FKI announces Tender Offer fo

RNS Number : 2713C

Melrose PLC

29 August 2008

 



Date: 29 August 2008

NOT FOR DISTRIBUTION TO ANY PERSON LOCATED OR RESIDENT IN THE UNITED STATES OR THE REPUBLIC OF ITALY (SEE OFFER AND DISTRIBUTION RESTRICTIONS BELOW)

FKI plc announces Tender Offer and Proposal for its

€600,000,000 6.625 per cent. Guaranteed Bonds due 2010

(the Bonds)

FKI plc (the Company) announces its invitation today to:

(i)    all eligible Bondholders to tender their Bonds for repurchase by the Company or, failing the Company, FKI Engineering Limited (formerly FKI Engineering PLC) and FKI Industries Inc. (together, the Guarantors) for cash (the Offer); and

(ii)    all Bondholders to approve the modification of the Conditions to provide for the Company to have the option to redeem (the Issuer Call) all, but not some only, of the Bonds remaining (if any) on completion of the Offer (the Proposal), subject, in each case, to the terms and conditions set out in the Tender Offer Memorandum dated 29 August 2008 (the Tender Offer Memorandum).

Description of the Bonds	Common Code/ISIN	Outstanding Principal Amount	Repurchase Yield	Repurchase Spread	Effective Early Tender Yield	Effective Early Tender Spread
€600,000,000 6.625 per cent. Guaranteed Bonds due 2010	10765722/XS0107657222	€600,000,000	Sum of the Interpolated Mid-Swap Rate and the Repurchase Spread	120 bps	Sum of the Interpolated Mid-Swap Rate and the Effective Early Tender Spread	100 bps

Copies of the Tender Offer Memorandum are available from the Dealer Managers and the Tender Agent as set out below.  Capitalised terms used in this announcement but not defined have the meanings given to them in the Tender Offer Memorandum.

Notice (the Notice) of a meeting (the Meeting) of the Bondholders to be held at the offices of Allen & Overy LLP, One Bishops Square, London E1 6AD on 22 September 2008 at 11.00 a.m., London time, has been published in the Financial Times today.  The Notice will also be delivered today to the Clearing Systems for communication to Direct Participants.  At the Meeting, Bondholders will be invited to consider and, if thought fit, pass an extraordinary resolution for the implementation of the Proposal as set out in the Notice (the Extraordinary Resolution).

Details of the Offer

The price payable for each €1,000 principal amount of the Bonds (the Repurchase Price) accepted by the Company for repurchase pursuant to the Offer will be determined at or around 11.00 a.m., London time, (the Pricing Time) on 23 September 2008 (the Pricing Date) in the manner described in the Tender Offer Memorandum by reference to the sum (such sum, the Repurchase Yield) of the repurchase spread of 120 basis points (bps) (the Repurchase Spread) and the Interpolated Mid-Swap Rate.  The Company or, failing the Company, the Guarantors will also pay an Accrued Interest Payment in respect of those Bonds accepted for repurchase pursuant to the Offer.

The Offer begins on 29 August 2008 (the Launch Date) and expires at 4.00 p.m., London time, on 17 September 2008 (the Expiration Deadline), unless the period for the Offer is extended or re-opened or the Offer is terminated. In order to be eligible to receive the Repurchase Price, Bondholders must validly tender their Bonds by the Expiration Deadline, by delivering, or arranging to have delivered on their behalf, a valid Tender Instruction that is received by the Tender Agent by the Expiration Deadline.

