RNS Number:3824U
Babcock International Group PLC
04 April 2007
EMBARGOED UNTIL 7:00 AM
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN OR INTO OR
FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE
RELEVANT LAWS OF SUCH JURISDICTION
4 April 2007
BABCOCK INTERNATIONAL GROUP PLC
RECOMMENDED CASH OFFER FOR
INTERNATIONAL NUCLEAR SOLUTIONS PLC TO BE IMPLEMENTED
BY MEANS OF
A SCHEME OF ARRANGEMENT
Summary
- The boards of Babcock and INS are pleased to announce that they have
reached agreement on the terms of a recommended cash offer by Babcock for
the entire issued and to be issued share capital of INS not already owned
by Babcock.
- The Offer values each INS Share at 63.0 pence and the existing issued share
capital of INS at approximately #39.3 million and represents a premium of
approximately 46.6 per cent. to the average Closing Price of 43.0 pence per
INS Share over the six month period from 18 July 2006 to 17 January 2007,
the last Business Day prior to the announcement of an approach regarding a
possible offer for INS.
- It is intended that the INS Shares will be acquired by way of a Court
sanctioned scheme of arrangement under section 425 of the Companies Act.
- The INS Directors, who have been so advised by Rothschild and Grant
Thornton, consider the terms of the Offer to be fair and reasonable. Grant
Thornton is acting as the independent financial adviser to INS in relation
to Rule 3 of the City Code. Rothschild is acting as financial adviser to
INS. Rothschild has a corporate debt advisory relationship with Babcock
and, as a consequence, with respect to the Offer, is not an independent
adviser in accordance with Rule 3 of the City Code. In providing their
advice to the Directors of INS, Rothschild and Grant Thornton have taken
into account the INS Directors' commercial assessments of the Offer.
Accordingly, the INS Directors will unanimously recommend that INS
Shareholders vote in favour of the resolutions to be proposed at the Court
Meeting and the EGM required to implement the Scheme, as they have
irrevocably undertaken to do in respect of their own beneficial holdings,
amounting to, in aggregate, 253,904 INS Shares, representing approximately
0.4 per cent. of the existing issued share capital of INS.
- Babcock currently holds 15,273,875 INS Shares, representing approximately
24.5 per cent. of the existing issued share capital of INS. In addition,
Babcock has received irrevocable undertakings to vote (or procure to vote)
in favour of the Scheme from: Bailey Robinson; Taube Hodson Stonex Partners
Limited; and Hansa Trust PLC, in respect of their entire beneficial
holdings of, in aggregate, 10,829,440 INS Shares representing approximately
17.4 per cent. of the existing issued share capital of INS. Therefore,
together with the irrevocable undertakings received from the INS Directors,
Babcock has received irrevocable undertakings to vote (or to procure to
vote) in favour of the Scheme in respect of, in aggregate, 11,083,344 INS
Shares, representing approximately 17.8 per cent. of the existing issued
share capital of INS.
- The Scheme will be subject, inter alia, to approval by INS Shareholders who
are entitled to vote and to sanction by the Court. Full details of the
Scheme, including an indicative timetable, will be set out in the Scheme
Document.
Commenting on the Offer, Gordon Campbell, Chairman of Babcock, said:
"INS offers an excellent strategic fit with our existing civil nuclear
engineering activities and brings to us an important set of new customers and
capabilities. The acquisition of INS will position the Group to bid for a wider
range of opportunities in the expanding market for nuclear utility support
services and decommissioning."
Commenting on the Offer, Chris Brown, Chairman of INS, said:
"I am pleased to announce our recommendation of Babcock's Offer this morning.
The Offer price of 63.0 pence per share represents an attractive premium to the
average share price over the last six months prior to our announcement of an
approach. The Offer provides a significant return to both our new investors at
our May IPO and our long standing investors, many of whom had been shareholders
in RTS for many years."
The Scheme Document, setting out the details of the Offer and the procedures to
be followed to approve the Scheme, and Forms of Proxy will be posted to INS
Shareholders and, for information only, to option holders in INS as soon as
practicable and in any event within 28 days of this Announcement unless
otherwise agreed with the Panel.
This summary should be read in conjunction with the full text of this
Announcement.
Enquiries:
Babcock Telephone: +44 (0) 20 7291 5000
Gordon Campbell
Peter Rogers
Bill Tame
Hawkpoint (financial adviser to Babcock) Telephone: +44 (0) 20 7665 4500
Paul Baines
JPMorgan Cazenove (broker to Babcock) Telephone: +44 (0) 20 7588 2828
Dermot McKechnie
Financial Dynamics (Babcock PR enquiries) Telephone: +44 (0) 020 7269 7121
Susanne Walker
INS Telephone: +44 (0) 161 222 5500
Chris Brown
Tony Moore
Rothschild (financial adviser to INS) Telephone: +44 (0) 161 827 3800
Greg Cant
Grant Thornton (Rule 3 adviser to INS) Telephone: +44 (0) 161 834 5414
Ali Sharifi
College Hill (INS PR enquiries) Telephone: +44 (0) 20 7457 2020
Matthew Smallwood
This Announcement does not, and is not intended to, constitute or form part of
any offer to sell, or an invitation to purchase, any securities or the
solicitation of any vote or approval in any jurisdiction. The Offer will be made
solely by means of the Scheme Document, which will contain the full terms and
conditions of the Scheme. INS Shareholders are advised to read carefully the
formal documentation in relation to the Offer once it has been despatched.
The availability of the Offer and the release, publication or distribution of
this Announcement to persons who are not resident in the United Kingdom may be
affected by the laws of the relevant jurisdictions in which they are located.
Persons who are not resident in the United Kingdom should inform themselves of,
and observe, any applicable requirements. Any failure to comply with such
applicable requirements may constitute a violation of the securities laws of any
such jurisdictions. This Announcement has been prepared for the purposes of
complying with English law and the City Code and the information disclosed may
not be the same as that which would have been disclosed if this Announcement had
been prepared in accordance with the laws of jurisdictions outside the United
Kingdom.
The Offer will not be made in or into any jurisdiction where to do so would
consititute a violation of the relevant laws of such jurisdiction. Custodians,
nominees and trustees should observe these restrictions and should not send or
distribute the document in or into any jurisdiction where to do so would
consititute a violation of the relevant laws of such jurisdiction.
Hawkpoint, which is authorised and regulated in the United Kingdom by the
Financial Services Authority, is acting exclusively for Babcock and no one else
in connection with the Offer and will not be responsible to anyone other than
Babcock for providing the protections afforded to clients of Hawkpoint nor for
providing advice in relation to the Offer, the content of this Announcement or
any matter referred to herein.
JPMorgan Cazenove, which is authorised and regulated in the United Kingdom by
the Financial Services Authority, is acting exclusively for Babcock and no one
else in connection with the Offer and will not be responsible to anyone other
than Babcock for providing the protections afforded to clients of JPMorgan
Cazenove nor for providing advice in relation to the Offer, the content of this
Announcement or any matter referred to herein.
Rothschild, which is authorised and regulated in the United Kingdom by the
Financial Services Authority, is acting exclusively for INS and no one else in
connection with the Offer and will not be responsible to anyone other than INS
for providing the protections afforded to clients of Rothschild nor for
providing advice in relation to the Offer, the content of this Announcement or
any matter referred to herein.
Grant Thornton, which is authorised and regulated in the United Kingdom by the
Financial Services Authority, is acting exclusively for INS and no one else in
connection with the Offer and will not be responsible to anyone other than INS
for providing the protections afforded to clients of Grant Thornton nor for
providing advice in relation to the Offer, the content of this Announcement or
any matter referred to herein.
Appendix I sets out the Conditions to the implementation of the Offer.
Appendix II sets out the bases and sources of information from which the
financial calculations used in this Announcement have been derived.
Appendix III contains the definitions of terms used in this Announcement
(including this summary).
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Announcement contains certain forward-looking statements with respect to
the financial condition, results of operations and business of INS and certain
plans and objectives of the boards of INS and Babcock with respect thereto.
