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Friday 16 February, 2001

De'Longhi Pinguino

Offer for Kenwood Appliances

De'Longhi Pinguino S.A.
16 February 2001

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

                                                               16 February 2001

                            Kenwood Appliances plc

   Recommended cash offer by Deutsche Bank AG London on behalf of De'Longhi
   Pinguino SA (the 'Offeror'), a wholly-owned subsidiary of De'Longhi SpA
 ('De'Longhi'), for Kenwood Appliances plc ('Kenwood') at 100 pence per share

Summary

The boards of De'Longhi, the Offeror and Kenwood are pleased to announce that
they have reached agreement on the terms of a recommended cash offer (the
'Offer'), to be made by Deutsche Bank on behalf of the Offeror, to acquire the
entire issued and to be issued share capital of Kenwood.

The Offer


The Offer will be 100 pence in cash for each Kenwood Share and values
Kenwood's issued share capital at approximately £45.9 million.


The Offer represents a premium of approximately 37 per cent. to the closing
middle-market price of 73 pence per Kenwood Share, as derived from the
Official List on 12 December 2000 (being the last dealing day prior to the
announcement by Kenwood that it was in talks which might lead to a takeover
offer being made for Kenwood), and a premium of approximately 32 per cent.
over the average of the closing middle-market price of 76 pence per Kenwood
Share during the three months up to and including 15 February 2001.


The Offeror has received undertakings to accept the Offer from certain Kenwood
Shareholders in respect of, in aggregate, 9,802,679 Kenwood Shares,
representing approximately 21.38 per cent. of Kenwood's existing issued share
capital.


Certain of the undertakings given by Kenwood Shareholders (representing
approximately 17.07 per cent. of the total issued share capital of Kenwood)
remain binding, even in the event of a competing offer for Kenwood unless and
until the Offer lapses, is withdrawn or is not made. To the extent that the
Offeror acquires from these Kenwood Shareholders some or all of the Kenwood
Shares to which their undertaking relates by way of market or off-market
purchases at any time prior to their acceptance of the Offer, these Kenwood
Shareholders will be released from their obligations under their undertaking
in relation to such Kenwood Shares.


Certain of the undertakings given by Kenwood Shareholders (representing
approximately 3.26 per cent. of the total issued share capital of Kenwood)
will cease to be binding if within twenty-one days of this announcement any
third party shall in accordance with the Code announce a firm intention to
make an offer for Kenwood Shares at a value which is equal to or greater than
115 pence per share.


The directors of Kenwood and certain persons connected with them have
undertaken to De'Longhi to accept the Offer in respect of 482,015 Kenwood
Shares, representing approximately 1.05 per cent. of Kenwood's existing issued
share capital. These undertakings remain binding, even in the event of a
competing offer for Kenwood, unless and until the Offer lapses, is withdrawn
or is not made.


Reasons for the Offer


The combination of De'Longhi's business with that of Kenwood will create a
leading European manufacturer and distributor of air conditioning, heating,
cooking and food preparation appliances. This is expected to allow
manufacturing and distribution efficiencies and help to improve the
competitive position of the Enlarged Group internationally.


The directors of Kenwood, who have been so advised by PricewaterhouseCoopers
and Ernst & Young, consider the terms of the Offer to be fair and reasonable.
PricewaterhouseCoopers act as auditors to De'Longhi and, accordingly, Ernst &
Young have advised the directors of Kenwood for the purposes of Rule 3 of the
Code. Accordingly, the directors of Kenwood intend unanimously to recommend
that Kenwood Shareholders accept the Offer as they have undertaken to do in
respect of their beneficial holdings of Kenwood Shares. In providing advice to
the directors of Kenwood, PricewaterhouseCoopers and Ernst & Young have taken
into account the commercial assessment of the directors of Kenwood.


Commenting on the Offer, Mr David Nash, Chairman of Kenwood said:


'The Board of Kenwood has had a number of approaches in recent months but is
unanimous in recommending the cash offer from De'Longhi as being in the best
interests of shareholders.

Becoming part of De'Longhi represents an opportunity for Kenwood and its
employees to work with a substantial European partner capable of making the
most of Kenwood's strengths and reputation in the market place.'

Commenting on the Offer, Mr Giuseppe De'Longhi, President of De'Longhi said:


'We are delighted to announce the Offer for Kenwood and believe it to be an
important milestone in the development of De'Longhi. In addition, we believe
that the brand strengths of Kenwood and De'Longhi together with the
complementary geographic presence of the two businesses will improve the
positioning of the Enlarged Group in the cooking and food preparation sector.'


Deutsche Bank is acting as financial adviser and broker to De'Longhi and the
Offeror.


This summary should be read in conjunction with the full text of this
Announcement. The conditions to which the Offer will be subject are set out or
referred to in Part 2 of this Announcement and will be set out in full in the
Offer Document. The Offer Document will be despatched to Kenwood shareholders
shortly.


