Proposed recommended acquisition of Nortek, Inc

RNS Number : 3702D

Melrose Industries PLC

06 July 2016

 

NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN, INTO OR FROM THE UNITED STATES OF AMERICA, AUSTRALIA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION (THE "EXCLUDED TERRITORIES"). PLEASE SEE THE IMPORTANT NOTICE AT THE END OF THIS ANNOUNCEMENT. 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION REGARDING MELROSE INDUSTRIES PLC. THIS ANNOUNCEMENT IS AN ADVERTISEMENT AND DOES NOT CONSTITUTE A PROSPECTUS OR PROSPECTUS EQUIVALENT DOCUMENT AND INVESTORS SHOULD NOT SUBSCRIBE FOR OR PURCHASE ANY SECURITIES REFERRED TO IN THIS ANNOUNCEMENT EXCEPT ON THE BASIS OF THE INFORMATION CONTAINED IN AND INCORPORATED BY REFERENCE INTO THE PROSPECTUS TO BE PUBLISHED BY THE COMPANY TODAY IN CONNECTION WITH THE PROPOSED ACQUISITION AND RIGHTS ISSUE. NOTHING HEREIN SHALL CONSTITUTE AN OFFERING OF NEW MELROSE SHARES. NOTHING IN THIS ANNOUNCEMENT SHOULD BE INTERPRETED AS A TERM OR CONDITION OF THE RIGHTS ISSUE. ANY DECISION TO PURCHASE, SUBSCRIBE FOR, OTHERWISE ACQUIRE, SELL OR OTHERWISE DISPOSE OF ANY NIL PAID RIGHTS, FULLY PAID RIGHTS OR NEW MELROSE SHARES MUST BE MADE ONLY ON THE BASIS OF THE INFORMATION CONTAINED IN AND INCORPORATED BY REFERENCE INTO THE PROSPECTUS. COPIES OF THE PROSPECTUS WILL BE AVAILABLE FROM THE REGISTERED OFFICE OF MELROSE INDUSTRIES PLC AND ON ITS WEBSITE AT WWW.MELROSEPLC.NET. THE PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES IN ANY EXCLUDED TERRITORY.

6 July 2016

Melrose Industries PLC

 Proposed recommended acquisition of Nortek, Inc. and fully underwritten £1,655 million rights issue

Today the Board of Melrose Industries PLC ("Melrose" or the "Company") announces that it has reached agreement with Nortek, Inc. ("Nortek") on the terms of a recommended proposal for Melrose to acquire, for cash, the entire issued ordinary share capital of Nortek (the "Nortek Shares") ("the Acquisition").

The Acquisition will be implemented principally by way of a cash tender offer to Nortek Shareholders by MergerCo, a wholly owned subsidiary of Melrose, followed by a merger of MergerCo with and into Nortek.  The offer price of $86 per Nortek Share, net, in cash and without interest, values the entire issued share capital of Nortek at $1,436 million (£1,101 million⁽¹⁾) with an enterprise value of $2,810 million (£2,154 million⁽¹⁾). The offer price represents a premium of approximately 37.6% to the closing price of a Nortek Share on the Latest Practicable Date and approximately 81.3% to the average price of a Nortek Share in the six month period ending on the Latest Practicable Date. The Nortek Board intends to recommend that holders of Nortek Shares tender their Nortek Shares to MergerCo pursuant to the Tender Offer. In connection with the Acquisition, certain stockholders of Nortek have entered into Tender and Support Agreements which govern the conditions upon which such stockholders shall tender their Nortek Shares pursuant to the Tender Offer and obliging such stockholders to support the Tender Offer and the Merger. Such Tender and Support Agreements have been entered into by Melrose, MergerCo and each of Ares Management, Gates Capital Management and Anchorage Capital (who together own Nortek Shares amounting in aggregate to approximately 68.7% of the total share capital of Nortek as at the Latest Practicable Date).

Melrose proposes to finance the Acquisition, related expenses and the repayment of part of the existing debt of Nortek from the net proceeds of a fully underwritten rights issue of 12 New Melrose Shares at 95 pence for each 1 Existing Melrose Share, raising approximately £1,611 million (net of commissions and expenses). The balance of the debt repayment will be funded through new debt of approximately $780 million (£598 million⁽¹⁾). Melrose has recently undertaken pre-marketing meetings with a number of its institutional shareholders who Melrose believes have all been very supportive of the Acquisition.

Nortek is a leading diversified global manufacturer of innovative air management, security, home automation and ergonomic and productivity solutions. Nortek is a corporation organised under the laws of the State of Delaware. Nortek's common stock trades on the NASDAQ Global Market under the symbol "NTK". For the 12 months ended 31 December 2015, Nortek reported revenue and headline⁽²⁾ operating profit of $2,526.1 m and $220.1 m respectively, with North America representing 90% of 2015 revenue.

The Acquisition represents a significant opportunity for Melrose to continue to execute its strategy of acquiring specialised industrial businesses and maximising the value inherent in those businesses. Based on performance to date, Melrose has consistently identified attractive assets, enacted operational improvements and transacted at attractive valuation levels and points in the cycle. The Acquisition represents a significant opportunity for Melrose to execute its strategy of "buy, improve, sell".

The Melrose Board believes that, through its strong track record and experience, it can support and assist Nortek to improve Nortek's financial performance and to grow the Nortek businesses to their fullest potential. The Directors believe that the proposed Acquisition of Nortek fits well with Melrose's strategy and presents an excellent opportunity for Melrose and its shareholders, not least for the reasons listed below:

a.         Industry leading air management platform

Nortek offers an industry leading air management platform with a comprehensive set of heating, ventilation and air conditioning ("HVAC") and home appliance products, which represented 64% of Nortek's sales during 2015, serving a variety of end markets, including repair, remodelling and new construction, in both domestic and foreign markets.

b.         Growing security and ergonomic solutions business

Nortek's Security and Control ("SCS"), Ergonomic and Productivity Solutions ("ERG") and Audio, Video and Control ("AVC") segments, which together represented 36% of Nortek's sales during 2015, offer a diverse set of security and home automation, access control, residential audio visual, home integration and control, power and energy management and ergonomic mounting and mobility solutions for various end markets.

c.         Opportunities for increased investment

Melrose has identified opportunities to improve the operational quality of Nortek's businesses, including increased investment in Nortek's manufacturing facilities, product innovation, potential further complementary acquisitions, supply chain efficiencies and measures to drive market penetration.

d.         Market dynamics

Nortek is well placed to benefit from a helpful market backdrop with key US economic indicators pointing to continued momentum in construction.

e.         Diverse end market exposure and product offering, with the opportunity for improvement

The mix of Nortek's end market exposure provides for a diverse revenue stream. The current portfolio of multiple products across Nortek's six segments can benefit from improved focus on those products with opportunities for higher margins.

f.          Significant restructuring projects undertaken

With restructuring activities initiated by Nortek across each division now largely completed, Nortek is better placed to benefit from momentum in the market and to deliver significant growth in future.

g.         Further improvement available

Melrose management have identified certain further opportunities which are expected to drive improvements, including supply chain and IT systems improvements, and full utilisation of Nortek's new manufacturing facility in Mexico.

h.         Changed capital structure and costs savings

Melrose aims to reduce Nortek's cost of debt to free up significant cash flow.  In addition, Nortek incurs a large amount of costs associated with maintaining its NASDAQ listing which will be removed following the cancellation of its listing.

The Melrose Board expects that the Acquisition will be significantly accretive to headline⁽²⁾ earnings per share in the first full financial year of ownership (2017) and thereafter⁽³⁾.

Pursuant to Listing Rule 5.6.12 G (2) of the FCA, Melrose confirms that Nortek has complied with the disclosure requirements applicable on the NASDAQ Stock Market and that information disclosed pursuant to those requirements can be obtained at www.nortek.com and there are no material differences between those disclosure requirements and the disclosure requirements under the Disclosure Requirements and Transparency Rules of the FCA.

Due to its size, the Acquisition is a reverse takeover and constitutes a class 1 transaction for Melrose under the Listing Rules. As such, Melrose is seeking the approval of Melrose Shareholders for the Acquisition. Melrose Shareholders will also be asked to approve the allotment of New Melrose Shares to be issued pursuant to the Rights Issue and to grant certain authorities with respect to the Enlarged Share Capital following the completion of the Rights Issue.

As the Acquisition constitutes a reverse takeover under the Listing Rules, upon Completion, the listing of Melrose Shares on the premium segment of the Official List will be cancelled. The Melrose Shares will not be eligible for re-admission to the premium segment of the Official List, as the latest balance sheet date for which audited consolidated historical financial information for Nortek can be provided is more than six months prior to the date of the Prospectus. Therefore, further application will be made to the UKLA for the Melrose Shares to be re-admitted to the standard segment of the Official List. Should Completion not occur, subject to shareholder approval and in compliance with UKLA requirements, the listing of the Melrose Shares will nevertheless be transferred from the premium segment to the standard segment of the Official List. Following Re-admission with, or transfer to, a Standard Listing, the Directors intend to seek a Premium Listing for Melrose as soon as reasonably practicable, subject to meeting the eligibility criteria contained in Chapter 6 of the Listing Rules.

Melrose is seeking the approval of Melrose Shareholders for the cancellation of the listing of the Melrose Shares on the premium segment of the Official List and the re-admission or transfer of the Melrose Shares to the standard segment of the Official List and to trading on the London Stock Exchange's main market for listed securities.

Accordingly, the Melrose General Meeting has been convened at the offices of Investec Bank plc, 2 Gresham Street, London EC2V 7QP at 11.00 a.m. on 25 July 2016.

