Last checked at 19 May 2010 07:00
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY IN OR INTO OR FROM THE UNITED STATES, CANADA, AUSTRALIA, JAPAN OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION
Announcement for Immediate Release
19 May 2010
RECOMMENDED CASH OFFER
by
BLUEGEM GAMMA LIMITED ("BGL")
for
LIBERTY PLC ("Liberty")
Summary
The boards of BGL and Liberty are pleased to announce that they have reached agreement on the terms of a recommended cash offer to be made by BGL for the entire issued ordinary share capital of Liberty. BGL is a newly incorporated company which has been formed for the purposes of making the Offer and which is wholly owned by BlueGem L.P.
·; The Offer will be made at a price of 141.8 pence in cash for each Liberty Share, valuing the entire existing issued ordinary share capital of Liberty at approximately £32.0 million.
·; The Liberty Board also today announces that it intends to resolve to pay a special dividend of 44.2 pence per Liberty Share, the payment of which will be conditional on the Offer being declared unconditional in all respects.
·; In aggregate, the Offer and the Special Dividend amount to an aggregate return to holders of Liberty Shares of 186 pence per Liberty Share, equivalent to approximately £42.0 million.
·; BGL has received hard irrevocable undertakings from Liberty Shareholders in respect of their beneficial holdings of an aggregate of 19,500,127 Liberty Shares, amounting in aggregate to 86.27 per cent. of the existing issued ordinary share capital of Liberty. Liberty Shareholders should note that BGL will declare the Offer unconditional as to acceptances if at the First Closing Date (or subsequent closing date) acceptances in respect of not less than 86.27 per cent of the existing ordinary share capital of Liberty have been received.
It is intended that the Offer will be implemented by way of a takeover offer. The Offer Document, containing further information about the Offer is expected to be posted to Liberty Shareholders shortly.
The Liberty Board's recommendation
The Liberty Board which has been so advised by Cavendish Corporate Finance LLP, in its capacity as Rule 3 adviser to Liberty, considers the terms of the Offer to be fair and reasonable. In providing advice to the Liberty Board, Cavendish Corporate Finance LLP has taken into account the commercial assessment of the Liberty Directors.
Accordingly, the Liberty Directors will unanimously recommend that Liberty Shareholders accept the Offer and have undertaken to do so.
Other matters
This summary should be read in conjunction with, and is subject to, the full text of the following announcement. The Offer will be made subject to the conditions set out in Appendix A to this announcement and on the full terms and conditions to be set out in the Offer Document and (in respect of certificated Liberty Shares) in the Form of Acceptance.
Enquiries:
| BlueGem Capital Partners LLP Marco Capello
|
Tel: +44 (0)20 7647 9710
|
| Hawkpoint Partners Limited (financial adviser to BGL) Christopher Darlington Vinay Ghai
|
Tel: +44 (0)20 7665 4500
|
| Liberty plc Richard Balfour-Lynn, Chairman
|
Tel: +44 (0)20 7706 2121
|
| Cavendish Corporate Finance LLP (financial adviser to Liberty) Jonathan Buxton
|
Tel: +44 (0)20 7908 6000
|
| Global Leisure Partners LLP (financial adviser to Liberty) Mervyn Metcalf
|
Tel: +44 (0)20 7016 8050
|
Hawkpoint Partners Limited, which is authorised and regulated in the UK by the FSA, is acting exclusively for BGL and no one else in connection with the Offer and will not be responsible to anyone other than BGL for providing the protections afforded to the clients of Hawkpoint Partners Limited nor for providing advice in relation to the Offer, the contents of this announcement, or any transaction or arrangement referenced herein.
Cavendish Corporate Finance LLP, which is authorised and regulated in the UK by the FSA, is acting exclusively for Liberty and for no one else in connection with the Offer and will not regard any other person as its client nor be responsible to anyone other than Liberty for providing the protections afforded to the clients of Cavendish Corporate Finance LLP nor for providing advice in relation to the Offer, the contents of this announcement, or any transaction or arrangement referenced herein.
Global Leisure Partners LLP, which is authorised and regulated in the UK by the FSA, is acting exclusively for Liberty and for no one else in connection with the Offer and will not regard any other person as its client nor be responsible to anyone other than Liberty for providing the protections afforded to the clients of Global Leisure Partners LLP nor for providing advice in relation to the Offer, the contents of this announcement, or any transaction or arrangement referenced herein.
This announcement is not intended to, and does not, constitute or form part of any offer, invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities or the solicitation of any vote or approval in any jurisdiction pursuant to this announcement or otherwise. The Offer will be made solely by the Offer Document, when issued, which will contain the full terms and conditions of the Offer, including details of how the Offer may be accepted.
This announcement has been prepared for the purpose of complying with English law and the City Code and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws of jurisdictions outside the UK.
Overseas Shareholders
The distribution of this announcement in jurisdictions other than the UK and the availability of the Offer to Liberty Shareholders who are not resident in the UK may be affected by the laws of relevant jurisdictions. Any persons who are subject to the laws of any jurisdiction other than the UK or Liberty Shareholders who are not resident in the UK will therefore need to inform themselves about, and observe, any applicable requirements.
The Offer is not being, and will not be, made, directly or indirectly, in, into or from the United States, Canada, Australia, Japan or any other Restricted Jurisdiction. Accordingly, copies of this announcement are not being, and must not be, directly or indirectly, mailed, transmitted or otherwise forwarded, distributed or sent in, into or from the United States, Canada, Australia, Japan or any other Restricted Jurisdiction.
Forward-Looking Statements
This announcement contains certain forward-looking statements with respect to the financial condition, results of operations and business of the Liberty Group and certain plans and objectives of the Liberty Directors and the BGL Directors, and these statements are naturally subject to uncertainty and changes in circumstances. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Without limitation, any statements preceded or followed by or that include the words "anticipate", "plan", "believe", "expect", "aim", "intend", "goal", "will", "may", "should", "could", "project", "estimate", or words or terms of similar substance or the negative thereof, are forward-looking statements. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements. These factors include, but are not limited to, the satisfaction of the conditions to the Offer, as well as additional factors, such as changes in economic conditions, changes in the level of capital investment, success of business and operating initiatives and restructuring objectives, customers' strategies and stability, changes in the regulatory environment and fluctuations in interest and exchange rates. Other unknown and unpredictable factors could cause actual results to differ materially from those in the forward-looking statements. Neither BGL nor Liberty nor their respective boards of directors assume any obligation to update or correct the information contained in this announcement, whether as a result of new information, future events or otherwise, except to the extent legally required. The statements contained in this announcement are made as at the date of this announcement, unless some other time is specified in relation to them, and the issue of this announcement shall not give rise to any implication that there has been no change in the facts set out in this announcement since such date.
Profit Forecasts
No statement in this announcement is intended, or is to be construed, as a profit forecast or to be interpreted as meaning that earnings per Liberty Share for the current and future financial years, or those of the combined group, will necessarily match or exceed the historical published earnings per Liberty Share. Rather, these statements should be construed as references to potential enhancements to the earnings that might otherwise have been earned during the relevant financial period.
Dealing Disclosure Requirements
Under Rule 8.3(a) of the City Code, any person who is interested in 1 per cent. or more of any class of relevant securities of an offeree company or of any paper offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the Offer Period and, if later, following the announcement in which any paper offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any paper offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3:30pm on the 10th business day following the commencement of the Offer Period and, if appropriate, by no later than 3:30pm on the 10th business day following the announcement in which any paper offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a paper offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the City Code, any person who is, or becomes, interested in 1 per cent. or more of any class of relevant securities of the offeree company or of any paper offeror, must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any paper offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any paper offeror, save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3:30pm on the business day following the date of the relevant dealing.
If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a paper offeror, they will be deemed to be a single person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4). Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the Offer Period commenced and when any offeror was first identified. If you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure, you should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129.
Online availability of this announcement
A copy of this announcement will be available subject to certain restrictions relating to persons resident in the United States, Canada, Australia, Japan or any other Restricted Jurisdiction, on Liberty's website (www.liberty.co.uk/fcp/content/ investorinformation/content) from the date of this announcement.
Provision of information to BGL
Any Liberty Shareholder, Liberty Option Holder, person with information rights or other relevant person may, for the receipt of communications from Liberty, provide addresses, electronic addresses and certain other information to BGL during the Offer Period.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY IN OR INTO OR FROM THE UNITED STATES, CANADA, AUSTRALIA, JAPAN OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION
Announcement for Immediate Release
19 May 2010
RECOMMENDED CASH OFFER
by
BLUEGEM GAMMA LIMITED ("BGL")
for
LIBERTY PLC ("Liberty")
1. Introduction
The boards of BGL and Liberty are pleased to announce that they have reached agreement on the terms of a recommended cash offer to be made by BGL for the entire issued ordinary share capital of Liberty. BGL is a newly incorporated company which has been formed for the purposes of making the Offer and which is wholly owned by BlueGem L.P.
