RNS Number:4178J
Border Television PLC
20 April 2000
Not for release, publication or distribution in or into the USA, Canada,
Australia or Japan.
20 April 2000
CAPITAL RADIO PLC
RECOMMENDED INCREASED OFFER
for
BORDER TELEVISION PLC
SUMMARY
* The Boards of Capital Radio plc ("Capital Radio") and Border Television
plc ("Border") announce that they have reached agreement on the terms of a
recommended increased offer (the "Increased Offer") for Border.
* The Increased Offer will be made on the basis of #14.00 in cash for each
Border Share, which values the existing issued share capital of Border at
approximately #151 million. The Increased Offer will be unanimously
recommended by the directors of Border.
* Capital Radio will also provide a Loan Note Alternative and a Share
Alternative of 92 New Capital Radio Shares for every 100 Border Shares.
* The Increased Offer represents a premium of approximately 70 per cent.
over the closing price of a Border Share of #8.225 on 9 March 2000, the
dealing day prior to the announcement of the possibility of an offer by SRH.
* To date Capital Radio has purchased 1,070,704 Border Shares representing
approximately 9.9 per cent of Border's issued share capital. Furthermore,
Capital Radio has received irrevocable undertakings to deliver to a
custodian Forms of Acceptance in respect of the Increased Offer over a
further 3,242,977 Border Shares, representing approximately 30.0 per cent
of Border's issued share capital.
* In aggregate, share purchases and irrevocable undertakings total some
4,313,681 Border Shares, representing approximately 39.9 per cent. of
Border's issued share capital.
* The acquisition is consistent with Capital Radio's strategy of building a
national analogue radio presence and strengthens Capital Radio's position as
Britain's leading commercial radio group. As previously announced, Capital
Radio has entered into a put and call agreement with Granada under which the
television assets of Border could be sold to or acquired by Granada in
return for a cash payment of #50.5 million to Capital Radio.
Commenting on the Increased Offer, David Mansfield, Chief Executive of Capital
Radio said:
"This Increased Offer secures the backing of two of Border's largest
shareholders, and represents a compelling offer for all Border shareholders.
We look forward to successfully concluding our agreed bid and then working
with Border's teams to deliver the added value we believe is on offer."
Commenting on the Increased Offer, James Graham, Chairman of Border said:
"This is a deal full of promise. It offers shareholders full value and creates
a potent, compatible and exciting group. I am delighted."
Capital Radio is being advised by Credit Suisse First Boston and Border by
KPMG Corporate Finance and Charterhouse Securities. Cazenove is acting as
broker to the Increased Offer.
This summary should be read in conjunction with the full text of the following
announcement.
ENQUIRIES
Capital Radio Telephone: 020 7766 6288
David Mansfield
Peter Harris
Credit Suisse First Boston Telephone: 020 7888 8888
Anthony Fry
Gillian Sheldon
Stuart Upcraft
Cazenove & Co Telephone: 020 7588 2828
John Paynter
Finsbury Telephone: 020 7251 3801
Rupert Younger
Jamie Leviton
Border Telephone: 01228 525 101
James Graham
Paul Corley
KPMG Corporate Finance Telephone: 020 7311 1000
Nicholas Fry
David Elms
Charterhouse Securities Telephone: 0131 527 3040
Garry Frier
Ludgate Communications Telephone: 020 7253 2252
Richard Hughes
Alex Brog
Credit Suisse First Boston, which is regulated by The Securities and Futures
Authority Limited, is acting exclusively for Capital Radio and for no one else
in connection with the Increased Offer and will not be responsible to anyone
other than Capital Radio for providing the protections afforded to customers
of Credit Suisse First Boston nor for providing advice in relation to the
Increased Offer.
KPMG Corporate Finance is acting exclusively for Border as joint financial
adviser in connection with the Increased Offer. KPMG Corporate Finance is not
acting for any other person (including any recipient of this announcement) and
will not be responsible to anyone other than Border for providing the
protections afforded to clients of KMPG Corporate Finance nor for providing
advice in relation to the Increased Offer. KPMG Corporate Finance is a
division of KPMG which is authorised by the Institute of Chartered Accountants
in England and Wales to carry on investment business.
