RNS Number:1907Q
Warner Estate Holdings PLC
26 January 2007
Not for release, publication or distribution, in whole or in part, in, into or
from the United States or any other Restricted Jurisdiction.
ANNOUNCEMENT
FOR IMMEDIATE RELEASE
26 January 2007
RECOMMENDED CASH OFFER
by
WARNER ESTATE HOLDINGS PLC
for
JS REAL ESTATE PLC
Summary
The boards of Warner Estate and JS are pleased to announce the terms of a
recommended cash offer to be made by Warner Estate to acquire the entire issued
and to be issued share capital of JS.
- Under the terms of the Offer, JS Shareholders will receive 700 pence in cash
for each JS Share held by them.
- The Offer values the entire issued share capital of JS at approximately #114
million.
- * The Offer represents:
* a discount of approximately 10.3 per cent. to the LSE Closing Price
of 780 pence per JS Share on 25 January 2007 (being the last Business Day
prior to the date of this Announcement).
* a premium of approximately 13.4 per cent. to the Closing Price of
617.5 pence per JS Share on 26 July 2006 (being the date 6 months prior
to the date of this Announcement).
* a premium of approximately 35.3 per cent. to the Closing Price of
517.5 pence per JS Share on 26 January 2006 (being the date 12 months
prior to the date of this Announcement).
- As an alternative to all or some of the cash consideration to which they
would otherwise be entitled under the Offer, accepting JS Shareholders (other
than US Persons and shareholders in other Restricted Jurisdictions) may elect
to receive Loan Notes on the basis of #1 nominal of Loan Notes for every #1
of cash consideration.
- The JS Directors, who have been so advised by Oriel Securities, unanimously
consider the terms of the Offer to be fair and reasonable. In providing
advice to the JS Directors, Oriel Securities has taken into account the
commercial assessments of the JS Directors.
- The JS Directors believe that the Offer is in the best interests of JS
Shareholders as a whole and intend to recommend unanimously that JS
Shareholders accept the Offer as they have irrevocably undertaken to do, or
procure to be done, in respect of their own beneficial holdings.
- Warner Estate has received irrevocable undertakings from the JS Directors and
certain persons connected with them to accept, or procure acceptance of, the
Offer in respect of, in aggregate, 2,221,706 JS Shares, representing
approximately 13.64 per cent. of the issued share capital of JS.
- In addition, Warner Estate has received irrevocable undertakings from certain
other JS Shareholders to accept the Offer, save in certain limited
circumstances, in respect of a total of 6,919,465 JS Shares, representing
approximately 42.49 per cent. of the issued share capital of JS.
- Warner Estate has therefore received irrevocable undertakings to accept the
Offer, or procure acceptance of the Offer, in respect of 9,141,171 JS Shares
in aggregate, representing approximately 56.14 per cent. of the issued share
capital of JS.
Commenting on the Offer, Stephen Mulliner, Chairman of JS, said:
"The Offer from Warner Estate has received the unanimous recommendation of the
JS Board. We believe that the Offer fully reflects the value of JS' assets and,
in addition, takes account of the potential benefit that would accrue to JS
Shareholders in removing the inherent tax liability were it able to convert to a
REIT.
" The Offer is at a discount to the LSE Closing Price on 25 January 2007 of 780
pence. However, it should be noted thatJS' share price has risen by 50 per
cent.from 520 pence at the end of our last financial year and by 28 per
cent.from 607.5 pence since JS' half year end only four months ago. To give
further perspective, over the same periods, the FTSE Small Cap Real Estate Index
has risen by approximately 10 per cent.and 7 per cent.respectively. The increase
inJS' share price has occurred on very low trading volumes and transactions at
recent levels have been for small numbers of shares. Consequently, theJS
Directors do not believe that the recent price levels represent a realistic
indication of the level at which large shareholdings could be traded. More
importantly, based upon the Offer price, the JS team has delivered returns to
shareholders of over 21 per cent. per annum over the last nine years and I would
like to thank them for the enterprise and commitment that they have
demonstrated. I would also like to thank the extraordinary support and loyalty
that many shareholders have shown JS both before and during its time as a public
company."
Philip Warner, Executive Chairman of Warner Estate, said:
"The acquisition of JS is in line with Warner Estate's strategy to increase the
quantum of our property assets under management. Circa 40 per cent. of the JS
portfolio is located in St John's Wood High Street, London NW8, which provides
good asset management opportunities. The portfolio also improves our exposure to
the South East and there are three sites with development potential. We believe
our offer enables JS shareholders to realise full value for the JS property
portfolio through our ability to take account of the Capital Gains Tax which
will be eliminated on conversion to REIT status. At a time when opportunities to
add value are difficult to find, this acquisition will be NAV neutral on
completion, leverages our existing resources through the reduction in JS costs
and improves Warner Estate's status for REIT conversion."
The above summary should be read in conjunction with the full text of this
Announcement and the Appendices to it and with the full terms and conditions of
the Offer to be set out in the Offer Document and the Form of Acceptance.
Appendix I sets out the conditions of and certain further terms of the Offer.
Appendix II contains details of the irrevocable undertakings received by Warner
Estate. Appendix III contains source notes relating to certain information
contained in this Announcement. Certain terms used in this Announcement are
defined in Appendix IV.
Enquiries:
Warner Estate Tel: +44 (0) 20 7907 5100
Philip Warner
Peter Collins
Michael Stevens
Bridgewell Tel: +44 (0) 20 7003 3000
(Financial adviser and broker to Warner Estate)
Heraclis Economides
Rashmi Sinha
City Profile Tel: +44 (0) 20 448 3244
(Financial public relations to Warner Estate)
Simon Courtenay
William Attwell
JS
Stephen Mulliner Tel: +44 (0) 7711 672 015
Tony Roscoe Tel: +44 (0) 20 7408 1515
Oriel Securities Tel: +44 (0) 20 7710 7600
(Financial adviser and broker to JS)
Simon Bragg
Natalie Fortescue
Michael Shaw
A presentation to analysts has been scheduled for 11.00 am on 26 January 2007 at
the offices of City Profile Group Limited, 7-9, Copthall Avenue, London, EC2R
7NJ.
This Announcement is not intended to and does not constitute or form any part of
any offer, invitation or the solicitation of an offer to purchase, subscribe for
or otherwise acquire, sell or dispose of, any securities pursuant to the Offer
or otherwise. The Offer will be made solely by the Offer Document and Form of
Acceptance, when issued, which will contain the full terms and conditions of the
Offer, including details of how the Offer may be accepted.
Bridgewell, which is authorised and regulated in the United Kingdom by the
Financial Services Authority, is acting exclusively for Warner Estate and no-one
else in connection with the Offer and will not be responsible to anyone other
than Warner Estate for providing the protections afforded to clients of
Bridgewell nor for giving advice in relation to the Offer or any matter or
arrangement referred to in this Announcement.
Oriel Securities, which is authorised and regulated in the United Kingdom by the
Financial Services Authority, is acting exclusively for JS in connection with
the Offer and for no-one else in connection with the Offer and will not be
responsible to anyone other than JS for providing the protections afforded to
clients of Oriel Securities nor for giving advice in relation to the Offer or
any matter or arrangement referred to in this Announcement.
This Announcement has been prepared in accordance with English law, the Takeover
Code and the AIM Rules and information disclosed may not be the same as that
which would have been prepared in accordance with the law of jurisdictions
outside England.
The Offer will be subject to the applicable rules and regulations of the
Financial Services Authority, the London Stock Exchange and the Takeover Code.
The distribution of this Announcement in jurisdictions other than the United
Kingdom and the availability of the Offer to JS Shareholders who are not
resident in the United Kingdom may be affected by the laws of relevant
jurisdictions. Therefore, any persons who are subject to the laws of any
jurisdiction other than the United Kingdom or JS Shareholders who are not
resident in the United Kingdom will need to inform themselves about, and
observe, any applicable requirements.
Unless otherwise determined by Warner Estate or required by the Takeover Code
and permitted by applicable law and regulation, the Offer is not being, and will
not be made, directly or indirectly, in or into or by use of the mails of, or by
any other means or instrumentality (including, without limitation, facsimile
transmission, telex, telephone, internet or other forms of electronic
transmission) of inter-state or foreign commerce of, or any facility of a
national, state or other securities exchange of, the United States or any other
Restricted Jurisdiction, and will not be capable of acceptance by any such use,
means, instrumentality or facility or from within the United States, or any
other Restricted Jurisdiction. Accordingly, unless otherwise determined by
Warner Estate or required by the Takeover Code and permitted by applicable law
and regulation, copies of this Announcement are not being, and must not be,
directly or indirectly, mailed, transmitted or otherwise forwarded, distributed
or sent in, into or from the United States or any other Restricted Jurisdiction,
and persons receiving this Announcement (including, without limitation,
custodians, nominees and trustees) must not mail, or otherwise, forward,
distribute or send it in, into or from such jurisdiction.
Any persons (including without limitation, any custodian, nominee and trustee)
who would, or otherwise intends to, or may have a contractual or legal
obligation to, forward this Announcement, and/or the Offer Document, and/or any
other related document to any jurisdiction outside the United Kingdom should
inform themselves of, and observe, any applicable legal or regulatory
requirements of their jurisdiction.
