TIDMMBE TIDMMWB TIDMRGU
RNS Number : 1897I
MWB Business Exchange Plc
09 June 2011
MWB Business Exchange plc
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
9 June 2011
MWB Business Exchange plc ("Business Exchange")
INDEPENDENT BUSINESS EXCHANGE DIRECTORS RESTATE SUPPORT FOR
RECOMMENDED ACQUISITION BY MWB
-- There is no Regus Offer
-- There is material price uncertainty around the Conditional Regus Proposal
-- Business Exchange has engaged with Regus and met with Mark Dixon on 11
May 2011
-- Business Exchange has shared detailed and commercially sensitive
financial and other information with Regus
-- The Independent Business Exchange Directors invite Regus to table an
unconditional offer
-- Recommended Acquisition by MWB provides Business Exchange Minority
Shareholders with opportunity to participate in any future value creation
-- No proposal can succeed without MWB support
Further to the announcement by Regus plc ("Regus") of 7 June
2011 confirming, inter alia, its plans to withdraw its indicative
offer (the "Conditional Regus Proposal") at 17.00 (BST) on 13 June
2011, in the absence of fulfilment of certain conditions set out in
that announcement, the Independent Business Exchange Directors
restate their support for the recommended Acquisition by MWB and
their rationale for so doing.
There is no Regus Offer
The Conditional Regus Proposal is referred to in Regus'
announcement of 7 June 2011 (and subsequent press) as an "Offer".
It was and is nothing more than an indicative proposal which was
subject to certain pre-conditions and does not constitute an offer
which is capable of being put to, or accepted by, Business Exchange
Minority Shareholders. Among other pre-conditions, Regus confirmed
that the support of MWB would be required before any offer would be
made. MWB has confirmed that it does not support the Conditional
Regus Proposal.
Formal Scheme documents in relation to the recommended
Acquisition by MWB were posted on 27 May 2011 and shareholder and
court meetings to approve the Acquisition have been convened for 22
June 2011. Proxy forms should be completed and returned by 20 June
2011.
There is material price uncertainty around the Conditional Regus
Proposal
The Conditional Regus Proposal as originally communicated on 8
May 2011 was expressed to be subject to only two pre-conditions. In
its announcement of 27 May 2011 Regus introduced a new
pre-condition relating to due diligence, and reserved its right to
reduce its indicative offer price by reference to a number of
issues. This qualifies the extent to which any weight can be
attached to statements by Regus that it is committed to the
Conditional Regus Proposal at the price communicated by Regus
within its announcement of 27 May 2011. Regus also stated within
its announcement on 27 May 2011 that there could be no certainty
that any offer would ultimately be made by Regus for Business
Exchange.
Business Exchange has engaged with Regus and met with Mark Dixon
on 11 May 2011
In order to consider fully the Conditional Regus Proposal, the
Independent Business Exchange Directors also engaged in dialogue
with both Regus and its advisers. This dialogue included a
face-to-face meeting between Independent Business Exchange
Directors and Mark Dixon of Regus on 11 May 2011.
The Independent Business Exchange Directors invite Regus to
table an unconditional offer
In light of the detailed and commercially sensitive financial
and other information made available by Business Exchange to Regus
as recently as March 2011 (which is why the NDA referred to in
previous Regus announcements exists) and Regus' pre-existing
knowledge of the UK serviced office market as a major participant
in that market, the Independent Business Exchange Directors are
surprised at the level of conditionality surrounding the
Conditional Regus Proposal, although they note that this is
consistent with Business Exchange's prior experience in its
informal dealings with Regus over many years. In order to clarify
further Regus' position for Business Exchange Minority
Shareholders, they invite Regus to confirm the price at which it
would be willing to table an offer, conditional only upon the
support of MWB Group, to acquire Business Exchange. In the absence
of any change in position by MWB or Regus within the timeframe now
stipulated by Regus the Independent Business Exchange Directors see
no benefit in allowing a trade competitor of Business Exchange to
undertake further confirmatory due diligence, which may include the
release of additional commercially sensitive information.
As set out in the formal Scheme document, MWB provides active
support for Business Exchange in the form, inter alia, of short
term working capital facilities as and when required and indirectly
in the form of rental guarantees to landlords in respect of a
significant number of Business Exchange business centres. As the
representations received by the Independent Business Exchange
Directors from MWB described within the formal Scheme document have
made clear, the terms upon which such support is made available in
the future in the event that the Scheme does not become effective
may impact adversely upon the value of Business Exchange Shares.
There is no obligation under the Takeover Code upon MWB as the
controlling shareholder to make an offer to Business Exchange
Minority Shareholders to acquire their shares, either now or at any
time in the future in order to further consolidate its controlling
position. The recommended Acquisition by MWB, because it is
available to all Business Exchange Minority Shareholders, is a
transparently fair mechanism.