Charterhouse Securities Limited is acting exclusively for Border as joint
financial adviser in connection with the Increased Offer. Charterhouse
Securities Limited is not acting for any other person (including any recipient
of this announcement) and will not be responsible to anyone other than Border
for providing the protections afforded to customers of Charterhouse Securities
Limited nor for providing advice in relation to the Increased Offer.
Charterhouse Securities Limited is regulated in the UK by The Securities and
Futures Authority Limited.
The Increased 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 of any facilities of a national securities exchange
of, the USA, or in or into Canada, Australia or Japan and the Increased Offer
will not be capable of acceptance by any such use, means, instrumentality or
facilities or from within the USA, Canada, Australia or Japan. Accordingly,
copies of this announcement are not being, and must not be, mailed or
otherwise distributed or sent in or into the USA, Canada, Australia or Japan
and persons receiving this announcement, including custodians, nominees and
trustees should not forward this announcement into the United States, Canada,
Australia or Japan.
The New Capital Radio Shares to be issued in connection with the Share
Alternative have not been, and will not be, registered under the US Securities
Act of 1933, as amended. Furthermore, the relevant clearances have not been,
and will not be obtained from the securities commission of any province of
Canada, nor any city or prefecture of Japan. No prospectus in relation to the
New Capital Radio Shares has been, or will be, lodged with or registered by
the Australian Securities Commission. Accordingly, except pursuant to an
exemption, if available, from any applicable registration requirements or
otherwise in compliance with all applicable laws, the New Capital Radio Shares
may not be offered, sold, resold or delivered, directly or indirectly, in or
into the United States, Canada, Australia or Japan.
This announcement does not constitute an offer or invitation to purchase any
securities.
Not for release, publication or distribution in or into the USA, Canada,
Australia or Japan.
CAPITAL RADIO PLC
RECOMMENDED INCREASED OFFER
for
BORDER TELEVISION PLC
Introduction
The Boards of Capital Radio and Border announce that they have reached
agreement on the terms of a recommended increased offer (the "Increased
Offer") to be made by Credit Suisse First Boston on behalf of Capital Radio to
acquire the entire issued and to be issued ordinary share capital of Border
not already owned by Capital Radio. This represents an improvement over the
offer previously announced by Capital Radio on 13 April 2000.
The Increased Offer will be made on the basis of #14.00 in cash for each
Border Share and values the existing issued share capital of Border at
approximately #151 million. Capital Radio will also provide a Loan Note
Alternative and a Share Alternative of 92 New Capital Shares for every 100
Border Shares.
The Increased Offer represents a premium of approximately 70 per cent. over
the closing price of a Border Share of #8.225 on 9 March 2000, the dealing day
prior to the announcement of the possibility of an offer by SRH. The Increased
Offer represents a premium of approximately 2 per cent. to the closing price
of a Border Share of #13.75 on 19 April 2000.
The directors of Border have received financial advice from KPMG Corporate
Finance and Charterhouse Securities. The directors, who have been so advised
by Charterhouse Securities under Rule 3 of the Code, consider the terms of the
Increased Offer to be fair and reasonable and in the best interests of Border
and its shareholders as a whole. KPMG Audit plc acts as auditor to Capital
Radio and, as a consequence of Rule 3 of the Code, KPMG Corporate Finance is
not acting as independent adviser to Border for the purposes of the Increased
Offer. In providing advice to the directors of Border, KPMG Corporate Finance
and Charterhouse Securities have taken into account the commercial assessments
of the directors of Border.
The directors of Border unanimously recommend that all Border Shareholders
accept the Increased Offer. The directors of Border (and certain persons
controlled by or connected with them) have irrevocably undertaken to deliver
to a custodian Forms of Acceptance in respect of their entire beneficial
holdings totalling 387,539 Border Shares, representing approximately 3.6 per
cent. of Border's issued share capital.
Capital Radio has received further irrevocable undertakings from Border
Shareholders which, together with the undertakings received from the directors
of Border (and certain persons controlled by or connected with them) relate to
a total of 3,242,977 Border Shares representing, in aggregate, approximately
30.0 per cent. of Border's issued share capital.
