Offer for George Gale&Co. Ltd
Fuller,Smith&Turner PLC
08 November 2005
OFFERS FOR GEORGE GALE AND COMPANY LIMITED
FOR IMMEDIATE RELEASE
Not for release, publication or distribution in or into the United States of
America,
Canada, Australia or Japan
8 November 2005
Fuller, Smith & Turner P.L.C. ("Fuller's")
Recommended cash offers for George Gale and Company Limited ("Gales")
Summary
• The boards of directors of Fuller's and Gales are pleased to announce
that they have reached agreement on the terms of recommended cash offers for
the entire issued and to be issued share capital of Gales, to be made by
McQueen on behalf of Fuller's.
• Gales Shareholders who accept the Offers will be entitled to receive
4421 pence for each Gales Ordinary Share (with a Loan Note Alternative),
1160 pence for each Gales 'A' Share (with a Loan Note Alternative) and 1200
pence for each Gales Preference Share. The Offers value the fully diluted
share capital of Gales at approximately £82.7 million and represent an
enterprise value of approximately £91.8 million.
• The Ordinary Offer represents a premium of approximately 101 per cent.
to the most recently traded price of 2200 pence per Gales Ordinary Share on
21 October 2005.
• The 'A' Offer represents a premium of approximately 102 per cent. to the
most recently traded price of 575 pence per Gales 'A' Share on 9 August
2005.
• Fuller's has received irrevocable undertakings to accept (or procure the
acceptance of) the Voting Offers (including from the Directors of Gales) in
respect of (in aggregate) 646,203 Gales Ordinary Shares and 2,730,235 Gales
'A' Shares representing approximately 65.4 per cent. of Gales' issued
ordinary share capital and 85.4 per cent. of Gales' issued 'A' ordinary
share capital respectively, representing approximately 80.6 per cent. of the
voting rights exercisable at a general meeting of Gales.
• The proposed acquisition of Gales is consistent with Fuller's strategy
of seeking acquisitions with an excellent geographic fit and a high quality,
largely freehold estate that provides cost savings through scale and that
will generate value for Fuller's Shareholders.
• The Fuller's Board anticipates that the acquisition of Gales will be
earnings enhancing* in the first full financial year following acquisition.
• Commenting on the Offers, Michael Turner, Chief Executive of Fuller's,
said:
"We are pleased to be announcing the Offers for Gales and look forward to
welcoming the Gales team into Fuller's.
Gales operates an excellent estate of 111 high quality pubs, which can be
brought into the Fuller's estate with little adaptation, and a number of well
respected brands which will enhance our ale portfolio.
The Board has identified Gales as a core acquisition target for Fuller's as it
believes that a combination of these two highly regarded, geographically
complementary regional operators will deliver improved shareholder value.
We are delighted that the holders of a majority of Gales Shares (including the
Gales Board) support fully the transaction. This is an extremely important
transaction for both the Fuller's and Gales businesses, putting the combined
group on a sound footing for future growth."
• Commenting on the Offers, Charles Brims, Chairman of Gales said:
"This is an attractive proposal for Gales Shareholders. Although it is always
sad when a long-established family business decides to sell, I am confident that
this decision is right for Gales Shareholders and right for the business."
This summary should be read in conjunction with the attached announcement.
Except as otherwise defined, defined terms used in this summary have the same
meaning as terms defined in the attached announcement.
The Offer Document will be posted to Gales Shareholders in due course.
* This statement regarding earnings enhancement is not a profit forecast and
should not be interpreted to mean that Fuller's future earnings per share will
necessarily match or exceed the historical published earnings per share of
Fuller's or Gales.
There will be an analysts' briefing at 9.30 a.m. today at the offices of Panmure
Gordon, Moorgate Hall, 155 Moorgate, London, EC2M 6XB.
Enquiries
Fuller's 020 7653 6620 Gales
Michael Turner Charles Brims 07850 503 341
Chief Executive Chairman
Nigel Atkinson 02392 714412
Managing Director
McQueen 020 7667 6861 Close Brothers 020 7655 3100
(Financial adviser to Fuller's) (Financial adviser to Gales)
Jim Fallon Christopher Lewey
George Fleet
Panmure Gordon 020 7459 3600
(Corporate broker to Fuller's)
Tim Linacre
Andrew Godber
Merlin 020 7653 6620
(Public relations adviser to Fuller's)
Paul Downes
Vanessa Maydon
This announcement does not constitute an offer or an invitation to purchase any
securities. The Offers will be made solely by means of the Offer Document and
the acceptance forms accompanying the Offer Document, which will contain the
full terms and conditions of the Offers, including details of how the Offers may
be accepted. Gales Shareholders are advised to read the Offer Document and
accompanying acceptance forms when they are sent to them because they will
contain important information.
McQueen Limited, which is authorised and regulated in the United Kingdom by the
Financial Services Authority, is acting exclusively for Fuller's and no-one else
in connection with the Offers and will not be responsible to anyone other than
Fuller's for providing the protections afforded to clients of McQueen nor for
providing advice in relation to the Offers or in relation to the content of this
announcement.
Close Brothers Corporate Finance Limited, which is authorised and regulated in
the United Kingdom by the Financial Services Authority, is acting exclusively
for Gales and no-one else in connection with the Offers and will not be
responsible to anyone other than Gales for providing the protections afforded to
clients of Close Brothers nor for providing advice in relation to the Offers or
in relation to the content of this announcement.
The Offers, including the Loan Note Alternative, will not be made directly or
indirectly, in or into and will not be capable of acceptance in or from Canada,
Australia or Japan. The Offers including the Loan Notes, will not be made,
directly or indirectly, in or into, or by use of mails or any means or
instrumentality (including, without limitation, facsimile transmission,
telephone or internet) of interstate or foreign commerce of, or any facilities
of a national securities exchange of, the United States and the Offers will not
be capable of acceptance by any such use, means, instrumentality or facility or
from within the United States. Accordingly, copies of this document, the form(s)
of acceptance and also any other document relating to the Offers are not being,
and must not be, mailed or otherwise forwarded, distributed or sent in or into
or from the United States, Canada, Australia or Japan. Custodians, nominees and
trustees should observe these restrictions and should not send or distribute the
document in or into the United States, Canada, Australia or Japan. Doing so may
render invalid any purported acceptance of the Offers.
The Loan Notes have not been, nor will they be, registered under the US
Securities Act and may not be offered, sold, resold, delivered or transferred,
directly or indirectly, in or into the United States.
The Loan Notes have not obtained, and will not obtain the relevant clearances
from the securities commission of any province of Canada and no prospectus has
been lodged with, or registered by, the Australian Securities and Investments
Commission or the Japanese Ministry of Finance. Accordingly, the Loan Notes may
not be offered, sold, resold, delivered or transferred, directly or indirectly,
in or into Canada, Australia or Japan or any other jurisdiction if to do so
would constitute a violation of the relevant laws of, or require registration
thereof in, such jurisdiction or to, or for the account or benefit of, a person
located in Canada, Australia or Japan.
Dealing disclosure requirements
If any person is, or becomes, "interested" (directly or indirectly) in 1% or
more of any class of "relevant securities" of Gales, all "dealings" in any
"relevant securities" of that company (including by means of an option in
respect of, or a derivative referenced to, any such "relevant securities") must
be publicly disclosed by no later than 3.30 pm (London time) on the London
business day following the date of the relevant transaction. This requirement
will continue until the date on which the Offers become, or are declared,
unconditional as to acceptances, lapse or are otherwise withdrawn or on which
the "offer period" otherwise ends. If two or more persons act together pursuant
to an agreement or understanding, whether formal or informal, to acquire an
"interest" in "relevant securities" of Gales, they will be deemed to be a single
person for the purpose of Rule 8.3 of the City Code.
