RNS Number:2217V
Kohlberg Kravis Roberts & Co LP
20 April 2007
Not for release, publication or distribution in whole or in part in, into or
from any jurisdiction where to do the same would constitute a violation of the
relevant laws of such jurisdiction
20 April 2007
Recommended acquisition
of
Alliance Boots plc
by
AB Acquisitions Limited
a company controlled by certain funds advised by Kohlberg Kravis Roberts and by
Stefano Pessina
Summary
* The board of directors of AB Acquisitions and the Independent
Directors of Alliance Boots are pleased to announce that they have reached
agreement on the terms of a recommended acquisition of Alliance Boots at a price
of 1,090 pence in cash for each Alliance Boots Share, valuing Alliance Boots at
approximately #10.6 billion. The price is inclusive of any final dividend to be
declared in respect of the financial year ended 31 March 2007.
* AB Acquisitions is a newly incorporated company formed at the
direction of funds advised by Kohlberg Kravis Roberts and Stefano Pessina for
the purpose of implementing the Transaction. Stefano Pessina is the Executive
Deputy Chairman of Alliance Boots and, directly or indirectly through entities
wholly controlled by him, its largest shareholder, with an interest in
145,599,108 Alliance Boots Shares (approximately 15.05 per cent. of the issued
share capital of Alliance Boots).
* Alliance Boots is an international pharmacy-led health and beauty
group with a leading European retail pharmacy business comprising approximately
3,100 retail outlets (including associates) and a leading European distributor
with a wholesale network of around 380 depots (including associates) serving
around 120,000 outlets.
* The price of 1,090 pence for each Alliance Boots Share represents:
* a premium of 35.6 per cent. to 803.9 pence, being the average Closing
Price per Alliance Boots Share over the one month ended 8 March 2007, the
Business Day prior to Alliance Boots' announcement that it had received an
approach; and
* a premium of 33.7 per cent. to 815 pence, being the Closing Price per
Alliance Boots Share on 8 March 2007, the Business Day prior to Alliance Boots'
announcement that it had received an approach.
* A Loan Note Alternative will be made available.
* AB Acquisitions has held amicable and constructive discussions with
the trustees (or trustees' representatives) of each of the Alliance Boots
Pensions Schemes. AB Acquisitions recognises the importance of ensuring that
these schemes are prudently funded and is working to reach agreement with the
trustees on the appropriate levels of funding for the schemes, including by way
of additional contributions.
* The Independent Directors, who have been so advised by Goldman Sachs
and Greenhill, consider the terms of the Transaction to be fair and reasonable.
In providing their advice, Goldman Sachs and Greenhill have taken into account
the commercial assessments of the Independent Directors. Accordingly, the
Independent Directors intend unanimously to recommend that Alliance Boots
Shareholders vote in favour of the Transaction at the Meetings (or, in the event
that the Transaction is implemented by way of a takeover offer, to accept or
procure acceptance of such offer) as nine of the Independent Directors have
irrevocably undertaken to do so in respect of their own aggregate beneficial
holdings of 223,550 Alliance Boots Shares, representing (as at the date of this
announcement), approximately 0.023 per cent. of the existing issued ordinary
share capital of Alliance Boots. Greenhill is acting as the independent
financial adviser to Alliance Boots for the purposes of providing independent
advice to the Independent Directors of Alliance Boots on the Transaction under
Rule 3 of the City Code.
* It is intended that the acquisition will be implemented by way of a
court-sanctioned scheme of arrangement under section 425 of the Companies Act.
The Scheme Document will be posted to Shareholders as soon as reasonably
practicable.
* Commenting on today's announcement, Dominic Murphy, Partner of
Kohlberg Kravis Roberts, said:
"Kohlberg Kravis Roberts is pleased to have received the Board's recommendation.
Our objective is to work with Stefano Pessina and the existing management team
to enhance Alliance Boots' position as a global leader in the healthcare
services and beauty industries. Kohlberg Kravis Roberts is committed to
building upon Alliance Boots' unique position as a trusted UK brand and retail
institution and further developing the Group's existing businesses, both in the
UK and overseas."
* Stefano Pessina, said:
"The markets we serve are changing dynamically. We are committed to
accelerating the development of Alliance Boots in order to meet the challenges
and opportunities that we face and to build a successful global pharmacy-led
healthcare and beauty group."
* Commenting on the Transaction, Sir Nigel Rudd, Chairman of Alliance
Boots, said:
"I have been privileged to chair one of this country's greatest retail brands
and to have put in place the management team that has put this company back on
the road to success. The formation last year of Alliance Boots created a hugely
valuable business and this offer reflects that. I am delighted that the Board
has been able to achieve such a good price for shareholders."
* UniCredit Markets & Investment Banking, JPMorgan Cazenove and Merrill
Lynch are acting as lead financial advisers to AB Acquisitions. Citi has also
provided financial advice to AB Acquisitions. JPMorgan Cazenove and Merrill
Lynch are acting as corporate brokers to AB Acquisitions.
* Goldman Sachs International is acting as lead financial adviser to
Alliance Boots. Greenhill is acting as independent financial adviser to Alliance
Boots for the purposes of Rule 3 of the City Code. Credit Suisse and UBS are
corporate brokers to Alliance Boots and have also provided financial advice to
Alliance Boots.
This summary should be read in conjunction with the following announcement and
the Appendices.
Appendix I sets out the Conditions and certain further terms of the Transaction.
Appendix II contains source notes relating to certain information contained in
this announcement. Appendix III contains certain details relating to the
irrevocable undertakings given by Alliance Boots Directors. Certain terms used
in this announcement are defined in Appendix IV to this announcement.
Enquiries:
Kohlberg Kravis Roberts /AB Acquisitions Tel: +44 (0)20 7839 9800
Dominic Murphy
UniCredit Markets & Investment Banking (lead financial Tel: +44 (0)20 7826 1788
adviser to AB Acquisitions)
Edoardo Spezzotti
David Clark
Florian Potyka
JPMorgan Cazenove (lead financial adviser and corporate Tel: +44 (0)20 7588 2828
broker to AB Acquisitions)
David Mayhew
Mark Breuer
Dwayne Lysaght
Merrill Lynch (lead financial adviser and corporate Tel: +44 (0)20 7628 1000
broker to AB Acquisitions)
Richard Girling
Simon Mackenzie Smith
Jamie Heath
Gavin Anderson & Company (PR adviser to AB Tel: +44 (0)20 7554 1400
Acquisitions)
Richard Constant
Alliance Boots
Donald McCabe (Media) Tel: +44 (0)20 7138 1164
Gerald Gradwell (Investors) Tel: +44 (0)20 7138 1169
Goldman Sachs International (lead financial adviser to Tel: +44 (0)20 7774 1000
Alliance Boots)
Simon Dingemans
Nick Harper
Greenhill (independent financial adviser to Alliance Tel: +44 (0)20 7198 7400
Boots)
James Lupton
Brian Cassin
Credit Suisse (corporate broker to Alliance Boots) Tel: +44 (0)20 7888 8888
Nick Bowers
James Leigh-Pemberton
UBS (corporate broker to Alliance Boots) Tel: +44 (0)20 7567 8000
Oliver Pawle
John Woolland
Finsbury (PR adviser to Alliance Boots) Tel: +44 (0)20 7251 3801
James Murgatroyd
Not for release, publication or distribution in whole or in part in, into or
from any jurisdiction where to do the same would constitute a violation of the
relevant laws of such jurisdiction
20 April 2007
Recommended acquisition
of
Alliance Boots plc
by
AB Acquisitions Limited
a company controlled by certain funds advised by Kohlberg Kravis Roberts and by
Stefano Pessina
1. Introduction
The board of directors of AB Acquisitions and the Independent Directors of
Alliance Boots are pleased to announce that they have reached agreement on the
terms of the recommended acquisition by AB Acquisitions of the entire issued and
to be issued share capital of Alliance Boots.
AB Acquisitions is a newly incorporated company formed at the direction of funds
advised by Kohlberg Kravis Roberts and Stefano Pessina for the purpose of
implementing the Transaction .
Alliance Boots is an international pharmacy-led health and beauty group with a
leading European retail pharmacy business comprising approximately 3,100 retail
outlets (including associates) and a leading European distributor with a
wholesale network of around 380 depots (including associates) serving around
120,000 outlets.
2. The Transaction
It is intended that the Transaction will be effected by way of a
court-sanctioned scheme of arrangement under Section 425 of the Companies Act.
Under the terms of the Scheme, which will be subject to the Conditions and other
terms set out in this announcement and to the further terms to be set out in the
Scheme Document, Alliance Boots Shareholders (other than Stefano Pessina in
respect of the SP Rollover Shares) will receive, subject to elections under the
Loan Note Alternative:
For each Alliance Boots Share 1,090 pence in cash
The terms of the Transaction value the entire issued and to be issued share
capital of Alliance Boots at approximately #10.6 billion and represent:
* a premium of 35.6 per cent. to 803.9 pence, being the average Closing
Price per Alliance Boots Share over the one month ended 8 March 2007, the
Business Day prior to Alliance Boots' announcement that it had received an
approach; and
* a premium of 33.7 per cent. to 815 pence, being the Closing Price per
Alliance Boots Share on 8 March 2007, the Business Day prior to Alliance Boots'
announcement that it had received an approach.
The price is inclusive of any final dividend to be declared in respect of the
financial year ended 31 March 2007.
A Loan Note Alternative will be made available.
Stefano Pessina will receive ordinary shares in AB Acquisitions Holdings in
consideration for the SP Rollover Shares to be cancelled under the Scheme.
3. Background to and reasons for the Transaction
Kohlberg Kravis Roberts and Stefano Pessina believe that the rapid structural
changes in the pharmacy retail and wholesale markets in Europe will require an
acceleration of Alliance Boots' transition to a pharmacy-led health and beauty
and services-oriented business. It is intended that this be carried out
alongside the implementation of the integration plan and the execution of a
targeted international acquisition programme. Kohlberg Kravis Roberts and
Stefano Pessina believe that this can be best executed under private ownership.
Kohlberg Kravis Roberts and Stefano Pessina recognise the special position of
Boots as a trusted UK health and beauty retailer and intend to enhance Alliance
Boots' positioning as a leading provider of healthcare and beauty advice and
services in the local community, both by increasing investment in existing
stores and by expanding the store portfolio.
