To my fellow hanger-on-ers,
I emailed Axel (Victor) and received updated info:
1. GE is not looking for advance title so full arbitration processwill occur. Victor guesstimates sometime in the autumn and payment 60 days hence.
2. GE is proposing 345SEK price on January 11. Victor says they’re researching to see if the price should be more. Not sure what that means or how we’d be able influence that.
3. Apparently interest is payable but I’ve asked Victor if he knows whether non-Swedish shareholders are eligible.
Here’s the text of the full document Victor sent me:
To
the Minority Shareholders of Arcam Aktiebolag
INFORMATION REGARDING COMPULSORY ACQUISITION (SQUEEZE- OUT) OF SHARES IN ARCAM AKTIEBOLAG
As You have previously received notice of, GE Sweden Holdings AB (the “Majority Shareholder”) has requested compulsory acquisition of Your and all other minority shareholders' shares in Arcam Aktiebolag (the “Target Company”). The Swedish Companies Registration Office (Sw. Bolagsverket) has appointed me as a trustee for the minority shareholders. The trustee protects the rights of the minority shareholders during the compulsory acquisition (squeeze-out) process. Note that you do not need to take any action if you do not want to. You will eventually receive compensation for your shares, but it will take some time.
1. Background
The Majority Shareholder has previously announced a public takeover bid to the shareholders in the Target Company. For each share in the Target Company, the Majority Shareholder offered a cash consideration of SEK 285, which was subsequently increased to SEK 300.
The Majority Shareholder now claims to own more than 90 percent of all outstanding shares in the Target Company. When a shareholder owns more than 90 percent of all shares in a Swedish limited liability company, the shareholder has the right under the Swedish Companies Act to compulsorily acquire the remaining shares of the company. The Majority Shareholder initiated the compulsory acquisition process on 11 January 2018. The Target Company’s stock was delisted on 26 January 2018, and therefore the stock is no longer subject to any organized trade.
2. In general about compulsory acquisitions
Compulsory acquisition of the shares of minor shareholders is a normal procedure and occurs on almost all purchases of companies with many shareholders. The procedure of compulsory acquisition is handled as a dispute between, on the one hand, the Majority Shareholder and, on the other hand, the remaining minority shareholders in the Target Company.
The dispute is handled by an arbitral tribunal consisting of three impartial arbitrators. The first arbitrator is appointed by the Majority Shareholder. The
Göteborg, June 2018
Majority Shareholder has appointed Claes Zettermarck. The second arbitrator shall be appointed by the minority shareholders. If many minority shareholders are involved in the dispute it is, however, practically impossible for the minority to appoint a joint arbitrator. In such cases, the Swedish Companies Registration Office will appoint a trustee to represent the minority shareholders in the dispute. In the present case, the Swedish Companies Registration Office has appointed me as trustee. The first task of the trustee is to appoint a joint arbitrator for the minority shareholders. I have appointed Gustaf Sjöberg. The two arbitrators appointed by the Majority Shareholder and the trustee respectively will thereafter appoint the third arbitrator, who will also become the chairman of the arbitral tribunal. In this case, Hans Danelius has been appointed as chairman.
The arbitral tribunal shall first determine whether the Majority Shareholder is entitled to request compulsory acquisition of the remaining shares in the Target Company. Thereafter, the arbitral tribunal shall determine the so called redemption price, which the Majority Shareholder shall pay for each share plus interest thereon. The arbitral procedure is usually conducted entirely in writing.
The trustee shall also preserve the rights of the minority shareholders in the arbitral proceeding. The trustee represents all shareholders that do not choose to represent themselves before the arbitral tribunal. Therefore, a minority shareholder does not need to take any action in order to preserve its rights. However, a minority shareholder that wishes to represent himself before the arbitral tribunal may do so, but he must notify the chairman of the arbitral tribunal; Hans Danelius, Roslinvägen 33, 168 51 Bromma, Sweden, hans.danelius@telia.com. A certain time will be specified, within which such notification is to be made. The notification may also be made later but a shareholder who notifies later than the specified time will be bound by the claims and concessions that the trustee have made until then.
