The Independent Bid Committee of the Board of Directors of Oriflame Holding AG has recommended shareholders accept the offer from the af Jochnick family to buy all shares of the company.
On May 22, Walnut Bidco Plc, a newly established company indirectly wholly owned by members of the founding families of Robert af Jochnick and the late Jonas af Jochnick, respectively, and certain closely related parties to them, launched an offer of SEK 227 in cash per Oriflame share. Walnut Bidco controls shares representing 30.82 per cent of the capital and votes in the Company. The total value of the Offer, based on the 39,171,134 shares in Oriflame not directly or indirectly owned by Walnut Bidco or closely related parties, amounts to SEK 8,891,847,418. The Offer values the equity of Oriflame, based on all 56,622,398 outstanding shares, at SEK 12,853,284,346.
Walnut Bidco stated it would not increase the Offer price of SEK 227 per Oriflame share. Accordingly, the price in the Offer is final under the Nasdaq Stockholm Takeover Rules.
According to the statement released by the Bid Committee:
“The Committee does not consider the full intrinsic value of the Company to be reflected in the Offer, based on the Committee’s strong belief in Oriflame, the Company’s historic ability to handle challenging market conditions, the current strategy, and Oriflame’s management. On the other hand, given the development in the Company’s key underlying markets, as continuously communicated by the Company, the Committee is not confident in assuming that the current negative growth trend will turn positive in the near future and is furthermore of the opinion that it may take time for the Company to reach its long-term financial targets with regards to both sales growth and profitability.
Based on the above, the Committee has concluded, on balance, that a potential long-term upside in the share price currently does not outweigh the short-to-medium term risks for the shareholders of the Company associated with rejecting the Offer. Accordingly, and in light of a significant premium, the Committee has unanimously decided to recommend the shareholders of Oriflame to accept the Offer.”
Under the Nasdaq Stockholm Takeover Rules, the Committee is required to present its opinion of the effects the implementation of the Offer may have on Oriflame, especially employment, and its view on Walnut Bidco’s strategic plans for Oriflame and the impact these could be expected to have on employment and on the locations where Oriflame conducts its business. In the offer document, Walnut Bidco states:
“… the af Jochnick family’s plans for the future business and general strategy do not currently include any changes, and no decisions have been made with regards to Oriflame’s business model, its management or employees. Pursuant to the current view of the af Jochnick family, terms of employment will not materially change and none of Oriflame’s sites will be affected by any reorganizational measures which are directly linked to the Offer.
The af Jochnick family looks forward to continuing to work with the existing management team at Oriflame and further develop the Company under private ownership and we remain committed to our shareholding in the Company for the long-term.”
To read the full statement, click here.