TEXEL ENERGY STORAGE AB MAKES A PUBLIC TAKEOVER OFFER TO THE SHAREHOLDERS OF NASDAQ LISTED SWEDISH STIRLING AB

TEXEL Energy Storage AB (“TEXEL”) hereby makes a public takeover offer to the shareholders of Swedish Stirling AB (“Swedish Stirling”) to transfer all their shares in Swedish Stirling to TEXEL (the “Offer”). The shares in Swedish Stirling are listed on Nasdaq First North Premier Growth Market.

Summary of the Offer

The basis for the Offer is that Swedish Stirling’s board of directors has proposed that an extraordinary general meeting on March 20, 2023, should decide on placing the company into voluntary liquidation. The board’s preliminary assessment is that any distribution to shareholders in connection with the liquidation will be very limited or may not occur at all. TEXEL, operating in a related field, is keen to ensure that Swedish Stirling’s Stirling technology is not lost and is committed to offering shareholders, who have invested in technology aimed at improving and saving the environment, an opportunity to remain engaged stakeholders in the company.

To carry out the Offer, TEXEL intends to shortly acquire a wholly owned public subsidiary (the “Bidder Company”), which will formally acquire shares in Swedish Stirling under the Offer. The Bidder Company will not conduct any business activities but will solely own shares in Swedish Stirling. The Bidder Company will take out a loan from TEXEL on market terms to finance the acquisition of shares in Swedish Stirling. The offer document, which will be published according to the indicative timetable below, will be issued by the Bidder Company. References to “TEXEL” in this press release refer, where applicable, to both TEXEL and the Bidder Company.

TEXEL offers each shareholder in Swedish Stirling a combined offer consisting of (a) SEK 0.0991 in cash per Swedish Stirling share and (b) one (1) existing share in the Bidder Company for every 10,000 transferred shares in Swedish Stirling. Each existing share in the Bidder Company is estimated to have a value of SEK 8.33, corresponding to each share’s proportion of the company’s equity after the acquisition of shares in Swedish Stirling. For holdings of fewer than 10,000 Swedish Stirling shares and excess shares beyond whole lots of 10,000 Swedish Stirling shares, an additional compensation of SEK 0.0008 in cash per transferred Swedish Stirling share will be offered. The Offer corresponds to a total value of approximately SEK 0.0999 per share in Swedish Stirling and a total valuation of all shares in Swedish Stirling at approximately SEK 19,400,000.

The offered consideration represents:

• A premium of approximately 10% compared to the closing price of SEK 0.0901 for Swedish Stirling’s share on Nasdaq First North Premier Growth Market on March 17, 2023, the last trading day before the announcement of the Offer.
• A discount of approximately 77% compared to the average price for Swedish Stirling’s share on Nasdaq First North Premier Growth Market over the last 30 trading days before the announcement of the Offer.
• A discount of approximately 91% compared to the average price for Swedish Stirling’s share on Nasdaq First North Premier Growth Market over the last 90 trading days before the announcement of the Offer.

TEXEL intends to publish an offer document regarding the Offer around April 24, 2023. The acceptance period for the Offer is expected to run from April 24, 2023, to July 2, 2023.

Conditions for the Offer

The completion of the Offer is subject to, among other things:

1. The Offer being accepted to the extent that TEXEL becomes the owner of more than 50% of the shares in Swedish Stirling on a fully diluted basis, taking into account shares that outstanding convertibles entitle subscription rights to.
2. The board of Swedish Stirling canceling the extraordinary general meeting planned for March 20, 2023, and that Swedish Stirling is not placed into liquidation or bankruptcy or initiates a corporate restructuring process before the end of the acceptance period.

Statement from TEXEL

“A company with SEK 400 million in assets just months before a liquidation decision, working on environmental technology at a time when the environment should be considered a national and international security issue, and with over 18,000 shareholders prioritizing environmental technology in their investments, is naturally of interest to us. There are also synergies in Swedish Stirling’s technological development that can add value to TEXEL,” says TEXEL’s CEO and Chairman, Lars Jacobsson.

Background and Motivation for the Offer

In connection with Swedish Stirling’s recent rights issue of SEK 200 million, which ended on January 31, 2023, the company’s assets were valued at approximately SEK 400 million. However, the outcome of the issue resulted in the company receiving only about SEK 24.3 million.

On February 24, 2023, Swedish Stirling published its fourth-quarter report for 2022, where the company’s intangible fixed assets were written down to SEK 0. On the same day, the board called for an extraordinary general meeting to be held on March 20, 2023. The only agenda item in the meeting is the board’s proposal to place the company into voluntary liquidation. The board’s preliminary assessment is that any potential distribution to shareholders in connection with the liquidation will be very limited or may not occur at all.

