TIDMAGA
RNS Number : 0679T
The Middleby Corporation
15 July 2015
Not for release, publication or distribution, in whole or in
part, in or into or from any restricted jurisdictions or any other
JURISDICTION where to do so would constitute a violation of the
relevant laws of such jurisdiction
For immediate release
15 July 2015
Recommended Cash Acquisition
for
AGA Rangemaster Group plc ("AGA")
by
Middleby UK Residential Holding Ltd ("Bidco")
(a wholly-owned subsidiary of The Middleby Corporation
("Middleby"))
Summary
-- The Boards of Middleby and AGA are pleased to announce the
terms of a recommended cash acquisition by Bidco (a wholly-owned
subsidiary of Middleby) for the entire issued and to be issued
ordinary share capital of AGA to be implemented by means of the
Scheme or, if Bidco so elects and the Takeover Panel consents, a
Takeover Offer (the "Acquisition").
-- Under the terms of the Acquisition, AGA Shareholders will receive:
185 pence in cash for each AGA Share
-- The Acquisition values the entire issued and to be issued
share capital of AGA at approximately GBP129 million and represents
a premium of approximately:
- 77 per cent over the Closing Price of 104 pence per AGA Share
on 16 June 2015, being the last Business Day prior to commencement
of the Offer Period;
- 22 per cent over the Closing Price of 152 pence per AGA Share
on 14 July 2015, being the last practicable date before the date of
this Announcement; and
- 87 per cent over the average Closing Price per AGA Share over
the three months immediately preceding 16 June 2015, being the last
Business Day prior to commencement of the Offer Period.
-- Middleby and AGA believe that the Acquisition recognises the
quality of AGA's businesses and its prospects and provides a
compelling opportunity for AGA Shareholders to realise value from
their current holdings in cash.
Reasons for the Acquisition
-- Middleby believes the Acquisition of AGA presents an
attractive opportunity to extend its global reach in the premium
kitchen appliances segment. AGA's world class brands, including
AGA, Rangemaster, La Cornue and Marvel, complement Middleby's
portfolio of global brands providing a comprehensive line-up of
products and technologies creating a leading position with global
reach and greater scale.
-- The Acquisition will open up new lines of distribution for
AGA to expand its distribution of products outside of the United
Kingdom, leveraging Middleby's existing customer relationships,
sales capabilities, marketing expertise and supply chain
infrastructure. In addition, Middleby will seek to promote greater
product innovation including leveraging product and technology
sharing from Middleby's existing portfolio of brands.
Acquisition Structure
-- It is intended that the Acquisition will be implemented by
means of a Court sanctioned scheme of arrangement under Part 26 of
the Act. However, Bidco reserves the right to elect (with the
consent of the Takeover Panel) to implement the Acquisition by way
of a Takeover Offer for the entire issued and to be issued ordinary
share capital of AGA as an alternative to the Scheme. The
Acquisition is conditional on, among other things, (i) the approval
of AGA Shareholders at the Court Meeting and the passing of the
Resolutions at the General Meeting, and (ii) the sanction of the
Court.
Recommendation
-- The AGA Directors, who have been so advised by Rothschild and
Numis as to the financial terms of the Acquisition, consider the
terms of the Acquisition to be fair and reasonable. In providing
advice to the AGA Directors, Rothschild and Numis have taken into
account the commercial assessments of the AGA Directors.
Accordingly, the AGA Directors intend to recommend unanimously that
AGA Shareholders:
- vote (or procure votes) in favour of the Scheme at the Court
Meeting and the Resolutions to be proposed at the General Meeting;
or
- in the event that the Acquisition is implemented by way of a
Takeover Offer, accept (or procure acceptances of) the Takeover
Offer.
Irrevocable undertakings and letters of intent
-- AGA Directors: Bidco has received irrevocable undertakings to
vote in favour of the Scheme at the Court Meeting and the
Resolutions to be proposed at the General Meeting (or in the event
that the Acquisition is implemented by way of a Takeover Offer, to
accept the Takeover Offer) from certain AGA Directors in respect of
their own beneficial holdings of AGA Shares amounting, in
aggregate, to 441,049 AGA Shares, representing approximately 0.6
per cent of the issued ordinary share capital of AGA.
-- Major AGA Shareholders: Bidco has received non-binding
letters of intent from J O Hambro Capital Management Ltd and River
and Mercantile Asset Management LLP, AGA's two largest
shareholders, to vote (or procure the vote) in favour of the Scheme
(or in the event that the Acquisition is implemented by way of a
Takeover Offer, to accept (or procure the acceptance of) the
Takeover Offer) in respect of, in aggregate, 12,794,094 AGA Shares,
representing approximately 18.5 per cent of the issued ordinary
share capital of AGA.
-- Further details of these irrevocable undertakings and letters
of intent are set out in Appendix II to this Announcement.
In aggregate, Bidco has received irrevocable undertakings and
letters of intent in respect of 13,235,143 AGA Shares, representing
approximately 19.1 per cent of the issued ordinary share capital of
AGA.
Further details of the Acquisition will be contained in the
Scheme Document that will be posted to AGA Shareholders as soon as
practicable and, in any event, within 28 days of this
Announcement.
Comments on the Acquisition
Commenting on the Acquisition, Selim Bassoul, Chairman and Chief
Executive Officer of Middleby said:
"The addition of AGA's world class brands, product range and
manufacturing capability to our existing portfolio will further
strengthen Middleby's global reach and enhance our position as a
leader in the premium segment for residential kitchen
equipment.
This acquisition will expand Middleby's local manufacturing
platform and significantly increase our presence in the UK market.
We believe this transaction will provide meaningful growth
opportunities as we leverage AGA's existing sales, service and
manufacturing capabilities with Middleby's market expertise,
product innovation and well established global distribution
network."
Commenting on the Acquisition, John Coleman, Chairman of AGA
said:
"The Board of AGA has been assessing the development
opportunities for the business for some time and in January 2015
appointed Rothschild to help in the process. With the major product
development programmes of recent years now largely completed, the
Board has sought to identify the commercial triggers that have the
potential to bring more rapid growth. Middleby provides a larger
scale framework including an established international structure to
deliver fully on the potential of the business. The financial
strength of Middleby also achieves a better balance with AGA's
pension obligations - which are large in relation to the existing
business and which have become a significant constraint on the
progress of the Group."
Commenting on the Acquisition, William McGrath, Chief Executive
of AGA said:
"AGA is a leading international premium consumer brands group,
manufacturing and distributing some of the best known and loved
kitchen appliances and interiors furnishings in the world. Our
innovation and investment over recent years has created a new
generation of products relevant to today's consumer. AGA will be
the European platform for Middleby and our cookers will be sold
through Middleby distribution channels, which will increase growth
rates in North America and in other international markets. We
believe Middleby will build on our progress to date and
successfully develop our iconic and unique brands for the
future."
Enquiries
Bidco and Middleby:
Timothy Fitzgerald Tel: +1 847 429 7756
Darcy Bretz
Morgan Stanley:
(Financial Adviser to Bidco and Middleby)
Colm Donlon Tel: +44 (0)20 7425 8000
Daniel Blank
Michael Bird
AGA:
William McGrath Tel: +44 (0)1926 455 731
Shaun Smith
Rothschild:
(Financial Adviser to AGA)
Stuart Vincent Tel: +44 (0)20 7280 5000
Alistair Allen
Numis:
(Financial Adviser and Broker to AGA)
Chris Wilkinson Tel: +44 (0)20 7260 1000
Andrew Holloway
Brunswick Group:
(Communications Adviser to AGA)
Simon Sporborg Tel: +44 (0)20 7404 5959
Nina Coad
This summary should be read in conjunction with the full text of
the following Announcement and its appendices.
Appendix I contains the Conditions.
Appendix II sets out details of the Irrevocable Undertakings and
Letters of Intent.
Appendix III sets out the sources and bases of certain of the
financial information contained in this Announcement (including
this summary).
Terms used in this Announcement (including this summary) have
the meanings attributed to them in Appendix IV.
Important disclaimers (including in relation to securities law
restrictions)
This Announcement is for information purposes only and is not
intended to and does not constitute or form part of any offer to
sell or subscribe for or any invitation to purchase or subscribe
for any securities or the solicitation of any vote or approval in
any jurisdiction pursuant to the Acquisition or otherwise. The
Acquisition will be made solely pursuant to the terms of the Scheme
Document (or, if applicable, the Offer Document), which will
contain the full terms and conditions of the Acquisition, including
details of how to vote in respect of the Acquisition. Any decision
in respect of, or other response to, the Acquisition should be made
only on the basis of the information contained in the Scheme
Document (or, if applicable, the Offer Document). This Announcement
does not constitute a prospectus or a prospectus equivalent
document.
The release, publication or distribution of this Announcement in
jurisdictions other than the United Kingdom may be restricted by
law and therefore any persons who are subject to the laws of any
jurisdiction other than the United Kingdom should inform themselves
about, and observe any applicable requirements. In particular, the
ability of persons who are not resident in the United Kingdom to
vote their AGA Shares in respect of the Scheme at the Court
Meeting, or to execute and deliver Forms of Proxy appointing
another to vote at the Court Meeting on their behalf, may be
affected by the laws of the relevant jurisdictions in which they
are located. This Announcement has been prepared for the purpose of
complying with English law and the Takeover Code and the
information disclosed may not be the same as that which would have
been disclosed if this Announcement had been prepared in accordance
with the laws of jurisdictions outside the United Kingdom.
No person has been authorised to make any representations on
behalf of AGA, Bidco or Middleby (or any of their respective
Affiliates) concerning the Scheme or the Acquisition which are
inconsistent with the statements contained herein, and any such
representations, if made, may not be relied upon as having been so
authorised.
Copies of this Announcement and any formal documentation
relating to the Acquisition are not being, and must not be,
directly or indirectly, mailed or otherwise forwarded, distributed
or sent in or into or from any Restricted Jurisdiction and persons
receiving such documents (including custodians, nominees and
trustees) must not mail or otherwise forward, distribute or send
them in or into or from any Restricted Jurisdiction.
Any failure to comply with the applicable restrictions may
constitute a violation of the securities laws of any such
jurisdiction and, to the fullest extent permitted by applicable
law, AGA, Bidco and Middleby (and their respective Affiliates)
disclaim any responsibility or liability for the violation of such
restrictions by any person.
No person should construe the contents of this Announcement as
legal, financial or tax advice and any interested person should
consult its own advisers in connection with such matters.
Notice to US investors
The Acquisition relates to the shares of an English company that
is not registered under the Exchange Act and is being made by means
of a scheme of arrangement provided for under English company law.
A transaction effected by means of a scheme of arrangement is not
subject to the tender offer rules or the proxy solicitation rules
under the Exchange Act. Accordingly, the Acquisition is subject to
the disclosure requirements and practices applicable in the United
Kingdom to schemes of arrangement which differ from the disclosure
requirements in the United States tender offer and proxy
solicitation rules under the Exchange Act. Financial information
included (or incorporated by reference) in this Announcement and
the Scheme Document in relation to AGA has been or will have been
prepared in accordance with accounting standards applicable in the
United Kingdom that may not be comparable to financial information
of US companies or companies whose financial statements are
prepared in accordance with generally accepted accounting
principles in the United States. It may be difficult for US holders
of AGA Shares to enforce their rights and any claim arising out of
US federal laws, since AGA and certain Affiliates of Middleby are
located in a non-US jurisdiction and some or all of their officers
and directors may be resident in a non-US jurisdiction. US holders
of AGA Shares may not be able to sue a non-US company or its
officers or directors in a non-US court for violations of the US
securities laws. Further, it may be difficult to compel a non-US
company and its affiliates to subject themselves to a US court's
judgement. If Bidco exercises its right to implement the
Acquisition by way of a Takeover Offer, such offer will be made in
compliance with applicable US laws and regulations.
Bidco and Middleby Financial adviser
Morgan Stanley & Co. International plc, which is authorised
by the Prudential Regulation Authority and regulated by the
Financial Conduct Authority and the Prudential Regulation Authority
in the United Kingdom, is acting as financial adviser to Bidco and
Middleby and no-one else in connection with the Acquisition. In
connection with such matters, Morgan Stanley, its affiliates and
their respective directors, officers, employees and agents will not
regard any other person as their client, nor will they be
responsible to any other person for providing the protections
afforded to their clients or for providing advice in relation to
the Acquisition, the contents of this Announcement or any other
matter referred to herein.
