26th May 2005 07:02
Go-Ahead Group PLC26 May 2005 FOR IMMEDIATE RELEASE 26 May 2005 NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN OR INTO ORFROM THE UNITED STATES, CANADA, AUSTRALIA OR JAPAN Recommended Cash Offer by Dresdner Kleinwort Wasserstein Limited on behalf of The Go-Ahead Group plc ("Go-Ahead") for Southern Vectis plc ("Southern Vectis") Summary of the Offer The boards of Go-Ahead and Southern Vectis are today pleased to announce that they have reached agreement on the terms of a recommended cash offer to be made by Dresdner Kleinwort Wasserstein, on behalf of Go-Ahead, to acquire the entire issued ordinary share capital of Southern Vectis. • The Offer will be made on the following basis: for each Southern Vectis Share 70 pence in cash • The Offer values the entire issued ordinary share capital of Southern Vectis at approximately £13.8 million, representing a premium of 28.4 per cent. to the Closing Price of a Southern Vectis Share on 24 May 2005, being the last practicable Dealing Day prior to this Announcement; and a premium of 60.9 per cent. to the Closing Price of a Southern Vectis Share on 3 May 2005, being the last Dealing Day prior to the announcement that Southern Vectis was in discussions which might or might not lead to an offer being made for the entire issued ordinary share capital of Southern Vectis. • In aggregate, irrevocable undertakings to accept the Offer have been received by Go-Ahead in respect of 11,660,573 Southern Vectis Shares, representing approximately 59.0 per cent. of Southern Vectis's existing issued ordinary share capital. • Go-Ahead has received irrevocable undertakings to accept the Offer from those Southern Vectis Directors who own Southern Vectis Shares and their Connected Persons in respect of their entire beneficial shareholdings totalling 3,545,359 Southern Vectis Shares, representing approximately 17.9 per cent. of Southern Vectis's existing issued ordinary share capital. These undertakings remain binding in the event of a higher competing offer being made for Southern Vectis unless the Offer is withdrawn or lapses. • Go-Ahead has also received irrevocable undertakings to accept the Offer in respect of a further 6,647,754 Southern Vectis Shares, representing approximately 33.7 per cent. of the existing issued ordinary share capital of Southern Vectis on the same terms as the irrevocable undertakings from the Southern Vectis Directors and their Connected Persons. In addition, Go-Ahead has received an undertaking from an institutional shareholder of Southern Vectis to accept, or procure the acceptance of, the Offer in respect of 1,467,460 Southern Vectis Shares, representing approximately 7.4 per cent. of Southern Vectis's existing issued ordinary share capital, which will cease to be binding if another offer is made by a third party which exceeds the value of the Offer by 10.0 per cent. or more. • The Directors of Southern Vectis recommend unanimously that Southern Vectis Shareholders accept the Offer. Rationale for the Offer The Go-Ahead Directors believe that the proposed Acquisition will bringimportant strategic, commercial and financial benefits for the Group, including: • strengthening Go-Ahead's existing Southern region bus operations with increased scale and geographic coverage; • improvements in Southern Vectis's operational performance and a turnaround in the performance of Solent Blue Line; • the ability to enhance the quality of services to customers, building on Southern Vectis's existing high service standards; • significant opportunities for operational efficiencies and cost savings; and • the provision of a stronger operating platform to participate in further opportunities in the Southern region. The Go-Ahead Directors believe that the proposed Acquisition will be earningsenhancing for the year ending 30 June 2006 (but this statement should not beinterpreted to mean that the future earnings per share of Go-Ahead following theproposed Acquisition will necessarily match or exceed the historical earningsper share of Go-Ahead). Christopher Moyes, Chief Executive of Go-Ahead, commented: "Southern Vectis is a business that we know and have followed for sometime.Whilst it has faced some challenges in recent times, we are confident that wecan improve Southern Vectis's financial performance through best practice andoperational efficiencies. The Acquisition will complement our bus division, asignificant part of which is already focused on the Southern region of England." Mike Killingley, Chairman of Southern Vectis, commented: "I am extremely positive about the prospects for a combination of SouthernVectis with Go-Ahead's bus operations. Go-Ahead's offer delivers fair value toSouthern Vectis's Shareholders and creates a solid platform for the developmentand growth of Southern Vectis as part of the enlarged group." Enquiries: The Go-Ahead Group plc Southern Vectis plcChristopher Moyes Stuart LinnIan Butcher Ian Palmer Tel: 0191 232 3123 Tel: 01983 522 456 Dresdner Kleinwort Wasserstein Smith & Williamson Corporate FinanceLimited LimitedCharles Batten Azhic BasirovJames Rudd Siobhan SergeantDavid Whiteley Tel: 020 7623 8000 Tel: 020 7637 5377 Weber Shandwick Square MileRichard HewsRachel TaylorStephanie Badjonat Tel: 020 7067 0700 Dresdner Kleinwort Wasserstein Limited, which is authorised and regulated in theUnited Kingdom by the Financial Services Authority, is acting exclusively asfinancial adviser to Go-Ahead and for no one else in connection with the Offerand the contents of this Announcement and no one else and will not beresponsible to anyone other than Go-Ahead for providing the protections affordedto customers of Dresdner Kleinwort Wasserstein Limited or for affording advicein relation to the Offer or in relation to the contents of this Announcement,the Offer Document or any other matter referred to in the Offer Document or thisAnnouncement. Smith & Williamson Corporate Finance Limited which is regulated in the UnitedKingdom by the Financial Services Authority, is acting exclusively as financialadviser to Southern Vectis and no one else in connection with the Offer andother matters described herein and will not be responsible to anyone other thanSouthern Vectis for providing the protections afforded to customers of Smith &Williamson Corporate Finance Limited or for giving advice in relation to theOffer or in relation to the contents of this Announcement, the Offer Document orany other matter described in the Offer Document. Smith & Williamson Corporate Finance Limited has given and not withdrawn itswritten consent to the publication of its letter dated 26 May 2005 as set out inAppendix II to this Announcement. KPMG has given and not withdrawn its written consent to the publication of itsletter dated 