Recommended Offer for RHM

Premier Foods plc 04 December 2006 For immediate release 4 December 2006 Not for release, publication or distribution in or into the United States, Canada, Australia or Japan Part 1 RECOMMENDED OFFER FOR RHM PLC BY PREMIER FOODS PLC The boards of Premier Foods and RHM are pleased to announce that they have reached agreement on the terms of a recommended offer to be made by Premier to acquire the entire issued and to be issued share capital of RHM. It is intended that the Offer be implemented by way of a scheme of arrangement under section 425 of the Companies Act 1985. Following the Acquisition, Premier will be the largest food producer in the UK (1) and believes it will be able to build on the complementary strategies of Premier and RHM from a position of significantly enhanced scale and efficiency. Premier believes that the Acquisition will enable it to take advantage of top-line growth opportunities through strong innovation and brand investment, while also delivering substantial cost savings to enhance efficiency and competitiveness. In particular: â€¢ Premier will have pro forma sales of Â£2.6 billion, with 93% of those sales from the UK; â€¢ Premier will have an outstanding portfolio of iconic British brands, the top 10 of which will have retail sales of approximately Â£1.1 billion in aggregate; â€¢ As the largest food producer in the UK, Premier will look to develop its strategic partnerships with the major UK food retailers; and â€¢ The Acquisition meets Premier's acquisition criteria with Â£85 million of annual synergies identified from integrating the two businesses (2) delivering significant value creation to the shareholders of both Premier and RHM. The Offer Under the terms of the Offer, RHM Shareholders will receive: For each RHM Share: one New Premier Share, and 83.2 pence in cash, â€¢ valuing each RHM Share at 352.45 pence, representing a premium of 29.7 per cent. to the Closing Price per RHM Share on 1 December 2006 of 271.75 pence, based on the Closing Price per Premier Share of 269.25 pence on 1 December 2006 (being the last business day prior to the date of this announcement), â€¢ valuing the entire issued and to be issued ordinary share capital of RHM at approximately Â£1,227 million which represents an enterprise value for RHM of approximately Â£2 billion. Existing RHM Shareholders will hold approximately 41 per cent. of the issued share capital of the enlarged Premier and existing Premier Shareholders approximately 59 per cent. of the enlarged Premier. The share element of the consideration will allow RHM Shareholders to benefit substantially from the synergies expected to arise, as well as from the longer term strategic benefits expected from the combination. RHM will pay an interim dividend of 5.5 pence per RHM Share in respect of the period ended 28 October 2006. RHM Shareholders on the register at 22 December 2006 will be entitled to the RHM interim dividend, whether or not the Offer is completed, which will be paid on 23 February 2007. In order to align dividend payments to Premier Shareholders and RHM Shareholders for the year, the Board of Premier has declared a second interim dividend of 5.5 pence per Premier Share. Premier Shareholders on the register at 22 December 2006 will be entitled to receive this dividend, whether or not the Offer is completed, to be paid on 23 February 2007. The 2006 final dividend of Premier, to which holders of New Premier Shares will be entitled (assuming the Acquisition completes), will be set by the directors of Premier in accordance with its current dividend policy, save that it will take account of this second interim dividend of 5.5 pence which will be paid to Premier Shareholders on 23 February 2007. The 2006 final dividend and any 2007 interim dividend of Premier will be paid in the calendar year 2007. The directors of RHM, who have been so advised by Credit Suisse and Citigroup, consider the terms of the Offer to be fair and reasonable. In providing their advice, Credit Suisse and Citigroup have taken into account the commercial assessments of the directors of RHM. Accordingly, the directors of RHM unanimously recommend RHM Shareholders to vote in favour of the Scheme, as they have irrevocably undertaken to do in respect of their own beneficial holdings of 2,619,300 RHM Shares representing approximately 0.8 per cent. of the existing ordinary issued share capital of RHM. A Scheme circular containing notice of the RHM Extraordinary General Meeting and Court Meeting will be sent to RHM Shareholders in due course. These meetings are expected to take place in February with completion of the Acquisition in March. A circular containing notice of the Premier Extraordinary General Meeting will be sent to Premier Shareholders in due course. The Premier Extraordinary General Meeting is expected to take place in February with completion of the Acquisition in March. Commenting on today's announcement, David Kappler, Chairman of Premier, said: 'This acquisition provides a unique opportunity to combine two of the UK's leading food companies to create the UK's largest food producer. There is excellent potential for Premier to enhance its top-line growth in conjunction with improved efficiency to deliver substantial value to shareholders.' Commenting on today's announcement, Robert Schofield, Chief Executive of Premier, said: 'RHM is a business with strong brands and talented people. This acquisition brings Premier more great British brands with leading category positions which fit naturally in our portfolio. As we've done before, we intend to drive growth through innovation and investment whilst maintaining a tight control on costs. This acquisition transforms our scale and we believe it will enable us to be a better partner with our retail customers.' Commenting on today's announcement, Jan du Plessis, Chairman of RHM, said: 'The Board of RHM has long appreciated the commercial and financial logic of a combination with Premier to create the leading UK-focused food manufacturer. This transaction achieves that objective and delivers substantial value to our shareholders through both the immediate offer premium and participation in the enhanced growth prospects of the enlarged Premier under its proven management team.' Rothschild is acting as financial adviser to Premier. Merrill Lynch International, who also provided certain financial advice, and Hoare Govett are acting as joint corporate brokers to Premier. Credit Suisse and Citigroup are acting as joint financial advisers to RHM. Credit Suisse is acting as corporate broker to RHM. This summary should be read in conjunction with the full text of the following announcement. The Scheme will be subject to the conditions set out in Appendix I to the following announcement and to the full terms and conditions which will be set out in the Scheme Document. Appendix II sets out the bases and sources of certain of the information contained in this announcement. Appendix III contains definitions of certain terms used in this summary and the following announcement. An analyst and investor meeting will be held at 9am (London time) today at ABN AMRO, 250 Bishopsgate, London, EC2M 4AA. For further enquiries, contact: Premier: on the day of announcement 020 7638 9571; thereafter, 01727 815 850 Robert Schofield, Chief Executive Paul Thomas, Finance Director Robert Lawson, M&A and Investor Relations Director Gwyn Tyley, Investor Relations Manager Rothschild (financial adviser to Premier): 020 7280 5000 Akeel Sachak Alexis Masters Robert Plowman Merrill Lynch International (corporate broker to Premier): 020 7996 1000 Simon Mackenzie Smith Peter Tracey Chris Snoxall Hoare Govett (corporate broker to Premier): 020 7678 8000 Ranald McGregor-Smith Jeremy Thompson Luke Simpson Citigate Dewe Rogerson (PR adviser to Premier): 020 7638 9571 Michael Berkeley Sara Batchelor Justin Griffiths RHM: on the day of announcement 020 7269 7121; thereafter, 01628 478 484 Ian McMahon, Chief Executive Officer Andrew Allner, Group Finance Director John McIvor, Director of Investor Relations and Industry Strategy Credit Suisse (financial adviser to RHM): 020 7888 8888 James Leigh-Pemberton George Maddison Ian Brown Citigroup (financial adviser to RHM): 020 7986 4000 Ian Carnegie-Brown Iain Robertson Irfan Shariff Credit Suisse (corporate broker to RHM): 020 7888 8888 Richard Crawley Financial Dynamics (PR adviser to RHM): 020 7269 7121 Andrew Lorenz Richard Mountain (1) Measured by reported net sales in the UK. (2) The expected synergies have been calculated on the basis of the existing cost and operating structures of the current Premier Group and RHM Group. These statements of estimated synergies relate to future actions and circumstances which, by their nature, involve risks, uncertainties, contingencies and other factors. As a result, the synergies referred to may not be achieved, or those achieved may be materially different from those estimated. N M Rothschild & Sons Limited, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting for Premier and no-one else in connection with the Offer and will not be responsible to any person other than Premier for providing the protections afforded to its customers or for providing advice in relation to the Offer or in relation to the contents of this announcement or any transaction or arrangement referred to herein. Merrill Lynch International is acting exclusively for Premier and no-one else in connection with the Offer and will not be responsible to anyone other than Premier for providing the protections afforded to clients of Merrill Lynch International or for providing advice in relation to the Offer or any other matters referred to in this announcement. Hoare Govett Limited, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting as joint broker to Premier and no-one else in connection with the Offer and will not be responsible to any person other than Premier for providing the protections afforded to its customers or for providing advice in relation to the Offer or in relation to the contents of this announcement or any transaction or arrangement referred to herein. Credit Suisse, which is authorised and regulated by the Financial Services Authority, is acting for RHM and no-one else in connection with the Offer and will not be responsible to anyone else other than RHM for providing the protections afforded to clients of Credit Suisse or for providing advice in relation to the Offer or any other matters referred to in this announcement. Citigroup, which is authorised and regulated by the Financial Services Authority, is acting for RHM and no-one else in connection with the Offer and will not be responsible to anyone else other than RHM for providing the protections afforded to clients of Citigroup or for providing advice in relation to the Offer or any other matters referred to in this announcement. The distribution of this announcement in jurisdictions other than the United Kingdom may be restricted by law and therefore persons into whose possession this announcement comes should inform themselves about, and observe, such restrictions. Any failure to comply with the restrictions