AGA Financial advisers
Rothschild, which is authorised by the Prudential Regulation
Authority and regulated by the Financial Conduct Authority and the
Prudential Regulation Authority in the United Kingdom, is acting
exclusively for AGA and for no one else in connection with the
subject matter of this Announcement and will not be responsible to
anyone other than AGA for providing the protections afforded to its
clients or for providing advice in connection with the subject
matter of this Announcement.
Numis, which is authorised and regulated by the Financial
Conduct Authority in the United Kingdom, is acting exclusively for
AGA and for no one else in connection with the subject matter of
this Announcement and will not be responsible to anyone other than
AGA for providing the protections afforded to its clients or for
providing advice in connection with the subject matter of this
Announcement.
Forward Looking Statements
This Announcement contains certain forward-looking statements
with respect to the financial condition, results of operations and
business of AGA and certain plans and objectives of Bidco with
respect thereto. These forward-looking statements can be identified
by the fact that they do not relate only to historical or current
facts. Forward-looking statements often use words such as
'anticipate', 'target', 'expect', 'estimate', 'intend', 'plan',
'goal', 'believe', 'hope', 'aims', 'continue', 'will', 'may',
'should', 'would', 'could' or other words of similar meaning. These
statements are based on assumptions and assessments made by AGA
and/or Bidco and/or Middleby (and/or their respective Affiliates)
in light of their experience and their perception of historical
trends, current conditions, future developments and other factors
they believe appropriate. By their nature, forward-looking
statements involve risk and uncertainty because they relate to
events and depend on circumstances that will occur in the future.
The factors described in the context of such forward-looking
statements in this Announcement could cause actual results and
developments to differ materially from those expressed in or
implied by such forward-looking statements. No assurance can be
given that such expectations will prove to have been correct and
persons reading this Announcement are therefore cautioned not to
place undue reliance on these forward-looking statements which
speak only as at the date of this Announcement. None of AGA, Bidco
or Middleby (nor any of their respective Affiliates) assumes any
obligation to update or correct the information contained in this
Announcement (whether as a result of new information, future events
or otherwise), except as required by applicable law.
There are several factors which could cause actual results to
differ materially from those expressed or implied in
forward-looking statements. Among such factors are changes in the
global, political, economic, business, competitive, market and
regulatory forces, future exchange and interest rates, changes in
tax rates and future business combinations or disposals.
None of AGA, Bidco or Middleby (nor any of their respective
Affiliates, members, directors, officers, employees, advisers or
persons acting on their behalf) provides any representation,
assurance or guarantee that the occurrence of the events expressed
or implied in any forward looking statements in this Announcement
will actually occur.
No profit forecasts or estimates
No statement in this Announcement is intended as a profit
forecast or estimate for any period and no statement in this
Announcement should be interpreted to mean that earnings or
earnings per ordinary share for AGA for the current or future
financial years would necessarily match or exceed the historical
published earnings or earnings per ordinary share for AGA.
Disclosure requirements of the Takeover Code
Under Rule 8.3(a) of the Code, any person who is interested in 1
per cent or more of any class of relevant securities of an offeree
company or of any securities exchange offeror (being any offeror
other than an offeror in respect of which it has been announced
that its offer is, or is likely to be, solely in cash) must make an
Opening Position Disclosure following the commencement of the offer
period and, if later, following the announcement in which any
securities exchange offeror is first identified. An Opening
Position Disclosure must contain details of the person's interests
and short positions in, and rights to subscribe for, any relevant
securities of each of (i) the offeree company and (ii) any
securities exchange offeror(s). An Opening Position Disclosure by a
person to whom Rule 8.3(a) applies must be made by no later than
3.30 pm (London time) on the 10th business day following the
commencement of the offer period and, if appropriate, by no later
than 3.30 pm (London time) on the 10th business day following the
announcement in which any securities exchange offeror is first
identified. Relevant persons who deal in the relevant securities of
the offeree company or of a securities exchange offeror prior to
the deadline for making an Opening Position Disclosure must instead
make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes,
interested in 1 per cent or more of any class of relevant
securities of the offeree company or of any securities exchange
offeror must make a Dealing Disclosure if the person deals in any
relevant securities of the offeree company or of any securities
exchange offeror. A Dealing Disclosure must contain details of the
dealing concerned and of the person's interests and short positions
in, and rights to subscribe for, any relevant securities of each of
(i) the offeree company and (ii) any securities exchange offeror,
save to the extent that these details have previously been
disclosed under Rule 8. A Dealing Disclosure by a person to whom
Rule 8.3(b) applies must be made by no later than 3.30 pm (London
time) on the business day following the date of the relevant
dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of an offeree company or a
securities exchange offeror, they will be deemed to be a single
person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree
company and by any offeror and Dealing Disclosures must also be
made by the offeree company, by any offeror and by any persons
acting in concert with any of them (see Rules 8.1, 8.2 and
8.4).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Takeover Panel's website at www.thetakeoverpanel.org.uk,
including details of the number of relevant securities in issue,
when the offer period commenced and when any offeror was first
identified. You should contact the Takeover Panel's Market
Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as
to whether you are required to make an Opening Position Disclosure
or a Dealing Disclosure.
Right to switch to a Takeover Offer
Bidco reserves the right to elect (with the consent of the
Takeover Panel) to implement the Acquisition by way of a Takeover
Offer for the entire issued and to be issued ordinary share capital
of AGA as an alternative to the Scheme. In such an event, the
Takeover Offer will be implemented on the same terms (subject to
appropriate amendments), so far as applicable, as those which would
apply to the Scheme and subject to the amendment referred to in
Appendix I to this Announcement.
Publication on Website
In accordance with Rule 26.1 of the Takeover Code, a copy of
this Announcement will be made available (subject to certain
restrictions relating to persons resident in Restricted
Jurisdictions), free of charge, at
www.agarangemaster.com/investor-relations (under the "Market
Announcements" section) and www.middleby.com (under the "Investor
Relations" section) by no later than 12 noon (London time) on 16
July 2015.
Neither the content of the websites nor the content of any other
website accessible from hyperlinks on such websites is incorporated
into, or forms part of, this Announcement.
You may request a hard copy of this Announcement (and any
information incorporated into it by reference to another source) by
contacting the Company Secretary of AGA during business hours on
Tel: +44 (0)1926 455751 or by submitting a request in writing to
the Company Secretary of AGA at Juno Drive, Leamington Spa,
Warwickshire CV31 3RG. Your attention is drawn to the fact that a
hard copy of this Announcement will not be sent to you unless so
requested. You may also request that all future documents,
announcements and information to be sent to you in relation to the
Acquisition should be in hard copy form.
Electronic communications
Please be aware that addresses, electronic addresses and certain
information provided by AGA Shareholders, persons with information
rights and other relevant persons for the receipt of communications
from AGA may be provided to Bidco during the offer period if
requested under Section 4 of Appendix 4 to the Takeover Code.
Not for release, publication or distribution, in whole or in
part, in or into or from any restricted jurisdictions or any other
JURISDICTION where to do so would constitute a violation of the
relevant laws of such jurisdiction
15 July 2015
Recommended Cash Acquisition
for
AGA Rangemaster Group plc ("AGA")
by
Middleby UK Residential Holding Ltd ("Bidco")
(a wholly-owned subsidiary of The Middleby Corporation
("Middleby"))
1. Introduction
The Boards of Middleby and AGA are pleased to announce the terms
of a recommended cash acquisition by Bidco (a wholly-owned
subsidiary of Middleby) for the entire issued and to be issued
ordinary share capital of AGA to be implemented by means of the
Scheme or, if Bidco so elects and the Takeover Panel consents, a
Takeover Offer.
2. Summary of the terms of the Acquisition
The full terms and conditions of the Acquisition will be set out
in the Scheme Document. Under the terms of the Acquisition, which
is subject to the Conditions and other terms set out in this
Announcement (including Appendix I), AGA Shareholders would
receive:
185 pence in cash for each AGA Share
The Acquisition values the entire issued and to be issued share
capital of AGA at approximately GBP129 million and represents a
premium of approximately:
- 77 per cent over the Closing Price of 104 pence per AGA Share
on 16 June 2015, being the last Business Day prior to commencement
of the Offer Period;
- 22 per cent over the Closing Price of 152 pence per AGA Share
on 14 July 2015, being the last practicable date before this
Announcement; and
- 87 per cent over the average Closing Price per AGA Share over
the three months immediately preceding 16 June 2015, being the last
Business Day prior to commencement of the Offer Period.
The Scheme Shares will be acquired by Bidco fully paid and free
from all liens, equitable interests, charges, encumbrances, rights
of pre-emption and any other third party rights or interests
whatsoever and together with all rights existing at the date of
this Announcement or thereafter attaching thereto, including
(without limitation) the right to receive and retain, in full, all
dividends and other distributions (if any) declared, made or paid
or any other return of capital (whether by way of reduction of
share capital or share premium account or otherwise) made on or
after the date of this Announcement in respect of the Scheme
Shares.
If any dividend or other distribution in respect of Scheme
Shares is declared, paid or made on or after the date of this
Announcement, Bidco reserves the right to reduce the consideration
payable for each Scheme Share under the terms of the Acquisition by
the amount per Scheme Share of such dividend or distribution.
3. Background to and reasons for the Acquisition
Middleby is an experienced acquirer of businesses having
purchased over 20 companies in the past five years and has a strong
record of integrating businesses successfully. Middleby is
committed to enhancing its position in the United Kingdom market
and this Acquisition builds on the success of Middleby's
acquisition of Lincat in 2011.
Middleby believes the Acquisition presents an attractive
opportunity to continue the expansion of Middleby's residential
platform globally whilst diversifying its business mix across end
markets and brands. In particular, Middleby believes that AGA's
world class brands, including AGA, Rangemaster, La Cornue and
Marvel, are complementary to Middleby's portfolio of global brands,
such as Viking and U-Line, providing a comprehensive line-up of
products and technologies for residential markets across the
world.
The Acquisition positions Middleby as a leading global
manufacturer in the premium segment for residential kitchen
equipment, a market segment that Middleby estimates to be worth
over US$1 billion globally with increased presence in international
markets and global scale.
Middleby believes that AGA is well positioned for growth and has
the potential to deliver significant EBITDA margin improvement and
aims to target bringing the EBITDA margin in-line with Middleby's
residential kitchen segment. This improvement is expected to come
from the recovery of the United Kingdom and European markets as
well as from taking advantage of synergies with Middleby's
residential and commercial platforms that will result from the
Acquisition. Middleby believes these benefits include:
-- quality enhancements and design synergies from product,
technology and innovation sharing, driving cost effective designs
through sharing of engineering know-how;
-- greater combined purchasing leverage of common product
sub-groups/parts, including opportunities to standardise common
parts alongside supply chain optimisation including improved
logistics costs;
-- opening up new lines of distribution for AGA by leveraging
Middleby's distribution infrastructure supporting global sales
growth and improved service, including by leveraging Middleby's
existing customer relationships, sales capabilities, market
expertise and supply chain infrastructure;
-- sharing and implementation of manufacturing best practices to
improve efficiencies and utilisation of low-cost component
manufacturing capabilities;
-- savings derived from AGA no longer being a public company; and
-- AGA gaining access to Middleby's technical expertise and
financial strength, which will enable AGA to react more quickly to
opportunities that are identified.
Middleby believes that the Acquisition will be accretive in the
first full year (being the year of 2016) whilst return on invested
capital is expected to reach mid-teens by 2018.
4. Background to and reasons for the recommendation
AGA is a leading international premium consumer brands group
which manufactures and distributes some of the best known and loved
kitchen appliances and interiors furnishings in the world.
The AGA Group has a strong track record of growing and
developing its range of products and has been positioning itself
increasingly to take advantage of international markets. In the
first half of 2015, AGA traded ahead of the prior year and
anticipates progress in 2015 in line with its expectations.
