Merger with Mirror Gp -Pt1
TRINITY PLC
30 July 1999
PART 1
Not for release, publication or distribution in or into the
United States of America, Canada, Australia or Japan
Merger of Trinity and Mirror Group
creating the UK's largest newspaper publishing group
Introduction
* The boards of Trinity and Mirror Group announce that they
have reached agreement on the terms of a proposed merger to
form Trinity Mirror plc, creating a major UK media group with
a unique combination of national and regional brands. The
Merged Group will be the largest newspaper publisher in the UK
by weekly circulation and will be:
- the largest regional newspaper publisher in the UK with a
broad and diverse range of leading regional and local
newspaper titles with particular strengths in the Midlands,
the North East, the North West, Scotland and Wales
- the second largest national newspaper publisher in the
UK, publishing The Mirror, Sunday Mirror and Sunday People
together with the leading sports publication The Racing Post
- the largest newspaper publisher in Scotland, publishing
the Daily Record and Sunday Mail
Terms
* Under the terms of the Merger, Mirror Group Shareholders
will receive 0.325 New Trinity Shares and 82p in cash for each
Mirror Group Share. Trinity and Mirror Group Shareholders
will hold approximately 48.4 per cent. and 51.6 per cent.
respectively of the Merged Group's issued share capital
* The terms of the Merger value each Mirror Group Share at
approximately 271.5p and the whole of the issued share capital
of Mirror Group at £1,241 million
* The Merger terms will provide Mirror Group Shareholders
with a mix and match facility which will allow them to vary
the proportions in which they receive New Trinity Shares and
cash
* The Merger has the unanimous support and recommendation
of the boards of both Trinity and Mirror Group
* Irrevocable undertakings to accept the Merger terms have
been received from Phillips & Drew Fund Management Limited (in
respect of approximately 14.7 per cent. of Mirror Group
Shares) and the Directors of Mirror Group who hold Mirror
Group Shares (in respect of 0.02 per cent. of Mirror Group
Shares)
Benefits of the Merger
* The boards of Trinity and Mirror Group believe that
significant value can be created from the considerable
commercial, financial and strategic benefits resulting from a
combination of the two companies given the Merged Group's
financial scale and strength
* The Merged Group will be able to exploit new media
opportunities by leveraging off its enhanced content, consumer
reach and ability to deliver on-line communities thereby
generating advertising and e-commerce revenue opportunities
* The Merged Group will have balanced revenue streams
generating broadly equivalent levels of turnover from
advertising revenues and other revenues, including circulation
* The boards of Trinity and Mirror Group expect that annual
pre-tax cost savings will amount to at least £15 million by
the end of 2002
* If the Merger had completed on 1 January 1998, the Merged
Group would have had Pro Forma Turnover of £1,003 million and
Pro Forma Operating Profit of £217 million in 1998
* The aggregate market capitalisation of the Merged Group
would be approximately £1,604 million, based on current market
values and after deducting the cash payable to Mirror Group
Shareholders
Management and offices
* The Merged Group will benefit from the strength and
experience of the management teams of both companies. The
board of the Merged Group will be drawn equally from the
boards of Trinity and Mirror Group
* Sir Victor Blank will be Chairman and Peter Birch will be
the senior non-executive director of the Merged Group. The
executive will comprise: Philip Graf who will be Chief
Executive; John Allwood who will be Deputy Chief Executive and
Finance Director; Mike Masters who will have overall
responsibility for Scotland and Ireland, the regional
businesses and the magazine and exhibition businesses; Stephen
Parker and Mark Haysom who will each have certain
responsibilities for parts of the regional businesses; Roger
Eastoe who will be responsible for the national titles and The
Racing Post; Cornel Riklin who will be responsible for group
operations and new media; and Paul Vickers who will be
responsible for corporate and legal services
* The Merged Group will have its head office in London and
registered office in Chester
Sir Victor Blank, Chairman of Mirror Group, said:
'The Merger creates a powerful media group with a significant
competitive advantage. The strategic fit between our two
businesses enables us to build further on our market-leading
positions and unique stable of national and regional titles.'
Peter Birch, Chairman of Trinity, said:
'The combination of Trinity and Mirror Group will create the
largest newspaper publishing group in the UK by weekly
circulation. The Merged Group will have enhanced scale and
financial strength providing a strong platform for future
expansion and enabling it to take a leading role in the media
industry.'
