RNS Number:6107R
Zetex Plc
04 April 2008
Not for release, publication or distribution, in whole or in part, in, into or
from any jurisdiction where to do so would constitute a violation of the
relevant laws of such jurisdiction.
4 April 2008
RECOMMENDED PROPOSAL FOR THE CASH ACQUISITION
of
ZETEX PLC ("ZETEX")
by
DIODES INCORPORATED ("DIODES")
(through its wholly-owned subsidiary, Diodes Holdings UK Limited ("BidCo"))
(to be effected by means of a scheme of arrangement)
Summary
* The Boards of Diodes and Zetex are pleased to announce that they have
reached agreement on the terms of a recommended cash offer ("Recommended
Proposal") to be made by Diodes (through its wholly-owned subsidiary, BidCo) for
the entire issued and to be issued share capital of Zetex. It is intended that
the Recommended Proposal will be implemented by way of a court approved scheme
of arrangement under section 895 of the Companies Act 2006.
* Under the terms of the Recommended Proposal, Zetex Shareholders will receive
85.45 pence in cash for each Zetex Share, valuing the entire issued and to be
issued ordinary share capital of Zetex at approximately �89.1 million.
* The price of 85.45 pence in cash for each Zetex Share represents:
- a premium of approximately 96 per cent. to the Closing Price of a
Zetex Share on 3 April 2008 (being the last Business Day prior to the
commencement of the Offer Period); and
- a premium of approximately 27 per cent. to the average Closing
Price of a Zetex Share for the 12 months ended 3 April 2008.
* Zetex is a designer and manufacturer of high performance discrete and analog
semiconductor solutions for a broad range of applications, including power
management, drivers for LEDs, high performance digital audio solutions and
control circuits for broadcasting over satellites. Zetex operates a global
business with manufacturing facilities in the UK, Europe and China, which supply
added value discrete and analog standard products and application specific
products to customers in the US, Europe and Asia.
* Diodes is a global manufacturer and supplier of high-quality application
specific standard products within the broad discrete and analog semiconductor
markets, serving the consumer electronics, computing, communications, industrial
and automotive markets.
* The Diodes Directors believe that a combination of Zetex and Diodes will
create a global provider of analog and discrete semiconductor solutions to the
consumer electronics, communications, computing, industrial and automotive
markets.
* The Zetex Directors believe that the increased breadth of products,
additional market focus and new cross-selling opportunities resulting from the
transaction should provide significant benefits for customers and employees of
both companies.
* The Zetex Directors, who have been so advised by Rothschild, unanimously
consider the terms of the Recommended Proposal to be fair and reasonable. In
providing its advice to the Zetex Directors, Rothschild has taken into account
the commercial assessments of the Zetex Directors.
* Accordingly, the Zetex Directors intend unanimously to recommend that Zetex
Shareholders vote in favour of the Scheme at the Court Meeting and the
resolutions required in connection with the Scheme to be proposed at the General
Meeting.
* Following the Acquisition becoming effective, the existing employment
rights, including pension rights, of all employees and management of Zetex will
be fully safeguarded.
* Diodes has received irrevocable undertakings in respect of a total of
58,912,606 Zetex Shares, representing 56.5 per cent. of Zetex's existing issued
ordinary share capital, to vote in favour of the Scheme and the resolutions at
the Court Meeting and the General Meeting as follows:
- each of the Zetex Directors in respect of their beneficial
shareholdings and those of their connected and related persons in Zetex
amounting to, in aggregate, 789,134 Zetex Shares, representing 0.8 per cent. of
Zetex's existing issued ordinary share capital;
- Aberforth Partners LLP in respect of the entire number of Zetex
Shares to which they have been granted voting authority over amounting to, in
aggregate, 23,835,564 Zetex Shares, representing 22.9 per cent. of Zetex's
existing issued ordinary share capital; and - Titan International
Limited in respect of the entire number of Zetex Shares which they control
amounting to, in aggregate, 34,287,908 Zetex Shares, representing 32.9 per cent.
of Zetex's existing issued ordinary share capital.
* Commenting on the Recommended Proposal, Liz Airey, Chairman of Zetex, said:
"We are delighted to make this announcement today. This offer represents
significant value for our shareholders. Diodes is a leading player in the global
discrete and analog semiconductor markets. The businesses are complementary in a
number of respects, not least in product range and sector focus. The combination
will enable the Zetex business to accelerate our growth in Asia Pacific whilst
Diodes will benefit from our strength in Europe. In addition the advantages to
our customers and employees of being part of a larger organisation in terms of
selling, manufacturing and product development are clear."
* Commenting on the Recommended Proposal, Keh-Shew Lu, President, Chief
Executive Officer and Director of Diodes, said:
"This acquisition will accelerate Diodes' broad product platform strategy as
Zetex will contribute a range of new discrete and analog products and
capabilities that will aid deeper penetration of our key end-markets including
consumer, computing and communications. Zetex brings an attractive customer
base, which complements our geographical presence and helps expand our
addressable markets. We believe this combination will create substantial
synergies including excellent cross-selling opportunities, significant economies
of scale and cost savings by leveraging Diodes' expertise in manufacturing and
packaging".
This summary should be read in conjunction with, and is subject to, the full
text of the following announcement and the Appendices. The Recommended Proposal
will be subject to the Conditions set out in Appendix I. Appendix II contains
the bases of calculation and sources of certain information contained in this
announcement. Appendix III contains details of the undertakings. Appendix IV
contains the definitions of certain terms used in this summary and the following
announcement.
Enquiries:
Zetex plc Tel: +44 (0)161 622 4444
Liz Airey, Chairman
Hans Rohrer, Chief Executive Officer
Rothschild (financial adviser to Zetex plc) Tel: +44 (0)161 827 3800
Andrew Thomas
James Gaskell
Citigate Dewe Rogerson (PR advisers to Zetex) Tel: +44 (0)20 7638 9571
Toby Mountford
Justin Griffiths
Diodes Incorporated
Dr Keh-Shew Lu Tel: +1 972 385 2810
Carl Wertz Tel: +1 805 446 4800
UBS Investment Bank (financial adviser to BidCo and Diodes Tel: +1 310 556 6700
Incorporated)
Gavin Domm Tel: +1 310 556 6700
Gavin Slader Tel: +1 310 556 6700
Craig Calvert Tel: +44 (0) 20 7567 8000
Shelton Group (IR adviser to Diodes) Tel: +1 949 224 3874
Leanne Sievers
This announcement is not intended to, and does not constitute or form any part
of, an offer or invitation to sell or subscribe for or purchase any securities
or solicitation of any vote or approval in any jurisdiction pursuant to the
Recommended Proposal or otherwise. The Recommended Proposal will be carried out
solely through the Scheme Document, which will contain the full terms and
conditions of the Recommended Proposal (including details of how to vote in
respect of the Recommended Proposal). Any acceptance or other response to the
Recommended Proposal should be made only on the basis of the information in the
Scheme Document. Zetex Shareholders are advised to read the formal
documentation in relation to the Recommended Proposal carefully, once it has
been dispatched.
The distribution of this announcement in jurisdictions other than the UK may be
restricted by law and therefore any persons who are subject to the laws of any
jurisdiction other than the UK should inform themselves about, and observe, any
applicable requirements. This announcement has been prepared for the purpose of
complying with English law and the Code and the information disclosed may not be
the same as that which would have been disclosed if this announcement had been
prepared in accordance with the laws of jurisdictions outside the UK.
Rothschild is regulated in the UK by the Financial Services Authority and is
acting exclusively for Zetex in connection with the Recommended Proposal and
no-one else and will not be responsible to anyone other than Zetex for providing
the protections afforded to its clients or for providing advice in relation to
the Recommended Proposal or any other matters referred to in this announcement.
