|
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN, INTO
OR FROM ANY JURISDICTION WHERE TO DO THE SAME WOULD CONSTITUTE A VIOLATION OF THE RELEVANT
LAWS OF SUCH JURISDICTION 10 December 2006
RECOMMENDED REVISED ACQUISITION
of Corus by Tata Steel
The boards of Tata Steel and Corus are pleased to announce that they have
agreed the terms of an increased recommended Acquisition (the "Revised
Acquisition") at a price of 500 pence in cash per Corus Share.
Details of the terms of the original Acquisition, also recommended by the Board of
Corus, were set out in the Scheme Document posted to Corus Shareholders on 10 November
2006.
Commenting on today’s announcement, Ratan Tata, Chairman of Tata Steel, said: "We
remain convinced of the compelling strategic rationale of this partnership and the revised
terms deliver substantial additional value to Corus shareholders."
Jim Leng, Chairman of Corus, said "The Revised Acquisition terms from Tata
Steel are a substantial increase from the previous offer. Accordingly, the Corus Board are
pleased to recommend this to Corus Shareholders".
Defined terms in this announcement have the same meaning as in the Scheme Document.
1. Terms of the Revised Acquisition
Under the terms of the Revised Acquisition, Corus Shareholders will be
entitled to receive 500 pence in cash for each Corus Share (the "Revised
Price"). This represents a price of 1000 pence in cash for each Corus ADS.
The terms of the Revised Acquisition value the entire existing issued and to
be issued share capital of Corus at approximately £4.7 billion and the Revised Price
represents:
- an increase of approximately 10 per cent. compared to 455 pence, being the Price under
the original terms of the Acquisition;
- on an enterprise value basis, a multiple of approximately 7.5 times EBITDA from
continuing operations for the twelve months to 30 September 2006 (excluding the
non-recurring pension credit of £96 million) and a multiple of approximately 5.9 times
EBITDA from continuing operations for the year ended 31 December 2005;
- a premium of approximately 38.7 per cent. to the average closing mid-market price of
360.5 pence per Corus Share for the twelve months ended 4 October 2006, being the last
Business Day prior to the announcement by Tata Steel that it was evaluating various
opportunities including Corus; and
- a premium of approximately 22.7 per cent. to the closing mid-market price of 407.5 pence
per Corus Share on 4 October 2006, being the last Business Day prior to the announcement
by Tata Steel that it was evaluating various opportunities including Corus.
The terms of the Revised Acquisition described in this announcement remain
subject to the Conditions and do not affect Tata Steel’s intentions regarding the
business of Corus, its management, employees and locations, nor the proposals relating to
Corus’s pension schemes, the Corus Share Schemes, Convertible Bonds or cancellation
of the Deferred Shares, each as described more fully in the Scheme Document.
Further details of the Revised Acquisition will be contained in a circular which is
expected to be posted to Corus Shareholders shortly. On 4 December 2006 the EGM and Court
Meeting of Corus were adjourned to 20 December 2006. Corus intends to advise shareholders
as appropriate in due course, and in any event in advance of the meetings, on the action
that shareholders should take at those meetings.
2. Recommendation
The Corus Directors, who have been so advised by Credit Suisse (as lead
financial adviser), JPMorgan Cazenove and HSBC, consider the terms of the Revised
Acquisition to be fair and reasonable, so far as Corus Shareholders are concerned.
Accordingly, the Corus Directors unanimously recommend that Corus Shareholders vote in
favour of the Revised Acquisition as they have undertaken to do in respect of their own
beneficial holdings of Corus Shares, representing approximately 0.1 per cent. of the
existing share capital of Corus.
Although Credit Suisse is acting as lead financial adviser to Corus, other members of
the Credit Suisse Group are, with the consent of Corus, providing acquisition finance and
related services to Tata Steel in relation to the Revised Acquisition and, as a
consequence, Credit Suisse is a connected party to Tata Steel. JPMorgan Cazenove, as part
of the JPMorgan group, has historical relationships with the Tata companies and, as a
consequence, is also a connected party to Tata Steel. HSBC is therefore providing
independent advice to the Board of Corus in connection with the Revised Acquisition for
the purposes of Rule 3 of the Code. In providing advice to the Corus Directors, Credit
Suisse, JPMorgan Cazenove and HSBC have taken into account the commercial assessments of
the Corus Directors.