However, while there is a relatively broad range of brands and
products for the AGA Group to promote, the scale of the AGA Group
today and its current geographical penetration is constrained by
the significant impact that the AGA Pension Schemes have on the AGA
Group's resources.
The AGA Pension Schemes, of which the AGA Group is sponsor, are
large relative to the size of the AGA Group as a whole and are in
deficit. As at 31 December 2014, the ARG Pension Scheme had assets
of GBP867 million (excluding defined contribution funds) and
reported a deficit on an IAS basis of GBP69 million. Over recent
years, the AGA Pension Schemes have restricted the strategic
options available to the AGA Group and limited management's ability
to invest in further growth opportunities. For example, the
resources available to the management team to promote and develop
the AGA Group's products have been constrained and as a result, the
AGA Group brands have not been grown or exploited to their fullest
extent.
The relative size of the AGA Pension Schemes and deficit has
also contributed to an increase in the financial risk profile of
the AGA Group from a shareholder perspective. As an independent
company, the cash flow position of AGA is expected to continue to
be affected by pension contribution payments which are both
material relative to the profitability of the AGA Group and
inherently uncertain due to fluctuations in interest rates. No
dividends have been paid to shareholders for the last three years
and the Board of AGA does not anticipate being able to resume
dividend payments in the near term.
In this context, as previously announced AGA has, for some time,
been considering a range of strategic alternatives as the Board of
AGA seeks to develop the AGA Group in order to deliver more rapid
growth leading to increased shareholder value. In January 2015,
Rothschild was appointed to help in this process.
Those strategic alternatives include seeking a strategic partner
to take a stake in the AGA Group and assist in the development of
the business, potential disposal of certain non-core businesses and
other options to improve the covenant of the AGA Group relative to
the AGA Pension Schemes.
Whilst AGA was reviewing these options, Middleby approached the
Board of AGA and put forward a proposal to acquire the entire AGA
Group. The Board of AGA believes Middleby offers a unique
opportunity to combine AGA's premium brands with those of a major
international consumer and foodservice group, giving greater scale
and scope of activities from which AGA's brands and products will
benefit significantly. Middleby provides a larger scale framework,
including an established international structure, through which
AGA's potential can be better delivered.
AGA will be the European platform for Middleby and will be able
to add Middleby products to its range including brands such as
Viking. AGA cookers will be sold through Middleby distribution
channels which are expected to increase growth rates for sales of
the AGA Group's products in North America and in other
international markets.
Furthermore, Middleby is able to provide a significantly
enhanced covenant to the ARG Pension Scheme which will, assuming
the Acquisition completes, result in an improved pension settlement
being put in place relative to the current deficit recovery plan
which AGA has previously been able to secure as an independent
company. Details of the new pension settlement that would come into
effect only on completion of the Acquisition are summarised in
paragraph 10 below.
The Acquisition also provides the AGA Shareholders with the
opportunity to realise their entire investment in AGA at an
attractive cash price relative to the recent share price trading
range during a period of uncertainty for AGA in relation to the ARG
Pension Scheme's position.
The AGA Directors believe that the Acquisition should provide
all stakeholders of AGA with greater certainty than the other
strategic alternatives available, taking into account the
challenges facing the business that are derived from the AGA
Pension Schemes.
5. Recommendation
The AGA Directors, who have been so advised by Rothschild and
Numis as to the financial terms of the Acquisition, consider the
terms of the Acquisition to be fair and reasonable. In providing
advice to the AGA Directors, Rothschild and Numis have taken into
account the commercial assessments of the AGA Directors.
Accordingly, the AGA Directors intend to recommend unanimously
that AGA Shareholders vote (or procure votes) in favour of the
Scheme at the Court Meeting and the Resolutions to be proposed at
the General Meeting (or in the event that the Acquisition is
implemented by way of a Takeover Offer, accept (or procure
acceptances of) the Takeover Offer), as the AGA Directors have
irrevocably undertaken to do in respect of their own beneficial
holdings of AGA Shares.
6. Irrevocable Undertakings and Letters of Intent
6.1 AGA Directors
Bidco has received irrevocable undertakings to vote in favour of
the Scheme at the Court Meeting and the Resolutions to be proposed
at the General Meeting (or in the event that the Acquisition is
implemented by way of a Takeover Offer, to accept the Takeover
Offer) from certain AGA Directors in respect of their own
beneficial holdings of AGA Shares amounting, in aggregate, to
441,049 AGA Shares, representing approximately 0.6 per cent of the
issued ordinary share capital of AGA as at 14 July 2015, being the
last practicable date before the date of this Announcement.
6.2 Major AGA Shareholders
Bidco has received non-binding letters of intent from J O Hambro
Capital Management Ltd and River and Mercantile Asset Management
LLP, AGA's two largest shareholders, to vote (or procure the vote)
in favour of the Scheme (or in the event that the Acquisition is
implemented by way of a Takeover Offer, to accept (or procure the
acceptance of) the Takeover Offer) in respect of, in aggregate,
12,794,094 AGA Shares, representing approximately 18.5 per cent of
the issued ordinary share capital of AGA as at 14 July 2015, being
the last practicable date before the date of this Announcement.
In aggregate, Bidco has received irrevocable undertakings and
letters of intent in respect of 13,235,143 AGA Shares, representing
approximately 19.1 per cent of the issued ordinary share capital of
AGA as at 14 July 2015, being the last practicable date before the
date of this Announcement.
Further details of these Irrevocable Undertakings and Letters of
Intent are set out in Appendix II to this Announcement.
7. Information relating to Middleby and Bidco
7.1 Middleby
Middleby is a leader in the design, manufacture, marketing,
distribution, and service of a broad line of (i) cooking and
warming equipment used in all types of commercial restaurants and
institutional kitchens, (ii) food preparation, cooking, baking,
chilling and packaging equipment for food processing operations,
and (iii) premium kitchen equipment including ranges, ovens,
refrigerators, ventilation and dishwashers primarily used in the
residential market.
Middleby is listed on the NASDAQ National Market under the
symbol "MIDD" and as at 13 July 2015, had a market capitalisation
of US$6,796,119,644.
On 4 March 2015, Middleby reported the following net sales,
earnings and total assets in its audited consolidated financial
statements for the 12 months ended 3 January 2015:
(a) net sales: US$1,636,538,000;
(b) net earnings: US$193,312,000; and
(c) total assets: US$2,066,131,000.
7.2 Bidco
Bidco is a newly incorporated private limited company
incorporated in England and Wales and an indirect wholly-owned
subsidiary of Middleby, formed for the purpose of making the
Acquisition. Bidco has not traded since its incorporation nor has
it entered into any obligations other than in connection with the
Acquisition.
8. Financing the Acquisition
The consideration payable by Bidco under the terms of the
Acquisition will be funded from the proceeds of a drawing under the
BAML Facility Agreement that have been placed in an escrow account
(the "Escrow Account") with Bank of America, N.A., in the name of a
Middleby Affiliate subject to the terms of an escrow agreement.
Until such Affiliate of Middleby releases the funds to Bidco to
enable it to satisfy the consideration payable by it in connection
with the Acquisition (unless the Acquisition terminates or lapses
in accordance with its terms and with the consent of the Takeover
Panel (where necessary)) such Affiliate of Middleby must maintain
enough cash in the Escrow Account to allow Bidco to satisfy the
consideration payable by it in connection with the Acquisition.
Morgan Stanley & Co. International plc, as financial adviser
to Bidco, is satisfied that sufficient financial resources are
available to Bidco to enable it to satisfy in full the cash
consideration payable under the terms of the Acquisition.
9. AGA Share Plan
The Acquisition will extend to any AGA Shares unconditionally
allotted or issued on or prior to the Effective Date (or such
earlier date as Bidco may, subject to the Takeover Code, decide)
pursuant to the exercise of options under the AGA Share Plan.
Participants in the AGA Share Plan will be written to separately
and appropriate proposals will be made to them in due course.
In the event that this Acquisition is to be implemented by way
of a Takeover Offer, proposals will be put to the participants in
the AGA Share Plan to enable them to participate in the Takeover
Offer on an equivalent basis in the event that such Takeover Offer
becomes wholly unconditional.
Middleby and AGA have entered into a memorandum of understanding
setting out their intentions in respect of the AGA Share Plan (the
"Memorandum of Understanding").
10. New Pension Settlement
AGA has several pension schemes, the main one being the AGA
Rangemaster Group Pension Scheme (the "ARG Pension Scheme").
Middleby intends that AGA will comply with its obligations in
relation to all its pension schemes.
Middleby has reached an agreement with the trustee of the ARG
Pension Scheme (the "Pensions Agreement") regarding funding and
investment strategies for the ARG Pension Scheme and related
matters. The Pensions Agreement will replace the existing funding
and security arrangements for the ARG Pension Scheme on completion
of the Acquisition. The actuarial valuation of the ARG Pension
Scheme as at 31 December 2014 will then be completed on an agreed
basis and will show that, on that valuation date, the scheme's
assets were GBP877 million (including defined contribution funds of
GBP10 million) compared with technical provisions for statutory
funding purposes of GBP961 million, a shortfall of GBP84 million.
Under the Pensions Agreement, this shortfall is to be addressed by
a recovery plan requiring deficit contributions payable by AGA of
GBP10 million shortly after completion of the Acquisition, a
further GBP10 million by 15 January 2016, and up to GBP2.5 million
per annum during the six years after the third anniversary of the
Acquisition. The two contributions of GBP10 million referred to
above will be funded by Middleby.
The Pensions Agreement includes two guarantees to be given by
Middleby Marshall Inc. ("MMI") in favour of the ARG Pension Scheme
with effect from completion of the Acquisition. The first (the
"Unconditional Pensions Guarantee") is a guarantee of AGA's
obligations to the ARG Pension Scheme subject to a cap of GBP60
million. The second (the "Conditional Pensions Guarantee") is a
supplementary guarantee of AGA's obligations to the ARG Pension
Scheme under which claims are limited to the aggregate outstanding
amount of deficit contributions under the ARG Pension Scheme's
schedule of contributions from time to time (after taking account
of payments made under the Unconditional Pensions Guarantee) and
are subject to a cap which starts at GBP95 million and will be (a)
increased to the extent that AGA pays dividends after the
Acquisition in excess of 50 per cent of AGA Group operating profits
and (b) reduced by the amounts of deficit contributions paid to the
ARG Pension Scheme after the Acquisition (except for the GBP10
million payable shortly after the Acquisition and the GBP10 million
payable by 15 January 2016). The Conditional Pensions Guarantee is
subject to conditions, including conditions that the ARG Pension
Scheme trustee abides by the long-term funding and investment
strategies that have been agreed between the trustee and MMI.
The Pensions Agreement is comprised of a framework agreement
between MMI and the ARG Pension Scheme trustee (the "Pensions
Framework Agreement") and other documents in agreed form that will
take effect on completion of the Acquisition, including the
Unconditional Pensions Guarantee and the Conditional Pensions
Guarantee.
11. Bidco's intentions for AGA's management and employees
Following completion of the Acquisition, Middleby intends to
work with the management and employees of AGA to grow the business,
leveraging the strong brands of AGA and utilising Middleby's
industry expertise and global infrastructure. In this regard,
Middleby recognises the importance of AGA's presence in the United
Kingdom and intends to maintain AGA's manufacturing operations in
the United Kingdom.
Middleby intends to form an internal team to carry out a
strategic review of AGA's business following completion of the
Acquisition. In the meantime, until such review is completed,
Middleby has not made any firm decisions with regards to AGA's
business.
Middleby confirms that, following completion of the Acquisition,
it intends to fully observe the existing contractual and statutory
employment rights of AGA's management and employees in accordance
with applicable law.
It is intended that the non-executive directors of AGA will
resign as AGA Directors following the Effective Date.
12. Structure of the Acquisition
12.1 Scheme
It is intended that the Acquisition will be effected by a Court
sanctioned scheme of arrangement between AGA and the Scheme
Shareholders under Part 26 of the Act. The purpose of the Scheme is
to provide for Bidco to become the owner of the whole of the issued
and to be issued share capital of AGA. Under the Scheme, the
Acquisition is to be principally achieved by:
(a) the transfer of the Scheme Shares held by Scheme
Shareholders to Bidco in consideration for which the Scheme
Shareholders will receive the Consideration; and
(b) amendments to AGA's Articles of Association to ensure that
any AGA Shares issued after the approval of the Scheme at the Court
Meeting and the Effective Date will (i) be subject to the Scheme,
and (ii) automatically be acquired by Bidco.
