Proposed Acquisition

30th Sep 2008 07:01



30 September 2008

This announcement is not for release, publication or distribution in or into any jurisdiction if to do so would constitute a violation of the relevant laws of such jurisdiction.

RECOMMENDED CASH OFFER FOR CHIEFTAIN GROUP PLC 

BY

REDHALL GROUP PLC

SUMMARY

- a premium of approximately 9.5 per cent. to the Closing Price of 191.0p per Chieftain Share on 18 September 2008, being the last dealing day prior to the announcement that the board of Chieftain was in discussions about a possible offer; 

- a premium of approximately 13.2 per cent. to the twelve month average Closing Price of approximately 184.8p per Chieftain Share prior to this announcement; and

- a premium of approximately 0.8 per cent. to the Closing Price of 207.5p per Chieftain Share on 29 September 2008, being the last dealing day prior to this announcement.

In aggregate, Redhall has received irrevocable undertakings to accept the Offer in respect of 3,016,619 Chieftain Shares, representing approximately 34.4 per cent. of the existing issued share capital of Chieftain

  Commenting on the Offer, David Jackson, Chairman and Chief Executive of Redhall, said:

"We are delighted to announce the Offer for Chieftain which should provide Redhall with complementary engineering and fabrication capacity, a well established engineering resources business and an entry into the marine outfitting business. We anticipate synergies within Chieftain's central management function of a minimum of £0.5 million per annum in addition to potential operational synergies. This acquisition would give the enlarged Redhall Group much enhanced prospects particularly within the oil and gas industry."

This summary should be read in conjunction with, and is subject to, the full text of the attached announcement. Appendix IV to the attached announcement contains definitions of certain expressions used in this summary. The Offer will be subject to the full terms and conditions set out in the Offer Document and the Form of Acceptance.

Enquiries:

Redhall 

 

 

This announcement does not constitute, or form part of, any offer for, or any solicitation of any offer for, securities of Chieftain. Any acceptance or other response to the Offer should be made only on the basis of information referred to in the Offer Document and the Form of Acceptance which Redhall intends to despatch today to Chieftain Shareholders and, for information only, to holders of options under the Chieftain Share Option Scheme.

Unless otherwise determined by Redhall and permitted by applicable law and regulation, the Offer will not be made, directly or indirectly, in, into or from, or by use of the mails of, or by any means or instrumentality (including, without limitation, facsimile transmission, telex, telephone or email) of interstate or foreign commerce of, or by any facility of a national securities exchange of, nor will it be made in, into or from any jurisdiction if to do so would constitute a violation of the relevant laws of such jurisdiction and the Offer will not be capable of acceptance by any such use, means, instrumentality or facilities. Accordingly, copies of any documents relating to the Offer must not be, directly or indirectly, mailed, transmitted or otherwise forwarded, distributed or sent, in whole or in part, in, into or from any jurisdiction if to do so would constitute a violation of the relevant laws of such jurisdiction and persons receiving such documents (including custodians, nominees and trustees) must not directly or indirectly mail, transmit or otherwise forward, distribute or send them in, into or from any such jurisdiction as to do so may invalidate any purported acceptance of the Offer.

The availability of the Offer to persons who are not resident in the United Kingdom may be affected by the laws of the jurisdiction in which they are resident. Persons who are not resident in the United Kingdom should inform themselves about, and observe, applicable requirements.

The Redhall Directors accept responsibility for the information contained in this announcement, other than that relating to the recommendation of the Offer by the Chieftain Directors and their associated views and opinions, and the information relating to the Chieftain Group, the Chieftain Directors and members of their immediate families, related trusts and persons connected with them. To the best of the knowledge and belief of the Redhall Directors (who have taken all reasonable care to ensure this is the case), the information contained in this announcement for which they accept responsibility is in accordance with the facts and does not omit anything likely to affect the import of such information.

The Chieftain Directors accept responsibility for all the information contained in this announcement relating to the recommendation of the Offer by the Chieftain Directors including their views, opinions and recommendations and the information relating to the Chieftain Group, the Chieftain Directors and members of their immediate families, related trusts and persons connected with them. To the best of the knowledge and belief of the Chieftain Directors (who have taken all reasonable care to ensure this is the case), the information contained in this announcement for which they accept responsibility is in accordance with the facts and does not omit anything likely to affect the import of such information.

