RNS Number:7512S
SPX Corporation
02 December 2003
Embargoed until further notice
SPX CORPORATION
December 2, 2003
Not for release, publication or distribution in or into the United States,
Canada, Japan or Australia
RECOMMENDED CASH OFFER BY J.P. MORGAN PLC ON BEHALF OF SPX AIR FILTRATION
LIMITED, A WHOLLY OWNED SUBSIDIARY OF SPX CORPORATION, FOR MCLEOD RUSSEL
HOLDINGS PLC
Summary
The boards of SPX Air Filtration Limited ("SPX Air Filtration"), a wholly owned
subsidiary of SPX Corporation ("SPX"), which has been advised by J.P. Morgan PLC
("JPMorgan") and McLeod Russel Holdings PLC ("McLeod Russel"), which has been
advised by Amethyst Corporate Finance PLC ("Amethyst") announce that they have
reached agreement on the terms of a recommended cash offer for McLeod Russel to
be made by JPMorgan on behalf of SPX Air Filtration.
The Offer will be made at 29 pence in cash for each McLeod Russel Share and
values the whole of McLeod Russel's issued share capital at approximately #15.1
million.
In addition, although the Directors of McLeod Russel have not declared a final
dividend in respect of the year to September 30, 2003, SPX Air Filtration has
agreed to procure that McLeod Russel Shareholders will receive a special interim
dividend of one pence per McLeod Russel Share to be paid within 14 days (or as
soon as practicable thereafter) of the Offer becoming or being declared wholly
unconditional. The special interim dividend will be paid to all McLeod Russel
Shareholders on the register at the close of business on the date prior to the
day on which the Offer becomes or is declared wholly unconditional.
The Offer (excluding the special interim dividend) represents a premium of
approximately 43.2 per cent. over the Closing Price of 20.25 pence on December
1, 2003, the last practicable date prior to the announcement of the Offer, and
approximately 20.8 per cent. over the Closing Price of 24 pence on March 26,
2003, the date immediately prior to the commencement of the Offer Period.
The Directors of McLeod Russel have given irrevocable undertakings to accept the
Offer in respect of the whole of their own beneficial holdings of, in aggregate,
645,870 McLeod Russel Shares representing approximately 1.2 per cent. of the
issued share capital of McLeod Russel.
In addition, SPX Air Filtration has received irrevocable undertakings from other
McLeod Russel Shareholders holding in aggregate 13,462,000 McLeod Russel Shares,
representing approximately 25.8 per cent. of the issued share capital of McLeod
Russel. These irrevocable undertakings will cease to be binding in the
circumstances described in the full text of the attached announcement.
SPX Air Filtration has also received non-binding letters of intent to accept the
Offer from the holders of 7,249,609 McLeod Russel Shares representing
approximately 13.9 per cent. of the issued share capital of McLeod Russel.
William C. Griffiths, President of SPX Fluid Systems, said:
"SPX is pleased to reach agreement with the Board of McLeod Russel. We believe
McLeod Russel is a great fit with our Air Treatment business and supports our
strategy to expand our existing filtration business into the industrial, process
and atmospheric filtration markets."
James Leek, Chairman of McLeod Russel, said:
"McLeod Russel is pleased to have agreed Offer terms with SPX and intends to
recommend that shareholders accept the Offer. We have confidence in the
long-term prospects for the McLeod Russel business but believe that McLeod
Russel is better suited to being part of a substantial international business
with a wide range of filtration interests and greater access to capital
resources."
This summary should be read in conjunction with the full text of the following
announcement.
The conditions to and certain further terms of the Offer are set out in Appendix
I to the full announcement.
ENQUIRIES
SPX
Tina Betlejewski, Corporate Communications
Jeremy Smeltser, Investor Relations
Tel: +1 704 752 4400
www.spx.com
JPMorgan (financial adviser to SPX and SPX Air Filtration)
Henry Lloyd
Eamon Brabazon
Tel: +44 (0)20 7600 2300
www.jpmorgan.com
McLeod Russel
James Leek
Ian Hazlehurst
Tel: +44 (0)1235 536677
www.mcleodrussel.com
Amethyst (financial adviser to McLeod Russel)
John Edwards
Marcus Shapiro
Tel: +44 (0)20 7936 9191
www.acfplc.com
Terms used in this summary shall have the meaning given to them in Appendix IV
to the full announcement. The Offer will be made solely by the Offer Document,
the Box Advertisement and the Form of Acceptance accompanying the Offer
Document, which will contain the full terms and conditions of the Offer as well
as details of how to accept the Offer. The Offer Document and Form of Acceptance
will be posted to McLeod Russel Shareholders entitled to receive the same as
soon as practicable and, in any event, within 28 days of this announcement.
The availability of the Offer to persons who are not resident in the United
Kingdom may be affected by the laws of their relevant jurisdiction. Such persons
should inform themselves of, and observe, any applicable legal or regulatory
requirements of their jurisdiction. Further details in relation to overseas
shareholders will be contained in the Offer Document.
This announcement does not constitute an offer or an invitation to purchase any
securities or the solicitation of an offer to buy securities.
JPMorgan, which is regulated in the UK by The Financial Services Authority, is
acting exclusively for SPX and SPX Air Filtration and no one else in connection
with the Offer and will not be responsible to anyone other than SPX and SPX Air
Filtration for providing the protections afforded to customers of JPMorgan, or
for providing advice in relation to the Offer or any other matter referred to in
this announcement.
Amethyst, which is regulated in the UK by The Financial Services Authority, is
acting exclusively for McLeod Russel and no one else in connection with the
Offer and will not be responsible to anyone other than McLeod Russel for
providing the protections afforded to customers of Amethyst, or for providing
advice in relation to the Offer or any other matter referred to in this
announcement.
The Offer will not be made, directly or indirectly, in or into or by the use of
the mails of, or by any means or instrumentality (including, without limitation,
telephonically or electronically) of interstate or foreign commerce of, or
through any facilities of a national securities exchange of, the United States,
Canada, Australia or Japan. Accordingly, copies of this announcement are not
being, and must not be mailed or otherwise forwarded, distributed or sent in,
into or from the United States, Canada, Australia or Japan and all persons
receiving this announcement (including nominees, trustees and custodians) must
not mail or otherwise forward, distribute or send it in, into or from the United
States, Canada, Australia or Japan. Not for release, publication or distribution
in, into or from the United States, Canada, Japan or Australia.
