RNS Number:5890U
BT Group PLC
23 January 2004
Not for release, publication or distribution, in whole or in part, in, into or
from the United States, Canada, Australia or Japan
BT GROUP PLC TRANSCOMM PLC
23 January 2004
British Telecommunications plc
Recommended cash offer
for
Transcomm plc
Summary
The boards of BT and Transcomm announce that agreement has been reached on the
terms of a recommended cash offer to be made by British Telecommunications plc
for the entire issued and to be issued share capital of Transcomm:
The Offer will be 15.5 pence in cash for each Transcomm Share, valuing the
existing issued share capital of Transcomm at approximately #15.9 million.
The Offer price represents a premium of approximately 15 per cent. to the
Closing Price of 13.5 pence per Transcomm Share on 12 December 2003 (the last
dealing date prior to the commencement of the Offer Period), and approximately
35 per cent. to the average Closing Price of 11.5 pence per Transcomm Share for
the three month period ended on that date.
BT has received irrevocable undertakings to accept the Offer in respect of
49,652,107 Transcomm Shares, representing approximately 48.3 per cent. of
Transcomm's existing issued share capital.
The acquisition of Transcomm will enhance BT's position in providing
machine-to-machine (M2M) applications for business customers in the UK. It
demonstrates BT's strategy of focusing on attractive markets across the entire
Information and Communications Technology (ICT) spectrum to deliver profitable
growth.
M2M applications allow the remote monitoring and control of devices over long
distances. The sector is one of the most dynamic in the telecommunications
market, with industry predictions forecasting revenues to grow five-fold to Euro50
billion in Europe by 2007. M2M applications include most devices which can be
remotely monitored, including fire and burglar alarms, vending machines,
refrigerators, EPOS terminals, parking meters and distribution fleets.
Through its BT redcare operation, BT is already the leading player in fixed line
M2M applications in the UK. This acquisition enhances BT's M2M service offering
by adding wireless capabilities. The combined business brings together the
strength of BT's brand, customer penetration and expertise in corporate
solutions with Transcomm's highly robust network, products, applications and
distribution partnerships.
Steve Andrews, managing director of BT Retail's Products and Enterprises
division, said: "Transcomm is an excellent fit with BT redcare. The combination
brings together fixed and mobile secure M2M communications and allows us to
offer an exciting array of new services to our customers. It further reinforces
BT's commitment to connecting our customers' worlds - fixed and wireless, voice
and data - completely."
Jon Furmston, chief executive of BT redcare, said: "This combination catapults
BT redcare further ahead of the competition and strengthens our position as the
leading UK service provider for all M2M applications. The addition of the
Transcomm network provides a highly-reliable, secure and cost-effective wireless
network, which is where much of the future profitable market growth lies."
Rod Matthews MBE, Chairman of Transcomm, said: "We are pleased to have reached
agreement with BT on the terms of an offer which provides excellent value for
Transcomm Shareholders. The Transcomm Directors consider the terms of the Offer
to be fair and reasonable, and unanimously recommend Transcomm Shareholders to
accept the Offer."
This summary should be read in conjunction with the full text of this
announcement, including Appendix I where the conditions of the Offer are set
out.
This announcement does not constitute an offer or an invitation to sell,
purchase or subscribe for any securities.
Enquiries:
BT
Mike Bartlett, BT Newsroom 020 7356 5369
Jon Carter, BT Retail Press Office 020 7356 4523
Transcomm
Rod Matthews MBE, Chairman 020 8990 9090
Andrew Carver, Chief Executive
Russell Backhouse, Finance Director
Nabarro Wells
(Financial Adviser to Transcomm)
Hugh Oram 020 7710 7400
Nigel Atkinson
About BT
BT is one of Europe's leading providers of telecommunication services. Its
principal activities include local, national and international telecommunication
services, higher-value broadband and internet products and services, and IT
solutions. In the UK, BT serves over 20 million business and residential
customers with more than 29 million exchange lines, as well as providing network
services to other licensed operators.
In the year ended 31 March 2003, British Telecommunications plc's turnover was
#18.7 billion, with profit before tax (before goodwill and exceptional items) of
#1,829 million. For more information visit www.bt.com.
About Transcomm
Transcomm is one of the United Kingdom's leading wireless data service
providers. It owns and operates the Mobitex wireless data network in the UK
with network coverage of approximately 95% of the population, connecting
communications devices for customers in transport and distribution, telemetry,
emergency services and field services. It provides an "always-on"
business-critical service, with high reliability, security and data integrity.
About Mobitex
Mobitex is a packet-switched, narrow-band mobile data communications radio
network technology, provided and supported by Ericsson. There are currently 30
Mobitex networks operating around the world.
Unless otherwise determined by British Telecommunications plc, the Offer will
not be made, directly or indirectly, in or into, or by use of the mails of, or
by any means or instrumentality (including, without limitation, electronic mail,
facsimile transmission, telex or telephone) of interstate or foreign commerce
of, or any facilities of a national securities exchange of, the USA, or in or
into Canada, Australia or Japan, and, subject to certain exceptions, the Offer
will not be capable of acceptance by any such use, means or instrumentality or
facilities or from or within the USA, Canada, Australia or Japan. Accordingly,
copies of this announcement are not being, and must not be, mailed or otherwise
forwarded, transmitted, distributed or sent in, into or from the USA, Canada,
Australia or Japan. Doing so may render invalid any purported acceptance of the
Offer. Any person (including, without limitation, nominees, trustees or
custodians) who are overseas persons or who would, or otherwise intend to,
forward this announcement to any jurisdiction outside the United Kingdom or to
overseas persons should seek appropriate professional advice before taking any
action.
This announcement has been issued by British Telecommunications plc and approved
by PricewaterhouseCoopers for the purpose of section 21 of the Financial
Services and Markets Act 2000. The principal place of business of
PricewaterhouseCoopers is 1 Embankment Place, London WC2N 6RH.
PricewaterhouseCoopers, which is authorised and regulated in the United Kingdom
by the Financial Services Authority for designated investment business, is
acting exclusively for BT Group plc and British Telecommunications plc and for
no-one else in relation to the Offer and will not be responsible to anyone other
than BT Group plc and British Telecommunications plc for providing the
protections afforded to clients of PricewaterhouseCoopers or for providing or
giving advice in relation to the Offer or any other matter referred to in this
announcement.