BGL has received hard irrevocable undertakings from Liberty Shareholders in respect of their beneficial holdings of an aggregate of 19,500,127 Liberty Shares, amounting in aggregate to 86.27 per cent. of the existing issued ordinary share capital of Liberty. Liberty Shareholders should note that BGL will declare the Offer unconditional as to acceptances if at the First Closing Date (or subsequent closing date) acceptances in respect of not less than 86.27 per cent. of the existing ordinary share capital of Liberty have been received.
2. The Offer
The Offer, which will be subject to the terms and conditions which are set out below and in Appendix A to this announcement and to the full terms and conditions to be set out in the Offer Document and, in respect of certificated Liberty Shares, in the Form of Acceptance, will be made by BGL on the following basis:
for each Liberty Share 141.8 pence in cash
The Offer values the existing issued ordinary share capital of Liberty at approximately £32.0 million. Together with the Special Dividend of 44.2 pence per Liberty Share intended to be resolved to be paid by Liberty, the payment of which will be conditional on the Offer being declared unconditional in all respects, this amounts to an aggregate return to holders of Liberty Shares of 186 pence per Liberty Share, equivalent to approximately £42.0 million.
The Liberty Board, which has received advice from Liberty's financial adviser, Cavendish Corporate Finance LLP, considers the terms of the Offer to be fair and reasonable and, in conjunction with the Special Dividend, to represent an attractive aggregate return to Liberty Shareholders.
The aggregate amount receivable by Liberty Shareholders pursuant to the Offer (including the Special Dividend) represents a multiple of 26.9 times Liberty's pro forma EBITDA before brand expenditure and reorganisation costs for the year ended 31 December 2009 and after deducting the initial annual rent of £2.1 million payable under the Liberty Lease.
The aggregate amount receivable by Liberty Shareholders (including the Special Dividend) represents a discount of 32.4 per cent. to the closing middle market quotation for a Liberty Share of 275 pence on 11 March 2010, being the last practicable date before the Liberty Board made the announcement that it had received approaches which may or may not lead to an offer being made for Liberty on 12 March 2010. The aggregate amount receivable by Liberty Shareholders (including the Special Dividend) represents a discount of 39.5 per cent. to the closing middle market quotation for a Liberty Ordinary Share of 307.5 pence on 6 May 2010, being the last practicable date before the announcement made by the Liberty Board that BlueGem Capital Partners LLP, on behalf of BlueGem L.P., was in discussions with the Liberty Board about the possibility of making an offer for the ordinary share capital of Liberty. The aggregate amount receivable by Liberty Shareholders (including the Special Dividend) represents a discount of 16.4 per cent. to the closing middle market quotation for a Liberty Share of 222.5 pence on 18 May 2010, being the last practicable date before this announcement.
Further, the Liberty Shares have, for a number of years, been highly illiquid on AIM, with very limited trading volumes. In the opinion of the Liberty Board, and after receiving appropriate financial advice, the underlying value of Liberty is lower than the share price of the Liberty Shares. Consequently, a sale of any substantial number of Liberty Shares on the market would not, in the opinion of the Liberty Board, realise a value materially higher than the aggregate amount per Liberty Share receivable by Liberty Shareholders pursuant to the Offer.
The Offer will extend to all Liberty Shares unconditionally allotted or issued on the date of the Offer and any Liberty Shares which are unconditionally allotted or issued whilst the Offer remains open for acceptance or by such earlier time as BGL may, in accordance with the terms and conditions of the Offer, decide.
Liberty Shares will be acquired by BGL fully paid and free from all liens, equitable interests, charges, mortgages, encumbrances, rights of pre-emption and other third party rights or interests of any nature whatsoever and together with all rights now or hereafter attaching thereto, including without limitation, other than in respect of the above mentioned Special Dividend which will be paid to Liberty Shareholders, all voting rights and the right to receive and retain in full all dividends and other distributions (if any) accrued, announced, declared, made or paid on or after the date of this announcement.
3. Recommendation
The Liberty Board which has been so advised by Cavendish Corporate Finance LLP, in its capacity as Rule 3 adviser to Liberty, considers the terms of the Offer to be fair and reasonable. In providing advice to the Liberty Board, Cavendish Corporate Finance LLP has taken into account the commercial assessment of the Liberty Directors.
Accordingly, the Liberty Directors will unanimously recommend that Liberty Shareholders accept the Offer and have undertaken to do so.
4. Irrevocable undertakings
BGL has received hard irrevocable undertakings to accept or procure the acceptance of the Offer in respect of a total of 19,500,127 Liberty Shares, representing in aggregate 86.27 per cent. of the existing issued ordinary share capital of Liberty, comprised as follows:-
·; from MWB and certain of its wholly owned subsidiaries, in respect of an aggregate of 15,447,409 Liberty Shares, representing approximately 68.3 per cent. of the existing issued ordinary share capital of Liberty;
·; from Principle Capital Investments Limited in respect of 1,693,541 Liberty Shares, representing approximately 7.5 per cent. of the existing issued ordinary share capital of Liberty; and
·; from Cartesian Partners L.P. in respect of 2,359,177 Liberty Shares, representing approximately 10.4 per cent. of the existing issued ordinary share capital of Liberty.
All of these undertakings will continue to be binding even in the event of a higher competing offer for Liberty and will only lapse if the Offer lapses or is withdrawn in accordance with the City Code.
The hard irrevocable undertakings to accept the Offer received from MWB and certain of its wholly owned subsidiaries are conditional upon shareholders of MWB approving the acceptance of the Offer at a general meeting of the shareholders of MWB. The directors of MWB have entered into hard irrevocable undertakings to convene this general meeting, to recommend the resolution to shareholders of MWB, to vote in favour of such resolution in respect of their respective shareholdings in MWB totalling 25,880,014 ordinary shares in MWB, representing 15.8 per cent. of MWB's issued voting share capital and to vote against any resolution which might conflict in any way with the passing of such resolution. Shareholders in MWB accounting for a further 57,876,326 ordinary shares in MWB, representing 35.3 per cent. of MWB's issued voting share capital, have entered into hard irrevocable undertakings to vote in favour of the sale by MWB of its Liberty Shares pursuant to the Offer if it is considered at a general meeting of the shareholders of MWB and to vote against any resolution which might conflict in any way with the passing of such resolution. MWB and BlueGem Capital Partners LLP as manager of BlueGem L.P. (which wholly owns BGL) have therefore received hard irrevocable undertakings from MWB shareholders representing in aggregate 51.1 per cent. of its issued voting share capital to vote in favour of acceptance of the Offer and to vote against any resolution which might conflict in any way with the passing of such resolution to accept the Offer. Liberty Shareholders should note that the resolution to be put to shareholders of MWB to approve the acceptance of the Offer by MWB is an ordinary resolution which requires a majority of not less than 50 per cent. of those voting in person or by proxy to vote in favour. A circular seeking such approval and acceptance is expected to be posted to shareholders of MWB prior to the end of May 2010. The shareholders' meeting of MWB is expected to take place prior to the end of June 2010.
Accordingly, BGL has received, in aggregate, hard irrevocable undertakings to accept the Offer in respect of 19,500,127 Liberty Shares, representing 86.27 per cent. of the existing issued ordinary share capital of Liberty. Liberty Shareholders should note that the Offer will be declared unconditional as to acceptances if at the First Closing Date (or subsequent closing date) acceptances in respect of not less than 86.27 per cent of the existing ordinary share capital of Liberty have been received.
Further details of the irrevocable undertakings are set out in Appendix C.
5. Information on BGL
BGL is a newly formed company wholly owned by BlueGem L.P., a private equity fund formed at the end of 2006. BlueGem L.P. has capital commitments of over €200 million from investors, of which approximately 40 per cent. has been invested so far. By value of commitments, these investors are approximately 50 per cent. financial institutions and 50 per cent. families and high net worth individuals. BlueGem L.P. is managed by BlueGem Capital Partners LLP, whose investment team, based in London, is led by Marco Capello, formerly a Managing Director of Merrill Lynch Global Private Equity. Marco Capello has over 18 years of investment banking experience in London and New York at First Boston, Wasserstein Perella and Merrill Lynch. The second partner (and member of the investment team) is Emilio di Spiezio Sardo, who previously worked in London in the hedge fund industry at York Capital Management and in investment banking at Merrill Lynch. The investment team also includes Marco Anatriello, who previously worked at Merrill Lynch investment banking in Milan and London and Vishesh Srivastava, who previously worked in investment banking at Greenhill & Co. International in London.
BlueGem L.P. makes private equity investments in mid-market companies mainly in the UK and Italy. BlueGem L.P.'s investment philosophy is built around creating long term value in quality companies.
