| Tue 24 Aug 2004, 16:50 | | Anglo American plc Announcement |
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Anglo American plc - Anglo American plc Announcement
Anglo American plc
(Incorporated in the United Kingdom)
Registration number: 3564138
Share code: AGL
ISIN: GB0004901517
(the `Company`)
Not for release, distribution or publication in or into or from the USA, Canada,
Australia or Japan.
24 August 2004
Recommended Cash Offer
by Cazenove & Co. Ltd
on behalf of
Anglo American plc
to acquire the entire issued and to be issued ordinary share capital of
Johnston Group PLC
The directors of Anglo American and the Independent Directors of Johnston are
pleased to announce that agreement has been reached on the terms of a
recommended cash offer to be made by Cazenove & Co. Ltd on behalf of Anglo
American, to acquire the entire issued and to be issued ordinary share capital
of Johnston not already owned by Anglo American or its subsidiaries.
Anglo American is one of the world`s largest mining and natural resource groups.
With its subsidiaries, joint ventures and associates, it is a global leader in
gold, platinum group metals and diamonds, and has significant interests in coal,
base and ferrous metals, paper & packaging and industrial minerals.
Johnston operates two quarries in the West Midlands of England: Leaton, a quarry
near Telford, and Leinthall, a quarry located near Leominster. The Leaton
Quarry is operated by Berwyn Granite Quarries Limited, in which Johnston has a
51% controlling interest. The minority 49% interest is held by Anglo American`s
subsidiary, Tarmac Roadstone Holdings Limited. Both quarries have on-site
asphalt (also called coated stone) plants. Johnston also manufactures concrete
pipes and related products at a large site near Telford.
Johnston also operates an engineering business that is primarily focused on
specialist vehicles such as road sweepers, fire engines and similar vehicles.
Upon completion of the Offer, Anglo American intends to dispose of Johnston`s
engineering business as it does not fit with Anglo Industrial Mineral`s
strategy. Anglo American is aware of third party interest in this business and
approaches have already been made to Anglo American by such parties.
The Recommended Offer
- The Offer Price will be 491 pence in cash for each Johnston Share, valuing
the existing issued ordinary share capital of Johnston at approximately GBP53
million.
- The Offer represents a premium of approximately 21 per cent. over the closing
mid-market price of 405 pence per Johnston Share on 23 August 2004, the last
dealing day prior to this announcement, a premium of 106.7 per cent. over the
closing middle market price of 237.5 pence per Johnston Share at the close of
business on 28 July 2004, the last dealing day prior to the announcement of the
Ennstone Offer, and a 10 per cent. premium to the value of the Ennstone Offer
(valued at the closing middle market price of 35 pence per Ennstone ordinary
share on 28 July 2004, the last dealing day prior to the announcement of the
Ennstone Offer).
- Anglo American has granted an option to Ennstone to enable Ennstone to
acquire Leinthall Quarry and asphalt plant for GBP11.25 million in the event
that the Offer is successful.
- Ennstone has agreed to use reasonable endeavours to adjourn the extraordinary
general meeting to approve Ennstone`s offer for Johnston until not earlier than
56 days after the posting of the Anglo American Offer Document.
- Ennstone has released Johnston family shareholders from their irrevocable
undertakings to accept the Ennstone Offer to the extent required to enable them
to accept the Anglo American offer provided that by the date of such acceptance
the Anglo American offer is wholly unconditional (other than as to acceptances).
These irrevocable undertakings will only become binding again in the event that
Anglo American`s offer for Johnston lapses, is withdrawn or does not become
wholly unconditional within the earlier of 42 days of posting the Offer Document
or 56 days from the date of this announcement.
- As at the date of this announcement, Anglo American together with its
subsidiaries owns 2,696,438 Johnston Shares representing approximately 24.9 per
cent. of the existing ordinary share capital of Johnston. Anglo American has
also obtained binding irrevocable undertakings from certain Johnston family
shareholders, representing approximately 50.1 per cent. of the existing ordinary
share capital of Johnston, to accept the Offer before 3pm on the forty second
day after posting of the Offer Document, provided that before 3pm on that date
the Offer is wholly unconditional (other than as to acceptances).
- The Offer is conditional, inter alia, on valid acceptances being received
relating to Johnston Shares representing, in aggregate, more than 67 per cent.
of the Johnston Shares to which the Offer relates.
- A Loan Note Alternative will be made available to Johnston Shareholders who
elect to receive it.
Commenting on behalf of Johnston, Chris Woodwark, Chairman of Johnston, said:
`Following the unsolicited bid for the company by Ennstone, the Independent
Directors undertook to consider all options with the primary objective of
maximising value for all Johnston Shareholders. Given the extremely tight
timetable, we are therefore delighted to be able to recommend this offer from
Anglo American, which, at 491 pence in cash, represents a significant
improvement on the Ennstone offer.`
Commenting on behalf of Anglo American, Robbie Robertson, Chief Executive
Officer of Anglo Industrial Minerals, said:
`We are pleased to have secured both the recommendation of Johnston`s
Independent Directors and the support of the Johnston family. The integration of
Johnston`s construction materials business represents an attractive opportunity
to enhance Anglo Industrial Mineral`s strategy in the UK and follows our
original investment in acquiring 24.9 per cent. of Johnston in 2002 and 2003.
We also anticipate realising significant value from assets not required by the
core construction materials business.`
This summary should be read in conjunction with the full text of the following
announcement including Appendix I where the conditions of the Offer are set out
and Appendix II which contains certain terms used in this summary and the
following announcement.
