offeree company), at which the securities of the offeree company will be bought up (price of the takeover bid). In the case of a voluntary takeover bid, when settlement is to be made in securities, the price shall also be indicated in cash.

The price of the takeover bid is EUR 2.75 (two euros and seventy-five euro cents) for 1 (one) ordinary registered share of the Company with a nominal value of EUR 0.29.

1. The methodology for the valuation of the securities of the offeree company to be bought up and justification of the price.

Article 39(1) of the Law of the Republic of Lithuania on Securities establishes that the price of a mandatory takeover bid shall be not lower than the highest price of the securities acquired by the offeror in the course of 12 months preceding the exceeding of the 1/3 votes threshold, and shall be not lower than the average weighted price on a regulated market and the multilateral trading facility in 6 months prior to the date of exceeding the established threshold when the securities concerned are traded on a regulated market and the multilateral trading facility.

Upon signing the 13 October 2017 Shareholders Agreement, according to which shareholders who have signed the Agreement shall be considered persons acting in concert, the Takeover Bid Offeror exceeded the 1/3 votes threshold at the general meeting of shareholders of the Company.

During the period of 12 months from the exceeding of the 1/3 votes threshold, the Takeover Bid Offerors did not conclude any transactions in respect of shares issued by the Company. The average weighted market price of the Company's shares in 6 months preceding the specified day of the exceeding the votes threshold, i.e. 13 October 2017 (exclusive of that day) is EUR 2.22 (two euros and twenty-two euro cents).

Whereas, according to the provisions of the Law on Securities of the Republic of Lithuania, the price of a mandatory takeover bid shall be not lower than the average weighted price on a regulated

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market in 6 months prior to the date of exceeding the established votes threshold, the Takeover Bid Offerors have adopted a decision to take into account the current market price of the Company's shares, which is higher than the calculated 6-month average weighted price prior exceeding the established votes threshold and to establish the price of the takeover bid as equal to the market price of the Company's shares at Nasdaq Vilnius AB securities exchange as of the day of the signing of this Official Circular, which equals to EUR 2.75 (two euros and seventy-five euro cents) for 1 (one) ordinary registered share of the Company.

The Takeover Bid Offerors believe that the price of this takeover bid, which equals to the market price of the Company's shares, is fair and that the shareholders will be able to adopt an appropriate decision on the sale of the Company's shares.

14. Information about securities offered for exchange:

No securities will be offered for exchange during the takeover bid.

14.1. The name, legal form, legal entity code, office address, and website address of the company that issued those securities:

Not applicable.

14.2. The characteristics of those securities (type, class, ISIN code, nominal value, etc.):

Not applicable.

14.3. The number of securities offered for exchange held by the takeover bid offeror:

Not applicable.

14.4. The regulated market operating in a Member State of the European Union in which trade in those securities is allowed:

Not applicable.

14.5. The place where the prospectus and other information about the offered securities are made available for familiarisation:

Not applicable.

15. Information on the financing sources of the takeover bid (whether own or borrowed funds will be used to implement the takeover bid; how the repayment of borrowed funds (funds being borrowed) is secured: guarantee, suretyship, or property pledge (mortgage); indicate the borrower, guarantor, surety, pledge holder (mortgage creditor), or other):

According to the agreement of 27 October 2017, the shares offered for sale at the time of the takeover bid will be acquired in equal portions by: Pieno pramonės investicijų valdymas UAB (50% of the offered shares) and RSU Holding SIA (50% of the offered shares).

For settlement for the shares of the Company to be acquired at the time of the takeover bid, the takeover bid offeror will use own and borrowed funds from SEB Bankas AB.

For the payment of the shares, SEB Bankas AB has adopted a decision to grant the shareholders: Pieno pramonės investicijų valdymas UAB, legal entity code: 173748857, and RSU Holding SIA,

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legal entity code: 40103739795 (hereinafter referred to in this Point as 'the Shareholders') a credit of up to EUR 14,000,000 (fourteen million euros) for the period until 31/5/2020, intended for the mandatory takeover bid to buy up the remaining shares granting the voting rights of Rokiškio suris AB on the terms established in the credit agreements.

The credit shall be paid when the respective credit agreement with the Shareholders or each of them separately has been signed and when the Shareholders or each of them have fulfilled the prerequisites for the payment of credit established in such a credit agreement.