Other investments of BlueGem L.P. include The Private Clinic Ltd (active in the non-invasive and minimally invasive cosmetic treatments sector in the UK), Olicar S.p.A. (active in the energy facility management sector in Italy), Fintyre S.p.A. (leader in the wholesale tyres distribution sector in Italy) and Neomobile S.p.A. (active in the mobile entertainment industry in Italy, Spain, Brazil, Turkey, Mexico, France and India).
The investment team of BlueGem Capital Partners LLP has considerable experience in the retail arena having been involved in a number of transactions in the retail industry including the acquisition by Merrill Lynch Global Private Equity of Debenhams, one of the UK's leading department stores. As a result, the team believes it has a unique network of contacts in the fashion and retail industry, which will be highly valuable in developing the brand and the retail operations of Liberty.
6. Information on Liberty
Liberty, established by the Liberty family in 1875, is a retail emporium whose business is principally located in the West End of London. Liberty retails fashion, beauty and home collections from five floors of the Tudor Building and operates a wholesale business through Liberty Art Fabrics. MWB has a 68.3 per cent. interest in Liberty.
The core of the Liberty strategy is the creation of a global luxury brand across four distinctive business activities, each based on a common heritage and share support functions.
The Liberty business, which operates the Liberty flagship store in London, has had new management in place since 2007. Driven principally by the success of the refurbishment at the flagship store which completed in February 2009, operating revenue increased in 2009 to £37.3 million, a year on year increase of 18 per cent., and Liberty recorded positive EBITDA during this period. Given the current economic climate, the Liberty Board considered this to be a strong performance and a good barometer with which to measure the prospects going forward.
The principal activity of Liberty is the operation of the Liberty flagship store on Great Marlborough Street, which has in recent years undergone a period of significant financial investment, culminating in completion of the 'Renaissance of Liberty' which was launched in February 2009. The Liberty flagship store carries menswear, womenswear, shoes, jewellery, accessories and home interiors amongst other categories. The store carries collections by renowned designers and is positioned at the upper end of the luxury market. In the year ended 31 December 2009, the Liberty flagship store and the transactional website contributed 63 per cent. to Liberty total revenues.
In July 2008, Liberty launched its transactional website, which has developed rapidly since then. The Liberty Board considers that the response to Liberty's products indicates significant potential for this part of its business.
Liberty Art Fabrics supplies fashion and design fabrics and prints to global fashion brands and designers including Nike, Balmain and Junya Watanabe. In the year ended 31 December 2009, the Liberty Art Fabrics business contributed 37 per cent. of Liberty total revenues.
Liberty of London, Liberty's in-house studio, develops fashion accessories for men and women which are sold in Liberty's three core areas of operation referred to above.
Revenue increased by 40 per cent. during the four months ended 30 April 2010, compared to the same period in 2009, driven by growth across the key areas of Liberty's business, namely fabrics division, the flagship store and the internet business. Revenue for the four months ended 30 April 2010 totalled £26.0 million, an increase from £18.5 million in the comparative four months to 30 April 2009.
7. Background to and reasons for the Offer
The financial performance of Liberty has suffered over the last decade, with the company making losses and being substantially cash flow negative.
As a small quoted company on AIM, Liberty has suffered from share illiquidity and limited institutional interest in its shares. Due to its limited free float, Liberty's shares are traded very infrequently, with there having been no or very limited trading activity in the 105 days immediately prior to Liberty announcing that it was in discussions that may or may not lead to an offer for Liberty on 12 March 2010.
Furthermore, the costs associated with being a public company are significant, both in financial terms and the amount of management time consumed by the investor reporting requirements.
As a result, BGL believes that Liberty would be better positioned to pursue its strategies as a private company with a backer with a strong retail focus, and one which would be willing to commit the substantial sums of capital required to take Liberty to the next stage of its development.
BGL, in conjunction with the investment team at BlueGem Capital Partners LLP, has considerable retail sector experience and intends to invest significantly in the business and leverage its sector knowledge and expertise to develop the brand and the retail operations of Liberty.
8. Background to and reasons for recommending the Offer
Liberty Shares have been admitted to trading on AIM since July 2000. At that time, stock market conditions were considerably more favourable to small companies than is currently the case. Throughout this time, Liberty has continued to be loss making and substantially cash flow negative.
In February 2009, Liberty launched its 'Renaissance of Liberty' which seeks to establish Liberty as a popular and avant-garde British luxury brand. The Renaissance continues to be successful, and in the year ended 31 December 2009 Liberty revenues grew by 20 per cent. compared with 2008, resulting in a positive EBITDA of £0.1 million for the year ended 31 December 2009 (after brand expenditure and reorganisation costs) and a reduced post-tax loss after depreciation and interest for Liberty of £5.15 million. The success of the Renaissance has continued in 2010 and in the four months ended 30 April 2010, Liberty's total revenue increased by 40 per cent. over the same period in 2009.
In July 2009, the Liberty Board announced that it was undertaking a review with the aim of identifying ways in which the Liberty business could be developed and expanded. As a result of this review, the Liberty Board, in conjunction with its financial advisers, considered a number of different strategies that were proposed to Liberty. On 12 March 2010, the Liberty Board announced that it had received approaches which may or may not lead to an offer for Liberty.
On 15 March 2010, the Liberty Board announced that it had agreed terms to sell the Tudor Building for a sale price of £41.5 million in cash. This sale price, less a retention of £0.3 million by the purchaser of the Tudor Building, represents a surplus, before expenses, of £10.95 million or 36 per cent. over the book value of the Tudor Building of £30.25 million at 31 December 2009. Completion of the Tudor Building sale took place on 11 May 2010. Liberty has continued, and will continue, to occupy and carry on its retail operations at the Tudor Building since completion of the Tudor Building sale pursuant to the Liberty Lease, at an initial annual rent of £2.1 million, with five-yearly fixed upward rent reviews during the term of the Liberty Lease.
On 7 May 2010, BlueGem Capital Partners LLP, on behalf of BlueGem L.P., announced that it was in discussions with the Liberty Board about the possibility of making an offer for the Liberty Shares.
As a small quoted company on AIM, Liberty has suffered from share illiquidity and limited institutional interest in its shares. The Liberty Board has worked hard to restructure Liberty and revive its fortunes within the confines of the public arena. However, the Liberty Board now considers that, in light of the above progress, Liberty's long term strategy has better prospects of being delivered as a private company with a backer with a strong retail focus, and one which would be willing to commit the substantial sums of capital required to take Liberty to the next stage of its development. The Liberty Board considers that BGL and BlueGem L.P. possess these characteristics.
For these reasons, the Liberty Directors will unanimously recommend that Liberty Shareholders accept the Offer and have undertaken to do so.
9. Financing of the Offer
The cash consideration payable by BGL under the terms of the Offer will be funded through a drawdown from BlueGem L.P.'s investors. BlueGem L.P. has made available these funds to BGL to allow the Offer to be made. These funds will be provided to BGL by way of a subscription for equity shares on the Offer becoming or being declared unconditional in all respects.
Hawkpoint Partners Limited has confirmed that it is satisfied the necessary financial resources are available to BGL to satisfy acceptance of the Offer in full.
10. Directors, management and employees
The BGL Directors believe that the prospects for employees of the Liberty Group will be enhanced as a result of Liberty being acquired by BGL. The existing contractual employment rights of all employees of the Liberty Group will be fully safeguarded.
Under BGL's ownership, Liberty would continue to offer its proposition under the Liberty brand and there is no current intention to change the location of Liberty's places of businesses or to redeploy the fixed assets of Liberty.
11. Liberty Share Option Scheme
On 18 May 2010, all Liberty Option Holders entered into agreements pursuant to which they have agreed to surrender all of their options over an aggregate of 1,930,000 Liberty Shares in return for a gross cash payment equal to 21.8 pence per Liberty Share (or £0.42m in total) from BGL and an additional amount equal to 44.2 pence per Liberty Ordinary Share (or £0.85m in total) from Liberty, in exchange for the surrender of those options. These arrangements put the Liberty Option Holders in the position they would have been in, had they exercised their options and participated in the Offer as a Liberty Shareholder. Payments under these agreements are conditional upon the Offer being declared unconditional in all respects.
12. Disclosure of interests in Liberty Shares
Neither BGL, nor (so far as BGL is aware) any person acting, or deemed to be acting, in concert with BGL (excluding those parties providing hard irrevocable undertakings listed in Appendix C) for the purposes of the Offer has:
(a) an interest in, or a right to subscribe for, Liberty Shares or in any securities convertible or exchangeable into Liberty Shares ("Relevant Liberty Securities");
(b) any short position in Relevant Liberty Securities (whether conditional or absolute and whether in the money or otherwise), including any short position under a derivative, any agreement to sell or any delivery obligation or right to require another person to purchase or take delivery; or
(c) borrowed or lent any Relevant Liberty Securities (except for any borrowed Liberty Shares which have been either on-lent or sold) or has any arrangement in relation to Relevant Liberty Securities.
