RNS Number:9569Y
Nippon Sheet Glass Company Limited
27 February 2006
Not for release, publication or distribution in or into Australia or New Zealand
27 February 2006
Nippon Sheet Glass Co., Ltd.
Recommended cash acquisition
of Pilkington plc
Highlights
* Recommended cash acquisition at 165 pence for each Pilkington Share
* Values Pilkington's issued share capital at #2.2 billion
* Strategically compelling combination to create global glass leader with
combined sales of approximately #3.7 billion
Summary
The boards of NSG and Pilkington are pleased to announce today that they have
reached agreement on the terms of a recommended cash acquisition by NSG of
Pilkington, to be effected by way of a scheme of arrangement under section 425
of the Companies Act.
* Under the terms of the Scheme, Pilkington Shareholders will be entitled
to receive 165 pence in cash for each Pilkington Share held. The terms of
the Acquisition value the entire existing issued and to be issued share
capital of Pilkington at approximately #2.2 billion (net of options
proceeds), and the cash consideration payable for the entire issued and to
be issued share capital of Pilkington not already owned by the NSG Group at
approximately #1.8 billion.
* The consideration of 165 pence in cash for each Pilkington Share
represents:
- a premium of approximately 30 per cent. to the closing price of
126.8 pence per Pilkington Share on 28 October 2005, being the last
business day before the announcement by Pilkington that it had
received a preliminary approach regarding a possible offer;
- a premium of approximately 39 per cent. to the average closing
price for the period of 12 months ended 28 October 2005 of
approximately 118.5 pence per Pilkington Share; and
- a multiple of approximately 18.1 times Pilkington's reported diluted
earnings per share for the 12 months to 31 March 2005 (as restated
under IFRS) of 9.1 pence.
* A Loan Note Alternative will also be made available to Pilkington
Shareholders (other than to certain overseas shareholders).
* Upon completion of the Acquisition, NSG intends to nominate Stuart
Chambers, Pilkington's Group Chief Executive, for appointment to the
Board of NSG. NSG expects that the executive directors of Pilkington
(Stuart Chambers, Iain Lough, Finance Director and Pat Zito, Head of
Automotive), along with the rest of Pilkington's senior management team,
will remain with the combined group and that Stuart Chambers will lead
the integration process for the combined glass activities.
* As at the date of this announcement, the NSG Group owns 260,176,633
Pilkington Shares, representing approximately 19.7 per cent. of
Pilkington's issued share capital.
* The directors of Pilkington, who have been so advised by Citigroup,
consider the terms of the Acquisition to be fair and reasonable. In
providing advice to the directors of Pilkington, Citigroup has taken
into account the commercial assessments of Pilkington's directors.
Accordingly, the directors of Pilkington intend unanimously to recommend
to Pilkington Shareholders to vote in favour of the resolutions to be
proposed at the Court Meeting and the Extraordinary General Meeting, as
they have undertaken to do in respect of their own beneficial holdings
of 6,366,884 Pilkington Shares (representing, in aggregate,
approximately 0.5 per cent of the Pilkington Shares currently in issue).
* The Scheme will be put to Pilkington Shareholders at the Court Meeting
and at the Extraordinary General Meeting, which will be convened in due
course. It is expected that the Scheme Document will be posted to
Pilkington Shareholders by the end of March 2006 and that, subject to
the satisfaction of the Conditions, the Scheme will become effective by
the end of June 2006.
Commenting on the Acquisition, Yozo Izuhara, Chairman and CEO of NSG, said:
"We are delighted that we have reached an agreement which the Pilkington Board
unanimously intends to recommend to its shareholders. This is a transformational
deal for the glass industry and one that creates real value and prudently
manages risk for our shareholders.
The combination of NSG and Pilkington will create a single global player with
market leading positions across both developed and emerging markets. Our
historical relationship and cultural fit will allow us to work closely with the
management and employees of Pilkington to realise the considerable potential
that exists to grow our combined business and to serve our global customers even
better."
Commenting on the Acquisition, Sir Nigel Rudd, Chairman of Pilkington, said:
"I am proud to have been chairman of Pilkington for more than ten years during
which we significantly improved profitability and cash flow whilst repositioning
it in growth markets. I am pleased to say that NSG's offer of 165 pence per
share is an excellent offer which enables our shareholders to realise the value
of their investment in Pilkington. I am also convinced that the combination with
NSG will ensure that Pilkington will continue to be a leading international
force at the forefront of the glass industry."
Commenting on the Acquisition, Stuart Chambers, Group Chief Executive of
Pilkington, said:
"Over the past nine years Pilkington has significantly improved its cost
structure to become leaner and more profitable. Recently Pilkington has moved to
the third stage of its strategy, focusing on investments in the growing emerging
markets of Russia, China, India and the Middle East. The combination with NSG
will expand our geographic reach and enhance Pilkington's position as a global
"World Class" glass manufacturer."
Lazard and UBS Investment Bank are acting as joint financial advisers to NSG and
NSG UK. Citigroup is acting as sole investment banking and Rule 3 adviser and
joint financial adviser to Pilkington. JPMorgan Cazenove is acting as joint
financial adviser and sole broker to Pilkington.
This summary should be read in conjunction with the full text of the following
announcement and the Appendices.
Enquiries:
Nippon Sheet Glass Co., Ltd. +81 (0)3 5443 9505
Tomoaki Abe
Masakuni Nitta
Lazard (joint financial adviser to NSG and NSG UK) 020 7187 2000
William Rucker
Richard Shaw
UBS Investment Bank (joint financial adviser to NSG and NSG UK) 020 7567 8000
Liam Beere
Benjamin Lee
Brunswick Group LLP (PR adviser to NSG) 020 7404 5959
Jonathan Glass
Justine McIlroy
Pilkington plc
Iain Lough 01744 692 244
David Roycroft 020 7747 6000
Citigroup (sole investment banking and Rule 3 adviser and
joint financial adviser to Pilkington) 020 7986 4000
Robert Swannell
Iain Robertson
Jonathan Steers
JPMorgan Cazenove (joint financial adviser and sole broker to
Pilkington) 020 7588 2828
Edmund Byers
Steve Baldwin
Finsbury (PR adviser to Pilkington) 020 7251 3801
Rupert Younger
Robin Walker
The bases and sources of certain financial information contained in this summary
and the following announcement are set out in Appendix 2.
Certain definitions and terms used in this summary and the following
announcement are set out in Appendix 3.
Lazard, which is authorised and regulated in the United Kingdom by the Financial
Services Authority, is acting exclusively for NSG and NSG UK and no one else in
connection with the Acquisition and will not be responsible to anyone other than
NSG and NSG UK for providing the protections afforded to the clients of Lazard
nor for providing advice in relation to the Acquisition.
UBS is acting exclusively for NSG and NSG UK and no one else in connection with
the Acquisition and will not be responsible to anyone other than NSG and NSG UK
for providing the protections afforded to the clients of UBS nor for providing
advice in relation to the Acquisition.
Citigroup and JPMorgan Cazenove, which are authorised and regulated in the
United Kingdom by the Financial Services Authority, are acting exclusively for
Pilkington in connection with the Acquisition and will not be responsible to
anyone other than Pilkington for providing the protections afforded to their
respective clients nor for providing advice in relation to the Acquisition.
The distribution of this announcement in jurisdictions other than the United
Kingdom may be restricted by law and therefore any persons who are subject to
the laws of any jurisdiction other than the United Kingdom should inform
themselves about, and observe, any applicable requirements. This announcement
has been prepared for the purposes 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 of England.
The Loan Notes to be issued in connection with the Acquisition have not been,
and will not be, registered under the United States Securities Act of 1933 (as
amended) or under the applicable securities laws of any state, district or other
jurisdiction of the United States or of Australia, Germany, Italy, Malaysia or
New Zealand and no regulatory clearances in respect of the Loan Notes have been,
or will be, applied for in any jurisdiction. Accordingly, unless an exemption
under the United States Securities Act of 1933 (as amended) or other relevant
securities laws is applicable, the Loan Notes are not being, and may not be,
offered, sold, resold, delivered or distributed, directly or indirectly, in or
into the United States, Australia, Germany, Italy, Malaysia or New Zealand or
to, or for the account or benefit of, any Restricted Overseas Person.
Neither the United States Securities and Exchange Commission nor any state
securities commission has reviewed, approved or disapproved this announcement or
any of the proposals described in this announcement.
Neither this announcement nor any material relating to the Acquisition has been
submitted to the French Autorite des marches financiers. In France, together
with other jurisdictions, including Belgium and Germany, this announcement and
all other materials relating to the recommended Acquisition are only directed to
existing Pilkington Shareholders.
