National Silicon Industry Group announces a voluntary recommended Public Tender Offer for all shares and option rights in Okmetic Oyj

  
OKMETIC OYJ    STOCK EXCHANGE RELEASE   1 APRIL 2016   AT 11.45 A.M.

NOT FOR RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO OR TO ANY PERSON LOCATED OR RESIDENT IN THE UNITED STATES, CANADA, JAPAN, AUSTRALIA, SOUTH AFRICA OR HONG KONG OR IN ANY OTHER JURISDICTION IN WHICH THE TENDER OFFER OR SUCH RELEASE OR DISTRIBUTION WOULD BE PROHIBITED BY APPLICABLE LAW OR REQUIRE OFFER DOCUMENTS, REGISTRATION OR OTHER MEASURES IN ADDITION TO THOSE REQUIRED UNDER FINNISH LAW.

NATIONAL SILICON INDUSTRY GROUP ANNOUNCES A VOLUNTARY RECOMMENDED PUBLIC TENDER OFFER FOR ALL SHARES AND OPTION RIGHTS IN OKMETIC OYJ

Okmetic Oyj ("Okmetic") and National Silicon Industry Group ("NSIG") have on 1 April 2016 entered into a Combination Agreement pursuant to which NSIG, either directly or through a wholly-owned indirect subsidiary of NSIG (jointly, the "Offeror"), will make a voluntary public tender offer to purchase all of the issued and outstanding shares and option rights in Okmetic that are not owned by Okmetic or any of its subsidiaries (the "Tender Offer").

The price offered for each share validly tendered in the Tender Offer will be EUR 9.20 in cash. In addition, in the Combination Agreement it has been agreed that the Board of Directors of Okmetic will propose an aggregate dividend of EUR 0.65 per share to be declared by Okmetic's Annual General Meeting to be held on 7 April 2016. The dividend of EUR 0.65 per share will be paid to Okmetic shareholders on or about 18 April 2016 and will not reduce the price offered for the shares.

The offer price of EUR 9.20 together with the proposed dividend of EUR 0.65 per share, EUR 9.85 in the aggregate, represents a premium of approximately 29.6 percent compared to the closing price of the Okmetic shares on Nasdaq Helsinki Ltd. ("Nasdaq Helsinki") on 31 March 2016, the last trading day before the announcement of the Tender Offer; a premium of approximately 39.4 percent compared to the volume-weighted average trading price of the shares on Nasdaq Helsinki during the 3-month period preceding the date of the announcement of the Tender Offer; and a premium of approximately 38.9 percent compared to the volume-weighted average trading price during the 12-month period preceding the date of the announcement of the Tender Offer.  Based solely on the offer price of EUR 9.20 per share, the corresponding premium would be approximately 21.1 percent compared to the closing price of the Okmetic shares on Nasdaq Helsinki on the last trading day before the announcement of the Tender Offer, and approximately 30.2 percent compared to the 3-month and approximately 29.7 percent compared to the 12-month volume-weighted average trading price of the Okmetic shares on Nasdaq Helsinki preceding the date of the announcement of the Tender Offer.

The price offered for each option right granted under Okmetic's 2013 option plan for the management, validly tendered in the Tender Offer, will be EUR 4.22 in cash for each 2013 A option right and EUR 3.97 in cash for each 2013 B option right, however, in both cases increased by the amount of the dividend per share to be declared and paid pursuant to the proposal by the Board of Directors of Okmetic up to EUR 0.65.

Certain of the largest shareholders of Okmetic, Accendo Capital SICAV SIF, Ilmarinen Mutual Pension Insurance Company, Oy Ingman Finance Ab, Mandatum Life Insurance Company Limited and Kaleva Mutual Insurance Company, as well as the members of the Board of Directors and the Executive Management Group of Okmetic, representing jointly approximately 29.9 percent of the outstanding shares and votes in Okmetic as well as 92.9 percent of the outstanding option rights, have, subject to certain customary conditions, irrevocably undertaken to accept the Tender Offer.

