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Press release

Statement by the Board of Directors of BRIO AB in relation to the public offer by Proventus Invest AB

BRIO logotype

The Board of Directors of BRIO unanimously recommends the shareholders to
accept the public offer by Proventus Invest1

Background
This statement is made by the Board of Directors (the ”Board”) of BRIO AB (publ) (”BRIO” or the ”Company”) pursuant to section II.19 of the rules concerning public takeover offers on the stock market adopted by Nordic Growth Market NGM AB (”NGM AB”) (the ”Takeover Rules”).

Proventus Invest AB (”Proventus”) has today, on 10 March 2011, announced a public offer to the shareholders of BRIO to transfer all of their shares in BRIO to Proventus (the ”Offer”). Proventus is offering SEK 3.00 per series A and B ordinary share and per series C preference share, and SEK 0.78 per series D preference share in BRIO, corresponding to a total value of the Offer amounting to SEK 31 million. The offer is unconditional. According to the preliminary timetable set out in the press release through which the Offer was announced (“the Offer Press Release”), the acceptance period is expected to commence on 28 March 2011 and end on 26 April 2011. Settlement will be made continuously during the Offer.

The volume-weighted average share prices on NGM Equity (”NGM”) during the last 20 trading days up to and including 9 March 2011 (i.e. the last trading day before announcement of the Offer) is SEK 3.00 for series B, SEK 2.80 for series C and SEK 0.78 for series D. The Board notes that, compared with these share prices, the Offer corresponds to 100% of the price of the series B share, 107% of the price of the series C share and 100% of the price of the series D share. Compared with the latest prices paid on NGM on 9 March 2011, the Offer corresponds to 108% of the price of the series B share, 116% of the price of the series C share and 110% of the price of the series D share.

Proventus has been the principal shareholder in BRIO since 2004 and reportedly controls a total of 91.8% of the share capital and 88.8% of the votes in the Company. BRIO’s series B ordinary shares, series C preference shares and series D preference shares are being traded on NGM. In the Offer Press Release, Proventus has expressed that since it now has a holding in BRIO exceeding 90%, Proventus will initiate compulsory purchase proceedings for the outstanding shares and strive for a de-listing of the BRIO B, C and D-shares from NGM.

The Chairman of the Board, Heikki Takanen, and the Board member, Gabriella Sahlman, have abstained from participating in the Board’s deliberations and resolutions regarding the Offer, as they due to assignments and employment, respectively, are associated with Proventus and thereby cannot be regarded as independent from Proventus. For further information about the Offer, reference is made to Proventus’ press release which was made public earlier today.

As a part of the Board’s evaluation of the Offer, the Board has engaged Danske Bank Corporate Finance (a department within Danske Bank A/S, Sverige Filial) (”Danske Bank”) as financial advisor and Mannheimer Swartling Advokatbyrå as legal advisor.

The Board’s recommendation
The Board has, in accordance with section III.3 in the Takeover Rules, procured a valuation report from Danske Bank regarding the Offer.

It follows from Danske Bank’s report (a so called “Fairness Opinion”) that, subject to the limitations and assumptions stated therein, the consideration offered by Proventus is reasonable from a financial standpoint for the shareholders in BRIO.2

Apart from the purely financial perspective, the Board’s recommendation is based on an assessment of a number of factors that the Board has considered relevant for the evaluation of the Offer. These factors include the Company’s present position, the expected future development of the Company and possibilities and risks related thereto.

The Board observes in this connection among other things that the liquidity of the BRIO shares is low, which makes it more difficult for the shareholders to trade in the shares. Proventus has furthermore stated that it already today holds in aggregate 91.8% of the share capital and 88.8 % of the votes in the Company, which implies that NGM’s listing requirements for dispersal of ownership will no longer be met. Further, Proventus has in the Offer Press Release stated its intent to initiate compulsory purchase proceedings for the remaining shares in the Company and to strive for a de-listing of the Company from NGM. It can therefore be expected that, going forward, prerequisites for an efficient trade and pricing of the shares will not be at hand.

The Board further observes that BRIO has been reporting losses for a substantial time. To strengthen BRIO’s financial situation and improve its prospects of becoming profitable, a reconstruction was implemented in 2009. However, the profitability problems have continued, and in 2010 BRIO’s net loss was SEK 67 million. Proventus has stated in the Offer Press Release that it believes that further reconstruction measures are needed in order for BRIO to achieve sustainable profitability. The Board shares this view and has also taken this circumstance into consideration when evaluating the Offer.

Based on an overall assessment and taking into consideration the facts and circumstances set forth above, the Board unanimously recommends the shareholders of BRIO to accept the Offer.3

The Board will later on, in accordance with the Takeover Rules, and on the basis of what Proventus will state in its offer document, present its view on the impact the completion of the Offer may have on BRIO, especially employment, and its views on Proventus’ strategic plans for BRIO and the impact these could be expected to have on employment and on BRIO’s business locations.

Swedish law applies to this statement and the statement shall be interpreted in accordance therewith. Any dispute regarding or in connection with this statement shall
be exclusively settled by Swedish Court.

Malmö on 10 March 2011
BRIO AB (publ)
The Board of Directors

For further information please contact:
Dag Ivarsson, Board member of BRIO AB (publ), telephone: +46 479 100 59

BRIO AB (publ) discloses the information provided herein pursuant to the Securities Market Act (2007:528) and the Takeover Rules. The information was submitted for publication on 10 March 2011 at 08:15AM.

BRIO is a Swedish company that develops and sells toys, prams, children’s car seats and children’s furniture. The company was formed in 1884 and is today an international Group with the BRIO, Alga, SIMO and Carena brands. The company has about 300 employees, is represented in over 50 countries and has been listed on the O-list of the OMX Nordic Exchange Stockholm since 1985.
www.brio.net

 



1 The Chairman of the Board, Heikki Takanen, and the Board member, Gabriella Sahlman, have abstained from participating in the Board’s deliberations and resolutions regarding the Offer, as they due to assignments and employment, respectively, are associated with Proventus and thereby cannot be regarded as independent from Proventus.

2 The fairness opinion from Danske Bank is made public in connection to this statement and shall be read in its entirety for the reader to understand the limitations set forth therein. The fee payable to Danske Bank is not dependent on the size of the Offer or to what extent the Offers is accepted.

3 See note 1.