Portfolio Business news
09 June 2003
Waste Recycling Group PLC (“WRG” or the “Company”) recommended cash acquisition by Cholet Acquisitions Limited (“Cholet”)
The boards of WRG and Cholet, a company formed at the direction of Terra Firma Investments, announce that a recommended proposal (the “Proposal”) has been agreed whereby WRG will be acquired by Cholet.
• The consideration of 267.5 pence in cash per Share implies an equity value for WRG of approximately £315.2 million and an enterprise value of approximately £530.9 million (based on net debt as at 31 December, 2002).
• This represents a premium of approximately 21 per cent. to WRG’s share price of 221 pence on 7 January, 2003 (the last Business Day prior to the announcement by WRG that it had received an approach that might lead to an offer for the Company) and a premium of approximately 3 per cent. to the closing middle-market price of 260 pence per Share as derived from the Daily Official List on 6 June, 2003 (being the last Business Day prior to this announcement). It also represents a premium of approximately 34 per cent. to the average Share price for the five Business Days prior to 8 January, 2003 of 199 pence.
• The Proposal has received the unanimous recommendation of the WRG Board.
• The Proposal will be effected via a scheme of arrangement of WRG under section 425 of the Companies Act.
• Irrevocable undertakings have been received from Kelda, a 45.5 per cent. shareholder in WRG, and those WRG Directors who hold beneficial interests in Shares representing, in aggregate, approximately 47.4 per cent. of WRG’s existing issued share capital.
• Upon the scheme of arrangement becoming effective, WRG will become a private company ultimately controlled by Terra Firma Investments (the general partner of the Terra Firma Capital Partners II Fund).
WRG is a leading waste management company in the UK. For the year ended 31 December 2002, the WRG Group’s turnover was £302.5 million on which it earned operating profit before tax, amortisation of goodwill and exceptional items of £53.5 million.
Terra Firma Investments is advised by Terra Firma Capital Partners Limited, which is led by Guy Hands, with a team of approximately 50 experienced professionals. If the Scheme becomes effective, this transaction will be the first acquisition for the Terra Firma Capital Partners II Fund. To date, the Terra Firma Capital Partners II Fund has raised approximately EUR1.4 billion.
Commenting on the Proposal, Guy Hands of Terra Firma Capital Partners said:
“We are delighted that this period of uncertainty for WRG has come to an end. Terra Firma will ensure that Waste Recycling Group benefits from the greatest possible operational and strategic focus, positioning it as a leader in the UK waste management market. We believe that this focus will be good news for WRG and all of its stakeholders, notably its employees and customers.”
James Newman, Chairman of WRG, said:
“The Proposal is in the best interests of Shareholders and provides an immediate and certain opportunity for all Shareholders to realise their investments in cash at a significant premium to the Share price in the period before WRG announced that it was in talks.”
The formal document setting out the details of the Proposal, including the circular to Shareholders setting out the procedures to be followed to approve the Proposal, and Forms of Proxy will be posted to Shareholders as soon as practicable.
This summary should be read in conjunction with the full text of the attached announcement.
This announcement has been prepared for the purpose of complying with English law and the City Code and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws of jurisdictions outside England.
Deutsche Bank and Marshall, which are regulated by the Financial Services Authority for the conduct of designated investment business in the United Kingdom, are acting exclusively for WRG in relation to the Proposal and are not acting for any other person in connection with the Proposal. Deutsche Bank and Marshall will not be responsible to anyone other than WRG for providing the protections afforded to clients of Deutsche Bank and clients of Marshall respectively, nor for giving advice in relation to the contents of this announcement or any offer or arrangement referred to herein.
Merrill Lynch, which is regulated by the Financial Services Authority for the conduct of designated investment business in the United Kingdom, is acting exclusively for Cholet and Terra Firma Investments in relation to the Proposal and is not acting for any other person in connection with the Proposal. Merrill Lynch will not be responsible to anyone other than Cholet and Terra Firma Investments for providing the protections afforded to clients of Merrill Lynch nor for giving advice in relation to the contents of this announcement or any offer or arrangement referred to herein.
This announcement is not an offer to sell or an invitation to purchase any securities or the solicitation of any vote or approval in any jurisdiction. Shareholders are advised to read carefully the formal documentation in relation to the Proposal once it has been despatched to Shareholders.
Appendix III contains the definitions of terms used in this announcement.
The availability of the Proposal to persons not resident in the UK may be affected by the laws of the relevant jurisdiction. Any persons who are subject to the laws of any jurisdiction other than the UK should inform themselves about, and observe, any applicable requirements.
Not for release, publication or distribution in, into or from the United States of America, Australia, Canada or Japan