Offer for Alfred McAlpine plc
Carillion PLC
10 December 2007
10 December 2007
PART I
CARILLION PLC
RECOMMENDED SHARES AND CASH ACQUISITION
OF
ALFRED MCALPINE PLC
The Boards of Carillion and Alfred McAlpine are pleased to announce that
agreement has been reached on the terms of a recommended proposal whereby
Carillion will acquire, for shares and cash, the entire issued and to be issued
ordinary share capital of Alfred McAlpine.
Highlights
* Recommended shares and cash Acquisition valuing each Alfred McAlpine Share at
558 pence
* Consideration for each Alfred McAlpine Share is 1.08 New Carillion Shares
valued at 392.3 pence (based on the Closing Price of 363.25 pence per
Carillion Share on 7 December 2007, the last Business Day before this
announcement) and 165.4 pence in cash, with a Mix and Match Facility and Loan
Notes available
* Values Alfred McAlpine's existing issued ordinary share capital at
approximately £572 million
* Creates one of the UK's largest support services and construction companies
with an aggregate revenue of approximately £4.7 billion and combines two
companies with an excellent strategic fit
- potential to deliver significant value for both Carillion and Alfred
McAlpine Shareholders by generating significant cost synergy benefits and
enhancing operational performance
- creates a leading support services group serving both public and private
sector customers
- enhanced capability to provide integrated solutions due to the
complementary skills of Carillion and Alfred McAlpine in private finance,
design, construction, maintenance and support services
- Alfred McAlpine's construction business will fit with Carillion's skills
and resources and the businesses will together continue to target higher
margin projects
- creates enhanced positions in a wide range of UK growth markets
- enhances management resources, particularly the number of people
available with the skills required to support Carillion's major growth
opportunities in the Middle East
* Expected to achieve an annual running rate of cost savings of £30 million by
the end of 2009 (the first full year after completion of the Acquisition) and
to deliver materially enhanced earnings in that year (see Note 1)
* Acquisition price of 558 pence represents a premium of approximately:-
- 24 per cent. to the Closing Price of 448.5 pence for each Alfred McAlpine
Share on 1 August 2007, the last Business Day prior to the announcement
of demerger plans by Alfred McAlpine; and
- 5 per cent. to the Closing Price of 532.0 pence per Alfred McAlpine Share
on 15 October 2007, the last Business Day prior to Alfred McAlpine
announcing that it had received an approach from Carillion
* Holders of New Carillion Shares following completion of the Acquisition will
receive the Carillion final dividend for the year to 31 December 2007
* Irrevocable undertakings have been received from Alfred McAlpine Directors
and letters of intent have been received from Alfred McAlpine Shareholders in
respect of 308,488 Alfred McAlpine Shares and 18,045,264 Alfred McAlpine
Shares respectively, representing, in aggregate, approximately 17.9 per cent.
of the existing issued ordinary share capital of Alfred McAlpine
* It is intended that the Acquisition will be effected by way of a scheme of
arrangement of Alfred McAlpine, although Carillion reserves the right in its
absolute discretion to implement the Acquisition by way of an Offer, subject
(if required) to agreement with the Panel
* Carillion also announces expected growth in underlying earnings per share
(see Note 2) in 2007 of at least 20 per cent. compared to 2006 (see Note 3)
and the Carillion Board expects the Carillion Group's strong momentum to
continue in 2008 and over the medium term
Commenting on the Acquisition, Philip Rogerson, Chairman of Carillion said:
'The acquisition of Alfred McAlpine represents a further step in Carillion's
development and its successful strategy for sustainable and profitable growth.
There is an excellent strategic fit between the two companies and the combined
group will be one of the UK's leading support services businesses with enhanced
capabilities in providing integrated solutions and construction services. We are
confident this transaction can deliver significant value for the shareholders of
the Enlarged Group.'
Commenting on the Acquisition, Roger Urwin, Chairman of Alfred McAlpine said:
'Over the past five years we have repositioned Alfred McAlpine into a valuable
support services group, with leading positions in a number of growth markets.
Carillion's offer recognises this value and gives our shareholders, employees
and customers the opportunity to share in the future success of the Enlarged
Group.'
Lazard is acting as financial adviser to Carillion. Morgan Stanley and Oriel
Securities are acting as joint corporate brokers to Carillion.
JPMorgan Cazenove and Tricorn Partners are acting as joint financial advisers to
Alfred McAlpine. JPMorgan Cazenove is also acting as corporate broker to Alfred
McAlpine.
This summary should be read in conjunction with, and is subject to, the full
text of the announcement set out in Part II. In particular, the Acquisition is
subject to the conditions set out in Appendix I to this announcement. Certain
information relating to the Profit Forecast is included in Appendix II to this
announcement. The bases and sources of certain financial information contained
in this announcement are set out in Appendix III. Certain definitions and terms
used in this announcement are set out in Appendix IV.
Notes: (1) The anticipated operational cost savings have been calculated on the
basis of the existing cost and operating structures of the Carillion and
Alfred McAlpine Groups. These statements of estimated cost savings and
one-off costs for achieving them relate to future actions and
circumstances which, by their nature, involve risks, uncertainties and
other factors. As a result, the cost savings referred to may not be
achieved, or those achieved could be materially different from those
estimated.
The statement that the Acquisition is expected to deliver materially
enhanced earnings for Carillion in 2009 (the first full year following
completion of the Acquisition) relates to future actions and
circumstances, which, by their nature, involve risks, uncertainties and
other factors.
These statements do not constitute a profit forecast and should not be
interpreted to mean that earnings for that year or any subsequent
financial period would necessarily match or be greater than those for any
preceding financial period.
(2) Before intangible amortisation, goodwill impairment, restructuring
costs and non-operating items.
(3) Carillion has agreed with the Panel's ruling that this statement
represents a profit forecast (the 'Profit Forecast') for the purpose of
Rule 28 of the City Code. As such it is a requirement that this statement
should be reported on by Carillion's auditors and financial advisers in
accordance with Rule 28 of the City Code. These reports and the basis and
principal assumptions underlying the Profit Forecast are included in
Appendix II to this announcement.
A presentation for analysts will be held at 9.30 a.m. at City Presentation
Centre, 4 Chiswell Street, Finsbury Square, London, EC1Y 4UP.
Enquiries
Carillion
Carillion plc +44 (0)1902 316426
John McDonough, Group Chief Executive
Richard Adam, Group Finance Director
John Denning, Director, Group Corporate Affairs
Lazard (Financial Adviser) +44 (0)20 7187 2000
Peter Warner
Vasco Litchfield
Morgan Stanley (Joint Corporate Broker) +44 (0)20 7425 8000
Peter Moorhouse
Robin Tennent
Oriel Securities (Joint Corporate Broker) +44 (0)20 7710 7600
Simon Bragg
David Arch
Maitland (PR Adviser) +44 (0)20 7379 5151
Angus Maitland
Alfred McAlpine
Alfred McAlpine plc +44 (0)20 7357 9477
Ian Grice, Group Chief Executive
Mark Greenwood, Group Finance Director
JPMorgan Cazenove (Joint Financial Adviser and Corporate
Broker) +44 (0)20 7588 2828
Edmund Byers
Dwayne Lysaght
Tricorn Partners (Joint Financial Adviser) +44 (0)20 7823 0888
Guy Dawson
Andrew McNaught
Hogarth Partnership (PR Adviser) +44 (0)20 7357 9477
James Longfield
Rachel Hirst
Lazard, which is authorised and regulated in the United Kingdom by the Financial
Services Authority, is acting exclusively for Carillion and no one else in
connection with the Acquisition and this announcement and will not be
responsible to anyone other than Carillion for providing the protections
afforded to clients of Lazard nor for providing advice in connection with the
Acquisition or this announcement or any matter referred to herein.
JPMorgan Cazenove, which is authorised and regulated in the United Kingdom by
the Financial Services Authority, is acting exclusively for Alfred McAlpine and
no one else in connection with the Acquisition and this announcement and will
not be responsible to anyone other than Alfred McAlpine for providing the
protections afforded to clients of JPMorgan Cazenove nor for providing advice in
connection with the Acquisition or this announcement or any matter referred to
herein.
Tricorn Partners, which is authorised and regulated in the United Kingdom by the
Financial Services Authority, is acting exclusively for Alfred McAlpine and no
one else in connection with the Acquisition and this announcement and will not
be responsible to anyone other than Alfred McAlpine for providing the
protections afforded to clients of Tricorn Partners nor for providing advice in
connection with the Acquisition or this announcement or any matter referred to
herein.
Morgan Stanley, which is authorised and regulated in the United Kingdom by the
Financial Services Authority, is acting exclusively for Carillion and no one
else in connection with the Acquisition and this announcement and will not be
responsible to anyone other than Carillion for providing the protections
afforded to clients of Morgan Stanley nor for providing advice in connection
with the Acquisition or this announcement or any matter referred to herein.
Oriel Securities, which is authorised and regulated in the United Kingdom by the
Financial Services Authority, is acting exclusively for Carillion and no one
else in connection with the Acquisition and this announcement and will not be
responsible to anyone other than Carillion for providing the protections
afforded to clients of Oriel Securities nor for providing advice in connection
with the Acquisition or this announcement or any matter referred to herein.
Dealing Disclosure Requirements
Under the provisions of Rule 8.3 of the City Code, if any person is, or becomes,
'interested' (directly or indirectly) in 1% or more of any class of 'relevant
securities' of Carillion or of Alfred McAlpine, all 'dealings' in any 'relevant
securities' of that company (including by means of an option in respect of, or a
derivative referenced to, any such 'relevant securities') must be publicly
disclosed by no later than 3.30pm (London time) on the London business day
following the date of the relevant transaction. This requirement will continue
until the Scheme becomes Effective, lapses or is otherwise withdrawn or on which
the 'offer period' otherwise ends (or, if Carillion elects to effect the
Acquisition by way of an Offer, until the date on which the Offer becomes, or is
declared, unconditional as to acceptances, lapses or is otherwise withdrawn or
on which the 'offer period' otherwise ends). If two or more persons act together
pursuant to an agreement or understanding, whether formal or informal, to
acquire an 'interest' in 'relevant securities' of Carillion or Alfred McAlpine,
they will be deemed to be a single person for the purpose of Rule 8.3.
Under the provisions of Rule 8.1 of the City Code, all 'dealings' in 'relevant
securities' of Carillion or Alfred McAlpine by Carillion or Alfred McAlpine, or
by any of their respective 'associates' must be disclosed by no later than 12.00
noon (London time) on the London business day following the date of the relevant
transaction.
A disclosure table, giving details of the companies in whose 'relevant
securities' 'dealings' should be disclosed, and the number of such securities in
issue, can be found on the Panel's website at www.thetakeoverpanel.org.uk.
'Interests in securities' arise, in summary, when a person has long economic
exposure, whether conditional or absolute, to changes in the price of
securities. In particular, a person will be treated as having an 'interest' by
virtue of the 'ownership' or control of securities, or by virtue of any option
in respect of, or derivative referenced to, securities.
Terms in quotation marks are defined in the City Code, which can also be found
on the Panel's website. If you are in any doubt as to whether or not you are
required to disclose a 'dealing' under Rule 8, you should consult the Panel.
Overseas Jurisdictions
The release, publication or distribution of this announcement in jurisdictions
other than the United Kingdom may be restricted by law and therefore any persons
who are subject to the laws of any jurisdiction other than the United Kingdom
should inform themselves about, and observe, any applicable requirements. This
announcement has been prepared for the purposes of complying with English law
and the City Code and the information disclosed may not be the same as that
which would have been disclosed if this announcement had been prepared in
accordance with the laws and regulations of any jurisdiction outside of England.
This announcement is not intended to, and does not constitute, or form part of,
an offer to sell or any invitation to purchase or subscribe for any securities
or a solicitation of any vote or approval in any jurisdiction. This announcement
does not constitute a prospectus or a prospectus equivalent document.
Shareholders of Carillion and Alfred McAlpine are advised to read carefully the
formal documentation in relation to the Acquisition once it has been despatched.
The proposals of the Acquisition will be made solely through the Scheme
Document, which will contain the full terms and conditions of the Scheme,
including details of how to vote with respect to the Scheme. Any acceptance or
other response to the proposals should be made only on the basis of the
information in the Scheme Document. Alfred McAlpine Shareholders may obtain a
further free copy of the Scheme Document, when it becomes available, from CMS
Cameron McKenna LLP at Mitre House, 160 Aldersgate Street, London EC1A 4DD.
In particular, this announcement is not an offer of securities for sale in the
United States and the New Carillion Shares, which will be issued in connection
with the Acquisition, have not been, and will not be, registered under the US
Securities Act or under the securities law of any state, district or other
jurisdiction of the United States, Australia, Canada or Japan and no regulatory
clearance in respect of the New Carillion Shares has been, or will be, applied
for in any jurisdiction other than the UK. The New Carillion Shares may not be
offered, sold, or, delivered, directly or indirectly, in, into or from the
United States absent registration under the US Securities Act or an exemption
from registration The New Carillion Shares may not be offered, sold, resold,
delivered or distributed, directly or indirectly, in, into or from Canada,
Australia or Japan or to, or for the account or benefit of, any resident of
Australia, Canada or Japan absent an exemption from registration or an exemption
under relevant securities law. It is expected that the New Carillion Shares will
be issued in reliance upon the exemption from the registration requirements of
the US Securities Act provided by Section 3(a)(10) thereof. Under applicable US
securities laws, persons (whether or not US persons) who are or will be
'affiliates' within the meaning of the US Securities Act of Alfred McAlpine or
Carillion prior to, or of Carillion after, the Effective Date will be subject to
certain transfer restrictions relating to the New Carillion Shares received in
connection with the Scheme.
