TIDMNWS TIDMDWN
RNS Number : 9612H
Smiths News PLC
07 June 2011
Part I
Not for release, publication or distribution, in whole or in
part, directly or indirectly, in, into or from any jurisdiction
where to do so would constitute a violation of the relevant laws or
regulations of such jurisdiction.
FOR IMMEDIATE RELEASE 7 June 2011
Recommended cash offers by
Smiths News PLC
for
Dawson Holdings PLC
The Boards of Smiths News and Dawson are pleased to announce
that they have reached agreement on the terms of recommended cash
offers to be made by Smiths News for the entire issued and to be
issued share capital of Dawson.
Dawson's largest trading division, "Dawson Books", is a leading
supplier of books to Universities and further education
institutions around the world. This business represents an
excellent opportunity for Smiths News to expand the scope of its
book business, Bertrams, providing instant access to new markets
and an established eBook platform whilst adding momentum and
infrastructure to support further growth opportunities
internationally. Separately, Smiths News remains focused on its
main strategic goal of delivering sustainable growth through its
previously stated diversification strategy, actively exploring
acquisition targets in specialist distribution.
Highlights
-- Recommended cash offers, including an offer of 17.722 pence
per Dawson Ordinary Share.
-- Following the restructuring of the Dawson Group in 2009 and
its continuing successful turnaround, these offers provide the
certainty of a full and immediate cash exit at a substantial
premium for Dawson's Shareholders, avoiding the risks and costs
associated with continuing to run three separate divisions as a
small listed company.
-- Smiths News believes that the acquisition of Dawson would
generate significant value for Smiths News shareholders:
- the acquisition is immediately earnings enhancing, even before
adding synergy benefits;
- annual synergy benefits of GBP3.8 million are achievable by
the end of Smiths News financial year ending 30 August 2014;
- the net total cash outlay for the acquisition of GBP20 million
represents a full synergy EBITDA multiple of 3.4 times; and
- the acquisition is expected to generate returns significantly
in excess of Smith News's cost of capital.
-- Smiths News believes that there is a compelling strategic
rationale for the acquisition of Dawson, including:
- expanding the scope of Bertrams' activities into academic
libraries, building on the skills and experience of Bertrams'
public library activities;
- combining both Dawson Books and Bertrams increases Bertrams'
revenues by 32 per cent. on a proforma basis, delivering scale
benefits to the Enlarged Group;
- Dawson's eBook system provides Bertrams' library business and
Bertrams' wholesale business with instant access to an established
digital platform; and
- the combination of Dawson's and Bertrams' international
footprints offers opportunities to increase and accelerate overseas
penetration by all of the Enlarged Group's divisions, and
- the acquisition of the profitable divisions of Dawson Media
Direct and Dawson Marketing Services brings two new profitable
businesses into the Enlarged Group.
-- An Offer will also be made for the unlisted, non-voting
Dawson B Ordinary Shares on the basis of 17.722 pence in cash for
every Dawson B Ordinary Share.
-- The Dawson Group has agreed a full settlement of all
outstanding payments and liabilities with Surridge Dawson, Solent
and the liquidators of Surridge Dawson and Solent, conditional upon
completion of the Offers, in consideration for the payment to
Surridge Dawson by the Dawson Group of GBP3.338 million following
the completion of the Offers (the "Liquidator Settlement").
-- Together the Offers value the issued share capital of Dawson
at approximately GBP17.262 million and, taking account of the
Liquidator Settlement and the minimum of GBP600,000 in surplus cash
that the Board of Smiths News expects Dawson to have at completion,
will result in net total cash outlay by Smiths News of GBP20.0
million, assuming the Offers are accepted in full.
-- The Dawson Directors unanimously recommend Dawson's
Shareholders accept the Offers as they have irrevocably undertaken
to do in respect of their entire beneficial holdings amounting to
516,476 Dawson Ordinary Shares, representing, in aggregate,
approximately 0.7 per cent. of the existing issued ordinary share
capital of Dawson.
-- In addition to the irrevocable undertakings received from the
Dawson Directors, Smiths News has received irrevocable undertakings
to accept (or to procure the acceptance of) the Ordinary Offer in
respect of 15,534,493 Dawson Ordinary Shares, representing
approximately 21.6 per cent. of the existing issued ordinary share
capital of Dawson.
-- Smiths News has received an irrevocable undertaking to accept
the B Ordinary Offer in respect of 25,623,586 Dawson B Ordinary
Shares, representing 100 per cent. of the existing issued B
ordinary share capital of Dawson.
Commenting on the Offers, Mark Cashmore, Chief Executive of
Smiths News said:
"We are delighted to be announcing the acquisition of Dawson,
which represents an excellent opportunity to strengthen one of our
core businesses. The transaction creates immediate value for our
shareholders whilst we continue to focus on our long term strategy
to diversify revenues and profits."
Commenting on the Offers, Hugh Cawley, Chief Executive of Dawson
said:
"The Board of Dawson believes that Smiths News's offers, by
providing the certainty of a cash offer at a significant premium to
Dawson's share price, is an excellent outcome for shareholders.
This follows the Board's successful restructuring and turnaround
plan, which first rescued the Dawson Group from the risk of
administration and more recently returned the group to profit
growth, culminating in a number of expressions of interest being
received from potential buyers of the whole or parts of the
business.
The combination will provide our businesses with the opportunity
to grow during the next stage of their development as part of an
enlarged group, with the benefit of an expanded offering and
international footprint."
This summary should be read in conjunction with, and is subject
to, the full text of the announcement set out in Part II including
the Appendices. In particular, the Offers are subject to the
Conditions and certain further terms set out in Appendix I to this
announcement and the terms and conditions set out in the Offer
Document when issued. Appendix II contains details of the
irrevocable undertakings given to Smiths News. Appendix III
contains the definitions of certain terms used in this summary and
the announcement set out in Part II.
Enquiries:
Smiths News
Nick Gresham Tel: 0845 123 0000
Oriel Securities (financial adviser to Smiths News)
David Arch Tel: 020 7710 7616
Buchanan (PR adviser to Smiths News)
Jeremy Garcia Tel: 020 7466 5000
Dawson
Hugh Cawley, Chief Executive Tel: 0203 167 4100
KPMG Corporate Finance (financial adviser to Dawson)
Christian Mayo Tel: 0113 231 3179
Chris Belsham Tel: 0161 246 4548
MHP Communications (PR adviser to Dawson)
Reg Hoare Tel: 020 3128 8100
Analyst briefing
Smiths News will hold a briefing for analysts today at 10am at
the offices of Buchanan, 107 Cheapside, EC2V 6DN.
Further information
This announcement is not intended to and does not constitute, or
form part of, any offer to sell or subscribe for or an invitation
to purchase or subscribe for any securities or the solicitation of
any vote or approval in any jurisdiction pursuant to the Offers or
otherwise, nor shall there be any sale, issuance or transfer of
securities of Dawson in any jurisdiction in contravention of
applicable law. This announcement does not constitute a prospectus
or a prospectus equivalent document.
Any acceptance or other response to the Offers should only be
made on the basis of information contained in the Offer Document
(which will contain the full terms and conditions of the Offers)
and, if you hold Dawson Shares in certificated form, the Form of
Acceptance. Dawson Shareholders are advised to read the formal
documentation in relation to the Offers carefully once it has been
dispatched.
Please be aware that addresses, electronic addresses and certain
other information provided by Dawson Shareholders, persons with
information rights and other relevant persons in connection with
the receipt of communications from Dawson may be provided to Smiths
News during the offer period as required under Section 4 of
Appendix 4 of the Code.
Oriel Securities, which is authorised and regulated in the
United Kingdom by the Financial Services Authority, is acting for
Smiths News and no-one else in connection with the Offers and will
not be responsible to anyone other than Smiths News for providing
the protections afforded to clients of Oriel Securities nor for
providing advice in relation to the Offers. Neither Oriel
Securities nor any of its subsidiaries, branches or affiliates owes
or accepts any duty, liability or responsibility whatsoever
(whether direct or indirect, whether in contract, in tort, under
statute or otherwise) to any person who is not a client of Oriel
Securities in connection with this announcement, any statement
contained herein or otherwise.
KPMG Corporate Finance, a division of KPMG LLP which is
authorised and regulated by the Financial Services Authority for
investment business activities, is acting exclusively for Dawson as
financial adviser in relation to the Offers and is not acting for
any other person in relation to such Offers. KPMG Corporate Finance
will not be responsible to anyone other than Dawson for providing
the protections afforded to its clients or for providing advice in
relation to the contents of this announcement or any offer or
arrangements referred to herein.
Overseas jurisdictions
The Offers are not being made directly or indirectly, and
securities of Dawson will not be accepted for purchase from or on
behalf of any shareholder, in any jurisdiction in which the making
or acceptance thereof would not be in compliance with the
securities or other laws or regulations of such jurisdiction or
would require any registration, approval or filing with any
regulatory authority not expressly contemplated by the terms of
this announcement.
The availability of the Offers in, and the release, publication
or distribution of this announcement in or into, jurisdictions
other than the United Kingdom may be restricted by law. Therefore
persons into whose possession this announcement comes who are not
resident in the United Kingdom should inform themselves about, and
observe, any applicable restrictions. Dawson Shareholders who are
in any doubt regarding such matters should consult an appropriate
independent adviser in the relevant jurisdiction without delay. Any
failure to comply with such restrictions may constitute a violation
of the securities laws of any such jurisdiction.
In particular, as described in Appendix I, the Offers will not
be made, directly or indirectly, in or into, or by the use of the
mails or any means of instrumentality (including, without
limitation, telephonically or electronically) of interstate or
foreign commerce of, or any facilities of a national securities
exchange of Canada, Australia or Japan. Accordingly, except as
required by applicable law, copies of this announcement are not
being, and may not be, mailed or otherwise forwarded, distributed
or sent in, into or from Canada, Australia or Japan. Persons
receiving this announcement (including without limitation nominees,
trustees or custodians) must not forward, distribute or send it
into Canada, Australia or Japan.
