Craig & Rose PLC - Recommended Offers, etc
14 7월 1999 - 7:04PM
UK Regulatory
RNS No 3990a
CRAIG & ROSE PLC
14 July 1999
CRAIG & ROSE PLC ("CRAIG & ROSE" OR "THE COMPANY")
Recommended Offers for Ordinary and Preference Stock by Alaster
Cunningham
Cancellation of Listings
Highlights
*** Ordinary offer at 135p.
*** Preference offer at 100p.
*** Opportunity for shareholders to exit relatively illiquid
investments and without dealing charges.
*** Offers recommended.
*** Offers unconditional in all respects.
*** Listings of Ordinary and Preference Stock to be cancelled in
view of high cost and regulatory burdens.
Introduction
Alaster Cunningham and the Board of Craig & Rose today announce
the terms of recommended cash offers to be made by Dickson Minto
W.S. on behalf of Alaster Cunningham for the whole of the issued
Ordinary Stock of Craig & Rose not already owned by Alaster
Cunningham and for the entire issued Preference Stock of Craig &
Rose.
The Board, being precluded from making a recommendation to
Ordinary and Preference Stockholders by the City Code, has
appointed Bell Lawrie Wise Speke as an independent financial
adviser ("BLWS" or "Independent Adviser"). BLWS is recommending
the Offers subject to there being no higher offer.
Alaster Cunningham previously owned 157,614 units of Ordinary
Stock and today acquired a further 24,058 units of Ordinary Stock,
bringing his total holding to approximately 30.3 per cent. of
Craig & Rose's existing issued ordinary capital. Certain other
Craig & Rose stockholders are considered to be acting in concert
with Alaster Cunningham for the purposes of the City Code; they
own 138,993 units of Ordinary Stock representing approximately
23.2% per cent. of Craig & Rose's existing issued ordinary
capital. Those stockholders have irrevocably undertaken not to
accept the Ordinary Offer and will therefore retain such Ordinary
Stock. The members of this concert party intend, however, to
accept the Preference Offer.
In terms of Rule 9 of the City Code, Alaster Cunningham is
required, due to his acquisition of 30% of the Ordinary Stock, to
make a mandatory bid for all of the Ordinary Stock that he does
not already own in terms of the City Code. As a consequence of
this and of the fact that the Concert Party comprising Alaster
Cunningham and those acting in concert with him now own more than
50% of the Ordinary Stock, both the Offers are fully
unconditional. Thus, if stockholders accept the Offers in respect
of either Ordinary or Preference Stock, the stock will be acquired
by Alaster Cunningham and payment will be made within 14 days of
the first closing date (4 August 1999) or within 14 days of
receipt of the relevant Forms of Acceptance complete in all
respects, whichever is the later, without the need for any
conditions to be satisfied first.
The Offers
On behalf of Alaster Cunningham, Dickson Minto W.S. is offering to
acquire all of the issued Ordinary Stock not already owned by
Alaster Cunningham and the entire issued Preference Stock of Craig
& Rose on the following basis:
for each unit of Ordinary Stock: 135p in cash; and
for each unit of Preference Stock: 100p in cash
The Ordinary Offer values the entire issued ordinary capital of
Craig & Rose at #810,000.
The Preference Offer values the entire issued Preference Stock of
Craig & Rose at #100,000.
Dickson Minto W.S. are satisfied that the resources available to
Alaster Cunningham are sufficient to satisfy full acceptance of
the Offers.
Stock acquired under the Offers is to be acquired fully paid, free
from all liens, charges and encumbrances and together with all
rights attaching thereto, including the right to receive and
retain all dividends and other distributions (if any) declared,
made or paid on or after 14 July 1999.
In the event of sufficient acceptances being received by him,
Alaster Cunningham intends to apply the provisions of Sections 428
to 430F of the Companies Act 1985 to acquire compulsorily any
outstanding Ordinary or Preference Stock to which the Offers
relate.
Financial effect of acceptance of the Offers
Ordinary Offer
The offer price of 135p per unit of Ordinary Stock
represents an increase of 6.7% on the closing middle market price
of 126.5p per ordinary unit as derived from the Official List of
the London Stock Exchange for 13th July 1999, being the last
business day prior to the announcement of the offer and the
dispatch of documents.
The Ordinary Stock of Craig & Rose is traded through the London
Stock Exchange's "SEATS" system of matched bargains. The
quotation as recorded daily in the Official List is not
necessarily the same as, but is only based upon, the "SEATS"
quotation at the end of the business day. The "SEATS" middle-
market quotation price at the close of business on 13th July 1999
was 102.5p. The offer price of 135p represents a 31.7 per cent.
premium on this level. The middle-market price of 102.5p was the
average of 30p to sell and 175p to buy (both in limited size of
orders). The offer price of 135p represents 4.5 times the bid
price.
