TietoEnator Corporation and AttentiV Systems Group plc have agreed the terms of a cash offer to be made by TietoEnator for the entire issued and to be issued share capital of AttentiV. AttentiV is an experienced provider of software solutions and associated services to the financial service sector in the UK and is listed on AIM (Alternative Investment Market).
TietoEnator intends to offer 71 pence for each AttentiV share, making a total offer value of approximately Â£ 46.6 million (around 67.9 MEUR). The directors of AttentiV intend unanimously to recommend that AttentiV shareholders accept the offer.
Increased growth potential for both companies
The proposed transaction forms a part of TietoEnator's strategy of expanding its Banking & Insurance business globally. This business has several customers among the top-tier UK banks, but does not currently have a significant local presence in the UK. The acquisition will give TietoEnator this presence along with the opportunity to build upon AttentiV's valued customer base. As AttentiV's products and TietoEnator's global banking solutions are to a large extent complementary, the combination of the two businesses will create a highly attractive offering to the entire UK banking industry.
TietoEnator expects to be able to generate revenue synergies as a result of the transaction. As part of the TietoEnator group AttentiV will be able to expand its current business more rapidly, particularly in the top-tier banking market, benefiting from TietoEnator's broad range of solutions and services. At the same time AttentiV will be able to expand its current business into areas where TietoEnator has particular strength, such as core banking, payments, cards and internet banking solutions, and additionally use TietoEnator's global organisation to promote its own solutions outside the UK.
TietoEnator also expects to create significant potential for AttentiV to expand its business through its service model "Core Application Modernisation Partnership", which combines long-term application management with component-based systems renewal.
"The acquisition of AttentiV, a well-established company with a strategic customer base, means that TietoEnator is establishing an excellent platform for further growth in the UK financial services market," says Mr Matti Lehti, President and CEO of TietoEnator. "Our aim is to continue the business operations of AttentiV with the current management team and product portfolio. We will integrate our existing UK banking solutions business with AttentiV and, supported by our strong IT services competency in general, we plan to extend the scope of our offering to the UK market. After the transaction, we will serve our customers with the skills and resources of more than 2,200 Banking & Insurance specialists."
Mr Peter Bertram, Chairman of AttentiV, states: "We believe that the offer by TietoEnator reflects AttentiV's fundamental strengths and prospects and provides our shareholders with certainty and value at a premium to the current market value of AttentiV. As a result of the acquisition, TietoEnator's Banking & Insurance business area will gain a strong platform to develop its UK business. AttentiV customers will benefit from the broader range of products and services that TietoEnator can add to AttentiV's existing offering. In turn, the management and employees of AttentiV will have the opportunity to become part of one of Europe's largest IT services companies."
The offer in brief
The terms in brief are as follows:
- TietoEnator offers 71 pence in cash for each AttentiV share.
- The offer represents a premium of approximately 25.7% over the closing middle market price of 56.5 pence per AttentiV share on 4 April 2005, the last business day before the date of this announcement and a premium of approximately 30.6% on the average closing middle market price of approximately 54.35 pence per AttentiV share for the period from 20 January 2005 (being the date on which AttentiV issued a trading statement) to 4 April 2005 the date immediately preceding the date of this announcement.
- The total value of the offer amounts to approximately Â£ 46.6 million (around 67.9 MEUR).
- The directors of AttentiV consider the terms of the offer to be fair and reasonable and intend unanimously to recommend that AttentiV Shareholders accept the offer, when made.
- TietoEnator has received irrevocable undertakings to accept the offer from shareholders representing 13,327,292 AttentiV shares, representing approximately 22.0 % of AttentiV's existing issued share capital, and has received indications of support from AttentiV shareholders representing 14,345,129 AttentiV shares, representing approximately 23.7 % of AttentiV's existing issued share capital
In accordance with standard UK practice, the offer will become unconditional when accepted by the holders of not less than 90% of the AttentiV shares (or a lower percentage determined by TietoEnator but not less than 50%), subject to regulatory approval and other customary closing conditions.
TietoEnator will finance the offer by using its existing cash reserves and credit facilities.
The financial effect of the AttentiV acquisition on TietoEnator's earnings per share is expected to be positive in 2005. This statement should not be taken to mean that TietoEnator Corporation earnings per share for 2005 or subsequent periods will be higher than that of prior periods.
The offer is subject to the UK City Code on Takeovers and Mergers, which limits TietoEnator's communication on the transaction to this news release and, when made, will be subject to the customary conditions for a UK public offer. Further information, including in relation to such conditions, may be obtained from the attached announcement (in English).
TietoEnator is being advised by Regent Associates in connection with the offer.
The offer document is expected to be published as soon as practicable. Once published, there will be an initial offer period of 21 days which may, at TietoEnator's discretion, be extended for a period of up to a maximum of 60 days to allow for satisfaction of the acceptance condition (referred above) and further 21 days thereafter to satisfy other conditions.