Press Release
August 22, 2005
APM, Inc.
Advantage Partners, Inc.
Announcing a Tender Offer for Pokka Corporation Shares
Advantage Partners, Inc. (hereafter "AP"), through Advantage Holdings, Inc. (hereafter "ADH"), currently 100% owned by an AP fund, has begun a public tender offer for Pokka Corporation (hereafter "Pokka") on August 23, 2005. ADH has received approval for this public tender offer and agreement with an intent of subscription from Pokka's Founder and Honorary Chairman Toshikage Tanida, Yasuko Tanida and Tanida Ltd. (possessing a total of approximately 8.82% of outstanding shares), President and CEO Yoshiharu Naito and Senior Managing Director Masatoshi Hori, Managing Director Sadatoshi Asai, Director Eiji Yamada, Director Akifumi Ito and Director Yukihisa Kato (possessing a total of approximately 0.54% of outstanding shares).
The offer is a part of a management buyout and ADH will, with approval from the Board of Directors at Pokka, obtain shares of, and control over, Pokka in a friendly manner. The Pokka management plans to remain in the office post the completion of this public tender offer. Board of Directors at Pokka resolved that it would support the proposed offer and each director has indicated his intention to tender shares he already owns. Pokka's management has also expressed to ADH that it would make maximum efforts in encouraging its shareholders to tender their shares.
Pokka is listed on the Tokyo Stock Exchange and the Nagoya Stock Exchange, but could be delisted from the exchanges upon the completion of the offer. Once delisted, Pokka shares will no longer be traded at securities exchanges and selling these shares in the market will likely become difficult in the future.
Pokka is the first Japanese company to produce and sell ready-to-drink canned coffee in 1972, and is now a leading brand in various beverage and food products including coffee drinks, lemon drinks and soups. Despite its strong product development capabilities, Pokka has been struggling in the increasingly competitive Japanese consumer products industry with key trends including accelerating pace of products and brand launches coupled with the ever shorter product life-cycles, and drops in retail prices caused by volume sellers such as supermarkets. Japanese coffee market has already reached maturity and is projected to shrink in the future. Facing the difficult operating environment, Pokka thinks it needs to reexamine their business portfolio and to make plans, and take action, to remain on a growth path. It also needs to restructure their brand strategies by becoming more marketing-oriented, shifting business resources to growth areas such as lemon and soup, expanding business to growing Asian markets such as China and taking measures to reduce costs by making operations more efficient. Pokka now aims at creating a system to swiftly execute these measures without being bound too much by the obligation to show short-term results while changing the management system to make individual responsibility clearer. To assist Pokka's efforts to recharge growth, AP, after consulting with Pokka management, joint-investor CITIC Provident Management Ltd and financial advisor Nikko Citigroup Ltd., made the decision to carry out this public tender offer. AP intends to utilize its broad network and consulting abilities to the fullest and support Pokka in strategic planning, operations and business management. Even after the change in ownership, Pokka's existing corporate name, product names, employment and business relationships will remain unchanged. ADH and the current management will, with the cooperation of Toshikage Tanida, effectively use the business foundation that Pokka has created over many years and plan to further increase the value of its brand.
The tender offer price for Pokka shares, 690 yen per share, represents a 23.7% premium over the average closing price at the Tokyo Stock Exchange, Inc. for the one month period ending August 19, 2005, in consideration of reduced liquidity due to the expected delisting. This price exceeds the highest price over the past one year, 656 yen. This public tender offer provides an opportunity for all of Pokka's shareholders to sell their Pokka shares for a reasonably fair price.
| Please contact the following person for inquiry. |
|---|
| Advantage Partners, Inc. Hideo Nagatsuyu, Partner Tel: 03-5157-0170 / Fax: 03-5157-0187 URL: www.advantagegroup.co.jp |
Tender Offer Bid Outline
1. Summary of Offeror
| (1)Name | : | Advantage Holdings, Inc. |
| (2)Established | : | April 11, 1968 |
| (3)Address | : | 12F Sanno Park Tower 2-11-1 Nagata-cho, Chiyoda-ku, Tokyo |
| (4)Representative | : | Richard L. Folsom, Representative |
| (5)Capital | : | 10,000,000 yen (As of August 23, 2005) |
| (An increase in capital is planned by the beginning of the settlement) | ||
| (6)Primary Shareholder and Shareholding Ratio: | ||
| General Investment Partnership Advantage Partners, Inc. MBI Fund III 100% | ||
| (7)Shares of Target Company Held: | ||
| ADH possesses 1,000 shares of the target company. | ||
2. Summary of Target Company
| (1)Name | : | Pokka Corporation |
| (2)Primary Business | : | Production and sales of beverages and food products |
| (3)Established | : | February 22, 1957 |
| (4)Address | : | 4-2-29 Sakae, Naka-ku, Nagoya, Aichi |
| (5)Representative | : | Yoshiharu Naito, President and CEO |
| (6)Capital | : | 13,647 million yen |
| (7)Primary Shareholder and Shareholding Ratio (As of March 31, 2005): | ||
| Japan Trustee Services Bank, Ltd. 7.52 % | ||
| (8)Capital Relationship with Advantage Holdings, Inc.: | ||
| ADH possesses 1,000 shares of the target company | ||
3. Shares Eligible for Tender Offer
Common Shares
4. Public Tender Offer Period
From August 23, 2005 to September 20, 2005 (29 days)
5. Tender Offer Price
690 yen per share
6. Basis for Computing Tender Offer Price
The tender offer price represents a 23.7% premium over the target company's average closing price of 558 yen for the one-month period ending August 19, 2005.
