RNS Number:6734T
Taylor Woodrow PLC
26 March 2007
Not for release, publication, or distribution in or into Canada, Australia, or
Japan
26 March 2007
PROPOSED MERGER OF TAYLOR WOODROW AND GEORGE WIMPEY TO CREATE
TAYLOR WIMPEY,
THE LARGEST UK HOUSEBUILDER
The Boards of Taylor Woodrow plc ("Taylor Woodrow") and George Wimpey Plc
("George Wimpey") are pleased to announce today that they have reached agreement
on the terms of a recommended all-share merger (the "Merger") to create Taylor
Wimpey plc ("Taylor Wimpey"). Taylor Wimpey will be the UK's largest
housebuilding group with combined pro forma annual revenues of over #6.7
billion, total UK house completions of approximately 22,000 per annum, total
North American house completions of approximately 9,000 per annum and a combined
market capitalisation of approximately #5 billion.
Summary
The Merger will enhance shareholder value by creating a business with a strong
strategic position in both the UK and the chosen markets in North America. The
Combined Group has a pro forma landbank of over 92,000 plots in the UK and will
be strengthened in the US through the combination of operations across some of
the most attractive US markets. In addition, shareholders of the Combined Group
will also benefit from enhanced profitability through the delivery of
significant cost savings.
The Combined Group is expected to benefit from:
Margin growth in the UK, driven by:
* The cost efficiency and business structure of the George Wimpey
business
* The strategic land development skills of the Taylor Woodrow business
* Reducing the dependence on a high sales rate
Economies of scale in the UK:
* Opportunity for improved procurement terms and the ability to drive
further savings from the supply chain
* Overhead efficiency, created by a larger business with a lean UK
housing head office and decentralised structure
* An improved ability to take through the planning process and develop
significant parcels of land, enhancing the value created
Growth in the North American housing market through:
* Enhanced strength in key states, notably Florida, California, Arizona,
and Texas, where both groups have highly complementary operations
* A broader offering to the market through the Taylor Woodrow brand, and
the mid-market through George Wimpey's Morrison Homes brand
* The strength of a significant combined land developer and
housebuilder, with pro forma North American completions of approximately 9,000
per annum
* Greater ability to deploy capital from a strong balance sheet, as
market conditions permit
Synergies of at least #70 million per annum:
* The Combined Group will focus on driving out costs from the combined
operations. This is expected to lead to at least #70 million of pre-tax
synergies by the end of the first full financial year following the Effective
Date, at a one-off cost of approximately #60 million, the majority of which will
be incurred in the current financial year
* These synergies are in addition to previously announced cost savings
of #25 million in George Wimpey's UK business, and combined savings in excess of
US$20 million in the US in 2007
The Combined Group will benefit from a strong balance sheet, which will enable
it to drive growth in both the UK and the US. It is expected that following the
Merger, and consistent with the enhanced growth profile, the Combined Group will
follow a progressive dividend policy which balances returns to shareholders with
the need to retain sufficient funds to drive growth.
Governance and management
The Boards of Taylor Woodrow and George Wimpey have agreed a unified management
team under the leadership of Peter Redfern as Chief Executive. Reporting to
Peter Redfern will be Peter Johnson as Finance Director, Ian Sutcliffe as UK
CEO, and John Landrum as North American President. This executive team will sit
on the Board, which will be chaired by Norman Askew with equal non-executive
director representation from Taylor Woodrow and George Wimpey. David Williams
will be the Senior Independent Director, and the Non-Executive Directors will be
Mike Davies, Brenda Dean, Andrew Dougal, Katherine Innes Ker and Anthony
Reading.
Merger terms
The Exchange Ratio shall be calculated on the basis of the issued share capital
of Taylor Woodrow immediately prior to the posting of the Scheme Document so as
to provide George Wimpey Shareholders (on a fully diluted basis) with such
number of New Taylor Woodrow Shares as would result in Taylor Woodrow
Shareholders holding 51 per cent., and George Wimpey Shareholders (on a fully
diluted basis) holding 49 per cent., of the issued share capital of Taylor
Wimpey.
In addition, those Taylor Woodrow Shareholders who are on the register of Taylor
Woodrow Shareholders as at close of business on 25 May 2007 will be entitled to
receive and retain the Taylor Woodrow final dividend of 9.75 pence per Taylor
Woodrow Share in respect of the year ended 31 December 2006, payable on 2 July
2007. Similarly, those George Wimpey Shareholders who were on the register of
George Wimpey Shareholders as at close of business on 2 March 2007 will be
entitled to receive and retain the George Wimpey final dividend of 13.10 pence
per George Wimpey Share in respect of the year ended 31 December 2006, payable
on 11 May 2007. The final George Wimpey and Taylor Woodrow dividends for the
year ended 31 December 2006 are subject to usual shareholder approval at their
respective Annual General Meetings.
The Merger is subject to the conditions and terms set out in the attached
announcement, and to be included in the Scheme Document, including, inter alia,
the sanction of the Court and the approval of the shareholders of both Taylor
Woodrow and George Wimpey. The Merger is expected to complete in the summer of
2007.
The Merger is expected to be earnings enhancing for both Taylor Woodrow
Shareholders and George Wimpey Shareholders in the first full financial year
following the Effective Date, including synergies, excluding one-off costs.(1)
Commenting on the Merger, Norman Askew, Chairman of Taylor Woodrow, said: "This
Merger provides both businesses with a unique opportunity to combine their
respective strengths to create the largest UK housebuilder with a much improved
position in the US, taking advantage of its medium and long term growth
prospects.
With Peter Redfern and the rest of the management team, John and I believe we
have the balance of skills and commitment to drive growth and deliver enhanced
value to shareholders. It is the intention to execute our integration plan as
soon as practically possible in order to minimise disruption and add maximum
value to the businesses and operations of the Combined Group."
Commenting on the Merger, John Robinson, Chairman of George Wimpey, said: "The
Board of George Wimpey believes that the combination with Taylor Woodrow
presents exciting opportunities to our shareholders and employees alike, and we
unanimously recommend it to all our stakeholders.
In addition, Norman and I would like to take this opportunity to thank all of
Taylor Woodrow's and George Wimpey's employees for their valuable contribution
to the businesses over the years. We would also like to thank Ian Smith for the
significant part he has played in creating this exciting new company. I believe
that going forward the Merger will create excellent opportunities for employees
at all levels within the Combined Group."
This summary should be read in conjunction with the main body of the
announcement.
There will be a presentation to investors and analysts at 9:30 a.m. on Monday 26
March 2007 at JP Morgan Cazenove, 20 Moorgate, London EC2R 6DA.
UBS Investment Bank is acting as lead financial adviser and joint-broker to
Taylor Woodrow. Morgan Stanley is acting as joint financial adviser and
joint-broker to Taylor Woodrow.
JPMorgan Cazenove is acting as sole financial adviser and joint-broker to George
Wimpey. Hoare Govett is acting as joint-broker to George Wimpey.
Note:
(1) Nothing in this announcement should be interpreted to mean that the future
earnings per share of Taylor Wimpey will necessarily match or exceed the
historical earnings per share of Taylor Woodrow or George Wimpey.
Enquiries:
Taylor Woodrow plc George Wimpey Plc
Tel: +44 121 600 8520 Tel: +44 20 7963 6352
Ian Smith Peter Redfern
Peter Johnson Andrew Carr-Locke
UBS Investment Bank JPMorgan Cazenove
(lead financial adviser and joint-broker to Taylor (sole financial adviser and joint-broker to George
Woodrow) Wimpey)
Tel: +44 20 7568 1000 Tel: +44 20 7588 2828
Aidan Clegg Mark Breuer
Bill Hutchings Richard Cotton
James Robertson Andrew Truscott
Morgan Stanley Hoare Govett
(joint financial adviser and joint-broker to Taylor (joint-broker to George Wimpey)
Woodrow)
Tel: +44 20 7425 8000 Tel: +44 20 7678 8000
Gavin MacDonald Antonia Rowan
Jean-Eudes Renier Luke Simpson
Peter Moorhouse
Finsbury The Maitland Company
(PR adviser to Taylor Woodrow) (PR adviser to George Wimpey)
Tel: +44 20 7251 3801 Tel: +44 20 7379 5151
James Murgatroyd Liz Morley
This summary should be read in conjunction with the full text of the following
announcement and the Appendices. The conditions to and certain further terms of
the Merger are set out in Appendix 1. The bases and sources of certain financial
information contained in this announcement are set out in Appendix 2. Certain
definitions and terms used in this announcement are set out in Appendix 3.
UBS is acting as lead financial adviser and joint-broker to Taylor Woodrow, and
no one else in connection with the Merger and will not be responsible to anyone
other than Taylor Woodrow for providing the protections afforded to the clients
of UBS nor for providing advice in relation to the Merger or any other matter
referred to herein.
Morgan Stanley is acting as joint financial adviser and joint-broker to Taylor
Woodrow in respect of the Merger, and no one else in connection with the Merger
and will not be responsible to anyone other than Taylor Woodrow for providing
the protections afforded to the clients of Morgan Stanley nor for providing
advice in relation to the Merger or any other matter referred to herein.
JPMorgan Cazenove is acting as sole financial adviser and joint-broker to George
Wimpey in connection with the Merger and will not be responsible to anyone other
than George Wimpey for providing the protections afforded to the clients of
JPMorgan Cazenove nor for providing advice in relation to the Merger or any
other matter referred to herein.
Hoare Govett is acting as joint-broker to George Wimpey, and no one else in
connection with the Merger and will not be responsible to anyone other than
George Wimpey for providing the protections afforded to the clients of Hoare
Govett nor for providing advice in relation to the Merger or any other matter
referred to herein.
Overseas jurisdictions
The release, publication or distribution of this announcement in jurisdictions
other than the United Kingdom may be restricted by law and therefore any persons
who are subject to the laws of any jurisdiction other than the United Kingdom
should inform themselves about, and observe, any applicable requirements. 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 and regulations of any jurisdiction outside of England.
This announcement is not intended to, and does not constitute, or form part of,
an offer to sell or an invitation to purchase or subscribe for any securities or
a solicitation of any vote or approval in any jurisdiction. This announcement
does not constitute a prospectus or a prospectus equivalent document.
Shareholders of Taylor Woodrow and George Wimpey are advised to read carefully
the formal documentation in relation to the Merger once it has been despatched.
The proposals of the Merger will be made solely through the Scheme Document,
which will contain the full terms and conditions of the Scheme, including
details of how to vote with respect to the Scheme. Any acceptance or other
response to the proposals should be made only on the basis of the information in
the Scheme Document.
