here - Pelikan

PELIKAN INTERNATIONAL CORPORATION BERHAD (“PELIKAN” OR “THE COMPANY”)
(I) PROPOSED CONDITIONAL VOLUNTARY PUBLIC TAKEOVER OFFER BY PELIKAN TO
ALL THE SHAREHOLDERS OF HERLITZ AKTIENGESELLSCHAFT (“HERLITZ”)
(II) PROPOSED ACQUISITION FROM STATIONERY PRODUCTS S.À.R.L. (“STATIONERY
PRODUCTS”) OF THE FOLLOWING:
(A) 7,198,498 NON-PAR VALUE BEARER SHARES IN HERLITZ (“HERLITZ
SHARES”) REPRESENTING 65.99% EQUITY INTEREST IN HERLITZ AND
4,802,763 HERLITZ OPTIONS FOR A CASH CONSIDERATION OF EURO (“€”) 1;
(B) RIGHTS AS A LENDER TO A SHAREHOLDER’S LOAN AMOUNTING TO €15
MILLION OWING BY HERLITZ FOR A TOTAL CASH CONSIDERATION OF €1;
(C) RIGHTS AS A LENDER TO A SHAREHOLDER’S LOAN AMOUNTING TO €85.0
MILLION OWING BY MOLKARI VERMIETUNGSGESELLSCHAFT MBH & CO.
OBJEKT FALKENSEE KG (“MOLKARI”) FOR A TOTAL CASH
CONSIDERATION OF €45 MILLION; AND
(D) 100% EQUITY INTEREST IN GANYMED FALKENSEE
GRUNDSTÜCKSVERWALTUNGS GMBH (“GANYMED”) FOR A CASH
CONSIDERATION OF €1; AND
(III) PROPOSED ACQUISITION FROM HERLITZ PBS AKTIENGESELLSCHAFT PAPIER-,
BÜRO- UND SCHREIBWAREN (“HERLITZ PBS”), A WHOLLY-OWNED SUBSIDIARY OF
HERLITZ, OF 94.9% OF THE REGISTERED AND PAID-UP SOLE ENTIRE LIMITED
PARTNERSHIP INTEREST IN MOLKARI OF €100,000 FOR A CASH CONSIDERATION OF
€1
1. INTRODUCTION
On behalf of the Board of Directors of Pelikan (“Board”), Maybank Investment Bank Berhad
(formerly known as Aseambankers Malaysia Berhad) (“Maybank IB”) wishes to announce the
following:
(I) the Company had on 6 November 2009 announced its intention to undertake a conditional
voluntary public takeover offer pursuant to Section 29 and Section 34 the Securities
Acquisition and Takeover Act, Germany (“Takeover Act”) for all Herlitz Shares at the
statutory minimum offer price pursuant to Section 31 of the Takeover Act, Germany
(“Proposed Takeover Offer”).
(II) the Company had also on 6 November 2009 entered into the following:
(i) a conditional sale and purchase agreement relating to shares, options and loans
(“SPA”) with Stationery Products, a company controlled by funds managed by
Advent International Corporation, Boston, USA (“Advent”), for the following:
(a) the acquisition of 7,198,498 Herlitz Shares representing 65.99% equity
interest in Herlitz and 4,802,763 Herlitz Options for a cash consideration of
€1 (RM5.05) (“Proposed Acquisition of Herlitz”);
(b) the acquisition of rights as a lender to a shareholder’s loan amounting to €15
million (RM75.7 million) (including any accrued interest), owing by Herlitz
for a cash consideration of €1 (RM5.05) (“Proposed Acquisition of Herlitz
Shareholder’s Loan”);
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(c) the acquisition of rights as a lender to a shareholder’s loan amounting to
€85.0 million (RM429.25 million) (including any accrued interest), owing
by Molkari for a cash consideration of €45 million (RM227.3 million)
(“Proposed Acquisition of Molkari Shareholder’s Loan”); and
(d) the acquisition of 2 issued shares in the nominal amounts of €24,000 and of
€1,000, respectively, in Ganymed (“Ganymed Shares”), representing 100%
equity interest in Ganymed for a cash consideration of €1 (RM5.05)
(“Proposed Acquisition of Ganymed”); and
(ii) a conditional sale and transfer agreement (“STA”) with Herlitz PBS, a wholly-owned
subsidiary of Herlitz, for the acquisition of 94.9% of the registered and paid-up sole
entire limited partnership interest in Molkari of €100,000 (“Molkari Limited
Partnership”) for a cash consideration of €1 (RM5.05) (“Proposed Acquisition of
Molkari”).
Hereinafter, all the abovementioned proposals (i) and (ii) shall be collectively referred to as the
Proposed Acquisitions.
Please refer to Appendix I for diagrammatic illustrations of the existing and post-acquisition
transaction structure.
The exchange rate used in this announcement is based on €1 : RM5.05. The details of the Proposed
Acquisitions and Proposed Takeover Offer (collectively to be referred to as (“the Proposals”) are
disclosed in the ensuing sections.
2. DETAILS OF THE PROPOSALS
2.1 Proposed Takeover Offer
Pelikan proposes to undertake a conditional voluntary public takeover offer pursuant to
Section 29 and Section 34 of the Takeover Act for all the Herlitz Shares at the statutory
minimum offer price which will be the weighted average share price of Herlitz Shares for the
three (3) months up to 5 November 2009 (“Offer Price”). The final Offer Price is to be
confirmed and notified to Pelikan by the Federal Financial Supervisory Authority of Germany
(“BaFin”) at a later date.
