TIDMBAB TIDMVTG
RNS Number : 9995I
Babcock International Group PLC
23 March 2010
THIS ANNOUNCEMENT IS AN ADVERTISEMENT AND NOT A PROSPECTUS AND INVESTORS SHOULD
NOT SUBSCRIBE FOR ANY BABCOCK INTERNATIONAL GROUP PLC SHARES EXCEPT ON THE BASIS
OF INFORMATION IN THE PROSPECTUS WHICH IS PROPOSED TO BE PUBLISHED BY BABCOCK
INTERNATIONAL GROUP PLC IN DUE COURSE
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN OR INTO
ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT
LAWS OF THAT JURISDICTION
For immediate release
23 March 2010
Babcock International Group PLC
Recommended Acquisition of
VT Group plc
Summary
· The boards of Babcock International Group PLC ("Babcock") and VT Group plc
("VT") are pleased to announce that they have reached agreement on the terms of
the recommended acquisition by Babcock of all of the issued and to be issued
share capital of VT (the "Acquisition").
· As set out below, the terms of the Acquisition value each VT Share at 750
pence based on the undisturbed Babcock share price and 734.9 pence based on the
latest Babcock Closing Price. On the basis of Babcock's latest Closing Price,
the terms of the Acquisition value the existing share capital of VT at
approximately GBP1,326 million.
· Under the terms of the Acquisition, VT Shareholders will receive:
+--------------------+---------------------------------------+
| for each VT Share: | 361.6 pence in cash; and |
+--------------------+---------------------------------------+
| | 0.701 New Babcock Shares. |
+--------------------+---------------------------------------+
· The consideration under the terms of the Acquisition represents a value
of:
o 750 pence per VT Share, based on the undisturbed Closing Price of 554 pence
per Babcock Share on 12 February 2010 (being the last Business Day prior to the
announcement by Babcock of a possible offer for VT), representing a premium of
approximately 42 per cent. to the average Closing Price of 527 pence per VT
Share for the one month trading period to 12 February 2010;
o 734.9 pence per VT Share, based on the latest Closing Price of 532.5 pence
per Babcock Share on 22 March 2010 (being the last Business Day prior to the
date of this announcement), representing a premium of approximately 39 per
cent. to the average Closing Price of 527 pence per VT Share for the one month
trading period to 12 February 2010 (being the last Business Day prior to the
announcement by Babcock of a possible offer for VT); and
o 734.9 pence per VT Share, based on the latest Closing Price of 532.5 pence
per Babcock Share on 22 March 2010 (being the last Business Day prior to the
date of this announcement), representing a premium of approximately 45 per cent.
to VT's Closing Price of 508 pence on 12 February 2010 (being the last Business
Day prior to the announcement by Babcock of a possible offer for VT).
· Under the terms of the Acquisition, VT Shareholders will not receive any
VT final dividend in respect of the financial year ending 31 March 2010. The
Consideration Shares to be issued pursuant to the Acquisition will not carry any
entitlement to any final dividend or second interim dividend of Babcock
declared, made or paid in respect of the financial year ending 31 March 2010.
· The Acquisition will include a Mix and Match Facility, so that VT
Shareholders will be able to elect to vary the proportions of cash and shares
they receive, subject to equal and opposite elections made by other VT
Shareholders. The Mix and Match Facility will not change the total number of
shares to be issued by Babcock pursuant to the Acquisition.
· Following completion of the Acquisition, VT Shareholders will own
approximately 36 per cent. of the Combined Group and will participate in the
future growth prospects of the Combined Group.
· The Babcock Board believes that the Acquisition will bring together two
groups with complementary operating models, customers and core competencies and
has a compelling strategic rationale as well as financial logic.
· The Acquisition is expected to be earnings enhancing for Babcock in the
first full financial year following the Effective Date, including through the
realisation of anticipated merger benefits of approximately GBP50 million per
annum (pre-tax) and financial efficiencies of a further GBP8 million per annum
(post-tax).
· Babcock believes that the Combined Group will:
o be better placed to deliver a broader range of solutions to existing
customers through an enhanced range of capabilities and expertise;
o have increased importance and relevance to key customers, allowing an ability
to work in partnership to provide enhanced solutions, identify and address
customer needs and leaving the Combined Group better positioned to deliver
increased services and efficiencies;
1 These amounts include the previously announced anticipated merger benefits of
approximately GBP27 million per annum (pre-tax), and the further benefit of
approximately GBP6 million per annum expected to come from a reduction in the
effective corporation tax rate of the Combined Group, each as previously
announced by Babcock on 15 February 2010. Nothing in this announcement should be
interpreted to mean that the future earnings per share of Babcock will
necessarily match or exceed the historical earnings per share of Babcock or VT.
o be better able to satisfy growing customer requirements for large and complex
contracts and to increase work share;
o build on an excellent reputation and track record of delivery to sell
complementary capabilities in overseas markets where the Combined Group has an
established presence;
o possess increased scale, a stronger customer proposition and enhanced
business opportunities across the Defence, Nuclear, Critical Infrastructure and
International operations, in particular:
* a broad and deep capability in relation to the UK Air, Land and Sea defence
markets across four main support areas: infrastructure, equipment support,
training and communications;
* a strong nuclear business with significant consultancy positions along with
presence at tiers one, two and three and with approximately 3,000 employees
servicing defence and civil nuclear sectors; and
* a broader offering in Critical Infrastructure with an opportunity to develop
and deliver training and education solutions to civil customers, as well as an
enhanced communications offering;
o be a highly cash generative business and have a strong balance sheet with
access to a deeper pool of capital markets;
o have combined pro forma revenues of approximately GBP3 billion; and
o have excellent visibility and security of revenue as a result of a combined
order book of approximately GBP10 billion supported by long-term contracts.
· The VT Directors, who have been so advised by Rothschild, consider the
terms of the Acquisition to be fair and reasonable. In providing advice to the
VT Directors, Rothschild has taken into account the VT Directors' commercial
assessment of the Acquisition. The VT Directors intend to recommend unanimously
that VT Shareholders vote in favour of the resolutions to be proposed at the VT
General Meeting and the Scheme Meeting, as the VT Directors have irrevocably
undertaken to do in respect of their own beneficial holdings of 436,148 VT
Shares in aggregate, representing approximately 0.2 per cent. of the issued
ordinary share capital of VT.
· The Babcock Directors, who have received financial advice from J.P. Morgan
Cazenove and Evercore Partners, consider the terms of the Acquisition to be fair
and reasonable. In providing advice to the Babcock Directors, J.P. Morgan
Cazenove and Evercore Partners have relied upon the Babcock Directors'
commercial assessment of the Acquisition. The Babcock Directors intend to
recommend unanimously that Babcock Shareholders vote in favour of the
resolutions to approve and implement the Acquisition, as the Babcock Directors
intend to do in respect of their own beneficial holdings of 1,040,171 Babcock
Shares in aggregate, representing approximately 0.5 per cent. of the issued
ordinary share capital of Babcock.
· It is intended that the Acquisition will be effected by way of a
Court-sanctioned scheme of arrangement under Part 26 of the 2006 Act. It is
expected that a Scheme Document, Prospectus and Babcock Circular will be
published as soon as practicable and that, subject to the satisfaction, or where
relevant waiver, of all relevant conditions, the Scheme is expected to become
Effective, and the Acquisition completed, by the end of July 2010.
Commenting on the Acquisition, Mike Turner, Chairman of Babcock said:
"We are delighted to have reached agreement with the board of VT to recommend
our compelling offer for the company. The acquisition of such a high quality and
complementary business is in line with our strategy to be the leading
engineering support services company in the UK. We look forward to bringing the
enhanced capabilities of the enlarged Babcock to new and existing customers".
Commenting on the Acquisition, Mike Jeffries, Chairman of VT said:
"The VT Board believes that Babcock's offer represents an attractive proposition
for VT Shareholders both through the immediate offer premium and through the
opportunity to benefit from the synergies available from combining our two
businesses".
Babcock is hosting an analyst presentation today at 9.00 a.m. at 20 Moorgate,
London EC2R 6DA. The analyst presentation will be available on Babcock's
corporate website at www.babcock.co.uk.
This summary should be read in conjunction with the main body of the following
announcement and Appendices.
Enquiries
+--------------------------------+------------------------------+
| Babcock International Group PLC |
+---------------------------------------------------------------+
| Peter Rogers, Chief Executive | Tel: +44 (0)20 7355 5300 |
+--------------------------------+------------------------------+
| Bill Tame, Group Finance | |
| Director | |
+--------------------------------+------------------------------+
| Franco Martinelli, Group | |
| Financial Controller | |
+--------------------------------+------------------------------+
| J.P. Morgan Cazenove (joint financial adviser and corporate |
| broker to Babcock) |
+---------------------------------------------------------------+
| Andrew Truscott | Tel: +44 (0)20 7588 2828 |
+--------------------------------+------------------------------+
| Malcolm Moir | |
+--------------------------------+------------------------------+
| Guy Marks | |
+--------------------------------+------------------------------+
| Christopher Dickinson | |
+--------------------------------+------------------------------+
| Evercore Partners (joint financial adviser to Babcock) |
+---------------------------------------------------------------+
| Bernard Taylor | Tel: +44 (0)20 7268 2700 |
+--------------------------------+------------------------------+
| Julian Oakley | |
+--------------------------------+------------------------------+
| Financial Dynamics (PR adviser to Babcock) |
+---------------------------------------------------------------+
| Andrew Lorenz | Tel: +44 (0)20 7269 7291 |
+--------------------------------+------------------------------+
| Richard Mountain | |
+--------------------------------+------------------------------+
| VT Group plc | |
+--------------------------------+------------------------------+
| Paul Lester | Tel: +44 (0)23 8083 9001 |
+--------------------------------+------------------------------+
| Philip Harrison | |
+--------------------------------+------------------------------+
| Rothschild (financial adviser to VT) |
+---------------------------------------------------------------+
| Robert Leitão | Tel: +44 (0)20 7280 5000 |
+--------------------------------+------------------------------+
| Ravi Gupta | |
+--------------------------------+------------------------------+
| Merrill Lynch (corporate broker to VT) |
+---------------------------------------------------------------+
| Mark Astaire | Tel: +44 (0)20 7628 1000 |
+--------------------------------+------------------------------+
| Peter Brown | |
+--------------------------------+------------------------------+
| Citigate Dewe Rogerson (PR adviser to VT) |
+---------------------------------------------------------------+
| Ginny Pulbrook | Tel: +44 (0)20 7638 9571 |
+--------------------------------+------------------------------+
| Patrick Donovan | |
+--------------------------------+------------------------------+
The conditions to, and certain further terms of, the Acquisition are set
out in Appendix 1. The bases and sources of certain financial information
contained in the following announcement, and certain additional financial and
operational information, are set out in Appendix 2. Details of the irrevocable
undertakings received by Babcock in relation to the Acquisition are set out in
Appendix 3. Certain definitions and terms used in the following announcement are
set out in Appendix 4.
J.P. Morgan plc, which conducts its UK investment banking businesses as J.P.
Morgan Cazenove and is authorised and regulated in the United Kingdom by the
FSA, is acting as financial adviser to Babcock and no-one else in connection
with the contents of this announcement and will not be responsible to any person
other than Babcock for providing the protections afforded to customers of J.P.
Morgan plc nor for providing advice in relation to any matter referred to
herein.
Evercore Partners Limited is authorised and regulated in the United Kingdom by
the FSA, is acting as financial adviser to Babcock and for no-one else in
connection with the matters set out in this announcement and will not be
responsible to anyone other than Babcock for providing the protections afforded
to clients of Evercore Partners Limited nor for providing advice in relation to
any matter referred to herein.
Rothschild and Merrill Lynch are authorised and regulated in the United Kingdom
by the FSA, are acting for VT and for no one else in connection with the matters
set out in this announcement and will not be responsible to anyone other than VT
for providing the protections afforded to clients of Rothschild and Merrill
Lynch nor for providing advice in relation to any matter referred to herein.
The release, publication or distribution of this announcement in jurisdictions
other than the United Kingdom may be restricted by law and therefore any persons
who are subject to the laws of any jurisdiction other than the United Kingdom
should inform themselves about, and observe, any applicable requirements. This
announcement has been prepared for the purposes of complying with English law
and the Takeover Code and the information disclosed may not be the same as that
which would have been disclosed if this announcement had been prepared in
accordance with the laws and regulations of any jurisdiction outside of England.
This announcement is not intended to, and does not constitute, or form part of,
an offer to sell or an invitation to purchase or subscribe for any securities or
a solicitation of any vote or approval in any jurisdiction. This announcement
does not constitute a prospectus or a prospectus equivalent document.