Furthermore, Capital Radio has purchased 1,070,704 Border Shares representing
approximately 9.9 per cent. of Border's issued share capital. In aggregate,
share purchases and irrevocable undertakings total some 4,313,681 Border
Shares, representing approximately 39.9 per cent. of Border's issued share
capital.
Increased Offer
On behalf of Capital Radio, Credit Suisse First Boston will offer to acquire
all of the issued and to be issued Border Shares.
The Increased Offer will be made on the following basis:
For each Border Share #14.00 in cash
The Increased Offer will be subject to the conditions and further terms set
out or referred to below and in Appendix I to this announcement and to be set
out in the Offer Document and Form of Acceptance.
The Border Shares are to be acquired under the Increased Offer fully paid and
free from all liens, charges, and encumbrances, rights of pre-emption and
other third party rights and interests and together with all rights attaching
thereto, including the right to receive and retain all dividends and other
distributions declared, made or paid after 13 April 2000.
Irrevocable commitments to accept the cash consideration available under the
Increased Offer or to accept the Loan Note Alternative have been received over
some 2,000,438 Border Shares.
Loan Note Alternative
As an alternative to any or all of the cash consideration of #14.00 per Border
Share available under the Increased Offer, Border Shareholders (other than
certain overseas shareholders) who validly accept the Increased Offer will be
able to elect to receive Loan Notes to be issued by Capital Radio (or a
subsidiary) on the following basis:
For every #1 of cash consideration #1 nominal of Loan Notes
under the Increased Offer
The Loan Notes, which to the extent issued by a subsidiary will be guaranteed
by Capital Radio, will be unsecured and will be issued, credited as fully
paid, in amounts and integral multiples of #1 nominal. The Loan Notes will
bear interest (from and including the date on which the Increased Offer
becomes or is declared unconditional in all respects) payable every six months
in arrear, at a rate of 1 per cent per annum below LIBOR for six month
sterling deposits determined on the first business day of the relevant
interest period. Interest will be payable (less any tax required by law to be
deducted therefrom) in arrear on 31 March and 30 September in each year. The
first interest payment date will be 31 March 2001 in respect of the period
from and including the date on which the Increased Offer becomes unconditional
in all respects up to (but excluding) 31 March 2001.
Holders of Loan Notes will have the right to redeem at par all or some of
their Loan Notes on 31 March 2001 and on subsequent interest payment dates.
If at any time the aggregate amount of all Loan Notes outstanding is less than
#1 million, Capital Radio shall have the right, on any interest payment date
falling after 31 March 2001, to repay all the outstanding Loan Notes at par
together with accrued interest. Unless previously redeemed or repurchased,
the Loan Notes will be redeemed at par together with accrued interest on the
fifth anniversary of the date upon which the Increased Offer becomes or is
declared unconditional in all respects.
The Loan Notes will be constituted by a Loan Note instrument, will be issued
in registered form in integral multiples of #1 nominal and will be
transferable (subject to certain restrictions). The Loan Note instrument will
not contain any restriction on borrowings or charging or disposal of assets by
the Capital Radio Group. No application will be made to any stock exchange
for the Loan Notes to be listed.
Cazenove & Co has advised Capital Radio that, based on market conditions on 19
April 2000 (the latest practicable date prior to this announcement), in its
opinion, if the Loan Notes had then been in issue, the value of the Loan Notes
would have been not less than 98p per #1 of nominal value.
The Loan Note Alternative will be conditional on the Increased Offer becoming
or being declared unconditional in all respects and is expected to remain open
for as long as the Increased Offer remains open for acceptance. No Loan Notes
will be issued unless, by the time the Increased Offer becomes or is declared
wholly unconditional, valid elections have been received for at least #1
million nominal value of Loan Notes or such lesser amount as Capital Radio may
determine. If insufficient elections are received, Border Shareholders who
validly elect for the Loan Note Alternative will instead receive cash in
accordance with the terms of the Increased Offer.
Full details of the Loan Note Alternative and the terms of the Loan Notes will
be set out in the Offer Document.
Share Alternative
Border Shareholders who validly accept the Increased Offer may elect to
receive New Capital Radio Shares instead of the cash consideration to which
they would otherwise be entitled in respect of some or all of their holdings
of Border Shares on the following basis:
For every 100 Border Shares 92 New Capital Radio Shares
and so in proportion to the number of Border Shares in respect of which an
election for the Share Alternative is made, subject to the issue of a maximum
7,500,000 New Capital Radio Shares, approximately 10 per cent of the current
issued share capital of Capital Radio.
