TIDMFGP
FIRSTGROUP PLC
PROPOSED TER OFFER
* Proposed tender offer to return up to £500 million to shareholders at 105
pence per share
* Premium of 9.2 per cent. to the closing price on 26 October
* Tender Offer subject to shareholder approval; circular to be published
today
* Irrevocable undertaking from Coast Capital Management to support the
resolutions and tender its full holdings
* Tender proceeds expected to be despatched to Shareholders in December
FirstGroup plc ("FirstGroup" or the "Company") announces the proposed return of
up to £500 million to its shareholders (the "Shareholders") by way of a tender
offer at 105 pence per share (the "Tender Offer", which is summarised below).
On 22 July 2021, FirstGroup completed the disposal of its First Student and
First Transit businesses to EQT Infrastructure (the "Transaction") for net
disposal proceeds of $3,123 million (the "Net Disposal Proceeds"). On the same
date, FirstGroup announced its intention to increase the proposed return of
value to £500 million from £365 million previously (the "Return of Value").
Following consultation with Shareholders, the Board has decided that the
appropriate first step is to conduct the Return of Value by way of the Tender
Offer. Shareholders are therefore being invited to tender some or all of their
Ordinary Shares for purchase on the terms and subject to the Conditions set out
in the Circular to be published today.
Shareholders may decide not to participate fully or partially in the Tender
Offer for a number of reasons, including their view of the potential for the
value of the Company to increase in the future. If the full £500 million is not
returned to Shareholders through the Tender Offer, the Board intends to
undertake a second phase of the Return of Value to return any remaining surplus
cash following completion of the Tender Offer to Shareholders. If required, it
is expected that this second phase would take place by way of a share buyback
of up to approximately £50 million, with any meaningful surplus above this
amount being returned by way of a special dividend (with accompanying
consolidation and sub-division of the Company's share capital (the "Share
Consolidation")).
In addition to the Return of Value, the Board reiterates its commitment to
keeping the balance sheet position of the Group under review and will consider
the prospects for making further additional distributions to Shareholders in
due course, following crystallisation of the First Transit Earnout of up to
$240 million (fair valued in the Group's recent full year results at $140
million (£102 million) for accounting purposes), realisation of value from the
sale of the properties retained and consideration deferred in the recent sale
of Greyhound Lines Inc. to FlixMobility GmbH, and the potential release of
monies from pension escrow (of up to £117 million). The Board also notes the
capacity to increase gearing over time, as end market conditions and hence
business performance improves.
Commenting, David Martin, FirstGroup Executive Chairman said:
"I am very pleased to announce the launch of the proposed Tender Offer. This
marks the culmination of our portfolio rationalisation strategy, as announced
in December 2019, which has refocused the Group on its leading UK public
transport businesses. In doing so, we have created a cash generative company
with a well-capitalised balance sheet, a focused strategy and attractive growth
prospects in our markets. The policy backdrop in the UK has never been more
supportive and public transport has a critical role to play in helping
communities and economies build back better and more sustainably. The premium
for the Tender Offer reflects our confidence in our future prospects, as well
as the substantial further sums expected to be realised by the Group over time
from the disposals completed this year."
Key elements of the Tender Offer
* £500 million is available to be returned to Qualifying Shareholders via the
purchase of up to 476,190,476 Ordinary Shares (representing up to
approximately 38.9 per cent. of the Issued Ordinary Share Capital).
* The Tender Price will be 105 pence per Ordinary Share, a premium of 9.2 per
cent. to the closing price of 96.15 pence per Ordinary Share on 26 October
2021.
* The Tender Offer is conditional on, among other things, the approval of
Shareholders, which will be sought at a general meeting of the Company to
be held at 11 a.m. on 18 November 2021 (the "General Meeting").
+ The Company will also seek authority to undertake the second phase of
the Return of Value at the General Meeting.
* The Tender Offer will open on 28 October 2021 and will close at 1.00 p.m.
on 29 November 2021.
* Proceeds are expected to be despatched to Shareholders who successfully
tender Ordinary Shares in December 2021.
Coast Capital Management participation in the Tender Offer
Coast Capital Management currently controls, in aggregate, 156,749,809 Ordinary
Shares, representing approximately 12.82 per cent. of the Issued Ordinary Share
Capital as at the Latest Practicable Date. Coast Capital Management will
participate in the Tender Offer in full, and has irrevocably undertaken to vote
in favour of the Resolutions and to tender, in aggregate, 156,749,809 Ordinary
Shares under the Tender Offer at the Tender Price.
