RNS Number:5774X
Taylor Woodrow PLC
22 January 2001
PART 1
Not for release, publication or distribution in or into the
United States of America, Canada, Australia or Japan
Taylor Woodrow plc
Recommended cash and share offer for
Bryant Group plc
Summary
- The boards of Taylor Woodrow and Bryant announce that they
have agreed the terms of a recommended cash and share
offer to be made by ABN AMRO Corporate Finance on behalf
of Taylor Woodrow for the entire issued and to be issued
share capital of Bryant.
- Under the terms of the Offer, Bryant Shareholders will
receive 80 pence in cash and 0.72 New Taylor Woodrow
Shares for each Bryant Share. A Mix and Match Election
will also be available.
- The Offer values each Bryant share at 207.4 pence(1) and
represents a premium of 26.9 per cent. over the closing
middle market price of 163.5 pence on 10th January, 2001,
the day before Taylor Woodrow announced its approach to
the board of Bryant. It values Bryant at approximately
#556 million.
- Following completion of the Offer, Taylor Woodrow will
give consideration to a share buy-back programme of #50
million during 2002 and #50 million during 2003.
- The Offer will strengthen the resource base and market
position of both companies' house building businesses to
create a leading player in the UK housing market. The
combined group would create the UK's fifth largest
housebuilder producing some 6,000 homes a year and with
turnover of approximately #845 million.
- The acquisition of Bryant fits with Taylor Woodrow's
stated strategy of expanding its presence in the UK
housing market and, on the basis of public information
available to it, the board of Taylor Woodrow considers
that cost savings and margin improvements in the range of
#10-#15 million per annum are achievable.
- The directors of Bryant have indicated that they will
provide irrevocable undertakings to accept the Offer in
respect of their own beneficial holdings, amounting, in
aggregate, to 547,426 Bryant Shares representing
approximately 0.2 per cent. of Bryant's existing issued
share capital.
- Bryant Shareholders will retain the right to the interim
dividend of 1.8 pence per Bryant Share declared on 14th
December, 2000 to Bryant Shareholders on the register on
8th January, 2001 and will receive all future dividends
declared by Taylor Woodrow.
- Due to its size, the Offer will be conditional on, inter
alia, the approval of Taylor Woodrow Shareholders at an
Extraordinary General Meeting.
- In view of its recommendation, the board of Bryant will be
proposing the adjournment of the Extraordinary General
Meeting previously adjourned to Friday, 26th January, 2001
without proposing the resolutions to approve the merger
with Beazer.
(1) Based on the closing price of 177 pence per Taylor Woodrow
Share on 19th January, 2001, the last dealing date prior
to this announcement.
Commenting on the Offer, Dr. Robert Hawley, Taylor Woodrow's Chairman, said:
"The addition of Bryant is an excellent strategic fit and significantly
accelerates the development of Taylor Woodrow's UK housing business. Together
we will create a leading UK housebuilder with a philosophy focused on
delivering high standards of customer service and value.
"The combination of our businesses will further strengthen the Taylor Woodrow
Group adding considerable weight to our UK housing business and balancing our
North American housing activities. There is also the benefit of Taylor
Woodrow's complementary skills in property development, engineering and
advanced design."
Commenting on the Offer, Mr. Hubert Reid, Bryant's Chairman, said:
"The board of Bryant has long believed that shareholders in the housebuilding
sector would benefit from the opportunities provided by consolidation. We also
strongly believe in the need to improve quality and productivity in the
industry which was the vision behind the creation of Domus. However, the
board of Bryant has been wholly committed to the maximisation of shareholder
value and Taylor Woodrow's latest offer now represents both superior value for
our shareholders and a further opportunity to pursue improvements in quality
and productivity; which fundamental objectives remain in place. We are
therefore unanimously recommending acceptance."
ABN AMRO Corporate Finance is acting as financial adviser to Taylor Woodrow
and Hoare Govett is acting as corporate broker. Rothschild is acting as
financial adviser to Bryant and UBS Warburg is acting as corporate broker.
