RNS No 4445e
BANNER CHEMICALS PLC
15 July 1999
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE
UNITED STATES OF AMERICA, CANADA, AUSTRALIA OR JAPAN
PETROFERM UK LIMITED ("PETROFERM UK")
a wholly owned subsidiary of PETROFERM INC. ("PETROFERM")
RECOMMENDED CASH OFFER
FOR
BANNER CHEMICALS PLC ("BANNER")
Petroferm Inc. the private, Florida-based specialty chemicals company,
announces that its UK subsidiary Petroferm UK is making a recommended cash
offer ("the Offer") for Banner (formerly called Sutcliffe, Speakman PLC), the
Runcorn, Lancaster, Liverpool and London based distributor of solvents and
performance cleaning chemicals. The Offer values Banner at approximately #11.7
million.
Petroferm supplies products to three major market sectors: industrial
cleaning; petroleum and heavy fuels; and specialty surfactants and
oleochemicals.
Highlights
* The boards of Petroferm UK and Banner announce a recommended cash offer, to
be made by IDJ Limited on behalf of Petroferm UK, for the whole of the
issued and to be issued share capital of Banner other than the 500,000
Banner Shares already owned by Petroferm UK (representing approximately
0.7% of Banner's issued share capital).
* The Offer is 15.5p in cash for each Banner Share. It represents a premium
of approximately 55.0 per cent. over the average closing middle market
price of approximately 10.0p for a Banner Share for the last six months
prior to the announcement of the Offer and a premium of approximately 12.7
per cent. over the closing middle market price of 13.75p for a Banner Share
on 14 July 1999, the last dealing day prior to the announcement of the
Offer.
* Petroferm UK has received undertakings to accept the Offer in respect of,
in aggregate, 7,845,028 Banner Shares, representing approximately 10.4 per
cent. of Banner's issued share capital. Accordingly, Petroferm has acquired
or has received undertakings to accept the Offer in respect of, in total,
8,345,028 Banner Shares, representing 11.1 per cent. of Banner's current
issued share capital.
* Petroferm and Banner already trade together, and Samuel Banner & Company
Limited (a subsidiary of Banner) is the UK agent for many of Petroferm's
advanced cleaning products.
* Banner's results for the year to 31 March 1999, announced separately today,
show a pre-tax profit on continuing businesses of #1.46 million, excluding
exceptional income and costs.
Commenting on the Offer, Mr. John Dewhurst, Chairman of Banner, said:
"We have worked hard to re-focus our business but our outlook for the future
as an independent company is uncertain in current trading conditions. We are
happy to recommend this bid which will enable Banner to grow as part of a
stronger, enlarged international group. The Offer also provides Banner's
shareholders with an opportunity to realise their investment in Banner in a
market characterised by negative institutional sentiment towards smaller
listed companies."
Geoffrey R. Cross, President and Chief Operating Officer of Petroferm, said:
"The acquisition of Banner represents an important step for Petroferm in
expanding our business. Banner is a business we know well. I am convinced
that, together as an international specialty chemicals group, we and our
valued client base will see the benefits of an enlarged European presence,
producing better margins, improved distribution logistics and a wider product
range."
Enquiries:
Petroferm UK Geoffrey R Cross 0171 499 0355
Michael E Hayes
IDJ Limited John Incledon 0171 499 0355
Charles Sebag-Montefiore
Banner Chemicals Alan Howarth 01928 597 000
Timothy Mclnnes
Hawkpoint Partners Tom Bayne 0171 665 4500
Julie Silvester
Binns & Co. John Wade 0171 786 9600
Peter Binns
PETROFERM UK LIMITED ("PETROFERM UK")
a wholly owned subsidiary of PETROFERM INC. ("PETROFERM")
RECOMMENDED CASH OFFER
FOR
BANNER CHEMICALS PLC ("BANNER")
1. Introduction
The boards of Banner and Petroferm announce that they have agreed the terms of
a recommended cash offer to be made by IDJ on behalf of Petroferm UK, a wholly
owned subsidiary of Petroferm, to acquire the whole of the issued and to be
issued ordinary share capital of Banner, other than the 500,000 Banner Shares
(representing approximately 0.7 per cent. of the issued share capital of
Banner) already owned by Petroferm.
Petroferm UK has received undertakings to accept the Offer in respect of, in
aggregate, 7,845,028 Banner Shares, representing approximately 10.4 per cent.
of Banner's current issued share capital. The undertakings referred to above
include irrevocable undertakings to accept the Offer from the Banner Directors
in respect of their own beneficial holdings, amounting to, in aggregate, 6,695
Banner Shares, representing approximately 0.01 per cent. of Banner's current
issued share capital. The remaining undertakings, which are in respect of a
further 7,838,333 Banner Shares, representing approximately 10.4 per cent. of
Banner's issued ordinary share capital, cease to be binding in the event of a
higher offer being made for Banner in excess of 17.0p per Banner Share.
