Use of own shares 2023
The Management Board and the Supervisory Board of Kontron AG, FN 190272 m, (the “Company”) hereby submit the following report to the shareholders of the Company pursuant to Section 153 (4) in connection with Section 159 (2) 3 Austrian Stock Corporation Act (analogously) on the intended sale of treasury shares of the Company for the purpose of servicing stock options to employees, executives, and members of the Management Board of the Company or of an affiliated company within the framework of the Stock Option Program 2018 (tranches 2018 and 2019) (the “Stock Option Program”).
The 20th Annual General Meeting of Kontron AG (formerly S&T AG (the “Company”)) on 21 May 2019 passed a resolution, pursuant to Section 159 (2) 3 of the Austrian Stock Corporation Act, to authorise the Management Board to conditionally increase the share capital by up to EUR 1,500,000.00 by issuing up to 1,500,000 new no-par-value bearer shares, subject to the approval of the Supervisory Board, in the period up to five years after the amendment to the Articles of Association has been entered in the company register for the purpose of granting share options to employees, executives and members of the Management Board of the Company or one of its affiliated companies. The capital increase is earmarked for a specific purpose and may only be carried out to the extent that the options are exercised by holders of options from the Company’s Stock Option Programme 2018 (SOP 2018) tranche 2018 and tranche 2019 as well as a potential future programme, which must be first exercised no earlier than 3 years after the granting of the option and an exercise threshold of 25% of the stock exchange price of the Company’s share on the Frankfurt Stock Exchange, which must be higher than the exercise price. The authorised conditional capital may be utilised in one or more tranches within the specified maximum amount. Pursuant to Section 145 of the Austrian Stock Corporation Act, the Supervisory Board is authorised to adopt amendments to the Articles of Association to the extent that such amendments are necessary after the authorisation granted to the Management Board has been utilised. Accordingly, the Supervisory Board is authorised in particular to amend the Articles of Association regarding the amount of the share capital and the number of no-par value shares.
The amendment to the Articles of Association was registered on 26 June 2019. By resolution of the 21st Annual General Meeting of the Company on 16 June 2020, the existing authorisation was partially revoked to the extent of EUR 500,000 or 500,000 no-par value bearer shares, which can no longer be utilised, so that the authorised conditional capital 2019 comprises a remaining authorisation to conditionally increase the share capital by up to EUR 1,000,000 for the granting of share options until 25 June 2024, subject to the approval of the Supervisory Board.
The details of the stock option programme are set out in the report of the Management Board and the Supervisory Board pursuant to Section 159 (3) of the Austrian Stock Corporation Act, which is available on the Company’s website at: https://ir.kontron.com/13._S_T_AG_Bericht_Vst._Top_8_Genehmigtes_bedingtes_Kapitala.pdf as well as in the remuneration report 2022, which is available at https://ir.kontron.com/Remuneration_report_2022_en.pdf
The Annual General Meeting of the Company on 6 May 2022 authorised the Management Board to acquire treasury shares in accordance with Section 65 (1) line 8, (1a) and (1b) of the Austrian Stock Corporation Act, both on the stock exchange and over the counter, in an amount of up to 10% of the Company’s share capital. Furthermore, the Annual General Meeting authorised the Management Board, pursuant to Section 65 (1b) of the Austrian Stock Corporation Act, with the consent of the Supervisory Board, to decide on a method of sale or use of own shares other than via the stock exchange or by means of a public offer, excluding the right of repurchase (reverse subscription right), and to determine the conditions of sale (the “repurchase and resale authorisation”). A report of the Management Board pursuant to Section 170 (2) in conjunction with Section 153 (4) in conjunction with Section 65 (1b) of the Austrian Stock Corporation Act is available on the website of the Company at https://ir.kontron.com/ST_HV_2022-Bericht_TOP_8_final.pdf.
