NOT FOR RELEASE, PUBLICATION OR
DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO OR FROM ANY RESTRICTED
JURISDICTIONS OR JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A
VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION.
THE FOLLOWING ANNOUNCEMENT IS AN
ADVERTISEMENT AND NOT A PROSPECTUS OR A PROSPECTUS EQUIVALENT
DOCUMENT AND INVESTORS SHOULD NOT MAKE ANY INVESTMENT DECISION IN
RELATION TO THE NEW SHARES EXCEPT ON THE BASIS OF THE INFORMATION
IN THE SCHEME DOCUMENT, THE PROSPECTUS AND THE CIRCULAR WHICH ARE
BEING PUBLISHED TODAY.
FOR IMMEDIATE RELEASE
23 May 2017
Recommended
all-share offer by John Wood Group PLC (“Wood Group”) for Amec
Foster Wheeler plc (“Amec Foster Wheeler”)
Publication of Prospectus and Circular (this “Announcement”)
On 13 March 2017 the Boards of
Wood Group and Amec Foster Wheeler jointly announced that they had
reached agreement on the terms of a unanimously recommended
all-share offer for Amec Foster Wheeler
(the “Combination”) (the “Original
Announcement”). The Wood Group Board believes that the
Combination will accelerate delivery of Wood Group’s strategic
objectives to improve its service offering in project delivery, to
enhance capability across the value chain in core oil and gas
markets, and to broaden and deepen end market and customer
exposure.
Unless otherwise defined in this Announcement, terms defined in
Wood Group’s Original Announcement of the Combination on
13 March 2017 have the same meaning
where used in this Announcement.
Under the terms of the Combination, Amec Foster Wheeler
Shareholders will receive 0.75 new Wood Group Shares for each Amec
Foster Wheeler Share. Based on the Closing Price of £7.52 per Wood
Group Share on 10 March 2017, this
represents a value of approximately £5.64 per Amec Foster Wheeler
Share and a premium of 15.3 per cent. to the Closing Price of £4.89
on 10 March 2017 (being the last
Business Day before the date of the Original Announcement).
Today, Wood Group published a Circular and a Prospectus ahead of
the Wood Group General Meeting, scheduled for 11.00 a.m. on 15 June
2017. Approval will be sought from Wood Group Shareholders
for the Combination to be effected by a scheme of arrangement of
Amec Foster Wheeler.
The Circular and the Prospectus have each been approved by the
UK Listing Authority and are now available at www.woodgroup.com. A
copy of each of the Circular and the Prospectus has been submitted
to the National Storage Mechanism and will shortly be available for
viewing at www.morningstar.co.uk/uk/nsm. Amec Foster Wheeler has
separately published a Scheme Document ahead of its own General
Meeting on 15 June 2017.
The Combination is intended to result in:
- the creation of a global leader in project, engineering and
technical services delivery across a broad range of industrial
markets, predominantly focussed on oil & gas which represents
c. 55 per cent. of pro-forma revenues across upstream, midstream
and downstream;
-
accelerated delivery of Wood Group’s strategic objectives to
improve its asset life cycle service offering in project delivery,
to enhance capability across the value chain in core oil and gas
markets, and to broaden and deepen end market and customer exposure
and reduce earnings volatility through oil and gas cycles;
-
Wood Group’s measured risk appetite continuing in a flexible
asset light model with revenues derived principally from
reimbursable work; and
-
superior returns from the delivery of significant cost and
revenue synergies. The level of annual pre-tax cost synergies
arising from the transaction by the end of the third year following
completion of the Combination (“Completion”) was increased
to £150m per annum from £110m per annum on 5
April 2017 and has been further increased to at least £165m
per annum, again by the end of the third year following the
completion of the Combination, in the Circular and the Prospectus
released today.
The Combined Group will be led by Robin
Watson as Chief Executive and David
Kemp as CFO. Ian Marchant
will continue as Chair. As disclosed in the circular and the
prospectus, on completion, certain members of the Amec Foster
Wheeler Board will join the Board of the Combined Group.
Roy Franklin will join as Deputy
Chair and Senior Independent Director, and Ian McHoul and Linda
Adamany will be appointed as non-executive directors.
