M&C Saatchi Plc
Tender Offer
19 December 2013
M&C Saatchi Plc (the "Company") is pleased to announce that is has today posted to Shareholders a circular including a notice of general meeting (the "Circular") setting out the Board's proposals for a return of capital to Shareholders by way of a tender offer.
On 28 November 2013, at the time of the announcement of the Company's disposal of a 75.1 per cent. interest in Walker Media, the Board announced the Company's intention to propose a return of a majority of the sale proceeds of £36 million to Shareholders. The Board has resolved that this is best achieved through a share buy-back tender process in which, subject to regulatory restrictions, all Shareholders will have the same opportunity to sell a pro rata proportion of their Ordinary Shares. The Tender Offer has the benefit of allowing Shareholders who wish to sell their Ordinary Shares the opportunity to do so, and giving Shareholders, who do not wish to receive capital at this time, the ability to maintain their full investment in the Company. The Tender Offer is also expected to have a positive impact on the Company's earnings and dividend per share.
The maximum amount of money that will be used by the Company in carrying out the Tender Offer is £21,231,630. The Board has decided that this is the appropriate amount of the Walker Media sale proceeds to use taking into account the future working capital and investment requirements of the Group. If fewer Ordinary Shares than £21,231,630, in aggregate (at the Tender Price) are tendered, the Board will determine the best way of returning the balance to Shareholders.
The Tender Offer is being made by Numis Securities. Numis Securities will purchase the Ordinary Shares tendered as principal and, following the completion of all such purchases, has the right to require the Company to purchase from it those Ordinary Shares at the Tender Price by way of a market transaction. Any Ordinary Shares which the Company acquires from Numis Securities will be cancelled on acquisition.
Capitalised terms used but not defined in this announcement have the meanings given to them in the Circular.
Key points to the Tender Offer
The key points to the Tender Offer are as follows:
· The Tender Offer is conditional on:
i. the passing of the Resolution set out in the Notice of General Meeting; and
ii. the Tender Offer not having been terminated in accordance with paragraph 10 of Part IV (Terms and conditions of the Tender Offer) of the Circular prior to 1.00 p.m. on 15 January 2014.
· Each Qualifying Shareholder is entitled to sell its Basic Entitlement (being approximately 9.27 per cent.) of the Ordinary Shares registered in their name at the Tender Offer Record Time under the Tender Offer, rounded down to the nearest whole number of Ordinary Shares.
· Numis Securities will purchase up to £21,231,630 of Ordinary Shares tendered by Qualifying Shareholders at the Tender Price. Subject to Numis Securities requiring the Company to do so, these Ordinary Shares will subsequently be purchased and then cancelled by the Company.
· There is no obligation on Qualifying Shareholders to participate in the Tender Offer.
· The Tender Offer is being made to Qualifying Shareholders at a price per Ordinary Share of £3.35 and tenders may be made at the Tender Price only.
· The Tender Price represents a premium of approximately 3.3 per cent. to the closing price of £3.24 per Ordinary Share on 27 November 2013 (being the date before the announcement of the Company's intention to return cash to Shareholders), a premium of approximately 3.9 per cent. to the closing price of £3.23 per Ordinary Share on 18 December 2013 (being the last date before the announcement of the Tender Offer) and a premium of approximately 2.4 per cent. to the volume weighted average price per Ordinary Share of £3.27 over the six week period to 18 December 2013.
· Qualifying Shareholders may tender more than their Basic Entitlements if they wish to do so. If the aggregate purchase price for all Ordinary Shares tendered is £21,231,630 or less, all Ordinary Shares validly tendered will (subject to the provisions of paragraph 7.2 of Part IV of the Circular in relation to the Directors) be accepted and purchased at the Tender Price. However, if the aggregate purchase price for all validly tendered Ordinary Shares exceeds £21,231,630, not all of the Ordinary Shares validly tendered will be accepted and purchased. In these circumstances, the number of Ordinary Shares which will be accepted and purchased will be calculated as follows:
i. all Ordinary Shares validly tendered by Qualifying Shareholders up to their respective Basic Entitlements will (subject to the provisions of paragraph 7.2 of Part IV of the Circular in relation to the Directors) be accepted and purchased in full; and
ii. all Ordinary Shares tendered by Qualifying Shareholders in excess of their Basic Entitlements (subject to the provisions of paragraph 7.2 of Part IV of the Circular in relation to the Directors), will be scaled down pro rata to the total number of such Ordinary Shares tendered in excess of the aggregate Basic Entitlement, such that the total cost of Ordinary Shares purchased pursuant to the Tender Offer does not exceed £21,231,630.
