Exhibit 99.13
[ALCAN INC. LETTERHEAD]
September 12, 2003
Xxxx-Xxxxxx Xxxxxx,
Chairman and Chief Executive Officer,
Pechiney,
0, Xxxxx xx Xxxxxxxxxx Xxxxxxxx,
00000 Xxxxx, Xxxxxx
Dear Xxxx-Xxxxxx,
This letter will confirm our recent discussions in which Mr. X. Xxxx
Xxxxxx participated, as well as our agreement with respect to the terms of a
revised offer by Xxxxx to acquire all of the outstanding equity securities of
Pechiney based on a favorable recommendation from the Pechiney Board at its
meeting scheduled for today, subject to the terms set forth herein. The attached
Final Terms represent our mutual understanding as to the terms of the revised
offer, which you will submit to your Board of Directors together with your
recommendation that the Board of Directors approve these Final Terms and
recommend that Pechiney shareholders accept the revised offer. Following the
Board's approval and recommendation at such meeting, Xxxxx undertakes to file
(depot d'une offre revisee) as promptly as possible, and in any event by no
later than midnight on September 16, 2003, the revised offer with the relevant
French and U.S. regulatory authorities.
If, following the filing of the revised offer with the CMF (depot de
l'offre revisee), the revised offer is not deemed acceptable (recevable) by the
CMF, or the CMF requires that the terms of the revised offer be modified for the
revised offer to become acceptable (recevable), Alcan and Pechiney will work
together to develop an alternative offer that is acceptable (recevable) by the
CMF and that is economically equivalent to the terms set forth in Schedule FT-1
from the perspective of Alcan as well as Xxxxxxxx's shareholders.
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Please confirm your agreement with the foregoing by signing and
returning to the undersigned the enclosed copy of this letter. We look forward
to working with you to complete the combination of our businesses in an
amicable, expeditious and mutually beneficial fashion.
Sincerely,
Xxxxxx Xxxxx
AGREED AS OF THE ABOVE DATE
Xxxx-Xxxxxx Xxxxxx, on behalf of XXXXXXXX
FINAL TERMS
Except as described in this document, Alcan will not change the terms of its
offer from that described in the Note d'Information. The elements of the agreed
terms are:
1. Schedule FT-1 sets forth the agreed terms of Xxxxx's improved offer.
2. Schedule FT-2 restates certain conditions and undertakings of Alcan that
are included in or that relate to the offer.
3. In consideration of the improved offer:
a. The Pechiney Board of Directors will agree to recommend that
Pechiney shareholders accept Xxxxx's revised offer as the best
value alternative available; Pechiney will cease pursuing, and
will not solicit, other alternatives, it being understood that
the Pechiney Board of Directors may be required to consider a
superior proposal to the extent required by its fiduciary
duties and French stock exchange regulations.
b. Pechiney will use its best efforts to support and assist Xxxxx
in receiving all necessary governmental and regulatory
approvals or consents and in consummating the revised offer as
soon as possible with a view to minimizing any adverse
financial or operational impact.
i. Such approvals and consents include: MTF approval,
other antitrust approvals, the COB's visa, the
CMF's declaration of its acceptance of the terms
of the revised offer, and the SEC's declaring
effective Xxxxx's registration statement.
ii. Xxxxxxxx's best efforts will include having their
accountants consent to the inclusion of their
audit opinion on Pechiney's financials in the
registration statement, assisting in preparation
of pro forma financial statements, cooperating
with any regulatory inquiries, assisting Xxxxx, at
Xxxxx's request, in Xxxxx's dealings with the MTF
and other governmental and regulatory authorities
in order to obtain such approvals as promptly as
practicable and promptly advising Alcan of any
communications between Pechiney and any such
authorities.
c. Pechiney and Xxxxx will each issue a press release in the
forms set forth on Schedule FT-3 as soon as practicable and as
legally required following Xxxxxxxx's Board meeting to be held
today. It is expected that these press releases will be issued
following the Board meeting and prior to the commencement of
trading of the Pechiney shares on Euronext and the opening of
the New York Stock Exchange.
4. Pending announcement of the Pechiney Board recommendation, the parties
will maintain confidentiality of these terms.
5. If the Offer is successful Alcan intends to appoint to the Alcan Board one
qualified individual who is proposed by the Pechiney Board after
reasonable consultation with Xxxxx. In the event that more than 75% of
Pechiney's share capital and voting rights on a fully diluted basis are
tendered in the Offer, Xxxxx intends to appoint to the Alcan Board a
second such individual.
6. If 2/3 or more but less than 95% of the Pechiney share capital or voting
rights on a fully diluted basis is tendered in the Offer, Alcan shall
reopen the tender offer in accordance with Article 5-2-3-1 of the CMF
Regulation.
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SCHEDULE FT-1
AMENDED FINANCIAL TERMS
PECHINEY ORDINARY SHARES/BONUS ALLOCATION RIGHTS (10):
- Pure Offre Publique Mixte - no subsidiary cash or share offers.
