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NOT FOR RELEASE IN THE UNITED STATES, JAPAN, CANADA OR AUSTRALIA
(Unofficial translation from the original in Finnish)
The Finnish Financial Supervision Authority has today (14 June 2002) approved the offering circular as well as the terms and conditions drafted by KONE Finance Corporation ("KONE") for the purpose of making a public tender offer for the shares and securities issued by Partek Corporation ("Partek").
The offering circular shall be made available in Finnish and Swedish as of 18 June 2002 at the latest in the Helsinki Exchange's HEXGATE information office and service point as well as in Nordea Bank's asset management branch offices in Finland. In addition, the offering circular shall be made available on the Internet (www.nordeasecurities.com, www.kone.com and www.nordea.fi).
Background to the offer
On 21 May 2002 KONE Corporation entered into a preliminary agreement with the state of Finland. Following the preliminary agreement, on 14 June 2002 KONE Corporation and KONE acquired 14,721,835 Partek shares from the state. The purchase price was EUR 15.30 per Partek share. The acquired shares represent 30.2 percent of Partek's shares and votes. In the transaction, KONE Corporation acquired 6,927,451 Partek shares in exchange for 3,000,000 new shares in KONE Corporation at an issue price of EUR 35.33 per share. Simultaneously, KONE acquired 7,794,384 Partek shares in cash. In conjunction with the acquisition of shares from the state, the parties to the transaction agreed that KONE submit a conditional public tender offer for the rest of Partek's outstanding shares at the price of EUR 15,30 per Partek share. It is KONE's intention to acquire all shares and securities entitling to shares issued by Partek and subsequently seek de-listing of Partek shares from the Helsinki Exchanges.
KONE Group's intention is to create an industrial and service company of Finnish origin with significant size, strong global market positions in its businesses and excellent opportunities for profitable growth. KONE's aim is the long-term development of Partek according to Partek's communicated strategy by utilizing the financial strength and global industrial expertise of the combined entity.
Shareholders having already accepted the offer
All the largest shareholders of Partek, who together hold 29.9 percent of the shares and votes in Partek, have already unilaterally announced that they will accept KONE's offer. When combining the shares held by these shareholders and the shares held by KONE Group, the offer is supported by shareholders holding 61.6 percent of the shares and votes in Partek.
Terms and conditions of the offer in brief
The offer consists of the Share Offer, the Option Right Offer, the Convertible Subordinated Bond Offer and the Convertible Capital Loan Offer, which together form the offer ("Offer"). The Offer shall
include all a) shares issued by Partek that are not owned by KONE or companies belonging to KONE Group; b) option rights issued by Partek in 1997 marked as series A and series B; c) convertible subordinated bonds issued by Partek in 1994 with nominal value of EUR 1,681.88; and d) convertible capital loans issued by Partek in 1999 with nominal value of EUR 1,681.88. The Offer shall not include securities and rights issued by Partek that are held by Partek or its affiliates.
The offer price shall be EUR 15.30 for a Partek share, EUR 0.01 for an option right, EUR 1,918.92 for a convertible subordinated bond and EUR 2,186.30 for a convertible capital loan. Total value of the Offer is EUR 612,583,290 excluding the remuneration of interest payable to the shareholders accepting the Share Offer and excluding the accrued interest payable to the owners of convertible subordinated bonds and convertible capital loans accepting the Convertible Subordinated Bond Offer and the Convertible Capital Loan Offer.
Provided that KONE consummates the Offer and a shareholder accepts the Share Offer before 16:00 hrs on 16 August 2002, the shareholder will receive a remuneration of interest according to annual interest of 5.00 percent (actual/365). The accrual of the remuneration of interest commences when a shareholder tenders his shares according to terms and conditions of the Offer and expires on 16 August 2002. The offer price for the option right is inclusive of similar remuneration of interest, and no separate remuneration of interest shall be paid to the owner of option right. The owner of convertible subordinated bonds or convertible capital loans shall receive accrued interest according to applicable terms and conditions of the security until the payment date of the offer price, and no additional remuneration of interest shall be paid to the owner of convertible subordinated bonds or convertible capital loans. Both the remuneration of interest and the accrued interest payable to the bonds and loans shall be subject to withholding tax when required by the law.
The offer period commences on 18 June 2002 and expires on 16 August 2002 at 16:00 hours Helsinki time. The offer period may be extended via stock exchange release issued prior to expiration of the offer period.
The Offer is conditional on a) KONE receiving over 90 percent of the shares and votes in Partek when combining the shares tendered to KONE in the Offer and shares held by KONE Group; b) the Option Right Offer, Convertible Subordinated Bond Offer and Convertible Capital Loan Offer being accepted to the extent that it is not possible to dilute KONE Group's holding below 90 percent of the shares and votes in Partek by subscribing shares in Partek with securities and rights in question; c) KONE receiving all necessary public authority approvals and all conditions potentially set forth in these approvals being acceptable to KONE; d) KONE having had the opportunity to conduct a due diligence investigation into Partek and no matters or issues having been found in this investigation or outside the investigation which have or may have negative impact on the value or financial position of Partek. The investigation requires the permission of Partek's board of directors; and e) Partek will not initiate or undertake any actions during the offer period or during the extended offer period which may have material negative impact on the value of Partek's shares or business. KONE reserves the right to waive any or all of these conditions at its own discretion.
The result of the Offer will be announced by issuing a stock exchange release without delay following the expiration of the offer period and confirmation of the result. The announcement is expected to occur on 21 August 2002 or, if the offer period is extended, on the third (3rd) banking day following the expiration of the offer period and confirmation of the result. The announcement will hold whether KONE consummates the Offer or not.
Should KONE consummate the Offer, the offer price will be paid on the fifth (5th) banking day following the expiration of the offer period. The ownership and title to the shares, option rights, convertible subordinated bonds and convertible capital loans tendered to KONE shall be transferred to KONE in exchange for the payment of applicable offer price. KONE will accept and be liable for the potential asset transfer tax payable in Finland resulting from the Offer. In addition, KONE will accept and be liable for the expenses relating to the acceptance of the Offer, which are considered fair and in accordance with Finnish market practices.
The Offer will be subject to Finnish law, and disputes relating to the Offer shall be resolved in the court of jurisdiction in Finland.
The offering circular will be available only in Finnish and Swedish, and therefore the terms and conditions of the Offer shall not be available in any other language than Finnish and Swedish. With regards to acceptance procedure and questions relating to the Offer, the investors are instructed to turn to their asset managers and nominee register custodians for further information.
Secretary to the Board of Directors
KONE Finance Corporation
Chairman of the Board of Directors
This stock exchange release must not be released or distributed in whole or in part in or into the United States of America, Canada, Australia or Japan.
The offer is not being made directly or indirectly in or into the United States of America, or by use of the mails or by any means or instrumentality (including without limitation facsimile transmission, telex, telephone and the internet) of interstate or foreign commerce, nor is it being made directly or indirectly in or into Canada, Australia or Japan.
Enquiries in relation to Kone Corporation:
Senior Vice President and CFO
Mr. Aimo Rajahalme
tel. +358 20 475 4484
Enquiries in relation to the transaction structure should be addressed to:
Mr. Kalle Reponen
tel. +358 9 4785 0330
Enquiries in relation to the acceptance procedure should be addressed to:
Mr. Ossi Vasala
tel. +358 9 4785 0351