17th Oct 2006 12:21
Derwent Valley Holdings PLC17 October 2006 Company Derwent Valley Holdings plcHeadline: Cash tender offer and proposal for its £35m 101/8% First Mortgage Debenture Stock 2019 NOT FOR DISTRIBUTION TO ANY PERSON RESIDENT AND/OR LOCATED IN THE UNITED STATESOR ITALY (SEE OFFER AND DISTRIBUTION RESTRICTIONS BELOW) Derwent Valley Holdings plc (the "Company") has today announced an offer torepurchase for cash any and all of its £35,000,000 101/8 per cent. FirstMortgage Debenture Stock 2019 (ISIN: GB0002653151) (the "Stock") (subject tooffer restrictions - see below and as more fully described in the Tender OfferMemorandum dated 17 October 2006 prepared by the Company (the "Tender OfferMemorandum")). The Stock was issued in 1994 at an early stage in the development of the DerwentValley Group (the "Group") and represented the majority of the Group'sborrowings at that time. The Group has grown significantly since then and nowrelies predominantly upon bank debt to finance its property business. As a result, the Stock now represents a small proportion of the Group'sborrowings. It also has a coupon out of line with current market levels.Accordingly, the Board of the Company believes it appropriate to redeem theStock early by way of the Offer and the Proposal, and to replace it with bankdebt in order to simplify the Group's liability structure and improve itsflexibility. The price payable for the Stock (the "Repurchase Price") is expected to bedetermined at or around 2.00 p.m., London time, (the "Pricing Time") on Friday,10 November 2006 (the "Pricing Date") in the manner described in the TenderOffer Memorandum by reference to the sum (such sum, the "Repurchase Yield") ofthe repurchase spread of +50 basis points ("bps") (the "Repurchase Spread") anda mid-market rate for the 4.75 per cent. UK Treasury Gilt due March 2020 (the "Mid-Market Benchmark Security Rate"). The Company will also pay accruedinterest. Each Stockholder who validly tenders its Stock by 12.00 noon, London time, onThursday, 2 November 2006 (the "Early Tender Deadline") will receive a furthercash payment (the "Early Tender Premium") in addition to the Repurchase Priceand accrued interest, and as additional consideration for its tender of therelevant Stock accepted for repurchase by the Company pursuant to the Offer. Theamount of the Early Tender Premium for such Stockholder will be equal to thedifference between the amount payable by the Company for the relevant Stock atthe Repurchase Price and that which would be payable for such Stock at aneffective repurchase price (the "Effective Early Tender Price") determined inthe same manner as for the Repurchase Price but by reference to the sum (suchsum, the "Effective Early Tender Yield") of an effective repurchase spread of+40 bps (the "Effective Early Tender Spread") and the Mid-Market BenchmarkSecurity Rate. The Offer begins today and expires at 12.00 noon, London time, on Tuesday, 7November 2006 (the "Expiration Deadline"), unless the period for the Offer isextended or re-opened or the Offer is terminated. In order to be eligible toreceive the Repurchase Price, Stockholders must validly tender their Stockbefore the Expiration Deadline, by delivering, or arranging to have delivered ontheir behalf, a valid Tender Instruction that is received by the Registrar bythe Expiration Deadline. The Company will also be inviting all Stockholders to approve a proposal (the "Proposal") to amend the terms and conditions of the Stock to provide for theCompany to have the option to redeem the Stock early on the terms and subject tothe conditions contained in the Tender Offer Memorandum. The Proposal will beconsidered at a meeting (the "Meeting") of the Stockholders to be held at theoffices of Slaughter and May, One Bunhill Row, London EC1Y 8YY on Thursday, 9November 2006 at 12.00 noon, London time. Notice of the Meeting (the "Notice")will be posted today to each Stockholder at such Stockholder's registeredaddress in the United Kingdom or such other address supplied by such Stockholderto the Company for the giving or serving of notice. At the Meeting, Stockholders will be invited to consider and, if thought fit,pass an extraordinary resolution in respect of the Stock, as set out in theNotice (the "Extraordinary Resolution"). The Extraordinary Resolution providesfor the terms and conditions of the Stock to be amended by the insertion of anew provision pursuant to which the Company may redeem all (and not some only)of the Stock outstanding at any time (the "Issuer Call"), on the Company givingnot less than three and not more than 30 Business Days' notice. The redemption amount (the "Early Redemption Amount") at which the Stock will beredeemed on such early redemption together with accrued interest will bedetermined in a similar manner to that described in the Tender Offer Memorandumfor the determination of the amounts payable for the repurchase of the Stock atthe Repurchase Price pursuant to the Offer and by reference to the sum of aredemption spread of an identical +50 bps and the Mid-Market Benchmark SecurityRate. Stockholders should refer to the draft Sixth Supplemental Trust Deed forfull details of the manner in which the Early Redemption Amount will bedetermined. Stockholders who are ineligible for the Offer or who do not wish to tender Stockin the Offer may also be eligible to receive an identical amount to the EarlyTender Premium, which will be paid in the circumstances described in the TenderOffer Memorandum subject to the Extraordinary Resolution being passed, bydelivering, or arranging to have delivered on their behalf, a valid Voting OnlyInstruction that is received by the Registrar by the Early Tender Deadline (andnot revoked). If the Extraordinary Resolution is passed at the first Meeting and the Company,in its sole discretion, chooses to exercise the Issuer Call immediately, theamounts payable by the Company for Stock redeemed pursuant to the Issuer Callwill be the same as the amounts payable by the Company for equal nominal amountsof Stock repurchased at the Repurchase Price pursuant to the Offer (including ineach case the amounts payable in respect of accrued interest). The settlement date for the Offer is expected to be Wednesday, 15 November 2006. If the Extraordinary Resolution is passed at the first Meeting and theCompany, in its sole discretion, chooses to exercise