RNS Number:3868D
Erinaceous Group PLC
27 September 2004
27 September 2004
THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR
IN PART, IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA OR JAPAN
RECOMMENDED OFFER
by
COLLINS STEWART LIMITED
on behalf of
ERINACEOUS GROUP PLC
for
HERCULES PROPERTY SERVICES PLC
Summary
The directors of Erinaceous Group plc ("Erinaceous") and the directors of
Hercules Property Services plc ("Hercules") announce that they have reached
agreement on the terms of a recommended cash and share offer (the "Offer") to be
made by Collins Stewart Limited on behalf of Erinaceous for the entire issued
and to be issued ordinary share capital of Hercules.
The Offer will be made on the following basis: 45 pence in cash and 2.183 New
Erinaceous Shares for each Hercules Share. Based on the average Closing Price of
an Erinaceous Share for the three days ended 24 September 2004 (the last
practicable day prior to the date of this announcement), the Offer values each
Hercules Share at 350 pence and the entire existing issued share capital of
Hercules at approximately #67.4 million. On this basis, the Offer represents a
premium of 25.2 per cent. to the Closing Price of 279.5 pence per Hercules Share
on 14 September 2004 (the day before the announcement that the Hercules Board
was in talks that might lead to an offer for Hercules) and a premium of 14.4 per
cent. to the Closing Price of 306 pence per Hercules Share on 24 September 2004
(being the last practicable date prior to this announcement of the Offer).
The full terms and conditions of the Offer (including details of how the Offer
may be accepted) will be set out in the offer document to be dated 28 September
2004 (the "Offer Document") and in the Form of Acceptance.
Eagle has received irrevocable undertakings to accept the Offer from certain of
the Hercules Directors in respect of 24,828 Hercules Shares in aggregate,
representing approximately 0.13 per cent. of Hercules' current issued share
capital. The terms of these irrevocable undertakings require acceptance of the
Offer even in the event of a competing offer for Hercules from a third party.
The Erinaceous Board believes that the acquisition of Hercules would bring
considerable additional benefits to the Enlarged Group. The activities of
Erinaceous and Hercules overlap in several areas - residential and commercial
property management and insurance in the private and public sectors. The
consolidation of these activities into common ownership is expected to result in
considerable economies of scale and benefit from cross selling services to the
customer base of the Enlarged Group. In addition, it is anticipated that the
Enlarged Group will be of sufficient size and have sufficient shares not under
the direct control of management to attract wider interest in the investment
community.
Enquiries:
Erinaceous Neil Bellis Tel: 0870 706 9301
Collins Stewart Andrew Dawber/Chris Howard Tel: 020 7523 8350
Hercules Nigel Davis Tel: 020 8420 7600
Investec Rupert Krefting/James Grace Tel: 020 7597 5970
Gavin Anderson Mark Lunn/Robert Speed Tel: 020 7554 1400
Collins Stewart Limited, which is authorised and regulated in the United Kingdom
by the Financial Services Authority, is acting exclusively for Erinaceous and no
one else in connection with the Offer and will not be responsible to anyone
other than Erinaceous for providing the protections afforded to clients of
Collins Stewart Limited nor for providing advice in relation to the Offer, the
contents of this announcement, or the Form of Acceptance.
Investec Bank (UK) Limited, which is authorised and regulated in the United
Kingdom by the Financial Services Authority, is acting exclusively for Hercules
and no one else in connection with the Offer and will not be responsible to
anyone other than Hercules for providing the protections afforded to customers
of Investec nor for providing advice in relation to the Offer.
This summary should be read in conjunction with the full text of the following
announcement which sets out further details of the Offer and which forms an
integral part of this announcement. The Offer will be subject to the conditions
set out in Appendix A to this announcement and the further terms, which will be
set out in the Offer Document and the Form of Acceptance.
Appendix B contains definitions of the terms used in this announcement.
The availability of the Offer to Hercules Shareholders who are not resident in
the United Kingdom may be affected by the laws of the relevant jurisdictions in
which they are located. Hercules Shareholders who are not resident in the United
Kingdom should inform themselves of, and observe, any applicable requirements.
The Offer will not be made, directly or indirectly, in or into, or by use of the
mails or any other means of instrumentality (including, without limitation,
facsimile transmission, telex or telephone) of interstate or foreign commerce,
or of any facilities of a national securities exchange of the United States,
Canada, Australia or Japan and will not be capable of acceptance by any such
use, means, instrumentality or facilities, or from within the United States,
Canada, Australia or Japan. Accordingly, copies of this announcement are not
being, and must not be, mailed or otherwise distributed or sent in or into or
from the United States, Canada, Australia or Japan and persons receiving this
announcement (including custodians, nominees and trustees) must not distribute
or send it in or into or from the United States, Canada, Australia or Japan or
use such mails or any such means, instrumentality or facility in connection with
the Offer as doing so may invalidate any purported acceptance of the Offer.
This announcement does not constitute an offer or an invitation to purchase any
securities.
The contents of this announcement have been approved for the purposes of section
21 of the Financial Services and Markets Act 2000 by Collins Stewart Limited.
Collins Stewart Limited is authorised by the Financial Services Authority for
investment business activities. The address of Collins Stewart Limited is 9th
Floor, 88 Wood Street, London, EC2V 7QR.
THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR
IN PART, IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA OR JAPAN. IT IS NOT AN
EXTENSION OF A TENDER OFFER OR AN OFFER OF SECURITIES FOR SALE IN OR INTO THE
UNITED STATES, CANADA, AUSTRALIA OR JAPAN.
RECOMMENDED OFFER
BY
COLLINS STEWART Limited
ON BEHALF OF
ERINACEOUS GROUP PLC
FOR
HERCULES PROPERTY SERVICES PLC
1 Introduction
The directors of Erinaceous Group plc ("Erinaceous") and the directors of
Hercules Property Services plc ("Hercules") today announce that they have
reached agreement on the terms of a recommended cash and share offer (the "Offer
") to be made by Collins Stewart Limited on behalf of Erinaceous for the entire
issued and to be issued ordinary share capital of Hercules.
The Offer will be made on the following basis: 45 pence in cash and 2.183 New
Erinaceous Shares for each Hercules Share. Based on the average Closing Price of
an Erinaceous Share for the three days ended 24 September 2004 (the last
practicable date prior to the publication of this announcement), the Offer
values each Hercules Share at 350 pence and the entire existing issued share
capital of Hercules at approximately #67.4 million. On this basis, the Offer
represents a premium of 25.2 per cent. to the Closing Price of 279.5 pence per
Hercules Share on 14 September 2004 (the day before the announcement that the
Hercules Board was in talks that might lead to an offer for Hercules) and a
premium of 14.4 per cent. to the Closing Price of 306 pence per Hercules Share
on 24 September 2004 (being the last practicable date prior to this announcement
of the Offer).
Erinaceous has received irrevocable undertakings to accept the Offer in respect
of 0.13 per cent. of the current issued ordinary share capital of Hercules.
Further details of these undertakings are provided in paragraph 4 below.
2 The Offer
The Offer, which will be made on the terms and subject to the conditions
summarised below and in Appendix A to this announcement and to the further terms
which will be set out in the Offer Document and the accompanying Form of
Acceptance, will be made on the following terms:
for each Hercules Share 45 pence in cash and 2.183 New Erinaceous
Shares
and so in proportion for any other number of Hercules Shares held. Fractional
entitlements to New Erinaceous Shares will be rounded down and will not be
issued.
The Offer will extend to any Hercules Shares issued or unconditionally allotted
while the Offer remains open for acceptance, including any Hercules Shares
issued or unconditionally allotted pursuant to the exercise of options under the
Hercules Share Schemes.
Hercules Shares will be acquired by Erinaceous fully paid and free from all
liens, equities, charges, encumbrances, rights of pre-emption and other third
party interests of any nature whatsoever and together with all rights now or
hereafter attaching thereto, including, without limitation, the right to receive
and retain in full all dividends and other distributions declared or made since
30 June 2004, being the date to which Hercules's last annual audited accounts
were prepared, including the final dividend proposed by Hercules on 15 September
2004 in its announcement of Hercules's preliminary final results.
The New Erinaceous Shares will be issued credited as fully paid and will rank
pari passu in all respects with the existing Erinaceous Shares, including the
right to receive and retain in full all dividends and other distributions made,
paid or declared after the date of this announcement, including any interim
dividend which may be declared by Erinaceous in respect of the 6 month period
ending 30 September 2004.
3 Recommendation
The Hercules Directors, who have been so advised by Investec, consider the terms
of the Offer to be fair and reasonable so far as Hercules Shareholders are
concerned. In providing advice to the Hercules Directors, Investec has taken
into account the Hercules Directors' commercial assessments.
Accordingly, the Hercules Directors unanimously recommend all Hercules
Shareholders to accept the Offer, as they have irrevocably undertaken to do in
respect of their own beneficial holdings of in aggregate 24,828 Hercules Shares
(representing approximately 0.13 per cent. of the Hercules Shares in issue).
4 Irrevocable Undertakings to Accept the Offer
Erinaceous has received irrevocable undertakings to accept the Offer from
certain of the Hercules Directors in respect of 24,828 Hawk Shares in aggregate,
representing approximately 0.13 per cent. of Hercules' current issued share
capital and the terms of these irrevocable undertakings require acceptance of
the Offer even in the event of a competing offer for from a third party
5 Information on Erinaceous and the Financing of the Offer
The Erinaceous Group provides clients in both the public and private sectors
with a one-stop shop for property services. It comprises a number of long
established businesses covering a broad range of activities, including services
in the fields of residential lettings, insurance, building consultancy and
housing management.
Central to the Erinaceous Group's successful development has been the Erinaceous
Directors' strategy of establishing a business capable of meeting the diverse
requirements of private and public sector clients in an efficient and seamless
manner. This approach, the Erinaceous Directors believe, reduces the inherent
risk of being over-dependent on a particular sector or particular clients.
For the year ended 31 March 2004, Erinaceous reported a turnover of #42.2
million (2003: #33.7 million) and a profit on ordinary activities before
taxation of #4.3 million (2003: #2.2 million). As at 31 March 2004, Erinaceous
had net assets of #29.1 million (2003: #18.5 million).
It is estimated that full acceptance of the Offer would require the payment by
Erinaceous, under the terms of the Offer, of a maximum amount of approximately
#10 million in cash to accepting Hercules Shareholders. The funds required to
make payment under the Offer will be satisfied from the existing banking
facilities of Erinaceous.
