Recommended Offer by BP Amoco - Part 3
Burmah Castrol PLC
14 March 2000
Part 3
RECOMMENDED OFFER FOR BURMAH CASTROL
1 Introduction
The Boards of BP Amoco and Burmah Castrol announce that they have reached
agreement on the terms of a recommended cash Offer to be made by Morgan
Stanley Dean Witter on behalf of BP Amoco for all the issued and to be
issued share capital of Burmah Castrol.
The Offer will be £16.75 in cash for each Burmah Castrol share, valuing
Burmah Castrol's issued share capital at approximately £3 billion.
The Board of Burmah Castrol, which has been so advised by Schroders and
Wasserstein Perella, its financial advisers, considers the terms of the
Offer to be fair and reasonable. In providing advice to the Board of
Burmah Castrol, Schroders and Wasserstein Perella have taken account of
the directors' commercial assessments. The Board of Burmah Castrol will
unanimously recommend Burmah Castrol shareholders to accept the Offer, as
the directors have undertaken to do in respect of all their beneficial
holdings.
2 The Offer
On behalf of BP Amoco, Morgan Stanley Dean Witter will offer to acquire,
subject to the conditions and further terms set out below and in Appendix
I, all of the Burmah Castrol shares on the following basis:
for each Burmah Castrol share £16.75 in cash
The Offer represents a premium of approximately 74 per cent over the
Closing Price of £9.65 per Burmah Castrol share on 10 March, 2000, the
last business day prior to the announcement that BP Amoco and Burmah
Castrol were in discussions about a possible offer. The Offer represents
a premium of approximately 61 per cent over the average Closing Price of
£10.41 per Burmah Castrol share for the 3 months to 10 March, 2000.
Burmah Castrol shareholders on the register on 10 March 2000 will be
entitled to receive and retain the final dividend of 31.9 pence per share
declared on 28 February, 2000.
3 Further Details of the Offer
The Burmah Castrol shares which are the subject of the Offer will be
acquired by BP Amoco fully paid and free from all liens, charges,
equitable interests, third party rights and encumbrances and, save as set
out below and in Appendix I, together with all rights now or hereafter
attaching thereto, including the right to receive all dividends and other
distributions (if any) declared, made or paid after the date of this
announcement. However, acceptance of the Offer will not prevent Burmah
Castrol shareholders on the register at close of business on 10 March,
2000 from receiving and retaining the net final dividend of 31.9 pence
per Burmah Castrol share declared on 28 February, 2000 which is to be
paid on 7 July, 2000. The Offer will extend to all Burmah Castrol shares
unconditionally allotted or issued on the date on which the Offer is made
and any further Burmah Castrol shares unconditionally allotted or issued
while the Offer remains open for acceptance (or such earlier date as BP
Amoco may determine, not being earlier than the date on which the Offer
becomes unconditional as to acceptances or, if later, the first closing
date of the Offer).
The formal Offer Document will be sent to Burmah Castrol shareholders
once the pre-conditions set out in Appendix I (regulatory clearances) are
satisfied or waived. If either of the pre-conditions set out in Appendix
I has not been satisfied or waived by the close of business (London time)
on 13 September, 2000, the Offer will only be made with the agreement of
BP Amoco, Burmah Castrol and the Panel. The Offer will be on terms and
will be subject to, inter alia, the pre-conditions and conditions which
are set out in Appendix I and to those terms which will be set out in the
Offer Document and in the Form of Acceptance, and such further terms as
may be required to comply with the rules and regulations of The London
Stock Exchange and the City Code.
4 The Loan Note Alternative
Burmah Castrol shareholders, other than certain overseas shareholders,
who validly accept the Offer will be able to elect to receive Loan Notes
instead of some or all of the cash to which they would otherwise become
entitled under the terms of the Offer. The Loan Note Alternative will be
available on the following basis:
For every £1 in cash consideration £1 nominal of Loan Notes
The Loan Notes will be unsecured and will be issued credited as fully
paid in amounts and integral multiples of £1 nominal value. All
fractional entitlements to the Loan Notes will be disregarded. No
application will be made for the Loan Notes to be issued or dealt in or
on any stock exchange but they shall be transferable subject to certain
restrictions to be set out in the instrument constituting the Loan Notes.
The Loan Notes will carry interest at 0.5% below LIBOR. Interest will be
payable by half-yearly instalments in arrears (less any tax) on 30 June
and 31 December in each year, except as follows. The first payment of
interest will be made on the date (the 'First Payment Date') which is the
first 30 June or 31 December to fall on or after the date which is 6
months after the first date of issue of any of the Loan Notes. On the
First Payment Date, interest will be paid in respect of the period from
(and including) the first date of issue of any of the Loan Notes to (but
excluding) the First Payment Date. The Loan Notes will be redeemable in
whole or part for cash at the option of shareholders on the First Payment
Date and subsequent interest payment dates. In certain circumstances (to
be set out in the instrument constituting the Loan Notes), BP Amoco will
have the right to redeem all of the Loan Notes. The final redemption date
will be the fifth anniversary of the First Payment Date.
No Loan Notes will be issued unless, on or before the date on which the
Offer becomes or is declared unconditional in all respects, valid
elections have been received in respect of at least £7,500,000 in nominal
value of Loan Notes. If insufficient elections are received, Burmah
Castrol shareholders electing for the Loan Note Alternative will instead
receive cash in accordance with the terms of the Offer.
Subject as aforesaid, the Loan Note Alternative will remain open for
acceptance for so long as the Offer remains open for acceptance. The
Loan Note Alternative is conditional upon the Offer becoming or being
declared unconditional in all respects.
