29th Jun 2009 07:00
29 June 2009
Candover Investments plc ("Candover" or the "Company")
Update on strategic review and cessation of Offer Discussions
On 2 March 2009, the Board of Candover announced that it was considering all strategic options to reinforce the financial position of the Company and maximise value for shareholders. Since March 2009, the Company has taken a number of actions to strengthen its overall financial position including:
* withdrawing from its commitment to the 2008 Fund (the "Fund") which led to the Fund's suspension for up to six months from 6 April 2009. As a result of Candover's decision not to make any further commitment, discussions are now under way between Candover, its wholly owned subsidiary, Candover Partners Limited ("CPL") and the Fund's Limited Partners regarding the future of the Fund; * reducing the overall level of working capital and implementing a reduction in the Company's headcount (including the closure of Candover Asia and Candover Eastern Europe) which will reduce the Company's annual salary costs by £7 million; and * the sale of selected non-core assets not managed by CPL, realising €5.9 million.
On 19 June 2009, Candover announced that CPL had agreed to sell Wood Mackenzie to Charterhouse Capital Partners for an enterprise value of £553 million. The sale generated initial proceeds for the Company of £36.2 million. This comprised cash proceeds of £19.6 million (with the potential for further proceeds of £1.9 million under a deferred consideration scheme) and an additional cash payment of £16.6 million as a result of the crystallisation of carried interest payments from the Candover 2001 Fund. Candover will now revalue its carried interest entitlements as the crystallisation of the carried interest will generate incremental cash flow if and when the Candover 2001 Fund achieves more realisations.
The Board of Candover is confident that the combined effect of these actions, together with the benefit of the 2001 Fund carry payments which have now crystallised following the sale of Wood Mackenzie, should mean that Candover will be in full compliance with the covenant obligations attached to its 2014 loan notes as at 30 June 2009. In addition, the Board is also satisfied that Candover continues to have adequate capital to meet its follow on commitments to the 2005 Fund. The Company will announce its half year results for the six months to 30 June 2009 on 21 August 2009.
On 13 March 2009, the Company announced that it had received indicative expressions of interest covering a range of options for its business including potential offers for the Company. Since that time the Company and its advisers have been engaged in detailed discussions with a number of parties to see whether an offer for the entire issued share capital of the Company might be forthcoming which would deliver superior value to shareholders. The Board of Candover, after careful consideration of all the options available and taking account of the progress made in stabilising the overall financial position of the Company referred to above, has concluded that none of the proposals had sufficient certainty and value to shareholders to justify further consideration. Accordingly, all offer discussions have now ceased.
Gerry Grimstone, Chairman of Candover said:
"I am pleased to say that following the sale of Wood Mackenzie and the actions that we have taken the Company's financial position has strengthened markedly. The Board is of the view that there is considerable long term value within many of Candover's portfolio companies which, if realised, should positively impact Candover's net asset value.
We were very conscious that an offer for the Company which did not recognise this value would not be in shareholders' interests, nor would other measures that would result in unacceptable dilution. We are continuing to review actively whether an alternative ownership structure for Candover Partners Limited may be merited in the future. A further announcement about this will be made in due course."
Contact:Philip PriceCompany Secretary, Candover Investments plcTel +44 207 489 9848Susanna Voyle/Peter HewerTulchan Communications LimitedTel +44 207 353 4200
vendorRelated Shares:
CDI.L