Management Buy-Out - Part 2

RNS Number:8671G
Oasis Stores PLC
13 July 2001


PART 2

 Not for release, publication or distribution in or into the United States or
                                    Canada



             RECOMMENDED #54m MANAGEMENT BUY-OUT OF OASIS STORES

                                  APPENDIX I


                           CONDITIONS OF THE OFFER



The Offer will be subject to the following conditions:



(a)           valid acceptances being received (and not, where permitted,
withdrawn) by not later than 3.00 p.m. on the first closing date of the Offer
(or such later time(s) and/or date(s) as Sierra may, subject to the rules of
the Code, decide) in respect of not less than 90 per cent. (or such lesser
percentage as Sierra may decide) of the Oasis Shares to which the Offer
relates, provided that, unless agreed by the Panel, this condition will not be
satisfied unless Sierra and/or its wholly-owned subsidiaries have acquired or
agreed to acquire (pursuant to the Offer or otherwise), directly or
indirectly, Oasis Shares carrying, in aggregate, over 50 per cent. of the
voting rights then normally exercisable at general meetings of Oasis on such
basis as may be required by the Panel (including for this purpose, to the
extent (if any) required by the Panel, any voting rights attaching to any
shares which are unconditionally allotted or issued before the Offer becomes
or is declared unconditional as to acceptances, whether pursuant to the
exercise of conversion or subscription rights or otherwise); and for this
purpose (i) the expression "Oasis Shares to which the Offer relates" shall be
construed in accordance with sections 428-430F of the Companies Act 1985; and
(ii) shares which have been unconditionally allotted shall be deemed to carry
the voting rights which they will carry on issue;

(b)           the Office of Fair Trading not having indicated that it is the
intention of the Secretary of State for Trade and Industry to refer the
proposed acquisition of Oasis by Sierra, or any matters arising therefrom, to
the Competition Commission;

(c)             no government or governmental, quasi-governmental,
supranational, statutory or regulatory body, or any court, institution,
investigative body, association, trade agency or professional or environmental
body or (without prejudice to the generality of the foregoing) any other
person or body in any jurisdiction (each, a "Relevant Authority") having
decided to take, instituted, implemented or threatened any action,
proceedings, suit, investigation or enquiry or enacted, made or proposed any
statute, regulation or order or otherwise taken any other step or done
anything, and there not being outstanding any statute, legislation or order,
that would or would be reasonably likely to:



(i)            materially restrict, restrain, prohibit, delay, impose
additional conditions or obligations with respect to, or otherwise materially
interfere with the implementation of, the Offer or the acquisition of any
Oasis Shares by Sierra or any matters arising therefrom;

(ii)           result in a material delay in the ability of Sierra, or render
Sierra unable, to acquire some or all of the Oasis Shares;

(iii)          require, prevent, delay or affect to any material extent the
divestiture by Sierra or any of its subsidiaries, subsidiary undertakings or
associated undertakings (including any company of which 20 per cent. or more
of the voting capital is held by the Sierra Group or any partnership, joint
venture, firm or company in which any of them has an interest) (together the
"Wider Sierra Group") or Oasis or any of its subsidiaries, subsidiary
undertakings or associated undertakings (including any company of which 20 per
cent. or more of the voting capital is held by Oasis or any partnership, joint
venture, firm or company in which any of them has an interest) (together the
"Wider Oasis Group") of all or any portion of their businesses, assets or
property or of any Oasis Shares or other securities in Oasis or impose any
limitation on the ability of any of them to conduct their respective
businesses or own their respective assets or properties or any part thereof
which in each case would be material in the context of the Wider Oasis Group
taken as a whole or, as the case may be, the Wider Sierra Group taken as a
whole;

(iv)          impose any limitation on the ability of any member of the Wider
Sierra Group to acquire or hold or exercise effectively, directly or
indirectly, all rights of all or any of the Oasis Shares (whether acquired
pursuant to the Offer or otherwise) in each case to an extent which is
material in the context of the Sierra Group taken as a whole;

(v)           require any member of the Wider Sierra Group or the Wider Oasis
Group to offer to acquire any shares or other securities or rights thereover
in any member of the Wider Oasis Group owned by any third party where such
acquisition would be material in the context of the Sierra Group taken as a
whole or, as the case may be, the Oasis Group taken as a whole;

(vi)          make the Offer or its implementation or the proposed acquisition
of Oasis or any member of the Wider Oasis Group or of any Oasis Shares or any
other shares or securities in, or control of, Oasis, illegal, void or
unenforceable in or under the laws of any jurisdiction;