UBS is acting exclusively for Diodes and BidCo and no-one else in connection
with the Recommended Proposal and will not be responsible to anyone other than
Diodes and BidCo for providing the protections afforded to clients of UBS or for
providing advice in relation to the Recommended Proposal or any matter referred
to in this announcement.
Forward looking statements
This announcement includes "forward-looking statements". These statements are
based on the current expectations of the management of Zetex and Diodes and are
naturally subject to uncertainty and changes in circumstances. The
forward-looking statements contained in this announcement include statements
regarding the expected timing and scope of the Acquisition. Forward-looking
statements include, without limitation, statements typically containing words
such as "intends", "expects", "anticipates", "targets", "estimates", "believe",
"will", "may", "should", would", "could" and words of similar import. Although
Zetex and Diodes believe that the expectations reflected in such forward-looking
statements are reasonable, Zetex and Diodes can give no assurance that such
expectations will prove to have been correct. By their nature, forward-looking
statements involve risk and uncertainty because they relate to events and depend
on circumstances that will occur in the future. There are a number of factors
that could cause actual results and developments to differ materially from those
expressed or implied by such forward-looking statements. These factors include,
but are not limited to, the satisfaction of the Conditions to the Acquisition,
and Diodes' and BidCo's ability to successfully integrate the operations and
employees of Zetex, as well as additional factors, such as: local and global
political and economic conditions; significant price discounting by competitors;
changes in consumer habits and preferences; foreign exchange rate fluctuations
and interest rate fluctuations (including those from any potential credit rating
decline); legal or regulatory developments and changes; the uncertainties of
litigation; Diodes' and BidCo's ability successfully to expand internationally
and manage growth; the impact of any acquisitions or similar transactions;
competitive product and pricing pressures; production or distribution
disruptions and changes in the supply and cost of raw materials; and non-payment
of receivables by distributors. Other unknown or unpredictable factors could
cause actual results to differ materially from those in the forward-looking
statements. Given these risks and uncertainties, investors should not place
undue reliance on forward-looking statements as a prediction of actual results.
Zetex, Diodes and BidCo assume no obligation to update publicly or revise
forward-looking statements, whether as a result of new information, future
events or otherwise, except to the extent legally required.
Rule 8 Dealing disclosure requirements
Under the provisions of Rule 8.3 of the Code, if any person is, or becomes,
"interested" (directly or indirectly) in 1 per cent. or more of any class of
"relevant securities" of Zetex, all "dealings" in any "relevant securities" of
Zetex (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 London Business Day following the date of the
relevant transaction. This requirement will continue until the date on which
the Acquisition and/or Scheme becomes effective, 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 Zetex, 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 Zetex by Diodes, BidCo or Zetex, or by any of their respective
"associates", must be disclosed by no later than 12.00 noon (London time) on the
London Business Day following the date of the relevant transaction.
A disclosure table, giving details of the companies in whose "relevant
securities" "dealings" should be disclosed, and the number of such securities in
issue, can be found on the 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 be found on the
Panel's website. If you are in any doubt as to whether or not you are required
to disclose a dealing under Rule 8, you should consult the Panel.
Not for release, publication or distribution, in whole or in part, in, into or
from any jurisdiction where to do so would constitute a violation of the
relevant laws of such jurisdiction.
4 April 2008
RECOMMENDED PROPOSAL FOR THE CASH ACQUISITION
of
ZETEX PLC ("ZETEX")
by
DIODES INCORPORATED ("DIODES")
(through its wholly-owned subsidiary, Diodes Holdings UK Limited ("Bidco"))
(TO BE EFFECTED BY MEANS OF A SCHEME OF ARRANGEMENT)
1. Introduction
The Boards of Diodes and Zetex are pleased to announce that they have reached
agreement on the terms of a recommended cash offer ("Recommended Proposal") to
be made by Diodes (through its wholly-owned subsidiary, BidCo) for the entire
issued and to be issued share capital of Zetex. It is intended that the
Recommended Offer will be implemented by way of a court approved scheme of
arrangement under section 895 of the Companies Act 2006.
2. Recommendation
The Zetex Directors, who have been so advised by Rothschild, unanimously
consider the terms of the Recommended Proposal to be fair and reasonable. In
providing its advice to the Zetex Directors, Rothschild has taken into account
the commercial assessments of the Zetex Directors.
Accordingly, the Zetex Directors intend unanimously to recommend that Zetex
Shareholders vote in favour of the Scheme at the Court Meeting and the
resolutions required in connection with the Scheme to be proposed at the General
Meeting.
3. The Recommended Proposal
Under the terms of the Scheme, which will be subject to the Conditions and
further terms set out in Appendix I to this announcement and to be set out in
the Scheme Document, Zetex Shareholders (other than the holders of Excluded
Shares) will be entitled to receive:
for each Zetex Share
85.45 pence in cash
The Recommended Proposal values the entire issued and to be issued ordinary
share capital of Zetex at approximately �89.1 million.
The price of 85.45 pence in cash for each Zetex Share represents:
- a premium of approximately 96 per cent. to the Closing Price of a Zetex
Share on 3 April 2008 (being the last Business Day prior to the commencement of
the Offer Period); and
- a premium of approximately 27 per cent. to the average Closing Price of
a Zetex Share for the 12 months ended 3 April 2008.
1. Background to and reasons for the Acquisition
The Diodes Directors believe that a combination of Zetex and Diodes will
strengthen the position of the enlarged group as a global provider of analog and
discrete semiconductor solutions to the consumer electronics, computing,
communications, industrial and automotive markets. The Diodes Directors further
believe that the increased breadth of products, additional market focus and new
cross-selling opportunities resulting from the transaction should provide
significant benefits for the customers and employees of both groups.
Growth and integration opportunities
Diodes has historically supplemented its organic growth through the acquisition
and integration of businesses and companies with complementary technology,
customers and geographies. Diodes has a proven track record in leveraging the
strengths of its acquisitions and realising operating synergies.
Diodes' acquisitions of FabTech Inc in December 2000, Anachip Corporation in
January 2006 and the net assets of APD Semiconductor, Inc in November 2006
demonstrate its success in integrating acquired businesses and products to
realise synergies, enhance product offerings, and roll out solutions and
services into new geographic and customer markets.
The Diodes Directors believe that the integration of Zetex with Diodes should
produce similar benefits.
Strengthening of product portfolio
Zetex's broad range of discrete and analog semiconductor products will strongly
complement Diodes' existing product portfolio. Diodes' strategic focus has been
to target high-growth, computer and consumer markets such as notebooks, set-top
boxes, digital audio player and flat panel displays. Zetex's high quality
industry-leading bi-polar discrete products and application-specific products
are focussed on high growth markets such as drivers for LEDs, high performance
digital audio solutions and control circuits for broadcasting over satellites.
Zetex believes these portfolios will strengthen and extend Diodes' product
offering, effectively positioning the company in these high-growth markets as
well as expanding Diodes' position in the industrial and automotive end-markets.
Zetex's power management products (for example current monitor and gate
drivers) will increase the depth of Diodes' discrete and analog product
portfolio and strengthen Diodes' position in the discrete and analog
semiconductor market.
Expansion of geographical footprint
Diodes' revenues are mostly derived from North America and Asia whereas Zetex
derives significant revenues from Europe. In 2007, 4.2% of Diodes revenues were
derived from European operations, while Zetex derived 36% of its revenue from
Europe. The combination of Diodes and Zetex will provide the Enlarged Group
geographic balance and opportunities to cross-sell products and services to an
expanded customer base.
Enhanced scale
The enhanced scale of the enlarged Diodes-Zetex group means that Zetex will
benefit from lower overhead costs and procurement advantages coupled with
enlarged sales and engineering organisation and operational efficiencies.