This summary should be read in conjunction with the full text
of the announcement. Appendix III to the announcement
contains the definitions of terms used in this summary and in
the announcement. A presentation to analysts will be held at
9.30 am and a briefing for the press will be held at 11:30 am
today at the City Presentation Centre, 4 Chiswell Street,
London EC1.
Enquiries :
Trinity plc Mirror Group PLC
Peter Birch 0171 457 2345 Sir Victor Blank 0171 293 3000
Philip Graf John Allwood
Greenhill & Co. SG Hambros Corporate Finance Advisory
Simon Borrows 0171 440 0400 Antony Beevor 0171 676 6000
Geoffrey Austin
Salomon Smith Barney Warburg Dillon Read
Christian Purslow 0171 721 2000 Peter Kiernan 0171 567 8000
Simon Warshaw
Gavin Anderson Finsbury
Richard Constant 0171 457 2345 Rupert Younger 0171 251 3801
Tom Hampson
Greenhill & Co., which is regulated by The Securities and
Futures Authority Limited, is acting for Trinity and no one
else in connection with the Merger and will not be responsible
to anyone other than Trinity for providing the protections
afforded to customers of Greenhill & Co., nor for providing
advice in relation to the Merger.
Salomon Smith Barney, which is regulated by The Securities and
Futures Authority Limited, is acting for Trinity and no one
else in connection with the Merger and will not be responsible
to anyone other than Trinity for providing the protections
afforded to customers of Salomon Smith Barney, nor for
providing advice in relation to the Merger.
SG Hambros Corporate Finance Advisory, a division of Societe
Generale, is acting for Mirror Group in connection with the
Merger and no one else and will not be responsible to anyone
other than Mirror Group for providing the protections afforded
to customers of SG Hambros Corporate Finance Advisory nor for
providing advice in relation to the Merger. Societe Generale
is regulated by The Securities and Futures Authority Limited
for the conduct of investment business in the UK.
Warburg Dillon Read, the investment banking division of UBS
AG, which is regulated in the United Kingdom by The Securities
and Futures Authority Limited, is acting for Mirror Group in
connection with the Merger and no one else and will not be
responsible to anyone other than Mirror Group for providing
the protections afforded to customers of Warburg Dillon Read
nor for providing advice in relation to the Merger.
The availability of the Offer to persons not resident in the
UK may be affected by the laws of the relevant jurisdiction.
Shareholders who are not resident in the UK should inform
themselves about, and observe, any applicable requirements.
The Offer will not be made, directly or indirectly, in or
into, and will not be capable of acceptance in or from, the
United States, Canada, Australia or Japan, subject to certain
exceptions. Accordingly, this announcement is not being and,
unless the agreement of Trinity is obtained, the Merger
Document and any related offering documents will not be, and
must not be, mailed or otherwise distributed or sent in, into
or from the United States, Canada, Australia or Japan and
doing so may render invalid any purported acceptance of the
Offer, subject to certain exceptions.
The New Trinity Shares to be issued pursuant to the Offer have
not been and will not be registered under the US Securities
Act of 1933, as amended, or under the securities laws of any
state or other jurisdiction of the United States, Canada,
Australia or Japan. The New Trinity Shares may not be
offered, sold, resold, delivered or transferred, directly or
indirectly, in or into the United States, Canada, Australia or
Japan except pursuant to exemptions from that Act or other
applicable requirements of such jurisdictions and with the
agreement of Trinity. This press release does not constitute
an offer of securities for sale in the United States, Canada,
Australia or Japan.
30 July 1999
Not for release, publication or distribution in or into the
United States of America, Canada, Australia or Japan
Merger of Trinity and Mirror Group
creating the UK's largest newspaper publishing group
Introduction
The boards of Trinity and Mirror Group announce that they have
reached agreement on the terms of a proposed merger to form
Trinity Mirror plc. The combination of the two companies will
create a major UK media group with a unique combination of
national and regional brands.
The Merger is to be effected by way of a recommended offer to
be made by Greenhill & Co. and Salomon Smith Barney on behalf
of Trinity for all of the issued and to be issued share
capital of Mirror Group. Trinity and Mirror Group
Shareholders will hold approximately 48.4 per cent. and 51.6
per cent. respectively of the issued share capital of the
Merged Group, assuming no further issue of shares and before
the exercise of any options.
