Thomson Reuters acquires majority interest in Pagero, increases previously announced offer price to SEK 50 per share and declares the cash offer unconditional

The Offer is not being made, and this press release may not be distributed, directly or indirectly in or into, nor will any tender of shares be accepted from or on behalf of holders in Australia, Belarus, Canada, Hong Kong, India, Japan, New Zealand, Russia, Singapore, South Africa, Switzerland or any other jurisdiction in which the making of the Offer, the distribution of this press release or the acceptance of any tender of shares would contravene applicable laws or regulations or require further offer documents, filings or other measures in addition to those required under Swedish law (including the Takeover-rules). Shareholders in the United States should also refer to the section titled "Special notice to the shareholders in the United States" at the end of this press release.

On 11 January 2024, Thomson Reuters Corporation, through its wholly-owned subsidiary Thomson Reuters Finance[1] (“Thomson Reuters”), announced a recommended public cash offer to acquire all shares in Pagero Group AB (publ) (“Pagero”) for SEK 40 in cash per share (the “Offer”). Today, Thomson Reuters announces the acquisition of approx. 53.81 per cent of the shares and votes in Pagero from key shareholders, including Summa Equity, Pagero's CEO Bengt Nilsson, as well as several members of the management team and employees, making Thomson Reuters the majority shareholder in Pagero. Reuters also increases the price in the Offer to SEK 50 per share and declares the Offer unconditional (the “Revised Offer”). The independent bid committee of Pagero's board of directors unanimously recommends all shareholders in Pagero to accept the Revised Offer.

The Revised Offer in summary

• Thomson Reuters increases the price of its Offer from SEK 40 to SEK 50 in cash per share, corresponding to a total value for all shares in Pagero of approximately SEK 8.1 billion.[2]
• Since the announcement of the Offer, Thomson Reuters acquired 86,720,670 shares in Pagero from inter alia Summa Equity and Pagero’s CEO Bengt Nilsson, equal to approx. 60 per cent of all shares and all votes in Pagero.
• Thomson Reuters waives the condition that the Offer shall be accepted to such an extent that Thomson Reuters becomes the owner of more than 90 per cent of the shares in Pagero (on a fully diluted basis), declaring the Offer unconditional.
• The independent bid committee of Pagero's board today unanimously recommends all shareholders in Pagero to accept the Revised Offer.
• The price offered for the shares in the Revised Offer represents a premium of:[3]
  • 11.1 per cent compared to the public cash offer of SEK 45 from Avalara[4] which was announced on 12 January 2024;
  • 38.9 per cent compared to the public cash offer from SEK 36 from Vertex[5] which was announced on 13 December 2023;
  • 145.9 per cent compared to the volume-weighted average trading price for Pagero's shares on Nasdaq First North Growth Market during the 30 latest trading days prior to the announcement of Vertex’s offer on 13 December 2023 (34.2 per cent compared to the volume-weighted average trading price during the 30 latest trading days up to and including 12 January 2024);
  • 174.9 per cent compared to the volume-weighted average trading price for Pagero's shares on Nasdaq First North Growth Market during the 90 latest trading days prior to the announcement of Vertex’s offer on 13 December 2023 (43.8 per cent compared to the volume-weighted average trading price during the 90 latest trading days up to and including 12 January 2024); and
  • -0.4 per cent compared to the closing price of SEK 50.2 for Pagero's shares on Nasdaq First North Growth Market on 12 January 2024, which was the last trading day prior to the announcement of the Revised Offer.

Steve Hasker, President and CEO of Thomson Reuters Corporation, comments on the Revised Offer:

"Since the announcement of our initial offer for Pagero on 11 January, following constructive discussions with Bengt Nilsson, Summa Equity and other key shareholders of Pagero, we are pleased to have reached an agreement for them to sell their shares to Thomson Reuters – making us the majority shareholder in Pagero at 53.81 per cent. This validates Thomson Reuters as the best home for Pagero and supports our shared vision to provide customers with automated, secure, and compliant tax solutions.” Said Steve Hasker, CEO and President, Thomson Reuters Corporation.

“Against this background, we are confident in our revised and unconditional offer of SEK 50 per share to all remaining shareholders of Pagero, representing an increase of 25 per cent compared to our initial offer. We believe our revised offer is highly compelling for Pagero’s shareholders, confirmed by the unanimous recommendation from the independent bid committee. We look forward to closing out our offer and working together with the talented team at Pagero."