The Rights Issue is not conditional upon Completion of the Acquisition. In the unlikely event that the Rights Issue proceeds but Completion does not take place, the Board of Melrose currently intends to invest the net proceeds of the Rights Issue on a short-term basis while the Board of Melrose evaluates other acquisition opportunities and, if no acquisitions can be found on acceptable terms, the Board of Melrose will consider how best to return surplus capital to Melrose Shareholders in a timely manner. Such return could carry fiscal costs for certain Melrose Shareholders, will have costs for Melrose and would be subject to applicable securities laws.

The Merger Agreement provides that, should Nortek, after the date of the Merger Agreement but on or prior to the Window Shop Deadline (being 11.59 p.m. (New York time) on 6 August 2016), receive a Superior Proposal (being unsolicited and bona fide and in compliance with a non-solicit covenant) then, subject to, among other things, the ability of Melrose to match and amend its offer and the payment of a fee of $50.0 million by Nortek, Nortek may terminate the Merger Agreement. In order to minimise the risk of Melrose raising funds pursuant to the Rights Issue but the Acquisition not completing, the Provisional Allotment Letters will only be despatched to Qualifying Non-CREST Shareholders, the Nil Paid Rights will only be credited to the CREST stock accounts of Qualifying CREST Shareholders and Admission will only occur following the expiry of the Window Shop Deadline without the acceptance by Nortek of a Superior Proposal.

Copies of the Prospectus and Circular will be made available on Melrose's website, www.melroseplc.net, and will be submitted to the National Storage Mechanism, where it will be available for inspection at www.hemscott.com/nsm.do.

The Board's expectations for Melrose's full year performance remain unchanged from that detailed in the Company's trading statement on 11 May 2016.

Melrose's Chief Executive, Simon Peckham, said:

"Nortek is a high quality manufacturing business with over 90% of its turnover in North America and product penetration into 80% of US households. It serves attractive end markets at good points in their cycle, with strong brands and market positions. Nonetheless there remains solid potential for further improvement under Melrose's guidance. Our ability to apply our industrial experience and investment expertise, as well as to liberate Nortek from its current capital structure will transform the prospects of the business. Our team is excited about getting to work to achieve these results as soon as possible. "

Melrose's Chairman, Christopher Miller, added:

"This represents the next chapter in the Melrose story. Since formation we have created and returned over £2.8 billion of value to our shareholders and we believe that Nortek presents an excellent opportunity to build substantially on that track record. As a UK-listed business we are gratified by the vote of confidence - from our shareholders and lending institutions - in assembling the equity and debt package within such a short period of time. I have no doubt that we will be able to justify their confidence as we help reinvigorate this fine business."

The preceding summary should be read in conjunction with the full text of the following announcement and its appendices.

Indicative abridged timetable⁽⁴⁾:

	Time and Date
Announcement of the Acquisition and Rights Issue.....................................	6 July 2016
Publication of the Prospectus and posting of the Circular, the Notice of General Meeting and the Form of Proxy.....................................................	6 July 2016
Tender Offer commences in the US/ Tender Offer Document is filed with the SEC........................................................................................................	By no later than 11 July 2016
Nortek to file Recommendation Statement on Schedule 14D-9, in which the Nortek Board recommends acceptance of the Tender Offer..........................	By no later than 11 July 2016
Latest time and date for receipt of the Form of Proxy...................................	11.00 a.m. on 21 July 2016
Melrose General Meeting......................................................................	11.00 a.m. on 25 July 2016
Rights Issue Record Date.........................................................................	Close of business on 4 August 2016
Window Shop Deadline.............................................................................	11.59 p.m. (New York time) on 6 August 2016
Despatch of Provisional Allotment Letters (to Qualifying Non-CREST Shareholders only)...................................................................................	8 August 2016
Existing Melrose Shares marked "ex" by the London Stock Exchange..........	8.00 a.m. 9 August 2016
Admission of, and dealings (for normal settlement) commence in, New Melrose Shares, nil paid, on the London Stock Exchange....................	8.00 a.m. 9 August 2016
Nil Paid Rights credited to stock accounts in CREST (Qualifying CREST Shareholders only) ..................................................................................	As soon as practicable after 8.00 a.m. 9 August 2016
Latest time and date for acceptance, payment in full and registration of renunciation of Provisional Allotment Letters....................................	11.00 a.m. on 23 August 2016
Results of Rights Issue to be announced....................................................	By 8.00 a.m. on 24 August 2016
Dealings in New Melrose Shares, fully paid, commence on the London Stock Exchange.....................................................................................	8.00 a.m. on 24 August 2016
Tender Offer Expiration Date......................................................................	2.00 a.m. (New York time) on 31 August 2016
Announcement of the Tender Offer results and acceptance of the Nortek Shares tendered in the Tender Offer...........................................................	Promptly after the Tender Offer Expiration Date
Effective time of the Merger / Completion of Acquisition.......................	As soon as practicable after 2.00 a.m. (New York time) on 31 August 2016
Cancellation of the listing of the Melrose Shares.........................................	Immediately prior to 8.00 a.m. on 31 August 2016
Re-admission of Melrose Shares (at such time comprising the Existing Melrose Shares and the New Melrose Shares)......................................	8.00 a.m. on 31 August 2016

Enquiries:

Nomura International PLC
(Lead Financial Adviser)
Marc Potel / Mark Milano	[phone]
James Frawley / Andrew Horn	[phone]
Investec Bank plc
(Joint Global Co-ordinator, Joint Sponsor, Joint Underwriter and Joint Bookrunner)	[phone]
Keith Anderson / Carlton Nelson / Christopher Baird / Daniel Adams
J.P. Morgan Cazenove
(Financial Adviser, Joint Global Co-ordinator, Joint Sponsor, Joint Underwriter and Joint Bookrunner)	[phone]
John Mayne / Nicholas Hall / Alex Watkins
BofA Merrill Lynch
(Financial Adviser, Joint Underwriter and Joint Bookrunner)	[phone]
Peter Pashigian / Simon Mackenzie Smith / James Fleming
Evercore International Partners LLP	[phone]
(Adviser to the Rights Issue)
Jim Renwick
Montfort Communications	[phone]
(PR Adviser to Melrose)
Nick Miles Charlotte McMullen	[phone] [phone]

(1) Converted into pounds sterling at the exchange rate as at the Latest Practicable Date, being $1:£0.77.

(2) Before exceptional operating costs, exceptional operating income and intangible asset amortisation.

(3) Nothing in this announcement is intended to be, or is to be construed as, a profit forecast or to be interpreted to mean that earnings per Melrose Share for the current or future financial years, or those of the Enlarged Group, will necessarily match or exceed the historical earnings per Melrose Share.

(4) The times and dates set out in the expected timetable of principal events above and mentioned throughout this Announcement may be adjusted by Melrose and/or MergerCo in consultation with the Joint Bookrunners in which event details of the new times and dates will be notified to the UKLA, the London Stock Exchange and, where appropriate, Qualifying Shareholders. Except where otherwise indicated, references to a time of day are to London time.

IMPORTANT NOTICE:

The defined terms set out in Appendix II to this announcement apply to this announcement.

This announcement has been issued by, and is the sole responsibility of, Melrose Industries PLC.

Apart from the responsibilities and liabilities, if any, which may be imposed on Investec Bank plc, J.P. Morgan Securities plc or J.P. Morgan Limited under FSMA or the regulatory regime established thereunder: (i) none of Investec Bank plc, J.P. Morgan Securities plc, J.P. Morgan Limited, Merrill Lynch International, Nomura International plc or Evercore Partners International LLP accepts any responsibility whatsoever and makes no warranty, express or implied, in relation to the contents of this document, including its accuracy, completeness or verification or for any other statement made or purported to be made by it, or on its behalf, in connection with Melrose, Nortek, the Nil Paid Rights, the Fully Paid Rights, the Melrose Shares, the Acquisition or the Rights Issue; and (ii) each of Investec Bank plc, J.P Morgan Securities plc, J.P. Morgan Limited, Merrill Lynch International, Nomura International plc and Evercore Partners International LLP accordingly disclaims, to the fullest extent permitted by law, all and any liability whether arising in tort, contract or otherwise (save as referred to above) which it might otherwise have in respect of this document or any such statement.

This announcement is not for release, publication or distribution, in whole or in part, directly or indirectly, in, into or from the United States, Australia, Japan or South Africa or any other jurisdiction where to do so would constitute a violation of the relevant securities laws. This announcement does not, and is not intended to, constitute an offer to sell or issue or the solicitation of an offer to buy or acquire securities in the United States or any other jurisdiction where to do so would constitute a violation of the relevant securities laws. The circular and the prospectus to be made available on Melrose's website will not be accessible by investors located in, or resident of the United States.

This announcement is for information purposes only and shall not constitute an offer to buy, sell, issue or subscribe for, or the solicitation of an offer to buy, sell, issue, or subscribe for, any securities in Melrose Industries PLC or any other entity. Any such offer will be made solely by means of the prospectus that will be published today and any supplement or amendment thereto and any acquisition of securities in Melrose Industries PLC should be made solely on the basis of the information contained in such prospectus. The prospectus will not constitute an offer to sell or a solicitation of an offer to buy any securities in the United States.

This announcement is for information purposes only and is not an offer to buy or the solicitation of an offer to sell any Nortek Shares.  The tender offer described herein has not yet been commenced.  On the commencement date of the tender offer, an offer to purchase, letters of transmittal and related documents will be filed with the United States Securities and Exchange Commission (SEC).  The solicitation of offers to buy Nortek Shares will only be made pursuant to the offer to purchase, the letters of transmittal and related documents. Nortek securityholders are strongly advised to read both the tender offer statement and the solicitation/recommendation statement that will be filed by Nortek regarding the tender offer when they become available as they will contain important information.  Nortek securityholders may obtain free copies of these statements (when available) and other documents filed with respect to the tender offer at the SEC's website at www.sec.gov.  In addition, copies of the tender offer statement and related materials (when available) may be obtained for free by directing such requests to the information agent for the tender offer.  The solicitation/recommendation statement and related documents (when available) may be obtained by directing such requests to Nortek.

