RNS Number:8483S
White Young Green PLC
04 December 2003
For Immediate Release 4 December 2003
WHITE YOUNG GREEN Plc
PLACING AND OPEN OFFER
White Young Green Plc ("White Young Green" or "WYG"), consultants to the built
and natural environment today announces that it proposes to raise #6.25 million
(before expenses) by way of a placing with institutional investors and up to
#8.60 million (before expenses) by way of an open offer to Qualifying
Shareholders.
The Placing and the Open Offer is conditional upon Shareholder approval.
Rothschild is Sponsor and Financial Advisor to White Young Green. Williams de
Broe is Stockbroker to White Young Green.
Key highlights:
* Placing of 3,787,879 Ordinary Shares and Open Offer of up to 5,210,141
Ordinary Shares at 165 pence per share
- Placing of 3,787,879 Ordinary Shares at 165 pence per share to raise #6.25
million (before expenses)
- Open Offer of up to 5,210,141 Ordinary Shares at 165 pence per share to
Qualifying Shareholders to raise up to #8.60 million (before expenses)
- The Open Offer will allow existing Qualifying Shareholders to subscribe for
Open Offer Shares at the same price as the institutional investors who subscribe
under the Placing
- Qualifying Shareholders may apply for as many Open Offer Shares as they
wish (subject to scaling down if Qualifying Shareholders apply for more than
5,210,141 Open Offer Shares)
- The Placing is underwritten by Rothschild. The Open Offer will not be
underwritten
* Reasons for the fundraising
- To broaden the institutional shareholder base
- To support the future acquistion strategy of WYG - since 1997 White Young
Green has acquired 17 businesses for a total consideration of approximately
#18.8 million
- To reduce gearing in the short term
* Current trading & prospects
- Trading has started well with important contracts secured
- Increased workload and visibility of future earnings
- Since June 2003, the order book has increased to #144 million, a 37 per
cent increase on last year. This includes the appointment of WYG as strategic
alliance consultant to the Prison Service's 10 year, #3 billion capital
refurbishment programme
- The Board is satisfied with current trading and prospects remain in line
with its expectations
Commenting on the announcement today, Gareth Cooper, Non-Executive Chairman of
White Young Green said:
"We are pleased that the placing is being well supported by some new
institutional investors, which will widen our shareholder base. The fundraising
will help us to grow our business overall, reduce borrowing and position us to
invest in future growth opportunities in all key areas of our business."
For further information, please contact:
John Purvis, Managing Director
and Chief Executive (Designate) Tel: 0113 278 7111
Bob Hartley, Finance Director
WHITE YOUNG GREEN Plc
David Forbes / David Wilton Tel: 0113 200 1900
N M ROTHSCHILD & SONS LTD
Ian Stanway/Ross Andrews Tel: 0121 609 0050
WILLIAMS DE BROE Plc
Tim Anderson /Rebecca Skye Dietrich Tel: 020 7466 5000
BUCHANAN COMMUNICATIONS
N M Rothschild & Sons Limited, which is regulated in the United Kingdom by the
Financial Services Authority, is acting solely for WYG in relation to the
Placing and the Open Offer and no one else and will not be responsible to anyone
other than WYG for providing the protections offered to clients of N M
Rothschild & Sons Limited nor for providing advice in relation to the Placing
and the Open Offer.
INTRODUCTION
WYG announces a placing of 3,787,879 Ordinary Shares at 165 pence per share with
institutional investors to raise #6.25 million (before expenses) and an open
offer to be made by Rothschild (as agent for the Company) of up to 5,210,141
Ordinary Shares also at 165 pence per share to Qualifying Shareholders to raise
up to #8.60 million (before expenses). The Placing is fully underwritten by
Rothschild. The Open Offer will allow existing Qualifying Shareholders to
subscribe for Open Offer Shares at the same price as the institutional investors
who subscribe under the Placing. The Open Offer will not be underwritten. Open
Offer Shares representing entitlements that are not taken up under the Open
Offer will not be issued.
In view of their size, the Placing and the Open Offer will be conditional upon
the approval of Shareholders, which is to be sought at the Extraordinary General
Meeting, notice of which is set out in the document expected to be sent to
Shareholders today, and upon Admission.