Share purchases and irrevocable commitments to accept the cash consideration
available under the Increased Offer or to accept the Loan Note Alternative
over some 3,071,142 Border Shares mean that a maximum of 7,124,528 New Capital
Radio Shares could be issued assuming full take up of the Share Alternative by
other Border Shareholders.
The Share Alternative will remain open until 3.00pm on the first closing date
of the Increased Offer. If the Offer is not then unconditional as to
acceptances, Capital Radio may extend the Share Alternative to a later date.
If the Share Alternative has been closed, Capital Radio reserves the right to
re-introduce a Share Alternative, subject to the rules of the Code.
The New Capital Radio Shares to be issued in satisfaction of elections for the
Share Alternative will be issued credited as fully paid and will rank pari
passu in all respects with the existing Capital Radio Shares, including the
right to all dividends and other distributions declared, made or paid in
respect of Capital Radio Shares after 13 April 2000. The New Capital Radio
Shares will be issued free from all liens, charges, equitable interests,
encumbrances and other interests. Application will be made for the New
Capital Radio Shares to be admitted to the Official List and, as appropriate,
to trading on the London Stock Exchange.
The directors of Border (and a company controlled by one of the directors)
have irrevocably undertaken to deliver to a custodian Forms of Acceptance and
to receive New Capital Radio Shares in respect of 373,039 Border Shares.
Fractions of New Capital Radio Shares will not be allotted or issued to Border
Shareholders who elect for the Share Alternative. Such fractional
entitlements will be satisfied in cash (save that individual entitlements to
amounts of less than #3.00 will be retained for the benefit of the Enlarged
Capital Radio Group).
Irrevocable Undertakings and Share Purchases
Capital Radio has received irrevocable undertakings to deliver to a custodian
Forms of Acceptance from three Border Shareholders and from directors of
Border (and persons controlled by or connected with them) in respect of a
total of 3,242,977 Border Shares representing approximately 30.0 per cent. of
Border's issued share capital.
An undertaking given by Scudder Threadneedle Investment Limited in respect of
855,000 Border Shares will lapse if another offer is made for the entire
issued share capital of Border which is on terms which represent an
improvement on the value of the Increased Offer at the date such offer is
announced.
Another Border Shareholder has given an undertaking to accept the cash
consideration available under the Increased Offer or to accept the Loan Note
Alternative in respect of 504,464 Border Shares which will lapse if another
offer is made for the entire issued share capital of Border at a price of
#17.50 or more per Border Share.
All other irrevocable undertakings will not lapse in the event of a higher
offer. CN Group Limited has provided an undertaking to accept the cash
consideration or the Loan Note Alternative in respect of 1,495,974 Border
Shares. The directors of Border have committed to accept the Share
Alternative in respect of some 373,039 Border Shares.
On 13 April 2000, Capital Radio acquired by way of market purchase 25,000
Border Shares at a price of #13.00 per share and on 19 April 2000 Capital
Radio acquired by way of market purchase a further 1,045,704 Border Shares at
a price of #14.00 per share. In aggregate, these purchases total some
1,070,704 Border Shares representing approximately 9.9 per cent of Border's
issued share capital. Irrevocable undertakings to accept the Increased Offer
and share purchases to date total some 4,313,681 Border Shares, approximately
39.9 per cent. of Border's issued share capital.
Background to the Increased Offer
Following the announcement of its offer on 13 April 2000, Capital Radio
entered into an agreement on 16 April 2000 with Granada in relation to the
television assets of Border. Under the terms of this agreement Capital Radio
has the option to sell and Granada the option to buy those assets for cash
consideration of #50.5 million. Border already has a close working
relationship with Granada and this agreement further reinforces that
relationship. The agreement with Granada also allows Capital Radio to focus
upon its core radio business.
Analogue Radio
The acquisition of Border is consistent with Capital Radio's stated strategy
of building a national analogue radio presence, and strengthens Capital
Radio's position as Britain's leading commercial radio group.
