9th May 2005 06:00
For immediate release Part 1 of 2 Not for release, publication or distribution in or into or from the United States, Canada, Australia or Japan 6 May 2005 Ulster Television plc Recommended cash offer for The Wireless Group Plc to be made by Numis Securities Limited on behalf of Ulster Television plc. Summary * The Offer will be 91 pence in cash for each Wireless Share. On this basis, the Offer values the entire existing issued and to be issued ordinary share capital of Wireless (assuming full exercise of the options granted under the Wireless Share Option Schemes which will become exercisable at or below the Offer Price upon the Offer becoming or being declared unconditional in all respects and full conversion of the Wireless B Shares) at approximately ‚£98.2 million. * Wireless Shareholders will also be offered: * a Partial Share Alternative on the basis of 71.5 pence in cash and 0.03951 New UTV Shares for every Wireless Share; and * an Additional Share Facility whereby Wireless Shareholders who validly accept the Offer and the Partial Share Alternative may elect, subject to availability, to receive further New UTV Shares instead of the cash that they would otherwise be entitled to under the Partial Share Alternative on the basis of 0.0020263 New UTV Shares for every 1 pence in cash they would otherwise be entitled under the Partial Share Alternative. * The Offer represents a premium of (i) approximately 10.3 per cent. over the closing middle market price of 82.5 pence per Wireless Share on 18 April 2005, the last dealing day prior to the date on which UTV announced that it was in discussions with Wireless concerning a potential offer for Wireless and (ii) approximately 1.1 per cent. over the closing middle market price of 90 pence per Wireless Share on 11 February 2005, the last dealing day prior to the announcement by Wireless that it had received a proposal regarding a possible cash offer for Wireless. * The Partial Share Alternative values each Wireless Share at approximately 91 pence and the entire issued and to be issued ordinary share capital of Wireless (assuming full exercise of the options granted under the Wireless Share Option Schemes which will become exercisable at or below the Offer Price upon the Offer becoming or being declared unconditional in all respects and full conversion of the Wireless B Shares) at approximately ‚£ 98.2 million, based on the closing middle market price of 493.5 pence per UTV Share on the date of this announcement. On this basis, (i) the Partial Share Alternative represents a premium of approximately 10.3 per cent. over the closing middle market price of 82.5 pence per Wireless Share on 18 April 2005, the last dealing date prior to the date on which UTV announced that it was in discussions concerning a potential bid for Wireless and (ii) approximately 1.1 per cent. over the closing middle market price of 90 pence per Wireless Share on 11 February 2005, the last dealing day prior to the announcement by Wireless that it had received a proposal regarding a possible cash offer for Wireless. * The Offer is conditional, inter alia, on the approval of UTV Shareholders at an extraordinary general meeting to be convened shortly. * The Wireless Independent Directors, who have been so advised by Goldman Sachs International, consider the terms of the Offer to be fair and reasonable. In providing advice to the Wireless Independent Directors, Goldman Sachs International has taken account of the Wireless Independent Directors' commercial assessments. * Accordingly, the Wireless Independent Directors are unanimously recommending that Wireless Shareholders accept the Offer and the only Wireless Independent Director who is also a Wireless Shareholder has irrevocably undertaken to accept the Offer in respect of his entire interest in Wireless (comprising, in aggregate, 2,000 Wireless Shares and representing approximately 0.0024 per cent. of the existing issued ordinary share capital of Wireless). * UTV has also received irrevocable undertakings to accept the Offer and not to elect for the Partial Share Alternative from News International and LMC Radio in respect of their entire holdings of, in aggregate, 42,804,987 Wireless Shares, representing approximately 51.2 per cent. of Wireless's existing issued ordinary share capital. The terms of the irrevocable undertakings require acceptance of the Offer even if a competing or higher offer is made by a third party, but cease to be binding if the Offer lapses or is withdrawn. In addition, pursuant to an agreement between UTV and News International, dated the same day as this announcement, News International has (subject to the Offer becoming or being declared unconditional in all respects) agreed to sell its entire holding of Wireless B Shares (comprising 18,410 Wireless B Shares, being all of the issued Wireless B Shares) for ‚£910 per Wireless B Share (being an amount equal to the value, at the Offer Price, of the Wireless Shares into which such Wireless B Shares are convertible). * The formal documentation relating to the Offer is expected to be despatched to Wireless Shareholders (other than certain Overseas Shareholders) shortly. * Commenting on the Offer, Patrick Cox, the Senior Independent Non Executive Director of Wireless said: "The Independent Directors of Wireless are pleased to recommend this offer to the Wireless shareholders. The offer provides the best available cash value for those investors that are seeking to monetise their holdings and provides a share alternative for those investors that would elect to maintain their exposure to the growing UK radio market. We believe that the combination of Wireless and UTV will create a strong competitor in the UK media market, with a diversified portfolio in TV and radio and a platform for expansion in the new digital channel formats." * Commenting on the Offer, John McCann, Chief Executive of UTV said: "UTV looks forward to bringing Wireless's radio assets into the UTV portfolio. We believe that this acquisition will offer exciting opportunities for the continued expansion of UTV's business by providing a cornerstone for a broader radio strategy in Great Britain."This summary should be read in conjunction with the full text of the followingannouncement. Appendix II contains the sources and bases for certaininformation set out in this announcement. Appendix III to this announcementcontains definitions of certain expressions used in this summary and thisannouncement.Enquiries:Jag Mundi, Head of Corporate FinanceChris Wilkinson, Director, Corporate BrokingNumis Securities Limited Tel: 020 7776 1500(Financial Adviser to UTV)Richard Campbell-Breeden, Managing DirectorRobert Sorrell, Executive DirectorGoldman Sachs International Tel: 020 7774 1000(Financial Adviser to Wireless)Numis, which is authorised and regulated in the United Kingdom by the FinancialServices Authority, is acting exclusively for UTV and no one else in connectionwith the Offer and will not be responsible to anyone other than UTV forproviding the protections afforded to clients of Numis nor for providing advicein relation to the Offer or in relation to the contents of this announcement orany transaction or arrangement referred to herein.Goldman Sachs International, which is authorised and regulated in the UnitedKingdom by the Financial Services Authority, is acting exclusively for Wirelessand no one else in connection with the Offer and will not be responsible toanyone other than Wireless for providing the protections afforded to clients ofGoldman Sachs International nor for providing advice in relation