(vii)         impose any material limitation on the ability of any member of
the Wider Sierra Group or the Wider Oasis Group to co-ordinate its business,
or any part of it, with the business of any other member of the Wider Sierra
Group or the Wider Oasis Group; or

(viii)            otherwise adversely affect any or all of the businesses,
assets, prospects or profits of any member of the Wider Sierra Group or the
Wider Oasis Group or the exercise of rights of shares of any company in the
Oasis Group to an extent which is material in the context of the Sierra Group
taken as a whole or, as the case may be, the Oasis Group taken as a whole,



and all applicable waiting periods during which such Relevant Authority could
institute, implement or threaten any such action, proceeding, suit,
investigation, enquiry or reference or otherwise intervene having expired,
lapsed or been terminated;



(d)           all authorisations, orders, grants, consents, clearances,
licences, permissions and approvals, in any jurisdiction, deemed necessary by
Sierra or which in the reasonable opinion of Sierra are appropriate for or in
respect of the Offer, the proposed acquisition of any shares or securities in,
or control of, Oasis or any member of the Wider Oasis Group by any member of
the Wider Sierra Group or the carrying on of the business of any member of the
Wider Oasis Group or the Wider Sierra Group or any matters arising therefrom
being obtained in terms reasonably satisfactory to Sierra from all appropriate
Relevant Authorities or (without prejudice to the generality of the foregoing)
from any persons or bodies with whom any members of the Wider Oasis Group or
the Wider Sierra Group has entered into contractual arrangements and such
authorisations, orders, grants, consents, clearances, licences, permissions
and approvals remaining in full force and effect and there being no intimation
of any intention to revoke or not to renew the same and all necessary filings
having been made, all appropriate waiting and other time periods (including
extensions thereto) under any applicable legislation and regulations in any
applicable jurisdiction having expired, lapsed or been terminated and all
necessary statutory or regulatory obligations in any applicable jurisdiction
in respect of the Offer or the proposed acquisition of Oasis by Sierra or of
any Oasis Shares or any matters arising therefrom having been complied with;

(e)           ; save as disclosed in writing to Sierra prior to the date of
the announcement of the Offer, no written notice having been received by any
member of the Oasis Group from any party with whom any member of the Wider
Oasis Group has any contractual relationship that the interests held by any
member of the Wider Oasis Group under licences, leases or other agreements
will be materially (in the context of the Wider Oasis Group taken as a whole)
adversely amended or otherwise materially adversely affected by the Offer or
the proposed acquisition of Oasis or any matters arising therefrom and there
being no communication from any such party that, in the reasonable opinion of
Sierra, is likely to lead to such interests being materially (in the context
of the Wider Oasis Group taken as a whole) adversely affected by the Offer or
the proposed acquisition of Oasis or any matters arising therefrom;

(f)            save as disclosed in writing to Sierra prior to the date of the
announcement of the Offer, there being no provision of any agreement,
instrument, permit, licence or other arrangement to which any member of the
Wider Oasis Group is a party or by or to which it or any of its assets may be
bound or subject which, as a consequence of the Offer or the acquisition of
Oasis or because of a change in the control or management of Oasis or any
member of the Oasis Group or any matters arising therefrom or otherwise, could
or might have the result that:

(i)            any moneys borrowed by, or other indebtedness, actual or
contingent, of, or grant available to, any member of the Wider Oasis Group
becomes or is capable of being declared repayable immediately or earlier than
the repayment date stated in such agreement, instrument or other arrangement
or the ability of any member of the Wider Oasis Group to borrow moneys or
incur indebtedness is withdrawn or materially inhibited or adversely affected
(in the context of the Wider Oasis Group taken as a whole);

(ii)           any mortgage, charge or other security interest is created over
the whole or any part of the business, property or assets of any member of the
Wider Oasis Group or any such security (whenever arising) becomes enforceable;

(iii)          any such agreement, instrument, permit, licence or other
arrangement, or any right, interest, liability or obligation of any member of
the Wider Oasis Group therein, is terminated or materially adversely modified
or affected or any material adverse action is taken or onerous obligation
arises thereunder in the context of the Wider Oasis Group taken as a whole;

(iv)          the value of any member of the Wider Oasis Group or its
financial or trading position is materially prejudiced or materially adversely
affected in the context of the Wider Oasis Group taken as a whole;

(v)           any material asset or, other than in the ordinary course of
business, any asset of the Wider Oasis Group being or falling to be charged or
disposed of in the context of the Wider Oasis Group taken as a whole;