Notice to US Investors in Alfred McAlpine: The Acquisition relates to the shares
of a UK company and is proposed to be made by means of a scheme of arrangement
provided for under the laws of England and Wales. The Acquisition is subject to
the disclosure requirements and practices applicable in the United Kingdom to
schemes of arrangement, which differ from the disclosure and other requirements
of US securities laws. Financial information included in the relevant
documentation will have been prepared in accordance with accounting standards
applicable in the United Kingdom that may not be comparable to the financial
statements of US companies.
If the Acquisition is implemented by way of an Offer, it will be made in
accordance with the procedural and filing requirements of the US securities
laws, to the extent applicable. If the Acquisition is implemented by way of an
Offer, the New Carillion Shares to be issued in connection with such offer will
not be registered under the US Securities Act or under the securities laws of
any state, district or other jurisdiction of the United States and may not be
offered, sold or delivered, directly or indirectly, in the United States except
pursuant to an applicable exemption from, or in a transaction not subject to,
the registration requirements of the US Securities Act or such other securities
laws. Carillion does not intend to register any such New Carillion Shares or
part thereof in the United States or to conduct a public offering of the New
Carillion Shares in the United States.
Unless Carillion otherwise determines, relevant clearances and registrations
have not been, nor will they be, sought or obtained, nor have any steps been
taken, nor will any steps be taken, to enable the Loan Notes to be publicly
offered in compliance with applicable securities laws of any jurisdiction. The
Loan Notes have not been, nor will they be, registered under the US Securities
Act or under the securities laws of any state, district or other jurisdiction of
the United States and the Loan Notes are not being offered in, and may not be
transferred into, the United States. Accordingly, Scheme Shareholders in the
United States will not be eligible to receive Loan Notes. The Loan Notes may not
(subject to certain limited exceptions) be offered, sold, transferred or
delivered, directly or indirectly, in any other jurisdiction (including, without
limitation, in Australia, Canada or Japan) where to do so would violate the laws
of that jurisdiction or would require registration thereof in such jurisdiction.
Forward Looking Statements
This announcement contains statements about Carillion and Alfred McAlpine that
are or may be forward looking statements. All statements other than statements
of historical facts included in this announcement may be forward looking
statements. Without limitation, any statements preceded or followed by or that
include the words 'targets', 'plans', 'believes', 'expects', 'aims',' intends',
'will', 'may', 'anticipates', 'estimates', 'projects' or, words or terms of
similar substance or the negative thereof, are forward looking statements.
Forward looking statements include statements relating to the following: (i)
future capital expenditures, expenses, revenues, earnings, synergies, economic
performance, indebtedness, financial condition, dividend policy, losses and
future prospects; (ii) business and management strategies and the expansion and
growth of Carillion's or Alfred McAlpine's operations and potential synergies
resulting from the Acquisition; and (iii) the effects of government regulation
on Carillion's or Alfred McAlpine's business.
Such forward looking statements involve risks and uncertainties that could
significantly affect expected results and are based on certain key assumptions.
Many factors could cause actual results to differ materially from those
projected or implied in any forward looking statements. Due to such
uncertainties and risks, readers are cautioned not to place undue reliance on
such forward looking statements, which speak only as of the date hereof.
Carillion and Alfred McAlpine disclaim any obligation to update any forward
looking or other statements contained herein, except as required by applicable
law.
10 December 2007
PART II
CARILLION PLC
RECOMMENDED SHARES AND CASH ACQUISITION
OF
ALFRED MCALPINE PLC
1. Introduction
The Boards of Carillion and Alfred McAlpine are pleased to announce that
agreement has been reached on the terms of a recommended proposal whereby
Carillion will acquire, for shares and cash, the entire issued and to be issued
ordinary share capital of Alfred McAlpine.
The terms of the Acquisition value each Alfred McAlpine Share at 558 pence and
Alfred McAlpine's existing issued ordinary share capital at approximately £572
million.
It is currently intended that the Acquisition will be implemented by way of a
scheme of arrangement pursuant to section 425 of the Companies Act 1985,
although Carillion reserves the right, in its sole discretion and subject (if
required) to agreement with the Panel, to implement the Acquisition by way of an
Offer for the entire issued and to be issued ordinary share capital of Alfred
McAlpine and to make appropriate amendments to the terms of the Acquisition
arising from the change to an Offer. Subject to the satisfaction or, where
appropriate, waiver of the Conditions, it is expected that the Acquisition will
become effective during the first quarter of 2008.
2. Terms of the Acquisition
Under the terms of the Scheme, which will be subject to the Conditions and
further terms set out in Appendix I to this announcement and the full terms and
conditions that will be set out in the Scheme Document, Alfred McAlpine
Shareholders will be entitled to receive:
for each Alfred McAlpine Share 1.08 New Carillion Shares
and 165.4 pence in cash
and so in proportion for any number of Alfred McAlpine Shares held.
Based on the Closing Price of 363.25 pence per Carillion Share on 7 December
2007, the last Business Day before this announcement, this entitlement
represents 392.3 pence in New Carillion Shares plus 165.4 pence in cash.
A Mix and Match Facility will also be made available pursuant to which Alfred
McAlpine Shareholders (other than certain Overseas Persons) may, subject to
availability, elect to vary the proportions in which they receive New Carillion
Shares and cash in respect of their holdings of Alfred McAlpine Shares. Further
details of the Mix and Match Facility are set out in paragraph 11 below.
A Loan Note Alternative will be made available to Alfred McAlpine Shareholders
(other than certain Overseas Persons and Scheme Shareholders in the United
States) enabling them to take Loan Notes instead of all or part of the cash to
which they would otherwise be entitled, including any additional cash
consideration to which they become entitled as a result of an election under the
Mix and Match Facility. Further details of the Loan Note Alternative are set out
in paragraph 12 below.
Assuming a maximum number of 113.7 million New Carillion Shares will be issued
pursuant to the Acquisition, Alfred McAlpine Shareholders will hold Carillion
Shares representing approximately 29 per cent. of the issued share capital of
the Enlarged Group. In addition, Alfred McAlpine Shareholders will have received
cash consideration, in aggregate, of approximately £174 million.
Based on the Closing Price of 363.25 pence per Carillion Share on 7 December
2007, being the last Business Day before this announcement, the Acquisition
values each Alfred McAlpine Share at approximately 558 pence and the existing
issued ordinary share capital of Alfred McAlpine at approximately £572 million.
These terms represent a premium of approximately:
* 24 per cent. to the Closing Price of 448.5 pence per Alfred McAlpine Share on
1 August 2007, the last Business Day prior to the day that Alfred McAlpine
announced that it was planning to undertake a demerger; and
* 5 per cent. to the Closing Price of 532.0 pence per Alfred McAlpine Share on
15 October 2007, being the last Business Day before the day Alfred McAlpine
announced that it had received an approach from Carillion.
Fractions of New Carillion Shares will not be allotted or issued pursuant to the
Scheme. Fractional entitlements to New Carillion Shares will be aggregated and
sold in the market and the net proceeds of sale will be distributed pro rata to
persons entitled thereto.
Upon the Scheme becoming Effective:
* the Scheme Shares will be cancelled and in their place new ordinary shares in
the capital of Alfred McAlpine will be issued to Carillion, whereupon Alfred
McAlpine will become a private limited company and a wholly-owned subsidiary
of Carillion;
* the New Carillion Shares and/or cash and/or Loan Notes due to each Alfred
McAlpine Shareholder pursuant to the Scheme will be paid or issued to such
Alfred McAlpine Shareholder within 14 days of the Effective Date; and
* the New Carillion Shares will be issued credited as fully paid and will rank
pari passu in all respects with the Carillion Shares in issue at the time the
New Carillion Shares are issued pursuant to the Acquisition, including the
right to receive and retain dividends and other distributions declared, made
or paid by reference to a record date falling after the Effective Date.
3. Recommendation
The Alfred McAlpine Directors, who have been so advised by JPMorgan Cazenove and
Tricorn Partners, consider the terms of the Acquisition to be fair and
reasonable. In providing their advice to the Alfred McAlpine Directors, JPMorgan
Cazenove and Tricorn Partners have taken into account the commercial assessments
of the Alfred McAlpine Directors.
Accordingly, the Alfred McAlpine Directors intend unanimously to recommend that
Alfred McAlpine Shareholders vote in favour of the resolutions to be proposed at
the Scheme Meeting and the Alfred McAlpine Extraordinary General Meeting, as
they have irrevocably undertaken to do in respect of their own respective
beneficial holdings, amounting in aggregate to 308,488 Alfred McAlpine Shares,
representing approximately 0.3 per cent. of Alfred McAlpine's existing issued
ordinary share capital.
4. Background to, and reasons for, the Acquisition
Carillion believes that the Acquisition will create significant value for its
shareholders by bringing together two companies with an excellent strategic fit
and complementary skills, particularly in support services. The Acquisition will
create one of the largest support services and construction companies in the UK,
with a combined turnover of approximately £4.7 billion.
The Acquisition is consistent with Carillion's strategic objective of seeking to
deliver sustainable, profitable growth through:
* growing support services organically and by acquisition;
* maintaining and further enhancing a strong and selective construction
capability focused on higher added value contracts for longer term customers;
and
* developing and marketing integrated solutions tailored to the needs of
customers.
The acquisition of Alfred McAlpine is another important step in accelerating
Carillion's strategy for growth. It is also expected to generate significant
cost synergies (see Note 8, Appendix III). Carillion is confident that the
Acquisition will produce attractive returns for shareholders in excess of
Carillion's cost of capital. Furthermore, Carillion believes that the
Acquisition will deliver materially enhanced earnings in 2009, the first full
year after completion of the Acquisition (see Note 9, Appendix III).
Support services
The Enlarged Group will benefit from significantly enhanced capabilities and
positions in a number of support services markets with strong growth dynamics.
With combined pro forma annual revenue from support services of approximately
£2.3 billion, it will also be one of the largest suppliers of support services
in the UK.
The Enlarged Group will have a broader range of skills and capabilities,
strengthening its integrated services offering across a wide range of UK growth
markets. The Acquisition will combine the complementary strengths of Carillion
and Alfred McAlpine in a number of growth support services sectors for public
and private sector customers. For example, Carillion has strong positions in the
education, health, defence and transport infrastructure sectors, and in the
financial services, telecommunications and insurance sectors. Alfred McAlpine is
a substantial supplier of support services to private sector companies, with
leading positions in the financial services and retail sectors. It also has a
strong position in road maintenance.
Through the Acquisition, Alfred McAlpine's consultancy business, which includes
the recently acquired Enviros business, should benefit from the opportunity to
offer its services to a larger client base. Together with Carillion's TPS, the
enlarged consultancy business will be able to offer a broader spectrum of
consultancy services.
A further cross-selling opportunity exists with Alfred McAlpine's IT services
business, which currently provides IT services to, among other customers, BAE
Systems.
With the addition of Alfred McAlpine's Utility Services business, Carillion will
enter a new market as one of the leading providers in the sector, with the
opportunity to develop Alfred McAlpine's current services into a higher margin
business.
Construction services
The construction services activities of Carillion and Alfred McAlpine will have
a combined pro forma annual turnover of approximately £2.3 billion and together
will be a leading business in the UK construction services market.
Alfred McAlpine's construction business will fit with Carillion's skills and
resources and the businesses will together continue to target higher margin
projects.
In the UK road infrastructure services market, Carillion's position as a major
supplier of integrated solutions for the Highways Agency will be enhanced
through Alfred McAlpine's ECI contracts as well as its strong relationship with
Local Authorities.
The combination of Carillion and Alfred McAlpine will also enhance the Group's
management resources. In particular, there will be a significant increase in the
number of people with the skills required to take advantage of the major
opportunity Carillion has in the Middle East, which will continue to be one of
the Enlarged Group's key areas of focus given its significant growth potential.
Integrated solutions
Developing and marketing integrated solutions are key parts of Carillion's
strategy for growth. The Acquisition will increase Carillion's capability in
providing integrated solutions through combining the capabilities the Enlarged
Group will have in project finance, design, construction, maintenance and
facilities management and services to provide life-time asset management
solutions.
Synergies
In addition to the expected strategic benefits of the Acquisition referred to
above, there is the potential to generate significant synergy benefits.
Carillion believes it can achieve an annual running rate of operating cost
savings in the Enlarged Group of £30 million by the end of 2009 (see Note 8,
Appendix III), which will broadly equal the one-off costs of delivering those
savings. Within its existing business, and through the integration of Mowlem,
Carillion has already demonstrated that it can make substantial overheads
savings in areas such as head offices, regional offices, management and
back-office services. In addition, Carillion believes there will be
opportunities to generate supply chain savings.
In addition to the above cost savings, Carillion also believes that the
Acquisition will create a number of cross-selling opportunities within the
Enlarged Group and generate revenue synergies in areas such as facilities
management, M&E maintenance, vehicle fleet management, consultancy, IT services
and the recruitment and supply of operational personnel.