This announcement includes "forward-looking statements" relating to McLeod
Russel, SPX and the Offer that are subject to risks and uncertainties, including
those pertaining to the anticipated benefits to be realised from the proposed
acquisition of McLeod Russel. Factors that could cause SPX's actual results,
performance or achievements to differ materially from those described in this
announcement include: the inability to obtain necessary regulatory approvals or
to obtain them on acceptable terms; the costs, difficulties and uncertainties
related to successfully integrating McLeod Russel with SPX or realising
synergies from such integration; costs related to the acquisition of McLeod
Russel; the loss of one or more key customer or supplier relationships, changes
in the distribution outsourcing patterns, the costs and other effects of
governmental regulation and legal and administrative proceedings, and the
general economic environment of the industries in which SPX and McLeod Russel
operate. For additional information identifying further economic, political,
currency, regulatory, technological, competitive and important factors that
could cause SPX's actual results to differ materially from those anticipated,
see SPX's filings with the United States Securities and Exchange Commission as
updated from time to time. www.spx.com
Factors that could cause McLeod Russel's actual results, performance or
achievements to differ materially from those described in this announcement
include: the loss of one or more key customer or supplier relationships or
changes in the terms of those relationships; general economic conditions;
changes in applicable regulations and policies in McLeod Russel's markets;
McLeod Russel's ability to integrate acquisitions into its business; and the
costs and effects of legal and administrative proceedings, as well as other
factors identified in McLeod Russel's annual report for the year ended September
30, 2002, in the unaudited interim results of McLeod Russel for the six months
ended March 31, 2003 and the unaudited preliminary results for the year ended
September 30, 2003.
Forward-looking statements only speak as of the date on which they are made, and
the events discussed herein may not occur. Neither McLeod Russel nor SPX
undertakes any obligation to update publicly or revise forward-looking
statements, whether as a result of new information, future events or otherwise,
except to the extent legally required.
Embargoed until further notice
SPX CORPORATION
December 2, 2003
Not for release, publication or distribution in or into the United States,
Canada, Japan or Australia
RECOMMENDED CASH OFFER BY J.P. MORGAN PLC ON BEHALF OF SPX AIR FILTRATION
LIMITED, A WHOLLY OWNED SUBSIDIARY OF SPX CORPORATION, FOR MCLEOD RUSSEL
HOLDINGS PLC
Introduction
The boards of SPX Air Filtration, a wholly owned subsidiary of SPX, and McLeod
Russel announce that they have reached agreement on the terms of a recommended
cash offer to be made by JPMorgan on behalf of SPX Air Filtration for the whole
of the issued and to be issued McLeod Russel Shares.
Recommendation
The Directors of McLeod Russel, who have been so advised by Amethyst, consider
the terms of the Offer to be fair and reasonable. Accordingly, the Directors of
McLeod Russel intend unanimously to recommend McLeod Russel Shareholders to
accept the Offer. In providing its advice to the Directors of McLeod Russel,
Amethyst has taken into account the commercial assessments of the Directors of
McLeod Russel.
The Offer
On behalf of SPX Air Filtration, JPMorgan will offer to acquire, subject to the
conditions set out in Appendix I and on the further terms to be set out in the
Offer Document and in the Form of Acceptance, the entire issued and to be issued
share capital of McLeod Russel on the following basis:
For each McLeod Russel Share 29 pence in cash
The Offer values the whole of McLeod Russel's issued and to be issued share
capital at approximately #15.1 million.
As net debt was approximately #13.2 million as at September 30, 2003, this
implies an enterprise value (being the aggregate of the value of the McLeod
Russel Group's equity and net debt) on a pro forma basis of approximately #28.3
million.
In addition, although the Directors of McLeod Russel have not declared a final
dividend in respect of the year to September 30, 2003, SPX Air Filtration has
agreed to procure that McLeod Russel Shareholders will receive a special interim
dividend of one pence per McLeod Russel Share to be paid within 14 days (or as
soon as practicable thereafter) of the Offer becoming or being declared wholly
unconditional. The special interim dividend will be paid to all McLeod Russel
Shareholders on the register at the close of business on the date prior to the
day on which the Offer becomes or is declared wholly unconditional.
The Offer (excluding the special interim dividend) represents a premium of
approximately 43.2 per cent. over the Closing Price of 20.25 pence on December
1, 2003, the last practicable date prior to the announcement of the Offer, and
approximately 20.8 per cent. over the Closing Price of 24 pence on March 26,
2003, the date immediately prior to the commencement of the Offer Period.
The McLeod Russel Shares which are the subject to the Offer will be acquired by
SPX Air Filtration fully paid and free from all liens, charges, equitable
interests, encumbrances and any other third party rights of any nature
whatsoever and together with all rights now or hereafter attaching to them, with
the exception of the special interim dividend.
The Offer will extend to any McLeod Russel Shares issued or unconditionally
allotted while the Offer remains open for acceptance, including any McLeod
Russel Shares allotted or issued pursuant to the exercise of options under the
McLeod Russel Share Schemes.
Irrevocable Undertakings and Letters of Intent
Irrevocable undertakings and letters of intent to accept the Offer have been
received from the Directors of McLeod Russel and other shareholders
representing, in aggregate, approximately 41.0 per cent. of the existing issued
share capital of McLeod Russel.
Name Number
James Leek 320,000
Ian Hazlehurst 136,535
Richard Cotton 24,335
Robert Froy 165,000
Other McLeod Russel shareholders
Ellis Bor* 7,225,000
Insight Investments** 4,700,000
Schroder Investment Management ** 2,549,609
Adair family* 2,112,000
Electra Partners Europe* 2,075,000
Jupiter Asset Management* 2,050,000
* These shareholders have given irrevocable undertakings which represent in
aggregate approximately 25.8 per cent. of the existing issued share capital of
McLeod Russel. The undertakings from shareholders other than the Directors of
McLeod Russel (in respect of an aggregate of 13,462,000 McLeod Russel Shares)
will cease to be binding in the event of an offer for the issued share capital
of McLeod Russel by another party prior to the Offer being declared
unconditional as to acceptances which represents an improvement of 10 per cent.
or more over the value of the Offer.
** In addition, SPX Air Filtration has received non-binding letters of intent to
accept the Offer from these shareholders holding in aggregate 7,249,609 McLeod
Russel Shares representing approximately 13.9 per cent. of the issued share
capital of McLeod Russel.
Background to and reasons for the Offer
As further described in the Chairman's statement in McLeod Russel's preliminary
results announcement for the year ended September 30, 2003 ("the Announcement"),
the trading environment experienced by the McLeod Russel Group, particularly
over the last year, has been a very difficult one and the McLeod Russel
Directors believe that there is currently no indication of any significant
improvement in the short-term. In response to both difficult market conditions
and an uncertain outlook across Europe, McLeod Russel has been implementing an
extensive programme of cost reduction and rationalisation, which is intended to
position the McLeod Russel Group better for the future.
In addition to this difficult trading environment, the McLeod Russel Group has,
in common with many other UK companies, suffered significant deficits in its
defined benefits pension schemes. These have resulted in substantial additional
minimum funding requirement contributions of approximately #0.7 million in the
year just ended September 30, 2003 and a commitment to pay #1.6 million per
annum for the current and future years as referred to in the Announcement.
On March 27, 2003, McLeod Russel announced that it had received an unsolicited
third party approach regarding a possible offer for McLeod Russel. On April 11,
2003, the McLeod Russel Board indicated that it was evaluating that approach and
would consider any other serious approaches the McLeod Russel Group may receive.
Discussions with major shareholders indicated that, although supportive of the
McLeod Russel Group's strategy, they believed a sale of the McLeod Russel Group
in a structured and orderly way may realise better value for shareholders than
waiting for a market recovery and an improved stock market rating. Against this
background, the McLeod Russel Group initiated a process to deliver value for
shareholders through seeking an offer for the Company.
