RNS Number:7047G
Sports & Outdoor Media Intnl PLC
6 March 2000
Part 1
Sportsworld Media Group plc ("Sportsworld" or "the Company")
SPORTSWORLD INCREASES EXPOSURE TO THE GROWING INTERNATIONAL SPORTS MARKET
Not for release, publication or distribution in or into the United States,
Canada or Japan
SPORTSWORLD MEDIA GROUP plc:
RECOMMENDED OFFER FOR SPORTS & OUTDOOR MEDIA INTERNATIONAL Plc ("SOMI") and
FULLY UNDERWRITTEN OPEN OFFER OF NEW SPORTSWORLD SHARES TO RAISE APPROXIMATELY
#28 MILLION AT 620P PER SHARE
The Offer
The boards of Sportsworld and SOMI announce that they have today reached
agreement on the terms of a recommended offer, to be made by Investec
Henderson Crosthwaite on behalf of Sportsworld, for the whole of the issued
and to be issued share capital of SOMI.
- The basic terms of the Offer will comprise 1 new Sportsworld Share for every
4.134 SOMI Shares.
On the basis of the Closing Price of 657.5p per Sportsworld Share on 3 March
2000 (being the last Dealing Day prior to the date of this announcement), the
Offer values each SOMI Share at 159p and the entire existing issued share
capital of SOMI at approximately #54 million.
- SOMI Shareholders who validly accept the Offer will be able to elect, under
the Cash Alternative, to receive 150p in cash for each SOMI Share. The Cash
Alternative values the entire existing issued share capital of SOMI at
approximately #51 million and has been fully underwritten by Investec Bank.
There will also be a Loan Note Alternative for those SOMI Shareholders
electing for the Cash Alternative.
- Sportsworld has received irrevocable undertakings to accept the Offer in
respect of 25,585,200 SOMI Shares, representing approximately 75.76 per cent.
of SOMI's existing issued share capital and a further 2,041,115 SOMI Shares
over which certain SOMI Directors have options, subject to exercise and issue.
These irrevocable undertakings will continue to be binding even if a
competing offer is made for SOMI.
- SOMI is an AIM listed company, specialising in sports stadia advertising,
sports marketing and spectacular outdoor advertising.
- Sportsworld, the sports, media and entertainment business, expects to
benefit from:
* SOMI's relationships with sport organisations internationally
* expected synergies and cost savings
* opportunities to cross-sell the expanded range of
media.
- SOMI fits Sportsworld's acquisition criteria by increasing the Sportsworld
Group's customer base and by providing opportunities to develop new revenue
streams.
- Sportsworld also announces that, in connection with the Offer, it is seeking
to raise approximately #28 million through an Open Offer of new Sportsworld
Shares at an issue price of 620p per share. The Open Offer has been fully
underwritten by Investec Bank.
Commenting on the Offer, Geoff Brown, Sportsworld's Chief Executive said:
"This acquisition is strategically important to Sportsworld at all levels of
the Group, strengthening our relationships with sports organisations
worldwide. SOMI's sports stadia business has considerable global potential,
and will provide additional platforms for growth, including a number of
opportunities for Sportsworld to create new sporting events."
Commenting on the Offer, Simon Halden, Chief Executive of SOMI
said:
"I believe that SOMI is a strong business with good prospects that will
benefit from the greater financial resources and communications and business
reach of a larger group. In view of this and the complementary nature of the
two businesses, I believe that the proposed transaction offers additional
opportunities for the growth and development of the new Enlarged Group."
This summary should be read in conjunction with the full text of the following
announcement.
Enquiries:
Sportsworld Media Group plc Tel: 020 7240 9626
Geoff Brown, Chief Executive
Andy Fletcher, Chief Financial Officer
Investec Henderson Crosthwaite Tel: 020 7597 5970
(for Sportsworld) Jagjit Mundi, Managing Director
of Corporate Finance
Financial Dynamics Tel: 020 7831 3113
(for Sportsworld)
Tim Spratt, Director or Tania Wild
Sports & Outdoor Media International Plc Tel: 020 7316 6950
Simon Halden, Chief Executive
Hawkpoint Partners Tel: 020 7665 4500
(for SOMI) Charles Williams, Director
Investec Henderson Crosthwaite, a division of Investec Bank, which is
regulated in the United Kingdom by The Securities and Futures Authority
Limited, is acting for Sportsworld in relation to the Proposals and is not
acting for any other person and will not be responsible to any other person
for providing the protections afforded to customers of Investec Henderson
Crosthwaite or for advising any other person in connection with the Proposals.
