SCA to Make Offer for Vinda Tissue

SCA, Stockholm, Sweden, yesterday (September 9) said that it will make a public cash offer for the Chinese tissue company Vinda. The offer is conditional upon SCA achieving an ownership share in Vinda in excess of 50%. SCA is currently the second largest shareholder in Vinda, which is listed on the Hong Kong Exchange.

The offer will be Hong Kong Dollar (HKD) 11.00 per share, corresponding to a premium of approximately 34.5%, based on the average closing price over the past 30 trading days. The offer corresponds to a market capitalization of approximately SEK 9.4 billion (about $1.41 billion) for all shares in Vinda.

SCA became a part owner in Vinda in 2007 and currently has a 21.7% holding in the company with two representatives on its board of directors.

Vinda is the third largest tissue producer in China, which represents the world’s second largest tissue market. In 2012, Vinda’s sales rose 26% and amounted to approximately SEK 5 billion. The company’s operating margin was 12.9%.

"Vinda is a strong player in the Chinese tissue market and has demonstrated healthy growth and profitability. As a majority shareholder, we would see the potential to further strengthen the company to ensure its future competitiveness," said Jan Johansson, president and CEO of SCA.

The complete prospectus for the offer is expected to be presented not later than September 30, which is the date on which the acceptance period will also commence. The transaction is expected to be finalized in the fourth quarter of this year and SCA will thereafter consolidate Vinda in its accounts.

Provided that the offer for Vinda will be accepted, SCAs pro forma sales for the full year 2012 would have increased from SEK 85 billion to approximately SEK 90 billion. Pro forma operating profit, excluding items affecting comparability, for the full year 2012 would have increased from SEK 8.6 billion to approximately SEK 9.2 billion.

The intention is that Vinda will remain listed on the Hong Kong Exchange.