RNS Number:2991K
John Hargreaves
11 October 2006
Not for release, publication or distribution, in whole or in part, in or into or
from any jurisdiction where to do so would constitute a violation of the
relevant laws of such jurisdiction
Missouri Bidco reserves its rights, with the agreement of Matalan and the
consent of the Takeover Panel, to implement its acquisition of Matalan by way of
a takeover offer under the Takeover Code
11 October 2006
RECOMMENDED PROPOSALS FOR THE ACQUISITION
of
MATALAN PLC
by
MISSOURI BIDCO LIMITED
to be effected
by means of a Scheme of Arrangement
Summary
The board of Missouri Bidco and the Independent Directors of Matalan
are pleased to announce that they have reached agreement on the terms of a
recommended cash acquisition by Missouri Bidco of the issued and to be issued
share capital of Matalan not already owned by the Hargreaves Family Holders. It
is intended that the Acquisition be implemented by means of a scheme of
arrangement under section 425 of the Companies Act.
Missouri Bidco is a newly incorporated company that has been formed for
the purposes of completing the Acquisition. Missouri Bidco is a wholly owned
subsidiary of Missouri Topco which will initially be 100 per cent. owned by the
Hargreaves Family Holders. It is the Hargreaves Family Holders' intention to
make equity share capital of Missouri Topco available for subscription by the
new executive management of the Matalan Group.
Under the terms of the Acquisition Matalan Shareholders (other than the
Hargreaves Family Holders) will receive 200 pence in cash for each Matalan
Share. On this basis, the terms of the Acquisition value the existing issued
share capital of Matalan at approximately #817.2 million.
The consideration of 200 pence for each Matalan Share represents a
premium of approximately 20.8 per cent. to the Closing Price of 165.5 pence per
share on 29 June 2006, the last Business Day prior to Matalan's announcement
that Mr John Hargreaves, the Chairman of the Board, had indicated that he was
contemplating a possible offer for Matalan.
The consideration due under the Acquisition will be met out of
facilities arranged and fully underwritten by Kaupthing.
The Independent Directors, who have been so advised by Merrill Lynch,
consider the terms of the Acquisition to be fair and reasonable. In providing
advice to the Independent Directors, Merrill Lynch has taken into account the
commercial assessments of the Independent Directors. Accordingly, the
Independent Directors have unanimously agreed to recommend that Matalan
Shareholders vote in favour of the Scheme, as Lord Harris and Martin Reavley
(being the only Independent Directors who hold or whose families hold Matalan
Shares) have irrevocably undertaken to do in respect of their own and their
family's beneficial shareholdings of 45,000 Matalan Shares.
Missouri Bidco has received irrevocable undertakings to vote in favour
of the Scheme in respect of a total of 169,111 Matalan Shares, representing, in
aggregate, approximately 0.04 per cent. of Matalan's existing issued share
capital.
The Hargreaves Family Holders currently hold 218,688,222 Matalan
Shares, representing approximately 53.5 per cent. of the existing issued share
capital of Matalan. Because the Scheme does not apply to their Matalan Shares t
he Hargreaves Family Holders are precluded from voting at the Court Meeting.
However, by a separate agreement the Hargreaves Family Holders have agreed,
conditional upon the Scheme becoming effective, to exchange their Matalan Shares
for shares in Missouri Topco.
Approval of the Acquisition will be sought from the Matalan
Shareholders at the Court Meeting and the EGM. In order to become effective, the
Scheme must be approved at the Court Meeting by the passing of a resolution by a
majority in number of the Scheme Shareholders, present and voting, either in
person or by proxy, representing not less than 75 per cent. in value of the
Matalan Shares that are held by such Scheme Shareholders. In addition, the
Special Resolution must be passed by Matalan Shareholders representing at least
75 per cent. of the votes cast at the EGM. Implementation of the Scheme will
also require the sanction of the Scheme by the Court.
Commenting on the Acquisition, Geoff Brady, Senior Independent Director of
Matalan, said:
"The Independent Directors of Matalan have considered this offer from John
Hargreaves very carefully. We believe that this offer provides Matalan
shareholders with an opportunity to realise the value of their investment in
cash at a price that fairly reflects the future prospects for the company."
Commenting on the Acquisition, John Hargreaves said:
"I am pleased we have come to an agreement to acquire the remaining shares
in Matalan and that we have a full recommendation from the Independent
Directors. The offer of 200 pence is full and fair and I would urge
shareholders to accept the proposal.
The company's recent difficulties have led me to believe that Matalan would be
better off back in the private ownership of the Hargreaves family. This will
enable us to make the necessary changes to the business and restore the original
values and ethos that enabled the company to grow."
This summary should be read in conjunction with the full text of the following
announcement and the Appendices. The Acquisition will be subject to the
conditions set out in Appendix I to this announcement and to the further terms
to be set out in the Scheme Circular.
Enquiries:
PricewaterhouseCoopers LLP (Financial adviser to Missouri Bidco)
Colin Gillespie Tel: +44 (0) 161 245 2461
Richard Pulford Tel: +44 (0) 161 245 2461
Stuart McKee Tel: +44 (0) 161 245 2461
Kaupthing Limited (Joint financial adviser to Missouri Bidco)
Helgi Bergs Tel: +44 (0) 20 3205 5000
Financial Dynamics (PR adviser to Missouri Bidco)
Jonathon Brill Tel: +44 (0) 20 7269 7100
Matalan PLC
Geoff Brady (Senior Independent Director of Matalan) Tel: +44 (0) 1695 552 400
Merrill Lynch (Financial adviser to Matalan)
Simon Mackenzie-Smith Tel: +44 (0) 20 7628 1000
Kevin J. Smith Tel: +44 (0) 20 7628 1000
Simon Fraser (Corporate Broking) Tel: +44 (0) 20 7628 1000
Charles Thurstan (Corporate Broking) Tel: +44 (0) 20 7628 1000
Tulchan Communications (PR adviser to Matalan)
Kirstie Hamilton Tel: +44 (0) 20 7353 4200
Celia Gordon Shute Tel: +44 (0) 20 7353 4200
Terms used in this summary shall have the meaning given to them in the full
announcement. All times referred to are London times unless otherwise stated.
PricewaterhouseCoopers LLP, which is authorised and regulated in the United
Kingdom by the Financial Services Authority for investment business, is acting
exclusively for Missouri Bidco and no one else in relation to the Proposals and
will not be responsible to anyone other than Missouri Bidco for providing the
protections afforded to clients of PricewaterhouseCoopers LLP or for providing
advice in relation to the Proposals.
Kaupthing Limited, which is authorised and regulated in the United Kingdom by
the Financial Services Authority is acting exclusively for Missouri Bidco and no
one else in relation to the Proposals and will not be responsible to anyone
other than Missouri Bidco for providing the protections afforded to clients of
Kaupthing Limited or for providing advice in relation to the Proposals or in
relation to the contents of this announcement or any transaction or arrangement
referred to herein.
Merrill Lynch International is acting exclusively for Matalan and no one else in
relation to the Acquisition and will not be responsible to anyone other than
Matalan for providing the protections afforded to clients of Merrill Lynch
International or for providing advice in relation to the Acquisition.
This announcement is not intended to, and does not, constitute or form part of
any offer to sell or an invitation to purchase any securities or the
solicitation of any vote or approval in any jurisdiction pursuant to the
Proposals or otherwise. The Proposals will be made solely through the Scheme
Circular, which will contain the full terms and conditions of the Proposals,
including details of how to vote in respect of the Proposals. Any acceptance or
other response to the Proposals should be made only on the basis of the
information in the Scheme Circular. Matalan Shareholders are advised to read
carefully the formal documentation in relation to the Acquisition once it has
been despatched.
