RNS Number : 6473E
Redhall Group PLC
30 September 2008
30 September 2008
This announcement is not for release, publication or distribution in or into any jurisdiction if to do so would constitute a violation
of the relevant laws of such jurisdiction.
RECOMMENDED CASH OFFER FOR CHIEFTAIN GROUP PLC
BY
REDHALL GROUP PLC
SUMMARY
* Further to the announcement by Chieftain on 19 September 2008 regarding discussions about a possible offer, the boards of Redhall and
Chieftain are pleased to announce the terms of a recommended cash offer (the "Offer") to be made by Redhall for the entire issued and to be
issued share capital of Chieftain
* The Offer Price is 209.2p in cash per Chieftain Share. The Offer values the existing issued share capital and outstanding options of
Chieftain at approximately �18.6 million
* The Offer Price represents:
- a premium of approximately 9.5 per cent. to the Closing Price of 191.0p per Chieftain Share on 18 September 2008, being the last
dealing day prior to the announcement that the board of Chieftain was in discussions about a possible offer;
- a premium of approximately 13.2 per cent. to the twelve month average Closing Price of approximately 184.8p per Chieftain Share
prior to this announcement; and
- a premium of approximately 0.8 per cent. to the Closing Price of 207.5p per Chieftain Share on 29 September 2008, being the last
dealing day prior to this announcement.
* The Offer is unanimously recommended by the board of Chieftain
* In aggregate, Redhall has received irrevocable undertakings to accept the Offer in respect of 3,016,619 Chieftain Shares, representing
approximately 34.4 per cent. of the existing issued share capital of Chieftain
* Altium is acting as financial adviser to Redhall. Brewin Dolphin is acting as Rule 3 adviser to Chieftain under the City Code
* The Offer will be funded via an equity fundraising underwritten by Altium and Redhall's existing resources. The issue of new Redhall
shares pursuant to the Placing will, due to its size, require an increase in Redhall's existing share capital authorities. Accordingly, the
Offer will be conditional, inter alia, on the approval of Redhall Shareholders at the Redhall General Meeting. It is expected that the
Circular containing the notice of Redhall General Meeting will be sent to Redhall Shareholders today
* The Offer Document and the Form of Acceptance will be despatched today
Commenting on the Offer, David Jackson, Chairman and Chief Executive of Redhall, said:
"We are delighted to announce the Offer for Chieftain which should provide Redhall with complementary engineering and fabrication
capacity, a well established engineering resources business and an entry into the marine outfitting business. We anticipate synergies within
Chieftain's central management function of a minimum of �0.5 million per annum in addition to potential operational synergies. This
acquisition would give the enlarged Redhall Group much enhanced prospects particularly within the oil and gas industry."
This summary should be read in conjunction with, and is subject to, the full text of the attached announcement. Appendix IV to the
attached announcement contains definitions of certain expressions used in this summary. The Offer will be subject to the full terms and
conditions set out in the Offer Document and the Form of Acceptance.
Enquiries:
Redhall
David Jackson/Simon Foster 01924 385 386
Altium, Financial advisers and Brokers to Redhall
Phil Adams/Simon Lord / Paul Lines 0161 831 9133
Chieftain
Bill Taylor/Stan Elliott 0191 263 5544
Brewin Dolphin, Financial advisers to Chieftain
Andrew Emmott/Sean Wyndham-Quin 0845 213 4730
Buchanan, PR advisers to Redhall
Tim Anderson/Isabel Podda 020 7466 5000
Rawlings Financial, PR advisers to Chieftain 01653 618 016
Catriona Valentine/Keeley Clarke
This announcement does not constitute, or form part of, any offer for, or any solicitation of any offer for, securities of Chieftain.
Any acceptance or other response to the Offer should be made only on the basis of information referred to in the Offer Document and the Form
of Acceptance which Redhall intends to despatch today to Chieftain Shareholders and, for information only, to holders of options under the
Chieftain Share Option Scheme.
Unless otherwise determined by Redhall and permitted by applicable law and regulation, the Offer will not be made, directly or
indirectly, in, into or from, or by use of the mails of, or by any means or instrumentality (including, without limitation, facsimile
transmission, telex, telephone or email) of interstate or foreign commerce of, or by any facility of a national securities exchange of, nor
will it be made in, into or from any jurisdiction if to do so would constitute a violation of the relevant laws of such jurisdiction and the
Offer will not be capable of acceptance by any such use, means, instrumentality or facilities. Accordingly, copies of any documents relating
to the Offer must not be, directly or indirectly, mailed, transmitted or otherwise forwarded, distributed or sent, in whole or in part, in,
into or from any jurisdiction if to do so would constitute a violation of the relevant laws of such jurisdiction and persons receiving such
documents (including custodians, nominees and trustees) must not directly or indirectly mail, transmit or otherwise forward, distribute or send them in, into or from any such jurisdiction as to do
so may invalidate any purported acceptance of the Offer.
The availability of the Offer to persons who are not resident in the United Kingdom may be affected by the laws of the jurisdiction in
which they are resident. Persons who are not resident in the United Kingdom should inform themselves about, and observe, applicable
requirements.
The Redhall Directors accept responsibility for the information contained in this announcement, other than that relating to the
recommendation of the Offer by the Chieftain Directors and their associated views and opinions, and the information relating to the
Chieftain Group, the Chieftain Directors and members of their immediate families, related trusts and persons connected with them. To the
best of the knowledge and belief of the Redhall Directors (who have taken all reasonable care to ensure this 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 Chieftain Directors accept responsibility for all the information contained in this announcement relating to the recommendation of
the Offer by the Chieftain Directors including their views, opinions and recommendations and the information relating to the Chieftain
Group, the Chieftain Directors and members of their immediate families, related trusts and persons connected with them. To the best of the
knowledge and belief of the Chieftain Directors (who have taken all reasonable care to ensure this 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.