The Revised Offer

Consideration

On 11 January 2024, Thomson Reuters announced a recommended public offer to the shareholders of Pagero to acquire all shares in Pagero at a price of SEK 40 in cash per share. The board of directors of Thomson Reuters Finance has resolved to increase the price in the Offer to SEK 50 in cash per share.

Shareholders who have already tendered their shares at SEK 40 in cash per share will automatically benefit from the increased price of SEK 50 in cash per share without taking any further action.

In the event that Pagero pays dividends or makes any other value transfer to the shareholders of Pagero, for which the record date occurs before settlement of the Revised Offer, the cash consideration of the Revised Offer will be reduced accordingly.

Premiums

The price offered for the shares in the Revised Offer represents a premium of:[6]

• 11.1 per cent compared to the public cash offer of SEK 45 from Avalara which was announced on 12 January 2024;
• 38.9 per cent compared to the public cash offer from SEK 36 from Vertex which was announced on 13 December 2023;
• 145.9 per cent compared to the volume-weighted average trading price for Pagero's shares on Nasdaq First North Growth Market during the 30 latest trading days prior to the announcement of Vertex’s offer on 13 December 2023 (34.2 per cent compared to the volume-weighted average trading price during the 30 latest trading days up to and including 12 January 2024);
• 174.9 per cent compared to the volume-weighted average trading price for Pagero's shares on Nasdaq First North Growth Market during the 90 latest trading days prior to the announcement of Vertex’s offer on 13 December 2023 (43.8 per cent compared to the volume-weighted average trading price during the 90 latest trading days up to and including 12 January 2024); and
• -0.4 per cent compared to the closing price of SEK 50.2 for Pagero's shares on Nasdaq First North Growth Market on 12 January 2024, which was the last trading day prior to the announcement of the Revised Offer.

Total Value of the Revised Offer

The total value of the Revised Offer, based on all outstanding 161,167,486 outstanding shares in Pagero, amounts to approximately SEK 8.1 billion.

Waiving of the Offer's conditions

Thomson Reuters has declared the Offer unconditional, meaning that the conditions for completion of the Offer, as set out in the Offer Document in the section ''Conditions for completion of the Offer'', have ceased to apply to the Offer. Thomson Reuters will complete the Offer, all shares tendered in the Offer will be settled upon expiry of the acceptance period for the Offer.

Timetable

The acceptance period for the Offer expires on 9 February 2024 17:00 CET. Settlement for all shares tendered in the Offer is expected to be initiated on or around 16 February 2024. Thomson Reuters reserves the right to shorten the acceptance period and set an earlier settlement date as well as to extend the acceptance period and to postpone the settlement date. Thomson Reuters will announce any changes of the acceptance period or the settlement date by press release in accordance with applicable laws and regulations.

Thomson Reuters shareholding in Pagero

As of the date of this announcement, Thomson Reuters holds and controls 86,720,670 shares and votes in Pagero, corresponding to approximately 53.81 percent of shares and votes in Pagero.

Thomson Reuters has purchased the shares where the terms of such purchases include a right to a so-called top-up payment. The terms for the top-up payment entail that the sellers who have sold their shares to Thomson Reuters, have a right to receive a top-up from Thomson Reuters, should Thomson Reuters increase its Offer in excess of SEK 50 per share or acquire shares in the Company during the period from the day of the relevant purchase up until six months after the first settlement of the Offer, for a price exceeding SEK 50 per share. Any such top-up shall be equal to the difference between the price per share which Thomson Reuters has paid for such shares in the Company and SEK 50 per share, multiplied by the number of shares that the relevant seller sold to Thomson Reuters.

Except as set out above, neither Thomson Reuters nor any of its closely related companies or closely related parties own or control any shares in Pagero, nor any financial instruments that give financial exposure equivalent to holding shares in Pagero, at the time of this announcement. Neither Thomson Reuters, nor any of its closely related companies or closely related parties, have acquired or agreed to acquire any shares, or any other financial instruments in Pagero that give financial exposure equivalent to holding shares, in Pagero at a price above the price in the Offer during the six months preceding the announcement of the Offer.

