1st Sep 2005 07:02
Trinity Mirror PLC01 September 2005 For immediate release 1 September 2005 NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE UNITED STATES OFAMERICA, CANADA, AUSTRALIA OR JAPAN Trinity Mirror plc Recommended Cash Offer for the hotgroup plc Summary • The boards of Trinity Mirror plc ("Trinity Mirror") and thehotgroup plc ("hotgroup" or "the Company") are pleased to announce that theyhave reached agreement on the terms of a recommended cash offer, to be made byUBS Investment Bank on behalf of Trinity Mirror Acquisitions, for the entireissued and to be issued share capital of hotgroup. hotgroup is atechnology-driven recruitment company consisting of two distinct businesses: anonline recruitment division and a traditional recruitment consultancy division.hotgroup has grown principally through acquisitions over the last five years, aswell as organically • The Offer will be 20.25 pence per hotgroup Share payable in cashwhich values the issued share capital of hotgroup at approximately £50.5 million • The Offer represents a premium of: - 30.2% over the average Closing Price of 15.55 pence per hotgroup Sharefor the 12 month period prior to 21 June 2005, the last business day prior tothe date hotgroup announced it had received a preliminary expression of interestin relation to an offer; - 72.3% over the Closing Price of 11.75 pence per hotgroup Share on 21June 2005; and - 3.8% over the Closing Price of 19.50 pence per hotgroup Share on 31August 2005, the last business day prior to the date of this announcement • The Directors of Trinity Mirror believe that the acquisitionwill be beneficial to its shareholders. It continues Trinity Mirror's recentstrategy of pursuing carefully selected acquisitions to deepen and strengthenTrinity Mirror's presence in key classified markets. Furthermore, it willincrease revenue diversification across recruitment services, online and print • Trinity Mirror has received irrevocable undertakings to acceptthe Offer from the Directors of the Company and from certain institutionalshareholders in respect of a total of 72,361,155 hotgroup Shares, representingapproximately 29.0% of the Company's issued share capital Commenting on the Offer, Tony Reeves, Chairman and Chief Executive of hotgroupsaid today: "We are delighted that the hotgroup will become a part of Trinity Mirror. Thecash offer from Trinity Mirror represents an opportunity for shareholders tobenefit from a significant premium to the price prior to the announcement thatwe had received an approach. Assuming completion of the Offer, the hotgroup willbecome an integral part of Trinity Mirror and will benefit from the enhancedfinancial strength to continue developing the business." Commenting on the Offer, Sly Bailey, Chief Executive of Trinity Mirror saidtoday: "We are delighted to have reached agreement with the Board of the hotgroup. Wesee exciting opportunities for the management and continued development of thehotgroup alongside our existing recruitment advertising businesses and theacquisition is consistent with our strategy of growing Trinity Mirror's coreclassified franchises both on- and off-line." This summary should be read in conjunction with the full text of the followingannouncement. Enquiries: Trinity MirrorSly Bailey +44 (0) 20 7293 3000Vijay Vaghela +44 (0) 20 7293 3000 UBS Investment Bank (financial adviser to Trinity Mirror)Adam Joy +44 (0) 20 7567 8000Simon Warshaw +44 (0) 20 7567 8000 hotgroupTony Reeves +44 (0) 870 202 0121Steve Wright +44 (0) 870 202 0121 Strand Partners Limited (financial adviser to hotgroup)Simon Raggett +44 (0) 20 7409 3494 The following announcement contains definitions of certain expressions used inthis summary. UBS Investment Bank is acting exclusively for Trinity Mirror and for no one elsein relation to the Offer and will not be responsible to anyone other thanTrinity Mirror for providing the protections afforded to clients of UBSInvestment Bank or for giving advice in relation to the Offer or any othermatter referred to in this announcement. Strand Partners, which is authorised and regulated in the United Kingdom by theFinancial Services Authority for designated investment business, is actingexclusively for hotgroup and for no one else in relation to the Offer and willnot be responsible to anyone other than hotgroup for providing the protectionsafforded to clients of Strand Partners or for giving advice in relation to theOffer or any other matter referred to in this announcement. The distribution of this announcement in jurisdictions other than the UK may berestricted by law and therefore any persons who are subject to the laws of anyjurisdiction other than the UK should inform themselves about, and observe, anyapplicable requirements. This announcement has been prepared for the purpose ofcomplying with English law and the City Code and the information disclosed maynot be the same as that which would have been disclosed if this announcement hadbeen prepared in accordance with the laws of jurisdictions outside the UK. The Offer is not being made, and will not be made, directly or indirectly, in orinto, or by the use of the mails or by any means or instrumentality (including,without limitation, telephonically or electronically) of interstate or foreigncommerce or by any facilities of a national securities exchange of, the UnitedStates of America, Canada, Australia or Japan and the Offer will not be capableof acceptance by any such use, means, instrumentality or facility or from withinthose jurisdictions. Accordingly, copies of this announcement are not being, andmust not be, mailed, transmitted or otherwise forwarded, distributed or sent, inwhole or in part, in, into or from the United States of America, Canada,Australia or Japan. Custodians, nominees and trustees should observe theserestrictions and should not send or distribute this announcement in, into orfrom the United States of America, Canada, Australia or Japan. The Trinity Mirror Directors and the Trinity Mirror Acquisitions Directorsaccept responsibility for the information contained in this announcement, otherthan that relating to hotgroup, the hotgroup Group, the hotgroup Directors andmembers of their immediate families, related trusts and persons connected withthem (within the meaning of Section 346 of the Companies Act) and informationrelating to the recommendation of the Offer. To the best of the knowledge andbelief of the Trinity Mirror Directors and the Trinity Mirror AcquisitionsDirectors (who have taken all reasonable care to ensure that such is the case),the information contained in this announcement for which they are responsible isin accordance with the facts and does not omit anything likely to affect theimport of such information. The hotgroup Directors accept responsibility for the information contained inthis announcement relating to hotgroup, the hotgroup Group, the hotgroupDirectors and members of their immediate families, related