- Title:
Avenue Acquisition of Coats - Time:
16:26:00 - Date:
6 Mar 2003 - Category:
Acquisitions and alliances - ID:
1084_
Released : 06/03/2003 16:26
GPG (UK) Holdings PLC
06 March 2003
For immediate release
Part 1 of 3
THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN
PART IN OR INTO THE UNITED STATES, CANADA OR JAPAN.
6 March, 2003
RECOMMENDED CASH OFFER BY AVENUE ACQUISITION PLC FOR COATS PLC
Avenue Acquisition plc, a UK unconsolidated joint venture company in which the
Guinness Peat Group holds an effective 50% voting interest, and Coats plc, today
released a joint announcement, attached.
Richard Russell
Company Secretary
Guinness Peat Group plc
(0) 20 7484 3370
6 March 2003
Enquiries
Mark Butcher Tel: (0) 20 7484 3370
For immediate release
Part 1 of 3
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN OR INTO THE
UNITED STATES, CANADA, JAPAN OR AUSTRALIA
6 March, 2003
RECOMMENDED CASH OFFER BY AVENUE ACQUISITION PLC FOR COATS PLC
• The Boards of Coats plc and Avenue Acquisition plc
announce that they have agreed the terms of a recommended cash offer for Coats,
to be made by Strand Partners on behalf of Avenue Acquisition, with an aggregate
value to Coats Shareholders of 58.5 pence per Coats Share.
• Coats Shareholders will be offered 56 pence in cash
per Coats Share and, subject to the Coats Share Offer becoming or being declared
unconditional in all respects, will receive a special second interim dividend of
2.5 pence per Coats Share. The Coats Board declared the Special Dividend of 2.5
pence per Coats Share on 5 March, 2003.
• Coats Shareholders who validly accept the Coats Share
Offer of 56 pence per Coats Share may elect to receive Avenue Acquisition
Convertible Stock instead of part, or all, of the cash consideration to which
they would otherwise be entitled, on the basis of £1 nominal of Convertible
Stock for each £1 cash consideration payable under the Coats Share Offer. The
Convertible Stock Alternative may not be taken up in respect of the Special
Dividend of 2.5 pence per Coats Share, which will be paid in cash.
• The Coats Board will not be recommending that Coats
Shareholders elect to receive (in whole or in part) the Convertible Stock
Alternative.
• Avenue Acquisition is a UK public company newly-formed
by a consortium comprising GPG (UK) Holdings plc, a subsidiary of Guinness Peat
Group plc, RIT Capital Partners plc and certain parties connected to it and
Chapman International Investments Limited. Avenue Acquisition and the Consortium
together hold 255,349,152 Coats Shares, representing 36.07 per cent. of the
entire issued ordinary share capital of Coats.
• Colmar, which is deemed to be acting in concert with
the Consortium and Avenue Acquisition, owns 9,750,000 Coats Shares, representing
1.38 per cent. of the entire issued ordinary share capital of Coats.
Accordingly, the Concert Party holds, in aggregate, 265,099,152 Coats Shares,
representing 37.44 per cent. of the entire issued ordinary share capital of
Coats.
• The aggregate value available to Coats Shareholders
under the Coats Share Offer (inclusive of the Special Dividend) of 58.5 pence
per Coats Share represents a premium of 30.73 per cent. to the closing
middle-market price of 44.75 pence per Coats Share on 12 February, 2003 (being
the last dealing day prior to the date on which Coats announced that it had
received an approach from the Consortium regarding a possible cash offer for
Coats) and values the entire issued ordinary share capital of Coats at £414.16
million.
• Coats is today announcing its preliminary results for
the year ended 31 December, 2002.
• Avenue Acquisition, which has already acquired GPG
Holdings' total holding of 179,082,728 Coats Shares, representing 25.30 per
cent. of the entire issued ordinary share capital of Coats, has received
undertakings from the RIT Parties and Chapman to accept the Convertible Stock
Alternative in respect of 56,255,116 Coats Shares, representing 7.95 per cent.
of the entire issued ordinary share capital of Coats, and undertakings from the
RIT Parties and Colmar to accept cash under the Coats Share Offer in respect of
29,761,308 Coats Shares, representing 4.20 per cent. of the entire issued
ordinary share capital of Coats. The circumstances under which these irrevocable
undertakings lapse are set out in paragraph 14 of Part 2 of this announcement.
Commenting on the announcement of the Offers, Mark Butcher, a Director of Avenue
Acquisition said:
'We look forward to working with management towards realising the potential that
we believe is inherent in the Thread business.'
Coats Chairman Sir Harry Djanogly said:
'This offer will enable the Group to move forward and continue the successful
implementation by current management and employees of the Thread strategy
currently in place. The price being offered represents fair value for
shareholders and will therefore be recommended by the Board.'
Enquiries:
Avenue Acquisition plc Tel: (020) 7484 3370
Mark Butcher, Director
Ross Burney
Strand Partners Limited Tel: (020) 7409 3494
(Financial Adviser to Avenue Acquisition)
Simon Raggett
Warren Pearce
Weber Shandwick Square Mile Tel: (020) 7067 0700
(Public Relations Adviser to Avenue Acquisition)
Kevin Smith
Josh Royston
Cazenove & Co. Ltd Tel: (020) 7588 2828
(Joint Financial Adviser to Coats plc)
Julian Cazalet
Malcolm Moir
HSBC Bank plc Tel: (020) 7991 8888
(Joint Financial Adviser to Coats plc)
Aidan Wallis
Marcus Ayre
Brunswick Group Limited Tel: (020) 7404 5959
(Public Relations Adviser to Coats)
Patrick Handley
Katya Reynier
Strand Partners, which is regulated in the United Kingdom by the Financial
Services Authority, is acting for Avenue Acquisition and no one else in
connection with the Offers and will not be responsible to anyone other than
Avenue Acquisition for providing the protections afforded to clients of Strand
Partners nor for giving advice in relation to the Offers.
Cazenove, which is regulated in the United Kingdom by the Financial Services
Authority, is acting for Coats and no one else in connection with the Offers and
will not be responsible to anyone other than Coats for providing the protections
afforded to clients of Cazenove nor for giving advice in relation to the Offers.
HSBC, which is regulated in the United Kingdom by the Financial Services
Authority, is acting for Coats and no one else in connection with the Offers and
will not be responsible to anyone other than Coats for providing the protections
afforded to clients of HSBC nor for giving advice in relation to the Offers.
The Panel wishes to draw the attention of member firms of the Australian Stock
Exchange and the New Zealand Stock Exchange to certain UK dealing disclosure
requirements in respect of relevant securities during an offer period. An offer
period was deemed to have commenced on 13 February, 2003 with the announcement
by Coats that it had received an approach from the Consortium regarding a
possible cash offer for Coats. Relevant securities, for the purposes of Rule 8
of the City Code, include:
(i) Coats Shares;
(ii) Avenue Acquisition Shares and Avenue Acquisition Convertible
Stock;
(iii) Avenue Holdings Shares;
(iv) any security that is convertible into Coats Shares, Avenue
Acquisition Shares, Avenue Acquisition Convertible Stock or Avenue Holdings
Shares, including the Coats Senior Convertible Bonds; and
(v) any securities, including options and derivatives, carrying rights
to subscribe for Coats Shares, Avenue Acquisition Shares, Avenue Acquisition
Convertible Stock or Avenue Holdings Shares, including Coats Share Options.