Accordingly, Petroferm UK has acquired or has received undertakings to accept
the Offer in respect of, in total, 8,345,028 Banner Shares, representing
approximately 11.1 per cent. of Banner's issued share capital.
Save for the 500,000 Banner Shares already owned by Petroferm, neither
Petroferm, Petroferm UK, nor any of the Petroferm Directors, nor any person
acting in concert with Petroferm or Petroferm UK, currently owns or controls
any Banner Shares or holds any options to purchase Banner Shares or holds any
derivatives referenced to Banner Shares.
2. The Offer
The Offer will be made by IDJ on behalf of Petroferm UK and will be subject to
the conditions set out in Appendix I and the further terms to be set out in
the Offer Document and in the Form of Acceptance, to be sent to Banner
Shareholders later today, and will be made on the following basis:
for each Banner Share 15.5p in cash
The Offer values the whole of the current issued share capital of Banner at
approximately #11.7 million. It is at a premium of approximately 12.7 per cent
to the closing middle market price of 13.75p per Banner Share on 14 July 1999,
the last dealing day before the announcement of the Offer, and a premium of
approximately 55.0 per cent. over the average closing middle market price of
approximately 10.0p for a Banner Share for the last six months prior to the
announcement of the Offer.
The Banner Shares will be acquired by Petroferm UK fully paid and free from
all liens, equities, charges, encumbrances and other interests and together
with all rights now and hereafter attaching thereto, including the right to
receive and retain all dividends and other distributions declared, made or
paid on or after 15 July 1999.
The Offer will extend to all Banner Shares unconditionally allotted or issued
on the date of the Offer and any further Banner Shares which are
unconditionally allotted or issued before the date on which the Offer becomes
or is declared unconditional as to acceptances or such other date as Petroferm
may, subject to the provisions of the Code, decide, including any Banner
Shares which are so unconditionally allotted or issued pursuant to the
exercise of existing options under the Banner Share Option Schemes.
3. Banner Directors' recommendation
The Banner Directors, who have been so advised by Hawkpoint Partners, consider
the terms of the Offer to be fair and reasonable. They will unanimously
recommend Banner Shareholders to accept the Offer as they have irrevocably
undertaken to do in respect of their own beneficial holdings, amounting in
aggregate to 6,695 Banner Shares, representing approximately 0.01 per cent. of
the issued share capital of Banner.
In providing advice to the Banner Directors, Hawkpoint Partners has taken into
account the directors' commercial assessment of the Offer.
4. Information relating to Petroferm and Petroferm UK
Petroferm UK is a wholly owned subsidiary of Petroferm and was recently
incorporated for the purpose of making the Offer. Petroferm UK has not yet
traded.
Petroferm is a private company, registered in the state of Delaware, USA, with
its principal place of business in Fernandina Beach, Florida. It is a
specialty chemicals company which supplies products to three major market
segments: industrial cleaning; petroleum and heavy fuels; and specialty
surfactants and oleochemicals. These segments are further discussed below:
* Advanced cleaning products: Petroferm offers its customers an extensive
line of industrial cleaning agents specifically designed to replace toxic,
flammable or environmentally undesirable chemicals. The product range
includes aqueous, semi-aqueous, non-aqueous and vapour degreasing products
for cleaning in electronics, aerospace, defence, medical and automotive
applications. Samuel Banner & Company Limited (a subsidiary of Banner) is
the UK agent for many of these products.
* Petroleum-related products: these products emulsify heavy fuel oil in
order to improve combustion, reduce stack gas pollutant emissions and
reduce operating costs. Other Petroferm products are injected into heavy
crude oil wells to increase oil production rates.
* Specialty surfactants and oleochemicals: these products are supplied to
the personal care, automotive care, textile manufacturing, printing,
agricultural and other industries to improve the way their customers'
products look, feel and perform. Customers also use these materials as
essential ingredients in products such as lubricants, and as anti-foams
for food, agricultural, wastewater treatment and metalworking
applications.
5. Information relating to Banner
Banner is focussed on the distribution and formulation of solvents and
performance cleaning chemicals in the UK on behalf of some of the world's
largest chemical manufacturers. Banner imports chemical products, usually in
large bulk shipments, filling from ship fed tanks for small bulk deliveries
and subsequently producing drummed quantities as customised solvent blends.
Banner presently operates from sites in Runcorn, Lancaster, Liverpool and
London.