The distribution of this announcement in jurisdictions other than the UK may be
restricted by law and therefore any persons who are subject to the laws of any
jurisdiction other than the UK should inform themselves about, and observe, any
applicable requirements. This announcement has been prepared for the purpose of
complying with English law and the Takeover 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 England.
Copies of this announcement 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 this announcement
(including custodians, nominees and trustees) must not mail or otherwise
forward, distribute or send it in or into or from any Restricted Jurisdiction.
If the acquisition is implemented by way of an Offer (unless otherwise
determined by Missouri Bidco and permitted by applicable law and regulation),
the Offer may not be made, directly or indirectly, in or into or by the use of
the mails of, or by any other means or instrumentality (including, without
limitation, electronic mail, facsimile transmission, telex, telephone, internet
or other forms of electronic communication) of interstate or foreign commerce
of, or any facility of a national state or securities exchange of any Restricted
Jurisdiction and the Offer may not be capable of acceptance by any such use,
means, instrumentality or facility.
This document contains certain forward-looking statements with respect to the
financial condition, results of operations and business of Matalan and the
Matalan Group and certain plans and objectives of the boards of directors of
Matalan and Missouri Bidco. These forward-looking statements can be identified
by the fact that they do not relate only to historical or current facts.
Forward-looking statements often use words such as "anticipate", "target",
"expect", "estimate", "intend", "plan", "goal", "believe", "will", "may",
"should", "would", "could" or other words of similar meaning. By their nature,
forward-looking statements involve risks and uncertainties that could cause
actual results and developments to differ materially from those expressed in or
implied by such forward-looking statements. Many of these risks and
uncertainties relate to factors that are beyond Matalan's and Missouri Bidco's
abilities to control or estimate precisely, such as future market conditions and
the behaviours of other market participants, and therefore undue reliance should
not be placed on such statements. Should one or more of these risks or
uncertainties materialise, or should underlying assumptions prove incorrect,
actual results may vary materially from those described in this document.
Matalan and Missouri Bidco assume no obligation and do not intend to update or
correct these forward-looking statements, except as required pursuant to
applicable law.
Dealing Disclosure Requirements
Under the provisions of Rule 8.3 of the Takeover Code, if any person is, or
becomes, "interested" (directly or indirectly) in one per cent. or more of any
class of "relevant securities" of Matalan, all "dealings" in any such "relevant
securities" (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 p.m. on the London business day following the date of the
relevant transaction. This requirement will continue until the date on which the
Proposals become effective, lapse, are withdrawn, or upon the "offer period"
otherwise ending. 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 Matalan, 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 Takeover Code,
all "dealings" in "relevant securities" of Matalan by Missouri Bidco or by
Matalan, or by any of their respective "associates", must be disclosed by no
later than 12.00 noon 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 the virtue
of any option in respect of, or derivative referenced to, securities. Terms in
quotation marks are defined in the Takeover Code, which can also be found on the
Takeover 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 Takeover
Panel.
Not for release, publication or distribution, in whole or in part, in or into or
from any jurisdiction where to do so would constitute a violation of the
relevant laws of such jurisdiction
Missouri Bidco reserves its rights, with the agreement of Matalan and the
consent of the Takeover Panel, to implement its acquisition of Matalan by way of
a takeover offer under the Takeover Code
11 October 2006
RECOMMENDED PROPOSALS FOR THE ACQUISITION
of
MATALAN PLC
by
MISSOURI BIDCO LIMITED
to be effected
by means of a Scheme of Arrangement
1. Introduction
The board of Missouri Bidco and the Independent Directors of Matalan are pleased
to announce that they have reached agreement on the terms of a recommended cash
acquisition by Missouri Bidco of the issued and to be issued share capital of
Matalan not already owned by the Hargreaves Family Holders. It is intended that
the Acquisition be implemented by means of a scheme of arrangement under
section 425 of the Companies Act.
Missouri Bidco is a newly incorporated company that has been formed for the
purpose of completing the Acquisition. Missouri Bidco is a wholly owned
subsidiary of Missouri Topco which will initially be 100 per cent. owned by the
Hargreaves Family Holders. It is the Hargreaves Family Holders' intention to
make equity share capital of Missouri Topco available for subscription by the
new executive management of the Matalan Group.
2. The Acquisition
It is intended that the Acquisition will be effected by way of a Court approved
scheme of arrangement under section 425 of the Companies Act. Under the terms of
the Scheme, which will be subject to the Conditions and certain terms set out in
this announcement and to the further terms to be set out in the Scheme Circular,
Matalan Shareholders (other than the Hargreaves Family Holders) will receive:
for each Matalan Share 200 pence in cash
The terms of the Acquisition represent a premium of 20.8 per cent. to the
Closing Price of 165.5 pence per share on 29 June 2006, the last Business Day
prior to Matalan's announcement that Mr John Hargreaves, the Chairman of the
Board, had indicated that he was contemplating a possible offer for Matalan.
The Acquisition values the existing issued share capital of Matalan at
approximately #817.2 million.
3. Recommendation
The Independent Directors, who have been so advised by Merrill Lynch, consider
the terms of the Acquisition to be fair and reasonable. In providing advice to
the Independent Directors, Merrill Lynch has taken into account the commercial
assessments of the Independent Directors. Accordingly, the Independent Directors
have unanimously agreed to recommend that Matalan Shareholders vote in favour of
the Scheme, as Lord Harris and Martin Reavley (being the only Independent
Directors who hold or whose families hold Matalan Shares) have irrevocably
undertaken to do in respect of their own and their family's beneficial
shareholdings of 45,000 Matalan Shares.
4. Shareholdings and undertakings to vote in favour of the Scheme
The Hargreaves Family Holders currently hold 218,688,222 Matalan Shares,
representing approximately 53.5 per cent. of the existing issued share capital
of Matalan. Because the Scheme will not apply to their Matalan Shares, the
Hargreaves Family Holders will not be entitled to vote at the Court Meeting and
their Matalan Shares will not therefore count towards the majority required to
approve the Scheme. However, by a separate agreement the Hargreaves Family
Holders have agreed, conditional upon the Scheme becoming effective, to exchange
their Matalan Shares for shares in Missouri Topco.
Missouri Bidco has received irrevocable undertakings to vote in favour of the
Scheme at the Court Meeting and in favour of the Special Resolution at the EGM
in respect of a total of 169,111 Matalan Shares, representing, in aggregate,
approximately 0.04 per cent. of Matalan's existing issued share capital. These
irrevocable undertakings have been received from:
(a) Lord Harris and Martin Reavley (being the only Independent Directors who
hold or whose families hold Matalan Shares), in respect of their own or
their family's beneficial holdings of a total of 45,000 Matalan Shares; and
(b) John King and Phil Dutton (executive directors of Matalan), in respect
of their registered and beneficial holdings of a total of 124,111 Matalan
Shares.
These irrevocable undertakings will continue to be binding in the event of a
higher competing offer for Matalan.
5. Background to and reasons for the recommendation
The retail trading environment in the UK continues to be a challenge in a rising
interest rate environment. Matalan's strong focus this year has been on
improving margins and cashflow and maximising efficiencies in the business,
while investing in the store portfolio. Although some of these initiatives, such
as improving supplier terms and stock management, are starting to show tangible
results, it remains difficult to attach a high degree of certainty to any
anticipated recovery in like-for-like sales performance.
