13th Sep 2007 07:04
Cape PLC13 September 2007 13 September 2007 Cape PLC offer for PCH Group Limited Cape PLC ("Cape") announces its intention to make an all cash offer for PCHGroup Limited ("PCH") of $1.30 per PCH share. Cape PLC (AIM:CIU), the international provider of essential support services tothe energy sector, today announced its intention to make an all cash offer of$1.30 per share ("the Offer Price") for all of the outstanding shares in PCHGroup Limited (ASX:PCG) ("the Offer"). The Offer is to be made by Cape AustraliaInvestments Limited ("Cape Australia"), a wholly owned subsidiary of Cape. Notwithstanding Cape's announcement of 7 August 2007 that talks with PCH hadterminated, Cape remains of the belief that the acquisition of PCH represents anattractive opportunity for PCH shareholders to realise value and wishes to allowPCH shareholders an opportunity to decide on the merits of the Offer forthemselves. The Cape Board is aware that PCH shareholders representing a significantproportion of PCH's issued share capital have expressed their desire to theBoard of PCH that the Offer be made available to them (notwithstanding thecurrent terms of the standstill agreement). The Offer is conditional (amongst other conditions outlined in Annexure A) onthis existing standstill agreement being waived by PCH. Cape Australia has been advised by the Foreign Investment Review Board thatthere are no objections, on the basis of the Australian Government's foreigninvestment policy, to its proposal to acquire all the issued share capital inPCH. The Offer values PCH's equity on a fully diluted basis at approximately $233million (£95.1 million). The Offer Price represents a premium of: * 91% to the closing price of PCH's shares on 21 February 2007 of $0.68, being the last business day before PCH announced that it had received an indicative non-binding proposal from Cape; * 91% to the one month Volume Weighted Average Price (VWAP) of PCH Shares up to and including 21 February 2007 of $0.68; * 89% to the three month VWAP up to and including 21 February 2007 of $0.69; * 104% to the six month VWAP up to and including 21 February 2007 of $0.64; and * 13% to the closing price of PCH's shares on 12 September 2007, the last full trading day prior to this announcement. The Cape Board believes that the Offer represents a highly attractivemultiple of PCH's after tax earnings for the year ended 30 June 2007 of 25.3times. The Offer also represents an EV/EBITDA multiple of 13.2 times PCH'sEBITDA for the same period. The Cape Board believes that the Offer, which isentirely in cash, provides an excellent outcome and certainty of value forPCH shareholders. Under the Offer PCH shareholders will also be entitled to retain the benefit ofthe 1 cent per share unfranked final dividend declared by PCH on 29 August 2007and payable in early November 2007.Martin May, Cape's CEO said: "We call on all PCH shareholders to make theirviews known directly to the Board of PCH so PCH shareholders can decide on themerits of Cape's Offer themselves." "The Board of Cape strongly believes that the Offer is compelling and representsa significant premium to the trading value of PCH." "Discussions between the two parties started in late 2006 and we have hadseveral attempts to reach agreement with the PCH Board. We now believe it is theright time for Cape to be able to put a formal offer to PCH shareholders." Offer details The $1.30 cash per share offer is for all PCH ordinary shares, and is subject tocertain conditions set out in Annexure A to this announcement. 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 PCH. A formal Bidder's Statement is expected to be lodged with the AustralianSecurities and Investments Commission (ASIC) shortly. Details on PCH and potential benefits to Cape PCH is a public company listed on the Australian Stock Exchange (ASX: PCG) andhead-quartered in Perth, Australia. PCH provides services including scaffoldingand access management, formwork and shoring, temporary fencing, aluminium lightaccess and materials hoists. The business is diversified across a range ofindustries, with services provided for construction and maintenance activitiesin Australia, the Caspian Sea, South East Asia and the Arabian Gulf. In thefinancial year ended 30 June 2007, PCH generated EBITDA of A$20.9m (£8.5million), profit before tax of A$12.6m (£5.1 million) and a basic EPS of 5.3cents per share. As at 30 June 2007, PCH had gross assets of A$144.4m (£58.9million). Cape believes that the acquisition of PCH would bring a number of benefits toCape including: • extension of Cape's footprint