Kohlberg Kravis Roberts and Stefano Pessina believe that through their
experience of successfully operating comparable business models and their access
to significant capital resources, they are well positioned to support Alliance
Boots in its next phase of development.
4. Recommendation
The Independent Directors, who have been so advised by Goldman Sachs and
Greenhill, consider the terms of the Transaction to be fair and reasonable. In
providing their advice, Goldman Sachs and Greenhill have taken into account the
commercial assessments of the Independent Directors.
Accordingly, the Independent Directors intend unanimously to recommend that
Alliance Boots Shareholders vote in favour of the Transaction at the Meetings
(or, in the event that the Transaction is implemented by way of a takeover
offer, to accept or procure acceptance of such offer) as nine of the Independent
Directors have irrevocably undertaken to do so in respect of their own aggregate
beneficial holdings of 223,550 Alliance Boots Shares, representing (as at the
date of this announcement), approximately 0.023 per cent. of the existing
issued ordinary share capital of Alliance Boots.
Greenhill is acting as the independent financial adviser to Alliance Boots for
the purposes of providing independent advice to the Independent Directors of
Alliance Boots on the Transaction under Rule 3 of the City Code.
5. Background to, and reasons for, the recommendation
On 9 March 2007 Alliance Boots' Board issued a statement indicating that a
preliminary and highly conditional proposal had been received from an
unidentified potential offeror. Later that day Kohlberg Kravis Roberts and
Stefano Pessina confirmed that they had made a joint proposal, indicating a
possible offer price of 1,000 pence per share in cash. The proposal was subject
to, inter alia, due diligence and a recommendation from the Independent
Directors of Alliance Boots.
On 12 March 2007 Alliance Boots issued a further statement noting that the
Independent Directors had met to discuss the preliminary proposal made by
Kohlberg Kravis Roberts and Stefano Pessina and that they had concluded that it
did not reflect the fundamental value of Alliance Boots or the attractive
prospects, opportunities and synergies available to Alliance Boots following the
recent completion of its merger. Because of their connections with the proposal,
neither Stefano Pessina nor Ornella Barra attended the meeting and hence were
not party to this conclusion. It was agreed that neither would take any part in
further discussions relating to the proposal from Kohlberg Kravis Roberts and
Stefano Pessina or any competing proposal that might be made.
Alliance Boots issued a trading update announcement on 28 March 2007, prior to
the end of its financial year, highlighting that results for the year ending 31
March 2007 were expected to be in line with management's targets. The following
day Alliance Boots received a revised proposal from Kohlberg Kravis Roberts and
Stefano Pessina, detailing an increased possible offer price of 1,040 pence per
share in cash subject to, inter alia, due diligence and a recommendation from
the Independent Directors. On the basis of the revised proposal Kohlberg Kravis
Roberts and Stefano Pessina were granted a limited period to undertake
confirmatory due diligence.
On 6 April 2007 Alliance Boots received a request from Terra Firma and The
Wellcome Trust under Rule 20.2 of the Code to obtain a copy of any information
which had been provided to any other potential offeror for Alliance Boots.
Information was subsequently provided to Terra Firma and The Wellcome Trust,
following which they submitted a highly conditional indication of interest to
Alliance Boots at 1,085 pence per share in cash. This indicative proposal was
subject to, inter alia, substantial further due diligence and a recommendation
from the Independent Directors.
On 16 April 2007 Alliance Boots received a letter from Kohlberg Kravis Roberts
indicating that it had concluded its due diligence and that they and Stefano
Pessina wished to proceed rapidly towards an announcement of an offer at 1,040
pence per share. In the light of the possible interest from Terra Firma and The
Wellcome Trust, the Board concluded that it could not progress Kohlberg Kravis
Roberts' existing proposal and communicated this to Kohlberg Kravis Roberts.
Kohlberg Kravis Roberts and Stefano Pessina then submitted a revised increased
proposal that has been the subject of detailed negotiation, resulting in the
Transaction that is now being recommended by the Independent Directors.
In deciding to recommend the Transaction, the Independent Directors considered
that the Transaction's superior value, timing and certainty made it more
attractive to Alliance Boots shareholders than the range of other strategic
options available. In addition, the Independent Directors took into account a
number of other factors, including the fact that the terms of the Transaction
allow shareholders to realise their investment at a substantial premium to the
prices at which Alliance Boots Shares were trading prior to Kohlberg Kravis
Roberts' and Stefano Pessina's initial approach, as noted above.
On the basis of these and such other factors as the Independent Directors
considered relevant, the Independent Directors concluded that the terms of the
Transaction were fair and reasonable and should be recommended to shareholders.
6. Irrevocable undertakings
AB Acquisitions has received irrevocable undertakings from nine of the
Independent Directors to vote in favour of the Scheme and the Special Resolution
in respect of a total of 223,550 Alliance Boots Shares, representing, in
aggregate, approximately 0.023 per cent. of Alliance Boots' existing issued
share capital.
Further details of these irrevocable undertakings are set out in Appendix III to
this announcement.
7. Information on Alliance Boots
Alliance Boots is an international pharmacy-led health and beauty group with
operations in retail and wholesale. Alliance Boots comprises approximately
3,100 retail outlets (including associates), of which approximately 2,800 have a
pharmacy, with a wholesale network of around 380 depots (including associates)
serving around 120,000 outlets.
Retail
The Alliance Boots retail network in the UK comprises two businesses, Health &
Beauty and Community Pharmacy, which together operate approximately 2,550 retail
outlets, of which approximately 2,250 have a pharmacy.
* The Community Pharmacy business operates around 1,000 retail outlets.
Approximately 950 of these are community pharmacies, the majority of which will
be branded "your local Boots pharmacy" over two years starting from summer 2007.
Dispensing and healthcare typically account for the majority of revenues.
These pharmacies are typically relatively small, are in community and secondary
high street locations and have a strong emphasis on healthcare and advice.
These are well placed to provide an increasing role in the provision of
healthcare services, working closely with other primary healthcare providers.
* The Health & Beauty business operates around 1,550 retail outlets,
approximately 1,300 of which have a pharmacy. These outlets, the majority of
which are large destination stores, are typically located in prime high street
and edge of town locations. They sell a much broader range of health and beauty
products than sold in community pharmacies, in addition to providing dispensing
and other healthcare services. Products sold include leading Boots own label
brands such as No. 7 and Soltan.
Internationally, Alliance Boots operates around 550 pharmacies in the Republic
of Ireland, Norway, The Netherlands, Russia, Italy, Thailand and, through an
associate, in Switzerland, and also operates a limited number of other retail
outlets.
Wholesale
Alliance Boots is a leading European distributor of healthcare and
pharmaceutical products and services. The Group's wholesaling activities
provide customers and manufacturers with an efficient system for the
distribution of medicines and other healthcare products to pharmacies, supported
by value added services. The Alliance Boots wholesale network (including
associates) operates in 14 countries, through around 380 depots serving around
120,000 outlets.
Interim financial results
For the six months ended 30 September 2006, in order to aid investors'
understanding, Alliance Boots reported pro forma financial information to show
the results from continuing operations of the group, as if the two former groups
(i.e. Boots Group PLC and Alliance UniChem Plc which merged in July 2006) had
always been combined.
On a pro forma basis, for the six months ended 30 September 2006, revenue was
#7,039 million (first half 2004/05 #6,839 million), trading profit (which
comprises profit from operations before non-trading items, amortisation of
certain acquired intangible assets and share of associates' post tax earnings)
was #267 million (first half 2004/05 #260 million) and adjusted earnings (which
comprise profit for the period attributable to equity shareholders before
non-trading items, amortisation of certain acquired intangible assets and IAS 39
timing differences, all net of tax and before exceptional tax credits) was #193
million (first half 2004/05 #175 million).
Pre year-end trading update
On 28 March 2007 Alliance Boots issued a trading update prior to the end of its
financial year highlighting that full year results for the year ending 31 March
2007 were expected to be in line with management's targets. Alliance Boots
intends to announce its preliminary results for the year ended 31 March 2007 on
2 May 2007.
8. Kohlberg Kravis Roberts, Stefano Pessina and equity syndication
(a) Kohlberg Kravis Roberts
Kohlberg Kravis Roberts is one of the world's longest established and most
experienced private equity firms. In its 31-year history, Kohlberg Kravis
Roberts has completed 150 transactions with an aggregate enterprise value in
excess of $279 billion. Kohlberg Kravis Roberts has been an active investor in
the healthcare and retail sectors having made investments with an aggregate
enterprise value of over $60 billion, including investments such as HCA,
Shoppers Drug Mart, Fred Meyer, Auto Zone, Safeway, Stop & Shop, Vendex KBB (now
Maxeda) and Toys "R" Us.
(b) Stefano Pessina
Stefano Pessina is the Executive Deputy Chairman of Alliance Boots. As at the
date of this announcement, he is the largest shareholder in Alliance Boots with
a beneficial interest in 145,599,108 Alliance Boots Shares (approximately 15.05
per cent. of the issued share capital of Alliance Boots at the date of this
announcement). Prior to the Boots - Alliance UniChem merger, Stefano Pessina had
operational responsibility for strategic development, including acquisitions, at
Alliance UniChem Plc, having previously been Chief Executive for three years
until 2004. He was appointed to the board of Alliance UniChem when Alliance
Sante, which he founded in Italy in 1977, merged with UniChem plc to form the
Alliance UniChem Plc.
(c) Equity syndication
It is intended that a proportion of the equity share capital of AB Acquisitions
Holdings will be placed with institutional investors. This share capital has
been underwritten by the following banks:
* Barclays Bank PLC
* BAS Capital Funding Corporation (Bank of America)
* Citigroup Global Markets Limited
* Deutsche Bank AG, London Branch
* J.P. Morgan Ventures Corporation
* Royal Bank of Scotland plc
* UniCredit Group, through Bayerische Hypo- und Vereinsbank AG
9. Information on AB Acquisitions and arrangements between Stefano Pessina
and Kohlberg Kravis Roberts
(a) AB Acquisitions
AB Acquisitions, a wholly-owned indirect subsidiary of AB Acquisitions Holdings,
is a newly-incorporated company formed at the direction of funds advised by
Kohlberg Kravis Roberts and Stefano Pessina for the purpose of implementing the
Transaction.
