Offer Document and notification of Compulsory Acquisition

Transkript

1 Offer Document and notification of Compulsory Acquisition Mandatory Offer to acquire all outstanding shares in Fesil ASA which are not already owned by Fesil Holding AS Offer price: NOK per share in cash Offer Period for the Mandatory Offer: From and including 10 April 2007 to and including 8 May :30 CET Compulsory Acquisition (in accordance with section 4-25 of the Norwegian Public Limited Companies Act): Objection Deadline is set to 10 June 2007 Managed by: 10 April 2007

2 IMPORTANT NOTICE This Offer Document has been prepared by Fesil Holding AS, a company owned by Plavaldue AG, Hafslund Venture AS and Fokus Bank ASA in order to document the terms of its mandatory offer for the shares in Fesil ASA ( Fesil ) not already owned by Fesil Holding AS pursuant to the requirements of the Norwegian Securities Trading Act (the Offer ). Shareholders in Fesil must rely upon their own examination of this Offer Document and should thus study it carefully so that a balanced judgement can be made of the Offer and the information that is discussed and described herein. When considering what actions to take, shareholders in Fesil are urged to seek the advice of financial and legal advisors. The issue and distribution of this Offer Document does not imply that the information included herein will continue to be correct and complete at any date subsequent to the date hereof. With the exception of Fesil Holding AS and persons authorised by Fesil Holding AS, no person or entity is authorised to provide any information or make any representations in connection with the Offer. If such information or representation is provided or made by any other subject than Fesil Holding or persons authorised by Fesil Holding, such information or representation should not be relied upon as having been provided or made by or on behalf of Fesil Holding. This Offer Document will be distributed to the shareholders registered in Fesil s shareholder registry on 4 April 2007 and will also be available, free of charge at the office of Danske Markets Corporate Finance at the below address: Danske Markets Corporate Finance Stortingsgaten 6 P.O. Box 1170 Sentrum 0107 Oslo Norway Telephone: Telefax: Financial advisor Danske Markets Corporate Finance, Oslo branch is acting as financial advisor to Fesil Holding in connection with the Offer. Danske Markets Corporate Finance is acting for no one else in their respect and will not be responsible to any subject other than Fesil Holding for providing (i) the protection normally granted their customers or (ii) advice in relation to the Offer. No fairness opinion has been prepared in connection with the Offer. 2

3 Restrictions General The distribution of this document or any separate summary documentation regarding the Offer may, in certain jurisdictions (including, but not limited to, Canada, Australia and Japan), be restricted by law. Therefore, persons obtaining this document or into whose possession this document otherwise comes, are required to inform themselves of and observe all such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of such jurisdictions. Fesil Holding AS and Danske Markets Corporate Finance do not accept or assume any responsibility or liability for any violation by any person whomsoever of any such restriction. This document is not directed to persons whose acceptance of the Offer requires that (i) further documents are issued in order for the Offer to comply with local law or (ii) registration or other measures are taken pursuant to local law. No document or material relating to the Offer may be distributed in or into any country where such distribution or offering requires any of the aforementioned measures to be taken or would be in conflict with any law or regulation of such country. In the event such distribution or offering nevertheless is made, an acceptance form sent from such a country may be disregarded as non-binding by Fesil Holding AS. This document does not represent an offer to acquire or obtain securities other than the shares in Fesil that are subject to the Offer. The Offer and this document are governed by Norwegian law. United States of America The Mandatory Offer may be made to certain U.S. persons (as defined in Regulation S under the U.S. Securities Act of 1933, as amended) in reliance on an exemption from certain of the U.S. rules governing tender offers provided by Rule 14-1(c) under the U.S. Securities Exchange Act of 1934, as amended (the U.S. Exchange Act ). The Mandatory Offer is subject to disclosure requirements of a foreign country that are different from those of the United States. Financial statements included in the document, if any, have been prepared in accordance with foreign accounting standards that may not be comparable to the financial statements of United States companies. It may be difficult for U.S. shareholders to enforce their rights and any claim that they may have arising under the U.S. federal securities law, since the Offeror is not resident in the United States. U.S. shareholders may not be able to sue a Norwegian company or its officers or directors in a foreign court for violations of the U.S. securities laws. It may be difficult to compel a non-u.s. Offeror to subject to a U.S. court s judgement. 3

4 Table of contents 1 Responsibility statements Definitions and glossary terms Background for the Offer and Compulsory Acquisition The Offer and compulsory Acquisition Short presentation of Fesil Holding Short presentation of Fesil Tax Consequences Norsk Sammendrag ( Norwegian Summary ) Appendix 1: Acceptance Form Appendix 2: Akseptformular Appendix 3: Bank guarantee form

