FOR IMMEDIATE RELEASE
---------------------
PROCTER & GAMBLE LAUNCHES TENDER OFFER FOR WELLA AG
WITH INCREASED PRICE FOR PREFERENCE SHARES
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EXECUTIVE BOARD OF WELLA AG WELCOMES INCREASE IN OFFER PRICE
TO EUR 65 PER SHARE
CINCINNATI, USA, and SCHWALBACH, GERMANY - April 28, 2003 - Procter &
Gamble Germany Management GmbH (P&G), a wholly owned subsidiary of The Procter &
Gamble Company (Procter & Gamble) (NYSE: PG), announced today the launch of its
tender offer for all Wella shares beginning April 28. BaFin, the German
regulatory authority, has approved the publication of the formal tender offer
document.
P&G also said it is increasing its offer for preference shares to EUR
65 per share. Following discussions with the Wella Executive Board (Vorstand),
and in anticipation of its support, P&G has increased the offer for the
preference shares.
In a statement about P&G's increased offer price for preference shares,
Wella's Executive Board said, "The Executive Board welcomes P&G's decision to
increase the offer price for the preference shares by EUR 3.50 to EUR 65 per
share."
Procter & Gamble's Chief Financial Officer, Clayt Daley said, "We are
pleased with the Wella Executive Board's reaction to our improved offer price.
This price is final and will not change during the tender period. P&G has no
intention of increasing the share price irrespective of the number of shares
tendered."
"The combination of Wella and Procter & Gamble is a strong strategic
fit and will create growth opportunities for Wella and many of Wella's
employees," said Bruce L. Byrnes, vice chairman of the board and
president-global beauty care and global health care. "Wella has a strong
management team who have played a key role in Wella's business success. We look
forward to working with the leadership team to continue to build the Wella
business."
o P&G recently signed an agreement to purchase 77.6% of the voting
stock in Wella AG from its majority shareholders.
o P&G will offer a cash price of EUR 92.25 per share for the voting
shares, and EUR 65 per share for the preference shares, valuing
the total shares at about EUR 5.5 billion.
o P&G also will provide price insurance to shareholders on the offer.
o The offer period will run until May 28. An extended two-week offer
period, as required by German law, will probably start on June 6.
o This deal is subject to normal regulatory review and government
approvals in various markets including the European Union and the
USA.
ATTRACTIVE PREMIUM
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Both ordinary (voting) and preference shareholders are receiving a
significant premium.
The preference shares benefited from strong appreciation due to
acquisition speculation from October 2002 until P&G's announcement on March 18,
2003. On October 11, 2002, Wella's preference shares were trading at around EUR
42. The preference offer price (EUR 65 per share) represents about a 55% premium
over the pre-speculation price. During that same time period key market indexes
declined. The DAX fell by 15%, the MDAX by 2% and the FTSE E 300 Personal Care &
Household Products by 16%.
Despite this speculation run up, the preference price (EUR 65 per
share) represents an additional premium of about 14% compared to the three-month
weighted average share price prior to P&G's March 18, 2003, acquisition
announcement.
The offer price of EUR 92.25 per voting share represents about a 44%
premium compared to the three-month weighted average share price prior to P&G's
acquisition announcement. This premium reflects the benefits and associated
synergies received by P&G in gaining control of the company through the
execution of a single share purchase agreement with the majority shareholders.
German law requires that the same price is offered to all holders of the same
class of shares. As a result, the remaining voting shareholders also will
benefit from the control premium.
OFFER PRICE INSURANCE
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This offer price will not change throughout the tender period. However,
if within one year after expiration of the acceptance period, a profit transfer
agreement, control agreement or "squeeze-out" takes place, and a cash
consideration to Wella shareholders is determined above P&G's offer price for
voting or preference shares, P&G will improve the offer price for shareholders
who have already tendered their shares. This insurance protects Wella
shareholders and allows them to tender immediately and not be disadvantaged by
potential future actions cited above. This obviously provides Wella shareholders
with an additional safety net.
STRATEGIC RATIONALE: TWO COMPLEMENTARY BUSINESSES
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The Wella acquisition is a strong strategic fit for Procter & Gamble
globally and strengthens the company's beauty business across Eastern and
Western Europe and in Latin America. This acquisition is expected to contribute
about EUR 3.4 billion in sales to Procter & Gamble's overall beauty business -
approximately EUR 1.6 billion in the professional hair care segment; EUR 1.0
billion in the retail hair care segment; and EUR 800 million in fragrances.
Wella's business activities also are highly complementary to Procter &
Gamble's.
o Wella's strength in professional hair care complements Procter &
Gamble's strength in retail hair care.
o Wella's strength in color and styling complements Procter & Gamble's
strength in shampoos and conditioners.
o Wella's strength in Europe complements Procter &Gamble's strength in
North America.
o Wella's fragrance business is targeted primarily to females; Procter
& Gamble's to males.
Procter & Gamble expects to achieve synergies in both companies as a
result of the takeover, in particular in the areas of knowledge transfer,
purchasing, administration and production. Subject to a more detailed analysis,
for the medium term the synergy potential is estimated to amount to
approximately EUR 300 million per year.
TENDERING SHARES
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Wella shareholders will be contacted by their custodian bank or
financial institution with instructions on how to tender their shares. A copy of
the offer document, in German, is available on WWW.PROCTERUNDGAMBLE.DE. It also
will be sent to all shareholders along with a form, which shareholders can
complete as a declaration of acceptance. The completed form should be returned
to their custodian bank or financial institution by May 28.
