Tender Offer
British Telecommunications PLC
18 June 2001
NR 0134
British Telecommunications public limited company ('BT')
18 June 2001
Rights Issue
Confirmation of Acceptances
International Tender for 206,884,792 new BT Shares
Background
BT has received valid acceptances in respect of 1,768,695,260 new BT Shares
representing 89.5% of the total number of new BT Shares being offered under
its 3 for 10 rights issue at 300p (the 'Rights Issue').
Accordingly, Cazenove & Co. Ltd ('Cazenove') and Merrill Lynch International
('Merrill Lynch') are today seeking subscribers for the 206,884,792 new BT
Shares for which valid acceptances have not been received. This process is
being managed by way of an international strike price tender (the
'International Tender'). Cazenove and Merrill Lynch are acting as joint
bookrunners (the 'Joint Bookrunners').
Details of International Tender
The International Tender is open with immediate effect and it is expected that
it will remain open until 4.00pm (London time) today. The Joint Bookrunners
reserve the right to alter the closing time. Any changes to the closing time
will be notified by way of a London Stock Exchange Regulatory News Service
('RNS') announcement.
Successful applicants in the International Tender will subscribe for new BT
Shares at a single strike price expressed in sterling to be determined by the
Joint Bookrunners as soon as possible after the book closes, and an equivalent
price in US dollars for the ADSs.
Pricing will be announced and successful applicants will be notified of their
allocations and the amounts payable as soon as possible after the book has
closed.
Non-UK Bidders
The International Tender is not open to investors in Australia, South Africa
or Japan.
Pre-registration
Over 250 institutional investors and London Stock Exchange member firms have
pre-registered for the International Tender. Pre-registration is not required
to participate in the International Tender. However, those accounts who have
pre-registered will, if they have requested it, be forwarded a copy of the
rules and an official tender form.
Procedure for Bidding
Institutional investors and London Stock Exchange member firms wishing to
submit bids may submit a telephone order via their usual sales contact at
Cazenove or Merrill Lynch.
Alternatively, institutional investors or LSE member firms may complete an
official tender form (and, if required, a supplementary official tender form)
and return it by fax in accordance with the instructions set out on the form(s).
Faxed bids will only be accepted if submitted on an official tender form.
Official tender forms and supplementary official tender forms can be obtained
by calling either Mr Michael Willmott (Tel: +44 (0) 207 457 3385) or Mrs
Louise Clarke (Tel: +44 (0) 207 512 6379) at Cazenove or Jacquie Whittingham
(Tel: +44 (0) 207 867 3700) at Merrill Lynch.
Bids may be submitted, in whole pence, on either:
* a fixed price basis; or
* a strike price basis;
Bids at multiple fixed prices will be accepted. In relation to all such bids,
bidders are requested to set down the total demand for new BT Shares at each
price at which they bid.
Bids expressed in US dollars will be accepted. Bids in currencies other than
sterling or US dollars will not be accepted.
Bids may also be made for ADSs. One ADS will represent ten new BT Shares. The
purchase price payable for successful bidders of ADSs will be calculated with
reference to:
* the strike price achieved in the International Tender; and
* the sterling dollar exchange rate as determined by the Joint
Bookrunners.
Amendment or cancellation of bids
Bids, whether submitted orally or by fax, may only be amended or cancelled
before the close of the International Tender.
Telephone bids may only be amended or cancelled by the individual who placed
the bid speaking to the Cazenove or Merrill Lynch representative through whom
the original telephone bid was placed.
Bids received by way of a faxed official tender form may only be amended or
cancelled by:
* in the case of an amended bid, a new official tender form being faxed to
Cazenove or Merrill Lynch, making clear that the new official tender form
replaces the official tender form previously sent;
* in the case of a cancelled bid, the original official tender form being
faxed to Cazenove or Merrill Lynch with the words 'TENDER CANCELLED'
clearly marked across the original official tender form.
After the close of the International Tender, bids shall become irrevocable and
shall be binding on such bidders.
Allocation policy
Allocations under the International Tender will be at the sole discretion of
the Joint Bookrunners. However, in deciding allocations, the Joint Bookrunners
expect to take the following criteria into account:
* price leadership with fixed price bids favoured over strike price bids;
* the timeliness of bids received; and
* pre-registration.
