Recommended Acquisition of Holidaybreak
Not for release, publication or distribution, in whole or in part, in, into or from any jurisdiction where to do so would constitute a violation of the relevant laws or regulations of such jurisdiction
27 July 2011
RECOMMENDED ACQUISITION
OF
Holidaybreak plc
BY
Prometheon Holdings (UK) Limited, a wholly-owned subsidiary of Cox & Kings Ltd.
(to be implemented by way of a scheme of arrangement under Part 26 of the Companies Act)
Summary
· The boards of Cox & Kings Ltd. ("Cox & Kings") and Holidaybreak plc ("Holidaybreak") are pleased to announce that they have reached agreement on the terms of a recommended cash acquisition by Prometheon Holdings (UK) Limited ("Bidco"), a wholly-owned subsidiary of Cox & Kings, of the entire issued and to be issued share capital of Holidaybreak (the "Acquisition").
· It is intended that the Acquisition will be implemented by way of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act 2006 (the "Scheme"). In order to become effective, the Acquisition must, among other things, be approved by the requisite majorities of the Holidaybreak Shareholders present (in person or by proxy) and entitled to vote at the Court Meeting and the General Meeting.
· Under the terms of the Acquisition, Holidaybreak Shareholders will receive 432.1 pence in cash per Holidaybreak Share (the "Offer Price").
· The Offer Price values Holidaybreak's fully diluted share capital at approximately £312.0m and represents:
o a premium of approximately 35.5 per cent. to the closing price of 319.0 pence per Holidaybreak Share on 22 July 2011, being the last business day prior to the commencement of the Offer Period; and
o a premium of approximately 54.2 per cent. to the average closing price of approximately 280.3 pence per Holidaybreak Share for the three-month period up to and including 22 July 2011.
· In addition, eligible Holidaybreak Shareholders, being Holidaybreak Shareholders who were on the register of Holidaybreak on the dividend record date of 15 July 2011, will remain eligible to receive the previously announced 3.35p interim dividend payable in cash on 10 August 2011.
· The Offer provides Holidaybreak Shareholders with a compelling opportunity to realise immediate value, in cash and at a premium, for their investment in Holidaybreak.
· Cox & Kings has received support for the Acquisition from major shareholders and Holidaybreak Directors in respect of 22,419,982 Holidaybreak Shares (in aggregate), representing approximately 31.8 per cent. of the issued share capital of Holidaybreak. This comprises irrevocable undertakings to vote in favour of the Scheme at the Court Meeting and the General Meeting in respect of 12,064,282 Holidaybreak Shares, representing approximately 17.1 per cent. of the issued share capital of Holidaybreak, and non-binding letters of intent to vote in favour of the Scheme at the Court Meeting and the General Meeting in respect of 10,355,700 Holidaybreak Shares, representing approximately 14.7 per cent. of the issued share capital of Holidaybreak.
· The Holidaybreak Directors, who have been so advised by Citi, consider the terms of the Acquisition to be fair and reasonable. In providing its advice to the Holidaybreak Directors, Citi has taken into account the commercial assessments of the Holidaybreak Directors.
· The Holidaybreak Directors intend unanimously to recommend that Holidaybreak Shareholders vote in favour of the Scheme, as they have irrevocably undertaken to do in respect of their own beneficial holdings of Holidaybreak Shares amounting to, in aggregate, 198,632 Holidaybreak Shares, representing approximately 0.28 per cent. of the issued share capital of Holidaybreak.
· It is expected that the Scheme Document will be posted on or around 10 August 2011 and that the Scheme will become effective on or around 27 September 2011, subject to the satisfaction of regulatory and all other conditions, including the conditions set out in Appendix 1 to this announcement.
Commenting on the Acquisition, Peter Kerkar, Director of Cox & Kings, said:
"The acquisition of Holidaybreak marks an exciting new step for Cox & Kings in its development. We have been growing rapidly and have also significantly expanded our outbound tours operation from India and Oceania. Holidaybreak adds new product areas and markets which provide us with attractive opportunities to leverage Cox and Kings' global network and accelerate the development of both Holidaybreak and Cox & Kings' businesses. We also very much look forward to working with the Holidaybreak management team who have helped to develop the company into a leader in its various business areas."
Commenting on the Acquisition, Martin Davies, Group Chief Executive of Holidaybreak, said:
"I am proud of the significant progress we have made towards our objective of transforming Holidaybreak into an education focused business, both through expansion into the pan-European education market through the acquisition of Meininger, and by building on our high quality brands. While the Board of Holidaybreak was confident that significant value could have been generated for shareholders over time through implementation of our standalone strategy, today's announcement of the recommended acquisition of Holidaybreak by Cox & Kings provides certainty and immediate value to shareholders, in cash and at a premium. It also presents an exciting opportunity for Holidaybreak's customers and employees to benefit from being part of an international travel company which shares our passion for delivering unique and valued products to our customers."
This summary should be read in conjunction with the full text of the attached announcement (including its appendices).
Enquiries:
Cox & Kings +91 22 2270 9100
Peter Kerkar, Director
Anil Khandelwal, Group CFO
Thomas C. Thottathil, Head of Corporate Communications
Nomura (financial adviser to Cox & Kings) +44 20 7521 2000
Adrian Fisk
Henry Phillips
Nishant Amin
Nomura (corporate broking) +44 20 7521 2000
Richard Snow
Nicholas Marren
Adfactors PR Pvt Ltd (PR adviser to Cox & Kings) +91 22 2281 3565
Rama Naidu
Holidaybreak +44 1606 787 100
Martin Davies, Group Chief Executive
Neil Bright, Group Finance Director
Citi (financial adviser to Holidaybreak) +44 20 7986 4000
Jan Skarbek
Benjamin Willer
Michael Fauconnier-Bank
Peel Hunt (corporate broker to Holidaybreak) +44 20 7418 8900
Dan Webster
Matthew Armitt
Brunswick (PR adviser to Holidaybreak) +44 20 7404 5959
Craig Breheny
Catherine Hicks
Oliver Hughes
IMPORTANT NOTICES
This announcement is not intended to, and does not, constitute or form part of an offer, invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities, or the solicitation of any vote or approval in any jurisdiction, pursuant to the Acquisition or otherwise. The Acquisition will be made solely by means of the Scheme Document, which will contain the full terms and conditions of the Acquisition (including details of how to vote in respect of the Scheme). Any vote in respect of the Scheme should be made only on the basis of the information contained in the Scheme Document. Holidaybreak Shareholders are advised to read the Scheme Document carefully, once it has been dispatched.
Please be aware that addresses, electronic addresses and certain other information provided by Holidaybreak Shareholders, persons with information rights and other relevant persons for the receipt of communications from Holidaybreak may be provided to Cox & Kings during the offer period as required under Section 4 of Appendix 4 of the City Code on Takeovers and Mergers (the "City Code").
Nomura is authorised and regulated by the Financial Services Authority. Nomura is acting for Cox & Kings and no one else in connection with the Acquisition and will not be responsible to anyone other than Cox & Kings for providing the protections afforded to clients of Nomura nor for providing advice in connection with the Acquisition or the matters referred to in this announcement.
Citi is authorised and regulated by the Financial Services Authority. Citi is acting for Holidaybreak and no one else in connection with the Acquisition and will not be responsible to anyone other than Holidaybreak for providing the protections afforded to clients of Citi nor for providing advice in connection with the Acquisition or the matters referred to in this announcement.
Peel Hunt is authorised and regulated by the Financial Services Authority. Peel Hunt is acting for Holidaybreak and no one else in connection with the Acquisition and will not be responsible to anyone other than Holidaybreak for providing the protections afforded to clients of Peel Hunt nor for providing advice in connection with the Acquisition or the matters referred to in this announcement.
Overseas Jurisdictions
The distribution of this announcement in jurisdictions other than the UK and the availability of the Acquisition to Holidaybreak Shareholders who are not resident in the UK may be affected by the laws of such jurisdictions. Therefore any persons who are subject to the laws of any jurisdiction other than the UK or Holidaybreak Shareholders who are not resident in the UK will need to inform themselves about, and observe, any applicable requirements.
This announcement has been prepared for the purpose of complying with English law and the City Code and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws of jurisdictions outside the UK.
Holidaybreak Shareholders resident in the United States ("US Holders") should note that the Acquisition relates to the shares of an English company, is subject to UK disclosure requirements (which are different from those of the United States) and is proposed to be made by means of a scheme of arrangement provided for under English law. A transaction effected by means of a scheme of arrangement is not subject to the tender offer rules under the US Exchange Act. Accordingly, the Acquisition is subject to the disclosure requirements and practices applicable in the UK to schemes of arrangement which differ from the disclosure requirements of the United States tender offer rules. Financial information included in this announcement has been prepared, unless specifically stated otherwise, in accordance with accounting standards applicable in the UK and thus may not be comparable to the financial information of United States companies or companies whose financial statements are prepared in accordance with generally accepted accounting principles in the United States. If Cox & Kings exercises its right to implement the Acquisition by way of a takeover offer, such offer will be made in compliance with applicable United States laws and regulations.
The receipt of cash pursuant to the Acquisition by a US Holder as consideration for the cancellation of its Holidaybreak Shares pursuant to the Scheme may be a taxable transaction for United States federal income tax purposes and under applicable United States state and local, as well as foreign and other, tax laws. Each Holidaybreak Shareholder is urged to consult his independent professional adviser immediately regarding the tax consequences of the Acquisition applicable to him.
It may be difficult for US Holders to enforce their rights and claims arising out of United States federal securities laws, since Cox & Kings and Holidaybreak are located in countries other than the United States, and some or all of their officers and directors may be residents of countries other than the United States. US Holders may not be able to sue a non-United States company or its officers or directors in a non-United States court for violations of United States securities laws. Further, it may be difficult to compel a non-United States company and its affiliates to subject themselves to a United States court's judgement.
In accordance with normal UK practice and pursuant to Rule 14e-5(b) of the US Exchange Act, Cox & Kings or its nominees, or its brokers (acting as agents), may from time to time make certain purchases of, or arrangements to purchase, Holidaybreak Shares outside of the United States, other than pursuant to the Acquisition, until the date on which the Acquisition and/or Scheme becomes effective, lapses or is otherwise withdrawn. These purchases may occur either in the open market at prevailing prices or in private transactions at negotiated prices. Any information about such purchases will be disclosed as required in the UK, will be reported to the Regulatory News Service of the London Stock Exchange and will be available on the London Stock Exchange website at http://www.londonstockexchange.com/prices-and-news/prices-news/home.htm.