6 Information on Hercules
Hercules's trading businesses are grouped into three business segments, namely a
residential property division, a commercial property division and a property
insurance division. The residential property division operates three
businesses: Wood Simmonds - managers of prestigious residential blocks in
Central London and the South East; Gross Fine - specialists in the management of
residential property; and Simmonds and Partners - a surveyors and valuers
business for the residential property sector. The commercial property division
operates four businesses focussed on providing commercial property advice:
Dunlop Heywood Lorenz - providers of commercial property advice; Michael
Courcier and Partners - town planning consultants; Harman Healy Commercial
Auctions - commercial property auctioneers; and Harman Healy Residential
Auctions - an auction house specialising in residential properties. The
property insurance division operates two businesses: Cadogan and Deacon -
commercial property insurance intermediary and brokers; and Farr - insurance and
risk management advisers to the UK housing association sector.
For the year ended 30 June 2004, Hercules reported turnover of #43.3 million
(2003: #41.7 million) and a profit on ordinary activities before taxation of
#5.4 million (2003: #4.3 million). As at 30 June 2004, Hercules had net assets
of #60.2 million (2003: #56.7 million).
7 Background to and Reasons for the Offer
The Erinaceous Board believes that the acquisition of Hercules by Erinaceous
would bring considerable additional benefits to the Enlarged Group. The
activities of Erinaceous and Hercules overlap in several areas - residential and
commercial property management and insurance in the private and public sectors.
The consolidation of these activities into common ownership is expected to
result in considerable economies of scale and benefit from cross selling
services to the customer base of the Enlarged Group. In addition, it is
anticipated that the Enlarged Group will be of sufficient size and have
sufficient shares not under the direct control of management to attract wider
interest in the investment community.
8 Directors, Management and Employees
It is intended that the Board of the Enlarged Group will comprise the following
persons:-
Nigel Victor Turnbull (Chairman)
Neil Graham Bellis (Chief Executive Officer)
Lucy Clare Cummings (Commercial Director)
Nigel Peter Davis (Finance Director)
Danny Innes (Executive Director)
Michael Pearson (Executive Director)
Kenneth John Gordon Hackney (Executive Director)
Jonathan Michael Gooding (Executive Director)
Lord Edward Timothy Razzall (Senior Non-Executive Director)
Keith Vaughan Peraux (Non-Executive Director)
The Erinaceous Board has confirmed that the existing employment rights,
including pension rights, of all employees of Hercules will be fully
safeguarded.
9 Hercules Share Schemes
The Offer will extend to any Hercules Shares issued or unconditionally allotted
while the Offer remains open for acceptance (or until such earlier date as
Erinaceous may, subject to the City Code, decide) including any Hercules Shares
which are issued or unconditionally allotted as a result of the exercise of
options or other rights granted under the Hercules Share Schemes.
A letter will be sent to participants in the Hercules Share Schemes after the
Offer becomes or is declared unconditional in all respects setting out in detail
the proposals to be made to those participants in respect of their options or
rights under the Hercules Share Schemes.
10 Cancellation of Hercules Listing, Compulsory Acquisition and Listing
and Dealing in Erinaceous Shares
Applications will be made to the UK Listing Authority for the existing
Erinaceous Shares and the New Erinaceous Shares to be admitted to the Official
List and for the admission of the existing Erinaceous Shares and New Erinaceous
Shares to trading on the London Stock Exchange's market for listed securities ("
Admission"). It is expected that Admission will become effective and that
dealings in the existing Erinaceous Shares and the New Erinaceous Shares will
commence as soon as practicable following the date on which the Offer is
declared unconditional in all respects (other than as regards the condition
relating to Admission). The Offer is conditional on Admission.
In the event of the Offer becoming or being declared unconditional in all
respects, Erinaceous intends, as soon as it is appropriate thereafter, to
procure the making of an application by Hercules to the UK Listing Authority for
cancellation of the listing of Hercules Shares on the Official List. It is
anticipated that cancellation of Hercules's listing will take effect
simultaneously with Admission.
In the event of sufficient acceptances being obtained under the Offer,
Erinaceous intends to exercise its rights under the provisions of sections 428
to 430(F) (inclusive) of the Companies Act to acquire compulsorily any remaining
Hercules Shares to which the Offer relates.
Under these provisions, Erinaceous will, upon having acquired or contracted to
acquire by virtue of acceptances of the Offer, 90 per cent. or more in nominal
value of the Hercules Shares to which the Offer relates, notify holders of any
outstanding Hercules Shares that it wishes to acquire such shares. Upon such
notices being issued, the procedure stipulated in sections 428 to 430(F)
(inclusive) of the Companies Act will apply and, barring any intervention by the
court, Erinaceous will be entitled to acquire compulsorily all outstanding
Hercules Shares to which the Offer relates.
The Erinaceous Shares are currently admitted to trading on AIM. Under the AIM
Rules, the acquisition of Hercules by Erinaceous will require the approval of
Erinaceous shareholders, which will be sought at an Extraordinary General
Meeting of Erinaceous expected to be held on 15 October 2004.
The Erinaceous Directors are recommending that Erinaceous shareholders vote in
favour of the resolution to be proposed at the Extraordinary General Meeting, as
they have irrevocably undertaken to do in respect of their own beneficial
holdings, which in aggregate amount to 27,732,248 Erinaceous Shares,
representing approximately 62 per cent. of the existing issued ordinary share
capital of Erinaceous.
