[April 21, 2017] |
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Announcement of Commencement of Tender Offer for Share Certificates, Etc. of PanaHome Corporation (Stock Code: 1924) and Termination of Share Exchange Agreement between Panasonic Corporation and PanaHome Corporation
Panasonic Corporation (the "Tender Offeror") hereby announces that the
Tender Offeror resolved at a meeting of its board of directors held
today to acquire shares of common stock (the "Target Company's Shares")
of PanaHome Corporation (Stock Code: 1924, First Section of the Tokyo
Stock Exchange, Inc. (the "Tokyo Stock Exchange"), the "Target Company")
through a tender offer (the "Tender Offer") in accordance with the
Financial Instruments and Exchange Act (Act No. 25 of 1948, as amended,
the "Act"), as set forth below. Also, in connection therewith, each of
the Tender Offeror and the Target Company resolved at meetings of their
respective boards of directors held today to terminate, by mutual
agreement, the share exchange agreement between both companies (the
"Share Exchange Agreement") that was announced by the Tender Offeror and
the Target Company in the press release titled "Panasonic Corporation
Announces to Have Executed a Share Exchange Agreement to Make PanaHome
Corporation its Wholly-owned Subsidiary through Share Exchange" dated
December 20, 2016 (the "December 20, 2016 Press Release"). Also today,
both companies terminated the Share Exchange Agreement by mutual
agreement.
Please note that, pursuant to the "Memorandum of Understanding with
respect to the Termination of the Share Exchange Agreement and
Implementation of the Tender Offer" entered into by and between the
Tender Offeror and the Target Company as of today (the "MoU"), the
implementation of the Tender Offer is subject to each of the following
conditions (collectively the "Conditions of the Tender Offer") being
satisfied: (i) from the execution date of the MoU until the commencement
date of the Tender Offer, no event that will have a material adverse
effect on the businesses, assets, debts, financial position, results of
operations, cash flow or profit plans has occurred or realized in
relation to the Target Company itself or the whole group including the
Target Company and its subsidiaries, and no other event that will be a
material interference of the achievement of a purpose of the Tender
Offer has occurred or realized; (ii) the Target Company's meetings of
its board of directors lawfully and validly resolve to express an
opinion in favor of the Tender Offer, and to recommend that the
shareholders of the Target Company accept the Tender Offer, and such
resolution has not been changed or withdrew; (iii) there are no
judgements, decisions or orders, etc. by a judicial or administrative
body that restrict or prohibit the commencement of the Tender Offer and
there are no procedures pending in a judicial or administrative body
seeking to restrict or prohibit the commencement of the Tender Offer;
and (iv) there are no unpublicized material facts (the material facts
set forth in paragraph 2, Article 166 of the Act) with respect to the
Target Company and the Tender Offeror is not aware of any unpublicized
facts concerning a tender offer, etc. (the facts set forth in paragraph
3, Article 167 of the Act) of the Target Company's Shares.
1.
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Purpose, etc. of Tender Offer
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(1)
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Overview of the Tender Offer
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As of the date hereof, the Tender Offeror holds 91,036,634 shares (a
shareholding ratio (Note) of 54.18%) of the Target Company's Shares
that are listed on the First Section of the Tokyo Stock Exchange,
and the Target Company is a consolidated subsidiary of the Tender
Offeror.
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(Note)
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"Shareholding ratio" means any shareholding ratio relative to the
total number of issued shares of the Target Company as of March 31,
2017 (i.e., 168,563,533 shares) less the number of treasury shares
held by the Target Company as of the same day (i.e., 541,791 shares)
(equating to 168,021,742 shares) (shareholding ratios are rounded up
or down to second decimal places), and hereinafter the same shall
apply.
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The Tender Offeror resolved at the meeting of its board of directors
held today to implement the Tender Offer, with the commencement date
of the Tender Offer being April 28, 2017, as a part of a transaction
aiming to acquire all of the Target Company's Shares (excluding the
Target Company's Shares held by the Tender Offeror and the treasury
shares held by the Target Company) and make the Target Company a
wholly owned subsidiary of the Tender Offeror (the "Transaction to
Make the Target Company a Wholly Owned Subsidiary") (hereinafter,
the Transaction to Make the Target Company a Wholly Owned Subsidiary
by way of the Tender Offer and the following procedures shall be
referred to as the "Transaction"). The Tender Offeror will implement
the Tender Offer subject to the Conditions of the Tender Offer being
satisfied.
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As announced in the December 20, 2016 Press Release, each of the
Tender Offeror and the Target Company resolved at meetings of their
respective boards of directors held on December 20, 2016 to conduct
a share exchange (the "Share Exchange") in order to make the Tender
Offeror the wholly owing parent company after the share exchange and
the Target Company a wholly owned subsidiary after the share
exchange, and both companies have executed the Share Exchange
Agreement. Since the Tender Offeror and the Target Company decided,
however, to change the scheme of the Transaction to Make the Target
Company a Wholly Owned Subsidiary and implement the Tender Offer by
the Tender Offeror as a part of such transaction, the Tender Offeror
and the Target Company resolved at meetings of their respective
boards of directors held today to terminate, by mutual agreement,
the Share Exchange Agreement, and, on the same day, both companies
terminated the Share Exchange Agreement by mutual agreement. For
details of the background to and reasons for the change in scheme
mentioned above, please refer to the section titled "(iii)
Background to the implementation of the Tender Offer by the Tender
Offeror after the execution of the Share Exchange Agreement," under
"a. Background to, purpose of and decision making process of the
Tender Offer," of "(2) Background to, Purpose of and Decision Making
Process of the Tender Offer, and Management Policy After the Tender
Offer" below.
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Since the Tender Offeror has not set a limit on the maximum or
minimum number of shares to be purchased through the Tender Offer,
the Tender Offeror will acquire all of the share certificates, etc.
tendered (the "Tendered Shares, Etc.") in response to the Tender
Offer.
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In addition, if the Tender Offeror fails to acquire all of the
Target Company's Shares (excluding the Target Company's Shares held
by the Tender Offeror and the treasury shares held by the Target
Company) through the Tender Offer, the Tender Offeror intends to
require that the Target Company perform each procedure set forth in
the section titled "(3) Policy for Organizational Restructuring,
etc. After the Tender Offer (Matters Relating to So-called 'Two-tier
Acquisitions')" below (the "Procedures for Making the Target Company
a Wholly Owned Subsidiary") in order to make the Target Company its
wholly owned subsidiary.
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According to the "Announcement of Termination by Mutual Agreement of
the Share Exchange Agreement with Panasonic Corporation, the
Controlling Shareholder of PanaHome, and PanaHome's Opinion in Favor
of the Tender Offer for PanaHome's Shares by Panasonic Corporation
and Recommendation to Tender Shares" which was announced by the
Target Company as of today (the "Target Company's Press Release"),
the Target Company determined that (i) in order for the Target
Company to deal with medium to long term management challenges, it
is necessary to become a wholly owned subsidiary of the Tender
Offeror through the Transaction, and therefore the implementation of
the Transaction will contribute to increasing the Target Company's
corporate value, (ii) with respect to the Tender Offer, changing the
scheme from the Share Exchange to the Transaction will not cause any
particular disadvantages to the Target Company's shareholders other
than the Tender Offeror, and in fact the Target Company believes it
will make it possible to provide an opportunity for the Target
Company's shareholders other than the Tender Offeror to enjoy even
greater premiums, and therefore the Transaction provides to the
Target Company's shareholders a reasonable opportunity to sell the
shares, and has resolved at its board of directors meeting held
today, to terminate by mutual agreement the Share Exchange Agreement
as of today, and to express an opinion in favor of the Tender Offer,
and to recommend that the shareholders of the Target Company accept
the Tender Offer.
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For details of the Target Company's opinion regarding the Tender
Offer and the decision making process of the Target Company, please
refer to the Target Company's Press Release and the section titled
"(iv) Background to the decision of the Target Company to support
the Tender Offer and reasons therefor," under "a. Background to,
purpose of and decision making process of the Tender Offer," of "(2)
Background to, Purpose of and Decision Making Process of the Tender
Offer, and Management Policy After the Tender Offer" below and the
section titled "e. Unanimous Approval of Directors and the No
Objection Opinion of All Company Auditors (Excluding Directors and
Company Auditors with Conflicts of Interest," "(Measures to Ensure
the Fairness of the Tender Offer Such As Measures to Ensure the
Fairness of the Tender Offer Price and Measures to Avoid Conflict of
Interests)" under "(ii) Background of Calculation" of "(4) Basis of
Calculation, etc. of the Tender Offer Price," of "2. Outline of the
Tender Offer" below.
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(2)
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Background to, Purpose of and Decision Making Process of the
Tender Offer, and Management Policy After the Tender Offer
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a.
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Background to, purpose of and decision making process of the
Tender Offer
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(i)
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Background to and reasons for the Tender Offer
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The Tender Offeror was founded in 1918 as Matsushita Electric
Housewares Manufacturing Works (Matsushita Denkikigu Seisakusho) and
started to manufacture wiring devices. In December 1935, it was
reorganized as Matsushita Electric Industrial Co., Ltd. (the Tender
Offeror had used the trade name Matsushita Electric Industrial Co.,
Ltd. until it changed its trade name to the current name, Panasonic
Corporation, in October 2008). In May 1949, the Tender Offeror
listed its stock on the First Section of the Tokyo Stock Exchange
and the First Section of the Osaka Securities Exchange Co., Ltd.
(the "Osaka Securities Exchange"; in July 2013, the cash markets of
the Tokyo Stock Exchange and the Osaka Securities Exchange were
integrated, and as a result thereof, the shares of the Tender
Offeror have been allocated to the First Section of the Tokyo Stock
Exchange), and in September 1951, the Tender Offeror' listed on the
First Section of the Nagoya Stock Exchange, Inc. Thereafter, the
Tender Offeror made Matsushita Electric Works, Ltd. ("Panasonic
Electric Works") its subsidiary in April 2004, and made SANYO
Electric Co., Ltd. its subsidiary in December 2009, and, in order to
further strengthen the competitive power of the Panasonic Group, the
Tender Offeror made each company a wholly owned subsidiary in April
2011. In addition, in January 2012, the Tender Offeror absorbed
Panasonic Electric Works by way of an absorption-type merger and
restructured its organization based on the business model and
transformed its corporate structure to consist of 9 domains and 1
marketing section. Further, in April 2013, in order to recover the
competitive power of individual businesses, the Tender Offeror
gradually dissolved the 9 domains and reorganized the 88 business
units which had been placed under the 9 domains into 49 business
divisions (36 business divisions as of the end of March, 2017), and
established a structure consisting of four Divisional Companies
(Note 1), consisting of "Appliances Company," "Eco Solutions
Company," "AVC Networks Company" (as from April 1, 2017, "Connected
Solutions Company," after having revised a part of the structure of
the AVC Networks Company) and "Automotive & Industrial Systems
Company", which is the basis of the current structure. As of today,
the Panasonic Group, with the Tender Offeror at the top, continues
to expand development, manufacturing, sales and servicing activities
as a general electronics manufacturer. The Panasonic Group consists
of the Tender Offeror, 495 consolidated subsidiaries and 91
associated companies as of the end of March, 2017.
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(Note 1) The outline of the four Divisional Companies of the
Tender Offeror is as set forth below.
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Appliances Company
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Development, manufacturing and sale of consumer electronics (such as
TVs, refrigerators, washing machines, personal-care products, micro
wave ovens, video equipment, home audio equipment, vacuum cleaners
and rice cookers), air-conditioners and related products (such as
room air-conditioners and large-sized air-conditioners), cold chain
equipment (such as showcases) and other devices (such as compressors
and fuel cells)
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Eco Solutions Company
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Development, manufacturing and sale of lighting fixtures, lamps,
wiring devices, solar photovoltaic systems, water-related products,
interior furnishing materials, exterior materials, ventilation and
air-conditioning equipment, air purifiers, nursing-care-related
products and bicycle-related products
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Connected Solutions Company
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Development, manufacturing, sale of, and providing services relating
to, products such as aircraft in-flight entertainment systems, PCs
and tablets, projectors, surveillance cameras,
electronic-component-mounting machines and welding equipment
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Automotive & Industrial Systems Company
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Development, manufacturing and sale in connection with Automotive
products (such as automotive infotainment-related equipment and
electrical components), the Energy products (such as dry batteries
lithium-ion batteries and automotive batteries,) and the Industrial
products (such as electronic components, automation controls,
electronic materials, semiconductors and LCD panels)
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Since its establishment, the Tender Offeror has been developing
business globally as a general electronics manufacturer under its
basic management philosophy, which states that "the mission of an
enterprise is to contribute to the progress and development of
society and the well-being of people worldwide through its
business activities." In recent years, the Tender Offeror has been
operating its businesses in the automobile (Note 2), housing and
B2B (Note 3) business fields, in addition to the consumer
electronics field, under its brand slogan, "A Better Life, A
Better World" to expand its business fields to serve customers and
society.
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(Note 2)
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The products of the automotive business include general equipment
and systems to be installed in cars. In the Panasonic Group, the
automotive business is mainly operated by the Automotive &
Industrial Systems Company. By seamlessly integrating the image
processing, downsizing, optics, heat radiation, sensing, and other
technologies used in the Group's digital consumer electronic
products with the infotainment-related technologies that have been
developed over many years and are typically used in its car AVC
equipment as well as its battery technologies, the Automotive &
Industrial Systems Company is targeting further business growth.
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(Note 3)
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At the Panasonic Group, the B2B business is the Tender Offeror's
solutions business mainly to service industry customers. In the B2B
business, the Panasonic Group has focused on key fields including
"retail/logistics," "entertainment," "public," and "avionics" and,
by becoming a service industry expert in these fields, the Tender
Offeror has been providing value-oriented solutions that integrate
core products and services with end users.
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The Target Company was established in 1963 as National House
industrial Co., Ltd. (National Juutaku Kenzai Kabushiki Kaisha)
through the joint investment of Matsushita Electric Industrial
Co., Ltd. (currently, the Tender Offeror), Matsushita Electric
Works, Ltd. (subsequently, Panasonic Electric Works), and other
parties (investment ratio of 50.00% by Matsushita Electric
Industrial Co., Ltd. and 49.87% by Matsushita Electric Works,
Ltd.) with founder Konosuke Matsushita's strong sense of mission
that "creating optimal houses to provide the most important
foundation for human lives". Thereafter, in October 1971, the
Target Company listed its stock on the Second Section of the Tokyo
Stock Exchange and the Second Section of the Osaka Securities
Exchange, and in August 1972, its stock was allocated to the First
Section of the Tokyo Stock Exchange and the First Section of the
Osaka Securities Exchange. In addition, in August 1982, the Target
Company changed its trade name to National House Industrial Co.,
Ltd. (National Juutaku Sangyou Kabushiki Kaisha, no change
was made to the English translation of the trade name); and in
October 2002, it merged with 28 major consolidated subsidiaries
that handled marketing, logistics, construction and services and
also changed its trade name to PanaHome Corporation, the same name
as its product brand. As Panasonic Electric Works became a
subsidiary of the Tender Offeror in April 2004, the Target Company
became a consolidated subsidiary of the Tender Offeror. In January
2012, as a result of an absorption-type merger of Panasonic
Electric Works by the Tender Offeror, the Tender Offeror succeeded
to the Target Company's Shares that had been held by Panasonic
Electric Works, and the number of the Target Company's Shares held
by the Tender Offeror has been 91,036,634 shares since then.
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As a core company in the Panasonic Group's housing business, by
utilizing the Tender Offeror's know-how and technologies for home
construction centered on the housing equipment business, in
addition to the housing design and architecture technologies and
the materials and construction quality management know-how that
the Target Company has developed over many years, the Target
Company has been aiming to become a company that is able to move
people and generate creativity in life and constantly provide
optimum comfort, health and joy based on its basic policy,
"Customers First". In recent years, the Target Company has placed
four business areas, "custom-built housing," "urban development,"
"residential stock," and "overseas businesses," at the heart of
its business operations and has promoted its growth strategy by
strengthening its partnership with each company of the Panasonic
Group.
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In addition, recently, as one of the engagements by Tender Offeror
and the Target Company covering "Remodeling Business," "New
Construction and Urban Development Business," "Age-Free
(elderly-care) Business," "Home Energy Management Business" and
"Overseas Business" as major areas in the housing business
strategies of the Panasonic Group, the Tender Offeror subscribed
the capital increase of PanaHome Reform Co., Ltd., which is a
subsidiary of the Target Company, in December 2015 (the paid-in
amount by the Tender Offeror was 19,200,000,000 yen, and, since
the capital increase, the investment ratio of the Tender Offeror
has been 49%, and the investment ratio of the Target Company has
been 51%), and PanaHome Reform Co., Ltd. changed its name to
Panasonic Home Renovation Co., Ltd. in April 2016. Accordingly,
the Tender Offeror and the Target Company have integrated the
brand in the remodeling business, the market of which is expected
to grow going forward, into "Panasonic Reform" and strengthened
the customer connection in the remodeling business within the
Panasonic Group as a whole, and the Tender Offeror and the Target
Company have thus engaged in further enforcing the capacity to
propose designs and construction service system, etc. in aiming
for providing more comfortable housing spaces. Including the
foregoing measures, the Tender Offeror and the Target Company have
shared their management strategies as group companies in order to
expand their businesses.