As at 31 October 2009, the issued and paid-up share capital of Herlitz comprises 10,907,735
Herlitz Shares of which:
(i) approximately 65.99% or 7,198,498 Herlitz Shares are held by Stationery Products
which has provided an undertaking not to be tendered the same for the Proposed
Takeover Offer, but has agreed to divest its entire shareholding to Pelikan pursuant to
the SPA; and
(ii) approximately 34.01% or 3,709,237 Herlitz Shares are held by other Herlitz
shareholders (“Free Float Herlitz Shares”).
As at 31 October 2009, there also exist 5,387,468 options in Herlitz (“Herlitz Options”)
which entitle Herlitz Options’ holders to subscribe for new Herlitz Shares at an option price of
€4.26 in cash per Herlitz Option.
The Proposed Takeover Offer is also extended to any new Herlitz Shares issued pursuant to
the exercise of the Herlitz Options. However, as the Offer Price is likely to be lower than the
exercise price of the Herlitz Options and 4,802,763 Herlitz Options will be divested by
Stationery Products via the SPA, it is reasonably remote for any of the remaining 584,705
Herlitz Options to be exercised.
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An official offer document including amongst others, the terms of the Proposed Takeover
Offer will be issued upon clearance of the said offer document by BaFin. A separate
announcement will be made upon confirmation of the Offer Price by BaFin and upon the
issuance of the offer document for the Proposed Takeover Offer.
2.2 Proposed Acquisition of Herlitz
The Proposed Acquisition of Herlitz relates to the acquisition from Stationery Products of
7,198,498 Herlitz Shares representing 65.99% equity interest in Herlitz and 4,802,763 Herlitz
Options for a cash consideration of €1 (RM5.05). Upon completion, Pelikan becomes the new
major shareholder of Herlitz.
Herlitz’s business was founded by Carl Herlitz in 1904 in Germany. Herlitz was first
registered on 8 December 1972 by way of conversion of the retail business of Carl Herlitz into
a stock company initially named Carl Herlitz Aktiengesellschaft. It subsequently changed its
name to Herlitz on 29 June 1976.
The issued and paid-up share capital of Herlitz as at 31 October 2009 is €46,466,951
comprising 10,907,735 Herlitz Shares. As at 31 October 2009, Herlitz also has 5,387,468
outstanding Herlitz Options which are exercisable into new 5,387,468 Herlitz Shares until 30
November 2010 at an exercise price in cash of €4.26 (RM21.51) per Herlitz Option.
Herlitz is a public limited company with its shares listed and quoted on the Berlin Stock
Exchange since 1977 and Frankfurt Stock Exchange in since 1982. Herlitz is 65.99% owned
by Stationery Products, which is controlled by Advent. The company is headquartered in
Berlin, Germany and employs about 1,800 employees.
Herlitz is one of the best-known brands for stationery products supplies for office and school
products. Office stationery products comprise lever arch files, desk organisers, file folders,
mailing items, blocs and paper. School stationery products include exercise books and spiral
pads, writing instruments, art supplies as well as pencil cases and pouches.
In the domestic German market, the company is well positioned to serve large retail customers
with a large branch network. Herlitz has a reputable customer base comprising food retailing
chains like Metro, Edeka and office supply distributors like Lyreco and Office Depot.
For over 100 years the Herlitz trademark has been synonymous with high-quality school and
office products. Herlitz offers approximately 12,000 products of stationery and papeterie
assortment mainly to the European market. Its core production facilities are located in
Falkensee, Berlin and Peitz of Germany and Poznan of Poland. The products are also shipped
from these facilities to nearly all over Europe.
“Papeterie” is German term for greeting cards, wrapping paper, ribbons, gift boxes and bags
as well as napkins and tablecloths. Papeterie products are all related to gift and decorations
and marketed under the well known “Susy Card” brand name.
In addition to its broad product assortment, Herlitz provides important logistic services and
specialised information technology through its subsidiaries namely eCom Logistik GmbH &
Co. KG (“eCom”) and Mercoline GmbH (“Mercoline”) respectively. eCom is particularly
strong in distribution logistic know how and specialises in product replenishments in mainly
cash and carry stores. Mercoline is an information technology company specialising in
enterprise resources planning softwares applied in the distribution industry.
Based on the audited financial statements of Herlitz and its subsidiaries (“Herlitz Group”) for
the financial year ended (“FYE”) 31 December 2008, the consolidated earnings before interest
and tax (“EBIT”) of the Herlitz Group is €3.7 million (RM18.7 million) and the net assets
attributable to equity holders of Herlitz Group is €38.6 million (RM194.9 million).
Please refer to Appendix II for further information on Herlitz.
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2.3 Proposed Acquisition of Herlitz Shareholder’s Loan
The Proposed Acquisition of Herlitz Shareholder’s Loan relates to the acquisition by Pelikan
of all the rights in the Herlitz Shareholder Loan Agreement (as defined below).
On 15 August 2005, Stationery Products and Herlitz entered into a shareholder loan agreement
(“Herlitz Shareholder Loan Agreement”) under which Stationery Products granted Herlitz a
loan in the amount of €15 million bearing interest at a rate of 6% per annum (“Herlitz
Shareholder’s Loan”). The amount outstanding (including accrued interest) as at 31
December 2008 is approximately €18.0 million (RM90.9 million).
2.4 Proposed Acquisition of Molkari Shareholder’s Loan
The Proposed Acquisition of Molkari Shareholder’s Loan relates to the acquisition by Pelikan
of all the rights in the Molkari Shareholder’s Loan (as defined below).