The taking, granting or exercising of an option (including a traded option
contract) to subscribe for or otherwise acquire any security listed above or the
exercise or conversion of any security listed above, whether in respect of new
or existing securities, and the acquisition of, entering into, closing out,
exercise (by either party) of any rights under, or variation of, a derivative
will be regarded as a dealing in relevant securities.
The disclosure requirements referred to below are set out in more detail in Rule
8 of the City Code. In particular Rule 8.3 of the City Code requires public
disclosure of dealings during an offer period by persons who own or control, or
who would as a result of any transaction own or control, 1 per cent. or more of
any class of any of the relevant securities described above. Note 5 to Rule 8 of
the City Code specifies the details that must be included in a disclosure and
makes reference to the Dealing Disclosure Form required to be submitted, copies
of which may be obtained from the Panel at the address specified below or from
the Panel's website, www.thetakeoverpanel.org.uk. A copy of the City Code in its
entirety may also be found at the Panel's website, for further information.
The obligation for disclosure during the offer period commenced on 13 February,
2003 and will conclude on the first closing date of the Offers or, if later, the
date on which the Offers become or are declared unconditional as to acceptances,
or lapse. Disclosure should be made on a Dealing Disclosure Form by no later
than 12 noon on the business day following the date of the dealing transaction.
These disclosures should be made via a regulatory information service such as
the Regulatory News Service of the London Stock Exchange, by fax (fax number:
+44 (0) 20 7588 6057) or by electronic delivery on the appropriate form with a
copy sent to the Panel (fax number: +44 (0) 20 7256 9386, e-mail:
[email protected]). If you are in any doubt as to the action that you
should take with regard to Rule 8 of the City Code you are requested to contact
the Panel on +44 (0) 20 7638 0129 for further information.
The Offers are not being made directly or indirectly in or into the United
States, Canada, Japan or Australia. Accordingly, copies of this announcement
are not being, and must not be, mailed or otherwise distributed or sent in or
into or from the United States, Canada, Japan or Australia. Custodians,
nominees and trustees should observe these restrictions and must not distribute,
send or otherwise forward this announcement in, into or from the United States,
Canada, Japan or Australia. However, custodians, nominees and trustees who are
not US Persons but who hold Coats Shares or Coats Senior Convertible Bonds on
behalf of or for the account of US Persons who are able to satisfy Avenue
Acquisition that they are accredited investors (as defined in Regulation D under
the US Securities Act), may be entitled to accept the Offers from outside the
United States.
Further, the availability of the Offers to Overseas Shareholders may be affected
by the laws of the relevant jurisdictions. Persons who are not resident in the
United Kingdom should inform themselves about and observe any applicable
requirements of those jurisdictions.
The Avenue Acquisition Directors, whose names appear in paragraph 9 of Part 2 of
this announcement, accept responsibility for the information contained in this
announcement save for any information relating to Coats, GPG, GPG Holdings, the
RIT Parties or Chapman. To the best of the knowledge and belief of the Avenue
Acquisition Directors (who have taken all reasonable care to ensure that such is
the case), the information contained in this announcement is in accordance with
the facts and does not omit anything likely to affect the import of such
information.
The directors of Coats (other than Blake Nixon, whose position is described in
paragraph 18 of Part 2 of this announcement), whose names appear in paragraph 8
of Part 2 of this announcement, accept responsibility for the information
contained in this announcement relating to Coats. To the best of the knowledge
and belief of the directors of Coats (who have taken all reasonable care to
ensure that such is the case), such information is in accordance with the facts
and does not omit anything likely to affect the import of such information.
The directors of GPG, whose names appear in paragraph 10.1 of Part 2 of this
announcement, accept responsibility for the information contained in this
announcement relating to GPG and GPG Holdings. To the best of the knowledge and
belief of the directors of GPG (who have taken all reasonable care to ensure
that such is the case), such information is in accordance with the facts and
does not omit anything likely to affect the import of such information.
The directors of RIT, whose names appear in paragraph 10.2 of Part 2 of this
announcement, accept responsibility for the information contained in this
announcement relating to the RIT Parties. To the best of the knowledge and
belief of the directors of RIT (who have taken all reasonable care to ensure
that such is the case), such information is in accordance with the facts and
does not omit anything likely to affect the import of such information.
The directors of Chapman, whose names appear in paragraph 10.3 of Part 2 of this
announcement, accept responsibility for the information contained in this
announcement relating to Chapman. To the best of the knowledge and belief of the
directors of Chapman (who have taken all reasonable care to ensure that such is
the case), such information is in accordance with the facts and does not omit
anything likely to affect the import of such information.
This announcement does not constitute, or form part of, an offer or an
invitation to purchase any securities. This announcement has been issued by
Strand Partners and has been approved by Strand Partners solely for the purposes
of section 21 of the Financial Services and Markets Act 2000.
This summary should be read in conjunction with the full text in Parts 2 and 3
of this announcement. Appendix II contains definitions of certain expressions
used in this announcement.
Part 2 of 3
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN OR INTO THE
UNITED STATES, CANADA, JAPAN OR AUSTRALIA
6 March, 2003
RECOMMENDED CASH OFFER BY AVENUE ACQUISITION PLC FOR COATS PLC
1. Introduction
The Boards of Coats and Avenue Acquisition announce that they have agreed the
terms of a recommended cash offer to be made by Strand Partners on behalf of
Avenue Acquisition for all of the Coats Shares not held by Avenue Acquisition.
On 7 February, 2003, Avenue Acquisition, a UK public company newly-formed by the
members of the Consortium for the purpose of making the Offers, acquired
175,000,000 Coats Shares and on 10 February, 2003 a further 4,082,728 Coats
Shares, in each case, from GPG Holdings, in exchange for the issue to GPG
Holdings of, in aggregate, £100,286,328 nominal of Convertible Stock. As part of
these transactions, GPG Holdings will be entitled to receive the Special
Dividend in respect of all such Coats Shares. These acquisitions were of GPG
Holdings' total holding of Coats Shares, representing 25.30 per cent. of the
entire issued ordinary share capital of Coats. The RIT Parties and Chapman hold,
in aggregate, 76,266,424 Coats Shares, representing 10.77 per cent. of the
entire issued ordinary share capital of Coats. The Consortium and Avenue
Acquisition therefore hold, in aggregate, 255,349,152 Coats Shares representing
36.07 per cent. of the entire issued ordinary share capital of Coats.
Colmar, which is deemed to be acting in concert with the Consortium and Avenue
Acquisition, owns 9,750,000 Coats Shares, representing 1.38 per cent. of the
entire issued ordinary share capital of Coats. Accordingly, the Concert Party
holds, in aggregate, 265,099,152 Coats Shares, representing 37.44 per cent. of
the entire issued ordinary share capital of Coats.
