Comment on Rule 2.4 Ann. by Pyrrho Investment Ltd
May 14 2010 - 12:40PM
UK Regulatory
TIDMLBE TIDMMWB
RNS Number : 9966L
Liberty PLC
14 May 2010
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN, INTO OR
FROM ANY JURISDICTION WHERE TO DO THE SAME WOULD CONSTITUTE A VIOLATION OF THE
RELEVANT LAWS OF SUCH JURISDICTION
PRESS ANNOUNCEMENT
FOR IMMEDIATE RELEASE
14 May 2010
Liberty Plc ("Liberty")
COMMENT ON RULE 2.4 ANNOUNCEMENT BY PYRRHO INVESTMENT LIMITED
Pyrrho Investment Limited ("Pyrrho") has today issued a Rule 2.4 announcement in
relation to Liberty. Liberty announces that it wishes to clarify the various
points raised therein, as follows.
Ø On 6 May 2010, both the Liberty Board and MWB Group Holdings Plc ("MWB")
Board, resolved to proceed with the BlueGem Proposed Offer of 186 pence per
share, for the following reasons:
o it was the best price on the table;
o BlueGem had already undertaken over four months of extensive due diligence on
Liberty, so its proposal was fully researched; and
o BlueGem was prepared to commit to declare the offer unconditional as to
acceptances from 86.3% of shareholders, instead of the customary 90%. As hard
irrevocable undertakings to vote in favour of the BlueGem Proposed Offer had
been obtained for 86.3% of the Liberty ordinary shares this gave the BlueGem
Proposed Offer a high degree of certainty.
Ø Pyrrho had been aware of the possible sale of Liberty since the strategic
review announcement on 27 July 2009, yet showed absolutely no interest in
acquiring Liberty until it submitted an indicative and highly conditional
proposal on 4 May 2010.
Ø If the Liberty Board had not agreed to proceed with the BlueGem Proposed Offer
on 6 May 2010 it would have fallen away. Pyrrho's advisers were fully aware of
this and knew that the Liberty Board had to make a decision then and there.
Ø The Liberty Board correctly decided to proceed with the higher and more fully
developed proposal from BlueGem instead of moving to a completely new potential
bidder at a lower price.
Ø Having originally proposed making an offer in the range of 190-200 pence on 4
May 2010, Pyrrho subsequently, on 6 May 2010, proposed a lower offer at 185
pence. Arbuthnot, Pyrrho's advisers, informed MWB's advisers on 6 May 2010 that
Pyrrho was not prepared to increase that offer on an unconditional basis above
185 pence. Pyrrho thus had every opportunity to increase its proposed offer on 6
May 2010 but chose not to do so.
The Board of Liberty made an informed choice based on the proposals in front of
them on 6 May 2010. This was the correct way to proceed and the Board acted
properly and in the best interests of the Liberty Shareholders.
Background
The background to this announcement is set out in summary below.
1. As set out in the Rule 2.4 announcement by Liberty dated 7 May 2010, on 6
May 2010 BlueGem made a proposed offer for Liberty's ordinary shares of, in
aggregate, 186 pence per share (the "BlueGem Proposed Offer"). This proposal was
made following some four months of extensive due diligence on Liberty by BlueGem
and was also the subject of detailed negotiations since 12 March 2010. The
BlueGem Proposed Offer was conditional on: i) the receipt of hard irrevocable
undertakings by MWB, Liberty's 68.3% shareholder (the "MWB Irrevocables"); and
ii) receipt of hard irrevocable undertakings from holders of ordinary shares in
MWB representing 51.1 % of the ordinary share capital of MWB (the "MWB
Shareholder Irrevocables") on 6 May 2010.
2. When Pyrrho made its revised and unconditional proposed offer of 185 pence
per share for Liberty on 6 May 2010 (the "Pyrrho Proposal"), it was aware,
having been informed in writing, that the BlueGem Proposed Offer would fall away
if the MWB Irrevocables were not given on 6 May 2010.
