JD Sports Regulatory News (JD.)

11 May 2005 07:14

Pentland Group PLC11 May 2005 Not for release, publication or distribution in or into the United States,Canada, Australia or Japan. FOR IMMEDIATE RELEASE 11 May 2005 CASH OFFER BY GOLDMAN SACHS INTERNATIONAL ON BEHALF OF MANCHESTER SQUARE ENTERPRISES LIMITED FOR THE JOHN DAVID GROUP PLC Summary The board of Manchester Square Enterprises Limited ("Manchester") announces theterms of a cash offer (the "Offer") to be made by Goldman Sachs International onbehalf of Manchester for the entire issued and to be issued ordinary sharecapital of The John David Group Plc ("JD"). • Manchester is a wholly owned subsidiary of Pentland Group Plc.Manchester currently holds 5,405,406 JD Shares representing approximately 11 percent. of the issued share capital of JD. • The Offer will be 211.2 pence in cash for each JD Share valuingthe whole of the currently issued share capital of JD at approximately£99,848,238. • The Offer represents a discount of approximately 8.6 per cent,below the Closing Price of 231 pence on 10 May 2005, being the last practicablebusiness day prior to this announcement. • Manchester owns 5,405,406 JD Shares, representing approximately11 per cent. of the issued share capital of JD. Manchester has receivedirrevocable undertakings to accept or procure the acceptance of the Offer fromcertain JD Shareholders in respect of 21,127,939 JD Shares, in aggregate,representing approximately 45 per cent, of the issued share capital of JD.Accordingly, Manchester now owns or has irrevocable undertakings to accept theOffer in respect of 26,533,345 JD Shares in aggregate, representingapproximately 56 per cent of the existing issued share capital of JD. • It is, therefore, anticipated that the Offer shall be declaredunconditional as to acceptances later today. • In light of the discount to the market price represented by theOffer, and the positive future prospects that Manchester believes exist for JD,Manchester does not anticipate that a significant number of JD Shareholders willaccept the Offer. • JD Shareholders on the register of members at the relevantrecord date shall remain entitled to the 2005 Annual Dividend. • The Offer Document will be posted later today. Commenting on the Offer, Stephen Rubin, Chairman of Pentland Group Plc said: "JD is a business that we know well, run by a management team in which we haveevery confidence. It is positioned in a fast growing segment of the UK retailindustry and we are delighted by this opportunity to become a substantial, longterm and supportive shareholder. We would be pleased to purchase JD Shares from anyone wishing to accept theOffer. However, given the view we have of JD's future prospects, and thediscount to the market price represented by the Offer, we are not expecting ahigh level of acceptances. Indeed, we look forward to sharing in the future ofJD alongside other JD Shareholders who, like us, have faith in JD's future." Enquiries: Hogarth Partnership Limited (for Manchester) 020 7357 9477 John OlsenGeorgina Briscoe Goldman Sachs International 020 7774 1000 Guy SlimmonDaniel Yealland Manchester Square Enterprises Limited 020 7535 3800 Tim HockingsBarry Mosheim This summary should be read in conjunction with the full text of the followingannouncement. Appendix I sets out certain terms and conditions to which theOffer will be subject. Defined terms have the meanings set out in Appendix II. This announcement does not constitute an offer or an invitation to purchase orsubscribe for any securities. The Offer Document, containing the full terms and conditions of the Offer,together with the Form of the Acceptance, will be posted to JD Shareholders and,for information purposes only, to JD Share Option Holders today. The availability of the Offer to persons not resident in the UK may be affectedby the laws of the relevant jurisdiction in which they are resident. Persons whoare not resident in the UK should obtain advice and observe any applicablerequirements. The Offer is not being made, directly or indirectly, in or intothe United States, Canada, Australia or Japan, or by use of the mails, or by anymeans or instrumentality (including, without limitation, facsimile transmission,electronic mail, telex or telephone) of interstate or foreign commerce, or byany facility of a national securities exchange, of the United States, Canada,Australia or Japan, and the Offer will not be capable of acceptance by any suchuse, means, instrumentality or facility from or within the United States,Canada, Australia or Japan. Accordingly, copies of the Offer Document and theForm of Acceptance are not being, and must not be, mailed or otherwisedistributed or sent in, into or from the United States, Canada, Australia orJapan and persons receiving such documents (including custodians, nominees andtrustees) must not distribute or send them in, into or from the United States,Canada, Australia or Japan as doing so will make invalid any purportedacceptance of the Offer by persons in any such jurisdiction. Goldman Sachs International is authorised and regulated by the FinancialServices Authority in respect of regulated activities. Goldman SachsInternational is acting exclusively for the Pentland Group and no one else inconnection with the Offer and will not be responsible to anyone other than thePentland Group for providing the protections afforded to clients of GoldmanSachs International or for providing advice in