HON.L Regulatory News (HON)

25 Jan 2006 07:00

Honeywell International Inc24 January 2006 Not for release, publication or distribution in or into Australia, Canada, Japanor the United States or any other jurisdiction where it would be unlawful to doso FOR IMMEDIATE RELEASE January 24, 2006 INCREASED CASH OFFER BY UBS INVESTMENT BANK ON BEHALF OF Honeywell ACQUISITIONS II LIMITED FOR First Technology PLC Introduction On December 19, 2005, the boards of Honeywell and First Technology announcedthat they had agreed the terms of a recommended all cash offer for the entireissued and to be issued share capital of First Technology to be made by UBS onbehalf of Honeywell at 275 pence per First Technology Share. On January 20, 2006, the boards of Danaher Corporation and First Technologyannounced that they had agreed the terms of a recommended cash offer for theentire issued and to be issued share capital of First Technology at 330 penceper First Technology Share (the "Danaher Offer"). Honeywell now announces that it has revised the terms of its cash offer for theentire issued and to be issued share capital of First Technology made by UBS onbehalf of Honeywell Acquisitions II on the basis set out in this announcement(the "Increased Offer") and which otherwise is on the terms and conditions setout in the offer document dated January 16, 2006 (the "Offer Document") Increased Offer The Increased Offer is made on the following basis: For each First Technology Share 385 pence in cash. The Increased Offer values the entire current issued share capital of FirstTechnology at approximately £290 million and represents a premium of: - approximately 89.7 per cent to the closing middle market price of 203 penceper First Technology Share on December 9, 2005, the last business day prior tothe commencement of the Offer Period; - approximately 7.5 per cent to the closing middle market price of 358 penceper First Technology Share on January 24, 2006, the business day of thisannouncement; and - approximately 16.7 per cent to the Danaher Offer of 330 pence per FirstTechnology Share. Honeywell Acquisitions II intends to seek a recommendation for the IncreasedOffer from the board of First Technology. The document containing the terms and conditions of the Increased Offer (the"Increased Offer Document") will be despatched to First Technology Shareholdersas soon as practicable together with additional Forms of Acceptance. Theexisting Forms of Acceptance remain valid for use in connection with theIncreased Offer. First Technology Shareholders who have already accepted theOffer need take no further action in order to receive the revised considerationpayable under the Increased Offer. Reasons for the Increased Offer The acquisition's strategic value remains compelling to Honeywell at theIncreased Offer price in light of the strong fit and realizable cost synergiesbetween its Life Safety division, which includes Zellweger Analytics, a globalleader in gas detection, and First Technology's gas sensing and gas detectionbusinesses. Honeywell's prior experience successfully integrating acquisitions,such as Zellweger and Novar in 2005, makes it confident that it can achievethese cost synergies. Furthermore, the opportunity for sales, channel anddistribution synergies between First Technology and Honeywell's $10 billionAutomation and Control Solutions business represents real potential upside toits valuation model. The transaction is expected to have an accretive impact onHoneywell's 2007 earnings per share. (1) Options and irrevocable undertakings Honeywell Acquisitions II has been granted options by each of Artemis InvestmentManagement Limited, Jupiter Asset Management Limited and UBS Global AssetManagement (UK) Limited to acquire, in aggregate, 10,787,076 First TechnologyShares representing approximately 14.3 per cent. of First Technology's existingissued share capital. As referred to below, such holdings of these FirstTechnology Shareholders comprise all or part of (as the case may be) theirholdings that are subject to irrevocable undertakings to accept the IncreasedOffer. In accordance with the terms of certain of the irrevocable undertakings toaccept the Offer, such irrevocable undertakings shall continue to apply inrespect of the Increased Offer and, accordingly, Honeywell Acquisitions II hasreceived irrevocable undertakings to accept the Increased Offer from thefollowing First Technology Shareholders: (a) the directors of First Technology, in respect of 333,215 First TechnologyShares, in aggregate, representing approximately 0.4 per cent. of the existingissued share capital of First Technology; and (b) Artemis Investment Management Limited, Jupiter Asset Management Limited,Morley Fund Management Limited, Sterling Investment Group Limited and UBS GlobalAsset Management (UK) Limited in respect of 22,067,093 First Technology Shares,in aggregate, representing approximately 29.3 per cent. of the existing issuedshare capital of First Technology. The irrevocable undertakings provided by