3. On 6 May 2010, Pyrrho's advisers clearly indicated to MWB's advisers that
it was not prepared to increase the Pyrrho Proposal on an unconditional basis
beyond the indicated level of 185 pence per share.
4. In view of the risk of losing the BlueGem Proposed Offer and the fact that
at 186 pence per share this was higher than the Pyrrho Proposal, the Board of
Liberty resolved to proceed with the BlueGem Proposed Offer.
5. The following shareholders in Liberty entered into hard irrevocable
undertakings on 6 May 2010 (the "Liberty Offer Irrevocables") to accept the
BlueGem Proposed Offer, subject to the making of the BlueGem Proposed Offer by
BlueGem:
a. MWB and certain of its wholly owned subsidiaries in relation to their
combined holding of 15,447,409 Liberty ordinary shares.
b. Principle Capital Investments Limited in relation to its holding of
1,693,541 Liberty ordinary shares.
c. Cartesian Partners in relation to its holding of 2,359,177 Liberty ordinary
shares.
6. In total this meant that 86.3 per cent. of Liberty's shareholders had
irrevocably agreed to accept BlueGem's proposed offer conditional only upon
BlueGem releasing a Rule 2.5 announcement by 8 June 2010. Under the terms of
those irrevocable undertakings it is not possible for any of those shareholders
(including MWB) to accept or agree to accept a competing offer unless BlueGem
does not make a formal offer for the Company.
7. All of the Liberty Offer Irrevocables and MWB Shareholder Irrevocables were
entered into in full knowledge of both the Pyrrho Proposal and the earlier
conditional proposed offer by Pyrrho of 190-200 pence per share. A summary of
the key terms of the Liberty Offer Irrevocables is appended to this
announcement.
8. There was no undertaking by Liberty's advisers to Pyrrho or its advisers to
provide updates on the status of the BlueGem Proposed Offer.
9. At no stage prior to the announcement of the BlueGem Proposed Offer at 7.00
am on 7 May 2010 did Pyrrho or Pyrrho's advisers inform Liberty or Liberty's
advisers that it might be willing to increase the Pyrrho Proposal.
10. As a courtesy, Pyrrho was notified of the resolution by the Liberty Board to
accept the BlueGem Proposed Offer before the Rule 2.4 announcement setting out
the BlueGem Proposed Offer was made on 7 May 2010.
In conclusion, the Liberty Board is fully satisfied that the strategic review
process and subsequent proposed sale of Liberty has been conducted in a thorough
and professional manner throughout.
This announcement has been made without Pyrrho's consent and therefore any
statements regarding its unwillingness to increase its proposed offer should not
be taken as a "no increase statement" falling under Rule 32.2 of the Code.
For further information, please contact:
Liberty Plc
Richard Balfour-Lynn, Chairman +44
(0) 20 7706 2121
Baron Phillips Associates (Financial PR Adviser)
Baron Phillips
+44 (0) 20 7920 3161
Seymour Pierce Limited
Nicola Marrin
+44 (0) 207 107 8000
Jonathan Wright
Copies of this announcement are available on Liberty's website,
http://www.liberty.co.uk/fcp/content/InvestorInformation/content and MWB's
website, http://www.mwb.co.uk/mwb/regulatorynews.jsp
APPENDIX
Summary of principal terms of Liberty Offer Irrevocables
Each person who has entered into an irrevocable undertaking has undertaken (on
its own behalf and on behalf of its associates) inter alia not to (i) sell,
transfer, charge, encumber, grant any option over or otherwise dispose of any
interest in any ordinary shares such person holds in Liberty; (ii) accept any
other offer in respect of its ordinary shares in Liberty; (iii) purchase, sell
or otherwise deal in ordinary shares in Liberty or any interest therein; (iv)
requisition any shareholder meeting of Liberty; or (v) agree to do any of the
things described in (i) or (ii) above.
Such persons have further undertaken inter alia to accept or procure the
acceptance of the Proposed Offer in respect of their ordinary shares in Liberty
and not to withdraw or procure the withdrawal of such acceptance.
