RNS Number:3467D
CMG PLC
05 November 2002
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN, INTO OR FROM AUSTRALIA, CANADA
OR JAPAN
5 November 2002
LOGICA PLC ("LOGICA") AND CMG PLC ("CMG")
PROPOSED MERGER OF LOGICA AND CMG
Merger highlights
The boards of Logica and CMG announce that they have unanimously agreed the
terms of a recommended merger to create LogicaCMG. Upon completion of the
Merger, Logica Shareholders will hold 60 per cent. and CMG Shareholders 40 per
cent. of the issued ordinary share capital of LogicaCMG.
The Merger creates:
O The number two European quoted IT services company;
O A global force in wireless messaging and payments software; and
O An Enlarged Group with pro forma combined turnover of over #2 billion for
the 12 months ended 30 June 2002.
Including annualised cost savings, the Merger is expected to be substantially
earnings enhancing (pre-exceptional items and goodwill) for Logica and CMG
Shareholders in the year ending 31 December 2003.*
At 30 June 2002, the Enlarged Group had some 24,000 employees worldwide and
operations in 34 countries. Combined, Logica and CMG have complementary
geographical coverage, customers and key competencies, with a similar industry
focus. Together, they create a powerful platform for enhanced future growth.
IT services
LogicaCMG will have a leading position in IT services in European markets, with
a broad coverage of blue-chip customers across key industry sectors and an
improved position with central government customers.
Strong geographic fit
O Major player in the UK and Benelux markets;
O Critical mass in Germany and France;
O Strengthened presence in Asia Pacific; and
O A strong global network.
Complementary customers and similar industry focus
O Enhanced IT services offering as a result of combining Logica's
and CMG's vertical market expertise, particularly in the public sector,
telecoms, financial services, energy & utilities and industry, distribution &
transport sectors; and
O Broader customer coverage across a high quality, complementary
customer base with limited overlap, offering opportunities for cross-selling.
Key competencies
O Improved position in consulting, systems integration, business
process outsourcing and applications management; and
O Better placed to provide added-value services to multi-national
customers.
Wireless telecoms
The Merger creates a strengthened global player in the rapidly evolving wireless
messaging and payments software industry:
O Provides a stronger competitive position in new generation
technologies, including multi-media messaging, unified communications, wireless
Internet and mobile payments;
O Increases the overall customer base, with limited overlap,
providing cross-selling opportunities on a global basis; and
O Provides an opportunity to optimise returns from research &
development expenditure and to rationalise marketing, sales, distribution and
back office activities.
Synergies, financial benefits and integration planning
It is expected that the annualised operational cost savings available to
LogicaCMG will amount to approximately #60 million.** Approximately half of the
cost savings benefit is expected to be realised during the financial year ending
31 December 2003 and all of the benefit in the financial year ending 31 December
2004. The total cost of achieving these savings is expected to be some #80
million.
A major priority of the board and management of LogicaCMG will be to achieve a
successful integration of Logica and CMG that preserves the key strengths of the
culture, management and business practices of each group and allows the
efficient realisation of the expected cost savings. The overall integration
strategy has been formulated between the two management teams and detailed
planning is underway in preparation for rapid implementation following
completion of the Merger. As part of this process, appropriate consultations
will be made with staff and employee representative bodies in the relevant
jurisdictions.
Board and management
The board of LogicaCMG will be a balanced mix of Logica and CMG executive
directors. Cor Stutterheim will be Non-Executive Chairman, Helmut Mamsch will
be Deputy Chairman and Martin Read will be Group Chief Executive of LogicaCMG.
Seamus Keating will be Group Finance Director of LogicaCMG, Jim McKenna will be
Chief Executive of the UK and Ireland, Alistair Crawford will be Chief Executive
of Mainland Europe and Ian Taylor will be Group Human Resources Director.
Transaction structure and timetable
The Merger will be effected by way of a scheme of arrangement of CMG under
section 425 of the Companies Act. It is expected that formal documentation
relating to the Merger will be despatched to shareholders of Logica and CMG
shortly and it is anticipated that the Merger will be completed before the end
of the current calendar year.
LogicaCMG will continue to be listed on the London Stock Exchange and will apply
for a secondary listing on Euronext Amsterdam, effective on completion of the
Merger.
Commenting on the Merger, Cor Stutterheim, Executive Chairman of CMG said:
"I am delighted that CMG and Logica are joining forces to create one of Europe's
foremost providers of IT services with a particularly complementary presence in
wireless telecoms. Both companies have excellent reputations, blue-chip
customers and talented staff. Together we will be a more powerful force,
capable of delivering significant additional value for the benefit of
shareholders, customers and employees."
Martin Read, Chief Executive of Logica said:
"Bringing Logica and CMG together will create a powerhouse in IT services and
wireless telecoms. The new company will combine Logica's leadership in project
management and strategic focus on repeatable solutions with CMG's exceptional
customer management skills. Both companies share a common ambition, vision and
commitment to future success. Together, they create a powerful platform for
enhanced future growth."
This summary should be read in conjunction with the full text of the attached
announcement.
A presentation to analysts regarding the Merger will be held today at 9.00 a.m.
for 9.30 a.m. at the Merrill Lynch Financial Centre, 2 King Edward Street,
London, EC1A 1HQ. There will be a live webcast of the presentation available
from both companies' websites.
There will be a newswire conference call at 7.30 a.m. Please contact The
Maitland Consultancy (020 7379 5151) or Will Cameron (020 7446 1786) for dial-in
details. A press conference will be held at 11.45 a.m., also at Merrill Lynch.
High resolution images are available for the media to view and download free of
charge from www.vismedia.co.uk.
Enquiries:
LOGICA CMG
Will Cameron Tel: 020 7446 1786 Tony Richards Tel: 020 7592 4442
Richard Porter Tel: 020 7446 4616 Heleen Kamerman Tel: +31 20 6720 444
Merrill Lynch Tel: 020 7628 1000 Goldman Sachs Tel: 020 7774 1000
Bob Wigley Richard Campbell-Breeden
Tim Pratelli, Corporate Huw Williams
Broking
Andrew Congleton
Close Brothers Tel: 020 7655 3100 ABN AMRO Tel: 020 7678 8000
Stephen Aulsebrook Nigel Turner
Simon Willis Jitesh Gadhia
ING Barings Tel: 020 7767 1000 Hoare Govett Tel: 020 7678 8000
Michael Whealon Bob Pringle
Xavier Moreels Charles Lytle
UBS Warburg Tel: 020 7567 8000 Citigate Dewe Rogerson Tel: 020 7638 9571
Tim Waddell Toby Mountford
Sebastian Hoyle
The Maitland Consultancy Tel: 020 7379 5151 Citigate First Financial Tel: +31 20 5754 010
Colin Browne Marise Blom
Angus Maitland Frits Hendrix
* The statement that the Merger is expected to be earnings enhancing for Logica
and CMG should not be interpreted to mean that the earnings per share in the
financial year following the Merger, or in any subsequent period, will
necessarily be greater than those for the relevant preceding financial period.
** The expected operating cost savings have been calculated on the basis of the
existing cost and operating structures of the companies and by reference to
current prices and exchange rates and the current regulatory environment. These
statements of estimated cost savings and one-off costs for achieving them relate
to future actions and circumstances which, by their nature, involve risks,
uncertainties and other factors. Because of this, the cost savings referred to
may not be achieved, or those achieved could be materially different from those
estimated. This statement should not be interpreted to mean that the earnings
per share in the financial year following the Merger, or in any subsequent
period, will necessarily be greater than those for the relevant preceding
financial period.
Merrill Lynch is acting for Logica and no-one else in connection with the Merger
and will not be responsible to anyone other than Logica for providing the
protections afforded to clients of Merrill Lynch or for providing advice in
relation to the Merger.
Close Brothers is acting for Logica and no-one else in connection with the
Merger and will not be responsible to anyone other than Logica for providing the
protections afforded to clients of Close Brothers or for providing advice in
relation to the Merger.
ING Barings is acting for Logica and no-one else in connection with the Merger
and will not be responsible to anyone other than Logica for providing the
protections afforded to clients of ING Barings or for providing advice in
relation to the Merger.
UBS Warburg is acting as joint broker for Logica and no-one else in connection
with the Merger and will not be responsible to anyone other than Logica for
providing the protections afforded to clients of UBS Warburg or for providing
advice in relation to the Merger.
Goldman Sachs International is acting for CMG and no-one else in connection with
the Merger and will not be responsible to any other person for providing the
protections afforded to clients of Goldman Sachs International or for providing
advice in relation to the Merger.
ABN AMRO is acting for CMG and no-one else in connection with the Merger and
will not be responsible to any other person for providing the protections
afforded to clients of ABN AMRO or for providing advice in relation to the
Merger.