5 1 Responsibility statements 1.1 Fesil Holding AS This Offer Document has been prepared by Fesil Holding AS in order to provide the shareholders of Fesil ASA with a basis for assessing the Mandatory Offer set out herein and to serve as notification of the compulsory acquisition of the remaining shares in Fesil ASA under section 4-25 of the Public Limited Companies Act. The information regarding Fesil ASA has been prepared on the basis of publicly available information and information made available by Fesil ASA. Fesil Holding AS has not verified independently the information regarding Fesil ASA which is included in this Offer Document. Fesil Holding AS cannot assume any responsibility for the correctness or accuracy of the information included in this Offer Document regarding Fesil ASA. As of 10 April 2007, Fesil Holding AS owns 8,289,505 shares approximately per cent in Fesil ASA as of the same date. Oslo, 10 April 2007 Fesil Holding AS 1.2 Financial advisor to Fesil Holding AS Danske Markets Corporate Finance, Oslo branch (part of Danske Bank A/S) has prepared this Offer Document in collaboration with Fesil Holding AS. The information on Fesil ASA contained herein is based on publicly available information. The information regarding Fesil Holding AS contained herein, is based on publicly available information and information received from Fesil Holding AS. Danske Markets Corporate Finance cannot guarantee that the contents of the Offer Document are complete, and can therefore not assume any legal or financial responsibility for the Offer Document or the Mandatory Offer. As of 10 April 2007, Danske Markets Corporate Finance owns no shares in Fesil Holding AS or Fesil ASA. Danske Markets is part of Danske Bank A/S, which also owns Fokus Bank ASA. As of 10 April 2007 Fokus Bank ASA owns 169,262 shares in Fesil Holding AS and no shares in Fesil ASA. Employees of Danske Markets Corporate Finance own no shares in Fesil Holding AS or Fesil ASA as of the same date. Oslo, 10 April 2007 Danske Markets Corporate Finance 5

6 1.3 Legal advisor Advokatfirmaet Fasting & Comrades AS has acted as Norwegian advisor to Fesil Holding AS in connection with the Offer described in this document. The terms of the Offer as set out in this Offer Document comply, in our opinion, with the relevant regulations as well as all formal requirements applicable to mandatory offers pursuant to the Norwegian Securities Trading Act chapter 4. We have also reviewed Section 7 of this document describing the tax consequences of the offer made by Fesil Holding AS. Based upon the information presented to us, the content thereof is, in our opinion, correctly reflecting current Norwegian law. Our opinion is strictly limited to matters governed by Norwegian law. We express no opinion in relation to the description of commercial, financial or accounting issues in this document. Oslo, 10 April 2007 Advokatfirmaet Fasting & Comrades AS 6

7 2 Definitions and glossary terms In this Offer Document, the below definitions have the following meaning, unless otherwise expressed. These definitions also apply to the pages preceding this section. Acceptance The acceptance of the Offer by a Fesil shareholder. Acceptance Form The form to be used by Fesil shareholders when accepting the Offer, such form is enclosed hereto as Appendix 1. Acceptant A Fesil shareholder who accepts the Offer CET Central European Time. Compulsory Fesil Holding s acquisition for cash, pursuant to Section 4-25 of Acquisition the Public Limited Companies Act, of any shares in Fesil not already owned by Fesil Holding. Danske Markets Danske Markets Corporate Finance, Oslo branch (part of Danske Bank A/S) EEA The European Economic Area. Expiry Date The last day of the Offer Period. EU The European Union. Fesil Fesil ASA. Fesil Holding Fesil Holding AS. Fesil Shareholders Such persons and entities other than Fesil Holding as are registered in the shareholder register of Fesil in the VPS as of 4 April NOK Norwegian Kroner, the lawful currency of Norway. Objection Deadline 10 June 2007, which is the deadline for rejections of or objections against the Redemption Amount offered by Fesil Holding in connection with the Compulsory Acquisition. Offer or Mandatory The mandatory offer made by Fesil Holding to purchase all the Offer shares in Fesil not already owned by Fesil Holding. Offer Document This document, dated 10 April Offer Price NOK per Share payable in cash. Offeror Fesil Holding AS. Oslo Stock Exchange Oslo Børs ASA. Redemption Amount NOK per share in Fesil, which is the redemption amount offered by Fesil Holding as consideration for the shares acquired by Fesil Holding in the Compulsory Acquisition. RISK-method The RISK-method was the Norwegian method for avoiding double taxation of a company s profits and a shareholder s gain on the shares, effective until and including the 2005 income year. Share A share issued by Fesil having par value of NOK and carrying one vote in Fesil s general meeting. Settlement Date The date on which the cash consideration for the Fesil Shares is being transferred to each Acceptant s bank account, being at the latest 14 days after the last day of the Offer Period. VPS The Norwegian Central Securities Depository ( Verdipapirsentralen ). 7

8 3 Background for the Offer and Compulsory Acquisition 3.1 Introduction Gurta AG, Hafslund Venture AS and Fokus Bank ASA until 20 March 2007 together controlled a shareholding in Fesil of about 94.57% when adjusting for Fesil shares owned by Fesil itself. The liquidity in the Fesil share has accordingly been almost nil, whereby only 24,117 shares were traded during 2006, corresponding to 0.27 per cent of the outstanding shares. The lack of liquidity in the Fesil share effectively prevents the listing from representing a viable vehicle for securing new equity from the capital markets. The metallurgical industry has during the past several years been affected by increases on important raw materials and transportation. The market price for Fesil s main products, ferrosilicon and silicon metal, have increased during the last several months after a very difficult Despite these price improvements the Lilleby furnaces have not been in operation since 2004, while today three of the four Holla Metall furnaces are in operation and only one of the two furnaces at Rana Metall is in operation. Fesil s power position was significantly changed in 2005, mainly because a long-term attractive power contract at Rana Metall expired. The energy intensive industry has consistently urged the Norwegian politicians to establish a long-term national energy policy. So far, the response has been negative. The challenging market climate in which Fesil operates has made it imperative to constantly look for ways in which to improve Fesil s operations, and several initiatives have already been taken. Fesil s total interest bearing debt of NOK 639 million as of 30 September 2006 puts significant limitations on the company to exploit new investment opportunities that Fesil has identified. This includes possible development of the Lilleby property as well as solar energy projects that are currently being developed. It is on this background that the two main owners of Fesil decided to sell their shares to a mutually owned new holding company. Through this vehicle, and subsequent to a full takeover of Fesil, the two main owners wish to facilitate the necessary processes related to the restructuring of Fesil, while at the same time more effectively securing that Fesil obtains the necessary funding to invest in promising new projects. On 20 March 2007 Hafslund Venture AS acquired 136,308 Fesil-shares from Gurta AG and 63,238 Fesil-shares from Fokus Bank ASA, all at a price of NOK per Fesil-share. On 20 March 2007 Plavaldue AG (a 100% subsidiary of Gurta AG), Hafslund Venture AS and Fokus Bank ASA established Fesil Holding and Gurta AG, Hafslund Venture AS and Fokus Bank ASA simultaneously sold their respective shareholdings in Fesil to Fesil Holding at a price per share of NOK Fesil Holding thereby was required to put forward a mandatory offer to the other shareholders in Fesil in accordance with the Norwegian Securities Trading Act 1997 No 79, section 4-1. On 30 March Fesil Holding acquired 285,925 Fesil shares from John James Cunningham, Q-Met Ltd (a company registered in England and controlled by John James Cunningham) and Patricia Anne Cunningham, all at NOK per share. 8

