TIDMSVT
RNS Number : 2080Q
Severn Trent PLC
25 November 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
25 NOVEMBER 2016
RESPONSE TO ANCALA OFFER
DOCUMENT AND INTRODUCTION OF LOAN NOTE ALTERNATIVE
REVISED SEVERN TRENT ACQUISITION
of
DEE VALLEY GROUP PLC
by
SEVERN TRENT WATER LIMITED
1. RESPONSE TO ANCALA OFFER DOCUMENT
Severn Trent notes that Ancala Fornia Limited ("Ancala") has
posted the offer document containing the terms and conditions of
its offer to Dee Valley shareholders (the "Ancala Proposal").
Severn Trent has announced an offer for Dee Valley of 1,825
pence in cash for each Dee Valley Ordinary Voting Share and 1,713
pence in cash for each Dee Valley Ordinary Non-Voting Share.
Severn Trent's offer is 119 pence (7 per cent.) higher than
Ancala's offer of 1,706 pence for each Dee Valley Ordinary Voting
Share and 111 pence (6.9 per cent.) higher than Ancala's offer of
1,602 pence for each Dee Valley Ordinary Non-Voting Share.
Severn Trent will be a supportive long term owner of Dee Valley
as the local water business for its area.
Severn Trent 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.
The Board of Dee Valley has announced its intention to recommend
unanimously that:
- all Dee Valley Ordinary Voting Shareholders vote in favour of
the Severn Trent's Revised Scheme; and
- all holders of Dee Valley Ordinary Non-Voting Shares accept
the Revised Severn Trent Contractual Offer for their Shares.
Severn Trent also notes that the Board of Dee Valley intends to
work with Severn Trent in implementing as soon as possible the
terms of the Revised Scheme.
If they would like to receive the significantly higher
consideration offered by Severn Trent, Dee Valley Ordinary
Shareholders should take no action in respect of the Ancala
Proposal, nor should they sell their shares to Ancala.
The conditions relating to shareholder approval of Severn
Trent's Revised Scheme will be satisfied if the requisite
majorities of those Dee Valley Ordinary Voting Shareholders present
and voting at the relevant meetings vote in favour, being 75 per.
or more (by value of Dee Valley Ordinary Voting Shares held) and a
majority in number at the court meeting, and 75 per cent. or more
(by number of Dee Valley Ordinary Voting Shares held) at the
general meeting.
2. INTRODUCTION OF LOAN NOTE ALTERNATIVE
Severn Trent announces that the Revised Acquisition is revised
to include a loan note alternative to the cash consideration
available under its Revised Acquisition (the "Loan Note
Alternative"). 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 Revised Acquisition will instead be
able to elect to receive loan notes ("Loan Notes"), in which case a
capital gain would not be realised for tax purposes on the disposal
of their Dee Valley Ordinary Shares.
The Loan Notes will bear interest (from the date of issue to the
relevant holder of Loan Notes) payable six months in arrears at the
rate of 0.25%. No application is intended to be made for the Loan
Notes to be issued or dealt in on any stock exchange. A holder of
the Loan Notes will have the right (subject to certain
restrictions) to redeem them for cash at par on 1 July 2017 or on
any subsequent interest payment dates. The Loan Notes may be
redeemed by Severn Trent on or after 1 July 2017, if more than 50
per cent. of the nominal amount of the Loan Notes outstanding has
been redeemed. Unless previously redeemed or repurchased, the Loan
Notes will be repaid at par on 1 January 2020. The Loan Notes shall
be non-transferable. The Loan Note Alternative shall be conditional
upon the Revised Scheme.
3. OTHER
Save for the introduction of the Loan Note Alternative as set
out in paragraph 2 above, the terms and conditions of the Revised
Acquisition remain the same as those set out in the announcement by
Severn Trent in respect of the Revised Acquisition on 23 November
2016.
Further details of the Revised Scheme, the Revised Severn Trent
Contractual Offer and the Loan Note Alternative including their
full terms and conditions and an indicative timetable, will be
contained in the scheme circular which, will be sent to Dee Valley
Ordinary Shareholders and will set out, amongst other things, (i)
the Revised Scheme; and (ii) the terms and conditions of the
Revised Severn Trent Contractual Offer, which will also include the
notices of the Court Meeting and the General Meeting and specify
the necessary actions to be taken by Dee Valley Ordinary
Shareholders.
Copies of the documents listed in paragraph 15 of Part II of the
Original Announcement and this announcement are available at
www.severntrent.com and will continue to remain available there
until the end of the offer period.
Unless otherwise stated, capitalised terms used in this
announcement have the same meaning as those defined in the
announcement by Severn Trent in respect of the Revised Acquisition
on 23 November 2016.
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 Revised
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 Revised Acquisition should only be
made on the basis of the information contained in the scheme
circular relating to the Revised Scheme, which will contain the
full terms and conditions of the Revised Acquisition and the
Revised Scheme (including details of how to vote) and the Revised
Severn Trent Contractual Offer (including how to accept the Revised
Severn Trent Contractual Offer). Dee Valley Ordinary Shareholders
are advised to read the formal documentation in relation to the
Revised Acquisition carefully once it has been dispatched.
Please be aware that addresses, electronic addresses and certain
other information provided by Dee Valley 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 Revised
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 Revised 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 Revised 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 Revised 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. Dee Valley 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 Revised Acquisition disclaim any responsibility or liability
for the violation of such restrictions by any person.
The Revised Severn Trent 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
Revised Severn Trent 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 Revised Severn Trent Contractual
Offer and doing so will render invalid any relevant purported
acceptance of the Revised Severn Trent 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 Water are each organised under the
laws of England. All of the officers and directors of Dee Valley
and Severn Trent Water are residents of countries other than the
United States. It may not be possible to sue Dee Valley, Severn
Trent Water 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 Water and their respective
affiliates to subject themselves to the jurisdiction and judgment
of a US court.
The Revised Scheme
Dee Valley Ordinary Shareholders in the United States should
note that the Revised Acquisition relates to the shares of an
English company and, in respect of the Dee Valley Ordinary Voting
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 Revised Scheme.
Moreover the Revised 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 Revised Severn Trent Contractual Offer
The Revised Severn Trent Contractual Offer in respect of Dee
Valley Ordinary Non-Voting Shares relates to the shares of an
English company and will be governed by English law on the
implementation of such an offer. The Revised Severn Trent
Contractual Offer is not intended to be made pursuant to the
provisions of any other legal system. Shareholders should note that
the Revised Severn Trent Contractual Offer is subject to English
disclosure rules, which are different from those in the United
States. The Revised Severn Trent Contractual Offer will not be made
to any Dee Valley Ordinary Shareholders in Restricted
Jurisdictions.
Note regarding Loan Notes
The Loan Notes to be issued pursuant to the Revised 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 Revised
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'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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