may constitute a violation of the securities laws of any such jurisdiction. This announcement does not constitute an offer or an invitation to purchase or subscribe for any securities or a solicitation of an offer to buy any securities pursuant to this announcement or otherwise in any jurisdiction in which such offer or solicitation is unlawful. This announcement has been prepared for the purposes of complying with English law, the Listing Rules, the rules of the London Stock Exchange and the City Code and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws and regulations of any jurisdiction outside of the United Kingdom. This announcement does not constitute an offer to purchase, sell or exchange or the solicitation of an offer to purchase, sell or exchange any securities or the solicitation of any vote or approval in any jurisdiction pursuant to the Offer or otherwise, nor shall there be any purchase, sale or exchange of securities or such solicitation in any jurisdiction in which such offer, solicitation or sale or exchange would be unlawful prior to the registration or qualification under the laws of such jurisdiction. This announcement does not constitute a prospectus or prospectus equivalent document. RHM Shareholders are advised to read carefully the formal documentation in relation to the Offer once the Scheme Document has been dispatched. The New Premier Shares may not be offered or sold in the United States absent registration under the US Securities Act or an exemption therefrom. Premier has not registered and does not intend to register any New Premier Shares under the US Securities Act. Any New Premier Shares will be issued in reliance upon the exemption from the registration requirements of the US Securities Act provided by Section 3(a)(10) thereof. In the event that the Offer is implemented by way of a takeover offer, any public offering of the New Premier Shares to be made in the United States will be made by means of an offer document that may be obtained from Premier or RHM and that will contain detailed information about the terms of the Offer and Premier, RHM and their management, as well as financial statements. RHM Shareholders who are or will be 'affiliates' of RHM or Premier prior to, or Premier after, the effective date of the Scheme will be subject to certain US transfer restrictions relating to the New Premier Shares received under the Offer. Whether or not a RHM Shareholder votes at any Court Meeting or at the RHM Extraordinary General Meeting, if the Offer is completed, the RHM Shares held by all RHM Shareholders will be acquired pursuant to the Scheme and RHM Shareholders will receive one New Premier Share and a payment of 83.2 pence in cash for every RHM Share. RHM will prepare the Scheme Document which together with the Prospectus will be distributed to RHM Shareholders. Premier and RHM strongly advise RHM Shareholders to read the Scheme Document and the Prospectus when they become available because they will contain important information relating to the Offer. Any response in relation to the Offer should be made only on the basis of the information contained in the Scheme Document and the Prospectus. Dealing Disclosure Requirements Under the provisions of Rule 8.3 of the City Code, if any person is, or becomes, 'interested' (directly or indirectly) in one per cent. or more of any class of 'relevant securities' of Premier or of RHM, 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 Scheme becomes effective, or on which the 'offer period' for the purposes of the City Code 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 Premier or RHM, they will be deemed to be a single person for the purpose of Rule 8.3. Under the provisions of Rule 8.1 of the City Code, all 'dealings' in 'relevant securities' of Premier or of RHM by Premier or RHM, 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 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. Forward looking statements This announcement contains statements about Premier and RHM that are or may be forward looking statements. All statements other than statements of historical facts included in this announcement may be forward looking statements. Without limitation, any statements preceded or followed by or that include the words 'targets', 'plans', 'believes', 'expects', 'aims', 'intends', 'will', 'should', 'may', 'anticipates', 'estimates', 'synergies', 'cost savings', 'projects', 'strategy' or, words or terms of similar substance or the negative thereof, are forward looking statements. Forward looking statements include statements relating to the following: (i) the expected timetable for completing this transaction, future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects of Premier, RHM or the Combined Group; (ii) business and management strategies and the expansion and growth of Premier's, RHM's or the Combined Group's operations and potential synergies resulting from the acquisition; and (iii) the effects of government regulation on Premier's, RHM's or the Combined Group's business. These forward looking statements are not guarantees of future performance. They have not been reviewed by the auditors of Premier or RHM. These forward looking statements involve known and unknown risks, uncertainties and other factors which may cause them to differ from the actual results, performance or achievements expressed or implied by such forward looking statements. These forward looking statements are based on numerous assumptions regarding the present and future business strategies of such persons and the environment in which each will operate in the future. Investors are cautioned not to place undue reliance on the forward looking statements, which speak only as of the date they were made. All subsequent oral or written forward looking statements attributable to Premier or RHM or any of their respective members, directors, officers or employees or any persons acting on their behalf are expressly qualified in their entirety by the cautionary statement above. All forward looking statements included in this announcement are based on information available to Premier and RHM on the date hereof. Investors should not place undue reliance on such forward looking statements, and we undertake no obligation to publicly update or revise any forward looking statements. No statement in this announcement is intended to constitute a profit forecast for any period, nor should any statements be interpreted to mean that earnings or earnings per share will necessarily be greater or lesser than those for the relevant preceding financial periods for either Premier or RHM as appropriate. For immediate release 4 December 2006 Not for release, publication or distribution in or into the United States, Canada, Australia or Japan Part 2 RECOMMENDED OFFER FOR RHM PLC BY PREMIER FOODS PLC 1. Introduction The boards of Premier Foods and RHM are pleased to announce that they have reached agreement on the terms of a recommended offer by Premier to acquire the entire issued and to be issued share capital of RHM. Following the Acquisition, Premier will be the largest food producer in the UK (1) and it believes it will be able to build on the complementary strategies of Premier and RHM from a position of significantly enhanced scale and efficiency. It is intended that the Offer be implemented by way of a scheme of arrangement under section 425 of the Companies Act 1985. 2. The Offer Under the Offer, which will be subject to the Conditions set out in Appendix I, and to the full terms and conditions to be set out in the Scheme Document, RHM Shareholders will be entitled to receive: For each RHM Share: one New Premier Share, and 83.2 pence in cash. The Offer values each RHM Share at 352.45 pence, representing a premium of 29.7 per cent. to the Closing Price per RHM Share on 1 December 2006 of 271.75 pence, based on the Closing Price per Premier Share of 269.25 pence on 1 December 2006 (being the last business day prior to the date of this announcement). The Offer values the entire issued and to be issued ordinary share capital of RHM at approximately Â£1,227 million which represents an enterprise value for RHM of approximately Â£2 billion. Existing RHM Shareholders will hold approximately 41 per cent. of the issued share capital of the enlarged Premier and existing Premier Shareholders approximately 59 per cent. of the enlarged Premier. 3. Recommendation The directors of RHM, who have been so advised by Credit Suisse and Citigroup, consider the terms of the Offer to be fair and reasonable. In providing their advice, Credit Suisse and Citigroup have taken into account the commercial assessments of the directors of RHM. Accordingly, the directors of RHM unanimously recommend RHM Shareholders to vote in favour of the Scheme, as they have irrevocably undertaken to do in respect of their own beneficial holdings of 2,619,300 RHM Shares representing approximately 0.8 per cent. of the existing ordinary issued share capital of RHM. 4. Dividends RHM will pay an interim dividend of 5.5 pence per RHM Share in respect of the six months ended 28 October 2006. RHM Shareholders on the register at 22 December 2006 will be entitled to the RHM interim dividend whether or not the Offer is completed. This dividend will be paid on 23 February 2007. RHM Shareholders will also be entitled (subject to completion of the Offer) to receive any final dividend declared by Premier in respect of the year ended 31 December 2006. In order to align dividend payments to Premier Shareholders and RHM Shareholders for the year, the Board of Premier has declared a second interim dividend of 5.5 pence per Premier Share. Premier Shareholders on the register at 22 December 2006 will be entitled to receive this dividend, whether or not the Offer is completed, to be paid on 23 February 2007. The 2006 final dividend of Premier, to which holders of New Premier Shares will be entitled (assuming the Acquisition completes), will be set by the directors of Premier in accordance with its current dividend policy, save that it will take account of this second interim dividend of 5.5 pence which will be paid to Premier Shareholders on 23 February 2007. Thereafter, Premier will seek to maintain a progressive dividend policy, which will reflect the effect of the anticipated synergies arising from the transaction. The 2006 final dividend and any 2007 interim dividend of Premier will be paid in the calendar year 2007. The New Premier Shares will carry the right to all dividends and other distributions declared, made or paid on or after the date on which the Scheme becomes effective. 