Enquiries:
Anglo American plc 020 7698 8888
Robbie Robertson
Nick von Schirnding
Kate Aindow
Cazenove & Co. Ltd 020 7588 2828
(Financial Adviser to Anglo American)
Nick Wiles
Patrick Magee
Johnston Group PLC 020 7920 3150
Chris Woodwark
Close Brothers Corporate Finance Limited 020 7655 3100
(Financial Adviser to Johnston)
Andrew Cunningham
Tim Evans
Tavistock Communications 020 7920 3150
(Public Relations Adviser to Johnston)
Lulu Bridges
Justin Griffiths
WestLB 020 7020 2000
(Advisers to Johnston family)
Nick Wells
Frank Malone
Cazenove, which is regulated in the United Kingdom by the Financial Services
Authority, is acting exclusively for the Anglo American Group and no one else in
connection with the Offer and will not be responsible to anyone other than the
Anglo American Group for providing the protections afforded to its customers or
for providing advice in relation to the Offer or in relation to the contents of
this announcement or any transaction, arrangement or other matter referred to
herein.
Close Brothers, which is regulated in the United Kingdom by the Financial
Services Authority is acting exclusively for Johnston and no one else in
connection with the Offer and will not be responsible to anyone other than
Johnston for providing the protections afforded to its customers or for
providing advice in relation to the Offer.
WestLB, which is regulated in the United Kingdom by the Financial Services
Authority is acting exclusively for the Johnston Family Shareholders and no one
else in connection with the Offer and will not be responsible to anyone other
than the Johnston Family Shareholders for providing the protections afforded to
its customers or for providing advice in relation to the Offer.
This press announcement does not constitute an offer or invitation to purchase
any securities or a solicitation of an offer to buy any securities, pursuant to
the Offer or otherwise. The Offer will be made solely by means of an Offer
Document and the Form of Acceptance accompanying the Offer Document, which will
contain the full terms and conditions of the Offer, including details of how the
Offer may be accepted.
The Offer Document and Form of Acceptance accompanying the Offer Document will
be made available to all Johnston Shareholders at no charge to them. Johnston
Shareholders are advised to read the Offer Document and the accompanying Form of
Acceptance when they are sent to them because they will contain important
information.
The availability of the Offer to Johnston Shareholders who are not resident in
the United Kingdom may be affected by the laws of the relevant jurisdictions.
Such persons should inform themselves about and observe any applicable
requirements.
This announcement and the Offer (including the Loan Note Alternative) referred
to in this announcement are not being made and will not be made, directly or
indirectly, in or into, or by use of the mails or by any means or
instrumentality (including, without limitation, telephonically or
electronically) of interstate or foreign commerce of, or by any facilities of, a
national, state or other securities exchange of, the United States, Canada,
Australia or Japan or any other jurisdiction if to do so would constitute a
violation of the relevant laws of such jurisdiction, and the Offer cannot be
accepted by any such use, means or instrumentality or otherwise from or within
the United States, Canada, Australia or Japan or any other such jurisdiction.
Accordingly, this announcement, the Offer Document and the Form of Acceptance or
any accompanying document are not being, and must not be, directly or
indirectly, mailed or otherwise distributed or sent in or into or from the
United States, Canada, Australia or Japan or any such other jurisdiction.
The Loan Notes which may be issued pursuant to the Offer have not been, nor will
they be, registered under the Securities Act or under the securities laws of any
state of the United States; the relevant clearances have not been, nor will they
be, obtained from the securities commission of any province or territory of
Canada; no prospectus has been lodged with, or registered by, the Australian
Securities and Investments Commission or the Japanese Ministry of Finance; and
the Loan Notes have not been, nor will they be, registered under, or offered in
compliance with, applicable securities laws of any state, province, territory or
jurisdiction of Canada, Australia or Japan. Accordingly, the Loan Notes may not
(unless an exemption under relevant securities laws is applicable) be offered,
sold, resold, or delivered, directly or indirectly, in, into or from the United
States, Canada, Australia or Japan or any other jurisdiction if to do so would
constitute a violation of the relevant laws of, or require registration thereof
in, such jurisdiction or to, or for the account or benefit of, any United
States, Canadian, Australian or Japanese person.
The Loan Notes which may be issued pursuant to the Offer have not been, nor will
they be, registered under, or offered in compliance with, applicable securities
laws of Ireland and the Offer Document will not be a prospectus within the
meaning of or for the purposes of the Companies Act 1963 to 2001 (as amended) or
the European Communities (Transferable Securities and Stock Exchange)
Regulations 1992 (as amended) of Ireland. Accordingly the Loan Note Alternative
referred to in this announcement will not be made, directly or indirectly, in or
into, or by use of the mails or by any means or instrumentality (including,
without limitation, telephonically or electronically) of foreign commerce of, or
by any facilities of, a national or other securities exchange of, Ireland, and
the Loan Notes may not (unless an exemption under relevant securities laws is
applicable) be offered, sold, resold, or delivered, directly or indirectly, in,
into or from Ireland.
Not for release, distribution or publication in or into or from the USA, Canada,
Australia or Japan.
