RNS No 4506v
CREST PACKAGING PLC
2nd December 1998
PART 1
Not for release, publication or distribution in or into
the United States, Canada, Australia or Japan.
ANGLEY HOLDINGS PLC
RECOMMENDED CASH OFFER FOR CREST PACKAGING plc
The Board of Angley Holdings and the Independent
Directors announce that they have reached agreement on
the terms of a recommended cash offer, to be made by
Ernst & Young on behalf of Angley Holdings, to acquire
the entire issued and to be issued share capital of Crest
Packaging.
*The Offer is on the basis of 41p in cash for each
Crest Packaging Share, valuing the existing issued share
capital of Crest Packaging at approximately #16.4
million;
*The Offer represents a premium of 105 per cent. to
the closing middle-market price, as derived from the
London Stock Exchange Daily Official List, of 20p per
Crest Packaging Share at the close of business on 4
November 1998, being the last business day prior to the
date on which Crest Packaging announced that it had
received an approach from Rodney A J Webb which may or
may not lead to an offer being made for Crest Packaging;
*There will be a Loan Note Alternative;
*Angley Holdings is a newly incorporated company,
established for the purpose of acquiring Crest Packaging,
and is controlled by Rodney A J Webb, who is also
executive deputy chairman of Crest Packaging. Rodney A J
Webb, together with his related trusts, is a controlling
shareholder of Crest Packaging.
*Undertakings and letters of intent to accept the
Offer have been received from the Directors of Crest
Packaging, their related trusts and other persons in respect
of, in aggregate, 26,333,607 Crest Packaging shares,
representing approximately 65.68 per cent. of the
existing issued share capital of Crest Packaging. The
undertakings (other than those relating to 24,187,675
Crest Packaging Shares, given by Rodney A J Webb, his related
trusts and two other persons) will cease to be binding if
a third party announces a general offer to acquire all of
the Crest Packaging shares on terms which represent an
improvement on the consideration offered under the Offer.
On behalf of the Independent Directors, Ian Tegner,
Chairman of Crest Packaging, commented:
"The Independent Directors of Crest Packaging have
considered the Offer carefully and, on the basis of their
view of the short to medium term prospects for the value
of the shares of Crest Packaging as a publicly quoted
company, given the current circumstances, and having
taken independent professional advice, recommend that
shareholders accept the Offer.
The Offer enables Crest Packaging shareholders to realise
their investment in the company at a price which
represents a premium of 105 per cent. to the Crest
Packaging share price the day before the announcement of
talks on 5 November 1998."
Press enquiries:
Ian Tegner, Crest Packaging 0171 970 2104
Rodney Webb, Angley Holdings 01634 234 444
Richard Haycocks, Ernst & Young 0171 928 2000
Tim Linacre, WestLB Panmure 0171 638 4010
Ernst & Young of Becket House, 1 Lambeth Palace Road,
London SE1 7EU is authorised by the Institute of
Chartered Accountants in England and Wales to carry on
investment business. Ernst & Young is acting for Angley
Holdings and no-one else in connection with the Offer,
and will not be responsible to anyone other than Angley
Holdings for providing the protections offered to customers
of Ernst & Young nor for giving advice in relation to the
Offer, the contents of this announcement or any
arrangement referred to herein.
WestLB Panmure, which is regulated by The Securities and
Futures Authority Limited, is acting for Crest Packaging
and no-one else in connection with the Offer and will not
be responsible to anyone other than Crest Packaging for
providing the protections offered to customers of WestLB
Panmure, nor for giving advice in relation to the Offer,
the contents of this announcement or any arrangement
referred to herein.
The full text of the conditions and certain further terms
of the Offer are set out in Appendix I which forms part
of, and should be read with, this announcement. Defined
terms have the meaning set out in Appendix II which forms
part of, and should be read with, this announcement.
Neither the Offer nor the Loan Note Alternative will be
made available, directly or indirectly, in or into the
United States, Canada, Australia or Japan.
Ernst & Young has approved this announcement as an
investment advertisement solely for the purpose of
section 57 of the Financial Services Act 1986.