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On the other hand, the Tender Offeror and the Target Company
realize that the business environment surrounding the Target
Company has been changing at an accelerating pace. In the domestic
housing market, a decrease of new housing starts is expected due
to demographic movement, and therefore the transformation and
diversification of their business model for the urban development
business, remodeling business, overseas business, etc. is urgently
needed in the increasingly competitive market.
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(ii)
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Background to the execution of the Share Exchange Agreement
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Under the circumstances set forth above, the Tender Offeror has
come to believe that, in order to cause the housing business, as a
business of the Panasonic Group, to grow even faster than the
average growth level of the other companies operating housing
businesses in the market, it is effective to address customer
needs swiftly and precisely, by sharing and utilizing management
resources of both the Tender Offeror and the Target Company,
thereby making it possible to further enhance the value of the
Panasonic Group in the housing market. The Tender Offeror has been
considering a method to make the Target Company its wholly owned
subsidiary since the beginning of October 2016. As a result of the
consideration, the Target Company has come to believe that it
should make the Target Company its wholly owned subsidiary under a
scheme where the consideration will be paid in shares, taking into
consideration, among other things, that, a scheme of delivering
cash to shareholders of the Target Company as consideration will
not be eligible for a tax deferral upon the Target Company's entry
into the consolidated taxation structure of the Tender Offeror.
Thus, the Tender Offeror proposed the Share Exchange to the Target
Company in early November 2016.
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Under the rapidly changing business environment as set forth
above, the Target Company is facing the following major management
challenges: to improve its market share in Japan; to further
expand its business operations in overseas markets and to solve
its shortage of human resource necessary therefor; and to further
reduce its costs such as selling, general and administrative
expenses. In order to resolve these challenges and enhance its
competitive advantage and grow in the housing business, after
having carefully considered the Tender Offeror's proposal for the
Share Exchange, the Target Company has recognized that it is
essential for the Tender Offeror and the Target Company to have a
stronger collaborative relationship and realize the following
synergies as the Panasonic Group.
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As a result of the Transaction to Make the Target Company a Wholly
Owned Subsidiary, specifically, the Tender Offeror and the Target
Company believe that both companies will realize the following
synergies. The Tender Offeror and the Target Company believe that
these synergies would be realizable only if the Target Company
becomes a wholly owned subsidiary of the Tender Offeror (i)
through promoting business strategies that maximize the use of the
management resources of both the Tender Offeror and the Target
Company by fully integrating the capital and businesses of both
companies, and (ii) through flexible and prompt decision-making,
and innovative management of the Target Company based on a
long-term perspective that will be unaffected by its short-term
operating results after the Tender Offeror becomes the only
shareholder of the Target Company.
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i)
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It will become possible to promote the effective use of the
management resources held by the Tender Offeror, such as its brands,
thereby making it possible to not only enhance customer awareness
but also enhance the quality of services provided to customers in
the major businesses, such as the Remodeling Business, the New
Construction and Urban Development Business, the Age-Free
(elderly-care) Business, the Home Energy Management Business and the
Overseas Business. In particular, it will become possible to create
housing space having Panasonic brand characteristics through the
integration of consumer electronics equipment and housing
technologies and strengthen IoT technical developments in smart
houses (Note), based on integrated Panasonic brand strategies. In
addition, the Tender Offeror believes that, by integrating the
overseas network and global personnel held by the Tender Offeror
with the Target Company's design and architecture know-how, the
development of overseas businesses mainly in the ASEAN region will
accelerate.
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ii)
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It will become possible to effectively utilize the Tender Offeror's
creditworthiness, thereby making it possible to enhance the
potential for the implementation of mergers and acquisitions as well
as capital and business alliances and the potential for the
implementation of large-scale investments that were difficult for
the Target Company to implement alone.
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iii)
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It will become easy to appropriately and promptly carry out the
re-distribution of management resources across the companies of
the Panasonic Group, thereby making it possible to focus on
investment of resources into the major businesses of the Panasonic
Group.
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(Note)
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Smart houses are houses that enable comfortable and energy-efficient
living by enhancing housing heat insulation and airtightness, and by
combining a system to "generate" and "accumulate" electricity (such
as solar power generation, household fuel cells, batteries, etc.)
and a home energy management system (HEMS), that enables the
efficient control and use of energy.
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Furthermore, the Target Company will also be able to accelerate
the collaborative projects between the two companies in order to
implement cost reductions in indirect business units and
efficiently operate indirect business units through the
integration of management resources, reinforcing the recruitment
activities of the Panasonic Group companies for new graduates and
the specialized human resource of the Panasonic Group, and
increasing the introduction of large-scale projects utilizing the
Tender Offeror's domestic and overseas sales channels.
Accordingly, the Tender Offeror and the Target Company believe
that both companies can maximize the group's synergies at an early
stage.
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With this understanding, from the beginning of November 2016, the
Tender Offeror and the Target Company held consultations many
times during which both companies shared their knowledge about the
differences in the positions of the Target Company (as a housing
builder) and the Tender Offeror (which also has a role as a
supplier of the housing equipment such as building materials, air
conditioner and lighting fixtures) in the housing business, and
challenges to strengthening their competitive power in light of
such differences, and repeatedly discussed the form that both
companies should adopt in the future. The Target Company
independently considered advantages and risks and effects on
stakeholders caused by delisting. As a result, the Target Company
and the Tender Offeror came to mutually agree that it would be
highly beneficial for them to make the Target Company a wholly
owned subsidiary of the Tender Offeror, so that the Tender Offeror
would be able to strengthen its housing businesses, a key business
field, thereby contributing to an increase in the corporate value
not only of the Target Company but also of the entire Panasonic
Group. Thus, both companies resolved at meetings of their
respective boards of directors held on December 20, 2016 to
conduct the Share Exchange, and executed the Share Exchange
Agreement. For details of the Share Exchange, please refer to the
December 20, 2016 Press Release.
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(iii)
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Background to the implementation of the Tender Offer by the Tender
Offeror after the execution of the Share Exchange Agreement
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As set forth in "(ii) Background to the execution of the Share
Exchange Agreement" above, the Tender Offeror was, before having
proposed the Share Exchange to the Target Company, considering a
scheme, as one of the options, to deliver cash to the Target
Company's shareholders as consideration. At that point, however,
the scheme of delivering cash as consideration was not favorable
to the Tender Offeror in terms of taxation, because, such scheme
would not be eligible for a tax deferral (Note) upon the Target
Company's entry into the Tender Offeror's consolidated taxation
structure.
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(Note)
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Prior to the relevant amendment by the 2017 Tax Reform (i.e., the
tax reform pursuant to the Act on Partial Revision, etc. of the
Income Tax Act, etc. promulgated on March 31, 2017; hereinafter
the same shall apply), when the Target Company becomes a wholly
owned subsidiary of the Tender Offeror and enters into the Tender
Offeror's consolidated taxation structure through the scheme where
cash is delivered to the Target Company's shareholders as
consideration, some assets (certain fixed assets, lands,
securities, monetary claims and deferred assets) are required to
be revalued to fair market value at the time of the Target
Company's entry into the Tender Offeror's consolidated taxation
structure. Resultantly, taxable gain would be recognized. In
contrast, after the relevant amendment by the 2017 Tax Reform,
when making the Target Company a wholly owned subsidiary of the
Tender Offeror on and after October 1, 2017 through the scheme
where cash is delivered to the Target Company's shareholders as
consideration, such revaluation of these assets to fair market
value at the time of the Target Company's entry into the Tender
Offeror's consolidated taxation structure will not be required,
and thus, taxable gain would not be recognized at that time to the
extent certain requirements are met. The language "tax deferral"
used herein describes the effect that the timing of recognition of
unrealized taxable gain on the assets is to be later than the
timing when the Target Company becomes a wholly owned subsidiary
of the Tender Offeror, as explained above.
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However, the 2017 Tax Reform, including an amendment to the
Corporate Tax Act to the effect that a scheme under which a party
makes another party its wholly owned subsidiary by delivering cash
to such other party's shareholders as consideration will be
eligible for a tax deferral upon the other party's entry into its
consolidated taxation structure, was approved in a Cabinet meeting
on December 22, 2016 after the announcement of the December 20,
2016 Press Release. Therefore, even after the execution of the
Share Exchange Agreement, the Tender Offeror continued to consider
the positioning of the Share Exchange within the Panasonic Group's
capital strategies and financial strategies, while assessing the
status and movements of deliberations with respect to the tax
reform. Thereafter, the certainty of the scheme delivering cash
as consideration being eligible for the tax deferral was increased
to a satisfactory level based on relevant circumstances including
the fact that a bill for the Act on Partial Revision, etc. of the
Income Tax Act was submitted to the Diet on February 3, 2017. In
consideration of the circumstances above, the Tender Offeror has
come to believe that, if the scheme of delivering cash as
consideration will be eligible for the tax deferral, the scheme
under the Transaction will be more favorable than the scheme under
the Share Exchange for the following reasons: (i) in terms of the
financial strategies of the Panasonic Group, by adopting the
scheme under the Transaction, the Tender Offeror will be able to
receive financial benefits such as the reduction of cost of equity
capital and enhancement of return on equity by maintaining the
capital composition of the Tender Offeror and (ii) the scheme
under the Transaction will contribute to the benefit of
shareholders of the Tender Offeror by anticipating an increase of
net income per share of Tender Offeror's common shares ("Tender
Offeror's Shares") by preventing a dilution of their shares. In
early March 2017, the Tender Offeror proposed to the Target
Company a change in scheme from the Share Exchange to the
Transaction.
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In addition, when the Tender Offeror proposed a change in the
scheme of the Transaction to Make the Target Company a Wholly
Owned Subsidiary to the Target Company, it re-examined the amount
of consideration it could pay in terms of the Target Company's
acceptability of the change in scheme from the Share Exchange to
the Transaction, while ensuring the reasonable ground for the
Tender Offeror's business judgement taking into account the
financial benefit that will be received by the Panasonic Group and
the benefits of the shareholders of the Tender Offeror, in the
case of delivering cash as consideration under the new
scheme. Upon such re-examination, the Tender Offeror has also
taken into account the prediction that by implementing the Tender
Offer with the tender offer price, on which a certain premium is
added to the valuation of the Target Company's Shares, by giving
maximum consideration to the interest of shareholders of the
Target Company other than the Tender Offeror, it will be able to
gain the understanding and support of the Target Company's
shareholders and further ensure the completion of the Transaction
to Make the Target Company a Wholly Owned Subsidiary.
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After the foregoing, from the middle of March 2017 until the end
of that month, the Tender Offeror conducted due diligence on the
Target Company after obtaining the Target Company's approval and,
from March 27, 2017 until April 10, 2017, the Tender Offeror has
continued to hold consultations and negotiations with the Target
Company with respect to the terms and conditions of the Tender
Offer, including the tender offer price per share of the Target
Company's Shares (the "Tender Offer Price") in the Tender
Offer. In addition, the Tender Offeror has confirmed that, with
the promulgation of the Act on Partial Revision, etc. of the
Income Tax Act, etc. on March 31, 2017 in relation to the 2017 Tax
Reform, the scheme of delivering cash as consideration would be
eligible for the tax deferral, on the basis of consummating the
Procedures for Making the Target Company a Wholly Owned Subsidiary
on or after October 1, 2017.
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Through the above consultations and negotiations, the Tender
Offeror has agreed, with the Target Company, on the termination of
the Share Exchange Agreement by mutual agreement and on the terms
and conditions of the Tender Offer, including the Tender Offer
Price. As a result thereof, the Tender Offeror resolved, at the
meeting of its board of directors held today, to implement the
Tender Offer as a part of the Transaction, with the commencement
date of the Tender Offer being April 28, 2017 subject to the
Conditions of the Tender Offer being satisfied, and the Tender
Offeror and the Target Company terminated the Share Exchange
Agreement by mutual agreement as of today after each obtaining
approval at meetings of their respective boards of directors also
held today.
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(iv)
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Background to the decision of the Target Company to support the
Tender Offer and reasons therefor
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As set forth in "(iii) Background to the implementation of the
Tender Offer by the Tender Offeror after the execution of the Share
Exchange Agreement" above, the Tender Offeror offered the Target
Company an initial proposal to change the scheme for the Transaction
to Make the Target Company a Wholly Owned Subsidiary from the Share
Exchange to the Tender Offer and explained to the Target Company the
reasons for changing the scheme in early March 2017. In response to
the proposal, the Target Company appointed SMBC Nikko Securities
Inc. ("SMBC Nikko") as a financial advisor independent from the
Tender Offeror and the Target Company, and appointed Mori Hamada &
Matsumoto as a legal advisor independent from the Tender Offeror and
the Target Company, in order to review the details of proposal for
the Transaction, including whether to accept or reject the change of
scheme, as the Target Company previously did in reviewing the Share
Exchange. The Target Company further requested Plutus Consulting
Co., Ltd. ("Plutus"), a third-party valuation institution
independent from the Tender Offeror and the Target Company, to
calculate the value of the Target Company's Shares and submit a
fairness opinion to the effect that the Tender Offer Price is fair
to the minority shareholders of the Target Company from a financial
point of view. For the purpose of reviewing the Transaction, the
Target Company once again established a Special Committee which the
Target Company had established to avoid conflicts of interest with
the Tender Offeror and ensure the fairness of the Transaction to
Make the Target Company a Wholly Owned Subsidiary through the Share
Exchange to the shareholders of the Target Company other than the
controlling shareholder. For the details of establishment of the
Special Committee, please refer to the section titled "c. Obtaining
the Response to Referral From an Independent Special Committee"
"(Measures to Ensure the Fairness of the Tender Offer such as
Measures to Ensure the Fairness of the Tender Offer Price and
Measures to Avoid Conflicts of Interest)" under "(ii) Background of
Calculation" of "(4) Basis of Calculation, etc. of the Tender Offer
Price" of "2. Outline of the Tender Offer" below.
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Since receiving the Tender Offeror's initial proposal regarding the
terms and conditions of the Transaction (including the Tender Offer
Price) in late March 2017, the Target Company has received an
interim report on the calculation of value of the Target Company's
Shares and financial advice from SMBC Nikko and an interim report on
the calculation of value of the Target Company's Shares from Plutus,
received recommendations from the Special Committee at important
stages of negotiation, and discussed and negotiated with the Tender
Offeror on six occasions between March 27, 2017 and April 10, 2017.
Consequently, as explained below, the Tender Offeror proposed the
Tender Offer Price which the Target Company believes would provide
the Target Company's shareholders other than the Tender Offeror a
reasonable opportunity to sell shares, and the Target Company agreed
with the Tender Offeror for the commencement of the Tender Offer by
the Tender Offeror today at the Tender Offer Price of 1,200 yen.
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During the process of discussion and negotiation with the Tender
Offeror, the board of directors of the Target Company discussed and
reviewed the terms and conditions of the Transaction, based on (a)
SMBC Nikko's valuation report on the value of the Target Company's
Shares obtained today, (b) Plutus' valuation report and fairness
opinion on the value of the Target Company's Shares obtained today,
and (c) legal advice from Mori Hamada & Matsumoto, as well as paying
regard to the contents of the Special Committee's response to
referral (the "Response to Referral") received today to the extent
possible (please refer to section titled "c. Obtaining the Response
to Referral From an Independent Special Committee" "(Measures to
Ensure the Fairness of the Tender Offer such as Measures to Ensure
the Fairness of the Tender Offer Price and Measures to Avoid
Conflicts of Interest)" under "(ii) Background of Calculation" of
"(4) Basis of Calculation, etc. of the Tender Offer Price" of "2.
Outline of the Tender Offer" below for details).
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As set forth in the section titled "(ii) Background to the execution
of the Share Exchange Agreement" in "a. Background to, purpose of
and decision making process of the Tender Offer" above, in order for
the Target Company to deal with medium to long term management
challenges in terms of brand strategies, large-scale investment, and
reallocating management resources, it is desirable to increase the
Target Company's corporate value in the medium to long term, rather
than focusing on the risk of short-term negative effects on
profitability. As a listed subsidiary, it has been difficult for the
Target Company to take adequately bold or quick measures, but the
implementation of the Transaction will enable the Target Company to
do so. In order for the Target Company to deal with medium to long
term management challenges forcefully, the Target Company believes
that the Target Company will need to utilize the resources of Tender
Offeror more than ever, but if the Target Company remains
independent as a listed company, the interests of the Target Company
and that of the Tender Offeror will not necessarily align. In
particular, the Tender Offeror and the Target Company have had a
supplier-customer relationship with respect to housing materials due
to the characteristics of each business, and the conflicts of
interest between the two companies are quite apparent in this
respect. By becoming a wholly owned subsidiary of the Tender Offeror
through the Transaction, interests of both companies will be aligned
and the Target Company will have more access to the Tender Offeror's
resources, as stated in "(ii) Background to the execution of the
Share Exchange Agreement" of "a. Background to, purpose of and
decision making process of the Tender Offer" above. Therefore, as
the Target Company determined in reviewing the Share Exchange, the
Target Company will be able to increase the Target Company's
corporate value by becoming a wholly owned subsidiary of the Tender
Offeror through the Transaction.
