12 May 1999
The board of Fairey Group plc, the international process technology group, and the board of Servomex plc, the instrumentation group, today announce a recommended cash offer by Fairey for Servomex.
The Offer, to be made by Close Brothers on behalf of Fairey:
- is 185 pence in cash for each Servomex Share;
- values Servomex's entire issued ordinary share capital at approximately £19.1 million;
- represents a premium of approximately 57 per cent. over the closing middle market price of 117.5 pence per Servomex Share on 7 April, 1999, the last dealing day prior to the announcement that Servomex was in discussions which might or might not lead to an offer being made for the entire issued share capital of the Company; and
- includes a Partial Share Alternative and Additional Share Election valuing each Servomex Share at 175 pence.
The directors of Servomex, who have been so advised by Schroders, consider the terms of the Offer to be fair and reasonable. The directors of Servomex will unanimously recommend that Servomex Shareholders accept the Offer.
Fairey has received irrevocable undertakings to accept the Offer from the directors of Servomex and their connected persons in respect of their entire beneficial holdings of Servomex Shares, amounting, in aggregate, to 110,206 shares, representing 1.1 per cent. of Servomex's issued ordinary share capital. The irrevocable undertakings remain binding even if a higher competing offer is made for Servomex.
Fairey has agreed, conditional only on the release of this announcement, to purchase at the price of 182 pence per share 1,759,667 Servomex Shares owned by funds under the discretionary management of Aberforth Partners, representing approximately 17.0 per cent. of Servomex's issued ordinary share capital.
In addition, Fairey has received irrevocable undertakings to accept the Offer from certain major institutional shareholders of Servomex in respect of shareholdings amounting, in aggregate, to 1,958,892 Servomex Shares, representing approximately 18.9 per cent. of Servomex's issued ordinary share capital. These undertakings will cease to be binding in the event that a competing offer which exceeds the value of the Offer for Servomex by ten per cent. or more is announced within 14 days of this announcement and Fairey has not announced an improvement to the terms of the Offer within ten business days of such competing offer being made where the terms of the Offer (as so improved) are at least as favourable as those under the competing offer.
Accordingly, Fairey has either acquired, or has received irrevocable undertakings to accept the Offer in respect of, 3,828,765 Servomex Shares, in aggregate, representing approximately 37.0 per cent. of the issued ordinary share capital of Servomex.
The acquisition is in line with Fairey's strategy of building a focused specialist group providing process technology solutions across a broad range of industries and applications. The board of Fairey expects the acquisition of Servomex to enhance earnings per share in the current year before amortisation of goodwill. This statement should not be interpreted as meaning that earnings per share in the current year will necessarily be greater than those for the financial year ended 31 December, 1998.
Commenting on the announcement, John Poulter, Chief Executive of Fairey, said:
"Servomex, whose fortunes we have followed for some years, shares many characteristics with Fairey's process instrumentation business. The Company represents a relevant and positive acquisition for the Group."
Commenting on the announcement, Terry Clements, Chairman of Servomex, said:
"The Offer from Fairey represents fair value for Servomex's shareholders and provides an attractive opportunity for Servomex to benefit from becoming part of a large complementary group. Given the difficulty of raising equity for acquisitions in the small company sector and the investment requirements of the global instrumentation and test equipment markets, the board of Servomex believes that the resources of a larger group will enable Servomex to realise its full potential."
For full details of this announcement please contact:
Fairey
John Poulter - Chief Executive - 01784 470470
Close Brothers (for Fairey)
Tom Quigley - Director - 0171 4264000
Servomex
Terry Clements - Chairman - 01892 603203
Schroders (for Servomex)
Julian Tunnicliffe - Director - 0171 6586000
Financial Dynamics (for Fairey)
Charles Watson - Director - 0171 8313113