This announcement has been prepared for the purposes of
complying with English law and the Code and the information
disclosed may not be the same as that which would have been
disclosed if this announcement had been prepared in accordance with
the laws of jurisdictions outside the United Kingdom.
Notice to US Shareholders of Dawson
Each US shareholder of Dawson is urged to consult with his
independent professional adviser regarding any acceptance of the
Offers including, without limitation, to consider the tax
consequences associated with such shareholder's election to
participate in the Offers.
This document does not constitute an offer of securities for
sale in the United States or an offer to acquire securities in the
United States. No offer to acquire securities has been made, or
will be made, directly or indirectly, in or into, or by use of the
mails, any means or instrumentality of interstate or foreign
commerce or any facilities of a national securities exchange of,
the United States or any other country in which such offer may not
be made other than (i) in accordance with the tender offer
requirements under the US Exchange Act or the securities laws of
such other country, as the case may be; or (ii) pursuant to an
available exemption from such requirements.
The Offers are for the securities of a corporation organised
under the laws of England and Wales and are subject to the
procedure and disclosure requirements of the United Kingdom, which
are different from those of the United States. The Offers are being
made in the United States pursuant to Section 14(e) of, and
Regulation 14E under, the US Exchange Act and otherwise in
accordance with the requirements of the Code. Accordingly, the
Offers are subject to certain disclosure and other procedural
requirements which may differ from those applicable under US
domestic tender offer procedures and laws.
To the extent permitted by applicable law, in accordance with
the Code and normal UK market practice and in compliance with Rule
14e-5 under the US Exchange Act, Smiths News and its affiliates or
their nominees or brokers (acting as agents) may from time to time
during the period in which the Offers remain open for acceptance
make certain purchases of, or arrangements to purchase, shares or
other securities in Dawson, otherwise than pursuant to the Offers,
such as in open market or privately negotiated purchases. Any such
purchases, or arrangements to purchase, will be undertaken to the
extent permitted by applicable law and will comply with all
applicable UK rules, including the Code and the rules of the London
Stock Exchange, as well as with Rule 14e-5 under the US Exchange
Act. In addition, in accordance with, and to the extent permitted
by, the Code and normal UK market practice, Oriel Securities
serving as financial advisor to Smiths News and its affiliates may
make purchases of, or arrangements to purchase, securities of
Dawson and various related derivative transactions in the normal
and ordinary course of their business. Information regarding such
activities which is required to be made public in the United
Kingdom pursuant to the Code will be reported to a Regulatory
Information Service and will be available on the London Stock
Exchange website at www.londonstockexchange.com. This information
will also be publicly disclosed in the United States to the extent
that such information is made public in the United Kingdom.
Disclosure requirements
Under Rule 8.3(a) of the Code, any person who is interested in 1
per cent. or more of any class of relevant securities of Dawson or
of any paper offeror (being any offeror other than an offeror in
respect of which it has been announced that its offer is, or is
likely to be, solely in cash) must make an Opening Position
Disclosure following the commencement of the offer period and, if
later, following the announcement in which any paper offeror is
first identified.
An Opening Position Disclosure must contain details of the
person's interests and short positions in, and rights to subscribe
for, any relevant securities of each of (i) Dawson and (ii) any
paper offeror(s). An Opening Position Disclosure by a person to
whom Rule 8.3(a) applies must be made by no later than 3.30 pm
(London time) on the 10th Business Day following the commencement
of the offer period and, if appropriate, by no later than 3.30 pm
(London time) on the 10th Business Day following the announcement
in which any paper offeror is first identified. Relevant persons
who deal in the relevant securities of Dawson or of a paper offeror
prior to the deadline for making an Opening Position Disclosure
must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes,
interested in 1 per cent. or more of any class of relevant
securities of Dawson or of any paper offeror must make a Dealing
Disclosure if the person deals in any relevant securities of Dawson
or of any paper offeror. A Dealing Disclosure must contain details
of the dealing concerned and of the person's interests and short
positions in, and rights to subscribe for, any relevant securities
of each of (i) Dawson and (ii) any paper offeror, save to the
extent that these details have previously been disclosed under Rule
8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies
must be made by no later than 3.30 pm (London time) on the Business
Day following the date of the relevant dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of Dawson or a paper offeror, they
will be deemed to be a single person for the purpose of Rule
8.3.
Opening Position Disclosures must also be made by Dawson and by
any offeror and Dealing Disclosures must also be made by Dawson, by
any offeror and by any persons acting in concert with any of them
(see Rules 8.1, 8.2 and 8.4).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Takeover Panel's website at www.thetakeoverpanel.org.uk,
including details of the number of relevant securities in issue,
when the offer period commenced and when any offeror was first
identified. If you are in any doubt as to whether you are required
to make an Opening Position Disclosure or a Dealing Disclosure, you
should contact the Panel's Market Surveillance Unit on +44 (0)20
7638 0129.
Not a profit forecast
The financial information contained in this announcement is
based on publicly available historical financial information of
Smiths News and Dawson and is not intended to be a profit forecast
or profit estimate under the UK Listing, Prospectus, Disclosure and
Transparency Rules or under the Code or any other applicable rules.
This announcement contains earnings enhancement statements which
are not intended to be profit forecasts and so should not be
interpreted to mean that earnings per share will necessarily be
greater than those for the relevant preceding financial period.
Forward-looking statements
This announcement contains certain forward-looking statements,
including statements regarding Smith News's and Dawson's plans,
objectives and expected performance. Such statements relate to
events and depend on circumstances that will occur in the future
and are subject to risks, uncertainties and assumptions. There are
a number of factors which could cause actual results and
developments to differ materially from those expressed or implied
by such forward looking statements, including, among others the
enactment of legislation or regulation that may impose costs or
restrict activities; the re-negotiation of contracts or licences;
fluctuations in demand and pricing in the industry; fluctuations in
exchange controls; changes in government policy and taxations;
industrial disputes; war and terrorism. These forward-looking
statements speak only as at the date of this announcement.
Synergies
The expected synergies referred to in this announcement relate
to future actions and circumstances which, by their nature, involve
risks, uncertainties and other factors. As a result the synergies
referred to in this announcement may not be achieved and those
achieved could be materially different from those estimated.
Publication of this announcement
A copy of this announcement will be available subject to certain
restrictions relating to persons resident in the Restricted
Jurisdictions on Smith News's website www.smithsnews.co.uk and
Dawson's website www.dawson.co.uk.
The contents of Smith News's website and Dawson's website are
not incorporated into and do not form part of this
announcement.
Part II
Not for release, publication or distribution, in whole or in
part, directly or indirectly, in, into or from any jurisdiction
where to do so would constitute a violation of the relevant laws or
regulations of such jurisdiction.
FOR IMMEDIATE RELEASE 7 June 2011
Recommended cash offers by
Smiths News PLC
for
Dawson Holdings PLC
1. Introduction
The Boards of Smiths News and Dawson are pleased to announce
that they have reached agreement on the terms of recommended cash
offers to be made by Smiths News for the entire issued and to be
issued share capital of Dawson.
Dawson's largest trading division, "Dawson Books", is a leading
supplier of books to Universities and further education
institutions around the world. This business represents an
excellent opportunity for Smiths News to expand the scope of its
books business, Bertrams, providing instant access to new markets
and an established eBook platform whilst adding momentum and
infrastructure to support further growth opportunities
internationally.
Separately, Smiths News remains focused on its main strategic
goal of delivering sustainable growth through its previously stated
diversification strategy, actively exploring acquisition targets in
the field of specialist distribution.
The Ordinary Offer will be subject to the conditions and further
terms set out in Appendix I to this announcement and to be set out
in the Offer Document and will be made on the following basis:
for every Dawson Ordinary Share 17.722 pence in cash
The B Ordinary Offer for the unlisted, non voting B Ordinary
Shares will be subject to the conditions and further terms set out
in Appendix I to this announcement and to be set out in the Offer
Document and will be made on the following basis:
for every Dawson B Ordinary Share 17.722 pence in cash
Dawson believes that these Offers, following the restructuring
of the Dawson Group in 2009 and its continuing successful
turnaround, provide the certainty of a full and immediate cash exit
at a substantial premium for Dawson Shareholders, avoiding the
risks and costs associated with continuing to run three separate
divisions as a small listed company.
The Dawson Group has today entered into a settlement agreement
with Surridge Dawson, Solent and the liquidators of each of
Surridge Dawson and Solent which provides that all liabilities,
obligations and charges arising or given under the agreement
pursuant to which certain members of the Dawson Group acquired
certain business and assets from Surridge Dawson and all and any
other liabilities or claims owing to or arising in favour of
Surridge Dawson, Solent or the liquidators will be fully discharged
and released upon the Offers becoming or being declared
unconditional in all respects in consideration for the payment to
Surridge Dawson and Solent by the Dawson Group of GBP3.338 million
to be made within 15 Business Days of such date.
Together the Offers value the existing issued share capital of
Dawson at approximately GBP17.262 million and, taking account of
the Liquidator Settlement and the minimum of GBP600,000 in surplus
cash that the Board of Smiths News expects Dawson to have at
completion, will result in net total cash outlay by Smiths News of
GBP20.0 million, assuming the Offers are accepted in full.
2. Unanimous Dawson Board recommendation
The Dawson Directors, who have been so advised by KPMG Corporate
Finance, consider that the terms of the Offers are fair and
reasonable so far as the Dawson Shareholders are concerned. In
providing advice to the Dawson Directors, KPMG Corporate Finance
has taken into account the Dawson Directors' commercial
assessments.