Benefits of the Tender Offer
The benefits of the Tender Offer for Shareholders as a whole are that:
* it is available to all Qualifying Shareholders regardless of the size of
their holdings;
* it means Qualifying Shareholders who participate will receive, for Ordinary
Shares successfully tendered, a Tender Price that represents a premium of
9.2 per cent. to the closing price of 96.15 pence per Ordinary Share on 26
October 2021;
* it provides Qualifying Shareholders who wish to reduce their holdings of
Ordinary Shares with an opportunity to do so at a market-driven price with
an appropriate premium; and
* it permits Shareholders who wish to retain their current investment in
FirstGroup and their Ordinary Shares to do so and no Shareholder is
required to participate in the Tender Offer.
The Company intends to cancel all of the Ordinary Shares acquired in connection
with the Tender Offer. As a result, the Tender Offer should have a positive
impact on the Group's earnings per share (assuming earnings stay the same).
Current trading update
On 21 October 2021, FirstGroup announced the sale of Greyhound Lines, Inc. (the
US Greyhound operating business) to a wholly-owned subsidiary of FlixMobility
GmbH ("FlixMobility"), completing the Company's stated strategy to focus on its
leading UK public transport businesses. The sale was not subject to any closing
conditions and completed on the same day. The announcement noted that the sale
resulted in cash consideration to the Group of $172m (comprising $140m paid
initially, with $32m in unconditional deferred consideration to be paid in
instalments over eighteen months from the sale), that certain Greyhound
properties have been retained by FirstGroup (initially being leased back to
Greyhound at market rates but expected to be sold over the next three to five
years) and that FirstGroup retains certain legacy Greyhound net liabilities
(including pension, self-insurance, finance leases settled at closing of the
sale, grant receivables, liability buyout premia and certain other items).
On 21 October 2021, the Group also stated that "trading in the Group's
continuing businesses year to date has been in line and there is no change to
management's expectations" for the continuing Group for the current financial
year, and that following the Greyhound transaction "and with certain First Bus
capital expenditure payments now falling after the period end and better than
expected working capital flows, the Group estimates that adjusted net debt1 at
the end of the current financial year will be c.£ 80-90m lower than previously
expected, in the range of £10-20m."
There has been no significant change to the current trading of the Group since
these announcements were made.
Further information
A shareholder circular (the "Circular") containing the full terms and
conditions of the Tender Offer and instructions to Qualifying Shareholders on
how to tender their Ordinary Shares should they wish to do so, and convening
the General Meeting, is expected to be published today. The Circular will be
available on the Company's website at www.firstgroupplc.com/tenderoffer and
copies of the Circular will also be submitted to the National Storage Mechanism
and be available for inspection at www.morningstar.co.uk/nsm.
This summary should be read in conjunction with the full text of this
announcement and the Circular.
Contacts at FirstGroup:
Faisal Tabbah, Head of Investor Relations
Stuart Butchers, Group Head of Communications
Tel: +44 (0) 20 7725 3354
corporate.comms@firstgroup.co.uk
Contacts at Brunswick PR:
Andrew Porter / Simone Selzer, Tel: +44 (0) 20 7404 5959
Advisers:
Goldman Sachs International
Eduard van Wyk, Bertie Whitehead, Anna Reynolds
J.P. Morgan Cazenove
Charles Harman, Richard Perelman, Poppy Barrett-Fish
Notes
1 'Adjusted net debt' excludes First Rail ring-fenced cash and IFRS 16 lease
liabilities from net debt, as defined in the FY21 results.
Legal Entity Identifier (LEI): 549300DEJZCPWA4HKM93. Classification as per DTR
6 Annex 1R: 2.2. This announcement contains inside information. The person
responsible for arranging the release of this announcement on behalf of
FirstGroup is David Isenegger, Group General Counsel and Company Secretary.
FirstGroup plc (LSE: FGP.L) is a leading private sector provider of public
transport services. With £4.3 billion in revenue and around 30,000 employees,
our UK divisions transported nearly 700,000 passengers a day in the 52 weeks to
27 March 2021. First Bus is the second largest regional bus operator in the UK,
serving two-thirds of the UK's 15 largest conurbations with a fleet of c.5,000
buses. First Rail is the UK's largest rail operator, with many years of
experience running long-distance, commuter, regional and sleeper rail services.
