RNS Number:9738I
Focus 100 Limited
20 March 2003
Focus100 Limited
Offer for Armitage Brothers plc
Part 1
Not for release, publication or distribution in or into the USA, Canada, South
Africa, Australia or Japan
Recommended Cash Offer
by
Williams de Broe Plc
on behalf of
Focus 100 Limited
for
Armitage Brothers plc
The board of Focus100 and the board of Armitage announce that they have reached
agreement on the terms of a recommended cash offer of 200p per Armitage Share to
be made by Williams de Broe on behalf of Focus100, for the entire issued share
capital of Armitage.
Focus100 was established in 2001 with the aim of becoming a private investment
company owned and supported by a team of operational, corporate and financial
managers. Its objective is to invest in a portfolio of businesses, principally
in the manufacturing and distribution sectors, through the acquisition of, or
strategic investment in, smaller listed companies. The directors and
shareholders of Focus100 are Brian Round, Peter Hagan and Neville Jones.
Summary of the Offer
* The Offer will be 200p in cash for each Armitage Share.
* The Offer values the entire issued ordinary share capital of Armitage
at #8.1 million.
* The Offer, at 200p per Armitage Share, is conditional on the
cancellation of the payment of the interim dividend of 3.4p in respect of
the year ending 1 June 2003.
* The Offer represents a premium of approximately 33.3 per cent. to the
closing middle market price of 150p per Armitage Share on the Daily Official
List on 29 November 2002 (being the last business day before the Board
announced it was in discussions regarding a possible offer) and a premium of
approximately 31.6 per cent. to the average closing middle market price of
152p per Armitage Share during the six months prior to 29 November 2002.
Based on the closing middle market price of an Armitage Share of 180p on
19 March 2003 (the last business day prior to the publication of this
announcement), the Offer represents a premium of approximately 11.1 per
cent.
* Focus100 has received irrevocable undertakings and a non-binding letter of
intent to accept the Offer in respect of 2,406,270 Armitage Shares,
representing approximately 59.4 per cent. of the existing issued share
capital of Armitage.
* The Armitage Directors, who have been so advised by KPMG Corporate
Finance, consider that the terms of the Offer are fair and reasonable so far
as Armitage Shareholders are concerned and intend unanimously to recommend
the Offer. In providing advice to the Armitage Directors, KPMG Corporate
Finance has taken into account the commercial assessments of the Armitage
Directors.
Enquiries:
Focus100
Brian Round Tel: 01746 763121
Williams de Broe (Financial Adviser to Focus100)
Ian Stanway Tel: 0121 609 0050
Nigel Spedding Tel: 0121 609 0050
Armitage
Russell Taylor Tel: 0115 938 1281
Alan Matthews Tel: 0115 938 1270
KPMG Corporate Finance (Financial Adviser to Armitage)
Stephen Halbert Tel: 0121 232 3000
Maura Dunne Tel: 0121 232 3000
Citigate Dewe Rogerson (Public Relations Adviser to Focus100)
Fiona Tooley Tel: 0121 455 8370
Williams de Broe, a company authorised and regulated by the Financial Services
Authority Limited and a member of the London Stock Exchange plc, is acting
exclusively for Focus100 and no-one else in connection with the Offer and will
not be responsible to anyone other than Focus100 for providing the protection
afforded to customers of Williams de Broe, or for giving advice in relation to
the Offer, the contents of this announcement, the contents of the Offer Document
or any transaction or arrangement referred to in this announcement or in the
Offer Document.
KPMG Corporate Finance, a division of KPMG LLP which is authorised by the
Financial Services Authority Limited for investment business activities, is
acting for Armitage as financial adviser in relation to the Offer and is not
acting for any other person in relation to the Offer. KPMG Corporate Finance
will not be responsible to anyone other than Armitage for providing the
protections afforded to its clients or for providing advice in relation to the
Offer, the contents of this announcement, the contents of the Offer Document or
any transaction or arrangement referred to in this announcement or in the Offer
Document.
The availability of the Offer to Armitage Shareholders who are not resident in
the United Kingdom may be affected by the laws of the relevant jurisdictions.
Armitage Shareholders who are not resident in the United Kingdom should inform
themselves about and observe any applicable requirements.
The Offer will not be made, directly or indirectly, in or into, the USA, Canada,
South Africa, Australia or Japan. Accordingly, copies of this announcement and
any other documents related to the Offer are not being, and must not be, mailed,
forwarded, transmitted or otherwise distributed or sent in or into the USA,
Canada, South Africa, Australia or Japan and persons receiving this document
(including custodians, nominees and trustees) must not distribute or send any of
them in, into or from the USA, Canada, South Africa, Australia or Japan.
This summary should be read in conjunction with the full text of the attached
announcement. Appendix III to the attached announcement contains definitions of
certain expressions used in this summary announcement.
Part 2
Not for release, publication or distribution in or into the USA, Canada, South
Africa, Australia or Japan.
Recommended Cash Offer
by
Williams de Broe Plc
on behalf of
Focus 100 Limited
for
Armitage Brothers plc
1. Introduction
The board of Focus100 and the board of Armitage announce that they have agreed
the terms of a recommended cash offer of 200p per Armitage Share to be made by
Williams de Broe on behalf of Focus100 for the entire issued share capital of
Armitage.
Focus100 was established in 2001 with the aim of becoming a private investment
company owned and supported by a team of operational, corporate and financial
managers. Its objective is to invest in a portfolio of businesses, principally
in the manufacturing and distribution sectors, through the acquisition of, or
strategic investment in, smaller listed companies. The directors and
shareholders of Focus100 are Brian Round, Peter Hagan and Neville Jones.