The acquisition will take the Company's ownership of radio stations from 85
points to 110 points, leaving the Enlarged Capital Radio Group with 12 per
cent. headroom for further expansion.
Border's three Century radio stations, two of which were launched less than
two years ago, have grown rapidly and have good potential for further audience
and revenue growth.
Capital Radio has demonstrated through past acquisitions, such as Invicta FM,
BRMB FM and most recently Red Dragon FM, its ability to integrate new
acquisitions successfully and to strengthen brands, increase audiences and
grow revenue. It has a strong track record over the last five years in
growing its radio turnover and profit before tax, and its acknowledged skills
and resources will enable it to maximise the potential of Border's radio
business.
Border has been successful in its applications for regional analogue licences
and the Enlarged Capital Radio Group will continue to apply for new analogue
licences.
Enhanced Proposition for Advertisers
Border's stations will enable Capital Radio to provide an enhanced offer to
advertisers:
* An additional potential audience of approximately 9.2 million adults,
creating a total potential audience of approximately 25.4 million adults
(approximately 54 per cent. of the UK adult population), an increase of
approximately 57 per cent.
* An increased weekly audience reach of approximately 1.3 million adults,
creating a total of approximately 7.7 million adults, an increase of
approximately 20 per cent.
* An increase of approximately 12 million listening hours, creating a
total of approximately 82 million hours, an increase of approximately 17
per cent.
* The opportunity to target every major metropolitan area in England and
Wales. Border's stations cover major metropolitan areas in the North
West and North East England, and the East Midlands; Capital's stations
are in London, the West Midlands, Wales and the South of England.
Capital Radio Advertising is considered the key sales point by customers
(Clark Chapman Research December 1999) with leading airtime sales operations
in London and Manchester. The Company believes it is well placed to drive the
revenue growth of the Enlarged Capital Radio Group, capitalising on Border's
fast growing radio assets and a national presence which includes London.
Digital Radio
Border will strengthen Capital Radio's leading position in digital radio. Its
forthcoming applications for regional digital multiplex licences for the North
East, North West, West Midlands, Yorkshire and Severn regions will give the
Enlarged Capital Radio Group further opportunities to expand in digital radio.
Internet
There are strong synergies between radio and the internet, and Capital Radio
has operated a network of websites since 1996. It is aiming to develop the
UK's leading music portal, featuring a strong combination of on-line music,
quality content and CD sales, with an investment of #5.5 million in the
current year. The strong analogue presence of the Enlarged Capital Radio
Group will help drive the development of that business by giving it exposure
to more potential customers and more cross-promotional opportunities.
The Board expects that the acquisition of Border will enable Capital Radio to
deliver growth over and above that which Capital Radio would achieve on a
standalone basis. Shareholders in the Enlarged Capital Radio Group will
benefit from this future growth.
Information on Capital Radio
Capital Radio is Britain's leading commercial radio group, with the most
listened to commercial radio stations in all its broadcast areas.
The London-based company operates 95.8 Capital FM, London's most popular
commercial radio station, and 14 other commercial stations in London,
Birmingham, Cardiff, Hampshire, Kent, Sussex and Oxford. Capital Radio's FM
stations offer contemporary hit radio, while Capital Gold, its AM service,
offers classic hits from the 70's, 80's and 90's and is networked across
Capital Radio's transmission areas. Capital Radio's national sales
organisation, Capital Radio Advertising, sells airtime to national advertisers
on behalf of all Capital Radio's stations plus Newslink and the Pepsi Chart
Show.
CE Digital, Capital Radio's joint venture with Emap, has been awarded digital
multiplex licences in London, Birmingham and Manchester and Capital Radio has
been awarded a further multiplex in Cardiff. To date, Capital Radio has been
awarded 20 digital licences, 13 of which are for new stations. The first of
these to launch was its national digital station 'Life' in January 2000 on
Digital One's national multiplex.
Capital Interactive, the Company's Internet business, offers web sites to
complement the Company's radio stations and has launched an online music
store, MusicCapital.com. Capital Interactive is currently developing what it
intends to be the UK's leading music portal, which is expected to go live in
late spring. Capital Radio is also active in the recording industry through
its 50 per cent. interest in the record label, Wildstar, a joint venture with
Telstar.