5. Background to and reasons for the Acquisition Following the Acquisition, Premier will be the largest food supplier in the UK and will be able to build on the complementary strategies of Premier and RHM from a position of significantly enhanced scale and efficiency. The Acquisition will enable Premier to take advantage of top-line growth opportunities through strong innovation and brand investment, while also delivering substantial cost savings to enhance efficiency and competitiveness. In particular: â€¢ Premier will have pro forma sales of Â£2.6 billion, with 93% of those sales from the UK; â€¢ Premier will have an outstanding portfolio of iconic British brands, the top 10 of which will have retail sales of approximately Â£1.1 billion in aggregate; â€¢ As the largest food supplier in the UK, Premier will look to develop its strategic partnerships with the major UK food retailers; and â€¢ The Acquisition meets Premier's acquisition criteria with Â£85 million of annual synergies identified from integrating the two businesses (2) delivering significant value creation to the shareholders of both Premier and RHM. Scale in the UK Premier will be of a significantly enhanced scale in the UK and Ireland compared with either Premier or RHM alone. This increased scale provides a number of benefits in respect of customer relationships, operational synergies and more efficient marketing. Furthermore, Premier will have the financial capacity to continue to pursue acquisition opportunities within the UK and Irish grocery markets, in line with its current strategy. Leading UK brands and category positions The size and strength of the combined brand portfolio constitutes a significant platform from which to drive growth and innovation. The grocery portfolio will include a number of complementary brands with leading positions in their respective categories, including: Category Brands Category size Position (Â£m) Bread Hovis, Mother's Pride, Nimble, 1,106 1 Ormo Cakes Mr Kipling, Cadbury's, Lyons 916 1 Ambient Desserts Ambrosia, Bird's, Hartley's 324 1 Spreads Robertson's, Hartley's, Frank 243 1 Cooper's, Rose's, Gale's, Sun Pat, Golden Shred Meat Free Quorn, Cauldron 182 1 Gravies Bisto 107 1 Stocks Oxo 68 1 Convenience Batchelor's, Branston, Fray 919 2 Foods Bentos, Smash, Crosse & Blackwell, Waistline Pickles & Table Branston, Sarson's, Haywards, 517 2 Sauces Dufrais Cooking sauces Loyd Grossman, Sharwood's, 448 2 Homepride These brands currently enjoy high levels of customer recognition and Premier believes it will be better placed to invest further and more efficiently behind these leading brands with increased marketing and innovation. Partnerships with UK food retailers Premier will be the largest food producer in the UK (1). It will look to develop its strategic partnerships with the major UK food retailers in order to deliver better products, greater innovation and higher service levels. Financial benefits The operations of Premier and RHM are highly complementary and Premier has identified an estimated Â£85 million of annual pre-tax cost savings from removing duplication in administrative functions and procurement, logistics and manufacturing efficiencies.(2) Premier expects to achieve full run-rate synergies of Â£85 million per annum by the end of 2009. Premier expects Â£10 million, Â£42.5 million, Â£75 million and Â£85 million to be reflected cumulatively in the financial years 2007, 2008, 2009 and 2010 respectively. Premier expects to incur one-off charges, including capital expenditure, of Â£110 million to achieve these synergies, with Â£30 million, Â£40 million and Â£40 million being incurred in the financial years 2007, 2008 and 2009 respectively. Premier has a strong track record of successfully integrating acquisitions, and is confident that these savings will be achieved without disruption to the underlying operations of the Premier or RHM businesses. An important element of the integration process will be to combine RHM's operations into Premier's existing divisional structure. RHM's Culinary Brands division, Cake division and Customer Partnerships division will be integrated into Premier's Grocery operations. RHM's Bread Bakeries division will continue to function as a standalone division, given its distribution model and milling operations. Realisation of the synergies should create significant value for the existing shareholders of Premier and RHM. The Acquisition is expected to enhance Premier's earnings per share in the first full year following completion of the Offer (3) and ROIC is expected to exceed Premier's WACC by the first full year following completion of the Offer. 6. Background to and reasons for the recommendation The directors of RHM have agreed to recommend the Offer to RHM Shareholders. The directors' recommendation recognises both the strong commercial and financial logic of a combination with Premier. The directors of RHM believe that the Offer will deliver substantial value to RHM Shareholders through both the immediate offer premium and participation in the enhanced growth prospects of the Combined Group. 7. Information on Premier Premier is a leading UK food producer and operates its business in two primary segments - Grocery and Fresh Produce. Premier manufactures and supplies a range of category-leading manufacturer branded and retailer branded products predominantly to the UK food retail industry. For the year ended 31 December 2005, Premier reported sales of Â£790 million and operating profit before exceptional items of Â£102.1 million. The Campbell's UK and Ireland business, acquired by Premier in August 2006, reported sales of Â£263 million and operating profit before interest, tax, amortisation, management charges and restructuring redundancy costs of Â£45.7 million for the 12 months ended 31 July 2005. Since its listing on the London Stock Exchange in July 2004, Premier has grown in scale through a series of acquisitions, most recently that of Campbell's UK and Ireland business, which was funded by debt facilities and a rights issue. Grocery The Grocery business of the Premier Group is organised into its Convenience Foods, Pickles, Sauces & Meat Free and Spreads, Desserts & Beverages product groupings. Premier's branded products include, among others, Quorn and Cauldron meat-free products, Oxo stock cubes, Batchelor's soups, noodles and convenience foods, Ambrosia custard and milk puddings, Bird's custard, Branston pickles, table sauces, baked beans and canned pasta, Hartley's preserves and jelly, Gale's honey and lemon curd, Crosse & Blackwell convenience foods, Fray Bentos meat pies, Homepride cooking sauces, Sun-Pat peanut butter, Sarson's vinegar, Haywards pickles, Smash instant mashed potato, Marvel powdered milk creamer and Waistline salad dressings, soups and baked beans. In addition, Premier produces Loyd Grossman cooking sauces and soups under licence. Premier also produces a range of retailer brand products, principally for the major multiple retailers. For the year ended 31 December 2005, the Grocery business reported sales of Â£683 million and operating profit before exceptional items of Â£101.6 million. The Campbell's UK and Ireland business, acquired by Premier in August 2006, reported sales of Â£263 million and operating profit before interest, tax, amortisation, management charges and restructuring redundancy costs of Â£45.7 million for the 12 months ended 31 July 2005. Fresh Produce The Fresh Produce business comprises potato and fresh produce packing and marketing operations supplying the retail, foodservice, food manufacturing and potato growing markets. For the year ended 31 December 2005, the Fresh Produce business reported sales of Â£106 million and operating profit before exceptional items of Â£0.5 million. 8. Information on RHM RHM is a leading UK food manufacturer, with annual sales of over Â£1.5 billion and over 15,000 employees at approximately 50 locations in the UK and France. For the year ended 29 April 2006, RHM reported sales of Â£1,559 million, underlying operating profit of Â£174 million and underlying pro forma profit before tax of Â£132 million.(4) As at 29 April 2006, RHM reported gross assets of Â£1,346 million and net debt of Â£676 million. RHM was listed on the London Stock Exchange in July 2005 and has a current market capitalisation of Â£946 million (based on a Closing Price of 271.75 pence for each RHM Share as at 1 December 2006). The RHM Group is organised into four divisions: Bread Bakeries The Bread Bakeries division operates principally in the wrapped bread market, marketed under brands such as Hovis, Granary, Mother's Pride and Nimble. In addition, the division manufactures own label bread and morning goods, frozen part-baked products for retailers and a wide range of bulk flours and branded and own label bagged flours. It is the largest vertically-integrated baker and flour miller in the UK. For the year ended 29 April 2006, the Bread Bakeries division reported sales of Â£786 million and underlying operating profit of Â£81.4 million. Culinary Brands The Culinary Brands division operates principally in the gravy makers, Asian sauces and condiments and preserves markets under such well-known brand names as Bisto, Paxo, Sharwoods, Saxa, McDougalls, Robertson's, Frank Cooper's and Golden Shred. For the year ended 29 April 2006, the Culinary Brands division reported sales of Â£271 million and underlying operating profit of Â£69.4 million. Cakes The Cakes division is the largest manufacturer of cakes, by sales, for the UK and Irish markets. RHM's branded cakes are predominantly sold under the Mr Kipling, Cadbury's and Lyons brands. For the year ended 29 April 2006, the Cakes division reported sales of Â£241 million and underlying operating profit of Â£13.7 million. Customer Partnerships The Customer Partnerships division maintains strategic partnerships with large customers requiring a bespoke service, including Marks & Spencer and Pizza Hut. It also operates specialist distribution businesses that supply a selected range of RHM's products into the Irish markets and frozen products to the UK supermarket chains. For the year ended 29 April 2006, the Customer Partnerships division reported sales of Â£262 million and underlying operating profit of Â£29.4 million. 9. Current trading Premier The Premier Board's expectations for Premier for the full year remain unchanged. The full year outcome is, as always, dependent on Christmas trading. RHM On 31 October 2006, RHM released a trading update in relation to the period ended 28 October 2006 anticipating that operating profit from continuing operations before restructuring costs for the first half of the year would be approximately Â£70 million. The RHM Board's expectations for the period ended 28 October 2006 remain unchanged. RHM's unaudited interim results for the six months ended 28 October 2006 will be announced on 13 December 2006. 10. Financing The cash consideration payable by Premier to RHM Shareholders under the terms of the Offer will be provided from a Â£2.1 billion debt facility underwritten by the Royal Bank of Scotland plc. The debt facility will refinance Premier and RHM's existing indebtedness, provide working capital for the Combined Group, and fund the cash element of the consideration due to RHM Shareholders under the terms of the Offer. Further information on the financing will be set out in the Scheme Document and the Prospectus. N M Rothschild, financial adviser to Premier, has confirmed that it is satisfied that sufficient resources are available to Premier to satisfy in full the cash consideration payable to RHM Shareholders under the terms of the Scheme. In connection with the Offer, Premier will issue approximately 348 million New Premier Shares to RHM Shareholders. These shares are expected to represent approximately 41 per cent. of the enlarged share capital of Premier. The Offer will be conditional upon, amongst other things, Premier receiving shareholder approval and admission of the New Premier Shares to the Official List of the UK Listing Authority and to trading on the London Stock Exchange. 