Shareholders of Babcock and VT are advised to read carefully the formal
documentation in relation to the Acquisition once it has been despatched. The
proposals of the Acquisition will be made solely through the Scheme Document,
which will contain the full terms and conditions of the Scheme, including
details of how to vote with respect to the Scheme. Any response to the proposals
should be made only on the basis of the information in the Scheme Document.
Overseas jurisdictions
This announcement is not an offer of, or solicitation of an offer to purchase,
securities in the United States and the New Babcock Shares, which will be issued
in connection with the Acquisition, have not been, and will not be, registered
under the US Securities Act or under the securities law of any state, district
or other jurisdiction of the United States, Australia, Canada or Japan and no
regulatory clearance in respect of the New Babcock Shares has been, or will be,
applied for in any jurisdiction other than the UK.
The New Babcock Shares may not be offered, sold, or, delivered, directly or
indirectly, in, into or from the United States absent registration under the US
Securities Act or an exemption from registration. It is expected that the New
Babcock Shares to be issued in the Scheme will be issued in reliance upon the
exemption from the registration requirements of the US Securities Act provided
by Section 3(a)(10) thereof. Under applicable US securities laws, persons
(whether or not US persons) who are or will be "affiliates" (within the meaning
of the US Securities Act) of Babcock or VT prior to, or of Babcock after, the
Effective Date will be subject to certain transfer restrictions relating to the
New Babcock Shares received in connection with the Scheme.
If the Acquisition is implemented by way of an Offer, it will be made in
accordance with the procedural and filing requirements of US securities laws, to
the extent applicable.
The Acquisition relates to the shares of a UK company and is proposed to be made
by means of a scheme of arrangement provided for under the laws of England and
Wales. The Acquisition is subject to the disclosure requirements and practices
applicable in the United Kingdom to schemes of arrangement, which may differ
from the disclosure and other requirements of the securities laws of
jurisdictions other than the United Kingdom. Financial information included in
the relevant documentation will have been prepared in accordance with accounting
standards applicable in the United Kingdom that may not be comparable to the
financial statements of non-U.K. companies.
The New Babcock Shares may not be offered, sold, resold, delivered or
distributed, directly or indirectly, in, into or from Canada, Australia or Japan
or to, or for the account or benefit of, any resident of Australia, Canada or
Japan absent an exemption from registration or an exemption under relevant
securities law. Copies of this announcement and any formal documentation
relating to the Acquisition are not being, and must not be, directly or
indirectly, mailed or otherwise forwarded, distributed or sent in, into or from
Canada, Australia or Japan and persons receiving such documents (including
custodians, nominees and trustees) must not mail or otherwise forward,
distribute or send it in, into or from Canada, Australia or Japan.
Forward-looking statements
Certain statements in this announcement are forward-looking statements. By their
nature, forward-looking statements involve a number of risks, uncertainties or
assumptions that could cause actual results or events to differ materially from
those expressed or implied by the forward-looking statements. These risks,
uncertainties or assumptions could adversely affect the outcome and financial
effects of the plans and events described herein. Forward-looking statements
contained in this document regarding past trends or activities should not be
taken as a representation that such trends or activities will continue in the
future. You should not place undue reliance on forward-looking statements, which
speak only as of the date of this announcement. Except as required by law,
neither of Babcock or VT is under an obligation to update or keep current the
forward-looking statements contained in this announcement or to correct any
inaccuracies which may become apparent in such forward-looking statements.
No statement in this announcement is intended as a profit forecast or profit
estimate and no statement in this announcement should be interpreted to mean
that the future earnings per share of the Combined Group, Babcock and/or VT for
current or future financial years will necessarily match or exceed the
historical or published earnings per share of Babcock or VT.
Dealing Disclosure Requirements
Under the provisions of Rule 8.3 of the Code, if any person is, or becomes,
'interested' (directly or indirectly) in 1 per cent. or more of any class of
'relevant securities' of Babcock or of VT, all 'dealings' in any 'relevant
securities' of Babcock or of VT (including by means of an option in respect of,
or a derivative referenced to, any such 'relevant securities') must be publicly
disclosed by not later than 3.30 p.m. (London time) on the London business day
following the date of the relevant transaction. This requirement will continue
until the date on which any 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 Babcock or VT, 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 Babcock or of VT by Babcock or VT 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 companies in whose 'relevant securities'
'dealings' should be disclosed, and the number of such securities in issue, can
be found on the 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.
Publication on Babcock website
A copy of this announcement will be available on Babcock's website at
(www.babcock.co.uk) by no later than 12 noon (London time) on 24March 2010.
THIS ANNOUNCEMENT IS AN ADVERTISEMENT AND NOT A PROSPECTUS AND INVESTORS SHOULD
NOT SUBSCRIBE FOR ANY BABCOCK INTERNATIONAL GROUP PLC SHARES EXCEPT ON THE BASIS
OF INFORMATION IN THE PROSPECTUS WHICH IS PROPOSED TO BE PUBLISHED BY BABCOCK
INTERNATIONAL GROUP PLC IN DUE COURSE
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN OR INTO
ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT
LAWS OF THAT JURISDICTION
For immediate release
23 March 2010
Babcock International Group PLC
Recommended Acquisition of
VT Group plc
1. Introduction
The boards of Babcock and VT are pleased to announce that they have reached
agreement on the terms of the recommended Acquisition by Babcock of all of the
issued and to be issued share capital of VT.
It is intended that the Acquisition will be effected by way of a
Court-sanctioned scheme of arrangement under Part 26 of the 2006 Act.
2. The Acquisition
The Acquisition will be on the terms and subject to the Conditions set out below
and in Appendix 1, and the full terms and conditions to be set out in the Scheme
Document.
· As set out below, the terms of the Acquisition value each VT Share at 750
pence based on the undisturbed Babcock share price and 734.9 pence based on the
latest Babcock Closing Price. On the basis of Babcock's latest Closing Price,
the terms of the Acquisition value the existing share capital of VT at
approximately GBP1,326 million.
· Under the terms of the Acquisition, VT Shareholders will receive:
+--------------------+---------------------------------------+
| for each VT Share: | 361.6 pence in cash; and |
+--------------------+---------------------------------------+
| | 0.701 New Babcock Shares. |
+--------------------+---------------------------------------+
· The consideration under the terms of the Acquisition represents a value
of:
o 750 pence per VT Share, based on the undisturbed Closing Price of 554 pence
per Babcock Share on 12 February 2010 (being the last Business Day prior to the
announcement by Babcock of a possible offer for VT), representing a premium of
approximately 42 per cent. to the average Closing Price of 527 pence per VT
Share for the one month trading period to 12 February 2010;
o 734.9 pence per VT Share, based on the latest Closing Price of 532.5 pence
per Babcock Share on 22 March 2010 (being the last Business Day prior to the
date of this announcement), representing a premium of approximately 39 per
cent. to the average Closing Price of 527 pence per VT Share for the one month
trading period to 12 February 2010 (being the last Business Day prior to the
announcement by Babcock of a possible offer for VT); and
o 734.9 pence per VT Share, based on the latest Closing Price of 532.5 pence
per Babcock Share on 22 March 2010 (being the last Business Day prior to the
date of this announcement), representing a premium of approximately 45 per cent.
to VT's Closing Price of 508 pence on 12 February 2010 (being the last Business
Day prior to the announcement by Babcock of a possible offer for VT).
Under the terms of the Acquisition, VT Shareholders will not receive any VT
final dividend in respect of the financial year ending 31 March 2010. The
Consideration Shares to be issued pursuant to the Acquisition will not carry any
entitlement to any final dividend or second interim dividend of Babcock
declared, made or paid in respect of the financial year ending 31 March 2010.
If the Scheme becomes Effective, it will result in the issue of approximately
126.5 million Consideration Shares to VT Shareholders (based on the current
number of VT Shares in issue, but excluding shares to be issued under the VT
Share Schemes), which would result in VT Shareholders holding approximately 36
per cent. of the Combined Group.
Appropriate proposals will be made in due course to participants in the VT Share
Schemes. Details of the proposals will be set out in the Scheme Document and in
separate letters to be sent to participants in the VT Share Schemes.
3. Mix and Match Facility
Under the terms of the Acquisition, VT Shareholders may elect to vary the
proportions of New Babcock Shares and cash consideration they receive in respect
of their holdings of VT Shares, via a Mix and Match Facility, subject to equal
and opposite elections made by other VT Shareholders. To the extent that
elections cannot be satisfied in full, they will be scaled down on a pro rata
basis. As a result, VT Shareholders who make an election under the Mix and Match
Facility will not know the exact number of New Babcock Shares or amount of cash
they will receive until settlement of the consideration under the Acquisition.
Elections under the Mix and Match Facility will not affect the entitlements of
those VT Shareholders who do not make any such elections or result in Babcock
issuing additional Consideration Shares.
Further information on the Mix and Match Facility will be included in the Scheme
Document.
4. Recommendations
The VT Directors, who have been so advised by Rothschild, consider the terms of
the Acquisition to be fair and reasonable. In providing advice to the VT
Directors, Rothschild has taken into account the VT Directors' commercial
assessment of the Acquisition. The VT Directors intend to recommend unanimously
that VT Shareholders vote in favour of the resolutions to be proposed at the VT
General Meeting and the Scheme Meeting, as the VT Directors have irrevocably
undertaken to do in respect of their own beneficial holdings of 436,148 VT
Shares in aggregate, representing approximately 0.2 per cent. of the issued
ordinary share capital of VT.
The Babcock Directors, who have received financial advice from J.P. Morgan
Cazenove and Evercore Partners, consider the terms of the Acquisition to be fair
and reasonable. In providing advice to the Babcock Directors, J.P. Morgan
Cazenove and Evercore Partners have relied upon the Babcock Directors'
commercial assessment of the Acquisition. The Babcock Directors intend to
recommend unanimously that Babcock Shareholders vote in favour of the
resolutions to approve and implement the Acquisition, as the Babcock Directors
intend to do in respect of their own beneficial holdings of 1,040,171 Babcock
Shares in aggregate, representing approximately 0.5 per cent. of the issued
ordinary share capital of Babcock.
5. Background to, and reasons for, the Acquisition
Babcock has successfully delivered on its strategic objective of being a leading
engineering support services company in the UK and selected overseas markets.
The Babcock Board believes the Acquisition supports this strategy and that the
combination of VT and Babcock brings together two highly complementary
businesses with increased scale and capabilities in their core markets which
will deliver significant benefits for customers and shareholders.
The Combined Group will offer complementary skills across a wider range of
customers and the ability to offer a broader range of solutions. In addition,
the Babcock Board believes the Combined Group will be better positioned to build
upon business opportunities and provide cost efficient solutions for its
customers. As a result, a combination will expand the size of the Combined
Group's addressable markets, which will in turn be better placed to deliver
against increasing customer demand for large and complex contracts.
Specifically, the Combined Group will have the following strengths across its
core activities:
· Defence
o Breadth and depth across the MoD;
o An extremely broad and deep capability in UK Air, Land and Sea;
o Four main support areas: infrastructure, equipment support, training and
communications; and
o Combined strength to win larger, more complex contracts:
* the increased scale and enhanced capability of the Combined Group will enable
it to take on a broader range of larger, more complex support contracts and
increase its work share.
· Nuclear
o A strong nuclear business with significant consultancy positions along with
presence at tiers one, two and three;
o Approximately 3,000 employees servicing defence and civil nuclear sectors;
o Opportunity to build upon VT's strong customer relationship with Sellafield;
and
o Ability to cross sell VT's training and education expertise to Babcock's
nuclear customers.
· Critical Infrastructure
o Strong civil business in government and regulated industries;
o Well positioned to use enhanced range of skills and expertise to deliver
broader range of customer solutions;
o Opportunity to develop strong training and education business in a fragmented
civil market; and
o Main support areas of infrastructure, equipment support, education and
training and communications.
· International
o Well positioned to use the Combined Group's enhanced range of skills and
expertise to deliver a broader range of customer solutions in our existing
International markets (USA, Canada, Australia, South Africa, Middle East and
Eastern Europe):
* Opportunities to sell complementary capabilities where the Combined Group has
an established presence; and
* Build on Babcock's and VT's excellent reputation for customer service,
delivery and cost reduction.
Babcock has a long and successful track record of integrating acquisitions and
delivering synergies for the benefit of shareholders and cost savings for the
benefit of customers. In addition to the improved growth prospects of the
Combined Group, the Babcock Directors believe the Acquisition will deliver
merger benefits throughout the Combined Group, prior to any one-off expenses, of
approximately GBP50 million per annum (pre-tax). It is expected that these
merger benefits will be fully realised for the period ending 31 March 2013, with
GBP30 million expected to be achieved in the financial year ended 31 March 2012.