Hawkpoint Partners Limited, which is regulated in the United Kingdom by The
Securities and Futures Authority Limited, is acting for SOMI in relation to
the Offer and is not acting for any other person and will not be responsible
to any other person for providing the protections afforded to customers of
Hawkpoint Partners Limited or for advising any other person in connection with
the Offer.
The Offer is not being made directly or indirectly in or into, or by use of
the mails of, or by means or instrumentality of interstate or foreign commerce
of, or any facilities of a national securities exchange of, the United States,
Canada or Japan. This includes, but is not limited to, facsimile
transmission, telex, email or telephone. Accordingly, copies of this
announcement and any related offering documents are not being, and must not
be, mailed or otherwise distributed in or into the United States, Canada or
Japan and so doing may invalidate any purported acceptance.
SPORTSWORLD MEDIA GROUP plc:
RECOMMENDED OFFER FOR SPORTS & OUTDOOR MEDIA INTERNATIONAL Plc
and
FULLY UNDERWRITTEN OPEN OFFER OF NEW SPORTSWORLD SHARES TO RAISE
APPROXIMATELY #28 MILLION AT 620P PER SHARE
Introduction
The boards of Sportsworld and SOMI announce that agreement has been reached on
the terms of a recommended offer to be made by Investec Henderson Crosthwaite,
on behalf of Sportsworld, to acquire the whole of the issued and to be issued
share capital of SOMI.
Sportsworld also announces that, in conjunction with the Offer, it is seeking
to raise up to approximately #52 million to fund the Cash Alternative and
approximately #28 million through an Open Offer of new Sportsworld Shares at
an issue price of 620p per share. The Cash Alternative and the Open Offer
have been fully underwritten by Investec Bank.
Appendix II contains definitions of terms used in this announcement.
The Offer
The Offer, which will be subject to the conditions and further terms set out
below and in Appendix I and to be set out or referred to in the Offer Document
and the Form of Acceptance, will be made on the following basis:
1 new Sportsworld Share for every 4.134 SOMI Shares
and so in proportion for any other number of SOMI Shares held.
On the basis of the Closing Price of 657.5p per Sportsworld Share on 3 March
2000 (being the last Dealing Day prior to the date of this announcement), the
Offer values each SOMI Share at 159p and, on the basis of 33,770,779 SOMI
Shares in issue, values the whole of the existing issued share capital of SOMI
at approximately #54 million.
The Offer represents a premium of approximately 79.7 per cent. to the Closing
Price of 88.5p per SOMI Share on 21 January 2000 (being the last Dealing Day
prior to the day on which SOMI announced that it had received a preliminary
approach which could lead to an offer being made for SOMI).
The new Sportsworld Shares to be issued pursuant to the Offer will be issued
free from all liens and encumbrances and credited as fully paid and will rank
pari passu in all respects with the existing issued Sportsworld Shares,
including the right to receive all dividends declared, made or paid after the
date hereof.
Fractions of new Sportsworld Shares will not be allotted or issued to
accepting SOMI Shareholders. Fractional entitlements to new Sportsworld
Shares will be aggregated and sold in the market and the net cash proceeds of
the sale will be retained for the benefit of the Enlarged Group.
The maximum possible number of new Sportsworld Shares (assuming full exercise
of options outstanding under the SOMI Share Option Scheme and that commitments
to issue further SOMI Shares are triggered by the Offer becoming wholly
unconditional) which could be issued in relation to the Offer is 8,753,285 new
Sportsworld Shares, representing approximately 13 per cent. of the issued
share capital of Sportsworld as enlarged by the Proposals. Application will
be made for the new Sportsworld Shares to be admitted to the Official List.
The SOMI Shares will be acquired by Sportsworld fully paid and free from all
liens, equitable interests, charges, encumbrances and other interests and
together with all rights now or hereafter attaching thereto, including the
right to receive and retain all dividends and other distributions declared,
made or paid on or after the date hereof.
