HYDG.L Regulatory News (HYDG)

8 Feb 2008 07:00

Hydrogen Group PLC08 February 2008 8 February 2008 Hydrogen Group plc Recommended proposals for the acquisition of Imprint Plc ("Imprint") Share buy back for the benefit of Enlarged Hydrogen Group shareholders On 20 December 2007, the Boards of Hydrogen Group plc ("Hydrogen") and Imprintannounced the terms of recommended proposals for Hydrogen to acquire the entireissued and to be issued share capital of Imprint. The Hydrogen board continues to believe that Hydrogen and Imprint are highlycomplementary. The Hydrogen board believes the Hydrogen Group as enlarged by theacquisition of Imprint ("Enlarged Hydrogen Group") would: • have a market leading proposition that would facilitate the attraction of new staff and be well positioned to enhance its international presence; • have a leading senior management team within the UK recruitment sector; • be one of the largest professional recruitment businesses in the London market in terms of headcount; • have an increased critical mass in the UK finance and accounting recruitment sector; • maintain a disciplined framework to grow further a broad range of market leading brands; • be well placed to benefit from the combination of a sound balance sheet and the involvement of 3i Quoted Private Equity Limited ("3i QPE") in growing its business; and • be cash generative during 2008 with limited capital expenditure requirements. In addition, the Hydrogen board anticipates that, within the Enlarged HydrogenGroup, there will be material potential for cost savings and synergies to berealised over time. In light of this, the Hydrogen board intends, in the 12 months following thecompletion of, and conditional on, the acquisition of 100 per cent. of Imprint,to implement a £7.5 million share buy back programme, equivalent to, at aHydrogen share price of 217.5 pence and assuming the partial cash alternative istaken up in full by Imprint shareholders, 8.1 per cent. of Hydrogen's fullydiluted share capital following the acquisition. Implementation of thisprogramme would be subject to market conditions, the requirements of thebusiness from time to time and the need to ensure that any share purchase isvalue enhancing. In the event that the Enlarged Hydrogen Group is not able toeffect such a proposed capital return through on-market share buy backs, theBoard of Hydrogen will consult with shareholders as to how, if appropriate, sucha capital return should be effected. The Hydrogen board, its Founder Shareholders and 3i QPE have a high level ofconfidence in the merits of the combination of Hydrogen and Imprint andaccordingly do not currently intend to participate in this on-market share buyback programme. Accordingly, any on-market purchases effected by Hydrogen arelikely to be predominantly of new shares issued to Imprint shareholders inconnection with the acquisition of Imprint. Assuming: (i) the proposed on-market share buy back was effected in full at a Hydrogen share price of 217.5 pence; (ii) that Hydrogen's proposed £20.5 million partial cash alternative is taken up in full by Imprint shareholders; and (iii) that all shareholders in the Enlarged Hydrogen Group other than the Founder Shareholders and 3i QPE participate in the buy back, the buy back would be equivalent to: (i) 27.6 per cent. of the Hydrogen shares owned by shareholders other than the Founder Shareholders and 3i QPE; and (ii) 60 pence per Hydrogen share (on a pro rata basis). On the basis of the same assumptions and assuming full conversion of theConvertible Notes to be issued to 3i QPE, the maximum percentage holdings of theFounder Shareholders and 3i QPE in the Enlarged Hydrogen Group would be 39.7 percent. and 37.1 per cent. respectively. The implementation of any on-market share buy back is conditional on, and wouldonly take place following, the acquisition of 100 per cent. of Imprint and wouldbe available to all Hydrogen shareholders. Therefore, the proposed Hydrogenshare buy back would have no impact on the consideration available to Imprintshareholders under the terms of the Hydrogen proposals. There can also be nocertainty that the share buy back programme will be implemented in full or inpart. The buy back would also be conditional upon the approval of Hydrogenshareholders that such a buy back would not trigger an obligation for either theFounder Shareholders or 3i QPE to make a mandatory offer under Rule 9 of theCity Code. Ian Temple, Executive Chairman of Hydrogen, said: "We firmly believe that the combined Hydrogen and Imprint businesses offer anexcellent strategic, operational and cultural fit. The combined Group willrepresent a market leading proposition, supported by an experienced managementteam and will be well placed to grow both in the UK and overseas. We aretherefore confident that this offer represents excellent value for both sets ofshareholders and that the ongoing benefits of the combination will enable us tomake this capital return. We are delighted at the strongly supportive responsewe have received from Imprint investors to our proposal and we look forward tocontinuing to work with them towards a successful completion