Altium Capital Limited, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for Redhall as financial adviser within the meaning of the Rules of the Financial Services Authority and for no one else in connection with the Offer. Altium Capital Limited is not advising any other person or treating any other person as its client in relation thereto and will not be responsible to anyone other than Redhall for providing the protections afforded to clients of Altium Capital Limited, or for giving advice to any other person in relation to the Offer, the contents of this announcement or any other matter referred to herein.

Brewin Dolphin Limited, which is authorised and regulated by the Financial Services Authority in the United Kingdom, is acting for Chieftain and no one else in relation to the Offer and will not be responsible to anyone other than Chieftain for providing the protections afforded to clients of Brewin Dolphin Limited nor for providing advice in relation to the contents of this announcement or any Offer or arrangement referred to herein.

30 September 2008

  This announcement is not for release, publication or distribution in or into 

any jurisdiction if to do so would constitute a violation of the relevant laws of such jurisdiction.

RECOMMENDED CASH OFFER FOR CHIEFTAIN GROUP PLC 

BY

REDHALL GROUP PLC

1. INTRODUCTION

Further to the announcement by Chieftain on 19 September 2008 regarding discussions about a possible offer, the boards of Redhall and Chieftain are pleased to announce that they have reached agreement on the terms of a recommended cash offer, to be made by Redhall, for the entire issued and to be issued share capital of Chieftain.

The Offer will be 209.2p in cash for each Chieftain Share. The Offer values the existing issued ordinary share capital and outstanding options of Chieftain at approximately £18.6 million.

The board of Chieftain, who have been so advised by Brewin Dolphin, considers the terms of the Offer to be fair and reasonable and unanimously recommends that Chieftain Shareholders accept the Offer. All of the Chieftain Directors who are interested in Chieftain Shares have irrevocably undertaken to accept or procure the acceptance of the Offer in respect of the entire beneficial holdings of themselves and certain persons connected with them of 3,016,619 Chieftain Shares, which, in aggregate, represent approximately 34.4 per cent. of the existing issued share capital of Chieftain. Further details of these undertakings are provided in paragraph 4 below. In providing advice to the Chieftain Directors, Brewin Dolphin has taken into account the commercial assessments of the Chieftain Directors. Further information on Redhall and a description of the financing arrangements for the Offer will be set out in the Offer Document.

2. THE OFFER

Redhall will offer to acquire, on the terms and subject to the conditions set out in Appendix I to this announcement and the further terms and conditions to be set out in the Offer Document and in the Form of Acceptance, the Chieftain Shares on the following basis:

for each Chieftain Share 209.2p in cash

The Offer Price represents:

- a premium of approximately 9.5 per cent. to the Closing Price of 191.0p per Chieftain Share on 18 September 2008, being the last dealing day prior to the announcement that the board of Chieftain was in discussions about a possible offer; 

- a premium of approximately 13.2 per cent. to the twelve month average Closing Price of approximately 184.8p per Chieftain Share prior to this announcement; and

- a premium of approximately 0.8 per cent. to the Closing Price of 207.5p per Chieftain Share on 29 September 2008, being the last dealing day prior to this announcement.

The Chieftain Shares to be acquired by Redhall pursuant to the Offer are to be acquired with full title guarantee, fully paid and free from all liens, equities, charges and encumbrances and other third party rights or interests and together with all rights now or hereafter attaching thereto, including the right to receive and retain all dividends and other distributions (if any) declared, made or paid hereafter, save for the interim dividend of 3.3p declared on 4 September 2008 and to be paid on 3 October 2008 to Chieftain Shareholders on the register on 12 September 2008.

Full acceptance of the Offer, assuming the exercise of all outstanding options with an exercise price of less than 209.2p per Chieftain Share under the Chieftain Share Option Scheme before the Offer closes, will result in the payment to Chieftain Shareholders of, in aggregate, approximately £18.6 million in cash.

3. RECOMMENDATION

The Chieftain Directors are not connected with Redhall and have taken responsibility for considering the Offer on behalf of Chieftain Shareholders, for obtaining advice on the Offer from Brewin Dolphin (Chieftain's independent financial adviser for the purposes of the City Code) and for reaching a conclusion on the appropriate recommendation to Chieftain Shareholders.