The Offer will be conditional, inter alia, upon the passing by Sportsworld
Shareholders of a resolution, inter alia, to approve the acquisition of SOMI
and the issue of the new Sportsworld Shares.
The Cash Alternative
As an alternative to receiving new Sportsworld Shares, SOMI Shareholders may
elect to receive cash in respect of all or part of their holding of SOMI
Shares on the following basis:
for each SOMI Share 150p in cash
and so in proportion for any greater number of SOMI Shares held.
The Cash Alternative will be conditional upon the Offer becoming or being
declared unconditional in all respects and will remain open until the first
closing date of the Offer, when it will close unless Sportsworld and Investec
Henderson Crosthwaite agree to extend it.
The Cash Alternative represents a premium of approximately 69.5 per cent to
the Closing Price of a SOMI Share of 88.5p on 21 January 2000 (being the last
Dealing Day prior to the day on which SOMI announced it had received a
preliminary approach which could lead to an offer being made for SOMI).
The Cash Alternative values the whole of the existing issued ordinary share
capital of SOMI at approximately #51 million. The Cash Alternative has been
fully underwritten by Investec Bank.
Further details of the Cash Alternative will be included in the Offer
Document.
The Loan Note Alternative
As an alternative to all or part of the cash consideration to which they would
otherwise be entitled under the Cash Alternative, SOMI Shareholders (other
than certain overseas shareholders) who accept the Offer and validly elect for
the Loan Note Alternative may elect to receive Loan Notes which will be issued
on the following basis:
for every 100p of cash 100p nominal of Loan Notes
The Loan Notes will be issued, credited as fully paid, in amounts and integral
multiples of 100p nominal value (subject to a minimum of #10,000 nominal value
per SOMI Shareholder) and any fractional entitlements will be disregarded and
will not be allotted. The Loan Notes will be unsecured but will be guaranteed
as to principal and interest by NatWest Bank and will bear interest, payable
in arrears, up to and including the date of payment (less any applicable tax)
in half-yearly instalments, at a rate equal to 0.77 per cent. per annum below
six month LIBOR on sterling deposits. The first interest payment will be in
respect of the period commencing on the date falling 14 days after the date
upon which the Offer becomes or is declared wholly unconditional up to (and
including) 30 June 2000. No application will be made for the Loan Notes to be
listed on any recognised investment exchange.
Holders of Loan Notes will have the option to redeem all or any part (being
#100 in nominal value or any integral multiple thereof) of their Loan Notes,
commencing on the date falling 12 months after the date of issue and
thereafter at half yearly intervals on the interest payment dates. On 31
December 2007, all outstanding Loan Notes will be redeemed. In the event that
the nominal value of Loan Notes outstanding at any time prior to 31 December
2007 is #100,000 or less, Sportsworld will have the right to redeem all
outstanding Loan Notes.
The Loan Note Alternative will be conditional upon the Offer becoming or being
declared unconditional in all respects and will remain open for so long as the
Cash Alternative remains open for acceptance. No Loan Notes will be issued
unless, by the time the Offer becomes or is declared wholly unconditional,
valid elections from accepting SOMI Shareholders have been received for at
least #100,000 in nominal value of Loan Notes (or such lesser value as the
Sportsworld Board may determine). If insufficient elections are received,
SOMI Shareholders who validly elect for the Loan Note Alternative will instead
receive cash in accordance with the terms of the Cash Alternative.
Further details of the Loan Note Alternative will be included in the Offer
Document.
Irrevocable Undertakings to accept the Offer
As set out below, Sportsworld has received undertakings to accept the Offer in
respect of, in aggregate, 25,585,200 SOMI Shares, representing approximately
75.76 per cent. of SOMI's existing issued share capital.
Sportsworld has received an irrevocable undertaking to accept the Offer from
SOMI's majority shareholder, Sporting Frontiers, in respect of 21,666,000 SOMI
Shares, representing approximately 64.16 per cent. of SOMI's existing issued
share capital. Sporting Frontiers is a subsidiary of Pacific Investments,
which is ultimately controlled by John Beckwith, a director of SOMI. Sporting
Frontiers has also irrevocably undertaken to elect for the Loan Note
Alternative in respect of all the SOMI Shares held by it. Subject to the
Offer becoming unconditional in all respects and to the receipt of certain
consents, Pacific Investments has agreed to accept repayment by SOMI of all
loans outstanding between Pacific Investments and SOMI.