7. Number of Shares Expected to be Purchased in Tender Offer
24,004,000 shares (66.7% of outstanding shares)
If the number of shares tendered does not reach the expected number of shares in the tender offer, all of the subscribed shares will not be bought. If the total number of subscribed shares exceeds the planned number of shares in the tender offer, all the subscribed shares will be bought.
8. Changes in Share Possession due to Public Tender Offer
| Pre-Tender Offer Shares in Possession | 1,000 shares |
| (0.0% of outstanding shares) | |
| Post-Tender Offer Shares in Possession | 24,005,000 shares |
| (66.7% of outstanding shares) |
The number of post-buyout shares in possession assumes the successful buyout of the planned 24,004,000 shares to be bought-out.
9. Regarding Special Measures for Industrial Revitalization Law
AP is making a public tender offer in order to provide an opportunity for the shareholders to sell their shares in an efficient manner at a reasonably fair price. If the offeror is not able to obtain all of the shareholders' shares, it will make Pokka a wholly owned subsidiary as per described hereafter. As a result, Pokka's shares will be delisted from the exchanges.
AP intends to apply for approval of Self-Restructuring Plan or Co-Restructuring Plan (hereafter "Plan") under the Law on Special Measures for Industrial Revitalization (hereafter "Revitalization Law") by joint application with Pokka following the beginning of this public tender offer. If the Plan is approved, Pokka will conduct a cash-out merger or cash-out stock exchange under Article 12-9 of the Revitalization Law. (Share exchange, if chosen, will likely be followed by a merger) AP, based upon the Plan, intends to conduct a cash-out share exchange to render the target a wholly-owned subsidiary or merge to render it a surviving company and make cash payments in place of shares to Pokka shareholders who tendered their shares.
AP and Pokka intend to use the Special Measures for short-form share exchanges outlined in Article 12-9-4 of the Revitalization Law or the Special Measures for short-form mergers outlined in Article 12-7-2, and the Pokka's shareholders may follow legal procedures and demand that Pokka purchase their shares. There is no guarantee that the amount exchanged for these shares will be the same purchase price offered in this public tender offer.
AP plans to provide Pokka shareholders an opportunity to sell their shares and working to render Pokka a wholly-owned subsidiary when the above stated method is found difficult. AP, in possession of more than two-thirds of voting rights in Pokka, will require Pokka to call a special shareholders meeting in order to establish a parent company (hereafter "New Company"), that will receive all Pokka shares through a share transfer.
Through this share transfer, Pokka shares will be exchanged for New Company shares and the Pokka shareholders will automatically become shareholders of the New Company. The Pokka shares listed on the Tokyo Stock Exchange and the Nagoya Stock Exchange are expected to be delisted and the New Company will remain privately held. Regarding the share transfer, Pokka shareholders may follow legal procedures and demand that Pokka purchase their shares. There is no guarantee that the purchase price for these shares will be the same purchase price offered in this public tender offer.
The New Company then plans to sell all of the Pokka's shares to the tenderer and, at the same time, resolve to dissolve via liquidation. When the New Company is liquidated, the necessary expenses for liquidation and taxes owed by the New Company will be deducted from the New Company's assets and the remaining assets will be distributed in the form of cash to New Company shareholders, according to the number of shares in their possession. After receiving all of the Pokka's shares, AP will consider merging with the target.
For information regarding tax obligations involved in the transaction, shareholders are advised to consult a tax specialist.
10. Date for Public Notice of Tender Offer
August 23, 2005
11. Tender Offer Representative
Nikko Citigroup Limited
The tender offer representative assigns Nikko Cordial Securities, Inc. as sub-representative in order to consign certain clerical work to them.
12. Other Notes
The tender offer is not held, directly or indirectly, within or toward the United States of America. (hereafter "USA"). It is not being held using the USA's postal system, interstate trade or international trade methods or devices, including, but not limited to, facsimile, electronic mail, internet communication, telex and telephone. Additionally, it is not being held through the USA's securities exchange facilities. Subscriptions to this tender offer may not be made via the above methods or devices, from the above facilities or from the USA.
Documents and reports regarding this tender offer will not, and cannot, be sent to, from or distributed within the USA using postal or other methods. Subscriptions to this tender offer in violation of the above limitations, directly or indirectly, will not be accepted.
* * * * *
About Advantage Partners, Inc.
| Established | : | December 1992 |
| Representatives | : | Taisuke Sasanuma/Richard L. Folsom (Joint Representative Partners) |
| Capital | : | 48,870,000 yen |
| Headquarters | : | 12F Sanno Park Tower 2-11-1 Nagata-cho, Chiyoda-ku, Tokyo 100-6112 |
| URL | : | http://www.advantagegroup.co.jp/ |
Advantage Partners, Inc. established the first buy-out fund in Japan in 1997 and is a pioneer in private equity investment industry in Japan. The Company places great importance on supporting operational improvement and strategic planning, based upon extensive business consulting experience. Advantage Partners, Inc. has invested in 16 companies to this date.
* APM, Inc. is a general partner in the MBI Fund III. Advantage Partners, Inc. and Marubeni Corporation hold 60% and 40% of APM, Inc. shares, respectively.