Significant revenue synergies
The Diodes Directors expect that the combination of Diodes and Zetex will
generate significant revenue and certain cost synergies as a result of the
enhanced scale. Revenue synergies will be derived from cross-selling products to
a broader customer base, while cost synergies will be achieved through, among
other things, reduction of procurement costs, research and development and
public company costs. Procurement costs are likely to be reduced as a result of
enhanced scale. Additionally, the Diodes directors believe that Diodes' low-cost
wafer fabrication and packaging expertise will help improve the gross margins on
Zetex's products.
Financial impact on Diodes
The acquisition of Zetex is expected to be accretive to Diodes' US GAAP earnings
per share within the first 12 months of the Effective Date. This statement
should not be interpreted to mean that earnings per share will necessarily match
or be greater than those for the relevant preceding financial period.
2. Background to and reasons for the recommendation
Zetex has built a reputation as a leading designer and manufacturer of high
performance discrete and analog semiconductor solutions for signal processing
and power management applications.
The business of Zetex has been in its current form since 2004, when Telemetrix
PLC disposed of its two non-core subsidiary businesses, Trend and Network
Services, in order to focus its resources on the Zetex semiconductor business.
Previously, Telemetrix PLC floated on the London Stock Exchange in 1984,
acquiring the Zetex business in 1989 and the Trend Communications business in
1990. Following these disposals, Telemetrix PLC changed its name to Zetex plc on
23 April 2004. Zetex disposed of its former operating site, Gem Mill, on 4 April
2007 after transferring its operations to the Zetex Technology Park in
Chadderton, UK in late 2005. Zetex acquired Mikron AG on 17 April 2005, a German
semiconductor design services business specialising in the design and supply of
Application Specific Integrated Circuit (ASIC) semiconductor products.
The Zetex Directors have given consideration to whether or not Zetex would
benefit from becoming part of the Diodes Group, and they believe that there
would be considerable commercial benefits in Zetex becoming part of the Diodes
Group, for the following reasons:
- the Zetex Directors believe that the Recommended Proposal recognises
the substantial underlying value in Zetex's business which the Zetex Directors
believe is not currently reflected in the price at which Zetex's shares have
recently traded;
- the Zetex business would benefit greatly from Diodes' sales and
distribution channels in Asia, which would enable Zetex to grow its revenues
more quickly than if it were to remain an independent company;
- Zetex would benefit significantly from the consolidation of the supply
chain infrastructure and enhanced economies of scale as part of the Diodes
Group;
- both Zetex and Diodes have a number of proprietary technologies which
could be shared across the enlarged group;
- Diodes has a broad spectrum of semiconductor products which would be
enhanced by an acquisition of Zetex due to the strength of the Zetex product
portfolio, which includes a number of differentiated, value-add products;
- that Zetex, as part of the enlarged group, will be better able to
compete in markets in which it currently has limited resources
In addition to the above, the Zetex Directors also considered Zetex's ability to
continue to grow, sustain acceptable growth rates, and deliver acceptable
returns to Zetex Shareholders as an independent company. The Zetex Directors
also considered Zetex's ability to compete as a smaller manufacturer in the
volatile global marketplace, against low cost imports from overseas and larger
manufacturers employing economies of scale to production. Accordingly, the Zetex
Directors believe that the Recommended Proposal is fair and reasonable and fully
reflects the opportunities and threats faced by Zetex. It is against this
background that the Zetex Directors recommend unanimously that the Zetex
Shareholders vote in favour of the Recommended Proposal at the Meetings.
Undertakings
Diodes has received undertakings to vote in favour of the Scheme and the
resolutions at the Court Meeting and the General Meeting from:
- each of the Zetex Directors in respect of their beneficial
shareholdings in Zetex amounting to, in aggregate, 789,134 Zetex Shares,
representing 0.8 per cent. of Zetex's existing issued ordinary share capital;
and
- Aberforth Partners LLP, in respect of the entire number of Zetex Shares
to which they have been granted voting authority over amounting to, in
aggregate, 23,835,564 Zetex Shares, representing 22.9 per cent. of Zetex's
existing issued ordinary share capital; and
- Titan International Limited in respect of the entire number of Zetex
Shares which they control amounting to, in aggregate, 34,287,908 Zetex Shares,
representing 32.9 per cent. of Zetex's existing issued ordinary share capital.
In aggregate therefore, Diodes has received irrevocable undertakings to vote in
favour of the Recommended Proposal in respect of a total of 58,912,606 Zetex
Shares representing approximately 56.5 per cent. of the existing issued ordinary
share capital of Zetex.
Further details of these undertakings are set out in Appendix III to this
announcement.
Information on the Diodes Group
Diodes is a global manufacturer and supplier of high-quality application
specific standard products within the broad discrete and analog semiconductor
markets, serving the consumer electronics, computing, communications, industrial
and automotive markets. Diodes is listed on NASDAQ with a market capitalisation
of approximately US$1 billion (on a fully diluted basis) as at 2 April 2008 and
is part of the S&P SmallCap 600 Index. Founded in 1959, Diodes' product
portfolio consists of over 4,000 products which it sells to approximately 130
original equipment manufacturers (OEMs) and electronic manufacturing services
(EMS) providers. In addition, Diodes sells its products to approximately 10,000
customers served indirectly by approximately 60 distributors. Diodes has a wafer
fabrication facility in Missouri, an analog design centre in Taiwan, two
manufacturing facilities in Shanghai as well as sales and engineering offices in
Shanghai and Shenzhen. Diodes' corporate headquarters are located in Dallas,
Texas.
For the year ended 31 December 2007, Diodes reported US GAAP revenues of US$401
million and for the quarter ended 31 December 2007, Diodes reported US GAAP
revenues of US$107 million. Through organic growth and acquisitions, Diodes
achieved year-on-year revenue growth of 59.9 per cent. and 16.9 per cent. in
2006 and 2007, respectively.
Structure of the Acquisition
It is intended that the Acquisition will be implemented by way of a court
approved scheme of arrangement between Zetex and the Scheme Shareholders under
section 895 of the Companies Act 2006, the provisions of which will be set out
in full in the Scheme Document. The purpose of the Scheme is to provide for
BidCo to become the owner of the entire issued share capital of Zetex. The
procedure involves an application by Zetex to the Court to sanction the Scheme
and to confirm the cancellation of the Scheme Shares, in consideration for which
Scheme Shareholders will receive cash as described in paragraph 3 above.
To become effective, the Scheme requires, among other things, the approval of a
majority in number of the Scheme Shareholders present and voting in person or by
proxy at the Court Meeting, representing not less than 75 per cent. in value of
the Scheme Shares voted by such Scheme Shareholders, together with the sanction
of the Court and the passing of the resolution(s) necessary to implement the
Scheme at the General Meeting. Following the Meetings, the Scheme must be
sanctioned and the Reduction confirmed by the Court, and will only become
effective on delivery to the Registrar of Companies of:
- a copy of the Scheme Court Order; and
- a copy of the Reduction Court Order,
and, in the case of the Reduction Court Order, it being registered by the
Registrar of Companies together with the minute of the Reduction. Upon the
Scheme becoming effective, it will be binding on all Scheme Shareholders,
irrespective of whether or not they attended or voted at the Court Meeting or
the General Meeting.
The Acquisition will be made on the terms of, and subject to, the Conditions set
out in this announcement and to be set out in the Scheme Documentation,
including approvals by Zetex Shareholders and the sanction of the Scheme by the
Court. The Scheme Document will include full details of the Scheme, together
with notices of the Court Meeting and the General Meeting and the expected
timetable. The Scheme Documentation will be despatched to Zetex Shareholders
and, for information only, to holders of options granted under the Zetex Share
Schemes, in due course.