The Dawson Directors unanimously recommend Dawson Shareholders
to accept the Offers, as they have irrevocably undertaken to do in
respect of their entire beneficial holdings amounting to 516,476
Dawson Ordinary Shares, representing, in aggregate, approximately
0.7 per cent. of the existing issued ordinary share capital of
Dawson.
3. Irrevocable undertakings
Smiths News has received irrevocable undertakings to accept (or
to procure the acceptance of) the Ordinary Offer in respect of
16,050,969 Dawson Ordinary Shares, representing approximately 22.4
per cent. of the existing issued ordinary share capital of Dawson,
further detail of which is set out below.
The Dawson Directors have given irrevocable undertakings to
accept (or to procure the acceptance of) the Ordinary Offer in
respect in respect of 516,476 Dawson Ordinary Shares, representing
approximately 0.7 per cent. of the existing issued ordinary share
capital of Dawson. These undertakings remain binding even in the
event of a higher offer by a third party in respect of Dawson.
The PPF has given irrevocable undertakings to accept the Offers
in respect in respect of 6,519,493 Dawson Ordinary Shares and
25,623,586 Dawson B Ordinary Shares, representing approximately 9.1
per cent. of the existing issued ordinary share capital of Dawson
and 100 per cent. of the existing issued B ordinary share capital
of Dawson respectively. These undertakings remain binding other
than where a higher offer is made by a third party in respect of
Dawson where such offer is in excess of 5 per cent. of the price of
the Ordinary Offer made by Smiths News.
Certain institutional shareholders of Dawson set out in Appendix
II of this announcement have given irrevocable undertakings to
accept (or to procure the acceptance of) the Ordinary Offer in
respect in respect of 9,015,000 Dawson Ordinary Shares,
representing approximately 12.6 per cent. of the existing issued
ordinary share capital of Dawson. These undertakings remain binding
other than where a higher offer is made by a third party in respect
of Dawson where such offer is in excess of 10 per cent. of the
price of the Ordinary Offer made by Smiths News.
Further details of the irrevocables are set out in Appendix II
of this announcement
4. Settlement Agreement with Surridge Dawson in liquidation
On 28 May 2009, the Dawson Group announced that it was
undertaking a reorganisation pursuant to which Dawson Books, Dawson
Media Direct and Dawson Marketing Services were incorporated as
wholly owned subsidiaries of the Dawson Group and they each
acquired certain assets and businesses from Surridge Dawson in
consideration for an initial payment of GBP5 million to Surridge
Dawson and further performance-related deferred consideration of up
to approximately GBP8 million (the "Reorganisation SPA").
The Dawson Group has today entered into a settlement agreement
with Surridge Dawson, Solent and the liquidators of each of
Surridge Dawson and Solent which provides that, all liabilities,
obligations and charges arising or given under the Reorganisation
SPA and all and any other liabilities or claims owing to or arising
in favour of Surridge Dawson, Solent or the liquidators will be
fully discharged and released upon an offer by, or on behalf of,
Smiths News for Dawson becoming or being declared unconditional in
all respects in consideration for the payment to Surridge Dawson
and Solent by the Dawson Group of GBP3.338 million to be made
within 15 Business Days of such date.
5. Information relating to Smiths News
General
Smiths News is the UK's largest wholesaler of newspapers,
magazines and one of the UK's leading suppliers of books. Smiths
News distributes approximately 73 million newspapers and magazines
a week. It has approximately 30,000 customers, 53 distribution
centres and over 4,500 employees.
Smiths News owns Bertrams, a leading wholesaler of books, which
was acquired by Smiths News in March 2009. For more than 40 years,
Bertrams (and its predecessors) has supplied books to retailers
large and small in the UK and overseas. Based in Norwich, Bertrams
employs over 400 staff at its distribution centre. It serves
independent booksellers and online retailers, with over two million
titles available to order. The Bertrams business comprises Bertrams
Books, the book wholesaler, Bertrams Library Services, a leading
public library supply business and Bertrams Publisher Services,
providing bespoke fulfilment services to publishers.
Smiths News's market capitalisation as at the close of business
on 6 June 2011 was GBP172.38 million.
Current trading and prospects
For the six month period to 28 February 2011, Smiths News's
profits before tax were GBP18.7 million and its turnover GBP872.3
million. As at 28 February 2011 Smiths News's shareholders' funds
were (GBP59.5) million including retained earnings of GBP213.5
million, and it had net borrowings of GBP57 million drawn down from
a finance facility of GBP135 million.
6. Information relating to Dawson
General
Dawson trades through three divisions: Dawson Books provides
academic books to Universities; Dawson Media Direct supplies
newspapers, magazines, digital and audio visual content to
airlines; and Dawson Marketing Services provides marketing point of
sale materials and fulfilment services.
Dawson Books is one of the leading academic and professional
library suppliers around the world. Dawson Books has built a
database of approximately sixteen million titles, with full
bibliographic information on each book. Its services include shelf
ready books to University and further education libraries,
technological enhancements to library book records and "Dawsonera",
its electronic book platform, which fully integrates with its
services for print.
Dawson Media Direct is an international media agency linking
airlines and media publishers to provide entertainment and
information to airline passengers. It provides newspapers,
magazines, movies and other audiovisual content to airlines
worldwide.
Dawson Marketing Services provides supply chain solutions for
the distribution of printed materials, primarily for point of sale
and direct mail marketing activities and for the fulfilment of
products sold via mail order or the internet.
Current trading and prospects
For the twelve month period to 30 September 2010, Dawson's
EBITDA and profit before tax (in each case before exceptional
items) were GBP2.0 million and GBP1.1 million respectively and its
turnover GBP78.4 million. As at 30 September 2010, Dawson's
shareholders' funds were GBP3.5 million and it had net cash of
GBP1.7 million.
For the six month period to 31 March 2011, Dawson's EBITDA and
profit before tax (in each case before exceptional items) were
GBP1.3 million and GBP0.9 million respectively and its turnover was
GBP39.3 million. As at 31 March 2011, Dawson's shareholders' funds
were GBP4.2 million and it had net cash of GBP4.2 million.
As set out in Dawson's half year report on 26 May 2011, the
continuation of economic uncertainty has not prevented the Dawson
Group from improving its performance markedly during the six month
period to 31 March 2011. Trading in the second half of the year to
date has begun well and is in line with Dawson management
expectations. Each of the Dawson businesses is profitable and cash
generative and operating from a stronger platform. Following an
encouraging start to the second half, the Dawson Directors remain
confident of the Dawson Group's strong performance in the second
half of the year.
7. Background to and reasons for the Offers
Dawson's largest trading division, Dawson Books, is a leading
supplier of academic books to Universities and further education
institutions around the world. It has a proven track record of
technical innovation aligned with strong customer service and
satisfaction. It supplies books to over 80 per cent. of the
Universities in the UK, has a database of approximately 16 million
titles and relationships with some 15,000 publishers.
The combination of Dawson Books and Bertrams will be
complementary, given Dawson Books' focus on supplying academic
books to academic libraries and Bertrams' focus on supplying public
libraries. The acquisition will therefore expand the scope of
Bertrams' activities into academic libraries, building on the
skills and experience of Bertrams' existing library activities.
In addition to Dawson's activities servicing academic
institutions within the UK, it has also developed an international
sales infrastructure, with around 40 per cent. of sales overseas
into more than 50 countries and with a physical presence in seven
countries. Accordingly, whilst the existing focus of Dawson Books
and Bertrams are predominantly in the UK, Smiths News believes
there to be a significant growth opportunity for the combined
businesses both generally through increasing sales of books
overseas and also through building Bertrams' international sales
via Dawson Books' sales infrastructure.
The Board of Smiths News believes that the breadth of services
offered, strong customer ethos and industry skills and experience
of the combined books businesses will offer a compelling
proposition for new and existing customers.
Combining Dawson Books and Bertrams increases Bertrams' revenues
by 32 per cent., on a proforma basis, delivering scale benefits to
the Enlarged Group, which the Board of Smiths News believes, along
with cost savings across Dawson's other businesses and head office,
will allow it to make annualised synergy benefits from the
acquisition of GBP3.8 million by its 2014 financial year end,
whilst at the same time continuing to improve customer service and
further invest in digital technology and business
infrastructure.
Dawson's eBook platform "Dawsonera" is one of the market leading
players, has won a number of awards, and is an integral part of the
academic library offering. It has benefited from around GBP1.2
million of development capital over the last three years and hosts
over 160,000 digital versions of academic titles on its platform.
The acquisition will give Bertrams' library services and Bertrams'
wholesale business instant access to a digital platform, creating
an attractive proposition for existing and new customers. Whilst
around 75 per cent. of UK universities use the Dawsonera platform,
eBook penetration of around five per cent of total spend on
materials by UK universities provides further growth
opportunities.
Dawson also operates two other profitable, cash generative
divisions:
- Dawson Media Direct which provides newspapers, magazines,
movies and other audio visual content to over 100 airlines
worldwide. It has also expanded its service offering into rail
services.
- Dawson Marketing Services which provides supply chain
solutions for the distribution of printed materials, primarily for
point of sale and direct marketing activities, and for the
fulfilment of products sold via mail order or the internet.
In the twelve months ended 30 September 2010, the combined
revenues for these two divisions were GBP34.3 million and they
generated EBITDA of GBP0.9 million. Whilst these divisions are not
a central part of the acquisition rationale, they are profitable
and cash generative standalone businesses and can add to the
creation of shareholder value for Smiths News.
Dawson's three divisions will add a further 17 countries to the
85 countries in which Beam currently trades. This combination of
Dawson's and Bertrams' international footprints offers
opportunities to increase and accelerate overseas penetration by
all of the Enlarged Group's divisions.
