1. Assessment of effects of the potential completion
of takeover on the pursuit of all Target Company's interests
The Acquiring Party declares in the takeover bid that the "takeover
of the Target Company as per this takeover bid shall be mutually beneficial for
all interested stakeholders." They add that "Hisense Group's
total operating volume, its advantages in global procurement, and technological
leadership in smart and digital white goods complement Gorenje Group's
technology in the categories of dishwashers, kitchen appliances, washing
machines, refrigerators, and Gorenje Group's strong production capacity in
Europe. Distribution channels of both
companies in Europe are strongly complementary and can contribute to even
greater consolidation of the both the Hisense brand and Gorenje Group brands,
to increase of operating volume in the Gorenje Group, and Gorenje Group's
efficiency and profitability, while also contributing to expansion of Hisense
Group's operations, and development of its brands and returns."
The Management Board finds that the goals specified by the Acquiring
Party in its takeover bid are beneficial for Gorenje Group's future operations
and allow its further development and growth in a fiercely competitive white
goods industry.
The Acquiring Party furthermore specifies four key areas in which
major synergistic effects can be reaped after the takeover: (i) improvement in
the efficiency and utilization of resources through connecting and shared use
of production capacity and procurement; (ii) integration of global distribution
channels and resources to establish complementary geographical coverage and
brands; (iii) integration of research and development resources for
complementary product development; and (iv) sharing of global marketing and
promotional activities to strengthen Gorenje's brands.
The Management Board finds that the presented areas of synergistic
effects are aligned with the expectations and the goals laid down by the
company in the process of searching for a strategic partner, and reaping
thereof will contribute positively to the improvement in Gorenje Group's
international competitiveness, its business performance, and its financial
stability.
The Management Board finds it particularly important that the
Hisense Group intends to retain and further develop all Gorenje brands after
the takeover. Moreover, it wishes to expand these brands by using integrated
marketing activities for brand development and by considerable investment into
extensive sports sponsorships and global marketing activities aimed at
strengthening of the brands.
The Acquiring Party
specifies that "it is not planning any restructuring, merging of
business functions or changes of location or seat of the Target Company's
operations," which the Management Board finds positive. At the same
time, the Acquiring Party ensures that "the Target Company shall become
a Hisense Group's development and production centre for the entire Europe. Competitive
differentiated smart home appliances will be produced by integrating the
technology, product range, and business activities of both corporate groups and
through exchange of development and research capacities, production capacities,
expert and managerial know-how, and distribution networks." In
Management Board's opinion, such decision on the part of the Acquiring Party is
an important starting point for ensuring Gorenje Group's future development and
growth of the scope of its operations, as well as for ensuring the stability
and increase in the number of productive jobs at the Gorenje Group, to which
the Acquiring Party has also committed, as it declares in the prospectus that "the
takeover bid shall not affect the existing jobs of the Target Company's workers
and management."
Based on the
Acquiring Party's statements in the takeover bid and the prospectus, the
Management Board finds that a successful completion of the takeover represents
solid foundations for ensuring stable and long-term growth, development, and
successful operations of the Gorenje Group.
2. Disclosure of any agreement between the Acquiring
Party and the Target Company Management Board regarding the takeover bid
In November
2017, the Management Board started examining the opportunities for strategic
partnerships. In this competitive procedure, several potential partners,
including the Hisense Group, of which the Acquiring Party is a part, signed
with the Target Company a Confidentiality Agreement, and submitted their
respective non-binding offers on March 7, 2018. Based on an assessment of the
non-binding offers, the Target Company's Management Board invited three
strategically suitable potential partners to take part in the continuation of
the procedure, and allowed them to conduct a due diligence review at the Target
Company. All three invited strategic partners conducted due diligence between
March 23 and May 7, 2018. Based on the completed due diligence, the Target
Company received on May 8, 2018, three binding offers. The Target Company
Management Board found all three bidders and their respective binding offers
suitable from a strategic aspect. In its binding offer, which it further
improved on May 9, 2018, the Hisense Group, of which the Acquiring Party is a
part, offered the highest price per share, and on May 9, 2018, it was selected
as the best bidder.
The Target
Company then accepted on May 9, 2018, to the benefit of all shareholder, the
Acquiring Party's commitments from their Commitment Letter by which the
Acquiring Party committed on May 9, 2018, to announce, in compliance with the
Slovenian law, a takeover bid and offer all Target Company shareholders to
acquire their shares that the Acquiring Party does not yet hold, at a price
that is no lower than EUR 12 per share. Such Acquiring Party's commitment was
conditional on the approval by the Securities Market Agency (ATVP) for the
announcement of a takeover bid, and the purchase of shares was conditional on
the acceptance of the offer, so that the Acquiring Party acquire no less than
50 percent of all shares plus 1 (one) share. The Acquiring Party's commitments
from the Commitment Letter shall be valid until no later than September 30,
2018.
3. Disclosure of the contents of any agreement between
the Acquiring Party and the Target Company Management Board regarding the
method of assertion of voting rights based on securities already held by the
acquiring party
There is no
agreement between the Acquiring Party and the Target Company Management Board
regarding the method of assertion of voting rights based on securities already
held by the acquiring party.
4. Management Board members at the Target Company as
natural persons are holders of the Target Company's shares, as follows:
· Franc Bobinac holds 4,096 company shares,
· Žiga Debeljak holds 9,044 company shares,
· Peter Kukovica does not hold any company
shares,
· Branko Apat holds 626 company shares,
· Drago Bahun holds 9,082 company shares.
Target Company Management
Board members intend to accept the takeover bid.
5. Information on the Target Company's most recent
audited Annual Report
The most recent
audited Annual Report of the Target Company, pertaining to the business year
2017, was adopted by the Company Supervisory Board on March 8, 2018, at their
43rd session, and it is available at the Target Company's website at (http://www.gorenjegroup.com). The most
recent audited book value of the Target Company's share as at December 31,
2017, amounts to EUR 15.13.
The Target
Company Management Board submitted its Target Company Management Board's
Opinion, along with the relevant announcement, to the representatives of the
Target Company's workers. The opinion of Gorenje Workes Council and SKEI Gorenje trade union is attached below.