No statement in this announcement is or is intended to be a profit forecast or to imply that the earnings of Melrose or Nortek for the current or future financial years will necessarily match or exceed the historical or published earnings of Melrose or Nortek.

The Nil Paid Rights, the Fully Paid Rights, the New Melrose Shares, the Provisional Allotment Letters and the Melrose Shares have not been, and will not be, registered under the U.S. Securities Act of 1933 (the "Securities Act"), as amended or under the securities laws of any state, or other jurisdiction of the United States and may not be offered, sold or transferred, directly or indirectly, within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and the securities laws of any state or other jurisdiction of the United States. This announcement does not constitute an offer to sell or issue or the solicitation of an offer to buy or acquire, nor shall there be any sale of, the Nil Paid Rights, the Fully Paid Rights, the New Melrose Shares, the Provisional Allotment Letters and the Melrose Shares in any jurisdiction in which such offer, solicitation or sale would be unlawful. The Nil Paid Rights, the Fully Paid Rights, the New Melrose Shares, the Provisional Allotment Letters and the Melrose Shares have not been, and will not be, registered with any regulatory authority of any state within the United States. No money, securities or other consideration is being solicited and, if sent in response to the information herein, will not be accepted. There will be no public offer of any securities of the Company in the United States.

The distribution of this announcement in jurisdictions other than the United Kingdom may be affected by the laws of relevant jurisdictions. Therefore any persons who are subject to the laws of any jurisdiction other than the United Kingdom will need to inform themselves about, and observe any, applicable requirements. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

This announcement is not, and under no circumstances is it to be construed as, a prospectus, offering memorandum, advertisement or public offering of the securities described herein in Canada. Any person in Canada considering a potential investment in respect of the securities described herein should refer only to the final version of the prospectus prepared in connection with the Rights Issue and, where applicable, to the Canadian offering memorandum incorporating such prospectus. The information contained herein is qualified in its entirety by the information contained in such prospectus and Canadian offering memorandum. This announcement does not contain all information that may be required to evaluate an investment in respect of the securities described herein.

No securities commission or similar regulatory authority in Canada has reviewed or in any way passed upon the prospectus prepared in connection with the Rights Issue or the merits of the securities described herein and any representation to the contrary is an offence in Canada. The issuance of the Provisional Allotment Letters, Nil Paid Rights, Fully Paid Rights or New Melrose Shares to Canadian shareholders pursuant to the Rights Issue will be exempt from the requirement that Melrose prepare and file a prospectus with the relevant Canadian regulatory authorities pursuant to sections 2.1.2 and 2.42(1)(a) of National Instrument 45-106-Prospectus Exemptions. Accordingly, any resale of such securities must be made in accordance with applicable Canadian securities laws which may require resales to be made pursuant to exemptions from prospectus requirements. These resale restrictions may in some circumstances apply to resales of such securities outside of Canada.

Subject to certain limited exceptions, no offering or sale of New Melrose Shares not taken up in the Rights Issue (including in connection with any sub-underwriting arrangement) may be made to or for the benefit of persons resident in Canada, and this announcement and any offering material relating to the New Melrose Shares may not be distributed, forwarded or transmitted to or for the benefit of persons resident in Canada in connection with the offering or sale of New Melrose Shares not taken up in the Rights Issue (including in connection with any sub-underwriting arrangement).

Each of Investec Bank plc, J.P. Morgan Securities plc, Merrill Lynch International and Nomura International PLC, each of which is authorised by the PRA and regulated by the FCA and the PRA, and J.P. Morgan Limited and Evercore Partners International LLP each of which is authorised and regulated by the FCA (together with Investec Bank plc, J.P. Morgan Securities plc, Merrill Lynch International and Nomura International PLC, the "Representatives") are acting exclusively for Melrose Industries PLC and no-one else in connection with the matters set out in this announcement and the proposed Acquisition and Rights Issue. The Representatives will not regard any other person as their respective clients in relation to the proposed Acquisition and Rights Issue and are not, and will not be, responsible to anyone other than Melrose Industries PLC for providing the protections afforded to their respective clients or for providing advice in relation to the proposed Acquisition and Rights Issue, the contents of this announcement or any transaction, arrangement or other matter referred to in this announcement. Apart from the responsibilities and liabilities, if any, which may be imposed on each of them by the Financial Services and Markets Act 2000, none of the Representatives accepts any responsibility whatsoever or makes any representation or warranty, express or implied, for the contents of this announcement including its accuracy, completeness or verification, or for any other statement made or purported to be made by it, or on its behalf, in connection with Melrose Industries PLC, Nortek, the proposed Acquisition or the Rights Issue (including the Nil Paid Rights, Fully Paid Rights and Melrose Shares), and nothing in this announcement is, or shall be relied upon as, a promise or representation in this respect, whether as to the past or the future. Each of the Representatives accordingly disclaims to the fullest extent permitted by law all and any responsibility and liability whether arising in tort, contract or otherwise (save as referred to above) which it might otherwise have in respect of this announcement or any such statement.

This announcement has been prepared in accordance with English law, the Listing Rules and the Disclosure Requirements and Transparency Rules and information disclosed may not be the same as that which would have been prepared in accordance with the laws of jurisdictions outside England.

Neither the content of the Company's website (or any other website) nor the content of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.

This announcement contains (or may contain) certain statements that are, or may deemed to be, forward-looking statements with respect to certain of Melrose's current expectations and projections about future events. These statements, which sometimes use words such as "anticipate", "believe", "intend", "estimate", "expect", "will", "shall", "may", "aim", "predict", "should", "continue", "plan", "project" and words of similar meaning and/or other similar expressions including their negative variations or comparable terminology that are predictions of or indicate future events and/or future trends, reflect the directors' beliefs and expectations at the date of this announcement and involve a number of risks, uncertainties and assumptions that could cause actual results and performance to differ materially from any expected future results or performance expressed or implied by the forward-looking statement.

Statements contained in this announcement regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. The information contained in this announcement is subject to change without notice and, except as required by applicable law, neither Melrose nor any of the Representatives or their respective affiliates assumes any responsibility, obligation or undertaking to update, review or revise any of the forward-looking statements contained herein whether as a result of new information, future developments or otherwise. You should not place undue reliance on forward-looking statements, which speak only as of the date of this announcement.

Additional Information regarding the Acquisition and Rights Issue

Melrose Industries Plc

 Proposed recommended acquisition of Nortek, Inc. and fully underwritten £1,655 million Rights Issue

1. Introduction

Today the Boards of Melrose and Nortek announced that they had reached agreement on the terms of a recommended proposal for Melrose to acquire, for cash, the entire issued ordinary share capital of Nortek. The Acquisition will be implemented principally by way of a cash tender offer at a price of $86 per Nortek Share, which values the entire issued share capital of Nortek at $1,436 million (£1,101 million⁽¹⁾), with an enterprise value of $2,810 million (£2,154 million⁽¹⁾).

Nortek is a leading diversified global manufacturer of innovative air management, security, home automation and ergonomic and productivity solutions. Nortek is a corporation organised under the laws of the State of Delaware and its common stock trades on the NASDAQ Global Market under the symbol ''NTK''. The Acquisition represents a significant opportunity for Melrose to execute its strategy of acquiring specialised industrial businesses and maximising the value inherent in those businesses. Subject to the satisfaction or, where appropriate, waiver of the conditions to the Acquisition, it is expected that Completion will occur in late August 2016.

If Completion occurs, the Acquisition, related expenses and the repayment of part of the existing debt of the Nortek Group will be funded by the Rights Issue proceeds (net of commissions and expenses) (approximately £1,611 million ($2,102 million⁽¹⁾). The balance of the debt repayment will be funded through new debt of approximately $780 million (£598 million⁽¹⁾) from the proceeds of loans pursuant to the New Facilities Agreement, which has been entered into with the Company's banks, and which will replace the Company's Existing Facility.

Due to its size, the Acquisition is a reverse takeover and constitutes a class 1 transaction for Melrose under the Listing Rules. As such, Melrose is seeking the approval of Melrose Shareholders for the Acquisition. Melrose Shareholders will also be asked to approve the allotment of New Melrose Shares to be issued pursuant to the Rights Issue and to grant certain authorities with respect to the Enlarged Share Capital following the completion of the Rights Issue.

As the Acquisition constitutes a reverse takeover under the Listing Rules, upon Completion, the listing of Melrose Shares on the premium segment of the Official List will be cancelled. The Melrose Shares will not be eligible for re-admission to the premium segment of the Official List, as the latest balance sheet date for which audited consolidated historical financial information for Nortek can be provided is more than six months prior to the date of the Prospectus, contrary to the Premium Listing requirements in Chapter 6 of the Listing Rules. Consequently, further applications will be made to the UKLA for the Melrose Shares (which at such time will comprise both the Existing and the New Melrose Shares) to be re-admitted to the standard segment of the Official List and to the London Stock Exchange for the re-admission of the Melrose Shares to trading on its main market. It is currently expected that Re-admission will become effective post Completion at 8.00 a.m. on 31 August 2016 (and in any case no earlier than 20 Business Days from the date of the General Meeting) (whereupon an announcement will be made by the Company to a Regulatory Information Service).

Should Completion not occur, subject to the passing of resolution 4 set out in the Notice of General Meeting (which is included in within the Circular and will shortly be posted to Melrose Shareholders), the listing of the Melrose Shares will nevertheless be transferred from the premium segment to the standard segment of the Official List on 10 October 2016, whereupon an announcement will be made by the Company to a Regulatory Information Service.

