RCG Holdings Limited Recommended Cash Offer for Doncasters Plc
LONDON--April 30, 2001--RCG Holdings and Doncasters Plc-- RCG Holdings Limited ("RCGH") and DONCASTERS plc ("DONCASTERS") today announce that they have reached agreement on the terms of a recommended cash offer (the "Offer") pursuant to which RCGH will offer to acquire all of the issued and to be issued share capital of DONCASTERS (including those DONCASTERS Shares underlying the DONCASTERS American Depositary Shares (the "DONCASTERS ADSs")). Under the terms of the Offer, RCGH will offer US$27.50 per DONCASTERS ADS in cash. Each DONCASTERS ADS represents two DONCASTERS Shares.
-- The Offer values the entire issued and to be issued share capital of DONCASTERS at approximately US$260.7 million.
-- The Offer represents a premium of 8.9 per cent. over the Closing Price of US$25.25 per DONCASTERS ADS on The New York Stock Exchange at the close of business on 27 April 2001, the last Business Day prior to the date of this announcement, and a premium of 47.7 per cent. over the Closing Price of US$18.625 on 3 November 2000, the last Business Day prior to the announcement by DONCASTERS that it was exploring strategic alternatives including a possible sale of the Company.
-- The directors of DONCASTERS, who have been so advised by Credit Suisse First Boston, consider the terms of the Offer to be fair and reasonable and accordingly intend unanimously to recommend DONCASTERS Shareholders to accept the Offer. In providing advice to the directors of DONCASTERS, Credit Suisse First Boston has taken into account the directors' commercial assessments.
-- RCGH is a new company backed by Royal Bank Private Equity Limited ("RBPE") to make the Offer. RCGH owns Ross Catherall Group Limited ("Ross Catherall"), a leading independent producer of vacuum and air melted superalloys, precision machined and fabricated components for worldwide use in automotive, aerospace and industrial gas turbine ("IGT") industries.
-- The combination of Ross Catherall and DONCASTERS will create a stronger global supplier of materials and components to original equipment manufacturers ("OEMs") in the IGT, aerospace and automotive sectors.
-- The combined pro forma net sales of Ross Catherall and DONCASTERS for the year ended 31 December 2000 totalled (pound)438.4 million (US$626.9 million) and pro forma income before interest, tax, exceptional items, extraordinary items and disposal of fixed assets totalled (pound)45.8 million (US$65.5 million).
-- RCGH has received irrevocable undertakings to accept the Offer from the directors of DONCASTERS in respect of their own beneficial holdings of DONCASTERS ADSs representing approximately 0.2 per cent. of DONCASTERS' issued share capital.
-- Commenting on the Offer, Paul Isaacs, director of RBPE, said, "This cash offer of US$27.50 per ADS represents excellent value for DONCASTERS Shareholders. We look forward to working closely with the management team of DONCASTERS to secure the benefits of the combination of the DONCASTERS and Ross Catherall businesses and to developing a leading aerospace and IGT group."
-- Eric Lewis, Chief Executive of DONCASTERS, said, "Following the announcement of 6 November 2000 that DONCASTERS was exploring several strategic alternatives for the company, I am now delighted to announce that terms have been agreed for RCGH to make a cash offer for DONCASTERS. The DONCASTERS board believes that this offer represents an attractive opportunity for DONCASTERS Shareholders to realise their investment in cash."
-- RBPE and RCGH are being advised by JPMorgan and DONCASTERS is being advised by CSFB. Debt financing for the transaction is being arranged and managed by RBS and JPMorgan and provided by RBS and The Chase Manhattan Bank.
This summary should be read in conjunction with the full text of the attached announcement. Appendix II contains definitions of certain expressions used in this summary announcement.
All historical financial information has been translated on the basis of (pound)1 = US$1.43.
Additional information and where to find it
RCGH will be filing a Tender Offer Statement, which contains the Offer Document, on Schedule TO and DONCASTERS will be filing a Solicitation/ Recommendation Statement on Schedule 14D-9 with the Securities and Exchange Commission (the "SEC") on or before the date the Offer Document and Solicitation/ Recommendation Statement are mailed to DONCASTERS Shareholders. DONCASTERS SHAREHOLDERS ARE ADVISED TO READ THE TENDER OFFER STATEMENT, OFFER DOCUMENT, SOLICITATION/ RECOMMENDATION STATEMENT AND THE RELATED DOCUMENTATION WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.
Free copies of the Tender Offer Statement, which contains the Offer Document, and free copies of the Solicitation/ Recommendation Statement, once available, and DONCASTERS' other filings with the SEC may be obtained from DONCASTERS. Free copies of RCGH's filings may be obtained by directing a request to MacKenzie Partners, Inc.: Address: 156 Fifth Avenue, NY, NY 10010, USA; telephone: +1 212 929 5500 or toll-free in the US: +1 800 322 2885.
The availability of the Offer to DONCASTERS Shareholders who are not resident in the United States or the United Kingdom may be affected by the laws of the relevant jurisdictions. DONCASTERS Shareholders who are not resident in the United States or the United Kingdom should inform themselves about and observe any applicable requirements.
The Offer will not be made, directly or indirectly, in or into Canada, Japan or Australia, or by use of the mails of, or by any means or instrumentality (including without limitation, facsimile transmission, e-mail, telex or telephone) or inter-state or foreign commerce of, or any facilities of a national securities exchange of Canada, Japan or Australia. Accordingly, copies of this announcement are not being, and must not be, mailed or otherwise distributed or sent in or into or from Canada, Japan or Australia and doing so may invalidate any purported acceptance of the Offer.
J.P. Morgan plc ("JPMorgan"), which is regulated in the United Kingdom by The Securities and Futures Authority Limited, is acting for RBPE and RCGH in connection with the Offer and for no one else and will not be responsible to anybody other than RBPE and RCGH for providing the protections afforded to customers of JPMorgan and for their subsidiaries and affiliates, nor for providing advice in relation to the Offer.
