Dagger Holdings Limited
31 August 2006
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO OR
FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE
RELEVANT LAWS IN THAT JURISDICTION
31 August 2006
RECOMMENDED CASH OFFER
of 125 pence in cash for each London Clubs International plc share
to be made by
Dagger Holdings Limited
a wholly-owned subsidiary of
Harrah's Entertainment, Inc.
for
London Clubs International plc
and
Warrant Proposal
Summary
- The boards of Harrah's Entertainment, Inc. ('Harrah's Entertainment') and
London Clubs International plc ('London Clubs International' or the 'Company')
announce the terms of a recommended cash offer, to be made by Dagger Holdings
Limited, a wholly-owned subsidiary of Harrah's Entertainment, for the entire
issued and to be issued share capital of London Clubs International (the
'Offer').
- The Offer of 125 pence in cash for each London Clubs International Share
values the entire issued share capital of London Clubs International at
approximately £279.3 million and represents:
(i) a premium of approximately 26.6 per cent. to the closing mid-market
price of 98.8 pence per London Clubs International Share on 30 August 2006,
being the last business day prior to this announcement; and
(ii) a premium of approximately 29.3 per cent. to the average closing mid-
market price of 96.7 pence per London Clubs International Share for the one
month ended 30 August 2006, being the last business day prior to this
announcement.
- The London Clubs International Board, which has been so advised by
Rothschild, considers the terms of the Offer to be fair and reasonable. In
providing advice to the London Clubs International Board, Rothschild has taken
into account the commercial assessment of the London Clubs International
Directors.
- Accordingly, the London Clubs International Directors unanimously recommend
London Clubs International Shareholders to accept the Offer, as they (and
certain members of their immediate families and trusts) have irrevocably
undertaken to do in respect of their beneficial holdings totalling 2,679,810
London Clubs International Shares (representing approximately 1.2 per cent. of
the existing issued share capital of London Clubs International). These
undertakings will cease to be binding in the event of a Higher Competing Offer.
Commenting on the Offer, Gary W. Loveman, Chairman of the Board, Chief Executive
Officer and President of Harrah's Entertainment, said:
'London Clubs International is a highly attractive way for Harrah's
Entertainment to establish its presence in the UK market.
London Clubs International has one of the leading positions in the UK casino
market and through the new licences that it has recently been awarded will be
able to further enhance its position. We are excited by its current development
projects and believe that Harrah's Entertainment's skills and access to capital
will assist London Clubs International in its planned expansion.'
Michael Beckett, Non-Executive Chairman of London Clubs International, said:
'The Board of London Clubs International is pleased to have reached agreement on
the terms of this cash offer from Harrah's Entertainment. The Board believes the
Offer represents fair value to London Clubs International's shareholders and
provides great opportunities for the Company's employees.
Harrah's Entertainment has the resources and expertise to fully leverage the
development opportunities that London Clubs International has in its new
licences and to maximise growth for the Company.'
This summary should be read in conjunction with, and is subject to, the full
text of the attached announcement. The Offer will be subject to the Conditions
and to the full terms and conditions to be set out in the Offer Document and
Form of Acceptance.
ENQUIRIES
Harrah's Entertainment
Dan Foley (Investors) Tel: +1 (702) 407 6370
Alberto Lopez (Media) Tel: +1 (702) 407 6344
Banc of America (financial adviser to Harrah's Entertainment)
Paul Mullins Tel: +44 (0)20 7174 5343
John Bigham Tel: +44 (0)20 7174 4329
Geoff Iles Tel: +44 (0) 20 7174 4522
Hoare Govett (broker to Harrah's Entertainment)
Neil Collingridge Tel: +44 (0)20 7678 8000
Bertie Whitehead
Tulchan Communications (PR adviser to Harrah's Entertainment)
Kirstie Hamilton Tel: +44 (0)20 7353 4200
Andrew Honnor
London Clubs International
William Timmins Tel: +44 (0)20 7518 0000
Barry Hardy
Rothschild (financial adviser to London Clubs International)
Robert Leitao Tel: +44 (0)20 7280 5000
Adam Greenblatt
Panmure Gordon (broker to London Clubs International)
Andrew Godber Tel: +44 (0)20 7459 3600
Gilbert Ellacombe
College Hill Associates (PR adviser to London Clubs International)
Matthew Smallwood Tel: +44 (0)20 7457 2005
Justine Warren Tel: +44 (0)20 7457 2010
This announcement does not constitute an offer to sell or the solicitation of an
offer to subscribe for or buy any security, nor is it a solicitation of any vote
or approval in any jurisdiction, nor shall there be any sale, issuance or
transfer of the securities referred to in this announcement in any jurisdiction
in contravention of applicable law. The Offer will be made solely by means of
the Offer Document and the acceptance forms accompanying the Offer Document,
which will contain the full terms and conditions of the Offer including details
of how it may be accepted.
Banc of America, which is authorised and regulated by the FSA, is acting
exclusively for Harrah's Entertainment and Dagger Holdings Limited and no one
else in connection with the Offer and will not be responsible to anyone other
than Harrah's Entertainment and Dagger Holdings Limited for providing the
protections afforded to clients of Banc of America or for providing advice in
connection with the Offer or any other matters referred to herein.
Hoare Govett, which is authorised and regulated by the FSA, is acting
exclusively for Harrah's Entertainment and Dagger Holdings Limited and no one
else in connection with the Offer and will not be responsible to anyone other
than Harrah's Entertainment and Dagger Holdings Limited for providing the
protections afforded to clients of Hoare Govett or for providing advice in
connection with the Offer or any other matters referred to herein.
Rothschild, which is authorised and regulated in the United Kingdom by the FSA,
is acting exclusively for London Clubs International and no one else in
connection with the Offer and will not be responsible to anyone other than
London Clubs International for providing the protections afforded to clients of
Rothschild or for providing advice in connection with the Offer or any other
matters referred to herein.
Panmure Gordon, which is authorised and regulated in the United Kingdom by the
FSA, is acting exclusively for London Clubs International and no one else in
connection with the Offer and will not be responsible to anyone other than
London Clubs International for providing the protections afforded to clients of
Panmure Gordon or for providing advice in connection with the Offer or any other
matters referred to herein.
The release, publication or distribution of this announcement in certain
jurisdictions may be restricted by law and therefore persons in any such
jurisdictions into which this announcement is released, published or distributed
should inform themselves about and observe such restrictions.
Copies of this announcement and any formal documentation relating to the Offer
are not being, and must not be, directly or indirectly, mailed or otherwise
forwarded, distributed or sent in or into or from a Restricted Jurisdiction and
will not be capable of acceptance by any such use, instrumentality or facility
within a Restricted Jurisdiction and persons seeking such documents (including
custodians, nominees and trustees) must not mail or otherwise forward,
distribute or send it in or into or from a Restricted Jurisdiction. The Offer
will not be made, directly or indirectly, in or into, or by the use of mails or
any means or instrumentality (including, without limitation, telephonically or
electronically) of interstate or foreign commerce of, or any facility of a
national, state or other securities exchange of a Restricted Jurisdiction and
the Offer will not be capable of acceptance by any such use, means,
instrumentality or facilities.
The ability of London Clubs International Shareholders who are not resident in
the United Kingdom or the United States to accept the Offer may be affected by
the laws of the relevant jurisdictions in which they are located. Persons who
are not resident in the United Kingdom or the United States should inform
themselves of, and observe, any applicable requirements.
