Dekel Agri Regulatory News (DKL)

6 Mar 2006 07:56

European Tobacco Development S.A.06 March 2006 6 March 2006 NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN OR INTO OR FROM A US RESTRICTED JURISDICTION, CANADA, AUSTRALIA OR JAPAN Recommended Mandatory Cash Offer by Solomon Hare Corporate Finance on behalf of European Tobacco Development S.A. ("ETD") for Dickinson Legg Group plc ("DLG") Summary • The Boards of ETD and DLG announce the terms of a recommended mandatory cash offer to be made on behalf of ETD by Solomon Hare Corporate Finance to acquire the entire issued and to be issued ordinary share capital of DLG not already owned or contracted to be acquired by ETD. • On 3 March 2006 ETD agreed to purchase at 17.75 pence per share 18,602,377 DLG Shares, representing approximately 51.2 per cent. of the entire issued share capital of DLG. These purchases were conditional upon ETD having announced the Offer by 11.59 p.m. on 6 March 2006 and ETD having entered into sale and purchase agreements giving ETD the right to acquire at least 50.01 per cent. of the entire issued share capital of DLG. As a consequence ETD became obliged, pursuant to Rule 9 of the City Code, to make the Offer. • The Offer, which will not be subject to any conditions, will be made for all of the DLG Shares not already owned or contracted to be acquired by ETD at a price of 17.75 pence in cash per share. • The Offer values the entire issued share capital of DLG at approximately £6.45 million. The Offer price of 17.75 pence represents a 16.39 per cent. premium to the closing middle market share price of a DLG Share of 15.25 pence on 3 March 2006, the last business day before this Announcement, as derived from the Daily Official List, and a 18.57 per cent. premium to the average closing price of a DLG Share over the twelve months prior to this Announcement. • The Directors of DLG recommend unanimously that DLG Shareholders accept the Offer. • ETD is incorporated as a societe anonyme in Luxembourg and is a subsidiary of Garbuio. Garbuio, which is based in Italy, is a manufacturer of tobacco processing machinery and plants. Commenting on the Offer, Mansueto Favaro (Chief Executive of Garbuio) said: "We are delighted to be announcing this transaction. The combined strengths ofGarbuio and Dickinson Legg will make the enlarged entity a much strongercompetitive force in the marketplace and lead to a real opportunity to grow thecombined businesses in the field of tobacco primary processing equipment." Commenting on the Offer, Barry Stevenson (Chairman of DLG) said: "The markets DLG operates in have been depressed for some years and remainfiercely competitive. The Board has believed for some time that consolidation in the tobacco primary processing equipment sector was necessary. In recommending the Offer, the Board considered it to be fair and reasonable providing shareholders with the opportunity to realise their investment in cash at a premium to the market price prior to the Offer announcement." Enquiries: ETD/Garbuio DLGMansueto Favaro Barry Stevenson0039 0422 431140 07970 734731 Solomon Hare Corporate Rowan Dartington & Co Buchanan CommunicationsFinance LimitedNick Reeve, David Abbott Barry Newton Richard Darby, James Strong0117 933 3344 0117 933 0011 020 7466 5000 1. Introduction The Boards of ETD and DLG announce the terms of a recommended mandatory cash offer, to be made by Solomon Hare Corporate Finance on behalf of ETD, to acquire all of the issued and to be issued share capital of DLG not already owned or contracted to be acquired by ETD. On 3 March 2006 ETD agreed to purchase for 17.75 pence per share 18,602,377 DLG Shares, representing approximately 51.2 per cent. of the entire issued share capital of DLG. These purchases were conditional upon ETD announcing the Offer by 11.59 p.m. on 6 March 2006 and ETD having entered into sale and purchase agreements giving ETD the right to acquire at least 50.01 per cent. of the entire issued share capital of DLG. As a consequence of these purchases ETD became obliged, pursuant to Rule 9 of the City Code, to make the Offer. As the Offer is mandatory and as ETD already owns more than 50 per cent. of DLG's issued ordinary share capital, the Offer will be unconditional in all respects. 