RNS No 2769w
ACORN GROUP PLC
27 April 1999
Part 1
Not for release, distribution or publication in or into the United
States, Canada, Australia or Japan.
MSDW Investment Holdings Limited
Recommended Offer for
Acorn Group plc
The boards of MSDW Investment Holdings Limited and Acorn Group plc
announce that they have reached agreement on the terms of a recommended
Offer for all the issued and to be issued share capital of Acorn.
The Offer is being made on the basis of 2 ARM Holdings Ordinary Shares
for every 5 Acorn Ordinary Shares held. It is intended that the consideration
under the Offer will be satisfied from The ARM Holdings Ordinary Shares
currently owned by Applied RISC Technologies Limited, a wholly-owned
subsidiary of Acorn.
Based on the closing middle market price of 697.5p per ARM Holdings
Ordinary Share on 26 April 1999, the last Business Day prior to the date of
this announcement, the Offer values each Acorn Ordinary Share at 279.0p
and the fully diluted share capital of Acorn at approximately #269.8 million.
The Offer represents a premium of 13.9 per cent. over the closing middle
market price of 245.0p per Acorn Ordinary Share on 26 April 1999, the
last Business Day prior to the date of this announcement, and a premium of
35.7 per cent. to the average discount of 15.8 per cent. at which Acorn
Ordinary Shares have traded to the post-tax value per share of Acorn's
investment in ARM Holdings over the six months prior to the date of this
announcement.
MSDW Investment Holdings has received irrevocable undertakings to
accept the Offer from the Acorn Directors and from Providence Investment
Company Limited, a company wholly-owned by a discretionary trust under
which Dr Hermann Hauser (an Acorn Director) is a potential beneficiary, in
respect of their entire holdings of 2,738,800 Acorn Ordinary Shares
representing in aggregate approximately 3.0 per cent. of the issued share
capital of Acorn.
In addition, MSDW Investment Holdings has received irrevocable
undertakings to accept the Offer from institutional and other shareholders of
Acorn in respect of 45,973,996 Acorn Ordinary Shares representing in
aggregate approximately 49.6 per cent. of the issued share capital of Acorn.
Accordingly, MSDW Investment Holdings has received irrevocable
undertakings to accept the Offer in respect of a total of 48,712,796 Acorn
Ordinary Shares representing in total approximately 52.6 per cent. of the
issued share capital of Acorn.
Acorn is also announcing today its preliminary results for the year ended
31 December 1998. These show an operating loss of #10.0 million on
turnover of #11.5 million.
Acorn has also agreed to sell its Set-top Box Business to Pace Micro
Technology plc, and to grant an option to a company owned by
Mr Boland, Chief Executive, and certain senior management of Acorn
to purchase its Media DSP Business. The Set-top Box Business and the
Media DSP Business comprise the operating businesses of Acorn. Both
transactions are conditional on the Offer being declared unconditional in all
respects. Mr Boland, by virtue of his interest in the option agreement, is
precluded from expressing an opinion on, or giving a recommendation of,
the terms of the Offer.
The Independent Board of Acorn which has been so advised by Close
Brothers, its financial advisers, considers the terms of the Offer to be fair
and reasonable. In providing advice to the Independent Board of Acorn,
Close Brothers has taken account of the Acorn Directors' commercial
assessments. In the opinion of the Independent Board of Acorn the Offer
by MSDW Investment Holdings represents the best available solution for the
Acorn Shareholders and offers greater value than that which would be
achieved in either a demerger or distribution in specie of The ARM
Holdings Ordinary Shares to the Acorn Shareholders or by any other
practical alternative. The Independent Board of Acorn unanimously
recommends Acorn Shareholders to accept the Offer.
Commenting on today's announcement, Gordon Owen CBE,
Chairman of Acorn said:
"I am delighted that we have been able to generate a value enhancing
solution which enables Acorn shareholders to participate directly in
ARM's extraordinary success. As well as delivering significantly greater
value to Acorn shareholders, the Offer achieves this with greater speed
and certainty than any other available solution."
This summary should be read in conjunction with the full text of the following
announcement. The conditions of the Offer are set out in Appendix I to this
announcement. Appendix III contains definitions of certain expressions
used in this announcement.