Each Bondholder who validly tenders its Bonds by 4.00 p.m., London time, on 12 September 2008 (the Early Tender Deadline) (and does not subsequently revoke such tender) will receive a further cash payment (the Early Tender Premium) in addition to the Repurchase Price and Accrued Interest Payment, and as additional consideration for its tender of the relevant Bonds, for each €1,000 in principal amount of such Bonds accepted for repurchase pursuant to the Offer.  The amount of the Early Tender Premium for such Bondholder will be equal to the difference between the Repurchase Price of the relevant Bonds and an effective repurchase price (the Effective Early Tender Price) of such Bonds determined in the same manner as for the Repurchase Price but by reference to the sum (such sum, the Effective Early Tender Yield) of an effective repurchase spread of 100 bps (the Effective Early Tender Spread) and the Interpolated Mid-Swap Rate.

Bondholders to whom the Offer is not being made pursuant to the offer restrictions set out in the Tender Offer Memorandum (each an Ineligible Bondholder) may also be eligible, to the extent permitted by applicable laws and regulations, to receive an identical amount to the Early Tender Premium (the Ineligible Bondholder Early Submission Amount) by delivering, or arranging to have delivered on their behalf, a valid Ineligible Bondholder Instruction in favour of the Proposal, that is received by the Tender Agent by the Early Tender Deadline and not subsequently revoked. The Ineligible Bondholder Early Submission Amount will be paid by the Company or, failing the Company, the Guarantors in the circumstances described in the Tender Offer Memorandum to relevant Ineligible Bondholders on the Settlement Date and otherwise on the same basis as if the Bonds in respect of which any such Ineligible Bondholder has validly submitted an Ineligible Bondholder Instruction were permitted to be and in fact were accepted for repurchase by the Company pursuant to the Offer.

Notwithstanding the above or any other provision of the Offer or the Proposal, in no circumstances will Bondholders receive less than the principal amount of their Bonds on any repurchase or redemption of them pursuant to the Offer or the Proposal, as the case may be, if completed (plus an Accrued Interest Payment/Accrued Interest and, if eligible, any Early Tender Premium/Ineligible Bondholder Early Submission Amount payable).

If the Extraordinary Resolution is passed at the Meeting and the Supplemental Trust Deed entered into, and the Company, in its sole discretion, chooses to exercise the Issuer Call immediately, the amounts payable by the Company for Bonds redeemed pursuant to the Issuer Call will be the same as amounts payable by the Company for equal principal amounts of the Bonds repurchased at the Repurchase Price pursuant to the Offer (including in each case the amounts payable in respect of Accrued Interest).

If the Meeting is adjourned the Company may choose, in its sole discretion and without limiting the Company's right to otherwise extend, re-open, amend, waive any condition of or terminate the Offer or the Proposal as provided in this Tender Offer Memorandum, to amend the terms and conditions of the Offer and the Proposal to provide for (i) the Offer Acceptance Deadline, (ii) the Pricing Date and (iii) the Settlement Date, to take place after the adjourned Meeting on the same basis as for the original Meeting. 

Under the Offer and the Proposal, all (i) Tender Instructions and (ii) Ineligible Bondholder Instructions in favour of the Proposal delivered by the Early Tender Deadline, will be irrevocable except in the limited circumstances described in the Tender Offer Memorandum.

By tendering Bonds in the Offer or submitting an Ineligible Bondholder Instruction in favour of the Proposal, Bondholders will instruct the Principal Paying Agent to appoint one or more representatives of The Bank of New York Mellon (the Tender Agent) as their proxy to vote in favour of the Extraordinary Resolution at the Meeting. It will not be possible to validly tender Bonds in the Offer without at the same time giving such instructions to the Principal Paying Agent.  