Diodes and BidCo reserve the right to elect to implement the acquisition of the
Zetex Shares by way of a takeover offer. In such event, the Acquisition will be
implemented on the same terms (subject to appropriate amendments), so far as
applicable, as those which would apply to the Scheme except that the Acquisition
may exclude Zetex Shareholders resident in certain overseas jurisdictions.
Management and employees
Diodes attaches great importance to the skills, experience and knowledge of the
Zetex management and employees. Both the Zetex Board and the Diodes Board
believe that opportunities for employees of the Enlarged Group will be enhanced
through the combination of the Diodes and Zetex businesses. In particular, both
the Zetex Board and the Diodes Board believe that many Zetex employees will
benefit from a broader range of opportunities for personal and professional
development as part of the Enlarged Group.
The Diodes Board has given assurances to the Zetex Directors that, following the
Scheme becoming effective, the existing employment rights, including pension
rights, of all employees and management of Zetex will be fully safeguarded.
Following the Scheme becoming effective, a joint team comprising both Zetex and
Diodes management will be set up to assess how best to take advantage of the
combined businesses' strong strategic position and growth opportunities. This
will include assessing an appropriate integration strategy; evaluating the
combined property portfolio; and developing the best shape and structure for the
Enlarged Group for the future.
The Diodes Board currently expects to develop the joint businesses utilising the
principal locations of Zetex.
The Diodes Board intends to build and expand on the Zetex Board's existing
strategy for growth.
The non-executive Zetex Directors will resign from the Zetex Board upon the
Scheme becoming effective.
Zetex Share Schemes
Appropriate proposals will be made to participants in the Zetex Share Schemes in
due course. Details of these proposals will be set out in the Scheme Document
and in separate letters to be sent to participants in the Zetex Share Schemes.
Financing
The consideration payable by BidCo under the terms of the Acquisition will be
funded from a combination of new financing arrangements provided by an affiliate
of UBS and Diodes' existing cash resources.
UBS, financial adviser to Diodes and BidCo, confirms that sufficient resources
are available to BidCo to satisfy the full cash consideration of 85.45 pence for
each Zetex Share payable to Zetex Shareholders under the terms of the
Acquisition.
Implementation Agreement and inducement fee
Diodes and Zetex have entered into an Implementation Agreement which sets out,
among other things, various matters in relation to the implementation of the
Scheme, cooperation in relation to the Acquisition, the conduct of Zetex's
business prior to the Effective Date or lapse of the Acquisition, a inducement
fee and an undertaking not to solicit a Competing Proposal.
Zetex has also agreed that, if a third party makes an Independent Competing
Offer Announcement, the Zetex Board may not withdraw the Scheme and recommend
such offer until it has afforded to Diodes a period of two Business Days to
communicate to Zetex a revision to the terms of the Acquisition. If Diodes
communicates such a revised offer to Zetex within the two Business Day
timeframe, then the Zetex Board will recommend Diodes' revised offer if the
Zetex Directors, acting reasonably and having sought independent advice,
consider it more favourable than the terms offered under the Independent
Competing Offer Announcement.
Zetex has agreed to pay to Diodes an inducement fee of �891,299 if between the
date of this announcement and the date upon which the Scheme or Offer lapses or
is withdrawn:
a) a Competing Proposal (or any amendment, variation or revision of
such) is announced and such Competing Proposal subsequently becomes or is
declared unconditional in all respects or is otherwise completed or implemented;
or
b) the Zetex Directors (or any committee of the Zetex Directors) fail
unanimously to recommend the Acquisition or withdraw or adversely modify or
qualify their recommendation of the Acquisition; or
Zetex enters into an agreement with any third party pursuant to which Zetex
agrees to pay a fee to such third party upon the occurrence of any events
similar or substantially equivalent to any of those upon which the inducement
fee is payable under the Implementation Agreement.
The inducement fee will only become due and payable seven days after the Scheme
or Offer lapses or is withdrawn.
The Implementation Agreement shall, subject to the requirements of the Panel and
save in respect of any accrued obligation to pay the inducement fee referred to
above or any other rights which have arisen before termination, terminate upon
the earliest to occur of:
(a) a Competing Proposal becomes or is declared wholly
unconditional or is completed;
(b) if the Scheme is not sanctioned by Zetex shareholders at the
Court Meeting or the resolutions are not passed at the General Meeting, unless
Diodes has previously elected to implement the Acquisition by way of an Offer
(in accordance with the Implementation Agreement);
(c) if the Court declines or refuses to sanction the Scheme,
unless Diodes has previously elected to implement the Acquisition by way of an
Offer (in accordance with the Implementation Agreement);
(d) if Diodes elects to implement the Acquisition by way of an
Offer (in accordance with the Implementation Agreement) and such Offer lapses or
is withdrawn;
(e) if either party is in material breach of the Implementation
Agreement, by notice from the party not in breach;
(f) if at any time prior to satisfaction of the Conditions, the
recommendation by the Zetex Directors to vote in favour of the Scheme or to
accept an Offer, is withdrawn, qualified or adversely amended;
(g) if any of the Conditions which has not been waived is (or
becomes) incapable of satisfaction or if Diodes notifies Zetex that,
notwithstanding the fact that it has the right to waive such Condition, it will
not do so;
(h) if any Condition which is incapable of waiver becomes
incapable of satisfaction; or
(i) if the Conditions shall not have been all satisfied or
waived (as the case may be) by 31 July 2008.
Under the terms of the Implementation Agreement, Diodes has retained the right
to effect the Acquisition by way of a takeover offer for Zetex.
Disclosure of interests in Zetex
As at 2 April 2008, and save for the undertakings referred to paragraph 6
above, neither BidCo nor any of the directors of BidCo nor, so far as BidCo is
aware, any party acting in concert with BidCo, has any interest in, or right to
subscribe for, any Zetex Shares or securities convertible or exchangeable into
Zetex Shares ("Zetex Securities"), nor does any such person have any short
position (whether conditional or absolute and whether in the money or otherwise)
including short positions under derivatives or arrangement in relation to Zetex
Securities. For these purposes, "arrangement" includes any indemnity or option
arrangement or any agreement or understanding, formal or informal, of whatever
nature, relating to Zetex Securities which may be an inducement to deal or
refrain from dealing in such securities. In the interests of secrecy before
this announcement, BidCo has not made any enquiries in respect of the matters
referred to in this paragraph of certain parties who may be deemed by the Panel
to be acting in concert with them for the purposes of the Scheme. 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 Scheme Document.
General
Before the Scheme becomes effective, Zetex will make an application to the
London Stock Exchange to cancel trading in the Zetex Shares on its market for
listed securities and to the UK Listing Authority to cancel the admission of the
Zetex Shares to the Official List on the Effective Date. It is also proposed
that, following the Effective Date and after its shares are delisted, Zetex will
be re-registered as a private limited company. The Acquisition will be subject
to the Conditions set out in Appendix I. Appendix II contains the bases of
calculation and sources of certain information contained in this announcement.
Appendix III contains details of the undertakings. The definitions of certain
terms used in this announcement are set out in Appendix IV.
Enquiries:
Zetex plc Tel: +44 (0)161 622 4444
Liz Airey, Chairman
Hans Rohrer, Chief Executive Officer
Rothschild (financial adviser to Zetex plc) Tel: +44 (0)161 827 3800
Andrew Thomas
James Gaskell
Citigate Dewe Rogerson (PR advisers to Zetex) Tel: +44 (0)20 7638 9571
Toby Mountford
Justin Griffiths
Diodes Incorporated
Dr Keh-Shew Lu Tel: +1 972 385 2810
Carl Wertz Tel: +1 805 446 4800
UBS Investment Bank (financial adviser to BidCo and Diodes Tel: +1 310 556 6700
Incorporated)
Gavin Domm Tel: +1 310 556 6700
Gavin Slader Tel: +1 310 556 6700
Craig Calvert Tel: +44 (0) 20 7567 8000
Shelton Group (IR adviser to Diodes) Tel: +1 949 224 3874
Leanne Sievers
This announcement is not intended to, and does not constitute or form any part
of, an offer or invitation to sell or subscribe for or purchase any securities
or solicitation of any vote or approval in any jurisdiction pursuant to the
Recommended Proposal or otherwise. The Recommended Proposal will be carried out
solely through the Scheme Document, which will contain the full terms and
conditions of the Recommended Proposal (including details of how to vote in
respect of the Recommended Proposal). Any acceptance or other response to the
Recommended Proposal should be made only on the basis of the information in the
Scheme Document. Zetex Shareholders are advised to read the formal
documentation in relation to the Recommended Proposal carefully, once it has
been dispatched.
