RNS No 4091j
LONDON & METROPOLITAN PLC
13th March 1998
Not for release, publication or distribution in or into the United States,
Canada, Australia or Japan.
Grantchester Holdings PLC ("Grantchester")
Recommended Offer ("Offer")
for
London & Metropolitan PLC ("London & Metropolitan")
- The boards of Grantchester and London & Metropolitan announce the terms of a
recommended offer to be made by Credit Suisse First Boston, on behalf of
Grantchester, for the entire issued and to be issued share capital of London
& Metropolitan.
- The Offer will be made on the basis of 2 Grantchester Shares for 27 London &
Metropolitan Shares. Based on the closing middle market quotation for a
Grantchester Share of 179p on 12 March 1998, the Offer values each London &
Metropolitan Share at 13.26p and the entire existing issued share capital
of London & Metropolitan at approximately #6.33 million.
- The Offer of 13.26p represents a premium of 36.0 per cent. to the closing
middle market quotation for a London & Metropolitan Share on 12 March 1998,
the last business day prior to the announcement of the Offer.
- Grantchester will provide a full cash alternative valuing each London &
Metropolitan Share at 12.15p. The Cash Alternative values the entire issued
share capital of London & Metropolitan at approximately #5.80 million.
- Grantchester has received irrevocable undertakings to accept the Offer from
all of the directors and senior managers of London & Metropolitan who hold
London & Metropolitan Shares and from certain other shareholders, in respect
of an aggregate of 20,118,308 London & Metropolitan Shares, representing
approximately 42.1 per cent. of London & Metropolitans issued share capital.
All of these undertakings to accept the Offer are binding even if a
competing offer is announced by a third party.
- The acquisition provides Grantchester with a direct interest in factory
outlet shopping operations and will enable Grantchester to merge its
industrial and office development activities with those of London &
Metropolitan, allowing Grantchester to focus more fully on retail
warehousing.
- London & Metropolitan is a property development and management company
engaged in a wide range of commercial property development activities in the
UK and Europe.
- Grantchester is the largest quoted UK retail property company specialising
in investing in retail warehousing.
Commenting on the Offer, Nick Hewson, Chief Executive of Grantchester, said:
"This acquisition gives Grantchester an interesting opportunity to gain
exposure to the factory outlet shopping market and also provides the Group with
the prospect of participating in a number of exciting retail warehouse and
other development situations."
Christopher Harris, Chairman and Managing Director of London & Metropolitan,
said:
"We are very pleased to have reached agreement with Grantchester. Following a
number of years in which London & Metropolitan has been severely constrained by
its financial position, the Offer will give us the opportunity to build our
business as part of the enlarged Grantchester group. We believe that the two
groups have complementary skills which should allow the combined company to
take advantage of a wider range of property opportunities. The Board
unanimously recommends shareholders to accept the Offer."
This summary should be read in conjunction with the full text of the following
announcement issued on behalf of the directors of Grantchester by Credit Suisse
First Boston.
Enquiries:
Grantchester
Nick Hewson (Chief Executive and Finance Director) 0171 335 1200
Credit Suisse First Boston
Henry Lloyd 0171 888 8888
Financial Dynamics
Karen Roberts 0171 831 3113
Anne Brown
London & Metropolitan
Christopher Harris (Chairman and Managing Director) 0171 925 2383
John Aiton (Finance Director)
Dresdner Kleinwort Benson
Nigel Binks 0171 623 8000
Hudson Sandler
Michael Sandler 0171 796 4133
Credit Suisse First Boston, which is regulated by The Securities and Futures
Authority Limited, is acting for Grantchester and no-one else in connection
with the Offer and will not be responsible to anyone other than Grantchester
for providing the protections afforded to customers of Credit Suisse First
Boston or for giving advice in relation to the Offer.
Kleinwort Benson Limited ("Dresdner Kleinwort Benson"), which is regulated by
The Securities and Futures Authority Limited, is acting for London &
Metropolitan and no-one else in connection with the Offer and will not regard
any other person as its customer or be responsible to anyone other than London
& Metropolitan for providing the protections afforded to customers of Dresdner
Kleinwort Benson or for giving advice in relation to the contents of this
announcement or any matter referred to herein.
The Offer will not be made, directly or indirectly, in or into or by the use of
the mails of, or by any means or instrumentality (including, without
limitation, facsimile transmission, telex and telephone) of interstate or
foreign commerce of, or any facilities of a national securities exchange of,
the United States of America, its possessions or territories or any area
subject to its jurisdiction or any political subdivision thereof, nor is it
being made in Canada, Australia or Japan. Accordingly, copies of documents
relating to the Offer will not be, and must not be, mailed, or otherwise
distributed or sent in or into or from the United States of America, Canada,
Australia or Japan and persons receiving such documents (including custodians,
nominees and trustees) must not distribute or send it into or from the United
States of America, Canada, Australia or Japan. Doing so may invalidate any
purported acceptance.