The Loan Notes have not been and will not be registered under the US
Securities Act of 1933, as amended, nor the securities laws of any state
of the United States nor under applicable securities laws of Canada,
Australia, Japan or New Zealand. The Loan Notes may not be offered, sold
or delivered, directly or indirectly, in or into the United States,
Canada, Australia, Japan or New Zealand except pursuant to exemptions
from applicable requirements of such jurisdictions. The availability of
the Loan Note Alternative to Burmah Castrol shareholders who are not
resident in the United Kingdom may be affected by the laws of the
relevant jurisdictions. Burmah Castrol shareholders who are not resident
in the United Kingdom should inform themselves about and observe any
applicable requirements.
5 Background to and Reasons for the Offer
BP Amoco aims to have a significant presence in all markets in which it
participates, on a global basis wherever possible. The Burmah Castrol
lubricants business will complement the lubricants business which is
being transferred from the Mobil joint venture to BP Amoco.
The Board of BP Amoco believes that the acquisition of Burmah Castrol
represents an exceptional opportunity, which will bring significant
benefits to both BP Amoco and Castrol. Castrol brings new strength to BP
Amoco in its downstream activities, particularly in respect of its
excellent customer-focused brand management skills. Castrol is a world-
class brand, with great potential for growth in both its established
markets and through its position in emerging economies.
The creation of the new combined business is expected to yield pre-tax
cost savings of around $260 million a year by 2003, mainly from
eliminating duplication in logistics, procurement and support services,
together with a reduction of some 1700 staff worldwide from the combined
operation, as the businesses are integrated. The costs of implementation
are expected to be approximately $390 million, all of which will be taken
as a charge in 2000.The transaction is expected to be earnings-enhancing
before goodwill amortisation in the first full financial year after the
acquisition. This should not be interpreted to mean that earnings per
share in that financial year will necessarily be greater than those for
the immediately preceding financial year.
6 Information on the BP Amoco Group
In BP Amoco's preliminary results for the financial year ended 31
December, 1999, BP Amoco reported consolidated profit before taxation of
$7,026 million. As at 31 December, 1999, the BP Amoco Group had net debt
of $12,993 million and net assets of $44,342 million. Further
information on the BP Amoco Group is set out in Part II of this press
announcement.
7 Information on the Burmah Castrol Group
Burmah Castrol is a global marketing-led company, with the Castrol brand
at its heart. It is customer-focused, with an emphasis on its ability to
offer its customers innovative high added value services. Burmah Castrol
has four principal Lubricants divisions:
Castrol Consumer, which supplies a complete range of motorcar and
motorcycle products and support services to retail and workshop
customers. Over the past six months, this business has announced
innovative global partnerships with BMW and Hyundai, illustrating
Castrol's strong OEM relationships as well as its committed approach to
developing its brands;
Castrol Industrial, which provides chemicals fluids management,
metalworking and specialised lubricants services to industrial customers
including transportation equipment manufacturers, metal component makers,
mining and process industries;
Castrol Marine, which offers lubricants and services to international and
domestic shipping fleets; and
Castrol Commercial, which supplies products and services to on- and off-
road vehicle fleets, as well as to specialist workshops and commercial
lubricants distributors.
Burmah Castrol also has a strong portfolio of speciality chemicals
businesses, servicing the foundry, construction, printing, steel and
other industries.
Burmah Castrol has strong market positions in established and developing
economies around the world. Each of its businesses operates on a global basis
and Burmah Castrol's 1999 turnover from continuing operations was derived from
the following geographical markets:
Europe - 34 per cent
The Americas - 31 per cent
Rest of World - 35 per cent
Total - 100 per cent
In Burmah Castrol's preliminary results for the financial year ended 31
December, 1999, Burmah Castrol reported consolidated profit from
continuing businesses before taxation and exceptional items of £259
million on turnover of £2,908 million. As at 31 December, 1999, Burmah
Castrol had net debt of £454 million and net assets of £589 million.
Further information on the Burmah Castrol Group is set out in Part II of
this press announcement.
8 Management and Employees
BP Amoco attaches great importance to the skills and experience of the
existing management and employees of Castrol and believes that they will
benefit from significantly greater opportunities within the enlarged
group.
There will be redundancies as a result of bringing the two groups
together, although it is difficult at this stage to be specific about how
particular locations will be affected. Wherever possible, efforts will be
made to reduce the impact of job losses by, for example, the introduction
of early retirement schemes. Communication and consultation with
employees will be an integral part of management's plans and the process
will be merit based and transparent.
BP Amoco has given assurances that the existing rights, including pension
rights, of all the management and employees of the Burmah Castrol Group
will be fully safeguarded.
9 Burmah Castrol Share Option Schemes
The Offer will (subject to compliance with any applicable local laws)
extend to any Burmah Castrol shares issued or unconditionally allotted
while the Offer remains open for acceptance (or such earlier date as BP
Amoco may determine, not being earlier than the date on which the Offer
becomes unconditional as to acceptances or, if later, the first closing
date of the Offer), including Burmah Castrol shares issued pursuant to
the exercise of share options granted under the Burmah Castrol Share
Option Schemes. If the Offer becomes or is declared wholly unconditional,
appropriate proposals will (subject to compliance with and to the extent
permitted by any applicable local laws) be made, in due course, to the
holders of Burmah Castrol options not exercised while the Offer remains
open for acceptance.
10 General
BP Amoco has received irrevocable undertakings to accept the Offer from
all of the directors of Burmah Castrol who own shares in Burmah Castrol
in respect of their aggregate beneficial holdings, currently being
106,825 Burmah Castrol shares, representing approximately 0.06 per cent
of Burmah Castrol's issued share capital.