Melrose is seeking the approval of Melrose Shareholders for the cancellation of the listing of the Melrose Shares on the premium segment of the Official List and the re-admission or transfer of the Melrose Shares to the standard segment of the Official List and to trading on the London Stock Exchange's main market for listed securities.

Accordingly, the Melrose General Meeting has been convened at the offices of Investec Bank plc, 2 Gresham Street, London EC2V 7QP at 11.00 a.m. on 25 July 2016.

The Melrose Board considers that the Resolutions to be proposed at the Melrose General Meeting are in the best interests of Melrose Shareholders as a whole, and therefore unanimously recommends that Melrose Shareholders vote in favour of the Resolutions, as the Melrose Directors intend to do in respect of their own holdings of Melrose Shares.

The Melrose Board is fully supportive of the Rights Issue. Each of the Melrose Directors who holds Existing Melrose Shares intends, after Admission, to take up his or her entitlement to New Melrose Shares in full or in part. In addition, certain of the Melrose Directors intend to acquire further rights to New Melrose Shares, during the course of the Rights Issue. As a result of the take up in full or in part, together with any further acquisitions, it is expected that the executive Directors of Melrose will invest approximately £17 million in aggregate, equal to approximately 1.0% of the estimated gross Rights Issue proceeds.

2. Summary of the key terms of the Acquisition

On 6 July 2016, Melrose, MergerCo and Nortek entered into an agreement and plan of merger (the ''Merger Agreement''), which sets out terms and conditions for a cash tender offer (the ''Tender Offer'') to purchase all of the Nortek Shares at the Tender Offer Price of $86 per Nortek Share, net, in cash and without interest, by MergerCo, followed by a merger of MergerCo with and into Nortek (the ''Merger'', and the Tender Offer and the Merger, together, being the ''Acquisition'').

Furthermore, Melrose has received undertakings to tender (and not withdraw) Nortek Shares pursuant to the Tender Offer from Ares Management, Gates Capital Management and Anchorage Capital (amounting in aggregate to approximately 68.7% of the total share capital of Nortek as at the Latest Practicable Date), subject to the Merger Agreement not being terminated in accordance with its terms.

The Tender Offer Price represents a premium of approximately 37.6% to the closing price of a Nortek Share on the Latest Practicable Date and approximately 81.3% to the average price of a Nortek Share in the six month period ending on the Latest Practicable Date, and values the entire issued share capital at approximately $1,436 million (£1,101 million⁽¹⁾). The enterprise value of $2,810 million (£2,154 million⁽¹⁾) is 10.0x historic EBITDA⁽²⁾.

The completion of the Tender Offer is subject to the satisfaction (or waiver, where applicable) of a number of conditions, including the approval of the Acquisition and the Rights Issue by Melrose Shareholders, Admission having occurred, the receipt of the Anti-trust Clearance, or the expiry or termination of the applicable waiting period, under the HSR Act in the US, there being no material adverse change which occurs and is continuing in respect of Nortek and there having been validly tendered (and not properly withdrawn) prior to the Tender Offer Expiration Date such number of Nortek Shares that represents more than 50% of the total share capital of Nortek as at the Tender Offer Expiration Date.

Further, the Merger Agreement provides that, should Nortek, after the date of the Merger Agreement but on or prior to the Window Shop Deadline, receive a Superior Proposal (being unsolicited and bona fide and in compliance with a non-solicit covenant), then, subject to, among other things, the ability of Melrose to amend its offer and the payment of a fee of $50.0 million by Nortek, Nortek may terminate the Merger Agreement.

Following the consummation of the Tender Offer, MergerCo shall, pursuant to the Merger Agreement and as soon as possible following the consummation of the Tender Offer, merge with and into Nortek, with Nortek surviving the Merger as an indirect wholly-owned subsidiary of Melrose. Pursuant to the Merger, each outstanding Nortek Share in issue immediately prior to Completion and not accepted for payment as part of the Tender Offer will be converted into a right to receive the Tender Offer Price, without interest, subject to certain exceptions discussed further in the Circular.

Upon Completion of the Tender Offer and the Merger, Melrose will, indirectly, hold all equity interests in Nortek.

3. Background to and reasons for the Acquisition

Melrose

Melrose is engaged in a ''buy, improve, sell'' business model to create value for its shareholders. The Company's focus is to acquire high quality industrial manufacturing businesses with strong fundamentals whose performance can benefit from a change in circumstances. The strategy is based on supporting and incentivising management teams to transform and grow their businesses without the burden of quarterly reporting or restrictive financing covenants, achieving above market profit growth and increased operating margins. Through a combination of overhead reduction and gross margin expansion, achieved through targeted investment in portfolio businesses, Melrose has been able to increase headline⁽³⁾ operating margins by five to nine percentage points in all historical investments. Melrose employs low levels of leverage but invests heavily in its businesses. On average, Melrose invests a further third of the original equity purchase price in its businesses post-acquisition.

Based on performance to date, Melrose has consistently identified attractive assets, enacted operational improvements and transacted at attractive valuation levels and points in the cycle.

Nortek

The Melrose Board believes that, through its strong track record and experience, it can support and assist Nortek to improve Nortek's financial performance and to grow the Nortek businesses to their fullest potential. The Directors believe that the proposed acquisition of Nortek fits well with Melrose's strategy and presents an excellent opportunity for Melrose and its shareholders, not least for the reasons listed below:

a.   Industry leading air management platform

Nortek offers an industry leading air management platform (which is comprised of Nortek's Air Quality and Home Solutions (''AQH''), Residential and Commercial Heating, Ventilation and Air Conditioning (''RCH'') and Custom and Commercial Air Solutions (''CAS'') segments and which together represented 64% of Nortek's sales during 2015) with a comprehensive set of heating, ventilation and air conditioning (''HVAC'') and home appliance products. The platform includes the largest US supplier of residential range hoods and bath fans, the leading US manufacturer of custom air handling solutions, the leading US manufacturer of commercial unit heaters and manufactured housing HVAC⁽⁴⁾ and also focuses on innovative new products to drive future growth with further potential available, including developing the CAS aftermarket business and the seizing of opportunities in relation to clean air initiatives in China. It serves a variety of end markets, including repair, remodelling and new construction, in both domestic and foreign markets.

b.   Growing security and ergonomic solutions businesses

Nortek's Security and Control (''SCS''), Ergonomic and Productivity Solutions (''ERG'') and Audio, Video and Control (''AVC'') segments, which together represented 36% of Nortek's sales during 2015, offer a diverse set of security and home automation, access control, residential audio visual, home integration and control, power and energy management and ergonomic mounting and mobility solutions for various end markets. The SCS segment contains the third largest US supplier⁽⁴⁾ of residential security hardware and has potential for further development through partnerships with home service providers. The AVC segment is a major supplier of audio, visual and control solutions. With only 2% of the ergonomic market currently penetrated⁽⁴⁾, the ERG segment is well placed to drive growth, through its acquisition of Anthro and higher volume demand for ergonomic products in offices, schools and healthcare facilities.

c.   Opportunities for increased investment

Melrose has identified opportunities to improve the operational quality of Nortek's businesses, including increased investment in Nortek's manufacturing facilities, product innovation, potential further complementary acquisitions, supply chain efficiencies and measures to drive market penetration.

d.   Market dynamics

Nortek is well placed to benefit from a helpful market backdrop with key US economic indicators pointing to continued momentum in construction. Approximately 49% of Nortek's sales during 2015 were in the residential repairs and remodelling sector, which, in the first quarter of 2016 marked its 12th consecutive quarter of growth in the US, according to the National Association of Home Builders (''NAHB'') Remodelling Market Index. According to the NAHB housing forecast released on 31 May 2016, new housing starts in the US (being the number of privately-owned new houses on which construction is commenced in a given period and a sector accounting for 12% of Nortek's sales during 2015) are projected to increase to 1.2 million units in 2016 and 1.3 million units in 2017, representing year-on-year increases of 7% and 11%, respectively.

e.   Diverse end market exposure and product offering, with the opportunity for improvement

The mix of Nortek's end market exposure provides for a diverse revenue stream. Nortek operates a wide range of business segments, including residential and commercial HVAC, home security and automation, display mounting and mobility products, which service a variety of end users across geographies and end markets. Nortek's product and regional diversities mitigate some of the uncertainty around the timing and potential cyclical dynamics in any one region or sector. Notwithstanding this, the current portfolio of multiple products across Nortek's six segments can benefit from improved focus on those products with opportunities for higher margins.

f.    Significant restructuring projects undertaken

Nortek is well positioned for growth. With restructuring activities initiated by Nortek across each division now largely completed, Nortek is better placed to benefit from momentum in the market and to deliver significant growth in the future. As a result of these restructuring activities, Nortek estimated savings of between $48 million and $60 million which were substantially achieved by the end of 2015.

g.   Further improvement available

During the course of due diligence, Melrose management has also identified certain further opportunities which are expected to drive improvements, including with respect to the efficiency of Nortek's supply chain and IT systems, and full utilisation of Nortek's new manufacturing facility in Mexico. Site visits to selected manufacturing facilities have highlighted potential scope for further improvements in quality of operations for Nortek's businesses through targeted investment and there have been discussions with Nortek management in relation to their pipeline of further complementary acquisitions and measures to drive market penetration.

h.   Changed capital structure and costs savings

Nortek's capital spend is currently constrained by its high levels of debt. Once part of the Enlarged Group, Melrose aims to reduce Nortek's current leverage⁽⁵⁾ from 5.1x (as at 31 December 2015) to approximately 2.5x⁽⁶⁾ following Completion and cost of debt from over 7% per annum in 2015 to less than 3% per annum, freeing up significant cash flow. In addition, as a NASDAQ-listed company, Nortek incurs a large amount of central and compliance costs associated with maintaining its listing. Between 2012 and 2015, Nortek's central costs rose by 23%, with selling and administrative costs higher than comparable businesses. It is expected that the lower costs resulting from a review of Nortek's current spending (including in areas such as IT, where Nortek currently spends approximately £25 million per annum) and the cancellation of Nortek's listing and lower levels of debt will facilitate investment in Nortek's growth and operations.

