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Integra brochure
(pdf - 1.6 mb)


April 24, 2014

Proposed Merger of Integra Group with Integra Management Holdings and proposed delisting of Integra GDRs

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION 

Proposed Merger of Integra Group with Integra Management Holdings and proposed delisting of Integra GDRs
On 26 March 2014, it was announced that Integra Group (“Integra” or the “Company”) had received a proposal from certain members of the Integra management team (the “Participants”) providing the outline terms of an acquisition of Integra through a merger of Integra (the "Merger") with a company formed by the Participants. It was also announced that Integra's board of directors had formed an independent committee (the “Independent Directors”) comprised solely of directors of the Company who are unaffiliated with any of the Participants to negotiate exclusively the terms of the Merger with the assistance of the Company’s financial and legal advisers.
Integra announces that it has agreed the terms of the Merger with Integra Management Holdings (“Integra Management Holdings”). An Extraordinary General Meeting of the shareholders of Integra (the “Shareholders”) is being convened for 21 May 2014 at 7 a.m. EST (the “Extraordinary General Meeting”). The Extraordinary General Meeting will be held at Intertrust Corporate Services (Cayman) Limited, 190 Elgin Avenue, George Town, Grand Cayman KY1-9005, Cayman Islands.
At the Extraordinary General Meeting, the Shareholders will be asked to consider and vote upon a proposal to approve the plan of merger (the “Plan of Merger”) between Integra Management Holdings, the Company and Foreston Holdings Limited (“Foreston”). Under the terms of the Plan of Merger, the Company will be merged with Integra Management Holdings, with the Company continuing as the surviving company after the Merger. The Plan of Merger is made pursuant to a merger implementation agreement dated 23 April 2014 and made between Foreston, Integra Management Holdings and the Company (the “Merger Implementation Agreement”).
Integra further announces that, subject to the approval of the Plan of Merger and the Merger becoming effective (the date on which the Merger becomes effective being the “Implementation Date”), it intends to cancel the listing of the global depositary receipts (“GDRs”) representing its shares on the Official List of the UK Financial Conduct Authority and the admission of the GDRs to trading on the London Stock Exchange with effect from 27 May 2014 (the “GDR Delisting”). Integra has also provided written notice to JPMorgan Chase Bank, N.A. as depositary for the GDR programme (the “Depositary”) terminating the deposit agreement in respect of the GDRs with effect from the date falling five business days after the Implementation Date. A separate notification of such termination and a notification that the Extraordinary General Meeting has been convened and setting out the procedure for GDR holders to exercise their voting rights will be issued by the Depositary to GDR holders.
Integra Management Holdings is a Cayman Islands company formed solely for purposes of the Merger. At the anticipated effective time of the Merger, approximately 27.8 per cent. of the Company’s outstanding Class A Common Shares (the “Shares”) will be held by Foreston, a company incorporated in Cypruswith company number HE 329596 of Afentrikas, 4, Afentrica Court, Office 2, 6018, Larnaca, Cyprus. Foreston is, in turn, wholly-owned by the Participants. Further, at the effective time of the Merger, approximately 1.4 per cent. of the Shares will be held by Taplan Management Limited as trustee for certain of the Participants (the “Trustee”). 
If the Merger were passed at the Extraordinary General Meeting by the requisite percentage of the Shareholders and consummated, each of the Shares other than the Excluded Shares and the Dissenting Shares (each as defined below) would be cancelled in exchange for payment of cash consideration of US $10 per Share (the “Merger Consideration”).
The “Excluded Shares” are (i) the Participants’ Shares held by the Trustee at the time of the Merger and (ii) the Participants’ Shares that will be held by Foreston at the time of the Merger. The “Participants’ Shares” are (i) Shares that are currently either held directly by the Participants or represented by GDRs held by the Participants and which will be transferred to Foreston by the Participants prior to the Merger, following surrender of GDRs and registration of the corresponding Shares where relevant and (ii) Shares that are currently held by the Trustee for the benefit of Participants. The Participants’ Shares represent approximately 29.2 per cent. of the Company’s total outstanding Shares.
The “Dissenting Shares” are any Shares owned by “Dissenting Shareholders” who are Shareholders who have validly exercised and have not effectively withdrawn or lost their rights to dissent from the Merger in accordance with Section 238 of the Cayman Islands Companies Law, as amended (the “Cayman Companies Law”), which will be cancelled for their fair or other agreed value.
The Merger Consideration (equivalent to US $20 per GDR) represents a premium of 33% to the closing price of GDRs on 25 March 2014, which was the last trading date immediately prior to the Company’s announcement on 26 March 2014 that it had received a proposal from the Participants providing the outline terms of the Merger.