Credit Suisse First Boston (Europe) Limited (together with its affiliates, including Credit Suisse First Boston Corporation, "CSFB"), which is regulated in the United Kingdom by The Securities and Futures Authority Limited, and its affiliates are acting for DONCASTERS in connection with the Offer and for no one else and will not be responsible to anybody other than DONCASTERS for providing the protections afforded to customers of CSFB or for providing advice in relation to the Offer.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
This announcement contains forward-looking statements within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements with respect to net sales, earnings, performance, strategies, prospects and other aspects of the businesses of RCGH, Ross Catherall and DONCASTERS are based on current expectations that are subject to risks and uncertainties. A number of factors could cause actual results or outcomes to differ materially from those indicated by such forward-looking statements. These factors include, but are not limited to, risks and uncertainties as set forth in DONCASTERS' filings with the SEC, and include risks and uncertainties relating to the failure to obtain expected synergies from the Offer, delays in obtaining or adverse conditions contained in any required regulatory approvals, changes in laws or regulations, economic or weather conditions affecting future sales and margins, legislative and regulatory changes (including revised environmental and safety requirements), availability and cost of capital and other similar factors. Readers are referred to DONCASTERS' most recent reports filed with the SEC.
Introduction
The Boards of RCGH and DONCASTERS announce that agreement has been reached on the terms of a recommended cash offer to be made by RCGH for the entire issued and to be issued share capital of DONCASTERS (including those DONCASTERS Shares underlying the DONCASTERS ADSs). Each ADS represents two DONCASTERS Shares.
The Offer of US$27.50 per DONCASTERS ADS values the entire issued and to be issued share capital of DONCASTERS at approximately US$260.7 million.
The Offer
The Offer, which will be made on the terms and conditions set out below in Appendix I and on the further terms which will be set out in the Offer Document and the accompanying Letter of Transmittal and Form of Acceptance, will be made on the following basis:
For each DONCASTERS ADS US$27.50 in cash
For each DONCASTERS Share US$13.75 in cash
The Offer represents a premium of 8.9 per cent. over the Closing Price of a DONCASTERS ADS of US$25.25 prevailing at the close of business on 27 April 2001, the last Business Day prior to the date of this announcement, and a 47.7 per cent. premium over the Closing Price of US$18.625 on 3 November 2000, the last Business Day prior to the announcement by DONCASTERS that it was exploring strategic alternatives including a possible sale of the Company. The Offer represents a multiple of 14.3 times DONCASTERS' earnings after tax under US GAAP of (pound)1.34 (US$1.92) per DONCASTERS ADS for the year ended 31 December 2000.
The Offer will be subject to the applicable requirements of both the UK City Code and US federal securities laws. It should be noted that by virtue of the conflicting provisions of the UK City Code and US federal securities laws, the Panel has agreed that the Acceptance Condition can be structured so that the Offer cannot become or be declared unconditional as to acceptances until such time as all other Conditions to the Offer have been satisfied, fulfilled or, to the extent permitted, waived. The Acceptance Condition in paragraph (i) of Appendix I has been amended accordingly.
The DONCASTERS ADSs and DONCASTERS Shares will be acquired by RCGH under the Offer fully paid and free from all liens, equities, charges, encumbrances, rights of pre-emption and other third party rights or interests of any nature whatsoever and together with all rights now or hereafter attaching thereto, including the right to receive and retain in full all dividends and other distributions declared, made or paid hereafter.
Irrevocable undertakings
RCGH has received irrevocable undertakings to accept the Offer from the directors of DONCASTERS in respect of their own beneficial holdings of DONCASTERS ADSs and DONCASTERS Shares representing approximately 0.2 per cent. of DONCASTERS' issued share capital.
DONCASTERS Board recommendation
The directors of DONCASTERS, who have been so advised by Credit Suisse First Boston, consider the terms of the Offer to be fair and reasonable and accordingly intend unanimously to recommend DONCASTERS Shareholders to accept the Offer. In providing advice to the directors of DONCASTERS, Credit Suisse First Boston has taken into account the directors' commercial assessments.
Background to and reasons for the Offer
In November last year, DONCASTERS' board and management recognised that the DONCASTERS ADS price did not adequately reflect the value in the DONCASTERS business. The board of DONCASTERS therefore authorised management to examine a range of strategic alternatives in order to improve shareholder value.
The board now believes that the Offer represents an attractive opportunity for DONCASTERS Shareholders to realise the value of their investment in cash.
Approvals and Timing
The Offer is conditional upon, among other things, the expiration or termination of the waiting periods applicable under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (as amended) and under US foreign investment regulations and the receipt of required approvals under the competition laws of the United Kingdom, the Republic of Ireland and Germany.
Information on DONCASTERS
DONCASTERS is a leading manufacturer of highly-engineered metal components for tolerance-critical applications, primarily in the IGT, aerospace and petrochemical industries. DONCASTERS produces precision engineered parts, sub-assemblies and modules to its customers' specifications in a wide range of specialty metals.
In addition to these three principal industries, DONCASTERS serves other specialty engineering applications in the medical orthopaedics, performance vehicle, pump, valve and process industries.
DONCASTERS is a leading supplier of investment cast, forged and machined airfoils (fan blades, compressor blades and turbine blades), and is also a leading supplier of engine rings and casings for IGT and aircraft engines, aircraft exhaust assemblies and furnace tubes for the petrochemical industry.
In the first quarter ended 31 March 2001, the last published quarterly results (unaudited), DONCASTERS reported income before tax and extraordinary items, excluding the effects of SFAS 133, of (pound)6.8 million (US$9.7 million) (31 March 2000: (pound)2.3 million (US$3.3 million)), on net sales of (pound)87.5 million (US$125.1 million) (31 March 2000: (pound)71.8 million (US$102.7 million)).
For the year ended 31 December 2000, DONCASTERS reported income before interest, tax and extraordinary items of (pound)30.1 million (US$43.0 million) (1999: (pound)23.9 million (US$34.2 million)), and income before tax and extraordinary items of (pound)19.9 million (US$28.5 million) (1999: (pound)14.1 million (US$20.2 million)) on net sales of (pound)310.6 million (US$444.2 million) (1999: (pound)284.7 million (US$407.1 million)).
