NOT FOR DISTRIBUTION IN OR INTO OR TO ANY PERSON LOCATED OR RESIDENT IN THE UNITED STATES, ITS TERRITORIES AND POSSESSIONS (INCLUDING PUERTO RICO, THE U.S. VIRGIN ISLANDS, GUAM, AMERICAN SAMOA, WAKE ISLAND AND THE NORTHERN MARIANA ISLANDS), ANY STATE OF THE UNITED STATES OR THE DISTRICT OF COLUMBIA
17 January 2012
CASH TENDER OFFER
SEVERN TRENT UTILITIES FINANCE PLC ANNOUNCES A CASH TENDER OFFER IN RESPECT OF ITS £200,000,000 5.25 PER CENT. NOTES DUE 2014 (ISIN XS0176529583)
Severn Trent Utilities Finance Plc (formerly Severn Trent Water Utilities Finance Plc) (the Offeror) today announces an invitation, subject to certain offer restrictions, to eligible holders (the Noteholders) of its £200,000,000 5.25 per cent. Notes due 2014 (ISIN XS0176529583) (the Notes) to tender any and all such Notes for purchase by the Offeror for cash, as further described below (the Offer).
The full terms and conditions of the Offer are set out in a Tender Offer Memorandum dated 17 January 2012 (the Tender Offer Memorandum), which is available to Noteholders from Lucid Issuer Services Limited at the details set out below. Participation in the Offer is entirely voluntary and within the discretion of each Noteholder. Capitalised terms used and not otherwise defined in this announcement have the meaning given to them in the Tender Offer Memorandum.
Rationale for the Offer
The purpose of the Offer is to manage the Offeror's debt maturity profile. Any Notes purchased by the Offeror pursuant to the Offer will be cancelled and will not be reissued or resold.
Description of the Notes
ISIN/ Common Code
Outstanding Nominal Amount
Amount subject to the Offer
5.25 per cent. Notes due 2014
XS0176529583 / 017652958
5.00 per cent. UK Treasury Gilt due 2014 (ISIN: GB0031829509)
Any and all
The Offeror will pay for Notes accepted by it for purchase pursuant to the Offer a cash purchase price (the Purchase Price) to be determined at or around 11.00 a.m. (London time) (the Pricing Time) on 25 January 2012 (the Pricing Date) in the manner described in the Tender Offer Memorandum by reference to the annualised sum (such sum, the Purchase Yield) of a purchase spread of +100 basis points (the Purchase Spread) and the Benchmark Security Rate (being the yield to maturity of the Benchmark Security, determined as set out in the Tender Offer Memorandum).
The Purchase Price will be determined in consultation with the Dealer Managers in accordance with market convention and expressed as a percentage of the nominal amount of the Notes accepted for purchase pursuant to the Offer, and is intended to reflect a yield to maturity of the Notes on the Settlement Date based on the Purchase Yield. Specifically, the Purchase Price will equal (a) the value of all remaining payments of principal and interest on the Notes up to and including the scheduled maturity date of the Notes, discounted to the Settlement Date at a discount rate equal to the Purchase Yield, minus (b) Accrued Interest.
The Offeror will also pay accrued and unpaid interest for the period from (and including) the interest payment date for the Notes immediately preceding the Settlement Date to (but excluding) the Settlement Date in respect of Notes accepted for purchase pursuant to the Offer.
The Offeror proposes to accept for purchase pursuant to the Offer any and all of the Notes validly tendered, and there will be no scaling of tenders.
The Offeror may, in its sole discretion, extend, re-open, amend, waive any condition of and/or terminate the Offer at any time (subject to applicable law and as provided in the Tender Offer Memorandum). Details of any such extension, re-opening, amendment, waiver or termination will be announced as provided in the Tender Offer Memorandum as soon as reasonably practicable after the relevant decision is made. See "Amendment and Termination" in the Tender Offer Memorandum.
The following timetable is indicative only and subject to change.
Times and Dates
(All times are London time)
Commencement of the Offer
Offer announced. Tender Offer Memorandum available from the Dealer Managers and the Tender Agent.
Final deadline for receipt of valid Tender Instructions (as described in the Tender Offer Memorandum) by the Tender Agent in order for Noteholders to be able to participate in the Offer.
4.00 p.m. on 24 January 2012
Pricing Date and Pricing Time
Determination of the Benchmark Security Rate, Purchase Yield and Purchase Price.
At or around 11.00 a.m. on 25 January 2012
Announcement of Results and Pricing
Announcement of whether the Offeror will accept valid tenders of Notes pursuant to the Offer and, if so accepted, the principal amount of Notes to be purchased pursuant to the Offer, the Benchmark Security Rate, the Purchase Yield, the Purchase Price and the principal amount of Notes that will remain outstanding following settlement of the Offer.
As soon as reasonably practicable after the Pricing Time on the Pricing Date
Expected Settlement Date for the Offer.