Expected timetable
The following dates and times are subject to change and will
depend on, among other things, the date on which antitrust (and
other) Conditions to the Scheme are satisfied or waived:
Publication of Wood Group
Prospectus and Circular |
23 May 2017 |
Publication of Amec Foster
Wheeler Scheme Document |
23 May 2017 |
Wood Group General
Meeting |
15 June 2017 |
Amec Foster Wheeler General
Meeting |
15 June 2017 |
Court Meeting |
15 June 2017 |
Scheme Court Hearing to sanction
the Scheme |
“D” (a date expected to be in the
fourth quarter of 2017, subject to regulatory clearances) |
Effective Date |
D+1 |
Admission of New Wood Group
Shares on London Stock Exchange |
By 8.00 a.m. on D+2 |
Enquiries
Wood Group
Andrew Rose, Head of Investor Relations |
Tel: +44 (0)12 2453 2716 |
J.P. Morgan Cazenove
(financial adviser and corporate broker to Wood Group) |
Michael Wentworth-Stanley / Dag
Skattum
Richard Perelman / James Robinson |
Tel: +44 (0)20 7742 4000 |
Credit Suisse
(financial adviser and corporate broker to Wood Group) |
Jonathan Grundy / John Hannaford
James Peterkin / Joe Hannon |
Tel: +44 (0)20 7888 8888 |
Brunswick (Public
Relations Adviser to Wood Group) |
Patrick Handley |
Tel: +44 (0)20 7404 5959 |
Notes to Editors
Wood Group is an international energy services company with
around US$5bn sales and operating in
more than 40 countries. The Group designs, modifies, constructs and
operates industrial facilities mainly for the oil & gas sector,
right across the asset life cycle. We enhance this with a wide
range of specialist technical solutions including our world leading
subsea, automation and integrity solutions. Our real differentiator
is our range of services, the quality of our delivery, the passion
of our people, our culture and values. We are extending the scale
and scope of our core services into adjacent industries. Visit Wood
Group at www.woodgroup.com and connect with us on LinkedIn and
Twitter.
Board Appointments
Roy Franklin is currently a
non-executive director of Amec Foster Wheeler, Deputy Chairman of
Statoil ASA and a non-executive director of Santos Ltd. He was
previously Chairman of Keller Group plc.
Ian McHoul is currently CFO of
Amec Foster Wheeler and a non-executive director of Britvic plc. He
was previously a non-executive director of Premier Foods plc.
Linda Adamany is currently a
non-executive director of Amec Foster Wheeler, a non-executive
director of Coeur Mining, Inc. and a non-executive director of
Leucadia National Corporation. She was previously a non-executive
director of National Grid plc.
No further information is required to be disclosed in respect of
the new Wood Group Directors pursuant to Listing Rule 9.6.13R.
Update to the Wood Group Quantified
Financial Benefits Statement
The Quantified Financial Benefits Statement, containing
statements of estimated cost savings and synergies arising from the
Combination, is set out below:
The Wood Group Directors are
confident that, as a direct result of the Combination, the Combined
Group could generate attractive synergies and create additional
shareholder value.
The Original Announcement included
statements of estimated pre-tax cost synergies expected to arise
from the Combination of at least £110m per annum, by the end of the
third year following Completion. On 5 April
2017, the Wood Group Directors updated an estimate of the
pre-tax cost synergies expected to arise from the Combination from
at least £110m per annum to at least £150m per annum by the end of
the third year following Completion. The Wood Group Directors have
now further increased their estimate of pre-tax cost synergies to
at least £165m per annum, again by the end of the third year
following Completion. In US$, the pre-tax cost synergies have
increased from approximately US$134m
per annum to approximately US$200m
per annum, using the same US dollar:sterling exchange rate of
1.2171:1 as set out in the Original Announcement. The Wood Group
Directors believe that these pre-tax cost synergies further enhance
the attractiveness of the Combination.
The increase in the expected level of
pre-tax cost synergies is attributable to a more developed
assessment of the synergy opportunity carried out since the
Original Announcement, which has enabled a refinement of the
synergy initiatives and the related risk adjustments incorporated
in the underlying calculations.
The expected sources of quantified
cost synergies, which are in addition to synergies previously
targeted and already underway by Wood Group and Amec Foster Wheeler
separately, comprise:
-
operating efficiencies: approximately 50 per
cent. of the identified cost synergies are expected to be generated
from economies of scale in addressable operating cost, efficiencies
in operational procurement spend and the reduction of duplicate
costs across country and regional leadership;
-
corporate efficiencies: approximately 20 per
cent. of the identified cost synergies are expected to be generated
from the reduction of duplicate costs across board and executive
leadership teams, in addition to other corporate and group
functional costs; and
-
administration efficiencies: approximately 30
per cent. of the identified cost synergies are expected to be
generated from the consolidation of overlapping office locations,
the elimination of duplicated IT systems and the reduction of
duplicate costs across central support functions.
Approximately 30 per cent. of the
identified cost synergies are expected to be realised by the end of
the first year following Completion, rising to 70 per cent. by the
end of the second year following Completion and to 100 per cent. by
the end of the third year following Completion.
These anticipated cost synergies,
which are reported under the City Code as set out in Appendix I of
the Scheme Document, reflect both the beneficial elements and the
costs, and will accrue as a direct result of the Combination and
would not be achieved on a standalone basis.
Wood Group estimates that realisation
of these cost synergies would give rise to one-off costs of
approximately £190 million (US$231
million) incurred in the first three years
post-Completion.
Aside from the one-off costs referred
to above, the Wood Group Directors do not expect any material
dis-synergies to arise in connection with the Combination.
Paragraph 17 of Part II of the Scheme Document describes the
proposal of a remedy commitment that Wood Group has made to the
CMA. Should such proposed remedy commitment be agreed with the CMA
and implemented, it is anticipated that approximately £25m per
annum of the pre-tax cost synergies would not be achieved.