26 May 2005 as set out in Appendix II to this Announcement. The Offer will not be made, directly or indirectly, in or into, any USRestricted Jurisdiction, Canada, Australia, Japan or any other jurisdiction ifto do so would constitute a violation of the relevant laws of such jurisdiction,or by use of the mails of, or by any means, instrumentality or by any facilitiesof a national, state or other securities exchange of any US RestrictedJurisdiction, Canada, Australia, Japan or any other jurisdiction if to do sowould constitute a violation of the relevant laws of such jurisdiction and theOffer will not be capable of acceptance by any such use, means, instrumentalityor facility, or from within any US Restricted Jurisdiction, Canada, Australia,Japan or any such other jurisdiction and doing so may render invalid anypurported acceptance of the Offer. Accordingly, copies of this Announcement, theOffer Document, the Form of Acceptance and any related offering documents arenot being and must not be mailed, forwarded, sent, transmitted or otherwisedistributed in, into or from any US Restricted Jurisdiction, Canada, Australia,Japan or any such other jurisdiction and all persons receiving such documents(including, without limitation, custodians, nominees and trustees) shouldobserve these restrictions and must not distribute, forward, mail or transmit orsend them in, into or from any US Restricted Jurisdiction, Canada, Australia,Japan or any such other jurisdiction. Any person (including without limitation,custodians, nominees and trustees) who would otherwise intend to forward thisAnnouncement to any jurisdiction outside the United Kingdom or to OverseasShareholders, should seek appropriate professional advice before taking anyaction. This Announcement does not constitute, or form part of, an offer or aninvitation to purchase securities. This summary should be read in conjunction with the full text of thisAnnouncement. The definitions of terms used in this Announcement are contained in AppendixIII. FOR IMMEDIATE RELEASE 26 May 2005 NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN OR INTO ORFROM THE UNITED STATES, CANADA, AUSTRALIA OR JAPAN Recommended Cash Offer by Dresdner Kleinwort Wasserstein Limited on behalf of The Go-Ahead Group plc ("Go-Ahead") for Southern Vectis plc ("Southern Vectis") 1. Introduction The boards of Go-Ahead and Southern Vectis are today pleased to announce that they have reached agreement on the terms of a recommended cash offer to be madeby Dresdner Kleinwort Wasserstein, on behalf of Go-Ahead, to acquire the entire issued ordinary share capital of Southern Vectis. 2. The Offer On behalf of Go-Ahead, Dresdner Kleinwort Wasserstein hereby offers to acquire,on the terms and subject to the conditions set out in Appendix I and the OfferDocument and (in respect of certificated Southern Vectis Shares) in the Form ofAcceptance, all of the issued Southern Vectis Shares, on the following basis: for each Southern Vectis Share 70 pence in cash The Offer values the entire issued ordinary share capital of Southern Vectis atapproximately £13.8 million, representing a premium of 28.4 per cent. to theClosing Price of a Southern Vectis Share on 24 May 2005, being the lastpracticable Dealing Day prior to this Announcement and a premium of 60.9 percent. to the Closing Price of a Southern Vectis Share on 3 May 2005, being thelast Dealing Day prior to the announcement that Southern Vectis was indiscussions which might or might not lead to an offer being made for the entireissued ordinary share capital of Southern Vectis. In aggregate, irrevocable undertakings to accept the Offer have been received inrespect of 11,660,573 Southern Vectis Shares, representing approximately 59.0per cent. of Southern Vectis's existing issued ordinary share capital. As described above, the Offer is subject to the conditions and further terms setout in the Offer Document and Form of Acceptance (in respect of certificatedSouthern Vectis Shares). 3. Recommendation The Southern Vectis Board, which has been so advised by Smith & Williamson, its financial advisers, considers the terms of the Offer to be fair and reasonable. In providing financial advice to the Southern Vectis Board, Smith & Williamson has taken into account the commercial assessments of the Southern Vectis Directors. Accordingly, the Southern Vectis Directors recommend unanimously that Southern Vectis Shareholders accept the Offer as they have undertaken to do in respect oftheir entire beneficial holdings of Southern Vectis Shares, which together withthe beneficial holdings of their Connected Persons, comprise in aggregate 3,545,359 Southern Vectis Shares, representing approximately 17.9 per cent. of the existing issued ordinary share capital of Southern Vectis. 4. Rationale for the Offer Go-Ahead is one of the UK's leading providers of passenger transport managementservices. The Group's operations, including its bus division, are focused on theSouthern region of England where population growth trends are attractive.Go-Ahead's commitment to Southern Vectis's area of operation is longstanding andthe proposed Acquisition of Southern Vectis represents an attractive addition tothe Group. Go-Ahead's bus division generated revenues for the year ended 3 July 2004 of£387.5 million. The bus division has operations in London, Oxford, Brighton andHove, Crawley and the North East of England. These operations were complementedin August 2003 by the acquisition of Wilts and Dorset for a cash considerationof approximately £31.6 million. Wilts and Dorset operates a fleet of 390 busesin Dorset, Wiltshire and South West Hampshire servicing the local conurbationsof Bournemouth, Poole and Salisbury. The Go-Ahead Directors believe that theSouthern region bus operations have continued to expand and offer further growthpotential. In summary, the Go-Ahead Directors believe that the proposed Acquisition willbring important strategic, commercial and financial benefits for the Group,including: • strengthening Go-Ahead's existing Southern region bus operations with increased scale and geographic coverage; • improvements in Southern Vectis's operational performance and a turnaround in the performance of Solent Blue Line; • the ability to enhance the quality of services to customers, building on Southern Vectis's existing high service standards; • significant opportunities for operational efficiencies and cost savings; and • the provision of a stronger operating platform to participate in further opportunities in the Southern region. The Go-Ahead Directors believe that the proposed Acquisition will be earningsenhancing for the year ending 30 June 2006 (but this statement should not beinterpreted to mean that the future earnings per share of Go-Ahead following theproposed Acquisition will necessarily match or exceed the historical earningsper share of Go-Ahead). 