TIDMMNZS TIDMDX.
RNS Number : 0889H
Menzies(John) PLC
05 June 2017
NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF
AMERICA, AUSTRALIA, CANADA, JAPAN OR SOUTH AFRICA OR ANY OTHER
JURISDICTION WHERE IT IS UNLAWFUL TO DISTRIBUTE THIS
ANNOUNCEMENT
The information contained in this announcement is inside
information for the purposes of article 7 of Regulation
596/2014.
5 June 2017
Update on the proposed combination of DX and John Menzies'
Distribution division
Further to the announcement made on 31 March 2017 by DX (Group)
plc ("DX") and John Menzies plc ("John Menzies") regarding the
potential combination of DX and John Menzies' Distribution division
("Menzies Distribution" and together with DX the "Enlarged Group")
(the "Transaction"), the boards of DX and John Menzies today
announce agreed revised terms of the Transaction.
The boards of DX and John Menzies continue to believe that the
combination has strong strategic logic for all stakeholders and
that the Transaction, on the agreed revised terms, represents an
opportunity to deliver significant value to both companies'
shareholders. The boards of DX and John Menzies believe that the
combination would benefit the customers of DX and Menzies
Distribution through the creation of a logistics and parcel carrier
of enhanced scale and capability operating through a 24 hour
logistics network across the UK and Ireland. Based on a joint
assessment, the boards of DX and John Menzies estimate that the
combination would generate cost synergies of around GBP10 million
per annum.
Under the revised terms of the Transaction, it is envisaged that
DX would acquire Menzies Distribution for consideration, on a cash
and debt free basis, comprising GBP40 million in cash and the issue
of new DX ordinary shares (the "New DX Shares") representing 65% of
DX's issued share capital as enlarged by the Transaction. The cash
consideration would be satisfied by new borrowings by the Enlarged
Group.
On this basis, on completion of the Transaction, current DX
shareholders would therefore own, in aggregate, 35% of DX's
enlarged issued share capital. It is intended that the New DX
Shares would be issued by DX to John Menzies' shareholders pro rata
to their holdings of shares in John Menzies at the relevant date
such that John Menzies shareholders would own, in aggregate, 60% of
DX's enlarged issued share capital and 5% of DX's enlarged issued
share capital would be owned directly by John Menzies' pension
scheme as retained by John Menzies.
As previously announced, it is proposed that approximately 17%
of John Menzies' defined benefit pension scheme would transfer to
the Enlarged Group as part of the Transaction. The receipt by John
Menzies' pension scheme, as retained by John Menzies, of 5% of DX's
enlarged issued share capital is part of the transfer arrangements
agreed with the John Menzies pension trustees.
In addition, the boards of DX and John Menzies recognise the
importance of a dividend to shareholders of the Enlarged Group. It
is intended that the Enlarged Group will reinstate the payment of a
regular dividend on completion of the Transaction, taking into
account the leverage, earnings growth and investment requirements
of the business.
Alongside the Transaction, John Menzies intends to raise gross
proceeds of approximately GBP30 million by way of a conditional
cash placing of new John Menzies shares primarily to institutional
investors, the proceeds of which would be retained by John Menzies
post completion of the Transaction.
The boards of DX and John Menzies believe the proposed
Transaction structure enables both DX and John Menzies shareholders
to share in the significant potential value created by the
combination of DX and Menzies Distribution, whilst increasing
substantially the liquidity of DX's ordinary shares and enabling
the divestment of Menzies Distribution into a separately quoted
company in line with John Menzies' strategy. The boards of DX and
John Menzies believe respectively that the Transaction would create
strategically focussed companies, each of which would have a strong
balance sheet and the financial resources to invest in the future
of their respective businesses for the benefit of each company's
stakeholders.
In light of the revised terms, GCM Partners II, L.P., acting by
its investment manager Gatemore Capital Management LLP
("Gatemore"), which is the beneficial owner of 21.3% of DX's issued
share capital, has entered into an irrevocable undertaking with DX,
dated 4 June 2017, to vote in favour of the resolutions
implementing the Transaction at the general meeting of DX
shareholders to be held to approve the Transaction in due
course.
The Transaction would be subject, inter alia, to the approvals
of both DX and John Menzies shareholders at respective general
meetings.
The boards of DX and John Menzies continue to anticipate the
Transaction will be completed during the summer of 2017.
Discussions are ongoing and there can be no certainty that a
transaction will occur.
Bob Holt, Chairman of DX, and Dermot Smurfit, Chairman of John
Menzies, said:
"We are pleased to have reached this agreement and believe that
the revised terms of the proposed transaction represent an
attractive opportunity for all stakeholders of both companies."
A further announcement will be made when appropriate.
Contacts:
DX (Group) plc
Bob Holt, Chairman M: 07778 798816
Zeus Capital (Financial Adviser T: 020 3829
and Nominated Adviser to DX) 5000
Nick How, Giles Balleny (Corporate
Finance)
Dominic King (Corporate Broking)
KTZ Communications T: 020 3178
6378
Katie Tzouliadis
Emma Pearson
John Menzies plc T: 0131 459
8018
Giles Wilson, Chief Financial Officer
John Geddes, Group Company Secretary
& Corporate Affairs Director
Rothschild (Financial Adviser to T: 020 7280
John Menzies) 5000
Neil Thwaites
Sabina Pennings
Numis Securities (Joint Broker to T: 020 7260
John Menzies) 1000
Christopher Wilkinson
Michael Burke
Shore Capital (Joint Broker to John T: 020 7408
Menzies) 4090
Bidhi Bhoma
FTI Consulting T: 020 3727
1000
Jonathon Brill
Alex Beagley
Important notice
N M Rothschild & Sons Limited ("Rothschild"), which is
authorised and regulated by the Financial Conduct Authority ("FCA")
in the United Kingdom, is acting as sponsor and financial adviser
to John Menzies in connection with the Transaction referred to in
this announcement. Rothschild is acting exclusively for John
Menzies and no one else in connection with the Transaction and save
for any responsibilities and liabilities, if any, which may be
imposed on Rothschild, in its capacity as sponsor by the Financial
Services and Markets Act 2000, as amended, Rothschild will not be
responsible to anyone other than John Menzies for providing the
protections afforded to clients of Rothschild or for providing
advice in relation to the Transaction or the contents of this
announcement or any transaction, arrangement or matter referred to
herein.