Pursuant to rule 39 of the AIM Rules, Erinaceous hereby gives notice of the
intended cancellation of trading of the existing Erinaceous Shares on AIM. It
is anticipated that this will take effect simultaneously with Admission.
11 General
The Offer will be subject to the applicable requirements of the City Code. The
formal Offer Document, setting out details of the Offer, and enclosing the Form
of Acceptance, is expected to be despatched to Hercules Shareholders on 28
September 2004. This announcement does not constitute an offer or an invitation
to purchase any securities.
The availability of the Offer to persons not resident in the United Kingdom may
be affected by the laws of the relevant jurisdiction. Persons who are not
resident in the United Kingdom, or who are subject to the laws of any
jurisdiction other than the United Kingdom, should inform themselves about and
observe any applicable requirements. Further details in relation to Overseas
Shareholders will be contained in the Offer Document.
The Offer will not be made, directly or indirectly, in or into, or by use of the
mails or any other means or instrumentality (including, without limitation,
facsimile transmission, electronic mail, telex or telephone) of interstate or
foreign commerce, or of any facilities of a national, state or other securities
exchange of the United States, Canada, Australia or Japan or any other
jurisdiction if to do so would constitute a violation of the relevant laws of
such jurisdiction and will not be capable of acceptance by any such use, means,
instrumentality or facilities, from within the United States, Canada, Australia
or Japan or any such jurisdiction. Accordingly, copies of this document and the
Form of Acceptance are not being, and must not be, mailed or otherwise
distributed or sent in or into or from the United States, Canada, Australia or
Japan or any such jurisdiction and persons receiving this document (including
custodians, nominees and trustees) must not distribute or send it in or into or
from the United States, Canada, Australia or Japan or any such jurisdiction or
use such mails or any such means, instrumentality or facility in connection with
the Offer as doing so may invalidate any purported acceptance of the Offer.
The Directors of Erinaceous accept responsibility for the information contained
in this announcement relating to Erinaceous, the Directors of Erinaceous, their
immediate families and persons connected with them.
The Directors of Hercules accept responsibility for the information contained in
this announcement relating to Hercules, the Directors of Hercules , their
immediate families and persons connected with them.
To the best of the knowledge and belief of the Directors of Hercules and the
Directors of Erinaceous (who have taken all reasonable care to ensure that such
is the case) the information contained in this announcement for which they are
responsible is in accordance with the facts and does not omit anything likely to
affect the import of such information.
Collins Stewart Limited, which is authorised and regulated in the United Kingdom
by the Financial Services Authority, is acting exclusively for Erinaceous and
for no-one else in connection with the Offer and will not be responsible to
anyone other than Erinaceous for providing the protections afforded to clients
of Collins Stewart Limited nor for providing advice in relation to the Offer,
the contents of this announcement or the Form of Acceptance.
Investec, which is authorised and regulated in the United Kingdom by the
Financial Services Authority, is acting exclusively for Hercules and for no-one
else in connection with the Offer and will not be responsible to any person
other than Hercules for providing the protections afforded to customers of
Investec, nor for providing advice in relation to the Offer, the contents of
this announcement or the Form of Acceptance.
Appendix B to this announcement contains definitions of certain expressions used
in this announcement.
Enquiries:
Erinaceous Neil Bellis Tel: 0870 706 9301
Collins Stewart Andrew Dawber/Chris Howard Tel: 020 7523 8350
Hercules Nigel Davis Tel: 020 8420 7600
Investec Rupert Krefting/James Grace Tel: 020 7597 5970
Gavin Anderson Mark Lunn/Robert Speed Tel: 020 7554 1400
Appendix A: Conditions of the Offer
The Offer is subject to the following conditions:
(a) valid acceptances of the Offer being received (and not, where
permitted, withdrawn) by no later than 3.00 p.m. on 19 October 2004 (or such
later time(s) and/or date(s) as Erinaceous may, subject to the rules of the City
Code, decide) in respect of not less than 90 per cent. (or such lesser
percentage as Erinaceous may decide) in nominal value of the Hercules Shares to
which the Offer relates, provided that, unless agreed by the Panel, this
condition will not be satisfied unless Erinaceous shall have acquired or agreed
to acquire, whether pursuant to the Offer or otherwise, Hercules Shares carrying
in aggregate more than 50 per cent. of the voting rights then normally
exercisable at general meetings of Hercules, including for this purpose, to the
extent (if any) required by the Panel, any voting rights attaching to any
Hercules Shares unconditionally allotted or issued before the time at which the
Offer becomes or is declared unconditional as to acceptances, whether pursuant
to the exercise of any outstanding subscription or conversion rights or options
or otherwise.