Pursuant to a sale and purchase agreement dated 15 August 2005, Stationery Products had
assumed the rights under the loans granted by the former shareholder banks of Herlitz to
Molkari which comprise of first ranking loans in the amount of €58.4 million, subordinated
interest-bearing loans in the amount of €8.6 million and subordinated non-interest-bearing
loans in the amount of €35.6 million (“Molkari Shareholder’s Loan”). The amount
outstanding (including accrued interest) as at 31 December 2008 is €87.8 million.
2.5 Proposed Acquisition of Ganymed
The Proposed Acquisition of Ganymed relates to the acquisition of 2 issued shares in the
nominal amounts of €24,000 and of €1,000, respectively, in Ganymed, representing 100%
equity interest in Ganymed for a cash consideration of €1 (RM5.05).
Ganymed was incorporated on 21 June 2005 in Germany. It is principally involved in the
letting of assets and the participation in other companies. Ganymed is the general partner of
Molkari, holding 85% voting rights in Molkari.
Please refer to Appendix III for further information in Ganymed.
2.6 Proposed Acquisition of Molkari
The Proposed Acquisition of Molkari relates to the acquisition of 94.9% of the registered and
paid-up sole entire limited partnership interest in Molkari of €100,000 for a cash consideration
of €1.00 (RM5.05).
Molkari was incorporated on 28 December 2001 under the name of GGF
Grundstücksgesellschaft Falkensee GmbH & Co. KG in Germany and assumed its current
name on 31 December 2002. The registered and paid-up sole entire limited partnership interest
in Molkari as at 31 October 2009 is €100,000.
Molkari is principally involved in property holding, with a principal logistic centre situated in
the commercial area of Falkensee, Berlin, Germany (“Falkensee Logistic Centre”). The
property consists of a site with a total land area of 380,919 square metres (“sq mtr”)
(approximately 94 acres) and buildings with a built up area of 134,644 sq mtr. Herlitz PBS
currently leases Falkensee Logistic Centre from Molkari and uses the property as its logistic
and distribution centre.
Please refer to Appendix IV for further information on Molkari.
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2.7 Details of the vendors
The vendor for the Proposed Acquisition of Herlitz, Proposed Acquisition of Herlitz
Shareholder’s Loan, Proposed Acquisition of Molkari Shareholder’s Loan and Proposed
Acquisition of Ganymed is Stationery Products whereas the vendor for the Proposed
Acquisition of Molkari is Herlitz PBS.
Stationery Products was incorporated on 5 July 2005 in Luxemburg and is principally an
investment holding company. It is controlled by Advent.
The Directors of Stationery Products as at 31 October 2009 are Fergal O’Hannrachain, Janet
Hennesy and Desmond Mitchell.
Herlitz PBS was incorporated on 9 May 1996 in Germany and is principally involved in the
sales and distribution of stationery products supplies for office and school and papeterie
products. Herlitz PBS is a wholly-owned subsidiary of Herlitz.
The Directors of Herlitz PBS as at 31 October 2009 are Mr. Jan von Schuckmann, Mr.
Thomas Hübner and Mr. Markus Oestmann.
2.8 Basis of arriving at the purchase consideration and source of funding
The total purchase consideration for the Proposed Acquisitions of €45 million (RM227.3
million) was arrived at on a willing buyer-willing seller basis after taking into consideration
the following:
(i) the adjusted audited consolidated net assets of Herlitz attributable to equity holders
for the FYE 31 December 2008 of €56.6 million (RM285.8 million). The audited
consolidated net assets of Herlitz of €38.6 million (RM194.9 million) is adjusted for
with the Herlitz Shareholder’s Loan of €18.0 million (RM90.9 million), which is
acquired by Pelikan pursuant to the Proposed Acquisition of Herlitz Shareholder’s
Loan;
(ii) the adjusted audited net assets of Molkari attributable to equity holders for the FYE
31 December 2008 of approximately €47 million (RM237.4 million) which is
inclusive of the net book value of the Falkensee Logistic Centre of €51.7 million.
The audited net liabilities of Molkari of €40.8 million (RM206.0 million) is adjusted
for with the Molkari Shareholder’s Loan of €87.8 million (RM443.4 million) which
is acquired by Pelikan pursuant to the Proposed Acquisition of Molkari Shareholder’s
Loan; and
(iii) the earnings potential of the acquiree companies.
The purchase consideration for the Proposed Takeover Offer is based on the three (3) months
weighted average share price of Herlitz Shares up to 5 November 2009, preceding Pelikan’s
announcement on its intention to make an offer on 6 November 2009.
The purchase consideration for the Proposals shall be satisfied entirely by cash and will be
financed via bank borrowings and/or internally generated funds. It is estimated that
approximately 90% of the purchase consideration will be financed via bank borrowings.
2.9 Liabilities to be assumed by Pelikan
Pelikan will not assume any liabilities including contingent liabilities and guarantees other
than those set out in the financial statements of Herlitz, Ganymed or Molkari under the
Proposals. The existing liabilities of Herlitz, Ganymed and Molkari will be settled by Herlitz,
Ganymed and Molkari respectively in their normal course of business.
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The Proposals are not expected to give rise to any additional financial commitment to put the
Herlitz Group, Ganymed or Molkari on-stream.
