11th Sep 2007 15:43
Cape PLC11 September 2007 11 September 2007 Cape PLC ("Cape" or the "Company") CAPE PLC SUBMITS A RECOMMENDED ALL-CASH OFFER FOR CONCEPT HIRE LIMITED Cape PLC (AIM:CIU), the international provider of essential support services tothe energy sector, is delighted to announce that it has agreed to make arecommended all cash offer to acquire 100% of the issued share capital ofConcept Hire Limited ("Concept Hire") through its wholly-owned Australiansubsidiary Cape Australia Investments Pty Limited ("Cape Australia") at a priceof A$2.78 per share ("the Offer"). The price may be reduced by the amount orvalue of any rights attaching to the shares on or after today not received byCape Australia (which will include the final dividend of 6.0 cents per sharepayable on 15 November 2007). The Offer values Concept Hire at approximatelyA$128.7 million (£52.4 million), including debt of A$24.8 million, and is beingfunded from Cape's banking facilities as described below. The Offer is subjectto the conditions set out below. Concept Hire, which is listed on the Australian Securities Exchange, commencedoperations in 1985 and is a leading supplier of scaffold equipment andassociated services to the residential and commercial construction, civilengineering, mining and petrochemical industries. It is headquartered inVictoria, and has state offices in Queensland and Western Australia. Concept Hire generated profit before income tax of approximately A$8.3 million(£3.4 million) in the financial year ended 30 June 2007 on revenues of A$76.9million (£31.2 million), and had gross assets of A$90.3 million (£36.6 million)as at 30 June 2007. The Offer price of A$2.78 per Concept Hire Share represents an EV/EBITDAmultiple of 10.1 times Concept Hire's EBITDA for the year ended 30 June 2007. As required in public company offers in Australia, a Bidder's Statement will belodged with the Australian Securities and Investments Commission ("ASIC") andsubsequently sent to Concept Hire shareholders. The Bidder's Statement isexpected to be lodged with ASIC on or around 17 September 2007, and the Offerperiod is expected to commence on 24 September 2007 or sooner and close, unlessextended, one month later. A copy of the Bidder's Statement will be madeavailable on the Company's website (www.capeplc.com). Earlier today, Cape, through Cape Australia, agreed to acquire 7,473,995 ConceptHire Shares (representing 19.99% of Concept Hire's issued share capital) fromthe Adshead families, including the founders of Concept Hire, at the Offerprice. The acquisition of 5,604,562 Concept Hire Shares (representing 14.99% ofConcept Hire's issued share capital) is due to complete on 12 September 2007.Subject to approval being granted under the Australian Foreign Acquisitions andTakeovers Act 1975, Cape Australia will acquire the additional 5.0% of thoseshareholders' interest in Concept Hire Shares. The directors of Concept Hire unanimously recommend that Concept Hireshareholders accept the Offer in the absence of a superior proposal, and willeach accept the Offer for their respective personal holdings of Concept HireShares and those of their associates in the absence of a superior proposal. Theshares held or controlled by the directors and their associates, after thecompletion of the Adshead families' share sales, represent in aggregate, 12.7%of Concept Hire's issued share capital. On 3 September 2007, Cape entered into a new £240 million five year committedbanking facility with Barclays Bank Plc. The facility comprises a number oftranches, one of which will be applied towards the consideration for theacquisition of Concept Hire. Mr Martin May, Chief Executive of Cape PLC, said: "We believe that this Offer maximises value for all Concept Hire shareholders,and are delighted that, in the absence of a superior proposal, Concept Hire'sdirectors will recommend that Concept Hire shareholders accept the Offer. "Concept Hire is an important part of Cape's international growth strategy andwe intend to use Concept Hire and its local management team to continue todevelop our existing Far East/ Pacific Rim businesses and extend our footprintin the region. The retention of the management expertise within Concept Hirewill be a priority for Cape and we believe the expertise within Concept Hire'slocal management team, combined with the capital and management support of Cape,will provide a strong, long-term platform for growth. "It has always been our intention to structure a transaction acceptable to thedirectors of Concept Hire and which provided a clear, certain and value-basedoutcome for all Concept Hire shareholders. I am very confident we have achievedthose objectives". PricewaterhouseCoopers Corporate Finance and DLA Phillips Fox are advising Capeon this