RNS Number:7766T
James Reed & Partners PLC
08 November 2005
This announcement is not for release, publication or distribution in or into or
from the United States, Canada, Australia, Japan or any other jurisdiction if to
do so would constitute a violation of the relevant laws of such jurisdiction.
Embargoed for release at 7.00 a.m. (London Time) 8 November 2005
CASH OFFERS
by
ALTIUM CAPITAL LIMITED
on behalf of
JAMES REED & PARTNERS PLC
for
REED HEALTH GROUP PLC
Summary
*James Reed & Partners plc ("James Reed & Partners") announces the terms
of cash offers, to be made by Altium Capital Limited on its behalf, to
acquire the whole of the issued and to be issued share capital of Reed
Health.
*The Offers are being made on the following basis:
for each Reed Health Ordinary Share 55p in cash
for each Reed Health "B" Share 55p in cash
A Loan Note Alternative will also be made available.
* The Offers value the existing issued share capital of Reed Health at
approximately #32.8 million and represent:
* a premium of approximately 50.7 per cent. to the Closing Price of 36.5p
per Reed Health Ordinary Share on 7 November 2005, being the last business
day prior to the date of this announcement; and
* a premium of approximately 30.3 per cent. to the average Closing Price
of 42.2p per Reed Health Ordinary Share for the six month period ending 7
November 2005, being the last business day prior to the date of this
announcement.
* In aggregate, James Reed & Partners has received irrevocable
undertakings to accept the Offers in respect of 8,091,748 Reed Health
Ordinary Shares and 26,827,500 Reed Health 'B' Shares, representing
approximately 24.7 per cent. of the Reed Health Ordinary Shares and
approximately 99.9 per cent. of the Reed Health 'B' Shares, respectively,
which together represent approximately 58.5 per cent. of the entire issued
share capital and voting rights of Reed Health.
* Prior to the announcement of the Offers, James Reed & Partners and its
advisers engaged the Independent Directors of Reed Health in discussions
with the objective of reaching agreement on a recommended transaction at 55p
in cash per Reed Health Share. However, the Independent Directors of Reed
Health concluded that they would not recommend the Offers.
* Altium Capital Limited is acting as financial adviser to James Reed &
Partners.
Commenting on the Offers, James Reed said:
"We strongly believe that the Offers represent a full and fair value for Reed
Health and provide Reed Health Shareholders with the certainty of realising
their investment in Reed Health for cash at a significant premium to the current
share price."
This summary should be read in conjunction with, and is subject to, the full
text of the attached announcement. The Offers will be subject to the conditions
set out in Appendix I to this announcement and to the full terms and conditions
set out in the Offer Document and the Forms of Acceptance.
Enquiries:
James Reed & Partners plc
James Reed / Derek Beal Tel: 020 7616 2301
Altium Capital Limited
Garry Levin / Tim Richardson / Marc Milmo Tel: 020 7484 4040
Smithfield Consultants
Katie Hunt Tel: 07884 494112
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 Offers will be made solely by the Offer Document and the Forms
of Acceptance, which will contain the full terms and conditions of the Offers
(including details of how they 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 any applicable requirements.
The Offers (including the Loan Note Alternative) will not be made, directly or
indirectly, in, into or from the United States, or by use of the United States
mails, or by any means or instrumentality (including, without limitation,
facsimile transmission, telex, telephone or e-mail) of United States interstate
or foreign commerce, or any facility of a national securities exchange of the
United States, Canada, Australia or Japan. Accordingly, this announcement,
copies of this announcement and any related documents are not being and must not
be mailed or otherwise distributed or sent in, into or from the United States,
Canada, Australia or Japan and persons receiving this document and any related
documents (including custodians, nominees and trustees) must not mail or
otherwise forward, distribute or send them in, into or from the United States,
Canada, Australia or Japan. All Reed Health Shareholders (including nominees,
trustees or custodians) who would, or otherwise intend to forward this document,
should inform themselves about and observe any applicable requirement.
In accordance with normal UK market practice, James Reed & Partners or its
nominees or broker (acting as agents) may from time to time make certain
purchases of, or arrangements to purchase, Reed Health Ordinary Shares, other
than pursuant to the Ordinary Offer, before or during the period in which the
Ordinary 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 by way of an announcement by or on behalf of James Reed & Partners.
Altium Capital Limited, which is authorised and regulated in the United Kingdom
by the Financial Services Authority, is acting exclusively for James Reed &
Partners as financial adviser within the meaning of the Rules of the Financial
Services Authority and for no one else in connection with the Offers. Altium
Capital Limited is not advising any other person or treating any other person as
its client in relation thereto and will not be responsible to anyone other than
James Reed & Partners for providing the protections afforded to clients of
Altium Capital Limited, or for giving advice to any other person in relation to
the Offers, the contents of this announcement or any other matter referred to
herein.
Altium Capital Limited has given and not withdrawn its written consent to the
issue of this announcement with the inclusion herein of the references to its
name in the form and context in which they appear.
8 November 2005
This announcement is not for release, publication or distribution in or into or
from the United States, Canada, Australia, or Japan or any other jurisdiction if
to do so would constitute a violation of the relevant laws of such jurisdiction
CASH OFFERS
by
ALTIUM CAPITAL LIMITED
on behalf of
JAMES REED & PARTNERS PLC
for
REED HEALTH GROUP PLC
1. Introduction
The James Reed & Partners Directors hereby announce the terms of cash offers of
55p per Reed Health Share, to be made by Altium on behalf of James Reed &
Partners, for the entire issued and to be issued share capital of Reed Health.
2. The Offers
The Offers, which will be subject to the terms and conditions set out in
Appendix 1 to this announcement and any further terms to be set out in the Offer
Document and the Forms of Acceptance, will be made on the following basis:
(a) The Ordinary Offer
For each Reed Health Ordinary Share 55p in cash
(b) The 'B' Ordinary Offer
For each Reed Health 'B' Share 55p in cash
The Offers value the whole of the issued ordinary share capital of Reed Health
at approximately #32.8 million. The Offers represent a premium of approximately:
*50.7 per cent. to the Closing Price of 36.5p for each Reed Health
Ordinary Share on 7 November 2005, the last trading day prior to this
announcement;
*30.3 per cent. to the average Closing Price of 42.2p for each Reed Health
Share for the six month period prior to and including 7 November 2005, the
last trading day prior to this announcement.
The Reed Health 'B' Shares are not traded on the London Stock Exchange or listed
on the Official List, but their class rights are identical to those of the Reed
Health Ordinary Shares, save for certain restrictions on transfer.
3. The Loan Note Alternative
As an alternative to the cash consideration payable under the Offers, Reed
Health Shareholders (other than Reed Health Shareholders in the United States or
any other Restricted Jurisdiction) accepting the Offers may elect (in respect of
all of their holdings of Reed Health Ordinary Shares and/or Reed Health 'B'
Shares) to receive Loan Notes on the following basis:
for every #1 of #1 nominal of Loan Notes issued on completion plus the right to
cash receive potential further consideration in the form of
consideration additional Loan Notes ("Earn Out Rights")
The Loan Notes, which will be governed by English law, will be issued, credited
as fully paid, in amounts and integral multiples of #1 nominal value (fractional
entitlements will be disregarded and satisfied in cash). The Loan Notes will be
unsecured obligations of James Reed & Partners and will not be guaranteed
(either as to principal or interest).