The contents of this announcement have not been reviewed by any regulatory
authority in Hong Kong. You are advised to exercise caution in relation to the
Acquisition. If you are in doubt about any of the contents of this announcement,
you should obtain independent professional advice.
This announcement, including information included or incorporated by reference
in this announcement, may contain "forward-looking statements" concerning NSG
and Pilkington. Generally, the words "will", "may", "should", "continue",
"believes", "expects", "intends", "anticipates" or similar expressions identify
forward-looking statements. The forward-looking statements involve risks and
uncertainties that could cause actual results to differ materially from those
expressed in the forward-looking statements. Many of these risks and
uncertainties relate to factors that are beyond the companies' abilities to
control or estimate precisely, such as future market conditions and the
behaviours of other market participants, and therefore undue reliance should not
be placed on such statements. The directors of NSG and Pilkington assume no
obligation and do not intend to update these forward-looking statements, except
as required pursuant to applicable law.
This announcement does not constitute an offer to sell or invitation to purchase
any securities or the solicitation of any vote or approval in any jurisdiction.
Pilkington Shareholders are advised to read carefully the formal documentation
in relation to the Scheme once it has been despatched.
Dealing Disclosure Requirements
Under the provisions of Rule 8.3 of the City Code, if any person is, or becomes,
"interested" (directly or indirectly) in 1 per cent. or more of any class of
"relevant securities" of Pilkington, all "dealings" in any "relevant securities"
of Pilkington (including by means of an option in respect of, or a derivative
referenced to, any such "relevant securities") must be publicly disclosed by no
later than 3.30 pm (London time) on the London business day following the date
of the relevant transaction. This requirement will continue until the Effective
Date or until the date on which the Scheme lapses or is otherwise withdrawn or
on which the "offer period" otherwise ends (or, if NSG elects to effect the
Acquisition by way of a takeover offer, until the date on which the offer
becomes, or is declared, unconditional as to acceptances, lapses or is otherwise
withdrawn or on which the "offer period" otherwise ends). If two or more persons
act together pursuant to an agreement or understanding, whether formal or
informal, to acquire an "interest" in "relevant securities" of Pilkington, they
will be deemed to be a single person for the purpose of Rule 8.3.
Under the provisions of Rule 8.1 of the City Code, all "dealings" in "relevant
securities" of Pilkington by NSG or Pilkington, or by any of their respective
"associates", must be disclosed by no later than 12.00 noon (London time) on the
London business day following the date of the relevant transaction.
A disclosure table, giving details of the companies in whose "relevant
securities" "dealings" should be disclosed, and the number of such securities in
issue, can be found on the Takeover Panel's website at
www.thetakeoverpanel.org.uk.
"Interests in securities" arise, in summary, when a person has long economic
exposure, whether conditional or absolute, to changes in the price of
securities. In particular, a person will be treated as having an "interest" by
virtue of the ownership or control of securities, or by virtue of any option in
respect of, or derivative referenced to, securities.
Terms in quotation marks are defined in the City Code, which can also be found
on the Panel's website. If you are in any doubt as to whether or not you are
required to disclose a "dealing" under Rule 8, you should consult the Panel.
Not for release, publication or distribution in or into Australia or New Zealand
27 February 2006
Nippon Sheet Glass Co., Ltd.
Recommended cash acquisition
of Pilkington plc
1. Introduction
The boards of NSG and Pilkington are pleased to announce today that they have
reached agreement on the terms of a recommended cash acquisition by NSG (through
its wholly-owned subsidiary NSG UK) of the entire issued and to be issued share
capital of Pilkington not already owned by the NSG Group. It is intended that
the Acquisition will be effected by way of a scheme of arrangement under section
425 of the Companies Act.
The terms of the Acquisition value the issued and to be issued share capital of
Pilkington at approximately #2.2 billion (net of options proceeds) and imply an
enterprise value for Pilkington of approximately #3.4 billion (including net
debt, retirement benefit obligations and minority interests of approximately
#1.2 billion as at 30 September 2005).
Lazard and UBS Investment Bank are acting as financial advisers to NSG and NSG
UK in relation to the Acquisition.
2. Summary of the Acquisition
Under the terms of the Scheme, which will be subject to the conditions and
further terms set out below and in Appendix 1 and the full terms and conditions
which will be set out in the Scheme Document, Pilkington Shareholders will
receive:
for each Pilkington Share 165 pence in cash
The terms of the Acquisition value the entire existing issued and to be issued
share capital of Pilkington at approximately #2.2 billion (net of options
proceeds) and the cash consideration payable for the entire issued and to be
issued share capital of Pilkington not already owned by the NSG Group at
approximately #1.8 billion.
The consideration of 165 pence for each Pilkington Share represents:
* a premium of approximately 30 per cent. to the closing price of 126.8
pence per Pilkington Share on 28 October 2005, being the last business day
before the announcement by Pilkington that it had received a preliminary
approach regarding a possible offer;
* a premium of approximately 39 per cent. to the average closing price for
the period of 12 months ended 28 October 2005 of approximately 118.5 pence
per Pilkington Share; and
* a multiple of approximately 18.1 times Pilkington's reported diluted
earnings per share for the 12 months to 31 March 2005 (as restated under
IFRS) of 9.1 pence.
The Pilkington Shares will be acquired pursuant to the Acquisition fully paid
and free from all liens, charges, equitable interests, encumbrances, rights of
pre-emption and any other rights and interests of any nature whatsoever and
together with all rights now and hereafter attaching thereto, including voting
rights and the right to receive and retain in full all dividends and other
distributions (if any) declared, made or paid on or after the date of this
announcement.
A Loan Note Alternative will be made available, further details of which are set
out in paragraph 6 below.
3. Recommendation
The directors of Pilkington, who have been so advised by Citigroup, consider the
terms of the Acquisition to be fair and reasonable. In providing advice to the
directors of Pilkington, Citigroup has taken into account the commercial
assessments of the Pilkington directors. Accordingly, the directors of
Pilkington intend unanimously to recommend to Pilkington Shareholders to vote in
favour of the resolutions to be proposed at the Court Meeting and the
Extraordinary General Meeting, as they have undertaken to do in respect of their
own beneficial holdings of 6,366,884 Pilkington Shares (representing, in
aggregate, approximately 0.5 per cent. of the Pilkington Shares currently in
issue).
4. Background to and reasons for the Acquisition
In 2000, NSG formulated a new long term growth strategy, setting out a plan to
transform the NSG Group into a truly global leader in the glass industry. For
many years, NSG has enjoyed a close relationship with Pilkington, through a
joint research, development and engineering (RD&E) agreement for automotive
products and processes and a joint marketing approach to Japanese vehicle
manufacturers. As part of its global strategy, NSG decided it was important to
make a direct investment in Pilkington and in 2000 acquired approximately ten
per cent. of the issued shares in Pilkington in exchange for minority interests
that NSG held in certain North American and UK subsidiaries of Pilkington. In
2001, NSG increased its stake by a further ten per cent. through the purchase of
shares in the market.
Over the past few years, NSG has benefited from its close relationship with
Pilkington. However, as Pilkington enters the growth phase of its strategy, NSG
believes that both groups will benefit significantly from being part of a
combined group in order to fully harness the potential within each organisation.
Through the acquisition of the issued share capital of Pilkington it does not
own, NSG is taking a major step towards delivering its long term strategy.
The proposed Acquisition will combine two technological leaders with an
established record of working together, driving innovation and quality by
focusing on frontline operations in both manufacturing and marketing.
NSG's and Pilkington's businesses are highly complementary and the combination
of their significant technological capabilities, global scale and presence in
markets and access to customers will allow the enlarged group to actively pursue
innovative product development and expansion opportunities and manufacturing
process improvement initiatives, enhancing the quality and competitiveness of
its product offering in the glass market worldwide. The combined group's strong
credentials in quality and services will enable differentiation in its core
Building Products and Automotive markets and better place it to service the
needs of its global customer base.
In Automotive, the combined group will become a truly global supplier to major
automotive customers, offering "best quality and cost" in all key regions,
through the integration of both groups' respective global service networks, a
crucial success factor for the future of the glass industry. The integration of
leading technologies in manufacturing, new product development and a full range
of customer services from model development processing to precise scheduling and
overall quality control, will result in the combined group being at the
forefront of future development in the market, in particular in its
relationships with the fast growing Japanese Automotive OEMs.
In Building Products, the combined group will become one of the leading players
in the flat glass market. As volumes expand, particularly in emerging markets,
the combined group will be able to use its global manufacturing facilities and
product development strengths to enable greater flexibility and efficiency,
whilst taking advantage of its technological know-how to support the penetration
of value-added glazing solutions in more mature western markets.
