Industri Kapital launches an offer for Perstorp and builds a world leading Nordic chemicals group

Perstorp Intressenter AB, a company controlled by Industri Kapital, makes a public offer to acquire all shares and convertible debentures in Perstorp AB. By co-ordinating Perstorp’s chemical operations with Industri Kapital’s Nordkemi a world leading Nordic chemicals group is formed. The intention is to develop the operations within chemicals and flooring separately, to increase profitability and, eventually, list the companies. Perstorp’s core competencies and management are strategic resources in the development of the new company.

* For each Series A share in Perstorp AB (“Perstorp”) SEK 140 in cash is offered, for each Series B share SEK 125 in cash is offered, including dividend, and for each convertible debenture with a nominal amount of SEK 88.90, SEK 125 in cash, with the addition of interest earned, is offered (“The Offer”).

* The Offer represents a premium of 56 percent for the Series A share and 49 percent for the Series B share compared to the average closing price during the last ninety trading days for Perstorp. Compared to the average closing price during the last thirty trading days, the Offer represents a premium of 39 percent for the Series A share and 33 percent for the Series B share. Compared to the last closing price of Perstorp’s shares on April 4, 2000, the Offer represents a premium of 32 percent for the Series A share and 17 percent for the Series B share.

* To date, shareholders, including institutional investors and shareholders represented on the Board of Directors of Perstorp, representing 28.8 percent of the share capital and 32.2 percent of the votes in Perstorp, have declared a positive view of the Offer.

* Perstorp Intressenter AB (“Perstorp Intressenter”) is controlled by the Industri Kapital 2000 fund to approximately 97 percent and by certain members of the Wendt family to approximately 3 percent. Perstorp Intressenter controls 1.1 percent of the share capital and 5.4 percent of the votes in Perstorp.

*The Board of Directors of Perstorp has evaluated the Offer from Perstorp Intressenter and has decided to recommend the shareholders and convertible debenture holders to accept the Offer.

* A prospectus is expected to be distributed to shareholders and holders of convertible debentures in Perstorp around May 2, 2000.

Background to the Offer
The specialty chemicals market is currently experiencing profound changes with increased globalisation and customer consolidation. The European market is more fragmented than in the US. To reach critical mass in each market segment is becoming significantly important as well as continued focus on innovation and product development. Together this is leading to increased requirements on financial and organisational resources.

Industri Kapital has operations within specialty chemicals through Nordkemi, which will consist of Neste Chemicals and Dyno Chemicals and have revenues of approximately SEK 11 billion. The key areas are resins and oxo products. Nordkemi will have some 4 500 employees and 70 production facilities.

“Perstorp is a well run company which, in a very natural way, complements Nordkemi’s position in the European specialty chemicals industry. Perstorp has a strong brand which we will develop and use together with Neste and Dyno”, says Harald Mix, deputy CEO Industri Kapital.

In the short term, the intention is to develop Perstorp separately from Nordkemi. The operations within Neste OXO are likely to be transferred from Nordkemi to Perstorp. Thus Perstorp’s position within coated-related chemicals will be strengthened and will almost double its sales within this area. The research and development centre will remain in Perstorp. Perstorp’s current management will have the operational responsibility for these operations.

In the medium term, Perstorp and Nordkemi will together have the potential to realise synergies. A merged company would hold leading global market positions within formaldehyde based chemicals such as adhesive resins and coating related chemicals with an expected turnover of SEK 16 billion.

“We also have a genuine interest in Pergo, the flooring division of Perstorp, where we see substantial possibilities for further growth”, comments Harald Mix.

Pergo fits well with Industri Kapital’s involvement in the consumer related building material area through Industri Kapital’s ownership of Nobia, with trademarks such as HTH, Marbodal and Swedoor. Pergo will be developed as an independent company and further acquisitions are likely to follow.


Recommendation to accept the Offer
The Board of Directors of Perstorp has evaluated the Offer from Perstorp Intressenter and has decided, based on the process that Perstorp has carried out and unanimously decided to recommend shareholders and holders of convertible debentures to accept the Offer. The Board’s recommendation is supported by a fairness opinion from Perstorp’s financial advisor Morgan Stanley Dean Witter.


For further information:
Harald Mix, deputy CEO Industri Kapital, +46-8-678 9503.

Please notice separate press release from Perstorp AB including the Board’s recommendation and comments on the transaction.

Not for release in or into the United States, Canada, Australia or Japan. No offer is being made hereby to persons whose participation in the offer requires that further prospectus, registration or other measures are taken in addition to those required under Swedish law.


Offer to shareholders and convertible debenture holders in Perstorp AB (publ)
The Board of Directors of Perstorp Intressenter has decided to launch a public offer to the shareholders and convertible debenture holders in Perstorp to acquire all Series A and B shares and convertible debentures in Perstorp. Perstorp Intressenter is controlled by Industri Kapital 2000 fund to approximately 97 percent and by certain members of the Wendt family to approximately 3 percent.