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The Target Company determined that the Transaction provides to the
Target Company's shareholders a reasonable opportunity to sell
shares, with respect to the Tender Offer Price, considering that (i)
as stated in "(Measures to Ensure the Fairness of the Tender Offer
such as Measures to Ensure the Fairness of the Tender Offer Price
and Measures to Avoid Conflicts of Interest)" under "(ii) Background
of Calculation" of "(4) Basis of Calculation, etc. of the Tender
Offer Price" of "2. Outline of the Tender Offer" below, the Target
Company agreed to the Tender Offer Price after it took measures to
ensure the fairness of the Tender Offer, received advices from SMBC
Nikko, received reports from Plutus, received recommendations from
the Special Committee, and discussed and negotiated sincerely with
the Tender Offeror, (ii) the Tender Offer Price is evaluated as (a)
in determining the Tender Offer Price, the Tender Offer Price was
agreed after the Target Company's secretariat, consisting of persons
who have no interest in the Tender Offeror, actually negotiated in
good faith multiple times on the basis of non-arbitrary valuations
by the independent experts and with the advice of the financial
advisor and the recommendations of the Special Committee, and (b)
the Tender Offer Price is within the range of valuations by SMBC
Nikko, higher than the range of valuations set out in the valuation
report obtained from Plutus and is in line with the average premium
offered in similar cases, demonstrating concern for minority
shareholders' expected acquisition price, the theoretical stock
price of the Target Company's Shares in the Share Exchange, and the
contents of Oasis Proposal (defined below) in the Response to
Referral by the Special Committee independent from the Target
Company, (iii) the Tender Offer Price falls within the range of
calculation results derived from the comparable companies analysis
and within the range of calculation results derived by the
discounted cash flow analysis (the "DCF Analysis") that are the
result of calculation by SMBC Nikko as set forth in the section
titled "b. Obtaining a share valuation report and a fairness opinion
from an independent third-party appraiser by the Target Company"
"(Measures to Ensure the Fairness of the Tender Offer such as
Measures to Ensure the Fairness of the Tender Offer Price and
Measures to Avoid Conflicts of Interest)" under "(ii) Background of
Calculation" of "(4) Basis of Calculation, etc. of the Tender Offer
Price" of "2. Outline of the Tender Offer" below, (iv) the Tender
Offer Price is higher than the range of all calculation results
derived from the market price analysis, comparable companies
analysis and DCF Analysis that are the result of calculation by
Plutus as set forth in the section titled "b. Obtaining a share
valuation report and a fairness opinion from an independent
third-party appraiser by the Target Company" "(Measures to Ensure
the Fairness of the Tender Offer such as Measures to Ensure the
Fairness of the Tender Offer Price and Measures to Avoid Conflicts
of Interest)" under "(ii) Background of Calculation" of "(4) Basis
of Calculation, etc. of the Tender Offer Price" of "2. Outline of
the Tender Offer" below, (v) the Tender Offer Price includes a
sizeable premium in contrast to previous tender offer cases of
shares, etc. of listed companies by companies other than the issuer
as provided by SMBC Nikko, given that a premium of 40.35% (rounded
to two decimal places; hereinafter the same will apply to the size
(%) of premiums on the value of shares) on 855 yen, which is the
closing price of the Target Company's Shares quoted on the Tokyo
Stock Exchange on December 19, 2016 (the business day immediately
preceding the announcement date for the Share Exchange which was a
day before the value of the Target Company's Shares has been
affected by the share exchange ratio for the Share Exchange (0.8
shares of Tender Offeror will be allotted in exchange for each share
of the Target Company; the "Share Exchange Ratio")), a premium of
47.24% on 815 yen (rounded to the nearest whole yen; hereinafter the
same will apply to simple average closing prices), which is the
simple average closing price for the last one month period from
December 19, 2016, a premium of 51.32% on 793 yen for the last three
month period, and a premium of 50.00% on 800 yen for the last six
month period are included in the Tender Offer Price, (vi) the Target
Company has taken measures to ensure fairness of the Tender Offer as
set out in "(4)Measures to Ensure the Fairness of the Tender Offer
such as Measures to Ensure the Fairness of the Tender Offer Price
and Measures to Avoid Conflicts of Interest" and "(Measures to
Ensure the Fairness of the Tender Offer such as Measures to Ensure
the Fairness of the Tender Offer Price and Measures to Avoid
Conflicts of Interest)" under "(ii) Background of Calculation" of
"(4) Basis of Calculation, etc. of the Tender Offer Price" of "2.
Outline of the Tender Offer" below, and has taken into consideration
the interest of minority shareholders, and (vii) the Tender Offer
Price is higher than any of the theoretical stock prices of the
Target Company's Shares as calculated using the Share Exchange Ratio
based on the closing price of the Tender Offeror shares at Tokyo
Stock Exchange on each business day between December 21, 2016 (the
business day immediately after the announcement of the Share
Exchange) and April 20, 2017 (the business day immediately preceding
the announcement of the Tender Offer), and the Target Company
believes that changing the scheme from the Share Exchange to the
Transaction will not cause any particular disadvantages to the
Target Company's shareholders other than the Tender Offeror, but
rather, the Target Company believes it will make it possible to
provide an opportunity for its shareholders other than the Tender
Offeror to enjoy a higher premium than under the Share Exchange. By
changing the scheme from the Share Exchange to the Transaction, the
timing as to when the Target Company will become a wholly owned
subsidiary of the Tender Offeror will be slightly later than the
Target Company initially expected through the Share Exchange.
However, comprehensively considering various circumstances including
the conditions for the Transaction etc., the implementation of the
Transaction instead of the Share Exchange will not cause any
particular disadvantages to the Target Company's shareholders other
than the Tender Offeror, but rather, the Target Company believes it
will contribute to the interest of the Target Company's shareholders.
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The Target Company received a letter dated February 22, 2017 from
one of the Target Company's shareholders, Oasis Management Company
Ltd ("Oasis") (according to the change report pertaining to report
of possession of large volume that Oasis submitted on April 3, 2017,
Oasis owns 15,085,000 shares (a shareholding ratio of 8.98%) of the
Target Company's Shares as of March 28, 2017), which operates Oasis
Investment II Master Fund Ltd., in which Oasis stated that it is
willing to make a tender offer with cash consideration of 1,050 yen
per share for PanaHome's Shares subject to due diligence, and if
agreed by the Target Company, Oasis is willing to implement the
tender offer (the "Oasis Proposal"). Since the conditions of Oasis
Proposal (including scope of the purchase and whether a maximum or
minimum number of shares to be purchase will be set) and the policy
after the acquisition remained unclear, the Target Company sent a
letter to Oasis on April 3, 2017 to confirm the details of Oasis
Proposal, and the Target Company received the response from Oasis on
April 20, 2017. The Target Company reviewed the Oasis Proposal,
while reviewing the proposal for the Transaction by the Tender
Offeror. The board of directors at the Target Company requested the
Special Committee to evaluate whether the Target Company should
accept the Oasis Proposal. The Special Committee provided the Target
Company with its opinion that (i) the feasibility of Oasis Proposal
is doubtful in the first place; (ii) even if one assumes that a
certain increase in corporate value of the Target Company may be
expected, the profitability of the main business may decrease, and
corporate value may decline from the current level because if the
Target Company accepted the Oasis Proposal and existing the capital
relationship and collaboration between the Tender Offeror and the
Target Company were changed, it would have a negative impact on the
structure of business relying on the Panasonic brand; (iii) the
Special Committee does not see any reason that the Oasis Proposal
would in any way increase corporate value more than the Transaction
to Make the Target Company a Wholly Owned Subsidiary would, and (iv)
the Tender Offer Price is well above the price offered by the Oasis
Proposal, and therefore the Oasis Proposal does not affect the
contents of the Response to Referral by the Special Committee
regarding the implementation of the Transaction with the Tender
Offeror. Therefore, as stated above, the Target Company determined
that the Target Company will not accept to the Oasis Proposal
because the Target Company believes that the implementation of the
Transaction with the Tender Offeror will increase the Target
Company's corporate value and contribute to the interest of its
shareholders.
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For these reasons, the Target Company has resolved at its board of
directors meeting held today to express an opinion in favor of the
Tender Offer, and to recommend that the shareholders of the Target
Company accept the Tender Offer.
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For the details of resolution of board of directors meeting above,
please refer to "e. Unanimous Approval of Directors and the No
Objection Opinion of All Company Auditors (Excluding Directors and
Company Auditors with Conflicts of Interest) at the Target Company,"
"(Measures to Ensure the Fairness of the Tender Offer such as
Measures to Ensure the Fairness of the Purchase Price and Measures
to Avoid Conflicts of Interest)" under "(ii) Background of
Calculation" of "(4) Basis of Calculation, etc. of the Tender Offer
Price" of "2. Outline of the Tender Offer" below.
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b.
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Management Policy After the Tender Offer
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If the Tender Offer and the Transaction to Make the Target Company a
Wholly Owned Subsidiary are completed, the Tender Offeror, with the
Target Company and other companies of the Panasonic Group, intends
to continue a management policy aimed at further increasing the
Target Company's corporate value, and, after making the Target
Company its wholly owned subsidiary, the Tender Offeror will seek to
enhance the Target Company's business, giving consideration to the
necessity to manage the Target Company by fully utilizing the Target
Company's relationship with its business partners and general
customers and its platform of business operations and systems.
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Although the management structure following the Transaction has yet
to be determined as of today, through the discussion committee
consisting of officers and employees of both companies, the Tender
Offeror plans to hold further discussions with respect to specific
cooperation in order to formulate a specific action plan for efforts
toward growth acceleration and realization of synergy, and to
discuss the most appropriate system to fulfill the synergies
described in the section titled "(ii) Background to the execution of
the Share Exchange Agreement" of "a. Background to, purpose of and
decision making process of the Tender Offer" above. As of today, of
the nine directors and three company auditors of the Target Company,
four directors concurrently hold positions as officers and employees
of the Tender Offeror.
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Since the Tender Offeror is aiming to make the Target Company wholly
owned subsidiary of the Tender Offeror, if the Tender Offeror is
unable to acquire all of the Target Company's Shares (excluding the
Target Company's Shares held by the Tender Offeror and the treasury
shares held by the Target Company) through the Tender Offer, in
principle, it plans to implement Procedures for Making the Target
Company a Wholly Owned Subsidiary as described in the section titled
"(3) Policy for Organizational Restructuring, etc., After the Tender
Offer (Matters Relating to So-called 'Two-tier Acquisitions')"
below. However, if implementation of the Procedures for Making the
Target Company a Wholly Owned Subsidiary is rejected at the
shareholders' meeting of the Target Company, the Target Company will
not become a wholly owned subsidiary of the Tender Offeror. In that
case, there is a possibility that the synergies described above to
be realized will become limited, however, even under such
circumstance, the Tender Offeror is planning to cooperate with the
Target Company and maximize the synergies as much as possible.
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(3)
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Policy for Organizational Restructuring, etc., After the Tender
Offer (Matters Relating to So-called "Two-tier Acquisitions")
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As stated in "(1) Overview of the Tender Offer" above, Tender
Offeror plans to make the Target Company a wholly owned subsidiary
of the Tender Offeror, and if the Tender Offeror is unable to
acquire all of the Target Shares (excluding the Target Shares held
by the Tender Offeror and the treasury shares held by the Target
Company) upon completion of the Tender Offer, the Tender Offeror
plans to request the Target Company to implement the following
procedures:
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Specifically, if upon completion of the Tender Offer, the Tender
Offeror owns at least 90% of the voting rights of all shareholders
of the Target Company and the Tender Offeror may exercise its
rights as the special controlling shareholder as set forth in
Article 179, Paragraph 1 of the Companies Act (Act No. 86 of 2005,
as amended; hereinafter the same), the Tender Offeror plans to
request all of the Target Company's shareholders who did not
tender their shares in the Tender Offer (excluding the Tender
Offeror and the Target Company) (the "Shareholders Subject to the
Cash-Out") to sell all of the Target Company's Shares they own
(excluding the Target Company's Shares held by the Tender Offeror
and the treasury shares held by the Target Company) pursuant to
the provisions of Part II, Chapter II, Section 4-2 of the
Companies Act (the "Demand for Shares Cash-Out"), promptly after
the completion of the settlement of the Tender Offer. In the
Demand for Shares Cash-Out, the Tender Offeror plans to set forth
that the amount equivalent to the Tender Offer Price will be
delivered to the Shareholders Subject to the Cash-Out as the price
per share of the Target Company's Shares, and that the acquisition
date will be October 2, 2017 or any date thereafter. In such
case, the Tender Offeror will notify the Target Company to such
effect and will require the Target Company to approve the Demand
for Shares Cash-Out. If the Target Company approves the Demand
for Shares Cash-Out by a resolution of its board of directors, in
accordance with the procedures set forth in the relevant laws and
ordinances, without individual approval by the Shareholders
Subject to the Cash-Out, the Tender Offeror will acquire, as of
the acquisition date set forth in the Demand for Shares Cash-Out,
all of the Target Company's Shares owned by the Shareholders
Subject to the Cash-Out (excluding the Target Company's Shares
held by the Tender Offeror and the treasury shares held by the
Target Company). The Tender Offeror plans to deliver the amount
equivalent to the Tender Offer Price per share of the Target
Company's Shares to each of the Shareholders Subject to the
Cash-Out as the price per share of the Target Company's Shares
owned by each of the Shareholders Subject to the Cash-Out. In
addition, according to the Target Company's press release, if the
Target Company receives a notice regarding the matters set forth
in each item of Article 179-2, Paragraph 1 of the Companies Act to
the effect that the Tender Offeror will conduct the Demand for
Shares Cash-Out, the board of directors of the Target Company
plans to approve the Demand for Shares Cash-Out by the Tender
Offeror.
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It is provided under the Companies Act, as a measure to secure the
rights of minority shareholders in relation to the Demand for
Shares Cash-Out, that Shareholders Subject to the Cash-Out may
file a petition with a court to determine the sale price of such
Target Company's Shares they own, pursuant to the provisions of
Article 179-8 of the Companies Act and other relevant laws or
ordinances. In addition, if the aforementioned petition is filed,
the sale price will ultimately be determined by a court.
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On the other hand, if, after the completion of the Tender Offer,
the Tender Offeror does not own 90% or more of the Target
Company's voting rights, the Tender Offeror plans to request the
Target Company to hold an extraordinary shareholders' meeting
during the period from around late August 2017 to late September
2017 (the "Extraordinary Shareholders' Meeting") promptly after
the completion of the settlement of the Tender Offer that includes
each of the following as proposals submitted for deliberation: (x)
a proposal regarding consolidation of the Target Company's Shares
(the "Share Consolidation") with an effective date being on or
after October 2, 2017 and (y) subject to the Share Consolidation
becoming effective, a proposal regarding partial amendment to the
articles of incorporation for the purpose of abolishing the
provision regarding the number of shares constituting one whole
unit of stock. Even if the voting rights of the Target Company
held by the Tender Offeror after the Tender Offer are less than
two-thirds (2/3) of the entire voting rights of the Target
Company, the Tender Offeror does not plan to additionally acquire
the Target Shares from the shareholders of the Target Company
(excluding the Tender Offeror) upon implementation of the Share
Consolidation, but plans to make the above request in principle,
at present. As an exception, such request may not be made if the
implementation of such procedures is reasonably found to be likely
to cause a breach of the fiduciary duties of the Target Company's
directors, including a case where the number of shares tendered is
extremely small and the implementation of such procedures is
likely to harm the interests of the minority shareholders. In
addition, the Tender Offeror plans to approve each of the above
mentioned proposals at the Extraordinary Shareholders'
Meeting. If the proposal regarding the Share Consolidation is
approved at the Extraordinary Shareholders' Meeting, the
shareholders of the Target Company will own, as of the effective
date of the Share Consolidation, the number of the Target
Company's Shares that accords with the percentage of the Share
Consolidation approved at the Extraordinary Shareholders'
Meeting. In the case where any fraction of one share arises as a
result of the Share Consolidation, the amount of money to be
obtained through the sale, etc., of the Target Company's Shares
equivalent to the total of such fraction (with respect to such
total, any fraction of one share will be rounded down; hereinafter
the same) to the Target Company or the Tender Offeror, will be
delivered to the shareholders pursuant to Article 235 of the
Companies Act and other relevant laws or ordinances. With respect
to the sales price of the Target Company's Shares equivalent to
the total number of such fraction, the Target Company plans to
file a petition with a court for permission for sale by private
contract after calculating so that the amount of money to be
delivered to each of the Target Company's shareholders who did not
tender their shares in the Tender Offer (excluding the Tender
Offeror and the Target Company) as a result of such sale will be
equal to the price obtained by multiplying (a) the Tender Offer
Price by (b) the number of the Target Company's Shares held by
each shareholder. Furthermore, the percentage of the
consolidation of the Target Company's Shares is undetermined as of
today; however, it will be determined in such manner that the
Tender Offeror will hold all of the Target Company's Shares
(excluding the treasury shares held by the Target Company) and
that the number of the Target Company's Shares owned by the Target
Company's shareholders (excluding the Tender Offeror and the
Target Company) who did not tender their shares in the Tender
Offer will be a fraction of one share.
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It is provided under the Companies Act, as a measure to secure the
rights of minority shareholders in relation to the Share
Consolidation in the case where the Share Consolidation is
conducted and any fraction of one share arises, that the Target
Company's Shareholders may request the Target Company to purchase
at a fair price all fractions of one share owned by them and file
a petition for determination of the price for the acquisition of
the Target Company's Shares pursuant to the provisions of Articles
182-4 and 182-5 of the Companies Act and other relevant laws or
ordinances. As stated above, with respect to the Share
Consolidation, since the number of the Target Company's Shares
held by the Target Company shareholders (excluding the Tender
Offeror and the Target Company) who did not tender their shares in
the Tender Offer will be faction of one share, the shareholders of
the Target Company who oppose to the Share Consolidation will be
able to file petition for price determination pursuant to the
provisions of Articles 182-4 and 182-5 of the Companies Act and
other relevant laws or ordinances. If the petition above is
filed, the purchase price will ultimately be determined by a court.