5. Background to, and reasons for, recommending the Acquisition
The Board of Alfred McAlpine believes that the combination of Alfred McAlpine
and Carillion will create a leading support services company. The Enlarged Group
is well placed to take advantage of large growth markets which are driven by the
continuing trend to outsource the maintenance and management of buildings and by
the high level of investment required to develop and renew the health, leisure
and education facilities and transport and utility infrastructures in its chosen
markets. The Board of Alfred McAlpine believes that Carillion provides a strong
fit for both its Business Services and the Infrastructure Services / Project
Services businesses. The Acquisition will provide significant opportunities for
growth which will benefit all Alfred McAlpine stakeholders. The Acquisition also
represents an attractive realisation of value today for Alfred McAlpine
Shareholders and is an excellent opportunity for Alfred McAlpine Shareholders
both to realise cash and to continue to participate in the future success of
Alfred McAlpine within the Enlarged Group.
6. Irrevocable undertakings
Alfred McAlpine Directors who also hold Scheme Shares have irrevocably
undertaken to vote such Scheme Shares (in aggregate, 308,488 Alfred McAlpine
Shares, representing approximately 0.3 per cent. of the existing issued ordinary
share capital of Alfred McAlpine) in favour of the Acquisition and the Scheme at
the Scheme Meeting and the Alfred McAlpine Extraordinary General Meeting. Such
Alfred McAlpine Directors have also undertaken that, if following this
announcement, Carillion decides to implement the Acquisition by means of an
Offer instead of by way of the Scheme, they will accept such Offer in respect of
their Scheme Shares.
Of the Alfred McAlpine Directors, only Robert Hough is interested in Alfred
McAlpine Preference Shares. Robert Hough is the beneficial owner of 6,000 Alfred
McAlpine Preference Shares which he has irrevocably undertaken to vote in favour
of the Capital Reduction at the Alfred McAlpine Extraordinary General Meeting.
Carillion has received non-binding letters of intent over 17.6 per cent. of
Alfred McAlpine's issued ordinary share capital from Schroder Investment
Management Limited, New Star Asset Management Limited and Audley Capital to
accept an offer by Carillion. The letters will lapse if the formal documentation
relating to the Scheme (or Offer in the event Carillion decides to implement the
Acquisition by means of an Offer instead of a Scheme) has not been posted by 16
January 2008. The letters will also cease to apply to shares which are disposed
of by the holder. The letters of intent relate to 9,901,571 Alfred McAlpine
Shares held by Schroder Investment Management Limited, 3,511,830 Alfred McAlpine
Shares held by New Star Asset Management Limited and 4,631,863 Alfred McAlpine
Shares held by Audley Capital, in each case on their own behalf and on behalf of
discretionary clients.
Accordingly, Carillion has received irrevocable undertakings and letters of
intent on the terms set out above in respect of 308,488 Alfred McAlpine Shares
and 18,045,264 Alfred McAlpine Shares respectively, representing, in aggregate,
approximately 17.9 per cent. of Alfred McAlpine's existing issued ordinary share
capital.
7. Information on Carillion
Carillion was launched and listed on the London Stock Exchange as an independent
company in 1999, following its demerger from Tarmac. In 1999, Carillion was
predominantly a construction company. Today, Carillion generates around half of
its revenue and over two-thirds of its profit from support services and equity
investments in PPP projects. Changing its business mix and introducing rigorous
new risk management procedures have significantly improved the risk profile of
the company's activities and the predictability of its earnings.
Carillion reports its financial results in the following three segments in which
it groups together activities of a similar type and risk profile in order to
make it easier to value its earnings on a consistent basis:
* Support services: facilities management and services, rail infrastructure,
road maintenance, consultancy and other support services;
* Construction Services: UK building, civil engineering, developments and
international construction; and
* Investments: equity returns on investments in PPP projects and management
thereof.
Carillion's portfolio includes a wide range of high-profile services and
projects in the UK and overseas. Its portfolio of PPP projects includes schools,
universities, hospitals, roads, prisons and defence projects, the largest of
which being the Allenby Connaught project for the Ministry of Defence, which
involves the replacement and management of Army accommodation in the South of
England. Carillion also provides extensive facilities management services for
other parts of the Ministry of Defence estate, NHS hospitals, schools and other
government and commercial property, including some 7,000 properties for British
Telecom. It has also upgraded large sections of the UK rail network such as the
West Coast Mainline and constructed the M6 Toll motorway. It maintains a
substantial proportion of the UK motorway network, including the M25 and
sections of the M40 and M11, together with a number of local authority road
networks.
In the Middle East, Carillion has substantial and rapidly growing joint venture
businesses engaged on a number of major construction projects, such as the
multi-billion pound Dubai Festival City development, and also has a growing
facilities management business. In Canada, Carillion has completed two of the
first PPP hospitals in Ontario, which are now fully operational, is building its
third PPP hospital and maintains a substantial proportion of the road network in
Ontario.
As at 7 December 2007 (the last Business Day before the date of this
announcement), Carillion had a market capitalisation of approximately £1,022
million. In the year to 31 December 2006, Carillion generated revenues
(including its share of joint ventures) of £3.6 billion, profit on ordinary
activities before tax, goodwill amortisation and exceptional items of £82.9
million, and as at 31 December 2006 had net assets of £434 million and gross
assets of £2,062 million. In the six months to 30 June 2007, Carillion generated
revenues (including its share of joint ventures) of £1,929 million, profit on
ordinary activities before tax, amortisation and exceptional items of £34.3
million, and as at 30 June 2007 had net assets of £476 million and gross assets
of £1,970 million. At that date, the Carillion Directors valued Carillion's
portfolio of PPP investments at £277 million.
8. Current trading
Carillion has continued to build on its strong first-half performance and, as
previously announced, the Board expects the Carillion Group to deliver
materially enhanced earnings in 2007. The Board now expects that this will
represent growth in underlying earnings per share (see Note 11, Appendix III)
from continuing operations in 2007 of at least 20 per cent. compared to 2006
(see Note 12, Appendix III).
As indicated, the successful integration of Mowlem has created a stronger and
more resilient business, well positioned in a wide range of growth markets. In
addition, it will also generate integration cost savings at the previously
announced running rate of £26 million a year by the end of 2007, well ahead of
the £15 million a year originally expected at the time of the Mowlem
acquisition.
Average net debt in 2007 is expected to be below £150 million, reflecting
continuing strong cash management. Following the sale of Pall Mall Holdings and
Sovereign Soft Services in September 2007, net debt at 31 December 2007 is now
expected to be below £80 million.
Trading conditions in Carillion's main market sectors have remained strong,
enabling the Carillion Group to continue to focus on growing revenue in support
services, at stable operating margins of between 4 and 5 per cent., and on
enhancing operating margins in construction services with the objective of
moving them towards 3 per cent. over the next three years.
Carillion's order book at 31 December 2007 is expected to be stable and in the
region of £15.7 billion (December 2006: £16.0 billion). The pipeline of probable
new orders is expected to increase significantly to over £3.3 billion (December
2006: £1.6 billion), reflecting, in particular, the progress Carillion is making
in the Middle East.
Carillion's businesses in the Middle East continue to make very strong progress
and given the magnitude of probable new orders in this region the Carillion
Board now believes that the Carillion Group's share of revenues from these
businesses is likely to more than double to around £600 million within three
years, rather than the five years previously announced, at margins of around 6
per cent.
The Carillion Group has been successful in agreeing with the tax authorities
certain prior year tax issues and a mechanism for the use of certain tax losses
acquired with Mowlem in 2007 and in future years. Consequently, the Carillion
Group's effective tax rate for 2007 is likely to reduce to around 25 per cent.,
which is reflected in the Carillion Group's earnings growth.
In addition, with the outlook in the Carillion Group's main UK and international
market sectors forecast to remain positive, the Board expects the Carillion
Group's strong momentum to continue in 2008 and over the medium term.
9. Information on Alfred McAlpine
Alfred McAlpine is a leading support services company and its business is
focused on providing services to the built environment. Alfred McAlpine
develops, finances, designs, builds, manages and maintains the buildings and
infrastructure that enable individuals and organisations to carry out their
business.
During the first half of 2007, Alfred McAlpine undertook a comprehensive review
to determine the best way to maximise shareholder value during the next stage in
the group's development. The review produced two fundamental conclusions, namely
that the group's PFI investments and Slate business should be sold and that the
remaining core businesses should be demerged to create two separate listed
companies (Business Services and Infrastructure Services / Project Services).
Demerger preparations were being made until the announcements by Carillion and
Alfred McAlpine on 2 November 2007.
On 5 November 2007 Alfred McAlpine announced that it had reached agreement to
sell its equity and subordinated loan stock interests in six PFI concessions
operating within the roads, schools and healthcare sectors to Infrastructure
Investors Limited Partnership ('I2') for £52.2 million cash (of which £4.9
million is conditional).
Alfred McAlpine is continuing to progress its planned disposal of the Slate
Business.
Alfred McAlpine has the following four business segments for reporting purposes:
* Business Services: a leading provider of facilities management services,
working with clients to develop, manage and deliver solutions that improve
the performance and quality of their built environment assets and reduce
operating costs. The business is founded on engineering and project
management expertise and provides business critical support, with an emphasis
on proactive and preventative facilities and asset management through service
helpdesks and engineering service centres. These services are complemented by
hard facilities management services, such as mechanical and electrical
engineering and fabric maintenance, and by consultancy services, such as
environmental, energy and waste management consultancy and health and safety
compliance management. This range of added value services enables Alfred
McAlpine to offer total facilities management solutions for the built
environment;
* Infrastructure Services: focused on providing maintenance and renewal
services to the utilities and highways maintenance sectors, where clients
continue to seek to reduce costs and improve delivery through outsourcing;
* Project Services: comprises construction services and investment and land-led
development businesses. It provides building and civil engineering services
to local and national government, to commercial developers and to the health,
education and leisure sectors. It also manages the development, financing,
construction and maintenance of long-term assets;
* Slate: the Slate Business is one of the world's major producers of natural
slate. It manufactures a comprehensive range of roofing slate together with a
wide range of other dimensional slate products for building, construction and
architectural applications. It operates the Penrhyn , Blaenau Ffestiniog and
Cwt-y-Bugail quarries in North Wales and also operates from its American
operation at Hilltop Slate Inc.
For the year ended 31 December 2006, Alfred McAlpine generated turnover
(including its share of joint ventures) of £1.1 billion, profit on ordinary
activities before tax, goodwill amortisation and operating exceptional items of
£27.0 million, and as at 31 December 2006 had net assets of £263 million and
gross assets of £662 million. In the six months to 30 June 2007, Alfred McAlpine
generated turnover (including its share of joint ventures) of £0.6 billion,
profit on ordinary activities before tax, goodwill amortisation and operating
exceptional items of £12.7 million and at 30 June 2007 had net assets of £279
million and gross assets of £700 million.
10. Implementation agreement
Carillion and Alfred McAlpine have entered into the Implementation Agreement in
relation to the Acquisition which governs their relationship during the period
until the Acquisition becomes Effective or lapses. The parties have agreed,
amongst other things, to co-operate with regard to the process of implementing
the Acquisition. The agreement also contains certain assurances and
confirmations between the parties (including terms regarding the conduct of the
business of the Alfred McAlpine Group pending completion of the Acquisition and
in relation to certain non-solicitation undertakings by Alfred McAlpine).
The Implementation Agreement will terminate in certain circumstances, including
if the Acquisition lapses or the Scheme or the Acquisition is not approved at
the Scheme Meeting or the Alfred McAlpine Extraordinary General Meeting or the
Carillion Extraordinary General Meeting.
Break fee arrangement
Alfred McAlpine has agreed to pay Carillion a break fee of £5,718,323 (being an
amount equal to one per cent. of the value of Alfred McAlpine calculated by
reference to the terms of the Acquisition as at the date of this announcement)
(together with any amount payable in respect of any VAT but only to the extent
that any such VAT is recoverable by Alfred McAlpine or the representative member
of Alfred McAlpine's VAT group) if (i) a third party transaction (being an
alternative to the Acquisition) is announced and subsequently that or another
such third party transaction becomes or is declared unconditional in all
respects or is completed; or (ii) the Alfred McAlpine Shareholders do not
approve the Acquisition at the Scheme Meeting and the Alfred McAlpine
Extraordinary General Meeting. Carillion has also agreed to pay Alfred McAlpine
a reciprocal break fee of £5,718,323 (together with any amount payable in
respect of any VAT but only to the extent that any such VAT is recoverable by
Carillion or the representative member of Carillion's VAT group) if the
Carillion Shareholders do not approve the Acquisition at the Carillion
Extraordinary General Meeting.
11. Terms of the Mix and Match Facility
Alfred McAlpine Shareholders (other than certain Overseas Persons) will be
entitled to elect, subject to availability, to vary the proportions in which
they receive New Carillion Shares and cash in respect of their holdings of
Alfred McAlpine Shares. However, the total number of New Carillion Shares to be
issued and the maximum aggregate amount of cash to be paid under the Scheme will
not be varied as a result of elections under the Mix and Match Facility.
Accordingly, elections made by Alfred McAlpine Shareholders under the Mix and
Match Facility will only be satisfied to the extent that other Alfred McAlpine
Shareholders make off-setting elections. Satisfaction of elections under the Mix
and Match Facility will be effected on the basis of the price of a Carillion
Share at the time the Scheme Document is despatched and will be confirmed in
that document. To the extent that elections cannot be satisfied in full, they
will be scaled down on a pro rata basis. As a result, Alfred McAlpine
Shareholders who make an election under the Mix and Match Facility will not know
the exact number of New Carillion Shares or the amount of cash they will receive
until settlement of the consideration due to them in respect of the Acquisition.
The Mix and Match Facility is conditional upon the Acquisition becoming
Effective and further details on the Mix and Match Facility will be included in
the Scheme Document.