relation to the Offer. CASH OFFER BY GOLDMAN SACHS INTERNATIONAL ON BEHALF OF MANCHESTER SQUARE ENTERPRISES LIMITED FOR THE JOHN DAVID GROUP PLC Introduction The board of Manchester Square Enterprises Limited ("Manchester") announces theterms of a cash offer (the "Offer") to be made by Goldman Sachs International onbehalf of Manchester for the entire issued and to be issued ordinary sharecapital of The John David Group Plc ("JD"). The Offer values the entirecurrently issued share capital of JD at approximately £99,848,238 and each JDShare at 211.2 pence. Manchester is a wholly owned subsidiary of Pentland Group Plc. Manchestercurrently holds 5,405,406 JD Shares representing approximately 11 per cent. ofthe issued share capital of JD. The Offer The Offer, which will be subject to the conditions and further terms set out inAppendix I to this announcement and set out in the Offer Document and, inrespect of certificated JD Shares, the Form of Acceptance, will be made on thefollowing basis: for each JD Share 211.2 pence in cash The Offer represents a discount of approximately 8.6 per cent, below the ClosingPrice of 231 pence on 10 May 2005, being the latest practicable business dayprior to this announcement. The Offer is to be financed out of the Pentland Group's existing cash resources. JD Shareholders on the register of members at the relevant record date shallremain entitled to the 2005 Annual Dividend. The Offer Document will be posted later today. Any fractions of a penny due under the Offer will be rounded up to the nearestpenny. The Offer is being made to all shareholders pursuant to the Code. WhilstManchester is obliged to make such an Offer to all JD Shareholders, in light ofthe discount to the market price represented by the Offer and the positivefuture prospects that Manchester believes exist for JD, it does not anticipatethat a significant number of JD Shareholders will accept the Offer. Undertakings to accept the Offer Manchester owns 5,405,406 JD Shares, representing approximately 11 per cent. ofthe issued share capital of JD. Manchester has received irrevocable undertakingsto accept (or procure the acceptance of) the Offer from John Wardle, David Makinand their related trusts (who are acting in concert with Manchester under theprovisions of the City Code) in respect of 21,127,939 JD Shares, in aggregate,representing approximately 45 per cent. of the existing issued share capital ofJD. These undertakings will remain binding even in the event of any competingthird party offer being made for JD. Accordingly, Manchester now owns or has irrevocable undertakings to accept theOffer in respect of 26,533,345 JD Shares in aggregate, representingapproximately 56 per cent. of the existing issued share capital of JD. It is,therefore, anticipated that the Offer will be declared unconditional as toacceptances later today. Background to and reasons for the Offer Manchester acquired its existing shareholding in JD from John Wardle, one of thefounder members of JD, in July 2004. Mr Wardle and his related trusts now wishto sell their remaining JD Shares to Manchester. David Makin, the other foundermember of JD, and his related trusts also wish to sell their entire holding ofJD Shares to Manchester. Pursuant to the City Code, Manchester is extending itsoffer to purchase JD Shares from David Makin, John Wardle and their relatedtrusts to all JD Shareholders. Manchester has confidence in the future prospects of the business of JD and inthe existing management team. JD is positioned in one of the fastest growingsegments in the UK retail industry (leisure and personal goods) and Manchesteris demonstrating its confidence in JD's strategy and positioning through theOffer it is making today. Manchester currently intends that the listing of JD on the London Stock Exchangewill be maintained and that the business will continue to be run on a whollyindependent basis with no change to the existing operating strategy. Information on the Pentland Group Manchester is a wholly owned subsidiary of Pentland Group Plc. Pentland GroupPlc is a European brand management holding company whose principal subsidiariestrade in the sports, fashion and outdoor markets. In the year ended 31 December 2004, Pentland Group Plc made an operating profitbefore goodwill amortisation of £15.4 million and a profit before tax of £20.0million, and as at 31 December 2004, had net assets of £269.3 million. For theyear ended 31 December 2004 turnover was £320.1 million. Information on JD JD positions itself in the sports fashion retail market selling shoes andapparel. It was set up by its founders, John Wardle and David Makin, in 1981.Its shops principally trade under the name of JD Sports. JD floated on the StockExchange in 1996. In 2002, the acquisition of First Sport Limited approximatelydoubled the JD Group's size. In December 2004, JD acquired the fashion retailer,R D Scott ("Scotts"). The JD Group is centrally managed from its head office in Bury, Lancashire.Following the Scotts acquisition, there are more than 300 JD outlets in the UKwith an increasing focus on branded fashion footwear and apparel. In the year ended 31 January 2004, JD made an operating profit before operatingexceptionals and goodwill amortisation of £10.5 million and a profit before taxof £2.1 million, and as at 31 January 2004, had net assets of £57.3 million. Forthe year ended 31 January 2004 turnover was £458.1 million. Net debt at the endof the period