The broker to the offer is Credit Suisse First Boston de Zoete & Bevan Limited.
Not for release, publication or distribution in or into the United States,
Canada, Australia or Japan.
Grantchester Holdings PLC ("Grantchester")
Recommended Offer ("Offer")
for
London & Metropolitan PLC ("London & Metropolitan")
The boards of Grantchester and London & Metropolitan announce that they have
agreed the terms of a recommended offer to be made by Credit Suisse First
Boston, on behalf of Grantchester, to acquire all of the issued and to be
issued share capital of London & Metropolitan.
The Offer, which will be subject to the conditions and further terms set out
below and in Appendix I and to be set out in the Offer Document, will be made
on the following basis:
for every 27 London & Metropolitan Shares 2 Grantchester Shares
and so in proportion to any other number of London & Metropolitan Shares held.
On the basis of the closing middle market quotation of one Grantchester Share
of 179p on 12 March 1998 (the last business day prior to the announcement of
the Offer), the Offer values each London & Metropolitan Share at 13.26p and the
whole of the existing issued ordinary share capital of London & Metropolitan at
approximately #6.33 million. The Offer represents a premium of 36.0 per cent.
to the closing middle market quotation of a London & Metropolitan Share of
9.75p on 12 March 1998 and compares with the net asset value per share of
London & Metropolitan as at 31 December 1997 of 1.7p.
Full acceptance of the Offer (assuming no elections for the Cash Alternative
and no exercise of options over London & Metropolitan Shares while the Offer
remains open for acceptance) would involve the issue of approximately 3,536,858
new Grantchester Shares, representing approximately 2.88 per cent. of the
issued ordinary share capital of Grantchester as enlarged by the Offer.
The Cash Alternative
London & Metropolitan Shareholders who validly accept the Offer will be
entitled to elect to receive cash instead of all or any of the new Grantchester
Shares to which they would otherwise have become entitled under the Offer on
the following basis:
for each London & Metropolitan Share 12.15p in cash
The cash consideration under the Cash Alternative represents a premium of 24.6
per cent. to the closing middle market quotation for a London & Metropolitan
Share of 9.75p on 12 March 1998 (the last business day prior to the
announcement of the Offer). Valid elections for the Cash Alternative will be
paid out of the Grantchester Group's existing cash resources.
The directors of London & Metropolitan, who have been so advised by Dresdner
Kleinwort Benson, consider the terms of the Offer to be fair and reasonable.
Accordingly, the directors of London & Metropolitan unanimously intend to
recommend that London & Metropolitan Shareholders accept the Offer. In
providing advice to the board, Dresdner Kleinwort Benson has taken into account
the commercial assessments of the directors of London & Metropolitan.
Grantchester has received irrevocable undertakings to accept the Offer from all
of the directors and senior managers of London & Metropolitan who hold London &
Metropolitan Shares and certain other London & Metropolitan shareholders, in
respect of an aggregate of 20,118,308 London & Metropolitan Shares,
representing approximately 42.1 per cent. of London & Metropolitan's issued
share capital. All of these undertakings to accept the Offer are binding even
if a competing offer is announced by a third party.
Further details of the Offer
The London & Metropolitan Shares, which are the subject of the Offer, will be
acquired by Grantchester fully paid, free from all liens, equities, charges,
encumbrances, rights of pre-emption and other third party interests and
together with all rights now or hereafter attaching thereto, including the
right to receive and retain in full all dividends and other distributions (if
any) declared, made or paid on or after the date hereof.
The new Grantchester Shares issued pursuant to the Offer will be credited as
fully paid and will rank pari passu in all respects with the existing
Grantchester Shares, including the right to receive and retain in full all
dividends and other distributions declared, made or paid on or after the date
hereof, including any interim dividend payable in respect of the year ending 30
September 1998.
Under the Offer, fractions of new Grantchester Shares will not be allotted or
issued to accepting London & Metropolitan Shareholders but will be aggregated
and sold in the market and the net proceeds of sale will be retained for the
benefit of the Enlarged Group.
The Offer will be on the terms and will be subject, inter alia, to the
conditions which are set out in Appendix I hereto and those terms which will be
set out in the formal Offer document and such further terms as may be required
to comply with the Listing Rules of the London Stock Exchange and the
provisions of the City Code.
Information on Grantchester
Grantchester is the largest quoted UK property company specialising in
investments in retail warehousing. Since its flotation in November 1996, the
Group has built up an investment portfolio valued at #211 million as at 30
September 1997, comprising largely 16 retail warehouse schemes covering over
1.4 million square feet. Grantchester also has an additional eight retail
warehouse schemes under development. When completed, the Group will have over
2.2 million square feet of retail warehouse space, with an annual net rental
income of some #21.5 million. In addition, Grantchester has a portfolio of
contracts and options over land for retail warehouse and other related
development opportunities.