Discussions have taken place with a number of parties since that time, including
other trade participants and private equity houses. This process has culminated
in the current Offer from SPX Air Filtration. In parallel, the McLeod Russel
Board has been considering the alternative of remaining independent which may
restore shareholder value in the longer term in the event that no acceptable
third party offer was forthcoming. This alternative strategy would, however, be
dependent on agreeing new facilities with lenders; raising additional capital
from existing shareholders or other sources; and appointing both a new chief
executive and chairman as previously announced. Having explored these options,
the Directors of McLeod Russel believe unanimously that the Offer from SPX Air
Filtration represents the best alternative for McLeod Russel Shareholders since
it provides an opportunity for them to realise their investment for cash at a
value which may not otherwise be possible for some time.
McLeod Russel will provide SPX with a larger presence in the European air
filtration market and will enhance SPX's product offering and growth profile in
this segment. The combination of McLeod Russel's product offering in atmospheric
air filtration and SPX's product offering in compressed air filtration will
better position the combined entity to benefit from the recovery in industrial
markets and will offer significant opportunities for improvements in
profitability through the synergies between these two businesses. In addition,
growth opportunities will be improved as a result of wider access to new
markets. SPX will also afford McLeod Russel the opportunity to sell its products
into the larger North American market, which until now, it has been unable to
do.
Information on SPX and SPX Air Filtration
SPX is a global multi-industry company with annual revenues of approximately
US$5 billion. Founded in 1911 SPX is a Fortune 500 corporation with operations
in over 20 countries and over 24,000 employees worldwide. SPX is headquartered
in Charlotte, North Carolina, USA and its stock is traded on the New York and
Pacific Stock Exchanges under the symbol "SPW".
SPX's businesses are organised into four strategic segments: Technical Products
and Systems, Industrial Products and Services, Flow Technology and Service
Solutions. Its products and services include fire detection and building
life-safety products, TV and radio broadcast antennas and towers, laboratory and
life science equipment, power transformers, compaction equipment, cooling
towers, filtration and dehydration products, and valves and fluid handling
devices. Other products and services include diagnostics, speciality tools and
service equipment, and technical information and services.
Following the completion of the acquisition, McLeod Russel will become a part of
SPX's Air Treatment business in the Flow Technology segment. SPX Air Treatment
manufactures filtration and dehydration products and provides service for
compressed air and process gas systems. It provides products and services to the
petrochemical, power generation, electronics and light manufacturing industries,
and its products and services include compressed air and gas dryers and
filtration products, as well as closures, pig signallers, separators and
strainers.
SPX is listed on NYSE with a market capitalisation of approximately US$4.3
billion as at December 1, 2003. In the year ended December 31, 2002 SPX reported
consolidated net income from continuing operations of US$140.3 million on total
revenues of US$4,822.3 million. As at September 30, 2003 SPX had total
shareholders' equity of US$1,728.6 million.
SPX Air Filtration is a newly incorporated company, incorporated in England
solely for the purposes of making the Offer. SPX Air Filtration, which has not
traded to date, is a wholly owned direct subsidiary of SPX Corporation.
Information on McLeod Russel
McLeod Russel is an international group with market leading filtration
expertise. McLeod Russel provides innovative products, services and know-how in
all aspects of clean air and industrial liquid filtration.
McLeod Russel's portfolio of filtration products includes: Vokes, Scandfilter,
Interfilta, Atex-Filter, Climavent, Infiltro, Stream-Line and Seasonmaster. This
combination enables McLeod Russel to deliver market focused solutions through
its four core sales divisions: Medical Systems, Process Air, Indoor Air and
Industrial Systems. In addition to its core Clean Air and Liquid Filtration
activities, McLeod Russel also has a number of smaller subsidiaries, including
Eurogard, BV, a leading applicator of scratch and U.V. resistant hard coatings
onto transparent plastics.
McLeod Russel Current Trading
McLeod Russel announced its preliminary results for the year ended September 30,
2003 today. The results showed a loss before tax of #11million after additional
pension costs and exceptional expenses of #7.7 million on turnover of #73.7
million. This resulted from a combination of the continued weak European
economic environment; the provision for the cost of additional McLeod Russel
Group contributions to fund the pension schemes deficits; and the exceptional
expense associated with the cost reduction and rationalisation programme.
The current trading outlook remains difficult. Whilst the cost reduction and
rationalisation programme, which primarily affected McLeod Russel's operations
in the UK, France and Germany, has now been completed according to the timetable
envisaged, the benefits will only become apparent next year and beyond.
Management and Employees
SPX Air Filtration has given assurances to the McLeod Russel Board that, on the
Offer becoming or being declared unconditional in all respects, the existing
employment rights, including pension rights, of all employees of McLeod Russel
will be fully safeguarded.
SPX views the management and employees of McLeod Russel as critical to the
success of McLeod Russel's businesses.
Financing of the Offer
SPX and SPX Air Filtration will fund the aggregate consideration payable under
the Offer from available cash resources and credit facilities. JPMorgan is
satisfied that sufficient resources are available for SPX Air Filtration to
satisfy the consideration payable as a result of full acceptance of the Offer.
McLeod Russel Share Schemes
The Offer will extend to any McLeod Russel Shares which are unconditionally
allotted or issued pursuant to the exercise of existing options under the McLeod
Russel Share Schemes while the Offer remains open for acceptance (or such
earlier time or date SPX Air Filtration may, subject to the rules of the Code,
decide). However, McLeod Russel Optionholders should note that the level of the
Offer is below the exercise price of any options in issue.
Disclosure of Interests in McLeod Russel
As at December 1, 2003, the last practicable date prior to this announcement,
neither SPX Air Filtration, nor any of the directors of SPX Air Filtration, nor
their close relatives and related trusts, nor, so far as SPX Air Filtration is
aware, any party acting in concert with SPX Air Filtration, owned or controlled
McLeod Russel Shares
Compulsory Acquisition and Delisting Procedures
If the Offer becomes or is declared unconditional in all respects and sufficient
acceptances are received, it is SPX Air Filtration's intention:
(a) to apply the provisions of sections 428 to 430F of the Companies Act
(inclusive) to acquire compulsorily any remaining McLeod Russel Shares to which
the Offer relates on the same terms as the Offer; and
(b) to procure that McLeod Russel applies to the UK Listing Authority for
cancellation of the listing of the McLeod Russel Shares on the Official List and
to the London Stock Exchange for the cancellation of trading of McLeod Russel
Shares on the London Stock Exchange's market for listed securities.
It is anticipated that the cancellation of McLeod Russel's listing and admission
to trading will take effect no earlier than the expiry of 20 business days after
the date on which the Offer becomes or is declared unconditional in all
respects. De-listing would significantly reduce the liquidity and marketability
of any McLeod Russel Shares not assented to the Offer.