For these purposes, "arrangement" includes indemnity or option arrangements and any agreement or understanding, formal or informal, of whatever nature, relating to Relevant Liberty Securities which may be an inducement to deal or refrain from dealing in such securities. In the interests of secrecy prior to this announcement, BGL has not made any enquiries in this respect of certain parties which are or may be deemed to be acting in concert with it for the purposes of the Offer. If such enquiries, which are now being made, reveal any relevant additional interests, the same will be discussed with the Panel and, if appropriate, will be disclosed to Liberty Shareholders.
13. De-listing, cancellation of admission to trading on AIM, and compulsory acquisition and re-registration
Assuming the Offer becomes or is declared unconditional in all respects and subject to any other applicable requirements of the AIM Rules, BGL intends to procure the making of an application by Liberty to the London Stock Exchange for the cancellation of trading in the Liberty Shares on AIM. If this cancellation occurs, it will significantly reduce the liquidity and marketability of Liberty Shares held by Liberty Shareholders who have not assented to the Offer. It is anticipated that the cancellation of trading of Liberty Shares on the AIM will take effect no earlier than the expiry of 20 business days after the Offer becomes or is declared unconditional in all respects.
BGL will declare the Offer unconditional as to acceptances if, at the First Closing Date (or any subsequent closing date), acceptances in respect of not less than 86.27 per cent. in nominal value of the Liberty Shares have been received.
BGL has received hard irrevocable undertakings from Liberty Shareholders in respect of their beneficial holdings of an aggregate of 19,500,127 Liberty Shares, amounting in aggregate to 86.27 per cent. of the existing issued ordinary share capital of Liberty.
It is also intended that, following the Offer becoming or being declared unconditional in all respects, and, after the cancellation of admission of Liberty Shares to AIM, BGL will seek to re-register Liberty as a private limited company in accordance with the relevant provisions of the Companies Act.
If BGL receives acceptances under the Offer in respect of, and/or otherwise acquires, 90 per cent. or more of the Liberty Shares by nominal value and voting rights attaching to such shares to which the Offer relates and assuming that all of the other conditions of the Offer have been satisfied or waived (if capable of being waived), BGL intends to exercise its rights pursuant to the provisions of Chapter 3 of Part 28 of the Companies Act to acquire compulsorily the remaining Liberty Shares to which the Offer relates on the same terms as the Offer.
14. Special Dividend
The Liberty Board intends to resolve to pay a special dividend of 44.2 pence per Liberty Share, the payment of which will be conditional on the Offer becoming or being declared unconditional in all respects. It is intended that the record date for the Special Dividend will be the date on which the Offer Document is posted to Liberty Shareholders. It is expected that the Special Dividend will be paid to Liberty Shareholders within seven days following the date on which the Offer becomes or is declared wholly unconditional. BGL has undertaken to provide agreed funding to ensure that Liberty has the necessary cash available to it to pay the Special Dividend.
15. Liberty Preference Shares
The Offer will not be extended to the holders of Liberty Preference Shares. Following the Offer becoming or being declared unconditional in all respects and immediately prior to the payment of the Special Dividend, Liberty shall pay to the holders of Liberty Preference Shares the aggregate sum outstanding on these shares in respect of the arrears of dividend.
On the cancellation of trading in Liberty Shares on AIM and the re-registration of Liberty as a private company, the Liberty Preference Shares will no longer be eligible for trading on AIM and their quotation on AIM will be cancelled.
The BGL Directors are aware that, following the proposed cancellation, Liberty Preference Shareholders may still wish to acquire further Liberty Preference Shares or dispose of their Liberty Preference Shares and, accordingly, intend to use reasonable endeavours to create and maintain a matched bargain settlement facility. Under this facility Liberty Preference Shareholders or persons wishing to acquire Liberty Preference Shares will be able to leave an indication with the matched bargain settlement facility provider that they are prepared to buy or sell at an agreed price. In the event that the matched bargain settlement facility provider is able to match that order with an opposite sell or buy instruction, the matched bargain settlement facility provider will contact both parties and then effect the order. Liberty Preference Shareholders who do not have their own broker may need to register with the matched bargain settlement facility provider as a new client. This can take some time to process and, therefore, Liberty Preference Shareholders who consider they are likely to avail themselves of this facility are encouraged to commence it at the earliest opportunity. The contact details of the matched bargain settlement facility provider once arranged will be made available to Liberty Preference Shareholders on Liberty's website.
16. Overseas Liberty Shareholders
This announcement has been prepared for the purpose of complying with English law and the City Code and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws of jurisdictions outside the UK.
The distribution of this announcement in jurisdictions other than the UK and the availability of the Offer to Liberty Shareholders who are not resident in the UK may be affected by the laws of relevant jurisdictions. Any persons who are subject to the laws of any jurisdiction other than the UK or Liberty Shareholders who are not resident in the UK will therefore need to inform themselves about, and observe, any applicable requirements.
The Offer is not being, and will not be, made, directly or indirectly, in, into or from the United States, Canada, Australia, Japan or any other Restricted Jurisdiction. Accordingly, copies of this announcement are not being, and must not be, directly or indirectly, mailed, transmitted or otherwise forwarded, distributed or sent in, into or from the United States, Canada, Australia, Japan or any other Restricted Jurisdiction.
17. Inducement Fee
On 22 March 2010 Liberty entered into an inducement fee agreement with BlueGem Capital Partners LLP (as amended on 14 April and 30 April 2010). Under this agreement, in consideration of BlueGem Capital Partners LLP pursuing and agreeing to investigate the prospects of making a potential offer for Liberty, Liberty agreed that it would pay an inducement fee to BlueGem Capital Partners LLP in certain limited circumstances, equal to one per cent. of the value of Liberty, such fee being approximately £0.32 million. At the date of this announcement, none of the events which would result in the inducement fee becoming payable have occurred.
The circumstances in which Liberty would be required to pay the inducement fee following the date of this announcement include circumstances in which: (i) either a competing offer to that proposed by BGL for Liberty is made by a third party and the Liberty Board recommends the competing offer; or (ii) the Liberty Board otherwise withholds, withdraws or materially changes its recommendation of the Offer, or Liberty's financial adviser withholds, withdraws or materially changes its confirmation that the Offer is fair and reasonable.
Nothing in the inducement fee agreement shall oblige Liberty to pay any amount to BlueGem Capital Partners LLP which the Panel determines would not be permitted by Rule 21.2 of the City Code.
In addition, the Liberty Directors have undertaken inter alia (i) to recommend the Offer to the Liberty Shareholders; (ii) not to solicit, initiate or encourage any other person to make an offer for Liberty; and (iii) except where required by their duties as directors of Liberty or under the City Code, and in any event only in response to an unsolicited approach, not to enter into or continue discussions or agreements with, or provide any information to any person considering making such an offer or otherwise take any action which might be prejudicial to the outcome of the Offer.
18. General
There are no agreements or arrangements to which BGL is a party which relate to the circumstances in which it may or may not invoke or seek to invoke a condition to the Offer.
Your attention is drawn to the further information contained in the Appendices which form part of this announcement.
The conditions to the Offer and a summary of further terms in relation to the Offer set out in Appendix A to this announcement form part of, and should be read in conjunction with, this announcement.
Appendices B and C to this announcement set out further information, including the bases and sources of information from which the financial and other calculations used in this announcement have been derived.
Appendix D to this announcement contains definitions of certain terms used in this announcement.
The Offer will be subject to the applicable requirements of the City Code.
Enquiries:
| BlueGem Capital Partners LLP Marco Capello |
Tel: +44 (0)20 7647 9710
|
| Hawkpoint Partners Limited (financial adviser to BGL) Christopher Darlington Vinay Ghai
|
Tel: +44 (0)20 7665 4500
|
| Liberty plc Richard Balfour-Lynn, Chairman
|
Tel: +44 (0)20 7706 2121 |
| Cavendish Corporate Finance LLP (financial adviser to Liberty) Jonathan Buxton
|
Tel: +44 (0)20 7908 6000
|
| Global Leisure Partners LLP (financial adviser to Liberty) Mervyn Metcalf
| Tel: +44 (0)20 7016 8050 |
Hawkpoint Partners Limited, which is authorised and regulated in the UK by the FSA, is acting exclusively for BGL and no one else in connection with the Offer and will not be responsible to anyone other than BGL for providing the protections afforded to the clients of Hawkpoint Partners Limited nor for providing advice in relation to the Offer, the contents of this announcement, or any transaction or arrangement referenced herein.
Cavendish Corporate Finance LLP, which is authorised and regulated in the UK by the FSA, is acting exclusively for Liberty and for no one else in connection with the Offer and will not regard any other person as its client nor be responsible to anyone other than Liberty for providing the protections afforded to the clients of Cavendish Corporate Finance LLP nor for providing advice in relation to the Offer, the contents of this announcement, or any transaction or arrangement referenced herein.
