RNS Number:3282Q
Greene King PLC
22 August 2005
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO OR FROM AUSTRALIA,
CANADA OR JAPAN
Embargoed for release at 7.00 a.m. (London time) 22 August 2005
RECOMMENDED CASH OFFER
for
THE BELHAVEN GROUP PLC
by
DEUTSCHE BANK AG, LONDON BRANCH
on behalf of the Offeror
a wholly owned subsidiary of GREENE KING PLC
and in the United States by the Offeror
Summary
The boards of The Belhaven Group plc and Greene King plc announce that they have
reached agreement on the terms of a recommended cash offer of 625 pence per
Belhaven Share to be made by Deutsche Bank on behalf of the Offeror, a wholly
owned subsidiary of Greene King, and in the United States by the Offeror. The
Offer will be for the entire issued and to be issued share capital of Belhaven
not already owned by the Greene King Group.
The Offer values the existing issued share capital of Belhaven at approximately
#187 million and represents:
- a premium of approximately 27.8 per cent to the average Closing Price
for the six month period ending 19 August 2005 (the last Business Day prior to
the date of this announcement) of 489 pence per Belhaven Share;
- a premium of approximately 24.5 per cent to the average Closing Price
for the three month period ending 19 August 2005 (the last Business Day prior to
the date of this announcement) of 502 pence per Belhaven Share;
- a premium of approximately 15.6 per cent to the Closing Price of 540.75
pence per Belhaven Share on 19 August 2005, the last Business Day prior to the
date of this announcement; and
- taken together with the existing indebtedness of Belhaven (based on the
net debt of #67.1 million as at 3 April 2005), an enterprise value of
approximately #254 million and an implied EV/EBITDA (2005) multiple of 11.0x.
The Offer will also include a Loan Note Alternative for shareholders outside the
United States and any Restricted Jurisdiction.
The Directors of Greene King believe that the acquisition of Belhaven not only
represents an opportunity to maintain and develop the existing strengths of
Belhaven as part of the enlarged Greene King Group, but also a unique
opportunity to achieve instant scale in a market in which it has little presence
currently. Whilst Greene King regards Belhaven in its own right as a business
capable of delivering future, sustainable growth, opportunities for realising
cost and revenue synergies also exist. These include, inter alia:
- expected synergies of approximately #3 million in the first full year
of ownership, rising progressively to approximately #5 million over the
following two year period, the majority of which are expected to be realised
from purchasing savings and cross-selling of products (including free trade,
on-trade national accounts, take-home and export); and
- harnessing management and operational expertise from both Greene King
and Belhaven to best effect.
The Directors of Belhaven, who have been so advised by Collins Stewart, consider
the terms of the Offer to be fair and reasonable. In providing its advice,
Collins Stewart has taken into account the commercial assessments of the
Directors of Belhaven. The Directors of Belhaven intend unanimously to
recommend that Belhaven Shareholders accept the Offer, as they have irrevocably
undertaken to do (or procure to be done) in respect of their own beneficial
holdings (over which they have control) of, in aggregate 153,298 Belhaven Shares
representing approximately 0.5 per cent of the issued Belhaven Shares.
Irrevocable undertakings to accept the Offer have been received by the Offeror
in respect of Belhaven Shares representing approximately 23.7 per cent of
Belhaven's existing issued share capital. These include the irrevocable
undertakings from the Directors of Belhaven referred to above. Additionally,
the Offeror has also received a letter of intent to accept the Offer
representing a further 4.3 per cent of Belhaven's existing issued share capital.
In aggregate therefore, the Offeror has received irrevocable undertakings and
a letter of intent to accept, or procure the acceptance of, the Offer in respect
of an aggregate of 8,408,841 Belhaven Shares, representing approximately 28.1
per cent of Belhaven's existing issued share capital.
Deutsche Bank is acting as financial adviser and broker to Greene King and the
Offeror. Collins Stewart is acting as financial adviser and broker to Belhaven.
Commenting on the Offer, Rooney Anand, Chief Executive of Greene King, said:
"This is a full and fair offer for Belhaven, a business that we have long
admired for the strength of its pubs, brands and people. It is a unique
opportunity for us to gain immediate scale in the important Scottish market.
The offer is consistent with our strategy to deliver shareholder value by
augmenting our organic growth with selective acquisitions that improve the
overall quality of the group.
We are both integrated operators with proud histories and our businesses
complement each other well. Belhaven will retain everything at the heart of its
success, including its name, its brands, and its brewery, but will also benefit
from being part of a larger group opening up new markets for its products."
Stuart Ross, Chief Executive of Belhaven, said:
"Belhaven has achieved 15 years of unbroken growth, a record of which we are
very proud. Today's cash offer reflects the quality of our business and our
Board unanimously recommends that it is in the best interests of our
shareholders.
We believe that Greene King is the ideal partner for Belhaven. It is a hand in
glove fit. The commercial models of the two companies are almost identical and
we share the same ideals about the value of people, brands and heritage.
In Scotland, we can look forward positively to the future and we are confident
that our assets, including our people, will make a meaningful contribution to
the future growth and prosperity of the enlarged group."
This summary should be read in conjunction with, and is subject to, the full
text of the attached announcement. The Offer will be subject to the conditions
set out in Appendix I and to the full terms and conditions set out in the Offer
Document and Form of Acceptance.
A presentation for analysts and investors to outline the Offer will be held at
Deutsche Bank, Winchester House, 1 Great Winchester Street, London EC2N 2DB
today at 9.30 a.m.
Enquiries:
Greene King +44 (0) 1284 763 222
Rooney Anand
Michael Shallow
Deutsche Bank +44 (0) 20 7545 8000
Jeremy Quin
Charles Roast
Financial Dynamics +44 (0) 20 7831 3113
Ben Foster
Charles Watenphul
Belhaven +44 (0) 1368 869 105
Stuart Ross +44 (0) 7785 335 700
Ron Robson +44 (0) 7876 500 530
Collins Stewart +44 (0) 20 7523 8350
Seema Paterson
Chris Howard
Binns +44 (0) 20 7786 9600
Peter Binns +44 (0) 7768 392 582
Paul McManus
Terms used in this summary shall have the meaning given to them in Appendix IV.
The Offer Document and the Form of Acceptance will be posted to Belhaven
Shareholders and, for information only, to participants in the Belhaven Employee
Share Schemes (other than in each case to persons with addresses in Restricted
Jurisdictions), as soon as practicable and, in any event, within twenty-eight
days of this announcement unless otherwise agreed with the Panel.
Deutsche Bank (authorised by Bundesanstalt fur Finanzdienstleistungsaufsicht
(BaFin) and by the Financial Services Authority (FSA)), which is regulated by
the FSA for the conduct of UK business and a member of the London Stock
Exchange, is acting for Greene King and the Offeror and no one else in
connection with the Offer and will not be responsible to anyone other than
Greene King and the Offeror for providing the protections afforded to clients of
Deutsche Bank nor for providing advice in relation to the Offer or any matter
referred to in this announcement.
Collins Stewart, which is regulated by the FSA in the United Kingdom, is acting
for Belhaven and no one else in connection with the Offer and will not be
responsible to anyone other than Belhaven for providing the protections afforded
to clients of Collins Stewart nor for providing advice in relation to the Offer
or any matter referred to in this announcement.
This announcement does not constitute an offer to sell, or an invitation to
purchase, any securities or the solicitation of any vote or approval in any
jurisdiction. The Offer will be made solely by the Offer Document and the Form
of Acceptance which will contain the full terms and conditions of the Offer
(including details of how it may be accepted).
The release, publication or distribution of this announcement in certain
jurisdictions may be restricted by law and therefore persons in any such
jurisdictions into which this announcement is released, published or distributed
should inform themselves about and observe such restrictions.
The ability of Belhaven Shareholders who are not resident in the United Kingdom
to accept the Offer may be affected by the laws of the relevant jurisdictions in
which they are located. Persons who are not resident in the United Kingdom
should inform themselves of, and observe, any applicable requirements.
Copies of this announcement and any formal documentation relating to the Offer
are not being, and must not be, directly or indirectly, mailed or otherwise
forwarded, distributed or sent in or into or from a Restricted Jurisdiction and
persons receiving such documents (including custodians, nominees and trustees)
must not mail or otherwise forward, distribute or send them in or into or from a
Restricted Jurisdiction. The Offer (unless otherwise determined by the Offeror
and permitted by applicable law and regulation), will not be made, directly or
indirectly, in or into, or by the use of mails or any means of instrumentality
(including, without limitation, telephonically or electronically) of interstate
or foreign commerce of, or any facility of, a national, state or other
securities exchange of a Restricted Jurisdiction and the Offer will not be
capable of acceptance by any such use, means, instrumentality or facilities.
