HYDG.L Regulatory News (HYDG)

15 Feb 2008 07:01

Imprint Plc15 February 2008 Not for release, publication or distribution, in whole or in part, in, into or from the United States, Canada, Australia or Japan Imprint Plc ("Imprint" or the "Company") Offer Update Introduction On 8 February 2008, the Executive of the Panel on Takeovers and Mergersannounced that, in accordance with Rule 32.5 of the City Code, it hadestablished an auction procedure in order to provide an orderly framework forthe resolution of the competitive situation in relation to Imprint. At theconclusion of the auction process on 13 February 2008, revised proposals hadbeen announced by both Hydrogen Group PLC ("Hydrogen") and by OPD Group PLC("OPD") (respectively the "Revised Hydrogen Scheme" and the "Revised OPDOffer"). In this announcement, the board of Imprint (the "Imprint Board") setsout its views on the revised proposals, including details of its intendedrecommendation to Imprint shareholders. Summary of the Proposals Set out below is a summary comparison of the Revised Hydrogen Scheme and theRevised OPD Offer (together the "Proposals"), based on the closing mid marketprices of a Hydrogen share (216 pence) and an OPD share (185 pence) on 14February 2008, the last practicable date prior to this announcement. Furtherdetails of the Revised Hydrogen Scheme and the Revised OPD Offer were containedin the separate announcements made by Hydrogen and OPD respectively on 13February 2008: PROPOSALS Revised Revised Hydrogen Scheme OPD Offer (i) Basic Offer Share element 99.58p 66.07p Cash element 1.00p 36.75p -------------- -------------Total value per Imprint share 100.58p 102.82p -------------- ------------- (ii) Partial Cash Alternative* Share element 13.60p n/a Cash element 95.98p n/a -------------- -------------Total value per Imprint share 109.58p n/a -------------- ------------- (iii) Full Cash Alternative n/a 93.00p -------------- -------------Total value per Imprint share n/a 93.00p -------------- ------------- * The aggregate value of the cash and share elements of Hydrogen's Increased Partial Cash Alternative has been calculated on the basis of a full take up of the Hydrogen Increased Partial Cash Alternative by Imprint shareholders. Under the terms of the Revised Hydrogen Scheme, Imprint shareholders willreceive a second interim dividend of 1 pence per Imprint share (the "SecondInterim Dividend") payable by Imprint subject to the Revised Hydrogen Schemebecoming effective. The value of the Second Interim Dividend has been includedin both the Hydrogen Basic Offer and the Hydrogen Partial Cash Alternative inthe comparison shown above. The aggregate amount of cash payable pursuant to the Hydrogen Increased PartialCash Alternative may not exceed £37.3 million. Accordingly, the extent to whichelections for the Increased Partial Cash Alternative are satisfied will bedependent upon the extent to which elections for the Increased Partial CashAlternative are not made by other Imprint shareholders. If such maximum cashamount is insufficient to satisfy all elections for the Increased Partial CashAlternative, those elections will be scaled down as nearly as is practicable ona pro rata basis to the applications, with the balance of entitlements beingsatisfied through the Hydrogen Basic Offer. If less than 86.4 per cent ofImprint shareholders elect to receive the Increased Partial Cash Alternative infull, the full cash election can be satisfied and accordingly each such Imprintshareholder electing for the Increased Partial Cash Alternative will receive 110pence in cash per Imprint share. Imprint shareholders accepting the Revised OPD Offer may elect to receive newOPD shares in lieu of the cash to which they would otherwise be entitled. Thesatisfaction of elections made by accepting Imprint shareholders for new OPDshares in lieu of cash will depend on the extent to which other acceptingImprint shareholders make equal and opposite elections for cash. To the extentthat elections for new OPD shares cannot be satisfied in full, they will bescaled down on a pro rata basis. The Recommendation The Imprint Board, which has been so advised by Altium, regards (i) the RevisedHydrogen Scheme as superior to the Revised OPD Offer and (ii) the Hydrogen BasicOffer and Increased Partial Cash Alternative to be fair and reasonable.Accordingly, the Imprint Board unanimously recommends that Imprint shareholdersvote in favour of the Revised Hydrogen Scheme and do not accept the Revised OPDOffer. In providing its advice, Altium has taken into account the ImprintBoard's commercial assessment of the Revised Hydrogen Scheme and the Revised OPDOffer. Imprint shareholders who have already accepted the original OPD offer arerecommended to withdraw their acceptances. Background to and reasons for the Recommendation On 7 November 2007 the Imprint Board recommended that Imprint shareholdersaccept the original OPD offer. On 20 December 2007 the Imprint Board took thedecision to recommend that Imprint shareholders vote in favour of the HydrogenScheme, which at that time offered a significant headline premium over theconsideration available under the original OPD offer. In addition, it providedImprint shareholders with the opportunity to receive a significant amount ofconsideration in cash in lieu of new Hydrogen shares. The Imprint Board was pleased to