RNS Number:0389Q
Stirling Group PLC
22 September 2003
Not for release, distribution or publication in or into or from the USA, Canada,
Australia or Japan
22 September 2003
Recommended cash offer
for
Stirling Group plc
by
PricewaterhouseCoopers LLP
on behalf of
Potter Acquisitions Limited
Summary
The directors of Potter Acquisitions Limited ("Potter") and the Independent
Directors of Stirling Group plc ("Stirling") are pleased to announce that
agreement has been reached on the terms of a recommended cash offer ("the
Offer") to be made by PricewaterhouseCoopers LLP ("PricewaterhouseCoopers") on
behalf of Potter.
Potter is a newly incorporated company which has been formed for the purpose of
making the Offer. Following the Offer becoming or being declared unconditional
in all respects, the major investors in Potter will, directly or indirectly, be
Lloyds TSB Development Capital Limited and the three executive directors of
Stirling ("the Executive Directors").
* The Offer will be 22p in cash for each Stirling Share,
valuing the existing issued share capital of Stirling at approximately #18.7
million.
* The Offer represents a premium of 26 per cent. over the
Closing Middle Market Price of 17.5p per Stirling Share on 12 June 2003, the
last dealing date prior to the announcement on 13 June 2003 which included a
confirmation that the Executive Directors were investigating an offer of 22p per
Stirling Share.
* Stirling Shareholders will be entitled to receive and
retain the final dividend of 1.07p per Stirling Share which will be paid on 1
October 2003 to Stirling Shareholders on the register at close of business on 12
September 2003.
* In total, Potter has received irrevocable undertakings to
accept the Offer in respect of, in aggregate, 37,875,759 Stirling Shares,
representing approximately 44.6 per cent. of Stirling's existing issued share
capital.
Commenting on behalf of the Independent Directors of Stirling, Robert Coe,
Chairman of Stirling, said:
"In spite of the disappointing share price performance of recent years, the
Board of Stirling has remained committed to considering strategic initiatives to
create shareholder value, which has lead to the Offer announced today. The Offer
is being unanimously recommended by the Independent Directors."
This summary should be read in conjunction with the full text of this
announcement, including Appendix I where the conditions of the Offer are set
out.
This announcement does not constitute an offer or an invitation to purchase any
securities.
Enquiries:
Potter
Steven Bentwood 0161 926 7000
PricewaterhouseCoopers
(Financial Adviser to Potter)
Colin Gillespie 0161 245 2000
Stuart Warriner 0161 245 2000
Stirling
(Independent Director)
Robert Coe 020 7724 6060
Rothschild
(Financial Adviser to Stirling)
Richard Bailey 0161 827 3800
Claudio Veritiero 0161 827 3800
Weber Shandwick
(Public Relations Adviser to Stirling)
Chris Lynch/Josh Royston 020 7067 0720
PricewaterhouseCoopers, which is authorised and regulated by the Financial
Services Authority for designated investment business, is acting exclusively for
Potter and for no one else in relation to the Offer and will not be responsible
to anyone other than Potter for providing the protections afforded to clients of
PricewaterhouseCoopers or for providing or giving advice in relation to the
Offer or any other matter referred to in this announcement.
Rothschild, which is regulated by the Financial Services Authority, is acting
exclusively for Stirling and for no one else in connection with the Offer and
will not be responsible to anyone other than Stirling for providing the
protections afforded to clients of Rothschild or for providing or giving advice
in relation to the Offer or any other matter referred to in this announcement.
The Offer will not be made, directly or indirectly, in or into, or by use of the
mails of, or by any means or instrumentality (including, without limitation,
electronic mail, facsimile transmission, telex or telephone) of interstate or
foreign commerce of, or any facilities of a national securities exchange of, the
USA, or in or into Canada, Australia or Japan, and the Offer will not be capable
of acceptance by any such use, means or instrumentality or facilities or from or
within the USA, Canada, Australia or Japan. Accordingly, copies of the Offer
Document and the Form of Acceptance will not be, and must not be, mailed or
otherwise distributed or sent in, into or from the USA, Canada, Australia or
Japan and persons receiving the Offer Document or the Form of Acceptance
(including custodians, nominees and trustees) must not distribute or send them
in, into or from the USA, Canada, Australia or Japan. Doing so may render
invalid any purported acceptance of the Offer.
This announcement has been issued by Potter and approved by
PricewaterhouseCoopers for the purpose of section 21 of the Financial Services
and Markets Act 2000. The principal place of business of PricewaterhouseCoopers
is 1 Embankment Place, London WC2N 6RH.
Not for release, distribution or publication in or into or from the USA, Canada,
Australia or Japan
22 September 2003
Recommended cash offer
for
Stirling Group plc
by
PricewaterhouseCoopers
on behalf of
Potter Acquisitions Limited
1 Introduction
It was announced on 4 December 2002 that the Independent Directors had granted
the Executive Directors permission to explore the possibility of a public to
private transaction. On 10 June 2003, Stirling confirmed in its preliminary
results announcement that discussions were continuing with the Executive
Directors. Furthermore, the Independent Directors announced on 13 June 2003 that
the Executive Directors had indicated that they were investigating an offer for
the Company at a price of 22p per ordinary share, net of the final dividend
announced in the preliminary results. At Stirling's Annual General Meeting on 11
September 2003 it was announced that discussions with potential providers of
debt and equity funding were at an advanced stage.
Further to the announcement on 11 September 2003, the directors of Potter and
the Independent Directors of Stirling announce that agreement has been reached
between the Potter Board and the Independent Directors on the terms of a
recommended cash offer, to be made by PricewaterhouseCoopers on behalf of
Potter, for the entire issued and to be issued share capital of Stirling.
Potter is a recently incorporated company which has been formed for the purpose
of making the Offer. Following the Offer becoming or being declared
unconditional in all respects and completion of the Investment Agreement, the
shareholders in Potter will be LDC, a leading UK mid-market private equity
investor, the Co-Investment Plan, two of the Executive Directors (namely Steven
Bentwood and Peter Rusby), Solomon Investment (a company which is wholly owned
by Peter Solomon, the other Executive Director) and the Potter Chairman (who is
yet to be appointed).
Details of the recommendation of the Independent Directors are set out in
paragraph 3 of this announcement.
2 The terms of the Offer
On behalf of Potter, PricewaterhouseCoopers will offer to acquire, on the terms
and subject to the conditions set out or referred to in Appendix I to this
announcement and to be set out or referred to in the Offer Document and the Form
of Acceptance accompanying that document, all of the Stirling Shares on the
following basis:
for each Stirling Share 22p in cash
The Offer values the existing issued share capital of Stirling at approximately
#18.7 million and represents a premium of approximately:
* 7 per cent. to the Closing Middle Market Price of 20.5p per Stirling
Share on 19 September 2003, being the last dealing day prior to this
announcement;
* 19 per cent. to the Closing Middle Market Price of 18.5p per Stirling
Share on 3 December 2002, being the last dealing day prior to the announcement
by Stirling that the Executive Directors had been granted permission to explore
the possibility of a public to private transaction; and
* 26 per cent. to the Closing Middle Market Price of 17.5p per Stirling
Share on 12 June 2003, the last dealing day prior to the announcement on 13 June
2003 which included a confirmation that the Executive Directors were
investigating an offer of 22p per Stirling Share.
The Stirling Shares to be acquired pursuant to the Offer will be acquired fully
paid and free from all liens, equities, charges, encumbrances, rights of
pre-emption and other third party interests and together with all rights
attaching thereto, including the right to receive and retain all dividends and
other distributions (if any) declared, made or paid on or after the date of this
announcement, save that Stirling Shareholders will be entitled (whether or not
they accept the Offer prior to 1 October 2003) to receive and retain the final
dividend of 1.07p per Stirling Share which will be paid on 1 October 2003 to
Stirling Shareholders on the register at close of business on 12 September 2003.