Altium Capital Limited, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting
exclusively for Redhall as financial adviser within the meaning of the Rules of the Financial Services Authority and for no one else in
connection with the Offer. Altium Capital Limited is not advising any other person or treating any other person as its client in relation
thereto and will not be responsible to anyone other than Redhall for providing the protections afforded to clients of Altium Capital
Limited, or for giving advice to any other person in relation to the Offer, the contents of this announcement or any other matter referred
to herein.
Brewin Dolphin Limited, which is authorised and regulated by the Financial Services Authority in the United Kingdom, is acting for
Chieftain and no one else in relation to the Offer and will not be responsible to anyone other than Chieftain for providing the protections
afforded to clients of Brewin Dolphin Limited nor for providing advice in relation to the contents of this announcement or any Offer or
arrangement referred to herein.
30 September 2008
This announcement is not for release, publication or distribution in or into
any jurisdiction if to do so would constitute a violation of the relevant laws of such jurisdiction.
RECOMMENDED CASH OFFER FOR CHIEFTAIN GROUP PLC
BY
REDHALL GROUP PLC
1. INTRODUCTION
Further to the announcement by Chieftain on 19 September 2008 regarding discussions about a possible offer, the boards of Redhall and
Chieftain are pleased to announce that they have reached agreement on the terms of a recommended cash offer, to be made by Redhall, for the
entire issued and to be issued share capital of Chieftain.
The Offer will be 209.2p in cash for each Chieftain Share. The Offer values the existing issued ordinary share capital and outstanding
options of Chieftain at approximately �18.6 million.
The board of Chieftain, who have been so advised by Brewin Dolphin, considers the terms of the Offer to be fair and reasonable and
unanimously recommends that Chieftain Shareholders accept the Offer. All of the Chieftain Directors who are interested in Chieftain Shares
have irrevocably undertaken to accept or procure the acceptance of the Offer in respect of the entire beneficial holdings of themselves and
certain persons connected with them of 3,016,619 Chieftain Shares, which, in aggregate, represent approximately 34.4 per cent. of the
existing issued share capital of Chieftain. Further details of these undertakings are provided in paragraph 4 below. In providing advice to
the Chieftain Directors, Brewin Dolphin has taken into account the commercial assessments of the Chieftain Directors. Further information on
Redhall and a description of the financing arrangements for the Offer will be set out in the Offer Document.
2. THE OFFER
Redhall will offer to acquire, on the terms and subject to the conditions set out in Appendix I to this announcement and the further
terms and conditions to be set out in the Offer Document and in the Form of Acceptance, the Chieftain Shares on the following basis:
for each Chieftain Share 209.2p in cash
The Offer Price represents:
- a premium of approximately 9.5 per cent. to the Closing Price of 191.0p per Chieftain Share on 18 September 2008, being the last
dealing day prior to the announcement that the board of Chieftain was in discussions about a possible offer;
- a premium of approximately 13.2 per cent. to the twelve month average Closing Price of approximately 184.8p per Chieftain Share
prior to this announcement; and
- a premium of approximately 0.8 per cent. to the Closing Price of 207.5p per Chieftain Share on 29 September 2008, being the last
dealing day prior to this announcement.
The Chieftain Shares to be acquired by Redhall pursuant to the Offer are to be acquired with full title guarantee, fully paid and free
from all liens, equities, charges and encumbrances and other third party rights or interests and together with all rights now or hereafter
attaching thereto, including the right to receive and retain all dividends and other distributions (if any) declared, made or paid
hereafter, save for the interim dividend of 3.3p declared on 4 September 2008 and to be paid on 3 October 2008 to Chieftain Shareholders on
the register on 12 September 2008.
Full acceptance of the Offer, assuming the exercise of all outstanding options with an exercise price of less than 209.2p per Chieftain
Share under the Chieftain Share Option Scheme before the Offer closes, will result in the payment to Chieftain Shareholders of, in
aggregate, approximately �18.6 million in cash.
3. RECOMMENDATION
The Chieftain Directors are not connected with Redhall and have taken responsibility for considering the Offer on behalf of Chieftain
Shareholders, for obtaining advice on the Offer from Brewin Dolphin (Chieftain's independent financial adviser for the purposes of the City
Code) and for reaching a conclusion on the appropriate recommendation to Chieftain Shareholders.
The Chieftain Directors, who have been so advised by Brewin Dolphin, consider the terms of the Offer to be fair and reasonable. In
providing its advice, Brewin Dolphin has taken into account the commercial assessments of the Chieftain Directors. Accordingly, the
Chieftain Directors unanimously recommend Chieftain Shareholders to accept the Offer as they themselves have irrevocably undertaken to do
(or procure to be done) in respect of the entire beneficial holdings of themselves and certain persons connected with them of 3,016,619
Chieftain Shares in aggregate, representing approximately 34.4 per cent. of the existing issued share capital of Chieftain.
4. IRREVOCABLE UNDERTAKINGS TO ACCEPT THE OFFER
Redhall has received irrevocable undertakings to accept, or procure the acceptance of, the Offer from the Chieftain Directors who are
interested in Chieftain Shares and who hold (together with their connected persons), in aggregate, 3,016,619 Chieftain Shares representing
approximately 34.4 per cent. of the existing issued share capital of Chieftain. These irrevocable undertakings are also in respect of
Chieftain Shares that may be issued to, or acquired by, such persons pursuant to the terms of the Chieftain Share Option Scheme. These
undertakings will remain binding even if a higher competing offer is made for Chieftain, unless the Offer lapses or is withdrawn.
Further details of these irrevocable undertakings are set out in Appendix II to this announcement.
5. REASONS FOR THE OFFER
The board of Redhall believes that the Offer will:
� create a niche UK engineering services group with increased capability and critical mass to secure and execute significant
contracts in its strategically important markets in nuclear, oil and gas, power generation and defence;
� strengthen Redhall's existing exposure to the oil and gas sector, in line with Redhall's stated strategy, whilst also providing new
expertise in the wider power generation market;
� bring improved access to the nuclear marine outfitting sector, in particular with the Ministry of Defence on current and future
build programmes for the Astute Class submarine and aircraft carrier programmes respectively.
