GLITNIR IS INTENDING TO MAKE A PUBLIC TENDER OFFER FOR FIM

Mon, Feb 05, 2007 08:01 CET

GLITNIR BANKI H.F. STOCK EXCHANGE RELEASE FEBRUARY 5, 2007 9 a.m. Finnish time

FIM has today received an announcement from Glitnir that Glitnir is intending to make a public tender offer for the shares and options in FIM.

NOT FOR DISTRIBUTION IN THE UNITED STATES

Glitnir banki h.f. announces its intention to acquire the outstanding shares and options in FIM, and has obtained an irrevocable undertaking from a majority of FIM shareholders to sell their shares to Glitnir. The consideration offered is eight (8.00) euro per share paid as a combination of cash and shares in Glitnir or cash only.

Glitnir banki h.f. (“Glitnir” or the “Offeror”) has on February 5, 2007 decided to announce the intention of Glitnir to acquire the outstanding shares in FIM Group Corporation (“FIM” or the “Company”), and other securities entitling to such shares through a public tender offer (the “Tender Offer”). Glitnir has on the date hereof obtained an irrevocable undertaking from shareholders in FIM representing approximately 68% of the shares to sell their shares to Glitnir after the annual general meeting of shareholders of FIM or through the Tender Offer.

Glitnir is a leading financial group registered in Iceland and the second largest company listed on the Iceland Stock Exchange by market capitalization. Glitnir offers universal banking services and is a leading niche player in three global segments; seafood/food, sustainable energy, and offshore supply vessels. Glitnir considers Iceland and Norway its home markets. Services include retail, corporate and investment banking, stock trade and capital management. Glitnir announced changes on Friday February 2, 2007 to the group’s organisational structure and plans to open an office in New York to support its North American business. The aim of the organisational changes is to facilitate strong and profitable integration of all business units and to accommodate further growth. Glitnir’s new organisation is a matrix of functional, geographical markets and support divisions. The business units are Markets, Investment Banking, Investment Management and Corporate Banking, while the geographical units are Iceland, Nordic, Europe and International. The support units are Finance & Risk Management, Shared Services and Corporate Development. As of December 31, 2006, the Glitnir Group’s total assets were ISK 2.246 billion (EUR 24 billion) and the profit for the financial year was ISK 38.2 billion (EUR 435 m) Profit after Tax.

Glitnir believes that a combination of the businesses of Glitnir and FIM would result in a strong player in the Nordic market, which would strengthen both organisations and enhance and broaden service and product offering to their customers. Furthermore, Glitnir believes that it would be well positioned to support FIM with regard to the development of the retail banking operations in Finland.

The principle terms of the Tender Offer, including the conditions for completing the Tender Offer, are included as an exhibit to this stock exchange release.

Acquisition of shares from certain shareholders of FIM

Glitnir has obtained a commitment (the “Commitment”) from FIM shareholders Seppo Sairanen, Markku Kaloniemi, Niklas Geust, Pekka Mölsä, Karri Toivonen, Jussi Seppälä, Jukka Ylitalo, Antti Pohjola, Jan Forsbom, Jussi Hyöty and Janne Holtari representing, at the time of this announcement, altogether approximately 68% of the shares that would entitle Glitnir to 68% of the votes in FIM (the “Majority Shareholders”). Pursuant to the Commitment, the Majority Shareholders have given Glitnir an irrevocable undertaking to sell the FIM shares and options held by each Majority Shareholder to Glitnir at a price of EUR 8 per share payable 50% in cash and 50% in Glitnir shares by means of either (i) or (ii) below, whichever results in the earlier settlement:

(i) by accepting Glitnir’s Tender Offer to be commenced on or about March 12, 2007 or as soon as practicable thereafter; or

(ii) by one or several block trades on the Helsinki Stock Exchange made on the first banking day immediately following the record date for any dividend payment based on a resolution by the Annual General Meeting of Shareholders of FIM, not to be held prior to March 15, 2007, provided that the following conditions are met (unless waived by Glitnir)

(a) none of the conditions for the completion of Glitnir’s Tender Offer have been breached but they are fulfilled and/or continue to be satisfied (as the case may be) at that time;

(b) the Annual General Meeting of Shareholders of FIM has resolved on electing at least three (3) representatives of Glitnir in the Board of Directors of FIM, such resolution being conditional upon and effective as of the execution by Glitnir of the trades concerning the Shares; and

(c) all the Majority Shareholders have also otherwise materially complied with the terms of the Letter Agreement (as defined below) dated as of the date hereof.