Information on RCGH and Ross Catherall
RCGH is a new company backed by RBPE to make the Offer. RCGH owns Ross Catherall, a leading independent producer of vacuum and air melted nickel and cobalt based superalloys with manufacturing facilities in the USA and Europe. These materials are used extensively in the engineered products of Ross Catherall in addition to high temperature and performance applications throughout the world's aerospace, automotive, IGT and medical industries.
Ross Catherall is a leading European manufacturer of machined airfoils for use within the hottest sections of all types of gas turbine engines and of the machined and fabricated combustion sections of both aerospace and industrial gas turbines. Ross Catherall is also the largest independent global manufacturer of investment cast turbine wheels for use in automobile and truck turbochargers.
For the year ended 31 December 2000, Ross Catherall generated income before interest, tax, exceptional items and disposal of fixed assets of (pound)15.7 million (US$22.5 million) (1999: (pound)15.0 million (US$21.5 million)) on net sales of (pound)127.8 million (US$182.8 million) (1999: (pound)115.4 million (US$165.0 million)).
Information on RBPE and The Royal Bank of Scotland Group plc
RBPE is a leading UK manager of private equity with funds under management from The Royal Bank of Scotland Group plc and other institutional clients. In the year ended 31 December 2000, RBPE invested approximately (pound)81 million (US$116 million) in 25 new and existing investments (1999: (pound)208 million (US$297 million) in 27 new and existing investments). In the year ended 31 December 2000, RBPE realised (pound)66 million (US$94 million) from 21 investments (1999: (pound)81 million (US$116 million) from 15 investments). RBPE's funding profile allows flexibility in the structure and timing of both investment and realisation, allowing it to work with management to generate optimal returns. RBPE operates from four offices in the United Kingdom and has a number of joint venture operations in Europe. RBPE, whose ultimate parent is RBSG, will manage the investment that will be made through RBI.
RBSG is a leading UK financial services group. The principal businesses of RBSG are the provision of banking, insurance and related financial services. For the 15 months to 31 December 2000, RBSG reported total income of (pound)12.1 billion (US$17.3 billion) (year ended 30 September 1999: (pound)4.1 billion (US$5.9 billion)) and profit before taxation and after exceptional items of (pound)3.4 billion (US$4.9 billion) (year ended 30 September 1999: (pound)1.2 billion (US$1.7 billion)). As at 31 December 2000, the total assets and net assets of RBSG were (pound)320.0 billion (US$457.6 billion) and (pound)23.1 billion (US$33.0 billion) respectively.
Information on RBPE's future plans for Ross Catherall, DONCASTERS and RCGH
The combination of Ross Catherall and DONCASTERS brings together two highly complementary groups to create a strategically important global supplier able to meet the needs of a wide range of manufacturers of gas turbines for applications in industrial and aerospace sectors. In other sectors, such as specialised automotive applications and the production of high technology superalloys, the equally complementary skills and products of the two groups provide a sound base for future investment and development to meet the requirements of strongly growing end markets.
The combined pro forma net sales of Ross Catherall and DONCASTERS for the year ended 31 December 2000 totalled (pound)438.4 million (US$626.9 million) and pro forma income before interest, tax, exceptional items, extraordinary items and disposal of fixed assets totalled (pound)45.8 million (US$65.5 million).
Financing
The total cash consideration of the Offer will be financed from equity and loan stock invested in RCGH by RBI from existing financial resources and new debt facilities set up for the purpose of making the acquisition. JPMorgan is satisfied that RCGH has sufficient funds available to satisfy full acceptance of the Offer.
RCGH is a recently incorporated company which has acquired Ross Catherall from RBI. Following the Offer becoming or being declared unconditional in all respects, Ross Catherall will be acquired by DONCASTERS and will become a wholly owned subsidiary of DONCASTERS.
Total debt facilities and equity funding of approximately (pound)494 million (US$706 million) has been provided by RBI, RBS and The Chase Manhattan Bank in order to facilitate RCGH's acquisition of DONCASTERS and the refinancing of its existing debt, the subsequent acquisition of Ross Catherall and the refinancing of its existing debt, and to provide ongoing working capital funding.
Management and Employees
RCGH has undertaken that the existing employment rights (including pension rights) of all employees of DONCASTERS and its subsidiaries will be fully safeguarded.
Holdings of DONCASTERS ADSs and DONCASTERS Shares
Neither RCGH, nor any of its directors, nor, so far as RCGH is aware, any person acting in concert with RCGH, owns or controls any DONCASTERS ADSs or DONCASTERS Shares or holds any option to purchase DONCASTERS ADSs or DONCASTERS Shares or has entered into any derivative referenced to either DONCASTERS ADSs or DONCASTERS Shares which remain outstanding or (other than disclosed above) has received any irrevocable commitment to accept the Offer.
UK Dealing Disclosure Requirements
The Panel wishes to draw attention to certain UK dealing disclosure requirements following the announcement by DONCASTERS that it was exploring strategic alternatives including a possible sale of the Company. That announcement (made on 6 November 2000) commenced an offer period in accordance with the UK City Code, which is published and administered by the Panel. The Offer Period is deemed to commence at the time when an announcement is made of a proposed or possible offer, with or without terms.
The above disclosure requirements are set out in more detail in Rule 8 of the UK City Code. In particular, Rule 8.3 requires public disclosure of dealings during the Offer Period by persons who own or control, or who would as a result of any transaction own or control, one per cent. or more of any class of relevant securities of the offeror or offeree company. Relevant securities include DONCASTERS ADSs and DONCASTERS Shares and instruments convertible into DONCASTERS ADSs and DONCASTERS Shares. In the case of the Offer, this requirement will apply until the first closing date or, if this is later, the date on which the Offer becomes or is declared wholly unconditional.
Disclosure should be made on an appropriate form no later than 12 noon London time on the business day following the date of the dealing transaction. These disclosures should be sent to the Company Announcements Office of the London Stock Exchange (fax number: +44 (0)20 7588 6057) and to the Panel (fax number: +44 (0)20 7256 9386).
