Aliaxis, Announces a Non-Binding Intention to Make an All-Cash Public Tender Offer for Uponor Corporation
HELSINKI–(BUSINESS WIRE)–#CleanWater–NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO, AUSTRALIA, CANADA, HONG KONG, JAPAN, NEW ZEALAND OR SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH THE POTENTIAL TENDER OFFER WOULD BE PROHIBITED BY APPLICABLE LAW. FOR FURTHER INFORMATION, PLEASE SEE SECTION ENTITLED “IMPORTANT INFORMATION” BELOW.
- The indicative offer price of the potential offer would value Uponor at EUR 25.00 in cash per each issued and outstanding share in Uponor, representing a premium of 50.2 percent compared to the closing price (EUR 16.64) of the Uponor share on the official list of Nasdaq Helsinki on 13 April 2023, the last unaffected closing price prior to Aliaxis reaching a 5.0 percent stake in Uponor, and 44.6 percent compared to the closing price (EUR 17.29) of the Uponor share on 14 April 2023, the last trading day before the date of this release.
- The potential offer would deliver immediate and derisked value to Uponor’s shareholders, amidst heightened uncertainties in the operating environment and volatility in financial markets.
- The combination would create a global leader in water management solutions with a shared European heritage, complementary geographic and product fit and a strategy with sustainability at its core, creating further value for its employees, customers and other stakeholders.
- Should the conditions for making the potential offer be satisfied, Aliaxis would be prepared to proceed with the potential offer on the basis that the completion of such potential offer would be subject to, among others, an acceptance threshold of more than 60 percent of outstanding shares in Uponor.
- Aliaxis looks forward to engaging with the Board of Directors of Uponor to create significant value upside to all Uponor’s shareholders, employees and customers.
Aliaxis SA/NV announces the non-binding intention regarding a potential acquisition, through a wholly owned subsidiary (the “Offeror”, and together with Aliaxis SA/NV “Aliaxis”), of all issued and outstanding shares in Uponor Corporation (“Uponor” or the “Company”) that are not held by Uponor or any of its subsidiaries through a voluntary all-cash public tender offer (the “Potential Offer”).
KEY HIGHLIGHTS AND SUMMARY OF THE POTENTIAL OFFER
- The indicative offer price of the Potential Offer would be EUR 25.00 in cash for each issued and outstanding share in Uponor that is not held by Uponor or any of its subsidiaries, and would value Uponor’s total equity at approximately EUR 1,820 million and represent a premium of approximately:
- 50.2 percent compared to the closing price (EUR 16.64) of the Uponor share on the official list of Nasdaq Helsinki Ltd (“Nasdaq Helsinki”) on 13 April 2023, the last unaffected closing price prior to Aliaxis reaching a 5.0 percent stake in Uponor;
- 44.6 percent compared to the closing price (EUR 17.29) of the Uponor share on the official list of Nasdaq Helsinki on 14 April 2023, the last trading day before the date of this release;
- 44.5 percent compared to the volume-weighted average trading price (EUR 17.30) of the Uponor share on the official list of Nasdaq Helsinki during the three months ended on 14 April 2023 (inclusive);
- 54.7 percent compared to the volume-weighted average trading price (EUR 16.16) of the Uponor share on the official list of Nasdaq Helsinki during the six months ended on 14 April 2023 (inclusive); and
- 31.6 percent compared to the highest closing price (EUR 19.00) of the Uponor share on the official list of Nasdaq Helsinki during the 12 months ended on 14 April 2023 (inclusive).
Commenting on the Potential Offer, Eric Olsen, CEO of Aliaxis:
“The combination of Uponor and Aliaxis would further strengthen our position as a true leader in water management solutions.
We firmly believe that our proposal would be in the best interests of Uponor and its shareholders, and we look forward to engaging with the Board of Directors of Uponor to further the proposal. Our potential offer would represent a highly attractive opportunity for Uponor’s shareholders to lock in a significant derisked upside despite significant headwinds, including the ongoing downturn in the residential construction markets in Europe and the US.
The proposed combination would not only accelerate the growth of our complementary brand portfolios and international footprint, but it would also preserve our strong heritage in Europe and provide multiple opportunities for employees, customers and stakeholders of both Uponor and Aliaxis.”
