Offer by Barclays PLC-Part 3
Woolwich PLC
11 August 2000
Part 3
APPENDIX I
CONDITIONS FOR THE IMPLEMENTATION OF THE SCHEME AND THE OFFER
A. Conditions of the Scheme
1. The Offer is conditional upon the Scheme becoming unconditional and
effective by not later than 31 March 2001 or such later date as
Barclays and Woolwich may agree and (if required) the High Court may
approve. The Scheme will be conditional upon:
(a) the approval by a majority in number of the holders of the Woolwich
Shares present and voting, either in person or by proxy, representing not
less than three-fourths in value of the Woolwich Shares held by such holders,
at the meeting (or at any adjournment thereof) of Woolwich Shareholders
convened by order of the High Court to consider the Scheme;
(b) the passing at an extraordinary general meeting of Woolwich (or at any
adjournment thereof) of such resolution or resolutions as may be required to
approve and implement the Scheme;
(c) admission of the New Barclays Shares (i) to listing on the Official
List becoming effective in accordance with paragraph 7.1 of the Listing
Rules and (ii) to trading on the London Stock Exchange's market for listed
securities becoming effective in accordance with paragraph 2.1 of the
Standards or (if Barclays or Woolwich so determine and subject to the
consent of the Panel) the UK Listing Authority and the London Stock Exchange
agreeing to admit such shares to listing and trading respectively;
(d) section 101 of the Building Societies Act ceasing to apply to Woolwich;
and
(e) the sanction (with or without modification) of the Scheme by the High
Court and confirmation of any reduction of capital involved therein by the
High Court, an office copy of the Order of the High Court being delivered
for registration to the Registrar of Companies in England and Wales and
registration of the Order confirming any reduction of capital involved in
the Scheme with the Registrar of Companies in England and Wales.
2. The Offer is also conditional upon the following matters and
accordingly an office copy of the Order of the High Court to sanction
the Scheme will only be delivered for registration to the Registrar of
Companies in England and Wales if the following are satisfied or
waived:
(a) the Office of Fair Trading indicating in terms reasonably satisfactory
to Barclays that the Secretary of State for Trade and Industry in the
exercise of his powers under the Fair Trading Act 1973 does not intend to
refer the Offer or any matter arising therefrom or relating thereto to the
Competition Commission;
(b) the passing at an extraordinary general meeting of Woolwich (or at any
adjournment thereof) of a special resolution to approve the acquisition by
Woolwich of the shares in Sedgwick Independent Financial Consultants Limited
not already held by Woolwich;
(c) the FSA having notified Barclays in writing in terms reasonably
satisfactory to Barclays that it does not object to any person who will
pursuant to the Offer become a controller of Woolwich or any other member of
the wider Woolwich Group (as defined below) for the purposes of the Banking
Act 1987 or the period allowed under such Act for the FSA to notify any
objections to any such person becoming a controller having expired without
notification of such objection;
(d) the FSA having notified Barclays in writing in terms reasonably
satisfactory to Barclays that it does not object to any person who will
pursuant to the Offer become a controller of Woolwich or any other member of
the wider Woolwich Group (as defined below) for the purposes of the
Insurance Companies Act 1982 or the period allowed under such Act for the
FSA to notify any objections to any such person becoming a controller having
expired without notification of such objection;
(e) all relevant regulators (as defined in Regulation 46 of the Investment
Services Regulations 1995) having notified Barclays in writing in terms
reasonably satisfactory to Barclays that they do not object to any person
who will pursuant to the Offer become a controller of Woolwich or any other
member of the wider Woolwich Group (as defined below) for the purposes of
those Regulations or the period allowed under those Regulations for such
relevant regulators to notify any objections to any such person becoming a
controller having expired without notification of such objection;
(f) the FSA, acting on behalf of the PIA, having notified its approval in
writing in terms satisfactory to Barclays in respect of each person who will
pursuant to the Offer become a controller of Woolwich or any other member of
the wider Woolwich Group (as defined below) for the purposes of the Rules of
the PIA;
(g) the FSA, acting on behalf of IMRO, having notified its approval in
writing in terms satisfactory to Barclays in respect of each person who will
pursuant to the Offer become a controller of Woolwich or any other member of
the wider Woolwich Group (as defined below) for the purposes of the Rules of
IMRO or the period allowed under the Rules of IMRO to notify any objections
to any such person becoming a controller having expired without notification
of such objection;
(h) no government or governmental, quasi-governmental, supranational,
statutory or regulatory body, court, trade agency, association or other
person or body in any jurisdiction (each a 'Relevant Authority') having
taken, instituted, implemented or threatened or decided to take, institute,
implement or threaten any action, suit, proceeding, investigation or
enquiry, or enacted, made or proposed any statute, regulation or order, or