As at 13 March, 2000, the last date prior to this announcement, the BP
Amoco Pension Fund held 786,731 Burmah Castrol shares, representing
approximately 0.4 per cent of Burmah Castrol's issued share capital.
To the best of BP Amoco's knowledge and belief, and save as disclosed
herein, neither BP Amoco nor any director of BP Amoco, nor any person
acting in concert with BP Amoco, owns or controls any Burmah Castrol
shares or any options to purchase any Burmah Castrol shares.
Definitions used in this press announcement are set out in Appendix II.
11 Sources and bases of information
Unless otherwise stated, the financial results for the BP Amoco Group and
the Burmah Castrol Group have been derived from the preliminary results
published by the relevant company for the financial year ended 31
December, 1999.
The 1999 financial results for the BP Amoco Group in Part II have been
derived from the preliminary results published by BP Amoco for the
financial year ended 31 December, 1999, and from information to be
contained in the 1999 BP Amoco Group Annual Report, which is expected to
be published this week.
The value of the Offer referred to in Parts I and II of this press
announcement is based on 178,629,919 Burmah Castrol shares in issue as at
13 March 2000.
This press announcement does not constitute an offer or invitation to
purchase any securities or a solicitation of an offer to buy any
securities, pursuant to the Offer or otherwise.
The Offer will not be made directly or indirectly, in or into Canada,
Australia, Japan or New Zealand. The Offer will not be capable of
acceptance from within Canada, Australia, Japan or New Zealand and doing
so may render invalid any purported acceptance.
The Loan Notes have not been and will not be registered under the US
Securities Act of 1933, as amended, nor the securities laws of any state
of the United States nor under applicable securities laws of Canada,
Australia, Japan or New Zealand. The Loan Notes may not be offered, sold
or delivered, directly or indirectly, in or into the United States,
Canada, Australia, Japan or New Zealand except pursuant to exemptions
from applicable requirements of such jurisdictions.
The availability of the Offer or the Loan Note Alternative to Burmah
Castrol shareholders who are not resident in the United Kingdom may be
affected by the laws of the relevant jurisdictions. Burmah Castrol
shareholders who are not resident in the United Kingdom should inform
themselves about and observe any applicable requirements.
Morgan Stanley & Co. Limited, which is regulated in the United Kingdom by
The Securities and Futures Authority Limited, is acting for BP Amoco and
for no one else in connection with the Offer and will not be responsible
to anyone other than BP Amoco for providing the protections afforded to
customers of Morgan Stanley & Co. Limited nor for giving advice in
relation to the Offer.
J Henry Schroder & Co. Limited, which is regulated in the United Kingdom
by The Securities and Futures Authority Limited, is acting for Burmah
Castrol and for no one else in connection with the Offer and will not be
responsible to anyone other than Burmah Castrol for providing the
protections afforded to customers of J Henry Schroder & Co. Limited nor
for giving advice in relation to the Offer.
Wasserstein Perella & Co. Limited, which is regulated in the United
Kingdom by The Securities and Futures Authority Limited, is acting for
Burmah Castrol and for no one else in connection with the Offer and will
not be responsible to anyone other than Burmah Castrol for providing the
protections afforded to customers of Wasserstein Perella & Co. Limited
nor for giving advice in relation to the Offer.
APPENDIX I
Pre-conditions and Conditions of the Offer and Certain Further Terms of the
Offer
Pre-conditions of the Offer
The posting of the Offer Document will take place if the following pre-
conditions are satisfied or waived. If either of these pre-conditions has
not been satisfied or waived by the close of business (London time) on 13
September, 2000, the Offer will only be made with the agreement of BP Amoco,
Burmah Castrol and the Panel:
(a) insofar as the Offer constitutes a concentration with a Community
dimension within the scope of Council Regulation (EEC) 4064/89 (as
amended) the 'Regulation'):
(i) the European Commission having issued a decision under Article 6(1)(b)
or Article 8 (2) of the Regulation (or being deemed to have done so
under Article 10 (6) of the Regulation) declaring the merger
compatible with the common market without requiring any amendments,
assurances, conditions or undertakings which are not on terms
reasonably satisfactory to BP Amoco;
(ii) in the event that a request under Article 9(2) of the Regulation has
been made by a Member State and the European Commission has, in
accordance with Article 9(3) of the Regulation, referred the whole or
part of the proposed acquisition of Burmah Castrol by BP Amoco to the
competent authorities of one or more Member States or having been
deemed to have done so under Article 9(5), each such authority
granting a clearance without requiring any amendments, assurances,
conditions or undertakings which are not on terms reasonably
satisfactory to BP Amoco in respect of all those parts of the
proposed acquisition of Burmah Castrol by BP Amoco which were
referred to it, or being deemed to have granted such a clearance; and
the requirements of clause (a)(i) above being satisfied with respect
to any part not referred to the competent authority of any Member
State;
(b) all applicable waiting periods (including any extensions thereof) under
the United States Hart-Scott-Rodino Antitrust Improvements Act of 1976 and
the regulations thereunder having expired, lapsed or been terminated as
appropriate in each case in respect of the Offer and the proposed
acquisition of any Burmah Castrol shares or control of Burmah Castrol by
BP Amoco or any member of the BP Amoco Group.