ABN AMRO Bank N.V. is acting for Logica as the listing agent in connection with
the application to Euronext Amsterdam and as the share exchange agent in
connection with the exchange of CMG Shares into LogicaCMG Shares and will not be
responsible to anyone other than Logica for providing the protections afforded
to clients of ABN AMRO Bank N.V. in relation to its role as listing and share
exchange agent.
Hoare Govett is acting as broker for CMG and no-one else in connection with the
Merger and will not be responsible to anyone other than CMG for providing the
protections afforded to clients of Hoare Govett or for providing advice in
relation to the Merger.
This announcement does not constitute an offer to sell or invitation to purchase
any securities or the solicitation of any vote or approval in any jurisdiction.
The release, publication or distribution of this announcement in certain
jurisdictions may be restricted by law and therefore persons in such
jurisdictions into which this announcement is released, published or distributed
should inform themselves about and observe such restrictions.
The LogicaCMG Shares to be issued to CMG Shareholders under the Scheme have not
been and will not be registered under the Securities Act, in reliance upon the
exemption from the registration requirements of the Securities Act provided by
Section 3(a)(10) thereof. Logica Shareholders who are or will be affiliates of
CMG or Logica prior to, or of LogicaCMG after, the Effective Date will be
subject to certain US transfer restrictions relating to new LogicaCMG Shares
received under the Scheme. Such transfer restrictions will be described more
fully in the documentation relating to the Merger to be despatched to
Shareholders of Logica and CMG subsequent to the dates hereof.
In addition, no steps have been, or will be taken to enable the LogicaCMG Shares
to be offered in compliance with the applicable securities laws of Canada or
Japan and no prospectus in relation to the LogicaCMG Shares has been, or will
be, lodged with or registered by the Australian Securities and Investments
Commission. Accordingly, the LogicaCMG Shares may not be offered, sold,
transferred, resold, delivered or distributed, directly or indirectly, in or
into or from Australia, Canada or Japan (except in transactions exempt from or
not subject to the registration requirements of the relevant securities laws of
Australia, Canada or Japan).
This announcement contains certain statements that are or may be forward-
looking. These statements typically contain words such as "intends", "expects",
"anticipates", "estimates" and words of similar import. By their nature,
forward-looking statements involve risk and uncertainty because they relate to
events and depend on circumstances that will occur in the future. There are a
number of factors that could cause actual results and developments to differ
materially from those expressed or implied by such forward-looking statements.
These factors include, but are not limited to, factors identified elsewhere in
this document as well as the following possibilities: future revenues are lower
than expected; costs or difficulties relating to the integration of the
businesses of Logica and CMG, or of other future acquisitions, are greater than
expected; expected cost savings from the transaction or from other future
acquisitions are not fully realised or realised within the expected time frame;
competitive pressures in the industry increase; general economic conditions or
conditions affecting the relevant industries, whether internationally or in the
places Logica and CMG do business, are less favourable than expected; and/or
conditions in the securities market are less favourable than expected.
The Panel wishes to draw the attention of other member firms of Euronext
Amsterdam to certain UK dealing disclosure requirements during the offer period
pertaining to the Merger. The offer period (in accordance with the City Code,
which is published and administered by the Panel) commenced on 8 October
2002 when an announcement was made of a possible offer. Logica has equity
securities traded on the London Stock Exchange and CMG has equity securities
traded on the London Stock Exchange and Euronext Amsterdam.
The above disclosure requirements are set out in more detail in Rule 8 of the
City Code. In particular, Rule 8 requires public disclosure of dealings during
the offer period by persons who own or control, or who would as a result of any
transaction own or control, one per cent. or more of any class of relevant
securities of the offeror or offeree company. Relevant securities include
Logica Shares, instruments convertible into Logica Shares, CMG Shares and
instruments convertible into CMG Shares. This requirement will apply until the
end of the offer period.
Disclosure should be made on an appropriate form by no later than 12 noon London
time on the business day following the date of the dealing transaction. These
disclosures should be sent to a Regulatory Information Service.
The Panel requests that member firms advise those of their clients who wish to
deal in the relevant securities of Logica or CMG, whether in the Netherlands or
in the UK, that they may be affected by these requirements. If there is any
doubt as to their application, the Panel should be consulted (telephone number:
+44 (0)20 7382 9026, fax number: +44 (0)20 7638 1554).
Appendix IV contains the definitions of certain terms used in this announcement.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN, OR INTO OR FROM AUSTRALIA,
CANADA OR JAPAN
5 November 2002
LOGICA PLC ("LOGICA") AND CMG PLC ("CMG")
PROPOSED MERGER OF LOGICA AND CMG
1. Introduction
The boards of Logica and CMG announce that they have unanimously agreed the
terms of a recommended merger to create LogicaCMG, the number two European
quoted IT services provider and a global provider of wireless messaging and
payments software.
Under the terms of the Merger, Logica Shareholders will retain their shares in
Logica (to be renamed LogicaCMG on completion of the Merger) and CMG
Shareholders will receive:
for each CMG Share 0.4827
new LogicaCMG Shares
Upon completion of the Merger, Logica Shareholders will hold 60 per cent. and
CMG Shareholders 40 per cent. of the issued ordinary share capital of
LogicaCMG, based on the current issued share capital of each company. The terms
of the Merger reflect the relative market capitalisations of the two companies
over the last six months and the contributions of each of Logica and CMG to the
profitability and prospects of LogicaCMG.
LogicaCMG (as renamed) will continue to be listed on the London Stock Exchange
and will also seek a listing on Euronext Amsterdam, effective upon completion of
the Merger.
2. Background to and reasons for the Merger
The boards of Logica and CMG believe that the Merger represents an opportunity
to create a company with an enhanced presence in key industry sectors and
important geographic markets, along with an improved breadth of offerings. The
Merger strengthens the IT services and wireless telecoms businesses. The
Enlarged Group had combined pro forma turnover and operating profit before
goodwill and restructuring of #2,008.8 million and #167.7 million, respectively,
for the 12 months ended 30 June 2002.
Logica's and CMG's strong geographic fit and complementary geographical
coverage, customers and key competencies with a similar industry focus create a
platform for enhanced future growth and the opportunity to realise significant
efficiencies across the Enlarged Group.
IT services
Major player in the UK and Benelux
The combination of Logica and CMG consolidates the two companies' strong
positions in the UK and Benelux markets. The Merger provides critical mass and
limited customer overlap, enabling the Enlarged Group to benefit from two
complementary customer bases and areas of expertise resulting in a balanced
portfolio of customers within the key industry sectors of the public sector,
telecoms, financial services, energy & utilities and industry, distribution &
transport.
In the UK market, combined turnover for the 12 months ended 30 June 2002 was
approximately #719 million. Operating margins in the UK for the six months
ended 30 June 2002 were 11.8 per cent. and 7.2 per cent. for Logica and CMG,
respectively. As at 30 June 2002, 7,727 staff were employed in the combined UK
operations. In the Benelux market, combined turnover for the 12 months ended 30
June 2002 was approximately #446 million. Operating margins in the Benelux for
the six months ended 30 June 2002 were 6.0 per cent. and 11.0 per cent. for
Logica and CMG, respectively. As at 30 June 2002, 7,294 staff were employed
in the combined Benelux operations.
Other markets
The Enlarged Group should also benefit from achieving critical mass, depth and
operational strength in several additional important markets, most notably
France, Germany and Australia, and from the consolidation of Logica's and CMG's
respective positions in other markets, including the Americas and Asia Pacific.
In addition to the improved presence in these markets, LogicaCMG will benefit
from an increased ability to provide added-value services to multi-national
customers using its global network.
Key sector expertise
The combination of Logica's expertise in the public sector, telecoms, financial
services, energy & utilities, and industry, distribution & transport sectors and
CMG's strength in the financial services, human resources, payroll processing
and government outsourcing sectors offers opportunities for cross-selling,
enabling LogicaCMG to improve its scope and reach of IT services offerings and
coverage of customers in these key sectors.
Enhanced product breadth
The Enlarged Group will also have an improved position in consulting, systems
integration, business process outsourcing and applications management, along
with the resources to undertake larger projects with stable, repeatable revenue
streams.
Wireless telecoms
The Merger creates a strengthened global player in the rapidly evolving wireless
messaging and payments software industry.
Strengthened geographical and customer coverage
The merger of Logica's and CMG's wireless telecoms businesses combines
complementary geographical strengths and customer relationships leading to
potential cross-selling opportunities for each others' products on a global
basis. Logica and CMG have limited customer overlap and a strong geographic
fit, with Logica having strong positions in Asia and the Americas, and CMG
having a strong position in Europe.
Enhanced product offerings and R&D
The Enlarged Group will benefit from a broad product portfolio within new
generation technologies including messaging, wireless portals, unified
communications, wireless Internet and mobile payments. The future market for
mobile communications is expected to involve operators, service providers,
content owners and organisations seeking to exploit the mobile channel.