If Potter receives acceptances under the Offer in respect of 90 per cent. or
more of the Stirling Shares to which the Offer relates, Potter intends to
exercise its rights pursuant to the provisions of Sections 428 to 430F
(inclusive) of the Act to acquire compulsorily the remaining Stirling Shares to
which the Offer relates.
As soon as the Potter Board considers it is appropriate to do so, and subject to
the Offer becoming or being declared unconditional in all respects and subject
to any applicable requirements of the UKLA, Potter intends to procure that
Stirling applies for cancellation, respectively, of the trading in Stirling
Shares on the London Stock Exchange's main market for listed securities and of
the listing of Stirling Shares on the Official List and also to procure that
Stirling is re-registered as a private company under the relevant provisions of
the Act. A notice period of not less than 20 business days to such cancellation
will commence upon the Offer becoming or being declared unconditional in all
respects. De-listing would significantly reduce the liquidity and marketability
of any Stirling Shares which are not acquired by Potter.
3 Recommendation
Taking account of the circumstances set out in paragraph 5 of this announcement,
the Independent Directors, who have been so advised by Rothschild, consider the
terms of the Offer to be fair and reasonable so far as Stirling Shareholders are
concerned. In providing advice to the Independent Directors, Rothschild has
taken account of the commercial assessments of the Independent Directors.
Accordingly, the Independent Directors of Stirling unanimously recommend that
all Stirling Shareholders accept the Offer, as they (and their immediate
families) have irrevocably undertaken to do in respect of, in aggregate, 867,500
Stirling Shares, representing approximately 1.0 per cent. of the existing issued
share capital of Stirling.
4 Undertakings to accept the Offer
Potter has received irrevocable undertakings to accept the Offer in respect of,
in aggregate, 37,875,759 Stirling Shares, representing approximately 44.6 per
cent. of the existing issued share capital of Stirling. This total is made up as
follows:
* the Independent Directors (including their immediate families) have
given irrevocable undertakings to accept the Offer in respect of an aggregate of
867,500 Stirling Shares, representing approximately 1.0 per cent. of the
existing issued share capital of Stirling. These irrevocable undertakings will
remain binding in the event of a competing offer;
* the Executive Directors (including their immediate families) have
given irrevocable undertakings to accept the Offer in respect of an aggregate of
1,486,781 Stirling Shares, representing approximately 1.8 per cent. of the
existing issued share capital of Stirling. These irrevocable undertakings will
also remain binding in the event of a competing offer;
* irrevocable undertakings have also been received in relation to the
shareholdings in Stirling of the remaining members of the board of Stirling (who
are neither Independent Directors nor Executive Directors), namely Peter Dubens
and Wendy Leighton, in respect of an aggregate of 848,446 Stirling Shares,
representing approximately 1.0 per cent. of the existing issued share capital of
Stirling. These irrevocable undertakings will remain binding in the event of a
competing offer; and
* certain institutional Stirling Shareholders (being Second Advance
Realisation Company Limited, JP Morgan Fleming Asset Management, Framlington
Investment Management Limited and Marlborough UK Equity Income Fund) have given
irrevocable undertakings to accept the Offer in respect of an aggregate of
34,673,032 Stirling Shares, representing approximately 40.8 per cent. of the
existing issued share capital of Stirling. These undertakings will cease to be
binding in the event that a third party announces prior to the first closing
date of the Offer a competing offer on terms which represent a 10 per cent. or
more higher value than the consideration payable under the Offer (save for the
undertaking given by Framlington Investment Management Limited , which ceases to
be binding in the event of the announcement prior to that date of a competing
third party offer of higher value).
5 Background to and reasons for the Offer
Prompted by the disappointing performance of the Company's share price over the
last three years, the board of Stirling has considered other ways of creating
shareholder value. That process culminated in granting the Executive Directors
permission to explore a public to private transaction and in the announcement of
the Offer. Set out below are the factors that the Independent Directors have
considered in their decision to recommend that Stirling Shareholders accept the
Offer.
In recent years Stirling has taken steps to diversify its markets and customer
base by acquiring Tamarind, the overseas sourcing business, and the Brands
Division. The Group, and in particular the Marks & Spencer business, has
undergone significant restructuring during recent years as it has transferred
and outsourced production to manufacturing partners based overseas. The Group's
future performance continues, however, to rely on its relationship with its
major customer, M&S. Whilst the Group remains well placed to benefit from its
position as a supplier to M&S, margin pressures will continue in this division
due to continuing fierce competition amongst high street retailers. Therefore,
unless the Group can generate incremental growth and further operational savings
from the M&S business it may be difficult to sustain historic levels of profit
and cash generation.
The business of Tamarind has also been restructured during the past year. In
order to remain competitive Tamarind continues to transfer operations to
Shanghai, where over 50 per cent. of its output is now processed. Tamarind has
provided the Group with a valuable overseas customer base and an extension of
the product offering to UK customers. Whilst the business is profitable and cash
generative, sales growth has been limited during the period since Stirling
acquired the business. Severe Acute Respiratory Syndrome (SARS) continues to
affect Tamarind in the current financial year and demonstrates the impact that
such factors can have on Group profitability.
Despite considerable management effort and investment in marketing, the
achievement of growth expectations and profitability in the Brands Division is
taking longer than anticipated. Losses have exceeded projections and the Brands
Division is still not making any contribution to profit in the current financial
year.
In assessing the Offer, the Independent Directors have also made reference to
the historic share price performance of the Company. The Offer represents:
*a premium of 19 per cent. over the Closing Middle Market Price of 18.5p
per Stirling Share on 3 December 2002, the last dealing day prior to the
announcement that the Executive Directors had been given permission to
explore the possibility of a public to private transaction;
*a premium of 26 per cent. over the Closing Middle Market Price of 17.5p
per Stirling Share on 12 June 2003, the last dealing day prior to the
announcement on 13 June 2003, which included confirmation that the Executive
Directors were investigating an offer of 22p per Stirling Share, net of the
final dividend announced on 10 June 2003;
*a premium of 63 per cent. over the Closing Middle Market Price on 26
March 2003 of 13.5p per Stirling Share, being the lowest Closing Middle
Market Price in the six month period prior to 13 June 2003; and
*a premium of 33 per cent. over the six month average Closing Middle
Market Price prior to 13 June 2003.
Since the announcement on 4 December 2002, the Independent Directors have not
received any alternative proposals or serious expressions of interest for the
whole or any part of Stirling. Accordingly, the Independent Directors have
concluded that, in the absence of the Offer, Stirling Shareholders may not be
able to realise equivalent value in cash to that represented by the Offer within
a reasonable timescale. As a result, the options open to Stirling Shareholders
are: to accept the Offer; to remain a Stirling Shareholder; or to sell their
Stirling Shares in the market. However, if they remain a Stirling Shareholder,
there can be no certainty that the share price will return either to historic
levels or to a level above the Offer in the future.
In making the recommendation in paragraph 3 of this announcement, the
Independent Directors have considered the Offer from Potter against the factors
set out above and note, in particular, the lack of investor interest in small UK
textile companies, that no other serious expressions of interest have been
received since the announcement on 4 December 2002 and that institutional
shareholders in Stirling representing 40.8 per cent. of the existing share
capital have irrevocably undertaken to accept the Offer.
6 Information on the Stirling Group
The Stirling Group is an international procurement business, servicing retail
clients around the world.