The Board of Directors of Okmetic has unanimously decided to recommend the shareholders and holders of option rights to accept the Tender Offer. The Board of Directors will issue its complete statement on the Tender Offer in accordance with the Finnish Securities Market Act before the publication of the tender offer document.

In order to support its assessment of the Tender Offer, the Board of Directors of Okmetic has requested from Okmetic's financial advisor, UBS Limited, a fairness opinion regarding the Tender Offer.

BACKGROUND AND REASONS FOR THE TENDER OFFER

NSIG is an industry holding company in the People's Republic of China (the "PRC" or "China") focusing on investment and development of semiconductor equipment and materials. NSIG is owned by five shareholders: National Integrated Circuit Industry Investment Fund Co., Ltd., Shanghai Guosheng (Group) Limited, Shanghai SummitView Integrated Circuit Equity Investment Partnership, Shanghai SIMIC Co., Ltd. and Shanghai Jiading Industrial Development Zone (Group) Co., Ltd. NSIG's target is to establish a major industrial player in the global semiconductor sector (especially silicon and its ecosystems) through both the PRC domestic investments and outbound mergers and acquisitions.

Okmetic specializes in product development, production and trade of materials in the electronics industry both in Finland and abroad as well as consulting, service and design activities relating to the above operations and materials used in the field of business. Okmetic is one of the leading specialty silicon wafers producers and suppliers globally. The tailored, high value-added silicon wafers of Okmetic are used in the manufacture of sensors as well as discrete semiconductors and analog circuits. Okmetic's strategic objective is profitable growth driven by a product portfolio designed to meet customers' current and future technology needs.

Okmetic is headquartered in Vantaa, Finland. Currently, Okmetic has a manufacturing plant in Vantaa and contract manufacturers in China and Japan. As announced on 1 April 2016, Okmetic has on 31 March 2016 sold its plant located in Allen, the United States, that focused on epitaxial deposition of silicon wafers.

It is NSIG's intention to strongly support Okmetic's growth and the future of the Vantaa plant. NSIG also aims to retain the existing management team and employees of Okmetic on their current employment terms in order to ensure that Okmetic will continue on its current development path also post-Tender Offer.

NSIG believes that the acquisition will further strengthen Okmetic's worldwide distribution platform, especially in the rapidly growing Chinese semiconductor market. Okmetic's unique technological capabilities combined with NSIG's local market knowledge and access to funding, will significantly accelerate Okmetic's development. In addition, NSIG believes that the proven expertise and experience of Okmetic's management and the company's excellent financial performance in a tough industry will continue to be major growth drivers and success factors of the company.

"We are delighted about the opportunity to invest in Okmetic, a Finnish specialty silicon wafer manufacturer", commented Dr. Xi Wang, the Chairman of the Board of Directors of NSIG.

Dr. Wang continues: "Okmetic is a great company supplying high value added silicon wafers for the manufacture of sensors, discrete semiconductors and analog circuits. Okmetic has a tradition of continuous technological innovation to serve its customer needs. NSIG intends to support Okmetic by further investing in its R&D and technology improvements in Finland, developing the business globally, and strengthening Okmetic's position in the Chinese market. We look forward to welcoming the Okmetic management and staff into the NSIG family with the firm intention of building on Okmetic's strong track record of achievement as an industry leader."

"Okmetic has undergone a successful transformation over the last few years and has been able to deliver outstanding total shareholder returns during times of high price pressure in the industry. Having carefully assessed the terms and conditions of the Tender Offer, the Board of Directors of Okmetic has concluded that entering into the Combination Agreement is in the interest of the shareholders and holders of option rights of Okmetic. Our assessment is that the Tender Offer is favorable to our shareholders and holders of option rights compared to continuing Okmetic as a standalone company or, alternatively, compared to other strategic alternatives that may be available," says Jan Lång, Chairman of the Board of Okmetic.

