TIDMSVT TIDMDVW TIDMDVWA
RNS Number : 9201Q
Severn Trent PLC
05 December 2016
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE UNITED STATES OR
ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION
OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION.
FOR IMMEDIATE RELEASE
5 DECEMBER 2016
RECOMMED ACQUISITION
of
DEE VALLEY GROUP PLC
by
SEVERN TRENT WATER LIMITED
Publication and posting of Acquisition Document
Severn Trent notes the announcement by Dee Valley that it has
posted to the Dee Valley Ordinary Shareholders a document
containing, amongst other things, the full terms and conditions of
the Scheme and the Contractual Offer, an explanatory statement,
together with the recommended actions to be taken by Dee Valley
Ordinary Shareholders in relation to the Acquisition by Severn
Trent (the "Severn Trent Acquisition Document"). The Severn Trent
Acquisition Document will also available be on the Severn Trent Plc
website at https://www.severntrent.com shortly.
The Severn Trent Acquisition Document contains a unanimous
recommendation from the Dee Valley Board that:
- all Voting Ordinary Shareholders vote in favour of Severn
Trent's Scheme; and
- all Non-Voting Ordinary Shareholders accept the Severn Trent
Contractual Offer.
If Dee Valley Ordinary Shareholders would like to receive the
significantly higher consideration offered by Severn Trent than
that offered by Ancala they should continue to take no action in
respect of the Ancala Revised Proposal nor should they sell their
shares to Ancala.
All Dee Valley Voting Ordinary Shareholders are strongly urged
to vote in favour of Severn Trent's Scheme and all Dee Valley
Non-Voting Ordinary Shareholders are strongly urged to accept the
Severn Trent Contractual Offer for their shares by completing,
signing and returning (once received) the Forms of Proxy and Form
of Acceptance as applicable as soon as possible.
Background
On 23 November 2016 Severn Trent made a revised proposal to
acquire all of the issued Dee Valley Ordinary Shares which the Dee
Valley Board has recommended.
Under the terms of the Acquisition, the holders of Dee Valley
Voting Ordinary Shares will receive 1,825 pence in cash for each
Dee Valley Voting Ordinary Share held and the holders of Dee Valley
Non-Voting Ordinary Shares will receive 1,713 pence in cash for
each Dee Valley Non-Voting Ordinary Share held.
Severn Trent's offer is significantly higher than Ancala's offer
of 1,706 pence for each Dee Valley Voting Ordinary Share and 1,602
pence for each Dee Valley Non-Voting Ordinary Share.
The Severn Trent Acquisition Document also contains details of
the Loan Note Alternative available pursuant to the Acquisition.
Severn Trent's intention in introducing the Loan Note Alternative
is that UK tax resident shareholders who would otherwise trigger
for UK tax purposes a capital gain if they accepted cash pursuant
to the Acquisition will instead be able to elect to receive Loan
Notes in which case a capital gain would not be realised for tax
purposes on the disposal of their Ordinary Shares. The Loan Notes
will be unlisted and non-transferable and will bear interest (from
the date of issue to the relevant holder of Loan Notes) payable six
months in arrears at the rate of 0.85% and unless previously
redeemed or repurchased, will be repaid at par on 1 July 2022. Full
details of the Loan Note Alternative are contained in the Severn
Trent Acquisition Document.
Future Plans for Dee Valley
Severn Trent will be a supportive long term owner of Dee Valley
as the local water business for its area and will bring its
expertise and considerable financial strength to support the
business, its customers, employees and pensioners. Severn Trent's
investment grade debt rating will provide a solid foundation for
the business.
Severn Trent intends to maintain the Welsh identity, heritage
and local focus of Dee Valley. Subject to regulatory approvals,
Severn Trent intends to maintain a separate Welsh licence for Dee
Valley and that the whole of its business in Wales will be
regulated under Welsh Government Policy. Severn Trent will also
extend its existing community programme to the Dee Valley water
area.
Since the start of AMP6, Severn Trent's management has
demonstrated its ability to drive performance by placing customers
at the heart of Severn Trent's decision making process, applying an
innovative approach to totex, leveraging its procurement expertise
and maintaining an intense focus on all areas which impact
customers. Severn Trent is delivering significant totex
efficiencies and ODI rewards, despite the challenging targets set
by Ofwat.
Severn Trent intends to deliver Dee Valley's strategy of
providing the highest level of customer service and value for money
by applying where appropriate its industry leading operating
procedures, environmental policies and strong customer service
skills to the operations of Dee Valley for the benefit of Dee
Valley's customers.