24 August 2004
Recommended Cash Offer
by Cazenove & Co. Ltd
on behalf of
Anglo American plc
to acquire the entire issued and to be issued ordinary share capital of
Johnston Group PLC (`Johnston`)
1. Introduction
It was announced on 29 July 2004 that Ennstone proposed to make an offer for
Johnston on the basis of 35 new Ennstone shares and 560 pence in cash for every
4 Johnston Shares. This offer was posted on 4 August 2004. Ennstone did not
seek a recommendation from the Board of Johnston and in view of the involvement
of Michael Johnston and Philippa Marriott (both Directors of Johnston) with
Ennstone and its offer, the Independent Directors have taken responsibility for
considering the offer from Ennstone and considering all options, including any
competing offer and discussions with third parties.
Today it is announced that agreement has been reached on the terms of a cash
offer, recommended by the Board of Johnston and to be made by Cazenove on behalf
of Anglo American, for the entire issued and to be issued ordinary share capital
of Johnston not already owned by Anglo American or its subsidiaries.
2. The Offer
On behalf of Anglo American, Cazenove will offer to acquire, on the terms and
subject to the conditions set out or referred to in this announcement and to be
set out or referred to in the Offer Document and in the Form of Acceptance, the
entire issued and to be issued ordinary share capital of Johnston not already
owned by Anglo American or its subsidiaries on the following basis:
for each Johnston Share 491 pence in cash
The Offer will value the existing issued ordinary share capital of Johnston at
approximately GBP53 million. A Loan Note Alternative will also be provided.
The Offer values the ordinary shares in Johnston that Anglo American or its
subsidiaries do not already own at approximately GBP40 million.
The Offer represents a premium of approximately 21 per cent. over the closing
mid-market price of 405 pence per Johnston Share on 23 August 2004, the last
dealing day prior to this announcement, a premium of 106.7 per cent. over the
closing middle market price of 237.5 pence per Johnston Share at the close of
business on 28 July 2004, the last dealing day prior to the announcement of the
Ennstone Offer, and a 10 per cent. premium to the value of the Ennstone Offer
(valued at the closing middle market price of 35 pence per Ennstone ordinary
share on 28 July 2004, the last dealing day prior to the announcement of the
Ennstone Offer).
The Johnston Shares will be acquired pursuant to the Offer by, or on behalf of,
Anglo American fully paid with full title guarantee, free from all liens,
equities, mortgages, charges, encumbrances, rights of pre-emption and other
third party rights and interests of any nature whatsoever and together with all
rights now or hereafter attaching thereto, including all voting rights and the
right to receive and retain all dividends and other distributions announced,
declared, made or paid on or after the date of this announcement.
The Offer will be subject to the conditions and further terms set out in
Appendix I to this announcement and to those terms which will be set out in the
Offer Document and in the accompanying Form of Acceptance, and such further
terms as may be required to comply with the rules and regulations of the
Financial Services Authority, the UKLA, the London Stock Exchange and the Code.
3. Background to and reasons for the Offer
Between December 2002 and May 2003, Anglo American and its subsidiaries acquired
an interest in 2,696,438 Johnston Shares, representing 24.9 per cent. Of the
issued ordinary share capital of Johnston, at an average price of 418 pence per
Johnston share.
Johnston owns the freehold of Leaton Quarry, a quarry near Telford. This quarry
is operated by Berwyn Granite Quarries Limited, in which Johnston has a 51%
controlling interest. The minority 49% interest is held by Anglo American`s
subsidiary, Tarmac Roadstone Holdings Limited. Johnston also operates a 100%
leasehold interest in Leinthall Quarry, a quarry located near Leominster.
In deciding to make the Offer and in determining the Offer Price, Anglo American
has taken account of a number of factors, including:
- the opportunity to integrate Johnston`s construction materials business into
Anglo American`s existing Industrial Minerals business and to achieve material
synergies;
- the level of interest expressed to both Anglo American and Johnston`s
Independent Directors from third parties wishing to purchase Johnston`s
engineering business; and
- the opportunity to enhance the value of Johnston through Johnston`s material
freehold property interests.
Following completion of the Offer, Anglo American intends to dispose of
Johnston`s engineering business. In addition, Anglo American has granted an
option to Ennstone to enable Ennstone to acquire Leinthall Quarry and asphalt
plant for GBP11.25 million in the event that the Offer is successful. Anglo
American therefore anticipates that the net cost of approximately GBP40 million,
to acquire the ordinary shares of Johnston which the Anglo American Group does
not already own, will be significantly reduced by proceeds realised from
disposals.
4. The Recommendation of the Board of Johnston
The Independent Directors of Johnston, who have been so advised by Close
Brothers, consider the terms of the Offer to be fair and reasonable. In
providing advice to the Independent Directors, Close Brothers has taken into
account the commercial assessments of the Independent Directors.
Accordingly, the Board of Johnston (excluding Michael Johnston and Philippa
Marriott, both Directors of Johnston, who were conflicted from participating in
the relevant deliberations and resolution because of their involvement with
Ennstone and its offer) recommends that Johnston Shareholders accept the Offer,
as the Independent Directors intend to do (or to take steps within their power
to cause acceptance of the Offer) in respect of their own holdings amounting to,
in aggregate, 10,012 Johnston Shares, which represent approximately 0.09 per
cent. of the issued ordinary share capital of Johnston.
5. Undertakings to accept the Offer
Ennstone has released Johnston family shareholders from their irrevocable
undertakings to accept the Ennstone Offer to the extent required to enable them
to accept the Anglo American offer provided that by the date of such acceptance
the Anglo American offer is wholly unconditional (other than as to acceptances).
These irrevocable undertakings will only become binding again in the event that
Anglo American`s offer for Johnston lapses, is withdrawn or does not become
wholly unconditional within the earlier of 42 days of posting the Offer Document
or 56 days from the date of this announcement.