"We are confident that NSIG's position in the semiconductor industry will provide Okmetic with strengthened resources for growth and, thus, support Okmetic's role as one of the key players within the silicon wafer industry. Okmetic has exceptional knowhow and high-class technical expertise, which will continue to carry Okmetic's future development," Lång concludes.

THE TENDER OFFER IN BRIEF

The price offered for each share validly tendered in the Tender Offer is EUR 9.20 in cash. The dividend of EUR 0.65 per Okmetic share to be proposed by the Board of Directors of Okmetic to Okmetic's Annual General Meeting of 7 April 2016 and paid prior to the closing of the Tender Offer shall not reduce the above offer price.

The price offered for each option right granted under Okmetic's 2013 option plan for the management, validly tendered in the Tender Offer, will be EUR 4.22 in cash for each 2013 A option right and EUR 3.97 in cash for each 2013 B option right, however, in both cases increased by the amount of the dividend per share to be declared and paid pursuant to the proposal by the Board of Directors of Okmetic up to EUR 0.65.

The acceptance period under the Tender Offer is expected to commence by 22 April 2016 and to run for five (5) to six (6) weeks. The Offeror reserves the right to extend the offer period from time to time in accordance with the terms and conditions of the Tender Offer.

The completion of the Tender Offer will be subject to the satisfaction or waiver by the Offeror of the following conditions:

1) the valid tender of outstanding shares representing (together with any outstanding shares that may be held by the Offeror or the parties referred to in chapter 18, section 1.2 of the Finnish Limited Liability Companies Act) at least ninety (90) percent of the issued and outstanding shares and votes of Okmetic (excluding for the avoidance of doubt the shares held by the company or its subsidiaries), fully diluted for the outstanding option rights (except for the option rights validly tendered or held by the Offeror or the parties referred to in chapter 18, section 1.2 of the Finnish Limited Liability Companies Act);

2) no Material Adverse Change (as defined in the Combination Agreement) in Okmetic having occurred after 1 April 2016 and still existing on the date when the other conditions to completion of the Tender Offer have been satisfied;

3) the Combination Agreement not having been terminated in accordance with its terms; and

4) the Board of Directors of Okmetic having issued a recommendation to the shareholders and holders of the option rights to accept the Tender Offer and such recommendation not having been withdrawn or changed in a manner detrimental to the Offeror.

The Offeror has concluded that the completion of the Tender Offer does not require regulatory approvals from any competition authorities. As soon as possible after this announcement of the Tender Offer the Offeror will make procedural filings with the PRC National Development and Reform Commission or its local branch, the PRC Ministry of Commerce or its local branch and the State Administration of Foreign Exchange. However, the completion of the Tender Offer is not conditional upon receipt of any regulatory approvals.

The Offeror has secured financing for the Tender Offer through cash on NSIG's balance sheet and committed unconditional equity funding by its shareholder. The completion of the Tender Offer is not conditional upon financing.

The detailed terms and conditions of the Tender Offer and information on how to accept the Tender Offer will be included in the tender offer document expected to be published by the Offeror by 22 April 2016.

The Offeror and Okmetic have undertaken to follow the Helsinki Takeover Code issued by the Securities Market Association as referred to in the Finnish Securities Market Act.

On the date of this stock exchange release, Okmetic's share capital amounts to EUR 11,821,250.00 and the number of shares issued to 17,287,500. NSIG does not hold any shares or option rights in Okmetic at the time of this stock exchange release.

COMBINATION AGREEMENT

The Combination Agreement between Okmetic and NSIG sets forth the principal terms under which the Offeror will make the Tender Offer.