Under the provisions of Rule 8.1 of the City Code, all "dealings" in "relevant
securities" of Gales by Fuller's or Gales, or by any of their respective
"associates", must be disclosed by no later than 12.00 noon (London time) on the
London business day following the date of the relevant transaction.
A disclosure table, giving details of the companies in whose "relevant
securities" "dealings" should be disclosed, and the number of such securities in
issue, can be found on the Takeover Panel's website at www.thetakeoverpanel.org.uk.
"Interests in securities" arise, in summary, when a person has long economic
exposure, whether conditional or absolute, to changes in the price of
securities. In particular, a person will be treated as having an "interest" by
virtue of the ownership or control of securities, or by virtue of any option in
respect of, or derivative referenced to, securities.
Terms in quotation marks are defined in the City Code, which can also be found
on the Panel's website. If you are in any doubt as to whether or not you are
required to disclose a "dealing" under Rule 8, you should consult the Panel.
FOR IMMEDIATE RELEASE
Not for release, publication or distribution in or into the United States of
America, Canada, Australia or Japan
8 November 2005
Fuller, Smith & Turner P.L.C. ("Fuller's")
Recommended cash offers for George Gale and Company Limited ("Gales")
1. Introduction
The boards of directors of Fuller's and Gales are pleased to announce
recommended cash offers, to be made by McQueen on behalf of Fuller's, to acquire
the whole of the issued and to be issued share capital of Gales.
2. Offers
The Offers, which will be subject to the conditions and further terms set out in
Appendix 1 and to be set out in the Offer Document, will be made on the
following basis:
For each Gales Ordinary Share 4421 pence in cash
For each Gales 'A' Share 1160 pence in cash
For each Gales Preference Share 1200 pence in cash
The Offers value the fully diluted share capital of Gales at approximately
£82.7 million and represent an enterprise value of approximately £91.8 million.
The Ordinary Offer represents a premium of approximately 101 per cent. to the
most recently traded price of 2200 pence per Gales Ordinary Share on 21 October
2005. The 'A' Offer represents a premium of approximately 102 per cent. to the
most recently traded price of 575 pence per Gales 'A' Share on 9 August 2005.
The Voting Offers are conditional upon an amendment to the articles of
association of Gales to disapply the pre-emptive provisions that apply in
respect of the 'A' Offer. Such amendment to the articles of association of Gales
must be approved by special resolution at an extraordinary general meeting of
Gales and also be approved by consent in writing of the holders of three-fourths
of the issued 'A' ordinary share capital of Gales or an extraordinary resolution
of Gales 'A' Shareholders at a class meeting. As described below, Gales
Shareholders holding approximately 80.6 per cent. of the voting rights
exercisable at a general meeting of Gales have undertaken to vote in favour of
the required special resolution to amend Gales' articles of association and
Gales 'A' Shareholders holding approximately 85.1 per cent of Gales' issued 'A'
ordinary shares have executed written consents consenting to the required
amendment to Gales' articles of association.
3. Recommendation
The Directors of Gales, who have been so advised by Close Brothers, consider the
terms of the Offers to be fair and reasonable. In providing its advice to the
Directors of Gales, Close Brothers has taken into account the commercial
assessments of the Gales Board.
Accordingly, the Directors of Gales will unanimously recommend Gales
Shareholders to accept the Offers, as they have irrevocably undertaken to do in
respect of their own beneficial holdings of Gales Shares (representing
approximately 7.8 per cent. (76,759 Gales Ordinary Shares) of the issued
ordinary share capital of Gales and 9.3 per cent. (297,475 Gales 'A' Shares) of
the issued 'A' ordinary share capital of Gales). The Directors of Gales will
also unanimously recommend Gales Shareholders to vote in favour of the special
resolution to be proposed at an extraordinary general meeting of Gales approving
the amendment to Gales' articles of association, as they have irrevocably
undertaken to do in respect of their own beneficial holdings which amount in
aggregate to approximately 8.9 per cent. of the voting rights exercisable at a
general meeting of Gales.
4. Irrevocable undertakings
Fuller's has received various irrevocable undertakings to accept (or procure the
acceptance of) the Voting Offers (including from the Directors of Gales).
The undertakings from the Directors of Gales are in respect of their entire
holdings amounting to, in aggregate, 76,759 Gales Ordinary Shares and
297,475 Gales 'A' Shares, representing approximately 7.8 per cent. of Gales'
issued ordinary share capital and 9.3 per cent. of Gales' issued 'A' ordinary
share capital, respectively. The irrevocable undertakings are also given in
respect of Gales Ordinary Shares that may be issued or released to, or acquired
by, the Directors of Gales pursuant to the terms of the Gales Share Schemes.
These undertakings will lapse only if the Offers lapse, are withdrawn or are not
made and will remain binding in the event that higher competing offers for Gales
are made.
In addition to the undertakings from the Directors of Gales, Fuller's has
received irrevocable undertakings to accept the Voting Offers from other Gales
Voting Shareholders in respect of their entire holdings amounting to, in
aggregate, 569,444 Gales Ordinary Shares and 2,432,760 Gales 'A' Shares
representing approximately 57.6 per cent. of Gales' issued ordinary share
capital and 76.1 per cent. of Gales' issued 'A' ordinary share capital,
respectively. These undertakings will lapse only if the Offers lapse, are
withdrawn or are not made and will remain binding in the event that higher
competing offers for Gales are made.
Fuller's has, therefore, received irrevocable undertakings to accept (or procure
the acceptance of) the Voting Offers in respect of, in aggregate, 646,203 Gales
Ordinary Shares and 2,730,235 Gales 'A' Shares representing approximately 65.4
per cent. of Gales' issued ordinary share capital and 85.4 of Gales' issued 'A'
ordinary share capital, respectively, representing approximately 80.6 per cent.
of the voting rights exercisable at a general meeting of Gales.
All irrevocable undertakings given in respect of the 'A' Offer are conditional
upon an amendment to the articles of association of Gales to disapply the
pre-emptive provisions that apply in respect of the 'A' Offer.
All irrevocable undertakings received by Fuller's include an undertaking to vote
on any resolution at a general or class meeting of Gales, the passing of which
is necessary to implement either of the Voting Offers, and an undertaking to
execute any consent the execution of which is necessary to implement either of
the Voting Offers (in each case including any resolution or consent to amend the
articles of association of Gales) in accordance with Fuller's directions.
Gales has also received written consents from Gales 'A' Shareholders holding
approximately 85.1 per cent. of Gales' issued 'A' ordinary share capital in
connection with the proposed amendment of the articles of association of Gales
to disapply the pre-emption rights that apply in respect of the 'A' Offer.
5. The Loan Note Alternative
As an alternative to some or all of the cash consideration of 4421 pence per
Gales Ordinary Share and 1160 pence per Gales 'A' Share which would otherwise be
receivable under the Voting Offers, Gales Voting Shareholders who validly accept
the Voting Offers (other than certain Overseas Shareholders) will be able to
elect to receive Loan Notes to be issued by Fuller's on the following basis:
For every £1 of cash £1 nominal of Loan Notes
consideration under the Voting Offers
The Loan Notes, which will be governed by English law, will be unsecured
obligations of Fuller's, guaranteed as to the principal amount only by The Royal
Bank of Scotland plc, on terms agreed with The Royal Bank of Scotland plc. The
Loan Notes will bear interest from the date of issue to the relevant holder of
Loan Notes payable every six months in arrears (less any tax required by law to
be deducted or withheld therefrom) on 1 June and 1 December each year, with the
first interest payment to be made on 1 June 2006, at a rate per annum calculated
to be 0.75 per cent. below six month LIBOR as determined on the first Business
Day of each such interest period.