2. The Offer The Offer will be made on, and subject to, the terms set out below and to be set out in the Offer Document and the Form of Acceptance. The Offer will be made for all of the issued and to be issued share capital of DLG (other than those DLG Shares beneficially owned by ETD or contracted to be acquired by ETD) on the following basis: for each DLG Share 17.75 pence in cash The Offer values DLG's entire issued share capital at approximately £6.45 million. The Offer price of 17.75 pence represents a premium of 16.39 per cent. over the closing middle market price of 15.25 pence per DLG Share on 3 March 2006, the last business day prior to the announcement of the Offer and commencement of the Offer Period and a 18.57 per cent. premium to the average share price of a DLG Share of 14.97 pence in the 12 months prior to this announcement. The Offer extends to any DLG Shares in issue or unconditionally allotted fully paid (or credited as fully paid) on the date on which the Offer is made and to any further DLG Shares unconditionally allotted or issued fully paid (or credited as fully paid) while the Offer remains open for acceptance (or such earlier date as ETD may, subject to the City Code or with the consent of the Panel, determine). DLG Shares will be acquired by ETD fully paid and free from all liens, equitable interests, charges, encumbrances, pre-emption rights and all other third party interests and rights of whatsoever nature and together with all rights now or hereafter attaching thereto, including the right to receive all dividends and other distributions declared, made or paid hereafter. 3. Recommendation The DLG Board, which has been so advised by Rowan Dartington, its financial adviser, considers the terms of the Offer to be fair and reasonable. In providing financial advice to the DLG Board, Rowan Dartington has taken into account the commercial assessments of the DLG Directors. Accordingly the DLG Directors recommend unanimously that DLG Shareholders accept the Offer. 4. Share Purchase Agreements and Irrevocable Undertaking ETD has received an irrevocable undertaking to accept the Offer from Thomas Mackie, a director of DLG, in respect of his entire beneficial holding, amounting in aggregate to 100,000 Shares in DLG, representing approximately 0.3 per cent. of the issued share capital of DLG. The remaining Directors of DLG do not have beneficial shareholdings in the ordinary share capital of DLG. In addition, as explained above, ETD has already agreed to purchase in aggregate 18,602,377 DLG shares at 17.75 pence for each share, representing approximately 51.2 per cent. of the issued shares capital of DLG. Therefore, ETD now owns or has received an irrevocable undertaking to accept the Offer in respect of 18,702,377 DLG Shares, representing approximately 51.5 per cent. of the issued share capital of DLG. 5. Rationale for the Offer ETD is a subsidiary of Garbuio, an Italian registered company operating in the tobacco processing equipment market. Its directors believe that the Acquisition will bring important strategic, commercial and financial benefits to the enlarged group, thereby enabling it to better compete in the global market for tobacco processing equipment. 6. Financing of the Offer Full acceptance of the Offer would result in a maximum cash payment of approximately £3.15 million being paid to DLG Shareholders for those DLG Shares not already held by ETD. Solomon Hare Corporate Finance is satisfied that sufficient resources are available to ETD to satisfy the cash consideration payable on full acceptance of the Offer. 7. Further terms of the Offer The Offer will lapse if the Offer is referred to the Competition Commission before 1.00 p.m. (London time) on 27 March 2006. In such circumstances, the Offer will cease to be capable of further acceptance and ETD and accepting DLG Shareholders shall thereupon cease to be bound by acceptances submitted at or before the time when the Offer so lapses. 8. Information on ETD ETD is a company incorporated as a societe anonyme in Luxembourg on 5 September 1996. The ultimate parent company of ETD is Fintrevi, an Italian registered holding company. 9. Information on DLG DLG acts as a holding company co-ordinating the activities of its subsidiaries, which are primarily engaged in the design, manufacture and sale of specialist engineering equipment. It was created following a demerger from Brunel Holdings plc on 16 December 2002 and has two divisions, Dickinson Legg and Spooner. The unaudited interim results of DLG for the six months ended 31 December 2005 were announced on 9 February 2006. DLG reported a 15.9 per cent. reduction in turnover in this period to £12.3 million from £14.7 million in the corresponding six month period of 2004. The loss before tax was £0.9 million in the six months ended 31 December 2005 versus £0.6 million for the corresponding period in 2004. Shareholders' funds at 31 December 2005 were approximately £5.8 million. 