Tietoenator Corporation Stock Exchange Bulletin

TIETOENATOR CORPORATION STOCK EXCHANGE BULLETIN 15 MAY 2000 9.30 AM 1 (7) TietoEnator makes an offer for outstanding shares in Entra. The objective is that Entra shall become the leading European supplier of IT solutions for the financial sector The Board of Directors of TietoEnator Corporation ("TietoEnator") has decided to make a public offer (the"Offer") to the shareholders in Entra Data AB (publ) ("Entra") regarding all outstanding shares in Entra. Entra is currently a subsidiary of TietoEnator, which holds 55.7 percent of the share capital and 50.0 percent of the voting rights in the company. Under the terms of the Offer, 6 newly issued shares in TietoEnator are being offered for every 7 shares in Entra of Series A, and 15 newly issued TietoEnator shares are being offered for every 22 preferential shares in Entra. The Offer represents a premium of approximately 23 percent with respect to the last prices paid for Entra Series A shares 1 and TietoEnator shares1 on May 12, 2000, and a premium of approximately 40 percent with respect to the average last prices paid for Entra Series A shares and TietoEnator shares over the past 30 trading days. 1 All references to share prices in this press release refer to the prices of the companies' shares on the OM Stockholm Exchange. The Board of Directors of Entra considers an acquisition of the outstanding shares in Entra as a natural development of the company's current ownership structure and an industrially favorable solution in a strategic perspective. In view of the fact that Entra is a subsidiary of TietoEnator, and that Entra Board members Matti Lehti, Seppo Haapalainen and Veli Pohjolainen, who were appointed by TietoEnator, are participating in the Offer on the purchaser side, the Board will commission a fairness opinion of the Offer before submitting its recommendation to the shareholders in Entra. The incorporation of Entra as a fully integrated member of the TietoEnator Group will make it possible to further focus on financial solutions and Internet-based solutions. It will also accelerate TietoEnator's international growth in these areas. Entra's operations in the Internet and new media will also strengthen TietoEnator's range of competitive products and services in this rapidly growing sector. Entra e-finance Solutions will become a strategically important part of TietoEnator Finance Sector and will have a leading role in the international expansion of TietoEnator Finance Sector's product-based business. e-finance Partner will be focusing on supplying financial services for major clients in northern Europe and is expected to continue to have a strong growth. e-finance Partner will operate as an independent business area of TietoEnator Finance Sector. Background and motives Since February 3, 1999, when parts of the finance sector operations of Tieto (the present TietoEnator) were merged with Entra, TietoEnator has been the principal owner of Entra. The merger was effected through Entra's acquisition of parts of Tieto's operations in banking, finance and insurance, for payment in the form of newly issued shares in Entra corresponding to 55.7 percent of the share capital and 50.0 percent of the votes after the merger. After the merger Entra is the leading IT-company in the banking and finance sector on the Nordic market. The Offer is a natural result of TietoEnator's current strategy of focusing on growth in selected areas. The acquisition of Entra also fits TietoEnator's strategy of acquiring companies with operations in Europe and companies that can strengthen TietoEnator's expertise and product range in new media and the Internet. Apart from its operations in the service of the financial sector, conducted through the subsidiary Entra, TietoEnator is also a direct supplier of IT services to banks and other financial players. These operations are conducted within the Finance Sector business area ("TEFS"), which also includes Entra as a subsidiary. Both Entra and TEFS's other operations have the strategy of strengthening their presence in their home market of the Nordic countries and expanding in Europe within certain selected segments. This has created increased risk of conflicts of interest between the companies' operations. This risk of conflicts of interest was aggravated by Entra expanding its operations into other industries outside the financial sector. It is a trend in the financial sector that players seek to establish cooperation with a small number of strong IT partners that can deliver comprehensive solutions and support their expansion in the Nordic region and the rest of Europe. As a fully integrated part of TEFS, Entra will have the financial strength necessary to meet customer requirements and conduct international expansion. Becoming an acknowledged supplier of IT services to the financial sector requires considerable resources, to develop products and services such as electronic Internet-based payment and information solutions, as well as outsourcing capacity. Full integration of Entra with TEFS will increase the companies' resources for developing new products and services for the financial sector, making the entire TEFS and Entra more competitive. TietoEnator's acquisition of all outstanding shares in Entra will bring the operations of both companies under one management, resulting in increased focus and better conditions for ongoing international growth. At the same time, Entra's shareholders are being offered more liquid shares in a company of improved financial strength. Entra is currently organized as two business areas - Entra e-finance Solutions and Entra e-finance Partner. Entra e-finance Solutions and the Entra Group function will be organized as a separate business area within TEFS, and serve as the leading edge of TEFS's international expansion. Entra e-finance Partner consists mainly of operations within Finance Sector that Entra acquired from Tieto (February 