In addition, those SOMI Directors who hold SOMI Shares (other than John
Beckwith, who is beneficially interested in the shares held by Sporting
Frontiers referred to above), have irrevocably undertaken to accept, or
procure the acceptance of, the Offer in respect of 3,919,200 SOMI Shares,
representing in aggregate approximately 11.6 per cent. of SOMI's existing
issued share capital. The aforementioned directors have irrevocably
undertaken to accept the Cash Alternative in respect of 2,461,920 SOMI Shares.
They have also irrevocably undertaken, subject to certain exceptions, during
the year immediately following the date on which the Offer becomes
unconditional in all respects, not to sell, transfer, encumber, grant any
option over or otherwise dispose or agree to dispose of any of the new
Sportsworld Shares which may be acquired by them under the Offer and following
the expiry of the one year period only to dispose of such new Sportsworld
Shares in consultation with Sportsworld's brokers with a view to maintaining
an orderly market. In addition, Graeme Boyer and John Dollisson have
irrevocably undertaken to accept the Offer in respect of 2,041,115 SOMI Shares
over which they have options, subject to exercise and issue.
The irrevocable undertakings referred to above will continue to be binding
even if a competing offer is made for SOMI and will cease to be binding only
if the Offer lapses or is withdrawn or if the Offer is not made, other than in
certain circumstances, within 5 business days of the date of this
announcement.
Recommendation
The SOMI Directors, who have been so advised by Hawkpoint Partners, consider
the terms of the Offer to be fair and reasonable so far as the SOMI
Shareholders are concerned. In providing advice to the SOMI Directors,
Hawkpoint Partners has taken into account the commercial assessments of the
SOMI Directors.
Accordingly, the SOMI Directors will unanimously recommend SOMI Shareholders
to accept the Offer, as those of the SOMI Directors who hold SOMI Shares have
irrevocably undertaken to do (other than John Beckwith, who is beneficially
interested in the SOMI Shares in respect of which an irrevocable undertaking
has been given by Sporting Frontiers as referred to above) in respect of their
entire beneficial shareholdings amounting to 3,919,200 SOMI Shares,
representing 11.6 per cent. of the existing issued share capital of SOMI.
Information on SOMI
SOMI was formed in May 1998 from three businesses, Sports & Outdoor Media
Limited and International Sports Group Limited in the UK and the Boyer group
of companies in Australia and its shares were admitted to trading on AIM in
June 1998. In December 1998, SOMI acquired 75 per cent. of Pimington Pty
Limited and 50 per cent. of Boyd Corporation Pty Limited. SOMI now operates
through three divisions, Sports Stadia Advertising, Sports Marketing and
Consultancy and Spectacular Outdoor Advertising in the United Kingdom, Spain
and Australia.
In Australia SOMI has rights to outdoor advertising sites which include Sydney
Airport and the main access roads to the Stadium Australia, the host stadium
for the 2000 Olympic games. SOMI is also working closely with the "Urban
Domain Project" in advance of the Sydney Olympics, scheduled to take place in
September 2000.
Sports Stadia Advertising
SOMI is an advertising agent for rights holders at individual or national
networks of sports grounds in the UK and Australia. SOMI markets and sells
advertising space (other than that sold as part of sponsorship packages or
stadia hiring arrangements) on perimeter signs and also on balcony signs
around the playing arena, giant video screens in sports grounds and concourse
sites at some stadia.
As well as marketing and selling advertising opportunities to advertisers, the
SOMI Group provides account handling and administration services and manages
the production, maintenance, placing and presentation of signs by
sub-contractors. In Australia, SOMI has experience in operating and
maintaining the score boards at sports grounds and the giant video screens at
the Melbourne Cricket Ground.
The SOMI Group has sold perimeter space at sports grounds to major advertisers
such as British Airways, Yellow Pages, Ricoh UK and Friends Provident in the
UK and Foster's, Telstra, Mitsubishi and Coca-Cola in Australia.
