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Warburg (S.G.) Group (WSGC)

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Thursday 13 July, 2006

Warburg (S.G.) Group

Offer by S.G. Warburg & Co. 2

Warburg (S.G.) Group PLC
13 July 2006


EMBARGOED UNTIL 7am



Part II

Not for release, publication or distribution, in whole of in part, in or into
the United States, Australia, Canada or Japan


                                              13 July 2006



                       RECOMMENDED UNCONDITIONAL CASH OFFER

                                       by

                           S.G. Warburg & Company plc
                     (a wholly owned subsidiary of UBS AG)
            for the whole of the issued preference share capital of

                             S.G. Warburg Group plc



1.                  Information

The Boards of SGW&Co and SGWG announced that they have reached agreement on the
terms of a recommended unconditional cash offer to be made by SGW&Co, as advised
by UBS,  to acquire the entire issued preference share capital of SGWG.

The Independent Directors consider the terms of the Offer to be fair and
reasonable as far as the SGWG Preference Shareholders are concerned.
Accordingly, the Independent Directors of SGWG unanimously recommend SGWG
Preference Shareholders to accept the Offer.

2.                  The Offer

Under the terms of the Offer, SGWG Preference Shareholders will receive

      for each SGWG Preference Share                168 pence in cash.

Accordingly, the Offer values the existing issued preference share capital of
SGWG at approximately £18.4 million.

The Offer represents a premium of:

•                      approximately 33.9 per cent. to the Closing Price of
125.5 pence for each SGWG Preference Share on 12 July 2006 (being the last
business day prior to the date of this announcement); and

•                      68 per cent. over the value that it is anticipated would
be received per SGWG Preference Share under an MVL by SGWG Preference
Shareholders who choose not to accept the Offer.

In the event that the Offer closes before 30 September 2006, arrangements will
be put in place to ensure that SGWG Preference Shareholders will receive a sum
equivalent to their pro rata dividend entitlements in relation to the period
from 1 April 2006 to the date the Offer closes.

3.                  Information relating to SGW&Co

SGW&Co was incorporated in 1973 under the name Rowe & Pitman International.  SGW
&Co is a wholly owned subsidiary of UBS AG and currently acts as an investment
holding company in the UBS AG group.

4.                  Information relating to SGWG

SGWG was incorporated in December 1984 and from 1986 acted as the listed holding
company of the SG Warburg investment banking business which had been previously
carried out by S.G. Warburg & Co Ltd., Akroyd & Smithers P.L.C., Rowe & Pitman
Limited and Mullens & Co (Financial Futures) Limited.

SGWG was acquired by Swiss Bank Corporation (of which SGWG's ultimate parent
company, UBS AG, is the successor entity) in 1995 and its ordinary shares were
delisted in that year.  As part of the acquisition of SGWG by Swiss Bank
Corporation, proposals were made to the then SGWG Preference Shareholders to
acquire their Preference Shares. However, those proposals were not accepted by a
sufficient number of SGWG Preference Shareholders and, as a result, the SGWG
Preference Shares remained securities listed on the London Stock Exchange.  As
at 12 July 2006 (being the last business day prior to the date of this
announcement) there were 10,934,796 SGWG Preference Shares in issue.

As a number of directors of SGWG are also directors of either SGW&Co or UBS (the
financial advisor to SGW&Co), the board of SGWG as a whole determined that it is
appropriate that only the Independent Directors (being those directors who are
not directors of either SGW&Co or UBS) consider the Offer and make any
recommendation to the SGWG Preference Shareholders.

5.                  Background to and reasons for the offer

Since the acquisition of SGWG by Swiss Bank Corporation, the SGWG Group
businesses have either been transferred to other UBS AG group companies or sold
to third parties.  As a result, the SGWG Group no longer carries out any trading
activity: instead it carries on investment activities including the provision of
finance to a number of fellow subsidiary undertakings within the UBS AG group.