It is also expected that there will be financial efficiencies of a further GBP8
million per annum (post tax). The one-off expenses involved in obtaining such
synergies are anticipated to be approximately GBP45 million, all of which are
expected to be incurred by the end of the second full financial year following
completion of the Acquisition. These synergies are expected to be predominantly
based on the realisation of significant cost savings through the elimination of
duplicated functions.These may include the sharing of resources between
businesses, business reorganisations, rationalisation of the Combined Group's
property portfolio, eliminating duplicate management teams at head and regional
offices and associated overheads, and procurement savings. In addition, Babcock
expects to achieve revenue synergies through an enhanced customer product and
service offering.
Through a rapid but considered integration, as well as the mutual exchange of
best practice in all functions, regions and market segments, the Combined Group
will seek to maximise value opportunities for shareholders, customers and
employees. The Babcock Board believes that the Acquisition will further enhance
its proven capability to execute a profitable growth strategy and is expected to
be accretive in terms of earnings per share in the first full financial year
following completion of the Acquisition.
6. Background to and reasons for the VT Board recommendation
Over the past five years, VT's strategy has been to build on its core
engineering skill base and to develop into a broad based support services
business. The strategy has been highly successful and VT's transformation into
a pure support services business was completed in October 2009 with the sale of
its shareholding in the BVT joint venture with BAE Systems for gross proceeds of
GBP299 million.
VT has delivered material value to its shareholders over the past five years.
The VT Board remains highly confident in the prospects for VT as a standalone
business, supported by a very strong balance sheet, and that the rationale for
its strategy of broadening its customer base and support services offering
remains strong.
The VT Board believes however that, although VT has the opportunity to continue
to develop under the present ownership structure, there is compelling financial
logic for VT Shareholders to a combination of VT and Babcock on the terms of the
Acquisition and that, together, the two businesses should be able to take
advantage of the trend for contracts of increasing complexity and scale. The VT
Board believes Babcock's offer delivers an attractive opportunity for VT
Shareholders to benefit from (i) the immediate premium implicit in Babcock's
offer, and (ii) the potential upside to the value of the Combined Group,
including through the realisation of revenue and cost synergies.
2 These amounts include the previously announced merger benefits of
approximately GBP27 million per annum (pre-tax), and the further benefit of
approximately GBP6 million per annum expected to come from a reduction in the
effective corporation tax rate of the Combined Group, each as previously
announced by Babcock on 15 February 2010. Nothing in this announcement should be
interpreted to mean that the future earnings per share of Babcock will
necessarily match or exceed the historical earnings per share of Babcock or VT.
3 Nothing in this announcement should be interpreted to mean that the future
earnings per share of Babcock will
necessarily match or exceed the
historical earnings per share of Babcock or VT.
7. Information relating to Babcock
Babcock is a leading engineering support services company operating in the
defence, nuclear, power generation and transmission markets. Its customers are
mainly government departments or blue chip companies operating in highly
regulated markets, who own or operate strategically important assets requiring
long-term maintenance and upgrade. Babcock employs approximately 17,000 skilled
people in the UK, Africa, North America and Australia across six divisions:
· Marine:
Babcock has a leading naval support business with a critical role supporting the
Royal Navy and the MoD. Key activities include base porting, refitting,
refuelling and decommissioning submarines, maintaining and refitting warships,
building the next generation aircraft carriers, managing naval bases and
providing equipment support on behalf of the UK Government.
Babcock recently formed a new business unit within its Marine division to bring
together the engineering, design, systems integration and platform management
capabilities across the Babcock Group. Integrated Technology is one of the
leading organisations of its type in the UK defence sector.
· Defence:
Babcock provides facilities management, equipment support and training expertise
to the MoD and civil customers, such as BAA. Key activities include facilities
management for the MoD through two regional prime contracts, technical support
to the Royal Air Force through multi-activity and Integrated Operation Support
contracts, training to the Royal School of Military Engineers and support for
baggage handling systems at London Heathrow.
· Nuclear:
Babcock is one of the UK's largest nuclear engineering support services
businesses with an operational Tier 1 position in the civil nuclear market and a
direct relationship with the Nuclear Decommissioning Authority, complementing
Babcock's Tier 1 position in the military nuclear market.
The division provides, through its Tier 2 and 3 positions, outage and
maintenance support for current power generation and operation in the
decommissioning and waste management markets. Key activities include outage
support for operational reactors, decommissioning activities, waste management
solutions and safety and risk analysis.
· Networks:
Babcock operates in the high voltage power transmission, mobile and fixed
telecommunications and digital broadcast infrastructure markets in the UK. Key
activities include high voltage power transmission maintenance and upgrade,
digital switchover antenna design and replacement, mobile telecommunications
network upgrade and fixed line communications networks and next generation
networks.
· Rail:
Babcock is one of the UK's largest track renewals contractors and a major player
in the rail infrastructure market. Key activities include traditional track
renewal; signalling and control system installation and the provision of rail
power solutions.
· Engineering and Plant:
Operating mainly in South Africa, the division supports Eskom, the national
power supplier, and operates the Volvo franchise for construction equipment. Key
activities include maintenance and engineering support on power station boilers,
construction, erection and maintenance of high voltage power lines and being the
sole distributor of Volvo equipment to mining and infrastructure companies.
By combining a diverse range of services and capabilities, Babcock is able to
offer fully integrated technical and engineering solutions to satisfy several
different markets.
8. Information relating to VT
VT is a leading international support services group, which generated sales of
approximately GBP1.1 billion in the year ended 31 March 2009 (68 per cent. in
the UK and 28 per cent. in North America), has an order book in excess of GBP4
billion and employs over 16,000 people.
In May 2009, VT undertook an internal reorganisation to increase its operational
efficiency, to improve its relationships with key strategic customers, and to
create opportunities for adding complementary work streams to its current
activities.
Following this successful reorganisation, VT operates through three divisions:
Defence, Government & Critical Services and VT Group Inc.:
+-------------+---------+--------------------------------+
| Division | 2009 | Activities |
| | sales | |
+-------------+---------+--------------------------------+
| Defence | GBP428 | Manages VT's activities in |
| | m | support of UK and non-US |
| | | defence customers |
+-------------+---------+--------------------------------+
| Government | GBP376 | Manages all civil contracts, |
| & Critical | m | including those in the |
| Services | | training, education, |
| | | environment, emergency |
| | | services, and broadcasting and |
| | | security sectors |
+-------------+---------+--------------------------------+
| VT Group | GBP303 | Manages VT's US activities, |
| Inc. | m | including its relationships |
| | | with the Department of Defense |
| | | and NASA |
+-------------+---------+--------------------------------+
9. Financing of the Combined Group
The cash consideration payable to VT Shareholders under the terms of the
Acquisition will be provided from new debt facilities. Babcock has today entered
into a bridge facility of up to GBP400,000,000 and backstop facilities of up to
GBP600,000,000, each arranged by J.P. Morgan plc and Lloyds TSB Bank plc.
Under the terms of the new debt facilities, Babcock has agreed that it will not
(unless it is required by the Panel or by applicable law) amend, waive or modify
the Conditions set out in paragraphs 4(a), (c) and (d) of Appendix 1 without the
consent of the mandated lead arrangers under the bridge facility, and without
the consent of lenders whose commitments represent in aggregate more than 50 per
cent. of the total commitments under the backstop facilities.
In addition, Babcock has agreed that it will not waive or amend any other
Condition in any material respect, where to do so could reasonably be expected
to materially prejudice the interests of the lenders under the bridge facility
and the backstop facilities, without the consent of the majority lenders under
the bridge facility and the backstop facilities.
J.P. Morgan Cazenove and Evercore Partners, joint financial advisers to Babcock,
are satisfied that sufficient resources are available to Babcock to satisfy in
full the cash consideration payable to VT Shareholders under the terms of the
Acquisition.
The Babcock Board believes it has a prudent capital structure consistent with
the long term nature of many of its revenue streams and that Babcock will
continue to be a highly cash generative business. Babcock expects its net debt
to EBITDA ratio to be approximately 2.9 times at the time of completion of the
Acquisition.
10. Babcock current trading, trends and prospects
The Babcock Board believes that the financial year ending 31 March 2010 will
prove to have been another excellent year of progress for Babcock.
Trading in the second half of the year has remained resilient, with no
significant changes to market conditions and remains in line with the
expectations outlined by Babcock in its Interim Management Statement released on
2 February 2010.
Babcock continues to benefit from the long-term nature of its contracts, the
critical nature of the engineering support it provides and the strong
relationships it has with its customers. All of Babcock's major support
contracts are performing well, with no significant changes to the levels of work
coming through to Babcock's operating divisions.
Babcock believes that its strong market positions, as well as its track record
of delivering efficiencies for customers, make it well placed to benefit from
the economic pressures which are likely to continue to increase for its
customers.
Babcock is confident that the long-term growth prospects for the Babcock Group's
principal markets remain strong, supported by the strength of its order book and
bid pipeline, and in the financial year ending 31 March 2011 Babcock expects to
build further on the excellent progress it has made in previous years.
11. VT current trading, trends and prospects
Since 28 January 2010, being the date of its last Interim Management Statement,
VT has continued to perform in line with the VT Board's expectations. The VT
Board remains confident in the long-term prospects for VT's businesses.
12. Dividend policy
Following completion of the Acquisition, it is the intention of the Babcock
Directors to maintain a progressive dividend policy having regard to the
availability of distributable reserves and cash, and taking into account the
Combined Group's working capital and investment requirements.
13. Management, employees and locations
Babcock has agreed that, upon completion of the Acquisition, the existing
employment rights of all VT Group employees will be fully respected. In
addition, Babcock has agreed that upon completion of the Acquisition, the
existing pension rights of all the VT Group employees will be observed at least
to the extent required by the applicable law and that it will not make any
changes to the pension schemes that will adversely affect future service pension
benefits provided to the VT Group employees for a period of at least 18 months
from the date of this announcement. Following completion of the Acquisition, VT
Shares will cease to be listed and the VT Share Schemes will therefore be
withdrawn and VT employees will thereafter participate in the Babcock employee
share schemes, as appropriate. Babcock's plans for VT do not otherwise involve
any material change in the conditions of employment of VT employees.
Combining two substantial groups often provides opportunities for the combined
group to realise significant cost savings through the elimination of duplicated
functions. These may include the sharing of resources between businesses,
business reorganisations and rationalisation of the combined group's property
portfolio. In assessing the terms of the Acquisition, Babcock has made certain
assumptions in relation to such savings, for example, in divisional and group
head offices, centralised functions and data centres. The precise scope for
realising any such cost savings in the context of the Combined Group, as well as
the timings and manner of implementation, will be determined by Babcock
following completion of the Acquisition. Achieving any such cost savings is
likely to lead to a number of job losses and office closures (or relocations) in
some parts of the Combined Group. However, the Babcock Board believes that for
the overwhelming majority of the Combined Group's employees the combination of
Babcock and VT will be to their advantage, offering the opportunity of continued
employment in a larger group, with the anticipated benefits the Babcock Board
expects the combination to bring (as described further in paragraph 5 above).
Babcock has agreed in the Implementation Agreement (described further at
paragraph 20 below) that where cost savings lead to job losses, it will ensure
that employees of the VT Group in the United Kingdom and the United States who
are made redundant as a consequence of the Acquisition within 24 months from the
date of this announcement will be treated at least as favourably as they would
be under the practices adopted by VT when implementing other recent
redundancies.
14. Employee Share Schemes
The Acquisition will extend to any VT Shares unconditionally allotted or issued
prior to the Reorganisation Record Time, including shares issued pursuant to the
exercise of options granted under the VT Share Schemes. Appropriate proposals
will be made in due course to participants in the VT Share Schemes. Details of
the proposals will be set out in the Scheme Document and in separate letters to
be sent to participants in the VT Share Schemes.
15. Scheme of Arrangement
It is intended that the Acquisition will be implemented by means of a
Court-sanctioned scheme of arrangement between VT and its shareholders under
Part 26 of the 2006 Act. The Scheme will involve an application by VT to the
Court to sanction the Scheme and to confirm the cancellation of all the Scheme
Shares, in consideration for which Scheme Shareholders will receive
consideration in accordance with the terms of the Acquisition. It is also
intended as part of the Scheme to effect the Capital Reduction.
The Scheme will be subject to the Conditions and certain further terms referred
to in paragraph 16 of, and at Appendix 1 to, this announcement, and to be
included in the Scheme Document.
In particular, to become Effective, the Scheme requires the approval of Scheme
Shareholders by the passing of a resolution at the Scheme Meeting. The
resolution must be approved by a majority in number present and voting at the
Scheme Meeting, either in person or by proxy, representing not less than 75 per
cent. in value of the Scheme Shares which are voted at the Scheme Meeting (or
any adjournment thereof).