Conditions of the Offer
The Offer will be conditional upon:
(c) valid acceptances being received (and not, where permitted, withdrawn) by
not later than 3.00 p.m. on the first closing date of the Offer (or such
later time(s) and/or date(s) as BP Amoco may, subject to the City Code,
decide) in respect of not less than 90 per cent. (or such lower percentage
as BP Amoco may decide) in nominal value of the Burmah Castrol shares to
which the Offer relates, provided that this condition shall not be
satisfied unless BP Amoco and/or any of its wholly-owned subsidiaries shall
have acquired or agreed to acquire, whether pursuant to the Offer or
otherwise, shares in Burmah Castrol carrying in aggregate more than 50 per
cent. of the voting rights then normally exercisable at general meetings of
Burmah Castrol. For the purposes of this condition:
(iii) shares which have been unconditionally allotted but not issued
shall be deemed to carry the voting rights they will carry upon issue;
(iv) the expression 'Burmah Castrol shares to which the Offer relates'
shall mean (i) Burmah Castrol shares issued or allotted on or before
the date the Offer is made and (ii) Burmah Castrol shares issued or
allotted after that date but before the time at which the Offer closes,
or such earlier date, not being earlier than the date on which the
Offer becomes unconditional as to acceptances or, if later, the first
closing date of the Offer, as BP Amoco may decide but excluding any
Burmah Castrol shares which, on the date the Offer is
made, are held or (otherwise than under such a contract as is
described in section 428(5) of the Companies Act 1985) contracted to be
acquired by BP Amoco and/or its associates (within the meaning of
section 430E of the Companies Act 1985);
(v) valid acceptances shall be treated as having been received in respect
of any Burmah Castrol shares which BP Amoco and its subsidiaries shall,
pursuant to section 429(8) of the Companies Act 1985, be treated as
having acquired or contracted to acquire by virtue of acceptance of the
Offer;
(d) in the event that pre-condition (a) above is waived, insofar as the Offer
constitutes a concentration with a Community dimension within the scope of
Council Regulation (EEC) 4064/89 (as amended) (the 'Regulation'):
(vi) the European Commission having issued a decision under Article
6(1)(b) of the Regulation (or being deemed to have done so under Article
10(6) of the Regulation) declaring the merger compatible with the common
market without requiring any amendments, assurances, conditions or
undertakings which are not on terms reasonably satisfactory to BP Amoco;
(vii) in the event that a request under Article 9(2) of the Regulation
has been made by a Member State other than the UK and the European
Commission has, in accordance with Article 9(3) of the Regulation,
referred the whole or part of the proposed acquisition of Burmah
Castrol by BP Amoco to the competent authorities of one or more Member
States or having been deemed to have done so under Article 9(5), each
such authority granting a clearance without requiring
any amendments, assurances, conditions or undertakings which are not
on terms reasonably satisfactory to BP Amoco in respect of all those
parts of the proposed acquisition of Burmah Castrol by BP Amoco which
were referred to it, or being deemed to have granted such a clearance;
and the requirements of clause (b)(i) above being satisfied with
respect to any part not referred to the competent authority of any
Member State;
(viii) in the event that a request under Article 9(2) of the Regulation
has been made by the United Kingdom and the European Commission has,
in accordance with Article 9(3) of the Regulation, referred the whole
or part of the proposed acquisition of Burmah Castrol by BP Amoco to
the United Kingdom for consideration under the Fair Trading Act 1973
(i) the Office of Fair Trading in the United Kingdom indicating, in
terms reasonably satisfactory to BP Amoco, that it is not the
intention of the Secretary of State for Trade and Industry to refer
the proposed acquisition of Burmah Castrol by BP Amoco or
any matter arising therefrom or related thereto, to the Competition
Commission or (ii) the Secretary of State for Trade and Industry
accepting an undertaking or undertakings in terms reasonably
satisfactory to BP Amoco pursuant to section 75(G) of the Fair
Trading Act 1973 (as amended) instead of referring
the proposed acquisition of Burmah Castrol by BP Amoco or any matter
arising therefrom or related thereto to the Competition Commission;
(e) in the event that pre-condition (b) above is waived, all applicable
waiting periods (including any extensions thereof) under the United States
Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the regulations
thereunder having expired, lapsed or been terminated as appropriate in
each case in respect of the Offer and the proposed acquisition of any
Burmah Castrol shares or control of Burmah Castrol by BP Amoco or any
member of the BP Amoco Group;
(f) except and to the extent disclosed (i) in the report and accounts of
Burmah Castrol for the year ended 31 December 1998 or (ii) in the Burmah
Castrol interim results for the six months ended 30 June 1999 or (iii) in
the Burmah Castrol preliminary results for the year ended 31 December 1999
or (iv) in an announcement to the Company Announcements Office of the
London Stock Exchange or (v) in writing to BP Amoco prior to the time of
this announcement by Burmah Castrol or Schroders in connection with the
Offer (together the 'Permitted Sources of Disclosure'), there being no
provision of any agreement, arrangement, licence, permit or other
instrument to which any member of the Wider Burmah Castrol Group is a party
or by or to which any such member of the Wider Burmah Castrol Group or any
of its assets may be bound, entitled or subject, which, in consequence of
the Offer or the proposed acquisition of any shares or other securities in
Burmah Castrol or because of a change in the control or management of
Burmah Castrol, would or might reasonably be expected, in each case to an
extent which is material and adverse in the context of the Burmah Castrol
Group taken as a whole, to result in:
(ix) any monies borrowed by or any other indebtedness (actual or
contingent) of, or grant available to, any such member being or becoming
repayable or capable of being declared repayable immediately or earlier than
its stated maturity date or repayment date or the ability of any such member
to borrow monies or incur any indebtedness being withdrawn or inhibited or
being capable of becoming or being withdrawn or inhibited;
(x) any such agreement, arrangement, licence, permit or instrument or the
rights, liabilities, obligations, interests or business of any member
of the Wider Burmah Castrol Group thereunder being terminated or adversely
modified or adversely affected or any adverse obligation or liability arising
or any action being taken or arising thereunder;
(xi) any assets or interests of any such member being or falling to be
