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RNS Number : 6200L
Giles Insurance Brokers Limited
02 August 2011
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART
IN, INTO OR FROM THE UNITED STATES, CANADA, AUSTRALIA OR JAPAN OR
ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION
OF THE RELEVANT LAWS OF SUCH JURISDICTION
2 August 2011
RECOMMENDED CASH OFFER
by
GILES INSURANCE BROKERS LIMITED
for
CBG GROUP PLC
Summary
-- The Boards of CBG and Giles are pleased to announce that they
have agreed the terms of a recommended cash offer to be made by
Giles, a wholly-owned indirect subsidiary of Expectrum Limited, for
the entire issued and to be issued share capital of CBG.
-- CBG is an AIM quoted corporate general insurance, risk
management and financial services intermediary, offering a range of
insurance and financial planning services for commercial and
private clients. CBG has 120 employees and has its head office in
Manchester, together with offices in London and Blackpool.
-- Giles is one of the largest independent insurance brokers in
the United Kingdom with around 900 employees and a network of 40
offices including major business centres in London, Birmingham,
Glasgow, Leeds and Cardiff.
-- The Offer will comprise 32 pence in cash for each CBG Share
and values the entire issued and to be issued share capital of CBG
at approximately GBP5.1 million.
-- Giles has a strategy to grow both organically and by
acquisition and to continue to build on its position as one of the
leading commercial insurance brokers within the UK. The acquisition
of CBG provides:
o the opportunity to extend Giles' geographic footprint by
acquiring one of the largest insurance brokers in the North West of
England predominantly focused on corporate and commercial
clients;
o a platform to further develop the CBG business with the
benefit of Giles' strong relationships with insurers and wide
product base including a number of specialisms; and
o expertise in key product areas which can be leveraged across
the existing Giles office network, such as healthcare.
-- Giles has received the following irrevocable undertakings and
letters of intent:
o undertakings to accept, or procure the acceptance of, the
Offer in respect of 1,444,671 CBG Shares in aggregate in which the
CBG Directors have a beneficial interest, representing
approximately 9.1 per cent. of the issued share capital of CBG;
o undertakings to accept, or procure the acceptance of, the
Offer in respect of 4,692,521 CBG Shares in aggregate in which
certain other Shareholders have a beneficial interest, representing
approximately 29.6 per cent. of the issued share capital of CBG;
and
o non-binding letters of intent to accept the Offer have been
provided by Laurence Andrew Turnbull who has a beneficial interest
in 1,252,942 CBG shares and Allianz Insurance plc which has a
beneficial interest in 675,000 CBG shares.
-- Accordingly, the number of CBG Shares in respect of which
irrevocable undertakings and letters of intent have been received
is, in aggregate, 8,065,134, representing approximately 50.8 per
cent. of the issued share capital of CBG. The shares that are the
subject of these irrevocable undertakings and letters of intent
equate to approximately GBP2.6 million of the Offer Value.
-- The Offer is conditional on, inter alia, valid acceptances
being received in respect of not less than 90% of the CBG Shares to
which the Offer relates, that Independent Shareholders vote in
favour of the Resolution at the General Meeting and receipt of
regulatory clearance from the FSA. The full terms and conditions of
the Offer are set out in Appendix 1 to this announcement.
-- The Independent Directors, who have been so advised by Zeus
Capital, consider the terms of the Offer to be fair and reasonable.
Accordingly, the Independent Directors intend unanimously to
recommend that Shareholders accept the Offer, as the CBG Directors
have irrevocably undertaken to do, or procure to be done, in
respect of their beneficial holdings of, in aggregate, 1,444,671
CBG Shares representing approximately 9.1 per cent of the existing
issued share capital of CBG.
-- The Management Arrangements are required to be approved by
Independent Shareholders under Rule 16 of the Code. Zeus Capital
consider the terms of the Management Arrangements to be fair and
reasonable, accordingly the Independent Directors intend
unanimously to recommend that Independent Shareholders vote in
favour of the Resolution at the General Meeting.
Commenting on the Offer, Chris Giles, Chief Executive of Giles,
said:
"Giles is delighted to have made this Offer. We see CBG as a
strong strategic fit with the existing Giles business with
significant opportunities for both businesses to grow and develop
together and to leverage from a shared scale and market
presence.
The removal of the regulatory burden of being a listed company
will allow the CBG team to focus on continuing to develop the
business, and improve its operational performance through the
infrastructure and operational efficiencies of Giles. The
opportunity to expand in a core region is an exciting prospect for
Giles and we are committed to exploring the opportunities ahead for
both businesses."
Commenting on the Offer, Robin Slinger, Chairman of CBG,
said:
"CBG is pleased to announce that it will be recommending Giles'
offer for 32p per share to investors for consideration. The
opportunity to become part of the Giles operation will inevitably
provide significant growth potential for CBG in the coming
years."
"Giles has established a strong position in the regional
marketplace and has an excellent reputation for acquiring and
enhancing ambitious businesses. We're confident that this deal will
add considerable weight to Giles' North West proposition, while
also providing the company with access to niche sectors where CBG
has demonstrated exceptional strength."
Enquiries
Giles
Sarah Gestetner / Nicola Swift / Jos Bieneman Citigate Dewe
Rogerson 020 7282 2920/2993
Altium Capital (financial adviser to Giles)
Keith Williams / Nakul Mohandas Altium Capital 0845 505 4343
CBG
Robin Slinger, Chairman CBG 0161 920 0200
Zeus Capital (nominated and financial adviser to CBG)
Alex Clarkson / Tom Rowley / Aaron Smyth Zeus Capital 0161 831
1512
This summary should be read in conjunction with, and is subject
to, the full text of the following announcement, including the
Appendices. The conditions to and further terms of the Offer are
set out in Appendix I. Additional information is set out in
Appendix II, including the sources and bases of certain information
contained in this announcement (Part A) and details of the
irrevocable undertakings and letters of intent received by Giles in
relation to the Offer (Part B). Definitions and terms used in this
announcement are set out in Appendix III.
Altium, which is authorised and regulated in the United Kingdom
by the FSA for investment business activities, is acting
exclusively as financial adviser to Giles and no one else in
connection with the Offer and will not be responsible to anyone
other than Giles for providing the protections afforded to clients
of Altium or for providing advice in relation to the Offer or any
other matters referred to in this announcement.
Zeus Capital, which is authorised and regulated in the United
Kingdom by the FSA for investment business activities, is acting
exclusively as nominated adviser and financial adviser to CBG and
no one else in connection with the Offer and will not be
responsible to anyone other than CBG for providing the protections
afforded to clients of Zeus Capital or for providing advice in
relation to the Offer or any other matters referred to in this
announcement.
Overseas jurisdictions
The release, publication or distribution of this announcement in
jurisdictions other than the United Kingdom may be restricted by
law and therefore persons into whose possession this announcement
comes should inform themselves about and observe any such
restrictions. Failure to comply with any such restrictions may
constitute a violation of the securities laws or regulatory
requirements of any such jurisdiction. In particular, this
announcement is not for publication or distribution, directly or
indirectly, to US persons or into the United States (including its
territories and possessions, any state of the United States and the
District of Colombia), Canada, Australia or Japan. This
announcement has been prepared in accordance with English Law and
the Code and information disclosed may not be the same as that
which would have been prepared in accordance with the laws of
jurisdictions outside England.
This announcement is not intended to, and does not, constitute
or form part of any offer or invitation to purchase, otherwise
acquire, subscribe for, sell or otherwise dispose of, any
securities or the solicitation of any vote or approval in any
jurisdiction pursuant to the Offer or otherwise. The Offer will be
made solely through the Offer Document, which will contain the full
terms and conditions of the Offer, including details of how to
accept the Offer. Any voting decision, acceptance or other response
to the Offer should be made only on the basis of information in the
Offer Document.
The Offer is not and will not be made, directly or indirectly,
in or into, or by use of the mails, or by any means or
instrumentality (including, without limitation, by means of
telephone, facsimile, telex, internet or other forms of electronic
communication) of interstate or foreign commerce of, or any
facilities of a securities exchange of, the United States, Canada,
Australia or Japan, and the Offer will not be capable of acceptance
by any such use, means, instrumentality or facility or from within
the United States, Canada, Australia or Japan. Accordingly, unless
otherwise determined by Giles, copies of this announcement and any
other document relating to the Offer are not being, and must not
be, directly or indirectly, mailed or otherwise distributed or sent
in or into the United States, Canada, Australia or Japan and
persons receiving such documents (including custodians, nominees
and trustees) must not distribute or send them in, into or from
such jurisdictions as doing so may make invalid any purported
acceptance of the Offer by persons in any such jurisdiction.
