GBP 400 M DEAL - RECOMMENDED CASH OFFER FOR LAVENDON GROUP PLC ("LAVENDON" OR THE "COMPANY") BY LOXAM SAS ("LOXAM" OR THE "OFFEROR")
RECOMMENDED CASH OFFER
FOR
LAVENDON GROUP PLC ("LAVENDON" OR THE "COMPANY")
BY
LOXAM SAS ("LOXAM" OR THE "OFFEROR")
Summary
· The boards of directors of Lavendon and Loxam are pleased to announce that they have reached agreement on the terms of a recommended all cash offer for the entire issued and to be issued share capital of Lavendon by Loxam, to be implemented by way of a takeover offer under the City Code and within the meaning of Part 28 of the Companies Act 2006 (the "Offer").
· Under the terms of the Offer, Lavendon Shareholders will receive 220 pence in cash for each Lavendon Share, valuing the entire issued share capital of Lavendon at approximately £374.0 million.
· The Offer represents a premium of approximately:
· 58.3 per cent. to the Closing Price of 139.0 pence for each Lavendon Share on 21 November 2016 (being the last Business Day prior to the start of the Offer Period); and
· 67.6 per cent. to the volume-weighted price of 131.3 pence for each Lavendon Share for the twelve month period ended on 21 November 2016 (being the last Business Day prior to the start of the Offer Period).
· If, after the date of this Announcement, a dividend and/or other distribution and/or return of capital is announced, declared or paid in respect of the Lavendon Shares, Loxam reserves its right to reduce the offer consideration by an amount up to the amount of such dividend and/or distribution and/or return of capital so announced, declared or paid.
· Loxam has received irrevocable undertakings from each of the Lavendon Directors in respect of their own holdings being, in aggregate, 936,554 Lavendon Shares, representing approximately 0.55 per cent. of the issued share capital of Lavendon as at 13 December 2016 (being the last practicable date prior to the date of this Announcement). Further details of these irrevocable undertakings are set out in Appendix 3 to this Announcement.
· The Offer is not conditional on any antitrust or regulatory clearances. The Offer is conditional on, among other things, Loxam receiving valid acceptances in respect of, or otherwise acquiring or agreeing to acquire (whether pursuant to the Offer or otherwise), shares which constitute not less than 75 per cent. (or such lesser percentage as Loxam may decide, but not being less than 50 per cent. plus one share) in nominal value of the Lavendon Shares and represent not less than 75 per cent. (or such lesser percentage as Loxam may decide, but not being less than 50 per cent. plus one share) of the voting rights carried by the Lavendon Shares.
· Loxam is the largest equipment rental company in Europe, with €838 million of revenues generated in 2015. Loxam focuses primarily on the construction and civil engineering sectors, with approximately 5,000 employees and a network of 641 branches extending over 11 countries in Europe (France, Germany, the United Kingdom, Ireland, Belgium, Switzerland, Spain, Luxemburg, the Netherlands, Denmark and Norway), as well as in Morocco and Brazil.
· Lavendon is a public company incorporated in the United Kingdom and has been listed on the London Stock Exchange since 1996. Founded in 1992, Lavendon is the European and Middle Eastern market leader in the rental of powered access equipment. The Company's equipment enables users to work safely, productively and comfortably at height, whatever the application. From 70 depots in the UK, Continental Europe and the Middle East, Lavendon manages a fleet of over 21,000 access platform units.
· The combination of Lavendon and Loxam will anchor Loxam as the leading player in the aerial work platforms market in Europe and the third largest worldwide, and will also bolster Loxam's leadership in the European equipment rental market.
· Loxam believes that the combination with Lavendon represents a unique opportunity to combine the leading positions of the two groups in each of their markets, to create a stronger player, with an improved geographical and equipment range balance, able to provide better service to its clients throughout its network.
· The contemplated combination will also be a new milestone in Loxam's development outside Europe with the addition of Lavendon's longstanding and successful development in the Middle East.
· The Lavendon Directors, who have been so advised by Canaccord Genuity as to the financial terms of the Offer, consider the terms of the Offer to be fair and reasonable. In providing its advice, Canaccord Genuity has taken into account the commercial assessments of the Lavendon Directors.
· Accordingly, the Lavendon Directors unanimously intend to recommend that Lavendon Shareholders accept or procure acceptance of the Offer (or, in the event that the Offer is implemented by way of a Scheme, vote in favour of the resolutions relating to such Scheme), as each of the Lavendon Directors irrevocably has undertaken to do in respect of their Lavendon Shares.
Commenting on the Offer, Gérard Déprez, President of Loxam, said:
"The combination of Lavendon and Loxam represents a unique opportunity to build an unrivalled leader in the European aerial work platforms rental market. Loxam has followed Lavendon for a number of years and has been impressed by its management team and the numerous leadership positions it now holds in several markets.
The acquisition of Lavendon is consistent with Loxam's strategy to build a geographically diversified business, increase its market shares in countries where the group is already present, and further develop in specialised areas, such as aerial work platforms. The two groups are highly complementary in Europe, and Lavendon's Middle Eastern business will provide the combined entity with opportunities in growing markets.
The discussions with the Board of Lavendon have been very constructive, and Loxam has always had the objective to obtain the full support of Lavendon's Board. Loxam is looking forward to working with the Lavendon team and continuing to build a successful business."
Commenting on the Offer, John Standen, Chairman of Lavendon, said:
"Lavendon is a company in robust health, uniquely positioned across diverse geographic markets, with strong revenue growth, cash flow and ROCE.
In reaching its decision, the Lavendon Board has considered in great detail the best interests of all shareholders and the Company as a whole. We believe that Loxam's all-cash offer provides Lavendon's shareholders with an opportunity to realise significant value at an attractive premium to the pre-offer period share price, whilst securing early delivery of the Lavendon Group's potential against a backdrop of increased economic uncertainty. This is why the Lavendon Directors unanimously intend to recommend Loxam's offer.
Loxam is the largest equipment rental company in Europe with a strong management team who share our belief in the strengths of our people and our growth drivers. We are confident that they are the right partner to take Lavendon to the next chapter of its growth story."
This summary should be read in conjunction with, and is subject to, the full text of the following Announcement and the appendices to this Announcement.
Appendix 1 sets out the Conditions and certain further terms of the Offer. Appendix 2 sets out the sources of information and bases of calculation contained in this Announcement. Appendix 3 sets out details of the irrevocable undertakings received by Loxam in relation to the Offer that are referred to in this Announcement. Certain terms used in this Announcement are defined in Appendix 4.
The Offer will be subject to the Conditions and further terms set out inAppendix 1 of this Announcement and to the full terms and conditions that will be set out in the Offer Document and, in respect of Lavendon Shares held in certificated form, the Form of Acceptance.
It is intended that the Offer Document and Form of Acceptance containing further details of the Offer will be despatched to Lavendon Shareholders (other than to persons in a Restricted Jurisdiction) as soon as practicable, and in any event within 28 days after the date of this Announcement (unless agreed otherwise with the Panel).