For the year ended 30 September 1997, Grantchester recorded profits before tax
of #3.7 million on net rental income of #7.3 million. As at 30 September 1997,
net assets per ordinary share were 131p compared to 73p for the previous year,
an increase of nearly 80 per cent.
Background to and reasons for the Offer
Grantchester's strategy is consistently to outperform the property market in
terms of growth in net assets per share. Growth in net assets per share in the
last financial year has been achieved by developing new retail warehouse
schemes and by acquiring and, where appropriate, redeveloping existing schemes.
The Group seeks to maximise the value from its investments by active
management, both by redeveloping the whole or parts of existing schemes to
ensure an optimal use of space at each site and by managing its existing space
to establish evidence of higher rents. In addition, the Group has continued to
acquire new sites under option in order to develop the land for retail and
other related schemes.
The acquisition of London & Metropolitan provides Grantchester with an
opportunity to benefit from London & Metropolitans interest in Value Retail,
Europe's leading factory outlet developer. London & Metropolitan is acting as
joint development managers and project manager for Value Retail, which
currently has factory outlet projects in Bicester, Barcelona, Madrid, Paris and
Munich. Grantchester believes that its skills in retail warehousing, in
particular relating to planning, risk management and tenant mix, complement
those of London & Metropolitan. Furthermore, Grantchester believes that there
may be opportunities in certain circumstances to develop retail warehouse
schemes on land adjacent to factory outlet schemes and thereby extend the
product range available to customers at any one site.
The acquisition of London & Metropolitan will also provide Grantchester with a
number of additional sites under option in the UK, providing opportunities for
further retail warehouse, leisure or related developments. In addition,
Grantchester believes that it can use London & Metropolitan's development
skills and experience to exploit more fully opportunities from the Group's
existing portfolio of options and contracts for land for potential industrial
and office development, enabling Grantchester's management to remain fully
focused on retail warehouse developments.
Grantchester's current trading and prospects
Despite the highly competitive nature of the market, Grantchester has acquired,
or contracted to acquire, up to 270,000 square feet of additional retail
warehouse space since reporting its year end results in December of last year,
including a retail park in Twickenham and a DIY superstore site in Dundee. The
acquisition of the Parc Tawe Retail Park, Swansea, from the property
development subsidiary of J. Sainsbury PLC has also been completed.
Since the last financial year end, Grantchester has also taken the opportunity
to sell three properties. Each of these has been successfully developed to a
point where Grantchester believed that they offered limited scope to add
further value. The combined proceeds from these disposals was #20.3 million.
Grantchester continues actively to seek out development opportunities not just
in retail warehousing, but also in complementary sectors where value can be
added whilst adhering to Grantchester's principles of risk management.
With a highly reversionary portfolio, secure long-term income, unfulfilled
investment demand and strong rental growth, the directors of Grantchester
believe that the outlook for the company remains very encouraging.
Information on London & Metropolitan
London & Metropolitan is a property development and management company engaged
in a wide range of commercial property development activities, principally in
the UK and in Europe. London & Metropolitan's preliminary results for the year
ended 31 December 1997, published today, disclose that London & Metropolitan's
net assets/(liabilities) amounted to #0.8 million (1996: #(16.4) million),
which is equivalent to net assets/(liabilities) per share of 1.7p (1996:
(34.4)p).
London & Metropolitan is currently pursuing a range of new development
opportunities, although its progress continues to be constrained by its size
and limited financial resources.
Financial effects of the Offer
The financial effects for London & Metropolitan Shareholders of acceptance of
the Offer are set out in Appendix II.
Management and employees
The existing employment rights, including pension rights, of the management and
employees of London & Metropolitan and its subsidiaries will be fully
safeguarded.
Grantchester has agreed that, in due course, the management of London &
Metropolitan will be included in a Grantchester deferred share scheme, once it
has been established, which will be put in place to incentivise the management
and employees of the Enlarged Group.
Grantchester has also agreed, in principle, that if Grantchester decides to
dispose of all or a material part of the London & Metropolitan Group to an
independent third party on normal commercial terms, Christopher Harris, the
Chairman and Managing Director of London & Metropolitan, will be given the
opportunity to acquire the same, at the price and on substantially similar
terms as those agreed with the third party.
Option holders
The Offer will extend to any London & Metropolitan Shares issued or
unconditionally allotted prior to the date on which the Offer closes (or such
earlier date as Grantchester may, subject to the City Code, determine, not
being earlier than the date on which the Offer becomes or is declared
unconditional as to acceptances or, if later, the first closing date of the
Offer) as a result of the exercise of options granted under the London &
Metropolitan Share Schemes. To the extent that options have not been
exercised, appropriate proposals will be made to option holders under the
London & Metropolitan Share Schemes in due course.