These forward-looking statements can be identified by the fact that they do not
relate only to historical or current facts. Forward-looking statements often use
words such as "anticipate", "target", "expect", "estimate", "intend", "plan",
"goal", "believe", "will", "may", "should", "would", "could", or other words of
similar meaning. These statements are based on assumptions and assessments made
by the boards of INS and Babcock in light of their experience and their
perception of historical trends, current conditions, expected future
developments and other factors they believe appropriate. By their nature,
forward-looking statements involve risk and uncertainty, because they relate to
events and depend on circumstances that will occur in the future and the factors
described in the context of such forward-looking statements in this Announcement
could cause actual results and developments to differ materially from those
expressed in or implied by such forward-looking statements. Although INS and
Babcock believe that the expectations reflected in such forward-looking
statements are reasonable, INS and Babcock can give no assurance that such
expectations will prove to have been correct and INS and Babcock therefore
caution you not to place undue reliance on these forward-looking statements
which speak only as at the date of this Announcement.
DEALING DISCLOSURE REQUIREMENTS
Under the provisions of Rule 8.3 of the Code, if any person is, or becomes,
"interested" (directly or indirectly) in one per cent. or more of any class of
"relevant securities" of INS, all "dealings" in any "relevant securities" of
that company (including by means of an option in respect of, or a derivative
referenced to, any such "relevant securities") must be publicly disclosed by no
later than 3.30 p.m. (London time) on the London business day following the date
of the relevant transaction. This requirement will continue until the date on
which the Scheme becomes effective or lapses or is otherwise withdrawn or on
which the "offer period" otherwise ends. If two or more persons act together
pursuant to an agreement or understanding, whether formal or informal, to
acquire an "interest" in "relevant securities" of INS, they will be deemed to be
a single person for the purpose of Rule 8.3.
Under the provisions of Rule 8.1 of the Code, all "dealings" in "relevant
securities" of INS by Babcock or INS, or by any of their respective
"associates", must be disclosed by no later than 12.00 noon (London time) on the
London business day following the date of the relevant transaction.
A disclosure table, giving details of the companies in whose "relevant
securities" "dealings" should be disclosed, and the number of such securities in
issue, can be found on the Panel's website at www.thetakeoverpanel.org.uk.
"Interests in securities" arise, in summary, when a person has long economic
exposure, whether conditional or absolute, to changes in the price of
securities. In particular, a person will be treated as having an "interest" by
virtue of the ownership or control of securities, or by virtue of any option in
respect of, or derivative referenced to, securities.
Terms in quotation marks are defined in the Code, which can also be found on the
Panel's website. If you are in any doubt as to whether or not you are required
to disclose a "dealing" under Rule 8, you should consult the Panel.
If you are in any doubt as to the application of Rule 8 to you, please contact
an independent financial adviser authorised under the Financial Services and
Markets Act 2000, consult the Panel's website at www.thetakeoverpanel.org.uk or
contact the Panel on telephone number +44 (0) 20 7638 0129; fax number +44 (0)
20 7236 7013.
EMBARGOED UNTIL 7:00 AM
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN OR INTO OR
FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE
RELEVANT LAWS OF SUCH JURISDICTION
4 April 2007
BABCOCK INTERNATIONAL GROUP PLC
RECOMMENDED CASH OFFER FOR
INTERNATIONAL NUCLEAR SOLUTIONS PLC TO BE IMPLEMENTED
BY MEANS OF
A SCHEME OF ARRANGEMENT
1. Introduction
The boards of Babcock and INS are pleased to announce that they have reached
agreement on the terms of a recommended cash offer by Babcock for the entire
issued and to be issued share capital of INS, not already owned by Babcock. The
Offer is to be implemented by means of a Court approved scheme of arrangement
under section 425 of the Companies Act.
2. The Scheme
The Scheme will be subject to the Conditions set out in Appendix I to this
Announcement and any further terms to be set out in the Scheme Document. If the
Scheme becomes effective, the Scheme Shares will be cancelled and Scheme
Shareholders on the register of members at the Scheme Record Time will receive:
for each Scheme Share 63.0 pence in cash
The Offer values each INS Share at 63.0 pence and the existing issued share
capital of INS at approximately #39.3 million and represents a premium of
approximately 46.6 per cent. to the average Closing Price of 43.0 pence per INS
Share over the six month period from 18 July 2006 to 17 January 2007, the last
Business Day prior to the announcement of an approach regarding a possible offer
for INS.
3. Recommendation
The INS Directors, who have been so advised by Rothschild and Grant Thornton,
consider the terms of the Offer to be fair and reasonable. Grant Thornton is
acting as the independent financial adviser to INS in relation to Rule 3 of the
City Code. Rothschild is acting as financial adviser to INS. Rothschild has a
corporate debt advisory relationship with Babcock and, as a consequence, with
respect to the Offer, is not an independent adviser in accordance with Rule 3 of
the City Code. In providing their advice to the Directors of INS, Rothschild and
Grant Thornton have taken into account the INS Directors' commercial assessments
of the Offer. Accordingly, the INS Directors will unanimously recommend that INS
Shareholders vote in favour of the resolution to be proposed at the Court
Meeting and the EGM required to implement the Scheme, as they have irrevocably
undertaken to do in respect of their own beneficial holdings, amounting to, in
aggregate, 253,904 INS Shares, which represents approximately 0.4 per cent. of
the existing issued share capital of INS.
4. Background to and reasons for the recommendation of the Offer
INS is a specialist provider of engineering and consultancy services to the
nuclear industry with particular emphasis on the 'clean-up and decommissioning'
of the UK's nuclear legacy. This market has an estimated annual spend of #2.1
billion and a total estimated value in excess of #63 billion (Source: NDA).
Against this background, INS has achieved significant growth. Over the four
years between 1 January 2003 and 31 December 2006, turnover has grown from #12.3
million to #31.7 million (a compound annual growth rate of 37.1 per cent.) and
profit before taxation and exceptional items has grown from #0.3 million to #2.5
million (a compound annual growth rate of 101.4 per cent.).
On 18 January 2007, the board of INS announced that it had received an approach
in relation to a potential offer for the Company, after which, on 26 January
2007, Babcock announced that it had acquired 24.5 per cent. of INS's existing
issued share capital. Following Babcock's announcement, INS provided certain due
diligence information to assist Babcock in making an appropriate offer for INS's
remaining issued share capital.
The boards of INS and Babcock today reached agreement on the terms of a
recommended cash offer by Babcock for the entire issued and to be issued share
capital of INS not already owned by Babcock.
In unanimously recommending that INS Shareholders vote in favour of the Scheme,
the INS Directors have given consideration to a range of factors, including:
- the Offer of 63.0 pence per INS Share, representing a premium of
approximately 46.6 per cent. to the average Closing Price of 43.0 pence per
INS Share over the six month period from 18 July 2006 to 17 January 2007,
the last Business Day prior to the announcement of an approach regarding a
possible offer for INS; and
- the changing nature of the UK's nuclear services market. The industry is
going through a period of consolidation and rationalisation of the supply
chain and is also attracting considerable interest from larger UK and
overseas corporations. There are likely to be fewer but larger contracts
and framework agreements, under which work packages will be bundled, which
will only be accessible to INS as part of bidding consortia. As part of the
Babcock Group, the INS Directors believe that the Company will have more
opportunities to take leading roles in bidding for such future contracts
and framework agreements.
In light of the above, the INS Directors believe that the terms of the Offer are
in the best interests of INS Shareholders and have concluded that the Offer is
fair and reasonable.
5. Structure of the Scheme
(a) Introduction
It is intended that the Offer will be effected by a means of a scheme of
arrangement between INS and the Scheme Shareholders under section 425 of the
Companies Act, the provisions of which will be set out in full in the Scheme
Document. The purpose of the Scheme, together with the proposed changes to INS's
Articles, is to provide for Babcock to become the owner of the entire issued and
to be issued share capital of INS. The Scheme will provide for the cancellation
of the Scheme Shares. Scheme Shareholders will then be entitled to receive cash
on the basis set out in paragraph 2 above.