(vi)          the rights, liabilities, obligations or interests or business of
any member of the Wider Oasis Group in or with any other person, firm or
company (or any arrangement relating to such interest or business) is
terminated or materially and adversely modified or affected in each case in
the context of the Wider Oasis Group taken as a whole; or

(vii)              any member of the Wider Oasis Group ceases to be able to
carry on business under any name under which it currently does so;



(g)           since 27 January 2001 (being the date to which the latest
published audited report and accounts of Oasis were made up) and save as
disclosed in Oasis's published report and accounts for the 52 week period
ended 27 January 2001 or save as announced publicly and in each case delivered
to the Company Announcements Office of the London Stock Exchange prior to 13
July 2001 being the date of this announcement, no member of the Oasis Group
having:

(i)            issued or agreed to issue or authorised or proposed the issue
of additional shares of any class or issued or authorised or proposed the
issue of or granted securities convertible into shares or rights, warrants or
options to subscribe for or acquire such shares or convertible securities or
redeemed, purchased or reduced or announced any intention to do so or made any
other change to any part of its share capital;

(ii)           recommended, declared, paid or made or proposed to recommend,
declare, pay or make any dividend, bonus or other distribution other than
dividends lawfully paid to Oasis or wholly-owned subsidiaries of Oasis and
other than the final dividend declared on 9 April 2001;

(iii)          authorised or proposed or announced its intention to propose
any merger or acquisition or disposal or transfer of material assets (other
than the sale of clothing or other trading stock in the ordinary course of
business) or shares or any change in its share or loan capital;

(iv)          other than the acquisition of stock in the ordinary course of
business, incurred or increased any indebtedness or contingent liability which
is material in the context of the Wider Oasis Group taken as a whole or issued
or authorised or proposed the issue of any debentures;

(v)           disposed of or transferred, mortgaged or encumbered any material
asset or any right, title or interest in any such asset or entered into or
varied any contract, commitment or arrangement (whether in respect of capital
expenditure or otherwise) which is of a long term or unusual nature or which
involves or could involve an obligation of a nature or magnitude which is
material in the context of the Oasis Group taken as a whole or authorised,
proposed or announced any intention to do so;

(vi)          entered into or varied or proposed to enter into or vary any
contract, reconstruction, amalgamation, arrangement or other transaction
(other than in the ordinary course of business) which is of a long term or
unusual or onerous nature or is otherwise than in the ordinary course of
business or announced any intention to do so;

(vii)         save as disclosed in the Offer Document, entered into, or varied
the terms of, any contract or agreement with any of the directors or senior
executives of Oasis;

(viii)        taken or proposed 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, administrator,
administrative receiver, trustee or similar officer of all or any of its
assets and revenues;

(ix)           waived or compromised any claim other than in the ordinary
course of business and which is material in the context of the Oasis Group
taken as a whole;

(x)            made any amendment to its memorandum or articles of
association;

(xi)           entered into any contract, transaction or arrangement which is
or is reasonably likely to be restrictive on the business of any member of the
Wider Oasis Group or the Wider Sierra Group and which is material in the
context of the Oasis Group taken as a whole;

(xii)          entered into any contract, commitment or agreement with respect
to any of the transactions or events referred to in this condition (g); and

(xiii)             been unable or admitted that it is unable to pay its debts
or having stopped or suspended (or threatened to stop or suspend) payment of
its debts generally or ceased or threatened to cease carrying on all or a
substantial part of its business;



(h)           since 27 January 2001 (being the date to which the latest
published audited report and accounts of Oasis were made up) and save as
disclosed in Oasis's published report and accounts for the 52 week period
ended 27 January 2001 or save as announced publicly and in each case delivered
to the Company Announcements Office of the London Stock Exchange prior to 13
July 2001 being the date of this announcement:

(i)            no litigation, arbitration, prosecution or other legal
proceedings having been instituted, announced or threatened or become pending
or remained outstanding by or against any member of the Wider Oasis Group or
to which any member of the Wider Oasis Group is or may become a party (whether
as plaintiff, defendant or otherwise) which is material in the context of the
Wider Oasis Group taken as a whole;

(ii)           no adverse change having occurred in the business, assets,
financial or trading position, profits or prospects of any member of the Wider
Oasis Group which is material in the context of the Wider Oasis Group taken as
a whole;

(iii)          no investigation by any Relevant Authority having been
threatened, announced, implemented or instituted or remaining outstanding
which in each case might be material to the Wider Oasis Group taken as a
whole;



(i)                   Sierra not having discovered that:



(i)            Oasis has insufficient profits available for distribution to
pay the final dividend declared at the annual general meeting of Oasis held on
12 June 2001;

(ii)           any business, financial or other information concerning any
member of the Oasis Group disclosed, publicly or otherwise at any time to
Sierra, by or on behalf of any member of the Oasis Group, is untrue or
inaccurate or misleading (whether by omission or otherwise) or omits
information which is material in the context of the Offer; or

(iii)          save as publicly announced before the date of the announcement
of the Offer, any member of the Wider Oasis Group is subject to any liability,
actual or contingent, which is not disclosed in the annual report and accounts
of Oasis for the 52 week period ended 27 January 2001 or in the Offer
Document, which would be material to the Wider Oasis Group taken as a whole;
and



(j)            Sierra not having discovered that, save as publicly announced
by Oasis before the date of announcement of the Offer:

(i)            any past or present member of the Wider Oasis Group has not
complied with all applicable legislation or regulations of any jurisdiction
with regard to the storage, disposal, discharge, spillage, leak or emission of
any waste or hazardous substance or any substance likely to impair the
environment or to harm human health or otherwise relating to environmental
matters (which non-compliance might give rise to any liability (whether actual
or contingent) on the part of any member of the Wider Oasis Group) which would
be material to the Wider Oasis Group taken as a whole or that there has
otherwise been any such disposal, discharge, spillage, 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)
which in any such case might give rise to any liability (whether actual or
contingent) on the part of any member of the Wider Oasis Group which would be
material to the Wider Oasis Group taken as a whole;

(ii)           there is or is reasonably likely to be any liability (whether
actual or contingent) to make good, repair, reinstate or clean up any property
now or previously owned, occupied or made use of by any past or present member
of the Wider Oasis Group or any controlled waters under any environmental
legislation, regulation, notice, circular or order of any Relevant Authority
or third party or otherwise in each case which would be material to the Wider
Oasis Group taken as a whole;

(iii)          circumstances exist (whether as a result of the making of the
Offer or otherwise) which are reasonably likely to lead to any Relevant
Authority instituting or any member of the Wider Oasis Group or the Wider
Sierra Group being required to institute, an environmental audit or take any
other steps which in any such case might result in any actual or contingent
liability to improve or install new plant or equipment or make good, repair,
re-instate or clean up any land or other asset now or previously owned,
occupied or made use of by any member of the Wider Oasis Group in each case
which could be material to the Wider Oasis Group taken as a whole; or

(iv)          circumstances exist whereby a person or class of persons would
be reasonably likely to have any claim or claims in respect of any product or
process of manufacture or materials used therein now or previously
manufactured, sold or carried out by any past or present member of the Wider
Oasis Group, in each case which could be material to the Wider Oasis Group
taken as a whole.



Sierra reserves the right to waive all or any of conditions (b) to (j)
(inclusive) above, in whole or in part.  Conditions (b) to (j) (inclusive)
must be satisfied as at, or waived on or before, 21 days after the later of
the first closing date of the Offer and the date on which condition (a) is
fulfilled (or in each case such later date as the Panel may agree) provided
that Sierra shall be under no obligation to waive or treat as satisfied any of
conditions (b) to (j) (inclusive) by a date earlier than the latest date
specified above for the satisfaction thereof notwithstanding that the other
conditions of the Offer may at such earlier date have been waived or fulfilled
and that there are at such earlier date no circumstances indicating that any
of such conditions may not be capable of fulfilment.



If Sierra is required by the Panel to make an offer for Oasis Shares under the
provisions of Rule 9 of the Code, Sierra may make such alterations to the
conditions as are necessary to comply with the provisions of that Rule.



The Offer will lapse if the Offer is referred to the Competition Commission or
if the European Commission in respect thereof either initiates proceedings
under article 6(1)(c) of Council Regulation (EEC) 4064/89 or makes a referral
to a competent authority of the United Kingdom under article 9(1) of that
Regulation, before (in any such case) the later of the first closing date of
the Offer and the date when the Offer becomes or is declared unconditional as
to acceptances.