Severn Trent believes that the Acquisition would provide a
successful outcome for customers of Dee Valley and plans to build
on Dee Valley's great customer service by applying an improved
proposition for Dee Valley's customers. This will include enhancing
the customer service offering by extending support and, in due
course, service hours, and through the application of Severn
Trent's digital philosophy.
Employees and locations
Severn Trent attaches great importance to the skills,
operational experience and technical expertise of the employees of
Dee Valley.
Following implementation of the Acquisition, the existing
contractual and statutory employment rights, including in relation
to pensions, of all Dee Valley Group employees will be honoured.
This includes honouring the commitments under the 2016/17 Dee
Valley Water staff bonus scheme. Severn Trent pays the Living Wage
to all employees who are not at the training grade and will of
course honour Dee Valley's Living Wage policy. Severn Trent very
much believes in creating a winning culture that incentivises
employees to deliver the best outcome for customers.
Severn Trent intends to retain all Dee Valley employees engaged
in front line field force operations and will continue to operate
these out of Dee Valley's current locations in Wrexham and Chester.
Employees engaged in front line field force operations comprise a
majority of Dee Valley's employees and include those front line
activities within operations, operational control, maintenance and
construction of the network and treatment works.
Severn Trent intends to integrate Dee Valley employees with
engineering, asset management and programme management roles into
Severn Trent's wider teams. Severn Trent will discuss with local
employees how best to do this so that they can operate across the
Severn Trent group, which could involve some changes in
location.
Severn Trent is committed to keeping customers at the heart of
our business and we will work with the Dee Valley customer contact
centre operations team to ensure that the local customer focus,
skills and expertise of Dee Valley staff are preserved where
possible, while taking advantage of the capabilities of the
combined group.
Severn Trent will perform a review of how best to integrate the
managerial, administrative and support services of Dee Valley into
the Severn Trent Group in order to achieve the expected benefits of
the Acquisition. Severn Trent believes that there will be some
element of duplication of some managerial, administrative and
support services which will involve headcount reductions and/or
changes in location in Dee Valley's operations going forward.
Severn Trent will also give Dee Valley employees the option of
applying for any vacant roles or career opportunities across the
wider Severn Trent Group, including at its nearby Shrewsbury
office, where several vacancies currently exist.
Severn Trent also plans to invest in skills and will extend its
leading skills programmes across the Dee Valley Group which include
its recognised graduate programme and award winning apprentice
schemes. Severn Trent will roll out its industry leading Health,
Safety and Wellbeing approach to the Dee Valley business.
Severn Trent is committed to engaging with all Dee Valley
employees and stakeholders through the process and will work
constructively with union representatives in line with our past
track record.
Unless otherwise stated, capitalised terms used in this
announcement have the same meaning as those in the Severn Trent
Acquisition Document.
Enquiries:
Severn Trent
Ruban Chandran +44 (0)79 5716 6615
Richard Tunnicliffe +44 (0)78 3441 9722
Rothschild - Financial Adviser to Severn Trent
Mark Warham +44 (0)20 7280 5000
Barclays - Corporate broker to Severn Trent
Alisdair Gayne +44 (0)20 7623 2323
Morgan Stanley - Corporate broker to Severn Trent
Paul Baker +44 (0)20 7425 8000
Tulchan Communications - Financial communications adviser to
Severn Trent
Andrew Grant +44 (0)20 7353 4200
Jonathan Sibun
Further information
This announcement is not intended to and does not constitute, or
form part of, any offer to sell or subscribe for or an invitation
to purchase or subscribe for any securities or the solicitation of
any vote or approval in any jurisdiction pursuant to the
Acquisition or otherwise, nor shall there be any sale, issuance or
transfer of securities of Dee Valley in any jurisdiction in
contravention of applicable law. This announcement does not
constitute a prospectus or a prospectus equivalent document.
Any vote in respect of the Acquisition should only be made on
the basis of the information contained in the scheme circular
relating to the Scheme, which contains the full terms and
conditions of the Acquisition and the Scheme (including details of
how to vote) and the Contractual Offer (including how to accept the
Contractual Offer). Ordinary Shareholders are advised to read the
formal documentation in relation to the Acquisition carefully.
Please be aware that addresses, electronic addresses and certain
other information provided by Ordinary Shareholders, persons with
information rights and other relevant persons in connection with
the receipt of communications from Dee Valley may be provided to
Severn Trent during the offer period as required under Section 4 of
Appendix 4 of the Code.