12. The Loan Note Alternative
A Loan Note Alternative will be made available to Alfred McAlpine Shareholders
(other than certain Overseas Persons and Scheme Shareholders in the United
States) enabling them to take Loan Notes instead of all or part of the cash to
which they would otherwise be entitled, including cash entitlements under the
Mix and Match Facility. The Loan Note Alternative will be made available on the
basis of £1 nominal value of Loan Notes for every £1 of cash which a Alfred
McAlpine Shareholder would otherwise be entitled to receive under the
Acquisition.
The Loan Notes will be governed by English law and will be issued, credited as
fully paid, in integral multiples of £1 nominal value. All fractional
entitlements to the Loan Notes will be disregarded and will not be issued. The
Loan Notes will not be transferable other than to privileged relations and
family trusts and no application will be made for them to be listed or dealt in
on any stock exchange. The Loan Notes will not be qualifying corporate bonds.
The Loan Notes will bear interest from the date of issue to the relevant holder
of the Loan Notes at a rate per annum of 50 basis points below sterling LIBOR.
Interest will be payable by half-yearly instalments in arrears (less any tax
required by law to be withheld or deducted therefrom) on 31 March and 30
September in each year (or, if such date is not a Business Day, on the first
Business Day thereafter). The Loan Notes will be redeemable at par (together
with accrued interest less any tax required by law to be withheld or deducted
therefrom) in whole or in part, for cash at the option of the noteholders on 30
September 2008 and subsequently semi-annually on 31 March and 30 September in
each year (or, if such date is not a Business Day, on the first Business Day
thereafter). In certain circumstances, Carillion will have the right to redeem
all of the Loan Notes. If not previously redeemed, the final redemption date
will be the next interest payment date following the fifth anniversary of the
date on which the Loan Notes are issued.
If at any time after 31 March 2009, the outstanding nominal amount of Loan Notes
equals or is less than 10 per cent. of the total amount of Loan Notes issued,
Carillion will be entitled to redeem all of the then outstanding Loan Notes.
The Loan Notes have not been, nor will they be, registered under the US
Securities Act or under the securities laws of any state, district or other
jurisdiction of the United States and the Loan Notes are not being offered in,
and may not be transferred into, the United States. Accordingly, Scheme
Shareholders in the United States will not be eligible to elect to receive Loan
Notes.
The Loan Note Alternative will be conditional upon the Acquisition becoming
Effective. Full details of the Loan Note Alternative will be contained in the
Scheme Document and the appropriate form of election. The Loan Notes are not
being offered to persons in the United States or any other jurisdiction where
the sale, issue or transfer of the Loan Notes would be a contravention of
applicable law.
13. Financial effects of the Acquisition
The cash consideration payable to Alfred McAlpine Shareholders pursuant to the
Acquisition will be provided by Carillion from its recently enlarged debt
facility provided by its existing relationship banks.
Lazard is satisfied that sufficient resources are available to Carillion to
satisfy in full the cash consideration payable pursuant to the Acquisition.
Further information on the financing of the Acquisition will be set out in the
Scheme Document.
Carillion currently expects that net debt of the Enlarged Group will be around
£300 million by 31 December 2008.
In accordance with its normal practice, Carillion intends to take a prudent view
of fair value adjustments and this review is ongoing.
14. The New Carillion Shares
The New Carillion Shares to be issued pursuant to the Acquisition will be
ordinary shares of 50 pence each in the capital of Carillion. The New Carillion
Shares will be issued in registered form, will be capable of being held in both
certificated and uncertificated form, will be issued credited as fully paid and
will rank pari passu in all respects with the existing Carillion Shares. The New
Carillion Shares will carry the right to Carillion's final dividend in respect
of the year to 31 December 2007.
15. Dividend policy
The Board's policy on dividends is to increase returns to Carillion Shareholders
progressively over time, reflecting the underlying performance of the Carillion
Group and the cash flow requirements of the business. Carillion intends to
maintain its existing dividend policy following completion of the Acquisition.
16. Management and employees of Alfred McAlpine
Carillion attaches great importance to the skills and experience of the existing
management and employees of Alfred McAlpine. Carillion believes that the
Enlarged Group's prospects for growth should lead to increased employment
opportunities.
The Board of Carillion has also given assurances to the Alfred McAlpine
Directors that, following the Acquisition becoming Effective, the existing
contractual employment rights, including pension rights, of all employees of the
Alfred McAlpine Group will be fully safeguarded.
17. Disclosure of Interests in Alfred McAlpine
Save for the arrangements with Alfred McAlpine Shareholders in relation to
irrevocable undertakings summarised in paragraph 6 above, as at the close of
business on 7 December 2007, being the latest practicable date prior to the date
of this announcement, neither Carillion nor any Carillion Director nor, so far
as Carillion is aware, any person acting in concert with Carillion, owns or
controls any Alfred McAlpine Shares or any securities convertible or
exchangeable into, or any rights to subscribe for or purchase, or any options
(including traded options) to purchase or any short positions (whether
conditional or absolute and whether in the money or otherwise and including
under a derivative), agreement to sell, delivery obligation or right to require
another person to take delivery of or any derivatives referenced to Alfred
McAlpine Shares nor does any such person have any arrangement in relation to
Alfred McAlpine Shares. For these purposes, 'arrangement' includes any indemnity
or option arrangement, any agreement or understanding, formal or informal, of
whatever nature, relating to Alfred McAlpine Shares which may be an inducement
to deal or refrain from dealing in such Alfred McAlpine Shares.
18. Alfred McAlpine Share Schemes
The Acquisition will, as described in paragraph 2 above, extend to all Alfred
McAlpine Shares issued upon the exercise of the options and/or the vesting of
awards under the Alfred McAlpine Share Schemes before the Scheme becomes
Effective. Appropriate proposals will be made in due course to participants in
the Alfred McAlpine Share Schemes.
19. Pensions
The latest valuation of the Alfred McAlpine Pension Plan was carried out as at
31 December 2005. Following that valuation, Alfred McAlpine and the Alfred
McAlpine Trustee concluded a recovery plan to meet the Alfred McAlpine Pension
Plan's statutory funding objective, as required by the Pensions Act 2004. This
recovery plan was designed to remove the deficit in funding revealed by the
valuation by 31 December 2015. Under the recovery plan Alfred McAlpine agreed to
make cash contributions to the Alfred McAlpine Pension Plan of (i) £6.6 million
in 2006; (ii) £6.6 million in 2007; (iii) £8.5 million in 2008; and (iv) £9.2
million plus the increase in RPI over the previous year in 2009. In the years
from 2010 to 2015, Alfred McAlpine agreed to make contributions equal to the
prior year contribution plus the increase in RPI over the preceding 12 months.
£4 million was contributed in 2006 with the remainder of the 2006 commitment and
£6.1 million of the 2007 commitment contributed so far in 2007. Carillion has
held a preliminary discussion with the Alfred McAlpine Trustee concerning the
Alfred McAlpine pension scheme.
20. Alfred McAlpine Preference Shares
Carillion expects to make proposals in respect of the Alfred McAlpine Preference
Shares in due course.
21. Settlement, listing and dealing of New Carillion Shares
Applications will be made to the UK Listing Authority and to the London Stock
Exchange for the New Carillion Shares to be issued in connection with the
Acquisition to be admitted to the Official List and to trading on the London
Stock Exchange's main market for listed securities. It is expected that
admission of the New Carillion Shares to the Official List and to trading on the
London Stock Exchange's main market for listed securities will become effective,
and that dealings for normal settlement in the New Carillion Shares will
commence, on the date on which the Scheme becomes Effective.
The existing Carillion Shares are already admitted to CREST. It is expected that
all of the New Carillion Shares, when issued and fully paid, will be capable of
being held and transferred by means of CREST. It is expected that the New
Carillion Shares will trade under ISIN GB0007365546.
Further details on listing, dealing and settlement will be included in the
Scheme Document.
22. Implementation of the Scheme and cancellation of listing
It is intended that the Acquisition will be effected by means of a scheme of
arrangement between Alfred McAlpine and the Scheme Shareholders under section
425 of the Companies Act 1985. The procedure involves an application by Alfred
McAlpine to the Court to sanction the Scheme and confirm the Capital Reduction.
In consideration for the cancellation of their Alfred McAlpine Shares, Alfred
McAlpine Shareholders, who are Scheme Shareholders, will receive cash, Loan
Notes and/or New Carillion Shares as outlined in paragraph 2 above. Following
the implementation of the Scheme, Alfred McAlpine will become a private limited,
wholly-owned subsidiary of Carillion.
Carillion and Alfred McAlpine have agreed that Carillion may, if it so
determines in its absolute discretion, implement the Acquisition by making an
Offer for the entire issued and to be issued ordinary share capital of Alfred
McAlpine. The Directors of Alfred McAlpine have confirmed that, in the event
that Carillion determines to implement the Acquisition by way of an Offer,
subject to such Offer representing in the reasonable opinion of Lazard, JPMorgan
Cazenove and Tricorn Partners, no diminution in the value of the consideration
offered under the terms set out in this announcement, the Alfred McAlpine
Directors will recommend, on a unanimous and unqualified basis, that Alfred
McAlpine Shareholders accept the Offer except to the extent that the Alfred
McAlpine Directors determine in good faith (having taken appropriate legal and
financial advice) that such unanimous and unqualified recommendation should not
be given or should be withdrawn or modified in compliance with their fiduciary
duties.
The Acquisition will be subject to, among other things, the Conditions set out
in Appendix I to this announcement, including approval by Alfred McAlpine
Shareholders by the passing of a resolution at a meeting of the Alfred McAlpine
Shareholders convened by the order of the Court pursuant to section 425 of the
Companies Act to consider and, if thought fit, approve the Scheme with or
without any modification thereof (and any adjournment thereof). This resolution
must be approved by a majority in number of the holders of Alfred McAlpine
Shares (other than members of the Carillion Group, if relevant) present and
voting, either in person or by proxy, at the Scheme Meeting, representing not
less than three-fourths in value of the Alfred McAlpine Shares held by such
holders. The Scheme must also be sanctioned by the Court and the associated
Capital Reduction must be confirmed by the Court, in each case at the relevant
Court Hearings.
In addition, the implementation of the Scheme will require separate approval by
the passing of special resolutions at the Alfred McAlpine Extraordinary General
Meeting, inter alia, to:
* authorise the Alfred McAlpine Directors to take such action as they consider
necessary or appropriate to effect the Scheme;
* reclassify and subsequently cancel any existing Alfred McAlpine Shares (other
than Alfred McAlpine Shares already held by Carillion (if any)) and approve
the issue of new ordinary shares in Alfred McAlpine to Carillion (and/or its
nominee(s)) in accordance with the Scheme; and
* amend the Alfred McAlpine articles of association to ensure that the Alfred
McAlpine Shares issued under the Alfred McAlpine Share Schemes will be
subject to the Scheme or, if issued following the Reorganisation Record Time,
will be automatically transferred to Carillion on the same terms as under the
Scheme.
The Alfred McAlpine Extraordinary General Meeting will be held directly after
the Scheme Meeting.
If the Scheme becomes Effective, it will be binding on all Scheme Shareholders
irrespective of whether or not they attend or vote in favour of the Scheme at
the Scheme Meeting or in favour of the special resolutions to be proposed at the
Alfred McAlpine Extraordinary General Meeting. Prior to the Scheme becoming
Effective, Carillion intends to apply to the Financial Services Authority for
the listing of Alfred McAlpine Shares to be cancelled and to the London Stock
Exchange for the Alfred McAlpine Shares to cease to be admitted to trading on
the London Stock Exchange's market for listed securities. This will take effect
on the Effective Date. As part of the Acquisition, it is intended that Alfred
McAlpine be re-registered as a private company on the Effective Date.
23. Carillion Shareholder Approval
As a result of the size of the transaction, the Acquisition constitutes a Class
1 transaction (as defined in the Listing Rules) for Carillion. Accordingly,
Carillion will be required to seek the approval of its shareholders for the
Acquisition at the Carillion Extraordinary General Meeting. Carillion will
prepare and send to its shareholders, as soon as is reasonably practicable, an
explanatory circular summarising the background to and reasons for the
Acquisition (which will include a notice convening the Carillion Extraordinary
General Meeting). The Acquisition will be conditional on, among other things,
the requisite resolution being passed by the Carillion Shareholders at the
Carillion Extraordinary General Meeting.
Carillion will also be required to publish the Prospectus in connection with the
issue of the New Carillion Shares. The Prospectus will contain information
relating to, amongst other things, the Enlarged Group and the New Carillion
Shares.
24. Overseas Persons
The availability of New Carillion Shares and the Loan Notes under the terms of
the Acquisition to persons not resident in the United Kingdom may be affected by
the laws of the relevant jurisdiction. Such persons should inform themselves
about and observe any applicable requirements. Further details in relation to
Overseas Persons will be contained in the Scheme Document.
25. General
The formal documentation setting out the details of the Acquisition, including
the Scheme Document setting out the procedures to be followed to approve the
Scheme, with the forms of proxy for use in connection with the Scheme Meeting
and the Alfred McAlpine Extraordinary General Meeting and the form of election
under which Alfred McAlpine Shareholders can elect for varying proportions of
cash, Loan Notes and New Carillion Shares under the Mix and Match Facility and
the Loan Note Alternative, together with the Prospectus relating to Carillion
and the New Carillion Shares, will be posted to Alfred McAlpine Shareholders
and, for information only, to participants in the Alfred McAlpine Share Schemes
as soon as is reasonably practicable and, in any event within 28 days of the
date of this announcement (or such later date as Carillion and Alfred McAlpine
may, with the consent of the Panel, agree).