Forward Looking Statements
This release includes 'forward-looking statements'. You can identify these
statements by the fact that they do not relate strictly to historical or current
facts. These statements contain words such as 'may,' 'will,' 'project,' 'might,'
'expect,' 'believe,' 'anticipate,' 'intend,' 'could,' 'would,' 'estimate,' '
continue' or 'pursue,' or the negative or other variations thereof or comparable
terminology. In particular, they include statements relating to, among other
things, future actions, new projects, strategies, future performance, the
outcomes of contingencies and future financial results of Harrah's
Entertainment. These forward-looking statements are based on current
expectations and projections about future events.
Investors are cautioned that forward-looking statements are not guarantees of
future performance or results and involve risks and uncertainties that cannot be
predicted or quantified and, consequently, the actual performance of Harrah's
Entertainment may differ materially from those expressed or implied by such
forward-looking statements. Such risks and uncertainties include, but are not
limited to, the following factors, as well as other factors described from time
to time in Harrah's Entertainment reports filed with the Securities and Exchange
Commission (including the sections entitled 'Risk Factors' and 'Management's
Discussion and Analysis of Financial Condition and Results of Operations'
contained therein): the effects of local and national economic, credit and
capital market conditions on the economy in general, and on the gaming and hotel
industries in particular; construction factors, including delays, increased
costs for labor and materials, availability of labor and materials, zoning
issues, environmental restrictions, soil and water conditions, weather and other
hazards, site access matters and building permit issues; the effects of
environmental and structural building conditions relating to Harrah's
Entertainment properties; access to available and reasonable financing on a
timely basis; the ability to timely and cost effectively integrate London Clubs
International into Harrah's Entertainment operations; changes in laws, including
increased tax rates, regulations or accounting standards, third-party relations
and approvals, and decisions of courts, regulators and governmental bodies;
litigation outcomes and judicial actions, including gaming legislative action,
referenda and taxation; the ability of Harrah's Entertainment customer-tracking,
customer loyalty and yield-management programs to continue to increase customer
loyalty and same store sales or hotel sales; the ability of Harrah's
Entertainment to recoup costs of capital investments through higher revenues;
acts of war or terrorist incidents or natural disasters; abnormal gaming holds;
and the effects of competition, including locations of competitors and operating
and market competition.
Any forward-looking statements speak only as of the date made. Harrah's
Entertainment disclaims any obligation to update the forward-looking statements.
You are cautioned not to place undue reliance on these forward-looking
statements which speak only as of the date stated, or if no date is stated, as
of the date of this press release.
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 1 per cent. or more of any
class of 'relevant securities' of London Clubs International, 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 London Clubs International, 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 London Clubs International by Harrah's Entertainment
or London Clubs International, 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 Takeover 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, please contact an independent
financial adviser authorised under the Financial Services and Markets Act 2000,
consult the Panel's website at www.thetakeoverpanel.org.uk or contact the Panel
on telephone number +44 (0)20 7638 0129; fax +44 (0)20 7236 7013.
In accordance with normal UK market practice, the Offeror, Harrah's
Entertainment or its nominees, or its brokers (acting as agents) may from time
to time make certain purchases of, or arrangements to purchase, London Clubs
International Shares outside the United States, other than pursuant to the
Offer, before or during the period in which the Offer remains open for
acceptance. These purchases may occur either in the open market at prevailing
prices or in private transactions at negotiated prices and shall comply with the
applicable laws of the United Kingdom as well as the rules of the London Stock
Exchange and the Code. The Offeror will disclose purchases of London Clubs
International Shares in the United States to the extent that such information is
made public in the United Kingdom.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN INTO OR
FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE
RELEVANT LAWS IN THAT JURISDICTION
31 August 2006
RECOMMENDED CASH OFFER
of 125 pence in cash for each London Clubs International plc share
to be made by
Dagger Holdings Limited
a wholly-owned subsidiary of
Harrah's Entertainment, Inc.
for
London Clubs International plc
and
Warrant Proposal
1. Introduction
The boards of Harrah's Entertainment and London Clubs International announce the
terms of a recommended cash offer, to be made by Dagger Holdings Limited, a
wholly-owned subsidiary of Harrah's Entertainment, for the entire issued and to
be issued share capital of London Clubs International.
2. The Offer
The Offer, which will be subject to the Conditions and to the full terms and
conditions to be set out in the Offer Document and Form of Acceptance, will be
made on the following basis:
for each London Clubs International Share 125 pence in cash.
The Offer of 125 pence in cash for each London Clubs International Share values
the entire issued share capital of London Clubs International at approximately
£279.3 million and represents:
(i) a premium of approximately 26.6 per cent. to the closing mid-market
price of 98.8 pence per London Clubs International Share on 30 August 2006,
being the last business day prior to this announcement; and
(ii) a premium of approximately 29.3 per cent. to the average closing
mid-market price of 96.7 pence per London Clubs International Share for the one
month ended 30 August 2006, being the last business day prior to this
announcement.
The London Clubs International Shares that are subject to the Offer will be
acquired by Dagger Holdings Limited fully paid with full title guarantee and
free from all liens, charges, equitable interests, encumbrances, rights of
pre-emption and any other third party rights and interests of any nature
whatsoever and together with all rights now or hereafter attaching thereto,
including, without limitation, 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 the Announcement.
An offer of 105.75 pence for each Aladdin Warrant will also be made and further
details of the Warrant Proposal are set out in paragraph 10 below.
3. Recommendation
The London Clubs International Board, which has been so advised by Rothschild,
considers the terms of the Offer to be fair and reasonable. In providing advice
to the London Clubs International Board, Rothschild has taken into account the
commercial assessment of the London Clubs International Directors.
Accordingly, the London Clubs International Directors unanimously recommend
London Clubs International Shareholders to accept the Offer and all Aladdin
Warrant Holders to accept the Warrant Proposal, as they (and certain members of
their immediate families and trusts) have irrevocably undertaken to do in
respect of their own beneficial holdings, which amount in aggregate to 2,679,810
London Clubs International Shares (representing approximately 1.2 per cent. of
the existing issued share capital of London Clubs International).
4. Background to, and reasons for, recommending the Offer and Warrant Proposal
Following press speculation, the boards of London Clubs International and
Stanley Leisure plc announced on 26 June 2006 that they were in discussions
concerning the possibility of a nil premium merger.
Harrah's Entertainment subsequently approached London Clubs International with
its proposal to make a cash offer at a premium to the value of the merger terms
announced on 26 June 2006.
London Clubs International has operated world class casinos for many years.
Having now secured a portfolio of five new, high quality UK casino licences, its
future financial performance and growth is heavily dependent on the development
and management of these new operations, in addition to its existing estate. The
casino rollout will require significant capital, management and development
expertise.
London Clubs International has put in place bank facilities and infrastructure
to develop these projects. Notwithstanding this, the London Clubs International
Board recognises the benefit of being part of a larger group with significant
expertise in delivering large-scale projects, operating in a deregulated
environment and having access to significant capital. This may also prove
valuable in competing for licences to be awarded under the Gambling Act 2005.
Accordingly, the London Clubs International Directors have concluded that the
terms of the Offer and Warrant Proposal are fair and reasonable and they
unanimously recommend London Clubs International Shareholders to accept the
Offer and Aladdin Warrant Holders to accept the Warrant Proposal.
5. Background to, and reasons for, making the Offer and Warrant Proposal
Harrah's Entertainment has been seeking for some time an attractive means of
establishing a significant presence in the UK casino market.
London Clubs International's strong market position, excellent management and
strong development pipeline provide an excellent base from which Harrah's
Entertainment will be able to expand.
6. Information on London Clubs International
On 29 August, London Clubs International posted its results for the year to 31
March 2006. Revenue from continuing operations grew substantially during the
year to £126.1 million (2005: £103.3 million). Revenue from discontinued
operations, at Les Ambassadeurs, fell from £35.7 million in 2004/5 to £27.4
million.
