Issue of Equity
15 May 2008
THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA OR JAPAN.
BALFOUR BEATTY PLC
UNDERWRITTEN PLACING OF NEW ORDINARY SHARES TO RAISE
APPROXIMATELY £180 MILLION TO DELIVER INCREMENTAL GROWTH
SUMMARY
- Equity placing to raise c.£180 million
- Proceeds to deliver incremental growth through additional bolt-on acquisitions and organic
growth opportunities
- Strong year-end order book of £11.4 billion continues to grow, giving good visibility of future work
- Core UK and US infrastructure businesses have substantial growth momentum
- Further investment and acquisition opportunities in:
- UK regional contracting
- upstream professional services
- infrastructure investment
- our US businesses
- Strong current trading with 2008 performance anticipated to be at the top end of current expectations
'We anticipate that order intake and trading performance will remain strong during the course of 2008 and that we will continue to add to our long-term earning power through investment and acquisition. We anticipate that 2008 performance will be at the top end of current expectations.'
Sir David John, Chairman
AGM Statement today
BALFOUR BEATTY PLC
UNDERWRITTEN PLACING OF NEW ORDINARY SHARES TO RAISE
APPROXIMATELY £180 MILLION TO DELIVER INCREMENTAL GROWTH
INTRODUCTION
Balfour Beatty, the international engineering, construction, services and investment group, today announces that, following the completion of the GMH acquisition, it intends to raise approximately £180 million by the issue of 43,320,411 new ordinary shares (the 'Placing Shares') to be placed with institutional investors (the 'Placing'), representing approximately (but less than) 10% of the Company's issued share capital.
Background to and reasons for the Placing
Financial track record
Balfour Beatty has grown substantially over the last four years, increasing revenue (from continuing operations) by a compound 24% per annum to £7.5 billion (2004: £3.9 billion), adjusted earnings per ordinary share by 17% per annum to 35.0p (2004: 22.1p), and dividends per ordinary share by 20% per annum to 11.5p (2004: 6.6p). During the period, the Group has generated £725 million of cash flow from operations. Total shareholder return over the five-year period to 31 December 2007 was 25% per annum.
Strategy
Balfour Beatty's strategy is to grow both organically and by acquisition in disciplines within or adjacent to its established core skills and principal geographic markets. The Company has identified four principal areas in which to invest:
- Extending UK regional coverage in building and civil engineering;
- Developing a major capability in professional and technical services;
- Taking the Company's private finance skills beyond the UK PPP market; and
- Establishing a strong, multi-disciplinary domestic business outside the UK, particularly in the US.
Acquisitions
On 1 May 2008, Balfour Beatty announced the completion of its acquisition of GMH Military Housing (now Balfour Beatty Communities) for a cash cost of £178 million.
Since January 2007 the Company has spent £570 million, gross, on acquisitions and investments, funded from existing cash resources, internally generated cash flow and the disposal of its interest in Devonport Dockyard for £84 million, including:
- Balfour Beatty Construction US (formerly Centex Construction), a top tier US building company, well placed in growth markets, including the military housing market, for £192 million;
- Cowlin, a leading UK regional contractor, for £53 million;
- Dean & Dyball, a leading UK regional contractor, for £45 million;
- Covion, a fast-growing facilities infrastructure services business for £33 million;
- Exeter Airport, one of the fastest growing regional airports in the UK, for a net £16 million; and
- Blackpool Airport for £14 million.
Future growth opportunities
The Board is confident in the Company's continuing ability to grow. That confidence is based on four key factors:
- A strong order book of £11.4 billion at 31 December 2007 and good visibility of its pipeline of future
work;
- A business mix that favours public rather than private markets;
- Core UK and US infrastructure businesses, and other key businesses, which have substantial growth
momentum; and
- A strategy of expanding investment in four principal areas: in the UK regions, in upstream professional
services, in infrastructure investments, and outside the UK - specifically in the US - designed to ensure
that the Company continues to grow in the long term.
The Company expects to make further bolt-on acquisitions and will consider other acquisitions and infrastructure investment opportunities as they arise.
The purpose of the Placing is to deliver incremental growth, to strengthen the balance sheet of the Balfour Beatty Group in the light of these completed and anticipated acquisitions and to increase the Group's flexibility to pursue its growth strategy. A strong balance sheet also underpins both the Company's ability to win new business and customers, and the increasing surety bonding requirements which will result from the Company's incremental growth and work pipeline in the US.