AB Acquisitions Holdings is a newly-incorporated company formed in Gibraltar at
the direction of funds advised by Kohlberg Kravis Roberts and Stefano Pessina to
be the holding company of the AB Acquisitions Group. AB Acquisitions Holdings is
jointly managed and controlled by the KKR Funds and Stefano Pessina and will
remain so following completion of the Transaction. Further details in relation
to AB Acquisitions and AB Acquisitions Holdings will be contained in the Scheme
Document.
(b) Arrangements between Stefano Pessina and Kohlberg Kravis Roberts
Under the terms of the Scheme, Stefano Pessina will receive ordinary shares in
AB Acquisitions Holdings in consideration for 106,880,734 SP Shares (subject to
adjustments) and 1,090 pence in cash for each of the remaining SP Shares which
are to be cancelled under the Scheme.
In addition to the undertakings described elsewhere in this announcement,
Stefano Pessina and Kohlberg Kravis Roberts have agreed to implement certain
arrangements whereby following the completion of the Transaction each of them
will, in effect, have equal rights in respect of the management of, and will
jointly control, the AB Acquisitions Group (including the Alliance Boots Group).
These will include the right to nominate equal numbers of directors to the
board of each entity in the AB Acquisitions Group and the right to approve the
business plan and budget for the AB Acquisitions Group.
10. AB Acquisitions' intentions for Alliance Boots
AB Acquisitions' investment rationale is predicated on long-term growth. Its
objective is to work with the existing management team to enhance Alliance
Boots' position as a global leader in the healthcare services and beauty
industries. AB Acquisitions is also committed to building upon Alliance Boots'
unique position as a trusted UK brand and retail institution.
AB Acquisitions' planned acquisition of Alliance Boots represents a long-term
commitment to develop further Alliance Boots' existing businesses, both in the
UK and overseas. AB Acquisitions intends to invest further in Alliance Boots in
order to best position Alliance Boots to respond to the rapid structural changes
in the European pharmacy retail and wholesale markets in which it operates.
11. Management and employees
AB Acquisitions attaches great importance to the skills and experience of the
existing management and employees of Alliance Boots, and intends that current
members of senior management will continue to be involved in the ongoing
business of Alliance Boots. AB Acquisitions has given assurances to the board
of directors of Alliance Boots that the existing employment rights of the
directors, management and employees of Alliance Boots will be fully safeguarded
following the completion of the Transaction and that Alliance Boots' pension
obligations will be fully complied with. AB Acquisitions does not plan any
change in the conditions of employment of Alliance Boots' directors, management
and employees.
Stefano Pessina will become Executive Chairman of Alliance Boots following
completion of the Transaction.
12. Alliance Boots Pension Schemes
Alliance Boots operates three defined benefit pension schemes in the UK (the
Alliance Boots Pensions Schemes). AB Acquisitions has held amicable and
constructive discussions with the trustees (or trustees' representatives) of
each of the Alliance Boots Pensions Schemes. Such discussions are ongoing. AB
Acquisitions recognises the importance of ensuring that these schemes are
prudently funded and is working to reach agreement with the trustees on the
appropriate levels of funding for these schemes, including by way of additional
contributions.
13. Alliance Boots Share Schemes
Participants in the Alliance Boots Share Schemes will be contacted regarding the
effect of the Transaction on their rights under these schemes and appropriate
proposals will be made to such participants in due course.
Further details of these proposals will be set out in the Scheme Document.
14. Financing
The cash consideration payable under the Transaction and the costs of the
Transaction will be funded using a mixture of equity subscriptions from the
funds advised by Kohlberg Kravis Roberts, and the equity syndication referred to
in paragraph 8 above and debt funding from a group of lenders including Bank of
America, N.A.; Barclays Bank PLC; UniCredit Markets & Investment Banking, acting
through Bayerische Hypo- und Vereinsbank AG, London Branch; Citibank, N.A.;
Deutsche Bank AG, London Branch; JPMorgan Chase Bank, N.A.; Merrill Lynch
International Bank Limited, London Branch; and Royal Bank of Scotland plc.
The cash consideration payable by AB Acquisitions on the completion of the
Transaction will be commensurately reduced by any issue of Loan Notes pursuant
to elections under the Loan Note Alternative.
UniCredit Markets & Investment Banking, JPMorgan Cazenove and Merrill Lynch are
satisfied that the necessary cash resources are available to AB Acquisitions to
enable it to satisfy in full the consideration payable under the Scheme. Full
implementation of the Transaction would result in cash consideration of
approximately #9.4 billion being payable to Scheme Shareholders and participants
in the Alliance Boots Share Schemes (assuming no elections for the Loan Note
Alternative).
15. Loan Note Alternative
As an alternative to some or all of the cash consideration which would otherwise
be receivable under the Scheme, Alliance Boots Shareholders (other than US
Holders and Restricted Overseas Persons, who may not participate in the Loan
Note Alternative) will, subject to the Conditions and further terms which will
be set out in the Scheme Document and the Loan Note Form of Election, be able to
elect to receive Loan Notes to be issued by AB Acquisitions on the following
basis:
For every #1 of cash consideration #1 nominal value of Loan
Notes
The Loan Notes will be issued by AB Acquisitions, credited as fully paid, in
amounts and integral multiples of #1 and the balance of any entitlement that is
not a whole multiple of #1 will be disregarded and not issued. The Loan Notes
will constitute direct, unsecured and unsubordinated obligations of AB
Acquisitions and will be guaranteed as to payment of principal and interest by
Deutsche Bank AG, London Branch. The Loan Notes will bear interest at a rate of
0.75 per cent. below six-month sterling LIBOR to be determined on the first
business day of each interest period. Interest will be payable in half-yearly
instalments in arrears (less any tax) on 30 June and 31 December in each year.
The first payment of interest will be made on 31 December 2007. On the first
interest payment date, interest will be paid in respect of the period from (and
including) the date of issue of the relevant Loan Notes to (but excluding) 31
December 2007. The Loan Notes will be redeemable, on not less than 14 days
notice, in whole or in part for cash at par at the option of noteholders on any
interest payment date between the later of 6 months after the date of issue and
31 December 2007 on the one hand, and, 31 December 2012 on the other (dates
inclusive).
Unless AB Acquisitions decides otherwise, no Loan Notes will be issued by AB
Acquisitions unless, on or before the date on which the Scheme becomes effective
in accordance with its terms, the aggregate nominal value of all Loan Notes to
be issued as a result of valid elections for the Loan Note Alternative is #20
million or more. If such aggregate nominal value is less than #20 million, any
such election shall, unless AB Acquisitions decides otherwise, be void and the
relevant Alliance Boots Shareholders will be deemed to have elected for cash.
AB Acquisitions may redeem at par all (but not some only) of the Loan Notes (so
long as they have been in issue for at least 6 months) if the aggregate nominal
value of the outstanding Loan Notes falls below the higher of #5 million and 10
per cent. of the Loan Notes issued. AB Acquisitions may purchase any Loan Notes
which have been in issue for at least 6 months at a price by tender available to
all holders of Loan Notes alike (provided that under the terms of such tender
offer, no holders of Loan Notes will be required to sell their Loan Notes to AB
Acquisitions), or otherwise by agreement with any holders of Loan Notes. The
Loan Notes may be redeemed in minimum denominations of #1,000 (or, if lower, the
holder's entire holding of Loan Notes). If not previously redeemed, the final
redemption date will be 31 December 2012. Any Loan Notes outstanding on the
final redemption date will be redeemed at par together with any accrued interest
(less any tax) on that date. At the election of the noteholder, repayment of
principal on redemption of Loan Notes may, in certain circumstances, be in US
Dollars. The Loan Notes will not be transferable, and no application will be
made for them to be listed on, or dealt on, any stock exchange or other trading
facility.
Up to a maximum amount of #1 billion of Loan Notes in aggregate nominal value
will be available under the Loan Note Alternative. To the extent that Alliance
Boots Shareholders validly elect to receive Loan Notes pursuant to the Loan Note
Alternative which in aggregate nominal value exceed such amount, the entitlement
of each Alliance Boots Shareholder who so validly elects will be scaled down pro
rata to the number of Alliance Boots Shares in respect of which he has elected
for the Loan Note Alternative.
Loan Notes that may be issued pursuant to the Transaction have not been and will
not be registered under the US Securities Act of 1933 (as amended) or under the
relevant securities laws of any state or territory or other jurisdiction of the
United States. Accordingly, Loan Notes may not be offered, sold or re-sold in
the United States, except in a transaction not subject to, or in reliance on an
exemption from, the registration requirements of the Securities Act and under
the relevant securities laws of any state or territory or other jurisdiction of
the United States.
Unless AB Acquisitions otherwise determines, the relevant clearances and
registrations have not been, nor will they be, sought or obtained, nor have any
steps been taken, nor will any steps be taken, to enable the Loan Notes to be
publicly offered in compliance with applicable securities laws of Australia,
Canada or Japan (or any province or territory thereof, if applicable) or any
other jurisdiction. Accordingly, the Loan Notes (subject to certain exceptions)
may not be offered, sold, resold, transferred, or delivered, directly or
indirectly, in, into or from, Australia, Canada or Japan or any other
jurisdiction where to do so would violate the laws of that jurisdiction or would
require registration thereof in such jurisdiction.
The Loan Note Alternative will be conditional upon the Scheme becoming
unconditional and effective and will remain open for election until the Loan
Note Deadline.
The Loan Notes and the Loan Note Instrument will be governed by and construed in
accordance with English law and will be unsecured obligations of AB
Acquisitions.
Full details of the Loan Notes and the Loan Note Alternative will be contained
in the Scheme Document.
16. Structure of the Transaction
It is intended that the Transaction will be effected by means of a
court-sanctioned scheme of arrangement between Alliance Boots and the Scheme
Shareholders under section 425 of the Companies Act.
The purpose of the Scheme is to provide for AB Acquisitions to become the owner
of the whole of the issued and to be issued share capital of Alliance Boots.