8. Significant financial benefits to Smiths News
In the twelve months ended 30 September 2010, Dawson generated
EBITDA (before exceptional items) of GBP2.0 million and the Board
of Dawson on 26 May 2011 confirmed that Dawson Group performance
for the first six months of the current financial year was
significantly ahead of the comparable period last year. The Board
of Smiths News expects that the transaction will be earnings
enhancing for Smiths News immediately before taking into account
synergies and before one off costs. The Board of Smiths News
expects to generate annualised synergy benefits of GBP2.5 million
by the end of the first full financial year post acquisition and a
full synergy saving of GBP3.8 million in the financial year ending
August 2014. The Board of Smiths expects one off costs to achieve
synergy savings and transaction costs to be approximately GBP4.8
million. The acquisition is expected to generate returns
significantly in excess of Smiths News's cost of capital with a
full synergy EBITDA multiple of 3.4 times.
Smiths News continues to actively explore acquisition
opportunities in the field of specialist distribution as part of
its diversification strategy.
9. Smiths News's intentions regarding Dawson and its
employees
The Board of Smiths News is currently considering a number of
proposals, set out below, based on its review of the information
provided to it during its due diligence process. The proposals
represent Smiths News's current intentions and are subject to
ongoing review as Smiths News becomes more familiar with the
operational detail of the business. Following the completion of the
acquisition Smiths News will finalise its proposals and associated
identified cost savings. The proposals would be subject to the
relevant obligations to consult with employees and/or their
representatives about any potential redundancies.
The Board of Smiths News currently proposes to combine the books
operations of Smiths News and Dawson to create a substantial
business in the distribution of books and associated services,
servicing store-based and online retailers, public and academic
libraries and publishers. In order for the enlarged business to
operate most effectively, the two operations would be consolidated
within Bertrams' existing Norwich facility and, at the appropriate
time for the business, Dawson Books' business and operations would
transfer to that facility. Under the proposal, Dawson's Rushden
warehouse would then close and Dawson Books' staff working at
Rushden would have the opportunity to transfer to Norwich and would
be encouraged to do so or potentially to other sites within the
Smiths News Group as considered appropriate.
The Board of Smiths News is also currently proposing to transfer
Dawson Media Direct's financial support functions carried out at
the Langley site either to Smiths News's Swindon or Bradford
offices. Smiths News would consider whether there were
opportunities for affected Dawson staff to transfer to Swindon,
Bradford and/or other Smiths News Group locations at the relevant
time. In addition the Board of Smiths News is also considering the
potential to transfer the staff and activities from Dawson Media
Direct's Birmingham and Manchester locations to Smiths News
locations in the same cities.
The Board of Smiths News proposes to close Dawson's head office
at Epsom and to absorb all functions within Smiths News's existing
infrastructure. As a result of this proposal, it is intended that
each member of the Dawson Board will resign as a director such
resignation taking effect on the date on which the Offers become or
are declared wholly unconditional, or shortly thereafter. The
executive director, Hugh Cawley, has signed a compromise agreement
which is conditional upon the Offers becoming or being declared
wholly unconditional which entitles him to payments based on his
contractual and statutory entitlements.
In relation to these proposals the affected Dawson Books' staff
and Dawson Media Direct staff who do not transfer, and all of the
Dawson head office staff, would be at risk of redundancy. There are
no other current proposals to make material changes to terms and
conditions of employment, location of places of business or the
redeployment of fixed assets.
Smiths News confirms that, following implementation of the
Offers, the existing contractual and statutory employment rights of
all Dawson employees, including in relation to pensions and
employee consultation in relation to potential redundancies, will
be fully safeguarded.
10. Financing arrangements
The consideration under the Offers will be financed by Smiths
News using its existing bank facilities.
Oriel Securities is satisfied that Smiths News has the necessary
financial resources available to satisfy full acceptance of the
Offers. Full acceptance of the Offers would involve a maximum cash
payment of approximately GBP17.262 million to the Dawson
Shareholders. Following the Offers becoming or being declared
unconditional in all respects a further payment of GBP3.338 million
will be made by the Dawson Group to Surridge Dawson and Solent in
connection with the Liquidator Settlement.
11. Inducement fee and non-solicit
Under the terms of the Break Fee Agreement entered into
immediately before the date of this announcement, Dawson has agreed
to pay Smiths News GBP172,620 if:
-- The Dawson Directors withdraw, suspend or adversely modify or
qualify their recommendation of the Offers as set out in this
announcement and thereafter either Offer lapses or is withdrawn in
accordance with its terms; or
-- a competing offer is announced before the Offers lapse or are
withdrawn and the Offers subsequently lapse or are withdrawn and
that competing offer (or any other competing offer announced prior
to the lapse or withdrawal of the Offers) subsequently becomes or
is declared unconditional in all respects.
Under the terms of the Break Fee Agreement, Dawson has
undertaken directly or indirectly, not to solicit, initiate or
encourage a Competing Transaction for the Exclusivity Period. In
addition, Dawson has agreed to notify Smiths News promptly of any
approach made in relation to a Competing Transaction.
12. Dawson Employee Share Plans
If the Offers become or are declared unconditional in all
respects, Smiths News will make appropriate proposals to the
holders of options under the Dawson Encouraging Executive Share
Option Scheme in accordance with Rule 15 of the Code. Further
details of these proposals will be set out in the Offer
Document.
13. Disclosure of interests in Dawson Shares
As at the close of business on 6 June 2011, being the latest
practicable date prior to the date of this announcement, neither
Smiths News, nor any of its directors, nor any person deemed or
presumed by the Panel to be acting in concert with Smiths News,
owns or controls, or has borrowed or lent, any Dawson Shares
(including pursuant to any long exposure, whether conditional or
absolute, to changes in the prices of securities) or any rights to
subscribe for or purchase the same, or holds any options (including
traded options) in respect of, or has any option to acquire, any
Dawson Shares or has entered into any derivatives referenced to any
Dawson Shares ("Relevant Dawson Shares") which remain outstanding,
nor does any such person hold any short position in Relevant Dawson
Shares (whether conditional or absolute and whether in the money or
otherwise) including any short position under any derivative, any
agreement to sell or any delivery obligation or right to require
another person to purchaser or take delivery, nor does any such
person have any arrangement in relation to Relevant Dawson Shares.
An "arrangement" also includes any indemnity or option arrangement
and any understanding, formal or informal, of whatever nature,
relating to Relevant Dawson Shares, which may be an inducement to
deal or refrain from dealing.
14. Further details of the Offers
The Offers are subject to a number of conditions which are set
out in Appendix I, including the approval of the Office of Fair
Trading in terms satisfactory to Smiths News.
Smiths News reserves the right to elect to implement the merger
by way of a scheme of arrangement under Part 26 of the Companies
Act. Appendix 1 sets out further information about the terms and
conditions that would apply in such circumstances.
Dawson Shares will be acquired pursuant to the Offers fully paid
and free from all liens, equities, charges, encumbrances, rights of
pre-emption and other interests and together with all rights now or
hereafter attaching thereto, including the right to receive and
retain all dividends and other distributions declared, made or
payable after the date of this announcement. If any dividend or
other distribution in respect of the Dawson Shares is declared,
paid or made on or after the date of this announcement, Smiths News
reserves the right to reduce the value of the consideration payable
for each Dawson Share under the Offers by up to the amount per
Dawson Share of such dividend or distribution.
15. Compulsory acquisition, delisting and re-registration
Smiths News intends, assuming it becomes entitled to do so, to
use the procedures set out in sections 428 to 430F (inclusive) of
the Companies Act 2006 to acquire compulsorily any outstanding
Dawson Ordinary Shares and B Ordinary Shares, on the same terms as
the Ordinary Offer and B Ordinary Offer respectively.
Smiths News intends to procure as soon as possible after the
Offers becoming or being declared unconditional in all respects,
that Dawson will make an application to the UK Listing Authority
for the listing of the Dawson Ordinary Shares to be cancelled and
to the London Stock Exchange for the Dawson Ordinary Shares to
cease to be admitted to trading on the London Stock Exchange's main
market for listed securities. It is anticipated that such
cancellations will take effect no earlier than 20 business days
after the Ordinary Offer becomes or is declared unconditional in
all respects.
Accordingly, Dawson Shareholders who do not accept the Offers in
respect of all or part of their Dawson Shares may be left with
minority holdings in an unquoted company. Dawson Shareholders
should note that delisting would significantly reduce the liquidity
and marketability of the Dawson Ordinary Shares.
Following delisting, Smiths News also intends that Dawson will
be re-registered as a private limited company.
16. Documentation
The Offer Document will be sent to Dawson Shareholders as soon
as practicable and in any event within 28 days of this
announcement.
17. General
This announcement does not constitute an offer or an invitation
to purchase any securities.
The Conditions and certain further terms are set out in Appendix
I to this announcement and in the Offer Document when issued.
Appendix II contains details of the irrevocable undertakings given
to Smiths News. Appendix III contains the definitions of certain
terms used in this summary and the announcement set out in Part
II.
Enquiries:
Smiths News
Nick Gresham Tel: 0845 123 0000
Oriel Securities (financial adviser to Smiths News)
David Arch Tel: 020 7710 7616
Buchanan (PR adviser to Smiths News)
Jeremy Garcia Tel: 020 7466 5000
Dawson
Hugh Cawley, Chief Executive Tel: 0203 167 4100
KPMG Corporate Finance (financial adviser to Dawson)
Christian Mayo Tel: 0113 231 3179
Chris Belsham Tel: 0113 246 4548
MHP Communications (PR adviser to Dawson)
Reg Hoare Tel: 020 3128 8100
Further information
This announcement is not intended to and does not constitute, or
form part of, any offer to sell or subscribe for or an invitation
to purchase or subscribe for any securities or the solicitation of
any vote or approval in any jurisdiction pursuant to the Offers or
otherwise, nor shall there be any sale, issuance or transfer of
securities of Dawson in any jurisdiction in contravention of
applicable law. This announcement does not constitute a prospectus
or a prospectus equivalent document.