trusts and personsconnected with them (within the meaning of Section 346 of the Companies Act) andinformation relating to the recommendation of the Offer. To the best of theknowledge and belief of the hotgroup Directors (who have taken all reasonablecare to ensure that such is the case), the information contained in thisannouncement for which they are responsible is in accordance with the facts anddoes not omit anything likely to affect the import of such information. This announcement may contain "forward-looking statements" concerning thehotgroup Group and the Trinity Mirror Group. Generally, the words "anticipate","believe", "estimate", "expect", "forecast", "intend", "may", "plan", "project","should" and "will" or similar expressions identify forward-looking statements.Such statements reflect the relevant company's current views with respect tofuture events and are subject to risks and uncertainties that could cause theactual results to differ materially from those expressed in the forward-lookingstatements. Many of these risks and uncertainties relate to factors that arebeyond the companies' abilities to control or estimate precisely, such aschanges in general economic and business conditions, changes in currencyexchange rates and interest rates, lack of acceptance of new exchange rates andinterest rates, introduction of competing products or services, lack ofacceptance of new products or services, changes in business strategy and thebehaviour of other market participants and therefore undue reliance should notbe placed on such statements. Neither hotgroup nor Trinity Mirror intends orassumes any obligation to update these forward-looking statements. 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 formal or informal) to acquire or control relevantsecurities of hotgroup, owns or controls, or becomes the owner or controller,directly or indirectly, of one per cent. or more of any class of securities ofhotgroup is required to notify a Regulatory Information Service and the Panel,by not later than 12.00 noon (London time) on the London business day followingthe date of the relevant transaction, of dealings in such securities of thatcompany (or in any option in respect of, or derivative referenced to, any suchsecurities) during the period to the date on which the Offer becomes or isdeclared unconditional as to acceptances or lapses or is otherwise withdrawn. Under the provisions of Rule 8.1 of the City Code, all dealings in relevantsecurities of hotgroup by Trinity Mirror or hotgroup, or by any of theirrespective "associates" (within the meaning of the City Code), must also bedisclosed. 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 (0) 20 7638 0129; fax number +44 (0)20 7236 7013. This announcement does not constitute an offer to sell or the solicitation of anoffer to subscribe for or buy any securities, nor shall there be any sale,issuance or transfer of the securities referred to in this announcement in anyjurisdiction in contravention of applicable law. For immediate release1 September 2005 NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE UNITED STATES OFAMERICA, CANADA, AUSTRALIA OR JAPAN Trinity Mirror plc Recommended Cash Offer for the hotgroup plc Introduction The boards of Trinity Mirror plc ("Trinity Mirror") and the hotgroup plc ("hotgroup" or "the Company") are pleased to announce that they have reachedagreement on the terms of a recommended cash offer, to be made by UBS InvestmentBank on behalf of Trinity Mirror Acquisitions, for the entire issued and to beissued share capital of hotgroup. The Offer On behalf of Trinity Mirror Acquisitions, UBS Investment Bank will offer toacquire, on the terms and subject to the conditions set out in Appendix I tothis announcement and to be set out or referred to in the Offer Document and theForm of Acceptance, the entire issued and to be issued share capital ofhotgroup, on the following basis: for each hotgroup Share 20.25 pence in cash The Offer values the issued share capital of the Company at approximately £50.5million and represents a premium of: - 30.2% over the average Closing Price of 15.55 pence per hotgroup Sharefor the 12 month period prior to 21 June 2005, the last business day prior tothe date hotgroup announced it had received a preliminary expression of interestin relation to an offer; - 72.3% over the Closing Price of 11.75 pence per hotgroup Share on 21June 2005; and - 3.8% over the Closing Price of 19.50 pence per hotgroup Share on 31August 2005, the last business day prior to the date of this announcement The sources and bases of certain financial information contained in thisannouncement are set out in Appendix III. The hotgroup Shares will be acquired by Trinity Mirror Acquisitions free fromall liens, charges, encumbrances, rights of pre-emption and any other thirdparty rights of any nature whatsoever and together with all rights attachingthereto including the right to receive in full all dividends and otherdistributions declared, paid or made after the date of this announcement. Background to and reasons for the Offer Background to the Offer Trinity Mirror is the UK's largest newspaper publisher, with a portfolio of over250 newspaper titles and over 100 online, magazine and other media brands. Trinity Mirror's stated strategy is to 'stabilise, revitalise and grow' businessperformance. Trinity Mirror continues to focus on improving businessefficiency, through a combination of tighter cost management and a more focussedpublishing approach across the Group. This ongoing process has deliveredimproved performance from individual brands and businesses, while increasing thevalue of the Group by capturing the full benefits of scale, sharing bestpractice and ensuring that the right levels of focus, performance measures andincentives are in place. In addition, Trinity Mirror is seeking new opportunities for growth within andbeyond its existing operations, maintaining the key objective of enhancingshareholder value. This pursuit of growth has been implemented through acombination of investment in core businesses, launches of new newspaper titles,websites and other publications, and more recently through carefully selectedacquisitions. A particular focus of this activity has been to deepen andstrengthen Trinity Mirror's presence in key classified markets in general and inrecruitment in particular. The Directors of Trinity Mirror believe that theacquisition of hotgroup is a logical step in continuing this strategy. Reasons for the Offer The Directors of Trinity Mirror believe that the acquisition will be beneficialto its shareholders, customers and employees. In particular, shareholders in Trinity Mirror will benefit from the valueintended to be created by: • Deepening penetration in existing markets and accelerating TrinityMirror's growth in new markets and channels for classified advertising andservices hotgroup represents an opportunity for Trinity Mirror to