Approval by Court Meeting and General Meeting
In order to become Effective, the Scheme requires:
(a) the satisfaction (or, where applicable, waiver) of the Conditions - see paragraph 12.2;
(b) the approval of a majority in number of the Scheme
Shareholders who vote, representing not less than 75 per cent in
value of the Scheme Shares voted, either in person or by proxy, at
the Court Meeting. At the Court Meeting, voting will be by poll and
not on a show of hands and each Scheme Shareholder present in
person or by proxy will be entitled to one vote for each Scheme
Share held; and
(c) the approval of by not less than 75 per cent of the votes
cast, either in person or by proxy, of the Resolutions at the
General Meeting (to be held directly after the Court Meeting)
necessary in order to implement the Scheme, being amendments to
AGA's Articles of Association to ensure that any AGA Shares issued
after the approval of the Scheme at the Court Meeting and the
Scheme Record Time will (i) be subject to the Scheme, and (ii)
automatically be acquired by Bidco.
Application to Court to sanction the Scheme
Once the approvals of the AGA Shareholders have been obtained at
the Court Meeting and the General Meeting, the Scheme must be
sanctioned by the Court at the Court Hearing.
The Scheme will become effective in accordance with its terms on
delivery of the Scheme Court Order to Companies House. Upon the
Scheme becoming Effective, it will be binding on all Scheme
Shareholders, irrespective of whether or not they attended or voted
at the Court Meeting or General Meeting, or whether they voted in
favour of or against the Scheme.
Full details of the Scheme to be set out in the Scheme
Document
The Scheme is subject to the satisfaction (or, where applicable,
waiver) of the Conditions and the full terms and conditions to be
set out in the Scheme Document. The Scheme Document will include
full details of the Scheme, together with notices of the Court
Meeting and the General Meeting and the expected timetable, and
will specify the action to be taken by Scheme Shareholders.
The Scheme will be governed by English law. The Scheme will be
subject to the applicable requirements of the Takeover Code, the
Takeover Panel, the London Stock Exchange, the FCA and the Listing
Rules.
The Scheme will contain a provision for AGA and Bidco to jointly
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. AGA has been advised that the Court would be
unlikely to approve any modification of, or addition to, or impose
a condition to the Scheme which might be material to the interests
of the Scheme Shareholders unless the Scheme Shareholders were
informed of such modification, addition or condition. It would be a
matter for the Court to decide, in its discretion, whether or not a
further meeting of the Scheme Shareholders should be held in these
circumstances.
It is expected that the Scheme Document will be dispatched to
AGA Shareholders and, for information only, to participants in the
AGA Share Plan as soon as practicable and, in any event, within 28
days of the date of this Announcement.
12.2 Conditions to the Acquisition
The Conditions are set out in full in Appendix I to this
Announcement.
The Scheme is conditional, amongst other things, upon:
(a) the Scheme becoming Effective by the Long Stop Date, failing
which the Scheme will lapse;
(b) the approval of the Scheme by a majority in number of the
Scheme Shareholders, representing not less than 75 per cent in
value of the Scheme Shares held by those Scheme Shareholders,
present and voting, either in person or by proxy, at the Court
Meeting or at any adjournment thereof on or before the 22nd day
after the expected date of the Court Meeting to be set out in the
Scheme Document in due course (or such later date as may be agreed
between Bidco and AGA and the Court may allow);
(c) the passing of the Resolutions by the requisite majority at
the General Meeting to be held on or before the 22nd day after the
expected date of the Court Meeting to be set out in the Scheme
Document in due course (or such later date as may be agreed between
Bidco and AGA and the Court may allow); and
(d) the sanction of the Scheme and the delivery of an office
copy of the Scheme Court Order to Companies House.
12.3 Scheme timetable / further information
A full anticipated timetable will be set out in the Scheme
Document which will be posted as soon as reasonably practicable,
and in any event, within 28 days of the date of this Announcement.
At this stage, subject to the approval and availability of the
Court (which is subject to change), Bidco expects the
implementation of the Acquisition to occur towards the end of the
third quarter or beginning of the fourth quarter of 2015. If the
Acquisition does not become Effective by the Long Stop Date, the
Acquisition will lapse.
12.4 Right to switch to a Takeover Offer
Bidco reserves the right to elect (with the consent of the
Takeover Panel) to implement the Acquisition by way of a Takeover
Offer for the entire issued and to be issued ordinary share capital
of AGA as an alternative to the Scheme. In such an event, the
Takeover Offer will be implemented on the same terms (subject to
appropriate amendments), so far as applicable, as those which would
apply to the Scheme and subject to the amendment referred to in
Appendix I to this Announcement.
If the Acquisition is effected by way of a Takeover Offer and
such Takeover Offer becomes or is declared unconditional in all
respects and sufficient acceptances are received, Bidco intends to:
(i) request the London Stock Exchange to cancel trading in AGA
Shares on the main market of the London Stock Exchange; and (ii)
exercise its rights to apply the provisions of Chapter 3 of Part 28
of the Act to acquire compulsorily the remaining AGA Shares in
respect of which the Takeover Offer has not been accepted.
13. De-listing and re-registration as a private limited company
13.1 De-listing
Unless the Meetings are adjourned, the last time for dealings
in, and for registration of transfers of, AGA Shares will be
immediately prior to the Scheme Record Time, following which AGA
Shares will be temporarily suspended from trading on the main
market of the London Stock Exchange. As at the Scheme Record Time,
there may be unsettled, open trades for the sale and purchase of
AGA Shares within the CREST system. The AGA Shares that are the
subject of such unsettled trades will be treated under the Scheme
in the same way as any other Scheme Share. Consequently, those AGA
Shares will be transferred under the Scheme and the Scheme
Shareholder will receive the Consideration in accordance with the
terms of the Scheme. No transfers of AGA Shares will be registered
after this time and, other than the registration of AGA Shares
released, transferred or issued under the AGA Share Plan after the
Court Hearing and prior to the Scheme becoming Effective, no AGA
Shares will be issued after this time. A request will be made to
the London Stock Exchange prior to the Effective Date to cancel the
trading in AGA Shares on the main market of the London Stock
Exchange with effect from the Effective Date or shortly
thereafter.
On the Effective Date, each certificate representing a holding
of AGA Shares subject to the Scheme will be cancelled. Share
certificates in respect of AGA Shares will cease to be valid and
every AGA Shareholder will be bound at the request of AGA to
deliver up to AGA, or to any person appointed by AGA, the share
certificate(s) for cancellation, or to destroy them. As from the
Scheme Record Time, each holding of Scheme Shares credited to any
stock account in CREST will be disabled and all Scheme Shares will
be removed from CREST in due course.
13.2 Re-registration as a private limited company
It is also intended that AGA be re-registered as a private
limited company in due course following the Effective Date.
14. Acquisition related arrangement
Middleby and AGA entered into a confidentiality agreement on 20
October 2014 (the "Confidentiality Agreement") pursuant to which
each of Middleby and AGA have agreed to keep confidential
information about the other party and not to disclose to any person
(other than authorised recipients) confidential information
exchanged by them unless required by law or regulation. These
confidentiality obligations terminate on 20 October 2016.
15. Disclosure of interests in AGA
15.1 Opening Position Disclosure
Since Middleby has no interest in relevant securities of AGA, no
Opening Position Disclosure has been made under Rule 8.1(a) of the
Takeover Code.
15.2 Interests
Save for the Irrevocable Undertakings and the Letters of Intent,
as at the close of business on 14 July 2015 (being the last
practicable date prior to the date of this Announcement), none of
(1) Bidco and Middleby or any of their respective directors or (2)
so far as the board of Bidco or Middleby is aware, any person
acting, or deemed to be acting, in concert with Bidco or
Middleby:
(a) had an interest in, or right to subscribe for, relevant securities of AGA;
(b) had any short position in (whether conditional or absolute
and whether in the money or otherwise), including any short
position under a derivative, any agreement to sell or any delivery
obligation or right to require another person to purchase or take
delivery of, relevant securities of AGA;
(c) had procured an irrevocable commitment or letters of intent
to accept the terms of Acquisition in respect of relevant
securities of AGA; or
(d) had borrowed or lent any AGA Shares.
Furthermore, save for the Irrevocable Undertakings and the
Letters of Intent, no arrangement exists between (i) Bidco or
Middleby or any of their respective associates, and (ii) AGA, in
relation to AGA Shares. For these purposes, an "arrangement"
includes any indemnity or option arrangement, any agreement or any
understanding, formal or informal, of whatever nature, relating to
AGA Shares which may be an inducement to deal or refrain from
dealing in such securities.
15.3 Rule 2.10 Disclosure
In accordance with Rule 2.10 of the Takeover Code, AGA confirms
that as the date of this Announcement, it has in issue and admitted
to trading on the main market of the London Stock Exchange
69,264,223 ordinary shares of 46 7/8 pence each. The International
Securities Identification Number (ISIN) of the AGA Shares is
GB00B2QMX606.
16. Overseas shareholders
The distribution of this Announcement to, and the availability
of the Acquisition to, persons 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.
AGA Shareholders who are in any doubt regarding such matters should
consult an appropriate independent professional adviser in the
relevant jurisdiction without delay.
Further details in relation to overseas AGA Shareholders will be
contained in the Scheme Document.
17. Documents on website
A copy of this Announcement and the following documents will, by
no later than noon on 16 July 2015, be published on AGA's website
at www.agarangemaster.com/investor-relations (under the "Market
Announcements" section) and Middleby's website at www.middleby.com
(under the "Investor Relations" section):
(a) a copy of this Announcement;
(b) the Confidentiality Agreement;
(c) the Irrevocable Undertakings;
(d) the Letters of Intent;
(e) the Memorandum of Understanding; and
(f) the Pensions Framework Agreement and the following agreed
form documents entered into pursuant to the Pensions Framework
Agreement:
(i) the Unconditional Pensions Guarantee; and
(ii) the Conditional Pensions Guarantee.
Neither the contents of the websites or any other websites
accessible from hyperlinks on such websites are incorporated into,
or form any part of, this Announcement.
Enquiries
Bidco and Middleby:
Timothy Fitzgerald Tel: +1 847 429 7756
Darcy Bretz
Morgan Stanley:
(Financial Adviser to Bidco and Middleby)
Colm Donlon Tel: +44 (0)20 7425 8000
Daniel Blank
Michael Bird
AGA:
William McGrath Tel: +44 (0)1926 455 731
Shaun Smith
Rothschild:
(Financial Adviser to AGA)
Stuart Vincent Tel: +44 (0)20 7280 5000
Alistair Allen
Numis:
(Financial Adviser and Broker to AGA)
Chris Wilkinson Tel: +44 (0)20 7260 1000
Andrew Holloway
Brunswick Group:
(Communications Adviser to AGA)
Simon Sporborg Tel: +44 (0)20 7404 5959
Nina Coad
Important disclaimers (including in relation to securities law
restrictions)
This Announcement is for information purposes only and is not
intended to and does not constitute or form part of any offer to
sell or subscribe for or any invitation to purchase or subscribe
for any securities or the solicitation of any vote or approval in
any jurisdiction pursuant to the Acquisition or otherwise. The
Acquisition will be made solely pursuant to the terms of the Scheme
Document (or, if applicable, the Offer Document), which will
contain the full terms and conditions of the Acquisition, including
details of how to vote in respect of the Acquisition. Any decision
in respect of, or other response to, the Acquisition should be made
only on the basis of the information contained in the Scheme
Document (or, if applicable, the Offer Document). This Announcement
does not constitute a prospectus or prospectus equivalent
document.