Any acceptance or other response to the Offers should only be
made on the basis of information contained in the Offer Document
(which will contain the full terms and conditions of the Offers)
and, if you hold Dawson Shares in certificated form, the Form of
Acceptance. Dawson Shareholders are advised to read the formal
documentation in relation to the Offers carefully once it has been
dispatched.
Please be aware that addresses, electronic addresses and certain
other information provided by Dawson Shareholders, persons with
information rights and other relevant persons in connection with
the receipt of communications from Dawson may be provided to Smiths
News during the offer period as required under Section 4 of
Appendix 4 of the Code.
Oriel Securities, which is authorised and regulated in the
United Kingdom by the Financial Services Authority, is acting for
Smiths News and no-one else in connection with the Offers and will
not be responsible to anyone other than Smiths News for providing
the protections afforded to clients of Oriel Securities nor for
providing advice in relation to the Offers. Neither Oriel
Securities nor any of its subsidiaries, branches or affiliates owes
or accepts any duty, liability or responsibility whatsoever
(whether direct or indirect, whether in contract, in tort, under
statute or otherwise) to any person who is not a client of Oriel
Securities in connection with this announcement, any statement
contained herein or otherwise.
KPMG Corporate Finance, a division of KPMG LLP which is
authorised and regulated by the Financial Services Authority for
investment business activities, is acting exclusively for Dawson as
financial adviser in relation to the Offers and is not acting for
any other person in relation to such Offers. KPMG Corporate Finance
will not be responsible to anyone other than Dawson for providing
the protections afforded to its clients or for providing advice in
relation to the contents of this announcement or any offer or
arrangements referred to herein.
Overseas jurisdictions
The Offers are not being made directly or indirectly, and
securities of Dawson will not be accepted for purchase from or on
behalf of any shareholder, in any jurisdiction in which the making
or acceptance thereof would not be in compliance with the
securities or other laws or regulations of such jurisdiction or
would require any registration, approval or filing with any
regulatory authority not expressly contemplated by the terms of
this announcement.
The availability of the Offers in, and the release, publication
or distribution of this announcement in or into, jurisdictions
other than the United Kingdom may be restricted by law. Therefore
persons into whose possession this announcement comes who are not
resident in the United Kingdom should inform themselves about, and
observe, any applicable restrictions. Dawson Shareholders who are
in any doubt regarding such matters should consult an appropriate
independent adviser in the relevant jurisdiction without delay. Any
failure to comply with such restrictions may constitute a violation
of the securities laws of any such jurisdiction.
In particular, as described in Appendix I, the Offers will not
be made, directly or indirectly, in or into, or by the use of the
mails or any means of instrumentality (including, without
limitation, telephonically or electronically) of interstate or
foreign commerce of, or any facilities of a national securities
exchange of Canada, Australia or Japan. Accordingly, except as
required by applicable law, copies of this announcement are not
being, and may not be, mailed or otherwise forwarded, distributed
or sent in, into or from Canada, Australia or Japan. Persons
receiving this announcement (including without limitation nominees,
trustees or custodians) must not forward, distribute or send it
into Canada, Australia or Japan.
This announcement has been prepared for the purposes of
complying with English law and the Code and the information
disclosed may not be the same as that which would have been
disclosed if this announcement had been prepared in accordance with
the laws of jurisdictions outside the United Kingdom.
Notice to US Shareholders of Dawson
Each US shareholder of Dawson is urged to consult with his
independent professional adviser regarding any acceptance of the
Offers including, without limitation, to consider the tax
consequences associated with such shareholder's election to
participate in the Offers.
This document does not constitute an offer of securities for
sale in the United States or an offer to acquire securities in the
United States. No offer to acquire securities has been made, or
will be made, directly or indirectly, in or into, or by use of the
mails, any means or instrumentality of interstate or foreign
commerce or any facilities of a national securities exchange of,
the United States or any other country in which such offer may not
be made other than (i) in accordance with the tender offer
requirements under the US Exchange Act or the securities laws of
such other country, as the case may be; or (ii) pursuant to an
available exemption from such requirements.
The Offers are for the securities of a corporation organised
under the laws of England and Wales and are subject to the
procedure and disclosure requirements of the United Kingdom, which
are different from those of the United States. The Offers are being
made in the United States pursuant to Section 14(e) of, and
Regulation 14E under, the US Exchange Act and otherwise in
accordance with the requirements of the Code. Accordingly, the
Offers are subject to certain disclosure and other procedural
requirements which may differ from those applicable under US
domestic tender offer procedures and laws.
To the extent permitted by applicable law, in accordance with
the Code and normal UK market practice and in compliance with Rule
14e-5 under the US Exchange Act, Smiths News and its affiliates or
their nominees or brokers (acting as agents) may from time to time
during the period in which the Offers remain open for acceptance
make certain purchases of, or arrangements to purchase, shares or
other securities in Dawson, otherwise than pursuant to the Offers,
such as in open market or privately negotiated purchases. Any such
purchases, or arrangements to purchase, will be undertaken to the
extent permitted by applicable law and will comply with all
applicable UK rules, including the Code and the rules of the London
Stock Exchange, as well as with Rule 14e-5 under the US Exchange
Act. In addition, in accordance with, and to the extent permitted
by, the Code and normal UK market practice, Oriel Securities
serving as financial advisor to Smiths News and its affiliates may
make purchases of, or arrangements to purchase, securities of
Dawson and various related derivative transactions in the normal
and ordinary course of their business. Information regarding such
activities which is required to be made public in the United
Kingdom pursuant to the Code will be reported to a Regulatory
Information Service and will be available on the London Stock
Exchange website at www.londonstockexchange.com. This information
will also be publicly disclosed in the United States to the extent
that such information is made public in the United Kingdom.
Disclosure requirements
Under Rule 8.3(a) of the Code, any person who is interested in 1
per cent. or more of any class of relevant securities of Dawson or
of any paper offeror (being any offeror other than an offeror in
respect of which it has been announced that its offer is, or is
likely to be, solely in cash) must make an Opening Position
Disclosure following the commencement of the offer period and, if
later, following the announcement in which any paper offeror is
first identified.
An Opening Position Disclosure must contain details of the
person's interests and short positions in, and rights to subscribe
for, any relevant securities of each of (i) Dawson and (ii) any
paper offeror(s). An Opening Position Disclosure by a person to
whom Rule 8.3(a) applies must be made by no later than 3.30 pm
(London time) on the 10th Business Day following the commencement
of the offer period and, if appropriate, by no later than 3.30 pm
(London time) on the 10th Business Day following the announcement
in which any paper offeror is first identified. Relevant persons
who deal in the relevant securities of Dawson or of a paper offeror
prior to the deadline for making an Opening Position Disclosure
must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes,
interested in 1 per cent. or more of any class of relevant
securities of Dawson or of any paper offeror must make a Dealing
Disclosure if the person deals in any relevant securities of Dawson
or of any paper offeror. A Dealing Disclosure must contain details
of the dealing concerned and of the person's interests and short
positions in, and rights to subscribe for, any relevant securities
of each of (i) Dawson and (ii) any paper offeror, save to the
extent that these details have previously been disclosed under Rule
8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies
must be made by no later than 3.30 pm (London time) on the Business
Day following the date of the relevant dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of Dawson or a paper offeror, they
will be deemed to be a single person for the purpose of Rule
8.3.
Opening Position Disclosures must also be made by Dawson and by
any offeror and Dealing Disclosures must also be made by Dawson, by
any offeror and by any persons acting in concert with any of them
(see Rules 8.1, 8.2 and 8.4).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Takeover Panel's website at www.thetakeoverpanel.org.uk,
including details of the number of relevant securities in issue,
when the offer period commenced and when any offeror was first
identified. If you are in any doubt as to whether you are required
to make an Opening Position Disclosure or a Dealing Disclosure, you
should contact the Panel's Market Surveillance Unit on +44 (0)20
7638 0129.
Not a profit forecast
The financial information contained in this announcement is
based on publicly available historical financial information of
Smiths News and Dawson and is not intended to be a profit forecast
or profit estimate under the UK Listing, Prospectus, Disclosure and
Transparency Rules or under the Code or any other applicable rules.
This announcement contains earnings enhancement statements which
are not intended to be profit forecasts and so should not be
interpreted to mean that earnings per share will necessarily be
greater than those for the relevant preceding financial period.
Forward-looking statements
This announcement contains certain forward-looking statements,
including statements regarding Smiths News's and Dawson's plans,
objectives and expected performance. Such statements relate to
events and depend on circumstances that will occur in the future
and are subject to risks, uncertainties and assumptions. There are
a number of factors which could cause actual results and
developments to differ materially from those expressed or implied
by such forward looking statements, including, among others the
enactment of legislation or regulation that may impose costs or
restrict activities; the re-negotiation of contracts or licences;
fluctuations in demand and pricing in the industry; fluctuations in
exchange controls; changes in government policy and taxations;
industrial disputes; war and terrorism. These forward-looking
statements speak only as at the date of this announcement.
Synergies
The expected synergies referred to in this announcement relate
to future actions and circumstances which, by their nature, involve
risks, uncertainties and other factors. As a result the synergies
referred to in this announcement may not be achieved and those
achieved could be materially different from those estimated.
Publication of this announcement
A copy of this announcement will be available subject to certain
restrictions relating to persons resident in the Restricted
Jurisdictions on Smiths News's website www.smithsnews.co.uk and
Dawson's website www.dawson.co.uk.
The contents of Smiths News's website and Dawson's website are
not incorporated into and do not form part of this announcement.
APPENDIX I
CONDITIONS AND CERTAIN FURTHER TERMS OF THE OFFERS
The Offers, which will be made by Smiths News, will comply with
the Code. The Offers and any dispute or claim arising out of, or in
connection with, them (whether contractual or non-contractual in
nature) will be governed by, and construed in accordance with,
English law and be subject to the jurisdiction of the courts of
England. The Offers will be made on the terms and conditions set
out in the Offer Document.