The distribution of this announcement in jurisdictions other than the UK may be
restricted by law and therefore any persons who are subject to the laws of any
jurisdiction other than the UK should inform themselves about, and observe, any
applicable requirements. This announcement has been prepared for the purpose of
complying with English law and the Code and the information disclosed may not be
the same as that which would have been disclosed if this announcement had been
prepared in accordance with the laws of jurisdictions outside the UK.
Rothschild is regulated in the UK by the Financial Services Authority and is
acting exclusively for Zetex in connection with the Recommended Proposal and
no-one else and will not be responsible to anyone other than Zetex for providing
the protections afforded to its clients or for providing advice in relation to
the Recommended Proposal or any other matters referred to in this announcement.
UBS is acting exclusively for Diodes and BidCo and no-one else in connection
with the Recommended Proposal and will not be responsible to anyone other than
Diodes and BidCo for providing the protections afforded to clients of UBS or for
providing advice in relation to the Recommended Proposal or any matter referred
to in this announcement.
Forward looking statements
This announcement includes "forward-looking statements". These statements are
based on the current expectations of the management of Zetex and Diodes and are
naturally subject to uncertainty and changes in circumstances. The
forward-looking statements contained in this announcement include statements
regarding the expected timing and scope of the Acquisition. Forward-looking
statements include, without limitation, statements typically containing words
such as "intends", "expects", "anticipates", "targets", "estimates", "believe",
"will", "may", "should", would", "could" and words of similar import. Although
Zetex and Diodes believe that the expectations reflected in such forward-looking
statements are reasonable, Zetex and Diodes can give no assurance that such
expectations will prove to have been correct. By their nature, forward-looking
statements involve risk and uncertainty because they relate to events and depend
on circumstances that will occur in the future. There are a number of factors
that could cause actual results and developments to differ materially from those
expressed or implied by such forward-looking statements. These factors include,
but are not limited to, the satisfaction of the Conditions to the Acquisition,
and Diodes' and BidCo's ability to successfully integrate the operations and
employees of Zetex, as well as additional factors, such as: local and global
political and economic conditions; significant price discounting by competitors;
changes in consumer habits and preferences; foreign exchange rate fluctuations
and interest rate fluctuations (including those from any potential credit rating
decline); legal or regulatory developments and changes; the uncertainties of
litigation; Diodes' and BidCo's ability successfully to expand internationally
and manage growth; the impact of any acquisitions or similar transactions;
competitive product and pricing pressures; production or distribution
disruptions and changes in the supply and cost of raw materials; and non-payment
of receivables by distributors. Other unknown or unpredictable factors could
cause actual results to differ materially from those in the forward-looking
statements. Given these risks and uncertainties, investors should not place
undue reliance on forward-looking statements as a prediction of actual results.
Zetex, Diodes and BidCo assume no obligation to update publicly or revise
forward-looking statements, whether as a result of new information, future
events or otherwise, except to the extent legally required.
Rule 8 Dealing disclosure requirements
Under the provisions of Rule 8.3 of the Code, if any person is, or becomes,
"interested" (directly or indirectly) in 1 per cent. or more of any class of
"relevant securities" of Zetex, all "dealings" in any "relevant securities" of
Zetex (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 London Business Day following the date of the
relevant transaction. This requirement will continue until the date on which
the Acquisition and/or Scheme becomes effective, 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 Zetex, 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 Zetex by Diodes, BidCo or Zetex, or by any of their respective
"associates", must be disclosed by no later than 12.00 noon (London time) on the
London business day following the date of the relevant transaction.
A disclosure table, giving details of the companies in whose "relevant
securities" "dealings" should be disclosed, and the number of such securities in
issue, can be found on the 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 be found on the
Panel's website. If you are in any doubt as to whether or not you are required
to disclose a dealing under Rule 8, you should consult the Panel.
Appendix I
Conditions to Implementation of the Acquisition
1. The Acquisition will be conditional upon the Scheme
becoming unconditional and effective, subject to the Code, by no later than 31
July 2008 or such later date (if any) as BidCo and Zetex may agree and (if
required) the Panel and the Court may allow.
2. The Scheme will be conditional upon:
(a) the approval by a majority in number of Scheme Shareholders
representing 75 per cent. or more in value of the Scheme Shares, present and
voting, either in person or by proxy, at the Court Meeting (or at any
adjournment of such meeting);
(b) the resolution or resolutions required to implement the
Scheme and to approve the disposals being passed by the requisite majority at
the General Meeting;
(c) the sanction of the Scheme by the Court (with or without
modification, but subject to any modification being on terms acceptable to BidCo
and Zetex), and an office copy of the Scheme Court Order being delivered for
registration to the Registrar of Companies in England and Wales; and
(d) the confirmation of the Reduction by the Court (with or
without modification, but subject to any modification being on terms acceptable
to BidCo and Zetex), and an office copy of the Reduction Court Order and minute
of such reduction attached thereto being delivered for registration to, and
registered by, the Registrar of Companies in England and Wales.