For the purposes of this condition:
(i) the expression "Hercules Shares to which the Offer relates"
shall be construed in accordance with sections 428 to 430(F) (inclusive) of the
Companies Act; and
(ii) shares which have been unconditionally allotted but not issued
shall be deemed to carry the voting rights which they will carry upon their
being entered into the register of members of Hercules;
(b) neither the proposed acquisition of Hercules by Erinaceous nor any
matter arising from such acquisition being referred to the Competition
Commission or any other competition or regulatory authority, and no indication
being received that any such reference might be made;
(c) the shareholders of Erinaceous passing the resolution to be
proposed at the EGM (or any adjournment thereof) to approve, implement and
effect the Offer and authorise the Directors of Erinaceous to allot the New
Erinaceous Shares in accordance with the terms of the Offer;
(d) the UKLA and the London Stock Exchange having announced the
admission of the existing Erinaceous Shares and the New Erinaceous Shares to be
issued pursuant to the Offer to listing on the Official List and to trading on
the London Stock Exchange's market for listed securities;
(e) no government or governmental or quasi-governmental authority
(whether supra-national, national, regional, local or otherwise) or statutory or
regulatory or investigative body or other authority (including any anti-trust or
merger control authority), court, trade agency, association, institution or
professional or environmental body or (without prejudice to the generality of
all the foregoing) any other body or person (in each case) in any jurisdiction
(each a "Relevant Authority") having decided to intervene that would or might:
(i) make the Offer, its implementation or the proposed acquisition
of any Hercules Shares, or the acquisition by Erinaceous of any shares in or
control of Hercules, void, unenforceable or illegal in any jurisdiction or
otherwise directly or indirectly restrain, restrict, prohibit, delay or
otherwise adversely interfere with the implementation of, or impose additional
conditions or obligations with respect to, or otherwise challenge or impede or
require amendment to the terms of, the Offer or the acquisition of any Hercules
Shares or the acquisition of control of Hercules;
(ii) impose any material limitation resulting in a material delay in
the ability of any member of the Erinaceous Group, or render any member of the
Erinaceous Group unable, to acquire all or some of the Hercules Shares or other
securities in Hercules or require, prevent or materially delay a divestiture by
the Erinaceous Group of any Hercules Shares or other securities in Hercules;
(iii) require, prevent or materially delay the divestiture or alter the
terms of any proposed divestiture by the Erinaceous Group (in connection with
the Offer) or by the Hercules Group of all or any material part of their
respective businesses, assets or property or impose any material limitation on
the ability of any of them to conduct all or any material portion of their
respective businesses or to own all or any material portion of their respective
assets or property;
(iv) impose any material limitation on or result in a material delay in
the ability of any member of the Erinaceous Group or any member of the Hercules
Group to acquire or hold or to exercise effectively, directly or indirectly, all
or any rights of ownership in respect of shares or loans or securities
convertible into shares or the equivalent in any member of the Hercules Group or
to exercise management control over Hercules or any other member of the Hercules
Group;
(v) require any member of the Erinaceous Group or any member of the
Hercules Group to acquire or to offer to acquire or repay directly or indirectly
any shares or other securities or other interests in any member of the
Erinaceous Group or the Hercules Group owned by any third party;
(vi) impose any material limitation on the ability of any member of the
Hercules Group or the Erinaceous Group to co-ordinate or integrate its business,
or any material part of it, with the business of any other member of the
Hercules Group; or
(vii) otherwise materially and adversely affect the business, assets,
profits or prospects of any member of the Erinaceous Group or any member of the
Hercules Group;
and all applicable waiting and other time periods during which any such Relevant
Authority could decide to intervene under the laws of any jurisdiction having
expired, lapsed or been terminated;
(f) all necessary filings or applications having been made, all
applicable waiting and other periods (including any extension thereof) under any
applicable legislation or regulations in any jurisdiction having expired, lapsed
or been terminated, in each case for or in respect of the Offer and the proposed
acquisition of any shares or other securities in, or control of, Hercules by
Erinaceous or any member of the Erinaceous Group, and all required
authorisations, orders, grants, recognitions, confirmations, consents,
clearances, licences, certificates, permissions, exemptions and approvals deemed
necessary or appropriate by Erinaceous acting reasonably in any jurisdiction for
or in respect of the Offer and the proposed acquisition of any shares or other
securities in, or control of, Hercules by Erinaceous or any member of the
Erinaceous Group or to carry on the business of any member of the Hercules Group
("Authorisations") having been obtained on terms and in a form satisfactory to
Erinaceous (acting reasonably) from all Relevant Authorities, or any other
bodies, entities or persons whatever in any jurisdiction with whom any member of
the Hercules Group has entered into contractual arrangements that are material
in the context of the Hercules Group taken as a whole (where, in the case of the
carrying on of business of any member of the Hercules Group, the absence of such
Authorisations would have a material adverse effect on the Hercules Group taken
as a whole) and all such Authorisations remaining in full force and effect and
there being no intimation or notice of any intention to revoke, suspend,
restrict, materially modify or not renew any of the same at the time at which
the Offer becomes otherwise unconditional and all necessary statutory or
regulatory obligations in any jurisdiction which are material in the context of
the Offer, the proposed acquisition of any shares or other securities in, or
control of, Hercules by Erinaceous or any member of the Erinaceous Group having
been complied with;
(g) save as publicly announced by Hercules (by the delivery of an
announcement to a Regulatory Information Service) prior to 27 September 2004 or
as disclosed in writing by or on behalf of Hercules to Erinaceous or its
professional advisers prior to 27 September 2004 ("Disclosed"), there being no
provision of any agreement, arrangement, licence, permit, franchise or other
instrument to which any member of the Hercules Group is a party or by or to
which any such member or any of their assets may be bound, entitled or be