Enquiries:

De'Longhi
                                                 Tel: 00 39 0422 4131
Stefano Beraldo, Chief Executive

Deutsche Bank
                                                 Tel: 020 7545 8000
Alastair Mathieson

Angela Campbell-Noe

Kenwood
                                                 Tel: 02392 476000
Colin Gordon, Chief Executive

PricewaterhouseCoopers
                                                 Tel: 020 7583 5000
Richard Lazarus

Mark Butler

Ernst & Young
                                                 Tel: 020 7951 2000
Paul Smith

Stephen Skeels

Citigate Dewe Rogerson
                                                 Tel: 020 7638 9571
Simon Rigby



This Announcement does not constitute an offer or an invitation to acquire any
securities.

Deutsche Bank AG London ('Deutsche Bank'), which is regulated in the United
Kingdom by The Securities and Futures Authority Limited, is acting exclusively
for De'Longhi and the Offeror and no-one else in connection with the Offer and
will not be responsible to anyone other than De'Longhi and the Offeror for
providing the protections afforded to customers of Deutsche Bank or for
providing advice in relation to the Offer, the contents of this Announcement
or any other matters referred to herein.


PricewaterhouseCoopers, which is authorised to carry out investment business
by the Institute of Chartered Accountants in England and Wales, is acting
exclusively for Kenwood and no-one else in connection with the Offer and will
not be responsible to anyone other than Kenwood for providing the protections
afforded to customers of PricewaterhouseCoopers or for providing advice in
relation to the Offer, the contents of this Announcement or any other matters
referred to herein.


Ernst & Young, which is authorised to carry out investment business by the
Institute of Chartered Accountants in England and Wales, is acting exclusively
for Kenwood and no-one else in connection with the Offer and will not be
responsible to anyone other than Kenwood for providing the protections
afforded to customers of Ernst & Young or for providing advice in relation to
the Offer, the contents of this Announcement or any other matters referred to
herein.


The Offer will not be made, directly or indirectly, in or into, or by use of
the mails of, or by any means or instrumentality (including without limitation
facsimile transmission, telex or telephone) of interstate or foreign commerce
of, or any facility of a national securities exchange of, the United States
nor will it be made in or into Canada, Australia or Japan. Accordingly, copies
of this Announcement, the Offer Document and the Form of Acceptance are not
being, and must not be, mailed or otherwise distributed or sent in, into or
from the United States, Canada, Australia or Japan.


PART 1


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




   Recommended cash offer by Deutsche Bank AG London on behalf of De'Longhi
   Pinguino SA (the 'Offeror'), a wholly-owned subsidiary of De'Longhi SpA
('De'Longhi'), for Kenwood Appliances plc ('Kenwood') at 100 pence per Kenwood
                                    share


Introduction


The boards of De'Longhi, the Offeror and Kenwood are pleased to announce that
they have agreed the terms of a recommended cash offer (the 'Offer') to be
made by Deutsche Bank, on behalf of the Offeror, a wholly owned subsidiary of
De'Longhi, for the whole of the issued and to be issued share capital of
Kenwood. The Offer will be 100 pence in cash for each Kenwood Share and values
Kenwood at approximately £45.9 million.


Recommendation


The directors of Kenwood, who have been so advised by PricewaterhouseCoopers
and Ernst & Young, consider the terms of the Offer to be fair and reasonable.
PricewaterhouseCoopers act as auditors to De'Longhi and, accordingly, Ernst &
Young have advised the directors of Kenwood for the purposes of Rule 3 of the
Code. Accordingly, the directors of Kenwood intend unanimously to recommend
that Kenwood Shareholders accept the Offer as they have undertaken to do in
respect of their beneficial holdings of Kenwood Shares. In providing advice to
the directors of Kenwood, PricewaterhouseCoopers and Ernst & Young have taken
into account the commercial assessment of the directors of Kenwood.


Irrevocable undertakings to accept the Offer


The Offeror has received undertakings to accept the Offer from certain
shareholders in respect of, in aggregate, 9,802,679 Kenwood Shares,
representing approximately 21.38 per cent. of Kenwood's existing ordinary
issued share capital.


Certain of the undertakings given by Kenwood Shareholders (representing
approximately 17.07 per cent. of the total issued share capital of Kenwood)
remain binding, even in the event of a competing offer for Kenwood unless and
until the Offer lapses, is withdrawn or is not made. To the extent that the
Offeror acquires from these Kenwood Shareholders some or all of the Kenwood
Shares to which their undertaking relates by way of market or off-market
purchases at any time prior to their acceptance of the Offer, these Kenwood
Shareholders will be released from their obligations under their undertaking
in relation to such Kenwood Shares.