2. The Coats Share Offer
The aggregate value available to Coats Shareholders under the Coats Share Offer
(inclusive of the Special Dividend) will be 58.5 pence per Coats Share. This
represents a premium of 30.73 per cent. to the closing middle market price of
44.75 pence per Coats Share on 12 February, 2003 (being the last dealing day
prior to the date on which Coats announced that it had received an approach from
the Consortium regarding a possible cash offer for Coats).
The Coats Share Offer will be made on the terms and subject to the condition set
out in this announcement and on the further terms to be set out in the Offer
Document and in the Coats Share Offer Form of Acceptance, on the following
basis:
For each Coats Share 56 pence in cash
In addition, if the Coats Share Offer becomes or is declared unconditional in
all respects Coats will pay the Special Dividend of 2.5 pence per Coats Share.
The Coats Share Offer together with the Special Dividend values the entire
issued ordinary share capital of Coats at £414.16 million. The Coats Board
declared the Special Dividend on 5 March, 2003.
The Coats Share Offer will extend to any Coats Shares unconditionally allotted
or issued on or before the date on which the Coats Share Offer closes (or such
earlier date as Avenue Acquisition may, subject to the City Code, decide) as a
result of the conversion of Coats Senior Convertible Bonds or the exercise of
options or other rights or entitlements or the vesting of awards granted under
the Coats Share Schemes.
The Coats Shares will be acquired by Avenue Acquisition fully paid and free from
all liens, charges, equitable interests, encumbrances and other third party
rights of any kind whatsoever together with all rights now or hereafter
attaching thereto, including the right to receive and retain all dividends and
other distributions (if any) declared, made or paid after the date of this
announcement other than the Special Dividend. Subject to the Coats Share Offer
becoming or being declared unconditional in all respects, a Coats Shareholder
who accepts cash under the Coats Share Offer will receive 56 pence in cash from
Avenue Acquisition under the Coats Share Offer and, subject to him qualifying
for the Special Dividend, the Special Dividend of 2.5 pence for each Coats Share
held by him. The Special Dividend will be payable to Coats Shareholders on the
register of members of Coats at the close of business on the date the Coats
Share Offer becomes or is declared unconditional in all respects (and will be
paid to all such Coats Shareholders at the same time as the cash consideration
is first paid to holders of Coats Shares under the Coats Share Offer).
Coats Shareholders should be aware that Avenue Acquisition may seek to acquire
Coats Shares in the market prior to despatch of the Offer Document. Any such
acquisitions will be limited such that the number of Coats Shares already held
or contracted to be acquired by Avenue Acquisition at the time that the Offer
Document is posted will represent not more than 50 per cent. of the entire
issued ordinary share capital of Coats.
3. The Convertible Stock Alternative
Coats Shareholders who validly accept the Coats Share Offer may elect to receive
Avenue Acquisition Convertible Stock instead of part, or all, of the cash
consideration to which they would otherwise be entitled under the Coats Share
Offer on the following basis:
For each £1 of cash consideration
payable under the Coats Share Offer £1 nominal of Convertible Stock
The Convertible Stock, which will not be guaranteed, will constitute unsecured
obligations of Avenue Acquisition and will be subordinated in right of payment
to the facility provided by Bank of Scotland Corporate Banking (described in
paragraph 13 below) and, on a winding-up, to all other indebtedness of Avenue
Acquisition. The full terms of the Convertible Stock will be set out in the
Offer Document.
The Convertible Stock Alternative may not be taken up in respect of the Special
Dividend of 2.5 pence per Coats Share, which will be paid in cash.
The Convertible Stock will be convertible into Avenue Holdings A Ordinary Shares
on the basis of one Avenue Holdings A Ordinary Share for each £1 nominal of
Convertible Stock held. Coats Shareholders should be aware that, except for
certain permitted transfers, transfers of Convertible Stock will be prohibited
for three years from the date on which the Convertible Stock is issued. The
transfer provisions relating to the Convertible Stock will be summarised in the
Offer Document. Avenue Holdings is an unquoted company newly incorporated in the
British Virgin Islands. The Avenue Holdings A Ordinary Shares will be
transferable only in accordance with the provisions contained in Avenue
Holdings' articles of association. A detailed summary of Avenue Holdings'
articles of association and the rights attaching to the Avenue Holdings A
Ordinary Shares and the other classes of shares in Avenue Holdings will be set
out in the Offer Document.
Coats Shareholders who elect to receive part only of the consideration payable
to them under the Coats Share Offer in Convertible Stock will receive the
balance in cash.
The Convertible Stock will be issued credited as fully paid and in denominations
and integral multiples of £1 nominal. Entitlements to Convertible Stock will be
rounded down to the nearest pound. Any balance of less than £1 will not be
payable.
The Convertible Stock will bear a fixed coupon at the rate of 5.0 per cent. per
annum. The coupon will accrue over the term of the Convertible Stock but will
only become payable when the Convertible Stock is redeemed. All accrued coupon
will be forfeited on conversion of the Convertible Stock.
Holders of Convertible Stock will have the right to convert the Convertible
Stock held by them during the period commencing 30 days and ending 60 days after
the date on which the Coats Share Offer becomes or is declared unconditional in
all respects. It is the intention of each member of the Consortium to convert
all of the Convertible Stock held by it.
If not converted, Convertible Stock held by any former Coats Shareholder will be
redeemed at par, together with accrued coupon, on the date falling twenty years
and one day following the date on which it was issued.
GPG Holdings has sold its total holding of Coats Shares, representing 25.30 per
cent. of the entire issued ordinary share capital of Coats, to Avenue
Acquisition at the price of the Coats Share Offer. The consideration for such
Coats Shares was the issue to GPG Holdings of, in aggregate, £100,286,328
nominal of Convertible Stock. The RIT Parties and Chapman have given
undertakings to accept the Convertible Stock Alternative in respect of, in
aggregate, 56,255,116 Coats Shares, representing 7.95 per cent. of the entire
issued ordinary share capital of Coats. Further details of the undertakings
received by Avenue Acquisition to accept the Offers are set out in paragraph 14
below.
The Convertible Stock Alternative will lapse if the Coats Share Offer lapses or
is withdrawn. It is intended that the Convertible Stock Alternative will be
closed at the earliest possible opportunity, subject to the provisions of the
City Code.
4. Recommendation relating to the Coats Share Offer
The Coats Board (other than Blake Nixon, whose position is described in
paragraph 18 below) considers that the terms of the Coats Share Offer are fair
and reasonable. The Coats Board will therefore recommend Coats Shareholders to
accept the cash available under the Coats Share Offer. Further details for the
reasons for the Coats Board's recommendation will be set out in the Offer
Document.
The Coats Board considers that the Convertible Stock Alternative has
characteristics that make it unlikely to be appropriate for the majority of
Coats Shareholders. Any Coats Shareholder who is contemplating electing (in
whole or in part) to receive the Convertible Stock Alternative is strongly
advised to seek independent financial advice.