In addition, to become Effective, the Scheme also requires the passing at the VT
General Meeting of certain resolutions which are necessary to implement the
Scheme. These resolutions are in respect of, among others:
· the cancellation of any existing VT Shares and the approval of the issue
of new ordinary shares in VT to Babcock (and/or its nominee(s)) in accordance
with the Scheme; and
· the amendment of VT's articles of association to ensure that the VT Shares
issued under the VT Share Schemes will be subject to the Scheme or, if issued
following the Reorganisation Record Time, will be automatically transferred to
Babcock on the same terms as under the Scheme.
These resolutions require the approval of VT Shareholders representing at least
75 per cent. of the votes cast (either in person or by proxy), at the VT General
Meeting which will be held immediately after the Scheme Meeting.
Following the Scheme Meeting and the VT General Meeting, the Scheme must be
sanctioned and the Capital Reduction confirmed by the Court, and will only
become effective on delivery to the Registrar of Companies of:
· a copy of the First Court Order; and
· a copy of the Second Court Order,
and, in the case of the Second Court Order, if the Court so orders for the
Scheme to become Effective, it being registered by the Registrar of Companies
together with the statement of capital attached to it.
Upon the Scheme becoming Effective, it will be binding on all Scheme
Shareholders, irrespective of whether or not they attended or voted at the
Scheme Meeting or the VT General Meeting.
The Scheme Document will include full details of the Scheme, together with
notices of the Scheme Meeting and the VT General Meeting and the expected
timetable, and will specify the action to be taken by Scheme Shareholders.
Babcock reserves the right to decide to implement the Acquisition by way of an
Offer for the entire issued and to be issued share capital of VT not already
held by Babcock. VT has agreed that, in the event that the Acquisition is
implemented by way of an Offer, the offer document will contain the
recommendation of the VT Directors, on a unanimous and unqualified basis, to VT
Shareholders to accept the offer, except to the extent that the VT Directors
have determined in good faith that such recommendation should be modified due to
the requirements of Rule 3.1 of the Takeover Code to make the substance of any
independent advice known to VT Shareholders and noting that the VT Directors
retain the right to withdraw such recommendation in certain circumstances.
16. Conditions to the Scheme becoming Effective
In addition to the Scheme conditions described in paragraph 15, the Acquisition
will be subject to the satisfaction of additional conditions and certain further
terms.
The Acquisition will be conditional upon the approval of the Babcock Resolution
by Babcock Shareholders at the Babcock General Meeting and the Admission of the
New Babcock Shares to trading on the London Stock Exchange and to listing on the
Official List. Further information on the Babcock General Meeting is provided
below at paragraph 18.
In addition, the Scheme will be subject to the satisfaction of certain
anti-trust and regulatory conditions, including, amongst other things:
· the OFT deciding not to refer the Acquisition to the UK Competition
Commission and the Secretary of State for Business, Innovation and Skills not
having giving an intervention notice to the OFT in respect of the Acquisition;
· the CFIUS having given written notice to Babcock that it had completed its
review of the Acquisition under applicable regulations without the President of
the United States invoking his authority to block the Acquisition; and
· the waiting periods under the United States Hart Scott Rodino Antitrust
Improvements Act of 1976, and the regulations made thereunder in respect of the
Acquisition, having expired or been terminated.
17. VT delisting, cancellation of trading and re-registration
It is intended that the London Stock Exchange will be requested to cancel
trading in VT Shares on the London Stock Exchange's main market for listed
securities and the UKLA will be requested to cancel the listing of the VT Shares
from the Official List on the Effective Date.
Further, it is intended that, VT will be re-registered as a private limited
company immediately upon the Scheme becoming Effective.
If the Acquisition is effected by way of an Offer, it is anticipated that the
cancellation of VT's listing and admission to trading will take effect no
earlier than 20 Business Days after the date on which the Offer becomes or is
declared unconditional in all respects. Delisting would significantly reduce the
liquidity and marketability of any VT Shares not assented to the Offer at that
time.
If the Acquisition is effected by way of an Offer and such Offer becomes or is
declared unconditional in all respects and sufficient acceptances are received,
Babcock intends to exercise its rights to acquire compulsorily the remaining VT
Shares in respect of which the offer has not been accepted under Chapter 3 Part
28 of the 2006 Act.
18. Babcock shareholder approval and Prospectus
In view of the size of the Acquisition and in order to implement it, it will be
necessary for the Babcock Shareholders to approve the Acquisition and the
allotment of the Consideration Shares. A general meeting will be convened for
this purpose. The Babcock Circular convening the general meeting will be sent
to Babcock Shareholders in due course.
The Babcock Resolution set out on the Babcock Circular will require the approval
of the Babcock Shareholders representing more than 50 per cent. of the votes
cast at the Babcock General Meeting (either in person or by proxy).
Babcock will also be required to publish a prospectus in connection
with the issue of the New Babcock Shares. The Prospectus will be published as
soon as practicable and will contain information on the Combined Group and the
New Babcock Shares.
19. Listings, dealings and settlement
Fractions of Consideration Shares will not be allotted or issued to VT
Shareholders. Fractional entitlements to Consideration Shares will be aggregated
and sold in the market and the net proceeds of sale distributed pro rata to the
Scheme Shareholders entitled thereto.
The Consideration Shares will be issued credited as fully paid and will rank
pari passu in all respects with the existing Babcock Shares, including the right
to receive in full all dividends and other distributions (if any) declared, made
or paid by reference to a record date after the Effective Date (and therefore
they will not carry any entitlement to any final dividend or second interim
dividend of Babcock declared made or paid in respect of the financial year
ending 31 March 2010). As a result of the Acquisition, Babcock intends to pay a
second interim dividend to Babcock Shareholders by reference to a record date
prior to the Effective Date and which will, assuming the Acquisition becomes
Effective, be in lieu of a final dividend for the financial year ending 31 March
2010. The amount of the second interim dividend will be announced in Babcock's
preliminary results for the year ending 31 March 2010 and will be paid shortly
after the Effective Date.
Application will be made to the UKLA for the New Babcock Shares to be admitted
to the Official List and application will be made to the London Stock Exchange
for the New Babcock Shares to be admitted to the London Stock Exchange's main
market for listed securities. It is expected that Admission will become
effective and that dealings for normal settlement in the New Babcock Shares will
commence on the London Stock Exchange at 8.00 a.m. on the first Business Day
following the Effective Date.
20. Implementation Agreement
Babcock and VT have entered into an Implementation Agreement in relation to the
Acquisition which contains provisions regarding the implementation of the
Acquisition and certain assurances and confirmations between the parties
(including terms regarding the conduct of the businesses of Babcock and VT
pending implementation of the Acquisition).
Non-solicitation arrangements
VT has undertaken, amongst other things, not to, and to procure that members of
the VT Group and their respective directors, employees and advisers shall not,
solicit, initiate, encourage or otherwise seek to procure an Alternative Offer.
VT has also undertaken to notify Babcock immediately of any approach that is
made to it or any other member of the VT Group or its directors, employees,
advisers or agents in relation to an Alternative Offer.
Break fee arrangements
VT has agreed to pay Babcock a break fee of GBP13,258,825 if:
(a) the recommendation of the VT Directors of the Acquisition is
either (a) withdrawn or (b) qualified or modified adversely and in a material
respect, unless in each case: (i) if an event triggering the payment of a break
fee described in paragraph (b) below has already occurred; (ii) following an
event that leads to any of the Conditions in paragraphs 4(i)(i), 4(i)(ii),
4(i)(iii), 4(i)(ix) or 4(j)(i) of Appendix 1 being invoked by VT; or (iii) an
event triggering the payment of the Babcock break fee described below has
already occurred;
(b) an Alternative Offer is announced (under Rule 2.4 or Rule 2.5 of
the Takeover Code, in respect of an Alternative Offer which is subject to the
Takeover Code, or otherwise, in respect of other Alternative Offers which are
not subject to the Takeover Code) at any time before the Scheme (or, if
applicable, any Offer) lapses or is withdrawn and that Alternative Offer
subsequently becomes or is declared unconditional in all respects or is
otherwise completed or implemented
In addition, Babcock has agreed to pay VT a break fee of GBP12,228,421 if the
recommendation of the Babcock Directors of the Acquisition set out in the
Babcock Circular is subsequently either (a) withdrawn or (b) qualified or
modified adversely and in a material respect, in each case other that: (i)
following an event that leads to a Condition (other than, in each case only to
the extent that such Conditions relate to Babcock, any of Conditions in
paragraphs 4(i)(i), 4(i)(ii), 4(i)(iii), 4(i)(ix) or 4(j)(i)of Appendix 1,)
being invoked; or (ii) if any event triggering the payment of the VT break fee
described above has already occurred.
21. Irrevocable undertakings
Babcock has received irrevocable undertakings to vote in favour of the
resolutions to be proposed at the Scheme Meeting and the VT General Meeting (or,
if applicable, to accept the Offer) from the VT Directors who hold VT Shares in
respect of aggregate holdings of 436,148 VT Shares, representing approximately
0.2 per cent. of the entire existing issued VT Shares.
Further details of these irrevocable undertakings are set out in Appendix 3 to
this announcement.
22. Interests
Save in respect of the irrevocable undertakings referred to above and as
disclosed below, as at the close of business on 19 March 2010 (being the last
practicable Business Day prior to the date of this announcement) neither
Babcock, nor any of the Babcock Directors, nor, so far as Babcock is aware, any
person acting in concert with Babcock has: (i) any interest in or right to
subscribe for any relevant securities of VT, nor (ii) any short positions in
respect of relevant VT Shares (whether conditional or absolute and whether in
the money or otherwise), including any short position under a derivative, any
agreement to sell or any delivery obligation or right to require another person
to purchase or take delivery, nor (iii) borrowed or lent any relevant VT Shares:
+-------------------------+---------------+--------------+
| Name | Number of VT |Number of VT |
| |Shares (Long) | Shares |
| | | (Short) |
+-------------------------+---------------+--------------+
| JP Morgan Clearing | 238,084 | - |
| Corp. | | |
+-------------------------+---------------+--------------+
| J.P. Morgan Securities | - | 137,727 |
| Ltd. | | |
+-------------------------+---------------+--------------+
| JP Morgan Asset | 1,405,924 | - |
| Management (UK) Limited | | |
+-------------------------+---------------+--------------+
23. Overseas shareholders
The availability of the New Babcock Shares under the terms of the Acquisition to
persons not resident in the United Kingdom may be affected by the laws of the
relevant jurisdiction. Such persons should inform themselves about and observe
any applicable requirements. Further details in relation to overseas
shareholders will be contained in the Scheme Document.
24. General and documentation
The Acquisition will be governed by English law and will be subject to the
jurisdiction of the English courts.
The Acquisition will be on the terms and subject to the conditions set out
herein and in Appendix 1, and to be set out in the Scheme Document.
The formal Scheme Document will be sent to VT Shareholders (other than certain
overseas shareholders) as soon as practicable. At the same time or as nearly as
practicable at the same time, the Babcock Circular convening the Babcock General
Meeting will be sent to Babcock Shareholders and the Prospectus giving financial
and other information in relation to Babcock and the Combined Group will be
published.
In accordance with Rule 2.10 of the Code, VT has in issue 180,409,726 ordinary
shares of 5 pence each. The ISIN for the shares is GB0031729733.
VT holds no treasury shares.
Enquiries
+--------------------------------+------------------------------+
| Babcock International Group PLC |
+---------------------------------------------------------------+
| Peter Rogers, Chief Executive | Tel: +44 (0)20 7355 5300 |
+--------------------------------+------------------------------+
| Bill Tame, Group Finance | |
| Director | |
+--------------------------------+------------------------------+
| Franco Martinelli, Group | |
| Financial Controller | |
+--------------------------------+------------------------------+
| J.P. Morgan Cazenove (joint financial adviser and corporate |
| broker to Babcock) |
+---------------------------------------------------------------+
| Andrew Truscott | Tel: +44 (0)20 7588 2828 |
+--------------------------------+------------------------------+
| Malcolm Moir | |
+--------------------------------+------------------------------+
| Guy Marks | |
+--------------------------------+------------------------------+
| Christopher Dickinson | |
+--------------------------------+------------------------------+
| Evercore Partners (joint financial adviser to Babcock) |
+---------------------------------------------------------------+
| Bernard Taylor | Tel: +44 (0)20 7268 2700 |
+--------------------------------+------------------------------+
| Julian Oakley | |
+--------------------------------+------------------------------+
| Financial Dynamics (PR adviser to Babcock) |
+---------------------------------------------------------------+
| Andrew Lorenz | Tel: +44 (0)20 7269 7291 |
+--------------------------------+------------------------------+
| Richard Mountain | |
+--------------------------------+------------------------------+
| VT Group plc | |
+--------------------------------+------------------------------+
| Paul Lester | Tel: +44 (0)23 8083 9001 |
+--------------------------------+------------------------------+
| Philip Harrison | |
+--------------------------------+------------------------------+
| Rothschild (financial adviser to VT) |
| |
+---------------------------------------------------------------+
| Robert Leitão | Tel: +44 (0)20 7280 5000 |
+--------------------------------+------------------------------+
| Ravi Gupta | |
+--------------------------------+------------------------------+
| Merrill Lynch (corporate broker to VT) |
+---------------------------------------------------------------+
| Mark Astaire | Tel: +44 (0)20 7628 1000 |
+--------------------------------+------------------------------+
| Peter Brown | |
+--------------------------------+------------------------------+
| Citigate Dewe Rogerson (PR adviser to VT) |
+---------------------------------------------------------------+
| Ginny Pulbrook | Tel: +44 (0)20 7638 9571 |
+--------------------------------+------------------------------+
| Patrick Donovan | |
+--------------------------------+------------------------------+
J.P. Morgan plc, which conducts its UK investment banking businesses as J.P.