The financing of the Merger Consideration is not unconditional. It is proposed that the Merger Consideration will be financed by approximately US $34 million of cash to be held by Integra and the balance from a US $30 million bank facility provided to Foreston (the “Acquisition Facility”). The majority of the conditions precedent to the draw down of an advance under the Acquisition Facility is within the control of Foreston, but two of the conditions precedent are not solely within the control of Foreston and/or the Participants, specifically, the passing of the requisite resolutions at the Extraordinary General Meeting and there being no material adverse change in the business, assets, operations or financial condition of the Integra Group. The Merger will not be completed unless Intertrust Netherlands B.V. (the “Paying Agent”) has received sufficient cash to pay the Merger Consideration.
The Merger cannot be implemented unless the Plan of Merger and transactions contemplated by the Plan of Merger, including the Merger, are passed by an affirmative vote of a majority of not less than two-thirds of those Shareholders present and entitled to vote and voting in person or by proxy at the Extraordinary General Meeting. It is expected that the holders of the Shares currently owned directly or indirectly by the Participants and which comprise approximately 32.5 per cent. of the issued Shares will vote in favour of resolutions to be voted on at the Extraordinary General Meeting.
Pursuant to the terms of the Merger Implementation Agreement, in addition to approval by Shareholders, the implementation of the Plan of Merger is conditional, inter alia, on (i) the approval of the Merger by the Federal Antimonopoly Service of Russia (the “FAS CP”); (ii) none of the Company, Integra Management Holdings or Foreston, any of their respective directors or the Participants becoming subject to sanctions; and (iii) the Paying Agent receiving sufficient cash to pay the Merger Consideration, to be financed by cash held by Integra and the Paying Agent cash drawn down under the Acquisition Facility.
It is anticipated that the FAS CP will be satisfied prior to 21 May 2014, the proposed date of the Extraordinary General Meeting. If it were not, then it is intended that the Extraordinary General Meeting be adjourned for up to two weeks with a view to the FAS CP being satisfied before Shareholders vote at the reconvened Extraordinary General Meeting.
If by 5 p.m. EST on Monday 30 June 2014, the conditions precedent to the Merger have not been satisfied or waived (where applicable), the Merger will not proceed and the Merger Implementation Agreement will be terminated.
The Independent Directors consider the terms of the Merger to be fair and reasonable so far as the Qualifying Shareholders are concerned and unanimously recommend that Shareholders vote in favour of the proposal to approve the Plan of Merger. The Independent Directors have been advised by Deutsche Bank AG, London Branch in relation to the Merger and Deutsche Bank AG, London Branch has provided a written opinion regarding the fairness of the Merger Consideration which is available on the Company’s websitewww.integra.ru/eng.
A circular providing notice of the Extraordinary Meeting and containing detailed information about the Merger and the Extraordinary General Meeting (the “Circular”) is being dispatched to Shareholders and is also available on the Company’s website – www.integra.ru/eng.
Dissenting Shareholders will have the right to seek payment of the fair value of their Shares if the Merger is completed, but only if they deliver to the Company, before the vote is taken at the Extraordinary General Meeting, a written objection to the Merger complying with the requirements of Section 238 (2) and (3) of the Cayman Companies Law and subsequently comply with all procedures and requirements of Section 238 of the Cayman Companies Law for the exercise of the right to dissent. The fair value of the Dissenting Shares as determined under that statute, could be more than, the same as, or less than the Merger Consideration which Dissenting Shareholders would receive pursuant to the Plan of Merger if such Dissenting Shareholders do not exercise the right to dissent.
Dissenters’ rights are available only to registered holders of Shares. Shareholders wishing to dissent must comply with the procedures and requirements for exercising dissenters’ rights with respect to the Shares under Section 238 of the Cayman Companies Law, as further detailed in the Circular.
HOLDERS OF GDRS ALONE WILL NOT HAVE A RIGHT TO ATTEND OR VOTE AT THE EXTRAORDINARY GENERAL MEETING OR TO DISSENT UNLESS THEY SURRENDER THEIR GDRS AND BECOME SHAREHOLDERS BEFORE THE CLOSE OF BUSINESS IN THE CAYMAN ISLANDS ON 2 MAY 2014. HOWEVER, A GDR HOLDER MAY, IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THE GDR DEPOSIT AGREEMENT, DELIVER TO THE DEPOSITARY VOTING INSTRUCTIONS IN RESPECT OF SOME OR ALL OF THE SHARES REPRESENTED BY ITS GDRS BY 12.00 PM (EST) ON 15 MAY 2014, WHEREUPON THE DEPOSITARY SHALL USE ITS REASONABLE ENDEAVOURS TO VOTE SUCH SHARES IN ACCORDANCE WITH SUCH VOTING INSTRUCTIONS AT THE EXTRAORDINARY GENERAL MEETING.
Neither the LSE nor any other securities regulatory agency has approved or disapproved the Merger, passed upon the merits or fairness of the Merger or passed upon the adequacy or accuracy of the disclosure in this announcement, the Circular or in the notice of the Extraordinary General Meeting.
Deutsche Bank AG, London Branch is acting as financial adviser to the Independent Directors. Latham & Watkins LLP is acting as legal adviser to the Independent Directors.

Enquiries:
Artem Dudka
Vice-president for Legal Affairs
Integra group
email: ADudka@integra.ru
tel.: +7 495 933062 ext. 10182
 
 
Andrew Chulack
Managing Director
Head of Global Banking Russia and CIS
Deutsche Bank AG
tel: +7 495 6420653
 
 
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