27th Apr 2005 07:01
Wolverhampton& Dudley Breweries PLC27 April 2005 OFFERS FOR JENNINGS BROTHERS PLC FOR IMMEDIATE RELEASE Not for release, publication or distribution in whole or in part in or into Canada, Australia or Japan 27 April 2005 The Wolverhampton & Dudley Breweries, PLC ("W&DB") Recommended cash offers for Jennings Brothers plc ("Jennings") Summary • The boards of directors of W&DB and Jennings are pleased toannounce that they have reached agreement on the terms of recommended cashoffers for Jennings, to be made by PricewaterhouseCoopers LLP on behalf of W&DB. • The Ordinary Offer will be 430 pence in cash for eachJennings Ordinary Share, valuing Jennings' existing issued ordinary sharecapital at approximately £45.8 million. The Ordinary Offer Price is inclusive ofany final dividend that Jennings would otherwise have paid, in the absence ofthe Offers. • The Ordinary Offer represents: • a premium of 32 per cent to the closing mid-market priceof 325 pence per Jennings Ordinary Share on 8 April 2005, the last business daybefore Jennings' and W&DB's joint announcement that they were in discussionsregarding a possible offer to be made by W&DB; • a premium of 6 per cent to the closing mid-market price of407.5 pence per Jennings Ordinary Share on 26 April 2005, the last business daybefore this announcement; • a premium of 57 per cent to the average closing mid-marketprice of 273.2 pence per Jennings Ordinary Share in the 12 months ended 8 April2005, the last business day before Jennings' and W&DB's joint announcement; and • a multiple of 20.7 times Jennings' normalised earnings pershare for the 52 weeks ended 26 February 2005. • W&DB has received irrevocable undertakings to accept (orprocure the acceptance of) the Ordinary Offer (including from the directors ofJennings) in respect of 2,860,499 Jennings Ordinary Shares, representingapproximately 26.85 per cent of the existing issued ordinary share capital ofJennings. • Jennings Ordinary Shareholders may elect to receive LoanNotes as an alternative to part or all of the cash consideration receivableunder the Ordinary Offer. • An offer of 120 pence in cash will be made for eachJennings Preference Share, representing a premium of 20 per cent to the parvalue of a Jennings Preference Share. • The acquisition is consistent with W&DB's strategy ofexpanding its estate where suitable opportunities occur that meet its returnscriteria. Jennings provides a strong geographic fit, operational benefitsthrough scale, opportunities for cost savings and is expected to deliver valueto W&DB shareholders. • W&DB recognises the strong and rich heritage of theJennings brewery operations, its excellent reputation and the local appeal ofthe beer brands and has stated its intention to continue to operate the Jenningsbrewery and develop the brewing business regionally. • Jennings will benefit from participation within a largergroup better able to meet the challenges presented by regulatory cost pressureand continuing industry consolidation. • Commenting on the Offers, Ralph Findlay, Chief Executive ofW&DB, said: "Jennings is an excellent regional business with a strong heritage. We believethat our proposals will assist in the further development of the business andprovide good opportunities for its lessees, beer brands and employees." • Commenting on the Offers, John Rudgard, Chairman ofJennings said: "We believe that W&DB will provide a good home for Jennings. Jennings' highquality pub business and strong brands represent an excellent geographic fitwith W&DB's existing operations. The deal will protect and develop Jennings'heritage within a far larger and stronger group." This summary should be read in conjunction with the full text of the attachedannouncement. Press Enquiries W&DB 01902 329 516Ralph Findlay, Chief ExecutivePaul Inglett, Finance Director PricewaterhouseCoopers Corporate Finance (Financial adviser to W&DB)Sean Williams 020 7583 5000Colin Gillespie 0161 245 2000 McQueen Limited 020 7667 6861(Debt adviser to W&DB)Jim Fallon Hoare Govett 020 7678 8000(Corporate broker to W&DB)Christopher ZealAlex Carter gcg hudson sandler 020 7796 4133(PR adviser to W&DB)Andrew HayesNick Lyon Jennings 0845 129 7185John Rudgard, ChairmanMike Clayton, Managing DirectorDavid Stevenson, Finance Director Arbuthnot 020 7012 2000(Financial adviser and corporate broker to Jennings)James SteelNick Marsh Bankside 020 7444 4140(PR adviser to Jennings)Charles PonsonbySimon Rothschild This announcement does not constitute an offer or invitation to purchase anysecurities. The Offers will be made solely by means of the Offer Document andthe acceptance forms accompanying the Offer Document, which will contain thefull terms and conditions of the Offers, including details of how the Offers maybe accepted. Jennings Shareholders are advised to read the Offer Document andaccompanying acceptance forms when they are sent to them because they willcontain important information. PricewaterhouseCoopers LLP is regulated by the Financial Services Authority tocarry out investment business. PricewaterhouseCoopers Corporate Finance, a partof PricewaterhouseCoopers LLP, is acting exclusively for W&DB and no-one else inconnection with the Offers and will not be responsible to anyone other than W&DBfor providing the protections afforded to clients of PricewaterhouseCoopers LLPnor for providing advice in relation to the Offers or in relation to the contentof this announcement. Arbuthnot Securities Limited ("Arbuthnot"), which is regulated by the FinancialServices Authority, is acting for Jennings and no-one else in relation to thematters described in this announcement and will not be responsible to anyoneother than Jennings for providing the protections afforded to clients ofArbuthnot nor for providing advice in relation to the matters described in thisannouncement. The Offers, including the Loan Note Alternative, will not be made, directly orindirectly, in or into, and will not be capable of acceptance in or from,Canada, Australia or Japan. Custodians, nominees and trustees should observethese restrictions and should not send or distribute documents in or intoCanada, Australia or Japan. The Loan Notes to be issued in connection with the Ordinary Offer have not been,and will not be, registered under or offered in compliance with applicablesecurities laws of any state, province, territory or jurisdiction of Canada,Australia or Japan and the relevant clearances have not been, and will not be,obtained from the securities commission of any province of Canada, and noprospectus has been lodged with, or registered by, the Australian Securities andInvestments Commission or the Japanese Ministry of Finance. Accordingly, theLoan Notes may not (unless an exemption under relevant securities laws isapplicable) be offered, sold, resold, delivered