Responsibility
The directors of Crest Packaging, whose names are Ian
Tegner, Rodney Webb, Ian Stewart, Roy Cook and Michael
Kenny, accept responsibility for the information
contained in this announcement relating to the Crest
Packaging Group, the directors of Crest Packaging (solely
in their capacity as directors of Crest Packaging) and
members of their immediate families and persons connected
with them, with the exception of the opinions of the
Independent Directors relating to the recommendation of
the Offer and the recommendation itself as set out in
paragraph 11 of this announcement. To the best of the
knowledge and belief of the directors of Crest Packaging
(who have taken all reasonable care to ensure that such
is the case), the information contained in this
announcement for which they are responsible is in
accordance with the facts and does not omit anything
likely to affect the import of such information.
The Independent Directors, whose names are Ian Tegner and
Ian Stewart, accept responsibility for the opinions of
the Independent Directors relating to the recommendation
of the Offer and the recommendation itself as set out in
paragraph 11 of this announcement. To the best of the
knowledge and belief of the Independent Directors (who
have taken all reasonable care to ensure that such is the
case), the information contained in this announcement for
which they are responsible is in accordance with the
facts and does not omit anything likely to affect the
import of such information.
The directors of Angley Holdings, whose names are Rodney
Webb and Dr Annalisa Sartori, accept responsibility for
the information contained in this announcement, other
than that relating to the Crest Packaging Group, the
directors of Crest Packaging and members of their
immediate families and persons connected with them. To
the best of the knowledge and belief of the directors of
Angley Holdings (who have taken all reasonable care to
ensure that such is the case), the information contained
in this announcement for which they are responsible is in
accordance with the facts and does not omit anything
likely to affect the import of such information.
2 December 1998
Not for release, publication or distribution in or into
the United States, Canada, Australia or Japan.
ANGLEY HOLDINGS PLC
RECOMMENDED CASH OFFER
for
CREST PACKAGING plc
1. Introduction
The board of Angley Holdings and the Independent
Directors announce that agreement has been reached on the
terms of a recommended cash offer to be made by Ernst &
Young, on behalf of Angley Holdings, to acquire the
entire issued and to be issued ordinary share capital of
Crest Packaging. Angley Holdings is a public company in
which Rodney A J Webb is the controlling shareholder.
2. The Offer
On behalf of Angley Holdings, Ernst & Young will offer to
acquire, on the terms and subject to the conditions set
out in Appendix I and the further terms and conditions to
be set out in the formal Offer Document and in the Form
of Acceptance, all of the Crest Packaging Shares on the
following basis:
for each Crest Packaging Share: 41p in cash
The Offer values the existing issued share capital of
Crest Packaging at approximately #16.4 million and
represents a premium of 105 per cent. to the closing
middle-market price, as derived from the London Stock
Exchange Daily Official List, of 20p per Crest Packaging
Share on 4 November 1998, being the last business day
prior to the announcement by Crest Packaging that it had
received an approach from Rodney A J Webb which may or
may not lead to an offer being made for Crest Packaging.
The Crest Packaging Shares to be acquired pursuant to the
Offer will be acquired fully paid and free from all
liens, equities, charges, encumbrances and other
interests 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.
The Offer will extend to any Crest Packaging Shares which
are unconditionally allotted or issued prior to the date
on which the Offer closes (or such earlier date as Angley
Holdings may, subject to the City Code, decide) as a
result of the exercise of existing options under the
Crest Packaging Share Option Schemes or otherwise.
In the event of sufficient acceptances, Angley Holdings
intends to apply the provisions of sections 428 to 430F
of the Act to acquire compulsorily any outstanding Crest
Packaging Shares to which the Offer relates.
3. The Loan Note Alternative
Crest Packaging Shareholders who validly accept the Offer
may elect to receive Loan Notes instead of all or part of
the cash consideration due to them under the terms of the
Offer on the following basis:
for every #1 of cash consideration under the Offer:
#1 nominal of Loan Notes
The Loan Notes will be guaranteed, as to principal only,
by Barclays Bank PLC. There will be no guarantee as to
interest.
