22 Sep 2010 07:00
FOR IMMEDIATE RELEASE
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION
22 September 2010
RECOMMENDED CASH OFFER
BY
REDHALL GROUP Plc
FOR
MOUNT ENGINEERING PLC
SUMMARY
The Boards of Redhall and Mount are pleased to announce that they have reached agreement on the terms of a recommended cash offer for the entire issued and to be issued share capital of Mount (excluding Treasury Shares). It is intended that the Offer will be implemented by way of a public offer under the City Code.
§ Under the terms of the Offer, Mount Shareholders will receive 70 pence in cash for each Mount Share. The Offer values the whole of the currently issued share capital of Mount (excluding Treasury Shares) at approximately £16.42 million in aggregate.
§ The Offer Price of 70 pence per Mount Share represents a premium of approximately:
- 26.13 per cent. over the Closing Price of 55.50 pence per Mount Share on 21 September 2010, being the last Business Day prior to the date of this announcement; and
- 24.35 per cent. over the average Closing Price of 56.29 pence per Mount Share for the six month period immediately prior to the commencement of the Offer Period.
§ The Mount Directors, who have been so advised by Charles Stanley, consider the terms of the Offer to be fair and reasonable so far as the Mount Shareholders are concerned as a whole. In providing its advice to the Mount Directors, Charles Stanley has taken into account the Mount Directors' commercial assessment of the Offer. Accordingly, the Mount Directors unanimously recommend Mount Shareholders to accept the Offer as the Mount Directors who hold a total of 2,086,000 Mount Shares, have irrevocably undertaken to do in respect of their entire beneficial holdings of 2,086,000 Mount Shares, representing, in aggregate, approximately 8.89 per cent. of the existing issued share capital of Mount (excluding Treasury Shares). Together with the 45,834 Mount Shares held by other senior management of Mount, Redhall has received irrevocable undertakings to accept the Offer from the Mount Directors and such other senior management in respect of 2,131,834 Mount Shares representing, in aggregate, 9.09 per cent. of the existing issued share capital of Mount (excluding Treasury Shares).
§ Redhall has received irrevocable undertakings from other Mount Shareholders to accept the Offer in respect of, in aggregate, 6,386,101 Mount Shares representing approximately 27.23 per cent. of Mount's existing issued share capital (excluding Treasury Shares).
§ Redhall has received non legally-binding letters of intent from Mount Shareholders to accept the Offer from certain institutional shareholders in respect of, in aggregate, 2,047,679 Mount Shares, representing approximately 8.73 per cent. of Mount's existing issued share capital (excluding Treasury Shares).
§ In aggregate, including the shareholdings of the Mount Directors, other senior management of Mount and certain institutional shareholders, Redhall has received irrevocable undertakings or non-legally binding letters of intent to accept the Offer in respect of 10,565,614 Mount Shares, representing approximately 45.04 per cent. of the existing issued ordinary share capital of Mount (excluding Treasury Shares).
§ The Redhall Shares are quoted on AIM and on the last Business Day prior to the date of this announcement, such shares had a market capitalisation of approximately £37 million. Redhall is a leading niche engineering support services group operating in the energy, defence and process sectors. Redhall supports its blue chip client base using its integrated offering of design, manufacture, installation, maintenance and decommissioning. Redhall aims to establish sustainable, profitable growth to create value and opportunity for all of its stakeholders.
§ Mount was incorporated on 30 April 2007 and acquired the entire issued share capital of Mount (York) Limited on 2 July 2007. The Mount Group is involved in the manufacture and supply of threaded adaptors and reducers, certified for use in potentially explosive or hazardous areas. Mount also stocks and provides industrial valves and actuators. The major end user markets are the oil and gas and petrochemical industries, however, Mount also serves a range of other industrial markets including mining, waste water, dust extraction and pharmaceuticals. For the financial year ended 31 December 2009, Mount reported turnover of £9.3 million and profit before tax of £2.7 million. Revenues for the six month period ended 30 June 2010 declined by 7 per cent. to £4.6 million and profit before taxation was £1.2 million.
§ The Redhall Board believes that the Offer will:
o increase the Redhall Group's existing presence in the oil and gas sector, particularly internationally, in line with its stated strategy;
o strengthen the Redhall Group's existing specialist manufacturing capability for specialist equipment engineered for high hazard markets;
o strengthen the Redhall Group's existing sales channels and provide cross-selling opportunities with its existing specialist manufacturing businesses, particularly Booth Industries; and
o increase the proportion of the Redhall Group's earnings of a repeat and cash generative nature, whilst also improving operating margins.
Commenting on the Offer, David Jackson, Executive Chairman of Redhall, said:
"We are delighted to bring the Mount business into the Redhall Group. We believe this acquisition will deliver significant improvement in operating margin and will strengthen the Redhall Group's presence within the global oil and gas markets, furthering our ability to cross-sell the Redhall brand within our expanding client base."
Commenting on the Offer, Alan McClue, Executive Chairman of Mount said:
"We believe that integrating Mount's brand leading products into Redhall's specialist manufacturing business focussing on high hazard markets will assist Redhall in the development of those global markets. We believe that the Offer represents a good opportunity for Mount Shareholders who wish to realise their investment."
This summary should be read in conjunction with, and is subject to, the full text of this announcement including the Appendices to this announcement.
Altium is acting as sole financial adviser and corporate broker to Redhall and Charles Stanley is acting as financial adviser to Mount, in each case, in connection with the Offer.
The Offer, will, when made, be subject to the Conditions set out in Appendix I to this announcement and further terms which will be set out in the Offer Document. Appendix II contains the bases and sources of certain information contained in this summary and in the following announcement. Appendix III contains the definitions of certain terms used in this announcement.
Enquiries:
Redhall Tel: 01924 385386
David Jackson, Executive Chairman
Simon Foster, Group Chief Executive
John O'Kane, Group Finance Director
Altium (Financial Adviser and corporate broker to Redhall) Tel: 0845 505 4343
Simon Lord
Paul Lines
Charles Stanley (Financial Adviser to Mount) Tel: 020 7149 6000
Mark Taylor
Carl Holmes
Buchanan (Financial PR to Redhall) Tel: 020 7466 5000
Tim Anderson
Isabel Podda
In accordance with Rule 2.10 of the City Code, Mount confirms that on 22 September 2010 it has 24,401,429 ordinary shares of 1 penny each in issue all with equal voting rights. Mount holds 945,357 ordinary shares in treasury. The total number of voting rights in Mount is therefore 23,456,072. The International Securities Identification Number for Mount ordinary shares is GB00B1XH2205.
Altium, which is authorised and regulated in the United Kingdom by the FSA, is acting exclusively for Redhall and no one else in connection with the Offer, the contents of this announcement, the Offer Document or the Form of Acceptance and will not be responsible to anyone other than Redhall for providing the protections afforded to clients of Altium, nor for providing advice in relation to the Offer, the contents of this announcement, the Offer Document or the Form of Acceptance.