Anglo American has received irrevocable undertakings from certain Johnston
Shareholders, which will remain binding even in the event of a higher offer,
provided that before 3pm on the forty second day following the posting of Anglo
American`s Offer Document the Offer is wholly unconditional (other than as to
acceptances), in respect of an aggregate of 5,427,147 Johnston Shares,
representing approximately 50.1 per cent. of the issued ordinary share capital
of Johnston.
6. Information on Johnston
Construction Materials Division
The construction materials division of Johnston comprises Johnston Roadstone
Limited (coated and dry stone quarry operations) and Johnston Pipes Limited
(concrete building products and glass-reinforced plastic pipes).
Johnston owns the freehold of Leaton Quarry, a quarry near Telford. This quarry
is operated by Berwyn Granite Quarries Limited, in which the company has a 51%
controlling interest. The minority 49% interest is held by Anglo American`s
subsidiary, Tarmac Roadstone Holdings Limited. Johnston also operates a 100%
leasehold interest in Leinthall Quarry, a quarry located near Leominster. The
quarries are both based in the West Midlands and supply dry stone and coated
stone for use in road surfaces, road foundations and general construction.
Johnston Pipes Limited is one of the UK`s leading manufacturers of concrete
drainage products and has recently added a number of new product lines, such as
box culverts and cable ducts, to its range. Customers include Network Rail
Infrastructure Limited, to whom Johnston is an accredited supplier.
Key investment features of the construction materials division include:
- Leaton Quarry (Shropshire, UK) - 100% freehold interest in a quarry with a
51% controlling interest in the operating company.
- Leinthall Quarry (Herefordshire, UK) - 100% leasehold interest in a quarry.
- Combined existing resources of 16 million tones.
- Both quarries supply both drystone and coated roadstone.
- Both quarries have been well maintained and invested.
- The pipes business is a leading manufacturer of concrete drainage products.
The OFT will have the opportunity to consider Anglo American`s bid for full
control of Johnston. As part of the OFT process, Anglo American will be able to
offer divestments of either part of Johnston`s operations or part of Tarmac`s
operations if necessary in order to avoid a reference to the Competition
Commission. Anglo American has procured that Tarmac gives an undertaking (and
Tarmac has so undertaken) to Johnston that, if it is necessary to avoid a
reference to the Competition Commission, it will offer to the OFT to give an
undertaking (and has agreed not to withdraw such an offer) to dispose of any
assets of the Johnston Group (other than those at Leaton) as may be required to
avoid a reference. Anglo American has further agreed not to unreasonably
withhold or delay its acceptance of the terms or conditions of such undertaking.
In addition, Anglo American will have the option to offer divestments of Tarmac
assets if necessary to avoid a reference. Anglo American will consider, in its
absolute discretion, whether any such divestments are reasonable and, if
necessary to avoid a reference to the Competition Commission, may offer Tarmac
assets for divestment instead of divestments of Johnston assets.
Engineering Division
Anglo American intends to dispose of Johnston`s engineering business as it does
not fit with Anglo Industrial Mineral`s core strategy. Anglo American is aware
of third party interest in this business and approaches have already been made
to Anglo American by such parties.
The engineering division manufactures and markets products in the speciality
vehicles sector. The products range includes road and pavement sweepers, street
washers, refuse trucks, litter collection machines and fire tenders. It also
manufactures washroom hand drying equipment in Australia.
The division is a world leading supplier of truck mounted, mid size and compact
sweepers which clean roads, airports, construction sites and pedestrian areas in
municipalities and rural areas across the world.
The engineering division employs over 1,000 people with modern production
facilities in the UK, Denmark, the USA, Canada and Australia, offering the
broadest product range available from any single manufacturer in the sweeper
industry. The engineering division continues to be a leader of the sweeper
industry in quality, innovation and service.
Johnston`s newly appointed Chief Executive Officer, Kash Pandya, has been
conducting an operational review of the Johnston Group`s activities. As part of
the operational review, the Board of Johnston is developing a world-wide sweeper
strategy to leverage its global position and to drive cost improvements.
Summary Johnston Group PLC Financial Performance
Years Ended 31 December
(GBP in 000s)
2001A 2002A 2003A
Sales
Construction Materials 34,091 35,357 37,617
Engineering 108,265 109,168 113,140
Total Group Sales 142,356 144,525 150,757
EBIT
Construction Materials 4,418 5,895 5,872
Engineering 720 -115 -4,407 (1)
Central -898 -1,180 -879
Total Group EBIT 4,240 4,600 586
Depreciation & Amortisation 3,361 3,412 6,103 (1)
Group EBITDA 7,601 8,012 6,689
PBT 3,761 5,188 130
(1) Note 2003 includes an impairment charge of GBP2.5 million
7. Information on Anglo American
Anglo American is one of the world`s largest mining and natural resource groups.
With its subsidiaries, joint ventures and associates, it is a global leader in
gold, platinum group metals and diamonds, and has significant interests in coal,
base and ferrous metals, industrial minerals and paper and packaging. The Group
is geographically diverse with operations in 65 countries in Africa, Europe,
South and North America, Australia and Asia. Anglo American`s ordinary shares
are listed in London, Johannesburg, Switzerland, Botswana and Namibia. For the
year ended 31 December 2003, Anglo American reported total operating profit
before exceptional items of US$2,892m, on group turnover of US$24,909m.
