Offer for Sterling Industries Goes Unconditional
Caledonia Investments PLC
17 January 2000
CALEDONIA INVESTMENTS BID VALUING STERLING INDUSTRIES AT £97 MILLION
GOES WHOLLY UNCONDITIONAL
Caledonia Investments plc ('Caledonia'), the diversified trading and
investment company with a range of subsidiaries and associates and a
portfolio of strategic and general investments, has today announced
that it has declared wholly unconditional its offer for those issued
ordinary shares in Sterling Industries PLC ('Sterling') not already
owned ('Offer').
Background to and reasons for the Offer
There has been a long association between the two companies and the
Caledonia group has held a substantial shareholding (27.21 percent at
the time of its Offer) in Sterling since 1989. In addition, The Cayzer
Trust Company Ltd, a major shareholder in Caledonia, held 45.44
percent of Sterling. These holdings had contributed to very low levels
of liquidity in Sterling shares. Furthermore, one of Sterling's
principal assets was its 9.59 percent shareholding in Caledonia. The
boards of both Caledonia and Sterling became increasingly of the view
that these cross-shareholdings were not helping the share price of
either company to reflect its underlying value and concluded that an
agreed offer by Caledonia for Sterling represented the best way to
resolve this situation.
The recommended Offer by Caledonia to acquire the 72.79 percent of the
issued ordinary shares in Sterling that it did not already own was
announced on 25 November 1999.
Value of the Offer
On the basis of Caledonia's middle market share price (net of
Caledonia's interim dividend of 7.5 pence) of 740 pence on 25 November
1999, the Offer (including the interim and special dividends totalling
48 pence per Sterling ordinary share) amounted to £71 million, valuing
the whole of Sterling at £97 million.
Results of the Offer
As at 3 p.m. on 14 January 2000, Caledonia had received valid
acceptances in respect of a total of 20,628,563 Sterling ordinary
shares, representing 67.92 percent of Sterling's issued ordinary share
capital. When added to the 8,265,450 Sterling ordinary shares already
held by the Caledonia group, Caledonia now either owns, or has
received valid acceptances in respect of, a total of 28,894,013
Sterling ordinary shares representing 95.13 percent of Sterling's
total issued ordinary share capital.
Caledonia intends to apply the provisions of sections 428 to 430F of
the Companies Act 1985 to acquire compulsorily the remaining Sterling
ordinary shares and also to seek the cancellation of Sterling's Stock
Exchange listing.
Caledonia has also today declared its offer for Sterling's preference
shares wholly unconditional.
Peter Buckley, Chairman and Chief Executive of Caledonia
Investments plc, commented:
'We are delighted with the results of the recommended offer
for Sterling. It had become clear to us that Sterling's small
market float and ownership structure was not helping the share
prices of either Sterling or Caledonia, and the time had come
for the cross-shareholdings to be unwound.
'We believe that Sterling's interesting niche engineering
businesses offer good prospects in the medium term and that
the scope for exploiting their potential will be enhanced by
bringing the company fully into the Caledonia group.'
Enquires: Peter Buckley, Chairman and Chief Executive
Caledonia Investments plc Tel: 020 7481 4343
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