From the time that a Proposed Offer is announced to the time that a Proposed
Offer becomes wholly unconditional, lapses or is withdrawn, such persons have
undertaken to exercise votes (and or any other rights) attaching to their
ordinary shares in Liberty in accordance with BlueGem's directions in relation
to the passing or proposal of any resolution necessary to implement the Proposed
Offer or which, if passed, might result in any condition of the Proposed Offer
not being fulfilled or which might impede or frustrate the Proposed Offer.
The undertakings provided by MWB and MWB Retail Stores Shareholder Limited are
conditional on the sale by MWB of the Relevant Liberty Shares pursuant to the
Proposed Offer being approved by shareholders of MWB at a general meeting of the
shareholders of MWB.
The undertakings shall also lapse and shall cease to be binding if the Proposed
Offer is not formally announced by 8 June 2010; or if after the Proposed Offer
is announced the Panel on Takeovers and Mergers consents to BlueGem not making
the offer or an event occurs which means that BlueGem is no longer required by
the Takeover Code to proceed with the Offer; or if the offer document and
associated form of acceptance in respect of the Proposed Offer is not posted
within 28 days of the formal announcement of the Proposed Offer; or if the
Proposed Offer once formally announced lapses or is withdrawn in accordance with
the Takeover Code.
In addition, the directors of Liberty have undertaken inter alia (i) to
recommend the Proposed Offer to the shareholders of Liberty; (ii) not to
solicit, initiate or encourage any other person to make an offer for Liberty;
and (iii) except where required by his duties as a director of Liberty or under
the Takeover Code, and in any event only in response to an unsolicited approach,
not to enter into or continue discussions or agreements with, or provide any
information to any person considering making such an offer or otherwise take any
action which might be prejudicial to the outcome of the Proposed Offer.
Disclosure requirements of the Takeover Code (the "Code")
Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of any
class of relevant securities of an offeree company or of any paper offeror
(being any offeror other than an offeror in respect of which it has been
announced that its offer is, or is likely to be, solely in cash) must make an
Opening Position Disclosure following the commencement of the offer period and,
if later, following the announcement in which any paper offeror is first
identified. An Opening Position Disclosure must contain details of the person's
interests and short positions in, and rights to subscribe for, any relevant
securities of each of (i) the offeree company and (ii) any paper offeror(s). An
Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made
by no later than 3.30 pm (London time) on the 10th business day following the
commencement of the offer period and, if appropriate, by no later than 3.30 pm
(London time) on the 10th business day following the announcement in which any
paper offeror is first identified. Relevant persons who deal in the relevant
securities of the offeree company or of a paper offeror prior to the deadline
for making an Opening Position Disclosure must instead make a Dealing
Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1%
or more of any class of relevant securities of the offeree company or of any
paper offeror, must make a Dealing Disclosure if the person deals in any
relevant securities of the offeree company or of any paper offeror. A Dealing
Disclosure must contain details of the dealing concerned and of the person's
interests and short positions in, and rights to subscribe for, any relevant
securities of each of (i) the offeree company and (ii) any paper offeror, save
to the extent that these details have previously been disclosed under Rule 8. A
Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no
later than 3.30 pm (London time) on the business day following the date of the
relevant dealing.
If two or more persons act together pursuant to an agreement or understanding,
whether formal or informal, to acquire or control an interest in relevant
securities of an offeree company or a paper offeror, they will be deemed to be a
single person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree company and by any
offeror and Dealing Disclosures must also be made by the offeree company, by any
offeror and by any persons acting in concert with any of them (see Rules 8.1,
8.2 and 8.4). Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing Disclosures must be
made can be found in the Disclosure Table on the Takeover Panel's website at
www.thetakeoverpanel.org.uk, including details of the number of relevant
securities in issue, when the offer period commenced and when any offeror was
first identified. If you are in any doubt as to whether you are required to make
an Opening Position Disclosure or a Dealing Disclosure, you should contact the
Panel's Market Surveillance Unit on +44 (0)20 7638 0129.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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