The Loan Notes will be issued, credited as fully paid, in
amounts and integral multiples of #1 nominal and any
fractional entitlements will be disregarded. The Loan
Notes will bear interest, at a fixed rate of 5.75 per
cent. per annum, payable in arrears with the first
payment on 7 July 1999 and thereafter in half-yearly
instalments on 7 January and 7 July each year. No
application has been made or will be made to any stock or
investment exchange for the Loan Notes to be listed or
otherwise traded.
The Loan Notes will be redeemable (in whole or in part)
at the option of the holders on 7 January 2000 and
thereafter at twice yearly intervals on 7 January and 7
July up to and including 7 July 2002. Thereafter either
Angley Holdings or the Noteholder may redeem the Loan
Notes (in whole or in part) at twice yearly intervals on
7 January and 7 July up to and including 7 January 2006.
Angley Holdings may also redeem the Loan Notes (in whole
or in part) on the occurrence of a sale or flotation of
Angley Holdings on or after 7 January 2003. On 7 January
2006, all outstanding Loan Notes will be redeemed.
The Loan Note Alternative is conditional upon the Offer
becoming or being declared unconditional in all respects.
Ernst & Young have advised Angley Holdings that, in their
opinion, based on market conditions at 1 December 1998
(being the latest practicable date prior to the issue of
this announcement), the estimated value of the Loan
Notes, if they had been in issue on that date, would have
been not less than 98p per #1 in nominal value.
4. Financial effects of acceptance of the Offer
The following table shows, for illustrative purposes only
and on the bases and assumptions set out in the Notes
below, the financial effects on capital value and gross
income of acceptance of the Offer of 41p cash or the Loan
Note Alternative for an accepting holder of one Crest
Packaging Share, if the Offer becomes or is declared
unconditional in all respects:
(a) Capital value
Notes Loan Note
Offer Alternative
Cash consideration 41.0p ---
Value of 41p nominal (i) --- 40.2p
of Loan Note
________ ________
Total value 41.0p 40.2p
Market value of one Crest (ii) 20.0p 20.0p
Packaging Share
________ ________
This represents an increase of: 21.0p 20.2p
________ ________
This represents an increase of: 105% 101%
________ ________
(b) Gross income
From re-invested cash (iii) 1.98p ---
From 41p nominal of Loan (iv) --- 2.36p
Note ________ ________
Total income 1.98p 2.36p
Gross income from
one Crest Packaging Share (v) 3.44p 3.44p
________ ________
This represents a decrease of: (1.46)p (1.08)p
________ ________
This represents a decrease of: (42.4)% (31.4)%
________ ________
Notes:
(i) The value of the Loan Notes is based on Ernst &
Young's estimated value of 98p per #1 nominal value
of Loan Notes, had such notes been in issue as at 1
December 1998 (being the latest practicable date
prior to the printing of this document).
(ii)The market value of one Crest Packaging share is
based on the closing middle-market quotation of 20
pence per Crest Packaging Share on 4 November 1998
(being the last business day prior to the
announcement that Crest Packaging had received an
approach which may or may not lead to an offer being
made for Crest Packaging).
(iii)Gross income on the cash consideration under
the Offer has been calculated assuming that the cash
is re-invested so as to yield 4.83 per cent. per
annum, being the gross redemption yield on 30
November 1998 for the FTSE-Actuaries 5 year UK Gilts
Index as published in the Financial Times on 1
December 1998 (being the lastest practicable day
prior to this announcement).
(iv)The gross income from the Loan Notes is based on the
rate of interest on the Loan Notes, being a fixed
rate of 5.75 per cent. per annum.
(v) The gross income from one Crest Packaging Share is
based on the aggregate of the dividends paid in
respect of the year ended 30 April 1998, amounting
to 2.75 pence (net) per Crest Packaging Share,
together with an assumed associated tax credit of
20/80ths on those dividends.
(vi)Save as referred to in note (v) above, no account
has been taken of any liability to taxation.
