Bss Group Plc Recommended Cash And Shares -8-

5th Jul 2010 07:00

subject of a unanimous and unqualified recommendation by the BSS Board to the BSS Shareholders. Termination Rights The Implementation Agreement terminates in certain circumstances, including: (i) if the Scheme lapses, terminates or is withdrawn unless Travis Perkins has elected to implement the Acquisition by way of an Offer before such lapse, termination or withdrawal (save where (ii) or (iii) applies); (ii) if the Scheme is not approved by the requisite majority of the BSS Shareholders at the Scheme Meeting or the resolution in connection with the Scheme are not passed by the requisite majority at the BSS General Meeting and Travis Perkins has not elected within five Business Days of the date of the relevant Meeting, to implement the Acquisition by means of the Offer; (iii) if the Scheme is not sanctioned at the Scheme Court Hearing or the Capital Reduction is not confirmed by the Court at the Capital Reduction Hearing and Travis Perkins has not elected within five Business Days of the date of the relevant Court Hearing to implement the Acquisition by means of the Offer; (iv) by written notice from either party following the failure of any of the Conditions to be satisfied; (v) by written notice from BSS to Travis Perkins if the Travis Perkins Board Recommendation referred to in this announcement or contained in the Combined Circular and Prospectus is no longer unanimous and unqualified or is withdrawn, qualified or modified adversely at any time prior to the Travis Perkins General Meeting; (vi) by written notice from Travis Perkins to BSS if the BSS Board Recommendation is withdrawn, qualified or modified adversely at any time prior to the Effective Date; (vii) if the Effective Date has not occurred by the Long Stop Date; or (viii) by written notice from either party if a break fee becomes payable. +-----+-----------------------------------------------------------+ | 11. | Terms of the Mix and Match Facility | +-----+-----------------------------------------------------------+ BSS Shareholders (other than certain Overseas Persons) will be entitled to elect, subject to availability, to vary the proportions in which they receive New Travis Perkins Shares and cash in respect of their holdings of BSS Shares. However, the total number of New Travis Perkins Shares to be issued and the maximum aggregate amount of cash to be paid under the Scheme will not be varied as a result of elections under the Mix and Match Facility. Accordingly, elections made by BSS Shareholders under the Mix and Match Facility will only be satisfied to the extent that other BSS Shareholders make off-setting elections. Satisfaction of elections under the Mix and Match Facility will be effected on the basis of the price of a Travis Perkins Share at the time the Scheme Document is despatched and will be confirmed in that document. To the extent that elections cannot be satisfied in full, they will be scaled down on a pro rata basis. As a result, BSS Shareholders who make an election under the Mix and Match Facility will not know the exact number of New Travis Perkins Shares or the amount of cash they will receive until settlement of the consideration due to them in respect of the Acquisition. The Mix and Match Facility is conditional upon the Acquisition becoming Effective and further details on the Mix and Match Facility will be included in the Scheme Document. +-----+-----------------------------------------------------------+ | 12. | The Loan Note Alternative | +-----+-----------------------------------------------------------+ A Loan Note Alternative will be made available to BSS Shareholders (other than certain Overseas Persons and Scheme Shareholders in the United States) enabling them to take Loan Notes instead of all or part of the cash to which they would otherwise be entitled, including cash entitlements under the Mix and Match Facility. The Loan Note Alternative will be made available on the basis of GBP1 nominal value of Loan Notes for every GBP1 of cash which a BSS Shareholder would otherwise be entitled to receive under the Acquisition. The Loan Notes will be governed by English law and will be issued, credited as fully paid, in integral multiples of GBP1 nominal value. All fractional entitlements to the Loan Notes will be disregarded and will not be issued. The Loan Notes will not be transferable other than to relatives and family trusts and no application will be made for them to be listed or dealt in on any stock exchange. The Loan Notes will not be qualifying corporate bonds. The Loan Notes will bear interest from the date of issue to the relevant holder of the Loan Notes at a rate per annum of 50 basis points below six months sterling LIBOR, subject