                                 APPENDIX II



                                 DEFINITIONS



The following definitions apply throughout this document, unless the context
requires otherwise:



"the Act" or "        The Companies Act 1985 (as amended)
Companies Act"

"Bank of Scotland"    The Governor and Company of the Bank of Scotland

"BDO Stoy Hayward     BDO Stoy Hayward Corporate Finance, a division of BDO
Corporate             Stoy
Finance"              Hayward, Chartered Accountants, which is authorised by
                      the
                      Institute of Chartered Accountants in England and Wales
                      to
                      carry on investment business, financial adviser to Sierra

"Close Brothers       Close Brothers Corporate Finance Limited, financial
Corporate Finance"    adviser to
                      Oasis

"Code" or "City Code" The City Code on Takeovers and Mergers

"Company" or "Oasis"  Oasis Stores Plc

"Form of Acceptance"  the form of acceptance, authority and (where appropriate)
                      election relating to the Offer

"Independent          Michael Bennett, Maurice Bennett, Vivian Scott, Colin
Directors"            Glass and Rowley Ager

"Investors"           shareholders in Sierra Holdings after the Offer becomes
                      or is declared unconditional in all respects, comprising  
                      the Management Investors and the PPM Investors

"Investor Loan Notes" the loan notes to be issued to the PPM Investors under
                      the Investor Loan Note Instrument

"Investor Loan Note   The #30,100,000 eight per cent. guaranteed unsecured loan
Instrument"           note instrument


"LIBOR"               the London Inter Bank Offer Rate

"Loan Note            the loan note alternative, by which eligible Oasis
Alternative"          Shareholders
                      who validly accept the Offer may elect to receive all or
                      part of
                      the cash consideration to which they would otherwise be
                      entitled in the form of Loan Notes instead of cash

"Loan Notes"          the guaranteed loan notes 2005 to be issued by Sierra as
                      an alternative to cash on acceptance of the Offer 

                      
"London Stock         London Stock Exchange plc
Exchange"

"Management Exchange  the agreement dated 13 July 2001 between Sierra Holdings,
Agreement"
                      Sierra and the Management Investors relating to, inter
                      alia, the subscription for Sierra Holdings B Ordinary     
                      Shares by the Management Investors

 "Management          Derek Lovelock, Richard Glanville, Jane Woolf, Nadia
Investors"            Jones, Sharon O'Conner, Jacki Crockett, Hannah Russell,   
                      Lynne Burstall, Meg Lustman and John Bennett

"Oasis Board" or  "   the board of directors of Oasis
Oasis Directors"

"Oasis Share Option   the Oasis Approved Executive Share Option Scheme (1995)
Schemes"              and the Oasis Unapproved Executive Share Option Scheme    
                     (1997)

"Oasis Share(s)"      ordinary share(s) of 10p each in the share capital of
                      Oasis

"Oasis Shareholder(s)" holder(s) of Oasis Shares

"Offer"               the recommended final* cash offer by BDO Stoy Hayward
                      Corporate Finance on behalf of Sierra to acquire the
                      Oasis Shares other than those already contracted or to be
                      acquired pursuant to the Management Exchange Agreement on 
                      the terms and subject to the conditions set out in the    
                      Offer Document and the Form of Acceptance including, where
                      the context so requires, any subsequent revision,         
                      variation, extension or renewal of such offer.

"Offer Document"      the formal document which will be sent to Oasis
                      Shareholders containing, inter alia, details of the Offer

"Official List"       the Official List of UK Listing Authority

"Panel"               the Panel on Takeovers and Mergers

"PPM Investors"       clients of PPM Ventures, investing in Sierra Holdings,
                      through
                      PPMV Nominees Limited

"PPM Ventures"        PPM Ventures Limited

"Register"            the register of Members of Oasis

"Sierra"              Sierra Acquisitions plc

"Sierra Board" or "   the board of directors of Sierra
Sierra Directors"

"Sierra Group"        Sierra Holdings, Sierra and Sierra's subsidiary
                      undertakings

"Sierra Holdings"     Sierra Holdings Limited

"Sierra Holdings A    A ordinary shares of #1 each in the capital of Sierra
Ordinary Shares"      Holdings

"Sierra Holdings B    B ordinary shares of #1 each in the capital of Sierra
Ordinary Shares"      Holdings

"Sierra Ordinary      ordinary shares of #1 each in the capital of Sierra
Shares"

"Subscription         the agreement dated 13 July 2001 between Sierra Holdings,
Agreement"            the
                      Management Investors, the PPM Investors, and Sierra
                      relating,
                      inter alia, to the subscription for Sierra Holdings A
                      Ordinary
                      Shares and Investor Loan Notes by the PPM Investors

"UK" or "United       the United Kingdom of Great Britain and Northern Ireland
Kingdom"


* The Offer is final and will not be revised or increased.  However, Sierra
reserves the right to amend, improve, revise, increase or change the terms of
the Offer in the event of an offer from a third party which has a value equal
to or higher than the Offer or any other competitive situation arising or
otherwise with the consent of the Panel.