Responsibility for Information in this Document
The Directors of SPX Air Filtration and John B. Blystone, Chairman, President
and CEO of SPX, accept responsibility for the information contained in this
document, other than that relating to the McLeod Russel Group, the Directors of
McLeod Russel and their immediate families, related trusts and persons connected
with them, for which the Directors of McLeod Russel accept responsibility as set
out below. To the best of the knowledge and belief of the Directors of SPX Air
Filtration and John B. Blystone (who have taken all reasonable care to ensure
that such is the case) the information contained in this document for which they
are responsible is in accordance with the facts and does not omit anything
likely to affect the import of such information.
The Directors of McLeod Russel accept responsibility for the information
contained in this document relating to the McLeod Russel Group, themselves and
their immediate families, related trusts and persons connected with them. To the
best of the knowledge and belief of the Directors of McLeod Russel (who have
taken all reasonable care to ensure that such is the case) the information
contained in this document for which they are responsible is in accordance with
the facts and does not omit anything likely to affect the import of such
information.
General
The formal document relating to the Offer (containing the full terms and
conditions of the Offer) will be dispatched by JPMorgan to McLeod Russel
Shareholders and participants in the McLeod Russel Share Schemes as soon as
practicable and, in any event, within 28 days after the date of this
announcement.
Appendix II contains details of the financial effects of acceptance of the
Offer. Appendix III contains details of the bases and sources of information in
respect of the information contained in this announcement. Appendix IV contains
definitions used in this announcement.
The availability of the Offer to persons outside the UK may be affected by the
laws of the relevant jurisdiction. Such persons should inform themselves about
and observe any applicable requirements. This announcement does not constitute
an offer or an intention to purchase any securities.
ENQUIRIES
SPX
Tina Betlejewski, Corporate Communications
Jeremy Smeltser, Investor Relations
Tel: +1 704 752 4400
www.spx.com
JPMorgan (financial adviser to SPX and SPX Air Filtration)
Henry Lloyd
Eamon Brabazon
Tel: +44 20 7600 2300
www.jpmorgan.com
McLeod Russel
James Leek
Ian Hazlehurst
Tel: +44 1235 536677
www.mcleodrussel.com
Amethyst (financial adviser to McLeod Russel)
John Edwards
Marcus Shapiro
Tel: +44 20 7936 9191
www.acfplc.com
Terms used in this summary shall have the meaning given to them in Appendix IV
to the full announcement. The Offer will be made solely by the Offer Document,
the Box Advertisement and the Form of Acceptance accompanying the Offer
Document, which will contain the full terms and conditions of the Offer as well
as details of how to accept the Offer. The Offer Document and Form of Acceptance
will be posted to McLeod Russel Shareholders entitled to receive the same as
soon as practicable and, in any event, within 28 days of this announcement.
The availability of the Offer to persons who are not resident in the United
Kingdom may be affected by the laws of their relevant jurisdiction. Such persons
should inform themselves of, and observe, any applicable legal or regulatory
requirements of their jurisdiction. Further details in relation to overseas
shareholders will be contained in the Offer Document.
This announcement does not constitute an offer or an invitation to purchase any
securities or the solicitation of an offer to buy securities.
JPMorgan, which is regulated in the UK by The Financial Services Authority, is
acting exclusively for SPX and SPX Air Filtration and no one else in connection
with the Offer and will not be responsible to anyone other than SPX and SPX Air
Filtration for providing the protections afforded to customers of JPMorgan, or
for providing advice in relation to the Offer or any other matter referred to in
this announcement.
Amethyst, which is regulated in the UK by The Financial Services Authority, is
acting exclusively for McLeod Russel and no one else in connection with the
Offer and will not be responsible to anyone other than McLeod Russel for
providing the protections afforded to customers of Amethyst, or for providing
advice in relation to the Offer or any other matter referred to in this
announcement.
The Offer will not be made, directly or indirectly, in or into or by the use of
the mails of, or by any means or instrumentality (including, without limitation,
telephonically or electronically) of interstate or foreign commerce of, or
through any facilities of a national securities exchange of, the United States,
Canada, Australia or Japan. Accordingly, copies of this announcement are not
being, and must not be mailed or otherwise forwarded, distributed or sent in,
into or from the United States, Canada, Australia or Japan and all persons
receiving this announcement (including nominees, trustees and custodians) must
not mail or otherwise forward, distribute or send it in, into or from the United
States, Canada, Australia or Japan. Not for release, publication or distribution
in, into or from the United States, Canada, Japan or Australia.
This announcement includes "forward-looking statements" relating to McLeod
Russel, SPX and the Offer that are subject to risks and uncertainties, including
those pertaining to the anticipated benefits to be realised from the proposed
acquisition of McLeod Russel. Factors that could cause SPX's actual results,
performance or achievements to differ materially from those described in this
announcement include: the inability to obtain necessary regulatory approvals or
to obtain them on acceptable terms; the costs, difficulties and uncertainties
related to successfully integrating McLeod Russel with SPX or realising
synergies from such integration; costs related to the acquisition of McLeod
Russel; the loss of one or more key customer or supplier relationships, changes
in the distribution outsourcing patterns, the costs and other effects of
governmental regulation and legal and administrative proceedings, and the
general economic environment of the industries in which SPX and McLeod Russel
operate. For additional information identifying further economic, political,
currency, regulatory, technological, competitive and important factors that
could cause SPX's actual results to differ materially from those anticipated,
see SPX's filings with the United States Securities and Exchange Commission as
updated from time to time. www.spx.com
Factors that could cause McLeod Russel's actual results, performance or
achievements to differ materially from those described in this announcement
include: the loss of one or more key customer or supplier relationships or
changes in the terms of those relationships; general economic conditions;
changes in applicable regulations and policies in McLeod Russel's markets;
McLeod Russel's ability to integrate acquisitions into its business; and the
costs and effects of legal and administrative proceedings, as well as other
factors identified in McLeod Russel's annual report for the year ended September
30, 2002, in the unaudited interim results of McLeod Russel for the six months
ended March 31, 2003 and the unaudited preliminary results for the year ended
September 30, 2003.
Forward-looking statements only speak as of the date on which they are made, and
the events discussed herein may not occur. Neither McLeod Russel nor SPX
undertakes any obligation to update publicly or revise forward-looking
statements, whether as a result of new information, future events or otherwise,
except to the extent legally required.
APPENDIX I
A. Conditions Of The Offer
The Offer, which will be made by JPMorgan on behalf of SPX Air Filtration, will
be subject to the following conditions:
1. Acceptances
Valid acceptances being received (and not, where permitted, withdrawn) by no
later than 3.00pm on the first closing date of the Offer (or, subject to the
Code, such later time(s) and/or dates(s) as SPX Air Filtration may decide) in
respect of not less than 90 per cent (or such lesser percentage as SPX Air
Filtration may decide) of the McLeod Russel Shares to which the Offer relates.
However, this condition will not be satisfied unless SPX Air Filtration has
acquired or agreed to acquire McLeod Russel Shares carrying, in aggregate, over
50 per cent of the voting rights then normally exercisable at general meetings
of McLeod Russel including, for this purpose, to the extent (if any) required by
the Code, the voting rights attaching to any McLeod Russel Shares which may be
unconditionally allotted or issued before the Offer becomes or is declared
unconditional as to acceptances. In this condition:
(a) the expression "McLeod Russel Shares to which the Offer relates" shall be
construed in accordance with sections 428 to 430F (inclusive) of the Companies
Act; and
(b) McLeod Russel Shares which have been unconditionally allotted but not issued
shall be deemed to carry the voting rights which they will carry when they are
issued; and
(c) valid acceptances shall be treated as having been received in respect of any
McLeod Russel Shares that the Wider SPX Air Filtration Group shall, pursuant to
section 429(8) and, if applicable, section 430E of the Companies Act, be treated
as having acquired or contracted to acquire by virtue of acceptances of the
Offer.