For the year ended 30 September 1999, Capital Radio had sales of #112 million
(1998: #100 million) and operating profit from continuing operations of #32.6
million (1998: #29.2 million). As at 30 September 1999, Capital Radio had net
assets of #42.4 million (1998: #48.8 million).
Current Trading
Capital Radio is pleased to report that the advertising market remains very
strong and that the Capital Radio Group will shortly be reporting radio
revenues for the half year approximately 14 per cent. ahead of the same period
last year. Revenue remains buoyant for the third quarter, from April to June,
and on this basis the directors of Capital Radio look forward to a strong
performance for the full year.
Information on Border
Border is a television and radio broadcaster. Its principal television
activity comprises the operation of the Channel 3 television licence for the
South of Scotland, Cumbria and the Isle of Man. Both the selling of national
television advertising and the transmission of Border's television programmes
are contracted to Granada Media Group for a period of seven years. For the
six months ended 31 October 1999, Border's television division contributed
revenues of approximately #7.2 million, representing approximately 62 per
cent. of Border's total revenue.
In 1994, Border diversified into commercial radio and now owns four commercial
radio stations, which together have a potential audience of approximately 9.2
million adults. Three of the radio stations are branded as Century Radio and
broadcast in the North West, the North East and the East Midlands regions of
England, with studios in Manchester, Newcastle and Nottingham. The fourth
station is branded as Sun FM and operates in Sunderland. For the six months
ended 31 October 1999, the radio division contributed revenues of
approximately #4.3 million, representing approximately 38 per cent. of
Border's total revenue.
For the year ended 30 April 1999, Border had sales of approximately #19.9
million (1998: #15.8 million) and operating profit from continuing operations
(before pre operational costs) of approximately #2.4 million (1998: #2.8
million). For the six months ended 31 October 1999, Border had sales of
approximately #11.5 million (1998: #9.5 million) and operating profit from
continuing operations (before pre operational costs) of approximately #1.7
million (1998: #1.6 million). As at 31 October 1999 Border had net assets of
approximately #5.7 million (1998: #5.2 million).
Conditions
The Increased Offer will be conditional, inter-alia, upon the New Capital
Radio Shares to be issued pursuant to valid elections for the Share
Alternative being admitted to the Official List and, as appropriate, to
trading on the London Stock Exchange. The Increased Offer will also be
conditional on Border not being in material default under the terms of its
local radio licences and its Channel 3 television licence which, in each case,
might reasonably be expected to lead to termination or withdrawal of such
licences. Furthermore, the Increased Offer will also be conditional on the
Radio Authority and the ITC confirming in terms satisfactory to Capital Radio
that the relevant licences held by members of the Enlarged Capital Radio Group
will not be materially affected following implementation of the Increased
Offer, and that neither the Radio Authority nor the ITC has any intention of
issuing any material direction in respect of the relevant licence.
The Articles of Association of Border generally limit the holding which any
person may have in Border Shares to 10 per cent. of the issued share capital.
The Increased Offer will be conditional on the Articles of Association of
Border being amended so as to permit Capital Radio to own all the Border
Shares. The board of Border will convene an extraordinary general meeting of
Border to amend the Articles of Association accordingly and until such
amendment is made, under the terms of the Increased Offer, Forms of Acceptance
will be delivered to a custodian to hold on behalf of the relevant Border
Shareholders.
Management and employees
Capital Radio is keen to ensure that the skill and dedication of existing
Border employees are retained for the benefit of the Enlarged Capital Radio
Group. The existing employment rights, including pension rights, of the
management and employees of Border will be fully safeguarded.
Border Share Option Scheme
The Increased Offer will extend to all Border Shares unconditionally allotted
or issued while the Increased Offer remains open for acceptance (or prior to
such earlier date as Capital Radio may, subject to the Code, determine) as a
result of the exercise of options granted under the Border Share Option
Scheme.
In the event that the Increased Offer becomes or is declared unconditional in
all respects, it is intended that appropriate proposals will be made to
participants in the Border Share Option Scheme.
General
Neither Capital Radio nor any of the directors of Capital Radio nor, so far as
Capital Radio is aware, any party acting in concert with Capital Radio, owns
or controls any Border Shares or holds any options to purchase Border Shares
or has entered into any derivative referenced to Border Shares which remains
outstanding.
