TIDMRGU TIDMMBE TIDMMWB
RNS Number : 4549H
Regus PLC
27 May 2011
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART
IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A
VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT
JURISDICTION
27 May 2011
REGUS PLC (SOCIETE ANONYME) ("Regus")
Response to announcement made by MWB Business Exchange plc
("MBE")
This is an announcement falling under Rule 2.4 of the Takeover
Code (the "Code"). It does not represent a firm intention to make
an offer under Rule 2.5 of the Code. Accordingly, there can be no
certainty that any offer will ultimately be made.
Regus notes the announcements made by MWB Group Holdings Plc
("MWB") and MBE on 27 May 2011 and confirms that it has indeed made
an indicative offer to acquire the entire issued share capital of
MBE for cash consideration of 92.36 pence per MBE share (the "Regus
Offer").
The Regus Offer:
-- values MBE's issued share capital at approximately GBP60
million;
-- would provide MBE's shareholders with a premium of 103.0 per
cent. to the closing price of 45.5 pence per MBE share on 27 April
2011, the day before the announcement of the recommended
part-share, part-cash offer made by MWB for the shares in MBE not
already held by MWB (the "MWB Offer") (MWB currently holds
approximately 72 per cent. of the issued share capital of MBE);
-- would provide MBE's shareholders with a premium of 83.7 per
cent. to the value of the MWB Offer as at 27 April 2011, the day
before announcement of the MWB Offer (the MWB Offer was valued at
50.27 pence per MBE share on 27 April 2011); and
-- would provide MBE's shareholders with a premium of 85.4 per
cent. to the value of the MWB Offer as at 26 May 2011 (the MWB
Offer was valued at 49.82 pence per MBE share on 26 May 2011).
Background
A confidentiality agreement between Regus and MBE was entered
into on 15 March 2011 (the "NDA"). For this reason Regus has not
been able to make public its intentions regarding MBE until now.
Now that the Regus Offer has been publicly disclosed by MBE and
MWB, Regus intends to request that the Independent Committee of
Directors of MBE (the "Independent Committee") release it from the
NDA to allow it fully to explain its position to all relevant
stakeholders.
Regus notes the announcement made by MBE on 27 May 2011 and can
confirm that over the weekend of 18 and 19 March 2011 it did indeed
engage in an expedited and limited due diligence process in respect
of MBE.
Regus can also confirm that subsequent to the diligence process
it did make a proposed offer for the entire issued share capital of
MBE and that following the announcement of the MWB Offer, it
re-confirmed its proposed offer to the Independent Committee on 8
May 2011.
The Regus Offer
Regus notes the Independent Committee's reasons for not
recommending the Regus Offer. However:
-- Regus does not accept that its all cash offer, which is far
superior to the MWB Offer recommended by the Independent Committee,
fails to recognise the underlying fundamental value of MBE in the
medium to long term. Regus believes that the Regus Offer is highly
attractive to MBE shareholders because it represents a significant
premium to both the pre-MWB Offer share price and the value of the
MWB Offer;
-- Regus believes that the board of directors and shareholders
of each of MBE and MWB should give serious consideration to
supporting the Regus Offer;
-- Regus believes that the success of its all cash offer would
be in the best interests of all stakeholders, including MBE's
minority shareholders and MWB's shareholders as a whole. Regus
notes that on 28 April 2011 MBE reported pre-tax losses of GBP2.8
million for the six months ended 31 December 2010 and GBP5.0
million for the twelve months ended 31 December 2010. Regus also
notes that on 28 April 2011 MWB disclosed in its consolidated
interim results for the period to 31 December 2010 that the net
debt of the MWB group stood at GBP301.7 million;
-- Regus also notes that on 28 April 2011, MWB announced that it
had extended its financial year end to 30 June 2011. Further, on
that same day, MBE announced that it had also extended its
financial year end. The reason given for these extensions was that
MWB is in the advanced stages of concluding a debt refinancing
involving the extension of all of the group's banking facilities
(which are due to expire at the end of December 2011). Particularly
in light of the MWB group's net debt position as noted above, Regus
believes that its all cash offer could be of significant interest
to the banks involved in this refinancing process; and
-- Regus remains committed to its offer for MBE.
Given MWB's 72 per cent. shareholding in MBE, the Regus Offer
would, in due course, necessarily require MWB's support. However,
Regus is hopeful that once MBE shareholders, MWB shareholders and
the banks engaged in the refinancing process have had an
opportunity to consider the Regus Offer, MWB's support will be
forthcoming.
MWB representations
Regus is surprised by the representations made by MWB to the
Independent Committee in respect of seeking to levy or impose new
charges in relation to the provision of intra-group guarantees (or
the tax benefit received by MBE as a result of the application of
transfer pricing arrangements to the historic provision by MWB of
such guarantees) and working capital support to MBE, as disclosed
in MWB's and MBE's announcements of 27 May 2011.
Cancellation of trading in MBE shares on AIM
Regus notes a further representation made by MWB to the
Independent Committee that if the scheme of arrangement to
implement the MWB Offer does not become effective it intends to
requisition a meeting of the shareholders of MBE for the purpose of
passing a resolution to approve the cancellation of trading in MBE
shares on AIM. Regus notes that any cancellation of trading in MBE
shares would require the consent of not less than 75 per cent. of
votes cast by MBE's shareholders in a general meeting and that MWB
holds approximately 72 per cent. of MBE's issued share capital.