Under the stock option programme, taking into account the partial revocation as set out in item 1, a total of 1,000,000 share options were granted to employees, executives, and members of the Management Board of the Company or an affiliated company, entitling them to subscribe for a total of 1,000,000 shares in the Company. The details on the granted share options can be found in the remuneration report 2022, which is available at https://ir.kontron.com/Remuneration_report_2022_en.pdf.
Of the 1,000,000 share options, 233,000 have been exercised to date and 233,000 new shares in the Company have been transferred to the exercising beneficiaries from conditional capital or their claims have been paid out in cash.
To date, the Company has received 18,000 additional exercise declarations from qualifying executives, which entitle them to subscribe to a total of 18,000 shares in the Company. The Company will meet the delivery obligation from its treasury shares.
749,000 share options entitling holders to subscribe to 749,000 shares in the Company have not yet been exercised. The deadline for exercising the share options is 21 December 2024 for all option holders who still worked for Kontron AG or a company of the Kontron Group in February 2023. For all option holders who no longer worked for Kontron AG or a company of the Kontron Group in February 2023, the deadline for exercising the share options is 21 December 2023.
If implemented, the possibility of selling own shares in a way other than via the stock exchange or a public offer for the purpose of servicing the stock option programme would be in the interests of the Company and would be proportionate: Shareholding programmes are common and widespread among listed companies. The opportunity to acquire shares in the company is commonly expected by employees, executives and members of the Management Board. It would therefore be a disadvantage when recruiting new employees and executives if the Company did not have an employee participation programme. Furthermore, employee share ownership programmes are a motivational incentive and therefore serve to increase the retention rate of existing employees and executives as well as to promote the growth of sales and profits by each individual employee or executive. Stock options are therefore a necessary means of employee retention and contribute to increasing the attractiveness of the Company and its affiliates as employers. In the absence of stock options, the Company and its group companies may be required to pay higher variable salary components to employees, executives and directors. Finally, investors also expect employees and executives to share in the Company’s success. The success of the Company’s capital measures is therefore also dependent on the existence of a stock option programme.
The possibility of selling treasury shares by means other than via the stock exchange or a public offer for the purpose of servicing stock options is also necessary in order to be able to implement an employee participation programme independently of any conditional and/or authorised conditional capital.
Pursuant to Section 65 (1b) last sentence of the Austrian Stock Corporation Act, the sale of own shares to employees, executives and/or members of the Management Board of the Company or of a company affiliated with the Company for the purpose of servicing stock options is justified by law. The possibility of selling own shares to these persons does not require a resolution (i.e. no separate authorisation) by the General Meeting. In addition, however, the Management Board has been granted the repurchase and resale authorisation by resolution of the Annual General Meeting on 6 May 2022.
The sale of own shares while excluding the possibility of shareholders to acquire these shares does not lead to a “typical” dilution of shareholders. Ultimately, the proportion of existing shareholders or the voting power from the existing shareholders’ own shares only “increases” because the Company has repurchased its own shares and the rights from these shares are therefore suspended as long as they are held by the Company as own shares. A reduction in the sphere of the individual existing shareholders only occurs when the Company resells the acquired treasury shares, excluding the shareholders’ purchase option. After the sale, the shareholders regain the position they already had before the company acquired the relevant treasury shares. In this context, it should also be noted that due to the small size of the transaction, no controlling interest of an entitled party in the Company can arise. The shareholders will not suffer any material pecuniary disadvantage given the small size of the transaction: The object of the intended sale only concerns up to 18,000 shares (up to 0.028% of the share capital of the Company).
Overall, the exclusion of the repurchase right (subscription right) of the existing shareholders is therefore objectively justified.
The resale of own shares under exclusion of the existing shareholders’ repurchase right for the purpose of servicing stock options is a common and generally accepted practice. In addition, the extensive disclosure obligations in connection with the sale of own shares – also in connection with any other disclosure obligations applicable to listed companies – ensure comprehensive transparency in connection with the sale of own shares. Furthermore, the exclusion of the right of repurchase (subscription right) is only possible with the consent of the Supervisory Board. The Management Board of the Company cannot decide alone. The interests of existing shareholders are not exposed to any particular danger as a result.