3. Zetex and BidCo have agreed that the necessary action to
make the Scheme effective will not be taken unless the following conditions have
been satisfied or waived by BidCo:
(a) no government or governmental, quasi-governmental,
supranational, statutory or regulatory body or association, institution or
agency (including any trade agency) or any court or other body (including any
professional or environmental body) or person in any jurisdiction (each a
"Relevant Authority") having decided to take, instituted or threatened any
action, proceeding, suit, investigation, enquiry or reference or enacted, made
or proposed and there not continuing to be outstanding any statute, regulation,
order or decision that would or might be reasonably expected to:
(i) make the Acquisition or its implementation or the
acquisition of any shares in, or control of, Zetex by any member of the Wider
Diodes Group void, unenforceable or illegal or directly or indirectly prohibit
or otherwise restrict, delay or interfere with the implementation of, or impose
additional conditions or obligations with respect to, or otherwise challenge,
the Acquisition or its implementation or the acquisition of any shares in, or
control of, Zetex by any member of the Wider Diodes Group;
(ii) require, prevent or delay the divestiture (or alter the
terms of any proposed divestiture) by the Wider Diodes Group or the Wider Zetex
Group of all or any part of their respective businesses, assets or properties or
impose any limitation on their ability to conduct all or any part of their
respective businesses and to own any of their respective assets or properties;
(iii) impose any limitation on, or result in any delay in, the
ability of any member of the Wider Diodes Group to acquire or hold or to
exercise effectively, directly or indirectly, all or any rights of ownership of
shares or other securities (or the equivalent) in, or to exercise management
control over, any member of the Wider Zetex Group or on the ability of any
member of the Wider Zetex Group to hold or exercise effectively, directly or
indirectly, all or any rights of ownership of shares or other securities (or the
equivalent) in, or to exercise management control over, any other member of the
Wider Zetex Group;
(iv) require any member of the Wider Diodes Group or of the Wider
Zetex Group to acquire or offer to acquire any shares or other securities (or
the equivalent) in any member of the Wider Zetex Group or any member of the
Wider Diodes Group (other than pursuant to the Scheme);
(v) impose any limitation on the ability of any member of the
Wider Diodes Group or the Wider Zetex Group to integrate or co-ordinate its
business, or any part of it, with the businesses or any part of the businesses
of any other member of the Wider Diodes Group and/or the Wider Zetex Group; or
(vi) otherwise adversely affect the business, assets, financial or
trading position or profits or prospects of any member of the Wider Diodes Group
or of the Wider Zetex Group which in each case is material in the context of the
Wider Zetex Group or the Wider Diodes Group, in each case taken as whole,
and all applicable waiting and other time periods during which any such Relevant
Authority could decide to take, institute or threaten any such action,
proceeding, suit, investigation, enquiry or reference having expired, lapsed or
been terminated;
(b) all necessary filings having been made and all appropriate
waiting periods (including any extensions thereof) under any applicable
legislation or regulation of any jurisdiction having expired, lapsed or been
terminated in each case in respect of the Acquisition and the acquisition of any
shares in, or control of, Zetex by BidCo and all authorisations, orders, grants,
recognitions, confirmations, licences, consents, clearances, permissions and
approvals ("authorisations") necessary or appropriate in any jurisdiction for or
in respect of the Acquisition and the proposed acquisition of any shares in, or
control of, Zetex by BidCo being obtained in terms and in a form reasonably
satisfactory to BidCo from appropriate Relevant Authorities and such
authorisations together with all authorisations necessary or appropriate for any
member of the Wider Zetex Group to carry on its business remaining in full force
and effect and no intimation of any intention to revoke, suspend, restrict or
modify or not to renew any of the same having been made and all material and
necessary statutory or regulatory obligations in any jurisdiction having been
complied with;
(c) except as Disclosed there being no provision of any
agreement, arrangement, licence or other instrument to which any member of the
Wider Zetex Group is a party or by or to which any such member or any of its
assets is or may be bound, entitled or subject which, as a result of the making
or implementation of the Acquisition or the acquisition or proposed acquisition
by any member of the Wider Diodes Group of any shares in, or change in the
control or management of, Zetex or otherwise, would or might result in:
(i) any moneys borrowed by or any other indebtedness (actual or
contingent) of any such member of the Wider Zetex Group becoming repayable or
capable of being declared repayable immediately or earlier than the stated
repayment date or the ability of such member to borrow monies or incur any
indebtedness being withdrawn or inhibited;
(ii) the creation or enforcement of any mortgage, charge or other
security interest over the whole or any part of the business, property or assets
of any such member of the Wider Zetex Group or any such security interest
(whenever arising or having arisen) becoming enforceable;
(iii) any assets or interest of any such member of the Wider Zetex
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;
(iv) the interest or business of any such member of the Wider Zetex
Group in or with any other person, firm or company (or any agreements or
arrangements relating to such interest or business) being terminated or
adversely affected;
(v) any such member of the Wider Zetex Group ceasing to be able
to carry on business under any name under which it presently does so;
(vi) the value of any such member of the Wider Zetex Group or its
financial or trading position being prejudiced or adversely affected;
(vii) any such agreement, arrangement, licence or other instrument
being terminated or adversely modified or any onerous obligation arising or any
adverse action being taken or arising thereunder; or
(viii) the creation of any liabilities (actual or contingent) by any
such member,
and no event having occurred which, under any provision of any agreement,
arrangement, licence or other instrument to which any member of the Wider Zetex
Group is a party or by or to which any such member or any of its assets may be
bound or be subject, could result in any events or circumstances as are referred
to in subparagraphs (i) to (viii) of this paragraph (c) unless, if such
provision exists, such provision shall have been waived, modified or amended on
terms reasonably satisfactory to BidCo;
(d) except as Disclosed no member of the Wider Zetex Group
having since 31 December 2007:
(i) issued or agreed to issue or authorised the issue of
additional shares of any class, or securities convertible into, or rights,
warrants or options to subscribe for or acquire, any such shares or convertible
securities (except (A) issues to Zetex or wholly owned subsidiaries of Zetex or
(B) under Zetex Share Schemes);
(ii) recommended, declared, paid or made any bonus, dividend or
other distribution, whether payable in cash or otherwise, other than a
distribution by any wholly-owned subsidiary of Zetex;
(iii) except for intra-Zetex Group transactions implemented or
authorised any merger or demerger or other than in the ordinary course of
trading and provided not material acquired or disposed of or transferred,
mortgaged or charged, or created any other security interest over, any asset or
any right, title or interest in any asset;
(iv) except for intra-Zetex Group transactions or the Scheme,
implemented or authorised any reconstruction, amalgamation, scheme or other
transaction or arrangement;
(v) purchased, redeemed or repaid any of its own shares or other
securities or reduced or made or authorised any other change in its share
capital (other than pursuant to the Zetex Share Schemes);
(vi) except in the ordinary and usual course of business made or
authorised any change in its loan capital or issued or authorised the issue of
any debentures or incurred or increased any indebtedness or contingent
liability;
(vii) entered into, varied or terminated, or authorised the entry
into, variation or termination of, any contract, commitment or arrangement
(whether in respect of capital expenditure or otherwise) which is outside the
ordinary course of trading or which is of a long term, onerous or unusual nature
or magnitude or which involves or could involve an obligation of a nature or
magnitude which is material in the context of the Wider Zetex Group taken as a
whole;
(viii) entered into any contract, commitment or arrangement which
would be restrictive on the business of any member of the Wider Zetex Group or
the Wider Diodes Group, taken as a whole;
(ix) 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;
(x) taken any corporate action or had any legal proceedings
started or threatened against it for its winding-up (voluntary or otherwise),
dissolution or reorganisation (or for any analogous proceedings or steps in any
jurisdiction) or for the appointment of a receiver, administrator,
administrative receiver, trustee or similar officer (or for the appointment of
any analogous person in any jurisdiction) of all or any of its assets and
revenues;
(xi) waived, compromised or settled any material claim;
(xii) entered into or varied the terms of any service agreement or
arrangement with any director or senior executive of the Zetex Group;
(xiii) made or consented to any 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; or
(xiv) entered into any contract, commitment or arrangement or passed
any resolution or made any offer (which remains open for acceptance) with
respect to, or proposed or announced any intention to effect or propose, any of
the transactions, matters or events referred to in this Condition 3(d);
(e) since 31 December 2007 (except as Disclosed):
(i) no adverse change having occurred in the business, assets,
financial or trading position or profits of the Wider Zetex Group taken as
whole;
(ii) no litigation, arbitration proceedings, prosecution or other
legal proceedings having been threatened, announced, instituted or remaining
outstanding by, against or in respect of any member of the Wider Zetex Group or
to which any member of the Wider Zetex Group is a party (whether as plaintiff or
defendant or otherwise) and no investigation by any Relevant Authority or other
investigative body against or in respect of any member of the Wider Zetex Group
having been threatened, announced, instituted or remaining outstanding by,
against or in respect of any member of the Wider Zetex Group which would or
might materially adversely affect the Wider Zetex Group taken as a whole; and
(iii) no contingent or other liability having arisen which would
or might adversely affect the Wider Zetex Group taken as a whole;
(f) BidCo not having discovered that:
(i) any financial, business or other information publicly
disclosed at any time by any member of the Wider Zetex Group is materially
misleading, contains a material misrepresentation of fact or omits to state a
material fact necessary to make the information contained therein not materially
misleading;
(ii) save for liabilities incurred in connection with the Scheme,
any member of the Wider Zetex Group is subject to any liability, contingent or
otherwise, which is not Disclosed;
(iii) any past or present member of the Wider Zetex Group has
failed to comply with any applicable legislation or regulations of any
jurisdiction or any notice or requirement of any Relevant Authority with regard
to the storage, disposal, discharge, spillage, release, leak or emission of any
waste or hazardous or harmful substance or any substance likely to impair the
environment or harm human or animal health or otherwise relating to
environmental matters or that there has otherwise been any such storage,
disposal, discharge, spillage, release, leak or emission (whether or not the
same constituted non-compliance by any person with any such legislation or
regulation, and whenever the same may have taken place), any of which non-
compliance would be likely to give rise to any liability (whether actual or
contingent) or cost on the part of any member of the Wider Zetex Group; or
(iv) there is or is likely to be any obligation or liability
(whether actual or contingent) to make good, repair, re-instate or clean up any
property now or previously owned, occupied, operated or made use of or
controlled by any past or present member of the Wider Zetex Group under any
environmental legislation, regulation, notice, circular or order of any Relevant
Authority in any jurisdiction,
which in each case is material in the context of the Wider Zetex Group taken as
a whole.