The board of directors of SGWG has conducted a strategic review of SGWG and
subsequently concluded that the Company's business purpose had ceased and it was
in the best interests of the Company to consider seeking a liquidation by way of
a MVL.  SGWG has therefore announced that it is considering seeking the approval
of its members for a liquidation by way of MVL on 13 July 2006.

The SGWG Preference Shareholders are entitled to an annual cumulative dividend
at the rate of 7 5/8 per cent. and are only entitled to vote at a general
meeting of SGWG where the business of the meeting includes a resolution to
reduce the capital of SGWG, the winding up of SGWG, the sale of the business of
SGWG, or any resolution directly affecting the rights or privileges attached to
the SGWG Preference Shares.

On a liquidation or return of capital, the SGWG Preference Shareholders are
entitled to receive before any other SGWG Shareholders a sum equal to:

•                      any arrears of the fixed dividend calculated down to the
commencement of the liquidation or return of capital (payable irrespective of
whether such dividend has been declared or earned); and

•                      the amount of capital paid up or credited as paid up on
such shares.

After the SGWG Ordinary Shareholders have had distributed to them the amount of
capital paid up on each SGWG Ordinary Share and £1 million per SGWG Ordinary
Share, the SGWG Preference Shareholders are entitled to participate pro rata
with the SGWG Ordinary Shareholders (and any other class of capital so entitled)
in the assets of SGWG available for distribution.

SGWG Preference Shareholders who do not accept the Offer will participate in a
MVL and, as a result, it is anticipated that they will receive £1 per SGWG
Preference Share plus any arrears of dividend due down to the commencement of
the liquidation in cash for each SGWG Preference Share they hold.

An MVL is a time consuming and statute-driven process and the Independent
Directors have been advised that, if the SGWG Shareholders resolved to place
SGWG into a MVL, it is unlikely that any distributions would be made to the SGWG
Shareholders until the second half of 2007 at the earliest.

As the value of the Offer represents a premium of 68 per cent. over the value
that, it is anticipated, would be received per SGWG Preference Share pursuant to
an MVL (by SGWG Preference Shareholders who choose not to accept the Offer), the
Independent Directors believe that it is in SGWG's Preference Shareholders' best
interests to accept the Offer rather than receive a lesser amount for their SGWG
Preference Shares by way of a liquidation distribution.

6.                  Financing arrangements

SGW&Co has entered into a facility agreement with UBS AG in order to fund the
cash consideration payable to the SGWG Preference Shareholders.

7.                  Delisting

As soon as it is appropriate to do so, and subject to applicable requirements of
the London Stock Exchange and the UK Listing Authority, SGW&Co intends to
procure that SGWG will apply to the London Stock Exchange for the SGWG
Preference Shares to cease trading and to the UK Listing Authority to remove the
SGWG Preference Shares from the Official List.

It is anticipated that the cancellation of SGWG's listing and admission to
trading will take effect no earlier than the expiry of 20 business days after
the date on which the Offer closes. Delisting would significantly reduce the
liquidity and marketability of the SGWG Preference Shares.

8.                  Documentation

The Offer Document will be posted to SGWG Preference Shareholders as soon as
practicable and in any event within 28 days of this announcement.

9.                  General

This announcement does not constitute an offer or an invitation to purchase any
securities.

Certain further terms of the Offer are set out in Appendix I to this
announcement.  Appendix II sets out the bases of calculation and sources in
respect of some of the information contained in this document.  Appendix III
contains the definitions of certain terms used in this announcement.


Enquiries:
S.G. Warburg & Company plc
Hana Irani
+44 20 756 89822

S.G. Warburg Group plc
Dominik von-Arx
+44 20 756 82439


UBS is acting for SGW&Co and no-one else in connection with the Offer and will
not be responsible to anyone other than SGW&Co for providing the protections
afforded to clients of UBS or for providing advice in relation to the Offer.