subject which, as a direct result of the Offer or an acquisition by Erinaceous
of the Hercules Shares or any of them, or change in the management or control of
Hercules or the acquisition of control of Hercules by Erinaceous would or might
reasonably be expected, to an extent which is material and adverse in the
context of the wider Hercules Group taken as a whole, to result in:
(i) any monies borrowed by, or any other indebtedness or liability
(actual or contingent) of, or any grant available to, any such member of the
Hercules Group being or becoming repayable or capable of being declared
repayable immediately or earlier than the repayment date stated in such
agreement, arrangement, licence, permit or other instrument, or the ability of
any such member to borrow monies or incur any indebtedness being, or becoming
capable of being, withdrawn or inhibited;
(ii) the rights, liabilities, obligations or interests of any other member
of the wider Hercules Group under any such agreement, arrangement, licence,
permit, franchise or other instrument or the interests or business of any such
member in or with any other firm or body or person (or any agreement or
arrangement relating to such interests or business) being terminated, or
adversely modified or affected or any adverse action being taken or any onerous
obligation or liability arising thereunder;
(iii) the interest or business of any member of the Hercules Group in or
with any person, firm, company or body (or arrangements relating to such
interest or business) being terminated or modified or affected;
(iv) any assets or interests of any member of the Hercules Group being or
falling to be disposed of or charged, or any right arising under which any such
asset or interest could be required to be disposed of or charged or could cease
to be available to any such member otherwise than in the ordinary course of
business;
(v) the creation of any mortgage, charge or other security interest over the
whole or any part of the business, property or assets of any such member of the
Hercules Group otherwise than in the ordinary course of business, or any such
security (wherever arising or having arisen) becoming enforceable;
(vi) the respective value or financial or trading position or prospects of
any such member of the Hercules Group being prejudiced or adversely affected;
(vii) any such member of the Hercules Group ceasing to be able to carry on
business under any name under which it presently does so; or
(viii) the creation of liabilities (actual or contingent) by any such
member of the Hercules Group; and
no event having occurred which, under any provision of any agreement,
arrangement, licence, permit, franchise or other instrument to which any member
of the Hercules Group is a party or to which any member or any of its assets may
be bound, entitled or subject, could result in any of the events of
circumstances referred to in sub-paragraphs (i) to (viii) of this paragraph (g)
in any case to an extent which is or would be material and adverse in the
context of the wider Hercules Group taken as a whole;
(h) no member of the Hercules Group having since 30 June 2004 (save as
Disclosed or unless publicly announced by Hercules by delivery of an
announcement to the Company Announcements Office or a Regulatory Information
Service of the London Stock Exchange before 27 September 2004 by Hercules (such
information being "publicly announced")):
(i) (save as between a wholly-owned subsidiary of Hercules and
Hercules or another wholly-owned subsidiary of Hercules or upon the exercise of
rights to subscribe for Hercules Shares pursuant to the exercise of options
granted before 27 September 2004 under the Hercules Share Schemes) issued or
authorised or proposed or announced an intention to authorise or propose 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 securities;
(ii) recommended, declared, paid or made or proposed to declare, pay
or make any bonus, dividend or other distribution in respect of the share
capital of Hercules;
(iii) (save for transactions between a wholly-owned subsidiary of Hercules and
Hercules or another wholly-owned subsidiary of Hercules) merged with any body
corporate or authorised or proposed or announced any intention to propose any
merger or demerger or (otherwise than in respect of current assets in the
ordinary course of business) acquired or disposed of or transferred, mortgaged
or encumbered any assets or any right, title or interest in any assets or shares
to an extent which is material in the context of the Hercules Group taken as a
whole;
(iv) made or authorised or proposed or announced its intention to
propose any material change in its share or loan capital;
(v) purchased, redeemed or repaid or announced any proposal to purchase,
redeem or repay any of its own shares or other securities or reduced or made any
other change in its share capital in each case to an extent which is material in
the context of the wider Hercules Group taken as a whole;
(vi) issued, authorised or proposed or announced an intention to authorise
or propose the issue of any debentures or (save in the ordinary course of
business) incurred any indebtedness or become subject to any contingent
liability which is material in the context of the wider Hercules Group taken as
a whole;
(vii) entered into or varied or authorised, proposed or announced its
intention to enter into or vary any contract, transaction, arrangement or
commitment (whether in respect of capital expenditure or otherwise) which is of
a long term, onerous or unusual nature or magnitude or which involves or could
involve an obligation of a nature or magnitude in each case to an extent which
is material in the context of the wider Hercules Group taken as a whole;
(viii) entered into or varied or authorised, proposed or announced its
intention to enter into or vary any contract, transaction, arrangement or
commitment which would be restrictive to a material extent on the business of
any member of the wider Hercules Group or the Erinaceous Group;
(ix) entered into or varied the terms of any service agreement with any
of the directors of Hercules;
(x) made, or announced any proposal to make, any change or addition to
any retirement, death or disability benefit of or in respect of any of its
directors, senior employees, former directors or former senior employees;
(xi) save in the ordinary course of business, granted any lease or third
party rights in respect of any of the leasehold or freehold property owned or
occupied by it or transferred or otherwise disposed of any such property which
is or are material in the context of the Offer and the wider Hercules Group
taken as a whole;
(xii) waived or compromised any claim (otherwise than in the ordinary
course of business) which would be material in the context of the wider Hercules
Group taken as a whole;
(xiii) proposed any voluntary winding up or taken any corporate action or
had any legal proceedings instituted or threatened against it for its winding
up, dissolution or reorganisation or for the appointment of a receiver,