or transferred, directly orindirectly, in or into Canada, Australia or Japan or any other jurisdiction ifto do so would constitute a violation of the relevant laws of, or requireregistration thereof in, such jurisdiction or to, or for the account or benefitof, a person located or resident in Canada, Australia or Japan. The Loan Notes to be issued in connection with the Ordinary Offer have not been,and will not be, registered under the US Securities Act or under the securitieslaws of any jurisdiction of the United States. The Loan Notes to be issuedpursuant to the Ordinary Offer are to be issued solely to offer tax advantagesnot available in the United States. Accordingly, the Loan Notes may not beoffered, sold, resold, delivered or transferred, directly or indirectly, in,into or from the United States (or to persons resident in the United States).Neither the SEC nor any US state securities commission has approved ordisapproved of the Loan Notes, or will make any determination whether the OfferDocument is accurate or complete. Any representation to the contrary is acriminal offence. The Loan Notes will not be listed on any stock exchange. Notice to US holders of Jennings Shares The Offers will be made for the securities of a UK company and will be subjectto UK procedure and disclosure requirements, which are different from those ofthe United States. The financial information included in this announcement hasbeen prepared in accordance with generally accepted accounting principles of theUnited Kingdom and thus may not be comparable to financial information of UScompanies or companies whose financial statements are prepared in accordancewith generally accepted accounting principles in the United States. Also, thesettlement procedure with respect to the Offers will be consistent with UKpractice, which differs from the US domestic tender offer procedures in certainmaterial respects, particularly with regard to the date of payment. Whetherlocated in the US or elsewhere, Jennings Shareholders will receive their cashconsideration in pounds sterling. It may be difficult for US holders of Jennings Shares to enforce their rightsand any claim arising out of the US federal securities laws, since W&DB andJennings are located in a foreign country, and some or all of their officers anddirectors may be residents of a foreign country. US holders of Jennings Sharesmay not be able to sue a foreign company or its officers or directors in aforeign court for violations of the US securities laws. Further, it may bedifficult to compel a foreign company and its affiliates to subject themselvesto a US court's judgement. In accordance with normal UK practice, W&DB or its nominees, or its brokers(acting as agents), may from time to time make certain purchases of, orarrangements to purchase, Jennings Shares outside the United States, other thanpursuant to the Offers, before or during the period in which the Offers remainopen for acceptance. These purchases may occur either in the open market atprevailing prices or in private transactions at negotiated prices. Anyinformation about such purchases will be disclosed as required in the UK andwill be available from the Regulatory News Service on the London Stock Exchangewebsite, www.londonstockexchange.com. The Offers in the United States will be made solely by W&DB and neitherPricewaterhouseCoopers LLP nor any of its affiliates will be making the Offersin the United States. References in this announcement and any related documentsto the Offers being made by PricewaterhouseCoopers LLP on behalf of W&DB shouldbe read and construed accordingly by US holders of Jennings Shares. While theOffers will be made available to holders of Jennings Shares in the UnitedStates, the right to tender Jennings Shares will not be made available in anyjurisdiction in the United States in which the making of the Offers or the rightto tender Jennings Shares would not be in compliance with the laws of suchjurisdiction. Forward Looking Statements This document contains forward-looking statements, which may be identified bywords such as "believe", "expect", "anticipate", "intend", "plan", "seek","estimate", "will", "would" or words of similar meaning, that involve risks anduncertainties, as well as assumptions, that, if they were to materialise orprove incorrect, could cause the results of W&DB and its consolidatedsubsidiaries to differ materially from those expressed or implied by suchforward-looking statements. All statements other than statements of historicalfact are statements that could be deemed forward-looking statements. W&DBassumes no obligation and does not intend to update these forward-lookingstatements, except as required pursuant to applicable law. Nothing in thisdocument is intended to be a profit forecast or be interpreted to mean thatearnings per share of W&DB for the current or future financial years wouldnecessarily match or exceed the historical published earnings per share of W&DBor Jennings. Dealing Disclosure Requirements Under the provisions of Rule 8.3 of the City Code, any person who, alone oracting together with any other person(s) pursuant to an agreement orunderstanding (whether informal or formal) to acquire or control relevantsecurities of Jennings, owns or controls, or becomes the owner or controller of,directly or indirectly, one per cent or more of any class of securities ofJennings is required to disclose, by not later than 12.00 noon (London time) onthe London business day following the date of the relevant transaction, dealingsin such securities of that company (or in any option in respect of, orderivative referenced to, such securities) during the period to the date onwhich the Offers become or are declared unconditional as to acceptances or lapseor are otherwise withdrawn. Under the provisions of Rule 8.1 of the City Code, all dealings in relevantsecurities of Jennings by W&DB or Jennings, or by any of their respectiveassociates (within the meaning of the City Code), must also be disclosed. If you are in any doubt as to the application of Rule 8 to you, please contactan independent financial adviser authorised under the Financial Services andMarkets Act 2000, consult the Panel's website at www.thetakeoverpanel.org.uk orcontact the Panel on telephone number +44 20 7638 0129; fax +44 20 7236 7013. FOR IMMEDIATE RELEASE Not for release, publication or distribution in whole or in part in or into Canada, Australia or Japan 27 April 2005 The Wolverhampton & Dudley Breweries, PLC ("W&DB") Recommended cash offers for Jennings Brothers plc ("Jennings") 1. Introduction The boards of directors of W&DB and Jennings are pleased to announce that theyhave reached agreement on the terms of recommended cash offers, to be made(outside the United States) by PricewaterhouseCoopers LLP on behalf of W&DB (andin the United States by W&DB), to acquire the whole of the issued and to beissued share capital of Jennings. 