The Placing Shares will be placed with new institutional investors in order to
broaden the shareholder base, as well as with a number of existing institutional
Shareholders who, as a result, are not expected to take up their full
entitlement under the Open Offer. The Open Offer will allow Qualifying
Shareholders who are not participating in the Placing to maintain, as far as
possible, their percentage shareholdings in the Company. However, Qualifying
Shareholders include vendors of previously acquired businesses and other
employee Shareholders who may not be in a position to take up their entitlements
under the Open Offer and for these reasons, the Board expects that a substantial
take up under the Open Offer is unlikely.
Qualifying Shareholders will be able apply for as many Open Offer Shares as are
subject of the Open Offer as they wish. Subject to the Open Offer becoming
unconditional in all respects, applications by Qualifying Shareholders will be
satisfied in full up to their pro rata basic entitlement of 1 Open Offer Share
for every 6 existing Ordinary Shares held at the Record Date rounded down to the
nearest whole number of Open Offer Shares. Applications by Qualifying
Shareholders in excess of their basic entitlements are subject to applications
by other Qualifying Shareholders being made for less than their basic
entitlements and may therefore be scaled down.
The net proceeds of the Placing and the Open Offer will be utilised to reduce
gearing in the short term and thereafter to support the future acquistion
strategy of WYG.
INFORMATION ON THE WYG GROUP
WYG is a leading UK consultant providing multi-disciplinary support services to
clients through the planning, creation and operation of their built and natural
assets. The WYG Group employs over 1,350 people and operates from a strategic
network of 19 offices which provide full geographic coverage of the major
regional business centres throughout the UK and Ireland. In addition, the Group
has an office in Oman.
For the year ended 30 June 2003, profit before taxation and goodwill
amortisation was #5.7 million (2002: #4.9 million) on turnover of #76.6 million
(2002: #64.0 million). The net assets of the WYG Group as at 30 June 2003 were
#32.6 million (2002: #26.7 million).
BACKGROUND AND REASONS FOR THE PLACING AND THE OPEN OFFER
Since the merger between Ernest Green and Partners Holdings plc and White Young
Consulting Group Limited in July 1997, WYG has successfully grown through a
combination of organic growth and growth by acquisition. In that time, WYG has
acquired a total of 17 businesses for a total consideration excluding costs of
approximately #18.8 million of which #5.6 million has been satisfied in cash or
loan notes. Aggregate goodwill relating to the businesses acquired was #17.7
million. The Directors believe that the Group's acquisition strategy has been an
important driver behind the growth in the Group's market capitalisation from
approximately #12.6 million on 21 July 1997 to #56.1 million on 3 December 2003
(being the last practicable date prior to this announcement).
All of the acquisitions made by WYG over the last six years have had a common
theme. It has been important to WYG that vendors, who were key managers of the
businesses acquired, have been retained within the businesses and motivated.
This has been achieved by vendors entering into employment agreements at
acquisition and also taking and retaining a significant proportion of their
consideration in the form of Ordinary Shares. Approximately #13.2 million of the
consideration referred to above has been satisfied by the issue of Ordinary
Shares to vendors.
Following these acquisitions and subsequent investment in organic growth, the
Group's balance sheet as at 30 June 2003 disclosed goodwill of #15.9 million and
net debt of #12.2 million, representing gearing of approximately 73 per cent. of
net tangible assets of #16.7 million.
The Group's acquistion strategy is to seek to acquire businesses that generate
incremental revenue growth and provide cost savings through increased
efficiency. The Group seeks to acquire businesses on an earnings enhancing basis
that can add value by:
* providing complementary skills that generate opportunities to cross sell
to existing WYG clients;
* providing opportunties to improve sector penetration in growth sectors;
* providing access to traditional blue chip clients not currently served by
WYG
* providing a skills balance in a particular region to enable the Group to
serve total project delivery appointments in that region; and
* enabling more efficient use of existing WYG resources
Consideration is usually payable as a mixture of Ordinary Shares and cash with
the objective of retaining and motivating the key management vendors.