The Loan Notes will be redeemable at par (together with accrued interest) at the
option of the holders, in whole or in part, on interest payment dates commencing
on 1 December 2006. Any Loan Notes outstanding on 23 October 2010 will be
redeemed at par (together with any accrued interest) on that date. Fuller's may
elect to redeem any Loan Notes on 1 December 2006 or any subsequent interest
payment date if the aggregate nominal value of the Loan Notes then outstanding
is less than £2 million or, in the reasonable opinion of Fuller's, the interest
payable on the Loan Notes falls, or is expected to fall, to be treated as
non-deductible for tax purposes. The Loan Notes will not be transferable and no
application has been made for them to be listed or dealt in on any stock
exchange.
The Loan Notes will be issued in integral multiples of £1 nominal value.
Fractional entitlements to Loan Notes will be disregarded and will not be issued
to persons accepting the Voting Offers. Fuller's reserves the right not to issue
the Loan Notes where valid elections are received for an aggregate of less than
£2 million in nominal value of Loan Notes by the date the Voting Offers become
unconditional in all respects. If insufficient elections are received, Gales
Voting Shareholders who elected to receive Loan Notes will instead receive cash
consideration in accordance with the terms of the Voting Offers.
The Loan Notes to be issued pursuant to the Voting Offers have not been, and
will not be, registered under the US Securities Act or under the securities laws
of any state or other jurisdiction of the United States, Canada, Australia or
Japan. Accordingly, the Loan Notes may not (unless an exemption under the
relevant securities law is applicable) be offered, sold, resold, delivered or
transferred, directly or indirectly, in or into the United States, Canada,
Australia or Japan (or any other jurisdiction if to do so would constitute a
violation of the relevant laws of, or require registration thereof in, such
jurisdiction) or to, or for the account or benefit, of a person located in the
United States, Canada, Australia or Japan.
The Loan Note Alternative will be conditional on the Voting Offers becoming or
being declared unconditional in all respects and will remain open for so long as
the Voting Offers remain open for acceptance. Full details of the Loan Note
Alternative will be contained in the Offer Document.
6. Information relating to Fuller's
Founded in 1845, Fuller's is a leading regional brewer and pub operator based in
Chiswick, West London. Fuller's aims to be the benchmark in retailing and
brewing delivering quality, service and pride across its two divisions,
'Fuller's Inns' and 'The Fuller's Beer Company'.
Fuller's Inns operates 242 pubs and 8 hotels across the South East, providing a
premium product and offering to customers. The pub estate comprises 120 managed
pubs and 122 pubs let to tenants or lessees. Of the estate, 203 pubs are
freehold.
Fuller's brewing division, 'The Fuller's Beer Company', brews some of the
country's leading ales from its brewery in Chiswick, including 'London Pride'
and 'ESB'.
In the year ended 2 April 2005, Fuller's reported turnover of £147.5 million
(2004: £140.3 million), operating profit before exceptional items of £19.7
million (2004: £18.8 million) and profit before taxation and exceptional items
of £17.8 million (2004: £16.9 million). As at 2 April 2005 Fuller's had net
assets of £166.3 million (2004: £159.8 million).
As announced on 26 July 2005, trading for the first quarter of the current
financial year was in line with expectations. Further details on performance
during the first half of the current financial year will be provided in Fuller's
interim trading statement which will be released on 25 November 2005.
7. Information relating to Gales
Gales, founded in 1847, is based in Horndean in Hampshire and operates 111 pubs,
of which 69 are tenanted and 42 are managed. The estate comprises 97 freehold
pubs and 2 pubs held on a long-leasehold basis with a nominal rent. Of the
remainder of the estate, 7 are leasehold and 5 are managed by Gales on behalf of
Premier Pubs Estate Limited, a company established under an Enterprise
Investment Scheme. Gales' pubs are high quality and have a strong food offering.
Gales' pub estate is located throughout the South and South East of England. In
addition, Gales operates its own brewery, located on a freehold site in
Horndean. Gales' ale brands include 'HSB', 'Gales' and 'Butser'.
Gales' executive management is led by Nigel Atkinson, aged 51, who has been
Managing Director since 1991, during which time he has contributed to the growth
and development of Gales' business.
In the year ended 29 January 2005, Gales reported profit before taxation of £4.3
million (2004: £4.1 million) on turnover of £39.4 million (2004: £37.6 million)
and generated operating profit before exceptional items of £5.0 million (2004:
£4.7 million). As at 29 January 2005, Gales had gross assets of £45.2 million
(2004: £44.1 million) and net assets of £26.6 million (2004: £24.3 million).
Since the year ended 29 January 2005, Gales has performed well.
8. Background to and reasons for the Offers
Fuller's strategy is to focus on a premium retail offer, with a range of high
quality products, supported by an investment programme designed to enhance its
existing retail portfolio and carefully selected acquisitions. In line with this
strategy:
• to achieve a premium offer to its customers, Fuller's has invested
heavily in both the Chiswick brewery and its pub estate;
• the Fuller's brand is associated with quality which is critical to being
able to sell premium ale as a differentiated offering; and
• it has a medium term strategy to grow the estate to approximately 500
pubs.
In addition, the UK pub market is becoming increasingly competitive with
continuing cost pressures facing pub operators. Nonetheless, the Directors of
Fuller's believe that the implementation of the strategy will lead to increasing
returns for the benefit of Fuller's Shareholders.
Reasons for the Offers
Fuller's has consistently reviewed various companies with a view to a possible
acquisition and the Board has identified Gales as an acquisition target for
Fuller's as it believes that a combination of two highly regarded regional
operators will deliver greater shareholder value.
In particular, the Board considers Gales has the following key attractions for
Fuller's:
• it is a family-owned company with a strong history and tradition and a
reputation for quality;
• as a regional operator, it has a similar operating model to Fuller's and
can be combined into the Fuller's model with little adaptation;
• it has a high quality and predominantly freehold estate;
• it has a number of well respected ale brands, including 'HSB' which will
complement Fuller's existing brand portfolio;
• geographically, it is complementary to Fuller's existing footprint; and
• its customer profile is similar.
The proposed acquisition of Gales is consistent with Fuller's strategy of
seeking acquisitions with an excellent geographic fit and a high quality,
largely freehold estate that provides cost savings through scale and that will
generate value for Fuller's Shareholders. Further, the strong family-led
ownership culture is consistent with Fuller's own heritage.
Following the Offers being declared wholly unconditional, Fuller's will conduct
a review of Gales' activities.
The Fuller's Board anticipates that the acquisition of Gales will:
• generate annualised cost savings of approximately £3 million through the
elimination of duplicated functions, operational efficiencies and the
benefits of scale*; and
• be earnings enhancing in the first full financial year following
acquisition** .
9. Background to and reasons for recommending the Offers
Gales has increased profitability substantially over a number of years and has
continued to trade well in the current year to date. Nevertheless, the Gales
Board has, for some time, been aware of the increasing need for scale in order
to compete effectively in the operation of managed and tenanted pubs. This view
is based, among other things, on the effects of increasing costs under minimum
wage and health and safety legislation, as well as the benefits of purchasing
power and other economies of scale which are available to larger operators.
Furthermore, the ability of Gales to acquire significant numbers of sites has
been restricted, particularly as a result of the higher valuations often placed
upon pubs by a number of larger operators which have access to economies of
scale and/or a lower cost of capital.