Altium has given and not withdrawn its consent to the issue of this announcement with the inclusion of the references to its name in the form and context in which they appear.
Charles Stanley, a trading division of Charles Stanley & Co. Limited, which is authorised and regulated in the United Kingdom by the FSA, is acting exclusively for Mount and no one else in connection with the Offer, the contents of this announcement, the Offer Document or the Form of Acceptance and will not be responsible to anyone other than Mount for providing the protections afforded to customers of Charles Stanley nor for providing advice in relation to the Offer, the contents of this announcement, the Offer Document or the Form of Acceptance.
Charles Stanley has given and not withdrawn its consent to the issue of this announcement with the inclusion of the references to its name in the form and context in which they appear.
The Offer will be subject to the applicable requirements of the City Code. The formal Offer Document, setting out the terms and conditions of the Offer, and, in the case of Mount Shareholders holding Mount Shares in certificated form, the Form of Acceptance, is expected to be dispatched to Mount Shareholders shortly and, in any event, within 28 days of the date of this announcement unless the Panel otherwise consents.
This announcement is for information purposes only and is not intended to and does not constitute, or form part of, an offer to sell or invitation to purchase or the solicitation of an offer to subscribe for any securities or the solicitation of any vote or approval in any jurisdiction pursuant to the Offer or otherwise, nor will there be any purchase or transfer of the securities referred to in this announcement in any jurisdiction in contravention of applicable law or regulation. The Offer will be made solely through the Offer Document and, in the case of certificated Mount Shares, the Form of Acceptance accompanying the Offer Document, which will contain the full terms and conditions of the Offer, including details of how to accept the Offer. Any acceptance or other response to the Offer should be made only on the basis of the information in the Offer Document and, in the case of certificated Mount Shares, the Form of Acceptance.
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 and/or regulations of jurisdictions outside the UK. Any person (including, without limitation, any custodian, nominee and trustee) who would, or otherwise intends to, or who may have a contractual or legal obligation to, forward this announcement and/or the Offer Document and/or any other related document to any jurisdiction outside the UK should inform themselves of, and observe, any applicable legal or regulatory requirements of their jurisdiction.
This announcement does not constitute a prospectus or a prospectus equivalent document.
The release, publication or distribution of this announcement in jurisdictions other than the UK may be restricted by the laws and/or regulations of those jurisdictions and therefore any persons who are subject to the laws and/or regulations of any jurisdiction other than the UK should inform themselves of, and observe, any applicable legal or regulatory requirements of any such jurisdiction. Any failure to comply with the applicable requirements may constitute a violation of the laws and/or regulations of any such jurisdiction. If any Mount Shareholder remains in any doubt such Mount Shareholders should consult his professional adviser in the relevant jurisdiction.
Unless otherwise determined by Redhall or required by the City Code and permitted by applicable laws and regulations, subject to certain exemptions, the Offer is not being made, directly or indirectly, in or into and will not be capable of acceptance from or within, a Restricted Jurisdiction. Accordingly, copies of this announcement, the Offer Document, the Form of Acceptance and any other accompanying document must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in, into or from any Restricted Jurisdiction and persons receiving such documents (including custodians, nominees and trustees) must not mail or otherwise, distribute or send them in, into or from such jurisdiction as doing so may invalidate any purported acceptance of the Offer.
To the extent permitted by applicable law and in accordance with normal UK practice, Redhall, or its nominee or brokers (acting as agents), may from time to time make certain purchases of, or arrangements to purchase, Redhall Shares other than pursuant to the Offer, such as in open market or privately negotiated purchases during the period in which the Offer remains open for acceptance. Such purchases, or arrangements to purchase, must comply with English law, the City Code, the AIM Rules and other applicable law.
The Redhall Directors accept responsibility for the information contained in this announcement, save that the only responsibility accepted by them in respect of the information in this announcement relating to Mount, which has been compiled from published sources, is to ensure that such information has been correctly and fairly reproduced and presented. To the best of the knowledge and belief of the Redhall Directors (who have taken all reasonable care to ensure that such is the case), the information contained in this announcement for which they accept responsibility is in accordance with the facts and does not omit anything likely to affect the import of such information.
Cautionary Note Regarding Forward-Looking Statements
This announcement may contain "forward-looking statements" concerning the Redhall Group and/or the Mount Group and/or the Enlarged Group. All statements other than statements of historical fact included in this document may be forward-looking statements. Without limitation, any statements preceded or followed by or that include the words "will", "may", "targets", "plans", "continue", "believes", "expects", "intends", "anticipates", "aims", "estimates" or words or terms of similar substance or the negative thereof identify forward-looking statements. Forward looking statements include statements relating to the following: (i) future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects; (ii) business and management strategies and the expansion and growth of the Redhall Group's, or the Enlarged Group's operations; and (iii) the effects of government regulation on the Redhall Group's or the Enlarged Group's business.
These forward-looking statements are not guarantees of future performance. They have not been reviewed by the auditors of Mount or of Redhall. These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements of any such person, or industry results, to be materially different from any results, performance or achievements expressed or implied to differ materially from those expressed in the forward-looking statements. These forward-looking statements are based on numerous assumptions regarding the present and future business strategies of such persons and the environment in which each will operate in the future. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date they were made. All subsequent oral or written forward-looking statements attributable to the Redhall Group or the Mount Group or any of their members or any persons acting on their behalf are expressly qualified in their entirety by the cautionary statement above. All forward-looking statements included in this document are based on information available to the relevant parties on the date of this document. Investors should not place undue reliance on forward-looking statements, and neither Mount, Redhall nor any members of their respective Group, directors undertake any obligation in respect of, and do not intend to update or revise any forward-looking statements, except as required by the City Code, Disclosure and Transparency Rules, AIM Rules and/or pursuant to any other applicable law.
Disclosure requirements of the City Code
Under Rule 8.3(a) of the City Code, any person who is interested in one per cent. or more of any class of relevant securities of Mount must make an Opening Position Disclosure following the commencement of the Offer Period. 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 Mount. An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 p.m. (London time) on the 10th Business Day following the commencement of the Offer Period. Relevant persons who deal in the relevant securities of Mount 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 one per cent. or more of any class of relevant securities of Mount must make a Dealing Disclosure if the person deals in any relevant securities of Mount. 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 Mount, 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 3.30 p.m. (London time) 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 Mount, they will be deemed to be a single person for the purpose of Rule 8.3.2. Effective 19 April 2010 Opening Position Disclosures must also be made by Mount and by Redhall and Dealing Disclosures must also be made by Mount and Redhall 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 Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the Offer Period commenced. 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.
Publication on websites and availability of hard copies
A copy of this announcement will be available on Redhall's website at www.redhallgroup.co.uk by no later than 12 noon London time on 22 September 2010.
A copy of this announcement will be made available on Mount's website at www.mountengineering.co.uk by no later than 12 noon London time on 22 September 2010.
You may request a hard copy of this announcement, free of charge, by contacting Philip Ashworth on 01904 464 401. You may also request that all future documents, announcements and information to be sent to you in relation to the Offer should be in hard copy form.