In particular, this announcement is not an offer of securities for sale in the
United States and the New Taylor Woodrow Shares, which will be issued in
connection with the Merger, have not been, and will not be, registered under
the US Securities Act or under the securities law of any state, district or
other jurisdiction of the United States, Australia, Canada or Japan and no
regulatory clearance in respect of the New Taylor Woodrow Shares has been, or
will be, applied for in any jurisdiction other than the UK. The New Taylor
Woodrow Shares may not be offered, sold, or, delivered, directly or indirectly,
in, into or from the United States absent registration under the US Securities
Act or an exemption from registration. The New Taylor Woodrow Shares may not be
offered, sold, resold, delivered or distributed, directly or indirectly, in,
into or from Canada, Australia or Japan or to, or for the account or benefit of,
any resident of Australia, Canada or Japan absent an exemption from registration
or an exemption under relevant securities law. It is expected that the New
Taylor Woodrow Shares will be issued in reliance upon the exemption from the
registration requirements of the US Securities Act provided by Section 3(a)(10)
thereof. Under applicable US securities laws, persons (whether or not US
persons) who are or will be "affiliates" within the meaning of the US Securities
Act of George Wimpey or Taylor Woodrow prior to, or of Taylor Wimpey after, the
Effective Date will be subject to certain transfer restrictions relating to the
New Taylor Woodrow Shares received in connection with the Scheme.
Notice to US Investors in George Wimpey: The Merger relates to the shares of a
UK company and is proposed to be made by means of a scheme of arrangement
provided for under the laws of England and Wales. The Merger is subject to the
disclosure requirements and practices applicable in the United Kingdom to
schemes of arrangement, which differ from the disclosure and other requirements
of US securities laws. Financial information included in the relevant
documentation will have been prepared in accordance with accounting standards
applicable in the United Kingdom that may not be comparable to the financial
statements of US companies.
Copies of this announcement and any formal documentation relating to the Merger
are not being, and must not be, directly or indirectly, mailed or otherwise
forwarded, distributed or sent in or into or from Canada, Australia or Japan and
persons receiving such documents (including custodians, nominees and trustees)
must not mail or otherwise forward, distribute or sent it in or into or from
Canada, Australia or Japan.
If the Merger is implemented by way of an Offer, it will be made in accordance
with the procedural and filing requirements of the US securities laws, to the
extent applicable. If the Merger is implemented by way of an Offer, the New
Taylor Woodrow Shares to be issued in connection with such Offer will not be
registered under the US Securities Act or under the securities laws of any
state, district or other jurisdiction of the United States and may not be
offered, sold or delivered, directly or indirectly, in the United States except
pursuant to an applicable exemption from, or in a transaction not subject to,
the registration requirements of the US Securities Act or such other securities
laws. Taylor Woodrow does not intend to register any such New Taylor Woodrow
Shares or part thereof in the United States or to conduct a public offering of
the New Taylor Woodrow Shares in the United States.
Forward looking statements
This announcement may contain forward looking statements that are based on
current expectations or beliefs, as well as assumptions about future events.
Generally, the words "will", "may", "should", "continue", "believes", "expects",
"intends", "anticipates" or similar expressions identify forward-looking
statements. These statements are based on the current expectations of
management and are naturally subject to risks, uncertainties and changes in
circumstances. Undue reliance should not be placed on any such statements
because, by their very nature, they are subject to known and unknown risks and
uncertainties and can be affected by other factors that could cause actual
results, and management's plans and objectives, to differ materially from those
expressed or implied in the forward looking statements.
There are several factors which could cause actual results to differ materially
from those expressed or implied in forward looking statements. Among the factors
that could cause actual results to differ materially from those described in the
forward looking statements are the ability to combine successfully the
businesses of Taylor Woodrow and George Wimpey and to realise expected synergies
from that combination, changes in the global, political, economic, business,
competitive, market and regulatory forces, future exchange and interest rates,
changes in tax rates and future business combinations or dispositions.
Neither Taylor Woodrow nor George Wimpey undertakes any obligation (except as
required by the Listing Rules and the rules of the London Stock Exchange) to
revise or update any forward looking statement contained in this announcement,
regardless of whether that statement is affected as a result of new information,
future events or otherwise.
Dealing disclosure requirements
Under the provisions of Rule 8.3 of the City Code, if any person is, or becomes,
"interested" (directly or indirectly) in one per cent. or more of any class of "
relevant securities" of Taylor Woodrow or George Wimpey, 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. on the London business day
following the date of the relevant transaction. This requirement will continue
until the Scheme becomes Effective, lapses or is otherwise withdrawn or on which
the "offer period" otherwise ends (or, if the Merger is implemented by way of an
Offer, until the date on which the Offer becomes, or is declared, unconditional
as to acceptances, 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 Taylor Woodrow or George Wimpey, 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 City Code, all "dealings" in "relevant
securities" of Taylor Woodrow or George Wimpey by Taylor Woodrow or George
Wimpey, or by any of their respective "associates", must be disclosed by no
later than 12.00 noon 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 City 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.
For immediate release
Not for release, publication, or distribution in or into Canada, Australia, or
Japan
PART 1
26 March 2007
PROPOSED MERGER OF TAYLOR WOODROW AND GEORGE WIMPEY TO CREATE
TAYLOR WIMPEY,
THE LARGEST UK HOUSEBUILDER
1. Introduction
The Boards of Taylor Woodrow plc ("Taylor Woodrow") and George Wimpey Plc ("
George Wimpey") are pleased to announce that they have reached agreement on the
terms of a recommended all-share merger to create Taylor Wimpey plc ("Taylor
Wimpey"). Taylor Wimpey will be the UK's largest housebuilding group with
combined pro forma annual revenues of over #6.7 billion, total UK house
completions of approximately 22,000 per annum, total North American house
completions of approximately 9,000 per annum and a combined market
capitalisation of approximately #5 billion.
2. Rationale for the Merger
The Boards of Taylor Woodrow and George Wimpey believe that the Merger has
compelling strategic and financial logic for both companies. The Merger creates
a combined business with significantly enhanced prospects in both the UK and the
US and offers shareholders the opportunity to share in any value upside going
forward. The Combined Group will be the leading UK housebuilder, in terms of
completions, has a pro forma UK landbank of over 92,000 plots and will be
strengthened in the US through the combination of highly complementary
operations across some of the most attractive US markets.
The principal benefits of the Merger include:
- Margin growth in the UK
The Combined Group will be better positioned to leverage the respective
strengths of Taylor Woodrow and George Wimpey in order to accelerate an
improvement in profitability. The key driver of this development will be
ensuring that Taylor Woodrow's strategic land development skills are
successfully coupled with George Wimpey's more efficient cost base and business
structure. Under this structure, the Combined Group aims to accelerate actions
to smooth its sales and completions profile whilst also focusing on the most
attractive opportunities to deliver profitable growth.
Furthermore, the Combined Group will enhance average selling prices by adjusting
its business model in such a way so as to yield a lower sales rate per outlet
and a reduction in the annual number of aggregate completions for the Combined
Group versus the standalone businesses in order to maximise operating efficiency
and deliver on its growth commitments.
- Economies of scale in the UK
The Merger should help secure the future growth of the Combined Group by
enhancing its ability to buy and develop significant parcels of land. Through
leveraging its increased scale, the Combined Group should be able to achieve
improved procurement terms and conditions whilst maximising supply chain
efficiency. The Combined Group will have a substantial, high quality and more
balanced combination of current and strategic landbank, and will be better
placed to succeed in a challenging planning environment in the UK.
- Future recovery and growth in the North American housing
market
The Combined Group will benefit from the highly complementary nature of the two
businesses across some of the most attractive high growth states in North
America, particularly Florida, California, Arizona and Texas. The product
portfolio of the Combined Group will be enhanced by the broader offering to the
market through the Taylor Woodrow brand, and the mid-market through George
Wimpey's Morrison Homes brand.
In addition, the Combined Group will be better positioned to benefit from any
market recovery and will have the financial flexibility to take advantage of
acquisition opportunities as the cycle turns.
- Synergies of at least #70 million per annum
The Combined Group will focus on driving out costs from the combined operations
by delivering on its efficiency targets, rationalising corporate costs and
improving the collective procurement process. This is expected to lead to at
least #70 million of pre-tax synergies by the end of the first full financial
year following the Effective Date, at a one-off cost of around #60 million, the
majority of which will be incurred in the current financial year.
These synergies are in addition to the previously announced cost savings of #25
million in George Wimpey's UK business, and combined savings in excess of US$20
million in the US in 2007.
- Balance sheet
The Combined Group will benefit from a strong balance sheet that provides an
improved financial platform to support future growth. This improved financial
flexibility is expected to enable the Combined Group to enhance shareholder
value and its growth profile through continued investment in land, whilst also
allowing it to take advantage of acquisition opportunities that may arise in its
different markets.
The boards of Taylor Woodrow and George Wimpey have confidence in the strength
of the Combined Group and believe that it will be better positioned to drive
both growth and profitability going forward.
The Merger is expected to be earnings enhancing for both Taylor Woodrow and
George Wimpey Shareholders in the first full financial year following the
Effective Date, including synergies, excluding one-off costs.(2)
3. Merger terms
The Merger is to be effected by way of a scheme of arrangement of George Wimpey
and will be subject to the terms and conditions set out below and in Appendix I
and to be set out in the Scheme Document. However, Taylor Woodrow and George
Wimpey reserve the right to implement the Merger by way of Taylor Woodrow making
an Offer for the entire issued and to be issued share capital of George Wimpey
instead.
The Exchange Ratio shall be calculated on the basis of the issued share capital
of Taylor Woodrow immediately prior to the posting of the Scheme Document so as
to provide George Wimpey Shareholders (on a fully diluted basis) with such
number of New Taylor Woodrow Shares as would result in Taylor Woodrow
Shareholders holding 51 per cent. and George Wimpey Shareholders (on a fully
diluted basis) holding 49 per cent. of the issued share capital of Taylor
Wimpey.
Those Taylor Woodrow Shareholders who are on the register of Taylor Woodrow
Shareholders as at close of business on 25 May 2007 will be entitled to receive
and retain the Taylor Woodrow final dividend of 9.75 pence per Taylor Woodrow
Share in respect of the year ended 31 December 2006, payable on 2 July 2007.
Similarly, those George Wimpey Shareholders who were on the register of George
Wimpey Shareholders as at close of business on 2 March 2007 will be entitled to
receive and retain the George Wimpey final dividend of 13.10 pence per George
Wimpey Share in respect of the year ended 31 December 2006, payable on 11 May
2007. The final George Wimpey and Taylor Woodrow dividends for the year ended 31
December 2006 are subject to usual shareholder approval at their respective
Annual General Meetings.
The New Taylor Woodrow Shares will be issued credited as fully paid and will
rank pari passu in all respects with the Taylor Woodrow Shares in issue at the
time the New Taylor Woodrow Shares are delivered pursuant to the Merger,
including the right to receive and retain dividends and other distributions (if
any) paid by reference to a record date after the Effective Date. Applications
will be made to the UK Listing Authority for the New Taylor Woodrow Shares to be
admitted to the Official List and to the London Stock Exchange for the New
Taylor Woodrow Shares to be admitted to trading on the London Stock Exchange's
main market for listed securities.
The George Wimpey Shares will be acquired under the Merger fully paid and free
from all liens, charges, equitable interests, encumbrances, rights of
pre-emption and any other rights and interests of any nature and together with
all rights now or hereafter attaching to them, save for, in the case of
dividends, the George Wimpey final dividend of 13.10 pence per George Wimpey
Share for the year ended 31 December referred to above.