In accordance with normal UK market practice, Greene King or the Offeror or
their nominees or broker (acting as agents) may from time to time make certain
purchases of, or arrangements to purchase, Belhaven Shares outside the United
States, other than pursuant to the Offer, before or during the period in which
the Offer remains open for acceptance. These purchases may occur either in the
open market at prevailing prices or in private transactions at negotiated
prices. Any information about such purchases will be disclosed as required in
the UK and communicated in the US by way of an announcement by or on behalf of
the Offeror.
The Offer in the United States is made solely by Greene King. Neither Deutsche
Bank nor any of its affiliates is making the Offer into the United States.
Members of the general public are not eligible to take part in the Placing
referred to in paragraph 11 of this announcement. The Placing and all references
to it are directed only at persons who have professional experience in matters
relating to investments who fall within article 19(1) of the Financial Services
and Markets Act 2000 (Financial Promotions) Order 2001 (as amended) (the "Order
") or are persons falling within article 49(2) (a) to (d) of the Order or to
whom it may otherwise lawfully be communicated (all such persons together being
referred to as "Relevant Persons"). This announcement, in so far as it relates
to the Placing, must not be acted on or relied on by persons who are not
Relevant Persons. Any investment or inducement activity in so far as relating to
participation in the Placing is available only to Relevant Persons and will be
engaged in only with Relevant Persons.
The Placing Shares have not been and will not be registered under the Securities
Act and, subject to certain exceptions, may not be offered or sold within the
United States. No public offering of Placing Shares will be made in the United
Kingdom, the United States or elsewhere.
The Loan Notes to be issued in connection with the Offer have not been, nor will
they be, registered under the Securities Act or under the securities laws of any
state, territory, district or other jurisdiction of the United States; the
relevant clearances have not been, nor will they be, obtained from the
securities commission or any similar authority of any province or territory of
Canada; no prospectus has been, or will be, lodged with, or registered by, the
Australian Securities and Investments Commission or the Japanese Minister of
Finance; and the Loan Notes have not been, nor will they be, registered under or
offered in compliance with applicable securities laws of any state, province,
territory or jurisdiction of any Restricted Jurisdiction. Accordingly, the Loan
Notes are not being, and may not be offered, sold, resold or delivered, directly
or indirectly, in or into the United States or any Restricted Jurisdiction or
to, or for the account or benefit of, any US person or any person in such
Restricted Jurisdiction.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO OR FROM AUSTRALIA,
CANADA OR JAPAN
Embargoed for release at 7.00 a.m. (London time) 22 August 2005
RECOMMENDED CASH OFFER
for
THE BELHAVEN GROUP PLC
by
DEUTSCHE BANK AG, LONDON BRANCH
on behalf of the Offeror
a wholly owned subsidiary of GREENE KING PLC
and in the United States by the Offeror
1. Introduction
The boards of Greene King and Belhaven announce that they have reached agreement
on the terms of a recommended cash offer of 625 pence per Belhaven Share to be
made by Deutsche Bank on behalf of the Offeror, a wholly owned subsidiary of
Greene King, and in the United States by the Offeror.
2. The Offer
The Offer, which will be subject to the terms and conditions set out in Appendix
I to this announcement and any further terms to be set out in the Offer Document
and Form of Acceptance, will be made for the entire issued and to be issued
share capital of Belhaven not already owned by the Greene King Group, on the
following basis:
for each Belhaven Share 625 pence in cash
The Offer values the existing issued share capital of Belhaven at approximately
#187 million and represents:
- a premium of approximately 27.8 per cent to the average Closing Price
for the six month period ending 19 August 2005 (the last Business Day prior to
the date of this announcement) of 489 pence per Belhaven Share;
- a premium of approximately 24.5 per cent to the average Closing Price
for the three month period ending 19 August 2005 (the last Business Day prior to
the date of this announcement) of 502 pence per Belhaven Share;
- a premium of approximately 15.6 per cent to the Closing Price of 540.75
pence per Belhaven Share on 19 August 2005, the last Business Day prior to the
date of this announcement; and
- taken together with the existing indebtedness of Belhaven (based on the
net debt of #67.1 million as at 3 April 2005), an enterprise value of
approximately #254 million and an implied EV/EBITDA (2005) multiple of 11.0x.
3. Recommendation
The Directors of Belhaven, who have been so advised by Collins Stewart, consider
the terms of the Offer to be fair and reasonable. In providing its advice,
Collins Stewart has taken into account the commercial assessments of the
Directors of Belhaven. Accordingly, the Directors of Belhaven intend
unanimously to recommend that Belhaven Shareholders accept the Offer, as they
have irrevocably undertaken to do (or procure to be done) in respect of their
own beneficial holdings (over which they have control) of, in aggregate 153,298
Belhaven Shares representing approximately 0.5 per cent of the issued Belhaven
Shares.
4. The Loan Note Alternative
As an alternative to some or all of the cash consideration which would otherwise
be receivable under the Offer, Belhaven Shareholders who validly accept the
Offer (other than certain overseas Belhaven Shareholders in the United States or
any Restricted Jurisdiction) will be able to elect to receive Loan Notes to be
issued by the Offeror on the following basis:
for every #1 of cash consideration #1 nominal value of Loan Notes
The Loan Notes, which will be governed by English law, will be unsecured
obligations of the Offeror and will initially be guaranteed as to principal only
by The Royal Bank of Scotland plc and thereafter by a bank with a credit rating
at least equivalent to The Royal Bank of Scotland plc. The Loan Notes will bear
interest (from the date of issue to the relevant holder of Loan Notes) payable
every six months in arrears on 30 June and 31 December at a rate of 0.75 per
cent below LIBOR for six month sterling deposits determined on the first
Business Day of each interest period. The first interest payment date will be 31
December 2005 in respect of the period from the date of issue of the Loan Notes
up to and excluding that date. The Loan Notes will be redeemable at par for cash
at the option of the holders, in part or in whole, on interest payment dates,
commencing on 30 June 2006. The Loan Notes will be redeemable at par for cash at
the option of the Offeror, in whole (but not in part), on interest payment dates
commencing on 31 December 2007 if the principal amount of Loan Notes then
outstanding is less than #2 million. Any Loan Notes outstanding on 31 December
2010 will be redeemed at par (together with any accrued interest) on that date.
The Loan Notes will not be transferable, and no application will be made for
them to be listed on, or dealt on, any stock exchange or other trading facility.
The Loan Note Alternative will be conditional on the Offer becoming or being
declared unconditional in all respects. The Loan Note Alternative will remain
open for acceptance until the Offer closes. The Loan Note Alternative is not
being made available to Belhaven Shareholders in the United States or any
Restricted Jurisdiction. Further details of the Loan Note Alternative are
included in Appendix III to this announcement and full details will be contained
in the Offer Document.
5. Background to and reasons for recommending the Offer
For many years Belhaven has consistently and successfully applied a clear
strategy which has resulted in strong growth in profitability and enhanced
returns for Belhaven Shareholders. Belhaven's primary objective remains to
generate shareholder value whilst growing its position of importance in the
Scottish licensed trade as an integrated pub retailer and brewer.
The Directors of Belhaven believe that the Offer represents a fair value for the
Belhaven Group and is in the best interests of Belhaven Shareholders for a
number of reasons.
The Offer of 625 pence in cash per Belhaven Share provides an immediate
opportunity for Belhaven Shareholders to realise a premium to the Closing Price
of 540.75 pence per Belhaven Share on 19 August 2005 (the last Business Day
prior to the announcement of the Offer). Furthermore, when taken together with
the Belhaven Group's net indebtedness of #67.1 million as at 3 April 2005, the
Offer represents a significant multiple of the Belhaven Group's historic EBITDA.
In Belhaven's Annual Report, the Directors of Belhaven expressed concern at the
impact of the forthcoming smoking ban in Scotland on the group's financial
performance. The Offer provides Belhaven Shareholders the opportunity to
realise significant value in cash, giving certainty to shareholders at a time
when the Belhaven Group faces commercial and financial risks arising from the
change in legislation.
Given the similarity of the business models and strategic aspirations of Greene
King and Belhaven, the Directors of Belhaven believe that a combination with
Greene King is the most attractive option to allow Belhaven's strategic
objectives to continue to be pursued. It is the belief of the Directors of
Belhaven that the Offer provides a good opportunity for employees, customers,
consumers and suppliers to engage with a larger group with a reputation for
quality across the breadth of its activities. Additionally, both Belhaven and
Greene King expect to benefit from the scale and national status of the enlarged
business, ultimately improving the competitive position of Belhaven in its core
Scottish market, as well as providing a wider market for its products.
Belhaven and Greene King share the same values in particular respecting and
developing the pivotal contribution to business success made by its people,
whether they be employees or customers. The Directors of Greene King have
already formed a sound understanding of the operations, character and heritage
of the Belhaven business and the Directors of Belhaven are confident that the
enlarged Greene King Group will be managed in the future in an appropriate
manner for stakeholders.
Accordingly, the Directors of Belhaven will be unanimously recommending that
Belhaven Shareholders accept the Offer.
