Sulzer - A Globally Active Engineering Corporation - InCentive’s “increased” cash offer simply compensates for the Sulzer dividend

InCentive’s bid for Sulzer remains too low

InCentive’s “increased” cash offer simply compensates for the Sulzer dividend (06/04/2001, Media Release)

Sulzer notes that, only a week after launching the offer, InCentive Capital has today raised its cash take-over bid to the level initially implied. InCentive Capital’s original headline bid price of CHF 410 per share was in effect an offer of a CHF 390 payment by InCentive for the Sulzer shares after Sulzer’s CHF 20 per share dividend was paid. Today’s announcement by InCentive in effect means an offer of CHF 410 per share after payment of Sulzer’s CHF 20 per share dividend. The central point, however, is that InCentive’s bid remains too low.

Sulzer will demonstrate this in its formal response to InCentive’s bid, which will be published next week. In addition, Sulzer notes that InCentive still offers no information on its plans for Sulzer if its offer is successful, beyond supporting the separation of Sulzer and Sulzer Medica which is already proposed.

The share exchange offer is now 1 instead of 0.9 InCentive share per Sulzer (reduced in each case by the Sulzer dividend) plus a so-called “contingent value right” (CVR). This reflects the low liquidity and, as identified by InCentive in its own offer documentation, the uncertain value of the InCentive share. The costs of any downside protection offered by the CVR mechanism will be borne by current and future InCentive shareholders.

Leonardo Vannotti, Chairman of Sulzer, said: “InCentive has today accepted that its original offer was too low; but an additional CHF 20 per share does not begin to bridge the value gap. InCentive’s offer remains far too low.”

Issued by Sulzer AG. Approved by UBS Warburg Ltd., a subsidiary of UBS AG, for the purposes of S.57 of the Financial Services Act 1986. UBS Warburg Ltd. is regulated in the UK by the Securities and Futures Authority. This does not constitute a recommendation regarding the Sulzer shares. The value of an investment may go down as well as up. Individuals should seek advice from an independent financial adviser as to the suitability for the individual concerned.

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