2.10 Salient terms of the SPA, STA and Proposed Takeover Offer
2.10.1 Salient terms of the SPA and STA
The salient terms of the SPA and STA are as follows:
(A) The Herlitz Shares, Ganymed Shares, Herlitz Shareholder’s Loan, Molkari
Shareholder’s Loan and Molkari Limited Partnership shall be acquired free
from all charges, liens, pledges and other encumbrances.
(B) The closing conditions for the SPA, amongst others, are as follows:-
(i) Merger clearance under the German merger control provisions;
(ii) Approval of the shareholders of Pelikan; and
(iii) The Federal Ministry of Economics and Technology, Germany;
(C) Other terms of the SPA:-
The payment for the total purchase considerations for the Proposed
Acquisitions are upon completion of the transactions.
If any of the closing conditions in 2.10.1(B)(i) to (iii), is not fulfilled or
waived at the latest by 31 January 2010 (“Long Stop Date”), Stationery
Products shall be entitled to withdraw from the SPA.
Extension of the Long Stop Date is provided for in the event that the merger
control authority of Germany intends to initiate a review of the merger or
the Federal Ministry of Economics and Technology, Germany has requested
further documents with regards to the Proposed Acquisitions.
(D) The closing conditions for the STA are as follows:-
(i) the fulfilment or waiver of all closing conditions of the SPA; and
(ii) the registration of Pelikan as limited partner in the commercial
register of Molkari by way of special legal succession.
The salient terms to the Proposed Takeover Offer will be published with the offer document.
A further announcement will be made upon issuance of the offer document.
3. RATIONALE FOR THE PROPOSALS
The Proposals are expected to provide synergies to Pelikan’s existing capabilities which will act as a
platform for Pelikan to strengthen its position as one of the market leaders in the stationery and paper
industry. With over 100 years of established history and recognised brand name, the addition of the
Herlitz Group to Pelikan’s expanding umbrella will be beneficial in further adding to the Pelikan
Group’s strength as a stationery product distributor and manufacturer with a proven track record. The
Pelikan Group has a strong presence in Western Europe countries such as Germany, Italy, Spain,
Switzerland, Benelux and Nordic whereas the Herlitz Group has a strong presence in Germany, United
Kingdom and Eastern European countries such as Czech Republic, Poland, Hungary and Romania. In
addition, Pelikan has an established network of distribution subsidiaries outside Europe such as in
Mexico, Colombia, Argentina, People’s Republic of China, South East Asia, Middle East etc whilst
Herlitz only operates via distributors outside Europe. The Proposals will in turn improve Pelikan’s
ability and success in accessing new markets where it is underrepresented and to allow Herlitz to tap
the Pelikan’s distribution networks, especially outside Europe.
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The Proposals will allow Pelikan to further increase its range of products. Although both Pelikan and
Herlitz manufacture stationeries, Pelikan’s strength is in school products and writing instruments, while
Herlitz’s strength is in the office stationery and papeterie business. The Proposals will enhance the
Pelikan/Herlitz Group’s product offerings with a wider and more complete assortment of products.
Pelikan and Herlitz will have the opportunity to cross sell each others products to their existing
customers around the world.
Through the acquisition of Ganymed and Molkari, Pelikan would have control of the Falkensee
Logistic Centre. It is a high-tech real estate with unique logistic facilities usable for any kind of
packaging, commissioning and delivery for consumer goods. Pelikan currently operates several logistic
centres in Europe. With the availability of the Falkensee Logistic Centre, Pelikan will be able to
streamline its logistic operations into one central location in Falkensee, Berlin and hence, achieving
operation merger synergies. Berlin, is the largest logistic hub in East Germany and it provides excellent
facilities for the Pelikan Group to operate its distribution for Germany and neighbouring markets in
Europe. Berlin will also serve as a bridge location for the Pelikan Group’s expansion into Eastern
Europe which offers excellent opportunities and perspectives.
The enlarged group will have a sturdy footing as both businesses are international businesses that can
be further built up with stronger financial backing based on both the established Pelikan and Herlitz
brand names. Besides market expansion through sharing of resources and to leverage on the sales and
distribution networks, the Proposals are expected to yield synergies and common cost savings in
production, procurement and sourcing, marketing, advertising and promotion, research and
development, and administration costs. These synergies will increase the efficiency and
competitiveness of the enlarged group in the long term and will enhance the enlarged group’s overall
profitability in the future.
4. POLICIES ON FOREIGN INVESTMENTS AND REPATRIATION OF PROFITS
Foreign investments in Germany are generally permitted. German law generally makes no distinction
between German and foreign nationals regarding investments or establishments of companies. Its legal
framework for foreign direct investment favours the principle of freedom of foreign trade. There are no
exchange controls prohibiting or restricting the transfer or repatriation of profits from Germany.
5. PROSPECTS OF THE HERLITZ GROUP, GANYMED AND MOLKARI
Herlitz is one of the leading producers and suppliers of stationery and papeterie products in Europe. It
commands high brand awareness and recognition in Europe, especially in Germany where the brand
awareness is 91% in 2009. With that, Herlitz has positioned itself as an international branded consumer
goods company and is expected to capitalise on this strength to further expand and grow its business
worldwide. Herlitz’ focus on continuous product innovations and the introduction of new products are
expected to strengthen market size and financial performance of the Herlitz Group.
With the acquisition Ganymed and Molkari, the Falkensee Logistic Centre’s utilisation can be
increased with the consolidation of Pelikan’s European logistic operations. The larger volume of
business in the Falkensee Logistic Centre will also result in economies of scale and more efficient
inbound and outbound transportation utilisation. In addition, the unutilised land space of the Falkensee
Logistic Centre’s land area provides huge potential for future expansion or sub-lease/sale. Also, there
may be opportunities for Pelikan to monetise the Falkensee Logistic Centre via sale and leaseback
structures in the future.
