Minority Buyout Proposal
Peel Hldgs PLC
30 June 2004
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE UNITED STATES OF
AMERICA, CANADA, AUSTRALIA, JAPAN, THE REPUBLIC OF IRELAND OR SOUTH AFRICA
30 June 2004
FOR IMMEDIATE RELEASE
Peel Holdings p.l.c. ('Peel')
Recommended proposal for
Peel Acquisitions Ltd ('Acquisitions')
to buy-out the minority shareholdings in
Peel Holdings p.l.c.
for 1240p per Ordinary Share in cash
by way of a scheme of arrangement
under section 425 of the Companies Act 1985
• The Board of Directors of Peel and Acquisitions announce that they
have agreed the terms of a recommended Proposal to be made by Acquisitions for
the acquisition of all of the outstanding 6.63 per cent. of Peel Shares not
currently owned by the Majority Shareholders by way of a scheme of arrangement
under section 425 of the Companies Act.
• Under the Proposal, which is being recommended by Rothschild, Scheme
Shareholders will receive:
for each Scheme Share 1240p in cash
• As an alternative, eligible Scheme Shareholders can elect to receive
Loan Notes instead of all or part of their Cash Consideration receivable under
the Scheme.
• The Scheme Price represents a premium of approximately 36.6 per cent.
over the Closing Price of 907.5p per Peel Share on 29 June 2004, the last
dealing day prior to this announcement, and a premium of approximately 45.7
per cent. over the average Closing Price of a Scheme Share for the twelve
months up to that date.
• In addition, the Scheme Price represents a premium of approximately 2.9 per
cent. to the Adjusted Net Assets per Peel Share (further details of which are
set out in paragraph 6 of this Announcement) of 1205p as at 31 March 2004.
• Under the Proposal, the Majority Shareholders, who currently own 93.37
per cent. of Peel Shares, will not receive the Cash Consideration but instead
will receive in aggregate such number of ordinary shares of 25p each in
Acquisitions with an aggregate nominal value equal to the aggregate Cash
Consideration that would have been payable to them had Cash Consideration been
offered to and accepted by them in respect of all the Majority Shares in
exchange for the cancellation of the Majority Shares held by them under the
Cancellation Agreement.
• The Scheme is expected to become effective by mid-August and is subject to
the approval of Independent Scheme Shareholders at a Court Meeting, an
Extraordinary General Meeting of Peel and a Class Meeting.
• Peel has also today announced its preliminary results for the year ended
31 March 2004 details of which are contained in a separate announcement
to shareholders.
Commenting on the proposal, John Whittaker, Chairman of Acquisitions, said:
'The Majority Shareholders wish to be free to develop Peel in a more flexible
way that is commensurate with the prospects and risk profile of the Peel Group.
This may involve taking decisions that might be unattractive to remaining
minority shareholders. The Majority Shareholders want to provide minority
shareholders, who are faced with the limited liquidity of Peel Shares, with
an opportunity to realise their investments in Peel at a favourable time in
the property cycle. The Majority Shareholders have sought to put forward a
proposal at a generously priced level, which represents a significant
premium of approximately 36.6 per cent. to the prevailing share price and
2.9 per cent. to the Adjusted Net Assets of 1205p per share. In addition, the
Proposal may enable some minority shareholders to mitigate their liability to
capital gains tax and may enable shareholders to significantly increase the
income received on their capital when compared with the dividend yield of Peel
Shares.'
This summary should be read in conjunction with the full text of this
announcement.
Enquiries:
Rothschild
Richard Bailey, Andrew Thomas, Claudio Veritiero
Telephone: 0161 827 3800
The Directors of Peel Holdings p.l.c. accept responsibility for the information
contained in this announcement. To the best of the knowledge and belief of the
Directors, who have taken all reasonable care to ensure such is the case, the
information contained in this announcement is in accordance with the facts and
does not omit anything likely to affect the import of such information.
Rothschild, which is authorised and regulated by the Financial Services
Authority, is acting for Peel Holdings p.l.c and no one else in connection with
the Proposal and will not be responsible to anyone other than Peel Holdings
p.l.c. for providing the protections afforded to clients of Rothschild or for
providing advice in relation to the Proposal, the contents of this announcement
or any transaction or arrangement referred to herein.