Certain of the undertakings given by Kenwood Shareholders (representing
approximately 3.26 per cent. of the total issued share capital of Kenwood)
will cease to be binding if within twenty-one days of this announcement any
third party shall in accordance with the Code announce a firm intention to
make an offer for Kenwood Shares at a value which is equal to or greater than
115 pence per share.


The directors of Kenwood and certain persons connected to them have undertaken
to De'Longhi to accept the Offer in respect of 482,015 Kenwood Shares,
representing approximately 1.05 per cent. of Kenwood's existing issued share
capital. These undertakings remain binding, even in the event of a competing
offer for Kenwood, unless and until the Offer lapses, is withdrawn or is not
made.


The Offer


The Offer, which will be subject to the conditions and further terms set out
or referred to in Part 2 of this Announcement and to be set out in full in the
Offer Document to be sent to Kenwood Shareholders, will be made on the
following basis:


For each Kenwood Share 100 pence in cash


The Offer values the issued share capital of Kenwood at approximately £45.9
million and represents a premium of approximately 37 per cent. to the closing
middle-market price of 73 pence per Kenwood Share, as derived from the
Official List, on 12 December 2000 (being the last dealing day prior to the
announcement by Kenwood that it was in talks which might lead to a takeover
offer being made for Kenwood) and a premium of approximately 32 per cent. over
the average of the closing middle-market price of 76 pence per Kenwood Share
during the three months up to and including 15 February 2001.


The Kenwood Shares will be acquired pursuant to the Offer fully paid and free
from all liens, equities, charges, encumbrances, pre-emption rights and other
third party interests of whatever nature and together with all rights now or
hereafter attaching thereto, including the right to receive and retain all
dividends and other distributions (if any) declared, made or paid hereafter
after the date of this Announcement.


The Offer will extend to any Kenwood Shares which are unconditionally allotted
or issued prior to the date on which the Offer closes (or such earlier date as
the Offeror may, subject to the City Code, decide) whether as a result of the
exercise of options granted under the Kenwood Share Option Schemes or
otherwise.

Reasons for the Offer


The combination of De'Longhi's business with that of Kenwood will create a
leading European manufacturer and distributor of air conditioning, heating,
cooking and food preparation appliances. This is expected to allow significant
manufacturing and distribution efficiencies and help to improve the
competitive position of the Enlarged Group internationally.

Background information on De'Longhi


The Offeror is a wholly-owned subsidiary of De'Longhi and acts as an
investment holding company.


De'Longhi is a highly respected, family owned Italian company operating in air
conditioning, heating, cooking and food preparation appliances. The group
operates internationally and has leading market positions in many of its core
activities.


The group is geographically diversified, with some 70 per cent. of revenues
coming from sales outside of Italy.


For the year ended 31 December 1999, De'Longhi reported net revenues of
approximately ITL1,136 billion and profit before taxation of approximately
ITL67 billion and, as at 31 December 1999, had net assets of approximately
ITL486 billion.


Background information on Kenwood


Kenwood sells and markets small domestic appliances internationally under the
Kenwood and Ariete brand names.


For the year ended 31 March 2000, Kenwood reported sales of approximately £
145.4 million and a profit before taxation and exceptional items of
approximately £3.0 million. For the six months ended 30 September 2000,
Kenwood reported sales of approximately £71.9 million and a profit before
taxation and exceptional items of approximately £0.4 million. Net assets at 30
September 2000 were approximately £16.6 million.


Management and employees


The board of the Offeror has given assurances to the directors of Kenwood
that, following the Offer becoming or being declared unconditional in all
respects, the existing employment rights, including pension rights, of the
employees of the Kenwood Group will be fully safeguarded.


Kenwood Share Option Schemes


If the Offer is declared or becomes unconditional in all respects, appropriate
proposals will be made to the participants in the Kenwood Share Option
Schemes, to the extent that options are not exercised.


De-listing


As soon as it is appropriate and possible to do so and subject to the Offer
becoming or being declared unconditional in all respects, the Offeror intends
to apply for the cancellation of the listing of Kenwood Shares on the Official
List of the UK Listing Authority. It is expected that such cancellation will
take effect no earlier than 20 business days after the Offer becomes or is
declared unconditional in all respects.


If the Offeror receives acceptances under the Offer in respect of, and/or
otherwise acquires 90 per cent. or more of the Kenwood Shares to which the
Offer relates, the Offeror intends to apply the provisions of sections 428 to
430F of the Companies Act to acquire compulsorily any Kenwood Shares which
have not been assented to or acquired pursuant to the Offer.

Other

The Offer Document setting out the full details of the Offer, together with
the Form of Acceptance, will be despatched to Kenwood Shareholders shortly.

Part 2 contains definitions of the terms used in this Announcement.


The availability of the Offer to persons not resident in the United Kingdom
may be affected by the laws of the relevant jurisdiction. Persons who are
subject to laws of any jurisdiction other than the United Kingdom should
inform themselves about, and observe, applicable requirements.