2. The Offers The Ordinary Offer, which will be subject to the conditions and further termsset out in Appendix 1 and to be set out in the Offer Document, will be made onthe following basis: for each Jennings Ordinary Share 430 pence in cash. The Ordinary Offer values Jennings' existing issued ordinary share capital atapproximately £45.8 million. The Ordinary Offer represents: • a premium of 32 per cent to the closing mid-market price of325 pence per Jennings Ordinary Share on 8 April 2005, the last business daybefore Jennings' and W&DB's joint announcement that they were in discussionsregarding a possible offer to be made by W&DB; • a premium of 6 per cent to the closing mid-market price of407.5 pence per Jennings Ordinary Share on 26 April 2005, the last business daybefore this announcement; • a premium of 57 per cent to the average closing mid-marketprice of 273.2 pence per Jennings Ordinary Share in the 12 months ended 8 April2005, the last business day before Jennings' and W&DB's joint announcement; and • a multiple of 20.7 times Jennings' normalised earnings pershare for the 52 weeks ended 26 February 2005. The Preference Offer, which will be subject to the conditions and further termsset out in Appendix 1 and to be set out in the Offer Document, will be made onthe following basis: for each Jennings Preference Share 120 pence in cash. The Preference Offer represents a premium of 20 per cent to the par value of aJennings Preference Share. 3. Conclusion and recommendation The directors of Jennings, who have been so advised by Arbuthnot, consider theterms of the Offers to be fair and reasonable so far as Jennings Shareholdersare concerned. In providing advice to the directors of Jennings, Arbuthnot hastaken into account the commercial assessments of the directors of Jennings. Accordingly, the directors of Jennings unanimously recommend JenningsShareholders to accept the Offers, as the directors of Jennings have irrevocablyundertaken to do in respect of their own beneficial holdings amounting to, inaggregate, 59,459 Jennings Ordinary Shares (representing approximately 0.56 percent of the existing issued ordinary share capital of Jennings) and 3,014Jennings Preference Shares (representing approximately 6.03 per cent of theexisting issued preference share capital of Jennings). 4. Irrevocable undertakings W&DB has received irrevocable undertakings to accept (or procure the acceptanceof) the Ordinary Offer (including from the directors of Jennings) in respect of2,860,499 Jennings Ordinary Shares, representing approximately 26.85 per cent ofthe existing issued ordinary share capital of Jennings. These undertakings include undertakings from Frederic Robinson Limited inrespect of 2,555,059 Jennings Ordinary Shares and Scottish & Newcastle plc inrespect of 245,981 Jennings Ordinary Shares, representing in aggregateapproximately 26.29 per cent of Jennings' existing issued ordinary sharecapital. These undertakings will cease to be binding only if the Ordinary Offerlapses, is withdrawn or is not made and remain binding in the event that ahigher competing offer for Jennings is made. The undertakings from the directors of Jennings are in respect of their entirebeneficial holdings of Jennings Ordinary Shares and Jennings Preference Shares,amounting to, in aggregate, 59,459 Jennings Ordinary Shares, representingapproximately 0.56 per cent of Jennings' existing issued ordinary share capitaland 3,014 Jennings Preference Shares, representing approximately 6.03 per centof Jennings' existing issued preference share capital. The undertakings fromthe directors of Jennings will cease to be binding only if the Ordinary Offerlapses, is withdrawn or is not made and remain binding in the event that ahigher competing offer for Jennings is made. Further details of the irrevocable undertakings are set out in Appendix 2. 5. The Loan Note Alternative As an alternative to some or all of the cash consideration of 430 pence perJennings Ordinary Share which would otherwise be receivable under the OrdinaryOffer, Jennings Ordinary Shareholders who validly accept the Ordinary Offer(other than certain overseas shareholders) will be able to elect to receive LoanNotes to be issued by W&DB on the following basis: For every £1 of cash consideration under the Ordinary Offer £1 nominal value of Loan Notes The Loan Notes, which will be governed by English law, will be unsecuredobligations of W&DB, guaranteed as to payment of principal by Barclays Bank PLC,on terms agreed with Barclays Bank PLC. The Loan Notes will bear interest fromthe date of issue to the relevant holder of Loan Notes payable every six monthsin arrears (less any tax required by law to be deducted or withheld therefrom)on 30 April and 31 October each year, with the first interest payment to be madeon 31 October 2005, at a rate per annum calculated to be 0.75 per cent below sixmonth LIBOR as determined on the first business day of each such interestperiod. The Loan Notes will be redeemable at par (together with accrued interest) at theoption of the holders, in whole or in part, on interest payment dates commencingon 31 October 2006. Any Loan Notes outstanding on 31 October 2010 will beredeemed at par (together with any accrued interest) on that date. W&DB mayelect to redeem any Loan Notes on 31 October 2006 or on any subsequent interestpayment date if the aggregate nominal value of the Loan Notes then outstandingis less than £2 million. The Loan Notes will be transferable, but noapplication will be made for them to be listed or dealt in on any stockexchange. The Loan Notes will be issued in integral multiples of £1 nominal value.Fractional entitlements to Loan Notes will be disregarded and will not be issuedto persons accepting the Ordinary Offer. W&DB reserves the right not to issuethe Loan Notes where valid elections are received for an aggregate of less than£2 million in nominal value of Loan Notes by the date the Ordinary Offer becomesunconditional in all respects. If insufficient elections are received, JenningsOrdinary Shareholders who elected to receive Loan Notes will instead receivecash consideration in accordance with the terms of the Ordinary Offer. The Loan Notes have not been, and will not be, registered under the USSecurities Act, or under the securities laws of any state or other jurisdictionof the United States, Canada, Australia or Japan. Accordingly, the Loan Notesmay not (unless an exemption under the relevant securities laws is applicable)be offered, sold, resold, delivered or transferred, directly or indirectly, in,into or from the United States, Canada, Australia or Japan or to, or for theaccount or benefit of, a person located or resident in the United States,Canada, Australia or Japan. The Loan Note Alternative will be conditional on the Ordinary Offer becoming orbeing declared unconditional in all respects. Full details of the Loan NoteAlternative will be contained in the Offer Document. 