The Shareholders shall separately dispose of the funds of the Credit being granted. During the whole period of the performance of the obligation, mutual suretyship agreements between the Shareholders shall be in effect; therefore, each of the Shareholders shall bear solidary liability for the performance of the obligations to SEB Bankas AB. Upon the signing of bank settlement account pledge agreements with each of the Shareholders by the bank, the funds available on those accounts shall not be "frozen", i.e. the Shareholders shall be able to freely dispose of the funds available on the bank settlement accounts (the pledge of the settlement accounts to the benefit of the bank shall be used only for the proper performance of the undertaken obligations of the Shareholders). The funds available on the bank settlement accounts of the Shareholders shall not be used for settlement for the shares because, in order to secure payment for the bought-up shares from own funds, the bank will sign with each of the Shareholders target deposit account agreements, which will not be pledged to the benefit of the bank and according to which the Shareholders will undertake to hold in the bank, until the date provided for in the target deposit agreements, funds intended for payment for the shares, which will be "frozen" in the bank until the respective share payment day.

1. The compensation proposed for any loss of the holders of the rights resulting from the implementation of the requirements under Article 36 (1-5) of the Law (the compensation establishment method and payment method):

Not applicable.

1. The circumstances determining the implementation of the takeover bid that directly depend on the takeover bid offeror.

The takeover bid shall be considered as accomplished irrespective of whether there are any holders responding to this bid.

At the time of the subscription of this circular, there are no known circumstances determining the implementation of the takeover bid that do not directly depend on the takeover bid offerors.

1. The plans and intents of the takeover bid offeror relating to the offeree company in case the takeover bid is implemented:

18.1. the continuity of the business areas of the offeree company:

The Takeover Bid Offeror has no objective to change the business lines of the Company and has not adopted any decisions on this issue.

18.2 restructuring (change of the management structure), transformation, reorganisation, or winding-up:

The Takeover Bid Offerors have not adopted any decision on restructuring, transformation, reorganisation and/or winding-up of the Company and do not plan to take any such decisions in near future.

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18.3. the policy on employees:

The Takeover Bid Offerors do not plan to change the policy on employees in near future.

18.4. the policy on managers:

The Takeover Bid Offerors do not plan to change the policy on managers in near future.

18.5. the capital-raising policy:

The Takeover Bid Offerors do not plan to change the current capital-raising policy of the Company in near future.

18.6. the dividend policy:

The Takeover Bid Offerors plan to approve a new dividend policy, according to which, except as otherwise provided for in the dividend policy, 100% of the profit of the financial period, less the funds for CAPEX, working capital, and other purposes provided for in the budget approved by the board, shall be allocated for dividends.

The dividend policy shall be submitted for approval to the general meeting of shareholders.

18.7. the planned changes of the Articles of Association of the offeree company:

Acting pursuant to the Shareholders Agreement singed on 13 October 2017, the Takeover Bid Offerors plan to initiate recall of members of the Board of Directors and election of new members of the Board of Directors, as well as amendments to the Articles of Association of the Company regarding the extension of the competence of the Board members of the Company.

Upon the implementation of the Takeover Bid, the General meeting of shareholders shall be submitted for approval the new Articles of Association of the Company, wherein, in addition to the competence of the Board established in the Law of the Republic of Lithuania on Companies, the Board of the Company shall be vested with the adoption of decisions on the conclusion of transactions, at the amount established in the Shareholders Agreement, in respect of the acquisition, transfer, or rent of non-current assets and also on the lending to and borrowing from other persons by the Company and grant of charity and support.

18.8. special payments, motivation systems, etc. intended for the managers of the offeree company:

There are no special payments or motivation systems planned for the managers of the Company and there are no plans to change the applicable motivation principles.

1. The written agreement establishing the rights and mutual obligations of the parties acting in concert as well as their responsibility for non-compliance with obligations in executing the rules of the drawing-up, approval of the takeover bid circular and implementation of the takeover bid.

On 27 October 2017, the Takeover Bid Offerors agreed on the rights and mutual obligations of the parties acting in concert as well as responsibility for non-compliance with obligations in executing the rules of the drawing-up, approval of the takeover bid circular and implementation of the takeover bid.

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By that agreement, the Takeover Bid Offerors agreed that the shares offered for sale at the time of the takeover bid would be acquired in equal portions by: Pieno pramonės investicijų valdymas UAB (50% of the offered shares) and RSU Holding SIA (50% of the offered shares). The other Takeover Bid Offerors who have signed the agreement will not acquire any shares offered for sale at the time of the takeover bid.

The aforementioned agreement establishes the following proportions of the acquisition of shares provided for sale at the time of the takeover bid to the separate Takeover Bid Offerors:

Mandatory takeover bid offeror	Proportion of shares to be acquired, %
Pieno pramonės investicijų valdymas UAB	50
RSU Holding SIA	50

1. Written agreements with other persons on voting at the general meeting of shareholders of the offered company:

Beside the Strategic Investment Agreement and the Shareholders Agreement signed on 13 October 2017 between the offerors of this takeover bid, whereby it is agreed inter alia on joint actions in carrying out the development of the Company, exercising voting rights at general meetings of shareholders, and agreeing on specific terms of and restrictions on the disposal of shares, the Takeover Bid Offerors have not concluded any other agreements with any other persons on voting at general meetings of shareholders of the Company.

