5 Feb 2018 14:34
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION
FOR IMMEDIATE RELEASE
5 February 2018
RECOMMENDED SHARE AND CASH MERGER OF
TESCO PLC
AND
BOOKER GROUP PLC
PUBLICATION OF SCHEME DOCUMENT, TESCO PROSPECTUS AND TESCO CIRCULAR
On 27 January 2017, the boards of the Booker Group plc (the "Company" or "Booker") and Tesco PLC ("Tesco") announced that they had reached an agreement on the terms of a recommended share and cash merger (the "Merger"). On 20 December 2017, the Competition and Markets Authority announced that it had given unconditional clearance to the Merger. The Merger is to be implemented by means of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act 2006 (the "Scheme") and is subject to the terms and conditions set out in the scheme document relating to the Merger (the "Scheme Document").
The Company is pleased to announce that the Scheme Document is being sent, or made available, to Booker Shareholders today. The Scheme Document contains, amongst other things, a letter from the Chairman of Booker, the full terms and conditions of the Scheme and the Merger, an explanatory statement, notices convening the Scheme Court Meeting and the Booker General Meeting, details of the Mix and Match Facility, an expected timetable of principal events and details of the actions to be taken by Booker Shareholders. The Scheme Document is available on the Booker website at http://www.bookergroup.com/investor-centre/tesco-and-booker-proposed-merger.aspx.
Booker is also pleased to announce the declaration of the Closing Dividend of 3.7 pence per Booker Share* payable to those Booker Shareholders on the register of members as at the Scheme Record Time. The Closing Dividend is payable within 14 days of the Effective Date, being the date on which the Merger is completed.
On completion of the Merger, the Booker Non-Executive Directors will resign as directors of Booker and Charles Wilson, Booker's Chief Executive, and Stewart Gilliland, Chairman of Booker, will join the Combined Group's Board. Charles Wilson will also join the Combined Group's Executive Committee and will be appointed as CEO of Tesco's retail and wholesale operations in the UK & ROI.
As described in the Scheme Document, the Scheme will require the approval of Booker Shareholders at the Scheme Court Meeting and the passing of a special resolution at the Booker General Meeting, and then the approval of the Court. The Scheme Court Meeting and the Booker General Meeting are scheduled to be held at the offices of Clifford Chance LLP, 10 Upper Bank Street, London E14 5JJ on 28 February 2018. The Scheme Court Meeting will commence at 12.00 p.m. and the Booker General Meeting will commence at 12:10 p.m. or, if later, immediately after the conclusion or adjournment of the Scheme Court Meeting.
In addition, Tesco has today announced the publication of a circular, containing information on the background and reasons for the Merger (the "Tesco Circular"), having received approval from the UK Listing Authority. The Tesco Circular contains a notice convening the general meeting of Tesco Shareholders to be held at 10.00 a.m. on 28 February 2018.
Tesco has also published a prospectus relating to the new Tesco shares to be issued to Booker Shareholders by Tesco in connection with the Merger (the "Tesco Prospectus"), which has also been approved by the UK Listing Authority.
Completion of the Merger remains conditional on the approval of the Scheme by the Company's shareholders at the Scheme Court Meeting and the passing of the special resolution at the Booker General Meeting, the approval of Tesco Shareholders at the Tesco General Meeting, the satisfaction or waiver of the other Conditions set out in the Scheme Document and the approval of the Court. Completion of the Merger is expected to occur on or around 5 March 2018, with the Consideration (and, if applicable, share certificates) being sent to Booker Scheme Shareholders within 14 days of such date. The expected timetable of principal events is set out in the Appendix to this Announcement.
It is intended that following the Merger becoming Effective, the London Stock Exchange and FCA will be requested respectively to cancel trading in Booker Shares on the London Stock Exchange's main market for listed securities and to remove the listing of the Booker Shares from the Official List, in each case shortly after the Effective Date.
For information purposes only, the Scheme Document will also be made available to participants in the Booker Share Plans and persons with information rights.