The Loan Notes will bear interest (from the date of issue to the relevant holder
of Loan Notes) payable quarterly in arrears on 31 March, 30 June, 30 September
and 31 December at a rate of one per cent above LIBOR determined on the first
business day of each interest period. The first interest payment date will be 31
March 2006 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 Loan
Note holder) in whole (but not in part) on interest payment dates commencing on
31 March 2008. 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 only be transferable to family or a family trust of a Loan
Note holder (if an individual) or to an associated company of a Loan Note holder
(if a corporate). No application will be made for the Loan Notes to be listed
on, or dealt on, any stock exchange or other trading facility.
The Loan Note Alternative will be conditional on the Offers becoming or being
declared unconditional in all respects and will remain open for acceptance so
long as the Offers remain open for acceptance.
4. Earn Out Rights
The holders of Earn Out Rights ("Rights Holders") will be entitled to receive
additional Loan Notes ("Earn Out Loan Notes") the value of which is dependent
upon the future financial performance of Reed Health.
Each Rights Holder will be entitled to receive a pro rata proportion of Earn Out
Loan Notes with an aggregate value calculated on the following basis:
Year Ending Earn Out as a proportion of Reed Health pre-tax profit/loss
31 December 2007 15 per cent.
31 December 2008 15 per cent.
31 December 2009 20 per cent.
31 December 2010 20 per cent.
Each Earn Out Right will only vest once Reed Health has achieved pre-tax profit
in any of the years ending 31 December 2006 to 31 December 2010 (inclusive) of
at least #2.5 million (the "Profitability Threshold").
On the assumption that the Profitability Threshold has been reached in any year
between 2007 and 2010, each Rights Holder will have the option to exercise their
Earn Out Right and receive their pro rata value of Earn Out Loan Notes
(following which that Rights Holder will cease to be entitled to receive further
Earn Out Rights) or to elect to accrue their entitlement to Earn Out Loan Notes.
In the event that Reed Health makes a loss in any relevant year, those Rights
Holders who have elected to accrue their entitlement to Earn Out Loan Notes
shall bear a deduction from their Earn Out Loan Note entitlement, on a pro rata
basis, based on the relevant percentage of the loss incurred during that year.
Rights Holders can only exercise their Earn Out Rights on one occasion.
5. Irrevocable undertakings to accept the Offers
James Reed and other Reed Family members and their respective family trusts have
irrevocably undertaken to accept the Offers and elect for the Loan Note
Alternative in respect of their entire beneficial and non-beneficial holdings of
5,377,171 Reed Health Ordinary Shares, representing 16.4 per cent of the Reed
Health Ordinary Shares, and 26,827,500 Reed Health 'B' Shares, representing 99.9
per cent. of the Reed Health 'B' Shares, which together represent approximately
54.0 per cent. of the entire issued share capital, and of the voting rights, of
Reed Health.
In addition, James Reed & Partners has received an irrevocable undertaking from
Personal Pension Management Limited, the trustee of the Alec Reed pension fund,
to accept the Ordinary Offer and elect for the Loan Note Alternative in respect
of its entire holding of 750,000 Reed Health Ordinary Shares, which represents
approximately 2.3 per cent. of the Reed Health Ordinary Shares, and
approximately 1.3 per cent. of the entire issued share capital, and of the
voting rights, of Reed Health.
James Reed & Partners has also received an irrevocable undertaking from Eagle
Trustees Limited, the trustee of the Reed Executive plc employee benefit trust,
to accept the Ordinary Offer in respect of its holding of 1,964,577 Reed Health
Ordinary Shares, which represents approximately 6.0 per cent. of the Reed Health
Ordinary Shares and approximately 3.3 per cent. of the entire issued share
capital, and of the voting rights, of Reed Health.
Accordingly, in aggregate, James Reed & Partners has received irrevocable
undertakings to accept the Offers in respect of 8,091,748 Reed Health Ordinary
Shares (representing approximately 24.7 per cent. of the Reed Health Ordinary
Shares) and 26,827,500 Reed Health 'B' Shares (representing approximately 99.9
per cent. of the Reed Health 'B' Shares) which together represent approximately
58.5 per cent. of the entire issued share capital and voting rights of Reed
Health.
All of the irrevocable undertakings referred to above will remain binding even
in the event of a higher competing offer being made by a third party for Reed
Health unless the Offers lapse or are withdrawn.
6. Explanation for the absence of a recommendation
James Reed & Partners initially contacted Reed Health on 15 August 2005, with a
view to obtaining a recommendation for the Offers from the Independent
Directors. Despite efforts by James Reed & Partners to accommodate certain
proposals made by the Independent Directors, the Independent Directors concluded
that they would not recommend the Offers. For the reasons set out in paragraph 9
below, James Reed & Partners believes that the Offers represent value for Reed
Health Shareholders at a significant premium to the prevailing price of a Reed
Health Ordinary Share and that Reed Health Shareholders should be allowed to
reach their own decision on the Offers.
7. Information on Reed Health
The principal activities of Reed Health are the provision of temporary and
permanent recruitment services in the healthcare, social care and medical
industries and consultancy and management services.
Reed Health announced its preliminary results statement for the financial year
ended 30 June 2005 on 27 September 2005. In the Preliminary Statement Reed
Health reported turnover on continuing activities of #89.95 million (2004:
#104.82 million) and a loss before tax for the financial year of #2.13 million
(2004: profit of #0.63 million). Basic and diluted losses per share were 3.56p
(2004: earnings per share of 1.05p).
In the Preliminary Statement, commenting on the outlook for Reed Health, the
Chairman of Reed Health stated that:
"The potential for providing specialist staff for the Social Care and Health
markets is substantial and we believe that both local and national government
will continue to outsource to private sector partners. However, these markets
are undergoing a fundamental transition and will remain volatile for the
foreseeable future.
Gross Margins will be increasingly depressed by competitive and contractual
pressures and will demand a substantial improvement in business efficiency
within the Group to enhance gross margin conversion into profit.
Reed Health Group is committed to the public sector's objectives of value for
money and the highest standards of compliance and will seek to be a provider of
first choice. The growing regulatory and contractual environment within our
markets will provide the potential for large scale volume gains and lead to
polarisation of staffing providers. The Group now has the breadth and quality of
candidates, systems and customer service and the management team and staff to
drive growth through contract gains, and the Board expects a gradual and
sustainable improvement in earnings."
8. Information on James Reed & Partners
James Reed & Partners was incorporated on 31 March 2003 for the purpose of
acquiring Reed Executive plc, a provider of temporary and permanent recruitment
services. Following completion of the acquisition of Reed Executive plc, James
Reed & Partners de-merged a number of trading entities (previously contained
within the Reed Executive plc group) into a number of independent trading
businesses, all of which are directly owned by the shareholders of James Reed &
Partners. Following these transactions, James Reed & Partners continues to
provide recruitment services into the UK and the Republic of Ireland and to
manage the 'Reed' brand. Since 31 December 2004, the last date to which James
Reed & Partners published full year accounts, the business has been adversely
affected by a review of the charging mechanism for services to related
companies. James Reed & Partners is controlled by the Reed Family.
