TIDMCOST TIDMMAYG
RNS Number : 9530A
Costain Group PLC
26 March 2013
Not for release, publication or distribution, in whole or in
part, in or into any Restricted Jurisdictions or any other
jurisdiction where to do so would constitute a violation of the
relevant laws of such jurisdiction.
26 March 2013
Recommended all-share merger
of Costain Group PLC and May Gurney Integrated Services plc
Highlights
-- The Boards of Costain Group PLC ('Costain') and May Gurney
Integrated Services plc ('May Gurney') are pleased to announce that
they have reached agreement on the terms of a recommended all-share
merger of Costain and May Gurney, which is to be implemented by way
of a scheme of arrangement of May Gurney pursuant to which Costain
will acquire the entire issued and to be issued ordinary share
capital of May Gurney.
-- Upon the Merger becoming effective, Costain, whose shares
will continue to have a premium listing and to be traded on the
London Stock Exchange's Main Market for listed securities, will be
renamed 'Costain May Gurney PLC'.
-- Each May Gurney Shareholder will receive 0.8275 New Costain
Shares for every Scheme Share held, resulting in Costain
Shareholders holding approximately 53% and May Gurney Shareholders
holding approximately 47% of the issued share capital of Costain at
the time the Merger becomes effective.
-- The Merger will bring together two businesses with
complementary service offerings to create one of the UK's leading
integrated services providers to the rail, highways, water, waste,
airports, hydrocarbons, power, nuclear, local government and fleet
management sectors.
-- The Boards of Costain and May Gurney believe that the Combined Group will have:
- a focus on delivering innovative and cost-effective solutions
to address essential national needs in the sectors in which Costain
and May Gurney operate;
- a larger addressable market, with a combined client base
across the private sector, central and local government and
regulated industries;
- an enhanced range of capabilities to meet customers' changing demands;
- the ability to benefit from the respective strengths of the
Costain and May Gurney brands, which will continue to be used as
required by customers;
- greater financial strength and scale, increasing the
opportunity to bid for larger, more complex and multi-disciplinary
contracts;
- the opportunity to leverage the best talent of the Costain Group and the May Gurney Group;
- significant earnings visibility underpinned by long term
contracts and a combined order book of approximately GBP3.9
billion; and
- combined revenues of approximately GBP1.6 billion per annum.
-- Based on its preliminary analysis, the Board of Costain
believes that the Combined Group should be able to achieve
recurring annual pre-tax cost synergies of approximately GBP10
million as a result of the Merger, primarily through savings
stemming from the consolidation of corporate functions and shared
services, with approximately GBP7.5 million expected to be realised
in the financial year ending 31 December 2014 and the full GBP10
million in the financial year ending 31 December 2015.
-- Post synergies, the Costain Directors expect the Merger to be
double digit earnings enhancing[1] for Costain for the financial
year ending 31 December 2014.[2]
1 Before amortisation of acquired intangibles,
employment-related deferred consideration and integration
costs.
2 Neither this statement nor the statements in the preceding
paragraph relating to cost synergies are intended as profit
forecasts. They should not be interpreted to mean that earnings per
Costain Share or May Gurney Share for the current or future
financial years would necessarily match or exceed the historical
published earnings per Costain Share or May Gurney Share.
-- The Combined Group will have a proven management team led by
the current Costain CEO, Andrew Wyllie, as the Combined Group CEO
and the current Costain Finance Director, Tony Bickerstaff, as the
Combined Group Finance Director.
-- David Allvey will be the Chairman of the Combined Group and
Baroness Margaret Ford will be the Deputy Chairman. Following the
Merger becoming effective, the Board of Costain will include all of
the current Non-executive Directors of Costain and May Gurney, and
Ishbel Macpherson, currently the Senior Independent Director of May
Gurney, will be the Senior Independent Director of the Combined
Group.
-- The Combined Group's headquarters and registered office will
be located at Costain's office in Maidenhead. May Gurney's office
in Trowse in Norfolk will be retained as a shared services centre
and the operational office for the Combined Group's hub in East
Anglia.
-- May Gurney intends to declare a second interim dividend of
5.6 pence per May Gurney Share in lieu of a final dividend for the
year ending 31 March 2013. This dividend, which will be conditional
upon the Merger becoming effective, will be paid after the
Effective Date to May Gurney Shareholders on the register of
members at the Scheme Record Time.
-- On 6 March 2013 the Board of Costain announced that it was
recommending, subject to Costain Shareholder approval, a final
dividend of 7.25 pence per Costain Share in respect of the
financial year ended 31 December 2012. If approved, the final
dividend will be paid on 24 May 2013 to Costain Shareholders on the
register of members as at the close of business on 19 April 2013.
The New Costain Shares to be issued pursuant to the Merger will not
carry any entitlement to the Costain final dividend in respect of
the financial year ended 31 December 2012.
-- The Merger is conditional on, amongst other things, the
approval of Costain Shareholders and May Gurney Shareholders.
-- Costain has received:
- irrevocable undertakings from the May Gurney Directors who
hold May Gurney Shares and from David and Wendy Sterry (acting as
trustees of various trusts), Artemis Investment Management LLP,
Polar Capital LLP, Invesco Asset Management Limited and May Gurney
Group Trustees Limited (acting as trustee of the May Gurney Group
Limited Employee Share Ownership Trust) to vote, or procure the
vote, in favour of (or to return, or procure the return of, Forms
of Proxy voting in favour of) the Scheme at the Court Meeting and
the Special Resolution to be proposed at the May Gurney General
Meeting, in respect of a total of 19,225,681 May Gurney Shares,
representing approximately 27.37% of the issued share capital of
May Gurney on 25 March 2013 (being the latest practicable date
prior to this announcement); and
- a letter from Aviva Investors Global Services Limited (in its
capacity as investment manager for certain clients who hold May
Gurney Shares) confirming its intention to vote in favour of the
Scheme in respect of 3,623,051 May Gurney Shares, representing
approximately 5.16% of the issued share capital of May Gurney on 25
March 2013 (being the latest practicable date prior to this
announcement).
Costain has therefore received irrevocable undertakings or a
letter of intent in respect of a total of 22,848,732 May Gurney
Shares, representing, in aggregate, approximately 32.53% of the
issued share capital of May Gurney.
-- Costain has received irrevocable undertakings from the
Costain Directors who hold Costain Shares and from UEM Builders
Berhad and Mohammed Adbulmohsin Al Kharafi & Sons For General
Trading, General Contracting and Industrial Structures W.L.L. to
vote in favour of the resolutions to be proposed at the Costain
General Meeting to approve the Merger and related matters in
respect of a total of 27,968,604 Costain Shares, representing
approximately 42.67% of the issued share capital of Costain on 25
March 2013 (being the latest practicable date prior to this
announcement).
-- The Combined Circular/Prospectus, containing information
about the New Costain Shares and the Combined Group, as well as
details of the Merger and notice of the Costain General Meeting at
which, amongst other things, a resolution will be proposed for the
approval of the Merger by Costain Shareholders, has been published
today and will shortly be posted to Costain Shareholders. The
Combined Circular/Prospectus will be made available by Costain on
its website at www.costain.com and by May Gurney on its website at
www.maygurney.co.uk.
-- The Scheme Document, containing further information about the
Merger and notices of the Court Meeting and the May Gurney General
Meeting, will be posted to May Gurney Shareholders as soon as
practicable and within 28 days of the date of this announcement. It
is expected that the Scheme will become effective in early June
2013, subject to the satisfaction or waiver of the Conditions and
certain further terms set out in Appendix 1 to the full
announcement.
David Allvey, Non-executive Chairman of Costain, commented:
"The Costain strategy has been extremely clear: to become a
leader in the design, delivery and maintenance of national
infrastructure. The announcement today is a highly significant step
in that process. Together with May Gurney, we will have the added
experience and skills to underline our leadership status and to
provide a platform for new growth and success. We see this coming
together of two established UK companies as good news for all our
stakeholders. Our customers are increasingly demanding a broader
range of integrated services and this powerful combination will
enhance our status as a Tier One engineering solutions
provider."
Baroness Margaret Ford, Non-executive Chairman of May Gurney,
commented:
"May Gurney and Costain have highly complementary businesses.
The markets in which we operate offer tremendous opportunities for
future growth. The combination of our two companies and the strong
heritage we bring will position us very well to respond to those
opportunities. Our objective is to deliver even stronger
partnerships with our clients, superior returns for our
shareholders and increased opportunities for our staff."
The May Gurney Directors, who have been so advised by Canaccord
Genuity, consider the terms of the Merger to be fair and
reasonable. In providing advice to the May Gurney Directors,
Canaccord Genuity has taken into account the commercial assessments
of the May Gurney Directors. Accordingly, the May Gurney Directors
intend to recommend unanimously that May Gurney Shareholders vote
in favour of the Scheme at the Court Meeting and the Special
Resolution to be proposed at the May Gurney General Meeting as they
have irrevocably undertaken to do in respect of 61,865 May Gurney
Shares representing, in aggregate, approximately 0.09% of the
ordinary share capital of May Gurney in issue on 25 March 2013
(being the latest practicable date prior to this announcement).
The Costain Directors, who have received financial advice from
Rothschild, consider the terms of the Merger to be fair and
reasonable. In providing its advice, Rothschild has taken into
account the commercial assessments of the Costain Directors.
Accordingly, the Costain Directors intend to recommend unanimously
that Costain Shareholders vote in favour of the resolutions to be
proposed at the Costain General Meeting to approve the Merger and
related mattters, as they have irrevocably undertaken to do in
respect of 368,264 Costain Shares representing, in aggregate,
approximately 0.56% of the ordinary share capital of Costain in
issue on 25 March 2013 (being the latest practicable date prior to
this announcement).
The Merger will be subject to the Conditions and other terms set
out in this announcement and to the full terms and conditions which
will be set out in the Scheme Document. Appendix 2 to the full
announcement contains the bases and sources of certain information
contained in the announcement. Details of the irrevocable
undertakings and the letter of intent received by Costain are set
out in Appendix 3 to the full announcement. Certain terms used in
this announcement are defined in Appendix 4 to the full
announcement.
This summary should be read in conjunction with the following
full announcement and the Appendices.
There will be an investors' and analysts' presentation which
will start promptly at 9.30 a.m. (London time) tomorrow (Wednesday
27 March 2013). A dial-in facility will be available; please
contact Helen Tarbet of College Hill on +44 20 7457 2025 or via
helen.tarbet@collegehill.com for details.
Enquiries
Costain +44 (0)1628 842 444
Andrew Wyllie
Tony Bickerstaff
Graham Read
Rothschild (financial adviser to Costain) +44 (0)20 7280
5000
John Deans
Neil Thwaites
Investec Bank plc (broker to Costain) +44 (0)20 7597 5970
David Currie
James Rudd
College Hill (PR adviser to Costain) +44 (0)20 7457 2020
Mark Garraway +44 (0)77 7186 0938
Helen Tarbet +44 (0)78 2560 9737
May Gurney +44 (0)1603 727 272
Mark Hazlewood
Willie MacDiarmid
Canaccord Genuity (financial adviser to May Gurney) +44 (0)20 7665 4500
Chris Robinson
Peter Stewart
Peel Hunt LLP (broker and nominated adviser to May Gurney) +44 (0)20 7418 8900
Julian Blunt
Mike Bell
Citigate Dewe Rogerson (PR adviser to May Gurney) +44 (0)20 7638 9571
Ginny Pulbrook +44 (0)20 7282 2945
Angharad Couch +44 (0)20 7282 2941
Further Information
This announcement is not intended to and does not constitute or
form part of any offer to sell or subscribe for or any invitation
to purchase or subscribe for any securities or the solicitation of
any vote or approval in any jurisdiction pursuant to the Merger or
otherwise. The Merger will be effected solely by means of the
Scheme Document which, together with the Forms of Proxy, will
contain the full terms and conditions of the Merger including
details of how to vote in respect of the Merger.
The Combined Circular/Prospectus has been published today and
will shortly be distributed in hard copy to Costain Shareholders.
The Combined Circular/Prospectus will be made available by Costain
on its website at www.costain.com and by May Gurney on its website
at www.maygurney.co.uk. May Gurney will prepare the Scheme Document
to be distributed to May Gurney Shareholders. May Gurney urges May
Gurney Shareholders to read the Combined Circular/Prospectus and
the Scheme Document because they contain important information in
relation to the Merger, the New Costain Shares and the Combined
Group. Costain urges Costain Shareholders to read the Combined
Circular/Prospectus because it contains important information in
relation to the Merger, the New Costain Shares and the Combined
Group. Any vote in respect of the Scheme or other response in
relation to the Merger should be made only on the basis of the
information contained in the Scheme Document and/or the Combined
Circular/Prospectus, as appropriate.
This announcement does not constitute a prospectus or prospectus
equivalent document.
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. In particular, the
ability of persons who are not resident in the United Kingdom to
vote their May Gurney Shares in respect of the Scheme at the Court
Meeting, or to execute and deliver Forms of Proxy appointing
another to vote at the Court Meeting on their behalf, may be
affected by the laws of the relevant jurisdictions in which they
are located. This announcement has been prepared for the purpose of
complying with English law and the City 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 of jurisdictions outside the United Kingdom.
Copies of this announcement and any formal documentation
relating to the Merger are not being, and must not be, directly or
indirectly, mailed or otherwise forwarded, distributed or sent in
or into or from any Restricted Jurisdiction and persons receiving
such documents (including custodians, nominees and trustees) must
not mail or otherwise forward, distribute or send them in or into
or from any Restricted Jurisdiction. If the Merger is implemented
by way of a Merger Offer (unless otherwise permitted by applicable
law and regulation), the Merger Offer may not be made, directly or
indirectly, in or into, or by the use of mails or any means or
instrumentality (including, but not limited to, facsimile, e-mail
or other electronic transmission, telex or telephone) of interstate
or foreign commerce of, or of any facility of a national, state or
other securities exchange of any Restricted Jurisdiction and the
Merger Offer may not be capable of acceptance by any such use,
means, instrumentality or facilities.