This is to be achieved by:
(i) the cancellation (or, in relation to the Loan Note Elected
Shares, the transfer) of the Scheme Shares (other than the SP Rollover Shares)
and the application of the reserve arising from such cancellation in paying up
in full a number of New Alliance Boots Shares (which is equal to the number of
Scheme Shares cancelled) and issuing the same to AB Acquisitions, in
consideration for which Scheme Shareholders will receive consideration on the
basis set out in paragraph 2 of this announcement; and
(ii) the cancellation of the SP Rollover Shares and the application
of the reserve arising from such cancellation in paying up in full a number of
New Alliance Boots Shares (which is equal to the number of SP Rollover Shares
cancelled) and issuing the same to AB Acquisitions, in consideration for which
Stefano Pessina will receive, indirectly, ordinary shares in AB Acquisitions
Holdings.
The Loan Note Elected Shares will be acquired by AB Acquisitions fully paid with
full title guarantee and free from all liens, equitable interests, charges,
encumbrances, rights of pre-emption and other third party rights of any nature
whatsoever and together with all rights attaching to them, including the right
to receive and retain all dividends and distributions (if any) declared, made or
payable after the date of this announcement.
The Scheme is subject to the Conditions and certain further terms referred to in
Appendix I to this announcement and to be set out in the Scheme Document. In
particular, the Scheme requires the approval of holders of Scheme Shares by the
passing of a resolution at the Court Meeting. That resolution must be approved
by a majority in number of the Shareholders present, entitled to vote and voting
at the Court Meeting (or at any adjournment thereof), either in person or by
proxy, representing not less than three-fourths in value of all Alliance Boots
Shares which are voted at the Court Meeting (or at any adjournment thereof).
Stefano Pessina, Ornella Barra (who is Stefano Pessina's long-term partner) and
their associates will not be able to vote at this meeting, but will separately
consent to the Scheme in respect of their interests in Alliance Boots Shares.
Implementation of the Scheme will also require the passing of the Special
Resolution at the EGM, which will be held immediately after the Court Meeting.
Following the Meetings, the Scheme must be sanctioned and the Reduction
confirmed by the Court, and will only become effective on delivery to the
Registrar of Companies of:
(a) a copy of the First Court Order sanctioning the Scheme; and
(b) a copy of the Second Court Order,
and, in the case of the Second Court Order, it being registered by the Registrar
of Companies.
Upon the Scheme becoming effective, it will be binding on all Alliance Boots
Shareholders, irrespective of whether or not they attended or voted at the Court
Meeting or the EGM.
The Scheme will contain a provision for Alliance Boots to consent, on behalf of
all persons concerned, to any modification of or addition to the Scheme or to
any condition that the Court may approve or impose. Alliance Boots has been
advised that it is unlikely that the Court would impose any condition to the
Scheme that might be material to the interests of Alliance Boots Shareholders
unless Alliance Boots Shareholders were informed in advance.
Further details of the Scheme, including the timetable for its implementation,
will be set out in the Scheme Document which is expected to be posted to
Shareholders shortly.
17. Implementation Agreement
Alliance Boots and AB Acquisitions have entered into an Implementation
Agreement, which contains certain assurances in relation to the implementation
of the Scheme and the conduct of business prior to the Effective Date or the
termination of the Agreement. In particular, the Implementation Agreement
contains the principal provisions set out below:
Break fee arrangements
As a pre-condition to AB Acquisitions agreeing to announce the Transaction,
Alliance Boots has agreed in the Implementation Agreement to pay a break fee to
AB Acquisitions of #105.9 million if:
(a) a competing proposal is announced (whether under Rule 2.4 or
Rule 2.5 of the City Code or otherwise) and is subsequently completed; or
(b) the board of Alliance Boots withdraws, qualifies or adversely
modifies its recommendation of the Transaction,
and in either case the Transaction lapses or is withdrawn save that no break fee
shall be payable under (b) where the lapse or withdrawal is caused by a breach
by AB Acquisitions of the Implementation Agreement.
Alliance Boots has agreed that it will not offer or agree to any work fee,
inducement or break fee or other similar arrangement with any party other than
AB Acquisitions unless any such party announces a competing proposal pursuant to
Rule 2.5 of the City Code with an offer price of not less than 1,115 pence per
Alliance Boots Share (valuing non-cash consideration which is subject to a cash
alternative at the amount of the cash alternative and valuing non-cash
consideration which is not so subject at the valuation attributed thereto in the
offer document pursuant to Rule 24.10 of the City Code, unless such non-cash
consideration is admitted to trading in which case it will be valued at the
mid-market price at the time of the applicable Rule 2.5 announcement).
Non-solicitation arrangements
Alliance Boots has undertaken in the Implementation Agreement not (a) to
solicit, encourage, initiate or otherwise seek to procure the submission of
proposals, indications of interest or offers of any kind which are reasonably
likely to lead to a competing offer from any person other than AB Acquisitions
or (b) to enter into or participate in any discussions or negotiations (other
than responding to unsolicited enquiries) with any such person in relation to a
competing offer or which are reasonably likely to lead to a competing offer or
to provide any due diligence information on Alliance Boots and the Alliance
Boots Group to any third party in connection with a possible competing offer,
save to the extent that the Independent Directors consider that they would be in
breach of their fiduciary duties not to do so (having taken appropriate legal
and financial advice) or as required under Rule 20.2 of the City Code or as
required by any regulatory authority.
Where an approach is made to Alliance Boots by a potential competing offeror,
Alliance Boots has agreed to inform AB Acquisitions as soon as reasonably
practicable of the identity of the potential competing offeror, the price and
consideration offered and any subsequent changes in relation thereto.
Further information regarding the Implementation Agreement will be set out in
the Scheme Document.
18. Delisting and re-registration
Prior to the Scheme becoming effective, Alliance Boots will make an application
to the London Stock Exchange to cancel trading in the Alliance Boots Shares on
its market for listed securities and to the UK Listing Authority to cancel the
listing of the Alliance Boots Shares from the Official List on the Effective
Date.
On the Effective Date, share certificates in respect of the Alliance Boots
Shares will cease to be valid and entitlements to Alliance Boots Shares held
within the CREST system will be cancelled. It is also proposed that, following
the Effective Date and after its shares are delisted, Alliance Boots will be
re-registered as a private limited company.
19. Disclosure of interests in Alliance Boots
Except as disclosed below, as at the close of business on 18 April 2007, the
latest practicable Business Day prior to the date of this announcement, neither
AB Acquisitions, nor any of the directors of AB Acquisitions, nor, so far as AB
Acquisitions is aware, any person acting in concert with AB Acquisitions (i) has
any interest in or right to subscribe for any relevant Alliance Boots
securities, nor (ii) has any short positions in respect of relevant Alliance
Boots securities (whether conditional or absolute and whether in the money or
otherwise), including any short position under a derivative, any agreement to
sell or any delivery obligation or right to require another person to take
delivery, nor (iii) has borrowed or lent any relevant Alliance Boots securities
(save for any borrowed shares which have been on-lent or sold):
Party Interest in Alliance Boots Shares
Stefano Pessina Beneficial owner of 145,599,108 *
Ornella Barra Beneficial owner of 559,021
Merrill Lynch 1,468,984
Citi 143,829 (long)
7,926 (short)
2,250,000 options (long)
2,250,000 options (short)
* Almost all of the interest of Stefano Pessina (145,300,000 shares out of
145,599,108 shares) are held by Alliance Sante Participations S.A. Stefano
Pessina indirectly wholly owns Alliance Sante Participations S.A., the directors
of which include Stefano Pessina and Ornella Barra.
20. Overseas shareholders
The availability of the Transaction to Alliance Boots Shareholders who are not
resident in the United Kingdom may be affected by the laws of their relevant
jurisdiction. Such persons should inform themselves of, and observe, any
applicable legal or regulatory requirements of their jurisdiction. Alliance
Boots Shareholders who are in any doubt regarding such matters should consult an
appropriate independent professional adviser in the relevant jurisdiction
without delay.
The Loan Note Alternative will not be available to US Holders or Restricted
Overseas Persons. US Holders and Restricted Overseas Persons will only be
entitled to receive cash consideration, and will not be eligible to receive Loan
Notes as consideration pursuant to the Loan Note Alternative.
21. General
AB Acquisitions reserves the right to elect to implement the acquisition of the
Alliance Boots Shares by way of a takeover offer as an alternative to the
Scheme. Any such takeover offer will be subject to a 75 per cent. acceptance
condition and will be implemented on the same terms (subject to appropriate
amendments), so far as applicable, as those which would apply to the Scheme and
in compliance with applicable laws and regulations.
The Transaction will be subject to the Conditions and certain further terms set
out in paragraphs 1, 2 and 3 of Appendix I and the further terms and conditions
to be set out in the Scheme Document.
The bases and sources of certain information contained in this announcement are
set out in Appendix II. Details of the irrevocable undertakings received by AB
Acquisitions in relation to the Transaction are set out in Appendix III.
Certain terms used in this announcement are defined in Appendix IV.
The Scheme will be governed by English law. The Scheme will be subject to the
applicable requirements of the Takeover Code, the Panel, the London Stock
Exchange and the UK Listing Authority.
The Scheme Document will be posted to Alliance Boots Shareholders as soon as
practicable and the Scheme is expected to become effective by July 2007.
This announcement is not intended to and does not constitute an offer to sell or
invitation to purchase or subscribe for any securities or the solicitation of
any vote or approval in any jurisdiction pursuant to the Transaction or
otherwise. The Transaction will be made solely through the Scheme Document,
which will contain the full terms and conditions of the Transaction, including
details of how to vote in respect of the Transaction. Any acceptance or other
response to the Transaction should be made only on the basis of the information
in the Scheme Document.
UniCredit Markets & Investment Banking (acting through Bayerische Hypo- und
Vereinsbank AG, London Branch, is acting exclusively for AB Acquisitions and no-
one else in connection with the Transaction and will not be responsible to
anyone other than AB Acquisitions for providing the protections afforded to
clients of UniCredit Markets & Investment Banking or for providing advice in
relation to the Transaction.
JPMorgan Cazenove is acting exclusively for AB Acquisitions and no-one else in
connection with the Transaction and will not be responsible to anyone other than
AB Acquisitions for providing the protections afforded to clients of JPMorgan
Cazenove or for providing advice in relation to the Transaction.