2. The Offer
The Offer, which will be made on the terms and subject to the conditions
summarised below and in Appendix I to this announcement and to the further terms
which will be set out in the Offer Document and the accompanying Form of
Acceptance, will be made on the following basis:
for each Armitage Share 200 pence in cash
The Offer values the whole of the issued share capital of Armitage at #8.1
million and represents a premium of approximately 33 per cent. to the closing
middle market price of 150p per Armitage Share on 29 November 2002, being the
last business day prior to the announcement by Armitage that it was in
discussions regarding a possible offer for the entire issued share capital of
the Company.
At the close of business on 19 March 2003 (the latest practicable date prior to
this announcement) the Offer represents a premium of approximately 11.1 per
cent. over the closing middle market price of 180p per Armitage Share as derived
from the Daily Official List.
The Armitage Shares to be acquired pursuant to the Offer will be acquired by
Focus100 fully paid and free from all liens, equities, charges, encumbrances and
other interests and together with all rights now or hereafter attaching thereto,
including the right to receive and retain all dividends and other distributions
declared, made or which become payable on or after the date of this
announcement.
The Board announced today that, in view of the Offer, the payment of the interim
dividend of 3.4p per Armitage Share for the year ending 1 June 2003 has been
cancelled. The Offer, at 200p per Armitage Share, is conditional on no interim
dividend being paid.
The Offer will extend to any Armitage Shares which are unconditionally allotted
or issued prior to the date on which the Offer closes (or such earlier date as
Focus100 may, subject to the rules of the City Code, decide) as a result of the
exercise of options granted under the Armitage Share Option Schemes or
otherwise. To the extent that such options have not been exercised and in the
event that the Offer becomes or is declared unconditional in all respects,
appropriate proposals will be put to holders of unexercised options in due
course.
3. Focus100's reasons for acquiring Armitage
The board of Focus100 believes that the acquisition of Armitage fits its
investment strategy. With the assistance of the existing management team of
Armitage, it is the intention of the directors of Focus100 to continue the
development of the business, to build upon the solid financial performance that
the Company has already achieved, as well as developing the existing
relationships with customers and suppliers.
The directors of Focus100 also believe that returning Armitage to private
ownership will enhance its flexibility, enabling its commercial development to
be accelerated.
4. Background to and reasons for accepting the Offer
Following a disappointing year in 2000/01, the Board commenced a review of
strategic options in mid 2001 with a view to delivering improved shareholder
value. A disposal of the entire Armitage Group or separate disposals of the pet
food division and the pet accessories division were considered as likely options
for delivering greater shareholder value.
Although trading performance improved in 2001/02, the markets in which Armitage
operates continue to remain challenging. In May 2002, the Board announced that
it did not expect group profits to be in line with market expectations. On 6
September 2002, the Armitage Group announced pre tax profits from continuing
operations before exceptional items of #740,000 for the year ended 2 June 2002
compared with #290,000 the previous year.
The Armitage Directors have had discussions with a number of parties potentially
interested in acquiring the entire Armitage Group and with parties interested in
separately acquiring one or other of the divisions. The discussions regarding
the separate disposal of the divisions did not result in acceptable proposals
and the Offer from Focus100 for the entire Armitage Group was the highest offer
received.
Focus100 is a private investment company established in early 2001 with the
strategy of building a portfolio of industrial businesses where manufacturing
and distribution is core. Focus100 has confirmed to the Armitage Directors its
intention to continue the development of the Armitage business. In considering
Focus100's Offer and their recommendation, the Armitage Directors have taken
into account the following factors:
* the fact that the Offer represents a premium of 33.3 per cent. to the
closing middle market price on the last business day prior to the
Board announcing that it was in discussions regarding a possible
offer;
* the unsuitability of a stock market listing for a company of
Armitage's size and, in particular, the constraints in raising capital
in public markets to further develop the Armitage business;
* the relatively illiquid nature of trading in Armitage Shares;
* their belief that it was the desire of certain members of the Armitage
family to realise their investment in Armitage;
* the stated long term strategy of Focus100 to build and invest in the
Armitage business;
* the fact that discussions with potential purchasers for the separate
pet food and pet accessories divisions did not lead to acceptable
proposals; and
* in the absence of the Offer, the limited prospects for Armitage
Shareholders of realising their investment in Armitage at a cash value
equivalent to the Offer price of 200p per Armitage Share within a
reasonable timescale.
5. Undertakings to accept the Offer
Focus100 has received irrevocable undertakings to accept the Offer from the
Armitage Directors and their spouses in respect of their entire beneficial
holdings, amounting to 651,480 Armitage Shares, representing approximately 16.1
per cent. of the entire issued share capital of Armitage. Such undertakings
will cease to be binding only if the Offer lapses or is withdrawn.
Further irrevocable undertakings have been received from other Armitage
Shareholders holding an aggregate of 1,450,500 Armitage Shares representing 35.8
per cent. of the issued share capital of Armitage. Undertakings in respect of
1,050,500 Armitage Shares (representing 25.9 per cent. of the issued share
capital of Armitage) cease to be binding if, before the Offer becomes or is
declared unconditional in all respects, another person makes an offer or
announces a firm intention to make an offer to acquire the entire issued share
capital of the Company that exceeds 110 per cent of the value of the Offer.
Undertakings in respect of 400,000 Armitage Shares (representing 9.9 per cent.
of the issued share capital of Armitage) cease to be binding if, before the
Offer becomes or is declared unconditional in all respects, another person makes
an offer or announces a firm intention to make an offer to acquire the entire
issued share capital of the Company that exceeds the value of the Offer.
In addition, a non-binding letter of intent to accept the Offer in respect of an
aggregate of 304,290 Armitage Shares, representing approximately 7.5 per cent.
of the issued share capital of Armitage, has been received from the Trust.
