HKScan Corporation STOCK EXCHANGE RELEASE 9 December 2010, at 13.40
HKSCAN BOARD HAS DECIDED ON A SHARE ISSUE DIRECTED TO THE SHAREHOLDERS OF ROSE POULTRY HKScan Corporation (”HKScan”) announced on November 29, 2010 that the leading Danish poultry company Rose Poultry A/S (“Rose Poultry”) has been transferred to its ownership and that the exact number of Series A shares to be issued as part of the consideration will be calculated in accordance with the terms and conditions of the agreement concerning the acquisition of Rose Poultry and the confirmed number will be announced separately. The number of the Series A shares has now been confirmed and the Board of Directors of HKScan has today decided on a share issue directed to the shareholders of Rose Poultry - Vinderup Poultry A/S, Skovsgaard Fjerkræslagteri A/S and Hedegaard A/S - pursuant to the authorisation granted to it by the Annual General Meeting of Shareholders on April 23, 2010. The 1 000 000 Series A shares in HKScan offered to the shareholders of Rose Poultry as part of the purchase price have today been subscribed. The subscription price was EUR 8.00 per Series A share and it is paid in shares of Rose Poultry. The new Series A shares now issued entitle to the same shareholder rights as the existing Series A shares. The final purchase price of all shares in Rose Poultry was EUR 23.9 million. The purchase price consisted of a cash payment of EUR 15.9 million and of 1 000 000 HKScan Series A shares. In connection with the transaction HKScan further assumed liability for the interest bearing net debt of Rose Poultry the amount of which has been specified as approximately EUR 45 million. The number of Series A shares issued in the share issue represents approximately 2.02 percent of the number of all registered HKScan Series A shares and approximately 0.63 percent of votes carried by all the company's shares after the share issue has been effected. The terms and conditions of the share issue are enclosed herewith. The share issue directed to the shareholders of Rose Poultry will result in the number of Series A shares in HKScan rising from the current 48 626 522 to 49 626 522. The share capital will not be increased as the subscription price shall be recorded as a whole into the reserve of invested unrestricted equity. The tentative date for entry in the Trade Register of the new Series A shares is December 17, 2010. The company will seek to have the share issue listed and admitted to trading on the main list of Nasdax OMX Helsinki Ltd together with the existing Series A shares as of December 20, 2010, subject to the restrictions set out below. The Finnish Financial Supervisory Authority has granted an exemption from the obligation to publish a prospectus in relation to the listing of the new Series A shares. The new Series A shares issued in the share issue will be subject to a lock-up arrangement. During a period of 21 months from the closing date of the acquisition (being November 29, 2010) at maximum 100 000 Series A shares can be transferred within a 30 day period to any third party other than HKScan without the consent of HKScan. HKScan Corporation Matti Perkonoja CEO Further information is available from: CEO Matti Perkonoja, HKScan Corporation: Please leave any messages for him to call with Marjukka Hujanen on +358 (0)10 570 6218. The largest poultry company in Denmark Rose Poultry produces annually more than 130 million kilos of poultry meat, which is sold under the company's own Rose brand as well as under private labels as fresh, frozen or processed products in the company's main markets in Denmark, Sweden and the UK. Rose Poultry has three production facilities in Denmark and the company employs approximately 1 000 people. HKScan is one of the leading food companies in northern Europe with home markets in Finland, Sweden, Denmark, the Baltic countries and Poland. HKScan manufactures, sells and markets pork and beef, poultry products, processed meats and convenience foods under several well-known local brand names. Its customers are retail, the HoReCa sector, industry and export customers. HKScan is active in nine countries and has some 11 000 employees. It had net sales of EUR 2.1 billion in 2009. DISTRIBUTION: Nasdaq OMX, Helsinki Main media www.hkscan.com APPENDIX - TERMS AND CONDITIONS OF THE DIRECTED SHARES ISSUE The Board of Directors of HKScan Corporation ("HKScan") have on December 9, 2010 decided on a directed share issue pursuant to the authorisation granted to it by the Annual General Meeting of Shareholders on April 23, 2010 in accordance with, and subject to, the following terms and conditions: 1.1 New shares A total of 1 000 000 new HKScan's Series A shares ("Shares") shall be offered for subscription. The Shares represent approximately 2.06% of all the Series A shares and 0.64% of the voting rights of all the shares of the company registered at the time of the decision. 