The financing of the cash element of the Offer has been arranged by HSBC Bank
plc.
A conference for analysts will take place today at 9.00 a.m. at the offices of
ABN AMRO at 250 Bishopsgate, London EC2M 4AA.
This summary should be read in conjunction with the full text of the following
announcement.
Press enquiries:
Taylor Woodrow plc Tony McGarahan 07796 276342
ABN AMRO Corporate Finance Christopher Hill 020 7678 8000
Hoare Govett Peter Meinertzhagen 020 7678 8000
Citigate Dewe Rogerson Martin Jackson 020 7638 9571
Bryant Group plc Peter Long 07785 728031
Rothschild Nigel Higgins 020 7280 5000
Robert Leitao
Alex Midgen
Financial Dynamics Scott Fulton 07788 144 993
The Offer will not be made, directly or indirectly, in or into, or by the use
of mails or any means or instrumentality (including, without limitation,
telephonically or electronically) of interstate or foreign commerce of, or any
facility of a national securities exchange of, the United States of America,
Canada, Australia or Japan and the Offer will not be capable of acceptance by
any such use, means, instrumentality or facilities from within the United
States of America, Canada, Australia or Japan.
Accordingly, copies of this announcement are not being, and must not be,
mailed or otherwise forwarded, distributed or sent in or into or from the
United States of America, Canada, Australia or Japan and persons receiving
this announcement (including custodians, nominees and trustees) must not mail
or otherwise forward, distribute or send it into or from the United States of
America, Canada, Australia or Japan. Doing so may render invalid any
purported acceptance.
The availability of the Offer to persons who are not resident in the United
Kingdom may be affected by the laws of the relevant jurisdictions. Persons who
are not resident in the United Kingdom should inform themselves about and
observe any applicable requirements.
The New Taylor Woodrow Shares have not been, nor will they be, registered
under the Securities Act or under the securities laws of any jurisdiction of
the United States, the relevant clearances have not been, and will not be,
obtained from the securities commission of any province of Canada, no
prospectus has been lodged with, or registered by, the Australian Securities
and Investments Commission or the Japanese Ministry of Finance and the New
Taylor Woodrow Shares have not been, nor will they be, registered under or
offered in compliance with applicable securities laws of any state, province,
territory or jurisdiction of Canada, Australia or Japan. Accordingly the New
Taylor Woodrow Shares may not (unless an exemption under relevant securities
laws is applicable) be offered, sold, resold or delivered, directly or
indirectly, in or into the United States, Canada, Australia or Japan or any
other jurisdiction if to do so would constitute a violation of the relevant
laws of, or require registration thereof in, such jurisdiction or to, or for
the account or benefit of, a Restricted Overseas Person.
ABN AMRO Corporate Finance, which is regulated in the United Kingdom by The
Securities and Futures Authority Limited, is acting for Taylor Woodrow and no-
one else in connection with the Offer and will not be responsible to anyone
other than Taylor Woodrow for providing the protections afforded to customers
of ABN AMRO Corporate Finance nor for giving advice in relation to the Offer.
Hoare Govett, which is regulated in the United Kingdom by The Securities and
Futures Authority Limited, is acting for Taylor Woodrow and no-one else in
connection with the Offer and will not be responsible to anyone other than
Taylor Woodrow for providing the protections afforded to customers of Hoare
Govett nor for giving advice in relation to the Offer.
Rothschild, which is regulated in the United Kingdom by The Securities and
Futures Authority Limited, is acting for Bryant and no-one else in connection
with the Offer and will not be responsible to anyone other than Bryant for
providing the protections afforded to customers of Rothschild nor for giving
advice in relation to the Offer.
UBS Warburg, which is regulated in the United Kingdom by The Securities and
Futures Authority Limited, is acting for Bryant and no-one else in connection
with the Offer and will not be responsible to anyone other than Bryant for
providing the protections afforded to customers of UBS Warburg nor for giving
advice in relation to the Offer.
This announcement does not constitute an offer or an invitation to purchase
any securities.