6. Information relating to W&DB W&DB is a leading brewer and pub retailing business. W&DB's pub estatecomprises 537 managed pubs and 1,610 pubs let to tenants or lessees. W&DB'smanaged pub estate trades as 'Pathfinder Pubs', and its tenanted and leased pubsform 'The Union Pub Company.' W&DB's brewing division, WDB Brands, brews some of the leading ales in thecountry, including Marston's Pedigree, a premium ale, and the Banks's andMansfield brands, which are standard ales. W&DB's results for the 53 weeks ended 2 October 2004 showed turnover of £513.7million (2003: £490.5 million), profit before taxation of £70.2 million (2003:£59.6 million) and net assets of £648.3 million (2003 restated: £457.7 million). Basic earnings per ordinary share on the same basis were 65.9 pence (2003:52.5 pence). 7. Information relating to Jennings Jennings currently operates 128 predominantly freehold, leased and tenanted pubsin the North of England, with 55 (43%) located in Cumbria, 31 (24%) located inother parts of the North West and 42 (33%) in the North East and Yorkshire.Jennings also produces a portfolio of quality ale brands at its brewery locatedin Cockermouth, Cumbria, including its lead brand "Cumberland Ale", which aredistributed both locally and nationally to the on and off trade. Jennings announced earlier today its preliminary statement of results for the 52weeks ended 26 February 2005. This reported group turnover of £18.2m (2004:£17.2m), earnings before interest, tax, profit/(loss) on disposal of properties,depreciation and amortisation of £5.3m (2004: £4.6m), earnings before interestand tax of £4.7m (2004: £3.8m), profit before tax of £3.4m (2004: £2.8m) andbasic earnings per ordinary share of 22.9 pence (2004: 19.1 pence). As at 26February 2005, net assets were £29.4m (2004 restated: £27.2m) and net debtamounted to £21.2m (2004: £19.8m). 8. Background to and reasons for the Offers Background The UK pub market is increasingly competitive with continuing cost pressures. W&DB seeks to deliver shareholder value through both organic growth and takingadvantage of attractive acquisition opportunities. Key to its success has been the approach management have taken in developing thebusiness to build a competitive edge: • focus on high quality community pubs - approximately 90 per cent ofthe W&DB estate is defined as being community or neighbourhood pubs with anestate that is recognised as one of the highest quality in the industry; • preference for freehold not leasehold ownership - around 96 percent of the W&DB estate (by value) are freehold pubs allowing W&DB shareholdersto benefit from capital appreciation and enabling the management of propertycosts; • strong management and controls across the business - W&DB aims toensure that its retail disciplines are to the highest standards, costs arevigorously controlled and operating efficiency maximised; and • mainstream market position - W&DB operates contemporary managedpubs, a high quality tenanted/leased estate and brews high quality ale brandswith attractive value orientated offers. W&DB believes that its strategy and business positioning delivers value forshareholders. It is proud of its track record of working with its existingtenants to meet successfully these challenges and in developing their customeroffers. As a result the Union Pub Company has been successful in deliveringlike-for-like sales performance amongst the best in the industry. Further, theacquisitions of Wizard Inns last year and Burtonwood PLC this year demonstratedthe management team's ability to integrate an acquisition and deliver improvedbusiness performance and synergies as planned. Reasons for the Offers The acquisition of Jennings is consistent with W&DB's strategy of expanding itsestate where suitable opportunities occur that meet its returns criteria. Theseinclude a strong geographic fit, operational benefits through scale,opportunities for cost savings and the delivery of value for W&DB shareholders.W&DB recognises the strong and rich heritage of the Jennings brewery operations,its excellent reputation and the local appeal of the beer brands and has statedits intention to continue to operate the Jennings brewery and develop thebrewing business regionally. The acquisition will: • provide W&DB with a strong, predominantly freehold, high qualityestate in the North of England with average pub earnings before interest, tax,depreciation and amortisation of approximately £54,100 and average rent per pubof approximately £27,500 (for the 52 weeks to 26 February 2005); • extend W&DB's portfolio in the Union Pub Company; and • expand W&DB's distribution of high quality ale brands. In addition, the acquisition is expected to: • generate annualised cost savings of around £2 million per annumthrough the elimination of duplicated functions and the benefits of scale*; • be earnings enhancing before goodwill amortisation in the firstfull financial year following acquisition**; and • generate a return in excess of W&DB's weighted average cost ofcapital in the first full financial year of ownership. 9. Background to and reasons for the recommendation of the Offers Over the last three years Jennings has successfully implemented its strategy toconcentrate on leased pubs and the Free Trade. Its success is demonstrated bythe preliminary results released today and the creation of significant value forits shareholders. The directors of Jennings remain confident that the strategy is working well andwill continue to deliver steady and sustainable growth for its shareholders.However, the current market dynamics are such that for smaller companies such asJennings the pace of that growth will inevitably be constrained by increasingcost and legislative pressures. Against this background the directors ofJennings have considered a number of alternatives to deliver enhanced value forshareholders including options which would maintain Jennings' independence.However, the directors of Jennings have concluded that the Offers from W&DBrepresent best value. The Ordinary Offer represents a substantial premium both to the JenningsOrdinary Share price immediately prior to the announcement of discussionsbetween Jennings and W&DB and to the average Jennings Ordinary Share price inthe preceding 12 months. It also provides certainty of value and represents a19.4 per cent premium to the price at which Frederic Robinson Limited (by farJennings' largest shareholder) committed to accept an offer from W&DB. ThePreference Offer represents a premium of 20 per cent to the par value of aJennings Preference Share. W&DB has said that it perceives the continued operation of the Jennings breweryand the ongoing development of the business as key. It has an excellent trackrecord of working with tenants within its existing estate. The directors believethat W&DB should provide a good home for Jennings and that it will help toprotect and develop Jennings' heritage. As a result the directors of Jennings believe that the Offers are attractive andshould be recommended to shareholders. 