further enhance thescale and scope of its recruitment classified advertising offering. Thecombination of hotgroup's market leading online recruitment network and thescale and scope of the Trinity Mirror newspaper portfolio, will strengthenTrinity Mirror's position in the online recruiting market place. Furthermore,the acquisition of hotgroup, with its combination of both online and 'traditional' recruitment assets, will offer Trinity Mirror the opportunity toselectively broaden and deepen the services it offers to both recruitmentadvertisers and job seekers alike. The Directors of Trinity Mirror also believe that with hotgroup as a part of itsportfolio of operations, Trinity Mirror will be better placed to exploit theopportunities in classified advertising being driven by the increasing use oftechnology in general and the growth of the internet in particular. • Increasing revenue diversification across online and print According to the Advertising Association, the UK's online recruitmentadvertising market continues to experience strong growth. It is currently worth£119m (in 2004) and is forecast to grow by over 100% to c. £269m by 2006. Onlinerecruitment advertising revenues grew by 53% in 2004 over 2003. TrinityMirror's management believes that online advertising now accounts forapproximately 9% of the total recruitment advertising market in the UK. As one of the largest online recruitment businesses in the UK, hotgrouprepresents a significant opportunity for Trinity Mirror to accelerate the growthof its online recruitment advertising activities. The combination of a strongportfolio of online properties within hotgroup and Trinity Mirror's localnewspaper expertise and national newspaper portfolio will deliver a more diversemix of revenues than is currently the case. This diversification is furtherenhanced by the opportunity to consider where and how to develop hotgroup'sspecialist traditional recruitment businesses. • Further development of Trinity Mirror's stated strategy Trinity Mirror has stated that it intends to seek growth opportunities beyondits traditional print businesses, and hotgroup represents a good opportunity toachieve a further step forward in the development of Trinity Mirror's strategyto serve the recruitment market. In combination with the development of Trinity Mirror's directories businesses,its continued involvement in the fish4 consortium, its launch so far in 2005 of17 new magazines, newspapers and online services, and its development of theonline aspects of its existing brands, the proposed acquisition demonstrates theTrinity Mirror Group's commitment to developing a diversified portfolio ofclassified businesses with a focus on developing the significant onlinepotential within these sectors. Undertakings to accept the Offer Irrevocable undertakings to accept (or procure the acceptance of) the Offer havebeen received from hotgroup Directors in respect of an aggregate of 23,807,340hotgroup Shares (being their entire beneficial holdings and those of certainconnected persons) as set out in the table below. These undertakings remainbinding unless the Offer lapses or is withdrawn. Number of Percentage of hotgroup Shares issued share capital %i) Directors of hotgroupAnthony Reeves 8,557,468 3.43Harvey Sinclair 3,025,633 1.21Steve Wright 403,162 0.16Don Hanson 11,505,680 4.61John Sanderson 315,397 0.13Total 23,807,340 9.54 Certain other hotgroup Shareholders have given irrevocable undertakings toaccept (or procure acceptance of) the Offer in respect of the hotgroup Sharesset out in the table below. These undertakings will cease to be binding if athird party announces a firm intention to make an offer under Rule 2.5 of theCity Code for the whole of the issued share capital of hotgroup (other than anysuch shares which at the date of the relevant offer are already held by thethird party offeror) under which the amount or value of the considerationoffered for each ordinary share in hotgroup is in the reasonable opinion of suchshareholders not less than 10% greater than the value per share offered pursuantto the Offer, and Trinity Mirror Acquisitions has not within 7 days of the dateof posting of such competing offer announced a revised offer which exceeds thevalue of such competing offer. The obligations in such undertakings will also lapse and cease to have effect:(a) if the Offer Document has not been posted within 28 days of the date of thisannouncement or within such longer period as Trinity Mirror Acquisitions andhotgroup may, with the consent of the Panel, determine; or (b) if the Offerlapses or is withdrawn without becoming unconditional in all respects; or (c) onthe expiry of 14 days from the date on which the Offer becomes unconditional orsuch longer period, up to a maximum of 2 months, specified in the OfferDocument, over which the Offer remains open for acceptance; or (d) if suchshareholders are required to withdraw such undertakings by any court orcompetent regulator; or (e) if there is a material change in the informationrelating to the Offer upon which the decision to provide such undertaking wasbased and such shareholder deems it necessary to revoke the undertaking as aresult thereof. ii) NameMorley Fund Management 24,327,796 9.75New Star Asset Management 24,226,019 9.71Sub-total 48,553,815 19.46 Total 72,361,155 29.00 In total therefore, irrevocable undertakings to accept (or procure theacceptance of) the Offer have been received in respect of an aggregate of72,361,155 hotgroup Shares, representing approximately 29.0% of the Company'sissued share capital. In addition, each of the hotgroup Directors has granted Trinity MirrorAcquisitions an option to acquire, at the Offer Price, the number of hotgroupShares set out opposite his name above. Each option is exercisable by TrinityMirror Acquisitions until the earlier of (i) the date on which the Offer becomesor is declared wholly unconditional and (ii) assuming the Offer is made, 3business days after the date of withdrawal or lapsing of the Offer. Information on Trinity Mirror Trinity Mirror was created in 1999 following the merger of Trinity PLC andMirror Group PLC. It is the UK's largest newspaper publisher, with a portfolioof over 250 newspaper titles and over 100 online, magazine and other mediabrands. It operates across four principal divisions: The Nationals division publishes five major daily and Sunday newspapers: acrossthe UK the Daily Mirror, the Sunday Mirror and the People; in Scotland the DailyRecord and the Sunday Mail. Over the course of a week, nearly a quarter of theUK adult population reads at least one of Trinity Mirror's national newspapers. The Regionals division, comprising nine operating companies in six regions,publishes morning, evening and Sunday newspapers, plus a host of free andpaid-for weekly titles. These newspapers are strong, often market leading brandswhich sit at the heart of the communities they serve. The portfolio includesthree of the