It is noted that in alternative (ii) the cash part and the share part of the consideration for the Shares shall be determined using the same principles as in the Tender Offer.

The Majority Shareholders have furthermore signed a letter agreement (the “Letter Agreement”) wherein they have inter alia given certain undertakings to use their best efforts with regard to that FIM and its subsidiaries shall (i) conduct their respective businesses in the ordinary course and in all cases based on reasonable business judgment; and (ii) notwithstanding the aforesaid, refrain from making or implementing, inter alia, any material changes in its business, any material investments or divestments outside the ordinary course of business, or borrowing any loan outside the ordinary course of business; and/or any change of articles of association.

The current lock-up arrangements related to the shares held by shareholders selling their shares in the initial public offering on April 13, 2006 will be released to allow for the contemplated transactions to be executed. Furthermore, the Majority Shareholders have agreed that Glitnir shares received by them pursuant to these transactions will be subject to similar lock-up arrangements.

Following Glitnir’s purchase of the shares and options held by the Majority Shareholders, its holding in FIM would increase to over 50% and Glitnir would be obligated to make a mandatory tender offer for all shares in FIM and other securities entitling to such shares in accordance with the Securities Markets Act. Glitnir and the Majority Shareholders have not agreed on the use of control or voting rights in FIM. Glitnir does not currently hold any shares or other securities in FIM.

Recommendation by the Board of Directors of FIM

The Board of Directors of FIM has on the date hereof decided to recommend that shareholders of FIM tender their FIM shares and options to such shares to Glitnir pursuant to the terms of Glitnir’s Tender Offer.

Glitnir has entered into a combination agreement with FIM on the date hereof regarding the principle terms of the Tender Offer, certain undertakings by FIM regarding the conduct of business of FIM, as well as certain other terms related to the Tender Offer (the “Combination Agreement”). The principle terms of the Combination Agreement have been described below.

Offer Price

The offer price for each outstanding FIM share (“Share”) validly tendered and not properly withdrawn in accordance with the terms and condition of the Tender Offer is Eur 8.00 (the “Offer Price”). The shareholders of FIM may choose between:

a) a combined offer of cash and Glitnir shares containing Eur 4.00 (four euro) cash and 14.75 (fourteen point seventy five) Glitnir shares per each FIM Share; or

b) a cash offer for Eur 8.00 (eight euro) per FIM Share.

If the General Meeting of Shareholders of FIM resolves on a dividend distribution in excess of Eur 0.14 (fourteen cents) after the date hereof and the record date established for such dividend distribution precedes the settlement date of the Tender Offer, the Offer Price shall be reduced by the amount of the dividend in excess of Eur 0.14 (fourteen cents) per Share in any such dividend distribution.

The number of Glitnir shares paid as consideration may be adjusted based on dividend distributions by Glitnir. For the purposes of a possible adjustment, the value of the Glitnir shares is deemed to be ISK 24.8 per share being the closing price of the Glitnir share in the Iceland Stock Exchange on 15 January 2007. The ISK/EUR exchange rate is 91.44 being the mid rate published by the Icelandic Central Bank on 16 January 2007. If the General Meeting of shareholders of Glitnir resolves on a dividend distribution in excess of 30% (thirty per cent) of the profit of Glitnir as presented in the approved annual accounts for 2006, and the record date established for such dividend distribution precedes the settlement date of the Tender Offer, the above Glitnir share price shall be adjusted downwards ISK for ISK by the total amount of dividend distribution. The number of Glitnir shares paid as consideration for each FIM Share will be adjusted accordingly. A dividend payment by Glitnir, as described above, does not affect the Offer Price if the cash offer is chosen.

