Ratos comments on the public offer for Dahl

RATOS COMMENTS ON THE PUBLIC OFFER FOR DAHL Ratos and EQT, through their jointly owned company Dahl Intressenter AB, today are issuing a cash offer for all the shares in Dahl. The offer has a total value of SEK 2,496 million, corresponding to SEK 120 in cash per share in Dahl. Dahl Intressenter will be 49-percent owned by Ratos and 51-percent by EQT. The offer represents a premium of 47 percent in relation to the Dahl share's average closing price during the last 30 trading days before trading was halted on Dahl on the Stockholm Stock Exchange. "Nearly two months ago Ratos adopted a new strategy," says Arne Karlsson, President of Ratos. "Since then Ratos' management has reexamined all the company's holdings and evaluated new investment opportunities among a number of unlisted companies. EQT contacted us some time ago after it had evaluated Dahl. We found that our thoughts regarding Dahl's current situation and future development opportunities were in agreement. With our combined industrial and financial expertise and experience, we can create long-term value-added and realize Dahl's profitability potential. We also feel that the management in the present situation will have the freedom from distraction it needs if Dahl is an unlisted company. "The acquisition of Dahl is the first in a series of transactions we intend to make from here on," he continues. "For Ratos, the offer means that our interest in Dahl will increase from 28 percent to 49 percent." " Within the framework of the responsible exercise of our ownership role, we have a stated exit strategy which can lead to a public listing or our participation in an industrial restructuring. The purpose of Ratos' focus on increased investments in unlisted companies is to generate a higher total return for our shareholders," he concludes. The press release on the joint offering is enclosed. For further information, please contact President Arne Karlsson at +46-8-700 17 00. Ratos is an owner-company whose mission is to generate the highest possible return for its shareholders over time through the professional, active and responsible exercise of its ownership role in a number of selected companies and investment situations where Ratos creates a unique investment opportunity for the stock market's players. Value-added is created in connection with the acquisition, development and sale of companies. As of February 5, 1999 Ratos had a net asset value of SEK 7.1 billion, consisting of Active Holdings and Asset Management. In addition to Dahl, Active Holdings include Esselte, PriFast, Scandic Hotels, ACE, Capona, Telelogic, Telia Overseas and TV8. [REMOVED GRAPHICS] PRESS RELEASE FOR IMMEDIATE RELEASE EQT and Ratos issue cash offer for Dahl EQT and Ratos, through their jointly owned company DIAB, are offering SEK 120 in cash per share in Dahl. The offer has a total value of SEK 2,496 million. DIAB is a Swedish company 51-percent owned by EQT and 49-percent by Ratos. Dahl's shares are currently listed on the A-list of the Stockholm Stock Exchange and on the Copenhagen Stock Exchange. DIAB's offer represents a premium of 47 percent in relation to the average closing price for the Dahl share during the period December 21, 1998 - February 5, 1999, the last 30 trading days before trading in the Dahl share was halted on the Stockholm Stock Exchange. Ratos currently owns 28 percent of the capital and voting rights in Dahl. Neither DIAB nor EQT own any shares in Dahl. Ratos intends to accept the offer for all its shares in Dahl. Dahl is the Nordic region's leading wholesale and trading company in the market for heating & sanitation/water & sewer supply and pipe products for industry. The Dahl Group has a leading position in Denmark, Norway, Sweden and Poland and a strong position in the Finnish market. "Dahl will play an interesting role in the continued structural changes in the wholesale market for building materials," says Arne Karlsson, President of Ratos. "In order to successfully implement the measures that will be necessary in the future, we have to create a situation for Dahl's management where they can devote all their energy to realizing the growth potential in the company." "We have followed the development of Dahl for the past half-year," says Lars Ramqvist, Chairman of EQT Scandinavia BV. "According to our assessment, there is more room for Dahl as an unlisted company to raise its long-term profitability. We contacted Ratos, and it turned out that we shared the same ideas about Dahl. Together with Ratos, we will work in close cooperation with Dahl's management to develop the company in an industrially sound manner." 