The views of the Coats Board as set out above are consistent with advice from
Cazenove and HSBC, the financial advisers to Coats. In providing their advice,
Cazenove and HSBC have taken into account the Coats Board's commercial
assessments of the Coats Share Offer and the Convertible Stock Alternative.
5. The Coats Bond Offer
Avenue Acquisition also announces the terms of a cash offer, to be made on its
behalf by Strand Partners, for all of the Coats Senior Convertible Bonds.
The Coats Bond Offer is required to be made under Rule 15 of the City Code. It
should be noted that the Coats Senior Convertible Bonds are redeemable at par
(together with accrued but unpaid interest) on 9 August, 2003. Accordingly, the
Coats Board will not, in accordance with advice received from Cazenove and HSBC,
be recommending that Coats Bondholders accept the Coats Bond Offer. Coats
Bondholders wishing to obtain immediate value from their Coats Senior
Convertible Bonds should consider selling them in the market.
The Coats Bond Offer will be made on the terms and subject to the condition set
out in this announcement and on the further terms to be set out in the Offer
Document and in the Coats Bond Offer Form of Acceptance, on the following basis:
For every £1,000 nominal of Coats Senior Convertible Bonds £216.67
in cash
The Coats Bond Offer values all of the Coats Senior Convertible Bonds at £13.10
million.
The Coats Senior Convertible Bonds will be acquired by Avenue Acquisition fully
paid and free from all liens, charges, equitable interests, encumbrances and
other third party rights of any kind whatsoever, and together with all rights
now or hereafter attaching thereto including the right to receive and retain all
accrued but unpaid interest on the Coats Senior Convertible Bonds.
6. Coats Preference Shares
Avenue Acquisition does not propose to make any offer to the holders of the
Coats Preference Shares.
7. Background to and reasons for the Offers
GPG, the RIT Parties and Chapman currently hold, in aggregate, 36.07 per cent.
of the entire issued ordinary share capital of Coats. The members of the
Consortium have decided to assume greater proprietorial control over their
substantial investments in Coats and as such have formed Avenue Acquisition in
order to make the Offers.
Assuming that the Coats Share Offer becomes or is declared unconditional in all
respects, the Consortium intends that the Coats Board should comprise:
- Blake Nixon (as acting non-executive Chairman);
- Martin Flower, Jonathan Lea and Bryan Anderson (the existing
executive directors of Coats);
- Anthony Gibbs and Dr. Gary Weiss (as non-executive directors and
representatives of GPG);
- Donald La Vigne (as a non-executive director and representative of
the RIT Parties); and
- Rex Wood-Ward (as a non-executive director and representative of
Chapman).
In addition, the Consortium has undertaken to ensure that the Coats Board
contains at least one non-executive director who is independent of the members
of the Consortium until such time as Avenue Acquisition has acquired the entire
issued ordinary share capital of Coats.
The Consortium supports the existing Coats management and its current strategy
for growing the thread business.
Together with the Special Dividend, the Coats Share Offer provides a certain
cash exit at a 30.73 per cent. premium to the closing share price of 44.75 pence
per Coats Share on 12 February, 2003 (being the last dealing day prior to the
date on which Coats announced that it had received an approach from the
Consortium regarding a possible cash offer for Coats).
8. Information on Coats
Coats is a UK public company that is listed on the London Stock Exchange. Coats'
core business is the manufacture, processing and distribution of thread for
industrial and home use. Coats announced on 23 January, 2003 that it had
disposed of the majority of its fashion retail interests and that discussions
with potential buyers of its bedwear division were continuing.
The Directors of Coats are Sir Harry Djanogly, Martin Flower, Jonathan Lea,
Bryan Anderson, Blake Nixon, Sir Victor Blank and Keith Merrifield.
Coats' preliminary results for the year ended 31 December, 2002 are being
released separately today.
9. Information on Avenue Acquisition and Avenue Holdings
Avenue Acquisition is a newly incorporated UK public company that was formed
specifically for the purpose of making the Offers. It is a wholly-owned
subsidiary of Avenue Holdings. Avenue Holdings is a newly incorporated
international business company registered in the British Virgin Islands. Except
for the acquisitions of Coats Shares referred to in paragraph 1 above, neither
Avenue Acquisition nor Avenue Holdings has traded prior to the date of this
announcement.
The nominal value of the issued share capital of Avenue Holdings on the date of
this announcement is £62,500, divided into 12,500 Class A1 ordinary shares of £1
par value each and 50,000 Class B1 ordinary shares of £1 par value each. These
shares are held as to 50,000 Class B1 ordinary shares by GPG Holdings, 6,250
Class A1 ordinary shares by the RIT Parties (collectively) and 6,250 Class A1
ordinary shares by Chapman. The voting rights of Avenue Holdings are currently
held as to 50 per cent. by GPG Holdings, 25 per cent. by the RIT Parties
(collectively) and 25 per cent. by Chapman. It is intended that, prior to the
date on which the Offers are made, GPG Holdings will transfer its entire holding
of Class B1 ordinary shares in Avenue Holdings to its wholly-owned subsidiary,
GPG Guarantee.
On conversion of the Convertible Stock, all of the shares currently issued in
Avenue Holdings will automatically convert into non-voting deferred shares of £1
par value each with limited economic rights. GPG Holdings holds all of the
Convertible Stock currently in issue.
The Directors of Avenue Acquisition and Avenue Holdings are Mark Butcher, Donald
La Vigne, Dr. Gary Weiss and Rex Wood-Ward.
Further information on Avenue Acquisition and Avenue Holdings will be set out in
the Offer Document.
10. Information on the members of the Consortium
10.1 GPG
GPG is a strategic investment company whose shares are listed on the London
Stock Exchange, the Australian Stock Exchange and the New Zealand Stock
Exchange. GPG invests internationally in a wide range of sectors.
The Directors of GPG are Sir Ron Brierley, Graeme Cureton, Anthony Gibbs, Trevor
Beyer, Blake Nixon and Dr. Gary Weiss.
For the year ended 31 December, 2001, GPG's consolidated turnover was £350.8
million (2000: £148.2 million) and profit before taxation was £55.9 million
(2000: £21.0 million). Net assets at 30 June, 2002 were £367.5 million.
10.2 The RIT Parties
RIT is a public company which is an investment trust for tax purposes. RIT's
shares are listed on the London Stock Exchange and RIT is based in the UK.
The Directors of RIT are Charles Bailey, Timothy Barakett, Mikael Breuer-Weil,
Duncan Budge, Andrew Knight, Baron Lambert, Jean Pigozzi, Lord Rothschild and
Michael Sofaer.
In addition, the RIT Parties comprise two family settlements representing Lord
Rothschild's family interests, an investment vehicle for Lord Rothschild's
family interests, a United States registered charitable trust and a family
settlement representing Mr Knight's family interests, Mr Knight being a director
of RIT.
10.3 Chapman
Chapman, a limited company incorporated in the British Virgin Islands, acts as
an investment vehicle for its shareholders and has investments in two quoted
companies in the United Kingdom, being Emess plc and Coats.