The Independent Business Exchange Directors emphasise that they
remain willing to consider any further proposal (whether from Regus
or from any other party) on its merits, including its
conditionality, recognising that any proposal which does not carry
MWB's support cannot lead to an offer which is capable of
acceptance by Business Exchange Minority Shareholders.
Recommended Acquisition by MWB provides Business Exchange
Minority Shareholders with opportunity to participate in any future
value creation
As noted within the formal Scheme document, the Independent
Business Exchange Directors have serious reservations about the
merits of a cash sale of Business Exchange in current market
conditions (noting also that the maximum price under the
Conditional Regus Proposal represents a multiple of only 3.1 times
peak EBITDA of Business Exchange). They also stated within the
Scheme document their judgment that the maximisation of Business
Exchange's future value is most likely to come from running it for
the medium term under full ownership by MWB. The Business Exchange
second interim report for the period ended 31 December 2010 stated,
inter alia, that any significant improvement (in profitability of
Business Exchange) may be deferred into 2012. By contrast, MWB
(whose stated intention is to realise its assets for the benefit of
its shareholders in the medium term under the Cash Distribution
Programme) confirmed, in its second interim report for the period
ended 31 December 2010, its intention to reduce its debt
significantly over the next twelve months and to facilitate the
planned expansion of MWB's hotel brands both within the UK and, in
appropriate circumstances, abroad. In reaching their decision to
recommend the Acquisition by MWB, the Independent Business Exchange
Directors took account of the fact that the Acquisition terms
comprised substantially a securities exchange offer into a main
market listed company with a more liquid market and a more
diversified investment profile than Business Exchange. The
Independent Business Exchange Directors remain of the view (subject
of course to the risk factors identified in the Scheme document)
that the recommended Acquisition by MWB, if implemented, would
provide Business Exchange Minority Shareholders with the
opportunity to participate in any future upside from the wider MWB
Group, in addition to the potential upside from any future
realisation of Business Exchange under the terms of the Cash
Distribution Programme.
No proposal can succeed without MWB support
Between announcing recommended terms for the Acquisition and the
posting of formal Scheme documents, the Independent Business
Exchange Directors received the Conditional Regus Proposal.
Following consultation with MWB, it became clear that MWB did not
then support the Conditional Regus Proposal and MWB has since
reconfirmed both that it does not support the Conditional Regus
Proposal and that it intends to retain its shareholding in Business
Exchange in the medium term in order to build the value of Business
Exchange as the economy improves. The Independent Business Exchange
Directors therefore concluded that the Conditional Regus Proposal
was not deliverable (irrespective of the availability of funds to
Regus). They now welcome Regus' acknowledgement that the
Conditional Regus Proposal cannot succeed without the support of
MWB. In other words, in the absence of any indication from MWB that
it would consider favourably any offer which might be made, it is
certain that the Conditional Regus Proposal can never lead to a
formal offer which is capable of acceptance by Business Exchange
Minority Shareholders.
Further details of developments subsequent to the announcement
of recommended terms for the Acquisition, including certain
representations made by MWB, are set out in the formal Scheme
document.
ENQUIRIES:
MWB Business Exchange Plc
Malcolm Murray, Independent Non-Executive Director
Keval Pankhania, Finance Director
Tel: 020 7868 7255
Brewin Dolphin Limited (Financial Adviser to Business
Exchange)
Sandy Fraser
Tel: 0845 213 2072
Baron Phillips Associates (Financial PR Adviser)
Baron Phillips
Tel: 0207 920 3161 / 07767 444 193
Brewin Dolphin Limited, which is authorised and regulated in the
United Kingdom by the FSA, is acting exclusively for Business
Exchange in connection with the Acquisition and for no-one else and
will not be responsible to anyone other than Business Exchange for
providing the protections afforded to its clients nor for providing
any advice in relation to the Acquisition or the contents of this
announcement or any transaction, arrangement or matter referred to
in this announcement.
This announcement is not intended to, and does not constitute,
or form part of, an offer to sell or an invitation to purchase or
subscribe for any securities or a solicitation of any vote or
approval in any jurisdiction. This announcement does not constitute
a prospectus or a prospectus equivalent document. Shareholders are
advised to read carefully the formal documentation in relation to
the Acquisition once it has been despatched. The proposals for the
Acquisition will be made solely through the Scheme Document, which
will contain the full terms and conditions of the Scheme, including
details of how to vote with respect to the Scheme. Any response to
the proposals should be made only on the basis of the information
in the Scheme Document.
Overseas Shareholders
The release, publication or distribution of this announcement in
jurisdictions other than the United Kingdom may be restricted by
law and therefore any persons who are subject to the laws of any
jurisdiction other than the United Kingdom should inform themselves
about, and observe, any applicable requirements. This announcement
has been prepared for the purposes of complying with English law
and the City Code and the information disclosed may not be the same
as that which would have been disclosed if this announcement had
been prepared in accordance with the laws and regulations of any
jurisdiction outside of England.