The growth in profitability of Gales has been driven principally by operational
improvements, as well as an enhancement in the overall quality of the estate
through selective pub acquisitions and disposals. These operational improvements
have included the sale of most of the Company's unlicensed property portfolio, a
rationalisation of costs at the Horndean brewery site and a drive to increase
operational efficiencies in the pub estate, including transfers of managed sites
to tenancies. While there remains further scope to improve operational
efficiency, the Gales Board is of the view that the opportunities for future
growth in shareholder value as an independent operator are now lower than was
previously the case.
Against this background, the Gales Board recently received a proposal from
Fuller's which has resulted in the Offers. The Gales Board is recommending the
Offers to Gales Shareholders as it believes that they fairly value Gales
compared with the prospects of continuing as an independent operator.
The terms of the Offers have been agreed after negotiations with Fuller's and
represent a multiple of approximately 14.2 times EBITDA in the year ended 31
January 2005, which the Gales Board believes exceeds that of recent comparable
transactions. In addition, the valuation of pubs and pub operators is currently
at a very high, if not unprecedented, level. Given the Gales Board's views on
the future growth prospects of Gales as an independent operator, combined with
increasing signs of a general decline in consumer confidence and the likely
future introduction of a smoking ban in England, the Gales Board believes that
the Offers fairly value Gales and its prospects and is pleased to recommend the
Offers to Gales Shareholders.
10. Financing the Offers
Fuller's has arranged new debt facilities with Barclays Capital, BNP Paribas and
The Royal Bank of Scotland plc in order to finance the aggregate of the cash
consideration payable under the Offers, the refinancing of Gales' debt and
certain of Fuller's existing facilities and to provide adequate working capital
for the Enlarged Group. Further information on the financing of the Offers will
be set out in the Offer Document.
11. Management and employees
Fuller's confirms that, in the event of the Offers becoming or being declared
unconditional in all respects, the Enlarged Group will be responsible for the
pension obligations of Gales and the existing employment rights, including
pension rights, of the employees of Gales will be fully safeguarded.
The non-executive Directors of Gales have agreed to resign from the Gales Board
upon the Offers becoming or being declared unconditional in all respects.
12. Gales Share Schemes
The Ordinary Offer will extend to any Gales Ordinary Shares which are
unconditionally allotted or issued before the date on which the Ordinary Offer
closes as a result of the exercise of options or as a result of the release of
an award of Gales Ordinary Shares made under the Gales Share Schemes in
accordance with and pursuant to the rules of the Gales Share Schemes.
To the extent that such options are not exercised or awards are not released and
if the Ordinary Offer becomes or is declared unconditional in all respects,
Fuller's intends to make appropriate proposals to participants in the Gales
Share Schemes.
13. Compulsory acquisition
If Fuller's receives acceptances under any of the Offers in respect of, and/or
otherwise acquires, 90 per cent. or more of the Gales Shares to which that
Offer relates and that Offer becomes or is declared unconditional in all
respects, Fuller's intends to exercise its rights pursuant to the provisions of
sections 428 to 430F (inclusive) of the Act to acquire compulsorily the
remaining Gales Shares to which that Offer relates.
14. Disclosure of interests in Gales
Save for the 646,203 Gales Ordinary Shares and the 2,730,235 Gales 'A' Shares in
respect of which Fuller's has received irrevocable undertakings to accept (or
procure the acceptance of) the Voting Offers, neither Fuller's nor any of the
Directors of Fuller's nor, so far as Fuller's is aware, any person acting in
concert with Fuller's, has any interest in or right to subscribe for any Gales
Shares or has any short position (including any short positions under a
derivative, any agreement to sell or any delivery obligation or right to require
another person to take delivery) in Gales Shares or has borrowed or lent any
Gales Shares (save for any borrowed shares which have either been on-lent or
sold).
15. Shareholder approval
Given the size of the proposed acquisition, and in order to effect the Offers,
it will be necessary for Fuller's Shareholders to approve the making of the
Offers. The necessary resolution will be put to an extraordinary general
meeting of Fuller's. The Directors of Fuller's intend unanimously to recommend
Fuller's Shareholders to vote in favour of any such resolution as they intend to
do in respect of their own beneficial holdings amounting in aggregate to
approximately 24.5% of the issued share capital carrying voting rights at
general meeting. Further details of this meeting will be sent to Fuller's
shareholders in due course.
16. General
The Offer Document will be posted to Gales Shareholders in due course.
The Offers will be subject to the conditions set out in Appendix 1.
The bases and sources of certain financial information contained in this
announcement are set out in Appendix 2 . Certain terms used in this
announcement are defined in Appendix 3 .
* This statement of estimated cost savings relates to future actions and
circumstances which, by their nature, involve risks, uncertainties and other
factors. Accordingly, the cost savings referred to may not be achieved, or
those achieved could be materially different from those estimated.
** This statement regarding earnings enhancement is not a profit forecast and
should not be interpreted to mean that Fuller's future earnings per share will
necessarily match or exceed the historical published earnings per share of
Fuller's or Gales.
Enquiries
Fuller's 020 7653 6620 Gales
Michael Turner Charles Brims 07850 503 341
Chief Executive Chairman
Nigel Atkinson 02392 714412
Managing Director
McQueen 020 7667 6861 Close Brothers 020 7655 3100
(Financial adviser to Fuller's) (Financial adviser to Gales)
Jim Fallon Christopher Lewey
George Fleet
Panmure Gordon 020 7459 3600
(Corporate broker to Fuller's)
Tim Linacre
Andrew Godber
Merlin 020 7653 6620
(Public relations adviser to Fuller's)
Paul Downes
Vanessa Maydon
This announcement does not constitute an offer or an invitation to purchase any
securities. The Offers will be made solely by means of the Offer Document and
the acceptance forms accompanying the Offer Document, which will contain the
full terms and conditions of the Offers, including details of how the Offers may
be accepted Gales Shareholders are advised to read the Offer Document and
accompanying acceptance forms when they are sent to them because they will
contain important information.
McQueen, which is authorised and regulated in the United Kingdom by the
Financial Services Authority, is acting exclusively for Fuller's and no-one else
in connection with the Offers and will not be responsible to anyone other than
Fuller's for providing the protections afforded to clients of McQueen nor for
providing advice in relation to the Offers or in relation to the content of this
announcement.
Close Brothers, which is authorised and regulated in the United Kingdom by the
Financial Services Authority, is acting exclusively for Gales and no-one else in
connection with the Offers and will not be responsible to anyone other than
Gales for providing the protections afforded to clients of Close Brothers nor
for providing advice in relation to the Offers.
The Offers, including the Loan Note Alternative, will not be made, directly or
indirectly, in or into and will not be capable of acceptance in or from Canada,
Australia or Japan. In addition it is not currently intended that the Offers
will be made, directly or indirectly, in or into, or by use of mails or any
means or instrumentality (including, without limitation, facsimile transmission,
telephone or internet) of interstate or foreign commerce of, or any facilities
of a national securities exchange of, the United States and it is not currently
intended that the Offers will be capable of acceptance by any such use, means,
instrumentality or facility or from within the United States. Accordingly,
copies of this announcement are not being, and must not be, mailed or otherwise
forwarded, distributed or sent in or into or from the United States, Canada,
Australia or Japan. Custodians, nominees and trustees should observe these
restrictions and should not send or distribute the document in or into the
United States, Canada, Australia or Japan.
The Loan Notes to be issued in connection with the Offers have not been, nor
will they be, registered under the US Securities Act nor under any laws of any
jurisdiction of the United States, the relevant clearances have not been, and
will not be, obtained from the securities commission of any province of Canada
and no prospectus has been lodged with, or registered by, the Australian
Securities and Investments Commission or the Japanese Ministry of Finance.