- UK
In the UK, SOMI is the official ground perimeter advertising agent for the
England Cricket Board, and official perimeter agency for six cricket Test
Match grounds (Lords, the Foster's Oval, Old Trafford, Edgbaston, Headingley
and Trent Bridge) and through the auspices of the England Cricket Board for
twelve county cricket grounds. Additionally, SOMI holds advertising rights at
a number of FA Premier League football club grounds, including those of
Everton, Sheffield Wednesday and Southampton.
SOMI was the official stadium perimeter advertising agent for the Welsh Rugby
Union at Wembley and, since June 1998, has acted in such capacity for the
Scottish Rugby Union at Murrayfield. SOMI also buys stadia perimeter
advertising in the UK on behalf of advertisers.
- Australia
In Australia, SOMI has sole and exclusive advertising rights at Melbourne
Cricket Ground, Sydney Cricket Ground and (excluding Aussie Rules) Brisbane
Cricket Ground. SOMI sells advertising at three other cricket grounds, the
Western Australia Cricket Association ground in Perth, the Adelaide Oval in
Adelaide, South Australia and the Bellerive Oval in Hobart, Tasmania, and
sells signage at other major stadia for events involving Aussie Rules and
occasionally rugby union, rugby league and soccer. The Boyer group of
companies, which form part of the SOMI Group, is also a stadia advertising
agent for the Australian Cricket Board.
Additionally, SOMI has rights to arrange advertising and sponsorship at the
Colonial Docklands Stadium in Melbourne and Stadium Australia in Sydney.
Spectacular Outdoor Advertising
The SOMI Group develops, markets, sells and services outdoor spectacular sites
at roadsides in major city locations and at airports in Australia. SOMI
incurs the cost of building some of these sites itself.
In particular, SOMI has marketing rights to landmark outdoor advertising sites
at Sydney and Brisbane International Airports (where SOMI also operates the
internal advertising airport signage rights) and on the main access roads to
Stadium Australia. Advertising space is sold at other sites to major national
and multinational companies, including Panasonic, Samsung, Hitachi, Philips,
Citibank and American Express.
SOMI is also involved in the roll-out of development programmes under its
contract with Railway Access Corporation, at the Gold Coast Airport and along
the M4 Motorway in Sydney.
Sports Marketing Consultancy and other activities
In the UK, SOMI's clients include rights holders such as the Marylebone
Cricket Club and the Football Association ("FA") where SOMI has been appointed
as commercial consultant to assist the FA in its commitments in the AXA FA Cup
and advertisers such as Allied Domecq and Scoot. SOMI is also involved in the
creation and implementation of a new football marketing concept on behalf of
FA Premier League clubs.
Additionally, the SOMI Group has a sponsorship arrangement in the UK for
Yellow Pages with London Underground as exclusive sponsors of certain items,
including tube maps and travel wallets.
Sports Marketing and Consultancy
SOMI has formed a new sports marketing company, International Sports Group
Australia ("ISG"). Following ISG's inception, SOMI has been appointed by the
Olympic Co-ordination Authority in Sydney to secure sponsorship of
entertainment opportunities in the sports and media areas through the "Urban
Domain Project". ISG has already secured its first sponsorship signing for
this project with Energy Australia.
- Spain
SOMI's sports marketing division has successfully concluded its first
transaction in the Spanish sports sector, securing Burger King as an official
sponsor for the National Basketball League.
Financial Information
For the six months ended 30 September 1999, SOMI reported (unaudited) profit
before taxation of #671,000 on turnover of #11.01 million. (Unaudited)
earnings per share (basic) were 0.04p and (unaudited) net assets were #12.5
million.
Information on Sportsworld
Sportsworld is listed on the Official List and currently has a market
capitalisation of approximately #356 million (based on the Closing Price of
657.5p per share on 3 March 2000, being the last Dealing Day prior to the date
of this announcement). Sportsworld is a sports, media and entertainment
business that operates principally in the following areas: the production of
sports programmes for distribution to television networks around the world;
sports event management; and the arrangement of major sports sponsorship.
It is the Sportsworld Directors' strategy to build a global sports, media and
entertainment business both organically and, where appropriate, by
acquisition.