1. conditions of the ordinary offer
The Ordinary Offer will be subject to the following
conditions:
(a) valid acceptances being received (and not, where permitted,
withdrawn) by 3.00 p.m. on the first closing date of the Ordinary
Offer (or such later time(s) and/or date(s) as Smiths News may,
subject to the rules of the Code, decide) in respect of not less
than 90 per cent. (or such lesser percentage as Smiths News may
decide) in nominal value of the Dawson Shares to which the Ordinary
Offer relates, provided that this condition will not be satisfied
unless Smiths News and/or any of its wholly-owned subsidiaries
shall have acquired or agreed to acquire, whether pursuant to the
Ordinary Offer or otherwise, Dawson Shares carrying, in aggregate,
more than 50 per cent. of the voting rights then exercisable at a
general meeting of Dawson, including for this purpose to the extent
(if any) required by the Panel, any such voting rights attaching to
any Dawson Shares that may be unconditionally allotted or issued
before the Ordinary Offer becomes or is declared unconditional as
to acceptances whether pursuant to the exercise of any outstanding
conversion or subscription rights or otherwise, and for this
purpose:
(i) the expression "Dawson Shares to which the Ordinary Offer
relates" shall be construed in accordance with sections 974-991 of
the Companies Act;
(ii) the expression "shares that may be unconditionally allotted
or issued" shall include any Treasury Shares which are
unconditionally transferred or sold by Dawson; and
(iii) shares which have been unconditionally allotted but not
issued shall be deemed to carry the voting rights which they will
carry on being entered into the register of members of Dawson;
(b) the Office of Fair Trading issuing a decision, in terms
satisfactory to Smiths News, that it is not its intention to refer
the proposed acquisition of Dawson by Smiths News or any matter
arising therefrom to the Competition Commission;
(c) no government or governmental, quasi--governmental,
supranational, statutory, administrative or regulatory body,
authority, court, trade agency, association, institution,
environmental body or any other person or body in any jurisdiction
(each a "Relevant Authority") having decided to take, instituted,
implemented or threatened any action, proceedings, suit,
investigation, enquiry or reference, or made, proposed or enacted
any statute, regulation, order or decision or taken any other steps
and there not continuing to be outstanding any statute, regulation,
order or decision, which would or might:
(i) make the Offers or the acquisition of any Dawson Shares, or
control of Dawson by Smiths News void, illegal or unenforceable or
otherwise materially restrict, restrain, prohibit, delay or
interfere with the implementation thereof, or impose material
additional conditions or obligations with respect thereto, or
require material amendment thereof or otherwise challenge or
interfere therewith;
(ii) require or prevent the divestiture by Dawson or any of its
subsidiaries or subsidiary undertakings or any associated
undertaking or any company of which 20 per cent. or more of the
voting capital is held by the Dawson Group or any partnership,
joint venture, firm or company in which any member of the Dawson
Group may be interested (the "wider Dawson Group") or by Smiths
News or any of its subsidiaries or subsidiary undertakings or any
associated undertaking or any company of which 20 per cent. or more
of the voting capital is held by the Smiths News Group or any
partnership, joint venture, firm or company in which any member of
the Smiths News Group may be interested (the "wider Smiths News
Group") of all or a material portion of their respective
businesses, assets or property or impose any material limitation on
the ability of any of them to conduct their respective businesses
or own any of their material assets or property;
(iii) impose any limitation on or result in a delay in the
ability of any member of the wider Dawson Group or the wider Smiths
News Group to acquire or to hold or to exercise effectively any
rights of ownership of shares or loans or securities convertible
into shares in any member of the wider Dawson Group or of the wider
Smiths News Group held or owned by it or to exercise management
control over any member of the wider Dawson Group or of the wider
Smiths News Group to an extent which is material in the context of
the Dawson Group taken as a whole or, as the case may be, the
Smiths News Group taken as a whole;
(iv) require any member of the wider Smiths News Group or the
wider Dawson Group to acquire or offer to acquire any shares or
other securities in any member of the wider Dawson Group where such
acquisition would be material in the context of the Dawson Group
taken as a whole; or
(v) otherwise materially and adversely affect the assets,
business, profits or prospects of any member of the wider Smiths
News Group or of any member of the wider Dawson Group,
and all applicable waiting and other time periods during which
any such Relevant Authority could decide to take, institute,
implement or threaten any such action, proceeding, suit,
investigation, enquiry or reference having expired, lapsed or been
terminated;
(d) except as Disclosed, there being no provision of any
arrangement, agreement, licence, permit or other instrument to
which any member of the wider Dawson Group is a party or by or to
which any such member or any of their assets is or may be bound,
entitled or be subject to and which, in consequence of the Offers
or the acquisition or proposed acquisition of any Dawson Shares, or
control of Dawson, by Smiths News or otherwise, would or might, to
an extent which is material in the context of the Dawson Group
taken as a whole, result in:
(i) any monies borrowed by, or other indebtedness actual or
contingent of, any such member of the wider Dawson Group being or
becoming repayable or being capable of being declared immediately
or prior to its or their stated maturity or the ability of any such
member to borrow monies or incur any indebtedness being inhibited
or becoming capable of being withdrawn;
(ii) the creation or enforcement of any mortgage, charge or
other security interest over the whole or any part of the business,
property or assets of any such member or any such security
(whenever arising or having arisen) being enforced or becoming
enforceable;
(iii) any such arrangement, agreement, licence or instrument
being terminated or adversely modified or any action being taken of
an adverse nature or any obligation or liability arising
thereunder;
(iv) any assets of any such member being disposed of or charged,
or right arising under which any such asset could be required to be
disposed of or charged, other than in the ordinary course of
business;
(v) the interest or business of any such member of the wider
Dawson Group in or with any firm or body or person, or any
agreements or arrangements relating to such interest or business,
being terminated or adversely modified or affected;
(vi) any such member ceasing to be able to carry on business
under any name under which it presently does so;
(vii) the creation of liabilities (actual or contingent) by any
such member; or
(viii) the financial or trading position of any such member
being prejudiced or adversely affected,
and no event having occurred which, under any provision of any
arrangement, agreement, licence or other instrument to which any
member of the wider Dawson Group is a party, or to which any such
member or any of its assets may be bound, entitled or subject,
could result in any of the events or circumstances as are referred
to in paragraphs (i) to (viii) of this condition 1(d);
(e) except as Disclosed, no member of the wider Dawson Group
having, since 26 May 2011:
(i) issued, agreed to issue or proposed the issue of additional
shares or securities of any class, or securities convertible into,
or exchangeable for or rights, warrants or options to subscribe for
or acquire, any such shares, securities or convertible securities
(save as between Dawson and wholly--owned subsidiaries of Dawson),
or redeemed, purchased or reduced any part of its share
capital;
(ii) sold or transferred or agreed to sell or transfer any
Treasury Shares;
(iii) recommended, declared, paid or made or proposed to
recommend, declare, pay or make any bonus, dividend or other
distribution other than to Dawson or a wholly-owned subsidiary of
Dawson;
(iv) agreed, authorised, proposed or announced its intention to
propose any merger or demerger or acquisition or disposal of assets
or shares which are material in the context of the Dawson Group
taken as a whole (other than in the ordinary course of trading) or
to any material change in its share or loan capital;
(v) issued, authorised or proposed the issue of any debentures
or incurred any indebtedness or contingent liability which is
material in the context of the Dawson Group taken as a whole;
(vi) acquired or disposed of or transferred, mortgaged or
encumbered any asset or any right, title or interest in any asset
(other than in the ordinary course of trading) in a manner which is
material in the context of the Dawson Group taken as a whole;
(vii) entered into or varied or announced its intention to enter
into or vary any contract, arrangement or commitment (whether in
respect of capital expenditure or otherwise) which is of a
long--term or unusual nature or involves or could involve an
obligation of a nature or magnitude, and in either case which is
material in the context of the Dawson Group taken as a whole;
(viii) entered into or proposed or announced its intention to
enter into any reconstruction, amalgamation, transaction or
arrangement (otherwise than in the ordinary course of business)
which is material in the context of the Dawson Group taken as a
whole;
(ix) taken any action nor having had any steps taken or legal
proceedings started or threatened against it for its winding--up or
dissolution or for it to enter into any arrangement or composition
for the benefit of its creditors, or for the appointment of a
receiver, administrator, trustee or similar officer if it or any of
its assets (or any analogous proceedings or appointment in any
overseas jurisdiction);
(x) been unable, or admitted in writing that it is unable, to
pay its debts or having stopped or suspended (or threatened to stop
or suspend) payment of its debts generally or ceased or threatened
to cease carrying on all or a substantial part of its business;
(xi) save for the renewal of the consultancy agreement pursuant
to which Nigel Freer provides his services to Dawson as a
non-executive director, entered into or varied or made any offer to
enter into or vary the terms of any service agreement or
arrangement with any of the Dawson Directors;
(xii) waived, compromised or settled any claim which is material
in the context of the wider Dawson Group; or
(xiii) entered into or made an offer (which remains open for
acceptance) to enter into any agreement, arrangement or commitment
or passed any resolution with respect to any of the transactions or
events referred to in this condition ( 1)(e);
(f) since 26 May 2011, except as Disclosed,
(i) there having been no adverse change in the business, assets,
financial or trading position or profits or prospects of any member
of the wider Dawson Group which in any such case is material in the
context of the Dawson Group taken as a whole;
(ii) no litigation, arbitration proceedings, prosecution or
other legal proceedings having been instituted, announced or
threatened by or against or remaining outstanding against any
member of the wider Dawson Group and no enquiry or investigation by
or complaint or reference to any Relevant Authority against or in
respect of any member of the wider Dawson Group having been
threatened, announced or instituted or remaining outstanding which
in any such case could have a material affect on the Dawson Group
taken as a whole; and
(iii) no contingent or other liability having arisen or been
incurred which might reasonably be expected to adversely affect any
member of the Dawson Group in a manner which is material in the
context of the wider Dawson Group;
(g) Smiths News not having discovered that, save as
Disclosed:
(i) the financial, business or other information concerning the
wider Dawson Group which has been disclosed at any time by or on
behalf of any member of the wider Dawson Group publicly (by the
delivery of an announcement to a Regulatory Information Service)
either contains a material misrepresentation of fact or omits to
state a fact necessary to make the information contained therein
not materially misleading to an extent that is material in the
context of the Dawson Group taken as a whole;
(ii) any member of the wider Dawson Group is subject to any
liability, contingent or otherwise, which is not disclosed in the
annual report and accounts of Dawson for the financial year ended
30 September 2010 or the interim results of Dawson for the six
months ended 31 March 2011 and which is material in the context of
the Dawson Group taken as a whole;
(iii) any past or present member of the wider Dawson Group has
not complied with all applicable legislation or regulations of any
jurisdiction or any notice or requirement of any Relevant Authority
with regard to the storage, disposal, discharge, spillage, leak or
emission of any waste or hazardous substance or any substance
likely to impair the environment or harm human health which
non-compliance would be likely to give rise to any liability
(whether actual or contingent) which is material in the context of
the Dawson Group taken as a whole; or
(iv) there has been a disposal, spillage, emission, discharge or
leak of waste or hazardous substance or any substance likely to
impair the environment or harm human health on, or from, any land
or other asset now or previously owned, occupied or made use of by
any past or present member of the wider Dawson Group, or in which
any such member may now or previously have had an interest, which
would be likely to give rise to any liability (whether actual or
contingent) which is material in the context of the Dawson Group
taken as a whole;
(h) valid acceptances being received (and not, where permitted,
withdrawn) by 3.00 p.m. on the first closing date of the B Ordinary
Offer (or such later time(s) and/or date(s) as Smiths News may,
subject to the rules of the Code, decide) in respect not less than
90 per cent. (or such lesser percentage as Smiths News may decide)
of the B Ordinary Shares to which the B Ordinary Share Offer
relates and, for this purpose, the expression "B Ordinary Shares to
which the B Ordinary Share Offer relates" shall be construed in
accordance sections 974-991 of the Companies Act.