top ten regional evening papers and three of the top ten Sundays. The Sports division comprises four brand-leading sports newspaper titles, led bythe Racing Post, and complemented by leading websites such as Racingpost.co.uk.These titles are the leading suppliers of comprehensive sports bettinginformation, statistics and impartial advice, particularly in the field ofhorseracing, to an expanding audience of sports betting enthusiasts. The Magazines and Exhibitions division comprises a diverse portfolio ofspecialist business-to-consumer and business-to-business magazines andexhibitions. These provide readers, advertisers, exhibitors and attendees withinformation on and insight into their respective markets. Embedded in the above divisions, Trinity Mirror publishes a growing portfolio ofonline brands generating increasingly healthy revenue streams. This portfolioincludes recently relaunched websites for the national newspapers, the icNetwork(a network of regional websites which provide local information on currentaffairs, entertainment, business, property, weather and sport) and the company'sinvestment in fish4. And over the last year Trinity Mirror has launched severalregional classified recruitment advertising sites to complement both its printbrands and fish4. Trinity Mirror has also recently acquired Smartnewhomes.com,the UK's leading website serving new home builders, and GAAPweb.com, the leadingonline recruitment site for financial jobs. Trinity Mirror is listed on the London Stock Exchange (symbol TNI) and isheadquartered at Canary Wharf in London. The Group employs approximately 11,000people in centres across the UK. In the 53 weeks to 2nd January 2005, Trinity Mirror generated turnover of£1,141.7m (up 4.3% on 2003) (2003: £1,095.1m) and Group operating profit beforeexceptional items of £253.1m (up 19.1% on 2003) (2003: £212.5m). Earnings pershare before exceptional items was 50.9p (up 23.8% on 2003) (2003: 41.1p). At2nd January 2005 the Group had net assets of £1,143.7m (2003: £1,025.9m). Information on hotgroup hotgroup is a technology-driven recruitment company consisting of two distinctbusinesses: an online recruitment division and a traditional recruitmentconsultancy division. The group has grown principally through acquisitions overthe last five years, as well as organically. Since February 2003, hotgroup has completed 7 acquisitions to enhance its onlinebusiness and 6 in the traditional recruitment sector, enabling it to expand theexisting business franchises in high growth markets and allowing furtherexploitation of synergies between the two divisions. The group's online division is now believed to be the second largest onlinerecruitment business in the UK in terms of traffic. The audit completed by ABCein May 2005 indicated traffic across the whole network in excess of 1.14 millionmonthly unique users. Management data suggests that monthly traffic averagesover one million unique users a month and that in excess of 250,000 applicationsare served to employers every month. In addition, the online network currentlyhas 2.23 million registered users in its database, in excess of 1 millionsearchable candidate CVs and advertises typically 30,000-40,000 jobs. Itsclient base includes T-Mobile, McDonald's, Natwest, Pizza Hut, B&Q, Adecco andBlue Arrow. The division is split into two separate propositions, workthing.comand hotonline.com. Workthing is the only jobsite in the UK to advertise jobsexclusively for employers direct, whilst hotonline focuses on serving therecruitment consultancy market with the UK's leading network of specialistjobsites. The group's traditional division comprises six traditional recruitmentconsultancy businesses, each of which operates under its own brand: ParksideRecruitment, ITN Teachers, The Buzz, Mark Education and ASA. They operate in theFinance, Legal, Education, Pharmaceutical, Retail, Leisure, Commercial and Salessectors. hotgroup is listed on London's Alternative Investment Market (AIM) under thesymbol HOT. It is headquartered in London and employs approximately 266 people. In the 16 months to 31st December 2004, hotgroup generated £43.1m of revenues,of which 45.2% came from continuing operations, and 54.8% from acquisitions and£2.7m of profit before goodwill amortisation, interest, exceptionals and tax.Adjusted earnings per share before goodwill amortisation and exceptional itemswas 1.27p. Financing The consideration payable under the Offer will be financed through TrinityMirror's existing cash resources. Management and employees of hotgroup Trinity Mirror attaches great importance to the skills and experience of theexisting management and employees of hotgroup. Trinity Mirror has confirmed that the existing employment rights, includingpension rights, of all management and employees of hotgroup will be safeguardedin the event that the Offer becomes or is declared unconditional in allrespects. The non-executive directors of hotgroup intend to resign from the hotgroup boardwhen the Offer becomes or is declared unconditional in all respects. On 17 March 2005 the Remuneration Committee of hotgroup approved a new executiveincentive scheme comprised of a new long term incentive plan (the "New LTIP")and a realisation top up pool (the "Realisation Top Up Pool"). The New LTIPprovides for awards of shares to the executive directors of hotgroup based onearnings per share growth targets. No awards have been granted under the NewLTIP. The Realisation Top Up Pool provides for an additional incentive that, in theevent of a change of control, shall be payable to the executive directors to theextent that the value of options granted under hotgroup's long term incentivescheme and existing options which would vest on a change of control are lessthan certain specified amounts. The aggregate amount payable under thesearrangements varies on a sliding scale with the price achieved on a change ofcontrol with higher amounts payable at higher achieved prices and subject to aminimum of 18p per hotgroup Share. At the offer price of 20.25p and subject tothe Offer becoming wholly unconditional, an aggregate of £1,423,034 is payablein cash to the executive directors under the Realisation Top Up Pool: TonyReeves - £457,844; Harvey Sinclair - £343,845; Steve Wright - £343,845; andChris Herrmannsen - £277,500. A further £70,000 which has yet to be allocatedmay also become payable to the executive directors at the discretion of thehotgroup Remuneration Committee. Inducement fee hotgroup has entered into an inducement fee agreement with Trinity MirrorAcquisitions under which hotgroup has agreed to pay Trinity Mirror Acquisitionsa fee of £514,275 in any of the following circumstances: (i) any person announces an intention (whether or not subject to apre-condition) to implement or make an Alternative Proposal which subsequentlybecomes or is declared unconditional in all respects or is otherwise completedor implemented; or (ii) the unanimous