The Offeror is offering for each FIM stock option (the "Options") 8 euro per option less the trade weighted average price of the FIM share in regular trading on the Helsinki Stock Exchange between October 1 and December 31, 2006 (EUR 5.19). The trade weighted average referred to above (the option exercise price) shall be adjusted by any dividend paid by FIM.

The Offer Price, compared to FIM’s historical volume weighted average share price on the Helsinki Stock Exchange for the time period since the initial public offering on April 13, 2006 and for the preceding three months, represents a premium of approximately 37 and 43 percent, respectively. Compared to the closing share price on the Helsinki Stock Exchange on February 2, 2007, the last trading day before the announcement of the intention to make a Tender Offer, of 6.17 euro per share, the Offer Price represents a premium of approximately 30 percent.

Financing of the Tender Offer

The Tender Offer will be funded partly through Glitnir’s own reserves and partly through existing loan facilities. The financing is not subject to any condition that will affect the consummation of the Tender Offer. Glitnir has authorizations to its Board of Directors to issue the new shares to be offered as a part of the consideration.

The Tender Offer Period

The Tender Offer is expected to be launched on March 12, 2007 or as soon as practicable thereafter. As shares in Glitnir will be offered as consideration, a prospectus will need to be filed with appropriate financial supervision authorities, which may affect the time when the Tender Offer can be launched. The tender offer period is expected to initially be approximately four weeks. The Offeror will reserve the right to extend or suspend the tender offer period, as allowed under the Securities Markets Act.

The Combination Agreement

The Combination Agreement between Glitnir and FIM stipulates the principle terms under which Glitnir will make the Tender Offer. The Combination Agreement also addresses the recommendation given by the Board of Directors of FIM and the terms under which the recommendation may be changed or revoked pursuant to the obligations of the Board of Directors under the Finnish Companies Act and the Securities Markets Act. The Combination Agreement also contains stipulations regarding the cooperation of the parties for the purposes of preparing necessary filings and documents required to execute the Tender Offer and the acquisition of FIM by Glitnir. FIM and its subsidiaries shall until the completion of the Tender Offer (i) conduct their respective businesses in the ordinary course and in all cases based on reasonable business judgment; and (ii) notwithstanding the aforesaid, refrain from making or implementing, inter alia, any material changes in its business, any material investments or divestments outside the ordinary course of business, or borrowing any loan outside the ordinary course of business; and/or any change of articles of association.

Glitnir will announce the complete terms and conditions of the Tender Offer and information on how the Tender Offer can be accepted by stock exchange release separately.

Glitnir banki h.f.
Board of Directors

Further information:
Bjarni Armansson, CEO, Glitnir banki h.f.
Phone: +354 440 4005

Bjorn Richard Johansen, Glitnir banki h.f.
Managing Director, Corporate Communications
Phone: +47 2282 5693
bjr@glitnir.no

Glitnir banki h.f.
Phone: +354 440 4500

DISTRIBUTION
Helsinki Stock Exchange
Main media

APPENDIX
Principle Terms and Conditions of the Tender Offer

Glitnir is a leading financial group registered in Iceland and the second largest company listed on the Iceland Stock Exchange by market capitalization. Glitnir offers universal banking services and is a leading niche player in three global segments; seafood/food, sustainable energy, and offshore supply vessels. Glitnir considers Iceland and Norway its home markets. Services include retail, corporate and investment banking, stock trade and capital management. Glitnir announced changes on Friday February 2, 2007 to the group’s organisational structure and plans to open an office in New York to support its North American business. The aim of the organisational changes is to facilitate strong and profitable integration of all business units and to accommodate further growth. Glitnir’s new organisation is a matrix of functional, geographical markets and support divisions. The business units are Markets, Investment Banking, Investment Management and Corporate Banking, while the geographical units are Iceland, Nordic, Europe and International. The support units are Finance & Risk Management, Shared Services and Corporate Development. As of December 31, 2006, the Glitnir Group’s total assets were ISK 2.246 billion (EUR 24 billion) and the profit for the financial year was ISK 38.2 billion (EUR 435 m) Profit after Tax.

These materials are not an offer of securities for sale in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended. The issuer of the shares has not registered, and does not intend to register, any portion of the offering in the United States and does not intend to conduct a public offering of shares in the United States.