Furthermore, approximately £25m of the one-off costs to realise the
cost synergies would not be incurred. In US$, the reduction in cost
synergies would be approximately US$30m per annum and the reduction in one-off
costs approximately US$30m, using the
same US dollar:sterling exchange rate of 1.2171:1 as set out in the
original announcement of the Combination on 13 March 2017.
Over the longer term, the Wood Group Board believes that the
Combined Group would also have the potential to realise additional
revenue synergies that are not included in the Quantified Financial
Benefits Statement, from the delivery of an expanded range of
services to an enlarged customer base, a broader offering in the
core oil and gas market, cross selling, pull through opportunities
and insourcing by the Combined Group of currently outsourced
activity.
None of the statements contained above is intended as a profit
forecast and should not be interpreted as such.
Bases of belief
In preparing the Quantified Financial Benefits Statement, Amec
Foster Wheeler has provided Wood Group with certain operating and
financial information to facilitate a detailed analysis in support
of evaluating the potential synergies available from the
Combination. In circumstances where data has been limited for
commercial or other reasons, Wood Group management has made
estimates and assumptions to aid its development of individual
synergy initiatives.
The cost base used as the basis for the quantified exercise is
Amec Foster Wheeler’s 2016 cost base, consistent with Amec Foster
Wheeler’s 2016 unaudited full year trading update provided by Amec
Foster Wheeler to Wood Group and released by Amec Foster Wheeler on
13 March 2017. Wood Group adjusted
this information to take into account recent cost savings announced
by Amec Foster Wheeler on 27 October
2016.
The assessment and quantification of the expected synergies have
in turn been informed by Wood Group management’s industry
experience as well as their experience of executing and integrating
past acquisitions.
In arriving at the estimate of synergies set out in this
Announcement, the Wood Group Board has assumed that Amec Foster
Wheeler’s support function activities, such as Finance and Human
Resources, will transition onto Wood Group’s existing systems.
In general, the synergy assumptions have in turn been risk
adjusted, exercising a degree of prudence in the calculation of the
estimated synergy benefit set out above.
The Wood Group Board has, in addition, made the following
assumptions, all of which are outside the influence of the Wood
Group Board:
-
there will be no material impact on the underlying operations of
either company or their ability to continue to conduct their
businesses;
-
there will be no material change to macroeconomic, political,
regulatory or legal conditions in the markets or regions in which
Wood Group and Amec Foster Wheeler operate that materially impact
on the implementation or costs to achieve the proposed cost
savings;
-
there will be no material change in current foreign exchange
rates; and
-
there will be no change in tax legislation or tax rates or other
legislation or regulation in the countries in which Wood Group and
Amec Foster Wheeler operate that could materially impact the
ability to achieve any benefits.
This analysis assumes no business disposal other than as
referred to above.
Reports
As required by Rule 28.1(a) of the City Code, PwC, as reporting
accountants to Wood Group, and J.P. Morgan Cazenove and Credit
Suisse, as financial advisers to Wood Group, have provided the
opinions required under that Rule relating to the Quantified
Financial Benefits Statement set out above. Copies of these
reports are set out below. Any references to anticipated
synergies should be read in conjunction with these reports. PwC,
J.P. Morgan Cazenove and Credit Suisse have each given and have not
withdrawn their consent to the publication of their respective
report in the form and context in which it is included.
Notes
The statements of estimated synergies relate to future actions
and circumstances which, by their nature, involve risks,
uncertainties and contingencies. As a result, the synergies
referred to may not be achieved, or may be achieved later or sooner
than estimated, or those achieved could be materially different
from those estimated.
Due to the scale of the Combined Group, there may be additional
changes to the Combined Group’s operations. As a result, and given
the fact that the changes relate to the future, the resulting
synergies may be materially greater or less than those
estimated.
No statement in the Quantified Financial Benefits Statement or
in this Announcement generally should be interpreted to mean that
earnings, earnings per share or income, cash flow from operations
or free cash flow for the Combined Group for the current or future
financial years would necessarily match or exceed the historical
published earnings, earnings per share or income, cash flow from
operations or free cash flow for Wood Group, Amec Foster Wheeler or
the Combined Group (as appropriate).
PRICEWATERHOUSECOOPERS LLP REPORT ON QUANTIFIED FINANCIAL BENEFITS
STATEMENT
The Directors
John Wood Group PLC
15 Justice Mill Lane
Aberdeen
AB11 6EQ
J.P Morgan Limited
25 Bank Street
Canary Wharf
London
E14 5JP
Credit Suisse International
One Cabot Square
London
E14 4QJ
(J.P. Morgan Limited and Credit Suisse International together
the “Financial Advisers”)
23 May 2017
Dear Ladies and Gentlemen,
Updated Quantified Financial Benefits Statement by
John Wood Group PLC
We report on the quantified financial benefits statement (the
“Statement”) by the Directors included in the Scheme
Document dated 23 May 2017 (the
“Investment Circular”) to the effect that:
“The JWG Directors are confident
that, as a direct result of the Combination, the Combined Group
could generate attractive synergies and create additional
shareholder value.