Bidding history and market activity by prospective bidders will be closely
monitored by the Joint Bookrunners.
Right to reject bids
Cazenove and Merrill Lynch reserve the right to reject any bid or part of any
bid. Full details of the rules relating to the International Tender are being
published as an Appendix to this announcement.
Settlement
Ordinary shares:
Settlement for the new BT Shares will be through CREST and will be on a T+3
basis. Settlement is expected to be due on 22 June 2001.
The new BT Shares will be subscribed for free of Stamp Duty and PTM levy.
ADSs:
Settlement for any ADSs purchased will be through DTC and will be on a T+3
basis. Settlement is expected to be due on 22 June 2001. Purchasers of ADSs
will be required to pay SDRT at the rate of 1.5% in addition to an issuance
fee of no more than 5 cents per share and any other foreign exchange costs
incurred. For full details please refer to the International Tender rules.
Contacts
Cazenove & Co. Ltd. Telephone: +44 20 7588 2828
David Mayhew
Edmund Byers
Merrill Lynch International Telephone: +44 20 7628 1000
Rupert Hume-Kendall
Rupert Evenett
This announcement, which has been issued by, and is the sole responsibility
of, British Telecommunications public limited company ('BT), has been approved
by Cazenove & Co. Ltd and Merrill Lynch International, each of which is
regulated in the UK by The Securities and Futures Authority, solely for the
purposes of Section 57 of the Financial Services Act 1986.
Each of Cazenove & Co. Ltd and Merrill Lynch International is acting for BT
and no one else in connection with the Rights Issue and the International
Tender and will not be responsible to anyone other than BT for providing the
protections afforded to customers of Cazenove & Co. Ltd or Merrill Lynch
International respectively or for providing advice in relation to the Rights
Issue or the International Tender.
This announcement does not constitute, or form part of, an offer or any
solicitation of an offer, for securities.
The above materials are not an offer of securities for sale in the United
States. The securities being offered in the International Tender may not be
sold in the United States absent registration or an exemption from
registration under the U.S. Securities Act of 1933, as amended. A registration
statement relating to these securities has been filed with the U.S. Securities
and Exchange Commission and has become effective. Any public offering of the
securities in the United States will be made only by means of a US prospectus
containing detailed information regarding BT and BT's management, including
financial statements. Such US prospectus is available through BT at 81 Newgate
Street, London EC1A 7AJ.
Appendix: The International Tender Rules
Under the terms of the British Telecommunications public limited company
('BT') rights issue, which was announced on 10 May 2001, Cazenove & Co. Ltd
('Cazenove') and Merrill Lynch International ('Merrill Lynch') (the 'Joint
Bookrunners'), acting as agents for BT, have undertaken to procure subscribers
for those new BT Shares not validly subscribed for (the 'Sale Shares'). These
Sale Shares will only be placed to the extent that a price at least equal to
the issue price (300p) can be obtained. Subscribers for the Sale Shares are
being sought by way of an international strike price tender (the
'International Tender'), which commences at 7.00a.m. (London time) on 18 June
2001(the 'Tender Date'). The following are the rules (the 'Rules') for the
conduct of the International Tender.
Contents
The Rules contain:
1. Expected timetable
2. Structure of the International Tender
3. Settlement Procedures
4. General
1. Expected timetable
Please note that all times relate to British Summer Time.
The International Tender commences at 7.00a.m. on 18 June 2001 following
the release of a London Stock Exchange Regulatory News Service ('RNS')
announcement confirming the launch of the International Tender and the
precise number of Sale Shares to be sold in the International Tender.
The International Tender is expected to remain open until 4.00p.m. (London
time) on 18 June 2001. However, the Joint Bookrunners reserve the sole
right to alter the closing time. Any changes to the closing time will be
notified by way of an RNS announcement.
Bidders will be notified of the outcome of their bids as soon as possible
after the book has closed. It is expected that bidders will be notified by
no later than 8.00a.m. on the business day following the close of the
International Tender.
Transactions resulting from successful bids in the International Tender
will be effected on the business day following the close of the
International Tender for settlement on a T+3 basis. Settlement is expected
to be on 22 June 2001.
2. Structure of the International Tender
Pricing
Successful applicants in the International Tender will subscribe for the Sale
Shares at a single strike price, expressed in sterling, to be determined by
the Joint Bookrunners as soon as possible after the book closes, and an
equivalent price in US dollars for the ADSs.