Repurchase Agreement
The Company and Numis Securities have entered into the Repurchase Agreement pursuant to which, subject to completion of the Tender Offer, Numis has an option, exercisable for 30 days from the Closing Date, to require the Company to purchase from Numis Securities, at the Tender Price, the Ordinary Shares acquired by it under the Tender Offer. Although Numis Securities has no obligation to require the Company to purchase Ordinary Shares from it, the Board expects that Numis Securities will exercise this Option.
The Repurchase Agreement may be terminated in certain circumstances and, if it were to be so terminated, the Tender Offer would not proceed. Pursuant to the Repurchase Agreement the Company gives to Numis Securities: (a) certain representations and warranties; and (b) an indemnity.
General Meeting
The implementation of the Tender Offer is conditional on, inter alia, the passing of the Resolution. If the Resolution is not passed by Shareholders, Numis Securities will not implement the Tender Offer.
A General Meeting has been convened to be held at 36 Golden Square, London at 3.00 p.m. on 7 January 2014 at which Shareholders will be asked to consider and, if thought fit, pass the Resolution.
The Resolution to authorise the Company to make market purchases from Numis Securities of Ordinary Shares acquired by Numis Securities pursuant to the Tender Offer will be proposed as a special resolution. Under the Companies Act 2006, before a company may make a purchase of its own shares it must obtain the authority of its shareholders to do so. The Resolution proposes to authorise the Company to purchase up to £21,231,630 of Ordinary Shares from Numis Securities at the Tender Price pursuant to the terms of the Repurchase Agreement
Recommendation
The Board believes that the return of cash to Qualifying Shareholders pursuant to the Tender Offer is in the best interests of the Company and Shareholders as a whole. The Board therefore recommends that you vote in favour of the Resolution at the General Meeting as the Directors intend to do in respect of their personal interests in 18,921,705 Ordinary Shares in aggregate, representing approximately 27.7 per cent. of the issued ordinary share capital of the Company (excluding shares held in treasury).
The Board is making no recommendation to Shareholders in relation to participation in the Tender Offer itself. Whether or not Qualifying Shareholders decide to tender all or any of their Ordinary Shares will depend, among other things, on their view of the Company's prospects and their own individual circumstances, including their tax position. Shareholders are recommended to consult their duly authorised independent advisers and make their own decision.
Intentions of the Directors
Each Director intends that he, and Shareholders connected with him, will tender such number of Ordinary Shares as is at least equivalent to his (or his and their) Basic Entitlements and certain Directors may tender additional Ordinary Shares. Notwithstanding this, the Directors and Shareholders connected with them have agreed with the Company that their tenders will be scaled back so as to ensure that the aggregate interests of David Kershaw, Bill Muirhead, Lord Maurice Saatchi, Jeremy Sinclair and Shareholders connected with these Directors do not fall below 25.1 per cent. of the entire issued share capital of the Company following repurchase and cancellation by the Company of the Ordinary Shares acquired by Numis Securities.
Tender Offer Timetable
Announcement of Tender Offer |
19 December 2013 |
Latest time and date for receipt of Forms of Proxy in respect of the General Meeting |
3.00 p.m. on 5 January 2014 |
General Meeting |
3.00 p.m. on 7 January 2014 |
Latest time and date for receipt of Tender Forms and TTE instructions from CREST in relation to the Tender Offer |
1.00 p.m. on 15 January 2014 |
Tender Offer Record Time |
6.00 p.m. on 15 January 2014 |
Announcement of results of the Tender Offer |
by 2.00 p.m. on 16 January 2014 |
CREST accounts re-credited with Ordinary Shares in respect of unsuccessful tenders |
on or before 23 January 2014 |
Cheques issued/CREST accounts credited for Tender Offer proceeds in respect of Ordinary Shares sold |
on or before 23 January 2014 |
Share certificates issued for revised holdings of Ordinary Shares following the sale of certificated Ordinary Shares under the Tender Offer |
on or before 23 January 2014 |
Return of share certificates in respect of unsuccessful tenders |
on or before 23 January 2014 |
Each of the times and dates set out above is indicative only and may be adjusted by the Company and/or Numis Securities, in which event details of the new times and dates will be notified, by way of an announcement issued through a Regulatory Information Service. All references to times are to London times.
For further information:
M&C Saatchi Plc |
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Andy Blackstone, Company Secretary |
Tel: +44 (0)20 7544 3693 |
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www.mcsaatchiplc.com |
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Numis Securities Limited |
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Nick Westlake (NOMAD) |
Tel: +44 (0)20 7260 1000 |
Charles Farquhar |
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