In May 1998, Banner disposed of its carbons and environmental engineering
business to Waterlink Inc. and returned approximately #18.8 million to
shareholders by way of a tender offer for existing shares. In addition, the
company's name was changed from Sutcliffe, Speakman PLC to Banner Chemicals
PLC.
Following the disposal, Banner acquired Joseph Storey, a manufacturer of flame
retardants and smoke suppressants in June 1998.
6. Preliminary results of Banner
In a separate announcement today, Banner announced its preliminary results for
the year ended 31 March 1999. Banner reported turnover from continuing
businesses of #31.43 million (1998: #35.02 million from continuing businesses
and total turnover of #69.78 million). Banner achieved a profit before tax of
#13.69 million (1998: #5.31 million). After excluding non-operating
exceptional items (principally the profit on the disposal of the carbons and
environmental businesses) of #12.60 million and operating exceptional costs of
#0.37 million (principally the costs associated with the cost saving measures
announced in April 1999) the Banner Group made a pre-tax profit of #1.46
million for the year ended 31 March 1999.
7. Management and employees
Petroferm UK confirms that the existing employment rights, including pension
rights, of all employees of the Banner Group will be fully safeguarded.
If the Offer becomes or is declared unconditional in all respects, Petroferm
and Banner have agreed that the existing service agreements of each of Alan
Howarth, Timothy McInnes and Andrew Roberts, the current executive management
of Banner, will be replaced by new service agreements. Andrew Roberts is the
Sales Director of Samuel Banner & Company Limited, but is not a director of
Banner.
8. Background to and reasons for the Offer
Petroferm has expanded its core chemicals businesses through organic growth
and through strategic acquisitions. The acquisitions have extended the range
of products offered and industries served by Petroferm. However, to date
Petroferm has operated primarily within the USA, with overseas sales generated
by agents and distributors. The principal reasons for the Offer are:
* Enlarged presence in Europe: the acquisition would give Petroferm a
platform for the more intensive sale of Petroferm products and services,
with resources and people in Europe to provide support.
* Better margins: Petroferm would acquire a site and facilities to blend or
source locally its products, which should give more competitive pricing
than is possible at present, particularly because of transport costs.
* Warehousing: Banner would provide Petroferm with a place to hold European
inventories, and enable it to close its warehouse in Rotterdam, with its
activities transferring to Banner.
* New products: Banner gives Petroferm a broad range of new products to add
to its business. These include:-
(a) waxes, wetting agents, anti-foams and anti-corrosion additives;
(b) a range of products for the personal care and
pharmaceutical industries; and
(c) special products sold under the name Joseph Storey, including
flame retardants and smoke suppressant products. Sales of Joseph
Storey's products may be increased through Petroferm's worldwide
distribution network.
* New business partner: Petroferm is keen to maintain and develop the links
with Banner's suppliers and customers in the UK and Europe.
The Offer also provides Banner Shareholders with an opportunity to realise
their investment in Banner.
9. Undertakings to accept the Offer
Petroferm UK has received irrevocable undertakings to accept the Offer from
the persons listed below:
Number of Banner Shares %
(a) the Banner Directors
John Dewhurst 5,000 0.01
Alan Howarth 1,695 0.00
(b) other Shareholders
Schroder Investment Management (UK) Ltd 5,116,149 6.78
Stuart John Lloyd 2,722,184 3.61
Total 7,845,028 10.40
Of these undertakings, those in respect of a total of 7,838,333 Banner Shares
will cease to be binding in the event of a competing offer being made for
Banner in excess of 17.0p per Banner Share.
10. General
The Offer Document, containing the full terms and conditions of the Offer, and
the Form of Acceptance is being despatched to Banner Shareholders today.
The Offer is not being made, directly or indirectly, in or into or by use of
the mails of, or by any means of instrumentality (including, without
limitation, facsimile transmissions, telex and telephone) of interstate or
foreign commerce of, or any facility of a national securities exchange of the
United States, Canada, Australia or Japan, and the Offer will not be capable
of acceptance by any such use, means, instrumentality or facility or from
within the United States, Canada, Australia or Japan. Accordingly, copies of
this announcement (or the Offer Document and Form of Acceptance) are not
being, and must not be, mailed or otherwise distributed or sent in or into the
United States, Canada, Australia or Japan.
The making of the Offer to persons whose registered addresses are outside the
UK or who are citizens, nationals or residents of other countries outside the
UK or in jurisdictions outside the UK may be affected by the laws or
regulatory requirements of the relevant jurisdictions. Persons whose
registered addresses are outside the UK or who are citizens, nationals or
residents of other countries outside the UK should inform themselves of, and
observe, any applicable legal or regulatory requirements.