9 Further, as Fesil Holding is the owner of shares in Fesil representing more than 90% of the share capital and voting rights (when excluding Fesil s own shares), the board of directors of Fesil Holding has resolved to implement a Compulsory Acquisition in accordance with section 4-25 of the Public Limited Liability Companies Act in connection with the presentation of the Offer. The implementation of the Compulsory Acquisition takes effect on the first day of the Offer Period. This Offer Document therefore serves the following two purposes: 1. As an Offer Document issued in accordance with section 4-1 of the Securities Trading Act 2. As notice of Compulsory Acquisition in accordance with section 4-25 of the Public Limited Liability Companies Act. 3.2 The Offeror The Offer is made by Fesil Holding AS, a limited company incorporated under the laws of the Kingdom of Norway with company registration number and owned 50,10 % by Plavaldue AG (a subsidiary of Gurta AG), 47,90 % by Hafslund Venture AS and 2% by Fokus Bank ASA. The registered office of Fesil Holding is Vikelvfaret 4, P.O. Box 1824 Lade, 7440 Trondheim, Norway. See Section 5 for further information about Fesil Holding. 3.3 Target Company The target company is Fesil ASA, Vikelvfaret 4, P.O. Box 1824 Lade, 7440 Trondheim, Norway. Fesil has company registration number and is a public limited company incorporated under the laws of the Kingdom of Norway. The shares in Fesil have been listed on the Oslo Stock Exchange since June 1995 and trade under the ticker-symbol FSL. The Shares are registered in the VPS under International Securities Identification Numbers (ISIN) NO See Section 6 for further information about Fesil. 3.4 Contact prior to the announcement of the Offer Prior to the announcement of the Offer, the shareholders of Fesil Holding have discussed their plans for reorganising their shareholding in Fesil with the CEO of Fesil, Mr. Einar Ø. Hagen and Mr. Cato A. Holmsen, chairman of Fesil. Note that Mr. Cato A. Holmsen, Mr. Giorgio Barelli and Mr. Giovanni L. Ghezzi are members of the Board of Fesil, while Mr. Bjørn Einar Kihl and Mr. Andrea Ghezzi are deputy members of the Board of Fesil. Mr. Cato A. Holmsen, Mr. Giorgio Barelli, Mr. Gianluigi Ghezzi and Mr. Bjørn Einar Kihl are members of the board of Fesil Holding. 3.5 Plans for the future business of Fesil It is the intention of Fesil Holding to be a strategic long-term investor in Fesil based upon the existing business concept. It is thus the intention of Fesil Holding to continue the development of Fesil s original strategy and business plan. This means that the previously announced required restructuring plans of Fesil will continue to be implemented. 9

10 Fesil Holding reserves the right to carry out further restructurings, including the right to apply for a de-listing of Fesil from the Oslo Stock Exchange as described in item 4.16 below. 10

11 4 The Offer and compulsory Acquisition 4.1 Offer price and Other Terms Shareholders accepting the Offer will receive a consideration of NOK per Share payable in accordance with the terms and conditions set forth herein. The Offer Price values Fesil s equity to a total of NOK 341,146,956 (when excluding own shares). Any dividend or other payment on the Fesil Shares paid out prior to the end of the Offer Period shall reduce the Offer Price accordingly. No interest compensation will be paid from the date of acceptance of the Offer until settlement of the Offer is made. As of the date of this Offer Document, Fesil Holding has a total holding of 8,289,505 Shares, representing per cent of the Shares and votes in Fesil and per cent of the Shares and votes in Fesil when excluding the 581,071 Fesil Shares owned by Fesil itself. Fesil Holding does not hold any rights to purchase or subscribe for shares in Fesil through options, convertibles or any other such financial instruments at the date hereof. Other than the Offeror, no other close associate of the Offeror as defined in section 4-5 of the Norwegian Securities Trading Act owns any share in Fesil as on the date of this Offer Document. According to section 4-10 of the Norwegian Securities Trading Act, the Offer Price per share in a mandatory offer must be equal to or higher than the highest price paid, or agreed upon, by the Offeror during the six-month period prior to the triggering of the obligation to make a mandatory offer. In the event that it is clear that the market price is higher at the time the mandatory offer obligation was triggered, the offer price shall at least equal the market price. The closing price for the Shares was NOK on 14 March 2007, the last trading day prior to Fesil Holding s public announcement of its intention to make the Offer. The Offer Price is equal to the highest price the Offeror has paid for Shares acquired (or agreed upon) in the last six months prior to the triggering of the mandatory offer obligation. 4.2 Share price development for Fesil The graph below illustrates the Fesil share s performance in the period 1 January 2004 up to and including 14 March 2007, the last trading day before the announcement of the Offer. 11