1999) and Enator (December 1999). Entra e-finance Partner will continue to operate as an independent business area within TEFS. Management and other employees of Entra have successfully developed the company into the leading supplier of Internet-based solutions within the Nordic financial sector. One motive for acquiring the outstanding shares in Entra is to better exploit Entra's vast expertise in the financial sector as a basis for international expansion. TietoEnator intends to supply Entra's management and other employees with the resources they need to continue to develop the operations into the leading European supplier of financial solutions and Internet-based solutions to banks, other financial institutions and insurance companies. Following the acquisition, TietoEnator also intends to offer Entra's management and other employees share options on TietoEnator shares and other incentive programs. -"Since February 1999, when we merged parts of our operations with Entra, the company has been a key strategic component in the development of TietoEnator Finance Sector. Our aim with the present offering to acquire all outstanding shares in Entra is to create the conditions under which Entra, as a part of TietoEnator , will develop to become the leading European supplier of IT solutions for the financial sector", says Matti Lehti, President and CEO of TietoEnator. -"The merger places the two Entra divisions in a better position to focus on their offerings. It will also enable us to implement our international expansion more rapidly, by positioning us better to undertake major acquisitions. Moreover, it will help us project a clearer image to our market, which increasingly operates on an international basis", says Bo Nordlander, President and CEO of Entra. The Offer The Board of Directors of TietoEnator has decided to make a public offer to the shareholders of Entra to acquire all outstanding shares in Entra. The Offer is as follows: For every 7 shares in Entra of Series A, 6 newly issued TietoEnator shares are offered. For every 22 preferential shares1 in Entra, 15 newly issued TietoEnator shares are offered. 1 All 128,100 preferential shares in Entra are owned by Stiftelsen Entra Data. TietoEnator shares are listed on the official list at the HEX Helsinki Exchange and on the A-list at the OM Stockholm Exchange. Entra shares are listed on the O-list at the OM Stockholm Exchange. No commission will be charged. The newly issued TietoEnator shares entitle to dividends as from the financial year 2000. Conditions for the Offer The Offer is made conditional on the following: that the Offer is accepted to the degree that TietoEnator becomes the owner of more than 90 percent of the total number of shares and more than 90 percent of the votes of the total number of votes in Entra. However, TietoEnator reserves the right to implement the Offer even if it is accepted to a lesser degree. that the acquisition, prior to a public announcement that the Offer is being implemented, in TietoEnator's opinion, is not rendered partly or wholly impossible or significantly impeded as a result of legislation, a court ruling, the decision of a public authority or a comparable circumstance in Sweden or in another country that is in effect or may be anticipated at the time such judgement is made, or by any other circumstance beyond TietoEnator's control. Premium and value of the Offer The total value of the Offer amounts to approximately SEK 2.4 billion based on the last price paid for TietoEnator. Based on the average last prices paid for Entra's A-share and TietoEnator's share during the period March 29 - May 12, 2000 (the last 30 trading days prior to the announcement of the Offer), of SEK 276 and 452 respectively, the bid premium amounts to approximately 40 percent. Based on the last prices paid for Entra's A-share and TietoEnator's share on May 12, 2000, the last trading day prior to the announcement of the Offer, of SEK 304 and 435 respectively, the bid premium amounts to approximately 23 percent. The market value of the preferential shares has been determined based on the terms for the preferential shares, where the last paid price for the Entra Series A share, SEK 304 on May 12, 2000, has been used as the share price for the relevant period of measurement. The bid premium amounts to approximately 25 percent based on this calculated market value. Statement from the Board of Directors of Entra The Board of Directors of Entra considers an acquisition of the outstanding shares in Entra as a natural development of the company's current ownership structure and an industrially favorable solution in a strategic perspective. In view of the fact that Entra is a subsidiary of TietoEnator, and that Entra Board members Matti Lehti, Seppo Haapalainen and Veli Pohjolainen, who were appointed by TietoEnator, are participating in the Offer on the purchaser side, the Board will commission a fairness opinion of the Offer before submitting its recommendation to the shareholders in Entra. Effects of the acquisition and pro forma financial data Currently TietoEnator owns 55.7 percent of the capital and 50.0 percent of the votes in Entra. Entra is consolidated in TietoEnator's accounts. The immediate financial effect for TietoEnator is that Entra no longer will be reported as a minority shareholding after the acquisition. In 1999, Entra had total revenue of SEK 693.9m and net profit of SEK 53.2m. Entra's minority interest in TietoEnator's balance sheet as of March 31, 2000, was accounted to EUR 10.4m (SEK 86.1m 1). TietoEnator Finance Sector's revenue, including the joint venture companies and Entra, amounted to EUR 178m (SEK 1,563m 2) for the financial year 1999 and profit before tax and goodwill depreciation amounted to MEUR 18 (MSEK 158 .2). The number of employees in TEFS was 1,490 at the end of 1999. The acquisition of outstanding shares in Entra will not have an effect on the figures above concerning TEFS since Entra is already consolidated in TietoEnator's accounts. According to present Finnish accounting practice, the acquisition of shares by exchange of shares in Entra through the Offer will not create any goodwill in TietoEnator's accounts. In 1999, TietoEnator's earnings per share amounted to EUR 0.90 (SEK 7.90 .2) before exercise of outstanding options. Given full acceptance of the Offer, the acquisition of Entra would have decreased TietoEnator's earnings per share pro forma to EUR 0.87 (SEK 7.63 .2) before exercise of outstanding options. Shareholders' equity in TietoEnator amounted to MEUR 381 (MSEK 3,156 .1) as of March 31, 2000. Given full acceptance of the Offer, the acquisition of Entra will increase TietoEnator's shareholders' equity to MEUR 391 (MSEK 3,238 .1) as of March 31, 2000. 