SUMMARY INFORMATION REGARDING THE OFFERING TO THE SHAREHOLDERS AND CONVERTIBLE HOLDERS IN PEAB INDUSTRI AB.

Transcription

1 SUMMARY INFORMATION REGARDING THE OFFERING TO THE SHAREHOLDERS AND CONVERTIBLE HOLDERS IN PEAB INDUSTRI AB.

2 SUMMARY INFORMATION REGARDING THE OFFERING TO THE SHAREHOLDERS AND CONVERTIBLE HOLDERS IN PEAB INDUSTRI AB. This document should be seen as an introduction to the prospectus and a brief summary of the original Swedish language prospectus. As this summary does not necessarily contain all the information needed to make an investment decision, all decisions to accept the offer and invest in shares in Peab must be based on an assessment of the prospectus in its entirety and the supplementary prospectus, which will be submitted to the swedish fi nancial supervisory authority for approval and registration in conjunction with the publication of the interim report on 17 november Potential investors are advised that civil law liability for information which is included in or missing from the Swedish summary or any translation thereof may only be imposed if the incorrect information or omission is misleading or inconsistent with other parts of the prospectus. In case a legal action is commenced regarding the prospectus information, the plaintiff investor may have to defray the costs for translation of the prospectus before the proceedings start. The Board of Peab is responsible for the information in this prospectus. The description of Peab Industri on pages in the prospectus has been reviewed by the Board of Peab Industri AB in accordance with what is stated on page 135 in the prospectus. THE OFFER IN SUMMARY Peab s shareholders, representing approximately 71 percent of the voting power in the company, decided on 15 October 2008 that Peab s Board should resolve an extraordinary general meeting for the purpose of make a public offer to shareholders and holders of convertibles in Peab Industri. On 10 November 2008, Peab made public its decision, ratifi ed at the extraordinary general meeting on the same day, to make a public tender offer to the shareholders and convertible debenture holders of Peab Industri to tender all their shares and convertible debentures issued by Peab Industri to Peab. Peab does not own any shares in Peab Industri, but holds convertibles issued by Peab Industri for a nominal amount of SEK 198 million. Consideration of the offer: Three (3) newly-issued Class A shares in Peab are offered for two (2) Class A shares in Peab Industri Three (3) newly-issued Class B shares in Peab are offered for two (2) Class B shares in Peab Industri For each convertible issued by Peab Industri and transferred by the holder, a cash payment of SEK ) will be made, corresponding to the nominal amount including accrued interest on the convertible. (For further information on terms and conditions for convertibles, please see page 143 in the prospectus). The registration period for the offer is from 13 November 2008 up to and including 3 December If Peab completes the offer by 9 December, Peab may begin reporting settlement around 16 December to shareholders and holders of convertibles who have accepted the offer. If the offer is fully subscribed, a maximum of 127,881,822 new shares in Peab will be issued (max. 14,708,553 Class A and max. 113,173,269 Class B), which means shareholders of Peab Industri will have a maximum holding corresponding to 42 percent of capital and 43 percent of voting power. BACKGROUND AND REASONS In autumn 2006, the Board of Peab announced its intention to distribute the subsidiary Peab Industri s shares to Peab s shareholders and list the company on OMX Nordic Exchange. At the time, the companies had a total turnover of about SEK 30 billion. The spin-off divided activities into the two parts of Peab, with construction and civil engineering work conducted in Peab and associated services in Peab Industri. The decision to spin-off Peab Industri, prompted by increasing demand in Peab s areas of operation, enabled the companies to specialise while also continuing to cooperate closely. The ability to operate as two separate companies during the economic prosperity we have seen in recent years has helped Peab Industri and Peab achieve strong growth, with their combined annual turnover amounting to approximately 40 billion. For Peab, the changes in the economy we are now experiencing make it strategically important to have close access to machinery and raw materials from now on. A business combination with Peab Industri will enable Peab to optimise its level of industrialisation in the construction process, while increasing the effi ciency of its purchasing organisation. It will also increase the group s fi nancial strength by coordinating the two companies fi nancial resources. Examples of this include a higher equity/assets ratio and better conditions for 1) Exact amount is SEK for each convertible, corresponding to of nominal amount. 2