to the Offeror in relation to the contents of this announcement or any transaction orarrangement referred to herein.The Offer will not be made, directly or indirectly, and this announcementshould not be sent, in or into or from the United States, Canada, Australia orJapan or by use of the mails or by any means or instrumentality (including,without limitation, telephonically or electronically) of interstate or foreigncommerce of, or any facilities of a national securities exchange of, any ofthese jurisdictions and doing so may render invalid any purported acceptance ofthe Offer. Accordingly, copies of this announcement and any other documentrelating to the Offer are not being, and must not be, mailed or otherwisedistributed or sent in or into the United States, Canada, Australia or Japan.Any person (including, without limitation, custodians, nominees and trustees)who may have contractual or legal obligations, or may otherwise intend, toforward this announcement to any jurisdiction outside the United Kingdom shouldread the relevant provisions of the Offer Document before taking any action.The availability of the Offer to persons not resident in the United Kingdom maybe affected by the laws of the relevant jurisdictions in which they arelocated. Persons who are not resident in the United Kingdom should informthemselves about and observe any applicable requirements.This announcement is not intended to and does not constitute, or form part of,an offer or any solicitation of an offer or an invitation to purchase anysecurities.The Offer will be subject to the City Code. Under the rules of the City Code,there are certain dealing disclosure requirements which apply in respect ofdealings in relevant securities during an offer period. An offer period wasdeemed to have commenced by virtue of the announcement on 14 February 2005 thatWireless had received a proposal regarding a possible cash offer for Wireless.As a result, any person who, alone or acting together with any other person(s)pursuant to an agreement or understanding (whether formal or informal) toacquire or control securities of UTV or Wireless, owns or controls, or becomesthe owner or controller, directly or indirectly of one per cent. or more of anyclass of securities of UTV or Wireless is generally required under theprovisions of Rule 8 of the City Code to notify a Regulatory InformationService and the Panel of every dealing in such securities until such time asthe offer period ends for the purposes of the City Code. If required, anydisclosures should be made on an appropriate form by no later than 12 noonLondon time on the business day following the date of the dealing transaction.These disclosures should be sent to a Regulatory Information Service with acopy sent (by fax or email) to the Panel (fax number +44 (0)20 7236 7013,email: [email protected]).This announcement contains certain statements that are or may beforward-looking. These statements typically contain words such as "intends","expects", "anticipates", "estimates" and words of similar import. By theirnature, forward-looking statements involve risk and uncertainty because theyrelate to events and depend on circumstances that will occur in the future.There are a number of factors that could cause actual results and developmentsto differ materially from those expressed or implied by such forward-lookingstatements. These factors include, but are not limited to, factors identifiedelsewhere in this announcement as well as the following possibilities: futurerevenues are lower than expected; costs of difficulties relating to theintegration of the businesses of UTV and Wireless, or of other futureacquisitions, are greater than expected; expected cost savings from thetransaction or from other future acquisitions are not fully realised or notrealised within the expected time frame; competitive pressures in the industryincrease; general economic conditions or conditions affecting the relevantindustries, whether internationally or in the places where UTV and Wireless dobusiness, are less favourable than expected; and/or conditions in thesecurities market are less favourable than expected. Part 2 of 2 Not for release, publication or distribution in or into or from the United States, Canada, Australia or Japan FOR IMMEDIATE RELEASE 6 May 2005 Ulster Television plc Recommended cash offer for The Wireless Group Plc to be made by Numis Securities Limited on behalf of Ulster Television plc. * The Offer will be 91 pence in cash for each Wireless Share. * Wireless Shareholders will also be offered a Partial Share Alternative on the basis of 71.5 pence in cash and 0.03951 New UTV Shares for every Wireless Share. * UTV has received undertakings to accept the Offer in respect of approximately 51.2 per cent., in aggregate, of the existing issued ordinary share capital of Wireless. These undertakings remain binding in the event of a competing or higher offer from a third party. * UTV has agreed to acquire (subject to the Offer becoming unconditional in all respects) News International Limited's entire holding of Wireless B Shares (comprising 18,410 Wireless B Shares, being all of the issued Wireless B Shares). 1. IntroductionThe Board of UTV and the Wireless Independent Directors are pleased to announcea recommended cash offer to be made by Numis on behalf of UTV for the entireissued and to be issued ordinary share capital of Wireless.2. Terms of the OfferThe Offer, which will be made on the terms and subject to the conditions setout below and in Appendix I to this announcement, and subject to the furtherterms to be set out in the Offer Document and in the Form of Acceptance, willbe made on the following basis:for each Wireless Share 91 pence in cashOn this basis, the Offer values the entire existing issued and to be issuedordinary share capital of Wireless (assuming full exercise of the optionsgranted under the Wireless Share Option Schemes which will become exercisableat or below the Offer Price upon the Offer becoming or being declaredunconditional in all respects and full conversion of the Wireless B Shares) atapproximately ‚£98.2 million.The Offer represents a premium of (i) approximately 10.3 per cent. over theclosing middle market price of 82.5 pence per Wireless Share on 18 April 2005,the last dealing day prior to the date of the announcement by UTV that it wasin discussions concerning a potential offer for Wireless and (ii) approximately1.1 per cent. over the closing middle market price of 90 pence per WirelessShare on 11 February 2005, the last dealing day prior to the announcement byWireless that it had received a proposal regarding a possible cash offer forWireless.The Wireless Shares are to be acquired, pursuant to the Offer, fully paid andfree from all liens, charges, equitable interests, encumbrances, rights ofpre-emption and other third party rights or interests of any nature whatsoeverand together with all rights now or hereafter attaching to them.3. Partial Share AlternativeWireless Shareholders who validly accept the Offer will be able to elect forthe Partial Share Alternative in respect of all or part of their holdings ofWireless Shares, in which case such Wireless Shares shall be acquired on thefollowing basis:for each Wireless Share 71.5 pence in cash and 0.03951 New UTV Sharesand so in proportion for any other number of Wireless Shares which are thesubject of valid elections for the Partial Share Alternative.The Partial Share Alternative values each Wireless Share at 91 pence and theentire issued and to be issued ordinary share capital of Wireless (assumingfull exercise of the options granted