Dealing disclosure requirements
Under Rule 8.3(a) of the City Code, any person who is interested in 1 per cent. or more of any class of relevant securities of an offeree company or of any paper offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any paper offeror is first identified.
An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any paper offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any paper offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a paper offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the City Code, any person who is, or becomes, interested in 1 per cent. or more of any class of relevant securities of the offeree company or of any paper offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any paper offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any paper offeror, save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.
If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a paper offeror, they will be deemed to be a single person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).
Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. If you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure, you should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129.
Publication on websites
In accordance with Rule 19.11 of the City Code, a copy of this announcement will be available on Cox & Kings' website (www.coxandkings.com) and on Holidaybreak's website (www.holidaybreak.co.uk) by no later than 12 noon (London time) on 28 July 2011 and will remain available during the course of the Acquisition.
Rule 2.10 Disclosure
In accordance with Rule 2.10 of the City Code, Holidaybreak confirms that, as at the close of business on 26 July 2011, being the last business day prior to the Announcement Date, it had 70,607,760 ordinary shares of 5 pence each in issue on the main market of the London Stock Exchange, all with equal voting rights. The total number of voting rights in Holidaybreak is therefore 70,607,760. The International Securities Identification Number for the Holidaybreak Shares is GB0003164950.
Forward Looking Statements
This announcement, oral statements made regarding the Acquisition and other information published by Holidaybreak or Cox & Kings may contain certain statements that are or may be forward-looking. These statements are based on the current expectations of the management of Holidaybreak and Cox & Kings (as the case may be) and are naturally subject to uncertainty and changes in circumstances. The forward-looking statements contained herein may include statements about the expected effects on Holidaybreak or Cox & Kings of the Acquisition, the expected timing and scope of the Acquisition, strategic options and all other statements in this document other than historical facts. Without limitation, any statements preceded or followed by or that include the words "targets", "plans", "believes", "expects", "aims", "intends", "will", "may", "should", "would", "could", "anticipates", "estimates", "projects" or words or terms of similar substance or the negative thereof, are forward-looking statements. Forward-looking statements include statements relating to the following: (i) future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects; and (ii) business and management strategies and the expansion and growth of Cox & Kings' or Holidaybreak's operations and potential synergies resulting from the Acquisition. Although Holidaybreak and Cox & Kings believe that the expectations reflected in such forward-looking statements are reasonable, Holidaybreak and Cox & Kings can give no assurance that such expectations will prove to be correct. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements. These factors include, but are not limited to, the satisfaction of the conditions to the Acquisition, as well as additional factors, such as changes in economic conditions, changes in the level of capital investment, success of business and operating initiatives and restructuring objectives, customers' strategies and stability, changes in the regulatory environment, fluctuations in interest and exchange rates, the outcome of litigation, government actions and natural phenomena such as floods, earthquakes and hurricanes. Other unknown or unpredictable factors could cause actual results to differ materially from those in the forward-looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. Neither Holidaybreak nor Cox & Kings undertakes any obligation to update publicly or revise forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent required pursuant to applicable law.
27 July 2011
RECOMMENDED CASH OFFER
FOR
Holidaybreak plc
BY
Prometheon Holdings (UK) Limited, a wholly-owned subsidiary of Cox & Kings Ltd.
1. Introduction
The boards of Cox & Kings and Holidaybreak are pleased to announce that they have reached agreement on the terms of a recommended cash acquisition by Bidco, a wholly-owned subsidiary of Cox & Kings, of the entire issued and to be issued share capital of Holidaybreak.
2. The Acquisition
It is intended that the Acquisition will be implemented by way of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act. Under the terms of the Acquisition, which will be subject to the conditions and further terms set out in Appendix 1 to this announcement and to be set out in the Scheme Document, Scheme Shareholders will be entitled to receive:
For each Holidaybreak Share 432.1 pence per share in cash
The Offer Price represents:
· a premium of approximately 35.5 per cent. to the closing price of 319.0 pence per Holidaybreak Share on 22 July 2011, being the last business day prior to the commencement of the Offer Period; and
· a premium of approximately 54.2 per cent. to the average closing price of approximately 280.3 pence per Holidaybreak Share for the three-month period up to and including 22 July 2011.
The Offer Price values Holidaybreak's fully diluted share capital at approximately £312.0m.
In addition, eligible Holidaybreak Shareholders, being Holidaybreak Shareholders who were on the register of Holidaybreak on the dividend record date of 15 July 2011, will remain eligible to receive the previously announced 3.35p interim dividend payable in cash on 10 August 2011.
3. Information relating to Cox & Kings
The Cox & Kings brand has evolved over 250 years of history and today is one of the recognised holiday brands that caters to the overall travel needs of Indian and international travellers. Cox & Kings can trace its roots back to the 18th century, when it was first established by Richard Cox as a service provider to British regiments in India. A subsequent merger with Henry S. King & Co. formed the basis for the company as it is known today. Operating largely as ticketing agents in the 1970s, the business has undergone significant expansion since then and was successfully listed on the Bombay Stock Exchange and National Stock Exchange of India in December 2009.
Cox & Kings has broad international presence and reach with subsidiaries in the UK, Australia, New Zealand, Japan, the US, the UAE, Germany, Hong Kong, Greece and Singapore. Cox & Kings provides four key service offerings: leisure travel, corporate travel, visa processing and foreign exchange. Travel and tour commission formed 91.1 per cent. of the total revenues, while foreign exchange and other income (mostly from foreign exchange fluctuations) formed 2.0 per cent. and 7.0 per cent. respectively in the full year to 31 March 2011.
The core business of Cox & Kings is the sale of packages for leisure travel where two or more components of travel, such as flights, hotels, car rentals, transfers and ground handling services, are bundled together in advance and sold to customers. Travel solutions provided include land, air and cruise ticketing services, hotel reservations services, in-transit arrangements, local sightseeing services, visa, passport and medical insurance assistance and other destination management services. In addition, Cox & Kings provides travel related foreign exchange and payment solutions.
As of 31 March 2011, Cox & Kings had audited commission and other operating income of INR 4,967m (£69m) and profit before tax of INR 1,931m (£27m). Cox & Kings' balance sheet had a net asset value of INR 20,613m (£285m) as of 31 March 2011. As of 26 July 2011, Cox & Kings had a market capitalisation of INR 26,985m (£373m).
4. Information relating to Holidaybreak
Holidaybreak is an education and activity travel group listed on the London Stock Exchange. Holidaybreak provides educational and activity trips for school children as well as worldwide adventure holidays, short breaks in the UK and Europe, and mobile-home and camping holidays on sites throughout Europe. The group has three operating divisions: Education and Adventure, Hotel Breaks and Camping, which have leading positions in the UK and other major European markets, and has more than 15 long-established and widely recognised brands.
Education & Adventure provides residential, outdoor educational school trips through the UK market-leading PGL brand, in addition to educational travel tours through the NST and EST brands. It also provides bespoke school trip accommodation through the Meininger brand. Additionally, the division offers worldwide adventure tours through Explore and Djoser.
Hotel Breaks provides domestic and overseas short-break holidays primarily for UK and Dutch consumers. Its leading brands include Superbreak, based in the UK, and Bookit, based in the Netherlands, which provide primarily domestic short-break holidays to their respective markets.
Camping primarily provides self-catering holidays in mobile-homes and tents, pre-sited on third party owned camp-sites, through the Eurocamp and Keycamp brands across France, Italy and seven other European countries.
In December 2010, Holidaybreak acquired a 50 per cent. stake in the German-based student and school tour accommodation group Meininger for £31.1m. Holidaybreak has the option to acquire the remaining shares in Meininger over the next two to three years, at a price dependent upon the performance of the business over the period. Most recently, in June 2011 Holidaybreak announced the subsequent sale of its London theatre ticket agency, West End Theatre Bookings Limited, for approximately £10.9m.
For the year ended 30 September 2010, Holidaybreak reported revenue of £461.7m and profit before tax of £26.0m. As at 31 March 2011, Holidaybreak had net debt of £137.9m (including £16.8m of finance leases and adjusted for the subsequent disposal of West End Theatre Bookings Limited) and a defined benefit pension deficit of £1.2m.
5. Background to and reasons for the Acquisition
Through expansion into adjacent business areas, Cox & Kings seeks to maximise its service offering to an enlarged customer base. Holidaybreak is a leader in its niche segments and operates in highly attractive complementary business areas to Cox & Kings, offering a diverse range of unique outdoor leisure activities to its dedicated clientele. Cox & Kings recognises the strength of Holidaybreak's businesses and sees significant strategic benefits to combining these businesses with Cox & Kings' rapidly expanding core businesses.
The combination will provide Holidaybreak with a platform to expand internationally by offering the company's products to Cox & Kings' customers in India, the rest of Asia and the Oceania region. A combination with Cox & Kings would enable the enlarged business to accelerate the development of Holidaybreak's businesses. In particular, Holidaybreak's Education business will capitalise on the latent demand for European education programmes and facilities that is fast emerging within India. In these new geographies the peak periods for outbound travel coincide with the European off-peak travel season and as a result the seasonality of Holidaybreak's businesses will be reduced.
Cox & Kings, and in particular its outbound UK and European travel businesses, will benefit from greater access to certain markets and customers as a result of the proposed Acquisition. More generally, it will benefit from the incremental management expertise encompassed within Holidaybreak.
The acquisition represents a transformational step for Cox & Kings, providing both scale and critical mass in key international regions. The complementary nature of the two businesses will diversify Cox & Kings' revenue streams both on a product and geographical basis. The management team believe there are significant opportunities to further drive revenue and margin growth in the enlarged business.
6. Recommendation
The Holidaybreak Directors, who have been so advised by Citi, consider the terms of the Acquisition to be fair and reasonable. In providing its advice, Citi has taken into account the commercial assessments of the Holidaybreak Directors.
The Holidaybreak Directors intend unanimously to recommend that Holidaybreak Shareholders vote in favour of the Scheme, as they have irrevocably undertaken to do in respect of their own beneficial shareholdings of Holidaybreak Shares (representing approximately 0.28 per cent. of the issued share capital of Holidaybreak).
7. Background to and reasons for the recommendation
Martin Davies was appointed Group Chief Executive of Holidaybreak in April 2010 and has pursued a strategy of transforming Holidaybreak into an education focused business, both through: i) expansion into the pan-European education market through the acquisition of Meininger, building on Holidaybreak's high quality brands; and ii) making selective disposals, such as of West End Theatre Bookings Limited.