6. Reasons for the Offer and future plans for Belhaven
Greene King's consistent record of enhancing shareholder value has been derived
from a focus on strong organic growth with a complementary programme of
acquisitions. Since 1996, Greene King has acquired over 1,600 pubs in eight
transactions with an aggregate value in excess of #1.3 billion.
To date, each of Greene King's major acquisitions has:
- improved the overall quality of the Greene King business;
- improved the ability to manage the overall estate in order to enhance
its prospects for future organic growth;
- generated returns in excess of Greene King's weighted average cost of
capital;
- extended Greene King's geographical coverage across the United Kingdom;
- improved economies of scale; and
- enhanced Greene King's earnings per share.
Belhaven has invested significantly in both its brewing and pub businesses in
recent years, presenting an excellent opportunity for Greene King to acquire an
extensive estate of well maintained pubs together with a high quality brewing
business, as well as Scotland's number one ranked draught ale brand.
Following a site by site assessment, Greene King has concluded that the Scottish
smoking ban due in 2006 may result in a significant reduction in Belhaven's
short-term profitability (a significantly greater impact than that of the
English smoking ban expected in 2008 on the existing Greene King estate). This
has been fully factored into Greene King's appraisal and valuation of Belhaven.
The Directors of Greene King have high regard for Belhaven's employees, brand
and heritage as a Scottish brewer. Greene King therefore believes that the
acquisition of Belhaven not only represents an opportunity to maintain and
develop the existing strengths of Belhaven as part of the enlarged Greene King
Group, but also a unique opportunity to achieve instant scale in a market in
which it has little presence currently.
In addition, the Directors of Greene King believe that the shape of Belhaven's
business in Scotland mirrors Greene King's vertically-integrated model in
England, in which each element of the business complements and reinforces the
others, providing:
- leading beer brands;
- a quality estate of mostly freehold pubs;
- a diversified range of pubs enabling the estate to be operated
optimally through transfers between leased and managed models; and
- strong sales networks and relationships with the free trade.
Greene King regards Belhaven in its own right as a business capable of
delivering future, sustainable growth. However, a combination of Greene King
and Belhaven also presents opportunities for realising cost and revenue
synergies. These include, inter alia:
- expected synergies of approximately #3 million in the first full year
of ownership, rising progressively to approximately #5 million over the
following two year period, the majority of which are expected to be realised
from purchasing savings and cross-selling of products (including free trade,
on-trade national accounts, take-home and export); and
- harnessing management and operational expertise from both Greene King
and Belhaven to best effect.
The Directors of Greene King expect the Offer to be earnings enhancing for
Greene King (before exceptional items and goodwill amortisation) from the first
financial year following completion of the Offer (note 1).
7. Irrevocable undertakings to accept the Offer
The Offeror has received irrevocable undertakings to accept the Offer in respect
of 7,108,775 Belhaven Shares in aggregate; representing approximately 23.7 per
cent of Belhaven's existing issued share capital.
Details of these irrevocable undertakings are as follows:
(a) The Directors of Belhaven have irrevocably undertaken to accept the Offer
in respect of all their own holdings over which they have control, as noted
below, which in aggregate amount to 153,298 Belhaven Shares, representing
approximately 0.5 per cent of Belhaven's issued share capital. Their irrevocable
undertakings will cease to be binding if: (i) the Offer Document is not posted
within 28 days of the date hereof (or such later date as the Offeror determines,
with the consent of the Panel) or (ii) the Offer lapses or is withdrawn.
Belhaven Shares
Stuart Ross 142,966
Alistair Arkley 9,082
Angus Meldrum 1,250
(b) Morley Fund Management Limited has undertaken, in their capacity as
discretionary fund manager, to accept, or procure the acceptance of, the Offer
by no later than 3.00 p.m. on the first closing date following the posting of
the Offer Document in respect of 1,705,455 Belhaven Shares, representing
approximately 5.7 per cent of Belhaven's issued share capital. Their obligations
under this undertaking would lapse: (i) if the Offer Document is not posted
within 28 days of the date hereof (or within such longer period as the Offeror
and Belhaven may, with the consent of the Panel, determine), (ii) if the Offer
lapses or is withdrawn without becoming unconditional in all respects, (iii) on
the expiry of 14 days from the date on which the Offer becomes unconditional or
such longer period, up to a maximum of 2 months, over which the Offer remains
open for acceptance; (iv) if they are required to withdraw their undertaking by
any court or competent regulator; (v) if a competing offer is announced where
the value of the consideration per Belhaven Share is at least 5 per cent greater
than that available under the Offer and the Offeror has not within 14 days of
the date of posting of the competing offer announced a revised offer which
exceeds the value of the competing offer and (vi) if there is a material change
in the information relating to the Offer upon which their decision to provide
the undertaking was based.
(c) Hermes Investment Management Limited has undertaken, on behalf of their
clients, to accept, or procure the acceptance of, the Offer by no later than
3.00 p.m. on the seventh business day following the posting of the Offer
Document in respect of 1,451,847 Belhaven Shares, representing approximately 4.8
per cent of Belhaven's issued share capital. Their obligations under this
undertaking would lapse: (i) if the Offer Document is not posted within 28 days
of the date hereof (or within such longer period as the Offeror determines, with
the consent of the Panel), (ii) if the Offer lapses or is withdrawn, (iii) on 31
December 2005; or (iv) if a competing offer is announced where the value of the
consideration per Belhaven Share exceeds by at least 5 per cent that available
under the Offer and the Offeror has not within seven days of the date of posting
of the competing offer announced a revised offer which exceeds the value of the
competing offer.
(d) Framlington Investment Management Limited has undertaken, in their capacity
as discretionary fund manager, to accept, or procure the acceptance of, the
Offer by no later than 3.00 p.m. on the tenth business day following the posting
of the Offer Document in respect of 927,500 Belhaven Shares, representing
approximately 3.1 per cent of Belhaven's issued share capital. Their obligations
under this undertaking would lapse if: (i) the Offer Document is not posted
within 28 days of the date hereof (or within such longer period as the Offeror
determines, with the consent of the Panel), (ii) the Offer lapses or is
withdrawn; or (iii) if a competing offer is announced where the value of the
consideration per Belhaven Share exceeds by at least 5 per cent that available
under the Offer.
(e) UBS Global Asset Management (UK) Ltd has undertaken to accept, or procure
the acceptance of, the Offer by no later than 3.00 p.m. on the seventh business
day following the posting of the Offer Document in respect of 1,946,587 Belhaven
Shares, representing approximately 6.5 per cent of Belhaven's issued share
capital. Their obligations under this undertaking would lapse if: (i) the Offer
Document is not posted within 28 days of the date hereof (or within such longer
period as the Offeror determines, with the consent of the Panel), (ii) the Offer
lapses or is withdrawn, or (iii) if a competing offer is announced where the
value of the consideration per Belhaven Share is more than 5 per cent greater
than that available under the Offer.
(f) Artemis Investment Management Limited has undertaken to accept, or procure
the acceptance of, the Offer by no later than 3.00 p.m. on the seventh business
day following the posting of the Offer Document in respect of 924,088 Belhaven
Shares, representing approximately 3.1 per cent of Belhaven's issued share
capital. Their obligations under this undertaking would lapse if: (i) the Offer
Document is not posted within 28 days of the date hereof (or within such longer
period as the Offeror determines, with the consent of the Panel), (ii) the Offer
lapses or is withdrawn, or (iii) if a competing offer is announced where the
value of the consideration per Belhaven Share exceeds by at least 10 per cent
that available under the Offer and the Offeror has not within 14 days of the
date of posting of the competing offer announced a revised offer which exceeds
the value of the competing offer.
The Offeror has also received a letter of intent to accept the Offer from
Standard Life Investments in relation to 1,300,066 Belhaven Shares, representing
approximately 4.3 per cent of Belhaven's issued share capital.
In total therefore, the Offeror has received irrevocable undertakings and a
letter of intent to accept, or procure the acceptance of, the Offer in respect
of an aggregate of 8,408,841 Belhaven Shares, representing approximately 28.1
per cent of Belhaven's existing issued share capital.
Note 1. This statement should not be construed as a profit forecast or be
interpreted to mean that the future earnings per share of Greene King will
necessarily be greater than the historic published earnings per share figures
for Greene King for the year to 1 May 2005.
8. Directors, management and employees
Greene King attaches great importance to the skills and experience of the
current management team and employees of the Belhaven Group.
The Board of Greene King has given assurances to the Directors of Belhaven that,
following the Offer becoming or being declared unconditional in all respects,
the existing employment rights of all employees of the Belhaven Group will be
fully safeguarded.
Greene King intends to maintain the Belhaven pension scheme and keep it open to
existing members. Greene King also intends to ensure that all existing funding
obligations in respect of the scheme are honoured.
The non-executive directors of Belhaven, being Angus Meldrum as Chairman,
Alastair Arkley and Graeme Bisset intend to resign from the Board of Belhaven
upon the Offer being declared unconditional in all respects. No non-executive
director will have any entitlement to compensation for loss of office save for a
payment in lieu of his entitlement to three months' notice under his letter of
appointment.