Satisfying the needs of these participants will require a broad range of
software development and systems integration skills, as well as enabling
products, which the Enlarged Group will be well-positioned to provide.
Financial benefits of the Merger
Logica and CMG have reviewed a number of areas in which operational cost savings
can be achieved. It is expected that annualised operational cost savings of
approximately #60 million will be achievable.** Approximately half of the
estimated cost savings benefit is expected to be realised during the financial
year ending 31 December 2003 and all of the benefit in the financial year ending
31 December 2004. Approximately #40 million of the expected cost savings will
come from IT services and #20 million from wireless telecoms. These cost
savings are expected to result from:
O A reduction representing approximately 6 per cent. of the Enlarged
Group's global headcount;
O Optimisation of returns from research & development expenditure and
rationalisation of marketing, sales, distribution and back office activities,
particularly in wireless telecoms. Following the Merger, combined wireless
telecoms research & development expenditure is expected to be approximately #55
million per annum;
O The elimination of duplicate overhead and head office costs; and
O The alignment of the Enlarged Group's product and service offering.
The total cost of achieving these savings is expected to be some #80 million
(predominantly cash), and is expected to be incurred substantially during the
year following the Merger. These costs are expected to be reported as
exceptional items by LogicaCMG in the six months to 30 June 2003.
Including annualised cost savings, the Merger is expected to be substantially
earnings enhancing (pre-exceptional items and goodwill) for both Logica and CMG
Shareholders in the first full year of trading following completion of the
Merger.*
A major priority of the board and management of LogicaCMG will be to achieve a
successful integration of Logica and CMG that preserves the key strengths of the
culture, management and business practices of each group and allows the
efficient realisation of the expected cost savings. The overall integration
strategy has been formulated between the two management teams and detailed
planning is underway in preparation for rapid implementation following
completion of the Merger. As part of this process, appropriate consultations
will be made with staff and employee representative bodies in the relevant
jurisdictions.
In conjunction with the Merger, Logica has entered into new committed bank
facilities totalling #350 million which will replace Logica's and CMG's
existing facilities, providing the Enlarged Group with the resources necessary
to meet all anticipated restructuring costs and which will allow for continued
financial flexibility for the Enlarged Group. These facilities will enable
further investment in core operations and the flexibility to compete for major
business process outsourcing contracts.
3. Information on Logica
Logica concentrates on helping leading organisations worldwide achieve their
business objectives through the innovative use of information technology. The
company is focused on serving the energy & utilities, telecoms, financial
services, industry, distribution & transport and public sector markets as well
as providing world-class products and services to the wireless telecoms sector.
With experience gained over 30 years, Logica is a leading global solutions
provider offering systems integration, software development, strategic
consultancy and business process outsourcing services. The company believes it
has established a reputation for excellence in delivery, innovation and
continual improvement.
As at the close of business on 4 November 2002, being the last business day
prior to this announcement, the market capitalisation of Logica was
approximately #768.4 million. For the year ended 30 June 2002, Logica reported
turnover and profits on ordinary activities before taxation, goodwill,
restructuring costs, exceptional items and amounts written off investments of
#1,102.3 million and #116.0 million, respectively. The net assets at
30 June 2002 attributable to Logica amounted to #640.1 million. As at 30 June
2002, Logica had 10,896 employees.
Further information regarding Logica is included at Appendix II.
4. Information on CMG
CMG is a global information and communications technology company with a leading
position in the provision of mobile business and strong service offerings in
advanced security, business process outsourcing and advanced payroll solutions.
CMG focuses on its customers' critical activities, combining industry knowledge,
technical expertise and practical innovation to provide a full service offering
from management consultancy, through systems development and integration, to the
outsourced management of targeted business processes. CMG's customers are
typically major national and multinational corporations involved in financial
services, energy and petrochemicals, telecoms, transport and logistics, media
and publishing, as well as government ministries and agencies. Over the last
decade, the company has developed and established an international position in
wireless messaging and mobile Internet built on the delivery of high
performance, high reliability systems to mobile operators, initially for short
message services and more recently for wireless portals, multimedia messaging
and unified communications.
As at the close of business on 4 November 2002, being the last business day
prior to this announcement, the market capitalisation of CMG was approximately
#477.9 million. For the year ended 31 December 2001, CMG reported turnover and
profits before tax, goodwill and exceptional items of #920.4 million and #40.4
million, respectively. For the six-month period ended 30
June 2002, CMG reported turnover and profits before tax, goodwill and
exceptional items of #442.8 million and #21.6 million, respectively. The net
assets at 30 June 2002 attributable to CMG amounted to #381.1 million. As at 30
June 2002, CMG had 13,144 employees.
Further information regarding CMG is included at Appendix III.
5. Board and management
The Merger provides the opportunity to draw on the strength and depth of the
management teams of Logica and CMG, as well as on their highly experienced
non-executive directors. Cor Stutterheim will become Non-Executive Chairman of
LogicaCMG. The executive directors will comprise:
Martin Read - Group Chief Executive
Seamus Keating - Group Finance Director
Alistair Crawford - Chief Executive, Mainland Europe
Jim McKenna - Chief Executive, UK and Ireland
Ian Taylor - Group Human Resources Director
The non-executive directors have been drawn from the boards of both companies
and will initially comprise Wim Dik, Angela Knight, George Loudon, Helmut Mamsch
(who will be Deputy Chairman of LogicaCMG) and Richard North. It is intended
that the other non-executive directors of each company will stand down once the
Merger becomes effective.
In addition to the executive directors, the executive committee of LogicaCMG
will comprise:
Anthony Cole - Chief Executive, France, Germany and Central Europe
Royston Hoggarth - Chief Executive, International
Chris McDermott - Chief Executive, Wireless Networks
Thomas Ivarson - Executive Vice President, Wireless Networks
Bernd Lantermann - Group International Lines of Business Director
Hugo Schaap - Group Marketing Director
6. Current trading of Logica and CMG and prospects for the Enlarged Group
Logica's current trading
First quarter trading at Logica has been broadly in line with expectations. As
indicated at the time of announcement of last financial year's results in
September 2002, closing new business is slow in the current difficult market.
Consequently, revenue has been impacted in the first quarter in IT services, a
trend which is expected to continue through the first half. However, margins
have been solid, underpinned by the restructuring programme. As anticipated,
mobile networks made a small loss during the first quarter.
CMG's current trading
Against a tough market environment, CMG's trading in the second half of the year
has developed broadly in line with expectations at the interim stage. Margins
in IT services have stabilised and in certain areas have shown slight
improvements. Revenues continue to be impacted by customer confidence and there
are no immediate signs of an upturn. The wireless data solutions business is on
course to meet expectations for full year revenues of #170 million.
Prospects for the Enlarged Group
The Directors (including the Proposed Directors) of LogicaCMG are confident in
the prospects for the Enlarged Group and that, as a result of the platform
created through the Merger and the expected operating cost savings, LogicaCMG is
well-positioned to drive business performance in the coming financial year and
has a strengthened platform for growth for eventual market upturn.
7. Year-end and dividends
It is intended that, following completion of the Merger, the accounting
reference date for LogicaCMG will be changed from 30 June to 31 December.
Accounted for as a merger, the first audited financial statements for LogicaCMG
will be for the period to 31 December 2002. In line with normal practice,
LogicaCMG will, at the first balance sheet date following completion of the
Merger, carry out an assessment of the carrying value of goodwill arising from
previous acquisitions of members of the Enlarged Group. Although no impairment
tests have been undertaken since the last audited results, it is anticipated
that, in the prevailing market conditions, there may be a non-cash write-down to
the carrying value of such assets. In addition, the fair value of pension
assets will be assessed in the normal manner to reflect the market conditions
and accounting policies of the Enlarged Group prevailing at that time.
Logica Shareholders will remain entitled to the final dividend of 3.1 pence
recommended by the directors and expected to be paid on 8 November 2002. CMG
Shareholders will remain entitled to the interim dividend of 1.1 pence declared
by CMG on 29 August 2002 and payable on 15 November
2002.
It is expected that the first dividend to which LogicaCMG Shareholders will be
entitled will be a dividend in respect of the six-month period ending 31
December 2002 which is expected to be paid in April 2003. This dividend is
expected to be 3 pence per LogicaCMG Share.
Thereafter, LogicaCMG is expected to adopt an ongoing dividend policy in-line
with the existing policy of Logica, which is to ensure that shareholders benefit
directly and smoothly from the successful growth of the business while
continuing to provide sufficient funds to invest in future growth. Based on the
total dividend of 5.4 pence per Logica Share for the financial year ended
30 June 2002, it is expected that, in the current climate, LogicaCMG will
maintain the value of the dividend in real terms for the financial year ending
31 December 2003. In respect of the financial year ending 31 December 2003, it
is expected that LogicaCMG will pay an interim and final dividend split broadly
40/60.