In total, Focus100 holds irrevocable undertakings or a non-binding letter of
intent to accept the Offer in respect of approximately 59.4 per cent. of the
issued share capital of Armitage.
6. Arrangements with the executive directors of Armitage
If the Offer becomes or is declared unconditional in all respects, payments
aggregating #90,000 will become due to Armitage's executive directors under
arrangements that will be summarised in paragraph 6 of Appendix IV to the Offer
Document.
7. Information relating to Focus100
Focus100 was established in 2001 by Brian Round, Peter Hagan and Neville Jones
with the objective of becoming a private investment company, owned and supported
by a team of operational, corporate and financial managers. Since its
establishment, the board has been researching and discussing potential
investments that meet its investment criteria. To date, Focus100 has been
financed by its directors' investment in the share capital of #51,000 and loans
by the directors of #111,500. Should the Offer become wholly unconditional,
Armitage will be the first investment made by Focus100.
Focus100's objective is to invest in a portfolio of businesses, principally in
the manufacturing and distribution sectors, through the acquisition of, or
strategic investment in, smaller listed companies. The directors of Focus100
believe that, during a period when the liquidity of many smaller public
companies has become more difficult, their strategy offers existing shareholders
in such companies an opportunity to realise their investments. It is Focus100's
intention to work with the management teams of the businesses that it acquires,
or in which it invests.
The directors of Focus100 are Brian Round (Chief Executive), Peter Hagan and
Neville Jones.
Prior to joining Focus100, Brian Round, aged 53, FCA, had been a Corporate
Finance Partner with PricewaterhouseCoopers and its predecessor firms for
fourteen years. From 1986, Brian specialised in corporate finance, leading and
negotiating corporate transactions on behalf of clients and assisting businesses
undertake strategic change programmes in order to enhance shareholder value. He
has specific experience of the manufacturing and distribution sectors and of
advising listed companies and companies within the middle market sector,
undertaking client assignments in the UK, North America and continental Europe.
Peter Hagan, aged 56, B.Tech (Hons), M.Sc, FBIM, FIEE, was a main board director
of Corning Limited, a company engaged in industrial glass production, from 1983
until 1993. In 1983, he also became managing director of the specialist process
systems division. He and Neville Jones, working with 3i plc in Frankfurt,
Germany, led the management buyout of the worldwide interests of the specialist
process systems business in conjunction with its German managers. The business
manufactured and supplied specialist process systems to the chemical,
biotechnology and allied industries.
Neville Jones, aged 40, ACMA, worked with Peter Hagan from 1986, becoming
finance director (with responsibility for operations) of the UK arm of the
specialist process systems business in 1993.
In the seven year period following the buyout, the management team expanded the
business organically through expansion into new sectors, such as biotechnology,
and new geographical markets in the Far East whilst merging with its major
competitor. Turnover approximately trebled between 1993 and 2000 and the
business was sold in that year to a European trade buyer, generating a
significant return for shareholders. Peter and Neville resigned from the
business in 2001.
The board of Focus100 is able to call on a network of people with wide
operational, strategic and sales experience to support them, as required, in the
commercial development of its investments.
Further details on Focus100 will be set out in Appendix II of the Offer
Document.
8. Focus100 financing arrangements
Full acceptance of the Offer by existing Armitage Shareholders would require the
payment by Focus100 of #8.1 million in cash. Williams de Broe has confirmed
that the necessary financial resources are available to Focus100 to enable it to
implement the Offer in full.
The cash consideration payable by Focus100 under the Offer, together with the
expenses of the Offer, will be financed from (i) cash resources of #1.25 million
to be provided to Focus100 by certain of its shareholders in the form of
subordinated loans and (ii) bank facilities to be provided to Focus100 by HSBC.
The shareholders' subordinated loans to Focus100 have been provided by Peter
Hagan and Neville Jones and the funds are held in trust within a designated
client account of its legal advisers, Martineau Johnson, to Williams de Broe's
instruction. Drawdown of the facilities made available to Focus100 by HSBC will
be made as and when required following the Offer becoming or being declared
wholly unconditional. The funds required to settle acceptances received will
be sent to Northern Registrars Limited.
The facilities to be provided by HSBC will initially comprise a term loan of up
to #4.5 million and bridging facilities up to #3.3 million. It is the intention
of Focus100, once it has received acceptances in respect of over 90 per cent. of
the Armitage Shares and declared the Offer wholly unconditional, to commence
procedures to compulsorily acquire the remaining Armitage Shares. It also
intends to de-list the Armitage Shares from the Official List, to cancel trading
of Armitage Shares on the London Stock Exchange, to re-register the Company as a
private company and to implement the procedures to enable Armitage's assets to
be used as security for the bank facilities. HSBC will provide overdraft
facilities, debtor finance and asset finance, which, together with other cash
resources, will be used to repay the bridging facility.
Further details of the facilities to be provided by HSBC will be included in
paragraph 4 of Part B of Appendix II to the Offer Document.
Focus100 anticipates that, following completion of the Offer, payment of
interest on the facilities to be provided by HSBC will be financed from the
funds generated by Armitage and which will be paid to Focus100 by way of
dividends or other lawful distributions or payments.
9. Information relating to Armitage
Armitage's principal activity is the manufacture and distribution of pet foods,
accessories and aquatic products. Its pet food products comprise the Wafcol and
Wilsons dog food brands designed to meet various canine dietary requirements,
together with small animal foods that are sold through the accessories division.
Additionally, the accessories division supplies a wide range of pet care
products for dogs, cats and small animals, including, choc drops and treats, dog
chews, leads, collars, toys, bedding, small animal housing and non
pharmaceutical veterinary products. Aquatic products include fish foods,
ornaments and pond and tank accessories. The portfolio of brands within the
accessories and aquatic divisions includes Good Boy, Rotastak, Good Girl,
Gussie, Algarde, Phoenix and Kagesan.