- Aliaxis has not made any decision to launch the Potential Offer and it is not yet certain whether it will make the Potential Offer and if so, at which offer price. The launch of the Potential Offer is subject to certain conditions as outlined below in section “Conditions for making the Potential Offer”, including, among others, the opportunity for the Offeror to conduct a short confirmatory due diligence to the Offeror’s satisfaction and the Board of Directors of Uponor recommending to the shareholders of Uponor that they accept the Potential Offer, if made.
- The timing of the announcement of the Potential Offer, if any, is currently uncertain as it depends on the time required by the Board of Directors of Uponor to respond to the Potential Offer and on negotiations to be concluded in relation to the Potential Offer. If negotiations advance quickly and the conditions for making the Potential Offer are satisfied or waived by the Offeror, the Offeror estimates, based on currently available information, that the Potential Offer could be announced within a few weeks from the date hereof.
- The Potential Offer would be funded through a mix of cash and external financing. The Potential Offer, if made, would not be conditional on the availability of financing. Aliaxis expects to retain its investment-grade credit rating after the completion of the Potential Offer.
- Aliaxis initially approached Uponor in relation to a potential offer in May 2022 and has since attempted to negotiate a potential tender offer with the Board of Directors of Uponor, but such negotiations were inconclusive. Aliaxis’ attempts to negotiate a potential tender offer having been inconclusive, Aliaxis wanted to make the shareholders of Uponor aware of this attractive opportunity and looks forward to re-engaging with the Board of Directors of Uponor to make possible the delivery of the Potential Offer.
- Aliaxis already holds approximately 5.0 percent of Uponor’s issued and outstanding shares.
This release does not constitute a public tender offer, and any such offer, if made, would be made pursuant to a tender offer document to be approved by the Finnish Financial Supervisory Authority. Such tender offer document would include all terms and conditions of the Potential Offer. The Potential Offer, if made, may only be accepted on the basis of said tender offer document. There can be no guarantee that Aliaxis’ non-binding intention will eventually lead to the making of the Potential Offer.
CONDITIONS FOR MAKING THE POTENTIAL OFFER
Any final decision by Aliaxis to make the Potential Offer is subject to the following conditions:
- Uponor entering into a combination agreement with the Offeror regarding the Potential Offer or otherwise agreeing with the Offeror on the terms of the Potential Offer, on terms mutually acceptable to the parties;
- the Board of Directors of Uponor recommending to the shareholders of Uponor that they accept the Potential Offer, if made;
- the Offeror being granted access to carry out a customary due diligence review with satisfactory outcome to the Offeror; and
- final approval by the Boards of Directors of the Offeror and Aliaxis SA/NV.
The Offeror reserves the right, at its sole discretion, to waive any of the above conditions and to amend the terms and conditions of the Potential Offer as compared to those set out in this release. Any final decision to make the Potential Offer would be announced by way of a stock exchange release in accordance with applicable laws and regulations.
Aliaxis initially approached Uponor in relation to a potential offer in May 2022 and has since attempted to negotiate a potential tender offer with the Board of Directors of Uponor, but such negotiations were inconclusive. There is therefore a risk that the conditions for the making of the Potential Offer will not be satisfied and that Aliaxis’ non-binding intention will eventually not lead to the making of the Potential Offer. The terms of the Potential Offer, if announced, including the offer price, may differ substantially from those set out in this release.
BACKGROUND AND STRATEGIC RATIONALE OF THE POTENTIAL OFFER
- Despite strong market positions, great brand recognition and achievements in sustainability, Uponor is at a crossroads as a medium-sized player that cannot fully leverage the value of its assets due to the lack of scale in a sector in need of significant innovation.
- Together with Aliaxis, Uponor would benefit from scale advantages while accessing a much wider playing field, in terms of both products and geographies, in a context of macroeconomic challenges, including, in our sector, the drop in demand for residential construction in both the United States and Europe.
- Aliaxis and Uponor have a highly complementary geographic footprint and product offering which would provide significant cross-selling opportunities. Combining Aliaxis and Uponor’s market presence, industrial know-how, R&D and operational capabilities as well as investment capacities would accelerate the development of innovative solutions and optimize the product offering for all customers.
