© kritchanut Business | May 30, 2018

Grammer signs agreement with strategic partner Ningbo Jifeng

Grammer AG concluded a comprehensive Business Combination Agreement with affiliated companies of Ningbo Jifeng Auto Parts Co. Ltd (Ningbo Jifeng), which is majority-owned and controlled by the Wang family.
As part of this agreement on intensified cooperation, the bidder (Jiye Auto Parts GmbH, a German entity also controlled by the Wang family) will launch a voluntary public takeover offer for all outstanding shares of Grammer AG. Accordingly, a cash consideration of 60.00 Euro per Grammer share will be offered to all Grammer shareholders. On top, Grammer shareholders will receive the expected dividend of 1.25 Euro per share for the fiscal year 2017, resulting in a total consideration of 61.25 Euro per share.

The main objectives are to deepen the strategic partnership between Grammer AG and Ningbo Jifeng, which has existed since 2017, to further stabilize the shareholder structure by expanding the Ningbo Jifeng group’s existing stake in Grammer AG, and to optimize the global footprint and secure the global growth strategy, a press release states

According to the agreement, the company's headquarters and its national and international locations shall be maintained and extensive commitments shall be made to all employees of the Grammer Group. The individual undertakings of the agreement have a term of up to 7.5 years and offer a corresponding security for customers, employees and suppliers.

In addition, the bidder undertakes not to take any structural measures in the future, such as spin-off, domination agreement, delisting, squeeze-out or similar measures, unless the Executive Board and the Supervisory Board support such measure. The Business Combination Agreement also provides extensive protection for Grammer's trademark, patents and other proprietary rights. In connection with the takeover offer, the bidder also aims at appointing two members to the Supervisory Board of Grammer AG in the medium term.

The bidder attaches great importance to the fact that the existing management remains with the company. The use of Grammer's technologies and know-how by the bidder to the detriment of Grammer is clearly excluded in the Business Combination Agreement, the statement continues.

Voluntary public takeover offer

The bidder has announced a voluntary public takeover offer for Grammer AG. In this regard, the bidder will offer all shareholders of Grammer a cash consideration of 60.00 Euro per share in addition to the expected dividend of 1. 25 Euro per share. Compared to the last XETRA closing price on 28 May 2018 (a day prior to today's announcement of the takeover offer), the total consideration of 61.25 Euro per share represents a premium of 19.4%. Compared to the average price targets of the analysts on 28 May 2018, this results in a premium of 11.7%.

The completion of the public takeover offer is subject to regulatory approvals, a minimum acceptance rate of 50% plus one share, including the current shareholding of approx. 25%, which is held by a Ningbo Jifeng affiliate, and other customary offer conditions.
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December 13 2018 1:08 pm V11.10.14-1