5. Information regarding Crest Packaging
The principal activity of the Crest Packaging Group is
the manufacture and sale of flexible packaging and
cartons. Its operating subsidiaries are Crest Flexible
Packaging Limited, Crest Cartons Limited and Crest
Chapman Limited, all located in the UK.
When it was admitted to the Official List of the London
Stock Exchange in October 1993, Crest Packaging's Share
price was 135p. However, conditions in the business
areas in which Crest Packaging operates have become
increasingly competitive in recent years, and whilst
Crest Packaging has broadly retained its market share in
the UK, the strength of sterling against continental
European currencies has more recently led to both a loss
of continental business and a reduction in UK margins.
For the year ended 30 April 1998, the Crest Packaging
Group reported turnover of #60.9 million (1997: #50.4
million); profit before taxation of #2.7 million (1997:
#3.8 million); and earnings per share of 5.5p (1997:
7.8p). At that date, the Crest Packaging Group's net
assets were #23.3 million (1997: #22.4 million),
representing net assets per share of 58.1p (1997: 56.0p)
6. Information regarding Angley Holdings and Rodney A J
Webb
Angley Holdings, whose registered office is at Windsor
House, Temple Row, Birmingham B2 5LF, is a public
company, controlled by Rodney A J Webb, which was
incorporated on 13 November 1998. Further information on
Angley Holdings and a description of the financing
arrangements for Angley Holdings in respect of the Offer
will be set out in the Offer Document.
Rodney A J Webb is deputy chairman of Crest Packaging. He
acquired Crest Packaging as a shelf company in 1985 for
the purpose of purchasing two packaging businesses based
in Gillingham, Kent from Bowater Industries PLC.
7. Undertakings to accept the Offer and letters of
intent
Undertakings to accept the Offer have been received by
Angley Holdings from the Executive Directors, their
related trusts and other persons in respect of,
in aggregate, 26,333,607 Crest Packaging
Shares, representing approximately 65.68 per cent. of the
existing issued share capital of Crest Packaging. The
undertakings, other than those relating to 24,187,605
Crest Packaging Shares given by Rodney A J Webb, related
trusts and two other persons will cease to be binding if
a third party announces a general offer to acquire all of
the Crest Packaging Shares on terms which represent an
improvement in the consideration offered under the Offer.
The Independent Directors have also provided Angley
Holdings with letters confirming their intention to
accept the Offer, in the absence of a higher Offer, in
respect of their own Crest Packaging Shares, amounting to
11,000 Crest Packaging Shares representing, in aggregate,
approximately 0.03 per cent. of the existing issued share
capital of Crest Packaging.
8. Arrangements with Rodney A J Webb
Rodney A J Webb has subscribed in cash for ordinary
shares in Angley Holdings, details of which will be set
out in the Offer Document. In addition, Rodney A J Webb,
the trustees of the Life Interest Trust and Macash
Limited have agreed to elect for the Loan Note
Alternative in respect of, in aggregate, 21,321,397 of
the Crest Packaging Shares they currently hold. Rodney A
J Webb and the trustees of the Life Interest Trust have
agreed with Angley Holdings and Barclays Bank PLC that
the guarantee given by Barclays Bank PLC shall not apply
in respect of any Loan Notes received by them following
their acceptance of the Offer. In addition, Rodney A J
Webb and the trustees of the Life Interest Trust have
agreed not to demand redemption of the Loan Notes unless
the funds provided by Barclays Bank PLC and the
Macash Limited to finance the Offer have been repaid
in full, and have agreed to waive interest on the Loan
Notes.
Following the Offer becoming or being declared
unconditional in all respects, Rodney A J Webb and
his related trusts will hold approximately #8.74 million
of Loan Notes.
If the Offer becomes or is declared unconditional in all
respects, Rodney A J Webb's service contract will be
amended to increase his annual salary from #43,622 to
#100,000 in recognition of the increased time which he
will be devoting to the Group. In addition, an amendment
will be made to require the Company to make increased
contributions to Rodney A J Webb's pension.