Prior to the Scheme becoming effective, application will be made to the London
Stock Exchange for INS Shares to be suspended from trading on AIM. It is
anticipated that the last day of dealings in, and for registration of transfers
of, INS Shares will be the last Business Day immediately preceding the Effective
Date. At close of business on the last Business Day immediately preceding the
Effective Date, INS Shares will be suspended from AIM and the admission of such
shares will be cancelled on the Effective Date.
If the Scheme becomes effective, Babcock (and/or its nominee(s)) will acquire
INS Shares fully paid and free from all liens, equitable interests, charges,
encumbrances and other third party rights of any nature whatsoever and together
with all rights attaching to them including the right to receive and retain all
dividends and distributions (if any) declared, made or payable after the
Effective Date. INS does not intend to declare, make or pay any dividends or
distributions prior to the Effective Date.
(b) Conditions to the Offer
The Conditions to the Offer are set out in full in Appendix I to this
Announcement. In summary, the implementation of the Offer will be conditional,
inter alia, upon:
(i) approval of the Scheme by a majority in number of the Scheme Shareholders
entitled to be present and voting, either in person or by proxy, at the
Court Meeting, or any adjournment thereof, representing 75 per cent. or
more in value of the Scheme Shares voted;
(ii) the resolution in connection with or required to approve and implement the
Scheme as set out in the notice of EGM in the Scheme Document being duly
passed by the requisite majority at the EGM;
(iii) the sanction of the Scheme and confirmation of the associated reduction of
capital by the Court (in either case, with or without modification on
terms acceptable to INS and Babcock) and the delivery of an official copy
of the Court Order to the Registrar of Companies and, in respect of the
reduction of capital, the registration of the Court Order by him; and
(iv) the Scheme becoming effective by not later than 30 June 2007 or such later
date as may be agreed in writing by INS and Babcock (and if appropriate as
the Court may approve) failing which the Scheme will lapse.
6. Irrevocable undertakings
Babcock has received irrevocable undertakings to vote (or procure to vote) in
favour of the Scheme at the Court Meeting and the resolution at the EGM (or, in
the event that the Offer is implemented by way of a takeover offer, to accept or
procure acceptance of such offer) from the following:
(a) INS Directors in respect of, in aggregate, 253,904 INS Shares,
representing approximately 0.4 per cent. of the existing issued share capital of
INS.
The undertakings referred to above will remain binding even if a higher
competing offer for INS is made. They will cease to be binding only if (i) the
Offer lapses or is withdrawn or (ii) the documentation in connection with the
Scheme is not posted to INS Shareholders within 28 days of this Announcement or
such later date as the Panel may agree.
(b) Bailey Robinson in respect of his entire beneficial holdings of 4,972,105
INS Shares, representing approximately 8.0 per cent. of the existing issued
share capital of INS.
(c) Taube Hodson Stonex Partners Limited in respect of their entire beneficial
holdings of 2,682,335 INS Shares, representing approximately 4.3 per cent. of
the existing issued share capital of INS.
(d) Hansa Trust PLC in respect of their entire beneficial holdings of 3,175,000
INS Shares, representing approximately 5.1 per cent. of the existing issued
share capital of INS.
These undertakings will cease to be binding if (i) a third party announces a
firm intention to make an offer (in accordance with Rule 2.5 of the Code) to
acquire INS's entire issued share capital, provided that the value of the cash
and non-cash elements and other terms and conditions of this offer values INS's
entire issued share capital at no less than a 10 per cent. premium to the value
placed by the Offer on INS's entire issued share capital or (ii) the Offer
lapses or is withdrawn or (iii) the documentation in connection with the Scheme
is not posted to INS Shareholders within 28 days of this Announcement or such
later date as the Panel may agree.
In aggregate, therefore, Babcock has received irrevocable undertakings to vote
(or procure to vote) in favour of the Scheme at the Court Meeting and the
resolution at the EGM (or, in the event that the Offer is implemented by way of
a takeover offer, to accept or procure acceptance of such offer) in respect of
an aggregate of 11,083,344 INS Shares, representing approximately 17.8 per cent.
of the existing issued share capital of INS.
7. Information on Babcock
Babcock Group is an asset management business, managing fixed infrastructure and
mobile assets. Babcock integrates labour, technical capabilities, systems and
supply chain partners to meet the outsourcing needs of customers.
The company has five operating divisions which are technical services, defence,
networks, engineering and plant services, and rail. Overseas operations are
based in Africa and North America.
For the year ended 31 March 2006, Babcock reported revenue of #836.7 million
(2005: #729.0 million), operating profit before exceptional items of #49.9
million (2005: #41.5 million) and profit before tax (pre amortisation and
exceptionals) of #44.6 million (2005: #35.7 million).
For the six months ended 30 September 2006, Babcock reported revenue of #487.6
million (six months to 30 September 2005: #386.7 million), operating profit
before exceptional items of #33.5 million (2005: #23.9 million) and profit
before tax (pre amortisation and exceptionals) of #30.6 million (2005:
#20.5 million).
On 9 May 2006, Babcock acquired the nuclear and airports services operator,
Alstec Group Limited, for a net cash consideration of #44.9 million, funded from
existing banking facilities. The Alstec airports business has been consolidated
into Babcock Defence Services, while Alstec nuclear and defence services has
been fully consolidated into Babcock Technical Services. In the period to 30
September 2006, Alstec contributed #42.2 million in sales and #4.5 million in
operating profit and performed ahead of Babcock's original planning assumptions.
Babcock's shares are quoted on the London Stock Exchange in the support services
sector.
8. Financing the Offer
The consideration payable under the Offer will be funded from Babcock's existing
banking facilities.
Hawkpoint, financial adviser to Babcock, has confirmed that it is satisfied that
the necessary financial resources are available to Babcock to satisfy the cash
consideration due under the Offer in full. Full implementation of the Offer
would result in a maximum cash consideration of approximately #30.4 million
being payable by Babcock to INS Shareholders (assuming all options are exercised
in full).
9. Information on INS
INS successfully completed the demerger of INS Innovation Limited from Robotic
Technology Systems PLC and was admitted to trading on AIM on 31 May 2006.
INS is a specialist provider of nuclear engineering and consultancy services in
the UK and is focused on providing services and solutions to the nuclear
industry from the initial front end design and development to eventual
commissioning and providing support to the customers' ongoing operations.
INS operates throughout all stages of the project life cycle, providing
professional engineering services for design and project implementation. These
services include procurement inspection and project management enabling the
Company to take projects from inception through all phases of project
implementation to site installation and commissioning.
The Company's main areas of expertise include:
- support to the commercial operating facilities associated with fuel
fabrication and spent fuel reprocessing activities;
- waste and nuclear materials handling;
- plant asset care and maintenance of redundant facilities;
- new build activities covering existing facilities as well as new build
required to support accelerated clean-up;
- decommissioning; and
- supply and integration of special purpose plant and equipment.
For the year ended 31 December 2006, INS reported turnover of #31.7 million
(2005: #24.6 million), operating profit before exceptional items of #2.5 million
(2005: #2.2 million) and profit before tax of #1.7 million (2005: #2.3 million).
10. Current trading and prospects
On 27 March 2007, INS issued the following announcement:
"Following the successful admission of International Nuclear Solutions plc
("INS") to the AIM market on 31st May 2006, I am pleased to be able to present
the Group's first set of annual accounts as an independent public company.
Turnover at #31.7 million increased by 29 per cent. in 2006 compared with the
previous year, with the commencement of several significant new contracts,
notably the SPRS and B29 projects at Sellafield. Operating profit before
exceptional items was 11.9 per cent. higher than 2005 at #2.5 million, before
exceptional administrative costs of #0.8 million (2005 - #nil) relating to the
demerger from Robotic Technology Systems PLC (RTS) and subsequent admission to
AIM. Profit after tax and exceptional items was #1.0m, compared with #1.9
million in 2005.