Accordingly, the Loan Notes may not (unless an exemption under the relevant
securities laws is applicable) be offered, sold, resold, delivered or
transferred, directly or indirectly, in or into the United States, Canada,
Australia or Japan or any other jurisdiction if to do so would constitute a
violation of the relevant laws of, or require registration thereof in, such
jurisdiction or to, or for the account or benefit of, a person located in the
United States, Canada, Australia or Japan.
Dealing disclosure requirements
The City Code applies to the Offers. Under the provisions of Rule 8.3 of the
City Code, any person who, alone or acting together with any other persons(s)
pursuant to an agreement or understanding (whether formal or informal) to
acquire or control relevant securities of Gales, owns or controls, or becomes
the owner or controller, directly or indirectly, of one per cent. or more of
any class of securities of Gales is required to disclose, by not later than
12.00 noon (London time) on the London business day following the date of the
relevant transaction, dealings in such securities of Gales (or in any option in
respect of, or derivative referenced to, any such securities) during the period
to the date on which the Offers become or is declared unconditional as to
acceptances or lapses or is otherwise withdrawn.
Under the provisions of Rule 8.1 of the City Code, all dealings in relevant
securities of Gales by Fuller's or Gales, or by any of their respective "
associates" (within the meaning of the City Code) must also be disclosed.
If you are in any doubt as to the application of Rule 8 to you, please contact
an independent financial adviser authorised under the Financial Services and
Markets Act 2000, consult the Panel's website at www.thetakeoverpanel.org.uk or
contact the Panel on telephone number +44 20 7638 0129; fax +44 20 7236 7013.
Appendix 1
CONDITIONS AND CERTAIN FURTHER TERMS
OF THE OFFERS
1. CONDITIONS OF THE VOTING OFFERS
The Ordinary Offer and the 'A' Offer will be subject to the following
conditions:
(a) valid acceptances being received (and not, where permitted,
withdrawn) by not later than 3.00 p.m. on the first closing date of the Offers
(or such later time(s) and/or date(s) as Fuller's may, subject to the rules of
the City Code, decide) in respect of:
(i) not less than 90 per cent. (or
such lower percentage as Fuller's may decide) in nominal value of the Gales
Ordinary Shares to which the Ordinary Offer relates; and
(ii) not less than 90 per cent. (or such
lower percentage as Fuller's may decide) in nominal value of the Gales 'A'
Shares to which the 'A' Offer relates,
provided that this condition will not be satisfied unless Fuller's and/or any
Associate shall have acquired or agreed to acquire (whether pursuant to the
Voting Offers or otherwise) Gales Shares carrying in aggregate more than 50 per
cent. of the voting rights then normally exercisable at a general meeting of
Gales, including for this purpose (except to the extent otherwise agreed by the
Panel) any such voting rights attaching to any Gales Shares that are
unconditionally allotted or issued before the Voting Offers become or are
declared unconditional as to acceptances, whether pursuant to the exercise of
any outstanding subscription or conversion rights or otherwise; and for this
purpose:
(i) any reference to shares to which an
offer relates shall be construed in accordance with sections 428-430F of the
Act;
(ii) Gales Shares which have been
unconditionally allotted but not issued shall be deemed to carry the voting
rights which they will carry upon issue; and
(iii) valid acceptances shall be deemed to
have been received in respect of Gales Shares which are treated for the purposes
of section 429(8) of the Act as having been acquired or contracted to be
acquired by Fuller's by virtue of acceptances of the Voting Offers;
(b) any resolution or resolutions of Fuller's Shareholders
required to approve and implement the Voting Offers and the acquisition of Gales
Shares by Fuller's being duly passed at an extraordinary general meeting of
Fuller's (or at any adjournment of that meeting);
(c) any resolution or resolutions of Gales Shareholders, or any
class thereof, and any written consent or consents of Gales Shareholders, or any
class thereof, required to approve and implement an amendment to the articles of
association of Gales to disapply the pre-emptive provisions that apply in
respect of the 'A' Offer being duly passed at an extraordinary general meeting
of Gales (or at any adjournment of that meeting) or being duly executed by the
requisite number of Gales Shareholders, as the case may be;
(d) no Third Party having intervened (as defined below) and there
not continuing to be outstanding any statute, regulation or order of any Third
Party in each case which would or might reasonably be expected to:
(i) make the Voting Offers, their
implementation or the acquisition or proposed acquisition by Fuller's or any
member of the Fuller's Group of any shares or other securities in, or control or
management of, Gales or any member of the Gales Group void, illegal or
unenforceable in any jurisdiction, or otherwise directly or indirectly restrain,
prevent, prohibit, restrict or delay the same or impose additional conditions or
obligations with respect to the Voting Offers or such acquisition, or otherwise
impede, challenge or interfere with the Voting Offers or such acquisition, or
require amendment to the terms of the Offers or the acquisition or proposed
acquisition of any Gales Shares or the acquisition of control or management of
Gales or the Gales Group by Fuller's or any member of the Fuller's Group and
which, in each case, has an effect that is material in respect of Gales;
(ii) materially limit or delay, or impose
any material limitations on, the ability of any member of the Fuller's Group to
acquire or to hold or to exercise effectively, directly or indirectly, all or
any rights of ownership in respect of shares or other securities in, or to
exercise voting or management control over, any member of the Gales Group;
(iii) require or prevent the divestiture
by Fuller's of any shares or other securities in Gales;
(iv) require, prevent or delay the
divestiture or alter the terms envisaged for any proposed divestiture by any
member of the Fuller's Group or by any member of the Gales Group of all or a
material portion of their respective businesses, assets or properties or limit
the ability of any of them to conduct a material proportion of their respective
businesses or to own or control any of their respective material assets or
properties or any part thereof;
(v) except pursuant to Part XIIIA of the
Act, require any member of the Fuller's Group or of the Gales Group to acquire,
or to offer to acquire, any shares or other securities (or the equivalent) in
any member of either group owned by any third party;
(vi) impose any material limitation on the
ability of any member of the Fuller's Group or of the Gales Group to conduct or
integrate or co-ordinate its business, or any part of it, with the businesses or
any part of the businesses of any other member of the Fuller's Group or of the
Gales Group;
(vii) result in any member of the Gales
Group or the Fuller's Group ceasing to be able to carry on business under any
name under which it presently does so; or
(viii) otherwise materially and adversely
affect any or all of the business, assets, profits, financial or trading
position or prospects of any member of the Gales Group or of the Fuller's Group,
the effect of which is material in the context of the relevant Group as a whole,
and all applicable waiting and other time periods during which any Third Party
could intervene under the laws of any relevant jurisdiction having expired,
lapsed or been terminated;
(e) all notifications and filings which are necessary or are
reasonably considered appropriate by Fuller's in any case to an extent which is
material in respect of Gales having been made, all appropriate waiting and other
time periods (including any extensions of such waiting and other time periods)
under any applicable legislation or regulation of any relevant jurisdiction
having expired, lapsed or been terminated (as appropriate) and all statutory or
regulatory obligations in any relevant jurisdiction having been complied with in
each case in connection with the Voting Offers or the acquisition or proposed
acquisition of any shares or other securities in, or control or management of,
Gales or any other member of the Gales Group by any member of the Fuller's Group
or the carrying on by any member of the Gales Group of its business;
(f) all Authorisations which are necessary in any relevant
jurisdiction for or in respect of the Voting Offers or the acquisition or
proposed acquisition of any shares or other securities in, or control or
management of, Gales or any other member of the Gales Group by any member of the
Fuller's Group or the carrying on by any member of the Gales Group of its
business having been obtained, in terms and in a form reasonably satisfactory to
Fuller's, from all appropriate Third Parties or from any persons or bodies with
whom any member of the Gales Group has entered into contractual arrangements in
each case where the absence of such Authorisation would have a material adverse
effect on Gales and all such Authorisations remaining in full force and effect
and there being no notice or intimation of any intention to revoke, suspend,
restrict, modify or not to renew any of the same;
(g) since 29 January 2005 and except as Disclosed, there being no
provision of any arrangement, agreement, licence, permit, franchise or other
instrument to which any member of the Gales Group is a party, or by or to which
any such member or any of its assets is or are or may be bound, entitled or
subject or any circumstance, which, in each case as a consequence of the Voting
Offers or the acquisition or proposed acquisition of any shares or other