9. Background to and reasons for the Offers
Reed Health was a company formed on the de-merger of the health recruitment
business of Reed Executive plc. It was admitted to the Official List in July
2001 with the objectives of focusing exclusively on the healthcare staffing
markets and giving greater autonomy and flexibility to its management to take
advantage of the considerable opportunities then perceived to exist in those
markets. The Reed Family has retained a majority and controlling shareholding in
Reed Health since its admission to the Official List.
Over the last three years, shareholder value in Reed Health has substantially
diminished. It is due to this and the current indifferent market sentiment
towards Reed Health, that the James Reed & Partners Directors believe that the
benefits to Reed Health of maintaining its listing have been significantly
eroded and that the financial, managerial and regulatory costs of so doing are
an unnecessary burden on the company.
Moreover, the James Reed & Partners Directors believe that the acquisition of
Reed Health by James Reed & Partners will enable Reed Health Shareholders to
realise their investment in Reed Health for cash, at a significant premium to
the current price of Reed Health Ordinary Shares, at a time when the market for
Reed Health's services has become increasingly competitive, resulting in ongoing
pressures on margin and profitability.
Upon completion of the Offers, the James Reed & Partners Directors intend to
continue to provide specialist staff for the social care and health markets,
away from the constraints of the public market. There is no present intention
for any major changes to be introduced in the business or for the redeployment
of any fixed assets of Reed Health.
The Offers of 55p in cash for each Reed Health Ordinary Share and 55p in cash
for each Reed Health 'B' Share value the issued share capital of Reed Health at
approximately #32.8 million. The Offers represent a premium of approximately
50.7 per cent. over the Closing Price for Reed Health Ordinary Shares of 36.5p
on 7 November 2005, being the last business day prior to the date of this
announcement.
10. Dividend
Should the Offers become or be declared unconditional in all respects prior to
the intended payment date of the proposed final dividend announced in the
Preliminary Statement of 0.25p per Reed Health Share, it is the intention of the
James Reed & Partners Directors that this dividend will not be paid to Reed
Health Shareholders. If any dividend or other distribution is declared paid or
made on or after the date of this announcement, James Reed & Partners reserves
the right to reduce the Offer Price by the amount of such dividend or
distribution.
11. Reed Health 'B' Shares pre emption rights
The Articles currently prohibit, subject to certain limited exceptions, the
transfer of the Reed Health 'B' Shares by Reed Health 'B' Shareholders unless
those shares have first been offered to other Reed Health 'B' Shareholders. In
order to enable the 'B' Ordinary Offer to be completed, the pre-emption
provision set out in Article 38 of the Articles will need to be complied with or
the Articles will require amendment to permit the holders of Reed Health 'B'
Shares to accept the 'B' Ordinary Offer. The amendment to the Articles is
therefore necessary to facilitate the transfer of Reed Health 'B' Shares
pursuant to the 'B' Ordinary Offer. The Reed Family intends to serve a notice on
the Reed Health Directors, requisitioning an extraordinary general meeting of
the Reed Health Shareholders to amend the Articles to remove Article 38.
12. Reed Health Share Option Schemes
The Offers will extend to any Reed Health Shares issued or unconditionally
allotted and fully paid (or credited as fully paid) whilst the Offers remain
open for acceptance (or until such earlier date as, subject to the City Code,
James Reed & Partners may decide, being not earlier than the date on which the
Offers become or are declared unconditional as to acceptances, or if later, the
final closing date of the Offers), including those allotted or issued as a
result of the exercise of options under the Reed Health Share Option Schemes.
13. Reed Health management and employees
If the Offers become or are declared unconditional in all respects, the existing
employment rights, including pension rights, of all Reed Health's employees will
be fully safeguarded.
14. Financing of the Offers
In light of the irrevocable undertakings to elect for the Loan Note Alternative,
full acceptance of the Offers, assuming the exercise of all outstanding options
with an exercise price of less than 55p per Reed Health Ordinary Share under the
Reed Health Share Option Schemes before the Offers close, will result in the
payment of approximately #15.68 million in cash.
The cash consideration payable under the terms of the Offers is to be financed
from the internal cash resources of the James Reed & Partners Group.
15. De-listing and compulsory acquisition
It is intended that, following the Offers becoming or being declared
unconditional in all respects, and subject to any applicable requirements of the
London Stock Exchange and/or the FSA, James Reed & Partners will procure that
Reed Health applies to the London Stock Exchange and the FSA for the
cancellations, respectively, of the trading of Reed Health Ordinary Shares on
the London Stock Exchange and of the listing of the Reed Health Ordinary Shares
on the Official List. It is anticipated that such cancellations will, subject to
the Listing Rules and the Rules of the FSA, take effect not less than 20
business days after the Offers become or are declared unconditional in all
respects. James Reed & Partners will make an announcement when the Offers become
or are declared wholly unconditional in all respects and such announcement will
include a statement of James Reed & Partners' intention regarding the
cancellations of trading of the Reed Health Ordinary Shares on the London Stock
Exchange and of the listing on the Official List. Such cancellations would
significantly reduce the liquidity and marketability of any Reed Health Ordinary
Shares in respect of which acceptances of the Offers have not been submitted.
It is further intended that, following the Offers becoming or being declared
unconditional in all respects and following the cancellation of the admission to
trading and of the listing referred to above, Reed Health will be re-registered
as a private company under the relevant provisions of the Companies Act.
If James Reed & Partners receives acceptances under the Offers in respect of,
and/or otherwise acquires, 90 per cent. or more of the Reed Health Ordinary
Shares to which the Ordinary Offer will relate and/or Reed Health 'B' Shares to
which the 'B' Ordinary Offer will relate, and the Offers become or are declared
unconditional in all respects, James Reed & Partners intends to exercise its
rights pursuant to the provisions of sections 428 to 430F (inclusive) of the
Companies Act to acquire compulsorily Reed Health Ordinary Shares and/or Reed
Health 'B' Shares in respect of which acceptances have not then been received.
16. Dealing disclosure requirements
Under the provisions of Rule 8.3 of the City Code, if a person is, or becomes,
"interested" (directly or indirectly) in one per cent. or more of any class of
"relevant securities" of Reed Health, all "dealings" in any "relevant
securities" of that company (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 p.m. (London time) on the business day following
the date of the relevant transaction. This requirement will continue until the
date on which the Offers become, or are 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 Reed Health, 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 Code, all "dealings" in "relevant
securities" of Reed Health by James Reed & Partners or Reed Health, or by any of
their respective "associates", must be disclosed by no later than 12.00 noon
(London time) on the 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 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.
17. General
The Offers will be made on the terms and subject to the conditions which are set
out in Appendix I to this announcement and on the further terms that will be set
out in the Offer Document and the Forms of Acceptance and such further terms as
may be required to comply with the provisions of the City Code.