5. Irrevocable undertakings to accept the Offer Irrevocable undertakings to accept the Offer from those Southern VectisDirectors who own Southern Vectis Shares and their Connected Persons have beengiven to Go-Ahead in respect of their entire beneficial shareholdings totallingin aggregate 3,545,359 Southern Vectis Shares, representing approximately 17.9per cent. of Southern Vectis's existing issued share capital. These undertakingsremain binding in the event of a higher competing offer being made for SouthernVectis unless the Offer is withdrawn or lapses. Go-Ahead has also received irrevocable undertakings to accept the Offer inrespect of a further 6,647,754 Southern Vectis Shares, representingapproximately 33.7 per cent. of the existing issued ordinary share capital ofSouthern Vectis on the same terms as the irrevocable undertakings from theSouthern Vectis Directors and their Connected Persons. In addition, Go-Ahead hasreceived an undertaking from an institutional shareholder of Southern Vectis toaccept, or procure the acceptance of, the Offer in respect of an aggregate of1,467,460 Southern Vectis Shares, representing approximately 7.4 per cent. ofSouthern Vectis's existing issued ordinary share capital, which will cease to bebinding if another offer is made by a third party which exceeds the value of theOffer by 10.0 per cent. or more. Accordingly, Go-Ahead has received irrevocable undertakings to accept the Offerin respect of a total of 11,660,573 Southern Vectis Shares representing, inaggregate, approximately 59.0 per cent. of Southern Vectis's existing issuedordinary share capital. Further details of the irrevocable undertakings are set out in the table below. Number of Southern Vectis Shares Beneficial Non-BeneficialName Note Interest InterestGary Vernon Reginald Batchelor 1 2,500,000 2,148,141Anthony Nicholas Bradshaw 1 0 2,148,141Alan Robert Peeling 1,018,333 0Jacqueline Bridget Peeling 981,280 0Edward William Palmer 4 1,562 0Close Beacon Investment Fund 0 1,467,460 Southern Vectis Directors and Connected PersonsMichael Sedley Killingley 137,500 0Stuart Geoffrey Linn 3 2,312,357 0Jacqueline Marie Linn 3 49,375 0Ian William Palmer 4 1,026,552 0Kathryn Boyes 9,500 0Anthony Peter Holmes 1,2 9,075 2,148,141Rachel Clare Holmes 2 1,000 0 1 Gary Vernon Reginald Batchelor, Anthony Peter Holmes and Anthony Nicholas Bradshaw are joint trustee holders of a total of 2,148,141 Southern Vectis Shares held in three separate trusts.2 Rachel Clare Holmes is the wife of Anthony Peter Holmes.3 Jacqueline Marie Linn is the wife of Stuart Geoffrey Linn.4 Edward William Palmer and Ian William Palmer are joint beneficial holders of 1,562 Southern Vectis shares. In total irrevocable undertakings have been received in respect of 11,660,573Southern Vectis Shares, which equates to the total amount of Southern VectisShares set out in the above table and notes 1 to 4. 6. Financing the Offer The cash consideration payable under the Offer will be funded from Go-Ahead'sown resources and bank facilities as described in the Offer Document. 7. Information on Go-Ahead Go-Ahead is one of the UK's leading providers of passenger transport managementservices, operating in the bus, rail and aviation sectors. Go-Ahead is listed onthe Official List of the London Stock Exchange with a market capitalisation inexcess of £675 million. Go-Ahead's bus operations are focused in London and the South, South East andNorth East of England. In addition, the Group's rail interests are concentratedin the South East of England where it currently operates the Southern andThameslink rail franchises. The Group's aviation division provides cargohandling, passenger check-in, baggage handling and ground handling services fordomestic and international airlines at 18 airports in the UK and Eire. Go-Aheadalso owns Meteor Parking, the third largest parking company in the country. The Group employs over 19,000 staff across the country and around 650 millionpassenger journeys are undertaken on its services each year. Go-Ahead'scustomers include Transport for London, local authorities, the Strategic RailAuthority, BAA and major airlines. For the year ended 3 July 2004, Go-Ahead generated profit before tax andexceptional items and goodwill of £91.3 million (2003: £65.5 million) onturnover (including joint ventures) of £1,244.0 million (2003: £1,102.0million). Net assets as at 3 July 2004 were £112.2 million (2003: £139.5million). For the six months ended 1 January 2005, Go-Ahead reported unauditedturnover of £637.9 million (2004: £633.8 million) and an unaudited profit beforetax and exceptional items and goodwill of £49.6 million (2004: £47.0 million).As at 1 January 2005, Go-Ahead had unaudited net assets of £141.3 million (2004:£163.6 million). Since the announcement of the Group's interim results on 18February 2005, Go-Ahead has continued to trade in line with management'sexpectations. 8. Information on Southern Vectis Southern Vectis is a road passenger transport business operating bus services onthe Isle of Wight ("Island Buses") and in Southampton and surrounding areas("Mainland Buses"). Southern Vectis operates over 150 buses in house and underfranchise. The fleet includes single deck and double deck buses. Southern Vectisalso runs open-top tours for tourists across the Isle of Wight and in the NewForest. A summary of Southern Vectis's operations is set out below: Island Buses Southern Vectis is the largest operator of bus services on the Isle of Wight and as at 30 April 2005 operated 82 buses on the island. With the increasing popularity for visitors to the Island of open top services, further routes have been added during 2004 increasing the total number of routes operated to three. The first significant bus priority measure was introduced in Newport in 2004 and is expected to be beneficial to the business. In addition, a contra flow bus lane through the town centre has helped to improve timetable reliability. The Isle of Wight Festival is likely to be an increasing stimulant to tourism, and hence bus revenue, over the coming years. Mainland Buses Southern Vectis operates buses in Southampton and Southern Hampshire, branded Solent Blue Line. The division has recently experienced disappointing trading results and has undergone significant restructuring since the beginning of 2004. During 2004 this division developed a new revenue stream providing buses for weekend rail replacement services which the Southern Vectis Directors believe will make a significant contribution to the profitability of Southern Vectis for 2005 and beyond. Commercial engineering Southern Vectis also provides commercial engineering for heavy goods