recommendation of the board of hotgroup inrespect of the Offer is withdrawn or detrimentally modified and consequentlysubsequently the Offer lapses or is withdrawn in accordance with its terms. The Company has undertaken to notify Trinity Mirror Acquisitions if it receivesany approach. If a third party announces any offer (as defined in the City Code) for theCompany, and the value of the consideration under such third party offer exceeds(in the reasonable opinion of UBS) the value of the Offer, the Company hasundertaken that, if Trinity Mirror Acquisitions announces, within 48 hours ofthe announcement of such third party offer, a revised cash offer at a priceequal to or exceeding (in the reasonable opinion of the hotgroup Directors,having been so advised by Strand Partners) that of such third party offer, thehotgroup Directors will continue to recommend the Offer (as revised) if theterms of such revised Offer are more favourable. hotgroup Share Option Schemes, hotgroup Warrants and hotgroup Convertible Notes The Offer will extend to any hotgroup Shares which are unconditionally allottedor issued prior to the date on which the Offer closes (or such earlier date asTrinity Mirror Acquisitions may, subject to the City Code, determine) includingany such shares allotted or issued pursuant to the exercise of options under thehotgroup Share Option Schemes or the exercise of subscription rights underhotgroup Warrants. If the Offer becomes or is declared unconditional in allrespects, Trinity Mirror Acquisitions intends to make appropriate proposals toholders of options granted under the hotgroup Share Option Schemes to the extentthat such options have not been exercised and to the holders of subscriptionrights under the hotgroup Warrants to the extent such subscription rights havenot been exercised. Trinity Mirror Acquisitions has entered into an agreement with the holder of the£4,000,000 hotgroup Convertible Notes (being an entity connected with Mr J.D.Hanson, one of the hotgroup Directors) under which Trinity Mirror Acquisitionshas agreed to procure repayment of the hotgroup Convertible Notes in cash at par(together with accrued interest) within five days of the Offer becoming or beingdeclared wholly unconditional. The Noteholder has agreed that it will not,prior to the closing or lapsing of the Offer or its withdrawal, sell, transfer,encumber, charge, pledge, grant any option or other right over or otherwisedispose of or deal with (directly or indirectly and whether beneficially,legally or otherwise) any of the hotgroup Convertible Notes, or enter into anyagreement or arrangement or permit any agreement or arrangement to be enteredinto or incur or allow to arise any obligation (conditional or otherwise) to doany of such acts. De-listing and compulsory acquisition Subject to the Offer becoming or being declared unconditional in all respectsand subject to any applicable requirements of the London Stock Exchange, TrinityMirror Acquisitions intends to procure that hotgroup applies to the London StockExchange for the cancellation of the admission to trading of hotgroup Shares onAIM and that hotgroup re-registers as a private company under the Act. The AIMRules state that, unless the London Stock Exchange agrees otherwise, thecancellation is conditional upon the consent of not less than 75% of votes castby hotgroup Shareholders given in a general meeting. Trinity MirrorAcquisitions intends to procure that hotgroup requests that the London StockExchange waives the requirement to seek the consent of the hotgroupShareholders. The guidance notes to the AIM Rules state that the London StockExchange might agree that shareholder consent is not required where an offerorhas received valid acceptances in excess of 75% of each class of shares admittedto trading on AIM. Any such cancellation is anticipated to take effect noearlier than 20 business days after the Offer becomes or is declaredunconditional in all respects. Any such cancellation is likely to reducesignificantly the liquidity and marketability of any hotgroup Shares notassented to the Offer. Upon Trinity Mirror Acquisitions receiving acceptances under the Offer inrespect of 90% or more of the hotgroup Shares to which the Offer relates,Trinity Mirror Acquisitions intends to exercise its right pursuant to theprovisions of sections 428 to 430(F) of CA 1985 to acquire compulsorily anyoutstanding hotgroup Shares not acquired or agreed to be acquired by TrinityMirror Acquisitions pursuant to the Offer. General The conditions of the Offer are set out in Appendix I to this announcement. Theterms of the Offer will be set out in the formal Offer Document and the Form ofAcceptance. The Offer Document, together with a Form of Acceptance, will be despatched tohotgroup Shareholders (other than to hotgroup Shareholders with addresses in theUnited States of America, Canada, Australia or Japan) and, for information only,to hotgroup Share Option Holders and holders of outstanding hotgroup Warrantsand hotgroup Convertible Notes as soon as practicable. Save as summarised under "Undertakings to accept the Offer" above and theagreement relating to the hotgroup Convertible Notes summarised under "hotgroupShare Option Schemes, hotgroup Warrants and hotgroup Convertible Notes" above,neither any member of the Trinity Mirror Group nor, so far as Trinity Mirror isaware, any person deemed to be acting in concert with any member of the TrinityMirror Group for the purposes of the Offer owns or controls any hotgroup Sharesor any securities convertible or exchangeable into hotgroup Shares or any rightsto subscribe for, or options (including traded options) in respect of, orderivatives referenced to securities of hotgroup ("relevant hotgroupsecurities") nor does any such person have any arrangement in relation torelevant hotgroup securities. For these purposes, "arrangement" includes anindemnity or option arrangement, any agreement or understanding, formal orinformal, of whatever nature, relating to hotgroup Shares which may be aninducement to deal or refrain from dealing in such shares. In the interests ofsecrecy prior to this announcement, Trinity Mirror has not made any enquiries inthis respect of certain parties who may be deemed by the Panel to be acting inconcert with it for the purposes of the Offer. Enquiries of such parties willbe made as soon as practicable following the date of this announcement and anymaterial disclosure in respect of such parties will be included in the OfferDocument. Recommendation The hotgroup Directors, who have been so advised by Strand Partners, considerthe terms of the Offer to be fair and reasonable and in the best interests ofhotgroup Shareholders. In providing its advice Strand Partners has taken intoaccount the commercial assessments of the hotgroup Directors. Accordingly, the hotgroup Directors unanimously recommend that hotgroupShareholders accept the Offer, as they have irrevocably undertaken to do