Nabarro Wells, which is regulated by the Financial Services Authority, is acting
exclusively for Transcomm and for no-one else in relation to the Offer and will
not be responsible to anyone other than Transcomm for providing the protections
afforded to clients of Nabarro Wells or for providing or giving advice in
relation to the Offer or any other matter referred to in this announcement.
Not for release, publication or distribution, in whole or in part, in, into or
from the United States, Canada, Australia or Japan
BT GROUP PLC TRANSCOMM PLC
23 January 2004
British Telecommunications plc
Recommended cash offer
for
Transcomm plc
1. Introduction
The boards of BT and Transcomm announce that agreement has been reached on the
terms of a recommended cash offer to be made by British Telecommunications plc
for the entire issued and to be issued share capital of Transcomm.
2. The Offer
The Offer, which will be subject to the conditions and on the terms set out or
referred to in Appendix I to this announcement and to be set out in the Offer
Document and the Form of Acceptance, will be made on the following basis:
for each Transcomm Share 15.5 pence in cash
The Offer price values the existing issued share capital of Transcomm at
approximately #15.9 million and represents a premium of approximately 15 per
cent. to the Closing Price of 13.5 pence per Transcomm Share on 12 December 2003
(the last dealing date prior to the commencement of the Offer Period), and
approximately 35 per cent. to the average Closing Price of 11.5 pence per
Transcomm Share for the three month period ended on that date.
Under the Offer, Transcomm Shares are to be acquired fully paid and free from
all liens, charges, equitable interests, encumbrances, rights of pre-emption and
any other third party rights or interests and together with all rights attaching
thereto, including the right to receive and retain all dividends or other
distributions (if any) declared, paid or made on or after 23 January 2004, being
the date of this announcement.
3. Information relating to Transcomm
Transcomm is one of the leading providers of data-only wireless services in the
United Kingdom.
Transcomm owns and operates the Mobitex wireless data network in the UK,
providing a business-critical wireless data service for customers across the
country. With service level agreements on network performance as standard,
Transcomm's network provides over 95% population coverage in the UK, with high
service availability for corporate and public sector customers. Together with
specialist resellers and technology partners, Transcomm offers tailored
solutions using a wide range of hardware, software, network gateways and
end-user devices for secure and reliable business-critical wireless data
communications.
M2M applications include most devices which can be remotely monitored, from fire
and burglar alarms to vending machines, refrigerators, EPOS terminals and even
distribution fleets. Services provided by Transcomm to its customers include
the sophisticated monitoring, reporting and tracking of vehicles, loads,
packages, deliveries and collections, and other electronic messages. Customers
with large field service teams rely on Transcomm for instant work scheduling
updates, while the emergency services, transport and distribution and parking
monitoring operators are also significant customers. M2M applications require
small amounts of data to be transmitted but these must be highly reliable,
secure and in real time.
Transcomm's customers, mainly in transport and distribution, telemetry,
emergency services and field services, are organisations with business-critical
data communications needs, and include the RAC, the Metropolitan Police, TNT and
Parkeon (formerly known as Schlumberger e-City). Over 33,000 devices are
currently connected through the Transcomm Group's network.
For the financial year ended 31 December 2002, Transcomm reported turnover of
#13.8 million (2001: #15.7 million) and EBITDA before exceptional operating
items of #1.7 million (2001: a loss of #3.6 million). At that date, its net
assets were #7.3 million. Transcomm's unaudited interim statement for the six
months ended 30 June 2003 showed turnover of #6.4 million (2002: #7.2 million)
and EBITDA before exceptional operating items of #1.0 million (2002: #0.8
million). At 30 June 2003, net assets were #7.6 million.
4. Background to and reasons for the Offer
Through BT redcare, BT already offers customers a compelling M2M data
communications service, based mainly on its highly secure and reliable
fixed-line network. The acquisition of Transcomm strengthens BT redcare's
position as the leading UK service provider for M2M applications, with fast
approaching 400,000 connections. The addition of Transcomm's wireless data
network provides a highly reliable, secure and cost-effective wireless
infrastructure to combine with BT's unmatched fixed-line data capabilities. A
fully controlled integrated fixed and wireless network, and the combination of
Transcomm's skills and expertise in wireless data solutions with BT's brand,
business customer penetration and expertise in corporate solutions, will allow
BT to increase its business across the rapidly emerging M2M markets.
BT expects the combined business to generate in excess of #100 million per annum
in M2M revenues. BT expects to drive significant revenue growth through the
combination of Transcomm and BT redcare, and to achieve material savings in
airtime and network costs and reductions in capital expenditure.
The Transcomm Board is recommending the Offer because it believes that the
acquisition is in the best interests of Transcomm Shareholders, whilst also
safeguarding the future of the business of Transcomm.
Over the course of the last two years, the Transcomm Board has developed the
business into one which is profitable and cash generative. Whilst the Transcomm
Board believes strongly in the key differentiators of its network service
offering, it is also mindful of the difficulties of operating in the M2M
communications market as a relatively small independent competitor.
The Transcomm Board believes that the prospects of the business will be enhanced
through the combination with BT, which will give it access to a significantly
greater distribution channel, wider market opportunities and greater resources
to exploit the growth in wireless data services.
The Transcomm Board believes that the Offer values Transcomm's business on a
favourable multiple of current earnings, and at a premium to both net assets and
Transcomm's recent share price. In addition, the Transcomm Board believes that
the Offer provides Transcomm Shareholders with an opportunity to realise a
higher and more certain value from their equity holdings in the short term than
would otherwise be possible should the business continue to operate
independently.
5. Information relating to BT
BT is one of Europe's leading providers of telecommunication services. Its
principal activities include local, national and international telecommunication
services, higher-value broadband and internet products and services, and IT
solutions. In the UK, BT serves over 20 million business and residential
customers with more than 29 million exchange lines, as well as providing network
services to other licensed operators.
BT consists principally of three lines of business:
BT Retail, serving the voice and data telecommunications needs of businesses and
residential customers throughout the UK;
BT Wholesale, providing network services and solutions in the UK, including
ADSL, conveyance, transit, bulk delivery of private circuits, frame relay and
ISDN connections; and
BT Global Services, BT's managed services and solutions provider, serving
multi-site organisations worldwide. Its core target market is the top 10,000
global multi-site organisations with European operations.