INS produced a strong cash performance in 2006, with #5.9 million cash inflow
from operating activities, an increase in net funds of #2.4 million, and closing
cash balances of #2.7 million.
Our order book, which stood at #11.4 million at the end of June, grew to #12.7
million by the end of 2006, and currently stands at #12.9 million . Our total
headcount at the end of 2006 stood at 274. This is an increase of 23 per cent.
in permanent staff, and 21 per cent. in total from the position at the start of
the year. A new project office has been opened at Birchwood in Warrington, and
we have also relocated our Greengarth office to new premises at the West Lakes
Science Park at Sellafield.
Outlook
Our strong opening order book, and the increasing activity levels in the nuclear
industry, give us confidence that the Group will continue to progress in 2007.
The NDA has announced that there is a small increase in funding in its 2007
budget. We are aware that there will be a reduction in operating revenues to the
NDA in future years as a result of the closure of two Magnox stations at the end
of 2006. This may in the course of time affect the funding available to the NDA
in future years. However, we view the future with confidence given the
increasing overall demand for nuclear decommissioning expertise."
11. Directors, management and employees and the effect of the Scheme in their
interests
Babcock has confirmed to the INS Directors that, following the Scheme becoming
effective, the existing employment rights, terms and conditions of all the
employees of the INS Group will be safeguarded.
The Non-executive Directors of INS will resign from the Board upon the Scheme
becoming effective.
12. Reasons for the Offer
Babcock Group has identified the civil nuclear decommissioning market as both a
growth opportunity and an industry consistent with the Group's skills,
capabilities and experience and signalled its intention of developing its core
capabilities with the acquisition of Alstec in May 2006.
The acquisition of INS continues, broadens and deepens this strategy by bringing
to the Group an important new set of customers and capabilities which will allow
the Group to bid for a wider range of opportunities in an expanding market.
13. INS Share Schemes
The effects of the Scheme on subsisting options under INS Share Schemes are
summarised below. All INS Shares issued on the exercise of options on or prior
to the Reduction Record Time will be subject to the terms of the Scheme.
The Scheme will not extend to INS Shares issued, including on the exercise of
options, after the Reduction Record Time. However, an amendment to INS's
Articles is to be proposed at the EGM (details of which will be set out in the
Notice of the EGM) to the effect that INS Shares issued on the exercise of
options after the Reduction Record Time will automatically be acquired by
Babcock on the same terms of the Offer.
Options under the INS EMI Scheme may be exercised in full conditional on the
Scheme becoming effective whereas options under the INS SAYE Scheme will become
exercisable on the Court's sanction of the Scheme. Participants will have the
opportunity to exercise their options conditionally on the Scheme becoming
effective in respect of the INS EMI Scheme and on Court sanction in respect of
the INS SAYE Scheme. In the case of the INS SAYE Scheme, options may only be
exercised using accrued savings and interest (if any) due on the exercise date.
Options will lapse if unexercised within 30 days of the Court's sanction of the
Scheme in relation to shares held under the INS SAYE Scheme and on the Effective
Date in relation to options held under the EMI Scheme.
14. Overseas Shareholders
The availability of the Offer to persons resident in, or citizens of,
jurisdictions outside the United Kingdom may be affected by the laws of the
relevant jurisdictions. Persons who are not resident in the United Kingdom
should inform themselves about and observe any applicable requirements. It is
the responsibility of each of the INS Shareholders who are not resident in the
UK to satisfy themselves as to the full observance of the laws of the relevant
jurisdiction in connection therewith, including the obtaining of any
governmental exchange control or other consents which may be required or
compliance with other necessary formalities which are required to be observed
and the payment of any issue, transfer or other taxes due in such jurisdiction.
Any failure to comply with such applicable requirements may constitute a
violation of the securities laws of any such jurisdictions.
This Announcement has been prepared for the purposes of complying with English
law and the City Code and the information disclosed may be different from that
which would have been disclosed if this Announcement had been prepared in
accordance with the laws of jurisdictions outside England.
15. Implementation Agreement
INS and Babcock have entered into an Implementation Agreement dated 3 April 2007
, under the terms of which the parties have agreed, amongst other things, to
co-operate to implement the Scheme. Details of the Implementation Agreement will
be set out in the Scheme Document.
Included in the Implementation Agreement is an inducement fee agreement. The
inducement fee, which amounts to circa #0.4 million, representing one per cent.
of the value of the Offer, is payable to Babcock if following this Announcement:
(a) the INS Directors withdraw or modify their approval or recommendation of the
Offer, or approve the announcement of or recommend any Competing Proposal;
or
(b) the Offer (whether structured as a Scheme or a takeover offer) lapses or is
withdrawn in accordance with its terms and prior thereto a Competing
Proposal for the Company has been announced,
and in either case such Competing Proposal or any other Competing Proposal
subsequently becomes or is declared unconditional in all respects.
16. Suspension and cancellation of admission to AIM of INS Shares
The London Stock Exchange will be requested respectively to suspend and cancel
(i) trading in INS Shares on AIM with effect from close of business on the
Business Day preceding the Effective Date and (ii) the admission of INS Shares
to AIM with effect from 8.00 a.m. on the Effective Date. The last day of
dealings in INS Shares on AIM is expected to be the last Business Day
immediately preceding the Effective Date and no transfers of INS Shares will be
registered after close of business on this date. On the Effective Date, share
certificates in respect of INS Shares will cease to be valid. In addition, on
the Effective Date, entitlements to Scheme Shares held within the CREST system
will be cancelled.
17. Dealing disclosure requirements
Under the provisions of Rule 8.3 of the Code, if any person is, or becomes,
"interested" (directly or indirectly) in one per cent. or more of any class of
"relevant securities" of INS, all "dealings" in any "relevant securities" of
that company (including by means of an option in respect of, or a derivative
referenced to, any such "relevant securities") must be publicly disclosed by no
later than 3.30 p.m. (London time) on the London business day following the date
of the relevant transaction. This requirement will continue until the date on
which the Scheme becomes effective or lapses or is otherwise withdrawn or on
which the "offer period" otherwise ends. If two or more persons act together
pursuant to an agreement or understanding, whether formal or informal, to
acquire an "interest" in "relevant securities" of INS, they will be deemed to be
a single person for the purpose of Rule 8.3.
Under the provisions of Rule 8.1 of the Code, all "dealings" in "relevant
securities" of INS by Babcock or INS, or by any of their respective
"associates", must be disclosed by no later than 12.00 noon (London time) on the
London business day following the date of the relevant transaction.
A disclosure table, giving details of the companies in whose "relevant
securities" "dealings" should be disclosed, and the number of such securities in
issue, can be found on the Panel's website at www.thetakeoverpanel.org.uk.
"Interests in securities" arise, in summary, when a person has long economic
exposure, whether conditional or absolute, to changes in the price of
securities. In particular, a person will be treated as having an "interest" by
virtue of the ownership or control of securities, or by virtue of any option in
respect of, or derivative referenced to, securities.
Terms in quotation marks are defined in the Code, which can also be found on the
Panel's website. If you are in any doubt as to whether or not you are required
to disclose a "dealing" under Rule 8, you should consult the Panel.
18. Expected timetable
INS expects that it will despatch the Scheme Document to INS Shareholders and,
for information only, to holders of options granted under the INS Share Schemes
within the next 28 days (or such later date as may be agreed with the Panel);
that the Court Meeting and EGM will take place during May 2007; and subject to
the Scheme becoming unconditional and effective in accordance with its terms,
the Effective Date will occur in June 2007.