Under the terms of the Merger, Mirror Group Shareholders will
receive 0.325 of a New Trinity Share and 82p in cash for each
Mirror Group Share. The Merger values each Mirror Group Share
at approximately 271.5p and the whole of the issued share
capital of Mirror Group, assuming no exercise of Mirror Group
share options, at £1,241 million, on the basis of the closing
middle market price of 583p per Trinity Share on 29 July 1999
(the last business day prior to this announcement).
The aggregate market capitalisation of the Merged Group would
be approximately £1,604 million, based on the closing middle
market price of Trinity Shares on 29 July 1999 (the last
business day prior to this announcement) and after deducting
the cash payable under the Offer.
The Merger has the unanimous support and recommendation of the
boards of both Trinity and Mirror Group.
Background to the Merger
The boards of Trinity and Mirror Group believe that the Merger
will create a major UK media group with a unique combination
of national and regional brands. The Merged Group will be, by
weekly circulation, the:
* largest newspaper publisher in the UK;
* largest regional newspaper publisher in the UK (including
three of the top ten regional evening newspapers and three of
the top six regional Sunday newspapers);
* second largest publisher of national newspapers in the
UK; and
* largest newspaper publisher in Scotland and Wales and a
major newspaper publisher in Northern Ireland.
Over the last ten years Trinity's strategy has been to focus
on maintaining and developing its regional and local newspaper
franchises in the UK while seeking to acquire new brands which
offer value to shareholders and expand further the scale of
the Trinity Group. This has been achieved by: the disposal of
non-core businesses (its paper and packaging interests in 1992
and its North American newspaper business in 1997 and 1998);
organic growth supported by a continuous process of investment
in technology and in modern press facilities; together with
its lead in regional newspaper consolidation through a number
of acquisitions, including the Thomson regional newspaper
businesses in 1995, which were acquired for £327.5 million.
Over the last five years Mirror Group has invested heavily in
its newspaper production facilities making it one of the most
efficient publishers of national newspapers in the UK. Mirror
Group has also expanded its portfolio of media activities,
most notably through the acquisition of the regional
newspaper, magazine and exhibition businesses of Midland
Independent Newspapers plc in 1997 for £305 million.
Following the appointment of John Allwood as Chief Executive
of Mirror Group in January 1999, Mirror Group undertook a
review to redefine the strategic direction of the company.
The resulting strategy has been to: continue to implement a
plan for the rejuvenation of Mirror Group's National and
Scottish titles; develop further its market leading regional
businesses by organic growth and acquisition; invest in high
growth areas particularly involving the internet; and dispose
of non-core assets. Since that time considerable progress has
been made in all these areas, significantly enhancing the
market value of Mirror Group and reducing its indebtedness.
Reasons for and benefits of the Merger
The Merger of Trinity and Mirror Group furthers the strategies
of both companies. It establishes a broadly based media group
with a larger portfolio of regional and national newspaper
titles, an enlarged magazine and exhibition business and
provides greater potential for further development of new
media activities. At the same time, the enhanced scale and
greater management resources of the Merged Group will allow it
to take advantage of future growth opportunities both
organically and by acquisition in the UK and overseas.
The boards of Trinity and Mirror Group believe that there will
be considerable commercial, financial and strategic benefits
from the combination of the two companies which will create
significant value for shareholders of the Merged Group. The
combination of the two companies will also bring improved
prospects for the Merged Group's shareholders through:
- enhanced scale and financial capacity;
- balanced revenue streams; and
- integration cost savings and synergies.
Enhanced scale and financial capacity
The Merged Group will benefit from enhanced scale, healthy
interest cover and a significant on-going cash generation
capacity. If the Merger had completed on 1 January 1998, the
Merged Group would have had Pro Forma Turnover of £1,003
million and Pro Forma Operating Profit of £217 million in
1998. The aggregate market capitalisation of the Merged Group
would be approximately £1,604 million, based on current market
values and after deducting the cash payable under the Offer.
In regional newspapers the Merger will combine Trinity's
strong franchises in the North East, North West, Scotland and
Wales with Mirror Group's significant and complementary
presence in the Midlands and Scotland. The combined regional
business, with 155 titles and an aggregate weekly circulation
of approximately 11.8 million, will be the largest UK regional
newspaper publisher and will have a portfolio of strong brands
with an enhanced market position. The increased size of the
regional business will enable it to grow both organically and
by participating in the continuing consolidation of the sector
through acquisitions. In addition, the enlarged regional
businesses will have wider geographic coverage for the
national sales houses and will present enhanced opportunities
to take advantage of customer databases. The Merged Group
will also have reduced exposure to individual regional
economies.