The geographical fit of the two Groups will provide a balance across developed
and emerging markets, allowing the combined group to take advantage of its
existing customer bases, technology and product development capability to become
a truly multinational company with in-depth client coverage in Japan, China,
South-east Asia, Russia, Western and Eastern Europe, North America, South
America and Australasia, as well as better positioning it to expand into other
emerging markets in the future. This global reach will offer the potential to
achieve economies of scale and cross sell new products, as well as making the
combined group more resilient to sector and geographical challenges.
Furthermore, the Acquisition creates the potential to realise significant
synergy benefits. Cost synergies are expected to be available in global
procurement and overlapping central services. Further synergies are expected
from standardising equipment design and leveraging research and development
output, product range and capabilities in manufacturing, marketing and
technology development. The focus will be on continuous improvement in cost,
quality and services through sharing of best practice, supporting both enhanced
top-line growth and margin improvement. NSG estimates that annual cost synergies
of at least Y4 billion (approximately #20 million) will be available within the
next 3 years with significant further long term cost and revenue synergies
achievable beyond then. NSG and Pilkington believe that their long-standing
relationship provides a sound base for a smooth integration process.
5. Background to and reasons for recommending the Acquisition
Since 1997, Pilkington has been implementing a well-defined three-stage strategy
to transform the Pilkington Group. The first stage concentrated on restructuring
and reducing costs, dramatically improving the efficiency of existing
operations. The second stage was to strengthen the Pilkington Group's financial
position by optimising net free cash from those operations and reducing debt.
The third stage, which consists of investing ongoing net cash flows in future
profitable growth, has begun to unfold, with opportunities for growth investment
identified in China, Russia, India and the Middle East. The strategy has been a
considerable success in transforming the productivity of the Pilkington Group,
restoring its financial strength and positioning the group to take advantage of
future growth opportunities.
Whilst the Pilkington Board believes that Stage 3 presents further opportunities
for Pilkington's business, the glass markets in which the Pilkington Group
operates remain challenging and have historically been subject to considerable
cyclicality. Against this background the cash offer from NSG provides certainty
to Pilkington Shareholders, at a level which the Pilkington Board believes
represents fair value for the business. The Pilkington Board, having taken
appropriate advice, therefore unanimously intends to recommend to Pilkington
Shareholders to vote in favour of the Scheme as being in the best interests of
Pilkington Shareholders as a whole.
6. The Loan Note Alternative
Pilkington Shareholders (other than certain overseas shareholders) will be
entitled to elect, as an alternative to all or part of the cash consideration to
which they would otherwise be entitled under the Scheme, to receive Loan Notes
issued by NSG UK on the following basis:
for each #1 of cash consideration #1 nominal value of Loan Notes
The Loan Notes, which will be governed by English law, will be guaranteed as to
the payment of principal and interest by NSG but will otherwise be unsecured.
The Loan Notes will bear interest from the date of issue payable to the relevant
holder of Loan Notes every six months in arrear (less any tax required by law to
be deducted or withheld therefrom) on 30 June and 31 December in each year (or,
if not a business day, on the first business day thereafter), at a rate per
annum calculated to be one per cent below six month LIBOR as determined on the
first business day of each such interest period. The first interest payment will
fall due on 31 December 2006 and will be in respect of the period from (and
including) the date of issue of the relevant Loan Note to (but excluding) 31
December 2006.
The Loan Notes will be redeemable at par (together with accrued interest) at the
option of the holders, in whole or in part, on interest payment dates commencing
on 31 December 2006 (or, if later, the first month end that is at least 6 months
after the date of issue of the Loan Notes). Any Loan Notes outstanding on 30
June 2011 will be redeemed at par (together with any accrued interest) on that
date (or, if not a business day, on the first business day thereafter). If,
after 31 December 2006 (or, if later, the first month end that is at least six
months after the date of issue of the Loan Notes) 75 per cent. of the Loan Notes
issued have been repaid, purchased or cancelled, NSG UK may elect to redeem all
of the Loan Notes then outstanding. No application will be made for the Loan
Notes to be listed or dealt in on any stock exchange and they will be freely
transferable.
The Loan Notes will be issued, credited as fully paid, in integral multiples of
#1 nominal value. Fractional entitlements to Loan Notes will be disregarded.
NSG UK reserves the right not to issue any Loan Notes if valid elections are
received for an aggregate of less than #10,000,000 in nominal value of Loan
Notes. If insufficient elections are received, Pilkington Shareholders who
elected to receive Loan Notes will instead receive cash consideration in
accordance with the terms of the Acquisition.
The Loan Note Alternative will be conditional on the Scheme becoming effective.
The Loan Notes will not be offered in the United States, Australia, Germany,
Italy, Malaysia or New Zealand or to Restricted Overseas Persons.
Upon NSG UK drawing funds under its financing arrangements to be applied towards
satisfying the cash consideration payable to Pilkington Shareholders in respect
of the Acquisition, NSG UK will be required by these arrangements to also draw a
loan in an amount equal to the cash consideration which would otherwise have
been payable to those Pilkington Shareholders who have elected for the Loan Note
Alternative. The proceeds of this loan are required by NSG UK's financing
arrangements to be paid into a separate bank account and NSG UK has covenanted
to its lenders that it may only withdraw amounts from that bank account for the
purpose of paying amounts due to the holders of the Loan Notes in accordance
with their terms.
Further details of the Loan Notes and the Loan Note Alternative will be
contained in the Scheme Document.
7. Information relating to NSG and NSG UK
NSG UK is a newly incorporated company that has been formed for the purposes of
implementing the Scheme. NSG UK is a wholly-owned, indirect subsidiary of NSG.
NSG is a leading international glass manufacturer, listed on the Tokyo Stock
Exchange with a market capitalisation of approximately Y215 billion
(approximately #1.0 billion). For the financial year ended 31 March 2005, NSG
generated revenues of Y265 billion (approximately #1.3 billion) and income
before tax and minority interests of Y11 billion (approximately #54 million),
and as at 31 March 2005 had shareholders' equity of Y205 billion (approximately
#1.0 billion).
NSG's activities are organised into the following divisions:
* Flat and Safety Glass and Building Material Business (65 per cent. of
net 2005 revenues): the building products and automotive glass businesses
within this division constitute NSG's traditional business and include flat
glass, glass in the forms of float, double-glazing glass, wireless fire
prevention glass and other types of reinforced glass;
* Information / Electronics Materials and Devices (17 per cent. of net
2005 revenues): this division supplies key components to the information and
telecommunications device industries, based on its proprietary lens
technology as well as glass substrates for flat panel displays;
* Glass Fiber business (14 per cent. of net 2005 revenues): this division
includes the manufacture of core reinforcement media with enhanced adhesion
to rubber, glass-based glittering filler, battery material for the
communication industry and air filters for clean, comfortable environments;
and
* Others (4 per cent. of net 2005 revenues): this includes the manufacture
and supply of fire-resistant insulation materials and engineering service
businesses.
NSG has a diverse "blue chip" customer base across the construction, automotive
and electronics industries, primarily in Japan and East Asia, and also has a
presence in Europe and North America through joint ventures and strategic
alliances.
8. Information relating to Pilkington
Pilkington is one of the world's largest manufacturers of glass and glazing
products for the building and automotive markets, with annual revenues of #2.4
billion and manufacturing operations in 24 countries on five continents and
sales in 130 countries. Pilkington's float glass manufacturing base consists of
37 float glass lines, 27 of which are operated by Pilkington and 10 of which are
operated by partners or associates. This represents approximately 19 per cent.
of the world's high quality float capacity.
Pilkington's operations centre on Building Products, supplying original
equipment and refurbishment glass for the global construction industry, and
Automotive Products, supplying glass and glazing systems to the original
equipment (OE) and automotive glass replacement (AGR) markets.
* Building Products (49 per cent. of 2005 revenues): the Building Products
division has float glass manufacturing or processing operations in 20
countries with the largest operations located in Europe. The business
encompasses Pilkington's activity in manufacturing float glass and other
processed building products. Pilkington makes products to help control
energy usage, to protect against fire, to insulate against noise, to provide
safety and security and to afford decoration and privacy, to self cleanse
and to build glass facades. Pilkington employs large scale coating,
laminating and silvering processes to make these products.
* Automotive (47 per cent. of 2005 revenues): Pilkington makes a wide
range of automotive glazings for new vehicles and for replacement markets,
offering full systems capability to customers from initial design to final
product. Pilkington's products include solar control glass for passenger
comfort, glass heating systems to control condensation and icing, security
glazing and glazing systems. Pilkington operates automotive glass facilities
in Europe, the North America Free Trade Area, South America, Australia and
China (39 locations in total, in 16 different countries). Pilkington's own
global presence is further enhanced by its associate companies. As well as
its major OE facilities within each region, Pilkington operates additional
capacity focused on production for the aftermarket and has developed
extensive AGR distribution and wholesaling networks.