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The timing for each of the procedures above may change, depending
on the status of amendment, enforcement, the governmental
authorities' interpretation, etc., of the relevant laws and
ordinances, the ownership percentage of shares of the Tender
Offeror after the Tender Offer, and the ownership status of the
Target Company's Shares by the shareholders other than the Tender
Offeror, or the foregoing may be changed to other methods with
effects roughly equivalent thereto. Provided, however, even in
such case, with respect to each of the Target Company's
shareholders (excluding the Tender Offeror and the Target Company)
who did not tender their shares in the Tender Offer, money will be
ultimately delivered, and in such case, the amount of money to be
delivered to each shareholder will be equal to the price obtained
by multiplying (a) the Tender Offer Price by (b) the number of the
Target Company's Shares held by each shareholder. In such case,
the specific procedure and the timing of the implementation
thereof, etc., will be decided upon discussion with the Target
Company, and as soon as they are determined, they will be promptly
announced.
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The Tender Offer does not intend to solicit the endorsement of the
Target Company's shareholders at the Extraordinary Shareholders'
Meeting. Further, shareholders may need to consult, at their own
responsibility, with a tax accountant with respect to the tax
treatment in case of receipt of monies pursuant to the Tender
Offer or the procedure described above and in case of purchase,
etc., pursuant to a share purchase demand.
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(4)
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Measures to Ensure the Fairness of the Tender Offer such as
Measures to Ensure the Fairness of the Tender Offer Price and
Measures to Avoid Conflicts of Interest
|
|
Given that the Target Company is a consolidated subsidiary of the
Tender Offeror as of today and the Transaction in which the Tender
Offer is included falls under a material transaction, etc., with the
controlling shareholder, and that there is a structural conflict of
interest between the Tender Offeror and other shareholders of the
Target Company, and in view of ensuring the fairness of the Tender
Offer and avoiding conflicts of interest, the Tender Offeror and the
Target Company respectively implemented the following measures:
|
|
The Tender Offeror believes that the interests of the minority
shareholders of the Target Company have been sufficiently considered
since the Tender Offeror and the Target Company have taken the
measures stated in a. through f. below.
|
|
a.
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|
|
|
|
Measures to ensure the fairness of the Tender Offer Price and
other measures to ensure the fairness of the Tender Offer by the
Tender Offeror;
|
b.
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|
|
Obtaining by the Target Company of a share valuation report and a
fairness opinion from independent third-party appraisers;
|
c.
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|
|
|
Obtaining the response to referral from an Independent Special
Committee;
|
d.
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|
|
|
Obtaining by the Target Company of opinions from an independent
outside law firm;
|
e.
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|
|
Unanimous approval of directors and no objection opinion of all
company auditors (excluding Directors and Company Auditors with
conflicts of interest) at the Target Company;
|
f.
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|
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Measures to ensure opportunities to purchase from other offerors.
|
|
For details of the above, please refer to the section titled
"(Measures to Ensure the Fairness of the Tender Offer such as
Measures to Ensure the Fairness of the Tender Offer Price and
Measures to Avoid Conflicts of Interest)" under "(ii) Background of
Calculation" of "(4) Basis of Calculation, etc. of the Tender Offer
Price" of "2. Outline of the Tender Offer" below.
|
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(5)
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|
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|
|
Possibility of and reasons for delisting
|
|
As of today, the Target Company's Shares are listed on the First
Section of Tokyo Stock Exchange. However, since the Tender
Offeror has not set a limit on the maximum number of shares to be
purchased in the Tender Offer, depending on the results of the
Tender Offer, the Target Company's Shares may be delisted pursuant
to the procedures prescribed by Tokyo Stock Exchange in accordance
with Tokyo Stock Exchange's criteria for delisting shares. In
addition, even if the Target Company's Shares do not fall under
such criteria at the time of the completion of the Tender Offer,
after the Tender Offer is completed, the Tender Offeror plans to
implement the Procedures for Making the Target Company a Wholly
Owned Subsidiary, aiming to acquire all of the Target Company's
Shares (excluding, however, the Target Company's Shares owned by
the Tender Offeror and the treasury shares owned by the Target
Company), as described in "(3) Policy for Organizational
Restructuring, etc. After the Tender Offer (Matters Relating to
So-called 'Two-tier Acquisitions'). In such case, the Target
Company's Shares will be delisted pursuant to the procedures
prescribed by Tokyo Stock Exchange in accordance with Tokyo Stock
Exchange's criteria for delisting shares. The Target Company's
Shares will not be able to be sold or purchased on the First
Section of Tokyo Stock Exchange after delisting.
|
|
(6)
|
|
|
|
|
Matters Concerning Material Agreement Related to the Tender Offer
|
|
|
|
|
|
|
The Tender Offeror and the Target Company have executed the MoU as
of today. In the MoU, the Tender Offeror and the Target Company
agreed upon, among other things, the followings: (i) the Share
Exchange Agreement shall be terminated by mutual agreement; (ii)
the Tender Offeror shall implement the Tender Offer subject to the
Conditions of the Tender Offer being satisfied; and (iii) until
the completion of the Transaction to Make the Target Company a
Wholly Owned Subsidiary, the Target Company shall operate its
business, maintain and manage its property and govern itself with
the care of a good manager, and if Target Company intends to take
an action which has material effect on its property or rights and
duties, the Target Company shall consult with and make an
agreement with the Tender Offeror prior to taking such action.
|
|
|
|
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|
2.
|
|
|
|
Outline of the Tender Offer
|
|
|
|
|
|
(1)
|
|
|
|
Outline of the Target Company
|
|
|
|
|
|
(1)
|
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|
|
|
|
Name
|
|
|
PanaHome Corporation
|
(2)
|
|
|
|
|
|
Location
|
|
|
1-4, Shinsenri-nishimachi, 1 Chome, Toyonaka, Osaka
|
(3)
|
|
|
|
|
|
Name and Title of Representative
|
|
|
Ryuji Matsushita, President, Chief Executive Officer
|
(4)
|
|
|
|
|
|
Description of Business
|
|
|
Manufacturing, construction and sales of custom-built detached
houses and apartments, sales of built-for-sale houses and land,
sales of condominiums, and home remodeling business, etc.
|
(5)
|
|
|
|
|
|
Amount of Stated Capital
|
|
|
28,375,000,000 yen (as of December 31, 2016)
|
(6)
|
|
|
|
|
|
Date of Establishment
|
|
|
July 1, 1963
|
(7)
|
|
|
|
|
|
Major Shareholders and Shareholding Ratios
|
|
|
Panasonic Corporation
|
|
|
54.00%
|
|
|
|
|
|
|
|
NORTHERN TRUST CO. (AVFC) RE-SSDOO
|
|
|
2.38%
|
|
|
|
|
|
|
|
Japan Trustee Services Bank, Ltd. (trust account)
|
|
|
1.96%
|
|
|
|
|
|
|
|
The Master Trust Bank of Japan, Ltd (trust account)
|
|
|
1.89%
|
|
|
|
|
|
|
|
PanaHome Employee Shareholding Association
|
|
|
1.86%
|
|
|
|
|
|
|
|
Sumitomo Mitsui Banking Corporation
|
|
|
1.39%
|
|
|
|
|
|
|
|
GOLDMAN SACHS INTERNATIONAL
|
|
|
1.24%
|
|
|
|
|
|
|
|
STATE STREET BANK AND TRUST COMPANY 505001
|
|
|
1.23%
|
|
|
|
|
|
|
|
THE BANK OF NEW YORK, TREATY JASDEC ACCOUNT
|
|
|
1.20%
|
|
|
|
|
|
|
|
NORTHERN TRUST CO. (AVFC) RE U.S. TAX EXEMPTED PENSION FUNDS
|
|
|
1.05%
|
(8)
|
|
|
|
|
|
Relationship between the Listing Company and the Target Company
|
|
|
|
|
|
|
Capital Relationship
|
|
|
As of today, the Tender Offeror owns 91,036,634 shares (a
shareholding ratio of 54.18%) of the Target Company's Shares.
|
|
|
|
|
|
|
Personnel Relationship
|
|
|
The Target Company currently accepts eighty-seven (87) employees who
are seconded by the Tender Offeror, three (3) of whom have assumed
the office as directors of the Target Company.
Additionally, the Tender Offeror currently accepts six (6)
employees who are seconded by the Target Company.
|
|
|
|
|
|
|
Business Relationship
|
|
|
The Target Company deposits funds with the Tender Offeror through
group financing.
The Target Company purchases products and raw materials, etc.,
from the Tender Offeror.
|
|
|
|
|
|
|
Status as Related Party
|
|
|
The Target Company is a consolidated subsidiary of the Tender
Offeror; and therefore, the Tender Offeror and the Target Company
are related parties of each other.
|
(Note) The information contained in the above chart was current as
of September 30, 2016 unless other date is specified therein.
|
(2)
|
|
|
|
|
Schedule, etc.
|
|
(i)
|
|
|
|
|
Schedule
|
|
Date of Resolution by Tender Offeror's Board of Directors
|
|
|
April 21, 2017 (Friday)
|
Scheduled Date of Public Notice of Tender Offer
|
|
|
April 28, 2017 (Friday)
Public disclosure will be made electronically, and a notice of
such disclosure will be published in the Nihon Keizai Shimbun.
(website address of electronic notice: http://disclosure.edinet-fsa.go.jp/)
|
Scheduled Filing Date of Tender Offer Registration Statement
|
|
|
April 28, 2017 (Friday)
|
(Note) The Tender Offeror does not plan to hold a board of
directors meeting again at the time of commencement of the Tender
Offer.
|
(ii)
|
|
|
|
Tender Offer Period as of the time of filing of the Registration
Statement
|
|
|
|
From Friday, April 28, 2017 (Friday) through Tuesday, June 13,
2017 (Tuesday) (30 business days)
|
|
|
(iii)
|
|
|
|
Possible extension of the Tender Offer Period based on the Target
Company's request
|
|
|
|
N/A
|
|
|
(3)
|
|
|
|
Tender Offer Price
|
|
|
|
1,200 yen per share of common stock
|
|
|
(4)
|
|
|
|
Basis of Calculation, etc. of the Tender Offer Price
|
|
|
|
|
|
|
(i)
|
|
|
|
Basis of Calculation
|
In order to ensure the fairness of the Tender Offer Price, the
Tender Offeror requested Nomura Securities Co., Ltd. ("Nomura
Securities"), a financial advisor and third-party appraiser that is
independent from the Tender Offeror and the Target Company, to
calculate the value of the Target Company's Shares for determining
the Tender Offer Price. Nomura Securities calculated the value of
the Target Company's Shares by employing the average market price
analysis, the comparable company analysis and the DCF analysis, and
the Tender Offeror obtained the share valuation report from Nomura
Securities as of today ("Share Valuation Report"). The Tender
Offeror has not obtained an opinion concerning the appropriateness
of the Tender Offer Price (a fairness opinion) from Nomura
Securities.
|
The ranges of the valuations per share of the Target Company's
Shares analyzed based on each of the aforementioned methods are as
follows:
|
The average market price analysis (i):
|
|
|
|
793 yen to 855 yen
|
The average market price analysis (ii):
|
|
|
|
933 yen to 1,014 yen
|
The comparable company analysis:
|
|
|
|
396 yen to 1,181 yen
|
The DCF analysis:
|
|
|
|
618 yen to 1,283 yen
|
For the average market price analysis, (i) the reference date was
set for December 19, 2016, which is the business day immediately
preceding the announcement date of the Share Exchange and it is
considered that the share price on that date was not affected by the
Transaction to Make the Target Company a Wholly Owned Subsidiary,
and, pursuant to this analysis, the valuation range per the Target
Company's Shares was analyzed to fall within a range of 793 yen to
855 yen based on the closing price of the Target Company's Share at
the reference date quoted on the First Section of the Tokyo Stock
Exchange (855 yen), the average closing price quoted for the past
five (5) business days (849 yen) (any amount less than one (1) yen
has been rounded up or down to the nearest one (1) yen; the same
applies to the calculation of average closing price), the average
closing price quoted for the past one (1) month (815 yen), the
average closing price quoted for the past three (3) months (793 yen)
and the average closing price quoted for the past six (6) months
(800 yen). In addition, (ii) the reference date was set for April
20, 2017, which is the business day immediately preceding the
announcement date of the Tender Offer; and pursuant to this
analysis, the valuation range per share of the Target Company's
Shares was analyzed to fall within the range of 933 yen to 1,014
yen, based on the closing price of the Target Company's Shares at
the reference date quoted on the First Section of Tokyo Stock
Exchange (1,013 yen); the average closing price quoted for the past
five (5) business day period (1,001 yen); the average closing price
quoted for the past one (1) month period (1,010 yen); the average
closing price quoted for the past three (3) months (1,014 yen); and
the average closing price quoted for the past six (6) months (933
yen).
|
|
For the comparable company analysis, the share value of the Target
Company's Shares has been analyzed by comparing the market price of
shares and financial indicators representing profitability, etc. of
listed companies engaged in business similar to that conducted by
the Target Company and pursuant to this analysis, the valuation per
share of the Target Company's Shares was analyze to fall within a
range of 396 yen to 1,181 yen.
|
|
For the DCF analysis, the Target Company's enterprise value and
share value have been analyzed by taking the free cash flow that the
Target Company is expected to create for the fiscal year ended March
2017 and subsequent fiscal years based on the estimated future
earnings of the Target Company for the fiscal year ended March 2017
and subsequent fiscal years, taking into consideration factors such
as the business plan for the period from the fiscal year ended March
2017 until the fiscal year ended March 2020 of the Target Company;
trends in the Target Company's operating results to date; publicly
disclosed information; and effects resulting from the Transaction,
etc. and determining the present value of such free cash flow by
discounting it by using a certain discount rate. Pursuant to this
analysis, the valuation per share of the Target Company's Shares was
analyzed to fall within a range of 618 yen to 1,283 yen. The
business plan above is not premised on the implementation of the
Transaction. In addition, the Target Company's profit plan, which
was provided by the Target Company and confirmed by the Tender
Offeror, that Nomura Securities used as a basis for applying the DCF
method does not contain a significant increase or decrease in
earnings in any fiscal year.
|
In addition to the valuation results in the Share Valuation Report
obtained from Nomura Securities, the Tender Offeror considered the
Tender Offer Price by comprehensively taking into account such
factors as: the result of due diligence conducted on the Target
Company for the period from the middle to the end of March 2017,
whether the Target Company's board of directors would support the
Tender Offer; examples of the premiums added when determining tender
offer prices in tender offers conducted in the past by a party other
than the issuer in a similar situation to the Tender Offer (tender
offers against listed subsidiaries aiming to make such listed
subsidiary a wholly owned subsidiary of the tender offeror); the
market price of the Target Company's Shares; and the estimated
number of shares to be tendered in the Tender Offer; and in light of
the results of the discussion and negotiation with the Target
Company and other factors, the Tender Offeror ultimately determined
on the Tender Offer Price per share of 1,200 yen today.
|
|
The Tender Offer Price, 1,200 yen per share, represents (a) a
premium of 40.35% (rounded to second decimal place; the same applies
to the calculation of premium) on 855 yen, which is the closing
price of the Target Company's Share quoted on the First Section of
the Tokyo Stock Exchange on December 19, 2016, which is the business
day immediately preceding the announcement date of the Share
Exchange and it is considered that such price is not affected by the
Transaction to Make the Target Company a Wholly Owned Subsidiary,
(b) a premium of 47.24% on 815 yen, which is the simple average
closing price of the Target Company's Share quoted for the past one
(1) month (from November 21, 2016 to December 19, 2016), (c) a
premium of 51.32% on 793 yen, which is the simple average closing
price of the Target Company's Share quoted for the past three (3)
months (from September 20, 2016 to December 19, 2016), and (d) a
premium of 50.00% on 800 yen, which is the simple average closing
price of the Target Company's Share quoted for the past six (6)
month (from June 20, 2016 to December 19, 2016).
|
|
The Tender Offer Price, 1,200 yen per share, represents (a) a
premium of 18.46% on 1,013 yen, which is the closing price of the
Target Company's Shares quoted on the Tokyo Stock Exchange on April
20, 2017, which is the business day immediately preceding the
announcement date of the Tender Offer by the Tender Offeror, (b) a
premium of 18.81% on 1,010 yen, which is the simple average closing
price of the Target Company's Shares quoted for the past one (1)
month (from March 21, 2017 to April 20, 2017), (c) a premium of
18.34% on 1,014 yen, which is the simple average closing price of
the Target Company's Shares quoted for the past three (3) months
(from January 23, 2017 to April 20, 2017), and (d) a premium of
28.62% on 933 yen, which is the simple average closing price of the
Target Company's Shares quoted for the past six (6) months (from
October 21, 2016 to April 20, 2017).
|
|
In addition, in comparison with the calculation of the share value
of the Target Company's Shares pertaining to the share exchange rate
conducted by Nomura Securities in relation to the Share Exchange,
there is no change in the material assumptions for the calculation
by Nomura Securities in the Share Valuation Report, such as the
selection of comparable companies. However, the Target Company's
profit plan used by Nomura Securities in preparing the Share
Valuation Report, which was provided by the Target Company and
confirmed by the Tender Offeror, reflects the downward adjustment to
the performance forecast for the fiscal year ended March 2017 which
was announced by the Target Company as of today after the December
20, 2016 Press Release. Further, even after the downward adjustment,
the Target Company's profit plan that Nomura Securities used as a
basis for applying the DCF method, which was provided by the Target
Company and confirmed by the Tender Offeror, does not contain a
significant increase or decrease in earnings in any fiscal year.