The Merged Group will continue the plan for the rejuvenation
of its leading daily and Sunday national newspapers from a
position of greater financial strength. The Merged Group's
publication of Daily Record, Scotland's leading daily
newspaper, and Sunday Mail, Scotland's leading Sunday
newspaper, combined with its regional and local titles will
give it an unparalleled position in Scotland. The Merged
Group will also have the UK's leading sports newspaper, The
Racing Post. The combination of the respective magazines and
exhibition operations will create a business with greater
critical mass. Expansion into other media areas in the UK and
existing media areas outside of the UK can also be considered.
The enhanced scale of the Merged Group's portfolio of local
and national brands will enable it to exploit new media
opportunities more effectively, leveraging off its enhanced
content, consumer reach and ability to deliver on-line
communities thereby generating advertising and e-commerce
revenue opportunities.
Balanced revenue streams
The combination of the national and regional titles creates a
company with a balanced revenue base. Trinity currently
derives a substantial proportion of its revenue from regional
classified advertising, which has a tendency to be cyclical
(particularly recruitment advertising), whilst Mirror Group
derives a substantial proportion of its revenue from copy
sales and display advertising, which are less cyclical.
The 1998 contributions to Pro Forma Turnover for the Merged
Group are shown below:
Turnover by Mirror Trinity Merged Group
division (£m) Group
National newspapers 397 58% - - 397 40%
Scotland 110 16% - - 110 11%
Regional newspapers 132 19% 311 97% 443 44%
Magazines & 20 3% 10 3% 30 3%
Exhibitions
Sports 23 4% - - 23 2%
682 100% 321 100% 1003 100%
Turnover by type (excluding Magazines & Exhibitions
and Sport) (£m)
Advertising 292 46% 219 70% 511 54%
Circulation 304 48% 65 21% 369 39%
Other 43 6% 27 9% 70 7%
639 100% 311 100% 950 100%
The 1998 contribution of the national newspapers to the Pro
Forma Operating Profit of the Merged Group would have been
approximately 32 per cent. and that of the Scottish
newspapers, regional newspapers, sports publications and other
media revenues would have been approximately 68 per cent.
Note: The above figures include Trinity's Northern Ireland
business.
Integration cost savings and synergies
The boards of Trinity and Mirror Group believe that
integration cost savings and synergies resulting from the
Merger will include:
* production efficiencies and cost reductions through
printing and pre press reorganisation;
* purchasing synergies; and
* overhead savings through amalgamation of departments and
offices.
The boards of Trinity and Mirror Group expect that annual pre-
tax cost savings will amount to at least £15 million by the
end of 2002.
Board of the Merged Group
The Merged Group will benefit from the strength and experience
of the management teams of both companies. The board of the
Merged Group will be drawn equally from the boards of Trinity
and Mirror Group.
Sir Victor Blank will be Chairman and Peter Birch will be the
senior non-executive director of the Merged Group.
Philip Graf will be Chief Executive of the Merged Group and
John Allwood will be Deputy Chief Executive and Finance
Director. Mike Masters will have overall responsibility for
Scotland and Ireland, the regional businesses and the magazine
and exhibition businesses. Stephen Parker and Mark Haysom
will each have certain responsibilities for parts of the
regional businesses. Roger Eastoe will be responsible for the
national titles and The Racing Post. Cornel Riklin will be
responsible for group operations and new media. Paul Vickers
will be responsible for corporate and legal services.
Sir Angus Grossart, Roger Harrison, Penny Hughes and David
Marlow will be non-executive directors.
The Directors of Mirror Group joining the Merged Group's board
will be appointed on the Offer becoming or being declared
wholly unconditional.
The Merged Group will have its head office in London and
registered office in Chester.
Information on Trinity
Trinity is the leading publisher of regional and local
newspapers in the UK by total weekly circulation, publishing
in excess of 120 titles.
Since the early 1990s, Trinity has grown substantially through
the acquisition of newspaper publishing businesses within the
British Isles, whilst disposing of its publishing activities
in North America and other non-publishing activities.