inrespect of their entire beneficial shareholdings amounting, in aggregate, to23,807,340 hotgroup Shares, representing approximately 9.54% of hotgroup'sexisting issued share capital. As at 7.00am (London time) on 1 September 2005, hotgroup had 249,510,509ordinary shares of 10 pence in issue (ISIN Number GB0007281537). Enquiries: Trinity MirrorSly Bailey +44 (0) 20 7293 3000Vijay Vaghela +44 (0) 20 7293 3000 UBS Investment Bank (financial adviser to Trinity Mirror)Adam Joy +44 (0) 20 7567 8000Simon Warshaw +44 (0) 20 7567 8000 hotgroupTony Reeves +44 (0) 870 202 0121Steve Wright +44 (0) 870 202 0121 Strand Partners Limited (financial adviser to hotgroup)Simon Raggett +44 (0) 20 7409 3494 UBS Investment Bank is acting exclusively for Trinity Mirror and for no one elsein relation to the Offer and will not be responsible to anyone other thanTrinity Mirror for providing the protections afforded to clients of UBSInvestment Bank or for giving advice in relation to the Offer or any othermatter referred to in this announcement. Strand Partners, which is authorised and regulated in the United Kingdom by theFinancial Services Authority for designated investment business, is actingexclusively for hotgroup and for no one else in relation to the Offer and willnot be responsible to anyone other than hotgroup for providing the protectionsafforded to clients of Strand Partners or for giving advice in relation to theOffer or any other matter referred to in this announcement. The distribution of this announcement in jurisdictions other than the UK may berestricted by law and therefore any persons who are subject to the laws of anyjurisdiction other than the UK should inform themselves about, and observe, anyapplicable requirements. This announcement has been prepared for the purpose ofcomplying with English law and the City Code and the information disclosed maynot be the same as that which would have been disclosed if this announcement hadbeen prepared in accordance with the laws of jurisdictions outside the UK. The Offer is not being made, and will not be made, directly or indirectly, in orinto, or by the use of the mails or by any means or instrumentality (including,without limitation, telephonically or electronically) of interstate or foreigncommerce or by any facilities of a national securities exchange of, the UnitedStates of America, Canada, Australia or Japan and the Offer will not be capableof acceptance by any such use, means, instrumentality or facility or from withinthose jurisdictions. Accordingly, copies of this announcement are not being, andmust not be, mailed, transmitted or otherwise forwarded, distributed or sent, inwhole or in part, in, into or from the United States of America, Canada,Australia or Japan. Custodians, nominees and trustees should observe theserestrictions and should not send or distribute this announcement in, into orfrom the United States of America, Canada, Australia or Japan. The Trinity Mirror Directors and the Trinity Mirror Acquisitions Directorsaccept responsibility for the information contained in this announcement, otherthan that relating to hotgroup, the hotgroup Group, the hotgroup Directors andmembers of their immediate families, related trusts and persons connected withthem (within the meaning of Section 346 of the Companies Act) and informationrelating to the recommendation of the Offer. To the best of the knowledge andbelief of the Trinity Mirror Directors and the Trinity Mirror AcquisitionsDirectors (who have taken all reasonable care to ensure that such is the case),the information contained in this announcement for which they are responsible isin accordance with the facts and does not omit anything likely to affect theimport of such information. The hotgroup Directors accept responsibility for the information contained inthis announcement relating to hotgroup, the hotgroup Group, the hotgroupDirectors and members of their immediate families, related trusts and personsconnected with them (within the meaning of Section 346 of the Companies Act) andinformation relating to the recommendation of the Offer. To the best of theknowledge and belief of the hotgroup Directors (who have taken all reasonablecare to ensure that such is the case), the information contained in thisannouncement for which they are responsible is in accordance with the facts anddoes not omit anything likely to affect the import of such information. This announcement may contain "forward-looking statements" concerning thehotgroup Group and the Trinity Mirror Group. Generally, the words "anticipate","believe", "estimate", "expect", "forecast", "intend", "may", "plan", "project","should" and "will" or similar expressions identify forward-looking statements.Such statements reflect the relevant company's current views with respect tofuture events and are subject to risks and uncertainties that could cause theactual results to differ materially from those expressed in the forward-lookingstatements. Many of these risks and uncertainties relate to factors that arebeyond the companies' abilities to control or estimate precisely, such aschanges in general economic and business conditions, changes in currencyexchange rates and interest rates, lack of acceptance of new exchange rates andinterest rates, introduction of competing products or services, lack ofacceptance of new products or services, changes in business strategy and thebehaviour of other market participants and therefore undue reliance should notbe placed on such statements. Neither hotgroup nor Trinity Mirror intends orassumes any obligation to update these forward-looking statements. 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 formal or informal) to acquire or control relevantsecurities of hotgroup, owns or controls, or becomes the owner or controller,directly or indirectly, of one per cent. or more of any class of securities ofhotgroup is required to notify a Regulatory Information Service and the Panel,by not later than 12.00 noon (London time) on the London business day followingthe date of the relevant transaction, of dealings in such securities of thatcompany (or in any option in respect of, or derivative referenced to, any suchsecurities) during the period to the date on which the Offer becomes or isdeclared unconditional as to acceptances or lapses or is otherwise withdrawn. Under the provisions of Rule 8.1 of the City Code, all dealings in relevantsecurities of hotgroup by Trinity Mirror or hotgroup, or by any of theirrespective "associates" (within the meaning of the City Code), must also bedisclosed. 