taken any other step, which would or might, in the case of sub-paragraphs
(ii), (iii), (iv) or (v) below of this paragraph (h) to an extent which is
material in the context of the Enlarged Barclays Group:
(i) make the Offer or its implementation void, illegal or unenforceable
under the laws of any jurisdiction or, directly or indirectly, materially
restrain, restrict, prohibit, delay or otherwise materially interfere with
the implementation of, or impose materially onerous additional conditions or
obligations with respect to, or otherwise materially challenge or interfere
with the Offer;
(ii) require, prevent or materially delay the divestiture or materially
alter the terms envisaged for any proposed divestiture by any member of the
Barclays Group or any partnership, joint venture, firm or body corporate in
which any member of the Barclays Group has a substantial interest (a
'Barclays Group Associate', the Barclays Group Associates together with the
Barclays Group being the 'wider Barclays Group') or by any member of the
Woolwich Group or any partnership, joint venture, firm or body corporate in
which any member of the Woolwich Group has a substantial interest (a
'Woolwich Group Associate', the Woolwich Group Associates together with the
Woolwich Group being the 'wider Woolwich Group') of all or any part of their
respective businesses, assets or property or impose any limitation on the
ability of any of them to conduct their respective businesses (or any of
them) or own their respective assets or property or any part thereof;
(iii) in connection with the Offer impose any limitation on or result in
a material delay in the ability of any member of the wider Barclays Group or
the wider Woolwich Group to acquire or to hold or to exercise effectively,
directly or indirectly, all or any rights of ownership of shares or loans or
securities convertible into shares or any other securities (or the
equivalent) in any member of the wider Woolwich Group or of the wider
Barclays Group or to exercise management control over any such member of the
wider Woolwich Group or of the wider Barclays Group;
(iv) other than pursuant to the Offer, and other than in relation to matters
disclosed by or on behalf of Woolwich to Barclays regarding the wider
Woolwich Group on or prior to 10 August 2000, require any member of the
wider Woolwich Group or of the wider Barclays Group to offer to acquire any
shares or other securities (or the equivalent) or interest in any member of
the wider Woolwich Group or of the wider Barclays Group owned by any third
party; or
(v) otherwise adversely affect the business, assets, liabilities, profits
or prospects of any member of the Woolwich Group and/or of the Barclays
Group, and all applicable waiting and other time periods during which any
such Relevant Authority could decide to take, institute, implement or threaten
any such action, suit, proceedings, investigation or enquiry having expired or
been terminated;
(i) all authorisations, orders, recognitions, grants, consents, licences,
confirmations, clearances, certificates, permissions and approvals
('Authorisations') necessary or appropriate for or in respect of the Offer
and material in the context of the Offer, having been obtained in terms and
in a form reasonably satisfactory to Barclays from each Relevant Authority
and from any other persons or bodies in any jurisdiction with whom any
member of the wider Woolwich Group or of the wider Barclays Group has
entered into contractual arrangements and, where the withdrawal of any
Authorisation would have a material adverse effect on the Enlarged Barclays
Group, all such Authorisations remaining in full force and effect and there
being no intimation of any intention to revoke or not renew any of them and
all necessary statutory or regulatory obligations in connection with the
Offer in any jurisdiction having been complied with;
(j) except as disclosed in the audited consolidated financial statements of
Woolwich for the year ended 31 December 1999 or in the interim results
announcement of Woolwich for the six months ended 30 June 2000 or as
publicly announced by or on behalf of Woolwich prior to 10 August 2000 or as
otherwise disclosed by or on behalf of Woolwich to Barclays regarding the
wider Woolwich Group on or prior to 10 August 2000, no member of the
Woolwich Group having, since 31 December 1999:
(i) recommended, declared, paid or made or proposed to recommend, declare,
pay or make any dividend, bonus or other distribution other than to any
wholly-owned subsidiaries of Woolwich;
(ii) save for intra-group transactions within the Woolwich Group or upon
exercise of rights to convert into or subscribe for Woolwich Shares pursuant
to the exercise of options under the Woolwich Share Schemes,issued or agreed
to or authorised or proposed the issue of additional shares of any
class or securities convertible into or rights, warrants or options to
subscribe for or acquire any such shares or convertible securities or
redeemed, purchased, repaid or reduced any part of its share capital;
(iii) issued or proposed the issue of any debentures or, save in the
ordinary course of business, incurred or increased any indebtedness or
contingent liability which might materially and adversely affect the
Woolwich Group;
(iv) other than pursuant to the Offer, authorised, proposed or announced its
intention to authorise or propose any merger, demerger, reconstruction,
amalgamation, scheme, commitment or acquisition or disposal of assets or
shares in any undertaking or of any undertaking or any change in its share