British Telecommunications plc has over 100,000 employees and for the year ended
31 March 2003 (in relation to continuing activities) had turnover of #18.7
billion (2002: #18.4 billion) and profit before tax (before goodwill and
exceptional items) of #1,829 million (2002: #1,273 million). The consolidated
net assets of British Telecommunications plc as at 31 March 2003 were #21.1
billion (2002: #18.1 billion).
6. Irrevocable undertakings to accept the Offer
BT has received irrevocable undertakings to accept the Offer in respect of, in
aggregate, 49,652,107 Transcomm Shares, representing approximately 48.3 per
cent. of the existing issued share capital of Transcomm. This total is made up
as follows:
the Transcomm Directors (including their related trusts) have given irrevocable
undertakings to accept the Offer in respect of an aggregate of 256,893 Transcomm
Shares, representing approximately 0.2 per cent. of the existing issued share
capital of Transcomm; and
certain other Transcomm Shareholders have given irrevocable undertakings to
accept the Offer in respect of an aggregate of 49,395,214 Transcomm Shares,
representing approximately 48.0 per cent. of the existing issued share capital
of Transcomm.
7. Management and employees of Transcomm
BT has confirmed that, in the event that the Offer becomes or is declared
unconditional in all respects, the existing employment rights, including pension
rights, of all management and employees of Transcomm will be fully safeguarded.
8. Inducement fee arrangement
Transcomm entered into an agreement with BT on 23 January 2004, pursuant to
which Transcomm agreed to pay the sum of #159,000 to BT in the event that, on or
before the date upon which the Offer becomes or is declared wholly unconditional
or lapses or is withdrawn:
(a) the Transcomm Directors (or any of them) withdraw their
recommendation of the Offer, or modify it in a manner which is reasonably likely
to adversely affect British Telecommunications plc or the chances of the Offer
becoming unconditional as to acceptances; or
(b) a firm intention to make a competing offer for Transcomm is announced
which, at any time, becomes or is declared wholly unconditional.
9. Transcomm Share Schemes
The Offer will extend to any Transcomm Shares unconditionally allotted or issued
pursuant to the exercise of options under the Transcomm Share Schemes while the
Offer remains open for acceptance (or, such earlier date as British
Telecommunications plc may, subject to the City Code decide, not being earlier
than the date on which the Offer becomes or is declared unconditional as to
acceptances or, if later, the first closing date of the Offer). British
Telecommunications plc will, if the Offer becomes or is declared wholly
unconditional, make appropriate proposals to the holders of outstanding options
under the Transcomm Share Schemes.
10. General
(a) Appendix I to this announcement contains the conditions and certain
further terms of the Offer. Appendix II provides further information in
connection with the Offer and Appendix III contains definitions of certain
expressions used in this announcement.
(b) The Offer will be subject to the applicable requirements of the City
Code, the Panel and the London Stock Exchange.
(c) The Offer Document will be posted to Transcomm Shareholders shortly.
(d) Assuming the Offer becomes or is declared unconditional in all
respects, BT intends as soon as practicable to procure the making of an
application by Transcomm to the London Stock Exchange for the cancellation of
admission of Transcomm Shares to AIM. It is anticipated that such cancellation
of admission will take effect no earlier than twenty business days after the
date on which the Offer becomes or is declared unconditional in all respects.
The cancellation of the admission of Transcomm Shares to AIM will significantly
reduce the liquidity and marketability of any Transcomm Shares not assented to
the Offer and their value may be affected in consequence.
(e) British Telecommunications plc intends, assuming it receives
sufficient acceptances under the Offer to entitle it to do so, to use the
procedures set out in sections 428 to 430F (inclusive) of the Act to acquire
compulsorily, on the same terms as the Offer, any outstanding Transcomm Shares
not assented to the Offer.
(f) It is also proposed that, following successful completion of the
Offer, Transcomm will be re-registered as a private company.
11. Recommendation
The Transcomm Directors, who have been so advised by Nabarro Wells, consider the
terms of the Offer to be fair and reasonable. In providing advice to the
Transcomm Directors, Nabarro Wells has taken account of the commercial
assessments of the Transcomm Directors.
Accordingly, the Transcomm Directors unanimously recommend Transcomm
Shareholders to accept the Offer, as they have irrevocably undertaken to do in
respect of their own beneficial holdings of 256,893 Transcomm Shares,
representing, in aggregate, approximately 0.2 per cent. of the existing issued
share capital of Transcomm.
Enquiries:
BT
Mike Bartlett, BT Newsroom 020 7356 5369
Jon Carter, BT Retail Press Office 020 7356 4523
Transcomm
Rod Matthews MBE, Chairman 020 8990 9090
Andrew Carver, Chief Executive
Russell Backhouse, Finance Director
Nabarro Wells
(Financial Adviser to Transcomm)
Hugh Oram 020 7710 7400
Nigel Atkinson
This announcement does not constitute an offer or an invitation to sell,
purchase or subscribe for any securities. The laws of relevant overseas
jurisdictions may affect or prohibit the availability of the Offer to persons
not resident in the United Kingdom or who are citizens, residents or nationals
of jurisdiction outside the United Kingdom or who are nominees of, or custodians
or trustees for, citizens, residents or nationals of other countries. Such
persons should inform themselves about, and observe, any applicable
requirements. Further details in relation to overseas shareholders will be
contained in the Offer Document.
Unless otherwise determined by British Telecommunications plc, the Offer will
not be made, directly or indirectly, in or into, or by use of the mails of, or
by any means or instrumentality (including, without limitation, electronic mail,
facsimile transmission, telex or telephone) of interstate or foreign commerce
of, or any facilities of a securities exchange of, the USA, or in or into
Canada, Australia or Japan and, subject to certain exceptions, the Offer will
not be capable of acceptance by any such use, means or instrumentality or
facilities or from or within any of the USA, Canada, Australia or Japan.
Accordingly, copies of this announcement are not being, and must not be, mailed
or otherwise forwarded, transmitted, distributed or sent in, into or from the
USA, Canada, Australia or Japan. Doing so may render invalid any purported
acceptance of the Offer. Any persons (including, without limitation, nominees,
trustees and custodians) who would or otherwise intend to forward this
announcement to any jurisdiction outside the United Kingdom or to overseas
persons should seek appropriate professional advice before taking any action.