Global Leisure Partners LLP, which is authorised and regulated in the UK by the FSA, is acting exclusively for Liberty and for no one else in connection with the Offer and will not regard any other person as its client nor be responsible to anyone other than Liberty for providing the protections afforded to the clients of Global Leisure Partners LLP nor for providing advice in relation to the Offer, the contents of this announcement, or any transaction or arrangement referenced herein.
This announcement is not intended to, and does not, constitute or form part of any offer, invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities or the solicitation of any vote or approval in any jurisdiction pursuant to this announcement or otherwise. The Offer will be made solely by the Offer Document, when issued, which will contain the full terms and conditions of the Offer, including details of how the Offer may be accepted.
This announcement has been prepared for the purpose of complying with English law and the City Code and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws of jurisdictions outside the UK.
Responsibility for information in this announcement
The BGL Directors accept responsibility for the information contained in this announcement, other than that relating to Liberty, the Liberty Group and Liberty Directors and members of their immediate families, related trusts or persons connected with them, for which the Liberty Directors accept responsibility. To the best of the knowledge and belief of the BGL Directors (who have taken all reasonable care to ensure that such is the case), the information contained in this announcement for which they are responsible is in accordance with the facts and does not omit anything likely to affect the import of such information.
The Liberty Directors accept responsibility for the information contained in this announcement relating to Liberty, the Liberty Group, the opinions of Liberty and the Liberty Group and the Liberty Directors and members of their immediate families, related trusts and other persons connected with them. To the best of the knowledge and belief of the Liberty Directors (who have taken all reasonable care to ensure that such is the case), the information contained in this announcement for which they are responsible is in accordance with the facts and does not omit anything likely to affect the import of such information.
Overseas Shareholders
The distribution of this announcement in jurisdictions other than the UK and the availability of the Offer to Liberty Shareholders who are not resident in the UK may be affected by the laws of relevant jurisdictions. Any persons who are subject to the laws of any jurisdiction other than the UK or Liberty Shareholders who are not resident in the UK will therefore need to inform themselves about, and observe, any applicable requirements.
The Offer is not being, and will not be, made, directly or indirectly, in, into or from the United States, Canada, Australia, Japan or any other Restricted Jurisdiction. Accordingly, copies of this announcement are not being, and must not be, directly or indirectly, mailed, transmitted or otherwise forwarded, distributed or sent in, into or from the United States, Canada, Australia, Japan or any other Restricted Jurisdiction.
Forward-Looking Statements
This announcement contains certain forward-looking statements with respect to the financial condition, results of operations and business of the Liberty Group and certain plans and objectives of the Liberty Directors and the BGL Directors, and these statements are naturally subject to uncertainty and changes in circumstances. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Without limitation, any statements preceded or followed by or that include the words "anticipate", "plan", "believe", "expect", "aim", "intend", "goal", "will", "may", "should", "could", "project", "estimate", or words or terms of similar substance or the negative thereof, are forward-looking statements. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements. These factors include, but are not limited to, the satisfaction of the conditions to the Offer, as well as additional factors, such as changes in economic conditions, changes in the level of capital investment, success of business and operating initiatives and restructuring objectives, customers' strategies and stability, changes in the regulatory environment and fluctuations in interest and exchange rates. Other unknown and unpredictable factors could cause actual results to differ materially from those in the forward-looking statements. Neither BGL nor Liberty nor their respective boards of directors assume any obligation to update or correct the information contained in this announcement, whether as a result of new information, future events or otherwise, except to the extent legally required. The statements contained in this announcement are made as at the date of this announcement, unless some other time is specified in relation to them, and the issue of this announcement shall not give rise to any implication that there has been no change in the facts set out in this announcement since such date.
Profit Forecasts
No statement in this announcement is intended, or is to be construed, as a profit forecast or to be interpreted as meaning that earnings per Liberty Share for the current and future financial years, or those of the combined group, will necessarily match or exceed the historical published earnings per Liberty Share. Rather, these statements should be construed as references to potential enhancements to the earnings that might otherwise have been earned during the relevant financial period.
Dealing Disclosure Requirements
Under Rule 8.3(a) of the City Code, any person who is interested in 1 per cent. or more of any class of relevant securities of an offeree company or of any paper offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the Offer Period and, if later, following the announcement in which any paper offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any paper offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3:30pm on the 10th business day following the commencement of the Offer Period and, if appropriate, by no later than 3:30pm on the 10th business day following the announcement in which any paper offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a paper offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the City Code, any person who is, or becomes, interested in 1 per cent. or more of any class of relevant securities of the offeree company or of any paper offeror, must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any paper offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any paper offeror, save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3:30pm on the business day following the date of the relevant dealing.
If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a paper offeror, they will be deemed to be a single person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4). Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the Offer Period commenced and when any offeror was first identified. If you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure, you should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129.
Online availability of this announcement
A copy of this announcement will be available subject to certain restrictions relating to persons resident in the United States, Canada, Australia, Japan or any other Restricted Jurisdiction, on Liberty's website (www.liberty.co.uk/fcp/content/ investorinformation/content) from the date of this announcement.
Provision of information to BGL
Any Liberty Shareholder, Liberty Option Holder, person with information rights or other relevant person may, for the receipt of communications from Liberty, provide addresses, electronic addresses and certain other information to BGL during the Offer Period.
Appendix A: Conditions and Further Terms of the Offer
Part I: Conditions of the Offer
Acceptances
1. Valid acceptances having been received (and not, where permitted, withdrawn) by not later than 1.00 p.m. on the First Closing Date (or such later time(s) and/or date(s) as BGL may, subject to the rules of the City Code or with the consent of the Panel, decide) in respect of not less than 86.27 per cent. (or such lower percentage as BGL may, subject to the City Code, decide) in nominal value of the Liberty Shares to which the Offer relates and of the voting rights attached to those shares, provided that this condition will not be satisfied unless BGL (together with its wholly-owned subsidiaries) shall have acquired or agreed to acquire (whether pursuant to the Offer or otherwise) Liberty Shares carrying in aggregate more than 50 per cent. of the voting rights then normally exercisable at a general meeting of Liberty, including for this purpose (except to the extent otherwise agreed by the Panel) any such voting rights attaching to Liberty Shares that are unconditionally allotted or issued before the Offer becomes or is declared unconditional as to acceptances, whether pursuant to the exercise of any outstanding conversion or subscription rights or otherwise.
For the purposes of this condition:
(i) Liberty Shares which have been unconditionally allotted but not issued shall be deemed to carry the voting rights they will carry upon issue;
(ii) the expression "Liberty Shares to which the Offer relates" shall be construed in accordance with Chapter 3 of Part 28 of the Companies Act; and
(iii) valid acceptances shall be treated as having been received in respect of any Liberty Shares which BGL shall, pursuant to section 979(8) of the Companies Act, be treated as having acquired or contracted to acquire by virtue of acceptances to the Offer;
2. All necessary notifications, filings or applications under any applicable legislation or regulation of any relevant jurisdiction in connection with the Offer or its implementation having been made and all waiting and other time periods (including any extensions thereof) under any applicable legislation or regulation of any relevant jurisdiction having expired, lapsed or been terminated (as appropriate) and all statutory and regulatory obligations in any relevant jurisdiction having been complied with in each case as may be necessary in connection with the Offer and its implementation or the acquisition by BGL of any shares or other securities in, or control of, Liberty and any member of the Liberty Group and all Authorisations for or in respect of the Offer or the acquisition or proposed acquisition by BGL of any shares or other securities in, or control of, Liberty and any member of the Liberty Group or the carrying on by any member of the Liberty Group of its business or in relation to the affairs of any member of the Liberty Group having been obtained in terms and in a form satisfactory to BGL, acting reasonably; and all such Authorisations remaining in full force and effect at the time at which the Offer becomes otherwise unconditional and there being no notice or intimation of an intention to revoke, suspend, restrict, modify or not to renew such Authorisations and there being no indication that the renewal costs of any Authorisation are likely to be materially higher than the renewal costs for the current Authorisations.