Against this background, the Board of Directors of Holidaybreak received an indicative proposal from Cox & Kings to acquire the entire issued and to be issued share capital of Holidaybreak. In considering whether to recommend the offer, the Holidaybreak Directors have taken into account the following factors:
· The consideration of 432.1 pence in cash per Holidaybreak Share values Holidaybreak's fully diluted share capital at approximately £312.0m and represents:
o a premium of approximately 35.5 per cent. to the closing price of 319.0 pence per Holidaybreak Share on 22 July 2011, being the last business day prior to the commencement of the Offer Period; and
o a premium of approximately 54.2 per cent. to the average closing price of approximately 280.3 pence per Holidaybreak Share for the three month period up to and including 22 July 2011.
· The value which could be realised over time for Holidaybreak Shareholders through the implementation of the Holidaybreak Group's current standalone strategy, recognising the uncertainty around the ability of the Board of Directors of Holidaybreak to achieve acceptable valuations for any further disposals of non-core business units.
In light of the above, the Holidaybreak Directors consider that the Acquisition provides Holidaybreak Shareholders with certainty and immediate value, in cash and at a premium.
The Holidaybreak Directors have therefore decided to recommend that Holidaybreak Shareholders vote in favour of the Scheme as they believe that it represents fair value for Holidaybreak Shareholders. They consider that the terms of the Acquisition offer shareholders a premium to the valuation provided by the market and the advantage of the certainty of realising their investment in cash.
8. Irrevocable undertakings and letters of intent
Cox & Kings has received irrevocable undertakings to vote in favour of the Scheme from all of the Holidaybreak Directors who hold Holidaybreak Shares in respect of their entire beneficial holdings of Holidaybreak Shares amounting to, in aggregate, 198,632 Holidaybreak Shares and representing approximately 0.28 per cent. of the issued share capital of Holidaybreak. The undertakings will remain binding if a higher competing offer for Holidaybreak is made. The undertakings will cease to be binding in certain circumstances, including if the Acquisition lapses or is withdrawn.
Cox & Kings has also received irrevocable undertakings to vote in favour of the Scheme from institutional shareholders in respect of 11,865,650 Holidaybreak Shares, representing approximately 16.81 per cent. of the issued share capital of Holidaybreak. The undertakings will cease to be binding in certain circumstances, as set out in Appendix 3 to this announcement.
In addition Cox & Kings has received letters of intent to vote in favour of the Scheme from institutional shareholders in respect of 10,355,700 Holidaybreak Shares, representing approximately 14.67 per cent. of the issued share capital of Holidaybreak.
Further details of these irrevocable undertakings and letters of intent are set out in Appendix 3 to this announcement.
9. Financing of the Acquisition
The cash consideration payable by Bidco under the terms of the Acquisition will be financed by a £206m standby letter of creditfacility and a £125m standby letter of creditfacility, each provided by Axis Bank. Axis Bank has issued letters of credit of £200m and £121m respectively under these facilities to Bidco (the "Letters of Credit"). Bidco has also entered into two separate agreements with Axis Bank in respect of the Letters of Credit (the "Back-Stop Letters"), pursuant to which Axis Bank has agreed to pay Bidco, within five business days of Bidco delivering the Letters of Credit to Axis Bank, an amount in pounds sterling sufficient to enable Bidco to satisfy in full the cash consideration payable under the terms of the Acquisition.
Bidco's intention is to approach a bank (a "Third Party Bank") on or shortly before the Effective Date with a view to the Letters of Credit being discounted by the Third Party Bank. In the event that the discount rate offered by the Third Party Bank in consideration for the Letters of Credit is insufficient to provide Bidco with the necessary amount to satisfy in full the cash consideration payable under the terms of the Acquisition, then Bidco will deliver the Letters of Credit to Axis Bank pursuant to the terms of the Back-Stop Letters.
Further details of the financing of the Acquisition will be included in the Scheme Document.
As required by the City Code, Nomura, as financial adviser to Cox & Kings, confirms that it is satisfied that sufficient resources are available to Bidco to satisfy in full the cash consideration payable under the terms of the Acquisition.
10. Management and employees
Cox & Kings recognises the strength of the existing management team and the importance of that team for the future development of the Holidaybreak businesses. It is important to Cox & Kings to retain and work with that team to develop the business further. Cox & Kings also recognises that Holidaybreak's existing employees will be key to generating value in the future. Cox & Kings intends that, upon the Acquisition becoming effective, the existing rights, including pension rights, of the current employees of Holidaybreak will be fully safeguarded.
11. Holidaybreak Share Schemes
The Acquisition may affect share options and incentive awards granted under the Holidaybreak Share Schemes. Participants in the Holidaybreak Share Schemes will be contacted regarding the effect of the Acquisition on their rights under these schemes and appropriate proposals will be made to such participants in due course. A summary of the effect of the Acquisition on share options and incentive awards granted under the Holidaybreak Share Schemes will be set out in the Scheme Document.
12. Disclosure of interests in Holidaybreak relevant securities
As at the close of business on 26 July 2011 (the last practicable business day prior to the Announcement Date), neither Cox & Kings, nor any of the directors of Cox & Kings nor, so far as Cox & Kings is aware, any person acting in concert (within the meaning of the City Code) with Cox & Kings for the purposes of the Acquisition has any interest in, owns or controls any Holidaybreak Shares or any securities convertible or exchangeable into Holidaybreak Shares (including pursuant to any short or long exposure, whether conditional or absolute, to changes in the prices of securities) or any rights to subscribe for or purchase the same, or holds or any options (including traded options) in respect of, or has any option to acquire, any Holidaybreak Shares or has entered into any derivatives referenced to Holidaybreak Shares ("Relevant Shares") which remain outstanding, nor does any such person have any arrangement in relation to Relevant Shares. An "arrangement" for these purposes also includes any indemnity or option arrangement, or any agreement or understanding, formal or informal, of whatever nature, relating to Relevant Shares which may be an inducement to deal or refrain from dealing in such securities, or any borrowing or lending of Relevant Shares that have not been on-lent or sold.
13. Structure of the Acquisition
It is intended that the Acquisition will be implemented by way of a Court-sanctioned scheme of arrangement between Holidaybreak and the Scheme Shareholders under Part 26 of the Companies Act.
The purpose of the Scheme is to provide for Bidco to become the owner of the entire issued ordinary share capital of Holidaybreak. This is to be achieved by the cancellation of the Scheme Shares held by Holidaybreak Shareholders and the application of the reserve arising from such cancellation in paying up in full a number of new Holidaybreak Shares (which is equal to the number of Scheme Shares cancelled) and issuing them to Bidco, in consideration for which the Scheme Shareholders will receive cash on the basis set out in paragraph 2 above.
The implementation of the Scheme will be subject to the conditions and further terms set out in Appendix I to this announcement and to be set out in the Scheme Document, and will only become effective if, among other things, the following events occur:
· a resolution to approve the Scheme is passed by a majority in number of the Scheme Shareholders present and voting (and entitled to vote), either in person or by proxy, at the Court Meeting, representing not less than 75 per cent. in value of the Scheme Shares held by such Scheme Shareholders;
· the Special Resolution necessary to implement the Scheme and amend the articles of association of Holidaybreak is passed by the requisite majority at the General Meeting;
· the Scheme is sanctioned (with or without modification, on terms agreed by Cox & Kings and Holidaybreak) and the Reduction of Capital is confirmed, by the Court; and
· the Court Orders and the Statement of Capital are delivered to the Registrar of Companies.
Upon the Scheme becoming effective: (i) the Scheme will be binding on all Scheme Shareholders, irrespective of whether or not they attended or voted at the Court Meeting or the General Meeting (and, if they attended and voted, whether or not they voted in favour of the resolutions tabled at such meetings) and Holidaybreak will become a wholly-owned subsidiary of Cox & Kings; and (ii) share certificates in respect of the Holidaybreak Shares will cease to be valid and entitlements to Holidaybreak Shares held within the CREST system will be cancelled. It is also intended that Holidaybreak will be re-registered as a private limited company as part of the Scheme.
It is intended that dealings in Holidaybreak Shares will be suspended at 5.00 p.m. London time on the business day prior to the Effective Date. Prior to the Scheme becoming effective, it is intended that Holidaybreak will make an application for the cancellation of the listing of the Holidaybreak Shares on the Official List and for the cancellation of trading of the Holidaybreak Shares on the London Stock Exchange's main market for listed securities, such cancellations to take effect on or shortly after the Effective Date.
The Scheme will contain a provision for Holidaybreak to consent, on behalf of all persons concerned, to any modification of or addition to the Scheme or to any condition that the Court may approve or impose which in each case is acceptable to Cox & Kings and Holidaybreak. Holidaybreak has been advised that it is unlikely that the Court would impose any condition to the Scheme that might be material to the interests of Holidaybreak Shareholders unless Holidaybreak Shareholders were informed in advance.
Cox & Kings reserves the right, subject to the consent of the Panel, to elect to implement the Acquisition by way of a takeover offer. In this event, that offer will be implemented on the same terms (subject to appropriate amendments as described in Part 2 of Appendix 1), so far as applicable, as those which would apply to the Scheme. If Cox & Kings elects to implement the Acquisition by way of a takeover offer, and if sufficient acceptances of such offer are received and/or sufficient Holidaybreak Shares are otherwise acquired, it is the intention of Cox & Kings to apply the provisions of sections 979 to 982 (inclusive) of the Companies Act to acquire compulsorily any outstanding Holidaybreak Shares to which such offer relates.
The expected timetable of principal events is as follows:
Event Expected Timing
Posting of Scheme Document 10 August 2011
Court Meeting and General Meeting 2 September 2011
First Court Hearing to sanction the Scheme 22 September 2011
Second Court Hearing to confirm the Reduction of Capital 26 September 2011
Effective Date 27 September 2011
Consideration to be posted to Shareholders within 14 days of the
Effective Date
A more detailed timetable will be included in the Scheme Document.
14. Implementation Agreement, Inducement Fee and Matching Right
Cox & Kings and Holidaybreak have entered into the Implementation Agreement which contains, amongst other things, certain obligations and commitments in relation to implementation of the Acquisition in accordance with an agreed indicative timetable and contains assurances and confirmations between the parties, including provisions to govern the conduct of Holidaybreak's business during the period prior to the Effective Date.
