Orkla seeks majority in Jotun - offers to buy A...

Orkla has sent a letter to shareholders in Jotun AS offering to buy their A
shares at a price of NOK 70,000 per share. Orkla wishes to increase its exposure
in its current core areas. Over a period of almost 40 years, Orkla has been an
active minority shareholder, and now wishes to take part in the further
development of Jotun as a majority shareholder. Orkla wishes the Gleditsch
family to maintain a substantial stake and to continue the close collaboration.

"Jotun is a fine company, and we have never concealed the fact that we wanted a
larger stake. Should we become a majority shareholder, Orkla will maintain and
strengthen Jotun strategically and operationally along the lines that have been
laid down in the past few years, with the clear intention of maintaining the
head office in Sandefjord," says Orkla President and CEO, Bjørn M. Wiggen.

Orkla represents continuity and a strong corporate culture, and respects the
historical, business and cultural differences between its businesses. Moreover,
Jotun's and Orkla's core competencies match substantially in large parts of
Jotun's value chain, and there are good examples of synergies between Orkla and
Jotun. Jotun has access to important parts of Orkla's training programmes,
specialised expertise and some significant purchasing advantages.

"Jotun is Orkla's preferred alternative as the basis for further engagement in
the paints and coatings industry. Paints and coatings is considered to be a
sector that is well aligned with Orkla's long-term industrial strategy. Jotun's
strong brand and market position offer good opportunities for long-term global
growth. Orkla has the necessary prerequisites to enable Jotun to position itself
in a future consolidation of the sector," explains Wiggen.

There is a considerable difference in the influence inherent in A and B shares
in Jotun, as an A share entitles the holder to 10 times as many votes as a B
share. Orkla's offer concerns the high-vote A shares, and there is therefore a
substantial control premium attached to these A shares.

The offer has been made by Orkla's wholly-owned subsidiary, Lilleborg AS, and
concerns the purchase of all the A shares in Jotun AS that are not already owned
by Orkla (i.e. a total of 72,019 A shares). The price offered, NOK 70,000 per A
share, is payable in cash. Orkla already owns 41,981 A shares and 103,446 B
shares in the company, which is equivalent to 42.5% of share capital and 38.2%
of the voting rights in Jotun. If Orkla acquires 50.1% of the votes, this will
entail a total investment of NOK 1.1 billion. If all the A shareholders accept
the offer, Orkla's stake in Jotun will represent 63.6% of the share capital and
90.9% of the voting rights. In such case, the total purchase price will be NOK
5 billion.

Completion of the offer is conditional on, among other things, Orkla acquiring a
total stake in Jotun AS, after the exercise of any pre-emptive rights to shares
by other shareholders, that represents more than 50% of the voting rights in the
company.

The acceptance period expires on 30 September 2011; however, Orkla reserves the
right to extend this deadline.

Orkla ASA
Oslo, 31 August 2011


Ref.:

Senior Vice President Corporate Communications and Public Affairs
Johan Chr. Hovland
Telephone [phone]







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Source: Orkla ASA via Thomson Reuters ONE

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