securities in, or control of, Gales or any other member of the Gales Group by
any member of the Fuller's Group or otherwise, could or might reasonably be
expected to result in, (in any case to an extent which is or would be material
to Gales):
(i) any monies borrowed by or any other
indebtedness or liabilities (actual or contingent) of, or any grant available
to, any member of the Gales Group being or becoming repayable or capable of
being declared repayable immediately or prior to its stated repayment date or
the ability of any member of the Gales Group to borrow monies or incur any
indebtedness being withdrawn or inhibited or becoming capable of being
withdrawn;
(ii) the creation or enforcement of any
mortgage, charge or other security interest over the whole or any part of the
business, property, assets or interests of any member of the Gales Group or any
such mortgage, charge or other security interest (wherever created, arising or
having arisen) becoming enforceable;
(iii) any such arrangement, agreement,
licence, permit, franchise or instrument, or the rights, liabilities,
obligations or interests of any member of the Gales Group thereunder, being, or
becoming capable of being, terminated or adversely modified or affected or any
adverse action being taken or any obligation or liability arising thereunder;
(iv) any asset or interest of any member of
the Gales Group being or falling to be disposed of or ceasing to be available to
any member of the Gales Group or any right arising under which any such asset or
interest could be required to be disposed of or could cease to be available to
any member of the Gales Group otherwise than in the ordinary course of business;
(v) any member of the Gales Group ceasing
to be able to carry on business under any name under which it presently does so;
(vi) the creation of material liabilities
(actual or contingent) by any member of the Gales Group other than in the
ordinary course of business;
(vii) the rights, liabilities, obligations
or interests of any member of the Gales Group under any such arrangement,
agreement, licence, permit, franchise or other instrument or the interests or
business of any such member in or with any other person, firm, company or body
(or any arrangement or arrangements relating to any such interests or business)
being terminated or adversely modified or affected; or
(viii) the financial or trading position or
the prospects or the value of any member of the Gales Group being prejudiced or
adversely affected,
and no event having occurred which, under any provision of any such arrangement,
agreement, licence, permit or other instrument, could result in or would be
reasonably likely to result in any of the events or circumstances which are
referred to in paragraphs (i) to (viii) of this condition (g) in any case to an
extent which is or would be material to Gales;
(h) since 29 January 2005 and except as Disclosed no member of
the Gales Group having:
(i) issued or agreed to issue, or
authorised the issue of, additional shares of any class, or securities
convertible into or exchangeable for, or rights, warrants or options to
subscribe for or acquire, any such shares or convertible securities or
transferred or sold any shares out of treasury, other than as between Gales and
wholly-owned subsidiaries of Gales and any shares issued upon the exercise or
release of any awards granted under any of the Gales Share Schemes;
(ii) purchased or redeemed or repaid any
of its own shares or other securities or reduced or made any other change to any
part of its share capital to an extent which is material in respect of Gales;
(iii) recommended, declared, paid or made
any dividend or other distribution whether payable in cash or otherwise or made
any bonus issue (other than to Gales or a wholly-owned subsidiary of Gales);
(iv) made or authorised any change in its
loan capital;
(v) (other than any acquisition or
disposal in the ordinary course of business) merged with, demerged or acquired
any body corporate, partnership or business or acquired or disposed of or
transferred, mortgaged, charged or created any security interest over any assets
or any right, title or interest in any assets (including shares in any
undertaking and trade investments) or authorised the same in each case to an
extent which is material in respect of Gales;
(vi) issued or authorised the issue of, or
made any change in or to, any debentures or (except in the ordinary course of
business) incurred or increased any indebtedness or liability (actual or
contingent) which in any case is material in respect of Gales;
(vii) entered into, varied, or authorised
any agreement, transaction, arrangement or commitment (whether in respect of
capital expenditure or otherwise) which is other than in the ordinary course of
business which:
(A) is of a long term, onerous or unusual nature or magnitude or
which is reasonably likely to or could involve an obligation of such nature or
magnitude; or
(B) is reasonably likely to or could restrict the business of any
member of the Gales Group; or
(C) is other than in the ordinary course of business,
and which in any such case is material in respect of Gales;
(viii) entered into, implemented, effected or
authorised any merger, demerger, reconstruction, amalgamation, scheme,
commitment or other transaction or arrangement in respect of itself otherwise
than in the ordinary course of business which in any case is material in respect
of Gales;
(ix) entered into or varied the terms of,
any contract, agreement or arrangement with any of the directors or senior
executives of Gales which in any case is material in respect of Gales;
(x) taken any corporate action or had any
legal proceedings instituted or threatened against it or petition presented or
order made for its winding-up (voluntarily or otherwise), dissolution or
reorganisation or for the appointment of a receiver, administrator,
administrative receiver, trustee or similar officer of all or any material part
of its assets and revenues or any analogous proceedings in any jurisdiction or
appointed any analogous person in any jurisdiction which in any case is material
in respect of Gales;
(xi) been unable, or 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 which
in any case is material in respect of Gales;
(xii) waived or compromised any claim,
otherwise than in the ordinary course of business which in any case is material
in respect of Gales;
(xiii) except as provided in condition (c)
above, made any alteration to its memorandum or articles of association which is
material in the context of the Offers;
(xiv) made or agreed or consented to:
(A) any change:
(I) to the terms of the trust deeds constituting the pension scheme(s)
established for its directors, employees or their dependants; or
(II) the benefits which accrue or to the pensions which are payable
thereunder; or
(III) the basis on which qualification for, or accrual or entitlement to
such benefits or pensions are calculated or determined; or
(IV) the basis upon which the liabilities (including pensions) of such pension
schemes are funded or made,
in each case, which has an effect that is material in respect of Gales; or
(B) any change to the trustees of the pension scheme(s) including
the appointment of a trust corporation;
(xv) proposed, agreed to provide or modified
the terms of any share option scheme, incentive scheme or other benefit relating
to the employment or termination of employment of any person employed by Gales
in a manner which is material in respect of Gales; or
(xvi) entered into any agreement, commitment
or arrangement or passed any resolution or made any offer (which remains open
for acceptance) or proposed or announced any intention with respect to any of
the transactions, matters or events referred to in this condition (h);
(i) since 29 January 2005 and except as Disclosed:
(i) there having been no adverse change
or deterioration in the business, assets, financial or trading position or
profit or prospects of the Gales Group which in any case is material in respect
of Gales;
(ii) no contingent or other liability of
any member of the Gales Group having arisen or become apparent or increased
which in any case is material in respect of Gales;
(iii) no litigation, arbitration
proceedings, prosecution or other legal proceedings to which the Gales Group is
or may become a party (whether as plaintiff, defendant or otherwise) having been
threatened, announced, implemented or instituted by or against or remaining
outstanding against or in respect of Gales which in any such case is material in
respect of Gales; and
(iv) (other than as a result of the Offers)
no enquiry or investigation by, or complaint or reference to, any Third Party
having been threatened, announced, implemented, instituted by or against or
remaining outstanding against or in respect of Gales which in any case is
material in respect of Gales;
(j) Fuller's not having discovered:
(i) that any financial or business or
other information concerning the Gales Group disclosed at any time by or on
behalf of any member of the Gales Group, whether publicly, to any member of the
Fuller's Group or to any of its advisers or otherwise, is misleading or contains
any misrepresentation of fact or omits to state a fact necessary to make any
information contained therein not misleading and which was not subsequently
corrected before the date hereof by disclosure either publicly or otherwise in
writing to Fuller's or its professional advisers and to an extent which in any
case is material in respect of Gales;
(ii) that any member of the Gales Group
is subject to any liability (actual or contingent) which is not disclosed in
Gales' annual report and accounts for the financial year ended 29 January 2005
which in any case is material in respect of Gales; or
(iii) any information which affects the
import of any information disclosed at any time by or on behalf of any member of
the Gales Group to an extent which in any case is material in respect of Gales.