4. Financing the Acquisition

If Completion occurs, the Rights Issue proceeds (net of commissions and expenses) (approximately £1,611 million ($2,102 million⁽¹⁾) will be applied to fund the Acquisition, related expenses and to repay part of the existing debt of the Nortek Group. The balance of the debt repayment will be funded through new debt of approximately $780 million (£598 million⁽¹⁾) from the proceeds of loans pursuant to the New Facilities Agreement, which has been entered into with the Company's banks, and which will replace the Company's Existing Facility.

The revolving credit facility under the New Facilities Agreement will be used by the Enlarged Group to: (i) pay any other costs and expenses in connection with the Acquisition, the Rights Issue or entry into the New Facilities Agreement; and (ii) to finance the Enlarged Group's working capital requirements and for general corporate purposes (including refinancing existing indebtedness, whether under the Existing Facility Agreement or otherwise).

Melrose has always looked to maintain a prudent level of gearing (calculated as net debt divided by headline⁽³⁾ operating profit before depreciation and amortisation) in order to provide it with the flexibility to invest in its businesses. Therefore, to fund the Acquisition and the associated expenses and to repay the existing debt of the Nortek Group, Melrose intends to raise new equity, in addition to new debt. The Melrose Board, taking into account, among other things, the size of the fundraising relative to the current market capitalisation of Melrose and to maintain pre-emption rights of Melrose Shareholders, believes the most appropriate method to do this is by way of a rights issue.

Principal Terms of the Rights Issue

Melrose proposes to raise approximately £1,611 million (net of commissions and expenses) by way of a fully underwritten Rights Issue of up to 1,741,612,236 New Melrose Shares. The Rights Issue Price of 95 pence per New Melrose Share, which is payable in full on acceptance by not later than 11.00 a.m. on 23 August 2016, represents a 76.8% discount to the Closing Price of 410 pence per Existing Melrose Share on the Latest Practicable Date and a 20.3% discount to the theoretical ex-rights price of 119 pence per New Melrose Share calculated by reference to the Closing Price on the same day. If a Qualifying Shareholder does not take up any of their entitlement to New Melrose Shares, their proportionate shareholding will be diluted by up to 92.3%. However, if a Qualifying Shareholder takes up their entitlement to New Melrose Shares in full, they will, after the Rights Issue has been completed and excluding any fraction of an Ordinary Share, as nearly as practicable, have the same proportionate voting rights and entitlements to dividends as they had on the Record Date.

If a Qualifying Shareholder does not subscribe for the New Melrose Shares to which they are entitled, such Qualifying Shareholder can instead sell their rights to those New Melrose Shares and receive the net proceeds in cash. This is referred to as dealing in the rights ''nil paid'' and, subject to the fulfilment of certain conditions, dealings (for normal settlement) on the London Stock Exchange in the Nil Paid Rights are expected to commence at 8.00 a.m. on 9 August 2016. If a Qualifying Shareholder does not wish to take up their rights, they do not have to take any action and the Underwriters will use all reasonable endeavours to find investors to take up those rights by 5.00 p.m. on the second dealing day after the last date for acceptance of the Rights Issue. If the Underwriters find investors and are able to achieve a premium over the Rights Issue Price and the related expenses of procuring those investors (including any applicable brokerage and commissions and amounts in respect of VAT which, in the reasonable opinion of the Underwriters, are not recoverable), such Qualifying Shareholder will be sent a cheque for the amount of that aggregate premium above the Rights Issue Price less such related expenses, so long as the amount in question is at least £5.00. Where such aggregate premium less such related expenses is less than £5.00, such amounts will be aggregated and it is intended that such amounts shall be donated by Melrose to charities chosen by the Board.

Subject to the fulfilment of, amongst others, the conditions set out below, the Company proposes to offer, by way of the Prospectus (and, in the case of Qualifying Non-CREST Shareholders, the Provisional Allotment Letter), New Melrose Shares pursuant to the Rights Issue to Qualifying Shareholders on the following basis:

12 New Melrose Shares at 95 pence each for every 1 Existing Melrose Share

held by Qualifying Shareholders on the Record Date. Holdings of Existing Melrose Shares in certificated and uncertificated form will be treated as separate holdings for the purpose of calculating entitlements under the Rights Issue. Fractional entitlements to New Melrose Shares will not be allotted and, where necessary, entitlements will be rounded down to the nearest whole number of New Melrose Shares.

The New Melrose Shares will, when issued and fully paid, rank pari passu in all respects with the Existing Melrose Shares, including the right to receive in full all dividends and other distributions declared, made or paid by reference to a record date after the date of their issue. Melrose Shares, including the New Melrose Shares, may be held in certificated or uncertificated form.

The Rights Issue is conditional upon, amongst other things:

•     the passing without amendment (or with such amendment as the Joint Bookrunners and the Company may agree in writing) of the Transaction Resolutions at the Melrose General Meeting (or at such later time and date as the Joint Bookrunners and the Company may agree in writing);

•     the Underwriting Agreement having become unconditional in all respects (save for the condition relating to Admission) and not having been terminated in accordance with its terms; and

•     Admission having occurred by not later than 8.00 a.m. on 9 August 2016 (or such later time and date as may be agreed between the Joint Bookrunners and the Company in writing).

In order to minimise the risk of Melrose raising funds pursuant to the Rights Issue but the Acquisition not completing, the Provisional Allotment Letters will only be despatched to Qualifying Non-CREST Shareholders, the Nil Paid Rights will only be credited to the CREST stock accounts of Qualifying CREST Shareholders and Admission will only occur following the expiry of the Window Shop Deadline on 6 August 2016, without the acceptance by Nortek of a Superior Proposal. As such, it is expected that: (a) the Provisional Allotment Letters will be despatched to Qualifying Non-CREST Shareholders (other than those having an address in the United States or any Excluded Territory) on 8 August 2016; and (b) the CREST stock accounts of Qualifying CREST Shareholders (other than those having an address in the United States or any Excluded Territory) will be credited with the relevant entitlement to Nil Paid Rights as soon as practicable after 8.00 a.m. on 9 August 2016.

The Rights Issue is not conditional upon Completion or on drawdown pursuant to the New Facilities Agreement.

If Completion occurs, the Acquisition, related expenses and the repayment of part of the existing debt of the Nortek Group will be funded by the Rights Issue proceeds (net of commissions and expenses) (approximately £1,611 million ($2,102 million⁽¹⁾). The balance of the debt repayment will be funded through new debt of approximately $780 million (£598 million⁽¹⁾) from the proceeds of loans pursuant to the New Facilities Agreement, which has been entered into with the Company's relationship banks, and which will replace the Company's Existing Facility.

In the unlikely event that the Rights Issue proceeds but the Acquisition does not complete, the Melrose Directors' current intention is that the net proceeds of the Rights Issue will be invested on a short-term basis while the Melrose Directors evaluate other acquisition opportunities and, if no acquisitions can be found on acceptable terms, the Melrose Directors will consider how best to return surplus capital to Melrose Shareholders in a timely manner. Such a return could carry fiscal costs for certain Melrose Shareholders, will have costs for Melrose and would be subject to applicable securities laws.

Applications will be made to the UKLA for the New Melrose Shares (issued in connection with the Rights Issue) to be admitted to the premium segment of the Official List and to the London Stock Exchange for admission to trading of the New Melrose Shares on its main market for listed securities. It is currently expected that Admission of the New Melrose Shares will become effective and that dealings (for normal settlement) in the New Melrose Shares will commence on the London Stock Exchange, nil paid, at 8.00 a.m. on 9 August 2016 (whereupon an announcement will be made by the Company to a Regulatory Information Service).

The results of the Rights Issue, including the aggregate number of New Melrose Shares issued and the aggregate amount raised, net of commissions and expenses, is expected to be announced by Melrose through a Regulatory Information Service by 8.00 a.m. on 24 August 2016.

The Melrose Shares are currently (and it is expected that the New Melrose Shares will be) admitted to the premium segment of the Official List and to trading on the London Stock Exchange's main market for listed securities. As the Acquisition constitutes a reverse takeover under the Listing Rules, upon Completion, the listing of Melrose Shares on the premium segment of the Official List will be cancelled. Further applications will be made to the UKLA for the Melrose Shares (at such time comprising the Existing Melrose Shares and the New Melrose Shares) to be re-admitted, upon Completion, to the standard segment of the Official List and to the London Stock Exchange for the re-admission, upon Completion, of the Melrose Shares to trading on its main market for listed securities. It is currently expected that Re-admission will become effective post Completion at 8.00 a.m. on 31 August 2016 (whereupon an announcement will be made by the Company to a Regulatory Information Service). However, the timing of Completion, and therefore Re-admission, is dependent on the timing of the satisfaction (or waiver where applicable) of the conditions to the Tender Offer, as agreed in the Merger Agreement.

Should Completion not occur, subject to the passing of resolution 4 set out in the Notice of General Meeting (which is included within the Circular and will shortly be posted to Melrose Shareholders), the listing of the Melrose Shares will nevertheless be transferred from the premium segment to the standard segment of the Official List on 10 October 2016, whereupon an announcement will be made by the Company to a Regulatory Information Service.

Melrose Shareholders who hold their Melrose Shares in certificated form and who take up their entitlement to New Melrose Shares in part or in full are expected to receive definitive share certificates in respect of their New Melrose Shares by no later than 1 September 2016.

The Rights Issue has been fully underwritten on the basis set out in the Underwriting Agreement.

