29th Apr 2005 14:58
Not for release, publication or distribution in, into or from the United States, Canada, Australia, South Africa or Japan For immediate release 29 April 2005 Recommended Cash Offer by Dawnay, Day Corporate Finance Limited on behalf of Refco Trading Services (UK) Limited (a subsidiary of Refco Group Ltd., LLC) for the whole of the issued and to be issued share capital of EasyScreen plc not already owned by Refco Group EasyScreen plc Trading update and letter to shareholders The Board of EasyScreen wishes to provide the following trading update, whichis further to the Company's third quarter results announced on 24 March 2005.A letter from the Chairman of the Board of EasyScreen to EasyScreenShareholders, which is contained in a document being sent to EasyScreenShareholders today, is also set out below. If any EasyScreen shareholder doesnot receive the document, he/she should contact the Company immediately. * Turnover for the quarter ended 31 March 2005 9% lower than for the quarter ended 31 December 2004; turnover year on year up 4% * Trading update: EasyScreen continues to experience difficult trading conditions and the patent infringement claims by Trading Technologies International, Inc continue to have a detrimental effect on the market * Cash update: existing cash resources expected to run out during August 2005 Unless otherwise stated or the context requires otherwise, words and phrasesused in this announcment shall bear the definitions ascribed to them in theoffer document dated 4 April 2005 (the "Offer Document").Enquiries:Saffery Champness Corporate Finance + 44(0) 207 841 4000 Charles Simpson Set out below is the text of a letter sent to shareholders in EasyScreen today."Recommended Cash Offer by Refco Trading Services (UK) Limited for the whole of the issued and to be issued share capital of EasyScreen plc Trading Update As you will know, on 4 April 2005 Dawnay Day despatched its Offer Documentsetting out the terms of the recommended cash offer by Refco Trading Services(UK) Limited for the whole of the issued and to be issued share capital ofEasyScreen plc. The Offer Document included, on pages 3 to 6, a letter from me,explaining the background to the Offer and setting out the unanimousrecommendation of the Directors of EasyScreen that EasyScreen Shareholdersshould accept the Offer.The purpose of this letter is:(a) to provide a trading update to EasyScreen Shareholders; and(b) to explain why the EasyScreen Board continues to recommend that the Offerbe accepted.My letter to EasyScreen Shareholders contained in the Offer Document statedthat, at the time of the placing in September 2004, the Directors believed thatEasyScreen's existing strategic and marketing agreements and the RefcoEasySolutions joint venture had the potential to generate sufficient revenuesfor the EasyScreen Group to reach operating profitability and to become cashgenerative. The reasons for the difficult trading conditions since then wereset out in my letter of 4 April 2005; in particular the impact of the patentinfringement claims by Trading Technologies International, Inc. ("TT")continues to affect adversely the market. Notwithstanding this, the Board ofEasyScreen has noted press comment earlier this week regarding Refco's ownpatent dispute with TT and, in particular, the suggestion that Refco may ceaseto use TT's software. However, the position regarding these continuing disputesremains uncertain.The Directors wish to advise EasyScreen Shareholders that the headline turnoverof EasyScreen plc ("the Company") for the fourth quarter was 9% down ascompared to the third quarter to 31 December 2004. The principal reason forthis was a shortfall in datacentre sales as compared to the third quarter.However, for the year ended 31 March 2005, unaudited turnover was up by 4% yearon year. The Refco EasySolutions joint venture has again improved itsperformance.The Directors of EasyScreen now estimate that the EasyScreen Group's existingcash resources will run out during August 2005 at the current forward budgetedcash burn rate. The higher cash burn rate is due to additional expenses inrelation to the Offer. In addition, EasyScreen Shareholders are reminded thatby 29 October 2006, the EasyScreen Group will need to repay the ‚£2 millionConvertible Bond, plus accrued interest, which will amount to a further ‚£0.9million on maturity. Moreover, if EasyScreen defaults under the Bond Agreement,the holder of the Convertible Bond will be able to call for immediate repaymentof the Convertible Bond, plus accrued interest. The holder of the ConvertibleBond has a fixed and floating charge over all of the assets and undertaking ofthe Company to secure the Convertible Bond.The audit of the Company's results for the year ended 31 March 2005 is yet tobe completed. The Company will update the market further on current tradingwhen it announces its Preliminary Results in due course.The EasyScreen Board has, with the best interests of EasyScreen Shareholdersand the Company in mind, continued to evaluate possible alternative proposalsto the Refco Offer, as it has been made aware of their possible existence. Asat the date of this letter, the EasyScreen Board is not aware of the existenceof any other potential bidder for EasyScreen.If the Offer by Refco is not successful or the Offer process is prolonged,EasyScreen will have to take urgent action to reduce its current cash burnrate. Any cost reduction plan will require EasyScreen to retrench its business,which will result in the Company incurring exceptional costs. As the Companyhas only limited cash resources, the Company will also have to