Florence/Milan, June 28, 2007

 

·  Following the acquisition completed by Targetti Sankey S.p.A. (“Targetti”) of Louis Poulsen Lighting A/S, “Louis Poulsen”, (a group operating in the lighting market), Giampaolo Targetti, Lorenzo Targetti, Stella Targetti, Antonio Orlandi, Domenico Neri S.r.l., Carlo Marchi, Federico Marchi, Filippo Marchi, Gioia Falck and Ferruccio Marchi, reached a strategic agreement with private equity funds managed by 3i Investments Plc and by 3i Gestion SA (jointly “3i”) to invest into a newly-incorporated special purpose vehicle (“Newco”), in which will be transferred the shareholdings in Targetti Sankey S.p.A. owned by the said subjects; these represent the majority of Targetti share capital.

· Upon completion of the agreement, Newco will promote a mandatory takeover bid on Targetti free- float at a price of 7.40 euros per share.

 

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Today, further to the signing of a sale and purchase agreements of Louis Poulsen on behalf of Targetti Sankey S.p.A. (“Targetti”, the “Issuer” or the “Company”), Targetti shareholders representing about 68.5% of the relative share capital, Giampaolo Targetti (38.73%), Lorenzo Targetti (3.71%), Stella Targetti (3.34%), Antonio Orlandi (5.34%), Domenico Neri S.r.l. (14.20%), Carlo Marchi (0.63%), Federico Marchi (0.62%), Gioia Falck (0.63%), Filippo Marchi (0.63%) e Ferruccio Marchi (0.63%) (jointly referred to as “Targetti’s Shareholders”) entered into a strategic agreement (the “Investment Agreement”) with private equity funds managed by 3i Investments Plc and 3i Gestion SA (jointly referred to as “3i”), with the aim of allowing Targetti to benefit of the managerial and operating know-how of 3i; this through a transaction resolved in the legal requirement of promoting a mandatory takeover bid on all Targetti’s share.

The agreement was signed to de-list Targetti pursuant to a takeover bid followed by a residual bid at the appropriate conditions. If the conditions not exist, Issuer will be de-listed by merger into a non-listed company.

 

According to the Investment Agreement, Targetti’s Shareholders will transfer 13,020,756 common shares in Targetti, representing about 68.5% of the share capital (the “Transfer”) by means of a share capital increase in a newly-incorporated special purpose vehicle (“Newco”).

 

The conventional value of each common share transferred shall be 0.52 euros.

 

Concurrent with the transfer, Newco will resolve upon a further share capital increase to be paid up in cash by 3i, for a total amount of 56 million euros. Within said increase, the value of Targetti’s shares is 7.40 euros each.

 

Pursuant to the transfer by Targetti’s Shareholders and the share capital increase reserved to 3i, 63.2% of Newco’s share capital will be held by Targetti’s Shareholders and about 36.8% by 3i.

 

Moreover, the Investment Agreement sets forth that the Parties undertake to enter into a shareholders’ agreement (the “Shareholders’ Agreement”) by the execution date of the transaction and with effectiveness from that date in Newco that will inter alia provide for:

-   the right of 3i to appoint a number of minority directors in Newco and Targetti;

-   the veto right of the directors appointed by 3i and of 3i itself as shareholder (where applicable), on major issues such as budget approval, business plans and amendments to the company by-laws;

-  co-sale rights in favour of 3i and of Domenico Neri S.r.l. and pre-emptive rights in favour of all shareholders, as well as joint-sale rights and obligations should the Issuer not be listed again on a regulated market, after the de-listing.