Current trading of Balfour Beatty
Trading performance in 2008 to date has been strong. A number of major new orders have been secured across our business sectors and geographical markets and our confirmed order book and anticipated work pipeline has grown further from its very satisfactory year-end levels. Further detail is contained in an Interim Management Statement released today, coinciding with the Company's Annual General Meeting.
We anticipate that order intake and trading performance will remain strong during the course of 2008 and that we will continue to add to our long-term earning power through investment and acquisition. We anticipate that 2008 performance will be at the top end of current expectations.
The Placing
The Placing will be effected by way of an accelerated bookbuilding to be managed by JPMorgan Cazenove Limited ('JPMorgan Cazenove') and Hoare Govett Limited ('Hoare Govett' and together with JPMorgan Cazenove, the 'Managers').
The Placing is fully underwritten and subject to the terms and conditions set out in the Appendix. The placing price in respect of the Placing Shares will be decided at the close of the accelerated bookbuilding period.
The issue of 43,320,411 Placing Shares is expected to raise approximately £180 million before expenses and represents an increase of approximately (but less than) 10% in Balfour Beatty's current issued share capital. The book will open with immediate effect. The timing of the closing of the book, pricing and allocations is at the absolute discretion of the Managers.
The Placing Shares will, when issued, be issued credited as fully paid and will rank pari passu in all respects with the existing ordinary shares of Balfour Beatty, including the right to receive all dividends and other distributions declared, made or paid after the date of the issue. Application will be made for the Placing Shares to be admitted to the Official List of the Financial Services Authority, and to be admitted to trading by London Stock Exchange plc on its main market for listed securities.
Enquiries to:
Balfour Beatty: 020 7216 6800
Ian Tyler
Duncan Magrath
Tim Sharp
JPMorgan Cazenove: 020 7588 2828
Robert Constant
Jonathan Wilcox
Richard Perelman
Hoare Govett: 020 7678 8000
Jeremy Thompson
Bob Pringle
Neil Collingridge
- - - - - - - - -
This announcement, including the Appendix (together, 'this Announcement'), is not for distribution, directly or indirectly, in or into the United States, Canada, Australia or Japan or any jurisdiction into which the same would be unlawful. This Announcement is for information purposes only and does not constitute an offer to sell or issue or the solicitation of an offer to buy or acquire any securities to any person in any jurisdiction, including without limitation the United States, Canada, Australia or Japan. The securities referred to in this Announcement have not been and will not be registered under the United States Securities Act of 1933, as amended (the 'Securities Act') and may not be offered or sold within the United States absent registration or an exemption from registration. No public offering of securities will be made in the United Kingdom, the United States or elsewhere.
This Announcement has been issued by and is the sole responsibility of the Company. No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by JPMorgan Cazenove, Hoare Govett or by any of their respective Affiliates or agents as to or in relation to, the accuracy or completeness of this Announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefore is expressly disclaimed.
JPMorgan Cazenove, J.P. Morgan Securities Ltd. and Hoare Govett (the 'Banks'), each of which are authorised and regulated in the UK by the Financial Services Authority, are each acting for the Company in connection with the Placing and no-one else and will not be responsible to anyone other than the Company for providing the protections afforded their respective clients nor for providing advice in relation to the Placing or any other matter referred to in this Announcement.
The distribution of this Announcement and the offering of the Placing Shares in certain jurisdictions may be restricted by law. No action has been taken by the Company or the Banks that would permit an offering of the Placing Shares or possession or distribution of this Announcement or any other offering or publicity material relating to the Placing Shares in any jurisdiction where action for that purpose is required. Persons into whose possession this Announcement comes are required by the Company and the Banks to inform themselves about, and to observe, any such restrictions.
Certain statements in this Announcement are forward-looking statements which are based on the Company's expectations, intentions and projections regarding its future performance, anticipated events or trends and other matters that are not historical facts. These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Given these risks and uncertainties, prospective investors are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date of such statements and, except as required by applicable law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
The price of the Company's ordinary shares, including the Placing Shares, and the income from them may go down as well as up and investors may not get back the full amount invested on disposal of the Company's ordinary shares.