The Offer will not be made, directly or indirectly, in or into, or by the use of
the mails or any means of instrumentality (including, without limitation,
telephonically or electronically) of interstate or foreign commerce of, or any
facilities of a national securities exchange of the United States, Canada,
Australia or Japan.  Accordingly, except as required by applicable law, copies
of this announcement are not being, and may not be, mailed or otherwise
forwarded, distributed or sent in, into or from the United States, Canada,
Australia or Japan.  Persons receiving this announcement (including without
limitation nominees, trustees or custodians) must not forward, distribute or
send it into the United States, Canada, Australia or Japan.

The availability of the Offer to SGWG Preference Shareholders who are not
resident in the United Kingdom may be affected by the laws of the relevant
jurisdictions.  In particular, the Offer will not be made directly or indirectly
into the United States, Canada, Australia or Japan.  SGWG Preference
Shareholders who are not resident in the United Kingdom should inform themselves
about and observe any applicable requirements.

SGWG Preference Shareholders are strongly advised to read the formal
documentation in relation to the Offer once it has been despatched.

This announcement does not constitute, or form any part of, any offer for, or
solicitation of any offer for, securities.  Any acceptance or other response to
the Offer should be made on the basis of the information contained in the Offer
Document and the Form of Acceptance.

Rule 8 Notice

As the Offer will not be governed by the terms of the Code, no disclosure of
dealings under Rule 8 of the Code will be required to be made by any of the
parties to the Offer (or their associates) nor by any person with an interest in
the SGWG Preference Shares representing 1% or more of the issued SGWG Preference
Share capital.

Forward-looking statements

This announcement contains certain forward-looking statements, including
statements regarding SGWG's plans, objectives and expected performance.  Such
statements relate to events and depend on circumstances that will occur in the
future and are subject to risks, uncertainties and assumptions.  There are a
number of factors which could cause actual results and developments to differ
materially from those expressed or implied by such forward looking statements,
including, among others the enactment of legislation or regulation that may
impose costs or restrict activities; fluctuations in exchange controls; changes
in government policy and taxation; war and terrorism.  These forward-looking
statements speak only as at the date of this announcement.


                                   APPENDIX I

                       CERTAIN FURTHER TERMS OF THE OFFER

1.                   The Offer will not be subject to the satisfaction of any
conditions and will not be governed by the terms of the Code. The Offer will be
governed by English law and be subject to the jurisdiction of the courts of
England.  The Offer will be made on the terms and conditions further set out in
the Offer Document.

2.                   The Offer will extend to all SGWG Preference Shares
unconditionally allotted or issued on the date on which the Offer is made, and
any further SGWG Preference Shares unconditionally allotted or issued and fully
paid in each case while the Offer remains open (or such earlier date or dates as
SGW&Co may decide).

3.                   The SGWG Preference Shares are to be acquired by SGW&Co
fully paid and free from all liens, charges and encumbrances, rights of pre-
emption and any other third party rights of any nature whatsoever and together
with all rights attaching thereto, including the right to all dividends or other
distributions declared, paid or made after the date hereof.  However, in the
event that the Offer closes before 30 September 2006, arrangements will be put
in place to ensure that SGWG Preference Shareholders will receive a sum
equivalent to their pro rata dividend entitlements in relation to the period
from 1 April 2006 to the date that the Offer closes.

                                  APPENDIX II

                BASES OF CALCULATION AND SOURCES OF INFORMATION

1.         The Closing Prices or quotations of SGWG Preference Shares are
derived from the London Stock Exchange's Daily Official List.

2.         References to the value of the Offer assume the number of SGWG
Preference Shares currently in issue to be 10,934,796 of which 1,386,479 are
already owned by UBS UK Properties Limited.