22nd January, 2001
Not for release, publication or distribution in or into the
United States of America, Canada, Australia or Japan
Taylor Woodrow plc
Recommended cash and share offer for
Bryant Group plc
1. INTRODUCTION
The boards of Taylor Woodrow and Bryant announce that they have agreed the
terms of a recommended cash and share offer to be made by ABN AMRO Corporate
Finance on behalf of Taylor Woodrow for the entire issued and to be issued
share capital of Bryant.
The directors of Bryant, who have been so advised by Rothschild, consider the
terms of the Offer to be fair and reasonable and the directors of Bryant also
consider the Offer to be in the best interests of shareholders. Accordingly,
the directors of Bryant intend unanimously to recommend all Bryant
Shareholders to accept the Offer. In providing its advice to the directors of
Bryant, Rothschild has taken into account the commercial assessments of the
directors of Bryant.
The directors of Bryant have indicated that they will provide irrevocable
undertakings to accept the Offer in respect of their own beneficial holdings,
amounting, in aggregate, to 547,426 Bryant Shares representing approximately
0.2 per cent. of Bryant's existing issued share capital.
Due to its size, the Offer will be conditional on, inter alia, the approval of
Taylor Woodrow Shareholders at an Extraordinary General Meeting.
2. THE OFFER
The Offer, which will be subject, inter alia, to the conditions and further
terms summarised below and set out in Appendix I and to be set out in full in
the Offer Document and the accompanying Form of Acceptance, will be made on
the following basis:
for each Bryant Share 80 pence in cash
and
0.72 New Taylor Woodrow Shares
and so in proportion for any other number of Bryant Shares held.
Bryant Shareholders will retain the right to the interim dividend of 1.8 pence
per Bryant Share declared on 14th December, 2000 to Bryant Shareholders on the
register on 8th January, 2001. The special dividend of 5.6 pence per Bryant
Share dependent on completion of the merger with Beazer will not be paid.
Following completion of the Offer, Taylor Woodrow will give consideration to a
share buy-back programme of #50 million during 2002 and #50 million during
2003.
A Mix and Match Election will be made available under which Bryant
Shareholders may elect, subject to availability, to vary the proportions in
which they receive New Taylor Woodrow Shares and cash in respect of their
holdings in Bryant.
Based on the closing price of 177 pence per Taylor Woodrow Share on 19th
January, 2001, the last dealing date prior to this announcement, the Offer
values each Bryant Share at 207.4 pence, and the entire existing issued share
capital of Bryant at approximately #556 million. This represents a premium of
8.0 per cent. over the closing price of 192 pence per Bryant Share on 19th
January, 2001 and a premium of 26.9 per cent. over the closing price of 163.5
pence per Bryant Share on 10th January, 2001, the date before Taylor Woodrow
announced that it had approached the board of Bryant. Further details of the
financial effects of acceptance of the Offer are set out in Appendix II.
Bryant Shares will be acquired by Taylor Woodrow fully paid and free from all
liens, charges, equities, equitable interests, encumbrances and other third
party rights and interests of any nature whatsoever, and together with all
rights now and hereafter attaching thereto, including the right to receive and
retain in full all dividends and other distributions declared, made or paid
after the date of this announcement, other than the interim dividend of 1.8
pence per Bryant Share declared on 14th December, 2000 to Bryant Shareholders
on the register on 8th January, 2001.
The New Taylor Woodrow Shares to be issued in connection with the Offer will
be issued credited as fully paid and will rank pari passu in all respects with
existing Taylor Woodrow Shares, together with the right to receive and retain
in full all dividends and other distributions declared, made or paid after the
date of this announcement.
Application 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 market for listed securities.
Fractions of New Taylor Woodrow Shares will not be allotted to Bryant
Shareholders and their entitlements will be rounded down to the nearest whole
number of New Taylor Woodrow Shares.
3. THE MIX AND MATCH ELECTION
Bryant Shareholders may elect under the terms of the Offer, subject to
availability, to vary the proportions in which they receive New Taylor Woodrow
Shares and cash consideration in respect of their holdings of Bryant Shares.