12 70 60 NOK per share /01/04 01/04/04 01/07/04 01/10/04 01/01/05 01/04/05 01/07/05 01/10/05 01/01/06 01/04/06 01/07/06 01/10/06 01/01/ Offer Period The Offer Period shall commence on and include 10 April 2007 and continue to and include 8 May 2007 at 16:30 CET. 4.4 Acceptance of the Mandatory Offer In order for Fesil Shareholders to accept the Mandatory Offer, the Acceptance Form must be correctly filled out, signed and delivered to Danske Markets together with any supplementary documents (ie. power of attorney). Information on individual shareholdings and certain other matters relating to each Fesil Shareholder has already been included in the Acceptance Form. The Acceptance Form also contains information on the settlement of the Offer Price. A Fesil Shareholder may only obtain the settlement described in section 4.5 below by complying with the above. It is the Acceptant s responsibility to correctly fill out the Acceptance Form and deliver it to Danske Markets before 16:30 CET on 8 May 2007, at which point of time the Acceptance Form must be received by Danske Markets at the address below by means of post, delivery or telefax: Danske Markets Corporate Finance Stortingsgaten 6 P.O. Box 1170 Sentrum 0107 Oslo Norway Telephone: Telefax:

13 Fesil Holding has the right, but not the obligation, to reject any incorrectly completed or late delivered Acceptance Forms. Fesil Shareholders whose Fesil Shares are split between several VPS accounts will receive a separate Acceptance Form for each such account and are required to submit separate Acceptance Forms for each such account. ANY FESIL SHAREHOLDER WHOSE FESIL SHARES ARE REGISTERED IN THE NAME OF A BROKER, DEALER, COMMERCIAL BANK, TRUST COMPANY OR OTHER NOMINEE MUST CONTACT SUCH PERSON IF SUCH FESIL SHAREHOLDER WISHES TO ACCEPT THE OFFER. IN ORDER FOR A FESIL SHAREHOLDER TO VALIDLY ACCEPT THE OFFER, THE ACCEPTANCE FORM MUST BE SIGNED BY SUCH FESIL SHAREHOLDER OR HIS AUTHORISED ATTORNEY. All Fesil Shares to be sold by an Acceptant under the Offer must be transferred to Fesil Holding free of any encumbrances or other third-party rights whatsoever and with all shareholder rights attached to them. Any third party with registered encumbrances or other third-party rights over the relevant VPS-account(s) must sign the Acceptance Form and thereby waive its rights to the Fesil Shares recorded thereon and approve the transfer of such shares to Fesil Holding, free of any encumbrances. The Acceptance will be irrevocable and cannot be withdrawn after having been received by Danske Markets. If an Acceptant wishes to accept the Offer for less than all the Fesil Shares registered on the Acceptant s VPS account, such Acceptant must fill out item 2 in the Acceptance Form. A Fesil Shareholder is, by returning the Acceptance Form to Danske Markets, bound to accept the cash consideration offered in the Offer on the terms and conditions set forth herein and in the Acceptance Form. 4.5 Settlement of the Mandatory Offer Settlement of Acceptances received before 16:30 CET on 8 May 2007 will be made in NOK, and will be available on each Acceptant s bank account on 22 May 2007 at the latest. Settlement will be made to the bank account registered in the VPS for dividend payments for each Acceptant at the time of the Acceptance. In the event that no such bank account is registered, settlement will be made by bank giro (a settlement system used in Norway, similar to a Norwegian currency banker s draft), or by cheque. In the event an Acceptant wishes to receive the cash payment in another bank account than the account registered in the VPS for dividend payments, such Acceptant is required to state such bank account number in the Acceptance Form. 4.6 Financing of the Offer Fesil Holding will finance the purchase of the Fesil Shares under the Offer and/or the Compulsory Acquisition through its available cash. The full amount payable under the Offer has been guaranteed by Fokus Bank ASA. Please refer to Appendix 3.The aggregate 13

14 Redemption Amount has, in accordance with section 4-25 of the Public Limited Liability Companies Act, been deposited in a designated bank account. 4.7 Costs Fesil Holding will pay all commissions and costs directly related to any VPS transaction required to complete the purchase of the Fesil Shares under the Mandatory Offer. Fesil Shareholders accepting the Mandatory Offer will not incur any brokerage fees or other costs directly related to VPS transactions in connection with their possible acceptance of the Mandatory Offer. Any tax consequences or costs incurred by Fesil Shareholders for financial or legal advice or any other costs incurred by them in connection with the Mandatory Offer will, on the other hand, not be paid by Fesil Holding. 4.8 Conditions to the Offer The Offer is unconditional. 4.9 Tax Fesil Shareholders accepting the Offer will be responsible for their individual tax liability arising as a result thereof and any costs incurred in obtaining advice on this matter. Please find set out a description of possible tax consequences in Section 7 below Compulsory Acquisition of Fesil Shares As Fesil Holding has become the owner of Fesil Shares representing more than 90% of the total number of shares issued by Fesil and Fesil shares representing more than 90% of the voting rights in Fesil s general meeting, Fesil Holding has the right (and each remaining Fesil Shareholder has the right to require Fesil Holding) to commence a compulsory acquisition for cash of the Fesil Shares not already owned by Fesil Holding pursuant to section 4-25 of the Norwegian Public Limited Companies Act. The board of directors of Fesil has resolved to implement a Compulsory Acquisition in accordance with section 4-25 of the Public Limited Liability Companies Act in connection with the presentation of the Offer. The implementation of the Compulsory Acquisition takes effect on the first day of the Offer Period. Below is a summary of the resolution: The Board of Directors of Fesil Holding AS on 20 March 2007 considered the proposal to implement a compulsory acquisition of the shares of the minority shareholders in Fesil ASA, in which Fesil Holding AS owns 8,003,590 shares. The Board resolved to implement the compulsory acquisition in accordance with section 4-25 of the Norwegian Public Limited Companies Act, effective from the time of commencement of the mandatory offer pursuant to Chapter 4 of the Norwegian Securities Trading Act. It was further resolved to offer the minority shareholders in Fesil ASA NOK per share (i.e. the same price per share as in the simultaneous Mandatory Offer being made in accordance with the Norwegian Securities Trading Act). The implementation of the Compulsory Acquisition means that the shares in Fesil held by the shareholders other than Fesil Holding are transferred to Fesil Holding. Each 14