9. Reasons for the Offer
The board of Angley Holdings believes that full
acceptance of the Offer will:
(i) enable Crest Packaging Shareholders to realise their
investment in Crest Packaging, without incurring
dealing charges, at a price which represents a
premium of 105 per cent. to the Crest Packaging
Share price on 4 November 1998 of 20p, being the
last business day prior to the announcement that
Crest Packaging had received an approach that may or
may not lead to an offer being made for Crest
Packaging; and
(ii)remove from Crest Packaging the financial,
managerial and regulatory burden of being a company
listed on the London Stock Exchange, which is
disproportionate in relation to Crest Packaging's
market capitalisation.
Further information will be set out in the Offer
Document.
10. Background to and reasons for recommending the Offer
Conditions in the business areas in which the Crest
Packaging Group operates have become increasingly
competitive in recent years and, whilst Crest Packaging
has broadly retained its market share in the UK, the
strength of sterling against continental European
currencies has more recently led to both a loss of
continental business and reduction in UK margins.
At the same time, stock market sentiment has turned
against smaller quoted companies, and the paper and
packaging sector has been particularly out of favour.
The combination of all these factors led to a share price
of 20p immediately prior to the announcement on 5
November 1998 that an offer may or may not be made for
the Company. At the present time, there appears to be
little likelihood that there will be any significant
change in sentiment towards smaller quoted companies
and/or the paper and packaging sector in the foreseeable
future.
11. Recommendation
The Independent Directors, who have been so advised by
WestLB Panmure, consider that the Offer represents the
best opportunity, given current circumstances, for Crest
Packaging Shareholders to realise their investment at a
price which is above the level which the Crest Packaging
Shares would reasonably be expected to reach in the
medium term and that the terms of the Offer are
reasonable and, accordingly, the Independent Directors
recommend Crest Packaging Shareholders to accept the
Offer. The Independent Directors in the absence of any
higher offer being received, intend to accept the Offer,
in respect of their own beneficial holdings, amounting to
11,000 Crest Packaging Shares representing, in aggregate,
approximately 0.03 per cent. of the existing issued share
capital of Crest Packaging. In providing advice to the
Independent Directors, WestLB Panmure have taken into
account the commercial assessments of the Independent
Directors.
12. Directors and employees
The board of Angley Holdings has given assurances to the
Independent Directors that the existing employment
rights, including pension rights, of the employees of the
Crest Packaging Group will be fully safeguarded.
The Independent Directors have agreed to resign from the
board of Crest Packaging if the Offer becomes or is
declared unconditional in all respects. The remainder of
the Executive Directors, being Roy J Cook and E Michael
Kenny, will have a continuing role in the Crest Packaging
Group.
13. Crest Packaging Share Option Schemes
The Offer extends to any fully paid Crest Packaging
Shares which are unconditionally allotted or issued
pursuant to the exercise of existing options under the
Crest Packaging Share Option Schemes while the Offer
remains open for acceptance (or such earlier date as
Angley Holdings may, subject to the City Code, decide).
Angley Holdings will make appropriate proposals to option
holders under the Crest Packaging plc Employee Share
Option Scheme in respect of options which remain
unexercised once the Offer becomes or is declared
unconditional in all respects. Options under the Crest
Packaging plc Executive Share Option Scheme will lapse in
accordance with the rules of that scheme.
14. De-listing
In the event of the Offer becoming or being declared
unconditional in all respects and more than 75 per cent.
of the Crest Packaging Shares being controlled by Angley
Holdings, Angley Holdings intends that Crest Packaging
will apply for cancellation of the listing of the Crest
Packaging Shares on the Official List of the London Stock
Exchange and that Crest Packaging will re-register as a
private limited company under and subject to the relevant
provisions of the Act.
15. General
The formal Offer Document, setting out details of the
Offer, and the Form of Acceptance will be despatched as
soon as practicable.