This announcement has been issued by British Telecommunications plc and approved
by PricewaterhouseCoopers for the purpose of section 21 of the Financial
Services and Markets Act 2000. The principal place of business of
PricewaterhouseCoopers is 1 Embankment Place, London WC2N 6RH.
PricewaterhouseCoopers, which is authorised and regulated in the United Kingdom
by the Financial Services Authority for designated investment business, is
acting for BT Group plc and British Telecommunications plc and no-one else in
connection with the Offer and will not be responsible to anyone other than BT
Group plc and British Telecommunications plc for providing the protections
offered to clients of PricewaterhouseCoopers or for providing or giving advice
in relation to the Offer or any other matter referred to in this announcement.
Nabarro Wells, which is authorised and regulated in the United Kingdom by the
Financial Services Authority, is acting for Transcomm and no-one else in
relation to the Offer and will not be responsible to anyone other than Transcomm
for providing the protections offered to clients of Nabarro Wells or for
providing or giving advice in relation to the Offer or any other matter referred
to in this announcement.
The directors of British Telecommunications plc accept responsibility for the
information contained in this announcement, other than that relating to
Transcomm (including Mobitex), the Transcomm Group and the Transcomm Directors
and members of their immediate families, related trusts and persons connected
with them (within the meaning of section 346 of the Act). To the best of the
knowledge and belief of the directors of British Telecommunications plc (who
have taken all reasonable care to ensure that such is the case), the information
contained in this announcement for which they accept responsibility is in
accordance with the facts and does not omit anything likely to affect the import
of such information.
The Transcomm Directors accept responsibility for the information contained in
this announcement relating to Transcomm (including Mobitex), the Transcomm Group
and the Transcomm Directors and members of their immediate families, related
trusts and persons connected with them (within the meaning of section 346 of the
Act). To the best of the knowledge and belief of the Transcomm Directors (who
have taken all reasonable care to ensure that such is the case), the information
contained in this announcement for which they accept responsibility is in
accordance with the facts and does not omit anything likely to affect the import
of such information.
APPENDIX I
CONDITIONS AND CERTAIN FURTHER TERMS OF THE OFFER
Conditions of the Offer
The Offer will be subject to the following conditions:
valid acceptances being received (and not, where permitted, withdrawn) by 3.00
p.m. on the first closing date of the Offer (or such later time(s) and/or date
(s) as British Telecommunications plc may, with the consent of the Panel or in
accordance with the rules of the City Code, decide) in respect of not less than
90 per cent. (or such lesser percentage as British Telecommunications plc may
decide) of the Transcomm Shares to which the Offer relates, provided that this
condition will not be satisfied unless British Telecommunications plc and/or any
of its wholly-owned subsidiaries shall have acquired or agreed to acquire,
whether pursuant to the Offer or otherwise, Transcomm Shares carrying, in
aggregate, more than 50 per cent. of the voting rights then normally exercisable
at a general meeting of Transcomm (on such basis as may be required by the
Panel, including for this purpose (to the extent, if any, required by the Panel)
any voting rights attaching to any Transcomm Shares which are unconditionally
allotted or issued before the Offer becomes or is declared unconditional as to
acceptances, whether pursuant to the exercise of conversion or subscription
rights or otherwise); and for this purpose:
the expression "Transcomm Shares to which the Offer relates" shall be construed
in accordance with sections 428 to 430F of the Act; and
shares which have been unconditionally allotted shall be deemed to carry the
voting rights which they will carry upon issue;
the Office of Fair Trading not indicating that it is the intention of the Office
of Fair Trading to refer the Acquisition, or any matter arising therefrom or in
connection therewith, to the Competition Commission;
no Relevant Authority having decided to take, institute, implement or threaten
any action, suit, proceeding, investigation, enquiry or reference, or made,
proposed or enacted any statute, regulation, decision or order or required any
action to be taken or information to be provided or otherwise having taken or
refrained from having taken any other action, and there not continuing to be in
force any statute, regulation, rule, order or decision that, in any such case,
will or might reasonably be expected to:
make the Offer or its implementation or the acquisition or proposed acquisition
by British Telecommunications plc (or any other member of the Wider BT Group) of
any Transcomm Shares or control or management of Transcomm or any member of the
Wider Transcomm Group void, voidable, unenforceable or illegal under the laws of
any jurisdiction, or otherwise, directly or indirectly, restrain, restrict,
prohibit or delay, or impose additional or amended conditions or obligations
with respect to, or otherwise challenge or interfere with, any of the foregoing;
or
require, prevent, delay, restrict, or alter the proposed terms for, the
divestiture by British Telecommunications plc (or any other member of the Wider
BT Group) or any member of the Wider Transcomm Group of all or any part of their
respective businesses, assets or properties or impose any limitation on the
ability of any of them to conduct or to own, use or operate all or any part of
the respective businesses, assets or properties owned by, or the use or
operation of which is enjoyed by, any of them, or result in any of them ceasing
to be able to carry on business, or being restricted in its carrying on of
business, under any name under which it currently does so, in each case the
result of which would or might reasonably be expected to be material in the
context of the Wider Transcomm Group taken as a whole; or
impose any limitation on the ability of British Telecommunications plc (or any
other member of the Wider BT Group) or any member of the Wider Transcomm Group,
directly or indirectly, to acquire or to hold or to exercise effectively any
rights of ownership of shares or other securities (or the equivalent) in any
member of the Wider Transcomm Group or any member of the Wider BT Group, or to
exercise management or voting control over any member of the Wider Transcomm
Group or any member of the Wider BT Group; or
require any member of the Wider BT Group or any member of the Wider Transcomm
Group to acquire, or to offer to acquire, any shares or other securities or
indebtedness (or the equivalent) in or of British Telecommunications plc or any
member of the Wider Transcomm Group or any shares or other securities or
indebtedness (or the equivalent) in or of, or asset owned by, any other person,
or to dispose of or repay, or to offer to dispose of or repay, any shares or
other securities or indebtedness (or the equivalent) in or of, or any asset
owned by, any member of the Wider BT Group or any member of the Wider Transcomm
Group; or
impose any material limitation on the ability of British Telecommunications plc
or any member of the Wider Transcomm Group to integrate its business, or any
part of it, with any business or part of business of any member of the Wider BT
Group or any member of the Wider Transcomm Group; or
otherwise materially and adversely affect the business, assets, financial or
trading position or profits, prospects or value of any member of the Wider
Transcomm Group or any member of the Wider BT Group; or
result in any member of the Wider BT Group or any member of the Wider Transcomm
Group ceasing to be able to carry on business under any name under which it
currently does so,
and all applicable waiting and other time periods during which any Relevant