9. Information on Belhaven and update on current trading
Founded in 1719 and based in Dunbar, Scotland, Belhaven owns one of Scotland's
oldest and largest regional breweries and operates both a managed and tenanted
pub estate and a drinks distribution business.
From its brewery in Dunbar, Belhaven produces a range of branded beers which it
sells to its own pub estate in Scotland and to a wide range of free-trade
customers, as well as to the take-home and export markets.
In the 53 weeks to 3 April 2005, Belhaven recorded sales of #114.4 million,
operating profit of #20.5 million and profit after tax of #13.0 million. As at
3 April 2005, Belhaven had gross assets of #190.7 million. Belhaven reports in
two divisions - Belhaven Pubs (both tenanted and managed) and Belhaven Drinks
(brewing and drinks distribution).
Belhaven Pubs (51 per cent of sales; 64 per cent of operating profit)
Belhaven's pub portfolio comprised a managed pub estate of 101 units and a
tenanted pub estate of 169 units as at 3 April 2005.
The managed pub estate has been the subject of an aggressive expansion programme
in the recent past as Belhaven has acquired new properties. Notwithstanding
significant cost pressures, including rises in the national minimum wage and
energy costs, the division continues to maintain steady operating margins and
recorded an increase in profit contribution of 30.3 per cent to #11.2 million in
the 53 weeks to 3 April 2005.
The tenanted pub estate grew by 32 units in the 53 weeks to 3 April 2005, partly
contributing to the 34.4 per cent increase in operating profit to #7.7 million
from the prior year. In the 53 weeks to 3 April 2005, Belhaven Pubs recorded
sales of #58.7 million (#44.3 million in the 52 weeks to 28 March 2004) and
operating profits of #15.1 million (#11.8 million in the prior period).
Belhaven Drinks (49 per cent of sales; 36 per cent of operating profit)
Belhaven brews and packages its own brands and also contract brews and bottles
for third parties under licence. Its own brands include Belhaven Best, St
Andrew's Ale and Belhaven 80 Shilling. Belhaven Best is Scotland's most popular
draught ale in the on trade and is amongst the top ten alcoholic drinks in
Scottish pubs. In addition to its own beer operations, Belhaven has a strong,
growing and profitable drinks distribution business, selling a wide range of
draught and packaged ales, lagers, ciders, stouts and soft drinks to the
Scottish free trade (in excess of 2,000 customers) as well as its own pub estate
which accounts for 25 per cent of total volume. The three principal brands in a
portfolio of over 200 products are Belhaven Best, Tennent's Lager and Stella
Artois.
In the 53 weeks to 3 April 2005, total volumes increased by 10.1 per cent,
despite overall market decline of about 3 per cent.
In the 53 weeks to 3 April 2005, Belhaven Drinks' sales were #55.8 million
(#50.7 million in the 52 weeks to 28 March 2004) and operating profits were #8.6
million (#7.9 million in the prior period).
Current trading
The Directors of Belhaven have stated that trading levels in the current
financial year have been satisfactory with overall beer sales volumes (excluding
contract bottling) comfortably ahead of both budget and the previous year.
Belhaven's profit is also ahead of internal expectation and the comparative
period, with the bulk of the increase over last year being driven by the
Belhaven Pubs division.
10. Information on Greene King and update on current trading
Greene King has been brewing beer and operating pubs for over 200 years.
Founded in 1799, it has grown steadily from its base in Bury St Edmunds, Suffolk
to become a leading pub retailer and ale brewer in the United Kingdom.
Greene King has grown both organically and through acquisition, resulting in a
high quality estate comprising 2,064 pubs as at 1 May 2005. Greene King's pubs
are typically well presented with a strong individual local identity, supported
where necessary by quality branding and appealing to a broad range of customers
at different times of the week.
Greene King is currently structured into three integrated businesses: Pub
Company which operates its managed pub business, Pub Partners which operates its
tenanted and leased pubs, and Brewing Company which operates its brewing
business.
Pub Company
As the managed house division of Greene King, Pub Company has four operating
divisions:
- Real Pubs: community pubs with a regular local customer base and an
emphasis on sporting events rather than food;
- Town Local: town centre and traditional town local pubs;
- Inns: pubs which are characterised by attractive locations, traditional
furnishings and individual pub names. This division includes the Old English
Inns business and Wayside Inns acquired as part of Laurel in 2004; and
- Hungry Horse: the exception to the unbranded pub rule that Greene King
operates, focusing on urban community sites.
Recording operating profits of #93.8 million for the year to 1 May 2005, Pub
Company accounted for 56 per cent of Greene King's total operating profit.
Pub Partners
Pub Partners is the tenanted and leased pub business of the Greene King Group
and comprised 1,244 pubs as at 1 May 2005. Historically strengthened by the
acquisitions of Morland, Marstons and Morrells, Pub Partners has a strong,
effective policy of working to attract the most suitable licensees. Pub
Partners recorded operating profits for the year to 1 May 2005 of #54.0 million,
an increase of 13 per cent on the previous financial year and representing 33
per cent of Greene King's total operating profit.
Brewing Company
Greene King has an established reputation as one of the United Kingdom's leading
breweries whose products have wide appeal both across Greene King's pub estate
as well as outside the Greene King estate. This is demonstrated by the fact
that 79 per cent of the beer brewed is sold through external channels,
comprising the independent free-trade, on-trade national accounts, take home
trade and export markets.
Amongst Greene King's own brands are Greene King IPA, Abbot Ale and Old Speckled
Hen which together achieved volume growth of 3 per cent for the year to 1 May
2005. This growth has been achieved by continued focus and investment in its
core beer brands, supported by regular advertising, promotions and marketing and
underpinned by its commitment to producing quality beer products. Operating
profits for the year to 1 May 2005 were #17.8 million, representing 11 per cent
of Greene King's total operating profit.
For the year to 1 May 2005, the Greene King Group recorded total sales of #732.6
million, operating profits of #155.7 million and profit before tax and
exceptional items of #94 million. As at 1 May 2005, the Greene King Group had
net assets of #683.7 million.
Current trading
The Directors of Greene King have stated that trading performance for the 12
week period to 24 July 2005 has been positive and in line with expectations.
Total like-for-like sales in Pub Company were up 1.2 per cent (2.6 per cent
excluding the "Euro 2004 effect") and total like-for-like turnover in Pub
Partners was up 3.6 per cent. Own brewed beer volumes increased by 6 per cent
and Greene King IPA continued its positive momentum, increasing by 8 per cent
whilst Old Speckled Hen and Abbot Ale increased by 12 per cent and 3 per cent
respectively.
Sales were strong, reflecting the quality of the Greene King business, and
margins have remained robust in each of the three trading divisions.
The acquisition of Ridley's was completed by Greene King on 4 July 2005 and the
integration process has been progressing well.
11. Financing of the Offer
The Offer will be financed from new banking facilities arranged by The Royal
Bank of Scotland plc under the Facility Agreement. The maximum cash
consideration payable by the Offeror under the terms of the Offer (assuming all
outstanding options with an exercise price at or below the Offer Price are
capable of being, and are, exercised) will be approximately #189 million.
Whilst the debt facilities described above are sufficient to ensure that the
Offeror has the resources necessary to satisfy in full the consideration payable
under the Offer, it is intended that Greene King will carry out a small equity
placing for cash in order to provide flexibility going forward, details of which
are contained in a separate announcement.
12. Effect of the Offer on the Belhaven Employee Share Schemes
The Offer will be extended to any Belhaven Shares which are issued or
unconditionally allotted and fully paid (or credited as fully paid) while the
Offer remains open for acceptance (or, subject to the City Code, by such earlier
date as the Offeror may decide), including (without limitation) any Belhaven
Shares issued pursuant to the exercise of options or vesting of awards under the
Belhaven Employee Share Schemes. Appropriate proposals will be made to
participants in the Belhaven Employee Share Schemes in due course.
13. Inducement Fee
As an inducement to the Offeror to make the Offer, Belhaven, Greene King and the
Offeror have entered into an agreement under which Belhaven has agreed to pay
Greene King a fee amounting to the lower of one per cent of the value of the
existing issued share capital of Belhaven at the Offer Price and #2 million in
the event that:
- the Directors of Belhaven withdraw or adversely modify their
recommendation of the Offer (other than by reason of failure by Greene King to
comply with its obligations under the City Code) and thereafter the Offer is not
made (with the consent of the Panel), lapses or is withdrawn; or
- any person (other than the Offeror or any person acting in concert with
it) publicly announces an intention to make a competing offer (whether or not
subject to pre-conditions) for the entire ordinary share capital of Belhaven and
the transaction referred to in any other such announcement subsequently becomes
or is declared unconditional in all respects or is completed.