The Loan Notes to be issued pursuant to the Loan Note Alternative have not been,
and will not be, listed on any stock exchange and have not been, and will not
be, registered under the US Securities Act or under the laws of any state,
district or other jurisdiction of the United States, nor have clearances been,
nor will they be, obtained from the securities commission or similar authority
of any province or territory of Canada and no prospectus has been, or will be,
filed, or registration made, under any securities law of any province or
territory of Canada, nor has a prospectus in relation to the Loan Notes been,
nor will one be, lodged with, or registered by, the Australian Securities and
Investments Commission, nor have any steps been taken, nor will any steps be
taken, to enable the Loan Notes to be offered in compliance with applicable
securities laws of Japan and no regulatory clearances in respect of the Loan
Notes have been, or will be, applied for in any other jurisdiction. Accordingly,
unless an exemption under relevant securities laws is available, the Loan Notes
are not being, and may not be, offered, sold, resold, delivered or distributed,
directly or indirectly, in, into or from the United States or any other Loan
Note Restricted Jurisdiction or to, or for the account or benefit of, any US
person or resident of any other Loan Note Restricted Jurisdiction. The Offer
does not constitute an offer of Loan Notes in the United States. Neither the US
Securities and Exchange Commission nor any US state securities commission has
approved or disapproved of the Loan Notes, or determined if this Announcement is
accurate or complete. Any representation to the contrary is a criminal offence.
Nothing in this Announcement is intended, or is to be construed, as a forecast,
projection or estimate of the future financial performance of either JS or
Warner Estate.
Cautionary statement regarding forward-looking statements
This Announcement, including information included or incorporated by reference
in this Announcement may contain forward-looking statements concerning Warner
Estate and JS. Generally the words "will", "may", "should", "continue",
"believes", "expects", "intends", "anticipates" or similar expressions identify
forward-looking statements. The forward-looking statements involve risks and
uncertainties that could cause actual results to differ materially from those
suggested by them. Many of these risks and uncertainties relate to factors that
are beyond the companies' abilities to control or estimate precisely, such as
future market conditions and the behaviours of other market participants, and
therefore undue reliance should not be placed on such statements which speak
only as at the date of this Announcement. Warner Estate and JS assume no
obligation and do not intend to update these forward-looking statements, except
as required pursuant to applicable law.
Dealing Disclosure Requirements
Under the provisions of Rule 8.3 of the Takeover Code, if any person is, or
becomes, 'interested' (directly or indirectly) in one per cent. or more of any
class of 'relevant securities' of JS, all 'dealings' in any 'relevant
securities' of JS (including by means of an option in respect of, or a
derivative referenced to, any such 'relevant securities') must be publicly
disclosed by no later than 3.30 pm (London time) on the London business day
following the date of the relevant transaction. This requirement will continue
until the date on which the Offer becomes, or is declared, unconditional as to
acceptance, lapses or is otherwise withdrawn or on which the 'offer period'
otherwise ends. If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire an 'interest' in 'relevant
securities' of JS they will be deemed to be a single person for the purpose of
Rule 8.3 of the Takeover Code.
Under the provisions of Rule 8.1 of the Takeover Code, all 'dealings' in
'relevant securities' of JS by Warner Estate or JS or by any of their respective
'associates' must be disclosed by no later than 12.00 noon (London time) on the
London business day following the date of the relevant transaction.
A disclosure table, giving details of the companies in whose 'relevant
securities' 'dealings' should be disclosed, and the number of such securities in
issue, can be found on the Panel's website at www.thetakeoverpanel.org.uk.
'Interests in securities' arise, in summary, when a person has long economic
exposure, whether conditional or absolute, to changes in the price of
securities. In particular, a person will be treated as having an 'interest' by
virtue of the ownership or control of securities, or by virtue of any option in
respect of, or derivative referenced to, securities.
Terms in quotation marks are defined in the Takeover Code, which can also be
found on the Panel's website. If you are in any doubt as to whether or not you
are required to disclose a 'dealing' under Rule 8 of the Takeover Code, you
should consult the Panel.
Not for release, publication or distribution, in whole or in part, in, into or
from the United States or any other Restricted Jurisdiction.
ANNOUNCEMENT
FOR IMMEDIATE RELEASE
26 January 2007
RECOMMENDED CASH OFFER
by
WARNER ESTATE HOLDINGS PLC
for
JS REAL ESTATE PLC
1. Introduction
The boards of Warner Estate and JS are pleased to announce the terms of a
recommended cash offer to be made by Warner Estate to acquire the entire issued
and to be issued share capital of JS.
2. The Offer
The Offer, which will be on the terms and subject to the conditions set out
below and in Appendix I, and to be set out in the Offer Document and the Form of
Acceptance, will be made on the following basis:
for each JS Share 700 pence in cash
The Offer values the entire issued share capital of JS at approximately #114
million.
* The Offer represents:
* a discount of approximately 10.3 per cent. to the LSE Closing Price of
780 pence per JS Share on 25 January 2007 (being the last Business Day prior
to the date of this Announcement).
* a premium of approximately 13.4 per cent. to the Closing Price of 617.5
pence per JS Share on 26 July 2006 (being the date 6 months prior to the
date of this Announcement).
* a premium of approximately 35.3 per cent. to the Closing Price of 517.5
pence per JS Share on 26 January 2006 (being the date 12 months prior to the
date of this Announcement).
Over the last six months, the price of JS Shares has risen significantly, driven
by a combination of market factors affecting sentiment in the real estate sector
and the lack of liquidity in JS Shares. The price of JS' Shares has risen by 50
per cent. from 520 pence at the end of JS' last financial year and by 28 per
cent. from 607.5 pence since JS' half year end only four months ago. To give
further perspective, over the same periods, the FTSE Small Cap Real Estate Index
has risen by approximately 10 per cent. and 7 per cent. respectively. The
increase in JS' share price has occurred on very low trading volumes and
transactions at recent levels have been for small numbers of shares.
Consequently, the JS Directors do not believe that the recent price levels
represent a realistic indication of the level at which large shareholdings could
be traded or an appropriate benchmark on which to assess an offer to acquire the
entire share capital of JS.
The Offer price of 700 pence for each JS Share equates to a total Offer Value of
approximately #114 million for the entire share capital of JS. In arriving at
this value Warner Estate have assumed a 5 per cent. yield on the rental income
of the JS portfolio for the twelve months to 24 September 2006 and deducted the
interim dividend (which was paid in early January) and acquisition costs.
3. Recommendation
The JS Directors, who have been so advised by Oriel Securities, unanimously
consider the terms of the Offer to be fair and reasonable. In providing advice
to the JS Directors, Oriel Securities has taken into account the commercial
assessments of the JS Directors.
The JS Directors believe that the Offer is in the best interests of JS
Shareholders as a whole and intend to recommend unanimously that JS Shareholders
accept the Offer as they have irrevocably undertaken to do, or procure to be
done, in respect of their own beneficial holdings.
4. The Loan Note Alternative
As an alternative to some or all of the cash consideration to which they would
otherwise be entitled under the Offer, accepting JS Shareholders, other than US
Persons and other shareholders in Restricted Jurisdictions, will be entitled to
elect to receive Loan Notes to be issued by Warner Estate on the following
basis:
for every #1 of cash consideration #1 nominal of Loan Notes
The Loan Notes, which will be governed by English Law, will be unsecured and
issued by Warner Estate, credited as fully paid, in amounts and integral
multiples of #1 nominal value.
The Loan Notes will bear interest (from the date of issue to the relevant holder
of Loan Notes) at a rate of 1 per cent. per annum below LIBOR (for three month
sterling deposits). Interest will be payable semi-annually in arrears on 30
September and 31 March in each year, up to and including 31 March 2012 (each an
"Interest Payment Date") (or, if not a Business Day in any year, on the first
Business Day thereafter) in respect of the period (an "Interest Period")
starting on the previous Interest Payment Date and ending on the day before the
next Interest Payment Date. However, the first payment of interest will be on
the later of 30 April 2007 and the date that is one month after the date of
execution of the instrument constituting the Loan Notes (which shall therefore
be the first Interest Payment Date) and in respect of the period from (and
including) the date of execution of the instrument constituting the Loan Notes
to (but excluding) the first Interest Payment Date.
The Loan Notes will be redeemable at the holder's option in part or in whole, on
not less than 14 days' notice, on each Interest Payment Date, other than 31
March 2012. Unless previously redeemed or purchased, the Loan Notes will be
redeemed on 31 March 2012 (or, if not a Business Day, on the first Business Day
thereafter). The Loan Notes can be redeemed by Warner Estate at anytime on or
after 31 March 2010 if at any time thereafter the aggregate nominal amount of
all the Loan Notes then outstanding shall be equal to or less than twenty per
cent. of the total amount of the Loan Notes outstanding immediately after the
first redemption date.
Unless Warner Estate decides otherwise, no Loan Notes will be issued unless, by
the time the Offer has become or is declared unconditional in all respects,
valid elections have been received for at least #15 million in nominal value of
Loan Notes. If insufficient valid elections are received, JS Shareholders who
validly elect for the Loan Note Alternative will instead receive cash in
accordance with the terms of the Offer.