Indicative Offer Timetable

Date and time	Event
29 August 2008	Launch Date.
12 September 2008 at 4.00 p.m., London time	Early Tender Deadline.
17 September at 4.00 p.m., London time	Expiration Deadline.
18 September at 11.00 a.m., London time	Final voting deadline.  Final deadline for submitting voting instructions or obtaining a voting certificate from the Principal Paying Agent for the Meeting.
The final deadline for Bondholders to be eligible to receive the Early Tender Premium or Ineligible Bondholder Early Submission Amount, as the case may be, is the Early Tender Deadline.  Bondholders that tender Bonds or submit an Ineligible Bondholder Instruction in favour of the Proposal where such tender or Ineligible Bondholder Instruction is received by the Tender Agent by the Expiration Deadline or final voting deadline, as the case may be, but after the Early Tender Deadline will not be eligible to receive the Early Tender Premium or Ineligible Bondholder Early Submission Amount.  Similarly, Bondholders that otherwise submit voting instructions or make arrangements to attend or be represented at the meeting will not be eligible for the Early Tender Premium or Ineligible Bondholder Early Submission Amount.
22 September at 11.00 a.m., London time	Meeting, announcement of the results of the Meeting and announcement by the by the Company as to whether it accepts for repurchase the Bonds validly tendered in the Offer. If the Extraordinary Resolution is passed at the Meeting and the Supplemental Trust Deed entered into, and the Company, in its sole discretion, chooses to exercise the Issuer Call immediately, notice of such exercise is also to be given to Bondholders through RNS and by delivery of an announcement to the Clearing Systems for communication to Direct Participants.
23 September at or around 11.00 a.m., London time	Pricing Date and Pricing Time.
26 September 2008	Settlement Date.

The above dates and times are subject to the right of the Company to extend, re-open, amend, and/or terminate the Offer and/or the Proposal.  Bondholders are advised to check with any bank, securities broker or other intermediary through which they hold Bonds whether such intermediary would require to receive instructions to participate in, or (in the limited circumstances in which revocation is permitted) revoke their instruction to participate in, the Offer or the Proposal before the deadlines specified above.  The deadlines set by each Clearing System for the submission of Tender Instructions and Ineligible Bondholder Instructions in favour of the Proposal will also be earlier than the relevant deadlines above.  

Unless stated otherwise, announcements will be made by (i) the issue of a press release to a Notifying News Service and (ii) notices delivered to the Clearing Systems for communication to Direct Participants and through RNS, and may also be found on the relevant Reuters International Insider Screen. Copies of all announcements, notices and press releases can also be obtained from the Tender Agent.

Holders of the Bonds are advised to read carefully the Tender Offer Memorandum for full details of and information on the procedures for participating in the Offer and the Proposal.  Barclays Bank PLC, HSBC Bank plc and The Royal Bank of Scotland plc are acting as Dealer Managers.  The Bank of New York Mellon is acting as Tender Agent.  

Requests for information in relation to the Offer or the Proposal should be directed to:

	Dealer Managers
Barclays Bank PLC 5 The North Colonnade Canary Wharf London E14 4BB Telephone: [phone] Attention: Liability Management Email: [e-mail]	HSBC Bank plc 8 Canada Square London E14 5HQ Telephone: [phone] Attention: Liability Management Email: [e-mail]	The Royal Bank of Scotland plc 135 Bishopsgate London EC2M 3UR Telephone: [phone] or [phone] Attention: Andrew Burton/Gianmarco Deiana Email: [e-mail]

Requests for information in relation to the procedures for tendering Bonds and participating in the Offer, and the submission of a Tender Instruction or an Ineligible Bondholder Instruction in favour of the Proposal should be directed to:

The Tender Agent

The Bank of New York Mellon One Canada Square London E14 5AL Telephone: [phone] Attention: Alex Shaw/Daniel Giles Email: [e-mail]

Copies of the Tender Offer Memorandum and the Notice are available for inspection at the Document Viewing Facility of the Financial Services Authority, 25 The North Colonnade, London E14 5HS.