The Announcement included statements
of estimated pre-tax cost synergies expected to arise from the
Combination of at least £110 million per annum by the end of the
third year following completion of the Combination. On 5 April 2017, the JWG Directors updated this
estimate of the pre-tax cost synergies expected to arise from the
Combination from at least £110 million per annum to at least £150
million per annum by the end of the third year following completion
of the Combination. The JWG Directors have now further increased
their estimate of pre-tax cost synergies to at least £165 million
per annum by the end of the third year following completion of the
Combination.
In US dollars, the pre-tax cost
synergies have increased from approximately US$134 million per annum to approximately
US$200 million per annum, using the
same US dollar:sterling exchange rate of 1.2171:1 as set out in the
Announcement. The JWG Directors believe that these pre-tax cost
synergies further enhance the attractiveness of the
Combination.
The increase in the expected level of
pre-tax cost synergies is attributable to a more developed
assessment of the synergy opportunity carried out since the
Announcement, which has enabled a refinement of the synergy
initiatives and the related risk adjustments incorporated in the
underlying calculations.
The expected sources of quantified
cost synergies, which are in addition to synergies previously
targeted and already underway by JWG and Amec Foster Wheeler
separately, comprise:
(i) operating efficiencies:
approximately 50 per cent. of the identified cost synergies are
expected to be generated from economies of scale in addressable
operating cost, efficiencies in operational procurement spend and
the reduction of duplicate costs across country and regional
leadership;
(ii) corporate efficiencies:
approximately 20 per cent. of the identified cost synergies are
expected to be generated from the reduction of duplicate costs
across board and executive leadership teams, in addition to other
corporate and group functional costs; and
(iii) administration efficiencies:
approximately 30 per cent. of the identified cost synergies are
expected to be generated from the consolidation of overlapping
office locations, the elimination of duplicated IT systems and the
reduction of duplicate costs across central support
functions.
Approximately 30 per cent.of the
identified cost synergies are expected to be realised by the end of
the first year following completion of the Combination, rising to
70 per cent. by the end of the second year following completion of
the Combination and to 100 per cent. by the end of the third year
following completion of the Combination.
These anticipated cost synergies,
which are reported under the City Code as set out in Appendix I of
this document, reflect both the beneficial elements and the costs,
and will accrue as a direct result of the Combination and would not
be achieved on a standalone basis.
JWG estimates that realisation of
these cost synergies would give rise to one-off costs of
approximately £190 million (US$231
million) incurred in the first three years post-completion
of the Combination.
Aside from the one-off costs referred
to above, the JWG Directors do not expect any material
dis-synergies to arise in connection with the Combination.
Paragraph 17 of this Part II of this document describes the
proposal of a remedy commitment that JWG has made to the CMA.
Should such proposed remedy commitment be agreed with the CMA and
implemented, it is anticipated that approximately £25 million per
annum of the pre-tax cost synergies would not be achieved.
Furthermore, approximately £25 million of the one-off costs to
realise the cost synergies would not be incurred. In US dollars,
the reduction in cost synergies would be approximately US$30 million per annum and the reduction in
one-off costs approximately US$30
million, using the same US dollar:sterling exchange rate of
1.2171:1 as set out in the Announcement.”
This Statement has been made in the context of disclosure in the
Investment Circular setting out the bases of belief of the
Directors supporting the Statement and their analysis and
explanation of the underlying constituent elements.
This report is required by Rule 28.1(a)(i) of the City Code on
Takeovers and Mergers (the “Code”) and is given for the
purpose of complying with that rule and for no other purpose.
Responsibilities
It is the responsibility of the John Wood Group PLC Board to
make the Statement in accordance with the Code.
It is our responsibility to form our opinion as required by Rule
28.1(a)(i) of the Code, as to whether the Statement has been
properly compiled on the basis stated.
Save for any responsibility which we may have to those persons
to whom this report is expressly addressed or to the shareholders
of John Wood Group PLC as a result of the inclusion of this report
in the Announcement, and for any responsibility arising under Rule
28.1(a)(i) of the Code to any person as and to the extent therein
provided, to the fullest extent permitted by law we do not assume
any responsibility and will not accept any liability to any other
person for any loss suffered by any such other person as a result
of, arising out of, or in connection with this report or our
statement, required by and given solely for the purposes of
complying with Rule 23.2(b) of the Code, consenting to its
inclusion in the Investment Circular.
Basis of Opinion
We conducted our work in accordance with the Standards for
Investment Reporting issued by the Auditing Practices Board in the
United Kingdom. We have discussed
the Statement together with the relevant bases of belief (including
sources of information and assumptions) with the John Wood Group
PLC Board and with the Financial Advisers. Our work did not involve
any independent examination of any of the financial or other
information underlying the Statement.
Since the Statement and the assumptions on which it is based
relate to the future and may therefore be affected by unforeseen
events, we can express no opinion as to whether the actual benefits
achieved will correspond to those anticipated in the Statement and
the differences may be material.
Our work has not been carried out in accordance with auditing or
other standards and practices generally accepted in the United States of America or other
jurisdictions and accordingly should not be relied upon as if it
had been carried out in accordance with those standards and
practices.
