28th Feb 2005 07:02
Rathbone Brothers PLC28 February 2005 RATHBONE BROTHERS PLC 27 FEBRUARY 2005 Pre-conditional offer proposal for Rensburg plc - update Since its announcement of 14 January 2005, Rathbone Brothers Plc ("Rathbones")has continued to work towards making a recommended offer for Rensburg plc ("Rensburg"). Rathbones has devoted significant time and management resource tothe evaluation of Rensburg and remains convinced that there are compellingstrategic, operational and financial arguments for a combination of the twobusinesses. Rathbones has completed the majority of its due diligence and received helpfulinput from Rensburg's senior management team during a series of constructivemeetings. As a result, Rathbones has refined and discussed with Rensburg itsviews on the proposed implementation plan and the likely cost savings. Thisincluded a proposed management structure and opportunities for senior managementcareer development and equity participation for Rensburg employees. The Boardof Rathbones believes that integration of the two businesses could besuccessfully achieved with low implementation risk, particularly utilisingRathbones' existing scaleable systems. Following these discussions, on 23 February 2005 Rathbones submitted a revisedpre-conditional offer proposal (the "Revised Offer Proposal") for the entireissued share capital of Rensburg on the following terms. For each Rensburgshare: • a fixed share exchange ratio of 0.74 new Rathbones shares (see note 4); and • 50 pence in cash, by way of a special dividend declared by Rensburg in conjunction with the transaction. On the basis of the closing price of Rathbones shares on 25 February 2005 of 819pence, the Revised Offer Proposal values each Rensburg share at 656 pence, a 31per cent. premium to the price of 500 pence at which Rensburg shares weresuspended on 10 December 2004. Going forward, the exact value of the RevisedOffer Proposal will vary depending on the Rathbones share price. In addition tothese terms, Rensburg shareholders would retain their right to receiveRensburg's proposed final dividend of 12 pence per Rensburg share for thefinancial year ended 30 November 2004. This Revised Offer Proposal, which remained subject to certain pre-conditions,including the recommendation of the Rensburg board, was rejected by the Rensburgboard on 25 February 2005. The Board of Rathbones considers that the Revised Offer Proposal represents afull and fair valuation of Rensburg and provides Rensburg shareholders with theopportunity to participate in the enhanced prospects of the enlarged group. Inparticular, the Board of Rathbones believes its proposal would provide Rensburgshareholders with: • a shareholding in a well-regarded independent group which is firmly within the FT-SE 250 with a 100 per cent. free float; • an immediate capital uplift; and • an increase in income. Mark Powell, Chairman of Rathbone Brothers Plc, said: "We have enjoyed fullcooperation from Rensburg and this led to us submitting an improved proposal.Our increased understanding of Rensburg and constructive dialogue with a broadrange of Rensburg's senior people has led us to be confident of the culturalfit, likely cost savings and the low implementation risk of bringing these twosuccessful businesses together. We continue to believe this would be of realbenefit to the shareholders, clients and staff of both groups." Ends Enquiries: Rathbone Brothers Plc 020 7399 0000Mark Powell, ChairmanAndy Pomfret, Chief Executive Financial Dynamics Geoffrey Pelham-Lane 07733 124226Ed Gascoigne-Pees 07884 001949 Dresdner Kleinwort Wasserstein 020 7623 8000Christopher Baird Hawkpoint 020 7665 4500Charles Williams Bridgewell 020 7003 3000Ben Money-Coutts Dresdner Kleinwort Wasserstein Limited ("DrKW"), which is authorised andregulated in the United Kingdom by the Financial Services Authority, is actingfor Rathbones and no one else in connection with this matter and will not beresponsible to anyone else other than Rathbones for providing the protectionsafforded to customers of DrKW or for giving advice in relation to this matter orin relation to the contents of this announcement. Hawkpoint Partners Limited ("Hawkpoint"), which is authorised and regulated inthe United Kingdom by the Financial Services Authority, is acting for Rathbonesand no one else in connection with this matter and will not be responsible toanyone else other than Rathbones for providing the protections afforded tocustomers of Hawkpoint or for giving advice in relation to this matter or inrelation to the contents of this announcement. Bridgewell Securities Limited ("Bridgewell"), which is authorised and regulatedin the United Kingdom by the Financial Services Authority, is acting forRathbones and no one else in connection with this matter and will not beresponsible to anyone else other than Rathbones for providing the protectionsafforded to customers of Bridgewell or for giving advice in relation to thismatter or in relation to the contents of this announcement. Notes to editors: 1. Rathbones will announce its preliminary results for the year ended 31 December 2004 on 2 March 2005. 2. As stated on 14 January 2005, Rathbones reserves the right to reconsider its requirement for a number of pre-conditions to its proposal. 3. Sources and bases of information. a) Comparison of capital upliftMarket value of one Rensburg share on 9 December 2004, prior to its suspension on 10 500pDecember 2004 Market value of 0.74 new Rathbones shares, based on a Rathbones share price of 819 pence 606p(the closing share price on 25 February 2005)Special dividend to be declared by Rensburg as part of Revised Offer Proposal 50pTotal value 656p Increase in value per Rensburg share 156p b) Comparison of incomeRensburg2003/04 interim dividend 6.0p2003/04 proposed final dividend 12.0pGross dividend on one Rensburg share 18.0p Rathbones2003 final dividend 16.0p2004 interim dividend 10.5pGross dividend on one Rathbones share 26.5p Equivalent to gross dividend on 0.74 new Rathbones shares 19.6p Gross annual interest of 4.6% (the gross annual redemption yield on 8.5% 2005 UK Gilt as 2.3pobtained from the Financial Times on 26 February 2005) on 50p special dividend to bedeclared by Rensburg as part of Revised Offer Proposal Increase in gross income per Rensburg share 3.9p 4. Fractions of new Rathbones shares will not be allotted or issued. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
RathboneRevel Collect