The release, publication or distribution of this Announcement in
jurisdictions other than the United Kingdom may be restricted by
law and therefore any persons who are subject to the laws of any
jurisdiction other than the United Kingdom should inform themselves
about, and observe any applicable requirements. In particular, the
ability of persons who are not resident in the United Kingdom to
vote their AGA Shares in respect of the Scheme at the Court
Meeting, or to execute and deliver Forms of Proxy appointing
another to vote at the Court Meeting on their behalf, may be
affected by the laws of the relevant jurisdictions in which they
are located. This Announcement has been prepared for the purpose of
complying with English law and the Takeover Code and the
information disclosed may not be the same as that which would have
been disclosed if this Announcement had been prepared in accordance
with the laws of jurisdictions outside the United Kingdom.
No person has been authorised to make any representations on
behalf of AGA, Bidco or Middleby (or any of their respective
Affiliates) concerning the Scheme or the Acquisition which are
inconsistent with the statements contained herein, and any such
representations, if made, may not be relied upon as having been so
authorised.
Copies of this Announcement and any formal documentation
relating to the Acquisition are not being, and must not be,
directly or indirectly, mailed or otherwise forwarded, distributed
or sent in or into or from any Restricted Jurisdiction and persons
receiving such documents (including custodians, nominees and
trustees) must not mail or otherwise forward, distribute or send
them in or into or from any Restricted Jurisdiction.
Any failure to comply with the applicable restrictions may
constitute a violation of the securities laws of any such
jurisdiction and, to the fullest extent permitted by applicable
law, AGA, Bidco and Middleby (and their respective Affiliates)
disclaim any responsibility or liability for the violation of such
restrictions by any person.
No person should construe the contents of this Announcement as
legal, financial or tax advice and any interested person should
consult its own advisers in connection with such matters.
Notice to US investors
The Acquisition relates to the shares of an English company that
is not registered under the Exchange Act and is being made by means
of a scheme of arrangement provided for under English company law.
A transaction effected by means of a scheme of arrangement is not
subject to the tender offer rules or the proxy solicitation rules
under the Exchange Act. Accordingly, the Acquisition is subject to
the disclosure requirements and practices applicable in the United
Kingdom to schemes of arrangement which differ from the disclosure
requirements in the United States tender offer and proxy
solicitation rules under the Exchange Act. Financial information
included (or incorporated by reference) in this Announcement and
the Scheme Document in relation to AGA has been or will have been
prepared in accordance with accounting standards applicable in the
United Kingdom that may not be comparable to financial information
of US companies or companies whose financial statements are
prepared in accordance with generally accepted accounting
principles in the United States. It may be difficult for US holders
of AGA Shares to enforce their rights and any claim arising out of
US federal laws, since AGA and certain Middleby's Affiliates are
located in a non-US jurisdiction and some or all of their officers
and directors may be resident in a non-US jurisdiction. US holders
of AGA Shares may not be able to sue a non-US company or its
officers or directors in a non-US court for violations of the US
securities laws. Further, it may be difficult to compel a non-US
company and its affiliates to subject themselves to a US court's
judgement. If Bidco exercises its right to implement the
Acquisition by way of a Takeover Offer, such offer will be made in
compliance with applicable US laws and regulations.
Bidco and Middleby Financial adviser
Morgan Stanley & Co. International plc, which is authorised
by the Prudential Regulation Authority and regulated by the
Financial Conduct Authority and the Prudential Regulation Authority
in the United Kingdom, is acting as financial adviser to Bidco and
Middleby and no-one else in connection with the Acquisition. In
connection with such matters, Morgan Stanley, its affiliates and
their respective directors, officers, employees and agents will not
regard any other person as their client, nor will they be
responsible to any other person for providing the protections
afforded to their clients or for providing advice in relation to
the Acquisition, the contents of this Announcement or any other
matter referred to herein.
AGA Financial advisers
Rothschild, which is authorised by the Prudential Regulation
Authority and regulated by the Financial Conduct Authority and the
Prudential Regulation Authority in the United Kingdom, is acting
exclusively for AGA and for no one else in connection with the
subject matter of this Announcement and will not be responsible to
anyone other than AGA for providing the protections afforded to its
clients or for providing advice in connection with the subject
matter of this Announcement.
Numis, which is authorised and regulated by the Financial
Conduct Authority in the United Kingdom, is acting exclusively for
AGA and for no one else in connection with the subject matter of
this Announcement and will not be responsible to anyone other than
AGA for providing the protections afforded to its clients or for
providing advice in connection with the subject matter of this
Announcement.
Forward Looking Statements
This Announcement contains certain forward-looking statements
with respect to the financial condition, results of operations and
business of AGA and certain plans and objectives of Bidco and
Middleby (and their respective Affiliates) with respect thereto.
These forward-looking statements can be identified by the fact that
they do not relate only to historical or current facts.
Forward-looking statements often use words such as 'anticipate',
'target', 'expect', 'estimate', 'intend', 'plan', 'goal',
'believe', 'hope', 'aims', 'continue', 'will', 'may', 'should',
'would', 'could' or other words of similar meaning. These
statements are based on assumptions and assessments made by AGA
and/or Bidco and/or Middleby (and/or their respective Affiliates)
in light of their experience and their perception of historical
trends, current conditions, future developments and other factors
they believe appropriate. By their nature, forward-looking
statements involve risk and uncertainty because they relate to
events and depend on circumstances that will occur in the future.
The factors described in the context of such forward-looking
statements in this Announcement could cause actual results and
developments to differ materially from those expressed in or
implied by such forward-looking statements. No assurance can be
given that such expectations will prove to have been correct and
persons reading this Announcement are therefore cautioned not to
place undue reliance on these forward-looking statements which
speak only as at the date of this Announcement. None of AGA, Bidco
or Middleby (nor any of their respective Affiliates) assumes any
obligation to update or correct the information contained in this
Announcement (whether as a result of new information, future events
or otherwise), except as required by applicable law.
There are several factors which could cause actual results to
differ materially from those expressed or implied in
forward-looking statements. Among such factors are changes in the
global, political, economic, business, competitive, market and
regulatory forces, future exchange and interest rates, changes in
tax rates and future business combinations or disposals.
None of AGA, Bidco or Middleby (nor any of their respective
Affiliates, members, directors, officers, employees, advisers or
persons acting on their behalf) provides any representation,
assurance or guarantee that the occurrence of the events expressed
or implied in any forward looking statements in this Announcement
will actually occur.
No profit forecasts or estimates
No statement in this Announcement is intended as a profit
forecast or estimate for any period and no statement in this
Announcement should be interpreted to mean that earnings or
earnings per ordinary share for AGA for the current or future
financial years would necessarily match or exceed the historical
published earnings or earnings per ordinary share for AGA.
Disclosure requirements of the Takeover Code
Under Rule 8.3(a) of the Code, any person who is interested in 1
per cent or more of any class of relevant securities of an offeree
company or of any securities exchange offeror (being any offeror
other than an offeror in respect of which it has been announced
that its offer is, or is likely to be, solely in cash) must make an
Opening Position Disclosure following the commencement of the offer
period and, if later, following the announcement in which any
securities exchange offeror is first identified. An Opening
Position Disclosure must contain details of the person's interests
and short positions in, and rights to subscribe for, any relevant
securities of each of (i) the offeree company and (ii) any
securities exchange offeror(s). An Opening Position Disclosure by a
person to whom Rule 8.3(a) applies must be made by no later than
3.30 pm (London time) on the 10th business day following the
commencement of the offer period and, if appropriate, by no later
than 3.30 pm (London time) on the 10th business day following the
announcement in which any securities exchange offeror is first
identified. Relevant persons who deal in the relevant securities of
the offeree company or of a securities exchange offeror prior to
the deadline for making an Opening Position Disclosure must instead
make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes,
interested in 1 per cent or more of any class of relevant
securities of the offeree company or of any securities exchange
offeror must make a Dealing Disclosure if the person deals in any
relevant securities of the offeree company or of any securities
exchange offeror. A Dealing Disclosure must contain details of the
dealing concerned and of the person's interests and short positions
in, and rights to subscribe for, any relevant securities of each of
(i) the offeree company and (ii) any securities exchange offeror,
save to the extent that these details have previously been
disclosed under Rule 8. A Dealing Disclosure by a person to whom
Rule 8.3(b) applies must be made by no later than 3.30 pm (London
time) on the business day following the date of the relevant
dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of an offeree company or a
securities exchange offeror, they will be deemed to be a single
person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree
company and by any offeror and Dealing Disclosures must also be
made by the offeree company, by any offeror and by any persons
acting in concert with any of them (see Rules 8.1, 8.2 and
8.4).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Takeover Panel's website at www.thetakeoverpanel.org.uk,
including details of the number of relevant securities in issue,
when the offer period commenced and when any offeror was first
identified. You should contact the Panel's Market Surveillance Unit
on +44 (0)20 7638 0129 if you are in any doubt as to whether you
are required to make an Opening Position Disclosure or a Dealing
Disclosure.
Publication on Website
In accordance with Rule 26.1 of the Takeover Code, a copy of
this Announcement will be made available (subject to certain
restrictions relating to persons resident in Restricted
Jurisdictions), free of charge, at
www.agarangemaster.com/investor-relations (under the "Market
Announcements" section) and www.middleby.com (under the "Investor
Relations" section) by no later than 12 noon (London time) on 16
July 2015.
Neither the content of the website nor the content of any other
website accessible from hyperlinks on the website is incorporated
into, or forms part of, this Announcement.
You may request a hard copy of this Announcement (and any
information incorporated into it by reference to another source) by
contacting the Company Secretary of AGA during business hours on
Tel: +44 (0)1926 455751 or by submitting a request in writing to
the Company Secretary of AGA at Juno Drive, Leamington Spa,
Warwickshire CV31 3RG. Your attention is drawn to the fact that a
hard copy of this Announcement will not be sent to you unless so
requested. You may also request that all future documents,
announcements and information to be sent to you in relation to the
Acquisition should be in hard copy form.
Electronic communications
Please be aware that addresses, electronic addresses and certain
information provided by AGA Shareholders, persons with information
rights and other relevant persons for the receipt of communications
from AGA may be provided to Bidco during the offer period if
requested under Section 4 of Appendix 4 to the Takeover Code.
APPENDIX I
Part A: Conditions
The Acquisition will be subject to the following conditions:
1. The Scheme will be conditional upon the following having
occurred prior to the Long Stop Date, or such later date as AGA and
Bidco may, with the consent of the Takeover Panel, agree and (if
required) the Court may allow:
(a) the Scheme becoming unconditional and becoming Effective by
no later than the Long Stop Date, or such later date (if any) as
Bidco and AGA may, with the consent of the Panel, agree and, if
required, the Court may allow;
(b) the approval of the Scheme by a majority in number of the
Scheme Shareholders entitled to vote and present and voting, either
in person or by proxy, at the Court Meeting (or at any adjournment,
postponement or reconvention of such meeting) to be held on or
before the 22nd day after the expected date of the Court Meeting to
be set out in the Scheme Document in due course (or such later date
as may be agreed between Bidco and AGA and the Court may allow) and
the votes cast at such meeting in favour of the Scheme representing
75 per cent or more of the total votes cast at such meeting;
(c) all resolutions necessary to approve and implement the
Scheme, as set out in the notice of the General Meeting in the
Scheme Document, being duly passed by the requisite majority at the
General Meeting (or at any adjournment, postponement or
reconvention of that meeting) to be held on or before the 22nd day
after the expected date of the Court Meeting to be set out in the
Scheme Document in due course (or such later date as may be agreed
between Bidco and AGA and the Court may allow) and not subsequently
being revoked;
(d) the sanction of the Scheme (without modification or, if
agreed by Bidco and AGA, with modification) by the Court; and
(e) office copies of the Scheme Court Order being delivered to Companies House.
