Last checked at 19 Jun 2008 10:22
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN
FOR IMMEDIATE RELEASE
FLOMERICS GROUP PLC
("Flomerics" or "the Company")
The Mentor Graphics Corporation ("Mentor") response to the Cadence Design Systems Inc. ("Cadence") unsolicited proposal to buy Mentor
The Board of Flomerics notes with interest the recent rejection by the Board of Mentor of Cadence's unsolicited proposal to buy Mentor.
The Cadence proposal values Mentor at approximately 1.8 x historic revenue. Mentor has announced that it has reviewed the takeover proposal from Cadence and concluded that the proposed price is "insufficient to support a transaction". The Board of Flomerics would like to reiterate to Flomerics' shareholders its own rejection of Mentor's unsolicited offer for Flomerics for the same key reason, noting with interest that Mentor is only valuing Flomerics at approximately 1.2 x historic revenue.
Enquiries:
| Flomerics Group PLC Gary Carter Keith Butcher | Tel: 020 8487 3000 |
| Jefferies International Limited (Financial adviser to Flomerics) Andres Pieczanski Sarah McNicholas | Tel: 020 7029 8000 |
| Oriel Securities Limited (Nominated Adviser and Corporate Broker to Flomerics) Andrew Edwards Michael Shaw | Tel: 020 7710 7600 |
| Citigate Dewe Rogerson Ginny Pulbrook Seb Hoyle | Tel: 020 7638 9571 |
Jefferies International Limited, which is authorised and regulated in the UK by The Financial Services Authority, is acting exclusively for Flomerics and no one else in connection with the offer by Mentor for Flomerics ("Mentor Offer") and, accordingly, will not be responsible to anyone other than Flomerics for providing the protections afforded to customers of Jefferies International Limited or for providing advice in relation to the Mentor Offer or in relation to the contents of this document or any transaction or arrangement or other matter referred to herein.
Oriel Securities Limited ('Oriel Securities'), which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting for Flomerics and no-one else in connection with the matters referred to herein and will not be responsible to anyone other than Flomerics for providing the protections afforded to clients of Oriel Securities or for giving advice in relation to such matters.
The Flomerics Directors, whose names are set out below, accept responsibility for the information contained in this document, save that the only responsibility accepted by them in respect of the information relating to Mentor (which has been compiled from public sources) is to ensure that such information has been correctly and fairly reproduced and presented. Subject as aforesaid, to the best of the knowledge and belief of the Flomerics Directors (who have taken all reasonable care to ensure that such is the case), the information in this document 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 Flomerics Directors are David W Mann (Non Executive Chairman), Gary C Carter (Chief Executive), Keith Butcher (Finance Director), Thomas R Rowbotham (Non Executive Director) and Peter R Teague (Non Executive Director).
If you are in any doubt as to the action you should take in connection with the Mentor Offer, you are recommended to seek your own independent financial advice immediately from your stockbroker, bank manager, solicitor, accountant or other independent financial adviser duly authorised under the Financial Services and Markets Act 2000, if you are in the United Kingdom, or, if not, from another appropriately authorised independent financial adviser.
Dealing Disclosure Requirements
Under the provisions of Rule 8.3 of the Takeover Code (the 'Code'), if any person is, or becomes, 'interested' (directly or indirectly) in 1% or more of any class of 'relevant securities' of Flomerics, 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 3.30 pm (London time) on the London business day following the date of the relevant transaction. This requirement will continue until the date on which the Mentor Offer becomes, or is declared, unconditional as to acceptances, lapses or is otherwise withdrawn or on which the 'offer period' otherwise ends. If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire an 'interest' in 'relevant securities' of Flomerics, they will be deemed to be a single person for the purpose of Rule 8.3.
Under the provisions of Rule 8.1 of the Code, all 'dealings' in 'relevant securities' of Flomerics by a potential offeror or by Flomerics, 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.
Sources:
The enterprise value/revenue multiple used to value Flomerics is calculated in the manner set out in Appendix 3 to the Flomerics defence document in relation to the Mentor Offer dated 27 May 2008.
The enterprise value/revenue multiple used to value Mentor is calculated as follows: Enterprise value is approximately $1.6 billion on a fully diluted basis taking into account net debt of $69 million, as set out in the Cadence press release dated 17 June 2008. Mentor's enterprise value divided by the reported revenue figure for the fiscal year ended 31 January 2008 ($880 million) yields an enterprise value/revenue multiple of approximately 1.8x.
Note to Editors
Flomerics (www.flomerics.com) is a world-leading developer of engineering simulation software and services for analysis of fluid flow, heat transfer. Flomerics' business model is drastically different from traditional analysis because its software is designed to be embedded deeply into the design process and used by mainstream design engineers, not just by analysis specialists.