Regulatory Intervention
3. No central bank, government or governmental, quasi-governmental, supranational, statutory, regulatory, environmental, administrative, fiscal or investigative body, court, trade agency, association, authority, institution or any other body or person whatsoever in any jurisdiction (each a "Third Party") having decided to take, institute, implement or threaten any action, proceedings, suit, investigation, enquiry or reference (and in each case, not having withdrawn the same) or having required any action to be taken or having enacted, made or proposed any statute, regulation, decision, order or change to published practice (and in each case, not having withdrawn the same) or otherwise having done anything which would or might reasonably be expected to:
(i) make the Offer, its implementation or the acquisition or proposed acquisition of any shares or other securities in, or control of, Liberty by BGL or any member of the Wider BGL Group void, illegal and/or unenforceable under the laws of any relevant jurisdiction, or otherwise directly or indirectly materially prohibit, restrain, restrict, prevent, delay or otherwise interfere with the implementation of, or impose material additional conditions or obligations with respect to the Offer or the acquisition of any such shares or securities by any member of the Wider BGL Group;
(ii) require, prevent or materially delay the divestiture or materially alter the terms envisaged for such divestiture by any member of the Wider BGL Group of any shares or other securities (or the equivalent) in Liberty or any member of the Liberty Group to an extent which is material in the context of the Liberty Group taken as a whole or the Wider BGL Group taken as a whole (as the case may be);
(iii) require, prevent or materially delay the divestiture or materially alter the terms envisaged for such divestiture by any member of the Wider BGL Group or by any member of the Liberty Group of all or any part of the Liberty Group's businesses, assets or property or impose any material limitation on the ability of any of them to conduct their businesses (or any part thereof) or to own or control any of their assets or properties (or any part thereof) to an extent which is material in the context of the Liberty Group taken as a whole or the Wider BGL Group taken as a whole (as the case may be);
(iv) impose any material limitation on, or result in a material delay in, the ability of any member of the Wider BGL Group directly or indirectly to acquire, hold or exercise effectively, directly or indirectly, all or any rights of ownership in respect of shares or other securities in Liberty or on the ability of any member of the Liberty Group or any member of the Wider BGL Group to hold or exercise effectively, directly or indirectly, all or any rights of ownership in respect of shares or other securities (or the equivalent) in, or to exercise voting or management control over, any member of the Liberty Group;
(v) require any member of the Wider BGL Group and/or any member of the Liberty Group to acquire or offer to acquire or repay any shares, other securities (or the equivalent) or interest in and/or indebtedness of any member of the Liberty Group owned by any third party or any asset owned by any third party (other than in implementation of the Offer);
(vi) result in any member of the Liberty Group ceasing to be able to carry on business under any name under which it presently carries on business;
(vii) impose any material limitation on the ability of any member of the Wider BGL Group or any member of the Liberty Group to integrate or co-ordinate all or any part of its business with all or any part of the business of any other member of the Wider BGL Group and/or the Liberty Group; or
(viii) otherwise adversely affect any or all of the businesses, assets, profits or financial or trading position of any member of the Liberty Group or any member of the Wider BGL Group in a manner which is or may be material in the context either of the Liberty Group taken as a whole or of the obligations of any member of the Wider BGL Group in connection with the Offer,
and all applicable waiting and other time periods during which any such Third Party could decide to take, institute, implement or threaten any such action, proceedings, suit, investigation, enquiry or reference or take any other step under the laws of any jurisdiction in respect of the Offer or the acquisition or proposed acquisition of any Liberty Shares or otherwise intervene having expired, lapsed, or been terminated.
Consequences of the Offer
4. Save as Disclosed, there being no provision of any agreement, arrangement, licence, permit, lease or other instrument to which any member of the Liberty Group is party or by or to which any such member or any of its respective assets is or may be bound, entitled or subject or any circumstance and which, as a direct result of the making or implementation of the Offer or the acquisition or proposed acquisition by BGL of any Liberty Shares or other securities in Liberty or because of a change in the control or management of Liberty or otherwise, provides for or will or may reasonably be expected to result in, any of the following, in each case to an extent which is material in the context of the Liberty Group taken as a whole:
(i) any assets or interests of, or any asset the use of which is enjoyed by, any member of the Liberty Group being or falling to be disposed of or charged or any right arising under which any such asset or interest could be required to be disposed of or charged or could cease to be available to any member of the Liberty Group;
(ii) any monies borrowed by, or other indebtedness (actual or contingent) of, or any grant available to, any member of the Liberty Group being or becoming repayable, or capable of being declared repayable, immediately or earlier than its or their stated repayment date or maturity date, or the ability of any such member to borrow monies or incur any indebtedness being withdrawn, inhibited or prohibited or being capable of becoming or being withdrawn or inhibited;
(iii) the rights, liabilities, obligations, business or interests of any member of the Liberty Group or any member of the Wider BGL Group under any such arrangement, agreement, licence, permit, lease or instrument being terminated or adversely modified or adversely affected;
(iv) the financial or trading position or prospects of, or the value of, any member of the Liberty Group being prejudiced or adversely affected;
(v) the creation or enforcement of any mortgage, charge or other security interest over the whole or any part of the business, property or assets of any member of the Liberty Group;
(vi) the creation of any liability (actual or contingent) by any member of the Liberty Group other than trade creditors or other liabilities incurred in the ordinary course of business;
(vii) any member of the Liberty Group ceasing to be able to carry on business under any name under which it presently carries on business,
and no event having occurred which, under any provision of any agreement, arrangement, licence, permit or other instrument to which any member of the Liberty Group is a party or by or to which any such member or any of its assets may be bound, entitled or subject, is reasonably likely to result in any of the events or circumstances as are referred to in this Condition 4 and which, in each case, would be material in the context of the Liberty Group taken as a whole.
No Corporate Action taken since 31 December 2009
5. Save as Disclosed, since 31 December 2009, no member of the Liberty Group having:-
(i) issued or agreed to issue or authorised or proposed the issue or grant of additional shares of any class, or securities or securities convertible into, or exchangeable for, or rights, warrants or options to subscribe for or acquire, any such shares, securities or convertible securities (save, where relevant, as between Liberty and members of the Liberty Group);
(ii) redeemed, purchased, repaid or reduced or agreed to or announced any proposal to purchase, redeem, repay or reduce any of its own shares or other securities or, save in respect of the matters mentioned in sub-paragraph (i) above, made any other change to any part of its share capital or other securities;
(iii) approved, recommended, declared, paid or made or proposed to recommend, declare, pay or make any dividend, bonus or other distribution (whether payable in cash or otherwise) other than by a subsidiary within the Liberty Group to its parent company;
(iv) save for transactions between Liberty and its wholly-owned subsidiaries, merged with (by statutory merger or otherwise) or demerged from or been acquired by any body corporate, partnership or business or acquired or disposed of, or transferred, mortgaged or charged, or created or granted any security interest over, any material assets or any right, title or interest in any material asset (including shares and trade investments) or authorised, proposed, agreed or announced any intention to do so;
(v) issued, authorised or proposed the issue of or announced its intention to propose the issue of any debentures or make any change in or to any debentures or other loan capital save as between Liberty and its wholly-owned subsidiaries or between such wholly-owned subsidiaries or in the ordinary course of business, incurred or increased any borrowings or indebtedness or become subject to any liability (actual or contingent) to an extent which is material in the context of the Liberty Group taken as a whole;
(vi) entered into or varied or authorised, proposed or announced its intention to enter into or vary any material transaction, arrangement, contract or commitment (whether in respect of capital expenditure or otherwise) which is of a long term, onerous or unusual nature or which is or which involves or might reasonably involve an obligation of a nature or magnitude which is likely to be materially restrictive on the business of any member of the Liberty Group;
(vii) entered into, implemented or effected, or authorised, proposed or announced its intention to enter into, implement, effect or propose any merger, demerger, reconstruction, amalgamation, composition, assignment, commitment, scheme, or other similar commitment or other transaction or arrangement (other than the Offer) otherwise than in the ordinary course of business;
(viii) save in the ordinary course of business, waived or compromised any claim to an extent which is material in the context of the Liberty Group taken as a whole;
(ix) made, or announced any proposal to make, any material change or addition to any retirement, death or disability benefit or other employment-related benefit of or in respect of any of its directors, employees, former directors or former employees;
(x) entered into or varied or made any offer (which remains open for acceptance) to enter into or vary or announced its intention to enter into or vary to any material extent the terms of any contract, agreement or arrangement with any of the directors or senior executives of Liberty or any of the directors or senior executives of any other member of the Liberty Group;
(xi) taken or proposed any corporate action for its bankruptcy, rehabilitation, custodianship, winding-up, dissolution or authorisation or for the appointment of a receiver, administrator, administrative receiver or similar officer (save in the context of a solvent reconstruction of any member of the Liberty Group) or had any such person appointed or been unable or admitted in writing that it is unable to pay 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 all or a substantial part of any of its business or proposed or entered into any composition or voluntary arrangement with its creditors (or any class of them) or the filing at court of documentation in order to obtain a moratorium prior to a voluntary arrangement or analogous procedure or, by reason of actual or anticipated financial difficulties, commenced negotiations with one or more of its creditors with a view to rescheduling or readjusting any of its indebtedness or the making of any composition, assignment or arrangement for the benefit of any class of creditors;
(xii) had any proceedings commenced against it for its bankruptcy, rehabilitation, custodianship, winding-up (voluntary or otherwise), dissolution, striking-off or reorganisation or for the appointment of a receiver, administrator (including the filing of any administration application, notice of intention to appoint an administrator or notice of appointment of an administrator), administrative receiver, trustee or similar officer (whether provisional, interim or permanent) of all or any part of its assets or revenues or for any analogous proceedings or steps in any jurisdiction or for the appointment of any analogous person in any jurisdiction, other than where any proceedings have been presented:-
(a) by a creditor, which are being consented in good faith and with diligence and are discharged within 14 days; or
(b) in the context of a solvent reconstruction of any member of the Liberty Group,
(xiii) no member of the Liberty Group having taken or entered into in a jurisdiction outside the UK any form of insolvency proceeding or event similar or analogous to any of the events referred to in sub-paragraphs (xi) or (xii) above;
(xiv) made any alteration to its memorandum or articles of association or other incorporation documents;
(xv) save in the ordinary course of business, waived or compromised any claim or authorised any such waiver or compromise which is material in the context of the Liberty Group;
(xvi) proposed, agreed to provide or modified the terms of any share option scheme or incentive scheme, or other benefit relating to the employment or termination of employment of any employee of the Liberty Group;
(xvii) made or agreed or consented to any change to the terms of the trust deeds constituting the pension schemes established for its directors and/or employees and/or their dependants or to the benefits which accrue, or to the pensions which are payable, thereunder, or to the basis on which qualification for or accrual or entitlement to such benefits or pensions are calculated or determined or to the basis upon which the liabilities (including pensions) of such pension schemes are funded or made, or agreed or consented to any change of the trustees involving the appointment of a trust corporation;
(xviii) save for intra Liberty Group transactions, no member of the Liberty Group having granted any lease or third party rights in respect of any of the leasehold or freehold property owned or occupied by any member of the Liberty Group or transferred or otherwise disposed of any such property; or
(xix) entered into any agreement, arrangement, commitment or contract or passed any resolution or made any offer (which remains open for acceptance) with respect to or announced an intention to, or to propose to, effect any of the transactions, matters or events referred to in this Condition 5.