The Loan Notes will not be transferable and no application will be made for the
Loan Notes to be listed, quoted or dealt on, any stock exchange or other trading
facility.
The Loan Note Alternative is conditional on the Offer becoming or being declared
unconditional in all respects and will remain open for acceptance for so long as
the Offer remains open for acceptance.
Further details of the Loan Notes will be contained in the Offer Document.
5. Further Terms of the Offer
The JS Shares will be acquired pursuant to the Offer fully paid and free from
all liens, charges, equitable interests, encumbrances, rights of pre-emption and
any other interests of any nature whatsoever and together with all rights now or
hereafter attaching thereto, including, without limitation, voting rights and
the right to receive and retain in full all dividends and other distributions
(if any) announced, declared, made or paid on or after 26 January 2007.
6. Background to, and reasons for, the Offer
The Warner Estate Board believes that the acquisition of JS offers an attractive
opportunity to increase Warner Estate's property assets under management whilst
increasing its presence in London and the South East. Some of JS' assets may be
allocated to existing Warner Estate funds.
The Warner Estate Board intends to leverage Warner Estate's existing resources
in order to manage the JS assets and would reduce overheads through the closure
of JS' head office. This will improve the yield on the JS properties. The Warner
Estate Board further believes that JS' assets provide a number of development
and asset management opportunities. The addition of the JS portfolio also
increases the scale of Warner Estate's activities for REIT conversion in 2007.
7. Background to, and reasons for, recommending the Offer
JS was founded in 1899 and was almost entirely owned by members of the family of
James Smith until it joined the Unlisted Securities Market in 1989. In 1994, JS
became fully listed on the London Stock Exchange where it remained until August
2005 when it transferred to AIM. The family of James Smith has maintained a
significant interest in JS throughout its life as a public company both in
respect of a presence on the JS Board and the size of the aggregate family
shareholding. Immediately after the listing in 1994, family holders held
approximately one third of the shares in issue. However, over the last eight
years JS has repurchased approximately 10.5 million JS Shares from institutional
shareholders with the result that the Smith family shareholders now hold
approximately half of the JS Shares in issue. In addition, a further 29 per
cent. is held by a single professional investor.
JS has carried on business during the last twenty years principally as a
generalist real estate investor together with a limited amount of development
activity. In 1998 the JS Board adopted a strategy aimed at generating above
market total returns for JS Shareholders by pursuing acquisitions that offered
potential for adding value through active management. The success of this
approach can be measured by the fact that in the eight financial years since 24
March 1998, JS has reported a compound increase in net asset value per share of
approximately 19 per cent. per annum. On the basis of the Offer price, total
returns to JS Shareholders from the same date, calculated by reference to the
increase in share price and in dividends paid, have been approximately 21 per
cent. per annum.
Despite this background of strong performance, the JS Board decided to explore
an approach from Warner Estate having recognised two important developments in
the real estate sector that could have an impact on JS' ability to continue to
deliver such high returns in the medium term. Firstly, increased competition
from a significantly broadened real estate investor base and an ever more
regulatory environment has favoured and will continue to favour, larger and more
specialised property investment companies. Secondly, the introduction of REITs
has created significant tax advantages for those companies able to satisfy the
conditions of REIT status. Given the current shareholder structure of JS and its
presence on AIM, a conversion to REIT status is not likely to be as
straightforward as for other listed property companies such as Warner Estate.
In considering the terms of the Offer, the JS Board has taken into account the
value offered for the assets of JS as well as the tax benefit it would be likely
to receive if it could convert to a REIT itself. As at 24 March 2006, JS had a
contingent liability to tax on the disposal of its property portfolio equivalent
to 77 pence per share. That liability will have risen broadly in line with any
increase in the value of the portfolio but is capable of elimination by a
purchaser who attains REIT status in return for a tax charge of 2 per cent. of
the aggregate portfolio value. The JS Board believes that the Offer fully
reflects the value of JS' assets and, in addition, takes account of the
potential benefit that would accrue to JS Shareholders in removing the inherent
tax liability were it able to convert to a REIT.
The JS Board is keenly aware that in recommending the Offer it is proposing that
over 107 years of independent existence should come to an end. The Board is also
cognisant of the fact that many JS Shareholders have shown extraordinary loyalty
and support to JS, particularly during the last eighteen years when it has been
a public company. However, the JS Board believes that the Offer fully reflects
the value created by the JS team and that it allows all JS Shareholders an
excellent opportunity to benefit from a realisation of their investment for
cash. As a result the JS Board considers it appropriate to recommend acceptance
of the Offer to JS Shareholders.
8. Information on JS
JS is a property company focusing on commercial real estate investment in London
and southern England.
JS' strategy is to target opportunities where it can supplement returns through
asset management and development activity, predominantly through vacant,
part-let and short-term income producing assets for refurbishment or
redevelopment.
JS generated profit before tax of #6.7 million for the year ending 24 March 2006
(#5.9 million in 2005) from turnover of #10.4 million (#11.6 million in 2005).
JS had a rental income of #6.6 million for the year ended 24 March 2006 and #3.3
million for the 6 months to 24 September 2006.
9. Information on Warner Estate
Founded in 1891, Warner Estate is a UK property investment group whose primary
objective is to maximise total return for shareholders, both by increasing net
asset value per share and by dividend growth from an improving earnings stream.
Warner Estate has delivered 35 years of continuous dividend growth to its
shareholders. Warner Estate specialises in the management of property across the
retail, office and industrial sectors and had #2.8 billion of property assets
under management as at 30 September 2006.
As stated in Warner Estate's interim results, released on 29 November 2006,
Warner Estate will continue to consider and research new sectors which further
the strategy. In line with this strategy Warner Estate announced, in October
2006, the formation of the #98 million Greater London Office Fund, with Barclays
Capital, focused on office investments throughout London and the Greater London
principal boroughs.
In light of the introduction of legislation permitting the formation of REITs
from 1 January 2007, the Warner Estate Directors have, following evaluation,
concluded that conversion to REIT status would be of benefit to Warner Estate
Shareholders and therefore Warner Estate currently intends to convert.
Conversion would not take place before 1 April 2007. As at 30 September 2006 the
conversion charge and the related costs were estimated to be in the order of
#15-20 million and the capital gains tax liability which would be extinguished
was estimated to be #34 million.
Warner Estate generated profit before tax of #91.0 million for the year ending
31 March 2006 (#55.2 million in 2005) from turnover of #67.5 million (#45.1
million in 2005).
10. Financing for the Offer
The consideration payable under the Offer will be funded entirely in cash,
through an increase in existing banking facilities and a placing of up to
2,675,125 new Warner Estate ordinary shares representing up to 5 per cent. of
the issued share capital of Warner Estate in order to raise approximately
#21,400,000. The placing is also announced today and is underwritten by
Bridgewell.
Bridgewell confirms that it is satisfied that sufficient financial resources are
available to Warner Estate to satisfy in full the cash consideration payable to
JS Shareholders under the terms of the Offer.
11. Inducement fee
JS and Warner Estate have entered into an agreement under which JS has agreed to
pay Warner Estate a fee equal to one per cent. of the Offer Value (inclusive of
any VAT payable thereon save to the extent that such VAT is recoverable by JS)
in the event that:
(a) the JS Directors withdraw, or adversely modify, or make subject to any
condition or qualification, their recommendation of the Offer (including, for
the avoidance of doubt recommending a Competing Offer); or
(b) the Offer lapses or is withdrawn and before the lapse or withdrawal a
Competing Offer for JS is announced (whether under Rule 2.4 or Rule 2.5 of the
Takeover Code or otherwise) which subsequently becomes or is declared
unconditional in all respects or is otherwise completed or implemented.
Nothing in the inducement fee agreement obliges JS to pay any amount which the
Panel determines would not be permitted by Rule 21.2 of the Takeover Code.
12. Management, employees and location
The Warner Estate Board has given assurances to the JS Directors that, on the
Offer becoming or being declared unconditional in all respects, the existing
employment rights, including pension rights, of all JS Group employees will be
observed at least to the extent required by applicable law.
If the Offer becomes or is declared unconditional in all respects, it is
intended that the employment contracts of Antony Roscoe, Anthony Rutherford and
Kamla Gardner will be terminated although, as part of the termination
agreements, they have agreed to work with Warner Estate for a transitional
period. Also, Stephen Mulliner, Simon Speirs and Susan Weeks will resign.
13. Irrevocable undertakings
Warner Estate has received irrevocable undertakings to accept (or procure
acceptances of) the Offer from the JS Directors and certain persons connected
with them in respect of, in aggregate, 2,221,706 JS Shares representing
approximately 13.64 per cent. of JS' issued share capital.
Warner Estate has also received irrevocable undertakings to accept the Offer
from Trefick Limited in respect of 4,670,285 JS Shares representing
approximately 28.68 per cent. of JS' issued share capital and from certain
shareholders connected with or related to the James Smith family in respect of,
in aggregate, 2,249,180 JS Shares representing approximately 13.81 per cent. of
JS' issued share capital.
Warner Estate has therefore received irrevocable commitments to accept (or
procure acceptances of) the Offer in respect of, in aggregate, 9,141,171 JS
Shares, representing approximately 56.14 per cent. of the issued share capital
of JS.
Further details of these irrevocable undertakings are set out in Appendix II to
this Announcement.