The Underwriters have agreed under the terms of the Underwriting Agreement to procure subscribers for the New Melrose Shares not taken up in the Rights Issue at the Rights Issue Price, failing which the Underwriters shall themselves severally (and not jointly or jointly or severally) subscribe for (or their sub-underwriters shall subscribe for) such New Melrose Shares.

It is anticipated that Melrose's unaudited results for the six months ended 30 June 2016 and Nortek's unaudited report covering the six months ended 3 July 2016 shall be released prior to the latest date and time for acceptance of the Nil Paid Rights and, in each such case, a supplementary prospectus shall be published. Should such supplementary prospectuses be published after Admission, investors should refer to those sections of the Prospectus and of each supplementary prospectus which detail investors' rights of withdrawal.

Foreign exchange hedging arrangements have been entered into by the Melrose Group with respect to the Rights Issue proceeds received in pounds sterling, in order to mitigate the foreign exchange risk and to provide funds in US dollars at Completion. Such arrangements are contingent upon the receipt of the Rights Issue proceeds and, subject to certain exceptions, the Merger Agreement not having been terminated in accordance with its terms.

5. Use of Proceeds

If Completion occurs, the Rights Issue proceeds (net of commissions and expenses) will be applied to fund the Acquisition, related expenses and to repay part of the existing debt of the Nortek Group. The balance of the debt repayment will be funded through new debt of approximately $780 million (£598 million⁽¹⁾) from the proceeds of loans pursuant to the New Facilities Agreement, which has been entered into with the Company's banks, and which will replace the Company's Existing Facility.

The expenses related to the Acquisition are expected to be approximately £19 million in aggregate.

6. Standard Listing

As the Acquisition constitutes a reverse takeover under the Listing Rules, upon Completion, the listing of Melrose Shares on the premium segment of the Official List will be cancelled. The Melrose Shares will not be eligible for re-admission to the premium segment of the Official List, as the latest balance sheet date for which audited consolidated historical financial information for Nortek can be provided is more than six months prior to the date of the Prospectus, contrary to the Premium Listing requirements in Chapter 6 of the Listing Rules. Further application will be made to the UKLA for the Melrose Shares (at such time comprising the Existing Melrose Shares and the New Melrose Shares) to be re-admitted to the standard segment of the Official List.

It is currently expected that Re-admission will become effective post Completion at 8.00 a.m. on 31 August 2016 (or in any case no earlier than 20 Business Days from the date of the General Meeting) (whereupon an announcement will be made by the Company to a Regulatory Information Service).

Should Completion not occur, subject to the passing of resolution 4 set out in the Notice of General Meeting (which is included within the Circular and will shortly be posted to Melrose Shareholders), the listing of the Melrose Shares will nevertheless be transferred from the premium segment to the standard segment of the Official List on 10 October 2016, whereupon an announcement will be made by the Company to a Regulatory Information Service.

Following Re-admission with, or transfer to, a Standard Listing, the Directors intend to seek a Premium Listing for Melrose as soon as reasonably practicable, subject to meeting the eligibility criteria contained in Chapter 6 of the Listing Rules. Whilst Melrose has a Standard Listing, it intends to comply on a voluntary basis with the provisions of Chapters 7 to 13 of the Listing Rules notwithstanding that (other than Listing Principles 1 and 2) they only apply to companies which obtain a Premium Listing. Melrose shall give not less than 20 Business Days' notice of any anticipated transfer to a Premium Listing by publishing an announcement to a Regulatory Information Service.

7. Financial effects of implementing the Acquisition

On a pro forma basis and assuming that the Acquisition, the Rights Issue, the repayment of Nortek's existing debt and borrowings pursuant to the New Facilities Agreement and the Return of Capital had each been completed on 31 December 2015, the Enlarged Group would have had net assets of £2,048.5 million at that date (based on the net assets of the Melrose Group and the Nortek Group as at 31 December 2015). On a pro forma basis, and assuming the Acquisition (including the payment of related costs) and the sale of the Elster Group had completed on 1 January 2015, the Enlarged Group would have made a headline operating profit of £164.8 million for the year ended 31 December 2015 (based on the income statements of the Melrose Group and the Nortek Group for the year ended 31 December 2015).

The Melrose Board expects that the Acquisition will be significantly accretive to headline⁽³⁾ earnings per share in the first full financial year of ownership (2017) and thereafter ⁽⁷⁾.

8. Information relating to Nortek

Nortek is a corporation organised under the laws of the State of Delaware. Nortek's common stock trades on the NASDAQ Global Market under the symbol ''NTK'' and Nortek's market capitalisation as at the Latest Practicable Date was $1,044 million (£800 million⁽¹⁾). Nortek's common stock is divided into 90,000,000 authorised shares of $0.01 par value, with 16,008,461 Nortek Shares in issue as at the Latest Practicable Date, and preferred stock of 10,000,000 authorised shares of $0.01 par value, of which there were none issued and outstanding as at the same date.

Nortek was founded in 1967 with the view of forming alliances between a number of smaller companies who could benefit from operating as part of a larger group. Originally listed on the New York Stock Exchange, Nortek was taken private in 2003 by Kelso & Company, L.P., a New York-based private equity firm, before being acquired in 2004 by Thomas H Lee Partners, a Boston-based private equity firm, for $1.75 billion. Between 2007 and 2009, Nortek's revenue declined by 24% and in October 2009, as part of a financing restructuring plan, Nortek entered into chapter 11 bankruptcy. Following a debt to equity restructuring, Nortek emerged from bankruptcy in December 2009 having eliminated approximately $1.3 billion of debt. Nortek was listed on the NASDAQ Global Market on 15 November 2011. Following a large number of acquisitions and disposals, the Nortek Group is now a global, diversified industrial group that leverages its strong brands, design and manufacturing capabilities and business system to deliver industry-leading innovative solutions for lifestyle improvement at home and at work. The Nortek Group manufactures and sells a wide variety of products principally for the remodelling and replacement markets, the residential and commercial new construction markets, the manufactured housing market and the personal and enterprise computer markets, primarily in the United States, Canada and Europe, with additional manufacturing in China and Mexico.

By combining superior sales and customer service support with broad product lines, worldwide distribution channels and strong brands, many of Nortek's companies have become leaders in their respective markets, with products in 80%⁽⁸⁾ of US homes and a good presence in US offices and educational and healthcare facilities. Nortek believes that, based on revenues, it is one of the leading US suppliers of indoor air quality products and one of the largest suppliers of HVAC products for manufactured homes in the United States and Canada.

9. Financial information relating to Nortek

The selected financial information set out below has, unless otherwise stated, been extracted without material adjustment from: (i) the historical financial information of the Nortek Group for the financial years ended 31 December 2015, 31 December 2014 and 31 December 2013, prepared under IFRS using policies which are consistent with those used in preparing the latest audited consolidated financial statements of the Melrose Group and covered by the accountant's report thereon; and (ii) the unaudited quarterly financial statements of the Nortek Group for the first quarter ending 2 April 2016, published on 12 May 2016 and prepared in accordance with US GAAP.

	For the first quarter ended
$m	2 April 2016	28 March 2015
	Unaudited	Unaudited
Net sales	613.9	572.7
Operating earnings	28.9	7.7
Net interest expense	(23.7)	(27.2)
Earnings/(loss) before provision/(benefit) from income taxes	5.2	(19.5)
Total assets	2,149.4	2,130.4
Total liabilities	2,131.0	2,118.1
Total equity	18.4	12.3

	For the year ended
$m	31 Dec 2015	31 Dec 2014	31 Dec 2013
Revenue	2,526.1	2,546.1	2,287.9
Operating profit	93.8	40.7	85.9
Headline(3) operating profit	220.1	220.4	184.5
Loss before tax	(21.8)	(71.4)	(17.0)
Total assets	2,127.0	2,162.8	1,912.7
Total liabilities	2,109.8	2,119.2	1,826.5
Total equity	17.2	43.6	86.2

10. Nortek Board Recommendation and Tender and Support Agreements in respect of the Acquisition

The Nortek Board intends to unanimously recommend that Nortek Shareholders tender their Nortek Shares to MergerCo pursuant to the Tender Offer. The Nortek Board has, subject to their fiduciary duties and there being no development or change at any time prior to the Tender Offer Expiration Date that Nortek (not including a Superior Proposal) becomes known to the Nortek Board after the date of the Merger Agreement, but which was not known (and reasonably should not have been known) to the Nortek Board as the date of the Merger Agreement, agreed to include in its Schedule 14D-9, among other things, that the Tender Offer is fair to and in the best interests of Nortek and its shareholders and that it approves the Tender Offer and unanimously recommends that Nortek Shareholders tender their Nortek Shares into the Tender Offer.

In connection with the Tender Offer and the Merger, certain stockholders of Nortek have entered into Tender and Support Agreements which govern the conditions upon which such stockholders shall tender their Nortek Shares pursuant to the Tender Offer and obliging such stockholders to support the Tender Offer and the Merger. Such Tender and Support Agreements have been entered into by each of Ares Management, Gates Capital Management and Anchorage Capital (amounting in aggregate to approximately 68.7% of the total share capital of Nortek as at the Latest Practicable Date). The undertakings pursuant to the Tender and Support Agreements will cease to be binding if the Merger Agreement is terminated.

11. Current Trading

On 11 May 2016, the Company published a trading statement, an extract of which is set out below:

"Current trading in Melrose in 2016 is in line with expectations, with Brush performing satisfactorily this year." 

There has been no change to the Melrose Board's expectations since the publication of the trading statement on 11 May 2016.

On 12 May 2016, Nortek published commentary on its financial results for the first quarter ended 2 April 2016, extracts of which are set out below:

"[Nortek] started the year with positive momentum, posting solid first quarter financial performance led by market demand, innovation across [its] businesses and the benefits of [its] transformation efforts."