Sportsworld's core business is the supply of sports magazine programming to
multi-channel and terrestrial broadcasters globally from Sportsworld's
low-cost production base in Australia and the leverage of events management
income and sponsorship from TV rights. Sportsworld recognises and exploits
the importance of a new matrix of relationships, involving broadcasters,
global advertisers, global advertising agencies, global media buying groups,
telecoms companies, internet providers, gaming and merchandising partners, and
the continuing and growing importance of sport within this matrix.
Sportsworld has an international client base with customers and relationships
with sponsors and advertisers in the Middle East, Latin America, US, Canada,
Europe, Asia and Australia. Major European customers include BSkyB, Channel
5, Granada and Eurosport.
A targeted acquisition programme during 1999 has resulted in the acquisition
by Sportsworld of a number of businesses which the Sportsworld Directors
believe have significantly advanced the strategy of the Sportsworld Group and
which are integrating well into the Sportsworld Group.
In May 1999, Sportsworld acquired 51 per cent. of Stuart Sawyer (Marketing)
Limited ("SSM"), a sports marketing, programme production and management
company which has provided the Sportsworld Group with strong connections with
freesports and extreme sports, a group of non-mainstream sports which includes
windsurfing, mountain biking, snowboarding, surfing, in-line skating and
triathlon and which attract the target audiences of many broadcasters,
sponsors and advertisers. Sportsworld has agreed outline terms to acquire the
remaining 49 per cent. of SSM not already owned by Sportsworld for an initial
consideration of approximately #1.8 million, which is to be satisfied as to
#750,000 in cash and as to the balance by the issue (valued for these purposes
at the Issue Price) of new ordinary shares of 1p each in Sportsworld on
completion. Deferred consideration on the same basis as that for the initial
51 per cent. may also become payable. The acquisition of the remaining 49 per
cent. will require the approval of Sportsworld Shareholders, which will be
sought at an extraordinary general meeting of Sportsworld following the entry
into an acquisition agreement which is expected to take place shortly.
In December 1999, Sportsworld acquired the entire issued share capital of
Australian Media Holdings Limited ("AMH") for approximately #22.4 million. AMH
is a diverse media group headquartered in Sydney, Australia and which also
represents clients based in the Asia Pacific Rim. The businesses of AMH
include television programme creation and co-production, licensing and
merchandising, television, cable and print media sales and event management.
Additionally, Sportsworld has an internet presence, through its subsidiary,
Netsports Limited ("Netsports"), which the Sportsworld Directors believe will
enable Sportsworld to explore sports internet opportunities. Netsports owns
the Dream League Football fantasy sport brand and was the exclusive fantasy
football partner to Euro 96 and France 98. It has recently signed an
exclusive contract with ISL on behalf of FIFA to act as the fantasy football
partner for Euro 2000.
Reasons for the Offer
In view of the current state of the development of Sportsworld, in particular
the development of Sportsworld's reputation and relationships with
broadcasters, advertisers, advertising agencies, sponsors and media buying
agencies, the development of the event management business and internet
opportunities and the recent acquisition of AMH in Australia, the Sportsworld
Board believes that there is a significant opportunity for Sportsworld to add
value to the existing businesses of the SOMI Group through the leverage
provided by the wider Sportsworld Group relationships and operations. In
particular, the Sportsworld Directors believe that:
- SOMI's stadia advertising business would complement the existing sports
media properties of Sportsworld and can be enhanced by Sportsworld's ability
to generate additional revenues from its existing relationships and contacts
with broadcasters, sponsors, advertisers and event organisers;
- value can be added by Sportsworld to SOMI's sports consultancy business as
a result of the greater opportunities and products available within the
Sportsworld Group;
- SOMI's outdoor advertising properties in Australia are suited to the
existing business and profile of AMH, which should afford considerable
opportunities to cross-sell the expanded range of media available as part of
the Sportsworld Group;
- there are synergies and cost savings to be obtained by a merger of the
businesses of the SOMI Group and AMH; and
- the talented management of SOMI will be able to concentrate their time and
energies more effectively on developing the core business of SOMI as part of a
wider listed company.
SOMI management and employees
The Sportsworld Board attaches considerable importance to the skills and
experience of the current management and employees of SOMI. Sportsworld has
undertaken to safeguard fully the existing employment rights, including
pension rights (if any), of the management and employees of the SOMI Group.