Other Events since 31 December 2009
6. Since 31 December 2009, and save as Disclosed:
(i) no litigation, arbitration proceedings, prosecution or other legal proceedings having been announced, instituted, threatened or remaining outstanding by, against or in respect of, any member of the Liberty Group or to which any member of the Liberty Group is or is reasonably likely to become a party (whether as claimant, defendant or otherwise) and no enquiry or investigation by, or complaint or reference to, any Third Party against or in respect of any member of the Liberty Group having been announced, instituted or threatened in writing by, against, or remaining outstanding in respect of, any member of the Liberty Group, in each case which is material and adverse in the context of the Liberty Group taken as a whole;
(ii) there having been no adverse event, change or deterioration in the business, assets, financial or trading position or prospects or profits of any member of the Liberty Group which is material in the context of the Liberty Group taken as a whole; and
(iii) no contingent or other liability having arisen or become known to Liberty or increased other than in the ordinary course of business which is reasonably likely adversely to affect the business, assets, financial or trading position or profits or prospects of any member of the Liberty Group to an extent which is material to the Liberty Group taken as a whole.
Other Issues
7. Save as Disclosed, BGL not having discovered:
(i) that any financial, business or other information concerning the Liberty Group Disclosed at any time by or on behalf of any member of the Liberty Group is misleading or contains a misrepresentation of fact or omits to state a fact necessary to make that information not misleading (and which information was not subsequently corrected before the date of this announcement by disclosure publicly by an announcement to a Regulatory Information Service or privately in writing to BGL or its advisers or through the inclusion in a data room);
(ii) any information which affects the import of any information Disclosed (and which information was not subsequently corrected before the date of this announcement by disclosure publicly by an announcement to a Regulatory Information Service or privately in writing to BGL or its advisers or through the inclusion in a data room),
in each case to an extent which is material and adverse in the context of the Liberty Group taken as a whole; or
(iii) that any asset of any member of the Liberty Group constitutes criminal property as defined by section 340(3) of the Proceeds of Crime Act 2002 (but disregarding paragraph (b) of that definition) to an extent which is material in the context of the Liberty Group taken as a whole;
(iv) that any member of the Liberty Group has not complied with any applicable law or regulation governing the conduct of its business in any respect which would or might be reasonably likely to affect adversely the Liberty Group taken as a whole.
8. Save as Disclosed, BGL not having discovered that:
(i) any past or present member of the Liberty Group has not complied with any applicable legislation or regulations of any jurisdiction with regard to the use, treatment, handling, storage, transport, release, disposal, discharge, spillage, leak or emission of any waste or hazardous substance or any substance reasonably likely to impair the environment or harm human health or otherwise relating to environmental matters or the health and safety of any person, or that there has otherwise been any such use, treatment, handling, storage, transport, release, disposal, discharge, spillage, leak or emission (whether or not this constituted non-compliance by any person with any legislation or regulations and whether the same has taken place) which, in any case, would be reasonably likely to give rise to any ability (whether actual or contingent) or cost on the part of any member of the Liberty Group which in any case is material in the context of the Liberty Group taken as a whole; or
(ii) there is, or is reasonably likely to be any liability, whether actual or contingent, to make good, alter, improve, repair, reinstate, clean up or otherwise assume responsibility for any property now or previously owned, occupied, made use of or in respect of which a guarantee or other similar obligation has been assumed by any past or present member of the Liberty Group or any other property or any controlled waters under any environmental legislation regulation, notice, circular, order or other lawful requirement of any relevant authority or third party or otherwise which in any case is material in the context of the Liberty Group taken as a whole.
References in this Part I of this Appendix A to "Disclosed" means fairly disclosed (with sufficient details to identify the nature and extent of the matter being disclosed) to BGL or its advisers prior to the date of this announcement either by inclusion in this announcement, in the annual report and accounts of Liberty for the financial year ended 31 December 2009, or by the delivery of a document by or on behalf of Liberty to a Regulatory Information Service, or disclosed in writing to, or agreed in writing with, BGL or its advisers by Liberty or its advisers.
Part II: Further terms of the Offer
Subject to the requirements of the Panel, BGL reserves the right to waive in whole or in part all or any of the conditions contained in paragraphs 2 to 8 inclusive of Part I of this Appendix A. The conditions contained in paragraph 2 to 8 inclusive of Part I of this Appendix A must be satisfied as at, or waived (where possible) on or before, the twenty-first day after the later of the First Closing Date and the date on which the condition in paragraph 1 is fulfilled (or, in each case such later date as the Panel may agree). BGL shall be under no obligation to waive or determine to be or treat as fulfilled, any of conditions 2 to 8 inclusive contained in Part I of this Appendix A by a date earlier than the date specified above for the fulfilment thereof, notwithstanding that the other conditions of the Offer may at such earlier date have been waived or fulfilled and that there are at such earlier date no circumstances indicating that any of such conditions may not be capable of fulfilment.
If BGL is required by the Panel to make an offer for Liberty Shares under the provisions of Rule 9 of the City Code, BGL may make such alterations to the terms and conditions of the Offer as are necessary to comply with the provisions of that Rule.
The Offer will comply with the applicable rules and regulations of AIM and the City Code, will be governed by English law and will be subject to the jurisdiction of the courts of England. In addition, it will be subject to the terms and conditions as set out in this announcement and the Form of Acceptance (in respect of certificated Liberty Shares).
Appendix B
Further Information and Sources and Bases of Information
Bases and sources of information
In this announcement, unless otherwise stated or the context otherwise requires, the following bases and sources have been used:
(a) historic share prices are sourced from the AIM appendix to the Daily Official List of the London Stock Exchange and represent closing middle market prices for Liberty Shares on the relevant date;
(b) the value of the existing issued share capital of Liberty is based upon the entire issued share capital at the date of this announcement, namely 22,602,808 Liberty Shares;
(c) references to a percentage of Liberty Shares are based on the number of Liberty Shares in issue as set out at paragraph (b);
(d) unless otherwise stated, the financial information relating to Liberty has been extracted from the annual report and accounts of Liberty for the year ended 31 December 2009;
(e) information relating to Liberty has been extracted from published sources or provided by the Liberty Directors and persons duly authorised by Liberty;
(f) information relating to BGL has been extracted from published sources or provided by the BGL Directors and persons duly authorised by BGL; and
(g) reference to the aggregate consideration receivable by Liberty Shareholders pursuant to the Offer (including the Special Dividend) representing a multiple of 26.9 times Liberty's pro forma EBITDA before brand expenditure and reorganisation costs for the year ended 31 December 2009 and after deducting the initial annual rent payable under the Liberty Lease is based on: (i) the aggregate amount receivable by Liberty Shareholders of £42.0 million; (ii) the net debt of Liberty as at 31 December 2009 sourced from Liberty's annual report and accounts for the year ended 31 December 2009; (iii) the net cash proceeds of the sale of the Tudor Building; (iv) EBITDA before brand expenditure and reorganisation costs sourced from Liberty's annual report and accounts for the year ended 31 December 2009; and (v) the initial annual rent of £2.1 million payable under the Liberty Lease.