The Chieftain Directors, who have been so advised by Brewin Dolphin, consider the terms of the Offer to be fair and reasonable. In providing its advice, Brewin Dolphin has taken into account the commercial assessments of the Chieftain Directors. Accordingly, the Chieftain Directors unanimously recommend Chieftain Shareholders to accept the Offer as they themselves have irrevocably undertaken to do (or procure to be done) in respect of the entire beneficial holdings of themselves and certain persons connected with them of 3,016,619 Chieftain Shares in aggregate, representing approximately 34.4 per cent. of the existing issued share capital of Chieftain.

4. IRREVOCABLE UNDERTAKINGS TO ACCEPT THE OFFER

Redhall has received irrevocable undertakings to accept, or procure the acceptance of, the Offer from the Chieftain Directors who are interested in Chieftain Shares and who hold (together with their connected persons), in aggregate, 3,016,619 Chieftain Shares representing approximately 34.4 per cent. of the existing issued share capital of Chieftain. These irrevocable undertakings are also in respect of Chieftain Shares that may be issued to, or acquired by, such persons pursuant to the terms of the Chieftain Share Option Scheme. These undertakings will remain binding even if a higher competing offer is made for Chieftain, unless the Offer lapses or is withdrawn.

Further details of these irrevocable undertakings are set out in Appendix II to this announcement.

  

5. REASONS FOR THE OFFER

The board of Redhall believes that the Offer will:

·; create a niche UK engineering services group with increased capability and critical mass to secure and execute significant contracts in its strategically important markets in nuclear, oil and gas, power generation and defence;

·; strengthen Redhall's existing exposure to the oil and gas sector, in line with Redhall's stated strategy, whilst also providing new expertise in the wider power generation market;

·; bring improved access to the nuclear marine outfitting sector, in particular with the Ministry of Defence on current and future build programmes for the Astute Class submarine and aircraft carrier programmes respectively.

·; add further skilled engineering resource and create a Group with in excess of 1,700 employees with enhanced ability to self-deliver projects via Chieftain's manpower services division;

·; provide much needed specialist fabrication and manufacturing facilities complementing Redhall's own; 

·; strengthen the Enlarged Group's project management resources and enhance its capability in providing integrated solutions to clients; and

·; expand the Group's existing engineering term contract operations into the geographically important North East chemical and power generation market whilst providing greater opportunity for the Enlarged Group to access other UK regional markets.

In addition, the board of Redhall expects the Acquisition to be earnings enhancing in the first year of acquisition.

6. STRATEGY FOR THE ENLARGED GROUP

Chieftain has a proven track record with a strong network of clients which will add considerable value to the Enlarged Group. The Redhall Directors also believe that Chieftain's strong operational management team can add value to the Enlarged Group following the Offer becoming or being declared unconditional in all respects.

The acquisition of Chieftain brings a number of additional benefits to the Enlarged Group:

·; improved availability of skilled engineers - there are considerable skills shortages in the engineering services industry;

·; access to key geographic markets in energy, chemical and Ministry of Defence marine markets;

·; considerable opportunities for cross-selling within Chieftain and Redhall;

·; increased project capability with additional engineering resource deployed across the Enlarged Group; and

·; an enhanced combined order book of approximately £140 million.

In addition the Redhall board anticipates synergies within Chieftain's central management function of a minimum of £0.5 million per annum in addition to potential operational synergies.

7. BACKGROUND TO AND REASONS FOR RECOMMENDATION OF THE  OFFER BY THE DIRECTORS OF CHIEFTAIN

Bill Taylor and Peter Wardle have led Chieftain's board for the last 23 years. They now both wish to retire and dispose of their interests in Chieftain. Together Bill and Peter hold in excess of 30 per cent. of the equity and, therefore, a disposal or marketing requires an offer to all shareholders under the rules of the City Code. A decision was taken by the Chieftain Directors to seek offers for the entire business and so Brewin Dolphin was appointed to find a buyer. This decision was undertaken confidentially and in private. Through that process Redhall has come forward with an offer which the Chieftain Directors are pleased to recommend unanimously that Chieftain Shareholders accept.

Redhall is a specialist engineering support services business quoted on AIM and operates internationally in the nuclear, oil and gas, food, chemical, defence, safety and security markets. Redhall's intention is to operate Chieftain as a division of the Redhall Group, largely under the leadership of Chieftain's current operational management team and at its existing locations. The Chieftain Directors believe that there is a compatibility between the two groups, which should facilitate the integration of the businesses, which is vitally important for the clients and employees of Chieftain. Furthermore the Chieftain Directors believe that Chieftain and Redhall have a well suited mix of service offerings and, together, a good coverage of the key global markets for industrial and engineering services. 