Authority could decide to take, institute, implement or threaten any such
action, suit, proceeding, investigation, enquiry or reference having expired,
lapsed or been terminated;
all necessary filings having been made and all statutory or regulatory
obligations in any jurisdiction having been complied with, and all appropriate
waiting or other time periods under any applicable legislation or regulations of
any jurisdiction having expired, lapsed or been terminated, in each case in
connection with the Offer or the acquisition or proposed acquisition of any
Transcomm Shares, or of control or management of Transcomm (or any other member
of the Wider Transcomm Group) by British Telecommunications plc (or any other
member of the Wider BT Group), and all Relevant Authorisations reasonably
necessary or appropriate for, or in respect of, the Offer or any acquisition or
proposed acquisition of any Transcomm Shares, or of control or management of
Transcomm (or any other member of the Wider Transcomm Group), by British
Telecommunications plc (or any other member of the Wider BT Group) or to permit
or enable British Telecommunications plc to carry on the business of any member
of the Wider Transcomm Group, having been obtained in terms and in a form
reasonably satisfactory to British Telecommunications plc, from all appropriate
Relevant Authorities and from all appropriate persons, authorities or bodies
with whom any member of the Wider BT Group or any member of the Wider Transcomm
Group has entered into contractual arrangements, and all such Relevant
Authorisations remaining in full force and effect, and there being no notice or
intimation of any intention to revoke, modify, restrict, suspend or not to renew
any of them, in each case the result of which would or might reasonably be
expected to be material in the context of the Wider Transcomm Group taken as a
whole;
save as fairly disclosed in the annual report and accounts of Transcomm for the
year ended 31 December 2002 (the "Transcomm 2002 Accounts"), or as fairly
disclosed in writing by or on behalf of Transcomm to British Telecommunications
plc or its advisers in connection with the Offer prior to the announcement of
the Offer, or as publicly announced by release of an announcement through an
appropriate Regulatory Information Service ("Publicly Announced") prior to the
date of the announcement of the Offer, there being no provision of any Relevant
Instrument which, in consequence of the making or implementation of the Offer,
the acquisition or proposed acquisition by any member of the Wider BT Group of
any Transcomm Shares or any change in the control or management of Transcomm or
any other member of the Wider Transcomm Group, or otherwise, provides for, or
will or might reasonably be expected to result in, any of the following:
any money borrowed by, or any other indebtedness (actual or contingent) of, any
member of the Wider Transcomm Group being or becoming repayable or capable of
being declared repayable immediately or prior to their stated maturity, or the
ability of any such member to borrow monies or incur any indebtedness being
withdrawn or inhibited; or
the creation of any mortgage, charge or other security interest over the whole
or any part of the business, property or assets of any member of the Wider
Transcomm Group or any such security (whenever arising or having arisen)
becoming enforceable or being enforced; or
any Relevant Instrument or any right, liability, obligation, interest or
business of any member of the Wider Transcomm Group (or any related arrangement)
being terminated or modified or affected, or any action being taken, or any
obligation arising, under any Relevant Instrument, in each case the result of
which would or might reasonably be expected to be material in the context of the
Wider Transcomm Group taken as a whole; or
any asset or right (including, without limitation, intellectual property rights)
or interest of, or any asset or such right the use or operation of which is
enjoyed by, any member of the Wider Transcomm Group being or falling to be
disposed of other than in the ordinary course of business, or charged, or
ceasing to be available to any such member, or any right arising under which any
such asset or interest or such right will or could be required to be disposed of
or charged, or will or could cease to be so available, in each case the result
of which would or might reasonably be expected to be material in the context of
the Wider Transcomm Group taken as a whole; or
the interest or business of any member of the Wider Transcomm Group in or with
any company, firm, body or person, or any arrangements relating to any such
interest or business, being terminated or adversely modified or affected; or
the financial or trading position or prospects of any member of the Wider
Transcomm Group being prejudiced or adversely affected to an extent which is or
might reasonably be expected to be material in the context of the Wider
Transcomm Group taken as a whole; or
any member of the Wider Transcomm Group ceasing to be able, or being restricted
in being able, to carry out business under any name under which it currently
does so to an extent which is or might reasonably be expected to be material in
the context of the Wider Transcomm Group taken as a whole; or
any member of the Wider Transcomm Group or any member of the Wider BT Group
being required to acquire, or to offer to acquire, any shares or other
securities or indebtedness (or the equivalent) in or of any member of the Wider
Transcomm Group or the Wider BT Group or any shares or other securities or
indebtedness (or the equivalent) in or of, or any asset owned by, any other
person or to dispose of or repay, or to offer to dispose of or repay, any shares
or other securities or indebtedness (or the equivalent) in or of, or any asset
owned by, any member of the Wider Transcomm Group or any member of the Wider BT
Group to an extent which is or might reasonably be expected to be material in
the context of the Wider Transcomm Group taken as a whole,
and no event having occurred which, under any provision of any Relevant
Instrument, would or could reasonably be expected to result in any of the events
or circumstances referred to in sub-paragraphs (a) to (h) of this paragraph 5;
save as fairly disclosed in the Transcomm 2002 Accounts or as fairly disclosed
in writing by or on behalf of Transcomm to British Telecommunications plc or its
advisers in connection with the Offer prior to the announcement of the Offer, or
as Publicly Announced prior to the date of that announcement, no member of the
Wider Transcomm Group having, since 31 December 2002:
made (in the case of Transcomm) any alteration to its memorandum or articles of
association or (in the case of any other member of the Wider Transcomm Group)
any alteration to its memorandum or articles of association or other
constitutional documents which is or could reasonably be considered to be
material; or
recommended, declared, paid or made, or proposed the recommendation,
declaration, paying or making of, any dividend, bonus or other distribution,
whether in cash or otherwise (other than to Transcomm or a wholly-owned
subsidiary of Transcomm); or
issued or agreed to issue, authorised or proposed the issue of additional shares
of any class, or of securities convertible into, or rights, warrants or options
to subscribe for or acquire, any such shares or securities or any loan capital
(other than issues to Transcomm or a wholly-owned subsidiary of Transcomm, and
save in respect of options granted under the Transcomm Share Schemes or as
fairly disclosed in writing by or on behalf of Transcomm to British
Telecommunications plc or its advisers in connection with the Offer prior to the
announcement of the Offer, and save for Transcomm Shares allotted on the
exercise of any such option) or redeemed, purchased or reduced, or authorised or
proposed the redemption, purchase or reduction of any part of its share capital;
or
(other than to Transcomm or a wholly-owned subsidiary of Transcomm) issued,
authorised or proposed the issue of any debentures or securities or, save in the
ordinary course of business, incurred or increased any indebtedness or