The table below shows the major paid-for titles in Trinity's
current portfolio of newspaper titles.
Morning Evening Sunday
Belfast - Belfast Sunday Life
Telegraph
Cardiff Western Mail South Wales Echo Wales on Sunday
Huddersfield - Daily Examiner -
Liverpool Daily Post Liverpool Echo -
Newcastle The Journal Evening Sunday Sun
Chronicle
Teesside - Evening -
Gazette
Trinity also has major weekly publishing interests in
Chester/North Wales, Scotland and the South East as well as
publishing a range of local weekly titles from the daily
centres. In addition, Trinity publishes the Sunday Business
Post in Ireland and a series of national niche advertising
publications serving consumer and business markets.
Trinity generated Operating Profits of £78 million (1997: £71
million, 1996: £60 million) from Turnover of £321 million
(1997: £300 million, 1996: £276 million) in the year ended
27 December 1998. Trinity had Earnings Per Share of 35.9p
(1997: 31.9p, 1996: 26.1p) in the year ended 27 December 1998.
As at 27 December 1998 Trinity had Net Assets of £380 million.
Information on Mirror Group
Mirror Group is a leading publisher of national and regional
newspapers in the UK and has interests in magazines,
exhibitions, TV and new media.
Mirror Group has a record of strong turnover and pre-
exceptional profits growth over the last five years. Mirror
Group expanded into regional newspapers, magazines and
exhibitions with the acquisition of Midland Independent
Newspapers plc in November 1997 for £305 million.
The table below highlights the major paid-for titles in Mirror
Group's portfolio of newspaper titles:
National newspapers The Mirror
Sunday Mirror
Sunday People
Scotland Daily Record
Sunday Mail
Regional Newspapers Birmingham Evening Mail
The Birmingham Post (morning)
Sunday Mercury
Coventry Evening Telegraph
News Letter
Sports The Racing Post
Mirror Group has major weekly publishing interests in the
Midlands and Northern Ireland. Mirror Group also has several
principal internet interests which include its free internet
access service, ic24.net, the jointly-owned Sporting-Life.com
and its joint venture with the Tote, Totalbet. Mirror Group's
wholly-owned and joint ventured web sites have achieved in
excess of 30 million page accesses per month.
Mirror Group generated Operating Profits of £138 million
(1997: £114 million, 1996: £99 million) from Turnover of £697
million (1997: £559 million, 1996: £538 million) in the 53
weeks ended 3 January 1999. Mirror Group had Earnings Per
Share of 15.6p (1997: 15.6p, 1996: 14.3p) in the 53 weeks
ended 3 January 1999. As at 3 January 1999 Mirror Group had
Net Assets of £28 million.
Interim results and current trading
The full interim results of both Trinity and Mirror Group will
be announced on or before the date of posting of the formal
documents relating to the Merger.
Trinity and Mirror Group today announced the headline figures
of their interim results. Trinity achieved turnover of £168.0
million (1998: £161.8 million from continuing operations),
profits before tax of £42.5 million (1998: £36.2 million) and
earnings per share of 21.1p (1998: 17.9p) for the 26 week
period ended 27 June 1999. Trinity had net debt of £57.2
million as at 27 June 1999. Mirror Group achieved turnover of
£360 million (1998: £355 million), profits before tax (and
exceptional items) of £55 million (1998: £49 million) and
earnings per share (before exceptional items) of 8.8p (1998:
7.7p) for the 26 week period (1998: 27 week period) ended 4
July 1999. Mirror Group had net debt of £311 million as at
4 July 1999.
Both Trinity and Mirror Group are currently trading in line
with management expectations.
Details of the Merger
The Merger is to be effected by way of a recommended offer,
which will be made by Greenhill & Co. and Salomon Smith Barney
on behalf of Trinity, for all of the issued and to be issued
share capital of Mirror Group and which will be subject to the
terms and conditions set out below and in Appendix I and to be
set out in the Merger Document and the form of acceptance.
Under the terms of the Offer, Mirror Group Shares will be
exchanged for New Trinity Shares and cash on the following
basis:
0.325 of a New Trinity Share and 82p in cash for each Mirror
Group Share
and so in proportion for any other number of Mirror Group
Shares held. The Offer will contain a Mix and Match Election,
enabling Mirror Group Shareholders to vary (to the extent of
equal and opposite elections by others) the proportions in
which they receive New Trinity Shares and cash in exchange for
their holdings of Mirror Group Shares. Further details of the
Mix and Match Election are set out below.