With the consent of the Panel, there may be a short delay in posting the Scheme
Document to Alfred McAlpine Shareholders. The Scheme Document will be posted by
16 January 2008 at the latest (except where the Panel otherwise consent to any
further delay).
At the same time as these documents are sent to Alfred McAlpine Shareholders,
the Prospectus and the Carillion Shareholder Circular convening the Carillion
Extraordinary General Meeting will be sent to Carillion Shareholders.
The Scheme Document will include full details of the Scheme, together with
notices of the Court Meeting and the Alfred McAlpine Extraordinary General
Meeting and the expected timetable, and will specify the necessary action to be
taken by the Scheme Shareholders.
The sources and bases of information set out in this announcement are contained
in Appendix III. The definitions of certain expressions used in this
announcement are contained in Appendix IV.
Enquiries
Carillion
Carillion plc +44 (0)1902 316426
John McDonough, Group Chief Executive
Richard Adam, Group Finance Director
John Denning, Director, Group Corporate Affairs
Lazard (Financial Adviser) +44 (0)20 7187 2000
Peter Warner
Vasco Litchfield
Morgan Stanley (Joint Corporate Broker) +44 (0)20 7425 8000
Peter Moorhouse
Robin Tennent
Oriel Securities (Joint Corporate Broker) +44 (0)20 7710 7600
Simon Bragg
David Arch
Maitland (PR Adviser) +44 (0)20 7379 5151
Angus Maitland
Alfred McAlpine
Alfred McAlpine plc +44 (0)20 7357 9477
Ian Grice, Group Chief Executive
Mark Greenwood, Group Finance Director
JPMorgan Cazenove (Joint Financial Adviser and Corporate
Broker) +44 (0)20 7588 2828
Edmund Byers
Dwayne Lysaght
Tricorn Partners (Joint Financial Adviser) +44 (0)20 7823 0888
Guy Dawson
Andrew McNaught
Hogarth Partnership (PR Adviser) +44 (0)20 7357 9477
James Longfield
Rachel Hirst
Lazard, which is authorised and regulated in the United Kingdom by the Financial
Services Authority, is acting exclusively for Carillion and no one else in
connection with the Acquisition and this announcement and will not be
responsible to anyone other than Carillion for providing the protections
afforded to clients of Lazard nor for providing advice in connection with the
Acquisition or this announcement or any matter referred to herein.
JPMorgan Cazenove, which is authorised and regulated in the United Kingdom by
the Financial Services Authority, is acting exclusively for Alfred McAlpine and
no one else in connection with the Acquisition and this announcement and will
not be responsible to anyone other than Alfred McAlpine for providing the
protections afforded to clients of JPMorgan Cazenove nor for providing advice in
connection with the Acquisition or this announcement or any matter referred to
herein.
Tricorn Partners, which is authorised and regulated in the United Kingdom by the
Financial Services Authority, is acting exclusively for Alfred McAlpine and no
one else in connection with the Acquisition and this announcement and will not
be responsible to anyone other than Alfred McAlpine for providing the
protections afforded to clients of Tricorn Partners nor for providing advice in
connection with the Acquisition or this announcement or any matter referred to
herein.
Morgan Stanley, which is authorised and regulated in the United Kingdom by the
Financial Services Authority, is acting exclusively for Carillion and no one
else in connection with the Acquisition and this announcement and will not be
responsible to anyone other than Carillion for providing the protections
afforded to clients of Morgan Stanley nor for providing advice in connection
with the Acquisition or this announcement or any matter referred to herein.
Oriel Securities, which is authorised and regulated in the United Kingdom by the
Financial Services Authority, is acting exclusively for Carillion and no one
else in connection with the Acquisition and this announcement and will not be
responsible to anyone other than Carillion for providing the protections
afforded to clients of Oriel Securities nor for providing advice in connection
with the Acquisition or this announcement or any matter referred to herein.
THIS ANNOUNCEMENT IS NOT A PROSPECTUS. IT DOES NOT CONSTITUTE OR FORM PART OF
ANY OFFER OF SECURITIES, OR CONSTITUTE SOLICITATION OF ANY OFFER OF SECURITIES.
ANY ACCEPTANCE OR RESPONSE TO THE ACQUISITION SHOULD BE MADE ONLY ON THE BASIS
OF THE INFORMATION REFERRED TO IN THE SCHEME DOCUMENT AND THE PROSPECTUS.
Copies of the Prospectus, the Carillion Shareholder Circular and the Scheme
Document will, from the date of posting to Alfred McAlpine Shareholders or
Carillion Shareholders (as appropriate), be available for inspection at the
Document Viewing Facility which is situated at The Financial Services Authority,
25 The North Colonnade, Canary Wharf, London E14 5HS.
Copies of the Carillion Shareholder Circular, the Scheme Document and the
Prospectus will, from the date of posting to Alfred McAlpine Shareholders or
Carillion Shareholders (as appropriate), be available for inspection
by Carillion Shareholders at the offices of Carillion plc, Birch Street,
Wolverhampton, WV1 4HY during normal business hours on any weekday (Saturdays,
Sundays and public holidays excepted) and at the offices of Slaughter and May,
One Bunhill Row, London, EC1Y 8YY during normal business hours on any weekday
(Saturdays, Sundays and public holidays excepted).
Copies of the Scheme Document and the Prospectus will, from the date of posting
to Alfred McAlpine Shareholders or Carillion Shareholders (as appropriate), be
available for inspection by Alfred McAlpine Shareholders at the offices
of Alfred McAlpine plc, Kinnaird House, 1 Pall Mall East, London, SW1Y
5AZ during normal business hours on any weekday (Saturdays, Sundays and public
holidays excepted) and at the offices of CMS Cameron McKenna LLP, Mitre House,
160 Aldersgate Street, London, EC1A 4DD during normal business hours on any
weekday (Saturdays, Sundays and public holidays excepted).
Dealing Disclosure Requirements
Under the provisions of Rule 8.3 of the City Code, if any person is, or becomes,
'interested' (directly or indirectly) in 1% or more of any class of 'relevant
securities' of Carillion or of Alfred McAlpine, all 'dealings' in any 'relevant
securities' of that company (including by means of an option in respect of, or a
derivative referenced to, any such 'relevant securities') must be publicly
disclosed by no later than 3.30pm (London time) on the London business day
following the date of the relevant transaction. This requirement will continue
until the Scheme becomes Effective, lapses or is otherwise withdrawn or on which
the 'offer period' otherwise ends (or, if Carillion elects to effect the
Acquisition by way of an Offer, until the date on which the Offer becomes, or is
declared, unconditional as to acceptances, lapses or is otherwise withdrawn or
on which the 'offer period' otherwise ends). If two or more persons act together
pursuant to an agreement or understanding, whether formal or informal, to
acquire an 'interest' in 'relevant securities' of Carillion or Alfred McAlpine,
they will be deemed to be a single person for the purpose of Rule 8.3.
Under the provisions of Rule 8.1 of the City Code, all 'dealings' in 'relevant
securities' of Carillion or Alfred McAlpine by Carillion or Alfred McAlpine, or
by any of their respective 'associates' must be disclosed by no later than 12.00
noon (London time) on the London business day following the date of the relevant
transaction.
A disclosure table, giving details of the companies in whose 'relevant
securities' 'dealings' should be disclosed, and the number of such securities in
issue, can be found on the Panel's website at www.thetakeoverpanel.org.uk.
Overseas Jurisdictions
'Interests in securities' arise, in summary, when a person has long economic
exposure, whether conditional or absolute, to changes in the price of
securities. In particular, a person will be treated as having an 'interest' by
virtue of the 'ownership' or control of securities, or by virtue of any option
in respect of, or derivative referenced to, securities.
Terms in quotation marks are defined in the City Code, which can also be found
on the Panel's website. If you are in any doubt as to whether or not you are
required to disclose a 'dealing' under Rule 8, you should consult the Panel.
The release, publication or distribution of this announcement in jurisdictions
other than the United Kingdom may be restricted by law and therefore any persons
who are subject to the laws of any jurisdiction other than the United Kingdom
should inform themselves about, and observe, any applicable requirements. This
announcement has been prepared for the purposes of complying with English law
and the City Code and the information disclosed may not be the same as that
which would have been disclosed if this announcement had been prepared in
accordance with the laws and regulations of any jurisdiction outside of England.
This announcement is not intended to, and does not constitute, or form part of,
an offer to sell or any invitation to purchase or subscribe for any securities
or a solicitation of any vote or approval in any jurisdiction. This announcement
does not constitute a prospectus or a prospectus equivalent document.
Shareholders of Carillion and Alfred McAlpine are advised to read carefully the
formal documentation in relation to the Acquisition once it has been despatched.
The proposals of the Acquisition will be made solely through the Scheme
Document, which will contain the full terms and conditions of the Scheme,
including details of how to vote with respect to the Scheme. Any acceptance or
other response to the proposals should be made only on the basis of the
information in the Scheme Document. Alfred McAlpine Shareholders may obtain a
further free copy of the Scheme Document, when it becomes available, from CMS
Cameron McKenna LLP at Mitre House, 160 Aldersgate Street, London, EC1A 4DD.
In particular, this announcement is not an offer of securities for sale in the
United States and the New Carillion Shares, which will be issued in connection
with the Acquisition, have not been, and will not be, registered under the US
Securities Act or under the securities law of any state, district or other
jurisdiction of the United States, Australia, Canada or Japan and no regulatory
clearance in respect of the New Carillion Shares has been, or will be, applied
for in any jurisdiction other than the UK. The New Carillion Shares may not be
offered, sold, or, delivered, directly or indirectly, in, into or from the
United States absent registration under the US Securities Act or an exemption
from registration The New Carillion Shares may not be offered, sold, resold,
delivered or distributed, directly or indirectly, in, into or from Canada,
Australia or Japan or to, or for the account or benefit of, any resident of
Australia, Canada or Japan absent an exemption from registration or an exemption
under relevant securities law. It is expected that the New Carillion Shares will
be issued in reliance upon the exemption from the registration requirements of
the US Securities Act provided by Section 3(a)(10) thereof. Under applicable US
securities laws, persons (whether or not US persons) who are or will be
'affiliates' within the meaning of the US Securities Act of Alfred McAlpine or
Carillion prior to, or of Carillion after, the Effective Date will be subject to
certain transfer restrictions relating to the New Carillion Shares received in
connection with the Scheme.
Notice to US Investors in Alfred McAlpine: The Acquisition relates to the shares
of a UK company and is proposed to be made by means of a scheme of arrangement
provided for under the laws of England and Wales. The Acquisition is subject to
the disclosure requirements and practices applicable in the United Kingdom to
schemes of arrangement, which differ from the disclosure and other requirements
of US securities laws. Financial information included in the relevant
documentation will have been prepared in accordance with accounting standards
applicable in the United Kingdom that may not be comparable to the financial
statements of US companies.
If the Acquisition is implemented by way of an Offer, it will be made in
accordance with the procedural and filing requirements of the US securities
laws, to the extent applicable. If the Acquisition is implemented by way of an
Offer, the New Carillion Shares to be issued in connection with such offer will
not be registered under the US Securities Act or under the securities laws of
any state, district or other jurisdiction of the United States and may not be
offered, sold or delivered, directly or indirectly, in the United States except
pursuant to an applicable exemption from, or in a transaction not subject to,
the registration requirements of the US Securities Act or such other securities
laws. Carillion does not intend to register any such New Carillion Shares or
part thereof in the United States or to conduct a public offering of the New
Carillion Shares in the United States.
Unless Carillion otherwise determines, relevant clearances and registrations
have not been, nor will they be, sought or obtained, nor have any steps been
taken, nor will any steps be taken, to enable the Loan Notes to be publicly
offered in compliance with applicable securities laws of any jurisdiction. The
Loan Notes have not been, nor will they be, registered under the US Securities
Act or under the securities laws of any state, district or other jurisdiction of
the United States and the Loan Notes are not being offered in, and may not be
transferred into, the United States. Accordingly, Scheme Shareholders in the
United States will not eligible to elect to receive Notes. The Loan Notes may
not (subject to certain limited exceptions) be offered, sold, transferred or
delivered, directly or indirectly, in any other jurisdiction (including, without
limitation, in Australia, Canada or Japan) where to do so would violate the laws
of that jurisdiction or would require registration thereof in such jurisdiction.
Forward Looking Statements
This announcement contains statements about Carillion and Alfred McAlpine that
are or may be forward looking statements. All statements other than statements
of historical facts included in this announcement may be forward looking
statements. Without limitation, any statements preceded or followed by or that
include the words 'targets', 'plans', 'believes', 'expects', 'aims',' intends',
'will', 'may', 'anticipates', 'estimates', 'projects' or, words or terms of
similar substance or the negative thereof, are forward looking statements.
Forward looking statements include statements relating to the following: (i)
future capital expenditures, expenses, revenues, earnings, synergies, economic
performance, indebtedness, financial condition, dividend policy, losses and
future prospects; (ii) business and management strategies and the expansion and
growth of Carillion's or Alfred McAlpine's operations and potential synergies
resulting from the Acquisition; and (iii) the effects of government regulation
on Carillion's or Alfred McAlpine's business.
Such forward looking statements involve risks and uncertainties that could
significantly affect expected results and are based on certain key assumptions.
Many factors could cause actual results to differ materially from those
projected or implied in any forward looking statements. Due to such
uncertainties and risks, readers are cautioned not to place undue reliance on
such forward looking statements, which speak only as of the date hereof.