The minimum price (the 'Minimum Price') at which bids will be accepted will be
equal to the subscription price (300p). Bids below the Minimum Price will not
be accepted.
Pre-registration
Pre-registration is not required to participate in the International Tender.
However, those accounts who have pre-registered, will, if they have requested
it, be forwarded a copy of the Rules and an official tender form.
Procedure for Bidding
Order Submission
Institutional investors and LSE member firms wishing to submit bids may submit
a telephone bid via their usual sales contact at Cazenove or Merrill Lynch.
Alternatively, institutional investors or LSE member firms may complete an
official tender form (and, if required, a supplementary official tender form)
and return it by fax in accordance with the instructions set out on the form
(s). Faxed bids will only be accepted if submitted on an official tender form.
Bids may be submitted, in whole pence, on either:
* a fixed price basis; or
* a strike price basis.
Bids at multiple fixed prices will be accepted. In relation to such bids,
bidders are requested to set down the total demand for new BT Shares or ADSs
at each price at which they bid.
Bids expressed in US dollars will be accepted. Bids in currencies other than
sterling or US dollars will not be accepted.
Bids may also be made for ADSs. One ADS will represent ten new BT Shares. The
purchase price payable by successful bidders for ADSs will be calculated with
reference to:
* the strike price achieved in the International Tender; and
* the sterling dollar exchange rate as determined by the Joint
Bookrunners.
Bids made in accordance with these Rules will be binding on the bidders upon
receipt by Cazenove or Merrill Lynch of the telephone order or of the official
tender form and, if required, a supplementary official tender form, unless
validly withdrawn.
By submitting a bid which is not validly amended or cancelled, in accordance
with these Rules, a bidder will irrevocably undertake to acquire the number of
Sale Shares at the prices specified (or such lesser number of Sale Shares as
the Joint Bookrunners may notify to that bidder).
After the close of the International Tender, bids shall become irrevocable and
shall be binding on bidders.
Official Tender Forms
Official tender forms and supplementary official tender forms are only
necessary for faxed bids. These can be obtained by calling either Mr Michael
Willmott (Tel: +44 (0) 207 457 3385) or Mrs Louise Clarke (Tel: +44 (0) 207
512 6379) at Cazenove or Ms Jacquie Whittingham (Tel: +44 (0) 207 867 3700) at
Merrill Lynch.
Use of Official Tender Forms and Supplementary Official Tender Forms
When institutional investors or LSE member firms wish to submit a written bid
they must use an official tender form provided by either Cazenove or Merrill
Lynch. In the event that the official tender form has insufficient space, they
should use a supplementary official tender form to complete their bid. Bids
received solely by way of a supplementary official tender form may not be
accepted.
Amendment or cancellation of bids
Bids, whether submitted orally or by fax, may only be amended or cancelled
before the close of the International Tender.
Telephone bids may only be amended or cancelled by the individual who placed
the bid speaking to the Cazenove or Merrill Lynch representative through whom
the original telephone bid was placed.
Bids received by way of a faxed official tender form and, if required, a
supplementary official tender form, may only be amended or cancelled by:
* in the case of an amended bid, a new official tender form being faxed to
Cazenove or Merrill Lynch, making clear that the new official tender form
replaces the official tender form previously sent;
* in the case of a cancelled bid, the original official tender form being
faxed to Cazenove or Merrill Lynch with the words 'TENDER CANCELLED'
clearly marked across the original official tender form.
Faxed bids, amendments or cancellations
Institutional investors and LSE member firms are reminded that proven despatch
of a faxed official tender form or supplementary official tender form is not
proof of delivery to Cazenove or Merrill Lynch. Bidders may therefore wish to
seek verbal confirmation through the designated Cazenove or Merrill Lynch
representative that faxed official tender forms, supplementary official tender
forms, amendments or cancellations have been received.
Allocation Policy
Allocations under the International Tender will be at the sole discretion of
the Joint Bookrunners. However, in deciding allocations, the Joint Bookrunners
expect to take the following criteria into account:
* price leadership, with fixed price bids favoured over strike price bids;
* the timeliness of bids received; and
* pre registration.
Bidding history and market activity by prospective bidders will be closely
monitored by the Joint Bookrunners.