� add further skilled engineering resource and create a Group with in excess of 1,700 employees with enhanced ability to self-deliver
projects via Chieftain's manpower services division;
� provide much needed specialist fabrication and manufacturing facilities complementing Redhall's own;
� strengthen the Enlarged Group's project management resources and enhance its capability in providing integrated solutions to
clients; and
� expand the Group's existing engineering term contract operations into the geographically important North East chemical and power
generation market whilst providing greater opportunity for the Enlarged Group to access other UK regional markets.
In addition, the board of Redhall expects the Acquisition to be earnings enhancing in the first year of acquisition1.
1. This statement should not be interpreted to mean that the earnings per share in 2009, or in any subsequent period, would necessarily
match or be greater than those for the relevant preceding financial period.
6. STRATEGY FOR THE ENLARGED GROUP
Chieftain has a proven track record with a strong network of clients which will add considerable value to the Enlarged Group. The
Redhall Directors also believe that Chieftain's strong operational management team can add value to the Enlarged Group following the Offer
becoming or being declared unconditional in all respects.
The acquisition of Chieftain brings a number of additional benefits to the Enlarged Group:
� improved availability of skilled engineers - there are considerable skills shortages in the engineering services industry;
� access to key geographic markets in energy, chemical and Ministry of Defence marine markets;
� considerable opportunities for cross-selling within Chieftain and Redhall;
� increased project capability with additional engineering resource deployed across the Enlarged Group; and
� an enhanced combined order book of approximately �140 million.
In addition the Redhall board anticipates synergies within Chieftain's central management function of a minimum of �0.5 million per
annum in addition to potential operational synergies.
7. BACKGROUND TO AND REASONS FOR RECOMMENDATION OF THE OFFER BY THE DIRECTORS OF CHIEFTAIN
Bill Taylor and Peter Wardle have led Chieftain's board for the last 23 years. They now both wish to retire and dispose of their
interests in Chieftain. Together Bill and Peter hold in excess of 30 per cent. of the equity and, therefore, a disposal or marketing
requires an offer to all shareholders under the rules of the City Code. A decision was taken by the Chieftain Directors to seek offers for
the entire business and so Brewin Dolphin was appointed to find a buyer. This decision was undertaken confidentially and in private. Through
that process Redhall has come forward with an offer which the Chieftain Directors are pleased to recommend unanimously that Chieftain
Shareholders accept.
Redhall is a specialist engineering support services business quoted on AIM and operates internationally in the nuclear, oil and gas,
food, chemical, defence, safety and security markets. Redhall's intention is to operate Chieftain as a division of the Redhall Group,
largely under the leadership of Chieftain's current operational management team and at its existing locations. The Chieftain Directors
believe that there is a compatibility between the two groups, which should facilitate the integration of the businesses, which is vitally
important for the clients and employees of Chieftain. Furthermore the Chieftain Directors believe that Chieftain and Redhall have a well
suited mix of service offerings and, together, a good coverage of the key global markets for industrial and engineering services.
In addition, Chieftain Shareholders should note that the Offer Price represents:
- a premium of approximately 9.5 per cent. to the Closing Price of 191.0p per Chieftain Share on 18 September 2008, being the last
dealing day prior to the announcement that the board of Chieftain was in discussions about a possible offer;
- a premium of approximately 13.2 per cent. to the twelve month average Closing Price of approximately 184.8p per Chieftain Share
prior to this announcement; and
- a premium of approximately 0.8 per cent. to the Closing Price of 207.5p per Chieftain Share on 29 September 2008, being the last
dealing day prior to this announcement.
8. INFORMATION ON CHIEFTAIN
Chieftain provides outsourced industrial and engineering support services to clients, specialising in the marine, nuclear,
petrochemical, power, oil and gas and process sectors. Incorporated in 1979, Chieftain has developed organically and by acquisition. Since
2004, Chieftain has operated in three divisions: Engineering, Marine Outfitting and Environmental Services.
The Engineering division provides asset maintenance in the process and energy sectors on long term contracts, supplies general and
pipework fabrication to the offshore oil and gas, process and energy industry and provides skilled manpower to clients engaged in
engineering projects around the world. The Marine Outfitting division is one of the UK's leaders in the supply of insulation, scaffolding,
painting and architectural services to sea-going vessels for merchant and warship fleets and oil and gas offshore platforms. The Chieftain
Group retains a small environmental services and maintenance business, principally for power generation and local authority clients in
Northern Ireland.
For the six months ended 30 June 2008, Chieftain reported turnover of �22.8 million and profit before tax of �1.1 million.
Further information on Chieftain will be set out in the Offer Document.
9. INFORMATION ON REDHALL
Redhall is an AIM quoted group with a market capitalisation of approximately �57 million. The group consists of six niche engineering
services businesses across two key divisions. It operates with global clients in markets that have growth in the short, medium and long
term. Principal markets include nuclear, oil and gas, chemical, food, defence, safety and security.
Nuclear Services
Jordan Nuclear
A mechanical engineering contractor which has operated within the nuclear industry for over 40 years. The business provides life-cycle
support from new construction to decommissioning and is expert in planning, active area working, asset management support and the management
and control of heavy lifting.
Jordan Manufacturing
Engaged in the manufacturing and fabrication of stainless steel with significant knowledge of materials, offering bespoke design,
material selection and procurement, tailored manufacturing processes and specialist surface finishes to meet its customers' requirements.
The business is a preferred supplier within the nuclear and energy sectors.
Steels Engineering Services
Steels provides a range of multi-discipline design and engineering services to the nuclear, power generation and defence sectors. It is
currently a key term contractor for specialist nuclear projects within the high security radiological areas of AWE Aldermaston where it has
had a presence for over 10 years.
Engineering Services
Jordan Engineering
An outsourced engineering support services business supplying blue chip customers in the oil and gas, chemical, food, pharmaceutical and
industrial sectors. It offers a broad range of services including maintenance planning and management, term contracts, shut-down services,
project services and tank repair and maintenance.
Jex Engineering
Provider of engineering services and complete solutions to customers within the process sector. It focuses on multinational clients in
the food, chemical and pharmaceutical sectors where its service offering covers the complete project life-cycle including feasibility study,
design and planning, construction and final project review.