Press enquiries:
Acorn Group plc Gordon Owen CBE 0171 206 5410
Stan Boland 01223 725 003
Close Brothers Stephen Aulsebrook 0171 426 4000
Simon Willis
Morgan Stanley Simon Robey 0171 425 5000
& Co. Limited
The Offer is not being made directly or indirectly in or into the United
States, Canada, Australia or Japan, or to any North American Person or resident
of Australia or Japan or by use of the mails of, or by any means or
instrumentality of interstate or foreign commerce of, or any facilities of a
national securities exchange of, any of the aforesaid jurisdictions.
This includes, but is not limited to, the post, facsimile transmission, telex,
or any other electronic forms of transmission and telephone. Accordingly,
copies of this announcement, the formal Offer document, the Form of
Acceptance and any related documents are not being sent and must not be
mailed or otherwise distributed or sent in or into the United States, Canada,
Australia or Japan including to Acorn Shareholders, or participants in the
Acorn Share Option Schemes or the Element 14 Limited Share Option
Scheme, with registered addresses in any of the aforesaid jurisdictions or to
persons whom MSDW Investment Holdings knows, or has reason to
believe, to be custodians, trustees or nominees holding Acorn Ordinary
Shares for persons with addresses in any of the aforesaid jurisdictions.
Persons receiving this announcement and/or such documents (including,
without limitation, custodians, nominees and trustees) must not distribute
or send them in, into or from the United States, Canada, Australia or Japan
or use such mails or any such means, instrumentality or facility for any
purpose directly or indirectly in connection with the Offer, and so doing
may invalidate any purported acceptance of the Offer.
ARM Holdings Ordinary Shares being offered under the Offer have not
been and will not be registered under the United States Securities Act 1933,
as amended, or under the laws of any state of the United States (and the
relevant clearances have not been and will not be obtained from the
relevant authorities in Canada, Australia and Japan) and may not be
offered, sold, re-sold or delivered directly or indirectly, in or into the
United States, Canada, Australia or Japan or to a U.S. person (as this
term is defined in Regulation S under the United States Securities Act
1933, as amended), except pursuant to exemptions from the applicable
requirements of such jurisdictions.
The availability of the Offer to persons not resident in the United Kingdom
may be affected by the laws of the relevant jurisdictions. Acorn
Shareholders who are not resident in the United Kingdom should inform
themselves about, and observe, any applicable requirements.
Morgan Stanley & Co. Limited, which is regulated by The Securities and
Futures Authority Limited, is acting for MSDW Investment Holdings and
for no one else in connection with the Offer and will not be responsible to
anyone other than MSDW Investment Holdings for providing the
protections afforded to customers of Morgan Stanley & Co. Limited nor
for providing advice in relation to the Offer.
Close Brothers, which is regulated by The Securities and Futures Authority
Limited, is acting for Acorn and for no one else in connection with the
Offer and will not be responsible to anyone other than Acorn for providing
the protections afforded to customers of Close Brothers nor for providing
advice in relation to the Offer.
27 April 1999
Not for release, distribution or publication in or into the United
States, Canada, Australia or Japan.
MSDW Investment Holdings Limited
Recommended Offer for
Acorn Group plc
1. Introduction
The boards of MSDW Investment Holdings Limited and Acorn Group plc
announce that they have reached agreement on the terms of a recommended
Offer to be made by Morgan Stanley & Co. Limited on behalf of MSDW
Investment Holdings, a wholly owned subsidiary of the Morgan Stanley Dean
Witter Group, for all the issued and to be issued share capital of Acorn. It
is intended that the consideration under the Offer will be satisfied from The
ARM Holdings Ordinary Shares currently owned by Applied RISC Technologies
Limited, a wholly-owned subsidiary of Acorn. Acorn Shareholders will therefore
become direct shareholders in ARM Holdings.
Acorn has also agreed to sell its Set-top Box Business to Pace Micro
Technology plc and to grant an option to a company owned by Mr Boland,
Chief Executive, and certain senior management of Acorn to purchase its
Media DSP Business. The Set-top Box Business and the Media DSP
Business comprise the operating businesses of Acorn. Both transactions are
conditional on the Offer being declared unconditional in all respects. Mr
Boland, by virtue of his interest in the option agreement, is precluded from
expressing an opinion on, or giving a recommendation of, the terms of
the Offer.
The Independent Board of Acorn which has been so advised by Close Brothers, its
financial advisers, considers the terms of the Offer to be fair and reasonable.
In providing advice to the Independent Board of Acorn, Close Brothers has taken
account of the Acorn Directors' commercial assessments. The Independent Board
of Acorn unanimously recommends Acorn Shareholders to accept the Offer.