Notice to US investors in May Gurney: The Merger relates to the
shares of an English company and is being made by means of a scheme
of arrangement provided for under English company law. A
transaction effected by means of a scheme of arrangement is not
subject to the tender offer rules or the proxy solicitation rules
under the US Exchange Act. Accordingly, the Merger is subject to
the disclosure requirements and practices applicable in the United
Kingdom to schemes of arrangement which differ from the disclosure
requirements of United States tender offer and proxy solicitation
rules. If, in the future, Costain exercises the right to implement
the Merger by way of a takeover offer and decides to extend the
offer into the United States, the Merger Offer will be made in
compliance with applicable United States laws and regulations.
Financial information included (or incorporated by reference) in
this announcement and the Scheme Document has been or will have
been prepared in accordance with accounting standards applicable in
the United Kingdom that may not be comparable to financial
information of US companies or companies whose financial statements
are prepared in accordance with generally accepted accounting
principles in the United States.
It may be difficult for US holders of May Gurney Shares to
enforce their rights and any claim arising out of US federal laws,
since Costain and May Gurney are located in a non-US jurisdiction
and some or all of their officers and directors may be residents of
a non-US jurisdiction. US holders of May Gurney Shares may not be
able to sue a non-US company or its officers or directors in a
non-US court for violations of the US securities laws. Further, it
may be difficult to compel a non-US company and its affiliates to
subject themselves to a US court's judgement.
Please be aware that addresses, electronic addresses and certain
other information provided by May Gurney Shareholders, persons with
information rights and other relevant persons for the receipt of
communications from May Gurney may be provided to Costain during
the offer period as required under Section 4 of Appendix 4 of the
City Code.
Rothschild, which is authorised and regulated in the United
Kingdom by the FSA, is acting exclusively for Costain and no one
else in connection with the Merger and will not be responsible to
anyone other than Costain for providing the protections afforded to
clients of Rothschild or for providing advice in relation to the
Merger or any other matters referred to in this announcement.
Investec Bank plc, which is authorised and regulated in the
United Kingdom by the FSA, is acting as broker to Costain and
no-one else and will not be responsible to anyone other than
Costain for providing the protections afforded to its clients or
for providing advice in connection with the subject matter of this
announcement.
Canaccord Genuity Limited, which is authorised and regulated in
the United Kingdom by the FSA, is acting exclusively for May Gurney
and no one else in connection with the Merger and will not be
responsible to anyone other than May Gurney for providing the
protections afforded to clients of Canaccord Genuity or for
providing advice in relation to the Merger or any other matters
referred to in this announcement.
Peel Hunt LLP, which is authorised and regulated in the United
Kingdom by the FSA, is acting as nominated adviser and broker to
May Gurney and for no-one else in connection with the subject
matter of this announcement and will not be responsible to anyone
other than May Gurney for providing the protections afforded to its
clients or for providing advice to any other person in connection
with the subject matter of this announcement.
Cautionary note regarding forward-looking statements
This announcement contains certain forward-looking statements
with respect to the financial condition, results of operations and
business of May Gurney and certain plans and objectives of Costain
with respect thereto. These forward-looking statements can be
identified by the fact that they do not relate only to historical
or current facts. Forward-looking statements often use words such
as 'anticipate', 'target', 'expect', 'estimate', 'intend', 'plan',
'goal', 'believe', 'hope', 'aims', 'continue', 'will', 'may',
'should', 'would', 'could' or other words of similar meaning. These
statements are based on assumptions and assessments made by May
Gurney and/or Costain in light of their experience and their
perception of historical trends, current conditions, future
developments and other factors they believe appropriate. By their
nature, forward-looking statements involve risk and uncertainty
because they relate to events and depend on circumstances that will
occur in the future. The factors described in the context of such
forward-looking statements in this announcement could cause actual
results and developments to differ materially from those expressed
in or implied by such forward-looking statements. Although it is
believed that the expectations reflected in such forward-looking
statements are reasonable, no assurance can be given that such
expectations will prove to have been correct and persons reading
this announcement are therefore cautioned not to place undue
reliance on these forward-looking statements which speak only as at
the date of this announcement. Neither May Gurney nor Costain
assumes any obligation to update or correct the information
contained in this announcement (whether as a result of new
information, future events or otherwise), except as required by
applicable law.
There are several factors which could cause actual results to
differ materially from those expressed or implied in
forward-looking statements. Among such factors are changes in the
global, political, economic, business, competitive, market and
regulatory forces, future exchange and interest rates, changes in
tax rates and future business combinations or dispositions.
No profit forecasts or estimates
No statement in this announcement is intended as a profit
forecast or estimate for any period and no statement in this
announcement should be interpreted to mean that earnings or
earnings per ordinary share for Costain or May Gurney, as
appropriate, for the current or future financial years would
necessarily match or exceed the historical published earnings or
earnings per ordinary share for Costain or May Gurney, as
appropriate.
Dealing and Opening Position Disclosure requirements
Under Rule 8.3(a) of the City Code, any person who is interested
in 1% or more of any class of relevant securities of an offeree
company or of any paper offeror (being any offeror other than an
offeror in respect of which it has been announced that its offer
is, or is likely to be, solely in cash) must make an Opening
Position Disclosure following the commencement of the offer period
and, if later, following the announcement in which any paper
offeror is first identified.
An Opening Position Disclosure must contain details of the
person's interests and short positions in, and rights to subscribe
for, any relevant securities of each of: (i) the offeree company;
and (ii) any paper offeror(s). An Opening Position Disclosure by a
person to whom Rule 8.3(a) applies must be made by no later than
3.30 p.m. (London time) on the 10th business day following the
commencement of the offer period and, if appropriate, by no later
than 3.30 p.m. (London time) on the 10th business day following the
announcement in which any paper offeror is first identified.
Relevant persons who deal in the relevant securities of the offeree
company or of a paper offeror prior to the deadline for making an
Opening Position Disclosure must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the City Code, any person who is, or becomes,
interested in 1% or more of any class of relevant securities of the
offeree company or of any paper offeror must make a Dealing
Disclosure if the person deals in any relevant securities of the
offeree company or of any paper offeror. A Dealing Disclosure must
contain details of the dealing concerned and of the person's
interests and short positions in, and rights to subscribe for, any
relevant securities of each of (i) the offeree company and (ii) any
paper offeror, save to the extent that these details have
previously been disclosed under Rule 8. A Dealing Disclosure by a
person to whom Rule 8.3(b) applies must be made by no later than
3.30 p.m. (London time) on the business day following the date of
the relevant dealing. If two or more persons act together pursuant
to an agreement or understanding, whether formal or informal, to
acquire or control an interest in relevant securities of an offeree
company or a paper offeror, they will be deemed to be a single
person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree
company and by any offeror and Dealing Disclosures must also be
made by the offeree company, by any offeror and by any persons
acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Panel's website at www.thetakeoverpanel.org.uk, including
details of the number of relevant securities in issue, when the
offer period commenced and when any offeror was first identified.
If you are in any doubt as to whether you are required to make an
Opening Position Disclosure or a Dealing Disclosure, you should
contact the Panel's Market Surveillance Unit on +44 (0) 20 7638
0129.
Rule 2.10 disclosure
In accordance with Rule 2.10 of the City Code, Costain confirms
that, as at the date of this announcement, it has 65,544,306
ordinary shares of 50 pence each in issue with ISIN GB00B64NSP76
and May Gurney confirms that, as at the date of this announcement,
it has 70,236,016 ordinary shares of 5 pence each in issue with
ISIN GB00B1528L44.
Publication on website
A copy of this announcement will be available free of charge,
subject to certain restrictions relating to persons resident in
Restricted Jurisdictions, on Costain's website at www.costain.com
and on May Gurney's website at www.maygurney.co.uk by no later than
noon (London time) on the day following this announcement. For the
avoidance of doubt, the contents of those websites are not
incorporated into and do not form part of this announcement.
You may request a hard copy of this announcement (and any
information incorporated by reference in this announcement) by
contacting Laurence Whyatt of Investec Bank plc at
Laurence.Whyatt@Investec.co.uk or by submitting a request in
writing to Laurence Whyatt at Investec Bank plc, 2 Gresham Street,
London, EC2V 7QP or Mike Bell of Peel Hunt LLP at
mike.bell@peelhunt.com or by submitting a request in writing to
Mike Bell at Peel Hunt LLP, Moor House, 120 London Wall, London,
EC2Y 5ET. It is important that you note that unless you make such a
request, a hard copy of this announcement and any such information
incorporated by reference in it will not be sent to you. You may
also request that all future documents, announcements and
information to be sent to you in relation to the Merger should be
in hard copy form.
Not for release, publication or distribution, in whole or in
part, in or into any Restricted Jurisdiction or any other
jurisdiction where to do so would constitute a violation of the
relevant laws of such jurisdiction.
Recommended all-share merger of
Costain Group PLC and May Gurney Integrated Services plc
1. Introduction
The Board of Costain Group PLC and the Board of May Gurney
Integrated Services plc are pleased to announce that they have
reached agreement on the terms of a recommended all-share merger of
Costain and May Gurney, which is to be implemented by way of a
scheme of arrangement of May Gurney under Part 26 of the Companies
Act, pursuant to which Costain will acquire the entire issued and
to be issued ordinary share capital of May Gurney.
Upon the Merger becoming effective, Costain, whose shares will
continue to have a premium listing and to be traded on the London
Stock Exchange's Main Market for listed securities, will be renamed
'Costain May Gurney PLC'.
2. The Merger
Under the terms of the Merger, which will be subject to the
Conditions and further terms summarised below and set out in the
Scheme Document, May Gurney Shareholders will be entitled to
receive:
for each Scheme Share 0.8275 New Costain Share(s)
May Gurney Shareholders will also be entitled to receive a
second interim dividend of 5.6 pence per May Gurney Share (the 'May
Gurney Second Interim Dividend'). The May Gurney Second Interim
Dividend, which will be conditional upon the Merger becoming
effective, will be payable after the Effective Date to May Gurney
Shareholders on the register of members at the Scheme Record Time.
In the event that the Merger becomes effective, no final dividend
will be paid in respect of May Gurney's financial year ending 31
March 2013.
On 6 March 2013 the Board of Costain announced that it was
recommending, subject to Costain Shareholder approval, a final
dividend of 7.25 pence per Costain Share in respect of the
financial year ended 31 December 2012. If approved, the final
dividend will be paid on 24 May 2013 to Costain Shareholders on the
register of members as at the close of business on 19 April 2013.
The New Costain Shares to be issued pursuant to the Merger will not
carry any entitlement to the Costain final dividend in respect of
the financial year ended 31 December 2012.
The Merger values each May Gurney Share at 253.22 pence, and May
Gurney's existing issued share capital at approximately GBP178
million, based on the closing price of a Costain Share on 25 March
2013 (being the last practicable date prior to the publication of
this announcement).
If the Scheme becomes effective, it will result in the issue of
approximately 58.1 million New Costain Shares to May Gurney
Shareholders, which would result in former May Gurney Shareholders
holding approximately 47% of the Combined Group and Costain's
issued share capital increasing by approximately 89%. If the Merger
becomes effective and New Costain Shares are issued to May Gurney
Shareholders, the holdings of current Costain Shareholders will be
diluted such that they will hold approximately 53% of the issued
share capital of Costain.
3. Recommendation
The May Gurney Directors, who have been so advised by Canaccord
Genuity, consider the terms of the Merger to be fair and
reasonable. In providing its advice, Canaccord Genuity has taken
into account the commercial assessments of the May Gurney
Directors. Accordingly, the May Gurney Directors intend to
recommend unanimously that May Gurney Shareholders vote in favour
of the Scheme at the Court Meeting and the Special Resolution to be
proposed at the May Gurney General Meeting, as the May Gurney
Directors who hold or are beneficially entitled to May Gurney
Shares have irrevocably undertaken to do in respect of May Gurney
Shares representing in aggregate approximately 0.09% of May
Gurney's issued share capital on 25 March 2013 (being the latest
practicable date prior to this announcement).
The Costain Directors, who have received financial advice from
Rothschild, consider the terms of the Merger to be fair and
reasonable. In providing its advice, Rothschild has taken into
account the commercial assessments of the Costain Directors.
Accordingly, the Costain Directors intend to recommend unanimously
that Costain Shareholders vote in favour of the resolutions to be
proposed at the Costain General Meeting to approve the Merger and
related matters, as the Costain Directors who hold or are
beneficially entitled to Costain Shares have irrevocably undertaken
to do in respect of Costain Shares representing in aggregate
approximately 0.56% of Costain's issued share capital on 25 March
2013 (being the latest practicable date prior to this
announcement).
4. Background to and reasons for the Merger
The sectors in which both Costain and May Gurney operate are
changing rapidly with the ongoing consolidation of consultancy,
programme management and service delivery providers. Customers
increasingly require their partners to have the ability to deliver
solutions through a broader range of services under larger, more
output-based and complex contracts.
The Merger will bring together two businesses with complementary
service offerings to create one of the UK's leading integrated
services providers to the rail, highways, water, waste, airports,
hydrocarbons, power, nuclear, local government and fleet management
sectors.
The Boards of Costain and May Gurney believe that the Combined
Group will have:
-- a focus on delivering innovative and cost-effective solutions
to address essential national needs in the markets in which Costain
and May Gurney operate;
-- a larger addressable market, with a combined client base
across the private sector, central and local government and
regulated industries;
-- an enhanced range of capabilities to meet customers' changing demands;
-- the ability to benefit from the respective strengths of the
Costain and May Gurney brands, which will continue to be used as
required by customers;
-- greater financial strength and scale, increasing the
opportunity to bid for larger, more complex and multi-disciplinary
contracts;
-- the opportunity to leverage the best talent of the Costain Group and the May Gurney Group;
-- significant earnings visibility underpinned by long term
contracts and a combined order book of approximately GBP3.9
billion; and
-- combined revenues of approximately GBP1.6 billion per annum.