The core business of Stirling is Bentwood, a business that has been supplying
clothing to M&S for over 50 years. It is the third largest adult clothing
supplier to M&S and is seen by the Executive Directors as a key strategic
partner of M&S for ladies lingerie.
In August 1999 Stirling completed the acquisition of Tamarind, a Hong Kong based
sourcing company, with an international customer base and a broad range of
products.
In order to further diversify the business away from dependence on M&S and to
move the Group closer to the eventual customer, the Stirling Group decided to
look for brands which complemented the existing skills in the Group. This
culminated in December 2001 in the acquisition of the boardsport brands Headworx
and Voodoo Dolls, followed by the acquisition of the swimwear and nightwear
brand OTT in 2002.
The following summary on current trading is extracted from the Chairman's
Statement made at the Annual General Meeting of Stirling on 11 September 2003:
"The benefits of the accelerated restructuring of our core business, which took
place last year are becoming evident in the current performance of this
division. Our brand business, meanwhile, has a number of challenges still to be
addressed and progress remains slower than we had hoped."
7. Information on Potter, LDC and Lloyds TSB Group
Potter
Potter is a recently incorporated company which has been established
specifically for the purpose of making the Offer and which, since incorporation,
has not traded or entered into any material obligations other than in connection
with the Offer and the financing thereof. Currently, Peter Rusby, one of the
Executive Directors, holds the one Potter Ordinary Share, nil paid, which
comprises the entire issued share capital of Potter. Following the Offer
becoming or being declared unconditional in all respects and completion of the
Investment Agreement, the holdings of the issued voting equity share capital of
Potter will be: LDC and Co-Investment Plan (together) 49.00 per cent., each of
the Executive Directors (other than Peter Solomon) 16.15 per cent., Solomon
Investment 16.15 per cent. and the Potter Chairman 2.55 per cent.. The Potter
Board currently comprises the three Executive Directors. It is intended that,
immediately following the Offer becoming or being declared unconditional in all
respects, Paul Johnson of LDC and the Potter Chairman will be appointed to the
Potter Board.
LDC
LDC is a leading UK mid-market private equity investor. Since its formation in
1981 LDC has invested in excess of #670 million in over 325 companies. Since 1
January 2001 LDC has invested approximately #267 million in 52 new business
opportunities through its 6 main offices in the United Kingdom. LDC is
authorised and regulated by the Financial Services Authority.
In the year to 31 December 2002 LDC reported total income of #41.8 million
(2001: #72.3 million) and a loss before taxation of #14.7 million (2001: profit
of #39.0 million). As at 31 December 2002 the total and net assets of LDC were
#351.2 million and #73.6 million respectively.
LDC funds its activities through a combination of LDC's own retained earnings
and share capital, and borrowings from Lloyds TSB Group.
LDC is a private limited company incorporated under the laws of England and
Wales. LDC's registered office is at 45 Old Bond Street, London W1S 4QT. LDC's
ultimate holding company is Lloyds TSB Group plc.
Lloyds TSB Group
The Lloyds TSB Group is one of the leading UK based financial services groups,
whose businesses provide a comprehensive range of banking and financial services
in the UK and overseas.
In the year to 31 December 2002 Lloyds TSB Group plc reported total consolidated
income of #8,878 million (2001: #8,889 million) and a consolidated profit before
taxation of #2,607 million (2001: #3,161 million). As at 31 December 2002 the
consolidated total and net assets of Lloyds TSB Group plc were #252,758 million
and #7,972 million respectively.
Stirling Shareholders should note that neither LDC nor any other member of
Lloyds TSB Group has committed to any further equity or debt funding of Potter
beyond that described in this announcement.
8. Information on financing
Full acceptance of the Offer by Stirling Shareholders will (assuming that all
outstanding options under the Stirling Share Option Schemes which are, or as a
result of the Offer become, exercisable and in respect of which the exercise
price is less than 22p, are exercised and that no other such options, and no
conversion rights under the Stirling Convertible Loan Notes, are exercised)
result in a maximum cash consideration payable by Potter of approximately #18.9
million. Funds totalling #29.7 million have been raised for the purposes of
financing the Offer and expenses in connection with the Offer, refinancing
Stirling's existing debt and redeeming the Stirling Convertible Loan Notes and
have been sourced as follows:
(i) senior and mezzanine debt financing totalling #19 million
has been arranged by Royal Bank of Scotland. The mezzanine loan facility carries
warrants convertible into Potter C Ordinary Shares which will entitle the holder
to 1.5 per cent. of the total proceeds from a winding up, sale or return of
capital of Potter;
(ii) Steven Bentwood, Peter Rusby and Solomon Investment will
subscribe pursuant to the Investment Agreement for an aggregate of 48,450 Potter
Ordinary Shares (at an aggregate subscription price of #48,450) and for an
aggregate of 6,640 Potter B Preference Shares (at an aggregate subscription
price of #664,000) and it is intended that the Potter Chairman will subscribe
for 2,550 Potter Ordinary Shares (at an aggregate subscription price of #2,550)
and for 350 Potter B Preference Shares (at an aggregate subscription price of
#35,000); and
(iii) LDC and the Co-Investment Plan will subscribe pursuant to
the Investment Agreement for an aggregate of 49,000 Potter A Ordinary Shares (at
an aggregate subscription price of #49,000) and LDC will also subscribe
#9,946,000 for the Potter Loan Notes.
In addition, approximately #29.5 million of working capital and ancillary
facilities have been arranged to support the future trading of the Stirling
Group.
9. Arrangements with the Executive Directors
Pursuant to the provisions of the Investment Agreement, following the Offer
becoming or being declared unconditional in all respects, each of the Executive
Directors will enter into a new service agreement with Potter. These new service
contracts will be similar in all material respects to the current service
contracts of the Executive Directors with Stirling, save that each of Steven
Bentwood and Peter Rusby have agreed, subject to the Offer becoming or being
declared unconditional in all respects, to forego their right to a pension based
upon salary at the date of retirement and the new contract will provide them
with a pension based upon their respective salaries for the year ended 31 March
2002
Further, each Executive Director (other than Peter Solomon) and Solomon
Investment will then hold Potter Ordinary Shares and Potter B Preference Shares,
and will have paid subscription monies therefor, as set out in the table below:
Name Number of Total Number of Total
Potter Ordinary subscription Potter B subscription
Shares price payable (#) Preference Shares price payable (#)
Steven Michael Bentwood 16,150 16,150 2,214 221,400
Peter Grenville Rusby 16,150 16,150 2,213 221,300
Solomon Investment 16,150 16,150 2,213 221,300
The Potter Ordinary Shares held by the Executive Directors (other than Peter
Solomon) and Solomon Investment will represent 51 per cent. of the issued voting
equity share capital of Potter. The Articles of Association of Potter contain a
ratchet whereby on a flotation, sale or winding-up of Potter the proceeds
attributable to the Potter A Ordinary Shares and the Potter Ordinary Shares
(after deduction of an amount equal to the aggregate subscription monies paid on
all Potter Shares, an amount equal to all arrears of dividend on any Potter
Shares and the pro rata amount attributable to the Potter C Ordinary Shares) are
to be allocated as to 70 per cent. to the holders of the Potter A Ordinary
Shares and 30 per cent. to the holders of the Potter Ordinary Shares until the
holders of the Potter A Ordinary Shares have realised a specified level of
return (which varies dependent upon the timing of such flotation, sale or
winding-up) on their investment in such Potter Shares, whereafter 50 per cent.
of any balance of such proceeds will be allocated to the holders of the Potter A
Ordinary Shares and 50 per cent. to the holders of the Potter Ordinary Shares.