22 September 2010
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION.
22 September 2010
RECOMMENDED CASH OFFER
BY
REDHALL GROUP PLC
FOR
MOUNT ENGINEERING PLC
1. INTRODUCTION
The Boards of Redhall and Mount are pleased to announce that they have reached agreement on the terms of a recommended cash offer by Redhall for the entire issued and to be issued share capital of Mount (excluding Treasury Shares). It is intended that the Offer will be implemented by way of a public offer under the City Code.
2. TERMS OF THE OFFER
Under the terms of the Offer, which will be subject to the Conditions set out in Appendix I of this announcement and further terms to be set out in the Offer Document and, in the case of Mount Shares held in certificated form, the Form of Acceptance, Mount Shareholders will be entitled to receive:
for each Mount Share 70 pence in cash
The Offer Price represents:
·; a premium of approximately 26.13 per cent. to the Closing Price of 55.50 pence per Mount Share on 21 September 2010, being the last Business Day prior to the date of this announcement; and
·; a premium of approximately 24.35 per cent. to the six month average Closing Price per Mount Share of approximately 56.29 pence immediately prior to the date of this announcement.
The Offer extends to all Mount Shares unconditionally allotted or issued and fully paid on the date of the Offer (excluding any Treasury Shares) and any Mount Shares which are unconditionally allotted or issued and fully paid (including pursuant to the exercise of options under the Mount Share Option Scheme) before the date on which the Offer closes or such earlier date as Redhall may, subject to the City Code, decide (not being earlier than the date on which the Offer becomes unconditional as to acceptances).
The Mount Shares to be acquired by Redhall pursuant to the Offer are to be acquired with full title guarantee, fully paid and free from all liens, equities, charges and encumbrances and other third party rights or interests and together with all rights now or hereafter attaching thereto, including the right to receive and retain all dividends and other distributions (if any) declared, made or paid after the date of this announcement.
Full acceptance of the Offer, assuming the exercise of all outstanding options with an exercise price of less than 70 pence per Mount Share under the Mount Share Option Scheme before the Offer closes, will result in the payment to Mount Shareholders of, in aggregate, approximately £16.5 million in cash.
3. BACKGROUND TO AND REASONS FOR THE OFFER
The Redhall Board believes that the Offer will:
·; increase the Redhall Group's existing presence in the oil and gas sector, particularly internationally, in line with its stated strategy;
·; strengthen the Redhall Group's existing specialist manufacturing capability for specialist equipment engineered for high hazard markets;
·; strengthen the Redhall Group's existing sales channels and provide cross-selling opportunities with its existing specialist manufacturing businesses, particularly Booth Industries; and
·; increase the proportion of the Redhall Group's earnings of a repeat and cash generative nature, whilst also improving operating margins.
In addition the Redhall Board expects the Acquisition to be earnings enhancing in the first year immediately following the Acquisition being declared unconditional in all respects.
4. IRREVOCABLE UNDERTAKINGS AND LETTERS OF INTENT TO ACCEPT THE OFFER
Redhall has received irrevocable undertakings to accept, or procure the acceptance of, the Offer from the Mount Directors and other senior management of Mount who are interested in Mount Shares in respect of their entire beneficial holdings of Mount Shares and the Mount Shares held by each of their Connected Persons amounting to, in aggregate, 2,131,834 Mount Shares representing approximately 9.09 per cent. of the existing issued share capital of Mount (excluding Treasury Shares) and of the voting rights in respect thereof. Such irrevocable undertakings are also in respect of Mount Shares that may be issued to, or acquired by, the Mount Directors pursuant to the terms of the Mount Share Option Scheme. These undertakings will continue to be binding even in the event of a higher competing offer (including a Competing Takeover Offer) for the Mount Group being announced and cannot be withdrawn other than in the event of the Offer lapsing or being withdrawn.
Redhall has received from other Mount Shareholders irrevocable undertakings to accept, or procure the acceptance of, the Offer in respect of 6,386,101 Mount Shares representing approximately 27.23 per cent. of Mount's existing issued share capital (excluding Treasury Shares). These undertakings cease to be binding in the event of a Competing Takeover Offer being made for Mount which values each Mount Share on the date such Competing Takeover Offer is announced:
·; in respect of the irrevocable undertakings given by Agnes Kirk and Edmund Kirk, in excess of the Offer Price;
·; in respect of the irrevocable undertakings given by Octopus, in excess of 73 pence;
·; in respect of the irrevocable undertakings given by Calculus, Acuity and Kingmoor Park, in excess of 77 pence.
Non-legally binding letters of intent to accept, or procure the acceptance of, the Offer have been received by Redhall from institutional Mount Shareholders in respect of 2,047,679 Mount Shares, representing, in aggregate, approximately 8.73 per cent. of the existing issued share capital of Mount (excluding Treasury Shares).
Further details of these irrevocable undertakings and letters of intent will be set out in the Offer Document.
5. INFORMATION ON THE REDHALL GROUP
Financial information on Redhall Group
The following financial information on Redhall is incorporated into this announcement by reference from the audited consolidated financial statements of Redhall for the financial years ended 30 September 2008 and 30 September 2009 and Redhall's interim results for the six month financial period to 31 March 2010 (each available on Redhall's website at www.redhallgroup.co.uk):
·; turnover, net profit/loss before and after taxation, the charge for tax, extraordinary items, minority interests, the amount absorbed by dividends and earnings and dividends per shares, in each case for the financial periods ended 2008 and 2009;
·; details of the above in relation to the six month financial period to 31 March 2010; and
·; a statement of the assets and liabilities shown in the last published audited accounts (as provided the audited consolidated financial statements for the financial year ended 30 September 2009).
The Redhall Shares are quoted on AIM and on the last Business Day prior to this announcement, such shares had a market capitalisation of approximately £37 million. Redhall is a leading niche engineering support services group operating in the energy, defence and process sectors. Redhall supports its blue chip client base using its integrated offering of design, manufacture, installation, maintenance and decommissioning. Redhall aims to establish sustainable, profitable growth to create value and opportunity for all of its stakeholders.
Redhall continues to develop additional added value skills and products for its clients through focused investment in organic growth, innovation and increasingly through selective acquisitions. Redhall's key divisions are as follows:
Energy
Energy comprises the design and manufacture of bespoke plant and equipment, repair and maintenance of production and storage infrastructure and the implementation of major mechanical engineering projects in the UK nuclear, oil and gas and power generation sectors.
Defence
Defence encompasses activities on behalf of the Ministry of Defence in particular the outfitting of Astute class submarines at Barrow, West Cumbria and the design, specialist equipment manufacture and mechanical and electrical engineering activities at the Atomic Weapons Establishments at Aldermaston and Burghfield.
Process
Process comprises the design, manufacture and mechanical installation of process plant and systems to the food, chemical and pharmaceutical sectors.
For the six months ended 31 March 2010, the Redhall Group reported turnover of £65.4 million and profit before tax of £2.4 million, accompanied by strong cash generation from operations before exceptional items of £2.9 million.