However, the total number of New Taylor Woodrow Shares to be issued under the
Offer will not be varied as a result of the Mix and Match Elections.
Accordingly, the satisfaction of the Mix and Match Elections will be dependent
upon the extent to which other Bryant Shareholders make offsetting elections.
To the extent that elections cannot be satisfied in full, they will be scaled
down on a pro rata basis.
As a result, Bryant Shareholders who make Mix and Match Elections will not
necessarily know the exact number of New Taylor Woodrow Shares or the amount
of cash they will receive until settlement of the consideration under the
Offer.
The Mix and Match Election will not affect the entitlements of those Bryant
Shareholders who do not make Mix and Match Elections.
4. Benefits of Taylor Woodrow's Offer
Taylor Woodrow's Offer delivers to Bryant Shareholders:
- a premium of 26.9 per cent over the closing middle market
price of 163.5 pence on 10th January, 2001, the day before
Taylor Woodrow announced its approach to the board of
Bryant. The Offer compares favourably with Bryant's
closing middle market price of 143 pence on 13th December,
2000, the day prior to the announcement of its proposed
merger with Beazer;
- a payment of 80 pence per share in cash now, plus
participation in possible #50 million buy-back programmes
in each of 2002 and 2003 which we have announced are under
consideration;
- an ongoing interest in a leading, diversified housebuilding
group whose activities span the UK and North America;
- the enlarged group will also have complementary skills in
property development and construction, engineering and
advanced design activities, which Taylor Woodrow believes
will be increasingly important to housebuilders in the
future; and
- a significant participation in the enlarged Taylor Woodrow
Group, capturing the benefits of the integration of Bryant
and the strength and diversity of its existing earnings
streams.
5. BRYANT'S FIT WITH TAYLOR WOODROW
Taylor Woodrow's strategy, as announced in March 2000, is to focus on housing
and property development as the core activities of the Group with a refocused
construction operation providing added value expertise and service in support
of the housebuilding activities. The UK housing business has been targeted as
the Group's major area for development with the aim of becoming a powerful
force in the sector. In the Taylor Woodrow interim results issued in
September 2000, Taywood Homes showed increased profits of 67 per cent.,
emphasising the benefits of increased focus and drive.
Bryant fits with Taylor Woodrow's strategy as it adds:
- a complementary geographical spread of premier sites;
- Proven land purchase and planning skills;
- A strong brand and well developed housing products; and
- respected management expertise.
This represents an excellent fit for Taylor Woodrow and accelerates its
development significantly. The combined group will be the fifth largest UK
housebuilder by volume with around 6,000 completions a year and pro forma
turnover of approximately #845 million. The complementary skills and resources
of the combined group will create a platform and infrastructure for growth and
provide considerable strategic, commercial and financial benefits to the
group.
TRULY NATIONAL SPREAD OF ACTIVITIES
Taylor Woodrow will have housebuilding operations of truly national scale and
presence through the combination of Bryant and its existing activities.
Taylor Woodrow's strength in London and the South East will complement
Bryant's strength in the Midlands, North and Scotland.
COMPLEMENTARY SKILLS
Taylor Woodrow attaches greatest value to Bryant's strengths in the family
housing market, its brand name and marketing skills. Taylor Woodrow will
adopt the Bryant name as the lead brand name for its UK housing operations.
Taylor Woodrow will add a number of its own skills. In North America, Taylor
Woodrow's housebuilding operations are driven by strong consumer demand for
tailor-made products and services. Taylor Woodrow will be able to accelerate
the transfer of this proven North American template into the UK, putting the
weight of its North American skills behind the Bryant brand name. In
addition, Taylor Woodrow Construction provides engineering, design and
technical expertise which will allow greater exploitation of complex
brownfield developments. Taylor Woodrow Property's development skills are of
significant value in developing mixed use schemes.
Taylor Woodrow also expects Bryant's construction business to be additive to
its own construction and property development activities.