Copies of the Scheme Document, the Tesco Circular and the Tesco Prospectus have been submitted to the National Storage Mechanism and will shortly be available for inspection at www.morningstar.co.uk/uk/NSM. In addition, copies of each of these documents will be available, subject to any restrictions relating to persons resident in certain jurisdictions, at the Company's website http://www.bookergroup.com/investor-centre/tesco-and-booker-proposed-merger.aspx and at Tesco's website https://www.tescoplc.com/investors/tesco-booker-proposed-merger/ respectively up to and including the date upon which the Merger becomes effective. Hard copies, subject to certain applicable securities laws, can be requested by contacting the Booker shareholder helpline between 9.00 a.m. and 5.00 p.m. Monday to Friday (except UK public holidays) on +44 (0) 370 889 3230.
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Note:
* The calculation of the Closing Dividend of 3.7 pence per Booker Share is based on an assumption that the Effective Date will be no later than 31 March 2018. To the extent that the Effective Date falls after 31 March 2018, then the amount of the Closing Dividend will be recalculated in accordance with Appendix 2 of the Scheme Document or as otherwise agreed between Tesco and Booker.
Enquiries:
Booker Group plc+44 (0) 193 337 1148Charles Wilson / Jonathan Prentis
J.P. Morgan Cazenove (financial adviser and corporate broker to Booker)+44 (0) 207 742 6000Toby Radford / Behzad ArbabzadahDwayne Lysaght / Adam Laursen
Investec (corporate broker to Booker)+44 (0) 207 597 4000Keith Anderson/Henry Reast
Tulchan Communications (public relations adviser to Booker Group plc)+44 (0) 207 353 4200Susanna Voyle / Jess Reid
Clifford Chance LLP are retained as legal advisers for Booker.
Terms used but not defined in this Announcement have the meaning set out in the announcement of the Merger released on 27 January 2017.
Important Notices
This Announcement is for information purposes only and does not constitute or form part of any offer to sell or subscribe for or any invitation to purchase or subscribe for any securities of the solicitation of any vote or approval in any jurisdiction pursuant to the Merger. It does not constitute a prospectus or prospectus equivalent document.
Overseas Jurisdictions
The release, publication or distribution of this Announcement in or into jurisdictions other than the UK may be restricted by law and therefore any persons who are subject to the law of any jurisdiction other than the UK should inform themselves about, and observe, any applicable legal or regulatory requirements. In particular the ability of persons who are not resident in the United Kingdom, to vote their Booker Shares with respect to the Scheme at the Scheme Court Meeting, or to appoint another person as proxy to vote at the Scheme Court Meeting on their behalf, may be affected by the laws of the relevant jurisdictions in which they are located. Any failure to comply with the applicable 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 Merger disclaim any responsibility or liability for the violation of such restrictions by any person. This Announcement has been prepared for the purpose 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 of England and Wales. Unless otherwise determined by Tesco or required by the Code, and permitted by applicable law and regulation, the Merger will not be made available directly or indirectly, in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction and no person may vote in favour of the Merger by any such use, means, instrumentality or form within a Restricted Jurisdiction or any other jurisdiction if to do so would constitute a violation of the laws of that jurisdiction
Copies of this Announcement and any formal documentation relating to the Merger will not be and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in, into or from any Restricted Jurisdiction or any jurisdiction where to do so would violate the laws of that jurisdiction and persons receiving such documents (including custodians, nominees and trustees) must not mail or otherwise forward, distribute or send them in or into or from any Restricted Jurisdiction. Doing so may render invalid any related purported vote in respect of the Merger. If the Merger is implemented by way of Offer (unless otherwise permitted by applicable law or regulation), the Offer may not be made, directly or indirectly, in or into or by use of the mails or any other means or instrumentality (including, without limitation, facsimile, email or other electronic transmission, telex or telephone) of interstate or foreign commerce of, or any facility of a national, state or other securities exchange of any Restricted Jurisdiction and the Offer will not be capable of acceptance by any such use, means, instrumentality or facilities or from within any Restricted Jurisdiction.