6. CURRENT TRADING AND PROSPECTS
Mount
Challenging conditions continued to prevail in the first half of the current financial year ended 30 June 2010 with trading in key markets in the Middle East and North America remaining resilient. Markets in Asia, Europe and the UK, all of which tend to have a greater dependence on project activity, have been weaker than anticipated. Revenue in the first half of the financial year ended 30 June 2010 declined by 7 per cent. to £4.6 million (2009: £5.0 million) and profit before taxation declined by 16 per cent. to £1.2 million (2009: £1.4 million). Trading in the second half of the financial year ending 31 December 2010 has to date continued in line with the first half. Mount's Directors are of the opinion that Mount's markets remain resilient and the Group continues to experience stability both in terms of Mount's profitability and cash generation. Performance improvement in the second half of the year will be dependent on the timing of an upturn in demand from the international oil and gas markets. At this stage it is too early to be confident that activity levels will return to levels of 2008 before the end of 2010.
Redhall
As stated at the release of Redhall's interim results for the six month period ended March 2010 (released on 3 June 2010), Redhall continues to deliver a resilient performance in subdued trading conditions. Redhall's order book remains strong (£130 million as at 30 June 2010) and the Redhall Board has positioned the business in resilient areas where the Board expects to benefit from the trend towards further outsourcing.
7. INFORMATION ON MOUNT
The following financial information on Mount is incorporated into this announcement by reference from the audited consolidated financial statements of Mount for the financial years ended 31 December 2007, 2008 and 2009 (each available on Mount's website at www.mountengineering.co.uk):
·; turnover, net profit/loss before and after taxation, the charge for tax, extraordinary items, minority interests, the amount absorbed by dividends and earnings and dividends per shares, in each case for the years ended 31 December 2007, 2008 and 2009;
·; a statement of the assets and liabilities shown in the last published audited accounts (as provided the audited consolidated financial statements for the financial year ended 31 December 2009);
·; a cash flow statement (as provided in the audited consolidated financial statements for the financial year ended 31 December 2009); and
·; significant accounting policies together with any points from the notes to the accounts which are of major relevance to an appreciation of the figures in such accounts.
Mount was incorporated on 30 April 2007 and acquired the entire issued share capital of Mount (York) Limited on 2 July 2007. The Mount Group is involved in the manufacture and supply of threaded adaptors and reducers, certified for use in potentially explosive or hazardous areas. Mount also stocks and provides industrial valves and actuators. The major end user markets are the oil and gas and petrochemical industries; however, Mount also serves a range of other industrial markets including mining, waste water, dust extraction and pharmaceuticals.
For the financial year ended 31 December 2009, Mount reported turnover of £9.3 million and profit before taxation of £2.7 million. For the six month period ended 30 June 2010, Mount reported turnover of £4.6 million and profit before taxation of £1.2 million.
8. INTENTIONS REGARDING MOUNT'S EMPLOYEES AND DIRECTORS
The Redhall Board has given assurances to the Mount Board that, following the Offer becoming or being declared unconditional in all respects, the existing employment rights, including pension rights, of all employees and management of the Mount Group will be fully safeguarded.
Redhall attaches great importance to the skills and experience of the existing management and employees of Mount. As such, Redhall expects that Mount employees will play an important role in the future of the business of the Enlarged Group, and Redhall does not currently intend to make any material changes to Mount's staffing levels, nor to any conditions of employment (including pension benefits) nor locations of Mount's places of business.
James Roach (the non-executive Director of Mount), Colin Davies and Alan McClue have agreed to resign following the Offer becoming or being declared unconditional in all respects. In addition, there is no present intention to re-deploy Mount's fixed assets to a material extent.
9. STRATEGY FOR THE ENLARGED GROUP
Mount has a proven track record with a strong network of international customers and agents which will add considerable value to the Enlarged Group following the Offer becoming or being declared unconditional in all respects.
The Acquisition would bring a number of additional benefits to the Enlarged Group:
·; enhanced access to international energy markets, particularly in oil and gas;
·; considerable opportunities for cross-selling within Mount and Redhall;
·; increased intellectual property associated with certification of products for use in potentially high hazard areas; and
·; strong brand names for quality niche engineered products, with high profit margins and strong cash flow.
10. FINANCING OF THE OFFER
Full acceptance of the Offer, assuming the exercise of all outstanding Mount Share Options with an exercise price of less than 70p per Mount Share under the Mount Share Option Scheme before the Offer closes, will result in the payment of approximately £16.5 million in cash, which (together with the expenses of Mount and Redhall of approximately £1 million) will be provided from bank financing and Redhall's existing cash resources.
Altium, financial adviser to Redhall, is satisfied that Redhall has sufficient financial resources available to it to satisfy in full the cash consideration payable by Redhall under the Offer.
11. MOUNT SHARE OPTION SCHEME
The Offer extends to any Mount Shares which are unconditionally allotted or issued prior to the date on which the Offer closes (or such earlier date as Redhall may, subject to the City Code or with the consent of the Panel, determine) including any which are so unconditionally allotted or issued pursuant to the exercise of options under the Mount Share Option Scheme. To the extent such options are not exercised Redhall will make appropriate proposals to Mount Share Optionholders.
12. INDUCEMENT FEE
On 21 September 2010, Mount entered into an agreement with Redhall pursuant to which Mount agreed, amongst other things, to pay to Redhall a sum equal to one per cent. of the value of the Offer (as calculated in accordance with the Panel's Practice Statement 23), to be inclusive of any irrecoverable amount in respect of VAT, if, amongst other things:
·; at any time after the Offer is publicly announced by Redhall the Mount Directors withdraw or modify their recommendation to accept the Offer; or
·; at any time after the Offer is publicly announced by Redhall a Competing Takeover Offer is announced in accordance with Rule 2.5 of the City Code after the date of this document and such Competing Takeover Offer is recommended for acceptance by the Mount Directors.
Mount has agreed in the inducement fee agreement that it (together with its subsidiaries, employees, agents or professional advisers) will not solicit or invite proposals, offers or enquiries relating to such a Competing Takeover Offer, save where necessary to ensure compliance with law or regulation (including the City Code).
Nothing in the inducement fee arrangement obliges Mount to pay any amount which the Panel determines would not be permitted by Rule 21.2 of the City Code. Further details of the inducement fee arrangement are set out in the Offer Document.
Pursuant to Rule 21.2 of the City Code, Charles Stanley and the Mount Directors have confirmed to the Panel that they consider the terms of the inducement fee agreement to be in the best interests of Mount Shareholders.
13. COMPULSORY ACQUISITION, CANCELLATION OF TRADING ON AIM AND
RE-REGISTRATION
If Redhall receives acceptances under the Offer in respect of, and/or otherwise acquires, 90 per cent. or more in value of the Mount Shares to which the Offer relates (and which represent not less than 90 per cent. of the voting rights carried by the Mount Shares), and if all other conditions of the Offer have been satisfied or waived (to the extent that they are capable of being waived), Redhall intends to exercise its rights pursuant to the provisions of Part 28 of CA 2006 to acquire compulsorily any remaining Mount Shares in respect of which acceptances have not then been received on the same terms as the Offer.
