26th Oct 2005 06:00
26 October 2005LogicaCMG plcFiling of Tender OfferFurther to the announcement dated 19 September 2005 regarding the proposedAcquisition of Unilog S.A., France's sixth largest IT services provider, for atotal consideration of ¢â€š¬930.3 million and the 1 for 2 Rights Issue of up to375,495,147 Rights Issue Shares at 107 pence per Share to raise net proceeds ofapproximately ‚£389 million, LogicaCMG announces that yesterday the Tender Offerwas filed by BNP Paribas (acting in its capacity as presenting bank) with theFrench Authority for the Financial Markets (Autoritƒ© des Marchƒ©s Financiers). Atranslation of the press release (commuinquƒ© de dƒ©pƒ´t) issued jointly byLogicaCMG and Unilog today in France is attached at Appendix 1 below.For further information please contact:LogicaCMG media relations - Carolyn Esser 020 7446 1786LogicaCMG investor relations - Tony Richards/Frances Gibbons 020 7446 4341BNP Paribas Paris - Daniel Weisslinger +33 1 43 16 94 82BNP PARIBAS, which is regulated in the United Kingdom by the Financial ServicesAuthority, is acting as joint financial adviser and underwriter to LogicaCMGand is acting for no-one else in connection with the Acquisition or the RightsIssue and will not be responsible to anyone other than LogicaCMG for providingthe protections afforded to customers of BNP PARIBAS nor for providing advicein connection with the Acquisition or the Rights Issue or the contents of thisannouncement or any other matter referred to therein.Merrill Lynch International, which is regulated in the United Kingdom by theFinancial Services Authority, is acting as joint financial adviser, jointsponsor, joint corporate broker and underwriter to LogicaCMG and is acting forno-one else in connection with the Acquisition or the Rights Issue and will notbe responsible to anyone other than LogicaCMG for providing the protectionsafforded to customers of Merrill Lynch International nor for providing advicein connection with the Acquisition or the Rights Issue or the contents of thisannouncement or any other matter referred to herein.Hoare Govett, which is regulated in the United Kingdom by the FinancialServices Authority, is acting as joint sponsor, joint corporate broker andunderwriter to LogicaCMG and is acting for no-one else in connection with theAcquisition or the Rights Issue and will not be responsible to anyone otherthan LogicaCMG for providing the protections afforded to customers of HoareGovett nor for providing advice in connection with the Acquisition or theRights Issue or the contents of this announcement or any other matter referredto herein.The release, publication or distribution of this announcement in certainjurisdictions may be restricted by law and therefore persons in suchjurisdictions into which this announcement is released, published ordistributed should inform themselves about and observe such restrictions.No offer, invitation or inducement to acquire shares or other securities inLogicaCMG is being made by or in connection with this announcement. Any offer,invitation or inducement to acquire shares in LogicaCMG will be made solely bymeans of the prospectus, published on 19 September 2005, as updated by thesupplementary prospectus published on 13 October 2005, and any decision tokeep, buy or sell shares in LogicaCMG should be made solely on the basis of theinformation contained in such document(s).This announcement is not for distribution or transmission, directly orindirectly, in or into the United States, Canada, Australia, Japan or theRepublic of South Africa and does not constitute, or form part of, an offer tosell or the solicitation of an offer to subscribe for or buy and any securities('Securities'), nor the solicitation of any vote or approval in anyjurisdiction, nor shall there be any sale, issue or transfer of the Securitiesreferred to in this announcement in any jurisdiction in contravention ofapplicable law.The Securities have not been and will not be registered under the US SecuritiesAct of 1933, as amended (the 'Securities Act') and may not be offered or soldin the United States unless registered under the Securities Act or an exemptionfrom such registration is available. No public offering of Securities of theCompany is being made in the United States.Appendix 1FILING OF PROPOSED PUBLIC TENDER OFFERFor the share capital of Unilog S.A.Launched by LogicaCMG UK LimitedA fully owned subsidiary of LogicaCMG plcOffer Price : ¢â€š¬73 per Unilog shareThis press release relates to the proposed public tender offer filed with the Autoritƒ© des Marchƒ©s Financiers (the "AMF") on 25 October 2005 by LogicaCMG UKLimited (the "Offeror" or "LogicaCMG UK"), a wholly owned subsidiary ofLogicaCMG plc ("LogicaCMG").This press release was prepared and published in accordance with the provisionsof Article 231-17 of the AMF General Regulations. This tender offer and thepublication of the tender offer prospectus are subject to the prior approval ofthe AMF.1 OFFER PRESENTATION1.1 Offer contextThe Offer has been preceded by the acquisition by LogicaCMG on 25 October 2005of 4,110,420 Unilog shares from a number of managers of Unilog, representing32.3 % of the share capital and 27.2 % of the voting rights of Unilog(hereafter the "Block").3,974,725 of those Unilog shares were acquired pursuant to a sale and purchaseand contribution agreement dated 19 September 2005 between LogicaCMG and Gƒ©rardPhilippot, President of the Unilog Management Board, Didier Herrmann, managingdirector (directeur gƒ©nƒ©ral) and member of the Management Board, PierreDeschamps, President of the Unilog Supervisory Board, Aydin Azernour, managingdirector (directeur gƒ©nƒ©ral) and member of the Management Board, PatriceDabilly, managing director (directeur gƒ©nƒ©ral) and member of the ManagementBoard, and Patrick Guimbal, managing director (directeur gƒ©nƒ©ral) and member ofthe Management Board. The other 135,695 Unilog shares were acquired pursuant toa block trade agreement, dated 19 September 2005, between LogicaCMG and Mr.Christian Brulant, a Unilog employee.The 4,110,420 Unilog shares acquired by LogicaCMG were acquired on the basis ofa price per Unilog share of ¢â€š¬73. 3,498,217 shares were acquired for a total of¢â€š¬255.4 million in cash pursuant to a block trade carried out off-market inaccordance with articles 516-2 and following of the AMF General Regulations.612,203 shares were acquired as contribution in kind in consideration of19,572,703 newly issued LogicaCMG shares. Such contribution in kind was carriedout on the basis of an exchange rate of 31.97 LogicaCMG shares for 1 Unilogshare which corresponds to a valuation respectively of (x) ¢â€š¬73 per Unilog shareand (y) approximately ¢â€š¬2.28 per LogicaCMG share (calculated on the volumeweighted average for the 30 trading days preceding 15 September 2005, i.e.178.65 pence per LogicaCMG share, adjusted to take into account the effects ofthe separation of the nil paid rights attached to the existing LogicaCMG sharesin connection with the rights issue, i.e. 154.76 pence per LogicaCMG share, thelatter figure being converted into euros at a rate of ‚£0.6778 for one euro asat 16 September 2005).1.2 Offeror's intentions for the next twelve monthsStrategy of the enlarged groupThe contemplated transaction is part of the LogicaCMG group's long termstrategy aimed at becoming one of the worldwide top ten consultancy and ITservice providers, offering a balanced portfolio of services (consulting,systems integration and outsourcing) and developing additional profitgenerating centres in Europe to complement its existing strong presence in theUK and the Netherlands.The LogicaCMG group considers that joining forces with Unilog would represent asignificant step in achieving those strategic aims. France will thus become oneof the main markets of the new group and the contemplated transaction will,more generally, also create a platform for growth in Europe and generateoperational synergies.ReorganisationFollowing the closing of the Offer, and depending on the results, the Offerorintends to review different legal and financial structures which can beemployed to facilitate the operational integration of the two companies, inparticular in relation to their French and German aspects. Any alteration ofUnilog's legal structure or its organisation that may be needed will be made inconjunction with Unilog's management.Dividend policyLogicaCMG UK is not in a position to be able to determine the dividend policyin relation to Unilog's dividend following the closing of the Offer. Therelevant body will be responsible for determining Unilog's dividend policy andwill take into account Unilog's integration into the new group.Squeeze outIf on the Offer's closing date (if applicable, after its re-opening) theOfferor either alone or in concert holds at least 95% of the voting rights inUnilog, the Offeror reserves the right to file a buy-out offer (offre publiquede retrait) possibly followed by a mandatory squeeze-out (retrait obligatoire).Delisting of Unilog's sharesThe Offeror also reserves the right to request the delisting of Unilog sharesfrom the Eurolist of Euronext Paris SA who may accept such