The Directors of Chapman are Howard Callow, Kenneth Jones and Jeffrey Bell.
10.4 Shareholders Agreement
GPG Holdings, the RIT Parties and Chapman have entered into a shareholders
agreement that contains, inter alia, provisions regarding the making and conduct
of the Offers by Avenue Acquisition, restrictions on the Consortium acquiring
Coats Shares during the Offer Period other than through Avenue Acquisition and
an undertaking by each member of the Consortium to procure that Avenue
Acquisition does not purchase Coats Shares at a price that is higher than the
price per Coats Share at which the Coats Share Offer is being made without prior
consent. Further details of the Shareholders Agreement will be set out in the
Offer Document.
11. Management and employees
Avenue Acquisition has given assurances to the Coats Board that, following the
Coats Share Offer becoming or being declared unconditional in all respects, the
existing employment rights, including pension rights, of the management and
employees of Coats will be fully safeguarded.
It has been agreed by Coats and Avenue Acquisition that an independent trustee
should be appointed to the board of trustees of the Coats Pension Plan. No
change to the existing trustees will be made pending such appointment.
12. Coats Share Schemes and Coats Senior Convertible Bonds
The Coats Share Offer will extend to any Coats Shares unconditionally allotted
or issued on or before the date on which the Coats Share Offer closes (or such
earlier date as Avenue Acquisition may, subject to the City Code, decide) as a
result of the conversion of Coats Senior Convertible Bonds or the exercise of
options or other rights or entitlements or the vesting of awards granted under
the Coats Share Schemes.
Persons to whom Coats Shares are issued or allotted upon conversion of Coats
Senior Convertible Bonds or pursuant to the exercise of Coats Share Options
after the close of business on the date on which the Coats Share Offer becomes
or is declared unconditional in all respects will not receive the Special
Dividend.
In the event that the Coats Share Offer becomes or is declared unconditional in
all respects, Avenue Acquisition will make appropriate proposals to holders of
Coats Share Options in respect of those options the exercise price of which is
less than 58.5 pence. These proposals will include arrangements to enable option
holders to agree to the cancellation of their options in consideration for the
payment in cash of the amount by which the relevant option exercise price is
less than 58.5 pence.
13. Financing of the Offers
The cash consideration payable under the Coats Share Offer is being financed
through a £248.0 million secured term loan facility that is being provided by
Bank of Scotland Corporate Banking and a £27.25 million unsecured term loan
facility that is being provided by GPG Holdings. Further details of these
facilities will be set out in the Offer Document.
The Coats Bond Offer is being financed through a separate £13.10 million
unsecured term loan facility provided by GPG Holdings. Further details of this
facility will be set out in the Offer Document.
Strand Partners is satisfied that sufficient cash resources are available to
Avenue Acquisition to satisfy full acceptance of the Offers. The availability of
such cash resources is subject only to the Offers becoming or being declared
unconditional in all respects. Taking account of the undertakings given by
members of the Consortium to accept the Convertible Stock Alternative (referred
to in paragraph 14 below) and assuming (i) a requirement to cash cancel all
Coats Share Options the exercise price of which is less than 58.5 pence and (ii)
full acceptance of the cash element of the Offers, the Offers would involve a
maximum cash payment of £279.55 million.
14. Undertakings to accept the Offers
Avenue Acquisition has received undertakings to accept the Coats Share Offer and
to elect for the Convertible Stock Alternative from the RIT Parties and Chapman
in respect of 56,255,116 Coats Shares (in aggregate), representing 7.95 per
cent. of the entire issued ordinary share capital of Coats. In addition, Avenue
Acquisition has received undertakings from the RIT Parties and Colmar to accept
the cash element of the Coats Share Offer in respect of 29,761,308 Coats Shares
(in aggregate), representing 4.20 per cent. of the entire issued ordinary share
capital of Coats.
The undertakings given by the RIT Parties and Chapman will lapse in the event
that the Coats Share Offer lapses or is withdrawn.
The undertaking given by Colmar in respect of 9,750,000 Coats Shares will lapse
if a competing offer for Coats is announced on or before the forty-second day
after posting of the Offer Document and such competing offer (i) is at a cash or
share equivalent price of more than 58.5 pence per Coats Share, (ii) has an
acceptance condition that is no higher than 74% of the voting rights exercisable
at general meetings of Coats, and (iii) either is not subject to any anti-trust,
competition or similar conditions or, in the event that it is, such conditions
are satisfied or waived within 35 days of the posting to Coats Shareholders of
the formal offer document containing the competing offer.
Further details of the terms of these undertakings and elections to receive
Convertible Stock will be set out in the Offer Document.
15. Compulsory acquisition, de-listing and re-registration
If sufficient acceptances of the Coats Share Offer are received and / or
sufficient Coats Shares are otherwise acquired, Avenue Acquisition will exercise
its rights under sections 428 to 430(F) (inclusive) of the Companies Act to
acquire compulsorily any remaining Coats Shares.
It is intended that if Avenue Acquisition receives acceptances of the Coats
Share Offer that, together with Coats Shares already held by it, represent at
least 75 per cent. of the Coats Shares then in issue, and subject to any
applicable requirements of the UK Listing Authority, Avenue Acquisition will
apply to the UK Listing Authority for the Coats Shares to be de-listed. It is
anticipated that the cancellation of the listing of the Coats Shares on the
Official List will take effect no earlier than 20 business days after the date
on which such application is made to the UK Listing Authority. De-listing would
significantly reduce the liquidity and marketability of any Coats Shares not
acquired by Avenue Acquisition under the terms of the Coats Share Offer.
At the same time, Avenue Acquisition would also seek to procure the
re-registration of Coats as a private company under the relevant provisions of
the Companies Act.
Avenue Acquisition has undertaken to procure that the Coats Senior Convertible
Bonds and the Coats Preference Shares will continue to be listed on the London
Stock Exchange until such time as they are repurchased or otherwise refinanced.
16. Continuation of listing of Coats Shares in certain
circumstances
Avenue Acquisition has undertaken to procure that the Coats Shares will continue
to be listed on the London Stock Exchange until such time as it holds at least
75 per cent. of the Coats Shares in issue.