* Other (4 per cent. of 2005 Group revenues): this includes Pilkington's
Engineering operation, involved in the building and supply of float glass
lines and automotive glass processing facilities to Pilkington and other
third parties, and the Technology Management division, responsible for the
licensing of Pilkington's technological developments to third parties.
For the financial year ended 31 March 2005 (as restated under IFRS), Pilkington
generated revenues of #2.4 billion and operating profit of #219 million, and as
at 31 March 2005 had net assets of #753 million. In the six months to 30
September 2005 (as reported under IFRS), Pilkington generated revenues of #1.3
billion and operating profit of #129 million, and as at 30 September 2005 had
net assets of #877 million.
9. Management and employees of Pilkington
NSG recognises the strong contribution made by Pilkington's management and
employees to the development of the Pilkington Group and views them as being
critical to the success of the combined group going forward.
The board of NSG has given the Pilkington Board assurances that, following the
Scheme becoming effective, the existing employment rights, including pension
rights, of all management and employees of the Pilkington Group will be fully
safeguarded.
NSG, Pilkington and the Trustee of the Pilkington Superannuation Scheme (having
regard to the interests of active, deferred and retired members) have reached an
understanding in respect of Pilkington's obligations in relation to the
Pilkington Superannuation Scheme following completion of the Acquisition.
NSG expects that the executive directors of Pilkington (Stuart Chambers, Group
Chief Executive, Iain Lough, Finance Director and Pat Zito, Head of Automotive),
along with the rest of Pilkington's senior management team, will remain with the
combined group and that Stuart Chambers will lead the integration process for
the combined glass activities. Stuart Chambers is also expected, conditional on
the Scheme becoming effective and approval by the shareholders of NSG, to become
a director of NSG. NSG plans to work with Pilkington management to further
develop the combined business and work proactively to ensure a smooth and rapid
integration of the two companies.
10. Pilkington Share Schemes
Participants in the Pilkington Share Schemes will be contacted separately
regarding the effect of the Acquisition on their rights and appropriate
proposals will be made to them in due course.
11. Financing
The consideration payable to Pilkington Shareholders under the terms of the
Scheme will be in cash and provided through a combination of NSG's existing
internal resources, new committed credit facilities and committed equity
financing. NSG has obtained two committed debt financings, one arranged by UBS
and Sumitomo Mitsui Banking Corporation in London for European loan financing
provided to NSG UK in the sum of #1.55 billion (approximately Y318 billion) and
the other arranged by Sumitomo Mitsui Banking Corporation in Japan for Japanese
loan financing provided to NSG in the sum of Y45 billion (approximately #220
million). In addition, NSG has obtained committed equity financing by way of
unsecured convertible bonds with stock acquisition rights (SPS) provided by
Daiwa Securities SMBC and an affiliate of UBS in Japan amounting to
approximately Y110 billion (approximately #537 million). NSG will also use
existing internal resources (comprising cash balances and liquid securities
available for sale) amounting to approximately Y90 billion (approximately #440
million).
The Acquisition and its financing do not require NSG shareholder approval.
Lazard and UBS, joint financial advisers to NSG, are satisfied that sufficient
resources are available to satisfy in full the cash consideration payable to
Pilkington Shareholders under the terms of the Acquisition.
Further information on the financing of the Acquisition will be set out in the
Scheme Document.
12. Scheme of arrangement
It is intended that the Acquisition will be effected by means of a scheme of
arrangement between Pilkington and its shareholders under section 425 of the
Companies Act (although NSG reserves the right to elect to effect the
Acquisition by way of an Offer). The procedure involves an application by
Pilkington to the Court to sanction the Scheme and confirm the cancellation (or,
where applicable, transfer) of all the existing Pilkington Shares, in
consideration for which Pilkington Shareholders will receive cash (or Loan
Notes) as described above.
To become effective, the Scheme requires, amongst other things, the approval of
a majority in number representing 75 per cent. or more in value of the relevant
Pilkington Shareholders present and voting in person or by proxy at the Court
Meeting and the passing of the resolutions necessary to implement the Scheme at
the Extraordinary General Meeting, as well as the sanction of the Court.
It is expected that the Scheme Document will be posted to Pilkington
Shareholders by the end of March 2006 and that, subject to the satisfaction of
the Conditions, the Scheme will become effective by the end of June 2006.
13. Implementation agreement, inducement fee and directors'
undertakings
NSG, NSG UK and Pilkington have entered into an implementation agreement which
provides, amongst other things, for the implementation of the Scheme (or, if
applicable, the Offer) and contains certain assurances and confirmations between
the parties, including to implement the Scheme as soon as reasonably
practicable.
Pilkington has agreed to pay NSG an inducement fee of #17.49 million if:
* a third party proposal involving the acquisition of shares in Pilkington
carrying over 50 per cent. of the voting rights, or the acquisition of the
whole or substantially the whole of the business or assets of the Pilkington
Group, is announced prior to the Scheme (or, if applicable, the Offer)
lapsing or being withdrawn or any condition to the Scheme being or becoming
incapable of satisfaction, and any such proposal involving the third party
is completed within 18 months of such announcement; or
* the directors of Pilkington withdraw their recommendation in respect of
the Scheme (or if applicable, the Offer) at a time when they are considering
a competing proposal from a third party and, within three months of such
withdrawal, the directors of Pilkington recommend that competing proposal.
Citigroup considers the inducement fee and the circumstances in which it may
become payable to be in the best interests of Pilkington and Pilkington
Shareholders.
The implementation agreement shall, save in respect of any accrued rights
thereunder and the inducement fee provisions, terminate in certain
circumstances, including:
* if the Pilkington Shareholders do not approve the Scheme at the Court
Meeting or do not pass the relevant resolutions at the EGM, or the Court does
not sanction the Scheme (in each case, unless NSG has previously elected to
effect the Acquisition by way of an Offer);
* if any of the Conditions is (or becomes) incapable of satisfaction; or
* if the directors of Pilkington withdraw their recommendation having
determined (acting in good faith and having taken legal and financial advice to
that effect) that such recommendation should be withdrawn in order to comply
with their fiduciary duties as directors of Pilkington.
The undertakings given by directors of Pilkington in respect of their beneficial
holdings of Pilkington Shares will lapse if (a) the Scheme (or, if applicable,
the Offer) lapses or is withdrawn or does not become effective or unconditional
in all respects, as the case may be, by no later than 26 August 2006, (b) the
directors of Pilkington withdraw their recommendation in accordance with the
implementation agreement or (c) NSG or NSG UK breach any of their material
obligations under the implementation agreement which breach, if capable of
remedy, shall not have been remedied to Pilkington's satisfaction within seven
days of such breach.
14. Disclosure of interests in Pilkington
As at the close of business on 24 February 2006, being the latest practicable
date prior to the date of this announcement, the following members of the NSG
Group owned or controlled the following Pilkington Shares:
Name: Number of Pilkington Shares:
NSG Holding (Europe) Limited 132,016,484
NSG Holding USA, Inc. 122,917,252
Nippon Sheet Glass Co., Ltd. 5,242,897
As at 24 February 2006, the latest practicable date prior to the date of this
announcement and save as described above, neither NSG or NSG UK nor any of the
directors of NSG or NSG UK, nor, so far as NSG and NSG UK are aware, any person
acting in concert with NSG or NSG UK for the purposes of the Acquisition, owns,
controls or holds any Pilkington Shares or any securities convertible or
exchangeable into or rights to subscribe for or purchase, or holds any options
to purchase, any Pilkington Shares or has entered into any derivative referenced
to Pilkington Shares which remains outstanding.
15. Delisting and re-registration
It is intended that the London Stock Exchange and the United Kingdom Listing
Authority will be requested respectively to cancel trading in Pilkington Shares
on the London Stock Exchange's market for listed securities and to remove the
listing of the Pilkington Shares from the Official List, in each case on the
Effective Date. As soon as possible after the Effective Date, it is intended
that Pilkington be re-registered as a private limited company.
16. General
The Acquisition will be subject to the conditions and further terms set out
herein and in Appendix I, and to the full terms and conditions which will be set
out in the Scheme Document. The Scheme Document will include full details of the
Scheme, together with notices of the Court Meeting and the Extraordinary General
Meeting and the expected timetable. It is expected that the Scheme Document,
together with forms of proxy and a form of election in respect of the Loan Note
Alternative, will be despatched to Pilkington Shareholders and, for information
only, to holders of options granted under the Pilkington Share Schemes, by the
end of March 2006 and that, subject to the satisfaction of the Conditions, the
Scheme will become effective by the end of June 2006. The Acquisition will be
governed by English law and be subject to the applicable requirements of the
City Code, the Panel, the London Stock Exchange and the UK Listing Authority.