Recommended proposal for Peel Acquisitions Limited to buy-out the minority
shareholdings in Peel Holdings p.l.c. for 1240p per Ordinary Share in cash
by way of a scheme of arrangement under section 425 of the Companies Act 1985
1. Introduction
Today, the Boards of Peel and Acquisitions announce that they have agreed the
terms of a recommended proposal by Acquisitions for the acquisition of all the
outstanding Ordinary Shares of Peel (other than those owned by the Majority
Shareholders). The outstanding Shares currently represent 6.63 per cent. of the
Ordinary Shares with full voting rights. The Proposal is to be effected by way
of a scheme of arrangement under section 425 of the Act. Acquisitions is a
company owned by the Majority Shareholders and incorporated for the purpose of
making the Proposal.
2. Responsibility for considering the Proposal
Rothschild has been appointed by Peel to provide an independent opinion on the
terms of the Proposal. As a consequence of the Peel Directors' involvement in
Acquisitions or of their connection to the proposed shareholders in Acquisitions
or their continuing involvement with Peel, the Board of Peel is precluded by the
rules of the City Code from giving advice to Peel Shareholders on the terms of
the Proposal and on the appropriate course of action for them to take.
This announcement sets out the background to the Proposal and explains that
Rothschild, as the independent adviser to Peel, considers the terms of the
Proposal to be fair and reasonable.
3. Summary of the terms of the Proposal
The Proposal will be effected by way of a scheme of arrangement under section
425 of the Act. Under the Scheme, holders of Scheme Shares will receive:
for each Scheme Share 1240p in cash
As an alternative to some or all of the Cash Consideration receivable under the
Scheme, eligible Scheme Shareholders may elect to receive Loan Notes in return
for the cancellation of their Scheme Shares.
The cash payment of 1240p per Scheme Share values the entire existing issued
share capital of the Company with full voting rights at approximately £832.4
million and the Scheme Shares at approximately £55.2 million.
The Scheme Price represents:
• a premium of approximately 36.6 per cent. over the Closing Price of
907.5p per Ordinary Share on 29 June 2004, being the last business day before
Peel announced the Proposal;
• a premium of approximately 45.7 per cent. over the average Closing
Price of 851.3p per Ordinary Share for the twelve months ended 29 June 2004,
being the last business day before Peel announced the Proposal; and
• a premium of approximately 2.9 per cent. to the Adjusted Net Assets of
1205p per Share as at 31 March 2004.
Further details of the Adjusted Net Assets are set out in paragraph 6 below and
in the preliminary announcement of the audited results of Peel for the year
ended 31 March 2004, which were also announced today.
The Majority Shareholders currently own or control 62,678,499 Ordinary Shares
(representing 93.37 per cent. of the issued ordinary share capital with full
voting rights). The Majority Shareholders have entered into the Cancellation
Agreement with Acquisitions under which they have agreed that in exchange for
the cancellation of the Majority Shares held by them at the Scheme Record Time,
Acquisitions will issue to them such number of ordinary shares of 25p each in
Acquisitions as have an aggregate nominal value equal to the aggregate Cash
Consideration which would have been payable to the Majority Shareholders if the
Cash Consideration had been offered to them and been accepted in respect of all
the Majority Shares, less the aggregate number of nil paid ordinary shares of
25p each in Acquisitions held by the Majority Shareholders as at the date of the
Cancellation Agreement. The Majority Shares held by the Majority Shareholders
will be cancelled under the Scheme and in connection with this, an equivalent
number of new Peel Shares will be issued to Acquisitions. The effect of the
Scheme will be that Peel will become a wholly owned subsidiary of Acquisitions.
The Majority Shareholders will not be eligible to receive either the Cash
Consideration or Loan Notes in respect of the Majority Shares.
All of the Directors who hold Ordinary Shares other than Mr John Whittaker will
be parties to the Scheme and have indicated that they intend to vote in favour
of the Proposal and to receive the Cash Consideration or the Loan Note
Alternative under the terms of the Scheme in respect of their aggregate holdings
of 160,008 Ordinary Shares, representing approximately 3.70 per cent. of the
Independent Scheme Shares. Other than Mr John Whittaker and his related
interests (further details of which are set out in paragraph 8), none of the
Directors will receive shares in Acquisitions.
