RNS Number:0459N
Chelsea Village PLC
01 July 2003
Not for release or distribution in or into Australia, Canada, Japan or the
United States of America.
1 July, 2003
Recommended Mandatory Cash Offer
by Citigroup
on behalf of
Chelsea Limited (the "Purchaser")
for Chelsea Village plc
Transaction Summary
* The Purchaser announces today the terms of a recommended
mandatory cash offer to be made on its behalf by Citigroup to acquire the issued
ordinary share capital of Chelsea Village not already owned or contracted to be
acquired by the Purchaser
* The Purchaser today agreed to purchase at 35 pence per share
84,908,506 Chelsea Village Shares, representing approximately 50.09 per cent. of
the entire issued share capital of Chelsea Village
* The Offer, which will not be subject to any conditions, will be
made for all of the ordinary shares of 1p each in Chelsea Village not already
owned or contracted to be acquired by the Purchaser at a price of 35 pence in
cash per share
* The Offer values the entire issued share capital of Chelsea
Village at approximately #59.3 million and represents a 15 per cent. premium to
the closing middle market share price of a Chelsea Village Share of 30.5 pence
on 30 June, 2003, the last business day before this announcement, as derived
from the AIM Appendix to the Daily Official List, and a 54 per cent. premium to
the average share price of a Chelsea Village Share in the one month prior to
this announcement
* The Purchaser is a newly incorporated English company which has
been formed for the purpose of making the Offer and is, indirectly, wholly-owned
by Roman Abramovich
* Mr. Abramovich is a leading Russian businessman and one of the
major shareholders in Sibneft, one of Russia's largest oil companies, and a keen
follower of sport and international football. The funds required for the making
of the Offer are being provided from Mr. Abramovich's own resources
Commenting on the Offer, Roman Abramovich said:
"We are delighted to agree this deal to acquire what is already one of the top
clubs in Europe. We have the resources and ambition to achieve even more given
the huge potential of this great club."
Ken Bates, Chairman of Chelsea Village, said:
"This is a great deal for Chelsea Village, the club and its fans. We have
achieved an enormous amount over the past 21 years building a fantastic new
stadium and a talented team which is firmly established as one of the top clubs
in Europe. In today's highly competitive football market, the club will benefit
from a new owner with deeper pockets to move Chelsea to the next level. I look
forward to working with Roman Abramovich to achieve even greater things."
Press Enquiries
Purchaser
Eugene Tenenbaum 01932 268 268
Citigroup 020 7986 4000
Robert Swannell
Simon Gluckstein
Citigate Dewe Rogerson 020 7638 9571
Jonathan Clare
Andy Cornelius
Chelsea Village 020 7385 5545
Ken Bates Chairman
Trevor Birch Chief Executive
Seymour Pierce 020 7107 8000
Richard Feigen
Jonathan Wright
Citigroup, which is regulated in the United Kingdom by the Financial Services
Authority, is acting for the Purchaser and no-one else in connection with the
Offer and will not be responsible to anyone other than the Purchaser for
providing the protections afforded to customers of Citigroup nor for giving
advice in relation to the Offer.
Seymour Pierce, which is regulated in the United Kingdom by the Financial
Services Authority, is acting for Chelsea Village and no-one else in connection
with the Offer and will not be responsible to anyone other than Chelsea Village
for providing the protections afforded to customers of Seymour Pierce nor for
giving advice in relation to the Offer.
This announcement does not constitute, or form part of, an offer or an
invitation to purchase any securities. This announcement is published on behalf
of the Purchaser and has been approved by Citigroup solely for the purposes of
section 21 of the Financial Services and Markets Act 2000.
The availability of the Offer to persons outside the United Kingdom may be
affected by the laws of the relevant jurisdictions. Such persons should inform
themselves about and observe any applicable requirements.