in the Far East/Pacific Rim; • synergies based on Cape's expertise in supplying labour and a broader range of products and services to PCH's customer base; and • the opportunity for Cape management to apply their expertise towards generating additional revenue and margin growth. Cape is being advised by Caliburn Partnership and DLA Phillips Fox is Cape'slegal adviser. For further information, please contact: Cape PLCMartin May, Chief Executive +44 (0)1924 876 276 Bell Pottinger Corporate & FinancialNick Lambert / Victoria Geoghegan +44 (0)20 7861 3232 / +44 (0)7811 358 764 Caliburn PartnershipSimon Mordant, Joint Chief Executive +61 2 9229 1410 / +61 411 406 229Andrew Thomson, Vice President +61 3 9935 6802 / +61 400 927 726 HawkpointChristopher Kemball, Vice Chairman +44 (0)20 7665 4551 / +44 (0)7768 878 529Chris Robinson, Managing Director +44 (0)20 7665 4598 / +44 (0)7971 614 609 Collins Stewart Europe LimitedChris Wells/ Mark Connelly +44 (0)20 7523 8350 Third Person - Australian media contactAdrian Bradley +61 2 8298 6100 / +61 400 499 782 An exchange rate of A$2.45:£1 has been used throughout this announcement. ANNEXURE A - Conditions of the Offer The Offer and any contracts resulting from acceptance of the Offer are subjectto fulfillment of the following conditions: 1. Minimum acceptanceAt or before the end of the Offer Period, Cape has relevant interests in atleast 90% of PCH Shares. 2. Waiver of standstill agreementAt or before the end of the Offer Period Cape PLC is released from theStandstill Agreement. 3. No regulatory actionsBetween the Announcement Date and the end of the Offer Period: a) There is not in effect any preliminary or final decision, order or decree issued by a Public Authority;b) No action or investigation is announced, commenced or threatened by any Public Authority; andc) No application is made to any Public 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 decision or order of ASIC or Takeovers Panel for the purpose, or inexercise, of the powers and discretions conferred on it by the Corporations Act)which restrains or prohibits or impedes, or threatens to restrain, prohibit orimpede, the making of the Offer or the acquisition of PCH Shares under the Offeror the completion of any transaction contemplated by the bidder's statement, orseeks to require the divestiture by Cape of any PCH Shares, or the divestitureof any material assets of the PCH Group or the Cape Group. 4. No material adverse changeBetween the Announcement Date and the end of the Offer Period, no event, changeor condition occurs, is announced or becomes known to Cape (whether or not itbecomes public) where that event, change or condition has had, or couldreasonably be expected to have: a) The effect of reducing the consolidated net profits after tax of the PCH Group, taken as a whole, by more than $2 million for the year ending 30 June 2008;b) The effect of reducing the net assets of the PCH Group, taken as whole, by more than $2 million; or c) A material adverse effect on the status or terms of arrangements enteredinto by the PCH Group, or on the status or terms of any approvals, licences orpermits from Public Authorities applicable to the PCH Group,except for events, changes and conditions publicly announced by PCH or otherwisedisclosed in public filings by PCH or any of its subsidiaries prior to theAnnouncement Date where the relevant disclosure is not, and is not likely to be,incomplete, incorrect, untrue or misleading. 5. No material mergers, acquisitions, disposals or new commitmentsBetween the Announcement Date and the end of the Offer Period, except for anyproposed transaction publicly announced by PCH before the Announcement Date,neither PCH nor any subsidiary of PCH: a) Consolidates with or merges with or into any other person (other than,in the case of a subsidiary of PCH, a wholly-owned subsidiary of PCH) orannounces an intention to do so;b) Acquires, offers to acquire or agrees to acquire one or more entities,businesses or assets (or any interest in one or more entities, businesses orassets) for an amount in aggregate greater than $5 million, or announces anintention to do so;c) Disposes, offers to dispose or agrees to dispose of one or moreentities, businesses or assets (or any interest in one or more entities,businesses or assets) for an amount, or in respect of which the book value (asrecorded in PCH's consolidated statement of financial position as at 31 December2006) is, in aggregate, greater than $5 million, or announces an intention to doso;d) Enters, offers to enter or agrees to enter into any transaction orbecomes the subject of any obligation which would require the expenditure, theforegoing of revenue or may result in PCH or any subsidiary of PCH incurring anyactual or contingent liability of an amount which is, in aggregate, more than $5million, or announces its intention to do so;e) Enters, offers to enter or agrees to enter into, any agreement, jointventure or partnership which is for a term longer than two years, other than inthe ordinary course of business, or announces its intention to do so; orf) Carries on its business otherwise than in the ordinary and usualcourse. 