If the Offer becomes or is declared unconditional in all respects, and sufficient acceptances under the Offer are received, or Mount Shares are otherwise acquired or agreed to be acquired, and subject to any applicable requirements of the London Stock Exchange, Redhall intends to procure that Mount makes an application to cancel admission to trading in Mount Shares on AIM. Cancellation of trading would significantly reduce the liquidity and marketability of any Mount Shares not assented to the Offer at that time and the value of any such Mount Shares may be affected as a consequence.
It is anticipated that cancellation of admission to trading on AIM will take effect no earlier than 20 Business Days after either (i) the date on which Redhall has, by virtue of its shareholdings and acceptances of the Offer, acquired or agreed to acquire issued share capital carrying 75 per cent. or more of the voting rights attaching to the Mount Shares; or (ii) the first date of issue of compulsory acquisition notices under Part 28 of CA 2006. Redhall will notify Mount Shareholders when the required threshold has been attained and confirm that the notice period has commenced together with the anticipated date of cancellation.
It is also intended that, following the Offer becoming or being declared unconditional in all respects, and after the cancellation referred to above becoming effective, Mount will be re-registered as a private company under the relevant provisions of CA 2006.
14. OPENING POSITION DISCLOSURE
Redhall confirms that it is, in the date of this announcement, making an Opening Position Disclosure, which discloses the details required to be disclosed by it under Rule 8.1(a) of the City Code.
15. RECOMMENDATION
The Mount Directors, who have been so advised by Charles Stanley, consider the terms of the Offer as a whole to be fair and reasonable so far as Mount Shareholders are concerned as a whole. In providing its advice to the Mount Directors, Charles Stanley has taken into account the Mount Directors' commercial assessment of the Offer. Accordingly, the Mount Directors unanimously recommend Mount Shareholders to accept the Offer, as the Mount Directors, who hold a total of 2,086,000 Mount Shares, have irrevocably undertaken to do in respect of their entire beneficial holdings of 2,086,000 Mount Shares, representing, in aggregate, approximately 8.89 per cent. of the existing issued share capital of Mount (excluding Treasury Shares).
16 .GENERAL
The Offer Document will be posted to Mount Shareholders as soon as practicable and, in any event (save with the consent of the Panel), within 28 days of the publication of this announcement. The Offer will be subject to the Condition set out in Appendix I to this announcement and further terms to be set out in the Offer Document. Appendix II contains the bases and sources of certain information contained in this announcement. The definitions of certain terms used in this announcement are set out in Appendix III.
A copy of this announcement is available, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, for inspection at www.redhallgroup.co.uk and www.mountengineering.co.uk while the Offer remains open for acceptance.
Enquiries:
Redhall Tel: 01924 385386
David Jackson, Executive Chairman
Simon Foster, Chief Executive
John O'Kane, Group Finance Director
Altium (Financial Adviser and corporate broker to Redhall) Tel: 0845 505 4343
Simon Lord
Paul Lines
Charles Stanley (Financial Adviser to Mount) Tel: 020 7149 6000
Mark Taylor
Carl Holmes
Buchanan (Financial PR to Redhall) Tel: 020 7466 5000 Tim Anderson
Isabel Podda
This announcement is for information purposes only and is not intended to and does not constitute, or form part of, an offer to sell or invitation to purchase or subscribe for any securities or the solicitation of any vote or approval in any jurisdiction pursuant to the Offer or otherwise, nor will there be any purchase or transfer of the securities referred to in this announcement in any jurisdiction in contravention of applicable law or regulation. The Offer will be made solely through the Offer Document and, in the case of certificated Mount Shares, the Form of Acceptance accompanying the Offer Document, which will contain the full terms and conditions of the Offer, including details of how to accept the Offer. Any acceptance or other response to the Offer should be made only on the basis of the information in the Offer Document and, in the case of certificated Mount Shares, the Form of Acceptance.
This announcement does not constitute a prospectus or a prospectus equivalent document.
Altium, which is authorised and regulated in the United Kingdom by the FSA, is acting exclusively for Redhall and no one else in connection with the Offer, the contents of this announcement, the Offer Document or the Form of Acceptance and will not be responsible to anyone other than Redhall for providing the protections afforded to clients of Altium nor for providing advice in relation to the Offer, the contents of this announcement, the Offer Document or the Form of Acceptance.
Charles Stanley, a trading division of Charles Stanley & Co. Limited, which is authorised and regulated in the United Kingdom by the FSA, is acting exclusively for Mount and no one else in connection with the Offer, the contents of this announcement, the Offer Document or the Form of Acceptance and will not be responsible for anyone other than Mount for providing the protections afforded to customers of Charles Stanley, or for providing advice in relation to the Offer, the contents of this announcement, the Offer Document or the Form of Acceptance.
This announcement may contain "forward-looking statements" concerning the Redhall Group and/or the Mount Group and/or the Enlarged Group. All statements other than statements of historical fact included in this document may be forward-looking statements. Without limitation, any statements preceded or followed by or that include the words "will", "may", "targets", "plans", "continue", "believes", "expects", "intends", "anticipates", "aims", "estimates" or words or terms of similar substance or the negative thereof identify forward-looking statements. Forward looking statements include statements relating to the following: (i) future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects; (ii) business and management strategies and the expansion and growth of the Redhall Group's, or the Enlarged Group's operations; and (iii) the effects of government regulation on the Redhall Group's or the Enlarged Group's business.
Nothing in this announcement is intended to be a profit forecast and no statement in this announcement should be interpreted to mean that the earnings per Redhall Share for the current or future financial periods will be greater than that for the relevant preceding financial period
These forward-looking statements are not guarantees of future performance. They have not been reviewed by the auditors of Mount or of Redhall. These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements of any such person, or industry results, to be materially different from any results, performance or achievements expressed or implied to differ materially from those expressed in the forward-looking statements. These forward-looking statements are based on numerous assumptions regarding the present and future business strategies of such persons and the environment in which each will operate in the future. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date they were made. All subsequent oral or written forward-looking statements attributable to the Redhall Group or the Mount Group or any of their members or any persons acting on their behalf are expressly qualified in their entirety by the cautionary statement above. All forward-looking statements included in this document are based on information available to the relevant parties on the date of this document. Investors should not place undue reliance on forward-looking statements, and neither Mount, Redhall nor any members of their respective Group, directors undertake any obligation in respect of, and do not intend to update or revise any forward-looking statements, except as required by the City Code, Disclosure and Transparency Rules, AIM Rules and/or pursuant to any other applicable law.