14. Disclosure of interests in JS
As at the close of business on 25 January 2007 (the latest practicable Business
Day prior to the date of this Announcement), neither Warner Estate, nor any
Warner Estate Director, nor, so far as Warner Estate is aware, any person acting
in concert with Warner Estate has any interest in, or has any right to subscribe
for, any relevant securities of JS, nor are they party to any short positions
(whether conditional or absolute and whether in the money or otherwise) relating
to relevant securities of JS, including short positions under derivatives,
agreements to sell or any delivery obligations or rights to require another
person to take delivery.
Neither Warner Estate nor any Warner Estate Director nor, so far as Warner
Estate is aware, any person acting in concert with Warner Estate has borrowed or
lent any relevant securities of JS. No arrangement exists with Warner Estate nor
any associate of Warner Estate (within the meaning of the Takeover Code) in
relation to relevant securities of JS. For these purposes, "arrangement"
includes any indemnity or option arrangement and any agreement or understanding,
formal or informal, of whatever nature, relating to relevant securities of JS
which may be an inducement to deal or refrain from dealing in such securities.
15. Extraordinary General Meeting
Trefick Limited holds 13.79 per cent. of Warner Estate's existing issued share
capital. It is also a 28.68 per cent. shareholder in JS. Accordingly, the
acceptance of the Offer by Trefick will amount to a related party transaction by
Warner Estate under the Listing Rules, therefore requiring the approval, by
ordinary resolution, of Warner Estate Shareholders (other than Trefick and its
associates) at an extraordinary general meeting. It is intended to publish the
notice of the Extraordinary General Meeting of Warner Estate at the time of
posting the Offer Document. The Offer will be conditional upon the passing of
the Ordinary Resolution. If the Ordinary Resolution is not passed and the Offer
lapses or is withdrawn as a result, Warner Estate has agreed to pay JS a fee of
0.5 per cent. of the Offer Value (inclusive of any VAT payable thereon save to
the extent that such VAT is recoverable by JS).
16. Compulsory acquisition and cancellation of trading
If Warner Estate receives acceptances under the Offer in respect of, and/or
otherwise acquires 90 per cent. or more of the JS Shares to which the Offer
relates, Warner Estate intends to exercise its rights pursuant to the provisions
of sections 428 to 430F (inclusive) of the Companies Act to acquire
compulsorily, any outstanding JS Shares in respect of which the Offer has not
been accepted.
After the Offer becomes or is declared unconditional in all respects and Warner
Estate has by virtue of its shareholdings and acceptances of the Offer acquired,
or agreed to acquire, issued share capital representing at least 75 per cent. of
the voting rights of JS, Warner Estate intends, as soon as practicable and in
accordance with the AIM Rules, to procure the making of an application by JS to
the London Stock Exchange for the cancellation of the admission to trading of JS
Shares on AIM. A notice period of not less than 20 business days prior to the
cancellation will commence either on Warner Estate attaining 75 per cent. or
more of the voting rights as described above or on the first date of issue of
compulsory acquisition notices under sections 428 to 430F of the Companies Act.
The cancellation of the admission of JS Shares to trading on AIM will
significantly reduce the liquidity and marketability of any JS Shares not
assented to the Offer and their value may be affected in consequence.
It is also proposed that, following the Offer becoming unconditional in all
respects and after the cancellation of the admission of JS Shares to trading on
AIM, JS will be re-registered as a private company under the relevant provisions
of the Companies Act.
17. General
The Offer will be on the terms and subject to the conditions set out herein and
in Appendix I, and to be set out in the Offer Document and Form of Acceptance.
The formal Offer Document will be sent to shareholders of JS by 23 February 2007
(or such later date as the Panel may agree).
Enquiries:
Warner Estate Tel: +44 (0) 20 7907 5100
Philip Warner
Peter Collins
Michael Stevens
Bridgewell Tel: +44 (0) 20 7003 3000
(Financial adviser and broker to Warner Estate)
Heraclis Economides
Rashmi Sinha
City Profile Tel: +44 (0) 20 448 3244
(Financial public relations to Warner Estate)
Simon Courtenay
William Attwell
JS
Stephen Mulliner Tel: +44 (0) 7711 672 015
Tony Roscoe Tel: +44 (0) 20 7408 1515
Oriel Securities Tel: +44 (0) 20 7710 7600
(Financial adviser and broker to JS)
Simon Bragg
Natalie Fortescue
Michael Shaw
A presentation to analysts has been scheduled for 11.00 am on 26 January 2007 at
the offices of City Profile Group Limited, 7-9, Copthall Avenue, London, EC2R
7NJ.
This Announcement is not intended to and does not constitute or form any part of
any offer, invitation or the solicitation of an offer to purchase, subscribe for
or otherwise acquire, sell or dispose of, any securities pursuant to the Offer
or otherwise. The Offer will be made solely by the Offer Document and Form of
Acceptance, when issued, which will contain the full terms and conditions of the
Offer, including details of how the Offer may be accepted.
Bridgewell, which is authorised and regulated in the United Kingdom by the
Financial Services Authority, is acting exclusively for Warner Estate and no-one
else in connection with the Offer and will not be responsible to anyone other
than Warner Estate for providing the protections afforded to clients of
Bridgewell nor for giving advice in relation to the Offer or any matter or
arrangement referred to in this Announcement.
Oriel Securities, which is authorised and regulated in the United Kingdom by the
Financial Services Authority, is acting exclusively for JS in connection with
the Offer and for no-one else in connection with the Offer and will not be
responsible to anyone other than JS for providing the protections afforded to
clients of Oriel Securities nor for giving advice in relation to the Offer or
any matter or arrangement referred to in this Announcement.
This Announcement has been prepared in accordance with English law, the Takeover
Code and the AIM Rules and information disclosed may not be the same as that
which would have been prepared in accordance with the law of jurisdictions
outside England.
The Offer will be subject to the applicable rules and regulations of the
Financial Services Authority, the London Stock Exchange and the Takeover Code.
The distribution of this Announcement in jurisdictions other than the United
Kingdom and the availability of the Offer to JS Shareholders who are not
resident in the United Kingdom may be affected by the laws of relevant
jurisdictions. Therefore, any persons who are subject to the laws of any
jurisdiction other than the United Kingdom or JS Shareholders who are not
resident in the United Kingdom will need to inform themselves about, and
observe, any applicable requirements.
Unless otherwise determined by Warner Estate or required by the Takeover Code
and permitted by applicable law and regulation, the Offer is not being, and will
not be made, directly or indirectly, in or into or by use of the mails of, or by
any other means or instrumentality (including, without limitation, facsimile
transmission, telex, telephone, internet, or other forms of electronic
transmission) of inter-state or foreign commerce of, or any facility of a
national, state or other securities exchange of, the United States or any other
Restricted Jurisdiction, and will not be capable of acceptance by any such use,
means, instrumentality or facility or from within the United States, or any
other Restricted Jurisdiction. Accordingly, unless otherwise determined by
Warner Estate or required by the Takeover Code and permitted by applicable law
and regulation, copies of this Announcement are not being, and must not be,
directly or indirectly, mailed, transmitted or otherwise forwarded, distributed
or sent in, into or from the United States, or any other Restricted
Jurisdiction, and persons receiving this Announcement (including, without
limitation, custodians, nominees and trustees) must not mail, or otherwise,
forward, distribute or send it in, into or from such jurisdiction.
Any person (including without limitation, any custodian, nominee and trustee)
who would, or otherwise intends to, or may have a contractual or legal
obligation to, forward this Announcement, and/or the Offer Document, and/or any
other related document to any jurisdiction outside the United Kingdom should
inform themselves of, and observe, any applicable legal or regulatory
requirements of their jurisdiction.
The Loan Notes to be issued pursuant to the Loan Note Alternative have not been,
and will not be, listed on any stock exchange and have not been, and will not
be, registered under the US Securities Act or under the laws of any state,
district or other jurisdiction of the United States, nor have clearances been,
nor will they be, obtained from the securities commission or similar authority
of any province or territory of Canada and no prospectus has been, or will be,
filed, or registration made, under any securities law of any province or
territory of Canada, nor has a prospectus in relation to the Loan Notes been,
nor will one be, lodged with, or registered by, the Australian Securities and
Investments Commission, nor have any steps been taken, nor will any steps be
taken, to enable the Loan Notes to be offered in compliance with applicable
securities laws of Japan and no regulatory clearances in respect of the Loan
Notes have been, or will be, applied for in any other jurisdiction. Accordingly,
unless an exemption under relevant securities laws is available, the Loan Notes
are not being, and may not be, offered, sold, resold, delivered or distributed,
directly or indirectly, in, into or from the United States or any other Loan
Note Restricted Jurisdiction or to, or for the account or benefit of, any US
person or resident of any other Loan Note Restricted Jurisdiction. The Offer
does not constitute an offer of Loan Notes in the United States. Neither the US
Securities and Exchange Commission nor any US state securities commission has
approved or disapproved of the Loan Notes, or determined if this Announcement is
accurate or complete. Any representation to the contrary is a criminal offence.
Nothing in this Announcement is intended, or is to be construed, as a forecast,
projection or estimate of the future financial performance of either JS or
Warner Estate.