- As a true global leader in water management solutions, the combined entity would also become the partner of choice with a shared European heritage and a strategy with sustainability at its core.
Should the conditions set out above for making the Potential Offer be satisfied, Aliaxis would be prepared to proceed with the Potential Offer on the basis that the completion of such Potential Offer would be subject to, among others, an acceptance threshold of more than 60 percent of the issued and outstanding shares and voting rights in Uponor.
Given the complementary market positions and limited overlap of Aliaxis and Uponor, Aliaxis expects that synergies could be achieved mainly from cross-selling. These synergies could be achieved even if Aliaxis did not reach a 100 percent ownership of Uponor, which is fully reflected in the Potential Offer.
ABOUT ALIAXIS
Aliaxis has a long-standing, unique and entrepreneurial history that has seen a family business grow into a global leader. We design sustainable, easy to install, and innovative solutions to address the world’s water challenges and accelerate the transition to clean energy. Thanks to our 15,000+ employees, our pipes and fitting systems meet our customers’ most demanding needs for the building, infrastructure, industrial and agriculture sectors. Headquartered in Brussels and operating in over 40 countries, Aliaxis is active through trusted local brands and generated EUR 4.3 billion revenue in 2022.
Aliaxis has embarked on a positive and ambitious journey with its Growth with Purpose strategy. Together with our teams around the world, we strive to reach our targets for sustainability, innovation and overall performance by 2025 and beyond.
ADVISORS
Morgan Stanley & Co International plc is acting as financial advisor and Avance Attorneys Ltd and Cleary Gottlieb Steen & Hamilton LLP as legal advisors to Aliaxis in connection with the Potential Offer.
MEDIA AND INVESTOR BRIEFING
Aliaxis invites media representatives and shareholders to attend a live broadcast briefing from Helsinki on the Potential Offer, including a Q&A session, today, 17 April 2023, at 11:00 a.m. (EEST).
The presentation will be in English, and questions can be asked either in English or Finnish.
Link to webcast: http://aliaxiswebcast.worksup.com/
Participants may submit questions in writing during the event through a message platform available in the webcast.
MEDIA INQUIRIES
For further information, please see the dedicated website: https://potentialoffer.aliaxis.com/
INDICATIVE KEY FEATURES OF THE POTENTIAL OFFER
Structure
The Potential Offer would be structured as a voluntary all-cash public tender offer for all issued and outstanding shares in Uponor that are not held by Uponor or any of its subsidiaries, and governed by Finnish law. The offeror would be a Finnish private limited liability company indirectly wholly owned by Aliaxis SA/NV.
Offer Price
The indicative offer price of the Potential Offer would be EUR 25.00 in cash for each issued and outstanding share in Uponor that is not held by Uponor or any of its subsidiaries, and would value Uponor’s total equity at approximately EUR 1,820 million and represent a premium of approximately:
- 50.2 percent compared to the closing price (EUR 16.64) of the Uponor share on the official list of Nasdaq Helsinki on 13 April 2023, the last unaffected closing price prior to Aliaxis reaching a 5.0 percent stake in Uponor;
- 44.6 percent compared to the closing price (EUR 17.29) of the Uponor share on the official list of Nasdaq Helsinki on 14 April 2023, the last trading day before the date of this release;
- 44.5 percent compared to the volume-weighted average trading price (EUR 17.30) of the Uponor share on the official list of Nasdaq Helsinki during the three months ended on 14 April 2023 (inclusive);
- 54.7 percent compared to the volume-weighted average trading price (EUR 16.16) of the Uponor share on the official list of Nasdaq Helsinki during the six months ended on 14 April 2023 (inclusive); and
- 31.6 percent compared to the highest closing price (EUR 19.00) of the Uponor share on the official list of Nasdaq Helsinki during the 12 months ended on 14 April 2023 (inclusive).
