Information  X 
Enter a valid email address

Farlake Group PLC (FAK)

  Print      Mail a friend

Monday 28 February, 2000

Farlake Group PLC

Recommended Offer by Talisman House

Farlake Group PLC
25 February 2000


Not  for release, publication or distribution in or  into
the United States, Canada, Australia or Japan

                            
                   Talisman House plc
         Recommended Offer for Farlake Group plc


1.   Introduction

Talisman  House  plc, the integrated  corporate  finance,
institutional   and   private   stockbroking    business,
announces that it has reached agreement with the board of
directors  of  Farlake  Group  plc  on  the  terms  of  a
recommended offer to acquire the whole of the issued  and
to be issued ordinary share capital of Farlake.

2.   Reasons for the Offer

Farlake   is  an  integrated  asset  management  business
providing  a  wide  range of wealth management  services.
The group has over 5,000 clients and manages over £500m.

The  proposed  acquisition of Farlake  is  in  line  with
Talisman's strategy of developing a technology and  media
focused full range financial services group with on-line
dealing capabilities.

Commenting   on  the  acquisition,  John  Mackay,   Chief
Executive of Talisman, said:

'Sean Ewing and his team at Farlake have, in the past 3
years, built a tremendous business, one which represents
a near perfect fit with the strategic direction outlined
in our recent Annual Report.  In particular we believe
that this acquisition will bring benefits to an enlarged
client base in the form of a greater range of, and
improved, services and financial products, while our
shareholders and employees will benefit from a broader
client base, greater recurring revenues and improved
future visibility of earnings.  We are also very excited
by the synergy between our on-line strategy and Farlake's
funds direct business (www.fundsdirect.co.uk).

Sean Ewing, Managing Director of Farlake, said:

'This Offer represents good value to the shareholders  of
Farlake  as  the integration  of the core fund management
business  into  a complementary financial services  group
can  only augment Farlake's business development to date.
Talisman   will  provide  Farlake  with  the   additional
management and operational strength to take advantage  of
today's   on-line  revolution  and  increasing  financial
awareness in the retail investment market.'

3.   The Offer

The Offer, which will be subject to the further terms and
conditions set out below and to be set out in  the  Offer
Document and the Form of Acceptance to be sent to Farlake
Shareholders in due course, will be made on the following
basis:

                 92 new Talisman Shares
                           for
                 every 10 Farlake Shares

and so in proportion for any other number of Farlake
Shares

As  an alternative, each Farlake Shareholder (other  than
the  Directors of Farlake who have undertaken in  respect
of  their Farlake Shares to accept the Offer entirely for
Talisman  Shares) will be entitled to elect to receive  a
cash  consideration of £8.00 per Farlake Share for up  to
23.5  per  cent.  of the Farlake Shares  for  which  they
accept the Offer.

Based on the closing mid market price of a Talisman Share
of  89p at the close of business on 25 February 2000 (the
last dealing day prior to the announcement of the Offer),
the  Offer  values  each Farlake Share  at  approximately
£8.19  and  on the basis of 3,243,547 Farlake  Shares  in
issue,  values  the  whole of the existing  issued  share
capital of Farlake at approximately £26.5 million.

On  this basis the Offer is at a premium of approximately
41  per cent. to the closing middle market price of  580p
per Farlake Share at the close of business on 25 February
2000, the last dealing day prior to this Announcement.

The maximum possible number of Talisman Shares that could
be   issued  in  relation  to  the  Offer  is  29,840,632
representing approximately 12.3 per cent. of the  current
issued  share capital of Talisman.  Application  will  be
made  for the new Talisman Shares issued pursuant to  the
Offer  to  be  admitted  to  the  Alternative  Investment
Market.

The Talisman Shares issued pursuant to the Offer will  be
credited  as  fully paid and will rank, at  the  time  of
issue,  pari  passu  with the existing  Talisman  Shares,
including  for  any dividend declared or paid  after  the
date  of this Announcement, save that they will not  rank
for  the final dividend of Talisman of 0.1p per share  in
respect  of the year ended 30 September 1999 declared  on
19 January 2000 to be paid on 17 March 2000 to holders of
Talisman Shares on the register on 18 February 2000.