Potter has received irrevocable undertakings to accept the Offer from the
Executive Directors (and their immediate families) in respect of, in aggregate,
1,486,781 Stirling Shares (representing approximately 1.8 per cent. of the
existing issued share capital of Stirling). In addition, Peter Rusby (one of the
Executive Directors) has given to Potter a non-binding indication that he
intends, once the Offer has become or been declared unconditional in all
respects, to exercise those options held by him under the Stirling Group plc
Share Save Scheme 1995 in respect of which the exercise price is less than 22p
and then to accept the Offer in respect of all the Stirling Shares acquired upon
such exercise.
In order to allow Potter potentially to utilise on the thirteenth day following
the date upon which the Offer becomes or is declared unconditional in all
respects ("the Unconditional Date"), in satisfaction of the respective
subscription obligations under the Investment Agreement of Steven Bentwood and
Peter Rusby, sums due to them (or their respective spouses) pursuant to valid
and complete acceptances of the Offer lodged not later than the seventh day
following the Unconditional Date, Steven Bentwood, Sharon Bentwood and Christine
Rusby have each authorised Potter, in its discretion, instead of despatching
such sums to them by cheque on the fourteenth day following the Unconditional
Date (at the same time as cheques will be despatched to all other accepting
Stirling Shareholders whose Stirling Shares are in certificated form and whose
valid and complete acceptances are lodged not later than the seventh day
following the Unconditional Date), to apply such sums, to the extent necessary,
for the purpose of fulfilling the subscription obligations of Steven Bentwood
and Peter Rusby.
Rothschild has confirmed it considers the terms of the arrangements between
Potter and the Executive Directors to be fair and reasonable so far as all other
Stirling Shareholders are concerned.
10. Directors, management and employees of Stirling Group
Potter has given assurances to the Independent Directors that, following the
Offer becoming or being declared unconditional in all respects, the existing
employment rights, including pension rights, of the employees of the Stirling
Group will be fully safeguarded.
Upon the Offer becoming or being declared unconditional in all respects, the
Independent Directors, Wendy Leighton and Peter Dubens intend to resign from the
Board of Stirling.
Stirling Shareholders should note that Peter Dubens was not invited to become an
Independent Director for the purposes of the Offer due to the possibility that
he might have been invited to assist the Executive Directors in investigating a
possible offer for Stirling. Save for the irrevocable undertaking referred to in
paragraph 4 of this announcement relating to the Stirling Shares owned by Peter
Dubens, no arrangements exist between Potter and Peter Dubens and he will not
have any continuing involvement with Stirling following the Offer becoming or
being declared unconditional in all respects.
Stirling Shareholders should also note that Wendy Leighton is not an Independent
Director for the purposes of the Offer, due to her continuing involvement with
the Stirling Group after the Offer becomes or is declared unconditional in all
respects, as a consultant to Bentwood Limited, a subsidiary of Stirling, under
the terms of the consultancy agreement already in operation.
11. Inducement fee arrangement
Stirling entered into an agreement on 22 September 2003 (with the consent of the
Panel), pursuant to which Stirling has agreed to pay the sum of #185,000 to LDC
in the event that:
(i) prior to the Offer lapsing or being withdrawn, Stirling seeks or solicits
any offer or proposal which leads to any person making, on or prior to 23
December 2003, an offer for Stirling or any acquisition of all or a substantial
portion of the assets of the Stirling Group; or
(ii) prior to the Offer becoming or being declared wholly unconditional or
lapsing or being withdrawn the Independent Directors (or either of them)
withdraw their recommendation or modify such recommendation in a manner which is
adverse to the chances of the Offer becoming unconditional as to acceptances; or
(iii) prior to the Offer becoming or being declared unconditional as to
acceptances or lapsing or being withdrawn a competing offer for Stirling is
announced which subsequently becomes or is declared wholly unconditional.
12. Stirling Share Option Schemes and Stirling Convertible Loan Notes
The Offer will extend to all Stirling Shares unconditionally allotted or issued
whilst the Offer remains open for acceptance pursuant to the exercise of options
under the Stirling Share Option Schemes, or the exercise of conversion rights
conferred by the Stirling Convertible Loan Notes.
The Stirling Convertible Loan Notes will, in accordance with their terms, be
repaid at par (together with interest to the date of repayment) upon the Offer
becoming or being declared unconditional in all respects.
Potter will, if the Offer becomes or is declared unconditional in all respects,
to the extent that options then remain unexercised, make appropriate proposals
to Option Holders.
13. General
The conditions of the Offer are set out in Appendix I.
The Offer Document (containing the full terms of the Offer), together with a
Form of Acceptance, will be despatched as soon as practicable to Stirling
Shareholders and, for information only, to Option Holders and Loan Note Holders.
This announcement does not constitute an offer or an invitation to purchase any
securities.
Appendix I Conditions of the Offer
Appendix II Interests in Stirling and irrevocable undertakings
Appendix III Responsibility statements
Appendix IV Definitions
Enquiries:
Potter
Steven Bentwood 0161 926 7000
PricewaterhouseCoopers
(Financial Adviser to Potter)
Colin Gillespie 0161 245 2000
Stuart Warriner 0161 245 2000
Stirling
(Independent Director)
Robert Coe 020 7724 6060
Rothschild
(Financial Adviser to Stirling)
Richard Bailey 0161 827 3800
Claudio Veritiero 0161 827 3800
Weber Shandwick
(Public Relations Adviser to Stirling)
Chris Lynch/Josh Royston 020 7067 0720
PricewaterhouseCoopers, which is authorised and regulated by the Financial
Services Authority for designated investment business, is acting exclusively for
Potter and for no one else in relation to the Offer and will not be responsible
to anyone other than Potter for providing the protections afforded to clients of
PricewaterhouseCoopers or for providing or giving advice in relation to the
Offer or any other matter referred to in this announcement.
Rothschild, which is regulated by the Financial Services Authority, is acting
exclusively for Stirling and for no one else in connection with the Offer and
will not be responsible to anyone other than Stirling for providing the
protections afforded to clients of Rothschild or for providing or giving advice
in relation to the Offer or any other matter referred to in this announcement.
The Offer will not be made, directly or indirectly, in or into, or by use of the
mails of, or by any means or instrumentality (including, without limitation,
electronic mail, facsimile transmission, telex or telephone) of interstate or
foreign commerce of, or any facilities of a national securities exchange of, the
USA, or in or into Canada, Australia or Japan, and the Offer will not be capable
of acceptance by any such use, means or instrumentality or facilities or from or
within the USA, Canada, Australia or Japan. Accordingly, copies of the Offer
Document and the Form of Acceptance will not be, and must not be, mailed or
otherwise distributed or sent in, into or from the USA, Canada, Australia or
Japan and persons receiving the Offer Document or the Form of Acceptance
(including custodians, nominees and trustees) must not distribute or send them
in, into or from the USA, Canada, Australia or Japan. Doing so may render
invalid any purported acceptance of the Offer.
This announcement has been issued by Potter and approved by
PricewaterhouseCoopers for the purpose of section 21 of the Financial Services
and Markets Act 2000. The principal place of business of PricewaterhouseCoopers
is 1 Embankment Place, London WC2N 6RH.