The indicative offer price has been determined based on 72,800,010 issued and outstanding shares in the Company. Should the Company increase the number of shares that are issued and outstanding on the date hereof as a result of a new share issue, reclassification, stock split (including a reverse split) or any other similar transaction, or should the Company distribute a dividend or otherwise distribute funds or any other assets to its shareholders, or if a record date with respect to any of the foregoing occurs prior to any of the settlements of the completion trades (whether after the expiry of the offer period or during or after any subsequent offer period), the final offer price in the Potential Offer (if made) payable by the Offeror shall be reduced accordingly on a euro-for-euro basis.
The Offeror reserves the right, at its sole discretion, to make any offer or not and to change the offer price or other conditions of the Potential Offer.
Conditions to completion
The completion of the Potential Offer would be subject to certain customary conditions, including without limitation the obtaining of all necessary regulatory and other approvals and the Potential Offer being validly accepted with respect to shares representing, together with any Uponor shares otherwise acquired by the Offeror and/or any persons acting in concert with the Offeror, more than 60 percent of the issued and outstanding shares and voting rights in the Company.
Aliaxis invites also Uponor’s largest shareholder Oras Invest Oy and its connected persons to accept the Potential Offer, if made. However, as indicated by the more than 60 percent acceptance threshold, Aliaxis would be prepared to complete the Potential Offer, if made, even if Oras Invest Oy and its connected persons would choose not to accept the Potential Offer, in which case Aliaxis would welcome Oras Invest Oy’s continued participation as a long-term shareholder in Uponor.
The Offeror reserves the right, at its sole discretion, to amend any of the terms of the Potential Offer, if made, and any conditions to completion of the Potential Offer as compared to those set out in this release and would reserve the right, at its sole discretion, to waive any of the conditions to completion of the Potential Offer, if made.
Authority approvals
Based on currently available information, the Offeror expects that the Potential Offer would be subject to merger control clearance by the European Commission and potentially other authority approvals, or the expiry of relevant waiting periods, under applicable merger and foreign direct investment control laws in certain jurisdictions. Based on information currently available to it, the Offeror expects that the Potential Offer would lead to a pro-competitive combination of Aliaxis’ and Uponor’s respective businesses that are highly complementary. The Offeror does not anticipate that there would be any material substantive issues with respect to obtaining any such clearances or approvals. The Offeror expects based on currently available information that the European Commission would likely issue clearance in the first phase of the notification proceedings. Accordingly, the Offeror currently estimates that the Potential Offer, if made, could be completed during the third or fourth quarter of 2023. However, the length of the applicable merger and foreign direct investment control proceedings would not be within the control of the Offeror, and there can be no assurances that clearances would be obtained within the estimated timeframe, or at all. The Offeror would reserve the right, under the terms and conditions of the Potential Offer, to extend the acceptance period under the Potential Offer in accordance with applicable laws in order to satisfy the conditions to completion of the Potential Offer, including, among others, the receipt of merger control clearance.
Timing
The timing of the announcement of the Potential Offer, if any, is currently uncertain as it depends on the time required by the Board of Directors of Uponor to respond to Aliaxis’ non-binding intention to make the Potential Offer and on negotiations to be concluded in relation to the Potential Offer. If negotiations advance quickly and the conditions for making the Potential Offer are satisfied or waived by Aliaxis, Aliaxis estimates, based on currently available information, that the Potential Offer could be announced within a few weeks from the date hereof.
Based on information currently available to Aliaxis, and taking into account the expected process for obtaining necessary authority approvals as outlined above, Aliaxis estimates that, should the Potential Offer be announced in the coming weeks, the Potential Offer could be completed during the third or fourth quarter of 2023.
Financing
The Potential Offer, if made, would be funded through a mix of cash and external financing, and would not be conditional on the availability of financing. Aliaxis expects to retain its investment-grade credit rating after the completion of the Potential Offer.
Other
The Potential Offer would only be made pursuant to a tender offer document to be approved by the Finnish Financial Supervisory Authority. Such tender offer document would include all terms and conditions of the Potential Offer, and the shareholders of Uponor may only accept the Potential Offer, if made, on the basis of said tender offer document.
The Offeror undertakes to comply with the Helsinki Takeover Code issued by the Finnish Securities Market Association.