Since the Pelikan Group and the Herlitz Group are in the similar industry, the enlarged Pelikan Group
is expected to reap the benefits of savings in distribution, logistics, production, research &
development, marketing, promotional and administration costs and an enlarged product range available
to a broader base of customers.
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6. RISK FACTORS
Below are some of the non-exhaustive risk factors that may be inherent to Pelikan in relation to the
Proposals:
(i) Political and Economic Considerations
The future growth and level of profitability of Herlitz are subject to risks that are linked to the
political and economic developments in Germany and the markets where it operates. Any
adverse developments in the political situation and economic uncertainties in the markets
where it operates may affect the financial performance of Herlitz. These include risks of war,
global economic downturn, unfavourable change in government policy and the introduction of
new regulations.
(ii) Dependence on Key Personnel
The success of the Herlitz Group will depend, to some extent, upon the abilities and continued
efforts of its existing management team. The loss of any key members of the management
team may materially and adversely affect the financial performance of the Herlitz Group.
Notwithstanding the above, Pelikan has a group of experienced senior personnel who can be
mobilised to participate in the management of Herlitz if required.
(iii) Competitive Industry Environment
The Herlitz Group may face competition from international manufacturers, and there may be
no assurance that the Herlitz Group will be able to maintain its existing market share in the
future. Notwithstanding the above, Pelikan expects that as an established world leading
manufacturer with a globally recognised brand name, the Herlitz Group will under the Pelikan
umbrella continue to strive to remain highly competitive and expects to maintain and/or
expand its global market share for its products through the synergies and global network that
Pelikan can offer.
(iv) Acquisition Risk
Following the Proposals, Pelikan faces potential business integration risks and the risks of not
being able to realise the anticipated benefits to be derived from Herlitz. However, Pelikan
shall undertake all necessary efforts to mitigate the risks associated with the business
integration upon completion of the Proposals.
(v) Financial Position of the Herlitz Group
For the FYE 31 December 2008, the Herlitz Group suffered a loss after taxation and minority
interest of approximately €1.1 million (RM5.5 million). For the six (6) months ended 30 June
2009, the Herlitz Group further incurred a loss after taxation and minority interest of €5.1
million (RM25.7 million). Upon the completion of the Proposals, the merged group expects to
integrate, amongst others, its production facilities, research and development, selling, general
and administrative expenses, logistics services and markets and distribution channels. As
such, the success of the Herlitz Group to achieve profitability is dependent, among others, the
success of the integration with Pelikan, the rate of economic growth in the countries where it
operates, cost of raw materials, operating expenses, competition from its competitors and sales
mix.
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7. FINANCIAL EFFECTS OF THE PROPOSALS
7.1 Share capital and substantial shareholders’ shareholding
The Proposals will not have any effect on the issued and paid-up share capital, the substantial
shareholders’ shareholding position of Pelikan as the Proposals will be satisfied entirely by
cash.
7.2 Earnings
The Proposed Acquisitions are expected to be completed by 31 December 2009 whilst the
Proposed Takeover Offer is estimated to be completed in the first quarter of 2010.
Accordingly, the Proposals are not expected to have a material effect on the earnings of the
FYE 31 December 2009 but is expected to contribute positively to the revenue and earnings of
the Pelikan Group in the subsequent financial years.
7.3 Net assets (“NA”) per share and gearing
Based on the audited consolidated financial statements of Pelikan as at 31 December 2008, the
proforma effects of the Proposals on the consolidated NA per share and gearing of Pelikan,
assuming that the Proposals had been effected on that date are set out in Appendix V.
8. APPROVALS REQUIRED
The Proposals are subject to and are conditional upon the following shareholders and regulatory
approvals being obtained:
(i) the shareholders of Pelikan at an extraordinary general meeting to be convened;
(ii) BaFin for the offer document for the Proposed Takeover Offer;
(iii) the Federal Cartel Office of Germany for the merger control clearance;
(iv) the Federal Ministry of Economics and Technology, Germany; and
(v) other relevant authorities as may be necessary from any governmental or regulatory body
having jurisdiction over the entry into and completion of the Proposals.
The Proposed Acquisition of Molkari is conditional upon the Proposed Acquisition of Herlitz,
Proposed Acquisition of Herlitz Shareholder’s Loan, Proposed Acquisition of Molkari Shareholder’s
Loan and the Proposed Acquisition of Ganymed. The Proposed Acquisition of Herlitz, Proposed
Acquisition of Herlitz Shareholder’s Loan, Proposed Acquisition of Molkari Shareholder’s Loan and
the Proposed Acquisition of Ganymed are inter-conditional with each other. The Proposed Acquisitions
and Proposed Takeover Offer, however, are not inter-conditional with each other.
The Proposals are not conditional upon any other corporate exercise/scheme of the Company.
9. ESTIMATED TIMEFRAME FOR THE COMPLETION OF THE PROPOSALS
Barring unforeseen circumstances, the Proposals are expected to be completed by the first quarter of
2010.
10. DIRECTORS’ AND/OR MAJOR SHAREHOLDERS’ INTEREST
None of the Directors and/or major shareholders of Pelikan and/or persons connected to them have any
interest, direct or indirect in the Proposals.
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11. DIRECTORS’ STATEMENT
The Board, after having considered all aspects of the Proposals, is of the opinion that the Proposals are
in the best interest of the Company.