The Offer
For each Series A share in Perstorp, SEK 140 in cash is offered with deduction for the dividend for the financial year 1999 paid to any other party than Perstorp Intressenter.

For each Series B share in Perstorp, SEK 125 in cash is offered with deduction for the dividend for the financial year 1999 paid to any other party than Perstorp Intressenter.

Shareholders who accept the Offer are, regardless of when during the acceptance period the application is submitted, entitled to the dividend that will be decided at this year’s Annual General Meeting in Perstorp AB. The Board of Directors of Perstorp has proposed a dividend of SEK 4 per share.

For each convertible debenture with a nominal amount of SEK 88.90 issued under Perstorp’s 1996/2001 convertible debenture loan, holders will receive SEK 125 in cash. Holders of convertible debentures will also receive interest in accordance with the convertible terms until the day for settlement in the Offer.


Conditions of the Offer
The Offer is made subject to the following conditions:
* That the Offer is accepted to such a degree that Perstorp Intressenter becomes owner of more than 90 percent of the total number of shares and more than 90 percent of the voting rights of all shares in Perstorp, calculated after full conversion of all outstanding convertible debentures. However, Perstorp Intressenter reserves the right to complete the Offer at a lower level of acceptance.

* That Perstorp Intressenter receives any required governmental approval for the acquisition of shares and convertible debentures in Perstorp pursuant to conditions acceptable to Perstorp Intressenter. However, Perstorp Intressenter reserves the right to waive this condition in whole or in part .

* That customary conditions for payment of the debt-financing part of the acquisition-financing to be provided through loans are fulfilled. See section “Financing” below.

* That the acquisition, prior to an announcement of the completion of the Offer, in the judgement of Perstorp Intressenter, is not wholly or partly made impossible or significantly hindered as a result of legislation, court decision, action of a public authority, or similar events in Sweden or another country which has occurred or is expected to occur, or as a consequence of any other similar circumstances beyond Perstorp Intressenter’s control.


Financing
The acquisition of all shares and convertible debentures in Perstorp will be financed by equity as well as by debt. Industri Kapital has received binding credit commitments from Salomon Brothers International Limited and Svenska Handelsbanken regarding the debt-financing required. The lenders have made the credit commitments subject to satisfaction of customary conditions precedent. One such condition is that there is no material adverse change to Perstorp’s business and financial position before closing of the Offer.


Value of the Offer
The Offer represents a premium of approximately 56 percent for the A-share and approximately 49 percent for the B-share compared to the average closing price of Perstorp’s shares during the period November 26, 1999 – April 4, 2000, representing the last ninety trading days. Compared to the average closing price of Perstorp’s shares during the period February 23 – April 4, 2000, representing the last thirty trading days, the Offer represents a premium of approximately 39 percent for the A-share and approximately 33 percent for the B-share. Compared to the closing price of Perstorp’s shares on April 4, 2000 of SEK 106 for the Series A share and SEK 106.50 for the Series B share on the A-list of the OM Stockholm Stock Exchange prior to announcement, the Offer represents a premium of 32 percent for the A-share and approximately 17 percent for the B-share.

The total value of the Offer to the shareholders and convertible debenture holders in Perstorp amounts to approximately SEK 9.4 billion.

Both the Series A and Series B shares in Perstorp are listed on the A-list of the OM Stockholm Exchange and the London Stock Exchange. The convertible debentures are not listed or traded on any stock exchange or marketplace.


Agreements etc
Perstorp Intressenter controls 1.1 percent of the share capital and 5.4 percent of the votes in Perstorp.

To date, shareholders, including institutional investors and shareholders on the Board of Directors of Perstorp, representing 28.8 percent of the capital and 32.2 percent of the votes in Perstorp, have declared a positive view of the Offer.


Summary Timetable
A prospectus regarding the Offer is expected to be distributed to the shareholders and convertible debenture holders in Perstorp around May 2, 2000. The acceptance period of the Offer is expected to extend from May 4, 2000 until May 24, 2000. Subject to the completion of the Offer by Perstorp Intressenter, on or before May 29, 2000, settlement is expected to be made on June 2, 2000 for those shareholders and convertible debenture holders who have accepted the Offer. Perstorp Intressenter reserves the right to extend the acceptance period as well as postpone the date for settlement.

Industri Kapital has engaged Carnegie and Enskilda Securities as financial advisers for the Offer.

Stockholm, April 10, 2000
Perstorp Intressenter AB
The Board of Directors


The laws of the relevant jurisdictions may affect the making of the offer in, or to residents or citizens of, certain jurisdictions outside of Sweden (“foreign shareholders”). Foreign shareholders should inform themselves about and observe any applicable legal requirements in their respective jurisdictions.