2. Competition Issues
(a) without limitation to condition 3 below, insofar as the proposed acquisition
of McLeod Russel by SPX Air Filtration or any matter arising from it falls
within the statutory provisions for possible reference to the Competition
Commission or has been referred in whole or in part by the European Commission
under Article 9(1) of Council Regulation (EEC) 4064/89 as amended by Council
Regulation (EEC) 1310/97 ("the Regulation"), it being established in terms
satisfactory to SPX Air Filtration, acting reasonably, that neither the proposed
acquisition nor any matter arising from it will be referred to in the
Competition Commission; and
(b) without limitation to condition 3 below, it being established, in terms
satisfactory to SPX Air Filtration, acting reasonably, that it is not the
intention of the European Commission or within its jurisdiction, pursuant to the
Regulation, either to initiate proceedings under Article 6(1)(c) of the
Regulation or to make a referral to a competent authority of any Member State of
the European Union under Article 9(1) of the Regulation in respect of the Offer
and the proposed acquisition by SPX Air Filtration of McLeod Russel or any
matters arising out of it.
3. Authorisations
(a) all authorisations in any jurisdiction which are necessary for, or in
respect of, the Offer, its implementation or any acquisition of any shares in,
or control of, McLeod Russel or any other member of the Wider McLeod Russel
Group by any member of the Wider SPX Air Filtration Group having been obtained
in terms and in a form satisfactory to SPX Air Filtration acting reasonably from
any relevant person or from any person or body with whom any member of the Wider
McLeod Russel Group has entered into contractual arrangements and all such
authorisations remaining in full force and effect and there being no intimation
of any intention to revoke or not renew the same; and
(b) all authorisations which SPX Air Filtration reasonably considers necessary
to carry on the business of any member of the Wider McLeod Russel Group
remaining in full force and effect and there being no intimation of any
intention to revoke or not to renew the same.
4. Regulatory Intervention
No relevant person having taken, instituted, implemented or threatened any legal
proceedings, or having required any action to be taken or having enacted, made
or proposed any statute, regulation, order or decision or taken any other step
and there not continuing to be outstanding any statute, regulation, order or
decision that would or might reasonably be expected to:
(a) make the Offer, its implementation or the acquisition or proposed
acquisition of any shares in, or control or management of, the Wider McLeod
Russel Group by SPX Air Filtration illegal, void or unenforceable; or
(b) otherwise directly or indirectly prevent, prohibit or otherwise materially
restrict, restrain, delay or interfere in the implementation of or impose
additional conditions or obligations with respect to or otherwise challenge or
require amendment of the Offer or the proposed acquisition of McLeod Russel by
SPX Air Filtration or any acquisition of shares in McLeod Russel by SPX Air
Filtration; or
(c) require, prevent or materially delay the divestiture by SPX Air Filtration
of any shares or other securities in McLeod Russel; or
(d) impose any material limitation on the ability of any member of the Wider SPX
Air Filtration Group or any member of the Wider McLeod Russel Group to acquire
or hold or exercise effectively, directly or indirectly, any rights of ownership
of shares or other securities or the equivalent in any member of the Wider
McLeod Russel Group or management control over any member of the Wider McLeod
Russel Group in any such case in a manner or to an extent which is material to
SPX Air Filtration in the context of the Wider McLeod Russel Group taken as a
whole; or
(e) require, prevent or materially delay the disposal by McLeod Russel or any
member of the Wider SPX Air Filtration Group, or require the disposal or alter
the terms of any proposed disposal by any member of the Wider McLeod Russel
Group, of all or any part of their respective businesses, assets or properties
or impose any limitation on the ability of any of them to conduct their
respective businesses or own their respective assets or properties in any such
case in a manner or to an extent which is material to SPX Air Filtration in the
context of the Wider McLeod Russel Group taken as a whole; or
(f) require any member of the Wider SPX Air Filtration Group or of the Wider
McLeod Russel Group to offer to acquire any shares or other securities (or the
equivalent) in any member of the Wider McLeod Russel Group or any member of the
Wider SPX Air Filtration Group owned by any third party (in each case, other
than in implementation of the Offer), where such acquisition would be material
to SPX Air Filtration in the context of the Wider McLeod Russel Group taken as a
whole; or
(g) impose any limitation on the ability of any member of the Wider SPX Air
Filtration Group or the Wider McLeod Russel Group to integrate or co-ordinate
its business, or any part of it, with the businesses or any part of the
businesses of any other member of the Wider SPX Air Filtration Group and/or the
Wider McLeod Russel Group in each case in a manner which would be material to
SPX Air Filtration in the context of the Wider McLeod Russel Group taken as a
whole; or
(h) result in any member of the Wider SPX Air Filtration Group or the Wider
McLeod Russel Group ceasing to be able to carry on business under any name under
which it presently does so to an extent which is material to SPX Air Filtration
in the context of the Wider McLeod Russel Group taken as a whole;
and all applicable waiting and other time periods during which any such relevant
person could institute, or implement or threaten any legal proceedings, having
expired, lapsed or been terminated.
5. Consequences Of The Offer
Save as Disclosed there being no provision of any agreements to which any member
of the Wider McLeod Russel Group is a party, or by or to which any such member,
or any part of its assets, may be bound, entitled or subject, which would or
might, in each case as a consequence of the Offer or of the acquisition or
proposed acquisition of all or any part of the issued share capital of, or
change of control or management of, McLeod Russel or any other member of the
McLeod Russel Group reasonably be expected to result (in each case to an extent
which is material to SPX Air Filtration in the context of the Wider McLeod
Russel Group taken as a whole) in:
(a) any material assets or interests of any member of the Wider McLeod Russel
Group being or falling to be disposed of or charged in any way or ceasing to be
available to any member of the Wider McLeod Russel Group or any rights arising
under which any such asset or interest could be required to be disposed of or
charged in any way or could cease to be available to any member of the Wider
McLeod Russel Group; or
(b) any moneys borrowed by or other indebtedness (actual or contingent) of, or
any grant available to, any member of the Wider McLeod Russel Group being or
becoming repayable or capable of being declared repayable immediately or earlier
than the repayment date stated in such agreement or the ability of such member
of the Wider McLeod Russel Group to incur any such borrowing or indebtedness
becoming or being capable of becoming withdrawn, inhibited or prohibited; or
(c) any such agreement or the rights, liabilities, obligations or interests of
any such member under it being terminated or adversely modified or affected or
any onerous obligation arising or any adverse action being taken under it; or
(d) the financial or trading position or prospects or value of any member of the
Wider McLeod Russel Group being prejudiced or adversely affected; or
(e) the creation of any mortgage, charge or other security interest over the
whole or any part of the business, property or assets of any member of the Wider
McLeod Russel Group or any such security (whenever arising or having arisen)
becoming enforceable or being enforced; or
(f) any member of the Wider McLeod Russel Group ceasing to be able to carry on
business under any name under which or on the terms on which it currently does
so or any person presently not able to carry on business under any name under
which any member of the Wider McLeod Russel Group currently does becoming able
to do so; or
(g) the creation of actual or contingent liabilities by any member of the Wider
McLeod Russel Group; or
(h) the ability of any member of the Wider SPX Air Filtration Group to carry on
its business being adversely affected in any material respect,
and no event having occurred which, under any provision of any such agreement to
which any member of the Wider McLeod Russel Group is a party, or by or to which
any such member, or any of its assets, may be bound, entitled or subject, could
result, to an extent which is material to SPX Air Filtration in the context of
the Wider McLeod Russel Group taken as a whole, in any of the events or
circumstances as are referred to in subparagraphs (a) to (h) inclusive.