James Reed & Partners intend that the Offer Document setting out the details of
the Offers will be posted to Reed Health Shareholders as soon as reasonably
practicable and in any event within 28 days of the date of this announcement.
This announcement does not constitute an offer or an invitation to purchase any
securities.
Details of the sources and bases of information in respect of the information
contained in this announcement are contained in Appendix II to this
announcement. Appendix III to this announcement contains details of the
interests in Reed Health Shares of the James Reed & Partners Directors, their
close relatives and related trusts, and persons acting in concert with James
Reed & Partners. Appendix IV to this announcement contains definitions of
certain expressions used in this announcement.
Save as disclosed in Appendix III to this announcement, as at 7 November 2005,
the last business day prior to this announcement, neither James Reed & Partners,
nor any of its directors, their close relatives and related trusts, nor, so far
as James Reed & Partners are aware, any party acting in concert with James Reed
& Partners, owned or controlled Reed Health Shares or held any options to
purchase Reed Health Shares or had entered into any derivative referenced to
Reed Health Shares which remains outstanding. In the interests of
confidentiality, James Reed & Partners has not made enquires in this respect of
certain parties who may be presumed by the Panel to be acting in concert with it
for the purposes of the Offers.
The availability of the Offers to persons not resident in the United Kingdom may
be affected by the laws of the relevant jurisdictions. Persons who are not
resident in the United Kingdom should inform themselves about and observe any
applicable requirements.
Enquiries:
James Reed & Partners plc
James Reed / Derek Beal Tel: 020 7616 2301
Altium Capital Limited
Garry Levin / Tim Richardson / Marc Milmo Tel: 020 7484 4040
Smithfield Consultants
Katie Hunt Tel: 07884 494112
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 Offers will be made solely by the Offer Document and the Forms
of Acceptance which will contain the full terms and conditions of the Offers
(including details of how they 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 any applicable requirements.
The James Reed & Partners Directors accept responsibility for the information
contained in this announcement, save that the only responsibility accepted by
them in respect of the information in this document relating to the Reed Health
Group, which has been compiled from public sources, is to ensure that such
information has been correctly and fairly reproduced and presented. Subject to
the aforesaid, to the best of the knowledge and belief of the James Reed &
Partners Directors (who have taken all reasonable care to ensure that such is
the case), the information contained herein is in accordance with the facts and
does not omit anything likely to affect the import of such information.
The Offers will not be made, directly or indirectly, in or into the United
States, or by use of the United States mails, or by any means or instrumentality
(including, without limitation, facsimile transmission, telex, telephone or
e-mail) of United States interstate or foreign commerce, or any facility of a
United States national securities exchange nor will it be made in Canada,
Australia or Japan. Accordingly, this announcement and copies of this
announcement must not be mailed or otherwise distributed or sent in, into or
from the United States, Canada, Australia or Japan and persons receiving this
announcement must not distribute or send it in, into or from the United States,
Canada, Australia or Japan.
In accordance with normal UK market practice, James Reed & Partners or its
nominees or broker (acting as agents) may from time to time make certain
purchases of, or arrangements to purchase, Reed Health Ordinary Shares, other
than pursuant to the Ordinary Offer, before or during the period in which the
Ordinary 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 by way of an announcement by or on behalf of James Reed & Partners.
Altium Capital Limited, which is authorised and regulated in the United Kingdom
by the Financial Services Authority, is acting exclusively for James Reed &
Partners as financial adviser within the meaning of the Rules of the Financial
Services Authority and for no one else in connection with the Offers. Altium
Capital Limited is not advising any other person or treating any other person as
its client in relation thereto and will not be responsible to anyone other than
James Reed & Partners for providing the protections afforded to clients of
Altium Capital Limited, or for giving advice to any other person in relation to
the Offers, the contents of this announcement or any other matter referred to
herein.
Altium Capital Limited has given and not withdrawn its written consent to the
issue of this announcement with the inclusion herein of the references to its
name in the form and context in which they appear.
If you are in any doubt about the action you should take, you are recommended to
seek your own personal financial advice immediately from your stockbroker, bank
manager, solicitor, accountant or independent financial adviser authorised under
the Financial Services and Market Act 2000 if you are a resident of the United
Kingdom or, if not, from another appropriately authorised independent financial
adviser.
APPENDIX I
Conditions and Certain Further Terms of the Offers
Conditions of the Ordinary Offer
1. The Ordinary Offer will be subject to the following
conditions:
(a) valid acceptances of the Ordinary Offer being received (and
not, where permitted, withdrawn) by 3.00 pm (London time) on the First Closing
Date (or such later time(s) and/or date(s) as James Reed & Partners may, subject
to the rules of the City Code or with the consent of the Panel, decide) in
respect of not less than 90 per cent. (or such lesser percentage as James Reed &
Partners may decide) in nominal value of the Reed Health Ordinary Shares to
which the Ordinary Offer relates, provided that this condition will not be
satisfied unless James Reed & Partners shall have acquired or agreed to acquire,
directly or indirectly, whether pursuant to the Ordinary Offer or otherwise,
Reed Health Shares carrying in aggregate more than 50 per cent. of the voting
rights then normally exercisable at general meetings of Reed Health including,
for this purpose (to the extent, if any, required by the Panel) any such voting
rights attaching to any Reed Health Shares unconditionally allotted or issued or
redesignated before the Offers become or are declared unconditional as to
acceptances whether pursuant to the exercise of any outstanding subscription or
conversion rights or otherwise.
For the purposes of this condition:
(i) Reed Health Ordinary Shares which have been unconditionally allotted shall
to the extent (if any) required by the Panel be deemed to carry the voting
rights they will carry upon their being entered in the register of members of
Reed Health;
(ii) the expression "Reed Health Ordinary Shares to which the Ordinary Offer
relates" shall be construed in accordance with sections 428 to 430F of the
Companies Act; and
(iii) valid acceptances shall be treated as having been received in respect of
any Reed Health Ordinary Shares which James Reed & Partners and/or its
subsidiaries shall have acquired or contracted to acquire otherwise than by
virtue of acceptances of the Ordinary Offer whilst the Ordinary Offer remains
open for acceptance and which, by virtue of section 429(8) of the Companies Act,
may be treated as acceptances of the Ordinary Offer;
(b) valid acceptances being received (and not, where permitted, withdrawn) by
not later than 3.00 p.m. (London time) on the First Closing Date of the 'B'
Ordinary Offer (or such later time(s) and/or date(s) as James Reed & Partners
may, subject to the rules of the City Code or with the consent of the Panel,
decide) in respect of not less than 90 per cent. (or such lower percentage as
James Reed & Partners may decide) in nominal value of the Reed Health 'B' Shares
to which the 'B' Ordinary Offer relates, provided that this condition shall not
be capable of being satisfied before the First Closing Date.