The London Clubs International Group generated operating profit from continuing
operations of £12.3 million (2005: £11.1 million) and operating profit from
discontinued operations of £0.9 million (2005: £2.4 million). Loss before tax
from continuing operations was £3.6 million (2005: loss of £5.0 million) and
profit before tax from discontinued operations, including the gain on disposal,
was £100.4 million (2005: £2.4 million). Included within the results for 2005/6
were exceptional items associated with the sale of Les Ambassadeurs (profit of
£99.5 million) and unsecured creditor receipts from the Aladdin (£1.0 million).
As at 31 March 2006, London Clubs International had net debt of £10.6 million.
After a relatively slow start in the initial months of 2006/7, business levels
in London have started to improve. Attendances have shown substantial increases
over 2005/6 and electronic gaming revenues, in particular, have grown strongly.
The provincial casinos in Brighton and Southend have also seen substantial
increases in attendances. Overall trading levels are ahead of last year.
Overseas, the casinos in Cairo are performing well ahead of the same period last
year, having benefited from the relatively quiet start to trading in London. The
Emerald Casino in South Africa continues to trade extremely well and remains an
important and material contributor to the Group's earnings.
Prospects for the future remain positive, notwithstanding the recent disruption
to air travellers to the UK and the continuing instability in the Middle East.
The London Clubs International Group completed the 6,000 sq ft extension of the
Rendezvous casino in London in July 2006 and the 13,000 sq ft extension of its
Brighton casino in August 2006. Both developments now have enhanced customer
facilities, with an increased electronic gaming offering and broader customer
appeal.
The London Clubs International Group's property in Manchester, with nearly
60,000 sq ft of space and branded 'Manchester 235', is scheduled to open in
October 2006, and will offer a unique entertainment experience comprising
luxury, contemporary interiors, state of the art gaming and high quality bar,
restaurant and live music facilities. The London Clubs International Group's
Leicester Square casino, in the heart of London, is scheduled to open in March
2007 - with 55,000 sq ft of space, the casino will be positioned as a
destination venue with a unique restaurant, gaming and entertainment offering.
7. Information relating to the Harrah's Entertainment Group and current trading
of Harrah's Entertainment
Founded in 1937, Las Vegas-based Harrah's Entertainment (NYSE: HET) is the
world's largest gaming distribution network.
Harrah's Entertainment owns or manages, through various subsidiaries, 37
casinos, primarily in the United States under the Harrah's, Caesars and
Horseshoe brand names. It provides great customer service in exciting and
entertaining environments, with the goal of becoming the first choice for casino
entertainment.
For the fiscal year ended 31 December 2005, Harrah's Entertainment reported
annual revenues of $7.0 billion (2004: $4.4 billion) and net income of $236.4
million (2004: $367.7 million).
Harrah's Entertainment's revenues for the 3 months ended 30 June 2006 were $2.4
billion, up 66.8% from the same period last year, while net income rose to
$128.6 million (2005: $105.8 million).
8. Management, employees and locations
Harrah's Entertainment attaches great importance to the skills and experience of
the existing management and employees of London Clubs International, who will
play an important role in the further development of the enlarged business.
Harrah's Entertainment also believes that the London Clubs International
employees will benefit from a broader range of opportunities for personal and
professional development as part of a larger, more diverse and financially
stronger group.
Harrah's Entertainment has given assurances to London Clubs International that,
following the Offer becoming effective, the existing contractual employment
rights of all employees and management of the London Clubs International Group
will be safeguarded.
Harrah's Entertainment has no immediate plans to change the location of London
Clubs International's operational places of business.
9. Irrevocable undertakings to accept the Offer
Harrah's Entertainment has received irrevocable undertakings to accept the Offer
from each of the London Clubs International Directors (and certain members of
their immediate families and trusts) in respect of their beneficial holdings
which amount in aggregate to 2,679,810 London Clubs International Shares,
representing approximately 1.2 per cent. of the existing issued share capital of
London Clubs International. These undertakings will cease to be binding in the
event of a Higher Competing Offer.
10. Warrant Proposal
Subject to the Offer becoming or being declared unconditional in all respects,
Harrah's Entertainment proposes to pay to Aladdin Warrant Holders:
for each warrant 105.75 pence in cash.
Full details of the Warrant Proposal will be set out in the Warrant Proposal
Documents, which will include information on the procedure for acceptance of the
Warrant Proposal and UK taxation treatment of the consequences of the Warrant
Proposal.
Letters will also be sent to the Nova Scotia Warrant Holders pursuant to the
terms of the Nova Scotia Warrants.
11. London Clubs International Share Schemes
The Offer will extend to any London Clubs International Shares unconditionally
allotted or issued pursuant to the exercise of options under the London Clubs
International Share Schemes while the Offer remains open for acceptance (or such
earlier date as Harrah's Entertainment may, subject to the rules of the Code,
decide). In the event that the Offer becomes or is declared unconditional in all
respects, Harrah's Entertainment will, to the extent required by the Code and/or
the Takeover Panel, make appropriate proposals to participants in the London
Clubs International Share Schemes to the extent that their options have not been
exercised.
12. Cash Confirmation
Harrah's Entertainment will fund the aggregate consideration payable under the
Offer from available cash resources and its existing credit facilities. Banc of
America, as financial adviser to Harrah's Entertainment and Dagger Holdings
Limited, is satisfied that sufficient resources are available to satisfy in full
the cash consideration payable to London Clubs International Shareholders under
the terms of the Offer.
13. Inducement Fee
London Clubs International and Harrah's Entertainment have agreed that London
Clubs International will pay to Harrah's Entertainment a fee of one per cent. of
the value of the Offer (inclusive of value added tax, if any, except to the
extent such value added tax is recoverable by London Clubs International) if,
following the Announcement, either (i) the London Clubs International Directors
change the terms of or withdraw their recommendation of the Offer (other than by
reason of failure of Harrah's Entertainment to comply with its obligations under
the Code) provided that, if London Clubs International's obligations to pay the
fee, or any other break or inducement fee it has agreed to pay to a third party
offeror, exceeds the amount London Clubs International is able to pay pursuant
to applicable law (including the rules of the UKLA) or the Takeover Code (the '
Maximum Permissible Amount'), the amount of the Inducement Fee payable to
Harrah's Entertainment and to each other third party offeror to whom London
Clubs International has agreed to pay a break or inducement fee shall be reduced
pro rata so that the total amount payable shall not exceed the Maximum
Permissible Amount, or (ii) before the earlier of the date on which the Offer
lapses or is withdrawn or the date six months from the date of the Inducement
Fee Agreement, any person (other than London Clubs International or a person
acting in concert (as defined in the Takeover Code) with London Clubs
International) announces an intention to make a competing offer, however
effected, to acquire the entire issued share capital of London Clubs
International and such offer subsequently becomes or is declared unconditional
in all respects or is otherwise completed.
14. Overseas Shareholders
The availability of the Offer to London Clubs International Shareholders who are
not resident in the United Kingdom may be affected by the laws of their relevant
jurisdiction. Such persons should inform themselves of, and observe, any
applicable legal or regulatory requirements of their jurisdiction. If you remain
in any doubt, you should consult an appropriate independent professional adviser
in the relevant jurisdiction without delay.
15. Compulsory acquisition, de-listing and cancellation of trading
If Harrah's Entertainment receives acceptances under the Offer in respect of, or
otherwise acquires, in aggregate, both 90 per cent. or more of the London Clubs
International Shares to which the Offer relates and 90 per cent. or more of the
voting rights carried by those shares, Harrah's Entertainment intends to
exercise its rights pursuant to the provisions of Schedule 2 of the Interim
Implementation Regulations to acquire compulsorily any remaining London Clubs
International Shares to which the Offer relates on the same terms as the Offer.