17. Disclosure of interests in Coats
As at 5 March, 2003 (being the last dealing day prior to the date of this
announcement) Avenue Acquisition and the members of the Consortium, together
with Colmar, which is deemed to be acting in concert with Avenue Acquisition and
the Consortium, owned or controlled 265,099,152 Coats Shares and nil Coats
Senior Convertible Bonds:
Holder No. of Coats Shares Percentage of issued No. of Coats Senior Percentage of Coats
Coats Shares Convertible Bonds Senior Convertible
Bonds
Avenue Acquisition 179,082,728 25.30 nil nil
GPG Holdings nil nil nil nil
RIT Parties * 50,028,270 7.07 nil nil
Chapman 26,238,154 3.71 nil nil
Colmar 9,750,000 1.38 nil nil
Totals 265,099,152 37.44 nil nil
* The RIT Parties' Coats Shares are held as follows:
Holder No. of Coats Shares Percentage of issued No. of Coats Senior Percentage of Coats
Coats Shares Convertible Bonds Senior Convertible
Bonds
RIT Capital Partners 16,453,845 2.32 nil nil
plc
Dunmore Limited 6,191,712 0.87 nil nil
Cascina Holdings 208,352 0.03 nil nil
Limited
First Arrow Global 10,053,781 1.42 nil nil
Fund
Jader Trust No. 4 16,453,850 2.32 nil nil
ASBK 2002 No. 1 Trust 666,730 0.09 nil nil
Total 50,028,270 7.07 nil nil
Save for the above interests, the Concert Party does not own or control any
Coats Shares or Coats Senior Convertible Bonds or hold any Coats Share Options
and has not entered into any derivative referenced to securities of Coats which
remains outstanding on 5 March, 2003 (being the last dealing day prior to the
date of this announcement).
18. Mr Blake Nixon
Mr Nixon is both a non-executive director of Coats and the UK Executive Director
of GPG. Mr Nixon has therefore not been involved in his capacity as UK Executive
Director of GPG at any stage in considering or making the Offers and has not
participated in the deliberations of the Coats Board in relation to the Offers.
All references in this announcement to the views of the Coats Board or the
recommendations of the Coats Board should be read accordingly.
19. Bases and sources
References to Coats' entire issued ordinary share capital assume the number of
Coats Shares in issue to be 707,973,426, as disclosed in Coats' shareholder
register as at 5 March, 2003. The reference to the value of the Coats Bond Offer
assumes the nominal value of the bonds in issue to be £60,458,000, as disclosed
in Coats' shareholder register as at 5 March, 2003.
20. Further details of the Offers
Strand Partners, on behalf of Avenue Acquisition, will despatch the Offer
Document, setting out the full terms of the Offers, including the related forms
of acceptance, as soon as practicable and, save with the consent of the Panel,
in any event within 28 days following the date of this announcement.
This announcement does not constitute an offer or an invitation to purchase any
securities. The conditions and principal further terms of the Offers are set out
in Appendix I.
Defined terms used in this announcement have the meanings set out in Appendix
II.
Enquiries:
Avenue Acquisition plc Tel: (020) 7484 3370
Mark Butcher, Director
Ross Burney
Strand Partners Limited Tel: (020) 7409 3494
(Financial Adviser to Avenue Acquisition)
Simon Raggett
Warren Pearce
Weber Shandwick Square Mile Tel: (020) 7067 0700
(Public Relations Adviser to Avenue Acquisition)
Kevin Smith
Josh Royston
Cazenove & Co. Ltd Tel: (020) 7588 2828
(Joint Financial Adviser to Coats plc)
Julian Cazalet
Malcolm Moir
HSBC Bank plc Tel: (020) 7991 8888
(Joint Financial Adviser to Coats plc)
Aidan Wallis
Marcus Ayre
Brunswick Group Limited Tel: (020) 7404 5959
(Public Relations Adviser to Coats)
Patrick Handley
Katya Reynier
Strand Partners, which is regulated in the United Kingdom by the Financial
Services Authority, is acting for Avenue Acquisition and no one else in
connection with the Offers and will not be responsible to anyone other than
Avenue Acquisition for providing the protections afforded to clients of Strand
Partners nor for giving advice in relation to the Offers.
Cazenove, which is regulated in the United Kingdom by the Financial Services
Authority, is acting for Coats and no one else in connection with the Offers and
will not be responsible to anyone other than Coats for providing the protections
afforded to clients of Cazenove nor for giving advice in relation to the Offers.
HSBC, which is regulated in the United Kingdom by the Financial Services
Authority, is acting for Coats and no one else in connection with the Offers and
will not be responsible to anyone other than Coats for providing the protections
afforded to clients of HSBC nor for giving advice in relation to the Offers.
The Panel wishes to draw the attention of member firms of the Australian Stock
Exchange and the New Zealand Stock Exchange to certain UK dealing disclosure
requirements in respect of relevant securities during an offer period. An offer
period was deemed to have commenced on 13 February, 2003 with the announcement
by Coats that it had received an approach from the Consortium regarding a
possible cash offer for Coats. Relevant securities, for the purposes of Rule 8
of the City Code include:
(i) Coats Shares;
(ii) Avenue Acquisition Shares and Avenue Acquisition Convertible
Stock;
(iii) Avenue Holdings Shares;
(iv) any security that is convertible into Coats Shares, Avenue
Acquisition Shares, Avenue Acquisition Convertible Stock or Avenue Holdings
Shares, including the Coats Senior Convertible Bonds; and
(v) any securities, including options and derivatives, carrying rights
to subscribe for Coats Shares, Avenue Acquisition Shares, Avenue Acquisition
Convertible Stock or Avenue Ordinary Shares, including Coats Share Options.
The taking, granting or exercising of an option (including a traded option
contract) to subscribe for or otherwise acquire any security listed above or the
exercise or conversion of any security listed above and the acquisition of,
entering into, closing out, exercise (by either party) of any rights under, or
variation of, a derivative will be regarded as a dealing in relevant securities.
The disclosure requirements referred to below are set out in more detail in Rule
8 of the City Code. In particular Rule 8.3 of the City Code requires public
disclosure of dealings during an offer period by persons who own or control, or
who would as a result of any transaction own or control, 1 per cent. or more of
any class of any of the relevant securities described above. Note 5 to Rule 8 of
the City Code specifies the details that must be included in a disclosure and
makes reference to the Dealing Disclosure Form required to be submitted, copies
of which may be obtained from the Panel at the address specified below or from
the Panel's website, www.thetakeoverpanel.org.uk. A copy of the City Code in its
entirety may also be found at the Panel's website, for further information.
The obligation for disclosure during the offer period commenced on 13 February,
2003 and will conclude on the first closing date of the Offers or, if later, the
date on which the Offers become or are declared unconditional as to acceptances,
or lapse. Disclosure should be made on a Dealing Disclosure Form by no later
than 12 noon on the business day following the date of the dealing transaction.
These disclosures should be made via a regulatory information service such as
the Regulatory News Service of the London Stock Exchange, by fax (fax number:
+44 (0) 20 7588 6057) or by electronic delivery on the appropriate form with a
copy sent to the Panel (fax number: +44 (0) 20 7256 9386, e-mail:
[email protected]). If you are in any doubt as to the action that you
should take with regard to Rule 8 of the City Code you are requested to contact
the Panel on +44 (0) 20 7638 0129 for further information.
The Offers are not being made directly or indirectly in or into the United
States, Canada, Japan or Australia. Accordingly, copies of this announcement
are not being, and must not be, mailed or otherwise distributed or sent in or
into or from the United States, Canada, Japan or Australia. Custodians,
nominees and trustees should observe these restrictions and must not distribute,
send or otherwise forward this announcement in, into or from the United States,
Canada, Japan or Australia. However, custodians, nominees and trustees who are
not US Persons but who hold Coats Shares or Coats Senior Convertible Bonds on
behalf of or for the account of US Persons who are able to satisfy Avenue
Acquisition that they are accredited investors (as defined in Regulation D under
the US Securities Act), may be entitled to accept the Offers from outside the
United States.