10. Management and employees W&DB confirms that the existing employment rights, including pension rights, ofthe employees of Jennings will be fully safeguarded. 11. Jennings Share Schemes and Jennings LTIP The Ordinary Offer will extend to any Jennings Ordinary Shares which areunconditionally allotted or issued before the date on which the Ordinary Offercloses as a result of the exercise of options granted under the Jennings ShareSchemes, or as a result of a release of an award of Jennings Ordinary Sharesmade under the Jennings LTIP in accordance with and pursuant to the rules of theJennings LTIP. If the Ordinary Offer becomes or is declared unconditional in all respects,appropriate proposals will be made to holders of options under the JenningsShare Schemes. 12. Compulsory acquisition and de-listing If W&DB receives acceptances under either of the Offers in respect of, and/orotherwise acquires, 90 per cent or more of the Jennings Shares to which thatOffer relates and that Offer becomes or is declared unconditional in allrespects, W&DB intends to exercise its rights pursuant to the provisions ofsections 428 to 430F (inclusive) of the Companies Act 1985 to acquirecompulsorily the remaining Jennings Shares to which that Offer relates. After the Ordinary Offer becomes or is declared unconditional in all respectsand subject to any applicable requirements of the AIM Rules, W&DB intends toprocure the making of an application by Jennings to the London Stock Exchangefor admission of the Jennings Ordinary Shares to AIM to be cancelled. Suchcancellation will take effect no earlier than 20 business days after theOrdinary Offer becomes or is declared unconditional in all respects. Suchcancellation would significantly reduce the liquidity and marketability of anyJennings Ordinary Shares not tendered into the Ordinary Offer. 13. Disclosure of interests in Jennings Save for the 2,860,499 Jennings Ordinary Shares and 3,014 Jennings PreferenceShares in respect of which W&DB has received irrevocable undertakings to accept(or procure the acceptance of) the Offers and the 10,000 Jennings OrdinaryShares already held by a subsidiary of W&DB, neither W&DB nor any of thedirectors of W&DB nor, so far as W&DB is aware, any person acting in concertwith W&DB, owns or controls any Jennings Shares or holds any option to acquireor right to subscribe for any Jennings Shares or has entered into any derivativereferenced to Jennings Shares which remains outstanding. 14. General The Offer Document will be posted to Jennings Shareholders as soon aspracticable. The Offers will be subject to the conditions set out in Appendix 1. The bases and sources of certain financial information contained in thisannouncement are set out in Appendix 2. Certain terms used in this announcementare defined in Appendix 3. \* This statement of estimated cost savings relates to future actions andcircumstances which, by their nature, involve risks, uncertainties and otherfactors. Because of this, the cost savings referred to may not be achieved, orthose achieved could be materially different from those estimated. ** This statement regarding earnings enhancement is not a profit forecast andshould not be interpreted to mean that W&DB's future earnings per share willnecessarily match or exceed the historical published earnings per share of W&DBor Jennings. Press EnquiriesW&DB 01902 329 516Ralph Findlay, Chief ExecutivePaul Inglett, Finance Director PricewaterhouseCoopers Corporate Finance(Financial adviser to W&DB)Sean Williams 020 7583 5000Colin Gillespie 0161 245 2000 McQueen Limited 020 7667 6861(Debt adviser to W&DB)Jim Fallon Hoare Govett 020 7678 8000(Corporate broker to W&DB)Christopher ZealAlex Carter gcg hudson sandler 020 7796 4133(PR adviser to W&DB)Andrew HayesNick Lyon Jennings 0845 129 7185John Rudgard, ChairmanMike Clayton, Managing DirectorDavid Stevenson, Finance Director Arbuthnot 020 7012 2000(Financial adviser and corporate broker to Jennings)James SteelNick Marsh Bankside 020 7444 4140(PR adviser to Jennings)Charles PonsonbySimon Rothschild This announcement does not constitute an offer or invitation to purchase anysecurities. The Offers will be made solely by means of the Offer Document andthe acceptance forms accompanying the Offer Document, which will contain thefull terms and conditions of the Offers, including details of how the Offers maybe accepted. Jennings Shareholders are advised to read the Offer Document andaccompanying acceptance forms when they are sent to them because they willcontain important information. PricewaterhouseCoopers LLP is regulated by the Financial Services Authority tocarry out investment business. PricewaterhouseCoopers Corporate Finance, a partof PricewaterhouseCoopers LLP, is acting exclusively for W&DB and no-one else inconnection with the Offers and will not be responsible to anyone other than W&DBfor providing the protections afforded to clients of PricewaterhouseCoopers LLPnor for providing advice in relation to the Offers or in relation to the contentof this announcement. Arbuthnot Securities Limited ("Arbuthnot"), which is regulated by the FinancialServices Authority, is acting for Jennings and no-one else in relation to thematters described in this announcement and will not be responsible to anyoneother than Jennings for providing the protections afforded to clients ofArbuthnot nor for providing advice in relation to the matters described in thisannouncement. The Offers, including the Loan Note Alternative, will not be made, directly orindirectly, in or into, and will not be capable of acceptance in or from,Canada, Australia or Japan. Custodians, nominees and trustees should observethese restrictions and should not send or distribute documents in or intoCanada, Australia or Japan. The Loan Notes to be issued in connection with the Ordinary Offer have not been,and will not be, registered under or offered in compliance with applicablesecurities laws of any state, province, territory or jurisdiction of Canada,Australia or Japan and the relevant clearances have not been, and will not be,obtained from the securities commission of any province of Canada, and noprospectus has been lodged with, or registered by, the Australian Securities andInvestments Commission or the Japanese Ministry of Finance. Accordingly, theLoan Notes may not (unless an exemption under relevant securities laws