was £51.1 million. JD Management and Employees Following the Offer becoming, or being declared, unconditional in all respects,it is anticipated that David Makin and John Wardle will resign from the Board ofJD. Manchester's assumption is that the executive Directors of JD, being BarryBown and Brian Small, will continue as Directors of JD, as will Colin Archer andChristopher Bird, the two remaining non-executive Directors, all under theexecutive chairmanship of Peter Cowgill. The Manchester Board and the Pentland Group Plc Board have confirmed that,following the Offer becoming or being declared unconditional in all respects andif Manchester acquires the entire issued share capital of JD, the existingemployment rights, including pension rights, of the employees of JD would befully safeguarded. JD Share Option Schemes The Offer will extend to any JD Share unconditionally allotted or issuedpursuant to the exercise of options under the JD Share Option Schemes while theOffer remains open for acceptance. Manchester will make appropriate proposals toJD Share Option Holders in respect of options which remain unexercised once theOffer becomes, or is declared, unconditional in all respects. Disclosure of Interests in JD Save for Manchester's holding of 5,405,406 JD Shares and the irrevocableundertakings to accept the Offer summarised above, neither Manchester nor anyperson acting in concert with Manchester, owns or controls any JD Shares or hasany options (including traded options) in respect of, or any outstandingderivatives referenced to, any such shares. Save for Manchester's holding of 5,405,406 JD Shares and the irrevocableundertakings to accept the Offer summarised above, neither Manchester nor anyperson acting in concert with Manchester, has any arrangement in relation to JDShares, or any securities convertible or exchangeable into JD Shares or options(including traded options) in respect of, or derivatives referenced to, any suchshares. For these purposes, "arrangement" includes an indemnity or optionarrangement, any agreement or understanding, formal or informal, of whatevernature, relating to JD Shares which may be an inducement to deal or refrain fromdealing in such shares. Further Information The Offer Document, containing the full terms and conditions of the Offer,together with the Form of Acceptance, will be posted to JD Shareholders and, forinformation purposes only, to JD Share Option Holders today. This announcement does not constitute an offer or an invitation to purchase orsubscribe for any securities. Certain of the terms and conditions of the Offer are set out in Appendix I tothis announcement, all of which forms part of, and should be read in conjunctionwith, this announcement. Defined terms have the meanings set out in Appendix IIto this announcement, which also forms part of and should be read in conjunctionwith, this announcement. Enquiries: Hogarth Partnership Limited (for Manchester) 020 7357 9477 John OlsenGeorgina Brisco Goldman Sachs International 020 7774 1000 Guy SlimmonDaniel Yealland Manchester Square Enterprises Limited 020 7535 3800 Tim HockingsBarry Mosheim The availability of the Offer to persons not resident in the UK may be affectedby the laws of the relevant jurisdiction in which they are resident. Persons whoare not resident in the UK should obtain advice and observe any applicablerequirements. The Offer is not being made directly or indirectly, in or into theUnited States, Canada, Australia or Japan, or by use of the mails, or by anymeans or instrumentality (including, without limitation, facsimile transmission,electronic mail or telephone) of interstate or foreign commerce, or by anyfacility of a national securities exchange, of the United States, Canada,Australia or Japan, and the Offer will not be capable of acceptance by any suchuse, means, instrumentality or facility from or within the United States,Canada, Australia or Japan. Accordingly, copies of the Offer Document and theForm of Acceptance are not being, and must not be, mailed or otherwisedistributed or sent in, into or from the United States, Canada, Australia orJapan and persons receiving such documents (including custodians, nominees andtrustees) must not distribute or send them in, into or from the United States,Canada, Australia or Japan as doing so will make invalid any purportedacceptance of the Offer by persons in any such jurisdiction. Goldman Sachs International is authorised and regulated by the FinancialServices Authority in respect of regulated activities. Goldman SachsInternational is acting exclusively for the Pentland Group and no one else inconnection with the Offer and will not be responsible to anyone other than thePentland Group for providing the protections afforded to clients of GoldmanSachs International or for providing advice in relation to the Offer. APPENDIX ICONDITIONS OF THE OFFER The Offer is subject to the following conditions: 1 by no later than 3.00pm (London Time) on 1 June 2005 (or suchlater time(s) and/or date(s) as Manchester may, with the consent of the Panel orin accordance with the rules of the City Code, decide) Manchester, together withany member of the Pentland Group, having acquired or agreed to acquire (whetherpursuant to the Offer or otherwise) JD Shares which, taken together with the JDShares owned by Manchester, carry in aggregate more than 50 per cent, of thevoting rights then normally exercisable at a general meeting of JD. For the