It is intended that the Offer Document setting out the formal terms and
conditions of the Increased Offer will be sent to Border Shareholders as soon
as practicable.
ENQUIRIES
Capital Radio Telephone: 020 7766 6288
David Mansfield
Peter Harris
Credit Suisse First Boston Telephone: 020 7888 8888
Anthony Fry
Gillian Sheldon
Stuart Upcraft
Cazenove & Co Telephone: 020 7588 2828
John Paynter
Finsbury Telephone: 020 7251 3801
Rupert Younger
Jamie Leviton
Border Telephone: 01228 525 101
James Graham
Paul Corley
KPMG Corporate Finance Telephone: 020 7311 1000
Nicholas Fry
David Elms
Charterhouse Securities Telephone: 0131 527 3040
Garry Frier
Ludgate Communications Telephone: 020 7253 2252
Richard Hughes
Alex Brog
Credit Suisse First Boston, which is regulated by The Securities and Futures
Authority Limited, is acting exclusively for Capital Radio and for no one else
in connection with the Increased Offer and will not be responsible to anyone
other than Capital Radio for providing the protections afforded to customers
of Credit Suisse First Boston nor for providing advice in relation to the
Increased Offer.
KPMG Corporate Finance is acting exclusively for Border as joint financial
adviser in connection with the Increased Offer. KPMG Corporate Finance is not
acting for any other person (including any recipient of this announcement) and
will not be responsible to anyone other than Border for providing the
protections afforded to clients of KMPG Corporate Finance nor for providing
advice in relation to the Increased Offer. KPMG Corporate Finance is a
division of KPMG which is authorised by the Institute of Chartered Accountants
in England and Wales to carry on investment business.
Charterhouse Securities Limited is acting exclusively for Border as joint
financial adviser in connection with the Increased Offer. Charterhouse
Securities Limited is not acting for any other person (including any recipient
of this announcement) and will not be responsible to anyone other than Border
for providing the protections afforded to customers of Charterhouse Securities
Limited nor for providing advice in relation to the Increased Offer.
Charterhouse Securities Limited is regulated in the UK by The Securities and
Futures Authority Limited.
The Increased 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 of any facilities of a national securities exchange
of, the USA, or in or into Canada, Australia or Japan and the Increased Offer
will not be capable of acceptance by any such use, means, instrumentality or
facilities or from within the USA, Canada, Australia or Japan. Accordingly,
copies of this announcement are not being, and must not be, mailed or
otherwise distributed or sent in or into the USA, Canada, Australia or Japan
and persons receiving this announcement, including custodians, nominees and
trustees should not forward this announcement into the United States, Canada,
Australia or Japan.
The New Capital Radio Shares to be issued in connection with the Share
Alternative have not been, and will not be, registered under the US Securities
Act of 1933, as amended. Furthermore, the relevant clearances have not been,
and will not be obtained from the securities commission of any province of
Canada, nor any city or prefecture of Japan. No prospectus in relation to the
New Capital Radio Shares has been, or will be, lodged with or registered by
the Australian Securities Commission. Accordingly, except pursuant to an
exemption, if available, from any applicable registration requirements or
otherwise in compliance with all applicable laws, the New Capital Radio Shares
may not be offered, sold, resold or delivered, directly or indirectly, in or
into the United States, Canada, Australia or Japan.
This announcement does not constitute an offer or invitation to purchase any
securities.
APPENDIX I
CONDITIONS OF THE INCREASED OFFER
The Increased Offer, which will be made by Credit Suisse First Boston on
behalf of Capital Radio, will comply with all applicable Rules and Regulations
of the London Stock Exchange and/or as appropriate the UK Listing Authority
and the Code. The Increased Offer will be governed by English law and be
subject to the jurisdiction of the Courts of England and will be subject to
the terms and conditions contained in Appendix I of the announcement by
Capital Radio of its offer for Border made on 13 April 2000 save that:
(a) references to the "Offer" shall be deemed to be references to the
"Increased Offer"; and
(b) references to "the date hereof" shall be deemed to be references to "13
April 2000";
and will also be subject to those terms and conditions to be set out in the
Offer Document and Form of Acceptance.
