Voluntary offer announcement- Board of Nortel AS unanimously recommends Unifon's contemplated voluntary cash offer to acquire all shares in Nortel AS.
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Ålesund, 6 July 2023 – Unifon Holding AS ("Unifon" or the "Offeror") has entered into conditional sales agreements with certain shareholders of Nortel AS ("Nortel" or the "Company") for the acquisition of approximately 70% of the shares in the Company and hereby announces, together with Nortel, that Unifon contemplates launching a voluntary cash offer to acquire all remaining outstanding shares of Nortel at a price of NOK 27.50 per share (the "Offer"). The Board of Directors of Nortel (the "Board") has unanimously decided to recommend the shareholders of the Company to accept the Offer. The Offer is the result of a strategic review conducted by the Board in consultation with SpareBank 1 Markets AS. The strategic review was announced by the Company on 15 March 2023 following inquiries received by Nortel from both Norwegian and international companies with an interest to buy the Company. Based on such strategic review, the Board of Directors considers the Offer from Unifon to be the best alternative for the Company.
The Offer price of NOK 27.50 per share (the "Offer Price") values the total share capital of the Company at a market capitalization of NOK 517,088,000 based on 18,803,200 outstanding shares on a fully diluted basis. The Offer Price represents a premium of 9.40%, 11.85% and 21.76% to the volume-weighted average share prices for the three-, six- and twelve-months' periods preceding 14 March 2023, the day before announcement of the strategic review.
The purchase will be financed through a combination of debt and equity, with Christen Sveaas' Kistefos Investment AS expected to become the largest owner in Unifon after the transaction.
“Unifon and Nortel are both strong and innovative challengers in the B2B-segment of the Norwegian telecom market. By joining forces, the aim is to build a stronger challenger to the established players. In this way, we can offer our customers even better and more competitive services,” said CEO Thore Berthelsen of Unifon AS.
“Nortel is the fastest growing provider of mobile services in the Norwegian B2B-market. Unifon's technological platform fits like a glove for Nortel and will make it even easier for our customers to integrate mobile services into their business systems. At the same time, all customers remain on Telenor's network, said Nortel CEO Christian Pritchard.
About the Offeror:
Unifon is a a private limited liability company incorporated in Norway in 2019 by a group of Norwegian entrepreneurs and investors. The Offeror operates in the Norwegian telecom business market solely offering mobile services to companies and corporations. Unifon’s management team and owners have vast experience in the telecom sector with more than ten acquisitions in the past 20 years, conducted with players such as Ventelo, Phonero and Unifon. These transactions include complex acquisitions from financial and industrial players as well as ‘public to private’ projects with subsequent integrations.
About the Offer:
- The Offer Price of NOK 27.50 for the remaining outstanding shares will be settled in cash;
- The Offeror expects to launch the Offer on 10 July 2023 with an acceptance period of four weeks (subject to extension);
- The completion of the Offer will be subject to satisfaction of certain customary conditions, each one of which, to the extent legally permissible, may be waived by the Offeror, including but not limited to,
o that the Offeror obtains (i) a minimum acceptance of 90% of the share capital of Nortel (on a fully diluted basis) and (ii) relevant regulatory approvals;
o that the Board shall not have amended or withdrawn its recommendation of the Offer;
o that no material adverse change and no material breach of the transaction agreement (as defined below) by Nortel have occurred; and
o The Offeror shall have entered into conditional sales agreements with all Nortel shareholders owning 2% or more of the shares in Nortel as of the date of the announcement of the Offer.
The Offer will not contain any conditions as to financing or due diligence.
The Complete details of the Offer, including all terms and conditions, will be included in the offer document (the "Offer Document") to be sent to the Company's shareholders. The offer period (the "Offer Period") is expected to commence no later than 10 July 2023 and continue for a period of four weeks, subject to any extensions. The Offeror must publicly announce that the conditions for completion of the Offer relating to minimum acceptance and regulatory approval have been satisfied or waived at the latest at 12:00 CET on 31 December 2023 unless otherwise agreed between the Company and the Offeror.
This notification does not in itself constitute an offer. The Offer will only be made on the basis of the Offer Document and may only be accepted on the basis of the Offer Document. Furthermore, the Offer will not be made in any jurisdiction in which the making of the Offer would violate applicable laws or regulations or would require actions which the Offeror in its reasonable opinion, after having consulted with the Company, deems unduly burdensome.
Board recommendation:
After Nortel announced the strategic review 15 March, the board has been in contact with several stakeholders and considered various financial and strategic options. Chairman Arild Hustad says the process concluded that the offer from Unifon is the recommended solution for the Company's shareholders.