Please refer to the December 20, 2016 Press Release for the basis of
the calculation of the share exchange rate conducted by Nomura
Securities through the Share Exchange and the background for
determining the share exchange rate by the Tender Offeror.
|
(ii)
|
|
|
|
|
Background of Calculation
|
|
(Background to the determination of the Tender Offer Price)
|
The Tender Offeror proposed the Tender Offer to the Target Company
at the beginning of March 2017, and the Tender Offeror has continued
to hold consultations and negotiations with the Target Company with
respect to the terms and conditions of the Tender Offer, including
the Tender Offer Price. Through the above consultations and
negotiations, the Tender Offeror has agreed with the Target Company
to terminate the Share Exchange Agreement by mutual agreement and
upon the terms and conditions of the Tender Offer, including the
Tender Offer Price. As a result thereof, the Tender Offeror resolved
at the meeting of its board of directors held today to implement the
Tender Offer, as a part of the Transaction, with the commencement
date of the Tender Offer being April 28, 2017, and the Tender
Offeror and the Target Company terminated the Share Exchange
Agreement by mutual agreement as of today after obtaining approval
at respective meetings of their boards of directors held on the same
day. For details, please refer to the sections titled "(1) Overview
of the Tender Offer" and "(2) Background to, Purpose of and Decision
Making Process of the Tender Offer, and Management Policy After the
Tender Offer" under "1. Purpose, etc. of Tender Offer" above.
|
|
The Tender Offeror determined the Tender Offer Price based on the
following background.
|
|
i.
|
|
|
|
|
Obtaining the share valuation report from a third-party appraiser
|
|
|
|
|
|
The Tender Offeror requested Nomura Securities, a financial advisor
and third-party appraiser that is independent from the Tender
Offeror and the Target Company, to calculate the value of the Target
Company's Shares upon determining the Tender Offer Price, and the
Tender Offeror obtained the Share Valuation Report from Nomura
Securities as of today. Nomura Securities is not a related party of
the Tender Offeror or the Target Company and has no material
interest regarding the Transaction.
|
|
|
|
|
|
|
ii.
|
|
|
|
|
Outline of advice from Nomura Securities
|
|
|
|
|
|
According to the Share Valuation Report, the methods adopted for
calculating the value of the Target Company's Shares and the ranges
of the valuation of the Target Company's Shares calculated based on
each of the methods adopted above are as follows:
|
|
|
|
|
|
|
The average market price analysis (i):
|
|
|
793 yen to 855 yen
|
|
|
|
|
|
|
The average market price analysis (ii):
|
|
|
933 yen to 1,014 yen
|
|
|
|
|
|
|
The comparable company analysis:
|
|
|
396 yen to 1,181 yen
|
|
|
|
|
|
|
The DCF analysis:
|
|
|
618 yen to 1,283 yen
|
iii.
|
|
|
|
|
Background to determination of the Tender Offer Price upon
consideration of the advice
|
|
|
|
|
|
In addition to the valuation results in the Share Valuation Report
obtained from Nomura Securities, the Tender Offeror considered the
Tender Offer Price by comprehensively taking into account such
factors as: the result of due diligence conducted on the Target
Company for the period from the middle to the end of March 2017,
whether the Target Company's board of directors would support the
Tender Offer; the premiums added when determining tender offer
prices in tender offers conducted in the past by a party other than
the issuer in a similar situation to the Tender Offer (tender offers
against listed subsidiaries aiming to make such listed subsidiary a
wholly owned subsidiary of the tender offeror); the market price of
the Target Company's Shares; and the estimated number of shares to
be tendered in the Tender Offer; and in light of the results of the
discussion and negotiation with the Target Company and other
factors, the Tender Offeror ultimately determined on the Tender
Offer Price per share of 1,200 yen as of today.
|
|
(Measures to Ensure the Fairness of the Tender Offer such as
Measures to Ensure the Fairness of the Tender Offer Price and
Measures to Avoid Conflicts of Interest)
|
|
Given that the Target Company is a consolidated subsidiary of the
Tender Offeror as of today and the Transaction in which the Tender
Offer is included falls under a material transaction, etc., with the
controlling shareholder, and that there is a structural conflict of
interest between the Tender Offeror and other shareholders of the
Target Company, and in view of ensuring the fairness of the Tender
Offer and avoiding conflicts of interest, the Tender Offeror and the
Target Company respectively implemented the following measures.
|
|
The Tender Offeror believes that the interests of the minority
shareholders of the Target Company have been sufficiently considered
since the Tender Offeror and the Target Company have taken the
measures stated in a. through f. below.
|
|
In addition, the measures, etc. described below that have been
conducted by the Target Company are based on the Target Company's
Press Release and the explanation by the Target Company.
|
|
a.
|
|
|
|
|
Measures by the Tender Offeror to ensure the fairness of the
Tender Offer Price and other measures to ensure the fairness of
the Tender Offer
|
|
In order to prevent arbitrariness in the decision making process
reaching the Tender Offer, the Tender Offeror requested Nomura
Securities to be its financial advisor, appointed Nagashima, Ohno &
Tsunematsu as its legal advisor, and obtained legal advice from that
law firm. In addition, Nomura Securities and Nagashima, Ohno &
Tsunematsu are independent from the Tender Offeror and the Target
Company and have no material interest with each of the Tender
Offeror and the Target Company. The Tender Offeror obtained the
Share Valuation Report from Nomura Securities as of today. The
Tender Offeror has not obtained an opinion concerning the
appropriateness of the Tender Offer Price (a fairness opinion) from
Nomura Securities. For details, please refer to "(i) Basis of
Calculation" above.
|
|
b.
|
|
|
|
|
Obtaining a share valuation report and a fairness opinion from an
independent third-party appraiser by the Target Company
|
|
According to the Target Company, to ensure the fairness of
decision-making process for the Tender Offer Price presented by the
Tender Offeror, the Target Company requested SMBC Nikko and Plutus
both of whom are a third party valuation institution independent
from the Target Company and the Tender Offeror to calculate the
value of the Target Company's Shares, and requested Plutus to submit
a fairness opinion with respect to the fairness of the Tender Offer
Price.
|
|
SMBC Nikko has adopted an approach of comparable companies analysis
as there are several comparable listed companies for which
comparison to the Target Company is possible, and analogical
inference of share value is possible through this approach.
Simultaneously, SMBC Nikko performed a DCF analysis in order to
reflect in the calculation the situation of future business
activities. Today, the Target Company received a valuation report
from SMBC Nikko. On the other hand, the Target Company has not
obtained an opinion to the effect that the tender offer price is
fair from a financial viewpoint (fairness opinion) from SMBC Nikko.
SMBC Nikko is not a related party of the Target Company or the
Tender Offeror and does not have any material interest which should
be described regarding the Transaction including the Tender Offer.
|
SMBC Nikko did not adopt the market price analysis, deeming it
difficult to conduct an unbiased assessment via the market price
analysis regarding the stock value of the Target Company whose stock
price has been running mostly parallel to that of Panasonic
following the Press Release dated December 20, 2016. On the other
hand, SMBC Nikko provided to the Target Company the market price
information (1,003 yen - 1,014 yen) as reference. In calculating the
market price information, SMBC Nikko set April 20, 2017, the
business day before the announcement date of the Tender Offer, as
the reference date and used the simple average of the closing prices
of the Target Company on the First Section of the Tokyo Stock
Exchange over certain periods ending on the reference date.
|
The following represent the approaches that SMBC Nikko opted to
adopt and the ranges of value per Target Company's Share based upon
the approaches (Note 1).
|
|
|
|
|
|
|
Comparable Companies Analysis
|
|
|
|
475yen - 1,452yen
|
|
|
|
|
|
|
DCF Analysis
|
|
|
|
800yen - 1,256yen
|
In performing the comparable companies analysis, SMBC Nikko
selected, Sumitomo Forestry Co., Ltd., Mitsui Home Co., Ltd., Open
House Co., Ltd. and Tama Home Co., Ltd. as comparable publicly
listed companies which had similar characteristics with the Target
Company (Note 2), and applied EV/EBITDA multiple, EV/EBIT multiple,
P/E Ratio and P/B Ratio as multiple ratios.
|
In performing the DCF Analysis, SMBC Nikko evaluated the enterprise
value by discounting to the present value at certain rates, the
future cash flows estimated based upon the financial forecasts by
the Target Company for the period from the fiscal year ended March
31, 2018 (FY2017) through the fiscal year ending March 31, 2020
(FY2019) (Note 3). SMBC Nikko calculated terminal value by perpetual
growth rate method and exit multiples method. For the perpetual
growth rate method, SMBC Nikko applied perpetual growth rate of
0.0%, and for the exit multiples method, SMBC Nikko applied EBITDA
multiples of 4.7 - 5.8x. As for the discount rate, SMBC Nikko
applied the rate of 6.94 - 8.49% (Note 4).
|
According to SMBC Nikko, the cash and deposits (sum of "cash and
deposits" and "deposit paid in parent company"; hereinafter the same
will apply) were reflected appropriately in the calculation of share
value, while the method differed depending on the approach of
valuation. In performing the comparable companies analysis, the
calculation of EV/EBIT and EV/EBITDA multiples fully reflected the
balance of cash and deposits of the Target Company. In the
Comparable Company Analysis, balance sheet figures were directly
used for the purpose of comparing with peers. As such, share value
in this case was calculated based upon the actual figures for cash
and deposits stated on the Target Company's balance sheet in order
to ensure the consistency of criteria. On the other hand, it is
understood that the analysis of PER and PBR does not reflect
specific figures of cash and deposits directly, as PER is a multiple
based upon a company's profitability, and PBR is a ratio of stock
price to net assets that a company has accumulated as a going
concern. (In the case of PBR, cash and deposits of a company are
valued as part of its assets and reflected indirectly in the value
of net assets, although there is no formula that includes cash and
deposits explicitly in the process of calculation.) In performing
the DCF analysis, in the process, cash and deposits were categorized
to into two separate items i.e. the working capital needed for the
business operation, and the funds available for other purposes. The
latter was added to the enterprise value as surplus funds in the
process of calculating share value. At the same time, the funds set
aside for the purpose of land acquisition etc. in the business of
selling real-estate lots were dealt with as an outflow of cash in
the period of business plan.
|
|
The following table shows the financial forecasts made by the Target
Company, which SMBC Nikko used as a basis for performing the DCF
analysis. These financial forecasts do not contain a significant
increase or decrease in earnings in any fiscal year. In addition,
these financial forecasts are not based on the assumption of
implementation of the Transaction.
|
(Millions of yen)
|
|
|
|
|
FY2017
|
|
|
|
FY2018
|
|
|
|
FY2019
|
Net Sales
|
|
|
|
370,000
|
|
|
|
390,000
|
|
|
|
404,000
|
Operating Income
|
|
|
|
13,000
|
|
|
|
16,500
|
|
|
|
20,000
|
EBITDA
|
|
|
|
18,000
|
|
|
|
21,500
|
|
|
|
25,000
|
Free Cash Flow
|
|
|
|
(17,740)
|
|
|
|
4,123
|
|
|
|
13,719
|
Please refer to the Press Release dated December 20, 2016, for the
basis for calculation of the share exchange ratio conducted by SMBC
and the process for determining the Share Exchange Ratio.
|
|
On the other hand, Plutus has adopted the market price analysis for
the Target Company since the Target Company's Shares are listed on a
financial instruments exchange and a market price is available. In
addition, as there are several comparable listed companies that
operate business similar with the Target Company and analogical
inference of share value through the comparable company analysis is
possible, Plutus has adopted the comparable companies analysis for
calculation. Furthermore, in order to take into account the state of
future business operations in the assessment, Plutus has adopted the
DCF analysis as well. Today, the Target Company received a valuation
report from Plutus. In addition, the Target Company obtained a
fairness opinion to the effect that the Tender Offer Price is fair
from a financial point of view to the minority shareholders of the
Target Company from Plutus. Plutus is a valuation institution
independent from the Target Company and the Tender Offeror, is not a
related party of the Target Company or the Tender Offeror, and does
not now have and has never had any business relationship or any
other interest in the Target Company or the Tender Offeror,
excluding services with respect to the Share Exchange and the
Transaction to Make the Target Company a Wholly Owned Subsidiary.
|
The methods used by Plutus in calculating the value of the Target
Company's Share and the ranges of per share value calculated by
those methods are as follows (Note 5):
|
|
|
|
|
|
|
Market Price Analysis (reference)
|
|
|
|
794yen - 1,014yen
|
|
|
|
|
|
|
Comparable Companies Analysis
|
|
|
|
574yen - 1,024yen
|
|
|
|
|
|
|
DCF Analysis
|
|
|
|
827yen - 996yen
|
In performing the market price analysis, Plutus set December 20,
2016, the announcement date of the Share Exchange, and April 20,
2017, the business day before the announcement date of the Tender
Offer, as the reference dates, and used the simple average closing
prices of the Target Company on the First Section of the Tokyo Stock
Exchange over certain periods ending on the respective reference
date.
|
|
In order to carry out the market price analysis separately for the
period before the announcement date of the Share Exchange and the
period after the next business day, Plutus set the reference dates
on December 20, 2016 and April 20, 2017. In the case that December
20, 2016 is set as the reference date, it is an analysis at the time
four months dated back from the scheduled announcement date of the
Tender Offer, and in the case that April 20, 2017 is set as the
reference date, there is a possibility that the market price of the
Target Company was affected by the Share Exchange Ratio. Judging
that the objectivity of the market price is limited, the calculation
result based on the market price analysis is regarded as reference
information. In performing the comparable companies analysis, Plutus
selected MISAWA HOMES CO., LTD. (Note 6), Mitsui Home Co., Ltd.,
Open House Co., Ltd. and Tama Home Co., Ltd as comparable publicly
listed companies which had similar characteristics with the Target
Company, and applied PER, EV/EBIT ratio and EV/EBITDA ratio as
multiples.
|
In performing the DCF analysis, Plutus evaluated the equity value by
discounting the future cash flow based on the financial forecasts
for the period from the fiscal year ending March 31, 2018 to the
fiscal year ending March 31, 2020 prepared by the Target Company and
the terminal value after the fiscal year ending March 31, 2021 to
the present value at discount rate of 4.308% - 6.151%. Plutus
calculated the terminal value by exit multiples method, and applied
EV/EBIT multiple of 5.50x - 6.69x and EV/EBITDA multiple of 4.31x -
4.93x.
|
The following table shows the financial forecasts which Plutus used
as a basis for performing the DCF analysis. Plutus did not assume
any significant fluctuations in earnings in the financial forecast.