Carillion and Alfred McAlpine disclaim any obligation to update any forward
looking or other statements contained herein, except as required by applicable
law.
APPENDIX I
CONDITIONS TO AND CERTAIN FURTHER TERMS OF THE ACQUISITION
The Acquisition will be conditional upon the Scheme of Arrangement becoming
unconditional and effective by a date falling 150 days after the date on which
the Scheme Document is posted or such later date imposed by the Court and/or
agreed by Carillion and Alfred McAlpine.
PART A
Conditions to the Acquisition
1 The Scheme will be subject to the following conditions:
a) its approval by a majority in number representing not less than
three-fourths in value of the holders of Alfred McAlpine Shares who
are on the register of members of Alfred McAlpine at the Scheme
Voting Record Time, present and voting, whether in person or by
proxy, at the Scheme Meeting (or any adjournment thereof);
b) the special resolutions required to implement the Scheme being
passed at the Alfred McAlpine Extraordinary General Meeting (or any
adjournment thereof); and
c) the sanction (with or without modification (but subject to such
modification being acceptable to Carillion and Alfred McAlpine)) of
the Scheme and the confirmation of the Capital Reduction by the
Court, office copies of the Court Orders and of the minute of
reduction being delivered for registration to the Registrar of
Companies and registration of the Second Court Order by the
Registrar of Companies.
2 The Acquisition will be conditional upon the passing at the Carillion
Extraordinary General Meeting (or any adjournment thereof) of such
resolution or resolutions as are necessary to approve, implement and effect
the Acquisition and the acquisition of Alfred McAlpine Shares pursuant to
the Acquisition or otherwise (as such resolutions may be set out in the
Carillion Shareholder Circular, including a resolution or resolutions to
increase the share capital of Carillion and authorise the creation and
allotment of New Carillion Shares).
3 Alfred McAlpine and Carillion have agreed that, subject to the provisions
of paragraph5 below, the Scheme will also be conditional upon, and
accordingly the necessary actions to make the Acquisition Effective will
only be taken on, the satisfaction or waiver of the following Conditions:
a) (i) the Office of Fair Trading in the United Kingdom indicating,
in terms reasonably satisfactory to Carillion, that the
proposed acquisition of Alfred McAlpine by Carillion or any
matter arising therefrom or related thereto will not be
referred to the Competition Commission and the deadline for
appealing such a decision to the Competition Appeal Tribunal
having expired or lapsed (as appropriate); and
(ii) to the extent that the Irish Competition Act 2002 (the '2002
Act') is applicable, the Irish Competition Authority (the
'Authority') informing Carillion of its determination pursuant
to Section 21(2) of the 2002 Act in terms reasonably
satisfactory to Carillion, that the Acquisition and any matter
arising therefrom or related thereto may be put into effect or
the period specified in Section 21(2) of the 2002 Act elapsing
without the Authority having made a determination in relation
to the Acquisition;
b) the admission to the Official List of the New Carillion Shares to be
issued in connection with the Acquisition becoming effective in
accordance with the Listing Rules and the admission of such shares
to trading becoming effective in accordance with the Admission and
Disclosure Standards of the London Stock Exchange or, if Carillion
and Alfred McAlpine so determine and subject to the consent of the
Panel, the UKLA agreeing to admit such shares to the Official List
and the London Stock Exchange agreeing to admit such shares to
trading subject only to (i) the allotment of such shares and/or (ii)
the Acquisition becoming Effective.
c) except as (i) publicly announced in accordance with the Listing
Rules by Alfred McAlpine prior to 10 December 2007, (ii) disclosed
in the annual report and accounts of Alfred McAlpine for the
financial year ended 31 December 2006, (iii) disclosed in the
interim report of Alfred McAlpine for the six months ended 30 June
2007 or (iv) as fairly disclosed in writing by or on behalf of
Alfred McAlpine to Carillion or its advisers prior to 10 December
2007, there being no provision of any agreement, arrangement,
licence, permit or other instrument to which any member of the wider
Alfred McAlpine Group is a party or by or to which any such member
or any of its assets may be bound, entitled or subject, which in
consequence of the Acquisition or the proposed acquisition of any
shares or other securities in Alfred McAlpine by the Carillion Group
or because of a change in the control or management of Alfred
McAlpine or otherwise, would reasonably be expected to result (in
each case to an extent which is material in the context of the wider
Alfred McAlpine Group as a whole or the wider Carillion Group as a
whole) in:
(i) any moneys 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 their or its stated maturity date
or repayment date or the ability of any such member to borrow
moneys or incur any indebtedness being withdrawn or inhibited
or being capable of becoming or being withdrawn or inhibited;
(ii) any such agreement, arrangement, licence, permit or
instrument or the rights, liabilities, obligations or
interests of any such member thereunder being terminated or
adversely modified or affected or any obligation or liability
arising or any adverse action being taken thereunder;
(iii) 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 otherwise than in the ordinary course of
business;
(iv) 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;
(v) the rights, liabilities, obligations or interests of any such
member 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,
adversely modified or affected;
(vi) the value of any such member or its financial or trading
position being prejudiced or adversely affected;
(vii) any such member ceasing to be able to carry on business under
any name under which it presently does so; or
(viii) 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 Alfred McAlpine Group is a party or by or to
which any such member or any of its assets may be bound, entitled or
subject, would result in or would reasonably be expected to result
in any of the events or circumstances as are referred to in
sub-paragraphs (i) to (viii) of this paragraph 3(c) (in each case to
an extent which is material in the context of the wider Alfred
McAlpine Group as a whole);
d) 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, except for the Office of Fair
Trading or the Irish Competition Authority (each a 'Third Party')
having decided to take, institute, implement or threaten any action,
proceeding, suit, investigation, enquiry or reference, or enacted or
made any statute, regulation, decision or order, or having taken any
other steps which would or would reasonably be expected to (in each
case to an extent which is material in the context of the wider
Alfred McAlpine Group as a whole):
(i) require, prevent or delay the divestiture, or materially
alter the terms envisaged for any proposed divestiture by any
member of the wider Carillion Group or any member of the
wider Alfred McAlpine Group of all or any 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 material part
thereof;
(ii) require, prevent or delay the divestiture by any member of
the wider Carillion Group of any shares or other securities
in Alfred McAlpine;
(iii) impose any limitation on, or result in a delay in, the
ability of any member of the wider Carillion 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
Alfred McAlpine Group or the wider Carillion Group or to
exercise management control over any such member;
(iv) otherwise materially adversely affect the business, assets or
profits of any member of the wider Carillion Group or of any
member of the wider Alfred McAlpine Group;
(v) make the Acquisition or its implementation or the acquisition
or proposed acquisition by Carillion or any member of the
wider Carillion Group of any shares or other securities in,
or control of Alfred McAlpine void, illegal, and/or
unenforceable under the laws of any jurisdiction, or
otherwise, directly or indirectly, restrain, restrict,
prohibit, delay or otherwise materially interfere with the
same, or impose additional conditions or obligations with
respect thereto, or otherwise challenge or materially
interfere therewith;
(vi) except if Carillion elects to implement the Acquisition by
way of an Offer, in respect of the 'squeeze out' procedure in
accordance with the provisions of Chapter 3 of Part 28 of the
Companies Act 2006, require any member of the wider Carillion
Group or the wider Alfred McAlpine Group to offer to acquire
any shares or other securities (or the equivalent) or
interest in any member of the wider Alfred McAlpine Group or
the wider Carillion Group owned by any third party;
(vii) result in any member of the wider Alfred McAlpine Group
ceasing to be able to carry on business under any name under
which it presently does so;
and 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 in respect of the
Acquisition or the acquisition or proposed acquisition of any Alfred
McAlpine Shares having expired, lapsed or been terminated PROVIDED
THAT this condition (d) shall not apply in relation to any action,
proceeding, suit, investigation, enquiry or reference by a Third
Party in connection with the proposed disposal by Alfred McAlpine of
the Slate Business or the sale of six PFI concessions announced by
Alfred McAlpine on 5 November 2007;
e) all necessary filings or applications having been made in connection
with the Acquisition and all statutory or regulatory obligations in
any jurisdiction having been complied with in connection with the
Acquisition or the acquisition by any member of the wider Carillion
Group of any shares or other securities in, or control of, Alfred
McAlpine and all authorisations, orders, recognitions, grants,
consents, licences, confirmations, clearances, permissions and
approvals (collectively 'Consents') reasonably deemed necessary by
for or in respect of, the Acquisition or the proposed acquisition of
any shares or other securities in, or control of, Alfred McAlpine by
any member of the wider Carillion Group having been obtained in
terms and in a form reasonably satisfactory to Carillion from all
appropriate Third Parties or persons with whom any member of the
wider Alfred McAlpine Group has entered into contractual
arrangements in each case where the absence of such Consent would
have a material adverse effect on the wider Carillion Group taken as
a whole and all such Consents together with all material Consents
reasonably necessary to carry on the business of any member of the
wider Alfred McAlpine Group which is material remaining in full
force and effect and all filings necessary for such purpose having
been made and there being no notice or intimation of any intention
to revoke or not to renew any of the same at the time at which the
Acquisition otherwise becomes Effective and all necessary statutory
or regulatory obligations in any jurisdiction having been complied
with in all material respects;
f) except as (i) publicly announced in accordance with the Listing
Rules by Alfred McAlpine prior to 10 December 2007, (ii) disclosed
in the annual report and accounts of Alfred McAlpine for the
financial year ended 31 December 2006 , (iii) disclosed in the
interim report of Alfred McAlpine for the six months ended 30 June
2007 or (iv) as fairly disclosed in writing by or on behalf of
Alfred McAlpine to Carillion or its advisers prior to 10 December
2007, no member of the wider Alfred McAlpine Group having, since 31
December 2006:
(i) save as between Alfred McAlpine and wholly-owned subsidiaries
of Alfred McAlpine or for Alfred McAlpine Shares issued
pursuant to the exercise of options granted or vesting of
awards made under the Alfred McAlpine Share Schemes, issued,
authorised or proposed the issue of additional shares of any
class;
(ii) save as between Alfred McAlpine and wholly-owned subsidiaries
of Alfred McAlpine or for the grant of options or making of
awards under the Alfred McAlpine Share Schemes, issued or
agreed to issue, authorised or proposed the issue of
securities convertible or exchangeable into shares of any
class or rights, warrants or options to subscribe for, or
acquire, any such shares or convertible securities;
(iii) other than to another member of the Alfred McAlpine Group,
recommended, declared, paid or made or proposed to recommend,
declare, pay or make any bonus, dividend or other
distribution whether payable in cash or otherwise;
(iv) save for intra-Alfred McAlpine Group transactions, merged or
demerged with any body corporate or 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, in each case, other
than in the ordinary course of business and to an extent
which is material in the context of the Alfred McAlpine Group
taken as a whole;
(v) save for intra-Alfred McAlpine Group transactions, made or
authorised or proposed or announced an intention to propose
any change in its loan capital;
(vi) save for intra-Alfred McAlpine Group transactions, issued,
authorised or proposed the issue of any debentures or save
for intra-Alfred McAlpine Group transactions and save in the
ordinary course of business, incurred or increased any
indebtedness or become subject to any guarantee or contingent
liability;
(vii) save for intra-Alfred McAlpine Group transactions 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 in respect to the matters mentioned in
sub-paragraph f(i) above, made any other change to any part
of its share capital;
(viii) implemented, or authorised, proposed or announced its
intention to implement, any reconstruction, amalgamation,
scheme, commitment or other transaction or arrangement
otherwise than in the ordinary course of business which in
each case is material in the context of the Alfred McAlpine
Group taken as a whole or entered into or changed the terms
of any contract with any director or any member of Alfred
McAlpine's Group Executive Committee;
(ix) entered into or varied or authorised, proposed or announced
its intention to enter into or 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 would be reasonably likely to be
materially restrictive on the businesses of the wider Alfred
McAlpine Group or the wider Carillion Group taken as a whole
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 in each such case is or would be
reasonably likely to be material in the context of the wider
Alfred McAlpine Group;
(x) (other than in respect of a member which is dormant and was
solvent at the relevant time) 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 of
its assets or revenues or any analogous proceedings in any
jurisdiction or had any such person appointed which in each
case is material in the context of the Alfred McAlpine Group
taken as a whole;
(xii) waived or compromised any claim otherwise than in the
ordinary course of business which is in each case material in
the context of the wider Alfred McAlpine Group as a whole;
or
(xiii) save for the proposed disposal of the Slate Business, entered
into any contract, commitment, arrangement or agreement
otherwise than in the ordinary course of business 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 (f),
and, for the purposes of paragraphs (iii), (iv), (v) and (vi) of
this condition (f), the term 'Alfred McAlpine Group' shall mean
Alfred McAlpine and its wholly-owned subsidiaries;
g) except as (i) publicly announced in accordance with the Listing
Rules by Alfred McAlpine prior to 10 December 2007, (ii) disclosed
in the annual report and accounts of Alfred McAlpine for the
financial year ended 31 December 2006 , (iii) disclosed in the
interim report of Alfred McAlpine for the six months ended 30 June
2007 or (iv) as fairly disclosed in writing by or on behalf of
Alfred McAlpine to Carillion or its advisers prior to 10 December
2007:
(i) no material adverse change or deterioration having occurred
in the business, assets, financial or trading position or
profits of the wider Alfred McAlpine Group taken as a whole;
(ii) no litigation, arbitration proceedings, prosecution or other
legal proceedings to which any member of the wider Alfred
McAlpine Group is or may become a party (whether as a
claimant, defendant or otherwise) and no investigation by any
Third Party against or in respect of any member of the wider
Alfred McAlpine Group having been instituted, announced or
threatened in writing by or against or remaining outstanding
in respect of any member of the wider Alfred McAlpine Group
which in any such case would have or would reasonably be
expected to have a material adverse effect on the wider
Alfred McAlpine Group as a whole;
(iii) no contingent or other liability having arisen which would
have or would reasonably be expected to have a material
adverse effect on the wider Alfred McAlpine Group as a whole;
(iv) no steps have been taken which are reasonably likely to
result in the withdrawal, cancellation, termination or
modification of any licence held by any member of the wider
Alfred McAlpine Group which is necessary for the proper
carrying on of its business and the absence of which in any
case would have or would reasonably be expected to have a
material adverse effect on the wider Alfred McAlpine Group as
a whole;
h) except as (i) publicly announced in accordance with the Listing
Rules by Alfred McAlpine prior to 10 December 2007, (ii) disclosed
in the annual report and accounts of Alfred McAlpine for the
financial year ended 31 December 2006 , (iii) disclosed in the
interim report of Alfred McAlpine for the six months ended 30 June
2007 or (iv) as fairly disclosed in writing by or on behalf of
Alfred McAlpine to Carillion or its advisers prior to 10 December
2007, Carillion not having discovered:
(i) that any financial, business or other information concerning
the wider Alfred McAlpine Group as contained in the
information publicly disclosed at any time by or on behalf of
any member of the wider Alfred McAlpine Group is materially
misleading, contains a material misrepresentation of fact or
omits to state a fact necessary to make that information not
materially misleading and which was not subsequently
corrected before 10 December 2007 by public disclosure; or
(ii) that any member of the wider Alfred McAlpine Group is subject
to any liability (contingent or otherwise) which is material
in the context of the Alfred McAlpine Group as a whole;
i) Carillion not having discovered that:
(i) any past or present member of the wider Alfred McAlpine Group
has failed to comply with any and/or all applicable
legislation or regulation, of any jurisdiction with regard to
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 or otherwise relating to environmental matters, or
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) on the part of any
member of the wider Alfred McAlpine Group and which is
material in the context of the wider Alfred McAlpine Group as
a whole; or
(ii) there is, or is likely to be, for that or any other reason
whatsoever, any material liability (actual or contingent) of
any past or present member of the wider Alfred McAlpine 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 any such past or
present member of the wider Alfred McAlpine 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 and which is material in
the context of the wider Alfred McAlpine Group as a whole.