10. Directors and employees The non-executive directors of DLG have agreed to resign from the Board of DLG immediately following the posting of the Offer Document. Barry Stevenson, Tom Mackie and David Heath will remain on the board until 1.00 p.m. on 27 March 2006 in order to ensure continuity in the event of the Offer lapsing following referral to the Competition Commission. In the event that no such referral has taken place by this time, Tom Mackie and Barry Stevenson will resign from the Board of DLG. David Heath has agreed to remain on the Board of DLG following the Offer. Mansueto Favaro, Filippo Jelmoni, Francesco Maria Rossi and Roger Spry have been elected to the Board of DLG on terms that their appointment shall take effect immediately following posting of the Offer Document. Mansueto Favaro, Filippo Jelmoni and Francesco Maria Rossi are directors of Garbuio (the parent company of ETD). The board of ETD has confirmed that the existing contractual and statutory employment rights, including pension rights, of all employees of DLG will be fully safeguarded. 11. Intentions of ETD following completion of the Offer Following completion of the Acquisition, the intention is to integrate the tobacco business of DLG with that of Garbuio. The enlarged business will seek to maximise synergistic benefits arising from the Acquisition. Immediately following the posting of the Offer Document, nominees of ETD, as described in paragraph 10 of this Announcement, will be appointed to the DLG board. A priority of the new board will be to conduct a strategic review, the outcome of which could include a decision to dispose of Spooner. 12. Inducement fee agreement On 29 December 2005, Garbuio and DLG agreed an inducement fee in relation to the Offer (which was subsequently amended by a supplemental inducement fee agreement dated 23 January 2006) of up to £100,000, which was payable in certain circumstances if the Offer was not made. The inducement fee arrangements were a prerequisite of ETD proceeding with its due diligence requirements. 13. DLG Share Option Scheme The Offer extends, subject to the terms set out or referred to in the Offer Document or in the Form of Acceptance, to any DLG Shares which are unconditionally allotted or issued fully paid (or credited as fully paid), whilst the Offer remains open for acceptance (or by such earlier time and date as ETD may, subject to the City Code or with the consent of the Panel, determine), as a result of the exercise of DLG Share Options granted under the DLG Share Option Scheme. ETD will write to the participants in the DLG Share Option Scheme to inform them of the effect of the Offer on their rights under the DLG Share Option Scheme and to set out any proposals to be made in respect of their options, if appropriate. 14. Cancellation of AIM admission and compulsory acquisition Subject to the requirements of the London Stock Exchange, ETD intends to seek cancellation of the admission of DLG Shares to AIM and re-register DLG as a private company. If this should occur, it would significantly reduce the liquidity and marketability of any DLG Shares in respect of which valid acceptances of the Offer are not received. Even if DLG Shares remain admitted to AIM there would not necessarily be a liquid market for them. Cancellation of the admission of the DLG Shares to trading on AIM will significantly reduce the liquidity and marketability of any DLG Shares not acquired under the Offer. Should valid acceptances be received in respect of not less that 90 per cent. of the DLG Shares which are the subject of the Offer, ETD may apply the provisions of sections 428 to 430F of the Companies Act to acquire compulsorily any DLG Shares, in respect of which valid acceptances have not been received. 15. General The terms of the offer will be set out in the formal Offer Document and Form of Acceptance. The Offer Document, together with a Form of Acceptance, will be despatched to DLG Shareholders (other than to DLG Shareholders with addresses in a US Restricted Jurisdiction, Canada, Australia or Japan) and, for information only to DLG Share Option Holders as soon as practicable. Save as summarised at paragraph 4 of this Announcement, neither any member of the Garbuio group nor, so far as Garbuio is aware, any person deemed to be acting in concert with any member of the Garbuio group for the purposes of the Offer owns or controls any DLG Shares or any securities convertible or exchangeable into DLG Shares or any rights to subscribe for, or options (including traded options) in respect