Acquisitions proposes to finance the Proposal through, inter alia, a £55 million
acquisition facility being provided by The Royal Bank of Scotland plc and (to
the extent required) its own resources.
Full details of the Proposal (including the Explanatory Statement) which is
subject to the terms and conditions set out in Appendix I will be sent to
Shareholders in a document expected to be posted later today (the 'Scheme
Document').
4. Loan Note Alternative
Under the Proposal, eligible Scheme Shareholders may elect to receive Loan Notes
instead of all or part of the Cash Consideration due to them under the Scheme on
the following basis:
for every £1 of Cash Consideration under the Scheme £1 nominal of Loan Notes
The Loan Note Alternative is conditional upon the Scheme becoming effective.
Fractional entitlements to Loan Notes will not be issued, and entitlements will
be rounded down to the nearest £1 and Acquisitions will be entitled to retain
any such fractional entitlements.
The Loan Notes will be guaranteed by The Royal Bank of Scotland plc as to
principal only and not as to interest.
The Loan Notes will bear interest, payable half yearly in arrears (less any tax
required by law to be deducted therefrom) on 31 March and 30 September in each
year, at the rate per annum calculated to be one half of one per cent. below the
LIBOR rate offered at 11.00 a.m. by The Royal Bank of Scotland plc for six
months' sterling deposits on the first business day of the relevant interest
period. The first interest payment will be on 31 March 2005 in respect of the
period from (and including) the date of first issue of any Loan Note up to (but
excluding) 31 March 2005. Noteholders will have the right to redeem all or part
of their Loan Notes for cash at par (plus accrued interest) on such date (or if
later the date falling six months after first issue of the Loan Notes) and on
any subsequent interest payment dates up to and including 30 September 2014.
The Loan Notes will be transferable in units of £500 but no application will be
made for them to be listed or dealt on any stock exchange. The Loan Notes are
not being offered or issued to Restricted Overseas Persons (including US
Persons).
Rothschild has advised Peel that, in its opinion, based on market conditions at
29 June 2004 (being the latest practicable date prior to this announcement),
the estimated value of the Loan Notes, if they had been in issue on that date,
would have been 99p per £1 in nominal value.
Further details of the terms of the Loan Notes and instructions on how to elect
for the Loan Note Alternative will be provided in the Scheme Document.
5. Background to the Proposal
Peel was listed on the London Stock Exchange in 1983 (prior to which it had been
listed for a number of years on the Manchester Stock Exchange) and the listing
of Peel's shares was transferred to AIM in January 2000. The Majority
Shareholders have a long-standing involvement in the ownership and management of
the Peel Group and currently hold 93.37 per cent. of the Peel Shares with full
voting rights. Over a number of years the Majority Shareholders have supported
the funding and development of the Peel Group and have been influential in
building significant asset value and generating capital and income growth for
all Shareholders. However, given that the Majority Shareholders now own
approximately 93.37 per cent. of the Peel Shares with full voting rights,
liquidity in Peel's Shares has been limited and is likely to remain so for the
foreseeable future.
The Company has in the past sought to provide some liquidity in the Shares
through share buy-backs. The Peel Directors believe, however, that in view of
the limited liquidity and limited opportunities for Shareholders to realise the
capital value of their investment in a tax efficient manner, the Proposal should
be attractive. The Proposal should also benefit the Peel Group's business by
returning it to private ownership and thereby offering it the greater
flexibility afforded to private companies and by removing the ongoing cost
associated with complying with the AIM rules.
Accordingly, the Proposal provides an opportunity for Scheme Shareholders to
realise their investment in cash at a premium of approximately 36.6 per cent.
per Ordinary Share to the Closing Price on 29 June 2004 being the last business
day prior to this announcement. Furthermore, depending on their financial and
tax circumstances, eligible Scheme Shareholders may elect for the Loan Note
Alternative which may enable them to mitigate and/or defer their capital gains
tax liabilities (in respect of which Shareholders are recommended to take their
own independent advice). The Loan Note Alternative may also allow shareholders
to receive significantly higher income from their capital when compared with the
historic dividend yield of Peel Shares.
