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Babcock Intnl Group (BAB)

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Friday 04 June, 2004

Babcock Intnl Group

Offer Update

Babcock International Group PLC
04 June 2004

 Not for release or publication in or into the United States, Canada, Japan or
                                   Australia





                                                                     4 June 2004



  14 JUNE 2004 FINAL DATE FOR OFFER TO BECOME UNCONDITIONAL AS TO ACCEPTANCES



Introduction



On 22 March 2004, the Board of Babcock and the Peterhouse Directors (other than
David Jackson and Simon Foster) recommended a cash and shares offer for
Peterhouse to be made by Credit Suisse First Boston on behalf of Babcock.  The
Offer was made on the following basis:


for each Peterhouse Share          1.1858 Babcock Shares and 64.8 pence in cash 
                                   plus the recommended final dividend of 
                                   4 pence per share



and so in proportion for any other number of Peterhouse Shares.



The Value of the Offer



The current value of the Offer is 201.6 pence per Peterhouse Share (including
the right to receive the final dividend of 4.0 pence) based on the closing
middle-market price of a Babcock Share on 2 June 2004, which represents a 43.7
per cent. premium to the average closing middle market price of approximately
140.2 pence per Peterhouse Share in the period between 1 December 2003 and 30
January 2004, being the last business day prior to the announcement by
Peterhouse that it had received an approach which might or might not lead to an
offer for the whole of the issued share capital of Peterhouse.  In addition,
Peterhouse Shareholders will be entitled in due course to the Babcock final
dividend for the year ended 31 March 2004 of 2.1 pence per Babcock Share
(equivalent to 2.49 pence per Peterhouse Share) assuming the Offer is wholly
unconditional and the Peterhouse Shareholder has accepted the Offer.



In relation to the Network Rail compensation, the Peterhouse Directors
(including David Jackson and Simon Foster) confirmed in their letter of 21 May
2004, that there has been no material change in the amount of the compensation
settlement being discussed with Network Rail since the Offer was announced on 22
March 2004. In addition, the Peterhouse Directors (other than David Jackson and
Simon Foster) confirm that the anticipated compensation settlement was taken
into account when making the recommendation of the Offer.



At the time of the announcement of the Offer, David Jackson and Simon Foster
were involved in a potential competing offer for Peterhouse.  On 15 April 2004,
David Jackson and Simon Foster announced that they were no longer involved in a
possible offer for Peterhouse and had no intention of making an offer for
Peterhouse.  There have been no other offers made for Peterhouse.



Peterhouse Shareholders' attention is drawn to the letter from the Peterhouse
Directors (other than David Jackson and Simon Foster), dated 21 May 2004,
reaffirming their continued recommendation of the Offer.  Peterhouse
Shareholders should be reminded that the recommendation is by a majority of six
to two.  The six directors who recommend the Offer, comprise three executive
directors (namely the Chief Executive, the Finance Director and the Chief
Executive of Peterhouse's rail division, First Engineering) and all three
non-executive directors of Peterhouse.  Peterhouse Shareholders should be aware
that the Peterhouse Directors (other than David Jackson and Simon Foster) expect
that there will be significant board changes at Peterhouse, at both executive
and non-executive level, in the event that the Offer from Babcock either lapses
or is withdrawn.



Peterhouse Shareholders must decide what the value of Peterhouse Shares is
likely to be in the event that Babcock lapses its Offer when compared to the
prospects within the Enlarged Group.



The Benefits of the Enlarged Group



The case remains that the Offer is the only opportunity for Peterhouse
Shareholders to participate in the future growth of a larger and stronger group,
that will be better placed to secure the increasingly large and complex projects
inherent in the UK support services sector.  An Enlarged Group will have a
significantly larger customer base, have a more diverse skill set than
Peterhouse has at present and will be a pure infrastructure and support services
business of significant scale.



Babcock's recently published full year results showed significant growth in
turnover and profits, and the strong cash flow and order book leave Babcock well
placed to continue this trend.  Babcock's shares have outperformed the FTSE
All-Share Index by 77 per cent. over the five years to 31 March 2004.



Recommendation



The Peterhouse Directors (other than David Jackson and Simon Foster), who have
been so advised by Close Brothers, continue to recommend the Offer.  In
providing their advice to the Peterhouse Directors (other than David Jackson and
Simon Foster), Close Brothers has taken into account the commercial assessments
of the Peterhouse Directors (other than David Jackson and Simon Foster).



Shareholders will have received a copy of an announcement dated 28 May 2004
concerning David Jackson and Simon Foster.  It must be emphasised that this was
only the opinion of David Jackson and Simon Foster and is not the view of the
remaining six directors of Peterhouse who continue to fully support and
recommend the Offer from Babcock.