Opinion
In our opinion, on the basis of the foregoing, the Statement has
been properly compiled on the basis stated.
Yours faithfully
PricewaterhouseCoopers LLP
Chartered Accountants
PricewaterhouseCoopers LLP is a
limited liability partnership registered in England with registered number OC303525.
The registered office of PricewaterhouseCoopers LLP is 1 Embankment
Place, London WC2N 6RH.
PricewaterhouseCoopers LLP is authorised and regulated by the
Financial Conduct Authority for designated investment business.
REPORT FROM J.P.
MORGAN CAZENOVE AND CREDIT SUISSE
The Directors
John Wood Group PLC
15 Justice Mill Lane
Aberdeen
AB11 6EQ
23 May 2017
Dear Ladies and Gentlemen,
Updated Quantified Financial Benefits
Statement by John Wood Group PLC (“JWG”)
We refer to the quantified financial benefits statement, the
bases of belief thereof and the notes thereto (together, the
“Statement”) made by JWG, set out in the scheme document
dated 23 May 2017 (the “Scheme
Document”), for which the Board of Directors of JWG (the
“Directors”) are solely responsible under Rule 28.1(a)(ii)
of the City Code on Takeovers and Mergers (the “Code”).
We have discussed the Statement (including the assumptions,
accounting policies, bases of calculation and sources of
information referred to therein), with the Directors and those
officers and employees of JWG who have developed the underlying
plans as well as with PricewaterhouseCoopers LLP. The
Statement is subject to uncertainty as described in the
announcement and our work did not involve an independent
examination of any of the financial or other information underlying
the Statement.
We have relied upon the accuracy and completeness of all the
financial and other information provided to us by or on behalf of
JWG and/or Amec Foster Wheeler, or otherwise discussed with or
reviewed by us, and we have assumed such accuracy and completeness
for the purposes of providing this letter.
We do not express any view as to the achievability of the
quantified financial benefits identified by the Directors.
We have also reviewed the work carried out by
PricewaterhouseCoopers LLP and have discussed with it its opinion
addressed to you and us on this matter and which is set out in the
Scheme Document, and the accounting policies and bases of
calculation for the Statement.
On the basis of the foregoing, we consider that the Statement,
for which the Directors are solely responsible, for the purposes of
the Code, has been prepared with due care and consideration.
This letter is provided to you solely in connection with Rule
28.1(a)(ii) of the Code and for no other purpose. We accept
no responsibility to JWG, Amec Foster Wheeler or their shareholders
or any person other than the Directors of JWG in respect of the
contents of this letter. We are acting exclusively as
financial advisers to JWG and no one else in connection with the
Combination between JWG and Amec Foster Wheeler and it was for the
purpose of complying with Rule 28.1(a)(ii) of the Code that JWG
requested J.P. Morgan Limited and Credit Suisse International to
prepare this report on the Statement. No person other than
the Directors of JWG can rely on the contents of, or the work
undertaken in connection with, this letter, and to the fullest
extent permitted by law, we expressly exclude and disclaim all
liability (whether in contract, tort or otherwise) to any other
person, in respect of this letter, its contents or the work
undertaken in connection with this letter or any of the results
that can be derived from this letter or any written or oral
information provided in connection with this letter.
Yours faithfully,
J.P. Morgan Limited and Credit Suisse International
Cautionary Note
Regarding Forward-Looking Statements
This Announcement contains certain
forward-looking statements with respect to the financial condition,
results of operations and business of Amec Foster Wheeler and
certain plans and objectives of Wood Group with respect
thereto. These forward-looking statements can be identified
by the fact that they do not relate only to historical or current
facts. Forward-looking statements often use words such as
“anticipate”, “target”, “expect”, “estimate”, “intend”, “plan”,
“goal”, “believe”, “hope”, “aims”, “continue”, “will”, “may”,
“should”, “would”, “could”, or other words of similar
meaning. These statements are based on assumptions and
assessments made by Amec Foster Wheeler, and/or Wood Group in light
of their experience and their perception of historical trends,
current conditions, future developments and other factors they
believe appropriate. 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
and the factors described in the context of such forward-looking
statements in this Announcement could cause actual results and
developments to differ materially from those expressed in or
implied by such forward-looking statements. Although it is
believed that the expectations reflected in such forward-looking
statements are reasonable, no assurance can be given that such
expectations will prove to have been correct and you are therefore
cautioned not to place undue reliance on these forward-looking
statements which speak only as at the date of this
Announcement. Neither Amec Foster Wheeler nor Wood Group
assumes any obligation to update or correct the information
contained in this Announcement (whether as a result of new
information, future events or otherwise), except as required by
applicable law.
There are several factors which could
cause actual results to differ materially from those expressed or
implied in forward-looking statements. Among the factors that
could cause actual results to differ materially from those
described in the forward-looking statements are changes in the
global, political, economic, business, competitive, market and
regulatory forces, future exchange and interest rates, changes in
tax rates and future business combinations or dispositions.