Holidaybreak has agreed that, if a third party makes a Competing Proposal, Holidaybreak shall procure that the Holidaybreak Directors promptly notify Cox & Kings of the fact of that approach and promptly notify Cox & Kings if such person is given access to confidential information relating to Holidaybreak. Holidaybreak has also agreed that it shall not solicit any Competing Proposal nor underwrite the costs of any Competing Proposal nor agree any inducement fee with any other party nor disclose information to any third party in connection with a possible Competing Proposal other than pursuant to a request pursuant to rule 20.2 of the City Code. Holidaybreak also agrees to provide to Cox & Kings any information not previously provided to Cox & Kings that it provides to a third party in connection with any possible Competing Proposal.
If any person makes an Independent Competing Offer Announcement, Cox & Kings may amend the terms of the Acquisition (the "Revised Offer") and for a period of two business days from the Independent Competing Offer Announcement Holidaybreak shall not withdraw the Scheme. In the event that such Revised Offer:
· is communicated to either the Holidaybreak Directors or Holidaybreak's financial adviser within two business days of the Independent Competing Offer Announcement; and
· increases the Offer Price so that such increased cash price is no less than the price offered in the Independent Competing Offer Announcement,
then the Holidaybreak Directors shall recommend the Revised Offer to the Holidaybreak Shareholders and shall withdraw any recommendation that they may have made of the Competing Proposal and shall not recommend the Competing Proposal set out in such Independent Competing Offer Announcement.
Holidaybreak has agreed to pay Cox & Kings an inducement fee of £3,102,666 (being one per cent. of the value of Holidaybreak's fully diluted equity share capital taking into account only those warrants and options that are "in the money", on the assumption that all warrants and options will be exercised to the fullest extent possible, and attributing a "see through" value to the options and warrants (being their value by reference to the value of the offer for the shares to which they relate, net of any exercise price and any shares held in trust) based on an offer price of 432.1 pence per Holidaybreak ordinary share)), subject to any adjustment for VAT, which will become due and payable seven days after the occurrence of any of the following events:
· the Holidaybreak Directors (or any committee of the Holidaybreak Directors) not unanimously and without qualification recommend the Acquisition or withdraw or adversely modify or qualify their recommendation of the Acquisition; or
· the Holidaybreak Directors determine not to implement the Acquisition by refusing to put forward the Scheme (unless Cox & Kings has previously elected to implement the Acquisition by way of a takeover offer in accordance with the Implementation Agreement); or
· following the Holidaybreak Resolutions having been passed by the requisite majorities, the Holidaybreak Directors do not seek the sanction of the Scheme by the Court or the confirmation of the Reduction of Capital by the Court (unless Cox & Kings has previously elected to implement the Acquisition by way of a takeover offer in accordance with the Implementation Agreement); or
· a Competing Proposal (or any amendment, variation or revision of such) is announced and such Competing Proposal subsequently becomes or is declared unconditional in all respects or is otherwise completed or implemented and the Acquisition does not complete; or
· Holidaybreak enters into an agreement with any third party pursuant to which Holidaybreak agrees to pay a fee to such third party upon the occurrence of any events similar or substantially equivalent to the above.
The Implementation Agreement shall, save in respect of any rights which have arisen before termination, terminate upon the earliest to occur of:
· a Competing Proposal becoming or being declared wholly unconditional or completing;
· the Scheme not being sanctioned by Holidaybreak Shareholders at the Court Meeting or the Special Resolution not being passed at the General Meeting, unless Cox & Kings has previously elected to implement the Acquisition by way of a takeover offer (in accordance with the Implementation Agreement);
· the Court declining or refusing to sanction the Scheme, unless Cox & Kings has previously elected to implement the Acquisition by way of a takeover offer (in accordance with the Implementation Agreement);
· Cox & Kings electing to implement the Acquisition by way of a takeover offer (in accordance with the Implementation Agreement) and such takeover offer subsequently lapses or is withdrawn;
· either party being in material breach of the Implementation Agreement, and in such situation by notice to the party in breach from the party not in breach;
· the recommendation by the Holidaybreak Directors to vote in favour of the Scheme or to accept a takeover offer being is withdrawn, qualified or adversely amended;
· any Condition which has not been waived becoming incapable of satisfaction; and
· any Condition which is incapable of waiver becoming incapable of satisfaction.
The obligation to pay the inducement fee shall survive any termination of the Implementation Agreement.
Under the terms of the Implementation Agreement, Cox & Kings has retained the right to implement the Acquisition by way of a takeover offer for Holidaybreak at any time by notifying Holidaybreak in writing.
The Board of Holidaybreak and its financial advisers, Citi, consider the inducement fee and the circumstances in which it may be payable to be in the best interests of Holidaybreak and the Holidaybreak Shareholders.
15. Overseas Holidaybreak Shareholders
The availability of the Acquisition or the distribution of this announcement to persons who are not resident in the UK may be affected by the laws of the relevant jurisdictions in which they are located. Persons who are not resident in the UK should inform themselves of, and observe, any applicable requirements.
16. General
This announcement does not constitute an offer for sale of any securities or an offer or an invitation to purchase any securities. Holidaybreak Shareholders are advised to read carefully the Scheme Document and related forms of proxy once these have been dispatched.
The Acquisition will be governed by English law and will be subject to the jurisdiction of the English courts. The Acquisition will be subject to the applicable requirements of the City Code, the Panel, the London Stock Exchange and the Financial Services Authority.
The bases and sources of certain financial information contained in this announcement are set out in Appendix 2 to this announcement.
Certain terms used in this announcement are defined in Appendix 4 to this announcement.
Enquiries:
Cox & Kings +91 22 2270 9100
Peter Kerkar, Director
Anil Khandelwal, Group CFO
Thomas C. Thottathil, Head of Corporate Communications
Nomura (financial adviser to Cox & Kings) +44 20 7521 2000
Adrian Fisk
Henry Phillips
Nishant Amin
Nomura (corporate broking) +44 20 7521 2000
Richard Snow
Nicholas Marren
Adfactors PR Pvt Ltd (PR adviser to Cox & Kings) +91 22 2281 3565
Rama Naidu
Holidaybreak +44 1606 787 100
Martin Davies, Group Chief Executive
Neil Bright, Group Finance Director
Citi (financial adviser to Holidaybreak) +44 20 7986 4000
Jan Skarbek
Benjamin Willer
Michael Fauconnier-Bank
Peel Hunt (corporate broker to Holidaybreak) +44 20 7418 8900
Dan Webster
Matthew Armitt
Brunswick (PR adviser to Holidaybreak) +44 20 7404 5959
Catherine Hicks
Craig Breheny
Oliver Hughes
IMPORTANT NOTICES
This announcement is not intended to, and does not, constitute or form part of an offer, invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities, or the solicitation of any vote or approval in any jurisdiction, pursuant to the Acquisition or otherwise. The Acquisition will be made solely by means of the Scheme Document, which will contain the full terms and conditions of the Acquisition (including details of how to vote in respect of the Scheme). Any vote in respect of the Scheme should be made only on the basis of the information contained in the Scheme Document. Holidaybreak Shareholders are advised to read the Scheme Document carefully, once it has been dispatched.
Please be aware that addresses, electronic addresses and certain other information provided by Holidaybreak Shareholders, persons with information rights and other relevant persons for the receipt of communications from Holidaybreak may be provided to Cox & Kings during the offer period as required under Section 4 of Appendix 4 of the City Code on Takeovers and Mergers (the "City Code").
Nomura is authorised and regulated by the Financial Services Authority. Nomura is acting for Cox & Kings and no one else in connection with the Acquisition and will not be responsible to anyone other than Cox & Kings for providing the protections afforded to clients of Nomura nor for providing advice in connection with the Acquisition or the matters referred to in this announcement.
Citi is authorised and regulated by the Financial Services Authority. Citi is acting for Holidaybreak and no one else in connection with the Acquisition and will not be responsible to anyone other than Holidaybreak for providing the protections afforded to clients of Citi nor for providing advice in connection with the Acquisition or the matters referred to in this announcement.
Peel Hunt is authorised and regulated by the Financial Services Authority. Peel Hunt is acting for Holidaybreak and no one else in connection with the Acquisition and will not be responsible to anyone other than Holidaybreak for providing the protections afforded to clients of Peel Hunt nor for providing advice in connection with the Acquisition or the matters referred to in this announcement.
Overseas Jurisdictions
The distribution of this announcement in jurisdictions other than the UK and the availability of the Acquisition to Holidaybreak Shareholders who are not resident in the UK may be affected by the laws of such jurisdictions. Therefore any persons who are subject to the laws of any jurisdiction other than the UK or Holidaybreak Shareholders who are not resident in the UK will need to inform themselves about, and observe, any applicable requirements.
This announcement has been prepared for the purpose of complying with English law and the City Code and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws of jurisdictions outside the UK.
Holidaybreak Shareholders resident in the United States ("US Holders") should note that the Acquisition relates to the shares of an English company, is subject to UK disclosure requirements (which are different from those of the United States) and is proposed to be made by means of a scheme of arrangement provided for under English law. A transaction effected by means of a scheme of arrangement is not subject to the tender offer rules under the US Exchange Act. Accordingly, the Acquisition is subject to the disclosure requirements and practices applicable in the UK to schemes of arrangement which differ from the disclosure requirements of the United States tender offer rules. Financial information included in this announcement has been prepared, unless specifically stated otherwise, in accordance with accounting standards applicable in the UK and thus may not be comparable to the financial information of United States companies or companies whose financial statements are prepared in accordance with generally accepted accounting principles in the United States. If Cox & Kings exercises its right to implement the Acquisition by way of a takeover offer, such offer will be made in compliance with applicable United States laws and regulations.
The receipt of cash pursuant to the Acquisition by a US Holder as consideration for the cancellation of its Holidaybreak Shares pursuant to the Scheme may be a taxable transaction for United States federal income tax purposes and under applicable United States state and local, as well as foreign and other, tax laws. Each Holidaybreak Shareholder is urged to consult his independent professional adviser immediately regarding the tax consequences of the Acquisition applicable to him.
It may be difficult for US Holders to enforce their rights and claims arising out of United States federal securities laws, since Cox & Kings and Holidaybreak are located in countries other than the United States, and some or all of their officers and directors may be residents of countries other than the United States. US Holders may not be able to sue a non-United States company or its officers or directors in a non-United States court for violations of United States securities laws. Further, it may be difficult to compel a non-United States company and its affiliates to subject themselves to a United States court's judgement.
In accordance with normal UK practice and pursuant to Rule 14e-5(b) of the US Exchange Act, Cox & Kings or its nominees, or its brokers (acting as agents), may from time to time make certain purchases of, or arrangements to purchase, Holidaybreak Shares outside of the United States, other than pursuant to the Acquisition, until the date on which the Acquisition and/or Scheme becomes effective, lapses or is otherwise withdrawn. These purchases may occur either in the open market at prevailing prices or in private transactions at negotiated prices. Any information about such purchases will be disclosed as required in the UK, will be reported to the Regulatory News Service of the London Stock Exchange and will be available on the London Stock Exchange website at http://www.londonstockexchange.com/prices-and-news/prices-news/home.htm.
