PAM.L Regulatory News (PAM)

30 Jul 2007 09:00

Water Hall Group Plc30 July 2007 30 July 2007 Water Hall Group plc ("WHG") Re: Premier Asset Management PLC ("Premier") Intention to vote against Premier EGM resolutions and not to accept current Offer for Premier Water Hall Group plc ("WHG"), which owns 4.82% of the issued share capital ofPremier Asset Management PLC ("Premier"), announces that it has today written tothe shareholders of Premier in relation to the offer by Harvard Bidco Limited toacquire entire issued share capital of Premier ("the Offer"). In its letter, WHG states its intention to vote against the resolutions to beput to an EGM of Premier shareholders on 6 August and that it does not intend toaccept the Harvard Bidco Offer. WHG believes that Premier has not reached its true value and potential. Premier is a well established business displaying strong organic growth: • Since March 2005, funds under management have nearly tripled to £1.8billion • Recent operating results have shown substantial increases in turnover,profit before tax, margins and earnings per share • Dividends were resumed last year with the board of Premier anticipatingincreasing dividends in future years. Furthermore, certain directors of Premier stated in the 2006 Annual Report thatPremier is "excited about the prospects for each of the business lines" and "thebusiness is better placed today than ever to grow its profitability over thecoming years." WHG has a high regard for the achievements and capabilities of the executivedirectors of Premier and does not seek to recommend any changes to the executiveor management team. If the Offer for Premier fails to receive sufficient support from shareholdersand is therefore unsuccessful, WHG will seek an early meeting with Premier'sexecutives to discuss the possibilities and opportunities for the development ofthe business generally and the opportunities in the Middle East, particularlySaudi Arabia. WHG believes that, in addition to the strong organic growth Premier is alreadyachieving, it has the potential to develop further by expanding its investorbase and suite of products into other markets. Enquiries: Raschid Abdullah, Chairman Water Hall Group plc+44 1483 452 333 David Bick/Mike Feltham Holborn Public Relations+44 207 929 5599 The full text of the WHG letter to Premier shareholders follows: Parallel HouseWater Hall Group plc32 London RoadGuildfordGU1 2ABENGLAND Tel: 0044 1483 452 333Fax: 0044 1483 563 805 TO THE SHAREHOLDERS OF PREMIER ASSET MANAGEMENT PLC 27 July 2007 Dear Premier Shareholder, WHY WATER HALL GROUP PLC WILL BE VOTING AGAINST THE RESOLUTIONS TO BE PROPOSEDAT THE EGM OF PREMIER ASSET MANAGEMENT PLC TO BE HELD ON 6 AUGUST 2007 AND WHYIT DOES NOT CURRENTLY INTEND TO ACCEPT THE OFFER FROM THE MANAGEMENT LED HARVARDBIDCO IN RESPECT OF ITS SHAREHOLDING IN PREMIER ASSET MANAGEMENT PLC Water Hall Group plc ("WHG") is a fellow shareholder in your company, PremierAsset Management plc ("Premier"), having acquired in October 2006 and April 2007for investment purposes approximately 690,000 ordinary shares representingapproximately 4.49% of Premier's issued share capital. Prior to making its initial investment in Premier in October 2006, the directorsof WHG had identified it as a fund management company whose true value andpotential had not been recognised by the market. While the shares had risen to a high of 237.5p, being the mid-market closingprice on 23 February 2007 (some 17% below the present offer price), WHG regardedPremier as having real growth prospects and considered its investment in Premierto be for the long term. In this light, WHG acquired further shares in April2007. Since the announcement of the offer for the shares of Premier on 16 July 2007from Harvard Bidco (the "Offer"), as at close of business on 26 July 2007, WHGhas acquired a further 50,683 of Premier's ordinary shares at prices rangingbetween 282p and 283p and now owns 4.82% of Premier's issued share capital. The Offer document states that under the funding arrangements for the Offer,Harvard Bidco will not be in a position to declare the Offer unconditional as toacceptances until it has received valid acceptances of the Offer representingnot less than 90 per cent of Premier shares to which the Offer relates unlesssuch condition is waived by Electra Investors. Since Premier is a well established business displaying strong organic growth,the directors of WHG believe that the Offer does not reflect fair value for itsshareholding or the growth prospects and potential for its investment for thefollowing reasons: • Since March 2005, funds under management have nearly tripled from £605million to in excess of £1.8 billion at the time of the announcement of theOffer. • For the year to 30 September 2006, the board of Premier announced that: - Turnover had increased by 82% to £15.72 million from £8.64 million - Profit before tax and amortisation was £1.257 million, an increase of 253%over the previous year - Margins of 8.0% on sales were up from 4.1% for