RNS Number:6747Q
Red Apple Investments, LLC
08 October 2003
Not for release, publication or distribution in or into the United States,
Canada, Japan or Australia.
RED APPLE INVESTMENTS LLC
RULE 9 CASH ONLY OFFER FOR
INVESTEC EUROPEAN GROWTH & INCOME TRUST LIMITED
8 October 2003
A. Introduction
Red Apple Investments LLC ("Red Apple") announces the terms of a mandatory cash
offer required under Rule 9 of the City Code on Takeovers and Mergers (the
"Code") to acquire the entire issued ordinary share capital of Investec European
Growth & Income Trust Limited ("Investec European") not already owned by the
Concert Parties (see below). Red Apple is a recently incorporated Delaware
limited liability company which has issued membership interests to Brookdale
Global Opportunity Fund and Brookdale International Partners, L.P.. The Manager
of Red Apple, for the purposes of the laws of the State of Delaware, is
Professor Andrew Weiss.
Red Apple is or is deemed to be acting in concert with each of Brookdale Global
Opportunity Fund ("BGO"), Brookdale International Partners, L.P. ("BIP"), Weiss
Asset Management, LLC, Weiss Capital, LLC and Professor Andrew Weiss for the
purposes of the Code (together the "Concert Parties").
BGO and BIP have today acquired respectively 1,650,000 and 3,850,000 ordinary
shares of 0.1 pence each in Investec European ("Ordinary Shares") (together the
"Acquisition").
The Acquisition brings the total number of shares held by the Concert Parties to
25,373,000 Ordinary Shares out of a total of 66,250,000 issued Ordinary Shares
representing 38.3 per cent. of the Ordinary Share capital. Taken together, the
Concert Parties' shareholdings carry 38.3 per cent. of the voting rights of
Investec European for the purposes of Rule 9 of the Code.
The requirement to make an offer under Rule 9 of the Code is triggered by the
Acquisition. Red Apple is to make an offer for all of the issued and to be
issued Ordinary Shares not already owned by the Concert Parties.
B. The Cash Only Offer
The Ordinary Shares are the only class of equity share capital of Investec
European. The Code requires Red Apple to make an offer for the Ordinary Shares.
No offer is being made by Red Apple for the zero dividend preference shares of
0.1 pence each in Investec European (the "ZDP Shares") and Red Apple currently
has no intention of making an offer for the ZDP Shares.
Red Apple will offer to acquire all of the Ordinary Shares not already owned by
the Concert Parties (the "Offer"), which amount to 40,877,000 Ordinary Shares,
in total representing approximately 61.7 per cent. of the Investec European
existing issued Ordinary Share capital, on and subject to the terms set out
herein, and to be set out in an offer document (the "Offer Document") and form
of acceptance (the "Form of Acceptance"), on the following basis:
For each Ordinary Share 3.25 pence in cash
The cash consideration values the whole of the existing issued Ordinary Share
capital of Investec European at approximately #2,153,125 and represents a
premium of 333 per cent. over the bid price of an Ordinary Share as at close of
business on 7 October 2003.
The Offer will extend to all Ordinary Shares (excluding those already held by
the Concert Parties) which are unconditionally allotted or issued prior to the
time at which the Offer closes (or such earlier date as Red Apple may, subject
to the Code or with the consent of the Panel, decide).
Ordinary Shares will be acquired by Red Apple fully paid and free from all
liens, equities, charges, encumbrances, rights of pre-emption and other third
party rights and interests of any nature whatsoever and together with all of the
rights now and hereafter attaching thereto, including the right to all dividends
and other distributions hereafter declared, made or paid.
In accordance with Rule 9.5 of the Code the offer price is not less than the
highest price paid by Red Apple and/or the other Concert Parties for Ordinary
Shares in the 12 months prior to the commencement of the offer period on 8
October 2003 and in the period since that date but prior to this announcement.
C. Financing of the Offer
The bankers to Red Apple, Boston Private Bank and Trust Company, are satisfied
that sufficient resources are available to Red Apple to satisfy full acceptance
of the Offer, which would involve a maximum cash payment of approximately
#1,328,503. Boston Private Bank and Trust Company has given and not withdrawn
its consent to the issue of this announcement with the inclusion in it of
references to its name in the form and context in which it appears.
D. Information on Red Apple and the Concert Parties
Red Apple is a Delaware limited liability company which was formed on 26
September 2003 with registration number EIN 20-0254773. The registered office
of Red Apple is at the offices of Corporation Service Company, 2711 Centerville
Road, Suite 400, Wilmington, DE 19808, USA. Red Apple has issued membership
interests to Brookdale Global Opportunity Fund and Brookdale International
Partners, L.P in the ratio of 30 per cent. and 70 per cent. respectively.