Morgan Cazenove and is authorised and regulated in the United Kingdom by the
FSA, is acting as financial adviser to Babcock and no-one else in connection
with the contents of this announcement and will not be responsible to any person
other than Babcock for providing the protections afforded to customers of J.P.
Morgan plc nor for providing advice in relation to any matter referred to
herein.
Evercore Partners Limited is authorised and regulated in the United Kingdom by
the FSA, is acting as financial adviser to Babcock and for no-one else in
connection with the matters set out in this announcement and will not be
responsible to anyone other than Babcock for providing the protections afforded
to clients of Evercore Partners Limited nor for providing advice in relation to
any matter referred to herein.
Rothschild and Merrill Lynch are authorised and regulated in the United Kingdom
by the FSA, are acting for VT and for no one else in connection with the matters
set out in this announcement and will not be responsible to anyone other than VT
for providing the protections afforded to clients of Rothschild and Merrill
Lynch nor for providing advice in relation to any matter referred to herein.
This announcement is not intended to, and does not, constitute or form part of
any offer, invitation or the solicitation of an offer to purchase, otherwise
acquire, subscribe for, sell or otherwise dispose of, any securities. This
announcement has been prepared in accordance with English law and the Takeover
Code and information disclosed may not be the same as that which would have been
prepared in accordance with the laws of jurisdictions outside of the United
Kingdom.
The release, publication or distribution of this announcement in jurisdictions
other than the United Kingdom may be restricted by law and therefore any persons
who are subject to the laws of any jurisdiction other than the United Kingdom
should inform themselves about, and observe, any applicable requirements. This
announcement has been prepared for the purposes of complying with English law
and the Takeover Code and the information disclosed may not be the same as that
which would have been disclosed if this announcement had been prepared in
accordance with the laws and regulations of any jurisdiction outside of England.
This announcement is not intended to, and does not constitute, or form part of,
an offer to sell or an invitation to purchase or subscribe for any securities or
a solicitation of any vote or approval in any jurisdiction. This announcement
does not constitute a prospectus or a prospectus equivalent document.
Shareholders of Babcock and VT are advised to read carefully the formal
documentation in relation to the Acquisition once it has been despatched. The
proposals of the Acquisition will be made solely through the Scheme Document,
which will contain the full terms and conditions of the Scheme, including
details of how to vote with respect to the Scheme. Any response to the proposals
should be made only on the basis of the information in the Scheme Document.
Overseas jurisdictions
This announcement is not an offer of, or solicitation of an offer to purchase,
securities in the United States and the New Babcock Shares, which will be issued
in connection with the Acquisition, have not been, and will not be, registered
under the US Securities Act or under the securities law of any state, district
or other jurisdiction of the United States, Australia, Canada or Japan and no
regulatory clearance in respect of the New Babcock Shares has been, or will be,
applied for in any jurisdiction other than the UK.
The New Babcock Shares may not be offered, sold, or, delivered, directly or
indirectly, in, into or from the United States absent registration under the US
Securities Act or an exemption from registration. It is expected that the New
Babcock Shares to be issued in the Scheme will be issued in reliance upon the
exemption from the registration requirements of the US Securities Act provided
by Section 3(a)(10) thereof. Under applicable US securities laws, persons
(whether or not US persons) who are or will be "affiliates" (within the meaning
of the US Securities Act) of Babcock or VT prior to, or of Babcock after, the
Effective Date will be subject to certain transfer restrictions relating to the
New Babcock Shares received in connection with the Scheme.
If the Acquisition is implemented by way of an Offer, it will be made in
accordance with the procedural and filing requirements of US securities laws, to
the extent applicable.
The Acquisition relates to the shares of a UK company and is proposed to be made
by means of a scheme of arrangement provided for under the laws of England and
Wales. The Acquisition is subject to the disclosure requirements and practices
applicable in the United Kingdom to schemes of arrangement, which may differ
from the disclosure and other requirements of the securities laws of
jurisdictions other than the United Kingdom. Financial information included in
the relevant documentation will have been prepared in accordance with accounting
standards applicable in the United Kingdom that may not be comparable to the
financial statements of non-U.K. companies.
The New Babcock Shares may not be offered, sold, resold, delivered or
distributed, directly or indirectly, in, into or from Canada, Australia or Japan
or to, or for the account or benefit of, any resident of Australia, Canada or
Japan absent an exemption from registration or an exemption under relevant
securities law. Copies of this announcement and any formal documentation
relating to the Acquisition are not being, and must not be, directly or
indirectly, mailed or otherwise forwarded, distributed or sent in, into or from
Canada, Australia or Japan and persons receiving such documents (including
custodians, nominees and trustees) must not mail or otherwise forward,
distribute or send it in, into or from Canada, Australia or Japan.
Forward-looking statements
Certain statements in this announcement are forward-looking statements. By their
nature, forward-looking statements involve a number of risks, uncertainties or
assumptions that could cause actual results or events to differ materially from
those expressed or implied by the forward-looking statements. These risks,
uncertainties or assumptions could adversely affect the outcome and financial
effects of the plans and events described herein. Forward-looking statements
contained in this document regarding past trends or activities should not be
taken as a representation that such trends or activities will continue in the
future. You should not place undue reliance on forward-looking statements, which
speak only as of the date of this announcement. Except as required by law,
neither of Babcock or VT is under an obligation to update or keep current the
forward-looking statements contained in this announcement or to correct any
inaccuracies which may become apparent in such forward-looking statements.
No statement in this announcement is intended as a profit forecast or profit
estimate and no statement in this announcement should be interpreted to mean
that the future earnings per share of the Combined Group, Babcock and/or VT for
current or future financial years will necessarily match or exceed the
historical or published earnings per share of Babcock or VT.
Dealing Disclosure Requirements
Under the provisions of Rule 8.3 of the Code, if any person is, or becomes,
'interested' (directly or indirectly) in 1 per cent. or more of any class of
'relevant securities' of Babcock or of VT, all 'dealings' in any 'relevant
securities' of Babcock or of VT (including by means of an option in respect of,
or a derivative referenced to, any such 'relevant securities') must be publicly
disclosed by not later than 3.30 p.m. (London time) on the London business day
following the date of the relevant transaction. This requirement will continue
until the date on which any 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 Babcock or VT, 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 Babcock or of VT by Babcock or VT 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 companies in whose 'relevant securities'
'dealings' should be disclosed, and the number of such securities in issue, can
be found on the 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.
Publication on Babcock website
A copy of this announcement will be available on Babcock's website at
(www.babcock.co.uk) by no later than 12 noon (London time) on 24 March 2010
APPENDIX 1
CONDITIONS AND FURTHER TERMS OF THE ACQUISITION
PART A
Conditions to the Acquisition
The Acquisition will be conditional upon the Scheme becoming unconditional and
becoming Effective by not later than 31 August 2010 or such later date (if any)
as Babcock and VT may, with the consent of the Panel, agree and (if required)
the Court may approve.
1. The Scheme will be subject to the following conditions:
(a) its approval by a majority in number representing not less than
three-fourths in value of the Scheme Shareholders (or the relevant class or
classes thereof, if applicable) who are on the register of members of VT at the
Scheme Voting Record Time, present and voting, whether in person or by proxy, at
the Scheme Meeting and any separate class meeting which may be required by the
Court or any adjournment thereof;
(b) the resolutions required to approve and implement the Scheme
being duly passed at the VT General Meeting (or any adjournment thereof); and
(c) the sanction of the Scheme and the confirmation of the Capital
Reduction by the Court (in either case with or without modification (but subject
to such modification being acceptable to Babcock and VT)), office copies of the
Court Orders and of a statement of capital being delivered to the Registrar of
Companies and, if the Court so orders for the Scheme to become Effective,
registration of the Second Court Order confirming the Capital Reduction with the
Registrar of Companies.
2. The Acquisition will be conditional upon the passing at the Babcock
General Meeting (or at any adjournment thereof) of the Babcock Resolution.
3. The Acquisition will also be conditional upon the Admission to the
Official List of the New Babcock Shares becoming effective in accordance with
the Listing Rules and the Admission of such shares to the London Stock
Exchange's market for listed securities becoming effective in accordance with
the LSE Admission Standards or (if Babcock and VT so determine and subject to
the consent of the Panel) the UKLA agreeing or confirming its decision to admit
such shares to the Official List and the London Stock Exchange agreeing to admit
such shares to trading subject only to (i) allotment of such shares and/or (ii)
the Scheme becoming Effective.
