(Boursier.com) -- The Board of Directors of Technicolor, which met yesterday in Paris, unanimously resolved to recommend to the Company's shareholders that they vote in favor of the resolutions relating to the implementation of the transaction agreed between Jesper Cooperatief U.A., an entity controlled by JPMorgan Chase & Co., and Technicolor. This recommendation is in accordance with the contracts entered on May 2, 2012.
The JPMorgan Contracts were approved by the Board of Directors on May 2, 2012 and are the result of extensive discussions with Jesper and other potential investors. The Board of Directors, at its May 2, 2012 meeting, concluded that Jesper provided the best offer, including from a financial standpoint, but it also concluded that significant long term value would be derived by Technicolor from being supported by JP Morgan Chase & Co., the leading worldwide entertainment financier.
The JPMorgan Contracts provide a fully-negotiated 30-month agreement with regard to the governance of the Company, that would provide key support towards achieving the strategic goals outlined in Technicolor's Amplify 2015 strategic plan and maximize shareholder value. Technicolor will benefit from its association with JP Morgan Chase & Co., its global brand, its experience and industry expertise. In addition, the proceeds from the capital increase contemplated by the JPMorgan Contracts amount to up to EUR158 million corresponding to up to 99,193,696 shares (as specified below) and will allow Technicolor to reduce its financial debt, increase headroom on financial covenants and benefit from JPMorgan Chase & Co.'s active support in further improving its balance sheet.
During its meeting held yesterday, the Board of Directors of Technicolor also reviewed the unsolicited proposed shareholders resolutions together with the attached binding and irrevocable offer letter submitted on May 25, 2012 by Vector Capital, an American investment fund that conducted discussions with Technicolor before April 30, 2012. The Board included such proposed resolutions in the agenda for the June 20, 2012 General Shareholders' Meeting. In its offer, Vector expressed support for the Company's strategy as defined in its Amplify 2015 strategic plan without specifying precisely its declaration of intent vis-à-vis the Company following the planned capital increase it proposes. The proceeds from the capital increase contemplated by the Vector Resolutions amount to up to EUR186 million corresponding to up to 109,114,822 shares (as specified below).
The Board notes, as Vector specified, that the approval of its resolutions by the General Shareholders' Meeting requires the prior rejection of the JPMorgan Resolutions proposed by the Board of Directors.
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