VA Technologie AG

euro adhoc: VA Technologie AG
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Statement of the VA TECH Managing Board concerning the takeover offer by Siemens AG Österreich

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• Neutral position of the VA TECH Managing Board to the takeover offer • Offer price commercially inadequate in the opinion of the Managing Board, JPMorgan and Ernst&Young • Improved result forecast for 2005 • Extraordinary General Shareholders’ Meeting on January 17, 2005

The VA Technologie AG (VA TECH) Managing Board takes a neutral position to the takeover offer from Siemens AG Österreich (Siemens), which was announced on December 10, 2004. In its statement issued in accordance with the Austrian Takeover Act, the VA TECH Managing Board does not make a recommendation but presents the following main arguments for acceptance or rejection of the offer:  

Arguments for acceptance: • The offer price is above the average 6-months share price before the announcement of the intention of the takeover offer by Siemens. • In the case of a successful takeover offer, those shareholders not accepting the offer could face a loss in liquidity and value on their VA TECH shares. • The integration of the VA TECH business into a financially strong, globally operating group such as Siemens may enhance future business opportunities.

Arguments against acceptance: • Three of the four VA TECH Divisions (Power Generation, Transmission and Distribution, Infrastructure) are in direct competition to Siemens with overlapping markets and locations especially in Europe. This corresponds to approximately three quarters of VA TECH sales. This could potentially lead to a considerable reduction in the work force.   • Tendered shares have to be deposited in a sealed account until anti-trust law approval has been obtained. This means that shareholders may be unable to dispose of their shares for a period of several months and should the takeover offer fail, bear the economic risk, as the freeze of the shares renders a reaction to any share price decreases — which may also result from factors outside the corporate sphere such as market shifts or political developments — impossible. Nonetheless, during this period the shareholder can exercise the voting rights of the deposited shares.   • The VA Tech Managing Board and its advisor JPMorgan consider the offer price as inadequate from a financial point of view.

Taking into account the valuation analyses undertaken by JPMorgan and its fairness opinion, the VA TECH Managing Board has come to the conclusion that the offer price of EUR 55 per share is inadequate from a financial point of view.

As an independent expert advisor mandated pursuant to §14 of the Takeover Act, Ernst&Young Wirtschaftsprüfungsgesellschaft mbH regards the assessment of the Managing Board as appropriate and also finds the offer price inadequate.

The offer price of EUR 55 per VA TECH share offered by Siemens is based on published analyst equity research reports. The average profit for the period for 2005 forecasted in these analyst reports amounts to around EUR 54 m. On the basis of cautious assumptions, the VA TECH Managing Board currently assumes a profit for the period in 2005 that will be approximately 22% higher (EUR 66 m). VA TECH has created a solid basis for achieving or even surpassing the expected result improvements for the period of the business plan. The cornerstones in this regard are the systematic implementation and successful conclusion of the restructuring programme in 2004 with a sizeable, resultant reduction of the fixed cost base, the sale and/or closure of unprofitable units and the strong order intake in 2004 (EUR 4,130 m as per the end of November, an increase of around 10% over the figure for the preceding year and an increase of 12% adjusted for the businesses disposed in 2004). The latter means that already some 70% of the sales planned for 2005 are secured by the order backlog.

end of announcement                                euro adhoc 17.12.2004 07:27:03
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Further inquiry note: Bettina Pepek Press Officer

phone: +43 1/89100-3400 fax: +43 1/89100-3431 e-mail: bettina.pepek@vatech.at

Branche: Technology
ISIN:      AT0000937453
WKN:        093745
Index:    WBI, ATX Prime, ATX
Börsen:  Berliner Wertpapierbörse / free trade
              Bayerische Börse / free trade
              Wiener Börse AG / official dealing



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