The Independent Directors consider the terms of the Acquisition to be fair and
reasonable and believe that it represents an opportunity for Matalan
Shareholders to realise, in cash, the value of their investment in Matalan at a
price that fairly reflects the future prospects for the Company. In arriving at
their decision to recommend the Acquisition, the Independent Directors have
taken into account Mr Hargreaves' and his family's majority shareholding in
Matalan and its limiting effect on Matalan's ability to attract any alternative
offer.
6. Information on Matalan
Matalan is engaged in the sale of clothing and homewares. Its core areas in
clothing include ladies tops, skirts, men's t-shirts and formal trousers, and
childrenswear ranges. Matalan is one of the largest clothing and homewares
retailers in the United Kingdom.
In the 52 week period to 25 February 2006, sales from continuing operations
declined by 3.9 per cent. to #1,068.9 million (52 week period ended 26 February
2005: #1,112.3 million) with like-for-like sales down 6.9 per cent. (2005: up
4.5 per cent.). Profit before tax and exceptional items was #56.7 million (2005:
#80.5 million). Basic earnings per share from continuing operations for the 52
week period to 25 February 2006 amounted to 6.2 pence (2005: 12.6 pence), with
total dividends maintained at 8.9 pence per share (2005: 8.9 pence per share).
7. Current trading
6 week period ended*
--------------------
7 October 2006 8 October 2005
------------------------ ----------- -----------
Clothing (exc. promotional 'grey market')** -1.9% -5.0%
Clothing (inc. promotional 'grey market')** -2.6% -8.2%
------------------------ ----------- -----------
Total like-for-like growth*** -3.9% -10.4%
Resize/Closures -1.4% +0.4%
New space +4.8% +1.8%
Total growth -0.6% -8.2%
Gross margin improvement +4.1% -0.2%
------------------------ ----------- -----------
* Current period like-for-like sales growth is based on 181 stores which have
traded from the same retail selling space since 26 February 2005
** Grey market relates to promotional branded product
*** Includes Home sales
In the six week period to 7 October 2006, total sales reduced by 0.6 per cent.
and like-for-like sales for the period reduced by 3.9 per cent. Trading patterns
over the last six weeks have been heavily influenced by the weather with a poor
performance being seen in the warmer, wetter weeks. However, the tighter control
over inventory levels and commitments has mitigated against any potential early
season markdown risk. The final stages of the repositioning of Homewares are now
being completed and Matalan's new Christmas ranges will be launched in store on
16 October 2006.
In line with Matalan's stated agenda to improve profitability, in the six week
period to 7 October 2006 gross margins have increased by 4.1 per cent. (2005:
reduced by 0.2 per cent.). Bought-in margins are up 3.2 per cent. in the period,
driven by better sourcing and an improved currency position. Markdowns have also
improved by 0.9 per cent. It should be remembered that the clearance activity
for the Homewares Christmas ranges last year reduced second half gross margin by
circa 1 per cent. Although the early phases of this year's ranges have performed
well, it is still too early to evaluate the extent of the recovery for this
year.
Matalan's interim results for the 26 weeks ended 26 August 2006 will be
published on 31 October 2006.
8. Information on the Missouri Bidco Group
(a) Missouri Bidco
Missouri Bidco is a limited liability company incorporated in England
and Wales for the purposes of implementing the Acquisition. Missouri
Bidco is a wholly-owned subsidiary of Missouri Topco (see further in
paragraph (b) below)and has an authorised share capital of #30,000,000
divided into 300,000,000 shares of 10 pence each. Missouri Bidco has not
traded since its incorporation, nor has it entered into any obligations,
other than in connection with the Acquisition.
The current directors of Missouri Bidco are John Hargreaves, Alistair
McGeorge and John Mills. The registered office of Missouri Bidco is
Victoria Square House, Victoria Square, Birmingham B2 4DL and its
registered number is 5962488.
(b) Missouri Topco
Missouri Topco is a limited liability company incorporated in Guernsey
in connection with the implementation of the Acquisition. Missouri Topco
will on the Effective Date be owned by the Hargreaves Family Holders and
executive management of the Missouri Bidco Group, Alistair McGeorge and
John Mills. Missouri Topco has an authorised share capital of
#33,000,000 divided into 330,000,000 A ordinary shares of 10 pence each.
Missouri Topco has not traded since its incorporation, nor has it
entered into any obligations other than in connection with the
Acquisition.
The current directors of Missouri Topco are John Hargreaves, Alistair
McGeorge and John Mills. The registered office of Missouri Topco is
National Westminster House, Le Truchot, St Peter Port, Guernsey GY1 4ND
and its registered number is 45618.
9. Future plans for Matalan
In recent years Matalan's once dominant position in the budget retail market has
been eroded with a number of new competitors entering its market. Whilst the
Directors of Missouri Bidco believe that a number of factors contributed to the
recent down turn in trading and loss of competitive strength relative to its
peers, they are confident that Matalan's business fundamentals remain strong.
Matalan has an authoritative product range, excellent reputation for value, a
loyal and well-understood customer base and a strong market share in a number of
key product areas.
The Directors of Missouri Bidco have well-developed plans for Matalan's business
which include continuing Matalan's existing programme of maximising business
efficiencies. The proposed strategy focuses on a simplification of the business
architecture with a greater focus on cash efficiency and profitability. The
Directors of Missouri Bidco believe that private ownership would provide more
flexibility to realise the potential for appropriate improvements in areas such
as product buying, space utilisation, store opening and working capital
management.
10. Management and employees
Following the Scheme becoming effective, Missouri Bidco intends to appoint new
directors to the Board of Matalan, including Alistair McGeorge as Chief
Executive Officer. The current Chief Executive, John King, is due to leave
Matalan on 31 December 2006 as previously announced. John Hargreaves will remain
as Chairman of Matalan and it is expected that the senior management of Matalan
will continue to be involved in the ongoing business of Matalan.
The Board of Missouri Bidco has given assurances to the Independent Directors
that, following the Scheme becoming effective, the existing employment rights,
including pension rights, of the employees of Matalan Group will be honoured.
Missouri Bidco's plans for Matalan do not involve any immediate change in the
conditions or terms of employment of Matalan employees.
11. Matalan Share Schemes
Appropriate proposals will be made in due course to participants in the Matalan
Share Schemes. Where practicable, a cashless exercise facility will be made
available to participants in the Matalan 1998 Unapproved Executive Share Option
Scheme.
12. Financing
The consideration payable under the Acquisition and the costs of the Acquisition
will be met out of #408 million of debt facilities arranged and fully
underwritten by Kaupthing.
Under the agreements for the provision of the debt facilities, Missouri Bidco
has agreed, save as may be required by the Court, not to waive or amend any term
or condition to the Scheme without the prior written consent of Kaupthing.
PricewaterhouseCoopers LLP has confirmed that it is satisfied that sufficient
resources are available to Missouri Bidco to satisfy the full cash consideration
payable to Matalan Shareholders under the terms of the Acquisition. Further
information on the financing of the Acquisition will be set out in the Scheme
Circular.
13. Scheme of Arrangement
It is intended that the Acquisition will be effected by means of a scheme of
arrangement between Matalan and the Scheme Shareholders under Section 425 of the
Companies Act (although Missouri Bidco reserves the right to elect to effect the
Acquisition by way of an Offer). The purpose of the Scheme is to enable Missouri
Bidco to become the owner of the issued share capital of Matalan not currently
owned by the Hargreaves Family Holders. This is to be achieved by the
cancellation of the Scheme Shares held by Scheme Shareholders and the
application of the reserve arising from such cancellation in paying up in full a
number of new Matalan Shares (which is equal to the number of Scheme Shares
cancelled) and issuing the new Matalan Shares to Missouri Bidco in consideration
for which Scheme Shareholders will receive consideration on the basis set out in
section 2 of this announcement.