11. Management and employees Premier views the management and employees of RHM as an important resource, critical to the success of the Combined Group. Premier plans to work with RHM management to further develop and integrate the RHM business into Premier. Premier has given the RHM Board assurances that, following the Scheme becoming effective, the existing employment rights, including pension rights, of all employees of RHM will be fully safeguarded. 12. RHM Share Schemes The Offer will affect share options and incentive awards granted under the RHM Share Schemes. Participants in the RHM Share Schemes will be contacted regarding the effect of the Offer on their rights and appropriate proposals will be made in due course. 13. Implementation Agreement RHM and Premier have entered into an implementation agreement which provides that both parties will, inter alia, use their reasonable endeavours to achieve satisfaction of the Conditions (including Premier giving suitable undertakings to address any competition concerns which may arise from the Offer) and to meet an agreed timetable for implementation of the Scheme. As part of this agreement, RHM has agreed to pay Premier the higher of (i) Â£12,273,270 and (ii) if Premier increases the value of its Offer, one per cent. of the value of the issued share capital of RHM based on the revised value of the Offer (both inclusive of VAT except to the extent that such VAT is recoverable) if: (a) an RHM Competing Proposal is announced prior to the Offer lapsing or being withdrawn or, if earlier, prior to 3 June 2007 and such RHM Competing Proposal becomes unconditional in all respects or is completed in accordance with its terms; or (b) the directors of RHM withdraw or adversely modify their recommendation of the Offer other than because the provisions of (ii) or (iv) below apply. Also under the implementation agreement, Premier has agreed to pay RHM the sum of Â£13,346,590 (inclusive of VAT except to the extent that such VAT is recoverable) if: (i) a Premier Competing Proposal is announced prior to the Offer lapsing or being withdrawn or, if earlier, prior to 3 June 2006 and such Premier Competing Proposal becomes unconditional in all respects or is completed in accordance with its terms; (ii) the directors of Premier withdraw or adversely modify their recommendation of the Offer or their recommendation to Premier Shareholders to vote in favour of the resolutions to be proposed at the Premier Extraordinary General Meeting other than because the provisions of (a) or (b) above apply or RHM Shareholders do not pass any of the resolutions necessary to effect the Scheme and in either case the Acquisition does not otherwise complete; (iii) the Relevant Publications and the Relevant Notices are not made by 30 April 2007; or (iv) any of the resolutions to be voted on at the Premier Extraordinary General Meeting are not passed by the Premier Shareholders other than because the provisions of (a) or (b) above apply or RHM Shareholders do not pass any of the resolutions necessary to effect the Scheme and, in either case, the Acquisition does not otherwise complete. 14. Irrevocable undertakings Premier has received irrevocable undertakings to vote in favour of the resolutions to effect the Offer from each director of RHM in respect of, in aggregate, 2,619,300 RHM Shares representing approximately 0.8 per cent. of the existing ordinary issued share capital of RHM. These irrevocable undertakings will cease to be binding in the following circumstances: (a) the Offer lapses or is withdrawn or the Offer is not approved by the requisite majorities at the Court Meeting or is not sanctioned by the Court at the hearing of the Court of the petition to sanction the Scheme; or (b) the Premier Shareholders fail to pass the necessary resolutions to approve the Offer. 15. Scheme of arrangement Under the Scheme, each RHM Share will be cancelled and new shares in RHM will be issued fully paid to Premier. RHM Shareholders will be entitled to receive consideration under the terms of the Offer as outlined in paragraph 2 above. Upon the Scheme becoming effective, RHM will become a wholly-owned subsidiary of Premier. The Scheme will be subject to the Conditions and further terms and conditions to be set out in the Scheme Document, including the sanction of the Scheme by the Court, the satisfaction of certain regulatory conditions, Premier shareholder approval and admission to trading of the New Premier Shares. To become effective, the Scheme requires, amongst other things, the approval of a majority in number of RHM Shareholders representing three fourths or more in value of RHM Shares (or the relevant class or classes thereof) entitled to vote, either in person or by proxy, at the Court Meeting, together with the sanction of the Court and the passing of the resolutions necessary to implement the Scheme at the RHM Extraordinary General Meeting. The Scheme will become effective upon, amongst other things, delivery to the Registrar of Companies in England and Wales of a copy of the order of the Court sanctioning the Scheme and in relation to the reduction of capital associated with the Scheme, the registration of such order. Upon the Scheme becoming effective, it will be binding on all RHM Shareholders, irrespective of whether or not they attended or voted at the Court Meeting or the RHM Extraordinary General Meeting. A Scheme circular containing notice of the RHM Extraordinary General Meeting and Court Meeting will be sent to RHM Shareholders in due course. These meetings are expected to take place in February with completion of the Acquisition in March. 16. Premier Extraordinary General Meeting Due to its size, the Offer requires the prior approval of Premier Shareholders under the Listing Rules. In addition, certain resolutions will need to be passed in order to allow Premier to issue the New Premier Shares. The Premier Extraordinary General Meeting will be convened for these purposes. A circular containing notice of the Premier Extraordinary General Meeting will be sent to Premier Shareholders in due course. The Premier Extraordinary General Meeting is expected to take place in February with completion of the Acquisition in March. 17. De-listing of RHM Shares RHM intends to make applications to the UK Listing Authority for the listing of the RHM Shares to be cancelled and to cease to be admitted to trading on the London Stock Exchange's market for listed securities with effect as of, or shortly following, the Scheme becoming effective. 18. Listing, dealings and settlement of New Premier Shares Applications will be made to the UK Listing Authority for the New Premier Shares to be admitted to the Official List and to the London Stock Exchange for the New Premier Shares to be admitted to trading on the London Stock Exchange's market for listed securities. It is expected that Admission will become effective and that dealings for normal settlement in the New Premier Shares will commence on the London Stock Exchange at 8.00 a.m. on the first dealing day following the date on which the Scheme becomes effective. 19. Interests in RHM As at 1 December 2006, the latest practicable date prior to this announcement, neither Premier nor, so far as the directors of Premier are aware, any person acting in concert with Premier had an interest in, or right to subscribe for, or has borrowed or lent, relevant securities of RHM or had any short position in relation to the relevant securities of RHM (whether conditional or absolute and whether in the money or otherwise), including any short position under a derivative, any agreement to sell or any delivery obligation or right to require another person to purchase or take delivery of any relevant securities of RHM. In view of the requirement of confidentiality and therefore the availability to Premier of all relevant persons who are presumed to be acting in concert with Premier to provide information, it has not been possible to ascertain all of the interests and dealings in RHM Shares of all relevant persons who are presumed to be acting in concert with Premier for the purposes of the Offer. Any such additional interest(s) or dealing(s) will be discussed with the Panel and, if appropriate, will be disclosed to RHM Shareholders in the Scheme Document or announced if so requested by the Panel. ENQUIRIES Premier: on the day of announcement 020 7638 9571; thereafter, 01727 815 850 Robert Schofield, Chief Executive Paul Thomas, Finance Director Robert Lawson, M&A and Investor Relations Director Gwyn Tyley, Investor Relations Manager Rothschild (financial adviser to Premier): 020 7280 5000 Akeel Sachak Alexis Masters Robert Plowman Merrill Lynch International (corporate broker to Premier): 020 7996 1000 Simon Mackenzie Smith Peter Tracey Chris Snoxall Hoare Govett (corporate broker to Premier): 020 7678 8000 Ranald McGregor-Smith Jeremy Thompson Luke Simpson Citigate Dewe Rogerson (PR adviser to Premier): 020 7638 9571 Michael Berkeley Sara Batchelor Justin Griffiths RHM: on the day of announcement 020 7269 7121; thereafter, 01628 478 484 Ian McMahon, Chief Executive Officer Andrew Allner, Group Finance Director John McIvor, Director of Investor Relations and Industry Strategy Credit Suisse (financial adviser to RHM): 020 7888 8888 James Leigh-Pemberton George Maddison Ian Brown Citigroup (financial adviser to RHM): 020 7986 4000 Ian Carnegie-Brown Iain Robertson Irfan Shariff Credit Suisse (corporate broker to RHM): 020 7888 8888 Richard Crawley Financial Dynamics (PR adviser to RHM): 020 7269 7121 Andrew Lorenz Richard Mountain (1) Measured by reported net sales in the UK. (2) The expected synergies have been calculated on the basis of the existing cost and operating structures of the current Premier Group and the current RHM Group. These statements of estimated synergies relate to future actions and circumstances which, by their nature, involve risks, uncertainties, contingencies and other factors. As a result, the synergies referred to may not be achieved, or those achieved may be materially different from those estimated. (3) The statement that the Offer is expected to enhance Premier's earnings per share in the first full year following completion of the Offer does not constitute a profit forecast and should not be interpreted to mean that earnings per share for the year to 31 December 2008 or any subsequent financial period will necessarily be greater than those for any preceding financial period. (4) For the year ended 29 April 2006, RHM reported statutory profit before tax of Â£7.4 million. N M Rothschild & Sons Limited, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting for Premier and no-one else in connection with the Offer and the Scheme and will not be responsible to any person