purposes of this condition any JD Shares which have been unconditionallyallotted but not issued before the Offer becomes or is declared unconditional asto acceptances, whether pursuant to the exercise of any outstanding subscriptionor conversion rights or otherwise, shall be deemed to carry the voting rightsthey will carry upon their being entered in the register of members of JD. 2 the Office of Fair Trading in the United Kingdom indicating, interms satisfactory to Manchester, that: (a) it does not believe that the proposed acquisition of JD byManchester creates a relevant merger situation within the meaning of Section 23of the Enterprise Act 2002; or (b) it has decided not to refer to the proposed acquisition of JDby Manchester or any part of it to the Competition Commission, eitherunconditionally or subject to the giving of undertakings acceptable toManchester; 3 no undertakings or assurances being sought from Manchester, anymember of the Pentland Group or any member of the JD Group by the Secretary ofState for Trade and Industry or any other Third Party (as defined in condition 4below), except on terms satisfactory to Manchester; 4 no central bank, government or governmental, quasi-governmental,supranational, statutory, regulatory or investigative body, trade agency,professional association, institution, court or any statutory body or personwhatsoever in any jurisdiction (each a "Third Party") having instituted,implemented or threatened, or having announced its intention to institute orimplement any action, proceeding, suit, investigation, enquiry or reference orhaving made, proposed or enacted any statute, regulation, decision or order, orhaving taken any steps or required any action to be taken or information to beprovided, or having done anything which would, or might reasonably be expectedto: (a) make the Offer or its implementation or the acquisition orproposed acquisition by Manchester or any of its subsidiaries or subsidiaryundertakings or associated companies (including any joint venture, partnership,firm or company in which any member of the Pentland Group (aggregating theirinterests) is substantially interested) or any company in which any such memberhas a substantial interest (the "Wider Offeror Group") of any or all JD Sharesvoid, unenforceable or illegal under the laws of any jurisdiction, or restrict,prohibit or otherwise, directly or indirectly, delay or otherwise interfere withthe implementation of, or impose additional conditions or obligations which areadverse with respect to, or otherwise challenge, the Offer or the acquisition ofany or all JD Shares or control of JD by the Pentland Group; (b) require, prevent or delay the divestiture or alter the termsenvisaged for the divestiture by any member of the Wider Offeror Group or by JDor any of its subsidiaries or subsidiary undertakings or associated companies (including any joint venture, partnership, firm or company in which anymember of the JD Group (aggregating their interests) is substantiallyinterested) or any company in which any such member has a substantial interest(the "Wider JD Group") of all or any material portion of their respectivebusinesses, assets or property or any shares or other securities (or equivalent)or impose any material limitation on the ability of any of them to conduct theirrespective businesses (or any of them) or to own their respective assets orproperty or any part of them, in each such case the result of which would have amaterial adverse effect on the JD Group and/or the Pentland Group (as the casemay be) taken as a whole; (c) impose any limitation on the ability of any member of theWider Offeror Group to exercise effectively, directly or indirectly all or anyrights of ownership in respect of JD Shares or loans or securities convertibleinto shares or other securities (or the equivalent) in any member of the WiderJD Group or to exercise voting or management control over, JD or (to the extentJD has such rights) in any member of the Wider JD Group or on the ability of anymember of the Wider JD Group to hold or to exercise effectively, directly orindirectly, rights of ownership of shares (or the equivalent) in, or to exerciserights of control over any business carried out by a member of the Wider JDGroup; (d) save pursuant to the Offer or Part XIIIA of the Act, requireany member of the Wider Offeror Group or of the Wider JD Group to offer toacquire any shares or other securities (or the equivalent) or interest in, orany asset owned by, any member of the Wider JD Group owned by any third party; (e) impose any limitation on the ability of any member of theWider JD Group or the Wider Offeror Group to integrate or co-ordinate itsbusiness, or any part of it, with any other members of the Wider Offeror Groupand/or Wider JD Group in a manner which is material in the context of the WiderOfferor Group or the Wider JD Group (as the case may be) taken as a whole; (f) result in any member of the Wider JD Group or the WiderOfferor Group ceasing to be able to carry on business under any name under whichit presently does so in a manner which is material in the context of the WiderOfferor Group or the Wider JD Group (as the case may be) taken as a whole; or (g) otherwise materially and adversely affect the business,assets, liabilities, profits, prospects, financial or trading position of anymember of the Wider JD Group or the Wider Offeror Group, and all applicable waiting and other time