Enquiries:
De'Longhi                                        Tel: 00 39 0422 4131

Stefano Beraldo, Chief Executive

Deutsche Bank                                    Tel: 020 7545 8000

Alastair Mathieson

Angela Campbell-Noe

Kenwood                                          Tel: 02392 476000

Colin Gordon, Chief Executive

PricewaterhouseCoopers                           Tel: 020 7583 5000

Richard Lazarus

Mark Butler

Ernst & Young                                    Tel: 020 7951 2000

Paul Smith

Stephen Skeels

Citigate Dewe Rogerson
                                                 Tel: 020 7638 9571
Simon Rigby



This Announcement does not constitute an offer or an invitation to acquire
shares or securities.

Deutsche Bank AG London ('Deutsche Bank'), which is regulated in the United
Kingdom by The Securities and Futures Authority Limited, is acting exclusively
for De'Longhi and the Offeror and no-one else in connection with the Offer and
will not be responsible to anyone other than De'Longhi and the Offeror for
providing the protections afforded to customers of Deutsche Bank or for
providing advice in relation to the Offer, the contents of this Announcement
or any other matters referred to herein.


PricewaterhouseCoopers, which is authorised to carry out investment business
by the Institute of Chartered Accountants in England and Wales, is acting
exclusively for Kenwood and no-one else in connection with the Offer and will
not be responsible to anyone other than Kenwood for providing the protections
afforded to customers of PricewaterhouseCoopers or for providing advice in
relation to the Offer, the contents of this Announcement or any other matters
referred to herein.


Ernst & Young, which is authorised to carry out investment business by the
Institute of Chartered Accountants in England and Wales, is acting exclusively
for Kenwood and no-one else in connection with the Offer and will not be
responsible to anyone other than Kenwood for providing the protections
afforded to customers of Ernst & Young or for providing advice in relation to
the Offer, the contents of this Announcement or any other matters referred to
herein.


The Offer will not be made, directly or indirectly, in or into, or by use of
the mails of, or by any means or instrumentality (including without limitation
facsimile transmission, telex or telephone) of interstate or foreign commerce
of, or any facility of a national securities exchange of, the United States
nor will it be made in or into Canada, Australia or Japan. Accordingly, copies
of this Announcement, the Offer Document and the Form of Acceptance are not
being, and must not be, mailed or otherwise distributed or sent in, into or
from the United States, Canada, Australia or Japan.

PART 2


Conditions and certain further terms of the Offer


The Offer, which will be made by Deutsche Bank AG London on behalf of the
Offeror, will comply with the rules and regulations of the Financial Services
Authority and the London Stock Exchange and the City Code on Takeovers and
Mergers (the 'Code');


Part A:          Conditions of the Offer


The Offer will be subject to the following conditions:


 a. valid acceptances being received (and not, where permitted, withdrawn) by
    not later than 3.00 p.m. on the first closing date of the Offer (or such
    later time(s) and/or date(s) as the Offeror may, with the consent of the
    Panel or in accordance with the Code, decide) in respect of not less than
    90 per cent. (or such lower percentage as the Offeror may decide) in
    nominal value of the Kenwood Shares to which the Offer relates, provided
    that this condition shall not be satisfied unless the Offeror and/or any
    of its wholly-owned subsidiaries shall have acquired or agreed to acquire,
    whether pursuant to the Offer or otherwise, shares in Kenwood carrying in
    aggregate more than 50 per cent. of the voting rights then normally
    exercisable at general meetings of Kenwood. For the purposes of this
    condition:


                (i)     shares which have been unconditionally allotted shall
                be deemed to carry the voting rights they will carry on being
                entered into the Register of Members of Kenwood;


ii. the expression 'Kenwood Shares to which the Offer relates' shall be
    construed in accordance with sections 428 to 430F of the Companies Act;


 a. the Office of Fair Trading in the United Kingdom indicating, in terms
    satisfactory to the Offeror, that it is not the intention of the Secretary
    of State for Trade and Industry to refer the proposed acquisition of
    Kenwood by the Offeror or any matter arising therefrom or related thereto,
    to the Competition Commission;


 b. save as disclosed in Kenwood's annual report and accounts for the year
    ended 31 March 2000, the interim results for the six months ended 30
    September 2000 or as publicly disclosed or announced or fairly disclosed
    in writing to De'Longhi by Kenwood prior to 16 February 2001, there being
    no provision of any agreement, arrangement, licence, permit or other
    instrument to which any member of the wider Kenwood Group is a party or by
    or to which any such member or any of its assets may be bound, entitled or
    subject, which in consequence of the Offer or the proposed acquisition of
    any shares or other securities in Kenwood or because of a change in the
    control or management of Kenwood or otherwise, would or might reasonably
    be expected to result in, in each case, to an extent which is material in
    the context of the wider Kenwood Group taken as a whole:


                (i)     any moneys borrowed by or any other indebtedness
                (actual or contingent) of, or grant available to any such
                member, being or becoming repayable or capable of being
                declared repayable immediately or earlier than their or its
                stated maturity date or repayment date or the ability of any
                such member to borrow moneys or incur any indebtedness being
                withdrawn or inhibited or being capable of becoming or being
                withdrawn or inhibited;

                (ii)     any such agreement, arrangement, licence, permit or
                instrument or the rights, liabilities, obligations or
                interests of any such member thereunder being terminated or
                adversely modified or affected or any obligation or liability
                arising or any adverse action being taken thereunder;

                (iii)     any assets or interests of any such member 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 each case, in the
                ordinary course of business;

                (iv)     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 such member;

                (v)     the rights, liabilities, obligations or interests of
                any such member in, or the business of any such member with,
                any person, firm or body (or any arrangement or arrangements
                relating to any such interest or business) being terminated,
                adversely modified or affected;

                (vi)     the value of any such member or its financial or
                trading position or prospects being prejudiced or adversely
                affected;

                (vii)     any such member ceasing to be able to carry on
                business under any name under which it presently does so; or


viii. the creation of any liability, actual or contingent, by any such member,
    and no event having occurred which, under any provision of any agreement,
    arrangement, licence, permit or other instrument to which any member of
    the wider Kenwood Group is a party or by or to which any such member or
    any of its assets is bound, entitled or subject, might reasonably be
    expected to result in any of the events or circumstances as are referred
    to in sub-paragraphs (i) to (viii) of this paragraph (c) (in any such case
    to an extent which is material in the context of the wider Kenwood Group
    taken as a whole);


 a. no government or governmental, quasi-governmental, supranational,
    statutory, regulatory, environmental or investigative body, court, trade
    agency, association, institution or any other body or person whatsoever in
    any jurisdiction (each a 'Third Party') having announced its intention to
    take, institute, implement or threaten any action, proceeding, suit,
    investigation, enquiry or reference, or enacted, made or proposed any
    statute, regulation, decision or order, or having taken any other steps
    which would or might reasonably be expected to:


                (i)     require, prevent or delay the divestiture, or alter
                the terms envisaged for any proposed divestiture by any member
                of the wider De'Longhi Group or any member of the wider
                Kenwood 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 any of them) or to own any of their respective assets or
                properties or any part thereof;

                (ii)     require, prevent or delay the divestiture by any
                member of the wider De'Longhi Group of any shares or other
                securities in Kenwood;

                (iii)     impose any limitation on, or result in a delay in,
                the ability of any member of the wider De'Longhi Group
                directly or indirectly to acquire or to hold or to exercise
                effectively any rights of ownership in respect of shares or
                loans or securities convertible into shares or any other
                securities (or the equivalent) in any member of the wider
                Kenwood Group or the wider De'Longhi Group or to exercise
                management control over any such member (in any case to an
                extent which is material in the context of the wider Kenwood
                Group or the wider De'Longhi Group (as the case may be) taken
                as a whole);

                (iv)     otherwise adversely affect the business, assets,
                profits or prospects of any member of the wider De'Longhi
                Group or of any member of the wider Kenwood Group (in any case
                to an extent which is material in the context of the wider
                Kenwood Group or the wider De'Longhi Group (as the case may
                be) taken as a whole);

                (v)     make the Offer or its implementation or the
                acquisition or proposed acquisition by the Offeror or any
                member of the wider De'Longhi Group of any shares or other
                securities in, or control of Kenwood void, illegal, and/or
                unenforceable under the laws of any jurisdiction, or otherwise
                to an extent which is material, directly or indirectly,
                restrain, restrict, prohibit, delay or otherwise materially
                interfere with the same, or impose additional material adverse
                conditions or obligations with respect thereto, or otherwise
                materially challenge or interfere therewith;

                (vi)     require any member of the wider De'Longhi Group or
                the wider Kenwood Group to offer to acquire any shares or
                other securities (or the equivalent) or interest in any member
                of the wider Kenwood Group (other than Kenwood) or the wider
                De'Longhi Group owned by any third party in any case to an
                extent which is material in the context of the wider Kenwood
                Group or the wider De'Longhi Group, as the case may be, taken
                as a whole;