The implementation of the Acquisition is subject to the satisfaction or waiver
of all the Conditions. In particular, the Scheme requires the passing of a
resolution at the Court Meeting by a majority in number of the Scheme
Shareholders present and voting, either in person or by proxy, representing not
less than 75 per cent. in value of the Matalan Shares held by such Scheme
Shareholders. The Hargreaves Family Holders will not be entitled to attend or
vote at the Court Meeting to approve the Scheme.
Implementation of the Scheme will also require the passing of the Special
Resolution at the EGM. The Special Resolution will require the approval of
Matalan Shareholders representing at least 75 per cent of the votes cast at the
EGM.
Following the Meetings, the Scheme will only become effective following sanction
by the Court and delivery of the Court Order to and, in the case of the Capital
Reduction, registration of the Court Order by, the Registrar of Companies.
Upon the Scheme becoming effective, it will be binding on all Scheme
Shareholders, irrespective of whether or not they attended or voted at the Court
Meeting or the EGM.
Further details of the Scheme will be contained in the Scheme Circular.
14. Framework and inducement fee agreements
Missouri Bidco and Matalan have entered into the Framework Agreement which
governs their relationship during the period until the Scheme becomes effective,
lapses or is withdrawn. Among other things, the parties have agreed to
co-operate to implement the Acquisition.
Under the Framework Agreement, Matalan has agreed to pay to Missouri Bidco a fee
of #3.8 million, representing 1 per cent. of the funds required to acquire the
Scheme Shares at the offer price of 200 pence per share, in the event that
either the Independent Directors withdraw or adversely amend their
recommendation of the Acquisition prior to the date of the Court Meeting and EGM
or Matalan breaches the terms of the Framework Agreement and, as a result of
such breach, the Scheme does not become effective.
Clause 5 of the Framework Agreement, referred to in paragraph 3(g) of
Appendix I, imposes certain obligations on Matalan in relation to the operation
of the Matalan Share Schemes. The full terms of the Framework Agreement will be
summarised in the Scheme Circular.
15. Disclosure of interests in Matalan
As at the close of business on 10 October 2006, being the latest Business Day
prior to this announcement, save for the 218,688,222 Matalan Shares held by the
Hargreaves Family Holders and the information set out in the following paragraph
of this section 15, none of Missouri Bidco (nor any of the Missouri Bidco
Directors), nor, so far as Missouri Bidco is aware, any person deemed to be
acting in concert with Missouri Bidco, owns or controls any Matalan Shares or
any securities convertible or exchangeable into Matalan Shares (including
pursuant to any long exposure, whether conditional or absolute, to changes in
the prices of securities) or any rights to subscribe for or purchase the same,
or holds any options (including traded options) in respect of, or has any option
to acquire, any Matalan Shares or has entered into any derivatives referenced to
Matalan Shares ("Relevant Matalan Securities") which remain outstanding, nor
does any such person hold any short positions in relation to Relevant Matalan
Securities (whether conditional or absolute and whether in money or otherwise)
including any short position under a derivative, any agreement to sell or any
delivery obligation or right to require another person to purchase or take
delivery, nor does any such person have any arrangement in relation to Relevant
Matalan Securities. An "arrangement" also includes any indemnity or option
arrangement, any agreement or understanding, formal or informal, of whatever
nature, relating to Relevant Matalan Securities which may be an inducement to
deal or refrain from dealing in such securities.
As at the close of business on 10 October 2006, Missouri Bidco was aware that
certain entities within Kaupthing's group were interested in a total of 786,937
Matalan Shares, representing approximately 0.2 per cent. of the existing issued
share capital of Matalan.
16. Delisting, cancellation of trading and re-registration
If the Scheme becomes effective, it is intended that applications be made to the
United Kingdom Listing Authority for the listing of Matalan Shares on the
Official List to be cancelled and to the London Stock Exchange for the
cancellation of trading of Matalan Shares on its market for listed securities,
in each case to take effect on the date which is two Business Days after the
Effective Date.
It is proposed that, following the Scheme becoming effective and after the
Matalan Shares have been de-listed, Matalan will be re-registered as a private
limited company.
17. General
The Acquisition will be subject to the Conditions and to the further terms set
out in this announcement and the Scheme Circular. The Scheme Circular will
include full details of the Scheme, together with notices of the Court Meeting
and the Matalan EGM.
In deciding whether or not to vote in favour of the Scheme, Matalan Shareholders
should rely on the information contained in, and follow the procedures described
in, the Scheme Circular and accompanying forms of proxy.
The Acquisition will be governed by English law and be subject to the applicable
requirements of the Takeover Code, the Takeover Panel, the London Stock Exchange
and the United Kingdom Listing Authority.
The implications of the Scheme for persons not resident in the UK may be
affected by the laws of the relevant jurisdiction. Any persons who are subject
to the laws of any jurisdiction other than the UK should inform themselves about
and observe any applicable requirements.
Enquiries:
PricewaterhouseCoopers LLP (Financial adviser to Missouri Bidco)
Colin Gillespie Tel: +44 (0) 161 245 2461
Richard Pulford Tel: +44 (0) 161 245 2461
Stuart McKee Tel: +44 (0) 161 245 2461
Kaupthing Limited (Joint financial adviser to Missouri Bidco)
Helgi Bergs Tel: +44 (0) 20 3205 5000
Financial Dynamics (PR adviser to Missouri Bidco)
Jonathon Brill Tel: +44 (0) 20 7269 7100
Matalan PLC
Geoff Brady (Senior Independent Director of Matalan) Tel: +44 (0) 1695 552 400
Merrill Lynch (Financial adviser to Matalan)
Simon Mackenzie-Smith Tel: +44 (0) 29 7628 1000
Kevin J. Smith Tel: +44 (0) 20 7628 1000
Simon Fraser (Corporate Broking) Tel: +44 (0) 20 7628 1000
Charles Thurstan (Corporate Broking) Tel: +44 (0) 20 7628 1000
Tulchan Communications (PR adviser to Matalan)
Kirstie Hamilton Tel: +44 (0) 20 7353 4200
Celia Gordon Shute Tel: +44 (0) 20 7353 4200
PricewaterhouseCoopers LLP, which is authorised and regulated in the United
Kingdom by the Financial Services Authority for investment business, is acting
exclusively for Missouri Bidco and no one else in relation to the Proposals and
will not be responsible to anyone other than Missouri Bidco for providing the
protections afforded to clients of PricewaterhouseCoopers LLP or for providing
advice in relation to the Proposals.
Kaupthing Limited, which is authorised and regulated in the United Kingdom by
the Financial Services Authority, is acting exclusively for Missouri Bidco and
no one else in relation to the Proposals and will not be responsible to anyone
other than Missouri Bidco for providing the protections afforded to clients of
Kaupthing Limited or for providing advice in relation to the Proposals or in
relation to the contents of this announcement or any transaction or arrangement
referred to herein.
Merrill Lynch International is acting exclusively for Matalan and no one else in
relation to the Acquisition and will not be responsible to anyone other than
Matalan for providing the protections afforded to clients of Merrill Lynch
International or for providing advice in relation to the Acquisition.
This announcement is not intended to, and does not, constitute or form part of
any offer to sell or an invitation to purchase any securities or the
solicitation of any vote or approval in any jurisdiction pursuant to the
Proposals on otherwise. The Proposals will be made solely through the Scheme
Circular, which will contain the full terms and conditions of the Proposals,
including details of how to vote in respect of the Proposals. Any acceptance or
other response to the Proposals should be made only on the basis of the
information in the Scheme Circular. Matalan Shareholders are advised to read
carefully the formal documentation in relation to the Acquisition once it has
been despatched.
