TIDMDX. TIDMMNZS
RNS Number : 1006B
DX (Group) PLC
31 March 2017
NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF
AMERICA, AUSTRALIA, CANADA, JAPAN OR SOUTH AFRICA OR ANY OTHER
JURISDICTION WHERE IT IS UNLAWFUL TO DISTRIBUTE THIS
ANNOUNCEMENT
The information contained in this announcement is inside
information for the purposes of article 7 of Regulation
596/2014.
31 March 2017
Potential combination of DX and John Menzies' Distribution
division
The boards of DX (Group) plc ("DX") and John Menzies plc ("John
Menzies") today announce that they are in discussions regarding the
potential combination of DX and John Menzies' Distribution division
("Menzies Distribution") (the "Transaction" and together the
"Enlarged Group").
The boards of DX and John Menzies believe that the combination
has strong strategic logic for all stakeholders and represents an
opportunity to deliver significant value to both companies'
shareholders. The boards of DX and John Menzies believe that the
combination would benefit the customers of DX and Menzies
Distribution through the creation of a logistics and parcel carrier
of enhanced scale and capability operating through a 24 hour UK
wide logistics network. Based on a preliminary joint assessment,
the boards of DX and John Menzies estimate that the combination
would generate cost synergies in the range of GBP8 million to GBP12
million per annum.
It is currently envisaged that the Transaction would be effected
by DX acquiring Menzies Distribution for consideration, on a cash
and debt free basis, comprising GBP60 million in cash and the issue
of new DX ordinary shares (the "New DX Shares") representing 80% of
DX's issued share capital as enlarged by the Transaction. The cash
consideration will be satisfied by new borrowings by the Enlarged
Group.
As part of the Transaction, it is proposed that approximately
17% of John Menzies' defined benefit pension scheme would transfer
to the Enlarged Group. John Menzies' pension scheme would receive
New DX Shares amounting to up to 5% of DX's issued share capital as
enlarged by the Transaction as part of the transfer arrangements
agreed with the John Menzies pension trustees.
It is intended that the balance of the New DX Shares would be
issued by DX to John Menzies' shareholders pro rata to their
holdings of shares in John Menzies at the relevant date. On this
basis, current DX shareholders would own, in aggregate, 20% of DX's
issued share capital, John Menzies shareholders would own, in
aggregate, at least 75% of DX's issued share capital and up to 5%
of DX's issued share capital would be owned directly by John
Menzies' pension scheme.
The boards of DX and John Menzies believe the proposed
Transaction structure enables both DX and John Menzies shareholders
to share in the significant value created by the combination of DX
and Menzies Distribution, whilst increasing significantly the
liquidity of DX's ordinary shares and enabling the divestment of
Menzies Distribution into a separately quoted company in line with
John Menzies' strategy.
On completion of the Transaction, it is intended that the
composition of the board of the Enlarged Group would comprise a new
chairman and new independent non-executive directors. Greg Michael
and Paul McCourt, currently Managing Director and Finance Director,
respectively, of Menzies Distribution, would become Group Chief
Executive Officer and Chief Financial Officer of DX. Daljit Basi,
currently Finance Director of DX, will become an Executive
Director.
The Boards of DX and John Menzies currently anticipate the
Transaction will be completed during the summer of 2017.
Discussions are ongoing and there can be no certainty that a
transaction will occur.
Zeus Capital is acting as financial adviser to DX and Rothschild
is acting as financial adviser to John Menzies.
Greg Michael (Managing Director of Menzies Distribution) was
appointed Managing Director of Menzies Distribution on 1 January
2017. He has previously held senior positions in DHL and Deutsche
Post and has a successful track record in managing and driving
companies' growth performance within the logistics sector.
Paul McCourt (Finance Director of Menzies Distribution) joined
Menzies Distribution in 2014 from Ingenico Northern Europe and
Iberia where he was Finance and Operations Director. Before that
Paul spent 10 years with PricewaterhouseCoopers as a senior manager
followed by 3 years at Grant Thornton as a Director.
If the Transaction proceeds, it will constitute a reverse
takeover by DX in accordance with Rule 14 of the AIM Rules for
Companies. Accordingly, ordinary shares in DX are expected to be
suspended from trading on AIM as of 7.30am today, pending either
publication of an admission document containing detailed
information on the proposed transaction in accordance with AIM Rule
14 or the termination of discussions regarding the proposed
transaction.
A further announcement will be made when appropriate.