Further, the availability of the Offers to Overseas Shareholders may be affected
by the laws of the relevant jurisdictions. Persons who are not resident in the
United Kingdom should inform themselves about and observe any applicable
requirements of those jurisdictions.
The Avenue Acquisition Directors, whose names appear in paragraph 9 of Part 2 of
this announcement, accept responsibility for the information contained in this
announcement save for any information relating to Coats, GPG, GPG Holdings, the
RIT Parties or Chapman. To the best of the knowledge and belief of the Avenue
Acquisition Directors (who have taken all reasonable care to ensure that such is
the case), the information contained in this announcement is in accordance with
the facts and does not omit anything likely to affect the import of such
information.
The directors of Coats (other than Blake Nixon, whose position is described in
paragraph 18 of Part 2 of this announcement), whose names appear in paragraph 8
of Part 2 of this announcement, accept responsibility for the information
contained in this announcement relating to Coats. To the best of the knowledge
and belief of the directors of Coats (who have taken all reasonable care to
ensure that such is the case), such information is in accordance with the facts
and does not omit anything likely to affect the import of such information.
The directors of GPG, whose names appear in paragraph 10.1 of Part 2 of this
announcement, accept responsibility for the information contained in this
announcement relating to GPG and GPG Holdings. To the best of the knowledge and
belief of the directors of GPG (who have taken all reasonable care to ensure
that such is the case), such information is in accordance with the facts and
does not omit anything likely to affect the import of such information.
The directors of RIT, whose names appear in paragraph 10.2 of Part 2 of this
announcement, accept responsibility for the information contained in this
announcement relating to the RIT Parties. To the best of the knowledge and
belief of the directors of RIT (who have taken all reasonable care to ensure
that such is the case), such information is in accordance with the facts and
does not omit anything likely to affect the import of such information.
The directors of Chapman, whose names appear in paragraph 10.3 of Part 2 of this
announcement, accept responsibility for the information contained in this
announcement relating to Chapman. To the best of the knowledge and belief of the
directors of Chapman (who have taken all reasonable care to ensure that such is
the case), such information is in accordance with the facts and does not omit
anything likely to affect the import of such information.
This announcement does not constitute, or form part of, an offer or an
invitation to purchase any securities. This announcement has been issued by
Strand Partners and has been approved by Strand Partners solely for the purposes
of section 21 of the Financial Services and Markets Act 2000.
Part 3 of 3
Appendix I
Conditions and certain terms of the Offers
1. The Coats Share Offer, which will be made by Strand
Partners on behalf of Avenue Acquisition, will comply with the applicable rules
and regulations of the City Code and the Listing Rules, will be governed by
English law and will be subject to the jurisdiction of the Courts of England.
The Coats Share Offer is subject to valid acceptances being received (and not,
where permitted, withdrawn) by 3.00 p.m. on the first closing date of the Coats
Share Offer (or such later time(s) and / or date(s) as Avenue Acquisition may,
subject to the City Code, decide) in respect of Coats Shares which, together
with Coats Shares acquired or agreed to be acquired before or during the Offer
Period, will result in Avenue Acquisition holding more than 50 per cent. of the
voting rights normally exercisable at general meetings of Coats. The Coats Share
Offer will extend to all Coats Shares other than those Coats Shares already held
by Avenue Acquisition.
2. Notwithstanding satisfaction of the condition set out
in paragraph 1 above, Avenue Acquisition will not close the Coats Share Offer
for acceptances until the latest of:
(a) the earliest date permitted by the City Code;
(b) the date falling 35 days after the date on which the Offer
Document is posted; and
(c) the date falling 28 days after the date on which the
Coats Share Offer becomes or is declared unconditional in all respects unless:
(i) the FTSE 100 Index has closed below 3000 points for
three consecutive dealing days; or
(ii) there has been a material adverse change in the
financial or trading position of Coats when compared to the trading position of
Coats as at the date of this announcement,
or, if sooner (and subject to the provisions of the City Code), the date on
which a third party offer for Coats having a value that is higher than the
aggregate value available to Coats Shareholders under the Coats Share Offer is
announced in circumstances where such announcement is made before the acceptance
condition has been satisfied.
3. The Coats Share Offer will lapse if it is referred to
the Competition Commission in the United Kingdom before 3.00 p.m. on the first
closing date of the Coats Share Offer or (if later) the time and date when the
Coats Share Offer becomes or is declared unconditional as to acceptances.
In circumstances where the Coats Share Offer lapses, the Coats Share Offer will
cease to be capable of further acceptance and persons that have accepted the
Coats Share Offer and Avenue Acquisition will cease to be bound by acceptances
delivered on or before the date on which the Coats Share Offer so lapses.
4. The Coats Shares will be acquired by Avenue Acquisition
fully paid and free from all liens, charges, equitable interests, encumbrances
and other third party rights of any kind whatsoever together with all rights now
or hereafter attaching thereto, including the right to receive and retain all
dividends and other distributions (if any) declared, made or paid after the date
of this announcement other than the Special Dividend.
5. The Coats Bond Offer, which will be made by Strand
Partners on behalf of Avenue Acquisition, will comply with the applicable rules
and regulations of the City Code and the Listing Rules, will be governed by
English law and will be subject to the jurisdiction of the Courts of England.
6. The Coats Bond Offer is conditional on the Coats Share
Offer becoming or being declared unconditional in all respects and will lapse
immediately if the Coats Share Offer lapses or is withdrawn. If the Coats Bond
Offer lapses, it will cease to be capable of further acceptance and persons that
have accepted the Coats Bond Offer and Avenue Acquisition will cease to be bound
by acceptances delivered on or before the date on which the Coats Bond Offer so
lapses.
7. The Offers are not being made directly or indirectly in
or into the United States, Canada, Japan or Australia. Accordingly, copies of
this announcement are not being, and must not be, mailed or otherwise
distributed or sent in or into or from the United States, Canada, Japan or
Australia. Custodians, nominees and trustees should observe these restrictions
and must not distribute, send or otherwise forward this announcement in, into or
from the United States, Canada, Japan or Australia. However, custodians,
nominees and trustees who are not US Persons but who hold Coats Shares or Coats
Senior Convertible Bonds on behalf of or for the account of US Persons who are
able to satisfy Avenue Acquisition that they are accredited investors (as
defined in Regulation D under the US Securities Act), may be entitled to accept
the Offers from outside the United States.
8. The availability of the Offers to Overseas Shareholders
may be affected by the laws of the relevant jurisdictions. Persons who are not
resident in the United Kingdom should inform themselves about and observe any
applicable requirements of those jurisdictions.
