Offer by OM Group-Pt.1
London Stock Exchange
29 August 2000
PART 1 OF 5
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO AUSTRALIA, CANADA,
JAPAN OR THE UNITED STATES
OM GROUP
--------
OFFER FOR LONDON STOCK EXCHANGE PLC
-----------------------------------
* OM announces the terms of an Offer for LSE
* The Directors of OM believe that:
* the success of stock exchanges in the future will be
determined by their operational efficiency, brand
strength, technological superiority and their ability to
provide systems dependability at the lowest trading costs
for customers
* the European exchange that performs best on these criteria
will win increasing trading volume, generating the deepest
pool of liquidity for investors. Other exchanges will
lose trading volume to the best performer
* London is the best centre to focus the European
equity market. It is already the major centre for equity
liquidity in Europe. A single London-based regulatory
environment is the ideal way to provide clarity and
credibility for the European equity market
* the proposed iX merger is founded on an outdated concept
of merging two nationally based operations with limited
regard to the technological and commercial changes in
global equity markets
* The aim of OM's Offer is to secure LSE's position as the leading
European exchange for investors and intermediaries world-wide by
offering integrated and cost-efficient solutions
* By bringing together two complementary companies, LSE with its
liquid market and recognised brand, and OM with its cutting-edge
technology and commercial drive, the Offer will provide LSE with key
elements needed for growth
* OM believes that strengthening the technological and commercial base
of LSE's markets and trading platforms will give it a competitive
advantage, ahead of traditional national exchanges, to exploit
global equity market opportunities
* OM is an international technology company with a market
capitalisation of approximately GBP2.6 billion that develops and
provides transaction technology to customers world-wide. It owns
and operates a number of exchanges and clearing houses. OM founded
and operated the first for-profit, privately owned electronic
derivatives exchange in 1985
* Over the last 15 years, OM has become the partner of choice and a
world leading provider of integrated exchange technology to 20
international exchanges and clearing houses
* OM also develops and provides technology solutions to leading banks
and brokers in more than 20 countries
* OM will offer LSE Shareholders 0.65 new OM Shares and GBP7.00 in
cash for each share held, valuing each LSE Share at GBP27.19, a 15.7
per cent. premium to the closing price on 25 August 2000, and LSE at
approximately GBP808 million
* A Loan Note Alternative will be available to LSE Shareholders to
give them, where eligible, the flexibility to defer capital gains
tax liability on the cash element of their consideration
* OM intends to seek a secondary listing on the London Stock Exchange
following the completion of the Offer
* OM expects that the transaction will be earnings enhancing (before
amortisation of goodwill) in the first full year following
completion of the Offer(*)
* OM believes that the New Group could achieve yearly pre-tax cost
savings rising to more than GBP30 million within four years
* More importantly, OM believes there will be significant potential
for enhancement of income from trading service-related activities
* OM strongly believes that its Offer for LSE will benefit both LSE
Shareholders and LSE customers by:
* offering full value to LSE Shareholders
* securing LSE's position as the pre-eminent
European secondary market for trading in both high growth
and blue chip companies within a single market framework
* reinforcing the retail market by making equity
trading more accessible
* strengthening LSE as the preferred market for initial
public offerings in Europe
* providing LSE with OM's state-of-the-art transaction
technology, to equip LSE with sufficient transaction
capacity to meet comfortably the expected substantial
growth in transaction volumes
* targeting vertical efficiency between exchange, clearing
and settlement functions
* providing clarity and simplicity by avoiding regulatory
compromise: the FSA will remain the sole regulatory
authority for LSE
* capitalising on LSE as an authoritative source of market
information and developing new and profitable value-added
information services
* adding further sources of revenue from developing e-
commerce businesses
* The New Group will have the financial resources to exploit OM's
capabilities to transform LSE into a fully commercial organisation
that will deliver value to both its customers and its shareholders
OM met LSE's management and advisors last week with a view to securing the
recommendation of the Board of LSE for its proposal. Although this initial
approach was rejected by LSE, OM urges the Board to consider the commercial
and technological advantages of a combination with OM.
Commenting on the Offer, Per E. Larsson, President and Chief Executive Officer
of OM, said:
'OM believes that the Offer will deliver full value to LSE Shareholders and
will provide significant improvements in trading efficiency for LSE's
customers.
OM's experience as a leading provider of technology and in operating for-
profit exchanges puts it in a unique position to achieve this transformation
for the benefit of both LSE Shareholders and LSE's customers.'
Olof Stenhammar, Chairman and founder of OM, said:
'This is a substantial offer for LSE from OM, the world leader in technology
solutions for trading exchanges and the first listed company to own a major
European stock exchange. We believe that the proposed iX merger squanders the
potential of LSE and that with our proven management skills and leading
technology we can secure LSE's position as the pre-eminent European stock
exchange'.
The Offer will be conditional, inter alia, on changes being made to the
Articles of Association of LSE to remove the restrictions on holdings in
excess of 4.9 per cent. of LSE's issued share capital, approval by OM's
shareholders of the issue of the new OM Shares and clearance from the UK and
Swedish competition authorities on terms acceptable to OM.
(*) This should not be construed as a profit forecast or be interpreted to
mean that the future earnings per share of OM will necessarily match or exceed
the earnings per share for completed financial periods.
No offer or invitation to acquire or exchange securities in LSE is being made
now. Any such offer or invitation will only be made in documents to be
published in due course and any such exchange should be made solely on the
basis of information contained in such documents.
The Offer will not be made, directly or indirectly, in or into or by the use
of the mail or any means or instrumentality of interstate or foreign commerce
of, or any facilities of a national securities exchange of the United States
nor is it being made in Canada, Japan or Australia. Neither the new OM Shares
nor the Loan Notes will be registered under the United States Securities Act
of 1933 (as amended). Further details in relation to overseas shareholders
will be contained in the formal documents containing the Offer.
Application will be made to the Stockholm Stock Exchange for the new OM Shares
to be admitted to the A List. Details of settlement and dealing will be
included in the offer document.
This summary should be read in conjunction with the full text of the attached
announcement including the Appendices.
ENQUIRIES
---------
OM GROUP
Olof Stenhammar, Chairman On 29 August 2000: +44 (0)7979 703282
Thereafter: +46 (0)8 405 6641
Per E. Larsson, President & On 29 August 2000: +44 (0)7785 701231
Chief Executive Officer Thereafter: +46 (0)8 405 6609
Magnus Karlsson Bocker, On 29 August 2000: +44 (0)7979 703282
Executive Vice President Thereafter: +46 (0)8 405 6641
Jakob Hakanson, Investor Relations +46 (0)8 405 6042
Anna Eriksson, Corporate Communications +46 (0)8 405 6612
LAZARD +44 (0)20 7588 2721
David Verey
Jonathan Dawson
Svante Adde +46 (0)8 442 5400
HILL & KNOWLTON
Anthony Payne +44 (0)20 7973 4489
+44 (0)7785 701231
Lazard, which is regulated in the UK by The Securities and Futures Authority
Limited, is acting for OM and no-one else in connection with the Offer and
will not be responsible to anyone other than OM for providing the protections
afforded to customers of Lazard or for giving advice in relation to the Offer.
MORE TO FOLLOW
Latest directors dealings
- 1 hour ago Savannah Energy
- 2 hours ago Buccaneer Energy PLC
- 2 hours ago Savannah Energy
- 3 hours ago Carclo
- 3 hours ago Schroder Japan Growth Fund