Cautionary note regarding forward-looking statements
This announcement contains certain forward-looking statements
with respect to the financial condition, results of operations and
business of the CBG Group, Giles Group and Expectrum Limited and
certain plans and objectives of the CBG Board, Giles Board and/or
the board of directors of Expectrum Limited. These forward-looking
statements can be identified by the fact that they do not relate
only to historical or current facts. Forward-looking statements
often use words such as "anticipate", "target", "expect",
"estimate", "intend", "plan", "goal", "believe", "will", "may",
"should", "would", "could" or other words of similar meaning. These
statements are based on assumptions and assessments made by the
Boards of CBG, Giles and the board of directors of Expectrum
Limited in light of their experience and their perception of
historical trends, current conditions, expected future developments
and other factors they believe appropriate. By their nature,
forward-looking statements involve risk and uncertainty, and the
factors described in the context of such forward-looking statements
in this announcement could cause actual results and developments to
differ materially from those expressed in or implied by such
forward-looking statements.
Should one or more of these risks or uncertainties materialise,
or should underlying assumptions prove incorrect, actual results
may vary materially from those described in this announcement. None
of CBG, Giles and Expectrum Limited assume any obligation to update
or correct the information contained in this announcement, whether
as a result of new information, future events or otherwise, except
to the extent legally required.
The statements contained in this announcement are made as at the
date of this announcement, unless some other time is specified in
relation to them, and service of this announcement shall not give
rise to any implication that there has been no change in the facts
set out in this announcement since such date. Nothing contained in
this announcement shall be deemed to be a forecast, projection or
estimate of the future financial performance of the CBG Group or
the Giles Group except where expressly stated.
Dealing disclosure requirements
Under Rule 8.3(a) of the Code, any person who is (directly or
indirectly) interested in 1 per cent. or more of any class of
relevant securities of an offeree company or of any paper offeror
(being any offeror other than an offeror in respect of which it has
been announced that its offer is, or is likely to be, solely in
cash) must make an Opening Position Disclosure following the
commencement of the offer period and, if later, following the
announcement in which any paper offeror is first identified. An
Opening Position Disclosure must contain details of the person's
interests and short positions in, and rights to subscribe for, any
relevant securities of each of (i) the offeree company and (ii) any
paper offeror(s). An Opening Position Disclosure by a person to
whom Rule 8.3(a) applies must be made by no later than 3.30 pm
(London time) on the 10th business day following the commencement
of the offer period and, if appropriate, by no later than 3.30 pm
(London time) on the 10th business day following the announcement
in which any paper offeror is first identified. Relevant persons
who deal in the relevant securities of the offeree company or of a
paper offeror prior to the deadline for making an Opening Position
Disclosure must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes,
(directly or indirectly) interested in 1 per cent. or more of any
class of relevant securities of the offeree company or of any paper
offeror must make a Dealing Disclosure if the person deals in any
relevant securities of the offeree company or of any paper offeror.
A Dealing Disclosure must contain details of the dealing concerned
and of the person's interests and short positions in, and rights to
subscribe for, any relevant securities of each of (i) the offeree
company and (ii) any paper offeror, save to the extent that these
details have previously been disclosed under Rule 8. A Dealing
Disclosure by a person to whom Rule 8.3(b) applies must be made by
no later than 3.30 pm (London time) on the business day following
the date of the relevant dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of an offeree company or a paper
offeror, they will be deemed to be a single person for the purpose
of Rule 8.3.
Opening Position Disclosures must also be made by the offeree
company and by any offeror and Dealing Disclosures must also be
made by the offeree company, by any offeror and by any persons
acting in concert with any of them (see Rules 8.1, 8.2 and
8.4).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Panel's website at www.thetakeoverpanel.org.uk, including
details of the number of relevant securities in issue, when the
offer period commenced and when any offeror was first identified.
If you are in any doubt as to whether you are required to make an
Opening Position Disclosure or a Dealing Disclosure, you should
contact the Panel's Market Surveillance Unit on +44 (0)20 7638
0129.
Publication on Giles website
A copy of this announcement and the Offer Document will be
available free of charge, subject to certain restrictions relating
to persons resident in restricted jurisdictions, for inspection on
the Giles website at www.gilesinsurance.co.uk
Neither the contents of Giles' website nor the contents of any
website accessible from hyperlinks on such website (or any other
website) is incorporated into, or forms part of, this announcement
nor, unless previously published by means of a recognised
information service, should any such content be relied upon in
reaching a decision regarding the matters referred to in this
announcement.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART
IN, INTO OR FROM THE UNITED STATES, CANADA, AUSTRALIA OR JAPAN OR
ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION
OF THE RELEVANT LAWS OF SUCH JURISDICTION
2 August 2011
RECOMMENDED CASH OFFER
by
GILES INSURANCE BROKERS LIMITED
for
CBG GROUP PLC
1. Introduction
The Boards of CBG and Giles are pleased to announce that they
have agreed the terms of a recommended cash offer to be made by
Giles, a wholly-owned indirect subsidiary of Expectrum Limited, for
the entire issued and to be issued share capital of CBG, an AIM
quoted corporate general insurance, risk management and financial
services intermediary, offering a range of insurance and financial
planning services for commercial and private clients.
2. The Offer
Giles is offering to acquire the entire issued and to be issued
share capital of CBG, on the terms and subject to the conditions
and further terms set out below and in Appendix I to this
announcement and to the full terms and conditions set out in the
Offer Document and in the accompanying Form of Acceptance on the
following basis:
for each CBG Share 32 pence in cash
The Offer values the entire issued and to be issued share
capital of CBG at approximately GBP5.1 million.
As at 2 August 2011, the Offer represents a premium of:
-- 54.2 per cent. to the Closing Price of an Ordinary Share of
20.75 pence on the last Dealing Day prior to the announcement dated
19 July 2011 that identified Giles as a potential offeror;
-- 44.6 per cent. to the average Closing Price of an Ordinary
Share of 22.13 pence for the six months prior to the announcement
dated 19 July 2011 that identified Giles as a potential offeror;
and
-- 13.3 per cent. to the Closing Price of 28.25 pence per CBG
Share on 2 August 2011 being the last Dealing Day prior to the date
of this announcement.
CBG Shares to be acquired under the Offer will be acquired fully
paid with full title guarantee and free from all liens, equities,
charges, encumbrances, options, rights of pre-emption and any other
third party rights and interests of any nature whatsoever and
together with all rights now or subsequently attaching or accruing
to them including, without limitation, voting rights and the right
to receive and retain in full all dividends and other distributions
(if any) declared, made or paid on or after the date of the
Offer.
The Offer is conditional on, inter alia, the Resolution being
passed at the General Meeting by the Independent Shareholders,
valid acceptances being received in respect of not less than 90 per
cent of the CBG Shares to which the offer relates and receipt of
regulatory clearance from the FSA. The full terms and conditions of
the Offer are set out in Appendix 1 to this announcement.
3. Background to and reasons for the Offer
Giles has a strategy to grow both organically and by acquisition
and to continue to build on its position as one of the leading
commercial insurance brokers within the United Kingdom.
The acquisition of CBG provides:
(i) the opportunity to extend Giles' geographic footprint by
acquiring one of the largest insurance brokers in the North West of
England predominantly focused on corporate and commercial
clients;
(ii) a platform to further develop the CBG business with the
benefit of Giles' strong relationships with insurers and wide
product base including a number of specialisms; and
(iii) expertise in key product areas which can be leveraged
across the existing Giles office network, such as healthcare.
The Giles Board believes that, with the financial backing of CCP
and with the benefit of Giles' management and operational
infrastructure, Giles is well placed to support CBG management and
their plans to continue to develop the business.
4. Background to and reasons for recommending the Offer
The business of CBG was established in October 2001 and
completed five acquisitions in the three years prior to listing on
AIM in November 2003. Following listing CBG has completed twelve
further acquisitions and established a strong reputation in the
insurance marketplace, especially in the North West region of
England.
While the CBG Board are confident that the fundamentals of CBG's
business are strong, over the past 18 months the CBG Board has been
mindful of the challenging market for insurance broking which has
been impacted by the global recession and banking crisis.
In addition, market conditions are materially more difficult for
smaller companies of all descriptions, with a particular issue
being the restricted availability of capital, either through debt
or equity. The difficult market conditions and CBG's lack of scale,
combined with limited cash resources has restricted CBG's ability
to take advantage of the potential opportunities and maintain
growth in the CBG Group's revenues. The competitive environment has
also continued to put pressure on the CBG Group's margins. In
addition, CBG's share price performance has been impaired, in the
CBG Directors' view, by a number of factors, including CBG's
relatively small scale and resultant illiquidity.
Consequently, the CBG Board has had cause to weigh both the
costs and benefits of maintaining an independent London quotation,
with the potential but uncertain future growth in equity value for
its investors.