Cautionary statement regarding forward-looking statements
This Announcement, including information included or incorporated by reference
in this Announcement may contain forward-looking statements concerning Warner
Estate and JS. Generally the words "will", "may", "should", "continue",
"believes", "expects", "intends", "anticipates" or similar expressions identify
forward-looking statements. The forward-looking statements involve risks and
uncertainties that could cause actual results to differ materially from those
suggested by them. Many of these risks and uncertainties relate to factors that
are beyond the companies' abilities to control or estimate precisely, such as
future market conditions and the behaviours of other market participants, and
therefore undue reliance should not be placed on such statements which speak
only as at the date of this Announcement. Warner Estate and JS assume no
obligation and do not intend to update these forward-looking statements, except
as required pursuant to applicable law.
Dealing Disclosure Requirements
Under the provisions of Rule 8.3 of the Takeover Code, if any person is, or
becomes, 'interested' (directly or indirectly) in one per cent. or more of any
class of 'relevant securities' of JS, all 'dealings' in any 'relevant
securities' of JS (including by means of an option in respect of, or a
derivative referenced to, any such 'relevant securities') must be publicly
disclosed by no later than 3.30 pm (London time) on the London business day
following the date of the relevant transaction. This requirement will continue
until the date on which the Offer becomes, or is declared, unconditional as to
acceptance, lapses or is otherwise withdrawn or on which the 'offer period'
otherwise ends. If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire an 'interest' in 'relevant
securities' of JS they will be deemed to be a single person for the purpose of
Rule 8.3 of the Takeover Code.
Under the provisions of Rule 8.1 of the Takeover Code, all 'dealings' in
'relevant securities' of JS by Warner Estate or JS or by any of their respective
'associates' must be disclosed by no later than 12.00 noon (London time) on the
London business day following the date of the relevant transaction.
A disclosure table, giving details of the companies in whose 'relevant
securities' 'dealings' should be disclosed, and the number of such securities in
issue, can be found on the Panel's website at www.thetakeoverpanel.org.uk.
'Interests in securities' arise, in summary, when a person has long economic
exposure, whether conditional or absolute, to changes in the price of
securities. In particular, a person will be treated as having an 'interest' by
virtue of the ownership or control of securities, or by virtue of any option in
respect of, or derivative referenced to, securities.
Terms in quotation marks are defined in the Takeover Code, which can also be
found on the Panel's website. If you are in any doubt as to whether or not you
are required to disclose a 'dealing' under Rule 8 of the Takeover Code, you
should consult the Panel.
APPENDIX I
CONDITIONS AND FURTHER TERMS OF THE OFFER
The Offer, which will be made by Warner Estate, will comply with the applicable
rules and regulations of the Financial Services Authority, the London Stock
Exchange and the Takeover Code, will be governed by English law and will be
subject to the jurisdiction of the courts of England. In addition it will be
subject to the terms and conditions set out in the Offer Document and related
Form of Acceptance.
1. Conditions of the Offer
The Offer will be subject to the following conditions:
(a) valid acceptances being received (and not, where permitted,
withdrawn) by not later than 1.00 pm (London time) on the first closing date of
the Offer (or such later time(s) and/or date(s) as Warner Estate may, subject to
the rules of the Takeover Code or with the consent of the Panel, decide) in
respect of not less than 90 per cent. (or such lower percentage as Warner Estate
may decide) of the JS Shares to which the Offer relates, provided that this
condition will not be satisfied unless Warner Estate (together with its wholly
owned subsidiaries) shall have acquired or agreed to acquire (whether pursuant
to the Offer or otherwise) JS Shares carrying in aggregate more than 50 per
cent. of the voting rights then normally exercisable at a general meeting of JS,
including for this purpose (except to the extent otherwise agreed by the Panel)
any such voting rights attaching to JS Shares that are unconditionally allotted
or issued before the Offer becomes or is declared unconditional as to
acceptances whether pursuant to the exercise of any outstanding subscription or
conversion rights or otherwise.
For the purposes of this condition:
(i) JS Shares which have been unconditionally allotted shall
be deemed to carry the voting rights they will carry upon issue;
(ii) JS Shares that cease to be held in treasury are JS Shares
to which the Offer relates; and
(iii) the expression "JS Shares to which the Offer relates"
shall be construed in accordance with sections 428 to 430F of the Act;
(b) Admission of the Placing Shares having become effective;
(c) the passing at an Extraordinary General Meeting of Warner
Estate (or at any adjournment of the meeting) of the Ordinary Resolution;
(d) no government or governmental, quasi-governmental,
supranational, statutory, regulatory, environmental, administrative, fiscal or
investigative body, court, trade agency, association, institution or any other
body or person whatsoever in any jurisdiction (each a "Third Party") having
decided to take, institute, implement or threaten any action, proceeding, suit,
investigation, enquiry or reference, or having required any action to be taken
or otherwise having done anything or having enacted, made or proposed any
statute, regulation, decision, order or change to published practice and there
not continuing to be outstanding any statute, regulation, decision or order
which would or might:
(i) make the Offer, its implementation or the acquisition or
proposed acquisition of any shares or other securities in, or control of, JS by
any member of the Wider Warner Estate Group void, illegal and/or unenforceable
under the laws of any jurisdiction, or otherwise directly or indirectly
prohibit, or restrain, restrict, delay or otherwise interfere with the
implementation of, or impose additional conditions or obligations with respect
to, or otherwise challenge or require amendment of the Offer or the acquisition
of any such shares or securities by any member of the Wider Warner Estate Group;
(ii) require, prevent or delay the divestiture or alter the
terms envisaged for such divestiture by any member of the Wider Warner Estate
Group or by any member of the Wider JS Group of all or any part of its
businesses, assets or property or impose any limitation on the ability of any of
them to conduct their businesses (or any part thereof) or to own any of their
assets or properties (or any part thereof);
(iii) impose any limitation on, or result in a delay in, the
ability of any member of the Wider Warner Estate Group directly or indirectly to
acquire or hold or to exercise effectively all or any rights of ownership in
respect of JS Shares or (provided such limitation or delay is material) other
securities in JS or on the ability of any member of the Wider JS Group or any
member of the Wider Warner Estate Group directly or indirectly to hold or
exercise effectively any rights of ownership in respect of shares or other
securities (or the equivalent) in, or to exercise management control over JS or
(provided such limitation or delay is material) any other member of the Wider JS
Group;
(iv) require any member of the Wider Warner Estate Group to
acquire or offer to acquire any shares, other securities (or the equivalent) or
interest in any member of the Wider JS Group owned by any third party (other
than in the implementation of the Offer);
(v) require, prevent or materially delay a divestiture by any
member of the Wider Warner Estate Group of any shares or other securities (or
the equivalent) in JS.