3 improved cash fl ow in the merged companies compared with Peab s present situation. Overall, the business combination will produce an industrially stronger company which is well equipped for future challenges both in the long and short term. THE NEW GROUP IN BRIEF By more closely linking Peab s and Peab Industri s operations, each company gains a stronger position on the Nordic market, with better scope for expanding market shares. The strategic logic behind the business combination should also be viewed against the backcloth of a deteriorating market outlook in the construction sector. By coordinating the two companies fi nancial resources, the group s fi nancial strength is boosted. More effi - cient purchasing organisations in the group and Peab s improved access to important supplies of machinery and raw materials create competitive advantages, particularly as large infrastructure projects appear to be driving the market as we look forward. Peab s present structure will be unchanged, with the same Board and executive management business concept, goals and dividend policy. For its part, Peab Industri will also continue to work under unchanged market conditions, cooperating with Peab on an arm s-length basis to ensure deliveries to the construction and civil engineering sector. PEAB IN BRIEF Business Peab was founded in 1959 by the Paulsson brothers Erik and Mats and is currently one of the largest construction and civil engineering companies on the Nordic market. The company is represented throughout Sweden and in the major conurbations of Norway and Finland. Peab s business concept is to be a construction and civil engineering company whose guiding principle is total quality at all stages of the construction process. By combining innovative thinking and solid professional expertise, Peab will make the client s interests its own and in doing so build for the future. The group consists of four business areas Construction Sweden, Construction Abroad, Civil Engineering and Trust/ Management. In Construction Sweden, Peab carries out contracts for external clients and internal projects. The product mix is broad, covering housing, public buildings and commercial premises. Clients are private property owners, local authorities and private customers in Sweden. Construction-related services, such as building service and maintenance, also come under the business area. Construction Abroad consists of Peab s foreign operations in Norway and Finland. Production comprises housing, commercial premises and public buildings. Clients are private property owners, commercial clients and local authorities. The Civil Engineering business area carries out assignments throughout Sweden. These include construction of large infrastructure projects and civil engineering work. Clients include the Swedish Road Administration, the Swedish rail administration, local authorities and the local business community. Civil Engineering also deals with the operation and maintenance of roads and community facilities. Trust/Management covers central companies, certain subsidiaries and joint ventures and other holdings. Market Most of Peab s sales come from the Swedish construction and civil engineering market. Although this market experienced strong growth for a number of years, the present fi nancial turmoil and imminent recession indicate a slowdown in growth for 2008 and 2009 compared with previous years. The Swedish Construction Federation has predicted growth of 4 percent for the Swedish construction and civil engineering market for 2008 and 1 percent for The combination of high and sharply fl uctuating market rates and reduced access to building materials and labour has driven up construction costs. The bleak economic climate has resulted in receding employment, a fall in private consumption and lower wage trends. These factors all contribute towards a reduction in construction, although this in turn means the shortage of resources is less severe. Instead, the civil engineering market, stimulated by increasing public investment in infrastructure, is expected to act as a catalyst over the next few years. Private investments in power and energy are also expected to have a positive effect on development in the area. Other Nordic markets are also expected to be affected by the economic decline. According to Euroconstruct, the 2008 growth fi gure for the Norwegian market is expected to be approximately 1 percent and for the Finnish market 3 percent, while the markets are expected to decline 2009 with 2 percent and 5 percent respectively. 3

4 PEAB S FINANCIAL INFORMATION IN BRIEF SEK million Jan Jun 2008 Jan Jun Jan Dec Jan Dec 1) ) Jan Dec Jan Dec 1) 2) 3) ) Income statement items Net sales 16,833 14,892 31,977 26,132 30,321 25,501 Operating profit , , Profite before tax , , Profit fron continuing operations Profit from discontinued operations Net profit ,048 1, Balance sheet items Non-current assets 2,785 2,731 2,448 4,620 4,620 3,999 Current assets 13,821 12,096 12,904 11,893 11,893 9,743 Total assets 16,606 14,827 15,352 16,513 16,513 13,742 Equity 3,580 3,168 3,606 3,278 3,278 3,348 Long-term liabilities 1, ,640 1,640 2,304 Current liabilities 11,144 10,884 10,834 11,595 11,595 8,090 Total equity and liabilities 16,606 14,827 15,352 16,513 16,513 13,742 Key ratios Operating margin, % Return on equity, % ) ) Equity/assets ratio, % Average number of employees 11,997 12,575 11,480 10,740 12,197 11,317 Order intake 17,896 20,165 37,529 28,711 28,711 24,227 Order backlog 27,306 26,017 26,299 20,642 20,642 17,722 1) In the income statements for 2006 and 2007, Peab Industri s results are reported separately from continuing operations. 2) All balance sheet items include Peab Industri. 3) All figures include Peab Industri. 4) Rolling 12-months. 4