Following completion of the Offer, Johnston`s operations will be transferred
into Anglo Industrial Minerals. Anglo Industrial Minerals, which has two
principal subsidiaries, Tarmac and Copebras, reported operating profits of
US$325m on turnover of US$3,196m for the year ended 31 December 2003.
Tarmac is a leader in the production of construction materials in the UK, with a
growing presence in continental Europe, the Middle East and Far East, and is
principally involved in the production of crushed rock, sand and gravel,
asphalt, concrete and mortar, concrete products, lime and cement.
Copebras is a leading Brazilian producer of phosphate fertilizers, phosphoric
acid and sodium tripolyphosphate (STPP), which is used in the detergent
industry. Copebras has recently expanded its Goias operations in order to meet
increased demand.
8. Independent Directors and employees
The Board of Anglo American has given assurances to the Board of Johnston that,
following the Offer becoming or being declared unconditional in all respects,
the existing employment rights, including the pension rights, of all employees
of the Johnston Group will be fully safeguarded.
The Directors of Johnston have agreed, subject always to their fiduciary duties
to Johnston, to resign from the Board of Johnston following the Offer becoming
or being declared unconditional in all respects.
9. The Loan Note Alternative
Johnston Shareholders (other than certain overseas Johnston Shareholders) who
validly accept the Offer will be entitled to elect to receive Loan Notes to be
issued by Anglo American as an alternative to receiving any or all of the cash
consideration which they would otherwise receive under the Offer on the
following basis:
for every GBP1 of cash consideration: GBP1 nominal of Loan Notes
The Loan Notes will be unsecured obligations of Anglo American and will be
issued, credited as fully paid, in amounts and integral multiples of GBP1 in
nominal value. All fractional entitlements will be disregarded and not paid.
Cazenove has advised that, based on market conditions on 23 August 2004 (the
latest practicable date prior to this announcement), its estimate of the value
of the Loan Notes, if they were in issue on that date, would have been no less
than 99 pence per GBP1 in nominal value of the Loan Notes.
The Loan Notes will bear interest (from the date 14 days after the date on which
the Offer becomes or is declared wholly unconditional or, if later, the date of
issue of the relevant Loan Notes to the relevant holder of Loan Notes) (subject
to any requirement to deduct tax thereon) payable semi-annually in arrears at
the end of the then relevant interest period at the rate of one per cent. below
six month LIBOR as determined on the first business day of each such subsequent
interest period in accordance with the terms of the Loan Note. The first
interest payment will be made in March 2005 in respect of the period from and
including the date 14 days after the Offer becomes or is declared wholly
unconditional or, if later, the date of issue of the relevant Loan Notes up to
(but excluding) that date. The holders of Loan Notes will have the option to
redeem at par all or any part (being GBP100 in nominal amount, or any integral
multiple thereof, or such lesser amount as represents a holder`s entire holding
of Loan Notes) of their Loan Notes at six-monthly intervals. Any loan notes
which have not previously been redeemed will fall to be redeemed by Anglo
American on 31 March 2008.
Unless Anglo American decides otherwise, no Loan Notes will be issued by Anglo
American unless the aggregate nominal value of all Loan Notes to be issued as a
result of valid elections for the Loan Note Alternative exceeds GBP5 million. If
such aggregate is less than GBP5 million, any such election shall, unless Anglo
American decides otherwise, be void and, provided the acceptance of the Offer is
otherwise valid, the relevant Johnston Shareholders will be deemed to have
accepted the cash consideration under the Offer.
The Loan Note Alternative will be conditional upon the Offer becoming or being
declared wholly unconditional. Once the Offer has been declared wholly
unconditional the Loan Note Alternative will remain open for the following 14
days after which time it will be closed. The Loan Notes will not be listed on
any stock exchange, nor is it intended that any trading facility will exist for
the Loan Notes.
Further particulars of the Loan Notes will be set out in the Offer Document.
10. Johnston Share Schemes
The Offer will extend to any Johnston Shares unconditionally allotted or issued,
whilst the Offer remains open for acceptance (or such earlier date as Anglo
American may, subject to the Code, determine), as a result of the exercise of
options granted under the Johnston Share Schemes.
Following the Offer becoming or being declared unconditional in all respects,
appropriate proposals will be made to participants in the Johnston Share Schemes
to the extent that such options have not been exercised or lapsed.
11. Offer for Johnston Preference Shares
It is intended that at or about the same time as the Offer is made, Cazenove
will, on behalf of Anglo American, make an offer for the entire issued
preference share capital of Johnston on the basis of 132 pence per Johnston
Preference Share, representing a premium of approximately 10 per cent. over 120
pence per Johnston Preference Share, the price at which the last trade took
place on 10 August 2004, together with an amount equal to any accrued and unpaid
dividends at the date the Preference Share Offer becomes or is declared
unconditional in all respects, in cash for each Johnston Preference Share and on
the terms and subject to the conditions set out or referred to in this
announcement and to be set out or referred to in the document containing and
setting out the terms and conditions of any such offer, and the form of
acceptance relating thereto, which may be sent to Johnston Preference
Shareholders. The Preference Share Offer would value all of the existing issued
Johnston Preference Shares at approximately GBP1.3 million.
The Preference Share Offer would be conditional on the Offer becoming or being
declared unconditional in all respects. The Loan Note Alternative would not be
available in respect of the Preference Share Offer.