The Boards of Costain and May Gurney believe that the
combination of the Costain Group and the May Gurney Group will
allow both to grow and to meet the challenges that lie ahead.
5. Management, employees and locations of business
It is proposed that the Board of Costain May Gurney PLC
following the Merger becoming effective would comprise:
-- David Allvey, current chairman of Costain, who would be the Chairman;
-- Baroness Margaret Ford, current chairman of May Gurney, who would be the Deputy Chairman;
-- Andrew Wyllie, the current CEO of Costain, who would continue in that role;
-- Tony Bickerstaff, the current Finance Director of Costain, who would continue in that role;
-- Ishbel Macpherson, currently the Senior Independent Director
of May Gurney, who would be the Senior Independent Director;
and
-- Mike Alexander, Jane Lodge, James Morley, and Samer Younis,
all current Directors of Costain, and Willie MacDiarmid and Andrew
Walker, both current Directors of May Gurney, who would all be
Non-executive Directors.
The Combined Group would have a proven management team to be led
by Andrew Wyllie and Tony Bickerstaff. The Executive Committee of
the Combined Group will be drawn from the management teams of both
Costain and May Gurney. The senior management structure of the
Combined Group will be established with a view to ensuring that the
Combined Group benefits from the best skills and experience of both
companies.
Costain and May Gurney attach great importance to the skills and
experience of the existing management and employees of Costain and
May Gurney and believe that there will be greater opportunities
within the Combined Group.
The Boards of Costain and May Gurney recognise that in order to
achieve the expected benefits of the Merger, certain operational
and administrative restructuring, as described in paragraph 6
below, will be required following completion of the Merger.
The Combined Group's headquarters and registered office will be
located at Costain's office in Maidenhead. May Gurney's office in
Trowse in Norfolk will be retained as a shared services centre and
the operational office for the Combined Group's hub in East
Anglia.
Costain has given assurances to the May Gurney Directors that,
following completion of the Merger, the existing employment rights
of May Gurney's employees will be fully safeguarded.
6. Synergies and integration[3]
Following preliminary analysis, the Board of Costain believes
that the Merger presents opportunities for significant cost
synergies. The Costain Directors believe that the Combined Group
should be able to achieve recurring annual pre-tax cost synergies
of approximately GBP10 million in the financial year ending 31
December 2015.
The synergies identified below reflect both beneficial elements
and relevant costs and could not be achieved independently.
Overhead cost savings are expected to arise from the reduction
of corporate overheads (including administrative and governance
costs and professional and finance fees), combining corporate
support functions, combining the management structure of the
operating divisions of Costain and May Gurney and achieving
procurement savings. A central objective of the integration will be
the retention of the customer focus and capabilities of the Costain
and May Gurney businesses.
The Costain Directors currently anticipate that the integration
of the Costain and May Gurney businesses will result in a net
reduction in the number of Combined Group full-time equivalent
employee roles of fewer than 150 (primarily from overhead roles).
The number of employees, specific operating functions and locations
affected by the integration will depend on the outcome of the
ongoing integration planning and these changes will only come into
effect as synergies are realised.
The Board of Costain expects that approximately GBP2.5 million
of synergies will be realised in the financial year ending 31
December 2013, approximately GBP7.5 million of synergies will be
realised in the financial year ending 31 December 2014 and
approximately GBP10 million of synergies will be realised in the
financial year ending 31 December 2015. The Board of Costain
expects that the integration process and the realisation of these
synergies will result in one-off exceptional costs of approximately
GBP14 million together with one-off capital expenditure costs of
approximately GBP6 million relating to investment in IT.
The Board of Costain is confident that the integration of the
two businesses can be achieved without undue disruption to the
underlying operations of each business.
As at the date of this document, an outline integration plan has
been developed. The output of that plan will be the agreement of
the scope of integration, quantified objectives and proposed
organisation structure and processes to be reviewed and
subsequently implemented, together with a stakeholder communication
timetable.
As soon as practicable following the Effective Date, the
Combined Group will aim to have fully validated the initial synergy
assumptions, agreed the target operating model of the Combined
Group, completed a detailed integration plan across the Combined
Group's business, and completed the principal elements of the
restructuring of the Combined Group which will include all senior
management appointments, reporting structures and operational and
executive authority limits, as well as changes to key Combined
Group policies and processes. The latter will include financial
reporting, planning and budgetary processes, compensation, treasury
and liquidity management policies, sustainability practices and
reviewing the scope of internal audit and risk registers.
3 The statements in this paragraph 6 relating to cost synergies
are not intended as profit forecasts. They should not be
interpreted to mean that earnings per Costain Share or May Gurney
Share for the current or future financial years would necessarily
match or exceed the historical published earnings per Costain Share
or May Gurney Share.
7. Financial effects of the Merger
The Costain Directors have reviewed carefully the business and
prospects of, and the consequent investment required in, the
Combined Group following the Merger becoming effective, as well as
the expected synergy benefits and associated costs of achieving the
same. After taking into account the envisaged synergy benefits, the
Merger is expected by the Costain Directors to be double digit
earnings enhancing[4] for Costain for the financial year ending 31
December 2014.[5]
4 Before amortisation of acquired intangibles,
employment-related deferred consideration and integration
costs.
5 This statement is not intended as a profit forecast. It should
not be interpreted to mean that earnings per Costain Share or May
Gurney Share for the current or future financial years would
necessarily match or exceed the historical published earnings per
Costain Share or May Gurney Share.
8. Information relating to Costain
Costain is one of the UK's leading tier one engineering
solutions providers. Costain delivers integrated consulting,
project delivery and operations and maintenance services, focused
on meeting its customers' needs in the following areas:
-- Infrastructure - incorporates activities in the highways,
rail, airports and power sectors; and
-- Natural Resources - services the water, hydrocarbons and
chemicals, nuclear process and waste sectors.
In addition to the two divisions listed above, Costain has a
non-core 50% participation in a land development joint venture in
Spain whose assets include land held for development, two golf
courses and a 600-berth marina.
Current trading, trends and prospects
On 6 March 2013 Costain announced its final results for the year
ended 31 December 2012, reporting revenue of GBP934.5 million
(2011: GBP986.3 million), profit from operations of GBP28.0 million
(2011: GBP22.0 million), adjusted profit before tax of GBP29.5
million (2011: GBP25.5 million) and adjusted basic earnings per
share of 41.4 pence (2011: 31.1 pence).
There has been no significant change in the financial or trading
position of Costain since 31 December 2012.
9. Information relating to May Gurney
May Gurney is a support services company headquartered in
Norwich, United Kingdom. May Gurney works with its clients in the
public and regulated sectors to design and deliver a wide range of
essential front-line services.
The principal activities of the May Gurney Group are:
Public Sector Services:
-- Highways Services - May Gurney is a leading highways
maintenance services provider for local authorities, maintaining,
through long term contracts, almost 31,500 kilometres of roads and
more than 330,000 street lights and illuminated road signs across
the UK;
-- Environmental Services - May Gurney is the fourth largest
provider of municipal waste collection services in the UK covering
2.1 million households across more than 15 local authorities;
and
-- Fleet & Passenger Services - May Gurney is one of the
UK's leading providers of end-to-end fleet management and passenger
services to local authorities, managing over 6,000 specialist
vehicles.
Regulated Sector Services:
-- Utility Services - May Gurney delivers utility maintenance
and asset enhancement services in water, gas, power and
telecommunications across the UK;
-- Rail Services - May Gurney works in long-term partnerships
with its client, Network Rail, to deliver maintenance and
refurbishment works on rail structures, rail property and in
signalling, and it also works with Nexus, the Tyne and Wear Metro;
and
-- Waterways Services - May Gurney plays an important role in
the regeneration, maintenance and renaissance of the UK's waterways
network.
Current trading, trends and prospects
For the year ended 31 March 2012, May Gurney reported revenues
of GBP695.3 million, operating profit of GBP21.0 million, profit
before tax of GBP19.3 million and basic earnings per share of 20.52
pence. May Gurney's operating profit before amortisation and
non-recurring items for the year ending 31 March 2012 was GBP30.1
million and underlying earnings per share was 29.47 pence. As at 30
September 2012, May Gurney had gross assets of GBP332.9
million.
On 4 December 2012, May Gurney announced its results for the
half year ended 30 September 2012, which contained the following
statement from the Chairman of May Gurney with regard to current
trading, trends and prospects:
"May Gurney's first-half performance was in line with our
revised expectations. We have taken steps to reinforce commercial
disciplines and the plans we put in place to address the
operational issues we announced in September are on track. As
expected, the process to resolve the two MaGOS(TM) environmental
services contracts is complex, and will continue well into next
year.
We continue to target resilient, maintenance-focused revenue
streams for essential services by developing long-term
relationships with our clients and local communities. Our strong
commercial market positions are reflected by the fact that we have
secured more than GBP314 million of business in the first-half. Our
forward order book has been maintained at GBP1.5 billion, with a
further GBP1.7 billion in potential contract extensions, and our
bidding pipeline stands at approximately GBP4 billion.
May Gurney is focused on delivering a solid future performance.
Whilst mindful of the challenging market, we look forward to
further progress in the second half and remain on course to meet
our revised expectations for the full year".
On 19 February 2013, May Gurney announced that MSWSP, a
partnership between May Gurney and WSP, had been selected as
preferred bidder for Suffolk County Council's Highway Services
contract valued at up to GBP200 million over five years, with the
possibility of extension to ten years.
There has been no significant change in the financial or trading
position of May Gurney since 30 September 2012, being the end of
the last financial period for which interim financial information
on May Gurney has been published.
In its interim results for the six months to 30 September 2012
announced on 4 December 2012, May Gurney set out details regarding
underperforming MaGOS(TM) contracts. Since the date of its interim
results announcement, May Gurney has continued to take actions to
drive operational efficiencies and profitability on those MaGOS(TM)
contracts and has remained in close dialogue with the relevant
contract counterparties with the aim of improving the financial
performance of those contracts. Whilst progress has been made, the
MaGOS(TM) contracts as a whole will incur, as expected, a
significant loss for the year ending 31 March 2013 and much remains
to be achieved in order to return the financial performance of the
underperforming contracts to an acceptable level. The Board of May
Gurney, in its assessment of the MaGOS(TM) contracts as part of the
ongoing May Gurney business, does not consider that a provision for
future losses on those contracts is required at this time. As
previously stated by May Gurney, this is a matter that is reviewed
regularly by the Board of May Gurney.
The terms of Costain's offer for May Gurney allow for the
possibility that a significant provision may be required to be
taken by the Combined Group and, if so, recorded as a purchase
price accounting adjustment.
10. Accounting considerations
The Combined Group will adopt Costain's accounting policies. The
Costain financial year ends at 31 December and the May Gurney
financial year ends at 31 March. It is currently intended that the
Combined Group will have a 31 December financial year end. For
accounting purposes it is expected that May Gurney will be
consolidated into Costain's balance sheet. May Gurney's assets and
liabilities will be fair valued at the Merger resulting in the
valuation of May Gurney's intangible assets being included on the
Combined Group's balance sheet.
11. Dividends and dividend policy
Conditional upon the Merger becoming effective, May Gurney
Shareholders will be entitled to receive a second interim dividend
of 5.6 pence per May Gurney Share. The May Gurney Second Interim
Dividend will be payable after the Effective Date to May Gurney
Shareholders on the register of members at the Scheme Record Time.
In the event that the Merger becomes effective, no final dividend
will be paid in respect of the May Gurney financial year ending 31
March 2013.
Reflecting another successful year and Costain's continuing
confidence in the long-term prospects for the Costain Group, the
Board of Costain has recommended, subject to Costain Shareholder
approval, a final dividend of 7.25 pence per Costain Share (2011:
6.75 pence) in respect of the year ended 31 December 2012, a 7.4%
increase in the final dividend over the prior year and the sixth
successive year of increase. If approved, the final dividend will
be paid on 24 May 2013 to Costain Shareholders on the register of
members as at the close of business on 19 April 2013. This would
bring the total for the full year to 10.75 pence per share (2011:
10.00 pence), an increase of 7.5% over the prior year. New Costain
Shares to be issued to May Gurney Shareholders pursuant to the
Merger will not carry any entitlement to the Costain final dividend
in respect of the year ended 31 December 2012.
It is expected that interim dividends of the Combined Group for
the period to June will be declared in August and paid in October
and final dividends for the period to December will be declared in
March and paid in May of the following year. Assuming that the
Merger will be completed in early June 2013, as currently
anticipated, the first dividend in relation to the Combined Group
is expected to be declared at the time of the interim results for
the half year ending 30 June 2013.
The Board of the Combined Group will decide the absolute level
of any future dividends taking into account the Combined Group's
underlying earnings, cash flows, capital investment plans and the
prevailing market outlook.
It is also intended that the Combined Group will offer a scrip
dividend scheme for both annual and interim dividends, allowing for
the allotment of ordinary shares in lieu of cash dividends to those
shareholders who elect to participate.
Costain has an existing dividend-matching arrangement with the
Costain Pension Scheme. Following completion of the Merger as
currently envisaged, Costain has agreed with the Costain Pension
Trustee to match 53% of any dividends paid by Costain May Gurney
PLC to shareholders with an equivalent cash contribution to the
Costain Pension Scheme, provided that the minimum such annual
dividend matching payment to the scheme is at least GBP5.4 million
pending finalisation of the full actuarial valuation of the Costain
Pension Scheme as at 31 March 2013.
12. Structure of the Merger
It is intended that the Merger will be effected by a
Court-sanctioned scheme of arrangement between May Gurney and the
Scheme Shareholders under Part 26 of the Companies Act. The Scheme
will result in Costain becoming the owner of the whole of the
issued and to be issued share capital of May Gurney.
Under the Scheme, the Merger is to be achieved by the
cancellation of the Scheme Shares held by Scheme Shareholders and
the application of the reserve arising from such cancellation in
paying up in full a number of new May Gurney Shares (which is equal
to the number of Scheme Shares cancelled) and issuing the same to
Costain in consideration for which Scheme Shareholders will receive
consideration on the basis set out in paragraph 2 of this
announcement.