Dealing disclosure requirements
Under Rule 8.3(a) of the City Code, any person who is interested in 1 per cent. or more of any class of relevant securities of an offeree company or of any paper offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any paper offeror is first identified.
An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any paper offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any paper offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a paper offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the City Code, any person who is, or becomes, interested in 1 per cent. or more of any class of relevant securities of the offeree company or of any paper offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any paper offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any paper offeror, save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.
If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a paper offeror, they will be deemed to be a single person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).
Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. If you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure, you should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129.
Publication on websites
In accordance with Rule 19.11 of the City Code, a copy of this announcement will be available on Cox & Kings' website (www.coxandkings.com) and on Holidaybreak's website (www.holidaybreak.co.uk) by no later than 12 noon (London time) on 28 July 2011 and will remain available during the course of the Acquisition.
Rule 2.10 Disclosure
In accordance with Rule 2.10 of the City Code, Holidaybreak confirms that, as at the close of business on 26 July 2011, being the last business day prior to the Announcement Date, it had 70,607,760 ordinary shares of 5 pence each in issue on the main market of the London Stock Exchange, all with equal voting rights. The total number of voting rights in Holidaybreak is therefore 70,607,760. The International Securities Identification Number for the Holidaybreak Shares is GB0003164950.
Forward Looking Statements
This announcement, oral statements made regarding the Acquisition and other information published by Holidaybreak or Cox & Kings may contain certain statements that are or may be forward-looking. These statements are based on the current expectations of the management of Holidaybreak and Cox & Kings (as the case may be) and are naturally subject to uncertainty and changes in circumstances. The forward-looking statements contained herein may include statements about the expected effects on Holidaybreak or Cox & Kings of the Acquisition, the expected timing and scope of the Acquisition, strategic options and all other statements in this document other than historical facts. Without limitation, any statements preceded or followed by or that include the words "targets", "plans", "believes", "expects", "aims", "intends", "will", "may", "should", "would", "could", "anticipates", "estimates", "projects" or words or terms of similar substance or the negative thereof, are forward-looking statements. Forward-looking statements include statements relating to the following: (i) future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects; and (ii) business and management strategies and the expansion and growth of Cox & Kings' or Holidaybreak's operations and potential synergies resulting from the Acquisition. Although Holidaybreak and Cox & Kings believe that the expectations reflected in such forward-looking statements are reasonable, Holidaybreak and Cox & Kings can give no assurance that such expectations will prove to be correct. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements. These factors include, but are not limited to, the satisfaction of the conditions to the Acquisition, as well as additional factors, such as changes in economic conditions, changes in the level of capital investment, success of business and operating initiatives and restructuring objectives, customers' strategies and stability, changes in the regulatory environment, fluctuations in interest and exchange rates, the outcome of litigation, government actions and natural phenomena such as floods, earthquakes and hurricanes. Other unknown or unpredictable factors could cause actual results to differ materially from those in the forward-looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. Neither Holidaybreak nor Cox & Kings undertakes any obligation to update publicly or revise forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent required pursuant to applicable law.
APPENDIX 1
CONDITIONS AND FURTHER TERMS OF THE ACQUISITION
PART 1
CONDITIONS OF THE ACQUISITION
1. The Acquisition will, if it is implemented by way of the Scheme, be conditional upon the Scheme becoming unconditional and becoming effective by no later than 13 January 2012 or such later date (if any) as Cox & Kings and Holidaybreak may, with the consent of the Panel, agree and (if required) the Court may allow.
2. The Scheme will be conditional upon:
(a) its approval by a majority in number representing not less than 75 per cent. in value of the Scheme Shareholders (or the relevant class or classes thereof, if applicable) present and voting, either in person or by proxy, at the Court Meeting and at any separate class meeting which may be required by the Court or at any adjournment of any such meeting;
(b) all resolutions necessary to approve and implement the Scheme being duly passed by the requisite majority or majorities at the General Meeting or at any adjournment of the General Meeting; and
(c) the sanction of the Scheme by the Court with or without modification (but subject to any such modification being acceptable to Cox & Kings and Holidaybreak), the confirmation of the Reduction of Capital by the Court, the delivery of an office copy of each of the Scheme Court Order and the Reduction Court Order and of the Statement of Capital to the Registrar of Companies.
3. In addition, Cox & Kings and Holidaybreak have agreed that the Acquisition will be conditional upon the following conditions and, accordingly, the necessary actions to make the Scheme effective will not be taken unless the following conditions (as amended if appropriate) have been satisfied or, where relevant, waived:
(a)
(i) it being established, in terms reasonably satisfactory to Cox & Kings, that neither the Office of Fair Trading nor the Secretary of State intends to refer the proposed acquisition of Holidaybreak by Cox & Kings or any matter arising from or relating to that proposed acquisition to the Competition Commission for investigation; and
(ii) it being established, in terms reasonably satisfactory to Cox & Kings, that no request has been made to the European Commission by the competent authorities of one or more Member States under Article 22(1) of Council Regulation (EC) No. 139/2004 (the Regulation) for the European Commission to examine the proposed acquisition of Holidaybreak by Cox & Kings or any matter arising from or relating to that proposed acquisition.
(b) no government or governmental, quasi-governmental, supranational, statutory, administrative or regulatory body or association, institution or agency (including any trade agency) or any court or other body (including any professional or environmental body) or person in any jurisdiction (each a "Relevant Authority") having decided to take, instituted or threatened any action, proceeding, suit, investigation, enquiry or reference or enacted, made or proposed and there not continuing to be outstanding any statute, regulation, order or decision that would or might be reasonably expected to:
(i) make the Acquisition or its implementation or the acquisition or the proposed acquisition of any shares in, or control of, Holidaybreak by any member of the Wider Cox & Kings Group void, unenforceable or illegal or directly or indirectly prohibit or otherwise materially restrict, delay or interfere with the implementation of, or impose material additional conditions or obligations with respect to, or otherwise challenge, the Acquisition or its implementation or the acquisition or the proposed acquisition of any shares in, or control of, Holidaybreak by any member of the Wider Cox & Kings Group;
(ii) require, prevent or materially delay the divestiture (or alter the terms of any proposed divestiture) by the Wider Cox & Kings Group or the Wider Holidaybreak Group of all or any substantial part of their respective businesses, assets or properties or impose any material limitation on their ability to conduct all or any part of their respective businesses and to own any of their respective assets or properties in each case to an extent which is material in the context of the Wider Cox & Kings Group taken as a whole or, as the case may be, the Wider Holidaybreak Group taken as a whole;
(iii) impose any material limitation on, or result in any material delay in, the ability of any member of the Wider Cox & Kings Group to acquire or hold or to exercise effectively, directly or indirectly, all or any rights of ownership of shares or other securities (or the equivalent) in, or to exercise management control over, any member of the Wider Holidaybreak Group or on the ability of any member of the Wider Holidaybreak Group to hold or exercise effectively, directly or indirectly, all or any rights of ownership of shares or other securities (or the equivalent) in, or to exercise management control over, any other member of the Wider Holidaybreak Group in each case to an extent which is material in the context of the Wider Cox & Kings Group taken as a whole or, as the case may be, the Wider Holidaybreak Group taken as a whole;
(iv) require any member of the Wider Cox & Kings Group or of the Wider Holidaybreak Group to acquire or offer to acquire any shares or other securities (or the equivalent) in any member of the Wider Holidaybreak Group or any member of the Wider Cox & Kings Group (other than pursuant to the Scheme) where such acquisition would be material in the context of the Wider Cox & Kings Group taken as a whole or, as the case may be, the Wider Holidaybreak Group taken as a whole;
(v) impose any material limitation on the ability of any member of the Wider Cox & Kings Group or the Wider Holidaybreak Group to integrate or co-ordinate its business, or any part of it, with the businesses or any part of the businesses of any other member of the Wider Cox & Kings Group and/or the Wider Holidaybreak Group in each case in a manner which would be material in the context of the Wider Cox & Kings Group taken as a whole or, as the case may be, the Wider Holidaybreak Group taken as a whole; or
(vi) otherwise materially and adversely affect the business, assets, financial or trading position or profits or prospects of any member of the Wider Cox & Kings Group or of the Wider Holidaybreak Group to an extent which is material in the context of the Wider Holidaybreak Group taken as a whole or, as the case may be, the Wider Cox & Kings Group taken as a whole,
and all applicable waiting and other time periods during which any such Relevant Authority could decide to take, institute or threaten any such action, proceeding, suit, investigation, enquiry or reference having expired, lapsed or been terminated;
(c) all necessary filings having been made and all appropriate waiting periods (including any extensions thereof) under any applicable legislation or regulation of any jurisdiction having expired, lapsed or been terminated in each case in respect of the Acquisition and its implementation and the acquisition or proposed acquisition of any shares in, or control of, Holidaybreak by Cox & Kings and all authorisations, orders, grants, recognitions, confirmations, licences, consents, clearances, permissions and approvals (authorisations) reasonably necessary or appropriate in any jurisdiction for or in respect of the Acquisition and its implementation and the acquisition or proposed acquisition of any shares in, or control of, Holidaybreak by Cox & Kings being obtained in terms and in a form reasonably satisfactory to Cox & Kings from appropriate Relevant Authorities (in each case where the absence of such authorisation would have a material adverse effect on the Wider Holidaybreak Group taken as a whole) and such authorisations together with all authorisations necessary or appropriate for any member of the Wider Holidaybreak Group to carry on its business (where such business is material in the context of the Wider Holidaybreak Group taken as a whole) remaining in full force and effect and no intimation of any intention to revoke, suspend, restrict or modify or not to renew any of the same having been made and all material and necessary statutory or regulatory obligations in any jurisdiction having been complied with;
(d) save as fairly disclosed to Cox & Kings in writing before the Announcement Date, there being no provision of any agreement, arrangement, licence or other instrument to which any member of the Wider Holidaybreak Group is a party or by or to which any such member or any of its assets is or may be bound, entitled or subject which, as a result of the Acquisition or its implementation or the acquisition or proposed acquisition by any member of the Wider Cox & Kings Group of any shares in, or change in the control or management of, Holidaybreak or otherwise, would or might (to an extent which is materially adverse in the context of the Wider Holidaybreak Group taken as a whole) reasonably be expected to result in:
(i) any material amount of monies borrowed by or any other material indebtedness (actual or contingent) of any such member of the Wider Holidaybreak Group becoming repayable or capable of being declared repayable immediately or earlier than the stated repayment date or the ability of such member to borrow monies or incur any material indebtedness being withdrawn or inhibited;
(ii) the creation or enforcement of any mortgage, charge or other security interest over the whole or any substantial part of the business, property or assets of any such member of the Wider Holidaybreak Group or any such security interest (whenever arising or having arisen) becoming enforceable;
(iii) any material assets or interest of any such member of the Wider Holidaybreak Group being or falling to be disposed of or charged or any right arising under which any such asset or interest could be required to be disposed of or charged, other than in the ordinary course of trading;
(iv) the interest or business of any such member of the Wider Holidaybreak Group in or with any other person, firm or company (or any agreements or arrangements relating to such interest or business) being terminated or materially and adversely affected;
(v) any such member of the Wider Holidaybreak Group ceasing to be able to carry on business under any name under which it presently does so, where such a result would be material in the context of the Wider Holidaybreak Group taken as a whole;
(vi) the value of any such member of the Wider Holidaybreak Group or its financial or trading position or prospects being prejudiced or materially and adversely affected;
(vii) any such agreement, arrangement, licence or other instrument being terminated or materially and adversely modified or any onerous obligation arising or any material adverse action being taken or arising thereunder; or
(viii) the creation of any material liabilities (actual or contingent) by any such member,
and no event having occurred which, under any provision of any agreement, arrangement, licence or other instrument to which any member of the Wider Holidaybreak Group is a party or by or to which any such member or any of its assets may be bound or be subject, could result in any events or circumstances as are referred to in subparagraphs (i) to (viii) of this paragraph (d) in any case where such result would be material in the context of the Wider Holidaybreak Group taken as a whole unless, if such provision exists, such provision has been waived, modified or amended on terms reasonably satisfactory to Bidco;
(e) except as disclosed in the Annual Report and Accounts of Holidaybreak for the year ended 30 September 2010 or as publicly announced to a Regulatory Information Service by or on behalf of Holidaybreak or as otherwise fully and fairly disclosed to Cox & Kings in writing before the Announcement Date, no member of the Wider Holidaybreak Group having since 30 September 2010:
(i) issued or agreed to issue or authorised 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 transferred or sold any shares out of treasury save as between Holidaybreak and wholly-owned subsidiaries of Holidaybreak prior to the Announcement Date or upon the exercise of rights to subscribe for Holidaybreak Shares pursuant to options granted under the Holidaybreak Share Schemes prior to the Announcement Date;
(ii) recommended, declared, paid or made any bonus, dividend or other distribution, whether payable in cash or otherwise, other than a distribution by any wholly-owned subsidiary of Holidaybreak and save for the final dividend of 7.9 pence per Holidaybreak Share paid on 6 May 2011 to Holidaybreak Shareholders on the register on 8 April 2011 and the interim dividend for 2011 of 3.35 pence per Holidaybreak share payable on 10 August 2011 to Holidaybreak Shareholders on the register on 15 July 2011;
(iii) except for intra-Holidaybreak Group transactions, implemented or authorised any merger or demerger or (other than in the ordinary course of business and provided not material) acquired or disposed of or transferred, mortgaged or charged, or created any other security interest over, any asset or any right, title or interest in any asset;
(iv) except for intra-Holidaybreak Group transactions or under the Scheme, implemented or authorised any reconstruction, amalgamation, scheme or other transaction or arrangement (other than in the ordinary course of business);
(v) except for intra-Holidaybreak Group transactions or under the Holidaybreak Share Schemes, purchased, redeemed or repaid any of its own shares or other securities or reduced or made or authorised any other change in its share capital;
(vi) made or authorised any change in its loan capital or issued or authorised the issue of any debentures or (other than in the ordinary course of business and save as between Holidaybreak and wholly-owned subsidiaries of Holidaybreak) incurred or increased any indebtedness or contingent liability;
(vii) entered into, varied or terminated, or authorised the entry into, variation or termination of, any contract, commitment or arrangement (whether in respect of capital expenditure or otherwise) which is outside the ordinary course of business or which is of a long term, onerous or unusual nature or magnitude or which involves or could involve an obligation of a nature or magnitude which is material in the context of the Wider Holidaybreak Group taken as a whole;
(viii) entered into any contract, commitment or arrangement which would be restrictive on the business of any member of the Wider Holidaybreak Group or the Wider Cox & Kings Group taken as a whole (other than to a nature and extent which is not material);
(ix) been unable or deemed unable, or admitted in writing that it is unable, to pay its debts as they fall due or having stopped or suspended (or threatened to stop or suspend) payment of its debts generally or ceased or threatened to cease carrying on all or a substantial part of its business;
(x) commenced negotiations with any of its creditors or taken any step with a view to rescheduling or restructuring any of its indebtedness or entered into a composition, compromise, assignment or arrangement with any of its creditors whether by way of a voluntary arrangement, scheme of arrangement, deed of compromise or otherwise;
(xi) (other than in respect of a member which is dormant and was solvent at the relevant time) taken any corporate action or had any legal proceedings started or threatened against it or any documents filed or faxed in court for its winding-up (voluntary or otherwise), dissolution or reorganisation (or for any analogous proceedings or steps in any jurisdiction) or for the appointment of a liquidator, provisional liquidator, receiver, administrator, administrative receiver, trustee or similar officer (or for the appointment of any analogous person in any jurisdiction) of all or any of its assets and revenues or had notice given of the intention to appoint any of the foregoing to it;
(xi) waived, compromised, settled, abandoned or admitted any dispute, claim or counter-claim whether made or potential and whether by or against any member of the Wider Holidaybreak Group which together or separately is material in the context of the Wider Holidaybreak Group taken as a whole;
(xii) made any alteration to its articles of association;
(xiii) entered into or varied the terms of, or terminated or given notice of termination of, any service agreement or arrangement with any director or senior executive of any member of the Wider Holidaybreak Group;
(xiv) other than under the Scheme or in the ordinary course of business, agreed to provide, or agreed to modify the terms of, any share option scheme, incentive scheme or other benefit relating to the employment or termination of employment of any person employed by any member of the Wider Holidaybreak Group;
(xvi) agreed any material increase to the employer contributions payable to any pension scheme for directors and/or employees of the Wider Holidaybreak Group ("Pension Schemes"), or made any material payment to any Pension Scheme in excess of that required under any schedule of contributions, agreed any actuarial valuation, statement of funding principles or recovery plan applicable to any defined benefit pension scheme which is materially more onerous than previous funding terms, or been involved in any change by the trustees of any such Pension Scheme of the trustees' investment policy which necessitates material additional funding or which materially increases any actuarial deficit;
(xvi) taken any action or suffered any event which has given rise to or is reasonably expected to give rise to a material liability under section 75 of the Pensions Act 1995;
(xvii) been a party to an act or a deliberate failure to act which may give rise to the issue of a contribution notice within section 38 or 47 of the Pensions Act 2004 or suffered the issue of such a contribution notice or of a financial support direction under section 43 of the Pensions Act 2004;
(xviii) changed the terms of or increased any benefits under any Pension Scheme (or agreed to do so) in a way which is materially adverse to the Wider Holidaybreak Group taken as a whole; or
(xix) entered into any contract, commitment or arrangement or passed any resolution or made any offer (which remains open for acceptance) with respect to, or proposed or announced any intention to effect or propose, any of the transactions, matters or events referred to in this condition 3(e);
(f) since 30 September 2010 (except as disclosed in the Annual Report and Accounts of Holidaybreak for the year then ended or fairly disclosed in writing to Cox & Kings or as publicly announced to a Regulatory Information Service by or on behalf of Holidaybreak before the Announcement Date):
(i) no adverse change having occurred in the business, assets, financial or trading position or profits or prospects of any member of the Wider Holidaybreak Group which is material in the context of the Holidaybreak Group taken as a whole;
(ii) no litigation, arbitration proceedings, prosecution or other legal proceedings in any jurisdiction having been threatened, announced, instituted or remaining outstanding by, against or in respect of any member of the Wider Holidaybreak Group or to which any member of the Wider Holidaybreak Group is a party (whether as claimant or defendant or otherwise) and no investigation by any Relevant Authority or other investigative body against or in respect of any member of the Wider Holidaybreak Group having been threatened, announced, instituted or remaining outstanding by, against or in respect of any member of the Wider Holidaybreak Group which would or might reasonably be expected materially and adversely to affect the Wider Holidaybreak Group taken as a whole; and
(iii) no contingent or other liability having arisen which would or might reasonably be expected materially and adversely to affect the Wider Holidaybreak Group taken as a whole;
(g) Cox & Kings not having discovered that:
(i) any financial, business or other information disclosed at any time by any member of the Wider Holidaybreak Group is misleading, contains a misrepresentation of fact or omits to state a fact necessary to make the information contained therein not misleading which in any case is material and adverse to the financial or trading position of the Wider Holidaybreak Group taken as a whole;
(ii) save for liabilities incurred in connection with the Scheme, any member of the Wider Holidaybreak Group is subject to any liability, contingent or otherwise, which is not disclosed in the Annual Report and Accounts of Holidaybreak for the year ended 30 September 2010 or fairly disclosed in writing to Cox & Kings or has not been publicly announced to a Regulatory Information Service by or on behalf of Holidaybreak before the Announcement Date and which is material in the context of the Wider Holidaybreak Group taken as a whole;
(iii) any past or present member of the Wider Holidaybreak Group has failed to comply with any applicable legislation or regulations of any jurisdiction or any notice or requirement of any Relevant Authority with regard to the storage, disposal, discharge, spillage, release, leak or emission of any waste or hazardous or harmful substance or any substance likely to impair the environment or harm human or animal health or otherwise relating to environmental matters or that there has otherwise been any such storage, disposal, discharge, spillage, release, leak or emission (whether or not the same constituted non-compliance by any person with any such legislation or regulation, and whenever the same may have taken place), any of which non-compliance would be likely to give rise to any liability (whether actual or contingent) or cost on the part of any member of the Wider Holidaybreak Group and which is material in the context of the Wider Holidaybreak Group taken as a whole; or
(iv) there is or is likely to be any obligation or liability (whether actual or contingent) to make good, repair, re-instate or clean up any property now or previously owned, occupied, operated or made use of or controlled by any past or present member of the Wider Holidaybreak Group under any environmental legislation, regulation, notice, circular or order of any Relevant Authority in any jurisdiction and which is material in the context of the Wider Holidaybreak Group taken as a whole.