19. Disclosure of interests in INS
On 26 January 2007, Babcock acquired 15,273,875 INS Shares representing
approximately 24.5 per cent. of INS's entire issued share capital. Save for this
shareholding, and the irrevocable undertakings referred to above, neither
Babcock nor, so far as Babcock is aware, any person acting in concert with
Babcock, owns or controls any INS Shares or any securities convertible or
exchangeable into INS Shares or any rights to subscribe for or purchase the
same, or holds any options (including traded options) in respect of, or has any
option to acquire, any INS Shares or has entered into any derivatives referenced
to INS Shares ("Relevant INS Securities") which remain outstanding, nor does any
such person hold any short positions in relation to Relevant INS Securities
(whether conditional or absolute and whether in the money or otherwise)
including any short position under a derivative, any agreement to sell or any
delivery obligation or right to require another person to purchase or take
delivery, nor has any such person lent or borrowed Relevant INS Securities, nor
does any such person have any arrangement in relation to Relevant INS
Securities. For these purposes, "arrangement" includes any indemnity or option
arrangement, any agreement or understanding, formal or informal, of whatever
nature, relating to Relevant INS Securities which may be an inducement to deal
or refrain from dealing in such securities. In the interests of secrecy prior to
this Announcement, Babcock has not made any enquiries in this respect of certain
parties which may be deemed by the Panel to be acting in concert with it for the
purposes of the Offer. Enquiries of such parties will be made as soon as
practicable following the date of this Announcement and any material disclosure
in respect of such parties will be included in the Scheme Document.
20. General
The Offer will be subject to the requirements of the City Code and will be on
the terms and subject to the Conditions set out herein and in Appendix I and to
be set out in the Scheme Document. The Scheme Document will include full details
of the Scheme, together with notices of the Court Meeting and the EGM and the
expected timetable.
As at 7.00 a.m. (London time) on 3 April 2007 (the last business day prior to
the date of this Announcement), INS had 62,335,374 shares of one pence in issue
(ISIN number GB00B12QZ964).
Enquiries
Babcock Telephone: +44 (0) 20 7291 5000
Gordon Campbell
Peter Rogers
Bill Tame
Hawkpoint (financial adviser to Babcock) Telephone: +44 (0) 20 7665 4500
Paul Baines
JPMorgan Cazenove (broker to Babcock) Telephone: +44 (0) 20 7588 2828
Dermot McKechnie
Financial Dynamics (Babcock PR enquiries) Telephone: +44 (0) 020 7269 7121
Susanne Walker
INS Telephone: +44 (0) 161 222 5500
Chris Brown
Tony Moore
Rothschild (financial adviser to INS) Telephone: +44 (0) 161 827 3800
Greg Cant
Grant Thornton (Rule 3 financial adviser to Telephone: +44 (0) 161 834 5414
INS)
Ali Sharifi
College Hill (INS PR enquiries) Telephone: +44 (0) 20 7457 2020
Matthew Smallwood
This Announcement does not, and is not intended to, constitute or form part of
any offer to sell, or an invitation to purchase, any securities or the
solicitation of any vote or approval in any jurisdiction. The Offer will be made
solely by means of the Scheme Document, which will contain the full terms and
conditions of the Scheme. INS Shareholders are advised to read carefully the
formal documentation in relation to the Offer once it has been despatched.
The availability of the Offer and the release, publication or distribution of
this Announcement to persons who are not resident in the United Kingdom may be
affected by the laws of the relevant jurisdictions in which they are located.
Persons who are not resident in the United Kingdom should inform themselves of,
and observe, any applicable requirements. Any failure to comply with such
applicable requirements may constitute a violation of the securities laws of any
such jurisdictions. This Announcement has been prepared for the purposes of
complying with English law and the City Code and the information disclosed may
not be the same as that which would have been disclosed if this Announcement had
been prepared in accordance with the laws of jurisdictions outside the United
Kingdom.
The Offer will not be made in or into any jurisdiction where to do so would
consititute a violation of the relevant laws of such jurisdiction. Custodians,
nominees and trustees should observe these restrictions and should not send or
distribute the document in or into any jurisdiction where to do so would
consititute a violation of the relevant laws of such jurisdiction.
Hawkpoint, which is authorised and regulated in the United Kingdom by the
Financial Services Authority, is acting exclusively for Babcock and no one else
in connection with the Offer and will not be responsible to anyone other than
Babcock for providing the protections afforded to clients of Hawkpoint nor for
providing advice in relation to the Offer, the content of this Announcement or
any matter referred to herein.
JPMorgan Cazenove, which is authorised and regulated in the United Kingdom by
the Financial Services Authority, is acting exclusively for Babcock and no one
else in connection with the Offer and will not be responsible to anyone other
than Babcock for providing the protections afforded to clients of JPMorgan
Cazenove nor for providing advice in relation to the Offer, the content of this
Announcement or any matter referred to herein.
Rothschild, which is authorised and regulated in the United Kingdom by the
Financial Services Authority, is acting exclusively for INS and no one else in
connection with the Offer and will not be responsible to anyone other than INS
for providing the protections afforded to clients of Rothschild nor for
providing advice in relation to the Offer, the content of this Announcement or
any matter referred to herein.
Grant Thornton, which is authorised and regulated in the United Kingdom by the
Financial Services Authority, is acting exclusively for INS and no one else in
connection with the Offer and will not be responsible to anyone other than INS
for providing the protections afforded to clients of Grant Thornton nor for
providing advice in relation to the Offer, the content of this Announcement or
any matter referred to herein.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Announcement contains certain forward-looking statements with respect to
the financial condition, results of operations and business of INS and certain
plans and objectives of the boards of INS and Babcock with respect thereto.
These forward-looking statements can be identified by the fact that they do not
relate only to historical or current facts. Forward-looking statements often use
words such as "anticipate", "target", "expect", "estimate", "intend", "plan",
"goal", "believe", "will", "may", "should", "would", "could", or other words of
similar meaning. These statements are based on assumptions and assessments made
by the boards of INS and Babcock in light of their experience and their
perception of historical trends, current conditions, expected future
developments and other factors they believe appropriate. By their nature,
forward-looking statements involve risk and uncertainty, because they relate to
events and depend on circumstances that will occur in the future and the factors
described in the context of such forward-looking statements in this Announcement
could cause actual results and developments to differ materially from those
expressed in or implied by such forward-looking statements. Although INS and
Babcock believe that the expectations reflected in such forward-looking
statements are reasonable, INS and Babcock can give no assurance that such
expectations will prove to have been correct and INS and Babcock therefore
caution you not to place undue reliance on these forward-looking statements
which speak only as at the date of this Announcement.
21. Appendices
Appendix I sets out Conditions to implementation of the Offer.
Appendix II sets out the bases and sources of information from which the
financial calculations used in this Announcement have been derived.
Appendix III contains the definitions of terms used in this Announcement.
Appendix I
CONDITIONS TO IMPLEMENTATION OF THE OFFER
The Offer will be subject to English law and the terms and conditions set out in
this document.
1.1 The Offer will be conditional upon the Scheme becoming unconditional and
effective by no later than 30 June 2007 or such later date if any as
Babcock and INS may, with the consent of the Panel, agree and (if
required) the Court may allow.
1.2 The Scheme will be conditional on:
(a) approval of the Scheme by a majority in number of Scheme Shareholders
present and voting (and entitled to vote), either in person or by
proxy, at the Court Meeting representing 75 per cent. or more in
value of the INS Shares voted;
(b) the resolution in connection with or required to approve and
implement the Scheme as set out in the notice of EGM in the Scheme
Document being duly passed by the requisite majority at the EGM or
any adjournment thereof; and
(c) the sanction of the Scheme and the confirmation of the reduction of
capital by the Court (in either case, with or without modifications
on terms acceptable to Babcock and INS) and the delivery of an office
copy of the Court Order to the Registrar of Companies and, in respect
of the reduction of capital, the registration of the Court Order by
him.