Enquiries:
Nippon Sheet Glass Co., Ltd. +81 (0)3 5443 9505
Tomoaki Abe
Masakuni Nitta
Lazard (joint financial adviser to NSG and NSG UK) 020 7187 2000
William Rucker
Richard Shaw
UBS Investment Bank (joint financial adviser to NSG and NSG UK) 020 7567 8000
Liam Beere
Benjamin Lee
Brunswick Group LLP (PR adviser to NSG) 020 7404 5959
Jonathan Glass
Justine McIlroy
Pilkington plc
Iain Lough 01744 692 244
David Roycroft 020 7747 6000
Citigroup (sole investment banking and Rule 3 adviser and
joint financial adviser to Pilkington) 020 7986 4000
Robert Swannell
Iain Robertson
Jonathan Steers
JPMorgan Cazenove (joint financial adviser and sole broker to
Pilkington) 020 7588 2828
Edmund Byers
Steve Baldwin
Finsbury (PR adviser to Pilkington) 020 7251 3801
Rupert Younger
Robin Walker
The bases and sources of certain financial information contained in this
announcement are set out in Appendix 2.
Certain definitions and terms used in this announcement are set out in Appendix
3.
Lazard, which is authorised and regulated in the United Kingdom by the Financial
Services Authority, is acting exclusively for NSG and NSG UK and no one else in
connection with the Acquisition and will not be responsible to anyone other than
NSG and NSG UK for providing the protections afforded to the clients of Lazard
nor for providing advice in relation to the Acquisition.
UBS is acting exclusively for NSG and NSG UK and no one else in connection with
the Acquisition and will not be responsible to anyone other than NSG and NSG UK
for providing the protections afforded to the clients of UBS nor for providing
advice in relation to the Acquisition.
Citigroup and JPMorgan Cazenove, which are authorised and regulated in the
United Kingdom by the Financial Services Authority, are acting exclusively for
Pilkington in connection with the Acquisition and will not be responsible to
anyone other than Pilkington for providing the protections afforded to their
respective clients nor for providing advice in relation to the Acquisition.
The distribution of this announcement in jurisdictions other than the United
Kingdom may be restricted by law and therefore any persons who are subject to
the laws of any jurisdiction other than the United Kingdom should inform
themselves about, and observe, any applicable requirements. This announcement
has been prepared for the purposes 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 of England.
The Loan Notes to be issued in connection with the Acquisition have not been,
and will not be, registered under the United States Securities Act 1933 (as
amended) or under the applicable securities laws of any state, district or other
jurisdiction of the United States or of Australia, Germany, Italy, Malaysia or
New Zealand and no regulatory clearances in respect of the Loan Notes have been,
or will be, applied for in any jurisdiction. Accordingly, unless an exemption
under the United States Securities Act 1933 (as amended) or other relevant
securities laws is applicable, the Loan Notes are not being, and may not be,
offered, sold, resold, delivered or distributed, directly or indirectly, in or
into the United States, Australia, Germany, Italy, Malaysia or New Zealand or
to, or for the account or benefit of, any Restricted Overseas Person.
Neither the United States Securities and Exchange Commission nor any state
securities commission has reviewed, approved or disapproved this document or any
of the proposals described in this announcement.
Neither this announcement nor any material relating to the Acquisition has been
submitted to the French Autorite des marches financiers. In France, together
with other jurisdictions, including Belgium and Germany, this announcement and
all other materials relating to the Acquisition are only directed to existing
Pilkington Shareholders.
The contents of this announcement have not been reviewed by any regulatory
authority in Hong Kong. You are advised to exercise caution in relation to the
Acquisition. If you are in doubt about any of the contents of this announcement,
you should obtain independent professional advice.
This announcement, including information included or incorporated by reference
in this announcement, may contain "forward-looking statements" concerning NSG
and Pilkington. Generally, the words "will", "may", "should", "continue",
"believes", "expects", "intends", "anticipates" or similar expressions identify
forward-looking statements. The forward-looking statements involve risks and
uncertainties that could cause actual results to differ materially from those
expressed in the forward-looking statements. Many of these risks and
uncertainties relate to factors that are beyond the companies' abilities to
control or estimate precisely, such as future market conditions and the
behaviours of other market participants, and therefore undue reliance should not
be placed on such statements. The directors of NSG and Pilkington assume no
obligation and do not intend to update these forward-looking statements, except
as required pursuant to applicable law.
This announcement does not constitute an offer to sell or invitation to purchase
any securities or the solicitation of any vote or approval in any jurisdiction.
Pilkington Shareholders are advised to read carefully the formal documentation
in relation to the Scheme once it has been despatched.
Dealing Disclosure Requirements
Under the provisions of Rule 8.3 of the City Code, if any person is, or becomes,
"interested" (directly or indirectly) in 1 per cent. or more of any class of
"relevant securities" of Pilkington, all "dealings" in any "relevant securities"
of Pilkington (including by means of an option in respect of, or a derivative
referenced to, any such "relevant securities") must be publicly disclosed by no
later than 3.30 pm (London time) on the London business day following the date
of the relevant transaction. This requirement will continue until the Effective
Date or until the date on which the Scheme lapses or is otherwise withdrawn or
on which the "offer period" otherwise ends (or, if NSG elects to effect the
Acquisition by way of a takeover offer, until the date on which the offer
becomes, or is declared, unconditional as to acceptances, lapses or is otherwise
withdrawn or on which the "offer period" otherwise ends). If two or more persons
act together pursuant to an agreement or understanding, whether formal or
informal, to acquire an "interest" in "relevant securities" of Pilkington, they
will be deemed to be a single person for the purpose of Rule 8.3.
Under the provisions of Rule 8.1 of the City Code, all "dealings" in "relevant
securities" of Pilkington by NSG or Pilkington, or by any of their respective
"associates", must be disclosed by no later than 12.00 noon (London time) on the
London business day following the date of the relevant transaction.
A disclosure table, giving details of the companies in whose "relevant
securities" "dealings" should be disclosed, and the number of such securities in
issue, can be found on the Takeover Panel's website at
www.thetakeoverpanel.org.uk.
"Interests in securities" arise, in summary, when a person has long economic
exposure, whether conditional or absolute, to changes in the price of
securities. In particular, a person will be treated as having an "interest" by
virtue of the ownership or control of securities, or by virtue of any option in
respect of, or derivative referenced to, securities.
Terms in quotation marks are defined in the City Code, which can also be found
on the Panel's website. If you are in any doubt as to whether or not you are
required to disclose a "dealing" under Rule 8, you should consult the Panel.
APPENDIX 1
CONDITIONS TO THE IMPLEMENTATION OF THE SCHEME AND THE
ACQUISITION
The Acquisition will be conditional upon the Scheme becoming unconditional and
effective, by not later than 26 August 2006, or such later date (if any) as
Pilkington and NSG may agree and (if required) the Court may allow.
1. The Scheme will be subject to the following conditions:
(a) the approval by a majority in number, representing not less
than three-fourths in value, of the Pilkington Shareholders present and
voting,either in person or by proxy, at the Court Meeting (or at any adjournment
thereof);
(b) the resolution(s) necessary to approve and implement the Scheme being
duly passed by the requisite majority at the EGM (or at any adjournment
thereof); and
(c) the sanction (with or without modification, on terms acceptable to NSG)
of the Scheme and the confirmation of any reduction of capital provided
for therein by the Court, and an office copy of the Court Order(s) and the
minute of such reduction attached thereto being delivered for registration
to the Registrar of Companies in England and Wales and, in relation to the
reduction of capital, being registered by him.