Accordingly, following an approach by Giles, the Independent
Directors have held detailed discussions regarding the terms of a
potential acquisition of CBG by Giles. The Independent Directors
believe that the strategic rationale for a combination with Giles
is attractive, particularly in relation to the strategic view and
nationwide footprint Giles is able to bring in order to capture
fully the potential market opportunity. In addition, Giles has the
ability to provide CBG with the additional resources required in
order to implement its future growth strategy.
The CBG Board has reviewed a number of options in the past 12
months in connection with the growth of CBG, through organic and
acquisition opportunities and have considered a number of factors
in deciding to recommend the Offer, including valuation,
deliverability and timing as well as the potential impact on the
existing business.
At a time when the CBG Board believe that the CBG business faces
significant external challenges, the Offer enables CBG Shareholders
to crystallise value at a premium to the current CBG share price
and at a higher level than has been available in the market for the
last ten months.
Against this background, the Independent Directors, who have
been so advised by Zeus Capital, consider the terms of the Offer to
be fair and reasonable and that the Offer provides CBG Shareholders
with the opportunity to realise, in cash, their investment in CBG.
Accordingly, the Independent Directors recommend that Shareholders
accept the Offer.
5. Recommendation of the Offer
Following the Offer becoming or being declared unconditional in
all respects, Michael Askew will have continued employment with CBG
and be subject to the Management Arrangements. Accordingly, Michael
has taken no part in the consideration of the Offer as he is not
deemed to be independent for those purposes. On the basis that
Stephen Rees has expressed an interest to buy the financial
services division of CBG, he is therefore not deemed by the Board
of CBG to be independent and accordingly has taken no part in the
recommendation of the Offer.
The Independent Directors, who have been so advised by Zeus
Capital, consider the terms of the Offer to be fair and reasonable.
In providing advice to the Independent Directors, Zeus Capital has
taken into account the commercial assessment of the Independent
Directors of the Offer. Accordingly, the Independent Directors
unanimously recommend that CBG Shareholders accept the Offer.
6. Information relating to Giles and CCP
Information relating to Expectrum Limited
Expectrum Limited is the ultimate holding company of Giles
Insurance Brokers Limited. Expectrum is owned predominantly by CCP
and Christopher Michael Giles.
Information relating to Giles
Established in 1967, Giles has grown to become one of the
largest independent insurance brokers in the United Kingdom with
around 900 employees and a network of 40 offices including major
business centres in London, Birmingham, Glasgow, Leeds and
Cardiff.
For the year ended 31 August 2010, Giles reported turnover of
GBP59.8 million (2009: GBP56.2 million), an operating profit before
depreciation, interest costs, goodwill amortisation and exceptional
charges in relation to impairment of investments of GBP11.4 million
(2009: GBP9.8 million) and profit before taxation of GBP1.5 million
(2009: GBP5.1 million). Giles had net assets of GBP102 million as
at 31 August 2010.
Trading for the current financial year continues to reflect the
competitive pressures within the market, although remains in line
with management expectations. Giles intends to continue to grow
both via acquisition activity and organic development.
Information relating to CCP
CCP is an independent private equity firm that focuses on large
European buy-outs which Charterhouse has been doing since the early
days of the buy-out market in the 1980's. With over 128
transactions, worth an aggregate of EUR38 billion in transaction
value, and with 89% of those investments realised, Charterhouse has
a track record and experience that combine to make it one of the
leading private equity firms in Europe.
CCP is an English limited liability partnership authorised and
regulated by the FSA (FRN: 230721). It provides investment advisory
services to a number of private equity funds that are structured as
series of limited partnerships whose general partners are also FSA
authorised firms. CCP currently advises private equity funds having
a value in excess of EUR8.0 billion.
7. CBG current trading and prospects
Results for the year ended 31 December 2010
On 22 March 2011, CBG announced its audited results for the year
ended 31 December 2010. Revenue for the year ended 31 December 2010
was GBP7.7 million (2009: GBP8.9 million) resulting in adjusted
pre-tax profit of GBP842,000 (2009: GBP1,026,000). CBG had net
assets as at 31 December 2010 of GBP11.9 million, including cash
and cash equivalents of GBP1.2 million.
The CBG Board recommended a final dividend of 0.75p per share,
an increase of 7 per cent upon the dividend declared in the prior
year, that was paid to Shareholders on 27 May 2011.
Trading Update
The CBG Board also provides the following trading update. The
figures below are for the six month period ending 30 June 2011 and
have not been audited.
Market uncertainty and economic fragility continues to impact
heavily on the performance of many within the CBG Group's core
client base. Overall pricing competition remains intense resulting
in revenues and activity substantially lower than in the comparable
period in 2010. The first six months of the year have been
challenging for CBG given that the majority of the CBG Group's
costs are relatively fixed.
Revenue for the six month period ended 30 June 2011 was GBP3.5
million (2010: GBP4.1 million) and is expected to result in an
adjusted pre tax profit (EBITDA) of GBP336,000 (2010: GBP798,000).
Insurance broking suffering a 14 per cent fall in revenues upon the
comparative period in 2010, with financial services down by 13 per
cent.
Net assets as at 30 June 2011 were GBP11.6 million (31 December
2010: GBP11.9 million) and net debt as at 30 June 2011 was GBP1.7
million (31 December 2010: GBP1.5 million).
Trading for July 2011 was back in line with management
expectations.
8. Irrevocable undertakings and letters of intent to accept the
Offer
Giles has received irrevocable undertakings to accept, or
procure the acceptance of, the Offer in respect of:
-- 1,444,671 CBG Shares in aggregate in which the CBG Directors
have a beneficial interest, representing approximately 9.1 per
cent. of the issued share capital of CBG; and
-- 4,692,521 CBG Shares in aggregate in which certain other
Shareholders have a beneficial interest, representing approximately
29.6 per cent. of the issued share capital of CBG.
Non-binding letters of intent to accept the Offer have been
provided by Laurence Andrew Turnbull who has a beneficial interest
in 1,252,942 CBG shares and Allianz Insurance plc which has a
beneficial interest in 675,000 CBG shares.
Accordingly, the number of CBG Shares in respect of which
irrevocable undertakings and letters of intent have been received
is, in aggregate, 8,065,134, representing approximately 50.8 per
cent. of the issued share capital of CBG. The shares the subject of
these irrevocable undertakings and letters of intent equate to
approximately GBP2.6 million of the Offer Value.
9. Management Arrangements
As part of its Offer terms Giles has proposed that Michael Askew
will receive a retention bonus ("Retention Bonus") of GBP200,000
provided he remain employed by CBG at the date of payment and is
not subject to any disciplinary proceedings or under any notice
period. The Retention Bonus will become payable on the earlier of
the date of publication of CBG's accounts for the year ended 31
December 2011 and 31 March 2012.
Giles has also proposed that key employees will participate in a
performance bonus arrangement ("Performance Bonus") based on the
trading performance of the CBG business under Giles' ownership
provided that the relevant individuals remain employed by CBG at
the date of payment and are not subject to any disciplinary
proceedings or notice period. It is proposed that the bonus
arrangement is paid on the following basis:
(a) a bonus payment equivalent to 25 per cent. of income above
current management forecast income for the year to 31 December
2011, payable on the earlier of the date of publication of CBG's
accounts for the year ended 31 December 2011 and 31 March 2012.
(b) a further bonus payment for the period 1 January 2012 to 31
August 2012 equivalent to 25 percent of income above the income
reported from 1 January 2011 to 31 August 2011, payable on the
earlier of the date of publication of Giles' 2012 accounts and 30
November 2012.
It is Giles' intention that Michael Askew will be a beneficiary
of the Performance Bonus alongside other key employees. However,
the identity of the other recipients and the respective allocation
of payments of the Performance Bonus will only be decided following
a review of the business by Giles which it intends to undertake
once the Acquisition has completed.
Pursuant to Rule 16 of the Code, the Management Arrangements are
required to be approved by the Independent Shareholders.
Accordingly, the Resolution will be proposed at the General
Meeting, referred to in paragraph 10 below, where a poll vote of
more than 50 per cent. of the votes cast by the Independent
Shareholders (voting either in person or by proxy) will need to be
passed in favour of the Resolution. In accordance with Rule 16.2 of
the code, Zeus Capital considers the terms of the Management
Arrangements to be fair and reasonable and, accordingly, the
Independent Directors unanimously recommend that Independent
Shareholders vote in favour of the Resolution at the General
Meeting.
10. General Meeting
The Offer is conditional on, inter alia, the passing of the
Resolution by Independent Shareholders at the general meeting of
CBG to approve the Management Arrangements for the purposes of Rule
16 of the Code. A notice convening the General Meeting will be set
out at the end of the Offer Document.
11. Employees and locations
Giles has confirmed that the existing employment rights of all
employees of the CBG Group and the Giles Group will, following the
completion of the Acquisition, be fully safeguarded and all
employee consultation requirements will be complied with.