request only if theresults of the Offer (after its re-opening as the case may be) significantlyreduce the liquidity of the shares such that the delisting would be in theinterests of the market and it shall be subject to the AMF's right to opposesuch delisting.2 OFFER CHARACTERISTICS2.1 Offer termsIn accordance with article 231-14 of the AMF General Regulations, the Offer wasfiled with the AMF on 25 October 2005 by BNP PARIBAS. BNP PARIBAS is acting onbehalf of LogicaCMG UK. BNP PARIBAS guarantees the content and irrevocablenature of the undertakings made by LogicaCMG UK.LogicaCMG UK irrevocably undertakes to acquire all the shares tendered by theUnilog shareholders at a price of ¢â€š¬73 per share during a period of 25 tradingdays as from the opening of the Offer. In accordance with article 232-14 of theAMF General Regulations, the Offeror reserves the right to acquire on themarket all shares offered for sale at a price no higher than ¢â€š¬73 per shareduring the Offer period.2.2 Targeted securitiesThe Tender Offer concerns all shares issued by Unilog, i.e. 12,743,605 Unilogshares with a par value of one euro, and all Unilog shares resulting from theexercise of options to subscribe for Unilog shares.The 4,110,420 Unilog shares held by LogicaCMG shall be contributed by LogicaCMGto LogicaCMG UK in exchange for new LogicaCMG UK shares prior to the date ofsettlement and delivery of the Offer and will therefore not be tendered underthe Offer.There are currently a total of 740,206 subscription options that have beengranted, of which 89,191 may be exercised before the Offer closes.The Offer does not concern the equity warrants (bons de souscription d'actionsremboursables or "BSAR") issued by Unilog on 29 June 2005 since, in accordancewith the BSAR terms of issue, they cannot be transferred for a period of fiveyears as from the issue date and therefore cannot be tendered under the Offer.The Offer does not concern either the Unilog shares that might arise from theexercise of such BSAR until the closing date of the Offer, since, under theterms of issue, the BSAR cannot be exercised during the Offer.2.3 Undertaking to tenderIn addition, LogicaCMG UK is the beneficiary of an undertaking to tender 60,443additional shares.3 SUMMARY OF THE OFFER'S PRICING CRITERIAThe Offer price of ¢â€š¬73 per share may be assessed in light of amultiple-criteria analysis taking into account the characteristics of Unilog.The following criteria have been excluded: the net book assets, the revaluednet assets, the Unilog dividend rates and the discounted cash flows. Thecriteria used for the determination of the ¢â€š¬73 per share price were thetransactions on the Block, Unilog's share price, the market multiples ofcomparable companies and the multiples of comparable transactions. Thoseassessment criteria allow for the following premia:Summary of assessment Middle of range per Offer price premium (%)criteria for the offer price share (¢â€š¬) Offer price 73.0 Share price Until 15 September 2005 Last Price 68.55 6.5 % Weighted average 1 Month (1) 65.29 11.8 % Weighted average 3 Months(1) 62.27 17.2 % Weighted average 6 Months(1) 58.89 24.0 % Weighted average 12 Months 55.88 30.6 % (1) 12-month high 68.65 6.3 % 12-month low 42.00 73.8 % Until 30 June 2005(2) Last Share Price pre-rumour 56.75 28.6 % Weighted average 1 Month(1) 55.33 31.9 % Weighted average 3 Months(1) 53.82 35.6 % Weighted average 6 Months(1) 54.38 34.2 % Weighted average 12 Months 51.37 42.1 % (1) 12-month high 57.65 26.6 % 12-month low 40.33 81.0 % Multiples of comparable companies(3) Multiples of Medium Stock Sample EV/Turnover 47.6 53.5 % EV/EBITDA 62.1 17.5 % EV/EBITA 65.4 11.5 % PER 55.8 30.7 % Multiples of Overall Sample (4) EV/Turnover 50.7 43.9 % EV/EBITDA 61.2 19.2 % EV/EBITA 68.4 6.7 % PER 57.1 27.8 % Multiples of comparable transactions(5) EV/Turnover 49.6 47.2 % EV/EBITDA 49.4 47.7 % EV/EBITA 58.3 25.2 % PER 53.0 37.7 % Source: Fininfo, Datastream, annual and half year reports, analysts' research(1) Volume weighted average market price(2) Last date prior to takeover rumour resulting from an article published inLe Figaro on 1 July 2005(3) Inferred average prices based on estimated 2005 & 2006 multiples(4) The Medium Stock Sample comprises the following companies: Steria, Sopra,Xansa and GFI Informatique. The Overall Sample comprises the Medium StockSample plus the following companies : Atos Origin, CapGemini, Tietoenator,Getronics and LogicaCMG.