other than Premier for providing the protections afforded to its customers or for providing advice in relation to the Offer or the Scheme or in relation to the contents of this announcement or any transaction or arrangement referred to herein. Merrill Lynch International is acting exclusively for Premier and no-one else in connection with the Offer and will not be responsible to anyone other than Premier for providing the protections afforded to clients of Merrill Lynch International or for providing advice in relation to the Offer or any other matters referred to in this announcement. Hoare Govett Limited, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting as joint broker to Premier and no-one else in connection with the Offer and will not be responsible to any person other than Premier for providing the protections afforded to its customers or for providing advice in relation to the Offer or in relation to the contents of this announcement or any transaction or arrangement referred to herein. Credit Suisse, which is authorised and regulated by the Financial Services Authority, is acting for RHM and no-one else in connection with the Offer and will not be responsible to anyone else other than RHM for providing the protections afforded to clients of Credit Suisse or for providing advice in relation to the Offer or any other matters referred to in this announcement. Citigroup, which is authorised and regulated by the Financial Services Authority, is acting for RHM and no-one else in connection with the Offer and will not be responsible to anyone else other than RHM for providing the protections afforded to clients of Citigroup or for providing advice in relation to the Offer or any other matters referred to in this announcement. The distribution of this announcement in jurisdictions other than the United Kingdom may be restricted by law and therefore persons into whose possession this announcement comes should inform themselves about, and observe, such restrictions. Any failure to comply with the restrictions may constitute a violation of the securities laws of any such jurisdiction. This announcement does not constitute an offer or an invitation to purchase or subscribe for any securities or a solicitation of an offer to buy any securities pursuant to this announcement or otherwise in any jurisdiction in which such offer or solicitation is unlawful. This announcement has been prepared for the purposes of complying with English law, the Listing Rules, the rules of the London Stock Exchange and the City Code and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws and regulations of any jurisdiction outside of the United Kingdom. This announcement does not constitute an offer to purchase, sell or exchange or the solicitation of an offer to purchase, sell or exchange any securities or the solicitation of any vote or approval in any jurisdiction pursuant to the Offer or otherwise, nor shall there be any purchase, sale or exchange of securities or such solicitation in any jurisdiction in which such offer, solicitation or sale or exchange would be unlawful prior to the registration or qualification under the laws of such jurisdiction. This announcement does not constitute a prospectus or prospectus equivalent document. RHM Shareholders are advised to read carefully the formal documentation in relation to the Offer once the Scheme Document has been dispatched. The New Premier Shares may not be offered or sold in the United States absent registration under the US Securities Act or an exemption therefrom. Premier has not registered and does not intend to register any New Premier Shares under the US Securities Act. Any New Premier Shares will be issued in reliance upon the exemption from the registration requirements of the US Securities Act provided by Section 3(a)(10) thereof. In the event that the Offer is implemented by way of a takeover offer, any public offering of the New Premier Shares to be made in the United States will be made by means of an offer document that may be obtained from Premier or RHM and that will contain detailed information about the terms of the Offer and Premier, RHM and their management, as well as financial statements. RHM Shareholders who are or will be 'affiliates' of RHM or Premier prior to, or Premier after, the effective date of the Scheme will be subject to certain US transfer restrictions relating to the New Premier Shares received under the Offer. Whether or not a RHM Shareholder votes at any Court Meeting or at the RHM Extraordinary General Meeting, if the Offer is completed, the RHM Shares held by all RHM Shareholders will be acquired pursuant to the Scheme and RHM Shareholders will receive one New Premier Share and a payment of 83.2 pence in cash for every RHM Share. RHM will prepare the Scheme Document which together with the Prospectus will be distributed to RHM Shareholders. Premier and RHM strongly advise RHM Shareholders to read the Scheme Document and the Prospectus when they become available because they will contain important information relating to the Offer. Any response in relation to the Offer should be made only on the basis of the information contained in the Scheme Document and the Prospectus. Dealing Disclosure Requirements Under the provisions of Rule 8.3 of the City Code, if any person is, or becomes, 'interested' (directly or indirectly) in one per cent. or more of any class of 'relevant securities' of Premier or of RHM, 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 Scheme becomes effective, or on which the 'offer period' for the purposes of the City Code 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 Premier or RHM, they will be deemed to be a single person for the purpose of Rule 8.3. Under the provisions of Rule 8.1 of the City Code, all 'dealings' in 'relevant securities' of Premier or of RHM by Premier or RHM, 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 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. Forward looking statements This announcement contains statements about Premier and RHM that are or may be forward looking statements. All statements other than statements of historical facts included in this announcement may be forward looking statements. Without limitation, any statements preceded or followed by or that include the words 'targets', 'plans', 'believes', 'expects', 'aims', 'intends', 'will', 'should', 'may', 'anticipates', 'estimates', 'synergies', 'cost savings', 'projects', 'strategy' or, words or terms of similar substance or the negative thereof, are forward looking statements. Forward looking statements include statements relating to the following: (i) the expected timetable for completing this transaction, future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects of Premier, RHM or the Combined Group; (ii) business and management strategies and the expansion and growth of Premier's, RHM's or the Combined Group's operations and potential synergies resulting from the acquisition; and (iii) the effects of government regulation on Premier's, RHM's or the Combined Group's business. These forward looking statements are not guarantees of future performance. They have not been reviewed by the auditors of Premier or RHM. These forward looking statements involve known and unknown risks, uncertainties and other factors which may cause them to differ from the actual results, performance or achievements expressed or implied by such forward looking statements. These forward looking statements are based on numerous assumptions regarding the present and future business strategies of such persons and the environment in which each will operate in the future. Investors are cautioned not to place undue reliance on the forward looking statements, which speak only as of the date they were made. All subsequent oral or written forward looking statements attributable to Premier or RHM or any of their respective members, directors, officers or employees or any persons acting on their behalf are expressly qualified in their entirety by the cautionary statement above. All forward looking statements included in this announcement are based on information available to Premier and RHM on the date hereof. Investors should not place undue reliance on such forward looking statements, and we undertake no obligation to publicly update or revise any forward looking statements. No statement in this announcement is intended to constitute a profit forecast for any period, nor should any statements be interpreted to mean that earnings or earnings per share will necessarily be greater or lesser than those for the relevant preceding financial periods for either Premier or RHM (as appropriate). APPENDIX I Conditions Conditions to the Offer and the implementation of the Scheme The Offer will be conditional upon the Scheme becoming unconditional and becoming effective by not later than 30 April 2007, or such later date (if any) as RHM and Premier may, with the consent of the Panel, agree and the Court may allow. Conditions of the Scheme 1. The Scheme will be subject to the following conditions: a. approval of the Scheme by a majority in number, representing three-fourths or more in value, of the holders of RHM Shares (or the relevant class or classes thereof) present and voting, either in person or by proxy, at the Court Meeting (or at any adjournment of such meeting); b. the resolution(s) required to approve and implement the Scheme being duly passed by the requisite majority at the RHM Extraordinary General Meeting (or any adjournment of such meeting); and c. the sanction (with or without modification) of the Scheme and the confirmation of any reduction of capital involved therein by the Court, an office copy of an order of the Court being delivered for registration to the Registrar of Companies in England & Wales and, in relation to the reduction of capital associated with the Scheme, the registration of the order of the Court with the Registrar of Companies in England & Wales. Conditions of the Offer 2. RHM and Premier have agreed that an office copy of the order of the Court sanctioning the Scheme and confirming the Reduction of Capital will be delivered for registration to the Registrar of Companies for England and Wales, thereby making the Scheme effective, only if the following Conditions are satisfied or waived as referred to below prior to the Scheme being sanctioned by the Court: a. the passing at the Premier Extraordinary General Meeting of such resolution or resolutions as are necessary to approve, implement and effect the Offer and the acquisition of any RHM Shares including a resolution to increase the share capital of Premier and to authorise the creation and allotment of New Premier Shares; b. admission to the Official List of the New Premier Shares becoming effective in accordance with the Listing Rules and the admission of the New Premier Shares to trading on the London Stock Exchange's market for listed securities becoming effective in accordance with its admission and disclosure standards or, if RHM and Premier so agree (and subject to the consent of the Panel), the UK Listing Authority agreeing to admit the New Premier Shares to