To save Swedish Stirling and ensure that shareholders’ investment in Stirling technology is not lost, TEXEL, through the Bidder Company, hereby makes a public takeover offer for all shares in Swedish Stirling. With this offer, TEXEL aims to show its appreciation to the over 18,000 shareholders who have actively chosen to invest in environmentally friendly technology development. TEXEL’s intention is for Swedish Stirling to remain listed on Nasdaq First North Premier Growth Market after the completion of the Offer, provided that listing requirements continue to be met.

For more information about TEXEL, please refer to the section “TEXEL in Brief” below.

The Offer

TEXEL is offering each shareholder of Swedish Stirling a combined offer consisting of:
(a) SEK 0.0991 in cash per share in Swedish Stirling, and
(b) one (1) existing share in the Bidder Company for every 10,000 Swedish Stirling shares transferred.

Each existing share in the Bidder Company is estimated to have a value of SEK 8.33, which corresponds to the share’s proportion of the company’s equity after the acquisition of shares in Swedish Stirling.

For holdings of fewer than 10,000 shares in Swedish Stirling, as well as any excess shares beyond whole lots of 10,000, an additional SEK 0.0008 in cash per transferred share in Swedish Stirling will be offered as compensation.

This offer corresponds to a total value of approximately SEK 0.0999 per share in Swedish Stirling and represents a total value of approximately SEK 19,400,000 for all Swedish Stirling shares.

The offered consideration corresponds to:

• A premium of approximately 10% compared to the closing price of SEK 0.0901 for Swedish Stirling’s shares on Nasdaq First North Premier Growth Market on March 17, 2023, the last trading day before the announcement of the Offer.
• A discount of approximately 77% compared to the average share price for Swedish Stirling’s shares on Nasdaq First North Premier Growth Market over the last 30 trading days before the Offer’s announcement.
• A discount of approximately 91% compared to the average share price for Swedish Stirling’s shares on Nasdaq First North Premier Growth Market over the last 90 trading days before the Offer’s announcement.

The acceptance period for the Offer is expected to run from April 24, 2023, to July 2, 2023. Payment of the consideration is expected to take place around week 27, provided that the conditions for completing the Offer are met or waived.

Ownership Structure in the Bidder Company

All 60,000 shares in the Bidder Company will initially be 100% owned by TEXEL.

After the completion of the Offer, assuming full acceptance, TEXEL will own approximately 67.64% of the shares and votes in the Bidder Company, while current Swedish Stirling shareholders will own approximately 32.36% of the shares and votes in the Bidder Company.

The table below presents shareholders in the Bidder Company after the completion of the Offer, showing those holding more than 5% of the total outstanding shares or votes.

The Board or Existing Shareholders of Swedish Stirling Have Not Taken a Position on the Offer

A prerequisite for the Offer was that TEXEL obtained a decision from the Swedish Securities Council stating that it was not required to include Swedish Stirling’s outstanding convertible bonds in the Offer. Since the Securities Council announced its decision on March 19, 2023 (see more about the decision in the section “Statement from the Swedish Securities Council” below) and TEXEL needs to submit the Offer before the planned extraordinary general meeting of Swedish Stirling on March 20, 2023, TEXEL has not had time to present the Offer to the board or the existing major shareholders of Swedish Stirling. Therefore, the board and the company’s existing major shareholders have not taken a position on the terms of the Offer.

TEXEL’s Shareholding in Swedish Stirling

TEXEL currently neither owns nor controls any shares or other financial instruments that provide financial exposure equivalent to a shareholding in Swedish Stirling. Neither TEXEL nor any related party to TEXEL has acquired shares in Swedish Stirling on more favorable terms than those offered in the Offer during the six months prior to the public announcement of the Offer.

TEXEL and its affiliates may, to the extent permitted by applicable laws and regulations, acquire or enter into agreements to acquire shares in Swedish Stirling by means other than the Offer (before or during the acceptance period), including through market purchases at prevailing prices or acquisitions through private transactions at negotiated prices. In such cases, any such acquisition will be carried out and disclosed in accordance with applicable laws and regulations.