APPENDIX: FURTHER DETAILS OF THE PLACING
THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA OR JAPAN.
IMPORTANT INFORMATION ON THE PLACING FOR INVITED PLACEES ONLY.
MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN ARE FOR INFORMATION PURPOSES ONLY AND ARE DIRECTED ONLY AT: (A) PERSONS IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA WHO ARE QUALIFIED INVESTORS AS DEFINED IN SECTION 86(7) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000, AS AMENDED ('FSMA'), BEING PERSONS FALLING WITHIN THE MEANING OF ARTICLE 2.1(e)(i), (ii) or (iii) OF DIRECTIVE 2003/71/EC (THE 'PROSPECTUS DIRECTIVE') ('QUALIFIED INVESTORS'); (B) IN THE UNITED KINGDOM, QUALIFIED INVESTORS WHO ARE PERSONS WHO (I) HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS AND FALL WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE 'ORDER'); (II) ARE PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) ('HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC') OF THE ORDER; OR (III) ARE PERSONS TO WHOM IT MAY OTHERWISE BE LAWFULLY COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS 'RELEVANT PERSONS'). THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN RELATE IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS APPENDIX DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY.
Persons who are invited to and who choose to participate in the Placing, by making an oral or written offer to subscribe for Placing Shares (the 'Placees'), will be deemed to have read and understood this Announcement, including this Appendix, in its entirety and to be making such offer on the terms and conditions, and to be providing the representations, warranties, acknowledgements, and undertakings contained in this Appendix. In particular each such Placee represents, warrants and acknowledges to the Company and the Banks that:
(a) it is a Relevant Person (as defined above) and undertakes that it will acquire, hold, manage or dispose of any Placing Shares that are allocated to it for the purposes of its business;
(b) in the case of a Relevant Person in a member state of the European Economic Area which has implemented the Prospectus Directive (each a 'Relevant Member State') who acquires any Placing Shares pursuant to the Placing:
(i) it is a Qualified Investor; and
(ii) in the case of any Placing Shares acquired by it as a financial intermediary, as that term is defined
in Article 3(2) of the Prospectus Directive, (A) the Placing Shares acquired by it in the Placing
have not been acquired on behalf of, nor have they been acquired with a view to their offer or
resale to, persons in any Relevant Member States other than Qualified Investors or in
circumstances in which the prior consent of JPMorgan Cazenove Limited ('JPMC') and Hoare
Govett Limited ('Hoare Govett' and, together with JPMC, the 'Managers') has been given to the
offer or resale; or (B) where Placing Shares have been acquired by it on behalf of persons in any
member state of the European Economic Area other than Qualified Investors, the offer of those
Placing Shares is not treated under the Prospectus Directive as having been made to such persons;
and
(c) it is outside the United States or is subscribing for the Placing Shares in an 'offshore
transaction' (within the meaning of Regulation S under the Securities Act).
This Announcement does not constitute an offer to sell or issue or the solicitation of an offer to buy or subscribe for Placing Shares in any jurisdiction in which such offer or solicitation is or may be unlawful. This Announcement and the information contained herein is not for publication or distribution, directly or indirectly, to persons in the United States, Canada, Australia or Japan or in any jurisdiction in which such publication or distribution is unlawful. No public offer of securities of the Company is being made in the United Kingdom, the United States or elsewhere.
In particular, the Placing Shares referred to in this Announcement have not been and will not be registered under the Securities Act and may not be offered or sold within the United States absent registration, or except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. There is no intention to register any portion of the Placing in the United States or to conduct a public offering of the Placing Shares in the United States. The Placing Shares are being offered and sold only outside the United States and in accordance with Regulation S under the Securities Act.
The relevant clearances have not been, and nor will they be, obtained from the securities commission of any province or territory of Canada; no prospectus has been lodged with or registered by, the Australian Securities and Investments Commission or the Japanese Ministry of Finance; and the Placing Shares have not been, and nor will they be, registered under or offered in compliance with the securities laws of any state, province or territory of Canada, Australia or Japan. Accordingly, the Placing Shares may not (unless an exemption under the relevant securities laws is applicable) be offered, sold, resold or delivered, directly or indirectly, in or into the United States, Canada, Australia or Japan or any other jurisdiction outside the United Kingdom.