The Offer will not be made, directly or indirectly, in or into, or by use of the
mails or any other means or instrumentality (including, without limitation,
telephonically or electronically) of interstate or foreign commerce of, or any
facilities of, a national securities exchange of Australia, Canada, Japan or the
United States of America and will not be capable of acceptance by any such use,
means, instrumentality or facilities or from within Australia, Canada, Japan or
the United States of America. Accordingly, copies of this announcement are not
being, and must not be, mailed or otherwise distributed or sent in or into or
from Australia, Canada, Japan or the United States of America and persons
receiving this announcement (including custodians, nominees and trustees) must
not distribute or send it into or from Australia, Canada, Japan or the United
States of America. Doing so may render invalid any related purported
acceptance.
This summary should be read in conjunction with the full text of this
announcement. Appendix I of this announcement contains definitions of certain
expressions used in this announcement.
Not for release or distribution in or into Australia, Canada, Japan or the
United States of America.
1 July, 2003
Recommended Mandatory Cash Offer
by Citigroup
on behalf of
Chelsea Limited (the "Purchaser")
for Chelsea Village plc
Introduction
The Boards of the Purchaser and Chelsea Village plc announce the terms of a
recommended mandatory cash offer to be made by Citigroup on behalf of the
Purchaser in accordance with Rule 9 of the Code for the issued share capital of
Chelsea Village not already owned or contracted to be acquired by the Purchaser.
The Offer values each Chelsea Village Share at 35 pence and Chelsea Village's
entire issued share capital at approximately #59.3 million.
The Purchaser has today agreed to purchase at 35 pence per share 84,908,506
Chelsea Village Shares, including 50,000,000 Chelsea Village Shares of which the
Chairman of Chelsea Village, Ken Bates, is the beneficial owner, which purchases
will result in the Purchaser holding an interest in Chelsea Village representing
50.09 per cent. of Chelsea Village's ordinary share capital and in the Purchaser
agreeing to extend an offer to Chelsea Village Shareholders in accordance with
Rule 9 of the Code.
The Offer will be wholly unconditional as the Chelsea Village Shares being
acquired by the Purchaser will carry more than 50 per cent. of the voting
rights normally exercisable at general meetings of Chelsea Village.
The Purchaser is a newly incorporated English company which has been formed for
the purpose of making the Offer and is, indirectly, wholly-owned by Roman
Abramovich.
The Offer
The Offer will be made on, and subject to, the terms set out below and to be set
out in the Offer Document and the Form of Acceptance. The Offer will be made
for all of the ordinary shares of 1p each in Chelsea Village, other than such
shares which the Purchaser already owns or has contracted to acquire, on the
following basis:
for each Chelsea Village Share 35 pence in cash
The Offer values the entire issued share capital of Chelsea Village at
approximately #59.3 million and represents a 15 per cent. premium to the closing
middle market share price of a Chelsea Village Share of 30.5 pence on 30 June,
2003, the last business day before this announcement, as derived from the AIM
Appendix to the Daily Official List, and a 54 per cent. premium to the average
share price of a Chelsea Village Share in the one month prior to this
announcement.
The Offer will extend to all existing issued Chelsea Village Shares not already
owned or contracted to be acquired by the Purchaser and to any Chelsea Village
Shares which are unconditionally allotted or issued while the Offer remains open
for acceptance and will remain open for acceptance until 3.00 p.m. on the twenty
first day after the posting of the Offer Document, or (if that day is a
Saturday, Sunday or a public holiday) on the next succeeding business day (or
such earlier date, not (without the consent of the Panel) being earlier than the
first closing date of the Offer, as the Purchaser may decide).
The Chelsea Village Shares to be acquired pursuant to the Offer will be acquired
with full title guarantee, fully paid and free from all liens, charges,
equitable interests, encumbrances and other third party interests of any nature
whatsoever and together with all rights now or hereafter attaching thereto,
including, without limitation, the right to receive and retain all dividends and
other distributions declared, made or paid on or after 30 June, 2003.
Recommendation
The Board of Chelsea Village, which has been so advised by Seymour Pierce,
considers the terms of the Offer to be fair and reasonable and, accordingly,
will recommend all Chelsea Village Shareholders to accept the Offer. In
providing advice to the Board, Seymour Pierce has taken into account the
commercial assessments of the Board of Chelsea Village.