2. In addition, Bidco and AGA have agreed that the Acquisition
will also be conditional upon the following Conditions, and,
accordingly, the necessary actions to make the Scheme Effective,
including the delivery of office copies of the Scheme Court Order
to Companies House, will not be taken unless such Conditions (as
amended if appropriate) have been satisfied (and continue to be
satisfied pending the commencement of the Court Hearing) or waived
prior to the Scheme being sanctioned by the Court:
Confirmation of absence of adverse circumstances
(a) except as Publicly Announced or fairly disclosed in
Disclosed Information, there being no provision of any agreement,
arrangement, licence, permit or other instrument to which any
member of the Wider AGA Group is a party or by or to which any such
member or any of its assets is or may be bound, entitled or
subject, which in each case as a consequence of the Acquisition of
any shares or other securities in AGA or because of a change in the
control or management of AGA, would or might reasonably be expected
to result in (to an extent or in a manner which is material and
adverse in the context of the Acquisition or would have a material
and adverse effect on the Wider AGA Group as a whole):
(i) any such agreement, arrangement, licence, permit or
instrument or the rights, liabilities, obligations or interests or
business of any member of the Wider AGA Group thereunder, or
interests or business of any such member in or with any other
person, firm, company or body (or any arrangements to which any
such member is a party relating to any such interests or business),
being or becoming capable of being terminated, modified, amended,
relinquished or adversely affected or any obligation or liability
arising or any action being taken or arising thereunder;
(ii) the rights, liabilities, obligations or interests of any
member of the Wider AGA Group under any such agreement,
arrangement, licence, permit or instrument or the interests or
business of any such member in or with, any person, firm, company
or body (or any arrangement or arrangements relating to any such
interests or business) being terminated, adversely modified or
adversely affected or any onerous obligation or liability arising
or any adverse action being taken thereunder;
(iii) any asset, or interest in such asset, of any member of the
Wider AGA Group being or falling to be disposed of or charged or
ceasing to be available to any member of the Wider AGA Group or any
right arising under which any such asset or interest could be
required to be disposed of or charged or cease to be available to
any member of the Wider AGA Group;
(iv) the creation or enforcement of any mortgage, charge or
other security interest over the whole or any part of the business,
property, assets or interest of any member of the Wider AGA Group
or any such mortgage, charge or other security (whenever created,
arising or having arisen) becoming enforceable or being capable of
being enforced;
(v) the value of any member of the Wider AGA Group or its
financial or trading position or prospects being prejudiced or
adversely affected;
(vi) any member of the Wider AGA Group ceasing to be able to
carry on business under any name which it at present uses;
(vii) the creation or acceleration of any liability (actual or
contingent) by any member of the Wider AGA Group, other than trade
creditors or other liabilities incurred in the ordinary course of
business;
(viii) any liability of any member of the Wider AGA Group to
make any severance, termination, bonus or other payment to any of
its directors or other officers;
(ix) any requirement on any member of the Wider AGA Group to
acquire, subscribe, pay up or repay any shares or other securities;
or
(x) any monies borrowed by or any other indebtedness (actual or
contingent) of, or any grant available to any member of the Wider
AGA 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 such member of the Wider AGA
Group to borrow monies or incur any indebtedness becoming or being
withdrawn or inhibited or being capable of becoming or being
withdrawn or inhibited,
and no event having occurred which, under any provision of any
agreement, arrangement, licence, permit or other instrument to
which any member of the Wider AGA Group is a party or by or to
which any such member or any of its assets may be bound, entitled
or subject, could reasonably be expected to result in any of the
events or circumstances as are referred to in sub-paragraphs (i) to
(x) of this Condition;
Other third party clearances
(b) no government or governmental, quasi-governmental,
supranational, statutory, regulatory, professional, environmental
or investigative body, works council or employee representative
body, antitrust regulator, central bank, court, trade agency,
professional association, institution or any other similar body or
person whatsoever in any jurisdiction (each a "Third Party") having
decided to take, institute, implement, threaten or withdraw any
action, proceeding, suit, investigation, enquiry or reference, or
enacted, made or proposed any statute, regulation, decision or
order, or having taken any other steps, and there not continuing to
be outstanding any statute, regulation or order of any Third Party,
in each case which would or might reasonably be expected to (to an
extent or in a manner which is material and adverse in the context
of the Acquisition):
(i) require, prevent or delay the divestiture, or materially
alter the terms of any proposed divestiture by any member of the
Wider Bidco Group or by AGA or any other member of the Wider AGA
Group of all or any portion of their respective businesses, assets
or properties or impose any limitation on the ability of any of
them to conduct their respective businesses (or any of them) or to
own, control or manage any of their respective assets or properties
or any part thereof;
(ii) require, prevent or delay the divestiture by any member of
the Wider Bidco Group of any shares or other securities in AGA or
the Wider AGA Group;
(iii) impose any limitation on, or result in a delay in, the
ability of any member of the Wider Bidco Group directly or
indirectly to acquire or to hold or to exercise effectively any
rights of ownership in respect of shares or loans or securities
convertible into shares or any other securities (or the equivalent)
in any member of the Wider AGA Group or the Wider Bidco Group or to
exercise voting or management control over any such member;
(iv) otherwise materially adversely affect any or all of the
business, assets, liabilities, financial or trading position,
profits, operational performance or prospects of any member of the
Wider Bidco Group or of any member of the Wider AGA Group;
(v) make the Acquisition or its implementation by Bidco or any
member of the Wider Bidco Group of any shares or other securities
in, or control or management of, AGA void, illegal, and/or
unenforceable under the laws of any jurisdiction, or otherwise,
directly or indirectly, restrain, restrict, prohibit, prevent,
delay, impede or otherwise interfere with the implementation
thereof, or require amendment or impose additional conditions or
obligations with respect thereto, or otherwise challenge, or
interfere with the Acquisition or its implementation by Bidco or
any member of the Wider Bidco Group of any shares or other
securities in, or control or management of, AGA;
(vi) require any member of the Wider Bidco Group or the Wider
AGA Group to acquire, or to offer to acquire, any shares or other
securities (or the equivalent) or interest in any member of the
Wider AGA Group or the Wider Bidco Group owned by any third party
(other than in the implementation of the Acquisition);
(vii) impose any limitation on the ability of any member of the
Wider Bidco Group or the Wider AGA Group to conduct its business or
integrate or co-ordinate its business, or any part of it, with the
businesses or any part of the businesses of any other member of the
Wider Bidco Group or the Wider AGA Group;
(viii) require any member of the Wider AGA Group to relinquish,
terminate or amend in any way any contract to which any member of
the Wider AGA Group is a party; or
(ix) result in any member of the Wider Bidco Group or the Wider
AGA Group ceasing to be able to carry on business under any name
under which it presently does so;
(c) all material notifications, notices, filings or applications
in connection with the Acquisition or any aspect of the Acquisition
or its financing that are necessary having been made and all
authorisations, orders, grants, consents, clearances, licences,
confirmations, permissions and approvals which are necessary
("Authorisations"), in any jurisdiction, for and in respect of the
Acquisition or any aspect of the Acquisition or its financing
having been obtained in terms and in a form reasonably satisfactory
to Bidco (acting reasonably) from all appropriate Third Parties and
persons or bodies with whom any member of the Wider AGA Group has
entered into contractual arrangements, and all such Authorisations
together with all material authorisations, orders, grants,
consents, clearances, licences, confirmations, permissions and
approvals necessary for any member of the Wider Bidco Group to
carry on its business (the "Business Authorisations") remaining in
full force and effect (where the absence of such Authorisations or
Business Authorisations would be material and adverse in the
context of the Acquisition) and all filings necessary for such
purpose have been made and there being no notice or intimation of
any intention to revoke, suspend, restrict, modify or not to renew
any of the same at the time at which the Acquisition becomes
otherwise unconditional and all necessary material statutory or
regulatory obligations in any jurisdiction having been complied
with;
No material transactions, claims or changes in the conduct of
the AGA Group
(d) since 31 December 2014 and except as Publicly Announced or
fairly disclosed in Disclosed Information, no member of the Wider
AGA Group having:
(i) save as between AGA and wholly-owned subsidiaries of AGA or
for AGA Shares required to be issued or transferred out of treasury
pursuant to the award of AGA Shares in the ordinary course under
the AGA Share Plan, issued, agreed to issue, authorised or proposed
the issue of additional shares of any class, or of securities
convertible into or exchangeable for, or rights, warrants or
options to subscribe for or acquire, any such shares or convertible
securities or redeemed, purchased or repaid any of its own shares
or other securities or reduced or made any other change to any part
of its share capital;
(ii) other than to another member of the AGA Group, recommended,
declared, paid or made or proposed to recommend, declare, pay or
make any bonus, dividend or other distribution whether payable in
cash or otherwise;
(iii) save for transactions between members of the AGA Group or
pursuant to the Acquisition, merged or demerged with any body
corporate or acquired or disposed of or transferred, mortgaged,
charged or created any security interest over any assets or any
right, title or interest in any asset (including shares or loan
capital (or the equivalent thereof) in any undertaking or
undertakings and further including trade investments) or authorised
or proposed or announced any intention to propose any merger,
demerger, acquisition, disposal, transfer, mortgage, charge or
security interest (which, in the case of any transfer, mortgage,
charge or security interest, is other than in the ordinary course
of business);
(iv) save for transactions between members of the AGA Group,
made or authorised or proposed or announced an intention to propose
any change in its loan capital;
(v) issued, authorised, proposed the issue of or made any change
in or to the terms of any debentures or (save for trade credit
incurred in the ordinary course of business or for transactions
between members of the AGA Group) incurred or increased any
indebtedness or become or agreed to become subject to any liability
(actual or contingent) other than in the ordinary course of
business;
(vi) implemented, or authorised, proposed or announced its
intention to implement, any reconstruction, amalgamation, scheme,
commitment or other transaction or arrangement otherwise than in
respect of the Acquisition;
(vii) entered into or varied or authorised, proposed or
announced its intention to enter into or vary any contract,
transaction, arrangement or commitment (whether in respect of
capital expenditure or otherwise) which is of a long term, onerous
or unusual nature or magnitude or which is or could be materially
restrictive on the businesses of any member of the Wider AGA Group
or the Wider Bidco Group or which involves or could involve an
obligation of such a nature or magnitude or which is other than in
the ordinary course of business;
(viii) other than in respect of a member which is dormant and
was solvent at the relevant time, taken any corporate action or had
any legal proceedings instituted or threatened against it or
petition presented or order made for its winding-up (voluntary or
otherwise), dissolution or reorganisation or for the appointment of
a receiver, administrative receiver, administrator, trustee or
similar officer of all or any of its assets or revenues or any
analogous proceedings in any jurisdiction or had any such person
appointed;
(ix) been unable or admitted in writing that it is unable to pay
its debts as they fall due 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 commenced negotiations with one or more of its
creditors with a view to rescheduling or restructuring any of its
indebtedness;
(x) waived or compromised any material claim otherwise than in
the ordinary course of business;
(xi) in respect of the AGA Group, made any alteration to its
memorandum or articles of association or other incorporation
documents (in each case, other than an alteration in connection
with the Scheme);
(xii) proposed, agreed to provide or modified the terms of any
employee share scheme, incentive scheme or other benefit relating
to the employment or termination of employment of any person
employed by the Wider AGA Group or entered into or changed the
terms of any contract with any director or senior executive;
(xiii) made or agreed or consented to any change in any material respect to:
(a) the terms of the trust deeds constituting the pension
scheme(s) established by any member of the Wider AGA Group for its
directors, employees or their dependents;
(b) the contributions payable to any such scheme(s) or to the
benefits which accrue or to the pensions which are payable
thereunder;
(c) the basis on which qualification for, or accrual or
entitlement to, such benefits or pensions are calculated or
determined; or
(d) the basis upon which the liabilities (including pensions) of
such pension schemes are funded, valued or made;
(xiv) entered into, implemented or authorised the entry into,
any joint venture, asset or profit sharing arrangement, partnership
or merger of business or corporate entities;
(xv) taken (or agreed or proposed to take) any action which
requires, or would require, the approval of AGA Shareholders in
general meeting in accordance with, or as contemplated by, Rule