The Panel requests that member firms advise those of their clients who wish to deal in the relevant securities of DONCASTERS that they may be affected by these requirements. If there is any doubt as to their application, the Panel should be consulted (telephone number: +44 (0)20 7638 0129, fax number: +44 (0)20 7256 9386).
DONCASTERS Share Option Schemes
The Offer will extend to all DONCASTERS Shares (including those DONCASTERS Shares underlying the DONCASTERS ADSs) unconditionally allotted or issued fully paid (or credited as fully paid) upon exercise of options under the DONCASTERS Share Option Schemes while the Offer remains open for acceptance. Appropriate proposals will, in due course, be put to the holders of options under the DONCASTERS Share Option Schemes.
Inducement fee undertaking
The Offer is being made pursuant to the terms of a Transaction Agreement dated 30 April 2001 entered into between RCGH and DONCASTERS which includes an undertaking by DONCASTERS to pay RCGH an inducement fee of US$2.4 million ((pound)1.7 million) under certain limited circumstances. This fee is payable in either of the following events:
(a) if the Offer lapses or is withdrawn in accordance with its terms and prior thereto a competing offer has been announced, and subsequently that competing offer, or another competing offer announced prior to the Offer lapsing or having been withdrawn, becomes or is declared unconditional in all respects; or
(b) if the Offer lapses or is withdrawn in accordance with its terms and prior thereto the board of directors of DONCASTERS (or any committee thereof) shall have withdrawn or modified, in a manner adverse to RCGH, its approval or recommendation of the Offer or approved or recommended a competing offer.
Details of the Transaction Agreement, including the inducement fee undertaking, will be included in the Offer Document.
General
(a) The Offer will be subject to the applicable requirements of both the UK City Code and US federal securities laws.
(b) The initial offer period will expire 20 Business Days after the date the Offer is commenced, unless extended by RCGH.
(c) It is RCGH's intention, following the Offer becoming or being declared unconditional in all respects and subject to the applicable requirements of The New York Stock Exchange, that DONCASTERS should apply to The New York Stock Exchange for the DONCASTERS ADSs to be delisted. Delisting would significantly reduce the liquidity of any DONCASTERS ADSs not assented to the Offer.
(d) If RCGH receives acceptances under the Offer in respect of, and/or otherwise acquires, 90 per cent. or more of the DONCASTERS Shares to which the Offer relates (including those shares underlying the DONCASTERS ADSs), RCGH intends to exercise its rights pursuant to the provisions of sections 428 to 430F (inclusive) of the Companies Act compulsorily to acquire the remaining DONCASTERS Shares.
(e) This announcement does not constitute an invitation to purchase any securities.
(f) The definitions of certain expressions used in this announcement are contained in Appendix II.
(g) The formal Offer Document, setting out details of the Offer, and accompanied by the Form(s) of Acceptance and/or Letter(s) of Transmittal, will be mailed to DONCASTERS Shareholders in due course.
All historical financial information has been translated on the basis of (pound)1 = US$1.43.
Additional information and where to find it
RCGH will be filing a Tender Offer Statement, which contains the Offer Document, on Schedule TO and DONCASTERS will be filing a Solicitation/ Recommendation Statement on Schedule 14D-9 with the Securities and Exchange Commission (the "SEC") on or before the date the Offer Document and Solicitation/ Recommendation Statement are mailed to DONCASTERS Shareholders. DONCASTERS SHAREHOLDERS ARE ADVISED TO READ THE TENDER OFFER STATEMENT, OFFER DOCUMENT, SOLICITATION/ RECOMMENDATION STATEMENT AND THE RELATED DOCUMENTATION WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.
Free copies of the Tender Offer Statement, which contains the Offer Document, and free copies of the Solicitation/ Recommendation Statement, once available, and DONCASTERS' other filings with the SEC may be obtained from DONCASTERS. Free copies of RCGH's filings may be obtained by directing a request to MacKenzie Partners, Inc.: Address: 156 Fifth Avenue, NY, NY 10010, USA; telephone: +1 212 929 5500 or toll-free in the US: +1 800 322 2885.
The availability of the Offer to DONCASTERS Shareholders who are not resident in the United States or the United Kingdom may be affected by the laws of the relevant jurisdictions. DONCASTERS Shareholders who are not resident in the United States or the United Kingdom should inform themselves about and observe any applicable requirements.
The Offer will not be made, directly or indirectly, in or into Canada, Japan or Australia, or by use of the mails of, or by any means or instrumentality (including without limitation, facsimile transmission, e-mail, telex or telephone) or inter-state or foreign commerce of, or any facilities of a national securities exchange of Canada, Japan or Australia. Accordingly, copies of this announcement are not being, and must not be, mailed or otherwise distributed or sent in or into or from Canada, Japan or Australia and doing so may invalidate any purported acceptance of the Offer.
JPMorgan, which is regulated in the United Kingdom by The Securities and Futures Authority Limited, is acting for RBPE and RCGH in connection with the Offer and for no one else and will not be responsible to anybody other than RBPE and RCGH for providing the protections afforded to customers of JPMorgan and for their subsidiaries and affiliates, nor for providing advice in relation to the Offer.
Credit Suisse First Boston (Europe) Limited (together with its affiliates, including Credit Suisse First Boston Corporation, "CSFB"), which is regulated in the United Kingdom by The Securities and Futures Authority Limited, and its affiliates are acting for DONCASTERS in connection with the Offer and for no one else and will not be responsible to anybody other than DONCASTERS for providing the protections afforded to customers of CSFB or for providing advice in relation to the Offer.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
This announcement contains forward-looking statements within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements with respect to net sales, earnings, performance, strategies, prospects and other aspects of the businesses of RCGH, Ross Catherall and DONCASTERS are based on current expectations that are subject to risks and uncertainties. A number of factors could cause actual results or outcomes to differ materially from those indicated by such forward-looking statements. These factors include, but are not limited to, risks and uncertainties as set forth in DONCASTERS' filings with the SEC, and include risks and uncertainties relating to the failure to obtain expected synergies from the Offer, delays in obtaining or adverse conditions contained in any required regulatory approvals, changes in laws or regulations, economic or weather conditions affecting future sales and margins, legislative and regulatory changes (including revised environmental and safety requirements), availability and cost of capital and other similar factors. Readers are referred to DONCASTERS' most recent reports filed with the SEC.
