RNS No 1792b
CLEVELAND TRUST PLC
6 April 1999
PART 1
Not for release, publication or distribution in or into the
United States of America, Canada, Australia, Japan or the
Republic of Ireland
1 April 1999
Recommended Cash Offer
by
Cazenove & Co.
on behalf of
Ashtenne Holdings PLC
for
The Cleveland Trust Plc
- The boards of Ashtenne and Cleveland announce that
they have agreed the terms of a recommended cash offer
to be made by Cazenove, on behalf of Ashtenne, to
acquire the entire issued share capital of Cleveland.
- The Offer will be 111 pence for each Cleveland Share
payable in cash and values the entire issued share
capital of Cleveland at approximately #33 million.
- The directors of Cleveland consider the terms of the
Offer to be fair and reasonable in the circumstances,
although this advice should be read in conjunction
with the background statement set out in the full
announcement.
- The directors of Cleveland intend, in the absence of a
higher offer being announced before the first closing
date of the Offer, to accept or to recommend their
connected persons to accept the Offer in respect of
all the 1,912,807 Cleveland Shares, representing 6.4
per cent. of the issued share capital of Cleveland in
which they or their connected persons are interested.
- As announced on 25 February 1999, Ashtenne has
acquired an option (which expires on 11 May 1999) at
an exercise price of 105 pence per share, over
8,480,514 Cleveland Shares, representing 28.4 per
cent. of the issued share capital of Cleveland.
- The Offer represents a premium of approximately 47 per
cent. to the closing middle-market price of 75.5 pence
per Cleveland Share on 9 September 1998 (the last
dealing day prior to the announcement by Cleveland
that Trefick had acquired a 5.49 per cent holding in
the company) and a premium of 3 per cent. to the
closing middle-market price of 107.5 pence per
Cleveland Share on 26 March 1999, the last business
day before the commencement of the Offer Period.
- The Offer will be conditional, inter alia, upon the
approval of Ashtenne Shareholders.
This summary should be read in conjunction with the full
text of the following announcement. The formal Offer
Document will be despatched by Cazenove, on behalf of
Ashtenne, as soon as practicable.
Commenting on the Offer, Ian Watson and Morgan Jones Joint
Chief Executives of Ashtenne made the following statement:
"The acquisition of Cleveland is in line with our strategy
to increase our industrial holdings in the UK. It also
offers Cleveland Shareholders the opportunity to realise
their holdings for cash at what we believe to be an
attractive and fair price."
Enquiries
Ashtenne Holdings PLC Morgan Jones/Ian Watson 0171 930 9425
Cazenove & Co. Robert Pickering 0171 588 2828
Tavistock Communications Jeremy Carey/Vikki Hennen0171 600 2288
The Cleveland Trust Plc David Heynes 0171 823 2393
Hawkpoint Partners Limited Lawrence Guthrie 0171 665 4500
City Profile Group Limited Jonathan Gillen 0171 726 8588
Cazenove & Co., who are regulated by the Securities and
Futures Authority Limited, are acting for Ashtenne and no-
one else in connection with the Offer and will not be
responsible to anyone other than Ashtenne for providing the
protections afforded to customers of Cazenove & Co. or for
giving advice in relation to the Offer.
Hawkpoint Partners Limited, which is regulated by the
Securities and Futures Authority Limited, is acting for
Cleveland and no-one else in connection with the Offer and
will not be responsible to anyone other than Cleveland for
providing the protections afforded to customers of
Hawkpoint Partners Limited or for giving advice in relation
to the Offer.
The Offer will not be made, directly or indirectly, in or
into or by use of the mails, or any means or
instrumentality (including, without limitation, facsimile
transmission, telex or telephone) of interstate or foreign
commerce, or any facilities of a national securities
exchange of, the United States, nor will it be made in
Canada, Australia, Japan or the Republic of Ireland.
Accordingly, copies of this announcement and any other
document relating to the Offer, are not being, and must not
be, mailed or otherwise distributed or sent in, into or
from the United States, Canada, Australia, Japan or the
Republic of Ireland.
Not for release, publication or distribution in or into the
United States of America, Canada, Australia, Japan or the
Republic of Ireland.
1 April 1999
Recommended Cash Offer
by
Cazenove & Co.
on behalf of
Ashtenne Holdings PLC
for
The Cleveland Trust Plc
Introduction
The boards of Ashtenne and Cleveland announce that they
have agreed the terms of a recommended cash offer to be
made by Cazenove, on behalf of Ashtenne, to acquire the
entire issued share capital of Cleveland. The Offer values
each Cleveland Share at 111 pence and the entire issued
ordinary share capital of Cleveland at approximately #33
million. The Offer will be conditional, inter alia, upon
the approval of Ashtenne Shareholders. An Extraordinary
General Meeting of Ashtenne will be convened for the
purpose of seeking such approval.
Recommendation
In considering the Offer from Ashtenne the Board of
Cleveland has carefully reviewed Cleveland's position.