Johnston Preference Shares would be acquired pursuant to the Preference Share
Offer by, or on behalf of, Anglo American fully paid with full title guarantee,
free from all liens, equities, mortgages, charges, encumbrances, rights of pre-
emption and other third party rights and interests of any nature whatsoever and
together with all rights now or hereafter attaching thereto, including all
voting rights and the right to receive and retain all dividends and other
distributions announced, declared, made or paid on or after the date of this
announcement other than dividends which are accrued and paid on or before the
date on which the Preference Share Offer becomes or is declared unconditional in
all respects.
12. Financing of the Offer and Preference Share Offer
The Offer is being, and the Preference Share Offer would be, financed out of
Anglo American`s existing cash resources and committed debt facilities.
13. Compulsory acquisition, de-listing and re-registration
If Anglo American receives acceptances under the Offer in respect of, and/or
otherwise acquires, 90 per cent. or more of the Johnston Shares to which the
Offer relates, and assuming that all of the other conditions of the Offer have
been satisfied or waived (if capable of being waived), Anglo American intends to
exercise its rights pursuant to the provisions of Sections 428 to 430F of the
Companies Act to acquire compulsorily the remaining Johnston Shares on the same
terms as the Offer.
Anglo American would also intend, assuming it becomes entitled to do so, to
exercise its rights pursuant to the provisions of Sections 428 to 430F of the
Companies Act to acquire compulsorily any Johnston Preference Shares not
acquired pursuant to the Preference Share Offer on the same terms as the
Preference Share Offer.
Assuming the Offer becomes or is declared unconditional in all respects, Anglo
American intends to procure the making of an application by Johnston to the UKLA
for the cancellation of the listing of the Johnston Shares and the Johnston
Preference Shares on the Official List of the UKLA and to the London Stock
Exchange for the cancellation of the admission to trading of the Johnston Shares
and the Johnston Preference Shares on its market for listed securities. This
will significantly reduce the liquidity and marketability of Johnston Shares or
Johnston Preference Shares not assented to under the Offer or the Preference
Share Offer, respectively. It is anticipated that the cancellation of Johnston`s
listings and admissions to trading will take effect no earlier than the later of
(i) the expiry of any period during which Johnston Optionholders may elect to
accept proposals made by Anglo American in respect of subsisting options granted
under the Johnston Share Schemes, and (ii) the expiry of 20 business days after
the Offer becomes or is declared unconditional in all respects.
14. General
The Offer will be made on the terms and subject to the conditions set out herein
and in Appendix I, and to be set out in the Offer Document and the accompanying
Form of Acceptance. These will be despatched to Johnston Shareholders and, for
information only, to Johnston Optionholders by no later than 7 September 2004.
The Offer and acceptances thereof will be governed by English law. The Offer
will be subject to the applicable requirements of the Code, the Panel, the
London Stock Exchange and the UKLA.
The availability of the Offer to persons not resident in the United Kingdom may
be affected by the laws of the relevant jurisdictions. Such persons should
inform themselves of, and observe, any applicable requirements.
This announcement does not constitute an offer or an invitation to purchase any
securities.
Save for the disclosed holding of 2,696,438 Johnston Shares, no member of the
Anglo American Group nor any person deemed to be acting in concert with the
Anglo American Group for the purposes of the Offer owns or controls any Johnston
Shares or any securities convertible or exchangeable into Johnston Shares or any
rights to subscribe for, or options (including traded options) in respect of, or
derivatives referenced to, any such Johnston Shares (`relevant Johnston
securities`) nor does any such person have any arrangement in relation to
relevant Johnston securities. For these purposes, `arrangement` includes an
indemnity or option arrangement, or agreement or understanding, formal or
informal, or whatever nature, relating to Johnston Shares which may be an
inducement to deal or refrain from dealing in such shares.
Enquiries:
Anglo American plc 020 7698 8888
Robbie Robertson
Nick von Schirnding
Kate Aindow
Cazenove & Co. Ltd 020 7588 2828
(Financial Adviser to Anglo American)
Nick Wiles
Patrick Magee
Johnston Group PLC 020 7920 3150
Chris Woodwark
Close Brothers Corporate Finance Limited 020 7655 3100
(Financial Adviser to Johnston)
Andrew Cunningham
Tim Evans
Tavistock Communications 020 7920 3150
(Public Relations Adviser to Johnston)
Lulu Bridges
Justin Griffiths
WestLB 020 7020 2000
(Advisers to Johnston family)
Nick Wells
Frank Malone
Cazenove, which is regulated in the United Kingdom by the Financial Services
Authority, is acting exclusively for Anglo American and for no one else in
connection with the Offer and will not be responsible to anyone other than Anglo
American for providing the protections afforded to clients of Cazenove or for
giving advice in relation to the Offer.
Close Brothers, which is regulated in the United Kingdom by the Financial
Services Authority is acting exclusively for Johnston and no one else in
connection with the Offer and will not be responsible to anyone other than
Johnston for providing the protections afforded to its customers or for
providing advice in relation to the Offer.
WestLB, which is regulated in the United Kingdom by the Financial Services
Authority is acting exclusively for the Johnston Family Shareholders and no one
else in connection with the Offer and will not be responsible to anyone other
than the Johnston Family Shareholders for providing the protections afforded to
its customers or for providing advice in relation to the Offer.
This announcement and the Offer (including the Loan Note Alternative) referred
to in this announcement are not being made and will not be made directly or
indirectly, in or into, or by use of the mails or by any means or
instrumentality (including, without limitation, telephonically or
electronically) of interstate or foreign commerce of, or by any facilities of, a
national, state or other securities exchange of, the United States, Canada,
Australia or Japan or any other jurisdiction if to do so would constitute a
violation of the relevant laws of such jurisdiction, and the Offer cannot be
accepted by any such use, means or instrumentality or otherwise from or within
the United States, Canada, Australia or Japan or any other such jurisdiction.