The financial forecasts of the Target Company do not reflect the
consummation of the Transaction.
|
(Millions of yen)
|
|
|
|
|
FY2017
|
|
|
|
FY2018
|
|
|
|
FY2019
|
Net Sales
|
|
|
|
370,000
|
|
|
|
390,000
|
|
|
|
404,000
|
Operating Income
|
|
|
|
13,000
|
|
|
|
16,500
|
|
|
|
20,000
|
EBITDA
|
|
|
|
18,000
|
|
|
|
21,500
|
|
|
|
25,000
|
Free Cash Flow
|
|
|
|
(19,712)
|
|
|
|
6,348
|
|
|
|
15,276
|
Regarding the Share Exchange, please refer to the Target Company's
press release "PanaHome obtained a fairness opinion with regard to
the Share Exchange Ratio in the Share Exchange between PanaHome and
Panasonic and discloses an FAQ" announced on February 28, 2017 (the
"Press Release dated February 28, 2017") for the circumstances of
the Target Company's obtainment of Plutus's fairness opinion on the
Share Exchange Ratio and its outlines.
|
|
(Note 1)
|
|
According to SMBC Nikko, in calculating the stock value of the
Target Company, SMBC Nikko has relied upon the assumptions that
all information and materials that were furnished by the Target
Company and publicly available information were accurate and
complete and all facts that could materially affect the
calculation of the stock value were disclosed to SMBC Nikko, and
SMBC Nikko has used the materials and information as it was and
has not independently verified the accuracy and completeness
thereof. Similarly, SMBC Nikko has not independently evaluated,
appraised or assessed assets and liabilities (including contingent
liabilities) of the Target Company and their respective
subsidiaries and affiliates, and has not made any analysis and
valuation of individual assets and liabilities. SMBC Nikko has not
independently requested any third-party institution to make such
valuation, appraisal or assessment. SMBC Nikko assumed that the
Target Company's financial forecasts and other materials used as
base materials for preparing the value report were prepared by the
management of the Target Company based on the best estimation and
judgment which could be obtained at this point and in accordance
with reasonable and appropriate methods. Accordingly, the result
of the calculation of the Target Company's stock value by SMBC
Nikko reflects the information and economic conditions up to
today. The results of the calculation of the Target Company's
stock value by SMBC Nikko are not expressions of opinion
concerning the fairness of the Tender Offer Price.
|
(Note 2)
|
|
According to SMBC Nikko, to establish a peer group of similar
public companies in the comparable companies analysis and to
appropriately evaluate the stock value, SMBC Nikko put emphasis on
following factors appropriate process of selecting peers,
integrity and consistency of logic, objectivity of criteria. SMBC
Nikko checked (1) similarity in contents of business, (2)
similarity in size of business and on top of (1) and (2), (3)
non-existence of stock price anomalies and other abnormal factors,
in the process of screening the comparable companies.
|
|
|
Based upon the above mentioned criteria, four companies (Sumitomo
Forestry Co., Ltd., Mitsui Home Co., Ltd., Open House Co., Ltd., and
Tama Home Co., Ltd.) were selected as peers for the calculation of
the stock value. For further details concerning the comparable
listed company analysis, please refer to the Press Release dated
February 28, 2017.
|
(Note 3)
|
|
The Target Company has revised the financial forecasts for the
period from the fiscal year ended March 2017 to the fiscal year
ending March 2020 from the forecast figures used in the Press
Release dated December 20, 2016. Specifically, the Target Company
has revised the financial forecasts for the fiscal year ended
March 2017 downward as set out in the press release "PanaHome
Announces to have Revised the Financial Forecasts" disclosed
today, given that (i) the orders of products such as box unit
houses have been sluggish due to the persistent trend of
home-buyer behavior towards the lengthening of negotiations in the
expectation that mortgage rates will continue to hover near the
current low level, (ii) deliveries of some multi-story residential
building have been delayed into the next fiscal year due to
completion dates being concentrated near the end of fiscal year
and the associated workforce shortages, and (iii) the sales of
condominiums have not grown at the expected pace; in light of such
revision, and taking into account the effects of the Target
Company's efforts to spread out construction completion dates
under concrete study and secure additional personnel, the Target
Company has also revised the forecasts for the period from the
fiscal year ending March 2018 to the fiscal year ending March 2020
downward. The revision also took into consideration the Target
Company's expectation that the gross margin rate will improve due
to the reduction of work costs by the Target Company's efforts to
spread out construction completion dates and the effects of
ensuring sales strategies that emphasize added value. SMBC Nikko
and Plutus calculated the stock value by discounting the future
cash flows etc. which the Target Company is expected to generate
based upon the revised financial forecasts for the period from the
fiscal year ended March 2018 to the fiscal year ending March 2020
to arrive at a present value in the DCF Analysis.
|
(Note 4)
|
|
According to SMBC Nikko, it applied the discount rate calculated
based upon the median of the beta (a measure of the relationship
between the price movements of individual stocks and the
fluctuations of the TOPIX) values of the four peers selected for
the comparable listed company analysis, deeming it difficult to
conduct an unbiased assessment if they use the beta value of the
Target Company whose stock price has been running mostly parallel
to that of the Tender Offeror following the Press Release dated
December 20, 2016.
|
(Note 5)
|
|
In preparing and submitting the fairness opinion, etc. and
conducting the calculation of the Target Company's stock value
underlying the opinion, Plutus has relied upon the assumptions
that all information and materials that were furnished by the
Target Company and publicly available information were accurate
and complete and all facts that could materially affect the
calculation of the Target Company's stock value were disclosed to
Plutus, and Plutus has used the materials and information as it
was and has not independently verified the accuracy and
completeness thereof, and is not obliged to verify them.
|
|
|
Plutus has not independently evaluated, appraised or assessed assets
and liabilities (including off-balance-sheet assets,
off-balance-sheet liabilities and other contingent liabilities) of
the Target Company and their respective subsidiaries and affiliates,
and has not made any analysis and valuation of individual assets and
liabilities. Plutus has not independently requested any third-party
institution to make such valuation, appraisal or assessment. Plutus
has not independently assessed creditworthiness of the Target
Company under applicable laws or ordinances in respect of
insolvency, suspension of payment or similar matters.
|
|
|
Plutus assumed that the Target Company's financial forecasts and
other materials used as base materials for preparing the fairness
opinion, etc. were prepared by the management of the Target Company
based on the best estimation and judgment which could be obtained at
this point and in accordance with reasonable and appropriate
methods. Plutus has not guaranteed their feasibility, nor expressed
any opinion on the analyses or forecasts subject to which they were
prepared or the assumptions on which they were based.
|
|
|
The fairness opinion, etc. constitutes an expression of opinion as
of the date of its preparation regarding whether the Transaction is
fair from a financial point of view to the Target Company's minority
shareholders. Such opinion is based on the premise of the financial
and capital markets, economic conditions and other environment as of
the preparation date, and based on the information that Plutus has
obtained on or before the preparation date. The content of the
fairness opinion, etc. may be affected by subsequent changes in
circumstances. In such case, Plutus will not, however, be obligated
to update, revise or supplement the content of the fairness opinion,
etc. In the fairness opinion, etc. Plutus does not infer or indicate
any opinion other than those expressly indicated in the fairness
opinion, etc. or with respect to the matters after the submission
date of the fairness opinion, etc.
|
|
|
The fairness opinion, etc. was provided for the purpose of being
used as a base material upon the Target Company in order to verify
the fairness of the Tender Offer Price. Accordingly, the fairness
opinion, etc. does not express any opinion on the relative benefit
of the Target Company's decision or the Transaction compared to
alternative strategical solutions which the Target Company can
select. In addition, the fairness opinion, etc. does not express any
opinion for shareholders, creditors, or any other stakeholders of
the Target Company, nor recommend shareholders any actions regarding
the Transaction.
|
(Note 6)
|
|
According to Plutus, MISAWA HOMES CO., LTD is newly added as a
comparable publicly listed company in performing the valuation
this time. The reason is that, in performing the valuation for the
Share Exchange, MISAWA HOMES CO., LTD was excluded because a
tender offer was made to its shares on the valuation date, however
on the reference date in performing the valuation this time, the
ordinary market transactions were taking place after the tender
offer for the MISAWA HOMES CO., LTD's shares.
|
c.
|
|
|
|
Obtaining the Response to Referral From an Independent Special
Committee
|
|
According to the Target Company, on November 14, 2016, the Target
Company established a special committee to avoid conflicts of
interest with the Tender Offeror and prevent the Share Exchange
from becoming disadvantageous to the non-controlling shareholders
of the Target Company. The Special Committee consisted of Mr.
Naoto Terakawa, an outside director and independent officer of the
Target Company, Mr. Katsuhiko Arita, an outside company auditor
and independent officer of the Target Company, and Mr. Takashi
Goto (an attorney at STW & Partners) and Mr. Akira Sakata (a
certified public accountant at AKIRA SAKATA Certified Public
Accountant Office), both of whom are independent and outside
experts having no interest in the Tender Offeror, the controlling
shareholder of the Target Company, or the Target Company itself.
Pursuant to the resolutions of the board of directors on March 15,
2017 and March 22, 2017, in examining the Transaction (including
the Tender Offer), the Target Company referred the following
matters (collectively, the "Questions") to the Special Committee
(consisting of four members; Mr. Naoto Terakawa declined to be a
member of the Special Committee due to scheduling difficulties,
and his position was replaced by Mr. Haruo Kawamura,
Representative Director of CAS Capital, Inc., who is an
independent and outside expert having no interest in the Tender
Offeror, the controlling shareholder of the Target Company, or the
Target Company itself) (for the independence of the members of
Special Committee, please see "Note: Independence of members of
Special Committee" below) and requested their opinion (I) whether
the Target Company's board of directors should vote to express an
opinion in favor of the Tender Offer and to recommend that the
shareholders of the Target Company accept the Tender Offer, and to
implement the Transaction to Make the Target Company a Wholly
Owned Subsidiary by its shareholders other than the Tender Offeror
if the Tender Offer is executed, taking into account (i) whether
the Transaction to Make the Target Company a Wholly Owned
Subsidiary through the Tender Offer and the Procedures for Making
the Target Company a Wholly Owned Subsidiary will enhance the
Target Company's corporate value, (ii) whether the determination
of the Transaction to Make the Target Company a Wholly Owned
Subsidiary has been conducted using fair procedures, giving due
consideration so as not to undermine the interest of the minority
shareholders of the Target Company, and (II) whether the board of
director's approval of implementation of the Tender Offer and the
transaction for making the Target Company a wholly owned
subsidiary will disadvantage minority shareholders of the Target
Company.
|
|
From March 22, 2017 to April 21, 2017, the Special Committee
carefully reviewed the Questions by holding ten meetings in total,
as well as by gathering information through the Target Company
secretariat and other staff and consulting with each other whenever
necessary. In conducting their examination, the Special Committee
asked the Target Company secretariat questions concerning the Target
Company's recent performance and financial status, the process of
preparing the business plan and its details, how the Transaction has
been discussed, the purpose of the Transaction, the advantages and
disadvantages of the Transaction, the background of changing the
scheme for the Transaction from the Share Exchange, and the
background of Oasis Proposal. The Target Company received from SMBC
Nikko and Plutus explanations concerning the calculation of value of
the Target Company's Shares together with timely reports from SMBC
Nikko on the negotiations with the Tender Offeror, as well as
recommending the Target Company staff on its negotiation policy at
important stages of negotiation. The Special Committee also asked
questions to the Tender Offeror to confirm the Target Company's
position within the Panasonic group, the background of changing the
scheme for the Transaction to Make the Target Company a Wholly Owned
Subsidiary from the Share Exchange to the Tender Offer, the purpose
of the Transaction and the Tender Offeror's intended strategy for
after the Transaction, and the advantages and disadvantages of the
Transaction. In addition, the Special Committee also asked Mori
Hamada & Matsumoto, legal advisor to the Target Company, questions
concerning the measures to avoid conflicts of interest, including
measures to ensure the fairness of the procedures of the
Transaction, the decision making method, and the procedures
implemented by the Target Company board of directors with respect to
the Transaction.
|
|
As stated in the section titled "(iv) Background to the decision of
the Target Company to support the Tender Offer and reasons therefor"
under "a. Background to, purpose of and decision making process of
the Tender Offer" of "(2) Background to, Purpose of and Decision
Making Process of the Tender Offer, and Management Policy After the
Tender Offer" of "1. Purpose, etc. of Tender Offer" above, the
Special Committee, at the request of the Target Company, evaluated
whether the Target Company should accept the Oasis Proposal. The
Special Committee, independent of the Tender Offeror and the Target
Company, carefully considered the details of Oasis Proposal, and
submitted its opinion below to the board of directors of the Target
Company to the effect that the Oasis Proposal does not affect the
contents of the Response to Referral by the Special Committee
regarding the implementation of the Transaction with the Tender
Offeror.
|
After taking the said procedures and in light of each investigation,
discussions and negotiation, the Special Committee carefully
discussed and reviewed the Questions and submitted the Response to
Referral as follows to the board of directors of the Target Company
today.
|
|
(i)
|
|
|
|
The Target Company has made no obviously irrational judgments in
determining to that effect, and therefore the Transaction to Make
the Target Company a Wholly Owned Subsidiary will enhance the
Target Company's corporate value, considering that: (a) the
necessity of the Transaction to Make the Target Company a Wholly
Owned Subsidiary is acknowledged given that the majority of the
Target Company's profit comes from the Japanese housing business,
which is projected to decline in the medium to long term, making
it the Target Company's most important challenge to maintain or
increase domestic sales and profit and expand overseas business;
(b) the implementation of the post- Transaction to Make the Target
Company a Wholly Owned Subsidiary strategy can be viewed as
contributing to the Target Company's overcoming its business
challenges; (c) the expected disadvantages can be viewed as minor;
and (d) the Target Company do not find any reason to believe that
maintaining current capital relationship or alliance with a third
party is an effective alternative to the Transaction to Make the
Target Company a Wholly Owned Subsidiary.
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|
|
|
|
|
(ii)
|
|
|
|
All decisions with respect to the Transaction to Make the Target
Company a Wholly Owned Subsidiary, including the determination of
the consideration for the Transaction to Make the Target Company a
Wholly Owned Subsidiary, were made using fair procedures, giving
due consideration, and therefore it will not undermine the
interest of the minority shareholders of the Target Company,
considering that: (a) in determining the Tender Offer Price, the
Tender Offer Price was agreed after the Target Company's
secretariat, consisting of persons who have no interest in the
Tender Offeror, actually negotiated in good faith multiple times
on the basis of non-arbitrary valuations by the independent
experts and with the advice of the financial advisor and the
recommendations of the Special Committee; (b) the Tender Offer
Price is within the range of valuations set out in the valuation
report obtained from SMBC Nikko, higher than the range of
valuations set out in the valuation report obtained from Plutus,
and is in line with the average premium offered in similar cases,
demonstrating concern for minority shareholders' expected
acquisition price, theoretical stock price of the Target Company's
Shares in the Share Exchange and the contents of Oasis Proposal;
and (c) other fair procedures have been performed giving due
consideration to the interest of shareholders, including the
establishment of the Special Committee.
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|
|
|
|
|
(iii)
|
|
|
|
In light of the above, the Special Committee believes that it is
reasonable for the Target Company's board of directors to approve
to express an opinion in favor of the Tender Offer and to
recommend that the shareholders of the Target Company accept the
Tender Offer, and to implement the procedure for squeeze-out of
the Target Company's shareholders other than the Tender Offeror if
the Tender Offer is executed.
|
|
|
|
|
|
(iv)
|
|
|
|
In addition, based on the reasons (i) and (ii) above, the Special
Committee believes that the approval by the Target Company's board
of directors of the implementation of the Tender Offer and the
Transaction to Make the Target Company a Wholly Owned Subsidiary
will not cause any disadvantages to the Target Company's
shareholders.
|
|
|
|
|
|
Note:
|
|
|
|
The Independence of Members of Special Committee
|
?
|
|
|
|
Mr. Katsuhiko Arita qualifies as "Outside Company Auditor" under
the Companies Act, and is also independent in light of the Target
Company's "Standards for Determining the Independence of
Independent Directors/Auditors (please refer to the Corporate
Governance Report disclosed by the Target Company on June 24,
2016)"
|
?
|
|
|
|
Mr. Takashi Goto neither has nor has had a relationship with or
any other interest in the Target Company or the Tender Offeror,
and he is an independent outside expert. In the past, Mr. Goto
worked for the independent law firm that currently advises the
Target Company in relation to the Transaction (including the
Tender Offer), but it had been almost eight years and 10 months
since Mr. Goto left that firm and, considering the fact that the
said law firm and the firm he currently works for have a
competitive relationship, the Special Committee has determined
that this will not affect the independence of Mr. Goto.
|
?
|
|
|
|
Mr. Akira Sakata neither has nor has had a relationship with or
any other interest in the Target Company or the Tender Offeror,
and he is an independent outside expert.
|
?
|
|
|
|
Mr. Haruo Kawamura neither has nor has had a relationship with or
any other interest in the Target Company or the Tender Offeror,
and he is an independent outside expert.
|
|
|
|
|
|
d.
|
|
|
|
Obtaining Opinions from an Independent Outside Law Firm by the
Target Company
|
|
|
|
|
|
|
|
|
|
According to the Target Company, it appointed Mori Hamada &
Matsumoto as its legal advisor and received legal advice concerning
the decision making method and procedures to be implemented by the
board of directors, including for the procedures of the Transaction
(including the Tender Offer). Mori Hamada & Matsumoto is independent
from the Tender Offeror and the Target Company, and has no material
interest in the Tender Offeror and the Target Company.
|
|
|
|
|
|
e.
|
|
|
|
Unanimous Approval of Directors and the No Objection Opinion of
All Company Auditors (Excluding Directors and Company Auditors
with Conflicts of Interest) at the Target Company
|
|
|
|
|
|
According to the Target Company, during the process of discussion
and negotiation with the Tender Offeror, the board of directors of
the Target Company discussed and reviewed the terms and conditions
of the Transaction, based on (a) SMBC Nikko's valuation report on
the value of the Target Company's Shares obtained today, (b) Plutus'
valuation report and fairness opinion on the value of the Target
Company's Shares obtained today, and (c) legal advice from Mori
Hamada & Matsumoto, as well as paying regard to the contents of the
Response to Referral to the extent possible (please refer to the
section titled "c. Obtaining the Response to Referral From an
Independent Special Committee" above for details).
|
|
As set forth in the section titled "(ii) Background to the execution
of the Share Exchange Agreement" under "a. Background to, purpose of
and decision making process of the Tender Offer" of "(2) Background
to, Purpose of and Decision Making Process of the Tender Offer, and
Management Policy After the Tender Offer" of "1. Purpose, etc. of
Tender Offer" above, in order for the Target Company to deal with
medium to long term management challenges in terms of brand
strategies, large-scale investment, and reallocating management
resources, it is desirable to increase the Target Company's
corporate value in the medium to long term, rather than focusing on
the risk of short-term negative effects on profitability. As a
listed subsidiary, it has been difficult for the Target Company to
take adequately bold or quick measures, but the implementation of
the Transaction will enable the Target Company to do so. In order
for the Target Company to deal with medium to long term management
challenges forcefully, the Target Company believes that the Target
Company will need to utilize the resources of Tender Offeror more
than ever, but if the Target Company remains independent as a listed
company, the interests of the Target Company and that of the Tender
Offeror will not necessarily align. In particular, the Tender
Offeror and the Target Company have had a supplier-customer
relationship with respect to housing materials due to the
characteristics of each business, and the conflicts of interest
between the two companies are quite apparent in this respect. By
becoming a wholly owned subsidiary of the Tender Offeror through the
Transaction, interests of both companies will be aligned and the
Target Company will have more access to the Tender Offeror's
resources, as stated in "(ii) Background to the execution of the
Share Exchange Agreement" under "a. Background to, purpose of and
decision making process of the Tender Offer" of "(2) Background to,
Purpose of and Decision Making Process of the Tender Offer, and
Management Policy After the Tender Offer" of "1. Purpose, etc. of
Tender Offer" above. Therefore, as the Target Company determined in
reviewing the Share Exchange, the Target Company will be able to
increase the Target Company's corporate value by becoming a wholly
owned subsidiary of the Tender Offeror through the Transaction.