3. Financing
The financing arrangements relating to Tata Steel UK, as described in Part
Nine of the Scheme Document, remain in place. The additional funding required under the
proposed terms of the Revised Acquisition will be funded by way of two letter of credit
facility agreements dated 5 December 2006 and 10 December 2006 respectively, between,
among others, TATASTEEL Asia Holdings Pte Ltd, Tata Steel, Standard Chartered Bank and
Standard Chartered First Bank of Korea.
ABN AMRO and Deutsche Bank, as joint financial advisers to Tata Steel and Tata
Steel UK, are satisfied that sufficient resources are available to satisfy in full the
consideration payable to Corus Shareholders under the proposed terms of the Revised
Acquisition.
4. Implementation Agreement and Inducement Fee
The Implementation Agreement as described in the Scheme Document remains in
effect. The amount of the Inducement Fee referred to in the Implementation Agreement is 1
per cent. of the value of the Revised Acquisition calculated by reference to the price per
Corus Share and the fully diluted share capital of Corus, together with an amount equal to
any VAT which is recoverable by Corus (if applicable).
5. Disclosure of interests in Corus and irrevocable undertakings
Tata Limited, a wholly owned subsidiary of Tata Sons, holds 2,125 Corus
Shares. Since Corus Shares held either by members of the Tata Steel Group or by Tata
Limited are excluded from the definition of Scheme Shares, Tata Steel will not be entitled
to vote these Shares at the Court Meeting.
Tata Steel UK has received irrevocable undertakings to vote in favour of the
Revised Acquisition and the resolutions at the Court Meeting and EGM from the directors of
Corus in respect of 1,164,416 Corus Shares, representing approximately 0.1 per cent. of
the existing issued ordinary share capital of Corus. These undertakings are in respect of
their entire beneficial holdings of Corus Shares. Further details relating to these
undertakings, including the circumstances in which they cease to have any effect, were
included in the Scheme Document.
The interests of the Deutsche Bank Group consist of, as at 7 December 2006, a
long position of 4,786,061 Corus Shares, a long position of 472,597 Dutch Bonds and a long
position of 76,336 Euro Bonds. For reasons of confidentiality, only limited enquires have
been made as to the interests of the Deutsche Bank Group and a further announcement
detailing such interests will be made if required.
Except as disclosed in this paragraph 5, as at 7 December 2006, being the last
practicable date before this announcement, neither Tata Steel or Tata Steel UK, nor any of
the directors of Tata Steel or Tata Steel UK, nor so far as Tata Steel and Tata Steel UK
are aware, any person acting in concert with Tata Steel or Tata Steel UK, (i) has any
interest in or right to subscribe for any relevant Corus securities, nor (ii) has any
short positions in respect of relevant Corus securities (whether conditional or absolute
and whether in the money or otherwise), including any short position under a derivative,
any agreement to sell or any delivery obligation or right to require another person to
take delivery, nor (iii) has borrowed or lent any relevant Corus securities (save for any
borrowed shares which have been on-lent or sold).
6. General
Save as set out above, in all other respects, including the availability and
terms of the Loan Note Alternative, the Revised Acquisition will be subject to the
Conditions and on the same terms set out in the Scheme Document.
Appendix I sets out the bases and sources of certain information contained in
this announcement.
