GBP 1.1BN DEAL - RECOMMENDED CASH OFFER FOR HELLERMANNTYTON GROUP PLC
RECOMMENDED CASH OFFER
FOR
HELLERMANNTYTON GROUP PLC
BY
DELPHI AUTOMOTIVE PLC
to be effected
by way of a Scheme of Arrangement
under Part 26 of the Companies Act 2006
Summary
· The boards of HellermannTyton Group PLC ("HellermannTyton") and Delphi Automotive PLC ("Delphi") are pleased to announce that they have reached agreement on the terms of a recommended cash offer by Delphi and/or a wholly-owned subsidiary undertaking of Delphi, for the entire issued and to be issued share capital of HellermannTyton. It is intended that the Acquisition will be effected by way of a Court-sanctioned scheme of arrangement of HellermannTyton under Part 26 of the Companies Act 2006.
· Under the terms of the Acquisition, HellermannTyton Shareholders will be entitled to receive 480 pence in cash for each HellermannTyton Share held at the Scheme Record Time.
· In addition, HellermannTyton Shareholders will continue to be entitled to receive an interim dividend in respect of the six-month period ended 28 June 2015 of up to 2.2 pence for each HellermannTyton Share held.
· The consideration of 480 pence in cash for each HellermannTyton Share represents:
- a premium of approximately:
· 44.5 per cent. to the Closing Price of 332 pence per HellermannTyton Share on 29 July 2015, being the last Dealing Day prior to this Announcement;
· 42.5 per cent. to the average Closing Price of approximately 337 pence per HellermannTyton Share for the one-month Volume Weighted Average Price ("VWAP") at 29 July 2015, being the last Dealing Day prior to this Announcement; and
· 35.2 per cent. to the average Closing Price of approximately 355 pence per HellermannTyton Share for the three-month VWAP at 29 July 2015, being the last Dealing Day prior to this Announcement; and
- an enterprise value of 14.7x HellermannTyton's EBITDA for its year ended 31 December 2014.
· Delphi does not currently hold any HellermannTyton Shares.
· The Offer values the entire issued and to be issued share capital of HellermannTyton at approximately £1.07 billion.
· The Board of HellermannTyton, which has been so advised by Goldman Sachs International and J.P. Morgan Cazenove as to the financial terms of the Offer, considers the terms of the Offer to be fair and reasonable. In providing advice to the Board of HellermannTyton, Goldman Sachs International and J.P. Morgan Cazenove have taken into account the commercial assessments of the Board of HellermannTyton.
· Accordingly, the Board of HellermannTyton intends to recommend unanimously that HellermannTyton Shareholders vote in favour of the Scheme at the Court Meeting and the Special Resolution to be proposed at the General Meeting, as all HellermannTyton Directors have irrevocably undertaken to do so in respect of their own beneficial holdings of 1,419,906 HellermannTyton Shares (representing, in aggregate, approximately 0.7 per cent. of the HellermannTyton Shares in issue on 29 July 2015 (being the latest practicable date prior to this Announcement)). Further details of these irrevocable undertakings are set out in Appendix III to this Announcement.
· In addition, Delphi has received non-binding letters of intent to vote in favour of the Scheme at the Court Meeting and the Special Resolution to be proposed at the General Meeting (or, if Delphi exercises its right to implement the Offer by way of a takeover offer, to accept such Offer) from Artemis Investment Management LLP in respect of 5,753,163 HellermannTyton Shares, from AXA Investment Managers UK Limited in respect of 7,643,347 HellermannTyton Shares and from JPMorgan Asset Management (UK) Limited in respect of 6,680,273 HellermannTyton Shares. Therefore, as at the date of this Announcement, Delphi has received non-binding letters of intent with respect to a total of 20,076,783 HellermannTyton Shares representing, in aggregate, approximately 9.3 per cent. of the HellermannTyton Shares in issue on 29 July 2015 (being the latest practicable date prior to this Announcement).
· The cash consideration payable to HellermannTyton Shareholders will be satisfied through a combination of new debt facilities and Delphi's existing cash resources.
· It is intended that the Acquisition will be effected by way of a scheme of arrangement of HellermannTyton under Part 26 of the Companies Act 2006. The Scheme will require the approval of Scheme Shareholders and the sanction of the Court. Upon the Scheme becoming effective, it will be binding on all Scheme Shareholders, irrespective of whether they attend or vote at the Court Meeting or the General Meeting (and if they attended and voted, whether or not they voted in favour). The Offer shall be put to HellermannTyton Shareholders at the Court Meeting and at the General Meeting. In order to become effective, the Scheme must be approved by a majority in number of the HellermannTyton Shareholders voting at the Court Meeting, either in person or by proxy, representing at least 75 per cent. in value of the HellermannTyton Shares voted. In addition, special resolutions implementing the Scheme must be passed by HellermannTyton Shareholders representing at least 75 per cent. of votes cast at the General Meeting. The Offer is also subject to the Conditions and further terms set out in Appendix I to this Announcement and to be set out in the Scheme Document, including the sanction of the Scheme by the Court and the satisfaction of certain regulatory conditions (including anti-trust clearances in the EU, Russia, Brazil, China and the US).