The Board believes that there are a significant number of businesses that fit
closely with the Group's strategy and which are of sufficient size to generate
incremental shareholder value, but would not require shareholder approval to
acquire.
The Board is currently in discussions which may or may not lead to the
acquisition of a privately owned business which satisfies the acquisition
strategy criteria detailed above. If these discussions are successfully
concluded, this acquisition would not require the approval of Shareholders.
In addition, the Board is currently in early discussions with a number of other
potential acquisition targets but there is no certainty that these discussions
will be successfully concluded. The Company intends to continue to consider
larger acquisitions which may require shareholder approval to complete.
The Board believes that, whilst the Group can support its current level of net
debt, the Group would be better placed to make further acquisitions and to take
advantage of opportunities available by raising additional capital through the
issue of the New Ordinary Shares. The reduction in borrowings following the
Placing and the Open Offer will enable the Group to pursue actively its
acquisition strategy.
In addition, the Placing and the Open Offer is expected to increase the current
market capitalisation of the Company and the Placing is expected to broaden its
institutional shareholder base which the Board believes should further improve
the liquidity of its Ordinary Shares.
CURRENT TRADING AND PROSPECTS
The results for the year to 30 June 2003 were announced on 29 September 2003.
Trading in the current year has started well and the Board is encouraged by the
Group's prospects, with a number of important contracts secured which have
increased both ongoing workload and visibility of future earnings. These
contracts include the appointment of WYG as:
- a service provider to the Bovis Lend Lease and Babcock
Infrastructure Service consortium which has been appointed as the preferred
bidder on the South West Regional Prime Contract. Defence Estates has indicated
that the prime contract will last for at least seven years and its capital value
is in excess of #500 million.
- the Strategic Alliancing Consultant to the Prison Service for the
ten year refurbishment programme of Britain's entire prison estate. The
modernisation programme has a capital value of approximately #3 billion.
- consultant to two further NHS LIFT (Local Initiative Financial
Trust) Schemes in the North of England with an estimated capital value of #80
million; and
- joint clients representative for the expansion of the Mullingar
Sewer Improvement Scheme in the Republic of Ireland, which has a capital value
of Euro50 million.
The impact of these contracts and others secured in the four month period since
June 2003 has been to increase the order book to #144 million, which is 37 per
cent. higher than at the same time last year. The Board is satisfied with
current trading and prospects remain in line with its expectations.
A client of the Group, Ballast Plc was recently placed into administration and
there is a potential exposure in relation to outstanding contracts. Negotiations
are well advanced with the contractors taking over the relevant contracts for
which WYG holds intellectual property rights relating to design information.
These negotiations are expected to mitigate significantly WYG's current maximum
exposure of #350,000.
DETAILS OF THE PLACING AND OPEN OFFER
It is proposed that 3,787,879 Ordinary Shares be placed firm with institutional
investors at the Placing Price to raise #6.25 million (before expenses). The
Placing is fully underwritten by Rothschild. In addition, Qualifying
Shareholders will be invited by Rothschild (as agent for the Company) to apply
for up to 5,210,141 Open Offer Shares under the Open Offer at the Placing Price.
Qualifying Shareholders who wish to subscribe for Open Offer Shares under the
Open Offer will be able to apply for as many Open Offer Shares as they wish.
Subject to the Open Offer becoming unconditional in all respects, applications
by Qualifying Shareholders will be satisfied in full up to their pro rata basic
entitlement which is:
1 Open Offer Share for every 6 existing Ordinary Shares
held by them on the Record Date, and so in proportion to the number of Ordinary
Shares then held. Applications in excess of Qualifying Shareholders' basic
entitlements will be satisfied only to the extent that applications by other
Qualifying Shareholders are made for less than their basic entitlements and may
therefore be scaled down. To the extent that applications are received under the
Open Offer in respect of more than 5,210,141 Open Offer Shares in aggregate, the
number of such additional Open Offer Shares issued to Qualifying Shareholders
will be reduced in such manner as the Board and Rothschild shall, in their
absolute discretion, determine. Fractional entitlements to Open Offer Shares
will not be issued to Qualifying Shareholders and no cash payments will be made
in lieu of fractional entitlements. Accordingly, the entitlements of Qualifying
Shareholders will be rounded down to the nearest whole number of Open Offer
Shares. The Placing Price, in respect of the Open Offer Shares taken up, will be
payable in full on application. When fully paid, the Placing Shares and the Open
Offer Shares will rank pari passu in all respects with the existing Ordinary
Shares. In particular they shall not be entitled to receive the final dividend
of 3.35 pence per share due to be paid on 9 December 2003 to shareholders on the
register at the close of business on 10 October 2003.