14. De-listing and compulsory acquisition
Once the Offeror has acquired or agreed to acquire, by virtue of its
shareholdings and acceptances of the Offer, Belhaven Shares carrying 75 per cent
or more of the voting rights of Belhaven, it intends to procure that Belhaven
will apply for cancellation, respectively, of the trading in Belhaven Shares on
the London Stock Exchange's market for listed securities and the listing of
Belhaven Shares from the Official List. At least 20 Business Days' notice of
any cancellation of the listing of Belhaven Shares will be given and no such
notice will be published until the Offeror has acquired or agreed to acquire
Belhaven Shares carrying 75 per cent or more of the voting rights as described
above. Delisting would significantly reduce the liquidity and marketability of
any Belhaven Shares not assented to the Offer.
If the Offeror receives acceptances of the Offer in respect of, and/or otherwise
acquires, 90 per cent or more of the Belhaven Shares to which the Offer relates,
the Offeror intends to exercise its rights pursuant to the provisions of
Sections 428 to 430F of the Companies Act to acquire the remaining Belhaven
Shares to which the Offer relates.
15. Dealing disclosure requirements
Under the provisions of Rule 8.3 of the City Code, any person who, alone or
acting together with any other person(s) pursuant to an agreement or
understanding (whether formal or informal) to acquire or control relevant
securities of Belhaven, owns or controls, or becomes the owner or controller,
directly or indirectly, of one per cent or more of any class of securities of
Belhaven is required to disclose, by not later than 12.00 noon (London time) on
the Business Day following the date of the relevant transaction, dealings in
such securities of that company (or in any option in respect of, or derivative
referenced to, any such securities) during the period to the date on which the
Offer becomes or is declared unconditional as to acceptances or lapses or is
otherwise withdrawn.
Under the provisions of Rule 8.1 of the City Code, all dealings in relevant
securities of Belhaven by the Offeror or Belhaven, or by any of their respective
"associates" (within the meaning of the City Code) must also be disclosed.
If you are in any doubt as to the application of Rule 8 to you, please contact
an independent financial adviser authorised under the Financial Services and
Markets Act 2000, consult the Panel's website at www.thetakeoverpanel.org.uk or
contact the Panel on telephone number +44 (0) 207 638 0129; fax number +44 (0)
207 236 7013.
16. General
As at 7.00 a.m. (London time) on 19 August 2005 (the last Business Day prior to
the date of this announcement), Belhaven had 29,944,520 ordinary shares of 10
pence in issue (ISIN number GB0000905397).
Save as disclosed above, neither Greene King, the Offeror nor, so far as Greene
King is aware, any party acting in concert with Greene King or the Offeror, owns
or controls any Belhaven Shares or securities convertible or exchangeable into
Belhaven Shares or any rights to subscribe for or purchase, or holds any options
in respect of, or derivatives referenced to, any such shares ("Belhaven
Securities") nor does any such person have any arrangement in relation to
Belhaven Securities. For these purposes, "arrangement" includes any indemnity
or option arrangement or any agreement or understanding, formal or informal, of
whatever nature, relating to Belhaven Securities which may be an inducement to
deal or refrain from dealing in such securities. In the interests of secrecy
prior to this announcement, Greene King has not made any enquiries in this
respect of certain parties who may be deemed by the Panel to be acting in
concert with it for the purposes of the Offer. Enquiries of such parties will
be made as soon as practicable following the date of this announcement and any
material disclosure in respect of such parties will be included in the Offer
Document.
The Facility Agreement provides that, except with the consent of The Royal Bank
of Scotland plc, neither Greene King nor the Offeror shall decide, declare or
accept that valid acceptances in respect of less than 75 per cent of Belhaven
Shares will satisfy condition 1 of the Offer as set out in Appendix I nor shall
either of them waive that condition unless valid acceptances of at least 75 per
cent of the Belhaven Shares have been received.
The Facility Agreement also provides that if The Royal Bank of Scotland plc
(acting reasonably) states that any undertaking which is proposed to be given
for the purpose of obtaining any authorisation necessary in connection with the
Offer could reasonably be expected to have a material adverse effect on the
business or financial condition of the Greene King Group or its ability to
perform its payment obligations under the Facility Agreement, Greene King shall
promptly request the Panel to agree to the lapsing of the Offer and, if the
Panel so agrees, Greene King shall declare the Offer lapsed at the earliest
opportunity.
The Offer is subject to the requirements of the City Code. The Offer Document
and the Form of Acceptance containing the full terms and conditions of the Offer
(including the Loan Note Alternative and details of how the Offer may be
accepted) will be posted to Belhaven Shareholders (other than to any Belhaven
Shareholders with addresses in Restricted Jurisdictions) as soon as practicable
and, in any event, within twenty-eight days of the date of this announcement
unless agreed otherwise with the Panel. In deciding whether or not to accept
the Offer in respect of their Belhaven Shares, Belhaven Shareholders should rely
on the information contained in, and follow the procedures described in, the
Offer Document and Form of Acceptance.
Enquiries:
Greene King +44 (0) 1284 763 222
Rooney Anand
Michael Shallow
Deutsche Bank +44 (0) 20 7545 8000
Jeremy Quin
Charles Roast
Financial Dynamics +44 (0) 20 7831 3113
Ben Foster
Charles Watenphul
Belhaven +44 (0) 1368 869 105
Stuart Ross +44 (0) 7785 335 700
Ron Robson +44 (0) 7876 500 530
Collins Stewart +44 (0) 20 7523 8350
Seema Paterson
Chris Howard
Binns +44 (0) 20 7786 9600
Peter Binns +44 (0) 7768 392 582
Paul McManus
Terms used in this announcement shall have the meaning given to them in Appendix
IV. The Offer Document and the Form of Acceptance will be posted to Belhaven
Shareholders and, for information only, to participants in the Belhaven Employee
Share Schemes (other than in each case to persons with addresses in Restricted
Jurisdictions), as soon as practicable and, in any event, within twenty-eight
days of this announcement unless otherwise agreed with the Panel.
Deutsche Bank (authorised by Bundesanstalt fur Finanzdienstleistungsaufsicht
(BaFin) and by the Financial Services Authority (FSA)), which is regulated by
the FSA for the conduct of UK business and a member of the London Stock
Exchange, is acting for Greene King and the Offeror and no one else in
connection with the Offer and will not be responsible to anyone other than
Greene King and the Offeror for providing the protections afforded to clients of
Deutsche Bank nor for providing advice in relation to the Offer or any matter
referred to in this announcement.
Collins Stewart, which is regulated by the FSA in the United Kingdom, is acting
for Belhaven and no one else in connection with the Offer and will not be
responsible to anyone other than Belhaven for providing the protections afforded
to clients of Collins Stewart nor for providing advice in relation to the Offer
or any matter referred to in this announcement.
This announcement does not constitute an offer to sell, or an invitation to
purchase, any securities or the solicitation of any vote or approval in any
jurisdiction. The Offer will be made solely by the Offer Document and the Form
of Acceptance which will contain the full terms and conditions of the Offer
(including details of how it may be accepted).
The release, publication or distribution of this announcement in certain
jurisdictions may be restricted by law and therefore persons in any such
jurisdictions into which this announcement is released, published or distributed
should inform themselves about and observe such restrictions.
The ability of Belhaven Shareholders who are not resident in the United Kingdom
to accept the Offer may be affected by the laws of the relevant jurisdictions in
which they are located. Persons who are not resident in the United Kingdom
should inform themselves of, and observe, any applicable requirements.
Copies of this announcement and any formal documentation relating to the Offer
are not being, and must not be, directly or indirectly, mailed or otherwise
forwarded, distributed or sent in or into or from a Restricted Jurisdiction and
persons receiving such documents (including custodians, nominees and trustees)
must not mail or otherwise forward, distribute or send them in or into or from a
Restricted Jurisdiction. The Offer (unless otherwise determined by the Offeror
and permitted by applicable law and regulation), will not be made, directly or
indirectly, in or into, or by the use of mails or any means of instrumentality
(including, without limitation, telephonically or electronically) of interstate
or foreign commerce of, or any facility of, a national, state or other
securities exchange of a Restricted Jurisdiction and the Offer will not be
capable of acceptance by any such use, means, instrumentality or facilities.
In accordance with normal UK market practice, Greene King or the Offeror or
their nominees or broker (acting as agents) may from time to time make certain
purchases of, or arrangements to purchase, Belhaven Shares outside the United
States, other than pursuant to the Offer, before or during the period in which
the Offer remains open for acceptance. These purchases may occur either in the
open market at prevailing prices or in private transactions at negotiated
prices. Any information about such purchases will be disclosed as required in
the UK and communicated in the US by way of an announcement by or on behalf of
the Offeror.
The Offer in the United States is made solely by Greene King. Neither Deutsche
Bank nor any of its affiliates is making the Offer into the United States.