Appendix I
Conditions of the Offer
The Offer will be subject to the following conditions:
1 valid acceptances being received (and not, where
permitted, withdrawn) by 3.00 p.m. on the first closing date of the Offer (or
such later time(s) and/or date(s) as Potter may, with the consent of the Panel
or in accordance with the rules of the City Code, decide) in respect of not less
than 90 per cent. (or such lesser percentage as Potter may decide) of the
Stirling Shares to which the Offer relates, provided that this condition will
not be satisfied unless Potter and/or any of its wholly-owned subsidiaries shall
have acquired or agreed to acquire, whether pursuant to the Offer or otherwise,
Stirling Shares carrying, in aggregate, more than 50 per cent. of the voting
rights then normally exercisable at a general meeting of Stirling (on such basis
as may be required by the Panel, including for this purpose (to the extent, if
any, required by the Panel) any voting rights attaching to any Stirling Shares
which are unconditionally allotted or issued before the Offer becomes or is
declared unconditional as to acceptances, whether pursuant to the exercise of
conversion or subscription rights or otherwise); and for this purpose:
(a) the expression "Stirling Shares to which the Offer relates"
shall be construed in accordance with sections 428 to 430F of the Act; and
(b) shares which have been unconditionally allotted shall be
deemed to carry the voting rights which they will carry upon issue;
2 Potter not having discovered or otherwise become aware prior to the
date when the Offer would otherwise have become or been declared unconditional
in all respects that the Office of Fair Trading intends, or is reasonably
likely, to refer the proposed acquisition of Stirling by Potter, or any matters
arising therefrom, to the Competition Commission;
3 no Relevant Authority having decided to take, institute,
implement or threaten any action, suit, proceeding, investigation, enquiry or
reference, or made, proposed or enacted any statute, regulation, decision or
order or required any action to be taken or information to be provided or
otherwise having taken or refrained from having taken any other action, and
there not continuing to be in force any statute, regulation, rule, order or
decision that, in any such case, will or might reasonably be expected to:
(a) make the Offer or its implementation or the acquisition or proposed
acquisition by Potter of any Stirling Shares or control or management of
Stirling or of any member of the Wider Stirling Group void, voidable,
unenforceable or illegal under the laws of any jurisdiction, or otherwise,
directly or indirectly, restrain, restrict, prohibit or materially delay, or
impose additional or amended material conditions or obligations with respect to,
or otherwise challenge or interfere with, any of the foregoing; or
(b) require, prevent, materially delay, restrict or alter the proposed terms for
the divestiture by Potter or any member of the Wider Stirling Group of all or
any material part of their respective businesses, assets or properties or impose
any limitation on the ability of any of them to conduct or to own, use or
operate all or any material part of the respective businesses, assets or
properties owned by, or the use or operation of which is enjoyed by, any of
them, or result in any of them ceasing to be able to carry on business, or being
restricted in its carrying on of business, under any name under which it
currently does so; or
(c) impose any material limitation on the ability of Potter or any member of the
Wider Stirling Group, directly or indirectly, to acquire or to hold or to
exercise effectively any rights of ownership of shares or other securities (or
the equivalent) in any member of the Wider Stirling Group, or to exercise
management or voting control over any member of the Wider Stirling Group; or
(d) require Potter or any member of the Wider Stirling Group to acquire, or to
offer to acquire, any shares or other securities or indebtedness (or the
equivalent) in or of Potter or any member of the Wider Stirling Group or any
shares or other securities or indebtedness (or the equivalent) in or of, or any
asset owned by, any other person, or to dispose of or repay, or to offer to
dispose of or repay, any shares or other securities or indebtedness (or the
equivalent) in or of, or any asset owned by, Potter or any member of the Wider
Stirling Group; or
(e) impose any material limitation on the ability of Potter or any member of the
Wider Stirling Group to integrate its business, or any part of it, with any
business or part of business of Potter or any member of the Wider Stirling
Group; or
(f)otherwise adversely affect the business, assets, financial
or trading position or profits, prospects or value of any member of the Wider
Stirling Group to an extent which is material in the context of the Wider
Stirling Group taken as a whole or Potter,
and all applicable waiting and other time periods during which any Relevant
Authority could decide to take, institute, implement or threaten any such
action, suit, proceeding, investigation, enquiry or reference having expired,
lapsed or been terminated;
4 all necessary filings having been made and all statutory
or regulatory obligations in any jurisdiction having been complied with, and all
appropriate waiting or other time periods under any applicable legislation or
regulations of any jurisdiction having expired, lapsed or been terminated, in
each case in connection with the Offer or the acquisition or proposed
acquisition of any Stirling Shares, or of control or management of Stirling (or
any other member of the Wider Stirling Group) by Potter, and all Relevant
Authorisations which are necessary or are reasonably considered by Potter to be
appropriate for, or in respect of, the Offer or any acquisition or proposed
acquisition of any Stirling Shares, or of control or management of Stirling (or
any other member of the Wider Stirling Group), by Potter or to permit or enable
Potter to carry on the business of any member of the Wider Stirling Group having
been obtained in terms and in a form to the reasonable satisfaction of Potter,
from all appropriate Relevant Authorities and from all appropriate persons,
authorities or bodies with whom Potter or any member of the Wider Stirling Group
has entered into contractual arrangements, and all such Relevant Authorisations
remaining in full force and effect, and there being no notice or intimation of
any intention to revoke, modify, restrict, suspend or not to renew any of them;
5 save as fairly disclosed in the annual report and accounts
of Stirling for the year ended 31 March 2003 (the "Stirling 2003 Accounts"), or
as fairly disclosed in writing by or on behalf of Stirling to Potter or its
advisers in connection with the Offer ("Disclosed") prior to the date of this
announcement or as publicly announced by release of an announcement through an
appropriate Regulatory Information Service ("Publicly Announced") prior to that
date there being no provision of any Relevant Instrument (excluding, for the
avoidance of doubt any provision the operation of which has prior to the date of
this announcement been irrevocably and (save as to the Offer becoming or being
declared wholly unconditional) unconditionally waived by the person entitled to
the benefit thereof) which, in consequence of the making or implementation of
the Offer, the acquisition or proposed acquisition by Potter of any Stirling
Shares or any change in the control or management of Stirling or any other
member of the Stirling Group, or otherwise, provides for, or might reasonably be
expected to, result in any of the following (to an extent which is or might
reasonably be expected to be material in the context of the Wider Stirling Group
taken as a whole):
(a) any moneys borrowed by, or any other indebtedness (actual or contingent) of,
any member of the Wider Stirling Group being or becoming repayable or capable of
being declared repayable immediately or prior to their stated maturity, or the
ability of any such member to borrow monies or incur any indebtedness being
withdrawn or inhibited; or
(b) the creation of any mortgage, charge or other security interest over the
whole or any part of the business, property or assets of any member of the Wider
Stirling Group or any such security (whenever arising or having arisen) becoming
enforceable or being enforced; or
(c) any Relevant Instrument or any right, liability, obligation, interest or
business of any member of the Wider Stirling Group (or any related arrangement)
being terminated or modified or affected, or any action being taken, or any
obligation arising, under any Relevant Instrument; or
(d) any asset or right (including, without limitation, intellectual property
rights) or interest of, or any asset or right the use or operation of which is
enjoyed by, any member of the Wider Stirling Group being or falling to be
disposed of other than in the ordinary course of business, or charged, or
ceasing to be available to any such member; or
(e) the interest or business of any member of the Wider Stirling Group in or
with any company, firm, body or person, or any arrangements relating to any such
interest or business, being terminated or adversely modified or affected; or
(f) the creation of liabilities, whether actual or contingent, of any member of
the Wider Stirling Group, or the business, assets, financial or trading position
or profits, prospects or value of any member of the Wider Stirling Group being
prejudiced or adversely affected; or
(g) any member of the Wider Stirling Group ceasing to be able, or being
restricted in being able, to carry out business under any name under which it
currently does so; or
(h) any member of the Wider Stirling Group or Potter being required to acquire,
or to offer to acquire, any shares or other securities or indebtedness (or the