This document is not a prospectus and as such does not constitute an offer to sell or the solicitation of an offer to purchase shares or rights to subscribe for shares. Investors should not subscribe for any shares or rights referred to in this document, or tender any shares, except on the basis of the information contained in a prospectus or tender offer document.

This document is only being distributed to and is only directed at (i) persons who are outside the United Kingdom or (ii) to investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order") or (iii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as "relevant persons"). The shares are only available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such securities will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents.

This stock exchange release must not be released or distributed in whole or in part in or into the United States, Canada, Japan or Australia. This stock exchange release is neither an offer to purchase nor a solicitation for an offer to sell shares, and the tender offer will not be made directly or indirectly in the United States, Canada, Japan or Australia or any other jurisdiction where such an offer would violate laws of that jurisdiction. This stock exchange release and tender offer will not and may not be distributed, forwarded or transmitted in any way, such as by post, fax, email or telephone, or in any other way to or from areas where it would violate the law.

PRINCIPLE TERMS AND CONDITIONS OF THE TENDER OFFER

Glitnir banki h.f. will announce the complete terms and conditions of the Tender Offer and information on how the Tender Offer can be accepted by stock exchange release separately.

Object of the Tender Offer:

Subject to the terms and conditions set forth below, the Glitnir banki h.f. (“Glitnir” or the “Offeror”) (or a fully owned subsidiary of the Offeror) offers to acquire all issued and outstanding Shares and Options, which are not owned by FIM Group Corporation (“FIM” or the “Company”) or a company belonging to the FIM group of companies.

Offer Price:

The Offer Price for each FIM Share validly tendered and not properly withdrawn in accordance with the terms and condition of the Tender Offer is Eur 8.00. The shareholders of FIM have two alternatives to accept the Tender Offer:

a) Combined cash and Glitnir share offer containing Eur 4.00 (four euros) cash and 14.75 (fourteen point seventy five) Glitnir shares per each FIM Share. The computational value of the combined offer is Eur 8.00 based on the Rates (defined in this offer), or

b) Cash offer for Eur 8.00 (eight euros) per FIM Share.

If the General Meeting of Shareholders of FIM resolves on a dividend distribution in excess of Eur 0.14 (fourteen cents) after the Announcement and the record date established for such dividend distribution precedes the Settlement Date (as defined in these terms), the Offer Price shall be reduced by the amount of the dividend in excess of Eur 0.14 (fourteen cents) per Share in any such dividend distribution, and if the record date is after the Settlement Date, the Offer Price shall be increased with Eur 0.14 (fourteen cents).

If the General Meeting of shareholders of Glitnir resolves on a dividend distribution in excess of 30% (thirty per cent) of the profit of Glitnir as presented in the approved annual accounts for 2006, and the record date established for such dividend distribution precedes the Settlement Date, the above Glitnir share price shall be adjusted downwards ISK for ISK by the total amount of dividend distribution. The number of Glitnir shares paid as consideration for each FIM Share will be adjusted accordingly. A dividend payment by Glitnir, as described above, does not affect the Offer Price if the cash offer is chosen.

The price for the options 2006A and 2006H entitling for shares in the Company will be the indicative offer price of EUR 8 per option less the exercise price, being trade weighted average of the Company’s share price in regular trading on the Helsinki stock exchange between 1 October and 31 December 2006. The exercise price for the options 2006A and 2006H shall, in accordance with the option terms, be adjusted by any dividend paid by FIM after the date hereof and prior to the closing of the Tender Offer. The options 2006B and 2006C are in the possession of the FIM Group and shall not be subject to the offer.

“Rates”: The value of Glitnir share is deemed to be ISK 24.8 per share being the closing price of the Glitnir share in the Islandic Stock Exchange on 15 January 2007. The ISK/EUR exchange rate is 91.44 being the mid rate published by the Icelandic Central Bank on 16 January 2007.

The “Settlement Date” is the date upon which a person shall have been registered as a shareholder of FIM or Glitnir, as applicable, to be entitled to receive dividends decided to be paid by the annual general meeting of shareholders of the respective companies.