Bruce D Atkinson relating to 82,073First Technology Shares, representing approximately 0.109 per cent. of theexisting issued share capital of First Technology, Patrick Burgess relating to7,500 First Technology Shares, representing approximately 0.010 per cent. of theexisting issued share capital of First Technology, Oliver G Burns relating to5,500 First Technology Shares, representing approximately 0.007 per cent. of theexisting issued share capital of First Technology, Michael G Firth relating to3,550 First Technology Shares, representing approximately 0.005 per cent. of theexisting issued share capital of First Technology, Cody Z Slater relating to15,000 First Technology Shares, representing approximately 0.020 per cent. ofthe existing issued share capital of First Technology, Dr Frederick J Westlakerelating to 15,000 First Technology Shares, representing approximately 0.020 percent. of the existing issued share capital of First Technology, Ralph R WhitneyJr. relating to 121,877 First Technology Shares, representing approximately0.162 per cent. of the existing issued share capital of First Technology, andJeff G Wood relating to 82,715 First Technology Shares, representingapproximately 0.110 per cent. of the existing issued share capital of FirstTechnology, will cease to be binding only if the Increased Offer lapses or iswithdrawn and will remain binding if a higher competing offer is made for FirstTechnology. The irrevocable undertaking provided by Morley Fund Management Limited relatingto 7,480,957 First Technology Shares, representing approximately 9.9 per cent.of the existing issued share capital of First Technology, will cease to bebinding if the Increased Offer lapses or is withdrawn or in the event of anannouncement of a competing offer representing at least a 5 per cent. premium tothe value of the Increased Offer and which is not exceeded by HoneywellAcquisitions II. The irrevocable undertaking provided by Sterling Investment Group Limitedrelating to 3,496,708 First Technology Shares, representing approximately 4.6per cent. of the existing issued share capital of First Technology, will ceaseto be binding if the Increased Offer lapses or is withdrawn or in the event ofan announcement of a competing offer representing at least a 10 per cent.premium to the value of the Increased Offer and which is not at least matched byHoneywell Acquisitions II. The irrevocable undertakings provided by Artemis Investment Management Limited,which Honeywell Acquisitions II has now been informed relates to 3,383,754 FirstTechnology Shares, representing approximately 4.5 per cent. of the existingissued share capital of First Technology, and Jupiter Asset Management Limitedrelating to 2,974,400 First Technology Shares, representing approximately 3.9per cent. of the existing issued share capital of First Technology, will ceaseto be binding if the Increased Offer lapses or is withdrawn or in the event ofan announcement of a competing offer representing at least a 10 per cent.premium to the value of the Increased Offer and which is not at least matched byHoneywell Acquisitions II. As referred to above, options to acquire FirstTechnology Shares have been granted to Honeywell Acquisitions II by ArtemisInvestment Management Limited and Jupiter Asset Management Limited from theholdings to which their respective irrevocable undertaking to accept theIncreased Offer relates, such options being granted in respect of 3,383,754First Technology Shares representing approximately 4.5 per cent. of the existingissued share capital of First Technology by Artemis Investment ManagementLimited and in respect of 3,074,400 First Technology Shares representingapproximately 4.1 per cent. of the existing issued share capital of FirstTechnology by Jupiter Asset Management Limited. The irrevocable undertaking provided by UBS Global Asset Management (UK) Limitedrelating to 4,731,274 First Technology Shares, representing approximately 6.3per cent. of the existing issued share capital of First Technology will cease tobe binding if the Increased Offer lapses or is withdrawn or in the event of anannouncement of a competing offer representing at least a 5 per cent. premium tothe value of the Increased Offer and which is not at least matched by HoneywellAcquisitions II. As referred to above, UBS Global Asset Management (UK) Limitedhas granted Honeywell Acquisitions II an option to acquire First TechnologyShares from the holdings to which its irrevocable undertaking to accept theIncreased Offer relates, such option being granted in respect of 4,328,922 FirstTechnology Shares representing approximately 5.7 per cent. of the existingissued share capital of First Technology. Acceptance levels and market purchases As at 3.00 p.m. (London time) on January 24, 2006, Honeywell Acquisitions II hadreceived valid acceptances of the Offer in respect of a total of 3,823,018 FirstTechnology Shares representing approximately 5.1 per cent. of First Technology'sexisting issued share capital. The level of acceptances