Zeus Capital Limited ("Zeus Capital"), which is authorised and
regulated by the FCA in the United Kingdom is acting as nominated
adviser and financial adviser to DX in connection with the
Transaction referred to in this announcement. Zeus Capital is
acting exclusively for DX and no one else in connection with the
Transaction and will not be responsible to anyone other than DX for
providing the protections afforded to clients of Zeus Capital or
for providing advice in relation to the Transaction or the contents
of this announcement or any transaction, arrangement or matter
referred to herein.
Numis Securities Limited ("Numis") is authorised and regulated
by the FCA in the United Kingdom, is acting solely for John Menzies
and nobody else in relation to the Transaction and will not be
responsible to anyone other than John Menzies for providing the
protections afforded to its clients nor for providing advice in
relation to the Transaction or any other matter referred to in
this.
Shore Capital Stockbrokers Limited ("Shore Capital") which is
authorised and regulated by the FCA in the United Kingdom, is
acting as corporate broker to John Menzies and no one else in
connection with the Transaction referred to in this announcement
and will not be responsible to anyone other than John Menzies for
providing the protections afforded to clients of Shore Capital or
for providing advice in relation to the Transaction or the contents
of this announcement or any transaction, arrangement or matter
referred to herein.
This announcement has been issued by and is the responsibility
of DX and John Menzies.
This announcement is not intended to, and does not, constitute
or form part of any offer, invitation or the solicitation of an
offer to purchase, otherwise acquire, subscribe for, sell or
otherwise dispose of, any securities pursuant to this announcement
or otherwise. The distribution of this announcement in
jurisdictions outside the United Kingdom may be restricted by law
and therefore persons into whose possession this announcement comes
should inform themselves about, and observe such restrictions. Any
failure to comply with the restrictions may constitute a violation
of the securities law of any such jurisdiction.
This announcement does not constitute an offer of securities for
sale in the United States or an offer to acquire or exchange
securities in the United States. No offer to acquire securities or
to exchange securities for other securities has been made, or will
be made, and no offer of securities has been made, or will be made,
directly or indirectly, in or into, or by use of the mails, any
means or instrumentality of interstate or foreign commerce or any
facilities of a national securities exchange of, the United States
of America or any other country in which such offer may not be made
other than (i) in accordance with the requirements under the US
Securities Exchange Act of 1934, as amended, a registration
statement under the US Securities Act of 1933, as amended, or the
securities laws of such other country, as the case may be, or (ii)
pursuant to an available exemption therefrom. This announcement has
been prepared for the purposes of complying with the applicable law
and regulation of the United Kingdom (including the Listing Rules
and the Disclosure and Transparency Rules) and the information
disclosed may not be the same as that which would have been
disclosed if this announcement had been prepared in accordance with
the laws and regulations of any jurisdiction outside of the United
Kingdom.
CAUTIONARY NOTE REGARDING FORWARD LOOKING INFORMATION
This announcement may include statements that are, or may be
deemed to be, "forward looking statements". These forward looking
statements may be identified by the use of forward looking
terminology, including the terms "believes", "estimates", "plans",
"projects", "anticipates", "expects", "intends", "may", "will" or
"should" or, in each case, their negative or other variations or
comparable terminology, or by discussions of strategy, plans,
objectives, goals, future events or intentions. These forward
looking statements include all matters that are not historical
facts and involve predictions. Forward looking statements may and
often do differ materially from actual results. Any forward looking
statements reflect John Menzies' and DX's current view with respect
to future events and are subject to risks relating to future events
and other risks, uncertainties and assumptions relating to John
Menzies' or DX's results of operations, financial position,
liquidity, prospects, growth or strategies and the industry in
which John Menzies and DX operate. Forward looking statements speak
only as of the date they are made and cannot be relied upon as a
guide to future performance. Save as required by law or regulation,
John Menzies and DX disclaim any obligation or undertaking to
release publicly any updates or revisions to any forward looking
statements in this announcement that may occur due to any change in
its expectations or to reflect events or circumstances after the
date of this announcement. Nothing in this announcement is
intended, or is to be construed, as a profit forecast or to be
interpreted to mean that earnings per John Menzies share for the
current or future financial years, or those of the Enlarged Group,
will necessarily match or exceed the historical published earnings
per share. Certain figures contained in this announcement have been
subject to rounding adjustments. Accordingly, in certain instances,
the sum or percentage change of the numbers contained in this
announcement may not conform exactly with the total figure
given.
Neither the content of John Menzies' nor DX's website, nor any
website accessible by hyperlinks on John Menzies' or DX's website
is incorporated in, or forms part of, this announcement.
This information is provided by RNS
The company news service from the London Stock Exchange
END
UPDGMGGVMDDGNZZ
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