An English language translation of the offer document for shareholders
residing in the USA can be requested via a toll-free number (1-800-742-6253). It
is also published on the internet at www.pg.com.
An information campaign for investors, consisting of a web site,
advertising in select German media, a recorded hotline and a summary offer
document will be launched with the tender offer.
ABOUT WELLA
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Founded in 1880, Wella is a leading beauty care company selling its
products in more than 150 countries. The company's three divisions include
professional hair care, retail hair care, and cosmetics and fragrances. Some of
its well-known brands include Wella(R), Koleston(R), Sebastian(R), Graham
Webb(R) and High Hair(R) professional hair care lines; Wellaflex(R),
ShockWaves(R), Ultra Sheen(R), and Vivality(R) consumer retail hair care
products; Gucci(R), Rochas(R), Escada(R) and Montblanc(R) fragrances. For more
information, please visit the website at WWW.WELLA.COM.
ABOUT PROCTER & GAMBLE
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Procter & Gamble markets a range of well-known beauty and health care
brands including: Pantene(R), Head & Shoulders(R), Olay(R), Clairol Nice`n
Easy(R), Herbal Essences(R), Cover Girl(R), Max Factor(R), Noxzema(R), Old
Spice(R), Hugo Boss(R), Crest(R), Vicks(R), Actonel(R), PUR(R) and more. Procter
& Gamble employs nearly 102,000 people in more than 80 countries. For more
information please visit the website at WWW.PG.COM.
ALL STATEMENTS, OTHER THAN STATEMENTS OF HISTORICAL FACT INCLUDED IN THIS NEWS
RELEASE, ARE FORWARD-LOOKING STATEMENTS, AS THAT TERM IS DEFINED IN THE PRIVATE
SECURITIES
LITIGATION REFORM ACT OF 1995. IN ADDITION TO THE RISKS AND UNCERTAINTIES NOTED
IN THIS NEWS RELEASE, THERE ARE CERTAIN FACTORS THAT COULD CAUSE ACTUAL RESULTS
TO DIFFER MATERIALLY FROM THOSE ANTICIPATED BY SOME OF THE STATEMENTS MADE.
THESE INCLUDE: (1) THE ACHIEVEMENT OF EXPECTED SAVINGS ASSOCIATED WITH THE
POTENTIAL INTEGRATION OF WELLA AG'S ORGANIZATION STRUCTURE INTO PROCTER &
GAMBLE; (2) THE ABILITY TO ACHIEVE BUSINESS PLANS, INCLUDING GROWING VOLUME
PROFITABLY, DESPITE HIGH LEVELS OF COMPETITIVE ACTIVITY, ESPECIALLY WITH RESPECT
TO THE PRODUCT CATEGORIES AND GEOGRAPHICAL MARKETS IN WHICH THE COMPANY HAS
CHOSEN TO FOCUS; (3) THE ABILITY TO MANAGE AND MAINTAIN KEY CUSTOMER
RELATIONSHIPS; (4) THE ACHIEVEMENT OF GROWTH IN SIGNIFICANT DEVELOPING MARKETS
SUCH AS CHINA, TURKEY, MEXICO, THE SOUTHERN CONE OF LATIN AMERICA, THE COUNTRIES
OF CENTRAL AND EASTERN EUROPE AND THE COUNTRIES OF SOUTHEAST ASIA; (5) THE
ABILITY TO SUCCESSFULLY MANAGE REGULATORY, TAX AND LEGAL MATTERS, INCLUDING
RESOLUTION OF PENDING MATTERS WITHIN CURRENT ESTIMATES; (6) THE ABILITY TO
SUCCESSFULLY IMPLEMENT, ACHIEVE AND SUSTAIN COST IMPROVEMENT PLANS IN
MANUFACTURING AND OVERHEAD AREAS; (7) THE ABILITY TO SUCCESSFULLY MANAGE
CURRENCY (INCLUDING CURRENCY ISSUES IN LATIN AMERICA), INTEREST RATE AND CERTAIN
COMMODITY COST EXPOSURES; (8) THE ABILITY TO MANAGE THE CONTINUED POLITICAL
AND/OR ECONOMIC UNCERTAINTY IN LATIN AMERICA (INCLUDING VENEZUELA) AND WAR IN
THE MIDDLE EAST, AS WELL AS ANY POLITICAL AND/OR ECONOMIC UNCERTAINTY DUE TO
TERRORIST ACTIVITIES OR WAR (INCLUDING KOREA); AND (9) THE SUCCESSFUL
ACQUISITION, TRANSITION, INTEGRATION, AND OPERATION OF THE WELLA BUSINESS. IF
THE COMPANY'S ASSUMPTIONS AND ESTIMATES ARE INCORRECT OR DO NOT COME TO
FRUITION, OR IF THE COMPANY DOES NOT ACHIEVE ALL OF THESE KEY FACTORS, THEN THE
COMPANY'S ACTUAL RESULTS MIGHT DIFFER MATERIALLY FROM THE FORWARD-LOOKING
STATEMENTS MADE HEREIN.
# # #
MEDIA RELATIONS CONTACTS:
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Before 9:00 a.m. EST - Terry Loftus, 513.983.9736
After 9:00 a.m. EST - P&G Corporate Media Center in the U.S.: 1.866.PROCTER or
1.866.776.2837
P&G Corporate Contact in Germany: Detlef Schermer, 49.6196.89.4369 or
49.6196.89.4577
P&G INVESTOR RELATIONS CONTACT:
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John Goodwin, 513.983.2414
RETAIL SHAREHOLDER CONTACTS:
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U.S. Shareholders: 1.800.742.6253
German Shareholders: 0800.104.1041