PRODUCT MIX
Bryant's weighting towards the Midlands and the North will improve the
geographical balance and mix of the overall housing portfolio. The enlarged
Group's brownfield products will range from contemporary high rise inner city
residential schemes through to the refurbishment of complex Victorian
buildings, some of which will include mixed uses. The Bryant brand will have a
strengthened presence in the market in respect of those skills once it is
combined with Taywood Homes' portfolio.
STRATEGIC LAND ACTIVITIES
Both Taylor Woodrow and Bryant appreciate the importance of strategic land and
investing for a sustainable supply of future development opportunities.
Indeed, the two companies work together in consortium and many of the current
land interests are compatible. The enlarged group will be a major force in the
land and development market. Taylor Woodrow expects to be able to release
surplus capital and increase efficiency through the active management of the
land bank and the rationalisation of sites where overlaps exist.
SYNERGIES AND EARNINGS EFFECT
On the basis of public information available to it, the board of Taylor
Woodrow considers that cost savings and margin improvements in the range of
#10 - #15 million per annum are achievable. The transaction is expected to be
earnings enhancing (before accounting for goodwill and restructuring charges
but after the inclusion of synergies) in the first full year of operation.
This statement does not constitute a profit forecast nor should it be
interpreted to mean that earnings per share of Taylor Woodrow for the current
or future years will necessarily match or exceed the historical published
earnings per share of Taylor Woodrow or Bryant.
STRUCTURE OF THE ENLARGED UK HOUSING ACTIVITIES
The combined UK housing operations will be organised into three main regions
covering Northern & Scotland, Central and South East & West, subdivided into
operating areas. Each operating area will be a significant business in its
own right, targeting between #50 - #100 million in annual sales depending on
the location and site profiles. Taylor Woodrow believes this is at a level to
maintain quality standards and flexibility whilst controlling costs.
Taylor Woodrow believes that the management and employees of Bryant are
essential to the success of the business and expects them to make a
significant contribution to the integration process and operating management
structure going forward. Taylor Woodrow will consult fully with the Bryant
management team to test its assumptions underpinning its plans for the
integration of the businesses over the coming weeks. Given the relative sizes
of Taylor Woodrow's UK housing activities and Bryant, the integration will be
achieved with the minimum of upheaval and in the shortest time possible.
6. INFORMATION RELATING TO BRYANT
Bryant is one of Great Britain's leading housebuilders. It designs and builds
quality housing stock throughout Great Britain, focusing on the higher end of
the market, with three-, four- and five-bedroom houses dominating. Bryant also
undertakes a wide range of construction projects throughout Great Britain.
Summary financial information extracted, without material adjustment, from
Bryant's results for the years ended 31st May, 1998, 31st May, 1999 and 31st
May, 2000 is set out in the table below:
1998 1999 2000
Turnover #586m #638m #705m
Operating profit #63m #74m #96m
Profit before tax #53m #67m #90m
EPS (before 13.1p 16.0p 21.6p
exceptional items)
Net assets #285m #318m #363m
Number of unit 3,895 3,904 3,961
completions
7. INFORMATION RELATING TO TAYLOR WOODROW
Taylor Woodrow is an international leader in housing, property and value added
construction support. The Group has international housing activities in the
UK, US, Canada, Spain and Australia.
Summary financial information extracted, without material adjustment, from
Taylor Woodrow's results for the years ended 31st December, 1997, 31st
December, 1998 and 31st December, 1999 is set out in the table below:
1997 1998 1999
Turnover #1,296m #1,401m #1,504m
Operating profit #85m #110m #139m
Profit before tax #82m #100m #125m
EPS (before 14.2p 17.1p 21.3p
exceptional items)
Net assets #682m #753m #830m
Number of UK unit 1,691 1,885 2,013
completions
8. CURRENT TRADING AND PROSPECTS
Taylor Woodrow has had an excellent year in 2000. The order book is strong
reflecting the strategic changes that have been made to the company's
structure and operations. The directors of Taylor Woodrow believe that the
company is well positioned for continued growth and success in the years
ahead.
9. DIVID
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