2. In addition, Pilkington and NSG have agreed that the Acquisition will be
conditional upon the following matters and, accordingly, the necessary actions
to make the Scheme effective will not be taken unless such Conditions have been
satisfied or waived in accordance with this paragraph 2 below:
(a) insofar as the Acquisition is referred to the European Commission
(the "Commission") under Article 4(5) of Council Regulation (EC) 139/
2004 (the "Merger Regulation"):
(i) the Commission having issued a decision indicating, on terms
satisfactory to NSG UK (acting reasonably), that it does not
intend to initiate proceedings under Article 6(1)(c) of the Merger
Regulation in respect of the proposed acquisition of Pilkington
by NSG UK (orany part thereof), or a decision being deemed to
have been taken under Article 10(6) of the Merger Regulation;
(ii) in the event that a request has been made by one or more Member
States under Article 9(2) of the Merger Regulation and/or one or
more Parties to the Agreement on the European Economic Area (the
"EEA Agreement") with regard to Article 6(1) of Protocol 24 of the EEA
Agreement:
(A) the Commission having confirmed in writing, in terms
satisfactory to NSG UK (acting reasonably), that it does not intend to refer the
proposed acquisition of Pilkington by NSG UK (or any part thereof), to a
competent authority of any such Member State or Party to the EEA Agreement in
accordance with Article 9(3) of the Merger Regulation or Article 6(1) of
Protocol 24 to the EEA Agreement, as the case may be; or
(B) the competent authority of such Member State or
Party having confirmed in writing, on terms satisfactory to NSG UK (acting
reasonably), that it does not oppose the proposed acquisition of Pilkington by
NSG UK (or any part hereof) under the applicable national laws;
(b) insofar as the Acquisition is not subject to review under the
Merger Regulation, it being established in terms satisfactory to NSG UK (acting
reasonably) that the Office of Fair Trading does not intend to refer the
Acquisition or any matter arising from the Acquisition, to the Competition
Commission for investigation;
(c) all necessary filings having been made and all or any
appropriate waiting periods under the United States Hart-Scott-Rodino Antitrust
Improvements Act of 1976 (as amended) and the regulations made thereunder having
expired, lapsed or been terminated as appropriate in each case in respect of the
Acquisition and the proposed acquisition of any shares in, or control of,
Pilkington by NSG UK;
(d) no government or governmental, quasi-governmental, supranational,
statutory, regulatory, environmental or investigative body,
court, trade agency, association, institution or any other body or person
whatsoever in any jurisdiction (each, a "Third Party") having decided to take,
instituted, implemented or threatened any action, proceeding, suit,
investigation, enquiry or reference, or enacted, made or proposed any statute,
regulation, decision or order which would or might be reasonably expected to:
(i) make the Acquisition or its
implementation or the acquisition or proposed acquisition by NSG UK or any
member of the Wider NSG Group of any shares or other securities in, or control
or management of, Pilkington void, illegal and/or unenforceable in any
jurisdiction, or otherwise directly or indirectly, restrain, prevent, prohibit,
restrict, delay or otherwise interfere with the same, or impose additional
conditions or obligations with respect thereto, or otherwise impede, challenge
or interfere therewith;
(ii) impose any material limitation on,
or result in a material delay in, the ability of any member of the Wider NSG
Group to acquire or to hold or to exercise effectively, directly or indirectly,
all or any rights of ownership in respect of shares or loans or securities
convertible into shares or any other securities (or their equivalent) in, or to
exercise, directly or indirectly, voting or management control over, any member
of the Wider Pilkington Group;
(iii) require the divestiture by any
member of the Wider NSG Group of any shares or other securities in Pilkington or
prevent or delay any such divestiture to an extent which is material in the
context of the Wider NSG Group or the Wider Pilkington Group, in either case,
taken as a whole;
(iv) require, prevent or delay the
divestiture (or alter the terms envisaged for any proposed divestiture) by any
member of the Wider NSG Group or by any member of the Wider Pilkington Group of
all or any portion of their respective businesses, assets or properties or limit
the ability of any of them to conduct their respective businesses (or any of
them) or to own or control any of their respective assets or properties or any
part thereof which, in any such case, is material in the context of the Wider
NSG Group or the Wider Pilkington Group, in either case, taken as a whole;
(v) require any member of the Wider NSG
Group or of the Wider Pilkington Group to acquire, or to offer to acquire, any
shares or other securities in any member of either the Wider Pilkington Group or
the Wider NSG Group owned by any third party (other than in the implementation
of the Acquisition) which, in any such case, is material in the context of the
Wider NSG Group or the Wider Pilkington Group, in either case, taken as a whole;
(vi) impose any limitation on the ability
of any member of the Wider Pilkington Group to 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 Pilkington Group which is material in the context of the
Wider Pilkington Group taken as a whole;
(vii) result in any member of the Wider
Pilkington Group ceasing to be able to carry on business under any name under
which it presently does so which in any such case is material in the context of
the Wider Pilkington Group taken as a whole; or
(viii) otherwise adversely affect the
business, assets or profits of any member of the Wider Pilkington Group to an
extent which is material in the context of the Wider Pilkington Group taken as a
whole,
and all applicable waiting and other time periods during which any such Third
Party could institute, implement or threaten any action, proceeding, suit,
investigation, enquiry or reference or take any other step under the laws of any
jurisdiction in respect of the Acquisition having expired, lapsed or been
terminated;
(e) all necessary filings or applications having been made in
connection with the Acquisition and all statutory or regulatory obligations in
any jurisdiction having been complied with in connection with the Acquisition or
the acquisition by any member of the Wider NSG Group of any shares or other
securities in, or control of, Pilkington and all authorisations, orders,
recognitions, grants, consents, licences, confirmations, clearances, permissions
and approvals necessary in respect of the Acquisition or the proposed
acquisition of any shares or other securities in, or control of, Pilkington by
any member of the Wider NSG Group having been obtained in terms and in a form
reasonably satisfactory to NSG UK (acting reasonably) from all appropriate Third
Parties or persons with whom any member of the Wider Pilkington Group has
entered into contractual arrangements and all such authorisations, orders,
recognitions, grants, consents, licences, confirmations, clearances, permissions
and approvals together with all material authorisations, orders, recognitions,
grants, licences, confirmations, clearances, permissions and approvals necessary
to carry on the business of any member of the Wider Pilkington Group as
currently carried on remaining in full force and effect and all filings
necessary for such purpose having been made and there being no notice or
intimation of any intention to revoke or not to renew any of the same and all
necessary statutory or regulatory obligations in any jurisdictions having been
complied with;
(f) save as disclosed in Pilkington's annual report and accounts
for the year ended 31 March 2005 or in Pilkington's interim report for the six
months ended 30 September 2005 or as publicly announced by Pilkington (by the
delivery of an announcement to a Regulatory Information Service) or as fairly
disclosed by or on behalf of Pilkington to NSG or NSG UK or their respective
advisers prior to 27 February 2006, there being no provision of any agreement,
arrangement, licence, permit, franchise or other instrument to which any member
of the Wider Pilkington Group is a party, or by or to which any such member or
any of its assets is or are or may be bound, entitled or subject, which, in
consequence of the Acquisition or proposed acquisition of any shares or other
securities in Pilkington or because of a change in the control of the management
of Pilkington or otherwise, would or might reasonably be expected to result in,
to an extent which is material in the context of the Wider Pilkington Group
taken as a whole:
(i) any monies borrowed by, or any
other indebtedness of, or any grant available to, any such member being or
becoming repayable or capable of being declared repayable immediately or prior
to its stated repayment date or the ability of any such member to borrow monies
or incur any indebtedness being withdrawn or inhibited or becoming capable of
being withdrawn or inhibited;
(ii) the creation or enforcement of any
mortgage, charge or other security interest over the whole or any part of the
business, property, assets or interests of any such member;
(iii) any such agreement, arrangement,
licence, permit, franchise or other instrument, or the rights, liabilities,
obligations or interests of any such member thereunder, being terminated or
adversely modified or affected or any adverse action being taken or any
obligation or liability arising thereunder;
(iv) any asset or interest of any such
member 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;
(v) any such member ceasing to be able to
carry on business under any name under which it presently does so;
(vi) the creation of any liabilities
(actual or contingent) by any such member; or
(vii) the financial or trading position or
the prospects or the value of any member of the Wider Pilkington Group being
prejudiced or adversely affected,
and no event having occurred which, under any provision of any such agreement,
arrangement, licence, permit, franchise or other instrument, could reasonably be
expected to result in any of the events or circumstances which are referred to
in paragraphs (i) to (vii) of this Condition 2(f) occurring, to an extent which
is material in the context of the Wider Pilkington Group taken as a whole;
(g) since 31 March 2005, and save as disclosed in Pilkington's
annual report and accounts for the year ended 31 March 2005 or in Pilkington's
interim report for the six months ended 30 September 2005 or as otherwise
publicly announced by Pilkington (by the delivery of an announcement to a
Regulatory Information Service) or as fairly disclosed by or on behalf of
Pilkington to NSG or NSG UK or their respective advisers prior to 27 February
2006, no member of the Pilkington Group having:
(i) issued or agreed to issue, or
authorised the issue or grant of, additional shares or securities of any class,
or securities convertible into, or exchangeable for, or rights, warrants or
options to subscribe for or acquire, any such shares, securities or convertible
securities, other than as between Pilkington and wholly-owned subsidiaries of