The implementation of the Scheme will be subject to the
Conditions and further terms referred to in Appendix 1 to this
announcement and to be included in the Scheme Document. The
Conditions referred to in Appendix 1 to this announcement provide
that (unless, where applicable, such Condition is waived) the
Merger will lapse unless, by 27 September 2013 or such later date
(if any) as Costain and May Gurney may agree and (if required) the
Court and the Panel allow:
(a) a resolution to approve the Scheme is passed by a majority
in number of the Scheme Shareholders who are present and voting at
the Court Meeting, either in person or by proxy, representing not
less than 75% in value of the Scheme Shares voted by those Scheme
Shareholders;
(b) the Special Resolution necessary to implement the Scheme and
to approve the related Capital Reduction is passed by the requisite
majority of May Gurney Shareholders at the May Gurney General
Meeting;
(c) the Scheme is sanctioned (with or without modification, on
terms agreed by Costain and May Gurney), and the related Capital
Reduction is confirmed, by the Court;
(d) copies of each of the Court Orders (together with the
Statement of Capital) are delivered to the Registrar of Companies
and, if so ordered by the Court, the Reduction Court Order is
registered by the Registrar of Companies together with the
Statement of Capital;
(e) the OFT indicates, in terms reasonably satisfactory to
Costain, that it does not intend to refer the Merger (or any part
of it) to the Competition Commission;
(f) the resolutions to be proposed at the Costain General
Meeting: (i) to approve the transaction as a 'class 1 transaction'
under the Listing Rules; (ii) to grant authority to the Costain
Directors to allot the New Costain Shares; (iii) to increase the
fees permitted to be paid to directors under Costain's articles of
association; and (iv) to allow Costain and its subsidiaries to
incur borrowings in excess of the borrowing limit set out in
Costain's articles of association, are passed, in each case, by the
requisite majority of Costain Shareholders; and
(g) the UK Listing Authority acknowledging to Costain or its
agent (and such acknowledgement not having been withdrawn) that the
application for the admission of the New Costain Shares to the
Official List with a premium listing has been approved and (subject
to satisfaction of any conditions to which such approval is
expressed) will become effective as soon as a dealing notice has
been issued by the UK Listing Authority and the London Stock
Exchange having acknowledged to Costain or its agent (and such
acknowledgement not having been withdrawn) that the New Costain
Shares will be admitted to trading on the London Stock Exchange's
Main Market for listed securities.
Costain reserves the right to waive in whole or in part, the
Condition summarised in paragraph (e) above.
To become effective, the Scheme requires (i) the approval at the
Court Meeting by a majority in number of the Scheme Shareholders
present and voting (and entitled to vote), either in person or by
proxy, representing not less than 75% in value of the Scheme Shares
held by such Scheme Shareholders and (ii) the passing of the
Special Resolution at the May Gurney General Meeting by May Gurney
Shareholders representing at least 75% of the votes cast at the May
Gurney General Meeting (either in person or by proxy). The May
Gurney General Meeting will be held immediately after the Court
Meeting. In respect of the Special Resolution at the May Gurney
General Meeting, May Gurney Shareholders will be entitled to cast
one vote for each May Gurney Share held.
Following the Court Meeting and the May Gurney General Meeting,
the Scheme must be sanctioned by the Court at the Scheme Court
Hearing and the associated Capital Reduction must be confirmed by
the Court. The Scheme will only become effective once an office
copy of the Scheme Court Order, an office copy of the Reduction
Court Order and the Statement of Capital are delivered to the
Registrar of Companies.
Upon the Scheme becoming effective, it will be binding on all
Scheme Shareholders, irrespective of whether or not they attended
or voted at the Court Meeting and the May Gurney General
Meeting
Upon the Scheme becoming effective, the CREST accounts of May
Gurney Shareholders who hold their May Gurney Shares in
uncertificated form will be credited with the New Costain Shares
they will receive in consideration on the Effective Date and share
certificates in respect of the New Costain Shares that May Gurney
Shareholders who hold their May Gurney Shares in certificated form
will receive in consideration will be despatched by Costain to
Scheme Shareholders no later than 14 days after the Effective
Date.
The Scheme Document will include full details of the Scheme,
together with notices of the Court Meeting and the May Gurney
General Meeting and the expected timetable, and will specify the
actions to be taken by Scheme Shareholders. The Scheme Document
will be sent to May Gurney Shareholders as soon as reasonably
practicable.
The Scheme will be governed by English law. The Scheme will be
subject to the applicable requirements of the City Code, the Panel,
the London Stock Exchange, the AIM Rules and the UK Listing
Authority. The bases and sources of certain information contained
in this announcement are set out in Appendix 2. Certain terms used
in this announcement are defined in Appendix 4.
13. Costain Shareholder approval and Combined Circular/Prospectus
As a result of its size, the Merger constitutes a 'class 1
transaction' for Costain under the Listing Rules. Accordingly,
Costain will be required to seek the approval of Costain
Shareholders for the Merger at the Costain General Meeting.
The Combined Circular/Prospectus, containing information about
the New Costain Shares and the Combined Group, as well as details
of the Merger and notice of the Costain General Meeting at which,
amongst other things, a resolution will be proposed for the
approval of the Merger by Costain Shareholders, has been published
today and will shortly be posted to Costain Shareholders.
14. May Gurney Share Schemes
Appropriate proposals will be made to participants in the May
Gurney Share Schemes and such persons will be sent separate letters
in due course explaining the effect of the Merger on their
options/awards and setting out the proposals being made in respect
of their outstanding options/awards in connection with the Scheme.
These proposals will include a 'rollover' offer to participants in
the May Gurney Integrated Services plc Savings Related Share Option
Scheme (2007) to have their outstanding options over May Gurney
Shares exchanged for new equivalent options over New Costain
Shares.
15. Listing, dealings and settlement of the New Costain Shares
Applications will be made to the UK Listing Authority for the
New Costain Shares to be admitted to the Official List with a
premium listing and to the London Stock Exchange for the New
Costain Shares to be admitted to trading on the London Stock
Exchange's Main Market for listed securities ('Admission'). It is
expected that Admission will become effective and that dealings for
normal settlement in the New Costain Shares will commence on the
London Stock Exchange at or shortly after 8.00 a.m. (London time)
on the Effective Date.
16. Cancellation of admission to trading of May Gurney Shares on AIM and re-registration
On the Effective Date, May Gurney will become a wholly owned
subsidiary of Costain (to be renamed 'Costain May Gurney PLC').
Prior to the Scheme becoming effective, a request will be made
to the London Stock Exchange to cancel trading in May Gurney Shares
on AIM on the first Business Day following the Effective Date.
Share certificates in respect of May Gurney Shares will cease to
be valid and should be destroyed on the first Business Day
following the Effective Date.
In addition, entitlements held within the CREST system to May
Gurney Shares will be cancelled on the first Business Day following
the Effective Date.
As soon as possible after the Effective Date, it is intended
that May Gurney will be re-registered as a private limited
company.
17. Offer-related arrangements
Costain and May Gurney have entered into a mutual
confidentiality agreement dated 26 November 2012 pursuant to which
each of Costain and May Gurney has undertaken to keep certain
information relating (i) to the Merger and (ii) to the other party,
confidential and not to disclose such information to third parties,
except (i) to certain permitted disclosees for the purposes of
evaluating the Merger or (ii) if required by applicable laws or
regulations. These confidentiality obligations will remain in force
until completion of the Merger, or if the Merger fails to complete,
three years from the date of the mutual confidentiality
agreement.
18. Opening Position Disclosure
In connection with the Merger and on the date of this
announcement, Costain will make a public Opening Position
Disclosure setting out details of its interests or short positions
in, or rights to subscribe for, any relevant securities of May
Gurney and any relevant securities of Costain.
Costain's Opening Position Disclosure may not include details of
all interests or short positions in, or rights to subscribe for,
any relevant securities of May Gurney or any relevant securities of
Costain held by all persons acting in concert with Costain. If
required, Costain will make a further Opening Position Disclosure
as soon as possible disclosing these details.
19. Irrevocable undertakings
Irrevocable undertakings from May Gurney Shareholders
Baroness Margaret Ford, Mark Hazlewood, Ishbel Macpherson and
Andrew Walker, being the May Gurney Directors who hold interests in
May Gurney Shares, have irrevocably undertaken to vote, or procure
the vote, in favour of the Scheme at the Court Meeting and the
Special Resolution to be proposed at the May Gurney General Meeting
(or, in the event that the Merger is implemented by way of a Merger
Offer, to accept, or procure the acceptance of, the Merger Offer)
in respect of a total of 61,865 May Gurney Shares, representing, in
aggregate, approximately 0.09% of May Gurney's issued share
capital.
Costain has also received irrevocable undertakings to vote, or
procure the vote, in favour of (or to return, or procure the return
of, Forms of Proxy voting in favour of) the Merger at the Court
Meeting and the Special Resolution to be proposed at the May Gurney
General Meeting (or, in the event that the Merger is implemented by
way of a Merger Offer, to accept, or procure the acceptance of, the
Merger Offer) from David and Wendy Sterry (acting as trustees of
various trusts), Artemis Investment Management LLP, Polar Capital
LLP, Invesco Asset Management Limited and May Gurney Group Trustees
Limited (acting as trustee of the May Gurney Group Limited Employee
Share Ownership Trust) in respect of a total of 19,163,816 May
Gurney Shares, representing, in aggregate, approximately 27.28% of
May Gurney's issued share capital.
In addition, Costain has received a letter from Aviva Investors
Global Services Limited (in its capacity as investment manager for
certain clients who hold May Gurney Shares) confirming its
intention to vote, or to procure the vote, in favour of the Scheme
or to accept, or procure the acceptance of, the Merger Offer, as
the case may be, in respect of 3,623,051 May Gurney Shares,
representing, in aggregate, approximately 5.16% of May Gurney's
issued share capital.
Costain has therefore received irrevocable undertakings or a
letter of intent in respect of a total of 22,848,732 May Gurney
Shares, representing, in aggregate, approximately 32.53% of May
Gurney's issued share capital.
Irrevocable undertakings from Costain Shareholders
David Allvey, Andrew Wyllie, Tony Bickerstaff, Michael Alexander
and James Morley, being the Costain Directors who hold interests in
Costain Shares, have irrevocably undertaken to vote in favour of
the resolutions to be proposed at the Costain General Meeting to
approve the Merger and related matters in respect of a total of
368,264 Costain Shares, representing, in aggregate, approximately
0.56% of Costain's issued share capital.
In addition, Costain has also received irrevocable undertakings
to vote in favour of the resolutions to be proposed at the Costain
General Meeting to approve the Merger and related matters from UEM
Builders Berhad and Mohammed Adbulmohsin Al Kharafi & Sons For
General Trading, General Contracting and Industrial Structures
W.L.L. in respect of a total of 27,600,340 Costain Shares,
representing, in aggregate, approximately 42.11% of Costain's
issued share capital.
Costain has therefore received irrevocable undertakings in
respect of a total of 27,968,604 Costain Shares, representing, in
aggregate, approximately 42.67% of Costain's issued share
capital.
Further details of the irrevocable undertakings and the letter
of intent given by May Gurney Shareholders and Costain Shareholders
(including further details of the circumstances in which they will
lapse) are set out in Appendix 3.
20. Overseas shareholders
The availability of New Costain Shares under the Merger to
persons who are not resident in, and the distribution of this
announcement to persons who are not resident in, the United Kingdom
may be affected by the laws of the relevant jurisdiction in which
they are located. Such persons should inform themselves of, and
observe, any applicable legal or regulatory requirements of their
jurisdiction. May Gurney Shareholders who are in any doubt
regarding such matters should consult an appropriate independent
professional adviser in the relevant jurisdiction without
delay.
This announcement does not constitute an offer for sale of any
securities or an offer or an invitation to purchase any securities.
May Gurney Shareholders are advised to read carefully the Combined
Circular/Prospectus as well as the Scheme Document and the Forms of
Proxy once these have been dispatched.
21. Documents on display
Copies of the following documents will by no later than 12 noon
on 27 March 2013 be published on Costain's website
(www.costain.com) and May Gurney's website
(www.maygurney.co.uk):
(a) the mutual confidentiality agreement dated 26 November 2012
between Costain and May Gurney; and
(b) the irrevocable undertakings and the letter of intent listed in Appendix 3.
22. General
Costain reserves the right to elect to implement the Merger by
way of a Merger Offer for the entire issued and to be issued share
capital of May Gurney not already held by Costain as an alternative
to the Scheme. In such an event, a Merger Offer will be implemented
on the same terms (subject to appropriate amendments), so far as
applicable, as those which would apply to the Scheme and subject to
the amendment referred to in Appendix 1 to this announcement.
If the Merger is effected by way of a Merger Offer and such
Merger Offer becomes or is declared unconditional in all respects
and sufficient acceptances are received Costain intends to: (i)
request the London Stock Exchange cancel trading in May Gurney
Shares on AIM; and (ii) exercise its rights to apply the provisions
of Chapter 3 of Part 28 of the Companies Act to acquire
compulsorily the remaining May Gurney Shares in respect of which
the Merger Offer has not been accepted.
Further Information
This announcement is not intended to and does not constitute or
form part of any offer to sell or subscribe for or any invitation
to purchase or subscribe for any securities or the solicitation of
any vote or approval in any jurisdiction pursuant to the Merger or
otherwise. The Merger will be effected solely by means of the
Scheme Document which, together with the Forms of Proxy, will
contain the full terms and conditions of the Merger including
details of how to vote in respect of the Merger.
The Combined Circular/Prospectus has been published today and
will shortly be distributed in hard copy to Costain Shareholders.