The  Farlake  Shares which are the subject of  the  Offer
will  be acquired free from all liens, charges, equitable
interests, encumbrances and other interests and  together
with  all  rights  now or hereafter  attaching  to  them,
including  the right to receive and retain all  dividends
and other distributions declared, made or paid hereafter.

4.   Recommendation

The  Farlake  Directors,  who have  been  so  advised  by
Hichens, Harrison, consider the terms of the Offer to  be
fair  and  reasonable so far as Farlake Shareholders  are
concerned and recommend that Farlake Shareholders  accept
the Offer.  In providing advice to the Farlake Directors,
Hichens,  Harrison  has taken into  account  the  Farlake
Directors' commercial assessment of Farlake's business.

Accordingly, the Farlake Directors recommend all  Farlake
Shareholders to accept the Offer as the Farlake Directors
intend  to do in respect of the Farlake Shares  in  which
they are interested.

5.   Irrevocable Undertakings

Talisman has obtained irrevocable undertakings to  accept
the   Offer  in  respect  of  1,948,949  Farlake   Shares
representing  approximately 60.1 per cent.  of  Farlake's
issued ordinary share capital.

6.   Funds Direct (www.fundsdirect.co.uk)

Talisman is aware that Farlake is in discussions  with  a
view to maximising the current market opportunity for its
on-line  investment dealing subsidiary, Investment  Funds
Direct  Limited.  Talisman is informed of the  nature  of
these   discussions  and  fully  supports   the   ongoing
negotiations.  Talisman is confident that a conclusion to
the negotiations will take place during the period of the
Offer.

7.   Farlake Share Option Schemes

The   Offer   will   extend   to   any   Farlake   Shares
unconditionally allotted and issued as a  result  of  the
exercise  of options granted over Farlake Shares pursuant
to  the Farlake Share Option Schemes prior to the date on
which  the Offer closes (or such earlier date as Talisman
may,  subject  to  the  City Code, decide.)   Appropriate
proposals  will be made in due course to the  holders  of
such   options,   in   respect   of   options   remaining
unexercised,  in  the  Offer  becomes  or   is   declared
unconditional in all respects.

8.   Convertible loan stock

Talisman  will make a comparable offer to the holders  of
the   Zero   Coupon  Unsecured  Convertible  Loan   Stock
1999/2001  in  Farlake.  The Loan Stock  is  convertible,
subject to the terms of an agreement dated 29 July  1998,
into 273,224 Farlake Shares, half on 29 July 2000 and the
balance on 29 July 2001.

9.   Enquiries:

John Mackay / Richard Feigen  020 7 648 8700
Talisman House plc

Sean Ewing                    01225 469424
Farlake Group plc

Jonathan Wright               020 7 648 8700
Seymour Pierce

Dennis Bailey                 020 7 588 5171
Hichens, Harrison

10.  Management and Employees

Talisman  considers its employees as  its  most  valuable
asset  and  attaches great importance to the  skills  and
experience  of the management and employees  of  Farlake.
Talisman  has  given assurances to the Board  of  Farlake
that  the  existing employment rights, including  pension
rights,   of   all  Farlake  employees  will   be   fully
safeguarded.

11.  General

Neither  Talisman nor, as far as Talisman is  aware,  any
party  acting in concert with Talisman, owns or  controls
any Farlake Shares to which the Offer relates.

The  maximum cash consideration to be payable  under  the
Offer  is  to  be financed out of internal  resources  of
Talisman.  Seymour Pierce is satisfied that Talisman  has
adequate  resources  to satisfy full  acceptance  of  the
maximum cash alternative under the Offer.  Nevertheless a
placing  of  new Ordinary Talisman Shares to support  the
cash  element  of  the  Offer has been  agreed.   Further
details will be announced in due course.