1 The Board of Directors of Dahl Intressenter AB ("DIAB"), the Board of Directors of EQT Scandinavia BV ("EQT") and the Board of Directors of Förvaltnings AB Ratos (publ) ("Ratos") have decided for DIAB to issue a public offer to the shareholders of Dahl International AB (publ) ("Dahl") to tender their shares in Dahl to DIAB for SEK 120 in cash per share. DIAB is a Swedish company that will be 51-percent owned by the investors in EQT and 49-percent by Ratos. Credit assurances have been received for the necessary financing of the offer. Since Dahl broadened its ownership base through an initial public offering in 1996, Ratos has owned 28 percent of the capital and voting rights. Ratos intends to accept the offer for all its shares in Dahl. Because of the public offer, the Board of Directors of Dahl plans to obtain an independent valuation of the Dahl share and issue a recommendation to its shareholders. This recommendation is expected to be issued during the acceptance period for the offer. The Board of Directors of Dahl has announced that Board members Conny Karlsson, Thomas Mossberg and Per-Olof Söderberg will not take part in the decision regarding the recommendation. Background and motive Ratos has been an active owner in Dahl since 1972. From 1986 until the public offering in 1996, Ratos was the sole shareholder and it has since maintained a holding of 28 percent of the capital and voting rights. During the past ten years Dahl, through a controlled, consistently applied strategy, has been streamlined into a pure heating & sanitation wholesaler. Through a combination of organic growth and a considerable number of acquisitions, it has led the structural transformation of the Nordic market. Dahl has thereby achieved a significant position in the four Nordic countries and in the rapidly growing Polish market. Operations have also been established in Estonia. Following its market introduction in June 1996, the Dahl share was positively received by the stock market and performed strongly in relation to both the Stockholm Stock Exchange general index and in absolute terms. In 1997 Dahl's earnings declined substantially due to expenses in connection with the integration of Skoog's heating and sanitation operations, weak demand in Sweden and costs to modify its distribution system. The stock market's interest in the Dahl share dropped off and its performance in 1997 and 1998 was considerably poorer than for the Stockholm and Copenhagen stock exchanges' indexes. Since hitting a high in early 1997, the share has also trended downward in absolute terms. Despite satisfactory growth, long-term-oriented structural measures and an improvement in its earnings level, this situation has not changed. In mid-December 1998 Ratos decided to change its strategy. Ratos plans to transform itself from an investment company with primarily listed holdings to an owner-company with a significant share of unlisted companies and thereby create opportunities for a higher total return for its shareholders. As part of this strategic change, Ratos is reevaluating its current stock portfolio and future investment opportunities. Unrelated to this reevaluation process, Ratos was contacted by EQT Partners AB, which presented Ratos with a proposal to discuss Dahl's future development opportunities and how a change in ownership structure could contribute to Dahl's industrial and market development. Based on these discussions, the Boards of Directors of EQT and Ratos agreed that by combining their industrial expertise and experience they could create long-term value added and realize Dahl's profitability potential. From a European perspective, a structural transformation of the wholesale market for building materials has begun. The first step is a national concentration, where, for example, Dahl, through a consistent acquisition strategy, has carved out leading positions in well-defined geographic markets. Dahl will continue to play a prominent role in the industry's structural change, which is a prerequisite for its future competitiveness. In light of 1 Pending a proposed name change from Binnimation Stockholm AB. this, Dahl is facing significant challenges. To ensure its long-term, consistent profitability, it will require further strategic acquisitions and investments in distribution and IT systems, which could weigh down earnings in both the short and medium term. In addition, it will need a constant, consistent focus on improving cost efficiency in an industry distinguished by moderate growth and considerable price competition. In the opinion of EQT and Ratos, this strategy will be difficult for Dahl to implement as a listed company. Its successful implementation will require that Dahl can concentrate its energies and work free from distraction, and that its owners accept sacrifices in terms of earnings in a short-term perspective. DIAB is intended to have a Board of Directors consisting of six members, three of whom will be appointed by each party. The Chairman will be appointed cooperatively by EQT and Ratos. A shareholder agreement will stipulate how significant issues will be handled. EQT and Ratos intend to work together as catalysts in the transformation work described above. In a similar way, EQT Scandinavia I shares ownership with the former principal owners of several of its portfolio companies, including Sabroe Refrigeration in Denmark, Duni in Sweden and Perlos in Finland. Experience from these companies' development with the proposed ownership model has been very positive. By cooperating with Dahl's management, EQT and Ratos intend to serve as active owners and with a long-term perspective consolidate and develop Dahl's market- leading position in an industrially sound manner. EQT and Ratos intend to offer a group