administrator, administrative receiver, trustee or similar officer of all or any
of its assets and revenues or any analogous or similar event having occurred in
any jurisdiction;
(xiv) been unable to pay its debts or having stopped or suspended payment
of its debts generally or ceased or threatened to cease carrying on all or a
significant part of its business; or
(xv) entered into any contract, commitment or agreement to, or passed any
resolution with respect to, or announced any intention to, or to propose to,
effect any of the transactions or events referred to in this paragraph (h);
(i) since 30 June 2004, save as publicly announced or Disclosed:
(i) no adverse change or, and no other circumstance having arisen
which would or might be likely to result in any adverse change, deterioration in
the business, assets, financial or trading position or profits or prospects of
any member of the Hercules Group having occurred which would be material to the
wider Hercules Group taken as a whole;
(ii) no contingent or other liability having arisen or become apparent
to Erinaceous or having been incurred which would or might be likely to
materially and adversely affect the Hercules Group taken as a whole;
(iii) no litigation, arbitration proceedings, prosecution or other
legal proceedings having been announced, instituted or threatened in writing by
or against or remaining outstanding against any member of the Hercules Group or
to which any member of the Hercules Group is party (whether as plaintiff or
defendant or otherwise) and which, in any case, is likely adversely to affect
such member of the Hercules Group to an extent which is material in the context
of the wider Hercules Group taken as a whole;
(iv) there having been no enquiry or investigation by or complaint or
reference to any Relevant Authority in respect of any member of the Hercules
Group and no such inquiry, investigation, complaint or reference having been
threatened in writing, announced or instituted or remaining outstanding which
would in any such case reasonably be expected materially and adversely to affect
the wider Hercules Group taken as a whole; or
(j) save as Disclosed, Erinaceous not having discovered that:
(i) any financial, business or other information concerning the
Hercules Group which has been disclosed at any time, whether publicly or
otherwise, by or on behalf of any member of the Hercules Group is misleading,
contains a misrepresentation of fact or omits to state a fact necessary to make
the information contained therein not misleading, where the misrepresentation or
omission is material to the Hercules Group taken as a whole and which was not
corrected by public announcement prior to the date hereof; or
(ii) any member of the Hercules Group is subject to any liability,
contingent or otherwise, which is or might reasonably be expected to be material
in the context of the Hercules Group taken as a whole, and which is not
disclosed in the latest annual report and accounts of Hercules;
(k) save as Disclosed, Erinaceous not having discovered that:
(i) there is any obligation or liability (whether actual or
contingent) or a request by any Relevant Authority to make good, repair,
reinstate or clean up any property or other asset now or previously owned,
occupied or made use of by any past or present member of the Hercules Group, or
in which such member may now have or previously has had an interest under any
environmental legislation, regulation, decision or order of any Relevant
Authority which in the aggregate are material in the context of the wider
Hercules Group taken as a whole;
(ii) any past or present member of the Hercules Group has not complied
with any and/or all applicable legislation or regulations of any jurisdiction
(or any notices or requirements of any third party in any jurisdiction) with
regard to environmental, health or safety matters, including, without
limitation, the treatment, storage, disposal, pumping, pouring, emptying,
leaking, dumping, transportation, release, discharge, escape, emission or
spillage of any waste or hazardous substance or any substance likely to impair
the environment or natural resources or harm human health or property or
otherwise relating to environmental matters and which non-compliance would be
likely to give rise to any liability (whether actual or contingent) or cost on
the part of any member of the Hercules Group which in the aggregate is material
in the context of the wider Hercules Group taken as a whole;
(iii) that there has been a storage, pumping, pouring, transportation,
disposal, discharge, spillage, release, escape, dumping, emptying, leak or
emission of any waste, hazardous substance or any substance likely to impair the
environment or natural resources or harm human health or property on, to, under
or from or generated from or disposed by any land or other asset or medium now
or previously owned, occupied, leased, operated or made use of or controlled by
any past or present member of the Hercules Group, or in which any such member
may now have or previously have had an interest, which would be likely to give
rise, directly or indirectly, to any liability or obligation (whether actual or
contingent) on the part of any member of the Hercules Group which in the
aggregate are material in the context of the wider Hercules Group taken as a
whole; or
(iv) circumstances exist (whether as a result of the making of the Offer
or otherwise) which would be likely to lead to any Relevant Authority
instituting or requiring, or whereby the Erinaceous Group or any present member
of the Hercules Group would be likely to be required to institute an
environmental audit or any other steps which would in any such case be likely to
result in any actual or contingent liability or requirement to improve or
install new plant or equipment, to pay any fine or be subject to any legal
proceeding, or to make good, repair, reinstate, or clean up any land or other
asset now or previously owned, occupied or made use of by any member of the
Hercules Group or in which such member may now have or previously has had an
interest which in the aggregate are material in the context of the wider
Hercules Group taken as a whole; or
(v) circumstances exist whereby a person or class of persons would be
likely to have any claim or claims in respect of any product or process of
manufacture or materials used therein now or previously manufactured, sold or
carried out by any present member of the Hercules Group which claim or claims
would be likely to affect adversely any member of the Hercules Group in a manner
which in the aggregate is material in the context of the wider Hercules Group
taken as a whole.
A Relevant Authority shall be regarded as having "intervened" for the purposes
of these conditions if it has taken, instituted or threatened to take any
action, proceedings, suit, investigation, enquiry or reference, or made, enacted
or proposed any statute, regulation, decision or order, or required or accepted
any undertaking, or taken any measures or other steps and "intervene" shall be
construed accordingly.