Additional risk factors that may
affect future results are contained in Amec Foster Wheeler’s Form
20-F for the year ended 31 December
2016 (available at www.amecfw.com and www.sec.gov). These
risk factors expressly qualify all forward-looking statements
contained in this Announcement and should also be considered by the
reader.
For a discussion of important factors
which could cause actual results to differ from forward-looking
statements relating to Wood Group and the WG Group, refer to Wood
Group’s annual report and accounts for the year ended 31 December 2016. Each forward-looking statement
speaks only as of the date of this Announcement. None of Wood
Group, the WG Group, Amec Foster Wheeler or the Amec Foster Wheeler
Group undertakes any obligation to publicly update or revise any
forward-looking statement as a result of new information, future
events or otherwise, except to the extent legally required. In
light of these risks, results could differ materially from those
stated, implied or inferred from the forward-looking statements
contained in this Announcement.
Further
Information
This Announcement is for information
purposes only and is not intended to and does not constitute or
form part of any offer to sell or subscribe for or any invitation
to purchase or subscribe for or otherwise acquire or dispose of any
securities or the solicitation of any vote or approval in any
jurisdiction pursuant to the Combination or otherwise, nor will
there be any sale, issuance or transfer of securities in any
jurisdiction in contravention of applicable law. The
Combination will be made solely pursuant to the terms of the Scheme
Document setting out the particulars of the proposed Scheme between
Amec Foster Wheeler and the Amec Foster Wheeler Shareholders to
implement the Combination with or subject to any modification,
addition or condition approved or imposed by the Court and agreed
by Amec Foster Wheeler and Wood Group (or, in the event that the
Combination is to be implemented by means of an Offer, the Offer
Document), which, together with the forms of proxy that will
accompany the Scheme Document, contain the full terms and
conditions of the Scheme, including details of how to vote in
respect of the Combination. Any decision in respect of, or
other response to, the Combination by Amec Foster Wheeler
Shareholders should be made only on the basis of the information
contained in the Scheme Document.
Amec Foster Wheeler has prepared the
Scheme Document to be distributed to Amec Foster Wheeler
Shareholders. Wood Group has prepared the Circular and has made
available the Prospectus containing information on the New Wood
Group Shares and the Combined Group. Wood Group urges Wood Group
Shareholders to read the Prospectus to be published by Wood Group
and the Circular carefully when they become available because they
contain important information in relation to the Scheme, the New
Wood Group Shares and the Combined Group. Amec Foster Wheeler urges
Amec Foster Wheeler Shareholders to read the Scheme Document and
the Prospectus carefully because they contain important information
in relation to the Scheme, the New Wood Group Shares and the
Combined Group. Any vote in respect of resolutions to be proposed
at the Wood Group General Meeting to approve the Combination, the
Scheme or related matters, should be made only on the basis of the
information contained in the Scheme Document, the Prospectus and,
the Circular.
This Announcement does not constitute
a prospectus or prospectus equivalent document.
The Combination will be subject to
the applicable requirements of the City Code, the UK Panel on
Takeovers and Mergers, the London Stock Exchange and the UK Listing
Authority.
Please be aware that addresses,
electronic addresses and certain other information provided by Amec
Foster Wheeler Shareholders, persons with information rights and
other relevant persons for the receipt of communications from Amec
Foster Wheeler may be provided to Wood Group during the offer
period as required under Section 4 of Appendix 4 of the City Code
to comply with Rule 2.11(c) of the City Code.
Overseas
jurisdictions
The release, publication or
distribution of this Announcement in jurisdictions other than the
United Kingdom may be restricted
by law and therefore any persons who are subject to the laws of any
jurisdiction other than the United
Kingdom should inform themselves about, and observe any
applicable requirements. In particular, the ability of persons who
are not resident in the United
Kingdom to vote their Amec Foster Wheeler shares with
respect to the Scheme at the Court Meeting, or to execute and
deliver Forms of Proxy appointing another to vote at the Court
Meeting on their behalf, may be affected by the laws of the
relevant jurisdictions in which they are located. Any failure to
comply with such requirements may constitute a violation of the
securities laws of any such jurisdiction. To the fullest
extent permitted by applicable law, the companies and other persons
involved in the Combination disclaim any responsibility or
liability for any violation of such restrictions by any
person. This Announcement has been prepared for the purpose
of complying with English law and the City Code and the information
disclosed may not be the same as that which would have been
disclosed if this Announcement had been prepared in accordance with
the laws of jurisdictions outside the United Kingdom. Unless
otherwise determined by Wood Group or required by the City Code,
and permitted by applicable law and regulation, the Combination
will not be made available directly or indirectly in, into or from
any Restricted Jurisdiction or where to do so would violate the
laws of a jurisdiction, and the Combination will not be capable of
acceptance from or within a Restricted Jurisdiction.