The Scheme requires the approval of a majority in number representing not less
than 75 per cent. in value of the Scheme Shareholders present and voting, either
in person or by proxy at the Scheme Meeting and the passing of the resolutions
necessary to implement the Scheme at the George Wimpey Extraordinary General
Meeting.
Note:
(2) Nothing in this announcement should be interpreted to mean that the future
earnings per share of Taylor Wimpey will necessarily match or exceed the
historical earnings per share of Taylor Woodrow or George Wimpey.
Following the Scheme Meeting, the George Wimpey Extraordinary General Meeting
and the satisfaction (or, where applicable, waiver) of the other Conditions, the
Scheme must also be sanctioned by the Court and the associated Capital Reduction
must be confirmed by the Court, in each case at the relevant Court Hearings.
Fractions of New Taylor Woodrow Shares will not be allotted or issued pursuant
to the Scheme. Fractional entitlements to New Taylor Woodrow Shares will be
aggregated and sold in the market and the net proceeds of sale distributed pro
rata to persons entitled thereto.
4. Recommendation
The directors of George Wimpey, who have been so advised by JPMorgan Cazenove,
consider the terms of the Merger to be fair and reasonable. In providing advice
to the directors of George Wimpey, JPMorgan Cazenove has taken into account the
commercial assessments of the directors of George Wimpey. Accordingly, the
directors of George Wimpey have unanimously agreed to recommend that George
Wimpey Shareholders vote in favour of the resolutions relating to the Merger to
be proposed at the Scheme Meeting and the George Wimpey Extraordinary General
Meeting, as they have undertaken to do in respect of their own beneficial
holdings of 300,108 George Wimpey Shares representing, in aggregate,
approximately 0.08 per cent. of the existing issued share capital of George
Wimpey.
The directors of Taylor Woodrow, who have received financial advice from UBS and
Morgan Stanley, consider the terms of the Merger to be fair and reasonable. In
providing advice to the directors of Taylor Woodrow, UBS and Morgan Stanley have
relied on the commercial assessments of the directors of Taylor Woodrow. The
directors of Taylor Woodrow consider the Merger to be in the best interests of
Shareholders and, accordingly, have unanimously agreed to recommend that Taylor
Woodrow Shareholders vote in favour of the resolutions to be proposed at the
Taylor Woodrow Extraordinary General Meeting relating to the Merger as they have
undertaken to do in respect of their own beneficial holdings of 126,159 Taylor
Woodrow Shares representing, in aggregate, approximately 0.03 per cent. of the
existing issued share capital of Taylor Woodrow.
5. Irrevocable undertakings
The undertakings given by directors of George Wimpey (described in paragraph 4
above) will cease to be binding if: (i) the Scheme Document is not posted to
George Wimpey Shareholders within 28 days (or such longer date as the Panel may
agree) after the date of this announcement; (ii) the Scheme lapses or is
withdrawn; or (iii) the Scheme has not become effective by 6.00 pm on the Long
Stop Date.
The undertakings given by the directors of Taylor Woodrow (described in
paragraph 4 above) will cease to be binding if: (i) the Scheme document is not
posted to George Wimpey Shareholders within 28 days (or such longer date that
the Panel may agree) after the date of this announcement; (ii) the Scheme lapses
or is withdrawn; or (iii) the Scheme has not become effective by 6.00 pm on the
Long Stop Date.
Further details on the irrevocables can be found in Appendix 4.
6. Change of name
It is intended that a resolution to change the name of Taylor Woodrow to Taylor
Wimpey, to take effect on completion of the Merger, will be put to Taylor
Woodrow Shareholders at the Taylor Woodrow Extraordinary General Meeting.
7. Key management and board of directors of Taylor Wimpey
Key management and the board of directors of Taylor Wimpey will be drawn from a
combination of the current teams within both Taylor Woodrow and George Wimpey as
follows:
Board of directors of Taylor Wimpey
Norman Askew, Chairman (Taylor Woodrow)
Peter Redfern, Chief Executive (George Wimpey)
Peter Johnson, Finance Director (Taylor Woodrow)
Ian Sutcliffe, UK Chief Executive (George Wimpey)
John Landrum, North American President (Taylor Woodrow)
David Williams, Senior Independent Director (George Wimpey)
Mike Davies, Non-Executive Director (Taylor Woodrow)
Brenda Dean, Non-Executive Director (George Wimpey)
Andrew Dougal, Non-Executive Director (Taylor Woodrow)
Katherine Innes Ker, Non-Executive Director (Taylor Woodrow)
Anthony Reading, Non-Executive Director (George Wimpey)
8. Information on Taylor Woodrow
Taylor Woodrow has been building homes since 1921 and has operations in the UK,
North America, Spain, and Gibraltar, and is engaged in residential and mixed use
property development. Taylor Woodrow's product range spans from affordable to
executive homes and includes lifestyle communities and luxury second homes.
For the year ended 31 December 2006, the Taylor Woodrow Group reported turnover
of #3,572.1 million (excluding joint ventures), operating profit of #469.8
million, pre-tax profit of #405.6 million and net income of #290.6 million.
Taylor Woodrow reported net assets of 2,105.5 million as at 31 December 2006.
For the year ended 31 December 2006, the Taylor Woodrow Group effected 13,165
home completions (out of which 8,294 were in the UK and 4,492 were in North
America), with an average selling price of #207,000. As at 31 December 2006,
the Taylor Woodrow Group had a total landbank of 68,662 plots, out of which
34,827 were in the UK, 31,353 were in North America and 2,482 were in Spain and
Gibraltar. This equates to 4.2 years of supply in the UK and 4.4 years of supply
in North America at 2006 volumes.
9. Information on George Wimpey
George Wimpey has been building homes for over 125 years and is the parent of a
group of dedicated housebuilding companies with operations throughout the UK and
the US. George Wimpey's residential offerings range from apartments for first
time buyers to compact townhomes to large detached family homes.
For the year ended 31 December 2006, the George Wimpey Group reported turnover
of #3,147.4 million (excluding joint ventures), operating profit before
exceptional items of #422.8 million, pre-tax profit pre exceptional items of
#370.9 million and net income pre exceptional items of #256.0 million. George
Wimpey reported net assets of #1,707.1 million as at 31 December 2006.
In 2006, the George Wimpey Group effected 17,963 completions (out of which
13,616 were in the UK and 4,347 were in the US), with an average selling price
of #175,400 in the UK and an average selling price of $319,600 in the US. As at
31 December 2006, the George Wimpey Group had a landbank of 76,736 plots, out of
which 57,999 were in the UK and 18,737 were in the US. This equates to 4.3 years
worth of supply at 2006 volumes.
10. Current trading
The Boards of Taylor Woodrow and George Wimpey confirm that their respective
businesses continue to trade in line with the guidance given at the time of the
preliminary results for the financial year ended 31 December 2006.
Taylor Woodrow
As announced by Norman Askew, Taylor Woodrow Chairman, on 20 February 2007:
"We have delivered a robust performance in 2006 and the increase in the full
year dividend of 10 per cent maintains our progressive dividend policy."
As announced by Ian Smith, Taylor Woodrow Chief Executive, on 20 February 2007:
"My initial review of Taylor Woodrow's operations has confirmed my impression of
a business with strong potential for growth in the medium term. The UK has
delivered in line with expectations in 2006. We have a number of initiatives in
place to improve our performance and this will be our UK management team's key
focus.
In North America, we have achieved an excellent performance in 2006 as a result
of the strategy of maximising forward sales during 2005. We continue to be
confident in the prospects for the business in the medium-term, but expect to
see significant reductions in both operating margin and return on capital
employed during 2007."
George Wimpey
As announced by John Robinson, Chairman of George Wimpey, on 21 February 2007:
"We have continued to build on the strong progress made during the first half of
2006. I am delighted with the advances made by our UK business which have offset
the effect of market weakness in the US. We have taken the necessary steps to
ensure our US business is in the best possible position to benefit as the market
returns to stability."
As announced by Peter Redfern, Chief Executive of George Wimpey, on 21 February
2007:
"As promised last year we have taken the firm actions required in the UK to
deliver improved results. The change in focus has delivered margin growth ahead
of expectations in the second half of 2006. With a strong land position, an
established cost reduction programme and a record order book we are confident of
margin growth going forward."
11. Dividend policy
Following the Merger, and consistent with the enhanced growth strategy, it is
expected that the Combined Group will follow a progressive dividend policy which
balances returns to shareholders with the need to retain sufficient funds to
drive growth.
12. Management and employees
The Boards of Taylor Woodrow and George Wimpey have confirmed to each other
that, following the Scheme becoming Effective, the existing employment rights,
including pension rights, of all employees of both Taylor Woodrow and George
Wimpey will be fully safeguarded.
13. George Wimpey Share Schemes
Appropriate proposals will be made in due course to participants in the George
Wimpey Share Schemes. Details of these proposals will be set out in the Scheme
Document or, as the case may be, the Offer Document, and in separate letters to
be sent to participants in the George Wimpey Share Schemes.
14. Merger Agreement
Taylor Woodrow and George Wimpey have entered into a Merger Agreement in
relation to the Merger which contains provisions regarding the implementation of
the Merger and certain assurances and confirmations between the parties
(including terms regarding the conduct of the businesses pending completion of
the Merger).
Non-solicitation arrangements
Taylor Woodrow and George Wimpey have undertaken, amongst other things, not to,
and to procure that members of the Taylor Woodrow Group and the George Wimpey
Group and their respective directors, management and professional advisers shall
not, solicit, induce or initiate an Independent Competing Transaction.
Taylor Woodrow and George Wimpey have also undertaken to notify the other
immediately of any approach that is made to it or any other member of its group
or its directors, employees, advisers or agents in relation to an Independent
Competing Transaction and the material terms of such transaction and to keep the
other party informed as to the progress of such approach.
Break Fee arrangements
Taylor Woodrow has agreed to pay George Wimpey a break fee of #24,469,000 (or,
in the case of the circumstance referred to in the fourth bullet point below,
#12,234,500 (in each case inclusive of irrecoverable VAT) on the first to occur
of the following:
* an Independent Competing Transaction for Taylor Woodrow is announced
(whether or not on a pre-conditional basis) and the directors of Taylor Woodrow
announce their intention to or recommend that Taylor Woodrow Shareholders accept
such transaction;
* an Independent Competing Transaction for Taylor Woodrow is announced
(whether or not on a pre-conditional basis) and such transaction becomes or is
declared wholly unconditional or is otherwise completed;
* the recommendation by the directors of Taylor Woodrow to the Taylor
Woodrow Shareholders to vote in favour of the resolutions proposed at the Taylor
Woodrow Extraordinary General Meeting, at or prior to such meeting, is not
provided in the Taylor Woodrow Circular, withdrawn, qualified or adversely
amended;
* the Taylor Woodrow Shareholders fail to pass the resolutions proposed
at the Taylor Woodrow Extraordinary General Meeting; or
* George Wimpey terminates the Merger Agreement in accordance with its
terms following a breach by Taylor Woodrow of a term of the Merger Agreement
which has a material adverse effect on the Merger or its implementation.
