Transcription STADA, April 10, 2017 EV00055574 Monday, April 10, 2017
Transcription, STADA, April 10, 2017, EV00055574 00:00 Announcer Welcome to the Stada conference call. This conference will be recorded. After the presentation there will be an opportunity to ask questions. 00:26 Wiedenfels Good morning ladies and gentlemen from our side as well. Thank you for taking the time to join our telephone conference. We would like to discuss our announcement today and the context of the entire process with you and outline our reasons for supporting the tender offer submitted by Bain Capital and Cinven, and we would to provide you with an overview of the next steps in this process. Afterwards Mr. Oetker and Mr. Kraft as well as myself will be happy to answer your questions. To start with, as you know, we reached a very important milestone today with the conclusion of our structured bidding process, the release of a legally binding transaction offer by Bain Capital and Cinven. As a result of thorough talks, helped by the executive board and the supervisory board with a consortia involved over the last two months, two legally binding transaction offers for a voluntary public tender offer for all outstanding shares of Stada Arzneimittel AG has now been received. Bain Capital and Cinven are offering 65.28 € plus the dividend of 72 cents per Stada share, and it was the highest price. The submission of two bids is a sign that the executive board and the supervisory board jointly conducted very intelligent and successful negotiations and that they created significantly added value for our shareholders, the company itself and also for our employees in this process. In the context of the structured bidding with the bidders, the executive board and the supervisory board also helped discussions with possible strategic partners, I think this is important to know, and the executive board and the supervisory board carefully reviewed both transaction offers and reached the conclusion that it would be in the best interest of the company and in the interest of the shareholders and other stakeholders of Stada to support the bid of Bain Capital and Cinven. The executive board, acting with the approval of the supervisory board, has decided to forego the existing standstill agreements of Bain and Cinven. Bain and Cinven have made the more financially appealing offer for our shareholders, the offer made by Bain and Cinven represents a premium of approximately 48.5%, in relation to the share price on December 9, 2016, this is the last price reached before the first specific rumors about the take‐over surfaced and a premium of approximately 19.6% on the volume weighted average share price over the last three months. It corresponds to a multiple of 13.4 on the adjusted EBITDA 2016, and 12.3 with regards to the EBITDA 2017. Thus the price is significantly higher than the trading multiples of our peer group. With the current offered total price of 66 euro per share we have created significant added amounting to approx. 750 million euros for our shareholders since the initial,informal declaration of interest of 54 euro per share was made. During the negotiations we achieved a high level of transaction certainty and secure financing of the offer, and we have ensured that the interests of minority shareholders will be protected proving a successful offer. We have negotiated a comprehensive investor agreement, in this agreement, Bain and Cinven commit themselves to strengthening our position as a globally active pharmaceutical company, supporting our growth strategy and thus contributing to a long term increase in the company’s value, if the offer is successful. As you know, we introduced our new company strategy and the future program of Stada Plus in 2016 and began to reposition our company and to more systematically tap our growth potential. Bain and Cinven are firmly convinced of Stada Plus and of the plan we implemented for long term successful future; with the expertise and financial strength they will support our efforts to rigorously continue along this path. Moreover Bain and Cinven have stated their attention to provide both financial and strategic support for possible acquisitions and to expand the product portfolio and tap new growth markets. Above all we have achieved clear negotiating successes for employees. The investor agreement we concluded secures a) the location of Stada Headquarter as well as the sites of all key business units, b) the validity of all works and wage agreements c) the company’s membership in the tariff association, d) the rights of the unions and the works councils and e) a commitment to broadly refrain from business related lay‐