27 January 2012
Noteholders are advised to check with any broker, securities dealer, bank, custodian, trust company or other intermediary through which they hold Notes when such intermediary would need to receive instructionsfrom a Noteholder in order for that Noteholder to be able to participate in the Offer before the deadlines specified above. The deadlines set by any such intermediary and each clearing system for the submission of tender instructions will be earlier than the relevant deadlines specified above.
Procedures for Participating in the Offer
In order to participate in the Offer, Noteholders must validly tender their Notes by delivering, or arranging to have delivered on their behalf, a valid Tender Instruction that is received by the Tender Agent by 4.00 p.m. (London time) on 24 January 2012. See "Procedures for Participating in the Offer" in the Tender Offer Memorandum.
Noteholders are advised to read carefully the Tender Offer Memorandum, including the section "Risk Factors and Other Considerations", before making a decision whether or not to tender their Notes for purchase pursuant to the Offer.
Separate new issue
Separately, Severn Trent Utilities Finance Plc has today announced a proposed new issue, subject to market conditions, of long-dated, sterling-denominated fixed rate notes, guaranteed by Severn Trent Water Limited, under its €4,000,000,000 Euro Medium Term Note Programme. Completion of the Offer is not conditional upon settlement of the proposed new issue or vice versa.
For further information in connection with the Offer
The Offeror has retained Barclays Bank PLC, HSBC Bank plc and The Royal Bank of Scotland plc to act as Dealer Managers and Lucid Issuer Services Limited to act as Tender Agent for the Offer. Questions and requests for assistance in connection with (i) the Offer may be directed to the Dealer Managers, and (ii) the delivery of Tender Instructions may be directed to the Tender Agent, at the details below.
Barclays Bank PLC
5 The North Colonnade
London E14 4BB
Telephone: +44 (0) 20 7773 8575
Attention: Liability Management Group
HSBC Bank plc
8 Canada Square
London E14 5HQ
Telephone: +44 20 7991 5110
Attention: Liability Management Group
The Royal Bank of Scotland plc
London EC2M 3UR
Telephone: +44 (0) 20 7085 5991
Attention: Liability Management Group
Lucid Issuer Services Limited
436 Essex Road
London N1 3QP
Telephone: +44 (0) 20 7704 0880
Attention: Thomas Choquet / Sunjeeve Patel
This announcement must be read in conjunction with the Tender Offer Memorandum. This announcement and the Tender Offer Memorandum contain important information which should be read carefully before any decision is made with respect to the Offer. If any Noteholder is in any doubt as to the action it should take, it is recommended to seek its own financial advice, including as to any tax consequences, from its stockbroker, bank manager, solicitor, accountant or other independent financial adviser. Any individual or company whose Notes are held on its behalf by a broker, securities dealer, bank, custodian, trust company or other intermediary must contact such entity if it wishes to tender Notes in the Offer. None of the Offeror, the Dealer Managers or the Tender Agent nor any of their respective directors, officers, employees, agents or affiliates makes any recommendation whether Noteholders should tender Notes in the Offer.
OFFER AND DISTRIBUTION RESTRICTIONS
Neither this announcement nor the Tender Offer Memorandum constitutes an invitation to participate in the Offer in any jurisdiction in which, or to any person to or from whom, it is unlawful to make such invitation or for there to be such participation under applicable securities or other laws. The distribution of this announcement and/or the Tender Offer Memorandum in certain jurisdictions may be restricted by law. Persons into whose possession this announcement and/or the Tender Offer Memorandum comes are required by each of the Offeror, the Dealer Managers and the Tender Agent to inform themselves about, and to observe, any such restrictions.
The Offer is not being made, and will not be made, directly or indirectly in or into, or by use of the mails of, or by any means or instrumentality of interstate or foreign commerce of or of any facilities of a national securities exchange of, the United States. This includes, but is not limited to, facsimile transmission, electronic mail, telex, telephone, the internet and other forms of electronic communication. The Notes may not be tendered in the Offer by any such use, means, instrumentality or facility from or within the United States or by persons located or resident in the United States. Accordingly, copies of the Tender Offer Memorandum and any other documents or materials relating to the Offer are not being, and must not be, directly or indirectly mailed or otherwise transmitted, distributed or forwarded (including, without limitation, by custodians, nominees or trustees) in or into the United States or to any persons located or resident in the United States. Any purported tender of Notes in the Offer resulting directly or indirectly from a violation of these restrictions will be invalid and any purported tender of Notes made by a person located in the United States or any agent, fiduciary or other intermediary acting on a non-discretionary basis for a principal giving instructions from within the United States will be invalid and will not be accepted.
Each holder of Notes participating in the Offer will represent that it is not located in the United States and is not participating in the Offer from the United States, or it is acting on a non-discretionary basis for a principal located outside the United States that is not giving an order to participate in the Offer from the United States. For the purposes of this and the above paragraph, United States means the United States of America, its territories and possessions (including Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana Islands), any state of the United States of America and the District of Columbia.