Appendix II
Definitions
'Australia' the commonwealth of Australia, its states, territories and possessions;
'Australian Stock Exchange' Australian Stock Exchange Limited;
'Avenue Acquisition Convertible Stock' or ' the fixed rate subordinated unsecured convertible stock 2023 of Avenue
Convertible Stock' Acquisition to be issued pursuant to the Convertible Stock Alternative;
'Avenue Acquisition Directors' the directors of Avenue Acquisition, whose names appear in paragraph 9 of
Part 2 of this announcement;
'Avenue Acquisition' Avenue Acquisition plc, registered in England and Wales with number
4620973;
'Avenue Holdings A Ordinary Shares' A ordinary shares of £0.01 par value each in the capital of Avenue
Holdings;
'Avenue Holdings Shares' shares in the capital of Avenue Holdings (of whatever class);
'Avenue Holdings' Avenue Holdings Group Limited, registered in the British Virgin Islands
with IBC number 530728;
'Bank of Scotland Corporate Banking' a division of HBOS plc;
'Canada' Canada, its provinces, territories and all areas subject to its
jurisdiction and any political sub-division thereof;
'Cazenove' Cazenove & Co. Ltd;
'Chapman' Chapman International Investments Limited, registered in the British
Virgin Islands with IBC number 31996;
'City Code' the City Code on Takeovers and Mergers;
'Coats Board' or 'Board' the board of directors of Coats;
'Coats Bond Offer Form of Acceptance' the form of acceptance and authority relating to the Coats Bond Offer
which will accompany the Offer Document;
'Coats Bond Offer' the cash offer to be made by Strand Partners, on behalf of Avenue
Acquisition, to acquire all of the Coats Senior Convertible Bonds on the
terms and subject to the condition set out in this announcement and on
the further terms to be set out in the Offer Document and in the Coats
Bond Offer Form of Acceptance, including (where the context so requires)
any subsequent revision, variation, renewal or extension thereof;
'Coats Bondholders' holders of Coats Senior Convertible Bonds;
'Coats Group' Coats, its subsidiaries and subsidiary undertakings;
'Coats Preference Shares' the 4.9 per cent. cumulative preference shares in the capital of Coats;
'Coats Senior Convertible Bonds' the 6.25 per cent. Senior Convertible Bonds due 2003 of Coats;
'Coats Share Offer Form of Acceptance' the form of acceptance and authority relating to the Coats Share Offer
which will accompany the Offer Document;
'Coats Share Offer' the recommended cash offer, to be made by Strand Partners on behalf of
Avenue Acquisition, to acquire all of the issued and to be issued Coats
Shares not already held by Avenue Acquisition on the terms and subject to
the condition set out in this announcement and on the further terms to be
set out in the Offer Document and in the Coats Share Offer Form of
Acceptance including (where the context so requires), any subsequent
revision, variation, renewal or extension thereof;
'Coats Share Options' options granted under the Coats Share Schemes;
'Coats Share Schemes' the Coats plc 1984 Executive Share Option Scheme, the Coats plc Overseas
Executive Share Option Scheme, the Coats plc 1994 Executive Share Option
Scheme, the Coats plc 2002 Approved and Unapproved Share Option Plans and
the Coats plc Performance Share Plan and any other similar scheme or
arrangement whereby participants are entitled to subscribe for or receive
Coats Shares;
'Coats Shareholders' holders of Coats Shares;
'Coats Shares' the existing unconditionally issued or allotted and fully paid (or
credited as fully paid) ordinary shares of 20 pence each in the capital
of Coats and any further such shares that are unconditionally issued or
allotted fully paid (or credited as fully paid) on or prior to the date
on which the Coats Share Offer closes or, subject to the provisions of
the City Code, such earlier date or dates as Avenue Acquisition may
determine;
'Coats' or the 'Company' Coats plc, registered in England and Wales with number 00104998;
'Colmar' Colmar Investment Holdings Limited, registered in the British Virgin
Islands with number 135583;
'Companies Act' or 'Act' the Companies Act 1985, as amended;
'Concert Party' the Consortium together with Colmar, Avenue Acquisition and Avenue
Holdings;
'Consortium' GPG Holdings, the RIT Parties and Chapman;
'Convertible Stock Alternative' the alternative under which Coats Shareholders who validly accept the
Coats Share Offer may elect to receive Convertible Stock instead of part,
or all, of the cash consideration to which they would otherwise be
entitled under the Coats Share Offer;
'Convertible Stock Instrument' the instrument constituting the Convertible Stock entered into between,
inter alia, Avenue Acquisition and Avenue Holdings on 7 February, 2003;
'GPG' Guinness Peat Group plc, registered in England and Wales with number
00103548;
'GPG Guarantee' GPG Avenue Guarantee Limited, registered in England and Wales with number
4655938;
'GPG Holdings' GPG (UK) Holdings plc, registered in England and Wales with number
00159975;
'HSBC' HSBC Bank plc;
'Japan' Japan, its cities, prefectures, territories and possessions;
'Listing Rules' the listing rules of the UK Listing Authority;
'London Stock Exchange' London Stock Exchange plc;
'New Zealand Stock Exchange' NZSE Limited;
'Offer Document' the offer document to be despatched to Coats Shareholders and Coats
Bondholders setting out the full terms and conditions of the Offers;
'Offer Period' the period commencing on (and including) 13 February, 2003 and ending on
the first closing date of the Offers or, if later, the time when the
Offers become or are declared unconditional as to acceptances or lapse;
'Offers' the Coats Share Offer and the Coats Bond Offer;
'Official List' the Official List maintained by the UK Listing Authority;
'Overseas Shareholders' Coats Shareholders whose registered addresses are outside the UK or who
are citizens, nationals or residents of countries other than the UK;
'Panel' the Panel on Takeovers and Mergers;
'RIT' RIT Capital Partners plc, registered in England and Wales with number
2129188;
'RIT Parties' RIT and certain parties connected to it, as set out in paragraph 17 of
Part 2 of this announcement;
'RIT Shares' ordinary shares of £1 each in the capital of RIT;
'Shareholders' Agreement' the shareholders agreement relating to Avenue Holdings entered into
between GPG Holdings, the RIT Parties and Chapman dated 27 February,
2003;
'Special Dividend' the Special Dividend of 2.5 pence per Coats Share to be paid,
conditionally on the Coats Share Offer becoming or being declared
unconditional in all respects, to Coats Shareholders on the register of
members of Coats at the close of business on the date that the Coats
Share Offer becomes or is declared unconditional in all respects, in
respect of Coats Shares then in issue;
'Strand Partners' Strand Partners Limited;
'UK Listing Authority' the Financial Services Authority acting in its capacity as the competent
authority for the purposes of Part VI of the Financial Services and
Markets Act 2001;
'United Kingdom' or 'UK' the United Kingdom of Great Britain and Northern Ireland;
'United States' or 'USA' the United States of America, its territories and possessions, any state
of the United States of America and the District of Columbia and all
other areas subject to its jurisdiction;
'US Person' a citizen or permanent resident of the United States; and
'US Securities Act' the United States Securities Act of 1933 (as amended).
This information is provided by RNS
The company news service from the London Stock Exchange
Avenue Acquisition of Coats16:26:006 Mar 2003Acquisitions and alliances1084_