In addition, Chieftain Shareholders should note that the Offer Price represents:

- a premium of approximately 9.5 per cent. to the Closing Price of 191.0p per Chieftain Share on 18 September 2008, being the last dealing day prior to the announcement that the board of Chieftain was in discussions about a possible offer; 

- a premium of approximately 13.2 per cent. to the twelve month average Closing Price of approximately 184.8p per Chieftain Share prior to this announcement; and

- a premium of approximately 0.8 per cent. to the Closing Price of 207.5p per Chieftain Share on 29 September 2008, being the last dealing day prior to this announcement.

8. INFORMATION ON CHIEFTAIN

Chieftain provides outsourced industrial and engineering support services to clients, specialising in the marine, nuclear, petrochemical, power, oil and gas and process sectors. Incorporated in 1979, Chieftain has developed organically and by acquisition. Since 2004, Chieftain has operated in three divisions: Engineering, Marine Outfitting and Environmental Services. 

The Engineering division provides asset maintenance in the process and energy sectors on long term contracts, supplies general and pipework fabrication to the offshore oil and gas, process and energy industry and provides skilled manpower to clients engaged in engineering projects around the world. The Marine Outfitting division is one of the UK's leaders in the supply of insulation, scaffolding, painting and architectural services to sea-going vessels for merchant and warship fleets and oil and gas offshore platforms. The Chieftain Group retains a small environmental services and maintenance business, principally for power generation and local authority clients in Northern Ireland.

For the six months ended 30 June 2008, Chieftain reported turnover of £22.8 million and profit before tax of £1.1 million.

Further information on Chieftain will be set out in the Offer Document.

9. INFORMATION ON REDHALL 

Redhall is an AIM quoted group with a market capitalisation of approximately £57 million. The group consists of six niche engineering services businesses across two key divisions. It operates with global clients in markets that have growth in the short, medium and long term. Principal markets include nuclear, oil and gas, chemical, food, defence, safety and security.

Nuclear Services

Jordan Nuclear 

A mechanical engineering contractor which has operated within the nuclear industry for over 40 years. The business provides life-cycle support from new construction to decommissioning and is expert in planning, active area working, asset management support and the management and control of heavy lifting. 

Jordan Manufacturing

Engaged in the manufacturing and fabrication of stainless steel with significant knowledge of materials, offering bespoke design, material selection and procurement, tailored manufacturing processes and specialist surface finishes to meet its customers' requirements. The business is a preferred supplier within the nuclear and energy sectors. 

Steels Engineering Services 

Steels provides a range of multi-discipline design and engineering services to the nuclear, power generation and defence sectors. It is currently a key term contractor for specialist nuclear projects within the high security radiological areas of AWE Aldermaston where it has had a presence for over 10 years. 

Engineering Services

Jordan Engineering

An outsourced engineering support services business supplying blue chip customers in the oil and gas, chemical, food, pharmaceutical and industrial sectors. It offers a broad range of services including maintenance planning and management, term contracts, shut-down services, project services and tank repair and maintenance. 

Jex Engineering

Provider of engineering services and complete solutions to customers within the process sector. It focuses on multinational clients in the food, chemical and pharmaceutical sectors where its service offering covers the complete project life-cycle including feasibility study, design and planning, construction and final project review. 

Booth Industries 

Undertakes the design, manufacture, installation and maintenance of specialist doors, windows and wall systems. It has a significant design capability providing bespoke specifications to meet the hostile and challenging conditions in which its products operate. Its expertise and products are supplied into the infrastructure, oil and gas, defence and nuclear industries. 

For the six months ended 31 March 2008, Redhall reported turnover of £41.5 million and profit before tax of £1.8 million, accompanied by strong cash generation from operations of £2.7 million.

10. CURRENT TRADING AND PROSPECTS

Chieftain

In the unaudited results for the six month period ended 30 June 2008, announced by Chieftain on 4 September 2008, Peter Wardle, Chairman of Chieftain, commented:

"We continue to look forward with confidence to continuing significant expansion of the Group's activities. Chieftain has skills which are in strong demand from end users which are very active and the outlook for the Chieftain group is very positive. This demand is tangible and is evidenced in the contract wins we have reported in the recent years and an order book of £69 million, which gives excellent visibility for the current year and well into 2009." The Chieftain Board believes that this continues to be the case.

