The domination and profit and loss transfer agreement (the “DPLTA”) between ADVA Optical Networking SE (“ADVA”) as dependent company and ADTRAN Holdings, Inc. (NASDAQ: ADTN and FSE: QH9) (“ADTRAN Holdings”) as dominating company that was executed on December 1, 2022 and has been registered in the commercial register of the local court of Jena on January 16, 2023 and has thus become effective. The extraordinary general meeting of ADVA had granted approval to the conclusion of the DPLTA on November 30, 2022. The effectiveness of the DPLTA enables ADTRAN Holdings to further integrate ADVA under German law, including the ability to issue binding operational instructions to the management board of ADVA.
Under the DPLTA, ADTRAN Holdings undertook to acquire, upon request, the shares of any outstanding ADVA shareholder against compensation (Abfindung) in the amount of € 17.21 per ADVA share. The outside shareholders now have the opportunity to tender their shares in ADVA via their custodian bank in return for the corresponding cash compensation. The acceptance period for this Offer ends – subject to an extension of the period due to the initiation of any appraisal proceedings – two months after the date on which the entry of the DPLTA in the commercial register has been published in accordance with Section 10 of the German Commercial Code. Full details of the cash compensation offer and its implementation will be published shortly by ADTRAN Holdings in the German Federal Gazette (Bundesanzeiger).
Outside shareholder of ADVA not wishing to accept the offer will remain shareholders of ADVA. They are entitled to receive a fixed annually recurring compensation payment from ADTRAN Holdings for the duration of the DPLTA. This recurring compensation payment amounts to € 0.59 per share and financial year of ADVA less the corporate income tax (including solidarity surcharge) to be paid by ADVA thereon. Based on the currently applicable corporate income tax rate (including solidarity surcharge), this results in a compensation payment of € 0.52 per share and full financial year of ADVA. The compensation payment shall be granted for the first time for the financial year of ADVA in which the DPLTA becomes effective by registration in the commercial register.
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