4 For the purposes of these conditions the 'wider Alfred McAlpine Group'
means Alfred McAlpine and its subsidiary undertakings, associated
undertakings and any other undertaking in which Alfred McAlpine and/or such
undertakings (aggregating their interests) have a significant interest and
the 'wider Carillion Group' means Carillion and its subsidiary
undertakings, associated undertakings and any other undertaking in which
Carillion 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 a direct or indirect interest in ten per cent. or more of the equity
share capital (as defined in that Act).
5 Subject to the requirements of the Panel, Carillion reserves the right to
waive, in whole or in part, all or any of the above conditions, except
conditions 1, 2 and 3(b).
6 If Carillion is required by the Panel to make an offer for Alfred McAlpine
Shares under the provisions of Rule 9 of the City Code, Carillion may make
such alterations to any of the above conditions as are necessary to comply
with the provisions of that Rule.
7 Unless the Panel otherwise consents, the Acquisition will not proceed if,
after the date of this announcement and before the Alfred McAlpine
Extraordinary General Meeting, the Acquisition is referred to the
Competition Commission.
8 The Acquisition will be governed by English law and be subject to the
jurisdiction of the English courts, to the conditions set out in this
announcement and in the formal Scheme Document and related form of
election.
PART B
Certain further terms of the Acquisition
1 Fractions of New Carillion Shares will not be allotted or issued pursuant to
the Scheme. Fractional entitlements to New Carillion Shares will be
aggregated and sold in the market and the net proceeds of sale distributed
pro rata to persons entitled thereto.
2 Subject to the consent of the Panel (if applicable), Carillion reserves the
right to elect to implement the Acquisition by way of a an Offer. In such
event, the Acquisition will be implemented on the same terms (with such
amendments as may be necessary or as may be required to incorporate an
acceptance condition set at 90 per cent. of the shares to which the
Acquisition relates or such other percentage as may be required by the Panel
and subject to the availability of an exemption from the registration
requirements of the US Securities Act and such amendments that Carillion
deems necessary in connection with US securities laws), so far as
applicable, as those which would apply to the implementation of the
Acquisition by means of the Scheme.
3 This announcement is not an offer of securities for sale in the United
States and the New Carillion Shares, which will be issued in connection with
the Acquisition, have not been, and will not be, registered under the US
Securities Act or under the securities law of any state, district or other
jurisdiction of the United States, Australia, Canada or Japan and no
regulatory clearance in respect of the New Carillion Shares has been, or
will be, applied for in any jurisdiction other than the UK. The New
Carillion Shares may not be offered or sold in the United States absent
registration under the US Securities Act or an exemption from registration.
It is expected that the New Carillion Shares will be issued in reliance upon
the exemption from the registration requirements of the US Securities Act
provided by Section 3(a)(10) thereof. Under applicable US securities laws,
persons (whether or not US persons) who are or will be 'affiliates' (for the
purposes of the US Securities Act) of Carillion or Alfred McAlpine prior to,
or of Carillion after, the Effective Date will be subject to certain
transfer restrictions relating to the New Carillion Shares received in
connection with the Acquisition.
4 Unless Carillion otherwise determines, relevant clearances and registrations
have not been, nor will they be, sought or obtained, nor have any steps been
taken, nor will any steps be taken, to enable the Loan Notes to be publicly
offered in compliance with applicable securities laws of any jurisdiction.
The Loan Notes have not been, nor will they be, registered under the
Securities Act or under the securities laws of any state, district or other
jurisdiction of the United States and the Loan Notes are not being offered
in, and may not be transferred into, the United States. Accordingly, Scheme
Shareholders will not be eligible to elect to receive Loan Notes. The Loan
Notes may not (subject to certain limited exceptions) be offered, sold,
transferred or delivered, directly or indirectly, in any other jurisdiction
(including, without limitation, in Australia, Canada or Japan) where to do
so would violate the laws of that jurisdiction or would require registration
thereof in such jurisdiction.
APPENDIX II
PROFIT FORECAST
The key basis of preparation of the profit forecast is as follows:
* the unaudited interim financial statements of Carillion plc for the six
months ended 30 June 2007 issued by Carillion plc on 5 September 2007;
* the unaudited management accounts of Carillion plc for the four month period
ended 31 October 2007; and
* the unaudited forecast of Carillion plc for the two months ended 31 December
2007.
The accounting policies adopted in preparing the profit forecast are consistent
with those normally adopted by Carillion.
There have been no new changes or amendments to policies during 2007. The
policies adopted by Carillion in 2006 can be seen in its published annual
report.
The profit forecast is based on the following key underlying assumptions:
External factors
* Rates of interest, taxation, inflation and foreign currency exchange rates
will not change significantly during the forecast period. In respect of UK
taxation no changes are expected in addition to the announced change to the
corporation tax rate to 28 per cent. in the year ending 31 December 2008.
* Any changes in relevant legislation, governmental policy or other regulatory
requirements will not materially affect the results of the Group.
* There will be no material adverse change in economic conditions in the
markets in which the Group operates.
* There will be no serious industrial disputes or other interruptions in
business arising from circumstances outside the Group's control which would
adversely affect the Group, its customers or suppliers.
* There will be no material unprovided costs arising from environmental
exposures of which the Group is not yet aware.
Internal factors
* The costs of restructuring the Rail division and disposing of certain rail
assets can be achieved within the available provisions.
* Any costs from the potential acquisition of Alfred McAlpine are either
capitalised as part of the investment cost (if the acquisition proceeds), or
treated as non-operating (if the acquisition is aborted).
* No conclusions will be reached by the OFT in their enquiry into the
Construction Industry in 2007.
* Taxation on underlying profit has been included at a rate of 25 per cent.
Private & confidential
The Directors
Carillion plc
24 Birch Street
Wolverhampton
WV1 4HY
Lazard & Co., Limited
50 Stratton Street
London
W11 8LL
10 December 2007
Dear Sirs
Carillion plc
We report on the profit forecast comprising the forecast of growth in underlying
earnings (defined as profit after tax but before amortisation of intangibles
(arising from business combinations), goodwill impairment, reorganisation costs
and non operating items) of Carillion plc ('the Company') and its subsidiaries
('the Group') for the year ending 31 December 2007 (the 'Profit Forecast'). The
Profit Forecast, and the material assumptions upon which it is based, are set
out on page 44 of the Rule 2.5 Announcement ('the Rule 2.5 Announcement'). This
report is required by Rule 28.3 (b) of the City Code on Takeovers and Mergers
('the City Code') and is given for the purpose of complying with that rule and
for no other purpose.
Responsibilities
It is the responsibility of the directors of the Company ('the Directors') to
prepare the Profit Forecast in accordance with the requirements of the City
Code.
It is our responsibility to form an opinion as required by the City Code as to
the proper compilation of the profit forecast and to report that opinion to you.
Save for any responsibility which we may have to those persons to whom this
report is expressly addressed, to the fullest extent permitted by law we do not
assume any responsibility and will not accept any liability to any other person
for any loss suffered by any such other person as a result of, arising out of,
or in connection with this report or our statement, required by and given solely
for the purposes of complying with Rule 28.4 of the City Code, consenting to its
inclusion in the Rule 2.5 Announcement.
Basis of Preparation of the Profit Forecast
The Profit Forecast has been prepared on the basis stated on page 44 of the Rule
2.5 Announcement and is based on the unaudited interim financial results for the
six months ended 30 June, the unaudited management accounts for the four months
ended 31 October 2007 and a forecast to 31 December 2007. The Profit Forecast is
required to be presented on a basis consistent with the accounting policies of
the Group.
Basis of opinion
We conducted our work in accordance with Standards for Investment Reporting
issued the Auditing Practices Board in the United Kingdom. Our work included
evaluating the basis on which the historical financial information included in
the Profit Forecast has been prepared and considering whether the Profit
Forecast has been accurately computed based upon the disclosed assumptions and
the accounting policies of the Group. Whilst the assumptions upon which the
Profit Forecast are based are solely the responsibility of the Directors, we
considered whether anything came to our attention to indicate that any of the
assumptions adopted by the Directors which, in our opinion, are necessary for a
proper understanding of the Profit Forecast have not been disclosed or if any
material assumption made by the Directors appears to us to be unrealistic.
We planned and performed our work so as to obtain the information and
explanations we considered necessary in order to provide us with reasonable
assurance that the Profit Forecast has been properly compiled on the basis
stated.
Since the Profit Forecast and the assumptions on which it is based relate to the
future and may therefore be affected by unforeseen events, we can express no
opinion as to whether the actual results reported will correspond to those shown
in the Profit Forecast and differences may be material.
Our work has not been carried out in accordance with auditing or other standards
and practices generally accepted in the United States of America or other
jurisdictions and accordingly should not be relied upon as if it had been
carried out in accordance with those standards and practices.
Opinion
In our opinion the Profit Forecast, so far as the accounting policies and
calculations are concerned, has been properly compiled on the basis of the
assumptions made by the Directors and the basis of accounting used is consistent
with the accounting policies of the Group.
Yours faithfully
KPMG Audit Plc
The Directors
Carillion plc
24 Birch Street
Wolverhampton
WV1 4HY
10 December 2007
Dear Sirs
Carillion plc's offer for Alfred McAlpine plc
We refer to the forecast made by Carillion plc ('Carillion') in the Rule 2.5
Announcement dated 10 December 2007 (the 'Acquisition Announcement'), a copy of
which is attached to this letter, comprising a forecast of the profit for the
group for the year ending 31 December 2007 (the 'Profit Forecast').
We have discussed the Profit Forecast and the bases and assumptions on which it
has been prepared with you as directors of Carillion (the 'Directors') and with
KPMG Audit Plc, Carillion's auditors. You have confirmed to us that all
information relevant to the Profit Forecast has been disclosed to us. We have
relied on the accuracy and completeness of all such information and have assumed
such accuracy and completeness for the purposes of providing this letter to you.
We have also discussed the accounting policies and basis of calculation for the
Profit Forecast with KPMG Audit Plc and we have considered their letter dated 10
December 2007 addressed to you and us on this matter.
On the basis of the foregoing, we consider that the Profit Forecast, for which
you as Directors are solely responsible, has been compiled with due care and
consideration by the Directors.
This letter is provided to you solely in connection with Rule 28.3(b) of the
City Code on Takeovers and Mergers and for no other purpose.
Accordingly, save for any responsibility which we may have to those persons to
whom this letter is expressly addressed, to the fullest extent permitted by law
we do not assume any responsibility and will not accept any liability to any
person for any loss suffered by any such person as a result of, or in connection
with, this letter.
Yours faithfully,
For and on behalf of
Lazard & Co., Limited
Peter Warner
Managing Director
APPENDIX III
SOURCES AND BASES
1. Unless otherwise stated:
* financial information relating to Carillion has been extracted or
provided (without material adjustment) from the audited annual report
and accounts for Carillion for the year ended 31 December 2006 reported
under IFRS and, as relevant, the unaudited interim report and accounts
for the six months ended 30 June 2007 reported under IFRS; and
* financial information relating to Alfred McAlpine has been extracted or
provided (without material adjustment) from the audited annual report
and accounts for Alfred McAlpine for the year ended 31 December 2006
reported under IFRS and, as relevant, the unaudited interim report and
accounts for the six months ended 30 June 2007 reported under IFRS.