Booth Industries
Undertakes the design, manufacture, installation and maintenance of specialist doors, windows and wall systems. It has a significant
design capability providing bespoke specifications to meet the hostile and challenging conditions in which its products operate. Its
expertise and products are supplied into the infrastructure, oil and gas, defence and nuclear industries.
For the six months ended 31 March 2008, Redhall reported turnover of �41.5 million and profit before tax of �1.8 million, accompanied by
strong cash generation from operations of �2.7 million.
10. CURRENT TRADING AND PROSPECTS
Chieftain
In the unaudited results for the six month period ended 30 June 2008, announced by Chieftain on 4 September 2008, Peter Wardle, Chairman
of Chieftain, commented:
"We continue to look forward with confidence to continuing significant expansion of the Group's activities. Chieftain has skills which
are in strong demand from end users which are very active and the outlook for the Chieftain group is very positive. This demand is tangible
and is evidenced in the contract wins we have reported in the recent years and an order book of �69 million, which gives excellent
visibility for the current year and well into 2009." The Chieftain Board believes that this continues to be the case.
Redhall
In today's trading update ahead of the preliminary results for Redhall for the year ended 30 September 2008, the Chairman and Chief
Executive of Redhall, David Jackson, commented:
"The board is pleased to announce that it anticipates that profit for the current financial year will be ahead of management's
expectations with both divisions performing well. The Redhall Board is particularly pleased with the strong performances from those
businesses acquired in 2007, which have integrated well. Redhall continues to be strongly cash generative and will have net cash as at 30
September 2008. The outlook in our markets remains positive into 2009 and beyond."
11. INTENTIONS REGARDING CHIEFTAIN'S EMPLOYEES AND DIRECTORS
The board of Redhall has given assurances to the board of Chieftain that, following the Offer becoming or being declared unconditional
in all respects, the existing employment rights, including pension rights, of all employees and management of the Chieftain Group will be
fully safeguarded.
Redhall attaches great importance to the skills and experience of the existing management and employees of Chieftain. As such, Redhall
expects that Chieftain employees will play an important role in the future of the business and Redhall does not currently intend to make any
material changes to Chieftain's staffing levels, nor to any conditions of employment (including pension benefits) nor locations of
Chieftain's places of business.
Peter Wardle, Bill Taylor, Stan Elliott, Christopher Fleetwood and John Dawson have agreed to resign following the Offer becoming or
being declared unconditional in all respects. Bill Taylor and Stan Elliott intend to remain with the Enlarged Group for a short period to
facilitate the transition.
12. CHIEFTAIN SHARE OPTION SCHEME
The Offer will extend to any Chieftain Shares which are unconditionally allotted or issued prior to the date on which the Offer closes
(or such earlier date as Redhall may, subject to the City Code or with the consent of the Panel, determine) including any which are so
unconditionally allotted or issued pursuant to the exercise of options under the Chieftain Share Option Scheme. To the extent such options
are not exercised, Redhall will make appropriate proposals to Chieftain Share Optionholders. It is anticipated that such proposals will be
sent to Chieftain Share Optionholders with the Offer Document today.
13. INFORMATION ON FINANCING
Full acceptance of the Offer, assuming the exercise of relevant Chieftain Share Options, will result in a maximum cash consideration of
approximately �18.6 million which (together with the expenses of Chieftain and Redhall of approximately �1.4 million) will be provided from
the proceeds of the Placing and Redhall's existing resources. Altium is satisfied that Redhall has sufficient financial resources available
to it to satisfy in full the cash consideration payable by Redhall under the Offer.
Further information in relation to the financing of the Offer will be set out in the Offer Document.
14. INDUCEMENT FEE
On 7 August 2008, Chieftain entered into an agreement with Redhall pursuant to which Chieftain has agreed to pay to Redhall a sum of one
per cent. of the value of the Offer (inclusive of any irrevocable VAT) if, amongst other things, (i) the Chieftain Directors withdraw or
modify their recommendation to accept the Offer; or (ii) a competing offer is announced in accordance with Rule 2.5 of the City Code after
the date of this announcement and the competing offer is recommended by the Chieftain Directors for acceptance. There are also
non-solicitation provisions in favour of Redhall contained in the inducement fee agreement. Nothing in the inducement fee arrangement
obliges Chieftain to pay any amount which the Panel determines would not be permitted by Rule 21.2 of the City Code.
15. REDHALL SHAREHOLDER APPROVAL
The Offer will be funded by an equity fundraising underwritten by Altium. The issue of new Redhall Shares pursuant to the Placing will,
due to its size, require an increase in Redhall's existing share capital authorities. Accordingly, the Offer will be conditional, inter
alia, on the passing of the Resolution by Redhall Shareholders at the Redhall General Meeting. It is expected that the Circular containing
the notice of the Redhall General Meeting will be sent to Redhall Shareholders today.
The Redhall Directors have irrevocably undertaken to vote in favour of the Resolution to be proposed at the Redhall General Meeting in
respect of their own entire beneficial holdings of Redhall Shares (and to procure that their connected persons vote in favour of the
Resolution in relation to their beneficial holdings of Redhall Shares) being, in aggregate, 1,498,494 Redhall Shares, representing
approximately 7.0 per cent. of the existing issued share capital of Redhall as at 29 September 2008, being the last practicable day before
this announcement.
16. COMPULSORY ACQUISITION, CANCELLATION OF TRADING ON AIM AND RE-REGISTRATION
If Redhall receives acceptances under the Offer in respect of, and/or otherwise acquires, 90 per cent. or more in value of the Chieftain
Shares to which the Offer relates (and not less than 90 per cent. of the voting rights carried by Chieftain Shares), and if all other
conditions of the Offer have been satisfied or waived (to the extent that they are capable of being waived), Redhall intends to exercise its
rights pursuant to the provisions of Part 28 of the CA 2006 to acquire compulsorily any remaining Chieftain Shares in respect of which
acceptances have not then been received on the same terms as the Offer.