Members of the general public are not eligible to take part in the Placing
referred to in paragraph 11 of this announcement. The Placing and all references
to it are directed only at persons who have professional experience in matters
relating to investments who fall within article 19(1) of the Financial Services
and Markets Act 2000 (Financial Promotions) Order 2001 (as amended) (the "Order
") or are persons falling within article 49(2) (a) to (d) of the Order or to
whom it may otherwise lawfully be communicated (all such persons together being
referred to as "Relevant Persons"). This announcement, in so far relates to the
Placing, must not be acted on or relied on by persons who are not Relevant
Persons. Any investment or inducement activity in so far as relating to
participation in the Placing is available only to Relevant Persons and will be
engaged in only with Relevant Persons.
The Placing Shares have not been and will not be registered under the Securities
Act and, subject to certain exceptions, may not be offered or sold within the
United States. No public offering of Placing Shares will be made in the United
Kingdom, the United States or elsewhere.
The Loan Notes to be issued in connection with the Offer have not been, nor will
they be, registered under the Securities Act or under the securities laws of any
state, territory, district or other jurisdiction of the United States; the
relevant clearances have not been, nor will they be, obtained from the
securities commission or any similar authority of any province or territory of
Canada; no prospectus has been, or will be, lodged with, or registered by, the
Australian Securities and Investments Commission or the Japanese Minister of
Finance; and the Loan Notes have not been, nor will they be, registered under or
offered in compliance with applicable securities laws of any state, province,
territory or jurisdiction of any Restricted Jurisdiction. Accordingly, the Loan
Notes are not being, and may not be offered, sold, resold or delivered, directly
or indirectly, in or into the United States or any Restricted Jurisdiction or
to, or for the account or benefit of, any US person or any person in such
Restricted Jurisdiction.
APPENDIX I
CONDITIONS TO AND CERTAIN FURTHER TERMS OF THE OFFER
The Offer, which will be made by Deutsche Bank on behalf of the Offeror (other
than in the United States where it will be made by the Offeror), will comply
with the City Code and will be governed by English law and be subject to the
jurisdiction of the English courts. In addition, the Offer will be subject to
the terms and conditions set out below and in the Form of Acceptance:
1. valid acceptances of the Offer being received (and not, where
permitted, withdrawn) by no later than 3.00 p.m. (London time) on the first
closing date of the Offer (or such later time(s) and/or date(s) as the Offeror
may, subject to the rules of the City Code, decide) in respect of not less than
90 per cent (or such lesser percentage as the Offeror may decide) of the
Belhaven Shares to which the Offer relates, provided that this condition will
not be satisfied unless the Offeror and/or any member of the Greene King Group
shall have acquired or agreed to acquire (whether pursuant to the Offer or
otherwise) Belhaven Shares carrying in aggregate more than 50 per cent of the
voting rights normally exercisable at a general meeting of Belhaven. For the
purposes of this condition:
1.1. Belhaven Shares which have been unconditionally allotted but not
issued shall be deemed to carry the voting rights which they will carry upon
issue;
1.2. the expression "Belhaven Shares to which the Offer relates" shall
be construed in accordance with Sections 428 to 430F of the Companies Act; and
1.3. valid acceptances shall be deemed to have been received in respect
of Belhaven Shares which are treated for the purposes of Section 429(8) of the
Companies Act as having been acquired or contracted to be acquired by the
Offeror by virtue of acceptances of the Offer;
2. no central bank, government or governmental,
quasi-governmental, supranational, statutory, regulatory or investigative body,
trade agency, court, professional association, or any other such body or person
in any jurisdiction (each a "Third Party") having given notice of a decision to
take, institute or threaten any action, proceeding, suit, investigation, enquiry
or reference, or having required any action to be taken, or otherwise having
done anything, or having enacted, made or proposed any statute, regulation,
decision or order which would:
2.1. make the Offer, its implementation or the acquisition or proposed
acquisition of any Belhaven Shares by the Offeror or any member of the Wider
Greene King Group void, unenforceable or illegal, or restrict, prohibit or delay
to a material extent or otherwise materially interfere with the implementation
of, or impose material additional conditions or obligations with respect to, or
otherwise materially challenge or require material amendment of, the Offer or
the acquisition of any Belhaven Shares by the Offeror;
2.2. result in a material delay in the ability of the Offeror, or
render the Offeror unable, to acquire some or all of the Belhaven Shares or
require a divestiture by the Offeror or any member of the Wider Greene King
Group of any Belhaven Shares;
2.3. require, prevent or delay the divestiture, or alter the terms
envisaged for any proposed divestiture, by the Offeror or any member of the
Wider Greene King Group or by any member of the Wider Belhaven Group of all or
any material part of their respective businesses, assets or properties, or
impose any limitation on their ability to conduct their respective businesses
(or any of them) or to own their respective assets or properties or any part of
them, to an extent in any such case which is material in the context of the
Offer or the Wider Belhaven Group taken as a whole;
2.4. impose any material limitation on, or result in a material delay
in, the ability of the Offeror or any member of the Wider Greene King Group to
acquire or to hold or to exercise effectively, directly or indirectly, all
rights of ownership of shares, loans or other securities (or the equivalent) in
Belhaven or the ability of any member of the Wider Belhaven Group or the Offeror
to hold or exercise effectively any rights of ownership of shares, loans or
other securities in any respect which is material in the context of the Wider
Belhaven Group taken as a whole to exercise management control over any member
of the Wider Belhaven Group;
2.5. save pursuant to the Offer or to Part XIIIA of the Companies Act,
require any member of the Wider Greene King Group or of the Wider Belhaven Group
to acquire or offer to acquire any shares or other securities (or the
equivalent) in any member of the Wider Belhaven Group owned by any third party
where such acquisition would be material in the context of the Offer;
2.6. result in any member of the Wider Belhaven Group ceasing to be
able to carry on business under any name which it presently does so, the
consequences of which would be material in the context of the Wider Belhaven
Group taken as a whole;
2.7. impose any limitation that is material in the context of the
business of the Wider Belhaven Group taken as a whole on the ability of any
member of the Wider Greene King Group or the Wider Belhaven Group to integrate
or co-ordinate the business of any member of the Wider Belhaven Group, or any
part of it, with that of any member(s) of the Wider Greene King Group and/or any
other member of the Wider Belhaven Group;
2.8. otherwise adversely affect the business, assets, liabilities, or
profits or prospects of any member of the Wider Greene King Group or of the
Wider Belhaven Group, to an extent in any such case which is material in the
context of the Wider Belhaven Group taken as a whole,
and all applicable waiting and other time periods during which any such Third
Party could take, institute or threaten any such action, proceeding, suit,
investigation, enquiry or reference or otherwise so intervene having expired,
lapsed or been terminated;
3. all necessary material notifications and filings having been
made in connection with the Offer and all statutory and regulatory obligations
in connection with the Offer in any relevant jurisdiction having been complied
with and all material authorisations, orders, recognitions, grants, consents,
clearances, confirmations, certificates, licences, permissions and approvals ("
Authorisations") deemed reasonably necessary or appropriate by the Offeror in
any relevant jurisdiction for, or in respect of, the Offer and, except pursuant
to Part XIIIA of the Companies Act, the acquisition or the proposed acquisition
of the Belhaven Shares by the Offeror or any member of the Wider Greene King
Group having been obtained in terms reasonably satisfactory to the Offeror from
all appropriate Third Parties, all or any applicable waiting and other time
periods having expired, lapsed or been terminated (as appropriate) and all such
Authorisations (together with all material Authorisations deemed reasonably
necessary or appropriate to carry on the business of any member of the Wider
Belhaven Group) remaining in full force and effect at the time at which the
Offer becomes otherwise unconditional and there being no notice of any intention
to revoke, suspend, restrict, amend or not to renew any such Authorisations
(where in each case, the Authorisations are reasonably necessary or expedient
and where the absence of such Authorisation would have a material adverse effect
on the Wider Belhaven Group taken as a whole or the Wider Greene King Group
taken as a whole);
4. save as disclosed in writing to the Offeror or its advisers by
or on behalf of Belhaven prior to the date of this announcement or save as
publicly announced by any member of the Wider Belhaven Group prior to the date
of this announcement, there being no provision of any arrangement, agreement,
lease, licence, permit or other instrument to which any member of the Wider
Belhaven Group is a party or by or to which any such member or any of its assets
is or may be bound or be subject, which as a consequence of the Offer or the
acquisition or the proposed acquisition by the Offeror or any member of the
Wider Greene King Group of any shares or other securities (or the equivalent) in
Belhaven or because of a change in the control or management of any member of
the Wider Belhaven Group or otherwise, would result in:
4.1. any monies borrowed by, or any other indebtedness, actual or
contingent, of, any member of the Wider Belhaven Group being or becoming
repayable, or being capable of being declared repayable immediately or prior to
their or its stated maturity, or the ability of any such member to borrow monies
or incur any indebtedness being withdrawn or inhibited;
4.2. the creation or enforcement of any mortgage, charge or other
security interest, over the whole or any part of the business, property or
assets of any member of the Wider Belhaven Group or any such mortgage, charge or
other security interest (whenever arising or having arisen) becoming
enforceable;
4.3. any such arrangement, agreement, lease, licence, permit or other
instrument being terminated or adversely modified or affected or any onerous