periods during which any Third Partycould decide to take, institute, implement or threaten any action, proceeding,suit, investigation, enquiry or reference or any other steps under the laws ofany jurisdiction in respect of the Offer or the acquisition or proposedacquisition of any JD Shares having expired, lapsed or been terminated; 5 all necessary notifications and filings having been made inconnection with the Offer and the proposed acquisition by Manchester of JD andall necessary waiting and other time periods (including any extension(s)thereof) under any applicable legislation or regulation of any jurisdiction andthe proposed acquisition by Manchester of JD having expired, lapsed or beenterminated (as appropriate) and all applicable statutory or regulatoryobligations in any jurisdiction having been complied with in connection with theOffer or its implementation and/or the acquisition or proposed acquisition byany member of the Wider Offeror Group of any shares or other securities (or theequivalent thereof) in, or control of JD or any member of the Wider JD Group orany of the assets of any such member and no notice of any intention to revokeany of the same having been received, in each case as may be necessary inconnection with the Offer or the acquisition by any member of the Wider OfferorGroup of any shares in, or control of, JD, and all authorisations, orders,recognitions, grants, consents, clearances, confirmations, certificates,licences, permissions and approvals ("Authorisations") necessary or appropriatefor or in respect of the Offer or the proposed acquisition of any securities in,or control of, JD by any member of the Wider Offeror Group or in relation to theaffairs of any member of the Wider JD Group having been obtained in terms and ina form satisfactory to Manchester from all appropriate Third Parties or personswith whom any member of the Wider JD Group has entered into contractualarrangements and all such Authorisations necessary or appropriate to carry onthe business of any member of the Wider JD Group, remaining in full force andeffect at the time the Offer becomes otherwise unconditional and there being nonotice or intimation of any intention to revoke or amend or not to renew thesame at the time at which the Offer becomes otherwise unconditional and allnecessary statutory or regulatory obligations in any jurisdiction having beencomplied with; 6 there being no provision of any agreement, arrangement, lease,licence, permit or other instrument to which any member of the Wider JD Group orany partnership or company in which any member of the Wider JD Group isinterested (an "Associate") is a party or by or to which any such member orAssociate or any of their respective assets may be bound, entitled or subjectand which, in consequence of the Offer or the proposed acquisition of JD Sharesby Manchester or any member of the Wider Offeror Group could result in (to anextent in each case which is material in the context of the JD Group taken as awhole): (a) any monies borrowed by, or any indebtedness or liability(actual or contingent) of, or grant available to any member of the Wider JDGroup becoming repayable or capable of being declared repayable immediately orprior to their or its stated maturity or repayment date in such agreement,arrangement, lease, licence, permit or instrument, or the ability of any suchmember to borrow monies to incur any indebtedness being withdrawn or inhibitedor being capable of becoming or being withdrawn or materially inhibited; (b) the creation or enforcement of any mortgage, charge or othersecurity interest, wherever existing or having arisen over the whole or any partof the business, property or assets of any member of the Wider JD Group or anysuch mortgage, charge or other security interest (whenever arising or havingarisen) becoming enforceable; (c) any such agreement, arrangement, lease, licence, permit orother instrument or the rights, liabilities, obligations or interests thereunderbeing terminated or adversely modified or affected or any onerous obligation orliability arising or any adverse action being taken thereunder; (d) any assets or interests of any member of the Wider JD Groupbeing or falling to be disposed of or charged or ceasing to be available to anymember of the Wider JD Group or any right arising under which any such asset orinterest could be required to be disposed of or charged or could cease to beavailable to any member of the Wider JD Group otherwise than in the ordinarycourse of business; (e) the rights, liabilities, obligations or interests of anymember of the Wider JD Group under any such arrangement, agreement, lease,licence, permit or other instrument in or with any person, firm or body or thebusiness of any member of the Wider JD Group with any person, firm or body (orany arrangements relating to such interests or business) being terminated oradversely modified or affected; (f) any such member of the Wider JD Group ceasing to be able tocarry on business under any name under which it currently does so; (g) the respective value or financial or trading position, profitsor prospects of any such member of the Wider JD Group being prejudiced oradversely affected; or (h) the creation of any liability, actual or contingent, by anymember of the Wider JD Group otherwise than in the ordinary course of business, and no event having occurred which, under any provision of any agreement,arrangement, lease, licence, permit