to the rate payable on the Loan Notes always being not less than nil. Interest will be payable by half-yearly instalments in arrears (less any tax required by law to be withheld or deducted therefrom) on 31 March and 30 September in each year from 2011 onwards (or, if such date is not a Business Day, on the first Business Day thereafter). The Loan Notes will be redeemable at par (together with accrued interest less any tax required by law to be withheld or deducted therefrom) in whole or in part, for cash at the option of the noteholders on 31 March 2011 and subsequently semi-annually on 31 March and 30 September in each year (or, if such date is not a Business Day, on the first Business Day thereafter). In certain circumstances, Travis Perkins will have the right to redeem all of the Loan Notes. If not previously redeemed, the final redemption date will be 30 September 2015. No Loan Notes will be issued unless, on or before the Reorganisation Record Time, valid elections have been received in respect of at least GBP4 million in nominal value of Loan Notes. If insufficient elections are received, BSS Shareholders electing for the Loan Note Alternative will instead receive cash in accordance with the terms of the Acquisition. If at any time after 31 March 2011, the outstanding nominal amount of Loan Notes equals or is less than 25 per cent. of the total amount of Loan Notes issued, Travis Perkins will be entitled to redeem all of the then outstanding Loan Notes. The Loan Note Alternative will be conditional upon the Acquisition becoming Effective. Full details of the Loan Note Alternative will be contained in the Scheme Document and the appropriate form of election. The Loan Notes are not being offered to Overseas Persons. +-----+-----------------------------------------------------------+ | 13. | Financial effects of the Acquisition | +-----+-----------------------------------------------------------+ Travis Perkins is confident that the Acquisition will produce attractive returns for shareholders in excess of Travis Perkins' cost of capital in the first full year of ownership. Furthermore, Travis Perkins believes that the Acquisition will deliver materially enhanced earnings in 2011, the first full year after completion of the Acquisition (see Note 9, Appendix II). +-----+-----------------------------------------------------------+ | 14. | Financing | +-----+-----------------------------------------------------------+ The cash consideration payable to BSS Shareholders pursuant to the Acquisition will be provided by Travis Perkins from its debt facility provided by its existing relationship banks. HSBC and Nomura are satisfied that sufficient resources are available to Travis Perkins to satisfy in full the cash consideration payable pursuant to the Acquisition. Further information on the financing of the Acquisition will be set out in the Scheme Document. +-----+-----------------------------------------------------------+ | 15. | Dividend policy | +-----+-----------------------------------------------------------+ As announced in Travis Perkins' interim management statement on 2 July 2010, given Travis Perkins' trading performance in the first half it now anticipates recommencing the payment of dividends although initially it will be basing this off a conservative level of cover. In the absence of unforeseen circumstances Travis Perkins expects to declare an interim dividend of 5 pence per share when it announces its interim results for the six months to 30 June 2010 on 29 July 2010. Travis Perkins' objective is to grow the dividend ahead of earnings to reduce the current level of cover over the medium term. +-----+-----------------------------------------------------------+ | 16. | The New Travis Perkins Shares | +-----+-----------------------------------------------------------+ The New Travis Perkins Shares to be issued pursuant to the Acquisition will be ordinary shares of 10 pence each in the capital of Travis Perkins. The New Travis Perkins Shares will be issued in registered form, will be capable of being held in both certificated and uncertificated form, will be issued credited as fully paid and will rank pari passu in all respects with the existing Travis Perkins Shares. BSS Shareholders will, to the extent taking New Travis Perkins Shares, be entitled to receive the Interim Dividend if it is paid to the holders of Travis Perkins Shares generally and if the Effective Date occurs and the BSS Shareholders have been issued New Travis Perkins Shares on or before the Record Date. If the Acquisition is being made by way of Scheme and if the Effective Date has not occurred and the BSS Shareholders have not been issued New Travis (MORE TO FOLLOW) Dow Jones Newswires July 05, 2010 02:00 ET (06:00 GMT)