the Official List and the London Stock Exchange agreeing to admit the New Premier Shares to trading; c. it being established that the Offer or any matters arising from the Offer will not be referred to the UK Competition Commission, for which purpose this Condition will be considered to be satisfied if the Office of Fair Trading has published a notice either: i granting clearance in respect of the Offer; or ii confirming that the Offer will not be referred to the Competition Commission provided that Premier gives suitable undertakings pursuant to Section 33 of the Enterprise Act 2002 to address any competition concerns arising from the Offer. d. the Irish Competition Authority (the 'Authority') informing Premier of its determination that the Offer may be put into effect pursuant to section 21 of the Competition Act 2002 of the Republic of Ireland (the '2002 Act') or the Authority informing Premier and RHM that the Offer will not require a determination pursuant to Section 21(2)(b) of the 2002 Act to carry out a Phase II investigation provided that Premier gives suitable proposals pursuant to the 2002 Act to address any competition concerns arising from the Offer or the period specified in section 19(1)(c) of the 2002 Act having elapsed without the Authority having informed of the determination (if any) it has made under section 21(2)(a) or (b) of the 2002 Act. e. all statutory or regulatory obligations in connection with the Offer or the acquisition by Premier of any shares in, or control of, RHM or any member of the wider RHM Group in any applicable jurisdiction having been complied with; f. no central bank, government or governmental, quasi-governmental, supranational, statutory or regulatory or investigative body, trade agency, court or professional association, institution or professional body or other body or person having statutory or regulatory competence in any jurisdiction (each a 'Relevant Authority') having instituted, implemented or threatened, or having decided to take, institute or threaten, any action, proceeding, suit, investigation, inquiry or reference, or having made, proposed or enacted any statute, regulation or order, or taken any other steps, and there not continuing to be outstanding any statute, regulation or order in any jurisdiction, in each case which is likely to be material in the context of the Offer and which would or might reasonably be expected to: i make the Offer, the Scheme or its implementation or the acquisition or proposed acquisition of any shares or other securities in, or control of, RHM by any member of the wider Premier Group void, illegal or unenforceable under the laws of any jurisdiction or, to an extent which is material, otherwise directly or indirectly restrain, prohibit, restrict or delay the implementation or performance of the same or impose unduly onerous additional conditions or obligations with respect to it, or otherwise impede, challenge or interfere with the Offer or the acquisition of any shares or other securities in, or control of, RHM by any member of the wider Premier Group; ii other than as may be required in connection the satisfaction of Condition 2 (c) or 2(d), require, prevent, limit or delay the divestiture or alter the terms envisaged for such divestiture by any member of the wider RHM Group or any member of the wider Premier Group of all or any portion of their respective businesses, assets or property, or impose any limitation on the ability of any of them to conduct their respective businesses or own their assets or property or any part of them, in any case to an extent which is material in the context of the RHM Group, or the Premier Group, as the case may be, taken as a whole; iii impose any limitation on, or result in a delay in, the ability of any member of the wider Premier Group or the wider RHM Group to acquire or to hold or exercise effectively, directly or indirectly, all or any rights of ownership of any shares or other securities (whether acquired pursuant to the Offer or otherwise) in, or to exercise management control over, any member of the wider RHM Group, in any case to an extent which is material in the context of the RHM Group, or the Premier Group, as the case may be, taken as a whole; iv require any member of the wider Premier Group or the wider RHM Group to acquire or offer to acquire any shares or other securities owned by any third party in the capital of any member of the wider RHM Group or the wider Premier Group or any asset owned by any third party, in any case to an extent which is material in the context of the RHM Group, or the Premier Group, as the case may be, taken as a whole; v result in any member of the wider RHM Group or the wider Premier Group ceasing to be able to carry on business under any name which it presently does so which is material in the context of the Offer; vi impose any limitation on the ability of any member of the wider RHM Group to integrate or co-ordinate its business, or any part of it, with all or any part of the businesses of any other member of the wider RHM Group and/or wider Premier Group, in any case to an extent which is material in the context of the RHM Group, or the Premier Group, as the case may be, taken as a whole; or vii otherwise adversely affect any or all of the businesses, financial position, assets, trading results or prospects of any member of the wider Premier Group or the wider RHM Group, in any case to an extent which is material in the context of the RHM Group, or the Premier Group, as the case may be, taken as a whole; and all applicable waiting and other time periods during which any such Relevant Authority could decide to take, institute, implement or threaten such action, proceeding, suit, investigation, inquiry or reference under the laws of any jurisdiction having expired, lapsed or been terminated; g. all necessary material notifications and filings having been made in connection with the Offer and all statutory and regulatory obligations in connection with the Offer in any jurisdiction having been complied with and all material authorisations, orders, recognitions, grants, consents, clearances, confirmations, certificates, licences, permissions and approvals ('Authorisations') deemed reasonably necessary or appropriate by Premier in any jurisdiction for, or in respect of, the Offer, the Scheme, and the acquisition or the proposed acquisition of the RHM Shares by Premier or any member of the Premier Group having been obtained in terms reasonably satisfactory to both Premier and RHM from all appropriate Relevant Authorities or from any persons or bodies with whom any member of the wider Premier Group or the wider RHM Group has entered into contractual arrangements, all or any applicable waiting and other time periods having expired, lapsed or been terminated (as appropriate) and all such Authorisations (together with all material Authorisations deemed reasonably necessary or appropriate to carry on the business of any member of the wider RHM Group) remaining in full force and effect at the time at which the Offer and the Scheme become otherwise unconditional and there being no notice of any intention to revoke, suspend, restrict, amend or not to renew any such Authorisations; h. save as disclosed in the prospectus of RHM published on 4 July 2005, the annual report and accounts of RHM for the year ended 29 April 2006 (the 'Annual Report'), or publicly announced through a Regulatory Information Service (as defined in the Listing Rules) prior to the date of this announcement or as fairly disclosed in writing to any member of the Premier Group or its advisers by or on behalf of RHM prior to the date of this announcement, there being no provision of any arrangement, agreement, licence, permit, franchise or other instrument to which any member of the wider RHM Group is a party or by or to which any such member or any of their assets is or may be bound, entitled or subject (and which, in any such case is material in the context of the RHM Group taken as a whole) which, in consequence of the Offer, the Scheme or the acquisition or proposed acquisition of any shares or other securities in RHM or any member of the RHM Group by any member of the wider Premier Group, or a change in the control or management of RHM or any member of the RHM Group, could or might reasonably be expected to result in to an extent that is material and adverse in the context of the RHM Group taken as a whole: i any monies borrowed by or other indebtedness or liabilities, actual or contingent, of any member of the wider RHM Group being or becoming repayable or being capable of being declared repayable immediately or prior to their stated maturity, or the ability of any such member to borrow or incur indebtedness being withdrawn, prohibited or adversely affected or being capable of being withdrawn, prohibited or adversely affected; ii the creation or enforcement of any mortgage, charge or other security interest over the whole or any part of the business, property or assets of any member of the wider RHM Group or any such mortgage, charge or security interest (whenever arising or having arisen) becoming enforceable; iii any such arrangement, agreement, licence, permit, franchise or other instrument being, or becoming capable of being, terminated or adversely modified or affected or any action being taken of an adverse nature or any obligation or liability arising thereunder; iv any assets or interests of any member of the wider RHM Group being or falling to be disposed of or charged or any right arising under which any such asset or interest could be required to be disposed of or charged, other than in the ordinary course of business; v any member of the wider RHM Group ceasing to be able to carry on business under any name which it presently does so or any person presently not able to carry on business under any name which any member of the wider RHM Group presently does becoming able to do so; vi the rights, liabilities, obligations or interests or business of any member of the wider RHM Group in or with any firm or body or person, or any arrangements relating to such interests or business, being terminated, modified or adversely affected; or vii the value or the business, financial or trading position, of any member of the wider RHM Group being prejudiced or adversely affected; i. since 29 April 2006 and save as disclosed in the Annual Report, as publicly announced through a Regulatory Information Service (as defined in the Listing Rules) prior to the date of this announcement, or as fairly disclosed in writing to any member of the Premier Group or its advisers or by or on behalf of RHM prior to the date of this announcement, no member of the wider RHM Group having: i issued or agreed to issue or authorised or proposed the issue of additional shares of any class, or securities convertible into, or rights, warrants or options to subscribe for or acquire, any such shares or convertible securities, save as between RHM and any wholly-owned subsidiaries of RHM and except for (a) any options granted prior to 4 December 2006 or (b) any RHM shares unconditionally issued or to be issued upon or pursuant