or other instrument to which any member ofthe Wider JD Group is a party or by or to which any such member or any of itsassets may be bound, entitled or subject, is reasonably likely to result in anyof the events or circumstances as are referred to in sub-paragraphs (a) to (h)of this paragraph 6; 7 no member of the Wider JD Group having since 31 January 2004,being the date to which the last published audited report and accounts of JDwere made up prior to the date hereof, save as disclosed in such report andaccounts or as otherwise fairly disclosed in writing to the Pentland Group orits advisers prior to the time of the Offer: (a) issued or agreed to issue or authorised or proposed orannounced its intention to authorise or propose the issue of additional sharesof any class, or securities convertible into or exchangeable for, or rights,warrants or options to subscribe for or acquire, any such shares or convertiblesecurities (save for issues to JD or wholly owned subsidiaries of JD, or uponany exercise of options granted before the time of this announcement under theJD Share Option Schemes); (b) other than to another member of the JD Group, recommended,declared, paid or made or proposed to recommend, declare, pay or make any bonus,dividend or other distribution whether payable in cash or otherwise; (c) save for transactions between two or more members of the JDGroup ("intra-JD Group transactions") made or authorised, proposed or announcedits intention to authorise or propose any change to its loan capital; (d) save for intra-JD Group transactions and transactions in theordinary course of business, implemented, authorised, proposed or announced itsintention to propose any merger, demerger, reconstruction, amalgamation, scheme,commitment or acquisition or disposal of assets or shares (or the equivalentthereof) in any undertaking or undertakings, or entered into or changed or madeany offer (which remains open for acceptance) to enter into or change the termsof any contract with any director, officer or employee of any member of theWider JD Group; (e) save for intra-JD Group transactions, merged with any bodycorporate, partnership or business or, other than in the ordinary course ofbusiness, acquired or disposed of, transferred, mortgaged or encumbered anyassets or any right, title or interest in any asset (including shares and tradeinvestments) or authorised, proposed or announced its intention to do so; (f) issued, authorised or proposed or announced an intention toauthorise or propose, the issue of any debentures; (g) save for intra-JD Group transactions, incurred or increasedany indebtedness or become subject to any contingent liability otherwise than inthe ordinary course of business; (h) entered into or varied or authorised, proposed or announcedits intention to enter into or vary any contract, arrangement, agreement,transaction or commitment (whether in respect of capital expenditure, tradingobligations or otherwise) which is of a loss making, long term, onerous orunusual nature or magnitude or which involves or could involve an obligation ofsuch a nature or magnitude or which is other than in the ordinary course ofbusiness or which would be restrictive on the business of any member of the JDGroup; (i) entered into or varied or authorised or announced itsintention to enter into or vary the terms of, or make any offer (which remainsopen for acceptance) to enter into or vary the terms of, any service agreementfor services with any director or senior executive of JD or varied or permitteda variation in the terms or rules governing the JD Share Option Schemes; (j) repaid, purchased, redeemed or announced a proposal topurchase, redeem or repay any of its own shares or other securities (or theequivalent) or reduced or made any other change to or proposed the reduction orother change to any part of its share capital save for any shares allotted uponthe exercise of options granted before the time of this announcement under theJD Share Option Schemes; (k) implemented, authorised, proposed or announced its intentionto implement any reconstruction, amalgamation, scheme, commitment or othertransaction or arrangement otherwise than in the ordinary course of business; (l) waived or compromised any claim which is material in thecontext of the Wider JD Group taken as a whole; (m) entered into or varied or authorised, proposed or announced itsintention to enter into or vary any contract, transaction or arrangementotherwise than in the ordinary course of business; (n) entered into or varied or authorised, proposed or announcedits intention to enter into or vary any contract, transaction, arrangement orcommitment which would have or might reasonably be expected to have a materialadverse effect on the business of the JD Group; (o) terminated or varied the terms of any agreement or arrangementbetween any member of the JD Group and any other person in a manner which wouldor might be expected to have a material adverse effect on the financial positionor prospects of the JD Group; (p) made any alteration to its memorandum or articles ofassociation or other incorporation documents; (q) made or agreed or consented to any significant change to theterms of the trust deeds constituting the pension schemes established for itsdirectors and/or employees and/or their dependents or to the benefits whichaccrue, or to the pensions which are payable, thereunder, or to the basis onwhich qualification for