Appendix I to this announcement contains the conditions and certain further
terms of the Acquisition.
Appendix II to this announcement contains details of the bases and sources of
the financial information set out in this announcement.
Appendix III to this announcement contains definitions of certain expressions
used in this announcement.
All times referred to are London times.
The distribution of this announcement in jurisdictions other than the UK may be
restricted by law and therefore any persons who are subject to the laws of any
jurisdiction outside the UK should inform themselves about, and observe, any
applicable requirements. This announcement has been prepared for the purpose of
complying with English law and the Takeover 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 England.
Copies of this announcement 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 this announcement
(including custodians, nominees and trustees) must not mail or otherwise
forward, distribute or send it in or into or from any Restricted Jurisdiction.
If the acquisition is implemented by way of an Offer (unless otherwise
determined by Missouri Bidco and permitted by applicable law and regulation),
the Offer may not be made, directly or indirectly, in or into or by the use of
the mails of, or by any other means or instrumentality (including, without
limitation, electronic mail, facsimile transmission, telex, telephone, internet
or other forms of electronic communication) of interstate or foreign commerce
of, or any facility of a national state or securities exchange of any Restricted
Jurisdiction and the Offer may not be capable of acceptance by any such use,
means, instrumentality or facility.
This document contains certain forward-looking statements with respect to the
financial condition, results of operations and business of Matalan and the
Matalan Group and certain plans and objectives of the boards of directors of
Matalan and Missouri Bidco. These forward-looking statements can be identified
by the fact that they do not relate only to historical or current facts.
Forward-looking statements often use words such as "anticipate", "target",
"expect", "estimate", "intend", "plan", "goal", "believe", "will", "may",
"should", "would", "could" or other words of similar meaning. By their nature,
forward-looking statements involve risk and uncertainties that could cause
actual results and developments to differ materially from those expressed in or
implied by such forward-looking statements. Many of these risks and
uncertainties relate to factors that are beyond Matalan's and Missouri Bidco's
abilities to control or estimate precisely, such as future market conditions and
the behaviours of other market participants, and therefore undue reliance should
not be placed on such statements. Should one or more of these risks or
uncertainties materialise, or should underlying assumptions prove incorrect,
actual results may vary materially from those described in this document.
Matalan and Missouri Bidco assume no obligation and do not intend to update or
correct these forward looking statements, except as required pursuant to
applicable law.
Dealing Disclosure Requirements
Under the provisions of Rule 8.3 of the Takeover Code, if any person is, or
becomes, "interested" (directly or indirectly) in one per cent. or more of any
class of "relevant securities" of Matalan, all "dealings" in any such "relevant
securities" (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 p.m. on the London business day following the date of the
relevant transaction. This requirement will continue until the date on which the
Proposals become effective, lapse, are withdrawn, or upon the "offer period"
otherwise ending. 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 Matalan, 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 Takeover Code,
all "dealings" in " relevant securities" of Matalan by Missouri Bidco or by
Matalan, or by any of their respective "associates", must be disclosed by no
later than 12.00 noon 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 the virtue
of any option in respect of, or derivative referenced to, securities. Terms in
quotation marks are defined in the Takeover Code, which can also be found on the
Takeover 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 Takeover
Panel.
Appendix I: Conditions to the implementation of the Acquisition
1. The Acquisition will be conditional upon the Scheme becoming unconditional
and becoming effective by not later than 31 January 2007 or such later date (if
any) as Matalan and Missouri Bidco may agree and (if required) the Court may
allow.
2. The Scheme will be conditional upon:
(a) approval of the Scheme by a majority in number representing 75 per cent. or
more in value of Matalan Shareholders (other than the Hargreaves Family Holders)
present and voting, either in person or by proxy, at the Court Meeting;
(b) the resolution(s) in connection with or required to approve and implement
the Scheme being duly passed by the requisite majority at the Matalan EGM; and
(c) the sanction of the Scheme and the confirmation of the Capital Reduction by
the Court (in either case, with or without modifications on terms acceptable to
Matalan and Missouri Bidco) and the delivery of an office copy of the Court
Order and the minute of such reduction attached thereto to the Registrar of
Companies in England and Wales and the registration, in relation to the Capital
Reduction, of such Court Order by him.
3. Matalan and Missouri Bidco have agreed that, subject as stated in condition 4
below, the Acquisition will be conditional upon the following matters and,
accordingly, the office copy of the Court Order will not be delivered to the
Registrar of Companies in England and Wales and the registration of the Order
confirming the Capital Reduction with the Registrar of Companies in England and
Wales will not occur unless the Conditions (as amended if appropriate) have been
satisfied or waived:
(a) no government or governmental, quasi-governmental, supranational, statutory
or regulatory body or association, institution or agency (including any trade
agency) or any court or other body (including any professional or environmental
body) or person in any relevant jurisdiction (each a "Relevant Authority")
having decided to take, instituted, implemented or threatened any action,
proceeding, suit, investigation, enquiry or reference or enacted, made or
proposed and there not continuing to be outstanding any statute, regulation,
order or decision that would:
(i) make the Acquisition or its implementation void,unenforceable or illegal
under the laws of any relevant jurisdiction or directly or indirectly prohibit
or otherwise restrict, prevent or delay or interfere with the implementation of,
or impose additional conditions or obligations with respect to, or otherwise
challenge or interfere with the Acquisition;
(ii)require, prevent or materially delay the divestiture (or alter the terms
of any proposed divestiture) by any member of the Wider Missouri Bidco Group or
by any member of the Wider Matalan Group of all or any part of their respective
businesses, assets or properties or impose any material limitation on their
ability to conduct all or any part of their respective businesses and to own or
control any of their respective assets or properties which, in any such case, is
material in the context of the Wider Matalan Group taken as a whole;
(iii) impose any limitation on, or result in any delay in, the ability of any
member of the Wider Missouri Bidco Group to acquire or hold or to exercise
effectively, directly or indirectly, all or any rights of ownership of shares or
other securities (or the equivalent) in, or to exercise voting or management
control over, any member of the Wider Matalan Group or on the ability of any
member of the Wider Matalan Group to hold or exercise effectively, directly or
indirectly, all or any rights of ownership of shares or other securities (or the
equivalent) in, or to exercise management control over, any other member of the
Wider Matalan Group which, in any such case, is material in the context of the
Wider Matalan Group taken as a whole;
(iv) require any member of the Wider Missouri Bidco Group or of the Wider
Matalan Group to acquire or offer to acquire any shares or other securities (or
the equivalent) in any member of the Wider Matalan Group or any asset owned by
any third party (other than in the implementation of the Acquisition) which, in
any such case, is material in the context of the Wider Matalan Group taken as a
whole;
(v) impose any limitation on the ability of any member of the Wider Matalan
Group to conduct or integrate or co-ordinate its business, or any part of it,
with the businesses or any part of the businesses of any other member of the
Wider Matalan Group which, in any such case, is material in the context of the
Wider Matalan Group taken as a whole; or
(vi) otherwise adversely affect any or all of the business, assets, financial
or trading position or profits or prospects of any member of the Wider Matalan
Group to an extent which is material in the context of the Wider Matalan Group
taken as a whole,
and all applicable waiting and other time periods during which any such Relevant
Authority could decide to take, institute, implement or threaten any such
action, proceeding, suit, investigation, enquiry or reference or take any other