12. HIGHEST PERCENTAGE RATIO APPLICABLE PURSUANT TO PARAGRAPH 10.02(G)
OF THE LISTING REQUIREMENTS OF BURSA MALAYSIA SECURITIES BERHAD
(“LISTING REQUIREMENTS”)
The ratio of 56.08% in paragraph 10.02(g)(vi) of the Listing Requirements is the highest percentage
ratio applicable to the Proposals.
13. DOCUMENTS FOR INSPECTION
The SPA and the STA are available for inspection at the registered office of Pelikan at Lot 3410,
Mukim Petaling, Batu 12 1/2, Jalan Puchong, 47100 Puchong, Selangor Darul Ehsan during normal
business hours from Mondays to Fridays (except public holidays) for a period of three (3) months from
the date of this announcement.
14. ADVISERS
Maybank IB has been appointed as the Adviser to Pelikan for the Proposed Acquisitions and BNP
Paribas Capital (Asia Pacific) Limited as International Financial Adviser for the Proposed Acquisitions.
This announcement is dated 9 November 2009.
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1. TRANSACTION STRUCTURE
1.1 Existing Structure
100%
Molkari Shareholder’s
Loan
(€85 million)
Advent
Stationery
Products
100%
Herlitz Shareholder’s Loan
(€15 million)
Ganymed
Molkari
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65.99%
General partner with
no capital interest
(85% voting rights)
Herlitz
100%
Herlitz PBS
& subsidiaries
Limited partner
with 100% equity
interest
(15% voting rights)
Minority Interests
(“MI”)
34.01%
APPENDIX I
Other subsidiaries

1.2 Post-acquisition Structure
General partner
(no equity interest)
Ganymed
Limited partner
94.9% equity
interest
Pelikan
65.99% up to 100%
Molkari
Herlitz
Herlitz PBS
& subsidiaries
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100%
Herlitz Shareholder’s
Loan
(€15 million)
Limited partner
5.1% equity interest
Other subsidiaries
Molkari Shareholder’s
Loan
(€85 million)

BACKGROUND INFORMATION ON HERLITZ
1. PRINCIPAL PRODUCTS AND SERVICES
The current principal products and services offered by Herlitz Group are as follows:-
Products Products description
Writing instruments
� Cartridge pens
� Ballpoint pens
� Rollerball/Fineliners
� Markers
Filing and storing � Lever arch files
� Flat Files
� Files and Holders
Greeting / Decorating & Gifts � Greeting cards
� Paper napkins
� Decorating
� Wrapping paper
� Gift bags
Adhesive and Glues � Adhesive tapes
� Packing tapes
� Glue sticks
� Liquid glues
Mailing items � Envelopes
� Mailing bags
� Document bags
� Mailing tubes
� Big box
Printing papers � Universal paper
� Typewriter paper
� Carbon paper
� Special paper
� Foils & labels
School supplies � Exercise books
� Writing pads
� Drawing pads
� Colouring items
� Pencil case
� Pencil pouches
13
� Pencils
� Sharpeners & Erasers
� Correction items
APPENDIX II
� Suspension files
� Folders
� Address book and albums
� Craft papers
� Creativity kits
� Handicraft tools
� Stickers and labels
� School bags and backpacks

Services Services description
Supply chain management � Logistics
� Display management
� Packaging management
� Point of sales services
Information technology � Strategy process analysis for retail, logistics and consumer
goods industry
� SAP ® consulting
2. PRINCIPAL MARKETS FOR PRODUCTS AND SERVICES
Herlitz has a strong presence in Germany where it accounts for approximately 57% of the Herlitz’s
sales. Besides Germany, Herlitz is perceived as a strong local brand in Eastern Europe especially in
Poland, Hungary, Czech Republic, Romania, Slovakia, Bulgaria and Russia. It has sales subsidiaries in
Germany, the Netherlands, Hungary, Poland, United Kingdom, Romania, Czech Republic, Slovakia
and Bulgaria.
Outside Europe, Herlitz exports its products where it has established distribution networks with its
distribution partners worldwide.