The availability of New Tesco Shares under the Merger to Booker Shareholders who are not resident in the United Kingdom or the ability of those persons to hold such shares may be affected by the laws or regulatory requirements of the relevant jurisdictions in which they are resident. Persons who are not resident in the United Kingdom should inform themselves of, and observe, any applicable legal or regulatory requirements.
Further details in relation to Overseas Shareholders are contained in the Scheme Document.
Additional Information for US Investors
The Merger is being made to acquire the securities of an English company by means of a scheme of arrangement provided for under English law. A transaction effected by means of a scheme of arrangement is not subject to the tender offer rules under the US Exchange Act and is exempt from the registration requirements under the US Securities Act. Accordingly, the Scheme will be subject to disclosure requirements and practices applicable in the UK to schemes of arrangement, which are different from the disclosure and other requirements of the US tender offer and securities laws. The financial information included in this Announcement and the Scheme documentation has been or will have been prepared in accordance with International Financial Reporting Standards and thus 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 US.
The receipt of consideration pursuant to the Merger by a US holder for the transfer of its Booker Scheme Shares pursuant to the Scheme may be a taxable transaction for United States federal income tax purposes and under applicable United States state and local, as well as foreign and other, tax laws. Each Booker Shareholder is urged to consult his independent professional adviser immediately regarding the tax consequences of the Merger applicable to him.
It may be difficult for US holders of shares to enforce their rights and any claims they may have arising under US federal securities laws in connection with the Merger, since Booker and Tesco are each organised under the laws of a country other than the US, some or all of their officers and directors may be residents of countries other than the US and most of the assets of Tesco and Booker are located outside of the US. US holders may not be able to sue a non-US company or its officers or directors in a non-US court for violations of US securities laws. Further, it may be difficult to compel a non-US company and its affiliates to subject themselves to a US court's jurisdiction or judgement.
The Merger is intended to be carried out under a scheme of arrangement provided for under English company law (which requires the approval of the Booker Scheme Shareholders). If so, it is expected that any Tesco Shares to be issued pursuant to the Scheme to Booker Shareholders would be issued in reliance upon the exemption from the registration requirements of the US Securities Act, provided by Section 3(a)(10) thereof.
Securities issued pursuant to the Scheme will not be registered under any US state securities laws and may only be issued to persons resident in a state pursuant to an exemption from the registration requirements of the securities laws of such state.
For the purpose of qualifying for the exemption provided by Section 3(a)(10) of the US Securities Act, Booker will advise the Court that its sanctioning of the Scheme will be relied on by Tesco as an approval of the Scheme following a hearing on its fairness to Booker Shareholders, at which Court hearing all Booker Shareholders are entitled to attend in person or though counsel to support or oppose the sanctioning of the Scheme and with respect to which notification has been given to all such holders.
The Merger may in certain circumstances instead be carried out by way of a Takeover Offer under English law. If Tesco exercises its right to implement the Merger by way of a Takeover Offer, such Offer will be made in compliance with applicable US tender offer and securities laws and regulations, including the exemptions therefrom.
In accordance with normal UK practice and pursuant to Rule 14e-5(b) of the US Exchange Act, Tesco or its nominees, or its brokers (acting as agents), may from time to time make certain purchases of, or arrangements to purchase, Booker Shares outside of the US, other than pursuant to the Merger, until the date on which the Merger and/or Scheme becomes effective, lapses or is otherwise withdrawn. These purchases may occur either in the open market at prevailing prices or in private transactions at negotiated prices. Any information about such purchases will be disclosed as required in the UK, will be reported to a Regulatory Information Service and will be available on the London Stock Exchange website at www.londonstockexchange.com.
Investors are urged to read any documents related to the Merger filed, furnished or to be filed or furnished with the SEC because they will contain important information regarding the Merger and any related offer of securities Such documents will be available free of charge at the SEC's web site at www sec.gov, Tesco's website at www.tescoplc.com and Booker's website atwww.bookergroup.com/investor-centre.