The Combined Circular/Prospectus will be made available by Costain
on its website at www.costain.com and by May Gurney on its website
at www.maygurney.co.uk. May Gurney will prepare the Scheme Document
to be distributed to May Gurney Shareholders. May Gurney urges May
Gurney Shareholders to read the Combined Circular/Prospectus and
the Scheme Document because they contain important information in
relation to the Merger, the New Costain Shares and the Combined
Group. Costain urges Costain Shareholders to read the Combined
Circular/Prospectus because it contains important information in
relation to the Merger, the New Costain Shares and the Combined
Group. Any vote in respect of the Scheme or other response in
relation to the Merger should be made only on the basis of the
information contained in the Scheme Document and/or the Combined
Circular/Prospectus, as appropriate.
This announcement does not constitute a prospectus or prospectus
equivalent document.
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. In particular, the
ability of persons who are not resident in the United Kingdom to
vote their May Gurney Shares in respect of the Scheme at the Court
Meeting, or to execute and deliver Forms of Proxy appointing
another to vote at the Court Meeting on their behalf, may be
affected by the laws of the relevant jurisdictions in which they
are located. This announcement has been prepared for the purpose of
complying with English law and the City 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 of jurisdictions outside the United Kingdom.
Copies of this announcement and any formal documentation
relating to the Merger are not being, and must not be, directly or
indirectly, mailed or otherwise forwarded, distributed or sent in
or into or from any Restricted Jurisdiction and persons receiving
such documents (including custodians, nominees and trustees) must
not mail or otherwise forward, distribute or send them in or into
or from any Restricted Jurisdiction. If the Merger is implemented
by way of a Merger Offer (unless otherwise permitted by applicable
law and regulation), the Merger Offer may not be made, directly or
indirectly, in or into, or by the use of mails or any means or
instrumentality (including, but not limited to, facsimile, e-mail
or other electronic transmission, telex or telephone) of interstate
or foreign commerce of, or of any facility of a national, state or
other securities exchange of any Restricted Jurisdiction and the
Merger Offer may not be capable of acceptance by any such use,
means, instrumentality or facilities.
Notice to US investors in May Gurney: The Merger relates to the
shares of an English company and is being made by means of a scheme
of arrangement provided for under English company law. A
transaction effected by means of a scheme of arrangement is not
subject to the tender offer rules or the proxy solicitation rules
under the US Exchange Act. Accordingly, the Merger is subject to
the disclosure requirements and practices applicable in the United
Kingdom to schemes of arrangement which differ from the disclosure
requirements of United States tender offer and proxy solicitation
rules. If, in the future, Costain exercises the right to implement
the Merger by way of a takeover offer and decides to extend the
offer into the United States, the Merger Offer will be made in
compliance with applicable United States laws and regulations.
Financial information included (or incorporated by reference) in
this announcement and the Scheme Document has been or will have
been prepared in accordance with accounting standards applicable in
the United Kingdom that may not be comparable to financial
information of US companies or companies whose financial statements
are prepared in accordance with generally accepted accounting
principles in the United States.
It may be difficult for US holders of May Gurney Shares to
enforce their rights and any claim arising out of US federal laws,
since Costain and May Gurney are located in a non-US jurisdiction
and some or all of their officers and directors may be residents of
a non-US jurisdiction. US holders of May Gurney Shares may not be
able to sue a non-US company or its officers or directors in a
non-US court for violations of the US securities laws. Further, it
may be difficult to compel a non-US company and its affiliates to
subject themselves to a US court's judgement.
Please be aware that addresses, electronic addresses and certain
other information provided by May Gurney Shareholders, persons with
information rights and other relevant persons for the receipt of
communications from May Gurney may be provided to Costain during
the offer period as required under Section 4 of Appendix 4 of the
City Code.
Rothschild, which is authorised and regulated in the United
Kingdom by the FSA, is acting exclusively for Costain and no one
else in connection with the Merger and will not be responsible to
anyone other than Costain for providing the protections afforded to
clients of Rothschild or for providing advice in relation to the
Merger or any other matters referred to in this announcement.
Investec Bank plc, which is authorised and regulated in the
United Kingdom by the FSA, is acting as broker to Costain and
no-one else and will not be responsible to anyone other than
Costain for providing the protections afforded to its clients or
for providing advice in connection with the subject matter of this
announcement.
Canaccord Genuity Limited, which is authorised and regulated in
the United Kingdom by the FSA, is acting exclusively for May Gurney
and no one else in connection with the Merger and will not be
responsible to anyone other than May Gurney for providing the
protections afforded to clients of Canaccord Genuity or for
providing advice in relation to the Merger or any other matters
referred to in this announcement.
Peel Hunt LLP, which is authorised and regulated in the United
Kingdom by the FSA, is acting as nominated adviser and broker to
May Gurney and for no-one else in connection with the subject
matter of this announcement and will not be responsible to anyone
other than May Gurney for providing the protections afforded to its
clients or for providing advice to any other person in connection
with the subject matter of this announcement.
Cautionary note regarding forward-looking statements
This announcement contains certain forward-looking statements
with respect to the financial condition, results of operations and
business of May Gurney and certain plans and objectives of Costain
with respect thereto. These forward-looking statements can be
identified by the fact that they do not relate only to historical
or current facts. Forward-looking statements often use words such
as 'anticipate', 'target', 'expect', 'estimate', 'intend', 'plan',
'goal', 'believe', 'hope', 'aims', 'continue', 'will', 'may',
'should', 'would', 'could' or other words of similar meaning. These
statements are based on assumptions and assessments made by May
Gurney, and/or Costain in light of their experience and their
perception of historical trends, current conditions, future
developments and other factors they believe appropriate. By their
nature, forward-looking statements involve risk and uncertainty
because they relate to events and depend on circumstances that will
occur in the future. The factors described in the context of such
forward-looking statements in this announcement could cause actual
results and developments to differ materially from those expressed
in or implied by such forward-looking statements. Although it is
believed that the expectations reflected in such forward-looking
statements are reasonable, no assurance can be given that such
expectations will prove to have been correct and persons reading
this announcement are therefore cautioned not to place undue
reliance on these forward-looking statements which speak only as at
the date of this announcement. Neither May Gurney nor Costain
assumes any obligation to update or correct the information
contained in this announcement (whether as a result of new
information, future events or otherwise), except as required by
applicable law.
There are several factors which could cause actual results to
differ materially from those expressed or implied in
forward-looking statements. Among such factors are changes in the
global, political, economic, business, competitive, market and
regulatory forces, future exchange and interest rates, changes in
tax rates and future business combinations or dispositions.
No profit forecasts or estimates
No statement in this announcement is intended as a profit
forecast or estimate for any period and no statement in this
announcement should be interpreted to mean that earnings or
earnings per ordinary share for Costain or May Gurney, as
appropriate, for the current or future financial years would
necessarily match or exceed the historical published earnings or
earnings per ordinary share for Costain or May Gurney, as
appropriate.
Dealing and Opening Position Disclosure requirements
Under Rule 8.3(a) of the City Code, any person who is interested
in 1% or more of any class of relevant securities of an offeree
company or of any paper offeror (being any offeror other than an
offeror in respect of which it has been announced that its offer
is, or is likely to be, solely in cash) must make an Opening
Position Disclosure following the commencement of the offer period
and, if later, following the announcement in which any paper
offeror is first identified.
An Opening Position Disclosure must contain details of the
person's interests and short positions in, and rights to subscribe
for, any relevant securities of each of (i) the offeree company and
(ii) any paper offeror(s). An Opening Position Disclosure by a
person to whom Rule 8.3(a) applies must be made by no later than
3.30 p.m. (London time) on the 10th business day following the
commencement of the offer period and, if appropriate, by no later
than 3.30 p.m. (London time) on the 10th business day following the
announcement in which any paper offeror is first identified.
Relevant persons who deal in the relevant securities of the offeree
company or of a paper offeror prior to the deadline for making an
Opening Position Disclosure must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the City Code, any person who is, or becomes,
interested in 1% or more of any class of relevant securities of the
offeree company or of any paper offeror must make a Dealing
Disclosure if the person deals in any relevant securities of the
offeree company or of any paper offeror. A Dealing Disclosure must
contain details of the dealing concerned and of the person's
interests and short positions in, and rights to subscribe for, any
relevant securities of each of (i) the offeree company and (ii) any
paper offeror, save to the extent that these details have
previously been disclosed under Rule 8. A Dealing Disclosure by a
person to whom Rule 8.3(b) applies must be made by no later than
3.30 p.m. (London time) on the business day following the date of
the relevant dealing. If two or more persons act together pursuant
to an agreement or understanding, whether formal or informal, to
acquire or control an interest in relevant securities of an offeree
company or a paper offeror, they will be deemed to be a single
person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree
company and by any offeror and Dealing Disclosures must also be
made by the offeree company, by any offeror and by any persons
acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Panel's website at www.thetakeoverpanel.org.uk, including
details of the number of relevant securities in issue, when the
offer period commenced and when any offeror was first identified.
If you are in any doubt as to whether you are required to make an
Opening Position Disclosure or a Dealing Disclosure, you should
contact the Panel's Market Surveillance Unit on +44 (0) 20 7638
0129.
Rule 2.10 disclosure
In accordance with Rule 2.10 of the City Code, Costain confirms
that, as at the date of this announcement, it has 65,544,306
ordinary shares of 50 pence each in issue with ISIN GB00B64NSP76
and May Gurney confirms that, as at the date of this announcement,
it has 70,236,016 ordinary shares of 5 pence each in issue with
ISIN GB00B1528L44.
Publication on website
A copy of this announcement will be available free of charge,
subject to certain restrictions relating to persons resident in
Restricted Jurisdictions, on Costain's website at www.costain.com
and on May Gurney's website at www.maygurney.co.uk by no later than
noon (London time) on the day following this announcement. For the
avoidance of doubt, the contents of those websites are not
incorporated into and do not form part of this announcement.
You may request a hard copy of this announcement (and any
information incorporated by reference in this announcement) by
contacting Laurence Whyatt of Investec Bank plc at
Laurence.Whyatt@Investec.co.uk or by submitting a request in
writing to Laurence Whyatt at Investec Bank plc, 2 Gresham Street,
London, EC2V 7QP or Mike Bell of Peel Hunt LLP at
mike.bell@peelhunt.com or by submitting a request in writing to
Mike Bell at Peel Hunt LLP, Moor House, 120 London Wall, London,
EC2Y 5ET. It is important that you note that unless you make such a
request, a hard copy of this announcement and any such information
incorporated by reference in it will not be sent to you. You may
also request that all future documents, announcements and
information to be sent to you in relation to the Merger should be
in hard copy form.
APPENDIX 1
CONDITIONS TO AND CERTAIN FURTHER TERMS OF THE SCHEME AND THE
MERGER
Part A: Conditions to the Scheme and the Merger
The Merger will be conditional upon the Scheme becoming
unconditional and becoming effective by no later than 27 September
2013, or such later date (if any) as Costain and May Gurney may
agree and (if required) the Court and the Panel may allow.
(A) The Scheme will be conditional upon:
(1) its approval by a majority in number representing not less
than 75% in value of the Scheme Shareholders present and voting,
either in person or by proxy, at the Court Meeting and at any
separate class meeting which may be required by the Court or at any
adjournment of any such meeting on or before the 22nd day after the
expected date of the Court Meeting to be set out in the Scheme
Document in due course (or such later date, if any, as Costain and
May Gurney may agree and the Court may allow);
(2) all resolutions necessary to approve and implement the
Scheme being duly passed by the requisite majority or majorities at
the May Gurney General Meeting or at any adjournment of that
meeting on or before the 22nd day after the expected date of the
May Gurney General Meeting to be set out in the Scheme Document in
due course (or such later date, if any, as Costain and May Gurney
may agree and the Court may allow); and
(3) the sanction of the Scheme with or without modification (but
subject to any such modification being acceptable to Costain and
May Gurney) and the confirmation of the Capital Reduction by the
Court and:
(i) the delivery of office copies of each of the Court Orders
and of the Statement of Capital to the Registrar of Companies;
and
(ii) if the Court so orders for it to become effective, the
registration of the Reduction Court Order and the Statement of
Capital by the Registrar of Companies.