2. Shareholdings and undertakings
MSDW Investment Holdings has received irrevocable undertakings to accept
the Offer from the Acorn Directors and from Providence Investment
Company Limited, a company wholly-owned by a discretionary trust under
which Dr Hermann Hauser (an Acorn Director) is a potential beneficiary,
in respect of their entire holdings of 2,738,800 Acorn Ordinary Shares
representing in aggregate approximately 3.0 per cent. of the issued share
capital of Acorn. These irrevocable undertakings cease to be binding if the
Offer is withdrawn, not made or lapses and, in the case of the irrevocable
undertaking given by Providence Investment Company Limited will also
cease to be binding in certain other circumstances.
In addition, MSDW Investment Holdings has received irrevocable
undertakings to accept the Offer from institutional and other shareholders of
Acorn in respect of 45,973,996 Acorn Ordinary Shares representing in
aggregate approximately 49.6 per cent. of the issued share capital of Acorn.
These irrevocable undertakings cease to be binding in each case if the Offer
is withdrawn, not made, lapses or in the event that a higher offer is made
which in the reasonable opinion of MSDW Investment Holdings represents an
improvement of at least 10.0 per cent. over the value of the consideration
available under the Offer.
Accordingly, MSDW Investment Holdings has received irrevocable
undertakings to accept the Offer in respect of a total of 48,712,796 Acorn
Ordinary Shares representing in total approximately 52.6 per cent. of the
issued share capital of Acorn.
MSDW Investment Holdings beneficially owns 100 Acorn Ordinary Shares
representing in aggregate approximately 0.0001 per cent. of the issued
share capital of Acorn.
3. The recommended Offer
The Offer will be made, subject to the conditions set out below and in
Appendix I, on the following basis:
For 5 Acorn Ordinary Shares 2 ARM Holdings Ordinary Shares
and so in proportion for any other number of Acorn Ordinary Shares held.
Based on the closing middle market price of 697.5p per ARM Holdings
Ordinary Share on 26 April 1999, the last Business Day prior to the date
of this announcement, the Offer values each Acorn Ordinary Share at
279.0p and the entire issued and to be issued share capital of Acorn at
approximately #269.8 million.
The Offer represents a premium of approximately 13.9 per cent. over the
closing middle market price of 245.0p per Acorn Ordinary Share on
26 April 1999, the last Business Day prior to the date of this
announcement and, a premium of 35.7 per cent. to the average discount
of 15.8 per cent. at which Acorn Ordinary Shares have traded to the
post-tax value per share of Acorn's investment in ARM Holdings over
the six months prior to the date of this announcement.
Under the Offer, fractions of ARM Holdings Ordinary Shares will not be
transferred to accepting Acorn Shareholders who will receive instead
cash from MSDW Investment Holdings in respect of their fractional
entitlements equal to their respective pro rata share of the net amount
which would have been received if such fractional entitlements had been
aggregated and sold at the closing middle market price of ARM Holdings
Ordinary Shares on the Business Day that the Offer is declared
unconditional in all respects.
The bases and sources of the financial information on, and the financial
effects of, the Offer are set out in Appendix II.
4. Background to and reasons for the Offer
In April 1998, Acorn supported and participated in ARM Holdings' initial
public offering. During 1998, the Group sold just over a fifth of its
interest in ARM Holdings, mostly to repay borrowings and to finance its own
core operating businesses. Over the six months prior to the date of this
announcement, Acorn's share price has traded at an average discount of
15.8% to the post-tax market value per share of its investment in ARM
Holdings.
Recognising that many Acorn Shareholders have invested in Acorn
primarily because of its interest in ARM Holdings, the major focus for the
Acorn Directors has been to maximise this value for Acorn Shareholders
either as a direct shareholding in ARM Holdings, or as cash. The Acorn
Directors believe that they have examined all the options for achieving this
objective.
In the opinion of the Independent Board of Acorn the Offer by MSDW
Investment Holdings represents the best available solution for the Acorn
Shareholders and offers greater value than that which would be achieved
in either a demerger or distribution in specie of The ARM Holdings
Ordinary Shares to the Acorn Shareholders or by any other practical
alternative.
MSDW Investment Holdings will take a proprietary position in The ARM
Holdings Ordinary Shares with a view to generating an after-tax return
on the investment.
5. Information on Acorn
Acorn's principal asset is its holding of 46,247,844 ARM Holdings
Ordinary Shares.
