VT Group plc - Rejection of Babcock's proposal

 

TIDMVTG TIDMBAB 
 
RNS Number : 1785H 
VT GROUP PLC 
15 February 2010 
 

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| 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   | 
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| 15 February 2010           |                                             | 
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| VT Group plc - Rejection of Babcock's proposal                           | 
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VT Group plc ("VT" or the "Company") notes the announcement by Babcock 
International Group plc ("Babcock") and confirms that it received a preliminary 
approach from Babcock on 3 February regarding a possible offer for the Company. 
 
The Board carefully considered, together with its advisers, Rothschild and 
Merrill Lynch International, the preliminary approach, which relies on the 
return of the net cash proceeds from the exit of BVT, of which VT shareholders 
already have the benefit, and concluded that it was strategically unsound and at 
a level which substantially undervalued the Company and its prospects.  The 
Board was unanimous in rejecting this approach. 
 
This proposal follows on from two similar approaches made by Babcock last 
summer, which the Board of VT also considered carefully and rejected at that 
time. 
 
Babcock's proposal would have resulted in VT shareholders holding shares in the 
enlarged group.  VT has pursued over the last five years a successful growth 
strategy of developing a broader based support services business, with reduced 
exposure to MoD. With the acquisition of DML in 2007, Babcock has by contrast 
increased its exposure to the MoD marine sector.  A combination with Babcock 
would therefore represent a retrograde step in VT's strategy and would increase 
VT shareholders' exposure to MoD cut backs. 
 
The Board of VT believes that Babcock faces serious strategic challenges and 
that VT has a clear and established growth strategy focused on support services 
that would be further enhanced by the addition of Mouchel. 
 
This announcement has not been made with the consent of Babcock and there can be 
no certainty that an offer will be forthcoming or as to the terms of any offer. 
 
A copy of this announcement will be available at www.vtplc.com. 
 
 
The Directors of VT accept responsibility for the information contained in this 
announcement.  To the best of knowledge and belief of the Directors of VT, who 
have taken all reasonable care to ensure such is the case, the information 
contained in this announcement is in accordance with the facts and does not omit 
anything likely to affect the import of such information 
 
 
Dealing Disclosure Requirements 
 
Under the provisions of Rule 8.3 of the Takeover Code (the "Code"), if any 
person is, or becomes, "interested" (directly or indirectly) in 1% or more of 
any class of "relevant securities" of VT or Babcock, 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 VT or Babcock, 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 VT or Babcock by Babcock 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. 
 
N.M. Rothschild & Sons Limited ("Rothschild") and Merrill Lynch International 
("MLI"), which are authorised and regulated by the Financial Services Authority 
in the United Kingdom, are acting for VT and for no one else in connection with 
the subject matter of this announcement and will not be responsible to any 
person other than VT for providing the protections afforded to clients of 
Rothschild and MLI, nor for providing advice in relation to the subject matter 
of this announcement or any matter referred to herein. Neither Rothschild nor 
MLI nor any of their subsidiaries, branches or affiliates owes or accepts any 
duty, liability or responsibility whatsoever (whether direct or indirect, 
whether in contract, in tort, under statute or otherwise) to any person who is 
not a client of Rothschild or MLI in connection with this announcement, any 
statement contained herein or otherwise. 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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