Conditions for the Offer

The completion of the Offer is conditional upon:

• The Offer being accepted to such an extent that TEXEL becomes the owner of more than 50 percent of the total number of shares in Swedish Stirling on a fully diluted basis, i.e., taking into account the shares that outstanding convertible bonds entitle subscription to.
• No other party publicly announces an offer to acquire shares in Swedish Stirling on terms that are more favorable to Swedish Stirling’s shareholders than those of the Offer.
• All necessary permits, approvals, decisions, and other actions from authorities or similar entities required for the Offer and the acquisition of Swedish Stirling have been obtained on terms acceptable to TEXEL.
• Neither the Offer nor the acquisition of Swedish Stirling is wholly or partly prevented or significantly hindered by legislation or other regulation, court ruling, government decision, or similar circumstance, whether existing or reasonably expected, beyond TEXEL’s control and which TEXEL could not reasonably have foreseen at the time of the Offer’s announcement.
• TEXEL, beyond what has been publicly disclosed by Swedish Stirling or otherwise communicated in writing to TEXEL before the announcement date of the Offer, does not discover that information disclosed by Swedish Stirling or otherwise provided to TEXEL is materially incorrect or misleading, or that material circumstances that should have been disclosed about Swedish Stirling have not been made public.
• No circumstances unknown to TEXEL at the time of the Offer’s announcement have occurred that have or could reasonably be expected to have a material adverse effect on Swedish Stirling’s sales, earnings, assets, liquidity, or equity.
• Swedish Stirling does not take any actions that are typically intended to deteriorate the conditions for the implementation of the Offer.
• The board of Swedish Stirling cancels the extraordinary general meeting planned for March 20, 2023, and Swedish Stirling is not placed into liquidation, bankruptcy, or initiates corporate restructuring before the expiration of the acceptance period.

TEXEL reserves the right to withdraw the Offer if it becomes clear that any of the above conditions have not been met or cannot be met. However, regarding conditions (ii)–(vii), such withdrawal will only occur if the non-fulfillment is of material significance to TEXEL’s acquisition of the shares in Swedish Stirling or if it has been approved by the Swedish Securities Council.

TEXEL reserves the right to waive, in whole or in part, one or more of the above conditions, including condition (i) above, by completing the Offer at a lower acceptance level.

Potential Adjustment of the Offered Consideration

If Swedish Stirling pays a dividend or carries out any other value transfer before TEXEL begins the payment of consideration in the Offer, the offered consideration according to the Offer will be reduced accordingly.

Financing of the Offer

TEXEL has committed to financing the cash portion of the Offer by lending its own funds to the Bidder Company on market terms. No external financing of the Offer will therefore take place. The consideration shares in the Bidder Company, as per the Offer, are existing shares in the Bidder Company, which will be transferred from TEXEL to those shareholders of Swedish Stirling who accept the Offer.

Due Diligence

The board of Swedish Stirling has committed to allowing TEXEL to conduct a limited and confirmatory due diligence review of Swedish Stirling after the Offer has been made. The purpose of the review is for TEXEL to verify that the publicly disclosed information regarding the company’s Stirling technology and the agreements related to the technology is not materially incorrect or misleading.

Preliminary Timeline

An offer document regarding the Offer is expected to be published around April 24, 2023. The acceptance period for the Offer is currently estimated to commence around April 24, 2023, and end around July 2, 2023. Payment of the consideration will take place as soon as TEXEL has announced that the conditions for the Offer have been met or that TEXEL has otherwise decided to complete the Offer, which is estimated to occur around week 27. TEXEL reserves the right to extend the acceptance period for the Offer, as well as to postpone the timing of the consideration payment.

Statement from the Swedish Securities Council

On March 15, 2023, TEXEL applied for an exemption from including Swedish Stirling’s outstanding convertible bonds in the Offer. The Swedish Securities Council granted TEXEL’s exemption request on March 19, 2023.

Applicable Law and Disputes

The Offer shall be governed by and interpreted in accordance with Swedish substantive law. The Offer is subject to the Takeover Rules issued by the Swedish Corporate Governance Board and the interpretations and applications of the Takeover Rules by the Swedish Securities Council. Any dispute relating to, or arising in connection with, the Offer shall be exclusively settled by a Swedish court, with the Stockholm District Court as the court of first instance.

Advisors

In connection with the execution of the Offer, TEXEL has engaged the law firm Advokatfirman Lindahl as its legal advisor.

Gothenburg, March 19, 2023

TEXEL Energy Storage AB

The Board of Directors

Information Disclosure

This information was submitted for public disclosure through the agency of the contact person listed below on March 19, 2023, at [time].

Contact

For inquiries, please contact:

Lars Jacobsson, Chairman of the Board and CEO +46 702 77 96 30 lars@texeles.com

TEXEL in Brief

TEXEL Energy Storage AB is a Swedish environmental technology company focused on large-scale energy storage, with a significant portion of its operations concentrated on the U.S. market. Several years ago, TEXEL signed an exclusive agreement for a new hydrogen-based energy storage technology with the U.S. Department of Energy and one of its national laboratories, Savannah River National Laboratory (SRNL). SRNL, which was behind the development of the hydrogen bomb in the 1950s, has since become a world-leading laboratory for hydrogen technology. TEXEL’s assets exceed 500 million SEK, with the majority consisting of cash holdings.