To the extent permitted by law and subject to the requirements of the Panel, Cox & Kings reserves the right to waive all or any of conditions 3(a) to 3(g) inclusive, in whole or in part. Cox & Kings shall be under no obligation to waive or treat as fulfilled any of conditions 3(a) to 3(g) inclusive by a date earlier than the date specified in condition 1 above for the fulfilment thereof notwithstanding that the other conditions of the Acquisition may at such earlier date have been waived or fulfilled and that there are at such earlier date no circumstances indicating that any of such conditions may not be capable of fulfilment.
If Cox & Kings is required by the Panel to make an offer for any Holidaybreak Shares under Rule 9 of the City Code, Cox & Kings may make such alterations to the above conditions as are necessary to comply with that Rule.
The Scheme will lapse (unless the Panel otherwise consents) if, before the Court Meeting or the General Meeting (whichever is later), the proposed acquisition of Holidaybreak by Cox & Kings or any matter arising from or relating to that proposed acquisition is referred to the Competition Commission.
For these purposes, matters will have been disclosed in writing to Cox & Kings if included in the online data room relating to the Acquisition provided by Eversheds LLP from 10 June 2011 to the business day immediately prior to the Announcement Date.
PART 2
CERTAIN FURTHER TERMS OF THE ACQUISITION
1. Cox & Kings reserves the right, subject to the consent of the Panel, to elect to implement the Acquisition by way of a takeover offer as it may determine in its absolute discretion. In such event, such takeover offer will be implemented on the same terms, so far as applicable, as those which would apply to the Scheme, subject to appropriate amendments to reflect the change in method of effecting the Acquisition. If Cox & Kings makes a takeover offer it will be conditional on valid acceptances being received in respect of 90 per cent. (or such lower percentage as Cox & Kings may decide or the Panel may require): (i) in nominal value of the Holidaybreak Shares to which such offer relates; (ii) of the voting rights attached to those Holidaybreak Shares; and (iii) of the voting rights normally exercisable at a general meeting of Holidaybreak, including, for this purpose, any such voting rights attaching to Holidaybreak Shares that are unconditionally allotted or issued before the takeover offer becomes or is declared unconditional as to acceptances, whether pursuant to the exercise of any outstanding subscription or conversion rights or otherwise.
2. Save to the extent cancelled by the Scheme, Holidaybreak Shares will be acquired by Cox & Kings fully paid and free from all liens, charges, encumbrances, rights of pre-emption and any other third party rights of any nature whatsoever and together with all rights attaching thereto including the right to receive in full all dividends and other distributions declared, paid or made after the Announcement Date (other than the interim dividend of 3.35 pence per Holidaybreak Share announced by Holidaybreak on 24 May 2011).
3. The availability of the Acquisition to 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 about and observe any applicable requirements.
4. The Acquisition and the Scheme will be governed by English law and will be subject to the jurisdiction of the English courts and to the conditions set out above and to be set out in the Scheme Document, and to the applicable rules and regulations of the City Code, the Panel, the London Stock Exchange and the Financial Services Authority.
APPENDIX 2
SOURCES OF INFORMATION AND BASES OF CALCULATION IN THIS ANNOUNCEMENT
In this announcement:
(a) The value placed by the Acquisition on the issued share capital of Holidaybreak and other statements made by reference to the issued share capital of Holidaybreak are based upon 70,607,760 Holidaybreak Shares in issue on 26 July 2011 (the last business day prior to the date of this announcement).
(b) References to the entire issued and to be issued share capital or fully diluted share capital of Holidaybreak are based upon (i) 70,607,760 Holidaybreak Shares in issue as set out in paragraph (a); (ii) 2,068,243 Holidaybreak Shares being acquired pursuant to options and awards outstanding under the Holidaybreak Share Schemes as at 26 July 2011 (being the last business day prior to the date of this announcement), on the assumption that only "in the money" options and awards will be exercised and on the assumption that all such options and awards will be exercised to the fullest extent possible; and net of (iii) 481,822 Holidaybreak Shares which are held in trust by the Trustees in order to satisfy various options and share awards in (ii), being 72,194,181 Holidaybreak Shares in aggregate. The value of £312.0m for the fully diluted share capital of Holidaybreak which Cox & Kings proposes to acquire has been calculated by multiplying the fully diluted issued share capital of Holidaybreak (72,194,181 shares) by the 432.1 pence offer price.
(c) The closing prices of shares are derived from Bloomberg and represent closing middle market prices for shares on the relevant dates.
(d) Unless otherwise stated, the financial information relating to Holidaybreak is extracted from the audited financial statements of Holidaybreak for the year ended 30 September 2010, the unaudited financial statements for the six months ended 31 March 2011 or Regulatory Information Services.
(e) References to Holidaybreak net debt as at 31 March 2011 of £137.9m are calculated as net debt of £148.8m as extracted from the unaudited financial statements for the six months ended 31 March 2011, less the consideration of £10.9m, on a cash and debt free basis, from the subsequent disposal of West End Theatre Bookings Limited.
(f) Unless otherwise stated, financial information relating to Cox & Kings has been extracted or derived (without any adjustment) from Cox & Kings' full year results as of 31 March 2011, as filed with the Bombay Stock Exchange on 30 May 2011.
(g) The market capitalisation of Cox & Kings of approximately INR 26,985m has been extracted directly from the Bombay Stock Exchange website (www.bseindia.com) and is based on total issued share capital of 136,527,900 and the closing price of INR 197.65 on 26 July 2011.
(h) The GBP values of Cox & Kings' financials and market capitalisation are based on the INR / GBP exchange rate of 72.3996 as of 5:00pm London time on 26 July 2011 as sourced from Bloomberg.
APPENDIX 3
DETAILS OF IRREVOCABLE UNDERTAKINGS
1. Cox & Kings has received irrevocable undertakings to vote (or procure the vote) in favour of the Acquisition from the Holidaybreak Directors in respect of a total of 198,632 Holidaybreak Shares (their entire beneficial holdings of Holidaybreak Shares)representing approximately 0.28 per cent. of the issued ordinary share capital of Holidaybreak (prior to the exercise of options pursuant to the Holidaybreak Share Schemes prior to the Effective Date). These undertakings will cease to be binding in the event that inter alia: (a) the Scheme lapses or is withdrawn and no new, revised or replacement Scheme (or offer) has been announced by Cox & Kings, in accordance with Rule 2.5 of the City Code, at the same time; (b) any other offer or scheme of arrangement to acquire more than fifty per cent. of the issued voting share capital of Holidaybreak has become wholly unconditional or effective; or (c) the Scheme Document is not posted to Scheme Shareholders by the date which is 28 days from the date of this announcement (or such longer period as permitted by the Panel).
Details of the number of Holidaybreak Shares in respect of which each Holidaybreak Director has granted an irrevocable undertaking (as described above) are as follows:
|
Name |
Number of Holidaybreak Shares |
|
Neil Bright |
23,5501 |
|
Martin Davies |
42,160 |
|
John Coleman |
38,8742 |
|
James Greenbury |
46,719 |
|
Chris Stephens |
7,2223 |
|
Steve Whitfield |
40,1074 |
1Registered in the name of Kathryn Jane Bright
2Registered in the name of PH Nominees Ltd
3Registered in the name of Lion Nominees Limited
4 34,852 of these shares are registered in the name of Jacqueline Whitfield
2. Cox & Kings has received an irrevocable undertaking to vote in favour of the Acquisition from Artemis Investment Management LLP ("Artemis")in respect of a total of 3,705,495 Holidaybreak Shares controlled by Artemis (representing approximately 5.25 per cent. of the issued ordinary share capital of Holidaybreak). This undertaking will cease to be binding in the event that inter alia: (a) the Scheme lapses or is withdrawn and no new, revised or replacement Scheme or offer is announced in accordance with the City Code at the same time; (b) any other offer or scheme of arrangement to acquire more than fifty per cent. of the issued voting share capital of Holidaybreak has become wholly unconditional or effective; (c) a third party announces a firm intention to acquire Holidaybreak Shares under Rule 2.5 of the City Code in competition with the Acquisition and without any pre-conditions where the price per Holidaybreak Share offered by the third party is greater by 10 per cent. or more than the Offer Price; or (v) the Scheme Document is not posted within 28 days of the date of this announcement (or such longer period as may be permitted by the Panel).
3. Cox & Kings has received an irrevocable undertaking to vote in favour of the Acquisition from AXA Investment Managers UK Limited ("AXA") in respect of a total of 3,842,222 Holidaybreak Shares over which AXA has discretionary management control (representing approximately 5.44 per cent. of the issued ordinary share capital of Holidaybreak). This undertaking will cease to be binding in the event that inter alia: (a) the Scheme lapses or is withdrawn and no new, revised or replacement Scheme or offer is announced in accordance with the City Code at the same time; (b) any other offer or scheme of arrangement to acquire more than fifty per cent. of the issued voting share capital of Holidaybreak has become wholly unconditional or effective; (c) a third party announces a firm intention to acquire Holidaybreak Shares under Rule 2.5 of the City Code in competition with the Acquisition and without any pre-conditions where the price per Holidaybreak Share offered by the third party is greater by 5 per cent. or more than the Offer Price; or (v) the Scheme Document is not posted within 28 days of the date of this announcement (or such longer period as may be permitted by the Panel).
4. Cox & Kings has received an irrevocable undertaking to vote in favour of the Acquisition from Aberforth Partners LLP ("Aberforth"), in respect of a total of 4,317,933 Holidaybreak Shares over which Aberforth has discretionary and voting control (representing approximately 6.12 per cent. of the issued ordinary share capital of Holidaybreak). This undertaking will cease to be binding: (a) if an announcement is made, in accordance with Rule 2.5 of the City Code, of a competing offer in respect of the Holidaybreak Shares which represents, in the opinion of Aberforth, a value of not less than 453.7 pence per Holidaybreak Share controlled by Aberforth and Aberforth notify Cox & Kings or otherwise announce that they no longer intend to vote in favour of the Scheme; (b) in respect of Holidaybreak Shares controlled by Aberforth which are sold at a price of not less than 453.7 pence per Holidaybreak Share; (c) if the Scheme is withdrawn or does not become effective; or (d) if the Scheme Document is not posted within 28 days of the this announcement.
5. In aggregate therefore, Cox & Kings has received irrevocable undertakings to vote (or procure the vote) in favour of the Acquisition in respect of a total of 12,064,282 Holidaybreak Shares (representing approximately 17.1per cent. of the issued ordinary share capital of Holidaybreak).