Accordingly, this announcement, the Offer Document and the Form of Acceptance or
any accompanying document are not being, and must not be, directly or
indirectly, mailed or otherwise distributed or sent in or into or from the
United States, Canada, Australia or Japan or any such other jurisdiction.
The Loan Notes which may be issued pursuant to the Offer have not been, nor will
they be, registered under the Securities Act or under the securities laws of any
state of the United States; the relevant clearances have not been, nor will they
be, obtained from the securities commission of any province or territory of
Canada; no prospectus has been lodged with, or registered by, the Australian
Securities and Investments Commission or the Japanese Ministry of Finance; and
the Loan Notes have not been, nor will they be, registered under, or offered in
compliance with, applicable securities laws of any state, province, territory or
jurisdiction of Canada, Australia or Japan. Accordingly, the Loan Notes may not
(unless an exemption under relevant securities laws is applicable) be offered,
sold, resold, or delivered, directly or indirectly, in, into or from the United
States, Canada, Australia or Japan or any other jurisdiction if to do so would
constitute a violation of the relevant laws of, or require registration thereof
in, such jurisdiction or to, or for the account or benefit of, any United
States, Canadian, Australian or Japanese person.
The Loan Notes which may be issued pursuant to the Offer have not been, nor will
they be, registered under, or offered in compliance with, applicable securities
laws of Ireland and the Offer Document will not be a prospectus within the
meaning of or for the purposes of the Companies Act 1963 to 2001 (as amended) or
the European Communities (Transferable Securities and Stock Exchange)
Regulations 1992 (as amended) of Ireland. Accordingly the Loan Note Alternative
referred to in this announcement will not be made, directly or indirectly, in or
into, or by use of the mails or by any means or instrumentality (including,
without limitation, telephonically or electronically) of foreign commerce of, or
by any facilities of, a national or other securities exchange of, Ireland, and
the Loan Notes may not (unless an exemption under relevant securities laws is
applicable) be offered, sold, resold, or delivered, directly or indirectly, in,
into or from Ireland.
APPENDIX I
Conditions and certain further terms of the Offer and the Preference Share Offer
The Offer, which will be made by Cazenove on behalf of Anglo American, will
comply with the applicable rules and regulations of the UK Listing Authority,
the London Stock Exchange and the Code, will be governed by English law and will
be subject to the jurisdiction of the Courts of England and Wales and will be
subject to the terms and conditions set out in this announcement and those in
the Offer Document and the Forms of Acceptance.
Part A. Conditions of the Offer
The Offer will be subject to the following conditions:
(a) valid acceptances being received (and not, where permitted, withdrawn) by
no later than 3.00 p.m. (London time) on the first closing date of the Offer (or
such later time(s) and/or date(s) as Anglo American may, with the consent of the
Panel or in accordance with the rules of the Code, decide) in respect of not
less than 67 per cent. (or such lower percentage as Anglo American may decide)
in nominal value of Johnston Shares to which the Offer relates, provided that
this condition will not be satisfied unless Anglo American, together with any
member of Anglo American`s Group, shall have acquired or agreed to acquire
(whether pursuant to the Offer or otherwise) Johnston Shares carrying in
aggregate more than 50 per cent. of the voting rights then normally exercisable
at a general meeting of Johnston, including for this purpose, to the extent (if
any) required by the Panel, any such voting rights attaching to any Johnston
Shares that may be unconditionally allotted or issued before the Offer becomes
or is declared unconditional as to acceptances whether pursuant to the exercise
of any outstanding conversion or subscription rights or otherwise; and for this
purpose:
(i) any Johnston Shares which have been unconditionally allotted but not issued
before the Offer becomes or is declared unconditional as to acceptances, whether
pursuant to the exercise of any outstanding subscription or conversion rights or
otherwise, shall be deemed to carry the voting rights they will carry upon their
being entered in the register of members of Johnston;
(ii) the expression `Johnston Shares to which the Offer relates` shall be
construed in accordance with Sections 428 to 430F of the Companies Act; and
(iii) valid acceptances shall be treated as having been received in respect of
any Johnston Shares which Anglo American shall, pursuant to Section 429(8) of
the Companies Act, be treated as having acquired or contracted to acquire by
virtue of acceptance of the Offer;
(b)
(i) the Office of Fair Trading (the `OFT`) indicating in terms satisfactory to
Anglo American that it does not believe that the proposed acquisition of all or
any of the Johnston Shares to which the Offer relates (the `Transaction`)
creates a relevant merger situation within the meaning of section 23 of the
Enterprise Act 2002 (`EA`); or
(ii) the OFT indicating in terms satisfactory to Anglo American that it has
decided not to refer the Transaction or any part of it to the Competition
Commission (the `CC`), either unconditionally or subject to the giving of
undertakings acceptable to Anglo American; or
(iii) the period for considering any merger notice given to the OFT under
section 96 of the EA by Anglo American having expired without any such reference
being made, provided that section 100 of the EA does not apply in relation to
such merger notice.