(vi) result in any member of the Wider JS Group ceasing to be
able to carry on business under any name under which it presently carries on
business to an extent which is material in the context of the JS Group taken as
a whole;
(vii) impose any material limitation on the ability of any member
of the Wider Warner Estate Group or any member of the Wider JS Group to
integrate or co-ordinate all or any part of its business with all or any part of
the business of any other member of the Wider Warner Estate Group and/or the
Wider JS Group; or
(viii) except as fairly disclosed in writing by JS to Warner
Estate prior to 26 January 2007 otherwise affect the business, assets, profits
or prospects of any member of the Wider JS Group or any member of the Wider
Warner Estate Group in a manner which is adverse to and material in the context
of the JS Group taken as a whole or of the obligations of any members of the
Warner Estate Group taken as a whole in connection with the financing of the
Offer;
and all applicable waiting and other time periods during which any such Third
Party could decide to take, institute, implement or threaten any such action,
proceeding, suit, investigation, enquiry or reference or take any other step
under the laws of any jurisdiction in respect of the Offer or the acquisition or
proposed acquisition of any JS Shares or otherwise intervene having expired,
lapsed, or been terminated;
(e) no undertakings or assurances being sought from Warner Estate,
any member of the Wider Warner Estate Group or any member of the Wider JS Group
by the Secretary of State for Trade and Industry or any other third party,
except on terms satisfactory to Warner Estate;
(f) all necessary or appropriate notifications, filings or
applications having been made in connection with the Offer and all necessary
waiting periods (including any extensions thereof) under any applicable
legislation or regulation of any jurisdiction having expired, lapsed or been
terminated (as appropriate) and all statutory and regulatory obligations in any
jurisdiction having been complied with and all Authorisations necessary or
appropriate in any jurisdiction for or in respect of the Offer and the
acquisition or the proposed acquisition of any shares or other securities in, or
control of, JS by any member of the Wider Warner Estate Group having been
obtained in terms and in a form satisfactory to Warner Estate from all
appropriate Third Parties or (without prejudice to the generality of the
foregoing) from any person or bodies with whom any member of the Wider JS Group
or the Wider Warner Estate Group has entered into contractual arrangements and
all such Authorisations necessary or appropriate to carry on the business of any
member of the Wider JS Group in any relevant jurisdiction having been obtained
in each case where the direct consequence of a failure to make such notification
or filing or to wait for the expiry, lapse or termination of any such waiting
period or to comply with such obligation or obtain such Authorisation would have
a material adverse effect on the JS Group, any member of the Warner Estate Group
or the ability of Warner Estate to implement the Offer and all such
Authorisations remaining in full force and effect at the time at which the Offer
becomes otherwise unconditional and there being no notice or intimation of an
intention to revoke, suspend, restrict, modify or not to renew such
Authorisations;
(g) except as fairly disclosed in the Interim Results of JS there
being no provision of any arrangement, agreement, licence, permit, lease or
other instrument to which any member of the Wider JS Group is a party or by or
to which any such member or any of its assets is or may be bound or be subject
or any event or circumstance which, as a consequence of the Offer or the
acquisition or the proposed acquisition by any member of the Wider Warner Estate
Group of any shares or other securities in JS or because of a change in the
control or management of any member of the Wider JS Group or otherwise, could or
might reasonably be expected to result in, in each case to an extent which is
material in the context of the JS Group taken as a whole or to the obligations
of any member of the Warner Estate Group in connection with the financing of the
Offer:
(i) any monies borrowed by, or any other indebtedness,
actual or contingent, of any member of the Wider JS Group being or becoming
repayable, or capable of being declared repayable, immediately or prior to its
or their stated maturity date or repayment date, or the ability of any such
member to borrow monies or incur any indebtedness being withdrawn or inhibited
or being capable of becoming or being withdrawn or inhibited;
(ii) the rights, liabilities, obligations, interests or
business of any member of the Wider JS Group or any member of the Wider Warner
Estate Group under any such arrangement, agreement, licence, permit, lease or
instrument or the interests or business of any member of the Wider JS Group or
any member of the Wider Warner Estate Group in or with any other firm or company
or body or person (or any agreement or arrangement relating to any such business
or interests) being terminated or adversely modified or affected or any onerous
obligation or liability arising or any adverse action being taken thereunder;
(iii) any member of the Wider JS Group ceasing to be able to
carry on business under any name under which it presently carries on business ;
(iv) any assets or interests of, or any asset the use of which
is enjoyed by, any member of the Wider JS Group being or falling to be disposed
of or charged or any right arising under which any such asset or interest could
be required to be disposed of or charged or could cease to be available to any
member of the Wider JS Group otherwise than in the ordinary course of business;
(v) the creation or enforcement of any mortgage, charge or
other security interest over the whole or any part of the business, property or
assets of any member of the Wider JS Group;
(vi) the value of, or the financial or trading position or
prospects of, any member of the Wider JS Group being prejudiced or adversely
affected;
(vii) the creation of any liability (actual or contingent) by any
member of the Wider JS Group; or
(viii) save as disclosed to Warner Estate in writing by JS prior
to 26 January 2007, any liability of any member of the Wider JS Group to make
any severance, termination, bonus or other payment to any of its directors or
other officers;
(h) since 24 March 2006, and except as fairly disclosed in the
Interim Results of JS no member of the Wider JS Group having:
(i) issued or agreed to issue or authorised or proposed the
issue of additional shares of any class, or securities or securities convertible
into, or exchangeable for, or rights, warrants or options to subscribe for or
acquire, any such shares or convertible securities (save, where relevant, as
between JS and wholly-owned subsidiaries of JS);
(ii) recommended, declared, paid or made or proposed to
recommend, declare, pay or make any bonus, dividend or other distribution
(whether payable in cash or otherwise) other than to JS or one of its
wholly-owned subsidiaries;
(iii) save for transactions between JS and its wholly-owned
subsidiaries, merged with or demerged from or acquired any body corporate,
partnership or business or acquired or disposed of, or, other than in the
ordinary course of business, transferred, mortgaged or charged or created any
security interest over, any assets or any right, title or interest in any asset
(including shares and trade investments) or authorised, proposed or announced
any intention to do so;
(iv) save as between JS and its wholly-owned subsidiaries or
between such wholly-owned subsidiaries, made, authorised, proposed or announced
an intention to propose any change in its loan capital;
(v) issued, authorised or proposed the issue of any debentures
or (save in the ordinary course of business and save as between JS and its
wholly-owned subsidiaries or between such wholly-owned subsidiaries) incurred or
increased any indebtedness or become subject to any contingent liability to an
extent which is material in the context of the JS Group;
(vi) entered into or varied or authorised, proposed or
announced its intention to enter into or vary any contract, transaction,
arrangement or commitment (whether in respect of capital expenditure or
otherwise) which is of a long term, unusual or onerous nature, or which involves
or could involve an obligation of a nature or magnitude which is, in any such
case, material in the context of the JS Group or which is or is likely to be
restrictive on the business of any member of the Wider JS Group or the Wider
Warner Estate Group;
(vii) entered into or varied the terms of any service agreement
with any director or senior executive of the Wider JS Group;
(viii) proposed, agreed to provide or modified in any material
respect the terms of any share option scheme, incentive scheme, or other benefit
relating to the employment or termination of employment of any employee of the
Wider JS Group;
(ix) the trustees of the relevant pension scheme having, made
or agreed or consented to any significant change to the terms of the trust deeds
constituting the pension schemes established for its directors, employees or
their dependants or the benefits which accrue, or to the pensions which are
payable, thereunder, or to the basis on which qualification for, or accrual or
entitlement to, such benefits or pensions are calculated or determined or to the
basis on which the liabilities (including pensions) of such pension schemes are
funded or valued, or agreed or consented to any change to the trustees or
trustee directors, or carried out any act which may lead to the commencement of
the winding up of the scheme or which could give rise directly or indirectly to
a liability arising out of the operation of sections 38 to 56 inclusive of the
Pensions Act 2004 in relation to the scheme;
(x) implemented or effected, or authorised, proposed or
announced its intention to implement or effect, any composition, assignment,
reconstruction, amalgamation, commitment, scheme or other transaction or
arrangement (other than the Offer);
(xi) purchased, redeemed or repaid or announced any proposal to
purchase, redeem or repay any of its own shares or other securities or reduced
or, save in respect of the matters mentioned in sub-paragraph (i) above, made
any other change to any part of its share capital to an extent which (other than
in the case of JS) is material in the context of the JS Group;
(xii) waived or compromised any claim otherwise than in the
ordinary course of business;
(xiii) made any alteration to its memorandum or articles of
association or other incorporation documents;
(xiv) (other than in respect of a member which is dormant and was
solvent at the relevant time) taken or proposed any steps, corporate action or
had any legal proceedings instituted or threatened against it in relation to the
suspension of payments, a moratorium of any indebtedness, its winding-up
(voluntary or otherwise), dissolution, reorganisation or for the appointment of
any administrator, receiver, manager, administrative receiver, trustee or
similar officer of all or any of its assets or revenues or any analogous
proceedings in any jurisdiction or appointed any analogous person in any
jurisdiction or had any such person appointed;
(xv) been unable, or admitted in writing that it is unable, to
pay its debts or commenced negotiations with one or more of its creditors with a
view to rescheduling or restructuring any of its indebtedness, or having stopped
or suspended (or threatened to stop or suspend) payment of its debts generally
or ceased or threatened to cease carrying on all or a substantial part of its
business; or
(xvi) entered into any contract, commitment, agreement or
arrangement otherwise than in the ordinary course of business or passed any
resolution or made any offer (which remains open for acceptance) with respect to
or announced an intention to, or to propose to, effect any of the transactions,
matters or events referred to in this condition;
(i) since 24 March 2006, and except as fairly disclosed in the
Interim Results of JS:
(i) there having been no adverse change in the business,
assets, financial or trading position or profits or prospects or operational
performance of any member of the Wider JS Group;
(ii) no litigation, arbitration proceedings, prosecution or
other legal proceedings having been threatened, announced or instituted by or
against or remaining outstanding against any member of the Wider JS Group or to
which any member of the Wider JS Group is or may become a party (whether as
claimant or defendant or otherwise) and no enquiry or investigation by, or
complaint or reference to, any Third Party against or in respect of any member
of the Wider JS Group having been threatened, announced or instituted by or
against, or remaining outstanding in respect of, any member of the Wider JS
Group;
(iii) no contingent or other liability having arisen or become
known to Warner Estate which might be likely adversely to affect the business,
assets, financial or trading position or profits or prospects of any member of
the Wider JS Group; and
(iv) no steps having been taken and no omissions having been
made which are likely to result in the withdrawal, cancellation, termination or
modification of any licence held by any member of the Wider JS Group, which is
necessary for the proper carrying on of its business and the withdrawal,
cancellation, termination or modification of which is material and likely
adversely to affect the JS Group taken as a whole;
(j) since 24 March 2006, and except as fairly disclosed in the
Interim Results of JS, Warner Estate not having discovered:
(i) that any financial, business or other information
concerning the Wider JS Group publicly disclosed by the Wider JS Group or
disclosed to any member of the Wider Warner Estate Group at any time by or on
behalf of any member of the Wider JS Group is misleading, contains a
misrepresentation of fact or omits to state a fact necessary to make that
information not misleading and such information is material, or the inaccuracy
in such information would have a material effect, in the context of the JS
Group;
(ii) that any member of the Wider JS Group is subject to any
liability, contingent or otherwise, which is not disclosed in the Annual Report
and Accounts or Interim Results of JS, and which is material in the context of
the JS Group; or
(iii) any information which affects the import of any
information disclosed to Warner Estate at any time by or on behalf of any member
of the Wider JS Group;
(k) except as disclosed in writing to Warner Estate prior to 26
January 2007 Warner Estate not having discovered:
(i) that any past or present member of the Wider JS Group
has not complied with all applicable legislation or regulations of any
jurisdiction or any Authorisations relating to the storage, carriage, disposal,
discharge, spillage, leak or emission of any waste or hazardous substance or any
substance likely to impair the environment (including property) or harm human
health or otherwise relating to environmental matters or the health and safety
of humans, which non compliance would be likely to give rise to any material
liability including any penalty for non compliance (whether actual or
contingent) on the part of any member of the Wider JS Group; or
(ii) that there has been a disposal, discharge, spillage,
accumulation, leak, emission, release or the migration, production, supply,
treatment, storage, transport or use of any waste or hazardous substance or any
substance likely to impair the environment (including any property) or harm
human health which (whether or not giving rise to non compliance with any law or
regulation) would be likely to give rise to any material liability (whether
actual or contingent) on the part of any member of the Wider JS Group; or
(iii) that there is or is likely to be any liability (whether
actual or contingent) or requirement to make good, remediate, repair, re instate
or clean up any property or asset currently or previously owned, occupied or
made use of by any past or present member of the Wider JS Group (or on its
behalf), or in which any such member may have or previously have had or be
deemed to have had an interest, under any environmental legislation, common law,
regulation, notice, circular, Authorisation, other legally binding requirement
or order of any Third Party or to contribute to the cost thereof or associated
therewith or indemnify any person in relation thereto in any such case to an
extent which is material in the context of the JS Group; or
(iv) that circumstances exist (whether as a result of the
making of the Offer or otherwise):
(1) which would be likely to lead to any Third Party instituting; or
(2) whereby any member of the Wider Warner Estate Group or any present
or past member of the Wider JS Group would be likely to be required to
institute,
an environmental audit or take any other steps which would in any such case be
likely to result in any liability (whether actual or contingent) to improve,
modify existing or install new plant, machinery or equipment or carry out
changes in the processes currently carried out or make good, remediate, repair,
re instate or clean up any land or other asset currently or previously owned,
occupied or made use of by any past or present member of the Wider JS Group (or
on its behalf) or by any person for which a member of the Wider JS Group is or
has been responsible, or in which any such member may have or previously have
had or be deemed to have had an interest which is material in the context of the
JS Group; or
(v) that circumstances exist whereby a person or class of
persons would be likely to have any claim or claims in respect of any product or
process of manufacture or materials used therein currently or previously
manufactured, sold or carried out by any past or present member of the Wider JS
Group which claim or claims would be likely, materially and adversely, to affect
any member of the Wider JS Group and which is material in the context of the JS
Group.
