MERGER OF AAMULEHTI CORPORATION AND MTV OY TO FORM NEW MASS COMMUNICATIONS COMPANY
AAMULEHTI CORPORATION STOCK EXCHANGE BULLETIN MERGER OF AAMULEHTI CORPORATION AND MTV OY TO FORM NEW MASS COMMUNICATIONS COMPANY The Boards of Directors of Aamulehti Corporation and MTV Oy have concluded a merger agreement. According to a proposal to be put before the shareholders meetings the shares of Aamulehti Corporation will be converted into the shares of the new company on a 1:1 basis and the shares of MTV Oy on a 1:137,5 basis. The new companys shares will be listed on the Helsinki Stock Exchange. The Boards of Directors of Aamulehti Corporation and MTV Oy have today concluded a merger agreement whereby Aamulehti Corporation and MTV Oy will be merged to form a new mass communications company. The merger agreement is subject to the approvals of both companies Supervisory Boards and Shareholders meetings, and to the granting of all the official approvals and permits required by such a merger. Extraordinary shareholders meetings are scheduled to be held during the coming June. The new company formed by the merger is due to be registered in the Trade Register at the beginning of 1998. Aamulehti Corporation and MTV Oy will operate in accordance with the terms of the agreement immediately after the shareholders meetings of both companies have given their approval to the merger. Major new mass communications company The consolidated net sales of the new company to be formed by the merger will total approximately FIM 2.5 billion. It will have more than 2,600 full-time employees as well as almost 1,000 part-time delivery staff. The personnel of Aamulehti Corporation and MTV Oy will retain their existing status and terms of employment on transfer to the new company. The merger will produce a new mass communications company with strong market shares in printed and digital communications and the graphic services sector. The new company will also be a pioneer in the exploitation of new media and digital technology in its business areas. With expertise in different media at its disposal, the company will be well positioned to develop new products and services and to operate successfully against increasingly fierce international competition. Both companies have demonstrated solid financial performance in recent years. Their merger will ensure that from the outset the new company will operate with a strong balance sheet and from a position of profitability. The new diversified communications company will command strong market shares in all areas of mass communications. Both companies have made substantial investments in research and development into new media. Combining their collective expertise in this sector will offer both companies a strong competitive position in digital communications, the new media and their various applications. MTVs and the Aamulehti Groups Internet pages are the most popular in Finland measured in terms of numbr of visits. The operations of the new company will be organized into three subgroups which will be wholly owned by the listed parent company. MTV Oy will be reconstituted and be responsible for TV and radio broadcasting, Alpress Oy will be responsible for publishing, and Alprint Oy for printing and graphic services. All the existing brand names of the subsidiaries belonging to these subgroups will remain unchanged. Aamulehti Corporation and MTV Oy shares to form new companys share stock The new company will have two share series: Series I and Series II. All shares will have a par value of FIM 10 per share. The new companys Series I share will carry one vote per share and the Series II share one vote per ten shares. Of the total number of shares 43.1 % will be Series I shares and 56.9 % Series II shares. The share capital of the new company will total at most FIM 157 million. According to the terms of the merger agreement existing Aamulehti Corporation Series I and II shares of nominal value FIM 10 per share will be converted into one Series I or Series II share respectively in the new company. MTV Oys current shareholders will receive merger consideration of 59 Series I shares and 78,5 Series II shares in the new company for each existing MTV share of nominal value FIM 500. In cases where the number of MTV Oy shares forms an odd number, one half of the price of one Series II share, i.e. FIM 80 will be paid in cash from the merger consideration. The ratio of the issue to MTV Oy in these two series corresponds with the outstanding shares in Aamulehti Corporations two share series. Aamulehti Groups 20.3 % holding in MTV Oy will be declared null and void. Application for listing of the new companys shares will be made to the Helsinki Stock Exchange as soon as the company is registered in the Trade Register. If all existing shareholders of Aamulehti Corporation and MTV Oy will become also shareholders of the new company, 10 principal shareholders are Kesko Group, Marieberg Tidnings AB, Merita Bank, Nokia Corporation, Pohjola Group, Talentum, TT Group (Finnish Industry and Employers), UPM Kymmene Corporation, United Magazines Ltd and Åkerlund Fund. Conversion of bonds no later than 31 August 1997 The Aamulehti Corporation convertible bond floated in 1993 with a nominal value of FIM 128.9 million has not yet been converted into shares. If fully converted, it would have a nominal value of FIM 29.6 million, which corresponds to approximately 800,000 Series II shares. According to the bonds original terms, if the company decides to be merged with another company bondholders are entitled, before the merger takes place, to convert their bonds into shares during a period to be set by the Board of Directors but not less than one month, after which date the conversion right expires. The merger agreement specifies that holders of convertible bonds must convert these bonds into Aamulehti shares no later than by 31 August 1997, after which the conversion shall expire and bondholders shall relinquish their right. Corporate administration According to the new companys Articles of Association, which will be presented to the shareholders meetings, a Supervisory Board will be elected for the new company with 10 - 15 members. According to the Articles of Association the companys Board of Directors will have 6 - 9 members. It is proposed in the merger agreement that Mr.Björn Mattsson be elected Chairman of the Board of Directors of the new company and that Mr.Matti Packalen, President of the Aamulehti Group, be elected President of the new company and that its Executive Vice President and deputy to the President be Mr.Eero Pilkama, President of MTV Oy. Mr Pilkama will also continue as the President of the new MTV Oy. MTV and Aamulehti Group in several joint projects The Aamulehti Group and MTV Group have already collaborated in projects involving new digital communications. The MTV Group owns 28 % and Aamulehti Group 20 % in Suomen Uutisradio Oy, Finlands first national commercial radio channel, due to start up in May 1997. The two groups have also submitted a joint application to the Ministry of Transport and Communications for a permit to operate a local TV channel, Helsinki City-tv, in the Helsinki Metropolitan Area. Each group holds 45 % in Helsinki City-tv, and the remaining 10 % is owned by the Canadian company ChumCity International. MTV is Finlands leading TV channel MTVs share of TV viewing time in Finland totalled 41.7 % in 1996, which is one of the highest channel ratings throughout Europe. MTV Group commanded 20 % of the market share for media advertising in Finland in 1996. MTV3 reaches 60 % of the Finnish population daily and 90 % weekly. The MTV Groups net sales in 1996 totalled FIM 975 million (1995: MFIM 950) and its operating profit was FIM 64 (80) million. The net sales of the parent company MTV Oy in 1996 were FIM 739 million. The Groups other companies are Oy Kolmostelevisio Ab, MTV-Palvelukiinteistöt Oy, For Oy and Funny Films Oy, and two new companies starting up on 1 May 1997: MTV Viihde Oy and MTV Tuotanto Oy. The MTV Group employees about 650 people. MTV Oy is the third oldest commercial TV company in Europe. It began transmission in 1957 at the same time as Finlands other broadcasting company Yleisradio Oy. Since 1973 MTV has operated through its own channel, MTV3. Aamulehti Groups core businesses newspaper publishing and graphic services The Aamulehti Corporations core businesses are newspaper publishing and printing. It is also involved in digital communications through its local radio broadcasting interests, and in recent years the company has made substantial investments in networked media and digital communications. The Aamulehti Groups net sales in 1996 totalled FIM 1,623 million (1995: MFIM 1,433). It has over 2,000 full-time employees and 1,000 part-time newspaper delivery staff. The Group returned an operating profit of FIM 178 (122) million in 1996. The Aamulehti Groups publishing activities are concentrated in the Alpress Division. In 1996 Alpress had net sales of FIM 902 (748) million and an operating profit of FIM 78 (71) million. Alpress publishes three daily newspapers: Aamulehti, Satakunnan Kansa and Lapin Kansa, as well as Kauppalehti and Iltalehti, and 15 regional or town papers. The Aamulehti Groups printing activities are the responsibility of its Alprint Division, which operates 13 printing plants around Finland. In 1996 Alprints net sales totalled FIM 848 (778) million and its operating profit was FIM 94 (62) million. AAMULEHTI CORPORATION Ahti Martikainen Vice President, Corporate Communications Further information: Matti Packalén, President of the Aamulehti Group tel. +358 9 507 8715 Eero Pilkama, President of the MTV Group, tel. +358 9 1500400 Björn Mattsson Chairman of the Board of Directors, MTV Group tel. +358 9 1344 1209 Attachments: 1. Statements by the Presidents 2. Key financial indicators for the Groups 1992 - 1996 Distribution: Helsinki Stock Exchange
- Date: 22.4.1997, 08:00
- News type: Stock exchange release
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