or accrual or entitlement to such benefits or pensionsare calculated or determined or to the basis upon which the liabilities(including pensions) of such pension schemes are funded or made, or agreed orconsented to any change to the trustees involving the appointment of a trustcorporation; (r) been unable, or admitted in writing that it is unable, topay its debts or having stopped or suspended (or threatened to stop or suspend)payment of its debts generally or ceased or threatened to cease carrying on allor a substantial part of any business; (s) proposed any voluntary winding-up; (t) taken any corporate action or had any legal proceedingsstarted, instituted or threatened against it in respect of its winding-up,dissolution or reorganisation or for the appointment of a receiver,administrator, administrative receiver, trustee or similar officer of all or anyof its assets or revenues or any analogous proceedings in any jurisdiction orhad any analogous person appointed in any jurisdiction; or (u) entered into any contract, commitment, arrangement oragreement otherwise than in the ordinary course of business or passed anyresolution or made any proposal or announcement with respect to, or to effect,any of the transactions, matters or events referred to in this condition 7; 8 save as disclosed in or the Annual Report and Accounts of JD forthe year ended 31 January 2004 or as publicly announced by JD prior to the dateof this announcement (a) there having been no material adverse change or deteriorationin the business, assets, financial or trading position or profits or prospectsof JD, or any member of the JD Group; (b) no litigation, arbitration proceedings, prosecution or otherlegal proceedings to which any member of the Wider JD Group is or becomes aparty (whether as claimant or defendant or otherwise) and no investigation byany Third Party against or in respect of any member of the Wider JD Group havingbeen threatened, announced, intimated or instituted or remaining outstanding by,against or in respect of any member of the Wider JD Group, which in any suchcase might reasonably be expected to have a material adverse effect on the JDGroup taken as a whole; (c) no contingent or other liability having arisen or becomeapparent to Manchester, which might reasonably be expected to have a materialadverse effect on the Wider JD Group; and (d) no steps having been taken which are likely to result in thewithdrawal, cancellation, termination or modification of any licence or permitheld by any member of the Wider JD Group which is necessary for the propercarrying on of the business of the JD Group taken as a whole. 9 Manchester not having discovered (except as publicly announcedby JD prior to the time of this announcement): (a) that the financial, business or other information concerningthe Wider JD Group which has been disclosed at any time by or on behalf of anymember of the Wider JD Group whether publicly, to any member of the WiderOfferor Group or otherwise is misleading, contains a misrepresentation of factor omits, to state a fact necessary to make the information contained thereinnot misleading; (b) that any member of the Wider JD Group or any partnership orcompany or other entity in which any member of the Wider JD Group has aninterest which is not a subsidiary undertaking of JD is subject to anyliability, contingent or otherwise, which is not disclosed in the Annual Reportand Accounts of JD for the year ended 31 January 2004; (c) that any information exists which materially affects (in thecontext of the Offer) the import of any information disclosed at any time by oron behalf of any member of the Wider JD Group; (d) that circumstances exist which are likely to result in anyactual or contingent material liability to any member of the Wider JD Groupunder any applicable legislation to impose, or modify existing or install newplant, machinery or equipment or to carry out any changes in the processescurrently carried out; and (e) that circumstances exist whereby a person or class of personswould be likely to have any claim or claims in respect of any product or servicenow or previously sold or carried out by any past or present member of the JDGroup. For the purposes of the conditions set out in this Appendix I: (i) "parent undertaking", "subsidiary undertaking", "associatedundertaking" and "undertaking" have the meanings given by the Act, but for thispurpose ignoring paragraph 20(1)(b) of Schedule 4A of the Act; and (ii) "substantial interest" means a direct or indirect interestin 10 per cent or more of the voting equity capital of an undertaking. Subject to the requirements of the Panel, Manchester reserves the right (butshall be under no obligation) to waive, in whole or in part, all or any of theabove conditions apart from condition 1. Conditions 2 to 9 (inclusive) must be fulfilled or waived or, where appropriate,have been determined by Manchester to be or to remain satisfied by midnight onthe 21st day after the later of the First Closing Date and the date on whichcondition 1 is fulfilled (or in each such case such later date as the Panel mayagree). Manchester shall be under no obligation to waive or treat as satisfiedany of the conditions 2 to 9 (inclusive) by a date earlier than the latest datespecified above for the satisfaction thereof, notwithstanding that the otherconditions of the Offer may at such earlier date have been waived or fulfilledand that there are at such earlier