"[Nortek] were especially pleased to deliver strong organic net sales growth of 8% and organic adjusted EBITDA growth of 31% over the prior year period. Strength was broad-based, with Air Quality, Security, Ergonomics and HVAC all posting double-digit organic net sales growth compared to last year. In [its] HVAC business, [Nortek] continue to be encouraged by the order trends and [its] delivery performance is tracking well. Benefitting from [Nortek's] restructuring efforts and the discontinuation of unprofitable product lines, [its] Custom Air and AV businesses delivered meaningful year-over-year improvements in segment adjusted operating earnings in the first quarter."

There has been no change to the Board's expectations of Nortek since the publication of the commentary on 12 May 2016.

12. Melrose General Meeting

Due to its size, the Acquisition is a reverse takeover and constitutes a class 1 transaction for Melrose under the Listing Rules. As such, Melrose is seeking the approval of Melrose Shareholders for the Acquisition.

Melrose Shareholders will also be asked to authorise the allotment of the New Melrose shares to be issued pursuant to the Rights Issue.

In addition, Melrose is seeking the approval of Melrose Shareholders for the cancellation of the listing of the Melrose Shares on the premium segment of the Official List and the re-admission or transfer of the Melrose Shares to the standard segment of the Official List and to trading on the London Stock Exchange's main market for listed securities.

Accordingly, the Melrose General Meeting has been convened at the offices of Investec Bank plc, 2 Gresham Street, London EC2V 7QP at 11.00 a.m. on 25 July 2016.

13. 2012 Incentive Plan

Your attention is drawn to the fact that awards under the 2012 Incentive Plan are due to crystallise in May 2017. In light of the Acquisition, it is the Board's intention that, following such crystallisation, the Company shall put in place a new long-term incentive arrangement. It is envisaged that any new long-term incentive plan will be on identical terms, in all material respects, to the 2012 Incentive Plan and will therefore directly align executive Directors' and senior management's remuneration with that of shareholders, by linking remuneration directly to any growth in shareholder value. The Company shall provide further details on, and seek shareholder approval of, the new plan in due course.

14. Further information

Further details in relation to the Acquisition and Rights Issue will be set out in the Prospectus and Circular which will be published or posted (as applicable) shortly. Melrose Shareholders' attention is drawn, in particular, to the risk factors included in these documents.

1) Converted into pounds sterling at the exchange rate as at the Latest Practicable Date, being $1:£0.77.

2) Headline operating profit before depreciation, calculated using results for the 12 months ended 2 April 2016.

3) Before exceptional costs, exceptional income and intangible asset amortisation (''headline'').

4) Market positions based on Nortek management estimates.

5) Calculated as net debt divided by adjusted EBITDA.

6) Based upon the Enlarged Group's pro forma headline operating profit.

7) Nothing in this announcement is intended to be, or is to be construed as, a profit forecast or to be interpreted to mean that earnings per Melrose Share for the current or future financial years, or those of the Enlarged Group, will necessarily match or exceed the historical earnings per Melrose Share.

8) Based on Nortek management estimates.

APPENDIX I

 Expected timetable of principal events¹

	Time and Date
Announcement of the Acquisition and Rights Issue.......................................................	6 July 2016
Publication of the Prospectus and posting of the Circular, the Notice of General Meeting and the Form of Proxy.............................................................................................	6 July 2016
Tender Offer commences in the US/ Tender Offer Document is filed with the SEC.	By no later than 11 July 2016
Nortek to file Recommendation Statement on Schedule 14D-9, in which the Nortek Board recommends acceptance of the Tender Offer.........................................	By no later than 11 July 2016
Latest time and date for receipt of the Form of Proxy......................................................	11.00 a.m. on 21 July 2016
Melrose General Meeting....................................................................................................	11.00 a.m. on 25 July 2016
Rights Issue Record Date....................................................................................................	Close of business on 4 August 2016
Window Shop Deadline........................................................................................................	11.59 p.m. (New York time) on 6 August 2016
Despatch of Provisional Allotment Letters (to Qualifying Non-CREST Shareholders only) (2).............................................................................................................	8 August 2016
Publication of notice in the London Gazette......................................................................	9 August 2016
Existing Melrose Shares marked "ex" by the London Stock Exchange........................	8.00 a.m. 9 August 2016
Admission of, and dealings (for normal settlement) commence in, New Melrose Shares, nil paid, on the London Stock Exchange..........................................................	8.00 a.m. 9 August 2016
Nil Paid Rights credited to stock accounts in CREST (Qualifying CREST Shareholders only)(2).............................................................................................................	As soon as practicable after 8.00 a.m. 9 August 2016
Nil Paid Rights and Fully Paid Rights enabled in CREST.............................................	As soon as practicable after 8.00 a.m. 9 August 2016
Recommended latest time for requesting withdrawal of Nil Paid Rights and Fully Paid Rights from CREST (i.e., if your Nil Paid Rights and Fully Paid Rights are in CREST and you wish to convert them to certificated form)............................................	4.30 p.m. on 17 August 2016
Latest time for depositing renounced Provisional Allotment Letters, nil or fully paid, into CREST or for dematerialising Nil Paid Rights or Fully Paid Rights into a CREST stock account (i.e. if your Nil Paid Rights and Fully Paid Rights are represented by a Provisional Allotment Letter and you wish to convert them to uncertificated form)................................................................................................................	3.00 p.m. on 18 August 2016
Latest time and date for splitting Provisional Allotment Letters, nil or fully paid........	3.00 p.m. on 19 August 2016
Latest time and date for acceptance, payment in full and registration of renunciation of Provisional Allotment Letters...............................................................	11.00 a.m. on 23 August 2016
Results of Rights Issue to be announced through a Regulatory Information Service......................................................................................................................................	By 8.00 a.m. on 24 August 2016
Dealings in New Melrose Shares, fully paid, commence on the London Stock Exchange.................................................................................................................................	8.00 a.m. on 24 August 2016
New Melrose Shares credited to CREST accounts.........................................................	As soon as practicable after 8.00 a.m. on 24 August 2016
Tender Offer Expiration Date................................................................................................	2.00 a.m. (New York time) on 31 August 2016
Announcement of the Tender Offer results and acceptance of the Nortek Shares tendered in the Tender Offer................................................................................................	Promptly after the Tender Offer Expiration Date
Effective time of the Merger / Completion of Acquisition............................................	As soon as practicable after 2.00 a.m. (New York time) on 31 August 2016
Cancellation of the listing of the Melrose Shares............................................................	Immediately prior to 8.00 a.m. on  31 August 2016
Re-admission of Melrose Shares (at such time comprising the Existing Melrose Shares and the New Melrose Shares).............................................................	8.00 a.m. on 31 August 2016
Despatch of definitive share certificates for the New Melrose Shares in certificated form...........................................................................................................................................	By no later than 1 September 2016

(1) The times and dates set out in the expected timetable of principal events above and mentioned in this Announcement may be adjusted by Melrose in consultation with the Joint Bookrunners in which event details of the new times and dates will be notified to the UKLA, the London Stock Exchange and, where appropriate, Qualifying Shareholders.

(2) Subject to certain restrictions relating to Overseas Shareholders. Except where otherwise indicated, references to a time of day are to London time.