6. No Corporate Action Taken Since The Accounting Date
Since the Accounting Date, save as otherwise Disclosed no member of the Wider
McLeod Russel Group having:
(a) issued or agreed to issue or authorised or proposed the issue or grant of
additional shares of any class or securities convertible into or exchangeable
for, or rights, warrants or options to subscribe for or acquire, any such shares
or convertible securities (save pursuant to the McLeod Russel Share Schemes); or
(b) redeemed, purchased, repaid or reduced or proposed the redemption, purchase,
repayment or reduction of any part of its share capital or made or proposed the
making of any other change to its share capital; or
(c) recommended, declared, paid or made or proposed to recommend, declare, pay
or make any dividend, bonus issue or other distribution whether payable in cash
or otherwise, save for the interim dividend of 1 pence per McLeod Russel Share
to be paid in lieu of a final dividend for the year ended September 30, 2003 ;
or
(d) merged or demerged with or from, or acquired, any body corporate or
authorised or proposed or announced any intention to propose any such merger or
demerger; or
(e) other than in the ordinary course of business acquired or disposed of,
transferred, mortgaged or charged, or created or granted any security interest
over, any assets (including shares and trade investments) or authorised or
proposed or announced any intention to propose any acquisition, disposal,
transfer, mortgage, charge or creation or grant of any security interest (which
in any case is material in the context of the Wider McLeod Russel Group taken as
a whole); or
(f) issued or authorised or proposed the issue of any debentures or incurred or
increased any borrowings, indebtedness or liability (actual or contingent)
otherwise that in the ordinary and normal course of business of any aggregate
amount which is material in the context of the Wider McLeod Russel Group taken
as a whole; or
(g) entered into or varied, or authorised or proposed the entry into or
variation of, or announced its intention to enter into or vary, any transaction,
arrangement, contract or commitment (whether in respect of capital expenditure
or otherwise) which is of a long term, onerous or unusual nature or magnitude or
could involve an obligation of such nature or magnitude or which is or could be
restrictive to the existing business of any member of the Wider McLeod Russel
Group or which is other than in the ordinary course of business and which in any
such case is material in the context of the Wider McLeod Russel Group taken as a
whole; or
(h) entered into, implemented, effected, authorised or proposed or announced its
intention to enter into, implement, effect, authorise or propose any contract,
reconstruction, amalgamation, scheme, commitment or other transaction or
arrangement otherwise than in the ordinary course of business which is material
in the context of the Wider McLeod Russel Group taken as a whole; or
(i) waived or compromised any claim which is material in the context of the
Wider McLeod Russel Group taken as a whole, or
(j) entered into or varied or made any offer (which remains open for acceptance)
to enter into or vary the terms of any contract with any of the directors or
senior executives of McLeod Russel or (to the extent it is material in the
context of the Wider McLeod Russel Group taken as a whole) any of the directors
or senior executives of any other member of the Wider McLeod Russel Group; or
(k) taken or proposed any corporate action or had any legal proceedings
instituted or threatened against it or petition presented for its winding-up
(voluntary or otherwise), dissolution or reorganisation or for the appointment
of a receiver, administrator, administrative receiver, trustee or similar
officer of all or any material part of its assets and revenues or for any
analogous proceedings or steps in any jurisdiction or for the appointment of any
analogous person in any jurisdiction which in any case is material in the
context of the Wider McLeod Russel Group taken as a whole; or
(l) been unable, or admitted in writing that it is unable, to pay its debts or
has stopped or suspended (or threatened to stop or suspend) payment of its debts
generally or ceased or threatened to cease carrying on all or a substantial part
of its business, in any case which is or would be material in the context of the
Wider McLeod Russel Group taken as a whole; or
(m) made any alteration to its memorandum or articles of association, or other
incorporation documents; or
(n) in relation to the pension schemes established for its directors and/or
other employees and/or their dependants, made or consented to any change, in any
case which is or would be material in the context of the Wider McLeod Russel
Group taken as a whole, to:
(i) the terms of the trust deeds constituting such pension schemes or to the
benefits which accrue;
(ii) the pensions which are payable, under them;
(iii) the basis on which qualifications for or accrual of or entitlement to
such benefits or pensions are calculated or determined;
(iv) the basis upon which the liabilities (including pensions) of such
pension schemes are funded or made;
(v) or agreed or consented to any change to the trustees of such pension
schemes; or
(o) entered into any agreement or passed any resolution or made any offer (which
remains open for acceptance) or proposed or announced any intention with respect
to any of the transactions, matters or events referred to in this condition 6.
7. Other Events Since the Accounting Date
In the period since the Accounting Date save as Disclosed:
(a) no litigation or arbitration proceedings, prosecution, investigation or
other legal proceedings having been announced, instituted, threatened or
remaining outstanding by, against or in respect of, any member of the Wider
McLeod Russel Group or to which any member of the Wider McLeod Russel Group is
or may become a party (whether as claimant, defendant or otherwise) which is
material in the context of the Wider McLeod Russel Group taken as a whole; or
(b) no adverse change or deterioration having occurred in the business or assets
or financial or trading position or prospects, assets or profits of any member
of the Wider McLeod Russel Group which is material in the context of the Wider
McLeod Russel Group taken as a whole; or
(c) no enquiry or investigation by, or complaint or reference to, any relevant
person against or in respect of any member of the Wider McLeod Russel Group
having been threatened, announced, implemented or instituted or remaining
outstanding by, against or in respect of, any member of the Wider McLeod Russel
Group which in any such case is material in the context of the Wider McLeod
Russel Group taken as a whole; or
(d) no contingent or other liability having arisen or become apparent or
increased which is material in the context of the Wider McLeod Russel Group
taken as a whole.