the Issuer CallImmediately, this will also be the date on which the Company redeems all of theoutstanding Stock that has not been repurchased by it pursuant to the Offer. The Offer and the Proposal are being made on the terms and subject to theconditions contained in the Tender Offer Memorandum. Under the Offer and theProposal, all Tender Instructions and Voting Only Instructions delivered by theEarly Tender Deadline will be irrevocable except in certain limitedcircumstances. By tendering Stock in the Offer, Stockholders will appoint theChairman of the Meeting as their proxy to vote in favour of the ExtraordinaryResolution at the Meeting. Subject to applicable law and as provided in the Tender Offer Memorandum, theCompany may, in its sole discretion, extend, re-open, amend, waive any conditionof or terminate the Offer or the Proposal, as applicable, at any time. EligibleStockholders are advised to read the Tender Offer Memorandum carefully for fulldetails of and information on the procedures for participating in the Offer. Stockholders should contact the following for further information: The Dealer Manager: UBS Investment Bank at 1 Finsbury Avenue, London EC2M 2PP, Attention: LiabilityManagement Group, Tel: +44 20 7568 3118. The Registrar: Lloyds TSB Registrars at The Causeway, Worthing, West Sussex BN99 6ZL, Tel: 0870609 2158 (UK Stockholders only)/+44 1903 276 342 (overseas Stockholders only). A copy of the Tender Offer Memorandum is available for inspection at theDocument Viewing Facility of the Financial Services Authority, 25 The NorthColonnade, London E14 5HS. DISCLAIMER This announcement must be read in conjunction with the Tender OfferMemorandum. This announcement and the Tender Offer Memorandum contain importantinformation which should be read carefully before any decision is made withrespect to the Offer and/or the Proposal. If you are in any doubt as to theaction you should take, you are recommended to seek your own financial advice,including as to any tax consequences, from your stockbroker, bank manager,solicitor, accountant or other independent financial adviser. Any individual orcompany whose Stock is held on its behalf by a broker, dealer, bank, custodian,trust company or other nominee must contact such entity if it wishes to tenderStock in the Offer or participate in the Proposal. None of the Company, UBSLimited or Royal Exchange Trust Company Limited makes any recommendation whetherStockholders should tender Stock in the Offer or participate in the Proposal. OFFER AND DISTRIBUTION RESTRICTIONS The distribution of this announcement and the Tender Offer Memorandum in certainjurisdictions may be restricted by law. Persons into whose possession thisannouncement and/or the Tender Offer Memorandum comes are required by theCompany and the Dealer Manager to inform themselves about and to observe anysuch restrictions. Neither this announcement nor the Tender Offer Memorandumconstitutes an offer to buy or a solicitation of an offer to sell the Stock, andtenders of Stock in the Offer will not be accepted from Stockholders in anyjurisdiction in which such offer or solicitation is unlawful. In thosejurisdictions where the securities, blue sky or other laws require the Offer tobe made by a licensed broker or dealer and the Dealer Manager is such a licensedbroker or dealer in such jurisdictions, the Offer shall be deemed to be made onbehalf of the Company by the Dealer Manager. United States The Offer is not being made and will not be made, directly or indirectly, in orinto, or by use of the mails of, or by any means or instrumentality (including,without limitation, facsimile transmission, telex, telephone, email and otherforms of electronic transmission) of interstate or foreign commerce of, or anyfacility of a national securities exchange of, the United States, and the Stockmay not be tendered in the Offer by any such use, means, instrumentality orfacility from or within the United States or by persons located or resident inthe United States. Accordingly, copies of this announcement, the Tender OfferMemorandum and any other documents or materials relating to the Offer are notbeing, and must not be, directly or indirectly, mailed or otherwise transmitted,distributed or forwarded in or into the United States or to persons located orresident in the United States. Any purported tender of Stock in the Offerresulting directly or indirectly from a violation of these restrictions will beinvalid and tenders of Stock made by a person located in the United States orany agent, fiduciary or other intermediary acting on a non-discretionary basisfor a principal giving instructions from within the United States will not beaccepted. For the purposes of this paragraph, United States means the UnitedStates of America, its territories and possessions, any state of the UnitedStates of America and the District of Columbia. Italy The Offer is not being made in the Republic of Italy (Italy). The Offer, thisannouncement and the Tender Offer Memorandum have not been submitted to theclearance procedure of the Commissione Nazionale per le Societa e la Borsa(CONSOB) pursuant to Italian laws and regulations. Accordingly, Stockholdersare notified that, to the extent Stockholders are resident and/or located inItaly, the Offer is not available to them and they may not tender Stock in theOffer and, as such, any Tender Instructions received from such persons shall beineffective and void, and none of this announcement, the Tender Offer Memorandumor any other documents or materials relating to the Offer or the Stock may bedistributed or made available in Italy. The Offer is not being made and this announcement and the Tender OfferMemorandum are not being distributed to the public in the United Kingdom, Franceor Belgium. In such jurisdictions, only the following persons may participate inthe Offer and receive this announcement and the Tender Offer Memorandum (as morefully set out in the Tender Offer Memorandum): United Kingdom (investment professionals and persons within Article 43(2) orotherwise of the Financial Services and Markets Act 2000 (Financial Promotion)Order 2005) / France (certain qualified investors and providers of portfoliomanagement investment services) / Belgium (institutional investors). This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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