RNS Number : 9881Q
Airsprung Group PLC
27 October 2011
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION
27 October 2011
RECOMMENDED INCREASED CASH OFFER
Airsprung Group PLC ("Airsprung") by
Portnard Limited ("Portnard")
On 29 September 2011, Portnard announced the terms of a mandatory cash offer for the issued and to be issued share capital of Airsprung not already held by Portnard and parties acting in concert with it. The Airsprung Directors are pleased to announce that they have reached agreement with the Portnard Directors on the terms of a recommended increased cash offer to be made by Portnard for the issued and to be issued share capital of Airsprung not already held by Portnard and parties acting in concert with it (the "Increased Offer"). Airsprung and Portnard have sought, and the Takeover Panel has agreed, to grant an extension to the date by which the Offer Document in connection with the Increased Offer must be posted. The Offer Document with the terms of the revised mandatory cash offer will be posted by Thursday 10 November 2011.
Summary of the Increased Offer
-- Recommended cash offer of 31p for each Airsprung Share.
-- The Increased Offer values the entire issued and to be issued share capital of Airsprung at approximately GBP 7.9 million.
-- The Increased Offer represents a premium of approximately 55 per cent. to the Closing Price of 20 pence per Airsprung Share on 28 September 2011, being the last Business Day prior to the date of the announcement of the mandatory cash offer.
-- The Increased Offer is conditional only on acceptances being received which, taken together with Airsprung Shares acquired or agreed to be acquired, will result in Portnard and parties acting in concert with it holding more than 50 per cent. of the voting rights in Airsprung.
-- At the date of this announcement, Portnard and parties acting in concert with it are interested in 10,106,000 Airsprung Shares, representing approximately 42.30 per cent. of the issued share capital of Airsprung.
-- The Airsprung Directors have irrevocably undertaken to Portnard to accept or procure acceptance of the Increased Offer in respect of their entire aggregate holding of 6,247,658 Airsprung Shares, representing approximately 26.2 per cent. of the existing issued ordinary share capital of Airsprung. These undertakings continue to be binding in the event of a higher competing offer for Airsprung and will only cease to be binding in the event that the Increased Offer lapses or is withdrawn
-- This announcement is being made by the Airsprung Directors with the approval of the Portnard Directors pursuant to Note 3 to Rule 2.5 of the Code.
-- The Airsprung Directors, who have been so advised by finnCap, consider the terms of the Increased Offer to be fair and reasonable and will unanimously recommend Airsprung Shareholders to accept the Increased Offer. In providing advice to the Airsprung Directors, finnCap has taken into account the Airsprung Directors' commercial assessments. finnCap is providing the independent financial advice for the purposes of Rule 3 of the Code.
-- Portnard is providing the cash consideration payable under the Increased Offer from its existing cash resources. Merchant Securities, financial adviser to Portnard, is satisfied that sufficient resources are available to satisfy in full the cash consideration payable to Airsprung Shareholders under the terms of the Offer.
Key Financial Terms
-- The Increased Offer will be 31 pence in cash for each Airsprung Share, valuing Airsprung's entire issued ordinary share capital (fully diluted for the exercise of all outstanding in-the-money options) at approximately GBP 7.9 million.
-- The Increased Offer represents a premium of approximately:
-- 55 per cent. to the Closing Price of 20 pence per Airsprung Share on 28 September 2011, being the last Business Day prior to the date of announcement of the mandatory cash offer;
-- 43 per cent. to the average Closing Price of 21.64 pence per Airsprung Share for the month ended 28 September 2011, being the last Business Day prior to the date of announcement of the mandatory cash offer; and
-- 38 per cent. to the average Closing Price of 22.53 pence per Airsprung Share for the 12 months ended 28 September 2011, being the last Business Day prior to the date of announcement of the mandatory cash offer.
Commenting on the Increased Offer, Stuart Lyons, Chairman of Airsprung, said:
"The Airsprung Board believes that the Increased Offer being made by Portnard represents a good opportunity for Airsprung's shareholders to realise the full value of their shares in cash. As a result of the assurances that the Board has received regarding Portnard's future intentions for the Company, its employees, pensioners and other stakeholders in the business, we are satisfied that Portnard and its concert party will be suitable owners of the Company."
Background to and reasons for recommending the Increased Offer
The mandatory cash offer announced by Portnard on 29 September 2011 was made following a significant market purchase which triggered the requirement to make a mandatory offer under Rule 9 of the Code. This purchase was made without the prior knowledge of the Airsprung Directors. Following announcement of the mandatory cash offer, the Airsprung Directors have held meetings with the Portnard Directors and demonstrated that the mandatory cash offer did not reflect a fair value for the Company. The Airsprung Directors believe that the Increased Offer is a fair valuation of Airsprung based upon its recent trading, current position and prospects, and market conditions.
The increased price of 31 pence per share is 14.8 per cent. higher than the mandatory cash offer price of 27p and represents a premium of 55 per cent. to the Closing Price of 20 pence of an Airsprung Share on 28 September 2011, the Business Day immediately preceding the date of announcement of the mandatory cash offer.