of, or derivatives referenced to securities of DLG ("relevant DLG securities") nor does any such person have any arrangement in relation to relevant DLG securities. For these purposes, "arrangement" includes an indemnity or option arrangement, any agreement or understanding, formal or informal, of whatever nature, relating to DLG Shares which may be an inducement to deal or refrain from dealing in such shares. In the interests of secrecy prior to this Announcement, Garbuio has not made any enquiries in this respect of certain parties who may be deemed by the Panel to be acting in concert with it for the purposes of the Offer. Enquiries of such parties will be made as soon as practicable following the date of this Announcement and any material disclosure in respect of such parties will be included in the Offer Document. 16. Summary of dealing disclosure requirements Under the provisions of Rule 8.3 of the City Code if any person is, or becomes interested (directly or indirectly) in 1% or more of any class of "relevant securities" of DLG, all "dealings" in any "relevant securities" of that company (including by means of an option in respect of, or a derivative referenced to, any such relevant securities) must be publicly disclosed by no later than 3:30pm (London time) on the London business day following the date of the relevant transaction. This requirement will continue until the first closing date of the Offer. If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire an "interest" in "relevant securities" of DLG, they will be deemed to be a single person for purposes of Rule 8.3. Under the provisions of Rule 8.1 of the Code, all "dealings" in "relevant securities" of DLG by ETD or DLG, or by any of their respective "associates", must be disclosed by no later than 12:00 noon (London time) on the London business day following the date of the relevant transaction. A disclosure table, giving details of the companies in whose "relevant securities" "dealings" should be disclosed, and the number of such securities in issue, can be found on the Takeover Panel's website at www.thetakeoverpanel.org.uk "Interests in securities" arise, in summary, when a person has long economic exposure, whether conditional or absolute, to changes in the price of securities. In particular, a person will be treated as having an "interest" by virtue of the ownership or control of securities, or by virtue of any option in respect of, or derivative referenced to, securities. Terms in quotation marks are defined in the Code, which can also be found on the Panel's website. If you are in any doubt as to whether or not you are required to disclose a "dealing" under Rule 8, you should consult the Panel. The Garbuio Directors accept responsibility for the information contained inthis Announcement, other than that for which the ETD Directors and the DLGDirectors accept responsibility as stated below. To the best of the knowledgeand belief of the Garbuio directors (who have taken all reasonable care toensure that such is the case), such information contained in this Announcementfor which they are responsible is in accordance with the facts and does not omit anything likely to affect the import of such information. The ETD Directors accept responsibility for the information contained in thisAnnouncement relating to ETD, the ETD Group, the ETD Directors and members oftheir immediate families and related trusts and persons connected with them(within the meaning of Section 346 of the Act). To the best of the knowledge and belief of the ETD Directors (who have taken all reasonable care to ensure that such is the case), such information, contained in this Announcement, for which they take responsibility is in accordance with the facts and does not omit anything likely to affect the import of such information. The DLG Directors accept responsibility for the information contained in thisAnnouncement relating to DLG, the DLG Group, the DLG Directors and members oftheir immediate families and related trusts and persons connected with them(within the meaning of Section 346 of the Act). To the best of the knowledge and belief of the DLG Directors (who have taken all reasonable care to ensure that such is the case), such information, contained in this Announcement, for which they take responsibility is in accordance with the facts and does not omit anything likely to affect the import of such information. Solomon Hare Corporate Finance, which is regulated by the Institute of Chartered Accountants in England and Wales, is acting exclusively as financial adviser to ETD and no one else