4. Subject to the provisions of paragraphs 5 and 6 of this Part A and
the requirements of the Panel in accordance with the Takeover Code, the
Acquisition will also be conditional upon, and accordingly the necessary actions
to implement the Acquisition will only be taken on, the satisfaction or, where
relevant, waiver of the following Conditions:
(a) the Office of Fair Trading ("OFT") deciding, in terms reasonably
satisfactory to Babcock and VT, not to refer the Acquisition or any matter
arising therefrom to the UK Competition Commission;
(b) the Secretary of State for Business, Innovation and Skills not
giving an intervention notice to the OFT under s.42(2) of the Enterprise Act
2002 in respect of the Acquisition prior to the OFT's decision referred to in
(b) above;
(c) any applicable waiting periods under the United States
Hart-Scott-Rodino Antitrust Improvements Act of 1976 (as amended) and the
regulations made thereunder relating to the Acquisition having expired or been
terminated;
(d) the CFIUS having given written notice to Babcock that it has
completed its review under the Exon-Florio Amendment and the Foreign Investment
and National Security Act without the President of the United States invoking
his authority under Exon-Florio Amendment to block the Acquisition;
(e) no material undertakings or assurances being sought from
Babcock, any member of the Wider Babcock Group or any member of the Wider VT
Group with respect to the continuing operations of any member of the Wider
Babcock Group or Wider VT Group by the MoD or any other third party, except on
terms reasonably satisfactory to Babcock and VT;
(f) no government or governmental, quasi-governmental,
supranational, statutory, regulatory, environmental, administrative, fiscal or
investigative body, court, trade agency, association, institution or any other
body or person whatsoever in any jurisdiction (each a "Third Party") having
decided to take, institute, implement or threaten any action, proceeding, suit,
investigation, enquiry or reference, or having required any action to be taken
or otherwise having done anything or having enacted, made or proposed any
statute, regulation, decision, order and there not continuing to be outstanding
any statute, regulation, decision or order which would or might reasonably be
expected to:
(i) make the Acquisition, its implementation or the acquisition or
proposed acquisition of any shares or other securities in, or control of, VT by
any member of the Wider Babcock Group void, illegal and/or unenforceable under
the laws of any jurisdiction, or otherwise directly or indirectly prohibit, or
materially restrain, restrict, delay or otherwise interfere with the
implementation of, or impose material additional conditions or obligations with
respect to, or otherwise materially challenge or require material amendment of
the Acquisition;
(ii) require, prevent or materially delay the divestiture or materially
alter the terms envisaged for such divestiture by any member of the Wider
Babcock Group or by any member of the Wider VT Group of all or any part of its
businesses, assets or property or impose any limitation on the ability of any of
them to conduct their respective businesses (or any part thereof) or to own any
of their assets or properties (or any part thereof) in either such case to an
extent which is material in the context of the VT Group taken as a whole or the
Babcock Group taken as a whole (as the case may be);
(iii) impose any material limitation on, or result in a material delay in,
the ability of any member of the Wider Babcock Group directly or indirectly to
acquire or hold or to exercise effectively all or any rights of ownership in
respect of shares or other securities in VT or on the ability of any member of
the Wider VT Group or any member of the Wider Babcock Group directly or
indirectly to hold or exercise effectively any rights of ownership in respect of
shares or other securities (or the equivalent) in, or to exercise management
control over, any member of the Wider Babcock Group;
(iv) except pursuant to Chapter 3 of Part 28 of the 2006 Act, require any
member of the Wider Babcock Group or the Wider VT Group to acquire or offer to
acquire any shares, other securities (or the equivalent) or interest in any
member of the Wider VT Group owned by any third party (other than in the
implementation of the Acquisition);
(v) require, prevent or materially delay a divestiture by any member of
the Wider Babcock Group of any shares or other securities (or the equivalent) in
any member of the Wider VT Group;
(vi) result in any member of the Wider VT Group ceasing to be able to carry
on business under any name under which it presently carries on business to an
extent which is material in the context of the VT Group taken as a whole;
(vii) impose any material limitation on the ability of any member of the
Wider Babcock Group or any member of the Wider VT Group to integrate or
co-ordinate all or any part of its business with all or any part of the business
of any other member of the Wider Babcock Group and/or the Wider VT Group which
is adverse to and material in the context of the group concerned taken as a
whole; or
(viii) otherwise affect the business, assets or profits of any member of the
Wider VT Group or any member of the Wider Babcock Group in a manner which is
adverse to and material in the context of the VT Group taken as a whole or of
the obligations of any members of Babcock Group taken as a whole in connection
with the Acquisition,
and all applicable waiting and other time periods during which any such Third
Party could decide to take, institute, implement or threaten any such action,
proceeding, suit, investigation, enquiry or reference or take any other step
under the laws of any jurisdiction in respect of the Acquisition or the
acquisition or proposed acquisition of any VT Shares or otherwise intervene
having expired, lapsed, or been terminated;
(g) all necessary or appropriate notifications, filings or
applications having been made in connection with the Acquisition and all
necessary waiting periods (including any extensions thereof) under any
applicable legislation or regulation of any jurisdiction having expired, lapsed
or been terminated (as appropriate) and all statutory and regulatory obligations
in any jurisdiction having been complied with in connection with the Acquisition
and all Authorisations necessary or appropriate in any jurisdiction for or in
respect of the Acquisition and the acquisition or the proposed acquisition of
any shares or other securities in, or control of, VT by any member of the Wider
Babcock Group having been obtained in terms and in a form reasonably
satisfactory to Babcock and VT from all appropriate Third Parties or (without
prejudice to the generality of the foregoing) from any person or bodies with
whom any member of the Wider VT Group or the Wider Babcock Group has entered
into contractual arrangements and all such Authorisations necessary or
appropriate to carry on the business of any member of the Wider VT Group in any
jurisdiction having been obtained in each case where the direct consequence of a
failure to make such notification or filing or to wait for the expiry, lapse or
termination of any such waiting period or to comply with such obligation or
obtain such Authorisation would have a material adverse effect on the VT Group
taken as a whole, any member of the Babcock Group taken as a whole or the
ability of Babcock to implement the Acquisition and all such Authorisations
remaining in full force and effect at the time at which the Acquisition becomes
otherwise unconditional and there being no notice of an intention to revoke,
suspend, restrict, modify or not to renew such Authorisations;
(h) except as fairly disclosed in the annual report and accounts of
VT for the year ended 31 March 2009 or the interim results of VT for the half
year ended 30 September 2009 or as publicly announced to a Regulatory
Information Service by or on behalf of VT or as fairly disclosed in writing by
VT to Babcock prior to the date of this announcement, there being no provision
of any arrangement, agreement, licence, permit, lease or other instrument to
which any member of the Wider VT Group is a party or by or to which any such
member or any of its assets is or may be bound or be subject which, or any event
or circumstance having occurred which, under any arrangement, agreement,
licence, permit, lease or other instrument to which any member of the Wider VT
Group is a party or by or to which any such member or any of its assets is or
may be bound or be subject, would result in, as a consequence of the Acquisition
or the acquisition or the proposed acquisition by any member of the Wider
Babcock Group of any shares or other securities in VT or because of a change in
the control or management of any member of the Wider VT Group or otherwise,
could or might reasonably be expected to result in, in each case to an extent
which is material in the context of the VT Group taken as a whole:
(i) any monies borrowed by, or any other indebtedness, actual or
contingent, of any member of the Wider VT Group being or becoming repayable, or
capable of being declared repayable, immediately or prior to its or their stated
maturity date or repayment date, or the ability of any such member to borrow
monies or incur any indebtedness being withdrawn or inhibited or being capable
of becoming or being withdrawn or inhibited;
(ii) the rights, liabilities, obligations, interests or business of any
member of the Wider VT Group under any such arrangement, agreement, licence,
permit, lease or instrument or the interests or business of any member of the
Wider VT Group in or with any other firm or company or body or person (or any
agreement or arrangement relating to any such business or interests) being
terminated or adversely modified or affected or any onerous obligation or
liability arising or any adverse action being taken thereunder;
(iii) any member of the Wider VT Group ceasing to be able to carry on
business under any name under which it presently carries on business to an
extent which is material in the context of the VT Group taken as a whole;
(iv) any assets or interests of, or any asset the use of which is enjoyed
by, any member of the Wider VT Group being or falling to be disposed of or
charged or any right arising under which any such asset or interest could be
required to be disposed of or charged or could cease to be available to any
member of the Wider VT Group otherwise than in the ordinary course of business;
(v) the creation or enforcement of any mortgage, charge or other security
interest over the whole or any part of the business, property or assets of any
member of the Wider VT Group;
(vi) the value of, or the financial or trading position of, any member of
the Wider VT Group being prejudiced or adversely affected; or
(vii) the creation of any liability (actual or contingent) by any member of
the Wider VT Group otherwise than in the ordinary course of business;
(i) except as fairly disclosed in (1) the annual report and
accounts of VT for the year ended 31 March 2009, (2) the interim results of VT
for the half year ended 30 September 2009, (3) the annual report and accounts of
Babcock for the year ended 31 March 2009, (4) the interim results of Babcock for
the half year ended 30 September 2009, (5) as publicly announced to a Regulatory
Information Service by or on behalf of VT or Babcock or (6) as fairly disclosed
in writing by or on behalf of VT or Babcock to the other prior to the date of
this announcement, no member of the Wider VT Group and, in relation to
paragraphs (i), (ii), (iii) and (ix) only, no member of the Wider Babcock Group
having:
(i) issued or agreed to issue or authorised the issue of additional
shares of any class, or securities or securities convertible into, or
exchangeable for, or rights, warrants or options to subscribe for or acquire,
any such shares or convertible securities (save, where relevant, as between VT
and wholly-owned subsidiaries of VT or as between Babcock and wholly-owned
subsidiaries of Babcock (as appropriate) and save for the issue of VT Shares or
Babcock Shares (as appropriate) on the exercise of options granted before the
date of this announcement in the ordinary course);
(ii) recommended, declared, paid or made or proposed to recommend,
declare, pay or make any bonus, dividend or other distribution (whether payable
in cash or otherwise) other than to VT or one of its wholly-owned subsidiaries
or to Babcock or one of its wholly-owned subsidiaries (as appropriate) or in the
case of Babcock only, save for any final dividend, or second interim dividend in
lieu of a final dividend, declared, made or paid in respect of the financial
year ending 31 March 2010 (and provided that the amount of any such dividend is
consistent with Babcock's past practice and its stated dividend policy);
(iii) merged with (by statutory merger or otherwise) or demerged from or
acquired any body corporate, partnership or business or acquired or disposed of,
or, transferred, mortgaged or charged or created any security interest over, any
assets or any right, title or interest in any asset (including shares and trade
investments) or authorised, proposed or announced any intention to do so, in
each case, other than in the ordinary course of business and save for
transactions between VT and its wholly-owned subsidiaries or between such
wholly-owned subsidiaries or between Babcock and its wholly-owned subsidiaries
or between such wholly-owned subsidiaries (as appropriate);
(iv) save as between VT and its wholly-owned subsidiaries or between such
wholly owned subsidiaries, made or announced an intention to propose any change
in its loan capital;
(v) issued, authorised or proposed the issue of any debentures or (save in
the ordinary course of business and save as between VT and its wholly-owned
subsidiaries or between such wholly owned subsidiaries), incurred or increased
any indebtedness or become subject to any contingent liability to an extent
which is material in the context of the VT Group taken as a whole;
(vi) entered into or varied or authorised or announced its intention to
enter into or vary any contract, transaction, arrangement or commitment (whether
in respect of capital expenditure or otherwise) (otherwise than in the ordinary
course of business) which is of a long term, unusual or onerous nature, or which
involves or could involve an obligation of a nature or magnitude which is, in
any such case, material in the context of the VT Group taken as a whole or which
is or is likely to be materially restrictive on the business of any member of
the Wider VT Group taken as a whole or the Wider Babcock Group taken as a whole;
(vii) entered into or materially varied the terms of any service agreement
with any director or senior executive of the Wider VT Group to an extent which
is material in the context of the VT Group;
(viii) proposed, agreed to provide or modified in any material respect the
terms of any share option scheme, incentive scheme, or other benefit relating to
the employment or termination of employment of any employee of the Wider VT
Group which, taken as a whole, are material in the context of the VT Group taken
as a whole;
(ix) subject to any such act being material in the context of the VT Group
as a whole or the Babcock Group as a whole (as appropriate), and except as
required by law or any regulatory body or competent legal authority, made or
agreed or consented to any significant change to the terms of the trust deeds
constituting the pensions schemes established for its directors, employees or
their dependants or the benefits which accrue, or to the pensions which are
payable, thereunder, or to the basis on which qualification for, or accrual or
entitlement to, such benefits or pensions are calculated or determined or, as
set out in any scheme specific funding valuation (under Part 3 of the Pensions
Act 2004) of the scheme or schedule of contributions or other agreement between
VT or Babcock (as appropriate) and the trustee, the basis on which the
liabilities (including pensions) of such pension schemes are funded or valued,
or agreed or consented to any change to the trustees or trustee directors
(except a simple replacement of a trustee or trustee director who has resigned),
or entered into one or more specific significant bulk annuity contracts in
relation to any such pension scheme or carried out any act which would lead to
the commencement of the winding up of the scheme or which would give rise
directly or indirectly to a significant liability arising out of the operation
of sections 38 to 56 inclusive of the Pensions Act 2004 in relation to the
scheme;
(x) implemented or effected, or authorised or announced its intention to
implement or effect, any composition, assignment, reconstruction, amalgamation,
commitment, scheme or other transaction or arrangement (other than the
Acquisition) otherwise than in the ordinary course of business;
(xi) other than by a wholly-owned subsidiary of VT, purchased, redeemed or
repaid or announced any proposal to purchase, redeem or repay any of its own
shares or other securities or reduced or, save in respect of the matters
mentioned in sub-paragraph (i) above, made any other change to any part of its
share capital to an extent which (other than in the case of VT) is material in
the context of the VT Group;
(xii) waived or compromised any claim otherwise than in the ordinary course
of business which is material in the context of the VT Group taken as a whole;
(xiii) made any material alternation to its memorandum or articles of
association or other incorporation documents;
(xiv) other than in respect of a body corporate which was dormant and solvent
at the relevant time, taken or proposed any corporate action or had any legal
proceedings instituted or threatened in writing against it for its winding up
(voluntary or otherwise), dissolution, reorganisation or for the appointment of
any administrator, receiver, manager, administrative receiver, trustee or
similar officer of all or any of its assets or revenues or any analogous
proceedings in any jurisdiction or appointed any analogous person in any
jurisdiction or had any such person appointed;
(xv) been unable, or admitted in writing that it is unable, to pay its debts
or commenced negotiations with one or more of its creditors with a view to
rescheduling or restructuring any of its indebtedness, or having stopped or
suspended (or threatened to stop or suspend) payment of its debts generally or
ceased or threatened to cease carrying on all or a substantial part of its
business; or
(xvi) entered into any contract, commitment, agreement or arrangement
otherwise than in the ordinary course of business or passed any resolution or
made any offer (which remains open for acceptance) with respect to, or announced
an intention to, effect any of the transactions, matters or events referred to
in this condition;
(j) except as fairly disclosed in (1) the annual report and
accounts of VT for the year ended 31 March 2009, (2) the interim results of VT
for the half year ended 30 September 2009, (3) the annual report and accounts of
Babcock for the year ended 31 March 2009, (4) the interim results of Babcock for
the half year ended 30 September 2009, (5) as publicly announced to a Regulatory
Information Service by or on behalf of VT or Babcock or (6) as fairly disclosed
in writing by or on behalf of VT or Babcock to the other prior to the date of
this announcement, in respect of Babcock in relation to paragraph (i) only:
(i) there having been no adverse change in the business, assets,
financial or trading position or profits or operational performance of any
member of the Wider VT Group or the Wider Babcock Group (as appropriate) to an
extent which is material to the VT Group taken as a whole or the Babcock Group
taken as a whole (as appropriate);
(ii) no litigation, arbitration proceedings, prosecution or other legal
proceedings having been threatened, announced or instituted by or against or
remaining outstanding against any member of the Wider VT Group or to which any
member of the Wider VT Group is or may become a party (whether as claimant or
defendant or otherwise) and no enquiry or investigation by, or complaint or
reference to, any Third Party against or in respect of any member of the Wider
VT Group having been threatened, announced or instituted by or against, or
remaining outstanding in respect of, any member of the Wider VT Group which, in
any such case, might reasonably be expected materially and adversely to affect
the VT Group taken as a whole;
(iii) no contingent or other liability having arisen or become known to
Babcock which would or would reasonably be expected to adversely affect the
business, assets, financial or trading position or of any member of the Wider VT
Group to an extent which is material to the VT Group taken as a whole; and
(iv) no steps having been taken and no omissions having been made which are
likely to result in the withdrawal, cancellation, termination or modification of
any licence held by any member of the Wider VT Group, which is necessary for the
proper carrying on of its business and which is material in the context of the
VT Group taken as a whole;
(k) except as fairly disclosed in the annual report and accounts of
VT for the year ended 31 March 2009 or the interim results of VT for the half
year ended 30 September 2009 or as publicly announced to a Regulatory
Information Service by or on behalf of VT or as fairly disclosed in writing by
or on behalf of VT to Babcock prior to the date of this announcement, Babcock
not having discovered:
(i) that any financial, business or other information concerning the
Wider VT Group publicly disclosed or disclosed to any member of the Wider
Babcock Group at any time by or on behalf of any member of the Wider VT Group
which is material in the context of the VT Group taken as a whole is misleading
to a material extent, contains a material misrepresentation of fact or omits to
state a fact necessary to make that information not misleading to a material
extent;
(ii) that any member of the Wider VT Group is subject to any liability,
contingent or otherwise, which is not disclosed in the annual report and
accounts of VT for the year ended 31 March 2009 or the interim results of VT for
the half year ended 30 September 2009, and which is material in the context of
the VT Group taken as a whole; or
(iii) any information which affects the import of any information disclosed
to Babcock at any time before the date of this announcement by or on behalf of
any member of the Wider VT Group which is material in the context of the VT
Group taken as a whole; and
(l) except as disclosed in writing to Babcock prior to this
announcement, Babcock not having discovered:
(i) that any past or present member of the Wider VT Group has not
complied with all applicable legislation or regulations of any jurisdiction or
any Authorisations relating to the storage, carriage, disposal, discharge,
spillage, leak or emission of any waste or hazardous substance or any substance
likely to impair the environment (including property) or harm human health or
otherwise relating to environmental matters or the health and safety of humans,
which non-compliance would be likely to give rise to any material liability
including any penalty for non-compliance (whether actual or contingent) on the
part of any member of the Wider VT Group; or
(ii) that there is or is likely to be any liability (whether actual or
contingent) or requirement to make good, remediate, repair, re-instate or clean
up any property or asset currently or previously owned, occupied or made use of
by any past or present member of the Wider VT Group (or on its behalf), under
any environmental legislation, common law, regulation, notice, circular,
Authorisation, other legally binding requirement or order of any Third Party in
any such case to an extent which is material in the context of the VT Group.