The Placing Shares have not been approved or disapproved by the US Securities and Exchange Commission, any state securities commission or other regulatory authority in the United States, nor have any of the foregoing authorities passed upon or endorsed the merits of the Placing or the accuracy or adequacy of this Announcement. Any representation to the contrary is unlawful.
Persons (including, without limitation, nominees and trustees) who have a contractual or other legal obligation to forward a copy of this Appendix or this Announcement should seek appropriate advice before taking any action.
Details of the Placing Agreement and the Placing Shares
JPMC, Hoare Govett and J.P. Morgan Securities Ltd. ('JPMSL' and, together with Hoare Govett, the 'Underwriters' and, together with JPMC and Hoare Govett, the 'Banks') have entered into a Placing Agreement (the 'Placing Agreement') with the Company under which the Managers have, on the terms and subject to the conditions set out therein and as agent for and on behalf of the Company, undertaken to use reasonable endeavours to seek to procure Placees for the Placing Shares at the Placing Price, or failing which each of the Underwriters will, severally (and not jointly or jointly and severally), itself subscribe for half of such amount of unplaced Placing Shares, in each case at the Placing Price on the date of Admission (as defined below).
The Placing Shares will, when issued, be issued credited as fully paid and will rank pari passu in all respects with the existing ordinary shares of the Company (the 'Ordinary Shares'), including the right to receive all dividends and other distributions declared, made or paid after the date of issue.
In this Appendix, unless the context otherwise requires, 'Placee' means a person (including individuals, funds or others) on whose behalf a commitment to subscribe for Placing Shares has been given.
Application for listing and admission to trading
Application will be made to the Financial Services Authority (the 'FSA') for admission of the Placing Shares to the Official List of the FSA (the 'Official List') and to London Stock Exchange plc for admission to trading of the Placing Shares on its main market for listed securities (together 'Admission'). It is expected that Admission will become effective on or around 20 May 2008 and that dealings in the Placing Shares will commence at that time.
Participation in, and principal terms of, the Placing
Commencing at 7.00 a.m. on 15 May 2008, each of the Managers will be conducting an accelerated bookbuilding process (the 'Bookbuilding Process') to determine demand for participation in the Placing by the Placees. This Appendix gives details of the terms and conditions of, and the mechanics of participation in, the Placing. No commissions will be paid to Placees or by Placees in respect of any Placing Shares.
The Managers and the Company will be entitled to effect the Placing by such alternative method to the Bookbuilding Process as they may, in their sole discretion, determine.
By participating in the Bookbuilding Process and, if relevant, the Placing, Placees will be deemed to have read and understood this Announcement, including this Appendix, in its entirety and to be participating and making an offer for Placing Shares on the terms and conditions, and to be providing the representations, warranties, acknowledgements and undertakings, contained in this Appendix.
Persons who are eligible to participate in the Bookbuilding Process and the Placing should communicate their bid by telephone to their usual sales contact at JPMC or Hoare Govett. Each of JPMC and Hoare Govett is arranging the Placing severally (and not jointly and severally) as agent of the Company. A further announcement will be made by the Company following the close of the Bookbuilding Process detailing the Placing Price (as described below) at which the Placing Shares are to be placed (the 'Pricing Announcement').
The Managers and their respective Affiliates are entitled to participate as principal in the Bookbuilding Process.
The Bookbuilding Process will establish a single price (the 'Placing Price') payable to the Managers by all Placees.
The timing of the closing of the book, pricing and allocations is at the absolute discretion of the Managers and the Company. Details of the Placing Price will be announced as soon as practicable after the close of the Bookbuilding Process. The Managers and the Company may, at their sole discretion, accept bids that are received after the Bookbuilding Process has closed.
A bid in the Bookbuilding Process will be made on the terms and conditions in this Appendix and will not be capable of variation or revocation after the close of the Bookbuilding Process.
To the fullest extent permissible by law, neither of the Managers nor any of their holding companies, subsidiaries, branches, affiliates or associated undertakings or any subsidiary, branch, affiliate or associated undertaking of any such holding company nor any of their respective directors, officers or employees (each an 'Affiliate') shall have any liability to Placees (or to any other person whether acting on behalf of a Placee or otherwise). In particular, neither the Managers nor any of their Affiliates shall have any liability (including, to the extent permissible by law, any fiduciary duties) in respect of its conduct of the Bookbuilding Process or of such alternative method of effecting the Placing as the Managers and the Company may agree.