· The Board of Delphi believes the Acquisition will create an unrivalled global supplier of automotive electrical architecture products, providing customers with a broad portfolio of highly engineered and customised connection systems and cable management solutions. By leveraging HellermannTyton's and Delphi's common commitment to engineering, product development and customer service, the combined business will serve complementary customers with an enhanced product portfolio in expanded geographical regions.
· It is currently anticipated that the Scheme Document, containing full details of the Scheme, further information about the Acquisition and notices of the Court Meeting and the General Meeting, will be posted to HellermannTyton Shareholders and, for information only, to participants in the HellermannTyton Share Schemes, as soon as is reasonably practicable, and that the Scheme will become effective before the end of 2015, subject to the satisfaction (or, if applicable, waiver) of the Conditions set out in Appendix I to this Announcement. The latest date for the Scheme to become effective and the Acquisition to be completed will be 30 June 2016, or such later date (if any) as Delphi and HellermannTyton may, with the consent of the Panel, agree and (if required) the Court may allow.
· Delphi is a leading global technology company for automotive and commercial vehicle markets delivering solutions that help make vehicles safe, green and connected. Headquartered in Gillingham, UK, Delphi operates technical centres, manufacturing sites and customer support services in 33 countries.
· HellermannTyton is a leading global manufacturer and supplier of high performance and innovative cable management solutions, with strong end customer relationships and distribution channels to the automotive market and other industrial end markets including high growth subsectors such as alternative energy and mass transit.
Commenting on the Acquisition, David Newlands, Chairman of HellermannTyton, said:
"On behalf of the Board of HellermannTyton, I am pleased to announce our intention to recommend the Acquisition of HellermannTyton by Delphi to our shareholders. Having carefully considered all our options, the Board believes this is a compelling offer and an excellent outcome for HellermannTyton shareholders, employees and customers.
HellermannTyton continues to be strongly positioned to execute its strategy of delivering growth and sustainable returns in the medium and long term. Delphi's significant global capabilities in vehicle technologies will provide HellermannTyton with a strong platform to further innovate, grow and better serve its customers. The combination will ensure HellermannTyton continues to lead the way in the provision of cable management solutions.
We believe that the offer from Delphi provides HellermannTyton Shareholders with a value which is highly attractive. The HellermannTyton Directors believe the Acquisition recognises HellermannTyton's long term prospects and growth potential.
The HellermannTyton Directors believe this offer reflects the hard work that the executive team and all HellermannTyton employees have put into building HellermannTyton as a leading global manufacturer and provider of high performance and innovative cable management solutions."
Commenting on the Acquisition, Kevin P. Clark, President & Chief Executive Officer of Delphi, said:
"We are pleased to have reached this agreement with HellermannTyton, which will uniquely position Delphi to meet customer demand for customised cable management solutions and capitalise on additional growth opportunities in electrical architecture content. The acquisition of HellermannTyton's world-class business strengthens the product portfolio of our E/EA segment, enhances and diversifies our mix of global customers and further enables us to provide our customers with solutions to address the trends of Safe, Green and Connected. With consumers now demanding more connectivity in their vehicles, electrical architecture is the enabler to that added vehicle content. HellermannTyton positions Delphi to provide customers with an even broader portfolio of highly engineered and customized connection systems and cable management solutions. By leveraging the combined capabilities of both companies, we will be able to capitalise on additional growth opportunities and create significant value for our customers and shareholders."
Barclays is acting as sole financial adviser to Delphi.
Goldman Sachs International and J.P. Morgan Cazenove are acting as joint financial advisers and joint corporate brokers to HellermannTyton.
This summary should be read in conjunction with, and is subject to, the full text of this Announcement. In particular, the Offer is subject to Conditions and further terms set out in Appendix I to this Announcement and the terms and conditions to be set out in the Scheme Document and Forms of Proxy. The sources of information and bases of calculation in respect of certain financial information contained in this Announcement are set out in Appendix II to this Announcement. A summary of the irrevocable undertakings given by the HellermannTyton Directors is contained in Appendix III to this Announcement. Certain capitalised terms used in this Announcement are defined in Appendix IV to this Announcement.