In addition, there are a number of other factors against which the Proposal
should be considered:
• In common with many property companies, Peel's Shares have traded in
recent years at a substantial discount to their reported net asset value. The
Directors believe that the size of the discount is due to widespread lack of
investor interest in smaller listed companies in certain sectors, in particular
those in the property sector and the recognition amongst the investor community
that the value of Adjusted Net Assets is a more appropriate estimation of the
underlying net asset value of property companies.
• The Directors consider that the period of significant growth of the
Peel Group has in recent years been due in particular to the strong performance
of The Trafford Centre (particularly following the recent five-yearly rent
reviews). Whilst the success of the now mature Trafford Centre is reflected in
the current valuation of £1,230 million, the Directors believe that the rate of
asset growth will decline.
• A material proportion of Peel's profit is currently generated from
investment properties and property development. The Directors consider that
profits from these activities have become increasingly difficult to predict
owing to the nature, timing and impact of asset disposals, the increasing
constraints on growth presented by planning regulations and the changing nature
of the Group's development activities.
• The Directors consider that the less positive economic outlook for
interest rates, consumer spending, house prices and property yields may have an
impact on future returns generated by Peel.
• The Group's development activities continue to comprise capital
intensive projects. However, many of these development projects are
characterised by a more volatile and uncertain profile for returns and
profitability, as is the case with the Group's investment in and development of
regional airports which are highly capital intensive and for which it is
difficult to predict when a capital return or profit will be achieved. However,
the Directors consider that an acceptable return will be generated by the
airports division over the long-term.
6. Adjusted Net Assets
In assessing the Proposal, Rothschild has had regard, inter alia, to the
net asset value of Peel extracted from the audited financial statements as at
31 March 2004. Set out below is a calculation which has been prepared by the
Peel Directors of the Adjusted Net Assets as at 31 March 2004, being the net
asset value as at 31 March 2004 adjusted for contingent taxation and the fair
value of financial assets and liabilities ('marking debt to market') in
accordance with FRS 13.
Net assets per
Ordinary
£' 000 Share
Shareholders funds at 31 March 2004 1,238,724 1845p
Less:
Adjustment for FRS 13 (91,973) (137p)
Adjustment for contingent tax liabilities (337,772) (503p)
Adjusted Net Assets at 31 March 2004 808,979 1205p
Shareholders should note that the Adjusted Net Assets has been prepared for
illustrative purposes only and because of its nature, cannot give a complete
picture of the financial position of Peel.
The Scheme Price represents a premium of approximately 2.9 per cent. to the
Adjusted Net Assets of 1205p per Share as at 31 March 2004.
Shareholders should note that the Directors consider that adjusted net asset
value, commonly referred to as 'triple net asset value', is in line with the
calculation of net asset value that will be reported by the Group in future
years following the introduction of new international accounting standards in
2005/06.
7. Property valuation
Independent valuations of most of the Group's investment properties and holdings
as at 31 March 2004 and, in respect of the remainder of the Group's properties,
as at 31 December 2003 and 2 February 2004, will be included in the Scheme
Document.
8. Information on the Majority Shareholders
Acquisitions, which was incorporated on 8 June 2004, has been established to
effect the acquisition of Peel's issued share capital pursuant to the Proposal.
Acquisitions is wholly owned by the Majority Shareholders (being the Whittaker
Group and the Olayan Group).
John Whittaker has been Chairman of Peel since 1973. He has led the development
of Peel since then including the re-flotation on the London Stock Exchange in
1983, the acquisitions of The Manchester Ship Canal Company, London Shop plc and
Clydeport plc, the development of The Trafford Centre, the transfer to AIM in
January 2000 and the £610 million bond issue secured against future rental
income from The Trafford Centre in 2000.
The Whittaker Group comprises Tokenhouse Holdings Limited (a private company
controlled and 99.4 per cent. owned by the trustees of the Whittaker family
trust), Cronkdrean Limited (a private company owned by Tokenhouse Holdings
Limited), Cheeseden Investment Limited (a private company owned by the trustees
of the Whittaker family trust) and Velida Investments Limited (a private company
ultimately owned by the trustees of the Whittaker family trust), together with a
pension fund in which family members of John Whittaker have an interest.
The Whittaker Group currently owns or controls 45,778,145 Ordinary Shares,
representing 68.20 per cent. of the Ordinary Shares with full voting rights.