vehicles, with two service dealerships. Southern Vectis has MOT and tachograph status at those outlets. For the year ended 30 April 2004, Southern Vectis reported profit before tax of£0.8 million (2003: £0.7 million) on turnover of £17.0 million (2003: £16.0million). Net assets as at 30 April 2004 were £2.7 million (2003: £2.5 million).For the six months ended 31 October 2004 Southern Vectis reported unauditedturnover of £9.1 million (2003: £8.5 million) and an unaudited profit before taxand exceptional items of £772,000 (2003: £758,000). As at 31 October 2004,Southern Vectis had unaudited net assets of £3.3 million (2003: £3.1 million),including net debt of £4.9 million (2003: £5.1 million). Additional financialinformation on Southern Vectis will be set out in the Offer Document. In March 2003 Southern Vectis entered into an agreement with Halladale grantingit an option to purchase Newport Bus Station. As announced by Southern Vectis on11 April 2005, Halladale exercised the option and the sale was completed on 27April 2005, for a cash consideration of approximately £5.1 million. Followingcompletion, Southern Vectis will incur costs, estimated to be approximately £1.2million, in connection with the provision of new bus interchange facilities inthe new development. Further details of the option arrangement will be set outin the Offer Document. 9. Profit estimate In Southern Vectis's interim results for the six months ended 31 October 2004published on 15 December 2004, the Southern Vectis Board stated that it expectedprofits for the full year to be below those of last year, and below marketexpectations at the time. Having reviewed Southern Vectis's performance following the year end, theSouthern Vectis Board expects the profits for the year ended 30 April 2005 to bebelow current market expectations. This statement constitutes a profit estimate under the City Code and as such isnow repeated and reported on in Appendix II. The full text of the statement andthe reports as required under the City Code from Southern Vectis's financialadviser, Smith & Williamson, and Southern Vectis's reporting accountants, KPMG,will be reproduced in full in the Offer Document. 10. Management and employees The Go-Ahead Board has confirmed that, following the Offer becoming or beingdeclared unconditional in all respects, the existing employment rights,including pension rights, of all employees of the Southern Vectis Group will befully safeguarded. 11. Compulsory acquisition and cancellation of AIM admission If Go-Ahead receives acceptances under the Offer in respect of and/or otherwiseacquires 90 per cent. or more of the Southern Vectis Shares to which the Offerrelates and the Offer becomes or is declared unconditional in all respects,Go-Ahead intends to exercise its rights pursuant to the provisions of sections428 to 430F (inclusive) of the Act to acquire compulsorily any Southern VectisShares in respect of which valid acceptances have not been received. As soon as it is appropriate and possible to do so, and subject to the Offerbecoming or being declared unconditional in all respects, Go-Ahead intends toprocure that Southern Vectis applies to the London Stock Exchange for thecancellation of the admission of Southern Vectis Shares on AIM. Notice of at least 20 Business Days of the date for cancellation will be given,either on the Offer becoming or being declared unconditional in all respects, oron the first date of issue of compulsory acquisition notices under section 429of the Act. It is anticipated that the cancellation of Southern Vectis's listingand admission to trading will take effect, subject to the approval of the LondonStock Exchange, on the expiry of 20 Business Days or thereabouts after the Offerbecomes or is declared unconditional in all respects. Such cancellation would significantly reduce the liquidity and marketability ofSouthern Vectis Shares not assented to the Offer. 12. Inducement fee arrangements As an inducement to Go-Ahead to make the Offer, Southern Vectis and Go-Aheadhave entered into an inducement fee agreement. The inducement fee amounts to£138,280 inclusive of VAT (if any), and will be payable to Go-Ahead by SouthernVectis if either (i) the Southern Vectis Directors withdraw or adversely modifytheir recommendation in respect of the Offer; or (ii) a competing offerannouncement is made and the third party transaction referred to in suchannouncement or any other competing third party transaction announced within 60days of the date of this Announcement subsequently becomes or is declaredunconditional in all respects or is completed and the Offer lapses or iswithdrawn. 13. Overseas shareholders The Offer will not be made, directly or indirectly, in or into, any USRestricted Jurisdiction, Canada, Australia, Japan or any other jurisdiction ifto do so would constitute a violation of the relevant laws of such jurisdiction,or by use of the mails of, or by any means, instrumentality or by any facilitiesof a national, state or other securities exchange of any US RestrictedJurisdiction, Canada, Australia, Japan or any other jurisdiction if to do sowould constitute a violation of the relevant laws of such jurisdiction and theOffer will not be capable of acceptance by any such use, means, instrumentalityor facility, or from within any US Restricted Jurisdiction, Canada, Australia,Japan or any such other jurisdiction and doing so may render invalid anypurported acceptance of the Offer. Accordingly, copies of this Announcement, theOffer Document, the Form of Acceptance and any related offering documents arenot being and must not be mailed, forwarded, sent, transmitted or otherwisedistributed in, into or from any US Restricted Jurisdiction, Canada, Australia,Japan or any such other jurisdiction and all persons receiving such documents(including, without limitation, custodians, nominees and trustees) shouldobserve these restrictions and must not distribute, forward, mail or transmit orsend them in, into or from any US Restricted Jurisdiction, Canada, Australia,Japan or any such other jurisdiction. Any person (including without limitation,custodians, nominees and trustees) who would otherwise intend to forward thisAnnouncement to any jurisdiction outside the United Kingdom or to OverseasShareholders, should seek appropriate professional advice before taking anyaction. 