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 website –
www.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.