Smiths News reserves the right to waive, in whole or in part,
all or any of conditions (b) to (i) inclusive. Smiths News also
reserves the right, subject to the consent of the Panel, to extend
the time allowed under the Code for satisfaction of condition (a)
until such time as conditions (b) to (h) have been satisfied,
fulfilled or, to the extent permitted, waived. If Smiths News is
required by the Panel to make an offer for Dawson Shares under the
provisions of Rule 9 of the Code, Smiths News may make such
alterations to the above conditions, including condition (a) above,
as are necessary to comply with the provisions of that Rule.
Smiths News reserves the right, with the consent of Dawson to
elect to implement the acquisition of the Dawson Shares by way of a
Scheme of Arrangement under Part 26 of the Companies Act. In such
event, the Scheme of Arrangement will be implemented on the same
terms (subject to appropriate amendments), so far as applicable, as
those which would apply to the Offers. In particular, condition (a)
will not apply and the Scheme of Arrangement will become effective
and binding following:
(i) approval at the Court Meeting (or any adjournment thereof)
by a majority in number of the Dawson Shareholders present and
voting, either in person or by proxy, representing 75 per cent. or
more in value of the Dawson Shares held by such holders;
(ii) the resolutions required to approve and implement the
Scheme of Arrangement and to be set out in the notice of General
Meeting of the holders of the Dawson Shares being passed by the
requisite majority at such General Meeting;
(iii) the sanction of the Scheme of Arrangement and confirmation
of any reduction of capital involved therein by the Court (in both
cases with or without modifications, on terms reasonably acceptable
to Dawson and Smiths News) and an office copy of the order of the
Court sanctioning the Scheme of Arrangement and confirming the
cancellation of share capital which forms part of it being
delivered for registration to the Registrar of Companies in England
and Wales.
2. CONDITIONS OF THE B Ordinary Offer
The B Ordinary Offer will be conditional upon:
(a) valid acceptances being received (and not, where permitted,
withdrawn) by 3.00 p.m. on the first closing date of the B Ordinary
Offer (or such later time(s) and/or date(s) as Smiths News may,
subject to the rules of the Code, decide) in respect of not less
than 90 per cent. (or such lesser percentage as Smiths News may
decide) of the B Ordinary Shares to which the B Ordinary Offer
relates and, for this purpose, the expression "B Ordinary Shares to
which the B Ordinary Offer relates" shall be construed in
accordance with sections 974-991 of the Companies Act; and
(b) the Ordinary Offer becoming or being declared unconditional
in all respects.
Smiths News reserves the right to waive, in whole or in part,
either or both of the conditions (a) or (b) to the B Ordinary
Offer.
3. FURTHER TERMS OF THE OFFERS
(a) The Offers will extend to all Dawson Shares unconditionally
allotted or issued on the date on which the Offers are made, and
any further Dawson Shares unconditionally allotted or issued, and
any Treasury Shares unconditionally sold or transferred by Dawson,
in each case, while the Offers remain open for acceptance (or such
earlier date or dates as Smiths News may decide).
(b) The Dawson Shares are to be acquired by Smiths News fully
paid and free from all liens, charges and encumbrances, rights of
pre--emption and any other third party rights of any nature
whatsoever and together with all rights attaching thereto,
including the right to all dividends or other distributions
declared, paid or made after the date hereof. If a dividend and/or
a distribution and/or a return of capital is proposed, declared,
made, paid or becomes payable by Dawson in respect of a Dawson
Share on or after the date of this announcement and prior to the
Offers becoming or being declared unconditional in all respects or
lapsing or being withdrawn, Smiths News reserves the right to
reduce the value of the consideration payable for each Dawson Share
under the Offers in respect of any Dawson Share by up to the amount
of the dividend and/or distribution and/or return of capital except
where the Dawson Share is or will be transferred pursuant to the
Offers on a basis which entitles Smiths News to receive the
dividend and/or distribution and/or return of capital and to retain
it.
(c) The Offers will lapse unless the conditions set out above
(other than condition (a) to the Ordinary Offer) are fulfilled or
(if capable of waiver) waived or, where appropriate, have been
determined by Smiths News in its reasonable opinion to be or to
remain satisfied by no later than 21 days after the later of the
first closing date of the Offers or the date on which the Offers
become or are declared unconditional as to acceptances, or such
later date as Smiths News may, with the consent of the Panel,
decide. Smiths News shall be under no obligation to waive or treat
as satisfied any of conditions (b) to (h) inclusive by a date
earlier than the latest date specified above for the satisfaction
thereof notwithstanding that the other conditions of the Offers may
at such earlier date have been waived or fulfilled or satisfied and
that there are at such earlier date no circumstances indicating
that any of such conditions may not be capable of fulfilment or
satisfaction.
(d) The Offers will lapse if either (i) they are referred to the
Competition Commission; or (ii) the European Commission either
initiates proceedings under Article 6(1)(c) of Council Regulation
(EC) 139/2004 or makes a referral to a competent authority of the
United Kingdom under Article 9(1) thereof and they are subsequently
referred to the Competition Commission, in either case before 3.00
p.m. on the first closing date of the Offers or the date on which
the Offers become or are declared unconditional as to acceptances,
whichever is the later. If the Offers so lapse the Offers will
cease to be capable of further acceptance and accepting Dawson
Shareholders and Smiths News will cease to be bound by acceptances
received before the time when the Offers lapse.
APPENDIX II
IRREVOCABLE UNDERTAKINGS
1. Irrevocable undertakings from the Dawson Directors
Each of the Dawson Directors has irrevocably undertaken that he
or she shall (and in relation to any beneficial holdings of Dawson
Shares that are registered in the name of a third party, that he or
she shall procure that such third party shall):
(a) accept or procure the acceptance of the Offers in accordance
with the terms of the Offer Document in respect of their current
holding of Dawson Shares;
(b) accept or procure the acceptance of the Offers in respect of
any Dawson Shares acquired by him or her through the exercise of
options;
(c) not sell or transfer (other than pursuant to the Offers) or
otherwise dispose of or charge all or any of his Dawson Shares, nor
enter into any agreement to do so; and
(d) not accept or undertake to accept any other offer in respect
of the Dawson Shares held by him or her or acquired through the
exercise of options, nor enter into any agreement to do so.
Details of the irrevocable undertakings received from the Dawson
Directors are as follows.
% of issued ordinary
Name of Director Number of shares share capital
------------------ ----------------- ---------------------
Hugh Cawley 230,367 0.32
------------------ ----------------- ---------------------
Nigel Freer 213,730 0.30
------------------ ----------------- ---------------------
Brenda Dean 36,233 0.05
------------------ ----------------- ---------------------
James McCarthy 36,146 0.05
------------------ ----------------- ---------------------
The irrevocable undertakings from the Dawson Directors will
lapse if the Offer Document is not posted by 5 July 2011 (or such
later time as may be agreed by the Panel and in the case of a
switch to a scheme extended to 28 days after the date announcing
the change) or if the Offers lapse or are withdrawn (other than
where such lapse or withdrawal is because of a change to a scheme).
The irrevocable undertakings from the Dawson Directors will
otherwise remain binding in all circumstances.
2. Irrevocable undertakings from certain Dawson institutional
shareholders and the PPF
Each of the shareholders listed below have given an irrevocable
undertaking that they shall (or (other than in the case of the PPF
which holds the shares as both legal and beneficial owner) shall
procure that such third party shall):
(a) accept the acceptance of the Offers in accordance with the
terms of the Offer Document in respect of their current holding of
Dawson Shares or in the case of Artemis in respect of the Dawson
Shares which it controls;
(b) not sell or transfer (other than pursuant to the Offers) or
otherwise dispose of or charge all or any of the Dawson Shares held
by them or in the case of Artemis in respect of the Dawson Shares
which it controls; nor enter into any agreement to do so;
(c) not accept or undertake to accept any other offer in respect
of the Dawson Shares held by them or in the case of Artemis in
respect of the Dawson Shares which it controls, nor enter into any
agreement to do so.