In summary, the Management Board and the Supervisory Board of the Company therefore conclude that the servicing of the stock options with own shares under exclusion of the repurchase right (subscription right) of the shareholders complies with the statutory provisions.
After expiry of a period of at least 14 days after publication of this report at the earliest, treasury shares of the Company may be sold under the conditions described above in accordance with the corresponding exercise declarations of the beneficiaries.
Linz, August 2023
The Management Board of Kontron AG
The Supervisory Board of Kontron AG
You can download the report as PDF here 082023
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The Executive Board and the Supervisory Board of Kontron AG, FN 190272 m, (the “Company”) hereby submit the following report to the shareholders of the Company pursuant to Section 153 (4) in connection with Section 159 (2) 3 Austrian Stock Corporation Act (analogously) on the intended sale of treasury shares of the Company for the purpose of servicing stock options to employees, executives, and members of the Executive Board of the Company or of an affiliated company within the framework of the Stock Option Program 2018 (tranches 2018 and 2019) (the “Stock Option Program”).
The 20th Annual General Meeting of Kontron AG (formerly S&T AG (the “Company”)) on 21 May 2019 passed a resolution, pursuant to Section 159 (2) 3 of the Austrian Stock Corporation Act, to authorise the Executive Board to conditionally increase the share capital by up to EUR 1,500,000.00 by issuing up to 1,500,000 new no-par-value bearer shares, subject to the approval of the Supervisory Board, in the period up to five years after the amendment to the Articles of Association has been entered in the company register for the purpose of granting share options to employees, executives and members of the Executive Board of the Company or one of its affiliated companies. The capital increase is earmarked for a specific purpose and may only be carried out to the extent that the options are exercised by holders of options from the Company’s Stock Option Programme 2018 (SOP 2018) tranche 2018 and tranche 2019 as well as a potential future programme, which must be first exercised no earlier than 3 years after the granting of the option and an exercise threshold of 25% of the stock exchange price of the Company’s share on the Frankfurt Stock Exchange, which must be higher than the exercise price. The authorised conditional capital may be utilised in one or more tranches within the specified maximum amount. Pursuant to Section 145 of the Austrian Stock Corporation Act, the Supervisory Board is authorised to adopt amendments to the Articles of Association to the extent that such amendments are necessary after the authorisation granted to the Executive Board has been utilised. Accordingly, the Supervisory Board is authorised in particular to amend the Articles of Association regarding the amount of the share capital and the number of no-par value shares.
The amendment to the Articles of Association was registered on 26 June 2019. By resolution of the 21st Annual General Meeting of the Company on 16 June 2020, the existing authorisation was partially revoked to the extent of EUR 500,000 or 500,000 no-par value bearer shares, which can no longer be utilised, so that the authorised conditional capital 2019 comprises a remaining authorisation to conditionally increase the share capital by up to EUR 1,000,000 for the granting of share options until 25 June 2024, subject to the approval of the Supervisory Board.
In total, the members of the Executive Board and senior employees of Kontron AG as well as the managers of selected Group companies were granted share options on the basis of the stock option programme. The details of the stock option programme are set out in the report of the Executive Board and the Supervisory Board pursuant to Section 159 (3) Austrian Stock Corporation Act, which is available on the Company’s website at https://ir.kontron.com/Verguetungsbericht_2022_de.pdf.
The stock option programme provides the Company with the sole right to choose whether to deliver shares to the beneficiaries in return for payment of the exercise price or to pay out their entitlement in cash. In addition to shares from the authorised conditional capital 2019, the beneficiaries’ claims can therefore also be serviced by delivering treasury shares.
This report serves to prepare the servicing of the entitlements of the beneficiaries with treasury shares or to provide information on the possible servicing of some or all of the entitlements from the authorised conditional capital 2019.
