PARIS--(Marketwire - May 30, 2012) - The Board of Directors of Technicolor, which met
yesterday in Paris, unanimously resolved to recommend to the
Company's
shareholders that they vote in favor of the resolutions relating to
the
implementation of the transaction agreed between Jesper Cooperatief U.A.,
an
entity controlled by JPMorgan Chase & Co., ("Jesper") and Technicolor
(the
"JPMorgan Resolutions"). This recommendation is in accordance with the
contracts
entered on May 2, 2012 (the "JPMorgan Contracts").
The JPMorgan Contracts were approved by the Board of Directors on May 2,
2012
and are the result of extensive discussions with Jesper and other
potential
investors. The Board of Directors, at its May 2, 2012 meeting, concluded
that
Jesper provided the best offer, including from a financial standpoint, but
it
also concluded that significant long term value would be derived by
Technicolor
from being supported by JP Morgan Chase & Co., the leading
worldwide
entertainment financier.
The JPMorgan Contracts provide a fully-negotiated 30-month agreement with
regard
to the governance of the Company, that would provide key support
towards
achieving the strategic goals outlined in Technicolor's Amplify 2015
strategic
plan and maximize shareholder value. Technicolor will benefit from
its
association with JP Morgan Chase & Co., its global brand, its experience
and
industry expertise. In addition, the proceeds from the capital
increase
contemplated by the JPMorgan Contracts amount to up to EUR158
million
corresponding to up to 99,193,696 shares (as specified below) and will
allow
Technicolor to reduce its financial debt, increase headroom on
financial
covenants and benefit from JPMorgan Chase & Co.'s active support in
further
improving its balance sheet.
During its meeting held yesterday, the Board of Directors of Technicolor
also
reviewed the unsolicited proposed shareholders resolutions together with
the
attached binding and irrevocable offer letter submitted on May 25, 2012
by
Vector Capital ("Vector"), an American investment fund that
conducted
discussions with Technicolor before April 30, 2012. The Board included
such
proposed resolutions (the "Vector Resolutions") in the agenda for the
June
20, 2012 General Shareholders' Meeting. In its offer, Vector expressed
support
for the Company's strategy as defined in its Amplify 2015 strategic plan
without
specifying precisely its declaration of intent vis-à-vis the Company
following
the planned capital increase it proposes. The proceeds from the capital
increase
contemplated by the Vector Resolutions amount to up to EUR186
million
corresponding to up to 109,114,822 shares (as specified below).
The Board notes, as Vector specified, that the approval of its resolutions
by
the General Shareholders' Meeting requires the prior rejection of the
JPMorgan
Resolutions proposed by the Board of Directors.
Accordingly, the Board of Directors does not recommend the Vector
Resolutions,
it being specified that, in the event that the JPMorgan Resolutions are
rejected
by the General Shareholders' Meeting, the JPMorgan Contracts shall be
deemed
null and void. In such a case, the Vector Resolutions shall be implemented
only
after having been adopted by the General Shareholders' Meeting.
The Company will post on its website, prior to the General
Shareholders'
Meeting, all requested information and documents in accordance with
applicable
rules as well as the full text of Vector's offer for the proper information
of
the shareholders.
Technicolor will file the required prospectuses with the Autorité des
marchés
financiers (AMF) relating to the capital increase transactions
contained
respectively in the JPMorgan Resolutions and the Vector Resolutions,
in
accordance with the terms of the JPMorgan Contracts and the Vector offer.
About Technicolor
Technicolor, a worldwide technology leader in the media and
entertainment
sector, is at the forefront of digital innovation. Our world class research
and
innovation laboratories enable us to lead the market in delivering
advanced
video services to content creators and distributors. We also benefit from
an
extensive intellectual property portfolio focused on imaging and
sound
technologies, based on a thriving licensing business. Our commitment:
supporting
the delivery of exciting new experiences for consumers in theaters, homes
and
on-the-go. Euronext Paris: TCH www.technicolor.com
Impact from the JPMorgan Resolutions
+-------------------------------------------------------+--------+--------+
| Take up Rate by the existing shareholders | 0% | 100% |
+-------------------------------------------------------+--------+--------+
| (million of shares) | | |
+-------------------------------------------------------+--------+--------+
| Number of shares issued in the reserved capital increase 72.3 | 72.3 |
+-------------------------------------------------------+--------+--------+
| Number of shares issued in the rights issue | 20.2 | 26.9 |
+-------------------------------------------------------+--------+--------+
| Total number of shares issued | 92.5 | 99.2 |
+-------------------------------------------------------+--------+--------+
| Number of shares issued to existing shareholders | 0.0 | 20.1 |
+-------------------------------------------------------+--------+--------+
| Number of shares issued to JPMorgan | 92.5 | 79.1 |
+-------------------------------------------------------+--------+--------+
| JPMorgan ownership post right issue | 29.96% | 25.18% |
+-------------------------------------------------------+--------+--------+
| (million euros) | | |
+-------------------------------------------------------+--------+--------+
| Total investment by JPMorgan | 147 | 126 |
+-------------------------------------------------------+--------+--------+
| Proceeds financed by existing shareholders | 0 | 31 |
+-------------------------------------------------------+--------+--------+
| Total proceeds for Technicolor | 147 | 158 |
+-------------------------------------------------------+--------+--------+
Impact from the Vector Resolutions
+--------------------------------------------------------+--------+-------+
| Take up Rate by the existing shareholders | 0% | 100% |
| | | |
| (million of shares) | | |
| | | |
| Number of shares issued in the reserved capital increase 47.5 | 47.5 |
| | | |
| Number of shares issued in the rights issue | 46.2 | 61.6 |
| | | |
| Total number of shares issued | 93.7 | 109.1 |
| | | |
| Number of shares issued to existing shareholders | 0.0 | 50.5 |
| | | |
| Number of shares issued to Vector | 93.7 | 58.6 |
| | | |
| Vector ownership post right issue | 29.94% | 18% |
| | | |
| (million euros) | | |
| | | |
| Total investment by Vector | 162 | 108 |
| | | |
| Proceeds financed by existing shareholders | 0 | 79 |
| | | |
| Total proceeds for Technicolor | 162 | 186 |
+--------------------------------------------------------+--------+-------+
Recommendation of Technicolor's Board of Directors:
http://hugin.info/143597/R/1615821/515180.pdf
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Source: TECHNICOLOR via Thomson Reuters ONE
[HUG#1615821]