As and to the extent permitted by applicable laws and regulations, Aliaxis reserves the right acquire shares in Uponor in public trading on Nasdaq Helsinki or otherwise before, during or after the date of this release and the announcement, if any, of the Potential Offer, and currently intends to seek to do so as soon as possible. As at the date of this release, Aliaxis and other persons acting in concert with the Offeror as referred to in Chapter 11, Section 5 of the Finnish Securities Markets Act, hold 3,664,526 shares in Uponor, representing approximately 5.0 percent of the issued and outstanding shares in Uponor.
IMPORTANT INFORMATION
THIS RELEASE DOES NOT CONSTITUTE A PUBLIC TENDER OFFER, AND ANY SUCH OFFER, IF MADE, MAY ONLY BE ACCEPTED PURSUANT TO A TENDER OFFER DOCUMENT APPROVED BY THE FINNISH FINANCIAL SUPERVISORY AUTHORITY. THERE CAN BE NO GUARANTEE THAT THE OFFEROR’S NON-BINDING INTENTION WILL EVENTUALLY LEAD TO ANY AGREEMENT BETWEEN THE OFFEROR AND UPONOR OR TO THE MAKING OF THE POTENTIAL OFFER, OR AS TO THE OFFER PRICE, THE TIMING AND TERMS OF ANY SUCH AGREEMENT OR POTENTIAL OFFER. THE TERMS OF THE POTENTIAL OFFER, IF ANNOUNCED, INCLUDING THE OFFER PRICE, MAY DIFFER SUBSTANTIALLY FROM THOSE SET OUT IN THIS RELEASE.
THIS RELEASE MAY NOT BE RELEASED OR OTHERWISE DISTRIBUTED, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO, AUSTRALIA, CANADA, HONG KONG, JAPAN, NEW ZEALAND OR SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH THE TENDER OFFER WOULD BE PROHIBITED BY APPLICABLE LAW.
Information to shareholders in the United States
Shareholders in the United States are advised that the shares in Uponor are not listed on a U.S. securities exchange and that Uponor is not subject to the periodic reporting requirements of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”), and is not required to, and does not, file any reports with the U.S. Securities and Exchange Commission (the “SEC”) thereunder.
If the Potential Offer is made, it will be made for the issued and outstanding shares in Uponor, which is domiciled in Finland, and is subject to Finnish disclosure and procedural requirements. If the Potential Offer is made, it will be made in the United States pursuant to Section 14(e) and Regulation 14E under the Exchange Act, and otherwise in accordance with the disclosure and procedural requirements of Finnish law, including with respect to the timetable, settlement procedures, withdrawal, waiver of conditions and timing of payments, which are different from those of the United States.
To the extent permissible under applicable law or regulations, the Offeror and its affiliates or its brokers and its brokers’ affiliates (acting as agents for the Offeror or its affiliates, as applicable) may from time to time, and other than pursuant to any tender offer that may be made by the Offeror for Uponor, directly or indirectly, purchase or arrange to purchase, shares in Uponor or any securities that are convertible into, exchangeable for or exercisable for such shares. These purchases may occur either in the open market at prevailing prices or in private transactions at negotiated prices. To the extent information about such purchases or arrangements to purchase is made public in Finland, such information will be disclosed by means of a press release or other means reasonably calculated to inform U.S. shareholders of Uponor of such information. In addition, the financial advisers to the Offeror and its affiliates may also engage in ordinary course trading activities in securities of Uponor, which may include purchases or arrangements to purchase such securities. To the extent required in Finland, any information about such purchases will be made public in Finland in the manner required by Finnish law.
Neither the SEC nor any U.S. state securities commission has passed any comment upon the adequacy, accuracy or completeness of the disclosure in this release. Any representation to the contrary is a criminal offence in the United States.
It may be difficult for Uponor’s shareholders to enforce their rights and any claims they may have arising under the U.S. federal securities laws, since the Offeror and Uponor are located in non-U.S. jurisdictions, and some or all of their respective officers and directors may be residents of non-U.
Contacts
Aliaxis
Annamaija Bergius
+32 (0) 478516811
International – FGS Global
Xavier Mas
+33 (0)6 82 52 76 42
Finland – Miltton
Jenny Kestilä
+358 (0)50 615 33
