CXG Carlisle Gp

RNS Number:1545Q
Carlisle Group Limited
14 March 2008

CARLISLE GROUP LIMITED MERGER WITH IMPELLAM GROUP PLC DIVIDEND OF SHARES IN
SHELLPROOF LIMITED AND ACQUISITION BY IMPELLAM GROUP PLC OF THE CORPORATE
SERVICES GROUP PLC



1.         INTRODUCTION



On 7 February 2008, it was announced that Carlisle was in discussions with
Corporate Services Group which could lead to a merger between Corporate Services
Group and Carlisle. Final agreement on the terms of the Merger has now been
reached. Both companies will be acquired by a newly incorporated holding
company, Impellam Group plc. Accordingly, the combination of Corporate Services
Group and Carlisle will be implemented in two stages. The acquisition of
Carlisle will be implemented pursuant to the terms of the Merger. The
acquisition of Corporate Services Group will be implemented by means of the
Scheme. Furthermore, it is intended that Impellam will, on completion of the
Merger and the Scheme, be admitted to trading on AIM.



Carlisle has also incorporated a subsidiary, Shellproof, which it has
capitalised at a value of �4 million. Carlisle has declared a dividend in specie
of the shares in Shellproof to be paid to Carlisle Shareholders. The Carlisle
Dividend (described in paragraph 6 below) is payable to holders of Carlisle
Shares and will be satisfied, other than in respect of Non-Qualifying Carlisle
Shareholders, by the transfer of approximately 8,000,000 ordinary shares of 50
pence each in Shellproof.  It is intended that Shellproof be admitted to trading
on AIM.



2.         THE MERGER AND THE SCHEME



The Merger of Corporate Services Group and Carlisle will be implemented in two
stages. The acquisition of Carlisle will be implemented pursuant to the terms of
the Merger. The acquisition of Corporate Services Group will be implemented by
means of the Scheme.



Following completion of the Merger, the Scheme and Impellam Admission, Carlisle
Shareholders will collectively hold up to 23,010,800 Impellam Shares equivalent
to approximately 51.8 per cent. of the equity in Impellam. The balance of up to
21,381,679 Impellam Shares, equivalent to approximately 48.2 per cent. of the
equity of Impellam, will be held collectively by Corporate Services Group
Shareholders.



Lord Ashcroft KCMG holds 77.9 per cent. of the current issued share capital of
Carlisle and 29.7 per cent. of the current issued share capital of Corporate
Services Group and will hold 54.7 per cent. of the issued share capital of
Impellam following completion of the Merger, the Scheme and Impellam Admission.



By way of consideration for the Merger, Carlisle Shareholders will, in addition
to the dividend described in paragraph 6 below, be allotted and issued Impellam
Shares on the following basis:



for every 1 Carlisle Share held 1 Impellam Share



Assuming completion of the Merger and the Scheme and based on the Closing Price
of 125.5 pence per Carlisle Share on 6 February 2008 (being the last Business
Day prior to the announcement of the potential transaction), the Scheme values
each Corporate Services Group Share at approximately 2.49 pence and the existing
issued share capital of Corporate Services Group at approximately �26.8 million
in aggregate. This represents a premium of 51.9 per cent. to the Closing Price
of 1.64 pence per Corporate Services Group Share on 6 February 2008 (being the
last Business Day prior to the commencement of the Offer Period).



The value of the Carlisle Dividend (being a �4 million dividend in specie
described further below) equates to 17.4 pence per Carlisle Share which when
deducted from the Closing Price of 125.5 pence results in a theoretical Closing
Price for Carlisle of 108.1 pence per share (arrived at by deducting this value
of 17.4 pence ascribed to the Carlisle Dividend from the Closing Price of 125.5
pence per Carlisle Share on 6 February 2008) on 6 February 2008 (being the last
Business Day prior to the commencement of the Offer Period). On that basis the
Acquisition values each Corporate Services Group Share at 2.15 pence and the
existing issued share capital of Corporate Services Group at approximately �23.1
million in aggregate. This represents a premium of 30.9 per cent. to the Closing
Price of 1.64 pence per Corporate Services Group Share on 6 February 2008 (being
the last Business Day prior to the commencement of the Offer Period).



