• Supplementary reasoned opinion according to § 27 WpÜG published
• Support for delisting only as of reaching more than 50% 

Cuxhaven, 29 November 2019. Today, the Board of Management and Supervisory Board of PNE AG have published their supplementary reasoned opinion according to § 27 WpÜG on the voluntary public take-over offer by Photon Management GmbH to the shareholders of PNE AG. Photon Management GmbH (“Bidder”), a whole-owned indirect subsidiary of funds, managed and consulted by Morgan Stanley Infrastructure Inc. and part pf Morgan Stanley’s global private infrastructure platform Morgan Stanley Infrastructure Partners (“MSIP”), has published its offer of 4.00 Euro per PNE share in cash on 31 October 2019, amending the offer by waiving the minimum acceptance threshold as published on 27 November 2019. 

The Board of Management and Supervisory Board of PNE AG have independently from another assessed the total sum of compensatory measures, based on the offered price per ONE share, and continue to consider the offer as adequate. Based on the extensive assessment and the further explanations in the supplementary statement the Board of Management and the Supervisory Board continue to recommend PNE shareholders to accept the offer. The Board of Management and Supervisory Board welcome the fact, that the MSIP offer has already been accepted by a wide range of shareholders of PNE AG. This confirms the Board of Management and Supervisory Board in their support for the offer.  

Investment agreement in the best interest of the company 
Subject of the additional assessment of the amended offer document by the Board of Management and the Supervisory Board was in particular the waiver of the minimum acceptance threshold by the Bidder from initially 50% plus 1 share, which caused the amendment of the offer. As part of the amendment of the offer by the Bidder, PNE AG could have exercised its right to terminate the investment agreement, concluded on 10 October 2019 with the Bidder. The Board of Management and Supervisory Board are of the view, after having independently and carefully analysed and evaluated the advantages and disadvantages of a termination of the investment agreement, that under the present circumstances it is in the best interest of the Company to keep the investment agreement in place.

The Board of Management and Supervisory Board have independently and carefully analysed and evaluated the option to exercise the termination right. In this regard, they have in particular taken into account that a significant part of the obligations of the Company, such as the obligation to support the Offer, had already been fulfilled and, therefore, had not to be considered in this decision anyways. The additional commitment of the Board of Management, that has been given in the investment agreement, to support the Bidder’s taking private strategy, subject to the Board of Management’s fiduciary duties at the relevant point in time, by way of a delisting still only applies in the case that the Bidder acquires a share of more than 50% in the share capital of the Company during the term of the investment agreement, i.e. until April 2022. As long as the Bidder does not acquire such shareholding quota, there is no commitment of the Board of Management to support the taking private strategy of the Bidder.  

The Board of Management and Supervisory Board have further particularly considered, that the following provisions of the investment agreement only fully apply after execution of the offer: 

• intention of the Bidder to support the Scale-Up strategy; 
• protective guarantees by the Bidder concerning essential parts of the company, sites and production facilities, employees and brands; 
• obligation of the Bidder, not to pursuit the distribution of special dividends or a change to the dividend policy;
• limitation of the nomination of Supervisory Board members by the Bidder to a third of the provided positions at a total share of more than 20% and less than 50%, as well as guaranteeing the appointment of at least one independent and not by the Bidder proposed member of the Supervisory Board in line with the German Corporate Governance Code; and 
• obligation of the Bidder for last resort financing as well as bridging financing. 

The aforementioned provisions are relevant to PNE AG, even after waiving the minimum acceptance threshold, since it is likely, that the Bidder will in any case represent a sufficient number of voting rights to reach the simple majority at future annual general meetings. This conclusion is based on the latest notification of the Bidder, holding almost 40% of the outstanding PNE shares.

The entire supplementary opinion of the Board of Management and the Supervisory Board is published on the company website https://ir.pne-ag.com/en/share/#section220.