equivalent) in or of any member of the Wider Stirling Group or Potter or any
shares or other securities or indebtedness (or the equivalent) in or of, or any
asset owned by, any other person or to dispose of or repay, or to offer to
dispose of or repay, any shares or other securities or indebtedness (or the
equivalent) in or of, or any asset owned by, any member of the Wider Stirling
Group or Potter,
and no event having occurred which, under any provision of any Relevant
Instrument, would or might reasonably be expected to result in (to an extent
which is or might reasonably be expected to be material in the context of the
Wider Stirling Group taken as a whole) any of the events or circumstances
referred to in sub-paragraphs (a) to (h) of this paragraph 5;
6 save as fairly disclosed in the Stirling 2003 Accounts or as
Disclosed prior to the date of this announcement, or as Publicly Announced prior
to that date, no member of the Wider Stirling Group having, since 31 March 2003:
(a) made any alteration to its memorandum or articles of association or other
constitutional documents which is or could reasonably be considered to be
material; or
(b) recommended, declared, paid or made, or proposed the recommendation,
declaration, paying or making of, any dividend, bonus or other distribution,
whether in cash or otherwise (other than to Stirling or a wholly-owned
subsidiary of Stirling); or
(c) issued or agreed to issue, authorised or proposed the issue of additional
shares of any class, or of securities convertible into, or rights, warrants or
options to subscribe for or acquire, any such shares or securities or any loan
capital (other than issues to Stirling or a wholly-owned subsidiary of Stirling,
and save in respect of options granted under the Stirling Share Option Schemes
and Disclosed prior to the date of this announcement, and save for Stirling
Shares allotted on the exercise of any such option) or redeemed, purchased or
reduced, or authorised or proposed the redemption, purchase or reduction of, any
part of its share capital; or
(d) (other than to Stirling or a wholly-owned subsidiary of Stirling) issued,
authorised or proposed the issue of any debentures or securities or, save in the
ordinary course of business, incurred or increased any indebtedness or
contingent liability; or
(e) entered into or varied or implemented, or authorised, proposed or announced
its intention to enter into, vary, or implement, any contract, scheme,
transaction, commitment or other arrangement which is outside the ordinary
course of trading or which is, will or might reasonably be expected to be
restrictive on the business of Potter or any member of the Wider Stirling Group
or which involves or will or could involve an obligation of a loss making, long
term, onerous or unusual nature or magnitude which is material in the context of
the Wider Stirling Group taken as a whole; or
(f) authorised or proposed, or effected, any merger, demerger, reconstruction or
amalgamation, or any acquisition or disposal or transfer of, or any charge or
security interest or other encumbrance in respect of, any asset or any right,
title or interest in any shares or asset (other than in the ordinary course of
trading); or
(g) authorised or proposed or effected any mortgage, charge, grant of security
interest or other third party right or encumbrance over any asset or any right,
title or interest in any shares or other asset (other than in the ordinary
course of trading); or
(h) entered into, or varied (other than in respect of increases in remuneration
required under the terms of the relevant agreement) the terms of, any service
contract, or other agreement or other arrangement, with any of the directors or
senior executives or senior employees of any member of the Wider Stirling Group;
or
(i) 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 a substantial part thereof or ceased or threatened to cease
carrying on all or a substantial part of its business; or
(j) taken or proposed any action or had any proceedings instituted, threatened
or proposed for its winding-up (voluntary or otherwise), or dissolution or
reorganisation (save for any such winding-up or dissolution whilst solvent) or
for the appointment of a receiver, administrator, administrative receiver,
trustee or similar or analogous officer of all or any of its assets or revenues
or for any similar or analogous matters in any jurisdiction; or
(k) waived or compromised any claim, other than in the ordinary course of
business; or
(l) entered into any commitment, agreement or arrangement, or passed any
resolution or made any offer, with respect to, or announced an intention to
effect or to propose, any of the transactions, matters or events referred to in
this paragraph 6;
7 since 31 March 2003, and save as Disclosed prior to the date of this
announcement, or as Publicly Announced prior to that date:
(a) no adverse change or deterioration having occurred in the business,
assets, financial or trading position or profits, prospects or value of any
member of the Wider Stirling Group which is material in the context of the Wider
Stirling Group taken as a whole;
(b) no litigation, arbitration proceedings, prosecution or other legal
proceedings to which any member of the Wider Stirling Group is or might
reasonably be expected to become a party (whether as a claimant, defendant or
otherwise), and no investigation or enquiry by, or complaint or reference to,
any Relevant Authority against or in respect of any member of the Wider Stirling
Group, having been instituted, announced or threatened or remaining outstanding
which in any such case is or might reasonably be expected to be material in the
context of the Wider Stirling Group taken as a whole;
(c) no steps having been taken which will result in, or might reasonably be
expected to result in, the withdrawal, cancellation, termination or adverse
modification of any licence or permit held by any member of the Wider Stirling
Group in circumstances where such withdrawal, cancellation, termination or
adverse modification will or might reasonably be expected to have a material
adverse effect upon the Wider Stirling Group taken as a whole; and
(d) no contingent or other liability having arisen or increased or become
apparent to Potter which might reasonably be expected adversely to affect any
member of the Wider Stirling Group in a manner which is material in the context
of the Wider Stirling Group taken as a whole;
8 Potter not having discovered, except as Disclosed prior to the date
of this announcement, or as Publicly Announced prior to that date, that:
(a) any financial or business or other information concerning the Wider
Stirling Group as contained in the information publicly disclosed at any time by
or on behalf of any member of the Wider Stirling Group, or disclosed at any time
by or on behalf of any member of the Wider Stirling Group in writing in
connection with the Offer to Potter or its agents or advisers, is misleading or
contains a misrepresentation of fact or omits to state a fact necessary to make
the information contained therein not misleading; or
(b) any undertaking in which any member of the Wider Stirling Group has a
significant economic interest and which is not a subsidiary of Stirling is
subject to any liability, contingent or otherwise, which is not fairly disclosed
in the Stirling 2003 Accounts and which is material in the context of the Wider
Stirling Group taken as a whole; or
(c) any circumstance exists whereby a person or class of persons has or might
reasonably be expected to have any claim or claims against any past or present
member of the Wider Stirling Group in circumstances where such claim or claims
might reasonably be expected to be material in the context of the Wider Stirling
Group taken as a whole; and
9 save as Disclosed prior to the date of this announcement, Potter not
having discovered any of the following matters:
(a) that there has been any release, emission, disposal, spillage or leak of
any waste or hazardous substance or any substance likely to impair the
environment or harm human health on or about or from any property or water now
or previously owned, occupied, used or controlled by any past or present member
of the Wider Stirling Group (whether or not constituting a non-compliance by any
person with any applicable law, statute, ordinance or any regulation, rule or
other requirement of any Relevant Authority) which, in any such case, will or
might reasonably be expected to give rise to any liability (whether actual or
contingent) on the part of any member of the Wider Stirling Group which would be
material in the context of the Wider Stirling Group taken as a whole; or
(b) that any past or present member of the Wider Stirling Group has committed
any violation of any applicable laws, statutes or ordinances, or any
regulations, rules or other requirements of any Relevant Authority, relating to
the disposal, discharge, spillage, leak or emission of any waste or hazardous
substance or any substance likely to impair the environment or harm human
health, or otherwise relating to environmental matters, which violation will or
might reasonably be expected to give rise to a liability (actual or contingent)
or cost on the part of any member of the Wider Stirling Group which is material
in the context of the Wider Stirling Group taken as a whole; or
(c) that there is, or is reasonably likely to be, any liability (actual or
contingent) on any member of the Wider Stirling Group to make good, repair,
reinstate or clean up any property or water now or previously owned, occupied or
used or controlled by any past or present member of the Wider Stirling Group
under any environmental legislation, regulation, notice, circular, order or
requirement of any Relevant Authority which liability is material in the context
of the Wider Stirling Group taken as a whole.