The Airsprung Directors have considered the likely impact of both the Increased Offer and their response to it on the stability of the Group's business, its ability to secure orders and the continuity of employment. Portnard has provided assurances that it will continue to operate the Airsprung Group as a trading business, operated on a day to day basis by the existing senior management, and that it has no specific plans to make any changes that would give rise to material repercussions on the level and location of employment within the Group. The assurances the Airsprung Directors have received give the Airsprung Directors reasonable confidence that Portnard will take a responsible view of the interests of the employees and the maintenance of business relationships.
The Airsprung Directors have informed Portnard of the Group's commitment towards the members of the Airsprung Retirement and Death Benefits Scheme (the "Scheme"). The Airsprung Directors have received assurances that Portnard has no intention of changing the current relationship between the Group and the Trustees, and that consultations will continue to take place on matters affecting the Scheme.
Current trading and prospects of Airsprung
The Airsprung Directors regard Airsprung as a professionally managed business, which has shown a degree of resilience during the recent economic pressures, and believe that the prospects of Airsprung as an independent company would be sound. However, the Group operates in a cyclical sector, and sales and profitability are affected by a number of factors outside management's control, for example, the prices of raw materials, housing activity, consumer spending, the level of VAT and the relative success of the Group's retail customers. Sales and profits both fell in the year to March 2011. At the recent AGM, the Airsprung Directors announced a modest improvement in the outlook for the full year and, since then, the Group has succeeded in winning significant new business. Against that, the economic environment remains challenging, and many retailers continue to find trading exceptionally difficult. The effect of these factors has been reflected in the price of the Group's shares, prior to the recent purchases by Portnard and parties acting in concert with it. In considering the Increased Offer, the Airsprung Directors have had regard to the current and projected economic environment, and to the Group's past performance, present trading and future prospects.
In assessing the Increased Offer, the Airsprung Directors have also taken into account the strong asset backing enjoyed by the Group, particularly in respect of the manufacturing site in Trowbridge. Having consulted the local planning authority and taken independent professional advice, the Airsprung Directors are of the view that redevelopment for other than commercial, industrial and employment purposes is not likely to be an option for the foreseeable future.
The Airsprung Directors, who have been so advised by finnCap, consider the terms of the Increased Offer to be fair and reasonable, and will unanimously recommend Airsprung Shareholders to accept the Increased Offer. The Airsprung Directors have irrevocably undertaken to accept or procure acceptance of the Increased Offer in respect of their entire holding of 6,247,658 Airsprung Shares, representing in aggregate approximately 26.2 per cent. of the existing issued ordinary share capital of Airsprung. These undertakings continue to be binding in the event of a higher competing offer for Airsprung and will only cease to be binding in the event that the Increased Offer lapses or is withdrawn. In providing advice to the Airsprung Directors, finnCap has taken into account the Airsprung Directors' commercial assessments.
Except with the approval of the Takeover Panel, Airsprung and Portnard will post the Offer Document to Airsprung Shareholders and, for information only, to holders of share options under the Airsprung Share Options Schemes as soon as practicable and, in any event, no later than 10 November 2011.
Publication on website
A copy of this announcement will be available, subject to certain restrictions in relation to persons resident in Restricted Jurisdictions, at Airsprung's website at www.airsprung-group.co.uk.
A person may request a hard copy of the announcement and may also request that all future documents, announcements and information in relation to the Increased Offer are sent in hard copy form. A hard copy may be obtained by sending a request to Tean Dallaway, Airsprung Group PLC, Canal Road, Trowbridge, Wiltshire, BA14 8RQ (telephone number 01225 754411).
This announcement is for information purposes only and is not intended to and does not constitute or form part of any offer to sell or any invitation to purchase or subscribe for any securities pursuant to the Increased Offer or otherwise. The Increased Offer will be made solely pursuant to the terms of the Offer Document which will contain the full terms and condition of the Increased Offer, including details of how the Increased Offer might be accepted.
finnCap is acting as financial adviser and corporate broker to Airsprung and no one else in connection with the matters set out in this announcement and will not be responsible to anyone other than Airsprung for providing the protections afforded to its clients nor for providing advice in relation to the matters set out in this announcement.
Merchant Securities is acting as financial adviser to Portnard and no one else in connection with the matters set out in this announcement and will not be responsible to anyone other than Portnard for providing the protections afforded to its clients nor for providing advice in relation to the matters set out in this announcement.
The release, publication or distribution of this announcement in certain jurisdictions 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 purpose of complying with English law and the 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 of jurisdictions outside the United Kingdom.
Copies of this announcement and any formal documentation relating to the Increased Offer are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in or into or from any Restricted Jurisdiction and persons receiving such documents (including custodians, nominees and trustees) must not mail or otherwise forward, distribute or send it in or into or from any Restricted Jurisdiction. The Increased Offer may not be made directly or indirectly, in or into, or by the use of mails or any means or instrumentality (including, but not limited to, facsimile, e-mail or other electronic transmission, telex or telephone) of interstate or foreign commerce of, or of any facility of a national, state or other securities exchange of any Restricted Jurisdiction and the Increased Offer may not be capable of acceptance by any such use, means, instrumentality or facilities.