Information on the Purchaser
The Purchaser is a company incorporated in England which is, indirectly,
wholly-owned by Roman Abramovich. The Purchaser has been established for the
purposes of making the Offer and, other than matters related to the making of
the Offer, has not engaged in any other activity. The funds required for the
making of the Offer are being provided from Mr. Abramovich's own resources.
Mr. Abramovich, aged 36, is a leading Russian businessman. Having received a
legal degree from Moscow State Law Academy, he worked as director of the Moscow
offices of Sibneft, the fifth largest Russian oil producer, and was elected to
Sibneft's board of directors in September 1996, a position he held until 2000.
In 1999, he was elected to the lower house of the Russian parliament, the State
Duma. In 2000, he joined the Duma's Committee on Northern and Far East Issues,
and later that year founded the charity Pole of Hope to conduct projects in
Chukotka in north east Russia. In January 2001, he was inaugurated as governor
of Chukotka.
Mr. Abramovich is one of the major shareholders in Sibneft. In May 2003,
Sibneft announced a merger with Yukos Oil, Russia's second largest oil producer,
to create Russia's largest, and the world's fourth largest, oil producer.
Following completion of the merger, Mr. Abramovich will be one of the largest
shareholders in the combined entity.
Information on Chelsea Village
Chelsea Village is the holding company for a diverse range of leisure interests
centred around a leading professional football club, Chelsea Football Club. In
addition to professional football, the Company's interests encompass
merchandising / retailing, catering, corporate hospitality, media and
communications, hotel and restaurant businesses, travel, property and various
other football-related activities.
For the year ended 30 June, 2002, Chelsea Village reported a loss on ordinary
activities after tax and minority interests of #16.6 million (2001: loss of
#11.1 million) on turnover of #115.3 million (2001: #93.6 million). As at 30
June, 2002, Chelsea Village had consolidated net assets of #83.4 million (2001:
#94.2 million).
For the six months ended 31 December, 2002, Chelsea Village reported a loss on
ordinary activities after tax and minority interests of #11.3 million (2001:
loss of #4.1 million) on a turnover of #53.6 million (2001: #57.2 million). As
at 31 December, 2002, Chelsea Village had consolidated net assets of #90.3
million (2001: #72.1 million).
Background to the Offer
Chelsea Football Club is one of England's leading football clubs with a
longstanding record of playing success as evidenced most recently by its
qualification for the 2003/04 UEFA Champions' League. In addition, Chelsea
Football Club has developed a powerful brand synonymous with the worldwide
popularity of the English Premiership which the Company has leveraged across a
range of products and media.
Roman Abramovich has had a lifetime's interest in sport and has owned a
successful Russian ice hockey team for a number of years. He has also had a
long-held ambition to own one of Europe's leading football teams.
In this regard, Mr. Abramovich believes that Chelsea Football Club combines a
tradition of footballing excellence with the potential for further advancement
and believes that the incremental financial resources he can offer will assist
Chelsea Football Club in achieving further playing success in both English and
European competition.
Reasons for the Offer
The Purchaser has today agreed to purchase 84,908,506 Chelsea Village Shares,
including 50,000,000 Chelsea Village Shares of which the Chairman of Chelsea
Village, Ken Bates, is the beneficial owner, which purchases will result in the
Purchaser holding an interest in Chelsea Village representing 50.09 per cent. of
Chelsea Village's ordinary share capital.
Rule 9 of the Code requires a person who acquires shares or rights over shares
amounting to 30 per cent. or more of a public company to make a mandatory cash
offer in accordance with the terms of Rule 9. Accordingly, the agreement to
purchase 84,908,506 Chelsea Village Shares as detailed above has triggered the
obligation on the Purchaser to make the Offer. As the Offer will be mandatory
under Rule 9 of the Code, and as the Purchaser will own more than 50 per cent.
of Chelsea Village's issued ordinary share capital, the Offer will be
unconditional.
Directors and Employees
The Purchaser has given assurances to the Board of Chelsea Village that it will
fully safeguard the existing contractual and statutory employment rights,
including pension rights, of all Chelsea Village employees as required by
applicable law.