N. M. Rothschild & Sons Limited, which is authorised and
regulated by the FCA in the United Kingdom, is acting exclusively
for Severn Trent and no one else in connection with the Acquisition
and will not be responsible to anyone other than Severn Trent for
providing the protections afforded to its clients or for providing
advice in relation to the Acquisition or any other matters referred
to in this announcement.
Barclays Bank PLC, acting through its Investment Bank, which is
authorised by the Prudential Regulation Authority and regulated in
the United Kingdom by the FCA and the Prudential Regulation
Authority, is acting exclusively for Severn Trent and no one else
in connection with the matters referred to in this announcement and
will not be responsible to anyone other than Severn Trent for
providing the protections afforded to clients of Barclays nor for
providing advice in relation to the matters referred to in this
announcement.
Morgan Stanley & Co. International plc, which is authorised
by the Prudential Regulation Authority and regulated by the
Financial Conduct Authority and the Prudential Regulation Authority
in the United Kingdom, is acting exclusively for Severn Trent and
no--one else in connection with the Acquisition. In connection with
such matters, Morgan Stanley & Co. International plc, its
affiliates and their respective directors, officers, employees and
agents will not regard any other person as their client, nor will
they be responsible to any other person for providing the
protections afforded to their clients or for providing advice in
relation to the Acquisition, the contents of this announcement or
any other matter referred to herein.
Overseas jurisdictions
The release, publication or distribution of this announcement in
or into, jurisdictions other than the United Kingdom may be
restricted by law and therefore persons into whose possession this
announcement comes who are not resident in the United Kingdom
should inform themselves about, and observe, any applicable
restrictions. Ordinary Shareholders who are in any doubt regarding
such matters should consult an appropriate independent adviser in
the relevant jurisdiction without delay. Any failure to comply with
such restrictions may constitute a violation of the securities laws
of any such jurisdiction. To the fullest extent permitted by
applicable law, the companies and persons involved in the
Acquisition disclaim any responsibility or liability for the
violation of such restrictions by any person.
The Contractual Offer is not being made, directly or indirectly,
in or into, or by the use of the mails or any means or
instrumentality (including, without limitation telephonically or
electronically) of interstate or foreign commerce of, or any
facilities of a national securities exchange of, the United States
or any other Restricted Jurisdictions, and the Contractual Offer
should not be accepted by any such use, means, instrumentality or
facility or from such jurisdictions. Copies of this document and
any related offering documents are not being, and may not be,
mailed or otherwise distributed in, into or from, whether by use of
the mails, or by any means or instrumentality (including, without
limitation, telephonically or electronically) of interstate or
foreign commerce, or any facility of a national securities exchange
of, the United States or any other Restricted Jurisdictions.
Persons receiving such documents (including, without limitation,
custodians, nominees and trustees) must not distribute or send them
into or from such jurisdictions or use such mails or any such
means, instrumentality or facility for any purpose directly or
indirectly in connection with this Contractual Offer and doing so
will render invalid any relevant purported acceptance of the
Contractual Offer.
This announcement has been prepared for the purposes of
complying with English law and the Code 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 of jurisdictions outside the United Kingdom.
Additional information for US investors in Dee Valley
These materials are not for distribution, directly or
indirectly, in or into the United States (including its territories
and possessions, any State of the United States and the District of
Columbia). These materials do not constitute or form a part of any
offer or solicitation to purchase or subscribe for securities in
the United States.
Dee Valley and Severn Trent are each organised under the laws of
England. All of the officers and directors of Dee Valley and Severn
Trent are residents of countries other than the United States. It
may not be possible to sue Dee Valley, Severn Trent or their
respective officers or directors in a non-US court for violations
of US securities laws. It may be difficult to compel Dee Valley,
Severn Trent and their respective affiliates to subject themselves
to the jurisdiction and judgment of a US court.
The Scheme
Ordinary Shareholders in the United States should note that the
Acquisition relates to the shares of an English company and, in
respect of the Voting Ordinary Shares, is proposed to be made by
means of a scheme of arrangement provided for under, and governed
by, English law. Neither the proxy solicitation nor the tender
offer rules under the US Securities Exchange Act of 1934, as
amended, will apply to the Scheme. Moreover the Scheme will be
subject to the disclosure requirements, rules and practices
applicable in the UK to schemes of arrangement, which differ from
the disclosure requirements of the US proxy solicitation rules and
tender offer rules. Financial information included in this
announcement and the scheme circular has been or will be prepared
in accordance with, where relevant International Financial
Reporting Standards as adopted by the European Union and/or
accounting standards applicable in the UK and may not be comparable
to financial information of US companies or companies whose
financial statements are prepared in accordance with generally
accepted accounting principles in the United States.