The Giles Board has stated that it recognises that in order to
achieve the planned benefits of the Acquisition some operational
restructuring will be required following completion of the
Acquisition, which may lead to some redundancies in the CBG Group
and/or the Giles Group where the businesses of the Giles Group and
the CBG Group have overlapping functions or where this would
otherwise improve efficiency. However, the Giles Board has stated
that no decisions will be taken regarding any redundancies or any
changes to the locations of any member of the CBG Group's or any
member of the Giles Group's places of business or redeployment of
their fixed assets until a business review has been undertaken
following completion of the Acquisition and appropriate
consultation with employee representatives has occurred.
12. Financing of the Offer
Full implementation of the Offer (assuming no options are
exercised under the CBG Enterprise Management Incentive Scheme)
would result in a maximum payment by Giles of approximately GBP5.1
million in cash. The cash consideration payable to Shareholders
pursuant to the Offer will be satisfied from the proceeds of a
subscription by members of the CCP VIII Fund for loan notes issued
by DMWSL 586 and the Giles Group's banking facilities provided by
Bank of Scotland plc, part of Lloyds Banking Group.
Altium, financial adviser to Giles, is satisfied that the
necessary financial resources are available to Giles to enable it
to satisfy the cash consideration payable as a result of full
acceptance of the Offer.
13. CBG Enterprise Management Incentive Scheme
The Offer extends to any CBG Shares unconditionally allotted or
issued and fully paid prior to the date on which the Offer closes
as a result of the exercise of options granted under the CBG
Enterprise Management Incentive Scheme.
Participants in the CBG Enterprise Management Incentive Scheme
will receive a letter from CBG, together with the Offer document,
under which they will be notified that in the event that the Offer
becomes or is declared unconditional in all respects, the option
granted to the participants pursuant to the CBG Enterprise
Management Incentive Schemes will become exercisable. As a result
of the options granted pursuant to the CBG Enterprise Management
Incentive Schemes being exercisable at a price in excess of the
Offer Price, Giles is not required to make an equivalent offer to
participants in the CBG Enterprise Management Incentive Scheme.
14. Inducement Fee and Non-Solicitation Agreement
On 14 June 2011, CBG entered into an agreement with Giles,
(which was subsequently restated on 25 July 2011 and 2 August 2011)
pursuant to which CBG has agreed to pay Giles a sum equal to one
per cent. of the fully diluted equity value of CBG (calculated by
reference to the Offer Price) if, amongst other things, (i) CBG
breaches the terms of that agreement, (ii) the CBG Board fails to
unanimously recommend the Offer or subsequently withdraws, modifies
or qualifies its recommendation, (iii) a competing offer or
alternative transaction is declared unconditional, completes or
becomes effective, (iv) CBG enters into an inducement fee or
analagous arrangement in connection with an alternative transaction
or (v) CBG fails to notify the FSA within 14 days of announcement
of the Offer.
Nothing in the inducement fee arrangement obliges CBG to pay any
amount which the Panel determines would not be permitted by Rule
21.2 of the Code.
Pursuant to Rule 21.2 of the Code, Zeus Capital and CBG have
each confirmed to the Panel that they consider the terms of the
Inducement Fee and Non-Solicitation Agreement to be in the best
interests of CBG Shareholders.
15. Compulsory acquisition, delisting and cancellation of
trading
If Giles receives acceptances under the Offer in respect of,
and/or otherwise acquires, both 90 per cent. or more in value of
the CBG Shares to which the Offer relates and 90 per cent. or more
of the voting rights carried by those shares and assuming that all
of the other conditions of the Offer have been satisfied or waived
(if capable of being waived), Giles intends to exercise its rights
in accordance with sections 974 to 991 of the 2006 Act to acquire
compulsorily the remaining CBG Shares on the same terms as the
Offer.
Following the Offer becoming or being declared unconditional in
all respects and subject to any applicable requirements of the AIM
Rules, Giles intends to procure that CBG applies to the London
Stock Exchange for the cancellation of the admission to trading in
the CBG Shares on AIM. It is anticipated that such cancellation
will take effect no earlier than 20 Business Days after the Offer
becomes or is declared unconditional in all respects (provided that
Giles has acquired, or agreed to acquire, issued share capital
carrying 75 per cent. of the voting rights of CBG). Delisting and
the cancellation of the admission to trading of CBG Shares will
significantly reduce the liquidity and marketability of any CBG
Shares not acquired by Giles.
It is also intended that, following the Offer becoming or being
declared unconditional in all respects, CBG will be re-registered
as a private company and will enter into guarantee and debenture
arrangements in favour of the lenders to the Giles Group under the
terms of financing arrangements of the Giles Group.
It is intended that, following the Offer becoming or being
declared unconditional in all respects, CBG will be operated as a
trading subsidiary in a group of private companies, it will adopt
articles of association consistent with this position and, as such,
it is unlikely that it will pay dividends on any regular basis.
16. Disclosure of interests in CBG Shares
Giles confirms that on 1 August 2011 it made an Opening Position
Disclosure, setting out the details required to be disclosed under
Rule 8.1(a) of the Code.
As at midnight on 1 August 2011, neither Giles, nor any of the
directors of Giles nor, so far as Giles is aware, any person acting
in concert (within the meaning of the City Code) with Giles for the
purposes of the Acquisition has any interest in, owns or controls
any CBG Shares or any securities convertible or exchangeable into
CBG Shares (including pursuant to any short or long exposure,
whether conditional or absolute and whether in the money or
otherwise, to changes in the prices of securities) or any rights to
subscribe for or purchase the same, or holds any options (including
traded options) in respect of, or has any option to acquire, any
CBG Shares or has entered into any derivatives referenced to CBG
Shares ("Relevant Shares") which remain outstanding, nor does any
such person have any arrangement in relation to Relevant Shares. An
"arrangement" for these purposes also includes any indemnity or
option arrangement, or any agreement or understanding, formal or
informal, of whatever nature, relating to Relevant Shares which may
be an inducement to deal or refrain from dealing in such
securities, or any borrowing or lending of Relevant Shares that
have not been on-lent or sold.
17. General
The Offer document will be sent to CBG Shareholders (other than
certain Overseas Shareholders) as soon as possible and in any event
within 28 days of this announcement (or such longer period as the
Panel may permit). Electronic addresses and certain other
information provided by CBG shareholders, persons with information
rights and other relevant persons for the receipt of communications
from the target company may be provided to Giles during an offer
period as required under section 4 of Appendix 4 of the Code.
Enquiries
Giles
Sarah Gestetner / Nicola Swift / Jos Bieneman Citigate Dewe
Rogerson 020 7282 2920/2993
Altium (financial adviser to Giles)
Keith Williams / Nakul Mohandas Altium 0845 505 4343
CBG
Robin Slinger, Chairman CBG 0161 920 0200
Zeus Capital (nominated and financial adviser to CBG)
Alex Clarkson / Tom Rowley / Aaron Smyth Zeus Capital 0161 831
1512
Altium, which is authorised and regulated in the United Kingdom
by the FSA for investment business activities, is acting
exclusively as financial adviser to Giles and no one else in
connection with the Offer and will not be responsible to anyone
other than Giles for providing the protections afforded to clients
of Altium or for providing advice in relation to the Offer or any
other matters referred to in this announcement.
Zeus Capital, which is authorised and regulated in the United
Kingdom by the FSA for investment business activities, is acting
exclusively as nominated adviser and financial adviser to CBG and
no one else in connection with the Offer and will not be
responsible to anyone other than CBG for providing the protections
afforded to clients of Zeus Capital or for providing advice in
relation to the Offer or any other matters referred to in this
announcement.
Overseas jurisdictions
The release, publication or distribution of this announcement in
jurisdictions other than the United Kingdom may be restricted by
law and therefore persons into whose possession this announcement
comes should inform themselves about and observe any such
restrictions. Failure to comply with any such restrictions may
constitute a violation of the securities laws or regulatory
requirements of any such jurisdiction. In particular, this
announcement is not for publication or distribution, directly or
indirectly, to US persons or into the United States (including its
territories and possessions, any state of the United States and the
District of Colombia), Canada, Australia or Japan. This
announcement has been prepared in accordance with English Law and
the Code and information disclosed may not be the same as that
which would have been prepared in accordance with the laws of
jurisdictions outside England.
This announcement is not intended to, and does not, constitute
or form part of any offer or invitation to purchase, otherwise
acquire, subscribe for, sell or otherwise dispose of, any
securities or the solicitation of any vote or approval in any
jurisdiction pursuant to the Offer or otherwise. The Offer will be
made solely through the Offer Document, which will contain the full
terms and conditions of the Offer, including details of how to
accept the Offer. Any voting decision, acceptance or other response
to the Offer should be made only on the basis of information in the
Offer Document.