APPENDIX I: TERMS AND CONDITIONS OF THE OFFER
The Offer will be subject to the following Conditions:
(i) valid acceptances having been received (and not, where permitted, properly withdrawn) by not later than 10:00 am (New York City time), 3:00 pm (London time), on the twentieth Business Day following commencement of the Offer (or such later time(s) and/or date(s) as RCGH may, with the consent of the Panel on Takeovers and Mergers (the "Panel") or in accordance with the UK City Code on Takeovers and Mergers (the "UK City Code"), decide) in respect of not less than ninety (90) per cent. (or such lower percentage in excess of fifty (50) per cent. determined as stated below as RCGH may decide) in nominal value of the DONCASTERS Shares to which the Offer relates. This condition will not be satisfied unless RCGH shall have acquired or agreed (unconditionally or subject only to conditions that will be fulfilled upon the mere lapse of time following the Offer becoming or being declared unconditional in all respects) to acquire (whether pursuant to the Offer or otherwise) DONCASTERS Shares carrying or representing, in the aggregate, more than fifty (50) per cent. of the voting rights then normally exercisable at general meetings of DONCASTERS, including for this purpose (to the extent, if any, required by the Panel) any such voting rights attaching to any DONCASTERS Shares that are unconditionally allotted or issued before the Offer becomes or is declared unconditional as to acceptances, whether pursuant to the exercise of any outstanding subscription or conversion rights or otherwise and, for this purpose:
(a) the expression "DONCASTERS Shares to which the Offer relates" shall be construed in accordance with Sections 428 to 430F of the Companies Act 1985 (as amended) (the "Companies Act");
(b) DONCASTERS Shares that have been unconditionally allotted but not issued shall be deemed to carry the voting rights that they will carry upon being entered into the register of members of DONCASTERS; and
(c) valid acceptances shall be treated as having been received in respect of any DONCASTERS Shares that RCGH shall, pursuant to Section 429(8) of the Companies Act, be treated as having acquired or contracted to acquire by virtue of the acceptances of the Offer;
provided that, unless RCGH otherwise determines, this Condition (i) shall be capable of being satisfied only at a time when all of the other Conditions (ii) to (xiii) inclusive have been either satisfied, fulfilled or, to the extent permitted, waived;
(ii) all possible prohibitions of putting a concentration into effect pursuant to Section 41(1) of the German Act against Restraints of Competition (Gesetz gegen Wettbewerbsbeschrankungen - GWB) in relation to the Offer have been removed and any negative clearance granted by the Bundeskartellamt is not made subject to conditions which are unacceptable to RCGH acting reasonably;
(iii) the UK Office of Fair Trading indicating in terms satisfactory to RCGH that the UK Secretary of State for Trade and Industry does not intend to refer the acquisition of DONCASTERS pursuant to the Offer or any matter arising therefrom to the UK Competition Commission;
(iv) any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (as amended) and the regulations made thereunder relating to the proposed acquisition of DONCASTERS pursuant to the Offer having expired or been terminated;
(v) either:
(a) the Irish Minister for Enterprise, Trade and Employment (the "Irish Minister") having stated in writing that she does not propose to make an order under section 9 of the Irish Mergers, Take-overs and Monopolies (Control) Act, 1978 as amended (the "Irish Act") in relation to the proposed acquisition of DONCASTERS; or
(b) the Irish Minister not having referred the proposed acquisition of DONCASTERS to the Irish Competition Authority within the time period stipulated in section 7 of the Irish Act;
(vi) any applicable period for investigation as a result of the filing by RCGH under The Exon-Florio Amendment, a provision of the Omnibus Trade and Competitiveness Act of 1988 and codified as part of the Defense Production Act of 1950, (as amended) having expired or been terminated;
(vii) no relevant authority having intervened in a manner which would or would be reasonably likely to:
(a) make the Offer, its implementation or the acquisition or proposed acquisition by RCGH of any DONCASTERS Shares in, or control of, DONCASTERS void, illegal and/or unenforceable in or under the laws of any relevant jurisdiction, or otherwise directly or indirectly restrain, prevent, prohibit, materially restrict or materially delay or otherwise materially adversely interfere with the implementation thereof or impose additional materially adverse conditions or obligations with respect thereto, or otherwise materially impede, challenge or adversely interfere with the Offer or its implementation or such acquisition or proposed acquisition, or require material amendment to the terms of the Offer or the proposed acquisition of any DONCASTERS Shares or the acquisition of control of DONCASTERS by RCGH;
(b) impose any material limitation on the ability of any of RCGH or any member of the Wider DONCASTERS Group (as defined herein) to conduct any of their respective businesses or to own any of their respective assets or properties or any part thereof, in any such case in a manner or to an extent that is material to the Group (as defined herein) taken as a whole;
(c) impose any material limitation on, or result in a delay in, the ability of RCGH or any member of the Wider DONCASTERS Group to acquire or to hold or to exercise effectively, directly or indirectly, all or any rights of ownership in respect of shares or other securities (or the equivalent) in, or to exercise management control over, any subsidiary (in any such case, to an extent that is material to the Group taken as a whole);
(d) require RCGH or any member of the Wider DONCASTERS Group to acquire, or to offer to acquire, any shares or other securities (or the equivalent) of any member of the Wider DONCASTERS Group owned by any third party, in any such case, to an extent that is material to the Group taken as a whole;
(e) result in DONCASTERS or any other member of the Wider DONCASTERS Group ceasing to be able to carry on business under any name under which it at present does so, the consequence of which would be material to the Group taken as a whole; or
(f) otherwise adversely affect any or all of the businesses, assets, profits or prospects of RCGH or any member of the Wider DONCASTERS Group, to an extent that is material to the Group taken as a whole;
and all applicable waiting and other time periods during which any relevant authority could have intervened in such a way under the laws of any relevant jurisdiction having expired, lapsed or been terminated;