of thistransaction." Enquiries: Hydrogen Group plc Telephone: 020 7845 4120Ian TempleTim Smeaton Dresdner Kleinwort (Financial adviser to Hydrogen) Telephone: 020 7623 8000Chris TrenemanRob Dawson Oriel Securities (NOMAD and broker to Hydrogen) Telephone: 020 7710 7600David ArchLuke Webster Hudson Sandler (Financial PR adviser to Hydrogen) Telephone: 020 7796 4133Andrew HayesKate Hough Note 1 Assuming Full take up of the Partial Cash alternative by Imprint shareholders, Hydrogen Issued share capital following acquisition of 100 per cent. of Imprint and 42,078,909conversion of the Convertible NotesOf which: Hydrogen shares owned by 3i QPE and Founder Shareholders 29,599,233 Hydrogen shares owned by other shareholders (A) 12,479,676 Number of Hydrogen shares purchased through a £7.5 million return at 217.5 pence 3,448,275As a percentage of Hydrogen shares owned by other shareholders (A) 27.6%£7.5 million per Hydrogen shares owned by other shareholders (A) 60 pence Dresdner Kleinwort Limited and Oriel Securities Limited, who are authorised andregulated in the United Kingdom by the Financial Services Authority, are actingexclusively for Hydrogen and for no one else in connection with the mattersreferred to in this announcement and will not be responsible to anyone otherthan Hydrogen for providing the protections afforded to each of their customersin connection with the matters referred to in this announcement. Dealing disclosure requirements Dealing disclosure requirements apply under the provisions of Rule 8.3 of theCity Code, if any person is, or becomes, "interested" (directly or indirectly)in 1 per cent. or more of any class of " relevant securities" of Imprint orHydrogen, all "dealings" in any "relevant securities" of Imprint or Hydrogen(including by means of an option in respect of, or a derivative referenced to,any such "relevant securities") must be publicly disclosed by no later than 3.30p.m. (London time) on the Business Day following the date of the relevanttransaction. This requirement will continue until the Effective Date (or suchlater date(s) as the Panel may specify). If two or more persons act togetherpursuant to an agreement or understanding, whether formal or informal, toacquire an "interest" in "relevant securities" of Imprint or Hydrogen, they willbe deemed to be a single person for the purposes of Rule 8.3 of the City Code. Under the provisions of Rule 8.1 of the City Code, all "dealings" in "relevantsecurities" of Imprint or Hydrogen by Imprint or Hydrogen, or by any of theirrespective "associates", must be disclosed by no later than 12.00 noon (Londontime) on the Business Day following the date of the relevant transaction. 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 Panel's website at www.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 City Code, which can also be foundon the Panel's website. If you are in any doubt as to the application of Rule 8of the Code to you, please contact an independent financial adviser authorisedunder the Financial Services and Markets Act 2000, consult the Panel's websiteat www.thetakeoverpanel.org.uk or contact the Panel on telephone number +44 (0)20 7382 9026; fax +44 (0) 20 7236 7005. Cautionary note regarding forward-looking statements This Announcement includes certain "forward-looking statements". Thesestatements are based on the respective current assumptions, assessments andexpectations of the management of Hydrogen and 3i QPE and are subject to risks,uncertainty and changes in circumstances. The forward-looking statementscontained herein include statements about the expected effects on Hydrogen ofthe Proposals. Forward-looking statements include, without limitation,statements typically containing words such as "intend", " expect", "anticipate","target", "estimate", "plan", "goal", "believe", "will", "may", "should","would", "could" and words of similar meaning. By their nature, forward-lookingstatements involve risk and uncertainty because they relate to events and dependon circumstances that will occur in the future. There are a number of factorsthat could cause actual results and developments to differ materially from thoseexpressed or implied by such forward-looking statements. These factors include,but are not limited to, changes in economic conditions, changes in the level ofcapital investment, success of business and operating initiatives andrestructuring objectives, customers' strategies and stability, changes in theregulatory environment, fluctuations in interest and exchange rates, the outcomeof litigation, government actions and natural phenomena such as floods,earthquakes and hurricanes. Other unknown or unpredictable factors could causeactual results to differ materially from those in the forward-lookingstatements. Undue reliance should not therefore be placed on the forward-lookingstatements. Neither of Hydrogen nor 3i QPE undertakes any obligation to updatepublicly or revise forward-looking statements, whether as a result of newinformation, future events or otherwise, except to the extent legally required. This information is provided by RNS The company news service from the London Stock Exchange