under the Wireless Share Option Schemeswhich will become exercisable at or below the Offer Price upon the Offerbecoming or being declared unconditional in all respects and full conversion ofthe Wireless B Shares) at approximately ‚£98.2 million, based on the closingmiddle market price of 493.5 pence per UTV Share on the date of thisannouncement. On this basis, the Partial Share Alternative represents a premiumof (i) approximately 10.3 per cent. over the closing middle market price of82.5 pence per Wireless Share on 18 April 2005, the last dealing date prior tothe date on which UTV announced that it was in discussions concerning apotential offer for Wireless and (ii) approximately 1.1 per cent. over theclosing middle market price of 90 pence per Wireless Share on 11 February 2005,the last dealing day prior to the announcement by Wireless that it had receiveda proposal regarding a possible cash offer for Wireless.Fractions of New UTV Shares will not be allotted and the number of New UTVShares allotted to each Wireless Shareholder who validly accepts the Offer andelects for the Partial Share Alternative will be rounded down to the nearestwhole number. The amount of any entitlement to a fraction of a New UTV Shareshall be paid in full in cash to the accepting Wireless Shareholder.Full election under the Partial Share Alternative in respect of all of theWireless Shares (assuming full exercise of the options granted under theWireless Share Option Schemes which will become exercisable at or below theOffer Price upon the Offer becoming or being declared unconditional in allrespects) would involve the issue of 3,536,231 New UTV Shares representingapproximately 6.1 per cent. of the enlarged issued ordinary share capital ofUTV (being less than 10 per cent. of the current issued ordinary share capitalof UTV). Each of News International and LMC Radio have irrevocably undertakennot to elect for the Partial Share Alternative in respect of their entirebeneficial holdings of Wireless Shares. The New UTV Shares to which they wouldotherwise be entitled under the Partial Share Alternative will therefore beavailable to satisfy elections under the Additional Share Facility referred tobelow.Elections for the Partial Share Alternative will only be accepted in respect ofwhole numbers of Wireless Shares.The Partial Share Alternative is conditional on the Offer becoming or beingdeclared unconditional in all respects.The Partial Share Alternative will remain open for acceptance until 3.00 p.m.on the First Closing Date. If, at that time, the Offer is or is capable ofbeing declared unconditional as to acceptances and it is so declared, or it isnot so declared and it is extended, the Partial Share Alternative will remainopen for 14 days thereafter, but may then be closed without prior notice. Ifthe Partial Share Alternative closes or lapses at a time when the Offer remainsconditional as to acceptances, the right is reserved to reintroduce a partialshare alternative so long as the Offer is then unconditional as to acceptances.UTV currently intends to close the Partial Share Alternative 14 days after theFirst Closing Date to avoid any obligation to publish a prospectus under theProspectus Directive to be implemented with effect from 1 July 2005.4. Additional Share FacilityWireless Shareholders who validly accept the Offer and who validly elect forthe Partial Share Alternative in respect of their entire holding of WirelessShares may elect, subject to availability, to receive additional New UTV Sharesinstead of all or part of the cash that they would otherwise be entitled tounder the Partial Share Alternative. By making an election under the AdditionalShare Facility, such Wireless Shareholders will receive New UTV Shares on thefollowing basis:for every 1 pence in cash to which they 0.0020263 New UTV Share(s)would otherwise be entitled under thePartial Share AlternativeThe aggregate number of New UTV Shares available to satisfy elections under theAdditional Share Facility shall not exceed the aggregate number of New UTVShares available under the Partial Share Alternative and not utilised byelections under it. Any available New UTV Shares after satisfaction in full ofthe elections for the share element under the Partial Share Alternative will beapplied in satisfying as far as possible, on a pro rata basis, Additional ShareElections.The Additional Share Facility is conditional upon the Offer becoming or beingdeclared unconditional in all respects.The Additional Share Facility will remain open for so long as the Partial ShareAlternative remains open.5. Background to, reasons for and benefits of the OfferThe UTV Board believes that the combination of UTV and Wireless has acompelling strategic, commercial and financial rationale.Strategic RationaleThe UTV Board has been considering for some time the possibility of developinga radio strategy in Great Britain. Given the scale and market share of UTV'scurrent business in Northern Ireland and the Republic of Ireland, the Boardconcluded that one way of continuing to build the UTV Group's radio businessand leverage its expertise in this area was to explore opportunities foracquiring radio businesses in Great Britain.Wireless' national franchise and diversified portfolio of local stations willprovide a significant contribution to developing UTV's strategy of expansion inthe radio sector and UTV's existing expertise will enable it to assist Wirelessin further developing its leading role in UK radio broadcasting. Theacquisition will provide additional financial strength to drive both organicgrowth and the potential for subsequent acquisition-led growth. The UTV Boardbelieves that it can be used as the cornerstone of a broader radio strategy inGreat Britain.The Enlarged Group will have extensive broadcasting assets and will be wellplaced to pursue opportunities in both analogue and digital broadcasting. Inanalogue radio, the Enlarged Group will hold one of three commercial nationallicences, will own 22 independent local radio stations and will have interestsin three other independent local radio stations. In digital radio, thecombination of digital radio broadcasting and Wireless's interests in localdigital multiplexes will enable exploitation of the strong anticipated growthin take-up in this sector - 13 million homes in the UK are forecast to havedigital radio in 2008 (up from approximately 1 million in 2004).Commercial RationaleThe UTV Board believes that the Enlarged Group will provide a very attractivemarketing proposition to both local and national advertisers and will thereforeseek to exploit the forecasted growth in radio advertising expenditure, whichincreased by 3.4 per cent. to ‚£604 million in 2004 and is expected to rise atthe same rate in 2005. The Enlarged Group will aim to increase advertisingrevenue by promoting its wider geographic coverage and offering of channels.Financial RationaleAttractive cost savings: The UTV Board believes that the annualised pre-taxoperating cost savings resulting from the Offer will amount to at least ‚£1.5million in the first full financial year of ownership of Wireless (the year to31 December 2006) *. These savings will be realised through operationalefficiencies as well as the rationalisation of stock exchange listing andheadquarters' costs and other overhead areas.Earnings accretion: The UTV Board believes that the Offer, if successful, willhave an accretive effect on earnings per UTV Share in the first full financialyear of ownership of Wireless.