It is intended that, following the Offer becoming or being declared
unconditional in all respects, and subject to applicable requirements of the
London Stock Exchange and/or the UKLA, Harrah's Entertainment will procure that
London Clubs International will apply to the London Stock Exchange and the UKLA
for cancellations, respectively, of the trading of the London Clubs
International Shares on the London Stock Exchange and of the listing of the
London Clubs International Shares on the Official List.
If these cancellations occur, they will significantly reduce the liquidity and
marketability of any London Clubs International Shares not assented to the
Offer. It is anticipated that the de-listing and cancellation of admission to
trading will take effect no earlier than the expiry of 20 Business Days after
the Offer becomes or is declared unconditional in all respects.
16. Disclosure of interests in London Clubs International
As at the close of business on 30 August 2006, being the last practicable date
prior to the date of this announcement, Harrah's Entertainment did not own or
control any shares in the capital of London Clubs International.
17. General
The Offer will be made on the terms and subject to the Conditions set out herein
and in Appendix I, and to be set out in the Offer Document and the accompanying
Form of Acceptance. These will be posted to London Clubs International
Shareholders and, for information only, to participants in the London Clubs
International Share Option Schemes and Aladdin Warrant Holders (other than to
persons with addresses in Restricted Jurisdictions), as soon as practicable and
in any event within 28 days of the date of this announcement unless agreed
otherwise with the Takeover Panel.
The Warrant Proposal will be made on the terms and subject to the conditions set
out in the Warrant Proposal Documents and accompanying form of acceptance, which
will be posted to Aladdin Warrant Holders on the date on which the Offer
Document is posted to London Club International Shareholders.
The Offer and the Warrant Proposal and acceptances thereof will be governed by
English law. The Offer and the Warrant Proposal will be subject to the
applicable requirements of the Takeover Code, the Takeover Panel, the London
Stock Exchange and the UK Listing Authority.
Save as disclosed in paragraph 16 above, neither Harrah's Entertainment nor, so
far as Harrah's Entertainment is aware, any person acting in concert with
Harrah's Entertainment, owns or controls any London Clubs International Shares
or any securities convertible or exchangeable into London Clubs International
Shares 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
London Clubs International Shares or has entered into any derivatives referenced
to London Clubs International Shares ('Relevant London Clubs International
Securities') which remain outstanding, nor does any such person have any
arrangement in relation to Relevant London Clubs International Securities. For
these purposes, 'arrangement' includes any indemnity or option arrangement, any
agreement or understanding, formal or informal, of whatever nature, relating to
Relevant London Clubs International Securities which may be an inducement to
deal or refrain from dealing in such securities. In the interests of secrecy
prior to this announcement, Harrah's Entertainment has not made any enquiries in
this respect of certain parties who may be deemed by the Takeover Panel to be
acting in concert with it for the purposes of the Offer. Enquiries of such
parties will be made as soon as practicable following the date of this
announcement and any material disclosure in respect of such parties will be
included in the Offer Document.
Appendix I to this announcement contains the Conditions and certain further
terms of the Offer. Certain terms used in this announcement are defined in
Appendix III.
The Offer will be subject to the Conditions and to the full terms and conditions
to be set out in the Offer Document and Form of Acceptance.
ENQUIRIES
Harrah's Entertainment
Dan Foley (Investors) Tel: +1 (702) 407 6370
Alberto Lopez (Media) Tel: +1 (702) 407 6344
Banc of America (financial adviser to Harrah's Entertainment)
Paul Mullins Tel: +44 (0)20 7174 5343
John Bigham Tel: +44 (0)20 7174 4329
Geoff Iles Tel: +44 (0) 20 7174 4522
Hoare Govett (broker to Harrah's Entertainment)
Neil Collingridge Tel: +44 (0)20 7678 8000
Bertie Whitehead
Tulchan Communications (PR adviser to Harrah's Entertainment)
Kirstie Hamilton Tel: +44 (0)20 7353 4200
Andrew Honnor
London Clubs International
William Timmins Tel: +44 (0)20 7518 0000
Barry Hardy
Rothschild (financial adviser to London Clubs International)
Robert Leitao Tel: +44 (0)20 7280 5000
Adam Greenblatt
Panmure Gordon (broker to London Clubs International)
Andrew Godber Tel: +44 (0)20 7459 3600
Gilbert Ellacombe
College Hill Associates (PR adviser to London Clubs International)
Matthew Smallwood Tel: +44 (0)20 7457 2005
Justine Warren Tel: +44 (0)20 7457 2010
This announcement does not constitute an offer to sell or the solicitation of an
offer to subscribe for or buy any security, nor is it a solicitation of any vote
or approval in any jurisdiction, nor shall there be any sale, issuance or
transfer of the securities referred to in this announcement in any jurisdiction
in contravention of applicable law. The Offer will be made solely by means of
the Offer Document and the acceptance forms accompanying the Offer Document,
which will contain the full terms and conditions of the Offer including details
of how it may be accepted.
Banc of America, which is authorised and regulated by the FSA, is acting
exclusively for Harrah's Entertainment and Dagger Holdings Limited and no one
else in connection with the Offer and will not be responsible to anyone other
than Harrah's Entertainment and Dagger Holdings Limited for providing the
protections afforded to clients of Banc of America or for providing advice in
connection with the Offer or any other matters referred to herein.
Hoare Govett, which is authorised and regulated by the FSA, is acting
exclusively for Harrah's Entertainment and Dagger Holdings Limited and no one
else in connection with the Offer and will not be responsible to anyone other
than Harrah's Entertainment and Dagger Holdings Limited for providing the
protections afforded to clients of Hoare Govett or for providing advice in
connection with the Offer or any other matters referred to herein.
Rothschild, which is authorised and regulated in the United Kingdom by the FSA,
is acting exclusively for London Clubs International and no one else in
connection with the Offer and will not be responsible to anyone other than
London Clubs International for providing the protections afforded to clients of
Rothschild or for providing advice in connection with the Offer or any other
matters referred to herein.
Panmure Gordon, which is authorised and regulated in the United Kingdom by the
FSA, is acting exclusively for London Clubs International and no one else in
connection with the Offer and will not be responsible to anyone other than
London Clubs International for providing the protections afforded to clients of
Panmure Gordon or for providing advice in connection with the Offer or any other
matters referred to herein.
The release, publication or distribution of this announcement in certain
jurisdictions may be restricted by law and therefore persons in any such
jurisdictions into which this announcement is released, published or distributed
should inform themselves about and observe such restrictions.
Copies of this announcement and any formal documentation relating to the Offer
are not being, and must not be, directly or indirectly, mailed or otherwise
forwarded, distributed or sent in or into or from a Restricted Jurisdiction and
will not be capable of acceptance by any such use, instrumentality or facility
within a Restricted Jurisdiction and persons seeking such documents (including
custodians, nominees and trustees) must not mail or otherwise forward,
distribute or send it in or into or from a Restricted Jurisdiction. The Offer
will not be made, directly or indirectly, in or into, or by the use of mails or
any means or instrumentality (including, without limitation, telephonically or
electronically) of interstate or foreign commerce of, or any facility of a
national, state or other securities exchange of a Restricted Jurisdiction and
the Offer will not be capable of acceptance by any such use, means,
instrumentality or facilities.