in connection with the Offer and other matters described herein and will not be responsible to anyone other than ETD for providing the protections afforded to customers of Solomon Hare Corporate Finance or for giving advice in relation to the Offer or in relation to any other matter referred to in this Announcement. Finanziaria Internazionale Holdings S.p.A is acting exclusively for Garbuio andno-one else in connection with the Offer and other matters described herein. Rowan Dartington & Co Limited, which is authorised and regulated by theFinancial Services Authority, is acting exclusively as financial adviser to DLGand no one else in connection with the Offer and will not be responsible toanyone other than DLG for giving the protections afforded to customers of RowanDartington & Co Limited or for providing advice in relation to the Offer or anyother matter referred to in this Announcement. The Offer will not be made, directly or indirectly, in or into, any USRestricted Jurisdiction, Canada, Australia, Japan or any other jurisdiction ifto do so would constitute a violation of the relevant laws of such jurisdiction,or by use of the mails of, or by any means, instrumentality or by any facilities of a national, state or other securities exchange of any US Restricted Jurisdiction, Canada, Australia, Japan or any other jurisdiction if to do so would constitute a violation of the relevant laws of such jurisdiction and the Offer will not be capable of acceptance by any such use, means, instrumentality or facility, or from within any US Restricted Jurisdiction, Canada, Australia, Japan or any such other jurisdiction and doing so may render invalid any purported acceptance. Accordingly, copies of this Announcement, the Offer Document, the Form of Acceptance and any related offering documents will not and must not be mailed, forwarded, sent, transmitted or otherwise distributed in, into or from any US Restricted Jurisdiction, Canada, Australia, Japan or any such other jurisdiction and all persons receiving such documents (including, without limitation, custodians, nominees and trustees) should observe these restrictions and must not distribute, forward, mail or transmit or send them in, into or from any US Restricted Jurisdiction, Canada, Australia, Japan or any such other jurisdiction. Any person (including without limitation, custodians,nominees and trustees) who would otherwise intend to forward this Announcementto any jurisdiction outside the United Kingdom or to Overseas Shareholders,should seek appropriate professional advice before taking any action. This Announcement does not constitute, or form part of, an offer or aninvitation to purchase securities. Any response in relation to the Offer shouldbe made only on the basis of the information contained in the Offer Document. Definitions The following definitions apply throughout this announcement unless the contextotherwise requires: "Act" or the Companies Act 1985 (as amended);"CompaniesAct" "Acquisition" the proposed acquisition by ETD of all of the issued share capital of DLG (not already acquired or agreed to be acquired) by ETD by means of the Offer; "AIM" the market of that name operated by the London Stock Exchange "Announcement" the announcement, made in respect of the Offer and dated 6 March 2006; "Australia" the commonwealth of Australia, its states, territories and possessions; "Board" or the boards of DLG and/or ETD as the context requires;"Boards" "Business Day" a day other than a Saturday or Sunday or public holiday in England and Wales; "Canada" Canada, its provinces and territories and all areas subject to its jurisdiction or any political subdomain thereof; "Code" or the City Code on Takeovers and Mergers;"City Code" "Connected a person connected with another for the purposes of section 346Person" of the Act; "CREST" the relevant system (as defined in the Regulations) in respect of which CRESTCo Limited is the Operator (as defined in the Regulations); "CRESTCo" CRESTCo Limited "Daily the daily official list of the London Stock Exchange;Official List" "Dickinson the tobacco processing machinery business of DLG;Legg" "DLG" Dickinson Legg Group plc; "DLG Board" the board of directors of DLG;or "DLG Directors" "DLG Group" DLG and its subsidiary and associated undertakings and, where the context permits, each of them; "DLG Share the share option scheme adopted and operated by DLGOption Scheme" "DLG holder(s) of DLG Shares;Shareholders" "DLG Shares" the existing unconditionally allotted or issued and fully paid ordinary shares of 20 pence each in the capital of DLG and any