Merrill Lynch is acting exclusively for AB Acquisitions and no-one else in
connection with the Transaction and will not be responsible to anyone other than
AB Acquisitions for providing the protections afforded to clients of Merrill
Lynch or for providing advice in relation to the Transaction.
Citi is acting exclusively for AB Acquisitions and no-one else in connection
with the Transaction and will not be responsible to anyone other than AB
Acquisitions for providing the protections afforded to clients of Citi or for
providing advice in relation to the Transaction.
Goldman Sachs is acting exclusively for Alliance Boots and no-one else in
connection with the Transaction and will not be responsible to anyone other than
Alliance Boots for providing the protections afforded to clients of Goldman
Sachs or for providing advice in relation to the Transaction.
Greenhill is acting exclusively for Alliance Boots and no-one else in connection
with the Transaction and will not be responsible to anyone other than Alliance
Boots for providing the protections afforded to clients of Greenhill or for
providing advice in relation to the Transaction.
Credit Suisse is acting exclusively for Alliance Boots and no-one else in
connection with the Transaction and will not be responsible to anyone other than
Alliance Boots for providing the protections afforded to clients of Credit
Suisse or for providing advice in relation to the Transaction.
UBS is acting exclusively for Alliance Boots and no-one else in connection with
the Transaction and will not be responsible to anyone other than Alliance Boots
for providing the protections afforded to clients of UBS or for providing advice
in relation to the Transaction.
The availability of the Transaction to persons who are not resident in the UK or
the US may be affected by the laws of the relevant jurisdictions. Persons who
are not so resident should inform themselves about, and observe, any applicable
requirements. Further details in relation to overseas shareholders will be
contained in the Scheme Document.
The release, publication or distribution of this announcement in jurisdictions
other than the UK or the US may be restricted by law and therefore any persons
who are subject to the laws of any jurisdiction other than the UK or the US
should inform themselves about, and observe, any applicable requirements. Any
failure to comply with the applicable requirements may constitute a violation of
the securities laws of any such jurisdiction. 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 UK.
Any person (including, without limitation, any custodian, nominee and trustee)
who would, or otherwise intends to, or who may have a contractual or legal
obligation to, forward this announcement and/or the Scheme Document and/or any
other related document to any jurisdiction outside the UK should inform
themselves of, and observe, any applicable legal or regulatory requirements of
their jurisdiction.
The Loan Notes that may be issued pursuant to the Transaction have not been nor
will be registered under the Securities Act of 1933, as amended (the "Securities
Act") or under the relevant securities laws of any state or territory or other
jurisdiction of the United States. Accordingly, Loan Notes may not be offered or
sold in the United States, except in a transaction not subject to, or in
reliance on an exemption from, the registration requirements of the Securities
Act and such state securities laws.
Loan Notes which may be issued pursuant to the Transaction have not been and
will not be registered under the relevant securities laws of Japan and any
relevant clearances and registrations have not been, and will not be, obtained
from the securities commission of any province of Canada. No prospectus in
relation to the Loan Notes has been, or will be, lodged with, or registered
with, the Australian Securities and Investments Commission or the Japanese
Ministry of Finance. Accordingly, unless otherwise determined by AB Acquisitions
and permitted by applicable law and regulation, Loan Notes may not be offered,
sold, resold, transferred, delivered or distributed, directly or indirectly in
or into Canada, Australia or Japan or any other jurisdiction where to do so
would violate the laws of that jurisdiction or would require registration
thereof in such jurisdiction.
US Holders should note that the Scheme relates to the shares of a UK company
that is a "foreign private issuer" as defined under Rule 3b-4 under the US
Securities Exchange Act of 1934, as amended (the "Exchange Act") and will be
governed by English law. Accordingly, neither the proxy solicitation nor the
tender offer rules under the Exchange Act will apply to the Scheme. Moreover,
the Scheme will be subject to the disclosure requirements and practices
applicable in the UK to schemes of arrangement, which differ from the disclosure
requirements of the US proxy solicitation rules and tender offer rules.
Financial information included in the Scheme documentation will have been
prepared in accordance with accounting standards applicable in the UK that may
not be comparable to the accounting standards applicable to financial statements
of US companies. If AB Acquisitions exercises its right to implement the
acquisition of the Alliance Boots Shares by way of a takeover offer, the offer
will be made in compliance with applicable US securities laws and regulations.
This announcement, including information included or incorporated by reference
in this announcement, may contain "forward-looking statements" concerning AB
Acquisitions and Alliance Boots. Generally, the words "will", "may", "should",
"continue", "believes", "expects", "intends", "anticipates" or similar
expressions identify forward-looking statements. The forward-looking statements
involve risks and uncertainties that could cause actual results to differ
materially from those expressed in the forward-looking statements. Many of
these risks and uncertainties relate to factors that are beyond the companies'
abilities to control or estimate precisely, such as future market conditions and
the behaviours of other market participants, and therefore undue reliance should
not be placed on such statements. AB Acquisitions and Alliance Boots assume no
obligation and do not intend to update these forward-looking statements, except
as required pursuant to applicable law.
Dealing Disclosure Requirements
Under the provisions of Rule 8.3 of the City Code, if any person is, or becomes,
"interested" (directly or indirectly) in 1% or more of any class of "relevant
securities" of Alliance Boots, all "dealings" in any "relevant securities" of
Alliance Boots, (including by means of an option in respect of, or a derivative
referenced to, any such "relevant securities") must be publicly disclosed by no
later than 3.30 p.m. (London time) on the London business day following the date
of the relevant transaction. This requirement will continue until the date on
which the offer becomes, or is declared, unconditional as to acceptances, lapses
or is otherwise withdrawn or on which the "offer period" otherwise ends. If two
or more persons act together pursuant to an agreement or understanding, whether
formal or informal, to acquire an "interest" in "relevant securities" of
Alliance Boots, they will be deemed to be a single person for the purpose of
Rule 8.3.
Under the provisions of Rule 8.1 of the City Code, all "dealings" in "relevant
securities" of Alliance Boots by AB Acquisitions or Alliance Boots, or by any of
their respective "associates", must be disclosed by no later than 12.00 noon
(London time) on the London business day following the date of the relevant
transaction.
A disclosure table, giving details of the companies in whose "relevant
securities" "dealings" should be disclosed, and the number of such securities in
issue, can be found on the Takeover Panel's website at
www.thetakeoverpanel.org.uk/.
"Interests in securities" arise, in summary, when a person has long economic
exposure, whether conditional or absolute, to changes in the price of
securities. In particular, a person will be treated as having an "interest" by
virtue of the ownership or control of securities, or by virtue of any option in
respect of, or derivative referenced to, securities.
Terms in quotation marks are defined in the City Code, which can also be found
on the Panel's website. If you are in any doubt as to whether or not you are
required to disclose a "dealing" under Rule 8, you should consult the Panel.
APPENDIX I
CONDITIONS TO IMPLEMENTATION OF THE TRANSACTION AND THE SCHEME
1. The Transaction is conditional upon the Scheme becoming
unconditional and becoming effective, subject to the Takeover Code, by not later
than 170 days from the date on which the Scheme Document is posted or such later
date, if any, as AB Acquisitions and Alliance Boots may agree and the Panel and
the Court may allow. The Scheme will be conditional upon:
(a) approval of the Scheme by a majority in number representing
three-fourths or more in value of the holders of Scheme Shares (or the relevant
class or classes thereof), 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;
(b) the resolution(s) required to approve and implement the Scheme
being passed by the requisite majority at the Extraordinary General Meeting or
any adjournment of that meeting and not subsequently revoked;
(c) the sanction of the Scheme by the Court (with or without
modification but subject to any modification being on terms acceptable to
Alliance Boots and AB Acquisitions), and an office copy of the First Court Order
being filed with the Registrar of Companies in England and Wales; and
(d) the confirmation of any reduction of capital involved in the
Scheme by the Court (with or without modification but subject to any
modification being on terms acceptable to Alliance Boots and AB Acquisitions),
and an office copy of the Second Court Order and the minute of such reduction
attached thereto being filed with, and registered by, the Registrar of Companies
in England and Wales.
2. Alliance Boots and AB Acquisitions have agreed that, subject
as stated in paragraph 3 below, the Transaction will be conditional upon the
following matters, and, accordingly, the necessary action to make the Scheme
effective will not be taken unless such Conditions (as amended as appropriate)
have been satisfied or waived:
(a)
(i) the European Commission making or having been deemed to
have made a decision under Article 6(1)(b) of Council Regulation (EC) 139/2004
(the "Regulation") in relation to the Transaction (or any matter arising
therefrom) and on terms reasonably satisfactory to AB Acquisitions taking into
account the size of the Transaction;
(ii) in the event that a request under Article 9(2) of the
Regulation has been made by the United Kingdom, the European Commission either:
(a) indicating that it does not intend to refer the proposed
acquisition, or any aspect of the proposed acquisition, to the competent
authority in the United Kingdom in accordance with Article 9(3)(b) of the
Regulation; or
(b) making a reference to the competent authority in the United Kingdom
in accordance with Article 9(3)(b) of the Regulation.