In the year ended 31 December 1998, Acorn's operating businesses
collectively generated revenues of #11.5 million and operating losses of
#(10.0) million, compared with revenues of #25.2 million and operating
losses of #(3.7) million for the year ended 31 December 1997.
Following a restructuring in September 1998, Acorn's operating
businesses now comprise two principal activities:
(i) A Set-top Box Business, targeting primarily the emerging interactive
digital TV market delivered to the home via xDSL or cable; and
(ii) A Media DSP Business, a silicon and software development activity,
targeting the design and development of a high performance media
digital signal processor (DSP).
These activities have remained lossmaking, albeit at a reduced rate, in the
first quarter of 1999.
As part of the strategy to maximise value for the Acorn Shareholders,
the Acorn Directors determined to seek separate purchasers for these
operating businesses. The Acorn Directors therefore entered into
negotiations with Pace Micro Technology plc in respect of the Set-top
Box Business and agreed that Mr Boland, Chief Executive, and certain
senior management of Acorn should be permitted to explore the possibility
of obtaining external financing in respect of the Media DSP Business.
In the course of discussions with MSDW Investment Holdings, these
negotiations were accelerated to minimise any liabilities attaching to these
businesses which would otherwise have been reflected in the terms of the
Offer. As a result of these negotiations, the Acorn Directors have agreed
to sell the Set-top Box Business to Pace Micro Technology plc for net
asset value of approximately #0.2 million and to grant an option to a
company owned by Mr Boland and certain senior management of Acorn
to purchase (subject to obtaining financing) the Media DSP Business for
net asset value of approximately #1.0 million. Both transactions are
conditional on the Offer being declared unconditional in all respects and the
outcome of either transaction will not affect the terms of the Offer.
In the opinion of the Independent Board of Acorn and Close Brothers,
Acorn's financial advisers, in the context of the Offer the terms of the
option granted to the management of Acorn are fair and reasonable insofar
as Acorn Shareholders are concerned.
6. Information on ARM Holdings
ARM Holdings designs high performance, low-cost, power-efficient
RISC microprocessors. The company licenses and sells its technology
and products to leading international electronics companies, which in turn
manufacture, market and sell microprocessors, application-specific
integrated circuits and application-specific standard products based
on ARM Holdings' architecture to systems companies for incorporation
into a wide range of end products.
In the year ended 31 December 1998, ARM Holdings had consolidated
turnover of #42.3 million. Consolidated profit attributable to ordinary
shareholders for the year ended 31 December 1998 was #6.6 million.
Consolidated shareholders' funds excluding minority interests as at
31 December 1998 were #49.3 million. As at 26 April 1999, the last
Business Day prior to the date of this announcement, the market
capitalisation of ARM Holdings was approximately #1,318 million.
7. Information on MSDW Investment Holdings
The Morgan Stanley Dean Witter Group is a global financial services
firm and a market leader in securities, investment management, credit
services, and electronic brokerage. MSDW Investment Holdings is a
newly-incorporated subsidiary in the Morgan Stanley Dean Witter Group.
Morgan Stanley International is a company within the Morgan Stanley Dean
Witter Group holding substantially all the non-US subsidiaries of the Morgan
Stanley Dean Witter Group (including MSDW Investment Holdings). In the year
ended 30 November 1998, the international businesses of the Morgan Stanley
Dean Witter Group had total revenues before eliminations of $8,717 million
(#5,391 million) and total net revenues, after deducting interest expense and
provisions and before eliminations of $3,809 million (#2,356 million). Total
income before taxes for the year ended 30 November 1998 was $1,375 million
(#850 million). Total identifiable assets before eliminations as at 30 November
1998 were $165,635 million (#102,440 million).
8. Further details of the Offer
Acorn Ordinary Shares will be acquired fully paid and free from all liens,
equities, charges, encumbrances, rights of pre-emption and other third
party interests and together with all rights now or hereafter attaching
thereto, including the right to receive and retain in full all dividends and
other distributions (if any) declared, made or paid on or after the
date hereof.
The ARM Holdings Ordinary Shares which are intended to be used to
satisfy the consideration under the Offer are currently owned by
Applied RISC Technologies Limited, a wholly-owned subsidiary of
Acorn. ARM Holdings Ordinary Shares will be delivered to Acorn
Shareholders credited as fully paid and free from all liens, equities,
charges, encumbrances, rights of pre-emption and other third party
interests, and together with all rights attaching thereto at the time such
shares are delivered including the right to receive and retain all
dividends or other distributions payable to shareholders.