*(*Note: This statement does not constitute a profit forecast nor should it beinterpreted to mean that future earnings per UTV Share following the Offerbecoming or being declared unconditional in all respects will necessarily matchor exceed historical earnings per UTV Share.)6. Further terms of the OfferThe Offer will be conditional, inter alia, on the passing of the Resolutions byUTV Shareholders at the EGM, which, if passed, will approve the Offer as aClass 1 transaction, enable the UTV Directors to offer the New UTV Shares underthe Partial Share Alternative and the Additional Share Facility and amend thearticles of association of UTV to increase its borrowing powers.The New UTV Shares will be issued credited as fully paid and free from allliens, equities, charges, encumbrances and other interests. The New UTV Shareswill be identical to and rank pari passu in all respects with the existingissued UTV Shares, including the right to receive and retain all dividends andother distributions declared, made or paid thereafter, save that the New UTVShares will not carry the right to receive the final UTV dividend in respect ofthe year ended 31 December 2004 of 7p (net) per UTV Share.The Offer will also be subject to the conditions and further terms set out inAppendix I to this announcement and the further terms and conditions to be setout in the Offer Document and Form of Acceptance.7. Irrevocable Undertakings and Wireless B SharesUTV has received an irrevocable undertaking to accept the Offer from KeithSadler, being the only Wireless Independent Director who is also a WirelessShareholder, in respect of his entire beneficial holdings of Wireless Shares,amounting to 2,000 Wireless Shares, representing approximately 0.0024 percent., in aggregate, of the existing issued ordinary share capital of Wireless.In addition, Wireless has received irrevocable undertakings to accept the Offerand not to elect for the Partial Share Alternative from News International andLMC Radio in respect of their entire beneficial holdings of Wireless Shares,amounting to 42,804,987 Wireless Shares, representing approximately 51.2 percent, in aggregate, of the existing issued ordinary share capital of Wireless.Accordingly, Wireless has received irrevocable undertakings to accept the Offerin respect of 42,806,987 Wireless Shares, representing approximately 51.2 percent of the existing issued ordinary share capital of Wireless.The terms of the irrevocable undertakings require acceptance of the Offer evenif a competing or higher offer is made by a third party. Such undertakings willcease to be binding only if the Offer lapses or is withdrawn.In addition, pursuant to an agreement between UTV and News International, datedthe same day as this announcement, News International has (subject to the Offerbecoming unconditional in all respects) agreed to sell its entire holding ofWireless B Shares (comprising 18,410 Wireless B Shares, being all of the issuedWireless B Shares) for ‚£910 per Wireless B Share (being an amount equal to thevalue, at the Offer Price, of the Wireless Shares into which such Wireless BShares are convertible).8. Financing of the OfferThe cash consideration payable under the Offer is being financed by a committeddebt facility agreement with The Governor and Company of The Bank of Ireland.Further details of the facility agreement will be set out in the OfferDocument.9. Information on UTVUTV is the Northern Ireland ITV broadcaster and is also received byapproximately two thirds of households in the Republic of Ireland. It is listedon the Official List with a market capitalisation of approximately ‚£268 millionas at the date of this announcement.UTV has five independent local radio stations in the Republic of Ireland,broadcasting to Cork, Limerick, Dublin, Drogheda and Dundalk, and also has a33.3 per cent. interest in Juice FM, an independent local radio stationoperating in Liverpool. UTV was recently awarded the radio broadcasting licencecovering Belfast and the surrounding area. This new licence will come on airearly next year, broadcasting to approximately 55 per cent. of the adultpopulation in Northern Ireland and adding to the 51 per cent. of the adultpopulation in the Republic of Ireland to which UTV's stations alreadybroadcast. A further 16 per cent. of the adult population in the Republic ofIreland is served by independently owned radio stations whose airtime is soldby UTV's radio sales house.Detailed financial information on UTV for the three years ended 31 December2004 will be set out in the Offer Document which will be despatched to WirelessShareholders shortly. The summarised historical results of UTV set out belowhave been extracted from the audited consolidated accounts of UTV: Year ended 31 December 2004 2003 2002 ‚£'000 ‚£'000 ‚£'000 Turnover 63,503 53,961 47,294 Profit before taxation and 17,497 13,625 13,947goodwill amortisation Profit before taxation 13,868 9,536 11,281 Net assets 34,275 29,783 25,862 Net debt (18,456) (29,051) (27,425)10. Information on WirelessWireless is the UK's fifth largest radio broadcaster as measured by ownershippoints. Its principal operations comprise talkSPORT, a national, speech based,sports station, and 17 independent local radio stations, predominantly in theNorthwest of England, Scotland and Wales.In addition, Wireless has expanded into digital radio and currently owns stakesin consortia that hold local digital multiplex licences covering GreaterLondon, Scotland, Stoke, South Wales and Bradford and Huddersfield.Detailed financial information on Wireless for the three years ended 31December 2004 will be set out in the Offer Document which will be despatched toWireless Shareholders shortly. The summarised historical results of Wirelessset out below have been extracted from the audited consolidated accounts ofWireless: Year ended 31 December 2004 As reported Restated 2002 2003 ‚£'000 2003 ‚£'000 ‚£'000 ‚£'000 Turnover 39,722 32,547 32,547 28,470 Profit/(Loss) before 2,134 1,091 1,091 (5,056)taxation and goodwill amortisation Profit/(Loss) before (9,697) (11,175) (11,175) (20,260)taxation Net assets 16,361 20,029 19,745 31,172 Net debt (5,740) (3,345) (3,345) (5,088)11. Current Trading of UTV and Wireless and Prospects for the Enlarged GroupUTVOn 21 February 2005, UTV completed the acquisition of the local independentradio station LMFM, covering Drogheda and Dundalk, for ‚£6.7 million. On 7 March2005, UTV announced that it had been awarded the new Belfast radio licence bythe communications regulator, Ofcom. The new station will broadcast on 105.1 FMto Belfast and the surrounding area.As stated in UTV's announcement of its preliminary results on 7 March 2005,television and radio advertising revenues were expected to be 5 per cent. upand 20 per cent. up respectively in the first quarter of 2005. The UTV Boardconsiders the financial and trading prospects for UTV for the current financialyear to be satisfactory.WirelessAs stated in Wireless's announcement of its preliminary results on 30 March2005, the first quarter of 2005 has started well with cash revenues for theWireless Group up 9.9 per cent. against the same quarter in 2004, although theWireless Board expects that revenues will be affected in April by the GeneralElection, with some advertisers not spending until after the General Electionin May. The Wireless Board considers the financial and trading prospects forWireless for the current financial year to be satisfactory.Prospects for the Enlarged GroupThe UTV Directors believe that the acquisition of Wireless will strengthenUTV's position as a TV and radio broadcaster in the Republic of Ireland and theUK. The Enlarged Group is expected to benefit from having an increasedpresence, with a wider offering of broadcasting assets with which to developcross-selling opportunities.The benefits of the acquisition are likely to be reflected in the EnlargedGroup's financial year ending 31 December 2006. * If the Offer becomes whollyunconditional, the increased size of the Enlarged Group will enable the UTVBoard to explore further strategic opportunities in the broadcasting sector.The Uncle Board considers the financial and trading prospects for the EnlargedGroup for the current financial year to be satisfactory.