Okmetic has in the Combination Agreement agreed to a customary non-solicitation clause whereby Okmetic has undertaken not to solicit or knowingly encourage any competing tender offers for Okmetic's outstanding shares and option rights or proposals for such offers or acquisition of all or substantially all of Okmetic's assets or other corporate transactions having substantially the same effect, nor to facilitate or promote any such proposals, unless the Board of Directors determines that such actions are necessary to comply with its fiduciary duties towards Okmetic, the shareholders and the holders of option rights under applicable law and the Helsinki Takeover Code. Okmetic has agreed to inform the Offeror of any competing proposals and to provide the Offeror with an opportunity to negotiate with the Board of Directors of Okmetic of matters arising from such competing proposals.

Pursuant to the Combination Agreement, the Board of Directors of Okmetic has undertaken to issue a formal recommendation to the shareholders and holders of option rights of Okmetic to accept the Tender Offer. The Board of Directors of Okmetic may cancel or change its recommendation if the Board of Directors determines in good faith, after taking advice from its external legal counsel and financial advisor, that failure to do so would be inconsistent with the fiduciary duties of the Board of Directors. In the event of a possible competing offer or competing proposal, the Board of Directors may cancel or change its recommendation for the Tender Offer only if the Board of Directors determines in good faith, after taking advice from its external legal counsel and financial advisor, that the competing offer or competing proposal, judged as a whole, is superior to the Tender Offer and that therefore (i) it would no longer be in the best interest of the shareholders and holders of the option rights to accept the Tender Offer, and (ii) that failure to cancel or change the recommendation would be inconsistent with the Board of Directors' fiduciary duties. The Board of Directors may cancel or change its recommendation for the Tender Offer in accordance with the above only if prior to and as a precondition for such cancelling or change, the Board of Directors has complied with certain agreed procedures allowing the Offeror to assess the competing offer and to enhance the Tender Offer. Should the Offeror enhance the Tender Offer so as to be at least equally favorable to the shareholders and holders of the option rights as the competing offer or competing proposal, the Board of Directors has undertaken to confirm and uphold the recommendation for the Tender Offer, as enhanced.

The Combination Agreement further includes certain representations, warranties and undertakings by both parties, such as conduct of business by Okmetic in the ordinary course of business before the completion of the Tender Offer, and cooperation by the parties in completing the Tender Offer in the most expeditious manner practicable.

The Combination Agreement may be terminated (i) by mutual consent of both parties, (ii) by either Okmetic or the Offeror upon a material breach by the other party of its undertakings, obligations or warranties set forth in the Combination Agreement not remedied to the reasonable satisfaction of the non-breaching party within a certain agreed period, (iii) by the Offeror after the occurrence of a Material Adverse Change (as defined in the Combination Agreement) in Okmetic, provided that such Material Adverse Change is still existing on the date when the other conditions to the completion of the Tender Offer have been satisfied, (iv) by the Offeror if the Board of Directors of Okmetic has cancelled or changed its recommendation in a manner detrimental to the Offeror and by Okmetic if the Board of Directors has cancelled or changed its recommendation in accordance with the provisions of the Combination Agreement, (v) by either Okmetic or the Offeror if the Tender Offer has not been consummated on or by 30 June 2016, or (vi) by either Okmetic or the Offeror if a court or any governmental authority renders a final and non-appealable resolution or judgment which prohibits the completion of the Tender Offer.

The Offeror may transfer all its rights and obligations under the Combination Agreement to its wholly owned direct or indirect subsidiary, to be used as an acquisition vehicle in the Tender Offer, provided that the Offeror upon such transfer shall automatically be deemed to guarantee, as for its own debt, the due and punctual performance of all of the obligations of such subsidiary in relation to the Tender Offer (including the payment of any offer consideration and other specific performance of the Tender Offer) and remain liable for any of its and such transferee's obligations and liabilities under the Combination Agreement.

The Offeror's intention is to acquire all the shares and option rights in Okmetic. Should such amount of shares be tendered in the Tender Offer that the Offeror obtains more than 90 percent of all shares and voting rights in Okmetic, the Offeror intends to initiate the compulsory redemption proceedings in accordance with the Finnish Limited Liability Companies Act for the remaining shares in Okmetic and thereafter cause Okmetic to apply for its shares to be delisted from Nasdaq Helsinki as soon as permitted and practicable under applicable laws and regulations.