1 Conversion rate SEK/Euro 8.2825 as of March 31, 2000. 2 Average conversion rate SEK/Euro 8.77988 during 1999. Number of shares Entra common shares may be issued in two series: Series A shares, each entitling the holder to one vote, and Series B shares, each entitling the holder to 1/10 vote. TietoEnator holds 6,384,970 Entra Series A shares and 1,899,408 Entra Series B shares, and is the only holder of Entra Series B shares. Entra's articles of association contain a stipulation whereby holders of Series B shares, in conjunction with a public offer regarding all or some Entra shares, may request conversion of Series B shares to Series A shares. In conjunction with the present Offer, and provided it is sufficiently accepted, TietoEnator intends to request conversion of its B shares. The acquisition will be financed by newly issued shares in TietoEnator. The new issue, waiving the preferential rights of existing shareholders, is being made decided in accordance with the authorisation given to TietoEnator's Board of Directors by the Annual General Meeting on March 29, 2000. The number of registered shares in TietoEnator amounts to approximately 77.1 million before the acquisition. As a result of the acquisition of Entra approximately 5.6 million shares will be added given full acceptance of the Offer. After the acquisition the number of registered shares in TietoEnator will amount to approximately 82.7 million. The number of registered shares in TietoEnator after full dilution of shares, with consideration of existing option programs given full acceptance of the Offer, will amount to approximately 92.6 million. Preliminary time table A prospectus is expected to be distributed to the shareholders in Entra on or about May 29, 2000. The acceptance period for the Offer is expected to be from May 30 to June 22, 2000. On condition that the Offer is completed, settlement is expected to begin on or about July 3, 2000. TietoEnator reserves the right to prolong the acceptance period as well as postpone the time for settlement. Short description of Entra Entra develops and provides software solutions and accompanying consulting services to finance markets primarily in the Nordic region. Entra has approximately 750 employees and the operations are divided into two divisions; e-finance Partner and e-finance Solutions. Entra's main customer categories consist of banks, insurance companies and other organizations within the financial sector and financial functions within companies. In the financial year 1999, Entra had total sales of SEK 693.9m and net profit of SEK 53.2m. For the period January 1 - March 31, 2000 Entra's sales and net profit amounted to SEK 185.8m and SEK 9.0m respectively. Entra's shareholders' equity as of March 31, 2000, amounted to SEK 196.0m. The market value for Entra at the OM Stockholm Exchange was approximately SEK 4.5 billion as of May 12, 2000. Entra released its interim report for the period January 1 - March 31, 2000 on April 27, 2000. Short description of TietoEnator TietoEnator is a leading European provider of high-value-added IT services. The Group specializes in developing and managing its customer's business operations in the emerging Network and Information Society. TietoEnator aims to be a strategic IT partner to its customers. This requires focusing on businesses in which the company can achieve superior expertise and, in this way, offer significant added value to its customers. TietoEnator's services are consulting, development and integration of IT systems, operation and network management and software products. The scope of services covers everything from the supply of single information systems to taking responsibility for a customer's entire IT operation. The group has approximately 9,800 employees. In 1999, TietoEnator had total sales of EUR 1,229.1m (SEK 10,791.4m 1) and profit for the period of EUR 69.1m (SEK 606.7m 1). TietoEnator released its interim report for the period January 1 - March 31, 2000 on April 27, 2000. 1 Average conversion rate SEK/Euro 8.77988 during 1999. Espoo, May 15, 2000 TietoEnator Corporation The Board of Directors For further information contact: Eric Österberg, Senior Vice President, Corporate Communications, TietoEnator, phone +46 8 632 1426, mobile +46 70 590 0599 Veli Pohjolainen, Senior Executive Vice President, Finance Sector, TietoEnator, phone +358 9 8626 2233 Bo Nordlander, President and CEO, Entra, mobile +46 709 790 759 Advisor Alfred Berg is advisor to TietoEnator in connection with the Offer. TIETOENATOR CORPORATION DISTRIBUTION Helsinki Exchanges Stockholm Stock Exchange Principal Media This press release may not be released or distributed in the U.S., Canada, Japan or Australia. The offer is not being made to persons whose participation requires additional prospectus information, registration or other measures than those in accordance with Finnish or Swedish law. ------------------------------------------------------------ Please visit http://www.bit.se for further information The following files are available for download: http://www.bit.se/bitonline/2000/05/15/20000515BIT00070/bit0001.doc http://www.bit.se/bitonline/2000/05/15/20000515BIT00070/bit0002.pdf