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In connection with the publication of the signing of the Combination Agreement on 1 December 2004 the contents of the coming offer and terms and conditions were further specified and described.
On 10 December, the Copenhagen Stock Exchange announced that the existing shareholders’ agreements will be terminated, if the terms and conditions of the offer by OMX to the shareholders in the Copenhagen Stock Exchange are met.
Today, 17 December 2004, the offer document and prospectus were published.
The combination of the two companies shall be effected through an offer by OMX to the shareholders to acquire all outstanding shares in the Copenhagen Stock Exchange. OMX will offer 42.7448 new shares in OMX in exchange for each share in the Copenhagen Stock Exchange or a cash consideration of DKK 3,050 per CSE share, or a combination thereof.
The offer means that the total value of the Copenhagen Stock Exchange has been fixed at DKK 1,220 million, including net cash of DKK 258 million (end-September 2004).
In connection with OMX’s offer to the shareholders a number of terms and conditions must be met before the offer is binding on OMX. For a detailed description of the terms and conditions, please consult the offer document and prospectus published today.
The offer period runs from 22 December 2004 up to and including 7 February 2005. Acceptance of the offer must have reached Danske Bank A/S, Corporate Actions, Holmens Kanal 2-12, DK-1092 Copenhagen K, before the closing of the offer period, cf. the offer document and the prospectus.
The Supervisory Board of the Copenhagen Stock Exchange finds the offer attractive and has unanimously decided to support it and recommend that the shareholders of the Copenhagen Stock Exchange accept the offer.
The following existing shareholders have expressed their support to the offer: Danske Bank, Nordea, Sydbank, Amagerbanken, Alfred Berg Bank, Jyske Bank, Alm. Brand Bank, Carnegie, SEB, Handelsbanken, Nykredit, Realkredit Danmark, BRFkredit, Carlsberg, Danisco, TDC and Oslo Børs.
The Supervisory Board has based its account of the offer on the fact that the description of the advantages and disadvantages of a combination of the two companies is based on both the shareholders’ and the market participants’ views. The Supervisory Board finds the acquisition offer from OMX attractive due to the following reasons:
- The acquisition offer is the result of a thorough process, where the Copenhagen Stock Exchange engaged J.P. Morgan plc as a financial adviser. In connection with the offer, J.P. Morgan has delivered a fairness opinion. The Supervisory Board finds the offer attractive.
- The combination of the two companies will provide benefits for the customers – issuers, members, vendors and investors – through increased liquidity, efficient member access and a broader range of services.
- Easier and broader member and investor access is expected to increase turnover on the spot and derivatives markets, which will increase turnover in the combined company.
- To safeguard the influence from the Danish market participants, an Advisory Committee will be established following completion of the Offer. The Advisory Committee shall advise on and be consulted in questions concerning the self-regulatory powers of Copenhagen Stock Exchange in general and must be consulted in material changes to the disclosure requirements for issuers of securities listed on the Copenhagen Stock Exchange. Moreover, amendments to the disclosure requirements for issuers of securities are not possible, if a majority of the Advisory Board are against the content changes. Content changes mean requirement for quarterly reports, requirement for disclosure of individual information regarding management remuneration, changes in publication deadlines for annual reports and significant changes in the Danish corporate governance rules. Subject to completion of the offer, the articles of association of the Copenhagen Stock Exchange will be amended. According to such new articles of association, the Advisory Committee shall consist of eleven members, of which five shall be appointed by the issuers on the Copenhagen Stock Exchange and five by the members of the Copenhagen Stock Exchange and a Chairman, who shall be appointed unanimously by the issuers and the members.
- The Copenhagen Stock Exchange will continue to be a regulated company domiciled in Denmark and regulated by Danish laws and authorities. Furthermore, the parties have agreed that any decision to cease to provide stock exchange services in Copenhagen shall only be valid if a majority of all the members of the Advisory Committee, as well as a majority of the issuers’ representatives of the Advisory Committee and the Chairman assent to such a proposal.
- The combined company will be better positioned in the continuous consolidation process among stock exchanges with international operations.
According to the Supervisory Board there is one fundamental disadvantage associated with the offer:
- The Copenhagen Stock Exchange is a significantly smaller company than OMX, consequently, the existing shareholders in the Copenhagen Stock Exchange are going to loose influence in the continuing company.
After having considered the advantages and disadvantages of the offer, the Supervisory Board unanimously recommend that the shareholders accept the offer.