                (vii)     impose any material limitation on the ability of any
                member of the wider Kenwood Group to co-ordinate its business,
                or any part of it, with the businesses of any other members;
                or


viii. result in any member of the wider Kenwood Group ceasing to be able to
    carry on business under any name under which it presently does so to an
    extent which is material in the context of the wider Kenwood Group taken
    as a whole;


        and all applicable waiting and other time periods during which any
        such Third Party could institute, implement or threaten any action,
        proceeding, suit, investigation, enquiry or reference or any other
        step under the laws of any jurisdiction in respect of the Offer or the
        acquisition or proposed acquisition of any Kenwood Shares having
        expired, lapsed or been terminated;



 a. all necessary filings or applications having been made in connection with
    the Offer and all statutory or regulatory obligations in any jurisdiction
    having been complied with in connection with the Offer or the acquisition
    by any member of the wider De'Longhi Group of any shares or other
    securities in, or control of, Kenwood and all authorisations, orders,
    recognitions, grants, consents, licences, confirmations, clearances,
    permissions and approvals necessary or appropriate in respect of the
    proposed acquisition of any shares or other securities in, or control of,
    Kenwood by any member of the wider De'Longhi Group, in each case where the
    absence thereof would have a material adverse effect on the wider
    De'Longhi Group or, as the case may be, the wider Kenwood Group, in each
    case taken as a whole having been obtained in terms and in a form
    satisfactory to the Offeror from all appropriate Third Parties and all
    such authorisations, orders, recognitions, grants, consents, licences,
    confirmations, clearances, permissions and approvals together with all
    material authorisations orders, recognitions, grants, licences,
    confirmations, clearances, permissions and approvals necessary or
    appropriate to carry on the business of any member of the wider Kenwood
    Group remaining in full force and effect and all such filings necessary
    for such purpose have been made and there being no notice or intimation of
    any intention to revoke or not to renew any of the same at the time at
    which the Offer becomes otherwise unconditional and all necessary
    statutory or regulatory obligations in any jurisdiction having been
    complied with;


 b. since 31 March 2000 and except as disclosed in the accounts for the year
    then ended or the interim results for the six months ended 30 September,
    2000 or as publicly disclosed or announced or as fairly disclosed in
    writing to De'Longhi by Kenwood prior to 16 February 2001 no member of the
    wider Kenwood Group having:


    (i)     save as between Kenwood and wholly-owned subsidiaries of Kenwood
    or for Kenwood Shares issued pursuant to the exercise of options granted
    under the Kenwood Share Option Schemes, issued, authorised or proposed the
    issue of additional shares of any class;

    (ii)     save as between Kenwood and wholly-owned subsidiaries of Kenwood
    or for the grant of options under the Kenwood Share Option Schemes, issued
    or agreed to issue, authorised or proposed the issue of securities
    convertible into shares of any class or rights, warrants or options to
    subscribe for, or acquire, any such shares or convertible securities;

    (iii)     other than to another member of the Kenwood Group, recommended,
    declared, paid or made or proposed to recommend, declare, pay or make any
    bonus, dividend or other distribution whether payable in cash or
    otherwise;

    (iv)     save for intra-Kenwood Group transactions, merged or demerged
    with any body corporate or acquired or disposed of or transferred,
    mortgaged or charged or created any security interest over any assets or
    any right, title or interest in any asset (including shares and trade
    investments) or authorised or proposed or announced any intention to
    propose any merger, demerger, acquisition or disposal, transfer, mortgage,
    charge or security interest, in each case other than in the ordinary
    course of business;

    (v)     save for intra-Kenwood Group transactions, made or authorised or
    proposed or announced an intention to propose any change in its loan
    capital;

    (vi)     issued, authorised or proposed the issue of any debentures or
    (save for intra-Kenwood Group transactions or in the ordinary course of
    business) incurred or increased any indebtedness or become subject to any
    contingent liability to an extent material in the context of the wider
    Kenwood Group taken as a whole;

    (vii)     purchased, redeemed or repaid or announced any proposal to
    purchase, redeem or repay any of its own shares or other securities or
    reduced or (save in respect to the matters mentioned in sub-paragraph (i)
    above) made any other change to any part of its share capital to an extent
    which is material in the context of the wider Kenwood Group taken as a
    whole;

    (viii)     implemented, or authorised, proposed or announced its intention
    to implement, any reconstruction, amalgamation, scheme, commitment or
    other transaction or arrangement otherwise than in the ordinary course of
    business or entered into or changed the terms (to an extent which is
    material in the context of the wider Kenwood Group taken as a whole) of
    any contract with any director or senior executive;

    (ix)     entered into or varied or authorised, proposed or announced its
    intention to enter into or vary any contract, transaction or commitment
    (whether in respect of capital expenditure or otherwise) which is of a
    long term, onerous or unusual nature or magnitude which is, in any such
    case, material in the context of the wider Kenwood Group or which is or
    could be materially restrictive on the businesses of any member of the
    wider Kenwood Group or the wider De'Longhi Group or which involves or
    could involve an obligation of such a nature or magnitude or which is
    other than in the ordinary course of business (other than any such
    contracts transactions or commitments which are not material in the
    context of the wider Kenwood Group);

    (x)     (other than in respect of a member which is dormant and was
    solvent at the relevant time) taken any corporate action or had any legal
    proceedings started or threatened against it for its winding-up,
    dissolution or reorganisation or for the appointment of a receiver,
    administrative receiver, administrator, trustee or similar officer of all
    or any of its assets or revenues or any analogous proceedings in any
    jurisdiction or had any such person appointed;