(iii) in the event that a request under Article 9(2) of the
Regulation has been made by a European Union or EFTA state in relation to the
Transaction (or any matter arising therefrom) other than the United Kingdom,
either:
(a) the European Commission indicating that it does not intend to refer the
proposed acquisition, or any aspect of the proposed acquisition, to a competent
authority of that state in accordance with Article 9(3)(b) of the Regulation; or
(b) in the event of such a reference being made in relation to the
Transaction (or any part of the Transaction) to a European Union or EFTA state,
clearance being obtained from the merger control authorities of that state on
terms reasonably satisfactory to AB Acquisitions, taking into account the size
of the Transaction;
(b) no government or governmental, quasi governmental,
supranational, statutory, court, regulatory or investigative body or any other
body or person whatsoever in any jurisdiction (each a "Third Party") having
decided to take, institute or implement any action, proceeding, suit,
investigation, enquiry or reference, or having required any action to be taken
or otherwise having done anything or having enacted, made or proposed any
statute, regulation, decision or order and there not continuing to be
outstanding any statute, regulation, decision or order which would or might:
(i) make the Transaction, its implementation or the acquisition
of any Alliance Boots Shares by any member of the AB Acquisitions Group void,
illegal and/or unenforceable under the laws of any jurisdiction, or otherwise
directly or indirectly prohibit, or materially restrain, restrict, delay or
otherwise interfere with the implementation of, or impose material additional
conditions or obligations with respect to, or otherwise materially challenge or
require material amendment of the Transaction;
(ii) require the divestiture by any member of the AB Acquisitions
Group or by any member of the Wider Alliance Boots Group of all or any part of
its businesses, assets or property or impose any limitation on the ability of
any of them to conduct their respective businesses (or any part thereof) or to
own any of their assets or properties (or any part thereof) which in any such
case is material in the context of the AB Acquisitions Group or the Wider
Alliance Boots Group, in either case taken as a whole;
(iii) impose any material limitation on, or result in a material
delay in, the ability of any member of the AB Acquisitions Group directly or
indirectly to acquire or hold or to exercise effectively all or any rights of
ownership in respect of shares or other securities in Alliance Boots or on the
ability of any member of the Wider Alliance Boots Group or any member of the AB
Acquisitions Group directly or indirectly to hold or exercise effectively any
rights of ownership in respect of shares or other securities (or the equivalent)
in, or to exercise management control over, any member of the Wider Alliance
Boots Group;
(iv) require any member of the AB Acquisitions Group or the Wider
Alliance Boots Group to acquire or offer to acquire any shares, other securities
(or the equivalent) or interest in any member of the Wider Alliance Boots Group
or any asset owned by any third party (other than in the implementation of the
Scheme);
(v) require, prevent or materially delay a divestiture by any
member of the AB Acquisitions Group of any shares or other securities (or the
equivalent) in any member of the Alliance Boots Group which is material in the
context of the Alliance Boots Group taken as a whole.
(vi) result in any member of the Wider Alliance Boots Group
ceasing to be able to carry on business under any name under which it presently
carries on business which in any such case is material in the context of the
Wider Alliance Boots Group taken as a whole;
(vii) impose any material limitation on the ability of any member of
the Wider Alliance Boots Group to integrate or co ordinate all or any part of
its business with all or any part of the business of any other member of the
Wider Alliance Boots Group which is adverse to and material in the context of
the Alliance Boots Group taken as a whole; or
(viii) otherwise affect the business, assets, profits or prospects of
any member of the Wider Alliance Boots Group or any member of the AB
Acquisitions Group in a manner which is adverse to and material in the context
of the Alliance Boots Group taken as a whole or of the obligations of any
members of the AB Acquisitions Group taken as a whole in connection with the
Transaction,
and all applicable waiting and other time periods during which any such Third
Party could decide to take, institute or implement any such action, proceeding,
suit, investigation, enquiry or reference or otherwise intervene under the laws
of any jurisdiction in respect of the Scheme or the acquisition or proposed
acquisition of any Alliance Boots Shares having expired, lapsed or been
terminated;
(c) all necessary or appropriate notifications, filings or
applications having been made in connection with the Transaction and all
necessary waiting periods (including any extensions thereof) under any
applicable legislation or regulation of any jurisdiction having expired, lapsed
or been terminated (as appropriate) and all statutory and regulatory obligations
in any jurisdiction having been complied with in connection with the Transaction
and all Authorisations necessary or appropriate in any jurisdiction for or in
respect of the Transaction and the acquisition or the proposed acquisition of
any shares or other securities in, or control of, Alliance Boots by any member
of the AB Acquisitions Group having been obtained in terms and in a form
reasonably satisfactory to AB Acquisitions from all appropriate Third Parties or
(without prejudice to the generality of the foregoing) from any person or bodies
with whom any member of the Wider Alliance Boots Group has entered into
contractual arrangements and all such Authorisations necessary or appropriate to
carry on the business of any member of the Wider Alliance Boots Group in any
jurisdiction having been obtained, in each case where the direct consequence of
a failure to make such notification or filing or to wait for the expiry, lapse
or termination of any such waiting period or to comply with such obligation or
obtain such Authorisation would have a material adverse effect on the Alliance
Boots Group, taken as a whole or on the AB Acquisitions Group taken as a whole
and all such Authorisations remaining in full force and effect at the Effective
Date and there being no notice or intimation of an intention to revoke, suspend,
restrict, modify or not to renew such Authorisations;
(d) except as fairly disclosed in the Interim Results, as publicly
announced to a Regulatory Information Service by or on behalf of Alliance Boots
before the date of this announcement or as fairly disclosed in writing by or on
behalf of Alliance Boots to AB Acquisitions before the date of this
announcement, there being no provision of any arrangement, agreement,
Authorisation, law, lease or other instrument to which any member of the Wider
Alliance Boots Group is a party or by or to which any such member or any of its
assets is or may be bound or be subject which, or any event or circumstance
having occurred which under any arrangement, agreement, Authorisation, law,
lease or other instrument to which any member of the Wider Alliance Boots Group
is a party or by or to which any such member or any of its assets is or may be
bound or be subject, would result in as a consequence of the Transaction or the
acquisition or the proposed acquisition by any member of the AB Acquisitions
Group of any Alliance Boots Shares or because of a change in the control or
management of any member of the Wider Alliance Boots Group or otherwise, could
or might reasonably be expected to result in, in each case to an extent which is
material in the context of the Alliance Boots Group taken as whole or the
Transaction:
(i) any monies borrowed by, or any other indebtedness, actual
or contingent, of any member of the Wider Alliance Boots Group being or becoming
repayable, or capable of being declared repayable, immediately or prior to its
or their stated maturity date or repayment date, or the ability of any such
member to borrow monies or incur any indebtedness being withdrawn or inhibited
or being capable of becoming or being withdrawn or inhibited;
(ii) the rights, liabilities, obligations, interests or business
of any member of the Wider Alliance Boots Group under any such arrangement,
agreement, licence, permit, lease or instrument or the interests or business of
any member of the Wider Alliance Boots Group in or with any other firm or
company or body or person (or any agreement or arrangement relating to any such
business or interests) being terminated or adversely modified or affected or any
onerous obligation or liability arising or any adverse action being taken
thereunder;
(iii) any member of the Wider Alliance Boots Group ceasing to be
able to carry on business under any name under which it presently carries on
business;
(iv) any assets or interests of, or any asset the use of which is
enjoyed by, any member of the Wider Alliance Boots Group being or falling to be
disposed of or charged or any right arising under which any such asset or
interest could be required to be disposed of or charged or could cease to be
available to any member of the Wider Alliance Boots Group otherwise than in the
ordinary course of business;
(v) the creation or enforcement of any mortgage, charge or other
security interest over the whole or any part of the business, property or assets
of any member of the Wider Alliance Boots Group;
(vi) the value of, or the financial or trading position or
prospects of, any member of the Wider Alliance Boots Group being prejudiced or
adversely affected;
(vii) the creation of any liability (actual or contingent) by any
member of the Wider Alliance Boots Group; or
(viii) any liability of any member of the Wider Alliance Boots Group
to make any severance, termination, bonus or other payment to any of its
directors or other officers;
(e) except as fairly disclosed in the Interim Results, as publicly
announced to a Regulatory Information Service by or on behalf of Alliance Boots
before the date of this announcement or as fairly disclosed in writing by
Alliance Boots to AB Acquisitions prior to the date of this announcement, no
member of the Alliance Boots Group having since 5 June 2006 (being the date of
the Merger Prospectus):
(i) issued or agreed to issue or authorised or proposed the
issue of additional shares of any class, or securities convertible into, or
exchangeable for, or rights, warrants or options to subscribe for or acquire,
any such shares or convertible capital or transferred or sold or agreed to
transfer or sell or proposed the transfer or sale of Alliance Boots Shares out
of treasury (save, in each case, where relevant, as between Alliance Boots and
wholly-owned subsidiaries of Alliance Boots and save for the issue of Alliance
Boots Shares or between such wholly-owned subsidiaries or the transfer or sale
of Alliance Boots Shares out of treasury on the exercise of options granted
before the date of this announcement in the ordinary course);
(ii) save for the interim dividend of 10p (net) per Alliance
Boots Share paid to Alliance Boots Shareholders on the register of members of
Alliance Boots on 28 July 2006 and the interim dividend of 13.25p (net) per
ordinary share of Alliance Unichem plc paid to holders of such shares on the
register of members of Alliance Unichem on 28 July 2006, recommended, declared,
paid or made or proposed to recommend, declare, pay or make any bonus, dividend
or other distribution (whether payable in cash or otherwise) other than to
Alliance Boots or one of its wholly-owned subsidiaries;
(iii) merged with or demerged from or acquired any body corporate,
partnership or business or acquired or disposed of, or transferred, mortgaged or
charged or created any security interest over, any assets or any right, title or
interest in any asset (including shares and trade investments) or authorised,
proposed or announced any intention to do so in each case other than in the
ordinary course of business and save for transactions between Alliance Boots and
its wholly-owned subsidiaries or between such wholly-owned subsidiaries;
(iv) save as between Alliance Boots and its wholly-owned
subsidiaries or between such wholly-owned subsidiaries made, authorised,
proposed or announced an intention to propose any change in its loan capital;
(v) issued, authorised or proposed the issue of any debentures or
(save in the ordinary course of business and save as between Alliance Boots and
its wholly-owned subsidiaries or between such wholly-owned subsidiaries)
incurred or increased any indebtedness or become subject to any contingent
liability which is material in the context of the Alliance Boots Group taken as
a whole;
(vi) entered into or varied or announced its intention to enter
into or vary any contract, transaction, arrangement or commitment (whether in
respect of capital expenditure or otherwise), otherwise than in the ordinary