14. Further details of the Offer The Offer will extend to all existing issued Southern Vectis Shares and to anySouthern Vectis Shares which are unconditionally allotted and fully paid (orcredited as fully paid) while the Offer remains open for acceptance (or suchearlier date, not being earlier than the date on which the Offer becomesunconditional as to acceptances or, if later, the First Closing Date, asGo-Ahead may, subject to the City Code, decide). The Southern Vectis Shares will be acquired by Go-Ahead fully paid, free fromall liens, charges, equitable interests, encumbrances and any other third partyrights of any nature whatsoever and together with all rights now or hereafterattaching to them, including the right to receive in full and retain alldividends and other distributions (if any) declared, made or paid after 25 May2005 (being the last Dealing Day prior to this Announcement). The Offer is subject to the conditions and further terms set out in the OfferDocument and in the accompanying Form of Acceptance (in respect of certificatedSouthern Vectis Shares). 15. General Dresdner Kleinwort Wasserstein, on behalf of Go-Ahead, expects to dispatch theOffer Document setting out the full terms and conditions of the Offer, togetherwith the related Form of Acceptance, as soon as practicable and in any event(other than with the consent of the Panel) not more than 28 days from the dateof this Announcement. The Southern Vectis Directors accept responsibility for the information containedin this Announcement relating to Southern Vectis, the Southern Vectis Directorsand members of their immediate families and related trusts and persons connectedwith them within the meaning of Section 346 of the Act. To the best of the knowledge and belief of the Southern Vectis Directors (who have taken all reasonable care to ensure that such is the case), such information, contained in this Announcement, for which they take responsibility is in accordance with the facts and does not omit anything likely to affect the import of such information. The Go-Ahead Directors accept responsibility for the information contained in this Announcement, other than that relating to Southern Vectis, the Southern Vectis Group, and the Southern Vectis Directors, their immediate family relations and persons connected with them (within the meaning of Section 346 of the Act). To the best of the knowledge and belief of the Go-Ahead Directors (who have taken all reasonable care to ensure that such is the case), such information contained in this Announcement for which they take responsibility is in accordance with the facts and does not omit anything likely to affect the import of such information. The definitions of terms used in this Announcement are contained in AppendixIII. Enquiries: The Go-Ahead Group plc Southern Vectis plcChristopher Moyes Stuart LinnIan Butcher Ian Palmer Tel: 0191 232 3123 Tel: 01983 522 456 Dresdner Kleinwort Wasserstein Smith & Williamson Corporate FinanceLimited LimitedCharles Batten Azhic BasirovJames Rudd Siobhan SergeantDavid Whiteley Tel: 020 7623 8000 Tel: 020 7637 5377 Weber Shandwick Square MileRichard HewsRachel TaylorStephanie Badjonat Tel: 020 7067 0700 Dresdner Kleinwort Wasserstein Limited, which is authorised and regulated in theUnited Kingdom by the Financial Services Authority, is acting exclusively asfinancial adviser to Go-Ahead and for no one else in connection with the Offerand the contents of this Announcement and no one else and will not beresponsible to anyone other than Go-Ahead for providing the protections affordedto customers of Dresdner Kleinwort Wasserstein Limited or for affording advicein relation to the Offer or in relation to the contents of this Announcement,the Offer Document or any other matter referred to in the Offer Document or thisAnnouncement. Smith & Williamson Corporate Finance Limited which is regulated in the UnitedKingdom by the Financial Services Authority, is acting exclusively as financialadviser to Southern Vectis and no one else in connection with the Offer, thecontents of this Announcement and other matters described herein and will not beresponsible to anyone other than Southern Vectis for providing the protectionsafforded to customers of Smith & Williamson Corporate Finance Limited or forgiving advice in relation to the Offer or in relation to the contents of thisAnnouncement, the Offer Document or any other matter described in the OfferDocument. Smith & Williamson Corporate Finance Limited has given and not withdrawn itswritten consent to the publication of its letter dated 26 May 2005 as set out inAppendix II to this Announcement. KPMG has given and not withdrawn its written consent to the publication of itsletter dated 26 May 2005 as set out in Appendix II to this Announcement. The Offer will not be made, directly or indirectly, in or into, any USRestricted Jurisdiction, Canada, Australia, Japan or any other jurisdiction ifto do so would constitute a violation of the relevant laws of such jurisdiction,or by use of the mails of, or by any means, instrumentality or by any facilitiesof a national, state or other securities exchange of any US RestrictedJurisdiction, Canada, Australia, Japan or any other jurisdiction if to do sowould constitute a violation of the relevant laws of such jurisdiction and theOffer will not be capable of acceptance by any such use, means, instrumentalityor facility, or from within any US Restricted Jurisdiction, Canada, Australia,Japan or any such other jurisdiction and doing so may render invalid anypurported acceptance of the Offer. Accordingly, copies of this Announcement, theOffer Document, the Form of Acceptance and any related offering documents arenot being and must not be mailed, forwarded, sent, transmitted or otherwisedistributed in, into or from any US Restricted Jurisdiction, Canada, Australia,Japan or any such other jurisdiction and all persons receiving such documents(including, without limitation, custodians, nominees and trustees) shouldobserve these restrictions and must not distribute, forward, mail or transmit orsend them in, into or from any US Restricted Jurisdiction, Canada, Australia,Japan or any such other jurisdiction. Any person (including without limitation,custodians, nominees and trustees) who would otherwise intend to forward thisAnnouncement to any jurisdiction outside the United Kingdom or to OverseasShareholders, should seek appropriate professional advice before taking anyaction. Dresdner Kleinwort Wasserstein Limited is an approved person for the purposes ofSection 21 of the Financial Services and Markets Act 2000, The principal placeof business of Dresdner Kleinwort Wasserstein Limited is 20 Fenchurch Street,London, EC3P 3DB. Dresdner Kleinwort Wasserstein Limited is a limited companyincorporated in England and Wales with registered company number 551334. Appendix I: Conditions of the OfferThe Offer, which is being made by Dresdner Kleinwort Wasserstein on behalf ofGo-Ahead, is governed by English law and is subject to the jurisdiction of thecourts of England and to the terms and conditions set out below and (in respectof certificated Southern Vectis Shares) the accompanying Form of