step under the laws of any jurisdiction in respect of the Acquisition or the
proposed acquisition of any shares in Matalan having expired, lapsed or been
terminated;
(b)
(i) all appropriate notifications, filings or applications which are the
responsibility of Matalan having been made in connection with the Acquisition;
(ii) all statutory or regulatory obligations in any jurisdiction having been
complied with and all applicable waiting periods (including any extensions
thereof) under any applicable legislation or regulation of any relevant
jurisdiction having expired, lapsed or been terminated in each case in respect
of the Acquisition;
(iii) all authorisations, orders, grants, recognitions, confirmations, licences,
consents, clearances, permissions and approvals (together "Authorisations")
reasonably necessary for the implementation of the Acquisition having been
obtained in terms and in a form reasonably satisfactory to Missouri Bidco (where
failure to obtain would have a material adverse effect on the Wider Matalan
Group, a member of the Wider Matalan Group or the ability of Missouri Bidco to
implement the Acquisition) from appropriate Relevant Authorities or from any
persons or bodies with whom any member of the Wider Missouri Bidco Group or the
Wider Matalan Group has entered into contractual arrangements;
(iv) such Authorisations together with all material Authorisations necessary for
any member of the Wider Matalan Group to carry on its business remaining in full
force and effect at the time the Scheme becomes effective and no intimation of
any intention to revoke, suspend, restrict or modify or not to renew any of the
same having been made at the time at which the Scheme becomes effective; and
(v) all necessary statutory or regulatory obligations in any relevant
jurisdiction having been complied with by the Wider Matalan Group;
(c) except as Disclosed, there being no provision of any agreement (other than
the Framework Agreement), arrangement, licence, permit or other instrument to
which any member of the Wider Matalan Group is a party or by or to which any
such member or any of its assets is or may be bound, entitled or subject which,
as a result of the making or implementation of the Acquisition, would or might
reasonably be expected to result in, to an extent which is material in the
context of the Wider Matalan Group taken as a whole:
(i) any monies borrowed by or any other indebtedness (actual or contingent) of
any such member of the Wider Matalan Group becoming repayable or capable of
being declared repayable immediately or earlier than the stated repayment date
or the ability of such member to borrow monies or incur any indebtedness being
withdrawn or inhibited or becoming capable of being withdrawn or inhibited;
(ii) the creation or enforcement of any mortgage, charge or other security
interest over the whole or any part of the business, property or assets of any
such member of the Wider Matalan Group or any such security interest (whenever
arising or having arisen) becoming enforceable;
(iii) any assets or interest of, or any asset the use of which is enjoyed by,
any such member of the Wider Matalan Group being or falling to be disposed of or
charged or any right arising under which any such asset or interest could be
required to be disposed of or charged or could cease to be available to any
member of the Wider Matalan Group;
(iv) the interest or business of any such member of the Wider
Matalan Group in or with any other person, firm or company (or any agreements or
arrangements relating to such interest or business) being terminated or
adversely affected;
(v) any such member of the Wider Matalan Group ceasing to be able to carry on
business under any name under which it presently does so;
(vi) the value of any such member of the Wider Matalan Group or its financial or
trading position or prospects being prejudiced or adversely affected;
(vii) any liability of any member of the Wider Matalan Group to make any
severance, termination, bonus or other payment to any of the directors or the
officers of the Wider Matalan Group;
(viii) any such agreement, arrangement, licence or other instrument or the
rights, liabilities, obligations or interests of any such member thereunder
being terminated or adversely modified or any onerous obligation arising or any
adverse action being taken or any obligation or liability arising thereunder; or
(ix) the creation of any liabilities (actual or contingent) by any such member
of the Wider Matalan Group,
and no event having occurred which, under any provision of any agreement (other
than the Framework Agreement), arrangement, licence, permit or other instrument
to which any member of the Wider Matalan Group is a party or by or to which any
such member or any of its assets may be bound or be subject, could reasonably be
expected to result in any of the events or circumstances as are referred to in
subparagraphs (i) to (ix) of this condition (c);
(d) except as Disclosed or save as contemplated by the Framework Agreement, no
member of the Wider Matalan Group having since 25 February 2006:
(i) save as between Matalan and wholly-owned subsidiaries of Matalan and save
for Scheme Shares issued pursuant to the Matalan Share Schemes or options
granted or awards of shares thereunder, issued or agreed to issue or authorised
the issue or grant of additional shares of any class, or securities, or
securities convertible into, or exchangeable for, or rights, warrants or options
to subscribe for or acquire, any such shares or convertible securities;
(ii) recommended, declared, paid or made any bonus, dividend or other
distribution, whether payable in cash or otherwise, other than a distribution by
any wholly-owned subsidiary of Matalan;
(iii) save for intra-Matalan Group transactions and other than in the ordinary
course of business, implemented or authorised any merger or demerger or acquired
or disposed of or transferred, mortgaged or charged, or created any other
security interest over, any asset or any right, title or interest in any asset
or authorised, proposed or announced its intention to propose the same;
(iv) implemented or authorised any reconstruction, amalgamation, scheme or other
transaction or arrangement which is, in any case, material in the context of the
Wider Matalan Group taken as a whole;
(v) save as between Matalan and wholly-owned subsidiaries of Matalan, purchased,
redeemed or repaid any of its own shares or other securities or reduced or, save
in respect of the matters referred to in sub-paragraph (i) above, made or
authorised any other change in its share capital;
(vi) save for intra-Matalan Group transactions and other than in the ordinary
course of business made or authorised any change in its loan capital or issued
or authorised the issue of any debentures or incurred or increased any
indebtedness or liability (actual or contingent) or proposed to do any of the
foregoing;
(vii) entered into, varied or terminated, or authorised the entry into,
variation or termination of, any contract, transaction, commitment or
arrangement (whether in respect of capital expenditure or otherwise), otherwise
than in the ordinary course of business, which is of a long term, onerous or
unusual nature or magnitude or which involves or could involve an obligation of
a nature or magnitude which is, in any such case, material in the context of the
Wider Matalan Group taken as a whole;
(viii) save as between Matalan and wholly-owned subsidiaries of Matalan, entered
into any contract, commitment or arrangement which would be restrictive on the
business of the Wider Matalan Group other than to a nature and extent which is
normal in the context of the business concerned;
(ix) been unable, or admitted in writing 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;
(x) taken any corporate action or had any steps taken or legal proceedings
started or threatened against it or petition presented or order made for its
winding-up (voluntary or otherwise), dissolution or reorganisation (or for any
analogous proceedings or steps in any jurisdiction) or for the appointment of a
receiver, administrator, administrative receiver, trustee or similar officer
(or for the appointment of any analogous person in any jurisdiction) of all or
any of its assets and revenues;
(xi) save as between Matalan and wholly-owned subsidiaries of Matalan, waived,
compromised or settled any claim which is material in the context of the Wider
Matalan Group taken as a whole;
(xii) entered into or varied the terms of any service agreement or arrangement
with any director or senior executive of Matalan or any member of the Wider
Matalan Group;
(xiii) made or agreed or consented to (other than in connection with the Scheme)
any alteration to its memorandum or articles of association or other
incorporation documents which is material in the context of the Wider Matalan
Group taken as a whole;
(xiv) modified the terms of any of the Matalan Share Schemes;
(xv) made or consented to any significant change to the terms of the trust deeds
or rules constituting the pension schemes established for its directors and/or
employees and/or their dependants or to the benefits which accrue, or to the
pensions which are payable thereunder, or to the basis on which qualification
for or accrual or entitlement to such benefits or pensions are calculated or
determined, or to the basis upon which the liabilities (including pensions) of
such pension schemes are funded or made, or agreed or consented to, any change