Next steps
A further announcement will be made if and when appropriate.
There can be no assurance that Regus will make an offer for
MBE.
Important notices
Given that some time has passed since the limited due diligence
exercise carried out by Regus in March 2011, and due to the
surprising and unexpected representations made by MWB to the
Independent Committee in respect of seeking to levy or impose new
charges in relation to the provision of intra-group guarantees (or
the tax benefit received by MBE as a result of the application of
transfer pricing arrangements to the historic provision by MWB of
such guarantees) and working capital support to MBE (as disclosed
in MWB's and MBE's announcements of 27 May 2011), Regus believes
that it is necessary and prudent to include the following
reservations in respect of the Regus Offer.
Regus reserves the right to make an offer at any time at a value
below 92.36 pence per MBE share:
(i) with the recommendation of the board of directors of
MBE;
(ii) to the extent that any dividend or other distribution or
payment to shareholders is announced, declared, made or paid by
MBE;
(iii) to the extent that any participant(s) in MBE's Long Term
Incentive Scheme ("LTIS") become(s) entitled to any payment(s)
under the LTIS as a result of the acquisition of MBE by Regus (on
the basis of the disclosure made at paragraph 14 of the
announcement regarding the MWB Offer, there should be no such
payments);
(iv) to the extent that MBE has agreed or agrees to waive,
cancel, forgive or release any indebtedness owed by MWB (or
subsidiaries of MWB) to MBE;
(v) to the extent that MWB successfully levies against MBE any
annual charge for the historic provision of guarantees to MBE in
respect of the performance of MBE's obligations regarding the
payment of rent to certain of its landlords;
(vi) to the extent that MWB successfully levies against MBE any
charge in respect of the tax benefit received by MBE as a result of
the application of the transfer pricing arrangements to the
historic provision by MWB of guarantee support; and
(vii) to the extent that MWB successfully imposes charges of
commercial interest rates and fees against MBE for historic working
capital support,
(in the case of each of (v) to (vii) above, as stated in the
announcements made by MWB and MBE on 27 May 2011)
Given the time since it conducted its due diligence, and in
particular because Regus would like to understand further on what
basis MWB is even able to proceed with levying new charges,
interest and fees as stated in the surprising and unexpected
representations made by MWB in today's announcements, Regus
believes that it would be prudent to include one pre-condition to
its offer. The Regus Offer is therefore subject to the
pre-condition that Regus be granted access by MBE to refresh its
due diligence, unless Regus determines that it is willing to waive
this pre-condition.
However, this announcement does not constitute an announcement
of a firm intention to make an offer under Rule 2.5 of the Code
and, accordingly, shareholders of MBE are advised that there can be
no certainty that any offer to acquire MBE shares will be made even
if this pre-condition is satisfied or waived.
Enquiries:
Investec Investment Banking (Financial adviser Tel: +44 20 7597
& broker to Regus) 5970
David Currie
Charles Batten
James Rudd
Brunswick Tel: +44 20 7404
5959
Simon Sporborg
Wendel Verbeek
Investec Investment Banking (which is authorised and regulated
in the United Kingdom by the Financial Services Authority) is
acting exclusively for Regus and for no one else in connection with
the possible offer and will not be responsible to anyone other than
Regus for providing the protections afforded to Investec Investment
Banking clients nor for providing advice in relation to the
possible offer orany other matters referred to in this
announcement.
Disclosure requirements of the Code
Under Rule 8.3(a) of the Code, any person who is interested in
1% or more of any class of relevant securities of an offeree
company must make an Opening Position Disclosure following the
commencement of the offer period. An Opening Position Disclosure
must contain details of the person's interests and short positions
in, and rights to subscribe for, any relevant securities of each of
the offeree company. An Opening Position Disclosure by a person to
whom Rule 8.3(a) applies must be made by no later than 3.30 pm
(London time) on the 10(th) business day following the commencement
of the offer period. Relevant persons who deal in the relevant
securities of the offeree company prior to the deadline for making
an Opening Position Disclosure must instead make a Dealing
Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes,
interested in 1% or more of any class of relevant securities of the
offeree company must make a Dealing Disclosure if the person deals
in any relevant securities of the offeree company. A Dealing
Disclosure must contain details of the dealing concerned and of the
person's interests and short positions in, and rights to subscribe
for, any relevant securities of the offeree company, save to the
extent that these details have previously been disclosed under Rule
8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies
must be made by no later than 3.30 pm (London time) on the business
day following the date of the relevant dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of an offeree company, they will be
deemed to be a single person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree
company and by any offeror and Dealing Disclosures must also be
made by the offeree company, by any offeror and by any persons
acting in concert with any of them (see Rules 8.1, 8.2 and
8.4).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Takeover Panel's website at www.thetakeoverpanel.org.uk,
including details of the number of relevant securities in issue,
when the offer period commenced and when any offeror was first
identified. If you are in any doubt as to whether you are required
to make an Opening Position Disclosure or a Dealing Disclosure, you
should contact the Panel's Market Surveillance Unit on +44 (0)20
7638 0129.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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