Each Placee's allocation will be confirmed to Placees orally by the relevant Manager following the close of the Placing, and a trade confirmation will be dispatched as soon as possible thereafter. The relevant Manager's oral confirmation to such Placee will constitute an irrevocable legally binding commitment upon such person (who will at that point become a Placee) to subscribe for the number of Placing Shares allocated to it at the Placing Price on the terms and conditions set out in this Appendix and in accordance with the Company's Memorandum and Articles of Association.
Each Placee will also have an immediate, separate, irrevocable and binding obligation, owed to the relevant Manager, to pay to it (or as it may direct) in cleared funds an amount equal to the product of the Placing Price and the number of Placing Shares such Placee has agreed to subscribe.
Conditions of the Placing
The Banks' obligations under the Placing Agreement in respect of the Placing Shares are conditional on, inter alia:
(a) Admission occurring no later than 8.00 a.m. (London time) on 20 May 2008 (or such later time/date as the Company and the Banks may agree);
(b) the representations, warranties and undertakings contained in the Placing Agreement being true and accurate and not misleading on the date of the Placing Agreement and at all times before Admission;
(c) the compliance by the Company with all its obligations, and the satisfaction by the Company of all conditions which are to be satisfied by it, under the Placing Agreement or under the terms and conditions of the Placing, which are required to be performed or satisfied on or prior to Admission; and
(d) the Company allotting, subject only to Admission, the Placing Shares in accordance with the Placing Agreement.
If, (i) by the time and/or date specified in the Placing Agreement or (if no time is specified) by 8.00 a.m. on 20 May 2008 (or such later time and/or date as the Company and the Banks may agree) any of the conditions contained in the Placing Agreement in relation to the Placing Shares have not been fulfilled or, where applicable, waived in writing by the Banks, or (ii) the Placing Agreement is terminated in the circumstances specified below, the Placing in relation to the Placing Shares will lapse and the Placee's rights and obligations hereunder in relation to the Placing Shares shall cease and terminate at such time and each Placee agrees that no claim can be made by the Placee in respect thereof.
By participating in the Placing each Placee agrees that its rights and obligations cease and terminate only in the circumstances described above and will not be capable of rescission or termination by it.
Neither the Banks nor the Company shall have any liability to any Placee (or to any other person whether acting on behalf of a Placee or otherwise) in respect of any decision it or they may make as to whether or not to waive or to extend the time and /or date for the satisfaction of any condition to the Placing nor for any decision it or they may make as to the satisfaction of any condition or in respect of the Placing generally and by participating in the Placing each Placee agrees that any such decision is within the absolute discretion of the Banks or the Company. Any extension or waiver by the Banks of the conditions contained in the Placing Agreement will not affect Placees' commitments as set out in this Announcement.
Right to terminate under the Placing Agreement
The Banks may terminate the Placing Agreement at any time up to and immediately prior to Admission by giving notice to the Company in certain circumstances, including, inter alia (i) a breach by the Company of the representations, warranties and undertakings given to the Banks in the Placing Agreement which in the opinion of the Banks (acting in good faith) is material in the context of the Placing, (ii) the failure by the Company to comply with any of its obligations under the Placing Agreement in any respect which in the opinion of the Banks (acting in good faith) is material, (iii) if there has been a material adverse change in, or affecting the operations, properties, condition, trading position, profits or results of operations or general affairs of, the Company's group taken as a whole, or if the Company is the subject of certain rating downgrades with negative implications, or (iv) if there is a force majeure event, in each case the effect of which, in the opinion of the Banks (acting in good faith) is (a) such as would be likely to prejudice the success of the offering and distribution of the Placing Shares, or (b) otherwise be material in the context of the Placing.
By participating in the Placing Placees agree that the exercise by the Banks of any right of termination or other discretion under the Placing Agreement shall be within the absolute discretion of the Banks and that they need not make any reference to Placees and that they shall have no liability to Placees whatsoever in connection with any such exercise.