The Open Offer will not be underwritten. The Company will receive the proceeds
of all subscriptions under the Open Offer which will be any amount up to a
maximum of #8.60 million. Open Offer Shares representing entitlements not taken
up under the Open Offer will not be issued.
Williams de Broe has agreed, as agent for WYG and Rothschild, to use all
reasonable endeavors to procure subscribers for the Placing Shares. To the
extent that they fail to procure subscribers for the Placing Shares, Rothschild
has agreed to subscribe at the Placing Price for the Ordinary Shares not placed
under the Placing. This will ensure a minimum fundraising of #6.25 million
(before expenses).
Qualifying Shareholders should be aware that the Open Offer is not a rights
issue and that Open Offer Shares not applied for under the Open Offer will not
be sold in the market for the benefit of Qualifying Shareholders who do not
apply for them under the Open Offer. Application Forms are personal to
shareholders and cannot be traded or transferred except to satisfy bona fide
market claims.
The Placing and the Open Offer will both be conditional upon the passing of the
Resolution at the Extraordinary General Meeting, upon the Underwriting Agreement
becoming unconditional in accordance with its terms (save for any condition
relating to Admission) and upon Admission occurring by no later than 8.00 a.m.
on 7 January 2004, or such later date as the Underwriter and the Company may
agree in writing.
Further information on the Open Offer, including the terms and conditions
thereof and the procedure for acceptance and payment, will be set out in the
documents expected to be sent to Shareholders today. To be valid, application
forms must be received by Capita IRG, Corporate Actions at PO Box 166, The
Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TH, no later than 3.00 p.m. on
5 January 2004.
Application will be made to the UK Listing Authority for the New Ordinary Shares
to be admitted to the Official List and application will be made to the London
Stock Exchange for the New Ordinary Shares to be admitted to trading on its
market for listed securities.
Applications under the Open Offer may only be made on the Application Form that
is personal to the Qualifying Shareholder(s) named therein and may not be
assigned or transferred except in the circumstances described below. The
Application Form will represent a right to apply for Open Offer Shares and will
not be a document of title and cannot be traded. It is transferable only to
satisfy bona fide market claims in relation to purchases in the market pursuant
to the rules of the London Stock Exchange prior to the Open Offer Shares being
marked "ex" the Open Offer. Applications may be split, but only to satisfy bona
fide market claims, up to 3.00pm on 31 December 2003. Any Qualifying Shareholder
who has sold or transferred all or part of his holding of Ordinary Shares is
advised to consult his stockbroker or other independent professional adviser as
soon as possible since the invitation to acquire Open Offer Shares may represent
a benefit which can be claimed from him by the purchaser or transferee.
EXTRAORDINARY GENERAL MEETING
An Extraordinary General Meeting will be held at Arndale House, Headingley,
Leeds LS6 2UU at 10.00 a.m. on 5 January 2004. At the EGM, a special resolution
will be proposed to increase the authorised share capital of the Company from
#2,000,000 to #2,500,000, to authorise the Directors to allot relevant
securities under section 80 of the Act up to an aggregate nominal amount of
#449,901 (representing 8,998,020 Ordinary Shares and 28.8 per cent. of the
issued share capital of the Company at the date of this announcement) and to
disapply pre-emption rights in connection with the allotment of equity
securities pursuant to the Placing and the Open Offer up to an aggregate nominal
amount of #449,901 (representing 8,998,020 Ordinary Shares and 28.8 per cent of
the issued share capital of the company at the date of this announcement) such
authorities to be in addition to any existing authorities and to expire at the
conclusion of the annual general meeting of the Company to be held in 2004.