15 shareholder retains a claim for consideration for its shares in Fesil against Fesil Holding. Settlement of the consideration can be chosen from the alternatives described in the section Alternative courses of action available to the Shareholders set forth in 4.15 below. As a consequence of the board of directors of Fesil Holding resolving to implement the Compulsory Acquisition, all shares of Fesil which are not owned by Fesil Holding will be blocked on 10 April 2007 and transferred from each shareholders VPS account to a VPS account established on behalf of Fesil Holding. Upon the transfer of such shares to Fesil Holding s VPS account, Fesil Holding will be entered as owner of all of the transferred shares in Fesil s shareholder register. From such time the former owners of the shares will not be shareholders in Fesil Redemption Amount under the Compulsory Acquisition The amount per share in Fesil offered in connection with the Compulsory Acquisition is NOK and will be paid in cash Objection period and acceptance of the consideration for Compulsory Acquisition The deadline for raising objections against, or rejecting the offer of, the Redemption Amount for Compulsory Acquisition under section 4-25 of the Public Limited Liability Act is a minimum of 2 months from the announcement of the Compulsory Acquisition in the electronic public notice service of the Norwegian Register of Business Enterprises at Brønnøysund, Norway. Such announcement is expected to take place by 10 April 2007 and the Offeror has set an Objection Deadline of 10 June Shareholders not accepting the Mandatory Offer, and who have not raised objections or rejected the offered Redemption Amount in writing prior to 10 June 2007, are to be treated in accordance with section 4-25 of the Public Limited Liability Companies Act as having accepted the offered Redemption Amount Settlement of the Compulsory Acquisition Settlement of the Redemption Amount to those shareholders who have not accepted the Mandatory Offer and not raised objections to or rejected the offered Redemption Amount within the expiry of the Objection Deadline, will be made as soon as possible after the expiry of the Objection Deadline under the Compulsory Acquisition. The relevant amount due to each accepting shareholder will be transferred to the bank account which the shareholder has registered with the VPS for dividend payments, or by cheque. For shareholders resident outside Norway, payment will be made by foreign currency cheque. The aggregate Redemption Amount has, in accordance with section 4-25 of the Public Limited Liability Companies Act, been deposited in a designated bank account. The deposited amount will be reduced as each settlement takes place either to shareholders accepting the Offer or as settlement in accordance with the Compulsory Acquisition Rights of Shareholders in respect of the Compulsory Acquisition Each shareholder not accepting the Mandatory Offer has the right, in accordance with section 4-25 of the Public Limited Liability Companies Act, to reject or raise objections with regard to the offered Redemption Amount. The redemption amount may in such a case be 15

16 set through an assessment by Norwegian courts, subject to special procedural rules. Both the size and the redemption amount and the payment date is determined as part of the assessment process. Fesil Holding will as a main rule under section 4-25 of the Public Limited Companies Act be obliged to pay the costs of such an assessment process. This main rule may in certain circumstances not apply. The assessment tribunal is not bound by the Redemption Amount offered by Fesil Holding, and the assessment tribunal may accordingly determine that the redemption amount shall be higher or lower. Implementation of the assessment process must be expected to take some time. Shareholders who wish to raise objections or to reject the offered Redemption Amount must give notice of this by the Objection Deadline to: Advokatfirmaet Fasting & Comrades AS P.O. Box 1646 Vika 0119 Oslo Norway Att.: Pedro Fasting Shareholders who do not raise objections or reject the offered Redemption Amount within the Objection Deadline will be regarded as having accepted the offered Redemption Amount Alternative courses of action available to the Shareholders The shareholders rights in relation to the Offer and Compulsory Acquisition of the Shares can be summarized as follows: 1. The shareholder may accept the Offer prior to the expiry of the Offer Period, which is at 16:30 CET on 8 May Settlement will then take place as soon as possible, and at the latest 14 days after the expiry of the Offer Period. 2. The shareholder may remain passive and take no action to accept or reject the Offer or the Redemption Amount offered in connection with the Compulsory Acquisition. On the expiry of the Objection Deadline for the Compulsory Acquisition, such shareholder will, in accordance with section 4-25 of the Public Limited Liability Companies Act, be deemed to have accepted the Redemption Amount. Settlement will then take place as soon as possible and within 14 days after the expiry of the Objection Deadline. 3. The shareholder may reject or raise objections to the offered Redemption Amount under the Compulsory Acquisition within the Objection Deadline (i.e. at the latest on 10 June 2007). Each of Fesil Holding and the rejecting or objecting shareholder will in such case, in accordance with section 4-25 of the Public Limited Companies Act, have the right to require that the consideration for such shareholder s shares in Fesil shall be determined by an assessment by the Norwegian courts. The settlement date for the shares under this alternative is unknown. Shareholders who wish to accept the Offer are requested to complete and return the attached Acceptance Form prepared for this purpose, see appendix 1. Shareholders who wish to raise objections or to reject the offered Redemption Amount must give notice to Advokatfirmaet Fasting & Comrades AS, see further under the heading Rights of Shareholders in respect of the Compulsory Acquisition above. 16