The ability of London Clubs International Shareholders who are not resident in
the United Kingdom or the United States to accept the Offer may be affected by
the laws of the relevant jurisdictions in which they are located. Persons who
are not resident in the United Kingdom or the United States should inform
themselves of, and observe, any applicable requirements.
Forward Looking Statements
This release includes 'forward-looking statements'. You can identify these
statements by the fact that they do not relate strictly to historical or current
facts. These statements contain words such as 'may,' 'will,' 'project,' 'might,'
'expect,' 'believe,' 'anticipate,' 'intend,' 'could,' 'would,' 'estimate,' '
continue' or 'pursue,' or the negative or other variations thereof or comparable
terminology. In particular, they include statements relating to, among other
things, future actions, new projects, strategies, future performance, the
outcomes of contingencies and future financial results of Harrah's
Entertainment. These forward-looking statements are based on current
expectations and projections about future events.
Investors are cautioned that forward-looking statements are not guarantees of
future performance or results and involve risks and uncertainties that cannot be
predicted or quantified and, consequently, the actual performance of Harrah's
Entertainment may differ materially from those expressed or implied by such
forward-looking statements. Such risks and uncertainties include, but are not
limited to, the following factors, as well as other factors described from time
to time in Harrah's Entertainment reports filed with the Securities and Exchange
Commission (including the sections entitled 'Risk Factors' and 'Management's
Discussion and Analysis of Financial Condition and Results of Operations'
contained therein): the effects of local and national economic, credit and
capital market conditions on the economy in general, and on the gaming and hotel
industries in particular; construction factors, including delays, increased
costs for labor and materials, availability of labor and materials, zoning
issues, environmental restrictions, soil and water conditions, weather and other
hazards, site access matters and building permit issues; the effects of
environmental and structural building conditions relating to Harrah's
Entertainment properties; access to available and reasonable financing on a
timely basis; the ability to timely and cost effectively integrate London Clubs
International into Harrah's Entertainment operations; changes in laws, including
increased tax rates, regulations or accounting standards, third-party relations
and approvals, and decisions of courts, regulators and governmental bodies;
litigation outcomes and judicial actions, including gaming legislative action,
referenda and taxation; the ability of Harrah's Entertainment customer-tracking,
customer loyalty and yield-management programs to continue to increase customer
loyalty and same store sales or hotel sales; the ability of Harrah's
Entertainment to recoup costs of capital investments through higher revenues;
acts of war or terrorist incidents or natural disasters; abnormal gaming holds;
and the effects of competition, including locations of competitors and operating
and market competition.
Any forward-looking statements speak only as of the date made. Harrah's
Entertainment disclaims any obligation to update the forward-looking statements.
You are cautioned not to place undue reliance on these forward-looking
statements which speak only as of the date stated, or if no date is stated, as
of the date of this press release.
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 1 per cent. or more of any
class of 'relevant securities' of London Clubs International, 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 London Clubs International, 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 London Clubs International by Harrah's Entertainment
or London Clubs International, 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 Takeover 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, please contact an independent
financial adviser authorised under the Financial Services and Markets Act 2000,
consult the Panel's website at www.thetakeoverpanel.org.uk or contact the Panel
on telephone number +44 (0)20 7638 0129; fax +44 (0)20 7236 7013.
In accordance with normal UK market practice, the Offeror, Harrah's
Entertainment or its nominees, or its brokers (acting as agents) may from time
to time make certain purchases of, or arrangements to purchase, London Clubs
International Shares outside the United States, other than pursuant to the
Offer, before or during the period in which the Offer remains open for
acceptance. These purchases may occur either in the open market at prevailing
prices or in private transactions at negotiated prices and shall comply with the
applicable laws of the United Kingdom as well as the rules of the London Stock
Exchange and the Code. The Offeror will disclose purchases of London Clubs
International Shares in the United States to the extent that such information is
made public in the United Kingdom.
APPENDIX I
Conditions and certain further terms
The Offer will comply with the applicable rules and regulations of the London
Stock Exchange and the Takeover Code, will be governed by English law and will
be subject to the jurisdiction of the courts of England and to the terms and
conditions set out below, in the Offer Document and in the Form of Acceptance.
All dates and times mentioned refer to London time.
The Offer will be subject to the following conditions:
1 valid acceptances of the Offer being received (and not, where
permitted, withdrawn) by no later than 1.00 p.m. on the first closing date of
the Offer (or such later time- and/or date- as Harrah's Entertainment may,
subject to the rules of the Takeover Code, decide) in respect of not less than
90 per cent. (or such lesser percentage as Harrah's Entertainment may decide) in
nominal value of the London Clubs International Shares to which the Offer
relates and not less than 90 per cent. (or such lesser value percentage as
Harrah's Entertainment may decide) of the voting rights carried by the London
Clubs International Shares to which the Offer relates, provided that this
condition will not be satisfied unless Harrah's Entertainment and/or any member
of the Harrah's Entertainment Group shall have acquired or agreed to acquire
(whether pursuant to the Offer or otherwise) the London Clubs International
Shares carrying in aggregate more than 50 per cent. of the voting rights
normally exercisable at general meetings of London Clubs International. For the
purposes of this condition:
1.1 the London Clubs International Shares which have been
unconditionally allotted but not issued shall be deemed to carry the voting
rights which they will carry upon issue;
1.2 the expression 'London Clubs International Shares to which the Offer
relates' shall be construed in accordance with Schedule 2 of the Interim
Implementation Regulations; and
1.3 valid acceptances shall be deemed to have been received in respect
of the London Clubs International Shares which are treated for the purposes of
paragraph 2(15) of Schedule 2 of the Interim Implementation Regulations as
having been acquired or contracted to be acquired by Harrah's Entertainment by
virtue of acceptances of the Offer;
provided that unless Harrah's Entertainment otherwise determines, this condition
1 shall be capable of being satisfied only at a time when all of the other
conditions 2 to 8 inclusive have either been satisfied, fulfilled or, to the
extent permitted, waived;
2
2.1 the UK Office of Fair Trading ('OFT') indicating in terms reasonably
satisfactory to Harrah's Entertainment that it has decided not to refer the
proposed acquisition of London Clubs International by Harrah's Entertainment
(the 'Transaction') or any part of it to the Competition Commission ('CC'); or
2.2 the period for considering any merger notice given to the OFT under
section 96 of the Enterprise Act 2002 ('EA') by Harrah's Entertainment having
expired without any such reference being made, provided that sections 100(1)(a),
(d) and (f) of the EA do not apply in relation to such merger notice;
2.3 if Clause 2.1 or 2.2 is satisfied, the period specified in Rule 26
of the Competition Appeal Tribunal Rules 2003 for making any application under
section 120(1) of the EA for the review of a decision in relation to the
Transaction having expired without any such application being made; and
2.4 the competition commission in South Africa having approved the
transaction pursuant to the Competition Act No. 89 of 1998 (as amended).