For the purposes of the above conditions:
Relevant Authority means any government, government department or governmental,
quasi-governmental, supranational, statutory, regulatory or investigative body
or authority, any trade agency, or any court, tribunal or any association,
institution or other person or body whatsoever in any jurisdiction;
Relevant Authorisation means an authorisation, order, grant, recognition,
confirmation, determination, consent, licence, clearance, permission, allowance
or approval;
Relevant Instrument means any agreement, arrangement, licence, permit, lease or
other instrument or obligation whatsoever to which any member of the Wider
Stirling Group is a party or by or to which any such member or any of its assets
is bound, entitled or subject;
Substantial Interest means in relation to an undertaking an interest, direct or
indirect, in 20 per cent. or more of the voting rights exercisable in relation
to the undertaking or in the equity capital of such undertaking; and
Wider Stirling Group means Stirling and its subsidiary undertakings, associated
undertakings and any other undertakings in which Stirling and such undertakings
(aggregating their interests) have a Substantial Interest.
Potter reserves the right to waive all or any of the above conditions, in whole
or in part, except condition 1. If Potter is required by the Panel to make an
offer for Stirling Shares under the provisions of Rule 9 of the City Code,
Potter may make such alterations to any of the conditions (including, without
limitation, condition 1 above), or any of the terms of the Offer, as are
necessary to comply with the provisions of that Rule.
Conditions 2 to 9 inclusive must be fulfilled, be determined by Potter to be or
remain satisfied, or be waived, by midnight on the twenty-first day after the
date on which condition 1 is fulfilled or after the first closing date of the
Offer, whichever is the later (or in each case such later date as the Panel may
agree) failing which the Offer will lapse, provided that Potter shall be under
no obligation to waive or treat as satisfied any of conditions 2 to 9
(inclusive) by a date earlier than the latest date specified above for the
fulfillment thereof notwithstanding that the other conditions of the Offer may
at such earlier date have been waived or fulfilled and that there are at such
earlier date no circumstances indicating that any of such conditions may not be
capable of fulfillment.
The Offer will lapse if, in respect of the proposed acquisition of Stirling by
Potter, there is a reference to the Competition Commission before 3.00 p.m. on
the first closing date of the Offer or the date on which the Offer becomes or is
declared unconditional as to acceptances, whichever is the later.
If the Offer lapses for any reason, the Offer shall cease to be capable of
further acceptance and Potter and Stirling Shareholders shall cease to be bound
by prior acceptances.
Appendix II
Interests in Stirling and irrevocable undertakings
1 In view of the requirement for confidentiality prior to the
announcement of the Offer, it has not been practicable prior to the making of
this announcement to obtain full information regarding any holdings of Stirling
Shares owned or controlled by Lloyds TSB Group plc or any of its subsidiary
undertakings (either for their own account or for the account of discretionary
investment clients) other than LDC. To the extent that such information, when
available, is considered by the Panel to be material, it will be publicly
disclosed at that time.
2 Subject to any holdings of Stirling Shares owned or
controlled by Lloyds TSB Group plc or any of its subsidiary undertakings (as
referred to in paragraph 1 above), persons acting or deemed to be acting in
concert with Potter for the purposes of the Offer own or control a total of
1,624,281 Stirling Shares, representing 1.9 per cent. of the existing issued
share capital of Stirling, as follows:
Number of
Stirling Shares
Name
i) Steven Bentwood 530,781
Sharon Bentwood (spouse of Steven Bentwood) 250,500
Christine Rusby (spouse of Peter Rusby) 580,500
Peter Solomon 125,000
ii) Paul Bentwood (brother of Steven Bentwood) 41,000
Sara Bentwood (spouse of Paul Bentwood) 80,000
Alexandra Rusby (daughter of Peter Rusby) 6,500
Bleone Rusby (mother of Peter Rusby) 10,000
3. Persons acting or deemed to be acting in concert with
Potter for the purposes of the Offer hold the following options to subscribe for
ordinary shares of 20p each in Stirling which have been granted pursuant to the
Stirling Share Option Schemes:
a) The Stirling Group plc Executive Share Option Scheme 1997
Name Date of Number of ordinary Exercise Exercise price
grant shares period (p)
Steven 14.07.99 100,000 15.07.02 - 13.07.09 23.5
Bentwood
09.08.99 285,000 10.08.02 - 08.08.09 28.5
Peter Rusby 14.07.99 100,000 15.07.02 - 13.07.09 23.5
09.08.99 190,000 10.08.02 -08.08.09 28.5
Peter 09.08.99 400,000 10.08.02 - 08.08.09 28.5
Solomon
Paul 06.08.97 8,000 07.08.00 - 05.08.07 36.5
Bentwood
b) The Stirling Group plc Share Save Scheme 1995
Name Date of Number of ordinary Exercise period Exercise price
grant shares (p)
Peter 29.12.00 80,357 29.12.05 - 25.06.06 21.0
Rusby
c) The Stirling Group plc Executive Share Option Scheme 1994
Name Date of Number of ordinary Exercise period Exercise price
grant shares (p)
Paul 06.08.97 82,000 06.08.00 - 05.08.07 36.5
Bentwood
4. Each of the individuals named in paragraph 2(i) above has
given to Potter an irrevocable undertaking to accept the Offer in respect of his
or her holding of Stirling Shares, as stated in that paragraph. In addition,
Potter has received irrevocable undertakings to accept the Offer in respect of
the following holdings of Stirling Shares:
Stirling Shareholder Number of
Stirling Shares
Robert Coe 110,000
Jody Sacks 357,500
Gordon Craig 400,000
Wendy Leighton 448,446
HSBC Global Custody Nominee (UK) Ltd * 400,000
Second Advance Realisation Company Limited 15,269,241
JP Morgan Fleming Asset Management 10,930,369
Framlington Investment Management Limited 6,832,500
Marlborough UK Equity Income Fund 1,640,922
*Note: The 400,000 Stirling Shares held by HSBC Global Custody Nominee (UK)
Limited are held as nominee for Peter Dubens, who has also given to Potter an
irrevocable undertaking with regard to the assenting of those Stirling Shares to
the Offer.
Accordingly, Potter has received irrevocable undertakings to accept the Offer in
respect of an aggregate of 37,875,759 Stirling Shares, representing 44.6 per
cent. of the existing issued share capital of Stirling.
Of these, undertakings relating to an aggregate of 27,840,532 Stirling Shares
(being those Stirling Shares comprised in the undertakings given by Second
Advance Realisation Company Limited, JP Morgan Fleming Asset Management and
Marlborough UK Equity Income Fund), representing 32.8 per cent of the existing
issued share capital of Stirling, will cease to be binding in the event that a
third party announces prior to the first closing date of the Offer a competing
offer on terms which represent a 10 per cent. or more higher value than the
consideration payable under the Offer.
The undertaking given by Framlington Investment Management Limited, representing
8.0 per cent. of the existing issued share capital of Stirling, will cease to be
binding in the event that a third party announces prior to the first closing
date of the Offer a competing offer of higher value than the consideration under
the Offer.
All the other undertakings remain binding in the event of a competing offer.
5. Potter neither owns nor controls any Stirling Shares and
Potter does not hold any option to acquire shares in Stirling.
Appendix III
Responsibility statements
The Potter Directors accept responsibility for the information contained in this
announcement other than the information relating to LDC, the Co-Investment Plan,
the Lloyds TSB Group, Stirling and its subsidiaries and the Stirling Directors
and their immediate families, related trusts and persons connected with them
(within the meaning of section 346 of the Act) and the recommendation and
associated opinions of the Independent Directors. To the best of the knowledge
and belief of the Potter Directors (who have taken all reasonable care to ensure
that such is the case), the information contained in this announcement for which
they accept responsibility is in accordance with the facts and does not omit
anything likely to affect the import of such information.
