BTR Blue Star Mob

RNS No 8147m
BTR PLC
9th April 1998


BTR plc 
(BTR or the Company)
Proposed Return of Capital to Shareholders
by way of a Reorganisation of the Companys Share Capital
(the Proposals) and Notice of EGM


On 2 March 1998, BTR announced its intention to return a total of #2.0 billion
to shareholders.  The first #1.5 billion is expected to be returned within the
first half of this year and the remaining #0.5 billion following the abolition
of Advance Corporation Tax (ACT) in April 1999.  BTR is today providing the
details of its proposal for the initial #1.5 billion return of capital to
shareholders.  

A circular to Shareholders is being posted today, setting out details of the
Proposals which will, if shareholder approval (Shareholder Approval) is
obtained at an EGM to be held after the Annual General Meeting on 7 May 1998
and the other conditions referred to below are satisfied, complete the first
part of this proposed return of capital programme, amounting to approximately
#1.5 billion.

Summary of the Proposals

The Proposals are conditional on Shareholder Approval, completion of the
disposal of BTRs packaging businesses to Owens-Illinois Inc., completion of
the repurchase of certain existing Ordinary Shares as referred to below and
the admission of the Consolidated Ordinary Shares and the B Shares (each as
defined below) to listing.  The Proposals involve the following principal
elements:

-       There will be a capitalisation issue of B shares (the B Shares) to all
existing BTR Ordinary Shareholders, on the basis of one B Share for every
existing Ordinary Share held on 8 May 1998.

 -       The B Shares will have a nominal value of 36.5 pence each and will
carry restricted preferential capital rights.  A fixed non-cumulative
preferential net dividend equal to 4.75 per cent. per annum will be payable
semi-annually in arrears on 31 May and 30 November each year with the first
dividend period expected to commence on 9 June 1998 and the first dividend
being due and payable on 30 November 1998.  No dividend will be paid in
respect of B Shares redeemed during the initial redemption period referred to
below.

-       The B Shares will be redeemable for cash, at their nominal value, at
the option of the holders during any redemption period announced by the
Company.  The B Shares will also be redeemable at the Companys option at any
time.  The Company presently has no intention of exercising this right, save
on any dividend payment date on or after 31 May 1999 if less than 25 per cent.
of the B Shares originally issued remain outstanding.  If not previously
redeemed, the B Shares will be redeemed in any event on 31 May 2002.

-       In order to enable Shareholders to redeem their B Shares for cash, BTR
intends to announce an initial redemption period (the Initial Redemption
Period) expected to commence on 11 May 1998.  Shareholders will therefore be
able to elect to have their B Shares redeemed on:

-       11 May 1998, the first day of the Initial Redemption Period, by
completing and returning an early redemption form which will be enclosed with
the Circular to Shareholders (in which case cheques for the redemption
proceeds will be despatched to Shareholders by 15 May 1998); or

-       8 June 1998, following the close of the Initial Redemption Period, for
Shareholders who hold their existing Ordinary Shares in certificated form
(i.e. not in CREST) by completing and returning the redemption form on the
reverse of their B Share certificate, once received (in which case cheques for
the redemption proceeds will be despatched by 12 June 1998); or

 -       8 June 1998, following the close of the Initial Redemption Period,
for Shareholders who hold their existing Ordinary Shares in uncertificated
form (i.e. in CREST), by following the instructions set out in the Circular to
Shareholders (in which case the redemption proceeds will be credited to CREST
accounts by 12 June 1998).

-       The existing Ordinary Shares will be consolidated so that Shareholders
will receive, for every 16 existing Ordinary Shares on the Record Date, 13
consolidated ordinary shares (the Consolidated Ordinary Shares), and so in
proportion for any greater or lesser number of existing Ordinary Shares held. 
The Consolidated Ordinary Shares will, subject to the rights of the B Shares,
have the same rights and attributes as the existing Ordinary Shares, including
dividend and voting rights.  Where fractional entitlements to Consolidated
Ordinary Shares arise, these will be aggregated and sold to the Company, the
proceeds will be remitted to Shareholders entitled to them and the fractional
entitlement shares will then be cancelled.

-       Application has been made for the B Shares to be admitted to the
Official List with dealings expected to commence on 11 May 1998.  The Company
has applied for the B Shares to be admitted to CREST with effect from
Admission.  Accordingly, settlement of general market transactions in, and
redemptions after 11 May 1998 of, the B Shares may take place within the CREST
system.

Whilst the final dividend for the financial year ended 31 December 1997 will
be paid on each existing Ordinary Share, all future dividends will be payable
on the reduced number of Consolidated Ordinary Shares then in issue.  Future
dividends per Ordinary Share will be unaffected by the capital reorganisation.

The Company intends to utilise amounts standing to the credit of its share
premium account and/or capital reserve to pay up the nominal amount of the B
Shares.  However, as some existing Ordinary Shares were issued as scrip
dividends, a redemption of B Shares paid up in this way would involve, in
part, a distribution to Shareholders for tax purposes and would also  preclude
the Company from electing to pay dividends on Consolidated Ordinary Shares as
foreign income dividends.  The repurchase by the Company of existing Ordinary
Shares for an aggregate consideration (excluding the nominal value of such
existing Ordinary Shares) amounting to at least #13.8 million should ensure
that the redemption proceeds paid to Shareholders will be treated as a return
of capital for tax purposes and not as a part distribution.  Accordingly, the
Company intends to repurchase, from its brokers, Cazenove & Co. and Credit
Suisse First Boston, sufficient existing Ordinary Shares in the market prior
to the issue of the B Shares pursuant to its existing repurchase authority. 
The completion of this repurchase is one of the conditions to the
implementation of the Proposals.

On the basis of a closing mid-market price of 195.5 pence per existing
Ordinary Share on 8 April 1998, this repurchase would amount to approximately
8.1 million existing Ordinary Shares (representing approximately 0.2 per cent.
of the Companys current issued ordinary share capital).

Ian Strachan, Chief Executive of BTR plc said:

With over 90 per cent. of the businesses identified for divestment in
September 1997 sold, we have announced #3.7 billion in proceeds to date,
representing an aggregate multiple of 1.5 times sales.  Today we are
announcing the details of the return of #1.5 billion of these proceeds; a
further #0.5 billion will be returned to shareholders after the abolition of
ACT in April 1999.

This revised capital structure will more accurately reflect the earnings
profile of our focused Engineering Group.  We are now concentrating on driving
our engineering businesses forward, and the remaining divestment proceeds will
be used actively to invest in the global and technology leadership positions
of the Engineering Group.

Contacts:

Investors and analysts:

David Robbie, BTR              Tel: +44 (0) 171 821 3862

Press:

Victoria Sabin, Brunswick       Tel: + 44 (0) 171 404 5959

Schroders

Karen Cook                      Tel: +44 (0) 171 658 6000
Sam Small       

Schroders, which is regulated in the United Kingdom by the Securities and
Futures Authority Limited, is acting as financial adviser to BTR plc in
relation to the Proposals and no one else and will not be responsible to
anyone other than BTR plc for providing the protections afforded to customers
of Schroders nor for providing advice in relation to the Proposals.


END

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