transaction. An exchange rate of A$1:£0.405 has been used throughout this announcement. CONDITIONS; The Offer and any contract arising from the acceptance of the Offer is subjectto fulfilment of the following Conditions: (a)Minimum acceptance condition That by the end of the Offer Period, the Cape Group has a relevant interest (as defined in the Corporations Act) in at least 90% of the Concept Hire Shares. (b)FIRB approval That before the end of the Offer Period: (i) the Treasurer of the Commonwealth of Australia or a delegate of the Treasurer of the Commonwealth of Australia issues a notice stating that the Commonwealth Government does not object to the potential acquisition by Cape Australia of up to 100% of the Concept Hire Shares either unconditionally or on conditions which are acceptable to Cape Australia (acting reasonably); or (ii) the period provided under the Foreign Acquisitions and Takeovers Act ("FATA") during which the Treasurer of the Commonwealth of Australia may make an order under section 18(2) of the FATA or an interim order under section 22 of the FATA in relation to the acquisition by Cape Australia of the Concept Hire Shares expires without such an order being made; or (iii)if an interim order under section 22 of the FATA is made, the subsequent period for making a final order prohibiting the acquisition by Cape Australia of the Concept Hire Shares lapses without a final order being made. (c)ACCC approval That before the end of the Offer Period, Cape Australia: (i) receives unconditional notice in writing from the Australian Competition and Consumer Commission ("ACCC") to the effect that the ACCC does not propose to intervene or seek to prevent Cape Australia's acquisition of Concept Hire Shares pursuant to section 50 of the Trade Practices Act 1974 (Cth); or (ii) is granted clearance or authorisation to acquire Concept Hire Shares by the ACCC or the Australian Competition Tribunal under part VII of the Trade Practices Act 1974 (Cth) and no application for review of such clearance or authorisation is made within the period prescribed by the Trade Practices Act 1974 (Cth). (d)No threatened action That before the end of the Offer Period: (i) there is not in effect any preliminary or final decision, order or decree issued by a Government Authority; (ii) no action or investigation is announced, threatened or commenced by a Government Authority; and (iii)no application is made to any Government Authority (other than by Cape or any of its associates), in consequence of or in connection with the Offer (other than an application to or a determination by ASIC or the Takeovers Panel in the exercise of the powers and discretions conferred by the Corporations Act), which restrains, impedes, prohibits or delays (or if granted could restrain, impede, prohibit or delay) or otherwise materially adversely impacts upon the making of the Offer or any transaction contemplated by the Implementation Agreement, the Offer or the rights of Cape Australia in respect of Concept Hire, or requires the divestiture by Cape Australia or Cape Australia's shareholders of any Concept Hire Shares, or the divestiture of any assets of Concept Hire Group, Cape Australia, the Cape Group or otherwise. (e)Material Adverse Change That before the end of the Offer Period, no material adverse change occurs, is discovered, announced, disclosed or otherwise becomes known to Cape Australia or Cape (whether or not becoming public). (f)Prescribed Occurrences That before the end of the Offer Period, no Prescribed Occurrence, as set out in section 652C of the Corporations Act 2001 (Cth), occurs. (g)Change of control If any member of the Concept Hire Group is a party to, or is bound by, or is subject to, an agreement, arrangement or understanding which as a result of the acquisition of Concept Hire Shares by Cape Australia under the Offer or a change in control of Concept Hire as a result of the Offer entitles a Third Party to exercise any rights (including termination rights or pre-emptive rights), and the exercise of such rights would have a material adverse impact on the business, assets, liabilities, financial or trading position, profitability or prospects of the Concept Hire Group (taken as whole), then before the end of the Offer Period the Third Party: (i) does not exercise, or purport to exercise, or state an intention or claim a right to exercise, those rights; and (ii)gives its consent or waiver in a form reasonably acceptable to Cape Australia to the acquisition of Concept Hire Shares by Cape Australia. (h)Absence of new litigation That before the end of the Offer Period, no entity which is a member of the Concept Hire Group is or has become the subject of any litigation which is commenced, is threatened to be commenced, is