APPENDIX II
FINANCIAL EFFECTS OF ACCEPTANCE OF THE INCREASED OFFER
The following tables set out, for illustrative purposes only and on the bases
and assumptions set out in the notes below, the financial effects on capital
value and gross income for a holder of one Border Share accepting the
Increased Offer if the Increased Offer becomes or is declared unconditional in
all respects:
A. Increase in capital value
Increased Offer
Notes #
Cash in respect of one Border Share 14.00
Market value of one Border Share (i) 13.75
Increase in capital value 0.25
This represents an increase of 1.8%
B. Increase in gross income
Interest income from the Increased Offer of #14.00 (ii) 0.769
Gross dividend income on one Border Share (iii) 0.098
Increase in gross income 0.671
This represents an increase of 685%
Notes:
(i) The market value of a Border Share is based on the closing middle-market
price of #13.75 per Border Share on 19 April 2000.
(ii) The gross interest income on the cash consideration under the Cash
Alternative is calculated on the assumption that the cash is reinvested
to yield approximately 5.49 per cent. per annum, being the gross
redemption yield on UK Government securities with maturity between 5 and
15 years, as published in the Financial Times on 19 April 2000.
(iii) The gross dividend income from a Border Share is based on aggregate
dividends of 8.8p (net) per Border Share being the total of the 5.8p
(net) final dividend for the year ended 30 April 1999 and the 3.0p
(net) interim dividend for the year ended 30 April 2000, grossed up by a
factor of 100/90.
(iv) In assessing the financial effects of acceptance of the Increased Offer,
no account has been taken of the treatment of any fractions or any
potential liability to taxation of a Border Shareholder.
APPENDIX III
SOURCES AND BASES
1. Unless otherwise stated, references to historical share prices have been
taken from the closing middle-market prices as derived from the London
Stock Exchange.
2. The value of the whole of the issued share capital of Border is based
upon 10,815,194 Border Shares in issue. Calculations based upon the
issued share capital of Capital Radio are based upon 75,259,343 Capital
Radio Shares in issue.
3. Figures for the potential audience, weekly reach and listening hours of
radio services are derived from RAJAR/Ipsos-RSL figures for (unless
otherwise stated) the survey period for the six months ending December
1999. RAJAR is a company specifically established to manage the UK's
agreed system of radio audience measurement.
APPENDIX IV
DEFINITIONS
Unless the context requires otherwise, definitions used in the announcement by
Capital Radio of its offer for Border dated 13 April 2000, save as varied
herein, apply throughout this announcement together with the following
additional definitions:
"Border Shares" existing unconditionally allotted or issued and
fully paid ordinary shares of 10p each in the
capital of Border not already owned by Capital
Radio and such further shares which are issued or
unconditionally allotted and fully paid prior to
the date on which the Increased Offer closes or,
subject to the provisions of the Code, such
earlier date as Capital Radio may decide
"Form of Acceptance" the form of acceptance, authority and election
relating to the Increased Offer to be despatched
to Border Shareholders with the Offer Document
"Granada" Granada Media Group Limited
"Increased Offer" the recommended offer to be made by Credit Suisse
First Boston on behalf of Capital Radio to acquire
all of the issued and to be issued Border Shares
on the terms and subject to the conditions to be
set out or referred to in the Offer Document and
including, where the context permits, any
elections available thereunder and/or any
subsequent revision, variation, extension or
renewal of such offer
"LIBOR" London Inter-bank Offered Rate
"Loan Notes" the unsecured redeemable loan notes to be issued
by Capital Radio (or one of its wholly owned
subsidiaries) pursuant to valid elections for the
Loan Note Alternative under the Increased Offer
"Loan Note Alternative" the alternative whereby Border Shareholders who
validly accept the Increased Offer may elect to
receive Loan Notes in lieu of all or part of the
cash consideration to which they would otherwise
have been entitled under the Increased Offer
"Offer Document" the document to be sent to Border Shareholders
setting out the terms and conditions of the
Increased Offer
"Share Alternative" the alternative whereby Border Shareholders
validly accepting the Increased Offer may elect to
receive New Capital Radio Shares instead of all or
part of the cash consideration to which they would
otherwise have been entitled under the Increased
Offer
END
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