Warner Estate reserves the right to waive in whole or in part all or any of
conditions (b) to (k) inclusive. Conditions (b) to (k) inclusive must be
satisfied as at, or waived (where possible) on or before, the 21st day after the
later of the first closing date of the Offer and the date on which condition (a)
is fulfilled (or, in each case, such later date as the Panel may agree). Warner
Estate shall be under no obligation to waive or determine to be, or treat as,
fulfilled, any of conditions (b) to (k) inclusive by a date earlier than the
date specified above for the fulfilment thereof notwithstanding that the other
conditions of the Offer may at such earlier date have been waived or fulfilled
and that there are at such earlier date no circumstances indicating that any of
such conditions may not be capable of fulfilment.
If Warner Estate is required by the Panel to make an offer for JS Shares under
the provisions of Rule 9 of the Takeover Code, Warner Estate may make such
alterations to the terms and conditions of the Offer as are necessary to comply
with the provisions of that Rule.
2. Further Terms of the Offer
The Offer will lapse if it is referred to the UK Competition Commission before
the later of 1.00 pm (London time) on the first closing date of the Offer and
the date on which the Offer becomes or is declared unconditional as to
acceptances. If the Offer so lapses, the Offer will cease to be capable of
further acceptance and persons accepting the Offer and Warner Estate will cease
to be bound by forms of acceptance submitted on or before the time when the
Offer lapses.
APPENDIX II
DETAILS OF IRREVOCABLE UNDERTAKINGS
1. Irrevocable Undertakings from JS Directors and certain persons
connected with the JS Directors
(a) Irrevocable undertakings to accept (or procure acceptance of the Offer) have
been given in respect of the following numbers of JS Shares which are legally
and/or beneficially owned by the JS Directors or certain persons connected to
the JS Directors:
Name Number of JS Shares % of JS issued share capital
Stephen Mulliner (see note 1) 705,892 4.34%
Anthony Roscoe (see note 2) 598,662 3.68%
Susan Weeks 637,450 3.91%
Simon Speirs (see note 3) 193,950 1.19%
Anthony Rutherford 69,931 0.43%
Kamla Gardner (see note 4)
15,821 0.10%
Total 2,221,706 13.64%
Notes:
1. Of the 705,892 JS Shares: (i) 158,200 are legally and beneficially
owned by Stephen Mulliner's wife, Sarah Mulliner, who has given an irrevocable
undertaking in respect of these JS Shares, (ii) 342,000 are held by Barclayshare
Nominees Limited and 203,692 are held by Giltspur Nominees Limited Buns Acct in
each case pursuant to Stephen Mulliner's self-invested pension plan and (iii)
2,000 are legally and beneficially owned by Stephen Mulliner. Stephen Mulliner
has given an irrevocable undertaking to accept the Offer in respect of the
shares legally and beneficially owned by him and has irrevocably undertaken to
use all reasonable endeavours to procure the acceptance of the Offer in respect
of the JS Shares held by Barclayshare Nominees Limited and Giltspur Nominees
Limited Buns Acct on his behalf.
2. Of the 598,662 JS Shares: (i) 35,000 JS Shares are held by Barclayshare
Nominees Limited pursuant to Anthony Roscoe's self-invested pension plan and
(ii) 563,662 are legally and beneficially owned by Anthony Roscoe. Anthony
Roscoe has given an irrevocable undertaking to accept the Offer in respect of
the JS Shares legally and beneficially owned by him and has irrevocably
undertaken to use all reasonable endeavours to procure the acceptance of the
Offer in respect of the JS Shares held by Barclayshare Nominees Limited on his
behalf.
3. The 193,950 JS Shares are held in the name of R C Greig Nominees
Limited on behalf of: (i) in respect of 2,000 JS Shares, Simon Speirs; (ii) in
respect of 184,200 JS Shares on behalf of Simon Speirs and Margaret Speirs; and
(iii) in respect of 7,750 JS Shares on behalf of Margaret Speirs.
4. Of the 15,821 JS Shares, 14,821 are legally and beneficially owned by
Kamla Gardner. Of the remaining 1,000 JS Shares: (i) 500 are held by Kamla
Gardner on behalf of Natasha Sahonte, and (ii) 500 are held by Kamla Gardner on
behalf of Ella Sahonte.
(b) The irrevocable undertakings referred to in paragraph 1(a) above will only
cease to be binding on the earlier of the following occurrences:
- the Offer Document is not posted within 28 days (or such longer period as the
Panel may agree) after the date of this Announcement; and
- the Offer closes, lapses or is withdrawn.
2. Irrevocable Undertakings from persons connected with or related to the James
Smith Family
The following persons connected with or related to the James Smith family have
irrevocably undertaken to accept the Offer in respect of, in aggregate,
2,249,180 JS Shares, representing approximately 13.8 per cent. of the issued
share capital of JS. These undertakings will cease to be binding in the
circumstances described in paragraph 1(b) above and if a Competing Offer is made
for JS at a price which exceeds the price under the terms of the Offer by more
than 10 per cent. unless Warner Estate increases or publicly announces a firm
intention to increase its Offer to an amount as is equal to or greater than the
price of the Competing Offer within 5 business days of the Competing Offer being
made:
Name Number of JS Shares % of JS issued share capital
JP Denmee 726,880 4.46%
PB Smith (see note 5) 1,000,000 6.14%
Colonel J Speirs (see note 6) 350,300 2.15%
Sheila Speirs 172,000 1.06%
Total 2,249,180 13.81%
Notes:
5. These JS Shares are held by Rene Nominees (IOM) Limited on behalf of PB
Smith, the beneficial owner.
6. These JS Shares are held by Giltspur Nominees Limited Buns Acct on
behalf of Colonel J Speirs, the beneficial owner.
3. Irrevocable Undertaking from Trefick Limited
Trefick Limited has irrevocably undertaken to accept the Offer in respect of
4,670,285 JS Shares, representing approximately 28.7 per cent. of the issued
share capital of JS. This undertaking will cease to be binding in the
circumstances described in paragraph 1(b) above and if a third party publishes
an announcement in accordance with Rule 2.9 of the Takeover Code, prior to the
date on which Trefick accepts the Offer, of a firm intention to make a takeover
offer as defined in section 428(1) of the Companies Act (which is not subject to
any pre-conditions) for JS (whether to be implemented by an offer or scheme of
arrangement or otherwise) at a price which exceeds the price under the terms of
the Offer by more than 10 per cent.
APPENDIX III
BASES AND SOURCES OF INFORMATION
(a) Unless otherwise stated, financial information relating to Warner Estate has
been extracted from Warner Estate's unaudited interim results for the six months
ended 30 September 2006 and Warner Estate's audited report and accounts for the
year ended 31 March 2006.