The Olayan Group is a multi-national group with financial, commercial and
industrial interests in the USA, Europe and the Middle East. The Olayan Group
made its initial investment in Peel Shares in 1988 and increased its holding of
Peel Shares to the current level following a rights issue made by Peel in 1989
and subsequently acquired approximately 785,000 Convertible Preference Shares
which have since been redeemed or converted into Ordinary Shares. The Olayan
Group currently owns or controls 16,900,354 Ordinary Shares, representing 25.17
per cent. of the Ordinary Shares with full voting rights.
The Olayan Group has had board representation since 1991 and has contributed
significantly to the strategic direction of the business since that time. In the
16 years since their original investment, the Olayan Group has formed a good
working rapport with the Whittaker Group which is expected to continue after the
Scheme becomes effective.
9. Arrangements with the Majority Shareholders
The Majority Shareholders currently own or control in aggregate 100 per cent. of
the ordinary shares of 25p in Acquisitions. The Majority Shareholders currently
own or control in aggregate 62,678,499 Ordinary Shares representing 93.37 per
cent. of the issued Ordinary Shares with full voting rights.
The Majority Shareholders have entered into the Cancellation Agreement with
Acquisitions under which, conditionally upon the Scheme becoming effective, the
Majority Shares will be cancelled in consideration for the issue to the Majority
Shareholders of such number of ordinary shares of 25p each in Acquisitions as
have an aggregate nominal value equal to the aggregate Cash Consideration which
would have been payable to the Majority Shareholders if the Cash Consideration
had been offered to them and had been accepted in respect of all the Majority
Shares, less the aggregate number of nil paid ordinary shares of 25p each in
Acquisitions held by the Majority Shareholders as at the date of the
Cancellation Agreement. Under the Scheme, in respect of the Majority Shares
cancelled, Peel will issue an equivalent number of new ordinary shares of 25p
each to Acquisitions.
10. Management and employees
The board of Acquisitions has given assurances to Rothschild that, following the
Scheme becoming effective, the existing employment rights, including pension
rights, of all the employees of Peel will be fully safeguarded.
11. Resolutions and meetings
In order to enable the Proposal to become effective, it is intended that the
following meetings of Shareholders will be convened for 26 July 2004:
(a) the Court Meeting of Independent Scheme Shareholders to approve the
Scheme;
(b) the Extraordinary General Meeting to consider and, if thought fit, to
pass the resolutions necessary to approve and implement the Scheme and
sanction the related reduction of capital by the Company, to effect the
redesignations of share capital involved in the Scheme and to amend the
Articles of Association of the Company; and
(c) the Class Meeting to consider and, if thought fit, to pass the
resolution necessary to consent to the redesignation of share capital
involved in the Scheme.
Because of their prospective interests in shares in Acquisitions, the Majority
Shareholders will not be entitled to attend and vote at the Court Meeting and
will abstain from voting at the Extraordinary General Meeting in respect of the
Majority Shares held by them respectively. However, they will undertake to the
Court to be bound by the Scheme in respect of the Majority Shares held by them.
Further, the Majority Shareholders will not be entitled to participate in the
Class Meeting.
The Excluded Shareholders (who are connected to Peel or the Majority
Shareholders) to the extent that they hold Peel Shares as at the Scheme Record
Time will receive cash in exchange for Shares on the same terms as apply to
Independent Scheme Shareholders. The Excluded Shareholders will not receive
shares in Acquisitions. Because of the connection of the Excluded Shareholders
with Peel or the Majority Shareholders, the Excluded Shareholders will not be
entitled to attend and vote at the Court Meeting and will abstain from voting at
the Extraordinary General Meeting in respect of the Excluded Shares held by
them. The Excluded Shareholders will undertake to the Court to be bound by the
Scheme in respect of such Shares. The Excluded Shareholders will not be entitled
to participate in the Class Meeting.
Notices convening the above meetings, together with details of the resolutions
to be put to those meetings and details of the actions that Shareholders should
take will be provided in the Scheme Document.
13. Cancellation of AIM trading facility
If the Scheme is approved the London Stock Exchange will be requested to cancel
the trading facility of the Ordinary Shares on AIM with effect from the
Effective Date.