disposed of or charged or any right arising under which any such asset or
interest could be required to be disposed of or charged;
(xii) the creation or enforcement of any mortgage, charge or other
security interest over the whole or any part of the business,
property or assets of any such member or any such security interest (whenever
arising or having arisen) becoming enforceable;
(xiii) the rights, liabilities, obligations or interests of any member
of the Wider Burmah Castrol Group in, or the business of any such member
with, any person, firm or body (or any arrangement or arrangements relating
to any such interest or business) being terminated, modified or affected;
(xiv) the value of any member of the Wider Burmah Castrol Group or its
financial or trading position or prospects being prejudiced or
adversely affected;
(xv) any member of the Wider Burmah Castrol Group ceasing to be able to
carry on business under any name under which it presently does so; or
(xvi) the creation of any liability, actual or contingent, by any such
member, and no event having occurred which, under any provision of any
agreement, arrangement, licence, permit or other instrument to which any
member of the Wider Burmah Castrol Group is a party or by or to which any such
member or any of its assets may be bound, entitled or subject would,
otherwise than in the ordinary course of business, result in any of the
events or circumstances referred to in sub-paragraphs (i) to (viii) of
this paragraph (d);
(g) no government or governmental, quasi-governmental, supranational,
statutory, regulatory, environmental or investigative body, court, trade
agency, association, institution or any other body or person whatsoever in
any jurisdiction (each a 'Third Party') having decided to take, institute,
implement or threaten any action, proceeding, suit, investigation, enquiry
or reference, or enacted, made or proposed any statute, regulation,
decision or order or having taken any other steps which would or might
reasonably be expected to:
(xvii) require, prevent or delay the divestiture or alter the terms
envisaged for any proposed divestiture by any member of the Wider BP
Amoco Group or any member of the Wider Burmah Castrol Group of all or any
material portion of their respective businesses, assets or property or impose
any material limitation on the ability of any of them to conduct their
respective businesses (or any of them) or to own any of their respective
assets or properties or any part thereof in any such case to an extent which
is material in the context of the Offer;
(xviii) require, prevent or delay the divestiture by any member of the
Wider BP Amoco Group of any shares or other securities in Burmah Castrol;
(xix) impose any material limitation on, or result in a material delay
in, the ability of any member of the Wider BP Amoco Group directly or
indirectly to acquire or to hold or to exercise effectively any rights of
ownership in respect of shares or loans or securities convertible into shares
or any other securities (or the equivalent) in any member of the Wider Burmah
Castrol Group or the Wider BP Amoco Group or to exercise management control
over any such member;
(xx) otherwise adversely affect the business, assets or profits of any
member of the Wider BP Amoco Group or of any member of the Wider Burmah
Castrol Group, in each case in a manner which is material in the context of
the Offer;
(xxi) make the Offer or its implementation or the acquisition or
proposed acquisition of any shares or other securities in, or control of,
Burmah Castrol by any member of the Wider BP Amoco Group void, illegal,
and/or unenforceable under the laws of any jurisdiction, or otherwise,
directly or indirectly, restrain, materially restrict, prohibit, materially
delay or otherwise interfere with the same, or impose additional conditions or
obligations with respect thereto, or otherwise challenge, hinder or
interfere therewith, in each such case in a manner which is material in the
context of the Offer;
(xxii) require any member of the Wider BP Amoco Group or the Wider
Burmah Castrol Group to offer to acquire any shares or other securities or
interest in any member of the Wider Burmah Castrol Group or the Wider BP Amoco
Group owned by any third party, in each such case in a manner which is
material in the context of the Offer;
(xxiii) impose any limitation on the ability of any member of the Wider
Burmah Castrol Group to co-ordinate its business, or any part of it,
with the businesses of any other member to an extent which is material in the
context of the Burmah Castrol Group taken as a whole; or
(xxiv) result in any member of the Wider Burmah Castrol Group ceasing
to be able to carry on business under any name which is material in the
context of the Burmah Castrol Group taken as a whole and under which it
presently does so;
(h) all applicable waiting and other time periods during which any such Third
Party could institute, implement or threaten any action, proceeding, suit,
investigation, enquiry or reference or any other step under the laws of
any jurisdiction having expired, lapsed or been terminated;
(i) all necessary filings or applications having been made in connection with
the Offer and all authorisations, orders, recognitions, grants, consents,
licences, confirmations, clearances, permissions and approvals necessary
for or in respect of the Offer or the proposed acquisition of any shares or
other securities in, or control of, Burmah Castrol or any member of the
Wider Burmah Castrol Group by any member of the BP Amoco Group, or which
are necessary for any member of the Wider Burmah Castrol Group to carry on
its business and are material to the Burmah Castrol Group, having been
obtained in terms and in a form satisfactory to BP Amoco from all
appropriate Third Parties or persons with whom any member of the Wider
Burmah Castrol Group has entered into contractual arrangements and all such
authorisations, orders, recognitions, grants, consents, licences,
confirmations, clearances, permissions and approvals remaining in full
force and effect at the time when the Offer becomes otherwise unconditional
and all filings necessary for such purpose having been made and no notice
or intimation of any intention to revoke or not to renew any of the same
having been received at the time at which the Offer becomes otherwise
unconditional in all respects and all necessary statutory or
regulatory obligations in connection with the Offer and its implementation
in any jurisdiction having been complied with;
(j) except and to the extent disclosed by any of the Permitted Sources of
Disclosure, no member of the Wider Burmah Castrol Group having, since 31
December, 1998:
(xxv) save as between Burmah Castrol and wholly-owned subsidiaries of
Burmah Castrol or for Burmah Castrol Shares issued pursuant to the
exercise of options granted or invitations made under the Burmah Castrol Share
Option Schemes prior to the time of this announcement, issued, authorised or
proposed the issue of additional shares of any class;