21.1 of the Takeover Code; or
(xvi) entered into any contract, commitment, arrangement or
agreement otherwise than in the ordinary course of business or
passed any resolution or made any offer (which remains open for
acceptance) with respect to or announced any intention to, or to
propose to, effect any of the transactions, matters or events
referred to in this Condition,
and, for the purposes of this Condition, the term AGA Group
shall mean AGA and its wholly-owned subsidiaries;
No material adverse change
(e) since 31 December 2014 and save as Publicly Announced or
fairly disclosed in Disclosed Information:
(i) no material adverse change or deterioration having occurred
(or circumstances having arisen which would or might reasonably be
expected to result in any adverse change or deterioration) in the
business, assets, liabilities, financial or trading position or
profits, operational performance or prospects of any member of the
AGA Group;
(ii) no agreement or arrangement between any member of the AGA
Group and any other person has been terminated or varied in a
manner which would or might reasonably be expected to have a
material adverse effect on the financial position of the AGA Group
taken as a whole;
(iii) no litigation, arbitration proceedings, prosecution or
other legal proceedings to which any member of the Wider AGA Group
is or may become a party (whether as a plaintiff, defendant or
otherwise) and no investigation by any Third Party against or in
respect of any member of the Wider AGA Group having been
instituted, announced, implemented or threatened by or against or
remaining outstanding in respect of any member of the Wider AGA
Group;
(iv) no enquiry or investigation by, or complaint or reference
to, any Third Party having been threatened in writing, announced,
implemented or instituted by or against or remaining outstanding
against or in respect of any member of the Wider AGA Group;
(v) no contingent or other material liability in respect of any
member of the Wider AGA Group having arisen or become apparent or
increased that might reasonably be likely to adversely affect any
member of the Wider AGA Group that is material in the context of
the Wider AGA Group taken as a whole;
(vi) no amendment or termination of any joint venture or
partnership to which any member of the Wider AGA Group is a party
having been agreed or permitted; and
(vii) no steps having been taken which are likely to result in
the withdrawal, cancellation, termination or modification of any
licence held by any member of the Wider AGA Group which is
necessary for the proper carrying on of its business,
in each case, to an extent or in a manner which is material in
the context of the Acquisition and has had, or would reasonably be
expected to have, a material and adverse effect on the Wider AGA
Group, taken as a whole;
(f) except as Publicly Announced or fairly disclosed in
Disclosed Information, Bidco not having discovered:
(i) that any financial, business or other information concerning
the Wider AGA Group as contained in the information publicly
disclosed at any time by or on behalf of any member of the Wider
AGA Group, is misleading or contains any misrepresentation of fact
or omits to state a fact necessary to make that information not
misleading;
(ii) that any member of the Wider AGA Group is subject to any
liability (actual or contingent); or
(iii) any information which adversely affects the import of any
information disclosed to Bidco or Middleby (or their respective
advisers) in the electronic data room established by AGA for the
purposes of the Acquisition on or before the date of this
Announcement,
in each case, to an extent or in a manner which is material in
the context of the Acquisition and material in the context of the
Wider AGA Group, taken as a whole; and
Environmental and other issues
(g) except as Publicly Announced or fairly disclosed in
Disclosed Information, Bidco not having discovered that:
(i) any past or present member of the Wider AGA Group has failed
to comply with any or all applicable legislation or regulation, of
any jurisdiction, with regard to the disposal, spillage, release,
discharge, leak or emission of any waste or hazardous substance or
any substance likely to impair the environment or harm human health
or animal health or otherwise relating to environmental matters, or
that there has otherwise been any such disposal, spillage, release,
discharge, leak or emission (whether or not the same constituted a
non-compliance by any person with any such legislation or
regulations, and wherever the same may have taken place) any of
which disposal, spillage, release, discharge, leak or emission
would reasonably be likely to give rise to any liability (actual or
contingent) on the part of any member of the Wider AGA Group which,
in each case, is material in the context of the Wider AGA Group,
taken as a whole;
(ii) there is, or is reasonably likely to be, for that or any
other reason whatsoever, any liability (actual or contingent) of
any past or present member of the Wider AGA Group to make good,
repair, reinstate or clean up any property or any controlled waters
now or previously owned, occupied, operated or made use of or
controlled by any such past or present member of the Wider AGA
Group, under any environmental legislation, regulation, notice,
circular or order of any Third Party in any jurisdiction or to
contribute to the cost thereof or associated therewith or indemnify
any person in relation thereto which, in each case, is material in
the context of the Wider AGA Group, taken as a whole;
(iii) any past or present member of the Wider AGA Group has not,
to the extent applicable to that member, complied with the OECD
Convention on Combating Bribery of Foreign Public Officials in
International Business Transactions and any laws implementing the
same, the UK Bribery Act 2010 and the U.S. Foreign Corrupt
Practices Act of 1977; or
(iv) any past or present member of the Wider AGA Group has
engaged in any business with or made any investments in, or made
any payments to, (a) any government, entity or individual with
which US or European Union persons are prohibited from engaging in
activities or doing business by US or European Union laws or
regulations, including the economic sanctions administered by the
United States Office of Foreign Assets Control or (b) any
government, entity or individual targeted by any of the economic
sanctions of the United Nations or the European Union or any of
their respective member states, in each case in contravention of
those laws, regulations or sanctions.
3. For the purposes of these Conditions:
(a) a Third Party shall be regarded as having "intervened" if it
has decided or threatened in writing, to take, institute, or
implement any action, proceeding, suit, investigation, enquiry or
reference or made, proposed or enacted any statute, regulation,
decision or order or taken any measures or other similar steps or
required any action to be taken and "intervene" shall be construed
accordingly;
(b) "Publicly Announced" means disclosed in (i) AGA's 2014
Annual Report, or (ii) publicly announced (by delivery of an
announcement to a Regulatory Information Service) by AGA on or
before the date of this Announcement;
(c) "substantial interest" means a direct or indirect interest
in 20 per cent or more of the voting or equity capital or the
equivalent of an undertaking;
(d) "Disclosed Information" means (i) this Announcement; (ii)
information which is Publicly Announced; (iii) any matters fairly
disclosed in the information made available to Bidco or Middleby
(or their respective advisers) in the electronic data room
established by AGA for the purposes of the Acquisition on or before
the date of this Announcement, (iv) any other information that is
fairly disclosed to Bidco or Middleby, their respective Affiliates
or advisers on or before the date of this Announcement;
(e) "Wider AGA Group" means AGA and its subsidiary undertakings,
associated undertakings and any other undertakings in which AGA and
such undertakings (aggregating their interests) have a substantial
interest; and
(f) "Wider Bidco Group" means Middleby and its respective
subsidiary undertakings, associated undertakings and any other
undertakings in which Middleby and such undertakings (aggregating
their interests) have a substantial interest, excluding the AGA
Group.
4. The Conditions in paragraphs 2(a) to (g) (inclusive) must be
fulfilled, be determined by Bidco to be or remain satisfied or (if
capable of waiver) be waived prior to the commencement of the Court
Hearing, failing which the Acquisition will lapse. Bidco shall be
under no obligation to waive (if capable of waiver), to determine
to be or remain satisfied or treat as fulfilled any of the
Conditions in paragraphs 2(a) to (g) (inclusive) as of the Long
Stop Date, notwithstanding that the other Conditions may at an
earlier date have been waived or fulfilled and that there are, at
such earlier date, no circumstances indicating that any Condition
may not be capable of fulfilment.
PART B: Certain further terms of the Scheme
1. Each of the Conditions shall be regarded as a separate
Condition and shall not be limited by reference to any other
Condition.
2. Subject to the requirements of the Takeover Panel and the
Act, Bidco reserves the right in its sole discretion to waive in
whole or in part all or any of the Conditions, apart from the
Condition in paragraph 1 of Part A of this Appendix I, which cannot
be waived.
3. Bidco reserves the right to elect with the consent of the
Takeover Panel (where necessary) to implement the Acquisition by
way of a Takeover Offer. In such event, the Acquisition will be
implemented on substantially the same terms, subject to appropriate
amendments, as those which would apply to the Acquisition. The
acceptance condition would be set at 90 per cent of the shares to
which the Takeover Offer relates (or such lesser percentage (being
more than 50 per cent) as Bidco may decide with the consent of the
Panel). Further, if sufficient acceptances of the Takeover Offer
are received and/or sufficient AGA Shares are otherwise acquired,
it is the intention of Bidco to apply the provisions of the Act to
compulsorily acquire any outstanding AGA Shares to which such
Takeover Offer relates.
4. The Scheme will be governed by English law and will be
subject to the jurisdiction of the English courts, to the
Conditions and to the further terms set out in the Scheme Document.
The Acquisition will comply with the applicable rules and
regulations of the FCA, the London Stock Exchange and the Takeover
Code.
5. The availability of the Acquisition to persons not resident
in the United Kingdom may be affected by the laws of the relevant
jurisdictions. Persons who are not resident in the United Kingdom
should inform themselves about and observe any applicable
requirements.
6. Unless otherwise determined by Bidco or required by the
Takeover Code and permitted by applicable law and regulation, the
Acquisition is not being made, and will not be made, directly or
indirectly, in or into any Restricted Jurisdiction or by the use of
the mails of, or by any other means or instrumentality (including,
without limitation, electronic mail, fax transmission, telex,
telephone, internet or other forms of electronic communication) of
interstate or foreign commerce of, or any facility of a national
state or other securities exchange of any other Restricted
Jurisdiction and will not be capable of acceptance by any such use,
means, instrumentality or facility or from any Restricted
Jurisdiction.
7. The AGA Shares which will be acquired pursuant to the
Acquisition will be acquired fully paid and free from all liens,
equities, charges, encumbrances, options, rights of pre-emption and
any other third party rights and interests of any nature and
together will all rights now or hereafter attaching or accruing to
them, including voting rights and the right to receive and retain
in full all dividends and other distributions (if any) declared,
made or paid on or after the date of this Announcement.
8. The Acquisition shall lapse (unless otherwise agreed with the Takeover Panel) if:
(a) in so far as the Acquisition or any matter arising from the
Scheme or Acquisition constitutes a concentration with a Community
dimension within the scope of the Regulation, 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(1) of the Regulation and there is
then a CMA Phase 2 Reference; or
(b) in so far as the Acquisition or any matter arising from the
Scheme or Acquisition does not constitute a concentration with a
Community dimension within the scope of the Regulation, the Scheme
or Acquisition or any matter arising from or relating to the
Acquisition becomes subject to a CMA Phase 2 Reference,
in each case, before the date of the Court Meeting.
APPENDIX II: DETAILS OF IRREVOCABLE UNDERTAKINGS AND LETTERS OF
INTENT
Irrevocable undertakings to vote in favour of the resolutions
relating to the Acquisition at the Court Meeting and the General
Meeting, or letters of intent to vote in favour of the Scheme (or
in the event that the Acquisition is implemented by way of a
Takeover Offer, to accept the Takeover Offer), in respect of their
own beneficial holdings (or those AGA Shares over which they have
control) of AGA Shares:
1. Irrevocable undertakings from AGA Directors
Name Total Number of AGA Percentage of existing
Shares issued share capital
of AGA
-------------------------- -------------------- -----------------------
William Brendan McGrath 247,696 0.4%
Shaun Michael Smith 171,843 0.2%
John Coleman 16,510 0.0%
Jonathan Douglas Carling 5,000 0.0%
Total 441,049 0.6%
-------------------------- -------------------- -----------------------
Bidco has received irrevocable undertakings to vote in favour of
the Scheme at the Court Meeting and the Resolutions to be proposed
at the General Meeting (or in the event that the Acquisition is
implemented by way of a Takeover Offer, to accept the Takeover
Offer) from the AGA Directors in respect of their own beneficial
holdings of AGA Shares amounting, in aggregate, to 441,049 AGA
Shares, representing approximately 0.6 per cent of the issued
ordinary share capital of AGA.
The irrevocable undertakings given by William Brendan McGrath
and Shaun Michael Smith also extend to any AGA Shares acquired by
them by virtue of the exercise of options under the AGA Share
Plan.
2. Letters of Intent from AGA Shareholders
Name Total Number of AGA Percentage of existing
Shares issued share capital
of AGA
------------------------- -------------------- -----------------------
J O Hambro Capital
Management Ltd 8,100,000 11.7%
River and Mercantile
Asset Management LLP
(as investment manager
for certain clients) 4,694,094 6.8%
Total 12,794,094 18.5%
------------------------- -------------------- -----------------------
Bidco has received non-binding letters of intent from AGA
Shareholders to vote (or procure the vote) in favour of the Scheme
(or in the event that the Acquisition is implemented by way of a
Takeover Offer, to accept, or procure the acceptance of, the
Takeover Offer) in respect of, in aggregate, 12,794,094 AGA Shares,
representing approximately 18.5 per cent of the issued ordinary
share capital of AGA.