No Prospectus
No offering document or prospectus has been or will be submitted to be approved by the FSA in relation to the Placing and Placees' commitments will be made solely on the basis of the information contained in this Announcement and any information publicly announced to a Regulatory Information Service by or on behalf of the Company (the 'Publicly Available Information'). Each Placee, by accepting a participation in the Placing, agrees that the content of this Announcement and the Publicly Available Information is exclusively the responsibility of the Company and confirms that it has neither received nor relied on any other information, representation, warranty, or statement made by or on behalf of the Company or the Banks or any other person and neither the Banks nor the Company nor any other person will be liable for any Placee's decision to participate in the Placing based on any other information, representation, warranty or statement which the Placees may have obtained or received. Each Placee acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of the Company in accepting a participation in the Placing.
Settlement
Settlement of transactions in the Placing Shares (ISIN: GB0000961622) following Admission will take place within the CREST system, subject to certain exceptions. Each of the Managers reserves the right to require settlement for and delivery of the Placing Shares to Placees by such other means that it deems necessary if delivery or settlement is not possible or practicable within the CREST system within the timetable set out in this Announcement or would not be consistent with the regulatory requirements in the Placee's jurisdiction.
Each Placee allocated Placing Shares in the Placing will be sent a trade confirmation stating the number of Placing Shares allocated to it at the Placing Price, the aggregate amount owed by such Placee to the relevant Manager and settlement instructions. Each Placee agrees that it will do all things necessary to ensure that delivery and payment is completed in accordance with either the standing CREST or certificated settlement instructions that it has in place with the relevant Manager.
It is expected that settlement will be on 20 May 2008 on a T+3 basis in accordance with the instructions set out in the trade confirmation.
Interest is chargeable daily on payments not received from Placees on the due date in accordance with the arrangements set out above at the rate of two percentage points above LIBOR as determined by the Managers.
Each Placee is deemed to agree that, if it does not comply with these obligations, the relevant Manager may sell any or all of the Placing Shares allocated to that Placee on such Placee's behalf and retain from the proceeds, for the relevant Manager's account and benefit, an amount equal to the aggregate amount owed by the Placee plus any interest due. The relevant Placee will, however, remain liable for any shortfall below the aggregate amount owed by it and may be required to bear any stamp duty or stamp duty reserve tax (together with any interest or penalties) which may arise upon the sale of such Placing Shares on such Placee's behalf.
If Placing Shares are to be delivered to a custodian or settlement agent, Placees should ensure that the trade confirmation is copied and delivered immediately to the relevant person within that organisation.
Insofar as Placing Shares are registered in a Placee's name or that of its nominee or in the name of any person for whom a Placee is contracting as agent or that of a nominee for such person, such Placing Shares should, subject as provided below, be so registered free from any liability to UK stamp duty or stamp duty reserve tax.
Representations and Warranties
By participating in the Bookbuilding Process and, if relevant, the Placing, each Placee (and any person acting on such Placee's behalf) represents, warrants and acknowledges to the Company and the Banks in the following terms:
1. that it has received and read this Announcement, including this Appendix, in its entirety;
2. that no offering document or prospectus has been prepared in connection with the placing of the Placing Shares and that it has not received a prospectus or other offering document in connection therewith;
3. that the Ordinary Shares are listed on the Official List, and the Company is therefore required to publish certain business and financial information in accordance with the rules and practices of the FSA, which includes a description of the nature of the Company's business and the Company's most recent balance sheet and profit and loss account and that is it able to obtain or access such information without undue difficulty;
4. that neither the Banks nor the Company nor any of their Affiliates nor any person acting on behalf of any of them has provided, and will not provide it, with any material regarding the Placing Shares or the Company other than this Announcement; nor has it requested any of the Banks, the Company, any of their Affiliates or any person acting on behalf of any of them to provide it with any such information;
5. that the content of this Announcement is exclusively the responsibility of the Company and that none of the Banks nor any person acting on their behalf has or shall have any liability for any information, representation or statement contained in this Announcement or any information previously published by or on behalf of the Company and will not be liable for any Placee's decision to participate in the Placing based on any information, representation or statement contained in this Announcement or otherwise. Each Placee further represents, warrants and agrees that the only information on which it is entitled to rely and on which such Placee has relied in committing itself to acquire the Placing Shares is contained in this Announcement and any Publicly Available Information, such information being all that it deems necessary to make an investment decision in respect of the Placing Shares and that it has neither received nor relied on any other information given or representations, warranties or statements made by any of the Banks or the Company and none of the Banks nor the Company will be liable for any Placee's decision to accept an invitation to participate in the Placing based on any other information, representation, warranty or statement. Each Placee further acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of the Company in deciding to participate in the Bookbuilding Process and the Placing;