For the purposes of this condition:
(i) the expression "Reed Health 'B' Shares to which the 'B' Ordinary Offer
relates" shall be construed in accordance with sections 428 to 430F of the
Companies Act; and
(ii) valid acceptances shall be treated as having been received in respect of
any Reed Health 'B' Shares which James Reed & Partners and/or its subsidiaries
shall have acquired or contracted to acquire otherwise than by virtue of
acceptances of the 'B' Ordinary Offer, whilst the 'B' Ordinary Offer remains
open for acceptance and which, by virtue of section 429(8) of the Companies Act,
may be treated as acceptances of the 'B' Ordinary Offer;
(c) the passing at an extraordinary general meeting of Reed Health of a special
resolution set out in the notice of extraordinary general meeting to alter the
articles of association of Reed Health so as to remove the restrictions on
transfer of the 'B' Ordinary Shares currently contained in Article 38 thereof
and the consent to or sanction of such resolution by the holders of Reed Health
'B' Shares at a separate class meeting in accordance with Article 10 of Reed
Health's articles of association;
(d) no relevant authority having, without the consent or agreement in writing of
James Reed & Partners prior to the date the Ordinary Offer becomes otherwise
unconditional in all respects, decided to take, institute or implement or
threatened, and there not continuing to be outstanding, any action, proceeding,
suit, investigation, enquiry or reference, and no relevant authority having
required any action to be taken or otherwise having done anything or having
enacted, made or proposed any statute, regulation, decision or order or taken
any measures or other steps or required any action to be taken or information to
be provided or otherwise having done anything in each case which would or would
reasonably be expected to (in any case to an extent that is material in the
context of either the James Reed & Partners Group or Reed Health Group plc, as
the case may be, taken as a whole):
(i) make the Ordinary Offer, its implementation or the acquisition or proposed
acquisition by James Reed & Partners or any member of the Wider James Reed &
Partners Group of any Reed Health Shares, or the proposed acquisition of control
of any member of the Wider Reed Health Group void, unenforceable and/or illegal
under the laws of any relevant jurisdiction or otherwise directly or indirectly
materially restrain, restrict, prohibit, delay or otherwise materially interfere
with the implementation of, or impose additional conditions or obligations with
respect to, or otherwise challenge, interfere with or require amendment of the
Ordinary Offer or the 'B' Ordinary Offer, their implementation or the
acquisition of any Reed Health Shares or the proposed acquisition of control of
any member of the Wider Reed Health Group by James Reed & Partners or any member
of the Wider James Reed & Partners Group;
(ii) require, prevent or delay a divesture or alter the terms envisaged for any
proposed divesture by the Wider James Reed & Partners Group of any of the shares
in Reed Health or any member of the Wider Reed Health Group;
(iii) require, prevent or delay a divestiture or alter the terms envisaged for
any proposed divesture by the Wider James Reed & Partners Group or by any member
of the Wider Reed Health Group, in any such case, of all or any part of their
respective businesses, assets or properties or impose any limitation on the
ability of any of them to conduct all or any portion of their respective
business (or any of them) or to own all or any portion of their respective
assets or properties;
(iv) impose any limitation on, or result in a delay in, the ability of the Wider
James Reed & Partners Group to acquire or to hold or to exercise effectively,
directly or indirectly, all or any rights of ownership in respect of shares or
other securities (or the equivalent) in any member of the Wider Reed Health
Group or on the ability of the Wider James Reed & Partners Group to hold or to
exercise effectively any rights of ownership of shares or other securities in or
to exercise management control over any member of the Wider Reed Health Group;
(v) save pursuant to the Ordinary Offer, the 'B' Ordinary Offer or Part XIIIA of
the Companies Act, require any member of the Wider James Reed & Partners Group
or any member of the Wider Reed Health Group to acquire, or offer to acquire,
any shares or other securities (or the equivalent) in any member of the Wider
Reed Health Group or any asset owned by any third party or to sell, or to offer
to sell, any shares or other securities (or the equivalent) in or any asset
owned by any member of the Wider Reed Health Group or by the Wider James Reed &
Partners Group;
(vi) result in any member of the Wider Reed Health Group or the Wider James Reed
& Partners Group ceasing to be able to carry on business under any name which it
presently does so where such cessation would have a material adverse effect on
the James Reed & Partners Group or the Reed Health Group (as the case may be)
taken as a whole; or
(vii) otherwise affect adversely any or all of the business, assets, profits,
financial or trading position or prospects of the Wider James Reed & Partners
Group or any member of the Wider Reed Health Group in any material way;
and all applicable waiting and other time periods (including any extension
thereof) during which any relevant authority could decide to take, institute,
implement or threaten any such action, proceeding, suit, investigation, enquiry
or reference or any other step under the laws of any jurisdiction having
expired, lapsed or been terminated.
(e) all notifications, filings and applications (including such
notifications, filings and applications as may be required to national or
supranational merger authorities) having been made and all applicable waiting
and other time periods (including any extensions thereof) under any applicable
legislation and regulations in any jurisdiction having expired, lapsed or been
terminated and all statutory and regulatory obligations in any jurisdiction
having been complied with, in each case as may be necessary in connection with
the Ordinary Offer and the 'B' Ordinary Offer, their implementation or the
acquisition or the proposed acquisition by the Wider James Reed & Partners Group
of any shares or other securities (or the equivalent) in, or control of, Reed
Health or any member of the Wider Reed Health Group or the carrying on by the
Wider Reed Health Group of its business;
(f) all authorisations and determinations necessary or are
reasonably considered necessary or appropriate by James Reed & Partners in any
jurisdiction for or in respect of the Ordinary Offer and the 'B' Ordinary Offer
or their implementation or the acquisition or the proposed acquisition of any
shares or other securities (or the equivalent) in, or control of, Reed Health or
any member of the Wider Reed Health Group by James Reed & Partners or the
carrying on by any member of the Wider Reed Health Group of its business having
been obtained on terms and in a form reasonable satisfactory to James Reed &
Partners from all relevant authorities or persons or bodies with whom any member
of the Wider Reed Health Group has entered into contractual arrangements and all
such authorisations and determinations remaining in full force and effect and
there being no notice or intimation of an intention to revoke, suspend,
adversely restrict, adversely modify or not renew such authorisations and
determinations, provided that such authorisations and determinations shall not
impose any conditions or require the taking or refraining from taking of any
action by the Wider James Reed & Partners Group or any member of the Wider Reed
Health Group;
(g) since 30 June 2004, except as specifically disclosed in the Reed Health 2004
Accounts or as publicly announced through a Regulatory Information Service, on
behalf of Reed Health, there being no provision of any arrangement, agreement,
licence, permit, lease, franchise or other instrument to which any member of the
Wider Reed Health Group is a party or by or to which any such member or any of
its respective assets is or is reasonably likely to be bound, entitled or be
subject or any circumstance which, in each case as a consequence of the Ordinary
Offer and/or the 'B' Ordinary Offer or the acquisition or the proposed
acquisition by any member of the Wider James Reed & Partners Group of any shares
or other securities (or the equivalent) in, or control of, Reed Health or any
member of the Reed Health Group or otherwise, would or might reasonably be
expected to result to an extent which, in each case, could have a material
adverse effect on the Wider Reed Health Group taken as a whole, in:
(i) any monies borrowed by, or any other indebtedness or
liabilities, actual or contingent, of or any grant available to any member of
the Wider Reed Health Group being or becoming repayable, or capable of being
declared repayable, immediately or prior to its or their stated maturity or
repayment date, or the ability of any such member to borrow monies or incur any
indebtedness being or becoming capable of being withdrawn or inhibited;
(ii) the rights, liabilities, obligations, interests or business
of any member of the Wider Reed Health Group under any such arrangement,
agreement, licence, permit, lease, franchise or instrument or the interests or
business of any member of the Wider Reed Health Group in or with any other firm
or company or body or person (or any agreement or arrangements relating to any