8. Environmental and Other Issues
Save as Disclosed SPX Air Filtration not having discovered that:
Environmental
(a) any past or present member of the Wider McLeod Russel Group has not complied
in a material respect with all applicable legislation or regulations or
authorisations of any jurisdiction with regard to the use, handling, storage,
transport, production, supply, treatment, keeping, disposal, discharge,
spillage, leak or emission of any waste or hazardous substance or any substance
likely to damage or impair the environment or harm human health or otherwise
relating to environmental matters or the health and safety of any person or that
there has otherwise been any such use, handling, storage, transport, production,
supply, treatment, keeping, disposal, discharge, spillage, leak or emission
(whether or not the same constituted a non-compliance by any person with any
such legislation or regulations or authorisations and wherever the same may have
taken place), which, in any such case, would be likely to give rise to any
liability (whether actual or contingent) or cost on the part of any member of
the Wider McLeod Russel Group which is material in the context of the Wider
McLeod Russel Group taken as a whole; or
(b) there has been a material disposal, discharge, release, spillage, leak or
emission of any waste or hazardous substance or any substance likely to damage
or impair the environment or harm human health which would be likely to give
rise to any liability (whether actual or contingent) or cost on the part of any
member of the Wider McLeod Russel Group which is material in the context of the
Wider McLeod Russel Group taken as a whole; or
(c) there is, or is likely to be any liability (whether actual or contingent) or
cost on the part of any member of the Wider McLeod Russel Group to make good,
repair, reinstate or clean up any relevant asset or any other property or any
controlled waters under any environmental legislation, regulation, notice,
circular, order or other lawful requirement of any relevant person or third
party or otherwise which is material in the context of the Wider McLeod Russel
Group taken as a whole; or
(d) circumstances exist (whether as a result of the making of the Offer or
otherwise):
(i) which would be likely to lead to any relevant person instituting; or
(ii) whereby any past or present member of the Wider McLeod Russel Group
would be likely to be required to institute
an environmental audit or take any steps which would in any such case be likely
to result in any actual or contingent liability to improve or modify existing
plant or install new plant, machinery or equipment or carry out any changes in
the processes carried out or make good, repair, reinstate or clean up any
relevant asset or any other property or any controlled waters which is material
in the context of the Wider McLeod Russel Group taken as a whole;
Product Liability
(e) circumstances exist whereby a person or class of persons would be likely to
have any claim or claims in respect of any product or process of manufacture or
materials used therein as a result of such product or process of manufacture or
materials containing asbestos now or previously manufactured, sold or carried
out by any past or present member of the Wider McLeod Russel Group, which claim
or claims would be likely to be material in the context of the Wider McLeod
Russel Group taken as a whole;
Information
(f) the financial, business or other information Disclosed by any member of the
Wider McLeod Russel Group, whether publicly or in the context of the Offer
either contained a material misrepresentation of fact or omitted to state a fact
necessary to make the information disclosed not materially misleading in the
context of the Offer; or
(g) any information Disclosed by or on behalf of any member of the Wider McLeod
Russel Group is materially incorrect in the context of the Offer and not
corrected in writing prior to the date of this document.
B. Certain Further Terms of the Offer
The conditions are inserted for the benefit of SPX Air Filtration and no McLeod
Russel Shareholder shall be entitled to waive any of the conditions without the
prior consent of SPX Air Filtration.
Subject to the requirements of the Panel, SPX Air Filtration reserves the right
to waive all or any of conditions 2 to 8 (inclusive) in whole or in part;
Each of conditions 1 to 8 shall be regarded as a separate condition and shall
not be limited by reference to any other condition.
The Offer will lapse if the proposed acquisition of McLeod Russel is referred to
the Competition Commission or if the European Commission either initiates
proceedings under Article 6(1)(c) of the Regulation or makes a referral to a
competent authority of the United Kingdom under Article 9(1) of the Regulation
before 3.00 p.m. on the first closing date or the time and date on which the
Offer becomes or is declared unconditional as to acceptances (whichever is the
later).
If the Offer lapses, it will cease to be capable of further acceptance and
persons accepting the Offer and SPX Air Filtration shall thereupon cease to be
bound by acceptances submitted before the time the Offer lapses.
The Offer will lapse unless all of the conditions relating to the Offer have
been fulfilled or (if capable of waiver) waived by, or, where appropriate, have
been determined by SPX Air Filtration acting reasonably to be and remain
satisfied by, midnight on the twenty first day after the later of:
(a) the first closing date; or
(b) the date on which the Offer becomes unconditional as to acceptances
or such later date as SPX Air Filtration may, with the consent of the Panel,
decide. SPX Air Filtration shall be under no obligation to waive or treat as
satisfied any condition by a date earlier than the latest date specified above
for its satisfaction even though the other conditions of the Offer may, at such
earlier date, have been waived or fulfilled and there are, at such earlier date,
no circumstances indicating that any such conditions may not be capable of
fulfilment.
If SPX Air Filtration is required by the Panel to make an offer for McLeod
Russel Shares under Rule 9 of the Code, SPX Air Filtration may make such
alterations to the conditions of the Offer set out above, including condition 1,
as are necessary to comply with that Rule;
McLeod Russel Shares will be acquired by SPX Air Filtration fully paid and free
from all liens, equities, charges, equitable interests, encumbrances, rights of
pre-emption and any other third party right and/or interests of any nature
whatsoever and together with all rights attaching to them, now or in the future,
including the right to receive and retain all dividends, interest and other
distributions declared, paid or made after the Announcement Date, save for the
special interim dividend of 1 pence per McLeod Russel Share, to be paid in lieu
of a final dividend for the year ended September 30, 2003.
The Offer will not be made, directly or indirectly, in, into or by use of the
mails of, or by any means or instrumentality (including, without limitation,
telephonically, or electronically) of interstate or foreign commerce of, or any
facilities of a national securities exchange of, the United States, Canada,
Australia or Japan or any other jurisdiction if to do so would constitute a
violation of the relevant laws of such jurisdiction. This document does not
constitute an offer in the United States, Canada, Australia or Japan or any such
other jurisdiction and the Offer should not be accepted by any such use, means,
instrumentality or facilities or otherwise from or within the United States,
Canada, Australia or Japan or any such other jurisdiction. Accordingly, copies
of this document are not being and must not be mailed, transmitted or otherwise
distributed in whole or in part, in, into or from the United States, Canada,
Australia or Japan or any such other jurisdiction and persons receiving this
announcement (including, without limitation, custodians, nominees and trustees)
must not mail or otherwise forward, distribute or send it in, into or from the
United States, Canada, Australia or Japan. or any such other jurisdiction. Doing
so may render invalid any purported acceptance of the Offer.
The Offer will comply with English law and the Code.
APPENDIX II
FINANCIAL EFFECTS OF ACCEPTANCE OF THE OFFER
The following table shows, for illustrative purposes only, and on the bases and
assumptions set out in the notes below, the financial effects of acceptance of
the Offer on capital value and investment income for an accepting holder of one
McLeod Russel share on the Offer becoming or being declared wholly
unconditional:
a. Increase in capital value under the terms of the Offer (including payment of
special interim dividend)
Capital Value (p)
Value of one McLeod Russel Share . . . . . . . . . . . . . . . . . . . . . (i) 20.25
Cash consideration (including the special interim dividend) . . . . . 30.00
Increase in capital value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.75
Percentage increase in capital value . . . . . . . . . . . . . . . . . . . . . 48.1%
b. Increase in investment income under the terms of the Offer
Gross Income (p)
Income from reinvestment of cash consideration . . . . . . . . . . . (ii) 1.36
Dividend income from one McLeod Russel Share . . . . . . . . . . (iii) 0.00
Increase in income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.36
Notes:
(i) The value of a McLeod Russel Share is based on the Closing Price on December
1, 2003 (the last practicable date prior to the announcement of the Offer).
