11th Dec 2006 07:02
Spirent Communications PLC11 December 2006 Spirent Communications plc11 December 2006 SPIRENT COMMUNICATIONS PLC FURTHER CIRCULAR TO SHAREHOLDERS Why shareholders should vote against the EGM resolutions London, UK - 11 December 2006 Spirent Communications plc ("Spirent" or the"Company") (LSE: SPT; NYSE: SPM), a leading technology communications company,is today posting to its shareholders a circular that reinforces the reasonsprovided in the Notice of Requisitioned Extraordinary General Meeting issued on29 November 2006 why the Board recommends shareholders to vote against all theresolutions at the forthcoming Extraordinary General Meeting on 22 December 2006(the "EGM"). The EGM has been requisitioned by three shareholders led by Sherborne InvestorsGP, LLC ("Sherborne"). Sherborne is seeking to gain effective control of theBoard of Spirent by replacing three of the Company's non-executive directors,including the Chairman, with four of its own nominees. Highlights: • Spirent has taken the actions to turn around the business already and has in place a clear strategy to create more value for shareholders • The current non-executive team is right for Spirent - Sherborne's proposed directors are wrong for Spirent • Sherborne's claimed turnaround expertise is not relevant for the next stage of Spirent's development • Sherborne's proposal is an attempt to take effective control of the Board without paying a premium Board recommendation to vote against the resolutionsThe Spirent Board unanimously recommends shareholders to vote against all theresolutions as it does not believe they are in the best interests of the Companyand shareholders as a whole. Sherborne is a turnaround investment firm. It has no new strategy for Spirentand does not have the relevant expertise or experience to justify its takingcontrol of the Board. Spirent has undergone considerable restructuring in recentyears and is poised to take advantage of this hard work and investment.Sherborne's claimed turnaround skills are not relevant to the next stage ofSpirent's development. This attempt to take control of the Board would, ifsuccessful, result in considerable disruption to Spirent at a key time. Transformation and turnaround of Spirent underwayThe circular sets out how the current Board has transformed Spirent in recentyears to the position where it now has a clear strategy to create further valuefor shareholders. In recent years, key actions have included the sale ofHellermannTyton for £298m; significant reductions in the cost base includingmanufacturing, outsourcing and removal of a layer of management; new productdevelopments including the launch of Spirent TestCenter, which has already beenadopted by over 150 customers; and the building of significant positions in newand growing technologies. Spirent's clear strategyThe Board has in place a clear strategy to create more value for shareholders.This includes a margin improvement plan and exploitation of the substantialinvestment in Spirent TestCenter; further operating cost reductions of £7m on anannualised basis; termination of the Company's US listing and SEC registration(which currently costs some £3m per year); and an additional £50m share buy backprogramme. Indeed Sherborne acknowledges that this is the right strategy for Spirent,stating in its letter to shareholders of 5 December 2006: "We (Sherborne)believe it is unlikely that the Company's position will be greatly improved bynew and radical strategic initiatives". Share price outperformanceManagement's actions are beginning to deliver improving performance fromSpirent's core Performance Analysis business. Since the appointment of Spirent'sChairman, John Weston, was announced in 2002, and over the last 12 months,Spirent's share price has outperformed its peer group. Spirent has the right teamThe circular points out how the director candidates proposed by Sherborne do nothave the relevant skills or sector expertise to take the Company forward.Sherborne's proposed directors are experienced in speciality chemicals, visualinformation technology and the distribution of promotional products. This shouldbe contrasted with the current Spirent non-executives who include directors whohave held senior positions at Ericsson, Verizon Communications and NorthernTelecom Ltd and the former chief executives of BAE Systems plc and GKN plc. Marcus Beresford, Senior Independent Director at Spirent, said: "Spirent is in a very different situation to those companies that Sherborne hastraditionally bought into, having already taken the actions to turn around thebusiness. It is already in a strong financial position and is poised to deliversignificant benefits from previously taken and ongoing management actions. Sherborne is blatantly seeking to take control of the Board without paying apremium to all shareholders. Its proposals would also mean that the Board wouldnot comply with important principles of good corporate governance. The Board unanimously recommends shareholders vote against all the resolutionsas it does not believe they are in the best interests of the Company andshareholders as a whole." For further information please contact: Reg Hoare Smithfield +44 (0)20 7360 4900Angus Maitland Maitland +44 (0)20 7379 5151 About Spirent Communications plcSpirent Communications plc is a leading communications technology companyfocused on delivering innovative systems and services to meet the needs of customers worldwide. We are a global provider of performance analysis and serviceassurance solutions that enable the development and deployment ofnext-generation networking technologies such as broadband services, Internettelephony, 3G wireless and web applications and security testing. The Systemsgroup develops power control systems for specialist electrical vehicles in themobility and industrial markets. Further information about SpirentCommunications plc can be found at www.spirent.com. Spirent Communications plc Ordinary shares are traded on the London StockExchange (ticker: SPT) and on the New York Stock Exchange (ticker: SPM; CUSIPnumber: 84856M209) in the form of American Depositary Shares ("ADS"),represented by American Depositary Receipts, with one ADS representing fourOrdinary shares. Spirent and the Spirent logo are trademarks or registered trademarks of SpirentCommunications plc. All other trademarks or registered trademarks mentionedherein are held by their respective companies. All rights reserved. This press release may contain forward-looking statements (as that term isdefined in the United States Private Securities Litigation Reform Act of 1995)based on current expectations or beliefs, as well as assumptions about futureevents. You can sometimes, but not always, identify these statements by the useof a date in the future or such words as "will", "anticipate", "estimate","expect", "project", "intend", "plan", "should", "may", "assume" and othersimilar words. By their nature, forward-looking statements are inherentlypredictive and speculative and involve risk and uncertainty because they relateto events and depend on circumstances that will occur in the future. You shouldnot place undue reliance on these forward-looking statements, which are not aguarantee of future performance and are subject to factors that could cause ouractual results to differ materially from those expressed or implied by thesestatements. The Company undertakes no obligation to update any forward-lookingstatements contained in this press release, whether as a result of newinformation, future events or otherwise. END This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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