The Offer will be subject to the conditions set out in Appendix I to this
announcement and in the formal Offer document when issued.
9. Management and employees
MSDW Investment Holdings has given assurances to the Acorn
Directors that the existing employment rights (including pension rights)
of the employees of Acorn will be fully safeguarded.
10. Share option schemes
The Offer will extend to any Acorn Ordinary Shares to be issued or
unconditionally allotted pursuant to the exercise of options under the
Acorn Share Option Schemes. Appropriate proposals will be made
to any remaining optionholders under the Acorn Share Option
Schemes in due course.
Under the terms of the Element 14 Limited Share Option Scheme,
on the Offer becoming or being declared unconditional in all respects,
the shares in Element 14 Limited issued under such options when
exercised will automatically convert into Acorn Ordinary Shares
according to a predetermined formula as set out in the rules of the
Element 14 Limited Share Option Scheme. The Offer will extend to
such Acorn Ordinary Shares.
11. General
This announcement does not constitute an offer or an invitation to
purchase any securities. The Offer will be subject to the applicable
requirements of the City Code.
The formal Offer Document will be posted to Acorn Shareholders
as soon as practicable.
Press enquiries:
Acorn Group plc Gordon Owen CBE 0171 206 5410
Stan Boland 01223 725 003
Close Brothers Stephen Aulsebrook 0171 426 4000
Simon Willis
Morgan Stanley Simon Robey 0171 425 5000
& Co. Limited
The Offer is not being made directly or indirectly in or into the United
States, Canada, Australia or Japan, or to any North American Person
or resident of Australia or Japan or by use of the mails of, or by any
means or instrumentality of interstate or foreign commerce of, or any
facilities of a national securities exchange of, any of the aforesaid
jurisdictions. This includes, but is not limited to, the post, facsimile
transmission, telex, or any other electronic forms of transmission and
telephone. Accordingly, copies of this announcement, the formal Offer
document, the Form of Acceptance and any related documents are not
being set and must not be mailed or otherwise distributed or sent in or
into the United States, Canada, Australia or Japan including to Acorn
Shareholders, or participants in the Acorn Share Option Schemes or the
Element 14 Limited Share Option Scheme, with registered addresses in
any of the aforesaid jurisdictions or to persons whom MSDW
Investment Holdings knows, or has reason to believe, to be custodians,
trustees or nominees holding Acorn Ordinary Shares for persons with
addresses in any of the aforesaid jurisdictions. Persons receiving
this announcement and/or such documents (including, without
limitation, custodians, nominees and trustees) must not distribute or send
them in, into or from the United States, Canada, Australia or Japan or
use such mails or any such means, instrumentality or facility for any
purpose directly or indirectly in connection with the Offer, and so
doing may invalidate any purported acceptance of the Offer.
ARM Holdings Ordinary Shares being offered under the Offer have not
been and will not be registered under the United States Securities Act
1933, as amended, or under the laws of any state of the United States
(and the relevant clearances have not been and will not be obtained from
the relevant authorities in Canada, Australia and Japan) and may not be
offered, sold, re-sold or delivered directly or indirectly, in or into the
United States, Canada, Australia or Japan or to a U.S. person (as this
term is defined in Regulation S under the United States Securities Act
1933, as amended), except pursuant to exemptions from the applicable
requirements of such jurisdictions.
The availability of the Offer to persons not resident in the United Kingdom
may be affected by the laws of the relevant jurisdictions. Acorn
Shareholders who are not resident in the United Kingdom should inform
themselves about, and observe, any applicable requirements.
Morgan Stanley & Co. Limited, which is regulated by The Securities and
Futures Authority Limited, is acting for MSDW Investment Holdings and
for no one else in connection with the Offer and will not be responsible to
anyone other than MSDW Investment Holdings for providing the
protections afforded to customers of Morgan Stanley & Co. Limited nor
for providing advice in relation to the Offer.
Close Brothers, which is regulated by The Securities and Futures
Authority Limited, is acting for Acorn and for no one else in connection
with the Offer and will not be responsible to anyone other than Acorn for
providing the protections afforded to customers of Close Brothers nor
for providing advice in relation to the Offer.
MORE TO FOLLOW
OFFABRBKKKKSURR
Advance Capital (LSE:ACN)
Historical Stock Chart
From Jun 2024 to Jul 2024
Advance Capital (LSE:ACN)
Historical Stock Chart
From Jul 2023 to Jul 2024