The non-executive directors of SOMI, namely John Beckwith, Mark Johnson and
Roderick McGeoch, have each confirmed that they intend to resign from the
board of SOMI upon the Offer becoming or being declared unconditional in all
respects.
SOMI Share Option Scheme
The Offer will extend to any SOMI Shares issued or unconditionally allotted
while the Offer remains open for acceptance (or prior to such earlier date as
Sportsworld may, subject to the Code, determine) including those issued or
allotted as a result of the exercise of options granted under the SOMI Share
Option Scheme. To the extent that options have not been exercised,
appropriate proposals will be made to option holders, which will be
conditional on the Offer becoming or being declared unconditional in all
respects.
Inducement Fees
Sportsworld and SOMI have entered into an agreement dated 9 February 2000 (the
"Inducement Fee Agreement") pursuant to which SOMI agreed to pay Sportsworld
#500,000 in cash if, whilst Sportsworld was proceeding in good faith to reach
a position at which it would be able to make a formal offer for SOMI: (i) an
offer was made for SOMI by a third party which subsequently became or was
declared wholly unconditional; or (ii) Pacific Investments indicated it would
not accept the Offer or would not execute an irrevocable undertaking to accept
the Offer. SOMI has also agreed to pay the aforementioned sum if the board of
SOMI indicates it is no longer in a position to recommend the Offer or the
terms of the recommendation of the Offer are adversely modified.
Pursuant to the Inducement Fee Agreement, Sportsworld has agreed to pay to
SOMI #250,000 if it fails to obtain shareholder approval and regulatory
consents for the implementation of the Offer.
Details of the Placing and Open Offer
At the same time as making the Offer, the Company is proposing to raise
approximately #28 million gross (approximately #23.5 million net of expenses)
through a Placing and Open Offer which has been fully underwritten by Investec
Bank.
Under the Open Offer, Qualifying Shareholders will be invited by Investec
Henderson Crosthwaite to subscribe for in aggregate 4,511,037 new Sportsworld
Shares at a price of 620p per share on the basis of:
1 new Sportsworld Share for every 12 existing Sportsworld Shares
held on the Record Date, and so in proportion for any greater or smaller
number of existing Sportsworld Shares then held. Entitlements to new
Sportsworld Shares under the Open Offer will be rounded down to the nearest
whole Sportsworld Share. Fractional entitlements will not be allotted but
will be aggregated and placed for the benefit of the Company.
All of the new Sportsworld Shares the subject of the Open Offer have been
placed by Investec Henderson Crosthwaite with institutional shareholders
subject to clawback (save for those shares in respect of which irrevocable
undertakings not to take up entitlements have been received, as described
below) to satisfy valid applications from Qualifying Shareholders.
Irrevocable undertakings not to take up their entitlement under the Open Offer
have been received from the trustees of trusts of which Jeff Chapman and Geoff
Brown are beneficiaries in respect of, in aggregate, 20,155,633 existing
Sportsworld Shares, representing approximately 36.9 per cent. of the existing
Sportsworld Shares. The entitlements arising from these shares being, in
aggregate 1,679,635 new Sportsworld Shares, have been placed firm by Investec
Henderson Crosthwaite, as agent for the Company.
In addition to the new Sportsworld Shares to be allotted pursuant to the Open
Offer, and in order to provide financing for the Cash Alternative, Investec
Henderson Crosthwaite has procured placees for all of the new Sportsworld
Shares which may be allotted under the Offer at 620p per new Sportsworld
Share. To the extent that SOMI Shareholders elect to receive cash in respect
of all or part of their holdings of SOMI Shares, the new Sportsworld Shares to
which they would otherwise have been entitled will be allotted to placees and
a corresponding payment will be made to such SOMI Shareholders.
The new Sportsworld Shares to be allotted pursuant to the Placing and Open
Offer will be issued credited as fully paid and will rank pari passu in all
respects with the existing Sportsworld Shares.
The net proceeds of the Placing and Open Offer will be used to repay the
indebtedness of SOMI as well as meeting the costs of compulsorily acquiring
any SOMI Shares pursuant to sections 428 to 430F of the Act and the costs of
making the Offer. The balance will be placed on deposit by the Company until
required.