General
The formal Offer Document setting out the details of the Offer and the Cash
Alternative, and containing the full terms and conditions of the Offer will be
posted to London & Metropolitan Shareholders as soon as is practicable.
Neither Grantchester, nor any director of Grantchester nor, so far as
Grantchester is aware, any persons acting in concert with Grantchester, owns or
has any beneficial interest in London & Metropolitan Shares.
The availability of the Offer 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.
Application will be made to the London Stock Exchange for the admission to the
Official List of the new Grantchester Shares to be issued pursuant the Offer.
It is expected that dealings in the new Grantchester Shares will commence on
the business day following the day on which the Offer becomes or is declared
unconditional in all respects.
This announcement does not constitute an offer or an invitation to purchase any
securities.
Terms used in this press announcement are defined in Appendix III.
Enquiries:
Grantchester
Nick Hewson (Chief Executive and Finance Director) 0171 335 1200
Credit Suisse First Boston
Henry Lloyd 0171 888 8888
Financial Dynamics
Karen Roberts 0171 831 3113
Anne Brown
London & Metropolitan
Christopher Harris (Chairman and Managing Director) 0171 925 2383
John Aiton (Finance Director)
Dresdner Kleinwort Benson
Nigel Binks 0171 623 8000
Hudson Sandler
Michael Sandler 0171 796 4133
Credit Suisse First Boston, which is regulated by The Securities and Futures
Authority Limited, is acting for Grantchester and no-one else in connection
with the Offer and will not be responsible to anyone other than Grantchester
for providing the protections afforded to customers of Credit Suisse First
Boston or for giving advice in relation to the Offer.
Kleinwort Benson Limited ("Dresdner Kleinwort Benson"), which is regulated by
The Securities and Futures Authority Limited, is acting for London &
Metropolitan and no-one else in connection with the Offer and will not regard
any other person as its customer or be responsible to anyone other than London
& Metropolitan for providing the protections afforded to customers of Dresdner
Kleinwort Benson or for giving advice in relation to the contents of this
announcement or any matter referred to herein.
The Offer will not be made, directly or indirectly, in or into or by the use of
the mails of, or by any means or instrumentality (including, without
limitation, facsimile transmission, telex and telephone) of interstate or
foreign commerce of, or any facilities of a national securities exchange of,
the United States of America, its possessions or territories or any area
subject to its jurisdiction or any political subdivision thereof, nor is it
being made in Canada, Australia or Japan. Accordingly, copies of documents
relating to the Offer will not be, and must not be, mailed, or otherwise
distributed or sent in or into or from the United States of America, Canada,
Australia or Japan and persons receiving such documents (including custodians,
nominees and trustees) must not distribute or send it into or from the United
States of America, Canada, Australia or Japan. Doing so may invalidate any
purported acceptance.
The broker to the Offer is Credit Suisse First Boston de Zoete & Bevan Limited.
Appendix I
Conditions of the Offer
The Offer will be subject to the following conditions:
1. valid acceptances being received (and not, where permitted, withdrawn) by
not later than 3.00 p.m. (London time) on the first closing date of the
Offer (or such later time(s) and/or date(s) as Grantchester may, subject to
the rules of the City Code, decide) in respect of not less than 90 per cent.
(or such lower percentage as Grantchester may decide) of the London &
Metropolitan Shares to which the Offer relates provided that this condition
will not be satisfied unless Grantchester and/or its wholly-owned
subsidiaries shall have acquired or agreed to acquire (whether pursuant to
the Offer or otherwise) directly or indirectly, London & Metropolitan Shares
carrying in aggregate more than 50 per cent. of the voting rights then
normally exercisable at a general meeting of London & Metropolitan on such
basis as may be required by the Panel including for this purpose (to the
extent, if any, required by the Panel) any voting rights attaching to any
London & Metropolitan Shares which are unconditionally allotted or issued
before the Offer becomes or is declared unconditional as to acceptances,
whether pursuant to exercise of any outstanding subscription or conversion
rights or otherwise.
For the purposes of this condition:
1.1 London & Metropolitan Shares which have been unconditionally allotted
shall be deemed to carry the voting rights they will carry upon being
entered in the register of members of London & Metropolitan; and
1.2 the expression "London & Metropolitan Shares to which the Offer
relates" shall be construed in accordance with Sections 428 to 430F
of the Companies Act 1985;
2. The Office of Fair Trading indicating, in terms reasonably satisfactory
to Grantchester, that it is not the intention of the Secretary of State for
Trade and Industry to refer the proposed acquisition of London &
Metropolitan by Grantchester or any matters arising therefrom to the
Monopolies and Mergers Commission;
.