obligation or liability arising or any adverse action being taken thereunder;
4.4. (other than in the ordinary course of business) any assets or
interests of any member of the Wider Belhaven Group being or falling to be
disposed of or charged or any right arising under which any such asset or
interest could be required to be disposed of or charged;
4.5. any such member of the Wider Belhaven Group ceasing to be able to
carry on business under any name under which it presently does so;
4.6. the value of, or financial or trading position, profits or
prospects of Belhaven or any member of the Wider Belhaven Group being prejudiced
or adversely affected; or
4.7. the creation of any liability (actual or contingent) by any member
of the Wider Belhaven Group,
in each case, to an extent which is material in the context of the Wider
Belhaven Group taken as a whole;
5. save as disclosed in the Annual Report or publicly announced
through a Regulatory Information Service prior to the date of this announcement
or disclosed in writing to the Offeror or its advisers by or on behalf of
Belhaven prior to the date of this announcement, no member of the Wider Belhaven
Group having since 3 April 2005:
5.1. issued or agreed to issue or authorised or announced its intention
to authorise the issue of additional shares of any class, or securities
convertible into, or exchangeable for, or rights, warrants or options to
subscribe for or acquire, any such shares or convertible securities (save as
between members of the Belhaven Group and save for the issue of Belhaven Shares
to employees on the exercise or vesting of options or awards granted under, or
the grant of options or awards under, any of the Belhaven Employee Share
Schemes);
5.2. recommended, declared, paid or made any bonus issue, dividend or
other distribution whether payable in cash or otherwise other than dividends (or
other distributions whether payable in cash or otherwise) lawfully paid or made
to another member of the Belhaven Group;
5.3. implemented, effected, authorised, proposed or announced its
intention to implement, effect or authorise any merger, demerger,
reconstruction, amalgamation, scheme, commitment or acquisition or disposal of
assets or shares (or the equivalent thereof) in any undertaking or undertakings
(save as between members of the Belhaven Group) that are material in the context
of the Belhaven Group taken as a whole or any change in its share or loan
capital (save for the issue of Belhaven Shares to employees on the exercise or
vesting of options or awards granted under any of the Belhaven Employee Share
Schemes);
5.4. (save as between members of the Belhaven Group and other than in
the ordinary course of business) disposed of, or transferred, mortgaged or
created any security interest over any asset or any right, title or interest in
any asset that is material in the context of the Belhaven Group taken as a whole
or authorised the same or announced any intention to do so;
5.5. issued, authorised or announced an intention to authorise the
issue of any debentures or (save for intra-Belhaven Group transactions or
transactions under existing credit arrangements or in the ordinary course of
business) incurred any indebtedness or contingent liability which is material in
the context of the Belhaven Group as a whole;
5.6. entered into or varied or terminated or authorised or announced
its intention to enter into or vary or terminate any contract, arrangement,
agreement, transaction or commitment (whether in respect of capital expenditure
or otherwise) which is of a long term, unusual or onerous nature or magnitude or
which involves or is reasonably likely to involve an obligation of such a nature
or magnitude which is, in any such case, or which is or is likely to be
restrictive on the business of any member of the Wider Belhaven Group, which is,
in any such case, material in the context of the Wider Belhaven Group taken as a
whole;
5.7. entered into or varied to a material extent or authorised,
proposed or announced its intention to enter into or vary to a material extent
the terms of, or make any offer (which remains open for acceptance) to enter
into or vary to a material extent the terms of, any service agreement with any
director or, save for salary increases, bonuses or variations of terms in the
ordinary course, senior executive of Belhaven;
5.8. purchased, redeemed or repaid or announced a proposal to purchase,
redeem or repay any of its own shares or other securities (or the equivalent) or
reduced or made any other change to any part of its share capital, save for any
shares allotted upon the exercise or vesting of options or awards granted under
the Belhaven Employee Share Schemes or as between members of the Belhaven Group;
5.9. waived, compromised or settled any claim which is material in the
context of the Wider Belhaven Group as a whole;
5.10. (save as disclosed on publicly available registers) made any
alteration to its memorandum or articles of association;
5.11. made or agreed or consented to any significant change to the terms
of the trust deeds constituting the pension schemes established for its
directors and/or employees and/or their dependants or to the benefits which
accrue, or to the pensions which are payable, thereunder, or to the basis on
which qualification for or accrual or entitlement to such benefits or pensions
are calculated or determined or to the basis upon which the liabilities
(including pensions) of such pension schemes are funded or made, or agreed or
consented to any change to the trustees involving the appointment of a trust
corporation, to an extent in any such case which is material in the context of
the Offer;
5.12. 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 any business which is material in the context of the Wider
Belhaven Group as a whole;
5.13. (other than in respect of a member which is dormant and was solvent
at the relevant time) taken any corporate action or had any action or
proceedings or other steps instituted against it for its winding-up (voluntary
or otherwise), dissolution or reorganisation or for the appointment of a
receiver, administrator, administrative receiver, trustee or similar officer of
all or any material part of its assets or revenues or any analogous proceedings
in any jurisdiction or appointed any analogous person in any jurisdiction; or
5.14. entered into any agreement, arrangement or commitment or passed any
resolution or made any proposal or announcement with respect to, or to effect,
any of the transactions, matters or events referred to in this condition 5;
6. since 3 April 2005, save as disclosed in the Annual Report or
save as disclosed in writing to any member of the Offeror Group or its advisers
by or on behalf of Belhaven or except as publicly announced by Belhaven (by the
delivery of an announcement to a Regulatory Information Service), in each case
prior to the date of this announcement, there having been:
6.1. no adverse change in the business, assets, financial or trading
position or profits or prospects of, and no liability, contingent or otherwise,
of, any member of the Wider Belhaven Group which is material in the context of
the Wider Belhaven Group taken as a whole; or
6.2. no litigation, arbitration proceedings, prosecution or other legal
proceedings having been announced or instituted by or against or remaining
outstanding against or in respect of any member of the Wider Belhaven Group and
(other than by any competition or anti-trust authority as a result of the Offer)
no enquiry or investigation by or complaint or reference to any Third Party
against or in respect of any member of the Wider Belhaven Group having been
threatened, announced or instituted or remaining outstanding, against or in
respect of any member of the Wider Belhaven Group and which in any such case
might reasonably be expected to have a material adverse effect on the Wider
Belhaven Group taken as a whole;
7. save as publicly announced by the delivery of an announcement
to a Regulatory Information Service prior to the date of this announcement or as
otherwise disclosed in the Annual Report or in writing to the Offeror or its
advisers by or on behalf of Belhaven prior to the date of this announcement, the
Offeror not having discovered that the financial, business or other information
concerning the Wider Belhaven Group publicly announced or disclosed at any time
by or on behalf of any member of the Wider Belhaven Group is misleading in any
material respect, contains a misrepresentation of fact or omits to state a fact
necessary to make the information contained therein not misleading in any
material respect and which is, in any case, material in the context of the Wider
Belhaven Group;
8. save as publicly announced by the delivery of an announcement
by Belhaven to a Regulatory Information Service at any time on or after 1 April
2002 or as otherwise disclosed in the Annual Report or in writing to the Offeror
or its advisers by or on behalf of Belhaven prior to the date of this
announcement, in relation to any release, emission, discharge, disposal or other
fact or circumstance which causes or might reasonably be expected to cause
pollution of the environment or harm to human health, no past or present member
of the Wider Belhaven Group having, in any manner or to an extent which is
material in the context of the Wider Belhaven Group (i) committed any violation
of any laws, statutes, ordinances or regulations of any jurisdiction and/or (ii)
incurred any liability (whether actual or contingent) with respect thereto.
Subject to the requirements of the Panel, the Offeror reserves the right to
waive, in whole or in part, all or any of the above conditions 2 to 8.
If the Offeror is required by the Panel to make an offer for Belhaven Shares
under the provisions of Rule 9 of the City Code, the Offeror may make such
alterations to any of the above conditions including condition 1 above, as are
necessary to comply with the provisions of that Rule.
The Offer will lapse unless all of the conditions set out above have been
fulfilled or, where permitted, waived or, where appropriate, have been
determined by the Offeror to be or remain satisfied, by midnight on the 21st day
after the later of the first closing date of the Offer and the date on which
condition 1 is fulfilled (or in each case such later date as the Offeror may,
with the consent of the Panel, decide). The Offeror shall be under no
obligation to waive (if capable of waiver), to determine to be or remain
satisfied or to treat as fulfilled any of conditions 2 to 8 (inclusive) by a
date earlier than the latest date specified above for the fulfilment of that
condition.
The Offer will lapse (unless otherwise agreed by the Panel) if, before the later
of 3:00 p.m. (London time) on the first closing date of the Offer and the date
when the Offer becomes or is declared unconditional as to acceptances, the Offer
or any part of it is referred to the Competition Commission. If the Offer so
lapses, the Offer will cease to be capable of further acceptance and accepting
Belhaven Shareholders and the Offeror shall cease to be bound by any Forms of
Acceptance submitted before the time when the Offer lapses.