5. Subject to the requirements of the Panel in accordance with the
Takeover Code, Babcock shall have the right to invoke any of the above
Conditions (save for Conditions 4(i)(i), 4(i)(ii), 4(i)(iii), 4(i)(ix) or
4(j)(i) which in each case Babcock shall only be able to invoke to the extent
that such Conditions relate to VT) and Babcock reserves the right to waive, in
whole or in part, all or any of the above Conditions, except Conditions 1, 2 and
3, and to the extent that such Conditions relate to VT, Conditions 4(i)(i),
4(i)(ii), 4(i)(iii), 4(i)(ix) or 4(j)(i).
6. Subject to the requirements of the Panel in accordance with the
Takeover Code, VT shall have the right to invoke any of Conditions 4(i)(i),
4(i)(ii), 4(i)(iii), 4(i)(ix) or 4(j)(i) in each case only to the extent that
such Conditions relate to Babcock and reserves the right to waive, in whole or
in part, all or any of such Conditions.
7. If Babcock is required by the Panel to make an offer for VT Shares
under the provisions of Rule 9 of the Takeover Code, Babcock may make such
alterations to the terms and conditions of the Acquisition as are necessary to
comply with the provisions of that Rule.
PART B
Further Terms of the Acquisition
8. Babcock reserves the right to elect to implement the Acquisition by
way of a takeover offer as an alternative to the Scheme. In such event, the
Acquisition will be implemented on the same terms (subject to appropriate
amendments) of the shares to which the Acquisition relates and those required
by, or deemed appropriate by, Babcock under applicable law, so far as
applicable) as those which would apply to the Scheme. Further, if sufficient
acceptances of such offer are received and/or sufficient VT Shares are otherwise
acquired, it is the intention of Babcock to apply the provisions of the
Companies Act 2006 to require compulsorily any outstanding VT Shares to which
such offer relates.
9. The Acquisition will not proceed if, after the date of this
announcement and before the VT General Meeting, the acquisition is referred to
the UK Competition Commission.
10. The Acquisition will be governed by English law and be subject to
the jurisdiction of the English courts, and to the Conditions set out in this
announcement and in the Scheme Document.
APPENDIX 2
sources and bases of information
Save as otherwise stated, the following constitute the sources and bases of
certain information referred to in this announcement:
1. Financial information relating to Babcock has been extracted or provided
(without material adjustment) from the audited annual report and accounts for
Babcock for the year ended 31 March 2009 and/or the unaudited interim results
for the half year ended 30 September 2009.
2. Financial information relating to VT has been extracted or provided
(without material adjustment) from the audited annual report and accounts for VT
for the year ended 31 March 2009 and/or the unaudited interim results for the
half year ended 30 September 2009.
3. The terms of the Acquisition value the entire issued ordinary share capital
of VT at GBP1,326 million, based on (i) the Closing Price of 532.5 pence per
Babcock Share on 22 March 2010, being the last practicable date prior to this
announcement, and (ii) 180,409,726 VT Shares being in issue as at 22 March 2010.
4. The percentage of shares expected to be held by VT Shareholders in the
Combined Group is based on approximately 126.5million Consideration Shares being
issued pursuant to the Acquisition and 229,641,704 Babcock Shares currently in
issue as at 22 March 2010 (but excludes any Consideration Shares in respect of
VT Shares to be issued under the VT Share Schemes).
5. The number of Consideration Shares to be issued pursuant to the Acquisition
is based on 180,409,726 VT Shares in issue as at 22 March 2010 (but excludes any
Consideration Shares in respect of VT Shares to be issued under the VT Share
Schemes).
6. The combined order book value of approximately GBP10 billion is based on
Interim Management Statements released by Babcock and VT on 2 February 2010 and
28 January 2010 respectively.
7. The expected net debt to EBITDA ratio of approximately 2.9 times at the
time of completion of the Acquisition is based on consensus analyst reporting
for each of Babcock and VT, sourced from Bloomberg on 22 March 2010.
APPENDIX 3
1. Directors
The following VT Directors have given irrevocable undertakings to vote in favour
of the resolutions relating to the Acquisition at the Scheme Meeting and VT
General Meeting in respect of their own beneficial holdings (or those VT Shares
over which they have control) of VT Shares:
+------------+---------+------------+
| Name | Total | Percentage |
| | Number | of |
| | of | existing |
| | VT | issued |
| | Shares | share |
| | | capital |
+------------+---------+------------+
| Michael | 50,000 | 0.028 |
| Jeffries | | |
+------------+---------+------------+
| Paul | 234,682 | 0.130 |
| Lester | | |
+------------+---------+------------+
| Chris | 123,751 | 0.069 |
| Cundy | | |
+------------+---------+------------+
| Philip | 4,573 | 0.003 |
| Harrison | | |
+------------+---------+------------+
| Andrew | 3,000 | 0.002 |
| Given | | |
+------------+---------+------------+
| David | 10,000 | 0.006 |
| Barclay | | |
+------------+---------+------------+
| Baroness | 6,942 | 0.004 |
| Blackstone | | |
+------------+---------+------------+
| Admiral | 3,200 | 0.002 |
| the | | |
| Lord | | |
| Michael | | |
| Boyce | | |
+------------+---------+------------+
| Ian | Nil | Nil |
| Tyler | | |
+------------+---------+------------+
APPENDIX 4
DEFINITIONS
The following definitions apply throughout this announcement unless the context
otherwise requires:
+----------------------------+---------------------------------+----------+
| "2006 Act" | the Companies Act 2006, as amended and for |
| | the time being in force |
+----------------------------+--------------------------------------------+
| "Acquisition" | the recommended acquisition by Babcock of |
| | all the VT Shares to be effected by means |
| | of the Scheme or, should Babcock so elect, |
| | by means of an Offer, on the terms and |
| | subject to the conditions set out in the |
| | Scheme Document or, if applicable, the |
| | Offer Document |
+----------------------------+--------------------------------------------+
| "Admission" | the admission of the New Babcock Shares by |
| | the FSA (in its capacity as the UK Listing |
| | Authority) to the Official List and to |
| | trading on the London Stock Exchange |
+----------------------------+--------------------------------------------+
| "Alternative Offer" | (a) an offer or possible offer by |
| | any third party for all or substantially |
| | all the issued share capital of VT; |
+----------------------------+--------------------------------------------+
| | (b) the sale, or possible sale, of |
| | the whole or any material part of the |
| | assets or undertaking of the VT Group; or |
+----------------------------+--------------------------------------------+
| | (c) any other transaction which |
| | would, if implemented, result in a change |
| | of control of VT; |
+----------------------------+--------------------------------------------+
| | in each case, howsoever it is proposed |
| | that such offer, proposal or transaction |
| | be implemented (whether, without |
| | limitation, by way of scheme of |
| | arrangement, merger, business combination, |
| | dual listed company structure or |
| | otherwise) |
+----------------------------+--------------------------------------------+
| "Australia" | the Commonwealth of Australia and its |
| | dependant territories |
+----------------------------+--------------------------------------------+
| "Authorisations" | authorisations, orders, grants, |
| | recognitions, confirmations, consents, |
| | licences, clearances, certificates, |
| | permissions or approvals |
+----------------------------+--------------------------------------------+
| "Babcock" | Babcock International Group PLC, |
| | incorporated in England and Wales with |
| | registered number 02342138 |
+----------------------------+--------------------------------------------+
| "Babcock Circular" | the circular to be sent to Babcock |
| | Shareholders in connection with the |
| | Acquisition |
+----------------------------+--------------------------------------------+
| "Babcock Board" or | the board of directors of Babcock |
| "Babcock Directors" | |
+----------------------------+--------------------------------------------+
| "Babcock General Meeting" | the extraordinary general meeting of |
| | Babcock to be convened to consider, and if |
| | thought fit, approve the Babcock |
| | Resolution |
+----------------------------+--------------------------------------------+
| "Babcock Group" | Babcock, its subsidiaries and subsidiary |
| | undertakings |
+----------------------------+--------------------------------------------+
| "Babcock Resolution" | the ordinary resolution to be proposed at |
| | the Babcock General Meeting (and set out |
| | in the notice of general meeting to be |
| | contained in the Babcock Circular) to, |
| | among other matters, approve the |
| | Acquisition and authorise the Babcock |
| | Directors to allot the New Babcock Shares |
+----------------------------+--------------------------------------------+
| "Babcock Share(s)" | the ordinary shares of 60 pence each in |
| | the capital of Babcock |
+----------------------------+--------------------------------------------+
| "Babcock Shareholders" | holders of Babcock Shares |
+----------------------------+--------------------------------------------+
| "Business Day" | a day (other than a Saturday, Sunday, |
| | public or bank holiday) on which banks are |
| | generally open for business in London |
+----------------------------+--------------------------------------------+
| "Canada" | Canada, its provinces and territories and |
| | all areas subject to its jurisdiction or |
| | any political sub-division thereof |
+----------------------------+--------------------------------------------+
| "Capital Reduction" | the proposed reduction of VT's share |
| | capital in connection with the Scheme |
| | under section 648 of the 2006 Act, |
| | including the cancellation and the |
| | extinguishing of the Scheme Shares |
| | provided for by the Scheme |
+----------------------------+--------------------------------------------+
| "CFIUS" | the Committee on Foreign Investment in the |
| | United States |
+----------------------------+--------------------------------------------+
| "Closing Price" | the closing middle market price of a |
| | relevant share as derived from SEDOL on |
| | any particular day |
+----------------------------+--------------------------------------------+
| "Combined Group" | with effect from the Effective Date, the |
| | combined Babcock Group and VT Group |
+----------------------------+--------------------------------------------+
| "Conditions" | the conditions to the implementation of |
| | the Acquisition (including the Scheme), |
| | which are set out in Appendix 1 of this |
| | announcement |
+----------------------------+--------------------------------------------+
| "Consideration Shares" | the new Babcock Shares to be issued and |
| | credited as fully paid to VT Shareholders |
| | pursuant to the Acquisition |
+----------------------------+--------------------------------------------+
| "Court" | the High Court of Justice in England and |
| | Wales |
+----------------------------+--------------------------------------------+
| "Court Orders" | the First Court Order and the Second Court |
| | Order |
+----------------------------+--------------------------------------------+
| "Effective" | (i) if the Acquisition is |
| | implemented by way of the Scheme, the |
| | Scheme having become effective pursuant to |
| | its terms; or |
+----------------------------+--------------------------------------------+
| | (ii) if the Acquisition is |
| | implemented by way of an Offer, such Offer |
| | having been declared or become |
| | unconditional in all respects in |
| | accordance with the requirements of the |
| | Takeover Code |
+----------------------------+--------------------------------------------+
| "Effective Date" | the date on which the Acquisition becomes |
| | Effective |
+----------------------------+--------------------------------------------+
| "Evercore Partners" | Evercore Partners Limited |
+----------------------------+--------------------------------------------+
| "Exon-Florio Amendment" | Section 721 of the Defense Production Act |
| | of 1950, 50 U.S.C. app. *2170, as amended, |