Impellam Shares will be issued credited as fully paid to Carlisle Shareholders
and will rank pari passu in all respects with the Impellam Shares in issue at
the time that the Impellam Shares are issued and allotted, including the right
to receive and retain dividends and other distributions declared, made or paid
after the Merger becomes effective.





3.         TERMS OF THE MERGER



The Merger will be effected under the IBCA. It is anticipated that the Merger
will become effective on or around 6 May 2008.



The Merger is conditional on none of the relevant conditions to the Scheme being
invoked successfully by Impellam or Corporate Services Group prior to the Merger
becoming effective.



Impellam Admission is conditional on completion of the Merger.



The Merger was approved by written resolution of the majority shareholder of
Carlisle, on 13 March 2008.



4.         IMPELLAM



Impellam was incorporated on 21 February 2008 and was formed specifically for
the purposes of acquiring both Corporate Services Group and Carlisle.  The
entire issued share capital of Impellam as at the date of this document is held
by companies controlled by Lord Ashcroft KCMG.



Impellam has not traded or carried on business prior to the date of this
document other than to enter into certain arrangements in contemplation of the
Merger and the acquisition of Corporate Services Group.  Following Completion,
Impellam will carry on the integrated businesses of Corporate Services Group and
Carlisle.



The current directors of Impellam are Kevin Mahoney and Richard Bradford who are
also directors of Carlisle.



5.         REASONS FOR THE MERGER



The Directors believe that holders of Carlisle Shares will benefit from the
Merger for the following reasons:



*     the combination of Carlisle and Corporate Services Group will create a
diversified business operating across a wide range of labour related markets, as
well as in outsourced support services, with total combined revenues approaching
�1 billion for the year ended 31 December 2007;

*     the Enlarged Impellam Group will contain an increased number of brands
operating across a broad range of staffing sectors as well as in outsourced
support services markets;

*     the Enlarged Impellam Group will be well positioned to manage its
portfolio and over time to realise potential value from its brands which could
reduce its debt and increase free cash flow, thereby strengthening the financial
position of the Enlarged Impellam Group;

*     the combination of Corporate Services Group and Carlisle will offer
significant potential savings and synergy benefits relating to both personnel
and properties; and

*     the Enlarged Impellam Group will provide Carlisle Shareholders with
increased liquidity in their shareholding of Impellam shares than is currently
the case for Carlisle Shares.



6.         DETAILS OF THE CARLISLE DIVIDEND



The Carlisle Dividend has been declared on the following basis:



All Qualifying Carlisle Shareholders will receive approximately:



34 Shellproof Shares for every 100 Carlisle Shares



registered in their name as at 4.30 p.m. (London time) on the Record Date.



Carlisle US Shareholders will not receive any Shellproof Shares and will instead
receive the US$ equivalent at the date of distribution of �17 in cash for every
100 Carlisle Shares registered in their name as at 4.30 p.m. (London time) on
the Record Date. Small Shareholders (being any Carlisle Shareholder who would
receive 170 or less Shellproof Shares) will receive �17 in cash for every 100
Carlisle Shares registered in their name as at 4.30 p.m. (London time) on the
Record Date, with the exception of Small Shareholders who are also Carlisle US
Shareholders, who will receive the US$ equivalent at the date of distribution of
�17 for every 100 Carlisle Shares registered in their name as at 4.30 p.m.
(London time) on the Record Date. This is to ensure that Small Shareholders will
not receive 170 or less Shellproof Shares pursuant to the Carlisle Dividend as
the Directors believe that such a shareholding is not viable and that such
Carlisle Shareholders should instead be provided with a cash equivalent.