Redhall

In today's trading update ahead of the preliminary results for Redhall for the year ended 30 September 2008, the Chairman and Chief Executive of Redhall, David Jackson, commented:

"The board is pleased to announce that it anticipates that profit for the current financial year will be ahead of management's expectations with both divisions performing well. The Redhall Board is particularly pleased with the strong performances from those businesses acquired in 2007, which have integrated well. Redhall continues to be strongly cash generative and will have net cash as at 30 September 2008. The outlook in our markets remains positive into 2009 and beyond."

11. INTENTIONS REGARDING CHIEFTAIN'S EMPLOYEES AND DIRECTORS

The board of Redhall has given assurances to the board of Chieftain that, following the Offer becoming or being declared unconditional in all respects, the existing employment rights, including pension rights, of all employees and management of the Chieftain Group will be fully safeguarded.

Redhall attaches great importance to the skills and experience of the existing management and employees of Chieftain. As such, Redhall expects that Chieftain employees will play an important role in the future of the business and Redhall does not currently intend to make any material changes to Chieftain's staffing levels, nor to any conditions of employment (including pension benefits) nor locations of Chieftain's places of business.

Peter Wardle, Bill Taylor, Stan Elliott, Christopher Fleetwood and John Dawson have agreed to resign following the Offer becoming or being declared unconditional in all respects. Bill Taylor and Stan Elliott intend to remain with the Enlarged Group for a short period to facilitate the transition.

12. CHIEFTAIN SHARE OPTION SCHEME 

The Offer will extend to any Chieftain Shares which are unconditionally allotted or issued prior to the date on which the Offer closes (or such earlier date as Redhall may, subject to the City Code or with the consent of the Panel, determine) including any which are so unconditionally allotted or issued pursuant to the exercise of options under the Chieftain Share Option Scheme. To the extent such options are not exercised, Redhall will make appropriate proposals to Chieftain Share Optionholders. It is anticipated that such proposals will be sent to Chieftain Share Optionholders with the Offer Document today.

13. INFORMATION ON FINANCING

Full acceptance of the Offer, assuming the exercise of relevant Chieftain Share Options, will result in a maximum cash consideration of approximately £18.6 million which (together with the expenses of Chieftain and Redhall of approximately £1.4 million) will be provided from the proceeds of the Placing and Redhall's existing resources. Altium is satisfied that Redhall has sufficient financial resources available to it to satisfy in full the cash consideration payable by Redhall under the Offer.

Further information in relation to the financing of the Offer will be set out in the Offer Document.

14. INDUCEMENT FEE

On 7 August 2008, Chieftain entered into an agreement with Redhall pursuant to which Chieftain has agreed to pay to Redhall a sum of one per cent. of the value of the Offer (inclusive of any irrevocable VAT) if, amongst other things, (i) the Chieftain Directors withdraw or modify their recommendation to accept the Offer; or (ii) a competing offer is announced in accordance with Rule 2.5 of the City Code after the date of this announcement and the competing offer is recommended by the Chieftain Directors for acceptance. There are also non-solicitation provisions in favour of Redhall contained in the inducement fee agreement. Nothing in the inducement fee arrangement obliges Chieftain to pay any amount which the Panel determines would not be permitted by Rule 21.2 of the City Code.

  15. REDHALL SHAREHOLDER APPROVAL

The Offer will be funded by an equity fundraising underwritten by Altium. The issue of new Redhall Shares pursuant to the Placing will, due to its size, require an increase in Redhall's existing share capital authorities. Accordingly, the Offer will be conditional, inter alia, on the passing of the Resolution by Redhall Shareholders at the Redhall General Meeting. It is expected that the Circular containing the notice of the Redhall General Meeting will be sent to Redhall Shareholders today.

The Redhall Directors have irrevocably undertaken to vote in favour of the Resolution to be proposed at the Redhall General Meeting in respect of their own entire beneficial holdings of Redhall Shares (and to procure that their connected persons vote in favour of the Resolution in relation to their beneficial holdings of Redhall Shares) being, in aggregate, 1,498,494 Redhall Shares, representing approximately 7.0 per cent. of the existing issued share capital of Redhall as at 29 September 2008, being the last practicable day before this announcement.

