Tender Offer
LONDON--(BUSINESS WIRE)--Feb. 12, 2003--
ARC International plc ("the Company")
Proposed return of £50 million of capital to shareholders
Introduction
On 22 November 2002, the Board of ARC International plc announced that
it intended to return £50.0 million of capital to shareholders during
the first half of 2003, to optimise the Company's capital structure
and shareholders' potential for future returns. On 6 December 2002,
further to a review of alternative methods of payment by the Board, it
was announced that the purchase of ordinary shares for cancellation
would be the most effective way of returning capital to shareholders.
The Board today announces the details of the return of £50.0 million
of cash by means of a tender offer ("Tender Offer") involving the
repurchase for cancellation of up to £48.5 million worth of ordinary
shares (less the costs of the Tender Offer) and the lending of a
further £1.5 million by the Company to the trustee of ARC
International's Employee Benefit Trust ("the EBT Trustee") to fund
proposed market purchases of ordinary shares by the EBT Trustee.
In addition, the Board announces that it will seek the approval of
independent shareholders to a waiver, which the Panel on Takeovers and
Mergers has agreed to give (subject to such approval), of the
obligation that might otherwise arise under Rule 9 of the City Code on
Takeovers and Mergers for Mr Jeremy San and persons deemed to be
acting in concert with him to make a mandatory offer for the Company
if their holding of ordinary shares represents, in aggregate, 30
percent or more of the voting rights of the Company following
completion of the Tender Offer or following further market purchases
by the Company thereafter. The Board also announces details of
proposals to amend certain terms of some of the Company's share
schemes. The Directors view these amendments as an important and
integral part of positioning ARC International for the future.
It is proposed, subject to the approval of shareholders and
confirmation by the Court, that the share premium account of the
Company be cancelled, that the amount cancelled (together with the
balance of the reserve created by the reduction of the Company's share
premium account in 2000) be applied first to offset the accumulated
deficit on the Company's profit and loss account as at the time the
reduction of capital becomes effective and secondly to create a
distributable reserve of up to approximately £73.5 million, of which
up to £48.5 million will be applied to acquire ordinary shares
purchased by WestLB Panmure pursuant to the Tender Offer. It is
expected that the reduction of capital will become effective on or
about 2 April 2003 and that the Tender Offer will be commenced on or
about 8 May 2003.
Tender Offer
The Directors are proposing the Tender Offer as the method of
returning capital to shareholders because they believe that the Tender
Offer will allow shareholders to be treated equitably, while offering
them the choice to participate in a return of capital. The principal
terms of the Tender Offer (which will be set out in more detail in a
document to be sent to shareholders on or about 8 May 2003) are as
follows:
o WestLB Panmure will invite shareholders to tender ordinary
shares at any price within a tender price range (such range
to be determined by WestLB Panmure and the Board shortly
before the commencement of the Tender Offer and falling
within the minimum and maximum levels indicated below);
o WestLB Panmure will purchase, as principal, existing issued
ordinary shares for up to a total purchase price of £48.5
million (less the costs of the Tender Offer), and then sell
such shares to the Company for cancellation;
o All shareholders on the Company's register of members on a
specified date (other than certain overseas shareholders)
will be given the opportunity to participate in the Tender
Offer. It is intended however, to make the Tender Offer
available to shareholders resident in the United States and
Canada, subject to the availability of applicable exemptions;
o All ordinary shares which are successfully tendered will be
purchased at the same price ("the Strike Price"), which will
be determined at the conclusion of the Tender Offer on the
basis of the prices at which ordinary shares have been
tendered. The Strike Price will be the lowest price per
ordinary share (within the price range specified in the
Tender Offer document) which will allow WestLB Panmure to
purchase ordinary shares with an aggregate purchase value not
exceeding £48.5 million (less the costs of the Tender Offer);
o The potential range for the Strike Price will be set within the
following minimum and maximum levels:
(i) the minimum price (exclusive of any expenses) which will
be paid for any ordinary share will be 22 pence per ordinary
share; (ii) the maximum price (exclusive of any expenses)
which will be paid for any ordinary share will not be more
than 30 percent above the average of the middle market
quotation for an ordinary share as derived from the Daily
Official List of the London Stock Exchange plc for the ten
business days ending on the business day prior to the
publication of the document containing the formal terms of
the Tender Offer;
o Shareholders will be informed of the tender price range in
the document containing the formal terms and conditions of
the Tender Offer. Shareholders will be entitled to tender
ordinary shares for sale at different prices within the
tender price range but all ordinary shares purchased by
WestLB Panmure will be purchased at the Strike Price and
ordinary shares tendered at a price or prices above the
Strike Price will not be purchased under the Tender Offer.
Further purchases of ordinary shares
Following the completion of the Tender Offer, it is possible that,
subject to consideration of the financial position of the Company,
further surplus capital may be returned to shareholders, if the
Directors consider it appropriate. It is reasonably likely that
further market purchases by the Company of ordinary shares for
cancellation would be the method adopted for returning such surplus
capital. Accordingly, it is proposed, subject to shareholder approval,
that the Company be authorised to make further market purchases of
ordinary shares following the implementation of the Tender Offer.
Shareholders have today been sent a circular setting out the further
details of the formal proposals which will enable these arrangements
to be implemented and which includes a notice of Extraordinary General
Meeting and explains what actions are needed to be taken at this time.
Expected key dates are as follows:
Latest time and date for receipt of Forms of Proxy 9.00 a.m. on 5 March 2003
Extraordinary General Meeting 9.00 a.m. on 7 March 2003
Court hearing to confirm the cancellation of the Company's share premium account on or about 2 April 2003
Announcement of results for the quarter ending 31 March 2003 23 April 2003
Despatch of tender forms 8 May 2003
End of Tender Offer period 22 May 2003
Despatch of cheques by 29 May 2003
The above mentioned dates are indicative only and will depend, inter
alia, on the date upon which the High Court confirms the cancellation
of the Company's share premium account.
If any of the above times and/or dates should change, the revised
times and/or dates will be notified to shareholders by an announcement
on a Regulatory Information Service
Enquiries:
ARC International plc
Mike Gulett, Chief Executive Officer 001 408 437 3404
Monica Johnson, Chief Financial Officer 001 408 437 3470
WestLB Panmure +44 (0) 20 7020 4000
Tim Linacre
Andrew Godber
Tulchan Communications +44 (0) 20 7353 4200
Julie Foster
Short Name: Arc Intl PLC
Category Code: TEN
Sequence Number: 00001893
Time of Receipt (offset from UTC): 20030212T155557+0000
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