Urs Corporation Recommended Increased Cash Offer For Scott Wilson

30th Jun 2010 17:24

TIDMSWG RNS Number : 5850O URS Corporation 30 June 2010 ? NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART IN OR INTO THE UNITED STATES OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF THAT JURISDICTION 30 June 2010 Recommended Increased Cash Offer for Scott Wilson Group plc by Universe Bidco Limited a wholly owned subsidiary of URS Corporation (to be implemented by way of a Scheme of Arrangement under Part 26 of the Companies Act 2006) The boards of directors of Scott Wilson Group plc ("Scott Wilson") and URS Corporation ("URS") are pleased to announce that they have reached agreement on the terms of a recommended increased cash offer (the "Increased Offer") to be made by Universe Bidco Limited, for the entire issued and to be issued share capital of Scott Wilson. It is anticipated that the Increased Offer will be implemented by way of a scheme of arrangement. Under the terms of the Increased Offer, Scheme Shareholders will receive 290 pence in cash for each Scott Wilson Share, valuing the entire issued and to be issued share capital of Scott Wilson at approximately GBP223 million. An improved loan note alternative (the "Improved Loan Note Alternative") will also be made available, further details of which are set out in paragraph 2 below. The terms of the Increased Offer are otherwise as set out in the announcement by Universe Bidco on 28 June 2010 (the "Original Offer Announcement"). 1. The Increased Offer The Increased Offer is to be made by Universe Bidco Limited ("Universe Bidco"), a wholly owned subsidiary of URS. Details of the terms of the original Offer were set out in the Original Offer Announcement. Terms used but not defined in this announcement shall have the meanings given to them in the Original Offer Announcement. The Increased Offer price of 290 pence per Scott Wilson Share represents a premium of: · approximately 18 per cent. to the unrecommended offer of 245 pence per Scott Wilson Share announced by CH2M Hill Star Holdings Limited on 28 June 2010; · approximately 233 per cent. to the Closing Price of 87.0 pence per Scott Wilson Share on 4 June 2010, being the last Business Day before Scott Wilson entered into an offer period as defined by the City Code; · approximately 218 per cent. to the average Closing Price of 91.3 pence per Scott Wilson Share over the three month period ended 4 June 2010; · approximately 208 per cent. to the average Closing Price of 94.1 pence per Scott Wilson Share over the twelve month period ended 4 June 2010; and · approximately 11 per cent. to the Closing Price of 261 pence per Scott Wilson Share on 30 June 2010 being the last Business Day prior to this announcement. In addition, URS notes that the Inducement Fee Letter entered into with Scott Wilson remains in full force and effect and provides URS with certain matching rights, as more fully described in the Original Offer Announcement. Commenting on the Increased Offer, Geoff French, Chairman of Scott Wilson, said: "The board is reaffirming its recommendation of URS's Increased Offer because it believes that it represents a compelling proposition for Scott Wilson's shareholders, customers and employees. "The board of Scott Wilson considers that the Increased Offer, at a price of 290 pence per Scott Wilson Share in cash, provides a compelling opportunity for Scott Wilson Shareholders to realise a significant premium in cash, and reflects the underlying value of Scott Wilson. Commenting on the Increased Offer, Martin Koffel, Chairman and Chief Executive Officer of URS, said: "We are pleased to have reached agreement with the Scott Wilson board on an increased offer for the Company. We continue to believe that the combination of URS and Scott Wilson will create a global business with the financial resources to invest in further growth for the benefit of the enlarged group's clients and employees." 2. Improved Loan Note Alternative As an alternative to all or some of the cash consideration of 290 pence per Scott Wilson Share and subject to certain terms and conditions as will be set out in the Scheme Document, Scheme Shareholders (other than Restricted Overseas Persons) who validly accept the Increased Offer will be able to elect to receive Loan Notes issued by Universe Bidco on the following basis: for each GBP1 of cash consideration, GBP1 nominal value of Loan Notes The Loan Notes will be issued by Universe Bidco, credited as fully paid, in amounts and integral multiples of GBP1 and the balance of any entitlement that is not a whole multiple of GBP1 will be disregarded, and not issued. The Loan Notes will bear interest, payable semi-annually in