To the extent permissible under applicable law or regulations, Thomson Reuters and its affiliates may acquire, or take measures to acquire, shares in Pagero in other ways than through the Offer. Information about such acquisitions of shares, or measures to acquire shares, will be disclosed in accordance with applicable laws and regulations.

Supplement to the Offer Document

An offer document regarding the Offer was made public on 11 January 2024 (the “Offer Document”). Thomson Reuters will prepare a supplement to the Offer Document reflecting the contents of this press release. The supplement to the Offer Document is expected to be made public on this day.

Other information

If Thomson Reuters, whether in connection with the Offer or otherwise, acquires shares representing more than 90 per cent of the total number of shares in Pagero, Thomson Reuters intends to commence compulsory redemption proceedings under the Swedish Companies Act (2005:551) (Sw. aktiebolagslagen (2005:551)) to acquire all remaining shares in Pagero and promote a delisting of Pagero's shares from Nasdaq First North Growth Market.

Thomson Reuters has retained Morgan Stanley & Co. LLC as financial advisor and Linklaters as legal advisor in connection with the Offer.

Further information about the Offer is available at: https://www.business-network-offer.com/.

MEDIA
Birgitta Henriksson
Fogel & Partners
+46 708 128 639
thomsonreuters@fogelpartners.se

INVESTORS
Gary E. Bisbee, CFA
Head of Investor Relations
+1 646 540 3249
gary.bisbee@thomsonreuters.com

For administrative questions regarding the Offer, please contact your bank or nominee where you have shares registered.

This press release was submitted for publication on 15 January 2024 at 7.30 CET.

Important information

The Offer, pursuant to the terms and conditions presented in this press release, is not being made to persons whose participation in the Offer requires that an additional offer document is prepared or registration effected or that any other measures are taken in addition to those required under Swedish laws and regulations.

This press release and any related Offer documentation are not being distributed and must not be mailed or otherwise distributed or sent in or into any country in which the distribution or offering would require any such additional measures to be taken or would be in conflict with any law or regulation in such country – any such action will not be permitted or sanctioned by Thomson Reuters. Any purported acceptance of the Offer resulting directly or indirectly from a violation of these restrictions may be disregarded.

The Offer is not being and will not be made, directly or indirectly, in or into, by use of mail or any other means or instrumentality of interstate or foreign commerce of, or any facilities of a national securities exchange of Australia, Belarus, Canada, Hong Kong, India, Japan, New Zealand, Russia, Singapore, South Africa or Switzerland. This includes, but is not limited to facsimile transmission, electronic mail, telex, telephone, the Internet and other forms of electronic transmission. The Offer cannot be accepted and shares may not be tendered in the Offer by any such use, means, instrumentality or facility of, or from within Australia, Belarus, Canada, Hong Kong, India, Japan, New Zealand, Russia, Singapore, South Africa or Switzerland or by persons located or resident in Australia, Belarus, Canada, Hong Kong, India, Japan, New Zealand, Russia, Singapore, South Africa or Switzerland. Accordingly, this press release and any related Offer documentation are not being and should not be mailed or otherwise transmitted, distributed, forwarded or sent in or into Australia, Belarus, Canada, Hong Kong, India, Japan, New Zealand, Russia, Singapore, South Africa or Switzerland or to any Australian, Belarusian, Canadian, Hong Kong, Indian, Japanese, New Zealand, Russian, Singaporean, South African or Swiss person or any persons located or resident in Australia, Belarus, Canada, Hong Kong, India, Japan, New Zealand, Russia, Singapore, South Africa or Switzerland.

