Source: TietoEnator
The Board of Directors of TietoEnator recommends shareholders and holders of stock options not to accept Cidron Services Oy's offer of EUR 15 per share.
The Board of Directors considers that the price offered in Cidron Services Oy's ("Cidron Services") offer does not reflect the true value of the company and recommends shareholders and holders of stock options not to accept the offer.
The Company announced on 16 April a good performance in the first quarter of 2008 with an increase in net sales of 6% to EUR 468.3 million and an increase in operating profit, before capital gains and one-off items, of 15% to EUR 37.6 million compared to the first quarter in 2007.
In addition to the continued execution of the Performance Improvement Programme announced in January 2008, the management team is undertaking a series of activities in turning around the company's past development. These actions include the development of a new organization structure, commencement of portfolio changes and continued risk management and quality improvements. Management has successfully commenced the Performance Improvement Programme with annualized cost savings achieved in the first quarter of 2008 of EUR 36 million from the planned EUR 100 million annual cost savings from the end of 2009.
The current equity markets declined sharply in short term prior to the offer from Cidron Services. The offer coincides with a period that includes a low point in TietoEnator's historical share price and the lowest point since November 2006 for the Finnish equity market as a whole. Accordingly, the Board of Directors considers the premia implied in the offer price of Cidron Services inadequate to the shareholders and holders of stock options in TietoEnator.
The financial position of the Company is strong given the current economic and financial climate, and the Board believes in continued profitable growth of the Company through organic growth and acquisitions.
The Board believes that the IT Services industry, both in the Nordic region and globally, will see continuing developments in terms of organic growth as well as restructuring and consolidation. Alongside with focusing on the implementation of the revised strategy, the Board continues to consider, and is in active dialogue on, other alternatives to enhance shareholder value. The Board will keep the market informed if a firm and actionable alternative for shareholders materialises that could bring more value for shareholders than our revised strategy.
The Board has received a written opinion dated 20 April 2008 from Deutsche Bank AG, London Branch ("Deutsche Bank") to the effect that it is Deutsche Bank's opinion that the price of the offer is inadequate, from a financial point of view, to the holders of ordinary shares and the holders of stock options in the Company as a whole.