The acceptance of the Offer by persons not resident in
the UK may be affected by the laws of the relevant
jurisdictions in which they are resident.  Persons who
are not resident in the UK should inform themselves of,
and observe, any applicable requirements.  The Offer will
not be made, directly or indirectly, in or into the
United States, Canada, Australia or Japan or by use of the
mails, or by any means or instrumentality of interstate
or foreign commerce, or any facility of a national
securities exchange, of the United States, Canada,
Australia or Japan.  Accordingly, copies of this
Announcement, the Offer Document and the Form of
Acceptance 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 persons receiving
this Announcement, the Offer Document and the Form of
Acceptance (including custodians, nominees and trustees)
must not distribute or send them in, into or from the
United States, Canada, Australia or Japan.

The definitions of terms used in this Announcement are
contained in Appendix II to this Announcement.

This Announcement does not constitute an offer or
invitation to purchase any securities.  The conditions of
the Offer are set out in Appendix I to this Announcement.

Persons receiving this press announcement should note
that, in connection with the Offer described above,
Seymour Pierce is acting for Talisman and no one else and
will not be responsible to any one other than Talisman
for providing the protections afforded to its customers
or for providing advice in relation to the Offer, the
contents of this Announcement or any arrangement referred
to herein. Seymour Pierce is regulated by The Securities
and Futures Authority Limited.  Seymour Pierce is a
wholly owned subsidiary of Talisman.

Persons receiving this press announcement should note
that, in connection with the Offer described above,
Hichens, Harrison is acting for Farlake and no one else
and will not be responsible to any one other than Farlake
for providing the protections afforded to its customers
or for providing advice in relation to the Offer, the
contents of this Announcement or any arrangement referred
to herein. Hichens, Harrison is regulated by The
Securities and Futures Authority Limited.

This Announcement assumes there are 242,614,648 Talisman
Shares in issue.

12.  Documentation

The Offer Document setting out the full details of the
Offer, together with the Form of Acceptance, will be
despatched by Talisman as soon as practicable.  The Offer
will be subject to, inter alia, the conditions which are
set out in Appendix I and to those terms which will be
set out in the Offer Document and in the Form of
Acceptance, and such further terms as may  be required to
comply with the rules and regulations of the London Stock
Exchange and the City Code.

Appendix I

Conditions of the Offer

The Offer will be subject to the following conditions and
will comply with the applicable rules and regulations  of
the Code and the London Stock Exchange:

(a)   Valid acceptances of the Offer being received  (and
    not, where permitted, withdrawn) by 3.00 p.m. on  the
    first closing date (or such later time and/or date as
    Talisman may, subject to the rules of the Takeover Code
    ('Code'), decide) in respect of not less than 90  per
    cent.  in nominal value (or such lower percentage  as
    Talisman may decide) of the Farlake Shares to which the
    Offer relates, provided that this condition will not be
    satisfied  unless Talisman has acquired or agreed  to
    acquire, whether pursuant to the Offer or otherwise, more
    than  50  per  cent.  of the voting  rights  normally
    exercisable at general meetings of Farlake, including for
    this purpose, to the extent (if any) required by  the
    Panel, any such voting rights attaching to any Farlake
    Shares that may be unconditionally allotted or issued
    before the Offer becomes or is declared unconditional as
    to acceptances whether pursuant to the exercise of any
    outstanding  conversion  or  subscription  rights  or
    otherwise;  and  for this purpose (a) the  expression
    'Farlake Shares to which the Offer relates' shall  be
    construed in accordance with sections 428 - 430F of the
    Companies Act 1985, and (b) Farlake Shares which have
    been unconditionally allotted shall be deemed to carry
    the voting rights which they will carry upon issue;

(b)   Neither  the  proposed acquisition  of  Farlake  by
    Talisman nor any matter arising from such acquisition
    being referred to the Competition Commission or any other
    competition authority, and no indication being received
    that any such reference might be made;

(c)   The  Financial  Services Authority  permitting  the
    transfer of control of Farlake;

(d)   Admission of the new Talisman Shares to  be  issued
    pursuant  to  the Offer to trading on the Alternative
    Investment Market of the London Stock Exchange;