8. Employees
Following completion of the Merger, the existing employment rights, including
pension rights, of employees of Logica and CMG will be fully safeguarded.
9. Details of the Merger
The Merger is to be effected by way of a scheme of arrangement of CMG under
section 425 of the Companies Act. Under the Scheme, CMG Shareholders will
receive LogicaCMG Shares on the following basis:
for each CMG Share 0.4827 new
LogicaCMG Shares
In cases where fractional entitlements to new LogicaCMG Shares arise from the
Merger, these will be sold and the proceeds returned to CMG Shareholders,
including in respect of CMG Shares listed on Euronext Amsterdam.
Under the Scheme, all of CMG's issued ordinary share capital will be cancelled
and re-issued to Logica.
The new LogicaCMG Shares issued pursuant to the Merger will be issued credited
as fully paid and will rank pari passu in all respects with the existing Logica
Shares, including the right to receive and retain in full future dividends and
other distributions (if any) declared, made or paid after the date of this
announcement, save for the final dividend in respect of the six months ended 30
June 2002 of 3.1 pence per Logica Share payable on 8 November 2002 to Logica
Shareholders appearing on the Logica register as at 11 October 2002.
The Merger will be subject to the conditions set out in Appendix I, including
the approval of the Merger by the shareholders of both Logica and CMG, the
sanction of the Scheme by the Court and satisfaction of certain regulatory
conditions.
Due to the size of CMG relative to that of Logica, the Merger will require
approval by an ordinary resolution of Logica Shareholders to be proposed at an
extraordinary general meeting of Logica. A special resolution to change the
name of Logica to LogicaCMG on completion of the Merger will be proposed at this
meeting.
The Scheme will require approval by a special resolution of the holders of CMG
Shares to be proposed at an extraordinary general meeting of CMG Shareholders.
The Scheme will also require approval separately by holders of CMG Shares at the
CMG Court Meeting. The approval required at the CMG Court Meeting is a majority
in number representing at least 75 per cent. by value of those CMG Shareholders
voting at the meeting.
The Scheme can only become effective if all the conditions to the Merger have
been satisfied or, where relevant, waived, including receipt of all Shareholder
approvals, sanction by the Court and all other regulatory clearances. The
Scheme will become effective upon the delivery to the Registrar of Companies in
England and Wales by CMG of a copy of the order of the Court sanctioning the
Scheme and registration of such order. This is expected to take place before the
end of the current calendar year.
It is expected that formal documentation relating to the Merger will be
despatched to shareholders of Logica and CMG shortly. This documentation will
include listing particulars in relation to Logica, a circular to Logica
Shareholders and a circular to CMG Shareholders in which the terms of the Scheme
will be explained, and which will contain notices of the meeting to be convened
by direction of the Court and the respective extraordinary general meetings and
class meetings required to approve the Merger and the Scheme.
In the Netherlands, the above-mentioned documents will be made available to CMG
Shareholders on the website of Logica (www.Logica.com), CMG
(www.investor.CMG.com) and Euronext Amsterdam (www.euronext.nl) and, for the
benefit of persons entitled to CMG Shares which are registered in the name of
Necigef, will be available on request, free of charge, via ABN AMRO Bank N.V.,
Service Desk, +31 76 5799 455 and at the offices of CMG.
10. Share option schemes
The Merger will affect share options and incentive awards granted under the CMG
Share Option Schemes. Participants in these schemes will be contacted regarding
the effect of the Merger on their rights.
11. Settlement, listing and dealing
Application will be made to the UK Listing Authority for the new LogicaCMG
Shares to be admitted to the Official List, and to the London Stock Exchange for
such shares to be admitted to trading on the London Stock Exchange's market for
listed securities. It is expected that admission will become effective and that
dealings, for normal settlement, will commence on the Effective Date.
A request will be made to the London Stock Exchange to cancel the admission and
trading of CMG Shares on the London Stock Exchange's market for listed
securities and to the UK Listing Authority to cancel the listing of CMG Shares
on the Official List. CMG Shares will cease to be listed on the Official List
on the Effective Date. The last day of dealing in CMG Shares on the London
Stock Exchange will be the last dealing day before the Effective Date.
Certificates for LogicaCMG Shares to be held in certificated form will be
despatched no later than 14 days after the Scheme becomes effective. No
certificates for LogicaCMG Shares will be issued in respect of the entitlements
of CMG Shareholders who hold their CMG Shares in CREST, settlement for which
will be made through the applicable CREST procedures.
Further details on settlement, listing and dealing will be included in documents
to be sent to Logica and CMG Shareholders which will be made available to CMG
Shareholders in the Netherlands through the means described in paragraph 9
above.
Given the materiality of CMG's operations in the Netherlands to the LogicaCMG
results, the proportion of LogicaCMG's employees based in the Netherlands and
the proportion of CMG shares traded in the Netherlands, Logica will apply to
Euronext Amsterdam for the new LogicaCMG Shares to obtain a secondary listing
and be admitted to trading on Euronext Amsterdam. It is intended that the
secondary listing will become effective and that dealings, for normal
settlement, will commence on the same day as the new LogicaCMG Shares are
admitted to trading on the London Stock Exchange.
12. Interests in shares
Neither Logica, nor any of the directors of Logica, nor, so far as Logica is
aware, any party acting in concert with Logica, owns or controls any CMG Shares
or holds any option to purchase any CMG Shares or has entered into any
derivative referenced to CMG Shares which remains outstanding. In view of the
requirement for confidentiality, Logica has not made any enquiries in this
respect of certain parties who may be deemed by the Panel to be acting in
concert with it for the purposes of the Merger.
13. Inducement fee
Logica and CMG have entered into a Merger Agreement under which each party has
agreed to pay the other an amount of #5.1 million by way of compensation if (i)
the Merger Agreement is terminated or the Merger lapses, amongst other things,
following a failure by its shareholders to pass any shareholder resolution
required to implement the Merger, following withdrawal or modification of the
recommendation of the Merger by its board of directors or as a result of it
being in substantial breach of the Merger Agreement or (ii) the Merger Agreement
is terminated or the Merger lapses and a third party alternative offer, scheme
or other merger transaction in respect of that party becomes unconditional in
all respects or otherwise becomes effective or completes within 6 months of the
date of this announcement.
14. Recommendation
The board of Logica, which has been advised by Merrill Lynch and Close Brothers,
its financial advisors, considers the terms of the Merger to be fair and
reasonable to Logica. In providing advice to the board of Logica, Merrill Lynch
and Close Brothers have taken account of the directors of Logica's commercial
assessments of the Merger. In addition, Logica also received financial advice
from ING Barings. The board of Logica considers the Merger to be in the best
interests of Logica Shareholders as a whole. Accordingly, the directors of
Logica will unanimously recommend that Logica Shareholders vote in favour of the
resolutions to be proposed at the extraordinary general meeting of Logica
Shareholders, as they intend to do in respect of their own respective beneficial
holdings.
The directors of CMG, who have been so advised by Goldman Sachs International
and ABN AMRO, consider the terms of the Merger to be fair and reasonable. In
providing their financial advice, Goldman Sachs International and ABN AMRO have
taken into account the directors of CMG's commercial assessments of the Merger.
Accordingly, the directors of CMG will unanimously recommend that CMG
Shareholders vote in favour of the resolutions to be proposed at the CMG Court
Meeting and the extraordinary general meeting of CMG Shareholders, as they
intend to do in respect of their own respective beneficial holdings.
* The statement that the Merger is expected to be earnings enhancing for Logica
and CMG should not be interpreted to mean that the earnings per share in the
financial year following the Merger, or in any subsequent period, will
necessarily be greater than those for the relevant preceding financial period.
** The expected operating cost savings have been calculated on the basis of the
existing cost and operating structures of the companies and by reference to
current prices and exchange rates and the current regulatory environment. These
statements of estimated cost savings and one-off costs for achieving them relate
to future actions and circumstances which, by their nature, involve risks,
uncertainties and other factors. Because of this, the cost savings referred to
may not be achieved, or those achieved could be materially different from those
estimated. This statement should not be interpreted to mean that the earnings
per share in the financial year following the Merger, or in any subsequent
period, will necessarily be greater than those for the relevant preceding
financial period.
Merrill Lynch is acting for Logica and no-one else in connection with the Merger
and will not be responsible to anyone other than Logica for providing the
protections afforded to clients of Merrill Lynch or for providing advice in
relation to the Merger.
Close Brothers is acting for Logica and no-one else in connection with the
Merger and will not be responsible to anyone other than Logica for providing the
protections afforded to clients of Close Brothers or for providing advice in
relation to the Merger.