1.3 The Offer will also be conditional upon the following matters and,
accordingly, the necessary actions to make the Scheme effective will not
be taken unless such conditions have been satisfied or waived by Babcock
prior to the Scheme being sanctioned by the Court in accordance with
paragraph 1.2 above:
(a) no government or governmental, quasi-governmental, supranational,
statutory or regulatory body, or any court, institution,
investigative body, association, trade agency or professional or
environmental body or (without prejudice to the generality of the
foregoing) any other person or body in any jurisdiction (each, a
"Relevant Authority") having decided to take, instituted, implemented
or threatened any action, proceedings, suit, investigation or enquiry
or enacted, made or proposed any statute, regulation or order or
otherwise taken any other step or done any thing, and there not
continuing to be outstanding any statute, legislation or order of any
Regulatory Authority, that would or might reasonably be expected, in
a manner in each case which is material and adverse in the context of
the Offer or the wider INS Group taken as a whole:
(i) materially restrict, restrain, prohibit, delay or impose
material additional conditions or obligations with respect to,
or otherwise materially interfere with the implementation of,
the Offer or the acquisition of any INS Shares by Babcock or
any matters arising therefrom;
(ii) require, prevent or materially delay the divestiture by Babcock
or any of its subsidiaries, subsidiary undertakings or
associated undertakings (including any company of which 20 per
cent. or more of the voting capital is held by the Babcock
Group or any partnership, joint venture, firm or company in
which any of them may be interested) (together the "wider
Babcock Group") or INS or any of its subsidiaries, subsidiary
undertakings or associated undertakings (including any company
of which 20 per cent. or more of the voting capital is held by
the INS Group or any partnership, joint venture, firm or
company in which any of them may be interested) (together the
"wider INS Group") of all or any portion of their respective
businesses, assets or property or of any shares or other
securities in INS or impose any material limitation on the
ability of any of them to conduct all or any part of their
respective businesses or own their respective assets or
properties or any part thereof in each case which is material
taken in the context of the wider Babcock Group or the wider
INS Group as a whole;
(iii) impose any material limitation on the ability of any member of
the wider Babcock Group to acquire or hold or exercise
effectively, directly or indirectly, all rights of all or any
of the INS Shares (whether acquired pursuant to the Offer or
otherwise);
(iv) except pursuant to sections 977-982 of the Companies Act 2006,
require any member of the wider Babcock Group or the wider INS
Group to offer to acquire any shares or other securities or
rights thereover in any member of the wider INS Group owned by
any third party;
(v) make the Offer or its implementation or the proposed
acquisition of INS or any member of the wider INS Group or of
any INS Shares or any other shares or securities in, or control
of, INS, illegal, void or unenforceable in or under the laws of
any jurisdiction;
(vi) impose any material limitation on the ability of any member of
the wider Babcock Group or the wider INS Group to co-ordinate
its business, or any part of it, with the business of any other
member of the wider Babcock Group or the wider INS Group; or
(vii) otherwise materially and adversely affect any or all of the
businesses, assets or profits of any member of the wider
Babcock Group or the wider INS Group or the exercise of rights
of shares of any company in the INS Group,
and all applicable waiting periods during which such Relevant
Authority could institute, implement or threaten any such action,
proceeding, suit, investigation, enquiry or reference or otherwise
intervene having expired, lapsed or been terminated;
(b) all authorisations, orders, grants, consents, clearances, licences,
permissions and approvals, in any jurisdiction, which are necessary or
are reasonably considered necessary or appropriate by Babcock for or in
respect of the Offer, the proposed acquisition of any shares or
securities in, or control of, INS or any member of the wider INS Group by
any member of the wider Babcock Group or the carrying on of the business
of any member of the wider INS Group or any matters arising therefrom
being obtained in terms reasonably satisfactory to Babcock from all
appropriate Relevant Authorities or (without prejudice to the generality
of the foregoing) from any persons or bodies with whom any members of the
wider INS Group has entered into contractual arrangements in any case
(other than an anti-trust or merger control authority) to an extent which
would be material in the context of the wider INS Group taken as a whole
and such authorisations, orders, grants, consents, clearances, licences,
permissions and approvals remaining in full force and effect and there
being no intimation of any intention to revoke or not to renew the same
and all necessary filings having been made, all appropriate waiting and
other time periods (including extensions thereto) under any applicable
legislation and regulations in any jurisdiction having expired, lapsed or
been terminated and all necessary statutory or regulatory obligations in
any jurisdiction in respect of the Offer or the proposed acquisition of
INS by Babcock or of any INS Shares or any matters arising therefrom
having been complied with;
(c) appropriate assurances being received, in terms satisfactory to Babcock,
from the relevant authorities or any party with whom any member of the
wider INS Group has any contractual or other relationship that the
interests held by any member of the wider INS Group under licences,
leases, consents, permits and other rights will not be adversely amended
or otherwise affected by the Offer, to the extent which is or in a manner
which is material and adverse in the context of the Offer or the proposed
acquisition of INS or any matters arising therefrom, that such licences,
leases, consents, permits and other rights are in full force and effect
and that there is no intention to revoke or amend any of the same;
(d) save as publicly announced by INS prior to the date of this Announcement
(by the delivery of an announcement to a Regulatory Information Service)
or as fairly disclosed prior to the date of this Announcement in writing
to Babcock or its advisers by or on behalf of INS there being no
provision of any agreement, instrument, permit, licence or other
arrangement to which any member of the wider INS Group is a party or by
or to which it or any of its assets may be bound or subject which, as a
consequence of the Offer or the acquisition of INS or because of a change
in the control or management of INS or any member of the INS Group or any
matters arising therefrom or otherwise, could or might have the result to
the extent which is or in a manner which is material and adverse in the
context of the wider INS Group taken as a whole that:
(i) any material amount of monies borrowed by, or any other material
indebtedness, actual or contingent, of, or grant available to, any
member of the wider INS Group becomes or is capable of being
declared repayable immediately or earlier than the repayment date
stated in such agreement, instrument or other arrangement or the
ability of any member of the wider INS Group to borrow moneys or
incur indebtedness is withdrawn, inhibited or becoming capable of
being withdrawn;
(ii) any mortgage, charge or other security interest is created over
the whole or any material part of the business, property or assets
of any member of the wider INS Group or any such security
(whenever arising) becomes enforceable;
(iii) any such agreement, instrument, permit, licence or other
arrangement, or any right, interest, liability or obligation of
any member of the wider INS Group therein, is terminated or
materially and adversely modified or affected or any action is
taken or onerous obligation arises thereunder;
(iv) the value of any member of the wider INS Group or its financial or
trading position is prejudiced or adversely affected;
(v) any material asset or any interest of any member of the wider INS
Group being or falling to be charged or disposed of other than in
the ordinary course of trading;
(vi) the rights, liabilities, obligations or interests or business of
any member of the wider INS Group in or with any other person,
firm or company (or any arrangement relating to such interest or
business) is terminated or materially and adversely affected;
(vii) any member of the wider INS Group ceases to be able to carry on
business under any name under which it currently does so;
(viii) any such agreement, arrangement, licence or other instrument being
terminated or materially and adversely modified or any onerous
obligation arising or any material adverse action being taken or
arising thereunder; or
(ix) the creation of any material liabilities (actual or contingent) by
any such member of the wider INS Group other than in the ordinary
course of trading;
(e) since 31 December 2006, save as publicly announced by INS prior to the
date of this Announcement (by the delivery of an announcement to a
Regulatory Information Service) or as fairly disclosed prior to the date
of this Announcement in writing to Babcock or its advisers by or on
behalf of INS, no member of the INS Group having:
(i) issued or agreed to issue or authorised or proposed the issue of
additional shares of any class or issued or authorised or proposed
the issue of or granted securities convertible into or rights,
warrants or options to subscribe for or acquire such shares or
convertible securities or redeemed, purchased or reduced or
announced any intention to do so or made any other change to any
part of its share capital, sold or transferred or agreed to sell
or transfer any Treasury Shares (as defined in section 162A(3) of
the Companies Act, other than:
(A) to other members of the INS Group; or