Enquiries:
Tata Steel Limited |
|
Koushik Chatterjee, Vice
President Finance |
Tel: +91 (0) 22 5665 8112 |
Sanjay Choudhry, Head of
Corporate Communications |
Tel: +91 (0) 65 7243 1142 |
| |
|
ABN AMRO (financial
adviser to Tata Steel and broker to the Acquisition) |
Jitesh Gadhia |
Tel: +44 (0) 20 7678 7678 |
Richard Walker |
Tel: +44 (0) 20 7678 1451 |
Paul Nicholls (corporate broking) |
Tel: +44 (0) 20 7678 8000 |
| |
|
Deutsche Bank (financial
adviser to Tata Steel and broker to the Acquisition) |
Brett Olsher |
Tel: +44 (0) 20 7545 8000 |
Anthony Parsons |
Tel: +44 (0) 20 7545 8000 |
Charlie Foreman (corporate
broking) |
Tel: +44 (0) 20 7545 8000 |
| |
|
Rothschild (financial
advisor to Tata Steel) |
Richard Murley |
Tel: +44 (0) 20 7280 5440 |
Meyrick Cox |
Tel: +44 (0) 20 7280 5072 |
| |
|
Financial Dynamics (PR
adviser to Tata Steel - UK) |
Tel: +44 (0) 20 7269 7121 |
Andrew Lorenz |
|
Richard Mountain |
|
Christopher Clark |
|
| |
|
Vaishnavi Corporate
Communications (PR adviser to Tata Steel – India) |
Manoj Warrier |
Tel: +91 (0) 22 6656 8787 |
Natasha Pal |
Tel: +91 (0) 22 6656 8787 |
Vishal Mehta |
Tel: +91 (0) 22 6656 8787 |
| |
|
Corus Group plc |
|
David Lloyd, Chief Financial
Officer |
Tel: +44 (0) 20 7717 4557 |
Emma Tovey, Director, Investor
Relations |
Tel: +44 (0) 20 7717 4504 |
| |
|
Credit Suisse (lead
financial adviser to Corus) |
James Leigh-Pemberton |
Tel: +44 (0) 20 7888 8888 |
Jeremy Fletcher |
Tel: +44 (0) 20 7888 8888 |
Zachary Brech |
Tel: +44 (0) 20 7888 8888 |
| |
|
JPMorgan Cazenove (joint
financial adviser and corporate broker to Corus) |
Edmund Byers |
Tel: +44 (0) 20 7588 2828 |
Barry Weir |
Tel: +44 (0) 20 7588 2828 |
Matthew Lawrence |
Tel: +44 (0) 20 7588 2828 |
| |
|
HSBC (Rule 3 adviser to
Corus) |
|
Adrian Coates |
Tel: +44 (0) 20 7992 2326 |
Charles Packshaw |
Tel: +44 (0) 20 7992 2162 |
Raj Kohli |
Tel: +44 (0) 20 7992 2328 |
Jan Sanders |
Tel: +44 (0) 20 7992 2115 |
| |
|
Brunswick (PR adviser to
Corus) |
Tel: +44 (0) 20 7404 5959 |
Kevin Byram |
|
Laura Cummings |
|
Ash Spiegelberg |
|
This announcement is not intended to and does not constitute,
or form part of, any offer or invitation to purchase any securities or the solicitation of
any vote or approval in any jurisdiction pursuant to the Revised Acquisition or otherwise.
The Revised Acquisition will be made solely through the Revised Scheme Document, which
will contain the full terms and conditions of the Revised Acquisition, including details
of how to vote in respect of the Revised Acquisition. Any response to the Revised
Acquisition should be made only on the basis of the information contained in the Revised
Scheme Document.
ABN AMRO Corporate Finance Limited, which is authorised and regulated
by the Financial Services Authority, is acting for Tata Steel and Tata Steel UK in
connection with the Revised Acquisition and is not acting for any other person in relation
to the Revised Acquisition and will not be responsible to anyone other than Tata Steel and
Tata Steel UK for providing the protections afforded to clients of ABN AMRO Corporate
Finance Limited, nor for providing advice in relation to the Revised Acquisition or any
matters referred to herein.
Deutsche Bank AG is authorised under German Banking Law (competent
authority: BaFin - Federal Financial Supervising Authority) and with respect to UK
commodity derivatives business by the Financial Services Authority; regulated by the
Financial Services Authority for the conduct of UK business. Deutsche Bank AG is acting
for Tata Steel and Tata Steel UK and no one else in connection with the Revised
Acquisition and will not be responsible to anyone other than Tata Steel and Tata Steel UK
for providing the protections afforded to clients of Deutsche Bank AG nor for providing
advice in connection with the Revised Acquisition or any matters referred to therein.
N M Rothschild & Sons Limited ("Rothschild"), which is
authorised and regulated in the UK by the Financial Services Authority, is acting for Tata
Steel and Tata Steel UK in connection with the Revised Acquisition and is not acting for
any other person in relation to the Revised Acquisition and will not be responsible to
anyone other than Tata Steel and Tata Steel UK for providing the protections afforded to
clients of Rothschild, nor for providing advice in relation to the Revised Acquisition or
any matters referred to herein.
Credit Suisse, which is authorised and regulated by the Financial
Services Authority, is acting for Corus in connection with the Proposals and is not
advising any other person in relation to the Proposals and will not be responsible to
anyone other than Corus for providing the protections afforded to clients of Credit
Suisse, nor for providing advice in relation to the Proposals or any matters referred to
herein.