Acceptance. The Offer is subject to the following conditions:- 1. valid acceptances of the Offer being received (and not, where permitted, withdrawn) by 1.00 pm (London time) on the First Closing Date (or such later time(s) and/or date(s) as Go-Ahead may, subject to the rules of the City Code, or with the consent of the Panel decide) in respect of not less than 90 per cent. (or such lesser percentage as Go-Ahead may decide) in nominal value of the Southern Vectis Shares to which the Offer relates, provided that this condition will not be satisfied unless Go-Ahead and its wholly owned subsidiaries shall have acquired or agreed to acquire, pursuant to the Offer or otherwise, Southern Vectis Shares carrying in aggregate more than 50 per cent. of the voting rights then exercisable at a general meeting of Southern Vectis. For the purposes of this condition:- 1.1 Southern Vectis Shares which have been unconditionally allotted shall be deemed to carry the voting rights they will carry upon being entered in the register of members of Southern Vectis; and 1.2 the expression "Southern Vectis Shares to which the Offer relates" means:- 1.2.1 Southern Vectis Shares unconditionally allotted or issued on or before the date the Offer is made; and 1.2.2 Southern Vectis Shares unconditionally allotted or issued after that date but before the date on which the Offer ceases to be open for acceptance (or such earlier date, not being earlier than the date on which the Offer becomes unconditional as to acceptances, or, if later, the first closing date of the Offer, as Go-Ahead may decide) but excluding any Southern Vectis Shares which, on the date the Offer is made, are held or (otherwise than under a contract as described in section 428(5) of the Companies Act) contracted to be acquired by Go-Ahead and/or its associates (within the meaning of section 430E of the Companies Act); 2. no Relevant Authority having decided to take, instituted or threatened any action, proceedings, suit, investigation or enquiry, or having enacted, made or proposed to enact or make any statute, regulation, order or decision that would or might reasonably be expected to:- 2.1 make the Offer for the acquisition of any Southern Vectis Shares, or the acquisition of control of Southern Vectis, by Go-Ahead void, unenforceable or illegal or restrict, prohibit, delay or otherwise interfere with the implementation of, or impose additional conditions or obligations which Go-Ahead acting reasonably considers material with respect to, or otherwise challenge, the Offer or the acquisition of any Southern Vectis Shares, or the acquisition of control of Southern Vectis, by Go-Ahead; 2.2 require or prevent or delay or alter the terms for any divestiture by Go-Ahead or any member of the Wider Go-Ahead Group or by Southern Vectis or any member of the Wider Southern Vectis Group of all or any part of their respective businesses, assets or properties or impose any limitation on their ability to conduct their respective businesses or to own any of their respective assets or properties, in each case the result of which would have a material adverse effect on the Wider Go-Ahead Group or the Wider Southern Vectis Group as the case may be, in either case taken as a whole; 2.3 impose any material limitations on, or result in a material delay in, the ability of Go-Ahead directly or indirectly to acquire or hold or to exercise effectively any rights of ownership of shares in Southern Vectis or on the ability of Southern Vectis or any other member of the Wider Southern Vectis Group or Go-Ahead to hold or exercise effectively any rights of ownership of shares or convertible loan stock or any other securities in any member of the Wider Southern Vectis Group held or owned by it or to exercise management control over any member of the Wider Southern Vectis Group; 2.4 otherwise adversely affect the business, assets or profits of any member of the Wider Go-Ahead Group or of the Wider Southern Vectis Group in a manner which is adverse to and material in the context of the Wider Go-Ahead Group or the Wider Southern Vectis Group as the case may be, in either case taken as a whole; 2.5 require any member of the Wider Go-Ahead Group or the Wider Southern Vectis Group to offer to acquire or to hold any shares or other securities (or the equivalent) in, or indebtedness of, any member of the Wider Southern Vectis Group owned or held by any third party to an extent which Go-Ahead acting reasonably considers material; 2.6 result in a material delay in the ability of any member of the Go-Ahead Group, or render any member of the Go-Ahead Group unable, to acquire all or some of the Southern Vectis Shares or require or prevent a divestiture by any member of the Go-Ahead Group of any such shares; or 2.7 result in any member of the Southern Vectis Group ceasing to be able to carry on business under any name which it presently does so to an extent which is or might reasonably be expected to be material in the context of the Wider Southern Vectis Group; and all applicable waiting periods during which any such government, body,agency, court or other person could institute or threaten any such action,proceedings, suit, investigation or enquiry having expired or been terminated; 3. the Office of Fair Trading indicating in terms satisfactory to Go-Ahead or Go-Ahead otherwise establishing, in either case acting reasonably, that the Office of Fair Trading does not intend to refer the proposed Acquisition, or any matters arising there from, to the Competition Commission; 4. all Authorisations, reasonably considered necessary or appropriate for or in respect of the Offer and the proposed acquisition of Southern Vectis by Go-Ahead being obtained in terms and in a form reasonably satisfactory to Go-Ahead from appropriate governments, governmental, quasi-governmental, supranational, statutory or regulatory bodies, courts, trade agencies, professional associations or any persons or bodies with whom any member of the Wider Go-Ahead Group or the Wider Southern Vectis Group has entered into contractual arrangements, and such Authorisations, remaining in full force and effect at the time at which the Offer becomes otherwise unconditional to an extent which is or might reasonably be considered material and all necessary filings having been made and all appropriate waiting periods under any applicable legislation and regulations in any jurisdiction having expired or been terminated and no notice or indication of any intention to revoke, suspend, restrict, modify or not renew any of the same having been received, in each case as may be necessary in connection with the Offer under the laws or regulations of any jurisdiction and all necessary statutory requirements or regulations in any