If the Offer becomes or is declared unconditional in all respects, and sufficient acceptances under the Offer are received , or
Chieftain Shares are otherwise acquired or agreed to be acquired, and subject to any applicable requirements of the London Stock Exchange,
Redhall intends to procure that Chieftain makes an application to cancel admission to trading in Chieftain Shares on AIM. Cancellation of
trading would significantly reduce the liquidity and marketability of any Chieftain Shares not assented to the Offer at that time and the
value of any such Chieftain Shares may be affected as a consequence.
It is anticipated that cancellation of admission to trading on AIM will take effect no earlier than 20 Business Days after the earlier
of (i) the date on which Redhall has, by virtue of its shareholdings and acceptances of the Offer, acquired or agreed to acquire issued
share capital carrying 75 per cent. of the voting rights of Chieftain; or (ii) the first date of issue of compulsory acquisition notices
under Part 28 of the CA 2006. Redhall will notify Chieftain Shareholders when the required threshold has been attained and confirm that the
notice period has commenced and the anticipated date of cancellation.
It is also intended that, following the Offer becoming or being declared unconditional in all respects and after the cancellation
referred to above becomes effective, Chieftain will be re-registered as a private company under the relevant provisions of the CA 1985.
17. GENERAL
The Offer will be made on the terms and subject to the conditions which are set out in Appendix I to this announcement and on the
further terms that will be set out in the Offer Document and the Form of Acceptance and such further terms as may be required to comply with
the provisions of the City Code.
Redhall intends that the Offer Document setting out the details of the formal Offer will be posted to Chieftain Shareholders today and
in any event within 28 days of the date of this announcement. Redhall also intends that the Circular and notice of Redhall General Meeting
will be sent to Redhall Shareholders today.
Details of the sources and bases of information in respect of the information contained in this announcement are contained in Appendix
III to this announcement. Appendix IV to this announcement contains definitions of certain expressions used in this announcement.
Save as disclosed in this announcement, as at 29 September 2008, the latest practicable date prior to this announcement, neither
Redhall, any of the Redhall Directors (and their close relatives and related trusts) nor, so far as Redhall is aware, any person acting in
concert with Redhall, has any interest in or any right to subscribe for or has any short positions (whether conditional or absolute and
whether in the money or otherwise) (including any short positions under a derivative, any agreement to sell or any delivery obligation or
right to require another person to purchase or take delivery) in or has borrowed or lent (save for any borrowed shares which have been
either on-lent or sold) any "relevant securities" of Chieftain nor does any such person have any arrangement with Chieftain or Redhall or
any of their respective associates in relation to "relevant securities" of Chieftain. For these purposes, "relevant securities" means
securities of Chieftain which are being offered for or which carry voting rights, equity share capital of Chieftain and securities of Chieftain carrying conversion or subscription rights into any of the
foregoing, and, "arrangement" includes any indemnity or option arrangement, any agreement or understanding, formal or informal, of whatever
nature, relating to "relevant securities" of Chieftain which may be an inducement to deal or refrain from dealing in such securities.
"Interest" includes, in summary, any long economic exposure, whether conditional or absolute, to changes in the price of securities and a
person is 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. In the interests of confidentiality, Redhall has not made enquires in this respect of certain parties
who may be presumed by the Panel to be acting in concert with it for the purposes of the Offer.
The availability of the Offer to persons not resident in the United Kingdom may be affected by the laws of the relevant jurisdictions.
Persons who are not resident in the United Kingdom should inform themselves about and observe any applicable requirements.
This announcement does not constitute, or form part of, any offer for, or any solicitation of any offer for or any invitation to
purchase, securities. Any acceptance or other response to the Offer should be made only on the basis of information referred to in the Offer
Document and the Form of Acceptance which Redhall intends to despatch to Chieftain Shareholders and, for information only, to Chieftain
Share Optionholders today and in any event as soon as practicable.
The Offer and acceptances of it will be governed by English Law. The Offer will be subject to the applicable requirements of the City
Code, the Panel and the London Stock Exchange and other legal and regulatory requirements.
Altium Capital Limited, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting
exclusively for Redhall as financial adviser within the meaning of the Rules of the Financial Services Authority and for no one else in
connection with the Offer. Altium Capital Limited is not advising any other person or treating any other person as its client in relation
thereto and will not be responsible to anyone other than Redhall for providing the protections afforded to clients of Altium Capital
Limited, or for giving advice to any other person in relation to the Offer, the contents of this announcement or any other matter referred
to herein.
Brewin Dolphin Limited, which is authorised and regulated by the Financial Services Authority in the United Kingdom, is acting for
Chieftain and no one else in relation to the Offer and will not be responsible to anyone other than Chieftain for providing the protections
afforded to clients of Brewin Dolphin Limited nor for providing advice in relation to the contents of this announcement or any Offer or
arrangement referred to herein.
Dealing Disclosure Requirements
Under the provisions of Rule 8.3 of the City Code, if any person is, or becomes, "interested" (directly or indirectly) in one per cent.
or more of any class of "relevant securities" of Chieftain, 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 Offer becomes, or is declared, unconditional as to acceptances, 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 Chieftain, 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 City Code, all "dealings" in "relevant securities" of Chieftain by Redhall or Chieftain, 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 City 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.