 

 

16. COMPULSORY ACQUISITION, CANCELLATION OF TRADING ON AIM AND RE-REGISTRATION

If Redhall receives acceptances under the Offer in respect of, and/or otherwise acquires, 90 per cent. or more in value of the Chieftain Shares to which the Offer relates (and not less than 90 per cent. of the voting rights carried by Chieftain Shares), and if all other conditions of the Offer have been satisfied or waived (to the extent that they are capable of being waived), Redhall intends to exercise its rights pursuant to the provisions of Part 28 of the CA 2006 to acquire compulsorily any remaining Chieftain Shares in respect of which acceptances have not then been received on the same terms as the Offer.

If the Offer becomes or is declared unconditional in all respects, and sufficient acceptances under the Offer are received , or Chieftain Shares are otherwise acquired or agreed to be acquired, and subject to any applicable requirements of the London Stock Exchange, Redhall intends to procure that Chieftain makes an application to cancel admission to trading in Chieftain Shares on AIM. Cancellation of trading would significantly reduce the liquidity and marketability of any Chieftain Shares not assented to the Offer at that time and the value of any such Chieftain Shares may be affected as a consequence.

It is anticipated that cancellation of admission to trading on AIM will take effect no earlier than 20 Business Days after the earlier of (i) the date on which Redhall has, by virtue of its shareholdings and acceptances of the Offer, acquired or agreed to acquire issued share capital carrying 75 per cent. of the voting rights of Chieftain; or (ii) the first date of issue of compulsory acquisition notices under Part 28 of the CA 2006. Redhall will notify Chieftain Shareholders when the required threshold has been attained and confirm that the notice period has commenced and the anticipated date of cancellation.

It is also intended that, following the Offer becoming or being declared unconditional in all respects and after the cancellation referred to above becomes effective, Chieftain will be re-registered as a private company under the relevant provisions of the CA 1985.

17. GENERAL

 

The Offer will be made on the terms and subject to the conditions which are set out in Appendix I to this announcement and on the further terms that will be set out in the Offer Document and the Form of Acceptance and such further terms as may be required to comply with the provisions of the City Code. 

 

Redhall intends that the Offer Document setting out the details of the formal Offer will be posted to Chieftain Shareholders today and in any event within 28 days of the date of this announcement. Redhall also intends that the Circular and notice of Redhall General Meeting will be sent to Redhall Shareholders today.

Details of the sources and bases of information in respect of the information contained in this announcement are contained in Appendix III to this announcement. Appendix IV to this announcement contains definitions of certain expressions used in this announcement. 

Save as disclosed in this announcement, as at 29 September 2008, the latest practicable date prior to this announcement, neither Redhall, any of the Redhall Directors (and their close relatives and related trusts) nor, so far as Redhall is aware, any person acting in concert with Redhall, has any interest in or any right to subscribe for or has any short positions (whether conditional or absolute and whether in the money or otherwise) (including any short positions under a derivative, any agreement to sell or any delivery obligation or right to require another person to purchase or take delivery) in or has borrowed or lent (save for any borrowed shares which have been either on-lent or sold) any "relevant securities" of Chieftain nor does any such person have any arrangement with Chieftain or Redhall or any of their respective associates in relation to "relevant securities" of Chieftain. For these purposes, "relevant securities" means securities of Chieftain which are being offered for or which carry voting rights, equity share capital of Chieftain and securities of Chieftain carrying conversion or subscription rights into any of the foregoing, and, "arrangement" includes any indemnity or option arrangement, any agreement or understanding, formal or informal, of whatever nature, relating to "relevant securities" of Chieftain which may be an inducement to deal or refrain from dealing in such securities. "Interest" includes, in summary, any long economic exposure, whether conditional or absolute, to changes in the price of securities and a person is treated as having an "interest" by virtue of the ownership or control of securities, or by virtue of any option in respect of, or derivative referenced to, securities. In the interests of confidentiality, Redhall has not made enquires in this respect of certain parties who may be presumed by the Panel to be acting in concert with it for the purposes of the Offer.

The availability of the Offer to persons not resident in the United Kingdom may be affected by the laws of the relevant jurisdictions. Persons who are not resident in the United Kingdom should inform themselves about and observe any applicable requirements. 

This announcement does not constitute, or form part of, any offer for, or any solicitation of any offer for or any invitation to purchase, securities. Any acceptance or other response to the Offer should be made only on the basis of information referred to in the Offer Document and the Form of Acceptance which Redhall intends to despatch to Chieftain Shareholders and, for information only, to Chieftain Share Optionholders today and in any event as soon as practicable.