or loan capital which is material in the context of the Woolwich Group;
(v) entered into any contract, transaction, arrangement or commitment
(whether in respect of capital expenditure or otherwise) which is not in the
ordinary course of business or is of a long-term or unusual nature or
magnitude or which involves or could involve an obligation of such a nature
or magnitude and which is material in the context of the Woolwich Group;
(vi) mortgaged, charged, encumbered or created any other security interest
over the whole or any part of the business, property or assets of any such
member which is material in the context of the Woolwich Group;
(vii) taken any corporate action or had any order made for its winding-
up, dissolution or reorganisation or for the appointment of a receiver,
administrator, administrative receiver, trustee or similar officer of all or
any of its assets or revenues which is material in the context of the
Woolwich Group; or
(viii) entered into any agreement, arrangement or commitment or passed
any resolution with respect to any of the transactions or events referred to
in this paragraph (j);
(k) other than as disclosed by or on behalf of Woolwich to Barclays
regarding the wider Woolwich Group on or prior to 10 August 2000, there
being no provision of any arrangement, agreement, licence or other
instrument to which any member of the wider Woolwich 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 Offer, would or might result, to an
extent which is material in the context of the Enlarged Barclays Group, in:
(i) any monies borrowed by, or other indebtedness (actual or contingent)
of, any such member being or becoming repayable or being capable of being or
becoming declared repayable immediately or prior to their or its stated
maturity date or the ability of any such member to borrow monies or incur
any indebtedness being withdrawn or inhibited or being capable of becoming
or being withdrawn or inhibited;
(ii) the creation of any mortgage, charge or other security interest over
the whole or any part of the business, property or assets of any such member
or any such security (whenever arising or having arisen) becoming
enforceable;
(iii) any such arrangement, agreement, licence or other instrument being
terminated or adversely modified or affected or any action being taken of an
adverse nature or any obligation or liability arising thereunder;
(iv) any interest, assets or property of any such member being or becoming
liable to be disposed of or charged otherwise than in the ordinary course of
business;
(v) the interests or business of any such member in or with any other
venture, person, firm or body, or any arrangements relating to such
interests or business, being terminated or adversely modified or affected;
or
(vi) any such member ceasing to be able to carry on business under any name
under which it presently does so,
and no event having occurred which, under any provision of any
arrangement, agreement, licence or other instrument to which any
member of the wider Woolwich Group is a party or by or to which any
such member or any of its assets may be bound, entitled or subject,
is likely to result in any of the events or circumstances as are
referred to in this paragraph (k);
(l) except as disclosed in the audited consolidated financial statements of
Woolwich for the year ended 31 December 1999 or in the interim results
announcement of Woolwich for the six months ended 30 June 2000 or as
publicly announced by or on behalf of Woolwich prior to 10 August 2000 or as
disclosed by or on behalf of Woolwich to Barclays on or prior to such date,
since 31 December 1999:
(i) there having been no adverse change or deterioration in the business,
assets, financial or trading position or profits or prospects of any member
of the wider Woolwich Group which is material in the context of the Woolwich
Group; and
(ii) no litigation, arbitration, proceedings, prosecution or other legal
proceedings having been instituted, announced or threatened by or against or
remaining outstanding by or against any member of the wider Woolwich Group
which could have, in the reasonable opinion of Barclays, an effect either
individually or collectively which is material and adverse in the context of
the Woolwich Group; and
(m) Barclays not having discovered that:
(i) any adverse financial, business or other information about the wider
Woolwich Group existing on or prior 10 August 2000 which is material in the
context of the Woolwich Group has not been publicly disclosed by or on
behalf of any member of the wider Woolwich Group or otherwise disclosed by
Woolwich to Barclays on or prior to such date;
(ii) any financial, business or other information about the Woolwich Group
as contained in the information disclosed publicly at any time by or on
behalf of any member of the Woolwich Group is misleading, contains a
misrepresentation of fact or omits to state a fact necessary to make the
information contained therein complete and not misleading, and which in any
such case is adverse and material in the context of the Woolwich Group; or
(iii) any member of the Woolwich Group is subject to any liability,
contingent or otherwise, which is not disclosed or reflected in the audited
consolidated financial statements of Woolwich for the year ended 31 December
1999 or in the interim results announcement of Woolwich for the six months
ended 30 June 2000 or which has not been disclosed by or on behalf of
Woolwich to Barclays on or prior to 10 August 2000 and which is material in
the context of the Woolwich Group.