The LDC Investment Committee accept responsibility for the information contained
in this announcement other than the information relating to Stirling and its
subsidiaries and the Stirling Directors and their immediate families, related
trusts and persons connected with them (within the meaning of section 346 of the
Act), and the recommendation and associated opinions of the Independent
Directors. To the best of the knowledge and belief of the members of the LDC
Investment Committee (who have taken all reasonable care to ensure that such is
the case), the information contained in this announcement for which they accept
responsibility is in accordance with the facts and does not omit anything likely
to affect the import of such information.
The Stirling Directors accept responsibility for the information contained in
this announcement relating to Stirling and its subsidiaries and the Stirling
Directors and members of their immediate families, related trusts and persons
connected with them (within the meaning of section 346 of the Act) other than
the recommendation and associated opinions of the Independent Directors for
which the Independent Directors alone accept responsibility as specified below.
To the best of the knowledge and belief of the Stirling Directors (who have
taken all reasonable care to ensure that such is the case), the information
contained in this announcement for which they accept responsibility is in
accordance with the facts and does not omit anything likely to affect the import
of such information.
The Independent Directors accept responsibility for the recommendation and
associated opinions on their part contained in this announcement. To the best of
the knowledge and belief of the Independent Directors (who have taken all
reasonable care to ensure that such is the case), the information contained in
this announcement for which they accept responsibility is in accordance with the
facts and does not omit anything likely to affect the import of such
information.
Appendix IV
Definitions
The following definitions apply throughout this announcement, unless the context
requires otherwise:
"Act" the Companies Act 1985, as amended
"Approved Schemes" the Stirling Group plc Executive Share Option Scheme (1994)
and the Stirling Group plc Share Save Scheme 1995
"Australia" the Commonwealth of Australia, its possessions and
territories and all areas subject to its jurisdiction and any political
subdivision thereof
"Brands Division" the branded businesses of Stirling comprising four key brands:
Headworx, Voodoo Dolls, idolls and OTT
"Canada" Canada, its provinces and territories and all areas
subject to its jurisdiction and any political subdivision thereof
"certificated" or "in certificated form" not in uncertificated form (that is,
not in CREST)
"City Code" the City Code on Takeovers and Mergers
"Closing Middle Market Price" the closing middle market quotation
of a relevant share as derived from the Daily Official List
"Co-Investment Plan" LDC Co-Investment Plan 2003 (a limited partnership
established in England under the Limited Partnerships Act 1907), which invests
alongside LDC
"Daily Official List" the daily official list of the London Stock
Exchange
"Executive Directors" Steven Michael Bentwood, Peter Grenville Rusby and Peter
Loris Solomon, each of whom is an executive director of Stirling and who
together comprise the Potter Board and the Potter Directors
"Form of Acceptance" the form of acceptance and authority for use in connection
with the Offer
"Independent Directors" Robert Michael Coe and Gordon Peter Craig, being those
Stirling Directors who are independent in relation to the Offer
"Investment Agreement" the investment agreement dated 22 September 2003 made
between Potter (1), the Executive Directors (2), LDC and the Co-Investment Plan
(3) and Solomon Investment (4)
"Japan" Japan, its cities and prefectures, possessions and territories and all
areas subject to its jurisdiction and any political subdivision thereof
"LDC" Lloyds TSB Development Capital Limited
"LDC Investment Committee" the members of the Investment Committee of LDC who
approved the investment by LDC in Potter
"Listing Rules" the listing rules made by the UKLA and for the time being in
force
"Lloyds TSB Group" Lloyds TSB Group plc and its subsidiary undertakings
"Loan Note Holders" holders of Stirling Convertible Loan Notes
"London Stock Exchange" London Stock Exchange plc
"Marks & Spencer" or "M&S" Marks and Spencer Group p.l.c. and its subsidiary
undertakings
"Offer" the recommended offer to be made by PricewaterhouseCoopers
on behalf of Potter for the Stirling Shares on the terms and subject to the
conditions to be set out in the Offer Document and the Form of Acceptance
(including, where the context so requires, any subsequent revision, variation,
renewal or extension thereof)
"Offer Document" the offer document detailing the terms and conditions of the
Offer
"Official List" the official list of the UKLA
"Option Holders" holders of outstanding options granted under any of the
Stirling Share Option Schemes
"Panel" The Panel on Takeovers and Mergers
"Potter" Potter Acquisitions Limited (registered in England and Wales No.
4827718)
"Potter A Ordinary Shares" A ordinary shares of #1 each in the capital of Potter
"Potter B Preference Shares" B preference shares of #1 each in the
capital of Potter
"Potter C Ordinary Shares" C ordinary shares of #1 each in the
capital of Potter
"Potter Chairman" the Chairman of Potter who is to be appointed upon, or
following, the Offer becoming or being declared unconditional in all respects
"Potter Loan Notes" #9,946,000 fixed rate unsecured redeemable loan
notes2009-2013 of Potter to be constituted by the Potter Loan Note Instrument
"Potter Loan Note Instrument" the instrument to be entered into by Potter
pursuant to the Investment Agreement in order to constitute the Potter Loan
Notes
"Potter Ordinary Shares" ordinary shares of #1 each in the capital of Potter
"Potter Shares" Potter Ordinary Shares,
Potter A Ordinary Shares, Potter B Preference Shares and Potter C Ordinary
Shares
"PricewaterhouseCoopers" " PricewaterhouseCoopers LLP (a limited liability
partnership registered in England with registered number OC30352) which is
authorised and regulated by the Financial Services Authority for designated
investment business.
"Regulatory Information Service" has the meaning given to that expression in the
Listing Rules
"Rothschild" N M Rothschild & Sons Limited
"Royal Bank of Scotland" The Royal Bank of Scotland plc
"Solomon Investment" Solomon Investment (International) Limited, a company
incorporated in Hong Kong which is wholly owned by Peter Loris Solomon, one of
the Executive Directors
"Stirling" or "the Company" Stirling Group plc
"Stirling Convertible Loan Notes" #5,270,000 nominal of 6 per cent. Convertible
Unsecured Loan Notes 2006 of Stirling
"Stirling Directors" the directors of Stirling
"Stirling Group" or the "Group" Stirling and its subsidiary
undertakings
"Stirling Shares" the existing issued ordinary shares of 20p each in the capital
of Stirling and any further such shares which are unconditionally allotted and/
or issued (including pursuant to the exercise of outstanding options granted
under the Stirling Share Option Schemes or the exercise of conversion rights
under the Stirling Convertible Loan Notes) after the date of this announcement
and before the Offer closes
"Stirling Shareholders" holders of Stirling Shares
"Stirling Share Option Schemes" the Approved Schemes and the Unapproved Scheme
"subsidiary", "subsidiary undertaking", as construed in accordance with the Act,
"associated
"associated undertaking" and "undertaking" undertakings" also being referred to
as "associates"
"Tamarind" Tamarind International Limited, a Hong Kong based sourcing company
and a wholly owned subsidiary of Stirling
"UKLA" the UK Listing Authority, being 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
"Unapproved Scheme" the Stirling Group plc Executive Share Option Scheme 1997
"United Kingdom" or "UK" the United Kingdom of Great Britain and
Northern Ireland
"USA" or "US" the United States of America, its territories and
possessions,
any state of the United States and the District of Columbia and all other areas
subject to its jurisdiction
This information is provided by RNS
The company news service from the London Stock Exchange
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