Assuming acceptance in full of the Offer, no further issue of
shares and before the exercise of any options, Trinity
Shareholders will, in aggregate, hold approximately 48.4 per
cent. and Mirror Group Shareholders will, in aggregate, hold
approximately 51.6 per cent. of the Merged Group's issued
share capital. The terms of the Merger value each Mirror
Group Share at approximately 271.5p and the whole of the
issued share capital of Mirror Group, assuming no exercise of
Mirror Group share options, at £1,241 million, based on the
closing middle market price of 583p per Trinity Share on 29
July 1999 (the last business day prior to this announcement).
Details of the financial effects of acceptance of the Offer
are set out in Appendix II.
Irrevocable undertakings
Irrevocable undertakings to accept the Offer have been
received from the Directors of Mirror Group who hold Mirror
Group Shares in respect of 76,168 Mirror Group Shares
representing in aggregate 0.02 per cent. of Mirror Group's
existing issued share capital. The terms of the irrevocable
undertakings given by the Directors of Mirror Group require
acceptance of the Offer even if a competing or higher offer is
made by a third party.
In addition, Phillips & Drew Fund Management Limited has
irrevocably undertaken to accept the Offer in respect of
67,214,806 Mirror Group Shares representing approximately 14.7
per cent. of Mirror Group's existing issued share capital
(subject to any amendment by its client(s) to its authority
affecting its ability to do so). The terms of the undertaking
require Phillips & Drew Fund Management Limited to accept the
Offer by not later than 3.30 p.m. on the eleventh day after
the Merger Document is despatched to Mirror Group
Shareholders, except that Phillips & Drew Fund Management
Limited may (subject to certain exceptions) accept a competing
offer for the entire issued share capital of Mirror Group
which includes a cash offer or full cash alternative which
values each Mirror Group Share at or in excess of 301p,
provided such competing offer is made within ten days of the
posting of the Merger Document.
Recommendation
The Merger has the unanimous support and recommendation of the
boards of both Trinity and Mirror Group. In view of the size
of the Merger, it will be conditional, inter alia, upon the
approval of Trinity Shareholders. The conditions to the
Merger are set out in Appendix I.
The Directors of Trinity, who have been so advised by
Greenhill & Co., consider the Merger to be in the best
interests of Trinity Shareholders as a whole. In providing
advice to the Directors, Greenhill & Co. has taken into
account the Trinity Directors' commercial assessments. The
Directors of Trinity will unanimously recommend that Trinity
Shareholders vote in favour of the necessary resolution(s) to
approve the Merger to be proposed at the Extraordinary General
Meeting to be convened for the purpose of considering, inter
alia, such resolution(s), as they intend to do in respect of
the Trinity Shares in which they are beneficially interested,
amounting to 0.061 per cent. of the issued share capital of
Trinity.
The Directors of Mirror Group, who have been so advised by SG
Hambros and Warburg Dillon Read, consider the terms of the
Merger to be fair and reasonable. In providing advice to the
Directors of Mirror Group, SG Hambros and Warburg Dillon Read
have taken into account the Mirror Group Directors' commercial
assessments. The Directors of Mirror Group will unanimously
recommend all Mirror Group Shareholders to accept the Offer,
as they have irrevocably undertaken to do in respect of their
entire personal holdings, representing in aggregate 0.02 per
cent. of Mirror Group's existing issued share capital.
Competition approval and divestment of Northern Ireland titles
On 23 July 1999 the Secretary of State for Trade and Industry
announced that he was giving consent to Trinity for the
proposed transfer of the newspaper titles currently published
by Mirror Group to Trinity on the condition that it divests
its four Northern Ireland titles (the Belfast Telegraph,
Sunday Life, Community Telegraph and Farm Trader) and their
related newspaper assets. A draft of the conditions to the
consent was published on the same day and interested parties
were requested to comment on the wording by 6 August 1999.
Trinity has received a number of expressions of interest from
various parties with regard to the acquisition of its Northern
Ireland business. Trinity has satisfied itself that the
divestment of this business can be achieved efficiently and on
favourable terms.