No ordinary dividend has been paid on the Ordinary Stock since
16th July 1993 when a final dividend was paid in respect of the
year ended 31st December 1992. By contrast, the cash consideration
for one unit of Ordinary Stock would produce a yield of 7.276p
(gross) per annum if re-invested on the basis set out in note (ii)
below.
Preference Offer
The following table shows, for illustrative
purposes only and on the basis set out in the note below, the
financial effects on capital value of acceptance of the Preference
offer of 100p cash for an accepting holder of one unit of
Preference Stock:
Capital
Notes p
Cash consideration 100p
Closing middle market price of one (i) 78p
Preference Stock unit
This represents an increase of 22p
This represents a percentage increase of 28.2%
Income
Gross annual income from re-investment of (ii) 5.390p
consideration
Gross dividend income on a Preference Stock (iii) 4.375p
unit
This represents an increase of 1.015p
This represents a percentage increase of 23.2%
Notes
(i) The market value of Preference Stock is based on the closing
middle market price of 78p per unit of Preference Stock
derived from the London Stock Exchange Daily Official List
for 13th July 1999, being the last business day prior to the
announcement of the Offer.
(ii) The cash consideration is assumed to be re-invested so as to
yield 5.39 per cent. gross per annum, being the FT-Actuaries
Government Securities average gross redemption yield for
British Government securities of up to five years as
published in the Financial Times on 13th July 1999, the
latest practicable date prior to publishing this document.
(iii)The income for units of Preference Stock is based on the
last two semi annual dividends paid (totalling 3.5p) together
with a 20/80ths tax credit on those dividends.
Information on Craig & Rose
The principal activity of Craig & Rose is the manufacture of
paint, varnishes and other coatings. In the year to 31st December
1998, Craig & Rose reported a turnover of #3,047,000 (1997:
#3,711,000) and profit before taxation of #78,000 (1997: loss
#390,000). The audited net assets of Craig & Rose as at 31st
December 1998 were #1,275,000 and the Company employed an average
of 48 staff during the year. In a letter to shareholders being
sent with the offers from Alaster Cunningham, the Chairman of
Craig & Rose has said that current trading is fragile and turnover
to date is down on 1998; at present, the Board expects a modest
turnover improvement for the remainder of the year. This letter
also informs shareholders of the value of the Company's property
assets and a planned move to new manufacturing facilities in Fife
that will cost an estimated #2,200,000 in total and will involve
substantial borrowings even after property sales.
Information on Alaster Cunningham
Alaster Cunningham is an Edinburgh-based businessman. He is the
owner of AMG Scotland Limited which is the parent company of the
Abercromby Motor Group Limited ("AMG"), and is Chairman of AMG.
AMG operates motor retail dealerships located in the central belt
of Scotland and has an annual turnover in excess of #140 million.
Alaster Cunningham also owns ACI Holdings Limited which is the
parent company of a property company, Applied Capital Investments
Limited ("ACI"), which acquires, develops and lets properties in
central Scotland. ACI has a net asset value of approximately #6.5
million.
Reasons for the Offers
Alaster Cunningham believes that full acceptance of the Offers
will:
** allow Craig & Rose to proceed with the proposals to relocate
its manufacturing operations to an out-of-town site and take
on the consequent risk profile change as an unlisted company;
** offer stockholders the opportunity to realise their shares
for cash before the proposed delisting (see later) and the
risk profile change associated with the relocation of
manufacturing facilities referred to above; and
** provide stockholders with a means of realising their
investment in Ordinary and Preference Stock where,
historically, levels of trading have been low and bid prices
for Ordinary Stock have for some time been low; and
** give stockholders the ability to realise their investments
without incurring dealing charges.
Management and employees
Alaster Cunningham has given assurances to the Board and to the
Independent Adviser that the existing employment rights, including
pension rights, of the employees of Craig & Rose will be fully
safeguarded.
Alaster Cunningham, John Wightman, Colin Mitchell-Rose and Jeremy
Hayward will remain directors of Craig & Rose.
It is the intention of Alaster Cunningham to continue Craig &
Rose's business of the manufacture and sale of paints and related
products.
Alaster Cunningham's Concert Party
The following persons are regarded as being part of a concert
party with Alaster Cunningham. They are the registered owners of
the number of stock units shown opposite their names. The Trustees
and Messrs. Wightman and Mitchell-Rose (in respect of their
personal shareholdings) have irrevocably undertaken not to accept
the Ordinary Offer; they intend, however, to accept the Preference
Offer.