arrears, at 0.25 per cent. below six months sterling LIBOR. The Loan Notes will be redeemable at par (together with accrued interest) at the option of the holders, in whole or in part, on interest payment dates falling at least six months after the date of issue. Any Loan Notes outstanding on the first interest payment date falling five years after the date of issue will be redeemed at par (together with any accrued interest) on that date. Universe Bidco reserves the right not to issue any Loan Notes if valid elections are received for less than GBP3 million nominal amount, in aggregate. Universe Bidco shall be entitled to redeem all (but not some) of the outstanding Loan Notes on not less than 30 days written notice if, at any time, the aggregate amount of the Loan Notes outstanding is less than GBP1.5 million, provided that all of the Loan Notes so redeemed have been in issue for more than six months. The maximum nominal amount of the Loan Notes shall be GBP30 million, in aggregate. In the event that Loan Note elections are received in excess of such nominal amount, Universe Bidco shall scale back allocations of the Loan Notes pro rata (rounding down any fractions to the nearest whole number) and any election will only be valid in respect of the scaled back number of Scheme Shares. The obligations of Universe Bidco under the Loan Notes will be backed by either a guarantee from URS or cash collateralisation by way of a cash escrow account. Further details of the Improved Loan Note Alternative will be set out in the Scheme Document. Universe Bidco may purchase any Loan Notes which have been in issue for more than six months at a price by tender available to all holders of Loan Notes alike, or otherwise by agreement with any holders of Loan Notes. Universe Bidco has not registered and does not intend to register any of the Loan Notes under the Securities Act. The Loan Notes will not be offered or sold to the public in the United States and Restricted Overseas Persons will not be able to elect for the Loan Note Alternative. The Loan Notes may not be offered, sold, resold, delivered or otherwise transferred in the United States absent registration under the Securities Act or an exemption therefrom. 3. Recommendation The directors of Scott Wilson, who have been so advised by Greenhill and Brewin Dolphin, consider the terms of the Increased Offer to be fair and reasonable. In providing their advice to the directors of Scott Wilson, Greenhill and Brewin Dolphin have each taken into account the commercial assessments of the directors of Scott Wilson. Accordingly, the directors of Scott Wilson intend unanimously to recommend that Scott Wilson Shareholders vote in favour of the Scheme and the resolutions to be proposed at the Court Meeting and the General Meeting, as those directors that hold Scott Wilson Shares have irrevocably undertaken to do in respect of their entire beneficial holdings of Scott Wilson Shares (representing approximately 2.04 per cent. of the existing issued share capital of Scott Wilson). 4. Irrevocable undertakings URS has received irrevocable undertakings from all of the directors of Scott Wilson who hold Scott Wilson Shares in respect of their entire beneficial holdings of Scott Wilson Shares and those of their family members (amounting to, in aggregate, 1,499,281 Scott Wilson Shares, representing approximately 2.04 per cent. of the existing issued share capital of Scott Wilson): · to vote in favour of the Scheme and the resolutions to be proposed at the Court Meeting and the General Meeting; and · if the Increased Offer is subsequently structured as a Takeover Offer, to accept any Takeover Offer made by URS. The irrevocable undertakings shall each lapse, amongst other things, if: · URS announces that it does not intend to proceed with the Scheme or make a Takeover Offer (as applicable) and no new, revised or replacement Scheme or Takeover Offer is announced in accordance with Rule 2.5 of the City Code at the same time; or · the Scheme or Takeover Offer lapses or is withdrawn and no new, revised or replacement Scheme or Takeover Offer has been announced, in accordance with Rule 2.5 of the City Code, in its place or is announced, in accordance with Rule 2.5 of the City Code, at the same time. 5. Financing the Increased Offer URS will finance the Increased Offer from its existing cash resources. As required by the City Code, DC Advisory Partners, as financial adviser to URS, confirms that it is satisfied that sufficient financial resources are available to Universe Bidco to enable it to satisfy in full the cash consideration payable under the Increased Offer. (MORE TO FOLLOW) Dow Jones Newswires June 30, 2010 12:24 ET (16:24 GMT)