Tender Offer From Caledonia Investments PLC


 

TIDMTGE TIDMCLDN 
 
RNS Number : 3556B 
TGE Marine AG 
26 October 2009 
 

TGE MARINE AG 
 
 
("TGE" or the "Company") 
 
 
Tender offer from Caledonia Investments plc, Gas Fin Investments S.A. and gas 
fin s.a. 
 
 
Mildred Scheel Str 1 
Bonn 
53175 
Germany 
Directors 
Supervisory Board 
Michael Richard Alexander (Chairman) 
Hermann Alexander Alfred Thyll 
 
 
Management Board 
Dr. Manfred Karl Emil Kuever 
Steffen Schober 
Ulrich Ottmar Menninghaus 
Dr. Klaus-Dieter Gerdsmeyer 
 
 
 
 
Response to the offer from Caledonia Investments plc, Gas Fin Investments S.A. 
and Gas Fin S.A. (the "Offerors"). 
 
 
Background 
 
 
On 2 October 2009 the Offerors announced that they had that day acquired 141,937 
Registered Shares of TGE, representing 11.66 per cent of the Company from 
certain institutional shareholders (the "Initial Share Purchase"), taking the 
Offerors' combined shareholding in the Company, together with those of Gas Fin 
GbR, to 76.21 per cent in aggregate. The price agreed for the Initial Share 
Purchase was GBP37.50 per Registered Share, which represented a premium of 14.05 
per cent over the closing mid-market price of a TGE Registered Share on 1 
October 2009. 
 
 
The Offerors further announced that they believed that there was no significant 
benefit to the Company in retaining a quotation on AIM and that they intended to 
take the necessary steps to procure the cancellation of admission to AIM of 
TGE's shares. 
 
However, the Offerors also declared that they believed it was appropriate to 
offer all other Shareholders and Depository Interest Holders in TGE the 
opportunity to sell their Registered Shares or Depository Interests at the same 
price as in the Initial Share Purchase, being GBP37.50 per Registered Share or 
Depository Interest. This offer was made by way of a Tender Offer. 
 
 
On 13 October 2009 the Offerors issued an offer document setting out the terms 
of the proposed Tender Offer (the "Offer Document"). 
 
 
The Board's comment on the Offer 
 
 
As noted in TGE's interim financial results issued on Wednesday 23 September 
2009, the financial crisis of late 2008 has severely affected the shipbuilding 
market in general. In TGE's core markets, analysts predict that the drop in 
activity will continue in 2009 although the Board stated in those interim 
results that it expects the market to recover in 2010/2011. Although the Company 
has now won its first contract for over a year, details of which are contained 
in the announcement issued on 22 October 2009, the Board does not believe that 
the market is materially improving yet and there can be no guarantee for 
shareholders that any additional new contracts will be awarded to TGE in the 
short term. 
 
 
The TGE Board are also mindful that despite its hopes for 2010/2011 there is no 
guarantee that the market will recover at that time and in particular any 
recovery will be dependent upon the major ship financing banks opening new 
facilities for shipping loans. So, whilst the Board is optimistic that market 
activity will return, the pace and the extent of that recovery will depend on 
the improvements in the global economy and the availability of bank financing. 
 
 
The price offered in the Tender Offer represents a premium of 14.1 per cent over 
the closing mid-market price of a TGE Registered Share on 1 October 2009, the 
day before announcement of the Tender Offer. However, it also represents a 
discount of 71.2 per cent from the closing mid-market price of a TGE Registered 
Share on 15 May 2008, the day on which the Company listed on the AIM market of 
the London Stock Exchange. 
 
 
Nonetheless, following discussions with the Offerors and notwithstanding the new 
contract announced on 22 October 2009, the TGE Board does not believe that there 
is likely to be any increase in the price offered to investors by the Offerors. 
 
 
Important factors for TGE Shareholders to consider 
 
 
The TGE Board is mindful that as at the date of the Offer, the Offerors hold 
76.21 per cent of TGE's Registered Shares and believe that TGE Shareholders 
should consider the following matters when considering whether to accept the 
Offer: 
 
 
 
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| i)                                     | The Offerors have stated in the Offer Document that they intend to procure the cancellation of the listing and admission to trading of the TGE Shares on the AIM market of the London Stock Exchange, which would be conditional upon the consent of not less than 75 per cent of the votes actually cast by TGE Shareholders at a general meeting.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
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| ii)                                    | The TGE Board believes that, should such cancellation of the listing and admission to trading of TGE Shares on the AIM market of the London Stock Exchange be completed, the liquidity and marketability of the TGE Shares would reduce substantially. If TGE Shareholders do not accept the Offer, there can be no guarantee that they will be able to sell their TGE Shares at a price equivalent to that under the Offer for some time, if ever. In addition, according to the German Stock Corporation Act, minority shareholders can not impose the purchase of their shares on any majority shareholder(s) in consideration for appropriate compensation. A compensation claim of minority shareholders against a majority shareholder could only arise in connection with certain structural measures pursuant to the AktG or the Reorganisation of Companies Act (UmwG) (for example, profit and loss pooling agreements between the Company and a majority shareholder). Therefore in the absence of any significant structural corporate activities the Offerors will not be obliged to buy the shares of any Minority Shareholders at any price following the delisting. | 
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| iii)                                   | In addition, should such delisting take place, TGE Shareholders who do not accept the Offer would no longer benefit from the shareholder protections provided by the rules applicable to companies listed and admitted to trading on the AIM market of the London Stock Exchange (for instance, the Company will be under no obligation to make public announcements regarding changes in its financial condition).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
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| iv)                                    | Following the delisting of TGE from AIM, the German Takeover Act will not apply since the shares of TGE should not be listed in any other regulated market in Germany or the European Economic Area (so, for instance, there will be no rules governing the levels of consideration to be offered under any takeover of the Company).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 
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Conclusion 
 
 
The TGE Board, having been so advised by Singer Capital Markets, believe that 
the key factors for TGE Shareholders when considering whether to accept the 
Offer are the matters referred to above in the section "Important factors for 
TGE Shareholders to consider". Under those circumstances, the TGE Board would 
see little alternative for Shareholders who do not want to hold a minority stake 
in a potentially unlisted company other than to accept the Offer. 
 
 
Unless otherwise specifically defined in this announcement, terms defined in the 
Offer Document shall have the same meanings when used in this announcement. 
 
 
For further information, please contact: 
 
Singer Capital Markets Limited    +44 (0)20 3205 7500 
Jos Trusted 
James Maxwell 
 
 
Pelham Public Relations                        +44(0)20 7337 1500 
Mark Antelme 
Henry Lerwill 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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