date no circumstances indicating that any ofsuch conditions may not be capable of fulfilment. If Manchester is required by the Panel to make an offer for JD Shares under theprovisions of Rule 9 of the City Code, Manchester may make such alterations toany of the above conditions as are necessary to comply with the provisions ofthat Rule. The Offer will lapse if the proposed acquisition of the JD Shares by Manchesteris referred to the Competition Commission before 3.00 p.m. on the First ClosingDate or on the date on which the Offer becomes or is declared unconditional asto acceptances, whichever is the later. If the Offer lapses, the Offer willcease to be capable of further acceptance and persons accepting the Offer andManchester shall thereupon cease to be bound by acceptances delivered on orbefore the date on which the Offer so lapses. The Offer is not being made, directly or indirectly, in or into the UnitedStates, Canada, Australia or Japan, or by use of the mails or by any means orinstrumentality (including, without limitation, facsimile transmission,electronic mail or telephone) of interstate or foreign commerce of, or of anyfacility of a national securities exchange, of the United States, Canada,Australia or Japan and the Offer will not be capable of acceptance by any suchuse, means, instrumentality or facility from within the United States,Canada, Australia or Japan. Accordingly, copies of the Offer Document and the Form of Acceptance are not being, and must not be mailed or otherwisedistributed or sent in, into or from, the United States, Canada, Australia orJapan and persons receiving such documents (including custodians, nominees andtrustees) must not distribute or send them in, into or from, the United States,Canada, Australia or Japan as doing so will make invalid any purportedacceptance of the Offer by persons in any such jurisdiction. APPENDIX II DEFINITIONS In this announcement, the following words and expressions shall, except wherethe context requires otherwise, have the following meanings: "2005 Annual Dividend" the annual dividend of the Company for the year ended 31 January 2005 as declared on 11 May 2005 "Act" or "Companies Act" the Companies Act 1985 (as amended) "business day" a day on which banks are open for business in London (excluding Saturdays, Sundays and public holidays) "City Code" the City Code on Takeovers and Mergers "Closing Price" the middle market price of a JD Share at the close of business on the day to which such price relates, as derived from the London Stock Exchange Daily Official List for that day "First Closing Date" 1 June 2005 "Form of Acceptance" the form of acceptance and authority (in respect of certificated JD Shares) relating to the Offer accompanying the Offer Document "JD" or "the Company" The John David Group Plc "JD Board" or "JD Directors" the board of directors of JD "JD Directors" Colin Wilson Archer, Christopher Mathew Bird, Barry Colin Bown, Peter Alan Cowgill, Brian Michael Small, John Carruthers Wardle and David Martin Makin "JD Group" JD and its subsidiaries and subsidiary undertakings "JD Shareholder" a holder of JD Shares "JD Shares" fully paid ordinary shares of five pence each in the share capital of JD which are now unconditionally allotted or issued and any further such shares which are unconditionally allotted or issued while the Offer remains open for acceptance (or before such earlier date as Manchester may, subject to the City Code, decide) "JD Share Options" share options granted pursuant to the JD Share Option Schemes "JD Share Option Holder" a holder of JD Share Options "JD Share Option Schemes" the Inland Revenue Approved Employee Share Option Scheme and the Unapproved Employee Share Option Scheme "Listing Rules" the rules and regulations made by the UK Listing Authority under the Financial Services and Markets Act 2000 and contained in the UK Listing Authority's publication of the same name "London Stock Exchange" London Stock Exchange Plc "Manchester" Manchester Square Enterprises Limited, formerly known as Manchester Square Home Accessories Limited "Manchester Board" or "Manchester the board of directors of ManchesterDirectors" "Offer" the cash offer to be made by Goldman Sachs International on behalf of Manchester, which is to be set out in the Offer Document, for all the JD Shares and, where the context so requires, any subsequent revision, variation, extension or renewal of such an offer "Offer Document" the offer document to be sent to JD Shareholders which contains details of the Offer "Official List" the Official List maintained by the UK Listing Authority "Panel" the Panel on Takeovers and Mergers "Pentland Group" Pentland Group Plc and its subsidiary companies "Pentland Group Plc" Pentland Group Plc "Pentland Group Plc Board" the board of directors of Pentland Group Plc "Securities Act" the United States Securities Act of 1933, as amended "UK" or "United Kingdom" the United Kingdom of Great Britain and Northern Ireland "UK Listing Authority" the Financial Services Authority in its capacity as a competent authority under the Financial Services and Markets Act 2000 "United States" or "US" the United States of America, its territories and possessions, all areas subject to its jurisdiction or any political subdivision thereof, any state of the United States of America and the District of Columbia This information is provided by RNS The company news service from the London Stock Exchange