Contacts:
DX (Group) plc
Bob Holt, Chairman M: 07778 798816
Zeus Capital (Financial Adviser and Nominated T: 020 3829 5000
Adviser to DX)
Nick How, Giles Balleny (Corporate Finance)
Dominic King (Corporate Broking)
KTZ Communications T: 020 3178 6378
Katie Tzouliadis, Emma Pearson
John Menzies plc T: 0131 459 8018
Giles Wilson, Chief Financial Officer
John Geddes, Group Company Secretary & Corporate
Affairs Director
Rothschild (Financial Adviser to John Menzies) T: 020 7280 5000
Neil Thwaites
Sabina Pennings
Numis Securities (Joint Broker to John Menzies) T: 020 7260 1000
Christopher Wilkinson, Michael Burke
FTI Consulting T: 020 3727 1000
Jonathon Brill, Alex Beagley
Important notice
N M Rothschild & Sons Limited ("Rothschild"), which is
authorised and regulated by the Financial Conduct Authority ("FCA")
in the United Kingdom, is acting as sponsor and financial adviser
to John Menzies in connection with the Transaction referred to in
this announcement. Rothschild is acting exclusively for John
Menzies and no one else in connection with the Transaction and save
for any responsibilities and liabilities, if any, which may be
imposed on Rothschild, in its capacity as sponsor by the Financial
Services and Markets Act 2000, as amended, Rothschild will not be
responsible to anyone other than John Menzies for providing the
protections afforded to clients of Rothschild or for providing
advice in relation to the Transaction or the contents of this
announcement or any transaction, arrangement or matter referred to
herein.
Zeus Capital Limited ("Zeus Capital"), which is authorised and
regulated in the United Kingdom by the FCA is acting as nominated
adviser and financial adviser to DX in connection with the
Transaction referred to in this announcement. Zeus is acting
exclusively for DX and no one else in connection with the
Transaction and will not be responsible to anyone other than DX for
providing the protections afforded to clients of Zeus Capital or
for providing advice in relation to the Transaction or the contents
of this announcement or any transaction, arrangement or matter
referred to herein.
Numis Securities Limited ("Numis") is authorised and regulated
by the FCA in the United Kingdom, is acting solely for John Menzies
and nobody else in relation to the Transaction and will not be
responsible to anyone other than John Menzies for providing the
protections afforded to its clients nor for providing advice in
relation to the Transaction or any other matter referred to in
this.
This announcement has been issued by and is the responsibility
of DX.
This announcement is not intended to, and does not, constitute
or form part of any offer, invitation or the solicitation of an
offer to purchase, otherwise acquire, subscribe for, sell or
otherwise dispose of, any securities pursuant to this announcement
or otherwise. The distribution of this announcement in
jurisdictions outside the United Kingdom may be restricted by law
and therefore persons into whose possession this announcement comes
should inform themselves about, and observe such restrictions. Any
failure to comply with the restrictions may constitute a violation
of the securities law of any such jurisdiction.
This announcement does not constitute an offer of securities for
sale in the United States or an offer to acquire or exchange
securities in the United States. No offer to acquire securities or
to exchange securities for other securities has been made, or will
be made, and no offer of securities has been made, or will be made,
directly or indirectly, in or into, or by use of the mails, any
means or instrumentality of interstate or foreign commerce or any
facilities of a national securities exchange of, the United States
of America or any other country in which such offer may not be made
other than (i) in accordance with the requirements under the US
Securities Exchange Act of 1934, as amended, a registration
statement under the US Securities Act of 1933, as amended, or the
securities laws of such other country, as the case may be, or (ii)
pursuant to an available exemption therefrom. This announcement has
been prepared for the purposes of complying with the applicable law
and regulation of the United Kingdom (including the Listing Rules
and the Disclosure and Transparency Rules) 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 and regulations of any jurisdiction outside of the United
Kingdom.
CAUTIONARY NOTE REGARDING FORWARD LOOKING INFORMATION
This announcement may include statements that are, or may be
deemed to be, "forward looking statements". These forward looking
statements may be identified by the use of forward looking
terminology, including the terms "believes", "estimates", "plans",
"projects", "anticipates", "expects", "intends", "may", "will" or
"should" or, in each case, their negative or other variations or
comparable terminology, or by discussions of strategy, plans,
objectives, goals, future events or intentions. These forward
looking statements include all matters that are not historical
facts and involve predictions. Forward looking statements may and
often do differ materially from actual results. Any forward looking
statements reflect John Menzies' and DX's current view with respect
to future events and are subject to risks relating to future events
and other risks, uncertainties and assumptions relating to John
Menzies' or DX's results of operations, financial position,
liquidity, prospects, growth or strategies and the industry in
which John Menzies and DX operate. Forward looking statements speak
only as of the date they are made and cannot be relied upon as a
guide to future performance. Save as required by law or regulation,
John Menzies and DX disclaim any obligation or undertaking to
release publicly any updates or revisions to any forward looking
statements in this announcement that may occur due to any change in
its expectations or to reflect events or circumstances after the
date of this announcement. Nothing in this announcement is
intended, or is to be construed, as a profit forecast or to be
interpreted to mean that earnings per John Menzies share for the
current or future financial years, or those of the enlarged DX,
will necessarily match or exceed the historical published earnings
per share. Certain figures contained in this announcement have been
subject to rounding adjustments. Accordingly, in certain instances,
the sum or percentage change of the numbers contained in this
announcement may not conform exactly with the total figure
given.
Neither the content of John Menzies' nor DX's website, nor any
website accessible by hyperlinks on John Menzies' or DX's website
is incorporated in, or forms part of, this announcement.
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCSDMEFSFWSEDD
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March 31, 2017 02:01 ET (06:01 GMT)
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