The Offer is not and will not be made, directly or indirectly,
in or into, or by use of the mails, or by any means or
instrumentality (including, without limitation, by means of
telephone, facsimile, telex, internet or other forms of electronic
communication) of interstate or foreign commerce of, or any
facilities of a securities exchange of, the United States, Canada,
Australia or Japan, and the Offer will not be capable of acceptance
by any such use, means, instrumentality or facility or from within
the United States, Canada, Australia or Japan. Accordingly, unless
otherwise determined by Giles, copies of this announcement and any
other document relating to the Offer are not being, and must not
be, directly or indirectly, mailed or otherwise distributed or sent
in or into the United States, Canada, Australia or Japan and
persons receiving such documents (including custodians, nominees
and trustees) must not distribute or send them in, into or from
such jurisdictions as doing so may make invalid any purported
acceptance of the Offer by persons in any such jurisdiction.
Cautionary note regarding forward-looking statements
This announcement contains certain forward-looking statements
with respect to the financial condition, results of operations and
business of the CBG Group, Giles Group and Expectrum Limited and
certain plans and objectives of the CBG Board, Giles Board and/or
the board of directors of Expectrum. These forward-looking
statements can be identified by the fact that they do not relate
only to historical or current facts. Forward-looking statements
often use words such as "anticipate", "target", "expect",
"estimate", "intend", "plan", "goal", "believe", "will", "may",
"should", "would", "could" or other words of similar meaning. These
statements are based on assumptions and assessments made by the
boards of directors of CBG, Giles and Expectrum Limited in light of
their experience and their perception of historical trends, current
conditions, expected future developments and other factors they
believe appropriate. By their nature, forward-looking statements
involve risk and uncertainty, and the factors described in the
context of such forward-looking statements in this announcement
could cause actual results and developments to differ materially
from those expressed in or implied by such forward-looking
statements.
Should one or more of these risks or uncertainties materialise,
or should underlying assumptions prove incorrect, actual results
may vary materially from those described in this announcement. None
of CBG, Giles and Expectrum Limited assume any obligation to update
or correct the information contained in this announcement, whether
as a result of new information, future events or otherwise, except
to the extent legally required.
The statements contained in this announcement are made as at the
date of this announcement, unless some other time is specified in
relation to them, and service of this announcement shall not give
rise to any implication that there has been no change in the facts
set out in this announcement since such date. Nothing contained in
this announcement shall be deemed to be a forecast, projection or
estimate of the future financial performance of the CBG Group or
Giles Group except where expressly stated.
Dealing disclosure requirements
Under Rule 8.3(a) of the Code, any person who is (directly or
indirectly) interested in 1 per cent. or more of any class of
relevant securities of an offeree company or of any paper offeror
(being any offeror other than an offeror in respect of which it has
been announced that its offer is, or is likely to be, solely in
cash) must make an Opening Position Disclosure following the
commencement of the offer period and, if later, following the
announcement in which any paper offeror is first identified. An
Opening Position Disclosure must contain details of the person's
interests and short positions in, and rights to subscribe for, any
relevant securities of each of (i) the offeree company and (ii) any
paper offeror(s). An Opening Position Disclosure by a person to
whom Rule 8.3(a) applies must be made by no later than 3.30 pm
(London time) on the 10th business day following the commencement
of the offer period and, if appropriate, by no later than 3.30 pm
(London time) on the 10th business day following the announcement
in which any paper offeror is first identified. Relevant persons
who deal in the relevant securities of the offeree company or of a
paper offeror prior to the deadline for making an Opening Position
Disclosure must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes,
(directly or indirectly) interested in 1 per cent. or more of any
class of relevant securities of the offeree company or of any paper
offeror must make a Dealing Disclosure if the person deals in any
relevant securities of the offeree company or of any paper offeror.
A Dealing Disclosure must contain details of the dealing concerned
and of the person's interests and short positions in, and rights to
subscribe for, any relevant securities of each of (i) the offeree
company and (ii) any paper offeror, save to the extent that these
details have previously been disclosed under Rule 8. A Dealing
Disclosure by a person to whom Rule 8.3(b) applies must be made by
no later than 3.30 pm (London time) on the business day following
the date of the relevant dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of an offeree company or a paper
offeror, they will be deemed to be a single person for the purpose
of Rule 8.3.
Opening Position Disclosures must also be made by the offeree
company and by any offeror and Dealing Disclosures must also be
made by the offeree company, by any offeror and by any persons
acting in concert with any of them (see Rules 8.1, 8.2 and
8.4).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Panel's website at www.thetakeoverpanel.org.uk, including
details of the number of relevant securities in issue, when the
offer period commenced and when any offeror was first identified.
If you are in any doubt as to whether you are required to make an
Opening Position Disclosure or a Dealing Disclosure, you should
contact the Panel's Market Surveillance Unit on +44 (0)20 7638
0129.
Publication on Giles website
A copy of this announcement will be available free of charge,
subject to certain restrictions relating to persons resident in
restricted jurisdictions, for inspection on the Giles website at
www.gilesinsurance.co.uk
Neither the contents of Giles' website nor the contents of any
website accessible from hyperlinks on such website (or any other
website) is incorporated into, or forms part of, this announcement
nor, unless previously published by means of a recognised
information service, should any such content be relied upon in
reaching a decision regarding the matters referred to in this
announcement.
APPENDIX I
PART A: CONDITIONS OF THE OFFER
The Offer which will be made by Giles will comply with the Code.
The Offer, any acceptances made under it and any dispute or claim
arising out of, or in connection with, it (whether contractual or
non contractual in nature) will be governed by, and construed in
accordance with, English law and be subject to the jurisdiction of
the courts of England. The Offer will be made on the terms and
conditions set out in this announcement.
CONDITIONS OF THE OFFER
The Offer will be subject to the following conditions:
(a) valid acceptances being received (and not, where permitted,
withdrawn) by 1.00 pm (London time) on 24 August 2011 (or such
later time(s) and/or date(s) as Giles may, subject to the rules of
the Code, decide) in respect of not less than 90 per cent. (or such
lesser percentage as Giles may decide) in nominal value of the CBG
Shares to which the Offer relates and of the voting rights attached
to those shares, provided that this condition will not be satisfied
unless Giles and/or any of its wholly owned subsidiaries shall have
acquired or agreed to acquire, whether pursuant to the Offer or
otherwise, directly or indirectly CBG Shares carrying, in
aggregate, more than 50 per cent. of the voting rights then
exercisable at a general meeting of CBG, including for this purpose
to the extent (if any) required by the Panel, any such voting
rights attaching to any CBG Shares that may be 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:
(i) the expression "CBG Shares to which the Offer relates" shall
be construed in accordance with sections 974 to 991 of the 2006
Act;
(ii) the expression "shares that may be unconditionally allotted
or issued" shall include any treasury shares which are
unconditionally transferred or sold by CBG; and
(iii) shares which have been unconditionally allotted but not
issued shall be deemed to carry the voting rights which they will
carry on being entered into the register of members of CBG;
(b) the Office of Fair Trading indicating, in terms satisfactory
to Giles, that it is not its intention to refer the proposed
acquisition of CBG by Giles or any matter arising therefrom to the
Competition Commission;
(c) in respect of each notice under section 178 of FSMA which
Giles is under a duty to give in connection with the
Acquisition:
(i) the FSA notifying Giles pursuant to section 189(4)(a) or
189(7) of FSMA that it has determined to approve the acquisition by
Giles of, or increase in control by Giles over, each member of the
Wider CBG Group which is a UK authorised person (as that expression
is defined in section 191G of FSMA) pursuant to section 185 of FSMA
on terms reasonably satisfactory to the Giles Group; or
(ii) the FSA being treated, under section 189(6) of FSMA, as
having approved each such acquisition of or increase in
control;
(d) each Relevant Regulator having approved or being deemed to
have approved, in terms reasonably satisfactory to Giles, the
acquisition by Giles of control over CBG and any member of the
Wider CBG Group which is authorised or regulated by any Relevant
Regulator, either unconditionally or subject to the fulfilment of
conditions or obligations reasonably acceptable to Giles;
(e) no government or governmental, quasi governmental,
supranational, statutory, administrative or regulatory body
(including any Relevant Regulator), authority, court, trade agency,
association, institution, environmental or investigative body or
any other person or body in any jurisdiction (each a "Relevant
Authority") having decided to take, instituted, implemented or
threatened any action, proceedings, suit, investigation, enquiry or
reference, or made, proposed or enacted any statute, regulation,
order or decision or taken any other steps and there not continuing
to be outstanding any statute, regulation, order or decision, which
would or might:
(i) make the Offer or the acquisition of any CBG Shares, or
control of CBG by Giles void, illegal or unenforceable or otherwise
restrict, restrain, prohibit, delay or interfere with the
implementation thereof, or impose additional conditions or
obligations with respect thereto, or require material amendment
thereof or otherwise challenge or interfere therewith;
(ii) require, materially delay or prevent the divestiture (or
alter the terms of any proposed divesture) by CBG or any member of
the Wider CBG Group or any member of the Wider Giles Group of all
or any material portion of their respective businesses, assets or
property or impose any material limitation on the ability of any of
them to conduct their respective businesses or own any of their
assets or property;
(iii) impose any material limitation on or result in a material
delay in the ability of any member of the Wider CBG Group or the
Wider Giles Group to acquire or to hold or to exercise effectively
any rights of ownership of shares or loans or securities
convertible into shares in any member of the Wider CBG Group or of
the Wider Giles Group held or owned by it or to exercise management
control over any member of the Wider CBG Group or of the Wider
Giles Group;
(iv) require any member of the Wider Giles Group or the Wider
CBG Group to acquire or offer to acquire any shares or other
securities in any member of the Wider CBG Group (other than as a
result of implementation of the Offer);
(v) result in any member of the Wider Giles Group or the Wider
CBG Group ceasing to be able to carry on its business;
(vi) result in the refusal, withholding, suspension, withdrawal,
