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Scottish Power PLC (SPW)

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Friday 31 March, 2006

Scottish Power PLC

SPW Circular Posted

Scottish Power PLC
31 March 2006


        Return of cash to shareholders - circular posted to shareholders

Scottish Power plc ("ScottishPower") announces that it has commenced posting a
circular to shareholders and has convened an extraordinary general meeting for 4
May 2006 to obtain shareholder approval for the proposed return of £2.25 billion
of cash to shareholders following the completion of the sale of PacifiCorp, its
US regulated business, to MidAmerican Energy Holdings Company.

The Board of ScottishPower unanimously recommends the return of cash as being in
the best interests of shareholders as a whole.

Highlights of the return of cash

   • Shareholders to receive approximately £1.20 per existing ordinary share*

   • To be implemented by way of a B Share scheme to provide UK tax resident
     shareholders with flexibility to elect to receive cash in the form of a
     capital payment or in the form of dividend income, or a combination of the
     two

   • A share consolidation to reflect the return of cash will aim to maintain
     comparability of share price, earnings per share and dividends per share

   • Each shareholder's holding will represent the same proportion of
     ScottishPower's issued ordinary share capital as it did prior to the return
     of cash (subject to fractional entitlements)

   • Cheques are expected to be despatched to shareholders and CREST accounts
     credited on Monday 5 June


Details of the return of cash

Subject to shareholder approval by way of special resolution, one in every three
ordinary shares held by each shareholder will be reclassified into a B Share,
and shareholders will be able to elect between the following alternatives in
respect of those B Shares:

   • Single B Share dividend: to receive a single dividend of £3.60 per B
     Share for some or all of their B Shares (the "Single B Share Dividend").
     Following this, the B Shares for which a shareholder has chosen to receive
     the single dividend payment will automatically be converted into deferred
     shares, which will have negligible value. In the case of UK resident
     individual shareholders, the dividend should be treated as income for UK tax
     purposes.

   • Initial repurchase offer: to sell some or all of their B Shares to UBS
     and/or Morgan Stanley, as agent for ScottishPower, for £3.60 per B Share,
     free of all dealing expenses and commissions (the "Initial Repurchase
     Offer"). In the case of UK resident individual shareholders, the proceeds of
     such a repurchase should generally be treated as capital for UK tax
     purposes.

   • Future repurchase offers: to retain some or all of their B Shares and
     have the opportunity to sell them on certain future dates to UBS and/or
     Morgan Stanley, as agent for ScottishPower, for £3.60 per B Share, free of
     all dealing expenses and commissions. In the case of UK resident individual
     shareholders, the proceeds of a repurchase of B Shares in the future should
     generally be treated as capital for UK tax purposes as based on current UK
     law and practice.

* The actual value returned per share may vary as a result of the treatment of
fractions


The circular and election form in respect of these alternatives are being sent
to shareholders. Shareholders who do not elect for any of the alternatives will
receive the Single B Share Dividend on all of their B Shares held on the B Share
record date.

In conjunction with the return of cash, a capital reorganisation will be
undertaken. Existing ordinary shares will be subdivided and consolidated so that
shareholders will receive 1.1905 new ordinary shares for every existing ordinary
share remaining after the creation of the B Shares. The intention is that,
subject to market movements, the share price of one new ordinary share
immediately after listing of the new ordinary shares should be approximately
equal to the share price of one existing ordinary share immediately beforehand.
The ratio used for the capital reorganisation has been set by reference to the
closing price of 586.5 pence per existing ordinary share on 30 March 2006 (being
the latest practicable date prior to the posting of documents to shareholders
from 31 March 2006).

New ordinary shares will be traded on the London Stock Exchange in the same way
as existing ordinary shares and will be equivalent to the existing ordinary
shares in all material respects, including their dividend, voting and other
rights. The effect of the consolidation will be to reduce the number of issued
ordinary shares to reflect the return of £3.60 per B Share to shareholders, but
shareholders will own the same proportion of ScottishPower's issued share
capital as they did previously, subject to fractional entitlements.

A number of changes to the articles of association of the Company are required
in order to implement the return of cash.

Full details of the return of cash and associated capital reorganisation are
contained in the circular.

A separate memorandum providing details of the return of cash will be sent to
holders of ScottishPower American Depositary Shares ("ADSs") giving details of
the impact of the return of cash on their ADS holdings in ScottishPower. In
connection with the return of cash to holders of ADSs the Company will undertake
a tender offer for the B Shares pursuant to the United States Securities
Exchange Act of 1934 (as amended).


Share schemes

Letters are being sent to participants in the ScottishPower share schemes to
explain the impact of the return of cash on their participation in the schemes.


Convertible Bonds

In relation to the US$700,000,000 4% step-up perpetual subordinated convertible
bonds (the "Convertible Bonds") issued by ScottishPower Finance (Jersey) Limited
and guaranteed by ScottishPower, the exchange price (which is currently £4.60)
at which the Convertible Bonds may be converted into ordinary shares may be
adjusted as a result of the return of cash. However, based on the market value
of the ordinary shares as at 30 March 2006 and the details of the capital
reorganisation, the Company does not currently expect that the amount of any
adjustment to the exchange price will be significant. The exact amount of any
adjustment to the Exchange Price will be determined with reference to the share
price on 12 May 2006, being the record date for the return of cash.