JPMorgan Cazenove, which is authorised and regulated by the Financial
Services Authority, is acting for Corus in connection with the Proposals and is not acting
for any other person in relation to the Proposals and will not be responsible to anyone
other than Corus for providing the protections afforded to clients of JPMorgan Cazenove,
nor for providing advice in relation to the Proposals or any matters referred to herein.
HSBC, which is authorised and regulated by the Financial Services
Authority, is acting for Corus in connection with the Proposals and is not acting for any
other person in relation to the Proposals and will not be responsible to anyone other than
Corus for providing the protections afforded to clients of HSBC, nor for providing advice
in relation to the Proposals or any matters referred to herein.
The availability of the proposals discussed herein to persons who are
not resident in the United Kingdom may be affected by the laws of the relevant
jurisdictions. Persons who are not so resident should inform themselves about and observe
any applicable requirements. Further details in relation to overseas shareholders will be
contained in the Revised Scheme Document.
The distribution of this announcement in jurisdictions other than
England and Wales may be restricted by law and therefore persons in such jurisdictions
into whose possession this announcement comes should inform themselves about and observe
such restrictions. Any failure to comply with the applicable restrictions may constitute a
violation of the securities laws of any such jurisdiction. This announcement has been
prepared for the purposes of complying with English law and the Takeover 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 of
England and Wales.
Corus is currently subject to the informational requirements of the
Exchange Act and, in accordance therewith, files reports and other information with the US
Securities and Exchange Commission (the 'SEC'). Reports and other information filed by
Corus with the SEC may be inspected and copies taken at the public reference facilities
maintained by the SEC at Room 1580, 100 F Street, N.E., Washington, DC 20549, United
States. Copies of such material may also be obtained by mail from the Branch of Public
Reference of the SEC at 100 F Street, N.E., Washington, DC 20549, United States at
prescribed rates and, with respect to certain reports and information, free of charge on
the SEC's website at www.sec.gov. In addition, such material may be obtained from the
website of the New York Stock Exchange at www.nyse.com.
The Loan Notes that may be issued pursuant to the Revised Acquisition
have not been and will not be registered under the Securities Act of 1933, as amended (the
"Securities Act") or under the relevant securities laws of any state or
territory or other jurisdiction of the United States. Accordingly, Loan Notes may not be
offered or sold in the United States, except in a transaction not subject to, or in
reliance on an exemption from, the registration requirements of the Securities Act and
such state securities laws.
Any Loan Notes which may be issued pursuant to the Revised Acquisition
have not been and will not be registered under the relevant securities laws of the
Netherlands or Japan and any relevant clearances and registrations have not been, and will
not be, obtained from the securities commission of any province of Canada. No prospectus
in relation to the Loan Notes has been, or will be, lodged with, or registered with, the
Australian Securities and Investments Commission, the Dutch Listing Authority or the
Japanese Ministry of Finance. Accordingly, unless otherwise determined by Tata Steel UK
and permitted by applicable law and regulation, the Loan Notes may not be, offered, sold,
resold, transferred, delivered or distributed, directly or indirectly in or into the
Netherlands, Canada, Australia or Japan or any other jurisdiction where to do so would
violate the laws of that jurisdiction or would require registration thereof in such
jurisdiction.
The Dutch Listing Authority has not reviewed, approved or disapproved
this announcement, the Revised Acquisition or the Loan Notes nor has it expressed a view
on the accuracy or adequacy of this announcement.
The Revised Acquisition relates to the shares of a UK company and are
proposed to be made by means of a scheme of arrangement under English company law. A
transaction effected by means of a scheme of arrangement is not subject to the tender
offer rules under the Exchange Act. Accordingly, the Revised Acquisition is subject to the
disclosure requirements, rules and practices applicable in the United Kingdom to schemes
of arrangement, which differ from the requirements of US tender offer rules. Financial
information included in the relevant documentation will have been prepared in accordance
with accounting standards applicable in the UK and India that may not be comparable to the
financial statements of US companies.