of the Offer referred to above includes acceptancesreceived pursuant to irrevocable undertakings to accept the Offer from Oliver GBurns, in respect of his entire holding of 5,500 First Technology Sharesrepresenting approximately 0.007 per cent. of First Technology's existing issuedshare capital and from Sterling Investment Group Limited in respect of itsentire holding of 3,496,708 First Technology Shares representing approximately4.6 per cent. of First Technology's existing issued ordinary share capital. Noneof the acceptances of the Offer referred to above were received from personsacting in concert with Honeywell. As a result of purchases announced on January 17, 2005, Honeywell AcquisitionsII holds 3,172,497 First Technology Shares representing approximately 4.2 percent. of First Technology's existing issued ordinary share capital. Aggregating the options to acquire First Technology Shares and irrevocableundertakings to accept the Increased Offer referred to in this announcement withthe acceptances which Honeywell Acquisitions II has already received to itsOffer and the purchases made by Honeywell Acquisitions II referred to above,Honeywell Acquisitions II has acquired or contracted to acquire a total of25,993,615 First Technology Shares representing in aggregate approximately 34.5per cent. of First Technology's existing issued share capital. All First Technology Shares currently held by Honeywell Acquisitions II andFirst Technology Shares in respect of which a valid acceptance of the Offer hasbeen received may be counted towards satisfaction of the acceptance condition towhich the Increased Offer is subject. In addition all First Technology Shareswhich are subject to the irrevocable undertakings referred to above (but inrespect of which a valid acceptance has not yet been received) or which aresubject to the options referred to above may, when a valid acceptance isreceived in respect thereof or when such option is exercised (as the case maybe), be counted towards satisfaction of the acceptance condition to which theIncreased Offer is subject. Inducement Fee As was announced on December 19, 2005, First Technology and Honeywell haveentered into an inducement fee arrangement. Under that arrangement FirstTechnology is obliged to pay Honeywell an inducement fee equal to one per cent.of the issued (and, to the extent permitted under the Code, to be issued) sharecapital of First Technology, now calculated by reference to the Increased Offerprice (subject to upward adjustment by reference to any higher amount offered byHoneywell for First Technology), less any amounts payable as an inducement feeunder the terms of an inducement fee letter entered into by First Technologywith Hg in November 2005 (inclusive of any irrecoverable VAT), if the IncreasedOffer lapses. The inducement fee agreement contains certain other undertakings by FirstTechnology including First Technology's agreement not to solicit or initiate thesubmission of any proposal or offer from any person other than Honeywellrelating to a possible offer for or sale of the shares in First Technology (orthe sale of a material part of First Technology and its subsidiaries' businessestaken together) and to notify Honeywell of any such proposal or offer it mayreceive (other than from a person from whom it had already received a proposalfor a possible offer for its shares as at December 19, 2005). General Save as referred to in this announcement or in the Offer Document, neitherHoneywell Acquisitions II nor any person acting in concert with HoneywellAcquisitions II, had an interest in or a right to subscribe for relevantsecurities of First Technology or had any short position (whether conditional orabsolute and whether in the money or otherwise), including any short positionunder a derivative, any agreement to sell or any delivery obligation or right torequire another person to purchase or take delivery of any relevant securitiesof First Technology and neither Honeywell Acquisitions II nor any person actingin concert with Honeywell Acquisitions II had borrowed or lent relevantsecurities of First Technology, save for any borrowed First Technology Shareswhich have been either on-lent or sold. Terms defined in the Offer Document have the same meanings in this announcement,save where the context otherwise requires. The Increased Offer will be subject to the applicable requirements of the CityCode. The Increased Offer Document will be despatched to First TechnologyShareholders as soon as practicable. Enquiries Honeywell Tel: +32 2 728-2588Elma Peters UBS Tel: +44 (0) 20 7567-8000(Financial adviser and broker to Honeywell)Aidan CleggHugo Robinson Citigate Dewe Rogerson Tel: +44 (0) 20 7282-2920(Public relations adviser to Honeywell)Sarah Gestestner (1) The statement that the transaction will offer earnings accretion in 2007should not be taken to mean that First Technology's earnings per share in 2007or any other period will necessarily be greater or less than those of priorperiods UBS Limited ("UBS" or "UBS Investment Bank") is acting for Honeywell andHoneywell Acquisitions II in connection with the Increased Offer and no one elseand will not be responsible to anyone other than Honeywell or HoneywellAcquisitions II for providing the protections afforded to customers of UBS orfor providing advice in relation to the Increased Offer. This announcement does not constitute an offer to sell or an invitation topurchase or subscribe for any securities or the solicitation of an offer to buyor subscribe for any securities pursuant to the Increased Offer or otherwise.The Increased Offer will be made solely by the Increased Offer Document and theForm of Acceptance accompanying the Increased Offer Document, which will containthe full terms and conditions of the Increased Offer, including details of howthe Increased Offer may be accepted. The laws of the relevant jurisdictions may affect the availability of theIncreased Offer to persons who are not resident in the United Kingdom. Personswho are not resident in the United Kingdom or who are subject to laws of anyjurisdiction other than the United Kingdom, should inform themselves about, andobserve, any applicable requirements. Any person (including nominees, trusteesand custodians) who would, or otherwise intends to, forward this announcement,the Increased Offer Document and the Form of Acceptance or any accompanyingdocument to any jurisdiction outside the United Kingdom should refrain fromdoing so and seek appropriate professional advice before taking any action. The Increased Offer will not be made, directly or indirectly, in or into or byuse of the mails or any other means or instrumentality (including, withoutlimitation, telephonic or electronic) of interstate or foreign commerce of, orany facility of a national, state or other securities exchange of, Australia,Canada, Japan or the United States, and the Increased Offer will not be capableof acceptance by any such use, means, instrumentality or facility or from withinAustralia, Canada, Japan or the United States. Accordingly, copies of thisannouncement and formal documentation relating to the Increased Offer are notbeing, and must not be, directly or indirectly, mailed or otherwise forwarded,distributed in or into or from Australia, Canada, Japan or the United States andpersons receiving this announcement (including custodians, nominees andtrustees) must not distribute or send it into or from Australia, Canada, Japanor the United States. Doing so may render invalid any related purportedacceptance of the Increased Offer. These press-related materials are not anextension of the Increased Offer in the US. In the event that Honeywell extendsthe Increased Offer in the US at some future time, it will do so in satisfactionof the procedural and filing requirements of the US securities laws at thattime, to the extent applicable thereto. Dealing Disclosure Requirements Under the provisions of Rule 8.3 of the Code, if any person is, or becomes,"interested" (directly or indirectly) in one per cent. or more of any class of"relevant securities" of First Technology, all "dealings" in any "relevantsecurities" of that company (including by means of an option in respect of, or aderivative referenced to, any such "relevant securities") must be publiclydisclosed by no later than 3.30 pm (London time) on the London business dayfollowing the date of the relevant transaction. This requirement will continueuntil the date on which the Increased Offer becomes, or is declared,unconditional as to acceptances, lapses or is otherwise withdrawn or on whichthe "offer period" otherwise ends. If two or more persons act together pursuantto an agreement or understanding, whether formal or informal, to acquire an"interest" in "relevant securities" of First Technology, they will be deemed tobe a single person for the purposes of Rule 8.3. Under the provisions of Rule 8.1 of the Code, all "dealings" in "relevantsecurities" of First Technology by Honeywell or First Technology, or by any oftheir respective "associates", must be disclosed by no later than 12.00 noon(London time) on the London business day following the date of the relevanttransaction. A disclosure table, giving details of the companies in whose "relevantsecurities" "dealings" should be disclosed, and the number of such securities inissue, can be found on the Takeover Panel's website atwww.thetakeoverpanel.org.uk. "Interests in securities" arise, in summary, when a person has long economicexposure, whether conditional or absolute, to changes in the price ofsecurities. In particular, a person will be treated as having an "interest" byvirtue of the ownership or control of securities, or by virtue of any option inrespect of, or derivative referenced to, securities. Terms in quotation marks are defined in the Code. If you are in any doubt as towhether or not you are required to disclose a "dealing" under Rule 8, you shouldconsult the Panel. This information is provided by RNS The company news service from the London Stock Exchange