ADVISORS

UBS Investment Bank acts as the financial advisor to Okmetic in connection with the Tender Offer and Hannes Snellman Attorneys Ltd. as the Finnish legal advisor and Cleary Gottlieb Steen & Hamilton LLP as the U.S. legal advisor to Okmetic in connection with the Tender Offer.

Moelis & Company acts as the financial advisor to the Offeror. Roschier, Attorneys Ltd. acts as Finnish legal advisor, Skadden, Arps, Slate, Meagher & Flom LLP as U.S. legal advisor and Grandall Law Firm (Shanghai) as Chinese legal advisor to the Offeror in connection with the Tender Offer. Nordea Bank Finland Plc acts as the arranger of the Tender Offer.

OKMETIC OYJ

Board of Directors

FURTHER INFORMATION

For further information, please contact:

Okmetic

Chairman of the Board Jan Lång
Phone: +358 50 5087223, e-mail: janove.lang@outlook.com

President Kai Seikku
Phone: +358 9 5028 0232, e-mail: kai.seikku@okmetic.com

NSIG

Managing Director Leo Ren
phone: +86-13708986765, e-mail: leoren@sh-nsig.com

INFORMATION REGARDING OKMETIC OYJ

Established in 1985, Okmetic is one of the leading specialty silicon wafers producers and suppliers globally with a production plant in Vantaa, Finland, and contract manufacturers in China and Japan. The Company has a diverse network of agents, serving customers in China, South Korea, Malaysia, Singapore, Taiwan and the United States. The tailored, high value-added silicon wafers of Okmetic are used in the manufacture of sensors as well as discrete semiconductors and analog circuits. Okmetic is listed on the official list of Nasdaq Helsinki (trading code HLSE:OKM1V).

Okmetic's head office is located in Vantaa. For more information visit www.okmetic.com.

INFORMATION REGARDING NSIG

NSIG is a limited liability company organized under the PRC laws. The registered office of NSIG is in Shanghai, China.

Established in 2015, National Silicon Industry Group is a China-based holding group that is engaged in the investment and development of semiconductor materials and equipment industry with a registered capital of RMB 2 billion (approximately EUR 272 million). NSIG's mission is to establish a major industrial player in the global semiconductor sector (especially silicon and its ecosystems) through both PRC domestic investments and outbound mergers and acquisitions.

PRESS CONFERENCE

A press conference for media, analysts and investors takes place today, Friday, 1 April 2016, at 1:30 p.m. The event will take place at Bank Meeting Point, address Unioninkatu 20, Helsinki. The press conference will be held in English. The webcast can be viewed live online. Link can be found here: www.okmetic.com/investors.

DISCLAIMER 

THIS RELEASE IS FOR GENERAL INFORMATION ONLY AND DOES NOT CONSTITUTE OR FORM PART OF ANY OFFER TO PURCHASE, OR ANY SOLICITATION OF AN OFFER TO SELL OR ANY INVITATION TO PARTICIPATE. INVESTORS MAY ACCEPT THE TENDER OFFER FOR THE SHARES AND OPTION RIGHTS ONLY ON THE BASIS OF THE INFORMATION PROVIDED IN A TENDER OFFER DOCUMENT WHEN AVAILABLE.

THE TENDER OFFER FOR THE SHARES AND OPTION RIGHTS IS NOT BEING AND WILL NOT BE MADE DIRECTLY OR INDIRECTLY IN ANY JURISDICTION WHERE EITHER THE MAKING OF SUCH AN OFFER OR PARTICIPATION THEREIN IS PROHIBITED BY APPLICABLE LAW OR WHICH WOULD REQUIRE FURTHER OFFER DOCUMENTS, REGISTRATION OR OTHER MEASURES IN ADDITION TO THOSE REQUIRED UNDER FINNISH LAW.