Pensions

In connection with the return of cash to shareholders, ScottishPower has reached
agreement with the trustees of the ScottishPower Pension Scheme, the
ScottishPower Group Final Salary Lifeplan and the Manweb Group Section of the
Electricity Supply Pension Scheme to make special contributions to each scheme
in order to fund the FRS17 deficit (as at 31 December 2005) in respect of each
scheme over a period of up to five years.

ScottishPower has made an aggregate lump sum contribution of £28 million during
March 2006 into the relevant schemes. On completion of the return of cash to
shareholders, an aggregate lump sum contribution of £100 million will be made to
the relevant schemes and four further aggregate annual payments of £13.2 million
will be made to the relevant schemes commencing on 31 March 2007, subject to an
FRS17 deficit continuing in those schemes at each due payment date.

ScottishPower has received a clearance statement from the Pensions Regulator
that it would not be reasonable to impose liability for a contribution notice on
the applicants to the clearance application in respect of the proposed return of
cash.


Expected timetable of principal events

An extraordinary general meeting ("EGM") has been convened for 10.30 am on
Thursday 4 May 2006 at the Holiday Inn Glasgow City-West, Bothwell Street,
Glasgow G2 7EN, to seek shareholder approval for the return of cash to
shareholders.


                                                                            2006
________________________________________________________________________________
Latest time and date for receipt of Form of Proxy for EGM            10.30 am on
                                                                   Tuesday 2 May
________________________________________________________________________________
EGM                                                                  10.30 am on
                                                                  Thursday 4 May
________________________________________________________________________________
Latest time and date for dealings in existing ordinary shares         4.30 pm on
                                                                   Friday 12 May
________________________________________________________________________________
Record date for the capital reorganisation. Existing ordinary     6 pm on Friday
share register closed and existing ordinary shares disabled in            12 May
CREST   
________________________________________________________________________________
New ordinary shares and B Shares admitted to the Official List    8 am on Monday
and admitted to trading on the London Stock Exchange's main               15 May
market for listed securities                                     
________________________________________________________________________________
Commencement of dealings in the new ordinary shares and B Shares  8 am on Monday
and enablement in CREST. New ordinary shares and B Shares                 15 May
entered into CREST                                               
________________________________________________________________________________
Latest time for receipt of election forms and TTE instructions        4.30 pm on
from CREST holders in relation to the B Share alternatives         Friday 19 May
________________________________________________________________________________
B Share record date                                               6 pm on Friday
                                                                          19 May
________________________________________________________________________________
Single B Share Dividend declared and B Shares in respect of        Monday 22 May
which the Single B Share Dividend is payable convert into        
deferred shares
________________________________________________________________________________
ScottishPower acquires B Shares under the Initial Repurchase       Monday 22 May
Offer made by means of an announcement on the Regulatory News    
Service of the London Stock Exchange
________________________________________________________________________________
Despatch of new ordinary share certificates, retained B Share      Monday 5 June
certificates, sale advices, cheques in respect of the Single B
Share Dividend and/or B Shares purchased under the Initial
Repurchase Offer as appropriate and cheques for fractional
entitlements, and CREST accounts credited with the proceeds




In the United States, ScottishPower will file a Tender Offer Statement
containing the circular, the US supplemental memorandum, the election forms for
shareholders and ADS holders and other related documentation with the Securities
and Exchange Commission (the "SEC") on Schedule TO. Free copies of the Schedule
TO and the other related documents to be filed by ScottishPower in connection
with the B Share alternatives will be available from the date the circular and
other related documentation are mailed to ADS holders and shareholders in the US
on the SEC's website at http://www.sec.gov and ScottishPower's website at
www.scottishpower.com.


For further information:

Jennifer Lawton       Director, Investor Relations            0141 636 4527
David Ross Group      Investor Relations Manager              0141 566 4853
Colin McSeveny        Director, Media Relations               0141 636 4515
Philip Shelley        UBS Limited                             020 7567 8000
Alisdair Gayne        Morgan Stanley & Co. Limited            020 7425 8000

UBS Limited is acting jointly with Morgan Stanley & Co. Limited for
ScottishPower and no-one else in connection with the return of £2.25 billion of
cash to shareholders and will not be responsible to anyone other than
ScottishPower for providing the protections afforded to clients of UBS Limited
or for providing advice in relation to the return of £2.25 billion of cash to
shareholders.

Morgan Stanley & Co. Limited is acting jointly with UBS Limited for
ScottishPower and no-one else in connection with the return of £2.25 billion of
cash to shareholders and will not be responsible to anyone other than
ScottishPower for providing the protections afforded to clients of Morgan
Stanley & Co. Limited or for providing advice in relation to the return of £2.25
billion of cash to shareholders.

--------------------------




                      This information is provided by RNS
            The company news service from the London Stock Exchange