5 PEAB OWNERSHIP STRUCTURE AT 30 SEPTEMBER 2008 Owner A shares B shares Total number of shares Proportion of capital, % Proportion of voting power, % Mats Paulsson with family and companies 5,574,234 19,237,510 24,811, Erik Paulsson with family and companies 6,975,780 11,405,028 18,380, Karl-Axel Granlund with companies 10,200,000 10,200, Fredrik Paulsson with family and companies 2,402,343 3,394,100 5,796, Stefan Paulssons estate 2,402,343 3,362,074 5,764, Swedbank Robur Fonder 3,611,433 3,611, Svante Paulsson with family and companies 983,376 1,367,760 2,351, SEB Investment Management 2,254,260 2,254, Sara Karlsson with family and companies 1,016, ,038 1,712, Lannebo fonder 1,887,400 1,887, Länsförsäkringar fonder 1,442,200 1,442, Foreign shareholders 26,212,387 26,212, Other shareholders 257,248 59,884,519 60,141, Total shares outstanding 19,611, ,954, ,566,113 Peab AB 10,035,000 10,035, Total registered shares 19,611, ,989, ,601, Board, Group management, advisors and auditors Board: Göran Grosskopf (Chairman), Karl-Axel Granlund, Mats Paulsson, Svante Paulsson, Annette Brodin Rampe, Lars Sköld, Kent Ericsson, David Karlsson, Kim Thomsen, Lars Bergman and Patrik Svensson. Group management: Mats Paulsson (CEO), Mats Leifl and, Anders Elfner, Jan Johansson, Mats Johansson and Jesper Göransson. Peab s financial advisors: Catella Corporate Finance and Swedbank Corporate Finance. Peab s legal advisors: Law fi rm Glimstedt. Auditors: Authorised public accountant Alf Svensson, KPMG AB. Machinery includes the group s resources within machinery, temporary electricity and crane business. This area is mainly concerned with rental business, but also includes sales of cranes and machinery via retail agreements. Products comprises the group s products from raw material, such as gravel and rock, to the production of asphalt and ready-mixed concrete. The business area also includes more refi ned products, such as building frames, ground paving and roof tiles. Services covers the group s services, including asphalt paving, foundation, transportation and machinery operations and services within the electricity, power and telecom area. PEAB INDUSTRI IN BRIEF By having committed employees and a local presence, Peab Industri will be the most innovative, knowledgeable and reliable provider of products and services to the construction and civil engineering market, and thereby the customer s fi rst choice. Peab Industri s business is aimed at the Nordic construction and civil engineering market and is conducted through three complementary business areas Machinery, Products and Services. Customers comprise Nordic construction and civil engineering companies, with Peab the major customer. In addition to nationwide construction companies, other customers include local and regional construction and civil engineering companies and industrial companies. The Swedish government (Swedish Road Administration and Swedish Rail Administration) is an important civil engineering customer. 5

6 Most of the group s sales are generated from the Swedish market, where Peab Industri has nationwide operations with a strong local presence. Operations are also conducted in, Norway and Finland. Peab Industri is indirectly dependent on economic developments on the Nordic construction and civil engineering market, where most of the company s customers work. A general decline in growth in this market is expected over the next few years. However, important infrastructure and civil engineering projects will increase in line with increasing government expenditure. This is a positive development for Peab Industri, which has major exposure to the civil engineering sector. RISK FACTORS Risk factors the Board believes investors should consider before making an investment decision are risks associated with the offer and creation of the new group, risks associated with the Peab share, operational risks, legal risks and fi nancial risks. Investors must also conduct a general business intelligence analysis and consider other information in the prospectus and the supplementary prospectus which will be submitted to the swedish fi nancial supervisory authority for approval and registration in conjunction with the publication of the interim report on 17 november The risk factors on pages 6 8 in the prospectus are not set out in order of priority and do not claim to be exhaustive. 6