Cazenove and Merrill Lynch reserve the right to allocate fewer Sale Shares
than the number bid for (including making a zero allocation) to any bidder,
regardless of the price(s) at which that bidder tendered, where, in Cazenove's
and Merrill Lynch's joint opinion and without liability to the bidder
concerned, that bidder is considered to be unlikely to be able to make the
necessary payment in full in respect of the Sale Shares for which it has bid.
Right to reject bids
Cazenove and Merrill Lynch reserve the right, in their absolute discretion and
without liability to any bidder, to refuse to accept any oral bid, official
tender form or, where submitted, supplementary official tender form that they
consider to be illegible, incomplete, incorrectly completed or unclear in any
significant way.
Non-UK Bidders
Institutions located in Australia, South Africa or Japan are not able to
participate in the International Tender. Cazenove and Merrill Lynch reserve
the right to disregard any bids received if they consider (in their absolute
discretion) that applicable securities laws make it appropriate or advisable
to do so.
All non-UK bidders are only entitled to rely on the information contained in
the US prospectus when determining whether to make an investment decision.
UK bidders are only entitled to rely on the information contained in the UK
prospectus when determining whether to make an investment decision.
It is the responsibility of each bidder to satisfy themselves as to the full
observance of the laws of their relevant jurisdiction.
Commission
Agency commission will be applied to all successful bids.
Stamp Duty and PTM Levy and ADS costs
The Sale Shares will be subscribed for free of Stamp Duty and PTM levy.
Purchasers of ADSs will pay SDRT at the rate of 1.5% plus the ADS issuance fee
of no more than 5 cents per ADS.
Procedures in the event of an under-subscribed International Tender
Cazenove and Merrill Lynch reserve the right to amend the closing time of the
International Tender or to hold further international tenders for any Sale
Shares that have not been successfully sold through the International Tender.
In such an event, an announcement will be made by way of an RNS announcement
as soon as practicable.
1. Settlement Procedures
Booking details and issuance of contract notes
Ordinary shares
Clients of Cazenove and Merrill Lynch will receive a contract note for each
sub-account to which Sale Shares are allocated setting out the total number of
Sale Shares purchased for that sub-account, the price at which those Sale
Shares were purchased and details of any commission payable.
Booking details must be returned to the same broker through whom the bid was
submitted:
+ for clients of Cazenove, details should be returned either by
Electronic Trade Confirmation or by telephone to the Cazenove Contract
Department, Paul Cox (Tel: +44 (0)207 825 9714 or John Church (Tel:
+44 (0)207 825 9597): (Fax: +44 (0)207 606 9205) or, alternatively, in
accordance with the client's standard procedure for providing booking
instructions. In any event, this information must be provided by 12.00
(midday) on the day following the International Tender;
+ for clients of Merrill Lynch, details should be returned to your
appropriate sales contact at Merrill Lynch International.
LSE member firms who purchase Sale Shares in the International Tender will
receive a settlement letter setting out the total number of Sale Shares
purchased by that LSE member firm, the price at which those Sale Shares were
purchased and details of any commission payable.
ADSs
Clients of Cazenove and Merrill Lynch will receive a contract note for each
sub-account to which ADSs are allocated setting out the total number of ADSs
purchased for that sub-account, the price at which those ADSs were purchased,
SDRT at the rate of 1.5%, an issuance fee of no more than 5 cents per ADS,
details of any commission payable and any other foreign exchange costs
incurred.
Settlement
Ordinary Shares
All Sale Shares purchased must be settled in CREST on the third business day
after the day on which the transaction is executed. Settlement is expected to
be on 22 June 2001 (the 'Settlement Date').
In particular, LSE member firms, institutional investors and their custodians
must ensure that they have sufficient debit caps available in CREST to enable
settlement of all their purchases of Sale Shares to be completed on the
settlement date.
All queries relating to settlement of purchases of Sale Shares should be
addressed to the CREST Checking Department at Cazenove, Jenny Bowes (Tel: +44
(0)207 825 9320) or Alex Tyson (Tel: +44 (0)207 825 9628) or at Merrill Lynch,
Dave Kendall (Tel: +44 (0) 207 867 9621).