This announcement does not constitute an offer or an invitation to purchase
any securities. The conditions and certain further terms of the Offer to be
included in the Offer Document are set out in Appendix I to this announcement.
The definitions used in this announcement are contained in Appendix II.
This announcement has been approved by IDJ for the purposes of Section 57 of
the Financial Services Act 1986.
11. Responsibility
The Petroferm Directors (whose names are set out in paragraph 12 (a) and (b)
below) accept responsibility for all the information contained in this
announcement, other than that relating to Banner, the Banner Directors and
persons connected with the Banner Directors. Subject as aforesaid, to the best
of the knowledge and belief of the Petroferm Directors (having taken all
reasonable care to ensure that such is the case), the information contained in
this announcement for which they are responsible is in accordance with the
facts and does not omit anything likely to affect the import of such
information.
The Banner Directors (whose names are set out in paragraph 12 (c) below)
accept responsibility for the information contained in this announcement
relating to the Banner Group, themselves and persons connected with them. To
the best of the knowledge and belief of the Banner Directors (having taken all
reasonable care to ensure that such is the case), the information contained in
this announcement for which they are responsible is in accordance with the
facts and does not omit anything likely to affect the import of such
information.
12. Directors
(a) The directors of Petroferm UK and their functions are set out
below:
Geoffrey R Cross Managing Director and Company Secretary
Michael E Hayes Treasurer
Morgan R Jones Director
The Registered Office of Petroferm UK is at 22 Tudor Street, London EC4Y 0JJ.
(b) The directors of Petroferm and their functions are set out below:
Peter H Havens Chairman
Michael E Hayes Director and Chief Executive Officer
Harry J Bradbury Director
Alfred E Burckhardt Director
Bruce E Elmblad Director
John F McCaughan Director
The principal place of business of Petroferm is 5415 First Coast Highway,
Fernandina Beach, Florida 32034, USA.
(C) The Banner Directors and their functions are set out below:
Alan Howarth Managing Director
Timothy McInnes Finance Director
John Dewhurst Non-executive Chairman
Terence Smith Non-executive Director
The Registered Office of Banner is Hampton Court, Tudor Road, Manor Park,
Runcorn, Cheshire WA7 1TU.
Enquiries:
Petroferm UK Geoffrey R Cross 0171 499 0355
Michael E Hayes
IDJ Limited John Incledon 0171 499 0355
Charles Sebag-Montefiore
Banner Chemicals Alan Howarth 01928 597000
Timothy McInnes
Hawkpoint Partners Tom Bayne 0171 665 4500
Julie Silvester
Binns & Co. John Wade 0171 786 9600
Peter Binns
IDJ, which is regulated in the UK by The Securities and Futures Authority
Limited, is acting exclusively for Petroferm UK and Petroferm and no one else
in connection with the Offer and will not be responsible to anyone other than
Petroferm UK and Petroferm for providing the protections afforded to customers
of IDJ, or for giving advice in relation to the Offer.
Hawkpoint Partners, which is regulated in the UK by The Securities and Futures
Authority Limited, is acting exclusively for Banner and no one else in
connection with the Offer, and will not be responsible to anyone other than
Banner for providing the protections afforded to customers of Hawkpoint
Partners, or for giving advice in relation to the Offer.
APPENDIX I
CONDITIONS AND TERMS OF THE OFFER
The Offer, which will be made by IDJ on behalf of Petroferm UK, will comply
with the applicable rules and regulations of the Code, and will be subject to
the terms and conditions set out in the Offer Document and related Form of
Acceptance and the following conditions:
(a) valid acceptances being received (and not, where permitted, withdrawn) by
3.00 p.m. (London time) on 5 August 1999 (or such later time(s) and/or
date(s) as Petroferm UK may, subject to the rules of the Code, decide), in
respect of not less than 90 per cent. in nominal value (or such lesser
percentage as Petroferm UK may decide) of the Banner Shares to which the
Offer relates, provided that this condition shall not be satisfied unless
Petroferm UK shall have acquired or agreed to acquire, pursuant to the
Offer or otherwise, Banner Shares carrying in aggregate more than 50 per
cent. of the voting rights normally exercisable at general meetings of
Banner, including for this purpose, to the extent (if any) required by the
Panel, any voting rights attaching to any Banner Shares unconditionally
allotted or issued after the date of the Offer but before the time at which
the Offer becomes or is declared unconditional as to acceptances, whether
pursuant to the exercise of any outstanding subscription or conversion
rights or otherwise. For the purposes of this condition:
(i)the expression "Banner Shares to which the Offer relates" shall be
construed in accordance with sections 428 to 430F (inclusive) of the
Act; and
(ii)shares which have been unconditionally allotted but not issued shall
be deemed to carry the voting rights which they will carry on issue;
(b)no government or governmental, quasi-governmental, supranational,
statutory or regulatory or investigative body or trade agency, professional
body, association, institution or environmental body or any court or other
similar body or any similar person in any jurisdiction having decided to
take, institute or threaten, and there not continuing to be outstanding,
any action, proceedings, suit, investigation, enquiry or reference or
having enacted, made or proposed any statute, regulation or order or taken
any other steps that would or might be reasonably expected to:
(i)make the Offer or the acquisition of any Banner Shares, or the
acquisition by Petroferm or by Petroferm UK of any shares in or control
of Banner, void, unenforceable or illegal or directly or indirectly
restrict, prohibit, delay or otherwise adversely interfere with the
implementation of, or impose additional conditions or obligations with
respect to, or otherwise challenge the Offer or the acquisition of any
Banner Shares or the acquisition of control of Banner to an extent which
is material in the context of the Offer;
(ii)require or prevent or delay a divestiture by Petroferm UK of any
Banner Shares;
(iii)require or prevent or delay the divestiture or alter the terms of any
proposed divestiture by Petroferm UK or by Banner or any of its
subsidiaries or subsidiary undertakings or associated companies
including any partnership, joint venture, firm or company in which any
member of the Banner Group is interested or any company in which such
member has an interest in excess of 20 per cent. of the voting share
capital of that company (the "wider Banner Group") of all or any part of
their respective businesses, assets or property or impose any limitation
on the ability of any of them to conduct all or any portion of their
respective businesses or to own all or any portion of their respective
assets or property to an extent which in each case would be material in
the context of the wider Banner Group taken as a whole or the Petroferm
Group taken as a whole, as appropriate;
(iv)impose any limitation on the ability of the Petroferm Group or the
wider Banner Group to acquire or hold or to exercise effectively,
directly or indirectly, all or any rights of ownership in respect of
shares or loans or securities convertible into shares or the equivalent
in any member of the wider Banner Group or to exercise management
control over any such member to an extent which is material in the
context of the Petroferm Group or, as the case may be, the Banner Group
taken as a whole;
(v)require any member of the Petroferm Group or any member of the wider
Banner Group to offer to acquire directly or indirectly any shares in
any member of the wider Banner Group owned by any third party, such
acquisition being material in the context of the Offer; or
(vi)affect adversely the business, profits or prospects of Petroferm or
Petroferm UK or any member of the wider Banner Group to an extent which
is material in the context of respectively the Petroferm Group taken as
a whole or the wider Banner Group taken as a whole;
and all applicable waiting and other time periods during which any such
government, public body, agency or court could decide to take, implement,
threaten or institute any such action, proceedings, suit, investigation,
enquiry or reference under the laws of any jurisdiction having expired or
been terminated;
(c) all necessary filings having been made in respect of the Offer and all
required authorisations, orders, grants, recognitions, confirmations,
consents, clearances, licences, permissions, exemptions and approvals
necessary for or in respect of the Offer being obtained on terms and in a
form satisfactory to Petroferm UK (acting reasonably) from all appropriate
governments, governmental, quasi-governmental, supranational, statutory or
regulatory, or investigative bodies, trade agencies, professional bodies,
associations, institutions, environmental bodies and courts, where the
absence of such would have a material adverse effect on the Petroferm Group
or the Banner Group as the case may be and all such authorisations, orders,
grants, recognitions, confirmations, consents, clearances, licences,
permissions, exemptions and approvals remaining in full force and effect at
the time at which the Offer becomes otherwise unconditional in all respects
and no intimation or notice of any intention to revoke, suspend, restrict,
modify in any material respect or not renew any of the same having been
received and all necessary filings having been made and all appropriate
waiting periods (including any extension thereof) under any applicable
legislation and regulations in any jurisdiction having expired, lapsed or
been terminated, in each case as may be necessary in connection with the
Offer under the laws or regulations of any jurisdiction and all necessary
statutory or regulatory obligations in any jurisdiction having been
complied with in all material respects;
(d)save as disclosed in writing to Petroferm UK or Petroferm on or before 14
July 1999 and/or except as publicly announced by Banner on or before 14
July 1999 through the London Stock Exchange, there being no provision of
any agreement, arrangement, licence, permit or other instrument to which
any member of the wider Banner Group is a party or by or to which any such
member or any of their assets may be bound, entitled or be subject which,
as a direct result of the acquisition by Petroferm UK of the Banner Shares
or any of them, or change in the management or control of Banner as a
result of the Offer or the acquisition of control of Banner as a result of
the Offer by Petroferm UK will or is likely, to an extent which is material
and adverse in the context of the wider Banner Group taken as a whole, to
result in:
(i)any monies borrowed by, or any other indebtedness (actual or
contingent) of any such member being or becoming repayable or capable of
being declared repayable immediately or earlier than the repayment date
stated in such agreement, arrangement, licence, permit or other
instrument, or the ability of any such member to borrow monies or incur
any indebtedness being withdrawn or inhibited;
(ii)any such agreement, arrangement, licence, permit or other instrument
being terminated or adversely modified or affected or any material