3 no central bank, government or governmental, quasi-governmental,
supranational, statutory, regulatory or similar investigative body, trade
agency, court, professional association, or any other such body or person in any
jurisdiction (each 'a 'Third Party') having given notice of a decision to take,
institute or threaten any action, proceeding, suit, investigation, enquiry or
reference, or having required any action to be taken, or otherwise having done
anything, or having enacted, made or proposed any statute, regulation, decision
or order which would:
3.1 make the Offer, its implementation or the acquisition or proposed
acquisition of any of the London Clubs International Shares by Harrah's
Entertainment void, unenforceable or illegal, or restrict, prohibit or delay to
a material extent or otherwise materially interfere with the implementation of,
or impose material additional conditions or obligations with respect to, or
otherwise materially challenge or require material amendment of, the Offer or
the acquisition of any of the London Clubs International Shares by Harrah's
Entertainment;
3.2 result in a material delay in the ability of Harrah's Entertainment,
or render it unable, to acquire some or all of the London Clubs International
Shares or require a divestiture by Harrah's Entertainment or any member of the
Wider Harrah's Entertainment Group of any shares in London Clubs International;
3.3 require, prevent or delay the divestiture, or alter the terms
envisaged for any proposed divestiture, by Harrah's Entertainment or any member
of the Wider Harrah's Entertainment Group or by any member of the Wider London
Clubs International Group, in any such case of all or any part of their
respective businesses, assets or properties, or impose any limitation on their
ability to conduct their respective businesses (or any of them) or to own their
respective assets or properties or any part of them, to an extent in any such
case which is material in the context of the Offer;
3.4 impose any material limitation on, or result in a material delay in,
the ability of Harrah's Entertainment or any member of the Wider Harrah's
Entertainment Group to acquire or to hold or to exercise effectively, directly
or indirectly, all rights of ownership of shares, loans or other securities (or
the equivalent) in, or to exercise management control over, London Clubs
International or the ability of any member of the Wider London Clubs
International Group or Harrah's Entertainment to hold or exercise effectively
any rights of ownership of shares, loans or other securities in, or to exercise
management control over any member of the Wider London Clubs International
Group;
3.5 save pursuant to the Offer or Part XIIIA of the Companies Act,
require any member of the Wider Harrah's Entertainment Group or of the Wider
London Clubs International Group to acquire or offer to acquire any shares or
other securities (or the equivalent) in, or any asset owned by, any member of
the Wider London Clubs International Group owned by any third party;
3.6 result in any member of the Wider London Clubs International Group
ceasing to be able to carry on business under any name which it presently does
so, the consequences of which would be material in the context of the Wider
London Clubs International Group taken as a whole;
3.7 otherwise adversely affect the business, assets, liabilities, or
profits of any member of the Wider Harrah's Entertainment Group or of the Wider
London Clubs International Group, to an extent in any such case which is
material in the context of the Wider Harrah's Entertainment Group or the Wider
London Clubs International Group, as the case may be, taken as a whole, and all
applicable waiting and other time periods during which any such Third Party
could take, institute or threaten any such action, proceeding, suit,
investigation, enquiry or reference or otherwise so intervene having expired,
lapsed or been terminated;
4 all necessary material notifications and filings having been made in
connection with the Offer and all statutory and regulatory obligations in
connection with the Offer in any jurisdiction having been complied with and all
material authorisations, orders, recognitions, grants, consents, clearances,
confirmations, certificates, licences, permissions and approvals
('Authorisations') deemed reasonably necessary or appropriate by Harrah's
Entertainment in any jurisdiction for, or in respect of, the Offer and the
acquisition or the proposed acquisition of the London Clubs International Shares
by Harrah's Entertainment or any member of the Harrah's Entertainment Group
having been obtained in terms reasonably satisfactory to Harrah's Entertainment
from all appropriate Third Parties, or from any persons or bodies with whom any
member of the Wider Harrah's Entertainment Group or the Wider London Clubs
International Group has entered into contractual arrangements, all or any
applicable waiting and other time periods having expired, lapsed or been
terminated (as appropriate) and all such Authorisations (together with all
material Authorisations deemed reasonably necessary or appropriate to carry on
the business of any member of the Wider London Clubs International Group)
remaining in full force and effect at the time at which the Offer becomes
otherwise unconditional and there being no notice of any intention to revoke,
suspend, restrict, amend or not to renew any such Authorisations;
5 save as fairly disclosed in writing to any member of the Harrah's
Entertainment Group or its advisers by or on behalf of London Clubs
International prior to the date of the Announcement or save as publicly
announced by London Clubs International prior to the date of the Announcement,
there being no provision of any arrangement, agreement, lease, licence, permit
or other instrument to which any member of the Wider London Clubs International
Group is a party or by or to which any such member or any of its assets is or
may be bound or be subject, which as a consequence of the Offer or the
acquisition or the proposed acquisition by Harrah's Entertainment or any member
of the Wider Harrah's Entertainment Group of any shares or other securities (or
the equivalent) in London Clubs International or because of a change in the
control or management of any member of the Wider London Clubs International
Group or otherwise, would result, in any case to an extent which is material in
the context of the Wider London Clubs International Group taken as a whole, in:
5.1 any monies borrowed by, or any other indebtedness, actual or
contingent, of, any member of the Wider London Clubs International Group being
or becoming repayable, or being capable of being declared repayable immediately
or prior to their or its stated maturity, or the ability of any such member to
borrow monies or incur any indebtedness being withdrawn or inhibited;
5.2 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 member of the Wider London Clubs International Group or any such
mortgage, charge or other security interest (whenever arising or having arisen)
becoming enforceable;
5.3 any such arrangement, agreement, lease, licence, permit or other
instrument being terminated or adversely modified or affected or any onerous
obligation or liability arising or any adverse action being taken thereunder;
5.4 any assets or interests of any member of the Wider London Clubs
International 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;
5.5 any such member of the Wider London Clubs International Group
ceasing to be able to carry on business under any name under which it presently
does so;
5.6 the value or financial or trading position or profits of London
Clubs International or any member of the Wider London Clubs International Group
being prejudiced or adversely affected; or
5.7 the creation of any liability (actual or contingent) by any member
of the Wider London Clubs International Group;
6 save as disclosed in the Annual Report, or as fairly disclosed in
writing to any member of the Harrah's Entertainment group or its advisers by or
on behalf of London Clubs International or as publicly announced through a
Regulatory Information Service prior to the date of the Announcement, no member
of the Wider London Clubs International Group having since 31 March 2006:
6.1 issued or agreed to issue or authorised or proposed or announced its
intention to authorise or propose the issue of additional shares of any class,
or securities convertible into, or exchangeable for, or rights, warrants or
options to subscribe for or acquire, any such shares or convertible securities
(save as between London Clubs International and wholly-owned subsidiaries of
London Clubs International);
6.2 recommended, declared, paid or made or proposed to recommend,
declare, pay or make any bonus issue, dividend or other distribution whether
payable in cash or otherwise other than dividends (or other distributions
whether payable in cash or otherwise) lawfully paid or made by any wholly-owned
subsidiary of London Clubs International to London Clubs International or any of
its wholly-owned subsidiaries;
6.3 other than pursuant to the Offer implemented, effected, authorised,
proposed or announced its intention to implement, effect, authorise or propose
any merger, demerger, reconstruction, amalgamation, scheme, commitment or
acquisition or disposal of assets or shares (or the equivalent thereof) in any
undertaking or undertakings, in any such case, that is material in the context
of the London Clubs International Group taken as a whole or any change in its
share or loan capital;
6.4 (save for transactions between London Clubs International and its
wholly-owned subsidiaries or other than in the ordinary course of business)
disposed of, or transferred, mortgaged or created any security interest over any
asset or any right, title or interest in any asset, in any such case, that is
material in the context of the London Clubs International Group taken as a whole
or authorised, proposed or announced any intention to do so;
6.5 (save for transactions between London Clubs International and its
wholly-owned subsidiaries) issued, authorised or proposed or announced an
intention to authorise or propose, the issue of any debentures or (save for
transactions between London Clubs International and its wholly-owned