3. the London Stock Exchange agreeing to admit the new Grantchester Shares
to be issued pursuant to the Offer to the Official List and such admission
becoming effective in accordance with paragraph 7.1 of the Listing Rules of
the London Stock Exchange;
4. there being no provision of any agreement, arrangement, licence, permit or
other instrument to which London & Metropolitan or any of its subsidiaries,
subsidiary undertakings or associated undertakings (including any company of
which 20 per cent. or more of the voting capital is held by the London &
Metropolitan Group) or any joint venture, partnership, firm or body
corporate in which any of them has a substantial interest (the "wider London
& Metropolitan Group") is a party or by or to which any such member of the
wider London & Metropolitan Group or any of its assets may be bound,
entitled or subject, and of which Grantchester has not been specifically
notified by London & Metropolitan in writing prior to the date of
announcement of the Offer, which will, could or might reasonably be expected
to result, as a consequence of the acquisition of any London & Metropolitan
Shares or because of a change in the control or management of London &
Metropolitan or any member of the wider London & Metropolitan Group by
Grantchester, to an extent which in each case is material in the context of
the London & Metropolitan Group taken as a whole, in:
4.1 any monies borrowed by or any other indebtedness (actual or
contingent) of any such member being or becoming repayable or capable
of being declared repayable immediately or earlier than the repayment
date provided for in such arrangement, agreement, licence or other
instrument or the ability of any such member to borrow money or incur
any indebtedness being withdrawn or inhibited or affected;
4.2 any such agreement, arrangement, licence, permit or instrument or the
rights, liabilities, obligations or interests of any such member
thereunder being terminated or adversely modified or affected or any
action or obligation or liability of an adverse nature being taken or
arising thereunder;
4.3 the interests or business of any such member in or with any other
person, firm, company or body (or any arrangements relating to such
interests or business) being terminated or adversely affected or
modified in any manner;
4.4 any asset of any such member being or being liable to be disposed of
or charged or any right arising under which any such asset or
interest would be required to be disposed of or charged;
4.5 the creation of any mortgage, charge or other security interest over
the whole or any part of the business, property or assets of any such
member or any such security interest (whenever arising or having
arisen) becoming enforceable;
4.6 any such member ceasing to be able to carry on business under any
name under which it presently does so; or
4.7 the respective financial or trading prospects of any such member
being prejudiced or adversely affected.
For these purposes a "substantial interest" is a direct or indirect
interest in 10 per cent. or more of the voting power exercisable at any
general meeting of a body corporate.
5. no government or governmental, quasi-governmental, supranational,
statutory, professional, regulatory, environmental or investigative body,
or any court, stock exchange, trade agency, association, institutional,
disciplinary or other body or person whatsoever in any jurisdiction having
decided to take, instituted, implemented or threatened any action,
proceedings, suit, investigation, enquiry or reference, or enacted, made or
proposed any statute, regulation or order or taken any other steps which
would or, in the reasonable opinion of Grantchester, might:
5.1 make the Offer or the implementation of the Offer or the acquisition
or proposed acquisition of London & Metropolitan Shares or control of
London & Metropolitan by Grantchester void, illegal and/or
unenforceable, or otherwise directly or indirectly restrict,
prohibit, delay, or otherwise adversely interfere with the
implementation thereof, or impose additional conditions or
obligations with respect thereto in each case to an extent which is
material in the context of the Offer;
5.2 as a consequence of the Offer or its implementation, require or
prevent or delay the divestiture by Grantchester or any of its
subsidiaries, subsidiary undertakings or associated undertakings
(including any company of which 20 per cent. or more of the voting
capital is held by the Grantchester Group) any joint venture,
partnership, firm or body corporate in which any of them has a
substantial interest (the "wider Grantchester Group") or any member
of the wider London & Metropolitan Group of all or any material
portion of their respective businesses, assets or property or impose
any material limitation on the ability of any of them to conduct
their respective businesses or to own any of their respective assets
or property;
5.3 as a consequence of the Offer or its implementation require, prevent
or delay the divestiture by Grantchester or any member of the
Grantchester Group of any London & Metropolitan Shares or other
securities in London & Metropolitan;
5.4 as a consequence of the Offer or its implementation, impose any
limitations on or result in a delay in the ability of any member of
the Grantchester Group or of the London & Metropolitan Group to
acquire or to hold or to exercise effectively, directly or
indirectly, all or any rights of ownership in respect of shares or
the equivalent in any member of the wider London & Metropolitan Group
or to exercise management control over any such member in each case
to an extent which is material in the context of the wider London &
Metropolitan Group or the wider Grantchester Group (as the case may
be) taken as a whole;
5.5 otherwise to adversely affect the business, assets, prospects or
profits of any member of the London & Metropolitan Group or (as a
consequence of the Offer or its implementation) any member of the