Further details of the Merger
Mirror Group Shares will be acquired under the Offer fully
paid and free from all liens, equitable interests, charges,
encumbrances and other interests and third party rights of any
nature whatsoever and together with all rights now or
hereafter attaching to them including (without limitation) the
right to receive and retain all dividends and distributions
declared, made or payable hereafter.
The New Trinity Shares to be issued pursuant to the Merger
will be issued credited as fully paid and free from all liens,
equitable interests, charges and encumbrances and will rank
pari passu in all respects with the existing Trinity Shares
including, without limitation, the right to receive and retain
the interim dividend to be declared and paid by Trinity in
respect of the year ending 26 December 1999.
Full acceptance of the Offer, assuming no exercise of options
under the Mirror Group Share Option Schemes, would result in
the issue of approximately 148.5 million New Trinity Shares,
representing approximately 51.6 per cent. of Trinity's
enlarged issued share capital and a total payment of
approximately £375 million in cash. The cash payable under
the Merger will be provided by Trinity from new facilities.
Fractions of New Trinity Shares will not be issued to
accepting Mirror Group Shareholders. Fractional entitlements
will be aggregated and sold in the market with the net
proceeds distributed pro rata to the Mirror Group Shareholders
entitled thereto.
Mix and match election
Mirror Group Shareholders (other than certain overseas
shareholders) who validly accept the Offer may elect, subject
to availability, to vary the proportions in which they receive
New Trinity Shares and cash in respect of their holdings of
Mirror Group Shares. The maximum number of New Trinity Shares
to be issued and the maximum amount of cash to be paid under
the Offer will not be varied as a result of the Mix and Match
Election. Accordingly, Trinity's ability to satisfy Mix and
Match Elections made by Mirror Group Shareholders will depend
on other Mirror Group Shareholders making equal and opposite
elections.
Mirror Group Shareholders who make Mix and Match Elections
will not know the exact number of New Trinity Shares, or the
amount of cash, which they will receive until settlement of
the consideration under the Offer. An announcement will be
made, when the Offer becomes or is declared wholly
unconditional, of the approximate extent to which Mix and
Match Elections will be satisfied. To the extent that
elections cannot be satisfied in full, they will be scaled
down on a pro rata basis. To the extent that elections can be
satisfied, Mirror Group Shareholders will receive New Trinity
Shares instead of cash or vice versa.
The Mix and Match Election will remain open until 3.00 p.m. on
the first closing date of the Offer. If the Offer is then not
capable of being declared unconditional as to acceptances,
Trinity may (or may not) extend the Mix and Match Election to
a later date. If the Mix and Match Election has been closed,
Trinity reserves the right to re-introduce a mix and match
facility, subject to the rules of the Code.
Further details of the Mix and Match Election will be included
in the Merger Document.
Inducement fee
Trinity and Mirror Group have signed an agreement as an
inducement to both companies to complete the Merger. Under
this agreement Mirror Group will pay an inducement fee of
£12 million to Trinity in the event that the Offer lapses or
is withdrawn following an announcement of any proposal
involving a change of control of Mirror Group by a third party
which subsequently becomes unconditional. Similarly, Trinity
will pay an inducement fee of £10 million to Mirror Group in
the event that the Offer lapses or is withdrawn following
announcement of any proposal involving a change of control of
Trinity by a third party which subsequently becomes
unconditional.
Employees
The boards of Trinity and Mirror Group believe that the
greater strength, market position and growth prospects of the
Merged Group will enhance career prospects for employees.
Existing employment rights, including pension rights, of
employees of the Trinity Group and Mirror group will be fully
safeguarded.
Mirror Group Share Option Schemes
The Offer will extend to any Mirror Group Shares
unconditionally issued or allotted, while the Offer remains
open for acceptance (or by such earlier date as Trinity,
subject to the City Code, determines), pursuant to the
exercise of options or vesting of awards under the Mirror
Group Share Option Schemes or otherwise. It is intended that
appropriate proposals will be made to participants in the
Mirror Group Share Option Schemes in due course.
Dividend policy of Merged Group
The dividend policy of the Merged Group will be progressive
and will take into account the Merged Group's operating
results and the investment needs of its constituent
businesses.