isapplicable) be offered, sold, resold, delivered or transferred, directly orindirectly, in or into Canada, Australia or Japan or any other jurisdiction ifto do so would constitute a violation of the relevant laws of, or requireregistration thereof in, such jurisdiction or to, or for the account or benefitof, a person located or resident in Canada, Australia or Japan. The Loan Notes to be issued in connection with the Ordinary Offer have not been,and will not be, registered under the US Securities Act or under the securitieslaws of any jurisdiction of the United States. The Loan Notes to be issuedpursuant to the Ordinary Offer are to be issued solely to offer tax advantagesnot available in the United States. Accordingly, the Loan Notes may not beoffered, sold, resold, delivered or transferred, directly or indirectly, in,into or from the United States (or to persons resident in the United States).Neither the SEC nor any US state securities commission has approved ordisapproved of the Loan Notes, or will make any determination whether the OfferDocument is accurate or complete. Any representation to the contrary is acriminal offence. The Loan Notes will not be listed on any stock exchange. Notice to US holders of Jennings Shares The Offers will be made for the securities of a UK company and will be subjectto UK procedure and disclosure requirements, which are different from those ofthe United States. The financial information included in this announcement hasbeen prepared in accordance with generally accepted accounting principles of theUnited Kingdom and thus may not be comparable to financial information of UScompanies or companies whose financial statements are prepared in accordancewith generally accepted accounting principles in the United States. Also, thesettlement procedure with respect to the Offers will be consistent with UKpractice, which differs from the US domestic tender offer procedures in certainmaterial respects, particularly with regard to the date of payment. Whetherlocated in the US or elsewhere, Jennings Shareholders will receive their cashconsideration in pounds sterling. It may be difficult for US holders of Jennings Shares to enforce their rightsand any claim arising out of the US federal securities laws, since W&DB andJennings are located in a foreign country, and some or all of their officers anddirectors may be residents of a foreign country. US holders of Jennings Sharesmay not be able to sue a foreign company or its officers or directors in aforeign court for violations of the US securities laws. Further, it may bedifficult to compel a foreign company and its affiliates to subject themselvesto a US court's judgement. In accordance with normal UK practice, W&DB or its nominees, or its brokers(acting as agents), may from time to time make certain purchases of, orarrangements to purchase, Jennings Shares outside the United States, other thanpursuant to the Offers, before or during the period in which the Offers remainopen for acceptance. These purchases may occur either in the open market atprevailing prices or in private transactions at negotiated prices. Anyinformation about such purchases will be disclosed as required in the UK andwill be available from the Regulatory News Service on the London Stock Exchangewebsite, www.londonstockexchange.com. The Offers in the United States will be made solely by W&DB and neitherPricewaterhouseCoopers LLP nor any of its affiliates will be making the Offersin the United States. References in this announcement and any related documentsto the Offers being made by PricewaterhouseCoopers LLP on behalf of W&DB shouldbe read and construed accordingly by US holders of Jennings Shares. While theOffers will be made available to holders of Jennings Shares in the UnitedStates, the right to tender Jennings Shares will not be made available in anyjurisdiction in the United States in which the making of the Offers or the rightto tender Jennings Shares would not be in compliance with the laws of suchjurisdiction. Forward Looking Statements This document contains forward-looking statements, which may be identified bywords such as "believe", "expect", "anticipate", "intend", "plan", "seek","estimate", "will", "would" or words of similar meaning, that involve risks anduncertainties, as well as assumptions, that, if they were to materialise orprove incorrect, could cause the results of W&DB and its consolidatedsubsidiaries to differ materially from those expressed or implied by suchforward-looking statements. All statements other than statements of historicalfact are statements that could be deemed forward-looking statements. W&DBassumes no obligation and does not intend to update these forward-lookingstatements, except as required pursuant to applicable law. Nothing in thisdocument is intended to be a profit forecast or be interpreted to mean thatearnings per share of W&DB for the current or future financial years wouldnecessarily match or exceed the historical published earnings per share of W&DBor Jennings. Dealing Disclosure Requirements Under the provisions of Rule 8.3 of the City Code, any person who, alone oracting together with any other person(s) pursuant to an agreement orunderstanding (whether informal or formal) to acquire or control relevantsecurities of Jennings, owns or controls, or becomes the owner or controller of,directly or indirectly, one per cent or more of any class of securities ofJennings is required to disclose, by not later than 12.00 noon (London time) onthe London business day following the date of the relevant transaction, dealingsin such securities of that company (or in any option in respect of, orderivative referenced to, such securities) during the period to the date onwhich the Offers become or are declared unconditional as to acceptances or lapseor are otherwise withdrawn. Under the provisions of Rule 8.1 of the City Code, all dealings in relevantsecurities of Jennings by W&DB or Jennings, or by any of their respectiveassociates (within the meaning of the City Code), must also be disclosed. If you are in any doubt as to the application of Rule 8 to you, please contactan independent financial adviser authorised under the Financial Services andMarkets Act 2000, consult the Panel's website at www.thetakeoverpanel.org.uk orcontact the Panel on telephone number +44 20 7638 0129; fax +44 20 7236 7013. Appendix 1CONDITIONS AND CERTAIN FURTHER TERMSOF THE OFFERs 1. Conditions of the Ordinary Offer The Ordinary Offer will be subject to the following conditions: (a) valid acceptances being received (and not, where permitted,withdrawn) by not later than 3.00 p.m. (London time) on the first closing dateof the Ordinary Offer (or such later time(s) and/or date(s) as W&DB may, subjectto the rules of the City Code, decide) in respect of not less than 90 per