(5) Further to a sample of 9 transactions carried out in Europe: acquisition ofPinkRoccade (the Netherlands) by Getronics (the Netherlands) in March 2005;acquisition of ITNet (England) by Serco (England) in February 2005; acquisitionof Synstar (England) by Hewlett-Packard (USA) in October 2004; acquisition ofNovo Group (Finland) by WM Data (Sweden) in December 2003; acquisition ofTransiciel (France) by CapGemini (France) in December 2003; acquisition ofAssystem (France) by Brime Technologies (France) in December 2003; acquisitionof CMG (the Netherlands) by Logica (England) in December 2002; acquisition ofKPMG Consulting (the Netherlands/England) by Atos Origin (France) in August2002; acquisition of Siticom (France) by Devoteam (France) in June 2002.4 FAIRNESS OPINION FROM RICOL, LASTEYRIE ET ASSOCIƒâ€°SRicol, Lasteyrie et Associƒ©s was mandated by the supervisory board of Unilog toassess, as independent experts, the fairness of the Offer terms from afinancial perspective.Ricol, Lasteyrie et Associƒ©s issued a fairness opinion on 11 October 2005whereby they concluded that the price of ¢â€š¬73 per share was fair.5 RECOMMENDATION OF UNILOG SUPERVISORY BOARDA meeting of the supervisory board of Unilog was held on 24 October 2005 inorder to assess the terms of the Offer, the terms of which are reproducedhereafter."In a meeting held on 24 October 2005 and presided over by Chairman Mr PierreDeschamps, the Supervisory Board reviewed the voluntary public Offer to befiled by LogicaCMG UK and targeting Unilog shares (the "Offer"). AllSupervisory Board members were present.The Supervisory Board read:(i) The conclusions of the positive reasoned opinion given by the UnilogCentral Works Council on 17 September 2005;(ii) The conclusions of the report from Ricol, Lasteyrie & Associƒ©s mandated toassist the Board in reviewing the terms of LogicaCMG UK's offer, and concludingthat "the financial terms offered by LogicaCMG in this public Tender Offer forUnilog shares is fair to Unilog shareholders from a financial point of view";(iii) All information available as to the offeror's intentions and the mainOffer terms including the assessment of the Offer price prepared by thepresenting bank and included in the joint prospectus for the Offer dated 24October 2005.The Supervisory Board deems that the Offer, and more generally the transactionbetween LogicaCMG and Unilog:- allows a European leader in IT services to be created;- is in line with market expectations and ensures the Company's future withinthe proposed enlarged group;- is highly complementary in terms of geography and skills;- will be realised to a significant extent by current Company managers, whowill take an active role in the future group's development; and- ensures equality between Company shareholders, who may all sell their stakein the company for the same price as the main executives, i.e. for ¢â€š¬73 pershare.The Supervisory Board notes that the financial terms of the Tender Offerrepresent a premium for Company shareholders of 32%, 36%, and 34% respectivelyover the average market prices (volume-weighted) recorded one month, threemonths, and six months before the speculative rumours of 1 July 2005.The Supervisory Board considers the price of ¢â€š¬73 per share to be a fair valuefor the Company, and that such price therefore meets the shareholders'interests and offers all Company shareholders the same price terms as thoseaccepted by executive shareholders having entered into the block tradeagreement with LogicaCMG.In light of the foregoing observations, the Supervisory Board has decided,after deliberations and by a unanimous vote of voting members, that the TenderOffer is in the Company's, the shareholders', and the employees' interest, andconsequently approves the Tender Offer and the Prospectus, and recommends thatCompany shareholders tender their shares to the Offer.All Supervisory Board members indicated that they personally intend to tendertheir shares to the Offer."6 INDICATIVE TIMETABLEIn accordance with current regulations, the Offer timetable will be publishedby the AMF. As of today, LogicaCMG UK anticipates that the settlement/deliveryof the Offer will take place in early January 2006.7 CONTACT DETAILS OF THE PERSONS IN CHARGE OF MEDIA AND INVESTOR RELATIONSLogicaCMG plc:Media Relations - Carolyn Esser +44 (0)20 7446 1786Investor Relations - Tony Richards/Frances Gibbons +44 (0)20 7446 4341Unilog :Investor Relations - Christian Viguiƒ© 01 58 22 40 21Press Relations - Christine Dollfus 01 58 22 46 91Not for release, distribution or publication into or in the United States,Australia, Canada, Japan or the Republic of South AfricaENDLOGICACMG PLCRelated Shares:
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