to the exercise of options granted prior to 4 December 2006, or pursuant to awards made prior to 4 December 2006, in each case under the RHM Share Schemes; ii recommended, declared, paid or made or proposed to recommend, declare, pay or make any bonus issue, dividend or other distribution whether in cash or otherwise (save to RHM or a wholly-owned subsidiary of RHM and excluding the interim dividend of 5.5 pence per shareannounced on 4 December 2006 in respect of the financial year commenced on 1 May 2006); iii made or authorised or proposed or announced any material change in its loan capital; iv other than pursuant to the Offer or the Scheme and save for transactions between a wholly-owned subsidiary of RHM and RHM or another wholly-owned subsidiary of RHM and other than in the ordinary course of business, implemented, effected, authorised or proposed or announced its intention to implement, effect, authorise or propose any merger, demerger, reconstruction, amalgamation, scheme, commitment or acquisition, disposal, transfer, mortgage, charge or creation of any security interest of or over any asset or shares in any undertaking, or any right, title or interest in any asset which is material in the context of the RHM Group taken as a whole; v issued, authorised or proposed or announced an intention to authorise or propose, the issue of any debentures, or, save in the ordinary course of business, incurred or increased any indebtedness or contingent liability in each case of an aggregate amount that is material in the context of the RHM Group taken as a whole; vi other than pursuant to the Offer or the Scheme purchased, redeemed or repaid or proposed or announced any proposal to purchase, redeem or repay any of its own shares or other securities or the equivalent, or reduced or proposed the reduction of, or made or proposed the making of any other change to, any part of its share capital; vii entered into or varied any material contract, including any guarantee, transaction or binding commitment (whether in respect of capital expenditure or otherwise) which: (i) is of a material and long-term or unusual or onerous nature or magnitude; or (ii) would be materially restrictive of the business of any member of the wider RHM Group in any way; or (iii) involves or could involve a material obligation of such a nature or magnitude and which is other than in the ordinary course of business, or announced any intention to do so; viii entered into or varied or made any offer which remains open for acceptance to enter into or vary the terms of any material contract, including any service contract, with any of the directors or senior executives of any member of the wider RHM Group; ix entered into any contract or commitment restricting in a material or adverse way the ability of any member of the wider RHM Group to compete with any other person; x taken or proposed any corporate action or passed any resolution for or had any legal proceedings instituted against it for its winding-up (voluntarily or otherwise), dissolution or re-organisation or for the appointment of a receiver, administrator, administrative receiver, trustee or similar officer of all or any of its assets and revenues or any analogous proceedings or steps in any jurisdiction or for the appointment of any analogous person in any jurisdiction; xi been unable or having admitted in writing that it is unable to pay its debts or having stopped or suspended, or threatened to stop or suspend, payment of its debts generally or ceased or threatened to cease carrying on all or a substantial part of its business; xii waived or compromised any material claim against any person otherwise than in the ordinary course of business; xiii terminated or varied the terms of any material agreement or arrangement between any member of the RHM Group and any other person in a manner which would or might reasonably be expected to have a material adverse effect on the financial position of the RHM Group taken as a whole; xiv made or agreed or consented to any change to the terms of the trust deeds constituting the pension schemes established for its directors and/or employees and/or their dependants or to the benefits which accrue, or to the pensions which are payable under such schemes, or to the basis on which qualification for or accrual or entitlement to such benefits or pensions are calculated or determined or to the basis upon which the liabilities (including pensions) of such pension schemes are funded or made, or agreed or consented to any change to the trustees involving the appointment of a trust corporation; xv other than pursuant to the Offer or the Scheme made any alteration to its memorandum or articles of association, or other constitutional documents; or xvi entered into or made an offer which remains open for acceptance to enter into any agreement, commitment or arrangement or passed any resolution or announced any intention with respect to any of the transactions, matters or events referred to in this paragraph (i). j. Since 29 April 2006, and save as disclosed in the Annual Report or as publicly announced through a Regulatory Information Service (as defined in the Listing Rules) prior to the date hereof or as fairly disclosed in writing to any member of the Premier Group or its advisers by or on behalf of RHM prior to the date of this announcement: i no investigation or enquiry by any Relevant Authority having statutory or regulatory competence (save as a result of the Offer and the Scheme) and no litigation, arbitration proceedings, prosecution or other legal proceedings to which any member of the RHM Group is or may become a party, whether as claimant or defendant or otherwise, having been threatened in writing, announced or instituted by or remaining outstanding against or in respect of any member of the wider RHM Group which, in any such case, is material in the context of the RHM Group taken as a whole; ii there having been no material adverse change in the business, assets, financial position, trading results, profits or prospects of the RHM Group taken as a whole; iii other than meeting existing commitments no contingent or other liability of any member of the wider RHM Group having arisen or been created which would or might be likely materially and adversely to affect the RHM Group taken as a whole; iv no steps having been taken which would or are reasonable likely to result in the withdrawal, cancellation, termination or modification of any licence held by any member of the wider RHM Group which is necessary for the proper carrying on of its business and which, in any case, is material in the context of the wider RHM Group taken as a whole; k. Save as disclosed in the Annual Report or as publicly announced through a Regulatory Information Service (as defined in the Listing Rules) prior to the date of this announcement or as fairly disclosed in writing to any member of the Premier Group or its advisers by or on behalf of RHM prior to the date of this announcement, Premier not having discovered that: i any financial, business or other information concerning the wider RHM Group which has been disclosed at any time by any member of the wider RHM Group, whether publicly or, in the context of the Offer, to any member of the wider Premier Group or its advisers, is materially misleading or contains material misrepresentations of fact or omits to state a material fact necessary to make the information contained therein not misleading in any material respect; ii any member of the wider RHM Group is subject to any material liability, contingent or otherwise, arising other than in the ordinary course of business; iii any past or present member of the wider RHM Group or predecessor of any member of the wider RHM Group has not complied with all applicable laws, statutes, ordinances or regulations of any jurisdiction or other requirement of any Relevant Authority with regard to environmental matters including, without limitation, to the emission, disposal, discharge, spillage or leakage of any waste or hazardous substance or any substance likely to impair the environment or harm human health, or there has otherwise been any such activity, which non-compliance or any other emission, disposal, discharge, spillage or leakage which has occurred and would be likely to give rise to any material liability (whether actual or contingent) on the part of any member of the wider RHM Group; iv there is, or is likely to be, any material liability (whether actual or contingent) to make good, remediate, repair, reinstate or clean up any property now or previously owned, occupied, made use of, or harmed, contaminated or in any way affected by any past or present member of the wider RHM Group or any predecessor of any member of the wider RHM Group or any controlled waters under any environmental legislation, regulation, notice, circular or order of any Relevant Authority or any common law liability (including, without limitation, contractual); v circumstances exist whereby a person or class of persons or any entity or entities would be likely to have any claim or claims in respect of any product, by-product or process or materials used or existing now or previously sold or carried out by or in any way dealt with or handled by or resulting from any past or present member of the wider RHM Group which claim or claims would be likely to give rise to any liability, whether actual or contingent; or vi the wider RHM Group has not complied with any applicable law or regulation governing the conduct of its business in any respect which would or might be likely adversely to affect the RHM Group taken as a whole, which, in each case, is or would be material and adverse in the context of the RHM Group taken as a whole. For the purposes of these Conditions, the 'wider RHM Group' means RHM and its subsidiary undertakings, associated undertakings and any other undertaking in which RHM and/or such undertakings (aggregating their interests) have a significant interest and the 'wider Premier Group' means Premier and its subsidiary undertakings, associated undertakings and any other undertaking in which Premier and/or such undertakings (aggregating their interests) have a significant interest and for these purposes 'subsidiary undertaking', 'associated undertaking' and 'undertaking' have the meanings given by the Companies Act, other than paragraph 20(1)(b) of Schedule 4A to that Act which shall be excluded for this purpose, and 'significant interest' means a direct or indirect interest in ten per cent. or more of the equity share capital (as defined in that Act). Subject to the requirements of the Panel, Premier reserves the right to waive, in whole or in part, all or any of Conditions 2(e) to (k) (inclusive). If Premier is required by the Panel to make an offer for RHM Shares under the provisions of Rule 9 of the City Code, Premier may make such alterations to the Conditions as are necessary to comply with the provisions of that Rule. Premier reserves the right to elect to implement the Offer by way of a takeover offer. In such event, such offer will be implemented on the same terms (subject to appropriate