BGO is an exempted open-end company incorporated and existing under the
Companies Law of the Cayman Islands. It was originally incorporated in 1995 as
the Czech Value Fund to operate as a closed-end investment company to take
advantage of investments in the Czech Republic. BGO became an open-ended fund
on 30 September 2000 and its investment mandate was expanded to permit it to
invest globally, particularly in closed-end funds. On 14 August 2000 BGO was
registered as a mutual fund under Cayman Islands law. Weiss Capital, LLC, a
Delaware limited liability corporation, is BGO's investment manager and is
responsible for the overall management of BGO's investment operations. As at 31
August 2003 BGO had net assets of approximately US$43,000,000.
BIP was organised and commenced investment operations as a New York limited
partnership in October 1994. It was previously named Scarsdale International
and (until 14 July 2000) Manhattan International Partners, L.P.. Since 15 July
2003 the general partner of BIP has been Weiss Asset Management, LLC, which is
responsible for the business and affairs of BIP, including the investment of its
assets. BIP's manager is Weiss Capital, LLC. As at 31 August 2003 BIP had net
assets of approximately US$115,000,000. Professor Andrew Weiss has been solely
responsible for BIP's investment decisions since October 1994.
Weiss Asset Management, LLC is a Delaware limited liability company which
replaced The Brookdale Group Ltd as the general partner of Brookdale
International Partners, L.P. on 15 July 2003. Weiss Capital LLC, replaced the
Brookdale Group Ltd as the investment manager of Brookdale Global Opportunity
Fund on 1 July 2003. Further, Weiss Capital LLC replaced The Brookdale Group
Ltd as manager of Brookdale International Partners, L.P. on 15 July 2003. The
sole member of Weiss Asset Management, LLC is Professor Andrew Weiss. The only
funds under management of Weiss Capital LLC, and Weiss Asset Management LLC are
Brookdale Global Opportunity Fund and Brookdale International Partners, L.P..
Weiss Asset Management, LLC and Weiss Capital LLC, manage investments in more
than 50 countries through investments in over 200 investment trusts or similarly
structured vehicles. The investment approach is a disciplined value-oriented
approach. The portfolios of Brookdale International Partners L.P. and Brookdale
Global Opportunity Fund have a large proportion of their assets invested in
closed-end funds and similar vehicles that trade and invest outside of the USA.
The criterion for investment decisions is whether the investment increases the
expected risk-adjusted returns for an investor in the funds, net of expenses and
performance fees.
Andrew Weiss received his Ph.D. in Economics with Distinction from Stanford
University and was elected a fellow of the Econometric Society in 1989. He
graduated with honors from Williams College and was a Woodrow Wilson Fellow. He
is currently on leave as a tenured professor at Boston University. He has been
actively investing in stocks since 1976. He is the Manager of Red Apple and
Pomegranate Investments LLC. Professor Weiss is also on the board of directors
of the Romania Growth Fund. Starting in 1991, Professor Weiss was the investment
advisor to Brookdale Equity Partners, L.P. a diversified hedge fund with a
similar strategy to that employed by Brookdale International Partners L.P. He
was the investment advisor to BIP from its incorporation in 1994, until 15 July
2003 when Weiss Capital LLC was appointed manager. He has lectured at numerous
major universities, and international organisations, and is the author of over
45 articles published in professional journals. His performance has been the
topic of featured articles in Forbes and Micropal.
As at 7 October 2003 (being the last business day prior to the release of this
announcement) the Concert Parties held 16,000 ZDP Shares out of a total of
8,204,150 issued ZDP Shares, representing 0.19 per cent. of the ZDP Share
capital.
E. Reasons for the Offer
The Offer is mandatory under Rule 9 of the Code and is conditional only on
receiving acceptances which, together with the Ordinary Shares already owned by
the Concert Parties, amount to more than 50 per cent. of the voting rights of
Investec European's issued equity share capital. In accordance with Rule 9 of
the Code, the Ordinary Shares will be the only class of shares used for the
purposes of calculating whether the Offer becomes unconditional as to
acceptances.
Red Apple will seek a recommendation of the Offer from the Board of Directors of
Investec European. Obtaining its recommendation is not, however, a condition of
the Offer.
F. General
Save as disclosed in this announcement, as at 7 October 2003 (being the last
business day prior to the release of this announcement) neither Red Apple nor
any person acting or deemed to be acting in concert with Red Apple, owns or
controls any shares in Investec European or has any options or derivatives
referenced thereto.
The value of the Offer has been calculated on the basis of 66,250,000 Ordinary
Shares in issue as at the date of this announcement.
The Offer Document and the Form of Acceptance, setting out full details of the
Offer, will be despatched as soon as practicable but in any event within 28 days
of the date of this announcement. In accordance with the Code, the Offer will
be subject to the further terms to be set out in the Offer Document and in the
Form of Acceptance.
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 subject
to the laws of any jurisdiction other than the United Kingdom should inform
themselves about and observe any applicable legal or regulatory requirements.
The Offer will not be made, directly or indirectly, in or into, or by use of the
mails or any means or instrumentality (including, without limitation,
telephonically or electronically) or interstate or foreign commerce of, or any
facilities of a national securities exchange of, the United States, Canada,
Australia or Japan. Accordingly, copies of this announcement are not being, and
must not be, mailed, forwarded or otherwise distributed or sent in or into the
United States, Canada, Australia or Japan.