further such shares which are issued or unconditionally allotted and fully paid (or credited as fully paid) while the Offer remains open for acceptance (or such earlier date, not being earlier than the First Closing Date, as ETD may, subject to the City Code, decide); "Directors" the directors of DLG and/or ETD as the context requires; "Escrow Agent" Computershare Investor Services PLC (in its capacity as an Escrow Agent as described in the CREST manual issued by CRESTCo); "ETD" or European Tobacco Development S.A.;"Offeror" "ETD Group" ETD and its subsidiary and associated undertakings and, where the context permits, each of them; "Fintrevi" Fintrevi S.r.l.; "First Closing the first closing date of the Offer, expected to fall 21 daysDate" after the date on which the Offer Document is posted; "Form of the form of acceptance issued in connection with the Offer;Acceptance" "Garbuio" Garbuio S.p.A.; "London Stock London Stock Exchange plc;Exchange" "Member the identification code or number attached to any member accountAccount ID" in CREST; "Offer" the recommended mandatory cash offer being made by Solomon Hare Corporate Finance on behalf of ETD to acquire all of the DLG Shares (not already owned by ETD or agreed to be acquired) on the terms and conditions set out in this document and the Form of Acceptance including, where the context so requires, any subsequent revision; "Offer Period" the period commencing on 6 March 2006 and ending on the date which is the latest of (i) the First Closing Date; and (ii) the date on which the Offer lapses; "Overseas DLG Shareholders with registered addresses outside the UK or whoShareholders" are citizens or residents of countries other than the UK; "Panel" the Panel on Takeovers and Mergers; "Participant the identification code or membership number used in CREST toID" identify a particular member of CREST or other participant in CREST; "Regulations" Uncertificated Securities Regulations 2001 (SI 2001/3755); "Regulatory a Regulatory Information Service from time to time listed inInformation Appendix 3 of the Listing Rules made by the Financial ServicesService" Authority; "Restricted Australia, Canada or Japan or any US Restricted Jurisdiction orJurisdiction" any other jurisdiction where extension or acceptance of the Offer would violate the law of that jurisdiction; "Rowan Rowan Dartington & Co. Limited;Dartington" "Spooner" the air drying equipment business of DLG; "Solomon Hare a division of Solomon Hare LLP, Chartered Accountants, which isCorporate regulated by the Institute of Chartered Accountants in EnglandFinance" and Wales in relation to corporate finance advice; "Subsidiary" shall be construed in accordance with the Companies Act (save as and set out below);"Subsidiary Undertaking""TTE a transfer to Escrow instruction (as defined in the CREST manualInstruction" issued by CRESTCo); "UK or United the United Kingdom of Great Britain and Northern Ireland;Kingdom" "UK Listing the Financial Services Authority in its capacity as competentAuthority" authority under Part VI of the Financial Services and Markets Act 2000; "US" or "USA" the United States of America, its territories and possessions,or "United any state of the United States of America and the District ofStates" Columbia and all other territories subject to its jurisdiction; "US Person(s)" has the meaning given in Regulation S under the US Securities Act of 1933, as amended; "US Restricted any jurisdiction in the United States of America (including eachJurisdiction" State and the District of Columbia), its territories and possessions where it would be unlawful to make the Offer without prior registration or qualification and there is no applicable exemption from registration or qualification; "US Securities the United States Securities Act of 1933 (as amended);Act" "VAT" value added tax of the United Kingdom; All references to legislation in this Announcement are to English legislationunless the contrary is indicated. Any reference to any provision of anylegislation shall include any amendment, modification, re-enactment or extension thereof. Words importing the singular shall include the plural and vice versa, and wordsimporting the masculine gender shall include the feminine or neutral gender. For the purposes of this Announcement, "subsidiary", "subsidiary undertaking","undertaking" and "associated undertaking" have the respective meanings underthe Companies Act (but for these purposes ignoring paragraph 20(1)(b) ofSchedule 4A to the Companies Act). This information is provided by RNS The company news service from the London Stock Exchange