raise additionaland sufficient liquid resources to ensure that the Company can meet itsliabilities as they fall due.The EasyScreen Board continues to believe that raising sufficient funds at anattractive price, or at all, would be very difficult in view of current tradingconditions. If the Company is unable to raise additional and sufficient liquidresources to meet its liabilities as they fall due, then the EasyScreen Boardwill need to consider all options to protect the interests of creditors.In summary: * Trading conditions are difficult, and turnover is down on the previous quarter; * The market continues to be adversely affected by the patent infringement claims by Trading Technologies International, Inc.; * The Company's cash reserves are now expected to run out during August 2005; * We believe it will be very difficult to raise sufficient liquid funds at an attractive price, or at all; * If the Company is unable to raise such funds to meet its liabilities as they fall due, the EasyScreen Board will need to consider all options to protect the interests of creditors; and * The EasyScreen Board is not aware of the existence of any other potential bidder for EasyScreen. My letter to shareholders dated 4 April included the following recommendation:"The EasyScreen Board, who have been so advised by Saffery Champness CorporateFinance, believes that the terms of the Offer are fair and reasonable. Inproviding its advice to the EasyScreen Board, Saffery Champness CorporateFinance has taken into account the Directors' commercial assessments.Accordingly, the Directors of EasyScreen unanimously recommend that EasyScreenShareholders should accept the Offer. In support of this recommendation, theDirectors of EasyScreen have irrevocably undertaken to accept the Offer inrespect of their own beneficial shareholdings totally 4,687,649 EasyScreenShares, representing approximately 4.91 per cent. of its issued share capital."The EasyScreen Board continues to believe that the Offer is in the bestinterests of EasyScreen and its shareholders and recommends EasyScreenShareholders to accept the Refco Offer. In view of the difficulties likely tobe faced by the Company in the near term, EasyScreen Shareholders that areminded to accept the Offer are recommended to do so without delay.Yours faithfully,Philip DockerChairmanEasyScreen plcFor and on behalf of the Directors of EasyScreen"The Directors of EasyScreen accept responsibility for the information containedin this document regarding EasyScreen and themselves. To the best of theirknowledge and belief (having taken all reasonable care to ensure that such isthe case) the information contained in this document regarding EasyScreen andthemselves is in accordance with the facts and does not omit anything likely toaffect the import of such information. The only responsibility accepted by theDirectors of EasyScreen in respect of any other information, which has beencompiled from published sources, has been to ensure that such information hasbeen fairly reproduced and presented.Dawnay Day has approved this announcement for the purposes of Section 21 of theFinancial Services and Markets Act 2000.Dawnay Day, which is regulated by the Financial Services Authority, is actingfor Refco and no one else and will not be responsible to anyone other thanRefco for providing the protections afforded to customers of Dawnay Day or forproviding advice in relation to the Offer.Saffery Champness Corporate Finance, which is regulated by the Institute ofChartered Accountants in England and Wales, is acting exclusively forEasyScreen and no one else in connection with the Offer and will not beresponsible to anyone other than EasyScreen for providing the protectionsafforded to customers of Saffery Champness Corporate Finance or for providingadvice in relation to the Offer or any other matter referred to in thisdocument.The Offer is not being made directly or indirectly in or into, or by use of themails of, or by any means or instrumentality (including, without limitation,facsimile transmission, telex, email, internet and telephone) of interstate orforeign commerce of, or any facility of a national securities exchange of, theUnited States, nor is it being made directly or indirectly in or into Canada,Australia, South Africa or Japan, and the Offer cannot be accepted by any suchuse, means, instrumentality or facility or from or within the United States,Canada, Australia, South Africa or Japan. Accordingly, copies of thisannouncement, the Offer Document, the Form of Acceptance and any relateddocuments are not being and must not be, mailed or otherwise distributed,forwarded, transmitted or sent in, into or from the United States, Canada,Australia, South Africa or Japan and persons receiving this announcement, theOffer Document or the Form of Acceptance (including custodians, nominees andtrustees) must not mail or otherwise distribute, forward, transmit or send anyof them in, into or from the United States, Canada, Australia, South Africa orJapan. Doing so may render invalid any purported acceptance of the Offer.Further information for Overseas Shareholders is set out in the Offer Document.Any Person (including, without limitation, any nominee, trustee or custodian)who would, or otherwise intends to, or who may have a contractual or legalobligation to, mail, distribute, forward or transmit this announcement, theOffer Document, the Form of Acceptance or any related documents to anyjurisdiction outside the United Kingdom should read the relevant information inthe Offer Document before taking any action.Dated 29 April 2005 - 2 - ENDEASYSCREEN PLCRelated Shares:
EAS.L