    (xi)     waived or compromised any claim otherwise than in the ordinary
    course of business which is material in the context of the wider Kenwood
    Group taken as a whole; or

    (xii)     entered into any contract, commitment, arrangement or agreement
    otherwise than in the ordinary course of business or passed any resolution
    or made any Offer (which remains open for acceptance) with respect to or
    announced any intention to, or to propose to, effect any of the
    transactions, matters or events referred to in this condition,

    and, for the purposes of paragraphs (iii),(iv), (v) and (vi) of this
    condition, the term 'Kenwood Group' shall mean Kenwood and its
    wholly-owned subsidiaries;


 c. since 31 March 2000 and save as disclosed in the accounts for the year then
    ended or the interim results for the six months ended 30 September 2000
    and save as publicly disclosed or announced or as fairly disclosed to
    De'Longhi in writing by Kenwood prior to16 February 2001:


                (i)     no material adverse change or deterioration having
                occurred in the business, assets, financial or trading
                position or profits or prospects of the wider Kenwood Group;

                (ii)     no litigation, arbitration proceedings, prosecution
                or other legal proceedings to which any member of the wider
                Kenwood Group is or may become a party (whether as a
                plaintiff, defendant or otherwise) and no investigation by any
                Third Party against or in respect of any member of the wider
                Kenwood Group having been instituted announced or threatened
                by or against or remaining outstanding in respect of any
                member of the wider Kenwood Group which in any such case might
                be expected to adversely affect any member of the wider
                Kenwood Group to an extent which is material to the wider
                Kenwood Group taken as a whole;

                (iii)     no contingent or other liability of any member of
                the wider Kenwood Group having arisen which would be likely
                materially and adversely to affect the wider Kenwood Group
                taken as a whole; and


ii. no steps having been taken which are likely to result in the withdrawal,
    cancellation, termination or modification of any licence held by any
    member of the wider Kenwood Group which is necessary for the proper
    carrying on of its business to an extent which is material to the wider
    Kenwood Group taken as a whole.


 a. Since 31 March 2000 and save as disclosed in the accounts for the year then
    ended or the interim results for the six months ended 30 September 2000
    and save as publicly disclosed or announced or as fairly disclosed to
    De'Longhi in writing by Kenwood prior to 16 February 2001, the Offeror not
    having discovered:


                (i)     that any financial, business or other information
                concerning the wider Kenwood Group as contained in the
                information publicly disclosed at any time by or on behalf of
                any member of the wider Kenwood Group is misleading, contains
                a material misrepresentation of fact or omits to state a
                material fact necessary to make that information not
                misleading in each such case where this is material in the
                context of the Offer;

                (ii)     that any member of the wider Kenwood Group
                partnership, company or other entity in which any member of
                the wider Kenwood Group has a significant economic interest
                and which is not a subsidiary undertaking of Kenwood is
                subject to any liability (contingent or otherwise) which is
                not disclosed in the annual report and accounts of Kenwood for
                the year ended 31 March 2000 and which is material in the
                context of the wider Kenwood Group taken as a whole; or


ii. any information which affects the import of any information disclosed at
    any time by or on behalf of any member of the wider Kenwood Group and
    which is material in the context of the wider Kenwood Group taken as a
    whole.


 a. Since 31 March 2000 and save as disclosed in the accounts for the year then
    ended or in the interim results for the six months ended 30 September 2000
    and save as publicly disclosed or announced or as fairly disclosed in
    writing to De'Longhi by Kenwood prior to 16 February 2001, the Offeror not
    having discovered that:


                (i)     any past or present member of the wider Kenwood Group
                has failed to comply with any and/or all applicable
                legislation or regulation, of any jurisdiction with regard to
                the disposal, spillage, release, discharge, leak or emission
                of any waste or hazardous substance or any substance likely to
                impair the environment or harm human health or animal health
                or otherwise relating to environmental matters, or that there
                has otherwise been any such disposal, spillage, release,
                discharge, leak or emission (whether or not the same
                constituted a non-compliance by any person with any such
                legislation or regulations, and wherever the same may have
                taken place) any of which disposal, spillage, release,
                discharge, leak or emission would be likely to give rise to
                any liability (actual or contingent) on the part of any member
                of the wider Kenwood Group which would be material in the
                context of the wider Kenwood Group taken as a whole; or


ii. there is, or is likely to be, for that or any other reason whatsoever, any
    liability (actual or contingent) of any past or present member of the
    wider Kenwood Group which would be material in the context of the wider
    Kenwood Group taken as a whole to make good, repair, reinstate or clean up
    any property or any controlled waters now or previously owned, occupied,
    operated or made use of or controlled by any such past or present member
    of the wider Kenwood Group, under any environmental legislation,
    regulation, notice, circular or order of any government, governmental,
    quasi-governmental, state or local government, supranational, statutory or
    other regulatory body, agency, court, association or any other person or
    body in any jurisdiction.