George Wimpey has agreed to pay Taylor Woodrow a break fee of #24,469,000 or, in
the case of the circumstances referred to in the fourth bullet point below,
#12,234,500 (in each case inclusive of irrecoverable VAT) on the first to occur
of the following:
* an Independent Competing Transaction for George Wimpey is announced
(whether or not on a pre-conditional basis) and the directors of George Wimpey
announce their intention to or recommend that George Wimpey Shareholders accept
such transaction;
* an Independent Competing Transaction for George Wimpey is announced
(whether or not on a pre-conditional basis) and such transaction becomes or is
declared wholly unconditional or is otherwise completed;
* the recommendation by the directors of George Wimpey to the George
Wimpey Shareholders to vote in favour of the resolutions to implement the Scheme
at the Scheme Meeting or the George Wimpey Extraordinary General Meeting is not
provided in the Scheme Document, withdrawn, qualified or adversely amended;
* the Scheme Shareholders fail to approve the Scheme at the Scheme
Meeting or George Wimpey Shareholders fail to approve the resolutions proposed
at the George Wimpey Extraordinary General Meeting; or
* Taylor Woodrow terminates the Merger Agreement in accordance with its
terms following a breach by George Wimpey of a term of the Merger Agreement
which has a material adverse effect on the Merger or its implementation.
15. Scheme of arrangement
It is intended that the Merger will be effected by means of a Court-sanctioned
scheme of arrangement between George Wimpey and its shareholders under section
425 of the Companies Act. The Scheme will involve an application by George
Wimpey to the Court to sanction the Scheme.
The Scheme will be subject to the Conditions and certain further terms referred
to in Appendix 1 to this announcement and to be included in the Scheme Document.
In particular, to become Effective, the Scheme requires the approval of Scheme
Shareholders by the passing of a resolution at the Scheme Meeting. The
resolution must be approved by a majority in number present and voting, either
in person or by proxy, representing not less than 75 per cent. in value of the
Scheme Shares which are voted at the Scheme Meeting (or any adjournment
thereof). To become Effective, the Scheme also requires the passing of the
resolutions necessary to implement the Scheme at the George Wimpey Extraordinary
General Meeting, requiring the approval of the George Wimpey Shareholders
representing at least 75 per cent. of the votes cast at the George Wimpey
Extraordinary General Meeting, which will be held immediately after the Scheme
Meeting.
Following the Scheme Meeting and the George Wimpey Extraordinary General
Meeting, the Scheme must be sanctioned and the Capital Reduction confirmed by
the Court, and will only become effective on delivery to the Registrar of
Companies of:
* a copy of the First Court Order; and
* a copy of the Second Court Order,
and in the case of the Second Court Order, it being registered by the Registrar
of Companies.
Upon the Scheme becoming Effective, it will be binding on all George Wimpey
Shareholders, irrespective of whether or not they attended or voted at the
Scheme Meeting or the George Wimpey Extraordinary General Meeting.
The Scheme Document will include full details of the Scheme, together with
notices of the Scheme Meeting and the George Wimpey Extraordinary General
Meeting and the expected timetable, and will specify the action to be taken by
Scheme Shareholders.
Taylor Woodrow and George Wimpey reserve the right to decide to implement the
Merger by way of Taylor Woodrow making an Offer for the entire issued and to be
issued share capital of George Wimpey. The directors of George Wimpey have
confirmed that, in the event that the Merger is implemented by way of Offer, the
directors of George Wimpey will recommend, on a unanimous and unqualified basis,
that George Wimpey Shareholders accept the Offer except to the extent that the
directors of George Wimpey determine in good faith (having taken appropriate
legal and financial advice) that such unanimous and unqualified recommendation
should not be given or should be withdrawn or modified in compliance with their
fiduciary duties.
16. Taylor Woodrow Shareholder approval and Prospectus
As a result of the size of the transaction, the Merger constitutes a Class 1
transaction (as defined in the Listing Rules) for Taylor Woodrow. Accordingly,
Taylor Woodrow will be required to seek the approval of the Taylor Woodrow
Shareholders for the Merger at the Taylor Woodrow Extraordinary General Meeting.
Taylor Woodrow is required to prepare and send to the Taylor Woodrow
Shareholders a circular summarising the background to and reasons for the Merger
(which will include a notice convening the Taylor Woodrow Extraordinary General
Meeting). The Merger is conditional on, amongst other things, the requisite
resolutions being passed by the Taylor Woodrow Shareholders at the Taylor
Woodrow Extraordinary General Meeting.
Taylor Woodrow will also be required to publish the Prospectus in connection
with the issue of the New Taylor Woodrow Shares. The Prospectus will contain
information relating to the Combined Group and the New Taylor Woodrow Shares.
17. Overseas shareholders
The availability of New Taylor Woodrow Shares under the terms of the Merger to
persons not resident in the United Kingdom may be affected by the laws of the
relevant jurisdiction. Such persons should inform themselves about and observe
any applicable requirements. Further details in relation to overseas
shareholders will be contained in the Scheme Document.
18. Interest in shares
As at the close of business on 23 March 2007, being the latest practicable date
prior to the date of this announcement, neither Taylor Woodrow nor any director
of Taylor Woodrow, nor, so far as Taylor Woodrow is aware, any party acting in
concert with Taylor Woodrow, owns or controls any George Wimpey Shares or any
securities convertible or exchangeable into, or any rights to subscribe for or
purchase, or any options to purchase any George Wimpey Shares or holds any
derivatives referenced to George Wimpey Shares. In the interests of
confidentiality, Taylor Woodrow has not made any enquiries in this respect of
certain parties who may be presumed by the Panel to be acting in concert with it
for the purposes of the Merger.
19. Securities in issue
In accordance with Rule 2.10 of the City Code, as at close of business on 23
March 2007, being the last Business Day prior to this announcement, Taylor
Woodrow had 581,917,049 ordinary shares of 25 pence each in issue (ISIN number
GB0008782301) and George Wimpey had 400,963,763 ordinary shares of 25 pence each
in issue (ISIN number GB0009713446).
20. Delisting and re-registration
It is intended that the London Stock Exchange and the UKLA will be requested
respectively to cancel trading in George Wimpey Shares on the London Stock
Exchange's main market for listed securities and the listing of the George
Wimpey Shares from the Official List on the Effective Date.
As soon as possible after the Effective Date, it is intended that George Wimpey
be re-registered as a private limited company.
If the Merger is effected by way of an Offer, it is anticipated that the
cancellation of George Wimpey's listing and admission to trading will take
effect no earlier than 20 Business Days after the date on which the Offer
becomes or is declared unconditional in all respects. Delisting would
significantly reduce the liquidity and marketability of any George Wimpey Shares
not assented to the Offer at that time.
If the Merger is effected by way of an Offer and such Offer becomes or is
declared unconditional in all respects and sufficient acceptances are received,
Taylor Woodrow intends to exercise its rights to acquire compulsorily the
remaining George Wimpey Shares in respect of which the Offer has not been
accepted.
21. General and documentation
The Merger will be governed by English law and will be subject to the
jurisdiction of the English courts.
The Merger will be subject to the Conditions and further terms set out herein
and in Appendix 1 and to the full terms and conditions which will be set out in
the Scheme Document.
The bases and sources of certain financial information contained in this
announcement, as well as some additional financial and operational information,
are set out in Appendix 2. Certain definitions and terms used in this
announcement are set out in Appendix 3.
The Prospectus and Scheme Document will be sent to George Wimpey Shareholders
other than certain overseas shareholders in due course. At the same time or as
nearly as practicable at the same time as these documents are sent to George
Wimpey Shareholders, the Prospectus and the Taylor Woodrow Shareholder Circular
convening the Taylor Woodrow Extraordinary General Meeting will be sent to
Taylor Woodrow Shareholders.
Enquiries:
Taylor Woodrow plc George Wimpey Plc
Tel: +44 121 600 8520 Tel: +44 20 7963 6352
Ian Smith Peter Redfern
Peter Johnson Andrew Carr-Locke
UBS Investment Bank JPMorgan Cazenove
(lead financial adviser and joint-broker to Taylor (sole financial adviser and joint-broker to George
Woodrow) Wimpey)
Tel: +44 20 7568 1000 Tel: +44 20 7588 2828
Aidan Clegg Mark Breuer
Bill Hutchings Richard Cotton
James Robertson Andrew Truscott
Morgan Stanley Hoare Govett
(joint financial adviser and joint-broker to Taylor (joint-broker to George Wimpey)
Woodrow)
Tel: +44 20 7425 8000 Tel: +44 20 7678 8000
Gavin MacDonald Antonia Rowan
Jean-Eudes Renier Luke Simpson
Peter Moorhouse
Finsbury The Maitland Company
(PR adviser to Taylor Woodrow) (PR adviser to George Wimpey)
Tel: +44 20 7251 3801 Tel: +44 20 7379 5151
James Murgatroyd Liz Morley
UBS is acting as lead financial adviser and joint-broker to Taylor Woodrow, and
no one else in connection with the Merger and will not be responsible to anyone
other than Taylor Woodrow for providing the protections afforded to the clients
of UBS nor for providing advice in relation to the Merger or any other matter
referred to herein.
Morgan Stanley is acting as joint financial adviser and joint-broker to Taylor
Woodrow in respect of the Merger, and no one else in connection with the Merger
and will not be responsible to anyone other than Taylor Woodrow for providing
the protections afforded to the clients of Morgan Stanley nor for providing
advice in relation to the Merger or any other matter referred to herein.
JPMorgan Cazenove is acting as sole financial adviser and joint-broker to George
Wimpey in connection with the Merger and will not be responsible to anyone other
than George Wimpey for providing the protections afforded to the clients of
JPMorgan Cazenove nor for providing advice in relation to the Merger or any
other matter referred to herein.
Hoare Govett is acting as joint-broker to George Wimpey, and no one else in
connection with the Merger and will not be responsible to anyone other than
George Wimpey for providing the protections afforded to the clients of Hoare
Govett nor for providing advice in relation to the Merger or any other matter
referred to herein.
Overseas jurisdictions
The release, publication or distribution of this announcement in jurisdictions
other than the United Kingdom may be restricted by law and therefore any persons
who are subject to the laws of any jurisdiction other than the United Kingdom
should inform themselves about, and observe, any applicable requirements. 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 and regulations of any jurisdiction outside of England.
This announcement is not intended to, and does not constitute, or form part of,
an offer to sell or an invitation to purchase or subscribe for any securities or
a solicitation of any vote or approval in any jurisdiction. This announcement
does not constitute a prospectus or a prospectus equivalent document.
Shareholders of Taylor Woodrow and George Wimpey are advised to read carefully
the formal documentation in relation to the Merger once it has been despatched.
The proposals of the Merger will be made solely through the Scheme Document,
which will contain the full terms and conditions of the Scheme, including
details of how to vote with respect to the Scheme. Any acceptance or other
response to the proposals should be made only on the basis of the information in
the Scheme Document.