14. Disclosure of relevant securities in issue in accordance with
Rule 2.10 of the City Code
Pursuant to Rule 2.10 of the City Code, in connection with the proposed scheme
of arrangement Peel announces that it has 103,913,142 ordinary shares of 25p
each in issue (ISIN: GB0006784077). Of these, 36,785,416 are held by Largs
Limited, a wholly owned subsidiary of Peel and these shares have no voting
rights and do not have an entitlement to receive dividends and will not
participate in the proposed Scheme.
15. Opinion
It is the opinion of Rothschild that the Proposal is fair and reasonable. In
providing this advice they have taken into account, inter alia, the premium to
the Adjusted Net Assets, the factors set out in the Scheme Document and the
commercial assessments of the board of Peel.
Enquiries:
Rothschild
Richard Bailey, Andrew Thomas, Claudio Veritiero
Telephone: 0161 827 3800
The Directors of Peel Holdings p.l.c. accept responsibility for the information
contained in this announcement. To the best of the knowledge and belief of the
Directors, who have taken all reasonable care to ensure such is the case, the
information contained in this announcement is in accordance with the facts and
does not omit anything likely to affect the import of such information.
Rothschild, which is authorised and regulated by the Financial Services
Authority, is acting for Peel Holdings p.l.c. and no one else in connection with
the Proposal and will not be responsible to anyone other than Peel Holdings
p.l.c. for providing the protections afforded to clients of Rothschild or for
providing advice in relation to the Proposal, the contents of this announcement
or any transaction or arrangement referred to herein.
APPENDIX 1
TERMS AND CONDITIONS OF THE PROPOSAL
The Proposal is conditional upon the Scheme becoming effective. The Scheme will
become effective upon:
(i) approval of the Scheme by a majority in number representing at least
three-quarters in value of the holders of Independent Scheme Shares present
and voting in person or by proxy at the Court Meeting;
(ii) the resolutions required to implement the Scheme being passed at the
Extraordinary General Meeting;
(iii) the extraordinary resolution required to implement the Scheme being
passed at the Class Meeting;
(iv) the Scheme being sanctioned by the Court, with or without modification,
and confirmation of the reduction of capital involved therein by the Court;
(v) delivery to the Registrar of Companies in England and Wales for
registration of an office copy of the Order sanctioning the Scheme and
confirming the reduction of capital and, in relation to the reduction of
capital, registration of the Order by the Registrar of Companies in England and
Wales;
(vi) no government or governmental, supranational or trade agency or
regulatory body or court or other person or persons having instituted or
threatened any action, suit or investigation or having enacted or made any
statute or regulation or order that would (a) restrain, prohibit or otherwise
challenge the Scheme; (b) result in a material delay in the ability of
Acquisitions, or render it impossible or unduly onerous for it to acquire the
entire issued share capital of Peel when the Scheme becomes effective or render
impossible or unduly onerous the cancellation or transfer of the Scheme Shares;
(c) require the divestiture by Peel or any of its subsidiaries of all or any
material part of their businesses, assets or properties or impose any material
limitation on their ability to conduct their respective businesses and own their
respective assets or properties; (d) impose any material limitations on the
ability of Acquisitions to implement the Scheme; or (e) otherwise materially
adversely affect the financial position of Peel and its subsidiaries (taken as
a whole);
(vii) all authorisations, orders, grants, recognitions, confirmations,
consents, clearances, certificates, licences, permissions and approvals
necessary or appropriate for or in respect of the implementation of the Scheme
and the proposed acquisition of Peel having been obtained, in terms and in a
form reasonably satisfactory to Acquisitions, and where the absence of any such
authorisations, orders, grants, recognitions, confirmations, consents,
clearances, certificates, licences, permissions and approvals would, or might
reasonably be expected to, have a material adverse effect on the Enlarged Group
taken as a whole, these remaining in full force and effect and no indication of
an intention to revoke or not renew any of these being received where such
revocation or non-renewal would have a material adverse effect on the Enlarged
Group as a whole and all necessary filings in connection with the Proposal
having been made and all necessary waiting periods (including any extensions
thereof) under any applicable legislation or regulation of any jurisdiction and
all necessary statutory and regulatory obligations in connection with the
Proposal in any jurisdiction having expired, lapsed or been terminated;
(viii) acquisitions having not discovered that any financial, business
or any other information regarding the Peel Group which has been publicly
disclosed or announced at any time by Peel or any of its subsidiaries is
materially misleading or contains misrepresentations of facts or omits to state
a fact necessary to make the information contained therein not misleading, and
which in any such case is material in the context of the Scheme; and
(ix) since 31 March 2003, being the date to which the latest report and
accounts of Peel were made up, and unless otherwise publicly announced by Peel
on or prior to 30 June 2004 (whether in the preliminary announcement of the
results of Peel for the twelve months ended 31 March 2004 or otherwise):
(a) no litigation or arbitration proceedings, prosecutions or
other legal proceedings to which Peel or any other member of the Peel Group
is a party (whether as plaintiff or defendant or otherwise) in each case
which is both material and adverse in the context of the Peel Group taken
as a whole, having been instituted or threatened or remaining outstanding;
(b) there not having become apparent to Acquisitions any liability
(contingent or otherwise) which has not been disclosed or reflected or
provided for in the last published audited consolidated accounts of
Acquisitions or otherwise publicly disclosed being a liability of Peel or
any other member of the Peel Group which is material in the context of the
Peel Group taken as a whole; or
(c) them having been no material adverse change in the business,
financial or trading position of the Peel Group taken as a whole.