30 September 2008
Enquiries:
Redhall
David Jackson/Simon Foster 01924 385 386
Altium, Financial advisers and Brokers to Redhall
Phil Adams/Simon Lord / Paul Lines 0161 831 9133
Chieftain
Bill Taylor/Stan Elliott 0191 263 5544
Brewin Dolphin, Financial advisers to Chieftain
Andrew Emmott/Sean Wyndham-Quin 0845 213 4730
Buchanan, PR advisers to Redhall
Tim Anderson/Isabel Podda 020 7466 5000
Rawlings Financial, PR advisers to Chieftain 01653 618 016
Catriona Valentine/Keeley Clarke
APPENDIX I
CONDITIONS AND CERTAIN FURTHER TERMS OF THE OFFER
The Offer will be subject to the following conditions:
1.1 Valid acceptances of the Offer being received (and not, where permitted, withdrawn) by not later than 1.00 p.m. on the First
Closing Date or such later time(s) and/or date(s) as Redhall may, with the consent of the Panel or subject to the City Code, decide in
respect of not less than 90 per cent. (or such lower percentage as Redhall may decide) in nominal value of the Chieftain Shares to which the
Offer relates and not less than 90 per cent. (or such lower percentage as Redhall may decide) of the voting rights carried by the Chieftain
Shares to which the Offer relates, provided that this condition will not be satisfied unless Redhall and/or any of its wholly-owned
subsidiaries shall have acquired or agreed to acquire (whether pursuant to the Offer or otherwise), Chieftain Shares carrying, in aggregate,
more than 50 per cent. of the voting rights then normally exercisable at a general meeting of Chieftain (including for this purpose, to the
extent (if any) required by the Panel, any voting rights attaching to any Chieftain Shares which may be unconditionally allotted or issued before the Offer becomes or is declared unconditional as to
acceptances, whether pursuant to the exercise of any outstanding conversion or subscription rights or otherwise). For the purpose of this
condition:
1.1.1 the expression "Chieftain Shares to which the Offer relates" shall be construed in accordance with sections 974 to 991 (inclusive)
of the CA 2006;
1.1.2 Chieftain Shares which have been unconditionally allotted but not issued shall be deemed to carry the voting rights which they
will carry on issue; and
1.1.3 valid acceptance shall be treated as having been received in respect of any Chieftain Shares that Redhall, pursuant to section
979(8) and, if applicable, section 979(9) of the CA 2006, shall be treated as having acquired or unconditionally contracted to acquire by
virtue of acceptances of the Offer.
1.2 The passing at the Redhall General Meeting (or at any adjournment thereof) of the Resolution (as such Resolution may be set out
in the Circular).
1.3 The admission to trading on AIM of the Placing Shares becoming effective in accordance with the AIM Rules.
1.4 No government or governmental, quasi-governmental, supranational, statutory or regulatory body, authority, court, trade agency,
professional association or environmental body or any other person or body in any jurisdiction having prior to the date on which the Offer
would otherwise have become unconditional decided to take, instituted, implemented or threatened any action, proceedings, suit,
investigation or enquiry or enacted, made or proposed any statute or regulation or order that would or might:
1.4.1 make the Offer or the acquisition by Redhall of any shares in, or control of Chieftain void, illegal or unenforceable, or
otherwise restrain, prohibit, restrict or delay or impose additional conditions or obligations with respect thereto or otherwise challenge
or interfere therewith; or
1.4.2 result in any material delay in the ability of Redhall, or render Redhall unable, to acquire some or all of the Chieftain Shares;
or
1.4.3 require the divestiture by any member of the Wider Redhall Group or by any member of the Wider Chieftain Group of all or any
material portion of their respective businesses, assets or property or impose any material limitation on the ability of them to conduct
their respective businesses and to own any of their respective assets or properties; or
1.4.4 impose any material limitation on the ability of any member of the Wider Redhall Group to acquire, hold or exercise effectively
any rights of ownership of shares in the Wider Chieftain Group or to exercise management control over any member of the Wider Chieftain
Group; or
1.4.5 otherwise affect the businesses, profits or prospects of any member of the Wider Redhall Group or of any member of the Wider
Chieftain Group in a manner which is material and adverse in the context of this Offer,
and all applicable waiting periods during which any such governmental body, court or other person could institute, implement or threaten any
such action, proceedings, suit, investigation or enquiry having expired or terminated.
1.5 Save as disclosed in the Chieftain annual report and accounts for the year ended 31 December 2007 and/or as publicly announced by
Chieftain by notifying a Regulatory Information Service on or prior to 29 September 2008 and/or as disclosed in writing to Redhall on or
before 29 September 2008, there being no provision or any arrangement, agreement, licence or other instrument to which any member of the
Wider Chieftain Group is a party or by or to which any of such members or any of its assets may be bound, entitled to or subject which has
not been waived or suspended in a manner satisfactory to the Redhall board and, which could as a consequence of the Offer or the acquisition
or the proposed acquisition by any member of the Wider Redhall Group of any shares in or control of any member of the Wider Chieftain Group
or otherwise would or might result in:
1.5.1 any monies borrowed by or grants made available to any member of the Wider Chieftain Group being or becoming repayable or becoming
capable of being declared repayable immediately or earlier in the case of borrowed monies than the repayment date stated in such
arrangement, agreement, licence or instrument; or
1.5.2 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 Chieftain Group or any such security (whenever arising or having arisen) becoming enforceable; or
1.5.3 any such arrangement, agreement, licence or instrument being terminated or adversely modified or any action being taken or any
obligation arising thereunder; or
1.5.4 any interest in assets or property of any member of the Wider Chieftain Group being or becoming liable to be disposed of or
charged or failing to be disposed of other than in the ordinary course of business; or
1.5.5 any member of the Wider Chieftain Group ceasing to be able to carry on business under any name under which it presently does so;
or
1.5.6 the business or interest of any member of the Wider Chieftain Group in or with any other person, firm or company (or any agreement
or arrangements relating to such business or interests) being terminated or materially modified or adversely affected; or
1.5.7 the exercise of any subscription rights in relation to any shares of any class of securities convertible into shares of any class
in the capital of any member of the Wider Chieftain Group.
1.6 Save as disclosed in the Offer Document, by the report and accounts of Chieftain for the year ended 31 December 2007, or as
publicly announced by Chieftain in accordance with the AIM Rules (by delivery of an announcement to a Regulatory Information Service) and/or
as disclosed in writing to Redhall on or prior to 29 September 2008 there having been since 31 December 2007:
1.6.1 no material adverse change in the business, financial or trading position or profits of any member of the Wider Chieftain Group
having occurred which is material to the Wider Chieftain Group taken as a whole; and
1.6.2 no contingent liability having arisen which is or would be likely to affect any member of the Wider Chieftain Group which might
reasonably be expected to material in the context of the Chieftain Group taken as a whole.