Pilkington and other than any options granted or awarded in the regular
operation of the Pilkington Share Schemes and any Pilkington Shares allotted to
Pilkington directors by way of payment of fees pursuant to an arrangement in
existence prior to 27 February 2006 or to any person upon exercise of options
granted prior to the date hereof under the Pilkington Shares Schemes or pursuant
to Pilkington's scrip dividend scheme in respect of any dividend declared and
paid prior to 27 February 2006;
(ii) other than as between Pilkington and
wholly-owned subsidiaries of Pilkington in respect of transactions which do not
include any shares or other securities of Pilkington, purchased, redeemed or
repaid any of its own shares (including treasury shares) or other securities or
reduced or made or, save as set out in sub-paragraph (i) above, authorised any
other change to any part of its share capital;
(iii) recommended, declared, paid or made
any dividend or other distribution whether payable in cash or otherwise (other
than to Pilkington or a wholly-owned subsidiary of Pilkington) or proposed to do
any of the foregoing, save for Pilkington's interim dividend paid on 16 December
2005 and Pilkington's final dividend paid on 1 August 2005;
(iv) save for transactions between members
of the Wider Pilkington Group, made, proposed, authorised or announced its
intention to propose any change in its loan capital that may result in a
liability of any member of the Wider Pilkington Group that is material in the
context of the Wider Pilkington Group taken as a whole;
(v) save for transactions between
Pilkington and wholly-owned subsidiaries of Pilkington, merged or demerged with
any body corporate or partnership or, other than in the ordinary course of
business, acquired or disposed of or transferred, mortgaged, charged, or created
any other security interest over, any asset or any right, title or interest in
any asset or authorised, proposed or announced its intention to propose the
same;
(vi) save for transactions between
Pilkington and wholly-owned subsidiaries of Pilkington, issued or authorised the
issue of any debentures or, other than in the ordinary course of business,
incurred or increased any indebtedness or liability (actual or contingent) or
proposed to do any of the foregoing;
(vii) entered into, varied or (in a manner
which is prejudicial to the Wider Pilkington Group taken as a whole) terminated
or authorised the entry into, variation or (in a manner which is prejudicial to
the Wider Pilkington Group taken as a whole) termination of, any agreement,
transaction, arrangement or commitment (whether in respect of capital
expenditure or otherwise) which:
(A) is outside the ordinary course of business and
is of a long term, onerous or unusual nature or magnitude; or
(B) restricts or would be restrictive on the
business of any member of the Wider Pilkington Group or of the Wider NSG Group
to an extent that is material in the context of the Wider Pilkington Group and
the Wider NSG Group taken as a whole; or
(C) is outside of the ordinary course of business and is material
in the context of the Wider Pilkington Group taken as a whole;
(viii) entered into, implemented, effected or
authorised any reconstruction, amalgamation or scheme in respect of itself or
another member of the Wider Pilkington Group that is material in the context of
the Wider Pilkington Group;
(ix) entered into, or varied the terms of,
any agreement with any of the directors of Pilkington;
(x) (other than by way of a solvent
winding-up in respect of a member which is dormant at the relevant time) taken
any corporate action or had any steps taken or legal proceedings started or
threatened against it or petition presented or order made for its winding-up
(voluntarily or otherwise), dissolution or reorganisation or for the appointment
of a receiver, administrator, administrative receiver, trustee or similar
officer of all or any part of its assets and revenues or any analogous
proceedings in any jurisdiction or had any analogous person appointed in any
jurisdiction;
(xi) been unable, or admitted in writing
that it is unable, to pay its debts 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;
(xii) waived or compromised any claim other
than in the ordinary course of business which is material in the context of the
Wider Pilkington Group taken as a whole;
(xiii) made or agreed or consented to:
(A) any significant change to:
(I) the terms of the trust deeds or rules constituting or governing
Pilkington's principal UK pension scheme or UK Unfunded Top-Up Scheme
established for its directors and/or employees and/or their dependants in the UK
or the terms of the trust deeds or rules or other governing documentation of the
Pilkington Group's principal pension schemes in the United States and Germany;
or
(II) the benefits which accrue, or to the pensions which are payable,
thereunder for all members or a category of members; or
(III) the basis on which qualification for, or accrual or entitlement to,
such benefits or pensions are calculated or determined for all members or a
category of members; or
(IV) the basis upon which the liabilities (including pensions) of such
pension schemes are funded, provided for or made;
(B) any change to the governing documentation of the Pilkington
Group's post-retirement medical schemes in the United States the effect of which
is to increase to a material extent the contractual limit on liability of the
Pilkington Group under such schemes;
(C) any change to the trustee of the principal UK pension scheme
that is material in the context of the Wider Pilkington Group taken as a whole;
(xiv) proposed, agreed to provide or modified
in any respect 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 the Wider Pilkington Group to the extent material in the context of
the Wider Pilkington Group taken as a whole; or
(xv) entered into any agreement, 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, any of the transactions, matters or events referred to in this
Condition 2(g),
and no member of the Wider Pilkington Group having entered into any agreement,
commitment or arrangement or passed any resolution or made any offer (which
remains open for acceptance) with respect to, or proposed, announced an
intention to effect, or effected any of the transactions, matters or events as
described in paragraphs (i) to (xiv) above, in each case, where such
transaction, matter or event is within the control of Pilkington or any member
of the Pilkington Group;
(h) since 31 March 2005 and except as disclosed in Pilkington's
annual report and accounts for the year then ended or in Pilkington's interim
results for the six months ended 30 September 2005 or as otherwise publicly
announced by Pilkington (by the delivery of an announcement to a Regulatory
Information Service) or as fairly disclosed by or on behalf of Pilkington to NSG
or NSG UK or their respective advisers prior to 27 February 2006:
(i) there having been no adverse change
or deterioration in the business, assets, financial or trading position or
profits or prospects of any member of the Wider Pilkington Group to the extent
material to the Wider Pilkington Group taken as a whole;
(ii) no contingent or other liability of
any member of the Wider Pilkington Group having arisen or become apparent which
is material in the context of the Wider Pilkington Group taken as a whole;
(iii) no litigation, arbitration
proceedings, prosecution or other legal proceedings to which any member of the
Wider Pilkington Group is or may become a party (whether as claimant, defendant
or otherwise) having been threatened, announced, implemented or instituted by or
against or remaining outstanding against or in respect of any member of the
Wider Pilkington Group which in any such case might be reasonably expected
adversely and materially to affect the Wider Pilkington Group taken as a whole;
or
(iv) no steps having been taken which are
likely to result in the withdrawal (without replacement), cancellation or
termination of any licence held by any member of the Wider Pilkington Group
which is necessary for the carrying on of its business and material in the
context of the Wider Pilkington Group taken as a whole;
(i) save as fairly disclosed by or on behalf of Pilkington to
NSG or NSG UK or their respective advisers prior to 27 February 2006, NSG UK not
having discovered:
(i) that any financial, business or
other information concerning the Wider Pilkington Group publicly disclosed at
any time by or on behalf of any member of the Wider Pilkington Group, is
materially misleading or contains a material misrepresentation of fact or omits
to state a fact necessary to make any information contained therein not
materially misleading;
(ii) that any member of the Wider
Pilkington Group or any partnership, company or other entity in which any member
of the Wider Pilkington Group has a significant economic interest and which is
not a subsidiary undertaking of Pilkington is subject to any material liability
(actual or contingent) which was not disclosed in Pilkington's annual report and
accounts for the financial year ended 31 March 2005 or in Pilkington's interim
results for the six months ended 30 September 2005 and was required to have been
so disclosed; or
(iii) any information which affects the
import of any information disclosed at any time by or on behalf of any member of
the Wider Pilkington Group and which is material in the context of the Wider
Pilkington Group taken as a whole; and
(j) except as disclosed in Pilkington's annual report and
accounts for the year ended 31 March 2005 or in Pilkington's interim results for
the six months ended 30 September 2005, or as otherwise publicly announced by
Pilkington (by the delivery of an announcement to a Regulatory Information
Service) or as fairly disclosed by or on behalf of Pilkington to NSG or NSG UK
or their respective advisers prior to 27 February 2006, NSG UK not having
discovered that:
(i) any past or present member of the
Wider Pilkington Group has failed to comply with any applicable legislation or
regulations of any jurisdiction with regard to the use, storage, treatment,
transport, handling, release, disposal, discharge, spillage, leak or emission of
any waste or hazardous substance or any substance likely to impair the
environment or harm human or animal health, or otherwise relating to
environmental matters or human health or that there has otherwise been any such
use, storage, treatment, transport, handling, release, disposal, discharge,
spillage, leak or emission (whether or not this constituted a non-compliance by
any person with any legislation or regulations and wherever the same may have
taken place) which, in any case, would be reasonably likely to give rise to any
liability (whether actual or contingent) or cost on the part of any member of
the Wider Pilkington Group which is material in the context of the Wider
Pilkington Group taken as a whole; or
(ii) there is, or is likely to be, any
liability (whether actual or contingent) to make good, repair, reinstate 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 Pilkington Group or any
other property or any controlled waters under any environmental legislation,
regulation, notice, circular, order or other requirement of any Third Party
which is material in the context of the Wider Pilkington Group taken as a whole.