This announcement does not constitute an offer or an invitation to purchase or
subscribe for any securities.
This announcement constitutes a communication by a body corporate in respect of
a transaction to acquire or dispose of shares in a body corporate other than an
open-ended investment company or is entered into for the purposes of such an
acquisition or disposal in either case, the object of which transaction may
reasonably be regarded as being the acquisition of day to day control of the
affairs of the body corporate.
Attention is drawn to Rule 8.3 of the Code under which the dealings during an
offer period in "relevant securities" of every person who owns or controls, or
will own or control in consequence of any dealing (directly or indirectly), 1
per cent. of any class of such securities, and also the dealings of any other
person through whom such ownership or control is derived, must be publicly
disclosed. The Rule does not apply to recognised market makers dealing in that
capacity, but relevant securities comprised in investment accounts managed on a
discretionary basis are treated as controlled by the managers. "Relevant
Securities" include, in essence, the securities of Investec European for which
the Offer is made, any equity share capital of Investec European or Red Apple,
any securities carrying conversion or subscription rights into, options over and
derivatives referenced to, any of the foregoing and a dealing includes the
taking, granting or exercising of any option (including a traded option), the
exercise of any such conversion or subscription rights, or the acquisition of,
entering into, closing out, exercise of rights under, or variation of the
derivative. Disclosure must be made not later than 12 noon on the business day
following the date of the transaction and is to be made to the company
announcement office of the London Stock Exchange and a copy must be faxed to the
Panel. This is only a summary of the Rule. Further information is to be found
in the Code and can be obtained from the Panel. Telephone 020 7638 0129, Fax
020 7256 9386 or from the Panel's website at www.thetakeoverpanel.org.uk.
Unless otherwise stated, all financial information in this announcement has been
based on the relevant figures, obtained from Bloomberg as at the close of
business on 7 October 2003 (the latest practicable date prior to the
announcement of the Offer). All quotations for Ordinary Shares stated in this
announcement are taken as at the close of business on the relevant date.
G. Responsibility
Andrew Weiss, the Manager of Red Apple, accepts responsibility for the
information contained in this announcement. To the best of the knowledge and
belief of the Manager of Red Apple (who has taken all reasonable care to ensure
that such is the case), the information contained in this announcement is in
accordance with the facts and does not omit anything likely to affect the import
of such information.
ENQUIRIES
Red Apple Investments LLC
Eitan Milgram/Andrew Weiss - +1 (617) 778-7780
APPENDIX
CONDITION AND FURTHER TERMS OF THE OFFER
1. The Offer is subject to valid acceptances being received (and not,
where permitted, withdrawn) by 3.00 p.m. on the first closing date of the Offer
(or such later time(s) and/or date(s) as Red Apple may, subject to the Code,
decide) in respect of such number of Ordinary Shares which, together with the
Ordinary Shares acquired or agreed to be acquired by Red Apple or parties acting
in concert with it before or during the Offer Period, will result in Red Apple
and any party acting in concert with it holding Ordinary Shares which together
carry more than 50 per cent. of the voting rights normally exercisable at
general meetings of Investec European, including for this purpose, to the extent
(if any) required by the Panel, any voting rights attaching to Ordinary Shares
which are unconditionally allotted or issued before the Offer becomes
unconditional whether pursuant to the exercise of conversion or subscription
rights or otherwise. For the purposes of this paragraph 1, the "Offer Period"
shall be deemed to have commenced on 8 October 2003.
2. The Offer will extend to all Ordinary Shares other than the Ordinary
Shares already owned by Red Apple and any person acting or deemed to be acting
in concert with it.
3. 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 obtain advice about and observe
any legal or regulatory requirements applicable to those jurisdictions.
4. The Offer is not being made directly or indirectly in or into the
United States, Canada, Japan or Australia: accordingly, copies of this
announcement, the Offer Document and any other documents relating to the Offer
are not being, and must not be, mailed or otherwise distributed or sent in or
into the United States, Canada, Japan or Australia.
5. If the acquisition of Ordinary Shares pursuant to the Offer is referred
to the Competition Commission by the Secretary of State for Trade and Industry
on or before the later of 3.00 p.m. on the first closing date of the Offer and
the date on which the Offer becomes or is declared unconditional as to
acceptances, the Offer will lapse. If the Offer so lapses it will cease to be
capable of further acceptance and accepting ordinary shareholders and Red Apple
will cease to be bound by forms of acceptance submitted before the time at which
the Offer lapsed.
6. The Ordinary Shares which are the subject of the Offer will be
acquired, fully paid, free from all liens, charges, encumbrances, rights of
pre-emption and any other third party rights of any nature whatsoever and
together with all rights now or hereafter attaching thereto, including the right
to receive and retain in full all dividends and other distributions, if any,
declared, made or paid after the date hereof.
7. The Offer will comply with the rules and regulations of the London
Stock Exchange, the Channel Islands Stock Exchange and the provisions of the
Code. The Offer and any acceptances under it will be governed by English Law
and be subject to the jurisdiction of the courts of England.
END
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