In particular, this announcement is not an offer of securities for sale in the
United States and the New Taylor Woodrow Shares, which will be issued in
connection with the Merger, have not been, and will not be, registered under
the US Securities Act or under the securities law of any state, district or
other jurisdiction of the United States, Australia, Canada or Japan and no
regulatory clearance in respect of the New Taylor Woodrow Shares has been, or
will be, applied for in any jurisdiction other than the UK. The New Taylor
Woodrow Shares may not be offered, sold,, or delivered, directly or indirectly,
in, into or from the United States absent registration under the US Securities
Act or an exemption from registration. The New Taylor Woodrow Shares may not be
offered, sold, resold, delivered or distributed, directly or indirectly, in,
into or from Canada, Australia or Japan or to, or for the account or benefit of,
any resident of Australia, Canada or Japan absent an exemption from registration
or an exemption under relevant securities law. It is expected that the New
Taylor Woodrow Shares will be issued in reliance upon the exemption from the
registration requirements of the US Securities Act provided by Section 3(a)(10)
thereof. Under applicable US securities laws, persons (whether or not US
persons) who are or will be "affiliates" within the meaning of the US Securities
Act of George Wimpey or Taylor Woodrow prior to, or of Taylor Wimpey after, the
Effective Date will be subject to certain transfer restrictions relating to the
New Taylor Woodrow Shares received in connection with the Scheme.
Notice to US Investors in George Wimpey: The Merger relates to the shares of a
UK company and is proposed to be made by means of a scheme of arrangement
provided for under the laws of England and Wales. The Merger is subject to the
disclosure requirements and practices applicable in the United Kingdom to
schemes of arrangement, which differ from the disclosure and other requirements
of US securities laws. Financial information included in the relevant
documentation will have been prepared in accordance with accounting standards
applicable in the United Kingdom that may not be comparable to the financial
statements of US companies.
Copies of this announcement and any formal documentation relating to the Merger
are not being, and must not be, directly or indirectly, mailed or otherwise
forwarded, distributed or sent in or into or from Canada, Australia or Japan and
persons receiving such documents (including custodians, nominees and trustees)
must not mail or otherwise forward, distribute or sent it in or into or from the
Canada, Australia or Japan.
If the Merger is implemented by way of an Offer, it will be made in accordance
with the procedural and filing requirements of the US securities laws, to the
extent applicable. If the Merger is implemented by way of an Offer, the New
Taylor Woodrow Shares to be issued in connection with such Offer will not be
registered under the US Securities Act or under the securities laws of any
state, district or other jurisdiction of the United States and may not be
offered, sold or delivered, directly or indirectly, in the United States except
pursuant to an applicable exemption from, or in a transaction not subject to,
the registration requirements of the US Securities Act or such other securities
laws. Taylor Woodrow does not intend to register any such New Taylor Woodrow
Shares or part thereof in the United States or to conduct a public offering of
the New Taylor Woodrow Shares in the United States.
Forward looking statements
This announcement may contain forward looking statements that are based on
current expectations or beliefs, as well as assumptions about future events.
Generally, the words "will", "may", "should", "continue", "believes", "expects",
"intends", "anticipates" or similar expressions identify forward-looking
statements. These statements are based on the current expectations of
management are naturally subject to risks, uncertainties and changes in
circumstances. Undue reliance should not be placed on any such statements
because, by their very nature, they are subject to known and unknown risks and
uncertainties and can be affected by other factors that could cause actual
results, and management's plans and objectives, to differ materially from those
expressed or implied in the forward looking statements.
There are several factors which could cause actual results to differ materially
from those expressed or implied in forward looking statements. Among the factors
that could cause actual results to differ materially from those described in the
forward looking statements are the ability to combine successfully the
businesses of Taylor Woodrow and George Wimpey and to realise expected synergies
from that combination, changes in the global, political, economic, business,
competitive, market and regulatory forces, future exchange and interest rates,
changes in tax rates and future business combinations or dispositions.
Neither Taylor Woodrow nor George Wimpey undertakes any obligation (except as
required by the Listing Rules and the rules of the London Stock Exchange) to
revise or update any forward looking statement contained in this announcement,
regardless of whether that statement is affected as a result of new information,
future events or otherwise.
Dealing disclosure requirements
Under the provisions of Rule 8.3 of the City Code, if any person is, or becomes,
"interested" (directly or indirectly) in one per cent. or more of any class of "
relevant securities" of Taylor Woodrow or George Wimpey, 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. on the London business day
following the date of the relevant transaction. This requirement will continue
until the Scheme becomes Effective, lapses or is otherwise withdrawn or on which
the "offer period" otherwise ends (or, if the Merger is implemented by way of an
Offer, until the date on which the Offer becomes, or is declared, unconditional
as to acceptances, 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 Taylor Woodrow or George Wimpey, 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 City Code, all "dealings" in "relevant
securities" of Taylor Woodrow or George Wimpey by Taylor Woodrow or George
Wimpey, or by any of their respective "associates", must be disclosed by no
later than 12.00 noon 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 City 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.
APPENDIX 1
CONDITIONS TO AND CERTAIN FURTHER TERMS OF THE ACQUISITION
The Merger will be conditional upon the Scheme becoming unconditional and
Effective by the Long Stop Date.
PART A
Conditions of the Merger
1 The Scheme will be subject to the following conditions:
a) its approval by a majority in number representing not less than three-fourths in
value of the holders of Scheme Shares, present and voting, whether in person or by
proxy, at the Scheme Meeting (or any adjournment thereof);
b) the resolutions required to implement the Scheme being passed at the George Wimpey
Extraordinary General Meeting (or any adjournment thereof); and
c) the sanction of the Scheme and the confirmation of the Capital Reduction by the
Court (in either case with or without modification (but subject to such
modification being acceptable to Taylor Woodrow and George Wimpey)), office copies
of the Court Orders and of the minute of reduction being delivered to the
Registrar of Companies and registration of the Second Court Order confirming the
Capital Reduction with the Registrar of Companies.
2 The Merger will be conditional upon the passing at the Taylor Woodrow Extraordinary
General Meeting (or any adjournment thereof) of such resolution or resolutions as are
necessary to approve, implement and effect the Merger and the acquisition of George
Wimpey Shares pursuant to the Merger or otherwise (as such resolutions may be set out in
the Taylor Woodrow Shareholder Circular, including a resolution or resolutions to
increase the share capital of Taylor Woodrow and authorise the creation and allotment of
the New Taylor Woodrow Shares).
3 Taylor Woodrow and George Wimpey have agreed that, subject to the provisions of paragraph
5 of this Part A below and the requirements of the Panel in accordance with the City
Code, the Scheme will also be conditional upon, and accordingly the necessary actions to
make the Merger Effective will only be taken on, the satisfaction or, where relevant,
waiver of the following Conditions:
a) the Office of Fair Trading in the United Kingdom indicating, in terms
reasonably satisfactory to Taylor Woodrow and George Wimpey, that the
proposed Merger or any matter arising therefrom or related thereto will
not be referred to the Competition Commission;
b) the Admission becoming effective in accordance with the Listing Rules and the
admission of such shares to trading becoming effective in accordance with the
Admission and Disclosure Standards of the London Stock Exchange or, if Taylor
Woodrow and George Wimpey so determine and subject to the consent of the Panel,
the UKLA agreeing to admit such shares to the Official List and the London Stock
Exchange agreeing to admit such shares to trading subject only to (i) the
allotment of such shares and/or (ii) the Merger becoming Effective.
c) except as (i) publicly announced in accordance with the Listing Rules by Taylor
Woodrow or George Wimpey prior to 26 March, 2007, (ii) disclosed in the annual
report and accounts of George Wimpey for the financial year ended 31 December
2006, or (iii) disclosed in the annual report and accounts of Taylor Woodrow for
the financial year ended 31 December 2006, there being no provision of any
agreement, arrangement, licence, permit or other instrument to which any member of
the wider Taylor Woodrow Group or the wider George Wimpey Group is a party or by
or to which any such member or any of its assets may be bound, entitled or
subject, which in consequence of the Merger or the proposed acquisition of any
shares or other securities in George Wimpey by the Taylor Woodrow Group or because
of a change in the control or management of Taylor Woodrow or George Wimpey or
otherwise, would or might reasonably be expected to result (in each case to an
extent which is material in the context of the wider George Wimpey Group as a
whole or the wider Taylor Woodrow Group as a whole) in:
(i) any moneys borrowed by or any other indebtedness (actual or contingent)
of, or grant available to any such member, being or becoming repayable or
capable of being declared repayable immediately or earlier than their or
its stated maturity date or repayment date or the ability of any such
member to borrow moneys or incur any indebtedness being withdrawn or
inhibited or being capable of becoming or being withdrawn or inhibited;
(ii) any such agreement, arrangement, licence, permit or instrument or the
rights, liabilities, obligations or interests of any such member
thereunder being terminated or modified or affected or any obligation or
liability arising or any action being taken thereunder;
(iii) any assets or interests of any such member being or falling to be disposed
of or charged or any right arising under which any such asset or interest
could be required to be disposed of or charged otherwise than in the
ordinary course of business;
(iv) the creation or enforcement of any mortgage, charge or other security
interest over the whole or any part of the business, property or assets of
any such member;
(v) the rights, liabilities, obligations or interests of any such member in,
or the business of any such member with, any person, firm or body (or any
arrangement or arrangements relating to any such interest or business)
being terminated, adversely modified or affected;
(vi) the value of any such member or its financial or trading position being
prejudiced or adversely affected;
(vii) any such member ceasing to be able to carry on business under any name
under which it presently does so; or
(viii) the creation of any liability, actual or contingent, by any such member,
and no event having occurred which, under any provision of any agreement,
arrangement, licence, permit or other instrument to which any member of the wider
Taylor Woodrow Group or the wider George Wimpey Group is a party or by or to which
any such member or any of its assets may be bound, entitled or subject, would
result in or would reasonably be expected to result in any of the events or
circumstances as are referred to in sub-paragraphs (i) to (viii) of this paragraph
3(c) (in each case to an extent which is material in the context of the wider
Taylor Woodrow Group as a whole or the wider George Wimpey Group as a whole);
d) no government or governmental, quasi-governmental, supranational, statutory,
regulatory, environmental or investigative body, court, trade agency, association,
institution or any other body or person whatsoever in any jurisdiction (each a "
Third Party") having decided to take, institute, implement or threaten any action,
proceeding, suit, investigation, enquiry or reference, or enacted or made any
statute, regulation, decision or order, or having taken any other steps which
would or would reasonably be expected to (in each case to an extent which is
material in the context of the wider Taylor Woodrow Group as a whole or the wider
George Wimpey Group as a whole):
(i) require, prevent or delay the divestiture, or alter the terms envisaged
for any proposed divestiture by any member of the wider Taylor Woodrow
Group or any member of the wider George Wimpey Group of all or any portion
of their respective businesses, assets or property or impose any material
limitation on the ability of any of them to conduct their respective
businesses (or any of them) or to own any of their respective assets or
properties or any material part thereof;
(ii) require, prevent or delay the divestiture by any member of the wider
Taylor Woodrow Group of any shares or other securities in George Wimpey;
(iii) impose any limitation on, or result in a delay in, the ability of any
member of the wider Taylor Woodrow Group or the wider George Wimpey Group
directly or indirectly to acquire or to hold or to exercise effectively
any rights of ownership in respect of shares or loans or securities
convertible into shares or any other securities (or the equivalent) in any
member of the wider George Wimpey Group or the wider Taylor Woodrow Group
or to exercise management control over any such member;
(iv) otherwise adversely affect the business, assets or profits of any member