2. The terms of the Acquisition value each Alfred McAlpine Share at 558 pence.
The Acquisition price is based on a share price of 363.25 pence per
Carillion Share (the Closing Price on 7 December 2007, the last Business
Day prior to this announcement) and 1.08 Carillion Shares to be issued for
each Alfred McAlpine Share representing 392.3 pence in Carillion Shares,
plus 165.4 pence in cash.
3. As at the close of business on 7 December 2007, Carillion had in issue
281,242,738 ordinary shares of 50 pence each; and Alfred McAlpine had in
issue 102,532,195 ordinary shares of 25 pence each and 4,506,780 Alfred
McAlpine Preference Shares.
4. The value of the Acquisition is calculated:
* by reference to a price of 363.25 pence per Carillion Share (the Closing
Price on 7 December 2007, the last Business Day prior to this
announcement); and
* on the basis of the issued ordinary share capital of Alfred McAlpine
referred to in paragraph 3 above.
5. For the purposes of this announcement, pro forma numbers represent the sum
of Carillion's and Alfred McAlpine's reported figures for the year ended 31
December 2006.
6. The maximum number of New Carillion Shares to be issued pursuant to the
Acquisition is calculated on the basis of:
* the fully diluted ordinary share capital of Alfred McAlpine referred to
in paragraph 7 below; and
* the issued ordinary share capital of Carillion referred to in paragraph
3 above.
7. The fully diluted ordinary share capital of Alfred McAlpine (being
105,256,953 Alfred McAlpine Shares) is calculated on the basis of:
* the number of issued Alfred McAlpine Shares on 7 December 2007, the last
Business Day prior to the date of this announcement, being 102,532,195
Alfred McAlpine Shares; and
* any further Alfred McAlpine Shares which may be issued on or after the
date of this announcement on the exercise of options or vesting of
awards under the Alfred McAlpine Share Schemes assuming that the Scheme
will be sanctioned by the Court on a date no later than 27 February
2008, amounting in aggregate to 2,724,758 Alfred McAlpine Shares.
8. The expected operational cost savings have been calculated on the basis of
the existing cost and operating structures of the Carillion Group and the
Alfred McAlpine Group respectively. These statements of estimated cost
savings and one-off costs for achieving them relate to future actions and
circumstances which, by their nature, involve risks, uncertainties and
other factors. Because of this, the cost savings referred to may not be
achieved, or those achieved could be materially different from those
estimated. This statement is not intended to be a profit forecast and
should not be interpreted to mean that the earnings per share in 2008, 2009
or in any subsequent financial period, would necessarily match or be
greater than those for the relevant preceding financial period.
9. The statement that the Acquisition is expected to deliver materially
enhanced earnings for Carillion in 2009 (the first full year following
completion of the Acquisition) relates to future actions and circumstances,
which, by their nature, involve risks, uncertainties and other factors.
This statement does not constitute a profit forecast and should not be
interpreted to mean that earnings for that year or any subsequent financial
period would necessarily match or be greater than those for any preceding
financial period. Earnings in this context represent net after tax earnings
before the amortisation of intangible assets and non-operating items.
10. For the purposes of this announcement, net debt / cash represents total
debt, excluding finance leases, less total cash balances (including cash in
joint ventures).
11. Underlying earnings means before intangible amortisation, goodwill
impairment, restructuring costs and non-operating items.
12. Carillion has agreed with the Panel's ruling that this statement represents
a profit forecast (the 'Profit Forecast') for the purpose of Rule 28 of the
City Code. As such it is a requirement that this statement should be
reported on by Carillion's auditors and financial advisers in accordance
with Rule 28 of the City Code. These reports and the basis and principal
assumptions underlying the Profit Forecast are included in Appendix II to
this announcement.
APPENDIX IV
DEFINITIONS
In this announcement, the following definitions apply unless the context
requires otherwise:
'Acquisition' the proposed acquisition of the entire issued
and to be issued ordinary share capital of
Alfred McAlpine by Carillion
'Alfred McAlpine' Alfred McAlpine plc, registered in England and
Wales (no. 1367044)
'Alfred McAlpine Board' the board of Alfred McAlpine Directors
'Alfred McAlpine Directors' the directors of Alfred McAlpine
'Alfred McAlpine Extraordinary the extraordinary general meeting of the Alfred
General Meeting' McAlpine Shareholders (and any adjournment
thereof) convened for the purposes of
considering and, if thought fit, approving
certain resolutions in connection with the
Scheme
'Alfred McAlpine Group' Alfred McAlpine and its subsidiary
undertakings
'Alfred McAlpine Ordinary ordinary shares of 25 pence each in the capital
Shares' of Alfred McAlpine
'Alfred McAlpine Preference the 9% cumulative preference shares of £1 each
Shares' in the capital of Alfred McAlpine
'Alfred McAlpine Shareholders' holders of Alfred McAlpine Shares
'Alfred McAlpine Shares' (i) prior to the Reorganisation Record Time,
Alfred McAlpine Ordinary Shares and (ii) after
the Reorganisation Record Time, the shares in
the capital of Alfred McAlpine as reclassified
'Alfred McAlpine Share Schemes' (i) the Alfred McAlpine Executive Share Option
Scheme (1991); (ii) the Alfred McAlpine plc
Executive Share Option Scheme 2000; (iii) the
Alfred McAlpine Restricted Share Plan; (iv) the
Alfred McAlpine Long Term Incentive Plan 2005;
(v) the Alfred McAlpine plc Savings Related
Share Option Scheme 1998; (vi) the Alfred
McAlpine plc Buy as You Earn Share Scheme; and
(vii) the Alfred McAlpine Business Services
Limited Profit Sharing Scheme
'Alfred McAlpine Trustee' the trustees of the Alfred McAlpine Pension
Plan;
'Australia' the Commonwealth of Australia, its states,
territories or possessions and all areas subject
to its jurisdiction or any sub-division
thereof
'Business Day' any day on which banks are generally open in
England and Wales for the transaction of
business, other than a Saturday, Sunday or
public holiday
'Canada' Canada, its provinces and territories and all
areas subject to its jurisdiction or any
political sub-division thereof
'Capital Reduction' the proposed reduction of the share capital of
Alfred McAlpine pursuant to the Scheme
'Carillion' Carillion plc, registered in England and Wales
(no. 3782379)
'Carillion Board' the board of Carillion Directors
'Carillion Directors' the directors of Carillion
''Carillion Extraordinary General the extraordinary general meeting of Carillion
Meeting' to consider and, if thought fit, to approve the
Acquisition
'Carillion Group' Carillion and its subsidiary undertakings
'Carillion Shareholder Circular' the circular to be sent to Carillion
Shareholders outlining the Acquisition and
containing the notice convening the Carillion
Extraordinary General Meeting
'Carillion Shareholders' holders of Carillion Shares
'City Code' or 'Code' the City Code on Takeovers and Mergers
'Closing Price' the closing middle market price of a relevant
share as derived from SEDOL on any particular
day
'Conditions' the conditions to the Acquisition and the Scheme
set out in Appendix I of this announcement
'Court' the High Court of Justice in England and Wales
'Court Hearings' the two separate hearings by the Court of the
claim form to sanction the Scheme and to confirm
the Capital Reduction
'Court Orders' the First Court Order and the Second Court
Order
'Effective' in the context of the Acquisition:
(i) if the Acquisition is implemented by way of
the Scheme, the Scheme having become
effective pursuant to its terms; or
(ii) if the Acquisition is implemented by way of
an Offer, such Offer having been declared
or become unconditional in all respects in
accordance with the requirements of the
City Code
''Effective Date' the date on which the Acquisition becomes
Effective
'Enlarged Group' the Carillion Group (including the Alfred
McAlpine Group) following the Effective Date
'First Court Order' the order of the Court sanctioning the Scheme
under section 425 of the Companies Act 1985
'Hogarth' Hogarth Partnership
'Implementation Agreement' the agreement dated 9 December 2007 between
Carillion and Alfred McAlpine in relation to the
implementation of the Acquisition
'Japan' Japan, its cities, prefectures, territories and
possessions and all areas subject to its
jurisdiction or any sub-division thereof
'JPMorgan Cazenove' JPMorgan Cazenove Limited
'Lazard' Lazard & Co., Limited
'Listing Rules' the rules and regulations of the UKLA, as
amended
'Loan Note Alternative' the option whereby Alfred McAlpine Shareholders
(other than certain Overseas Shareholders and
Scheme Shareholders in the United States) may
elect to receive Loan Notes instead of some or
all of the cash consideration to which they
would otherwise be entitled under the
Acquisition, including under the Mix and Match
Facility
'Loan Notes' the floating rate loan notes of Carillion issued
pursuant to the Loan Note Alternative
'London Stock Exchange' London Stock Exchange plc, together with any
successors thereto
'Mix and Match Facility' the mix and match facility under which Alfred
McAlpine Shareholders may, subject to
availability elect to vary the proportion of New
Carillion Shares and cash they will receive
under the Scheme
'Mowlem' Mowlem plc, now Carillion JM Limited
'Morgan Stanley' Morgan Stanley & Co. International plc
'New Carillion Shares' the Carillion Shares proposed to be issued and
credited as fully paid pursuant to the Scheme
'Offer' a takeover offer as that term is defined in
section 974 of the Companies Act 2006
'Offer Document' should the Acquisition be implemented by means
of an Offer, the document to be sent to Alfred
McAlpine Shareholders which will contain, inter
alia, the terms and conditions of the Offer
'Official List' the official list of the UKLA
'Oriel Securities' Oriel Securities Limited
'Overseas Persons' Scheme Shareholders who are resident in,
ordinarily resident in, or citizens of,
jurisdictions outside the United Kingdom and the
United States where, as relevant, the Mix and
Match Facility or the sale, issue or transfer of
the Loan Notes would be a contravention of
applicable law
'Panel' the Panel on Takeovers and Mergers
'Pounds', 'pence' and '£' the lawful currency of the United Kingdom
'PPP' Public Private Partnership
'Profit Forecast' has the meaning given in Note 12, Appendix III
'Prospectus' means the prospectus to be published by
Carillion containing information on, amongst
other things, Carillion, the Enlarged Group and
the New Carillion Shares
'Registrar of Companies' the Registrar of Companies in England and Wales,
within the meaning of the Companies Act 1985
'Reorganisation Record Time' 6.00 pm on the Business Day immediately
proceeding the Court hearing to confirm the
Capital Reduction
'Scheme' the proposed scheme of arrangement under section
425 of the Companies Act 1985 between Alfred
McAlpine and the Scheme Shareholders to
implement the Acquisition
'Scheme Document' the document to be dispatched to Scheme
Shareholders in relation to the Scheme
comprising the particulars required by section
426 of the Companies Act 1985
'Scheme Meeting' the meeting of Scheme Shareholders to be
convened by order of the Court under section 425
of the Companies Act 1985 to consider and, if
thought fit, approve the Scheme (with or without
amendment), and any adjournment thereof
'Scheme Shareholders' holders of Scheme Shares
'Scheme Shares' the Alfred McAlpine Shares:
(i) in issue at the date of the Scheme
Document;
(ii) issued after the date of the Scheme
Document and before the Scheme Voting
Record Time; and
(iii) issued at or after the Voting Record Time
and before the Reorganisation Record Time
on terms that the original or any
subsequent holders thereof are, or shall
have agreed in writing to be, bound by the
Scheme
in each case other than Alfred McAlpine Shares
(if any) beneficially owned by the Carillion
Group and the Alfred McAlpine Preference
Shares
'Scheme Voting Record Time' 6.00 p.m. on the day which is two days before
the Scheme Meeting or, if the Scheme Meeting is
adjourned, 6.00 p.m. on the second day before
the date of such adjourned meeting
'Second Court Order' the order of the Court confirming the Capital
Reduction under section 137 of the Companies Act
1985 and authorising the re-registration of
Alfred McAlpine as a private limited company
under section 139 of the Companies Act 1985
'SEDOL' the London Stock Exchange Daily Official
List
'Slate Business' means the business of Alfred McAlpine Slate
Limited and Hilltop Slate Inc., both wholly
owned subsidiaries of Alfred McAlpine, which
include the roofing and architectural slate
business and aggregates business based in
North Wales and the roofing and architectural
slate business based in North Eastern United
States
'subsidiary', 'subsidiary have the meanings ascribed to them under the
undertaking', 'associated Companies Act 1985
undertaking' and 'undertaking'
'Tricorn Partners' Tricorn Partners LLP
'UKLA' the UK Listing Authority, being the Financial
Services Authority acting in its capacity as the
competent authority for the purposes of Part IV
of the Financial Services and Markets Act 2000
'United Kingdom' or 'UK' United Kingdom of Great Britain and Northern
Ireland
'United States', 'US' or 'USA' the United States of America, its territories
and possessions, any State of the United States
of America and the District of Columbia
'US Securities Act' the United States Securities Act of 1933 (as
amended)
'VAT' any value added tax imposed under Directive 2006
/112/EC, the Value Added Tax Act 1994 and/or any
primary or secondary legislation supplemental to
either of them
Unless otherwise stated, all times referred to in this announcement are
references to the time in London.
Any reference to any provision of any legislation shall include any amendment,
modification, re-enactment or extension thereof.
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