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|
The Target Company determined that the Transaction provides to the
Target Company's shareholders a reasonable opportunity to sell
shares, with respect to the Tender Offer Price, considering that (i)
as stated in the sections titled "b. Obtaining a share valuation
report and a fairness opinion from an independent third-party
appraiser by the Target Company," "c. Obtaining the Response to
Referral From an Independent Special Committee," "d. Obtaining
Opinions from an Independent Outside Law Firm by the Target
Company," above and "f. Measures to ensure acquisition
opportunities, etc. for other investors" below, the Target Company
agreed to the Tender Offer Price after it took measures to ensure
the fairness of the Tender Offer, received advices from SMBC Nikko,
received reports from Plutus, received recommendations from the
Special Committee, and discussed and negotiated sincerely with the
Tender Offeror, (ii) the Tender Offer Price is evaluated as (a) in
determining the Tender Offer Price, the Tender Offer Price was
agreed after the Target Company's secretariat, consisting of persons
who have no interest in the Tender Offeror, actually negotiated in
good faith multiple times on the basis of non-arbitrary valuations
by the independent experts and with the advice of the financial
advisor and the recommendations of the Special Committee, and (b)
the Tender Offer Price is within the range of valuations by SMBC
Nikko, higher than the range of valuations set out in the valuation
report obtained from Plutus and is in line with the average premium
offered in similar cases, demonstrating concern for minority
shareholders' expected acquisition price, the theoretical stock
price of the Target Company's Shares in the Share Exchange, and the
contents of Oasis Proposal in the Response to Referral by the
Special Committee independent from the Target Company, (iii) the
Tender Offer Price falls within the range of calculation results
derived from the comparable companies analysis and within the range
of calculation results derived by the DCF Analysis that are the
result of calculation by SMBC Nikko as set forth in the section
titled "b. Obtaining a share valuation report and a fairness opinion
from an independent third-party appraiser by the Target Company"
above, (iv) the Tender Offer Price is higher than the range of all
calculation results derived from the market price analysis,
comparable companies analysis and DCF Analysis that are the result
of calculation by Plutus as set forth in the section titled "b.
Obtaining a share valuation report and a fairness opinion from an
independent third-party appraiser by the Target Company" above, (v)
the Tender Offer Price includes a sizeable premium in contrast to
previous tender offer cases of shares, etc. of listed companies by
companies other than the issuer as provided by SMBC Nikko, given
that a premium of 40.35% (rounded to two decimal places; hereinafter
the same will apply to the size (%) of premiums on the value of
shares) on 855 yen, which is the closing price of the Target
Company's Shares quoted on the Tokyo Stock Exchange on December 19,
2016 (the business day immediately preceding the announcement date
for the Share Exchange which was a day before the value of the
Target Company's Shares has been affected by the Share Exchange
Ratio), a premium of 47.24% on 815 yen (rounded to the nearest whole
yen; hereinafter the same will apply to simple average closing
prices), which is the simple average closing price for the last one
month period from December 19, 2016, a premium of 51.32% on 793 yen
for the last three month period, and a premium of 50.00% on 800 yen
for the last six month period are included in the Tender Offer
Price, (vi) the Target Company has taken measures to ensure fairness
of the Tender Offer as set out in the sections titled "a. Measures
by the Tender Offeror to ensure the fairness of the Tender Offer
Price and other measures to ensure the fairness of the Tender
Offer," "b. Obtaining a share valuation report and a fairness
opinion from an independent third-party appraiser by the Target
Company," "c. Obtaining the Response to Referral From an Independent
Special Committee," "d. Obtaining Opinions from an Independent
Outside Law Firm by the Target Company," above and "f. Measures to
ensure acquisition opportunities, etc. for other investors" below,
and (vii) the Tender Offer Price is higher than any of the
theoretical stock prices of the Target Company's Shares as
calculated using the Share Exchange Ratio based on the closing price
of the Tender Offeror shares at Tokyo Stock Exchange on each
business day between December 21, 2016 (the business day immediately
after the announcement of the Share Exchange) and April 20, 2017
(the business day immediately preceding the announcement of the
Tender Offer), and the Target Company believes that changing the
scheme from the Share Exchange to the Transaction will not cause any
particular disadvantages to the Target Company's shareholders other
than the Tender Offeror, but rather, the Target Company believes it
will make it possible to provide an opportunity for its shareholders
other than the Tender Offeror to enjoy a higher premium than under
the Share Exchange. By changing the scheme from the Share Exchange
to the Transaction, the timing as to when the Target Company will
become a wholly owned subsidiary of the Tender Offeror will be
slightly later than the Target Company initially expected through
the Share Exchange. However, comprehensively considering various
circumstances including the conditions for the Transaction etc., the
implementation of the Transaction instead of the Share Exchange will
not cause any particular disadvantages to the Target Company's
shareholders other than the Tender Offeror, but rather, the Target
Company believes it will contribute to the interest of the Target
Company's shareholders.
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The Target Company received the Oasis Proposal from one of the
Target Company's shareholders, Oasis, which operates Oasis
Investment II Master Fund Ltd. Since the conditions of Oasis
Proposal (including scope of the purchase and whether a maximum or
minimum number of shares to be purchase will be set) and the policy
after the acquisition remained unclear, the Target Company sent a
letter to Oasis on April 3, 2017 to confirm the details of Oasis
Proposal, and the Target Company received the response from Oasis on
April 20, 2017. The Target Company reviewed the Oasis Proposal,
while reviewing the proposal for the Transaction by the Tender
Offeror. The board of directors at the Target Company requested the
Special Committee to evaluate whether the Target Company should
accept the Oasis Proposal. The Special Committee provided the Target
Company with its opinion that (i) the feasibility of Oasis Proposal
is doubtful in the first place; (ii) even if one assumes that a
certain increase in corporate value of the Target Company may be
expected, the profitability of the main business may decrease, and
corporate value may decline from the current level because if the
Target Company accepted the Oasis Proposal and existing the capital
relationship and collaboration between the Tender Offeror and the
Target Company were changed, it would have a negative impact on the
structure of business relying on the Panasonic brand; (iii) the
Special Committee does not see any reason that the Oasis Proposal
would in any way increase corporate value more than the Transaction
to Make the Target Company a Wholly Owned Subsidiary would, and (iv)
the Tender Offer Price is well above the price offered by the Oasis
Proposal, and therefore the Oasis Proposal does not affect the
contents of the Response to Referral by the Special Committee
regarding the implementation of the Transaction with the Tender
Offeror. Therefore, as stated above, the Target Company determined
that the Target Company will not accept to the Oasis Proposal
because the Target Company believes that the implementation of the
Transaction with the Tender Offeror will increase the Target
Company's corporate value and contribute to the interest of its
shareholders.
|
|
For these reasons, the Target Company has resolved at its board of
directors meeting held today to express an opinion in favor of the
Tender Offer, and to recommend that the shareholders of the Target
Company accept the Tender Offer.
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|
In order to avoid conflicts of interest, the Target Company's
directors Mr. Ryuji Matsushita, Mr. Nobuhiko Teranishi, Mr. Hideyo
Hamatani and Mr. Shinichi Watabe, who also serve as executive
counsellors or employees of the Tender Offeror, did not participate
in any of the discussions regarding the Transaction or vote at the
board of directors meeting of the Target Company (including the
meeting above), and did not participate in any of the discussions
and negotiations regarding the Transaction on behalf of the Target
Company.
|
|
The agenda regarding the Transaction was approved at the meeting of
the board of directors of the Target Company by the unanimous vote
of five out of the Target Company's nine directors excluding Mr.
Ryuji Matsushita, Mr. Nobuhiko Teranishi, Mr. Hideyo Hamatani and
Mr. Shinichi Watabe set forth above, and three company auditors of
the Target Company expressed the opinion that they had no objections
with respect to the board of directors of the Target Company
expressing its opinion in favor of the Tender Offer and recommending
that the shareholders of the Target Company accept the Tender Offer.
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f.
|
|
|
|
Measures to ensure acquisition opportunities, etc. for other
investors
|
|
The Tender Offeror has set the tender offer period for the Tender
Offer (the "Tender Offer Period") to be 30 business days, while the
minimum tender offer period required by laws and ordinances is 20
business days. Setting a relatively long Tender Offer Period ensures
an appropriate opportunity for the shareholders of the Target
Company to make a decision whether to tender their shares in the
Tender Offer and also ensures an opportunity for any party other
than the Tender Offeror to offer to purchase the Target Company's
Shares.
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|
In addition, the Tender Offeror has never agreed with the Target
Company on any matter that would restrict the Target Company's
contact with any counter-offeror including any agreement such as an
agreement on a transaction protection clause that prohibits the
Target Company from contact with any counter-offerors and the Tender
Offeror gives consideration to ensure the fairness of the Tender
Offer by assuring an opportunity for counter-offer, etc. as well as
setting the Tender Offer Period above.
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(iii)
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Relationship with the Appraiser
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|
Nomura Securities, a financial advisor (an appraiser) of the Tender
Offeror, is not a related party of the Tender Offeror or the Target
Company and has no material interest regarding the Tender Offer.
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|
(5)
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|
Number of Shares to be Purchased
|
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|
|
|
|
|
|
|
|
Number of shares to be purchased
|
|
|
|
Minimum number of shares to be purchased
|
|
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Maximum number of shares to be purchased
|
76,985,108 (shares)
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|
|
|
-
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|
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|
-
|
(Note 1) Since neither a maximum number nor a minimum number of
shares to be purchased has been set in the Tender Offer, the Tender
Offeror will purchase all of the Tendered Shares, Etc. As indicated
in the "Number of shares to be purchased" column above, the number
of shares to be purchased is calculated by deducting the number of
the Target Company's Shares held by the Tender Offeror as of today
(91,036,634 shares) and the treasury shares held by the Target
Company as of March 31, 2017 (541,791 shares) from the number of
issued shares of the Target Company as of March 31, 2017
(168,563,533 shares).
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(Note 2) Shares constituting less than a whole unit and cross-held
shares will also be subject to purchase through the Tender Offer.
The Target Company may purchase its own shares in accordance with
legal procedures during the Tender Offer Period from any shareholder
who exercises the right under the Companies Act to require the
Target Company to purchase shares constituting less than a whole
unit.
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(Note 3) The Tender Offeror does not intend to acquire, through the
Tender Offer, any treasury shares held by the Target Company.
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(6)
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Transfer of Ownership Percentage of Shares through the Tender
Offer, etc.
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|
Number of Voting Rights Represented by Shares Held by the Tender
Offeror before the Tender Offer, etc.
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|
91,036
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|
(Ownership Percentage of
Shares before the Tender Offer, etc.: 54.18%)
|
Number of Voting Rights Represented by Shares Held by the Special
Related Parties before the Tender Offer, etc.
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|
To be
determined
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|
(Ownership Percentage of
Shares before the Tender Offer, etc.: To be determined)
|
Number of Voting Rights Represented by Shares Held by the Tender
Offeror after the Tender Offer, etc.
|
|
|
168,021
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|
(Ownership Percentage of
Shares after the Tender Offer, etc.: 100.00%)
|
Number of Voting Rights Represented by Shares Held by the Special
Related Parties after the Tender Offer, etc.
|
|
|
0
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(Ownership Percentage of
Shares after the Tender Offer, etc.: 0.00%)
|
Total Number of Voting Rights of All Shareholders of the Target
Company
(As of September 30, 2016)
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166,982
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(Note 1) The "Number of Voting Rights Represented by Shares Held by
the Tender Offeror after the Tender Offer, etc." is the number of
voting rights obtained by adding the "Number of Voting Rights
Represented by Shares Held by the Tender Offeror before the Tender
Offer, etc." to the number of voting rights pertaining to the number
of shares to be purchased in the Tender Offer.
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(Note 2) Although the "Number of Voting Rights Represented by Shares
Held by the Special Related Parties before the Tender Offer, etc."
and its "Ownership Percentage of Shares before the Tender Offer,
etc." are unknown at present, such figures will be investigated and
disclosed by April 27, 2017, the day before the commencement day of
the Tender Offer Period. In addition, since all of the Target
Company's Shares held by the Target Company which is a special
related party (541,791 shares, as of March 31, 2017) are treasury
shares, there are no voting rights. Further, since the number of the
Target Company's Shares held by special related parties is also
subject to the Tender Offer, in spite of the results of the
investigation above, the "Number of Voting Rights Represented by
Shares Held by the Specially Related Parties after the Tender Offer,
etc." and its "Ownership Percentage of Shares after the Tender
Offer, etc." are described as 0 and 0.00%.
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(Note 3) The "Total Number of Voting Rights of All Shareholders of
the Target Company" represents the total number of voting rights of
all shareholders of the Target Company as of September 30, 2016, as
described in the Target Company's 60th FY 3Q Securities Report filed
as of February 10, 2017 (described on the basis that 1 unit is 1,000
shares). However, as fractional shares of less than one unit and
cross-held shares are subject to the Tender Offer, in calculating
the "Ownership Percentage of Shares before the Tender Offer, etc."
and the "Ownership Percentage of Shares after the Tender Offer,
etc.," the denominator is the number of voting rights (168,021)
corresponding to the number of shares (168,021,742 shares) obtained
by deducting (a) the number of treasury shares held by the Target
Company as of March 31, 2017 (541,791 shares), from (b) the number
of issued shares of the Target Company as of March 31, 2017
(168,563,533 shares).
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(Note 4) The "Ownership Percentage of Shares before the Tender
Offer, etc." and the "Ownership Percentage of Shares after the
Tender Offer, etc." are rounded up or down to second place.
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(7)
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Aggregate Tender Offer Price ¥ 92,382,129,600
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|
(Note) The "Aggregate Tender Offer Price" is calculated by
multiplying the number of shares to be purchased upon the Tender
Offer (76,985,108 shares) by the Tender Offer Price per share (1,200
yen).
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(8)
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Method of Settlement
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(i)
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Name and Address of the Head Office of the Financial Instruments
Business Operator/Banks in Charge of Settlement for Purchase
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Nomura Securities Co., Ltd. 1-9-1, Nihonbashi, Chuo-ku, Tokyo
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(ii)
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Settlement Commencement Date
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June 20, 2017 (Tuesday)
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(iii)
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Method of Settlement
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A notice of purchase by way of the Tender Offer will be mailed to
the address of each tendering shareholder (or the standing proxy
in the case of foreign shareholders) promptly after the end of the
Tender Offer Period. If electronic delivery of documents has been
approved by the tendering shareholders on Nomura Net & Call, the
notice of purchase will be given to the shareholders
electronically on Nomura Net & Call's website (https://netcall.nomura.co.jp/).
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Payment of the purchase price will be made in cash. The tendering
shareholders are entitled to receive the purchase price for the
shares under the Tender Offer promptly after the commencement date
of settlement in a manner designated by the tendering shareholders,
such as remittance (a remittance fee may be charged).
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(iv)
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Method of Returning Share Certificates, etc.
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If not all of the shares will be purchased in accordance with the
terms described in the section titled "(ii) Conditions of
Withdrawal, etc. of Tender Offer, Details thereof and Method of
Disclosure of Withdrawal" under "(9) Other Conditions and Methods of
Purchase" below, the Tendered Shares, Etc. that are required to be
returned will be returned to the tendering shareholders promptly
after two (2) business days following the last day of the Tender
Offer Period (the day of the withdrawal, etc. if the Tender Offer is
withdrawn, etc.) by restoring the record of the shares in the
account of the tendering shareholders to the state that existed
immediately prior to the relevant tender. (If the tendering
shareholders wish their share certificates, etc. to be transferred
to their accounts established with other financial instruments
business operators, they are asked to confirm with the head office
or domestic branch office of the tender offer agent at which the
relevant tender was accepted.)
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(9)
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Other Conditions and Methods of Purchase
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(i)
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Conditions set forth in each Item of Article 27-13, Paragraph 4 of
the Act and Details thereof
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Since neither a maximum nor a minimum number of shares to be
purchased has been set, all of the Tendered Shares, Etc. will be
purchased by the Tender Offeror.
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(ii)
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Conditions of Withdrawal, etc., of Tender Offer, Details thereof
and Method of Disclosure of Withdrawal
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|
The Tender Offer may be withdrawn upon the occurrence of any event
listed in Article 14, Paragraph 1, Items 1.1 through 1.9 and Items
1.12 through 1.18, Items 3.1 through 3.8 and Item 3.10, as well as
Article 14, Paragraph 2, Items 3 through 6 of the Financial
Instruments and Exchange Act Enforcement Order (Cabinet Order No.