Units of Units
Name Ordinary Preference
Stock Stock
J. Wightman 8,432 Nil
C. Mitchell-Rose 29,329 2,950
J. Wightman, C. Mitchell-Rose and
D. Mitchell as Trustees of certain 101,232 6,020
Rose Family Trusts
D. Mitchell Nil 2,550
Cancellation of Listings
The Board of Craig & Rose has come to the decision that, no matter
the result of the Offers by Alaster Cunningham, application will
be made for the listing of the Company's securities to be
cancelled with effect from 23rd August 1999. The annual costs of
listing - presently estimated by the directors at #35,000 - are
considered to be disproportionately large. Moreover, the
obligations the Company has to the London Stock Exchange with
regard to the conduct of corporate finance activities impose a
relatively heavy cost and compliance burden on virtually any
corporate transaction that could help Craig & Rose grow from its
present small size. For these reasons, the decision to delist the
Company's securities has been taken.
General
The Offers will be unconditional and on the terms which will be
set out in the formal Offer Document and the Forms of Acceptance
and such further terms as may be required to comply the rules and
regulations of the London Stock Exchange and the provisions of the
City Code.
The formal Offer Document will be despatched to Craig & Rose
stockholders by Dickson Minto W.S. later today.
It is a term of the offer that it will lapse (unless otherwise agreed
with the Panel) if the acquisition is referred to the Competition
Commission before 3.00 p.m. on 4th August 1999.
The availability of the Offer to persons not resident in the
United Kingdom may be affected by the laws of the relevant
jurisdictions.
Persons who are not resident in the United Kingdom should inform
themselves about and observe any applicable requirements.
The Offer is not being made directly or indirectly in or into the
United States, Canada, Australia or Japan or by the use of the
mails, or by means or instrumentality of interstate or foreign
commerce, or any facility of a national securities exchange, of
the United States, Canada, Australia or Japan. Accordingly,
neither this announcement, the formal Offer Document nor any
accompanying documents are being, and must not be, mailed or
otherwise distributed or sent in, into or from the United States,
Canada, Australia or Japan and persons (including custodians,
nominees and trustees) receiving this document or the formal Offer
Document and/or any accompanying documents must not distribute or
send them in, into or from the United States, Canada, Australia or
Japan.
Enquiries:
Craig & Rose
Chris Hutton, Company Secretary Tel: 0131 554 1131
Bell Lawrie Wise Speke
Frank Malcolm Tel: 0131 225 2566
Alaster Cunningham Tel: 0131 561 1906
Dickson Minto
David Mitchell Tel: 0131 225 4455
Dickson Minto W.S., which is authorised to carry on investment
business by the Law Society of Scotland, is acting for Alaster
Cunningham and no-one else in connection with the Offer and will
not be responsible to anyone other than Alaster Cunningham for
providing the protections afforded to clients of Dickson Minto
W.S. or for giving advice in relation to the Offer.
Bell Lawrie Wise Speke (a division of Brewin Dolphin Securities
Limited), which is authorised by The Securities and Futures
Authority Limited, is acting for Craig & Rose and no-one else in
connection with the Offer and will not be responsible to anyone
other than Craig & Rose for providing the protections afforded to
clients of Bell Lawrie Wise Speke, nor for providing advice in
relation to the Offers, the contents of this announcement or any
transaction or arrangement referred to herein.
Alaster Cunningham accepts responsibility for the information
contained in this announcement other than that for which the Board
of Craig & Rose accept responsibility as set out below and the
recommendation of BLWS. To the best of Alaster Cunningham's
knowledge and belief (who has taken all reasonable care to ensure
that such is the case), such information, for which he accepts
responsibility, in this announcement is in accordance with the
facts and does not omit anything likely to affect the import of
such information.
The Board of Craig & Rose, John Wightman, Alaster Cunningham,
Jeremy Hayward and Colin Mitchell-Rose accept responsibility for
the information contained in his announcement relating to Craig &
Rose, themselves, their immediate families, related trusts and
persons connected with them other than the recommendation of BLWS.
To the best of the knowledge and belief of the directors of Craig
& Rose (who have taken all reasonable care to ensure that such is
the case), such information, for which they accept responsibility,
in this announcement is in accordance with the facts and does not
omit anything likely to affect the import of such information.
Dickson Minto W.S., of 11 Walker Street Edinburgh EH3 7NE, has
approved this announcement as an investment advertisement solely
for the purposes of Section 57 of the Financial Services Act 1986.
END
OFFNFNXLFLKNEEN
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