6. that none of the Banks nor any person acting on behalf of it nor any of their respective Affiliates has or shall have any liability for any publicly available or filed information or any representation relating to the Company;
7. that the Placing Shares have not been and will not be registered under the Securities Act or with any state or other jurisdiction of the United States, nor have they been approved or disapproved by the US Securities and Exchange Commission, any state securities commission in the United States or any other United States regulatory authority, and that the Placing Shares may not be resold in the United States unless they are registered under the Securities Act or pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act;
8. unless otherwise specifically agreed with the Managers, that it is, or at the time the Placing Shares are acquired that it will be, the beneficial owner of such Placing Shares, or that the beneficial owner of such Placing Shares is not a resident of Australia, Canada or Japan;
9. that the Placing Shares have not been and will not be registered under the securities legislation of Australia, Canada or Japan and, subject to certain exceptions, may not be offered, sold, taken up, renounced or delivered or transferred, directly or indirectly, within those jurisdictions;
10. that neither it, nor its Affiliates, nor any person acting on its behalf, have engaged or will engage in any 'directed selling efforts' with respect to the Placing Shares;
11. that it has neither received nor relied on any confidential price sensitive information concerning the Company in accepting this invitation to participate in the Placing;
12. if it is a pension fund or investment company, that its purchase of Placing Shares is in full compliance with applicable laws and regulations;
13. that it and any person acting on its behalf falls within Article 19(5) and/or 49(2) of the Order, and undertakes that it will acquire, hold, manage and (if applicable) dispose of any Placing Shares that are allocated to it for the purposes of its business only;
14. that the issue to it, or the person specified by it for registration as holder, of Placing Shares will not give rise to a liability under any of sections 67, 70, 93 or 96 of the Finance Act 1986 (depositary receipts and clearance services) and that the Placing Shares are not being acquired in connection with arrangements to issue depositary receipts or to transfer Placing Shares into a clearance system;
15. that it has complied with its obligations in connection with money laundering and terrorist financing under the Proceeds of Crime Act 2002, the Terrorism Act 2003 and the Money Laundering Regulations 2003 (the 'Regulations') and, if making payment on behalf of a third party, that satisfactory evidence has been obtained and recorded by it to verify the identity of the third party as required by the Regulations;
16. that it has not offered or sold and will not offer or sell any Placing Shares to persons in the United Kingdom prior to Admission except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their business or otherwise in circumstances which have not resulted and which will not result in an offer to the public in the United Kingdom within the meaning of section 85(1) of the FSMA;
17. that it has not offered or sold and will not offer or sell any Placing Shares to persons in the European Economic Area prior to Admission except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their business or otherwise in circumstances which have not resulted in and which will not result in an offer to the public in any member state of the European Economic Area within the meaning of the Prospectus Directive (which includes any relevant implementing measure in any member state);
18. that it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of the FSMA) relating to the Placing Shares in circumstances in which section 21(1) of the FSMA does not require approval of the communication by an authorised person;
19. that it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the Placing Shares in, from or otherwise involving, the United Kingdom;
20. that it and any person acting on its behalf is entitled to acquire the Placing Shares under the laws of all relevant jurisdictions and that it has all necessary capacity and has obtained all necessary consents and authorities to enable it to commit to this participation in the Placing and to perform its obligations in relation thereto (including, without limitation, in the case of any person on whose behalf it is acting, all necessary consents and authorities to agree to the terms set out or referred to in this Announcement) and will honour such obligations;
21. that it (and any person acting on its behalf) will make payment for the Placing Shares allocated to it in accordance with this Announcement on the due time and date set out herein, failing which the relevant Placing Shares may be placed with other subscribers or sold as the relevant Manager may in its sole discretion determine and without liability to such Placee;