17 4.16 De-listing of Fesil Shares When the Compulsory Acquisition has been implemented and Fesil Holding therefore has become owner of all the shares in Fesil, Fesil Holding will present a proposal to a general meeting of Fesil to approve de-listing of the shares of Fesil from Oslo Børs. Once approved in the general meeting, Fesil will submit an application for de-listing to be approved by Oslo Børs, unless Oslo Børs itseif decides to de-list the shares before the application for delisting has been submitted. After the Compulsory Acquisition is implemented on 10 April 2007, the shares in Fesil will no longer be capable of being traded on the Oslo Børs or otherwise traded Consequences for Fesil s employees, board and management The completion of the Offer is not expected to have any legal, economic, commercial or work related consequences for the employees in Fesil and/or its subsidiaries. No members of the board will receive special favourable terms or advantages in connection with the Offer Legal consequences The Offer will not have any legal consequences other than what is presented already in the Offer Document Jurisdiction and choice of law The Offer is subject to Norwegian law. Any dispute arising out of or in connection with the Offer or the Offer Document shall be subject to the exclusive jurisdiction of the Norwegian courts with Oslo City Court as agreed venue in the first instance Miscellaneous Confirmation of receipt of Acceptance Forms or other documents will not be issued by or on behalf of Fesil Holding. The Offer Document will be sent to all Fesil Shareholders registered in Fesil s shareholder register in the VPS on 4 April 2007 using the addresses held on file at VPS, except for Fesil Shareholders in jurisdictions where this Offer Document may not lawfully be distributed. Further information on the Offer is available from: Danske Markets Corporate Finance Stortingsgaten 6 P.O. Box 1170 Sentrum 0107 Oslo Norway Telephone: Telefax:

18 5 Short presentation of Fesil Holding 5.1 Company information Fesil Holding was established on 20 March Main activities Fesil Holding acquired 4,240,012 shares in Fesil from Gurta AG, 3,594,316 shares in Fesil from Hafslund Venture AS and 169,262 shares in Fesil from Fokus Bank ASA on 20 March 2007 at a price of NOK per share. Fesil Holding acquired 285,915 shares in Fesil from Q-Met Limited, John James Cunningham and Patricia Anne Cunningham on 30 March 2007 at NOK per share. The purpose of the company is to be a long-term owner of Fesil. 5.3 Shareholder information Fesil Holding is a company incorporated in Norway. Fesil Holding s authorised share capital is, at the date hereof, NOK 84,630,860. Fesil Holding has issued 8,463,086 shares, all fully paid and with a nominal value of NOK 10 each. Fesil Holding is owned by Plavaldue AG (a subsidiary of Gurta AG) %, Hafslund Venture AS % and Fokus Bank ASA 2%. 18

19 6 Short presentation of Fesil 6.1 Company information This section contains a brief presentation of Fesil and its operations. The information has been derived from publicly available information only. Fesil Holding does not accept any liability for the accuracy or completeness of the information regarding Fesil and subsidiaries set forth herein. For a more detailed description of Fesil, please refer to Main activities Fesil is a major producer of ferrosilicon (FeSi) and silicon metal (SiMetal). FeSi is an important component in the production of stainless steel, while SiMetal is used within the chemical-, aluminium- and electronic industry. Fesil has three melting plants, all of them in Norway: Holla Metall, Lilleby Metall and Rana Metall. Special products, including granulated and refined qualities, make up the bulk of the production. All plants in operation are certified as conforming to ISO 9000 and ISO Fesil has been listed on the Oslo Stock Exchange since June Fesil has its head office in the city of Trondheim. Fesil s wholly owned sales company, Fesil Sales AS handles all marketing and sales of FeSi and SiMetal. The company is represented in every important market by either subsidiaries or agents. The world s leading steel works, aluminium and iron foundries and chemical groups are to be found among Fesil s customers. Norwegian authorities have imposed the most restrictive environmental regulations on the country s ferroalloy industry. Fesil s plants do not release anything to the sea, other than cooling water and sanitary effluents. The smoke is cleansed of dust. The dust, microsilica, has become a valuable additive to a number of products, among them concrete. Fesil s production is solely run by clean and renewable hydroelectric power. Financial statements for the financial year ended 31 December 2005 and the financial year ended 31 December 2006, respectively are included below. The 2006 financial statements have not yet audited and approved by the Fesil annual meeting. 19

20 Income statement (Group) NOK mill Total 2005 Total Operating income 2, ,248.0 Cost of goods sold (2,127.4) (1,804.0) Operating expenses (337,6) (362,3) Ordinary depreciation/write- (51.9) (54.6) down Operating result Share of results in other companies Financial income Financial expenses (42.5) (35.1) Result before tax Taxes (6.9) (11.7) Result for the period Minority Majority Earnings per share (EPS) Diluted earnings per share (EPS) Balance sheet (Group) NOK mill Intangible assets ,8 Property, plant and equipment Financial assets Inventories Receivables Bank deposits, cash in hand etc Total assets Paid-in capital Own shares (5.8) (5.8) Retained earnings Minority interests Total equity Provisions Long-term liabilities Short-term liabilities Total liabilities and equity Shareholder information Fesil s share capital is, as of the date hereof, NOK 90,441,560. The number of Fesil shares issued was 9,044,156. Fesil holds 581,071 own shares. All shares of Fesil are of the same class and are equal in all respects. Each share carries the right to one vote in shareholders meetings. 20