RECOMMENDATION
The Board, which has been advised by Rothschild, considers the Placing and the
Open Offer to be in the best interests of the Company and its Shareholders as a
whole. In providing advice to the Board, Rothschild has placed reliance on the
Directors' commercial assessment of the Placing and the Open Offer and WYG's
funding requirements.
Accordingly, the Directors will unanimously recommend Shareholders to vote in
favour of the Resolution to be proposed at the EGM, as they intend to do in
respect of their own shareholdings of 895,282 Ordinary Shares, in aggregate
representing approximately 2.86 per cent of the Company's issued ordinary share
capital.
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
2003
Record date for the Open Offer close of dealings on 1 December
Latest time and date for splitting Application Forms
(to satisfy bona fide market claims) 3.00 p.m. on 31 December
2004
Latest time and date for receipt of Forms of Proxy 10.00 a.m. on 3 January
Extraordinary General Meeting 10.00 a.m. on 5 January
Latest time and date for receipt of completed Application Forms and 3.00pm on 5 January
payment in full under the Open Offer
Dealings in New Ordinary Shares to commence 7 January
CREST accounts credited by 9 January
Definitive share certificates for New Ordinary Shares dispatched by 9 January
DEFINITIONS
The following definitions apply throughout this announcement unless the context
requires otherwise:
"Act" the Companies Act 1985 (as amended)
"Admission" admission of the New Ordinary Shares to the Official List and to
trading on the London Stock Exchange's market for listed
securities becoming effective
"Application Form" the application form for the Open Offer
"Board" or "Directors" the Board of Directors of the Company
"Capita IRG" Capita IRG Plc
"CREST" the relevant system (as defined in the CREST regulations) in
respect of which CRESTco Limited is the Operator (as defined in
the CREST Regulations)
"CREST Regulations" the Uncertified Securities Regulations 2001 (SI 2001/3755)
"Extraordinary General Meeting" the extraordinary general meeting of the Company to be convened
for 10.00 a.m. on 5 January 2003 (or any adjournment of it)
or "EGM"
"Form of Proxy" the pre-paid proxy card for use in connection with the EGM
"FSA" the Financial Services Authority Limited
"London Stock Exchange" London Stock Exchange plc
"New Ordinary Shares" the Open Offer Shares and the Placing Shares
"Official List" the Official List of the UK Listing Authority
"Open Offer" the invitation for Qualifying Shareholders to apply for Open
Offer Shares on the basis to be set out in the document expected
to be sent to Shareholders today
"Open Offer Shares" up to 5,210,141 Ordinary Shares to be made available to
Qualifying Shareholders under the Open Offer
"Ordinary Shares" ordinary shares of 5p each in the capital of the Company
"Overseas Shareholders" Shareholders whose registered address is not in the UK
"Placing" the fully underwritten firm placing of 3,787,879 Ordinary Shares
with institutional investors
"Placing Price" 165p per New Ordinary Share
"Placing Shares" the 3,787,879 Ordinary Shares the subject of the Placing
"Qualifying Shareholders" Shareholders (other than certain Overseas Shareholders) on the
register of members of the Company at the Record Date
"Record Date" the close of business on 1 December 2003
"Resolution" the special resolution contained in the notice of the EGM
"Rothschild" N M Rothschild & Sons Limited, which is authorised and regulated
by the FSA
"Shareholders" holders of existing Ordinary Shares
"White Young Green" or WYG" or the " White Young Green Plc
Company"
"WYG Group" or the "Group" the Company and its subsidiary undertakings
"Williams de Broe" Williams de Broe Plc, which is authorised and regulated by the
FSA
"UK Listing Authority" the FSA acting in its capacity as the competent authority for the
purpose of Part VI of the FSMA and in respect of the admission to
the Official List otherwise than in accordance with Part VI of
the FSMA
"Underwriter" Rothschild
"Underwriting Agreement" the conditional agreement dated 4 December 2003 between the
Underwriter and the Company relating to the Placing and Open
Offer
This information is provided by RNS
The company news service from the London Stock Exchange
END
IOEEAKALESFDFEE