For the purpose of these conditions:
(a) "Third Party" means any central bank, government, government
department or governmental, quasi-governmental, supranational, statutory,
regulatory or investigative body, authority (including any national anti-trust
or merger control authority), court, trade agency, association, institution or
professional or environmental body or any other person or body whatsoever in any
relevant jurisdiction;
(b) a Third Party shall be regarded as having "intervened" if it
has decided to take, institute, implement or threaten any action, proceeding,
suit, investigation, enquiry or reference or made, proposed or enacted any
statute, regulation, decision or order or taken any measures or other steps or
required any action to be taken or information to be provided or otherwise
having done anything and "intervene" shall be construed accordingly;
(c) "Authorisations" means authorisations, orders, grants,
recognitions, determinations, certificates, confirmations, consents, licences,
clearances, provisions and approvals; and
(d) "Disclosed" means as disclosed in Gales' annual report and
accounts for the year ended 29 January 2005 or otherwise fairly disclosed in
writing to Fuller's or its professional advisers by or on behalf of Gales prior
to the date hereof.
Subject to the requirements of the Panel, Fuller's reserves the right to waive
all or any of the above conditions, in whole or in part, except conditions 1(a),
1(b) and 1(c).
Conditions 1(b) to 1(j) (inclusive) must be fulfilled, be determined by Fuller's
to be or remain satisfied or (if capable of waiver) be waived by midnight on the
21st day after the later of the first closing date of the Offers and the date on
which condition 1(a) is fulfilled (or in each case such later date as Fuller's
may, with the consent of the Panel, decide), failing which the Voting Offers
will lapse. Fuller's shall be under no obligation to waive (if capable of
waiver), to determine to be or remain satisfied or to treat as fulfilled any of
conditions 1(b) to 1(j) (inclusive) by a date earlier than the latest date
specified above for the fulfilment of that condition, notwithstanding that the
other conditions of the Offers may at such earlier date have been waived or
fulfilled and that there are, at such earlier date, no circumstances indicating
that any condition may not be capable of fulfilment.
Except with the Panel's consent, Fuller's will not invoke any of the above
conditions (except condition 1(a), 1(b) or 1(c)) so as to cause the Voting
Offers not to proceed, to lapse or to be withdrawn unless the circumstances
which give rise to the right to invoke the relevant condition are of material
significance to Fuller's in the context of the Voting Offers.
If the Panel requires Fuller's to make an offer for Gales Shares under the
provisions of Rule 9 of the City Code, Fuller's may make such alterations to the
conditions of the Offers, including to condition 1(a), as are necessary to
comply with the provisions of that Rule.
The Voting Offers will lapse if the acquisition of Gales by Fuller's is referred
to the Competition Commission before the later of 3.00 p.m. (London time) on the
first closing date of the Voting Offers and the date when the Voting Offers
become or are declared unconditional as to acceptances.
If the Voting Offers lapse they will cease to be capable of further acceptance.
Gales Ordinary Shareholders and Gales 'A' Shareholders who have accepted the
Voting Offers shall then cease to be bound by acceptances delivered on or before
the date on which the Voting Offers lapse.
2. CERTAIN FURTHER TERMS OF THE OFFERS
Gales Shares will be acquired by Fuller's fully paid and free from all liens,
equitable interests, charges, encumbrances and other third party rights of any
nature whatsoever and together with all rights attaching to them, including the
right to receive and retain all dividends and distributions (if any) declared,
made or payable after the date of this announcement.
The Voting Offers and, where relevant, the Loan Note Alternative will be on the
terms and will be subject, inter alia, to the conditions which are set out in
this Appendix 1 and those terms which will be set out in the Offer Document, the
relevant forms of acceptance accompanying the Offer Document and such further
terms as may be required to comply with the Listing Rules of the UK Listing
Authority and the provisions of the City Code. The Voting Offers and the Loan
Note Alternative and any acceptances and elections thereunder will be governed
by the laws of England and Wales.
The availability of the Voting Offers to Overseas Shareholders may be affected
by the laws of the relevant jurisdictions. Overseas Shareholders should inform
themselves about and observe any applicable requirements.
3. CONDITION AND CERTAIN FURTHER TERMS OF THE PREFERENCE OFFER
The Preference Offer will be conditional upon the Ordinary Offer and the 'A'
Offer becoming or being declared unconditional in all respects.
Gales Preference Shares will be acquired by Fuller's fully paid and free from
all liens, equitable interests, charges, encumbrances and other third party
rights of any nature whatsoever and together with all rights attaching to them,
including the right to receive and retain all dividends and distributions (if
any) declared, made or payable after the date of this announcement.
The Preference Offer will be on the above terms and will be subject, inter alia,
to the above condition and those terms which will be set out in the Offer
Document, the relevant forms of acceptance accompanying the Offer Document and
such further terms as may be required to comply with the provisions of the City
Code. The Preference Offer and any acceptances thereunder will be governed by
the laws of England and Wales.
The availability of the Preference Offer to Overseas Shareholders may be
affected by the laws of the relevant jurisdictions. Overseas Shareholders
should inform themselves about and observe any applicable requirements.
Upon the Voting Offers becoming or being declared unconditional as to
acceptances, the Preference Offer shall remain open for at least 14 calendar
days.
APPENDIX 2
BASES AND SOURCES
1. The value attributed to the fully diluted share capital of
Gales is based upon the 988,358 Gales Ordinary Shares, 3,198,745 Gales 'A'
Shares and 2,025 Gales Preference Shares in issue on 4 November 2005 (being the
latest practicable date prior to the posting of this document) together with
42,913 Gales Ordinary Shares which are the subject of options or awards granted
under the Gales Share Schemes and assuming no further Gales Ordinary Shares are
issued under the Gales Employee Share Ownership Plan.
2. Unless otherwise stated, the financial information
concerning Fuller's has been extracted from the audited annual report and
accounts of Fuller's for the relevant period.
3. Unless otherwise stated, the financial information
concerning Gales has been extracted from the audited annual report and accounts
of Gales for the relevant period.
4. The enterprise value of Gales of £91.8 million is calculated
as:
(a) £82.72 million, being the amount to be offered in respect of
the fully diluted share capital of Gales; plus
(b) £9.55 million, being the net debt of Gales as at 28 October
2005 extracted from Gales' unaudited management records; less
(c) £0.51 million, being the proceeds receivable following the
exercise in full of options or awards granted under the Gales Share Schemes.
5. The multiple of 14.2 times EBITDA is calculated as:
(a) £91.76 million enterprise value; divided by
(b) £6.47 million earnings before interest, taxation, depreciation
and amortisation for the year ended 29 January 2005.
6. Details of the irrevocable undertakings received from Gales
Shareholders are set out in the table below.