- Cash - E24.6 per Pechiney share, subject to increase as
described below.
- Alcan shares - E22.9 in Alcan shares per Pechiney share; each
Alcan share will be valued at the greater of (x) E27.40 or (y)
the volume-weighed average of the Alcan stock price on the
NYSE for 10 trading days chosen at random from the 30 trading
days ending 5 days prior to cloture (with each day's price
expressed in euros based upon E/$ exchange rate on the same 10
trading days);
- On the date that the value of the Alcan shares for purposes of the Offer
is set and publicly announced, i.e., 5 trading days prior to cloture,
Alcan may, as its discretion and subject to the consent of the sponsoring
banks to the Offer, choose to replace any portion of the Alcan share
consideration component with cash in an amount equal to the value of the
Alcan shares so replaced determined on the same basis.
PECHINEY OCEANES:
- Cash -- E83.40 per Pechiney XXXXXX, subject to increase as described
below.
INCREASE IN OFFER PRICE:
- If the Offer is successful and more than 95% of Pechiney's share capital
and voting rights on a fully diluted basis are tendered in the Offer
(including any reopened offer pursuant to Article 5-2-3-1 of the CMF
Regulation), Alcan will provide all Pechiney shareholders that have
tendered their shares with an additional E1 in cash per tendered share. In
this event, Alcan will provide each holder of Pechiney XXXXXX tendering
OCEANEs an additional E0.4 per tendered XXXXXX.
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SCHEDULE FT-2
EMPLOYMENT AND SOCIAL COMMITMENTS
- Alcan does not currently intend to make material changes to Pechiney's
existing industrial workforce in France, beyond those that are
contemplated in Pechiney's current strategic restructuring plans and
closure or workforce reduction announcements, subject to divestiture
commitments made to the MTF.
- Alcan will for a period of not less than 10 years maintain the Pechiney
brand name as it relates to primary aluminum cell technology and will
continue to maintain the relevant trademarks for such purpose.
- Alcan currently plans to maintain Pechiney's existing senior management
team and head office operations in place for a transitional period.
- Alcan will establish in France the global headquarters of the following
business components: Packaging Group, Engineered Products Group, and the
Aerospace Business unit.
- Alcan will locate in France the headquarters of its European smelting
operations and the global center for aluminum smelter cell technology.
- Alcan recognizes the importance of retaining and integrating Pechiney's
management into the combined entity. Toward this end, and in addition to
anticipated normal integration process, Alcan will review a list of the
senior managers in the top two levels of seniority as submitted by
Xxxxxxxx. Alcan will put in place a merit based review process to consider
these individuals for incumbency or for similar positions in the combined
entity.
- The process to be used by Alcan will comprise a three-person review
committee with two members from Xxxxx and one member from Pechiney. The
committee will have the following functions:
- The committee will consider individuals from the list, who are not,
during the transition period, offered similar positions within the
combined entity. In this instance, the committee will undertake a
comprehensive evaluation of each individual in an attempt to
identify an appropriate position that would maximize the skills and
potential of the individual in the combined entity. The committee
would then put in place the proper process to offer that individual
such a position within a reasonable timeframe.
- The committee will also be used to review such position offers to
individuals from the list in the event there is a question as to
whether or not the position being offered to the individual is
judged to be similar. The decision of the committee is final in this
regard.
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- In the event an individual from the list holds a position identical
to one that exists within Alcan and, only one such position is
required in the combined entity, then the committee will meet to
consider, in a comprehensive evaluation of both incumbents to
determine the proper placement recommendation to management. In the
event the committee cannot agree on a recommendation, the committee
will appoint an outside personnel professional to make a evaluation
of the individual and make a recommendation to the committee, after
which a vote of the committee would be held and a determination made
by majority vote will be considered final and binding.
- Alcan has not had access to important information relating to Xxxxxxxx's
stock option plans, including the terms of these plans. If the offer is
successful, Alcan will undertake to holders of Pechiney stock purchase
options and Pechiney stock subscription options that were not exercised
during the offer period to exchange, at the termination of the transfer
restriction period, the Pechiney shares received as a result of exercising
the options for Alcan common shares pursuant to an exchange ratio
equivalent to the consideration (the "Offer Consideration") paid by Alcan
in the improved offer (based on the average Alcan share price as
calculated in valuing the share portion of the Offer as under Schedule
FT-1). Alcan will also propose to holders of Pechiney stock options the
ability to receive Alcan stock options in exchange for the cancellation of
existing Pechiney stock purchase options or stock subscription options at
an exchange ratio equivalent to the Offer Consideration. Alcan will
propose liquidating agreements to the holders of Pechiney stock options to
give effect to these provisions. Pechiney has advised Alcan that the terms
of its stock option plans will permit the steps outlined above.
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SCHEDULE FT-3
FORMS OF PRESS RELEASES
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