contingent liability; or
entered into or varied or implemented, or authorised, proposed, or announced its
intention to enter into, vary, or implement, any contract, scheme, transaction,
commitment or other arrangement which is outside the ordinary course of trading;
or
authorised or proposed, or effected, any merger, demerger, reconstruction or
amalgamation, or (to an extent which is or might reasonably be expected to be
material in the context of the Wider Transcomm Group taken as a whole) any
acquisition or disposal or transfer of, or any charge or security interest or
other encumbrance in respect of, any asset or any right, title or interest in
any shares or asset (other than in the ordinary course of trading); or
authorised or proposed or effected any mortgage charge, grant of security
interest or other third party right or encumbrance over any asset or any right,
title or interest in any shares or other asset (other than in the ordinary
course of trading); or
entered into, or varied (other than in respect of increases in remuneration
required under the terms of the relevant agreement) the terms of, any service
contract, or other agreement or other arrangement with any of the directors or
senior executives or senior employees of any member of the Wider Transcomm
Group; or
been unable or threatened in writing that it is unable to pay its debts or
having stopped or suspended (or threatened to stop or suspend) payment of its
debts generally or a substantial part thereof or ceased or threatened to cease
carrying on all or a substantial part of its business; or
taken or proposed any action or had any proceedings instituted, threatened or
proposed for its winding-up (voluntarily or otherwise), or dissolution or
reorganisation (save for any such winding-up or dissolution whilst solvent) or
for the appointment of a receiver, administrator, administrative receiver,
trustee or similar or analogous officer of all or any of its assets or revenues
or for any similar or analogous matters in any jurisdiction; or
to an extent which is or might reasonably be expected to be material in the
context of the Wider Transcomm Group taken as a whole, waived or compromised any
claim, other than in the ordinary course of business; or
entered into any commitment, agreement or arrangement, or passed any resolution
or made any offer, with respect to, or announced an intention to effect or to
propose, any of the transactions, matters or events referred to in this
paragraph 6;
save as fairly disclosed in the Transcomm 2002 Accounts or as fairly disclosed
in writing by or on behalf of Transcomm to British Telecommunications plc or its
advisers in connection with the Offer prior to the announcement of the Offer, or
as Publicly Announced prior to the date of that announcement:
no adverse change or deterioration having occurred in the business, assets,
financial or trading position or profits, prospects or value of any member of
the Wider Transcomm Group which would or might reasonably be expected to be
material in the context of the Wider Transcomm Group taken as a whole;
no litigation, arbitration proceedings, prosecution or other legal proceedings
to which any member of the Wider Transcomm Group is or may become a party
(whether as a claimant, defendant or otherwise), and no investigation or enquiry
by, or complaint or reference to, any Relevant Authority against or in respect
of any member of the Wider Transcomm Group, having been instituted, announced or
threatened or remaining outstanding, in each case which would or might
reasonably be expected to be material in the context of the Wider Transcomm
Group taken as a whole;
no steps having been taken which will result in, or could reasonably be expected
to result in, the withdrawal, cancellation, termination or adverse modification
of any licence or permit held by any member of the Wider Transcomm Group which
would or might reasonably be expected to be material in the context of the Wider
Transcomm Group taken as a whole; and
no material contingent or other liability having arisen or increased or become
apparent to British Telecommunications plc which might reasonably be expected to
adversely affect any member of the Wider Transcomm Group and which would or
might reasonably be expected to be material in the context of the Wider
Transcomm Group taken as a whole;
British Telecommunications plc not having discovered, except as fairly disclosed
in writing by or on behalf of Transcomm to British Telecommunications plc or its
advisers in connection with the Offer prior to the announcement of the Offer, or
as Publicly Announced on or prior to the date of that announcement:
that any financial or business or other information concerning the Wider
Transcomm Group as contained in the information publicly disclosed at any time
by or on behalf of any member of the Wider Transcomm Group, or disclosed at any
time by or on behalf of any member of the Wider Transcomm Group in writing in
connection with the Offer to British Telecommunications plc or its agents or
advisers, is materially misleading or contains a material misrepresentation of
fact or omits to state a fact reasonably necessary to make the information
contained therein not misleading; or
any information which materially affects the import of any such information as
is mentioned in sub-paragraph (a) of this paragraph 8; or
any undertaking in which any member of the Wider Transcomm Group has a
significant economic interest and which is not a subsidiary of Transcomm is
subject to any liability, contingent or otherwise, which is not fairly disclosed
in the Transcomm 2002 Accounts and which would or might reasonably be expected
to be material in the context of the Wider Transcomm Group taken as a whole; or
that any circumstance exists whereby a person or class of persons would be
likely to have any claim or claims against any past or present member of the
Wider Transcomm Group which would or might reasonably be expected to be material
in the context of the Wider Transcomm Group taken as a whole; and
save as fairly disclosed in writing by or on behalf of Transcomm to British
Telecommunications plc or its advisers in connection with the Offer prior to the
announcement of the Offer, British Telecommunications plc not having discovered
any of the following matters:
that there has been any release, emission, disposal, spillage or leak of any
waste or hazardous substance or any substance likely to impair the environment
or harm human health on or about or from any property or water now or previously
owned, occupied, used or controlled by any past or present member of the Wider
Transcomm Group (whether or not constituting a non-compliance by any person with
any applicable law, statute, ordinance or any regulation, rule or other
requirement of any Relevant Authority) and, in any such case, will or would be
likely to give rise to any liability (whether actual or contingent) on the part
of any member of the Wider Transcomm Group which would or might reasonably be
expected to be material in the context of the Wider Transcomm Group taken as a
whole; or
that any past or present member of the Wider Transcomm Group has committed any
violation of any applicable laws, statutes or ordinances, or any regulations,
rules or other requirements of any Relevant Authority, relating to the disposal,
discharge, spillage, leak or emission of any waste or hazardous substance or any
substance likely to impair the environment or harm human health, or otherwise
relating to environmental matters which would or might reasonably be expected to
be material in the context of the Wider Transcomm Group taken as a whole; or
that there is or is reasonably likely to be, any liability (actual or
contingent) on any member of the Wider Transcomm Group to make good, repair,
reinstate or clean up any property or water now or previously owned, occupied or
used or controlled by any past or present member of the Wider Transcomm Group
under any environmental legislation, regulation, notice, circular, order or
requirement of any Relevant Authority which would or might reasonably be
expected to be material in the context of the Wider Transcomm Group taken as a
whole.