1.7 No litigation, arbitration proceedings, prosecution or other legal proceedings having been instituted by or threatened or
remaining outstanding against any member of the Wider Chieftain Group (whether as pursuer, defender or otherwise) and no statutory demand
having been served on any member of the Wider Chieftain Group which is or might reasonably be expected to be material in context of the
Wider Chieftain Group taken as a whole.
1.8 Redhall not having discovered that any financial or business information concerning any member of the Wider Chieftain Group
publicly disclosed or disclosed in writing at any time by Chieftain to Redhall (including any non-disclosed liabilities in the audited
annual reports and accounts) either contains a material misrepresentation of fact or omits to state a fact necessary to make the information
contained therein not materially misleading and, in either case, which is material in the context of this Offer.
1.9 Save as disclosed in the Offer Document or by the report and accounts of Chieftain for the year ended 31 December 2007 or as
publicly announced by Chieftain in accordance with the AIM Rules (by delivery of an announcement to a Regulatory Information Service) or as
disclosed in writing to Redhall on or before 29 September 2008 no member of the Wider Chieftain Group having, since 31 December 2007:
1.9.1 (save for the issue of Chieftain Shares to employees, prior to the date hereof and pursuant to any employee share scheme(s) of
Chieftain) issued or authorised or proposed the issue of additional shares of any class, or securities convertible into, or rights,
warrants, or options to subscribe for or acquire, any such shares or convertible securities; or
1.9.2 other than to another member of the Chieftain Group declared, paid or made or proposed to declare, pay or make any bonus, dividend
or other distribution (save for the interim dividend of 3.3p per Chieftain Share declared on 4 September 2008); or
1.9.3 authorised or proposed or announced an intention to propose any merger, demerger, acquisition or disposal of assets (other than in
the ordinary course of business) or shares or change in its capitalisation; or
1.9.4 issued any debentures or (other than in the ordinary course of business) incurred or increased any indebtedness or contingent
liability which is material to the Wider Chieftain Group; or
1.9.5 entered into or terminated any contract or commitment (whether in respect of capital expenditure or otherwise) which is of a long
term or unusual nature or which involved or could involve an obligation of a nature or magnitude which in the context of Chieftain*s
business is material to the Wider Chieftain Group; or
1.9.6 entered into any contract, commitment or agreement with respect to any of the transactions or events referred to in this
paragraph; or
1.9.7 authorised or proposed or announced its intention to propose any change in its share or loan capital; or
1.9.8 disposed of or transferred, mortgaged or encumbered any material asset or any right, title or interest in any asset (other than in
the ordinary course of business); or
1.9.9 entered into or varied the terms of any service agreements with any of the directors or senior executives of Chieftain; or
1.9.10 proposed any voluntary winding up of any member of the Wider Chieftain Group.
1.10 Save as disclosed in the Offer Document, by the report and accounts of Chieftain for the year ended 31 December 2007, or as
publicly announced by Chieftain in accordance with the AIM Rules (by delivery of an announcement to a Regulatory Information Service) or as
disclosed in writing to Redhall on or before 29 September 2008, Redhall not having discovered since 29 September 2008 that any past or
present member of the Wider Chieftain Group has failed to comply in any material respect with any and/or all applicable legislation or
regulation of any relevant jurisdiction with regard to the use, storage, treatment, transport, handling, disposal, spillage, release,
discharge, leak or emission of any waste or hazardous substance or any substance likely to impair the environment or harm human health or
animal health or otherwise relating to environmental matters, or that there has otherwise been any such use, storage, treatment, transport,
handling, disposal, spillage, release, discharge, leak or emission (whether or not the same constituted a non-compliance by any person with any such legislation or regulations, and wherever the same may have
taken place) any of which use, storage, treatment, transport handling disposal, spillage, release, discharge, leak or emission would, in
each case, be reasonably likely to give rise to any liability (actual or contingent) on the part of any member of the Wider Chieftain Group
which is material in the context of the Wider Chieftain Group taken as a whole.
Redhall reserves the right to waive all or any of the conditions other than condition 1.1 either in whole or in part. Any determination by
Redhall concerning the fulfilment or otherwise of any condition shall be final and binding. Redhall shall be under no obligation to waive,
to determine to be or remain satisfied or to treat as satisfied any of the conditions 1.2 to 1.10 (inclusive) by a date earlier than the
latest date specified thereof, notwithstanding that the other conditions of the Offer may at such earlier date have been waived or fulfilled
and that there are at such earlier date no circumstances indicating that any such conditions may not be capable of fulfilment.
The Offer will become unconditional in all respects when all the above conditions are fulfilled or waived.
If Redhall is required by the Panel to make an offer for the Chieftain Shares under the provisions of Rule 9 of the City Code, Redhall may
make such alterations to any of the above conditions as necessary to comply with the provisions of that Rule.
The Offer will lapse if it is referred to the Competition Commission on or before the First Closing Date or the date on which the Offer
becomes or is declared unconditional as to acceptances, whichever is the later.
If the Offer lapses, it will cease to be capable of further acceptance. Chieftain Shareholders who have already accepted the Offer shall
then cease to be bound by acceptances delivered on or before the date on which the Offer lapses.
Conditions 1.2 to 1.10 (inclusive) must be fulfilled, be determined by Redhall to be or remain satisfied or be waived by midnight on the
21st day after the later of the First Closing Date and the date on which condition 1.1 is fulfilled (or in each case such later date as
Redhall may, with the consent of the Panel, decide), failing which the Offer will lapse.
APPENDIX II
Irrevocable Undertakings to Accept the Offer
Name of shareholder giving Total number of Number of Chieftain
irrevocable undertaking Chieftain Shares in Shares subject to
respect of which Options
undertakings given
P Wardle 1,923,640 nil
W Taylor 1,002,280 60,000
M Oliver 35,099 40,000
A Cutchie 30,000 40,000
R Johnson 100 40,000
J Dawson 20,000 nil
C Fleetwood 5,500 nil
S Elliott nil 40,000
L Adams nil 40,000
TOTAL 3,016,619 260,000
APPENDIX III
Bases of Calculations and Sources of Information
1. The value placed by the Offer on the whole of the existing issued ordinary share capital of Chieftain is based on 8,758,500 Chieftain
Shares in issue.