For the purposes of these conditions, the "Wider Pilkington Group" means
Pilkington and its subsidiary undertakings, associated undertakings and any
other undertaking in which Pilkington and/or such undertakings (aggregating
their interests) have a significant interest and the "Wider NSG Group" means NSG
and its subsidiary undertakings, associated undertakings and any other
undertaking in which NSG and/or such undertakings (aggregating their interests)
have a significant interest and for these purposes "subsidiary undertaking",
"associated undertaking" and "undertaking" have the meanings given by the
Companies Act, other than paragraph 20(1)(b) of Schedule 4A to the Act which
shall be excluded for this purpose, and "significant interest" means a direct or
indirect interest in 10 per cent. or more of the equity share capital (as
defined in the Act).
NSG UK reserves the right to waive, in whole or in part, all or any of the above
Conditions, except Condition 1.
NSG reserves the right to elect to effect the Acquisition by way of a takeover
offer. In such event, such offer will be implemented on and subject to the same
terms and conditions (subject to appropriate amendments, including (without
limitation) an acceptance condition set at 90 per cent. of the Pilkington Shares
to which such offer relates (but capable of waiver in accordance with Rule 10 of
the City Code) in substitution for Condition 1), so far as applicable, as those
which would apply to the Scheme.
If the Panel requires NSG UK to make an offer for Pilkington Shares under the
provisions of Rule 9 of the City Code, NSG UK may make such alterations to any
of the Conditions as are necessary to comply with the provisions of that Rule.
The Acquisition will not proceed if, before the date of the Court Meeting, the
European Commission initiates proceedings under Article 6(1)(c) of the Merger
Regulation in respect of the Acquisition or the Acquisition is referred to the
Competition Commission.
The Acquisition and the Scheme will be governed by English law and will be
subject to the jurisdiction of the English courts. The rules of the City Code
will, so far as they are appropriate, apply to the Acquisition and the Scheme.
3. Certain further terms of the Acquisition
If the Scheme is effected, the Pilkington Shares will be acquired by NSG UK and/
or its nominees fully paid and free from all liens, charges, equitable
interests, encumbrances, rights of pre-emption and any other rights and
interests of any nature whatsoever and together with all rights now and
hereafter attaching thereto, including voting rights and the right to receive
and retain in full all dividends and other distributions (if any) declared, made
or paid on or after 27 February 2006.
Appendix 2
Bases and Sources
1. The value placed by the Acquisition on the existing issued share capital
of Pilkington is based on 1,320,034,427 Pilkington Shares in issue on 24
February 2006, the latest practicable date prior to the date of this
announcement (as sourced from Pilkington's Rule 2.10 announcement on 14 February
2006).
2. The closing price of Pilkington Shares on 28 October 2005, the last
business day before the announcement by Pilkington that it had received a
preliminary approach regarding a possible offer, is taken from the Official
List.
3. The average closing price of Pilkington Shares for the period of 12
months ended 28 October 2005 is derived from Datastream.
4. Unless otherwise stated, the financial information relating to the
Pilkington Group is extracted from the audited consolidated financial statements
of the Pilkington Group for the relevant financial year or from the interim
results statement of the Pilkington Group for the six months ended 30 September
2005.
5. Unless otherwise stated, the financial information relating to NSG is
extracted from the audited consolidated financial statements of NSG for the
relevant financial year.
6. An exchange rate of Y205 / #1.00 has been used throughout this
announcement.
Appendix 3
Definitions
The following definitions apply throughout this announcement unless the context
requires otherwise.
"Acquisition" the proposed acquisition by NSG of the entire issued and to be
issued share capital of Pilkington not already owned by the NSG
Group, as described in this announcement
"business day" a day (other than a Saturday or Sunday) on which banks are
generally open for business in London
"Citigroup" Citigroup Global Markets Limited
"City Code" the City Code on Takeovers and Mergers
"closing the closing middle-market quotation of a Pilkington Share as
price" derived from the daily Official List on any particular day
"Companies the UK Companies Act 1985, as amended
Act"
"Conditions" the conditions to the implementation of the Scheme and the
Acquisition, which are set out in Appendix 1 of this announcement
"Court" the High Court of Justice in England and Wales
"Court the meeting of Pilkington Shareholders (and any adjournment
Meeting" thereof) to be convened pursuant to an order of the Court
pursuant to section 425 of the Companies Act for the purpose of
considering and, if thought fit, approving the Scheme (with or
without amendment)
"Court Order the order(s) of the Court sanctioning the Scheme under section
(s)" 425 of the Companies Act and confirming the reduction of share
capital provided for by the Scheme under section 137 of the
Companies Act
"Daiwa Daiwa Securities SMBC Co., Ltd.
Securities
SMBC"
"Effective the day on which the Scheme becomes effective and is implemented
Date" in accordance with its terms
"Extraordinary the extraordinary general meeting of Pilkington Shareholders (and
General any adjournment thereof) to be convened in connection with the
Meeting" or Scheme
"EGM"
"Groups" the NSG Group and the Pilkington Group
"JPMorgan JPMorgan Cazenove Limited
Cazenove"
"Lazard" Lazard & Co., Limited
"LIBOR" London Interbank Offered Rate
"Listing the listing rules of the United Kingdom Listing Authority, as
Rules" amended
"Loan Note the alternative whereby Pilkington Shareholders (other than
Alternative" Restricted Overseas Persons) may elect to receive Loan Notes
instead of all or part of the cash consideration to which they
would otherwise be entitled under the terms of the Acquisition
"Loan Notes" the floating rate guaranteed unsecured loan notes to be issued by
NSG UK pursuant to the Loan Note Alternative
"London Stock London Stock Exchange plc
Exchange"
"Meetings" the Court Meeting and/or the EGM, as the case may be
"NSG" Nippon Sheet Glass Co., Ltd., a company incorporated under the
laws of Japan
"NSG Group" NSG and its subsidiary undertakings and, where the context
admits, each of them
"NSG UK" NSG UK Enterprises Limited, a private limited company
incorporated in England and Wales under registered number 5584873
"Offer" if NSG elects to effect the Acquisition by way of a takeover
offer, the offer to be made by or on behalf of NSG to acquire all
the Pilkington Shares (other than shares already owned by the NSG
Group) and, where the context so requires, any subsequent
revision, variation, extension or renewal thereof
"Official the official list of the United Kingdom Listing Authority
List"
"Panel" the Panel on Takeovers and Mergers
"Pilkington" Pilkington plc, a public limited company incorporated in England
and Wales under registered number 41495
"Pilkington the board of directors of Pilkington
Board"
"Pilkington Pilkington and its subsidiary undertakings and, where the context
Group" permits, each of them
"Pilkington the holders of Pilkington Shares
Shareholders"
"Pilkington the ordinary shares of 50 pence each in the capital of Pilkington
Shares"
"Pilkington the 1984 Pilkington Senior Executives' Share Option Scheme, the
Share Schemes" 1984 Pilkington Senior Executives No.2 Share Option Scheme, the
1995 Pilkington Deferred Bonus Plan, the 2000 Pilkington
Leadership Equity Award Plan and the 1992 Pilkington
Savings-Related Share Option Scheme
"Registrar of the Registrar of Companies in England and Wales
Companies"
"Regulatory any of the services set out in schedule 12 to the Listing Rules
Information from time to time
Service"
"Restricted (i) a US person as defined in Regulation S under the US
Overseas Securities Act of 1933 (as amended), (ii) a person (including an
Person" individual, partnership, unincorporated syndicate, limited
liability company, unincorporated organisation, trust, trustee,
executor, administrator or other legal representative) in, or
resident in, or any person whom NSG UK reasonably believes to be
in or resident in, Australia, Germany, Italy, Malaysia or New
Zealand and (iii) persons in any other jurisdiction (other than
persons in the United Kingdom) whom NSG UK is advised it is
necessary to treat as restricted overseas persons in order to
observe the laws of such jurisdiction or to avoid the requirement
to comply with any governmental or other consent or any
registration, filing or other formality which NSG UK (acting
reasonably) regards as unduly onerous
"Scheme" the proposed scheme of arrangement under section 425 of the
Companies Act to effect the Acquisition between Pilkington and
the Pilkington Shareholders, the full terms of which will be set
out in the Scheme Document
"Scheme the document to be sent to Pilkington Shareholders containing,
Document" among other things, the terms and conditions of the Scheme,
certain information about Pilkington and NSG, the Scheme and the
notices convening the Meetings
"UBS" or "UBS UBS Limited
Investment
Bank"
"UK" or the United Kingdom of Great Britain and Northern Ireland
"United
Kingdom"
"United the Financial Services Authority in its capacity as the competent
Kingdom authority for the purposes of Part VI of the Financial Services
Listing and Markets Act 2000
Authority" or
"UKLA"
This information is provided by RNS
The company news service from the London Stock Exchange
END
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