Any purported tender of shares in the Offer resulting directly or indirectly from a violation of these restrictions will be invalid and any purported tender of shares made by a person located in Australia, Belarus, Canada, Hong Kong, India, Japan, New Zealand, Russia, Singapore, South Africa or Switzerland or any agent, fiduciary or other intermediary acting on a non-discretionary basis for a principal giving instructions from or within Australia, Belarus, Canada, Hong Kong, India, Japan, New Zealand, Russia, Singapore, South Africa or Switzerland will be invalid and will not be accepted. Each person who holds shares and participates in the Offer will certify to not being an Australian, Belarusian, Canadian, Hong Kong, Indian, Japanese, New Zealand, Russian, Singaporean, South African or Swiss person, not being located or participating in the Offer from Australia, Belarus, Canada, Hong Kong, India, Japan, New Zealand, Russia, Singapore, South Africa or Switzerland and not acting on a nondiscretionary basis for a principal that is an Australian, Belarusian, Canadian, Hong Kong, Indian, Japanese, New Zealand, Russian, Singaporean, South African or Swiss person, or that is located in or giving order to participate in the Offer from Australia, Belarus, Canada, Hong Kong, India, Japan, New Zealand, Russia, Singapore, South Africa or Switzerland. Thomson Reuters will not deliver any consideration relating to the Offer to Australia, Canada, Hong Kong, India, Japan, New Zealand, Russia, Singapore, South Africa or Switzerland. This press release is not being, and must not be, sent to shareholders with registered addresses in Australia, Belarus, Canada, Hong Kong, India, Japan, New Zealand, Russia, Singapore, South Africa or Switzerland. Banks, brokers, dealers and other nominees holding shares for persons in Australia, Belarus, Canada, Hong Kong, India, Japan, New Zealand, Russia, Singapore, South Africa or Switzerland must not forward this press release or any other document related to the Offer to such persons.

The Offer, the information and documents contained in this press release are not being made and have not been approved by an authorised person for the purposes of section 21 of the UK Financial Services and Markets Act 2000 (the "FSMA"). Accordingly, the information and documents contained in this press release are not being distributed to, and must not be passed on to, the general public in the United Kingdom except where there is an applicable exemption. The communication of the information and documents contained in this press release is exempt from the restriction on financial promotions under section 21 of the FSMA on the basis that it is a communication by or on behalf of a body corporate which relates to a transaction to acquire day to day control of the affairs of a body corporate; or to acquire 50 per cent or more of the voting shares in a body corporate, within article 62 of the UK Financial Service and Markets Act 2000 (Financial Promotion) Order 2005.

Regardless of the previous, Thomson Reuters reserves the right to approve that the Offer is accepted by persons not present or resident in Sweden if Thomson Reuters, in its own opinion, assesses that the relevant transaction can be carried out in accordance with applicable laws and regulations.

To the extent permissible under applicable law or regulation, Thomson Reuters or its brokers may purchase, or conclude agreements to purchase, shares in Pagero, directly or indirectly, outside of the scope of the Offer, before, during or after the period in which the Offer remains open for acceptance. This also applies to other securities which are directly convertible into, exchangeable for, or exercisable for shares in Pagero, such as warrants. These purchases may be completed via a market place at market prices or outside a market place at negotiated prices. Any information on such purchases will be disclosed as required by law or regulation in Sweden.

This press release has been published in Swedish and English. In the event of any discrepancy in content between the two language versions, the Swedish version shall prevail.

Forward-looking information

Statements in this press release relating to future status and circumstances, including statements regarding future performance, growth and other projections as well as benefits of the Offer, are forward-looking statements. These statements may generally, but not always, be identified by the use of words such as "should", "expects", "believes", or similar expressions. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. Actual results may differ materially from those expressed or implied by these forward-looking statements due to many factors, many of which are outside the control of Thomson Reuters. Any such forward-looking statements speak only as of the date on which they were made and Thomson Reuters, has no obligation (and undertakes no such obligation) to update or revise any of them, whether as a result of new information, future events or otherwise, except for in accordance with applicable laws and regulations.

Special notice to the shareholders in the United States

The Offer described in this press release is made for the issued and outstanding shares of Pagero, a company incorporated under Swedish law, and is subject to Swedish disclosure and procedural requirements, which may be different from those of the United States. Holders of the shares of Pagero domiciled in the United States (“U.S. Holders”) are advised that the Pagero shares are not listed on a U.S. securities exchange and that Pagero is not subject to the periodic reporting requirements of the U.S. Securities Exchange Act of 1934, as amended (the “U.S. Exchange Act”), and is not required to, and does not, file any reports with the U.S. Securities and Exchange Commission (the “SEC”) thereunder.

The Offer is made to the U.S. Holders on the same terms and conditions as those made to all other shareholders of Pagero to whom an offer is made. Any information documents, including the offer document, will be disseminated to U.S. Holders on a basis comparable to the method pursuant to which such documents are provided to Pagero’s other shareholders.

In the United States, the Offer is subject to the requirements of the U.S. Exchange Act, and the rules and regulations promulgated thereunder, including Section 14(e) of the U.S. Exchange Act and Regulation 14E thereunder, in each case to the extent applicable, subject to the exemption provided under Rule 14e-1(d) under the U.S. Exchange Act (the “Tier II Exemption”).