offs further than those already incorporated in the current business plan. We are convinced that this is a very good result of the structured bidding process and the intense negotiations that the executive board and the supervisory board conducted together in the interest of the company. Now let me say a few words about the consortium we selected, Bain and Cinven will be reliable partners with an excellent track record, both private equity companies have proven many times in the past that they can successfully enhance companies together with employees and management, including the health care sector in particular. Cinven in the last few years has made a number of successful healthcare investments including Sebia, AMCo, Medpace and recently Synlab. Bain Capital has made more than 60 healthcare transactions within the last 28 years, i.e. successful investments in BPL and HCA. You see Stada, Bain and Cinven are pursuing a joint goal. We intend for Stada to join the leaders of our industry. We have a clearly defined plan outlining how we intend to shape our future and we will systematically and definitely carry out this plan. With Stada Plus we have defined the most important measures that will enable us to generate profitable growth in the future and to perform even better than before. Further strengthening the segments of generics and branded products, tapping the potential of existing as well as new attractive growth markets, reducing complexity in both the organization at the portfolio and significantly improving our cost basis. We are making much faster progress in the implementation of these measures than expected, our new strategy has really 2
Transcription, STADA, April 10, 2017, EV00055574 picked up speed. At the beginning of the year we have identified additional potential we will tap in the years to come and as you know as a result we announced in mid‐March that we have raised our medium‐term goals for 2019 and beyond. So this clearly shows that we are well‐positioned and have accelerated our change process to hit our targets. Together with strong partners like Bain and Cinven we could do this even faster and more comprehensively. So now what’s ahead? After the release of the transaction offer for our voluntary public tender for our firm we expect the official offer document to be published rather soon. After the offer document has been presented, the supervisory board and we the executive board are required by law to issue a recent opinion on the offer. Following their close review the executive and the supervisory board will announce whether they consider the offer to be appropriate and whether they recommend that Stada shareholders, accept or reject it. The final decision to approve or reject the offer will be left up to the owners of Stada, our shareholders. We will not know whether the bid was successful until the offer deadline has expired and all conditions of acceptance have been fulfilled. We accept the process to be finished in summer and in the meantime obviously nothing will change for our operational business activities or our employees. We at Stada have set ambitious goals and we intend to continue our work to achieve them. In conclusion we would like to stress one point. We will manage the bidding process in a professional and level‐headed manner that always focuses on the best interest of our company, its shareholders and its employees, just as we have done in the bidding process up to now. At the same time, we will remain clearly focused on our business and the implementation of our strategy, of course we will continue to transparently keep all stakeholder groups at Stada up to date about any important milestones ahead of us. So now after these preliminary remarks, Mr. Oetker, Mr. Kraft and I are very happy to answer your questions. Q AND SESSION 09:12 Alan Lyons (United First Partners) Good morning. Could you just confirm – I am sure this is yes, but could you confirm that the due diligence process is complete, that there is no further due diligence condition around the offer? Also when you expect the offer to close? 09:32 Wiedenfels I can confirm that, due diligence is finished and as said earlier, we anticipate the process to finish in summer. It depends on when the offer document goes to the supervisory authority, how long the acceptance period is and that brings us into the summer 09:54 Igor Kim (Oddo Seydler) Hello, just one question. So if I understood you correctly the working position is now secured, and are you confident that there won’t be any headwind from the working consortium and the labor unions and it is not an issue anymore? So that was my question. 10:17 Wiedenfels Well, if there was an issue, we are very confident that this offer is the best result of the bidding process and that it is a result which is as such a very good result of the negotiations. 10:47 Oliver Gleeson (Investec Bank) Hi, good morning, I have one question which is on some of the offer conditions, particularly the geographies where anti‐trust or regulatory approvals are needed. Is it fair to assume that EU and Russia filings are necessary? Are there any other sort of key geographies? 11:07 Wiedenfels Well, for the moment EU and Russia are certainly the most important. It may be possible that we have phase 1 in one or two Asian countries as well. 11:19 Oliver Gleeson (Investec Bank) Can you be any more specific, is China one of those countries? 11:22 Kraft Possibly, possibly not yet decided, we have to look into it. If there are no further questions, thank you from our side. We can close the call. If you have further questions, please feel free to ask our investor relations or public relations and thank you from our side. Good bye. 3