Travis Perkins Plc Recommended Cash And Shares -9-

5th Jul 2010 07:00

Perkins Shares on or before the Record Date, the BSS Shareholders will, to the extent they are taking New Travis Perkins Shares, receive an amount equal to the Interim Dividend they would have received had the Effective Date occurred and the New Travis Perkins Shares been issued on or before the Record Date. Such amount shall be paid by BSS by way of interim dividend immediately prior to the Effective Date (provided if the Acquisition is switched from a Scheme to an Offer, a payment equal to the Interim Dividend will be made by Travis Perkins to the BSS Shareholders, to the extent they are taking New Travis Perkins Shares, as additional consideration instead). However, any such payment, whether pursuant to a Scheme or Offer, shall only be made if the delay to the Acquisition would not have occurred but for either: (a) a delay in satisfying the Regulatory Condition (other than where due to BSS not complying with its obligations under the Implementation Agreement); or (b) a breach of the Implementation Agreement by Travis Perkins or an act or omission of Travis Perkins with the sole or dominant motive of avoiding making payment to BSS Shareholders of the Interim Dividend. +-----+-----------------------------------------------------------+ | 17. | Management and employees of BSS | +-----+-----------------------------------------------------------+ Travis Perkins attaches great importance to the skills and experience of the existing management and employees of BSS. Travis Perkins believes that the Enlarged Group's prospects for growth should lead to increased employment opportunities. The Travis Perkins Board has also given assurances to the BSS Board that, following the Acquisition becoming Effective, the existing contractual employment rights, including pension rights, of all employees of the BSS Group will be fully safeguarded. +-----+-----------------------------------------------------------+ | 18. | Disclosure of interests in BSS | +-----+-----------------------------------------------------------+ Save for the arrangements with BSS Shareholders in relation to irrevocable undertakings summarised in paragraph 6 above and save for the shares owned by Paul Hampden Smith and his wife referred to below, as at the close of business on 2 July 2010, being the latest practicable date prior to the date of this announcement, neither Travis Perkins nor any Travis Perkins Director nor, so far as Travis Perkins is aware, any person acting in concert with Travis Perkins, owns or controls any BSS Shares or any securities convertible or exchangeable into, or any rights to subscribe for or purchase, or any options (including traded options) to purchase or any short positions (whether conditional or absolute and whether in the money or otherwise and including under a derivative), agreement to sell, delivery obligation or right to require another person to take delivery of or any derivatives referenced to BSS Shares nor does any such person have any arrangement in relation to BSS Shares. For these purposes, "arrangement" includes any indemnity or option arrangement, any agreement or understanding, formal or informal, of whatever nature, relating to BSS Shares which may be an inducement to deal or refrain from dealing in such BSS Shares. Travis Perkins made its Opening Position Disclosure on 11 June 2010; in so doing, Travis Perkins inadvertently did not disclose the beneficial ownership of Paul Hampden Smith (a Travis Perkins Director) and his wife in 6,270 BSS Shares (representing 0.00300 per cent. of BBS's issued share capital). +-----+-----------------------------------------------------------+ | 19. | BSS Share Schemes | +-----+-----------------------------------------------------------+ The Acquisition will, as described in paragraph 2 above, extend to all BSS Shares issued upon the exercise of the options and/or the vesting of awards under the BSS Share Schemes before the Scheme becomes Effective. Appropriate proposals will be made in due course to participants in the BSS Share Schemes. +-----+-----------------------------------------------------------+ | 20. | Regulatory Clearance | +-----+-----------------------------------------------------------+ It is anticipated that the Acquisition will be reviewed by the Office of Fair Trading, under the merger control provisions of the Enterprise Act 2002. Travis Perkins believes that there should be no material competition issues and that the Acquisition will be approved at the end of a first phase review process. +-----+-----------------------------------------------------------+ | 21. | BSS Pensions | +-----+-----------------------------------------------------------+ The BSS Group operates three defined benefit pension schemes all of which were closed to new entrants (as detailed below). At 31 March 2010, the aggregate gross deficit of the BSS Schemes on an IAS19 basis was GBP26.2 million (31 March 2009: gross deficit GBP30.9 million). The net deficit after allowing for deferred tax was GBP18.8 million (2009: net deficit GBP22.2 million). The most recent actuarial valuations in respect of each of the BSS Schemes showed: +----+-----------------------------------------------------------+ | * | in respect of the BSS Group Scheme (closed to new members | | | as of 1 March 2002), as at February 2010, a gross deficit | | | on an ongoing basis of GBP20.6 million. As a result, BSS | | | agreed to make annual additional contributions to the BSS | | | Group Scheme of GBP3.15 million per annum, increasing by | | | GBP150,000 per annum until April 2016, then reducing to | | | GBP2.6m in April 2017, GBP2.7m in April 2018 and a final | | | payment of GBP1.3m is payable in the year to April 2019; | +----+-----------------------------------------------------------+ | | | +----+-----------------------------------------------------------+ | * | in respect of the Tricom Scheme (closed to new members as | | | regards defined benefits entitlements as of 6 October | | | 2001), as at 5 April 2008 a deficit on an ongoing basis | | | of GBP353,000 and a recovery plan was put in place to | | | close this over a six year period with contributions of | | | GBP71,400 per annum; and | +----+-----------------------------------------------------------+ | | | +----+-----------------------------------------------------------+ | * | in respect of the BSS Ireland Scheme (closed to new | | | members as of 1 December 2003), as at 30 June 2007 the | | | value of the assets of the BSS Ireland Scheme on a | | | winding up basis was EUR7.9 million. No subsequent full | | | actuarial valuation has been prepared, but a provisional | | | valuation as at 1 July 2009 estimated an indicative | | | deficit of EUR3.1 million. | +----+-----------------------------------------------------------+ +-----+-----------------------------------------------------------+ | 22. | Settlement, listing and dealing of New Travis Perkins | | | Shares | +-----+-----------------------------------------------------------+ It is intended that applications will be made to the UKLA and to the London Stock Exchange for the New Travis Perkins Shares to be issued in connection with the Acquisition to be admitted to the Official List and to trading on the London Stock Exchange's main market for listed securities. It is expected that admission of the New Travis Perkins Shares to the Official List and to trading on the London Stock Exchange's main market for listed securities will become effective, and that dealings for normal settlement in the New Travis Perkins Shares will commence, on the date on which the Scheme becomes Effective. The existing Travis Perkins Shares are already admitted to CREST. It is expected that all of the New Travis Perkins Shares, when issued and fully paid, will be capable of being held and transferred by means of CREST. It is expected that the New Travis Perkins Shares will trade under ISIN GB0007739609. Further details on listing, dealing and settlement will be included in the Scheme Document. +-----+-----------------------------------------------------------+ | 23. | Implementation of the Scheme and cancellation of listing | +-----+-----------------------------------------------------------+ It is currently intended that the Acquisition will be effected by means of a scheme of arrangement of BSS under Part 26 of the Companies Act 2006. The procedure involves an application by BSS to the Court to sanction the Scheme and confirm the Capital Reduction. In consideration for the cancellation of their BSS Shares, BSS Shareholders, who are Scheme Shareholders, will receive cash and/or Loan Notes and/or New Travis Perkins Shares as outlined in paragraph 2 above. Following the implementation of the Scheme, BSS will become a private limited, wholly-owned subsidiary of Travis Perkins. Travis Perkins and BSS have agreed that Travis Perkins may, if it so determines in its absolute discretion (subject to the consent of the Panel), implement the Acquisition by making an Offer for the entire issued and to be issued ordinary share capital of BSS. The BSS Directors have confirmed that, in the event that (MORE TO FOLLOW) Dow Jones Newswires July 05, 2010 02:00 ET (06:00 GMT)