such business or interests) being or becoming capable of being terminated or
adversely modified or affected or any onerous obligation or any liability
arising or any adverse action being taken thereunder;
(iii) any member of the Wider Reed Health Group ceasing to be able
to carry on business under any name under which it presently does so;
(iv) any asset, property or interest of, or any asset the use of
which is enjoyed by, any member of the Wider Reed Health Group being or failing
to be disposed of or charged in any manner howsoever or any right arising under
which any such asset or interest could be required to be disposed of or charged
or could cease to be available to any member of the Wider Reed Health Group
other than in the ordinary course of business;
(v) 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 Reed Health Group or the Wider James Reed & Partners
Group or any such mortgage, charge or other security interest (whether existing
or having arisen) becoming enforceable or being enforced;
(vi) the respective financial or trading position or prospects or
the value of, any member of the Wider Reed Health Group being prejudiced or
adversely affected;
(vii) the creation or assumption of any liability (actual,
contingent or prospective) by any member of the Wider Reed Health Group; or
(viii) any member of the Wider Reed Health Group being required to
acquire or repay any shares in and/or indebtedness of any member of the Wider
Reed Health Group owned by any third party;
and no event having occurred which, under any provision of any such arrangement,
agreement, licence, permit, lease, franchise or instrument, could result in any
of the events or circumstances that are referred to in paragraphs (i) to (viii)
of this condition (g) in any case to an extent which is or would be material in
the context of the Reed Health Group taken as a whole;
(h) no member of the Wider Reed Health Group having since 30 June 2004 (being
the date to which the Reed Health 2004 Accounts were made up), except as fairly
disclosed in the Reed Health 2004 Accounts or as publicly announced through a
Regulatory Information Service by or on behalf of Reed Health prior to 8
November 2005:
(i) issued or agreed to issue or authorised or proposed 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 Reed Health and wholly-owned
subsidiaries of Reed Health and save for the issue of Reed Health Shares on the
exercise of options granted under the Reed Health Share Option Schemes before 8
November 2005 or any shares issued thereafter pursuant to any such options);
(ii) recommended, declared, paid or made or proposed to recommend, declare, pay
or make any bonus in respect of shares, dividend or other distribution whether
payable in cash or otherwise (other than to Reed Health or one of its
wholly-owned subsidiaries);
(iii) (save for transactions between members of the Wider Reed Health Group)
made any change in its loan capital or effected or implemented any merger or
de-merger or acquired, disposed of, transferred, mortgaged, charged or granted
security over any body, corporate, partnership or business or acquired or
disposed of, or, other than in the ordinary course of business, transferred,
mortgaged or charged or created any security interest over, any asset or any
right, title or interest in any asset (including shares and trade investments)
or authorised, proposed or announced any intention to do so;
(iv) issued, authorised or proposed the issue of any debentures or (save for
transactions between members of the Wider Reed Health Group or transactions
carried out by members of the Wider Reed Health Group in the ordinary course of
business) incurred or increased any indebtedness or become subject to any
contingent liability which, in any case, is material in the context of the Wider
Reed Health Group taken as a whole;
(v) entered into or varied or announced its intention to enter into or vary any
contract, transaction, arrangement or commitment (whether in respect of capital
expenditure or otherwise) which is of a loss-making, long term, unusual or
onerous nature or magnitude, or which involves or could be reasonably expected
to involve an obligation of such a nature or magnitude which, in any such case,
is material;
(vi) entered into or varied or made any offer (which remains open for
acceptance) to enter into or change the terms of any contract, service agreement
or arrangement with any director or senior executive of any member of the Wider
Reed Health Group;
(vii) implemented, effected or authorised, proposed or announced its intention
to implement, effect, authorise or propose any reconstruction, amalgamation,
commitment, scheme or other transaction or arrangement which would be materially
restrictive on the business of the Wider Reed Health Group or the Wider James
Reed & Partners Group;
(viii) purchased, redeemed or repaid or proposed the purchase, redemption or
repayment of 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
transactions between members of the Wider Reed Health Group and for any issue of
Reed Health Shares pursuant to the Reed Health Share Option Schemes;
(ix) waived or compromised any claim other than in the ordinary course of
business;
(x) except as contemplated by condition (c) above, made any alteration to its
memorandum or articles of association or other constitutional documents;
(xi) taken or proposed any corporate action or had any legal proceedings
instituted or threatened against it or petition presented or order made for its
winding-up (voluntary or otherwise), dissolution, reorganisation or for the
appointment of any administrator, receiver, administrative receiver, trustee or
similar officer or other encumbrancer of all or any of its assets or revenues;
(xii) 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;
(xiii) except as contemplated by condition (c) above, entered into any contract,
commitment, agreement or arrangement or passed any resolution or made any offer
(which remains open for acceptance) with respect to, or authorised or announced
any intention to effect or propose, any of the transactions, matters or events
referred to in this condition;
(xiv) made or agreed or consented to any significant change to the terms of the
trust deeds constituting the pension schemes established for its directors,
employees 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 including the appointment of a trust corporation;
(xv) proposed, agreed to provide or modified 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 Reed Health Group
in a manner which is material in the context of the Wider Reed Health Group
taken as a whole;
terminated any agreement or arrangement between any member of the Wider Reed
Health Group and any other person that is or was material in the context of the
Reed Health Group as a whole;
(i) since 30 June 2004 (being the date to which the Reed Health 2004 Accounts
were made up), except as specifically disclosed in the Reed Health 2004 Accounts
or otherwise publicly announced through a Regulatory Information Service to by
or on behalf of Reed Health prior to 8 November 2005:
(i) there having been no receiver, administrative receiver or other encumbrancer
appointed over any part of the assets of any member of the Wider Reed Health
Group which in any such case is material in the context of the Wider Reed Health
Group taken as a whole;
(ii) there having been no material adverse change or deterioration in the
business, assets, financial or trading position or profits or prospects of any
member of the Wider Reed Health Group;
(iii) no litigation, arbitration proceedings, prosecution or other legal
proceedings to which any member of the Wider Reed Health Group is or may become
a party (whether as plaintiff or claimant or defendant or otherwise) having been
threatened, announced or instituted by or against or remaining outstanding
against or in respect of any member of the Wider Reed Health Group and no
enquiry or investigation by, or complaint or reference to, any relevant
authority having been threatened, announced, implemented or instituted or
remaining outstanding, against or in respect of any member of the Wider Reed
Health Group;
(iv) no actual contingent or other liability having arisen which would be
reasonably likely to adversely affect the business, assets, financial or trading
position or profits or prospects of any member of the Wider Reed Health Group
and which is outside the ordinary course of business and which is material in
the context of the Wider Reed Health Group taken as a whole; or
(v) no material claim being made and no circumstance having arisen that might
lead to a material claim being made under the insurance of any member of the
Wider Reed Health Group;
(j) James Reed & Partners not having discovered that:
(i) any financial, business or other information concerning the Wider Reed
Health Group publicly disclosed or disclosed to or on behalf of any member of
the Wider James Reed & Partners Group at any time by or on behalf of any member
of the Wider Reed Health Group is misleading, contains a misrepresentation of
fact or omits to state a fact necessary to make the information contained
therein not misleading;
(ii) any present member of the Wider Reed Health Group is subject to any
liability (whether actual, contingent or otherwise), which is not disclosed in
the Reed Health 2004 Accounts or otherwise publicly announced through a
Regulatory Information Service by or on behalf of Reed Health prior to 8
November 2005 and which is outside the ordinary course of business and which is
material in the context of the Wider Reed Health Group taken as a whole.