321 of 1965, as amended, the "Enforcement Order"). The "matters
equivalent to the matters listed in Items 1.1 through 1.9" in
Article 14, Paragraph 1, Item 3.10 of the Enforcement Order means
where it is found that there is a false statement regarding, or an
omission of, a material matter to be stated, in the statutory
disclosure documents which the Target Company submitted in the past,
and where the Tender Offeror was not aware of the false statement or
the omission and, despite using due care, the Tender Offeror was
unable to be aware of the false statement or the omission.
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Should the Tender Offeror intend to withdraw the Tender Offer, it
will give public notice thereof through electronic disclosure as
well as in the Nihon Keizai Shimbun; provided, that if it is
difficult to give such notice within the Tender Offer Period, the
Tender Offeror will make an official announcement pursuant to
Article 20 of the Cabinet Ordinance Concerning the Disclosure of
Tender Offers for Shares, etc., by Persons Other Than Issuers
(Ministry of Finance Ordinance No. 38 of 1990, as amended; the "TOB
Order") and forthwith give public notice.
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(iii)
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Conditions of Reduction of Purchase Price, Details thereof and
Method of Disclosure of Reduction
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Pursuant to Article 27-6, Paragraph 1, Item 1 of the Act, if the
Target Company takes any action set forth in Article 13, Paragraph 1
of the Enforcement Order during the Tender Offer Period, the Tender
Offeror may reduce the tender offer price pursuant to standards set
forth in Article 19, Paragraph 1, of the TOB Order.
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Should the Tender Offeror intend to reduce the tender offer price,
it will give public notice thereof through electronic disclosure as
well as in the Nihon Keizai Shimbun; provided, that if it is
difficult to give such notice within the Tender Offer Period, the
Tender Offeror will make an official announcement pursuant to
Article 20 of the TOB Order and forthwith give public notice. If the
tender offer price is reduced, the Tender Offeror will purchase the
Tendered Shares, Etc. tendered on or prior to the public notice at
the reduced tender offer price.
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(iv)
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Matters Concerning Tendering Shareholders' Right of Cancellation
of Contract
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A Tendering Shareholder may cancel a contract related to the
Tender Offer at any time during the Tender Offer Period. In order
to cancel a contract related to the Tender Offer, the tendering
shareholder must deliver or mail (by post) a written request for
the cancellation of the contract related to the Tender Offer (the
"Cancellation Documents") to the head office or a branch office in
Japan of the tender offer agent that received the application from
such tendering shareholder, by 15:30 on the last day of the Tender
Offer Period. If cancellation is made by postal mail, the
cancellation of the contract related to the Tender Offer will not
be effective unless the Cancellation Documents are delivered at
the head office or the relevant branch office of the tender offer
agent by 15:30 on the last day of the Tender Offer Period. A
contract applied through Nomura Net & Call can be canceled either
via Nomura Net & Call's website (https://netcall.nomura.co.jp/)
or by sending the Cancellation Documents. To cancel a contract via
Nomura Net & Call's website, the tendering shareholder must
complete the cancellation procedures in the manner prescribed on
that website by 15:30 on the last day of the Tender Offer Period.
To cancel a contract by sending the Cancellation Documents, the
tendering shareholder must request the form of the Cancellation
Documents in advance from Nomura Net & Call's customer support and
then send the filled out format to Nomura Net & Call. The
Cancellation Documents that are sent must arrive at Nomura Net &
Call by 15:30 of the last day of the Tender Offer Period.
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|
No compensation for damages or penalty payment will be demanded of
any tendering shareholder by the Tender Offeror even if the
tendering shareholder cancels a contract. The cost of returning the
Tendered Shares, Etc. will be borne by the Tender Offeror.
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(v)
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|
|
Method of Disclosure if the Conditions or other Terms of the
Tender Offer are Changed
|
|
Should any terms or conditions of the Tender Offer be changed, the
Tender Offeror will give public notice thereof through electronic
disclosure as well as in the Nihon Keizai Shimbun; provided, that if
it is difficult to make such notice within the Tender Offer Period,
the Tender Offeror will make an official announcement pursuant to
Article 20 of the TOB Order and forthwith give public notice. Should
any terms or conditions of the Tender Offer be changed, the purchase
of the Tendered Shares, Etc. tendered on or prior to the date of
such public notice will also be made in accordance with the terms
and conditions as changed.
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(vi)
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Method of Disclosure if Amendment to Registration Statement is
Submitted
|
|
If the Tender Offeror submits an amendment to the registration
statement to the Director-General of the Kanto Local Finance Bureau,
the Tender Offeror will promptly make an official announcement of
the details of such amended statement to the extent relevant to the
contents of the public notice of the Tender Offer, pursuant to the
method set forth in Article 20 of the TOB Order. The Tender Offeror
will also promptly amend the explanatory statement and provide an
amended statement to the tendering shareholders who have received
the original statement. If the extent of the amendments is limited,
however, the Tender Offeror will prepare and deliver to the
tendering shareholders a document stating the reason for the
amendments, the matters amended and the details thereof.
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|
(vii)
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|
Method of Disclosure of Results of the Tender Offer
|
|
The Tender Offeror will announce the results of the Tender Offer in
accordance with methods stipulated in Article 9-4 of the Enforcement
Order and Article 30-2 of the TOB Order on the day following the
last day of the Tender Offer Period.
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|
(10)
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Date of Public Notice of the Tender Offer
|
|
April 28, 2017 (Friday)
|
|
(11)
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|
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Tender Offer Agent
|
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Nomura Securities Co., Ltd. 1-9-1, Nihonbashi, Chuo-ku, Tokyo
|
|
3.
|
|
|
Policy, etc. after the Tender Offer and Future Outlook
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|
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|
(1)
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|
|
Policy after the Tender Offer, etc.
|
|
With respect to the policy, etc. after the Tender Offer, please see
the section titled "(2) Background to, Purpose of and Decision
Making Process of the Tender Offer, and Management Policy After the
Tender Offer" under "1. Purpose, etc. of Tender Offer" above.
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|
(2)
|
|
|
Future outlook
|
|
Any effect on the performance of the Panasonic Group by the Tender
Offer will be promptly reported upon the occurrence of any
circumstances that should be disclosed.
|
|
4.
|
|
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Other Information
|
|
(1)
|
|
|
Agreements between the Tender Offeror and the Target Company or
its Directors and Officers, and Details Thereof
|
|
(i)
|
|
|
Agreements between the Tender Offeror and the Target Company and
details thereof
|
|
According to the Target Company's Press Release, at a meeting of its
board of directors held today, its board of directors resolved that
the Target Company will express an opinion in favor of the Tender
Offer , and to recommend that the shareholders of the Target Company
accept the Tender Offer. For details, please refer to the section
titled "(iv) Background to the decision of the Target Company to
support the Tender Offer and reasons therefor" under "a. Background
to, purpose of and decision making process of the Tender Offer" of
"(2) Background to, Purpose of and Decision Making Process of the
Tender Offer, and Management Policy After the Tender Offer" of "1.
Purpose, etc. of Tender Offer" and the section titled "e. Unanimous
Approval of Directors and the No Objection Opinion of All Company
Auditors (Excluding Directors and Company Auditors with Conflicts of
Interest) at the Target Company" under "(Measures to Ensure the
Fairness of the Tender Offer such as Measures to Ensure the Fairness
of the Tender Offer Price and Measures to Avoid Conflicts of
Interest)" of "(ii) Background of Calculation" of "(4) Basis of
Calculation, etc. of the Tender Offer Price" of "2. Outline of the
Tender Offer" above.
|
|
(ii)
|
|
|
Background to, Purpose of and Decision Making Process of the
Tender Offer, and Management Policy After the Tender Offer
|
|
For details, please refer to the section titled "(2) Background to,
Purpose of and Decision Making Process of the Tender Offer, and
Management Policy After the Tender Offer" under "1. Purpose, etc. of
Tender Offer" above.
|
|
(iii)
|
|
|
Measures to Ensure the Fairness of the Tender Offer Such As
Measures to Ensure the Fairness of the Tender Offer Price and
Measures to Avoid Conflict of Interest
|
|
For details, please refer to the section titled "(Measures to Ensure
the Fairness of the Tender Offer such as Measures to Ensure the
Fairness of the Tender Offer Price and Measures to Avoid Conflicts
of Interest)" of "(ii) Background of Calculation" of "(4) Basis of
Calculation, etc. of the Tender Offer Price" of "2. Outline of the
Tender Offer" above.
|
|
(2)
|
|
|
Other Information Considered to be Necessary for Investors to
Determine Whether to Tender the Tender Shares in the Tender Offer
|
|
|
|
|
(a)
|
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|
Details, etc. of Information Received on a Fact Concerning Launch
of a Tender Offer
|
|
The Tender Offeror received information from the Target Company on
February 22, 2017 that Oasis informed the Target Company of Oasis's
intention to purchase the Target Company's Shares at 1,050 yen per
share subject to due diligence and to conduct a tender offer subject
to the support of the Target Company as of February 22, 2017. In
addition, the Tender Offeror received information from the Target
Company as of today that the Target Company received a letter from
Oasis stating that Oasis has an intention to purchase all of the
issued shares of the Target Company. For details of the information
received, the matters set forth in Article 62-2, Item 1 of the
Cabinet Office Ordinance on Restrictions on Securities Transactions,
etc. are as follows.
|
|
|
|
|
Name of the tender offeror, etc. pertaining to the tender offer
|
|
|
Oasis Management Company Ltd.
|
Address or location
|
|
|
Ugland House, PO Box 309, Grand Cayman, KY1-1104, Cayman Islands.
|
Name of issuer of the relevant shares, etc. and the class thereof
|
|
|
PanaHome Corporation
Common shares
|
Period of the tender offer, etc.
|
|
|
Unknown
|
Price of the tender offer, etc.
|
|
|
JPY 1,050
|
Number of share certificates, etc. to be purchased
|
|
|
All of the issued shares
|
Details of the conditions set forth in each item of Article 27-13,
Paragraph 4 of the Act
|
|
|
Unknown
|
(b)
|
|
|
Details, etc. of Information Received on a Fact Concerning Launch
of a Tender Offer
|
|
The Target Company issued the press release titled the "PanaHome
Announces to have Revised the Financial Forecasts" as of today. The
summary of such announcement is as follows. For details, please
refer to the press release.
|
The Revised Forecasts for Fiscal 2017 (from April 1, 2016 to March
31, 2017)
|
|
|
|
Consolidated Net Sales
|
|
|
Consolidated Operating Income
|
|
|
Consolidated Ordinary Income
|
|
|
Net Income Attribute to Owners of Parent
|
|
|
Consolidated Net Income Per Share
|
Previous forecast (A)
|
|
|
Million yen
370,000
|
|
|
Million yen
16,000
|
|
|
Million yen
15,900
|
|
|
Million yen
10,100
|
|
|
yen sen
60.15
|
Revised forecasts (B)
|
|
|
359,600
|
|
|
11,800
|
|
|
11,600
|
|
|
7,500
|
|
|
44.67
|
Difference (B - A)
|
|
|
(10,400)
|
|
|
(4,200)
|
|
|
(4,300)
|
|
|
(2,600)
|
|
|
-
|
Difference (%)
|
|
|
(2.8)%
|
|
|
(26.3)%
|
|
|
(27.0)%
|
|
|
(25.7)%
|
|
|
-
|
(Reference)Financial Results for Fiscal 2016
|
|
|
352,971
|
|
|
15,851
|
|
|
15,866
|
|
|
10,053
|
|
|
59.86
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
End.
|
|
|
[Soliciting Regulations]
|
This press release is a news statement intended for the announcement
of the Tender Offer to the general public and is not intended for
soliciting an offer to sell the shares in connection with the Tender
Offer. If anyone desires to sell his or her shares, a shareholder
should, at his or her own responsibility, review the tender offer
explanatory statement for the Tender Offer and accept the Tender
Offer in his or her own discretion. This press release is not
considered as an offer or solicitation of sales of securities or
solicitation of offer of purchase of securities and does not
constitute any such part. This press release (or any part of it) or
the fact of its distribution does not provide a basis for any kind
of agreement pertaining to the Tender Offer, and it may not be
relied upon when executing any such agreement.
|
[Regulations of the United States]
|
The Tender Offeror, each of the financial advisors to the Tender
Offeror and the Target Company, and tender offer agent (including
their affiliated companies) may, in its ordinary business, purchase
shares in the Target Company's Shares for its own account or for the
account of its clients prior to the Tender Offer or during the
Tender Offer Period outside the Tender Offer in accordance with the
requirements of Rule 14e-5(b) of the U.S. Securities Exchange Act of
1934 or take actions for such purchase to the extent permitted by
financial instruments and exchange related laws and regulations and
other applicable laws and regulations of Japan. If any information
concerning such purchase is disclosed in Japanese, the purchasing
party will disclose such information on its English website (or by
any other means of public disclosure).
|
[Forward-Looking Statements]
|
This press release includes "forward-looking statements" that
include those within the meaning of Section 27A of the U.S.
Securities Act of 1933, as amended, and Section 21E of the U.S.
Securities Exchange Act of 1934. Known and unknown risks,
uncertainties and other factors may cause the actual results to be
materially different from the forecast, etc. expressed or implied by
the "forward-looking statements". The Tender Offeror and its related
parties do not warrant the achievement of the result expressed or
implied by the "forward-looking statements." The "forward-looking
statements" in this press release is based on the information
currently available to the Tender Offeror. The Tender Offeror and
its related party undertake no obligation to publicly update or
revise the "forward-looking statements" to reflect the matters and
situations in the future unless it is required by the laws and
regulations.
|
[Other Countries]
|
In certain countries or regions, the announcement, issue or
distribution of this press release may be restricted by laws or
regulations. In such cases, you are required to be aware of such
restrictions and comply with the laws and regulations of such
countries or regions. This press release does not constitute any
solicitation of an offer to sell or offer to purchase shares in
relation to the Tender Offer, and shall be considered as a mere
distribution of informative materials.
|
|
Disclaimer Regarding Forward-Looking Statements
|
This press release includes forward-looking statements of the
Panasonic Group. To the extent that statements in this press release
do not relate to historical or current facts, they constitute
forward-looking statements. These forward-looking statements are
based on the current assumptions and beliefs of the Panasonic Group
in light of the information currently available to it, and involve
known and unknown risks, uncertainties and other factors. Such
risks, uncertainties and other factors may cause the Panasonic
Group's actual results, performance, achievements or financial
position to be materially different from any future results,
performance, achievements or financial position expressed or implied
by these forward-looking statements. The Panasonic Group undertakes
no obligation to publicly update any forward-looking statements
after the date of this press release. Investors are advised to
consult any further disclosures by the Tender Offeror in their
subsequent filings under the Financial Instrument and Exchange Act
of Japan (the FIEA) and other publicly disclosed documents.
|
The risks, uncertainties and other factors referred to above
include, but are not limited to, the factors listed below. The
factors listed below are not all-inclusive and further information
is contained in the most recent English translated version of the
Tender Offeror's securities reports under the FIEA and any other
documents which are disclosed on its website.
|
?
|
|
|
Economic conditions, particularly consumer spending and corporate
capital expenditures in the Americas, Europe, Japan, China and
other Asian countries
|
?
|
|
|
Volatility in demand for electronic equipment and components from
business and industrial customers, as well as consumers in many
product and geographical markets
|
?
|
|
|
The possibility that excessive currency rate fluctuations of the
U.S. dollar, the euro, the Chinese yuan and other currencies
against the yen may adversely affect costs and prices of the
Tender Offeror's products and services and certain other
transactions that are denominated in these foreign currencies
|
?
|
|
|
The possibility of the Panasonic Group incurring additional costs
of raising funds, because of changes in the fund raising
environment
|
?
|
|
|
The possibility of the Panasonic Group not being able to respond
to rapid technological changes and changing consumer preferences
with timely and cost-effective introductions of new products in
markets that are highly competitive in terms of both price and
technology
|
?
|
|
|
The possibility of not achieving expected results or incurring
unexpected losses in connection with the alliances or mergers and
acquisitions
|
?
|
|
|
The possibility of not being able to achieve its business
objectives through joint ventures and other collaborative
agreements with other companies, including due to the pressure of
price reduction exceeding that which can be achieved by its effort
and decrease in demand for products from business partners which
Panasonic highly depends on in B2B business areas
|
?
|
|
|
The possibility of the Panasonic Group not being able to maintain
competitive strength in many product and geographical areas
|
?
|
|
|
The possibility of incurring expenses resulting from any defects
in products or services of the Panasonic Group
|
?
|
|
|
The possibility that the Panasonic Group may face intellectual
property infringement claims by third parties;
|
?
|
|
|
Current and potential, direct and indirect restrictions imposed by
other countries over trade, manufacturing, labor and operations
|
?
|
|
|
Fluctuations in market prices of securities and other assets in
which the Panasonic Group has holdings or changes in valuation of
long-lived assets, including property, plant and equipment and
goodwill, deferred tax assets and uncertain tax positions; future
changes or revisions to accounting policies or accounting rules
|
?
|
|
|
The possibility of incurring expenses resulting from a leakage of
customers' or confidential information from Panasonic Group
systems due to unauthorized access or a detection of vulnerability
of network-connected products of the Panasonic Group
|
?
|
|
|
Natural disasters including earthquakes, prevalence of infectious
diseases throughout the world, disruption of supply chain and
other events that may negatively impact business activities of the
Panasonic Group.
|
|
|
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20170421005932/en/
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