APPENDIX III: SOURCES AND BASES OF INFORMATION
In this Announcement:
(a) the value placed by the terms of the Acquisition on the
entire issued and to be issued share capital of AGA at
approximately GBP129 million, and other statements made by
reference to the issued ordinary share capital of AGA, assumes:
(i) there are 69,264,223 AGA Shares in issue as at 14 July 2015
(being the last practicable day as publicly announced by AGA);
and
(ii) that the fully diluted share capital of AGA is 69,824,095
ordinary shares (which has been calculated as the aggregate of the
69,264,223 AGA Shares in issue and the total number of share
options outstanding under the schemes as at the date of this
Announcement (being 559,872));
(b) the market capitalisation of Middleby has been made by
reference to the issued common stock of Middleby as at 13 July 2015
(being 57,327,032) and the closing share price of Middleby on 13
July 2015 (being US$119);
(c) unless otherwise stated, the financial information on
Middleby included in this Announcement has been extracted or
derived, without material adjustment, from Middleby's 2014 Annual
Report;
(d) unless otherwise stated, the financial information on AGA
included in this Announcement has been extracted or derived,
without material adjustment, from AGA's 2014 Annual Report;
(e) unless otherwise stated, all historic share prices quoted
for AGA Shares have been sourced from the Daily Official List and
represent the Closing Price for AGA Shares on the relevant dates;
and
(c) certain figures included in this Announcement have been
subjected to rounding adjustments. Accordingly, figures shown for
the same category presented in different tables may vary slightly
and figures shown as totals in certain tables may not be an
arithmetic aggregation of the figures that precede them.
APPENDIX IV: DEFINITIONS
In this Announcement, the following definitions apply unless the
context requires otherwise:
Acquisition the proposed acquisition by Bidco or its Affiliate
of the entire issued and to be issued share capital
of AGA to be implemented by means of the Scheme
or, if Bidco so elects and the Takeover Panel
consents, a Takeover Offer
Act the Companies Act 2006 (UK)
Affiliate in relation to a party, any person that directly
or indirectly, through one or more intermediaries,
controls, is controlled by, or is under common
control with, the party, and for these purposes
a party shall be deemed to control a person if
such party possesses, directly or indirectly,
the power to direct or cause the direction of
the management and policies of the person, whether
through the ownership of over 50 per cent of
the voting securities or the right to appoint
over 50 per cent of the relevant board of directors
by contract or otherwise
AGA AGA Rangemaster Group plc, a limited liability
company incorporated in England and that is listed
on the London Stock Exchange
AGA Directors (a) William Brendan McGrath - Chief Executive;
(b) Shaun Michael Smith - Finance Director;
(c) John Coleman - Chairman (Independent);
(d) Jonathan Douglas Carling - Non-Executive
Director (Independent);
(e) Rebecca Jane Worthington - Non-Executive
Director (Independent); and
(f) Robert Ivell - Senior Independent Director
AGA Group AGA, its subsidiaries and its subsidiary undertakings
AGA Pension the ARG Pension Scheme and all other pension
Schemes schemes sponsored by the AGA Group
AGA Share Plan the Company Share Option Plan as adopted on 7
May 2010
AGA Shareholders holders of AGA Shares
AGA Shares the issued ordinary shares of 46 7/8 pence each
in the capital of AGA
AGA's 2014 Annual AGA's 2014 annual report for the year ended 31
Report December 2014
Announcement this Announcement, including the summary and
its Appendices
ARG Pension has the meaning given to that term in paragraph
Scheme 10 of this Announcement
associated undertaking has the meaning given to it in paragraph 19 of
Schedule 6 to the Large and Medium-sized Companies
and Groups (Accounts and Reports) Regulations
2008 (SI 2008/410) (but for this purpose ignoring
paragraph 19(1)(b) of Schedule 6 to those regulations)
BAML Facility the fifth amended and restated credit agreement
Agreement dated as of 7 August 2012 between Middleby Marshall
Inc., The Middleby Corporation, various financial
institutions and Bank of America, N.A.
Bidco Middleby UK Residential Holding Ltd, a private
limited company incorporated in England and Wales
under company number 9679266
Business Day a day (other than Saturday, Sunday or a public
holiday), on which banks in the City of London
and New York are open for business generally
Closing Price the middle market price for an AGA Share at the
close of business on the day to which the price
relates, derived from the Daily Official List
for that day
CMA Phase 2 a reference pursuant to sections 22, 33, 45 or
Reference 62 of the Enterprise Act 2002 of the Acquisition
to the chair of the Competition and Markets Authority
for the constitution of a group under Schedule
4 to the Enterprise and Regulatory Reform Act
2013 (as amended)
Community European Community
Companies House the Registrar of Companies in England and Wales
Conditional has the meaning given to that term in paragraph
Pensions Guarantee 10 of this Announcement
Conditions the conditions to the Acquisition which are set
out in Appendix I
Confidentiality has the meaning given to that term in paragraph
Agreement 14 of this Announcement
Consideration the cash payment of 185 pence per Scheme Share
to be made pursuant to the Scheme to Scheme Shareholders
Court the High Court of Justice in England and Wales
Court Hearing the hearing by the Court to sanction the Scheme
Court Meeting the meeting or meetings of Scheme Shareholders
as may be convened pursuant to an order of the
Court under Part 26 of the Act, for the purposes
of considering and, if thought fit, approving
the Scheme (with or without amendment), including
any adjournment, postponement or reconvention
of any such meeting, notice of which is to be
contained in the Scheme Document
CREST the relevant system (as defined in the Uncertificated
Securities Regulations 2001 (SI 2001/3755)) in
respect of which Euroclear UK & Ireland Limited
is the Operator (as defined in those regulations)
Daily Official the daily official list of the London Stock Exchange
List
EBITDA earnings before interest, taxes, depreciation
and amortization
Effective the Scheme having become fully effective in accordance
with its terms, upon the delivery of the Scheme
Court Order to Companies House
Effective Date the date upon which:
(a) the Scheme becomes Effective; or
(b) if Bidco elects to implement the Acquisition
by way of a Takeover Offer, the Takeover Offer
becomes or is declared unconditional in all respects
Escrow Account has the meaning given to that term in paragraph
8 of this Announcement
Exchange Act the United States Securities Exchange Act of
1934, as amended, and the rules and regulations
promulgated thereunder
Excluded AGA any AGA Shares which are held, directly or indirectly,
Shares by Bidco or Middleby and their respective Affiliates
(if any)
Financial Conduct the Financial Conduct Authority of the UK in
Authority or its capacity as the competent authority for the
FCA purpose of Part VI of FSMA and in the exercise
of its functions in respect of admission to the
Official List otherwise than in accordance with
Part VI of FSMA
Forms of Proxy the forms of proxy in connection with each of
the Court Meeting and the General Meeting, which
shall accompany the Scheme Document
FSMA the Financial Services and Markets Act 2000 (as
amended)
General Meeting the general meeting (or any adjournment, postponement
or reconvention thereof) of AGA to be convened
in connection with the Scheme, notice of which
is to be contained in the Scheme Document
Irrevocable the irrevocable undertakings to vote (or procure
Undertakings votes) in favour of the Acquisition from certain
AGA Directors received by Bidco, details of which
are set out in Appendix II
Letters of Intent the non-binding letters of intent to vote (or
procure votes) in favour of the Acquisition from
certain AGA Shareholders received by Bidco, details
of which are set out in Appendix II
Listing Rules the listing rules and regulations made by the
FCA under Part VI of FSMA, and contained in the
UK Listing Authority's publication of the same
name (as amended from time to time)
London Stock London Stock Exchange plc
Exchange
Long Stop Date 15 January 2016, or such later date as Bidco
and AGA may agree and the Takeover Panel and
the Court (if required) may allow
Meetings the Court Meeting and the General Meeting
Memorandum of has the meaning given to that term in paragraph
Understanding 9 of this Announcement
Middleby's 2014 Middleby's 2014 annual report for the year ended
Annual Report 3 January 2015 filed on Form 10-K with the Securities
and Exchange Commission on 4 March 2015
MMI has the meaning given to that term in paragraph
10 of this Announcement
Morgan Stanley Morgan Stanley & Co. International plc
Numis Numis Securities Limited
Offer Document in the event Bidco elects to implement the Acquisition
by means of a Takeover Offer, the document containing
the Takeover Offer to be sent to AGA Shareholders
Offer Period the offer period (as defined by the Takeover
Code) related to AGA, which commenced on 17 June
2015
Official List the official list of the FCA
Opening Position has the meaning given to it in the Takeover Code
Disclosure
Outstanding any AGA Shares other than Excluded AGA Shares
AGA Shares
Pensions Agreement has the meaning given to that term in paragraph
10 of this Announcement
Pensions Framework has the meaning given to that term in paragraph
Agreement 10 of this Announcement
Regulation Council Regulation (EC) No 139/2004
Regulatory Information any information service authorised from time
Service to time by the Financial Conduct Authority for
the purposes of disseminating regulatory announcements
Relevant Date has the meaning given to that term in paragraph
15.2 of this Announcement
Resolutions the special resolutions to be proposed by AGA
at the General Meeting in connection with, amongst
other things, the approval of the Scheme, the
amendment of AGA's articles of association and
such other matters as may be necessary to implement
the Scheme and the delisting of the AGA shares
Restricted Jurisdictions any jurisdiction where local laws or regulations
may result in a significant risk of civil, regulatory
or criminal exposure if information concerning
the Acquisition is sent or made available to
AGA Shareholders (or other persons with information
rights) in that jurisdiction
Rothschild N M Rothschild & Sons Limited
Scheme the scheme of arrangement under Part 26 of the
Act proposed to be entered into between AGA and
the Scheme Shareholders to be described in the
Scheme Document, the principal terms of which
are set out in this Announcement and with or
subject to any modification, addition or condition
approved or imposed by the Court
Scheme Court the order of the Court sanctioning the Scheme
Order under section 899 of the Act
Scheme Document the circular to be issued by AGA to AGA Shareholders
containing, among other things, an explanatory
statement of the Scheme, the Scheme and notices
of the Court Meeting and the General Meeting
Scheme Record 6.00 p.m. (London time) on the day before the
Time Court Hearing
Scheme Shareholders holders of Scheme Shares
Scheme Shares the AGA Shares in issue on the date of the Scheme
Document together with any further AGA Shares
(if any):
(a) issued after the date of the Scheme Document
and prior to the Voting Record Time; and
(b) issued on or after the Voting Record Time
and prior to the Scheme Record Time either on
terms that the original or any subsequent holder
thereof shall be bound by the Scheme or in respect
of which the holder thereof shall have agreed
in writing to be bound by the Scheme,
other than the Excluded AGA Shares
subsidiary, shall have the meanings given to them by the
subsidiary undertaking, Act
and undertaking
Takeover Code the City Code on Takeovers and Mergers
or Code
Takeover Offer if Bidco elects to make the Acquisition by way
of a takeover offer (as that term is defined
in Chapter 3 of Part 28 of the Act), the offer
to be made by Bidco, or an Affiliate thereof,
to acquire the entire issued and to be issued
share capital of AGA other than the Excluded
AGA Shares including, where the context admits,
any subsequent revision, variation, extension
or renewal of such offer
Takeover Panel the Panel on Takeovers and Mergers
UK Listing Authority the FCA acting in its capacity as the competent
authority for listing under Part VI of FSMA
Unconditional has the meaning given to that term in paragraph
Pensions Guarantee 10 of this Announcement
United Kingdom the United Kingdom of Great Britain and Northern
or UK Ireland
United States the United States of America, its territories
or US and possessions, any state of the United States
of America, the District of Columbia and all
other areas subject to its jurisdiction
US Holders AGA Shareholders that are resident in the US
Voting Record 6.00 p.m. (London time) on the day which is two
Time days prior to the date of the Court Meeting or,
if the Court Meeting is adjourned, 6.00 p.m.
on the day which is two days prior to the day
of such adjourned meeting
GBP or pounds pounds sterling, the lawful currency of the United
sterling Kingdom
This information is provided by RNS
The company news service from the London Stock Exchange
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