The acceptance of the Offer by persons not resident in
the UK may be affected by the laws of the relevant
jurisdictions in which they are resident. Persons who
are not resident in the UK should inform themselves of,
and observe, any applicable requirements. The Offer will
not be made, directly or indirectly, in or into the
United States, Canada, Australia or Japan or by use of
the mails, or by any means or instrumentality of
interstate or foreign commerce, or any facility of a
national securities exchange, of the United States of
America, Canada, Australia or Japan. Accordingly, copies
of this press announcement, the Offer Document and the
Form of Acceptance will not be, and must not be, mailed
or otherwise distributed or sent in, into or from the
United States, Canada, Australia or Japan and persons
receiving this press announcement, the Offer Document and
Form of Acceptance (including custodians, nominees and
trustees) must not distribute or send them in, into or
from the United States, Canada, Australia or Japan.
Save as disclosed in the Offer Document, neither Angley
Holdings, nor any person deemed to be acting in concert
with Angley Holdings, owns or controls any Crest
Packaging Shares or has any options to acquire any Crest
Packaging Shares.
The value of the Offer has been calculated on the basis
of 40,094,208 Crest Packaging Shares in issue as at 1
December 1998.
The definitions of terms used in this announcement are
contained in Appendix II to this announcement.
This announcement does not constitute an offer or an
invitation to purchase any securities. The conditions
and further terms of the Offer are set out in Appendix I
to this announcement.
Press enquiries:
Ian Tegner, Crest Packaging Tel: 0171 970 2104
Rodney Webb, Angley Holdings Tel: 01634 234 444
Richard Haycocks, Ernst & Young Tel: 0171 928 2000
Tim Linacre, WestLB Panmure Tel: 0171 638 4010
Ernst & Young of Becket House, 1 Lambeth Palace Road,
London SE1 7EU is authorised by the Institute of
Chartered Accountants in England and Wales to carry on
investment business. Ernst & Young is acting for Angley
Holdings and no-one else in connection with the Offer,
and will not be responsible to anyone other than Angley
Holdings for providing the protections offered to customers
of Ernst & Young nor for giving advice in relation to the
Offer, the contents of this announcement or any
arrangement referred to herein.
WestLB Panmure which is regulated by The Securities and
Futures Authority Limited, is acting for Crest Packaging
and no-one else in connection with the Offer and will not
be responsible to anyone other than Crest Packaging for
providing the protections offered to customers of WestLB
Panmure, nor for giving advice in relation to the Offer,
the contents of this announcement or any arrangement
referred to herein.
Ernst & Young has approved this announcement as an
investment advertisement solely for the purpose of
section 57 of the Financial Services Act 1986.
Responsibility
The directors of Crest Packaging, whose names are Ian
Tegner, Rodney Webb, Ian Stewart, Roy Cook and Michael
Kenny, accept responsibility for the information
contained in this announcement relating to the Crest
Packaging Group, the directors of Crest Packaging (solely
in their capacity as directors of Crest Packaging) and
members of their immediate families and persons connected
with them, with the exception of the opinions of the
Independent Directors relating to the recommendation of
the Offer and the recommendation itself as set out in
paragraph 11 of this announcement. To the best of the
knowledge and belief of the directors of Crest Packaging
(who have taken all reasonable care to ensure that such
is the case), the information contained in this
announcement for which they are responsible is in
accordance with the facts and does not omit anything
likely to affect the import of such information.
The Independent Directors, whose names are Ian Tegner and
Ian Stewart, accept responsibility for the opinions of
the Independent Directors relating to the recommendation
of the Offer and the recommendation itself as set out in
paragraph 11 of this announcement. To the best of the
knowledge and belief of the Independent Directors (who
have taken all reasonable care to ensure that such is the
case), the information contained in this announcement for
which they are responsible is in accordance with the
facts and does not omit anything likely to affect the
import of such information.
The directors of Angley Holdings, whose names are Rodney
Webb and Dr Annalisa Sartori, accept responsibility for
the information contained in this announcement, other
than that relating to the Crest Packaging Group, the
directors of Crest Packaging and members of their
immediate families and persons connected with them. To
the best of the knowledge and belief of the directors of
Angley Holdings (who have taken all reasonable care to
ensure that such is the case), the information contained
in this announcement for which they are responsible is in
accordance with the facts and does not omit anything
likely to affect the import of such information.
MORE TO FOLLOW
OFFUBGPCPBGRUCP
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