No offer is being made, directly or indirectly, in or into any
Restricted Jurisdiction. Accordingly, unless otherwise determined
by Business Exchange, copies of this announcement are not being and
must not be, directly or indirectly, mailed or otherwise forwarded,
distributed or sent in or into or from any Restricted Jurisdiction
and persons receiving copies of this announcement (including
custodians, nominees and trustees) must not mail or otherwise
forward, distribute or send any such copies in or into or from any
such Restricted Jurisdiction.
The New MWB Units may not be offered, sold, or delivered,
directly or indirectly, in, into or from the United States absent
registration under the US Securities Act or an exemption from
registration. The New MWB Units to be issued under the Scheme will
be issued in reliance upon the exemption from the registration
requirements of the US Securities Act provided by Section 3(a)(10)
thereof. Under applicable US securities laws, persons (whether or
not US persons) who are or will be "affiliates" (within the meaning
of the US Securities Act) of MWB after the Effective Date will be
subject to certain transfer restrictions relating to the New MWB
Units received in connection with the Scheme.
Forward-Looking Statements
This announcement and the information incorporated by reference
into this announcement may include forward-looking statements. All
statements other than statements of historical facts included in
this announcement and the information incorporated by reference
into this announcement, including, without limitation, those
regarding the Business Exchange Group's and the MWB Group's
financial position, business strategy, plans and objectives of
management for future operations, are forward-looking statements.
In some cases, these forward-looking statements can be identified
by the use of forward-looking terminology, including the terms
"believes", "estimates", "plans", "prepares", "anticipates",
"expects", "intends", "may", "will" or "should" or, in each case,
their negative or other variations or comparable terminology.
Investors should specifically consider the factors identified in
this announcement which could cause actual results to differ before
making an investment decision. Such forward-looking statements
involve known and unknown risks, uncertainties and other factors
which may cause the actual results, performance or achievements of
the Business Exchange Group and the MWB Group to be materially
different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Such
forward-looking statements are based on numerous assumptions
regarding the Business Exchange Group's and the MWB Group's present
and future business strategies and the environment in which the
Business Exchange Group and the MWB Group will operate in the
future. These forward-looking statements speak only as of the date
on which they are made. Save as required by the Takeover Panel, the
FSA, the London Stock Exchange or applicable law, including,
without limitation, the City Code, the Prospectus Rules, the
Disclosure and Transparency Rules, the Listing Rules and the AIM
Rules, Business Exchange and MWB expressly disclaim any obligation
or undertaking to release publicly any updates or revisions to any
forward-looking statement contained herein to reflect any change in
Business Exchange's or the Business Exchange Group's and the MWB
Group's expectations with regard thereto or any change in events,
conditions or circumstances on which any such statement is
based.
Not a profit forecast
No statement in this announcement is intended as a profit
forecast or profit estimate and no statement in this announcement
should be interpreted to mean that the future earnings per share of
the MWB Group, MWB and/or Business Exchange for current or future
financial years will necessarily match or exceed the historical or
published earnings per share of MWB and/or Business Exchange.
Dealing Disclosure Requirements
Under Rule 8.3(a) of the City Code, any person who is interested
in 1 per cent. or more of any class of relevant securities of an
offeree company or of any paper offeror (being any offeror other
than an offeror in respect of which it has been announced that its
offer is, or is likely to be, solely in cash) must make an "Opening
Position Disclosure" following the commencement of the offer period
and, if later, following the announcement in which any paper
offeror is first identified. 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 (i)
the offeree company and (ii) any paper offeror(s). An Opening
Position Disclosure by a person to whom Rule 8.3(a) of the City
Code applies must be made by no later than 3.30 p.m. on the 10(th)
business day following the commencement of the offer period and, if
appropriate, by no later than 3.30 p.m. on the 10th business day
following the announcement in which any paper offeror is first
identified. Relevant persons who deal in the relevant securities of
the offeree company or of a paper offeror prior to the deadline for
making an Opening Position Disclosure must instead make a "Dealing
Disclosure".
Under Rule 8.3(b) of the City Code, any person who is, or
becomes, interested in 1 per cent. or more of any class of relevant
securities of the offeree company or of any paper offeror must make
a Dealing Disclosure if the person deals in any relevant securities
of the offeree company or of any paper offeror. 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 each of (i) the offeree company and
(ii) any paper offeror, save to the extent that these details have
previously been disclosed under Rule 8 of the City Code. A Dealing
Disclosure by a person to whom Rule 8.3(b) of the City Code applies
must be made by no later than 3.30 p.m. (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 or a paper
offeror, they will be deemed to be a single person for the purpose
of Rule 8.3 of the City Code.
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 of
the City Code).
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.
Online availability of this announcement
In accordance with Rule 19.11 of the City Code, a copy of this
announcement will be available on Business Exchange's website
(www.mwbex.com).
This information is provided by RNS
The company news service from the London Stock Exchange
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