jurisdiction having been complied with; 5. there being no provision of any arrangement, agreement, licence, permit, franchise or other instrument to which any member of the Wider Southern Vectis Group is a party, or by or to which any such member or any of their assets are or may be bound, or be subject which could, as a result of the acquisition or the proposed acquisition by Go-Ahead of the Southern Vectis Shares or any part thereof or otherwise, be reasonably expected and to an extent which Go-Ahead acting reasonably considers material to result in:- 5.1 any monies borrowed by, or any other indebtedness actual or contingent of, any such member becoming repayable or capable of being declared immediately or earlier than the repayment date stated in such arrangement, agreement or instrument or the ability of any such member to borrow monies or incur any indebtedness being withdrawn or inhibited; 5.2 any such arrangement, agreement, licence, permit, franchise or instrument being terminated or adversely modified or affected or any onerous obligation arising or any action being taken or arising thereunder; 5.3 the rights, liabilities, obligations, interests or business of any member of the Wider Southern Vectis Group under any such arrangement, agreement, licence, permit, franchise or instrument or the interests or business of any member of the Wider Southern Vectis Group in or with any other firm or company or body or person (or any arrangement or arrangements relating to any such business or interests) being terminated or adversely modified or affected; 5.4 any such member ceasing to be able to carry on business under any name under which it presently does so to an extent which is or might reasonably be expected to be material in the context of the Wider Southern Vectis Group; 5.5 any assets or interests of any such member being or falling to be disposed of or charged or any right arising under which any such asset or interest could be required to be disposed of or charged otherwise than in the ordinary course of business; 5.6 the creation of any mortgage, charge or other security over the whole or any part of the business, property or assets of any such member or any such security (whenever arising or having arisen) becoming enforceable; 5.7 the financial or trading position or prospects of any member of the Wider Southern Vectis Group being prejudiced or adversely affected to an extent which is material in the context of the Wider Southern Vectis Group; or 5.8 the creation of any liability (actual or contingent) by any member of the Wider Southern Vectis Group; and no event having occurred which, under any provision of any arrangement, agreement, license, permit, franchise or other instrument to which any member of the Wider Southern Vectis Group is a party or by or to which any such member or any of its assets is bound, entitled or subject, is reasonably likely to result in any of the events or circumstances as are referred to in paragraphs 5.1 to 5.8 of this condition 5 and to an extent which Go-Ahead acting reasonably considers is material; 6. no member of the Wider Southern Vectis Group having since 30 April 2004 except as fairly disclosed in the interim results of Southern Vectis for the six months ended 31 October 2004 (the "Southern Vectis Interims"):- 6.1 (except as between Southern Vectis and wholly-owned subsidiaries of Southern Vectis) issued or agreed to issue or authorised or proposed the issue of additional shares of any class, or securities convertible into any such shares, or rights, warrants or options to subscribe for or acquire, any such shares; 6.2 recommended, declared, paid or made or proposed to declare, pay or make any bonus, dividend or other distribution other than to Southern Vectis or one of its wholly owned subsidiaries; 6.3 authorised or proposed or announced an intention to propose any merger or demerger or acquisition or disposal of assets (other than in the ordinary course of trading) or shares; 6.4 (except as between Southern Vectis and its wholly owned subsidiaries) made or authorised or proposed or announced its intention to propose any change in its share capital or loan capital; 6.5 issued, authorised or proposed the issue of any debentures or (except in the ordinary course of business) incurred or increased any indebtedness or contingent liability in any such case which is material in the context of the Wider Southern Vectis Group taken as a whole; 6.6 entered into or varied or announced its intention to enter into or vary any contract, transaction or commitment (whether in respect of capital expenditure or otherwise) which is of a long term, onerous or unusual nature or which involves or could involve an obligation of a nature or magnitude which is material in the Wider Southern Vectis Group taken as a whole; 6.7 entered into or varied, or announced its intention to enter into or vary, the terms of any service agreement with any of the directors or senior executives of the Southern Vectis Group; 6.8 (to an extent which is material in the context of the Wider Southern Vectis Group taken as a whole and except for transactions between Southern Vectis and its wholly-owned subsidiaries) merged with any body corporate or in each case to the extent that the same is outside the ordinary course of business acquired or disposed of, or transferred, mortgaged or charged or created any security interest over, any assets or any right, title or interest in any asset (including shares and trade investments) or authorised, proposed or announced any intention to propose any merger, demerger, acquisition, disposal, transfer, mortgage, charge or security interest; 6.9 purchased, redeemed or repaid or announced any proposal to purchase, redeem or repay any of its own shares or other securities or reduced or made any other change to any part of its share capital; 6.10 entered into any contract or other transaction which is or is likely to be restrictive to a material extent on the business of any member of the Wider Southern Vectis Group; 6.11 implemented or authorised, proposed or announced its intention to implement or enter into any reconstruction, amalgamation, commitment, scheme or other transaction or arrangement otherwise than in the ordinary course of business; 6.12 proposed any voluntary winding up; 6.13 made any material alteration to its memorandum or articles of association or other incorporation documents; 6.14 ceased to be able, or admitted in writing that it is unable, to pay its debts as they fall due or stopped or suspended (or threatened to stop or suspend) payment of its debts generally or ceased or threatened to cease carrying on all or a substantial part of any business; 6.15 taken any corporate action or had any legal proceedings