Under Rule 8.3(a) of the City Code, any person who is interested in one per cent. or more of any class of relevant securities of Mount must make an Opening Position Disclosure following the commencement of the Offer Period. 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 Mount. An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 p.m. (London time) on the 10th business day following the commencement of the Offer Period. Relevant persons who deal in the relevant securities of Mount 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 one per cent. or more of any class of relevant securities of Mount must make a Dealing Disclosure if the person deals in any relevant securities of Mount. 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 Mount, 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 3.30 p.m. (London time) 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 Mount, they will be deemed to be a single person for the purpose of Rule 8.3.2. Effective 19 April 2010 Opening Position Disclosures must also be made by Mount and by Redhall and Dealing Disclosures must also be made by Mount and Redhall 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 Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the Offer Period commenced. 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.
The release, publication or distribution of this announcement in jurisdictions other than the UK may be restricted by the laws and/or regulations of those jurisdictions and therefore any persons who are subject to the laws and/or regulations of any jurisdiction other than the UK should inform themselves of, and observe, any applicable legal or regulatory requirements of any such jurisdiction. Any failure to comply with the applicable requirements may constitute a violation of the laws and/or regulations of any such jurisdiction If any Mount Shareholder remains in any doubt such Mount Shareholders should consult his professional adviser in the relevant jurisdiction.
Unless otherwise determined by Redhall or required by the City Code and permitted by applicable laws and regulations, subject to certain exemptions, the Offer is not being, made, directly or indirectly, in or into and will not be capable of acceptance from or within, a Restricted Jurisdiction. Accordingly, copies of this announcement, the Offer Document, the Form of Acceptance and any other accompanying document must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in, into or from any Restricted Jurisdiction and persons receiving such documents (including custodians, nominees and trustees) must not mail or otherwise , distribute or send them in, into or from such jurisdiction as doing so may invalidate any purported acceptance of the Offer.
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 and/or regulations of jurisdictions outside the UK. Any person (including, without limitation, any custodian, nominee and trustee) who would, or otherwise intends to, or who may have a contractual or legal obligation to, forward this announcement and/or the Offer Document and/or any other related document to any jurisdiction outside the UK should inform themselves of, and observe, any applicable legal or regulatory requirements of their jurisdiction.
To the extent permitted by applicable law and in accordance with normal UK practice, Redhall, or its nominee or brokers (acting as agents), may from time to time make certain purchases of, or arrangements to purchase, Redhall Shares other than pursuant to the Offer, such as in open market or privately negotiated purchases during the period in which the Offer remains open for acceptance. Such purchases, or arrangements to purchase, must comply with English law, the City Code, the AIM Rules and other applicable law.
The Redhall Directors accept responsibility for the information contained in this announcement, save that the only responsibility accepted by them in respect of the information in this announcement relating to Mount, which has been compiled from published sources, is to ensure that such information has been correctly and fairly reproduced and presented. To the best of the knowledge and belief of the Redhall Directors (who have taken all reasonable care to ensure that such is the case), the information contained in this announcement for which they accept responsibility is in accordance with the facts and does not omit anything likely to affect the import of such information.
Publication on websites and availability of hard copies
A copy of this announcement is and will be available free of charge, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, for inspection on Redhall's website at www.redhallgroup.co.uk and on the Mount website at www.mountengineering.co.uk during the course of the Offer.
You may request a hard copy of this announcement, free of charge, by contacting Philip Ashworth on 01904 464 401. You may also request that all future documents, announcements and information to be sent out to you in relation to the Offer should be in hard copy form.
Rule 2.10 Disclosure
In accordance with Rule 2.10 of the Code, Mount confirms that on 22 September 2010 it had 24,401,429 ordinary shares in issue of which Mount holds 945,357 ordinary shares in treasury. The total number of voting rights in Mount is therefore 23,456,072. The International Securities Identification Number for Mount ordinary shares is GB00B1XH2205.
APPENDIX I
Conditions of the Offer
The Offer will be subject to the following conditions:
1.1 Valid acceptances of the Offer being received (and not, where permitted, withdrawn) by not later than 1.00 p.m. (London time) on 13 October 2010 or such later time(s) and/or date(s) as Redhall may, with the consent of the Panel or subject to the City Code, decide in respect of not less than 90 per cent. (or such lower percentage as Redhall may decide) in nominal value of the Mount Shares to which the Offer relates and that represent not less than 90 per cent. (or such lower percentage as Redhall may decide) of the voting rights carried by the Mount Shares to which the Offer relates, provided that this condition will not be satisfied unless Redhall and/or any of its wholly-owned subsidiaries shall have acquired or agreed to acquire (whether pursuant to the Offer or otherwise), Mount Shares carrying, in aggregate, more than 50 per cent. of the voting rights then normally exercisable at a general meeting of Mount (including for this purpose, to the extent (if any) required by the Panel, any voting rights attaching to any Mount Shares which may be 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 purpose of this condition:
1.1.1 the expression "Mount Shares to which the Offer relates" shall be construed in accordance with sections 974 to 991 (inclusive) of the CA 2006;
1.1.2 Mount Shares which have been unconditionally allotted but not issued shall be deemed to carry the voting rights which they will carry on issue; and
1.1.3 valid acceptances shall be treated as having been received in respect of any Mount Shares that Redhall, pursuant to section 979(8) and, if applicable, section 979(9) of the CA 2006, shall be treated as having acquired or unconditionally contracted to acquire by virtue of acceptances of the Offer.
1.2 No government or governmental, quasi-governmental, supranational, statutory or regulatory body, authority, court, trade agency, professional association or environmental body or any other person or body in any jurisdiction having prior to the date on which the Offer would otherwise have become unconditional decided to take, instituted, implemented or threatened any action, proceedings, suit, investigation or enquiry or enacted, made or proposed any statute or regulation or order that would or might:
1.2.1 make the Offer or the acquisition by Redhall of any shares in, or control of Mount void, illegal or unenforceable, or otherwise restrain, prohibit, restrict or delay or impose additional conditions or obligations with respect thereto or otherwise challenge or interfere therewith; or
1.2.2 result in any material delay in the ability of Redhall, or render Redhall unable, to acquire some or all of the Mount Shares; or
1.2.3 require the divestiture by any member of the Wider Redhall Group or by any member of the Wider Mount Group of all or any material portion of their respective businesses, assets or property or impose any material limitation on the ability of them to conduct their respective businesses and to own any of their respective assets or properties; or
1.2.4 impose any material limitation on the ability of any member of the Wider Redhall Group to acquire, hold or exercise effectively any rights of ownership of shares in the Wider Mount Group or to exercise management control over any member of the Wider Mount Group; or
1.2.5 otherwise affect the businesses, profits or prospects of any member of the Wider Redhall Group or of any member of the Wider Mount Group in a manner which is material and adverse in the context of the Offer;
and all applicable waiting periods during which any such governmental body, court or other person could institute, implement or threaten any such action, proceedings, suit, investigation or enquiry having expired or terminated.