Shareholder Number of shares % of issued ordinary or B ordinary
share capital
PPF 6,519,493 ordinary shares 9.1% of ordinary share capital
25,623,586 B ordinary shares 100.0% of B ordinary share
capital
Gartmore 5,315,000 ordinary shares 7.4% of ordinary share
capital
Artemis 3,700,000 ordinary shares 5.2% of ordinary share
capital
The irrevocable undertaking from the PPF will lapse if: (i) the
Offer Document is not posted by 5 July 2011 (or such later time as
may be agreed by the Panel and in the case of a switch to a scheme
extended to 28 days after the date announcing the change); (ii) if
the Offers lapse or are withdrawn (other than where such lapse or
withdrawal is because of a change to a scheme) or (iii) if any
third party offer for Dawson is announced in accordance with Rule
2.5 of the City Code at a price that is 5 per cent. greater than
the then offer price of the Offers made by Smiths News to acquire
Dawson. The irrevocable undertakings from the PPF will otherwise
remain binding in all circumstances.
The irrevocable undertaking from each of Artemis and Gartmore
will lapse if: (i) the Offer Document is not posted by 5 July 2011
(or such later time as may be agreed by the Panel and in the case
of a switch to a scheme extended to 28 days after the date
announcing the change); (ii) if the Offers lapse or are withdrawn
(other than where such lapse or withdrawal is because of a change
to a scheme) or (iii) if any third party offer for Dawson is
announced in accordance with Rule 2.5 of the City Code at a price
that is 10 per cent. greater than the then offer price of the
Offers made by Smiths News to acquire Dawson. The irrevocable
undertakings from Artemis and Henderson will otherwise remain
binding in all circumstances.
APPENDIX III
DEFINITIONS
The following definitions apply throughout this document unless
the context requires otherwise:
"Artemis" Artemis High Income Fund
"Australia" the Commonwealth of Australia, its
states, territories and possessions
"Bertrams" Bertrams, the book division of Smiths
News
"B Ordinary Offer" the recommended cash offer to be made
by Smiths News to acquire all of the
Dawson B Ordinary Shares on the terms
and subject to the conditions to be
set out in the Offer Document and the
form of acceptance relating thereto
and including, where the context so
requires, any subsequent revision,
variation, extension or renewal of
such offer
"Business Day" a day (excluding Saturdays, Sundays
and public holidays) on which banks
are generally open for business in
the City of London
"Canada" Canada, its provinces and territories
and all areas subject to its jurisdiction
and any political sub-division thereof
"Code" the City Code on Takeovers and Mergers
"Companies Act" the Companies Act 2006
"Competing Transaction" an offer or possible offer for, or
acquisition of, all (or a substantial
part of) the issued share capital of,
or a substantial proportion of the
assets or business of, or a substantial
equity interest in, Dawson or of the
assets or business of Dawson Media
Direct, Dawson Books and/or Dawson
Marketing Services or any of Dawson's
subsidiary undertakings or any offer
or possible offer or proposal relating
to a reorganisation or scheme or arrangement
resulting in the change of ownership
of or involving, Dawson or any of its
subsidiary undertakings or any other
transaction which would be likely to
result in Smiths News no longer wishing
to proceed with the Offers
"Disclosed" (i) disclosed in the annual report
and accounts of Dawson for the year
ended 30 September 2010, (ii) disclosed
in the interim results of Dawson for
the six months ended 31 March 2011,
(iii) publicly announced by Dawson
(by the release of an announcement
to a Regulatory Information Service)
prior to 5pm (London time) on 6 June
2011 or (iv) disclosed in this announcement
"Dawson" Dawson Holdings PLC whose registered
office is Blenheim House, 1 Blenheim
Road, Epsom, Surrey, United Kingdom
KT19 9AP
"Dawson Books" Dawson Books Limited, company number
06882367 whose registered office is
at Blenheim House, 1 Blenheim Road,
Epsom, Surrey, United Kingdom KT19
9AP
"Dawson Directors" the directors of Dawson
"Dawson Employee Share the Dawson 2006 Sharesave Scheme, ,
Plans" the Dawson Encouraging Executive Share
Ownership Scheme and the Dawson Long
Term Share Plan 2008
"Dawson Group" Dawson and its subsidiaries and subsidiary
undertakings
"Dawson Marketing Services" Dawson Marketing Services Limited,
company number 06882361 whose registered
office is at Blenheim House, 1 Blenheim
Road, Epsom, Surrey, United Kingdom
KT19 9AP
"Dawson Media Direct" Dawson Media Direct Limited, company
number 06882366 whose registered office
is at Blenheim House, 1 Blenheim Road,
Epsom, Surrey, United Kingdom KT19
9AP
"Dawson Ordinary Shares" the existing unconditionally allotted
or issued and fully paid ordinary shares
of 1p each in the capital of Dawson
(but excluding any Treasury Shares
held by Dawson) and any further such
shares which are unconditionally allotted
or issued and fully paid, and any Treasury
Shares unconditionally sold or transferred
by Dawson, in each case, before the
date on which the Offers closes (or
such earlier date(s) as Smiths News
may, subject to the Code, determine),
including any such shares so unconditionally
allotted or issued pursuant to the
exercise of options granted under the
Dawson Employee Share Plans
"Dawson B Ordinary Shares" the existing unconditionally allotted
or issued and fully paid B ordinary
shares of 1p each in the capital of
Dawson and any further such shares
which are unconditionally allotted
or issued and fully paid, before the
date on which the Offers closes (or
such earlier date(s) as Smiths News
may, subject to the Code, determine),
including any such shares so unconditionally
allotted or issued pursuant to the
exercise of options granted under the
Dawson Employee Share Plans
"Dawson Shareholders" holders of Dawson Shares
"Dawson Shares" the Dawson Ordinary Shares and the
Dawson B Ordinary Shares
"Enlarged Group" with effect from the Offers becoming
or being declared unconditional in
all respects, the Smiths News Group
as enlarged by the Dawson Group
"Exclusivity Period" 6 June until the earlier of 31 October
2011 and the Offers lapsing or, if
permitted, being withdrawn
"Gartmore" Gartmore Investment Limited as the
discretionary investment manager for
Henderson Fledgling Trust plc
"Japan" Japan, its states, territories and
possessions
"KPMG Corporate Finance" KPMG Corporate Finance, a division
of KPMG LLP which is authorised and
regulated by the Financial Services
Authority for investment business activities.
KPMG LLP is registered in England with
number OC301540 and has its registered
office at 15 Canada Square, London,
E14 5GL
"Listing Rules" the listing rules issued by the UK
Listing Authority pursuant to Part
VI of the Financial Services and Markets
Act 2000
"London Stock Exchange" London Stock Exchange plc
"Offers" the Ordinary Offer and the B Ordinary
Offer and "Offer" shall mean either
of them as the context may require
"Offer Document" the document to be sent to Dawson Shareholders
by Smiths News containing the terms
and conditions of the Offers
"Offer Price" 17.722 pence per Dawson Share
"Official List" the official list maintained by the
UK Listing Authority pursuant to Part
VI of the Financial Services and Markets
Act 2000
"Ordinary Offer" the recommended cash offer to be made
by Smiths News to acquire all of the
Dawson Ordinary Shares on the terms
and subject to the conditions to be
set out in a formal offer document
and the form of acceptance relating
thereto and including, where the context
so requires, any subsequent revision,
variation, extension or renewal of
such offer and "Offer" means a reference
to either Offer as the case may be
"Oriel Securities" Oriel Securities Limited of 150 Cheapside,
London EC2V 6ET
"Panel" the Panel on Takeovers and Mergers
"PPF" the Pension Protection Fund
"Regulatory Information a Regulatory Information Service that
Service" is approved by the Financial Services
Authority and is on the list maintained
by the Financial Services Authority
in LR App 3 to the Listing Rules
"Restricted Jurisdictions" Australia, Canada and/or Japan and/or
any other jurisdiction where release,
publication or distribution of this
announcement, in whole or in part,
would constitute a violation of the
relevant laws or regulations of such
jurisdiction
"Surridge Dawson" Surridge Dawson Limited (in liquidation)
a company registered in England and
Wales and with registered office c/o
Ernst & Young LLP, 1 Bridgewater Place,
Water Lane, Leeds LS11 5QR
"Solent" Solent SD Limited (in liquidation)
a company registered in England and
Wales and with registered office c/o
Ernst & Young LLP, 1 Bridgewater Place,
Water Lane, Leeds LS11 5QR
"Smiths News" Smiths News PLC a company registered
in England and Wales and with registered
office at Wakefield House, Pipers Way,
Swindon, Wiltshire, SN3 1RF
"Smiths News Group" Smiths News, its subsidiaries and subsidiary
undertakings
"subsidiary" and "subsidiary have the meanings given to them in
undertaking" the Companies Act
"Treasury Shares" shares held as treasury shares as defined
in section 724(5) of the Companies
Act
"UK" or "United Kingdom" the United Kingdom of Great Britain
and Northern Ireland
"UK Listing Authority" the Financial Services Authority as
the competent authority under Part
VI of the Financial Services and Markets
Act 2000
"United States" the United States of America, its territories
and possessions, any state of the United
States of America, the District of
Columbia, and all other areas subject
to its jurisdiction
"US Exchange Act" the United States Securities Act of
1934, as amended
"GBP" or "Sterling" pounds sterling, the lawful currency
for the time being of the UK and references
to "pence" and "p" shall be construed
accordingly
This information is provided by RNS
The company news service from the London Stock Exchange
END
ACQDXGDLUDGBGBL
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