The Offer and acceptances of it will be governed by English Law. The Offer will be subject to the applicable requirements of the City Code, the Panel and the London Stock Exchange and other legal and regulatory requirements.

Altium Capital Limited, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for Redhall as financial adviser within the meaning of the Rules of the Financial Services Authority and for no one else in connection with the Offer. Altium Capital Limited is not advising any other person or treating any other person as its client in relation thereto and will not be responsible to anyone other than Redhall for providing the protections afforded to clients of Altium Capital Limited, or for giving advice to any other person in relation to the Offer, the contents of this announcement or any other matter referred to herein.

Brewin Dolphin Limited, which is authorised and regulated by the Financial Services Authority in the United Kingdom, is acting for Chieftain and no one else in relation to the Offer and will not be responsible to anyone other than Chieftain for providing the protections afforded to clients of Brewin Dolphin Limited nor for providing advice in relation to the contents of this announcement or any Offer or arrangement referred to herein.

Dealing Disclosure Requirements

Under the provisions of Rule 8.3 of the City Code, if any person is, or becomes, "interested" (directly or indirectly) in one per cent. or more of any class of "relevant securities" of Chieftain, all "dealings" in any "relevant securities" of that company (including by means of an option in respect of, or a derivative referenced to, any such "relevant securities") must be publicly disclosed by no later than 3.30 p.m. (London time) on the London business day following the date of the relevant transaction. This requirement will continue until the date on which the Offer becomes, or is declared, unconditional as to acceptances, lapses or is otherwise withdrawn or on which the "offer period" otherwise ends. If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire an "interest" in "relevant securities" of Chieftain, they will be deemed to be a single person for the purpose of Rule 8.3.

Under the provisions of Rule 8.1 of the City Code, all "dealings" in "relevant securities" of Chieftain by Redhall or Chieftain, or by any of their respective "associates", must be disclosed by no later than 12.00 noon (London time) on the London business day following the date of the relevant transaction.

A disclosure table, giving details of the companies in whose "relevant securities" "dealings" should be disclosed, and the number of such securities in issue, can be found on the Takeover Panel's website at www.thetakeoverpanel.org.uk.

"Interests in securities" arise, in summary, when a person has long economic exposure, whether conditional or absolute, to changes in the price of securities. In particular, a person will be treated as having an "interest" by virtue of the ownership or control of securities, or by virtue of any option in respect of, or derivative referenced to, securities. 

Terms in quotation marks are defined in the City Code, which can also be found on the Panel's website. If you are in any doubt as to whether or not you are required to disclose a "dealing" under Rule 8, you should consult the Panel.

30 September 2008

 

Enquiries:

Redhall 

 

 

  APPENDIX I

CONDITIONS AND CERTAIN FURTHER TERMS OF THE OFFER

 

 

 

APPENDIX II

Irrevocable Undertakings to Accept the Offer

Name of shareholder giving irrevocable undertaking	Total number of Chieftain Shares in respect of which undertakings given	Number of Chieftain Shares subject to Options
P Wardle	1,923,640	nil
W Taylor	1,002,280	60,000
M Oliver	35,099	40,000
A Cutchie	30,000	40,000
R Johnson	100	40,000
J Dawson	20,000	nil
C Fleetwood	5,500	nil
S Elliott	nil	40,000
L Adams	nil	40,000
TOTAL	3,016,619	260,000

  APPENDIX III

Bases of Calculations and Sources of Information

 

  

APPENDIX IV

DEFINITIONS

In this announcement, the following words and expressions shall, except where the context requires otherwise, have the following meanings: 

