NOT
FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART,
DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM ANY JURISDICTION WHERE
TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR
REGULATIONS OF SUCH JURISDICTION
THIS IS AN ANNOUNCEMENT FALLING UNDER RULE 2.4 OF THE CITY
CODE ON TAKEOVERS AND MERGERS (THE "CODE") AND DOES NOT CONSTITUTE
AN ANNOUNCEMENT OF A FIRM INTENTION TO MAKE AN OFFER UNDER RULE 2.7
OF THE CODE. THERE CAN BE NO CERTAINTY THAT ANY OFFER WILL BE
MADE
THIS ANNOUNCEMENT
CONTAINS INSIDE
INFORMATION
FOR
IMMEDIATE RELEASE
15 May
2024
International Distributions
Services plc
("IDS" or the "Company")
Statement regarding a revised
possible cash offer
Extension of PUSU deadline to 29
May 2024
The Board of IDS (the "Board") confirms that it
has received a revised non-binding proposal from EP Corporate Group
a.s. ("EP
Group") for the entire issued share capital of IDS
not already owned by EP Group and its affiliates, namely VESA
Equity Investment S.à r.l. ("Vesa Equity")
(the "Proposal"). As of 14 May 2024 (being the date
prior to this announcement), Vesa Equity holds 264,138,365 ordinary
shares in the capital of the Company, representing approximately
27.6% of IDS' issued share capital.
The total value of the Proposal (the
"Total
Value") represents:
370
pence per IDS
share
comprised of:
· cash
consideration of 360 pence per IDS share;
· the
final dividend in respect of the Financial Year ended 31 March
2024, which is expected to be 2 pence per IDS share (the
"2024 Final
Dividend") and which is expected to be paid in
September 2024; and
· a
special dividend of 8 pence per IDS share which would be
conditional upon completion of the transaction (the "Special
Dividend").
The Proposal values the entire
issued share capital of IDS at approximately £3.5 billion, and the
Total Value represents a premium of
approximately:
· 72.7%
to the IDS share price of 214.2 pence as at close of business on 16
April 2024, being the day immediately prior to the start of the
offer period;
· 63.2%
to the one-month volume-weighted average price as at close of
business on 16 April 2024, being the day immediately prior to the
start of the offer period; and
· 53.1%
to the twelve-month volume-weighted average price as at close of
business on 16 April 2024, being the day immediately prior to the
start of the offer period.
The Proposal follows significant
negotiation including a number of earlier proposals from
EP Group (the first of which was made on 9
April 2024 at a price of 320 pence per share in cash). The Total
Value represents an increase of 15.6% on EP Group's original
proposal.
Both Royal Mail and GLS perform
critical functions in the markets where they operate, and the Board
is particularly mindful of Royal Mail's unique heritage and
responsibilities as the designated Universal Service Provider in
the United Kingdom and a key part of national infrastructure. In
assessing the Proposal, the Board has also been very mindful of the
impact on Royal Mail and GLS and their respective stakeholders and
employees, as well as broader public interest factors.
The Board has sought, and EP Group
has agreed to offer as part of the Proposal, a set of contractual
undertakings to protect key public interest factors and recognise
Royal Mail's status as a key part of national infrastructure. It is
anticipated that the commitment to offer these contractual
undertakings to the UK Government (or, where applicable, to the
Company and/or other stakeholders directly) would be reflected in
the cooperation agreement between the parties if a firm offer is
made. Under the proposed contractual commitments, key elements of
the proposals Royal Mail has put forward for a financially
sustainable Universal Service in the future, namely a
one-price-goes-anywhere service for the entire United Kingdom and
the continuance of six-day delivery for First Class letters, would
be maintained. EP Group has agreed to offer contractual commitments
to protect employees' current rights and continue to recognise the
existing unions of both Royal Mail and GLS. The parties agree that
Royal Mail's name and brand should be protected, and Royal Mail
should remain headquartered and tax resident in the United
Kingdom.
The Board will continue to engage
with EP Group to seek to reach agreement on the exact scope and
duration of such undertakings and contractual commitments which
would be made to the UK Government (or, where applicable, to the
Company and/or other stakeholders directly). In addition, the Board
is seeking assurances from EP Group to maintain an investment grade
rating profile of IDS.
While these and other aspects of
Royal Mail's status as a key part of national infrastructure are
ultimately the Government's responsibility to protect, the Board
feels a duty to raise these issues and seek to protect the public
interest as well as the interests of employees before recommending
a bid that would take IDS into private ownership.
Having considered the Proposal, the
Board has indicated to EP Group that it would be minded to
recommend an offer to IDS shareholders should an offer be made at
the level of the Total Value, subject to satisfactory resolution of
the final terms and arrangements. EP Group has confirmed that the Proposal is not subject to any
financing pre-condition.
Accordingly, the Board will continue
to engage in discussions with EP Group to explore the Proposal in
further detail and allow for each party to complete a limited
period of confirmatory due diligence on the other.