3. Barclays and Woolwich reserve the right, acting together, to waive the
condition in paragraph 2(b) above. Barclays alone reserves the right
to waive, in whole or in part, all or any of the other conditions in
paragraph 2 above.
4. The Offer will be governed by English law. The Rules of the Code will,
so far as they are appropriate, apply to the Offer.
5. Other than with the consent of the Panel, the Offer will lapse and the
Scheme will not proceed if, before the date of the Court Meeting, the Offer
is referred to the Competition Commission.
B. Further Terms
The Woolwich Shares will be cancelled or transferred to Barclays under the
Scheme fully paid and free from all liens, equities, charges, encumbrances,
rights of pre-emption and other interests and together with all rights now
and subsequently attaching to the Woolwich Shares, including the right to
receive and retain all dividends and other distributions declared, made or
paid after the date of this announcement, save that Woolwich Shareholders
will be entitled to receive and retain the interim dividend of 4.4p per
Woolwich Share announced on 2 August 2000 and payable on 9 October 2000 to
Woolwich Shareholders on the register on 25 August 2000.
APPENDIX II
FINANCIAL EFFECTS
On the basis of the closing middle-market price of a Barclays Share of 1581
pence on 10 August 2000 less the 20.0p interim dividend, the Offer together
with the Woolwich interim dividend of 4.4p values each Woolwich Share at
approximately 352 pence and the issued ordinary share capital of Woolwich
at approximately £5.4 billion.
The following tables set out, for illustrative purposes only, and on the
bases and assumptions set out in the notes below, the financial effects on
capital value and gross income for a holder of 10,000 Woolwich Shares
assuming the Scheme becomes effective. No account has been taken of the
Mix and Match Election.
A. Increase in capital value under the terms of the Offer
Notes £
Market value of 1,175 New Barclays Shares (i) 18,342
Cash consideration 16,400
Woolwich Interim Dividend 440
Total value of consideration 35,182
Less market value of 10,000 Woolwich Shares (ii) 26,900
Increase in capital value 8,282
This represents an increase of 30.8%
B. Increase in gross income under the terms of the Offer
Gross dividend income on 1,175 Barclays Shares (iii) 685
Interest income on £16,400 cash consideration (iv) 884
Total income 1,569
Less gross dividend income on 10,000 Woolwich
Shares (v) 1,389
Increase in gross income 180
This represents an increase of 13.0%
Notes:
(i) Based on the closing middle-market price of 1581 pence per Barclays
Share on 10 August 2000 (the day before this announcement) reduced by
the interim dividend of 20.0p per Barclays Share.
(ii) Based on the closing middle-market price of 269 pence per Woolwich
Share on 8 August 2000 (the day before the announcement that
Barclays and Woolwich were in talks which might lead to an offer
being made for Woolwich).
(iii)The dividend income from New Barclays Shares is based on aggregate
dividends of 52.5 pence per Barclays Share being the total of the
20.0 pence interim dividend for the six months ended 30 June 2000
(announced on 3 August 2000) and 32.5 pence final dividend for the
financial year ended 31 December 1999, grossed up by a factor of
100/90.
(iv) The gross interest income on the cash consideration under the Scheme
is calculated on the assumption that the cash is reinvested to yield
approximately 5.39 per cent. per annum, being the gross redemption
yield on UK Government securities with maturity between 5 and 15
years, as published in the Financial Times on 10 August 2000.
(v) The dividend income from Woolwich Shares is based on aggregate
dividends of 12.5 pence per Woolwich Share being the total of the 4.4
pence interim dividend for the six months ended 30 June 2000 (announced
on 2 August 2000) and the 8.1 pence final dividend for the financial
year ended 31 December 1999 grossed up by a factor of 100/90.
(vi) In assessing the financial effects of acceptance of the Offer, no
account has been taken of the treatment of any fractions or of any
potential liability to taxation of a Woolwich Shareholder.