(viii) all necessary notifications and filings having been made, all necessary waiting and other time periods under any applicable legislation or regulation of any relevant jurisdiction having expired, lapsed or been terminated and all statutory or regulatory obligations in any relevant jurisdiction having been complied with in each case in connection with the Offer or the acquisition of any shares or other securities (or the equivalent) in, or control of, DONCASTERS or any other member of the Wider DONCASTERS Group by RCGH or the carrying on by RCGH, DONCASTERS or any other member of the Wider DONCASTERS Group of its business (where the absence of such authorisations would be expected to have an adverse effect which is material to the Group taken as a whole) having been obtained, in terms and in a form reasonably satisfactory to RCGH, from all relevant authorities or (without prejudice to the generality of the foregoing) from any person or bodies with whom any member of the Wider DONCASTERS Group has entered into contractual arrangements and such authorisation and determinations together with all authorisations and determinations necessary or appropriate for any member of the Wider DONCASTERS Group to carry on its business remaining in full force and effect at the time when the Offer becomes otherwise unconditional in all respects and no notice or intimation of any intention to revoke, suspend, restrict, modify or not renew any of the same having been received;
(ix) except as disclosed in writing to RCGH prior to 30 April 2001, there being no provision (excluding for the avoidance of doubt any provision the operation of which in the context of the Offer has been validly waived by the person entitled to the benefit thereof) of any agreement to which any member of the Wider DONCASTERS Group is a party, or by or to which it or any of its assets is or are or may be bound, entitled or subject or any circumstance that, in each case as a consequence of the Offer or the acquisition or proposed acquisition of any DONCASTERS Shares in, or control of, DONCASTERS or any other member of the Wider DONCASTERS Group by RCGH or any change in the control of DONCASTERS or any such other member or otherwise, will or is reasonably likely to result in, to an extent which would be material in the context of the Group taken as a whole:
(a) any monies borrowed by or any other indebtedness or liabilities, actual or contingent of, or grant available to, DONCASTERS or any member of the Wider DONCASTERS Group being or becoming repayable or capable of being declared repayable immediately or prior to its stated repayment date, or the ability of DONCASTERS or any other member of the Wider DONCASTERS Group to borrow monies or incur any indebtedness being withdrawn or inhibited or becoming capable of being withdrawn;
(b) the creation or enforcement of any mortgage, charge or other security interest over the whole or any part of the business, property, assets or interests of DONCASTERS or any other member of the Wider DONCASTERS Group or any such mortgage, charge or other security interest becoming enforceable;
(c) any such arrangement, agreement, licence, permit, franchise or instrument, or the rights, liabilities, obligations or interests of DONCASTERS or any member of the Wider DONCASTERS Group thereunder or the interests or business of any such company in or with any other person, firm, company or body (or any arrangement or arrangements relating to any such interests or business), being, or becoming capable of being, terminated or adversely modified or affected or any adverse action being taken or any material obligation or material liability arising thereunder;
(d) any material asset or interest of DONCASTERS or any other member of the Wider DONCASTERS Group being or falling to be disposed of or charged, in each case otherwise than in the ordinary course of business;
(e) DONCASTERS or any other member of the Wider DONCASTERS Group ceasing to be able to carry on business under any name under which it at present does so;
(f) the creation of liabilities actual or contingent by DONCASTERS or any other member of the Wider DONCASTERS Group, otherwise than in the ordinary course of business; or
(g) the value of or the financial or trading position or prospects of DONCASTERS or any other member of the Wider DONCASTERS Group being adversely prejudiced or adversely affected;
and no event having occurred that, under any provision of any such arrangement, agreement, licence, permit or other instrument, will or may reasonably be expected to result in any of the events or circumstances that are referred to in paragraphs (a) to (g) of this Condition (ix) in any case where such result would be material in the context of the Group taken as a whole;
(x) since 31 December 2000 and except as disclosed in DONCASTERS' Annual Report on Form 20-F for the fiscal year ended 31 December 1999, or as disclosed in any Report of Foreign Private Issuer on Form 6-K of DONCASTERS prior to 30 April 2001 (such information being "publicly announced") or as disclosed in writing to RCGH prior to 30 April 2001, neither DONCASTERS nor any other member of the Wider DONCASTERS Group having:
(a) issued or agreed to issue additional shares of any class, or securities convertible into, or rights, warrants or options to subscribe for or acquire, any such shares or convertible securities (save as between DONCASTERS and wholly-owned subsidiaries of DONCASTERS and except for any options granted under the DONCASTERS Share Option Schemes prior to 30 April 2001);
(b) recommended, declared, paid or made or proposed to recommend, declare or pay any dividend or other distribution (save as between DONCASTERS and wholly-owned subsidiaries of DONCASTERS) whether in cash or otherwise;
(c) made or committed to make any change in its loan or (save as between DONCASTERS and wholly-owned subsidiaries of DONCASTERS and except for any options granted under the DONCASTERS Share Option Schemes prior to 30 April 2001) share capital;
(d) merged with or demerged or acquired any body corporate or partnership or business or acquired or disposed of or transferred, mortgaged or charged or created any security interest over any material assets or (other than in the ordinary course of business) any right, title or interest in any material assets (including shares and trade investments) (other than in the ordinary course of business) or authorised, proposed or announced any intention to do so or implemented, effected or authorised, proposed or announced its intention to implement, effect, authorise or propose any reconstruction, amalgamation, scheme or other transaction or arrangement (otherwise than in the ordinary course of business) (save as between DONCASTERS and wholly-owned subsidiaries of DONCASTERS), that is material in the context of the Group taken as a whole;
(e) issued or agreed to issue any debentures or (save in the ordinary course of business) incurred or increased any indebtedness or contingent liability (save as between DONCASTERS and wholly-owned subsidiaries of DONCASTERS) that is material in the context of the Group taken as a whole;
(f) purchased, redeemed or repaid any of its own shares or other securities or reduced or made any other change to any part of its share capital, or proposed to do so, that is material in the context of the Group taken as a whole;
(g) taken or proposed any corporate action or had any legal proceedings instituted or threatened against it or petition (not of a frivolous or vexatious nature) presented for its winding up (voluntarily or otherwise), dissolution or reorganisation or for the appointment of a receiver, administrator, administrative receiver, liquidator, trustee or similar officer of all or any of its assets and net sales or for any analogous person in any jurisdiction and which is material in the context of the Group taken as a whole;