note that both OPD and Hydrogen revised theterms of their Proposals during the recent auction process, most notably byincreasing the proportion of cash consideration available to Imprintshareholders. The Imprint Board has now fully considered both of the Proposals. The Imprint Board believes that, following completion of the disposal of itsLondon based WoodHamill and Imprint Search & Selection branded businesses, theImprint group is on a solid financial footing and that its prospects remainsound, albeit that ongoing growth will have to be driven from a smaller base.However, the Imprint Board also believes that there is the potential foradditional value to be created by combining the Imprint group with eitherHydrogen or OPD and recognises the opportunity for Imprint shareholders toparticipate in such value creation through both the Revised Hydrogen Scheme andthe Revised OPD Offer. However, the Imprint Board also recognises that the prevailing economicenvironment has created uncertainty as to the short term prospects of therecruitment sector and that such uncertainty has impacted, and is likely in theshort term to continue to impact, sector valuations and lead to a degree ofvolatility. The Imprint Board, therefore, understands that the ability toachieve a certain cash realisation is likely to be attractive to many Imprintshareholders and believes that, in light of the revisions made to their originalproposals, both OPD and Hydrogen have also concluded that, in the current marketenvironment, cash consideration is likely to be a significant factor. Both the Revised Hydrogen Scheme and the Revised OPD Offer present Imprintshareholders with the opportunity to achieve a significant cash realisation.However, in making its decision as to a recommendation, the Imprint Board notesthat the Increased Partial Cash Alternative component of the Revised HydrogenScheme provides the highest guaranteed cash amount (96 pence per Imprint shareincluding the Second Interim Dividend). In addition, it provides Imprintshareholders with the potential, dependent upon elections made by other Imprintshareholders, to receive a cash amount (111 pence per Imprint share includingthe Second Interim Dividend) significantly in excess of that available under thefull cash alternative component of the Revised OPD Offer (93 pence per Imprintshare). The Imprint Board believes that, in light of this and on balance, the RevisedHydrogen Scheme is superior to the Revised OPD Offer. Consequences of votes and acceptances Imprint shareholders should note that, if they do not vote in favour of theRevised Hydrogen Scheme in sufficient numbers at the Court meeting (the "CourtMeeting") and the Imprint extraordinary general meeting (the "Imprint EGM")convened for 29 February 2008 the Revised Hydrogen Scheme will lapse. The Imprint Board notes that it is possible for Imprint shareholders both tovote in favour of the Revised Hydrogen Scheme at the Court Meeting and theresolution to be proposed at the Imprint EGM and to accept the Revised OPDOffer. However, if a sufficient number of Imprint shareholders were to take thiscourse of action, it is possible that the Revised OPD Offer could become or bedeclared unconditional before the Revised Hydrogen Scheme could becomeeffective. As the Imprint Board believes that the Revised Hydrogen Scheme is thesuperior proposal, they do not believe that this result would be in the bestinterests of Imprint shareholders. As a result, in order to maximise the likelihood of the Revised Hydrogen Schemebeing successful, the Imprint Board believes that Imprint shareholders shouldvote in favour of the Revised Hydrogen Scheme at the Court Meeting and theresolution to be proposed at the Imprint EGM and should not accept the RevisedOPD Offer. Enquiries: ImprintJohn Gordon (Chairman) Telephone: 07860 622 631Rob Thesiger (Chief Executive Officer) Telephone: 020 7438 3100Colin Webster (Chief Financial Officer) Altium (Rule 3 adviser and broker to Imprint) Telephone: 020 7484 4040Ben ThorneTim Richardson Maitland (PR adviser to Imprint) Telephone: 020 7379 5151Neil BennettTom Siveyer The Imprint Board accepts responsibility for the information contained in this announcement. To the best of the knowledge and belief of the Imprint Board (which has taken all reasonable care to ensure that such is the case), the information contained in this announcement is in accordance with the facts and does not omit anything likely to affect the import of such information. Altium Capital Limited, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for Imprint and for no-one else in connection with the Proposals and will not be responsible to anyone other than Imprint for providing the protections afforded to customers of Altium Capital Limited or for providing advice in relation thereto or any matters referred to herein. The release, publication or distribution of this announcement in jurisdictions other than the United Kingdom may be restricted by law and therefore persons in such jurisdictions into which this announcement is released, published or distributed should inform themselves about, and observe, such restrictions. Any failure to comply with the restrictions may constitute a violation of the securities laws of any such jurisdiction. This information is provided by RNS The company news service from the London Stock Exchange