1.3 Save as disclosed in the Mount annual report and accounts for the year ended 31 December 2009 and/or as publicly announced by Mount by notifying a Regulatory Information Service on or prior to 21 September 2010 there is no provision or any arrangement, agreement, licence or other instrument to which any member of the Wider Mount Group is a party or by or to which any of such members or any of its assets may be bound, entitled to or subject which has not been waived or suspended in a manner satisfactory to the Redhall Board and, which could as a consequence of the Offer or the acquisition or the proposed acquisition by any member of the Wider Redhall Group of any shares in or control of any member of the Wider Mount Group or otherwise would or might result in:
1.3.1 any monies borrowed by or grants made available to any member of the Wider Mount Group being or becoming repayable or becoming capable of being declared repayable immediately or earlier in the case of borrowed monies than the repayment date stated in such arrangement, agreement, licence or instrument; or
1.3.2 the creation 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 Wider Mount Group or any such security (whenever arising or having arisen) becoming enforceable; or
1.3.3 any such arrangement, agreement, licence or instrument being terminated or adversely modified or any action being taken or any obligation arising thereunder; or
1.3.4 any interest in assets or property of any member of the Wider Mount Group being or becoming liable to be disposed of or charged or failing to be disposed of other than in the ordinary course of business; or
1.3.5 any member of the Wider Mount Group ceasing to be able to carry on business under any name under which it presently does so; or
1.3.6 the business or interest of any member of the Wider Mount Group in or with any other person, firm or company (or any agreement or arrangements relating to such business or interests) being terminated or materially modified or adversely affected; or
1.3.7 the exercise of any subscription rights in relation to any shares of any class of securities convertible into shares of any class in the capital of any member of the Wider Mount Group.
1.4 Save as disclosed in the Offer Document, by the report and accounts of Mount for the year ended 31 December 2009, or as publicly announced by Mount in accordance with the AIM Rules (by delivery of an announcement to a Regulatory Information Service) and/or as disclosed in writing to Redhall on or prior to 21 September 2010 there having been since 31 December 2009:
1.4.1 no material adverse change in the business, financial or trading position or profits of any member of the Wider Mount Group having occurred which is material in the context of the Wider Mount Group taken as a whole; and
1.4.2 no contingent liability having arisen or come to light which is or would be likely to affect any member of the Wider Mount Group which might reasonably be expected to be material in the context of the Mount Group taken as a whole.
1.5 No litigation, arbitration proceedings, prosecution or other legal proceedings having been instituted by or threatened or remaining outstanding against any member of the Wider Mount Group (whether as pursuer, defender or otherwise) and no statutory demand having been served on any member of the Wider Mount Group which is or might reasonably be expected to be material in the context of the Wider Mount Group taken as a whole.
1.6 Redhall not having discovered that any financial or business information concerning any member of the Wider Mount Group publicly disclosed either contains a material misrepresentation of fact or omits to state a fact necessary to make the information contained therein not materially misleading and, in either case, which is material in the context of the Offer.
1.7 Save as disclosed in the Offer Document or by the report and accounts of Mount for the year ended 31 December 2009, or as publicly announced by Mount in accordance with the AIM Rules (by delivery of an announcement to a Regulatory Information Service) on or prior to 21 September 2010 no member of the Wider Mount Group having, since 31 December 2009:
1.7.1 (save for the issue of Mount Shares to employees, prior to the date hereof and pursuant to the Mount Share Option Scheme) issued or authorised or proposed the issue of additional shares of any class, or securities convertible into, or rights, warrants, or options to subscribe for or acquire, any such shares or convertible securities; or
1.7.2 other than to another member of the Mount Group declared, paid or made or proposed to declare, pay or make any bonus, dividend or other distribution;
1.7.3 authorised or proposed or announced an intention to propose any merger, demerger, acquisition or disposal of assets (other than in the ordinary course of business) or shares or change in its capitalisation; or
1.7.4 issued any debentures or (other than in the ordinary course of business) incurred or increased any indebtedness or contingent liability which is material to the Wider Mount Group; or
1.7.5 entered into or terminated any contract or commitment (whether in respect of capital
expenditure or otherwise) which is of a long term or unusual nature or which involved or could involve an obligation of a nature or magnitude which is or might reasonably be expected to be material in the context of the Wider Mount Group, taken as a whole; or
1.7.6 entered into any contract, commitment or agreement with respect to any of the transactions or events referred to in this paragraph; or
1.7.7 authorised or proposed or announced its intention to propose any change in its share or loan capital; or
1.7.8 disposed of or transferred, mortgaged or encumbered any material asset or any right, title or interest in any asset (other than in the ordinary course of business); or
1.7.9 entered into or varied the terms of any service agreements with any of the directors or senior executives of Mount; or
1.7.10 proposed any voluntary winding up of any member of the Wider Mount Group.
1.8 Save as disclosed in the Offer Document, by the report and accounts of Mount for the year ended 31 December 2009, or as publicly announced by Mount in accordance with the AIM Rules (by delivery of an announcement to a Regulatory Information Service) on or prior to 21 September 2010, Redhall not having discovered since 31 December 2009 that any past or present member of the Wider Mount Group has failed to comply in any respect with any and/or all applicable legislation or regulation of any relevant jurisdiction with regard to the use, storage, treatment, transport, handling, disposal, spillage, release, discharge, leak or emission of any waste or hazardous substance or any substance likely to impair the environment or harm human health or animal health or otherwise relating to environmental matters, or that there has otherwise been any such use, storage, treatment, transport, handling, disposal, spillage, release, discharge, leak or emission (whether or not the same constituted a non-compliance by any person with any such legislation or regulations, and wherever the same may have taken place) any of which use, storage, treatment, transport handling disposal, spillage, release, discharge, leak or emission would, in each case, be reasonably likely to give rise to any liability (actual or contingent) on the part of any member of the Wider Mount Group which is material in the context of the Wider Mount Group taken as a whole.
Redhall reserves the right to waive all or any of the conditions other than condition 1.1 either in whole or in part. Any determination by Redhall concerning the fulfilment or otherwise of any condition shall be final and binding. Redhall shall be under no obligation to waive, to determine to be or remain satisfied or to treat as satisfied any of the conditions 1.2 to 1.8 (inclusive) by a date earlier than the latest date specified above for the satisfaction 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 such conditions may not be capable of fulfilment.
The Offer will become unconditional in all respects when all the above conditions are fulfilled or waived.
If Redhall is required by the Panel to make an offer for the Mount Shares under the provisions of Rule 9 of the City Code, Redhall may make such alterations to any of the above conditions as necessary to comply with the provisions of that Rule.
The Offer will lapse if it is referred to the Competition Commission on or before the First Closing Date of the Offer or the date on which the Offer becomes or is declared unconditional as to acceptances, whichever is the later.
If the Offer lapses, it will cease to be capable of further acceptance. Mount Shareholders who have already accepted the Offer shall then cease to be bound by acceptances delivered on or before the date on which the Offer lapses.
Conditions 1.2 to 1.8 (inclusive) must be fulfilled, be determined by Redhall to be or remain satisfied or be waived by midnight on the 21st day after the later of the First Closing Date and the date on which condition 1.1 is fulfilled (or in each case such later date as Redhall may, with the consent of the Panel, decide), failing which the Offer will lapse.