 

The Execution of the Investment Agreement and the fulfilment of all the abovementioned obligations and negotiations are subject to the following conditions:

-  Any relevant Antitrust Authority at a domestic or international level has granted its own full and unconditional authorization to the completion of the transaction;

-   The acquisition of Louis Poulsen Lighting A/S has been completed;

-   The Shareholders’ Agreement has been signed;

-   The certified report as per Article 2465 of the Italian Civil Code confirms that the value of the shares being transferred is at least 0.52 euros per Share;

-   up to the execution date, neither Targetti nor its subsidiaries (i) have acquired any shareholdings in joint stock companies and/or other entities and/or companies or going concerns, other than Louis Poulsen Lighting A/S; (ii) have considerably changed their business activities as it was carried out to date; (iii) have taken any actions not falling within ordinary operations and capable of: jeopardising or considerably damaging or rendering difficult and/or expensive the activity of Targetti and /or its subsidiaries; entailing a significant drop in economic results of the Company’s and/or its subsidiaries’ operations; and/or implying for Targetti and/or its subsidiaries considerable obligations, save for those provided for in the Loan, concerning related renegotiation and/or payment of the financial debt existing on the date of execution of this Agreement; and

-  Upon the date of execution, one member of Targetti’s board of directors resigns.

Execution of the Investment Agreement is scheduled for the first half of September 2007.

 

Should the above conditions occur, upon the date of execution the transfer will be carried out and the Shareholder’s Agreement will be signed. Therefore, either directly or through another company, Newco will make a takeover bid on the entire share capital of Targetti (the “Bid” or the “Takeover Bid”) at a price of 7.40 euros (the “Takeover Bid Price”) per common share.

 

The unit price per share of 7.40 euros will be totally paid in cash.

 

The price offered for Targetti’s shares was determined by applying the price paid by 3i to pay up the capital increase in Newco reserved to the same.

 

This price exceeds by 8.0% the price that will come out from the application of the calculation criteria ex art. 106 paragraph 2 of Consolidated Text. It is also 17.3% higher than the weighted average prices of the last twelve months, 14.4% higher than the weighted average prices of the last six months, 10.2% higher than the weighted average prices of the last three months and 5.0% higher than the last official price.

 

At the end of the Bid on Targetti, if Newco hold a shareholding greater than 90% of the Company’s shares, it will launch a residual takeover bid as per and for the effects and purposes of article 108 of the Consolidated Text, in order to de-list the Issuer’s shares.

 

If Newco holds more than 98% of the Company’s shares after the Bid on Targetti, it will exercise its right to purchase the residual outstanding shares as per and for the effects and purposes of Article 111 of the Consolidated Text.

 

If all the shares are subscribed, the Bid’s maximum total value on Targetti will be about 43 million euros.

 

The Offer will be financed through the risk capital 3i will transferred into Newco.

 

The Bid completion is scheduled by the end of November 2007. The Bid’s schedule will be agreed upon with the market authorities, in compliance with regulations in force. Due its mandatory nature, the Bid will not be contingent on reaching minimum subscription threshold.

 

If the threshold of the residual takeover bid is not be reached, the parties may proceed to Targetti’s de-listing, possibly through a merger by incorporation of the Issuer into a non-listed company.

 

Chiomenti Studio Legale acts as legal consultant of 3i, while Pavia & Ansaldo is the legal counsel of Targetti’s Shareholders.

 

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"We decided to start the partnership with 3i - stated Lorenzo Targetti – because the acquisition of Louis Poulsen A/S by Targetti Sankey will have a significant impact both on the industrial and financial level. This is the reason why we have considered appropriate and prudent to relay to the expertise and the funding capabilities of a partner of international spending.

In addition, the decision of de-listing - closed Targetti – is driven by the need of pursuing the future phase of growth of the Group, which is exciting but also delicate".

 

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2006 consolidated turnover was approximately 176.9 million euros, EBITDA was about 19.9 million euros and the group net profit for the year was about 4.9 million euros.

 

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3i Group – 3i Investments Plc e 3i Gestion SA refers to 3i Group plc, listed on London Stock Exchange from 1994. 3i Group is one of the world leaders in Private Equity and Venture Capital sectors. It is on the market from 1945 and is among the top 100 joint-stock companies for capitalization of FTSE100. Since its creation, its investments all over the world exceeded 25 billion euros and actually it manages investments exceeding 10 billion euros.