Armitage is a holder of the Royal Warrant.
In its last financial year ended 2 June 2002, Armitage reported turnover of
#18.95 million, pre tax profits of #618,000 and a cash inflow of #916,000. Its
interim statement for the 28 week period ended 15 December 2002, which was
released on 28 February 2003, reported turnover of #10.74 million and pre tax
profits of #780,000.
10. Armitage directors and employees
The Board of Focus100 has given assurances to the Armitage Directors that the
existing employment rights, including pensions rights, of all employees of
Armitage will be fully safeguarded. It is intended that the non-executive
directors of Armitage, David Crawley and Bob Armitage, will resign upon the
Offer becoming or being declared unconditional in all respects for which they
will receive payments in lieu of notice. The terms of the severance agreements
entered into between Armitage and each of the non-executive directors will be
summarised in paragraph 6 of Appendix IV to the Offer Document.
It is also intended that the executive directors of Armitage will, following the
Offer becoming or being declared unconditional, continue in their existing
executive positions. Additionally, Brian Round will join the board of Armitage
as executive Chairman and Peter Hagan and Neville Jones will become
non-executive directors.
11. Armitage Share Option Schemes
The Offer will extend to any Armitage Shares unconditionally allotted or issued
prior to the date on which the Offer closes (or such earlier date(s) as Focus100
may, subject to the City Code, determine) as a result of the exercise of options
granted under the Armitage Share Option Schemes. To the extent that such
options are not, or cannot be, exercised and provided that the Offer becomes or
is declared unconditional in all respects, appropriate proposals will be put to
holders of unexercised options under the Armitage Share Option Schemes in due
course.
12 De-listing
As soon as it is appropriate and possible to do so and subject to the Offer
becoming or being declared unconditional in all respects, Focus100 intends to
apply for cancellation of the listing of Armitage Shares on the Official List of
the UK Listing Authority and cancellation of trading on the London Stock
Exchange's market for listed securities. It is anticipated that cancellation
will, subject to the Listing Rules, take effect no earlier than 20 business days
following the Offer becoming or being declared unconditional in all respects.
It is also the intention to re-register Armitage as a private company under the
relevant provisions of the Act.
In addition, on receipt of acceptances of the Offer in respect of 90 per cent.
or more of the Armitage Shares to which the Offer relates, Focus100 intends to
apply the provisions of sections 428 to 430F of the Act to acquire compulsorily
any Armitage Shares that are outstanding.
13. Inducement fee
As an inducement to Focus100 to make the Offer, Armitage entered into an
agreement with Focus100 on 19 November 2002 pursuant to which Armitage agreed to
pay an amount up to a maximum of #81,000 (inclusive of VAT) to Focus100 (which
equates to 1 per cent of the Offer value) in certain prescribed circumstances.
14. Conclusion
The Armitage Directors, who have been so advised by KPMG Corporate Finance,
consider that the terms of the Offer are fair and reasonable so far as Armitage
Shareholders are concerned. In providing advice to the Armitage Directors, KPMG
Corporate Finance has taken into account the commercial assessments of the
Armitage Directors.
15. Recommendation
The Armitage Directors unanimously recommend Armitage Shareholders to accept the
Offer as they and their spouses have irrevocably undertaken to do in respect of
their own beneficial holdings amounting to 651,480 Armitage Shares in aggregate,
representing approximately 16.1 per cent. of the issued share capital of
Armitage.
16. General
With the exception of the 2,406,270 Armitage Shares in respect of which Focus100
has received irrevocable undertakings or a non-binding letter of intent to
accept or procure acceptance of the Offer, neither Focus100 nor any directors of
Focus100, or their connected persons or persons deemed to be acting in concert
with Focus100, owns or controls or (in the case of directors of Focus100) is
interested in (beneficially or otherwise) any Armitage Shares.
The Offer will be subject to the applicable requirements of the City Code. The
formal Offer Document, setting out details of the Offer, together with the Form
of Acceptance, will be despatched to Armitage Shareholders today. This
announcement does not constitute an offer or an invitation to purchase any
securities.
The availability of the Offer to persons not resident in the United Kingdom may
be affected by the laws of the relevant jurisdictions. Persons who are not
resident in the United Kingdom, or who are subject to the laws of any
jurisdiction other than the United Kingdom, should inform themselves about and
observe any applicable requirements. Further details in relation to overseas
shareholders will be contained in the Offer Document.
The Offer will not be made, directly or indirectly, in or into, the USA, Canada,
South Africa, Australia or Japan. Accordingly, copies of this announcement and
any other documents related to the Offer are not being, and must not be, mailed,
forwarded, transmitted or otherwise distributed or sent in or into the USA,
Canada, South Africa, Australia or Japan and persons receiving this
announcement, the Offer Document or the Form of Acceptance (including
custodians, nominees and trustees) must not distribute or send any of them in,
into or from the USA, Canada, South Africa, Australia or Japan.
The directors of Focus100 accept responsibility for the information contained in
this announcement, other than that relating to the Armitage Group, the Armitage
Directors and the recommendation of the Offer by the Armitage Directors.
The Armitage Directors accept responsibility for the information contained in
this announcement relating to the Armitage Group, themselves and their
recommendation of the Offer.
To the best of the knowledge and belief of the directors of Focus100 and the
Armitage Directors (who have taken all reasonable care to ensure that such is
the case), the information contained in this announcement for which they are
responsible is in accordance with the facts and does not omit anything likely to
affect the import of such information.
Williams de Broe, a company authorised and regulated by the Financial Services
Authority Limited and a member of the London Stock Exchange plc, is acting
exclusively for Focus100 and no-one else in connection with the Offer and the
preparation and distribution of the Offer Document and will not be responsible
to anyone other than Focus100 for providing the protection afforded to customers
of Williams de Broe, or for giving advice in relation to the Offer, the contents
of this announcement, the contents of the Offer Document or any transaction or
arrangement referred to in this announcement or in the Offer Document.