Important Notices Relating to Financial Advisers
J.P. Morgan Limited (which conducts its UK investment banking activities as J.P. Morgan Cazenove) which is authorised and regulated in the UK by the FCA, is acting exclusively for Booker and no one else in connection with the Merger and will not be responsible to anyone other than Booker for providing the protections afforded to clients of J.P. Morgan Cazenove nor for providing advice in relation to the Merger or any other matters referred to in this Announcement.
Investec Bank plc, which is authorised by the Prudential Regulation Authority and regulated by the FCA and the Prudential Regulation Authority in the UK, is acting exclusively for Booker and no one else in connection with the Merger and will not be responsible to anyone other than Booker for providing the protections afforded to its clients or for providing advice in relation to the Merger or any other matters referred to herein.
Forward‑looking statements
This Announcement, oral statements made regarding the Merger, and other information published by Booker and Tesco contain statements which are, or may be deemed to be, "forward-looking statements" with respect to the financial condition, results of operations and businesses of Booker and Tesco and the Booker Group and the Tesco Group, and certain plans and objectives of Booker and Tesco with respect to the Combined Group. All statements other than statements of historical fact are forward-looking statements. Forward-looking statements are prospective in nature and are not based on historical facts, but rather on current expectations and projections of the management of Booker and Tesco about future events, and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements. The forward-looking statements contained in this Announcement include statements relating to the expected effects of the Merger on Booker and Tesco, the expected timing and scope of the Merger and other statements other than historical facts. Often, but not always, forward-looking statements can be identified by the use of forward-looking words such as "plans", "expects", "does not expect", "is expected", "is subject to", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", "does not anticipate", "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "should", "would", "might" or "will" be taken, occur or be achieved. Although Booker and Tesco believe that the expectations reflected in such forward-looking statements are reasonable, Booker and Tesco can give no assurance that such expectations will prove to be correct. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements. These factors include the satisfaction of the Conditions, as well as additional factors, such as: risks relating to the Tesco Group's credit rating; local and global political and economic conditions including Brexit; the Booker Group's and the Tesco Group's economic model and liquidity risks; financial services risk; the risks associated with each of Booker's and Tesco's brand, reputation and trust; environmental risks; safety, technology, data security and data privacy risks; changes in consumer habits and preferences; legal or regulatory developments and changes; the outcome of any litigation; the impact of any acquisitions or similar transactions; competition and market risks; competitive product and pricing pressures; business continuity and crisis management; pensions risks; joint venture governance and partnerships; and failure to report accurate financial information in compliance with accounting standards and applicable legislation. Other unknown or unpredictable factors could cause actual results to differ materially from those in the forward-looking statements. Such forward-looking statements should therefore be construed in the light of such factors. Neither Booker nor Tesco, nor any of their respective associates or directors, officers or advisers, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this Announcement will actually occur. You are cautioned not to place undue reliance on these forward-looking statements. Each forward looking statement speaks only as of the date of this Announcement. None of Booker, the Booker Group, Tesco or the Tesco Group undertakes any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
No profit forecasts or estimates
No statement in this Announcement is intended as a profit forecast or estimate for any period and no statement in this Announcement should be interpreted to mean that earnings or earnings per share for Booker for the current or future financial years would necessarily match or exceed the historical published earnings or earnings per share for Booker.
Publication on website and availability of hard copies
In accordance with Rule 26.1 of the Code, a copy of this Announcement will be made available, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, on Booker's website at www.bookergroup.com/investor-centre by no later than 12 noon (London time) on the Business Day following this Announcement.
For the avoidance of doubt, the contents of websites referred to in this Announcement are not incorporated into and do not form part of this Announcement.
If you are in any doubt about the contents of this Announcement or the action you should take, you are recommended to seek your own independent financial advice immediately from your stockbroker, bank manager, solicitor, accountant or independent financial adviser duly authorised under the Financial Services and Markets Act 2000 (as amended) if you are resident in the United Kingdom or, if not, from another appropriately authorised independent financial adviser.
APPENDIX
These dates and times are indicative only and are based on current expectations and are subject to change. If any of the times and/or dates change, the revised times and/or dates will be announced via a Regulatory Information Service and, if required by the Panel, post notice of the change(s) to the Booker Shareholders and persons with information rights.