21 As of 4 April 2007, Fesil had a total of 234 shareholders, of which 15 were non-norwegian per cent of the shares of Fesil were held of non-norwegians as of the same date. There are no restrictions on foreign ownership of the shares of Fesil. The table below shows the 20 largest shareholders of Fesil per 4 April No. Shareholder Shares % 1 Fesil Holding AS 8,289, Fesil ASA 581, Aubert Vekst AS 15, Jan Fredrik Dahl 15, Jon Kåre Folkestad 10, Credit Agricole (Suisse) SA 7, Kjell Åbø 5, Knut Stavem 4, Ole Jacob Figenbaum 4, August Ringvold Agentur AS 3, Jan Onarheim 3, Ludvig Karlsen 3, Jan Wikborg 3, Ove Petter Rinnan 2, Tord Høyhilder 2, Vestmo A/S 2, Aaawilship Ltd AS 2, AS Glitra 2, Knut Lyng Sandvik 2, Dag Georg Johannessen 2, Total top 20 8,965, Others 78, Total 9,044,

22 7 Tax Consequences Below is a summary of some of the Norwegian tax rules which may be relevant to the possible sale of Fesil Shares on the terms set forth in the Offer. This summary is not an exhaustive description of all tax issues that may be of significance to each individual Fesil Shareholder and is limited to a description of Norwegian tax laws. This summary is based on Norwegian tax law as of the date of this Offer Document. Such laws may be amended, also with retroactive effect. The summary is only meant to provide general information and does not analyse all aspects that may be of importance to any Fesil Shareholder. The summary is based on Fesil being resident in Norway for tax purposes at the time of the realisation of the Fesil Shares. The taxation of each Fesil Shareholder depends on the respective Fesil Shareholder s specific situation, and each Fesil Shareholder should thus consult a tax adviser in order to establish the specific tax consequences of an acceptance of the Offer by him/it, as well as the relevance and implications of Norwegian, foreign or international tax law and possible amendments thereof. 7.1 Tax Consequences for Norwegian Shareholders Companies that are Fesil Shareholders Norwegian corporate shareholders (i.e. limited liability companies and similar entities) are not subject to taxation in Norway for capital gains derived from realisation of shares in limited liability companies and similar entities which are tax resident within The European Union (EU) / European Economic Area (EEA). Correspondingly, losses suffered from such realisation are not tax deductible. Thus, a Norwegian corporate shareholder or similar entity may sell its Fesil Shares under the Offer without tax consequences in Norway. Costs incurred in connection with the sale of Fesil Shares under the Offer are not tax-deductible for such shareholders. If the shareholder is treated as a tax transparent entity for Norwegian tax purposes, such as a general or limited partnership, and the partnership derives capital gains and losses upon the realisation of shares in limited liability companies and similar entities which are tax resident within the EU/EEA, such capital gains and losses will not be taxable for partners being limited companies and similar entities Individuals who are Fesil Shareholders Individual shareholders resident in Norway for tax purposes are taxable in Norway for capital gains on realisation of shares, and have a corresponding right to deduct losses. This applies irrespective of how long the shares have been owned by the individual shareholder and irrespective of how many shares that are realised. Gains are taxable as ordinary income in the year of realisation, and losses can be deducted from ordinary income in the year of realisation. The current tax rate for ordinary income is 28%. Hence, a gain derived from the sale of Fesil Shares by a Fesil individual Shareholder is taxable as general income at a rate of 28%. Losses suffered from such realisation are tax deductible. The taxable gain/deductible loss is calculated as the difference between the received consideration and the tax base value, including any adjustment according to the RISK- 22

23 method up to 1 January 2006, and less any unused calculated allowance. The RISKmethod was the Norwegian method for avoiding double taxation of a company s profits and a shareholder s gain on the shares, effective until and including the 2005 income year. The main purpose of the calculated allowance is to dividends/capital gains which will be exempt from tax. The tax-free allowance shall be computed for each individual shareholder on the basis of the cost price of each of the shares multiplied by a risk-free interest rate. The risk-free interest rate will be calculated every income year. Any unused allowance may be carried forward and set off against future divided distributions or against gains on the realisation of the same share. The allowance one year will be allocated to the shareholder owning the share on 31 December the relevant income year. Unused allowance connected to a share may be deducted from a capital gain on the same share, but may not lead to or increase a deductible loss. Further, unused allowance may not be set off against gains from realisation of other shares. If a Fesil Shareholder sells Fesil Shares acquired at various points in time, the Fesil Shares that were acquired first shall be regarded as being realised first (the FIFO-principle ) when estimating the taxable gain or loss. Costs incurred in connection with acquisition and transfer of Fesil Shares is deductible in the year of realisation. 7.2 Tax Consequences for Non-Norwegian Shareholders A gain from the sale of Fesil Shares by a Fesil Shareholder which is a limited liability company or similar entity not resident in Norway for tax purposes will not be subject to taxation in Norway. For individual shareholders not resident in Norway for tax purposes, capital gains upon realisation of shares in Norwegian limited liability companies and similar entities will be subject to taxation in Norway if the shareholder is effectively connected with a business which the shareholders takes part in or carries out in Norway. If an individual shareholder has been a resident of Norway for tax purposes and has realised shares less then five calendar years after termination in Norway, capital gains on realisations of shares will be subject to taxation in Norway if the tax liability to Norway is not limited by an applicable tax treaty. According to the Norwegian Income Tax Act a tax payer s tax residency in Norway is terminated three years after the year the taxpayer factually has moved out of the country. The liability to pay tax of capital gains upon realisation of shares may also be limited pursuant to an applicable tax treaty. 23

