VPS and Oslo Bors Recommend a Merger

The boards of directors of VPS Holding ASA and Oslo Bors Holding ASA have agreed to propose that the two companies be merged. The boards believe that a merger of the two companies will allow more efficient and coordinated use of their overall resources and expertise, and so strengthen work on developing the entire value chain of the Norwegian securities market. A merger will also ensure more unified and efficient development of products and services as well as efficient delivery of services to the companies' customers.

The competitiveness of the Norwegian securities market depends on offering products, functionality and prices that are attractive both nationally and internationally. Both VPS and Oslo Bors have developed strongly over recent years as the Norwegian capital market has grown, and both now have greater breadth of activities and expertise than was the case a few years ago. At the same time, stock exchanges and clearing houses are experiencing continuing changes in the competitive situation. This is the case for both VPS and Oslo Bors. Increasing competition will make it even more important that the overall Norwegian securities chain is better than that of its competing markets.

The companies have so far identified annual synergy benefits approaching NOK 50 million within 2009, of which a good half relates to revenue synergies. The potential for revenue improvement is expected to grow in subsequent years. Revenue synergies relate in particular to the areas of market data and derivatives.

The boards of the two companies intend to collaborate on preparing a merger plan as the basis for decisions by their respective general meetings. The proposed exchange ratio is 55.56/44.44 for shareholders in Oslo Bors Holding and VPS Holding respectively, representing 0.8 shares in Oslo Bors Holding per each share in VPS Holding. The exchange ratio is a function of both companies' financial forecasts for 2007 and 2008. The merger is calculated to be accretive for earnings per share for all shareholders in 2008. The proposed exchange ratio represents a premium of 30% to the last registered trade in the VPS share. It is assumed that the dividends proposed for 2006 for both companies are approved and paid. The intention is to arrange the general meetings for the first half of June, and for the merger, if it is approved, to come into effect in September. The merger will be conditional on due diligence, agreement upon a final merger plan and approval by the relevant authorities.

It has been agreed that Bente A. Landsnes will be the CEO of the merged operation, and Jan Hellstrom will be the Deputy CEO. These individuals will maintain their responsibilities for Oslo Bors and VPS respectively in the new group. Leif Teksum, the chairman of the board of VPS Holding, will be proposed as the chairman of the board of the merged company, and Halvor Stenstadvold, chairman of the board of Oslo Bors Holding, will be proposed as the deputy chairman.


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