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 company’s 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. MTV’s and the Aamulehti Group’s 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 company’s 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 company’s 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 Oy’s 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 Corporation’s two share series. Aamulehti Group’s 20.3 % holding in MTV Oy will be declared null and void. Application for listing of the new company’s 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 bond’s 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 company’s 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 company’s 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, Finland’s 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 Finland’s leading TV channel MTV’s 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 Group’s 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 Group’s 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 Finland’s other broadcasting company Yleisradio Oy. Since 1973 MTV has operated through its own channel, MTV3. Aamulehti Group’s core businesses newspaper publishing and graphic services The Aamulehti Corporation’s 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 Group’s 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 Group’s 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 Group’s printing activities are the responsibility of its Alprint Division, which operates 13 printing plants around Finland. In 1996 Alprint’s 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

ATTACHMENT 1: Statement by the Presidents

Matti Packalén, Aamulehti Group: The mass communications sector is experiencing major change both in Finland and internationally. Digital technology is creating new challenges and opportunities in radio and TV broadcasting, while the roles of the Internet and the networked media which exploit it are only beginning to take shape in the communications sector. The merger agreement just signed represents an answer to many open questions on the future of the mass communications sector in Finland. Aamulehti Group has special expertise in publishing and printing newspapers. As one of Europe’s oldest commercial TV channel, the MTV Group brings enviable knowhow in both programme production and media marketing. Furthermore, both MTV and the Aamulehti Group are pioneers in exploiting the potential of new media and both companies already cooperate in commercial radio broadcasting.and The merger of two strong communications players operating in different sectors will produce a media group of major significance on a European- wide scale; a company with a comprehensive range of products and services for both advertisers and end users. The new company also has sufficient resources to be an active participant in the emerging development of the communications sector and its technology, competiting on equal terms alongside international media companies. I consider the decision a good one from shareholders’ point of view. The shareholders of both MTV Oy and the Aamulehti Group will receive shares in a listed and financially stronger company in return for their present shareholdings. The new company represents a diversity of media activities which will most likely also attract the interest of international investors as well. Mr Eero Pilkama MTV Group: Digital communications in Finland is at a high level by international standards. The digitization of the telecommunications networks is now complete and the number of PC and Internet users in Finland is, relatively speaking, the highest in the world. Radio and television, one of the most important segments of the digital communications sector, is entering a new era. Decisions are currently being made in Finland on the adoption of digital technology; digital radio and television trials will in fact begin this year. A key competitive strength in the future will be preparing for and participating in the new era of digital communications. New areas and means of communication have occupied a central place in the development of the MTV Group. The merger agreement signed today enables us to commit even larger resources to such projects. Throughout its history MTV has been a significant entertainment producer in Finnish television. Since the beginning of the 1990s and the start-up of its own TV channel MTV has also succeeded in developing a leading role in televisions news broadcasting. This area will receive further development in the new company as well. The expertise of both media companies will be used in the future to produce new media solutions for Finnish advertisers. New applications of digital communications will undoubtedly be given a very substantial share of the already strong invesments committed to product development by the two parties. The merger agreement signed today signifies the listing of the new company, and at the same time of MTV, on the Helsinki Stock Exchange during favourable business conditions.


AAMULEHTI GROUP 1996 1995 1994 1993 1992 Net sales, MFIM 1,623 1,433 1,412 1,363 1,430 Operating profit/loss, MFIM 178 122 103 65 -14 % of net sales 11.0 8.5 7.3 4.8 -1.0 Profit/loss before extraordinary items, provisions and taxes, MFIM155 87 62 -21 -104 % of nets sales 9.6 6.1 4.4 -1.5 -7.3 Profit/loss before provisions and taxes, MFIM 159 116 71 -48 -217 % of net sales 9.8 8.1 5.0 -3.5 -15.2 Total assets, MFIM 1,603 1,417 1,479 1,346 1,430 Earnings per share, FIM 16.04 11.91 9.35 -3.73-17.67 Dividend per share, FIM 3.00 2.50 0.50 0 0 ROI, % 17 12 11 7 2 ROE, % 18 16 15 -7 -26 Solvency ratio, % 45 41 30 24 25 Capital expenditure, MFIM 338 109 276 73 74 % of net sales 20.8 7.6 19.5 5.4 5.2 Total personnel, average 3,029 2,562 2,827 3,185 3,659 MTV GROUP 1996 1995 1994 1993 1992 Net sales, MFIM 975 950 810 709 706 Operating profit, MFIM 64 80 53 29 23 % of net sales 6.5 8.4 6.5 4.1 3.3 Profit before extraordinary items, provisions and taxes, MFIM 80 97 63 37 31 % of net sales 9.1 10.2 7.8 5.1 4.4 Profit/loss before provisions and taxes, MFIM 80 97 63 36 31 % of net sales 9.1 9.1 7.7 5.1 4.4 Total assets, MFIM 532 491 435 374 389 Earnings per share, FIM 1,043 1,305 837 440 433 Dividend per share, FIM 250 250 165 125 100 ROI, % 24 34 25 16 15 ROE, % 18 27 20 13 17 Solvency ratio, % 67 64 57 56 49 Capital expenditure, MFIM 49 43 31 25 16 % of net sales 5.0 4.5 3.8 3.5 2.3 Total personnel, average 644 633 614 602 616
  • Date: 22.4.1997, 08:00
  • News type: Stock exchange release

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