cent(or such lower percentage as W&DB may decide) in nominal value of the JenningsOrdinary Shares to which the Ordinary Offer relates, provided that thiscondition will not be satisfied unless W&DB and/or any Associate shall haveacquired or agreed to acquire (whether pursuant to the Ordinary Offer orotherwise) 50 per cent of the voting rights attributable to Jennings OrdinaryShares and Jennings Shares carrying in aggregate more than 50 per cent of thevoting rights then normally exercisable at a general meeting of Jennings,including for this purpose (except to the extent otherwise agreed by the Panel)any such voting rights attaching to any Jennings Ordinary Shares that areunconditionally allotted or issued before the Ordinary Offer becomes or isdeclared unconditional as to acceptances, whether pursuant to the exercise ofany outstanding subscription or conversion rights or otherwise; and for thispurpose: (i) any reference to shares to whichthe Ordinary Offer relates shall be construed in accordance with sections 428-430F of the Companies Act 1985; (ii) Jennings Ordinary Shares which havebeen unconditionally allotted but not issued shall be deemed to carry the votingrights which they will carry upon issue; and (iii) valid acceptances shall be deemed tohave been received in respect of Jennings Ordinary Shares which are treated forthe purposes of section 429(8) of the Companies Act 1985 as having been acquiredor contracted to be acquired by W&DB by virtue of acceptances of the OrdinaryOffer; (b) no Third Party having intervened and there not continuing tobe outstanding any statute, regulation or order of any Third Party in each casewhich would or might reasonably be expected to: (i) make the Ordinary Offer, itsimplementation or the acquisition or proposed acquisition by W&DB of any sharesor other securities in, or control or management of, Jennings or any member ofthe Jennings Group void, illegal or unenforceable in any jurisdiction, orotherwise directly or indirectly restrain, prevent, prohibit, restrict or delaythe same or impose additional adverse conditions or obligations with respect tothe Ordinary Offer or such acquisition, or otherwise materially impede,challenge or interfere with the Ordinary Offer or such acquisition, or requireany material amendment to the terms of the Ordinary Offer or the acquisition orproposed acquisition of any Jennings Ordinary Shares or the acquisition ofcontrol or management of Jennings or the Jennings Group by W&DB; (ii) materially limit or delay, or imposeany material limitations on, the ability of W&DB or any member of the JenningsGroup to acquire or to hold or to exercise effectively, directly or indirectly,all or any rights of ownership in respect of shares or other securities in, orto exercise voting or management control over, any member of the Jennings Group; (iii) require or prevent the divestitureby W&DB of any shares or other securities in Jennings; (iv) require or prevent the divestiture byW&DB or by any member of the Jennings Group of all or any portion of thebusinesses, assets or properties of any member of the Jennings Group or limitthe ability of any member of the Jennings Group to conduct any of theirrespective businesses or to own or control any of their respective assets orproperties or any material part thereof; (v) except pursuant to Part XIIIA of theCompanies Act 1985, require any member of the W&DB Group or of the JenningsGroup to acquire, or to offer to acquire, any shares or other securities (or theequivalent) in any member of the Jennings Group owned by any third party; (vi) impose any material limitation on theability of any member of the W&DB Group or of the Jennings Group to conduct orintegrate or co-ordinate its business, or any part of it, with all or anymaterial part of the businesses of any other member of the W&DB Group or of theJennings Group; (vii) result in any member of the JenningsGroup ceasing to be able to carry on business under any name under which itpresently does so; or (viii) otherwise materially and adverselyaffect any or all of the business, assets, profits, financial or tradingposition of any member of the Jennings Group, and all applicable waiting and other time periods during which any Third Partycould intervene under the laws of any relevant jurisdiction having expired,lapsed or been terminated; (c) all notifications and filings which are necessary, or arereasonably considered appropriate by W&DB, in any case to an extent which ismaterial in the context of the Jennings Group as a whole, having been made, allappropriate waiting and other time periods (including any extensions of suchwaiting and other time periods) under any applicable legislation or regulationof any relevant jurisdiction having expired, lapsed or been terminated (asappropriate) and all statutory or regulatory obligations in any relevantjurisdiction having been complied with in each case in connection with theOrdinary Offer or the acquisition or proposed acquisition of any shares or othersecurities in, or control or management of, Jennings or any other member of theJennings Group by W&DB or the carrying on by any member of the Jennings Group ofits business; (d) all Authorisations which are necessary or are reasonablyconsidered necessary or appropriate by W&DB in any relevant jurisdiction for orin respect of the Ordinary Offer or the acquisition or proposed acquisition ofany shares or other securities in, or control or management of, Jennings or anyother member of the Jennings Group by W&DB or the carrying on by any member ofthe Jennings Group of its business having been obtained, in terms and in a formreasonably satisfactory to W&DB, from all appropriate Third Parties or from anypersons or bodies with whom any member of the Jennings Group has entered intocontractual arrangements in each case where the absence of such Authorisationwould have a material adverse effect on the Jennings Group taken as a whole andall such Authorisations remaining in full force and effect and there being nonotice or intimation of any intention to revoke, suspend, restrict, modify ornot to renew any of the same; (e) since 28 February 2004 and save as Disclosed, there being noprovision of any arrangement, agreement, licence, permit, franchise or otherinstrument to which any member of the Jennings Group is a party, or by or towhich any such member or any of its assets is or are or may be bound, entitledor subject or any circumstance, which, in each case as a consequence of theOrdinary Offer or the acquisition or proposed acquisition of any shares or othersecurities in, or control of, Jennings or any other member of the Jennings Groupby W&DB or otherwise, could or might reasonably be expected to result in: (i) any monies borrowed by or any otherindebtedness or liabilities (actual or contingent) of, or