1. The law which will govern contracts concluded between the takeover bid offeror and the holders of the offered company's securities in respect of the takeover bid and the competent courts:

The agreements concluded between the takeover bid offeror Rokiškio suris AB and its shareholders in respect of the takeover bid shall be governed by the law of the Republic of Lithuania and the competent court shall be the courts of the Republic of Lithuania.

1. Data on the takeover bid offeror:

22.1. whether the takeover bid offeror (natural person) was imposed administrative penalties for infringements of legal acts governing the securities market during the last 5 years:

None of the takeover bid offerors who is a natural person was imposed administrative penalties for infringements of legal acts governing the securities market during the last 5 years.

22.2. whether the takeover bid offeror (natural person) has any unspent conviction for offences against property, economic order, or finance:

None of the takeover bid offerors who is a natural person has any unspent conviction for offences against property, economic order, or finance:

1. Information about ongoing court or arbitration proceedings that have or may have an essential impact on the activities and economic situation of the takeover bid offeror:

On 23 December 2015, East Capital (Lux) Baltic Fund filed an action in Panevėžys Regional Court against Antanas Trumpa, the Chief Executive Officer of Company, in respect of the damage of EUR

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10.524 million allegedly caused to the Company. In its action, East Capital (LUX) Baltic Fund stated that by granting loans, Rokiškio suris AB granted financial assistance prohibited by the Law of the Republic of Lithuania on Companies and thus caused damage to the Company.

On 2 June 2017, Panevėžys Regional Court rejected all the claims of East Capital (LUX) Baltic Fund against Antanas Trumpa, the Chief Executive Officer of Rokiškio suris AB. In its decision, Panevėžys Regional Court stated that the data of the case allowed stating that Antanas Trumpa, as the Chief Executive Officer of Rokiškio suris AB, performed actions prohibited by the Law on Companies, i.e. granted financial assistance of the company prohibited by laws (Article 44(10) of the Law on Companies, Article 45²(4) of the currently effective version of the Law on Companies). However, when rejecting the action of East Capital (LUX) Baltic Fund, the court noted that no damage had been caused to the company and its shareholders as a result of the actions of Antanas Trumpa.

On 3 July 2017, East Capital (LUX) Baltic Fund, the Company, and Antanas Trumpa, the Chief Executive Officer of the Company, filed an appellant appeal in the Court of Appeal of Lithuania, whereby they appealed against the reasons of the judgement of Panevėžys Regional Court.

24. The sources in which the takeover bid offeror plans to announce information on the takeover bid and its implementation:

The Takeover Bid Offerors plan to announce information on the takeover bid and its implementation in the source indicated in the Articles of Association of the Company as the one for announcing all notices of the Company, i.e. the electronic publication Juridinių Asmenų Vieši Pranešimai (Public Notices of Legal Persons) published by the State Enterprise Registrų Centras (Centre of Registers), through the information system of Nasdaq Vilnius AB, and on the website of the Company.

25. Other data at the discretion of the takeover bid offeror:

The mandatory non-competitive takeover bid to buy up the remaining shares granting the voting rights of the company Rokiškio suris AB will be implemented through the Takeover Bid market of Nasdaq Vilnius AB through the mediation of AB SEB bank.

If the shareholders of the Company wish to sell the Company's shares at the time of the Takeover Bid, they can address any brokerage firm or credit institution operating in Lithuania and provide an instruction to sell the Company's shares.

The Takeover Bid Offerors inform hereby that the implementation of this takeover bid does not require a permission to perform concentration because, irrespective of the number of holders of the Company's shares who will respond to this offer, the quality of the control of the Company will not change and the Takeover Bid Offerors will maintain the same joint control which they had before announcing this takeover bid.

26. Confirmation by the persons who drew up this takeover bid circular and are responsible for the information provided herein that the information provided in this circular is true and that no essential data that may influence the opinion of the holders of the securities on the takeover bid have been omitted:

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By signature, the Takeover Bid Offerors confirm hereby that the information provided in this circular is true and that no essential data that may influence the opinion of the holders of the securities on the takeover bid have been omitted.

Acting on behalf of the Takeover Bid Offerors: Pieno pramonès investicijų valdymas UAB, RSU Holding SIA, Antanas Trumpa and Ledina Trumpienė, Dalius Trumpa and Rasa Trumpienė, and the strategic investor Fonterra (Europe) Coöperatie U.A. in accordance with the Agreement on the Initiation and Implementation of the Takeover Bid:

Dalius Trumpa, Director of RSU Holding SIA
(Name, surname, and position)

(signature)

13 November 2017

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