24 8 Norsk Sammendrag ( Norwegian Summary ) This document has been produced in English only, this is a Norwegian Summary included for information purposes only. The English version is the legally binding version and shall prevail in case of any discrepancies between the English text and the Norwegian summary. Dette kapittelet er en oversettelse fra engelsk til norsk av de mest sentrale forhold i tilbudsdokumentet. Der det er avvik eller uoverensstemmelser mellom den engelske og norske versjonen, vil den engelske versjonen være den gjeldende. Dette tilbudsdokumentet har følgende to formål: 1. Som et tilbudsdokument offentliggjort i henhold til 4-1 i Verdipapirhandelloven. 2. Som varsel om tvungen overføring i henhold til 4-25 i allmennaksjeloven. Aksjonærer må gjøre sine egne undersøkelser (herunder selv oversette dette Offer Document ( Tilbudsdokument ) når de skal vurdere det tilbudet som her er beskrevet ( Tilbudet ). Aksjonærene i Fesil ASA ( Fesil ) oppfordres til å studere Tilbudsdokumentet nøye. Aksjonærer må ikke oppfatte innholdet i dette Tilbudsdokumentet som juridisk, regnskapsmessig eller skattemessig rådgivning eller som informasjon som er tilpasset den enkelte aksjonærs individuelle situasjon. Den enkelte aksjonær oppfordres til å konsultere egne rådgivere for å oppnå en uavhengig og balansert vurdering av Tilbudet og det som er diskutert og beskrevet i Tilbudsdokumentet. Det samme gjelder i forhold til vurderingen av juridiske, skattemessige eller andre implikasjoner av Tilbudet for den enkelte aksjonær. 8.1 Tilbyder Det pliktige Tilbudet fremlegges av: Fesil Holding AS Vikelvfaret 4 Postboks 1824 Lade 7440 Trondheim Norge Fesil Holding AS er et aksjeselskap som er organisert og driver virksomhet i henhold til norsk lovgivning. Selskapet er registrert i Foretaksregisteret og har organisasjonsnummer Fesil Holding er eid 50,10 % av Plavaldue AG (et datterselskap av Gurta AG), % av Hafslund Venture AS og 2 % av Fokus Bank ASA. 8.2 Målselskap Målselskapet for Tilbudet er: Fesil ASA Vikelvfaret 4 Postboks 1824 Lade 7440 Trondheim. 24

25 Fesil er et aksjeselskap som er organisert og driver virksomhet i henhold til norsk lovgivning. Selskapet er registrert i Foretaksregisteret og har organisasjonsnummer Fesil-aksjene er registrert i Verdipapirsentralen og har internasjonalt verdipapirnummer ISIN NO Fesil har vært notert på Oslo Børs siden juni 1995 og har børsstickeren FSL. Fesils aksjekapital er NOK fordelt på aksjer, hver med en pålydende verdi på NOK 10, Tilbudsprisen Den tilbudte prisen per Fesil-aksje er NOK utbetalt kontant. 8.4 Tilbudsperioden Tilbudsperioden begynner 10. april 2007 og utløper 16:30 norsk tid 8. mai Fesil Holding har rett til å velge om en aksept som mottas etter forfallsdagen skal godtas. 8.5 Aksept av det pliktige Tilbudet For at Fesils aksjonærer skal ha akseptert det pliktige Tilbudet må et akseptskjema (eller en kopi av skjemaet) ferdig utfylt og behørig undertegnet, i tillegg til eventuelle påkrevde dokumenter, være sendt eller levert til Danske Markets og må være mottatt av Danske Markets på adressen nedenfor, med post, budtjeneste eller telefaks innen utgangen av tilbudsperioden. Med mindre annet er fastsatt, omfatter aksepten hele Fesil-aksjonærens beholdning av Fesil-aksjer. Akseptskjemaet, ferdig utfylt og behørig undertegnet, ska sendes som brev eller telefaks, eller eventuelt leveres til, og mottas av Danske Markets: Danske Markets Corporate Finance Stortingsgaten 6 Postboks 1170 Sentrum 0107 Oslo Norge Telefon: Telefaks: Fesil Holding er ikke forpliktet til å godta aksepter som mottas etter at tilbudsperioden er utløpt. Fesil-aksjonærer som eier Fesil-aksjer på flere VPS-kontoer, vil få et akseptskjema for hver VPS-konto. Alle Fesil-aksjer som skal aksepteres i henhold til det pliktige Tilbudet, skal overføres uten heftelser og alle andre former for tredjeparters rettigheter og med alle aksjonærrettigheter tilknyttet dem. Eventuelle tredjeparter med registrerte heftelser eller andre rettigheter for tredjeparter i de relevante Fesil-aksjene og/eller VPS-kontoen(e) må undertegne akseptskjemaet og på denne måten frasi seg sine rettigheter i Fesil-aksjene og godkjenne overføringen av Fesil-aksjene til Fesil Holding uten heftelser og alle andre former for tredjeparters rettigheter. 25