of senior executives, among them President Per-Olof Söderberg, an ownership interest in the new company. Management's participation is crucial and, in the opinion of EQT and Ratos, requires shared objectives and a plan of action that is solidified through co-ownership. The offer Shareholders in Dahl are being offered to tender their shares in Dahl for SEK 120 in cash per share. No commissions will be charged. The conditions for implementation of the offer are stated below. The total value of the offer is SEK 2,496 million. The shares in Dahl are listed on the A-list of the Stockholm Stock Exchange and on the Copenhagen Stock Exchange. The latest price paid on February 5, 1999, the last trading day before trading in the Dahl share was halted on the Stockholm Stock Exchange, was SEK 88.50 per share. As a result, the offer represents a premium of 36 percent in relation to the latest price paid on February 5, 1999. Compared with the average closing price during the last 30 trading days before trading was halted in Stockholm, the premium is 47 percent. Conditions of the offer DIAB's offer applies under the following conditions: that it is accepted to such an extent that DIAB becomes the owner of more than 90 percent of the capital and voting rights in Dahl. However, DIAB retains the right to implement the offer at a lower level of acceptance; that all the Swedish and international authorizations and approvals, including those from the relevant competition authorities, that are necessary for the offer and for the proposed acquisition of Dahl are obtained on terms which, in DIAB's opinion, do not significantly impact the acquisition; and that the acquisition, before an announcement is made whether the offer is being implemented, has not, in DIAB's opinion, been rendered completely or partly impossible or significantly obstructed due to legislation, legal rulings, the decision of government authorities or their equivalent in Sweden or elsewhere that exist or are anticipated at the time an assessment is made, or by other circumstances beyond DIAB's control. Preliminary timetable A prospectus is scheduled to be sent to shareholders in Dahl around February 22, 1999. The acceptance period is planned between February 23 and March 22, 1999. If DIAB announces that the offer will be implemented around March 24, 1999, the cash settlement is expected to be paid out on March 31, 1999. DIAB retains the right to extend the acceptance period as well as postpone until a later date the payment of the proceeds. D. Carnegie AB is the adviser to DIAB, EQT and Ratos in connection with the offer. Stockholm, February 11, 1999 Dahl Intressenter AB (pending a proposed name change from Binnimation Stockholm AB) The Board of Directors For further information, please contact: Arne Karlsson, President of Ratos, phone +46-8-700 17 00 Lars Ramqvist, EQT Scandinavia BV, phone +46-8-778 43 02 Conni Jonsson, EQT Partners AB, adviser to EQT Scandinavia BV, phone +46-8-440 53 02 Enclosures EQT in brief EQT Scandinavia BV was established in the spring of 1998 by, among others, Investor AB and the U.S. private equity company AEA to invest in medium-sized companies in the Nordic countries. With its network of contacts, industrial and financial expertise, and capital, EQT Scandinavia BV works in close cooperation with the managements of the companies it acquires to develop and realize their earnings potential. EQT Scandinavia BV has attracted a great deal of interest among investors. The company's fund has attracted SEK 5.7 billion in risk capital. To date investors in EQT Scandinavia I (formerly Scandinavian Equity Partners Ltd) and EQT Scandinavia II have invested over SEK 3 billion in the following companies: Brukens Nordic AB, Sabroe Refrigeration A/S, Orrefors Kosta Boda AB (Royal Scandinavia A/S), Perlos Oy, Duni AB, FlexLink AB, Struers A/S, TAC AB, StjärnTV AB, Ballingslöv AB, Vaasan Baking Oy and Stenqvist AB. The Board of Directors of EQT Scandinavia BV, which manages the fund's investments, consists of Chairman Lars Ramqvist, Jacob Wallenberg, Claes Dahlbäck, Massimo Rossi, Vincent Mai, Börje Ekholm and Claus Moller. EQT Partners AB acts as the investment adviser to EQT Scandinavia I and II and EQT Denmark. Ratos in brief Ratos is an owner-company whose mission is to generate the highest possible return for its shareholders over time through the professional, active and responsible exercise of its ownership role in a number of selected companies and investment situations where Ratos creates a unique investment opportunity for the stock market's players. Value-added is created in connection with the acquisition, development and sale of companies. As of February 5, 1999, Ratos had a net asset value of SEK 7.1 billion, consisting of Active Holdings and Asset Management. In addition to Dahl, Active Holdings include Esselte, PriFast, Scandic Hotels, ACE, Capona, Telelogic, Telia Overseas and TV8. ------------------------------------------------------------ Please visit http://www.bit.se for further information The following files are available for download: http://www.bit.se/bitonline/1999/02/11/19990211BIT00020/bit0001.doc http://www.bit.se/bitonline/1999/02/11/19990211BIT00020/bit0002.pdf