(b) Unless otherwise stated, financial information relating to JS has been
extracted from JS' unaudited interim results for the six months ended 24
September 2006, JS' audited report and accounts for the year ended 24 March 2006
and JS' audited report and accounts for the year ended 24 March 1998.
(c) The information relating to JS, other than the financial information, has
been provided by the JS Directors.
(d) The maximum value placed by the Offer on the entire issued ordinary share
capital of JS, and other statements made in this Announcement by reference to
the issued share capital of JS, are based upon 16,283,350 JS Shares being in
issue on 25 January 2007.
(e) The calculations in paragraph 15 by reference to the issued share capital of
Warner Estate, are based upon 53,502,508 Warner Estate Shares being in issue on
25 January 2007 and Trefick Limited and its associates holding, in aggregate,
7,356,223 Warner Estate Shares on 20 June 2006.
(f) The International Securities Identification Number for JS Shares is
GB0008178138.
APPENDIX IV
DEFINITIONS
The following definitions apply throughout this Announcement, unless the context
requires otherwise:
"Admission" both Admission to Listing and Admission to Trading and a
reference to Admission becoming "effective" is to be
construed in accordance with paragraph 3.2.7(G) of the
Listing Rules and paragraph 2.1 of the Standards (as
applicable)
"Admission to Admission to the Official List of the UKLA
Listing"
"Admission to Admission to trading on the London Stock Exchange
Trading"
"AIM" the market of that name which is operated by the London Stock
Exchange
"AIM Rules" the rules applicable to companies whose shares are traded on
AIM published by the London Stock Exchange as amended from
time to time
"Announcement" this document
"Authorisations" authorisations, orders, grants, recognitions, confirmations,
consents, licences, clearances, certificates, permissions or
approvals
"Bridgewell" Bridgewell Limited, financial adviser to Warner Estate
"Business Day" a day, not being a public holiday, Saturday or Sunday, on
which clearing banks in London are open for normal business
"Canada" Canada, its provinces and territories and all areas subject
to its jurisdiction and any political sub-division thereof
"certificated" or in relation to a share or other security, a share or other
"certificated security title to which is recorded in the relevant register
form" of the share or other security as being held in certificated
form (that is, not in CREST)
"Closing Price" the closing middle market quotation of a JS Share as derived
from the AIM appendix to the Daily Official List
"Companies Act" the Companies Act 1985, as amended
"Competing Offer" a general cash offer (which is not subject to any
pre-conditions) to acquire the entire issued and to be issued
share capital of JS (howsoever to be implemented) made or to
be made by a third party
"CREST" the relevant system (as defined in the CREST Regulations) in
respect of which CRESTCo is the Operator (as defined in the
CREST Regulations)
"CRESTCo" CRESTCo Limited
"CREST the Uncertificated Securities Regulations 2001 (SI 2001/
Regulations" 3755), as amended
"Daily Official the Daily Official List published by the London Stock
List" Exchange
"Extraordinary the extraordinary general meeting of Warner Estate to be
General Meeting" convened to approve the Ordinary Resolution
"Form of the Form of Acceptance, Authority and Election for use by JS
Acceptance" Shareholders which will accompany the Offer Document
"Interim Results" the interim results of JS for the six months ended 24
September 2006
"Japan" Japan, its possessions and territories and all areas subject
to its jurisdiction and any political sub-division thereof
"JS" JS Real Estate Plc
"JS Board" the board of directors of JS
"JS Director" a director of JS
"JS Group" JS and its subsidiary undertakings and where the context
permits, each of them
"JS Share(s)" the existing unconditionally allotted or issued and fully
paid ordinary shares of 25 pence each in the capital of JS
and any further shares which are unconditionally allotted or
issued before the date on which the Offer closes (or such
earlier date or dates, not being earlier than the date on
which the Offer becomes unconditional as to acceptances or,
if later, the first closing date of the Offer, as Warner
Estate may decide) but excluding in both cases any such
shares held or which become held in treasury
"JS Shareholders" holders of JS Shares
"LIBOR" the rate per annum which is the offered rate for three month
sterling deposits of #1 million on the relevant page of the
Telerate screen which displays British Bankers Association
interest settlement rates for deposits in sterling or, if no
such rate is available, the rate per annum which is the
arithmetic mean (rounded down, if necessary, to four decimal
places) of the respective rates appearing on the "LIBP" page
of the Reuters Monitor Money Rate Service screen for three
month sterling deposits of #1 million at or about 11.00 a.m.
on the first business day of the relevant Interest Period. If
a rate of interest cannot for whatever reason be established
for an Interest Period in accordance with the foregoing
provisions of this sub-paragraph, the rate of interest on the
Loan Notes for such Interest Period shall be calculated by
reference to such rate as Warner Estate shall determine on
the basis of quotations made for three month sterling
deposits of #1 million in such inter-bank market or markets
as Warner Estate may select on the first business day of the
relevant Interest Period
"Listing Rules" the listing rules made by the FSA under section 73A of the
Financial Services and Markets Act 2000
"Loan Note the alternative under the Offer whereby JS Shareholders
Alternative" (other than US Persons and other shareholders in Restricted
Jurisdictions) who validly accept the Offer may elect to
receive Loan Notes instead of all or part of the cash
consideration to which they would otherwise have been
entitled under the Offer
"Loan Notes" the variable rate unsecured loan notes 2012 of Warner Estate
to be issued pursuant to the Loan Note Alternative
"Loan Note any jurisdiction in which an offer of Loan Notes would
Restricted constitute a violation of relevant laws or require
Jurisdiction" registration of the Loan Notes
"London Stock London Stock Exchange plc or its successor
Exchange"
"LSE Closing the closing middle market quotation of a JS Share as derived
Price" from the website of the London Stock Exchange after 5.00 pm
London time
"Offer" the recommended cash offer to be made by Warner Estate to
acquire all the JS Shares on the terms and subject to the
conditions to be set out in the Offer Document and the Form
of Acceptance including, where the context so permits, the
Loan Note Alternative and, where the context so requires, any
subsequent revision, variation, renewal or extension of such
offer and includes any election available in connection with
it
"Offer Document" the formal offer document to be sent to JS Shareholders
setting out the terms and conditions of the Offer
"Offer Value" the aggregate cash value of the total consideration payable
by Warner Estate to JS Shareholders pursuant to the terms of
the Offer
"Ordinary the ordinary resolution to be proposed at the Extraordinary
Resolution" General Meeting in accordance with the requirements of the
Listing Rules to approve the related party transaction
between Warner Estate and Trefick Limited as referred to in
paragraph 15 of this Announcement
"Oriel Securities" Oriel Securities Limited, financial adviser to JS
"Panel" the Panel on Takeovers and Mergers
"REIT" real estate investment trust
"relevant as the context requires, Warner Estate Shares and JS Shares,
securities" other JS share capital and any securities convertible into,
or exchangeable for, and rights to subscribe for, any of the
foregoing
"Restricted any jurisdiction where local laws or regulations may result
Jurisdiction" in a significant risk of civil, regulatory or criminal
exposure or prosecution if information concerning the Offer
is sent or made available to JS Shareholders in that
jurisdiction
"Standards" admission and disclosure standards made by the London Stock
Exchange from time to time
"subsidiary", shall be construed in accordance with the Companies Act (but
"subsidiary for this purpose ignoring paragraph 20(1)(b) of Schedule 4A
undertaking", of the Companies Act)
"associated
undertaking" or
"undertaking"
"Takeover Code" The City Code on Takeovers and Mergers
"UKLA" the Financial Services Authority acting in its capacity as
the competent authority for the purposes of Part VI of the
Financial Services and Markets Act 2000
"uncertificated" a share or other security title to which is recorded in the
or "in relevant register of the share or security as being held in
uncertificated uncertificated form, in CREST, and title to which, by virtue
form" of the CREST Regulations may be transferred by means of CREST
"United Kingdom" the United Kingdom of Great Britain and Northern Ireland and
or the "UK" its dependent territories
"United States" the United States of America, its possessions and
territories, all areas subject to its jurisdiction or any
sub-division thereof, any state of the United States of
America and the District of Columbia
"US Person" a US person as defined in Regulation S under the US
Securities Act
"US Securities the US Securities Act of 1933, as amended and the rules and
Act" regulations promulgated thereunder
"Warner Estate" Warner Estate Holdings PLC
"Warner Estate the board of directors of Warner Estate
Board"
"Warner Estate a director of Warner Estate
Director"
"Warner Estate Warner Estate and its subsidiary undertakings and where the
Group" context permits, each of them
"Warner Estate the existing Warner Estate ordinary shares of 5p each in the
Shares" capital of Warner Estate
"Warner Estate holders of Warner Estate Shares
Shareholders"
"Wider JS Group" JS and associated undertakings and any other body corporate,
partnership, joint venture or person in which JS and such
undertakings (aggregating their interests) have an interest
of more than 20 per cent. of the voting or equity capital or
the equivalent
"Wider Warner Warner Estate Group and associated undertakings and any other
Estate Group" body corporate, partnership, joint venture or person in which
Warner Estate and such undertakings (aggregating their
interests) have an interest of more than 20 per cent. of the
voting or equity capital or the equivalent
All times referred to are London time unless otherwise stated.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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