        For the purposes of these conditions the 'wider Kenwood Group' means
        Kenwood and its subsidiary undertakings, associated undertakings and
        any other undertaking in which Kenwood and/or such undertakings
        (aggregating their interests) have a significant interest and the
        'wider De'Longhi Group' means De'Longhi and its subsidiary
        undertakings, associated undertakings and any other undertaking in
        which De'Longhi 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 1985, 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).

        With the exception of condition (a), the Offeror reserves the right to
        waive, in whole or in part, all or any of the above conditions.

        Conditions (b) to (i) (inclusive) must be fulfilled or waived by
        midnight on the 21st day after the later of the first closing date of
        the Offer and the date on which condition (a) is fulfilled (or in each
        such case such later date as the Offeror may, with the consent of the
        Panel, decide). The Offeror shall be under no obligation to waive or
        treat as satisfied any of the conditions (b) to (i) (inclusive) by a
        date earlier than the latest date specified above for the satisfaction
        thereof, notwithstanding that the other conditions of the Offer may at
        such earlier date have been waived or fulfilled and that there are at
        such earlier date no circumstances indicating that any of such
        conditions may not be capable of fulfilment.

        If the Offeror is required by the Panel to make an offer for Kenwood
        Shares under the provisions of Rule 9 of the Code, the Offeror may
        make such alterations to any of the above conditions, as are necessary
        to comply with the provisions of that Rule.

        The Offer will lapse if it is referred to the Competition Commission
        before 3.00 p.m. on the first closing date of the Offer or the date on
        which the Offer becomes or is declared unconditional as to
        acceptances, whichever is the later.

        This Offer will be governed by English law and be subject to the
        jurisdiction of the English courts, to the conditions set out below
        and in the formal Offer Document and related Form of Acceptance.


Part B:          Certain further terms of the Offer


The Offer will not be made, directly or indirectly, in or into, or by use of
the mails of, or by any means or instrumentality (including, without
limitation, facsimile transmission, telex, telephone or e-mail) of interstate
or foreign commerce of, or of any facility of a national securities exchange
of, the United States nor will it be made in or into Canada, Japan or
Australia. Accordingly, the Offer will not be capable of acceptance by any
such use, means, instrumentality or facility or from within the United States,
Canada, Japan or Australia.



PART 3


Definitions

The following definitions apply throughout this Announcement unless the
context otherwise requires:
'Announcement'           this press announcement issued on 16 February 2001
'City Code' or 'Code'    the City Code on Takeovers and Mergers
'Companies Act'          the Companies Act 1985 (as amended)
'De'Longhi'              De'Longhi SpA
'De'Longhi Group'        De'Longhi and its subsidiary undertakings
'Enlarged Group'         the De'Longhi Group as enlarged by the acquisition of
                         Kenwood
'Form of Acceptance'     the form of acceptance relating to the Offer which
                         will accompany the Offer Document
'Kenwood'                Kenwood Appliances plc
'Kenwood Group'          Kenwood and its subsidiary undertakings
'Kenwood Share Option    the Kenwood Number 1 Executive Share Option Scheme,
Schemes'                 the Kenwood Number 2 Executive Share Option Scheme and
                         the Kenwood Sharesave Scheme
'Kenwood Shares'         the existing unconditionally allotted or issued and
                         fully paid ordinary shares of 10p each in Kenwood and
                         any further such shares which are unconditionally
                         allotted or issued while the Offer remains open for
                         acceptance (or, subject to the provisions of the Code,
                         such earlier date as De'Longhi may decide)
'Kenwood Shareholders'   the holders of Kenwood Shares
'Listing Rules'          the Listing Rules of the UK Listing Authority
'London Stock Exchange'  London Stock Exchange plc
'Offer'                  the recommended cash offer to be made by Deutsche Bank
                         on behalf of the Offeror to acquire all the Kenwood
                         Shares not already owned by De'Longhi and, where the
                         context so requires, any subsequent revision,
                         variation, extension or renewal thereof
'Offeror'                De'Longhi Pinguino SA
'Offer Document'         the document to be despatched on behalf of the Offeror
                         containing and setting out the terms and conditions of
                         the Offer
'Official List'          the Daily Official List of the UK Listing Authority
'Panel'                  the Panel on Takeovers and Mergers
'Subsidiary',            shall be construed in accordance with the Companies
'Subsidiary              Act
Undertaking',
'Associated Undertaking'
and 'Undertaking'
'UK Listing Authority'   the Financial Services Authority in its capacity as
                         competent authority under the Financial Services Act
                         1986


                                                                                
                                                                                
                   

a d v e r t i s e m e n t