(xxvi) save as between Burmah Castrol and wholly-owned subsidiaries of
Burmah Castrol or for the grant of options under the Burmah Castrol
Share Option Schemes made prior to the time of this announcement, issued or
authorised or proposed the issue of securities convertible into shares of any
class or rights, warrants or options to subscribe for, or acquire, any such
shares or convertible securities;
(xxvii) other than to another member of the Burmah Castrol Group,
recommended, declared, paid or made or proposed to recommend,
declare, pay or make any bonus issue, dividend or other distribution whether
payable in cash or otherwise;
(xxviii) save for intra- Burmah Castrol Group transactions, merged with
or demerged from any body corporate or, in circumstances which are
material to the Burmah Castrol Group taken as a whole, acquired or disposed of
or transferred, mortgaged or charged or created any security interest
over any assets or any right, title or interest in any asset (including shares
and trade investments) or authorised or proposed or announced any
intention to propose any merger, demerger, acquisition or disposal, transfer,
mortgage, charge or security interest which is material (other than in the
ordinary course of business);
(xxix) save for intra-Burmah Castrol Group transactions, made or
authorised or proposed or announced an intention to propose any change in its
loan capital;
(xxx) issued, authorised or proposed the issue of any debentures or
(save for intra- Burmah Castrol Group transactions or indebtedness or
liabilities which are incurred in the ordinary course of business or which are
not material in the context of the Burmah Castrol Group taken as a whole)
incurred or increased any indebtedness or contingent liability or become
subject to any contingent liability;
(xxxi) purchased, redeemed or repaid or announced any proposal to
purchase, redeem or repay any of its own shares or other securities or reduced
or, save as excepted in (i) and (ii) above, made any other change to any part
of its share capital;
(xxxii) implemented, or authorised, proposed or announced its intention
to implement, any reconstruction, amalgamation, scheme or, to the extent
material in the context of the Burmah Castrol Group taken as a whole, any
contract, commitment or other transaction or arrangement otherwise than in the
ordinary course of business;
(xxxiii) entered into or materially varied or authorised, proposed or
announced its intention to enter into or so vary any contract, transaction or
commitment (whether in respect of capital expenditure or otherwise) which is
of a long-term, onerous or unusual nature or magnitude or which is or
might reasonably be expected to be materially restrictive to the businesses
of any member of the Wider Burmah Castrol Group or which involves or could
involve an obligation of such a nature or magnitude or which is other than in
the ordinary course of business and which is material in the context of
the Burmah Castrol Group taken as a whole;
(xxxiv) taken any corporate action or had any legal proceedings started
or threatened against it for its winding-up, dissolution or reorganisation or
for the appointment of a receiver, administrative receiver,
administrator, trustee or similar officer of all or any material part of its
assets or revenues or any analogous proceedings in any jurisdiction or had any
such person appointed;
(xxxv) entered into any contract, transaction or arrangement which
might reasonably be expected to be materially restrictive on the business
of any member of the Wider BP Amoco Group;
(xxxvi) made or agreed or consented to any significant change to the
terms of the trust deeds constituting the pension schemes established for
its directors and/or employees and/or their dependants or to the benefits
which accrue, or to the pensions which are payable thereunder, or to the
basis on which qualification for or accrual or entitlement to such benefits or
pensions are calculated or determined, or to the basis upon which the
liabilities (including pensions) of such pension schemes are funded or made, or
agreed or consented to any change to the trustees involving the appointment of
a trust corporation which change is material in the context of the Burmah
Castrol Group taken as a whole or is a change which, irrespective of
materiality, affects only, or disproportionately, the directors and senior
executives of Burmah Castrol;
(xxxvii) entered into or varied the material terms of any service
agreement or any other agreement or arrangement with any of the directors or
senior executives of any member of the Wider Burmah Castrol Group or any
connected person of any of such persons (within the meaning of section 346 of
the Companies Act 1985);
(xxxviii) waived or compromised any claim which is material in the context
of the Burmah Castrol Group taken as a whole; or
(xxxix) entered into any contract, commitment, arrangement or agreement
or passed any resolution or made any offer (which remains open for
acceptance) with respect to or announced any intention to, or to propose to,
effect any of the transactions, matters or events referred to in this condition
and, for the purposes of paragraphs (iii), (iv), (v) and (vi) of this condition,
the term 'Burmah Castrol Group' shall mean Burmah Castrol and its wholly-owned
subsidiaries;
(k) since 31 December, 1998, and except and to the extent disclosed by any of
the Permitted Sources of Disclosure:
(xl) no material adverse change or deterioration having occurred in the
business, assets, financial or trading position or profits of any
member of the Wider Burmah Castrol Group which is material in the context of
the Burmah Castrol Group taken as a whole and which has not been caused by the
Announcement or the Offer;
(xli) no litigation, arbitration proceedings, other form of dispute
resolution proceedings, prosecution or other legal proceedings to
which any member of the Wider Burmah Castrol Group is or may become a party
(whether as a plaintiff, defendant or otherwise and no investigation by any
Third Party against or in respect of any member of the Wider Burmah Castrol
Group having been instituted, threatened or announced by or against or remaining
outstanding in respect of any member of the Wider Burmah Castrol
group which in any such case might adversely affect any member of the Wider
Burmah Castrol Group to an extent which is material in the context of the Burmah
Castrol Group taken as a whole;
(xlii) no contingent or other liability having arisen or become
apparent to BP Amoco which might reasonably be expected adversely to affect any
member of the Wider Burmah Castrol Group to an extent which is material in the
context of the Burmah Castrol Group taken as a whole; and
(xliii) no steps having been taken which are likely to result in the
withdrawal, cancellation, termination or modification of any licence held by
any member of the Wider Burmah Castrol Group which is necessary for the proper
carrying on of its business and which is material in the context of the Burmah
Castrol Group taken as a whole.