to the trustees in each case where the consequence would be material in the
context of the Wider Matalan Group taken as a whole;
(xvi) proposed, agreed to provide or modified in any respect the terms of any
share option scheme, incentive scheme or other benefit relating to the
employment or termination of employment of any person employed by the Wider
Matalan Group to the extent material in the context of the Wider Matalan Group
taken as a whole; or
(xvii) entered into any contract, commitment or arrangement or passed any
resolution or made any offer (which remains open for acceptance) with respect
to, or proposed or announced any intention to effect or propose, any of the
transactions, matters or events referred to in this condition;
(e) except as Disclosed, since 25 February 2006:
(i) no adverse change or deterioration having occurred in the business, assets,
financial or trading position or profits or prospects of any member of the Wider
Matalan Group which is material in the context of the Wider Matalan Group taken
as a whole;
(ii) no litigation, arbitration proceedings, prosecution or other legal
proceedings having been threatened, announced, instituted or remaining
outstanding by, against or in respect of any member of the Wider Matalan Group
or to which any member of the Wider Matalan Group is or may become a party
(whether as plaintiff or defendant or otherwise) and no enquiry or investigation
by or complaint or reference to any Relevant Authority or other investigative
body against or in respect of any member of the Wider Matalan Group having been
threatened, announced, implemented or instituted or remaining outstanding by,
against or in respect of any member of the Wider Matalan Group which, in any
such case, would or might reasonably be expected to materially adversely affect
the Wider Matalan Group taken as a whole;
(iii) no contingent or other liability having arisen which would or might
reasonably be expected to adversely affect the business, assets, financial or
trading position or profits or prospects of any member of the Wider Matalan
Group to an extent which is material to the Wider Matalan Group taken as a
whole; and
(iv) no steps having been taken and no omissions having been made which are
likely to result in the withdrawal, cancellation, termination or modification
of any licence held by any member of the Wider Matalan Group, which is necessary
for the proper carrying on of its business and the withdrawal, cancellation,
termination or modification of which is material in the context of the Wider
Matalan Group taken as a whole;
(f) Missouri Bidco not having discovered:
(i) save as Disclosed that any financial, business or other information
concerning the Wider Matalan Group publicly disclosed at any time by any member
of the Wider Matalan Group is materially misleading, contains a material
misrepresentation of fact or omits to state a fact necessary to make the
information contained therein not materially misleading in the context of the
Wider Matalan Group, taken as a whole;
(ii) save as Disclosed that any member of the Wider Matalan Group or any
partnership, company or other entity in which any member of the Wider Matalan
Group has a significant economic interest and which is not a subsidiary
undertaking of Matalan is subject to any liability, contingent or otherwise,
which is not disclosed in the Annual Report and Accounts of Matalan for the 52
weeks ended 25 February 2006 and which is material in the context of the Wider
Matalan Group taken as a whole;
(iii) save as Disclosed that any past or present member of the Wider Matalan
Group has materially failed to comply with any applicable legislation or
regulations of any jurisdiction or any notice or requirement of any Relevant
Authority with regard to the use, storage, treatment, transport, handling,
disposal, discharge, spillage, release, leak or emission of any waste or
hazardous or harmful substance or any substance likely to impair the environment
or harm human or animal health or otherwise relating to environmental matters or
human health or that there has otherwise been any such use, storage, treatment,
transport, handling, disposal, discharge, spillage, release, leak or emission
(whether or not the same constituted non-compliance by any person with any such
legislation or regulation, and whenever or wherever the same may have taken
place), any of which non-compliance would be likely to give rise to any
liability (whether actual or contingent) or cost on the part of any member of
the Wider Matalan Group which, in each case, is material in the context of the
Wider Matalan Group taken as a whole;
(iv) save as Disclosed that there is or is likely to be any obligation or
liability (whether actual or contingent) of any member of the Wider Matalan
Group to make good, repair, re-instate or clean up any property now or
previously owned, occupied, operated or made use of or controlled by any
past or present member of the Wider Matalan Group under any environmental
legislation, regulation, notice, circular, order or other requirement of any
Relevant Authority in any jurisdiction which in each case, is material in the
context of the Wider Matalan Group taken as a whole; or
(v) any information which affects the import of any information Disclosed and
which is material in the context of the Wider Matalan Group taken as a whole;
and
(g) there having been no material breach by Matalan of the provisions of clause
5 of the Framework Agreement;
4. Missouri Bidco reserves the right to waive all or any of conditions 3(a) to
(g) inclusive, in whole or in part. Missouri Bidco shall be under no obligation
to waive or treat as fulfilled any of conditions 3(a) to (g) inclusive by a date
earlier than the date of the sanction of the Scheme referred to in condition 2
(c) above notwithstanding that the other conditions of the Acquisition 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.
5. If Missouri Bidco is required by the Takeover Panel to make an offer for any
Matalan Shares under Rule 9 of the Takeover Code, Missouri Bidco may make such
alterations to the above conditions as are necessary to comply with that Rule.
6. The Acquisition is on the terms and will be subject, among other things, to
such of the conditions which are set out in Conditions 2 and 3 as are expressed
to be applicable thereto and those terms set out in the Scheme Circular and such
further terms as may be required to comply with the Listing Rules and the
provisions of the Takeover Code.
7. The Acquisition will lapse if it 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 the Effective Date of the Scheme.
8. Missouri Bidco reserves the right to elect to implement the Acquisition by
way of an Offer. In such event, such offer will be implemented on the same terms
(subject to appropriate amendments, including (without limitation) an acceptance
condition set at 90 per cent. (or such lesser percentage (subject to compliance
with the Takeover Code) as Missouri Bidco may decide) of the shares to which
such offer relates and of the voting rights carried by those shares), so far as
applicable, as those which would apply to the Scheme.
9. If the Scheme is effected, the Matalan Shares will be acquired by Missouri
Bidco fully paid and free from all liens, charges, equitable interests,
encumbrances, rights of pre-emption and any other rights and interests of any
nature whatsoever and together with all rights now and hereafter attaching
thereto, including voting rights and the right to receive and retain in full all
dividends and other distributions (if any) declared, made or paid on or after
the date of this announcement.
10. For the purpose of these conditions:
Wider Missouri Bidco Group means Missouri Bidco, Missouri Topco and their
respective subsidiary undertakings, associated undertakings and any other
undertakings in which Missouri Bidco or Missouri Topco and such undertakings
(aggregating their interests) have a substantial interest;
Wider Matalan Group means Matalan and its subsidiary undertakings, associated
undertakings and any other undertakings in which Matalan and such undertakings
(aggregating their interests) have a substantial interest; and
for these purposes subsidiary undertaking, associated undertaking and
undertaking have the meanings given by the Companies Act (but for these purposes
ignoring paragraph 20(1)(b) of Schedule 4A to the Companies Act) and substantial
interest means a direct or indirect interest in 20 per cent. or more of the
equity capital (as defined in the Companies Act) of an undertaking.
11. For the purpose of these conditions:
"Disclosed" means disclosed in:
(a) any of the documents, papers or information made available in respect of the
proposed Acquisition in the data room located at Cobbetts LLP Ship Canal House,
King Street, Manchester M2 4WB;
(b) any other documents or papers delivered to an Information Recipient in
respect of the proposed Acquisition by or on behalf of Matalan on or before
6.00pm on 10 October 2006;
(c) any public announcement by Matalan to a Regulatory Information Service on or
before 6.00pm on 10 October 2006;
(d) the report and accounts of Matalan for the 52 week period ended on 25
February 2006; and
"Information Recipient" means any of:
(a) Missouri Bidco;
(b) Missouri Topco;
(c) the Missouri Bidco Directors; or
(d) any professional adviser engaged by any of the persons falling within
paragraphs (a) to (c) above.