subsidiaries or transactions under existing credit arrangements or in the
ordinary course of business) incurred any indebtedness or contingent liability
which is material in the context of the London Clubs International Group taken
as a whole;
6.6 entered into or varied or authorised, proposed or announced its
intention to enter into or vary any contract, arrangement, agreement,
transaction or commitment (whether in respect of capital expenditure or
otherwise) which is of a long term, unusual or onerous nature or magnitude or
which involves or is reasonably likely to involve an obligation of such a nature
or magnitude which is, in any such case, or which is or is likely to be
restrictive on the business of any member of the Wider London Clubs
International Group, which is, in any such case, material in the context of the
Wider London Clubs International Group taken as a whole;
6.7 entered into or varied to a material extent or authorised, proposed
or announced its intention to enter into or vary to a material extent the terms
of, or make any offer (which remains open for acceptance) to enter into or vary
to a material extent the terms of, any service agreement with any director or,
save for salary increases, bonuses or variations of terms in the ordinary course
of business, senior executive of London Clubs International;
6.8 purchased, redeemed or repaid or announced a proposal to purchase,
redeem or repay any of its own shares or other securities (or the equivalent) or
reduced or made any other change to or proposed the reduction or other change to
any part of its share capital, save for any shares allotted between London Clubs
International and wholly-owned subsidiaries of London Clubs International;
6.9 waived, compromised or settled any claim which is material in the
context of the London Clubs International Group taken as a whole otherwise than
in the ordinary course of business;
6.10 terminated or varied the terms of any agreement or arrangement between
any member of the London Clubs International Group and any other person in a
manner which would or might reasonably be expected to have a material adverse
effect on the financial position or prospects of the London Clubs International
Group taken as a whole;
6.11 (save as disclosed on publicly available registers) made any alteration
to its memorandum or articles of association;
6.12 made or agreed or consented to any significant change to the terms of
the trust deeds 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 involving the appointment of a trust corporation;
6.13 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 any business which is material in the context of the London
Clubs International Group taken as a whole;
6.14 (other than in respect of a member which is dormant and was solvent at
the relevant time) taken or proposed any corporate action or had any action or
proceedings or other steps instituted against it for its winding-up (voluntary
or otherwise), dissolution or reorganisation or for the appointment of a
receiver, administrator, administrative receiver, trustee or similar officer of
all or any material part of its assets or revenues or any analogous proceedings
in any jurisdiction or appointed any analogous person in any jurisdiction; or
6.15 entered into any agreement, arrangement or commitment or passed any
resolution or made any proposal or announcement with respect to, or to effect,
any of the transactions, matters or events referred to in this condition 6;
7 since 31 March 2006, save as disclosed in the Annual Report or
except as publicly announced by London Clubs International (by the delivery of
an announcement to a Regulatory Information Service), in each case prior to the
date of the Announcement, there having been:
7.1 no adverse change in the business, assets, financial or trading
position or profits or prospects of any member of the Wider London Clubs
International Group which is material in the context of the Wider London Clubs
International Group taken as a whole;
7.2 no litigation, arbitration proceedings, prosecution or other legal
proceedings having been announced or instituted by or against or remaining
outstanding against or in respect of any member of the Wider London Clubs
International Group and no enquiry or investigation by or complaint or reference
to any Third Party against or in respect of any member of the Wider London Clubs
International Group having been threatened, announced or instituted or remaining
outstanding, against or in respect of any member of the Wider London Clubs
International Group and which in any such case might reasonably be expected to
have a material adverse effect on the Wider London Clubs International Group
taken as a whole; and
7.3 no contingent or other liability having arisen or become apparent to
any member of the Wider Harrah's Entertainment Group which might reasonably be
expected to adversely affect any member of the Wider London Clubs International
Group and which in any such case is material in the context of the Wider London
Clubs International Group taken as a whole;
8 save as publicly announced by the delivery of an announcement to a
Regulatory Information Service prior to the date of the Announcement or as
otherwise disclosed in the Annual Report or in writing to any member of the
Harrah's Entertainment Group or its advisers by or on behalf of London Clubs
International prior to the date of the Announcement, Harrah's Entertainment not
having discovered:
8.1 that the financial, business or other information concerning the
Wider London Clubs International Group publicly announced or disclosed at any
time by or on behalf of any member of the Wider London Clubs International Group
is misleading, contains a misrepresentation of fact or omits to state a fact
necessary to make the information contained therein not misleading and which is,
in any case, material in the context of the Wider London Clubs International
Group;
8.2 that any member of the Wider London Clubs International Group is,
otherwise than in the ordinary course of business, subject to any liability,
contingent or otherwise, which is material in the context of the Wider London
Clubs International Group taken as a whole;
8.3 that any past or present member of the Wider London Clubs
International Group has failed to comply in any material respect with any
applicable legislation or regulations of any jurisdiction or any notice or
requirement of any Third Party with regard to the storage, 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 that there has
been any such storage, presence, 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 the same may have taken place),
any of which non-compliance would be likely to give rise to any material
liability (whether actual or contingent) or cost on the part of any member of
the Wider London Clubs International Group and which is material. in any such
case, in the context of the Wider London Clubs International Group taken as a
whole; or
8.4 there is, or is reasonably likely to be, any material obligation or
liability (whether actual or contingent) to make good, repair, reinstate 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 London Clubs
International Group under any environmental legislation, regulation, notice,
circular or order of any Third Party in any jurisdiction, in each case to an
extent which is material in the context of the Wider London Clubs International
Group taken as a whole.
For the purposes of this Appendix:
'subsidiary', 'subsidiary undertaking', 'undertaking' and 'associated
undertaking' have the respective meanings given thereto by the Companies Act,
but for this purpose ignoring paragraph 20(1)(b) of Schedule 4A of the Companies
Act, and 'substantial interest' means a direct or indirect interest in 20 per
cent. or more of the equity capital of an undertaking.
Harrah's Entertainment reserves the right to waive, in whole or in part, all or
any of the above conditions 2 to 8 (inclusive).
If Harrah's Entertainment is required by the Panel to make an offer for the
London Clubs International Shares under the provisions of Rule 9 of the Takeover
Code, Harrah's Entertainment may make such alterations to any of the above
conditions, including condition 1 above, and terms of the Offer as are necessary
to comply with the provisions of that Rule.
The Offer will lapse unless all the above conditions have been fulfilled or,
where permitted, waived or, where appropriate, have been determined by Harrah's
Entertainment to be or remain satisfied, by midnight on the 21st day after the
later of the first closing date of the Offer Document and the date on which
condition 1 is fulfilled (or in each case such later date as Harrah's
Entertainment may determine, in accordance with the Takeover Code). Harrah's
Entertainment shall be under no obligation to waive (if capable of waiver), to
determine to be or remain satisfied or to treat as fulfilled any of conditions 2
to 8 (inclusive) by a date earlier than the latest date for the fulfilment of
that condition notwithstanding that the other conditions of the Offer may at
such earlier date have been waived or fulfilled and that there are at such
earlier date no circumstances indicating that any of such conditions may not be
capable of fulfilment.
The Offer will lapse (unless otherwise agreed with the Panel) if, before the
later of the first closing date of the Offer and the date when the Offer becomes
or is declared unconditional as to acceptances the OFT has referred the Offer to
the Competition Commission.
If the Offer lapses, the Offer will cease to be capable of further acceptance
and accepting London Clubs International Shareholders and Harrah's Entertainment
shall cease to be bound by Forms of Acceptance submitted at or before the time
when the Offer so lapses.
The attention of the holders of London Clubs International Shares not resident
in the United Kingdom or the United States is drawn to the relevant provisions
of the formal Offer Document which will be despatched on behalf of Harrah's
Entertainment.
APPENDIX II
Bases Of Calculation And Sources Of Information
1. Historic share prices are sourced from the Daily Official List of the London Stock Exchange and
represent closing middle market prices for London Clubs International Shares on the relevant dates.