(l) BP Amoco not having discovered except and to the extent disclosed by any
of the Permitted Sources of Disclosure :
(xliv) that any financial, business or other information concerning the
Wider Burmah Castrol Group as contained in the information which has
been disclosed at any time by or on behalf of any member of the Wider
Burmah Castrol Group is misleading, contains a misrepresentation of fact or
omits to state a fact necessary to make that information not misleading in
each case to an extent which is or might reasonably be expected to be material
and adverse in the context of the Burmah Castrol Group taken as a whole;
(xlv) that any member of the Wider Burmah Castrol Group or any other
partnership, company of other entity in which any member of the Wider
Burmah Castrol Group has a significant economic interest and which is not a
subsidiary undertaking of Burmah Castrol is subject to any liability
(contingent or otherwise) which is not disclosed in the Report and
Accounts of Burmah Castrol for the year ended 31 December, 1998 in each case
which might reasonably be expected adversely to affect such member or such
partnership, company or other entity to an extent which is material in the
context of the Burmah Castrol Group taken as a whole;
(xlvi) any information which affects the import of any information
disclosed at any time by or on behalf of any member of the Wider
Burmah Castrol Group in each case to an extent which is or might reasonably
be expected to be material in the context of the Burmah Castrol Group
taken as a whole;
(xlvii) that any past or present member of the Wider Burmah Castrol
Group has failed to comply with any and/or all applicable legislation or
regulations of any jurisdiction with regard to environmental matters including,
without limitation, the disposal, spillage, release, discharge, leak or
emission of any waste or hazardous substance or any substance likely to impair
the environment or harm human health or animal health, any of which
non-compliance may give rise to a liability or cost which is material in the
context of the Burmah Castrol Group;
(xlviii) that there has otherwise been any such disposal, spillage,
release, discharge, leak or emission (whether or not the same constituted a
non-compliance by any person with any such legislation or regulations,
and wherever the same may have taken place) any of which disposal,
spillage, release, discharge, leak or emission would be likely to give rise to
any liability (actual or contingent) or cost on the part of any member of
the Wider Burmah Castrol Group;
(xlix) that there is, or is likely to be, for that or any other reason
whatsoever, any liability (actual or contingent) of any past or
present member of the Wider Burmah Castrol Group to make good, repair, reinstate
or clean up any property or any controlled waters now or previously owned,
occupied, operated or made use of or controlled by or harmed, contaminated or in
any way affected by any such past or present member of the Wider Burmah Castrol
Group, under any environmental legislation, regulation, notice, circular or
order of any government, governmental, quasi-governmental, state or local
government, supranational, statutory or other regulatory body, agency, court,
association or any other person or body in any jurisdiction or any common law
liability (including, without limitation, contract); or
(l) that circumstances exist whereby a person or class of persons or any
entity or entities would be likely to have any claim or claims in
respect of any product, by-product or process or materials used or existing now
or previously sold or carried out by or in any way dealt with or handled
by or resulting from, or from any activity of, any past or present member
of the Wider Burmah Castrol Group or predecessor of any member of the Wider
Burmah Castrol Group which claim or claims would be likely to give rise to
any liability (whether actual or contingent) of any member of the Wider
Burmah Castrol Group which, in each of cases (iv), (v), (vi) and (vii), is
or might reasonably be expected to be material in the context of the Burmah
Castrol Group taken as a whole.
For the purposes of these conditions the 'Wider Burmah Castrol Group' means
Burmah Castrol and its subsidiary undertakings, associated undertakings and
any other undertaking in which Burmah Castrol and/or such undertakings
(aggregating their interests) have a significant interest and the 'Wider BP
Amoco Group' means BP Amoco and its subsidiary undertakings, associated
undertakings and any other undertaking in which BP Amoco and/or such
undertakings (aggregating their interests) have a significant interest and for
these purposes 'subsidiary undertaking', 'associated undertaking' and
'undertaking' have the meanings given by the Companies Act 1985, other than
paragraph 20(1)(b) of Schedule 4A to that Act which shall be excluded for this
purpose, and 'significant interest' means an interest in 10 per cent. or more
of the equity share capital (as defined in the Act).
BP Amoco reserves the right to waive, in whole or in part, all or any of the
above conditions, except condition (a). If BP Amoco is required to make an
offer for Burmah Castrol shares under the provisions of Rule 9 of the City
Code, BP Amoco may make such alterations to any of the above conditions as are
necessary to comply with the provisions of that Rule.
Conditions (b) to (j) (inclusive) must be fulfilled or waived, by midnight on
the 21st day after the date on which condition (a) is fulfilled (or in each
case such later time(s) and/or date(s) as the Panel may agree). Save as set
out below, under the heading 'Certain further terms of the Offer', BP Amoco
shall be under no obligation to waive or treat as satisfied any of the
conditions (b) to (j) (inclusive) by a date earlier than the latest date
specified above for the satisfaction thereof, notwithstanding that the other
conditions of the Offer may at such earlier date have been waived or fulfilled
and that there are at such earlier date no circumstances indicating that any
of such conditions may not be capable of fulfilment.
In the event that pre-condition (a) above is waived, the Offer will lapse if
the European Commission initiates proceedings under Article 6(1)(c) of Council
Regulation (EEC) 4064/89 on the basis that it raises serious doubts as to its
compatibility with the common market or it is referred to the Competition
Commission following a reference back by the European Commission to a
competent authority in the United Kingdom under Article 9 of Council
Regulation (EEC) 4064/89, in either case before 3.00 p.m. on the first closing
date of the Offer or the date on which the Offer becomes or is declared
unconditional as to acceptances, whichever is the later.