ING Barings is acting for Logica and no-one else in connection with the Merger
and will not be responsible to anyone other than Logica for providing the
protections afforded to clients of ING Barings or for providing advice in
relation to the Merger.
UBS Warburg is acting as joint broker for Logica and no-one else in connection
with the Merger and will not be responsible to anyone other than Logica for
providing the protections afforded to clients of UBS Warburg or for providing
advice in relation to the Merger.
Goldman Sachs International is acting for CMG and no-one else in connection with
the Merger and will not be responsible to any other person for providing the
protections afforded to clients of Goldman Sachs International or for providing
advice in relation to the Merger.
ABN AMRO is acting for CMG and no-one else in connection with the Merger and
will not be responsible to any other person for providing the protections
afforded to clients of ABN AMRO or for providing advice in relation to the
Merger.
ABN AMRO Bank N.V. is acting for Logica as the listing agent in connection with
the application to Euronext Amsterdam and as the share exchange agent in
connection with the exchange of CMG Shares into LogicaCMG Shares and will not be
responsible to anyone other than Logica for providing the protections afforded
to clients of ABN AMRO Bank N.V. in relation to its role as listing agent and
share exchange agent.
Hoare Govett is acting as broker for CMG and no-one else in connection with the
Merger and will not be responsible to anyone other than CMG for providing the
protections afforded to clients of Hoare Govett or for providing advice in
relation to the Merger.
This announcement does not constitute an offer to sell or invitation to purchase
any securities or the solicitation of any vote or approval in any jurisdiction.
The release, publication or distribution of this announcement in certain
jurisdictions may be restricted by law and therefore persons in such
jurisdictions into which this announcement is released, published or distributed
should inform themselves about and observe such restrictions.
The LogicaCMG Shares to be issued to CMG Shareholders under the Scheme have not
been and will not be registered under the Securities Act, in reliance upon the
exemption from the registration requirements of the Securities Act provided by
Section 3(a)(10) thereof. Logica Shareholders who are or will be affiliates of
CMG or Logica prior to, or of LogicaCMG after, the Effective Date will be
subject to certain US transfer restrictions relating to new LogicaCMG Shares
received under the Scheme. Such transfer restrictions will be described more
fully in the documentation relating to the Merger to be despatched to
Shareholders of Logica and CMG subsequent to the dates hereof.
In addition, no steps have been, or will be taken to enable the LogicaCMG Shares
to be offered in compliance with the applicable securities laws of Canada or
Japan and no prospectus in relation to the LogicaCMG Shares has been, or will
be, lodged with or registered by the Australian Securities and Investments
Commission. Accordingly, the LogicaCMG Shares may not be offered, sold,
transferred, resold, delivered or distributed, directly or indirectly, in or
into or from Australia, Canada or Japan (except in transactions exempt from or
not subject to the registration requirements of the relevant securities laws of
Australia, Canada or Japan).
This announcement contains certain statements that are or may be forward-
looking. These statements typically contain words such as "intends", "expects",
"anticipates", "estimates" and words of similar import. By their nature,
forward-looking statements involve risk and uncertainty because they relate to
events and depend on circumstances that will occur in the future. There are a
number of factors that could cause actual results and developments to differ
materially from those expressed or implied by such forward-looking statements.
These factors include, but are not limited to, factors identified elsewhere in
this document as well as the following possibilities: future revenues are lower
than expected; costs or difficulties relating to the integration of the
businesses of Logica and CMG, or of other future acquisitions, are greater than
expected; expected cost savings from the transaction or from other future
acquisitions are not fully realised or realised within the expected time frame;
competitive pressures in the industry increase; general economic conditions or
conditions affecting the relevant industries, whether internationally or in the
places Logica and CMG do business, are less favourable than expected; and/or
conditions in the securities market are less favourable than expected.
The Panel wishes to draw the attention of other member firms of Euronext
Amsterdam to certain UK dealing disclosure requirements during the offer period
pertaining to the Merger. The offer period (in accordance with the City Code,
which is published and administered by the Panel) commenced on 8 October
2002 when an announcement was made of a possible offer. Logica has equity
securities traded on the London Stock Exchange and CMG has equity securities
traded on the London Stock Exchange and Euronext Amsterdam.
The above disclosure requirements are set out in more detail in Rule 8 of the
City Code. In particular, Rule 8 requires public disclosure of dealings during
the offer period by persons who own or control, or who would as a result of any
transaction own or control, one per cent. or more of any class of relevant
securities of the offeror or offeree company. Relevant securities include
Logica Shares, instruments convertible into Logica Shares, CMG Shares and
instruments convertible into CMG Shares. This requirement will apply until the
end of the offer period.
Disclosure should be made on an appropriate form by no later than 12 noon London
time on the business day following the date of the dealing transaction. These
disclosures should be sent to a Regulatory Information Service.
The Panel requests that member firms advise those of their clients who wish to
deal in the relevant securities of Logica or CMG, whether in the Netherlands or
in the UK, that they may be affected by these requirements. If there is any
doubt as to their application, the Panel should be consulted (telephone number:
+44 (0)20 7382 9026, fax number: +44 (0)20 7638 1554).
Appendix IV contains the definitions of certain terms used in this announcement.
APPENDIX I
CONDITIONS to the implementation of the scheme and the merger
The Merger is conditional upon the Scheme becoming unconditional and becoming
effective by not later than 30 January 2003 or such later date (if any) as
Logica and CMG may agree and the Court may allow.
1. Conditions of the Scheme
The Scheme will be subject to the following conditions:
(a) approval of the Scheme by a majority in number representing at least
three-fourths in value of the holders of CMG Shares present and voting, either
in person or by proxy, at the CMG Court Meeting;
(b) any resolution or resolutions of CMG Shareholders required to
approve and implement the Scheme and the Merger being duly passed at an
extraordinary general meeting of CMG (or at any adjournment of that meeting);
(c) any resolution or resolutions of Logica Shareholders required in
connection with the approval and implementation of the Scheme and the Merger
being duly passed at an extraordinary general meeting of Logica (or at any
adjournment of that meeting);
(d) the sanction (with or without modification) of the Scheme (and
confirmation of any reduction of capital involved therein) by the Court on terms
satisfactory to both Logica and CMG acting reasonably and an office copy of the
Order of the Court being delivered by CMG for registration to the Registrar of
Companies in England and Wales (and registration of the Order confirming any
reduction of capital involved in the Scheme with the Registrar of Companies in
England and Wales); and
(e) the admission to the Official List of the new LogicaCMG Shares
becoming effective in accordance with the Listing Rules and the admission of
such shares to the London Stock Exchange's market for listed securities becoming
effective or (if Logica and CMG so determine and subject to the consent of the
Panel) the UK Listing Authority agreeing or confirming its decision to admit
such shares to the Official List and the London Stock Exchange agreeing to admit
such shares to trading subject only to (i) the allotment of such shares and/or
(ii) the Scheme becoming unconditional in all respects.