For the purposes of these conditions:
"Accounts" has the meaning set out in Appendix IV;
"authorisations" means authorisations, orders, grants, recognitions,
certifications, confirmations, consents, licences, clearances, exemptions,
permissions and approvals;
"Reed Health 2004 Accounts" means the audited accounts of Reed Health for the
period ended 30 June 2004;
"relevant authority" means any government, government department or
governmental, quasi-governmental, supranational, statutory, regulatory or
investigative body, court, stock exchange, trade agency, professional
association or institution, environmental body or any other person or body
whatsoever in any jurisdiction; and
"Wider Reed Health Group" means Reed Health and its subsidiary undertakings,
associated companies and any other undertaking, partnership, company or joint
venture in which Reed Health and/or such undertakings or associate companies
(aggregating their interests) have a substantial interest; and
"Wider James Reed & Partners Group" means James Reed & Partners and its
subsidiary undertakings, associated undertakings and any other undertaking or
partnership or company in which James Reed & Partners and/or such undertakings
or associated companies (aggregating their interests) have a substantial
interest and, for the purpose of this paragraph and the paragraph relating to
"Wider Reed Health Group" above, "subsidiary", "subsidiary undertaking",
"associated company" and "undertaking" have meanings given by Companies Act (but
for this purpose ignoring paragraph 20(1)(b) of Schedule 4A of the Companies
Act) and "substantial interest" means a direct or indirect interest in 20 per
cent. or more of the equity share capital (as defined in that Act) of any
undertaking.
2. Certain Further Terms of the Offers
(a) James Reed & Partners reserves the right (but shall be under no obligation)
to waive all or any of conditions 1(b) to (j) inclusive, in whole or in part.
Conditions 1(b) to (j) (inclusive), if not waived (where permitted), must be
fulfilled or (if capable of being waived) waived, or where appropriate have been
determined by James Reed & Partners to be or remain satisfied within 21 days
after the later of the First Closing Date and the date on which condition 1(a)
is fulfilled (or in each case such later date as the Panel may agree) following
which the Offers will lapse. James Reed & Partners reserves the right, subject
to the consent of the Panel, to extend the time allowed under the City Code for
satisfaction of condition 1(a) until such time as conditions 1(b) to (j)
inclusive have been satisfied, fulfilled or waived. James Reed & Partners shall
be under no obligation to waive, to determine to be or treat as fulfilled any of
conditions 1(b) to (j) inclusive by a date earlier than the date specified above
for the fulfilment thereof notwithstanding that the other conditions of the
Ordinary Offer may at such earlier date have been waived or fulfilled and that
there are, at such earlier date, no circumstances indicating that any of such
conditions may not be capable of fulfilment.
(b) If James Reed & Partners is required by the Panel to make an offer for Reed
Health Ordinary Shares or Reed Health 'B' Shares under the provisions of Rule 9
of the City Code, James Reed & Partners may make such alterations to the above
conditions of the Offers, including condition 1(a) and (b), as are necessary to
comply with the provisions of that Rule.
(c) Except with the consent of the Panel, the Ordinary Offer will lapse if it
(or any matter arising there from) is referred to the Competition Commission
before the later of 3.00 p.m. (London time) on the First Closing Date and the
date on which the Offers become or are declared unconditional as to acceptances.
If the Ordinary Offer lapses, the Ordinary Offer will cease to be capable of
further acceptance and persons accepting the Ordinary Offer, Altium and James
Reed & Partners will cease to be bound by Forms of Acceptance submitted on or
before the time when the Ordinary Offer lapses.
(d) The Reed Health Shares, which are the subject of the Offers, will be
acquired fully paid and free from all liens, charges, equities, equitable
interests, encumbrances, rights of pre-emption or other third party rights of
any nature and together with all rights now and in future attaching thereto,
including the right to receive all dividends and other distributions declared,
paid or made after 8 November 2005. However, if the Offers become or are
declared unconditional in all respects, it is the intention of the James Reed &
Partners Directors that the proposed final dividend of 0.25p per Reed Health
Share will not be paid.
3. Condition of the 'B' Ordinary Offer
The 'B' Ordinary Offer will be conditional upon the Ordinary Offer becoming or
being declared unconditional in all respects and, if the Ordinary Offer lapses,
the 'B' Ordinary Offer will lapse at the same time and James Reed & Partners,
Altium and persons accepting the 'B' Ordinary Offer will cease to be bound by
Forms of Acceptance submitted on or before the time when the 'B' Ordinary Offer
lapses.
APPENDIX II
Bases of calculations and sources of information
(A) The value placed by the Offers on the whole of the existing issued ordinary
share capital of Reed Health is based on the number of 59,644,772 shares in
issue, split into:
Reed Health Ordinary Shares 32,802,377 shares
Reed Health 'B' Shares 26,842,395 shares
(B) Save in relation to the financial information on Reed Health in respect of
2004 which is contained in this announcement which has been extracted from Reed
Health's audited accounts for the financial period ended 30 June 2004, the
financial information on Reed Health contained in this announcement has been
extracted from Reed Health's Preliminary Statement of accounts for the financial
period ended 30 June 2005, announced on 27 September 2005.
(C) The Closing Price of a Reed Health Ordinary Share referred to in this
announcement is derived from the Daily Official List published by the London
Stock Exchange.
(D) The amount of the cash payment in respect of full acceptance of the Offers
is calculated based upon the number of Reed Health Shares in issue (as described
above) and taking into account the 34,919,248 Reed Health Shares that are
irrevocably committed to electing for the Loan Note Alternative and the assumed
issue of 1,815,658 Reed Health Ordinary Shares to satisfy options exercisable at
a price of less than 55p pursuant to the Reed Health Share Option Schemes.