Acquisitions reserves the right to waive conditions (vi), (vii), (viii) and (ix)
in whole or in part.
Application to the Court at the Court Hearing to sanction the Scheme will not be
made unless conditions (i), (ii) and (iii) have been fulfilled and conditions
(vi), (vii), (viii) and (ix) above are fulfilled and/or waived by Acquisitions.
If the Scheme does not become effective on or before 30 September 2004, or such
later date (but no later than 31 December 2004 in any event) as Acquisitions and
Peel may agree and the Court may permit, it will not thereafter become
effective.
APPENDIX II
DEFINITIONS
In this announcement, unless the context otherwise requires, the following
expressions have the following meanings:
'Acquisitions' Peel Acquisitions Limited;
'Act' the Companies Act 1985, as amended from
time to time;
'AIM' the Alternative Investment Market of the
London Stock Exchange;
'Adjusted Net Assets' the net asset value of Peel extracted from
the audited financial statements as at
31 March 2004 adjusted for, inter alia,
contingent taxation and fair value of
financial assets and liabilities ('marking
debt to market') in accordance with FRS 13;
'business day' any day on which the London Stock Exchange
is open for business;
'Cancellation Agreement' the Cancellation Agreement dated 29 June
2004 and made between Acquisitions and the
holders of the Whittaker Group Shares and
the Olayan Group Shares, further details of
which will be set out in the Scheme
Document;
'Cash Consideration' the Scheme Price;
'City Code' the City Code on Takeovers and Mergers;
'Class Meeting' the separate general meeting of the holders
of Independent Scheme Shares to be convened
for 11:20 a.m. on 26 July 2004 or as soon
thereafter as the Extraordinary General
Meeting has adjourned or concluded) or any
adjournment thereof;
'Closing Price' the closing middle market quotation of the
relevant share;
'Court' the High Court of Justice in England and
Wales;
'Court Hearing' the hearing by the Court of the Petition to
sanction the Scheme under section 425 of
the Act and to confirm the reduction of
Peel's share capital under section 137 of
the Act;
'Court Meeting' the meeting of registered holders of
Independent Scheme Shares convened by
order of the Court under section 425 of the
Act, including any adjournment thereof;
'Effective Date' the date on which the Scheme becomes
effective in accordance with its terms;
'Enlarged Group' Acquisitions, Peel and its subsidiary
undertakings;
'Election Record Date' 12 August 2004;
'Excluded Shareholders' certain Scheme Shareholders who are
connected with Peel or the Majority
Shareholders and who currently hold in
aggregate 121,871 Scheme Shares;
'Excluded Shares' Scheme Shares which are held by the
Excluded Shareholders;
'Explanatory Statement' the explanatory statement from Rothschild
prepared in compliance with section 426 of
the Act to be set out in the Scheme
Document;
'Extraordinary General Meeting' the extraordinary general meeting of Peel
to be held on 26 July 2004, notice of which
will set out at the end of the Scheme
Document including any adjournment thereof;
'FRS 13' Financial Reporting Standard 13 issued by
the Accounting Standards Board;
'Independent Scheme Shareholders' the registered holders of Independent Scheme
Shares;
'Independent Scheme Shares' Scheme Shares other than the Excluded
Shares;
'Largs Shares' the 36,785,416 Ordinary Shares held in the
name of Largs Limited;
'LIBOR' London Inter-Bank Offer Rate;
'Loan Note Alternative' the loan note alternative forming part of
the Scheme under which Scheme Shareholders
may elect to receive Loan Notes in lieu of
all or part of the Cash Consideration to