onerous obligation arising thereunder;
(iii)any assets of any such member being or falling to be disposed of or
charged, or any right arising under which any such asset or interest
could be required to be disposed of or charged otherwise than in the
ordinary course of business;
(iv)the creation of any mortgage, charge or other security interest over
the whole or any part of the business, property or assets of any such
member otherwise than in the ordinary course of business, or any such
security (wherever arising or having arisen) becoming enforceable;
(v)the respective value or financial or trading prospects of any such
member being prejudiced or adversely affected which would be material in
the context of the wider Banner Group taken as a whole;
(vi)any such member ceasing to be able to carry on business under any name
under which it presently does so; or
(vii)the creation of liabilities by any such member which will or might
reasonably be expected to have a material adverse effect on the Banner
Group taken as a whole;
(e)save as disclosed in the preliminary announcement of results of Banner
for the year ended 31 March 1999 or in the circular to Shareholders dated
20 May 1998 describing inter alia the disposal of the Company's interest in
the carbons and environmental engineering business ("the Disposal
Circular"), or in the interim statement of Banner for the six month period
ended 30 September 1998 and save as publicly announced on or before 14 July
1999 or otherwise disclosed in writing to Petroferm UK on or before 14 July
1999, no member of the Banner Group having since 31 March 1998:
(i)(save as between Banner and wholly-owned subsidiaries of Banner or
upon the exercise of rights to subscribe for Banner Shares pursuant to
the exercise of options granted before 14 July 1999 under the Banner
Share Option Schemes) issued or authorised or proposed the issue of
additional shares of any class, or securities convertible into or
exchangeable for, or rights, warrants or options to subscribe for or
acquire, any such shares or securities or redeemed, purchased or reduced
any part of its share capital;
(ii)recommended, declared, paid or made or proposed to declare, pay or
make any bonus, dividend or other distribution in respect of the share
capital of Banner;
(iii)merged with any body corporate or authorised or proposed or announced
any intention to propose any merger, demerger, acquisition, disposal,
transfer, mortgage or charge of or granting of any security over assets
or shares (otherwise than in the ordinary course of business) and which
would be material in the context of the Banner Group taken as a whole;
(iv)authorised or proposed or announced its intention to propose any
change in its share or loan capital;
(v)announced any proposal to purchase any of its own shares or purchased
any such shares;
(vi)issued, authorised or proposed the issue of any debentures or (save
in the ordinary course of business) incurred or increased any
indebtedness or become subject to any contingent liability which is
material in the context of the Banner Group taken as a whole;
(vii)save in the ordinary course of business, entered into any contract or
commitment (whether in respect of capital expenditure or otherwise)
which is of a long term or unusual nature or which involves or could
involve an obligation of a nature or magnitude which is material in the
context of the Banner Group taken as a whole;
(viii) entered into any contract, transaction or arrangement which would be
restrictive on the business of any member of the Banner Group and would
have a material and adverse effect on the business of the Banner Group
taken as a whole;
(ix)entered into or varied the terms of any service agreement with any of
the directors of Banner;
(x)acquired, disposed of or transferred, mortgaged or charged or
encumbered or created any security interest over any asset or any right,
title or interest in any asset (including, without limitation, shares
and trade investments) or entered into any contract, reconstruction,
amalgamation, commitment or other transaction or arrangement otherwise
than in the ordinary course of business;
(xi)waived or compromised any claim (otherwise than in the ordinary course
of business) and which would be material in the context of the Banner
Group taken as a whole;
(xii)proposed any voluntary winding up or taken any corporate action or
had any order made for its winding-up, dissolution or reorganisation or
for the appointment of a receiver, administrator, administrative
receiver, trustee or similar officer of all or any of its assets and
revenues and which would be material in the context of the Banner Group
taken as a whole; or
(xiii)entered into any contract, commitment or agreement to, or passed any
resolution with respect to, or announced any intention to, or to propose
to, effect any of the transactions or events referred to in this
paragraph;
(f) save as disclosed in writing to Petroferm UK for the purposes of the
Offer on or before 14 July 1999 or as disclosed in the annual report and
accounts of Banner for the year ended 31 March 1998, or in the Disposal
Circular or in the interim statement of Banner for the six month period
ended 30 September 1998 or in the preliminary announcement of the results
of Banner for the year ended 31 March 1999 or save as publicly announced on
or before 14 July 1999, since 31 March 1998:
(i)no adverse change in the business, financial or trading position or
profits or assets or prospects of any member of the wider Banner Group
having occurred which would be material to the wider Banner Group taken
as a whole;
(ii)no contingent liability having arisen which would or might reasonably
affect materially and adversely the wider Banner Group taken as a whole;