cancellation, termination or modification in whole or in part of
any licence, authority, permission or package held or enjoyed by
any member of the Wider CBG Group which is necessary for the proper
carrying on of its business or the imposition of any conditions,
restrictions or limitations upon such licence, authority,
permission or privilege which would materially inhibit the exercise
thereof;
(vii) otherwise materially and adversely affect the assets,
business, profits, financial or trading position, or prospects of
any member of the Wider Giles Group or of any member of the Wider
CBG Group; or
(viii) all applicable waiting and other time periods during
which any such Relevant Authority could decide to take, institute,
implement or threaten any such action, proceeding, suit,
investigation, enquiry or reference having expired, lapsed or been
terminated;
(f) all necessary notifications and filings having been made,
all applicable waiting periods (including any extensions thereof)
under any applicable legislation or regulations of any jurisdiction
having expired, lapsed or been terminated, in each case in respect
of the Offer and the acquisition of any CBG Shares, or of control
of CBG, by Giles, and all authorisations, orders, recognitions,
grants, consents, licences, confirmations, clearances, permissions
and approvals ("Authorisations") necessary or appropriate in any
jurisdiction for, or in respect of, the Offer and the proposed
acquisition of any CBG Shares, or of control of CBG, by Giles and
to carry on the business of any member of the Wider Giles Group or
of the Wider CBG Group having been obtained, in terms and in a form
satisfactory to Giles, from all appropriate Relevant Authorities
and from any persons or bodies with whom any member of the Wider
Giles Group or the Wider CBG Group has entered into contractual
arrangements in each case the absence of which would have a
material adverse effect on the Wider CBG Group, and all such
Authorisations remaining in full force and effect at the time at
which the Offer becomes unconditional in all respects and Giles
having no knowledge of an intention or proposal to revoke, suspend
or modify or not to renew any of the same and all necessary
statutory or regulatory obligations in any jurisdiction having been
complied with;
(g) except as Fairly Disclosed, there being no provision of any
arrangement, agreement, licence, permit or other instrument to
which any member of the Wider CBG Group is a party or by or to
which any such member or any of their assets is or may be bound,
entitled or be subject to and which, in consequence of the Offer or
the acquisition or proposed acquisition of any CBG Shares, or
control of CBG, by Giles or otherwise, would or might, result in
(in any case to an extent which is or would be material in the
context of the Wider CBG Group taken as a whole):
(i) any monies borrowed by, or other indebtedness (actual or
contingent) of, any such member of the Wider CBG Group being or
becoming repayable or being capable of being declared immediately
repayable or repayable prior to its or their stated maturity or the
ability of any such member to borrow monies or incur any
indebtedness being inhibited or becoming capable of being
withdrawn;
(ii) the creation or enforcement of any mortgage, charge or
other security interest over the whole or any part of the business,
property or assets of any such member or any such security
(whenever arising or having arisen) being enforced or becoming
enforceable;
(iii) any such arrangement, agreement, licence or instrument
being terminated or adversely modified or any action being taken of
an adverse nature or any obligation or liability arising
thereunder;
(iv) any assets or interests of any such member being disposed
of or charged, or right arising under which any such asset or
interest could be required to be disposed of or charged, other than
in the ordinary course of business;
(v) the interest or business of any such member in or with any
firm or body or person, or any agreements or arrangements relating
to such interest or business, being terminated or adversely
modified or affected;
(vi) any such member ceasing to be able to carry on business
under any name under which it presently does so;
(vii) the creation of liabilities (actual or contingent) by any
such member;
(viii) the value of or financial or trading position of any such
member being prejudiced or adversely affected, and no event having
occurred which, under any provision of any arrangement, agreement
licence or other instrument to which any member of the Wider CBG
Group is a party; or
(ix) to which any such member or any of its assets may be bound,
entitled or subject, could reasonably be expected to result in any
of the events or circumstances as are referred to in paragraphs (i)
to (viii) of this condition (g) to an extent which is material in
the context of the Wider CBG Group, taken as a whole;
(h) except as Fairly Disclosed, no member of the Wider CBG Group
having, since 31 December 2010:
(i) issued, agreed to issue, authorised or proposed the issue of
additional shares or securities of any class, or securities
convertible into, or exchangeable for or rights, warrants or
options to subscribe for or acquire, any such shares, securities or
convertible securities (save as between CBG and wholly owned
subsidiaries of CBG and save for options granted, and for any CBG
Shares allotted upon exercise of options granted under the CBG
Enterprise Management Incentive Scheme before 2 August 2011, or
redeemed, purchased or reduced any part of its share capital (or
announced any proposal to do so);
(ii) sold or transferred or agreed to sell or transfer any
treasury shares;
(iii) recommended, declared, paid or made or proposed to
recommend, declare, pay or make any bonus, dividend or other
distribution other than to CBG or a wholly-owned subsidiary of
CBG;
(iv) agreed, authorised, proposed or announced its intention to
propose any merger or demerger or acquisition or disposal of assets
(or any right, title or interest in any asset) or shares (other
than in the ordinary course of trading) or to any material change
in its share or loan capital;
(v) issued, authorised or proposed the issue of any debentures
or incurred or increased any indebtedness or contingent
liability;
(vi) acquired or disposed of or transferred, mortgaged or
encumbered any asset or any right, title or interest in any asset
(other than in the ordinary course of trading);
(vii) entered into or varied or announced its intention to enter
into or vary any contract, arrangement or commitment (whether in
respect of capital expenditure or otherwise) which is of a long
term or unusual nature or involves or could involve an obligation
of a material nature or magnitude;
(viii) entered into or proposed or announced its intention to
enter into any reconstruction, amalgamation, scheme, commitment or
other transaction or arrangement (otherwise than in the ordinary
course of business);
(ix) taken any action nor having had any steps taken or legal
proceedings started or threatened against it for its winding up or
dissolution or for it to enter into any arrangement or composition
for the benefit of its creditors, or for the appointment of a
receiver, administrator, trustee or similar officer of it or any of
its assets (or any analogous proceedings or appointment in any
overseas jurisdiction);
(x) been unable, or admitted in writing that it is unable, to
pay its debts or having stopped or suspended (or threatened to stop
or suspend) payment of its debts generally or ceased or threatened
to cease carrying on all or a substantial part of its business;
(xi) entered into or varied or made any offer to enter into or
vary the terms of any service agreement or arrangement with any of
the directors of CBG;
(xii) waived, compromised or settled any claim which is material
in the context of the Wider CBG Group;
(xiii) entered into any contract, transaction or arrangement
which would be restrictive on the business of any member of the
Wider CBG Group, other than to a nature and extent which is normal
in the context of the business concerned; or
(xiv) entered into any agreement, arrangement or commitment or
passed any resolution with respect to any of the transactions or
events referred to in this condition (h);
(i) since 31 December 2010, except as Fairly Disclosed:
(i) there having been no material adverse change or
deterioration in the business, assets, financial or trading
position or profits or prospects of any member of the Wider CBG
Group;
(ii) no litigation, arbitration proceedings, mediation
proceedings, prosecution or other legal proceedings having been
instituted, announced or threatened by or against or remaining
outstanding against any member of the Wider CBG Group and no
enquiry or investigation by or complaint or reference to any
Relevant Authority against or in respect of any member of the Wider
CBG Group having been threatened, announced or instituted or
remaining outstanding which in any case is material in the context
of the Wider CBG Group;
(iii) no contingent or other liability having arisen or been
incurred which might reasonably be expected to adversely affect any
member of the Wider CBG Group; and
(iv) no steps having been taken which are likely to result in
the withdrawal, cancellation, termination or modification of any
licence held by any member of the Wider CBG Group which is
necessary for the proper carrying on of its business;
(j) Giles not having discovered that, save as Fairly
Disclosed:
(i) the financial, business or other information concerning the
Wider CBG Group which has been disclosed at any time by or on
behalf of any member of the Wider CBG Group whether publicly (by
the delivery of an announcement to a Regulatory Information
Service) or to Giles or its professional advisers, either contains
a misrepresentation of fact or omits to state a fact necessary to
make the information contained therein not misleading;
(ii) any member of the Wider CBG Group is subject to any
liability, contingent or otherwise, which is not disclosed in the
annual report and accounts of CBG for the financial year ended 31
December 2010;
(iii) any past or present member of the Wider CBG Group has not
complied with all applicable legislation or regulations of any
jurisdiction or any notice or requirement of any Relevant Authority
with regard to the use, storage, disposal, discharge, transport,
treatment, handling, release, spillage, leak or emission of any
waste or hazardous substance or any substance likely to impair the
environment or harm human or animal health which non-compliance
would be likely to give rise to any liability (whether actual or
contingent) on the part of any member of the Wider CBG Group;
(iv) there is or is likely to be any obligation or liability
(whether actual or contingent) to make good, repair, reinstate or
clean up any property now or previously owned, occupied or made use
of by any past or present member of the Wider CBG Group or in which
any such member may now or previously have had an interest under
any environmental legislation or regulation or notice, circular or
order of any Relevant Authority in any jurisdiction;
(v) circumstances exist whereby a person or class of persons
would be likely to have any claim or claims in respect of any
product or process of manufacture, or materials used therein, now
or previously manufactured, sold or carried out by any past or
present member of the Wider CBG Group which claim or claims would
be likely to affect adversely any member of the Wider CBG Group,
which in each case is material in the context of the Wider CBG
Group;
(vi) that any member of the Wider CBG Group or any other entity
in which any member of the Wider CBG Group has a significant
economic interest and which is not a subsidiary of CBG (as
applicable) is subject to any liability (contingent or otherwise)
which is material in the context of the Wider CBG Group taken as a
whole; or
(vii) there is any information which affects the import of any
information disclosed at any time by or on behalf of any member of
the Wider CBG Group and which is material in the context of the
Wider CBG Group taken as a whole;
(k) the passing at the General Meeting (or any adjournment
thereof) of the Resolution approving the Management Arrangements by
Independent Shareholders (as detailed in Paragraphs 9 and 10 in the
announcement above).
