SES to Buy Back GE's 19.5% Stake in Exchange for Assets and Cash
SES (Paris:SESG) (LuxX:SESG) announces that it has agreed with GE
a EUR 1.2bn split-off transaction in which SES will contribute certain
assets and cash to a new company and exchange shares of that new
company for GE's entire holding of 103,149,900 shares in SES, subject
to satisfaction of certain closing conditions. As disclosed in March
2006, SES has been discussing with GE a number of options to achieve a
structured exit from its remaining shareholding.
GE will exchange its shareholding in SES for shares in a new
company, SES International Holdings, Inc. ("SIH"), comprising assets
and EUR 588 million in cash, subject to certain closing adjustments.
SES has agreed to pay an equivalent of EUR 12 for each exchanged
share(1), resulting in a total transaction value of EUR 1,238 million.
The cash amount and the transaction value may be increased by
approximately EUR 45 million depending on the closing date.
The assets of SIH will be:
The AMC-23 satellite and its related business
100% of SATLYNX
49.5% of Bowenvale (representing a 34.1% interest in AsiaSat)
19.99% of Star One
5.5% of Orbcomm
Due to the intended US tax treatment of the transaction, third
party valuations of the assets were secured.
The transaction announced today allows SES to achieve two
important business objectives: to restructure and optimise SES'
portfolio of assets following the SES NEW SKIES acquisition and to
remove the GE share overhang.
The acquisition of SES NEW SKIES in March 2006 added to the SES
fleet five 100% owned satellites over Asia, Africa and Latin America
(NSS-806, NSS-7, NSS-703, NSS-6 and NSS-5). These satellites are in
addition to the spacecraft already owned through participations in
AsiaSat and Star One, as well as the three other 100% owned assets
(AMC-12/ASTRA 4A, AMC-23 and AAP-1), which have comparable coverage
and serve similar business purposes to some of the NEW SKIES
satellites. This created an opportunity to restructure and optimise
SES' business assets and portfolio of minority participations which
led to the decision to divest from the shareholdings in AsiaSat and in
Star One as well as to dispose of the AMC-23 satellite operated over
the Pacific Ocean Region (POR).
With SES NEW SKIES generating most of its revenues in the
government and enterprise infrastructure segment, SES has also
re-evaluated the relevance of certain of its satellite end-to-end
managed service activities in the enterprise market. As a result, SES
decided to divest from SATLYNX, the group's end-to-end managed service
entity. There will now be an increased focus of the SES service
business on media and government applications.
(1) SES' shares on Euronext Paris on 13.2.07 closed at EUR 13,63
SES expects to derive significant corporate benefits from the
transaction as it removes the GE overhang which had created the
perception of a cap on the SES share price since the announcement that
GE intended to divest its interest in SES.
The transaction is expected to close by Q2 2007 subject to the
satisfaction of the closing conditions (which include, among others,
receipt of certain approvals from SES' shareholders, a tax ruling
regarding the tax treatment of the transaction for GE, and required
regulatory approvals).
An Extraordinary General Meeting will be scheduled for March 15th,
2007, in order to allow the Company to buy back all 103,149,900
C-shares, of which 85,958,250 will be canceled. As the B-shareholders
have elected to be paid in FDRs in lieu of cash, the remaining
17,191,650 C-shares will be converted into FDRs in order to pay the
B-shareholders for their 42,979,125 B-shares. As a result of the
transaction, and while maintaining the number of B-shares at 1/3 of
the total, the shareholder structure of SES will be simplified as
follows:
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Before After
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Voting Economic Voting Economic
----------------------------------------------------------------------
A-shares 338,390,620 51.09% 63.87% 355,582,270 66.67% 83.33%
----------------------------------------------------------------------
B-shares 220,770,260 33.33% 16.67% 177,791,135 33.33% 16.67%
----------------------------------------------------------------------
C-shares 103,149,900 15.57% 19.47% 0 0.00% 0.00%
----------------------------------------------------------------------
Total 662,310,780 100.00% 533,373,405 100.00%
----------------------------------------------------------------------
Total
economic 529,848,624 100.00% 426,698,724 100.00%
----------------------------------------------------------------------
----------------------------------------------------------------------
Number of
FDRs 280,361,167 42.33% 52.91% 297,552,817 55.79% 69.73%
----------------------------------------------------------------------
Number
of FDRs
held by
the B-
shareholders 0 0.00% 0.00% 17,191,650 3.22% 4.03%
----------------------------------------------------------------------
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The company may elect not to cancel a small portion of shares
which may be retained for existing employee stock-based compensation
plans.
Romain Bausch, President & CEO of SES, said: "This transaction
with GE allows us to meet two business objectives: to restructure and
optimise our portfolio of assets following the NEW SKIES acquisition
and to remove the GE share overhang. The transaction will
significantly boost earnings per share in 2007 and beyond, as well as
taking the free float up to close to 70%. Using a combination of
assets and cash as consideration will allow the company to leverage
its balance sheet while maintaining its investment grade credit
rating. We are convinced that this transaction will both deliver
significant additional value to the SES shareholders and strengthen
the group's capability to roll out its business strategy more
efficiently in Asia and Latin America."
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PRESS / ANALYST TELECONFERENCES
A press/analyst call will be hosted at 10.00 CET today, 14 February
2007. Journalists/analysts are invited to call the following numbers
five minutes prior to this time:
France +33 (0)1 70 99 42 78 UK +44 (0)20 7365 1832
Luxembourg +352 342 080 86 54 Germany +49 (0)30 2215 1089
Belgium +32 (0)2 400 3463
A call for investors and analysts will be hosted at 15.00 CET today,
14 February 2007. Participants are invited to call the following
numbers five minutes prior to this time.
USA +1 718 354 1157 France +33 (0)1 70 99 42 66
Belgium +32 (0)2 400 3463 UK +44 (0)20 7365 1832
Germany +49 (0)30 2215 1089 Luxembourg +352 342 080 8654
A presentation, which will be referred to in each call, will be
available for download from the Investor Relations section of our
website www.ses-global.com
A replay will be available until February 21, 2007 on our website :
www.ses-global.com
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