ACCORDINGLY, WHEN PUBLISHED, THE TENDER OFFER DOCUMENT AND RELATED ACCEPTANCE FORMS WILL NOT AND MAY NOT BE DISTRIBUTED, FORWARDED OR TRANSMITTED INTO OR FROM ANY JURISDICTION WHERE PROHIBITED BY APPLICABLE LAW OR WHICH WOULD REQUIRE FURTHER OFFER DOCUMENTS, REGISTRATION OR OTHER MEASURES IN ADDITION TO THOSE REQUIRED UNDER FINNISH LAW. IN PARTICULAR, THE TENDER OFFER FOR THE SHARES AND OPTION RIGHTS IS NOT BEING AND WILL NOT BE MADE, DIRECTLY OR INDIRECTLY, IN OR INTO, OR BY USE OF THE POSTAL SERVICE OF, OR BY ANY MEANS OR INSTRUMENTALITY (INCLUDING, WITHOUT LIMITATION, FACSIMILE TRANSMISSION, TELEX, TELEPHONE, E-,MAIL OR OTHER FORMS OF ELECTRONIC COMMUNICATION) OF INTERSTATE OR FOREIGN COMMERCE OF, OR ANY FACILITIES OF A NATIONAL SECURITIES EXCHANGE OF, THE UNITED STATES, CANADA, JAPAN, AUSTRALIA, SOUTH AFRICA OR HONG KONG, AND MAY NOT BE ACCEPTED BY ANY SUCH USE, MEANS, INSTRUMENTALITY OR FACILITY FROM OR WITHIN THE UNITED STATES, CANADA, JAPAN, AUSTRALIA, SOUTH AFRICA OR HONG KONG OR BY PERSONS LOCATED OR RESIDENT THEREIN, OR PERSONS (INCLUDING AGENTS, FIDUCIARIES OR OTHER INTERMEDIARIES) ACTING FOR THE ACCOUNT OR BENEFIT OF PERSONS LOCATED OR RESIDENT THEREIN. ANY PURPORTED ACCEPTANCE OF THE TENDER OFFER FOR THE SHARES AND OPTION RIGHTS RESULTING DIRECTLY OR INDIRECTLY FROM A VIOLATION OF THESE RESTRICTIONS WILL BE INVALID.

THE COMMUNICATION OF THIS ANNOUNCEMENT, THE TENDER OFFER DOCUMENT WHEN AVAILABLE AND ANY OTHER DOCUMENTS OR MATERIALS RELATING TO THE TENDER OFFER IS NOT BEING MADE AND SUCH DOCUMENTS AND/OR MATERIALS HAVE NOT BEEN APPROVED BY AN AUTHORISED PERSON FOR THE PURPOSES OF SECTION 21 OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 OF THE UNITED KINGDOM. ACCORDINGLY, SUCH DOCUMENTS AND/OR MATERIALS ARE NOT BEING DISTRIBUTED TO, AND MUST NOT BE PASSED ON TO, THE GENERAL PUBLIC IN THE UNITED KINGDOM. THE COMMUNICATION OF SUCH DOCUMENTS AND/OR MATERIALS AS A FINANCIAL PROMOTION IS ONLY BEING MADE TO THOSE PERSONS IN THE UNITED KINGDOM FALLING WITHIN THE DEFINITION OF INVESTMENT PROFESSIONALS (AS DEFINED IN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE "FINANCIAL PROMOTION ORDER")) OR PERSONS WHO ARE WITHIN ARTICLE 43 OF THE FINANCIAL PROMOTION ORDER OR ANY OTHER PERSONS TO WHOM IT MAY OTHERWISE LAWFULLY BE MADE UNDER THE FINANCIAL PROMOTION ORDER.

UBS Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority in the United Kingdom. UBS Limited is acting as financial adviser to Okmetic and no one else in connection with the Tender Offer and will not be responsible to anyone other than Okmetic for providing the protections offered to clients of UBS Limited nor for providing advice in connection with the Tender Offer.