The Belhaven Shares will be acquired under the Offer free from all liens,
equities, charges, encumbrances and other interests and together with all rights
attaching thereto.
APPENDIX II
BASES AND SOURCES OF INFORMATION
(a) The value placed by the Offer on the existing issued share
capital of Belhaven (approximately #187 million) is based on 29,944,520 Belhaven
Shares in issue on 19 August 2005, the last Business Day prior to the date of
this announcement.
(b) The Closing Prices of the Belhaven Shares referred to in this
document are derived from the Daily Official List.
(c) Unless otherwise stated, the financial information relating to
the Belhaven Group is extracted from the audited consolidated financial
statements of the Belhaven Group for the relevant period.
(d) Unless otherwise stated, the financial information relating to
the Greene King Group is extracted from the audited consolidated financial
statements of the Greene King Group for the relevant period.
APPENDIX III
PARTICULARS OF THE LOAN NOTE ALTERNATIVE
The Loan Note Alternative will be conditional upon the Offer becoming
unconditional in all respects.
Save as stated below and subject to the terms which will be set out in the Offer
Document, Belhaven Shareholders outside the United States and any Restricted
Jurisdiction who validly accept the Offer may elect to receive, in exchange for
those Belhaven Shares in respect of which they make a valid election, Loan Notes
instead of the cash to which they would otherwise have been entitled under the
Offer on the basis of #1 in nominal value of Loan Notes for every #1 in cash
which they would otherwise have received.
The Loan Notes will be issued in integral multiplies of #1 and the balance of
any entitlement that is not a whole multiple of #1 will be disregarded and not
issued.
Unless the Offeror decides otherwise, no Loan Notes will be issued by the
Offeror unless, on or before the date on which the Offer becomes or is declared
unconditional in all respects, the aggregate nominal value of all Loan Notes to
be issued as a result of valid elections for the Loan Note Alternative is not
less than #5 million. If such aggregate is less than #5 million, any such
election shall, unless the Offeror decides otherwise, be void and, provided the
acceptance of the Offer is otherwise valid, the relevant Belhaven Shareholders
will be deemed to have accepted the Offer.
The Loan Notes and the instrument creating the Loan Notes will be governed by
and construed in accordance with English law and will be unsecured obligations
of the Offeror, guaranteed by The Royal Bank of Scotland plc as to principal
only.
The Loan Notes to be issued in connection with the Offer have not been, nor will
they be, registered under the Securities Act or under the securities laws of any
state, territory, district or other jurisdiction of the United States; the
relevant clearances have not been, nor will they be, obtained from the
securities commission or any similar authority of any province or territory of
Canada; no prospectus has been, or will be, lodged with, or registered by, the
Australian Securities and Investments Commission or the Japanese Ministry of
Finance; and the Loan Notes have not been, nor will they be, registered under or
offered in compliance with applicable securities laws of any state, province,
territory or jurisdiction of any Restricted Jurisdiction. Accordingly, the Loan
Notes are not being, and may not be offered, sold, resold or delivered, directly
or indirectly, in or into the United States or any Restricted Jurisdiction or
to, or for the account or benefit of, any US person or any person in any such
Restricted Jurisdiction.
APPENDIX IV
DEFINITIONS
The following definitions apply throughout this announcement unless the context
otherwise requires:
Annual Report the annual report and accounts of Belhaven
for the 53 weeks ended 3 April 2005
Authorisations has the meaning given to it in condition 3
of Appendix I
Belhaven The Belhaven Group plc
Belhaven Drinks the brewing and drinks distribution
activities of Belhaven
Belhaven Employee Share Schemes all or (where the context permits) any of
the Belhaven Long Term Incentive Plan, the
Belhaven Approved Executive Share Option
Scheme, the Belhaven Unapproved Executive
Share Option Scheme and the Belhaven
Approved Savings-Related Share Option
Scheme
Belhaven Group Belhaven and its subsidiaries and
subsidiary undertakings
Belhaven Pubs the pub retailing and tenanted estate
management activities of Belhaven
Belhaven Shares the existing issued or unconditionally
allotted and fully paid (or credited as
fully paid) ordinary shares of 10 pence
each in the capital of Belhaven and any
further such shares which are
unconditionally allotted or issued fully
paid while the Offer remains open for
acceptance or, subject to the provisions
of the City Code, by such earlier date as
the Offeror may determine
Belhaven Shareholder a holder of a Belhaven Share
Binns Binns & Co PR Ltd
Brewing Company the Brewing division of the Greene King
Group
Business Day a day on which the London Stock Exchange
is open for normal business
City Code The City Code on Takeovers and Mergers
Closing Price the closing middle-market quotation of a
Belhaven Share on a particular day as
derived from the Daily Official List
Collins Stewart Collins Stewart Limited
Companies Act the Companies Act 1985 (as amended)
Daily Official List the daily official list of the London
Stock Exchange
Deutsche Bank Deutsche Bank AG, London Branch
Directors of Belhaven the board of directors of Belhaven
Directors of Greene King the board of directors of Greene King
EBITDA earnings before interest, tax,
depreciation and amortisation
Facility Agreement the agreement dated 21 August 2005
between, amongst others, Greene King, the
Offeror and, as bookrunner, mandated lead
arranger, agent and original bank, The
Royal Bank of Scotland plc under which the
new facilities to satisfy the cash
consideration under the Offer will be
provided by The Royal Bank of Scotland plc
Form of Acceptance the form of acceptance, election and
authority relating to the Offer
accompanying the Offer Document
FSA or Financial Services Authority the Financial Services Authority acting in
its capacity as the competent authority
for the purposes of Part VI of the
Financial Services and Markets Act 2000
Greene King Greene King plc
Greene King Group Greene King and its subsidiaries and
subsidiary undertakings
Laurel 432 pubs comprising the Laurel
neighbourhood estate acquired by the
Greene King Group in 2004
LIBOR London Interbank Offered Rate
Loan Note Alternative the alternative to be made available under
the Offer under which Belhaven
Shareholders (other than certain overseas
shareholders) who validly accept the Offer
may elect to receive Loan Notes instead of
all or part of the cash consideration to
which they would otherwise be entitled
under the Offer
Loan Notes the guaranteed unsecured loan notes to be
issued by the Offeror pursuant to the Loan
Note Alternative
London Stock Exchange London Stock Exchange plc
Offer the recommended cash offer to be made by
Deutsche Bank on behalf of the Offeror
(and in the United States by the Offeror)
to acquire all of the Belhaven Shares not
already owned by any member of the Greene
King Group on the terms and subject to the
conditions set out in the Offer Document
and the Form of Acceptance (including,
where the context so requires, the Loan
Note Alternative and any subsequent
revision, variation, extension or renewal
of such offer)
Offer Document the document to be posted to Belhaven
Shareholders (and, for information only,
to participants in the Belhaven Employee
Share Schemes) containing the full terms
and conditions of the Offer
Offer Price 625 pence per Belhaven Share
Offeror Greene King Acquisitions No.2 Ltd, a
wholly-owned subsidiary of Greene King
Official List the Official List maintained by the
Financial Services Authority
Panel the Panel on Takeovers and Mergers
Placing the placing of the Placing Shares
Placing Shares the 3,627,000 million new ordinary shares
of 25p each in the share capital of Greene
King being placed pursuant to the Placing
Pounds Sterling or # UK pounds sterling (and references to
"pence" shall be construed accordingly)
Pub Company the managed house division of the Greene
King Group
Pub Partners the tenanted and leased pub division of
the Greene King Group
Regulatory Information Service any of the services set out in Appendix 3
to the Listing Rules of the FSA from time
to time
Restricted Jurisdiction Australia, Canada, Japan or any
jurisdiction where extension or acceptance
of the Offer would violate the law of that
jurisdiction
Securities Act the US Securities Act of 1933, as amended
subsidiary, subsidiary undertaking, have the meanings given by the Companies
associated undertaking and undertaking Act (but for these purposes ignoring
paragraph 20(1)(b) of Schedule 4A to the
Companies Act)
substantial interest a direct or indirect interest in 20 per
cent or more of the equity capital of an
undertaking
Third Party has the meaning given in condition 2 of
Appendix I
United Kingdom or UK the United Kingdom of Great Britain and
Northern Ireland
United States or US the United States of America, its
possessions and territories, all areas
subject to its jurisdiction or any
subdivision thereof, any state of the
United States and the District of Columbia
Wider Belhaven Group Belhaven and its subsidiary undertakings,
associated undertakings and any other
undertakings in which Belhaven and/or such
undertakings (aggregating their interests)
have a substantial interest
Wider Greene King Group Greene King and its subsidiary
undertakings, associated undertakings and
any other undertakings in which Greene
King and/or such undertakings (aggregating
their interests) have a substantial
interest
This information is provided by RNS
The company news service from the London Stock Exchange
END
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