The Offer will otherwise be made in compliance with the disclosure and procedural requirements of Swedish law, including with respect to withdrawal rights, the Offer timetable, notices of extensions, announcements of results, settlement procedures (including as regards to the time when payment of the consideration is rendered) and waivers of conditions, which may be different from requirements or customary practices in relation to U.S. domestic tender offers. As permitted under the Tier II Exemption, the settlement of the Offer is based on the applicable Swedish law provisions which differ from the settlement procedures customary in the United States, particularly as regards the time when payment of the consideration is rendered. The Offer, which is subject to Swedish law, is being made to the U.S. Holders in accordance with the applicable U.S. securities laws, and applicable exemptions thereunder, including the Tier II Exemption. To the extent the Offer is subject to U.S. securities laws, those laws only apply to U.S. Holders and thus will not give rise to claims on the part of any other person. The U.S. Holders should consider that the Offer Price is being paid in SEK and that no adjustment will be made based on any changes in the exchange rate.

Pagero’s financial statements and all financial information included in this press release, or any other documents relating to the Offer, have been or will be prepared in accordance with IFRS and may not be comparable to the financial statements or financial information of companies in the United States or other companies whose financial statements are prepared in accordance with U.S. generally accepted accounting principles.

It may be difficult for Pagero’s shareholders to enforce their rights and any claims they may have arising under the U.S. federal or state securities laws in connection with the Offer, since Pagero and Thomson Reuters are located in countries other than the United States, and some or all of their officers and directors may be residents of countries other than the United States. Pagero’s shareholders may not be able to sue Pagero or Thomson Reuters or their respective officers and directors in a non-U.S. court for violations of U.S. securities laws. Further, it may be difficult to compel Pagero or Thomson Reuters and/or their respective affiliates to subject themselves to the jurisdiction or judgment of a U.S. court.

To the extent permissible under applicable law or regulations and pursuant to Rule 14e-5(b) of the U.S. Exchange Act, Thomson Reuters and its affiliates or its brokers and its brokers’ affiliates (acting as agents for Thomson Reuters or its affiliates, as applicable) may from time to time and during the pendency of the Offer, and other than pursuant to the Offer, directly or indirectly purchase or arrange to purchase shares of Pagero outside the United States, or any securities that are convertible into, exchangeable for or exercisable for such shares. These purchases may occur either in the open market at prevailing prices or in private transactions at negotiated prices. To the extent required under applicable law or regulations, information about such purchases will be disclosed by means of a press release or other means reasonably calculated to inform U.S. Holders of such information to the extent that such information is made public in Pagero’s home jurisdiction. In addition, the financial advisor to Thomson Reuters may also engage in ordinary course trading activities in securities of Pagero, which may include purchases or arrangements to purchase such securities as long as such purchases or arrangements are in compliance with the applicable law.

The receipt of cash pursuant to the Offer by a U.S. Holder may be a taxable transaction for U.S. federal income tax purposes and under applicable U.S. state and local, as well as foreign and other, tax laws. Each shareholder is urged to consult an independent professional adviser regarding the tax consequences of accepting the Offer. Neither Thomson Reuters nor any of its affiliates and their respective directors, officers, employees or agents or any other person acting on their behalf in connection with the Offer shall be responsible for any tax effects or liabilities resulting from acceptance of this Offer.

NEITHER THE SEC NOR ANY U.S. STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED THE OFFER, PASSED ANY COMMENTS UPON THE MERITS OR FAIRNESS OF THE OFFER, PASSED ANY COMMENT UPON THE ADEQUACY OR ACCUARY OF THIS PRESS RELEASE OR PASSED ANY COMMENT ON WHETHER THE CONTENT IN THIS PRESS RELEASE IS CORRECT OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENCE IN THE UNITED STATES.

For purposes of this section “United States” and “U.S.” means the United States of America (its territories and possessions, all states of the Unites States of America and the District of Columbia).

U.S. Holders are encouraged to consult with their own advisors regarding the Offer.

[1]       “Thomson Reuters Finance” refers to Thomson Reuters Finance S.A., a Luxembourg société anonyme with company registration number RC B 45994 and corporate seat in Luxembourg, Luxembourg.