3. SUBSIDIRIES COMPANIES OF HERLITZ
The subsidiary companies of Herlitz as at 31 December 2008 are as follows:
Company Place of
Incorporation
Subsidiaries of Herlitz
Convex Schreibwaren-Handels GmbH Berlin,
Germany
PBS Papeterie Service GmbH Berlin,
Germany
Herlitz PBS Berlin,
Germany
Subsidiaries of Herlitz PBS
In Germany
ANCO Boutique GmbH Berlin,
Germany
Concav GmbH Eningen,
Germany
eCom Logistik GmbH & Co. KG Falkensee,
Germany
eCom Logistik Verwaltungs GmbH Falkensee,
Germany
Falken Office Products GmbH Peitz,
Germany
Falken Document Technologies GmbH Peitz,
Germany
14
Effective Equity
Interest
%
Principal
Activities
100 Sales and
distribution
100 Sales and
distribution
100 Manufacturing,
sales and
distribution
100 Sales and
distribution
100 Sales and
distribution
100 Logistics
services
100 Logistics
services
100 Manufacturing,
sales and
distribution
100 Manufacturing,
sales and
distribution

Company Place of
Incorporation
Probüro Gesellschaft fur Papier &
Peitz,
Bürobedarf mbH
Germany
HGG Verwaltungsgesellschaft mbH Berlin,
Germany
Herlitz Papierverarbeitungs GmbH Falkensee,
Germany
Mercoline GmbH Berlin,
Germany
Susy Card GmbH Falkensee,
Germany
Foreign
DELMET PROD srl, Buftea,
Romania
15
Effective Equity
Interest
%
Principal
Activities
100 Sales and
distribution
100 Dormant
100 Dormant
100 Services
100 Sales and
distribution
100 Manufacturing,
sales and
Herlitz Benelux B. V. Roosendaal, 100
distribution
Sales and
Netherland
distribution
Herlitz Bulgaria EooD Sofia, Bulgaria 100 Sales and
distribution
Herlitz Hellas A.E. ^ Pallini,
76 Sales and
Griechenland
distribution
Herlitz Hungária Kft. Budapest,
100 Sales and
Hungary
distribution
Herlitz OY ^ Hämeenlinna, 51 Sales and
Finland
distribution
Herlitz România srl Târgu Mureş, 51 Sales and
Romania
distribution
Herlitz Spol s r. o. Prag, Czech 100 Sales and
Republic
distribution
Herlitz Slovakia s. r. o. Bratislava,
60 Sales and
Slovakia
distribution
Herlitz Spolka z o. o. Przeźmierowo, 100 Manufacturing,
Poland
sales and
distribution
Herlitz UK Ltd. Droylsden, 100 Manufacturing,
Great Britian
sales and
distribution
proOFFICE spol s. r. o. # Most-
100 Manufacturing,
Cepirophy,
sales and
Czech
Republic
distribution
Note:-
# Disposed in January 2009
^ Disposed in June 2009

4. SUMMARY OF KEY FINANCIAL DATA
The financial data of Herlitz based on the audited financial statements for the past three (3) financial
years ended 31 December 2006 to 31 December 2008 and the unaudited financial results for the quarter
ended 30 June 2009 are as follows:
Unaudited
2006 2007 2008 30 June 2009
€’000 €’000 €’000 €’000
Revenue 308,534.1 310,527.9 301,870.4 120,818.6
Earnings before interest, taxation,
depreciation and amortisation 9,047.2 7,158.2 8,187.0 5,670.8
Profit/(loss) before taxation 1,393.4 (1,250.8) (507.8) (4,990.5)
Net profit/(loss) after taxation 609.7 (3,646.5) (1,096.0) (5,434.2)
Minority interest 214.4 245.0 3.5 373.2
Net (loss)/profit attributable to
ordinary shareholders 395.3 (3,891.4) (1,099.5) (5,061.0)
Shareholders’ funds 43,746.7 40,783.4 38,573.0 32,229.2
Total borrowings 17,889.0 20,212.2 13,614.9 6,315.5
Herlitz Shareholder’s Loan 16,132.5 17,045.0 17,960.0 18,412.5
(i) FYE 31 December 2006
Revenue fell by approximately €9.1 million, or 2.9% in FYE 2006 due to continuous price
competition in the German market. The profit after tax, however, increased from a loss of €4.6
million to a profit of €0.6 million, as special expenditures were incurred due to restructuring
and location optimisation measures in FYE 2005. These measures, in turn, improved business
and brought about profitable growth in FYE 2006, enabling Herlitz to have positive profit
after taxation.
(ii) FYE 31 December 2007
Despite a challenging market, Herlitz achieved a slight 0.6% increase in revenue from €308.5
million in FYE 2006 to €310.5 million in FYE 2007. However, the rise in raw material prices
mainly due to high prices of oil, pulp and steel as well as the increasing consolidation process
among raw material suppliers in Europe left a negative impact on earnings. In addition, the
profit after taxation fell from a profit of €0.6 million to a loss of €3.6 million mainly due to a
revaluation of deferred taxes which lead to an increase in taxes as compared to FYE 2006.
(iii) FYE 31 December 2008
Revenue fell by approximately €8.7 million in FYE 2008, mainly due to the strategies of
Herlitz to reduce sales of lower margin products and rationalisation of its sales mix. Net loss
after taxation have been reduced from €3.6 million in FYE 2007 to €1.1 million in FYE 2008
as Herlitz continued its efforts to improve margins and reduce costs.
(iv) Financial Period Ended (“FPE”) 30 June 2009
Revenue of Herlitz Group in the six (6) month FPE 30 June 2009 was lower than the same
period in the previous year, mainly due to the economic crisis. In addition, for strategic
reasons, sales of private label items in the papeterie field and in the envelopes product range
following the disposal of Herlitz Kuvert GmbH in 2008 were given up. Compared to the same
period to the previous year, other operating income was considerably higher due to the gain on
disposal of proOFFICE s.r.o. Earnings before interest and taxes remained unchanged from the
previous year. Based on historical trends, the first six (6) months of the financial years records
lower revenue as this period does not include the profitable back-to-school business which is a
recurrent activity in the second half of the financial years.
16

BACKGROUND INFORMATION ON GANYMED
1. PRINCIPAL PRODUCTS AND SERVICES
17
APPENDIX III
Ganymed is principally involved in the letting of assets and the participation in other companies.
Ganymed is the general partner of Molkari, holding 85% voting rights in Molkari.
2. SUBSIDIARIES COMPANIES OF GANYMED
Ganymed does not have any subsidiary companies. Ganymed has a participation as a general partner of
Molkari.