(c) save as disclosed in the annual report and accounts of Johnston for the
twelve months ended 31 December 2003, in filings by Johnston with the Document
Viewing Facility of the UKLA, in writing by Johnston or its advisers to Anglo
American, or as publicly announced by Johnston by the delivery of an
announcement to a Regulatory Information Service in each case prior to the date
on which the Offer is announced (the `Announcement Date`) (such public
announcements, disclosures or information being referred to in these terms and
conditions as being ``revealed``), there being no provision of any agreement,
authorisation, arrangement, franchise, consent, licence, permit or other
instrument to which any member of the Wider Johnston Group is a party or by or
to which any such member or any of its assets may be bound, entitled or subject,
which as a result of the Offer or the proposed acquisition by Anglo American of
any shares in, or control of, Johnston or otherwise, is reasonably likely to
result (in any case to an extent which is material in the context of the Wider
Johnston Group taken as a whole) in:
(i) any monies borrowed by, or any other indebtedness, actual or contingent, of
or any grant available to, any such member being or becoming repayable or
capable of being declared repayable immediately or earlier than its stated
maturity date, or the ability of any such member to borrow monies or incur any
indebtedness being withdrawn, prohibited or inhibited;
(ii) any such agreement, authorisation, arrangement, franchise, consent,
licence, permit or instrument or the rights, liabilities, obligations or
interests of any such member thereunder being terminated or adversely modified
or affected or any onerous obligation arising or any adverse action being taken
or arising or any obligation or liability arising thereunder;
(iii) the rights, interests or business of any such member in or with any other
person, firm or company (or any arrangements relating to such interests or
business) being terminated, modified or adversely affected;
(iv) any assets or interests of any such member being or falling to be disposed
of or charged or ceasing to be available to any such member or any right arising
under which any such asset or interest is reasonably likely to be required to be
disposed of or charged or is reasonably likely to cease to be available to any
such member otherwise than in the ordinary course of business;
(v) the creation or enforcement of any mortgage, charge or other security
interest over the whole or any part of the business, property or assets of any
such member or any such security (whenever created, arising or having arisen)
becoming enforceable or being enforced;
(vi) the financial or trading position, profits and prospects of any member of
the Wider Johnston Group being prejudiced or adversely affected;
(vii) the creation of any liabilities (actual or contingent) by any member of
the Wider Johnston Group; or
(viii) any such member ceasing to be able to carry on business under any name
under which it presently does so or, any person presently not able to carry on
business under any name under which any member of the Wider Johnston Group
presently does becoming able to do so;
and no event having occurred which, under any provision of any such arrangement,
authorisation, agreement, licence, consent, permit, franchise or other
instrument, is reasonably likely to result in any of the events or circumstances
which are referred to in paragraphs (i) to (viii) of this condition (e) in any
case to an extent which is or would be material in the context of the Wider
Johnston Group taken as a whole;
(d) no government, government department or governmental, quasi-governmental,
supranational, statutory, regulatory, environmental or investigative body or
authority (including, without limitation, any national anti-trust or merger
control authority), court, trade agency, professional association, institution
or any other body or person whatsoever in any jurisdiction (each a ``Third
Party`` and all collectively ``Third Parties``) having instituted, implemented
or threatened, or having decided to institute, implement or threaten, any
action, proceeding, suit, investigation, enquiry or reference or having made,
proposed or enacted any statute, regulation, order or decision or taken any
other steps which would or is reasonably likely to (in any case to an extent
which is material in the context of the Wider Johnston Group or the Wider Anglo
American Group, as the case may be, in each case taken as a whole):-
(i) make the Offer or its implementation or the proposed acquisition by Anglo
American of all or any Johnston Shares, or control of, Johnston by Anglo
American, void, illegal and/or unenforceable under the laws of any relevant
jurisdiction, or otherwise, directly or indirectly, restrain, restrict,
prohibit, challenge, frustrate, delay or interfere with the same, or impose
additional material conditions or obligations with respect thereto, or otherwise
require material amendment to the terms of the Offer or any such acquisition
(including, without limitation, taking any steps which would entitle the
Johnston Board to require Anglo American to dispose of all or some of its
Johnston Shares or restrict the ability of Anglo American to exercise voting
rights in respect of some or all of such Johnston Shares);
(ii) require or prevent the divestiture, or alter the terms envisaged for any
proposed divestiture, by any member of the Wider Anglo American Group or any
member of the Wider Johnston Group of all or any material portion of their
respective businesses, assets or properties or impose any limitation on the
ability of any of them to conduct their respective businesses or to own any of
their respective assets or property;
(iii) impose any limitation on, or result in a delay in, the ability of any
member of the Wider Anglo American Group or of the Wider Johnston Group to
acquire or hold or exercise effectively, directly or indirectly, all or any
rights of ownership in respect of shares or other securities (or the equivalent)
in any member of the Wider Johnston Group or to exercise management control over
any such member;
(iv) otherwise adversely affect in any respect any or all of the businesses,
assets, profits or prospects of any member of the Wider Anglo American Group or
any member of the Wider Johnston Group respectively;
(v) result in any member of the Wider Johnston Group ceasing to be able to
carry on business or impose any limitation on the ability of any member of the
Wider Anglo American Group or any member of the Wider Johnston Group to
integrate or co-ordinate its business, or any part of it, with the business of
any member of the Wider Johnston Group or the Wider Anglo American Group; or
(vi) save pursuant to the Offer or the Preference Share Offer, require any
member of the Wider Anglo American Group or of the Wider Johnston Group to offer
to acquire any shares or other securities (or the equivalent) in any member of
the Wider Johnston Group owned by any third party,
all applicable waiting and other time periods during which any such Third Party
could decide to take, institute, implement or threaten any action, proceeding,
suit, investigation, enquiry or reference under the laws of any relevant
jurisdiction or