course of business, which is of a long term, unusual or onerous nature, or which
involves or could involve an obligation of a nature or magnitude which is, in
any such case, material in the context of the Alliance Boots Group taken as a
whole or which is or is likely to be restrictive on the business of any member
of the Alliance Boots Group or the AB Acquisitions Group where such restriction
is material in the context of the Spirit Group taken as a whole;
(vii) entered into or varied the terms of any service agreement with
any director or senior executive of the Alliance Boots Group;
(viii) proposed, agreed to provide or modified the terms of any share
option scheme, incentive scheme, or, other than in the ordinary course of
business, materially altered any other benefit relating to the employment or
termination of employment of any employee of the Alliance Boots Group;
(ix) nor the trustees of the relevant pension scheme having made
or agreed or consented to any significant change to the terms of the trust deeds
constituting the pension schemes established for its directors, employees or
their dependants or the benefits which accrue, or to the pensions which are
payable, thereunder, or to the basis on which qualification for, or accrual or
entitlement to, such benefits or pensions are calculated or determined or to the
basis on which the liabilities (including pensions) of such pension schemes are
funded or valued, or agreed or consented to any change to the trustees or
trustee directors;
(x) implemented or effected or announced its intention to
implement or effect, any reconstruction, amalgamation, scheme or other
transaction or arrangement otherwise than in the ordinary course of business;
(xi) other than by a wholly-owned subsidiary of Alliance Boots,
purchased, redeemed or repaid or announced any proposal to purchase, redeem or
repay any of its own shares or other securities or reduced or, save in respect
of the matters mentioned in sub paragraph (i) above, made any other change to
any part of its share capital to an extent which is material in the context of
the Alliance Boots Group taken as a whole;
(xii) waived or compromised any claim otherwise than in the
ordinary course of business which is material in the context of the Alliance
Boots Group taken as a whole;
(xiii) made any material alteration to its memorandum or articles of
association or other incorporation documents which is material in the context of
the Alliance Boots Group taken as a whole;
(xiv) other than in respect of a body corporate which is dormant and
was solvent at the relevant time, taken or proposed any corporate action or had
any legal proceedings instituted or threatened in writing against it for its
winding up (voluntary or otherwise), dissolution, reorganisation or for the
appointment of any administrator, receiver, administrative receiver, trustee or
similar officer of all or any of its assets or revenues or any analogous
proceedings in any jurisdiction or appointed any analogous person in any
jurisdiction or had any such person appointed;
(xv) been unable, or admitted in writing that it is unable, to pay
its debts or commenced negotiations with one or more of its creditors with a
view to rescheduling or restructuring any of its indebtedness, or having stopped
or suspended (or threatened to stop or suspend) payment of its debts generally
or ceased or threatened to cease carrying on all or a substantial part of its
business; or
(xvi) entered into any contract, commitment, agreement or arrangement
otherwise than in the ordinary course of business or passed any resolution or
made any offer (which remains open for acceptance) with respect to, or announced
an intention to, or to propose to, effect any of the transactions, matters or
events referred to in this condition;
(f) since 5 June 2006, and except as fairly disclosed in the
Interim Results, as publicly announced to a Regulatory Information Service by or
on behalf of Alliance Boots or as fairly disclosed in writing by or on behalf of
Alliance Boots to AB Acquisitions, in each case, before the date of this
announcement:
(i) there having been no adverse change in the business,
assets, financial or trading position or profits or prospects or operational
performance of any member of the Wider Alliance Boots Group to an extent which
is material to the Alliance Boots Group taken as a whole;
(ii) no litigation, arbitration proceedings, prosecution or other
legal proceedings having been threatened, announced or instituted by or against
and remaining outstanding against any member of the Alliance Boots Group or to
which any member of the Alliance Boots Group is or may become a party (whether
as claimant or defendant or otherwise) and no enquiry or investigation by, or
complaint or reference to, any Third Party against or in respect of any member
of the Alliance Boots Group having been threatened, announced or instituted by
and against, or remaining outstanding in respect of, any member of the Alliance
Boots Group which, in any such case, might reasonably be expected to materially
and adversely affect the Alliance Boots Group taken as a whole;
(iii) no contingent or other liability having arisen or become
known to AB Acquisitions which would be likely to adversely affect the business,
assets, financial or trading position or profits or prospects of any member of
the Wider Alliance Boots Group to an extent which is material to the Alliance
Boots 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 Authorisation held by any member of the Wider Alliance Boots
Group, which is necessary for the proper carrying on of its business and the
withdrawal, cancellation, termination or modification of which is material in
the context of the Alliance Boots Group taken as a whole;
(g) since 5 June 2006, and except as fairly disclosed in the Interim
Results, as publicly announced to a Regulatory Information Service by or on
behalf of Alliance Boots or as fairly disclosed in writing by or on behalf of
Alliance Boots to AB Acquisitions, in each case, before the date of this
announcement, AB Acquisitions not having discovered:
(i) that any financial, business or other information
concerning the Wider Alliance Boots Group publicly disclosed or disclosed to any
member of the AB Acquisitions Group at any time by or on behalf of any member of
the Wider Alliance Boots Group which is material in the context of the
acquisition of Alliance Boots by any member of the AB Acquisitions Group is
misleading to a material extent, contains a material misrepresentation of fact
or omits to state a fact necessary to make that information not misleading to a
material extent;
(ii) that any member of the Wider Alliance Boots Group is subject
to any liability, contingent or otherwise, which is not disclosed in the Merger
Prospectus, and which is material in the context of the Alliance Boots Group
taken as a whole; or
(iii) any information which affects the import of any information
disclosed to AB Acquisitions at any time before the date of this announcement by
or on behalf of any member of the Wider Alliance Boots Group which is material
in the context of the Alliance Boots Group taken as a whole;
(h) except as fairly disclosed in the Interim Results of Alliance
Boots, as publicly announced to a Regulatory Information Service by or on behalf
of Alliance Boots or as fairly disclosed in writing by or on behalf of Alliance
Boots to AB Acquisitions in each case before the date of this announcement, in
relation to any release, emission, accumulation, discharge, disposal or other
fact or circumstance which has impaired or is likely to impair the environment
(including property) or harmed or is likely to harm human health, no past or
present member of the Wider Alliance Boots Group, in each case in a manner or to
an extent which is material in the context of the Alliance Boots Group taken as
a whole, (i) having committed any violation of any applicable laws, statutes,
regulations, notices or other requirements of any Third Party and/or (ii) having
incurred any liability (whether actual or contingent) to any Third Party; and/or
(iii) being likely to incur any liability (whether actual or contingent), or
being required, to make good, remediate, repair, re instate or clean up the
environment (including any property).
3. AB Acquisitions reserves the right to waive in whole, or in
part, all or any of Conditions except Condition 1.
4. Save with the consent of the Panel, the Transaction will
lapse and the Scheme will not proceed if the European Commission either
initiates proceedings under Article 6(1)(c) of the Regulation or makes a
referral to a competent authority of the United Kingdom under Article 9(3)(b) of
the Regulation and there is a subsequent reference to the United Kingdom
Competition Commission, in either case before the date on which the resolutions
are passed at the Court Meeting (or in the case of a takeover offer under
paragraph 6 below before 1.00 p.m. on the first closing date of the takeover
offer or the date on which the takeover offer becomes or is declared
unconditional as to acceptances, whichever is the later).
5. If AB Acquisitions is required by the Panel to make an offer
for Alliance Boots Shares under the provisions of Rule 9 of the Takeover Code,
AB Acquisitions may make such alterations to the terms and conditions of the
offer as are necessary to comply with the provisions of that rule.
6. AB Acquisitions reserves the right to elect (with the consent
of the Panel (where necessary)) to implement the acquisition of the entire
issued and to be issued ordinary share capital of Alliance Boots by way of a
takeover offer (as such term is defined in Part 28 of the Companies Act 2006).
In such event, the takeover offer will be implemented on the same terms (subject
to amendments necessary to reflect the change in method of effecting the
Transaction), so far as applicable, as those which would apply to the Scheme.
In particular, Condition 1 would not apply, however, the takeover offer would be
subject to the following further condition:
"valid acceptances being received (and not, where permitted, withdrawn) by not
later than 1.00 p.m. (London time) on the first closing date of the takeover
offer (or such later time(s) and/or date(s) as AB Acquisitions may, subject to
the rules of the Takeover Code and with the consent of the Panel, decide) in
respect of not less than 75 per cent. (or such lower percentage as AB
Acquisitions may decide) (i) of the Alliance Boots Shares to which the takeover
offer relates; and (ii) of the voting rights attached to those shares, provided
that this condition will not be satisfied unless AB Acquisitions (together with
its wholly owned subsidiaries) shall have acquired or agreed to acquire (whether
pursuant to the takeover offer or otherwise) Alliance Boots Shares carrying in
aggregate more than 50 per cent. of the voting rights normally exercisable at a
general meeting of Alliance Boots, including for this purpose (except to the
extent otherwise agreed by the Panel) any such voting rights attaching to
Alliance Boots 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. For the purposes of this condition:
(i) Alliance Boots Shares which have been unconditionally
allotted shall be deemed to carry the voting rights they will carry upon issue;
(ii) Alliance Boots Shares that cease to be held in treasury
are Alliance Boots Shares to which the offer relates; and
(iii) the expression "Alliance Boots Shares to which the offer
relates" shall be construed in accordance with Part 28 of the Companies Act
2006.
In addition, the Transaction will be on, and subject to, the further terms set
out in the Scheme Document.
The Transaction and the Scheme will be governed by English law and will be
subject to the jurisdiction of the courts of England. The Transaction will
comply with the applicable rules and regulations of the UK Listing Authority,
the London Stock Exchange and the Takeover Code.
APPENDIX II
BASES AND SOURCES
a. The value of #10.6 billion attributed to the fully diluted share
capital of Alliance Boots is based upon the 967,554,529 Alliance Boots Shares in
issue and the 7,660,161 Alliance Boots Shares which may be issued as a result of
the exercise of options and awards granted under the Alliance Boots Share
Schemes. For the purposes of this announcement only, it is assumed that all
options and awards to subscribe for new Alliance Boots Shares granted under the
Alliance Boots Share Schemes will become fully vested and exercisable as a
result of the Transaction.
b. For the purposes of the financial comparisons contained in this
announcement, no account has been taken of any liability to taxation or the
treatment of fractions under the Transaction.
c. Unless otherwise stated, the financial information on Alliance Boots is
extracted from Alliance Boots' interim financial results for the 6 months ended
30 September 2006.
d. Unless otherwise stated, all prices for Alliance Boots Shares have been
derived from the Daily Official List of the London Stock Exchange plc and
represent closing middle market prices on the relevant date.
e. Alliance Boots' average Closing Price per Alliance Boots Share of 803.9
pence over the one month period ended 8 March 2007 is derived from data provided
by DataStream.