3. SUMMARY OF KEY FINANCIAL DATA
The financial data of Ganymed based on the audited financial statements for the past three (3) financial
years ended 31 December 2006 to 31 December 2008 are as follows:
2006 2007 2008
€’000 €’000 €’000
Revenue 0.0 3.0 3.0
(Loss)/profit before taxation 1.1 (0.0) 0.0
Net (loss)/profit after taxation 1.1 (0.0) 0.0
Shareholders’ funds 22.0 22.0 22.5
Total borrowings 0.3 0.3 0.3
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BACKGROUND INFORMATION ON MOLKARI
1. PRINCIPAL PRODUCTS AND SERVICES
18
APPENDIX IV
Molkari is principally involved in property holding, specifically the Falkensee Logistic Centre. The
property is located in the commercial area of Falkensee, Berlin. The property consists of a site with a
total land area of 380,919 sq mtr and buildings with a built up area of 134,644 sq mtr. Herlitz PBS
currently leases Falkensee Logistic Centre and uses the property as its logistic centre.
2. SUBSIDIARIES COMPANIES OF MOLKARI
Molkari does not have any subsidiary companies.
3. SUMMARY OF KEY FINANCIAL DATA
The financial data of Molkari based on the audited financial statements for the past three (3) financial
years ended 31 December 2006 to 31 December 2008 are as follows:
2006 2007 2008
€’000 €’000 €’000
Revenue 6,156 6,050 7,089
(Loss)/profit before taxation (48) (2) 1,181
Net (loss)/profit after taxation (62) (2) 946
Shareholders’ funds (41,748) (41,750) (40,804)
Molkari Shareholder Loan 86,121 86,984 87,848
Loan from Herlitz PBS 13,078 10,715 7,686
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4. DETAILS OF THE FALKENSEE LOGISTIC CENTRE
(a) Title Details/Postal address Straße der Einreit, 142-148, 14612 Falkensee,
(b) Description/Existing Use Multi-storey logistics and production complex consisting of 5
building sections with an effective area of 134,644 sq mtr and 2 fully
automated warehouses, one with space for 49,000 pallets and the
other for 72,000 boxes.
The 4 interconnected buildings consist of 2 five-storey buildings in
the centre and 2 seven-storey buildings, one on either side. A threestorey
office space is located on top of the 2 central buildings. The
automatic high rack warehouse for pallets is located right behind the 2
central buildings and the warehouse for boxes is situated behind the
right wing of the complex.
(c) Land size/built-up area Total land area of 380,919 sq mtr (approximately 94 acres) / 134,644
sq mtr
(d) Existing and proposed use As a logistic and distribution centre mainly servicing the Herlitz PBS
Group. Lease rental as at 31 December 2008 amounted to €7.1
million.
(e) Age of building 17 years (completed in 1994)
(f) Total lettable space 134,644 sq mtr
(g) Amount of lettable space
occupied / occupancy rate of
total lettable space
(h) Tenure of land Freehold
117,729 sq mtr / 87.43%
(i) Market value A valuation was carried out by an independent valuer – BNP Paribas
Real Estate Consult GmbH for Pelikan on 1 September 2009 based on
Income Approach with a market value of €57.12 million. The original
development cost of the building was approximately €175 million.
(j) Net book value based on
audited financial statements as
at 31 December 2008
€51.7 million, including technical facilities & machinery
(k) Encumbrances The property is encumbered to a financial institution providing credit
facilities to the Herlitz Group.
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19

PROFORMA EFFECTS ON NA AND GEARING
Table 1
20
APPENDIX V
The proforma effects of the Proposals on the consolidated NA per Pelikan Share and gearing of the Pelikan
Group, based on the latest audited consolidated financial statements of Pelikan as at 31 December 2008 are set
out below:
Audited as at
31 December
2008
(I)
After
Proposed
Rights Issue*
(II)
After (I) and
the Proposals (3)
RM’000 RM’000 RM’000
Equity attributable to
equity holders of the Company
Share capital 343,169 514,753 514,753
Share Premium 59,869
(1)
74,627 74,627
Currency translation (34,888) (34,888) (34,888)
Retained Profits 188,977 188,977 (4) 430,248
Treasury shares at cost (13,501)
(2)
- -
Shareholders’ funds/
543,626 743,469 984,740
NA attributable to equity holders
Minority interest 19,177 19,177 25,152
Total Equity 562,803 762,646 1,009,892
No. of Pelikan Shares in issue (‘000) 339,255 514,753 514,753
NA per Pelikan Share attributable to equity holders of
the Company
1.60 1.44 1.91
(5) 671,312
Total borrowings 366,406 366,406
Gearing (times) 0.67 0.49 0.68
Gearing (net of cash) (times) 0.53 0.12 0.42
Notes:
* On 21 October 2009, the Company announced a proposed renounceable rights issue of up to 171,584,420 new
ordinary shares of RM1.00 each in Pelikan (“Rights Shares”) on the basis of one (1) Rights Share for every two
(2) existing ordinary shares of RM1.00 each in Pelikan held at an issue price of RM1.10 per Rights Share
(“Proposed Rights Issue”). Please refer to the announcement of the same for further information.
(1) Assuming the issue price of RM1.10 per Rights Share after netting off estimated expenses of RM2.4 million for the
Proposed Rights Issue.
(2) Assuming all 3.914 million treasury shares as at 30 September 2009 were fully resold to the open market at no
gain/loss.
(3) Assuming a proposed Offer Price of €1.85 per Herlitz Share. The final Offer Price will be subject to confirmation
by BaFin.
(4) Including negative goodwill of RM261.3 million and estimated expenses for the Proposals of RM20 million which
are adjusted to retained profits.
(5) Includes the estimated bank borrowings of RM235.7 million to finance the Proposals and the borrowings of the
acquired companies of RM69.2 million.