and
(iii)no litigation, arbitration proceedings, prosecution or other legal
proceedings having been instituted or threatened by or against or
remaining outstanding against any member of the wider Banner Group or to
which any member of the wider Banner Group is party (whether as
plaintiff or defendant or otherwise) and which, in any case, is or might
reasonably be expected to be material in the context of the wider Banner
Group taken as a whole;
(g)save as disclosed in writing to Petroferm UK on or before 14 July 1999,
or in the preliminary announcement of the results of Banner for the year
ended 31 March 1999, Petroferm UK not having discovered prior to the date
when the Offer would other wise become wholly unconditional that :
(i)any financial or business or other information concerning the Banner
Group which has been disclosed at any time, whether publicly or
otherwise, by any member of the Banner Group is materially misleading,
contains a material misrepresentation of fact or omits to state a fact
necessary to make the information contained therein not materially
misleading or that any contingent liability disclosed in such
information would or might materially and adversely affect directly or
indirectly the business, profits or prospects of the wider Banner Group
taken as a whole and which was not, if material, corrected by subsequent
public announcement made before 14 July 1999; or
(ii)any partnership, company or other entity in which any member of the
wider Banner Group has an interest and which is not a subsidiary
undertaking of Banner is subject to any liability, contingent or
otherwise, which is or might reasonably be expected to be material in
the context of the wider Banner Group taken as a whole, and which is not
disclosed in Banner's annual report and accounts for the year ended
31 March 1998;
(h)Petroferm UK not having discovered that, save as disclosed in the annual
report and accounts of Banner for the year ended 31 March 1998 or in the
Disposal Circular or in the interim statement of Banner for the six months
ended 30 September 1998 or in the preliminary announcement of the results
of Banner for the year ended 31 March 1999 and save as publicly announced
on or before 14 July 1999 and save as disclosed in writing to Petroferm UK
on or before 14 July 1999:
(i) there is any obligation or liability (whether actual or contingent) to
make good, repair, re-instate or clean up any land or other asset now or
previously owned, occupied or made use of by any present member of the
wider Banner Group, or in which such member may now have or previously
has had an interest under any environmental legislation, regulation,
decision or order of any government, or governmental, quasi-
governmental, supranational, statutory, regulatory, investigative or
environmental body or any court or other similar body or person in any
jurisdiction which is material in the context of the wider Banner Group
taken as a whole;
(ii)any member of the Banner Group has not complied with any and /or all
applicable legislation or regulations of any jurisdiction (or any
notices or requirements of any third party in any jurisdiction) with
regard to environmental, health or safety matters, including, without
limitation, the treatment, storage, disposal, pumping, pouring,
emptying, infecting, leaking, dumping, transportation, release,
discharge or spillage of any waste or hazardous substance or any
substance likely to impair the environment or natural resources or harm
human health or property and which is material in the context of the
Banner Group taken as a whole; or
(iii)that there has been a disposal, discharge, spillage, release, escape,
dumping, emptying, leak or emission of any waste, hazardous substance or
any substance likely to impair the environment or natural resources or
harm human health or property on, to, under or from or generated from
any land or other asset or medium now or previously owned, occupied,
leased, operated or made use of or controlled by any present member of
the Banner Group, or in which any such member may now have or previously
have had an interest, which would be likely to give rise, directly or
indirectly, to any liability or obligation (whether actual or
contingent) on the part of any member of the Banner Group which is
material in the context of the Banner Group taken as a whole.
(iv)circumstances exist (whether as a result of the making of the Offer or
otherwise):
(a)which would be likely to lead to any government or governmental,
quasi-governmental, supranational, statutory, regulatory,
investigative or environmental body or any court or other similar body
or person in any jurisdiction instituting, or
(b)whereby the Petroferm Group or any present member of the wider
Banner Group would be likely to be required to institute an
environmental audit or take any other steps which would in any such
case be likely to result in any actual or contingent liability to
improve or install new plant or equipment or make good, repair, re-
instate, or clean up any land or other asset now or previously owned,
occupied or made use of by any member of the wider Banner Group or in
which such member may now have or previously has had an interest which
is material in the context of the wider Banner Group taken as a whole;
or
(v)circumstances exist whereby a person or class of persons would be
likely to have any claim or claims in respect of any product or process
of manufacture of materials used therein now or previously manufactured,
sold or carried out by any present member of the wider Banner Group
which claim or claims would be likely to affect adversely any member of
the wider Banner Group in a manner which is material in the context of
the wider Banner Group taken as a whole.