This announcement includes 'forward-looking statements' under United
States securities laws, including statements about the expected timing of the Revised
Acquisition, the expected effects on Corus of the Revised Acquisition, anticipated
earnings enhancements, estimated cost savings and other synergies, potential strategic
options, plans for and benefits of integration, estimated future growth, market position
and steelmaking capacity and all other statements in this announcement other than
statements of historical fact. Forward-looking statements include, without limitation,
statements that typically contain words such as 'will', 'may', 'should', 'continue',
'aims', 'believes', 'expects', 'estimates', 'intends', 'anticipates', 'projects', 'plans'
or similar expressions. By their nature, forward-looking statements involve known or
unknown risks and uncertainties because they relate to events and depend on circumstances
that all occur in the future. Actual results may differ materially from those expressed in
the forward-looking statements depending on a number of factors, including, but not
limited to, the satisfaction of the conditions to the Revised Acquisition, future market
conditions, the behaviour of other market participants, an adverse change in the economic
climate, a fluctuation in the level of clients' commercial activity, appropriate
consultation with employee representative bodies, a loss of key personnel and the extent
to which the Corus and Tata Steel businesses are successfully integrated. Many of these
risks and uncertainties relate to factors that are beyond the companies' abilities to
control or estimate precisely, such as future market conditions and the behaviours of
other market participants. The forward looking statements contained in this announcement
are made as of the date hereof and Corus, Tata Steel and Tata Steel UK assume no
obligation and do not intend publicly to update or revise these forward-looking
statements, whether as a result of future events, new information or otherwise except as
required pursuant to applicable law.
Dealing Disclosure Requirements:
Under the provisions of Rule 8.3 of the Takeover Code, if any person
is, or becomes, "interested" (directly or indirectly) in one per cent. or more
of any class of "relevant securities" of Corus, all "dealings" in any
"relevant securities" of that company (including by means of an option in
respect of, or a derivative referenced to, any such "relevant securities") must
be publicly disclosed by no later than 3.30 p.m. (London time) on the London business day
following the date of the relevant transaction. This requirement will continue until the
date on which the Scheme becomes effective, lapses or is otherwise withdrawn or on which
the "offer period" otherwise ends. If two or more persons act together pursuant
to an agreement or understanding, whether formal or informal, to acquire an
"interest" in "relevant securities" of Corus, they will be deemed to
be a single person for the purpose of Rule 8.3.
Under the provisions of Rule 8.1 of the Takeover Code, all
"dealings" in "relevant securities" of Corus by Tata Steel, Tata Steel
UK or Corus, or by any of their respective "associates", must be disclosed by no
later than 12.00 noon (London time) on the London business day following the date of the
relevant transaction.
A disclosure table, giving details of the companies in whose
"relevant securities" "dealings" should be disclosed, and the number
of such securities in issue, can be found on the Takeover Panel's website at www.thetakeoverpanel.org.uk.
"Interests in securities" arise, in summary, when a person
has long economic exposure, whether conditional or absolute, to changes in the price of
securities. In particular, a person will be treated as having an "interest" by
virtue of the ownership or control of securities, or by virtue of any option in respect
of, or derivative referenced to, securities.
Terms in quotation marks are defined in the Takeover Code, which can
also be found on the Panel's website. If you are in any doubt as to whether or not you are
required to disclose a "dealing" under Rule 8 you should consult the Panel.
APPENDIX I
BASES AND SOURCES
(a) |
The value of Corus as implied by the
Revised Price is based upon the fully diluted number of Corus Shares being 946,703,281,
including 898,743,330 Corus Shares in issue on 8 December 2006 (including those
represented by ADSs, but excluding those held in treasury), adjusted only for the dilutive
effect of in-the-money options and LEAP shares. |
(b) |
The premia implied by the Revised Price
have been calculated based on closing Corus Share prices supplied by Datastream. |
(c) |
The multiple of Corus' underlying EBITDA
implied by the Revised Price is based on: (i) the value of the fully diluted share capital
of Corus and the net debt position (including finance leases) as at 30 September 2006 of
£812 million which is adjusted for cash from option proceeds; (ii) underlying EBITDA for
the twelve months to 30 September 2006 of £737 million from continuing operations and
excluding the non-recurring pension credit of £96 million; and (iii) underlying EBITDA
for the year ended 31 December 2005 of £947 million which is adjusted for the sale of the
aluminium assets. |
(d) |
Unless otherwise stated, the financial
information relating to Tata Steel and Corus has been extracted without material
adjustment from the respective published audited reports and accounts for the relevant
periods. |
|