(B) shares issued pursuant to the exercise of options or vesting
of awards in each case granted under the INS Share Schemes, or
under an employee's terms of employment;
(ii) recommended, declared, paid or made or proposed to recommend,
declare, pay or make any dividend, bonus or other distribution
other than dividends lawfully paid to INS or wholly-owned
subsidiaries of INS;
(iii) implemented or authorised any merger or demerger or acquired or
disposed of or transferred, mortgaged or charged, or created any
other security interest over, any material asset or any right,
title or interest in any material asset (in each case other than
in the ordinary course of trading) and other than transactions
between members of the INS Group;
(iv) authorised or proposed or announced its intention to propose any
merger or acquisition or disposal or transfer of material assets
or any change in its loan capital;
(v) purchased, redeemed or repaid any of its own shares or other
securities or reduced or made or authorised any other material
change in its share capital save in respect of the matters
mentioned in paragraph (i) above;
(vi) issued or authorised or proposed the issue of any material
debentures or incurred or increased any indebtedness or contingent
liability in each case other than to members of the INS Group;
(vii) entered into or varied any contract, commitment or arrangement
(whether in respect of capital expenditure or otherwise) other
than in the ordinary course of trading which is of a long term or
unusual nature or which involves or could involve an obligation of
a nature or magnitude which is material or authorised, proposed or
announced any intention to do so;
(viii) entered into, or varied the terms of, any contract or agreement
with any of the directors of INS;
(ix) other than by way of solvent winding-up in respect of a member
which is dormant at the relevant time, taken or proposed any
corporate action or had any legal proceedings started 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;
(x) waived or compromised any claim other than in the ordinary course
of trading;
(xi) made any amendment to its memorandum or articles of association or
other incorporation documents;
(xii) made or agreed or consented to:
(A) any significant change to:
(I) the terms of the trust deeds constituting the pension
scheme(s) established for its directors, employees or
their dependants; or
(II) the benefits which accrue or to the pensions which are
payable thereunder; or
(III) the basis on which qualification for, or accrual or
entitlement to such benefits or pensions are calculated
or determined; or
(IV) the basis upon which the liabilities (including
pensions) or such pension schemes are funded or made; or
(B) any change to the trustees including the appointment of a
trust corporation;
(xiii) other than in the ordinary course of its trading, entered into any
contract, transaction or arrangement which is or may be
restrictive on the business of any member of the wider INS Group
or the wider Babcock Group;
(xiv) entered into any contract, commitment or agreement with respect to
any of the transactions or events referred to in this condition;
and
(xv) been unable or admitted 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;
(f) since 31 December 2006, save as publicly announced by INS prior to the
date of this Announcement (by the delivery of an announcement to a
Regulatory Information Service) or as fairly disclosed prior to the date
of this Announcement in writing to Babcock or its advisers by or on
behalf of INS:
(i) no litigation, arbitration, prosecution or other legal proceedings
having been instituted, announced or threatened or become pending
or remained outstanding by or against any member of the wider INS
Group or to which any member of the wider INS Group is or may
become a party (whether as plaintiff, defendant or otherwise)
which is material and adverse in the context of the wider INS
Group taken as a whole;
(ii) no adverse change having occurred in the business, assets,
financial or trading position, profits or prospects of any member
of the wider INS Group to the extent or which is or in a manner
which is material and adverse in the context of the Offer which is
material and adverse in the context of the wider INS Group taken
as a whole; or
(iii) (other than as a result of the Offer) no investigation by any
Relevant Authority having been threatened, announced, implemented
or instituted or remaining outstanding to the extent which is or
in a manner which is material and adverse in the context of the
Offer or which is material and adverse in the context of the wider
INS Group taken as a whole;
(g) since 31 December 2006, save as publicly announced by INS prior to the
date of this Announcement (by the delivery of an announcement to a
Regulatory Information Service) or as fairly disclosed prior to the date
of this Announcement in writing to Babcock or its advisers by or on
behalf of INS, Babcock not having discovered that:
(i) any financial, business or other information concerning any member
of the INS Group disclosed, publicly or otherwise at any time to
Babcock, by or on behalf of any member of the INS Group, either
contains a misrepresentation of fact or omits to state a fact
necessary to make the information contained therein not misleading
and which was not subsequently corrected before the date of this
Announcement by disclosure either publicly or otherwise to Babcock
to an extent which in any case is material and adverse in the
context of the wider INS Group taken as a whole; or
(ii) any member of the wider INS Group is subject to any liability,
actual or contingent, which is not disclosed in the annual report
and accounts of INS for the financial year ended 31 December 2006
and which in any case is material and adverse in the context of
the wider INS Group taken as a whole; and
(h) since 31 December 2006, save as publicly announced by INS prior to
the date of this Announcement (by the delivery of an announcement to
a Regulatory Information Service) or as fairly disclosed prior to the
date of this Announcement in writing to Babcock or its advisers by or
on behalf of INS, Babcock not having discovered that:
(i) any past or present member of the wider INS Group has failed to
comply with any applicable legislation or regulations of any
jurisdiction with regard to the storage, disposal, discharge,
spillage, leak or emission of any waste or hazardous substance
or any substance likely to impair the environment or to harm
human health or otherwise relating to environmental matters
(which non-compliance is reasonably likely to give rise to any
material liability (whether actual or contingent) on the part
of any member of the wider INS Group) or that there has
otherwise been any such disposal, discharge, spillage, leak or
emission (whether or not the same constituted a non-compliance
by any person with any such legislation or regulations and
wherever the same may have taken place) which in any such case
is reasonably likely to give rise to any material liability
(whether actual or contingent) on the part of any member of the
wider INS Group which is material and adverse in the context of
the wider INS Group taken as a whole;
(ii) there is or is likely to be any material 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 INS Group under
any environmental legislation, regulation, notice, circular or
order of any Relevant Authority or third party or otherwise
which is material and adverse in the context of the wider INS
Group taken as a whole; or
(iii) that circumstances exist (whether as a result of the making of
the Offer or otherwise) which are reasonably likely to lead to
any Relevant Authority instituting or any member of the wider
INS Group or the wider Babcock Group might be required to
institute, an environmental audit or take any other steps which
in any such case might result in any actual or contingent
liability to improve or install new plant or equipment or make
good, repair, re-instate or clean up any land or other asset
now or previously owned, occupied or made use of by any member
of the wider INS Group which is material and adverse in the
context of the wider INS Group taken as a whole.
1.4 Subject to the requirements of the Panel, Babcock reserves the right to
waive all or any of conditions 1.3(a) to 1.3(h) above, in whole or in
part. Babcock shall be under no obligation to waive or treat as satisfied
any of conditions 1.3(a) to 1.3(h) by a date earlier than the date of the
sanction of the Scheme referred to in condition 1.2(c) notwithstanding
that the other conditions of the Offer may at such earlier date have been
waived or fulfilled and that there are at such earlier date no
circumstances indicating that any of such conditions may not be capable
of fulfilment.
1.5 If Babcock is required by the Panel to make an offer for INS Shares under
the provisions of Rule 9 of the Code, Babcock may make such alterations
to the conditions as are necessary to comply with the provisions of that
Rule.
1.6 The Offer will lapse (unless otherwise agreed by the Panel) if the Offer
is referred to the Competition Commission or if the European Commission
in respect thereof either initiates proceedings under article 6(1)(c) of
Council Regulation (EEC) 4064/89 or makes a referral to a competent
authority of the United Kingdom under article 9(1) of that Regulation,
before (in any such case) the date of the Court Meeting.
1.7 Subject to the consent of the Panel, Babcock reserves the right to elect
to implement the Offer by way of a takeover offer. In such event, the
offer will be implemented on the same terms (subject to appropriate
amendments, including (without limitation) an acceptance condition set at
90 per cent. (or such lesser percentage as Babcock may, subject to
compliance with the Code, decide) of the shares to which such offer
relates and of the voting rights carried by those shares), so far as
applicable, as those which would apply to the Scheme.
1.8 The Offer and the Scheme are governed by English law and will be subject
to the jurisdiction of the English courts and the conditions set out
above.