Copies of this Announcement and any
documentation relating to the Combination are not being, and must
not be, directly or indirectly, mailed, transmitted or otherwise
forwarded, distributed or sent in or into or from any Restricted
Jurisdiction and persons receiving such documents (including
custodians, nominees and trustees) must not mail or otherwise
forward, distribute or send it in or into or from any Restricted
Jurisdiction where to do so would violate the laws in that
jurisdiction, and persons receiving this Announcement and any
documents relating to the Combination (including custodians,
nominees and trustees) must not mail or otherwise distribute or
send them in, into or from such jurisdictions where to do so would
violate the laws in that jurisdiction.
If the Combination is implemented by
way of an Offer (unless otherwise permitted by applicable law and
regulation), the Offer may not be made directly or indirectly, in
or into, or by the use of mails or any means or instrumentality
(including, but not limited to, facsimile, e-mail or other
electronic transmission, telex or telephone) of interstate or
foreign commerce of, or of any facility of a national, state or
other securities exchange of any Restricted Jurisdiction and the
Offer may not be capable of acceptance by any such use, means,
instrumentality or facilities.
The availability of New Wood Group
Shares under the Combination to Amec Foster Wheeler Shareholders
who are not resident in the United
Kingdom or the ability of those persons to hold such shares
may be affected by the laws or regulatory requirements of the
jurisdiction in which they are resident. Persons who are not
resident in the United Kingdom
should inform themselves of, and observe, any applicable legal or
regulatory requirements.
The New Wood Group Shares may not be
offered, sold or delivered, directly or indirectly, in, into or
from any Restricted Jurisdiction or to, or for the account or
benefit of, any restricted overseas persons (being any Amec Foster
Wheeler Shareholders resident in, or nationals or citizens of,
Restricted Jurisdictions or who are nominees or custodians,
trustees or guardians for, citizens, residents or nationals of such
Restricted Jurisdictions) except pursuant to an applicable
exemption from, or in a transaction not subject to, applicable
securities laws of those jurisdictions. Further details in relation
to any Amec Foster Wheeler Shareholders who are resident in,
ordinarily resident in, or citizens of, jurisdictions outside the
United Kingdom, are contained in
the Scheme Document.
Additional
information for US investors
Notice to US investors in Amec Foster
Wheeler: the Combination relates to the shares of an English
company and is being made by means of a scheme of arrangement
provided for under English company law. A transaction
effected by means of a scheme of arrangement is not subject to the
tender offer rules or the proxy solicitation rules under the US
Exchange Act, and it is expected that any New Wood Group Shares to
be issued pursuant to the Scheme to Amec Foster Wheeler
Shareholders would be issued in reliance upon the exemption from
the registration requirements under the US Securities Act, provided
by Section 3(a)(10) thereof. Under applicable US securities laws,
persons (whether or not US persons) who are or will be "affiliates"
(within the meaning of Rule 144 of the US Securities Act) of Amec
Foster Wheeler or Wood Group prior to, or of Wood Group after, the
Effective Date, will be subject to certain transfer restrictions
relating to the New Wood Group Shares received in connection with
the Combination. Accordingly, the Combination is subject to the
disclosure requirements and practices applicable in the
United Kingdom to schemes of
arrangement which differ from the disclosure requirements of
United States tender offer and
proxy solicitation rules and the US Securities Act. If, in
the future, Wood Group exercises the right to implement the
Combination by way of a takeover offer and determines to extend the
offer into the United States, the
Combination will be made in compliance with applicable United States laws and regulations, including
any applicable exemptions under the US Exchange Act.
Financial information included in this Announcement and the Scheme
Document has been or will have been prepared in accordance with
accounting standards applicable in the United Kingdom that may not be comparable to
financial information of US companies or companies whose financial
statements are prepared in accordance with generally accepted
accounting principles in the United
States.
The receipt of consideration by a US
holder for the transfer of its Amec Foster Wheeler shares pursuant
to the Scheme may be a taxable transaction for United States federal income tax purposes and
under applicable United States
state and local, as well as foreign and other, tax laws. Each Amec
Foster Wheeler shareholder is urged to consult his independent
professional adviser immediately regarding the tax consequences of
the Combination applicable to him.
It may be difficult for US holders of
Amec Foster Wheeler shares to enforce their rights and any claim
arising out of the US federal laws, since Wood Group and Amec
Foster Wheeler are located primarily in a non-US jurisdiction, and
some or all of their officers and directors may be residents of a
non-US jurisdiction. US holders of Amec Foster Wheeler shares
may not be able to sue a non-US company or its officers or
directors in a non-US court for violations of the US securities
laws. Further, it may be difficult to compel a non-US company
and its affiliates to subject themselves to a US court’s
judgement.
Securities issued pursuant to the
Scheme will not be registered under any US state securities laws
and may only be issued to persons resident in a state pursuant to
an exemption from the registration requirements of the securities
laws of such state.
For the purpose of qualifying for the
exemption provided by Section 3(a)(10) of the US Securities Act,
Amec Foster Wheeler will advise the Court that its sanctioning of
the Scheme will be relied on by Wood Group as an approval of the
Scheme following a hearing on its fairness to Amec Foster Wheeler
Shareholders, at which Court hearing all Amec Foster Wheeler
Shareholders are entitled to attend in person or though counsel to
support or oppose the sanctioning of the Scheme and with respect to
which notification will be given to all such holders.