APPENDIX III
Disclosure of interests in Reed Health Group PLC
The James Reed & Partners Directors, their close relatives and related trusts
and persons acting in concert with James Reed & Partners own or control the
following Reed Health Shares:
Number of Reed Health Ordinary Number of Reed Health 'B'
Shares Shares
Alec Reed - 3,248,055
Adrianne 4,500 2,607,000
Reed
James Reed 34,875 -
Nicola Reed 100,000 -
Richard Reed 34,875 -
Alexandra
Chapman 25,000 -
Personal
Pensions
Management
Limited 750,000 (1) -
Reed Charity 3,971,919 -
The Trinity
Trust - 11,368,945
August 1970
Settlement - 4,603,500
Eagle Trustees 1,964,577
Reed
Grandchildren's
Settlement 1,206,002 5,000,000
(1) Held in relation to Alec Reed's personal pension.
APPENDIX IV
Definitions
The following definitions apply throughout this announcement, unless the context
otherwise requires:
"Accounts" the report and accounts of Reed Health for the year ended 30
June 2004
"Companies Act" the Companies Act 1985
"Altium" Altium Capital Limited
"Articles" the articles of association of Reed Health
"Australia" the Commonwealth of Australia, its territories and
possessions
"'B' Ordinary the offer to be made by Altium on behalf of James Reed &
Offer" Partners to acquire all of the Reed Health 'B' Shares (other
than those already owned by James Reed & Partners) on the
terms and subject to the conditions set out in the Offer
Document and the relevant Form of Acceptance (including where
the context so requires, the Loan Note Alternative and any
subsequent revision, variation, extension or renewal of such
offer)
"business day" or a day, not being a public holiday, Saturday or Sunday, on
"trading day" which clearing banks in London are open for business
"Canada" Canada, its provinces and territories and all areas subject to
its jurisdiction and any political subdivision thereof
"City Code" or the City Code on Takeovers and Mergers
"Code"
"Closing Price" the closing middle market price of a share derived from SEDOL
for the relevant date
"First Closing 21 days after the posting of the Offer Document
Date"
"Forms of the forms of acceptance, election and authority for use in
Acceptance" connection with the Offers
"FSA" the Financial Services Authority
"Independent the directors of Reed Health Group plc, excluding James Reed
Directors" or and Derek Beal
"Independent Reed
Health
Directors"
"James Reed & James Reed & Partners plc
Partners"
"Japan" Japan, its cities and prefectures, territories and
possessions
"James Reed & the directors of James Reed & Partners
Partners
Directors"
"James Reed & James Reed & Partners and its subsidiaries and subsidiary
Partners Group" undertakings
"LIBOR" the applicable British Bankers Association Interest Settlement
rate for Sterling and the relevant period displayed on the
appropriate page of the Telerate Screen ("Screen Rate") or if
no Screen Rate is available, the arithmetic mean of the rates
quoted to lending banks in the London interbank market, as of
11.00 a.m. on the first day of that period for the offering of
deposits in Sterling at approximately the amount of the
principal amount in respect of which the rate is being
determined and for a period comparable to that period
"Listing Rules" the rules and regulations made by the UKLA under Part VI of
the Financial Services and Markets Act 2000
"Loan Note the alternative to be made available under the Offers whereby
Alternative" Reed Health Shareholders (other than certain Overseas
Shareholders) who validly accept the Offers may elect to
receive Loan Notes instead of cash consideration to which they
would otherwise have been entitled under the Offers
"Loan Notes" the unsecured and unguaranteed loan notes of James Reed &
Partners to be issued pursuant to the Loan Note Alternative
"London Stock London Stock Exchange plc
Exchange"
"Offer the document to be posted to Reed Health Shareholders (and for
Document" information only, to participants in the Reed Health Share
Option Schemes) containing the full terms and conditions of
the Offers
"Offer Price" the price of 55p per Reed Health Share to be paid pursuant to
the Offers
"Offers" the Ordinary Offer and the 'B' Ordinary Offer
"Official List" the Official List of the UKLA
"Ordinary the offer to be made by Altium on behalf of James Reed &
Offer" Partners to acquire all of the Reed Health Ordinary Shares
(other than those already owned by James Reed & Partners) on
the terms and subject to the conditions set out in this
document and the relevant Form of Acceptance (including where
the context so requires the Loan Note Alternative and any
subsequent revision, variation, extension or renewal of such
offer)
"Overseas Reed Health Shareholders who are residents in, or nationals or
Shareholders" citizens of, jurisdictions outside the UK or who are companies
of, or custodians or trustees for, citizens or nationals of
countries other than the UK
"Panel" the Panel on Takeovers and Mergers
"Preliminary the preliminary statement of accounts of Reed Health for the
Statement" financial year ended 30 June 2005
"Reed Family" James Reed, Alec Reed and their respective related parties,
including their respective family trusts
"Reed Health" Reed Health Group PLC
"Reed Health 'B' holders of Reed Health 'B' Shares
Shareholders"
"Reed Health 'B' 'B' ordinary shares of 2p each in Reed Health
Shares"
''Reed Health the directors of Reed Health, as at the date of this
Directors'' announcement
"Reed Health Reed Health and its subsidiaries and subsidiary undertakings
Group"
"Reed Health ordinary shares of 2p each in Reed Health
Ordinary
Shares"
"Reed Health the Reed Health Ordinary Shares and the Reed Health 'B'
Share(s)" Shares
"Reed Health the Reed Health Group plc 1999 Savings Related Share Option
Share Option Scheme and the Reed Health Group plc Unapproved Share Option
Schemes" Plan
"Reed Health holders of Reed Health Shares or Reed Health 'B' Shares
Shareholders" or
"Shareholders"
"Regulatory any of the services set out in Appendix 3 to the Listing
Information Rules
Service"
"Restricted Australia, Canada, Japan or the United States or any other
Jurisdiction" jurisdiction in which the release, publication or distribution
of this announcement may be restricted
"Securities US Securities Act 1933, as amended
Act"
"SEDOL" the Stock Exchange Daily Official List published by the London
Stock Exchange
"UKLA" 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
"United Kingdom" the United Kingdom of Great Britain and Northern Ireland
or "UK"
"United States" the United States of America, its territories and possessions,
or "US" any state of the United States of America and the District of
Columbia, and all other areas subject to its jurisdiction
"US Person(s)" has the meaning ascribed to it by Regulation S under the
Securities Act
"Wider James Reed James Reed & Partners and its subsidiary undertakings,
& Partners associated undertakings and any other undertakings in which
Group" James Reed & Partners and/or such undertakings (aggregating
their interests) have a substantial interest
"Wider Reed Reed Health and its subsidiary undertakings, associated
Health Group" undertakings and any other undertakings in which Reed Health
and/or such undertakings (aggregating their interests) have a
substantial interest
The terms "subsidiary" and "subsidiary undertakings" as used in these
definitions shall have the meanings given by the Companies Act.
All references to legislation in this announcement are to English legislation,
unless the contrary is indicated. Any reference to any provision of any
legislation should include any amendment, modification, re-enactment or
extension thereof.
The singular shall include the plural and vice versa, and words importing the
masculine gender shall include the feminine or neutral gender.
This information is provided by RNS
The company news service from the London Stock Exchange
END
OFFLDLLBEFBZFBK
Reed Health (LSE:RHG)
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Reed Health (LSE:RHG)
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