The Extraordinary General Meeting of the Company on 8 November 2023 authorised the Executive Board to acquire treasury shares in accordance with Section 65 (1) line 8, (1a) and (1b) of the Austrian Stock Corporation Act, both on the stock exchange and over the counter, in an amount of up to 10% of the Company’s share capital. Furthermore, the General Meeting authorised the Executive Board, pursuant to Section 65 (1b) of the Austrian Stock Corporation Act, for a period of five years from the date of the resolution, with the approval of the Supervisory Board and without a new resolution by the General Meeting, to sell or use treasury shares in the Company in ways other than via the stock exchange or through a public offer, to exclude the shareholders’ pro rata purchase rights (exclusion of subscription rights) and to determine the conditions of sale. The authorisation may be exercised once or several times, in whole or in part or in several partial amounts and in pursuit of one or several purposes by the Company, by an affiliated company (Section 189a no. 8 Austrian Enterprise Code UGB) or by third parties for the account of the Company. The provisions of this resolution shall apply to treasury shares held by the Company at the time the resolution is adopted (the “repurchase and resale authorisation”).
A report of the Executive Board pursuant to Section 170 (2) in conjunction with Section 153 (4) in conjunction with Section 65 (1b) of the Austrian Stock Corporation Act is available on the website of the Company at https://ir.kontron.com/Bericht_des_Vorstandes_zu_TOP_3.pdf.
Under the stock option programme, a total of 1,000,000 share options were granted to employees, executives, and members of the Executive Board of the Company or its affiliated companies, entitling them to subscribe for a total of 1,000,000 shares in the Company. Details of the share options granted can be found in the 2022 Remuneration Report, which is available at https://ir.kontron.com/Verguetungsbericht_2022_de.pdf.
Of the 1,000,000 share options, 251,000 have been exercised to date and 251,000 shares in the Company have been transferred to the exercising beneficiaries from conditional capital or their claims have been paid out in cash.
To date, the Company has received a total of 7 additional exercise declarations from beneficiaries, which entitle them to subscribe to a total of 100,700 shares in the Company. The Company will meet the delivery obligation from its treasury shares.
648,300 share options entitling holders to subscribe to 648,300 shares in the Company have not yet been exercised. The deadline for exercising the share options is 21 December 2024 for all beneficiaries who were still working for Kontron AG or a company of the Kontron Group in February 2023. For those beneficiaries who were no longer working for Kontron AG or a company of the Kontron Group in February 2023, the deadline for exercising the share options ends on 21 December 2023.
The Executive Board and the Supervisory Board of the Company plan to service all or at least some of the entitlements of the beneficiaries from the share option programme using treasury shares in the Company. If not all of the beneficiaries’ claims are serviced with treasury shares, the remaining portion of the claims would be satisfied from the authorised conditional capital 2019, any other conditional or authorised capital to be created by the Company and/or in cash. The maximum number of treasury shares to be delivered by the Company under the share option programme is therefore 648,300 shares.
If implemented, the possibility of selling own shares in a way other than via the stock exchange or a public offer for the purpose of servicing the stock option programme would be in the interests of the Company and would be proportionate: Shareholding programmes are common and widespread among listed companies.
The opportunity to acquire shares in the Company is commonly expected by employees, executives and members of the Executive Board. It would therefore be a disadvantage when recruiting new employees and executives if the Company did not have an employee participation programme. Furthermore, employee share ownership programmes are a motivational incentive and therefore serve to increase the retention rate of existing employees and executives as well as to promote the growth of sales and profits by each individual employee or executive. Stock options are therefore a necessary means of employee retention and contribute to increasing the attractiveness of the Company and its affiliates as employers. In the absence of stock options, the Company and its group companies may be required to pay higher variable salary components to employees, executives and directors. Finally, investors also expect employees and executives to share in the Company’s success. The success of the Company’s capital measures is therefore also dependent on the existence of a stock option programme. The possibility of selling treasury shares by means other than via the stock exchange or a public offer for the purpose of servicing stock options is also necessary in order to be able to implement an employee participation programme independently of any conditional and/or authorised conditional capital.