British Telecommunications plc reserves the right to waive all or any of the
above conditions, in whole or in part, except condition 1. British
Telecommunications plc shall be under no obligation to waive or treat as
satisfied any of conditions 2 to 9 inclusive by a date earlier than the latest
date specified above for the satisfaction thereof (or, if no such date is
specified, the date when the Offer, if such be the case, shall become or be
declared unconditional in all respects) notwithstanding that the other
conditions of the Offer may at an earlier date have been waived or fulfilled and
that there are at such earlier date no circumstances indicating that any of such
conditions may not be capable of fulfilment.
The Offer will lapse unless the conditions set out above (other than condition
1) are fulfilled or (if capable of waiver) waived or, where appropriate, have
been determined by British Telecommunications plc to be or to remain satisfied,
no later than midnight on the 21st day after the later of the first closing date
of the Offer and the date on which the Offer becomes or is declared
unconditional as to acceptances, or such later date as the Panel may agree.
If British Telecommunications plc is required by the Panel to make an offer for
Transcomm Shares under the provisions of Rule 9 of the City Code, British
Telecommunications plc may make such alterations to any of the conditions
(including, without limitation, condition 1 above), or any of the terms of the
Offer, as are necessary to comply with the provisions of that Rule.
APPENDIX II
FURTHER INFORMATION
Further details of the Offer
The Offer will be subject to the terms and conditions as set out in Appendix I
and this Appendix II and as will be set out in the Offer Document and the Form
of Acceptance, or as may be required to comply with the provisions of the City
Code.
The Offer will extend to any Transcomm Shares unconditionally allotted or issued
while the Offer remains open for acceptance (or before such earlier date as
British Telecommunications plc may, subject to the City Code, decide, not being
earlier than the date on which the Offer becomes or is declared unconditional as
to acceptances or, if later, the first closing date of the Offer), whether
pursuant to the Transcomm Share Schemes or otherwise.
Under the Offer, the Transcomm Shares are to be acquired fully paid and free
from all liens, charges, equitable interests, encumbrances, rights of
pre-emption and any other third party rights or interests and together with all
rights attaching thereto, including the right to receive and retain all
dividends or other distributions (if any) declared, paid or made on or after 23
January 2004, being the date of this announcement.
The Offer will lapse if, in respect of the Acquisition, there is a reference to
the Competition Commission before 3.00 p.m. on the first closing date of the
Offer or the time and date on which the Offer becomes or is declared
unconditional as to acceptances, whichever is the later. If the Offer lapses,
the Offer will cease to be capable of further acceptance and Transcomm
Shareholders and British Telecommunications plc will thereupon cease to be bound
by any Form of Acceptance submitted before the time when the Offer lapses.
Fractions of a penny will not be payable to persons accepting the Offer and the
aggregate consideration payable to a person who validly accepts the Offer will
be rounded down to the nearest whole penny.
Overseas Shareholders
The making of the Offer to certain persons not resident in the United Kingdom,
or who are citizens, residents or nationals of jurisdictions outside the United
Kingdom or who are nominees of, or custodians or trustees for, citizens,
residents or nationals of other countries ("overseas shareholders"), may be
prohibited or affected by the laws of the relevant overseas jurisdictions. Such
overseas shareholders should inform themselves about and observe any applicable
legal requirements. It is the responsibility of any overseas shareholder
wishing to accept the Offer to satisfy himself as to the full observance of the
laws of the relevant jurisdiction in connection therewith, including the
obtaining of any governmental, exchange control or other consents which may be
required, compliance with other formalities needing to be observed and the
payment of any issue, transfer or other taxes due in such jurisdiction. Any
such overseas shareholder will be responsible for payment of any issue, transfer
or other taxes, duties or other requisite payment(s) due in such jurisdiction(s)
by whomsoever payable and British Telecommunications plc and any person acting
on its behalf shall be entitled to be fully indemnified and held harmless by
such overseas shareholder for any issue, transfer or other taxes or duties or
other requisite payments as British Telecommunications plc or any person acting
on behalf of British Telecommunications plc may be required to pay in respect of
the Offer insofar as they relate to such overseas shareholder.
Disclosure of interests and irrevocable undertakings
(a) BT has received irrevocable undertakings to accept the Offer from the
following Transcomm Directors (and their related trusts) in respect of the
following holdings of Transcomm Shares:
Transcomm Shareholder Number of Transcomm Shares
Rod Matthews 46,893
Russell Backhouse 10,000
Sir Aubrey Brocklebank 100,000
R C Greig Nominees Limited (as nominee of Sir Aubrey 100,000
Brocklebank)
256,893
These irrevocable undertakings will remain binding in the event of any competing
offer.
(b) In addition, BT has received irrevocable undertakings to accept the
Offer in respect of the following holdings of Transcomm Shares:
Transcomm Shareholder Number of Transcomm Shares
Isis Asset Management plc 15,192,167
M&G Investment Management Limited 10,815,000
HSBC Trustee (CI) Limited 4,430,747
Dartington Portfolio Nominees Limited 4,191,350
HSBC Global Custody Nominee (UK) Limited 2,400,000
Worldwide Electronic Consultants Limited 2,303,798
Singer & Friedlander Investment Management Limited 2,280,507
David Perry 1,580,000
Andreas Shenker 1,359,378
Rock Nominees Limited 1,300,000
Pershing Keen Nominees Limited 1,250,000
Rathbone Nominees Limited 1,050,300
David Robertson 853,905
Roger Cattell 368,062
Andrew Fitton 20,000
49,395,214
All of these irrevocable undertakings will remain binding in the event of any
competing offer, save that the irrevocable undertakings received from Isis Asset
Management plc and Dartington Portfolio Nominees Limited will lapse if a third
party makes a competing offer under which the amount or value of the
consideration offered for each Transcomm Share exceeds 17.5 pence.