The Carlisle Dividend is conditional on the resolutions proposed at the Meetings
being passed (the Condition). It is not conditional on the Merger, the Scheme
becoming effective, Impellam Admission or Shellproof Admission.



7.         FRACTIONAL ENTITLEMENTS TO SHELLPROOF SHARES



A Qualifying Carlisle Shareholder may be left with a fractional entitlement to
Shellproof Shares under the Carlisle Dividend. All fractional entitlements will
be rounded down and these fractional entitlements will be aggregated and sold to
placees outside the United States at a transfer price of not less than UK�0.50
for each Shellproof Share.



8.         INFORMATION ON SHELLPROOF

Shellproof was incorporated in Belize on 3 March 2008 as an international
business company under the IBCA with one issued share of UK�0.50 held by
Carlisle. On 13 March 2008, Carlisle subscribed for a further 7,999,999
Shellproof Shares, for an aggregate cash subscription price of �3,999,999.50.
All of the Shellproof Shares held by Carlisle will either be transferred to
Qualifying Carlisle Shareholders in order to satisfy the Carlisle Dividend, or
be sold to placees outside the United States in order to raise funds to pay a
cash equivalent to Carlisle US Shareholders and Small Shareholders.



If the Condition is fulfilled, Shellproof will seek for the Shellproof Admission
to occur in early May 2008 and the Shellproof Admission Document, which will
contain further information on Shellproof will be sent to Qualifying Carlisle
Shareholders as soon as practicable after the Condition is fulfilled. Neither
Carlisle US Shareholders nor Small Shareholders will receive the Shellproof
Admission Document.




9.         DOCUMENTS



A circular setting out details of the Merger and the Carlisle Dividend and the
Impellam Admission Document have been sent to Carlisle Shareholders today.



For further enquiries:


Carlisle Group Limited                                        Tel: 01707 824000
Kevin Mahoney, Chairman
Richard Bradford, Chief Executive Officer
Philip Osborne, Company Secretary                             Tel: +501 227 7178

Cenkos Securities plc                                         Tel: 020 7397 8900
(Nominated adviser to Carlisle and Impellam)
Nicholas Wells
Adrian Hargrave