The Contractual Offer
The Contractual Offer in respect of Non-Voting Ordinary Shares
relates to the shares of an English company and will be governed by
English law on the implementation of such an offer. The Contractual
Offer is not intended to be made pursuant to the provisions of any
other legal system. Shareholders should note that the Contractual
Offer is subject to English disclosure rules, which are different
from those in the United States. The Contractual Offer will not be
made to any Ordinary Shareholders in Restricted Jurisdictions.
Note regarding Loan Notes
The Loan Notes to be issued pursuant to the Acquisition have not
been and will not be registered under the US Securities Act of
1933, as amended, or under the relevant securities laws of any
state or territory or other jurisdiction of the United States or
the relevant securities laws of Japan and the relevant clearances
have not been, and will not be, obtained from the securities
commission of any province of Canada. No prospectus in relation to
the Loan Notes has been, or will be, lodged with, or registered by,
the Australian Securities and Investments Commission. Accordingly,
the Loan Notes are not being, and may not be, offered, sold,
resold, delivered or distributed, directly or indirectly in or into
the United States, Canada, Australia or Japan or any other
jurisdiction if to do so would constitute a violation of relevant
laws of, or require registration thereof in, such jurisdiction
(except pursuant to an exemption, if available, from any applicable
registration requirements or otherwise in compliance with all
applicable laws). US shareholders of Dee Valley will only receive
cash consideration in connection with the Acquisition and may not
elect to receive any Loan Notes.
Disclosure requirements
Under Rule 8.3(a) of the Code, any person who is interested in
1% or more of any class of relevant securities of an offeree
company or of any securities exchange offeror (being any offeror
other than an offeror in respect of which it has been announced
that its offer is, or is likely to be, solely in cash) must make an
Opening Position Disclosure following the commencement of the offer
period and, if later, following the announcement in which any
securities exchange offeror is first identified. An Opening
Position Disclosure must contain details of the person's interests
and short positions in, and rights to subscribe for, any relevant
securities of each of (i) the offeree company and (ii) any
securities exchange offeror(s). An Opening Position Disclosure by a
person to whom Rule 8.3(a) applies must be made by no later than
3.30 pm (London time) on the 10th business day following the
commencement of the offer period and, if appropriate, by no later
than 3.30 pm (London time) on the 10th business day following the
announcement in which any securities exchange offeror is first
identified. Relevant persons who deal in the relevant securities of
the offeree company or of a securities exchange offeror prior to
the deadline for making an Opening Position Disclosure must instead
make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes,
interested in 1% or more of any class of relevant securities of the
offeree company or of any securities exchange offeror must make a
Dealing Disclosure if the person deals in any relevant securities
of the offeree company or of any securities exchange offeror. A
Dealing Disclosure must contain details of the dealing concerned
and of the person's interests and short positions in, and rights to
subscribe for, any relevant securities of each of (i) the offeree
company and (ii) any securities exchange offeror(s), save to the
extent that these details have previously been disclosed under Rule
8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies
must be made by no later than 3.30 pm (London time) on the business
day following the date of the relevant dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of an offeree company or a
securities exchange offeror, they will be deemed to be a single
person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree
company and by any offeror and Dealing Disclosures must also be
made by the offeree company, by any offeror and by any persons
acting in concert with any of them (see Rules 8.1, 8.2 and
8.4).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Takeover Panel's website at www.thetakeoverpanel.org.uk,
including details of the number of relevant securities in issue,
when the offer period commenced and when any offeror was first
identified. You should contact the Panel's Market Surveillance Unit
on +44 (0)20 7638 0129 if you are in any doubt as to whether you
are required to make an Opening Position Disclosure or a Dealing
Disclosure.
Forward-looking statements
This announcement contains certain forward-looking statements,
including statements regarding Severn Trent's and Dee Valley's
plans, objectives and expected performance. Such statements relate
to events and depend on circumstances that will occur in the future
and are subject to risks, uncertainties and assumptions. There are
a number of factors which could cause actual results and
developments to differ materially from those expressed or implied
by such forward looking statements, including, among others the
enactment of legislation or regulation that may impose costs or
restrict activities; the re-negotiation of contracts or licences;
fluctuations in demand and pricing in the water and wastewater
industry; fluctuations in exchange controls; changes in government
policy and taxations; industrial disputes; war and terrorism. These
forward-looking statements speak only as at the date of this
document.
Publication of this announcement
A copy of this announcement will be available subject to certain
restrictions relating to persons resident in Restricted
Jurisdictions on www.severntrent.com.
The contents of Severn Trent Plc's website are not incorporated
into and do not form part of this announcement.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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