4. BidCo reserves the right to waive all or any of the
Conditions in paragraph 3 above, in whole or in part.
5. If BidCo is required by the Panel to make an offer for any
Zetex Shares under Rule 9 of the Code, BidCo may make such alterations to the
above Conditions as are necessary to comply with that Rule.
6. BidCo reserves the right to elect to implement the
Acquisition by way of a takeover offer. In such event, such offer will be
implemented on the same terms (subject to appropriate amendments, including
(without limitation) an acceptance condition set at 90 per cent. (or such lesser
percentage (being more than 50 per cent.) as BidCo may decide) of the shares to
which such offer relates and of the voting rights carried by those shares), so
far as applicable, as those which would apply to the Scheme.
7. The Zetex Shares will be acquired by BidCo free from all
liens, charges, encumbrances, rights of pre-emption and any other third party
rights of any nature whatsoever and together with all rights attaching thereto
including the right to receive in full all dividends and other distributions
declared after the date of this announcement.
8. The Acquisition and the Scheme are governed by English law
and will be subject to the exclusive jurisdiction of the English courts and the
conditions set out above.
9. "Disclosed" means (i) disclosed in the Zetex Annual Report
and Accounts, (ii) publicly announced by or on behalf of Zetex (by delivery of
an announcement to a Regulatory Information Service) prior to 3 April 2008 or
(iii) otherwise fairly disclosed to Diodes or BidCo in the written materials
included in the online data room relating to the Acquisition provided by Codex
from 25 February 2008 to 3 April 2008.
Appendix II
Sources of Information and Bases of Calculation
1. The value attributed to the existing issued ordinary share
capital of Zetex is based upon 104,306,469 Zetex Shares. In accordance with
Rule 2.10 of the Code, Zetex confirms that there are 104,306,469 Zetex Shares in
issue, the ISIN number for which is GB0008812496.
2. Unless otherwise stated, the financial information on Zetex
is extracted from the audited consolidated financial statements of Zetex for the
year ended 31 December 2007.
3. Unless otherwise stated, the financial information on
Diodes is extracted from the audited consolidated financial statements of Diodes
for the year ended 31 December 2007.
4. The prices for Zetex Shares have been derived from the
Daily Official List and represent the Closing Price on the relevant date.
5. The net cash of Zetex of �15.847 million as at 31 December
2007 is based on the audited consolidated financial statements of Zetex for the
year ended 31 December 2007.
Appendix III
Details of Irrevocable Undertakings
1. Diodes has received irrevocable undertakings to vote (or
procure the vote) in favour of the Recommended Proposal from the Zetex Directors
in respect of a total of 789,134 Zetex Shares (their entire beneficial holdings
of Zetex Shares(1)) representing approximately 0.8 per cent. of the existing
issued ordinary share capital of Zetex (prior to the exercise of options
pursuant to the Zetex Share Schemes prior to the Scheme becoming effective).
These undertakings will remain binding even if a higher competing offer is made
but will lapse in the event that:
(a) the Scheme does not become effective by 19 June 2008 (or such
later date as Zetex and Diodes may, with the consent of the Panel, agree) and
prior to that time, if Diodes elects to implement the Acquisition by way of a
Code offer, an offer document has not been issued by Diodes; or
(b) an offer document as described above is issued prior to 31
May 2008 (or such later date as Zetex and Diodes may, with the consent of the
Panel, agree) and such offer lapses or is withdrawn.
Details of the number of Zetex Shares in respect of which each Zetex Director
has granted an irrevocable undertaking (as described above) are as follows:
Zetex Director Number of Zetex Shares for which each Percentage of existing issued Zetex
Zetex Director has granted an Shares (on the basis set out in
irrevocable undertaking paragraph 1 above)
EP Airey 258,344 0.25%
H Rohrer 157,584 0.15%
M Geh 17,796 0.02%
CK Greene 72,605 0.07%
Professor M J Norton 38,660 0.04%
RE Venter 178,940 0.17%
B Waite 65,205 0.06%
2. Diodes has also received irrevocable undertakings to vote
(or procure the vote) in favour of the Recommended Proposal from Titan
International Limited (owned by a trust in which Mr R E Venter has a beneficial
interest) in respect of a total of 34,287,908 Zetex Shares (their entire holding
of Zetex Shares) representing approximately 32.9 per cent. of the existing
issued ordinary share capital of Zetex (prior to the exercise of options
pursuant to the Zetex Share Schemes prior to the Scheme becoming effective).
These undertakings will remain binding unless:
(a) the Scheme does not become effective by 19 June 2008 (or such
later date as Zetex and Diodes may, with the consent of the Panel, agree) and
prior to that time, if Diodes elects to implement the Acquisition by way of a
Code offer, an offer document has not been issued by Diodes; or
(b) an offer document as described above is issued prior to 31
May 2008 (or such later date as Zetex and Diodes may, with the consent of the
Panel, agree) and such offer lapses or is withdrawn; or
(c) a third party announces its firm intention to make an offer
for all the issued Zetex Shares and the value of the consideration (including
any non-cash consideration) under such offer is not less than 113.65 pence per
Zetex Share.
3. Diodes has further received an irrevocable undertaking to
vote in favour of the Scheme and any Resolutions required to approve or
implement the Scheme from Aberforth Partners LLP ("Aberforth"), an institutional
shareholder, in respect of a total of 23,835,564 Zetex Shares (representing the
entire number of Zetex Shares which Aberforth have been granted voting authority
over) representing approximately 22.9 per cent. of the existing issued ordinary
share capital of Zetex (prior to the exercise of options pursuant to the Zetex
Share Schemes prior to the Scheme becoming effective) (the "Aberforth Shares").
The undertakings given by Aberforth:
(a) are subject to all regulations applicable to authorised unit
trusts;
(b) do not apply to Zetex Shares, the subject of the undertaking,
to the extent that they are the subject of a distribution to an investor in an
open ended collective investment scheme by means of a redemption in specie;
(c) are subject to any termination or amendment of any letter of
Aberforth's authority from the beneficial owner of such Zetex Shares.
This undertaking will remain binding unless:
(a) the Scheme is withdrawn or does not become effective; or
(b) a third party announces its firm intention to make an offer
which, in accordance with the Code, constitutes a higher competing offer in
respect of Zetex Shares where such offer has, in Aberforth's reasonable opinion,
a value of not less than 92.4 pence per Zetex Share; or
(c) if the Aberforth Shares are sold (regardless of the identity
of the acquirer) at a price of not less than 92.4 pence per Aberforth Share..
4. In aggregate therefore, Diodes has received irrevocable
undertakings to vote (or procure the vote) in favour of the Recommended Proposal
in respect of a total of 58,912,606 Zetex Shares, representing approximately
56.5 per cent. of the existing issued ordinary share capital of Zetex (prior to
the exercise of options pursuant to the Zetex Share Schemes prior to the Scheme
becoming effective).