wider Grantchester Group in a way which is material in the context of
the London & Metropolitan Group or the Grantchester Group (as the
case may be) taken as a whole; or
5.6 require any member of the Grantchester Group or the London &
Metropolitan Group to offer to acquire any shares or securities or
rights thereover in any member of the wider London & Metropolitan
Group owned by any third party;
and all applicable waiting and other time periods during which any such
government, governmental, quasi-governmental, supranational, statutory,
professional, regulatory, environmental or investigative body, court, stock
exchange, trade agency, association, or other body or person could
institute or decide to take or threaten any such action, proceedings, suit,
investigation or enquiry having expired, lapsed or been terminated;
6. all necessary filings having been made in connection with the Offer and/or
the acquisition by Grantchester of any London & Metropolitan Shares or
control of any member of the London & Metropolitan Group and all
appropriate waiting periods relating thereto under any applicable
legislation or regulations of any jurisdiction having expired, lapsed or
been terminated and all authorisations, orders, recognitions, grants,
consents, licences, confirmations, clearances, exemptions, permissions and
approvals necessary or appropriate for or in respect of the Offer or
proposed acquisition of any shares in, or control of, London & Metropolitan
by Grantchester or any member of the Grantchester Group or the issue or
offering of any new Grantchester Shares or the carrying on by any member of
the wider London & Metropolitan Group of its business, having been obtained
in terms and in a form satisfactory to Grantchester from all appropriate
governments, governmental, quasi-governmental, supranational, statutory,
professional, regulatory, environmental or investigative bodies or courts,
stock exchanges, trade agencies, associations, or other body in any
jurisdiction where the absence of such authorisations, orders,
recognitions, grants, consents, licences, confirmations, clearances,
exemptions, permissions and approvals would have a material and adverse
effect on the Offer or on the wider London & Metropolitan Group or wider
Grantchester Group (as the case may be) taken as a whole and such
authorisations, orders, recognitions, grants, consents, licences,
confirmations, clearances, exemptions, permissions and approvals together
with all authorisations, orders, recognitions, grants, licences,
confirmations, clearances, permissions and approvals remaining in full
force and effect at the time the Offer becomes otherwise unconditional in
all respects and all necessary filings having been made for such purposes
and there being no intimation of any intention to revoke, suspend, modify
or not to renew any of the same;
7. save as publicly announced by delivery of an announcement to the Company
Announcements Office of the London Stock Exchange before 13 March 1998, no
member of the London & Metropolitan Group having, since 31 December 1996:
7.1 save in respect of transactions solely involving members of the
London & Metropolitan Group, issued or agreed to issue or authorised
or proposed the issue of additional shares of any class;
7.2 issued or authorised or proposed the issue of or granted securities
convertible into shares or rights, warrants, or options to subscribe
for, or acquire, any such shares or convertible securities;
7.3 recommended, declared, paid or made or proposed to recommend,
declare, pay or make any bonus, dividend or other distribution;
7.4 merged with any body corporate or acquired or disposed of or
transferred, mortgaged or charged or created any security interest
over any assets or any rights, title or interest in any asset
(including shares and trade investments) or authorised or proposed or
announced any intention to propose any merger, demerger, acquisition,
disposal, transfer, mortgage, charge or security interest otherwise
than in the ordinary course of business;
7.5 authorised or proposed or announced an intention to propose any
change in its share or loan capital or to purchase, redeem or reduce
any of its share capital;
7.6 issued, authorised or proposed the issue of any debentures or
incurred or increased any indebtedness or become subject to any
contingent liability in any such case which is material in the
context of the London & Metropolitan Group taken as a whole;
7.7 entered into any contract, reconstruction, amalgamation, scheme,
commitment or other transaction or arrangement otherwise than in the
ordinary course of business which is material in the context of the
London & Metropolitan Group taken as a whole or entered into or
changed the terms of any contract with any director of London &
Metropolitan or senior executives of any member of the London &
Metropolitan Group;
7.8 entered into or varied or authorised, proposed or announced its
intention to enter into any contract, transaction or commitment
(whether in respect of capital expenditure or otherwise) which is of
a long term or unusual nature or which involved or could involve an
obligation of a nature or magnitude which in any case is material in
the context of the London & Metropolitan Group taken as a whole or
which is other than in the ordinary course of business;
7.9 taken any corporate action nor had any legal proceedings instituted
or threatened against it for its winding up, dissolution or
reorganisation or for the appointment of a receiver, administrator,
administrative receiver, trustee or similar officer of all or any of
its assets and revenues;
7.10 entered into any transaction, contract or arrangement which would be
restrictive on the business of any member of the London &
Metropolitan Group or the wider Grantchester Group and which is
material in the context of the London & Metropolitan Group or the
wider Grantchester Group in each case taken as a whole or which is
otherwise in the ordinary course of business;
7.11 waived or compromised any claim which is material in the context of