In accordance with normal UK practice and, if applicable,
pursuant to Rule 14e-5(b) of the US Exchange Act, Wood Group or its
nominees, or its brokers (acting as agents), may from time to time
make certain purchases of, or arrangements to purchase, Amec Foster
Wheeler shares outside of the US, other than pursuant to the
Combination, until the date on which the Scheme becomes effective
or lapses or is otherwise withdrawn. In addition, in
accordance with the City Code, normal United Kingdom market practice and Rule
14e-5(b) of the US Exchange Act, J.P. Morgan Cazenove and Credit
Suisse, while serving as financial advisers and brokers to Wood
Group, will each continue to act as exempt principal traders in
Amec Foster Wheeler shares on the London Stock Exchange.
These purchases and activities by exempt principal traders, which
may occur either in the open market at prevailing prices or in
private transactions at negotiated prices, and are required to be
made public in the United Kingdom
pursuant to the City Code, will be reported to a Regulatory
Information Service and will be available on the London Stock
Exchange website at www.londonstockexchange.com.
Publication on
website and availability of hard copies
A copy of this Announcement and the
documents required to be published by Rule 26 of the City Code will
be made available, subject to certain restrictions relating to
persons resident in Restricted Jurisdictions, on Wood Group’s
website at www.woodgroup.com by no later than 12 noon (London time) on the Business Day following
this Announcement. For the avoidance of doubt, the contents of
those websites are not incorporated into and do not form part of
this Announcement.
Wood Group Shareholders may request a
hard copy of this Announcement by: (i) contacting Equiniti during
business hours on 0333 207 6546 if calling from the United Kingdom, or +44 121 415 0808 if calling
from outside the United Kingdom
(lines are open from 8.30am to
5.30pm, Monday to Friday (excluding public holidays in
England and Wales))? or (ii) by submitting a request in
writing to Equiniti at Equiniti Limited, Aspect House, Spencer
Road, Lancing, West Sussex BN99
6DA, United Kingdom. If you have received this Announcement
in electronic form, copies of this Announcement and any document or
information incorporated by reference into this Announcement will
not be provided unless such a request is made. Wood Group
Shareholders may also request that all future documents,
announcements and information to be sent to them in relation to the
Combination should be in hard copy form.
If you are in any doubt about the
contents of this Announcement or the action you should take, you
are recommended to seek your own independent financial advice
immediately from your stockbroker, bank manager, solicitor,
accountant or independent financial adviser duly authorised under
the Financial Services and Markets Act 2000 (as amended) if you are
resident in the United Kingdom or,
if not, from another appropriately authorised independent financial
adviser.
J.P. Morgan
Cazenove
J.P. Morgan Limited, which conducts
its UK investment banking business as J.P. Morgan Cazenove
(“J.P. Morgan Cazenove”), is authorised and regulated in the
United Kingdom by the FCA.
J.P. Morgan Cazenove is acting exclusively for Wood Group and no
one else in connection with the Combination and the matters set out
in this Announcement and will not be responsible to anyone other
than Wood Group for providing the protections afforded to clients
of J.P. Morgan Cazenove or its affiliates, or for providing advice
in relation to the Combination or any other matters referred to in
this Announcement.
Credit Suisse
Credit Suisse International (“Credit
Suisse”), which is authorised by the Prudential Regulation
Authority and regulated by the FCA and PRA in the United Kingdom, is acting as financial adviser
exclusively for Wood Group and no one else in connection with the
Combination and the matters set out in this Announcement and will
not be responsible to anyone other than Wood Group for providing
the protections afforded to clients of Credit Suisse, nor for
providing advice in relation to the Combination, the content of
this Announcement or any matter referred to herein. Neither
Credit Suisse nor any of its subsidiaries, branches or affiliates
owes or accepts any duty, liability or responsibility whatsoever
(whether direct or indirect, whether in contract, in tort, under
statute or otherwise) to any person who is not a client of Credit
Suisse in connection with this Announcement, any statement
contained herein or otherwise.
Quantified
Financial Benefits Statement
The statements in the Quantified
Financial Benefits Statement relate to future actions and
circumstances which, by their nature, involve risks, uncertainties
and contingencies. As a result, the cost savings and synergies
referred to may not be achieved, may be achieved later or sooner
than estimated, or those achieved could be materially different
from those estimated.
No statement in the Quantified
Financial Benefits Statement, or this Announcement generally,
should be construed as a profit forecast or interpreted to mean
that the Combined Group’s earnings in the first full year following
the Effective Date, or in any subsequent period, would necessarily
match or be greater than or be less than those of Wood Group and/or
Amec Foster Wheeler for the relevant preceding financial period or
any other period. For the purposes of Rule 28 of the City Code, the
Quantified Financial Benefits Statement contained in this
Announcement is the responsibility of Wood Group and the Wood Group
Directors.
Synergy
Numbers
The synergy numbers are unaudited and
based on analysis by Wood Group’s management and on Wood Group’s
internal records.
Rounding
Certain figures included in this
Announcement have been subjected to rounding adjustments.