KPMG Corporate Finance, a division of KPMG LLP which is authorised by the
Financial Services Authority Limited for investment business activities, is
acting for Armitage as financial adviser in relation to the Offer and is not
acting for any other person in relation to the Offer. KPMG Corporate Finance
will not be responsible to anyone other than Armitage for providing the
protections afforded to its clients or for providing advice in relation to the
Offer, the contents of this announcement, the contents of the Offer Document or
any transaction or arrangement referred to in this announcement or in the Offer
Document.
Williams de Broe has approved the contents of this announcement solely for the
purposes of Section 21 of the Financial Services and Markets Act 2000.
Appendix III to this announcement contains definitions of certain expressions
used in this announcement.
Enquiries:
Focus100
Brian Round Tel: 01746 763121
Williams de Broe (Financial Adviser to Focus100)
Ian Stanway Tel: 0121 609 0050
Nigel Spedding Tel: 0121 609 0050
Armitage
Russell Taylor Tel: 0115 938 1281
Alan Matthews Tel: 0115 938 1270
KPMG Corporate Finance (Financial Adviser to Armitage)
Stephen Halbert Tel: 0121 232 3000
Maura Dunne Tel: 0121 232 3000
Citigate Dewe Rogerson (Public Relations Adviser to Focus100)
Fiona Tooley Tel: 0121 455 8370
APPENDIX I
CONDITIONS AND CERTAIN FURTHER TERMS OF THE OFFER
PART A: CONDITIONS OF THE OFFER
Principal terms
The Offer is subject to the following conditions:
1. valid acceptances being received (and not, where permitted, withdrawn)
by not later than 3.00pm on 10 April 2003 (or such later time(s) and/or dates(s)
as Focus100 may, subject to the rules of the City Code, decide) in respect of
not less than 90 per cent. (or such lesser percentage as Focus100 may decide) in
nominal value of the Armitage Shares to which the Offer relates (within the
meaning of sections 428 to 430F of the Act), provided that this condition will
not be satisfied until Focus100 shall have acquired, or agreed to acquire,
whether pursuant to the Offer or otherwise, Armitage Shares carrying in
aggregate more than 50 per cent. of the voting rights normally exercisable at a
general meeting of Armitage and attributable to the Armitage equity share
capital (including to the extent, if any, required by the Panel, votes
attributable to or attaching to any Armitage Shares unconditionally allotted or
issued before the Offer becomes or is declared unconditional as to acceptances,
whether pursuant to the exercise of any outstanding conversion or subscription
rights or otherwise, and for this purpose Armitage Shares which have been
unconditionally allotted shall be deemed to carry the voting rights which they
will carry on issue);
2. the Office of Fair Trading not having indicated prior to the date when
the Offer would otherwise have become unconditional in all respects, that it is
the intention of the Secretary of State for Trade and Industry to refer the
proposed acquisition of Armitage Shares by Focus100 or any matters arising
therefrom to the Competition Commission or any successor body;
3. save as disclosed in writing to Focus100 or their advisers prior to 20
March 2003 and/or save as disclosed in the annual report and accounts of
Armitage for the financial year ended 2 June 2002, the interim statement of
Armitage for the 28 weeks ended 15 December 2002 or as publicly announced at or
before 4.30 pm on 19 March 2003 through a Regulatory Information Service (such
information hereafter in these conditions being referred to as being "disclosed
"), there being no provision of any material licence, arrangement, agreement or
other instrument to which any member of the Armitage Group is a party or to
which any joint venture, partnership, firm or other body corporate in which any
member of the Armitage Group has a substantial interest (together "the Wider
Armitage Group") is a party or by or to which any member of the Wider Armitage
Group, or any of its assets, may be bound, entitled or subject, which in
consequence of the Offer or the acquisition of the issued share capital of
Armitage or any part thereof by Focus100 or because of a change in the control
or management of Armitage or any member of the Wider Armitage Group or otherwise
will or is likely to result (to an extent which is material in the context of
the Wider Armitage Group taken as a whole) in:
(a) any amount of monies borrowed by or any other indebtedness, actual or
contingent, of any member of the Wider Armitage Group being or becoming
repayable, or being capable of being declared repayable, immediately or prior to
its stated maturity or the ability of any such member to borrow monies or incur
any indebtedness being withdrawn or inhibited; or
(b) any such licence, arrangement, agreement or other instrument being
terminated, suspended, becoming capable of termination or suspension, adversely
modified or otherwise adversely affected; or
(c) the business, (or any part thereof), of any member of the Wider Armitage
Group or the interests, rights, liabilities or obligations of any such member in
or with any other person, firm, company or body (or any arrangements relating to
such business or interests) being terminated, suspended, adversely modified or
otherwise adversely affected; or
(d) 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
Armitage Group or any such security, whenever arising or having arisen, becoming
enforceable; or
(e) any member of the Wider Armitage Group ceasing to be able to carry on
business under any name under which it presently does so; or
(f) any assets or interests of any member of the Wider Armitage Group being
disposed of or charged or any right arising under which any such asset or
interest could be required to be disposed of or charged otherwise than in
respect of the disposal of stock in the ordinary course of business; or
(g) the financial or trading position or prospects of any member of the Wider
Armitage Group being prejudiced or adversely affected;
4. no government, governmental, government department,
quasi-governmental, supranational, statutory or regulatory body, court, trade
agency, association, institution or professional body or any other similar
person or body in any jurisdiction (each a "Third Party") having decided to
take, indicated an intention to take, instituted, implemented or threatened any
action, suit, proceedings, investigation or enquiry or enacted, made or proposed
any statute, regulation, decision or order or taken any other steps that would
or is reasonably likely to:
(a) make the Offer or the acquisition or proposed acquisition of any Armitage
Shares or control of Armitage by Focus100 void, illegal or unenforceable under
the laws of any jurisdiction or otherwise directly or indirectly restrain,
prohibit, delay or otherwise challenge the Offer or the proposed acquisition of
any Armitage Shares by Focus100, or implementation thereof in any case in a
manner which is material in the context of the Wider Armitage Group taken as a