Compulsory Acquisition and De-Listing
If the Purchaser receives acceptances under the Offer which, when aggregated
with the Chelsea Village Shares already owned or contracted to be acquired by
the Purchaser, represent 75 per cent. or more of the Chelsea Village Shares, the
Purchaser intends to take all necessary steps under the relevant provisions of
the Companies Act to re-register Chelsea Village as a private limited company.
Furthermore, the Purchaser intends to procure the making of an application by
Chelsea Village for the cancellation of the trading of the Chelsea Village
Shares on the Alternative Investment Market of the London Stock Exchange.
In addition, if the Purchaser receives acceptances under the Offer in respect of
90 per cent. or more of the Chelsea Village Shares to which the Offer relates
for the purposes of sections 428 to 430F of the Companies Act, the Purchaser
intends to exercise its rights under those sections to acquire compulsorily the
remaining Chelsea Village Shares.
Further Terms of the Offer
The Offer will lapse if the acquisition of Chelsea Village is referred to the
Competition Commission before 3.00 pm (London time) on the first closing date of
the Offer. In such circumstances, the Offer will cease to be capable of further
acceptance and the Purchaser and accepting Chelsea Village Shareholders shall
thereupon cease to be bound by acceptances submitted at or before the time when
the Offer so lapses.
Disclosure of Interests in Chelsea Village
Save for the shareholdings of the Purchaser in Chelsea Village as described
above, neither the Purchaser nor any of the directors of the Purchaser nor so
far as the Purchaser is aware, any person acting in concert with the Purchaser,
owns or controls any Chelsea Village Shares or holds any options to purchase
Chelsea Village Shares.
Financing of the Offer
Full acceptance of the Offer would involve payment of a consideration of
approximately #29.6 million in cash. Citigroup is satisfied that, after
reasonable enquiry, resources are available to the Purchaser sufficient to
satisfy full acceptance of the Offer.
General
The formal Offer Document, containing a letter of recommendation from the
Chairman of Chelsea Village and the further terms of the Offer, and the Form of
Acceptance, will be dispatched by Citigroup, on behalf of the Purchaser, as soon
as is practical.
APPENDIX I
DEFINITIONS
The following definitions apply throughout this announcement, unless the context
otherwise requires:
"Australia" the Commonwealth of Australia and its dependent territories
"business day" a day (excluding Saturdays, Sundays and public holidays) on which banks are
generally open for business in the City of London
"Board" the board of directors of Chelsea Village or the Purchaser, as the case may be
"Chelsea Village" Chelsea Village plc
"Chelsea Village Shareholders" holders of Chelsea Village Shares
"Chelsea Village Shares" ordinary shares of 1p each in the share capital of Chelsea Village
"Citigroup" Citigroup Global Markets Limited
"Code" The City Code on Takeovers and Mergers
"Companies Act" the Companies Act 1985
"Form of Acceptance" the form of acceptance for use in connection with the Offer
"Japan" Japan, its cities, prefectures, territories and possessions
"London Stock Exchange" London Stock Exchange plc
"Offer" the recommended mandatory cash offer, to be made by Citigroup on behalf of the
Purchaser, for the whole of the issued and to be issued share capital of Chelsea
Village, on the terms and subject to the conditions to be set out in the Offer
Document and in the accompanying Form of Acceptance, including, where the context
so requires, any subsequent revision, variation, extension or renewal of such
offer
"Offer Document" the document to be addressed to Chelsea Village Shareholders containing the Offer
"Offer Price" 35 pence in cash for each Chelsea Village Share
"Purchaser" Chelsea Limited
"Panel" the Panel on Takeovers and Mergers of the United Kingdom
"Seymour Pierce" Seymour Pierce Limited
"UK" the United Kingdom of Great Britain and Northern Ireland
"US" or "United States" the United States of America, its territories and possessions, any State of the
United States of America and the District of Colombia, and all other areas
subject to its jurisdiction
This information is provided by RNS
The company news service from the London Stock Exchange
END
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