2. Conditions of the Merger
Logica and CMG have agreed that, subject as stated in paragraph 3 below, the
Merger will also be conditional upon (and accordingly the necessary action to
make the Scheme effective will not be taken unless the following conditions are
satisfied or, where relevant, waived as referred to below prior to the Scheme
being sanctioned by the Court):
(a) no Third Party having intervened and there not continuing to be
outstanding any statute, regulation or order of any Third Party in each case
which would or might:
(i) make the Merger or the Scheme void, illegal or unenforceable in
any jurisdiction, or otherwise directly or indirectly restrain, prevent,
prohibit, restrict or delay the same or impose additional conditions or
obligations with respect to the Merger or the Scheme or otherwise impede,
challenge or interfere with the Merger or the Scheme or require amendment to the
terms of the Merger or the Scheme;
(ii) require, prevent or delay the divestiture or alter the terms
envisaged for any proposed divestiture by any member of the Wider Logica Group
or by any member of the Wider CMG Group of all or any portion of their
respective businesses, assets or properties or limit the ability of any of them
to conduct any of their respective businesses or to own or control any of their
respective assets or properties or any part thereof;
(iii) require any member of the Wider Logica Group or the Wider CMG
Group to acquire, or to offer to acquire, any shares or other securities (or the
equivalent) in any member of either group owned by any third party;
(iv) limit the ability of any member of the Wider Logica Group or the
Wider CMG Group to conduct or integrate or co-ordinate its business, or any part
of it, with the businesses or any part of the businesses of any other member of
the Wider Logica Group or the Wider CMG Group;
(v) result in any member of the Wider CMG Group or the Wider Logica
Group ceasing to be able to carry on business under any name under which it
presently does so; or
(vi) otherwise adversely affect the business, assets, profits, financial
or trading position or prospects of any member of the Wider CMG Group or the
Wider Logica Group, and all applicable waiting and other time periods during
which any Third Party could intervene under the laws of any jurisdiction having
expired, lapsed or been terminated;
(b) without limitation to condition (a) above:
(i) the European Commission taking a decision under Article 6(1)(b)
of Council Regulation (EEC) 4064/89 without imposing any conditions or
obligations that are not on terms satisfactory to Logica and CMG declaring the
transaction compatible with the Common Market, or being deemed to have done so
under Article 10(6) of the Regulation; or
(ii) the European Commission having referred the whole or part of the
Merger to the competent authorities of one or more Member States under Article 9
(3) of the Regulation,
(a) each such authority granting a clearance without imposing any conditions
or obligations that are not on terms satisfactory to Logica and CMG in respect
of all those parts of the Merger which were referred to it, or being deemed to
have granted such a clearance; and
(b) the requirements of paragraph 2(b)(i) above being satisfied with respect
to any part not referred to the competent authority of any Member State; and
(iii) all filings (if any) having been made and all or any applicable
waiting periods (including any extensions thereof) under the United States Hart-
Scott Rodino Antitrust Improvements Act of 1976 and the regulations thereunder
having expired, lapsed or been terminated as appropriate in each case in respect
of the Merger, or any matter arising from the Merger;
(c) all other notifications and filings which are necessary or are
reasonably considered appropriate by Logica and CMG having been made, all
information and consultation obligations which are necessary or are reasonably
considered appropriate by Logica and CMG having been complied with (including
compliance with required employee advice and consultation obligations), all
appropriate waiting and other time periods (including any extensions of such
waiting and other time periods) under any applicable legislation or regulation
of any relevant jurisdiction having expired, lapsed or been terminated (as
appropriate) and all statutory or regulatory obligations in any relevant
jurisdiction having been complied with, in each case in connection with the
Merger and/or the implementation of the Scheme;
(d) all Authorisations which are necessary or are reasonably considered
appropriate by Logica and CMG in any relevant jurisdiction for or in respect of
the Merger and the implementation of the Scheme having been obtained, in terms
and in a form satisfactory to Logica and CMG, from all appropriate Third Parties
and all such Authorisations remaining in full force and effect and there being
no notice or intimation of any intention to revoke, suspend, restrict, modify or
not to renew any of the same;
(e) except as publicly announced by Logica or CMG (by the delivery of an
announcement to a Regulatory Information Service) prior to the date of this
announcement or as fairly disclosed to Logica by or on behalf of CMG or to CMG
by or on behalf of Logica prior to the date of this announcement, there being no
provision of any arrangement, agreement, licence, permit, franchise, lease or
other instrument to which any member of the Wider CMG Group or the Wider Logica
Group is a party, or by or to which any such member or any of its assets is or
are or may be bound, entitled or subject or any circumstance, which, in each
case as a consequence of the Merger or the implementation of the Scheme, could
or might result in:
(i) any monies borrowed by or any other indebtedness or liabilities
(actual or contingent) of, or any grant available to, any member of the Wider
CMG Group or the Wider Logica Group being or becoming repayable or capable of
being declared repayable immediately or prior to its stated repayment date or
the ability of any member of the Wider CMG Group or the Wider Logica Group to
borrow monies or incur any indebtedness being withdrawn or 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, assets
or interests of any member of the Wider CMG Group or the Wider Logica Group or
any such mortgage, charge or other security interest (wherever created, arising
or having arisen) becoming enforceable;
(iii) any such arrangement, agreement, licence, permit, franchise,
lease or other instrument, or the rights, liabilities, obligations or interests
of any member of the Wider CMG Group or the Wider Logica Group thereunder,
being, or becoming capable of being, terminated or adversely modified or
affected or any adverse action being taken or any obligation or liability
arising thereunder;
(iv) any asset(s) or interest(s) of, or any asset the use of which is
enjoyed by, any member of the Wider CMG Group or the Wider Logica Group being or
falling to be disposed of or ceasing to be available to any member of the Wider
CMG Group or the Wider Logica Group or any right arising under which any such
asset or interest could be required to be disposed of or could cease to be
available to any member of the Wider CMG Group or the Wider Logica Group
otherwise than in the ordinary course of business;
(v) any member of the Wider CMG Group or the Wider Logica Group
ceasing to be able to carry on business under any name under which it presently
does so;
(vi) the creation of liabilities (actual or contingent) by any member of
the Wider CMG Group or the Wider Logica Group;
(vii) the rights, liabilities, obligations or interests of any member of
the Wider CMG Group or the Wider Logica Group under any such arrangement,
agreement, licence, permit, franchise or other instrument or the interests or
business of any such member in or with any other person, firm, company or body
(or any arrangement or arrangements relating to any such interests or business)
being terminated, adversely modified or affected; or
(viii) the financial or trading position or the prospects or the value of
any member of the Wider CMG Group or the Wider Logica Group being prejudiced or
adversely modified or affected;
and no event having occurred which, under any provision of any such arrangement,
agreement, licence, permit or other instrument, could result in any of the
events or circumstances which are referred to in paragraphs (i) to (viii) of
this condition (e);
(f) since, in the case of CMG, 31 December 2001 or, in the case of
Logica, 30 June 2002, and except as disclosed in CMG's or Logica's annual report
and accounts for the respective year then ended or as otherwise publicly
announced by CMG or Logica (by the delivery of an announcement to a Regulatory
Information Service) prior to the date of this announcement or as otherwise
fairly disclosed to Logica by or on behalf of CMG or to CMG by or on behalf of
Logica prior to the date of this announcement, no member of the Wider CMG Group
or the Wider Logica Group having:
(i) issued or agreed to issue, or authorised or proposed the issue
of, additional shares of any class, or securities convertible into or
exchangeable for, or rights, warrants or options to subscribe for or acquire,
any such shares or convertible securities other than as between CMG and wholly-
owned subsidiaries of CMG or between Logica and wholly-owned subsidiary of
Logica and other than any options granted as disclosed by CMG to Logica or by
Logica to CMG prior to the date of this announcement and any shares issued upon
the exercise of any options granted under any of the CMG Share Option Schemes or
the Logica Share Option Schemes;
(ii) purchased or redeemed or repaid any of its own shares or other
securities or reduced or made any other change to any part of its share capital;
(iii) (save for the payment of the interim dividend of 1.1 pence per
CMG Share payable on 15 November 2002 in respect of the six months ended 30 June
2002) recommended, declared, paid or made any bonus, dividend or other
distribution whether payable in cash or otherwise (other than, in the case of
the Wider CMG Group, to CMG or a wholly-owned subsidiary of CMG or, in the case
of the Wider Logica Group, to Logica or a wholly-owned subsidiary of Logica);
(iv) other than pursuant to the Scheme or the Merger, made or authorised
any change in its loan capital;
(v) other than pursuant to the Scheme or the Merger and other than any
acquisition or disposal in the ordinary course of business or a transaction
between CMG and a wholly-owned subsidiary of CMG or between Logica and a
wholly-owned subsidiary of Logica, merged with, demerged or acquired any body
corporate, partnership or business or acquired or disposed of or transferred,
mortgaged or charged or created any security interest over any assets or any
right, title or interest in any assets (including shares in any undertaking and
trade investments) or authorised the same;
(vi) issued or authorised the issue of, or made any change in or to, any
debentures or incurred or increased any indebtedness or liability (actual or
contingent) of an aggregate amount which might materially and adversely affect
the financial or trading position or the prospects of the Wider CMG Group or the
Wider Logica Group, as the case may be;
(vii) entered into, varied, or authorised any agreement, transaction,
arrangement or commitment (whether in respect of capital expenditure or
otherwise) which:
(A) is of a long-term, onerous or unusual nature or magnitude or which is or
could involve an obligation of such nature or magnitude; or
(B) could restrict the business of any member of the Wider CMG Group or the
Wider Logica Group, as the case may be; or
(C) is other than in the ordinary course of business;
(viii) (other than transactions between one wholly-owned member of the CMG
Group or the Logica Group and another such member and other than pursuant to the