the London & Metropolitan Group taken as a whole;
7.12 entered into any contract, commitment or agreement or passed any
resolution with respect to or announced any intention to propose to
effect any of the transactions, matters or events referred to in this
condition;
7.13 been unable or having admitted in writing that it is unable to pay
its debts 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;
8. save as publicly announced by delivery of an announcement to the Company
Announcements Office of the London Stock Exchange before 13 March 1998,
since 31 December 1996:
8.1 no adverse change having occurred in the business, assets, financial
or trading position or profits or assets or prospects of any member
of the wider London & Metropolitan Group which is material in the
context of the London & Metropolitan Group taken as a whole;
8.2 no litigation, arbitration, proceedings, prosecution or other legal
proceedings having been instituted, announced or threatened or become
pending or remained outstanding by any member of the wider London &
Metropolitan Group or to which any member of the wider London &
Metropolitan Group is or may become a party which is material in the
context of the London & Metropolitan Group taken as a whole;
9. Grantchester not having discovered:
9.1 that any financial or business or other information which has been
publicly disclosed at any time by or on behalf of any member of the
London & Metropolitan Group, or that has been disclosed by any member
of the London & Metropolitan Group to Grantchester, either contains a
misrepresentation of fact or omits to state a fact necessary to make
the information contained therein not misleading, which
misrepresentation or omission is material in the context of the Offer
or the London & Metropolitan Group taken as a whole and which was not
corrected by subsequent disclosure to Grantchester prior to the
making of the Offer; or
9.2 that any partnership, company or other entity in which any member of
the wider London & Metropolitan Group has a significant economic
interest and which is not a subsidiary undertaking of London &
Metropolitan is subject to any liability (contingent or otherwise)
which is not disclosed in the annual report and accounts of London &
Metropolitan for the year ended 31 December 1996 or the announcement
by London & Metropolitan of its interim results for the 26 weeks
ended 30 June 1997 or otherwise publicly disclosed and which is
material in the context of the London & Metropolitan Group taken as a
whole.
10. Grantchester not having discovered:
10.1 that any past or present member of the London & Metropolitan Group
has not complied with all applicable legislation or regulations of
any jurisdiction in relation to environmental matters, which
non-compliance would give rise to any liability (whether actual or
contingent) or cost on the part of any member of the wider London &
Metropolitan Group which would be material to the London &
Metropolitan Group taken as a whole; or
10.2 there has been an emission, disposal, discharge, deposit, spillage or
leak of waste or hazardous or harmful substance on or about or from
any property now or previously owned, occupied or made use of by any
past or present member of the London & Metropolitan Group which would
be likely to give rise to any liability (whether actual or
contingent) or cost on the part of any member of the wider London &
Metropolitan Group which would be material to the London &
Metropolitan Group taken as a whole; or
10.3 that there is or is likely to be any liability (whether actual or
contingent) to make good, repair, reinstate or clean up any property
now or previously owned, occupied or made use of by any past or
present member of the wider London & Metropolitan Group under any
environmental legislation, regulation, notice, circular or order of
any relevant authority or otherwise which is material in the context
of the London & Metropolitan Group taken as a whole.
Grantchester reserves the right to waive, in whole or in part, all or any of
the above conditions, except conditions 1 and 3 and if Grantchester is required
to make any offer under the provisions of Rule 9 of the City Code to make such
alterations to any of the conditions, including condition 1, as are necessary
to comply with the provisions of that Rule.
Condition 3 must be fulfilled and conditions 2 and 4 to 10 (inclusive) must be
fulfilled or waived by midnight on the 21st day after the later of the first
closing date of the Offer and the date on which condition 1 is fulfilled (or in
each case such later date as Grantchester and the Panel may agree).
Grantchester shall be under no obligation to waive or treat as satisfied any of
conditions 2 and 4 to 10 (inclusive) by a date earlier than the latest date
specified above for the satisfaction thereof notwithstanding that the other
conditions of the Offer may at such earlier date have been waived or fulfilled
and that there are at such earlier date no circumstances indicating that any of
such conditions may not be capable of fulfilment.
The Offer will lapse if the acquisition of London & Metropolitan is referred to
the Monopolies and Mergers Commission before the later of 3.00 p.m. on the
first closing date of the Offer and the date when the Offer becomes or is
declared unconditional as to acceptances. In such circumstances, the Offer
will cease to be capable of further acceptance and persons accepting the Offer
and Grantchester shall thereupon cease to be bound by acceptances delivered on
or before the date on which the Offer so lapses.
Appendix II
Financial effects of acceptance of the Offer
The following tables show, for illustrative purposes only, the financial
effects of acceptance of the Offer (either entirely for new Grantchester
Shares or on the basis that elections are made in full for the Cash
Alternative) on capital value and income for an accepting holder of 1,000
London & Metropolitan Shares, if the Offer becomes or is declared
unconditional in all respects.