Erinaceous reserves the right to waive, in whole or in part, all or any of the
above conditions, except for conditions (a) (b) (c) and (d). If Erinaceous is
required by the Panel to make an offer for Hercules Shares under the provisions
of Rule 9 of the City Code, Erinaceous may make such alterations to the above
conditions of the Offer including condition (a) as are necessary to comply with
the provisions of that rule.
The Offer will lapse unless the conditions set out above (other than condition
(a)) are fulfilled or, if capable of waiver, waived by Erinaceous no later than
midnight on the day falling 21 days after the first closing date of Offer or the
date on which the Offer becomes or is declared unconditional as to acceptances,
whichever is the later, or such later date as the Panel may agree. Erinaceous
shall be under no obligation to waive or treat as satisfied any of the
conditions (b) to (k) by a date earlier than the latest date specified above for
the satisfaction thereof notwithstanding that the other conditions of the Offer
may at such earlier date have been waived or fulfilled and that on such earlier
date there are no circumstances indicating that any of such conditions may not
be capable of fulfilment or satisfaction.
The Offer will lapse if referred to the Competition Commission before 19 October
2004 or the date on which the Offer becomes or is declared unconditional as to
acceptances, whichever is the later. If the Offer does not become or is not
declared unconditional in all respects both (i) those Hercules Shareholders who
had accepted the Offer and (ii) Erinaceous will cease to be bound by any prior
acceptances.
Appendix B: Definitions
The following definitions apply throughout this announcement, the Offer Document
and in the Form of Acceptance unless the context otherwise requires:
"AIM" the alternative investment market regulated by the London Stock Exchange
"AIM Rules" the AIM rules for companies published by the London Stock Exchange
"Australia" the Commonwealth of Australia, its states, territories and possessions
"Board" or "Directors" the board of directors of either Hercules or Erinaceous as the context
requires
"Canada" Canada, its provinces and territories
"Companies Act" the Companies Act 1985 (as amended) of England and Wales
"City Code" or "Code" The City Code on Takeovers and Mergers
"Closing Price" the closing middle market quotation of a Hercules Share or an Erinaceous
Share (as the context may require) as derived from the Daily Official List
in respect of Hercules Shares and from the AIM Appendix of the Daily
Official List in respect of Erinaceous Shares
"Collins Stewart" Collins Stewart Limited
"CREST" the relevant system (as defined in the Regulations) in respect of which
CRESTCo is the Operator (as defined in the Regulations)
"CRESTCo" CRESTCo Limited
"Erinaceous" Erinaceous Group plc
"Erinaceous Group" Erinaceous, its subsidiaries and its subsidiary undertakings
"Erinaceous Shares" the ordinary shares of 0.5 pence each in the capital of Erinaceous
"Enlarged Group" the Erinaceous Group as enlarged by the Hercules Group following completion
of the Offer
"Escrow Agent" Capita IRG plc, in its capacity as escrow agent (as described in the CREST
manual issued by CRESTCo)
"Form of Acceptance" the form of acceptance relating to the Offer, that accompanies this
document
"Hercules" Hercules Property Services plc
"Hercules Group" Hercules, its subsidiaries and its subsidiary undertakings
"Hercules Share Schemes" the Hercules 1996 Unapproved Executive Share Option Scheme, the Hercules
Long Term Incentive Plan 2000 and the Hercules Employee Share Ownership
Plan
"Hercules Share(s)" the existing unconditionally allotted or issued and fully paid ordinary
shares of 5 pence each in the capital of Hercules and any further such
shares which are issued or unconditionally allotted while the Offer remains
open for acceptance (or such earlier date as Erinaceous may, subject to the
City Code, decide) including those which are allotted or issued or granted
or subscribed for upon the exercise of any options granted under the
Hercules Share Schemes
"Hercules Shareholder" holder(s) of Hercules Shares
"Investec" Investec Investment Banking, a division of Investec Bank (UK) Limited
"Japan" Japan, its cities, prefectures, territories and possessions
"London Stock Exchange" London Stock Exchange plc
"New Erinaceous Shares" New Erinaceous Shares be issued, credited as fully paid, pursuant to the
Offer
"Offer" the recommended offer made by Collins Stewart on behalf of Erinaceous for
the Hercules Shares and, where the context so requires, any subsequent
revision, variation, extension or renewal of such offer
"Offer Period" the period commencing on 15 September 2004 (being the date of the
announcement that the Hercules Board was in talks that might lead to an
offer for Hercules) until the date when the Offer becomes or is declared
unconditional as to acceptances, or lapses
"Official List" the Official List of the UKLA
"Overseas Shareholders" Hercules Shareholders whose registered addresses are outside the UK or who
are citizens or residents of countries other than the UK or who are
nominees of, or custodians, trustees or guardians for, any such residents,
citizens or nationals
"Panel" the Panel on Takeovers and Mergers
"Regulations" the Uncertificated Securities Regulations 2001
"UK" or "United Kingdom" the United Kingdom of Great Britain and Northern Ireland
"UKLA" or "UK Listing Authority" the Financial Services Authority in its capacity as the competent authority
for the purposes of Part VI of the Financial Services and Markets Act 2000
and the exercise of its functions in respect of the admission of securities
to the Official List
"US" or "United States" the United States of America, its territories and possessions, any state of
the United States of America and the District of Columbia and any area
subject to its jurisdiction or any political subdivision thereof
This information is provided by RNS
The company news service from the London Stock Exchange
END
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