(*Note: This statement does not constitute a profit forecast nor should it beinterpreted to mean that future earnings per UTV Share following the Offerbecoming or being declared unconditional in all respects will necessarily matchor exceed historical earnings per UTV Share.)12. Inducement FeeOn the date of this announcement Wireless has entered into an inducement feeagreement with UTV pursuant to which it has undertaken to pay UTV a sum of ‚£940,000 (inclusive of VAT) if:(a) prior to the Offer lapsing or being withdrawn, an offer for Wireless (orfor all or substantially all of Wireless's business) from a third party isannounced which becomes or is declared unconditional in all respects before theexpiry of six months after the Offer lapses or is withdrawn; or(b) the Wireless Independent Directors withdraw or modify their recommendationof the Offer in a manner adverse to the Offer and the Offer subsequently lapsesor is withdrawn,provided that the sum is not payable if the Offer lapses or is withdrawnbecause of the failure of UTV Shareholders to approve the Offer or because of afailure to obtain certain regulatory approvals.13. Directors, management and employeesUTV has given assurances to the Wireless Independent Directors that, followingthe Offer becoming or being declared unconditional in all respects, theexisting employment rights, including pension rights, of all employees of theWireless Group will be fully safeguarded.14. Wireless Share Option SchemesThe Offer will extend to any Wireless Shares which are unconditionally allottedor issued fully paid (or credited as fully paid) including pursuant to theexercise of options granted under the Wireless Share Option Schemes prior tothe date on which the Offer closes (or such earlier date as UTV may, subject tothe Code, determine, not (without the consent of the Panel) being earlier thanthe date on which the Offer becomes unconditional as to acceptances or, iflater, the First Closing Date of the Offer). All options granted under theWireless Share Option Schemes that are not already exercisable becomeexercisable if the Offer becomes or is declared unconditional in all respects.To the extent that such options remain unexercised, UTV will make appropriateproposals to Wireless Option Holders once the Offer becomes or is declaredunconditional in all respects.15. Compulsory acquisition and de-listingIf the Offer becomes or is declared unconditional in all respects, UTV intendsto procure the making of applications by Wireless to the UK Listing Authorityfor the cancellation of the listing of the Wireless Shares on the Official Listand to the London Stock Exchange for the cessation of trading of WirelessShares on its market for listed securities. It is anticipated that de-listingand cancellation of trading will take effect no earlier than 20 business daysafter the Offer becomes or is declared unconditional in all respects.De-listing would significantly reduce the liquidity and marketability of anyWireless Shares not assented to the Offer.If UTV receives acceptances under the Offer in respect of, and/or otherwiseacquires an aggregate of 90 per cent. or more of the Wireless Shares to whichthe Offer relates, UTV intends to exercise its rights pursuant to theprovisions of sections 428 to 430F (inclusive) of the Act to acquirecompulsorily the remaining Wireless Shares.UTV does not intend to publish a prospectus in connection with the PartialShare Alternative or the Additional Share Facility. Accordingly, as aconsequence of the proposed implementation of the Prospectus Directive in theUK on 1 July 2005 and in the absence of such a prospectus, no further New UTVShares are permitted to be offered as consideration to Wireless Shareholdersunder the Partial Share Alternative or Additional Share Facility after suchdate. For this reason, as set out above, UTV currently intends to close boththe Partial Share Alternative and Additional Share Facility 14 days after theFirst Closing Date, which will be prior to 1 July 2005. As regards any WirelessShares to be acquired by UTV under the compulsory acquisition provisions in theAct, no election for New UTV Shares received after 30 June will be valid.However, as required under the Act, Wireless Shareholders receiving noticesunder section 429 of the Act will be entitled to elect, after 30 June 2005, toreceive the cash equivalent of the New UTV Shares to which they would otherwisehave been entitled if they had been able to elect for the Partial ShareAlternative and/or the Additional Share Facility. The cash equivalent will becalculated by reference to the market value of the UTV Shares on the date therelevant section 429 notice is issued.16. RecommendationThe Wireless Independent Directors, who have been so advised by Goldman SachsInternational, consider the terms of the Offer to be fair and reasonable. Inproviding their advice to the Wireless Independent Directors, Goldman SachsInternational has taken into account the Wireless Independent Directors'commercial assessments. Accordingly, the Wireless Independent Directorsunanimously recommend that Wireless Shareholders accept the Offer and the onlyWireless Independent Director who is also a Wireless Shareholder hasirrevocably undertaken to accept the Offer in respect of his own beneficialholdings of Wireless Shares of, in aggregate, 2,000 Wireless Shares,representing approximately 0.0024 per cent. of the existing ordinary issuedshare capital of Wireless.As described in the announcement issued by Wireless on 14 February 2005, itreceived a proposal regarding a possible offer for Wireless that would haveinvolved the participation of Kelvin MacKenzie. Accordingly, Kelvin MacKenziehas played no part in the deliberations of the Wireless Directors regarding theOffer. Graham Hollis and Dick Linford have participated in the deliberations ofthe Wireless Directors regarding the Offer but, because of their relationshipwith major shareholders of Wireless, have not played any part in the decisionof the Wireless Independent Directors to recommend that Wireless Shareholdersaccept the Offer.17. Disclosure of interests in WirelessOther than pursuant to the undertakings referred to in paragraph 7 of thisannouncement, neither UTV nor, so far as UTV is aware, any party acting inconcert with UTV for the purposes of the City Code, owns or controls, or holdsany options over or has entered into any derivative referenced to, securitiesof Wireless which remain outstanding on 5 May 2005, being the last dealing dayprior to the announcement of the Offer.18. GeneralThe Offer will be open for at least 21 days from the date of the OfferDocument.It is expected that the Offer Document will be despatched to WirelessShareholders shortly.This announcement is not intended to and does not constitute an offer or aninvitation to purchase any securities. The conditions and principal furtherterms of the Offer are set out in Appendix I to this announcement. The Offerwill be subject to the further terms and conditions set out in the OfferDocument and the Form of Acceptance.The definitions of terms used in this announcement are contained