Christie Regulatory News (CTG)

22 Mar 2006 17:14

Christie Group PLC22 March 2006 Christie Group plc Offer to acquire the Audit and Stocktaking and the Commercial Investigations Divisions of Capcon Holdings plc Christie Group plc ("Christie") notes the announcement made today by CapconHoldings plc ("Capcon") in relation to the proposals set out in the Circularsent to Capcon Shareholders on 3 March 2006 (the "Circular"). The Circular states that in the event that the proposals are not approved byCapcon shareholders that "it is unlikely that the (Capcon) Group would be ableto meet its financial obligations as and when they fall due and may therefore beunable to trade unless alternative financing arrangements were made available". Against this background, Christie confirms that on 10 March 2006 it submitted alegally binding alternative offer to Capcon to purchase the businesses andassets (and to assume certain liabilities) of the Capcon Audit and Stocktakingand the Commercial Investigations Divisions (the "Audit and InvestigationsBusinesses") (the "Christie Offer"). The offer to acquire the Audit and Investigations Businesses as currentlyproposed in the Circular is an offer from Lakesong Trading Limited ("Lakesong")which is a company that has been formed, and is owned, by Mr Ken Dulieu and MrClifford Cavender, both directors of Capcon, for the purpose of purchasing theAudit and Investigations Businesses for £400,000 for the assets and goodwill ofthe Audit and Investigations Businesses plus a further £300,000 for the work inprogress (the "Lakesong Offer"). The Christie Offer is to make this purchase through a wholly owned subsidiary ofChristie on exactly the same terms as the Lakesong Offer and under a contractand timetable identical to that which is proposed to be entered into withLakesong save that the cash sum of £700,000 payable at completion will beincreased to £1.0 million. Christie confirms that it proposes to meet thisconsideration in cash from its own resources and is able to do so immediately.Christie confirms that the Christie Offer is fully funded and without furtherconditions. The Christie Offer was submitted on 10 March 2006 but was rejected by the boardof Capcon in a letter dated 14 March 2006. Christie responded to Capcon Board on17 March 2006 and confirmed that the Christie Offer has been renewed and remainsopen for acceptance. Furthermore, Christie informed the board of Capcon that it was prepared toimprove the Christie Offer, should Capcon make available up-to-date informationon the businesses, assets and liabilities of the Audit and InvestigationsBusinesses. To date, no such information has been provided to Christie. The Christie Board notes from the Circular that the Capcon Board •"believes that (following a sale of the Audit and Investigations Businesses) the opportunities for growth of the remaining Commercial Investigation Service divisions of the (Capcon) Group may benefit from the increased focus that they will inevitably receive after the proposed sale"; and •"intend(s) following such sale to develop the remaining business in Capcon and firmly believes that the investigation and risk management services will increase in demand in response to the growing awareness and reaction throughout the developed world to threats of damage to business from major fraud. The (Capcon) Directors believe that in these circumstances the strengthened remaining business will be an attractive base for further development...". Christie is a substantial professional business services group serving theLeisure, Retail and Care Sectors, with revenues in the year to December 2004 of£70.0 million and profits before tax of £5.2 million (being Christie's lastpublished audited accounts). Christie has confirmed in its legally binding offer that it will undertake thesame commitment as Lakesong to increase the opportunities forcross-fertilisation between the Audit and Investigations Businesses and theCapcon Group. In addition, the Christie Board believes that furtheropportunities would arise from across the six principal trading subsidiariescomprising the Christie Group. In the opinion of the Christie Board the Christie Offer provides the opportunityof enhanced career prospects for Capcon employees. The Christie Offer avoids the prospect for Capcon shareholders of sufferingsignificant dilution following the full conversion of the Convertible LoanStock, such that their current shareholding would represent only 38.8 per centof the enlarged ordinary issued share capital of Capcon, as envisaged by theCircular. The Christie Offer provides at least £0.3 million additional cash to Capcon toenable it retained business to pursue its stated objectives for the retainedbusiness. Christie has recently acquired 1,522,500 Capcon ordinary shares, representing a14.99 per cent. shareholding in Capcon and announces that it intends to voteagainst the resolutions 1 to 4 relating to the constitution of the ConvertibleLoan Notes to be considered at the EGM and against the disposal to Lakesong.. In addition Christie intends to propose that the meeting consider and vote onthe Christie Offer, as representing greater value to Capcon Shareholders thanthe Lakesong Offer and will propose an amendment approving the immediatedisposal of the Audit and Investigations Businesses to Christie. Christieconfirms that it is able to complete this acquisition immediately and withoutfurther condition. 22 March 2006 Enquiries: Christie Group plc David Rugg Chief ExecutiveRobert Zenker Finance Director 020 7227 0707 Charles Stanley Securities Philip Davies 020 7953 2000 This information is provided by RNS The company news service from the London Stock Exchange