Cash
Notes The Alternative
# #
A. Capital Value
Market value of new Grantchester Shares (i) (ii) 132.59 n/a
Cash consideration (iii) n/a 121.50
_____ _____
Total Value 132.59 121.50
Market Value of 1,000 London & Metropolitan Shares (iv) 97.50 97.50
_____ _____
Increase in capital value 35.09 24.00
===== =====
This represents an increase of 36.0% 24.6%
B. Gross Income
Gross income from cash consideration (iii) n/a 7.25
Gross dividend income on 74 new Grantchester Shares(ii) (v) 0.93 n/a
_____ _____
Total income 0.93 7.25
Gross dividend income on 1,000 London &
Metropolitan Shares (vi) nil nil
_____ _____
Increase in gross income 0.93 7.25
===== =====
Notes
i. The market value of Grantchester Shares is based on the middle market
quotation of 179p on 12 March 1998, the last business day before the date
of this announcement of the Offer, as derived from the quotations provided
by the Official List.
.
ii. For the purposes of this calculation, the number of new Grantchester
Shares issued has not been rounded down to the nearest whole number.
.
iii. The income from the cash consideration under the Offer has been
calculated on the assumption that it is re-invested so as to yield 5.97
per cent. gross per annum, being the gross redemption yield on the FT
Actuaries Medium Coupon Fixed Interest Index for securities up to ten
years maturity as published in the Financial Times dated 12 March 1998,
the last business day before the date of this announcement.
.
iv. The market value of a London & Metropolitan Share is based on the middle
market quotation of 9.75p on 12 March 1998, the last business day before
the announcement of the Offer, as derived from the quotations given by the
Daily Official List.
.
v. The dividend income from a Grantchester Share is based on the final
dividend for the year ended 30 September 1997 of 1.0p (net) per
Grantchester Share paid and recommended, respectively. The final dividend
carried an associated tax credit of 20/80ths of the amount paid. No
interim dividend was paid by Grantchester in respect of the year ended 30
September 1997.
.
vi. London & Metropolitan proposed neither an interim nor a final dividend
for the year ended 31 December 1997.
Other than as mentioned above, no account has been taken of any potential
liability to taxation nor the treatment of fractions in assessing the
financial effects of acceptance.
Appendix III
Definitions
The following definitions apply throughout this announcement, unless the
context requires otherwise:
"Cash Alternative" The proposed alternative under which holders of
London & Metropolitan Shares who validly accept
the Offer may elect to receive cash in lieu of
some or all of the new Grantchester shares to
which they would otherwise become entitled under
the Offer
"City Code" The City Code on Takeovers and Mergers
"Credit Suisse First Boston" Credit Suisse First Boston (Europe) Limited
"Dresdner Kleinwort Benson" Kleinwort Benson Limited
"Enlarged Group" the Grantchester Group as enlarged by the
proposed acquisition of the London &
Metropolitan Group
"Grantchester" or "Group" Grantchester Holdings PLC
"Grantchester Group" or Grantchester and its subsidiary undertakings
"Group"
"Grantchester Shareholders" holders of Grantchester Shares
"Grantchester Shares" ordinary shares of 10p each in Grantchester
"London & Metropolitan" London & Metropolitan PLC
"London & Metropolitan Group" London & Metropolitan and its subsidiary
undertakings
"London & Metropolitan Shares" the existing unconditionally allotted or issued
and fully paid ordinary shares of 5p each in
London & Metropolitan and any further such
shares which are unconditionally allotted or
issued and fully paid while the Offer remains
open for acceptance or, subject to the
provisions of the City Code, such earlier date
as Grantchester may decide
"London Stock Exchange" London Stock Exchange Limited
"London & Metropolitan
Shareholders" holders of London & Metropolitan Shares
"Offer" the recommended offer to be made by Credit
Suisse First Boston on behalf of Grantchester to
acquire all of the London & Metropolitan Shares
subject to the terms and conditions set out in
the Offer Document and form of acceptance
accompanying the Offer Document
"Offer Document" the offer document to be addressed to London &
Metropolitan Shareholders in connection with the
Offer containing the terms and conditions of the
Offer
"Official List" the London Stock Exchange Daily Official List
"Offer Value" the value of the existing issued share capital
of London & Metropolitan based on the Offer
price of 13.26p per London & Metropolitan Share
"Panel" the Panel on Takeovers and Mergers
"UK" or "United Kingdom" the United Kingdom of Great Britain and Northern
Ireland
"United States of America" or the United States of America, its territories and
"United States" possessions, or any state of the United States
and the District of Columbia
"Value Retail" Value Retail PLC
END
OFFBSGBXDXBCCIX
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