of the wider Taylor Woodrow Group or of any member of the wider George
Wimpey Group;
(v) make the Merger or its implementation or the acquisition or proposed
acquisition by Taylor Woodrow or any member of the wider Taylor Woodrow
Group of any shares or other securities in, or control of George Wimpey
void, illegal and/or unenforceable under the laws of any jurisdiction, or
otherwise directly or indirectly, restrain, restrict, prohibit, delay or
otherwise materially interfere with the same, or impose additional
conditions or obligations with respect thereto, or otherwise challenge or
materially interfere therewith;
(vi) require any member of the wider Taylor Woodrow Group or the wider George
Wimpey Group to offer to acquire any shares or other securities (or the
equivalent) or interest in any member of the wider George Wimpey Group or
the wider Taylor Woodrow Group owned by any third party; or
(vii) result in any member of the wider Taylor Woodrow Group or the wider George
Wimpey Group ceasing to be able to carry on business under any name under
which it presently does so,
and all applicable waiting and other time periods during which any such Third
Party could institute, implement or threaten any action, proceeding, suit,
investigation, enquiry or reference or any other step under the laws of any
jurisdiction in respect of the Merger or the acquisition or proposed acquisition
of any George Wimpey Shares having expired, lapsed or been terminated;
e) all necessary filings or applications having been made in connection with the
Merger and all statutory or regulatory obligations in any jurisdiction having been
complied with in connection with the Merger or the acquisition by any member of
the wider Taylor Woodrow Group of any shares or other securities in, or control
of, George Wimpey and all authorisations, orders, recognitions, grants, consents,
licences, confirmations, clearances, permissions and approvals (collectively "
Consents") reasonably deemed necessary for or in respect of, the Merger or the
proposed acquisition of any shares or other securities in, or control of, George
Wimpey by any member of the wider Taylor Woodrow Group having been obtained in
terms and in a form reasonably satisfactory to Taylor Woodrow and George Wimpey
from all appropriate Third Parties or persons with whom any member of the wider
Taylor Woodrow Group or the wider George Wimpey Group has entered into contractual
arrangements, and all such Consents together with all material Consents reasonably
necessary to carry on the business of any member of the wider Taylor Woodrow Group
or the wider George Wimpey Group remaining in full force and effect and all
filings necessary for such purpose having been made and there being no notice or
intimation of any intention to revoke or not to renew any of the same at the time
at which the Merger otherwise becomes Effective and all necessary statutory or
regulatory obligations in any jurisdiction having been complied with in all
material respects;
f) except as (i) publicly announced in accordance with the Listing Rules by Taylor
Woodrow or George Wimpey prior to 26 March 2007, (ii) disclosed in the annual
report and accounts of George Wimpey for the financial year ended 31 December
2006, (iii) disclosed in the annual report and accounts of Taylor Woodrow for the
financial year ended 31 December 2006, or (iv) fairly disclosed by or on behalf of
Taylor Woodrow or George Wimpey to the other prior to 26 March 2007, no member of
the wider George Wimpey Group having, since 31 December 2006, and no member of the
wider Taylor Woodrow Group having, since 31 December 2006:
(i) save as between Taylor Woodrow and wholly-owned subsidiaries of Taylor
Woodrow, or as between George Wimpey and wholly-owned subsidiaries of
George Wimpey, or for Taylor Woodrow Shares issued pursuant to the
exercise of options granted under the Taylor Woodrow Share Schemes, or for
George Wimpey Shares issued pursuant to the exercise of options granted
under the George Wimpey Share Schemes, issued, authorised or proposed the
issue of additional shares of any class;
(ii) save as between Taylor Woodrow and wholly-owned subsidiaries of Taylor
Woodrow, or as between George Wimpey and wholly-owned subsidiaries of
George Wimpey, or for the grant of options under the Taylor Woodrow Share
Schemes or the George Wimpey Share Schemes, issued or agreed to issue,
authorised or proposed the issue of securities convertible or exchangeable
into shares of any class or rights, warrants or options to subscribe for,
or acquire, any such shares or convertible securities;
(iii) other than to another member of the Taylor Woodrow Group or the George
Wimpey Group and save as provided for in respect of George Wimpey or
Taylor Woodrow in this announcement, recommended, declared, paid or made
or proposed to recommend, declare, pay or make any bonus, dividend or
other distribution whether payable in cash or otherwise;
(iv) save pursuant to the Merger and save for intra-Taylor Woodrow Group or
intra-George Wimpey Group transactions, merged or demerged with any body
corporate or acquired or disposed of or transferred, mortgaged or charged
or created any security interest over any assets or any right, title or
interest in any asset (including shares and trade investments) or
authorised or proposed or announced any intention to propose any merger,
demerger, acquisition or disposal, transfer, mortgage, charge or security
interest which, in any case, is not in the ordinary course of business and
is material in the context of the wider Taylor Woodrow Group taken as a
whole or the wider George Wimpey Group taken as a whole;
(v) save for intra-Taylor Woodrow Group or intra-George Wimpey Group
transactions, made or authorised or proposed or announced an intention to
propose any change in its loan capital;
(vi) issued, authorised or proposed the issue of any debentures or (save for
intra-Taylor Woodrow Group or intra-George Wimpey Group transactions),
save in the ordinary course of business, incurred or increased any
indebtedness or become subject to any guarantee or contingent liability,
which in any case is material in the context of the wider Taylor Woodrow
Group taken as a whole or the wider George Wimpey Group taken as a whole;
(vii) purchased, redeemed or repaid or announced any proposal to purchase,
redeem or repay any of its own shares or other securities or reduced or,
save in respect to the matters mentioned in sub-paragraph (i) above, made
any other change to any part of its share capital;
(viii) implemented, or authorised, proposed or announced its intention to
implement, any reconstruction, amalgamation, scheme, commitment or other
transaction or arrangement which, in any case, is not in the ordinary
course of business and is material in the context of the wider Taylor
Woodrow Group taken as a whole or the wider George Wimpey Group taken as a
whole, or entered into or changed the terms of any contract with any
director or senior executive;
(ix) entered into or varied or authorised, proposed or announced its intention
to enter into or vary any contract, transaction or commitment (whether in
respect of capital expenditure or otherwise) which is of a long term,
onerous or unusual nature or magnitude or which is or would be reasonably
likely to be materially restrictive on the businesses of the wider George
Wimpey Group or the wider Taylor Woodrow Group taken as a whole or which
involves or could involve an obligation of such a nature or magnitude or
which is other than in the ordinary course of business, and in each such
case is or would be reasonably likely to be material in the context of the
wider George Wimpey Group taken as a whole or the wider Taylor Woodrow
Group taken as a whole;
(x) (other than in respect of a member which is dormant and was solvent at the
relevant time) taken 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, administrative
receiver, administrator, trustee or similar officer of all or any of its
assets or revenues or any analogous proceedings in any jurisdiction or had
any such person appointed;
(xi) entered into any contract, transaction or arrangement which would be
restrictive on the business of any member of the wider George Wimpey Group
or the wider Taylor Woodrow Group other than to a nature and extent which
is normal in the context of the business concerned, to an extent which is
or would be reasonably likely to be material in the context of the wider
George Wimpey Group taken as a whole or wider Taylor Woodrow Group taken
as a whole;
(xii) waived or compromised any claim otherwise than in the ordinary course of
business and in any case which is or would be reasonably likely to be
material in the context of the wider Taylor Woodrow Group taken as a whole
or the wider George Wimpey Group taken as a whole; or
(xiii) entered into any contract, commitment, arrangement or agreement otherwise
than in the ordinary course of business or passed any resolution or made
any offer (which remains open for acceptance) with respect to or announced
any intention to, or to propose to, effect any of the transactions,
matters or events referred to in this condition;
g) since 31 December 2006 and save as disclosed in the accounts for the year then
ended in each case and save as publicly announced in accordance with the Listing
Rules by Taylor Woodrow or George Wimpey prior to 26 March 2007 or as fairly
disclosed by or on behalf of Taylor Woodrow or George Wimpey to the other prior to
26 March 2007:
(i) no material adverse change or deterioration having occurred in the
business, assets, financial or trading position or profits of the wider
Taylor Woodrow Group or the wider George Wimpey Group taken as a whole;
(ii) no litigation, arbitration proceedings, prosecution or other legal
proceedings to which any member of the wider Taylor Woodrow Group or the
wider George Wimpey Group is or may become a party (whether as a
plaintiff, defendant or otherwise) and no investigation by any Third Party
against or in respect of any member of the wider Taylor Woodrow Group or
the wider George Wimpey Group having been instituted, announced or
threatened by or against or remaining outstanding in respect of any member
of the wider Taylor Woodrow or the wider George Wimpey Group which in any
such case would have or would reasonably be expected to have a material
adverse effect on the wider Taylor Woodrow Group or the wider George
Wimpey Group as a whole;
(iii) no contingent or other liability having arisen which would have or would
reasonably be expected to have a material adverse effect on the wider
Taylor Woodrow Group or the wider George Wimpey Group as a whole;
(iv) no steps having been taken which are likely to result in the withdrawal,
cancellation, termination or modification of any licence held by any
member of the wider Taylor Woodrow Group or the wider George Wimpey Group
which is necessary for the proper carrying on of its business and the
absence of which in any case would have or would reasonably be expected to
have a material adverse effect on the wider Taylor Woodrow Group or the
wider George Wimpey Group as a whole;
h) save as (i) publicly announced in accordance with the Listing Rules by Taylor
Woodrow or George Wimpey prior to 26 March 2007, (ii) disclosed in the annual
report and accounts of George Wimpey for the financial year ended 31 December
2006, or (iii) disclosed in the annual report and accounts of Taylor Woodrow for
the financial year ended 31 December 2006, Taylor Woodrow not having discovered in
relation to the wider George Wimpey Group and George Wimpey not having discovered
in relation to the wider Taylor Woodrow Group:
i) that any financial, business or other information concerning the wider
Taylor Woodrow Group or the wider George Wimpey Group as contained in the
information publicly disclosed or disclosed to Taylor Woodrow at any time
by or on behalf of any member of the wider George Wimpey Group, or to
George Wimpey at any time by or on behalf of any member of the wider
Taylor Woodrow Group, is materially misleading, contains a material
misrepresentation of fact or omits to state a fact necessary to make that
information not materially misleading; or
ii) that any member of the wider Taylor Woodrow Group or the wider George
Wimpey Group is subject to any liability (contingent or otherwise which is
material in the context of the Taylor Woodrow Group or the George Wimpey
Group as a whole) which is not disclosed in the annual report and accounts
of George Wimpey for the year ended 31 December 2006 or of Taylor Woodrow
for the year ended 31 December 2006; and
i) Taylor Woodrow not having discovered in relation to the wider George Wimpey Group
and George Wimpey not having discovered in relation to the wider Taylor Woodrow
Group that:
i) any past or present member of the wider Taylor Woodrow Group or the wider
George Wimpey Group has failed to comply with any and/or all applicable
legislation or regulation, of any jurisdiction with regard to the
disposal, spillage, release, discharge, leak or emission of any waste or
hazardous substance or any substance likely to impair the environment or
harm human health or animal health or otherwise relating to environmental
matters, or that there has otherwise been any such disposal, spillage,
release, discharge, 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) any of which disposal,
spillage, release, discharge, leak or emission would be likely to give
rise to any liability (actual or contingent) on the part of any member of
the wider Taylor Woodrow Group or the wider George Wimpey Group and which
is material in the context of the wider Taylor Woodrow Group or the wider
George Wimpey Group as a whole; or
ii) there is, or is likely to be, for that or any other reason whatsoever, any
liability (actual or contingent) of any past or present member of the
wider Taylor Woodrow Group or the wider George Wimpey Group to make good,
repair, reinstate or clean up any property or any controlled waters now or
previously owned, occupied, operated or made use of or controlled by any
such past or present member of the wider Taylor Woodrow Group or the wider
George Wimpey Group, under any environmental legislation, regulation,
notice, circular or order of any government, governmental,
quasi-governmental, state or local government, supranational, statutory or
other regulatory body, agency, court, association or any other person or
body in any jurisdiction and which is material in the context of the wider
Taylor Woodrow Group or the wider George Wimpey Group as a whole.