Latest time for lodging the form of proxy for use at the Scheme Court Meeting | 12.00 p.m. on 26 February 2018(1) |
Latest time for lodging the form of proxy for use at the Booker General Meeting | 12.10 p.m. on 26 February 2018(2) |
Scheme Voting Record Time | 6.00 p.m. on 26 February 2018(3) |
Tesco General Meeting | 10.00 a.m. on 28 February 2018 |
Scheme Court Meeting | 12.00 p.m. on 28 February 2018 |
Booker General Meeting | 12.10 p.m. on 28 February 2018(4) |
Election return time (last day for receipt of forms of election or, for CREST holders, electronic elections) in respect of the Mix and Match Facility | 1.00 p.m. on 1 March 2018 |
Court hearing to sanction the Scheme | 2 March 2018(5) |
Last day of dealings in, and for registration of transfers of, and disablement in CREST of, Booker Shares | 2 March 2018(5) |
Scheme Record Time and record time with respect to the Closing Dividend | 6.00 p.m. on 2 March 2018(5) |
Effective Date of the Scheme | by no later than 8.00 a.m. on 5 March 2018(5) |
Admission of the New Tesco Shares to (i) the secondary listing segment of the Irish Official List; and (ii) the premium listing segment of the Official List and to trading on the Main Market, and commencement of dealings in New Tesco Shares on both the London Stock Exchange and the Irish Stock Exchange | by 8.00 a.m. on 5 March 2018(5) |
Issue of New Tesco Shares to Booker Shareholders and crediting of New Tesco Shares soon after to CREST accounts | by no later than 8.00 a.m. on 5 March 2018(5) |
Announcement confirming Closing Dividend | 5 March 2018(5) |
Announcement concerning the extent to which elections under the Mix and Match Facility will be satisfied | 5 March 2018(5) |
Cancellation of listing of Booker Shares | 5 March 2018(5) |
Latest date for: (i) CREST accounts to be credited with New Tesco Shares and assured payment obligations in respect of any cash due; and (ii) despatch of cheques and share certificates in respect of the New Tesco Shares | by 19 March 2018(5) |
Payment of Closing Dividend | by 19 March 2018(5) |
Long-stop Date | 30 November 2018(6) |
Notes:
(1) It is requested that blue Forms of Proxy for the Scheme Court Meeting be lodged before 12.00 p.m. on 26 February 2018 or, if the Scheme Court Meeting is adjourned, not later than 48 hours (excluding any part of a day that is not a working day) before the time appointed for the holding of the adjourned meeting. However, blue Forms of Proxy not so lodged may be handed to the chairman of the Scheme Court Meeting before the start of the Scheme Court Meeting.
(2) White Forms of Proxy for the Booker General Meeting must be lodged before 12.10 p.m. on 26 February 2018 in order to be valid or, if the Booker General Meeting is adjourned, not later than 48 hours (excluding any part of a day that is not a working day) before the time appointed for the holding of the adjourned meeting. White Forms of Proxy cannot be handed to the chairman of the Booker General Meeting at that meeting.
(3) If either of the Booker Meetings is adjourned, the Scheme Voting Record Time for the relevant adjourned meeting will be 6.00 p.m. on the date 48 hours (excluding any part of a day that is not a working day) before the date set for the adjourned meeting.
(4) To commence at 12.10 p.m. or, if later, immediately after the conclusion or adjournment of the Scheme Court Meeting.
(5) The expected date of the Court hearing to sanction the Scheme and each of the subsequent dates set out in this timetable could be subject to change and will depend, amongst other things, on the date on which: (i) the conditions to the Scheme and the Merger are satisfied or, if capable of waiver, waived; and (ii) a copy of the Court order sanctioning the Scheme is delivered to the Registrar of Companies.
(6) This date may be extended to such date as Booker and Tesco may, with the consent of the Panel, agree and the Court (if required) may allow.
All references in this Announcement to times are to times in London (unless otherwise stated).
All Booker Shareholders have the right to attend the Court hearing to sanction the Scheme.