3. Redemption price
The redemption price may be determined in two different ways, either in accordance with the so called main rule or the so called specific rule.
The specific rule shall apply if the Majority Shareholder has acquired more than 90 percent of the shares in the Target Company through a public offer, which is not the case. When the specific rule shall applies, the redemption price shall correspond to the value of the public offer. It may be noted that, under special circumstances, the main rule can apply even if the Majority Shareholder has acquired more than 90 percent of the shares through a public offer.
The redemption price will thus be determined under the general rule. If the main rule applies, the redemption price shall correspond to the market value of the shares (the so called actual value). The market value of the shares may be determined by different methods, e.g. based on the stock price or on a valuation of the Target Company. If the share has been listed on a regulated market, the main rule entails that the stock price shall be used unless there are special reasons for not doing so. The value shall be determined as per 11 January 2018, when the Majority Shareholder requested compulsory acquisition.
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The Majority Shareholder requests that the redemption price shall be determined to 345 SEK per share, equivalent to the stock price as of 11 January 2018.
Regardless of the method used to determine the redemption price, interest shall be added on the amount to in accordance with the below.
4. Interest
From the day of request for compulsory acquisition, 11 January 2018, interest shall be added to the redemption price. Interest is payable in accordance with 5 § of the Swedish Interest Act (Sw. Räntelagen), which corresponds to the Swedish Riksbank’s reference rate plus two percentage points. The reference rate is adjusted every six months based on the market rate of interest during the previous six months. Information regarding the reference rate is found on the Swedish Riksbank’s website: www.riksbanken.se.
5. Advance title and advance payment
If the arbitral tribunal initially determines that the Majority Shareholder is entitled to compulsory acquisition of the remaining shares in the Target Company, the Majority Shareholder may also, as stipulated in the Swedish Companies Act (Sw. Aktiebolagslagen), claim to obtain a so called advance title to the shares before the final arbitral award. In the present case, the Majority Shareholder has informed me that it will not claim advance title.
6. Final arbitral award
The arbitral procedure will be finalised when the arbitral tribunal renders an final arbitral award stating the determined redemption price. The final arbitral award may be appealed, but it is very uncommon. Appeal shall be made within 60 days from receipt of the arbitral award. For the minority shareholders who have not represented themselves the time-limit is counted from the day that the trustee received the arbitral award. An appeal is made by bringing the case to the Stockholm District Court.
7. Payment
The redemption price and the interest will be paid when the final arbitral award has gained legal force, which means 60 days from receipt by all parties in the dispute of the arbitral award, provided that no appeal is made.
The payment will usually be made through Euroclear Sweden, the Swedish Central Securities Depository. Euroclear Sweden will primarily make payment to the bank account connected to the securities account on which the shareholder’s shares in the Target Company are registered. For shareholders who do not have a securities account in a Swedish bank or a stockbroker, and/or in the absence of such registered account, payment may be made by the issuance of a bank cheque. In order to avoid incorrect payments, it could be a good idea for a minority shareholder to keep the securities account and bank account.
If Euroclear Sweden is unable to get in contact with a minority shareholder the payment shall be deposited with the County Administrative Board (Sw. Länsstyrelsen). The County Administrative Board will in turn pay the deposited amount to shareholder that can prove its shareholding.
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8. Legal costs
All costs for the arbitration, including compensation to the trustee, will be paid by the Majority Shareholder, unless the arbitral tribunal due to special reasons decides otherwise.
9. Time
Normally it takes about one year from initiation of the compulsory acquisition process until the final redemption price is settled. Depending on the complexity of the case it may take longer or shorter. If the final arbitral award is appealed the dispute may take considerably longer.
10. Further information
If you need further information regarding the compulsory acquisition you are welcome to contact me on the following address: Advokatfirman Lindahl KB, Box 11911, 404 39 Göteborg, telephone no. 03-799 10 00, e-mail: axel.weibull@lindahl.se. Since the compulsory acquisition involves many minority shareholders, I will unfortunately not always be available for information via telephone.
Best regards, Axel Weibull
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