| | including the Foreign Investment and |
| | National Security Act of 2007, Pub. L. |
| | 110-49, 121 Stat.246. |
+----------------------------+--------------------------------------------+
| "First Court Order" | the order of the Court sanctioning the |
| | Scheme under section 899 of the 2006 Act |
+----------------------------+--------------------------------------------+
| "FSA" | the United Kingdom Financial Services |
| | Authority |
+----------------------------+--------------------------------------------+
| "Implementation Agreement" | the implementation agreement entered into |
| | by Babcock and VT on 23 March 2010, |
| | governing the implementation of the |
| | Acquisition |
+----------------------------+--------------------------------------------+
| "Japan" | Japan, its cities, prefectures, | |
| | territories and possessions | |
+----------------------------+---------------------------------+----------+
| "J.P. Morgan Cazenove" | J.P. Morgan plc | |
+----------------------------+---------------------------------+----------+
| "Listing Rules" | the listing rules made by the | |
| | FSA under section 73A of the | |
| | Financial Services and Markets | |
| | Act 2000 | |
+----------------------------+---------------------------------+----------+
| "London Stock Exchange" | the London Stock Exchange PLC | |
| | or its successor | |
+----------------------------+---------------------------------+----------+
| "LSE Admission Standards" | the rules issued by the London | |
| | Stock Exchange in relation to | |
| | the admission to trading of, | |
| | and continuing requirements | |
| | for, securities admitted to | |
| | trading on the London Stock | |
| | Exchange's market for listed | |
| | securities | |
+----------------------------+---------------------------------+----------+
| "Merrill Lynch" | Merrill Lynch International | |
+----------------------------+---------------------------------+----------+
| "Mix and Match Facility" | the mix and match facility | |
| | under which VT Shareholders | |
| | (other than certain overseas | |
| | shareholders) may elect, | |
| | subject to equal and opposite | |
| | elections made by other VT | |
| | Shareholders, to vary the | |
| | proportions in which they | |
| | receive Consideration Shares | |
| | and cash under the Acquisition | |
+----------------------------+---------------------------------+----------+
| "MoD" | the UK's Ministry of Defence | |
+----------------------------+---------------------------------+----------+
| "New Babcock Shares" | the Consideration Shares | |
+----------------------------+---------------------------------+----------+
| "Offer" | a takeover offer as that term | |
| | is defined in section 974 of | |
| | the 2006 Act | |
+----------------------------+---------------------------------+----------+
| "Offer Document" | should Babcock decide to | |
| | implement the Acquisition by | |
| | way of an Offer, the document | |
| | which would be dispatched to VT | |
| | Shareholders containing and | |
| | setting out the terms and | |
| | conditions of the Offer | |
+----------------------------+---------------------------------+----------+
| "Official List" | the Official List of the UKLA | |
+----------------------------+---------------------------------+----------+
| "OFT" | the UK's Office of Fair Trading | |
+----------------------------+---------------------------------+----------+
| "Panel" | the Panel on Takeovers and | |
| | Mergers | |
+----------------------------+---------------------------------+----------+
| "pence" and "GBP" | the lawful currency of the | |
| | United Kingdom | |
+----------------------------+---------------------------------+----------+
| "Prospectus" | the prospectus relating to | |
| | Babcock and the listing of the | |
| | New Babcock Shares on the | |
| | Official List (together with | |
| | any supplements or amendments | |
| | thereto) | |
+----------------------------+---------------------------------+----------+
| "register" | the statutory register of | |
| | members of Babcock or VT, as | |
| | applicable | |
+----------------------------+---------------------------------+----------+
| "Registrar of Companies" | the Registrar of Companies for | |
| | England and Wales, within the | |
| | meaning of the 2006 Act | |
+----------------------------+---------------------------------+----------+
| "Regulation S" | Regulation S under the US | |
| | Securities Act | |
+----------------------------+---------------------------------+----------+
| "Regulatory Information | one of the regulatory | |
| Service" | information services authorised | |
| | by the UKLA to receive, | |
| | process, and disseminate | |
| | regulatory information from | |
| | listed companies | |
+----------------------------+---------------------------------+----------+
| "Reorganisation Record | the time and date specified as | |
| Time" | such in the Scheme Document, | |
| | expected to be 6.00 p.m. on the | |
| | Business Day immediately | |
| | preceding the Second Court | |
| | Hearing | |
+----------------------------+---------------------------------+----------+
| "Rothschild" | N M Rothschild & Sons Limited | |
+----------------------------+---------------------------------+----------+
| "Scheme" | the proposed scheme of | |
| | arrangement of VT under Part 26 | |
| | of the 2006 Act to implement | |
| | the Acquisition, with or | |
| | subject to any modification, | |
| | addition or condition thereto | |
| | approved or imposed by the | |
| | Court and agreed by Babcock and | |
| | VT | |
+----------------------------+---------------------------------+----------+
| "Scheme Document" | the document to be dispatched | |
| | to VT Shareholders in relation | |
| | to the Scheme including, | |
| | amongst other things, the | |
| | particulars required by section | |
| | 897 of the 2006 Act and the | |
| | notices of the Scheme Meeting | |
| | and the VT General Meeting | |
+----------------------------+---------------------------------+----------+
| "Scheme Meeting" | the meeting of the Scheme | |
| | Shareholders to be convened by | |
| | an order of the Court under | |
| | section 896 of the 2006 Act to | |
| | consider and, if thought fit, | |
| | approve the Scheme (with or | |
| | without amendment) and any | |
| | adjournment thereof | |
+----------------------------+---------------------------------+----------+
| "Scheme Shareholders" | the holders of the Scheme | |
| | Shares | |
+----------------------------+---------------------------------+----------+
| "Scheme Shares" | (a) the VT Shares in | |
| | issue at the date of the Scheme | |
| | Document; | |
+----------------------------+---------------------------------+----------+
| | (b) any VT Shares | |
| | issued after the date of the | |
| | Scheme Document but before the | |
| | Scheme Voting Record Time; and | |
+----------------------------+---------------------------------+----------+
| | (c) any VT Shares | |
| | issued at or after the Scheme | |
| | Voting Record Time but before | |
| | the Reorganisation Record Time | |
| | in respect of which the | |
| | original or any subsequent | |
| | holders thereof are, or shall | |
| | have agreed in writing to be, | |
| | bound by the Scheme, | |
+----------------------------+---------------------------------+----------+
| | in each case other than any VT | |
| | Shares beneficially owned by | |
| | Babcock or any subsidiary | |
| | undertaking of Babcock | |
+----------------------------+---------------------------------+----------+
| "Scheme Voting Record | the time and date specified in | |
| Time" | the Scheme Document by | |
| | reference to which entitlement | |
| | to vote on the Scheme will be | |
| | determined, expected to be 6.00 | |
| | p.m. on the second day before | |
| | the Scheme Meeting or, if the | |
| | Scheme Meeting is adjourned, | |
| | 6.00 p.m. on the second day | |
| | before the date of such | |
| | adjourned Scheme Meeting | |
+----------------------------+---------------------------------+----------+
| "Second Court Hearing" | the hearing by the Court to | |
| | confirm the Capital Reduction | |
+----------------------------+---------------------------------+----------+
| "Second Court Order" | the order of the Court | |
| | confirming the Capital | |
| | Reduction | |
+----------------------------+---------------------------------+----------+
| "SEDOL" | the Stock Exchange Daily | |
| | Official List | |
+----------------------------+---------------------------------+----------+
| "subsidiary", "subsidiary | shall be construed in | |
| undertaking", "associated | accordance with the 2006 Act | |
| undertaking" and | | |
| "undertaking" | | |
+----------------------------+---------------------------------+----------+
| "Takeover Code" or "Code" | the City Code on Takeover and | |
| | Mergers | |
+----------------------------+---------------------------------+----------+
| "UK" or "United Kingdom" | United Kingdom of Great Britain | |
| | and Northern Ireland | |
+----------------------------+---------------------------------+----------+
| "UK Listing Authority" or | the FSA in its capacity as the | |
| "UKLA" | competent authority for the | |
| | purposes of Part VI of the | |
| | Financial Services and Markets | |
| | Act 2000 | |
+----------------------------+---------------------------------+----------+
| "United States" or "US" | the United States of America | |
| | (including the states of the | |
| | United States and the District | |
| | of Columbia), its possessions | |
| | and territories and all areas | |
| | subject to its jurisdiction | |
+----------------------------+---------------------------------+----------+
| "US Securities Act" | the US Securities Act of 1933, | |
| | as amended, and the rules and | |
| | regulations promulgated | |
| | thereunder | |
+----------------------------+---------------------------------+----------+
| "VT" | VT Group plc, incorporated in | |
| | England and Wales with | |
| | registered number 1915771 | |
+----------------------------+---------------------------------+----------+
| "VT Board" or "VT | the board of directors of VT | |
| Directors" | | |
+----------------------------+---------------------------------+----------+
| "VT General Meeting" | the general meeting of VT | |
| | Shareholders to be convened to | |
| | consider and, if thought fit, | |
| | approve certain resolutions | |
| | required to implement the | |
| | Scheme (including any | |
| | adjournment thereof) | |
+----------------------------+---------------------------------+----------+
| "VT Group" | VT, its subsidiaries and | |
| | subsidiary undertakings | |
+----------------------------+---------------------------------+----------+
| "VT Shareholder(s)" | holders of VT Shares | |
+----------------------------+---------------------------------+----------+
| "VT Share(s)" | the ordinary shares of 5 pence | |
| | each in the capital of VT | |
+----------------------------+---------------------------------+----------+
| "VT Share Schemes" | the VT Group Deferred Annual | |
| | Bonus Scheme; the VT Group 2007 | |
| | Performance Share Plan; the | |
| | Vosper Thorneycroft Executive | |
| | Share Option Plan 1996; the | |
| | Vosper Thorneycroft Approved | |
| | Executive Share Option Plan | |
| | 1999; the VT Group Share | |
| | Incentive Plan; the VT Group | |
| | 2008 Sharesave Plan; the Vosper | |
| | Thorneycroft Sharesave Scheme | |
| | 1998 and the VT Group US | |
| | Sharesave Plan | |
+----------------------------+---------------------------------+----------+
| "Wider Babcock Group" | Babcock Group and associated | |
| | undertakings and any other body | |
| | corporate, partnership, joint | |
| | venture or person in which | |
| | Babcock and such undertakings | |
| | (aggregating their interests) | |
| | have an interest of more than | |
| | 20 per cent. of the voting or | |
| | equity capital or the | |
| | equivalent | |
+----------------------------+---------------------------------+----------+
| "Wider VT Group" | VT and associated undertakings | |
| | and any other body corporate, | |
| | partnership, joint venture or | |
| | person in which VT and such | |
| | undertakings (aggregating their | |
| | interests) have an interest of | |
| | more than 20 per cent. of the | |
| | voting or equity capital or the | |
| | equivalent | |
+----------------------------+---------------------------------+----------+
All times referred to are London time unless otherwise stated.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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