2. The value of the entire issued share capital of London Clubs International is based upon 223,424,547
London Clubs International Shares in issue, as published on 26 June 2006 (representing the entire
issued share capital of London Clubs International).
3. All financial information relating to Harrah's Entertainment was extracted from company financial
statements prepared pursuant to generally accepted accounting principles in the United States.
The financial information relating to annual financial performance of Harrah's Entertainment
contained in this announcement is extracted from the audited consolidated financial statements of
Harrah's Entertainment for the years ended 31 December 2004 and 31 December 2005.
The financial information relating to quarterly performance of Harrah's Entertainment is extracted
from the unaudited consolidated condensed financial statements of Harrah's Entertainment for the 3
months ended 30 June 2006.
4. All financial information relating to London Clubs International was extracted from company financial
statements prepared pursuant to International Financial Reporting Standards.
The financial information relating to financial performance of London Clubs International contained
in this announcement is extracted from the audited consolidated financial statements of London Clubs
International for the years ended 27 March 2005 and 31 March 2006.
APPENDIX III
Definitions
The following definitions apply throughout this document, unless the context
requires otherwise:
Aladdin Warrant Holders the holders of the Aladdin Warrants
Aladdin Warrants the warrants to subscribe for London Clubs International
Shares pursuant to the warrant instrument dated 27 February
2004
Annual Report the annual report and accounts of London Clubs International
for the year ended 31 March 2006
Authorisations has the meaning given to it in paragraph 4 of Part 1 of
Appendix I to this document
Banc of America Banc of America Securities Limited, financial advisor to
Harrah's Entertainment and Dagger Holdings Limited
business day a day on which the London Stock Exchange is open for normal
business
Companies Act the Companies Act 1985 (as amended)
Conditions the conditions of the Offer set out in Appendix I to this
document
Daily Official List the daily official list published by the London Stock
Exchange
First Closing Date the date which is 21 days after the posting of the Offer
Document
Form of Acceptance in relation to London Clubs International Shares, the form of
acceptance, authority and election relating to the Offer
which is being sent with the Offer Document for use by London
Clubs International Shareholders wishing to accept the Offer
FSA the Financial Services Authority
Group Company a holding company, a subsidiary or a subsidiary of such
holding company (as such terms are defined by section 736 of
the Companies Act)
Harrah's Entertainment Harrah's Entertainment, Inc.
Harrah's Entertainment Board the board of directors of Harrah's Entertainment
Harrah's Entertainment Directors Gary W. Loveman, Charles L. Atwood, R. Brad Martin, Gary G.
Michael, Ralph Horn, Boake A. Sells, Barbara T. Alexander,
Frank J. Biondi, Jr., Robert G. Miller, Stephen F. Bollenbach
and Christopher J. Williams
Harrah's Entertainment Group Harrah's Entertainment, Inc., its subsidiaries and subsidiary
undertakings
Higher Competing Offer a general offer by a third party for the London Clubs
International Shares, the value of the consideration per
London Clubs International Share available under which at the
time it is made exceeds the value of the consideration per
London Clubs International Share available under the Offer at
that time by at least 10 per cent. on the assumption, in each
case, that any rights to elect to receive different forms of
consideration (including rights to accept underwritten cash
alternatives or other collateral offers) are exercised in
such manner as maximises that value but ignoring the possible
impact of any 'mix and match' or similar arrangement under
which London Clubs International Shareholders can elect,
subject to the elections of other London Clubs International
Shareholders, to vary the proportion in which they receive
different forms of consideration
Hoare Govett Hoare Govett Limited, broker to Harrah's Entertainment and
Dagger Holdings Limited
Interim Implementation Regulations the Takeovers Directive (Interim Implementation) Regulations
2006
Listing Rules the rules and regulations made by the Financial Services
Authority in its capacity as the UK Listing Authority under
the Financial Services and Markets Act 2000, and contained in
the UK Listing Authority's publication of the same name
London Stock Exchange London Stock Exchange plc
London Clubs International London Clubs International plc
London Clubs International Board the board of directors of London Clubs International
London Clubs International Directors Michael Beckett, William Timmins, Barry Hardy, Roy Ramm, Ron
Hobbs and Martin Watson
London Clubs International Group London Clubs International, its subsidiaries and subsidiary
undertakings
London Clubs International Shareholders the holders of London Clubs International Shares, as the case
may be
London Clubs International Shares the existing unconditionally allotted or issued and fully
paid ordinary shares of 5 pence each in the capital of London
Clubs International and any further such ordinary shares
which are unconditionally allotted or issued while the Offer
remains open for acceptance or before such earlier date as
Harrah's Entertainment (subject to the Takeover Code) may
determine, not being, unless the Takeover Panel so permits,
earlier than the date on which the Offer is declared
unconditional as to acceptances or, if later, the first
closing date of the Offer
London Clubs International Share the London Clubs International Savings Related Share Scheme,
Schemes the London Clubs International Executive Share Option Scheme
and the London Clubs International Long Term Incentive Plan
2004
Rothschild N M Rothschild & Sons Limited
Nova Scotia Warrants the warrants to subscribe for London Clubs International
Shares pursuant to the warrant instrument dated 20 April
2004
Nova Scotia Warrant Holders Holders of the Nova Scotia Warrants
Offer the recommended cash offer made by Harrah's Entertainment to
acquire the whole of the issued share capital of London
Clubs International, on the terms and subject to the
conditions set out in the Offer Document and the Form of
Acceptance and including, where the context requires, any
subsequent revision, variation, extension or renewal of such
offer and includes any election available thereunder
Offer Document this document and any other document containing the Offer
Official List the Official List of the UKLA
Overseas Shareholders London Clubs International Shareholders who are resident in
or nationals or citizens of jurisdictions outside the United
Kingdom or who are nominees of, or custodians or trustees
for, citizens or nationals of countries other than the UK
Panmure Gordon Panmure Gordon & Co., broker to London Clubs International
Pounds sterling or £ UK pounds sterling (and references to 'pence' or 'p' shall be
construed accordingly)
Regulatory Information Service any of the services set out in Appendix 3 to the Listing
Rules of the UKLA from time to time
Restricted Jurisdiction any jurisdiction where extension or acceptance of the Offer
would violate the law of that jurisdiction
subsidiary undertaking, associated have the meanings given by the Companies Act (but for these
undertaking and undertaking purposes ignoring paragraph 20(1)(b) of schedule 4A to the
Companies Act)
Takeover Code or Code The City Code on Takeovers and Mergers
the Takeover Panel The Panel on Takeovers and Mergers
Third Party has the meaning given to it in paragraph 3 of Part 1 of
Appendix I to this document
United Kingdom or UK the United Kingdom of Great Britain and Northern Ireland
UKLA or UK Listing Authority the UK Listing Authority, being the Financial Services
Authority Limited acting in its capacity as the competent
authority for the purposes of Part IV of the Financial
Services and Markets Act 2000
United States or US the United States of America, its territories and
possessions, any State of the United States of America and
the District of Columbia
Warrant Proposal the proposal under which Aladdin Warrant Holders may receive
a cash sum on the terms set out in the Warrant Proposal
Documents
Warrant Proposal Documents the documents containing the Warrant Proposal
Wider Harrah's Entertainment Group Harrah's Entertainment and its subsidiary undertakings,
associated undertakings and any other undertakings in which
Harrah's Entertainment and such undertakings (aggregating
their interests) have a substantial interest
Wider London Clubs International Group London Clubs International and its subsidiary undertakings,
associated undertakings and any other undertakings in which
London Clubs International and such undertakings (aggregating
their interests) have a substantial interest
This information is provided by RNS
The company news service from the London Stock Exchange