The Boards of Carillion and Alfred McAlpine are pleased to announce that agreement has been reached on the terms of a recommended proposal whereby Carillion will acquire, for shares and cash, the entire issued and to be issued ordinary share capital of Alfred McAlpine.
Highlights:
* Recommended shares and cash Acquisition valuing each Alfred McAlpine Share at 558 pence
* Consideration for each Alfred McAlpine Share is 1.08 New Carillion Shares valued at 392.3 pence (based on the Closing Price of 363.25 pence per Carillion Share on 7 December 2007, the last Business Day before this announcement) and 165.4 pence in cash, with a Mix and Match Facility and Loan Notes available
* Values Alfred McAlpine’s existing issued ordinary share capital at approximately £572 million
* Creates one of the UK's largest support services and construction companies with an aggregate revenue of approximately £4.7 billion and combines two companies with an excellent strategic fit
- potential to deliver significant value for both Carillion and Alfred McAlpine Shareholders by generating significant cost synergy benefits and enhancing operational performance
- creates a leading support services group serving both public and private sector customers
- enhanced capability to provide integrated solutions due to the complementary skills of Carillion and Alfred McAlpine in private finance, design, construction, maintenance and support services
- Alfred McAlpine’s construction business will fit with Carillion's skills and resources and the businesses will together continue to target higher margin projects
- creates enhanced positions in a wide range of UK growth markets
- enhances management resources, particularly the number of people available with the skills required to support Carillion’s major growth opportunities in the Middle East
* Expected to achieve an annual running rate of cost savings of £30 million by the end of 2009 (the first full year after completion of the Acquisition) and to deliver materially enhanced earnings in that year (see Note 1)
* Acquisition price of 558 pence represents a premium of approximately:-
- 24 per cent. to the Closing Price of 448.5 pence for each Alfred McAlpine Share on 1 August 2007, the last Business Day prior to the announcement of demerger plans by Alfred McAlpine; and
- 5 per cent. to the Closing Price of 532.0 pence per Alfred McAlpine Share on 15 October 2007, the last Business Day prior to Alfred McAlpine announcing that it had received an approach from Carillion
* Holders of New Carillion Shares following completion of the Acquisition will receive the Carillion final dividend for the year to 31 December 2007
* Irrevocable undertakings have been received from Alfred McAlpine Directors and letters of intent have been received from Alfred McAlpine Shareholders in respect of 308,488 Alfred McAlpine Shares and 18,045,264 Alfred McAlpine Shares respectively, representing, in aggregate, approximately 17.9 per cent. of the existing issued ordinary share capital of Alfred McAlpine
* It is intended that the Acquisition will be effected by way of a scheme of arrangement of Alfred McAlpine, although Carillion reserves the right in its absolute discretion to implement the Acquisition by way of an Offer, subject (if required) to agreement with the Panel
* Carillion also announces expected growth in underlying earnings per share (see Note 2) in 2007 of at least 20 per cent. compared to 2006 (see Note 3) and the Carillion Board expects the Carillion Group’s strong momentum to continue in 2008 and over the medium term
Commenting on the Acquisition, Philip Rogerson, Chairman of Carillion said:
“The acquisition of Alfred McAlpine represents a further step in Carillion's development and its successful strategy for sustainable and profitable growth.
There is an excellent strategic fit between the two companies and the combined group will be one of the UK's leading support services businesses with enhanced capabilities in providing integrated solutions and construction services. We are confident this transaction can deliver significant value for the shareholders of the Enlarged Group.'
Commenting on the Acquisition, Roger Urwin, Chairman of Alfred McAlpine said:
'Over the past five years we have repositioned Alfred McAlpine into a valuable support services group, with leading positions in a number of growth markets. Carillion's offer recognises this value and gives our shareholders, employees and customers the opportunity to share in the future success of the Enlarged Group.'
Lazard is acting as financial adviser to Carillion. Morgan Stanley and Oriel Securities are acting as joint corporate brokers to Carillion.
JPMorgan Cazenove and Tricorn Partners are acting as joint financial advisers to Alfred McAlpine. JPMorgan Cazenove is also acting as corporate broker to Alfred McAlpine.
This summary should be read in conjunction with, and is subject to, the full text of the announcement set out in Part II. In particular, the Acquisition is subject to the conditions set out in Appendix I to this announcement. Certain information relating to the Profit Forecast is included in Appendix II to this announcement. The bases and sources of certain financial information contained in this announcement are set out in Appendix III. Certain definitions and terms used in this announcement are set out in Appendix IV.
Please visit the presentation section to see the full announcement.
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