1.2 Subscription rights The Shares shall be offered, deviating from the shareholders' pre-emptive right of subscription set out in the Companies Act, for subscription to the shareholders of Rose Poultry A/S ("Target Company") - Vinderup Poultry A/S, Skovsgaard Fjerkræslagteri A/S and Hedegaard A/S - in accordance with the terms and conditions of the relevant share purchase agreement. The pre-emptive subscription rights of the shareholders set out in the Companies Act are being deviated from due to fact that the share issue relates to an acquisition between the company and the subscribers, where the company acquires the capital stock of the Target Company. The capital stock of the Target Company has been agreed to be acquired partly against cash contribution and partly by issuing the company´s new Series A shares as consideration. The proportion of the purchase price payable with the new Series A shares corresponds to the above mentioned 1 000 000 new Shares. There are thus weighty financial reasons from the Company's perspective for deviating from the pre-emptive subscription rights of the shareholders as referred to in Chapter 9 Section 4 of the Finnish Companies Act 1.3 Subscription price The subscription price is EUR 8.00 per Share, thus the total subscription price is EUR 8 000 000. The subscription price shall be recorded as a whole into the reserve of invested unrestricted equity. The subscription price is based on the agreement between the company and the subscribers. The subscription price is agreed between the parties in connection with the overall arrangement where both the cash consideration and the share consideration, to which the valuation of contribution in kind affects, have been taken into account. The Board of Directors has estimated that the subscription price per Share is in the interest of the company and its shareholders. 1.4 Payment of the subscription price The subscription price for the Shares will be paid by means of contribution in kind, which consists of the capital stock of the Target Company. Separate calculations have been prepared on the valuation of the contribution in kind used for the payment of the subscription price for the Shares. An account of the contribution in kind as set out in the Chapter 9 Section 12 Subsection 2 of the Finnish Companies Act has been prepared. The Shares shall be paid in connection with the subscription of the Shares. 1.5 Subscription of Shares, approval of the subscriptions and the expiration of the share issue The Shares shall be subscribed for on a separate subscription list by December 31, 2010. The subscription is binding and irrevocable on the subscribers. The company will approve all subscriptions made in accordance with the terms and conditions of the share issue. The Board of Directors is entitled to decide to accept or reject the decided share issue in its entirety or in part. 1.6 Conditionality The share issue is conditional and subject to the fulfillment of the conditions stated in the separate share purchase agreement signed between the company and the subscribers. Further, the share issue resolution is conditional and subject to the respective parties to the Pledge Agreement and Lock-Up Agreement having executed the said agreements as has been determined in more detail in the Closing Memorandum of the transaction. 1.7 Registration of Shares and the application for admission to public trading The subscribed and fully paid Shares shall be notified for registration to the Trade Register without delay after the Shares have been fully paid and subscribed for. After the registration, the Shares shall be included in the book-entry system. The Shares shall be combined with the share class being traded in the book-entry system and shall be sought to be admitted to listing and trading on the main list of Nasdaq OMX Helsinki Ltd along with the company´s other publicly traded shares after the Shares have been entered into the Trade Register. The Financial Supervisory Authority has granted an exemption from the obligation to publish a prospectus regarding listing of the Shares. 1.8 Shareholder rights A right to dividend as well as other shareholder rights attached to the Shares shall commence when the Shares are registered into the Trade Register and in the company's shareholder register. 1.9 Other matters The Board of Directors of the company shall have the right to decide on other matters relating to the share issue and possible technical corrections.