Giles reserves the right to waive, in whole or in part, all or
any of conditions (b) to (j) inclusive. If Giles is required by the
Panel to make an offer for CBG Shares under the provisions of Rule
9 of the Code, Giles may make such alterations to the above
conditions, including condition (a), as are necessary to comply
with the provisions of that Rule.
Except with the consent of the Panel, the Offer will lapse
unless the conditions set out above (other than condition (a) to
the Offer) are fulfilled or (if capable of waiver) waived or, where
appropriate, have been determined by Giles in its reasonable
opinion to be or to remain satisfied by no later than 21 days after
the later of 24 August 2011 or the date on which the Offer becomes
or is declared unconditional as to acceptances, or such later date
as Giles may, with the consent of the Panel, decide. Giles shall be
under no obligation to waive or treat as satisfied any of
conditions (b) to (j) inclusive by a date earlier than the latest
date specified above for the satisfaction thereof notwithstanding
that the other conditions of the Offer may at such earlier date
have been waived or fulfilled or satisfied and that there are at
such earlier date no circumstances indicating that any of such
conditions may not be capable of fulfilment or satisfaction.
The Offer will lapse if it is referred to the Competition
Commission before 1.00 pm (London time) on the later of 24 August
2011 or the date on which the Offer becomes or is declared
unconditional as to acceptances. If the Offer so lapses the Offer
will cease to be capable of further acceptance and accepting CBG
Shareholders and Giles will cease to be bound by acceptances
received before the time when the Offer lapses.
PART B
CERTAIN FURTHER TERMS OF THE OFFER
The Offer will lapse if the proposed acquisition of CBG by Giles
is referred to the Competition Commission before 1.00 p.m. on the
first closing date of the Offer or the date when the Offer becomes
or is declared unconditional as to acceptances, whichever is the
later. In such circumstances, the Offer will cease to become
capable of further acceptance and accepting CBG Shareholders and
Giles shall cease to be bound by acceptances delivered on or before
the date on which the Offer so lapses.
Giles reserves the right to make such changes to the above
conditions as may be appropriate in the event that the conditions
of the Offer are required to be amended to comply with Rule 9 of
the Code.
The Offer will be made on the terms and will be subject to the
conditions which are set out in this Appendix 1, those terms which
will be set out in the Offer Document and the Form of Acceptance
and such further terms as may be required to comply with the
provisions of the Code. This announcement does not constitute an
offer or invitation to purchase any securities.
The Offer will be governed by English law and subject to the
jurisdiction of the English courts and to the conditions and
further terms set out below and to be set out in the Offer Document
and Form of Acceptance.
APPENDIX II
PART A: SOURCES AND BASES OF INFORMATION
Save as otherwise stated, the following constitute the sources
and bases of certain information referred to in this
announcement:
(i) Unless otherwise stated:
(a) the financial information relating to CBG stated as at or in
respect of the period ended 31 December 2010, 31 December 2009, and
31 December 2008 is extracted from the audited financial statements
for CBG for the years ended 31 December 2010, 31 December 2009 and
31 December 2008;
(b) the financial information relating to Giles stated as at or
in respect of the period ended 31 August 2010, 31 August 2009 and
31 August 2008 is extracted from the audited financial statements
for Giles for the years ended 31 August 2010 and 31 August
2009.
(ii) As at the close of business on 2 August 2011 (being the
latest Dealing Date immediately prior to the publication of this
announcement), CBG had in issue 15,878,753 ordinary shares of 4
pence each.
(iii) Unless otherwise stated, all prices quoted for CBG Shares
are closing midmarket prices and are derived from the AIM Appendix
and represent the closing middle price on the relevant date.
(iv) All share prices are expressed in pence.
(v) The information relating to the CBG Group has been provided
by the CBG Directors.
(vi) The terms of the Offer value the entire issued and to be
issued share capital of CBG at approximately GBP5.1 million, based
on 15,878,753 CBG Shares as a result of options granted pursuant to
the CBG Enterprise Management Incentive Schemes being exercisable
at a price in excess of the Offer Price.
(vii) There has been no material change in any information
published by Giles or CBG since the start of the Offer Period.
PART B: IRREVOCABLE UNDERTAKINGS AND LETTERS OF INTENT TO ACCEPT
THE OFFER
CBG Directors
Giles has received irrevocable undertakings to accept, or
procure the acceptance of, the Offer in respect of 1,444,671 CBG
Shares in aggregate in which the CBG Directors and certain of their
spouses have a beneficial interest, representing approximately 9.1
per cent. of the issued share capital of CBG.
In this regard, Robin Slinger, Janet Slinger, Michael Askew,
Martyn Hughes, Suzanne Hughes, Stephen Rees, Stuart Mollekin, David
Worsley and Carol Worsley have agreed to irrevocably undertake to
accept or procure the acceptance of the Offer.
CBG Shares subject
to
irrevocable undertakings
Percentage
Number of of CBG issued
Directors: CBG Shares share capital
Robin Slinger* 45,000 0.3
Janet Slinger 116,181 0.7
Michael Askew 373,422 2.4
Martyn Hughes* 26,179 0.2
Suzanne Hughes 12,500 0.1
Stephen Rees 333,437 2.1
Stuart Mollekin* 140,366 0.9
David Worsley* 322,586 2.0
Carol Worsley 75,000 0.5
1,444,671 9.1
* Independent Directors
The above irrevocable undertakings from the CBG Directors and
certain of their spouses remain binding unless the Offer lapses or
is withdrawn.
Shareholders
Giles has also received irrevocable undertakings from
Shareholders to accept, or procure the acceptance of, the Offer, in
respect of in aggregate 4,692,521 CBG Shares, representing
approximately 29.6 per cent of the issued share capital of CBG:
CBG Shares subject
to
irrevocable undertakings
Percentage
Number of of CBG issued
Shareholders: CBG Shares share capital
Octopus Investments Limited 1,989,341 12.5
Texas Holdings Limited 1,703,180 10.7
Polar Capital LLP 1,000,000 6.3
4,692,521 29.6
The above irrevocable undertakings will cease to be binding only
if (i) the Offer Document has not been posted within 28 days after
the announcement of the Offer (or within such longer period as may
be agreed by the Panel); (ii) the Offer lapses or is withdrawn; or
in the case of the irrevocable undertakings from Octopus
Investments Limited and Polar Capital LLP (iii) a Higher Competing
Offer is received and Giles has not within three Business Days of
the announcement of the Higher Competing Offer announced a firm
intention to revise the terms of the Offer so that the value of the
revised Offer is no less favourable than the value of the
consideration under such Higher Competing Offer.