whole; or
(b) require or prevent the divestiture, by any member of Armitage or any member
of the Wider Armitage 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 all or any part of their respective businesses or to own all or any part
of their respective assets or properties in any manner or to an extent which is
material in the context of the Wider Armitage Group taken as a whole; or
(c) impose any limitation on, or result in a delay in, the ability of Focus100
directly or indirectly to acquire or hold or effectively exercise all or any
right of ownership of any member of the Wider Armitage Group, or on the ability
of any member of the Wider Armitage Group, to hold or effectively exercise
directly or indirectly any right of ownership of shares or the equivalent in any
member of the Wider Armitage Group or to exercise management control over any
such member; or
(d) require Armitage or any member of the Wider Armitage Group to offer to
acquire shares in any member of the Wider Armitage Group owned by any third
party; or
(e) otherwise materially and adversely affect the business, profits or prospects
of the Wider Armitage Group; or
(f) result in the termination, suspension, adverse modification of, or otherwise
adversely affect any licence or right required by any one or more of members of
the Armitage Group or the Wider Armitage Group to carry on its or their
respective businesses in the ordinary course and which is material in the
context of the Wider Armitage Group taken as a whole; or
(g) require or prevent the divestiture by Focus100 of any Armitage Shares;
and all applicable waiting periods during which any such Third Party could
institute, implement or threaten any such action, suit, proceedings,
investigation or enquiry having expired, lapsed or been terminated;
5. all authorisations, orders, grants, consents, recognitions,
confirmations, licences, clearances, permissions and approvals which are
necessary or appropriate in any jurisdiction for or in respect of the Offer or
the proposed acquisition or acquisition of any Armitage Shares by Focus100 and
which are material in the context of the Offer having been obtained in terms and
in a form reasonably satisfactory to Focus100 from all Third Parties including
(without prejudice to the generality of the foregoing) any Third Party with whom
any member of the Armitage Group has entered into contractual arrangements, and
all such authorisations, orders, grants, consents, recognitions, confirmations,
licences, clearances, permissions and approvals remaining in full force and
effect at the time when the Offer becomes otherwise unconditional in all
respects and not being subject to any intimation of an intention to revoke or
not to renew the same where the absence of any such authorisation, order, grant,
consent, recognition, confirmation, licence, clearance, permission or approval
would have a material adverse effect and all statutory or regulatory obligations
which are necessary or appropriate in any jurisdiction having been complied
with;
6. all authorisations, orders, grants, consents, recognitions,
confirmations, licences, clearances, permissions and approvals which are
necessary or appropriate in any jurisdiction for the carrying on of the
businesses of the Wider Armitage Group and which are material in the context of
the Offer having been obtained, in terms and in a form reasonably satisfactory
to Focus100, from all appropriate Third Parties (including without prejudice to
the generality of the foregoing any Third Party with whom any member of the
Armitage Group has entered into contractual arrangements) and all such
authorisations, orders, grants, consents, recognitions, confirmations, licences,
clearances, permissions and approvals remaining in full force and effect in all
respects and not being subject to any intimation of any intention to revoke,
vary or not to renew the same where the absence of any such authorisation,
order, grant, consent, recognition, confirmation, licence, clearance, permission
or approval would have a material adverse effect;
7. all filings having been made and all waiting periods under any
applicable legislation or regulation of any jurisdiction having expired, lapsed
or been terminated, in each case as may be necessary or appropriate in
connection with the Offer or the proposed acquisition of any Armitage Shares by
Focus100;
8. other than as disclosed (as defined in paragraph 3 above), from the
date of announcement of the Offer and at any time prior to the Offer becoming
otherwise unconditional in all respects:
(a) Armitage not having recommended, declared, paid or made, or proposed the
declaration, payment of or making of, any dividend, bonus or other distribution
in respect of the share capital of Armitage and Armitage having cancelled the
interim dividend for the year ending 1 June 2003 declared on 28 February 2003;
(b) no member of the Wider Armitage Group having allotted, issued or agreed to,
authorised or proposed the allotment or issue of, additional shares of any class
or securities convertible into, or rights, warrants or options to subscribe for,
or to acquire, any such shares or convertible securities (save for options
granted, and for any Armitage Shares allotted upon exercise of options granted,
under the Armitage Share Option Schemes) or having purchased, or authorised or
proposed the purchase or redemption of, any of its own shares or securities or
reduced or made any change to all or any part of its share capital;
(c) no member of the Wider Armitage Group having issued, authorised or proposed
the issue of any debentures over all or any part of its assets or undertaking or
(save in the ordinary course of business) incurred, or agreed to incur, or
increase or increased any indebtedness or contingent liability which is material
in the context of the Offer;
(d) no voluntary winding up being proposed or commenced in relation to any
member of the Wider Armitage Group;
(e) save in respect of intra-Armitage Group transactions, no member of the
Armitage Group having effected any reconstruction or amalgamation, merged with
or demerged from any body corporate or acquired or disposed of any assets or
shares or any right, title or interest in any assets (other than the disposal of
stock in the ordinary course of business ) or shares or undertaking or made any
change in its share or loan capital, or authorised, proposed or announced any
intention to effect any merger, de-merger, acquisition, disposal or change as
aforesaid, which in each case, would be material in the context of the Armitage
Group taken as a whole;
(f) no litigation, arbitration, prosecution or other legal proceedings having
been instituted or threatened by or against, or remaining outstanding against,
any member of the Wider Armitage Group or to which any member of the Wider
Armitage Group is a party, which in any such case might materially adversely
affect the business of the Wider Armitage Group taken as a whole;