ADSs
Delivery of ADS allocations will be made at the discretion of the Joint
Bookrunners through the DTC on 22 June 2001. Please enter instructions with
DTC to receive your allotment from either:
* Cazenove's account at DTC a/c no. 5117 (reference: Cazenove - BT
Tender); or
* Merrill Lynch's account at DTC a/c no. 161 (reference: Merrill Lynch
International Syndicate - BT).
For clients of Cazenove, please fax Stewart Hammond, International Settlements
(Fax: +44 (0) 207 606 9205) not later than 2.00p.m. on 21 June 2001 with the
following details:
1. Name and DTC a/c no of your DTC clearing agent or New York broker;
2. Your account number ('Institutional ID') with the clearing agent or broker;
and
3. Name and telephone number of the contacts in your settlements department
and at your clearing agent or New York broker.
For clients of Merrill Lynch, please fax James Bewley, Equity Operations and
Settlements (Fax: +44 (0) 207 772 2547) not later than 2.00p.m. on 21 June
2001 with the following details:
1. Name and DTC a/c no of your DTC clearing agent or New York broker;
2. Your account number with the clearing agent or broker;
3. Name and telephone number of the contacts in your settlements department
and at your clearing agent or New York broker.
Cazenove and Merrill Lynch reserve the right to charge interest to purchasers
who fail to settle on the due settlement date at the rate of 2.0 per cent. per
annum above the base rate of The Royal Bank of Scotland plc from time to time
on the amount payable in respect of the purchases of Sale Shares or ADSs.
Cazenove and Merrill Lynch reserve the right in their absolute discretion to
cancel all or part of the allocation to, and sell or re-allocate the Sale
Shares of, a bidder to whom Sale Shares were previously allocated where that
bidder has not made payment by the due time and date or, in Cazenove's or
Merrill Lynch's joint opinion and without liability to the bidder concerned,
where, the bidder is unlikely to be able to make the necessary payment in
full, whether before or after the due time, in respect of the Sale Shares for
which it has tendered. In such a case, the bidder will be notified in writing
by Cazenove or Merrill Lynch, as appropriate, by the end of the day on which
such a sale has occurred.
1. General
Each bidder in the International Tender will be deemed, by submitting a
tender, either verbally or by fax on an official tender form or, if required,
a supplementary official tender form to represent, warrant and undertake to
Cazenove and Merrill Lynch that:
i. the bidder has read and understood the International Tender Rules
(including these representations, warranties and undertakings); and
ii. the bidder has full power and authority to purchase the Sale Shares in
accordance with the terms of the International Tender and all necessary
corporate and other actions have been taken to authorise such a purchase;
and
iii. the bidder has complied with all relevant laws or regulations of any
relevant territory outside the UK and that none of Cazenove or Merrill
Lynch will infringe any laws of any jurisdiction outside the UK as a
result of acceptance of that bidder's application (whether in whole or
part); and
iv. the bidder is not located in Australia, South Africa or Japan and is not a
resident or national of any such country and is not applying on behalf of
any such person; and
v. the person who has executed the official tender form or supplementary
official tender form is duly authorised to do so in respect of such number
of Sale Shares at such prices as are set out in the official tender form
or supplementary official tender form; and
vi. in making an investment decision, the bidder has relied solely on
information contained in the BT UK prospectus dated 10 May 2001 or, as the
case may be, the BT US prospectus dated 10 May 2001; and
vii. the bidder has complied and will comply with all applicable provisions of
the Financial Services Act 1986 with respect to anything done by him/her
in relation to the Sale Shares in, from or otherwise involving the United
Kingdom; and he/she has only issued or passed on and will only issue or
pass on in the United Kingdom any document received by him/her in
connection with the International Tender to a person described in Article
11 (3) of the Financial Services Act 1986 (Investment Advertisements)
(Exemptions) Order 1997 or a person to whom the document may otherwise
lawfully be issued or passed on; and
viii. the bidder submits to the jurisdiction of the Courts of England and
Wales in respect of all matters arising in connection with the
International Tender.
Cazenove and Merrill Lynch reserve the right to amend or supplement these
rules at any time without the consent of or notice to any person. Where
possible, Cazenove and Merrill Lynch will endeavour to announce such
amendments or supplementary rules by way of an RNS announcement.
This document has been approved by Cazenove & Co. Ltd and Merrill Lynch
International for the purposes of Section 57 of the Financial Services Act
1986