in AppendixIII to this announcement.Jag Mundi, Head of Corporate FinanceChris Wilkinson, Director, Corporate BrokingNumis Securities Limited Tel: 020 7776 1500(Financial Adviser to UTV)Richard Campbell-Breeden, Managing DirectorRobert Sorrell, Executive DirectorGoldman Sachs International Tel: 020 7774 1000(Financial Adviser to Wireless)The Offer will be subject to the City Code. Under the rules of the City Code,there are certain dealing disclosure requirements which apply in respect ofdealings in relevant securities during an offer period. An offer period wasdeemed to have commenced upon the announcement on 14 February 2005 thatWireless had received a proposal regarding a possible cash offer for Wireless.As a result, any person who, alone or acting together with any other person(s)pursuant to an agreement or understanding (whether formal or informal) toacquire or control securities of UTV or Wireless, owns or controls, or becomesthe owner or controller, directly or indirectly of one per cent. or more of anyclass of securities of UTV or Wireless is generally required under theprovisions of Rule 8 of the City Code to notify a Regulatory InformationService and the Panel of every dealing in such securities until such time asthe offer period ends for the purposes of the City Code. If required, anydisclosures should be made on an appropriate form by no later than 12 noonLondon time on the business day following the date of the dealing transaction.These disclosures should be sent to a Regulatory Information Service with acopy sent (by fax or email) to the Panel (fax number +44 (0)20 7236 7013,email: [email protected]).Numis, which is authorised and regulated in the United Kingdom by the FinancialServices Authority, is acting exclusively for UTV and no one else in connectionwith the Offer and will not be responsible to anyone other than UTV forproviding the protections afforded to clients of Numis nor for providing advicein relation to the Offer or in relation to the contents of this announcement orany transaction or arrangement referred to herein.Goldman Sachs International, which is authorised and regulated in the UnitedKingdom by the Financial Services Authority, is acting exclusively for Wirelessand no one else in connection with the Offer and will not be responsible toanyone other than Wireless for providing the protections afforded to clients ofGoldman Sachs International nor for providing advice in relation to the Offeror in relation to the contents of this announcement or any transaction orarrangement referred to herein.The Offer will not be made, directly or indirectly, and this announcementshould not be sent, in or into or from the United States, Canada, Australia orJapan or by use of the mails or by any means or instrumentality (including,without limitation, telephonically or electronically) of interstate or foreigncommerce of, or any facilities of a national securities exchange of, any ofthese jurisdictions and doing so may render invalid any purported acceptance ofthe Offer. Accordingly, copies of this announcement and any other documentrelating to the Offer are not being, and must not be, marked or otherwisedistributed or sent in or into the United States, Canada, Australia or Japan.Any person (including, without limitation, custodians, nominees and trustees)who may have contractual or legal obligations, or may otherwise intend, toforward this announcement to any jurisdiction outside the United Kingdom shouldread the relevant provisions of the Offer Document before taking any action.The availability of the Offer to persons not resident in the United Kingdom maybe affected by the laws of the relevant jurisdictions in which they arelocated. Persons who are not resident in the United Kingdom should informthemselves about and observe any applicable requirements.The financial information set out in this document relating to UTV does notconstitute statutory accounts within the meaning of section 262 of the Order.Ernst & Young LLP, Chartered Accountants, have given unqualified audit reportson the statutory accounts of UTV for each of the three financial years ended 31December 2002, 2003 and 2004. Statutory accounts of the UTV Group for each ofthe two financial years ended 31 December 2002, and 2003 have been delivered tothe Registrar of Companies in Northern Ireland pursuant to section 262 of theOrder. Statutory accounts of the UTV Group for the financial year ended 31December 2004 will be delivered to the Registrar of Companies in NorthernIreland pursuant to section 262 of the Order in due course.The financial information set out in this document relating to Wireless doesnot constitute statutory accounts within the meaning of section 240 of the Act.PricewaterhouseCoopers LLP, Chartered Accountants, have given unqualified auditreports on the statutory accounts of Wireless for each of the three financialyears ended 31 December 2002, 2003 and 2004. Statutory accounts of the WirelessGroup for each of the two financial years ended 31 December 2002 and 2003 havebeen delivered to the Registrar of Companies in England and Wales. Statutoryaccounts of the Wireless Group for the financial year ended 31 December 2004will be delivered to the Registrar of Companies in England and Wales in duecourse. Appendix 1 1. Conditions and certain terms of the OfferThe Offer will be subject to the following conditions and to the further termsand conditions set out in the Offer Document and the Form of Acceptance:(a) valid acceptances of the Offer being received (and not, where permitted,withdrawn) by 3.00 p.m. on the First Closing Date (or such later time(s) and/ordate(s) as UTV may, subject to the rules of the Code, decide) in respect of notless than 90 per cent. (or such lesser percentage as UTV may decide) in nominalvalue of the Wireless Shares to which the Offer relates, provided that thiscondition will not be satisfied unless UTV and/or any of its associates shallhave acquired or agreed to acquire, whether pursuant to the Offer or otherwise,Wireless Shares carrying in aggregate more than 50 per cent. of the votingrights then exercisable at a general meeting of Wireless including, to theextent (if any) required by the Panel, any voting rights attaching to anyWireless Shares which are unconditionally allotted before the Offer becomes oris declared unconditional as to acceptances pursuant to the exercise of anyoutstanding conversion or subscription rights or otherwise. For the purposes ofthis condition:(i) Wireless Shares which have been unconditionally allotted shall be deemed tocarry the voting rights which they will carry upon issue; and(ii) the expressions "Wireless Shares to which the Offer relates" and "associates" shall be construed in accordance with sections 428 to 430F of theAct;(iii) valid acceptances shall be deemed to have been received in respect ofWireless Shares which are treated for the purposes of section 429(8) of the Actas having been acquired or contracted to be acquired by UTV and/or itswholly-owned subsidiaries by virtue of acceptances of the Offer;(b) the UK Listing Authority announcing its decision to admit the New UTVShares to the Official List and such admission becoming effective in accordancewith paragraph 7.1 of the Listing Rules of the UK Listing Authority and theLondon Stock Exchange agreeing to admit the New UTV Shares to trading and(unless the Panel agrees otherwise) such admission becoming effective inaccordance with the London Stock Exchange Admission and Disclosure Standards;(c) the passing at an extraordinary general meeting of UTV (or at anyadjournment of such a meeting) of such resolution