6. Change of control and other rights under certain agreementsNo person has, or before the end of the Offer Period is granted, any right(whether conditional or not) under any agreement or arrangement which ismaterial in the context of the business of the PCH Group (which includes anyagreement or arrangement the termination of which is likely to adversely affectthe revenue or costs of the PCH Group by more than $5 million per annum, or theassets or liabilities of the PCH Group by more than $5 million), as a result ofthe Cape acquiring PCH Shares, to: a) Acquire, or require the disposal of, or require PCH or a subsidiary ofPCH to offer to dispose of, any material asset of the PCH Group; or b) Terminate, or vary the terms or performance of, any material agreementor arrangement with PCH or a subsidiary of PCH,other than rights for which a written enforceable, irrevocable and unconditionalwaiver or release has been obtained by PCH and a copy provided to Cape beforethe end of the Offer Period. 7. Equal access to informationDuring the period from the Announcement Date to the end of the Offer Period, PCHpromptly and in any event within two business days, provides Cape a copy of allinformation that is not generally available (within the meaning of theCorporations Act) relating to PCH or any subsidiary of PCH or any of theirrespective businesses or operations that has been or is provided by PCH or anysubsidiary of PCH or any of their respective officers, employees, advisers oragents (collectively, PCH Disclosures) to any person (other than Cape or anyother member of the Cape Group) for the purpose of, or in connection with,soliciting, encouraging or facilitating a proposal or offer by that person, orby any other person, under which: a) Any person (together with its associates) may acquire voting power of 10% or more in PCH or any subsidiary of PCH;b) Any person may acquire, directly or indirectly, any interest in all, or a substantial part of the business or assets of the PCH Group; orc) That person may otherwise acquire control of or merge or amalgamate with PCH or any subsidiary of PCH. 8. No Prescribed Occurrences During the period from the date of the bidder's statement to the end of theOffer Period, none of the following occurrences (being those listed in Section652C of the Corporations Act) happens: a) PCH converts all or any of its shares into a larger or smaller number of shares;b) PCH or a subsidiary of PCH resolves to reduce its share capital in any way;c) PCH or a subsidiary of PCH enters into a buy-back agreement or resolves to approve the terms of a buy-back agreement under section 257C(1) or 257D(1) of the Corporations Act;d) PCH or a subsidiary of PCH issues shares, or grants an option over its shares or agrees to make such an issue or grant such an option;e) PCH or a subsidiary of PCH issues, or agrees to issue, convertible notes;f) PCH or a subsidiary of PCH disposes, or agrees to dispose, of the whole, or a substantial part, of its business or property;g) PCH or a subsidiary of PCH charges, or agrees to charge, the whole, or a substantial part, of its business or property;h) PCH or a subsidiary of PCH resolves to be wound up;i) A liquidator or provisional liquidator of PCH or of a subsidiary of PCH is appointed;j) A court makes an order for the winding up of PCH or of a subsidiary of PCH;k) An administrator of PCH, or of a subsidiary of PCH, is appointed under section 436A, 436B or 436C of the Corporations Act;l) PCH or a subsidiary of PCH executes a deed of company arrangement; orm) A receiver, or a receiver and manager, is appointed in relation to the whole, or a substantial part, of the property of PCH or of a subsidiary of PCH. 9. No Prescribed Occurrences between the Announcement Date and date of Bidder's Statement During the period from the Announcement Date to the date that is the day beforethe date of the bidder's statement, none of the occurrences listed insub-paragraphs (a) to (m) of Section 8 happened. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
CIU.L