On November 6, 2022, the Busch Group, a major shareholder of Pfeiffer Vacuum Technology AG (Pfeiffer Vacuum), announced through its fully owned subsidiary, Pangea GmbH, that it is seeking a Domination and Profit and Loss Transfer Agreement (DPLTA) with Pfeiffer Vacuum. to the adhoc announcement
Please find further information in the following FAQs:
Through a DPLTA with Pfeiffer Vacuum, the coordination and decision-making processes between Pfeiffer Vacuum and the Busch Group as a family-owned company will be significantly simplified and accelerated. Fast decision-making channels enable an even more customer-centric and agile way of working. This will enable Pfeiffer Vacuum and the Busch Group to work together even more sustainably and effectively in a challenging market environment going forward.
The existing relationship agreement between Pfeiffer Vacuum and the Busch Group has already leveraged the apparent potential for synergies. The DPLTA is intended to further simplify collaboration and accelerate decision-making processes in order to be able to collaborate even more sustainably and effectively in a challenging market environment.
The products of both the Busch Group and Pfeiffer Vacuum will continue to be represented with independent names in the market. The existing terms and conditions of employment and the structures under works constitution law are also to be retained on both sides.
The conclusion of a DPLTA requires in particular the consent of the Annual General Meeting of Pfeiffer Vacuum (approval of at least 75% of the share capital represented at the time of the resolution required). It will become effective upon registration with the commercial register at the registered office of Pfeiffer Vacuum.
The shareholders of Pfeiffer Vacuum will be given the opportunity to transfer their shares to Pangea GmbH in exchange for a cash compensation as of the date when the DPLTA becomes effective. Alternatively, a recurring compensation payment – a so-called annual guaranteed dividend – will be granted for the duration of the DPLTA. The annually recurring compensation payment is defined in section 304 of the German Stock Corporation Act (Aktiengesetz – AktG), the compensation in section 305 AktG.
The shares of shareholders who decide to tender their shares in exchange for cash compensation will be transferred to Pangea GmbH.
With the registration of the DPLTA with the commercial register at the registered office of Pfeiffer Vacuum, the right to tender for the outside shareholders emerges. The compensation offer can subsequently be accepted within a period of two months following the announcement of the registration with the commercial register. If a so-called appraisal proceeding (Spruchverfahren) is initiated in which the recurring compensation payment and/or compensation would be subject to judicial review, the period for acceptance of the compensation offer will end no earlier than two months after the date on which the decision on the most recently decided application has been published in the German Federal Gazette (Bundesanzeiger).
Shareholders who decide not to tender their shares receive the predefined recurring compensation payment each year from Pangea GmbH. Therefore, there will no longer be a dividend payment by Pfeiffer Vacuum in the future.
The value of the compensation and the recurring compensation payment is determined by an expert valuation through a recognized auditing firm jointly selected by Pfeiffer Vacuum and Pangea and subsequently reviewed for appropriateness by a court-appointed auditor and published in accordance with the legal requirements. The amount of the appropriate compensation and annual recurring compensation payment is generally determined on the basis of the capitalized earnings value method (Ertragswertverfahren), in accordance with IDW S1 2008, a recognized guideline of the Institut der Wirtschaftsprüfer in Deutschland e.V. (Institute of Public Auditors in Germany).
In determining the compensation, a legal minimum consideration recognized by case law must be considered. This is derived from the so-called volume-weighted average price (“VWAP”) of the last three months prior to the announcement of the definite intention to enter into the DPLTA, which in the case of Pangea GmbH was published on November 6, 2022. For Pfeiffer Vacuum, this minimum amount was €133.07 per share. This figure has been confirmed by the German Federal Financial Supervisory Authority (BaFin).
The current share price as well as the price target issued by analysts for Pfeiffer Vacuum shares do not play any role in the calculation of the compensation and the recurring compensation payment under the DPLTA.
The publication of the values of the compensation and recurring compensation payment will be made in accordance with legal requirements and is expected approximately six to seven weeks before the Annual General Meeting on May 2, 2023.
The DPLTA will be submitted to the Annual General Meeting of Pfeiffer Vacuum on May 2, 2023 for resolution.
If the Annual General Meeting approves the execution of the DPLTA with the qualified majority of 75 %, the DPLTA will be registered with the commercial register at the registered office of Pfeiffer Vacuum one month after the affirmative resolution of the Annual General Meeting, provided that no annulment action (Anfechtungsklage) is filed within the one-month period.
The registration with the commercial register and announcement by the local court (Amtsgericht) are expected to take place approximately two to four weeks later. Once it has been registered with the commercial register, the DPLTA will become effective.
As of this date, the outside shareholders will have the opportunity to tender their shares to Pangea GmbH in exchange for a compensation (for details, see FAQ above).