or resolutions as may benecessary to approve, effect and implement or authorise the implementation ofthe Offer, the acquisition of Wireless Shares pursuant to the Offer orotherwise, the issue of the New UTV Shares, the increase in the borrowingpowers of UTV under its articles of association and the making of any necessaryoffer, proposal or other arrangement to holders of options under the WirelessShare Option Schemes;(d) to the extent that the Irish Competition Act, 2002 ("the Competition Act")is applicable to the Offer and in the event that the Competition Authoritynotifies UTV that it considers the Offer to be a media merger within themeaning of section 23(10) of the Competition Act, the first of one of thefollowing events having occurred in Ireland:(i) the Competition Authority having informed UTV that it has determined,pursuant to section 21(2)(a) of the Competition Act, that the Offer may be putinto effect and the Minister for Enterprise, Trade and Employment ("theMinister") not having directed the Competition Authority pursuant to section 23(2) of the Competition Act within the period specified in section 23(2) of theCompetition Act to carry out an investigation of the Offer under section 22 ofthe Competition Act;(ii) the period specified in section 21(2) of the Competition Act (as may beextended under section 21(4) of the Competition Act) having elapsed without theCompetition Authority having informed UTV of the determination (if any) it hasmade under section 21(2)(a) or 21(2)(b) of the Competition Act;(iii) the Competition Authority having carried out an investigation undersection 22 of the Competition Act and having made a determination under section22(3)(a) or under section 22(3)(c) of the Competition Act on terms reasonablyacceptable to UTV, and the Minister not having made an order within the periodspecified in section 23(4) of the Competition Act;(iv) the Competition Authority having carried out an investigation undersection 22 of the Competition Act and having made a determination under section22(3)(a) or 22(3)(c) of the Competition Act and one of the following eventshaving occurred:(A) the Minister having made an order under section 23(4)(a) of the CompetitionAct; or(B) the Minister having made an order under section 23(4)(b) of the CompetitionAct on terms reasonably acceptable to UTV;(v) the period specified in section 19(1)(d) of the Competition Act havingelapsed without the Competition Authority having made a determination undersection 22 of the Competition Act; orvi. the Competition Authority having carried out an investigation under section 22 of the Competition Act and having made a determination under section 22 (3)(a) or under section 22(3)(c) of the Competition Act on terms reasonably acceptable to UTV and either House of the Oireachtas having passed a resolution annulling an order made by the Minister under Section 23(4) of the Competition Act; e. if the Secretary of State for Trade and Industry gives a special intervention notice under section 59 of the Enterprise Act 2003 or an intervention notice under section 42 of the Enterprise Act 2002, the Offer not being referred to the UK Competition Commission; (f) the Office of Communications not notifying UTV that the Offer will lead tothe revocation of any licences granted to any member of the Wireless groupunder the Broadcasting Act 1990 or the Broadcasting Act 1996 (each as amended);(g) no government or governmental, quasi-governmental, supranational,statutory, regulatory or investigative body, authority, court, trade agency,association or institution or professional or environmental body or any othersimilar person or body whatsoever in any relevant jurisdiction (each a "ThirdParty") having decided to take, instituted, implemented or threatened anyaction, proceedings, suit, investigation, enquiry or reference or havingrequired any action to be taken or information to be provided or otherwisehaving done anything or having made, proposed or enacted any statute,regulation, order or decision or having done anything which would or mightreasonably be expected to:(i) make the Offer or its implementation, or the acquisition or the proposedacquisition by UTV of any shares or other securities in, or control of,Wireless or any of its subsidiaries or subsidiary undertakings or associatedundertakings (including any joint venture, partnership, firm or company inwhich any member of the Wireless Group is substantially interested) (the "widerWireless Group" (and "member of the wider Wireless Group" shall be construedaccordingly)) void, illegal or unenforceable in any jurisdiction, or otherwisematerially restrain, prohibit, restrict, prevent or delay the same or imposeadditional material conditions or material financial or other obligations withrespect thereto, or otherwise challenge or interfere therewith;(ii) require, prevent or materially delay the divestiture or materially alterthe terms envisaged for any proposed divestiture by UTV or any of itssubsidiaries or subsidiary undertakings or associated undertakings (includingany joint venture, partnership, firm or company in which any member of the UTVGroup is substantially interested) (the "wider UTV Group" (and "member of thewider UTV Group" shall be construed accordingly)) of any Wireless Shares or ofany shares in a member of the wider UTV Group;(iii) require, prevent or materially delay the divestiture or materially alterthe terms envisaged for any proposed divestiture by any member of the wider UTVGroup or by any member of the wider Wireless Group of all or any materialportion of their respective businesses, assets or property, or (to an extentwhich is material in the context of the Offer or the wider Wireless Groupconcerned taken as a whole) impose any limit on the ability of any of them toconduct their respective businesses (or any of them) or to own or control anyof their respective assets or properties or any part thereof;(iv) impose any material limitation on, or result in any material delay in, theability of any member of the wider UTV Group or any member of the widerWireless Group to acquire, hold or exercise effectively, directly orindirectly, all or any rights of ownership of Wireless Shares or any shares orsecurities convertible into Wireless Shares or to exercise voting or managementcontrol over any member of the wider Wireless Group or any member of the widerUTV Group in any such case which is material in the context of the widerWireless Group taken as a whole;(v) save as disclosed to UTV prior to the date of this announcement, requireany member of the wider UTV Group and/or of the wider Wireless Group to acquireor offer to acquire or repay any shares or other securities in and/orindebtedness of any member of the wider Wireless Group owned by or owed to anyThird Party in circumstances which would impose on UTV or any member of theWireless Group a liability which is material in the context of the wider UTVGroup taken as a whole or the wider Wireless Group taken as a whole as the casemay be;(vi) impose any limitation on the ability of any member of the wider UTV Groupand/or of the wider Wireless Group to integrate or co-ordinate its business, orany part of it, with the business of any member of the wider Wireless Group orof the wider UTV Group respectively, in each case in a manner which would bematerial in the context of the wider UTV Group taken as a whole or the widerWireless Group taken as a whole; or(vii) otherwise adversely affect any or all of the businesses, assets,prospects, profits or financial or trading position of any member of the widerWireless Group or any member of the