CP Ships accepts offer for US $2 billion in cash
August 21 2005 - 12:00AM
PR Newswire (US)
GATWICK, UK, Aug. 21 /PRNewswire-FirstCall/ -- The CP Ships Limited
Board of Directors has unanimously recommended that shareholders
accept an offer from TUI AG to acquire CP Ships in an all-cash
transaction for US $21.50 per share or about $2.0 billion on a
fully diluted basis. Including the assumption of net debt of $0.3
billion at 30th June 2005, the transaction has a total value of
$2.3 billion. The offer price represents a premium of about 28%
over CP Ships average closing share price over the past three
months. TUI, the parent of Hapag-Lloyd, plans to combine
Hapag-Lloyd and CP Ships to create the world's fifth-largest
container shipping company with a fleet of 139 ships (and a further
17 on order) for a capacity of approximately 400,000 teu on over
100 routes spanning the globe. Before the effects of consolidation
the combined shipping business would have had sales of
approximately $7.0 billion and EBITDA of $731 million in 2004.
"Having improved the performance of the business after a difficult
2004, the Board undertook a review of our business and its
potential opportunities. This transaction represents immediate and
attractive value for our shareholders and the Board has recommended
it unanimously," commented CP Ships CEO Ray Miles. "The combination
of Hapag-Lloyd and CP Ships will create a company with the strength
and scale to compete effectively in an industry where consolidation
is changing the landscape. Furthermore, the combined company will
offer enhanced resources and opportunities for both CP Ships and
Hapag-Lloyd's customers and employees," said Michael Behrendt,
Hapag-Lloyd CEO. "This transaction will enhance growth
opportunities over the longer term and will enhance value for TUI's
shareholders through CP Ships earnings potential and the
realization of synergy potential in operations and ship networks,"
said Dr Michael Frenzel, TUI CEO. "Our enlarged shipping business
will be well positioned to take advantage of the strong long term
growth dynamics in the container shipping industry. This is both a
compelling financial and strategic opportunity for us." TUI's offer
to acquire CP Ships is subject to customary closing conditions
including acceptance by shareholders representing two thirds of the
outstanding CP Ships shares and the receipt of necessary regulatory
approvals in Canada, the United States, Europe and certain other
countries. TUI has secured necessary bank financing to fund the
offer. The transaction is expected to close during the fourth
quarter of this year. CP Ships shareholders are advised to read the
TUI Offer and Circular, the CP Ships Directors' Circular
recommending acceptance and other offer documentation, all expected
to be available within the next two weeks and which will be filed
with the Canadian securities commissions and the United States
Securities and Exchange Commission, as they will contain important
information. Shareholders then will be able to obtain a copy of the
material at the Canadian SEDAR web site at http://www.sedar.com/
and at the SEC's web site at http://www.sec.gov/. CP Ships
management will discuss TUI's offer in a conference call and
presentation with the investment community on 22nd August 2005 at
3:00 pm London, UK time, 10:00 am EDT. The conference call will be
webcast live on the CP Ships website, http://www.cpships.com/,
where it will also be available in archive. In addition, parties
may join the call on a listen-only basis by calling 1 (800) 262
1292 (toll-free in Canada and the US). ABOUT CP SHIPS One of the
world's leading container shipping companies, CP Ships provides
international container transportation services in four key
regional markets: TransAtlantic, Australasia, Latin America and
Asia. Within these markets CP Ships operates 38 services in 22
trade lanes. At 30th June 2005, CP Ships' vessel fleet was 82 ships
and its container fleet 441,000 teu. Volume in 2004 was 2.3 million
teu. CP Ships also owns Montreal Gateway Terminals, which operates
one of the largest marine container terminal facilities in Canada.
CP Ships is listed on the Toronto and New York stock exchanges
under the symbol TEU and also in the S&P/TSX 60 Index of top
Canadian publicly listed companies. ABOUT TUI TUI is the European
market leader in tourism and, through its wholly owned subsidiary,
Hapag-Lloyd, is a leading player in the global market for container
shipping. The tour operators of TUI operate in 17 European
countries. In 2004, the Group had around 18 million customers. TUI
now includes about 3,290 travel agencies, 120 aircraft, 42 incoming
agencies and 285 hotels with approximately 163,000 beds in 28
countries. TUI provides its customers with holidays from a single
source - from booking in a travel agency, flights, accommodation in
the Group's own hotels and customer-care provided by the Group's
own incoming agencies. This vertical integration strategy covers
the whole value chain in the source markets (sales markets) and the
destinations (holiday areas) and provides its customers with high
standards of quality from start to finish. Through its wholly owned
subsidiary, Hapag-Lloyd, TUI operates one of the world's leading
container shipping companies and also operates a fleet of four
Cruise liners. The container shipping operation, with 57 container
ships, specializes in complex, wide-ranging logistics services. The
container ships primarily supply the main routes between Europe and
Asia, Europe and North America and North America and Asia.