22. that none of the Banks, nor any of their respective Affiliates, nor any person acting on behalf of any of them, is making any recommendations to it, advising it regarding the suitability of any transactions it may enter into in connection with the Placees and that participation in the Placing is on the basis that it is not and will not be a client of any of the Banks and that none of the Banks has any duties or responsibilities to it for providing the protections afforded to its respective clients or customers or for providing advice in relation to the Placing nor in respect of any representations, warranties, undertakings or indemnities contained in the Placing Agreement nor for the exercise or performance of any of its respective rights and obligations thereunder including any rights to waive or vary any conditions or exercise any termination right;
23. that the person who it specifies for registration as holder of the Placing Shares will be (i) itself or (ii) its nominee, as the case may be. None of the Banks nor the Company will be responsible for any liability to stamp duty or stamp duty reserve tax resulting from a failure to observe this requirement. Each Placee and any person acting on behalf of such Placee agrees to participate in the Placing and it agrees to indemnify on an after tax basis the Company and the Banks in respect of the same on the basis that the Placing Shares will be allotted to the CREST stock account of the relevant Manager who will hold them as nominee on behalf of such Placee until settlement in accordance with its standing settlement instructions;
24. that any agreements entered into by it pursuant to these terms and conditions shall be governed by and construed in accordance with the laws of England and it submits (on behalf of itself and on behalf of any person on whose behalf it is acting) to the exclusive jurisdiction of the English courts as regards any claim, dispute or matter arising out of any such contract, except that enforcement proceedings in respect of the obligation to make payment for the Placing Shares (together with any interest chargeable thereon) may be taken by the Company or any of the Banks in any jurisdiction in which the relevant Placee is incorporated or in which any of its securities have a quotation on a recognised stock exchange;
25. agrees that the Company, the Banks and their respective Affiliates and others will rely upon the truth and accuracy of the foregoing representations, warranties, acknowledgements and undertakings which are given to the Banks on its own behalf and on behalf of the Company and are irrevocable; and
26. agrees to indemnify on an after tax basis and hold the Company, the Banks and their respective Affiliates harmless from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of the representations, warranties, acknowledgements, agreements and undertakings in this Appendix and further agrees that the provisions of this Appendix shall survive after completion of the Placing.
Nothing in this Announcement shall exclude the liability of any person for fraudulent misrepresentation made by that person.
The agreement to settle a Placee's acquisition (and/or the acquisition of a person for whom such Placee is contracting as agent) free of stamp duty and stamp duty reserve tax depends on the settlement relating only to an acquisition by it and/or such person direct from the Company for the Placing Shares in question. Such agreement assumes that the Placing Shares are not being acquired in connection with arrangements to issue depositary receipts or to transfer the Placing Shares into a clearance service. If there are any such arrangements, or the settlement related to any other dealing in the Placing Shares, stamp duty or stamp duty reserve tax may be payable, for which neither the Company nor any of the Banks will be responsible. If this is the case, each Placee should seek its own advice and notify the Managers accordingly.
Each Placee and any person acting on behalf of the Placee acknowledges that none of the Banks owes any fiduciary or other duties to any Placee in respect of any representations, warranties, undertakings or indemnities in the Placing Agreement.
Each Placee and any person acting on behalf of the Placee acknowledges and agrees that any of the Banks or any of their respective Affiliates may (at its absolute discretion) agree to become a Placee in respect of some (or all) of the Placing Shares.
The distribution of this Announcement and the Placing and/or issue of the Placing Shares in certain jurisdictions may be restricted by law. No action has been taken by the Company or the Banks that would permit an offer of such Placing Shares or possession or distribution of this announcement or any other offering or publicity material relating to such Placing Shares in any jurisdiction where action for that purpose is required. Persons to whose attention this announcement is drawn are required by the Company and the Banks to inform themselves about and to observe any such restrictions.
When a Placee or person acting on behalf of the Placee is dealing with a Manager, any money held in an account with the relevant Manager on behalf of the Placee and/or any person acting on behalf of the Placee will not be treated as client money within the meaning of the rules and regulations of the FSA made under the FSMA. The Placee acknowledges that the money will not be subject to the protections conferred by the client money rules; as a consequence, this money will not be segregated from the relevant Manager's money in accordance with the client money rules and will be used by the relevant Manager in the course of its own business; and the Placee will rank only as a general creditor of the relevant Manager.
All times and dates in this Announcement may be subject to amendment. The relevant Manager shall notify the Placees and any person acting on behalf of the Placees of any changes.
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