DISCLAIMER This announcement must be read in conjunction with the Tender Offer Memorandum. This announcement and the Tender Offer Memorandum contains important information which should be read carefully before any decision is made with respect to the Offer or the Proposal. If you are in any doubt as to the action you should take or are unsure of the impact of the implementation of the Proposal or the Extraordinary Resolution to be proposed at the Meeting, you are recommended to seek your own financial and legal advice, including as to any tax consequences, immediately from your stockbroker, bank manager, solicitor, accountant or other independent financial or legal adviser. Any individual or company whose Bonds are held on its behalf by a broker, dealer, bank, custodian, trust company or other nominee or intermediary must contact such entity if it wishes to tender Bonds in the Offer or otherwise participate in the Proposal. None of the Dealer Managers, the Tender Agent, the Company or the Guarantors makes any recommendation as to whether Bondholders should tender Bonds in the Offer or participate in the Offer.

OFFER AND DISTRIBUTION RESTRICTIONS

Neither this announcement nor the Tender Offer Memorandum constitutes an offer to buy or a solicitation of an offer to sell the Bonds, and tenders of Bonds in the Offer will not be accepted from Bondholders, in any jurisdiction in which such offer or solicitation is unlawful. In those jurisdictions where the securities, blue sky or other laws require the Offer or the Proposal to be made by a licensed broker or dealer and a Dealer Manager or any of its affiliates is such a licensed broker or dealer in such jurisdictions, the Offer or the Proposal, as the case may be, shall be deemed to be made on behalf of the Company in such jurisdictions by that Dealer Manager or affiliate, as the case may be.

The distribution of this Tender Offer Memorandum in certain jurisdictions may be restricted by law. Persons into whose possession this Tender Offer Memorandum comes are required by the Company, the Guarantors, the Dealer Managers and the Tender Agent to inform themselves about, and to observe, any such restrictions.

United States

The Offer is not being made and will not be made, directly or indirectly, in or into, or by use of the mails of, or by any means or instrumentality (including, without limitation, facsimile transmission, telex, telephone, email and other forms of electronic transmission) of interstate or foreign commerce of, or any facility of a national securities exchange of, the United States, and the Bonds may not be tendered in the Offer by any such use, means, instrumentality or facility from or within the United States or by persons located or resident in the United States. Accordingly, copies of this announcement, the Tender Offer Memorandum and any other documents or materials relating to the Offer are not being, and must not be, directly or indirectly, mailed or otherwise transmitted, distributed or forwarded in or into the United States or to persons located or resident in the United States. Any purported tender of Bonds in the Offer resulting directly or indirectly from a violation of these restrictions will be invalid and tenders of Bonds made by a person located in the United States or any agent, fiduciary or other intermediary acting on a non-discretionary basis for a principal giving instructions from within the United States will not be accepted. For the purposes of this paragraph, United States means the United States of America, its territories and possessions, any state of the United States of America and the District of Columbia.

United Kingdom

The communication of this announcement, the Tender Offer Memorandum and any other documents or materials relating to the Offer is not being made and such documents and/or materials have not been approved by an authorised person for the purposes of section 21 of the Financial Services and Markets Act 2000. Accordingly, such documents and/or materials are not being distributed to, and must not be passed on to, the general public in the United Kingdom, and are only for circulation to persons outside the United Kingdom or to persons within the United Kingdom falling within the definition of investment professionals (as defined in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the Order)) or within Article 43(2) of the Order, or to other persons to whom it may lawfully be communicated in accordance with the Order.

Italy

The Offer is not being made in the Republic of Italy (Italy). The Offer, this announcement and the Tender Offer Memorandum have not been submitted to the clearance procedures of the Commissione Nazionale per le Società e la Borsa (CONSOB) pursuant to Italian laws and regulations. Accordingly, Bondholders are notified that, to the extent Bondholders are located or resident in Italy, the Offer is not available to them and they may not tender Bonds in the Offer and, as such, any Tender Instructions received from or on behalf of such persons shall be ineffective and void, and neither this announcement, the Tender Offer Memorandum nor any other documents or materials relating to the Offer or the Bonds may be distributed or made available in Italy.

Other

Restrictions apply in certain other jurisdictions including France and Belgium, as specified in the Tender Offer Memorandum.

 

END

 

 

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