2. The Closing Price of a Chieftain Share referred to in this announcement is derived from the Daily Official List published by the London
Stock Exchange.
3. The amount of the cash payment in respect of full acceptance of the Offer is calculated based upon the number of Chieftain Shares in
issue (as described above) and taking into account the assumed issue of a further 260,000 Chieftain Shares to satisfy options exercisable
under the Chieftain Share Option Scheme at a price of less than 209.2p.
4. Financial information in respect of Chieftain and Redhall contained in this announcement relating to
the three years ended 31 December 2007 and the six months to 30 June 2008 and the two years ended
30 September 2007 and the six months ended 31 March 2008 respectively has been extracted or
derived, without material adjustment, from the annual report and/or other public statements made by
Chieftain and Redhall respectively
APPENDIX IV
DEFINITIONS
In this announcement, the following words and expressions shall, except where the context requires otherwise, have the following meanings:
"Acquisition" the proposed acquisition of the whole of the issued and to be
issued share capital of Chieftain by Redhall by means of the
Offer
"AIM" AIM, a market operated by London Stock Exchange
"AIM Rules" the AIM rules for companies, published by the London Stock
Exchange
"Altium" Altium Capital Limited
"Brewin Dolphin" Brewin Dolphin Limited
"Business Day" a day on which banks are generally open for business in London
(excluding Saturdays, Sundays and public holidays)
"CA 1985" the Companies Act 1985
"CA 2006" the Companies Act 2006
"Chieftain" Chieftain Group PLC
"Chieftain Directors" the directors of Chieftain
"Chieftain Group" Chieftain and its subsidiaries and subsidiary undertakings
"Chieftain Share Option the Chieftain Group plc Executive Share Option Scheme 2006
Scheme"
"Chieftain Share holders of Chieftain Share Options and each a "Chieftain Share
Optionholders" Optionholder"
"Chieftain Share Options" share options granted pursuant to the Chieftain Share Option
Scheme
"Chieftain Shareholders" holders of Chieftain Shares and each a "Chieftain Shareholder"
"Chieftain Shares" includes: (i) the existing issued or unconditionally allotted and
fully paid (or credited as fully paid) ordinary shares of 5 pence
each in Chieftain; and (ii) any further such shares which are
unconditionally allotted or issued and fully paid while the Offer
remains open for acceptance or, subject to the provisions of the
City Code, by such earlier date as Redhall may determine, not
being earlier than the date (subject to the City Code) on which
the Offer becomes or is declared unconditional as to acceptances
but, in each case, excludes any shares held as Treasury Shares on
such date as Redhall may determine before the date on which the
Offer closes (which may be a different date to the date referred
to in (ii))
"Circular" the document to be sent to Redhall Shareholders containing,
amongst other things, the notice of the Redhall General Meeting
"City Code" the City Code on Takeovers and Mergers
"Closing Price" the middle market price of a Chieftain Share at the close of
business on the day to which such price relates, as derived from
the London Stock Exchange's Daily Official List for that day
"Enlarged Group" Redhall as enlarged by the Acquisition
"First Closing Date" the date which is 21 days after the day of posting of the Offer
Document
"Form of Acceptance" the form of acceptance and authority relating to the Offer which
will, where appropriate, accompany the Offer Document
"London Stock Exchange" London Stock Exchange plc
"Offer" the recommended cash offer to be made by Redhall for the entire
share capital, issued and to be issued, of Chieftain including,
where the context requires, any subsequent revision, variation,
extension or renewal thereof
"Offer Document" the offer document to be sent to Chieftain Shareholders
containing the formal Offer
"Offer Price" 209.2 pence per Chieftain Share
"Overseas Shareholders" Chieftain Shareholders (or nominees of or custodians or trustees
for Chieftain Shareholders) in, resident in or nationals or
citizens of jurisdictions outside the United Kingdom
"Panel" the Panel on Takeovers and Mergers
"Placing" the conditional placing by Altium of the Placing Shares at a
price of 245 pence per Placing Share
"Placing Shares" or "New the 8,163,266 new Redhall Shares which have been conditionally
Redhall Shares" placed under the Placing with certain institutional investors
"Redhall" Redhall Group plc
"Redhall Directors" the directors of Redhall
"Redhall General Meeting" the general meeting of Redhall to be held on 24 October 2008 to
consider, and if thought fit, approve the Resolution
"Redhall Shareholders" holders of Redhall Shares and each a "Redhall Shareholder"
"Redhall Shares" ordinary shares of 25 pence each in the capital of Redhall
"Regulatory Information any of the services set out in Appendix 3 to the Listing Rules
Service"
"Resolution" the resolution to be put to the Redhall Shareholders at the
Redhall General Meeting and set out in the notice of the Redhall
General Meeting
"Treasury Shares" any Chieftain Shares held by Chieftain as treasury shares (as
defined in section 162A of CA 1985)
"UK" or "United Kingdom" the United Kingdom of Great Britain and Northern Ireland
"United States" or "US" the United States of America, its territories and possessions,
all areas subject to its jurisdiction or any political
subdivision thereof, any state of the United States of America
and the District of Columbia
"Wider Chieftain Group" Chieftain and the subsidiaries and subsidiary undertakings of
Chieftain and associated undertakings and any other body
corporate, partnership, joint venture or person in which
Chieftain and such undertakings (aggregating their interest) have
an interest of more than 20 per cent. of the voting or equity
capital or equivalent
"Wider Redhall Group" Redhall and the subsidiaries and subsidiary undertakings of
Redhall and associated undertakings and any other body corporate,
partnership, joint venture or person in which Redhall and such
undertakings (aggregating their interests) have an interest of
more than 20 per cent. of the voting or equity capital or
equivalent
For the purposes of this announcement, "parent undertaking", "subsidiary undertaking", "associated undertaking" and "undertaking" have
the meanings given by CA 1985 (but for this purpose ignoring paragraph 20(1)(b) of schedule 4A of CA 1985).
All times referred to are London time unless otherwise stated
This information is provided by RNS
The company news service from the London Stock Exchange
END
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