instituted or threatened against it in respect of its winding up, dissolution or reorganisation or for the appointment of a receiver, administrator, administrative receiver, liquidator, trustee or similar officer of all or any of its assets or revenues or any analogous proceedings in any jurisdiction or appointed any analogous person in any jurisdiction or had any such person appointed; 6.16 waived or compromised any claim which is, in any such case, material in the context of the Wider Southern Vectis Group taken as a whole; 6.17 made or agreed or consented to any significant change to the terms of the trust deeds constituting the pension schemes established for its directors, employees or their dependents or the benefits which accrue, or to the pensions which are payable, thereunder, or to the basis on which qualification for, or accrual or entitlement to, such benefits or pensions is calculated or determined or to the basis upon which the liabilities (including pensions) of such pension schemes are funded or made, or agreed or consented to any change to the trustees involving the appointment of a trust corporation; 6.18 (other than in the ordinary course of business) granted any lease or third party rights in respect of any of the leasehold property or freehold property owned or occupied by it or otherwise disposed of any such property to an extent which is material in the context of the Offer or the Wider Southern Vectis Group taken as a whole; or 6.19 entered into any contract, commitment or agreement or passed any resolution with respect to or announced an intention to effect or to propose any of the transactions or events referred to in this paragraph 6; 7. Since 30 April 2004 (except as fairly disclosed in the Southern Vectis Interims or as otherwise disclosed in the Offer Document):- 7.1 there having been no receiver, administrator, administrative receiver or other encumbrancers appointed over any of the assets of any member of the Wider Southern Vectis Group and no analogous proceedings or steps having taken place under the laws of any jurisdiction and there having been no petition presented for the administration or winding up of any member of the Wider Southern Vectis Group or any equivalent proceedings or steps taken under the laws of any jurisdiction; 7.2 there having been no adverse change or deterioration in the business, operation, assets, financial or trading position or profits of any member of the Wider Southern Vectis Group or any event or circumstance that might reasonably be expected to result in any such adverse change, in each case to an extent which is material in the context of the Wider Southern Vectis Group taken as a whole; 7.3 no contingent or material liability having arisen which might reasonably be considered to be likely to materially and adversely affect any member of the Wider Southern Vectis Group and which is or might reasonably be expected to be material in the context of the Wider Southern Vectis Group taken as a whole; 7.4 no litigation, arbitration proceedings, prosecution or other legal proceedings having been threatened, announced, instituted by or against or remaining outstanding against any member of the Wider Southern Vectis Group or to which any member of the Wider Southern Vectis Group is or is reasonably likely to become a party (whether as claimant or defendant or otherwise), no investigation by any Relevant Authority against or in respect of any member of the Wider Southern Vectis Group having been threatened, announced, instituted or remaining outstanding by, against or in respect of any member of the Wider Southern Vectis Group, which in any such case might reasonably be expected to adversely affect any member of the Wider Southern Vectis Group to an extent which is material in the context of the Wider Southern Vectis Group taken as a whole; 8. Go-Ahead not having discovered (after the date of this Announcement and prior to the Offer becoming unconditional in all respects) that:- 8.1 any financial, business or other information concerning Southern Vectis or the Wider Southern Vectis Group publicly disclosed at any time by any member of the Wider Southern Vectis Group is misleading or contains a misrepresentation of fact or omits to state a fact necessary to make the information contained therein not misleading and which in any such case is or might reasonably be expected to be material in the context of the Wider Southern Vectis Group taken as a whole; 8.2 any partnership or company or other entity in which any member of the Wider Southern Vectis Group has a significant economic interest and which is not a subsidiary of Southern Vectis is subject to any liability, contingent or otherwise, which is not disclosed in the Annual Report and Accounts of Southern Vectis for the year ended 30 April 2004, or the Southern Vectis Interims, and which is material in the context of the Wider Southern Vectis Group taken as a whole; 8.3 any past or present member of the Wider Southern Vectis Group has not complied with all applicable laws, legislation or regulations of any jurisdiction with regard to any environmental matter (including any matters relating to storage, disposal, discharge, spillage, leak or emission of any waste or hazardous substance or any substance likely to impair the environment or harm human health) which non-compliance is in Go-Ahead's opinion considered reasonably likely to give rise to any liability or cost (whether actual or contingent) on the part of any member of the Wider Southern Vectis Group and which is or might reasonably be expected to be material in the context of the Wider Southern Vectis Group taken as a whole; 8.4 either:- 8.4.1 there has been a disposal, spillage or leak of waste or hazardous substance or any substance likely to impair the environment or harm human health on; or 8.4.2 there has been an emission or discharge of any waste or hazardous substance or any substance likely to impair the environment or harm human health from; any land or other asset now or previously owned or occupied by any past or present member of the Wider Southern Vectis Group, which would be likely to give rise to any liability (whether actual or contingent) on the part of any member of the Wider Southern Vectis Group and which is or might reasonably be expected to be material in the context of the Wider Southern Vectis Group taken as whole; 8.5 there is, or is reasonably likely to be, any liability (whether actual or contingent) which is material in the context of the Southern Vectis Group to make good, repair, re-instate or clean up any property now or previously owned or occupied by any past or present member of the Wider Southern Vectis Group under any environmental legislation, regulation,Related Shares:
GOG.L