6. Threadneedle Asset Management, which is able to control the exercise of all rights attaching to 4,495,899 Holidaybreak Shares (representing approximately 6.37 per cent. of the issued ordinary share capital of Holidaybreak), has confirmed to Cox & Kings that it intends to vote such Holidaybreak Shares in favour of the Acquisition.
7. Royal London Asset Management, which is able to control the exercise of all rights attaching to 2,575,988 Holidaybreak Shares (representing approximately 3.65 per cent. of the issued ordinary share capital of Holidaybreak), has confirmed to Cox & Kings that it intends to vote such Holidaybreak Shares in favour of the Acquisition.
8. Schroder Investment Management Limited has expressed an intention to Cox & Kings to procure that 914,422 Holidaybreak Shares (representing approximately 1.30 per cent. of the issued ordinary share capital of Holidaybreak) held on behalf of its clients and/or associates are, so far as reasonably practicable and subject to certain conditions, voted in favour of the Acquisition.
9. Aviva Investors Global Services Limited, as investment manager for certain clients who in aggregate hold 2,369,391 Holidaybreak Shares (representing approximately 3.36 per cent. of the issued ordinary share capital of Holidaybreak), has expressed an intention to Cox & Kings to vote (or procure the vote of) such Holidaybreak Shares in favour of the Acquisition.
10. In aggregate therefore, Cox & Kings has received letters of intent from institutional shareholders to vote (or procure the vote) in favour of the Acquisition in respect of a total of 10,355,700 Holidaybreak Shares (representing approximately 14.7 per cent. of the issued ordinary share capital of Holidaybreak).
APPENDIX 4
DEFINITIONS
The following definitions apply throughout this announcement unless the context requires otherwise.
|
"Acquisition" |
|
the proposed acquisition of the entire issued and to be issued share capital of Holidaybreak by Cox & Kings whether implemented by way of (i) the Scheme or (ii) a takeover offer
|
|
"Announcement Date" |
|
27 July 2011
|
|
"Axis Bank" |
|
Axis Bank Limited
|
|
"Bidco" |
|
Prometheon Holdings (UK) Limited, a company registered in England and Wales with registered number 7689108
|
|
"Bombay Stock Exchange" |
|
Bombay Stock Exchange Limited
|
|
"business day" |
|
a day on which the London Stock Exchange is open for the transaction of business (excluding Saturdays, Sundays and public holidays)
|
|
"Citi" |
|
Citigroup Global Markets Limited
|
|
"City Code" |
|
the City Code on Takeovers and Mergers
|
|
"Companies Act" |
|
the Companies Act 2006, as amended from time to time
|
|
"Competing Proposal" |
|
a proposed offer or scheme of arrangement (for the avoidance of doubt, whether or not subject to the satisfaction of any pre-condition) relating to any direct or indirect acquisition or purchase of 30 per cent. or more of the Holidaybreak Shares or of the business or assets of Holidaybreak and its subsidiaries (taken as a whole) proposed by any third party which is not acting in concert (as defined in the Code) with Cox & Kings |
|
|
|
|
|
"Court" |
|
the High Court of Justice in England and Wales
|
|
"Court Meeting" |
|
the meeting of the Scheme Shareholders to be convened by an order of the Court pursuant to section 896 of the Companies Act, notice of which will be set out in the Scheme Document, for the purpose of considering and, if thought fit, approving the Scheme, including any adjournment thereof
|
|
"Court Orders"
|
|
the Scheme Court Order and the Reduction Court Order |
|
"Cox & Kings" |
|
Cox & Kings Ltd. and/or, where the context so requires, Bidco, the wholly-owned subsidiary of Cox & Kings which will make the Acquisition
|
|
"Cox & Kings Group" |
|
Cox & Kings and its subsidiaries and subsidiary undertakings
|
|
"Effective Date" |
|
the date on which the Scheme becomes effective in accordance with its terms
|
|
"FSA" |
|
the UK Financial Services Authority
|
|
"General Meeting"
|
|
the general meeting of Holidaybreak to be convened in connection with the Scheme and the Reduction of Capital, notice of which will be set out in the Scheme Document, including any adjournment thereof
|
|
"Holidaybreak" |
|
Holidaybreak plc, a company registered in England and Wales with registered number 2305562
|
|
"Holidaybreak Directors" |
|
the directors of Holidaybreak as at the Announcement Date
|
|
"Holidaybreak Group" |
|
Holidaybreak and its subsidiaries and subsidiary undertakings
|
|
"Holidaybreak Share Schemes" |
|
Holidaybreak's employee share schemes consisting of:
(i) the Holidaybreak 1996 Unapproved Share Option Scheme;
(ii) the Holidaybreak 2001 Company Share Option Plan;
(iii) the Holidaybreak 2001 Sharesave Scheme;
(iv) the Holidaybreak 2006 Long Term Incentive Plan;
(v) the Holidaybreak 2011 Sharesave Scheme; and
(vi) the Share Award Agreement with Neil Bright
|
|
"Holidaybreak Shares" |
|
the ordinary shares of 5 pence each in the capital of Holidaybreak
|
|
"Holidaybreak Shareholders" |
|
the registered holders of Holidaybreak Shares from time to time |
|
|
|
|
|
"Implementation Agreement" |
|
the agreement between Cox & Kings and Holidaybreak entered into on 27 July 2011 containing certain obligations and commitments in relation to the implementation of the Acquisition
|
|
"Independent Competing Offer Announcement" |
|
an announcement of a firm intention to make an offer comprising a Competing Proposal pursuant to Rule 2.5 of the City Code |
|
"Listing Rules"
|
|
the rules and regulations made by the FSA in its capacity as the UK Listing Authority under the Financial Services and Markets Act 2000, and contained in the UK Listing Authority's publication of the same name
|
|
"London Stock Exchange"
|
|
London Stock Exchange plc |
|
"National Stock Exchange" |
|
National Stock Exchange of India Limited
|
|
"Nomura" |
|
Nomura International Plc
|
|
"Offer Period" |
|
the period commencing on and including 25 July 2011 (the date of an announcement by Holidaybreak that it was in discussions with a third party that may lead to an offer for Holidaybreak) and ending on the earlier of the Effective Date and the date on which the Scheme lapses or is withdrawn (or such other date as the City Code may provide or the Panel may decide)
|
|
"Official List" |
|
the official list maintained by the UK Listing Authority
|
|
"Panel" |
|
the Panel on Takeovers and Mergers
|
|
"Peel Hunt" |
|
Peel Hunt LLP
|
|
"Reduction Court Hearing" |
|
the hearing by the Court of the application to confirm the Reduction of Capital |
|
"Reduction Court Order" |
|
the order of the Court confirming the Reduction of Capital
|
|
"Reduction of Capital"
|
|
the reduction of Holidaybreak's share capital under Chapter 10 of Part 17 of the Companies Act, to be effected as part of the Scheme
|
|
"Registrar of Companies"
|
|
the Registrar of Companies in England and Wales |
|
"Regulatory Information Service"
|
|
any of the services set out in Appendix III to the Listing Rules |
|
"Scheme" |
|
the scheme of arrangement proposed to be made under Part 26 of the Companies Act between Holidaybreak and the Scheme Shareholders, with or subject to any modification, addition or condition approved or imposed by the Court and agreed by Holidaybreak and Cox & Kings
|
|
"Scheme Court Order" |
|
the order of the Court sanctioning the Scheme under Part 26 of the Companies Act
|
|
"Scheme Document" |
|
the document to be despatched to Holidaybreak Shareholders following the Announcement Date containing, among other things, the terms and conditions of the Scheme and the notices of the Court Meeting and the General Meeting
|
|
"Scheme Record Time" |
|
6:00 p.m. (London time) on the business day immediately prior to the Reduction Court Hearing
|
|
"Scheme Shareholders" |
|
the holders of Scheme Shares
|
|
"Scheme Shares" |
|
all Holidaybreak Shares which are:
(i) in issue at the date of the Scheme Document;
(ii) (if any) issued after the date of the Scheme Document and before the Voting Record Time; and
(iii) (if any) issued at or after the Voting Record Time and before the Scheme Record Time either on terms that the original or any subsequent holders thereof shall be bound by the Scheme and/or in respect of which the holders thereof have agreed in writing to be bound by the Scheme,
but in each case excluding (i) any Holidaybreak Shares beneficially owned by any member of the Cox & Kings Group and (ii) any Holidaybreak Shares held by the Trustees at the Scheme Record Time which are required to satisfy any options outstanding at the Scheme Record Time under the Holidaybreak Share Schemes
|
|
"Special Resolution" |
|
the special resolution to approve, among other things, the cancellation of the Scheme Shares, the alteration of Holidaybreak's articles of association and such other matters as may be necessary to implement the Scheme and the delisting of Holidaybreak Shares
|
|
"Statement of Capital" |
|
the statement of capital (approved by the Court) showing with respect to Holidaybreak's share capital, as altered by the Reduction Court Order, the information required by section 649 of the Companies Act
|
|
"takeover offer" |
|
has the meaning given in Part 28 of the Companies Act
|
|
"Trustees" |
|
Halifax EES Trustees International Limited and Holidaybreak Trustee Limited |
|
"UK" or "United Kingdom" |
|
the United Kingdom of Great Britain and Northern Ireland
|
|
"UK Listing Authority"
|
|
the FSA acting in its capacity as the competent authority for listing under the Financial Services and Markets Act 2000
|
|
"United States" or "US" |
|
the United States of America, its territories and possessions, any state of the United States and the District of Columbia
|
|
"US Exchange Act" |
|
the United States Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder |
|
|
|
|
|
"US Holders" |
|
the holders of Holidaybreak Shares who are resident in the United States
|
|
"Voting Record Time"
|
|
the time and date specified in the Scheme Document by reference to which entitlement to vote on the Scheme will be determined
|
|
"Wider Cox & Kings Group" |
|
Cox & Kings and its subsidiary undertakings, associated undertakings and any other undertakings in which Cox & Kings and such undertakings (aggregating their interests) have a substantial interest
|
|
"Wider Holidaybreak Group" |
|
Holidaybreak and its subsidiary undertakings, associated undertakings and any other undertakings in which Holidaybreak and such undertakings (aggregating their interests) have a substantial interest |
|
|
|
|
For the purposes of this announcement, "subsidiary", "subsidiary undertaking", "associated undertaking" and "undertaking" have the meanings given by the Companies Act and "substantial interest" means a direct or indirect interest in 20 per cent. or more of the equity capital of an undertaking.
This information is provided by RNS
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