Scheme or the Merger or in the ordinary course of business) entered into,
implemented, effected or authorised any merger, demerger, reconstruction,
amalgamation, scheme, commitment or other transaction or arrangement in respect
of itself or another member of the Wider CMG Group or the Wider Logica Group;
(ix) entered into or varied the terms of any contract, agreement or
arrangement with any of the directors or senior executives of any member of the
Wider CMG Group or the Wider Logica Group;
(x) (other than in respect of a member of the Wider CMG Group or the
Wider Logica Group which is dormant and was solvent at the relevant time) taken
any corporate action or had any legal proceedings instituted or threatened
against it or petition presented or order made for its winding-up (voluntarily
or otherwise), dissolution or reorganisation or for the appointment of a
receiver, administrator, administrative receiver, trustee or similar officer of
all or any material part of its assets and revenues or any analogous proceedings
in any jurisdiction or appointed any analogous person in any jurisdiction;
(xi) 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;
(xii) waived or compromised any claim;
(xiii) made any material alteration to its memorandum or articles of
association (or equivalent constitutional documents in respect of overseas
jurisdictions of incorporation); or
(xiv) entered into any agreement, commitment or arrangement or passed any
resolution or made any offer (which remains open for acceptance) or proposed or
announced any intention with respect to any of the transactions, matters or
events referred to in this condition (f);
(g) since, in the case of CMG, 31 December 2001, and, in the case of
Logica, 30 June 2002 and except as disclosed in CMG's or Logica's annual report
and accounts for the respective year then ended or as otherwise publicly
announced by CMG or Logica (by the delivery of an announcement to a Regulatory
Information Service) prior to the date of this announcement or as otherwise
fairly disclosed to Logica by or on behalf of CMG or to CMG by or on behalf of
Logica prior to the date of this announcement:
(h) there having been no adverse change or deterioration in the
business, assets, financial or trading positions or profit or prospects of any
member of the Wider CMG Group or the Wider Logica Group;
(i) no contingent or other liability of any member of the Wider CMG
Group or the Wider Logica Group having arisen or become apparent or increased;
(j) other than pursuant to the Scheme, no litigation, arbitration
proceedings, prosecution or other legal proceedings to which any member of the
Wider CMG Group or the Wider Logica Group is or may become a party (whether as
claimant, defendant or otherwise) having been threatened, announced, implemented
or instituted by or against or remaining outstanding against or in respect of
any member of the Wider CMG Group or the Wider Logica Group; and
(k) other than as a result of the proposed Merger, no enquiry or
investigation by, or complaint or reference to, any Third Party having been
threatened, announced, implemented, instituted by or against or remaining
outstanding against or in respect of any member of the Wider CMG Group or the
Wider Logica Group;
(l) Logica not having discovered:
(m) that any financial or business or other information concerning the
Wider CMG Group disclosed at any time by or on behalf of any member of the Wider
CMG Group, whether publicly, to any member of the Wider Logica Group or
otherwise, is misleading or contains any misrepresentation of fact or omits to
state a fact necessary to make any information contained therein not misleading
and which was not subsequently corrected before the date of this announcement by
disclosure either publicly or otherwise to Logica;
(n) that any member of the Wider CMG Group is subject to any liability
(actual or contingent) which is not disclosed in CMG's annual report and
accounts for the financial year ended 31 December 2001 or as otherwise publicly
announced by CMG (by the delivery of an announcement to a Regulatory Information
Service) prior to the date of this announcement or as otherwise fairly disclosed
to Logica by or on behalf of CMG prior to the date of this announcement;
(o) any information which affects the import of any information
disclosed at any time by or on behalf of any member of the Wider CMG Group;
(p) that, save as fairly disclosed to Logica by or on behalf of CMG
prior to the date of this announcement, any past or present member of the Wider
CMG Group has not complied with any applicable legislation or regulations of any
jurisdiction with regard to the use, treatment, handling, storage, transport,
release, disposal, discharge, spillage, leak or emission of any waste or
hazardous substance or any substance likely to impair the environment or harm
human health, or otherwise relating to environmental matters or the health and
safety of any person, or that there has otherwise been any such use, treatment,
handling, storage, transport, release, disposal, discharge, spillage, leak or
emission (whether or not this constituted a non-compliance by any person with
any legislation or regulations and wherever the same may have taken place)
which, in any case, would be likely to give rise to any liability (whether
actual or contingent) or cost on the part of any member of the Wider CMG Group;
(q) that, save as fairly disclosed to Logica by or on behalf of CMG
prior to the date of this announcement, there is, or is likely to be, any
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 CMG Group or any other property or any
controlled waters under any environmental legislation, regulation, notice,
circular, order or other lawful requirement of any relevant authority or third
party or otherwise; or
(r) save as fairly disclosed to Logica by or on behalf of CMG prior
to the date of this announcement, that circumstances exist whereby a person or
class of persons would be likely to have a claim 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 CMG Group; and
(s) CMG not having discovered:
(t) that any financial or business or other information concerning
the Wider Logica Group disclosed at any time by or on behalf of any member of
the Wider Logica Group, whether publicly, to any member of the Wider CMG Group
or otherwise, is misleading or contains any misrepresentation of fact or omits
to state a fact necessary to make any information contained therein not
misleading and which was not subsequently corrected before the date of this
announcement by disclosure either publicly or otherwise to CMG;
(u) that any member of the Wider Logica Group is subject to any
liability (actual or contingent) which is not disclosed in Logica's annual
report and accounts for the financial year ended 30 June 2002 or as otherwise
publicly announced by Logica (by the delivery of an announcement to a Regulatory
Information Service) prior to the date of this announcement or as otherwise
fairly disclosed to CMG by or on behalf of Logica prior to the date of this
announcement;
(v) any information which affects the import of any information
disclosed at any time by or on behalf of any member of the Wider Logica Group;
(w) that, save as fairly disclosed to CMG by or on behalf of Logica
prior to the date of this announcement, any past or present member of the Wider
Logica Group has not complied with any applicable legislation or regulations of
any jurisdiction with regard to the use, treatment, handling, storage,
transport, release, disposal, discharge, spillage, leak or emission of any waste
or hazardous substance or any substance likely to impair the environment or harm
human health, or otherwise relating to environmental matters or the health and
safety of any person, or that there has otherwise been any such use, treatment,
handling, storage, transport, release, disposal, discharge, spillage, leak or
emission (whether or not this constituted a non-compliance by any person with
any legislation or regulations and wherever the same may have taken place)
which, in any case, would be likely to give rise to any liability (whether
actual or contingent) or cost on the part of any member of the Wider Logica
Group;
(x) that, save as fairly disclosed to CMG by or on behalf of Logica
prior to the date of this announcement, there is, or is likely to be, any
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 Logica Group or any other property or any
controlled waters under any environmental legislation, regulation, notice,
circular, order or other lawful requirement of any relevant authority or third
party or otherwise; or
(y) save as fairly disclosed to CMG by or on behalf of Logica prior to
the date of this announcement, that circumstances exist whereby a person or
class of persons would be likely to have a claim 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 Logica Group.
For the purpose of these conditions:
(a) Third Party means any central bank, government, government
department or governmental, quasi-governmental, supranational, statutory,
regulatory or investigative body, authority (including any national anti-trust
or merger control authority), court, trade agency, association, institution or
professional or environmental body or any other similar person or body
whatsoever in any relevant jurisdiction;
(b) a Third Party shall be regarded as having "intervened" if it has
decided to take, institute, implement or threaten any action, proceeding, suit,
investigation, enquiry or reference or made, proposed or enacted any statute,
regulation, decision or order or taken any measures or other steps or required
any action to be taken or information to be provided and "intervene" shall be
construed accordingly; and
(c) Authorisations means authorisations, orders, grants, recognitions,
determinations, certificates, confirmations, consents, licences, clearances,
provisions, advices and approvals.
3. Waiver of conditions
Subject to the requirements of the Panel, Logica and CMG, acting together, may
waive all or any of the conditions contained in paragraphs 2 (a), (b), (c) and
(d). Logica reserves the right to waive in whole or in part, all or any of the
conditions in paragraph 2 (e), (f) and (g), so far as they relate to CMG, and in
paragraph 2 (h) above, and CMG reserves the right to waive in whole or in part,
all or any of the conditions in paragraph 2 (e), (f) and (g) above, so far as
they relate to Logica, and in paragraph 2 (i) above, for the purposes of the
Merger and the Scheme.
4. Lapse of the Merger
The Merger will lapse (unless otherwise agreed by the Panel) and the Scheme will
not proceed if, prior to the date of the CMG Court Meeting, the European
Commission either initiates proceedings under Article 6(1)(c) of Council
Regulation (EEC) 4064/89 (the Regulation) or makes a referral to a competent
authority of the United Kingdom under Article 9(1) of the Regulation and there
is then a reference to the Competition Commission.
APPENDIX II
INFORMATION ON LOGICA
Logica is focused on serving the energy & utilities, telecoms, financial
services, industry, distribution & transport, and the public sector markets.
Logica has been at the forefront of using information technology in business for
over 30 years and is a pioneer of technology that enables leading organisations
to increase competitive advantage, acquire and retain customers and grow market
share through the delivery of repeatable global solutions and consultancy.
Logica provides an all-embracing portfolio of services, from strategic
consultancy and products to systems integration, solutions delivery and business
process outsourcing.
For the year ended 30 June 2002, approximately 41.3 per cent. of Logica's
turnover arose in the UK/Republic of Ireland, 30.6 per cent. in Continental
Europe, 8.9 per cent. in the Americas and 19.2 per cent. in other countries.