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 (0) 20 7638 0129; fax number +44 (0)20 7236 7013. This announcement does not constitute an offer to sell or the solicitation of anoffer to subscribe for or buy any securities, nor shall there be any sale,issuance or transfer of the securities referred to in this announcement in anyjurisdiction in contravention of applicable law. APPENDIX I Conditions and Further Terms of the Offer 1 The Offer will be subject to the following conditions: (a) valid acceptances of the Offer being received (and not, where permitted,withdrawn) by 3.00 p.m. on the First Closing Date (or such later time(s) and/ordate(s) as Trinity Mirror Acquisitions may, subject to the rules of the Code,decide) in respect of not less than 90% (or such lesser percentage as TrinityMirror Acquisitions may decide) of the hotgroup Shares to which the Offerrelates, provided that this condition shall not be satisfied unless TrinityMirror Acquisitions and/or its wholly-owned subsidiaries shall have acquired oragreed to acquire, pursuant to the Offer or otherwise, hotgroup Shares carryingin aggregate more than 50% of the voting rights then exercisable at a generalmeeting of hotgroup including for this purpose (to the extent, if any, requiredby the Panel) any such voting rights attached to any hotgroup Sharesunconditionally allotted or issued before the Offer becomes or is declaredunconditional as to acceptances, whether pursuant to the exercise of conversionor subscription rights or otherwise and for the purposes of this condition: (i) the expression "hotgroup Shares to which the Offer relates" shallbe construed in accordance with sections 428 to 430F of CA 1985; (ii) hotgroup Shares which have been unconditionally allotted but notissued shall be deemed to carry the voting rights which they will carry onissue; and (iii) valid acceptances shall be deemed to have been received in respectof hotgroup Shares which are treated for the purposes of section 429(8) of CA1985 as having been acquired or contracted to be acquired by Trinity MirrorAcquisitions by virtue of acceptances of the Offer; (b) it being indicated, in terms reasonably satisfactory to Trinity MirrorAcquisitions, that neither the proposed acquisition of hotgroup by TrinityMirror Acquisitions nor any matter arising therefrom will be referred to the UKCompetition Commission; (c) no Third Party having intervened or having made, proposed or enacted anystatute, regulation, order or decision or taken any other step which would ormight reasonably be expected to: (i) make the Offer or its implementation or the acquisition or proposedacquisition by Trinity Mirror Acquisitions of all or any hotgroup Shares, or theacquisition or proposed acquisition of control of hotgroup, by any member of theWider Trinity Mirror Group, void, illegal or unenforceable under the laws of anyrelevant jurisdiction, or otherwise, directly or indirectly, restrain, restrict,prohibit, challenge, delay, hinder or otherwise materially interfere with thesame, or impose additional material adverse conditions or obligations withrespect thereto, or otherwise require material amendment to the terms of theOffer or any such acquisition; (ii) require, prevent or delay the divestiture, or alter the terms envisagedfor any proposed divestiture, by any member of the Wider Trinity Mirror Group orby any member of the Wider hotgroup Group of all or any portion of theirrespective businesses, assets or properties or impose any limitation on theability of any of them to conduct their respective businesses or to own theirrespective assets or properties; (iii) impose any limitation on, or result in a delay in, the ability of anymember of the Wider Trinity Mirror Group, directly or indirectly, to acquire orto hold or exercise effectively all or any rights of ownership in respect ofshares or securities convertible into shares in any member of the Wider hotgroupGroup or to exercise management control over any such member in each case to anextent which is material in the context of the Wider hotgroup Group taken as awhole; (iv) otherwise adversely affect any or all of the businesses, assets, profitsor prospects of any member of the Wider Trinity Mirror Group or any member ofthe Wider hotgroup Group (including any action which would or might reasonablybe expected to adversely affect or prejudice any of the licences,authorisations, exemptions or consents of any member of the Wider Trinity MirrorGroup or of the Wider hotgroup Group) in each case to an extent which ismaterial in the context of the Wider hotgroup Group taken as a whole; (v) save pursuant to the Offer or Part XIIIA of CA 1985, require any memberof the Wider Trinity Mirror Group or the Wider hotgroup Group to acquire, oroffer to acquire, any shares or other securities (or the equivalent) in anymember of the Wider hotgroup Group or the Wider Trinity Mirror Group, suchacquisition being material in the context of the Wider hotgroup Group taken as awhole; (vi) require, prevent or delay a divestiture by any member of the WiderTrinity Mirror Group of any shares or other securities (or the equivalent) inhotgroup; (vii) materially limit the ability of any member of the Wider Trinity MirrorGroup or the Wider hotgroup Group to co-ordinate or integrate its business, orany part of it, with the business or any part of the business of any othermember of the Wider Trinity Mirror Group or of the Wider hotgroup Group; or (viii) result in any member of the Wider hotgroup Group or the Wider TrinityMirror Group ceasing to be able to carry on business under any name which itpresently does so, and all applicable waiting and other time periods during which any such ThirdParty is reasonably likely to take, institute, implement or threaten any action,proceeding, suit, investigation, enquiry or reference under the laws of anyrelevant jurisdiction or enact any such statute, regulation, order or decisionor take any step having expired, lapsed or been terminated; (d) all Authorisations which are deemed reasonably necessary or appropriateby Trinity Mirror Acquisitions for or in respect of the Offer or the proposedacquisition of all or any hotgroup Shares or other securities in, or control of,hotgroup by any member of the Wider Trinity Mirror Group having been obtained onterms and in a form reasonably satisfactory to Trinity Mirror Acquisitions fromall appropriate Third Parties or persons with whom any member of the Widerhotgroup Group has entered into contractual arrangements where the absence ofsuch Authorisations would have a materially adverse effect on the Wider TrinityMirror Group taken as a whole or the Wider hotgroup Group taken as a whole, asthe case may be, and all such Authorisations, together with all Authorisationsnecessary or appropriate to carry on the business of any member of the Widerhotgroup Group where such business is material in the context of the Widerhotgroup Group taken as a whole remaining in full force and effect and therebeing no indication of any intention to revoke, withdraw, suspend, restrict,withhold or modify or not to grant any of the same where the absence of suchAuthorisation would have a material adverse effect on the hotgroup Group or theWider Trinity Mirror Group taken as a whole; (e) all necessary filings or applications having been made in connectionwith