(h) 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 and which is material in the context of the Group taken as a whole;
(i) waived or compromised any claim that is material in the context of the Group taken as a whole;
(j) made any alteration to its Memorandum or Articles of Association, or other incorporation documents, except as contemplated by the Offer;
(k) entered into or varied or announced its intention to enter into or vary any contract, transaction, arrangement or commitment (whether in respect of capital expenditure or otherwise) which is of a long term, unusual or onerous nature, or which involves or could involve an obligation of a nature or magnitude which is, in any such case, material in the context of the Group taken as a whole;
(l) entered into or varied the terms of any service agreement with any director of DONCASTERS; or
(m) entered into any agreement, contract or commitment or made any offer (which remains open for acceptance) with respect to any of the transactions, matters or events referred to in this Condition (x) in any such case where the effect is material in the context of the Group taken as a whole;
(xi) since 31 December 2000 and except as publicly announced or as disclosed in writing to RCGH prior to 30 April 2001:
(a) there having been no adverse change or deterioration in the business, assets, financial or trading position or profits or prospects of DONCASTERS or any other member of the Wider DONCASTERS Group that is (in the aggregate) material to the Group taken as a whole;
(b) no litigation, arbitration proceedings, prosecution or other legal proceedings to which DONCASTERS or any other member of the Wider DONCASTERS Group is or may become a party (whether as plaintiff or defendant or otherwise) or any investigation (save as a result of the Offer) by any relevant authority having been threatened, announced or instituted by or against or in respect of DONCASTERS or any other member of the Wider DONCASTERS Group that, in any such case, is material in the context of the Group taken as a whole;
(c) no contingent or other liability having arisen or become apparent or increased that would or would be reasonably likely to materially and adversely affect the Group taken as a whole; and
(d) there having been no inquiry or investigation (save as a result of the Offer) by, or complaint, or reference to, any relevant authority of a material nature to DONCASTERS in respect of DONCASTERS or any other member of the Wider DONCASTERS Group and no such inquiry, investigation, complaint or reference having been threatened, announced, implemented, instituted or remaining outstanding that, in any such case, is material to the Group taken as a whole;
(xii) RCGH not having discovered that:
(a) any financial, business or other information concerning the Wider DONCASTERS Group publicly announced or disclosed in writing to RCGH prior to 30 April 2001 which is material in the context of the acquisition of DONCASTERS by RCGH is misleading, contains a material misrepresentation of fact or omits to state a fact necessary to make the information contained therein not materially misleading; or
(b) any member of the Wider DONCASTERS Group or partnership, company or other entity in which any member of the Wider DONCASTERS Group has a significant economic interest and which is not a subsidiary undertaking of DONCASTERS is subject to any liability, contingent or otherwise, which is not disclosed in any publicly announced information and which is material in the context of the Group taken as a whole; and
(xiii) RCGH not having discovered:
(a) that any past or present member of the Wider DONCASTERS Group has not complied with all applicable legislation or regulations of any jurisdiction with regard to the 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) on the part of any member of the Wider DONCASTERS Group which in any case is material in the context of the Group taken as a whole;
(b) that:
(1) there has been a disposal, spillage or leak of waste or hazardous substance or any substance likely to impair the environment or harm human health on; or
(2) there has been an emission or discharge of any waste or hazardous substance or any substance likely to impair the environment or harm human health from,
any land or other asset now or previously owned, occupied or made use of by any past or present member of the Wider DONCASTERS Group which would be likely to give rise to any liability (whether actual or contingent) on the part of any member of the Wider DONCASTERS Group which in any case is material in the context of the Group taken as a whole;
(c) that there is any liability (whether actual or contingent) to make good, repair, reinstate or clean up any property now or previously owned, occupied or made use of by any past or present member of the Wider DONCASTERS Group under any environmental legislation, regulation, notice, circular or order of any relevant authority which in any case is material in the context of the Group taken as a whole;
(d) that circumstances exist (whether as a result of the making of the Offer or otherwise):
(1) which would be likely to lead to any relevant authority instituting; or
(2) whereby any member of the Wider DONCASTERS Group or any present or past member of the Wider DONCASTERS Group would be likely to be required to institute,
an environmental audit or take any other steps which would in any such case be likely to result in any actual or contingent liability to improve or install new plant or equipment or make good, repair, reinstate or clean up any land or other asset now or previously owned, occupied or made use of by any member of the Wider DONCASTERS Group which in any case is material in the context of the Group taken as a whole; or
(e) that circumstances exist whereby a person or class of persons would be likely to have any claim or claims in respect of any product or process of manufacture or materials used therein now or previously manufactured, sold or carried out by any past or present member of the Wider DONCASTERS Group which claim or claims would be likely to affect any member of the Wider DONCASTERS Group to an extent which is material in the context of the Group taken as a whole.
Subject to the requirements of the Panel, RCGH reserves the right to waive all or any of the above Conditions, in whole or in part, except Condition (i).
The Offer will lapse unless the Conditions set out above have been determined by RCGH to have been and to remain satisfied or (if capable of waiver) waived by 10.00 am (New York City time), 3.00 pm (London time) on the twentieth Business Day following commencement of the Offer or such later time and/or date as RCGH may determine in accordance with the UK City Code or with the consent of the Panel and subject to any requirement of the laws of the US. RCGH shall be under no obligation to waive (if capable of waiver) or treat as fulfilled any of Conditions (i) to (xiii) (inclusive) by a date earlier than the latest date specified above for the fulfilment thereof notwithstanding that any such Condition or the other conditions of the Offer may at any date earlier than such latest date have been waived or fulfilled and that there are at such earlier date no circumstances indicating that any of such conditions may not be capable of fulfilment.
