On 21 September of this year, Skipti ehf., Id. No. 530705-1450,
Tjarnargata 35, Reykjavík, made shareholders of Iceland Telecom Ltd. a takeover
bid for their shares. Shareholders were invited to sell their shares to the
company at a share price of 9.6, which is the same price paid by the company on
5 August this year for the Icelandic state’s holding in Iceland Telecom.
Skipti’s takeover bid is valid until 25 October 2005.
According to Article 41 of Act No. 33/2003, on Securities Transactions,
the Board of a Iceland Telecom Ltd. is to draw up and make public a special
summary, setting out its reasoned opinion of the bid and its conditions. The
following section comprises this report.
Reasoned Opinion of the Takeover Bid and its Terms and Conditions
In the opinion of the Board of Directors of Iceland Telecom, the bid by
Skipti ehf. is as expected. The company is required under the Act on Securities
Transactions to submit a bid to shareholders at the price offered, which is the
same as Skipti ehf. paid for the Icelandic state’s share capital in Iceland
Telecom Ltd. The Board also considers other terms and conditions of the bid to
be normal; shareholders are offered payment for their shares in cash within
five days of the expiration of the bid. The Board of Iceland Telecom Ltd.,
however, does not consider itself to be in a position to assess whether it is
preferable for individual shareholders to accept the offer or to reject it.
According to Skipti's offer document, which was published in the News
System of the Iceland Stock Exchange (ICEX) on 21 September of this year, the
company’s future plans are described as follows:
Iceland Telecom Ltd. is expected to follow a general strategy
concentrating on all types of electronic communications and information
technology services. No changes are proposed in the company’s purpose, nor are
there plans at this stage to cut back the company’s core activities or to
utilise its financial assets for other purposes.
The Board of Directors of Iceland Telecom declares its
support for the above future plans of Skipti ehf. and, in view of the same, it
is of the opinion that Skipti’s takeover bid and ownership of shares in Iceland
Telecom is not likely to be contrary to the company’s interests.
With regard to the interests of employees and the company’s location,
Skipti's offer document states as follows:
No decisions have been taken concerning changes in the company’s
activities, on the terms of employment of management and other employees, or
concerning the company’s location. No changes are proposed to the company’s
Articles of Association as long as its shares are listed on ICEX. Skipti ehf.
will not request mandatory redemption following the takeover bid, with the
result that shareholders will not be obliged to sell Skipti ehf. their shares
in Iceland Telecom Ltd. This is in accordance with the provisions of the
purchase agreement between Skipti ehf. and the Icelandic state.
In view of the above, the Board of Iceland Telecom sees no reason to
expect that Skipti’s takeover bid will have a negative impact on the company’s
interests or on the work of its management and employees. The Board is also of the
opinion that, in accordance with the above, there is no reason to expect
changes to be made in the location of the company’s establishments.
As has been publicly announced, the Board of Iceland Telecom has decided
to request that the company’s shares be delisted from ICEX. The company deems
it proper to remind shareholders of this, since the delisting of the shares may
affect the way in which they can be traded in the future.
The Board of Directors of Iceland Telecom and connections with the
A new Board of Directors was elected for Iceland Telecom at the first
shareholders’ meeting following the privatisation of the company. Lýður
Guðmundsson was elected Chairman of the Board, Rannveig Rist Vice-chairman, and
other members are Panikos Katsouris, Gísli Hjálmtýsson and Sigurgeir Brynjar
Kristgeirsson. Ágúst Guðmundsson, Erlendur Hjaltason and Sveinn Þór Stefánsson
were elected as alternates.
Chairman of the Board Lýður Guðmundsson is Chairman of
the Board of Exista ehf., a shareholder of Skipti ehf. Alternate member of the Board Ágúst
Guðmundsson is on the Board of Exista ehf., a shareholder of Skipti ehf.
Alternate member of the Board Erlendur Hjaltason is the CEO of Exista ehf., a
shareholder of Skipti ehf. Alternate member of the Board Sveinn Þór Stefánsson
is the CFO of Exista ehf., a shareholder of Skipti ehf. The above Board members
and alternates did not participate in drafting this summary.
Reykjavík, 17 October 2005
on behalf of the Board of Directors of Iceland