Disclosure of interests in Liberty
The disclosure in paragraph 12 of this announcement regarding interests in Relevant Liberty Securities are based on the position as at 18 May 2010, the last practicable date prior to this announcement.
Appendix C
Details of Irrevocable Undertakings
The following Liberty Shareholders have entered into hard irrevocable undertakings with BGL to accept the Offer in respect of their beneficial holdings of Liberty Shares:-
| Liberty Shareholder | Number of Liberty Shares held |
| MWB Retail Stores Shareholder Limited | 15,440,412 |
| Cartesian Partners LP | 2,359,177 |
| Principle Capital Investments Limited | 1,693,541 |
| MWB Management Services Limited | 6,997 |
| TOTAL | 19,500,127 |
These undertakings will continue to be binding even in the event of a higher competing offer for Liberty, and will only lapse if the Offer lapses or is withdrawn.
Appendix D
Definitions
The following definitions apply throughout this announcement unless the context otherwise requires:
| "AIM" | the AIM market operated by the London Stock Exchange |
| "AIM Rules" | the AIM Rules for Companies published by the London Stock Exchange |
| "Australia" | the Commonwealth of Australia, its states, territories and possessions and all areas subject to its jurisdiction and any political sub-division thereof |
| "Authorisations" | authorisations, orders, recognitions, confirmations, consents, licences, clearances, certificates, permissions or approvals |
| "BGL" | BlueGem Gamma Limited, a company incorporated in England and Wales with registered number 7231996 and having its registered office at 16 Berkeley Street, London, W1J 8DZ |
| "BGL Directors" | the board of directors of BGL, being Marco Capello and Emilio di Spiezio Sardo |
| "BGL Group" | BGL and its subsidiary undertakings and, where the context permits, each of them |
| "BlueGem Capital Partners LLP" | BlueGem Capital Partners LLP a limited liability partnership incorporated in England and Wales with registered number OC321570 and having its registered office at 16 Berkeley Street, London, W1J 8DZ |
| "BlueGem L.P." | BlueGem Limited Partnership, an English limited partnership with registered number LP011796 and having its registered office at 50 Lothian Road, Festival Square, Edinburgh, EH3 9WJ |
| "business day" | a day (other than a Saturday and a Sunday) on which banks are generally open for non-automated business in London |
| "Canada" | Canada, its provinces and territories and possessions and all areas subject to its jurisdiction and any political sub-division thereof |
| "Cavendish Corporate Finance LLP" | Cavendish Corporate Finance LLP, a limited liability partnership registered in England under number OC333044 having its registered office at 40 Portland Place, London, W1B 1NB, being financial adviser to Liberty in respect of the Offer |
| "certificated" or "certificated form" | in relation to a share or other security, a share or other security, title to which is recorded in the relevant register of the share or other security as being held in certificated form (that is, not in CREST) |
| "City Code" | the City Code on Takeovers and Mergers |
| "Closing Price" | the closing middle market price of a Liberty Share, as derived from the AIM appendix to the Daily Official List of the London Stock Exchange |
| "Companies Act" | the Companies Act 2006, as amended from time to time |
| "CREST" | the relevant system (as defined in the Regulations) in respect of which Euroclear is the operator (as defined in the Regulations) |
| "Disclosed" | has the meaning set out in Part I of Appendix A to this announcement |
| "EBITDA" | earnings before interest, tax, depreciation and amortisation |
| "Euroclear" | Euroclear UK & Ireland Limited, the operator of CREST |
| "First Closing Date" | the date which is 21 days following the posting of the Offer Document |
| "Form of Acceptance" | the form of acceptance and authority relating to the Offer which will accompany the Offer Document for use by Liberty Shareholders with shares in certificated form in connection with the Offer |
| "FSA" | the Financial Services Authority |
| "Global Leisure Partners LLP" | Global Leisure Partners LLP, a limited liability partnership registered in England under number OC307522 having its registered office at 17/18 Old Bond Street, W1S4PT, being financial adviser to Liberty in respect of the Offer |
| "Hawkpoint Partners Limited" | Hawkpoint Partners Limited, a company incorporated in England and Wales with registered number 3875835 and having its registered office at 41 Lothbury, London, EC2R 7AE, being authorised and regulated in the UK by the FSA, being financial advisers to BGL in connection with the Offer |
| "Japan" | Japan, its cities, prefectures, territories and possessions and all areas subject to its jurisdiction and any political sub-division thereof |
| "Liberty" | Liberty plc, a company incorporated in England and Wales with registered number 3967671 and having its registered office at 179 Great Portland Street, London, W1W 5LS |
| "Liberty Board" or "Liberty Directors" | the directors of Liberty, being Richard Balfour Lynn, Geoffroy de La Bourdonnaye, Paul Harris, Jagtar Singh, John Harrison FRICS, Brian Myerson and James Peggie |
| "Liberty Group" | Liberty and its subsidiary undertakings and where the context permits, each of them |
| "Liberty Lease" | the new lease entered into by Liberty on 11 May 2010 in relation to the Tudor Building |
| "Liberty Option Holder" | a holder of share options under Liberty Share Option Scheme and "Liberty Option Holders" shall be construed accordingly |
| "Liberty Preference Shares" | the existing issued and fully paid 6 per cent. cumulative non-redeemable preference shares of £1.00 each in the capital of Liberty |
| "Liberty Preference Shareholder" | a holder of Liberty Preference Shares and "Liberty Preference Shareholders" shall be construed accordingly |
| "Liberty Shares" | the existing issued or unconditionally allotted and fully paid ordinary shares of 25 pence each in the capital of Liberty and any further shares which are unconditionally allotted or issued before the date on which the Offer closes (or such earlier date or dates, not being earlier than the date on which the Offer becomes unconditional as to acceptances or, if later, the First Closing Date of the Offer, as BGL may decide) but excluding in both cases any such shares held or which become held in treasury |
| "Liberty Shareholder" | a holder of Liberty Shares and "Liberty Shareholders" shall be construed accordingly |
| "Liberty Share Option Scheme" | the Liberty 2009 Executive Share Option Scheme |
| "London Stock Exchange" | London Stock Exchange plc |
| "MWB" | MWB Group Holdings plc, a company incorporated in England and Wales with registered number 6487877 and having its registered office at 30 City Road, London, EC1Y 2AG; |
| "Offer" | the recommended cash offer to be made by BGL to acquire all of the issued Liberty Shares on the terms and subject to the conditions to be set out in the Offer Document and (in respect of Liberty Shares in certificated form) the Form of Acceptance, including, where the context so permits or requires, any subsequent revision, variation, extension or renewal thereof |
| "Offer Document" | the document to be sent to Liberty Shareholders (other than certain Overseas Shareholders) containing and setting out the terms and conditions of the Offer |
| "Offer Period" | the period commencing on 12 March 2010 and ending on the First Closing Date or, if later, on the date on which the Offer becomes or is declared unconditional as to acceptances or lapses or is withdrawn |
| "Overseas Shareholders" | Liberty Shareholders (or nominees of, or custodians or trustees for Liberty Shareholders) not resident in or citizens of the UK |
| "p", "pence" or "£" | the lawful currency of the UK |
| "Panel" | the Panel on Takeovers and Mergers |
| "Regulations" | the Uncertificated Securities Regulations 2001 |
| "Regulatory Information Service" | any information service authorised from time to time by the FSA |
| "Restricted Jurisdiction" | any jurisdiction where local laws or regulations may result in a significant risk of civil, regulatory or criminal exposure if information concerning the Offer is sent or made available to Liberty Shareholders in that jurisdiction |
| "Significant Interest" | a direct or indirect interest of 20 per cent. or more of the total voting rights conferred by the equity capital of an undertaking |
| "Special Dividend" | the special dividend of 44.2 pence per Liberty Share (or £10.0 million in aggregate) intended to be resolved to be paid by the Liberty Board and expected to be paid within seven days of the date on which the Offer becomes or is declared wholly unconditional |
| "subsidiary" and "subsidiary undertaking" | to be construed in accordance with the Companies Act |
| "Tudor Building" | the freehold mock Tudor building and Muji building, Great Marlborough Street, London, W1 |
| "UK" | the United Kingdom of Great Britain and Northern Ireland |
| "United States" or "US" | the United States of America, its territories and possessions, any state of the United States, the District of Columbia and all other areas subject to its jurisdiction and any political sub-division thereof |
| "Wider BGL Group" | BGL Group and associated undertakings and any other body corporate, partnership, joint venture or person in which BGL and such undertakings (aggregating their interests) have a Significant Interest |
All references to legislation in this announcement are to UK legislation unless the contrary is indicated. Any reference to any provision of any legislation shall include any amendment, modification, extension or re-enactment thereof.
All references to time in this announcement are to London time. Words in this announcement importing the singular shall include the plural and vice versa.