Conditions to Completion of the Tender Offer:

The obligation of the Offeror to accept for payment the Shares and Options validly tendered and not properly withdrawn pursuant to the Tender Offer is subject to the satisfaction or, where permitted, waiver by the Offeror of the following conditions (”Transaction Conditions”) on or prior to the execution of the sale and purchase of the Shares and Company Options pursuant to the Tender Offer (the “Closing Date”):

(i) More than two thirds (2/3) of the Company Shares outstanding (on fully diluted basis) have been validly tendered and not properly withdrawn in accordance with the terms and conditions of the Tender Offer, or are otherwise in the ownership and possession of Glitnir.

(ii) The approvals of (a) the antitrust and merger control authorities and (b) other relevant authorities (such as financial supervision authorities), in jurisdictions in which the approval of such authorities is required, shall have been received, and any material conditions set forth in such approvals can be accepted by the Offeror (acting reasonably), and any applicable waiting periods shall have expired or have been terminated or waived.

(iii) No order shall have been issued by a court of competent jurisdiction or other governmental authority preventing the consummation of the Tender Offer or the other transactions contemplated by the Combination Agreement that remains in effect.

(iv) The Board of Directors of FIM has recommended the acceptance of the Tender Offer to the shareholders of FIM, and such recommendation has not been revoked or amended to the detriment of Glitnir.

(v) There is no material breach of the terms of the Combination Agreement between Glitnir and FIM or the Agreement between Glitnir and the Majority Shareholders, including the undertakings of the Majority Shareholders, which has not been remedied, and the Combination Agreement shall not have been terminated in accordance with its terms.

(vi) There has been no decision to change the Articles of Association or any material change to the accounting principles or practices of FIM.

(vii) There has been no decision or proposal concerning or constituting: (i) a change in the number of shares in or share capital of FIM or its subsidiaries, including without limitation by reclassification, recapitalisation, stock split, combination or issuance of any shares or securities convertible into or exchangeable for shares in FIM or in its subsidiaries; (ii) any sale, purchase, transfer or other disposal of Shares or treasury Shares (as the case may be) or the treasury Options or any other shares or securities convertible into or exchangeable for shares in FIM or in its subsidiaries (whether or not based on the authorisations granted to the Board of Directors); and/or (iii) a non-mandatory material increase in the current or future compensation or other benefits in any manner whatsoever (including without limitation by way of synthetic options, bonus, insurance, severance or pension arrangements) of each of the persons employed by or serving FIM or its subsidiaries.

(viii) The lock-up arrangements and other restrictions that the shares held by the Majority Shareholders are currently subject to are cancelled.

(ix) The Offeror has not received information regarding any facts or circumstances that have resulted in or constituted, or that are likely to result in or constitute, a Material Adverse Change (as defined below).

“Material Adverse Change” means any material adverse change in, or material adverse effect on, the business, assets, financial condition or results of operations of FIM and/or its subsidiaries, taken as a whole (disregarding any impact of the Tender Offer, market fluctuation or extraordinary changes in FIM’s competitive environment), or any divestment or reorganisation of any material part or assets of FIM and/or its subsidiaries or any other material action or plan for action outside the ordinary course of business.

The Offeror reserves the right to waive any of the Transaction Conditions that have not been satisfied.

Tender Offer Period

The Tender Offer is expected to be launched on March 12, 2007 or as soon as practicable thereafter. As shares in Glitnir will be offered as Consideration, a prospectus will need to be filed with appropriate financial supervision authorities, which may affect the time when the Tender Offer can be launched. The tender offer period is expected to initially be approximately four weeks.

The Offeror will reserve the right to extend or suspend the Tender Offer Period, as allowed under the Securities Markets Act.

Glitnir will decide on all other matters related to the Tender Offer.

The Tender Offer will not be made directly or indirectly in areas in which making the Tender Offer would violate the law. The Tender Offer Document or its related acceptance forms will not be distributed or forwarded, nor may they be distributed or forwarded in any way, such as by post, fax, email or telephone, or in any other way, to or from areas where it would violate the law. The Tender Offer will not be made directly or indirectly in the United States, Canada, Australia or Japan, nor to those countries, and nor will the Tender Offer Document or its related information be sent to the United States, Canada, Australia or Japan.