Petroferm UK reserves the right to waive, in whole or in part, all or any of
the above conditions apart from condition (a). If Petroferm UK is required by
the Panel to make an offer for Banner Shares under the provisions of Rule 9 of
the Code, Petroferm UK may make such alterations to the above conditions
including condition (a) as are necessary to comply with the provisions of that
Rule.
The Offer will lapse unless the conditions set out above (other than condition
(a)) are fulfilled or (if capable of waiver) waived by Petroferm UK no later
than 21 days after either 5 August 1999 or the date on which the Offer becomes
or is declared unconditional as to acceptances, whichever is the later, or
such later date as the Panel may agree. Petroferm UK shall be under no
obligation to waive or treat as satisfied any of the conditions (b) to (h) by
a date earlier than the latest date specified above for the satisfaction
thereof notwithstanding that the other conditions of the Offer may at such
earlier date have been waived or fulfilled and that on such earlier date there
are no circumstances indicating that any of such conditions may not be capable
of fulfilment or satisfaction.
The Offer will lapse if the acquisition of Banner is referred to the
Competition Commission before 3.00 p.m. on 5 August 1999 or the date on which
the Offer becomes or is declared unconditional as to acceptances, whichever is
the later, or such later date as the Panel may agree.
APPENDIX II
DEFINITIONS
The following definitions apply throughout this document unless the context
otherwise requires:
"Act" the Companies Act 1985 (as amended)
"Banner" Banner Chemicals PLC
"Banner Group" Banner and its subsidiary and associated undertakings and,
where the context permits, each of them
"Banner the directors of Banner whose names are set out in
Directors" paragraph 12 (c) of this announcement
"Banner Share the Banner 1986 Approved Executive Share Option Scheme, the
Option Banner 1991 Executive Share Option Scheme, the Banner 1997
Schemes" Approved Executive Share Option Scheme, the Banner 1997
Executive Share Option Scheme and the Banner 1997 Savings-
Related Share Option Scheme
"Banner Shares" the existing unconditionally allotted or issued and fully
or "Ordinary paid ordinary shares of 5 pence each in Banner, and any
Shares" further such shares which are unconditionally allotted or
issued before the date on which the Offer closes (or such
earlier date as Petroferm may, subject to the provisions of
the Code, decide, but not being earlier than the date on
which the Offer becomes or is declared unconditional as to
acceptances) including any such shares unconditionally
allotted or issued upon exercise of options under the
Banner Share Option Schemes
"Banner holders of Banner Shares
Shareholders" or
"Shareholders"
"Code" the City Code on Takeovers and Mergers
"business day" a day (other than a Saturday) on which banks are generally
open for business in London
"the Carbons the disposal of Banner's carbons and environmental
Disposal" engineering businesses, described in a circular to Banner
Shareholders dated 20 May 1998.
"Form of the form of acceptance and authority relating to the Offer
Acceptance" or
"Form"
"Hawkpoint Hawkpoint Partners Limited
Partners"
"IDJ" IDJ Limited
"London Stock London Stock Exchange Limited
Exchange"
"Offer" the Offer to be made by IDJ on behalf of Petroferm UK to
acquire all of the Banner Shares on the terms set out in
the Offer Document and, where the context so admits, any
subsequent revision, variation, extension or renewal
thereof
"Offer Document" the document to be sent to Banner Shareholders by IDJ on
behalf of Petroferm UK setting out the terms and conditions
of the Offer
"Offer Period" the period commencing on the date of this announcement of
the Offer, and ending on the earlier of (i) the date on
which the Offer becomes or is declared unconditional as to
acceptances and (ii) the date on which the Offer lapses
"Panel" The Panel on Takeovers and Mergers
"Petroferm" Petroferm Inc., a private company incorporated in the State
of Delaware, USA
"Petroferm together, the directors of Petroferm UK and the directors
Directors" of Petroferm, whose names are set out on paragraphs 12 (a)
and 12 (b) of this announcement
"Petroferm Petroferm and its subsidiary and associated undertakings
Group" and, where the context so permits, each of them
"Petroferm UK" Petroferm UK Limited, a wholly owned subsidiary of
Petroferm incorporated for the purposes of the Offer
"UK" the United Kingdom of Great Britain and Northern Ireland
For the purpose of this document, "subsidiary", "subsidiary undertaking" and
"parent undertaking" have the respective meanings given to them by the Act.
END
OFFCCPCQKDKKNOD
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