(e)     No   government,   government   department,    or
    governmental, statutory or regulatory body, court, trade
    agency, association or institution, or any similar other
    person or body whatsoever in any jurisdiction (each a
    'Relevant Authority') having, prior to the date when the
    Offer would otherwise become unconditional, instituted,
    implemented, threatened or communicated to Talisman a
    decision to take any action, proceeding, investigation or
    enquiry, or having made, proposed or enacted any statute,
    regulation or order or taken any other steps which would
    or might -
    
    (i)  make  the  Offer, its implementation or proposed
         acquisition by Talisman of  any shares in or control of
         Farlake void, illegal and/or unenforceable or, to a
         material extent, restrain, prohibit, restrict or delay
         the Offer, or impose additional conditions or obligations
         or otherwise adversely affect the Offer to a material
         extent;
    
    (ii) result  in  a material delay in the  ability  of
         Talisman, or render Talisman unable, to acquire some or
         all of the Farlake Shares;
    
    (iii)     require the divestiture by Farlake or any of
         its subsidiaries (together 'the Farlake Group') or any
         company, partnership or joint venture in which any member
         of the Farlake group has a substantial interest ('the
         wider Farlake Group') or Talisman or any of  its
         subsidiaries or any company, partnership or joint venture
         in which any member of the Talisman group has  a
         substantial interest ('the wider Talisman Group') of all
         or any material part of their respective businesses,
         assets or  property or, to an extent which is material,
         impose any limitation on the ability of the wider Farlake
         Group or the wider Talisman Group to conduct all or any
         material part of their respective businesses, or own any
         material part of their respective assets or property;
    
    (iv) impose any limitation on the ability of any member
         of the wider Talisman Group to acquire or to hold or to
         exercise effectively any rights of ownership in shares in
         Farlake, or to exercise management control over any
         member of the Farlake Group, in each case to an extent
         which is material in the context of the wider Farlake
         Group;
    
    (v)  require Talisman to offer to acquire any shares in
         any member of the wider Farlake Group owned by any third
         party; or
    
    (vi) otherwise adversely affect the business, profits or
         prospects of any member of the wider Farlake Group or the
         wider Talisman Group, to an extent which is material in
         the context of either wider Group taken as a whole
     
     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, proceeding, investigation  or  enquiry
     having expired, lapsed or been terminated;

(f)    All  necessary  filings  having  been  made,   all
    appropriate  waiting  periods  under  any  applicable
    legislation or regulations of any applicable jurisdiction
    having expired, lapsed or been terminated in each case in
    respect  of the Offer and the acquisition of  Farlake
    Shares  or of control of Farlake by Talisman and  all
    authorisations, orders, consents, licences, clearances,
    permissions and approvals ('Authorisations') necessary
    for  or  in  respect of the Offer  and  the  proposed
    acquisition of any shares in or control of Farlake by
    Talisman having been obtained on terms and in a  form
    reasonably satisfactory to Talisman from all appropriate
    Relevant  Authorities, and all  such  Authorisations,
    together with all Authorisations which are necessary or
    appropriate to carry on the business of any member of the
    wider Farlake Group and the wider Talisman Group, the
    absence of which would be material in the context of the
    Offer, remaining in full force and effect, and  there
    being no notice of any intention to revoke or not  to
    renew any of the same, and all necessary statutory or
    regulatory obligations in any relevant jurisdiction in
    relation to the Authorisations having been complied with;

(g)  There being no provision of any arrangement,
agreement, licence or other instrument to which any
member of the wider Farlake Group is a party, or by or to
which any such member or any of its assets which are
material to its business may be bound, entitled or
subject and which, in consequence of the Offer or the
proposed acquisition of any Farlake Shares or control of
Farlake by Talisman or otherwise, would or might
reasonably be expected to result (to an extent which is
materially adverse in the context of the Farlake group
taken as a whole) in -
    
    (i)  any  such  arrangement,  agreement,  licence  or
          other instrument being terminated, or its terms
          being  changed  in  a way which  is  materially
          adverse to the Farlake group taken as a whole;
    