"Acquisition"	the proposed acquisition of the whole of the issued and to be issued share capital of Chieftain by Redhall by means of the Offer
"AIM"	AIM, a market operated by London Stock Exchange
"AIM Rules"	the AIM rules for companies, published by the London Stock Exchange
"Altium"	Altium Capital Limited
"Brewin Dolphin"	Brewin Dolphin Limited
"Business Day"	a day on which banks are generally open for business in London (excluding Saturdays, Sundays and public holidays)
"CA 1985"	the Companies Act 1985
"CA 2006"	the Companies Act 2006
"Chieftain"	Chieftain Group PLC
"Chieftain Directors"	the directors of Chieftain
"Chieftain Group"	Chieftain and its subsidiaries and subsidiary undertakings
"Chieftain Share Option Scheme"	the Chieftain Group plc Executive Share Option Scheme 2006
"Chieftain Share Optionholders"	holders of Chieftain Share Options and each a "Chieftain Share Optionholder"
"Chieftain Share Options"	share options granted pursuant to the Chieftain Share Option Scheme
"Chieftain Shareholders"	holders of Chieftain Shares and each a "Chieftain Shareholder"
"Chieftain Shares"	includes: (i) the existing issued or unconditionally allotted and fully paid (or credited as fully paid) ordinary shares of 5 pence each in Chieftain; and (ii) any further such shares which are unconditionally allotted or issued and fully paid while the Offer remains open for acceptance or, subject to the provisions of the City Code, by such earlier date as Redhall may determine, not being earlier than the date (subject to the City Code) on which the Offer becomes or is declared unconditional as to acceptances but, in each case, excludes any shares held as Treasury Shares on such date as Redhall may determine before the date on which the Offer closes (which may be a different date to the date referred to in (ii))
"Circular"	the document to be sent to Redhall Shareholders containing, amongst other things, the notice of the Redhall General Meeting
"City Code"	the City Code on Takeovers and Mergers
"Closing Price"	the middle market price of a Chieftain Share at the close of business on the day to which such price relates, as derived from the London Stock Exchange's Daily Official List for that day
"Enlarged Group"	Redhall as enlarged by the Acquisition
"First Closing Date"	the date which is 21 days after the day of posting of the Offer Document
"Form of Acceptance"	the form of acceptance and authority relating to the Offer which will, where appropriate, accompany the Offer Document
"London Stock Exchange"	London Stock Exchange plc
"Offer"	the recommended cash offer to be made by Redhall for the entire share capital, issued and to be issued, of Chieftain including, where the context requires, any subsequent revision, variation, extension or renewal thereof
"Offer Document"	the offer document to be sent to Chieftain Shareholders containing the formal Offer
"Offer Price"	209.2 pence per Chieftain Share
"Overseas Shareholders"	Chieftain Shareholders (or nominees of or custodians or trustees for Chieftain Shareholders) in, resident in or nationals or citizens of jurisdictions outside the United Kingdom
"Panel"	the Panel on Takeovers and Mergers
"Placing"	the conditional placing by Altium of the Placing Shares at a price of 245 pence per Placing Share
"Placing Shares" or "New Redhall Shares"	the 8,163,266 new Redhall Shares which have been conditionally placed under the Placing with certain institutional investors
"Redhall"	Redhall Group plc
"Redhall Directors"	the directors of Redhall
"Redhall General Meeting"	the general meeting of Redhall to be held on 24 October 2008 to consider, and if thought fit, approve the Resolution
"Redhall Shareholders"	holders of Redhall Shares and each a "Redhall Shareholder"
"Redhall Shares"	ordinary shares of 25 pence each in the capital of Redhall
"Regulatory Information Service"	any of the services set out in Appendix 3 to the Listing Rules
"Resolution"	the resolution to be put to the Redhall Shareholders at the Redhall General Meeting and set out in the notice of the Redhall General Meeting
"Treasury Shares"	any Chieftain Shares held by Chieftain as treasury shares (as defined in section 162A of CA 1985)
"UK" or "United Kingdom"	the United Kingdom of Great Britain and Northern Ireland
"United States" or "US"	the United States of America, its territories and possessions, all areas subject to its jurisdiction or any political subdivision thereof, any state of the United States of America and the District of Columbia
"Wider Chieftain Group"	Chieftain and the subsidiaries and subsidiary undertakings of Chieftain and associated undertakings and any other body corporate, partnership, joint venture or person in which Chieftain and such undertakings (aggregating their interest) have an interest of more than 20 per cent. of the voting or equity capital or equivalent
"Wider Redhall Group"	Redhall and the subsidiaries and subsidiary undertakings of Redhall and associated undertakings and any other body corporate, partnership, joint venture or person in which Redhall and such undertakings (aggregating their interests) have an interest of more than 20 per cent. of the voting or equity capital or equivalent

For the purposes of this announcement, "parent undertaking", "subsidiary undertaking", "associated undertaking" and "undertaking" have the meanings given by CA 1985 (but for this purpose ignoring paragraph 20(1)(b) of schedule 4A of CA 1985).

All times referred to are London time unless otherwise stated.

ENDOFFDGGFLKGFGRZG

---

Related Shares:

RHL.L