any grant availableto, any member of the Jennings Group being or becoming repayable or capable ofbeing declared repayable immediately or prior to its stated repayment date orthe ability of any member of the Jennings Group to borrow monies or incur anyindebtedness being withdrawn or inhibited or becoming capable of beingwithdrawn; (ii) the creation or enforcement of anymortgage, charge or other security interest over the whole or any part of thebusiness, property, assets or interests of any member of the Jennings Group orany such mortgage, charge or other security interest (wherever created, arisingor having arisen) becoming enforceable; (iii) any such arrangement, agreement,licence, permit, franchise or other instrument, or the rights, liabilities,obligations or interests of any member of the Jennings Group thereunder, being,or becoming capable of being, terminated or materially and adversely modified oraffected or any adverse action being taken or any onerous obligation orliability arising thereunder; (iv) any asset or interest of any member ofthe Jennings Group being or falling to be disposed of or ceasing to be availableto any member of the Jennings Group or any right arising under which any suchasset or interest could be required to be disposed of or could cease to beavailable to any member of the Jennings Group otherwise than in the ordinarycourse of business; (v) any member of the Jennings Groupceasing to be able to carry on business under any name under which it presentlydoes so; (vi) the creation of material liabilities(actual or contingent) by any member of the Jennings Group other than in theordinary course of business; (vii) the rights, liabilities, obligationsor interests of any member of the Jennings Group under any such arrangement,agreement, licence, permit, franchise or other instrument or the interests orbusiness of any such member in or with any other person, firm, company or body(or any arrangement or arrangements relating to any such interests or business)being terminated or adversely modified or affected; or (viii) the financial or trading position orthe value of any member of the Jennings Group being prejudiced or adverselyaffected, to an extent which is material in the context of the Jennings Grouptaken as a whole, and no event having occurred which, under any provision of any such arrangement,agreement, licence, permit, franchise or other instrument, could result in orwould be reasonably likely to result in any of the events or circumstances whichare referred to in paragraphs (i) to (vii) of this condition (e); (f) since 28 February 2004 and save as Disclosed, no member ofthe Jennings Group having: (i) issued or agreed to issue, orauthorised the issue of, additional shares of any class, or securitiesconvertible into or exchangeable for, or rights, warrants or options tosubscribe for or acquire, any such shares or convertible or exchangeablesecurities or transferred or sold any shares out of treasury, other than asbetween Jennings and wholly-owned subsidiaries of Jennings and other than anyoptions granted as disclosed in writing to W&DB prior to the date hereof and anyshares issued or shares transferred from treasury upon the exercise of anyoptions granted under any of the Jennings Share Schemes; (ii) purchased or redeemed or repaid anyof its own shares or other securities or reduced or made any other change to anypart of its share capital to an extent which is material in the context of theJennings Group taken as a whole; (iii) recommended, declared, paid or madeany bonus, dividend or other distribution whether payable in cash or otherwise(other than to Jennings or a wholly-owned subsidiary of Jennings); (iv) except as between Jennings and itswholly-owned subsidiaries or between such wholly-owned subsidiaries, made orauthorised any change in its loan capital; (v) (other than any transaction betweenJennings and a wholly-owned subsidiary of Jennings) merged with, demerged oracquired any body corporate, partnership or business or acquired or disposed ofor transferred, mortgaged, charged or created any security interest over anyassets or any right, title or interest in any assets (including shares in anyundertaking and trade investments) or authorised the same (which is material inthe context of the Jennings Group taken as a whole); (vi) issued or authorised the issue of, ormade any change in or to, any debentures or (except as between Jennings and itswholly-owned subsidiaries or between such wholly-owned subsidiaries) incurred orincreased any indebtedness or liability (actual or contingent) which is materialin the context of the Jennings Group taken as a whole; (vii) entered into, varied, or authorisedany agreement, transaction, arrangement or commitment (whether in respect ofcapital expenditure or otherwise) which: (A) is of a long term, onerous or unusual nature or magnitude orwhich is reasonably likely to involve an obligation of such nature or magnitude;or (B) is reasonably likely to restrict the business of any member ofthe Jennings Group; or (C) is other than in the ordinary course of business, and which in any case is material in the context of the Jennings Group taken asa whole; (viii) except as between Jennings and itswholly-owned subsidiaries or between such wholly-owned subsidiaries, enteredinto, implemented, effected or authorised any merger, demerger, reconstruction,amalgamation, scheme, commitment or other transaction or arrangement in respectof itself or another member of the Jennings Group otherwise than in the ordinarycourse of business which in any case is material in the context of the JenningsGroup taken as a whole; (ix) entered into or varied the terms ofany contract, agreement or arrangement with any of the directors or seniorexecutives of any member of the Jennings Group; (x) taken any corporate action or had anylegal proceedings instituted or threatened against it or petition presented ororder made for its winding-up (voluntarily or otherwise), dissolution orreorganisation or for the appointment of a receiver, administrator,administrative receiver, trustee or similar officer of all or any material partof its assets and revenues or any analogous proceedings in any jurisdiction orappointed any analogous person in any jurisdiction which in any case is materialin the context of the Jennings Group taken as a whole; (xi) been unable, or admitted in writingthat it is unable, to pay its debts or having stopped or suspended (orthreatened to stop or suspend) payment of its debts generally or ceased orthreatened to cease carrying on all or a substantial part of its business in anycase with a material adverse effect on the Jennings Group taken as a whole; (xii) waived or compromised any claim whichis material in the context of the Jennings Group taken as a whole;Related Shares:
Marstons