4 For the purposes of these conditions the "wider George Wimpey Group" means George Wimpey
and its subsidiary undertakings, associated undertakings and any other undertaking in
which George Wimpey and/or such undertakings (aggregating their interests) have a
significant interest and the "wider Taylor Woodrow Group" means Taylor Woodrow and its
subsidiary undertakings, associated undertakings and any other undertaking in which
Taylor Woodrow and/or such undertakings (aggregating their interests) have a significant
interest and for these purposes "subsidiary undertaking", "associated undertaking" and "
undertaking" have the meanings given by the Companies Act, other than paragraph 20(1)(b)
of Schedule 4A to that Act which shall be excluded for this purpose, and "significant
interest" means a direct or indirect interest in ten per cent. or more of the equity
share capital (as defined in that Act).
5 Subject to the requirements of the Panel in accordance with the City Code:
a) Taylor Woodrow reserves the right to waive, in whole or in part, all or any of the
above conditions, except conditions 1, 2 and 3(b), so far as they relate to George
Wimpey, the wider George Wimpey Group, or any part thereof; and
b) George Wimpey reserves the right to waive, in whole or in part, all or any of the
above conditions, except conditions 1, 2 and 3(b), so far as they relate to Taylor
Woodrow, the wider Taylor Woodrow Group, or any part thereof.
PART B
Certain further terms of the Merger
1 If Taylor Woodrow is required by the Panel to make an offer for George Wimpey Shares
under the provisions of Rule 9 of the City Code, Taylor Woodrow may make such alterations
to any of the above conditions as are necessary to comply with the provisions of that
Rule.
2 Taylor Woodrow and George Wimpey may decide to implement the Merger by way of an Offer.
In such event, the Merger will be implemented on the same terms (subject to appropriate
amendments including (without limitation) an acceptance condition set at 90 per cent. of
the shares to which the Merger relates or such other percentage as may be required by the
Panel and subject to availability of an exemption from the registration requirements of
the US Securities Act and such amendments that Taylor Woodrow deems necessary or
appropriate in respect of US Securities laws), so far as applicable, as those which would
apply to the implementation of the Merger by means of the Scheme.
3 The Merger will not proceed if, after the date of this announcement and before the George
Wimpey Extraordinary General Meeting, the Merger is referred to the Competition
Commission.
4 The Merger will be governed by English law and be subject to the jurisdiction of the
English courts, and to the Conditions set out in this announcement and in the formal
Scheme Document.
5 This announcement is not an offer of securities for sale in the United States and the New
Taylor Woodrow Shares, which will be issued in connection with the Merger, have not been,
and will not be, registered under the US Securities Act or under the securities law of
any state, district or other jurisdiction of the United States, Australia, Canada or
Japan and no regulatory clearance in respect of the New Taylor Woodrow Shares has been,
or will be, applied for in any jurisdiction other than the UK. The New Taylor Woodrow
Shares may not be offered or sold in the United States absent registration under the US
Securities Act or an exemption from registration. It is expected that the New Taylor
Woodrow shares will be issued in reliance upon the exemption from the registration
requirements of the US Securities Act provided by Section 3(a)(10) thereof. Under
applicable US securities laws, persons (whether or not US persons) who are or will be "
affiliates" (for the purposes of the US Securities Act) of Taylor Woodrow or George
Wimpey prior to, or of Taylor Woodrow after, the Effective Date will be subject to
certain transfer restrictions relating to the New Taylor Woodrow Shares received in
connection with the Merger.
APPENDIX 2
BASES AND SOURCES AND ADDITIONAL FINANCIAL AND OPERATIONAL INFORMATION
1 Unless otherwise stated:
* financial information relating to Taylor Woodrow has been extracted or provided
(without material adjustment) from the audited annual report and accounts for
Taylor Woodrow for the year ended 31 December 2006 reported under IFRS; and
* financial information relating to George Wimpey has been extracted or provided
(without material adjustment) from the audited annual report and accounts for
George Wimpey for the year ended 31 December 2006 reported under IFRS.
2 For the purposes of this announcement, pro forma numbers represent the sum of Taylor
Woodrow's and George Wimpey's reported figures for the year ended 31 December 2006
3 Landbank, strategic landbank plot and completion shall have the meanings ascribed to them
in each individual company's 2006 audited annual report and accounts
4 As at the close of business on 23 March 2007, Taylor Woodrow had in issue 581,917,049
ordinary shares of 25 pence each; and George Wimpey had in issue 400,963,763 ordinary
shares of 25 pence each. The International Securities Identification Number for Taylor
Woodrow Shares is GB0008782301 and for George Wimpey Shares is GB0009713446.
5 Pro forma annual revenues of #6,719.5 million for the Combined Group are calculated based
upon the following:
* by reference to Taylor Woodrow's reported annual revenues of #3,572.1 million
(excluding joint ventures) in 2006
* by reference to George Wimpey's reported annual revenues of #3,147.4 million
(excluding joint ventures) in 2006
6 Pro forma annual UK housing completions of 21,910 for the Combined Group are calculated
based upon the following:
* by reference to Taylor Woodrow's reported annual UK housing completions of 8,294 in
2006
* by reference to George Wimpey's reported annual UK housing completions of 13,616 in
2006
7 Pro forma annual North American housing completions of 8,839 for the Combined Group are
calculated based upon the following:
* by reference to Taylor Woodrow's reported annual North American housing completions
of 4,492 in 2006
* by reference to George Wimpey's reported annual North American housing completions
of 4,347 in 2006
8 The combined market capitalisation of #4,993 million is calculated:
* by reference to Taylor Woodrow's market capitalisation of #2,447 million, based on
a price of 420.5 pence per Taylor Woodrow Share (being the Closing Price on 23
March 2007, the last Business Day prior to this announcement) and 581,917,049
ordinary shares outstanding; and
* by reference to George Wimpey's market capitalisation of #2,546 million, based on a
price of 635.0 pence per George Wimpey Share (being the Closing Price on 23 March
2007, the last Business Day prior to this announcement) and 400,963,763 ordinary
shares outstanding; and
9 Pro forma UK landbank of 92,826 plots for the Combined Group as at 31 December 2006 is
calculated based upon the following:
* by reference to Taylor Woodrow's reported UK landbank of 34,827 plots as at 31
December 2006
* by reference to Taylor Woodrow's reported UK landbank of 57,999 plots as at 31
December 2006
10 Pro forma cost savings for the Combined Group are calculated based upon the following:
* by reference to George Wimpey's statement in their 2006 audited annual report and
accounts, referring to #25 million cost savings in the UK business and US$20
million in the US business for 2007
ADDITIONAL FINANCIAL INFORMATION FOR THE YEAR ENDED 31 DECEMBER 2006
(#m) Taylor Woodrow George Wimpey Pro forma
Profit and loss
Revenue 3,572 3,147 6,719
Operating profit 470 423 893
Operating margin 13% 13% 13%
PBT (pre-exceptional) 406 371 777
PAT (pre-exceptional) 291 256 547
Balance sheet
Land 1,857 2,340 4,197
Inventories (excl. land) 1,089 800 1,889
Land payables 373 607 980
Net debt 391 387 778
Shareholders equity 2,106 1,707 3,813
Segmental analysis
Revenue
UK 1,759 2,391 4,150
North America 1,170 756 1,926
Spain & Gibraltar 92 0 92
Construction 551 0 551
Total 3,572 3,147 6,719
Operating profit
UK 215 309 1 525
North America 220 114 1 334
Spain & Gibraltar 26 0 26
Construction 8 0 8
Total 470 423 893
Source: 2006 audited annual reports and accounts of Taylor Woodrow and George
Wimpey
Notes:
1. Operating profit pre-exceptionals, including share of joint ventures and
corporate costs, pro rated on UK/North America split of operating profit
pre-exceptionals
Taylor Woodrow George Wimpey
Build costs as a % of revenue 55.5 51.4
Land costs as a % of revenue 24.3 28.0 1
Overhead costs per completion #10.2k #8.3k 2
Source: Presentation of 2006 full year results of Taylor Woodrow, presentation
of preliminary results for year ended 31 December 2006 of George Wimpey, Taylor
Woodrow management for the build cost as a % of revenue and for the overhead
costs per completion
Notes:
1 Calculated as the reported cost per plot for UK housing completions divided by
the reported total ASP for UK housing for the year ended 31 December 2006
2 Calculated as the reported overhead cost for UK housing divided by the
reported number of UK completions for the year ended 31 December 2006
ADDITIONAL OPERATIONAL INFORMATION FOR THE YEAR ENDED 31 DECEMBER 2006
Taylor Woodrow George Wimpey Pro forma
North American landbank
(plots)
Owned 19,905 11,961 31,866
Controlled 11,448 6,7761 18,224
Total 31,353 18,737 50,090
Years 4.4 4.3 4.4
Sources: Presentation of 2006 full year results of Taylor Woodrow, presentation
of preliminary results for year ended 31 December 2006 of George Wimpey, George
Wimpey management for the breakdown between owned and controlled land
Note:
1. Includes optioned land
Taylor Woodrow George Wimpey Pro forma
UK landbank (plots)
Short term land 6,876 34,900 41,776
Medium term land 13,345 13,433 26,778
Long term land 14,606 9,666 24,272
Landbank length (years) 4.2 4.3 1 4.2
Average plot cost (#'000s) 38.0 47.3 43.4
Strategic land (acres) 18,000 15,846 33,846
Sources: 2006 audited annual reports and accounts of Taylor Woodrow and George
Wimpey, presentation of 2006 full year results of Taylor Woodrow, presentation
of preliminary results for year ended 31 December 2006 of George Wimpey, Taylor
Woodrow management for the breakdown between short term, medium term, and long
term land
Note:
1. Calculated as the reported number of plots of the UK landbank divided by the
reported number of UK completions for the year ended 31 December 2006
North American completions Taylor Woodrow Morrison Homes Pro forma housing Taylor Woodrow
Homes completions Lots
Florida 835 1,632 2,467 499
Arizona 1,245 569 1,814 1,171
Texas 280 1,266 1,546 306
California 540 587 1,127 156
Canada 1,592 0 1,592 508
Other 0 293 293 0
Total 4,492 4,347 8,839 2,640
Sources: Presentation of 2006 full year results of Taylor Woodrow, George Wimpey
management for the Morrison Homes data