In addition, the Merger will be conditional upon the following
Conditions and, accordingly, the necessary actions to make the
Scheme effective will not be taken unless the following Conditions
(as amended if appropriate) have been satisfied or, where relevant,
waived:
(B) the OFT indicating, in terms reasonably satisfactory to
Costain, that it does not intend to refer the Merger or any part of
it to the Competition Commission;
(C) the passing at the Costain General Meeting of such
resolution or resolutions as are necessary to approve, implement
and effect the Merger including a resolution or resolutions to
approve the Merger; to authorise the creation and allotment of New
Costain Shares; to increase the fees permitted to be paid to
directors under Costain's articles of association; and to allow
Costain and its subsidiaries to incur borrowings in excess of the
borrowing limit set out in Costain's articles of association;
(D) (i) the UK Listing Authority having acknowledged to Costain
or its agent (and such acknowledgement not having been withdrawn)
that the application for the admission of the New Costain Shares to
the Official List with a premium listing has been approved and
(after satisfaction of any conditions to which such approval is
expressed to be subject ('listing conditions')) will become
effective as soon as a dealing notice has been issued by the UK
Listing Authority and any listing conditions having been satisfied
and (ii) the London Stock Exchange having acknowledged to Costain
or its agent (and such acknowledgement not having been withdrawn)
that the New Costain Shares will be admitted to trading on the
London Stock Exchange's Main Market for listed securities;
(E) except as Fairly Disclosed, there being no provision of any
agreement, arrangement, licence, permit or other instrument to
which any member of the Wider May Gurney Group is a party or by or
to which any such member or any of its assets is or may be bound,
entitled or subject, which in consequence of the Merger or because
of a change in the control or management of May Gurney or any other
member of the Wider May Gurney Group or otherwise, would or might
reasonably be expected to result in (to an extent which is material
in the context of the Wider May Gurney Group taken as a whole),
(i) any moneys borrowed by or any other indebtedness (actual or
contingent) of, or grant available to any such member, being or
becoming repayable or capable of being declared repayable
immediately or earlier than their or its stated maturity date or
repayment date or the ability of any such member to borrow moneys
or incur any indebtedness being withdrawn or inhibited or being
capable of becoming or being withdrawn or inhibited;
(ii) any such agreement, arrangement, licence, permit or
instrument or the rights, liabilities, obligations or interests of
any such member thereunder being terminated or modified or affected
or any obligation or liability arising or any action being taken or
arising thereunder;
(iii) any assets or interests of any such member 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;
(iv) 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 such member or any such mortgage, charge
or security interest (whenever created, arising or having arisen)
becoming enforceable;
(v) the rights, liabilities, obligations or interests of any
such member in, or the business of any such member with, any
person, firm or body (or any arrangement or arrangements relating
to any such interest or business) being terminated, adversely
modified or affected;
(vi) the value of any such member or its financial or trading
position or prospects being prejudiced or adversely affected;
(vii) any such member ceasing to be able to carry on business
under any name under which it presently does so; or
(viii) the creation or acceleration of any liability, actual or
contingent, by any such member,
and no event having occurred which, under any provision of any
agreement, arrangement, licence, permit or other instrument to
which any member of the Wider May Gurney Group is a party or by or
to which any such member or any of its assets may be bound,
entitled or subject, would or might result in any of the events or
circumstances as are referred to in sub-paragraphs (i) to (viii) of
this Condition;
(F) no anti-trust regulator or Third Party having decided to
take, institute, implement or threaten any action, proceeding,
suit, investigation, enquiry or reference, or enacted, made or
proposed any statute, regulation, decision or order, or having
taken any other steps which would or might reasonably be expected
to (to an extent which is material in the context of the Wider May
Gurney Group or the Wider Costain Group, as the case may be, in
either case, taken as a whole):
(i) require, prevent or delay the divestiture, or materially
alter the terms envisaged for any proposed divestiture by any
member of the Wider Costain Group or any member of the Wider May
Gurney Group of all or any portion of their respective businesses,
assets or property or impose any limitation on the ability of all
or any of them to conduct their respective businesses (or any part
thereof) or to own, control or manage any of their respective
assets or properties (or any part thereof);
(ii) require, prevent or delay the divestiture by any member of
the Wider Costain Group of any shares or other securities in any
member of the Wider May Gurney Group or the Wider Costain
Group;
(iii) impose any limitation on, or result in a delay in, the
ability of any member of the Wider Costain Group directly or
indirectly to acquire or to hold or to exercise effectively any
rights of ownership in respect of shares or loans or securities
convertible into shares or any other securities (or the equivalent)
in any member of the Wider May Gurney Group or the Wider Costain
Group or to exercise management control over any such member;
(iv) otherwise adversely affect all or any of the business,
assets, profits or prospects of any member of the Wider Costain
Group or of any member of the Wider May Gurney Group;
(v) make the Merger or its implementation or the acquisition or
proposed acquisition by Costain or any member of the Wider Costain
Group of any shares or other securities in, or control of, May
Gurney void, illegal, and/or unenforceable under the laws of any
jurisdiction, or otherwise, directly or indirectly, restrain,
restrict, prohibit, delay or otherwise interfere with the same, or
impose additional conditions or obligations with respect thereto,
or otherwise challenge or interfere therewith;
(vi) require any member of the Wider Costain Group or the Wider
May Gurney Group to offer to acquire any shares or other securities
(or the equivalent) or interest in any member of the Wider May
Gurney Group or the Wider Costain Group owned by any Third
Party;
(vii) impose any limitation on the ability of any member of the
Wider Costain Group or any member of the Wider May Gurney Group to
co-ordinate or integrate its business, or any part of it, with the
businesses of any other member of the Wider Costain Group or the
Wider May Gurney Group; or
(viii) result in any member of the Wider Costain Group or any
member of the Wider May Gurney Group ceasing to be able to carry on
business under any name under which it presently does so,
and all applicable waiting and other time periods (including any
extensions thereof) during which any such anti-trust regulator or
Third Party could institute, implement or threaten any action,
proceeding, suit, investigation, enquiry or reference or any other
step under the laws of any jurisdiction in respect of the Merger
having expired, lapsed or been terminated;
(G) all material notifications, filings or applications which
are necessary or reasonably considered appropriate in connection
with the Merger having been made and all statutory or regulatory
obligations in any jurisdiction having been complied with in
connection with the Merger or the acquisition by any member of the
Wider Costain Group of any shares or other securities in, or
control of, May Gurney and all material authorisations, orders,
recognitions, grants, consents, licences, confirmations,
clearances, permissions and approvals reasonably deemed necessary
or appropriate by Costain or any member of the Wider Costain Group
for or in respect of the Merger or the proposed acquisition of any
shares or other securities in, or control of, May Gurney by any
member of the Wider Costain Group having been obtained in terms and
in a form reasonably satisfactory to Costain from all appropriate
Third Parties or persons with whom any member of the Wider May
Gurney Group has entered into contractual arrangements and all such
authorisations, orders, recognitions, grants, consents, licences,
confirmations, clearances, permissions and approvals together with
all authorisations, orders, recognitions, grants, licences,
confirmations, clearances, permissions and approvals necessary or
appropriate to carry on the business of any member of the Wider May
Gurney Group remaining in full force and effect and all filings
necessary for such purpose have been made and there being no notice
or intimation of any intention to revoke or not to renew any of the
same at the time at which the Merger becomes otherwise
unconditional and all necessary statutory or regulatory obligations
in any jurisdiction having been complied with;
(H) except as Fairly Disclosed, no member of the Wider May
Gurney Group having, since 31 March 2012:
(i) save as between May Gurney and wholly-owned subsidiaries of
May Gurney or for May Gurney Shares issued pursuant to the exercise
of options granted under the May Gurney Share Schemes, issued or
agreed to issue, authorised or proposed the issue of additional
shares (or other securities) of any class;
(ii) save as between May Gurney and wholly-owned subsidiaries of
May Gurney or for the grant of options under the May Gurney Share
Schemes, issued or agreed to issue, authorised or proposed the
issue of securities convertible into shares of any class or rights,
warrants or options to subscribe for, or acquire, any such shares
or convertible securities;
(iii) other than to another member of the May Gurney Group,
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, save for the May Gurney
Second Interim Dividend;
(iv) save for intra-May Gurney Group transactions or pursuant to
the Merger, merged or demerged with any body corporate 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
or proposed or announced any intention to propose any merger,
demerger, acquisition or disposal, transfer, mortgage, charge or
security interest, in each case, other than in the ordinary course
of business;
(v) save for intra-May Gurney Group transactions, made or
authorised or proposed or announced an intention to propose any
change in its loan capital;
(vi) issued or agreed to issue, authorised or proposed the issue
of any debentures or, save in the ordinary course of business,
incurred or increased, or agreed to incur or increase, any
indebtedness or become, or agreed to become, subject to any
contingent liability;
(vii) 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 to the matters mentioned in
sub-paragraph (i) above, made any other change to any part of its
share capital;
(viii) implemented, or authorised, proposed or announced its
intention to implement, any reconstruction, amalgamation, scheme,
commitment or other transaction or arrangement otherwise than in
the ordinary course of business or entered into or changed the
terms of any contract with any director or senior executive;
(ix) entered into or varied or authorised, proposed or announced
its intention to enter into or vary any contract, transaction or
commitment (whether in respect of capital expenditure or otherwise)
which is of a long term, onerous or unusual nature or magnitude or
which is or could be materially restrictive on the businesses of
any member of the Wider May Gurney Group or the Wider Costain Group
or which involves or could involve an obligation of such a nature
or magnitude or which is other than in the ordinary course of
business;
(x) (other than in respect of a member which is dormant and was
solvent at the relevant time) taken any corporate action or had any
legal proceedings started or threatened against it for its
winding-up, dissolution or reorganisation or for the appointment of
a receiver, administrative receiver, administrator, trustee or
similar officer of all or any of its assets or revenues or any
analogous proceedings in any jurisdiction or had any such person
appointed;
(xi) entered into any contract, transaction or arrangement which
would be restrictive on the business of any member of the Wider May
Gurney Group or the Wider Costain Group other than to a nature and
extent which is normal in the context of the business
concerned;
(xii) waived or compromised any claim otherwise than in the ordinary course of business;
(xiii) entered into any contract, commitment, arrangement or
agreement 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 any intention to, or to
propose to, effect any of the transactions, matters or events
referred to in this Condition;
(xiv) having made or agreed or consented to any change in any material respect to:
(1) the terms of the trust deeds constituting the pension
scheme(s) established by any member of the Wider May Gurney Group
for its directors, employees or their dependents;
(2) the contributions payable to any such scheme(s) or to the
benefits which accrue or to the pensions which are payable
thereunder;
(3) the basis on which qualification for, or accrual or
entitlement to, such benefits or pensions are calculated or
determined; or
(4) the basis upon which the liabilities (including pensions) of
such pension schemes are funded, valued or made;
(xv) save as agreed in writing by Costain, proposed, agreed to
provide or modified the terms of any share option scheme, incentive
scheme or other benefit relating to the employment or termination
of employment of any person employed by the Wider May Gurney Group;
or
(xvi) having taken (or agreed or proposed to take) any action
which requires, or would require, the consent of the Panel or the
approval of May Gurney Shareholders in general meeting in
accordance with, or as contemplated by, Rule 21.1 of the City
Code,
and, for the purposes of paragraphs (iii), (iv), (v) and (vi) of
this Condition, the term 'May Gurney Group' shall mean May Gurney
and its wholly-owned subsidiaries;
(I) except as Fairly Disclosed, since 31 March 2012:
(i) no adverse change or deterioration having occurred in the
business, assets, financial or trading position or profits or
prospects of any member of the Wider May Gurney Group which, in any
such case, is material in the context of the Wider May Gurney Group
taken as a whole and no circumstance having arisen which would or
might reasonably be expected to result in any such adverse change
or deterioration;
(ii) no litigation, arbitration proceedings, prosecution or
other legal proceedings to which any member of the Wider May Gurney
Group is or may become a party (whether as a plaintiff, defendant
or otherwise) and no investigation by any Third Party against or in
respect of any member of the Wider May Gurney Group having been
instituted announced or threatened by or against or remaining
outstanding in respect of any member of the Wider May Gurney Group
which, in any such case, has had, or might reasonably be expected
to have, a material adverse effect on the Wider May Gurney Group
taken as a whole;
(iii) no contingent or other liability having arisen or become
apparent to Costain which has had, or might reasonably be expected
to have, a material adverse effect on the Wider May Gurney 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 May Gurney Group which is necessary for the proper
carrying on of its business and the withdrawal, cancellation,
termination or modification of which has had, or might reasonably
be expected to have, a material adverse effect on the Wider May
Gurney Group taken as a whole; and
(J) Costain not having discovered:
(i) that any financial, business or other information concerning
the Wider May Gurney Group as contained in the information publicly
disclosed at any time by or on behalf of any member of the Wider
May Gurney Group or disclosed at any time to any member of the
Wider Costain Group or to any of their advisers by or on behalf of
any member of the Wider May Gurney Group is misleading, contains a
misrepresentation of fact or omits to state a fact necessary to
make that information not misleading, in each case to an extent
which is material in the context of the Wider May Gurney Group
taken as a whole;
(ii) that, except as Fairly Disclosed, any member of the Wider
May Gurney Group or any partnership, company or other entity in
which any member of the Wider May Gurney Group has a significant
economic interest and which is not a subsidiary undertaking of May
Gurney is subject to any liability (contingent or otherwise) which,
in any such case, is material in the context of the Wider May
Gurney Group taken as a whole;
(iii) any information which affects the import of any
information disclosed to Costain at any time by or on behalf of any
member of the Wider May Gurney Group and which is material in the
context of the Wider May Gurney Group taken as a whole;
(iv) that, except as Fairly Disclosed, any past or present
member of the Wider May Gurney Group has failed to comply with any
and/or all applicable legislation, regulation or other requirement,
of any jurisdiction with regard to the use, treatment, carriage,
disposal, spillage, release, discharge, leak or emission of any
waste or hazardous substance or any substance likely to impair the
environment or harm human health or animal health or otherwise
relating to environmental matters, or that there has otherwise been
any such use, treatment, carriage, disposal, spillage, release,
discharge, leak or emission (whether or not the same constituted a
non-compliance by any person with any such legislation, regulation
or requirement, and wherever the same may have taken place) any of
which use, treatment, carriage, disposal, spillage, release,
discharge, leak or emission would be likely to give rise to any
liability (actual or contingent) on the part of any member of the
Wider May Gurney Group, which in any case is or which might
reasonably be expected to be material in the context of the Wider
May Gurney Group taken as a whole; or
(v) that, except as Fairly Disclosed, there is, or is likely to
be, for any reason whatsoever, any liability (actual or contingent)
of any past or present member of the Wider May Gurney Group to make
good, repair, reinstate or clean up any property or any controlled
waters now or previously owned, occupied, operated or made use of
or controlled by any such past or present member of the Wider May
Gurney Group, under any environmental legislation, regulation,
notice, circular or order of any government, governmental,
quasi-governmental, state or local government, supranational,
statutory or other regulatory body, agency, court, association or
any other person or body in any jurisdiction, which, in any such
case, is or might reasonably be expected to be material in the
context of the Wider May Gurney Group taken as a whole.
Costain reserves the right to waive, in whole or in part, all or
any of Conditions above, except for Conditions (A), (C) and (D),
which cannot be waived.
Conditions (C) and (D) must be fulfilled by, and Conditions (B)
and (E) to (J) (inclusive) fulfilled or waived by, no later than
11.59pm on the date immediately preceding the date of the Scheme
Court Hearing, failing which the Scheme will lapse. Costain shall
be under no obligation to waive or treat as satisfied any of
Conditions (B) and (E) to (J) (inclusive) by a date earlier than
the latest date specified above for the fulfilment or waiver
thereof, notwithstanding that the other Conditions of the Scheme
and the Merger may at such earlier date have been waived or
fulfilled and that there are at such earlier date no circumstances
indicating that any of such Conditions may not be capable of
fulfilment.