Keith Williams, Chairman of IDS plc,
commented: "The Board is minded to
recommend this offer price, which it considers to be fair and
reflects the value of GLS' current growth plans and the progress
being made on change at Royal Mail to adapt the business to a
significant fall in the demand for letters and growth in
parcels.
"It is however regrettable that despite four years of asking,
the Government has not seen fit to engage in reform of the
Universal Service and thus improve our financial position and
ensure that Royal Mail could provide an economically sustainable
service to the British public.
"The Board believes that the proposed contractual undertakings
to be offered by EP Group should ensure that IDS continues to
deliver the key elements of the Universal Service in the UK and
protect the interests of the workforce at both Royal Mail and
GLS."
There can be
no certainty that any offer will be made.
EP Group has entered into a
confidentiality agreement with IDS pursuant to which EP Group and
Vesa Equity have agreed (among other things) to be subject to
customary standstill restrictions during the course of the offer
period (subject to customary exceptions).
Accordingly, with the consent of the
Panel on Takeovers and Mergers (the "Takeover
Panel"), the Board has agreed to an extension of the
relevant 'put up or shut up' deadline under Rule 2.6(c) of the Code
until 5.00 p.m. (London time) on 29 May 2024. This deadline may be
further extended, with the consent of the Takeover Panel, at IDS'
request, in accordance with Rule 2.6(a) of the Code.
No
statement in this announcement constitutes a post-offer undertaking
under Rule 19.5 of the Code.
A further announcement will be made
as appropriate.
Notes:
In accordance with Rule 2.5 of the
Code, EP Group reserves the right
to:
· make
an offer for IDS on less favourable terms than the Proposal: (i)
with the agreement or recommendation of the Board; (ii) if a third
party announces a firm intention to make an offer for IDS which, at
that date, is of a value less than the value of the Proposal; or
(iii) following the announcement by IDS of a Rule 9 waiver
transaction pursuant to Appendix 1 of the Code or a reverse
takeover (as defined in the Code);
· vary
the form or mix of the consideration described in this
announcement; and
· announce an offer on less favourable terms than the Proposal
if IDS announces, declares, makes or pays any dividend and/or other
return of capital or distribution to its shareholders (other than
the 2024 Final Dividend of 2 pence per IDS share and the Special
Dividend of 8 pence per IDS share) after the date of this
announcement (in which case EP Group reserves the right to reduce
the offer by an amount up to the amount of such dividend and/or
other return of capital or distribution).
This announcement has been made by
IDS with the agreement of EP Group.
Enquiries
IDS
plc
Investor Relations
John Crosse
investorrelations@ids-plc.com
Media Relations
Jenny Hall
Phone: +44 7776 993 036
Email: jenny.hall@royalmail.com
Greg Sage
Phone: +44 7483 421 374
Email: greg.sage@royalmail.com
Royal Mail press office:
press.office@royalmail.com
Barclays Bank PLC, acting through its Investment Bank
(Financial adviser and corporate broker to IDS)
+44 20 7623 2323
Alisdair Gayne, Nicola Tennent, Aamir
Khan, Philipp Gillmann
BofA Securities (Financial adviser and corporate broker
to IDS)
+44 20 7628 1000
Ed Peel, James Robertson, Justin
Anstee, Jack Williams
Goldman Sachs International (Financial adviser
to IDS)
+44 20 7774 1000
Eduard van Wyk, Mark Sorrell, Owain
Evans
Important Notices
This announcement contains inside
information and is issued on behalf of IDS
by Mark Amsden, Group General Counsel and Company Secretary.
This announcement is not intended
to, and does not constitute or form part of, any offer to sell or
issue or any solicitation of an offer to purchase, subscribe for,
or otherwise acquire, any securities or a solicitation of any vote
or approval in any jurisdiction, whether pursuant to this
announcement or otherwise.
The distribution of this
announcement in jurisdictions outside the United Kingdom may be
restricted by law and therefore persons into whose possession this
announcement comes should inform themselves about, and observe,
such restrictions. Any failure to comply with the restrictions may
constitute a violation of the securities law of any such
jurisdiction.
Barclays Bank PLC, acting through
its Investment Bank ("Barclays"), which is authorised by the
Prudential Regulation Authority and regulated in the United Kingdom
by the Financial Conduct Authority and the Prudential Regulation
Authority, is acting exclusively for IDS and no one else in
connection with the subject matter of this announcement and will
not be responsible to anyone other than IDS for providing the
protections afforded to clients of Barclays nor for providing
advice in relation to the subject matter of this announcement. In
accordance with the Code, normal United Kingdom market practice and
Rule 14e-5(b) of the Exchange Act, Barclays and its affiliates will
continue to act as exempt principal trader in IDS securities on the
London Stock Exchange. These purchases and activities by exempt
principal traders which are required to be made public in the
United Kingdom pursuant to the Code will be reported to a
Regulatory Information Service and will be available on the London
Stock Exchange website at www.londonstockexchange.com. This
information will also be publicly disclosed in the United States to
the extent that such information is made public in the United
Kingdom.