the previous year - Earnings per Share had risen by 128% to 8.35p from 3.66p • After an absence of some years, an equity dividend of 1.5p per share wasdeclared for the year ended 30 December 2005 with the Board announcing that itanticipated increasing the dividend in future years. • In his Statement in the Annual Report and Accounts for the year ended 30September 2006 (the "2006 Annual Report"), your Chairman said: "Your Board isexcited about the prospects for each of the business lines" and "....in theabsence of a major equity market correction, we anticipate further success inbuilding funds under management". • These comments were further supported by the Chief Executive, who is nowleading the Offer, who informed shareholders in the 2006 Annual Report that overthe previous twelve months the three objectives, which were "to complete theintegration of acquisitions, to maintain and improve organic growth and to builda business so that it can achieve sustainable profitability", had beensuccessfully achieved. • He also told shareholders: "we believe that the business is better placedtoday than ever to grow its profitability over the coming years" and, lookingforward, "There is however, still much to do if we are to achieve our objectivesfor funds under management and profitability during the next five years, so wewill not be relaxing just yet". • The confidence expressed by the Board was reinforced in the InterimResults Announcement made on 21 May 2007, when, for the six month period ended31 March 2007, the Chairman informed shareholders that: - Turnover had increased by 44% over the comparable period of the previousyear to £10.1 million from £7.0 million - Profit before tax and amortisation of £1.01 million was a 92% increase overthat of the previous year of £0.5 million. - Basic earnings per share after tax, but before amortisation, had increasedby 69% to 6.16p from 3.64p • In his statement accompanying the Interim Results, the Chairman toldshareholders: "Progress within the three key divisions ..... continues to exceedour earlier expectations" and "....your board remains optimistic on the outlookfor the remainder of the year and beyond". WHG has a high regard for the achievements and capabilities of the executivedirectors of Premier and its management team. Indeed, WHG believes the currentmanagement team has demonstrated that the prospects for the further developmentof Premier are excellent. Accordingly, WHG does not seek to suggest or recommendany changes to the executive and management team. The results referred to above and the accompanying statements, together with ourconfidence in Premier's executive and management team, lends support to our firmview that the business of Premier is at an early stage of its recovery and hassignificant future potential. As such, we consider it premature to realise ourinvestment in Premier since we do not believe that we will achieve full valuefor our investment at this time. Also, contrary to the statements in the HarvardBidco Offer document, we believe that the potential to develop Premier'sbusiness can be achieved in a quoted environment. Accordingly, we are writing to inform you that WHG does not currently intend toaccept the Offer and that it intends to vote against the resolutions to beproposed at the forthcoming extraordinary general meeting of Premier'sshareholders convened for 6 August 2007. If the Offer fails to receive sufficient support from shareholders and istherefore unsuccessful, WHG will seek an early meeting with Premier's executivesto discuss the possibilities and opportunities for the development of thebusiness generally and the opportunities in the Middle East. In particular, WHGbelieves that the ability to leverage off its contacts and networks in theMiddle East, particularly Saudi Arabia, may potentially enhance Premier'sbusiness by, inter alia, widening its operational base and geographical scopeand broadening its investment platforms and offerings. We believe that, inaddition to the strong organic growth Premier is already achieving, it has thepotential to develop further by expanding its investor base and suite ofproducts into other markets. When making its investment, WHG invested in what it believed to be an excellentbusiness with good management whose turnaround would take a number of yearsbefore the full benefits of that investment would be realised. We have no reasonto change that view and we remain firmly of the view that now is not the righttime to realise our investment. In closing, we would stress that neither WHG nor its directors are authorised toprovide financial advice to Premier's shareholders and therefore this letter andits contents refer only to WHG's own views in respect of its own and continuedinvestment in Premier and its intentions in respect of that investment andshould only be read and construed in that context. Yours sincerely Raschid AbdullahChairmanWater Hall Group plc This information is provided by RNS The company news service from the London Stock Exchange