    (ii) any member of the Farlake group being obliged to
         dispose of any material part of its assets;
    
    (iii)     any member of the Farlake group ceasing to be
         able to carry on business under any name which it
         presently does so;
    
    (iv) any monies borrowed by or other indebtedness (actual
         or contingent) of any member of the Farlake group being
         or becoming repayable or capable of being declared
         repayable immediately or prior to its stated maturity, or
         the ability of any such member to incur any indebtedness
         being withdrawn or inhibited;
    
    (v)  the  creation of any mortgage, charge  or  other
         security interest over the whole or any part of the
         business, property or assets of any member of the Farlake
         group, or any such security (whenever arising or having
         arisen) becoming enforceable;
    
    (vi) the financial or trading position of any member of
         the Farlake group being materially adversely affected; or
    
    (vii)     the interests or business of any member of the
         Farlake group in or with any person, firm, company or
         body, or any arrangements relating to such interest or
         business, being terminated or adversely modified or
         materially adversely affected;

(h)   Except  (a) as disclosed in the annual  report  and
    accounts of Farlake for the year ended 30th September
    1999 or as otherwise publicly announced by delivery of an
    announcement to the Company Announcements Office of the
    London Stock Exchange or (b) as disclosed in writing to
    Talisman  prior to the posting of the Offer Document,
    neither Farlake nor (except in favour of Farlake) any
    member of the Farlake group having -
    
    (i)  issued  or agreed to issue any 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   (save  for  any   Farlake   Shares
          allotted  on exercise of options granted  prior
          to  31st  January  2000) or varied  the  rights
          attached to any class of its share capital;
    
    (ii) recommended, declared, paid or made any dividend or
         other distribution in respect of its ordinary shares,
         other than the final dividend in respect of the year
         ended 30th September 1999 recommended by the directors of
         Farlake;
    
    (iii)      entered into any transaction, contract  or
         commitment (whether in respect of capital expenditure or
         otherwise) which is of a long-term, onerous or unusual
         nature, or which involves or could involve an obligation
         of a nature or magnitude which is material in the context
         of the Farlake Group taken as a whole;
    
    (iv) incurred any contingent liability or incurred or
         increased any indebtedness, which is (in either case)
         material in the context of the Farlake Group as a whole;
    
    (v)  disposed of or transferred, mortgaged, or otherwise
         encumbered any material assets, or assets which together
         are material in the context of the Farlake Group taken as
         a whole;
    
    (vi) entered  into or varied the terms of any service
         agreement with any director or senior executive of
         Farlake;
    
    (vii)     acquired or disposed of any material interest
         in any undertaking;
    
    (viii)    terminated or varied the terms of any agreement
         or arrangement between itself and any third party in a
         manner which might reasonably be expected to have a
         material adverse effect on the financial position or
         prospects of the Farlake Group taken as a whole; or
    
    (ix) taken any action or had any proceedings instituted
         or threatened against it (not subsequently withdrawn) or
         any order made for its winding up, or for the appointment
         of a receiver, administrative receiver, or administrator
         in respect of it or any of its assets;

(i)   Since  30th  September 1999 and save  as  otherwise
    publicly announced by delivery of an announcement to the
    Company Announcements Office of the London Stock Exchange
    prior to this announcement and prior to the date on which
    the Offer would otherwise become unconditional and save
    as disclosed in writing to Talisman prior to the date of
    this announcement -
    
    (i)  there having been no material adverse change  in
          the  financial  position or  prospects  of  the
          Farlake Group taken as a whole; and
    
    (ii) there not having been instituted or threatened in
          writing in litigation, arbitration proceedings or other
          legal proceedings to which any member of the Farlake
          Group is or would be a party, and which would or might
          reasonably be expected to have a material adverse effect
          on the financial position or prospects of the Farlake
          Group taken as a whole; and
    
    (iii)     no claim or liability (contingent or otherwise)
          having arisen in respect of any member of the Farlake
          Group which would or might reasonably be expected to have
          a material adverse effect on the Farlake Group taken as a
          whole;
    
    (iv) Talisman not having discovered that any past  or
          present member of the Farlake Group has failed to comply
          with any applicable legislation or regulations of any
          relevant jurisdiction relating to environmental matters.