Settlement, listing and dealings
Subject to the Offer becoming or being declared unconditional
in all respects, settlement of the consideration to which any
Mirror Group Shareholder is entitled under the Offer (except
in the case of certain Mirror Group overseas shareholders)
will be effected (i) in the case of acceptances received,
complete in all respects, by the date on which the Offer
becomes or is declared unconditional in all respects, within
14 days of such date, or (ii) in the case of acceptances of
the Offer received, complete in all respects, after the date
on which the Offer becomes or is declared unconditional in all
respects but while it remains open for acceptance, within 14
days of such receipt.
Application will be made to the London Stock Exchange for the
New Trinity Shares to be admitted to the Official List. It is
expected that listing will become effective and that dealings,
for normal settlement, will begin on the first business day
following the day on which the Offer becomes or is declared
unconditional in all respects (save for any condition relating
to Admission).
Further details on settlement, listing and dealings will be
included in the formal documents to be sent to Mirror Group
Shareholders.
General
The following persons acting in concert with Trinity are
interested in the following number of Mirror Group Shares:
Citibank N.A. 473,000
The Trinity Retirement Benefit Scheme* 103,700
Salomon Brothers UK Equity Ltd. 97,228
* Under the discretionary management of Phillips & Drew Fund
Management Limited.
Except as set out above, neither Trinity, nor, so far as
Trinity is aware, any person acting in concert with Trinity,
owns or controls any Mirror Group Shares or holds any options
to acquire any Mirror Group Shares or has entered into any
derivatives referenced to securities in Mirror Group.
The formal documents relating to the Merger will be despatched
in due course. A circular to Trinity Shareholders, convening
the Extraordinary General Meeting, inter alia, to approve the
Merger, will be despatched at the same time.
Greenhill & Co., which is regulated by The Securities and
Futures Authority Limited, is acting for Trinity and no one
else in connection with the Merger and will not be responsible
to anyone other than Trinity for providing the protections
afforded to customers of Greenhill & Co., nor for providing
advice in relation to the Merger.
Salomon Smith Barney, which is regulated by The Securities and
Futures Authority Limited, is acting for Trinity and no one
else in connection with the Merger and will not be responsible
to anyone other than Trinity for providing the protections
afforded to customers of Salomon Smith Barney, nor for
providing advice in relation to the Merger.
SG Hambros Corporate Finance Advisory, a division of Societe
Generale, is acting for Mirror Group in connection with the
Merger and no one else and will not be responsible to anyone
other than Mirror Group for providing the protections afforded
to customers of SG Hambros Corporate Finance Advisory nor for
providing advice in relation to the Merger. Societe Generale
is regulated by The Securities and Futures Authority Limited
for the conduct of investment business in the UK.
Warburg Dillon Read, the investment banking division of UBS
AG, which is regulated in the United Kingdom by The Securities
and Futures Authority Limited, is acting for Mirror Group in
connection with the Merger and no one else and will not be
responsible to anyone other than Mirror Group for providing
the protections afforded to customers of Warburg Dillon Read
nor for providing advice in relation to the Merger.
This announcement does not constitute an offer or invitation
to purchase any securities. Appendix III contains the
definitions of the terms used in this announcement.
The Directors of Trinity and the Directors of Mirror Group
jointly accept responsibility for the information contained in
this press announcement other than the information relating
solely to Trinity and Mirror Group and their respective
subsidiary undertakings and directors, for which the Directors
of Trinity and Mirror Group respectively accept such
responsibility and, to the best of the knowledge and belief of
such Directors (who have taken all reasonable care to ensure
that such is the case), the information contained in this
press announcement for which they accept responsibility is in
accordance with the facts and does not omit anything likely to
affect the import of such information.
Enquiries :
Trinity plc Mirror Group PLC
Peter Birch 0171 457 2345 Sir Victor Blank 0171 293 3000
Philip Graf John Allwood
Greenhill & Co. SG Hambros Corporate Finance Advisory
Simon Borrows 0171 440 0400 Antony Beevor 0171 676 6000
Geoffrey Austin
Salomon Smith Barney Warburg Dillon Read
Christian Purslow 0171 721 2000 Peter Kiernan 0171 567 8000
Simon Warshaw
Gavin Anderson Finsbury
Richard Constant 0171 457 2345 Rupert Younger 0171 251 3801
Tom Hampson
MORE TO FOLLOW
MSCRMMTBLLMJMFL
Latest directors dealings
- 9 minutes ago Trekor Metals Limited
- 9 minutes ago ECR Minerals
- 9 minutes ago Zotefoams
- 14 hours ago Luceco
- 14 hours ago Helios Towers