11th Apr 2005 07:30
Wolverhampton& Dudley Breweries PLC11 April 2005 Not for release, publication or distribution in whole or in part in or into theUnited States, Canada, Australia or Japan 11 April 2005 The Wolverhampton & Dudley Breweries, PLC Interest in and possible recommended offer for Jennings Brothers PLC The boards of The Wolverhampton & Dudley Breweries, PLC ("W&DB") and JenningsBrothers PLC ("Jennings") announce that they are in discussions with a view to W&DB, subject to completing limited due diligence, making a recommended cashoffer for Jennings at 430 pence per Jennings ordinary share including the finaldividend. These preconditions are subject to the reservations set out at the endof this announcement. W&DB further announces that it has acquired an interest, by way of anirrevocable undertaking granted by Frederic Robinson Limited ("FRL"), Jennings'largest shareholder, in the ordinary shares of Jennings. Accordingly, W&DB isnow interested in 24.1% of Jennings' ordinary shares ("Jennings Shares"). Theprincipal terms of the undertaking are set out below, and include an irrevocableundertaking to accept such an offer, if made. An offer of 430 pence per ordinary share would represent a premium of 32% to theclosing middle market share price of 325 pence on 8 April 2005, the lastbusiness day before this announcement. Such an offer would value the issuedordinary share capital of Jennings at £46 million. Jennings has been informed by W&DB that, given the local appeal of the Jenningsbeer brands, W&DB perceives the continued operation of the Jennings brewery andthe development of this business as key. W&DB would look to safeguard theemployment of as many employees as possible. The board of W&DB notes that: • Jennings is an excellent cultural fit within W&DB's existing brands and tenanted pub divisions; and • Jennings should benefit from participation within a larger group better able to meet the challenges presented by regulatory cost pressures and continuing industry consolidation. Description of Jennings and benefits to W&DB Jennings currently operates 128 leased and tenanted pubs in the North ofEngland, with 55 (43%) located in Cumbria, 31 (24%) in other parts of the NorthWest and 42 (33%) in the North East and Yorkshire. Jennings produces a portfolioof quality ale brands at its brewery, located at Cockermouth, Cumbria, includingits lead brand Cumberland Ale, which are distributed both locally and nationallyto the on and off trade. Jennings' estate would represent an excellent geographic fit with W&DB'sexisting business, particularly following the acquisition of Burtonwood PLC, andis consistent with W&DB's strategy to develop organically and through selectiveacquisitions. Principal terms of the irrevocable undertaking On 8 April 2005, FRL granted to W&DB an irrevocable undertaking to accept anoffer of at least 360 pence per ordinary share in cash by W&DB (the "Offer"), ifsuch an offer is made, in respect of the ordinary shares held by FRL inJennings. FRL holds 2,555,059 Jennings Shares, representing approximately 24.0%of the issued ordinary share capital of Jennings. In addition to these rightsover the Jennings Shares, a subsidiary of W&DB owns 10,000 ordinary shares inJennings, representing 0.1% of the issued ordinary share capital of Jennings. W&DB is therefore now interested, in aggregate, in 2,565,059 ordinary shares inJennings, representing 24.1% of the issued ordinary share capital of Jennings. In addition, the terms include the following: • the undertaking will relate to an announcement made by 7 April 2006, or such later date as the parties may agree, under Rule 2.5 of the City Code on Takeovers and Mergers of W&DB's firm intention to make the Offer and will remain binding in the event that a higher competing offer for Jennings is made; • the undertaking will cease to be binding only if W&DB does not make such an announcement by 7 April 2006 or if the Offer pursuant to such an announcement lapses or is withdrawn; and • for the duration of the irrevocable undertaking, the voting rights attaching to the Jennings Shares will be exercised on any resolution proposed at any general or class meeting of Jennings, and the rights attaching to the Jennings Shares to requisition or join in requisitioning any general or class meetings of Jennings will be exercised only in accordance with W&DB's directions. Commenting, John Rudgard, Chairman of Jennings, said: "We believe that, if finalterms can be agreed, W&DB would provide a good home for Jennings. Jennings highquality pub business and strong brands represent an excellent geographic fitwith W&DB's existing operations. The deal would protect and develop Jennings'heritage within a far larger and stronger group." Commenting, Ralph Findlay, Chief Executive of W&DB, said: "Jennings is anexcellent regional business with a strong heritage. We believe that ourproposals will assist in the further development of the business and providegood opportunities for its lessees, beer brands and for employees." Contact: W&DB Ralph Findlay, Chief Executive Tel: 01902 711811Paul Inglett, Finance Director PricewaterhouseCoopers Corporate Finance Sean Williams Tel: 020 7583 5000Colin Gillespie Tel: 0161 245 2000 gcg Hudson sandler Andrew Hayes Tel: 020 7796 4133Nick LyonsWendy Baker Jennings Brothers PLC John Rudgard, Chairman Tel: 0845 129 7185Mike Clayton, Managing Director Arbuthnot James Steel Tel: 020 7012 2000Nick Marsh Bankside Consultants Charles Ponsonby Tel: 020 7444 4166 Notes for Editors: W&DB is a leading brewer and pub retailing business. W&DB's nationwide pubestate comprises 553 managed pubs and 1,582 pubs let to tenants and lessees. W&DB's managed pub estate trades as 'Pathfinder Pubs', and its tenanted and leasedpubs form the 'Union Pub Company'. W&DB's brewing division, WDB Brands, brews some of the leading ales in thecountry, including Marston's Pedigree, a premium ale, and the Banks's andMansfield brands, which are standard ales. This announcement is not intended to constitute and is not an offer, and W&DBdoes not currently have a firm intention to make such an offer. The Board of W&DB emphasises that there can be no certainty that any offer will ultimately bemade nor as to the terms on which an offer might be made and reserves the rightto waive any or all of the preconditions set out in this announcement. Inparticular, it reserves the right to make an offer at a price below 430 penceper ordinary share provided such a price is recommended by the Jennings board.This announcement does not constitute an invitation to purchase any securities. PricewaterhouseCoopers LLP is regulated via the Financial Services Authority tocarry out investment business. PricewaterhouseCoopers Corporate Finance, a partof PricewaterhouseCoopers LLP, is acting for W&DB and no one else in relationto the matters described in this announcement and will not be responsible toanyone other than W&DB for providing the protections afforded to clients ofPricewaterhouse Coopers LLP nor for providing advice in relation to the mattersdescribed in this announcement. Arbuthnot Securities Limited ("Arbuthnot"), which is regulated by the FinancialServices Authority, is acting for Jennings and no one else in relation to thematters described in this announcement and will not be responsible to anyoneother than Jennings for providing the protections afforded to clients ofArbuthnot nor for providing advice in relation to the matters described in thisannouncement. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Marstons