Cleveland has an attractive portfolio of industrial property
assets, a stable rental flow and, following the acquisition
of March Estates plc in December 1997, has established a
development programme. These factors, together, have
enabled Cleveland to pay attractive dividends to
shareholders in recent years. In addition, as a result of
applying a policy of augmenting capital value, the directors
of Cleveland believe there has been a significant increase
in net asset value during the financial year just ended.
The Offer Document will contain a formal updated valuation
of Cleveland's properties. Despite this good performance
but in common with many other small listed property
companies which have been shunned by investors, Cleveland's
shares traded at a significant discount to historic net
assets in the latter part of last year. In September 1998
Trefick Limited was able to commence building a shareholding
in Cleveland which has now risen to 28.4 per cent. and over
which it was announced on 25 February 1999 that Ashtenne had
acquired an option. The board of Cleveland is also aware
that some institutional shareholders would welcome an
opportunity to sell their shareholding now rather than
participate in Cleveland's longer term growth prospects.
Against this background and in the absence of a higher
offer, the Board of Cleveland believes that shareholders
should have the opportunity of considering Ashtenne's offer,
although it does not believe that this offer fully values
Cleveland.
The directors of Cleveland, who have been so advised by
Hawkpoint Partners Limited, consider the terms of the Offer
to be fair and reasonable. This recommendation should,
however, be read against the background set out above. In
providing advice to the board of Cleveland, Hawkpoint has
taken account of the commercial assessments of the directors
of Cleveland.
The directors of Cleveland and their connected persons are,
in aggregate, interested in 1,912,807 Cleveland Shares
representing 6.4 per cent. of Cleveland's issued share
capital. In the absence of a higher offer being announced
before the first closing date of the Offer, the directors of
Cleveland intend to accept the Offer in respect of those
Cleveland Shares which they beneficially own and will
recommend to their connected persons that they accept the
Offer in respect of the balance of those Cleveland Shares.
The Offer
On behalf of Ashtenne, Cazenove will offer to acquire,
subject to the conditions set out in Appendix I and the
further terms to be set out in the formal Offer Document
and the Form of Acceptance that will accompany it, the
entire issued share capital of Cleveland on the following
basis:
For each Cleveland Share 111 pence in cash
The Offer represents a premium of approximately 47 per
cent. to the closing middle-market price of 75.5 pence per
Cleveland Share on 9 September 1998 (the last dealing day
prior to the announcement by Cleveland that Trefick had
acquired a 5.49 per cent holding in Cleveland) and a
premium of 3 per cent. to the closing middle-market price
of 107.5 pence per Cleveland Share on 26 March 1999, the
last business day before the announcement by Cleveland that
it was in discussions which may lead to an offer.
Cleveland Shares will be acquired under the Offer free from
all liens, equities, charges, encumbrances and other
interests together with all rights now and hereafter
attaching to them including the right to receive and retain
all dividends and other distributions declared, made or
paid after the date of this announcement.
The Offer will be subject to the conditions set out in
Appendix I to this announcement and those further terms
contained in the Offer Document and the Form of Acceptance,
or otherwise as may be required to comply with the
provisions of the City Code.
Information on Ashtenne
Ashtenne is a specialist property company with a portfolio
of 7.5 million sq.ft. of industrial property and 680 acres
of developable land on 108 estates and an annualised rent
roll of #18.1 million. Since its flotation in July 1997,
Ashtenne has built up a major presence in the United
Kingdom, particularly in Wales and Scotland, and is one of
the largest industrial landlords in both regions.
For the year ended 31 December 1998, net rental income of
the Ashtenne Group was #16.1 million (1997: #9.6 million)
and profit before taxation was #12.5 million (1997: #7.6
million). As at 31 December 1998, Ashtenne's net assets
were #114.8 million (1997: #99.7 million).
Information on Cleveland
The principal activities of Cleveland are the acquisition,
management, trading and development of investment
properties in the industrial sector. It also owns and
operates the Port of Boston in Lincolnshire.
For the year ended 31 March 1998, the Cleveland Group's
turnover was #9.1 million (1997: #7.7 million) and profit
before taxation was #2.3 million (1997: #2.0 million) after
profits on sales of investment properties of #0.7 million.
As at 31 March 1998, the audited net assets of the
Cleveland Group were #32.5 million. In the Cleveland
Group's unaudited interim results for the six months to 30
September 1998, the Cleveland Group reported profit before
taxation of #1.3 million on turnover of #5.0 million. As at
30 September 1998, the unaudited net assets of the
Cleveland Group were #33 million.
Background to the Offer
Ashtenne specialises in the acquisition, active management
and profitable disposal of industrial estates and
portfolios. This specialisation enables the Ashtenne Group
to combine a very strong cashflow with high returns on
shareholder capital.
The Cleveland portfolio consists of the category of
properties in which Ashtenne typically invests and is in
geographical locations which complement Ashtenne's existing
portfolio. Being specialists in the area, Ashtenne believes
the acquisition of Cleveland to be in line with its
purchase criteria.
De-listing
Subject to the Offer becoming or being declared
unconditional in all respects or in accordance with the
requirements of the London Stock Exchange, Ashtenne
intends, as soon thereafter as it is appropriate to do so,
to apply for the cancellation of Cleveland's listing on the
Official List of the London Stock Exchange.