As at 30 June 2002, the company had 10,896 employees in 34 countries.
Summary consolidated financial information for Logica for the three most recent
financial years is set out in the table below:
Year ended 30 June 2002 (#m) 2001 (#m) 2000 (#m)
Turnover 1,102.3 1,133.2 847.4
Total operating (loss)/profit including associates (219.7) 120.7 83.4
Total operating profit including associates before exceptional
items, goodwill and restructuring costs
110.9 140.3 94.9
(Loss)/profit on ordinary activities before taxation (234.8) 136.2 98.1
Profit on ordinary activities before taxation, exceptional items,
goodwill, restructuring costs and amounts written off investments
116.0 155.6 97.4
Basic earnings per share before exceptional items, goodwill,
restructuring costs and amounts written off investments*
19.1p 25.4p 16.9p
Basic (loss)/earnings per share* (58.4)p 20.8p 17.0p
Dividend per share* 5.40p 5.00p 3.82p
* Earnings per share and dividends per share figures for 2000 have been restated
to reflect the impact of the rights issue which took place in October 2000.
APPENDIX III
INFORMATION ON CMG
CMG is a global information and communications technology group with leading
positions in the provision of mobile business, advanced security, business
process outsourcing and advanced payroll solutions. CMG provides a full service
offering to both the public and private sectors, with a particular focus on
energy, finance, public sector, telecoms and transport, travel and logistics.
From management consultancy and systems development and integration to the
outsourced management of targeted business processes, CMG focuses on improving
the operational efficiency and competitive advantage of its clients.
Through Wireless Data Solutions CMG has built on its success in the provision of
short messaging services and secured a leading position in the global wireless
messaging and mobile Internet markets by delivering a broad portfolio of high
performance high reliability systems ranging from wireless portals and
multimedia messaging to unified communications, to mobile operators.
For the year ended 31 December 2001, approximately 43 per cent. of CMG's
turnover arose in the Benelux, 29 per cent. in the UK, 8 per cent. in Germany, 7
per cent. in France and 13 per cent. in other countries. As at 30 June 2002, CMG
had 13,144 employees in 20 countries.
Summary consolidated financial information for CMG for the three most recent
financial years is set out in the table below:
Year ended 31 December 2001 (#m) 2000 (#m) 1999 (#m)
Turnover 920.4 810.4 608.6
Total operating profit/(loss) before goodwill amortisation and
exceptional items
55.0 125.5 85.3
Total operating profit/(loss) (574.2) 91.6 83.1
Profit/(loss) on ordinary activities before tax (588.8) 83.1 83.6
Profit/(loss) on ordinary activities after tax (595.8) 45.2 56.0
Minority Interests (0.3) (0.2) (0.3)
Profit/(loss) for year (596.1) 45.0 55.7
Basic earnings per share before goodwill amortisation and
exceptional items*
4.5p 14.5p 11.8p
Basic earnings/(loss) per share* (99.6)p 8.3p 11.4p
Dividends per share* 3.0p 2.8p 2.2p
* Earnings and dividends per share comparatives have been restated to reflect
the bonus issue and share split which took place in May 2000.
APPENDIX IV
DEFINITIONS
"ABN AMRO" ABN AMRO Corporate Finance Limited
"Australia" the Commonwealth of Australia, its states, territories or possessions
"Canada" Canada, its possessions, provinces and territories and all areas subject to
its jurisdiction or any political subdivision thereof
"City Code" The City Code on Takeovers and Mergers
"Close Brothers" Close Brothers Corporate Finance Limited
"CMG" CMG plc
"CMG Court Meeting" the meeting of CMG Shareholders to be convened by order of the Court
pursuant to section 425 of the Companies Act to consider and, if thought
fit, approve the Scheme, including any adjournment thereof
"CMG Shareholders" holders of CMG Shares
"CMG Shares" the existing unconditionally allotted or issued and fully paid ordinary
shares of 2.5 pence each in CMG and any further such shares which are
unconditionally allotted or issued (including pursuant to the exercise of
options under the CMG Share Option Schemes) before the Effective Date
"CMG Share Option Schemes" the CMG Company Share Option Plan, the CMG 1995 Savings-Related Share
Option Scheme, the Admiral 1997 Share Option Scheme and the Admiral Savings
Related Share Option Scheme
"Companies Act" the Companies Act 1985, as amended
"Court" The High Court of Justice in England and Wales
"CREST" the computerised settlement system to facilitate the transfer of title to
shares in uncertificated form, operated by CrestCo Limited
"Effective Date" the date on which the Scheme becomes effective and the Merger completes
"Enlarged Group" Logica (proposed to be renamed LogicaCMG plc) and its subsidiary
undertakings including CMG on completion of the Merger
"Euronext Amsterdam" as the context requires, Euronext Amsterdam N.V. or the Official Market
Segment of Euronext Amsterdam N.V.'s stock market
"Goldman Sachs" Goldman Sachs International
"Hoare Govett" Hoare Govett Limited
"ING Barings" ING Barings, the investment banking division of ING Bank N.V. (London
Branch)
"Japan" Japan, its cities, prefectures, territories and possessions
"Listing Rules" The Listing Rules of the UK Listing Authority
"Logica" Logica plc
"LogicaCMG" Logica on completion of the Merger, proposed to be renamed LogicaCMG plc
"LogicaCMG Share" the ordinary shares of 10 pence each in Logica proposed to be issued,
credited as fully paid pursuant to the Scheme and the Merger
"Logica Group" Logica and its subsidiary undertakings
"Logica Shareholders" holders of Logica Shares
"Logica Shares" the existing unconditionally allotted or issued and fully paid ordinary
shares of 10 pence each in Logica and any further such shares which are
unconditionally allotted or issued (including pursuant to the exercise of
options under the Logica Share Option Schemes) before the Effective Date
"Logica Share Option Schemes" The Logica 1995 UK Sharesave Scheme, the Logica 1995 International
Sharesave Scheme, the Logica 1996 Executive Share Option Scheme, the Logica
1990 Discretionary Share Option Plan, the Logica Discretionary Share Option
Plan, the Logica Executive Equity Partnership Plan, the Logica Employee
Equity Partnership Plan, the Logica US Stock Purchase Plan, the Logica BV
1990 Employee Share Option Plan and the Logica Share Related Bonus Scheme
"London Stock Exchange" London Stock Exchange plc or its successor
"Merger" the proposed merger of Logica and CMG by way of the Scheme as described in
this announcement
"Merger Agreement" the Merger Agreement entered into between Logica and CMG on the date of
this announcement
"Merrill Lynch" Merrill Lynch International
"Necigef" Nederlands Centraal Instituut voor Giraal Effectenverkeer B.V., the central
Dutch securities depository established pursuant to the provisions of the
Giro Securities Transfer Act
"Official List" The Official List of the UK Listing Authority
"Panel" the Panel on Takeovers and Mergers
"Proposed Directors" the persons listed as proposed directors of LogicaCMG in paragraph 5 of
this announcement and "Proposed Director" means any one of them
"Regulatory Information Service" any of the services set out in schedule 12 of the listing rules of the
United Kingdom Listing Authority, being the competent authority for the
purposes of Part VI of the Financial Services and Markets Act 2000
"Scheme" the proposed scheme of arrangement under section 425 of the Companies Act
between CMG and the CMG Shareholders for the purposes of the Merger, with
or subject to any modification, addition or condition approved or imposed
by the Court and agreed by Logica and CMG
"Securities Act" the United States Securities Act 1933, as amended
"Substantial Interest" a direct or indirect interest in 20 per cent. or more of the voting equity
capital of an undertaking
"UBS Warburg" UBS Warburg Limited
"United Kingdom" or "UK" the United Kingdom of Great Britain and Northern Ireland and its dependent
territories
"UK Listing Authority" United Kingdom Listing Authority
"United States" or "US" the United States of America, its territories and possessions, any state of
the United States of America and the District of Columbia and all other
areas subject to its jurisdiction and any political subdivision thereof
"Wider CMG Group" CMG and the subsidiaries and subsidiary undertakings of CMG and associated
undertakings, including any joint venture, partnership, firm or company in
which any member of the CMG Group is interested or any undertaking in which
CMG and such undertakings (aggregating their interests) have a Substantial
Interest
"Wider Logica Group" Logica and the subsidiaries and subsidiary undertakings of Logica and
associated undertakings, including any joint venture, partnership, firm or
company in which any member of the Logica Group is interested or any
undertaking in which Logica and such undertakings (aggregating their
interests) have a Substantial Interest
For the purposes of this announcement, subsidiary, subsidiary undertaking,
undertaking, and associated undertaking have the meanings given by the Companies
Act (but for this purpose ignoring paragraph 20(1)(b) of Schedule 4A of the
Companies Act).
END
This information is provided by RNS
The company news service from the London Stock Exchange
END
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