Pursuant to Section 65 (1b) last sentence of the Austrian Stock Corporation Act, the sale of own shares to employees, executives and/or members of the Executive Board of the Company or of a company affiliated with the Company for the purpose of servicing stock options is justified by law. The possibility of selling own shares to these persons does not require a resolution (i.e. no separate authorisation) by the General Meeting. In addition, however, the Executive Board has been granted the repurchase and resale authorisation by resolution of the Extraordinary General Meeting on 8 November 2023.
The sale of own shares while excluding the possibility of shareholders to acquire these shares does not lead to a “typical” dilution of shareholders. Ultimately, the proportion of existing shareholders or the voting power from the existing shareholders’ own shares only “increases” because the Company has repurchased its own shares and the rights from these shares are therefore suspended as long as they are held by the Company as own shares. A reduction in the sphere of the individual existing shareholders only occurs when the Company resells the acquired treasury shares, excluding the shareholders’ purchase option. After the sale, the shareholders regain the position they already had before the company acquired the relevant treasury shares. In this context, it should also be noted that due to the small size of the transaction, no controlling interest of an entitled party in the Company can arise. The shareholders will not suffer any material pecuniary disadvantage given the small size of the transaction: The object of the intended sale only concerns up to 100,700 shares (up to 0.158% of the current share capital of the Company).
Overall, the exclusion of the repurchase right (subscription right) of the existing shareholders is therefore objectively justified. The resale of own shares under exclusion of the existing shareholders’ repurchase right for the purpose of servicing stock options is a common and generally accepted practice. In addition, the extensive disclosure obligations in connection with the sale of own shares – also in connection with any other disclosure obligations applicable to listed companies – ensure comprehensive transparency in connection with the sale of own shares. Furthermore, the exclusion of the right of repurchase (subscription right) is only possible with the consent of the Supervisory Board. The Executive Board of the Company cannot decide alone. The interests of existing shareholders are not exposed to any particular danger as a result.
In summary, the Executive Board and the Supervisory Board of the Company therefore conclude that the servicing of the stock options with own shares under exclusion of the repurchase right (subscription right) of the shareholders complies with the statutory provisions.
After expiry of a period of at least 14 days after publication of this report at the earliest, treasury shares of the Company may be sold under the conditions described above in accordance with the corresponding exercise declarations of the beneficiaries.
Linz, November 2023
The Executive Board of Kontron AG
The Supervisory Board of Kontron AG
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The Extraordinary General Meeting of Kontron AG (the “Company”) held on 8 November 2023 resolved under agenda item 3 to authorise the Executive Board to sell or use treasury shares of the Company (“treasury shares”) for a period of five years from the date of the resolution in accordance with Section 65 Paragraph 1b of the Austrian Stock Corporation Act, with the consent of the Supervisory Board and without any new resolution by the Annual General Meeting, also in a manner other than via the stock exchange or by means of a public offer, and to exclude the shareholders’ pro rata purchase rights (subscription rights) and to determine the conditions of sale (“authorisation”). The authorisation may be exercised once or several times, in full or in part or also in several partial amounts and in pursuit of one or several purposes by the Company, by an affiliated company (Section 189a no. 8 of the Austrian Commercial Code) or by third parties for the account of the Company. The authorisation is to be applied to treasury shares already held by the Company at the time the resolution was passed. A report by the Executive Board on agenda item 3 of the Extraordinary General Meeting on 8 November 2023 pursuant to Section 170 Paragraph 2 in conjunction with Section 153 Paragraph 4 in conjunction with Section 65 Paragraph 1b of the Austrian Stock Corporation Act is available on the Company’s website at https://ir.kontron.com/Bericht_des_Executive Boardes_zu_TOP_3.pdf.