Rule 2.10 disclosure
In accordance with Rule 2.10 of the Code, Airsprung confirms that it has 23,888,698 ordinary shares of ten pence each in issue and admitted to trading on the AIM market of the London Stock Exchange under the UK ISIN code GB0000119940.
This document contains certain statements about Airsprung and Portnard that are or may be "forward-looking statements" - that is, statements related to future, not past, events, including forward-looking statements. These statements are based on the current expectations of the management of Airsprung and Portnard (as the case may be) and are subject to uncertainty and changes in circumstances, and involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied in such forward-looking statements.
The forward-looking statements contained in this announcement may include statements about the expected effects on Arudel and Portnard of the Increased Offer, the expected timing and scope of the Increased Offer and all other statements in this document other than historical facts. Without limitation, any statements preceded or followed by or that include the words "targets", "plans", "believes", "expects", "aims", "intends", "will", "may", "anticipates", "estimates", "should," "would," "expect," "positioned," "strategy," or words or terms of similar substance or the negative thereof, are forward-looking statements. Forward-looking statements include statements relating to the following: (i) future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects; (ii) business and management strategies and the expansion and growth of Airsprung's or Portnard's operations and potential synergies resulting from the Increased Offer; (iii) the effects of government regulation on Airsprung's or Portnard's business, and (iv) Airsprung's plans, objectives, expectations and intentions generally.
There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements. Unknown or unpredictable factors could also cause actual results to differ materially from those in any forward-looking statement. Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date hereof. Neither Airsprung nor Portnard undertakes any obligation to update publicly or revise forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent legally required.
finnCap Telephone: +44 (0) 20 7220 0500
(Financial adviser and
corporate broker to Airsprung)
Marc Young or Charlotte Stranner
Tony Lisanti, Chief Executive Telephone: 44 (0) 1225 754 411
Merchant Securities Limited Telephone: +44 (0) 20 7628 2200
(Financial adviser to Portnard)
David Worlidge or Virginia Bull
Disclosure Requirements under the Code
Under Rule 8.3(a) of the City Code, any person who is interested in one per cent. or more of any class of relevant securities of an offeree company or of any paper offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any paper offeror is first identified.
An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any paper offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any paper offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a paper offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the City Code, any person who is, or becomes, interested in 1 per cent. or more of any class of relevant securities of the offeree company or of any paper offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any paper offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any paper offeror, save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.
If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a paper offeror, they will be deemed to be a single person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).
Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. If you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure, you should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129.
Please note that, for the purposes of the above summary of Rule 8 of the Code, Portnard is not treated as a paper offeror and therefore there is no requirement to disclose interests or dealings in shares of Portnard under Rule 8 of the Code.
The following definitions apply throughout this announcement unless the context otherwise requires:
"Airsprung" or the "Company" Airsprung Group PLC, a company
or the "Group" registered in England and Wales
with registered number 01277785
whose registered office is Canal
Road, Trowbridge, Wiltshire BA14
"Airsprung Directors" the directors of Airsprung as
at the date of this announcement;
"Airsprung Shares" the existing unconditionally
allotted and issued and fully
paid ordinary shares of 10 pence
each in the capital of Airsprung
and any further ordinary shares
of 10 pence each in the capital
of Airsprung which are unconditionally
allotted and issued and fully
paid before the date on which
the Increased Offer closes or
before such earlier date as Portnard
(subject to the Code) may determine,
not being earlier than the date
on which the Increased Offer
becomes or is declared unconditional
as to acceptances;
"Airsprung Shareholders" the holders of Airsprung Shares;
"Business Day" a day (other than a Saturday,
a Sunday or public holiday) on
which banks are generally open
for business in the City of London
for the transaction of all normal
sterling banking business;
"Closing Price" the closing middle market quotation
of an Airsprung Share as derived
from the London Stock Exchange;
"Code" the City Code on Takeovers and
Mergers of the United Kingdom;
"finnCap" finnCap Limited, financial advisor
and corporate broker to Airsprung;
"Increased Offer" the Increased Offer to be made
by Portnard to acquire the entire
issued and to be issued Airsprung
Shares not already owned by Portnard
on the terms and conditions to
be set out in the Offer Document;
"Merchant Securities" Merchant Securities Limited,
financial adviser to Portnard;
"Offer Document" the document to be sent to Airsprung
Shareholders which will contain,
inter alia, the terms and condition
of the Increased Offer;
"Portnard" Portnard Limited, a company incorporated
in Jersey, with registered number
12672 whose registered office
is at 26 New Street, St Helier,
Jersey JE2 3RA
"Portnard Directors" the board of directors of Portnard
as at the date of this announcement;
"Restricted Jurisdiction" any jurisdiction where local
laws or regulations may result
in a significant risk of civil,
regulatory or criminal exposure
if information concerning the
Increased Offer is set or made
available to Airsprung Shareholders
in that jurisdiction;
"Takeover Panel" the Panel on Takeovers and Mergers
of the United Kingdom.
This information is provided by RNS
The company news service from the London Stock Exchange