(g) no member of the Wider Armitage Group having waived or compromised any claim
which is material in the context of the Wider Armitage Group taken as a whole;
(h) no member of the Armitage Group having entered into, or changed or
authorised, proposed or announced its intention to enter into or change the
terms of any contract, transaction or commitment (whether in respect of capital
expenditure or otherwise) which (i) is material to the business of the Wider
Armitage Group and is outside the ordinary course of business or (ii) is
material as aforesaid and of a long term, onerous or unusual nature or
magnitude or which (iii) involves or is reasonably likely to involve an
obligation of such nature or magnitude;
(i) no member of the Wider Armitage Group having entered into or changed or
authorised, proposed or announced its intention to enter into or change the
terms of any contract with any of its directors or senior executives;
(j) no member of the Wider Armitage Group having entered into or announced any
intention to enter into, any agreement or arrangement with respect to any of the
transactions or events referred to in this paragraph 8;
(k) no contingent liability having arisen which would or might reasonably be
expected adversely to affect any member of the Wider Armitage Group in a manner
which is material in the context of the Wider Armitage Group taken as a whole;
(l) no member of the Wider Armitage Group having granted a lease or third party
rights over, mortgaged or charged or created any other security interest (in
each case either for its own benefit or for the benefit of any other member of
the Wider Armitage Group) over, the whole or any part of its business, property,
assets or rights, or its title or interest in any assets (including shares or
trade investments) or property or authorised, proposed or made any announcement
of an intention to do or authorise any of the foregoing;
(m) no member of the Wider Armitage Group having (otherwise than in the ordinary
course of business) incurred or increased any indebtedness or contingent
liability which is material;
(n) no member of the Wider Armitage Group having entered into any material
contract, arrangement, reconstruction or amalgamation or commitment or other
transaction otherwise than in the ordinary course of business;
(o) no member of the Wider Armitage Group having entered into any agreement or
commitment to subscribe, purchase or otherwise acquire any shares or other
interest in any entity or part thereof which is material in the context of the
Wider Armitage Group taken as a whole;
(p) there having been no receiver, administrative receiver, trustee or other
encumbrancer appointed over any of the assets of any member of the Wider
Armitage Group and there having been no petition presented for the
administration, winding-up or dissolution of any member of the Wider Armitage
Group, or any such action threatened;
(q) no member of the Armitage Group having passed any resolution in general
meeting to sanction, approve or implement any of the matters referred to in
sub-paragraphs (b), (c),(d),(e),(g), (h) or (p) of this paragraph 8 or convened
a general meeting to consider any such resolution;
(r) other than payments to be made to the non-executive Directors in respect of
the termination of their office in accordance with the severance agreements to
be referred to in paragraph 6 in Appendix IV to the Offer Document and payments
to be made to the executive Directors under the terms of the sale incentive
agreements to be referred to in that paragraph 6 of Appendix IV of the Offer
Document, no member of the Wider Armitage Group having made, or announced any
proposal to make, any change or addition to any retirement, death or disability
benefit of or in respect of any of its directors, employees, former directors or
former employees which is material in the context of the Wider Armitage Group
taken as a whole;
(s) Armitage not having given notice in writing to the trustee of the Trust of
its intention to determine the Trust;
except (in each case) with the prior written consent of Focus100;
9. Focus100 not having discovered that any financial or business
information concerning the Wider Armitage Group as contained in the information
disclosed (as defined in paragraph 3 above) is misleading or contains a
misrepresentation of fact or omits to state a fact necessary to prevent the
information contained therein from being misleading in either case to an extent
which is material in the context of the Wider Armitage Group taken as a whole;
10. Focus100 not having discovered that, save as disclosed (as defined in
paragraph 3 above) prior to the date when the Offer becomes otherwise
unconditional:
(a) any past or present member of the Wider Armitage Group has not complied with
all applicable laws of any relevant jurisdiction relating to environmental
matters the non-compliance with which would give rise to any liability (whether
actual or contingent) or cost on the part of any member of the Wider Armitage
Group which would be material to the Wider Armitage Group taken as a whole;
(b) there has been an emission, disposal, discharge, deposit, spillage or leak
of waste or hazardous or harmful substances on or about or from any property now
or previously owned, occupied or made use of by any past or present member of
the Wider Armitage Group 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
Armitage Group which would be material to the Wider Armitage Group taken as a
whole;
(c) there is or is likely to be any liability (whether actual or contingent) or
requirement to make good, repair, reinstate or clean up any property now or
previously owned, occupied, made use of or harmed by any past or present member
of the Wider Armitage Group which would be material to the Wider Armitage Group
taken as a whole;
(d) circumstances exist which will or are likely to lead to any relevant
authority instituting, or whereby any member of the Wider Armitage Group is
likely to be required to institute, an environmental audit or take any other
steps which in any case would or would be likely to result in any material
actual or contingent liability (taken in the context of the Wider Armitage Group
as a whole) to improve or install new plant or equipment or make good, repair,
reinstate or clean up any land or other asset now or previously owned, occupied
or made use of by any member of the Wider Armitage Group;
(e) circumstances exist whereby a person or class of persons have or are likely
to have any material claim or claims (taken in the context of the Wider Armitage
Group as a whole) in respect of any product or process of manufacture or
materials used therein now or previously manufactured, sold or carried out by
any past or present member of the Wider Armitage Group;
and for the purposes of conditions 10 (b) to 10(d) (inclusive) above, any member
of the Wider Armitage Group shall be deemed to own or have owned property if it
has or has had (as the case may be) any proprietary interest in it whatsoever.