None of the Offer, the Tender Offer Memorandum and any other documents or materials relating to the Offer has been or will be submitted to the clearance procedures of the Commissione Nazionale per le Società e la Borsa (CONSOB) pursuant to Italian laws and regulations. The Offer is being carried out in the Republic of Italy (Italy) as an exempted offer pursuant to article 101-bis, paragraph 3-bis of the Legislative Decree No. 58 of 24 February 1998, as amended (the Financial Services Act) and article 35-bis, paragraph 4, letter b) of CONSOB Regulation No. 11971 of 14 May 1999, as amended. Holders or beneficial owners of the Notes may tender their Notes in the Offer through authorised persons (such as investment firms, banks or financial intermediaries permitted to conduct such activities in Italy in accordance with the Financial Services Act, CONSOB Regulation No. 16190 of 29 October 2007, as amended from time to time, and Legislative Decree No. 385 of 1 September 1993, as amended) and in compliance with applicable laws and regulations or with requirements imposed by CONSOB or any other Italian authority. Each intermediary must comply with the applicable laws and regulations concerning information duties in relation to its clients in respect of the Notes or the Offer.
The communication of the Tender Offer Memorandum and any other documents or materials relating to the Offer is not being made, and such documents and/or materials have not been approved, by an authorised person for the purposes of section 21 of the Financial Services and Markets Act 2000. Accordingly, such documents and/or materials are not being distributed to, and must not be passed on to, the general public in the United Kingdom. The communication of such documents and/or materials as a financial promotion is only being made to those persons in the United Kingdom falling within the definition of investment professionals (as defined in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the Financial PromotionOrder)) or persons who are within Article 43 of the Financial Promotion Order or any other persons to whom it may otherwise lawfully be made under the Financial Promotion Order.
The Offer is not being made, directly or indirectly, to the public in the Republic of France (France). Neither the Tender Offer Memorandum nor any other document or material relating to the Offer has been or shall be distributed to the public in France and only (i) providers of investment services relating to portfolio management for the account of third parties (personnes fournissant le service d'investissement de gestion de portefeuille pour compte de tiers) and/or (ii) qualified investors (investisseurs qualifiés), other than individuals, acting for their own account, all as defined in, and in accordance with, Articles L.411-1, L.411-2 and D.411-1 to D.411-3 of the French Code monétaire et financier, are eligible to participate in the Offer. The Tender Offer Memorandum has not been and will not be submitted for clearance to nor approved by the Autorité des Marchés Financiers.
Neither the Tender Offer Memorandum nor any other documents or materials relating to the Offer have been submitted to or will be submitted for approval or recognition to the Belgian Financial Services and Markets Authority (Autoriteit voor Financiële Diensten en Markten / Financial Services and Markets Authority) and, accordingly, the Offer may not be made in Belgium by way of a public offering, as defined in Article 3 of the Belgian Law of 1 April 2007 on public takeover bids or as defined in Article 3 of the Belgian Law of 16 June 2006 on the public offer of placement instruments and the admission to trading of placement instruments on regulated markets, each as amended or replaced from time to time. Accordingly, the Offer may not be advertised and will not be extended, and neither the Tender Offer Memorandum nor any other documents or materials relating to the Offer (including any memorandum, information circular, brochure or any similar documents) has been or shall be distributed or made available, directly or indirectly, to any person in Belgium other than "qualified investors" in the sense of Article 10 of the Belgian Law of 16 June 2006 on the public offer of placement instruments and the admission to trading of placement instruments on regulated markets (as amended from time to time), acting on their own account. Insofar as Belgium is concerned, the Tender Offer Memorandum has been issued only for the personal use of the above qualified investors and exclusively for the purpose of the Offer. Accordingly, the information contained in the Tender Offer Memorandum may not be used for any other purpose or disclosed to any other person in Belgium.
The Tender Offer Memorandum does not constitute an offer to buy or the solicitation of an offer to sell Notes (and tenders of Notes in the Offer will not be accepted from Noteholders) in any circumstances in which such offer, solicitation or tender is unlawful. In those jurisdictions where the securities, blue sky or other laws require the Offer to be made by a licensed broker or dealer and any of the Dealer Managers or any of their respective affiliates is such a licensed broker or dealer in any such jurisdiction, the Offer shall be deemed to be made by such Dealer Manager or such affiliate, as the case may be, on behalf of the Offeror in such jurisdiction.
In addition to the representations referred to above in respect of the United States, each Noteholder participating in the Offer will also be deemed to give certain representations in respect of the other jurisdictions referred to above and generally as set out in "Procedures for Participating in the Offer" in the Tender Offer Memorandum. Any tender of Notes for purchase pursuant to the Offer from a Noteholder that is unable to make these representations will not be accepted. Each of the Offeror, the Dealer Managers and the Tender Agent reserves the right, in its absolute discretion, to investigate, in relation to any tender of Notes for purchase pursuant to the Offer, whether any such representation given by a Noteholder is correct and, if such investigation is undertaken and as a result the Offeror determines (in its absolute discretion and for any reason) that such representation is not correct, such tender shall not be accepted.
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