amendments, including (without limitation) an acceptance condition set at ninety per cent. of the shares to which such offer relates), so far as applicable, as those which would apply to the Scheme. In the event that Premier elects to implement the Offer by way of a takeover offer, Premier shall be under no obligation to waive or treat as satisfied any of Conditions 2(e) to (k) (inclusive) by a date earlier than the date specified above for the satisfaction thereof notwithstanding that the other Conditions of the Offer may at such earlier date have been waived or fulfilled and that there are at such earlier date no circumstances indicating that any of such Conditions may not be capable of fulfilment or, to the extent permitted, waived. In the event that the Office of Fair Trading ('OFT') indicates that it is actively considering making a reference to the Competition Commission ('CC'), Premier has agreed to offer to make such divestments or take such other steps as may be required to remedy any competition concerns that may be raised by the OFT in order to avoid a reference to the CC by the OFT. In the event that the Irish Competition Authority indicates that it is actively considering undertaking a Phase II investigation under Section 22 of the Irish Competition Act 2002, Premier has agreed to offer to make such divestments or take such other steps as may be required to remedy any concerns raised by the Irish Competition Authority in order to avoid a Phase II investigation. Certain further terms of the Offer The Scheme will not proceed if, before the date of the Court Meeting and the RHM Extraordinary General Meeting, the European Commission initiates proceedings under Article 6(1)(c) of the Regulation in respect of the Offer or any matter arising from or relating to the Offer or any matter arising from or relating to the Offer is referred to the Competition Commission. The RHM Shares to be acquired by Premier will be acquired fully paid and free from all liens, equities, charges, encumbrances, rights of pre-emption and any other third party rights or interests of any nature whatsoever and together with all rights now or hereafter attaching thereto, including the right to receive and retain in full all dividends and other distributions declared, made or paid after 4 December 2006 other than the interim dividend of 5.5 pence per share announced on 4 December 2006 in respect of the six months ended 28 October 2006. APPENDIX II BASES AND SOURCES In this announcement: a. the value placed by the Offer on the existing RHM Shares (approximately Â£1,227 million) is based on 348,227,273 RHM Shares in issue on 1 December 2006, the latest practicable date prior to the date of this announcement; b. the Closing Price of the Premier Shares and the RHM Shares referred to in this announcement is derived from the Daily Official List of the London Stock Exchange; c. unless otherwise stated, the financial information relating to RHM and Premier is extracted from the consolidated financial statements of RHM, Premier and the Campbell's UK and Ireland business for the relevant period; and d. references to pro forma sales of Â£2.6 billion are calculated by aggregating RHM's reported net sales of Â£1,559.3 million for the 52 weeks ended 29 April 2006, Premier's reported net sales of Â£789.7 million for the 12 months ended 31 December 2005, and the Campbell's UK and Ireland business reported net sales of Â£262.7 million for the 12 months ended 31 July 2005. In calculating the Combined Group's UK net sales, the following figures have been used: RHM reported UK net sales of Â£1,434.3 million for the 52 weeks ended 29 April 2006, Premier reported UK net sales of Â£757.4 million for the 12 months ended 31 December 2005, and the Campbell's UK and Ireland business reported UK net sales of Â£231.5 million for the 12 months ended 31 July 2005. APPENDIX III DEFINITIONS 'Acquisition' the proposed acquisition by Premier of RHM to be implemented by way of the Scheme; 'Admission' admission of the New Premier Shares to the Official List of the UK Listing Authority and to trading on the main market for listed securities of the London Stock Exchange; 'Closing Price' the closing middle market quotation of RHM Shares or Premier Shares, as the case may be; 'Combined Group' the Premier Group as enlarged following completion of the Offer; 'Conditions' the conditions to the implementation of the Offer, as set out in Appendix I of this announcement and to be set out in the Scheme Document; 'Circular' the circular to be issued by Premier to Premier Shareholders in connection with the Offer; 'Citigroup' Citigroup Global Markets Limited; 'City Code' or 'Code' the City Code on Takeovers and Mergers; 'Combined Group' Premier as enlarged following Completion of the Offer; 'Companies Act' the Companies Act 1985 (as amended); 'Court' the High Court of Justice in England & Wales; 'Court Meeting' the meeting or meetings of RHM Shareholders to be convened by order of the Court pursuant to section 425 of the Companies Act 1985 to approve the Scheme; 'Credit Suisse' Credit Suisse Securities (Europe) Limited; 'FSMA' the Financial Services and Markets Act 2000, as amended; 'Hoare Govett' Hoare Govett Limited; 'Ireland' the Republic of Ireland; 'Listing Rules' the Listing Rules of the UK Listing Authority; 'London Stock Exchange' London Stock Exchange plc; 'New Premier Shares' Premier Shares to be issued fully paid pursuant to the Offer; 'N M Rothschild' N M Rothschild & Sons Limited; 'Offer' the offer by Premier to acquire RHM to be implemented by way of the Scheme and the other matters relevant thereto to be considered at the Court Meeting and the RHM Extraordinary General Meeting and the Premier Extraordinary General Meeting; 'Official List' the Official List of the UK Listing Authority; 'Panel' the Panel on Takeovers and Mergers; 'Premier'or 'Premier Premier Foods plc; Foods' 'Premier Board' the Board of directors of Premier; 'Premier Competing means a proposed offer, tender offer, merger, Proposal' acquisition, scheme of arrangement, recapitalisation, other business combination (including a transaction involving a dual listed company structure), or investment (whether for cash or otherwise) relating to any acquisition or purchase of 50 per cent. or more of the issued and to be issued share capital of Premier or all or substantially all of the business and assets of Premier, or anything analogous to the preceding proposed by any person which is not an associate (as defined in the Code) of RHM and for these purposes 'proposed' shall include an approach with a view to making a proposal with regard to the same; 'Premier Extraordinary the extraordinary general meeting of Premier General Meeting' Shareholders (and any adjournment thereof), convened in connection with the Offer; 'Premier Group' Premier, its subsidiaries and subsidiary undertakings from time to time, or any of them, as the context requires; 'Premier Shareholders' holders of Premier Shares; 'Premier Shares' ordinary shares of 1 pence each in the capital of Premier; 'Prospectus' the prospectus to be issued by Premier and sent to RHM Shareholders in connection with the Offer; 'Reduction of Capital' the reduction of RHM's share capital associated with the cancellation of the RHM Shares provided for by the Scheme; 'Relevant Notices' the Irish Competition Authority having informed Premier Foods and RHM: (a) of its determination to approve the Acquisition pursuant to Section 21(2)(a) of the Irish Competition Act 2002; or (b) that the Acquisition will not require a determination pursuant to Section 21(2)(b) of the Irish Competition Act 2002 to carry out a Phase II investigation provided that Premier gives suitable proposals pursuant to the Irish Competition Act 2002 to address the competition concerns arising from the Acquisition; 'Relevant Publications' a publication by the Office of Fair Trading that it has either: (a) granted clearance in respect of the Acquisition; or (b) confirmed that the Acquisition will not be referred to the Competition Commission provided that Premier gives a suitable undertaking pursuant to Section 33 of the Enterprise Act 2002 to address the competition concerns arising from the Acquisition; 'RHM' RHM plc; 'RHM Board' the Board of directors of RHM; 'RHM Competing Proposal' means a proposed offer, tender offer, merger, acquisition, scheme of arrangement, recapitalisation, other business combination (including a transaction involving a dual listed company structure), or investment (whether for cash or otherwise) relating to any acquisition or purchase of 50 per cent. or more of the issued and to be issued share capital of RHM or all or substantially all of the business and assets of RHM, or anything analogous to the preceding proposed by any person which is not an associate (as defined in the Code) of Premier and for these purposes 'proposed' shall include an approach with a view to making a proposal with regard to the same; 'RHM Extraordinary the extraordinary general meeting of RHM General Meeting' Shareholders (and any adjournment thereof), convened in connection with the Offer and the Scheme; 'RHM Group' RHM, its subsidiaries, and any holding company of RHM (intermediate or otherwise) and their subsidiary undertakings from time to time, or any of them, as the context requires; 'RHM Shareholders' holders of RHM Shares; 'RHM Share Schemes' the RHM Group Performance Share Plan and the RHM Group Sharesave Scheme; 'RHM Shares' the ordinary shares of 0.1 pence each in the capital of RHM; 'ROIC' means return on invested capital; 'Rothschild' N M Rothschild & Sons Limited; 'Scheme Document' the document to be sent to RHM Shareholders setting out the full terms of the Scheme and containing notices convening the Court Meeting and the RHM Extraordinary General Meeting and enclosing related forms of proxy; 'Scheme' the proposed scheme of arrangement under section 425 of the Companies Act to effect the Offer, the full terms of which will be set out in the Scheme Document; 'UK Listing Authority' the Financial Services Authority acting in its capacity as the competent authority for the purposes of Part VI of FSMA; 'United Kingdom' or 'UK' the United Kingdom of Great Britain and Northern Ireland; 'United States' or 'US' the United States of America, its territories and possessions, any State of the United States of America and the District of Columbia and all other areas subject to its jurisdiction; 'US Securities Act' the US Securities Act of 1933 (as amended); and 'WACC' means weighted average cost of capital. This information is provided by RNS The company news service from the London Stock Exchange

Companies

Premier Foods (PFD)

Wednesday, 3rd July 2024

COMPANIES COVERED:

TPT CRN EQLS

Topps Tiles quarterly trading update shows broader economic woes dragging, Equals Group impresses with revenues but shares fall, whilst Cairn Homes maintains FY guidance and announces €45m share buyback.

Full Archive

UK 100

Latest directors dealings

17 minutes ago Marks & Spencer Group
28 minutes ago Investec
29 minutes ago Severn Trent
31 minutes ago LSL Property Services
58 minutes ago Tesco

All directors dealings today