Statement regarding Mouchel Group plc

 

TIDMVTG TIDMMCHL 
 
RNS Number : 1611H 
VT GROUP PLC 
15 February 2010 
 

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR 
FROM ANY JURISDICTION (INCLUDING THE UNITED STATES) WHERE TO DO SO WOULD 
CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION 
 
VT Group plc ("VT") notes the announcement this morning by Mouchel Group plc 
("Mouchel"). 
 
VT confirms that it made a proposal to Mouchel on 12 February 2010 to offer 
0.579 new VT shares per Mouchel share, with a 50% cash alternative on a mix and 
match basis funded through debt facilities1. This offer includes Mouchel's 
interim dividend and is, therefore, on the basis that Mouchel does not pay a 
dividend for the six months ended 31 January 20101. 
 
VT would like to confirm that, as communicated to Mouchel, this proposal is 
final2 (the "Final Proposal"). 
 
The Final Proposal equates to 305 pence per Mouchel share based on the 1 month 
average share price for VT of 527 pence. 
 
VT believes a transaction on the terms of the Final Proposal will create 
significant value for both Mouchel and VT shareholders: 
 
·      The transaction is firmly aligned with the successful strategy VT has 
pursued over the last five years of developing a broader based support services 
business, with reduced exposure to MoD. 
·      The transaction will provide VT with access to a wider range of customers 
in central and local government and regulated industries. 
·      The enlarged group will benefit from materially increased revenue 
opportunities as the combined capabilities and customer bases of the two 
businesses will provide greater access to larger, more complex contract 
opportunities driven by the need for Government cost efficiencies following the 
election. 
·      The enlarged group's ability to win and execute these significant 
incremental contract opportunities will be enhanced by its increased scale and 
capabilities and underpinned by a strong balance sheet. 
·      The transaction will result in cost synergies that naturally result from 
a combination of two businesses of the scale of VT and Mouchel. 
·      The transaction is expected to be significantly earnings enhancing, and 
value creating, in the first full year of ownership on the basis of the terms of 
the Final Proposal3. 
 
The enlarged group will have an enhanced, diversified customer and skill base 
and will be financially strong and as such well positioned to benefit from the 
multiple opportunities the development of the outsourcing market will provide. 
 
The Final Proposal, through the offer of new VT shares, gives Mouchel 
shareholders the opportunity to benefit alongside VT shareholders from the 
exciting future of the enlarged group. 
 
VT is looking to enter constructive discussions with Mouchel on the basis of the 
Final Proposal. 
 
This Final Proposal is conditional inter alia on the completion of satisfactory 
due diligence typical for a transaction of this nature. 
 
This announcement does not constitute an offer or invitation to purchase 
securities nor an announcement of a firm intention to make an offer under Rule 
2.5 of the Code. Accordingly, there can be no certainty that an offer will be 
made, even if the conditions are satisfied or waived. 
 
In accordance with Rule 19.11 of the Code, a copy of this announcement will be 
published on VT's website: http://www.vtplc.com. 
 
Dealing Disclosure Requirements 
 
Under the provisions of Rule 8.3 of the  Code, if any person is, or becomes, 
"interested" (directly or indirectly) in 1% or more of any class of "relevant 
securities" of Mouchel or VT, all "dealings" in any "relevant securities" of 
that company (including by means of an option in respect of, or a derivative 
referenced to, any such "relevant securities") must be publicly disclosed by no 
later than 3.30 pm (London time) on the London business day following the date 
of the relevant transaction. This requirement will continue until the date on 
which the offer becomes, or is declared, unconditional as to acceptances, lapses 
or is otherwise withdrawn or on which the "offer period" otherwise ends. If two 
or more persons act together pursuant to an agreement or understanding, whether 
formal or informal, to acquire an "interest" in "relevant securities" of Mouchel 
or of VT, they will be deemed to be a single person for the purpose of Rule 8.3. 
 
Under the provisions of Rule 8.1 of the Code, all "dealings" in "relevant 
securities" of Mouchel or VT by Mouchel or VT, or by any of their respective 
"associates", must be disclosed by no later than 12.00 noon (London time) on the 
London business day following the date of the relevant transaction. A disclosure 
table, giving details of the companies in whose "relevant securities" "dealings" 
should be disclosed, and the number of such securities in issue, can be found on 
the Takeover Panel's website at www.thetakeoverpanel.org.uk. 
 
"Interests in securities" arise, in summary, when a person has long economic 
exposure, whether conditional or absolute, to changes in the price of 
securities. In particular, a person will be treated as having an "interest" by 
virtue of the ownership or control of securities, or by virtue of any option in 
respect of, or derivative referenced to, securities. 
 
Terms in quotation marks are defined in the Code, which can also be found on the 
Panel's website. If you are in any doubt as to whether or not you are required 
to disclose a "dealing" under Rule 8, you should consult the Panel. 
 
=----------------------- 
Notes: 
 
1.   VT reserves the right to make any offer at a lower price or on less 
favourable terms (including a smaller cash alternative) with the agreement or 
recommendation of the Mouchel Board. VT reserves the right to vary the form and 
/ or mix of the consideration in the Final Proposal.  Furthermore, VT reserves 
the right (subject to the provisions of Rule 2.4(c) of the Code) to reduce the 
value of the Final Proposal by the amount of any dividend announced, declared or 
paid by Mouchel. 
 
The partial cash alternative is equal to GBP171.4 million which represents 50% 
of the value of the Final Proposal based on a value of 305 pence per Mouchel 
share and 112,369,719 Mouchel shares remaining outstanding. 
 
2.   The Final Proposal is final and will not be increased, except (i) if 
required pursuant to Rule 2.4(c) of the Code; and (ii) that VT reserves the 
right to increase the Final Proposal if an offer or a possible offer for Mouchel 
by a third party offeror or potential offeror is announced. 
 
3.   Nothing in this announcement is intended to be a profit forecast and the 
statements in this announcement should not be interpreted to mean that the 
earnings per share for the current or future financial periods will necessarily 
be greater than those for the relevant preceding financial period. 
 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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