Definitions


AIM                             AIM, the market of that name operated by the London Stock Exchange;
Acquisition                     the proposed acquisition of the entire issued and to be issued share capital
                                of Corporate Services Group by Impellam to be effected by way of a scheme of
                                arrangement under section 425 of the UK Companies Act 1985 and Part 26 of
                                the UK Companies Act 2006;
Business Day                    a day (other than a public holiday, Saturday or Sunday) on which the London
                                Stock Exchange is open for normal business;
Carlisle                        Carlisle Group Limited, an international business company incorporated in
                                Belize under the International Business Companies Act, 1990 of Belize, as
                                amended, with registered number 44,136;
Carlisle Dividend               the dividend conditionally declared by the directors of Carlisle on 13 March
                                2008 of 34 Shellproof Shares for each 100 Carlisle Shares held by a Carlisle
                                Shareholder as at the Record Date;
Carlisle Shareholders           holders of Carlisle Shares on the Record Date;
Carlisle Shares                 ordinary shares of 10 pence each in the capital of Carlisle (other than the
                                Treasury Shares);
Carlisle US Shareholder         any Carlisle Shareholder who is (or is a US-based custodian, nominee or
                                trustee for a person who is not, or who is) a citizen, resident or national
                                of the United States;
Closing Price                   the closing middle market quotation of the relevant share as derived from
                                the Daily Official List;
Completion                      completion of the Merger in accordance with the terms of the Merger Plan and
                                the Scheme becoming effective in accordance with its terms;
Corporate Services Group        The Corporate Services Group plc, a company incorporated in England and
                                Wales with registered number 490212;
Corporate Services Group        holders of Corporate Services Group Shares;
Shareholders
Corporate Services Group Shares ordinary shares of 1 pence each in the capital of Corporate Services Group;
Court                           the High Court of Justice in England and Wales;
Court Meeting                   the meeting of the Relevant Shareholders convened pursuant to an order of
                                the Court pursuant to section 425 of the UK Companies Act 1985 and Part 26
                                of the UK Companies Act 2006 to consider and, if thought fit, approve the
                                Scheme (with or without modification) and any adjournment thereof;
Daily Official List             the Daily Official List of the London Stock Exchange;
Directors                       the directors of Carlisle as at the date of this document;
Enlarged Impellam Group         Impellam and its subsidiaries following completion of (i) the Merger and
                                (ii) the Scheme;
Enlarged Impellam Share Capital the entire issued ordinary share capital of Impellam following Completion;
General Meeting                 a general meeting of the Corporate Services Group to be held immediately
                                after the Court Meeting;
IBCA                            The International Business Companies Act 1990 of Belize (as amended);
Impellam                        Impellam Group plc, a company incorporated in England and Wales with
                                registered number 6511961;
Impellam Admission              admission of all of the Impellam Shares to trading on AIM;
Impellam Admission Document     the admission document in respect of the admission of Impellam Shares to
                                trading on AIM to be sent to all Carlisle Shareholders;
Impellam Group                  Impellam and its subsidiaries and subsidiary undertakings and for these
                                purposes subsidiary undertaking has the meaning given by the UK Companies
                                Acts;
Impellam Shares                 ordinary shares of one pence each in the share capital of Impellam;
London Stock Exchange           London Stock Exchange plc;
Meetings                        the Court Meeting and the General Meeting or either of them as the context
                                requires;
Merger                          the merger of Impellam and Carlisle in accordance with Part VII of the IBCA;
Non-Qualifying Carlisle         any Carlisle US Shareholder and any Small Shareholder;
Shareholders
Offer Period                    the period commencing on 6 February 2008 and ending on the date on which the
                                Scheme becomes effective;
Qualifying Carlisle             Carlisle Shareholders other than Carlisle US Shareholders and Small
Shareholders                    Shareholders;
Record Date                     8 April 2008;
Scheme                          the scheme of arrangement proposed to be made under section 425 of the UK
                                Companies Act 1985 and Part 26 of the UK Companies Act 2006 between
                                Corporate Services Group, Corporate Services Group Shareholders and Impellam
                                whereby Impellam acquires Corporate Services Group in its present form or
                                with or subject to any modification, addition or condition approved or
                                imposed by the Court and agreed to by Corporate Services Group and Impellam;
Shellproof                      Shellproof Limited, an international business company incorporated in Belize
                                under the International Business Companies Act, 1990 of Belize, as amended,
                                with registered number70859;
Shellproof Admission            admission of all of the Shellproof Shares to trading on AIM;
Shellproof Admission Document   the admission document in respect of the admission of the Shellproof Shares
                                to trading on AIM which it is anticipated will be sent to Shellproof
                                shareholders in May 2008, subject to fulfilment to the Condition referred to
                                in paragraph 6 of this announcement;
Shellproof Shares               ordinary shares of 50 pence each in the capital of Shellproof;
Small Shareholder               any CGL Shareholder who, under the terms of the CGL Dividend, will be
                                entitled to 170 or less Shellproof Shares;
Treasury Shares                 the 1,055,860 ordinary shares of 50 pence each in the capital of Carlisle
                                held by Carlisle Group Treasury Limited, a subsidiary of Carlisle in
                                treasury;
UK Companies Acts               the UK Companies Act 1985 as amended (to the extent still in force) and/or
                                (to the extent in force) the UK Companies Act 2006; and
United States or US             the United States of America, its territories and possessions, any state or
                                political sub-division of the United States of America and the District of
                                Columbia.




                      This information is provided by RNS
            The company news service from the London Stock Exchange
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