announced, or is made known to Cape Australia or Cape (whether or not becoming public) or Concept Hire which may reasonably be expected to result in a judgment against a member of the Concept Hire Group of A$2 million or more (after taking into account any reduction of the judgment which may reasonably be expected by way of set-off or cross claim), other than that which has been announced to ASX prior to the date of the Implementation Agreement, or which was disclosed in writing by Concept Hire or its advisers to any member of the Cape Group or its advisers prior to the date of the Implementation Agreement. (i)No restricted transactions That before the End Date, no member of the Concept Hire Group does any of the following: (i) debt: enters into any new financing arrangements or agrees to extend, repay or materially amend any existing financing arrangements in excess of $1 million individually, or $5 million in aggregate; or (ii)material commitments: enters into, or materially amends, any material agreement, arrangement, commitment or understanding (including any agreement, arrangement, commitment or understanding with third parties) which increases by more than $5 million the aggregate level of capital commitments of the Concept Hire Group above those disclosed to Cape Australia in writing prior to the date of the Implementation Agreement; (iii)material disposals: disposes of, agrees to dispose of or offers, proposes or announces a tender process for the sale of any securities, businesses, assets, interests in joint ventures, entity or undertaking the consideration (including the value of assumed liabilities) for which exceeds $1 million individually, or $5 million in aggregate; (iv) constitutions: makes any material changes to the terms of the constitutions of any entity within the Concept Hire Group; (v) distributions: declares, pays or distributes any dividend (except the final dividend of 6 cents per share for the financial year ended 30 June 2007), distribution, bonus or other share of its profits or assets or agrees to return any capital to its members, other than to Concept Hire or a direct or indirect wholly owned subsidiary of Concept Hire; or (vi) remuneration: other than in the ordinary course of business: (A) materially increases the remuneration of, or pays any bonus or issues any securities to, or otherwise varies; (B) accelerates any rights to benefits of any kind in a material manner; (C) pays or agrees to pay a termination payment (including a 'golden parachute'); or (D) materially amends any employment, consulting, board appointment, severance or similar arrangement; with any of its directors, officers or employees, in each case, except in relation to action undertaken by a member of the ConceptHire Group which is: (A) required to be done or procured by Concept Hire pursuant to, or which is otherwise permitted by, the Implementation Agreement; (B) done in accordance with contractual obligations that exist at the date of the Implementation Agreement, or proposed actions, disclosed to any member of the Cape Group or its advisers in writing or Verbally Disclosed prior to the date of the Implementation Agreement; (C) announced to ASX by Concept Hire prior to the date of the Implementation Agreement; or (D) approved by Cape in writing. ENDS For further information, please contact: Cape PLCMartin May, Chief Executive +44 (0)1924 876 276 PricewaterhouseCoopers Corporate Finance +61 (3) 8603 4727 /Mark Thexton +61 (0) 407 627 500 Bell Pottinger Corporate & FinancialNick Lambert / Victoria Geoghegan +44 (0)20 7861 3232 / +44 (0)7811 358 764 Third Person +61 (0) 2 8298 6100Adrian Bradley +61 (0) 400 499 782 Collins Stewart Europe Limited +44 (0)20 7523 8350Chris Wells/ Mark Connelly Notes to editors Cape PLC is the parent company of a number of service providing organizationsoperating primarily in the oil and gas, petrochemical and power generationindustries. In the year to 31 December 2006, Cape reported turnover of £295.5 million. Cape currently employs c. 10,000 people in 23 countries worldwide. Cape specialises in the provision of scaffolding, insulation, fire protection,specialist cleaning and other essential services to major industrial clients inthe energy sector. Cape's ability to provide specialist cleaning services was enhanced by theacquisition of DBI Group Limited in October 2006. On 23 April 2007, Cape's shareholder's approved the placing of 26,923,077ordinary shares at £2.60 per share to raise £70 million (before expenses). On 6 June 2007, Cape acquired Total Rope Access International Limited. On 22 June 2007, Cape acquired Endecon Limited. On 31 August 2007, Cape acquired Total Corrosion Control Group Pty Limited. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
CIU.L