Certain further terms of the Offer
The formal Offer Document will be posted as soon as reasonably practicable
following satisfaction or waiver of the pre-conditions set out in Appendix I
(regulatory clearances). The first closing date of the Offer will be 20
Business Days following the date on which the Offer document is posted to
Burmah Castrol shareholders.
Unless BP Amoco, Burmah Castrol and the Panel agree otherwise, BP Amoco will
declare the Offer unconditional as to acceptances no later than the first
closing date for the Offer provided condition (a) in Appendix I (the
acceptance condition) is capable of being satisfied. If such condition is not
capable of being satisfied by such date and the Offer is extended, BP Amoco
will declare the Offer unconditional as to acceptances as soon as condition
(a) in Appendix 1 becomes capable of being satisfied, unless BP Amoco, Burmah
Castrol and the Panel agree otherwise.
Unless BP Amoco, Burmah Castrol and the Panel agree otherwise, BP Amoco will
waive all conditions, other than conditions (b) and (c) in Appendix I
(regulatory clearances), once the Offer is unconditional as to acceptances.
BP Amoco will not invoke condition (i)(i) in Appendix I (no material adverse
change) later than 109 days after the date of this Announcement, unless there
is a material adverse change, within the terms of condition (i)(i), which has
been caused by the failure of the management of Burmah Castrol to properly
perform its normal management duties.
If the Offer is not made by 13 September, 2000, because either of the pre-
conditions in Appendix I is not satisfied or waived or if the Offer is made by
13 September, 2000 but lapses or is withdrawn because either of conditions (b)
or (c) in Appendix I are not satisfied or waived, BP Amoco will pay Burmah
Castrol an amount equal to £45 million. If the Board of directors of Burmah
Castrol ceases to unanimously recommend the Offer, Burmah Castrol shall pay BP
Amoco an amount equal to £30 million.
Any Burmah Castrol shareholders on the register at the close of business on 1
October 2000, the date which Burmah Castrol has agreed with BP Amoco will be
the record date for the Burmah Castrol interim dividend for 2000, will be
entitled to receive that dividend, which will be paid on or immediately after
the record date. Burmah Castrol has agreed with BP Amoco that its interim
dividend for 2000, which will not be announced before 1 September, will not
exceed 26 pence per share.
The Offer, which will be made by Morgan Stanley Dean Witter on behalf of BP
Amoco, will comply with the rules and regulations of the London Stock Exchange
and the City Code and will be governed by English law.
APPENDIX II
(a) Definitions
(b) The following definitions apply throughout this announcement unless the
context requires otherwise:
BP Amoco or the Company BP Amoco p.l.c.
BP Amoco Group BP Amoco and its subsidiary
undertakings and, where
the context admits, each
of them
Burmah Castrol Burmah Castrol plc
Burmah Castrol Group Burmah Castrol and its
subsidiary undertakings
and, where the context
admits, each of them
Burmah Castrol Share Option the Burmah Castrol Sharesave
Schemes Scheme, the Burmah
International Sharesave
Scheme, the Burmah Stock
Appreciation Unit Plan,
the Burmah Castrol
Executive Share Option
Scheme, the Burmah
Castrol 1995 Sharesave
Scheme, the Burmah
Castrol Plc 1995
International Sharesave
Scheme, the Burmah
Castrol 1995 Executive
Stock Unit Scheme and
the Burmah Castrol 1995
Executive Share Option
Scheme
Burmah Castrol shareholders holders of Burmah Castrol
shares
Burmah Castrol shares ordinary shares of 42 pence
each in Burmah Castrol
Business Day a day on which banks are open
for business in London
and New York (excluding
Saturdays, Sundays,
federal and public
holidays)
City Code The City Code on Take-overs
and Mergers
Closing Price the middle-market quotation
of a Burmah Castrol
share at the close of
business on a particular
trading day as derived
from the Daily Official
List of the London Stock
Exchange
Form of Acceptance the form of acceptance,
authority and election
relating to the Offer
which shall accompany
the Offer Document
Loan Notes the unsecured loan notes to
be issued by BP Amoco
pursuant to the Loan
Note Alternative, having
the rights and being
subject to the
restrictions to be set
out in the Loan Note
instrument
Loan Note Alternative the right of eligible Burmah
Castrol shareholders who
validly accept the Offer
to elect to receive Loan
Notes instead of all or
part of the cash to
which they would
otherwise have been
entitled under the Offer
London Stock Exchange London Stock Exchange Limited
Morgan Stanley Dean Witter Morgan Stanley & Co. Limited
Offer the recommended offer to be
made by Morgan Stanley
Dean Witter on behalf of
BP Amoco to acquire all
of the issued and to be
issued Burmah Castrol
shares, including where
the context permits, any
subsequent revision,
variation, extension or
renewal of such Offer
Offer Document the document to be dispatched
to Burmah Castrol
shareholders containing
the full terms and
conditions of the Offer
Panel The Panel on Take-overs and
Mergers
Schroders J Henry Schroder & Co.
Limited
United States or US United States of America, its
territories and possessions
and the District of Columbia
and all other areas subject
to its jurisdiction
US person a US person as defined in
Regulation S under the
US Securities Act 1933,
as amended
Wasserstein Perella Wasserstein Perella & Co.
Limited
Throughout this announcement an exchange rate of £1 = $1.579 (being the
exchange rate quoted in the Financial Times on 13 March, 2000) has been used
for illustrative purposes only.
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