(c) Accordingly, BT has received irrevocable undertakings to accept the
Offer in respect of an aggregate of 49,652,107 Transcomm Shares, representing
48.3 per cent. of the existing issued share capital of Transcomm.
(d) Save as disclosed in this announcement, neither British
Telecommunications plc, nor any of the directors of British Telecommunications
plc, nor any member of the immediate family, or related trust, of a director of
British Telecommunications plc, nor, so far as British Telecommunications plc is
aware, any other person acting, or deemed to be acting, in concert with British
Telecommunications plc for the purposes of the Offer, owns or controls any
Transcomm Shares or holds any options to purchase any Transcomm Shares or holds
any derivatives referenced to Transcomm Shares, or has any arrangement in
respect of any Transcomm Shares. For these purposes, "arrangement" includes any
indemnity or option arrangement and any agreement or understanding, formal or
informal, of whatever nature relating to Transcomm Shares which may be an
inducement to deal or refrain from dealing in Transcomm Shares.
(e) Other than the confirmation given in paragraph (d) above in
connection with the directors of British Telecommunications plc, their immediate
families and their related trusts, in view of the requirement for
confidentiality prior to the announcement of the Offer, it has not been
practicable prior to the making of this announcement to make enquiries regarding
any holdings of Transcomm Shares by persons or entities (such as pension funds)
with which British Telecommunications plc might be deemed to be acting in
concert. To the extent that such information, when available, is considered by
the Panel to be material, it will be publicly disclosed at that time.
APPENDIX III
DEFINITIONS
The following definitions apply throughout this announcement unless the context
requires otherwise:
Acquisition the proposed acquisition by British Telecommunications plc of
Transcomm pursuant to the Offer
Act or Companies Act the Companies Act 1985, as amended
ADSL asymmetric digital subscriber line
AIM the market known as AIM and operated by the London Stock Exchange
AIM Rules the AIM rules published by the London Stock Exchange and for the time
being in force
associated undertaking to be construed in accordance with the Act (but for this purpose
ignoring paragraph 20(1)(b) of Schedule 4A thereof)
BT BT Group plc and its subsidiaries (including British
Telecommunications plc) or, as the context requires, any of such
companies
City Code The City Code on Takeovers and Mergers
Closing Price the closing middle market quotation as derived from the AIM appendix
to the Daily Official list
Daily Official List the Daily Official List published by the London Stock Exchange
EBITDA earnings before interest, tax, depreciation and amortisation
EPOS electronic point of sale
Form of Acceptance the form of acceptance and authority for use in connection with the
Offer
ISDN integrated services digital network
London Stock Exchange London Stock Exchange plc
Nabarro Wells Nabarro, Wells and Co, Limited
Offer the recommended offer to be made by British Telecommunications plc
for the Transcomm Shares on the terms and subject to the conditions
described in this announcement and to be set out in the Offer
Document and the Form of Acceptance (including, where the context so
requires, any subsequent revision, variation, renewal or extension
thereof)
Offer Document the formal offer document to be sent to Transcomm Shareholders
containing the Offer
Offer Period the period commencing on 15 December 2003 (being the date of the
announcement by Transcomm that the Transcomm Board was in talks that
may or may not lead to an offer being made for Transcomm) and ending
on the latest of: (i) 3.00 p.m. on the first closing date of the
Offer; (ii) the date and time when the Offer becomes or is declared
unconditional as to acceptances; and (iii) the date and time when the
Offer lapses
Panel The Panel on Takeovers and Mergers
PricewaterhouseCoopers PricewaterhouseCoopers LLP (a limited liability partnership
registered in England with registered number OC30352) which is
authorised and regulated in the United Kingdom by the Financial
Services Authority for designated investment business
Regulatory Information Service has the meaning given to that expression in the AIM Rules
Relevant Authorisation any authorisation, order, grant, recognition, confirmation,
determination, consent, licence, clearance, permission, allowance or
approval
Relevant Authority any government, government department or governmental,
quasi-governmental, supranational, statutory, regulatory or
investigative body or authority, any trade agency, or any court,
tribunal or any association, institution or other person or body
whatsoever in any jurisdiction
Relevant Instrument any agreement, arrangement, licence, permit, lease or other
instrument or obligation whatsoever to which any member of the Wider
Transcomm Group is a party or by or to which any such member or any
of its assets is or may be bound, entitled or subject
subsidiary and subsidiary to be construed in accordance with the Act
undertaking
substantial interest in relation to an undertaking, an interest, direct or indirect, in 20
per cent. or more of the voting rights exercisable in relation to the
undertaking or in the capital or of any class of capital of such
undertaking
Transcomm Transcomm plc
Transcomm Directors or the board of directors of Transcomm
Transcomm Board
Transcomm Group or Group Transcomm and its subsidiary undertakings
Transcomm Shareholders holders of any Transcomm Shares
Transcomm Shares the existing issued and fully paid (or credited as fully paid)
ordinary shares of 5p each in the capital of Transcomm and any
further such shares which are unconditionally allotted or issued
after the date hereof and before the time at which the Offer ceases
to be open for acceptance (or before such other time as British
Telecommunications plc may decide in accordance with the terms and
conditions of the Offer)
Transcomm Share Schemes the schemes and arrangements pursuant to which employees of the
Transcomm Group have been granted options to subscribe for shares in
Transcomm, comprising the Transcomm plc Share Option Scheme, The
Transcomm plc Share Option Scheme 2002 and certain additional deeds
of grant
UK or United Kingdom the United Kingdom of Great Britain and Northern Ireland
undertaking to be construed in accordance with the Act
USA or United States 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
Wider BT Group BT Group plc and its subsidiary undertakings, associated undertakings
and any other undertaking in which BT Group plc and any such
undertakings (aggregating their interests) have a substantial
interest
Wider Transcomm Group Transcomm and its subsidiary undertakings, associated undertakings
and any other undertakings in which Transcomm and any such
undertakings (aggregating their interests) have a substantial
interest
This information is provided by RNS
The company news service from the London Stock Exchange
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