Appendix IV
Definitions
The following definitions apply throughout this announcement, unless the context
requires otherwise:
�, Sterling, pence or p means the lawful currency of the United Kingdom.
Acquisition means the recommended acquisition of the entire issued and to be
issued share capital of Zetex by BidCo and/or any other members of the Diodes
Group to be implemented by way of the Scheme (or should BidCo elect by means of
a takeover offer) on the terms and subject to the Conditions set out in this
announcement and any subsequent revision, variation, extension or renewal
thereof (such agreed terms and Conditions also being set out in the Scheme
Document).
Annual Report and Accounts means the annual report and accounts of Zetex for the
year ended 31 December 2007.
Board means the board of directors of Zetex or Diodes as the context permits.
BidCo means Diodes Holdings UK Limited.
Business Day means any day, other than a Saturday or Sunday or a public holiday
in the UK, consisting of the time period from 12.01 a.m. until and including
12.00 midnight (London time).
Closing Price means the closing middle-market quotation of a Zetex Share at the
close of business on a particular trading day as derived from the Daily Official
List published for that day.
Code means The City Code on Takeovers and Mergers.
Competing Proposal means a proposed offer, tender offer, merger, acquisition,
scheme of arrangement, recapitalisation or other business combination relating
to any direct or indirect acquisition or purchase of 51 per cent. or more of the
Zetex Shares or of the business or assets of Zetex and its subsidiaries (taken
as a whole) proposed by any third party which is not an associate (as defined in
the Code) of Diodes.
Conditions means the conditions to the implementation of the Acquisition
(including the Scheme), which are set out in Appendix I to this announcement.
Court means the High Court of Justice in England and Wales.
Court Meeting means the meeting (and any adjournment thereof) of holders of
Scheme Shares convened by order of the Court under section 896 of the Companies
Act 2006 to consider and vote on the Scheme.
Court Order means the Scheme Court Order and/or the Reduction Court Order, as
the case may be.
Diodes Board means the board directors of Diodes Incorporated.
Diodes Directors means the directors of Diodes at the date of this announcement.
Diodes Group means Diodes, its subsidiaries and its subsidiary undertakings.
Daily Official List means the Daily Official List of the London Stock Exchange.
Effective Date means the day on which the Scheme becomes effective in accordance
with its terms.
Enlarged Group means Diodes and its direct and indirect subsidiaries and its
subsidiary undertakings following the Acquisition becoming effective.
Excluded Shares means any Zetex Shares beneficially owed by the Diodes Group or
any Zetex Shares held in treasury by Zetex.
General Meeting means the General Meeting of Zetex Shareholders (including any
adjournment thereof) to be convened in connection with the Acquisition.
Implementation Agreement means the implementation agreement between Diodes and
Zetex dated 4 April 2008.
Independent Competing Offer Announcement means an announcement of a firm
intention to make an offer comprising a Competing Proposal whether or not made
pursuant to Rule 2.5 of the Code.
Listing Rules means the listing rules made by the Financial Services Authority
under section 73A of the Financial Services and Markets Act 2000, as amended
from time to time.
London Stock Exchange means London Stock Exchange plc.
Meetings means the Court Meeting and the General Meeting.
Offer means a recommended offer made on behalf of BidCo to acquire all of the
Zetex Shares, on the terms and subject to the conditions set out in this
announcement (subject to appropriate amendments, including (without limitation)
the inclusion of an acceptance condition set at 90 per cent.(or such lesser
percentage (being more than 50 per cent.) as BidCo may decide), of the shares to
which such offer relates) and, where the context admits, any subsequent
revision, variation, extension or renewal of such offer.
Offer Period means the period commencing on 4 April 2008.
Official List means the Official List of the UK Listing Authority.
Panel means The Panel on Takeovers and Mergers.
Recommended Proposal means the Acquisition, the Scheme, the Reduction and the
other matters to be considered at the Meetings.
Reduction means the proposed reduction of capital under section 137 of the
Companies Act 1985 associated with the Scheme.
Reduction Court Hearing means the hearing by the Court of the application to
confirm the Reduction.
Reduction Court Order means the order of the Court, granted at the Reduction
Court Hearing, confirming the Reduction.
Regulatory Information Service means any of the services set out in Appendix III
to the Listing Rules.
Rothschild means NM Rothschild & Sons Limited.
Scheme means the scheme of arrangement under section 895 of the Companies Act
2006 to be proposed by Zetex to the Zetex Shareholders, with or subject to any
modification, addition or condition approved or imposed by the Court and agreed
by Zetex and BidCo.
Scheme Court Hearing means the hearing by the Court of the application to
sanction the Scheme.
Scheme Court Order means the order of the Court, granted at the Scheme Court
Hearing, sanctioning the Scheme under section 899 of the Companies Act 2006.
Scheme Document or Scheme Documentation means the document to be addressed to,
among others, Zetex Shareholders containing, among other things, the Scheme, and
the notices of the Meetings.
Scheme Shareholders means holders of Scheme Shares.
Scheme Shares means the Zetex Shares:
(a) in issue at the date of the Scheme Document;
(b) issued after the date of the Scheme Document and before the
voting record time in respect of the Court Meeting (if any); and
(c) issued on or after the voting record time in respect of the
Court Meeting and at or before the record time for the Reduction in respect of
which the original or any subsequent holders thereof are bound by the Scheme or
in respect of which the holder thereof shall have agreed in writing to be bound
by the Scheme (if any),
in each case other than the Excluded Shares (if any).
Special Resolution means the special resolution to approve, among other things,
the cancellation of the entire issued share capital of Zetex, the alteration of
Zetex's articles of association and such other matters as may be necessary to
implement the Scheme and the delisting of Zetex Shares.
UBS or UBS Investment Bank means UBS Limited and UBS Securities LLC.
UK or United Kingdom means the United Kingdom of Great Britain and Northern
Ireland.
UK Listing Authority means 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.
Wider Diodes Group means Diodes and its subsidiary undertakings, associated
undertakings and any other undertakings in which Diodes and such undertakings
(aggregating their interests) have a substantial interest.
Wider Zetex Group means Zetex and its subsidiary undertakings, associated
undertakings and any other undertakings in which Zetex and such undertakings
(aggregating their interests) have a substantial interest.
Zetex means Zetex plc.
Zetex Board means the board of directors of Zetex.
Zetex Directors means the directors of Zetex at the date of this announcement.
Zetex Group means Zetex, its subsidiaries and subsidiary undertakings.
Zetex Shareholders means holders of Zetex Shares.
Zetex Share Schemes means the Zetex 1994 Executive Share Option Scheme, the
Zetex 2003 Executive Share Option Scheme, the Zetex 2007 Executive Share Option
Scheme, the Zetex 2007 Bonus Co-Investment Plan, the Zetex 2007 Performance
Share Plan and the Zetex SAYE scheme.
Zetex Shares means ordinary shares of 5 pence each in the capital of Zetex.
All times referred to are London time unless otherwise stated.
For the purposes of this announcement, "subsidiary undertaking", "associated
undertaking" and "undertaking" have the meanings given by the Companies Act 1985
(but for these purposes ignoring paragraph 20(1)(b) of Schedule 4A to the
Companies Act 1985) and "substantial interest" means a direct or indirect
interest in 20 per cent. or more of the equity capital of an undertaking.
--------------------------
(1) Ms EP Airey has not given an irrevocable undertaking in respect of 30,000
Zetex Shares which are held by her through a personal equity plan and
accordingly which she is not able to vote or procure be voted in favour of the
Recommended Proposals. In addition, 179,602 Zetex Shares held in the Leanne
Venter Trust of which Mr RE Venter is a trustee, but not otherwise interested
pursuant to Part 22 of the Companies Act 2006 are not subject to an irrevocable
undertaking in the form granted by the Zetex Directors.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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