Kontron Acquisition GmbH, in which the Company holds a 100% indirect interest, concluded an agreement on 18 January 2024 regarding the acquisition of 8,587,138 shares in the listed company KATEK SE from PRIMEPULSE SE. The transaction was completed on 29 February 2024, meaning that Kontron Acquisition GmbH now holds a stake of around 59.4% of the share capital of KATEK SE. Kontron Acquisition GmbH has thereby gained control over KATEK SE and is obliged to make a mandatory offer to the shareholders of KATEK SE to acquire all outstanding shares of KATEK SE in accordance with the provisions of the German Securities Acquisition and Takeover Act. As Kontron Acquisition GmbH intends to withdraw KATEK SE from the regulated market of the Frankfurt Stock Exchange, the mandatory offer will simultaneously be structured as a delisting tender offer (the “Offer”). As part of the Offer, Kontron Acquisition GmbH will offer to grant up to 2,100,000 shares in the Company as a voluntary alternative consideration for the tender of shares.
The Company currently holds 2,194,111 treasury shares, which corresponds to approximately 3.44% of the Company’s share capital. Subject to the approval of the Supervisory Board, the Executive Board of the Company plans to make use of the authorisation and to transfer up to 2,100,000 treasury shares in the Company, corresponding to approximately 3.29% of the Company’s share capital, in a first step by way of a contribution to Kontron Acquisition GmbH (or on its instruction to the paying and settlement agent for the Offer), so that Kontron Acquisition GmbH can subsequently fulfil its obligations arising from the Offer. The contribution of treasury shares to Kontron Acquisition GmbH shall be made to the extent that treasury shares are required for delivery to the shareholders of KATEK SE.
The acquisition of KATEK SE and its subsidiaries is part of the Company’s growth strategy and will enable it to expand its range of smart solutions for renewable energies and other industries. The Clean Energy Solutions and Aerospace divisions will be expanded as a result of the transaction, while synergic effects will arise from the complementary product portfolio and the coverage of different markets.
As part of the Offer, Kontron Acquisition GmbH offers the shareholders of KATEK SE the granting of shares in the Company as an alternative to a cash payment.
In the case of company acquisitions, the consideration regularly consists not only of cash, but also partly or wholly in shares in the acquiring company. This can be in the interests of both the buyer and the seller.
By using treasury shares for the acquisition of additional shares in KATEK SE by way of the mandatory offer, the Company can cover the financing requirements to a significant extent and generally reduce the liquidity requirements for the transaction.
Another advantage of using treasury shares is that the typical dilution effect of newly created shares (e.g. from authorised capital) is avoided. Although the participation ratio of shareholders also changes when treasury shares are sold, this only restores the ratio that existed before the Company repurchased the treasury shares and which temporarily changed in favour of the shareholders due to the restrictions on the rights arising from treasury shares for the Company (Section 65 Paragraph 5 of the Austrian Stock Corporation Act).
A public placement of treasury shares or a sale via the stock exchange would entail a noticeable risk of negative price changes (particularly in volatile markets), with detrimental effects on the Company’s success. Furthermore, a public offering of treasury shares would generate a considerable amount of time and expense, particularly due to the requirement to prepare a prospectus and the associated liability risks.
The utilisation of treasury shares in the context of the Offer is therefore in the interests of the Company and Kontron Acquisition GmbH.
The exclusion of subscription rights for the use of treasury shares as acquisition currency is suitable, necessary and proportionate in order to achieve the stated objectives in the interests of the Company.
The transfer of treasury shares to Kontron Acquisition GmbH creates the possibility of granting shares in the Company as consideration for the contribution of shares in KATEK SE under the Offer, providing an alternative to cash payments. The transaction structure is therefore suitable for reducing the liquidity requirements for the Offer and thus serves the interests of the Company.
The Company and KATEK SE have different shareholders. The use of treasury shares as consideration for the offer therefore requires the exclusion of the (reverse) subscription rights of the Company’s shareholders, as the offer can also be accepted by persons who do not hold shares in the Company. The exclusion of subscription rights for the use of treasury shares as an alternative consideration for the contribution of shares in KATEK SE is necessary in order to achieve the stated objectives in the interests of the Company.