APPENDIX III
DETAILS OF IRREVOCABLE UNDERTAKINGS
The following Independent Directors of Alliance Boots Shareholders have given
irrevocable undertakings as described in paragraph 6 of this announcement in
respect of the number of shares set out below (and any further shares acquired
by them prior to the completion of the Transaction):
Name Number of Alliance Boots Shares
Richard Baker 24,514
Guy Dawson 2,689
Steve Duncan 44,419
George Fairweather 83,171
Adrian Loader 8,159
Tim Parker 4,263
Helene Ploix 2,740
Sir Nigel Rudd 49,028
Scott Wheway 4,567
APPENDIX IV
DEFINITIONS
The following definitions apply throughout this announcement unless the context
otherwise requires:
"AB Acquisitions" AB Acquisitions Limited, a private limited company incorporated under
the laws of England and Wales with registered number 6166762
"AB Acquisitions Group" AB Acquisitions Holdings, its subsidiaries and subsidiary undertakings
"AB Acquisitions Holdings" AB Acquisitions Holdings Limited, a public limited company incorporated
under the laws of Gibraltar with registered number 98476
"Alliance Boots" Alliance Boots plc
"Alliance Boots Group" Alliance Boots, its subsidiaries and subsidiary undertakings
"Alliance Boots Pensions Schemes" the Boots Pension Scheme, the Alliance UniChem Group UK Pension Scheme
and the Boots Supplementary Pension Plan
"Alliance Boots Shareholders" or holders of Alliance Boots Shares
"Shareholders"
"Alliance Boots Shares" ordinary shares of 37 7/39 pence each in the capital of Alliance Boots
"Authorisations" authorisations, orders, grants, recognitions, confirmations, consents,
licences, clearances, certificates, permissions or approvals
"Business Day" any day other than a Saturday or a Sunday when banks generally are open
in London for general banking business
"Citi" Citigroup Global Markets Limited
"City Code" the City Code on Takeovers and Mergers
"Closing Price" the closing middle market quotation of a Alliance Boots Share as derived
from the Daily Official List or the London Stock Exchange's website
"Conditions" the conditions to the implementation of the Transaction (including the
Scheme), which are set out in Appendix I of this announcement
"Court Meeting" the meeting (and any adjournment thereof) of holders of Scheme Shares
convened by order of the Court under section 425 of the Companies Act
1985 to consider and vote on the Scheme
"Court Order(s)" the First Court Order and/or the Second Court Order, as the case may be
"Court" the High Court of Justice in England and Wales
"CREST" the relevant system (as defined in the Uncertificated Securities
Regulations 2001 (SI 2001 No. 3755)) in respect of which CRESTCo Limited
is the Operator (as defined in such Regulations)
"Directors" or "Board" the directors or the board of directors of the relevant entity
"Effective Date" the day on which the Scheme becomes effective in accordance with its
terms
"Excluded Shares" The SP Rollover Shares and any Alliance Boots Shares held in treasury
"Extraordinary General Meeting" the extraordinary general meeting of Alliance Boots Shareholders
or "EGM" (including any adjournment thereof) to be convened in connection with
the Transaction
"First Court Hearing" the Court hearing of the petition to sanction the Scheme
"First Court Order" the order of the Court, granted at the First Court Hearing, sanctioning
the Scheme under section 425 of the Companies Act 1985
"FSA" Financial Services Authority
"Goldman Sachs" Goldman Sachs International
"Greenhill" Greenhill & Co. International LLP
"Implementation Agreement" the agreement dated 20 April 2007 between AB Acquisitions and Alliance
Boots
"Independent Directors" the Directors of Alliance Boots other than Stefano Pessina and Ornella
Barra
"Interim Results" the interim results of Alliance Boots for the six months ending on 30
September 2006
"JPMorgan Cazenove" JPMorgan Cazenove Limited
"Kohlberg Kravis Roberts" Kohlberg Kravis Roberts & Co. L.P
"KKR Funds" KKR European Fund II, Limited Partnership, KKR 2006 Fund (Overseas),
Limited Partnership and KKR PEI Sicar, S.a.r.l and/or other funds
advised by Kohlberg Kravis Roberts
"Listing Rules" the listing rules made by the FSA under section 73A of the Financial
Services and Markets Act 2000 as amended from time to time
"Loan Notes" the loan notes to be issued by AB Acquisitions pursuant to the Loan Note
Alternative
"Loan Note Alternative" the alternative available under the Scheme whereby Alliance Boots
Shareholders (other than US Holders and Restricted Overseas Persons) may
elect, subject to certain limitations and conditions, to receive Loan
Notes instead of all or part of the cash consideration to which they
would otherwise be entitled pursuant to the Scheme
"Loan Note Deadline" 3.00 p.m. on the business day immediately prior to the First Court
Hearing
"Loan Note Elected Shares" Scheme Shares (if any) in respect of which valid elections have been
made under the Loan Note Alternative in accordance with its terms
"Loan Note Instrument" the loan note instrument constituting the Loan Notes to be executed as a
deed by AB Acquisitions
"London Stock Exchange" London Stock Exchange plc
"Meetings" the Court Meeting and the Extraordinary General Meeting
"Merger Prospectus" the merger prospectus of Alliance Boots dated 5 June 2006 in connection
with the proposed merger with Alliance UniChem
"Merrill Lynch" Merrill Lynch International
"Panel" the Panel on Takeovers and Mergers
"Reduction" the proposed reduction of capital under section 137 of the Companies Act
1985 provided for by the Scheme
"Regulations" the Uncertificated Securities Regulations 2001
"Regulatory Information Service" any information services authorised from time to time by the FSA for the
purpose of disseminating regulatory announcements
"Restricted Overseas Person" a person (including an individual, partnership, unincorporated
syndicate, limited liability company, unincorporated organisation,
trust, trustee, executor, administrator or other legal representative)
in, or resident in, or any person whom AB Acquisitions believes to be
in, or resident in, Australia, Canada or Japan (or any custodian,
nominee or trustee for such persons) and person in any other
jurisdiction (other than persons in the UK) whom AB Acquisitions is
advised to treat as a restricted overseas person in order to observe the
laws of such jurisdiction or to avoid the requirement to comply with any
governmental or other consent or any registration, filing or other
formality which AB Acquisitions regards as unduly onerous
"Scheme" or "Scheme of the scheme of arrangement under section 425 of the Companies Act 1985 to
Arrangement" be proposed by Alliance Boots to the Alliance Boots Shareholders in
connection with the Transaction, with or subject to any modification,
addition or condition approved or imposed by the Court and agreed by
Alliance Boots and AB Acquisitions.
"Scheme Document" the document to be addressed to, amongst others, Alliance Boots
Shareholders containing, among other things, the Scheme, the notices of
the Meetings and proxy forms in respect of the Court Meetings and any
other document required in connection with the Transaction
"Scheme Shareholders" holders of Scheme Shares
"Scheme Shares" the Alliance Boots Shares:
(a) in issue at the date of the Scheme;
(b) (if any) issued after the date of the Scheme and prior to the
voting record time in respect of the Court Meeting; and
(c) (if any) issued on or after the voting record time in
respect of the Court Meeting and at or prior to the record time for the
reorganisation of share capital involved in the Scheme in respect of
which the original or any subsequent holders thereof are bound by the
Scheme or in respect of which the holder thereof shall have agreed in
writing to be bound by the Scheme,
in each case other than the Excluded Shares (if any) and any Alliance
Boots Shares held by the AB Acquisitions Group
"Second Court Hearing" the hearing by the Court of the petition to confirm the Reduction
"Second Court Order" the order(s) of the Court, granted at the Second Court Hearing,
confirming the Reduction
"Share Schemes" the Boots Executive Share Option Plan 2001, Boots Group Executive Share
Option Plan 2002, an individual option plan for Richard Baker, Boots
Group All Employee Share Ownership Plan 2002, Boots Group SAYE Share
Option Plan 2002, Boots Group Long-Term Bonus Plan 2002, Boots
Performance Share Plan, Boots Bonus Co-investment Plan, Alliance UniChem
1997 Share Option Scheme and the Alliance UniChem Savings Related Share
Option Scheme 1990
"SP Rollover Shares" 106,880,734 of the Alliance Boots Shares beneficially owned by Stefano
Pessina (subject to adjustment)
"SP Shares" SP Rollover Shares and the additional Alliance Boots Shares beneficially
owned by Stefano Pessina
"Special Resolution" the special resolution to approve, amongst other things, the
cancellation of the entire issued share capital of Alliance Boots (other
than the Loan Note Elected Shares), the alteration of Alliance Boots'
articles of association and such other matters as may be necessary to
implement the Scheme and the delisting of Alliance Boots Shares
"Takeover Code" the Takeover Code issued by the Panel from time to time
"Transaction" the proposed acquisition of the Alliance Boots Shares by AB Acquisitions
to be effected by means of a Scheme (or, should AB Acquisitions so
elect, by means of a takeover offer)
"UK" or "United Kingdom" the United Kingdom of Great Britain and Northern Ireland
"UniCredit Markets & Investment UniCredit Markets & Investment Banking (acting through Bayerische Hypo-
Banking" und Vereinsbank AG, London Branch)
"US" or "United States" The United States of America, its territories and possessions, any state
or political subdivision of the United States of America and the
District of Columbia
"US Holder" (a) persons resident in the United States who hold shares in Alliance
Boots (including, without limitation, shares now or at any time
represented by American Depositary Receipts); and (b) persons who
appear, at any time, to the AB Acquisitions Board to fall within
sub-paragraph (a) of this definition of US Holder
"Wider Alliance Boots Group" the Alliance Boots Group and associated undertakings of Alliance Boots
and any other body corporate, partnership, joint venture or person in
which Alliance Boots and such undertakings (aggregating their interests)
have an interest of more than 20 per cent. of the voting or equity
capital or the equivalent
"#" or "Sterling " pounds Sterling, or the lawful currency of the UK from time to time
"$" or "US Dollars " the lawful currency of the United States from time to time.
All references to time in this announcement are to London time unless otherwise
stated.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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