If Costain is required by the Panel to make an offer for May
Gurney Shares under the provisions of Rule 9 of the City Code,
Costain may make such alterations to any of the above Conditions as
are necessary to comply with the provisions of that Rule.
The Merger will lapse if it (or any part of it) is referred to
the Competition Commission before the Court Meeting and the May
Gurney General Meeting. In such event, none of Costain, May Gurney
or May Gurney Shareholders will be bound by any term of the
Scheme.
Costain reserves the right to elect (with the consent of the
Panel) to implement the Merger by way of a takeover offer (as
defined in Part 28 of the Companies Act). In such event, the Merger
Offer will be implemented on the same terms, so far as applicable,
as those which would apply to the Scheme, subject to appropriate
amendments, including (without limitation and subject to the
consent of the Panel) an acceptance condition that is set at 90%
(or such lesser percentage, as Costain may decide) (i) in nominal
value of the shares to which such offer relates; and (ii) of the
voting rights attached to those shares, and that is subject to
Costain and/or (with the consent of the Panel) any members of the
Costain Group having acquired or agreed to acquire, whether
pursuant to the offer or otherwise, shares carrying more than 50%
of the voting rights normally exercisable at a general meeting of
May Gurney, including, for this purpose, any such voting rights
attaching to May Gurney Shares that are unconditionally allotted or
issued before the takeover
offer becomes or is declared unconditional as to acceptances,
whether pursuant to the exercise of any outstanding subscription or
conversion rights or otherwise.
The availability of the Merger to persons not resident in the
United Kingdom may be affected by the laws of the relevant
jurisdictions. Persons who are not resident in the United Kingdom
should inform themselves about and observe any applicable
requirements.
This Merger will be governed by English law and be subject to
the jurisdiction of the English courts and to the conditions and
further terms set out in this Appendix 1 and to be set out in the
formal Scheme Document. The Merger will comply with, and be subject
to, the applicable rules and regulations of the FSA, the London
Stock Exchange, the AIM Rules and the City Code.
Each of the Conditions shall be regarded as a separate Condition
and shall not be limited by reference to any other Condition.
Part B: Certain further terms of the Scheme and the Merger
Fractions of New Costain Shares will not be allotted or issued
pursuant to the Scheme. Fractional entitlements to New Costain
Shares will be aggregated and sold in the market and the net
proceeds of sale distributed pro rata to persons entitled thereto.
However, individual entitlements to amounts of less than GBP5 will
not be paid to persons accepting the Merger but will be retained
for the benefit of Costain.
The Merger will not be made, directly or indirectly, in or into,
or by use of the mails of, or by any means or instrumentality
(including, without limitation, facsimile transmission, telex,
telephone, internet or e-mail) of interstate or foreign commerce
of, or of any facility of a national securities exchange of, any
Restricted Jurisdiction and the Merger will not be capable of
acceptance by any such use, means, instrumentality or facility or
from within the any Restricted Jurisdiction.
The New Costain Shares to be issued pursuant to the Merger have
not been and will not be registered under the United States
Securities Act of 1933 (as amended) nor under any of the relevant
securities laws of Canada, Japan or Australia. Accordingly, the New
Costain Shares may not be offered, sold or delivered, directly or
indirectly, in the United States, Canada, Japan or Australia nor to
any United States person, except pursuant to exemptions from
applicable requirements of any such jurisdiction.
The New Costain Shares will be issued credited as fully paid and
will rank pari passu in all respects with the existing Costain
Shares, save that they will not carry the right to receive any
dividend declared in respect of the financial year ended 31
December 2012. Applications will be made to the UK Listing
Authority for the New Costain Shares to be admitted to the Official
List with a premium listing and to the London Stock Exchange for
the New Costain Shares to be admitted to trading.
May Gurney Shares which will be acquired under the Merger will
be acquired fully paid and free from all liens, equities, charges,
encumbrances, options, rights of pre-emption and any other third
party rights and interests of any nature and together with all
rights now or hereafter attaching or accruing to them, including
voting rights and the right to receive and retain in full all
dividends and other distributions (if any) declared, made or paid
on or after the date of this announcement other than the May Gurney
Second Interim Dividend.
APPENDIX 2
SOURCES OF INFORMATION AND BASES OF CALCULATION
In this announcement:
1. Unless otherwise stated:
-- financial information relating to the Costain Group has been
extracted or derived (without any adjustment) from the audited
annual report and accounts for Costain for the year ended 31
December 2011 and Costain's announcement dated 6 March 2013 of its
final results for the year ended 31 December 2012 (which are
unaudited); and
-- financial information relating to the May Gurney Group has
been extracted or derived (without any adjustment) from the audited
annual report and accounts for May Gurney for the year ended 31
March 2012 and May Gurney's announcement dated 4 December 2012 of
its results for the half year ended 30 September 2012 (which are
unaudited).
2. The value of the Merger is calculated:
-- by reference to the price of 306.00 pence per Costain Share,
being the closing price on 25 March 2013, the last Business Day
prior to this announcement; and
-- on the basis of the fully diluted number of May Gurney Shares
in issue referred to in paragraph 4 below.
3. As at the close of business on 25 March 2013, being the last
Business Day prior to the date of this announcement, May Gurney had
in issue 70,236,016 May Gurney Shares and Costain had in issue
65,544,306 Costain Shares. The International Securities
Identification Number for May Gurney Shares is GB00B1528L44 and for
Costain Shares is GB00B64NSP76.
4. The fully diluted share capital of May Gurney (being
70,236,016 May Gurney Shares) is calculated on the basis:
-- of the number of issued May Gurney Shares referred to in paragraph 3 above; and
-- that no further May Gurney Shares will be issued on or after the date of this announcement.
5. Unless otherwise stated, all prices and closing prices for
May Gurney Shares and Costain Shares are closing middle market
quotations derived from the London Stock Exchange Daily Official
List (SEDOL).
6. Synergy numbers are unaudited and are based on analysis by
Costain's and May Gurney's management and on Costain's and May
Gurney's internal records.
APPENDIX 3
DETAILS OF IRREVOCABLE UNDERTAKINGS AND LETTER OF INTENT
1. May Gurney Directors
The May Gurney Directors have given irrevocable undertakings in
relation to the Merger as follows:
Name of May Number of May Gurney Percentage of
Gurney Director Shares in respect May Gurney existing
giving undertaking of which undertaking issued share
is given capital
--------------------- ---------------------- ---------------------
Baroness Margaret
Ford 31,762 0.05%
--------------------- ---------------------- ---------------------
Mark Hazlewood 703 0.01%
--------------------- ---------------------- ---------------------
Ishbel Macpherson 21,900 0.03%
--------------------- ---------------------- ---------------------
Andrew Walker 7,500 0.01%
--------------------- ---------------------- ---------------------
TOTAL 61,865 0.09%[6]
--------------------- ---------------------- ---------------------
6 Percentages may not add due to rounding.
These irrevocable undertakings include undertakings:
(i) to vote, or procure the vote, in favour of the Scheme at the
Court Meeting and the Special Resolution at the May Gurney General
Meeting; and
(ii) if Costain exercises its right to structure the Merger as a
Merger Offer, to accept, or procure the acceptance of, such Merger
Offer.
These irrevocable undertakings stipulate that they will cease to
be binding if this announcement is not released by 31 May 2013 (or
such later date as May Gurney and Costain may agree).
Mark Hazlewood's interest in May Gurney Shares is held in the
SIP. Mark Hazlewood will, therefore, be required to instruct the
SIP Trustee as to how to vote on the May Gurney Shares which the
SIP Trustee holds on his behalf. In accordance with the rules of
the SIP, where the voting at the Court Meeting and/or General
Meeting takes place by way of a show of hands the SIP Trustee may
only vote on Mark Hazlewood's May Gurney Shares if the directions
it has received from all participants in the SIP are identical. The
terms of Mark Hazlewood's irrevocable undertaking reflect this
restriction on Mark Hazlewood's ability to vote at the Court
Meeting and General Meeting.
2. Other May Gurney Shareholders
Irrevocable undertakings
Costain has received irrevocable undertakings in relation to the
Merger as follows:
Name of May Number of May Gurney Percentage of
Gurney Shareholder Shares in respect May Gurney existing
giving undertaking of which undertaking issued share
is given capital
--------------------- ---------------------- ---------------------
David and Wendy
Sterry (acting
as trustees
of various
trusts) 6,508,800 9.27%
--------------------- ---------------------- ---------------------
Artemis Investment
Management
LLP 5,465,655 7.78%
--------------------- ---------------------- ---------------------
Polar Capital
LLP 3,534,148 5.03%
--------------------- ---------------------- ---------------------
Invesco Asset
Management
Limited 2,220,835 3.16%
--------------------- ---------------------- ---------------------
May Gurney
Group Trustees
Limited (acting
as trustee
of the May
Gurney Group
Limited Employee
Share Ownership
Trust) 1,434,378 2.04%
--------------------- ---------------------- ---------------------
TOTAL 19,163,816 27.28%
--------------------- ---------------------- ---------------------
These irrevocable undertakings include undertakings:
(i) to vote, or procure the vote, in favour (or to submit, or
procure the submission of, Forms of Proxy voting in favour) of the
Scheme at the Court Meeting and the Special Resolution at the May
Gurney General Meeting; and
(ii) if Costain exercises its right to structure the Merger as a
Merger Offer, to accept, or procure the acceptance of, such Merger
Offer.
The irrevocable undertaking given by David and Wendy Sterry
(acting as trustees of various trusts) stipulates that it will
cease to be binding if:
(i) this announcement is not released by 8.00 a.m. on 28 March 2013; or
(ii) the Scheme has not become effective or the Merger Offer has
not become wholly unconditional by 30 June 2013; or
(iii) (a) an announcement is made in accordance with Rule 2.7 of
the City Code of a competing offer (whether made by way of an offer
or a scheme of arrangement) in respect of May Gurney Shares and
such competing offer represents a value at the date and time in
London of such announcement of not less than 110 per cent. of the
value of the Merger Offer or the Scheme (as the case may be) as at
5.00 p.m. (London time) on the last dealing day prior to the date
of such announcement; and
(b) at any time following such announcement David and Wendy Sterry notify Costain in writing that they no longer intend to accept the Merger Offer or vote in favour of the Scheme (as the case may be).
The irrevocable undertaking given by Artemis Investment
Management LLP ('Artemis') stipulates that it will cease to be
binding if:
(i) this announcement is not released by 29 March 2013 (or such
later date as Costain and May Gurney may agree); or
(ii) (a) an announcement is made in accordance with Rule 2.7 of
the City Code of a competing offer (whether made by way of an offer
or a scheme of arrangement) in respect of May Gurney Shares and
such competing offer represents a value at the date and time in
London of such announcement of not less than 110 per cent. of the
value of the Merger Offer or the Scheme (as the case may be) as at
5.00 p.m. (London time) on the last dealing day prior to the date
of such announcement; and
(b) at any time following such announcement Artemis notifies
Costain in writing that, or Artemis otherwise makes an announcement
or notification under Rule 2.11(d) of the City Code that, Artemis
no longer intends to accept the Merger Offer or vote in favour of
the Scheme (as the case may be).
The irrevocable undertaking given by Polar Capital LLP ('Polar')
stipulates that it will cease to be binding if:
(i) this announcement is not released by 28 March 2013 (or such
later date as Costain and May Gurney may agree); or
(ii) (a) an announcement is made in accordance with Rule 2.7 of
the City Code of a competing offer (whether made by way of an offer
or a scheme of arrangement) in respect of May Gurney Shares;
and
(b) at any time following such announcement Polar notifies
Costain in writing that, or Polar otherwise makes an announcement
or notification under Rule 2.11(d) of the City Code that, Polar no
longer intends to accept the Merger Offer or vote in favour of the
Scheme (as the case may be).
The irrevocable undertaking given by Invesco Asset Management
Limited ('Invesco') stipulates that it will cease to be binding
if:
(i) this announcement is not released by 28 March 2013 (or such
other date as Invesco may agree); or
(ii) an announcement is made in accordance with Rule 2.7 of the
City Code of a competing offer (whether made by way of an offer or
a scheme of arrangement or any other transaction which constitutes
a takeover offer for the purposes of the City Code) in respect of
May Gurney Shares and such competing offer represents a value which
is higher than the value of the Merger Offer or the Scheme; or
(iii) the Merger Offer lapses or is withdrawn or the Scheme does
not become effective in accordance with its terms by 30 June 2013
(or, if earlier, the long stop date agreed between Costain and May
Gurney and specified in the Scheme Document by which the Scheme is
to become effective or be withdrawn) or is withdrawn.
Invesco also reserves the right, in circumstances where a client
has terminated its professional relationship with Invesco and is no
longer bound to honour any pre-existing obligations or
undertakings, to transfer any shares owned by such client and
subject to the undertaking to a replacement fund manager/custodian.
In such circumstances the provisions of the undertaking will lapse
and cease to apply in respect of those shares.
The irrevocable undertaking given by May Gurney Group Trustees
Limited (acting as trustee of the May Gurney Group Limited Employee
Share Ownership Trust) ('MGGT') stipulates that it will cease to be
binding if:
(i) Costain has not announced a firm intention to proceed with
the Merger by 30 April 2013 (or such later date as Costain and May
Gurney may agree); or
(ii) (a) an announcement is made in accordance with Rule 2.7 of
the City Code of a competing offer (whether made by way of an offer
or a scheme of arrangement) in respect of May Gurney Shares and
such competing offer represents a value at the date and time in
London of such announcement of not less than 110 per cent. of the
value of the Merger Offer or the Scheme (as the case may be) as at
5.00 p.m. (London time) on the last dealing day prior to the date
of such announcement; and
(b) at any time following such announcement MGGT notifies
Costain in writing that, or MGGT otherwise makes an announcement or
notification under Rule 2.11(d) of the City Code that, MGGT no
longer intends to accept the Merger Offer or vote in favour of the
Scheme (as the case may be).