which they would otherwise be entitled
under the Scheme;
'Loan Notes' the guaranteed, unsecured loan notes to be
issued by Acquisitions pursuant to the Loan
Note Alternative, further particulars of
which will be set out in the Scheme
Document;
'London Stock Exchange' London Stock Exchange plc;
'Majority Shares' the 62,678,499 Ordinary Shares currently
owned or controlled by the Whittaker Group
and by the Olayan Group, together with any
Ordinary Shares acquired by the Whittaker
Group prior to the Election Record Date;
'Majority Shareholders' the holders of Majority Shares;
'Olayan Group' collectively Crescent Holding GmbH,
Competrol (Luxembourg) S.a.r.l., Competrol
Establishment and Olayan Investments Company
Establishment;
'Olayan Group Shares' the 16,900,354 Ordinary Shares owned or
controlled by the Olayan Group or in which
the Olayan Group has an interest;
'Order' the order of the Court sanctioning the
Scheme under section 425 of the Act and
confirming the reduction of Peel's share
capital under section 137 of the Act;
'Peel Shares', 'Ordinary Shares' ordinary shares of 25p each in the capital
or 'Shares' of Peel;
'Peel Directors' or 'Directors' John Whittaker, Robert Eric Hough, Peter
Anthony Scott, Paul Philip Wainscott,
John Niven Duncan, Thomas Eardley Allison,
Michael George Butterworth, David Jonathan
Glover, Peter John Hosker and Peter John
Nears;
'Peel' or 'the Company' Peel Holdings p.l.c.;
'Peel Group' the Company, its subsidiaries and
associated undertakings;
'Ordinary Shares with full voting the ordinary shares of 25p each issued
rights' in the capital of Peel which hold full
voting rights;
'Proposal' the proposal for Acquisitions to acquire
Peel as described in the Scheme Document;
'Restricted Overseas Persons' holders of Scheme Shares whose addresses in
the register of members are in the USA,
Canada, Australia, Japan, the Republic of
Ireland and South Africa;
'Rothschild' N M Rothschild & Sons Limited;
'Scheme' the proposed scheme of arrangement under
section 425 of the Act between Peel and the
registered holders of (i) the Independent
Scheme Shares, (ii) the Excluded Shares,
(iii)the Whittaker Group Shares and (iv)
the Olayan Group Shares to be set out in
the Scheme Document, with, or subject to,
any modification, addition or condition
approved or imposed by the Court;
'Scheme Document' the document expected to be posted to
shareholders on the 30 June 2004 setting
out the details of the Proposal;
'Scheme Price' 1240p per Scheme Share;
'Scheme Shareholders' registered holders of Scheme Shares;
'Scheme Shares' (i) the Shares in issue at the date of the
Scheme Document (other than any Majority
Shares and the Largs Shares); (ii) such
other Shares, if any, as may be issued
after the date of the Scheme but before the
Court Meeting; and (iii) such other Shares
issued thereafter but prior to the Scheme
Record Time in respect of which the original
or any subsequent holders thereof are bound
by the Scheme, or shall by such time have
agreed in writing to be bound by the Scheme;
'Scheme Record Time' 5.00 p.m. on the business day before the day
on which the Order is drawn up and sealed
by the Court;
'Shareholders' registered holders of Ordinary Shares;
'Whittaker Group' together Tokenhouse Holdings Limited,
Cronkdrean Limited, Cheeseden Investment
Limited and Velida Investments Limited,
together with a pension fund in which
family members of John Whittaker have an
interest;
'Whittaker Group Shares' the 45,778,145 Ordinary Shares currently
owned or controlled by members of the
Whittaker Group or in which members of the
Whittaker Group have an interest.
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