Japan's Kokusai Pulp & Paper Announces Proposal to Acquire 83.7% Stake in Antalis from Sequana and Bpifrance

Antalis is a leading B2B distributor of papers and industrial packaging, and in the distribution of Visual Communication media in Europe. In 2019, the Group reported sales of EUR 2.1 billion and employed 4,700 people.

Editor's note: This press release is the English summary by Kokusai Pulp & Paper of their press release written in Japanese.

March 31, 2020 - Tokyo-based Kokusai Pulp & Paper (KPP) and Paris-based Sequana have entered into a put option agreement on March 31, according to which KPP agreed, subject to certain condition precedents, to acquire 53,395,148 ordinary shares of Antalis SA held by Sequana, representing approximately 75.2% of Antalis' share capital and 82.5% of voting rights1.

The Sequana block would be acquired for a price per share equal to EUR 0.10, subject to limited downward price adjustment on the closing date, as the case may be.

KPP and Bpifrance Participations (a French finance company) have also entered into a share purchase agreement on the same day, according to which KPP agreed to acquire, and Bpifrance agreed to sell, 6,064,946 ordinary shares (approximately 8.5% share capital and voting rights) of Antalis, for a price per share equal to EUR 0.40, subject only to the effective transfer of the shares held by Sequana to KPP.

The exercise of the put option by Sequana is subject to the release of opinions by Antalis' European Works Council, the issuance of a court order by the Supervisory Judge (appointed by the Commercial Court of Nanterre to supervise the liquidation of Sequana), as well as other customary conditions precedent.

The effective transfer of the Sequana shares in Antalis will then be subject, in particular, to the clearance of any recourse on the court order above mentioned, in accordance with Article L.642-19 of the French Commercial Code, as well as the receipt of a release of pledges from Bpifrance Participations and Impala Security Solutions BV on Antalis shares currently held by Sequana.

The transaction is not subject to the approval of the French, European or foreign competition authority in charge of merger control, KPP noted.

Concurrently to the binding agreements mentioned previously, a restructuring agreement has been signed between KPP, Antalis and the lenders of Antalis' existing syndicated credit facility on March 31, 2020, providing for a the refinancing of EUR 100 million of the outstanding facility amount, and the write-off of the remainder.

The syndicated credit facility amount as of December 31, 2019 was EUR 287.1 million. This write-off is conditional notably on the closing of the acquisition by KPP of Sequana's and Bpifrance' shares held in Antalis.

After closing of the transaction as the case may be, KPP would file a simplified mandatory tender offer with the AMF, on the remaining shares it will not hold after the effective transfer to KPP of the shares held by Sequana and Bpifrance, for a price per share equal to EUR 0.73. The tender offer would be followed by a squeeze-out launched at the same price, to complete delisting procedure, if the legal requirements are met.

Purpose and Background of the Transaction

According to a translated statement by Kokusai Pulp & Paper, "With our management philosophy of establishment of recycling-based society and contribution to promoting education, culture and industry, we operate our business in Japan as well as Asia Pacific.

"During the 'business development period' in our second mid-term management plan, we are professing to pursue sustainable growth by acquiring external resources.

"Antalis is one of the largest paper distributors in Europe, and they are distributing paper and paper-related products in 41 countries, mainly in Europe, including South America and Asia Pacific as a leading company. Their strength is in packaging business, high growth business post graphic paper, as well as visual communication business (sigh and display), and they are reforming business portfolio and investing in e-commerce business.

"We concluded to agree this Put Option Agreement and Share Purchase Agreement based on following expectations; a greater complementary relationship between Antalis with business base in European countries and KPP with base in Asia Pacific; and synergies in product development and branding improvement with Antalis.

"By having Antalis under our group and the combination of the trade business of KPP's international business and Antalis's paper distribution business, we expect this will contribute to strengthening competitiveness with expansion. We will work hard to achieve sustainable growth by as well as in Asia Pacific, global business expansion including in Europe."

About Antalis

Antalis is the leading professional paper distributor and provider of packaging and Visual Communication solutions in Europe and the world (outside of the United States). The group provides one of the most extensive and diversified ranges of products and solutions in the market, mainly through its 115 distribution centres situated throughout the world.

About Kokusai Pulp & Paper

Kokusai Pulp & Paper is a paper distributor with headquarters in Chuo-ku, Tokyo, Japan. The company buys, sells, and imports/exports: paper, paperboard, paper processed products, pulp, recovered paper, chemical products, machines related to paper, packaging and wrapping materials, along with operating warehouse facilities. For further information, visit: www.kppc.co.jp.