the Offer, and all appropriate waiting periods (including extensionsthereof) in respect of the Offer or its implementation under any applicablelegislation or regulations in any relevant jurisdiction having expired, lapsedor been terminated (as appropriate) and all necessary statutory or regulatoryobligations in any relevant jurisdiction having been complied with in connectionwith the Offer or the acquisition by any member of the Wider Trinity MirrorGroup of any shares or other securities in, or control of, hotgroup; (f) save as (i) fairly disclosed in writing to Trinity Mirror or itsadvisers prior to 1 September 2005; or (ii) as otherwise publicly announced to aRegulatory Information Service by hotgroup prior to 1 September 2005, therebeing no provision of any agreement, authorisation, arrangement, licence, permitor other instrument to which any member of the Wider hotgroup Group is a partyor by or to which any such member or any of its assets may be bound, entitled orsubject, which in consequence of the Offer or the proposed acquisition of anyhotgroup Shares or because of a change in the control or management of hotgroupor any member of the Wider hotgroup Group, would or might reasonably be likelyto result, in a manner which would be material in the context of the Widerhotgroup Group taken as a whole, in: (i) any monies borrowed by or any other indebtedness (actual or contingent)of, or grant available to, any member of the Wider hotgroup Group, being orbecoming repayable or capable of being declared repayable immediately or earlierthan their or its stated maturity date or repayment date or the ability of anysuch member to borrow monies or incur any indebtedness being withdrawn,prohibited or inhibited or becoming capable of being withdrawn, prohibited orinhibited; (ii) any such agreement, authorisation, arrangement, licence, permit orother instrument or the rights, liabilities, obligations or interests of anymember of the Wider hotgroup Group thereunder being terminated or materiallyadversely modified or affected or any onerous obligation or liability arising orany material adverse action being taken or arising thereunder; (iii) any assets or interests of any member of the Wider hotgroup Groupbeing or falling to be disposed of or charged or ceasing to be available to anysuch member or any right arising under which any such asset or interest could berequired to be disposed of or charged otherwise than, in any such case, in theordinary course of business; (iv) the creation or enforcement of any mortgage, charge or other securityinterest over the whole or any part of the business, property or assets of anymember of the Wider hotgroup Group, or any such security (whether arising orhaving arisen) becoming enforceable or being enforced; (v) the interest or business of any such member of the Wider hotgroup Groupwith any person, company, firm or body (or any agreements relating to any suchinterest or business) being terminated, or materially adversely modified oraffected; (vi) the value of any member of the Wider hotgroup Group or its financial ortrading position or prospects being materially prejudiced or adversely affected; (vii) any member of the Wider hotgroup Group ceasing to be able to carry onbusiness under any name under which it presently does so; or (viii) the creation or assumption of any material liability, actual orcontingent, by any member of the Wider hotgroup Group, and no event having occurred which, under any provision of any agreement,authorisation, arrangement, licence, permit or other instrument to which anymember of the Wider hotgroup Group is a party or by or to which any such memberor any of its assets is bound, entitled or subject, would be reasonably likelyto result in any of the events referred to in sub-paragraph (i) to (viii) ofthis paragraph (h); (g) save as (i) fairly disclosed in writing to Trinity Mirror or itsadvisers prior to 1 September 2005; or (ii) as otherwise publicly announced to aRegulatory Information Service by hotgroup prior to 1 September 2005 no memberof the Wider hotgroup Group having, since 31 December 2004: (i) (save as between hotgroup and wholly-owned subsidiaries of hotgroup, orfor hotgroup Shares issued pursuant to the exercise of options granted under thehotgroup Share Option Schemes or the exercise of subscription or conversionrights under hotgroup Warrants or hotgroup Convertible Notes prior to 1September 2005), issued or agreed to issue additional shares of any class orsecurities convertible into or exchangeable for, shares of any class or rights,warrants or options to subscribe for, or acquire, any such shares or convertiblesecurities; (ii) (save for hotgroup Shares held in treasury and sold or transferredpursuant to the exercise of options granted under the hotgroup Share OptionSchemes prior to 1 September 2005) sold or transferred or agreed to sell ortransfer any hotgroup Shares held in treasury; (iii) recommended, declared, paid or made or proposed to recommend, declare,pay or make any bonus in respect of shares, dividend or other distributionwhether payable in cash or otherwise (other than to hotgroup or wholly-ownedsubsidiaries of hotgroup); (iv) save for transactions between members of the Wider hotgroup Group,merged with or demerged or acquired any body corporate, partnership or businessor acquired or disposed of or transferred, mortgaged or charged or created anysecurity interest over any assets or any rights, title or interest in any asset(including shares and trade investments) or announced any intention to proposeany merger, demerger, acquisition, disposal, transfer, mortgage, charge or thecreation of any security interest over the same which is material in the contextof the Wider hotgroup Group taken as a whole; (v) save as between hotgroup and its wholly-owned subsidiaries, made orannounced an intention to propose any change in its loan capital; (vi) issued or announced any intention to propose the issue of or made anychange in or to the terms of any debentures or become subject to any materialcontingent liability or incurred or increased any material indebtedness otherthan in the ordinary course of business; (vii) save for transactions between members of the hotgroup Group, purchased,redeemed or repaid, or announced any proposal to purchase, redeem or repay, anyof its own shares or other securities or reduced or made any other change to anypart of its share capital; (viii) entered into, implemented, effected, varied or announced its intentionto enter into, any material reconstruction, amalgamation, scheme, commitment orother transaction or arrangement otherwise than in the ordinary course ofbusiness; (ix) entered into or varied or terminated or announced its intention to enterinto or vary any material contract, transaction or commitment (whether inrespect of capital expenditure or otherwise) which is of a long term, onerous orRelated Shares:
Reach PlcHenderson Opportunity Trust