APPENDIX 3
DEFINITIONS
In this announcement, the following definitions apply unless the context
requires otherwise:
"Admission" the admission of the New Taylor Woodrow Shares to the
Official List, in accordance with the Listing Rules,
and the admission of the New Taylor Woodrow Shares to
trading on the London Stock Exchange's main market for
listed securities in accordance with the Admission and
Disclosure Standards
"Australia" the Commonwealth of Australia and its dependant
territories
"Business Day" a day (other than a Saturday or Sunday or public
holiday) on which banks are open for business in London
"Canada" Canada, its provinces and territories and all areas
subject to its jurisdiction or any political
sub-division thereof
"Capital Reduction" the proposed reduction of George Wimpey's share capital
in connection with the Merger under section 135 of the
Companies Act
"City Code" the City Code on Takeovers and Mergers
"Closing Price" the closing middle market price of a relevant share as
derived from SEDOL on any particular day
"Combined Group" with effect from the Effective Date, the Taylor Woodrow
Group (including the George Wimpey Group)
"Companies Act" or the "Act" the Companies Act 1985 (as amended)
"Conditions" the conditions to the Merger set out in Appendix 1 to
this announcement
"Court" the High Court of Justice in England and Wales
"Court Hearings" the two hearings by the Court of the petition to
sanction the Scheme and to confirm the cancellation and
extinguishment of the Scheme Shares provided by the
Scheme under section 137 of the Companies Act
"Court Orders" the First Court Order and the Second Court Order
"Effective" (i) if the Merger is implemented by way of the
Scheme, the Scheme having become effective
pursuant to its terms; or
(ii) if the Merger is implemented by way of an Offer,
such Offer having been declared or become
unconditional in all respects in accordance with
the requirements of the City Code
"Effective Date" the date on which the Merger becomes Effective
"Exchange Ratio" the ratio pursuant to which the exact number of New
Taylor Woodrow Shares to be issued in respect of each
George Wimpey Share is determined so as to provide
George Wimpey Shareholders, in aggregate
and on a fully diluted basis, with 49 per cent. of the
issued share capital of Taylor Woodrow, such ratio to
be calculated by reference to the issued share capital
of Taylor Woodrow immediately prior to the posting of
the Scheme Document, or the Offer Document, if the
Merger is implemented by way of the Offer
"First Court Order" the order of the Court sanctioning the Scheme under
section 425 of the Companies Act
"George Wimpey" George Wimpey Plc
"George Wimpey Extraordinary General Meeting the extraordinary general meeting of George Wimpey
" Shareholders to be convened for the purposes of
considering and, if thought fit, approving certain
resolutions required to implement the Scheme
"George Wimpey Group" George Wimpey, its subsidiaries and subsidiary
undertakings
"George Wimpey Shareholders" the holders of George Wimpey Shares
"George Wimpey Shares" the ordinary shares of 25 pence each in the capital of
George Wimpey
"George Wimpey Share Schemes" the Employee Share Schemes operated by George Wimpey,
including the Long Term Share Incentive Plan, the
George Wimpey 2002 Savings Related Share Option Scheme,
the George Wimpey 2002 Executive Share Option Plan and
the George Wimpey 2007 Executive Incentive Scheme
"Hoare Govett" Hoare Govett Limited
"Independent Competing Transaction" (a) a proposed offer, merger,
acquisition, scheme of arrangement, recapitalisation or
other business combination involving the possible
change of control of George Wimpey or Taylor Woodrow
which, if accepted in full would result in the offeror
holding shares carrying over 50 per cent. of the voting
rights of George Wimpey or Taylor Woodrow, as the case
may be, and which is made by or with a party which is
not acting in concert with George Wimpey or Taylor
Woodrow;
(b) an offer, proposal or approach from
any party to acquire all or a substantial part of its
share capital or a substantial part of value of its
assets or of any material member of its Group; or
(c) an offer, proposal or approach from
any party with a view to undertaking a transaction
which would be an alternative to the Merger
Japan, its cities, prefectures, territories and
possessions
"Japan"
"JPMorgan Cazenove" JPMorgan Cazenove Limited
"Listing Rules" the rules and regulations of the UKLA, as amended from
time to time and contained in the UKLA's publication of
the same name
"London Stock Exchange" London Stock Exchange plc
"Long Stop Date" the date falling 120 days after the date on which the
Scheme Document is posted (or such later time or date
as Taylor Woodrow and George Wimpey may agree, with the
approval of the Court and/or the Panel if required)
"Merger" the merger of George Wimpey and Taylor Woodrow to be
implemented by way of scheme of arrangement pursuant to
section 425 of the Companies Act or, if so agreed
between Taylor Woodrow and George Wimpey, by an Offer,
and where the context so permits references to an offer
shall mean whether made by way of scheme of arrangement
or an Offer
"Morgan Stanley" Morgan Stanley & Co. Limited
"New Taylor Woodrow Shares" the Taylor Woodrow Shares proposed to be issued,
credited as fully paid up pursuant to the Merger
"Offer" a takeover offer as that term is defined in paragraph 1
(1) of Schedule 2 of the Takeovers Directive (Interim
Implementation) Regulations 2006 or section 974 of the
Companies Act 2006 when it comes into force to replace
paragraph 1(1) of Schedule 2 of the Takeovers Directive
(Interim Implementation) Regulations 2006
"Offer Document" should Taylor Woodrow and George Wimpey decide to
implement the Merger by way an Offer, the document
which would be despatched by Taylor Woodrow to the
George Wimpey Shareholders with respect to such Offer
"Official List" the official list of the UKLA
"Panel" the Panel on Takeovers and Mergers
"pence" and "#" the lawful currency of the United Kingdom
"Prospectus" the prospectus to be published by Taylor Woodrow in
respect of the Admission
"Registrar of Companies" the Registrar of Companies in England and Wales, within
the meaning of the Companies Act
"Scheme" the proposed scheme of arrangement of George Wimpey
under section 425 of the Companies Act to implement the
Merger
"Scheme Document" the document to be dispatched to George Wimpey
Shareholders in relation to the Scheme comprising the
particulars required by section 426 of the Companies
Act
"Scheme Meeting" the meeting of the Scheme Shareholders to be convened
by an order of the Court under section 425 of the
Companies Act to consider and, if thought fit, approve
the Scheme (with or without amendment) and any
adjournment thereof
"Scheme Shareholders" the holders of Scheme Shares
"Scheme Shares" (a) the existing unconditionally issued George
Wimpey Shares at the date of the Scheme Document;
(b) any further George Wimpey Shares which are
unconditionally issued after the date of the Scheme
Document but before the Scheme Voting Record Time; and
(c) any George Wimpey Shares issued at or after
the Scheme Voting Record Time and before 6.00 p.m. on
the day before the date on which the Second Court Order
is made confirming the Capital Reduction in respect of
which the original or any subsequent holders thereof
are, or shall have agreed in writing to be, bound by
the Scheme;
in each case other than any George Wimpey Shares
beneficially owned by Taylor Woodrow
"Scheme Voting Record Time" 6.00 p.m. on the day which is two days before the
Scheme Meeting or, if the Scheme Meeting is adjourned,
6.00 p.m. on the second day before the date of such
adjourned meeting
"Second Court Order" the order of the Court confirming the Capital Reduction
"SEDOL" the London Stock Exchange Daily Official List
"subsidiary", "subsidiary undertaking", " have the meanings ascribed to them under the Companies
associated undertaking" and "undertaking" Act
"Taylor Wimpey" Taylor Woodrow following its change of name on the
Effective Date to Taylor Wimpey plc
"Taylor Woodrow" Taylor Woodrow plc
"Taylor Woodrow Extraordinary General the extraordinary general meeting of Taylor Woodrow
Meeting" Shareholders to consider and, if thought fit, to
approve the Merger and to pass certain other
resolutions in connection with the Merger
"Taylor Woodrow Group" Taylor Woodrow, its subsidiaries and subsidiary
undertakings
"Taylor Woodrow Shareholders" the holders of Taylor Woodrow Shares
"Taylor Woodrow Shareholder Circular" the circular to be dispatched to Taylor Woodrow
Shareholders outlining the Merger and containing the
notice convening the Taylor Woodrow Extraordinary
General Meeting
"Taylor Woodrow Shares" ordinary shares of 25 pence each in the capital of
Taylor Woodrow
"Taylor Woodrow Share Schemes" the Employee Share Schemes operated by Taylor Woodrow
including the Taylor Woodrow 2004 Deferred Bonus Plan,
the Taylor Woodrow 2004 Performance Share Plan, the
Taylor Woodrow 2004 Savings-Related Share Option Plan,
the Taylor Woodrow 2004 Share Incentive Plan, the
Taylor Woodrow Stock Purchase Plan and the Taylor
Woodrow Canadian Employee Stock Purchase Plan
"UBS" or "UBS Investment Bank" UBS Limited
"UK Listing Authority" or "UKLA" means the Financial Services Authority in the UK acting
in its capacity as the competent authority for the
purposes of Part VI of the Financial Services and
Markets Act 2000
"US" or "United States" the United States of America, its territories and
possessions, any state in the United States of America
and the District of Columbia
"US Securities Act" the United States Securities Act of 1933 (as amended)
Unless otherwise stated, all times referred to in this announcement are
references to London time.
Any reference to any provision of any legislation shall include any amendment,
modification, re-enactment or extension thereof.
APPENDIX 4
SCHEDULE OF IRREVOCABLE UNDERTAKINGS
Taylor Woodrow
Name of Taylor Woodrow Director Number of Taylor Percentage of
Woodrow Shares Taylor Woodrow
issued share
capital
Norman Askew 9,974 0.002%
Peter Johnson 94,407 0.024%
Mike Davies 5,000 0.001%
Andrew Dougal 5,000 0.001%
Katherine Ker 1,000 0.000%
Vernon Sankey 10,778 0.003%
Total 126,159 0.031%
George Wimpey
Name of George Wimpey Director Number of George Percentage of
Wimpey Shares George Wimpey
issued share
capital
John Robinson 29,770 0.007%
Peter Redfern 41,344 0.010%
Andrew Carr-Locke 200,000 0.050%
David Williams 5,808 0.001%
Christine Cross 5,847 0.001%
Brenda Dean 6,000 0.001%
Anthony Reading 10,139 0.003%
Robert Sharpe 1,200 0.000%
Total 300,108 0.075%
--------------------------
This information is provided by RNS
The company news service from the London Stock Exchange
END
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