Reading time ( words)
VDL Groep BV (VDL) announces that the industrial family business with its head office in Eindhoven (or one of its group companies or affiliated parties) will make a public offer for all issued and outstanding shares in the capital of Neways Electronics International NV (Euronext Amsterdam).
Public offer of € 13.00 per Neways share, payable in cash (cum dividend).
The offer represents a significant premium of 19.3% compared to the closing price of the Neways share on April 29, 2021 (the last trading day before the first announcement of the consultation between VDL and Neways about a public offer) and a very significant premium of 38.9% on the 3-month VWAP as of that date.
VDL is determined to move forward with further developing its competences in the field of mechanics, electronics and software; a combination with Neways is the best option for all involved.
A combination with VDL creates strategic opportunities and growth opportunities for Neways, the Neways employees and other stakeholders.
The majority of the shareholders outside of VDL has already declared their willingness to offer their shares at the offer price (together with VDL approximately 70% of the shares).
With the public offer, VDL also gives the remaining approximately 30% of the shareholders of Neways the opportunity to accept the public offer.
VDL's intention remains to have a constructive dialogue with the management board and the supervisory board of Neways about the intended transaction.
VDL has been supporting Neways since 1995 as a very committed shareholder. The success with customers of both VDL and Neways is increasingly determined by the collaboration between multi-disciplinary teams in the field of mechanics, electronics and software. Customers are expressly looking for parties of a significant size that also have all the competencies in-house and can offer them in combination. VDL is determined to give further substance to this and has already taken concrete steps to this end.
Against this background, VDL has considered the possibility of a combination between VDL and Neways. The combination would be logical from a commercial perspective, given the overlap in industries in which VDL and Neways are active and thus offer strategic opportunities and growth opportunities for Neways.
As a result of that deliberation, VDL has, as announced, held discussions with the Executive Board and Supervisory Board of Neways in order to reach agreement on a public offer to be made by VDL for all shares in the capital of Neways. Despite an increase in the offer price to € 13.00 per share, the support of at least 68.70% of the shareholders for an offer for that offer price, as well as positive reactions from various key customers, the talks with Neways did not lead to an agreement on the price. . More specifically: about the fairness of the bid price. A position that VDL has taken note of with surprise.
However, VDL remains convinced that a combination of Neways with VDL offers significant benefits for all those involved and is the best route forward for Neways and its stakeholders. That is why VDL is still going to make a public offer for all shares in the capital of Neways. This also gives the remaining 31.30% of the shareholders of Neways the opportunity to sell their interest at a very attractive price – in VDL's opinion.
As a family business, VDL strives for involvement and continuity. We prefer to invest in sustainable innovation and development for the long term rather than using financial resources to pay dividends in the short term. This approach also creates personal growth and development opportunities for Neways employees. These considerations lead to the firm conviction that a combination of VDL and Neways is clearly in the interest of Neways and all those involved. VDL therefore sees this announcement as an important step towards achieving that combination.
The VDL offer
On the basis of the conditions, as set out below, VDL is prepared (by VDL or one of its group companies or affiliated parties) to make a public offer for all issued and outstanding shares in the capital of Neways of € 13.00 per share. Neways, payable in cash (cum dividend) on the transfer date (the “VDL Offer”).
The VDL bid represents:
- a premium of 19.3% compared to the closing price of the share on April 29, 2021 (being the last trading day before the first announcement of the consultation between VDL and Neways on an indicative proposal of € 12.50 per share);
- a premium of 38.9% to the volume weighted average price (“VWAP”) over a period of 3 months prior to April 29, 2021;
- a premium of 47.7% to the volume weighted average price (VWAP) over a 6-month period prior to April 29, 2021; and
- a 55.9% premium to the volume weighted average price (VWAP) over a 12 month period prior to April 29, 2021.
- We would also like to point out that last March a major shareholder of Neways sold approximately 5% of the shares to another professional party for a price of € 9.22, with this VDL offer being no less than 41% higher.
The VDL offer will be subject to the customary launch and closing conditions for a transaction of this nature, including (but not limited to) obtaining the necessary antitrust and other regular approvals and the non-occurrence of events that have a material adverse effect. would have on Neways. The VDL offer will not be declared unconditional, so that VDL intends to honor any acceptance percentage. However, our objective remains undiminished to acquire all issued and outstanding shares of Neways.
VDL is in a financially healthy position and has sufficient resources to finance the VDL offer.
Irrevocable undertakings from shareholders of Neways to offer their shares, including the interest of VDL, represent a total of 68.70% of the issued and outstanding capital of Neways. The acceptance under the VDL offer of the irrevocably committed shares will take place at the same offer price and under the same conditions as those applicable to the VDL offer. The shareholders may withdraw their respective irrevocable undertakings if an alternative transaction is announced that exceeds the value of the offer price below the VDL offer by at least 10% and VDL does not subsequently match this increase.
In the interest of all those involved, VDL strives for a careful and rapid completion of the process. VDL will submit an application for approval of the offer memorandum to the Netherlands Authority for the Financial Markets (AFM) as soon as possible and within the statutory period.
VDL's intention remains to have a constructive dialogue with the management and the supervisory board of Neways about the intended transaction.
VDL is assisted by ING Groep NV (financial advisor) and Houthoff Coöperatief UA (legal advisor).