APPENDIX III
BASES AND SOURCES
(a)The market value of Barclays Shares is based on the closing middle-
market price of a Barclays Share of 1581 pence as derived from the
Daily Official List on 10 August 2000 (being the day prior to this
announcement).
(b)The percentage of Barclays enlarged issued share capital which will be
owned by Woolwich Shareholders has been calculated on the basis of
approximately 1,477 million Barclays Shares and approximately 1,521
million Woolwich Shares in issue as at 10 August 2000 (being the day
prior to this announcement).
(c)The market value of Woolwich Shares on 8 August 2000 is based on the
closing middle market price of 269 pence as derived from the Daily
Official List on 8 August 2000 (being the day prior to the announcement
that Barclays and Woolwich were in talks which might lead to an offer
being made for Woolwich).
(d)The value of the Offer is based upon approximately 1,521 million
Woolwich Shares in issue on 10 August 2000.
(e)For the purposes of the financial comparisons contained in this
announcement, no account has been taken of any liability to taxation or
the treatment of fractions of Woolwich Shares under the Scheme.
(f)The numbers of customers and online customers of the Enlarged Barclays
Group have been determined on a pro forma basis without taking account
of any overlap between the customer bases of Barclays and Woolwich.
APPENDIX IV
Definitions
'Barclays' Barclays PLC
'Barclays Group' Barclays and its subsidiaries and subsidiary
and associated undertakings and, where the
context permits, each of them
'Barclays Shares' ordinary shares of £1 each in Barclays
'Barclays Shareholders' holders of Barclays Shares
'Building Societies Act' the Building Societies Act 1986 (as amended)
'Code' The City Code on Takeovers and Mergers
'Court Meeting' the meeting of Woolwich Shareholders to be
convened on the direction of the High Court at
which a resolution will be proposed to approve
the Scheme
'Credit Suisse 'Credit Suisse First Boston (Europe) Limited
First Boston'
'Daily Official List' the Daily Official List of the London Stock
Exchange
'Enlarged Barclays Group' the Barclays Group as enlarged by the
acquisition of Woolwich
'Extraordinary
General Meeting' the extraordinary general meeting of Woolwich
at which resolutions required to be passed to
approve and implement the Offer will be
proposed
'FSA' Financial Services Authority in its capacity as
the regulator of insurance business under the
Insurance Companies Act 1982, as regulator of
banking business under the Banking Act 1987 and
as the UK Listing Authority, as the case may be
'High Court' the High Court of Justice in England and Wales
'IMRO' Investment Management Regulatory Organisation
'Listing Rules' the listing rules of the UK Listing Authority
'London Stock Exchange' London Stock Exchange plc
'Mix and Match Election' the right of Woolwich Shareholders to elect,
subject to availability, to vary the
proportions in which they receive New Barclays
Shares and cash under the Scheme
'New Barclays Shares' the new Barclays Shares to be issued, credited
as fully paid, pursuant to the Offer
'Offer' the recommended offer by Barclays for Woolwich
to be implemented by way of the Scheme
'Official List' the official list maintained by the UK Listing
Authority
'Panel' The Panel on Takeovers and Mergers
'PIA' Personal Investment Authority Limited
'Scheme' the scheme of arrangement of Woolwich to be
made under section 425 of the Companies Act
1985
'Schroder Salomon
Smith Barney' Salomon Brothers International Limited (trading
as Schroder Salomon Smith Barney). Schroder is
a trademark of Schroder Holdings plc and is
used under licence by Salomon Brothers
International Limited
'Standards' the admission and disclosure standards made by
the London Stock Exchange from time to time
'substantial interest' a direct or indirect interest in 20 per cent or
more of the equity capital of an undertaking
'UK' United Kingdom of Great Britain and Northern
Ireland
'UK Listing Authority' the FSA in its capacity as the competent
authority under the Financial Services Act 1986
'Woolwich' Woolwich plc
'Woolwich Group' Woolwich and its subsidiaries and subsidiary
undertakings
'Woolwich Shareholders' holders of Woolwich Shares
'Woolwich Shares' ordinary shares of 10p each in Woolwich
'Woolwich Share Schemes' Woolwich plc Sharesave Scheme, Woolwich plc 2000
Sharesave Scheme, Woolwich plc 1998 Performance
Share Plan and Woolwich plc 1998 Executive Share
Option Plan and Woolwich plc International
Sharesave Scheme.
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