Sophia reviews SFL’s proposal and receives new proposal from GE Real Estate

On November 3rd the Board of Directors of Sophia convened at Sophia’s Head Office to discuss the received public tender offer proposal by SFL. After having discussed this proposal and voting that the bid was in fact according to their interests, the Board found out that another public tender offer had been made this time by GE Real Estate.

Société Foncière Lyonnaise (“SFL”) filed, on 30th September 2003, with the Conseil des Marchés Financiers (the “CMF”) a public tender offer proposal with a cash or stock
alternative for Sophia’s shares and convertible bonds. On 15th October 2003, the CMF declared SFL’s public tender offer admissible. SFL’s offer prospectus relative to this public tender offer received the COB’s approval on 29th October 2003.

Board of Directors’ opinion as of 3rd November 2003
Sophia’ Board of Directors convened at Sophia’s Head Office, on 3rd November 2003,
under the chairmanship of Rémy Gancel, Sophia’s Board Chairman and Chief Executive Officer. Sophia’s Board of Directors reviewed the admissibility decision regarding SFL’s public tender offer with a cash or stock alternative published by the CMF on 16th October 2003 and SFL’s offer prospectus approved by the COB, on 29th October 2003.

Sophia’s Board of Directors has an obligation to issue a formal assessment regarding the interest of SFL’s public tender offer or its consequences for the company, its shareholders and employees. On the basis of the information it was provided with, the Board acknowledged the interest of a friendly combination between Sophia and SFL, more particularly with respect to a.o. the industrial dimension of this combination, through the creation of a new major property player, leader on the office and commercial property market in Paris and the greater Paris area, with property holdings worth 5.2 billion euros and comprised of 70% of office space, and a portfolio of first-rate tenants.

The Chairman informed the Board of Directors of Merrill Lynch’s Fairness opinion which, as of 31st October 2003, states that from a financial standpoint, the terms of the public tender offer are fair for both Sophia shareholders and bearers of convertible bonds taken together.

The Board, after discussing the matter and on the basis of the above, voted unanimously with the exception of two abstentions, that the bid is in accordance with the interests of Sophia, its employees and shareholders; two Board members did not wish to express an opinion regarding the exchange share offer proposed by SFL.

GE Real Estate
However the Board was also informed on this same day of a counter public tender offer
proposal with payment in cash for Sophia securities, filed with the CMF by GE Real Estate Investissement France, a General Electric (“GE”) group subsidiary. After a quick review of the information provided regarding GE’s counter public tender offer
proposal, the Board noticed that the offer price of 41 euros per share to Sophia shareholders clearly represents a significant improvement over the offer price proposed by SFL in the cash alternative of its public tender offer, and that this counter public tender offer proposal should therefore be considered with the greatest interest.

The Board also noted the main elements of GE’s industrial project, in particular with respect to their intention to maintain Sophia as a stand-alone operating entity. The Board asked its Chairman to liase with GE in order to further clarify its intentions and to discuss the operational modalities of its project for Sophia.

The investment bank Merrill Lynch and Rambaud Martel law firm will continue to assist
Sophia to enable its Board of Directors, in accordance with law, to give its opinion on the GE counter public tender offer proposal upon the opening of the offer after its has obtained all required authorisations.

Source: Sophia