(j)   Save  as disclosed in writing to Talisman prior  to
    the date of this document, Talisman not having discovered
    that -
    
    (i)  the financial or business information concerning the
         Farlake Group contained in the information publicly
         disclosed at any time by any member of the Farlake Group
         either contains a material misrepresentation of fact or
         omits to state a fact necessary to make the information
         contained therein not materially misleading, and which
         was not corrected by a subsequent public announcement,
         where the misrepresentation or omission has or might
         reasonably be expected to have a material adverse effect
         on the wider Farlake Group taken as a whole; or
    
    (ii) any member of the wider Farlake Group which is not a
         subsidiary of Farlake is subject to any liability,
         contingent or otherwise but except for any liability
         incurred in the ordinary course of business since 30th
         September 1999, which was not disclosed in the annual
         report and accounts of Farlake for the year ended 30th
         September 1999 or as otherwise publicly announced by
         delivery of an announcement to the Company Announcements
         Office of the London Stock Exchange, and which is
         material in the context of the Farlake Group taken as a
         whole.

Talisman  reserves the right to waive,  in  whole  or  in
part,  all or any of the conditions, other than condition
(a) above, subject to the provisions of the Code.
Appendix II

The   following   definitions   apply   throughout   this
Announcement unless the context requires otherwise:

'City Code' or  'Code'       The  City  Code on Takeovers
                             and Mergers
                             
'Directors' or 'Board'       The  board  of directors  of
                             Talisman or Farlake  as  the
                             case may be
                             
'Farlake'                    Farlake Group plc
                             
'Farlake    Share     Option The Farlake Unapproved Share
Schemes'                     Option   Scheme   and    the
                             Farlake    Approved    Share
                             Option Scheme
                             
'Farlake Shareholders'       Holders of Farlake Shares
                             
'Farlake Shares'             Ordinary shares of  £1  each
                             in  the  capital of  Farlake
                             which        are         (a)
                             unconditionally allotted  or
                             issued on or before the date
                             the  Offer is made; and  (b)
                             unconditionally allotted  or
                             issued (whether pursuant  to
                             the   exercise  of   options
                             under   the  Farlake   Share
                             Option Schemes or otherwise)
                             after  that date but  before
                             the  date on which the Offer
                             ceases   to  be   open   for
                             acceptances (or such earlier
                             date, not being earlier than
                             the  date on which the Offer
                             becomes unconditional as  to
                             acceptances, or,  if  later,
                             the  first closing  date  of
                             the  Offer, as Talisman may,
                             subject    to   the    Code,
                             decide).
                             
'Form of Acceptance'         The   form   of  acceptance,
                             authority    and    election
                             relating to the Offer  which
                             shall  accompany  the  Offer
                             Document
                             
'Hichens, Harrison'          Hichens, Harrison & Co. plc
                             
'London Stock Exchange'      London     Stock    Exchange
                             Limited
                             
'Offer'                      The  offer  to  be  made  by
                             Talisman  House  to  acquire
                             all  the  Farlake Shares  on
                             the terms and subject to the
                             conditions  set out  in  the
                             Offer   Document,  including
                             where  the  context  admits,
                             any   subsequent   revision,
                             variation,    renewal     or
                             extension of such Offer
                             
'Offer Document'             The    document    to     be
                             despatched    to     Farlake
                             Shareholders containing  the
                             full terms and conditions of
                             the Offer
                             
'Panel'                      The  Panel on Takeovers  and
                             Mergers
                             
'Seymour Pierce'             Seymour Pierce Limited
                             
'Talisman'                   Talisman House plc
                             
'Talisman Shares'            Ordinary shares of  1p  each
                             in the capital of Talisman
                             
                                                                                                             

a d v e r t i s e m e n t