Merrill Lynch International
("BofA
Securities"), which is
authorised by the UK Prudential Regulation
Authority and regulated by the UK Financial Conduct Authority and
the UK Prudential Regulation Authority, is acting exclusively for
IDS and for no one else in connection with
the Proposal and will not be responsible to anyone other than IDS
for providing the protections afforded to its clients or for
providing advice in relation to the matters referred to in this
announcement.
Goldman Sachs International,
("Goldman
Sachs") which is authorised by the Prudential
Regulation Authority and regulated by the Financial Conduct
Authority and the Prudential Regulation Authority in the United
Kingdom, is acting exclusively for IDS and no one else in
connection with the matters referred to in this announcement and
will not be responsible to anyone other than IDS for providing the
protections afforded to clients of Goldman Sachs International, or
for providing advice in relation to the matters referred to in this
announcement.
Slaughter and May is advising IDS in
connection with the Proposal.
Forward-looking statements
This announcement contains certain
forward-looking statements concerning the Company's business,
financial condition, results of operations and certain plans,
objectives, assumptions, projections, expectations or beliefs with
respect to these items.
Forward-looking statements are
sometimes, but not always, identified by their use of a date in the
future or such words as 'anticipates', 'aims', 'due', 'could',
'may', 'will', 'would', 'should', 'expects', 'believes', 'intends',
'plans', 'potential', 'targets', 'goal', 'forecasts' or 'estimates'
or similar expressions or negatives thereof.
Forward-looking statements involve
known and unknown risks, uncertainties and other factors, which may
cause the Company's actual financial condition, performance and
results to differ materially from the plans, goals, objectives and
expectations set out in the forward-looking statements included in
this announcement.
All written or verbal
forward-looking statements, made in this announcement or made
subsequently, which are attributable to the Company or any persons
acting on its behalf are expressly qualified in their entirety by
the factors referred to above. Accordingly, readers are cautioned
not to place undue reliance on forward-looking statements. No
assurance can be given that the forward-looking statements in this
document will be realised; actual events or results may differ
materially as a result of risks and uncertainties facing the
Company. Subject to compliance with applicable law and regulation,
the Company does not intend to update the forward-looking
statements in this document to reflect events or circumstances
after the date of this document, and does not undertake any
obligation to do so.
Disclosure requirements of the Code
Under Rule 8.3(a) of the Code, any
person who is interested in 1% or more of any class of relevant
securities of an offeree company or of any securities exchange
offeror (being any offeror other than an offeror in respect of
which it has been announced that its offer is, or is
likely to be, solely in cash) must make an
Opening Position Disclosure following the commencement of the offer
period and, if later, following the announcement in which any
securities exchange offeror is first identified. An Opening
Position Disclosure must contain details of the person's interests
and short positions in, and rights to subscribe for, any relevant
securities of each of (i) the offeree
company and (ii) any securities exchange offeror(s). An Opening
Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London
time) on the 10th business day following the commencement of the
offer period and, if appropriate, by no later than 3.30 pm (London
time) on the 10th business day following the announcement in which
any securities exchange offeror is first identified. Relevant
persons who deal in the relevant securities of the offeree company
or of a securities exchange offeror prior to the deadline for
making an Opening Position Disclosure must instead make a Dealing
Disclosure.
Under Rule 8.3(b) of the Code, any
person who is, or becomes, interested in 1% or more of any class of
relevant securities of the offeree company or of any securities
exchange offeror must make a Dealing Disclosure if the person deals
in any relevant securities of the offeree company or of any
securities exchange offeror. A Dealing Disclosure must contain
details of the dealing concerned and of the person's interests and
short positions in, and rights to subscribe for, any relevant
securities of each of (i) the offeree company and (ii) any securities exchange
offeror(s), save to the extent that these details have previously
been disclosed under Rule 8. A Dealing Disclosure by a person to
whom Rule 8.3(b) applies must be made by no later than
3.30 pm (London time) on the business day
following the date of the relevant dealing.
If two or more persons act together
pursuant to an agreement or understanding, whether formal or
informal, to acquire or control an interest in relevant securities
of an offeree company or a securities
exchange offeror, they will be deemed to be a single person for the
purpose of Rule 8.3.
Opening Position Disclosures must
also be made by the offeree company and by any offeror and Dealing
Disclosures must also be made by the offeree company, by any
offeror and by any persons acting in concert with any of them (see
Rules 8.1, 8.2 and 8.4).
Details of the offeree and offeror
companies in respect of whose relevant securities Opening Position
Disclosures and Dealing Disclosures must be made can be found in
the Disclosure Table on the Takeover Panel's website at
www.thetakeoverpanel.org.uk,
including details of the number of relevant
securities in issue, when the offer period
commenced and when any offeror was first identified. You should
contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129
if you are in any doubt as to whether you are required to make an
Opening Position Disclosure or a Dealing Disclosure.
Website publication
In accordance with Rule 26.1 of the
Code, a copy of this announcement will be available on IDS' website
(www.internationaldistributionsservices.com)
by no later than 12 noon (London time) on the business day
following the date of this announcement. The contents of
the website referred to in this
announcement are not incorporated into and do not form part of this
announcement.