(ii) The gross income from the cash consideration has been calculated on the
assumption that the cash is re-invested so as to yield 4.53 per cent. per annum,
being the average FTSE Actuaries Government Securities Index gross redemption
yield for UK gilts of maturities of up to five years as available on Bloomberg
on December 1, 2003 (the latest practicable date prior to publication of this
announcement). Assumes reinvestment of special interim dividend.
(iii) No dividends were declared or paid in respect of McLeod Russel Shares
relating to the year ended September 30, 2003.
(iv) No account has been taken of any potential liability to taxation.
APPENDIX III
BASES AND SOURCES OF INFORMATION
Save as otherwise set out in this announcement, the following constitute the
bases and sources of information referred to in this document.
Information on McLeod Russel
Unless otherwise stated, financial information relating to McLeod Russel has
been extracted from the audited consolidated results for the year ended
September 30, 2002 and the unaudited preliminary results for the year ended
September 30, 2003.
Value of the Offer
References to the value of the Offer for the whole of the issued and to be
issued share capital of McLeod Russel assumes the number of McLeod Russel Shares
currently in issue to be 52,110,541.
APPENDIX IV
DEFINITIONS
The following definitions apply throughout this announcement, unless the context
requires otherwise:
"Accounting Date" September 30, 2002
"Agreements" arrangements, agreements, commitments, licences, permits, franchises, partnerships, joint
ventures, authorisations or other instrument
"Amethyst" Amethyst Corporate Finance PLC
"Announcement" preliminary results announcement for the year ended September 30, 2003
"Authorisations" authorisations, orders, recognitions, grants, consents, licences, confirmations, clearances,
permissions and approvals
"Australia" the Commonwealth of Australia, its states, territories and possessions
"Canada" Canada, its provinces and territories and all areas subject to its jurisdiction and any
political sub-divisions thereof
"Closing Price" the closing middle market quotation of a McLeod Russel Share as derived from the Daily
Official List of the London Stock Exchange
"Code" The City Code on Takeovers and Mergers
"Companies Act" the Companies Act 1985 as amended
"Directors of McLeod the directors of McLeod Russel
Russel"
"Disclosed" publicly announced by McLeod Russel prior to the day of announcement of the Offer or as
disclosed in writing by McLeod Russel, the McLeod Russel Group or its legal, financial,
actuarial or accounting advisers to SPX or its legal, financial or accounting advisers in the
course of negotiations leading to the Offer prior to the day of announcement of the Offer
"First closing date" the date falling 21 days after the date on which the Offer Document is posted
"Form(s) of the form of acceptance, election and authority relating to the Offer which will accompany the
Acceptance" Offer Document
"intellectual property" all patents, trademarks, trade names, service marks, copyrights, designs, databases and any
applications therefor, schematics, technology, know-how, computer software, programs or
applications (in both source code and object code form), and tangible or intangible
proprietary information or material
"Japan" Japan, its cities and prefectures, territories and possessions
"JPMorgan" J.P. Morgan PLC
"legal proceedings" actions, suits, proceedings, investigations, references or enquiries
"Listing Rules" the rules and regulations made by the Financial Services Authority in its capacity as the UK
Listing Authority under the Financial Services and Markets Act 2000, and contained in the UK
Listing Authority's publication of the same name
"London Stock Exchange" London Stock Exchange PLC
"McLeod Russel" or "the McLeod Russel Holdings PLC
Company"
"McLeod Russel Board" the board of directors of McLeod Russel
"McLeod Russel Group" McLeod Russel and its subsidiary undertakings
"McLeod Russel holders of options under the McLeod Russel Share Schemes
Optionholders"
"McLeod Russel Share(s)" the existing unconditionally allotted or issued and fully paid shares of 10 pence each in
McLeod Russel and any further such shares which are unconditionally allotted or issued while
the Offer remains open for acceptance (or, subject to the provisions of the Code, such
earlier date as SPX Air Filtration may decide) upon the exercise of any options or conversion
rights or otherwise
"McLeod Russel holders of McLeod Russel Shares
Shareholder(s)"
"McLeod Russel Share the 1996 Executive Share Option Scheme, the 2001 Savings Related Share Option Scheme and the
Schemes" Executive Share Option Scheme
"Offer" the recommended offer to be made by JPMorgan on behalf of SPX Air Filtration to acquire all
of the McLeod Russel Shares (other than any already owned by any member of the Wider SPX
Group) on the terms and subject to the conditions set out in this document and the further
terms which will be incorporated in the Offer Document and the Forms of Acceptance and any
subsequent revision, variation, extension or renewal thereof
"Offer Document" the document to be sent to McLeod Russel Shareholders and McLeod Russel Optionholders which
will contain the Offer
"Offer Period" as defined in The City Code on Takeovers and Mergers, and which commenced on March 27, 2003
in relation to McLeod Russel
"Panel" the Panel on Takeover and Mergers
"relevant asset" land, property or other asset now or previously owned, occupied or made use of by any past or
present member of the Wider McLeod Russel Group
"relevant persons" governments, governmental, quasi-governmental, supra-national, statutory, investigative,
regulatory or administrative bodies or trade agencies, associations, institutions or courts,
or professional or environmental bodies, or any other persons or bodies whatsoever in any
jurisdiction
"SPX" SPX Corporation
"SPX Air Filtration" SPX Air Filtration Limited, a wholly owned subsidiary of SPX and incorporated in England
"substantial interest" a direct or indirect interest in 20 per cent or more of the equity capital of an undertaking
"third party" person, firm, company or body
"UK or "United Kingdom" the United Kingdom of Great Britain and the province of Northern Ireland and its territories
and Crown dependencies
"UKLA" UK Listing Authority
"US" or "United States" the United States of America, its territories and possessions, any state of the United States
of America and the District of Columbia and all other territories subject to its jurisdiction
"US Persons" has the meaning given in Regulation S under the US Securities Act of 1933, as amended
"Wider SPX Air SPX and its subsidiaries, subsidiary undertakings, associated undertakings and any other
Filtration Group" undertakings in which SPX and/or such subsidiaries or undertakings (aggregating their
interests) have a substantial interest
"Wider McLeod Russel McLeod Russel and its subsidiaries, subsidiary undertakings, associated undertakings and any
Group" other undertakings in which McLeod Russel and/or such subsidiaries or undertakings
(aggregating their interests) have a substantial interest
All references to legislation in this document are to English legislation unless
the contrary is indicated. Any reference to any provision of any legislation
shall include any amendment, modification, re-enactment or extension thereof.
Words importing the singular shall include the plural and vice versa, and words
importing the masculine gender shall include the feminine or neutral gender.
For the purposes of this document, "subsidiary", "subsidiary undertaking",
"undertaking" and "associated undertaking" have the respective meanings assigned
to them under the Companies Act.
This information is provided by RNS
The company news service from the London Stock Exchange
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