12. The Acquisition and the Scheme are governed by English law and will be
subject to the jurisdiction of the English courts and the conditions set out
above.
Appendix II: Bases and sources of the financial information
1. Unless otherwise stated:
(i) financial information relating to Matalan has been extracted without
material adjustment from relevant published audited reports and accounts of
Matalan for the relevant period; and
(ii) information relating to Missouri Bidco has been provided by the Missouri
Bidco Directors.
2. The sales figures for the six week period ended 7 October 2006 and the
corresponding period for 2005 are derived from Matalan's weekly management
accounts; the figures related to Matalan's gross margins for the six week period
ended 7 October 2006 and the corresponding period for 2005 are derived from
Matalan's draft management accounts for September 2006 and Matalan's management
accounts for September 2005 respectively.
3. The value of the existing issued share capital of Matalan of approximately
#817.2 million is based on 408,581,386 Matalan Shares in issue as at 10 October
2006, the last Business Day prior to this announcement.
4. The closing middle-market prices of Matalan Shares are derived from the Daily
Official List for the relevant dates.
Appendix III: Definitions
The following definitions apply throughout this announcement unless the context
requires otherwise.
Acquisition the proposed acquisition of Matalan by Missouri Bidco pursuant to
the Scheme
Business Day any day, other than a Saturday or Sunday or public holiday or bank
holiday, on which banks are open for normal business in the City
of London
Capital the proposed reduction of share capital of Matalan to be effected
Reduction by the cancellation and extinguishing of the Scheme Shares
provided for by the Scheme
Closing the closing middle market quotation of a Matalan Share as derived
Price from the Daily Official List
Companies the Companies Act 1985 (as amended)
Act
Conditions the conditions to the implementation of the Scheme and the
Acquisition which are set out in Appendix I to this announcement
Court the High Court of Justice in England and Wales
Court Meeting the meeting of Scheme Shareholders to be convened pursuant to an
order of the Court pursuant to section 425 of the Companies Act
for the purpose of considering and, if thought fit, approving the
Scheme (with or without amendment) and any adjournment thereof
Court Order the Order of the Court sanctioning the Scheme and confirming the
Capital Reduction
Daily the Daily Official List of the London Stock Exchange
Official List
Effective the day on which the Scheme becomes effective in accordance with
Date its terms
EGM or the extraordinary general meeting of Matalan to be convened in
Matalan EGM connection with the implementation of the Scheme, and any
adjournment thereof
Framework the framework agreement relating to the Scheme dated 11 October
Agreement 2006 between, inter alia, Missouri Bidco and Matalan
FSMA the Financial Services and Markets Act 2000
Hargreaves John Hargreaves, John Jason Hargreaves, Abacus Trust Company and
Family Colyb Limited as trustees of the John Hargreaves Children's Trust
Holders of 3 April 1984, Abacus Trust Company as trustee of the John
Hargreaves No 2 Settlement of 18 March 1991 and JAH Fielden as
trustee of the J Hargreaves 1998 Lifetime Settlement
Independent GeoffBrady, LordHarris, BillShannon and MartinReavley, being the
Directors directors of Matalan who are independent in relation to the
Acquisition and who constitute the independent committee of the
Matalan Board formed to deal with the approach by Mr. Hargreaves
Kaupthing Kaupthing Bank hf.
Listing Rules the listing rules of the Financial Services Authority
London Stock London Stock Exchange plc
Exchange
Matalan or Matalan plc, a company incorporated in England and Wales with
Company registered number 1579910
Matalan the board of directors of Matalan
Boardor Board
Matalan the directors of Matalan
Directors or
Directors
Matalan Group the group comprising Matalan and its subsidiary undertakings and,
where the context permits, each of them
Matalan Share all or (where the context permits) any of the Matalan plc Share
Schemes Save Scheme, the Matalan 1998 Unapproved Executive Share Option
Scheme, the Matalan plc Share Incentive Option Scheme and the
Matalan plc Long Term Incentive Plan (as approved by shareholders
on 18November 2003)
Matalan holders of Matalan Shares from time to time
Shareholders
or
Shareholders
Matalan the ordinary shares of 10 pence each in the capital of Matalan
Shares or
Shares
Meetings the Court Meeting and the Matalan EGM
Merrill Lynch Merrill Lynch International
Missouri Missouri Bidco Limited, a company incorporated in England and
Bidco Wales with registered number 5962488
Missouri the directors of Missouri Bidco
Bidco
Directors
Missouri Missouri Topco and Missouri Bidco
Bidco Group
Missouri Missouri Topco Limited, a company incorporated in Guernsey with
Topco registered number 45618
Offer if Missouri Bidco elects to effect the Acquisition by way of a
takeover offer, the offer to be made by or on behalf of Missouri
Bidco to acquire all the Matalan Shares (other than shares already
owned by the Hargreaves Family Holders) and, where the context so
requires, any subsequent revision, variation, extension or renewal
thereof
Offer Period the period commencing on 29 June 2006 and ending on the Effective
Date, or such other date as the Takeover Panel may decide
Official List the official list of the Financial Services Authority
pounds or # UK pounds sterling, the lawful currency of the UK
Proposals the cash acquisition of Matalan by Missouri Bidco to be
implemented by way of the Scheme and, where the context requires,
any subsequent revision, variation, extension or renewal thereof
Registrar of the Registrar of Companies in England and Wales
Companies
Restricted any jurisdiction where local laws or regulations may result in a
Jurisdiction significant risk of civil, regulatory or criminal exposure if
information is sent or made available to Matalan Shareholders in
that jurisdiction
Scheme or the scheme of arrangement proposed to be made under Section 425 of
Scheme of the Companies Act between Matalan and the holders of Scheme
Arrangement Shares, with or subject to any modification, addition or condition
approved or imposed by the Court and agreed to by Matalan and
Missouri Bidco
Scheme the document proposed to be sent to Matalan Shareholders
Circular containing, inter alia, the terms and conditions of the Scheme,
certain information about Matalan and Missouri Bidco, the Scheme
and the notices convening the Meetings
Scheme Record 6.00 p.m. on the Business Day immediately prior to the Effective
Time Date
Scheme registered holders of Scheme Shares
Shareholders
Scheme Shares all Matalan Shares which are:
(a) in issue at the date of the Scheme Circular;
(b) issued after the date of the Scheme Circular and before the
Voting Record Time; or
(c) issued at or after the Voting Record Time and before the
Scheme Record Time either on terms that the original or any
subsequent holders of such shares are to be bound by the Scheme or
in respect of which their holders have agreed in writing to be
bound by the Scheme
other than those Matalan Shares held by the Hargreaves Family
Holders
Special the special resolution to be proposed at the Matalan EGM in
Resolution connection with the Scheme
subsidiary or to be construed in accordance with the Companies Act
holding
company
Takeover Code the City Code on Takeovers and Mergers
Takeover the Panel on Takeovers and Mergers
Panel
United the United Kingdom of Great Britain and Northern Ireland
Kingdom or UK
Voting Record the date and time to be fixed by the Court for determining
Time entitlement to vote at the Court Meeting (to be set out in the
notice of Court Meeting) or, if the Court Meeting is adjourned,
6.00 p.m. on the day two days immediately preceding the day fixed
for the adjourned Court Meeting
This information is provided by RNS
The company news service from the London Stock Exchange
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