Hapag-Lloyd's container shipping operation transported 2.4 million
TEU world-wide in 2004. The cruise ship division is the leading
"premium and luxury cruise" tour operator in German-speaking
countries. The cruise liners including the 5-star-plus "MS Europa"
are at home on all the world's oceans. FORWARD-LOOKING STATEMENTS
This report contains certain forward-looking information and
statements within the meaning of the United States Private
Securities Litigation Reform Act of 1995 relating but not limited
to, operations, anticipated or prospective financial performance,
results of operations, business prospects and strategies of CP
Ships. Forward-looking information typically contains statements
with words such as "consider," "anticipate," "believe," "expect,"
"plan," "intend," "likely" or similar words suggesting future
outcomes or statements regarding an outlook on future changes in
volumes, freight rates, costs, achievable cost savings, the
estimated amounts and timing of capital expenditures, anticipated
future debt levels and incentive fees or revenue, or other
expectations, beliefs, plans, objectives, assumptions, intentions
or statements about future events or performance. Readers should be
aware that these statements are subject to known and unknown risks,
uncertainties and other factors that could cause actual results to
differ materially from those suggested by the forward-looking
statements. Although CP Ships believes it has a reasonable basis
for making the forecasts or projections included in this report,
readers are cautioned not to place undue reliance on such
forward-looking information. By its nature, the forward-looking
information of CP Ships involves numerous assumptions, inherent
risks and uncertainties, both general and specific, that contribute
to the possibility that the predictions, forecasts and other
forward-looking statements will not occur. These factors include,
but are not limited to, changes in business strategies; general
global, political and economic and business conditions, including
the length and severity of any economic slowdown in the countries
and regions where CP Ships operates, including seasonality,
particularly in the United States, Canada, Latin America,
Australasia, Asia and Europe; the effects of competition and
pricing pressures; changes in freight rates; industry
over-capacity; changes in demand for container shipping;
congestion; availability and cost of chartered ships; changes in
laws and regulations, including tax, environmental, employment,
competition, anti-terrorism and trade laws; difficulties in
achieving cost savings; currency exposures and exchange rate
fluctuations, fuel price and interest rate fluctuations; changes in
access to capital markets and other sources of financing; various
events which could disrupt operations, including war, acts of
terrorism, severe weather conditions and external labour unrest,
all of which may be beyond CP Ships' insurance coverage; compliance
with security measures by governmental and industry trade practice
groups, the outcome of civil litigation related to CP Ships'
restatement of financial results and the impact of any resulting
legal judgments, settlements and expenses, and CP Ships'
anticipation of and success in managing the risks associated with
the foregoing. The above list of important factors affecting
forward-looking information is not exhaustive, and reference should
be made to the other risks discussed in CP Ships' filings with
Canadian securities regulatory authorities and the US Securities
and Exchange Commission. CP Ships undertakes no obligation, except
as required by law, to update publicly or otherwise revise any
forward-looking information, whether as a result of new
information, future events or otherwise, or the above list of
factors affecting this information. DATASOURCE: CP Ships CONTACT:
CP SHIPS CONTACTS, Investors, Jeremy Lee, VP Investor Relations and
Public Affairs, Telephone: (514) 934-5254, Mobile: (514) 502-3112,
; Media, Elizabeth Canna, VP Group Communications, Telephone: +44
(0)1293 861 921, Mobile: +41 (0)79 691 3764, ; TUI CONTACTS,
Investors, Bjorn Beroleit , TUI AG, telephone: +49 511 566 1310,
mobile: +49 172 808 3023, ; Media, Kuzey Esener, TUI AG, telephone:
+49 511 566 1487, ; Klaus Heims, Hapag-Lloyd AG, telephone: +49 40
3001 2263, m: +49 172 447 0135, ; Ian Blair, Hill & Knowlton,
telephone: (416) 413-4694, mobile: (416) 522-0717,
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