Non-binding letters of intent to accept the Offer have been
provided by Laurence Andrew Turnbull who has a beneficial interest
in 1,252,942 CBG Shares and Allianz Insurance plc which has a
beneficial interest in 675,000 CBG Shares.
Accordingly, the number of CBG Shares in respect of which
irrevocable undertakings and letters of intent have been received
is, in aggregate, 8,065,134, representing approximately 50.8 per
cent. of the issued share capital of CBG. The shares the subject of
these irrevocable undertakings and letters of intent equate to
approximately GBP2.6 million of the Offer Value.
APPENDIX III
DEFINITIONS
2006 Act the Companies Act 2006 (as amended,
modified, consolidated, re-enacted
or replaced from time to time)
Acquisition the acquisition of the entire issued
and to be issued share capital of
CBG by Giles
AIM AIM, a market operated by the London
Stock Exchange
AIM Appendix the AIM appendix to the daily official
list of London Stock Exchange
AIM Rules rules and responsibilities in relation
to AIM companies
Altium Altium Capital Limited
Annual Report a comprehensive report on a company's
activities throughout the preceding
year
Board as the context requires, the board of
directors of CBG, or the board of
directors of Giles and the terms "CBG
Board", "Giles Board" and "Boards"
shall be construed accordingly
Business Day any day (other than a public holiday,
Saturday or Sunday) on which clearing
banks in London are open for normal
business
CBG CBG Group plc
CBG Board or CBG Directors Robin Slinger
or the Board of Directors (Non-executive Chairman)
of CBG Michael Askew (Group
Managing Director) Martyn
Hughes (Group Finance
Director) Stephen Rees
(Financial Services
Operations) Stuart Mollekin
(Non-executive Director)
David Worsley
(Non-executive Director)
CBG Enterprise Management the CBG Group plc Enterprise Management
Incentive Scheme Incentive Scheme 2003
CBG Group CBG and its subsidiaries and subsidiary
undertakings
CBG Shareholders or the Shareholders of CBG includes:
Shareholders (a) the existing unconditionally
allotted or issued and fully paid
ordinary shares of 4 pence each
in the capital of CBG; and (b)
any further ordinary shares of 4
pence each in the capital of CBG
which are unconditionally
allotted or issued and fully paid
before the Offer closes or before
such earlier date as Giles
(subject to the Code) may
determine, not being earlier than
the date on which the Offer
becomes or is declared
unconditional as to acceptances,
CCP Charterhouse Capital Partners LLP,
a limited liability partnership
incorporated in England and Wales
with registered number OC306266
CCP VIII Fund the relevant CCP fund from which
funds will be drawn down for the
purpose of the Acquisition
CGP VIII Charterhouse General Partners (VIII)
Limited, a private company incorporated
in England and Wales with registered
number 02290328 the general partner of
CCP VIII Fund
Charterhouse CCP and predecessor entitites carrying
on private equity investment business
under the name "Charterhouse"
Closing Price in the case of CBG Shares, the closing
middle market quotation of a CBG
Share as derived from the AIM Appendix
Code the City Code on Takeovers and Mergers
Daily Official List an official list of share prices
produced every day by the London
Stock Exchange
Dealing Day a day on which stock exchanges and
trading facilities are generally
open for business
Dealing Disclosure required after the person concerned
deals in relevant securities of
any party to the Offer
DMWSL 586 DMWSL 586 Limited, a private company
incorporated in England and Wales
with registered number 06475827,
which is an indirect wholly owned
subsidiary of Expectrum
Expectrum or Expectrum Expectrum Limited, a company
Limited incorporated in England and Wales with
registered number 06475825 and the
ultimate parent company of Giles
Expectrum Directors Chris Giles, Paul Matson, Frank
van den Bosch and Robert Leeming
Fairly Disclosed fairly disclosed in the Annual Report,
or as publicly announced by or on
behalf of CBG through a Regulatory
Information Service before the date
of the Offer Document
Form of Acceptance in respect of holders of CBG Shares
in certificated form, the form of
acceptance and authority relating
to the Offer
Form of Proxy the form of proxy for use by
Independent Shareholders in respect of
the General Meeting
FSA the Financial Services Authority of the
UK and any successor authorities
FSMA the Financial Services and Markets
Act 2000 (as amended)
General Meeting the general meeting of CBG to be
held at 10.30 a.m. on 24 August
2011 at which the Resolution will
be put to Independent Shareholders
(and any adjournment thereof)
Giles Giles Insurance Brokers Limited
Giles Directors George Prescott (Non-executive
Chairman) Chris Giles (Chief Executive
Officer) Sarah Lyons (Group Managing
Director) Mark Chambers (Finance
Director) Hazel McIntyre (Mergers &
Acquisitions) Matthew Scales
(Non-executive Director)
Giles Group Expectrum and its subsidiary
undertakings
Higher Competing Offer a person announcing a firm intention
(in accordance with Rule 2.5 of the
Code) to make an offer to acquire CBG
at a price per ordinary share which is
above the value of the Offer as most
recently revised and, in case of the
irrevocable undertakings granted by
Polar Capital LLP, which is 35 pence or
more
Independent Directors the CBG Directors with the exception
of Michael Askew and Stephen Rees
Independent Shareholders all shareholders other than Michael
Askew, Stephen Rees and any member
of the Giles Group and any person
acting or deemed to be acting in
concert with Giles
Inducement Fee and the inducement fee and non-solicitation
Non-Solicitation Agreement agreement between CBG and Giles
dated 14 June 2011 and restated
on 25 July 2011 and 2 August 2011
London Stock Exchange London Stock Exchange plc
Management Arrangements the arrangements described in paragraph
9 of this announcement relating
to Michael Askew along with various
other members of the senior management
of CBG
Member account ID the identification code or number
attached to any member account in
CREST
Offer the recommended offer made by Giles
to acquire the entire issued and
to be issued share capital of CBG
on the terms and subject to the
conditions set out in the Offer
Document including, where the context
so requires, any subsequent revision,
variation, extension, or renewal
of such Offer
Offer Document the document to be despatched to
CBG Shareholders and others by Giles,
containing amongst other things,
the Offer and certain information
about CBG and Giles
Offer Period the period
commencing on
(and including)
19 July 2011
until whichever
of the
following of
the times and
dates shall be
the latest: (a)
1.00 p.m.
(London time)
on 24 August
2011; and (b)
The earlier of:
the time and
date at which
the Offer
lapses; or the
time and date
at which the
Offer becomes
unconditional
Offer Price 32 pence per CBG Share
Offer Value approximately GBP5.1m at 32 pence
per CBG Share
Official List the Daily Official List of the London
Stock Exchange
Opening Position Disclosure an announcement containing details
of interests or short positions
in, or rights to subscribe for,
any relevant securities of a party
to the offer if the person concerned
has such a position
Overseas Shareholders Shareholders (or nominees of, or
custodians or trustees for
Shareholders) resident in, ordinarily
resident in, located in or citizens of
jurisdictions outside the United
Kingdom
Panel the Panel on Takeovers and Mergers
Press Announcement this announcement
Regulations the Uncertificated Securities
Regulations 2001 (SI 2001 No. 3755)
Regulatory Information any information service authorised from
Service time to time by the FSA for the purpose
of disseminating regulatory
announcements
Relevant Regulator in respect of CBG or any member of the
Wider CBG Group, each and any
regulatory authority to the supervision
and/or authorisation of which it is
subject whether statutory,
self-regulatory or otherwise,
including, without limitation, the FSA,
any settlement system, stock exchange
or listing authority
Resolution the ordinary resolution to be put
to the Independent Shareholders
at the General Meeting to approve
the Management Arrangements pursuant
to Rule 16 of the Code
Restricted Jurisdiction each of the United States, Canada,
Australia and Japan
Shareholders holders of CBG Shares
subsidiary and subsidiary the meaning given to these terms
undertakings in the 2006 Act
treasury shares any CBG Shares held by CBG as treasury
shares
UK or United Kingdom the United Kingdom of Great Britain and
Northern Ireland (and its dependent
territories)
Wider CBG Group CBG and each of its subsidiaries,
subsidiary undertakings and associated
undertakings (including any joint
venture, partnership, firm or company
in which any member of the CBG Group
is interested or any undertaking)
in which any of such companies or
undertakings have a significant
interest
Wider Giles Group Expectrum and each of its subsidiaries,
subsidiary undertakings and associated
undertakings (including any joint
venture, partnership, firm or company
in which any member of the Giles Group
is interested or any undertaking) in
which any of such companies or
undertakings have a significant
interest
Zeus Capital Zeus Capital Limited
All references to time in this announcement are to London
time.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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