APPENDIX II

 Definitions

2012 Incentive Plan		the long term incentive plan for executive Directors and senior management of the Company, approved by Melrose Shareholders on 11 April 2012 and scheduled to crystallise in 2017
Acquisition		the proposed acquisition of the entire issued share capital of Nortek by the Melrose Group, by way of the Tender Offer and the Merger, pursuant to the Merger Agreement
Admission		the proposed admission of the New Melrose Shares to the premium segment of the Official List and to trading nil paid on the main market for listed securities of the London Stock Exchange
Anchorage Capital		Anchorage Capital Master Offshore, Ltd.
Announcement		this announcement made by the Company on 6 July 2016 in relation to the Acquisition and the Rights Issue
Anti-trust Clearance		the anti-trust clearance under the HSR Act in the US required in connection with the Acquisition
Anthro		Anthro Corporation
AQH segment		the Air Quality and Home Solutions segment of the Nortek Group
Ares Management		Ares Corporate Opportunities Fund II L.P. and Ares Corporate Opportunities Fund III L.P.
Australia		the Commonwealth of Australia and its dependent territories
AVC segment		the audio, video and control entities of the Nortek Group
Board(s)		the Melrose Board and/or the Nortek Board (as the case may be)
BofA Merrill Lynch		Merrill Lynch International
Brush		the Brush business which comprises Brush Holdings Limited together with its direct and indirect subsidiaries and subsidiary undertakings
Business Day		a day (other than a Saturday or Sunday or public holiday) on which banks are open for business in London, other than solely for trading and settlement in Euro
Canada		Canada, its provinces and territories and all areas subject to its jurisdiction or any political subdivision thereof
CAS segment		the Custom and Commercial Air Solutions segment of the Nortek Group
certificated or in certificated form		in relation to a share or other security, a share or other security title to which is recorded in the relevant register of the share or other security as being held in certificated form (that is, not in CREST)
Circular		the Melrose Shareholder circular dated 6 July 2016
Closing Price		the closing, middle market quotation in pounds sterling of a Melrose Share, as published in the Daily Official List
Company or Melrose		Melrose Industries PLC, a public limited company incorporated in England and Wales with registered number 9800044
Completion		completion of the Acquisition
CREST		the electronic transfer and settlement system for the paperless settlement of trades in listed securities and the holding of uncertificated securities in accordance with the CREST Regulations operated by Euroclear
CREST Regulations		the Uncertificated Securities Regulations 2001 (SI 2001 No. 01/378), as amended
Daily Official List		the daily official list of the London Stock Exchange
Director(s) or Melrose Director(s)		the directors of the Company
Disclosure Requirements		articles 17, 18 and 19 of the Market Abuse Regulation
EBITDA		earnings before interest, tax, depreciation and amortisation
Elster Group		the Elster business which comprised, prior to its disposal by the Melrose Group, Teaford GmbH, together with its direct and indirect subsidiaries and subsidiary undertakings
Enlarged Group		the Melrose Group following the acquisition of the Nortek Group
Enlarged Share Capital		the share capital of Melrose immediately following the completion of the Rights Issue and the issue of the New Melrose Shares
ERG segment		the Ergonomic and Productivity Solutions segment of the Nortek Group
Euroclear		Euroclear UK & Ireland Limited, the operator of CREST
Excluded Territories		Australia, Japan and South Africa and any other jurisdictions where the extension and availability of the Rights Issue would breach any applicable law
Existing Facility Agreement		the multi-currency revolving credit facility agreement dated 29 June 2012, as amended and/or amended and restated from time to time (including pursuant to an amendment and restatement agreement dated 30 September 2015) between, among others, Melrose Industries PLC as borrower and Lloyds Bank PLC as agent
Existing Melrose Shares		the ordinary shares of 48/7 pence each in the capital of the Company in issue at the Record Date
FCA		the UK Financial Conduct Authority
Form of Proxy		the form of proxy for use at the Melrose General Meeting
FSMA		the Financial Services and Markets Act 2000, as amended, modified or re-enacted from time to time
Fully Paid Rights		the rights to acquire New Melrose Shares, fully paid
Gates Capital Management		ECF Value Fund, L.P., ECF Value Fund II L.P. and ECF Value Fund International Ltd.
General Meeting		the general meeting of the Company to be held at the offices of Investec Bank plc at 2 Gresham Street, London EC2V 7QP at 11.00 a.m. on 25 July 2016 to vote on the Resolutions
headline		before exceptional costs, exceptional income and intangible asset amortisation
HSR Act		the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder
HVAC		heating, ventilation and air conditioning
Joint Bookrunners		Investec Bank plc, J.P. Morgan Securities plc and BofA Merrill Lynch
Joint Global Co-ordinators		Investec Bank plc and J.P. Morgan Securities plc
J.P. Morgan Cazenove		each of J.P. Morgan Securities plc and J.P. Morgan Limited, which conducts its investment banking activities as J.P. Morgan Cazenove
Latest Practicable Date		5 July 2016 (being the latest practicable date prior to the publication of this Announcement)
Listing Rules or LR		the listing rules made by the FCA under section 73A FSMA
London Gazette		the official newspaper of the Crown
London Stock Exchange		the London Stock Exchange plc or its successor(s)
Market Abuse Regulation		Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse
Melrose Board		the board of directors of the Company
Melrose Group		the Company, its subsidiaries and subsidiary undertakings from time to time
Melrose Shareholder(s)		holder(s) of Melrose Shares
Melrose Shares or Ordinary Shares		the ordinary shares of 48/7 pence each in the capital of Melrose
MergerCo		a wholly-owned subsidiary of the Company, incorporated for the purposes of implementing the Acquisition
Merger		the merger of MergerCo with and into Nortek pursuant to the Merger Agreement
Merger Agreement		the agreement and plan of merger between Melrose, MergerCo and Nortek dated 6 July 2016 relating to the Acquisition
NASDAQ		the NASDAQ Global Market, a US stock exchange based in New York
National Storage Mechanism		the document publication facility made available by the FCA at www.morningstar.co.uk/uk/nsm
New Facilities Agreement		the senior term and revolving facilities agreement dated 6 July 2016 entered into between Melrose Industries PLC and MergerCo as initial borrowers, the parties named therein as original lenders and Lloyds Bank plc as agent
New Melrose Shares		the ordinary shares of 48/7 pence each in the capital of the Company proposed to be issued by the Company pursuant to the Rights Issue
Nil Paid Rights		New Melrose Shares, in nil paid form provisionally allotted to Qualifying Shareholders pursuant to the Rights Issue
Nomura		Nomura International plc
Nortek		Nortek, Inc., a corporation organised under the laws of the State of Delaware
Nortek Board		the board of directors of Nortek
Nortek Group		Nortek, its subsidiaries and subsidiary undertakings from time to time
Nortek Shareholders		holders of Nortek Shares
Nortek Shares		the entire issued ordinary share capital of Nortek
Notice of General Meeting		the notice of Melrose General Meeting, as set out in the Circular
Official List		the official list maintained by the UKLA for the purposes of Part V of FSMA
Overseas Shareholders		Shareholders who are resident in, ordinarily resident in, or citizens of, jurisdictions outside the United Kingdom
pence, £, GBP and pounds sterling		the lawful currency of the United Kingdom
PRA		the United Kingdom Prudential Regulation Authority and includes, where applicable, any successor body or bodies carrying the functions currently carried out by the Prudential Regulation Authority
Premium Listing		a premium listing under Chapter 6 of the Listing Rules
Prospectus		the document dated on or around the date of this Announcement comprising a prospectus relating to the Company, Admission and Re-admission (together with any supplements or amendments thereto)
Provisional Allotment Letter		the renounceable provisional allotment letters relating to the Rights Issue to be issued to Qualifying Non-CREST Shareholders other than certain Overseas Shareholders
Qualifying CREST Shareholders		Qualifying Shareholders whose Existing Melrose Shares are in uncertificated form
Qualifying Non-CREST Shareholders		Qualifying Shareholders whose Existing Melrose Shares are in certificated form
Qualifying Shareholders		Melrose Shareholders on the Register at the Record Date
RCH segment		the Residential and Commercial HVAC segment of the Nortek Group
Re-admission		the proposed re-admission of the Melrose Shares to the standard segment of the Official List and to the main market for listed securities of the London Stock Exchange
Record Date		the close of business in London on 4 August 2016
Register		the Company's statutory register of members
Regulatory Information Service or RIS		one of the regulatory information services authorised by the UKLA to receive, process and disseminate regulatory information from listed companies
Resolutions		the resolutions to be proposed at the Melrose General Meeting as set out in the Notice of General Meeting, with any permitted amendments thereto
Return of Capital		the Court-confirmed return of approximately £2,388.5 million of capital by Melrose to Melrose Shareholders by way of cancellation of B shares which took effect on 27 January 2016
Rights Issue		the proposed issue of the New Melrose Shares to Qualifying Shareholders by way of rights on the terms and conditions set out in the Prospectus and in the case of Qualifying Non-CREST Shareholders only, the Provisional Allotment Letters
Rights Issue Price		95 pence per New Melrose Share
Schedule 14D-9		a tender offer recommendation statement on Schedule 14D-9 (together with all amendments, supplements and exhibits thereto), which will be filed with the SEC and mailed to Nortek Shareholders on the Tender Offer Commencement Date
SCS segment		the Security and Control Solutions segment of the Nortek Group
SEC		the US Securities and Exchange Commission
Sponsors		together, Investec Bank plc and J.P. Morgan Securities plc
Standard Listing		a standard listing under Chapter 14 of the Listing Rules
subsidiary and subsidiary undertaking		have the meaning given to them in sections 1159 and 1162 of the Companies Act respectively
Superior Proposal		an unsolicited, bona fide, written proposal by any person (other than Melrose) which would result in the acquisition by such person of more than 50% of the Nortek Shares or of all or substantially all of the assets of Nortek Group, and the Nortek Board determines, in good faith and after consultation with Nortek's external financial and legal advisers, that such proposal would be more favourable from a financial point of view than the Acquisition
Tender and Support Agreements		the tender and support agreements entered into on or about the date of this Announcement between Melrose, MergerCo and each of Ares Management, Gates Capital Management and Anchorage Capital in relation to the Tender Offer and the Merger
Tender Offer		the offer by MergerCo to purchase all of the issued and outstanding Nortek Shares as at the Tender Offer Expiration Date at the Tender Offer Price
Tender Offer Document		a tender offer statement on Schedule TO and the related letter of transmittal, which will be filed with the SEC and mailed to Nortek Shareholders on the Tender Offer Commencement Date containing and setting out the terms and conditions of the Tender Offer
Tender Offer Expiration Date		2.00 a.m. (New York time) on 31 August 2016 (or such subsequent date to which the expiration of the Tender Offer is extended pursuant to and in accordance with the terms of the Tender Offer Document)
Tender Offer Price		$86 per Nortek Share, net, in cash without interest
Transaction Resolutions		the resolutions to be proposed at the Melrose General Meeting to approve the Acquisition, the Rights Issue and Re-admission, being resolution 1, resolution 2 and resolution 4 as set out in the Notice of General Meeting, with any permitted amendments thereto
Transparency Rules		the transparency rules and corporate governance rules made by the FCA under Part VI of FSMA
UK or United Kingdom		the United Kingdom of Great Britain and Northern Ireland
UKLA		the FCA acting in its capacity as the competent authority for the purposes of Part VI of FSMA
uncertificated or in uncertificated form		a share or other security title to which is recorded in the relevant register of the share or security as being held in uncertificated form, in CREST, and title to which, by virtue of the CREST Regulations may be transferred by means of CREST
Underwriters		Investec Bank plc, J.P. Morgan Securities plc and BofA Merrill Lynch
Underwriting Agreement		the underwriting agreement dated 6 July 2016 between Melrose and the Underwriters pursuant to which the Underwriters have conditionally agreed to underwrite the Rights Issue
US or United States or United States of America		the United States of America (including the states of the United States and the District of Columbia), its possessions and territories and all areas subject to its jurisdiction
US$, US dollars, USD or $		the lawful currency of the United States
US Securities Act		the US Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder
VAT		(i) within the EU, any tax imposed by any member state in conformity with the directive of the council of the EU on the common system of value added tax (2006/112/EC), and (ii) outside the EU, any tax corresponding to, or substantially similar to, the common system of value added tax referred to in paragraph (i) of this definition
Window Shop Deadline		11.59 p.m. (New York Time) on 6 August 2016

 

END

 

 

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