Finally, the exclusion of subscription rights is also proportionate. The financing advantages pursued by using treasury shares cannot be achieved to the same extent if the treasury shares are sold while maintaining the subscription rights of the shareholders or if they are sold via the stock exchange or a public offer. The Company would be exposed to a noticeable risk of price changes if it were to create the liquidity required for the company acquisition by selling shares. Furthermore, such a sale would involve additional transaction costs. The use of treasury shares as an acquisition currency creates transaction security and the decision to include the granting of treasury shares as an alternative consideration in the offer was made taking into account the stock market price. In addition, a maximum of 2,100,000 treasury shares are to be offered to the shareholders of KATEK SE and – depending on the acceptance rate of this alternative – transferred to Kontron Acquisition GmbH. This corresponds to approximately 3.29% of the Company’s share capital, meaning that the interests of the Company’s shareholders will not be significantly affected by the transaction. Since the exchange ratio will be determined appropriately in the context of the Offer, based on the average historical stock exchange prices of Kontron AG and KATEK SE and taking into account previous acquisitions (see 3. below), there is also no risk of dilution for the shareholders comparable to a capital increase when used as an acquisition currency. In particular for the reasons stated above, the purposes and measures pursued in the interests of the Company by excluding subscription rights – which are in any case also indirectly in the interests of all shareholders – outweigh any disadvantage, whereby the exclusion of shareholders’ subscription rights is not disproportionate, but necessary and appropriate.
In addition, the use of treasury shares as part of the Offer and the associated exclusion of subscription rights is subject to the approval, and therefore the control, of the Company’s Supervisory Board.
As part of the Offer, the shareholders of KATEK SE will be offered the chance to exchange three shares in the Company for four shares in KATEK SE.
The exchange ratio of KATEK SE shares for treasury shares was determined taking into account the price level of the shares in the Company and KATEK SE on the stock exchange within the last three and six months respectively before the publication of the acquisition of control on 29 February 2024 and the advance acquisition of 8,587,138 shares in KATEK SE in accordance with the agreement dated 18 January 2024.
Due to the valuation of both the Company’s own shares and the shares of KATEK SE, taking into account the respective stock market prices including the determination of an appropriate premium in favour of KATEK SE shareholders, there is no disproportionate disadvantage for shareholders of the Company due to a quota dilution. The closing price of the KATEK SE share (XETRA trading) on 28 February 2024, the day before the publication of the Company’s acquisition of control over KATEK SE on 29 February 2024, was EUR 15.15. This is multiplied by 1.33 offered as part of the share consideration (corresponding to the exchange ratio of three shares in the Company for four shares in KATEK SE), leading to a valuation of one treasury share of the Company in the Offer of EUR 20.20. The weighted average stock exchange price of the KATEK SE share for the three-month period before 29 February 2024 was EUR 14.58; based on this average price, the valuation of one treasury share of the Company in the Offer is EUR 19.44. The weighted average market price of the KATEK SE share for the six-month period ending 29 February 2024 was EUR 14.22; based on this average price, the valuation of one treasury share of the Company in the Offer is EUR 18.96.
The protection of shareholders’ interests is also ensured by the fact that the value of KATEK SE was analysed as part of the Offer and its preparation and an appropriate total purchase price for the Company acquisition was determined on this basis, taking into account industry-standard multipliers.
Treasury shares to be sold have the same rights (in particular profit rights) as existing shares. The rights arising from the shares are therefore taken into account in the valuation of the shares on the capital market (in particular the share price).
After weighing up the reasons above, the exclusion of subscription rights associated with the use of up to 2,100,000 treasury shares of the Company as acquisition currency in the context of the Offer to the shareholders of KATEK SE is suitable, necessary, proportionate and objectively justified and required in the overriding interest of the Company and its subsidiaries.
The approval of the Company’s Supervisory Board is required for the exclusion of subscription rights and for the sale of treasury shares. Pursuant to Section 65 Paragraph 1b in conjunction with Section 171 Paragraph 1 of the Austrian Stock Corporation Act, a Supervisory Board resolution on this will be passed no earlier than two weeks after publication of this report and the actual transfer of treasury shares will take place in line with statutory requirements.
April 2024, Linz
The Executive Board of Kontron AG