Action to be taken immediately



The Board of Babcock has extended the Offer and the Mix and Match Facility until
1.00 p.m. on 14 June 2004.  Under the Takeover Code, the Offer is not capable of
being kept open after this date unless the Offer has previously become
unconditional as to acceptances, except with the consent of the Panel.
Peterhouse Shareholders are encouraged if they have not done so already, to
return their Form of Acceptance without delay, and in any event before 14 June
2004 (in the event that the original Form of Acceptance and reply envelope has
been misplaced, copies are enclosed with a copy of this announcement, which is
being sent to peterhouse shareholders).  This is the only offer for Peterhouse
Shareholders and it will not be increased or otherwise amended.*



ENQUIRIES


Babcock International Group PLC                              +44 (0)20 7291 5000
Gordon Campbell, Chairman
Peter Rogers, Chief Executive
Bill Tame, Finance Director

Peterhouse Group Plc                                         +44 (0)1422 374 757
Ted Adams, Deputy Chairman
Alan Robertson, Chief Executive
John O'Kane, Finance Director

Credit Suisse First Boston (Financial Adviser to Babcock)    +44 (0)20 7888 8888
Andrew Christie
Richard Probert

Cazenove (Broker to Babcock)                                 +44 (0)20 7588 2828
Malcolm Moir
Dermot McKechnie

Close Brothers (Financial Adviser to Peterhouse)             +44 (0)20 7655 3100
Peter Alcaraz
Gareth Davies

Financial Dynamics (Public Relations Adviser to Babcock)     +44 (0)20 7831 3113
Andrew Lorenz
Robert Gurner

Buchanan Communications (Public Relations Adviser to Peterhouse) +44 (0)20 7466 5000
Tim Anderson
Isabel Podda
James Strong





The Board of Babcock International Group PLC accept responsibility for the
information contained in this announcement. To the best of the knowledge and
belief of the Board of Babcock International Group PLC (who have taken all
reasonable care to ensure that such is the case), the information contained in
this announcement is in accordance with the facts and does not omit anything
likely to affect the import of such information.



The directors of Peterhouse Group Plc (other than David Jackson and Simon
Foster) accept responsibility for the information contained in this announcement
relating to Peterhouse Group Plc. To the best of the knowledge and belief of the
directors of Peterhouse Group Plc (other than David Jackson and Simon Foster)
(who have taken all reasonable care to ensure that such is the case), the
information contained in this announcement is in accordance with the facts and
does not omit anything likely to effect the import of such information.



Credit Suisse First Boston, which is regulated in the United Kingdom by the
Financial Services Authority, is acting only for Babcock and no-one else in
connection with the Offer and will not regard any other person as its client or
be responsible to anyone other than to Babcock for providing the protections
afforded to clients of Credit Suisse First Boston, nor for giving advice in
relation to the Offer or any other matter referred to in this announcement.



Close Brothers, which is regulated in the United Kingdom by the Financial
Services Authority, is acting only for Peterhouse and no-one else in connection
with the Offer and will not regard any other person as its client or be
responsible to anyone other than to Peterhouse for providing the protections
afforded to clients of Close Brothers, nor for giving advice in relation to the
Offer or any other matter referred to in this announcement.



Close Brothers has given and not withdrawn its written consent to the issue of
this announcement with the inclusion of the references to its name in the form
and context in which they appear.



Save as publicly disclosed the Directors of Babcock are not aware of any
material change in the financial or trading position of Babcock during the offer
period. There has been no material change to the information contained in the
Offer Document.



Save as publicly disclosed the Peterhouse Directors (other than David Jackson
and Simon Foster) are not aware of any material change in the financial or
trading position of Peterhouse during the offer period. There has been no
material change to the information contained in the Offer Document.



All terms defined in the Offer Document dated 15 April 2004 have the same
meaning in this announcement, unless the context requires otherwise.



The Offer is not being made directly or indirectly in or into the United States,
Canada, Australia or Japan or to any US person or resident of Canada, Australia
or Japan. This announcement may not be distributed or sent in, into or from the
United States, Canada, Australia or Japan or to any US person or resident of
Canada, Australia or Japan and doing so may render invalid any purported
acceptance.



The New Babcock Shares have not been, and will be not be, registered under the
US Securities Act of 1933. Accordingly, the New Babcock Shares may not be
offered, sold or delivered in the United States or to US persons, unless an
exemption from the registration requirements of the US Securities Act 1933 (as
amended) is available. Also, the relevant clearances have not been, and will not
be, obtained from the securities commission of any province of Canada. No
prospectus in relation to the New Babcock Shares has been, or will be, lodged or
registered by the Australian Securities Commission, nor have any steps been
taken or will any steps be taken to enable the New Babcock Shares to be offered
in Japan in compliance with applicable securities laws in Japan. Accordingly,
the New Babcock Shares may not be offered, sold, re-sold or delivered, directly
or indirectly, in or into the United States, Canada, Australia or Japan.



This announcement does not constitute an offer to sell or invitation to purchase
any securities or the solicitation of any vote or approval in any jurisdiction.



The release, publication or distribution of this announcement in certain
jurisdictions may be restricted by law and therefore persons in such
jurisdictions into which this announcement is released, published or distributed
should inform themselves about and observe such restrictions.



*  Babcock reserves the right to increase or otherwise amend the terms of the
Offer should a competitive situation arise.


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

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