Investec Henderson Crosthwaite has agreed to place 3,000,000 Sportsworld
Shares at the Issue Price on behalf of the trustees of a trust of which Jeff
Chapman is a beneficiary, in order to satisfy in part institutional demand for
Sportsworld Shares. This trust will retain 15,313,347 Sportsworld Shares
which will represent 22.8 per cent. of the issued share capital of the Company
as enlarged by the Proposals. This placing is conditional on the Proposals
being implemented.
Qualifying Shareholders should be aware that under the Open Offer, unlike a
rights issue, the new Sportsworld Shares not applied for will not be sold in
the market for the benefit of Qualifying Shareholders who do not apply for
their entitlement to such shares under the Open Offer, but will instead be
placed pursuant to the Placing.
The Placing and Open Offer will be conditional, inter alia, on the Offer
becoming or being declared unconditional in all respects (subject only to
Admission).
The timetable for the Open Offer will be announced in due course.
General
The Offer and the Placing and Open Offer will comply with the relevant rules
and regulations of the London Stock Exchange and the Code. Application will
be made for the new Sportsworld Shares to be allotted pursuant to the
proposals to be admitted to the Official List.
If the Offer becomes or is declared unconditional in all respects then,
irrespective of the level of acceptances, and whether or not Sportsworld is in
a position to apply the provisions of sections 428 to 430F of the Act to
acquire compulsorily the remaining SOMI Shares, Sportsworld intends to procure
that SOMI applies to the London Stock Exchange for SOMI Shares to cease to be
traded on AIM and will seek to re-register SOMI as a private company.
The procedure for acceptance of the Offer will be set out in the Offer
Document which is expected to be posted to SOMI Shareholders shortly, together
with the Prospectus and the Form of Acceptance.
To the best of Sportsworld's knowledge and belief, neither Sportsworld nor any
Sportsworld Director, nor any person acting (or deemed to be acting) in
concert with Sportsworld, owns or controls any SOMI Shares or any options to
acquire SOMI Shares or holds any derivatives referenced to SOMI. For reasons
of confidentiality, Sportsworld has not made any enquiries in this respect of
certain parties who may be deemed by the Panel to be acting in concert with
Sportsworld for the purposes of the Offer.
The availability of the Offer to SOMI Shareholders not resident in the United
Kingdom may be affected by the laws of the relevant jurisdiction. SOMI
Shareholders who are not resident in the United Kingdom should inform
themselves about and observe any applicable requirements.
The Offer will not be made, directly or indirectly, in or into, or by the use
of the mails of, or by any means of instrumentality (including, without
limitation, facsimile transmission, telex or telephone) of interstate or
foreign commerce of, or of any facility of a national securities exchange of,
the United States, nor is it being made directly or indirectly in or into
Canada or Japan. Accordingly, neither copies of this announcement nor any
related offering documents are being or may be mailed or otherwise forwarded,
distributed or sent in, into or from the United States, Canada or Japan.
The new Sportsworld Shares and the Loan Notes which may be issued pursuant to
the Offer have not been and will not be registered under Securities Act or
under the relevant securities laws or any state or other jurisdiction of the
United States, Canada or Japan. Accordingly, the new Sportsworld Shares and
the Loan Notes may not (unless an exemption from the Securities Act or such
other laws is available) be offered, sold or resold or delivered, directly or
indirectly, in or into the United States, Canada or Japan or any other
jurisdiction where this would constitute a violation of the relevant laws of,
or require registration thereof, in such jurisdiction or to, or for the
account or benefit of, any North American person or a person in or resident of
Japan.
The Sportsworld Directors accept responsibility for the information contained
in this announcement, other than that relating to the SOMI Group, the SOMI
Directors, members of their immediate families, related trusts and persons
connected with them. To the best of the knowledge and belief of the
Sportsworld Directors (who have taken all reasonable care to ensure that such
is the case) such information contained in this announcement is in accordance
with the facts and does not omit anything likely to affect the import of such
information.
The SOMI Directors accept responsibility for the information contained in this
announcement which relates to the SOMI Group, the SOMI Directors, members of
their immediate families, related trusts and persons connected with them. To
the best of the knowledge and belief of the SOMI Directors (who have taken all
reasonable care to ensure that such is the case) such information contained in
this announcement is in accordance with the facts and does not omit anything
likely to affect the import of such information.
This announcement does not constitute an offer or an invitation to purchase
any securities.
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