                                  APPENDIX III

                                  DEFINITIONS



The following definitions apply throughout this announcement unless the context
requires otherwise:

'Australia'                         the Commonwealth of Australia and its dependent territories

'business day'                      any day, other than a Saturday, Sunday or public holiday, on which
                                    banks are generally open for business in the City of London

'Canada'                            Canada, its possessions, territories and all areas of subject to its
                                    jurisdiction or any political sub-division thereof

'Closing Price'                     the closing middle market quotation of a SGWG Preference Share as
                                    derived from the Daily Official List of the London Stock Exchange

'Code'                              the City Code on Takeovers and Mergers

'Form of Acceptance'                the form of acceptance, authority and election for use in connection
                                    with the Offer accompanying this document

'Independent Directors'             the directors of SGWG who are not directors of SGW&Co or UBS being
                                    Messrs Alistair N C Defriez, Mark S Albright and Andrew D Williams

'Japan'                             Japan, its cities, prefectures, territories and possessions

'London Stock Exchange'             London Stock Exchange plc

'MVL'                               a members' voluntary liquidation in accordance with s.89-90 and
                                    Chapter III s.91-96 of the Insolvency Act 1986

'Offer'                             the recommended unconditional cash offer being made by SGW&Co to
                                    acquire all of the SGWG Preference Shares, subject to the terms and
                                    conditions set out in the Offer Document and in the Form of
                                    Acceptance, and, where the context so requires, any subsequent
                                    revision, variation, extension or renewal of such offer

'Offer Document'                    the document to be posted to SGWG Preference Shareholders containing
                                    the terms and conditions of the Offer

'Official List'                     the Official List of the UK Listing Authority

'SGW&Co'                            S.G. Warburg & Company plc, a company registered in England & Wales
                                    with Company number 01121735 and with its registered office at 1
                                    Finsbury Avenue, London EC2M 2PP

'SGW&Co Group'                      SGW&Co, its subsidiaries and subsidiary undertakings

'SGWG' or the 'Company'             S.G. Warburg Group plc, a company registered in England & Wales with
                                    Company number 01874486 and with its registered office at 1 Finsbury
                                    Avenue, London EC2M 2PP

'SGWG Group'                        SGWG, its subsidiaries and subsidiary undertakings

'SGWG Ordinary Shareholders'        holders of SGWG Ordinary Shares

'SGWG Ordinary Shares'              234,582,777 ordinary shares of 25 pence nominal value each in the
                                    capital of SGWG allotted or issued as at the date of this
                                    announcement

'SGWG Preference Shareholders'      holders of SGWG Preference Shares

'SGWG Preference Shares'            10,934,796 7 5/8 per cent. cumulative preference shares of £1.00
                                    nominal value each in the capital of SGWG allotted or issued as at
                                    the date of this announcement

'SGWG Shareholders'                 the SGWG Preference Shareholders and the SGWG Ordinary Shareholders

'subsidiary' and 'subsidiary        have the meanings given to them in the Companies Act 1985
undertaking'

'Swiss Bank Corporation'            Swiss Bank Corporation, which was incorporated under the laws of
                                    Switzerland and which had its principal offices at Aeschenvorstadt 1,
                                    4051 Basel, Switzerland

'UBS'                               UBS Limited, a company registered in England & Wales with company
                                    number 2035362 and with its registered office at 1 Finsbury Avenue,
                                    London EC2M 2PP

'UBS AG'                            UBS AG, incorporated and existing under the laws of Switzerland and
                                    having its principal offices at Bahnhofstrasse 45, 8001 Zurich,
                                    Switzerland, and Aeschenvorstadt 1, 4051 Basel, Switzerland

'UBS UK Properties Limited'         UBS UK Properties Limited, a company registered in England and Wales
                                    with company number 01501299 and with its registered office at 1
                                    Finsbury Avenue, London EC2M 2PP

'UK' or 'United Kingdom'            the United Kingdom of Great Britain and Northern Ireland

'UK Listing Authority'              the Financial Services Authority as the competent authority under
                                    Part VI of the Financial Services and Markets Act 2000

'United States of America', 'US' or the United States of America, its territories and possessions, any
'United States'                     state of the United States of America, the District of Columbia, and
                                    all other areas subject to its jurisdiction

'£' or 'Sterling'                   pounds sterling, the lawful currency of the UK and references to
                                    'pence' and 'p' shall be construed accordingly



Words importing the singular shall include the plural and vice versa, and words
importing the masculine gender shall include the feminine or neutral gender.

All references to times shall be to London time, unless stated otherwise.






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