Caledonia Investments PLC
29 January 2002
CALEDONIA INVESTMENTS PLC
English & Scottish Investors p.l.c - Proposed tender offer and partial early
redemption of debenture stocks
Caledonia Investments plc ('Caledonia') refers to the announcement released
today by English & Scottish Investors p.l.c ('English & Scottish'), of the terms
of a proposed tender offer to repurchase up to two-thirds of its issued ordinary
share capital and a partial early redemption of its debenture stocks. English &
Scottish is an investment trust which seeks capital growth by investing actively
on a worldwide basis, in which Caledonia's wholly-owned subsidiary, Caledonia
Investment Funds Limited ('CIFL'), owns a 32.4% interest.
Caledonia supports the tender offer proposal as it anticipates that, on the
basis of current market levels, it will bring the following benefits to the
• Cash proceeds of between £86m and £88m, assuming the full realisation
of the English & Scottish holding;
• The ability to realise all, or at least a substantial part, of its
shareholding in English & Scottish at a premium to the market price;
• An enhancement in net asset value per share as adjusted to reflect the
market value of Caledonia's associates.
The proposed tender offer is subject to the approval of English & Scottish's
shareholders and to the prior agreement of its debenture holders to the partial
early redemption of its debenture stocks on modified terms. CIFL has undertaken
that, if the tender offer proceeds and subject to certain conditions, it will
tender all of its 48,000,000 ordinary shares in English & Scottish and vote in
favour of the resolutions to implement the tender. These undertakings may be
withdrawn if the estimated tender price at the time of despatch of the tender
offer circular to English & Scottish's shareholders is less than 155p (on the
basis of two-thirds of the English & Scottish shares being tendered).
The cash proceeds receivable by CIFL will not finally be established until the
tender process has been completed, as the number of CIFL's English & Scottish
shares that will be repurchased and the tender price to be paid will be
dependent on the total number of English & Scottish shares offered in the
tender, the proceeds from the realisation of assets required to effect the
proposal and the quantum of debenture stocks subject to early redemption.
However, provided less than two-thirds of English & Scottish's shares (51% of
those shares not owned by CIFL) are tendered, CIFL will sell its entire holding.
The table below illustrates the likely effects on Caledonia of the tender on the
basis that one-third, one half or two-thirds of English & Scottish's shares are
It is expected that the necessary approvals from English & Scottish's debenture
holders will be sought on 21 February 2002 and, if forthcoming, the tender offer
circular and election forms will be despatched to English & Scottish's
shareholders by the end of February 2002. The tender is expected to close and
the EGM of English & Scottish's shareholders to approve the tender offer to be
held by mid March 2002. Payment of the tender proceeds is anticipated within two
weeks thereafter. Caledonia will advise its shareholders of the results of the
tender offer in due course.
The proceeds from the tender offer will be utilised in part in repaying
Caledonia's borrowings and the balance will be held on deposit pending
Commenting on the proposals, Peter Buckley, Chairman and Chief Executive of
' English & Scottish has produced relatively strong performance over the longer
term. However we no longer consider that such a large holding in a generalist
investment trust is appropriate for Caledonia and accordingly we have indicated
our desire to realise our investment to English & Scottish's board. We believe
that the proposed tender offer provides the most advantageous means for
Caledonia, and any other English & Scottish shareholders who may wish to do
likewise, to reduce their holdings. '
Enquiries: Peter Buckley
Chairman and Chief Executive
Caledonia Investments plc 020 7802 8080
The table below illustrates the effects on Caledonia of the English & Scottish
tender offer on the basis that one-third, one half or two-thirds of English &
Scottish's shares are tendered.
Total numbers of English & Scottish shares tendered
Notes One-third One half Two-thirds
Tender price per share 1 179.3p 181.5p 182.5p
Premium to the current price 2 4.1% 5.4% 6.0%
by CIFL £86.0m £87.1m £87.6m
Caledonia's NAV per share 3
- reported (18.4p) (17.4p) (16.9p)
- adjusted 2.5p 3.5p 4.0p
1. Based upon an English & Scottish NAV per share at the close of business on 25
January 2002 of 209.4p (after 0.3p reduction for revaluation of unquoted
investments) and after the costs of the early repayment of the debenture
stocks and transaction costs.
2. Based upon the mid-market price at the close of business on 25 January 2002
3. Reported NAV per share reflects Caledonia's share of English & Scottish's
underlying net assets, whereas adjusted NAV per share reflects Caledonia's
interest in English & Scottish at market value. As the tender price is at a
discount to English & Scottish's NAV per share, Caledonia's reported NAV per
share is reduced. Conversely, as the tender price is at a premium to English
& Scottish's market price, Caledonia's adjusted NAV per share is increased.
English & Scottish was carried in Caledonia's books at 30 September 2001 at
4. In the year ended 31 March 2001, Caledonia's share of English & Scottish's
profit before tax was £1.3m.
5. Caledonia will recognise in its profit and loss account its share of
the costs of the tender and the debenture stocks redemption incurred by
English & Scottish, net of an anticipated goodwill credit arising on the
disposal. In the above illustrations Caledonia would incur an exceptional
charge before tax on the disposal of £8.9m (one-third of English &
Scottish's shares tendered), £7.8m (one half tendered) or £7.3m (two-thirds
tendered). On the basis of the expected timetable for the tender offer, this
exceptional charge will be reflected in Caledonia's results for its year
ended 31 March 2002.
This information is provided by RNS
The company news service from the London Stock Exchange