The Offer and any acceptances and elections thereunder are governed by English law and subject to the jurisdiction of the courts of England and Wales.
APPENDIX II
SOURCES AND BASES OF CALCULATION
In this announcement:
1. Unless otherwise stated, financial information relating to the Mount Group has been extracted or derived (without any adjustment) from the audited annual report and accounts for Mount for the year ended 31 December 2009, 31 December 2008 and 31 December 2007 and the interim results of Mount to 30 June 2010.
2. Unless stated otherwise, financial information relating to the Redhall Group has been extracted or derived (without any adjustment) from the audited annual report and accounts for Redhall for the years ended 30 September 2009, 2008 and the interim results of Redhall to 31 March 2010.
3. The value of the Offer is calculated on the basis of there being 23,456,072 Mount Shares currently in issue (which excludes Treasury Shares).
4. The Closing Price of 55.50 pence per Mount Share on 21 September 2010 is derived from data provided by London Stock Exchange historic price service.
5. The average Closing Price per Mount Share of 56.29 pence over the six month period ended 21 September 2010 is derived from data provided by London Stock Exchange historic price service.
APPENDIX III
DEFINITIONS
"Acquisition" the proposed acquisition of the whole of the issued and to be issued share capital of Mount by Redhall by means of the Offer;
"AIM" AIM, a market operated by London Stock Exchange;
"AIM Rules" the AIM rules for companies, published by the London Stock Exchange from time to time;
"Altium" Altium Capital Limited;
"Announcement" this announcement;
"Board" as the context requires, the board of directors of Mount or the board of directors of Redhall and the terms "Mount Board" and "Redhall Board" shall be construed accordingly;
"Booth Industries" Booth Industries Limited, a company registered in England and Wales with company number 1288302;
"Business Day" or "business day" a day on which banks are generally open for business in London (excluding Saturdays, Sundays and public holidays);
"CA 2006" the Companies Act 2006;
"certificated" or "in a share or other security which is not in uncertificated
certificated form" form (that is, not held in CREST);
"Charles Stanley" Charles Stanley Securities, a trading division of Charles Stanley & Co. Limited;
"City Code" the City Code on Takeovers and Mergers;
"Closing Price" as the context requires, the middle market price of a Mount Share or a Redhall Share (as the case may be) at the close of business on the day to which such price relates, as derived from the London Stock Exchange's Daily Official List for that day;
"Competing Takeover Offer" a takeover offer (made by a third party other than Redhall)
which is within the meaning of section 974 of the CA 2006 and which shall be deemed to include a scheme of arrangement as defined under CA 2006 or any other recapitalisation or other transaction where the effect of the takeover offer (made by a third party) or the scheme or the recapitalisation or other transaction is to vest more than 50 per cent. of the Mount Shares in a third party other than Redhall;
"CREST" the relevant system (as defined in the CREST Regulations) in respect of which Euroclear is the operator (as defined in the CREST Regulations);
"Enlarged Group" the Redhall Group as enlarged by the Acquisition;
"First Closing Date" 13 October 2010;
"Form of Acceptance" the form of acceptance and authority (in respect of certificated Mount Shares) relating to the Offer which accompanies the Offer Document;
"FSA" the UK Financial Services Authority;
"London Stock Exchange" London Stock Exchange plc;
"Mount" Mount Engineering plc;
"Mount Directors" the directors of Mount;
"Mount Group" Mount and its subsidiaries and subsidiary undertakings;
"Mount Share Option Scheme" Mount Engineering Plc Enterprise Management Incentive Scheme;
"Mount Share Optionholders" holders of Mount Share Options and each a "Mount Share Optionholder";
"Mount Share Options" share options granted pursuant to the Mount Share Option Scheme;
"Mount Shareholders" holders of Mount Shares and each a "Mount Shareholder";
"Mount Shares" includes: (i) the existing issued or unconditionally allotted and fully paid (or credited as fully paid) ordinary shares of 1 penny each in Mount; and (ii) any further such shares which are unconditionally allotted or issued and fully paid while the Offer remains open for acceptance or, subject to the provisions of the City Code, by such earlier date as Redhall may determine, not being earlier than the date (subject to the City Code) on which the Offer becomes or is declared unconditional as to acceptances but, in each case, excludes any shares held as Treasury Shares;
"Offer" the recommended offer to be made by Redhall for the entire share capital, issued and to be issued, of Mount on the terms and subject to the conditions set out in the Offer Document and the Form of Acceptance including, where the context requires, any subsequent revision, variation, extension or renewal of such offer;
"Offer Document" the offer document to be sent to Mount Shareholders containing the terms and conditions of the Offer;
"Offer Period" the period commencing on the date of this announcement and ending on the date which is the latest of (i) 1.00 p.m. on the First Closing Date; (ii) the time and date on which the Offer becomes unconditional as to acceptances; and (iii) the time and date on which the Offer lapses or is withdrawn;
"Offer Price" 70 pence per Mount Share;
"Panel" the Panel on Takeovers and Mergers;
"Redhall" Redhall Group plc;
"Redhall Directors" the directors of Redhall;
"Redhall Group" Redhall and its subsidiaries and subsidiary undertakings;
"Redhall Shareholders" holders of Redhall Shares and each a "Redhall Shareholder";
"Redhall Shares" ordinary shares of 25 pence each in the capital of Redhall;
"Regulatory Information Service" any of the services set out in Appendix 3 to the Listing Rules;
"Relevant Securities"
or "relevant securities" Mount Shares or any other securities conferring voting rights and any other securities convertible into or exchangeable for rights to subscribe for, or options in respect of, or derivatives referenced to, any of the foregoing;
"Restricted Jurisdiction" the United States, Canada, Australia, Japan or any other jurisdiction where making, extension or acceptance of the Offer would violate the law of that jurisdiction;
"Treasury Shares" any Mount Shares held by Mount as treasury shares (as defined in section 724 of CA 2006);
"UK" or "United Kingdom" the United Kingdom of Great Britain and Northern Ireland;
"uncertificated" or "in means recorded on the relevant register of members of
uncertificated form" Mount as being held in uncertificated form;
"Wider Mount Group" Mount and the subsidiaries and subsidiary undertakings of Mount and associated undertakings and any other body corporate, partnership, joint venture or person in which Mount and/or such undertakings (aggregating their interest) have an interest of more than 20 per cent. of the voting or equity capital or equivalent; and
"Wider Redhall Group" Redhall and the subsidiaries and subsidiary undertakings of Redhall and associated undertakings and any other body corporate, partnership, joint venture or person in which Redhall and/or such undertakings (aggregating their interests) have an interest of more than 20 per cent. of the voting or equity capital or equivalent.
| All references to legislation in this document are to English legislation, unless the contrary is indicated. Any reference to any provision of any legislation shall include any amendment, modification, re-enactment or extension thereof.
The singular shall include the plural and vice versa, and words importing the masculine gender shall Include the feminine or neutral gender.
Terms defined in the CREST manual (issued by Euroclear) shall, unless the context otherwise requires, bear the same meanings where used in this document. |