WAIVER OF CONDITIONS
Focus100 reserves the right to waive all or any of the conditions 2 to 10
inclusive in whole or in part and, if Focus100 is required to make any offer
under the provisions of Rule 9 of the City Code, to make such alterations to any
of the conditions, including, without limitation, the condition contained in
paragraph 1, as are necessary to comply with the provisions of that Rule.
Each of the conditions contained in paragraphs 1 to 10 of this Appendix I shall
be regarded as a separate condition and shall not be limited by reference to any
other condition.
GENERAL
The Offer will lapse unless the conditions set out above are fulfilled or (if
capable of waiver) waived or, where appropriate, have been determined by
Focus100 in its reasonable opinion to be or to remain satisfied or (if capable
of waiver) to have been waived no later than 21 days after the first closing
date of the Offer or the date on which the Offer becomes or is declared
unconditional as to acceptances, whichever is the later, or such later date as
the Panel may agree. In such a case, the Offer will cease to be capable of
further acceptance and Focus100 and accepting Armitage Shareholders will cease
to be bound by prior acceptances.
The Offer will lapse if the Secretary of State for Trade and Industry refers the
acquisition of the Armitage Shares to the Competition Commission or any
successor body before the later of 9 April 2003 and the time and date at which
the Offer becomes or is declared unconditional as to acceptances. In such
circumstances, the Offer will cease to be capable of further acceptance and
Focus100 and accepting Armitage Shareholders shall thereupon cease to be bound
by prior acceptances.
For the purpose of these conditions: (i) "subsidiary undertaking", and "
undertaking" shall have the meanings given to those terms by the Act (but for
this purpose ignoring paragraph 20(1)(b) of the Schedule 4A to the Act); and
(ii) "substantial interest" means a direct or indirect interest in 20 per cent.
or more of the voting equity capital of an undertaking.
PART B: CERTAIN FURTHER TERMS OF THE OFFER
The availability of the Offer to persons not resident in the United Kingdom may
be affected by the laws of the relevant jurisdictions. Persons who are not
resident in the United Kingdom should inform themselves about and observe any
applicable requirements.
The Offer is not being made, directly or indirectly, in or into, the USA,
Canada, South Africa, Australia or Japan. Accordingly, copies of this
announcement and any other documents related to the Offer are not being, and
must not be, mailed, forwarded, transmitted or otherwise distributed or sent in
or into the USA, Canada, South Africa, Australia or Japan and persons receiving
this announcement, the Offer Document or the Form of Acceptance (including
custodians, nominees and trustees) must not distribute or send any of them in,
into or from the USA, Canada, South Africa, Australia or Japan.
APPENDIX II
BASES OF CALCULATION AND SOURCES OF INFORMATION
The value of the Offer is based on 4,050,000 Armitage Shares in issue as at 19
March 2003 (being the latest practicable date prior to this announcement).
The average closing middle market price from 30 May 2002 to 29 November 2002 is
152p per Armitage Share and is derived from Datastream. This information has
been used to calculate the six month premium referred to in this announcement
and in the Offer Document.
APPENDIX III
DEFINITIONS
The following definitions apply throughout this announcement unless the context
otherwise requires:
"Act" the Companies Act 1985 (as amended)
"Armitage" or "the Company" Armitage Brothers plc
"Armitage Directors" the directors of Armitage whose full names will appear in the
Offer Document
"Armitage Group" Armitage and its subsidiary undertakings
"Armitage Shareholders" holders of Armitage Shares
"Armitage Share Option Schemes" the Armitage Brothers plc Executive Share Option Scheme, the
Armitage Brothers plc Approved Share Option Scheme and the
Armitage Brothers plc Share Option Scheme
"Armitage Shares" the existing unconditionally allotted or issued and fully
paid ordinary Shares of 10p each in Armitage and any further
such shares which may be issued or unconditionally allotted
while the Offer remains open for acceptance or, subject to
the rules of the City Code, such earlier date (not being
earlier than the date on which the Offer becomes or is
declared unconditional as to acceptances, or, if later, the
first closing date of the Offer) as Focus100 may decide as a
result of the exercise of options under the Armitage Share
Option Schemes or otherwise
"the Board" the board of directors of Armitage
"City Code" the City Code on Takeovers and Mergers
"Daily Official List" the Daily Official List of the London Stock Exchange
"Focus100" Focus100 Limited
"HSBC" HSBC Bank plc
"Form of Acceptance" the form of acceptance relating to the Offer which will
accompany the Offer Document
"Listing Rules" the listing rules of the UK Listing Authority
"London Stock Exchange" The London Stock Exchange plc
"Offer" the recommended offer to be made by Williams de Broe on behalf
of Focus100 to acquire all the Armitage Shares including, where
the context so requires, any subsequent revision, variation,
extension or renewal of such offer
"Offer Document" the document to be dated 20 March 2003 containing the Offer
"Official List" the Official List of the UK Listing Authority
"Panel" the Panel on Takeovers and Mergers
"the Trust" the Armitage Brothers plc Employees' Share Trust, the trustee of
which is a wholly owned subsidiary of Armitage Brothers plc
"UK" or "United Kingdom" the United Kingdom of Great Britain and Northern Ireland
"UK Listing Authority" the Financial Services Authority Limited acting in its capacity
as the competent authority for listing in the UK for the
purposes of Part VI of the Financial Services and Markets Act
2000
"USA"or "US" or "United States of America" the United States of America, its territories and possessions,
or "United States" any state of the United States and the District of Columbia
"Williams de Broe" Williams de Broe Plc
This information is provided by RNS
The company news service from the London Stock Exchange
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