If RCGH is required by the Panel to make an offer for DONCASTERS Shares under the provisions of Rule 9 of the UK City Code, RCGH may make such alterations to the terms and conditions of the Offer as are necessary to comply with the provisions of that Rule.
If the Offer lapses, the Offer will cease to be capable of further acceptance and DONCASTERS Shareholders accepting the Offer and RCGH shall upon the Offer lapsing cease to be bound by acceptances delivered on or before the date on which the Offer lapses.
For the purposes of these Conditions:
(a) "relevant authority" means any government, government department or governmental, quasigovernmental, supranational, statutory, regulatory or investigatory body, court, trade agency, professional association or institution or environmental body or any other body or person in any jurisdiction;
(b) a relevant authority shall be regarded as having "intervened" if it has instituted or implemented any action, proceedings, suit, investigations or inquiry or reference, or made, enacted or proposed any statute, regulation, decision or order, or taken any measurers or other steps and "intervene" shall be construed accordingly;
(c) "authorisation" means authorisations, orders, grants, recognitions, confirmations, consents, licences, clearances, permissions, exemptions and approvals;
(d) "the Group" means DONCASTERS and its subsidiaries and "subsidiary" has the meaning given by the Companies Act and "Wider DONCASTERS Group" means DONCASTERS and associated undertakings and any other body corporate, partnership, joint venture or person in which DONCASTERS and such undertakings (aggregating their interests) have an interest of more than 20 per cent. of the voting or equity capital or the equivalent; and
(e) "material to the Group taken as a whole" or "material in the context of the Group taken as a whole" means would have an adverse change or deterioration in the business, assets, financial or trading position or profits or prospects of DONCASTERS or its subsidiaries which is material to DONCASTERS and its subsidiaries taken as a whole.
The Offer will lapse if it is referred to the Competition Commission before the twentieth Business Day following commencement of the Offer or the date when the Offer becomes or is declared unconditional whichever is the later.
APPENDIX II: DEFINITIONS "Acceptance Condition" - the Condition as to acceptances as set out in paragraph (i) of Appendix I to this announcement "Act" or "Companies Act" - the UK Companies Act 1985 (as amended) "Business Day" - a day (excluding Saturday and Sunday or a US federal holiday), consisting of the time period from 12.01 a.m. until and including 12.00 midnight (New York City time) "Closing Price" - the closing price on The New York Stock Exchange "Conditions" - the conditions to the Offer set out in Appendix I and "Condition" means any one of them "Credit Suisse First Boston" - Credit Suisse First Boston (Europe) Limited "CSFB" - Credit Suisse First Boston and its affiliates, including Credit Suisse First Boston Corporation "DONCASTERS" or the "Company" - DONCASTERS plc "DONCASTERS ADSs" - American Depositary Shares of DONCASTERS each representing two DONCASTERS Shares "DONCASTERS Shareholders" - holders of DONCASTERS ADSs and DONCASTERS Shares "DONCASTERS Share Option Schemes" - the DONCASTERS 1996 Long-Term Incentive Plan-Share Options, the DONCASTERS Savings Related Share Option Scheme, the DONCASTERS US Employee Stock Purchase Plan, the Triplex Lloyd 1995 UK Share Savings Scheme and the Triplex Lloyd 1994 Executive Share Option Scheme "DONCASTERS Shares" - the existing unconditionally allotted and issued and fully paid ordinary shares of 25p each in the capital of DONCASTERS (including those underlying DONCASTERS ADSs but not, for the avoidance of doubt, such DONCASTERS ADSs) and any further such shares which are unconditionally allotted or issued and fully paid after the date hereof and before the date on which the Offer closes including shares unconditionally allotted or issued pursuant to the exercise of options under the DONCASTERS Share Option Schemes "Exchange Act" - The US Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder "Form of Acceptance" - the form of acceptance relating to acceptance of the Offer by DONCASTERS Shareholders "JPMorgan" - J. P. Morgan plc "Letter of Transmittal" - the Letter of Transmittal relating to acceptance of the Offer by holders of DONCASTERS ADSs "New York Stock Exchange" or "NYSE" - The New York Stock Exchange, Inc. "Offer" - the recommended cash offer to acquire all of the issued and to be issued share capital of DONCASTERS (including those shares underlying the DONCASTERS ADSs) to be made by RCGH as described in this announcement and, where the context admits, any subsequent revision, variation, extension or renewal thereof "Offer Document" - the document containing and setting out the terms and conditions of the Offer to be sent to DONCASTERS Shareholders and included in the Tender Offer Statement to be filed with the SEC "Offer Period" - the period commencing on 6 November 2000, and ending on whichever of the following dates shall be the latest: i) the first closing date of the Offer; ii) the date on which the Offer lapses; or iii) the date on which the Offer becomes or is declared unconditional "Panel" - The UK Panel on Takeovers and Mergers "(pound)", "p", "pence" - denotes the lawful currency of the UK "RBI" - Royal Bank Investments Limited, a wholly owned subsidiary of The Royal Bank of Scotland Group plc "RBPE" - Royal Bank Private Equity Limited, a wholly owned subsidiary of The Royal Bank of Scotland Group plc "RBS" - The Royal Bank of Scotland plc, a wholly owned subsidiary of The Royal Bank of Scotland Group plc "RBSG" - The Royal Bank of Scotland Group plc "RCGH" - RCG Holdings Limited, a subsidiary of The Royal Bank of Scotland Group plc "Ross Catherall" - Ross Catherall Group Limited "SEC" - The US Securities and Exchange Commission "SFAS" - Statement of Financial Accounting Standard "Tender Offer Statement" - the tender offer statement which will be filed on Schedule TO in connection with the Offer "UK" or "United Kingdom" - The United Kingdom of Great Britain and Northern Ireland "UK City Code" - The UK City Code on Takeovers and Mergers "US" or "United States" - The United States of America, its territories and possessions, any State of the United States and the District of Columbia and all areas subject to its jurisdiction or any subdivision thereof "US GAAP" - generally accepted accounting principles in the US "US Persons" - US persons as defined in Regulation S of the US Securities Act "US$" or "US dollar" - denotes the lawful currency of the United States