On 6 July 2023, the Offeror and Nortel entered into a transaction agreement (the "Transaction Agreement") regarding the Offer pursuant to which the Board has agreed to recommend the Offer. Pursuant to the Transaction Agreement, the Board shall not amend or withdraw its recommendation of the Offer unless it receives a bona fide unsolicited superior competing offer that fulfills certain pre-agreed terms, to be further detailed in the Offer Document. When recommending the Offer, the Board has considered the terms and conditions of the Offer and a fairness report from its financial advisor, SpareBank 1 Markets AS, concluding that the Offer is fair from a financial point of view.
“The offer from Unifon is 9.40% above the volume-weighted average share price during the three months before Nortel announced a strategic review, and is 76% higher than the share price in the equity issue in connection with Nortel’s IPO in November 2020. This highlights Nortel's strong increase in value in less than three years and puts Nortel on the Top10 list of companies on the Euronext Growth Oslo based on value increase since its IPO,” said Hustad.
About the conditional sales agreements:
The shareholders having entered into the conditional sales agreements have irrevocable accepted to sell their Shares to Unifon at a purchase price identical to the Offer Price. Completion of the sales agreements are conditional upon the following being met or waived by Unifon and/or the Company, as applicable, (i) the Offer having been completed, (ii) other shareholders in the Company holding at least 70% of the shares in Nortel having entered into agreements with Buyer to sell their shares prior to the launch of the Offer and complied with their obligations under such agreements, and (iii) the Company having resolved to issue the consideration shares, only being subject to completion of the Offer and the consideration shares being subscribed for by shareholders.
Settlement for the shares shall be partly cash and partly consideration shares in the Offeror in the split as set out in each of the respective conditional sales agreements, however so that minimum 2/3 and maximum 3/4 of the purchase price for the shares shall be settled with consideration shares.
The following shareholders have entered into the conditional sales agreements to sell their Shares to Unifon in connection with the Offer:
Lapas AS, Proff Invest AS (CEO Christian Pritchard), Stette Invest AS, Ronja Capital II AS, Sydsæther Holding AS, Byggtorget Holding AS, Investel AS, Arisona Holding AS (Chairman Arild Hustad), Dag Normand Nåheim (CFO), In Decision AS (Board member Ivar Nesset), Digital Hverdag AS (Board member Bente Sollid Storhaug).
Compulsory acquisition and de-listing of Nortel from Euronext Growth Oslo
The Offeror intends to make a compulsory acquisition of the remaining shares in Nortel upon acquiring more than 90% of the shares in Nortel under the Offer. Further, subject to the outcome of the Offer, the Offeror intends to propose to the general meeting of Nortel that an application is filed with the Oslo Stock Exchange to de-list the shares of Nortel from Euronext Growth Oslo.
Advisors:
Advokatfirmaet Wiersholm AS is acting as legal advisor and DNB Markets, a part of DNB Bank ASA, is acting as financial advisor and receiving agent to Unifon.
SpareBank 1 Markets AS is acting as financial advisor and AGP Advokater AS is acting as legal advisor to Nortel.
For further information, please contact:
For Nortel:
Arild Hustad, Chairman
Arild.hustad@me.com
For Unifon:
Gunnar Jacobsen, Chairman
Gunnar.Jacobsen@kistefos.no
About Nortel:
• Nortel was established in September 2019 as a challenger to Telia and Telenor in the Norwegian business market for mobile services. The company was listed on Euronext Growth the following year.
• By the end of Q1 2023, Nortel had 73,900 active SIM cards.
• Nortel is the third largest supplier in the Norwegian telecom business market.
• The company was the novel supplier in Norway to offer customers limitless data traffic at a fixed low price and has since created a new dynamic and fashioned further development in the Norwegian telecom business market through a number of innovations.
• In March 2023, Nortel launched its new solution through which customers will be able to gather different systems in a single cloud-based communications platform.
Important notice:
This information is considered inside information pursuant to the EU Market Abuse Regulation and is subject to disclosure requirements according to section 5-12 of the Norwegian Securities Trading Act. The information was submitted for publication by Christian Pritchard, on behalf of the Company, on 6 July 2023 at 5:25 PM CEST.
The Offer and the distribution of this announcement and other information in connection with the Offer may be restricted by law in certain jurisdictions. The Offeror and Nortel assume no responsibility in the event that there is a violation by any person of such restrictions. Persons who are in possession of this announcement or such other information are required to inform themselves about and to observe any such restrictions.
This announcement contains certain forward-looking statements within the meaning of the securities and laws and regulations of various international, federal, and state jurisdictions. All statements, other than statements of historical fact, included herein, including without limitation, statements regarding the Offer, future plans and objectives of Nortel or the Offeror are forward-looking statements that involve risk and uncertainties. There can be no assurances that such statements will prove to be accurate and actual results could differ materially from those anticipated in such statements.