The board of TEXEL is based in Gothenburg Municipality, and the company’s address is Kungsgatan 48 A, 411 15 Gothenburg.

TEXEL’s four largest shareholders represent approximately 81% of the capital and 84% of the voting rights in the company, both privately and through companies.

The largest shareholder is the company’s founder, chairman, and CEO, Lars Jacobsson, who owns about 49% of the capital and approximately 64% of the voting rights. Lars is an entrepreneur and philanthropist who began his career in the oil and gas industry but transitioned in the early 2000s to entrepreneurship in renewable energy. He was one of the founders of Azelio (formerly Cleanergy). Lars is also a co-founder and chairman of the nonprofit organization The Perfect World Foundation and serves as an expert advisor on energy to the European Energy Commission to help find solutions related to the new EU program, “RePowerEurope.”

The second-largest shareholder is the John Paul DeJoria Family Trust, holding approximately 15% of the capital and 9.6% of the voting rights. John Paul DeJoria is an American serial entrepreneur, philanthropist, and billionaire, ranked among the richest people in the U.S. He is best known as the co-founder of the hair care company John Paul Mitchell Systems and The Patrón Spirits Company, the latter of which he sold to Bacardi in 2018 at a valuation of approximately USD 5.1 billion.

The third-largest shareholder is Joachim Hjerpe, who holds approximately 13% of the capital and about 8% of the voting rights. He is a board member of TEXEL and has 25 years of experience as a senior executive in the automotive industry. Joachim held top executive positions at AB Volvo in the Far East for 12 years, serving as CEO of Volvo Trucks in Japan for seven years and then in China for five years.

The fourth-largest shareholders are Joachim and Stina von der Esch, holding about 4.5% of the capital and approximately 2.8% of the voting rights. They are part of the founding family of the Fenix Outdoor Group, which owns brands such as Fjällräven and Naturkompaniet.

The remaining shares are distributed among approximately 150 additional shareholders.

Important Information

The Offer is not directed at persons whose participation would require an additional offer document to be prepared, registration to take place, or any other measure to be undertaken beyond what is required under Swedish laws and regulations.

This press release and other documents related to the Offer will not be distributed or sent in any country where such distribution would require additional measures or where it would be in violation of the laws or regulations of that country. TEXEL will not permit or approve such distribution. If any individual seeks to accept the Offer as a result of directly or indirectly violating these restrictions, their acceptance may be disregarded.

The Offer is not being made, directly or indirectly, via mail or any other communication medium (including fax, email, telex, telephone, or the internet) in or into Australia, Hong Kong, Japan, Canada, China, Mexico, New Zealand, Switzerland, Singapore, South Africa, or the United States, and the Offer cannot be accepted by any such means from or within these countries. Consequently, this press release or other documents relating to the Offer will not be sent or otherwise provided to individuals in or into these countries and must not be distributed in a similar manner.

TEXEL will not provide any consideration under the Offer to Australia, Hong Kong, Japan, Canada, China, Mexico, New Zealand, Switzerland, Singapore, South Africa, or the United States.

This press release is not being sent and must not be sent to shareholders with registered addresses in Australia, Hong Kong, Japan, Canada, China, Mexico, New Zealand, Switzerland, Singapore, South Africa, or the United States. Banks, brokers, and other institutions holding nominee-registered shares on behalf of persons in these countries must not forward this press release or any other Offer-related documents to such persons.

Statements in this press release regarding future conditions or circumstances, including information about future performance, growth, and other development projections, as well as other effects of the Offer, constitute forward-looking information. Such information can typically be identified by words such as “anticipates,” “believes,” “expects,” “intends,” “plans,” “seeks,” “will,” or “may,” or similar expressions. Forward-looking information is inherently associated with risks and uncertainties, as it pertains to future conditions and depends on circumstances that may occur in the future. Due to various factors, many of which are beyond TEXEL’s control, future conditions may significantly deviate from what is expressed or implied in the forward-looking information. All such forward-looking information is valid only as of the date it was provided, and TEXEL has no obligation (and undertakes no obligation) to update or revise any such information due to new information, future events, or other circumstances beyond what is required under applicable laws and regulations.

[1] Based on 194,170,162 outstanding shares in Swedish Stirling.
[2] Based on 194,170,162 outstanding shares in Swedish Stirling.
[3] Based on Swedish Stirling’s shareholding according to Swedish Stirling’s prospectus dated December 5, 2022.
[4] All dates are preliminary and subject to change.