Rejection of proposals (7838D)

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RNS Number : 7838D
Mouchel Group plc
29 March 2011
 
 PRESS ANNOUNCEMENT 
 FOR IMMEDIATE RELEASE 
 29 MARCH 2011 
 NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN, INTO OR 
  FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION 
  OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION 
  MOUCHEL GROUP PLC - REJECTION OF PROPOSALS FOR THE COMPANY 
 The Board of Mouchel Group plc ("Mouchel" or "the Company") 
  announced on 24 February that the Company had signed a co-operation 
  agreement in relation to a potential offer being made for 
  the Company. On 25 February, Interserve plc ("Interserve") 
  announced that it was the potential offeror referred to in 
  Mouchel's announcement. 
  Following mutual due diligence, Interserve submitted a revised 
  and significantly reduced conditional proposal to the Board 
  of Mouchel valuing each Mouchel share at 135 pence, including 
  50 pence in cash. 
  On 21 January Costain Group plc ("Costain") announced a conditional 
  proposal comprising 0.5531 Costain shares and 30 pence in 
  cash for each Mouchel share which at that time valued Mouchel 
  at 153.2 pence per share plus the entitlement to any final 
  dividend payable by Costain in respect of the year ended 
  31 December 2010. On 17 February, after conducting some initial 
  due diligence Costain reduced its proposal to 0.5531 Costain 
  shares and 22.25 pence in cash and with no entitlement to 
  any final dividend. 
  The Board believes that Interserve's revised conditional 
  proposal significantly undervalues the business and that 
  Costain's proposal has an unacceptably high level of execution 
  risk to warrant further discussions. Any such discussions 
  would also entail a further period of uncertainty and disruption 
  to the business. 
  Accordingly, and having consulted a number of Mouchel's largest 
  shareholders (who, in total, represent over 50 per cent. 
  of Mouchel's issued share capital), the Board has decided 
  it is not in shareholders' interests to proceed with any 
  further discussions with Interserve or Costain. This announcement 
  has not been made with the consent of either Interserve or 
  Costain. There can be no certainty at this stage whether 
  any offer will be made by either Interserve or Costain or 
  as to the terms of any offer which might be made. Accordingly, 
  the Company remains in an offer period for the purposes of 
  the City Code on Takeovers and Mergers. 
  The Board continues to expect to report results for the year 
  ending 31 July 2011 broadly in line with its earlier expectations. 
  We anticipate that the current trading environment will remain 
  challenging in the short term. As a result, our focus remains 
  firmly on supporting existing clients in helping them to 
  achieve their objectives while managing our own cost base 
  and cash resources tightly. As previously noted, trading 
  performance is expected to be weighted to the second half. 
  The full year outcome remains dependent on the Company delivering 
  a number of key initiatives and continuing to win work in 
  those parts of the business where there has traditionally 
  been less visibility and where the Government's deficit reduction 
  programme continues to result in delayed or reduced spending 
  decisions in our public sector customer base. 
  Whilst we are not yet experiencing improved trading conditions 
  and remain cautious in the short term, the Group will benefit 
  from the full year effect of cost savings in 2011/12. 
  In the medium and longer term, the outlook for Mouchel is 
  compelling. We are confident that our focused strategy, established 
  market position and our leading role in transforming essential 
  services and sustaining vital infrastructure underpins the 
  outlook. In an environment where all of our clients are facing 
  the challenge of delivering higher quality services more 
  efficiently, it is clear that our skills will be increasingly 
  in demand. 
  The Board's priority remains to enhance shareholder value, 
  and we remain confident in Mouchel's prospects as an independent 
  business. 
  Mouchel's interim results have been announced this morning. 
 END 
  Contacts: 
  Mouchel Group plc: +44 (0) 1483 731 731 
  Richard Cuthbert, Chief Executive 
  David Tilston, Group Finance Director 
  Finsbury +44 (0) 207 251 3801 
  Faeth Birch 
  Andrew Dowler 
  Charles Watenphul 
  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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