wider UTV Group to an extent which ismaterial in the context of the Offer or any such group taken as a whole,and all applicable waiting and other time periods during which any Third Partycould institute, implement or threaten any such action, proceedings, suit,investigation, enquiry or reference under the laws of any relevantjurisdiction, having expired, lapsed or been terminated;(h) all necessary filings and applications having been made and all necessarywaiting and other time periods (including any extensions thereof) under anyapplicable legislation or regulations of any relevant jurisdiction havingexpired, lapsed or been terminated and all statutory or regulatory obligationsin any relevant jurisdiction having been complied with in each case as may benecessary in connection with the Offer and its implementation or theacquisition or proposed acquisition by UTV or any member of the wider UTV Groupof any shares or other securities in, or control of, Wireless or any member ofthe wider Wireless Group and all authorisations, orders, recognitions, grants,consents, clearances, confirmations, licences, certificates, permissions andapprovals ("Authorisations") which are material and necessary or appropriatefor or in respect of the Offer or the acquisition or proposed acquisition byUTV of any shares or other securities in, or control of, Wireless or thecarrying on by any member of the wider Wireless Group of its business or inrelation to the affairs of any member of the wider Wireless Group (where suchbusiness is material in the context of the wider Wireless Group taken as awhole) having been obtained in terms and in a form reasonably satisfactory toUTV from all appropriate Third Parties or persons with whom any member of thewider Wireless Group has entered into contractual arrangements and all suchAuthorisations remaining in full force and effect and there being no notice orintimation of any intention to revoke, suspend, restrict or amend or not renewthe same at the time at which the Offer becomes or is declared whollyunconditional in each case where the absence of such Authorisation would have amaterial adverse effect on the wider Wireless Group or on the wider UTV Grouptaken as a whole;(i) since 31 December 2004 and except as expressly disclosed in Wireless'sannual report and accounts for the year ended 31 December 2004 or as disclosedby or on behalf of Wireless to UTV or its advisers prior to the Disclosure Dateor as otherwise publicly announced by Wireless on or prior to the DisclosureDate through a RIS, there being no provision of any arrangement, agreement,licence or other instrument to which any member of the wider Wireless Group isa party or by or to which any such member or any of its assets is or are or maybe bound, entitled or subject which, in consequence of the making orimplementation of the Offer or the proposed acquisition of any shares or othersecurities in, or control of, Wireless by UTV or because of a change in thecontrol or management of Wireless or otherwise, could reasonably be expected toresult in (to an extent which is material in the context of the wider WirelessGroup taken as a whole):(i) any material indebtedness or liabilities actual or contingent of, or anygrant available to, any member of the wider Wireless Group being or becomingrepayable or capable of being declared repayable immediately or prior to itsstated maturity or the ability of any such member to borrow monies or incur anymaterial indebtedness being withdrawn or inhibited or becoming capable of beingwithdrawn or inhibited;(ii) the creation or enforcement of any mortgage, charge or other securityinterest over the whole or any material part of the business, property, assetsor interests of any member of the wider Wireless Group or any such security(whenever created, arising or having arisen) being enforced or becomingenforceable;(iii) any such arrangement, agreement, licence or instrument or the rights,liabilities, obligations, or interests of any member of the wider WirelessGroup under any such arrangement, agreement, licence or instrument (or anyarrangement, agreement, licence or instrument relating to any such right,liability, obligation, interest or business) or the interests or business ofany such member in or with any other person, firm, company or body being orbecoming capable of being terminated or materially and adversely modified ormaterially and adversely affected or any material and adverse action beingtaken or any onerous obligation or material liability arising thereunder;(iv) any material asset or interest of any member of the wider Wireless Groupbeing or falling to be disposed of or charged or ceasing to be available to anymember of the wider Wireless Group or any right arising under which any suchasset or interest could be required to be disposed of or charged or could ceaseto be available to any member of the wider Wireless Group, in each caseotherwise than in the ordinary course of business;(v) any member of the wider Wireless Group ceasing to be able to carry onbusiness under any name under which it presently does so, where such a resultwould be material and adverse in the context of the wider Wireless Group takenas a whole;(vi) any member of the wider UTV Group and/or of the wider Wireless Group beingrequired to acquire or repay any shares in and/or indebtedness of any member ofthe wider Wireless Group owned by any Third Party, where such a result would bematerial and adverse in the context of the wider Wireless Group taken as awhole or the wider UTV Group taken as a whole as the case may be;(vii) any material and adverse change in or effect on the ownership or use ofany intellectual property rights owned or used by any member of the widerWireless Group;(viii) the value or financial or trading position or prospects of any member ofthe wider Wireless Group being prejudiced or adversely affected in a mannerwhich would be material and adverse in the context of the wider Wireless Grouptaken as a whole; or(ix) the creation of any material liability, actual or contingent, by any suchmember (other than in the ordinary course of business),and no event having occurred which, under any provision of any sucharrangement, agreement, licence or other instrument to which any member of thewider Wireless Group is a party or by or to which any such member or any of itsassets may be bound or be subject, might reasonably be expected to result inany of the events referred to in this condition (i) to an extent which would bematerial in the context of the wider Wireless Group taken as a whole;(j) since 31 December 2004 and except as disclosed in Wireless's annual reportand accounts for the year ended 31 December 2004 or as disclosed by or onbehalf of Wireless to UTV or its advisers prior to the Disclosure Date or asotherwise publicly announced by Wireless on or prior to the Disclosure Datethrough a RIS, no member of the wider Wireless Group having:(i) issued or agreed to issue or authorised or proposed the issue of additionalshares or securities of any class, or securities convertible into orexchangeable for shares, or rights, warrants or options to subscribe for oracquire any such shares, securities or convertible securities (save for issuesbetween Wireless and any of its wholly-owned subsidiaries or between suchwholly-owned subsidiaries and save for options as disclosed to UTV grantedunder the Wireless Share Option Schemes before the Disclosure Date or the issueof any Wireless Shares allotted upon the exercise of options granted before theDisclosure Date under the Wireless Share Option Schemes) or redeemed,pRelated Shares:
WLG.L