Letter of intent
Costain has received a non-binding letter of intent from Aviva
Investors Global Services Limited (in its capacity as investment
manager for certain clients who hold May Gurney Shares) ('Aviva')
in respect of 3,623,051 May Gurney Shares (or approximately 5.16%
of May Gurney's issued share capital), pursuant to which Aviva
indicates its intention to vote, or to procure the vote, in favour
of the Scheme or to accept, or procure the acceptance of, the
Merger Offer, as the case may be, in respect of those May Gurney
Shares.
3. Costain Directors
The Costain Directors have given irrevocable undertakings in
relation to the Merger as follows:
Name of Costain Number of Costain Percentage of
Director giving Shares in respect Costain existing
undertaking of which undertaking issued share
is given capital
------------------- ---------------------- ------------------
David Allvey 5,250 0.01%
------------------- ---------------------- ------------------
Andrew Wyllie 200,452 0.31%
------------------- ---------------------- ------------------
Tony Bickerstaff 117,198 0.18%
------------------- ---------------------- ------------------
Michael Alexander 18,364 0.03%
------------------- ---------------------- ------------------
James Morley 27,000 0.04%
------------------- ---------------------- ------------------
TOTAL 368,264 0.56%[7]
------------------- ---------------------- ------------------
7 Percentages may not add due to rounding.
These irrevocable undertakings include undertakings to vote in
favour of the resolutions to be proposed at the Costain General
Meeting to approve the Merger and related matters.
These irrevocable undertakings stipulate that they will cease to
be binding if this announcement is not released by 31 May 2013 (or
such later date as Costain may determine).
4. Other Costain Shareholders
Costain has received irrevocable undertakings in relation to the
Merger as follows:
Name of Costain Number of Costain Percentage of
Shareholder Shares in respect Costain existing
giving undertaking of which undertaking issued share
is given capital
---------------------- ---------------------- ------------------
UEM Builders
Berhad 13,810,850 21.07%
---------------------- ---------------------- ------------------
Mohammed Adbulmohsin
Al Kharafi
& Sons For
General Trading,
General Contracting
and Industrial
Structures
W.L.L. 13,789,490 21.04%
---------------------- ---------------------- ------------------
TOTAL 27,600,340 42.11%
---------------------- ---------------------- ------------------
These irrevocable undertakings include undertakings to vote in
favour of the resolutions to be proposed at the Costain General
Meeting to approve the Merger and related matters.
These irrevocable undertakings will cease to be binding if the
Costain General Meeting is held after, or the resolutions to be
proposed at the Costain General Meeting are not passed by, 30
September 2013.
APPENDIX 4
DEFINITIONS
'Admission' the New Costain Shares being
admitted to the Official
List with a premium listing
and to trading on the London
Stock Exchange's Main Market
for listed securities
'AIM' the market of that name
operated by the London Stock
Exchange
'AIM Rules' Rules and Guidance notes
for AIM Companies and their
nominated advisers issued
by the London Stock Exchange
from time to time relating
to AIM traded securities
and the operation of AIM
'Board' the board of directors
'Business Day' a day, (other than a Saturday,
Sunday, public or bank holiday)
on which banks are generally
open for business in London
other than solely for trading
and settlement in Euro
'Canaccord Genuity' Canaccord Genuity Limited
'Capital Reduction' the proposed reduction of
share capital of May Gurney
pursuant to the Scheme
'City Code' the City Code on Takeovers
and Mergers
'Combined Circular/Prospectus' the combined circular and
prospectus relating to the
approval of the Merger and
the issue of the New Costain
Shares to be published and
sent to Costain Shareholders
'Combined Group' the combined group following
the Merger, comprising the
Costain Group and the May
Gurney Group
'Companies Act' the Companies Act 2006,
as amended from time to
time
'Competition Commission' the independent public body
which conducts second phase
in-depth inquiries into
mergers, markets and the
regulation of the major
regulated industries in
the United Kingdom (or any
successor body or bodies
carrying out the same functions
in the United Kingdom from
time to time)
'Conditions' the conditions and certain
further terms of the Merger
set out in Appendix 1 to
this announcement
'Costain' Costain Group PLC, incorporated
in England with registered
number 01393773
'Costain Directors' the board of directors of
Costain
'Costain General the general meeting of Costain
Meeting' to be convened in connection
with the Merger, notice
of which will be set out
in the Combined Circular/Prospectus,
including any adjournment
thereof
'Costain Group' Costain and its subsidiary
undertakings and associated
undertakings
'Costain Pension means the Costain Pension
Scheme' Scheme, governed and administered
in accordance with the provisions
of a definitive trust deed
and rules dated 4 March
2011, as amended
'Costain Pension means Costain Pension Scheme
Trustee' Trustee Limited, as trustee
of the Costain Pension Scheme
'Costain Shareholders' holders of Costain Shares
'Costain Shares' the ordinary shares of 50
pence each in the capital
of Costain
'Court' the High Court of Justice
in England and Wales
'Court Meeting' the meeting of holders of
Scheme Shares convened by
order of the Court pursuant
to section 899 of the Companies
Act for the purpose of considering
and, if thought fit, approving
the Scheme (with or without
amendment), including any
adjournment thereof
'Court Orders' the Scheme Court Order and
the Reduction Court Order
'CREST' the relevant system (as
defined in the Uncertificated
Securities Regulations 2001
(SI 2001/3755)) in respect
of which Euroclear UK &
Ireland Limited is the Operator
(as defined in the Regulations)
'Dealing Disclosure' an announcement pursuant
to Rule 8 of the City Code
containing details of dealings
in interests in relevant
securities of a party to
an offer
'DTRs' the FSA's Disclosure and
Transparency Rules located
in the FSA Handbook and
made under the Market Abuse
Directive (Disclosure Rules)
Instrument 2005 and the
Transparency Obligations
Directive (Disclosure and
Transparency Rules) Instrument
2006 (as amended from time
to time)
'Effective Date' the date on which the Scheme
becomes effective in accordance
with its terms
'Fairly Disclosed' the information which has
been fairly disclosed: (i)
in writing prior to the
date of this announcement
by or on behalf of May Gurney
to Costain or Costain's
financial, accounting, tax
or legal advisers (specifically
as Costain's advisers in
relation to the Merger);
(ii) in May Gurney's published
annual and/or half year
report and accounts for
the relevant financial period
or periods referred to in
the relevant Condition;
(iii) in a public announcement
made in accordance with
the AIM Rules or the DTRs
by May Gurney prior to the
date of this announcement;
or (iv) in this announcement
'Forms of Proxy' the form of proxy in connection
with each of the Court Meeting
and the May Gurney General
Meeting, which shall accompany
the Scheme Document
'FSA' the United Kingdom's Financial
Services Authority
'Listing Rules' the rules and regulations
made by the UK Listing Authority
under Part VI of the Financial
Services and Markets Act
2000 (as amended), and contained
in the UK Listing Authority's
publication of the same
name (as amended from time
to time)
'London Stock Exchange' London Stock Exchange plc
'May Gurney' May Gurney Integrated Services
plc, incorporated in England
with registered number 04321657
'May Gurney Directors' the board of directors of
May Gurney
'May Gurney General the general meeting of May
Meeting' Gurney Shareholders to be
convened to consider and
if thought fit pass, inter
alia, the Special Resolution
'May Gurney Group' May Gurney and its subsidiary
undertakings and associated
undertakings
'May Gurney Second the second interim dividend
Interim Dividend' of 5.6 pence per May Gurney
Share payable by May Gurney
to May Gurney Shareholders
who are on May Gurney's
register of members at the
Scheme Record Time, conditional
upon the Merger becoming
effective
'May Gurney Share the May Gurney Integrated
Schemes' Services Unapproved Share
Option Scheme, May Gurney
Integrated Services plc
Long-Term Incentive Plan,
the May Gurney Integrated
Services plc Company Share
Option Plan (2007), the
May Gurney Integrated Services
plc Savings Related Share
Option Scheme (2007), the
May Gurney Integrated Services
plc Deferred Share Bonus
Plan, the May Gurney Integrated
Services plc Share Incentive
Plan, the standalone share
option to acquire 151,515
May Gurney Shares granted
to Nicholas Chesters on
12 March 2007 and the standalone
share option to acquire
5,961 May Gurney Shares
granted to Matthew Hall
on 25 July 2007
'May Gurney Shareholders' holders of May Gurney Shares
'May Gurney Shares' the ordinary shares of 5
pence each in the capital
of May Gurney
'Merger' the proposed acquisition
of the entire issued and
to be issued share capital
of May Gurney by Costain,
to be effected by the Scheme
as described in this announcement
(or by the Merger Offer
under certain circumstances
described in this announcement)
'Merger Offer' should the Merger be implemented
by way of a takeover offer
as defined in Chapter 3
of Part 28 of the Companies
Act, the recommended offer
to be made by or on behalf
of Costain to acquire the
entire issued and to be
issued share capital of
May Gurney and, where the
context admits, any subsequent
revision, variation, extension
or renewal of such offer
'New Costain Shares' the new Costain Shares to
be issued pursuant to the
Scheme
'offer period' the period commencing on
26 March 2013 and ending
on the earlier of the date
on which the Scheme becomes
effective and/or the date
on which the Scheme lapses
or is withdrawn (or such
other date as the Panel
may decide)
'Official List' the official list of the
UK Listing Authority
'OFT' the Office of Fair Trading
of the United Kingdom (or
any successor authority
or authorities carrying
out consumer credit regulatory
and/or competition law and
merger control enforcement
functions in the United
Kingdom from time to time)
'Opening Position an announcement containing
Disclosure' details of interests or
short positions in, or rights
to subscribe for, any relevant
securities of a party to
the offer if the person
concerned has such a position
'Panel' the Panel on Takeovers and
Mergers
'Reduction Court the order of the Court under
Order' section 648 of the Companies
Act confirming the Capital
Reduction
'Registrar of Companies' the Registrar of Companies
in England and Wales
'Restricted Jurisdiction' any jurisdiction where local
laws or regulations may
result in a significant
risk of civil, regulatory
or criminal exposure if
information concerning the
Merger is sent or made available
in that jurisdiction (in
accordance with Rule 30.3
of the City Code)
'Rothschild' N M Rothschild & Sons Limited
'Scheme' the proposed scheme of arrangement
under Part 26 of the Companies
Act between May Gurney and
Scheme Shareholders to implement
the Merger
'Scheme Court Hearing' the hearing of the Court
to sanction the Scheme under
section 899 of the Companies
Act
'Scheme Court Order' the order of the Court sanctioning
the Scheme under section
899 of the Companies Act
'Scheme Document' the document to be dispatched
to May Gurney Shareholders
including the particulars
required by section 897
of the Companies Act
'Scheme Record Time' the time and date specified
in the Scheme Document,
expected to be 6.00 p.m.
(London time) on the Business
Day immediately prior to
the date of the Reduction
Court Hearing
'Scheme Shareholders' holders of Scheme Shares
'Scheme Shares' 1. the May Gurney Shares
in issue at the date of
the Scheme Document;
2. any May Gurney Shares
issued after the date of
the Scheme Document and
prior to the Voting Record
Time; and
3. any May Gurney Shares
issued at or after the Voting
Record Time and prior to
6.00 p.m. (London time)
on the day before the date
on which the Reduction Court
Order is made in respect
of which the original or
any subsequent holder thereof
is bound by the Scheme,
or shall by such time have
agreed in writing to be
bound by the Scheme,
in each case, save for any
May Gurney Shares legally
or beneficially held by
any member of the Costain
Group
'SIP' the May Gurney Share Incentive
Plan
'SIP Trustee' the trustee of the SIP
'Special Resolution' the special resolution to
be proposed by May Gurney
at the May Gurney General
Meeting in connection with,
amongst other things, the
approval of the Scheme and
confirmation of the Capital
Reduction, the amendment
of May Gurney's articles
of association and such
other matters as may be
necessary to implement the
Scheme and the delisting
of the May Gurney shares
'Statement of Capital' the statement of capital
(approved by the Court)
showing, with respect to
May Gurney's share capital
as altered by the Reduction
Court Order, the information
required by section 649
of the Companies Act
'Third Party' means a central bank, government
or governmental, quasi-governmental,
supranational, statutory,
regulatory, environmental
or investigative body or
authority, court, trade
agency, professional association,
institution, employee representative
body or any other body or
person whatsoever in any
jurisdiction
'UK' or 'United Kingdom' the United Kingdom of Great
Britain and Northern Ireland
'UK Listing Authority' the FSA as the competent
authority for listing in
the United Kingdom
'US' or 'United States' the United States of America,
its territories and possessions,
any state of the United
States of America and the
District of Columbia
'US Exchange Act' the US Securities Exchange
Act of 1934 (as amended
from time to time)
'Voting Record Time' 6.00 p.m. (London time)
on the day prior to the
day immediately before the
Court Meeting or any adjournment
thereof (as the case may
be)
'Wider Costain Group' means Costain and its subsidiary
undertakings, associated
undertakings and any other
undertaking in which Costain
and/or such undertakings
(aggregating their interests)
have a direct or indirect
interest in 10% or more
of the equity share capital
(as defined in the Companies
Act)
'Wider May Gurney means May Gurney and its
Group' subsidiary undertakings,
associated undertakings
and any other undertaking
in which May Gurney and/or
such undertakings (aggregating
their interests) have a
direct or indirect interest
in 10% or more of the equity
share capital (as defined
in the Companies Act)
For the purposes of this announcement, 'subsidiary', 'subsidiary
undertaking' and 'undertaking' have the meanings given by the
Companies Act and 'associated undertaking' has the meaning given by
paragraph 19 of Schedule 6 to the Large and Medium-sized Companies
and Groups (Accounts and Reports) Regulations 2008 other than
paragraph 19(1)(b) of Schedule 6 to those Regulations which shall
be excluded for this purpose.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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