Appendix II
BASES AND SOURCES OF INFORMATION
Save as otherwise stated, the following constitute the bases and sources of
certain information referred to in this Announcement:
1. Information relating to INS has been extracted from the AIM admission
document, dated 5 May 2006, and from INS's preliminary annual results
announcement for the year ended 31 December 2006; information relating to
Babcock has been extracted from the relevant published audited reports and
accounts of Babcock and interim reports.
2. The value of the entire issued share capital of INS is based on 62,335,374
INS Shares in issue at 3 April 2007 being the latest practicable day prior to
this Announcement.
3. The maximum cash consideration payable under the Offer is based on 47,061,499
INS Shares (being those INS Shares in issue not already owned by Babcock) and no
more than 1,250,826 "in the money" employee share options outstanding over INS
Shares at the date of this Announcement and which are expected to become
exercisable as a consequence of the Scheme.
4. Unless otherwise stated, all prices quoted for shares are closing mid-market
prices and are derived from the Daily Official List of the London Stock
Exchange.
Appendix III
DEFINITIONS
The following definitions apply throughout this Announcement unless the context
requires otherwise.
"AIM" AIM, a market operated by the London Stock Exchange;
"Announcement" this announcement;
"Articles" articles of association;
"Babcock" Babcock International Group PLC, a public limited company
incorporated in England and Wales with registered number
02342138;
"Babcock Group" Babcock and its subsidiary undertakings and, where the context
or "Group" permits, each of them;
"Board" the full board of Directors of INS as of the date of this
Announcement;
"Business Day" a day (excluding Saturdays, Sundays and UK public holidays) on
which banks in London are generally open for business in the
City of London;
"the Code" or the City Code on Takeovers and Mergers;
"City Code"
"Closing Price" the closing middle market quotation of an INS Share as derived
from the Daily Official List;
"Companies Act" the Companies Act 1985, as amended;
or "Act"
"Competing a proposed offer, tender offer, merger, acquisition, scheme of
Proposal" arrangement, recapitalisation or other combination (including a
transaction involving a dual listed company structure) relating
to any direct or indirect acquisition or purchase of 50 per
cent. or more of the INS Shares or a material amount (as defined
in note 2 of Rule 21.1 of the City Code) of the business and
assets of INS and its subsidiaries proposed by any third party;
"Conditions" the conditions to the implementation of the Offer (including the
Scheme) and the Offer which are set out in Appendix I to this
Announcement;
"connected has the meaning given to it in section 346 of the Companies Act;
person"
"Court" the High Court of Justice in England and Wales;
"Court Hearing" the hearing at which the Court's confirmation of the reduction
of capital and the Court's sanction of the Scheme will be
sought;
"Court Meeting" the meeting of the Scheme Shareholders to be convened pursuant
to an order of the Court pursuant to section 425 of the
Companies Act for the purpose of considering and, if thought
fit, approving the Scheme (with or without modification), and
any adjustment thereof;
"Court Order" the order of the Court sanctioning the Scheme under section 425
of the Act and confirming the associated reduction of capital;
"CREST" the system for the paperless settlement of trades in securities
and the holding of uncertificated securities generated by
CRESTCo in accordance with the Uncertificated Securities
Regulations 2001 (SI 2001 No.3755);
"CRESTCo" CRESTCo Limited;
"Daily Official the Daily Official List of the London Stock Exchange;
List"
"Effective the date on which the Scheme becomes effective in accordance
Date" with its terms;
"EGM" or the extraordinary general meeting of INS Shareholders (and any
"Extraordinary adjournment thereof) to be convened in connection with the
General Offer;
Meeting"
"EMI Scheme" INS 2006 Enterprise Management Incentive Scheme;
"Forms of the blue Form of Proxy for use at the Court Meeting and the pink
Proxy" Form of Proxy for use at the EGM or either of them as the
context dictates;
"Grant Grant Thornton Corporate Finance, the corporate finance division
Thornton" of Grant Thornton UK LLP;
"Hawkpoint" Hawkpoint Partners Limited;
"holder" a registered holder, including any person entitled by
transmission;
"Independent all INS Shareholders other than Babcock;
Shareholders"
"INS" or "the International Nuclear Solutions PLC a public limited company
Company" incorporated in England and Wales with registered number 5738079
or, where the context requires, INS Innovation Limited;
"INS Directors" Christopher John Brown, Anthony Moore, Geoffrey John Mellor,
Stephen Joseph McGowan and John Gordon Ridings, who are
directors of INS;
"INS Group" INS and its subsidiary undertakings and, where the context
permits, each of them;
"INS the holders of INS Shares;
Shareholders"
or
"Shareholders"
"INS Share the INS 2006 Enterprise Management Incentive Scheme and the INS
Schemes" 2006 Savings-Related Share Option Scheme;
"INS Shares" the shares of one pence each in the capital of INS and "INS
Share" means any one of them;
"Implementation the Implementation Agreement dated 3 April 2007 between INS and
Agreement" Babcock pursuant to which the parties have agreed to implement
the Scheme;
"JPMorgan JPMorgan Cazenove Limited;
Cazenove"
"Listing Rules" the listing rules made by the UK Listing Authority ''The Listing
Rules'' (as amended from time to time);
"London Stock London Stock Exchange plc;
Exchange"
"Meetings" the Court Meeting and/or the EGM as the case may be;
"NDA" the Nuclear Decommissioning Authority;
"Non-executive each of Christopher John Brown and John Gordon Ridings;
Directors"
"Offer" the recommended cash offer by Babcock for the entire issued and
to be issued share capital of INS to be implemented by way of
the Scheme and the other matters relevant thereto to be
considered at the Court Meeting and EGM;
"Overseas INS Shareholders (or nominees of, or custodians or trustees for
Shareholders" INS Shareholders) not resident in or citizens of the United
Kingdom;
"Panel" the Panel on Takeovers and Mergers;
"Reduction 6.00 p.m. on the last Business Day immediately prior to the date
Record Time" of the Court Hearing;
"Registrar of the Registrar of Companies of England and Wales;
Companies"
"Regulatory any of the services set out in schedule 12 to the Listing Rules;
Information
Service" or
"RIS"
"RTS" Robotic Technology Systems PLC;
"Rothschild" NM Rothschild & Sons Limited;
"SAYE Scheme" INS 2006 Savings-Related Share Option Scheme;
"Scheme" or the proposed scheme of arrangement under section 425 of the
"scheme of Companies Act between INS and Scheme Shareholders, with or
arrangement" subject to any modification, addition thereto or condition
approved or imposed by the Court and agreed to by INS and
Babcock;
"Scheme the document to be posted to INS Shareholders and others
Document" containing, inter alia, the Scheme and the notices of the
Meetings;
"Scheme Record 6:00 p.m. on the Business Day immediately prior to the Effective
Time" Date;
"Scheme the holders of Scheme Shares;
Shareholders"
"Scheme Shares" (i) the INS Shares in issue at the date of the Scheme Document;
(ii) any INS Shares issued after the date of the Scheme Document
and before the Voting Record Time in respect of the Court
Meeting; and
(iii) any INS Shares issued at or after the Voting Record Time
in respect of the Court Meeting but on or before the Reduction
Record Time,
excluding any INS Shares held by Babcock and, for the avoidance
of doubt, excluding any shares held in treasury by the Company;
"subsidiary" have the meaning given to them in the Companies Act;
and "subsidiary
undertaking"
"UK" or "United the United Kingdom of Great Britain and Northern Ireland;
Kingdom"
"UK Listing the Financial Services Authority acting in its capacity as the
Authority" competent authority for the purpose of Part VI of the Financial
Services and Markets Act 2000 (as amended);
"US" or "United the United States of America, its territories and possessions,
States" any state of the United States of America and the District of
Columbia;
"US Person" a US Person as defined in Regulation S under the US Securities
Act and any nominee thereof;
"US Securities US Securities Act of 1933, as amended; and
Act"
"Voting Record the time fixed by the Court and INS for determining the
Time" entitlement to vote, respectively at the Court Meeting and the
EGM as will be set out in the notices thereof.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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