Name Number of Gales % of issued Gales Number of Gales % of issued Gales
Ordinary Shares ordinary share 'A' Shares 'A' ordinary share
capital capital
E. M. Bowyer 67,106 6.8 263,020 8.2
J. F. Bowyer 18,310 1.9 177,816 5.6
R. G. Bowyer - - 8,355 0.3
M. B. Bunting, 394,334 39.9 1,713,442 53.6
C. D. Brims and
S. M. Brown 1
C. J. Garratt & P. 16,533 1.7 72,545 2.3
C. Garratt
C. J. Garratt - - 3,929 0.1
P. C. Garratt 68,118 6.9 270,507 8.5
P. H. Garratt 23,353 2.4 108,425 3.4
B. C. Stevenson 23,353 2.4 100,962 3.2
C. D. Brims 20,687 2.1 8,925 0.3
N. J. B. Atkinson2 12,016 1.2 1,442 0.0
J. M. Hockley2 1,551 0.2 867 0.0
A. D. Marten 3 842 0.1 - -
TOTAL 646,203 65.4 2,730,235 85.4
Notes
1. Held as trustees of various family trusts.
2. Includes 492 Gales Ordinary Shares held under the Gales Employee Share
Ownership Plan.
3. Includes 342 Gales Ordinary Shares held under the Gales Employee Share
Ownership Plan.
To the extent that those persons listed above have a beneficial interest in
Voting Shares held on trust by M. B. Bunting, C. D. Brims and S. M. Brown, those
persons have additionally irrevocably committed to cause the registered owner of
those shares to accept (or procure the acceptance of) the Voting Offers.
N. J. B Atkinson, J. M. Hockley and A. D. Marten have also irrevocably
undertaken to accept proposals made by Fuller's in respect of options held under
the Gales Share Schemes.
APPENDIX 3
DEFINITIONS
The following definitions apply throughout this announcement unless the context
requires otherwise.
"Act" the Companies Act 1985 (as amended)
"'A' Offer" the recommended cash offer (including the Loan Note
Alternative) to be made by McQueen, on behalf of Fuller's, to
acquire the Gales 'A' Shares, including, where the context so
requires, any subsequent revision, variation, extension or
renewal of such offer
"Associate" has the meaning given in section 430E of the Act
"Australia" the Commonwealth of Australia, its territories and possessions
"Board" as the context requires, the board of directors of Fuller's or
the board of directors of Gales and the terms "Fuller's Board"
and "Gales Board" shall be construed accordingly
"Canada" Canada, its provinces and territories and all areas under its
jurisdiction and political sub-divisions thereof
"City Code" the City Code on Takeovers and Mergers
"Close Brothers" Close Brothers Corporate Finance Limited
"Directors of Fuller's" the directors of Fuller's at the date of this announcement
"Directors of Gales" the directors of Gales at the date of this announcement
"EBITDA" earnings before interest, tax, depreciation and amortisation
"Enlarged Group" the Fuller's Group following the acquisition of Gales
"Fuller's" Fuller, Smith & Turner P.L.C.
"Fuller's Group" Fuller's and its subsidiaries and its subsidiary undertakings
"Gales" George Gale and Company Limited
"Gales 'A' Shareholders" holders of Gales 'A' Shares
"Gales 'A' Shares" includes:
(i) the existing unconditionally allotted or issued and
fully paid 'A' ordinary shares of 25 pence each in the
capital of Gales; and
(ii) any further 'A' ordinary shares of 25 pence each in
the capital of Gales which are unconditionally allotted or
issued and fully paid before the date on which the 'A' Offer
closes or before such earlier date as Fuller's (subject to the
City Code) may determine not being earlier than the date on
which the 'A' Offer becomes or is declared unconditional as to
acceptances
"Gales Group" Gales and its subsidiaries and its subsidiary undertakings
"Gales Ordinary Shareholders" holders of Gales Ordinary Shares
"Gales Ordinary Shares" includes:
(i) the existing unconditionally allotted or issued and
fully paid ordinary shares of £1 each in the capital of
Gales; and
(ii) any further ordinary shares of £1 each in the
capital of Gales which are unconditionally allotted or issued
and fully paid before the date on which the Ordinary Offer
closes or before such earlier date as Fuller's (subject to the
City Code) may determine not being earlier than the date on
which the Ordinary Offer becomes or is declared unconditional
as to acceptances
"Gales Preference Shareholders" holders of Gales Preference Shares
"Gales Preference Shares" includes:
(i) the existing unconditionally allotted or issued and
fully paid preference shares of £10 each in the capital of
Gales; and
(ii) any further preference shares of £10 each in the
capital of Gales which are unconditionally allotted or issued
and fully paid before the date on which the Preference Offer
closes or before such earlier date as Fuller's (subject to the
City Code) may determine not being earlier than the date on
which the Preference Offer becomes or is declared
unconditional as to acceptances
"Gales Shareholders" holders of Gales Shares
"Gales Shares" Gales Ordinary Shares and/or Gales 'A' Shares and/or Gales
Preference Shares
"Gales Share Schemes" the Gales Approved Executive Share Option Scheme 2003 and/or
the Gales Employee Share Ownership Plan and/or the Gales
Long-Term Incentive Plan 2003 and any one or combination of
them, as the context so requires
"Gales Voting Shareholders" Gales Ordinary Shareholders and/or Gales 'A' Shareholders
"Japan" Japan, its cities, prefectures, territories and possessions
"Listing Rules" the rules and regulations made by the Financial Services
Authority in its capacity as the UK Listing Authority under
the Financial Services and Markets Act 2000, and contained in
the UK Listing Authority's publication of the same name
"Loan Note Alternative" the alternative whereby eligible Gales Voting Shareholders
validly accepting the Voting Offers may elect to receive Loan
Notes instead of all or part of the cash consideration to
which they would otherwise be entitled under the Voting Offers
"Loan Notes" the loan notes of Fuller's guaranteed as to principal only to
be issued pursuant to the Loan Note Alternative
"London Stock Exchange" London Stock Exchange plc
"McQueen" McQueen Limited
"Offer Document" the document containing the formal Offers to Gales
Shareholders
"Offers" any combination, or all, of the 'A' Offer and the Ordinary
Offer and the Preference Offer
"Ordinary Offer" the recommended cash offer (including the Loan Note
Alternative) to be made by McQueen, on behalf of Fuller's, to
acquire the Gales Ordinary Shares, including, where the
context so requires, any subsequent revision, variation,
extension or renewal of such offer
"Overseas Shareholder" Gales Shareholders (or nominees of, or custodians or trustees
for, Gales Shareholders) in, resident in or nationals or
citizens of, jurisdictions outside the United Kingdom
"Panel" the Panel on Takeovers and Mergers
"Preference Offer" the recommended cash offer being made by McQueen, on behalf of
Fuller's, to acquire the Gales Preference Shares, including,
where the context so requires, any subsequent revision,
variation, extension or renewal of such offer
"RIS" a regulatory information service as defined in the Listing
Rules
"UK" or "United Kingdom" the United Kingdom of Great Britain and Northern Ireland
"United States of America" or "United the United States of America, its territories and possessions,
States" any state of the United States and the District of Columbia
"US Securities Act" the United States Securities Act of 1933 and the rules and
regulations promulgated thereunder (as amended)
"Voting Offers" the Ordinary Offer and the 'A' Offer
For the purposes of this announcement, "subsidiary", "subsidiary undertaking", "
undertaking" and "associated undertaking" have the meanings given by the Act
(but for this purpose ignoring paragraph 20(1)(b) of Schedule 4A of the Act).
All times referred to are London time unless otherwise stated.
This information is provided by RNS
The company news service from the London Stock Exchange
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