Financing of the Offer
The cash consideration payable under the Offer will be
financed from the existing cash resources held by Ashtenne
for the purposes of making the Offer.
Cleveland Management and employees
Ashtenne has given assurances to the board of Cleveland
that the existing rights, including pension rights, of all
employees of the Cleveland Group will be fully safeguarded.
Cleveland Share Option Scheme
The Offer will extend to all Cleveland Shares issued or
unconditionally allotted upon the exercise of options under
the Cleveland Share Option Scheme whilst the Offer remains
open for acceptance or until such earlier date as, subject
to the City Code, Ashtenne may decide. Appropriate
proposals will be made, in due course, to holders of
options over Cleveland Shares once the Offer becomes or is
declared unconditional in all respects.
Disclosure of interests in Cleveland Shares
On 25 February 1999, Ashtenne entered into an Option with
Trefick to purchase Trefick's holding of 8,480,514
Cleveland Shares, representing 28.4 per cent. of the issued
share capital of Cleveland, at a price of 105 pence per
Cleveland Share. In consideration of the grant of this
Option, Trefick has an option to require Ashtenne to
purchase its shares at 105 pence per share. In each case,
exercise is conditional upon Ashtenne obtaining shareholder
approval and, in each case, the expiry date for the Option
is 11 May 1999.
Save as disclosed above, neither Ashtenne nor any of its
Directors nor, so far as Ashtenne is aware, any party
acting in concert with Ashtenne, owns or controls any
Cleveland Shares or holds any options to purchase Cleveland
Shares or holds any derivatives referenced to Cleveland
Shares.
General
This document does not constitute, or form part of, any
offer for, or solicitation of any offer for, securities.
Any acceptance or other response to the Offer should be
made only on the basis of the information contained in the
Offer Document which Ashtenne will dispatch to Cleveland
Shareholders, and for information only to holders of
options under the Cleveland Share Option Scheme, as soon as
practicable.
The directors of Ashtenne accept responsibility for the
information contained in this announcement, other than that
relating to the Cleveland Group, the directors of
Cleveland, members of their immediate families and persons
connected with the directors of Cleveland. To the best of
the knowledge and belief of the directors of Ashtenne (who
have taken all reasonable care to ensure that such is the
case), the information for which they accept responsibility
is in accordance with the facts and does not omit anything
likely to affect the import of such information.
The directors of Cleveland accept responsibility for the
information contained in this announcement relating to the
Cleveland Group, directors of Cleveland, members of their
immediate families and persons connected with the directors
of Cleveland. To the best of the knowledge and belief of
the directors of Cleveland (who have taken all reasonable
care to ensure that such is the case), the information for
which they accept responsibility is in accordance with the
facts and does not omit anything likely to affect the
import of such information.
In view of the size of Cleveland, and in order to implement
the Offer, a circular containing details of the Offer and a
notice convening an Extraordinary General Meeting to seek
approval for the acquisition of Cleveland and the exercise
of the Option will be dispatched to Ashtenne Shareholders
as soon as is practicable.
This announcement, which is the sole responsibility of
Ashtenne, has been approved solely for the purpose of
Section 57 of the Financial Services Act 1986, by Cazenove,
who are regulated by The Securities and Futures Authority
Limited.
Certain terms used in this announcement are defined in
Appendix II.
The Cleveland share price information set out in this
announcement is derived from the Daily Official List of the
London Stock Exchange.
Enquiries
Ashtenne Holdings PLC Morgan Jones/Ian Watson 0171 930 9425
Cazenove & Co. Robert Pickering 0171 588 2828
Tavistock Communications Jeremy Carey 0171 600 2288
Vikki Hennen
The Cleveland Trust Plc David Heynes 0171 823 2393
Hawkpoint Partners Limited Lawrence Guthrie 0171 665 4500
City Profile Group Limited Jonathan Gillen 0171 726 8588
Cazenove & Co., who are regulated by the Securities and Futures
Authority Limited, is acting for Ashtenne and no-one else in
connection with the Offer and will not be responsible to anyone
other than Ashtenne for providing the protections afforded to
customers of Cazenove & Co. or for giving advice in relation to
the Offer.
Hawkpoint Partners Limited, which is regulated by the
Securities and Futures Authority Limited, is acting for
Cleveland and no-one else in connection with the Offer and will
not be responsible to anyone other than Cleveland for providing
the protections afforded to customers of Hawkpoint Partners
Limited. or for giving advice in relation to the Offer.
The Offer will not be made, directly or indirectly, in or into
or by use of the mails, or any means or instrumentality
(including, without limitation, facsimile transmission, telex
or telephone) of interstate or foreign commerce, or any
facilities of a national securities exchange of, the United
States, nor will it be made in Canada, Australia, Japan or the
Republic of Ireland. Accordingly, copies of this announcement
and any other document relating to the Offer, are not being,
and must not be, mailed or otherwise distributed or sent in,
into or from the United States, Canada, Australia, Japan or
the Republic of Ireland.
MORE TO FOLLOW
OFFUBUUWCBGBUMQ
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