We operate a fleet of c.3,750 rail vehicles on four contracted operations
(Avanti, GWR, SWR, TPE) and two open access routes (Hull Trains and Lumo, our
new East Coast service launching later in 2021). We create solutions that
reduce complexity, making travel smoother and life easier. Our businesses are
at the heart of our communities and the essential services we provide are
critical to delivering wider economic, social and environmental goals. We are
formally committed to operating a zero-emission First Bus fleet by 2035 and to
cease purchasing further diesel buses after 2022; and First Rail will help
support the UK Government's goal to remove all diesel-only trains from service
by 2040. Visit our website at www.firstgroupplc.com and follow us
@firstgroupplc on Twitter.
FIRSTGROUP PLC
PROPOSED TER OFFER TO RETURN UP TO £500 MILLION TO SHAREHOLDERS
FirstGroup PLC ("FirstGroup" or the "Company") announces the proposed return of
up to £500 million to its shareholders (the "Shareholders") by way of a tender
offer.
1. BACKGROUND TO AND BENEFITS OF THE TER OFFER
Background to the Tender Offer
On 21 July 2021, FirstGroup completed the disposal of First Student and First
Transit to EQT Infrastructure (the "Transaction"). As announced on 22 July
2021, the net disposal proceeds from the Transaction were $3,123 million (the "
Net Disposal Proceeds"), an increase of $58 million over the base amount
previously announced by the Company due to the final adjustments for working
capital and debt and debt-like items as described in the circular in relation
to the Transaction published by the Company on 10 May 2021 (the "Transaction
Circular"). On the same date, FirstGroup announced its intention to increase
the proposed return of value to £500 million (equivalent to approximately 41
pence per share at the time of announcement) from £365 million (the "Return of
Value"). Such increase is due to the increase in Net Disposal Proceeds (as set
out above), the increased clarity for First Rail resulting from agreement of
South Western Railway and TransPennine Express National Rail Contracts and
final rail franchise termination sums, and a more positive cashflow outlook for
the Group than had been previously anticipated.
As well as enabling the Return of Value, the Transaction allows the Group to
make a £337 million contribution to the UK DB Pension Schemes (of which up to £
117 million will be held in escrow and may be released back to the Group on
conclusion of subsequent triennial valuations from 2024 onwards, depending on
scheme performance) and to address other longstanding liabilities including
those relating to the Greyhound business ("Greyhound")) while ensuring the
business is appropriately capitalised to continue investing for the future.
Following consultation with Shareholders, the Board has decided that the
appropriate first step is to conduct the Return of Value by way of a Tender
Offer. Shareholders are therefore being invited to tender some or all of their
Ordinary Shares for purchase on the terms and subject to the Conditions set out
in the Circular.
Shareholders may decide not to participate fully or partially in the Tender
Offer for a number of reasons, including their view of the potential for the
value of the Company to increase in the future. If the full £500 million is not
returned to Shareholders through the Tender Offer, the Board intends to
undertake a second phase of the Return of Value to return any remaining surplus
cash following completion of the Tender to Shareholders. This second phase of
the Return of Value will be influenced by the size of any amount that has not
been returned via the Tender Offer. In such circumstances, if there is
sufficient surplus, the Board intends to return approximately £50 million of it
by way of a share buyback, with any meaningful surplus above this amount being
returned by way of a Special Dividend (with accompanying Share Consolidation).
The role of the Share Consolidation is to seek to ensure that the price per
Ordinary Share remains materially unaffected by any Special Dividend, all other
things being considered.
Why is FirstGroup pursuing the Tender Offer?
In line with the Company's announcements of its intention to return up to £500
million of cash to Shareholders, the Board has considered the different ways of
returning these funds, and has consulted with Shareholders on the different
methods which are typically used to do so. Following that consideration and
consultation, the Board concluded that a Tender Offer made at an appropriate
premium to the price per share of Ordinary Shares, is the best way to return a
significant amount of capital to Shareholders in a short space of time, taking
account of the relative costs, complexity and timeframes of the various
possible methods, as well as the likely tax treatment for Shareholders. The
Board recognises that the Tender Offer may not return the full £500 million so
has set out a clear route to effectively return any amount not returned via the
Tender Offer.
Benefits of the Tender Offer for Shareholders
The benefits of the Tender Offer for Shareholders as a whole are that:
* it is available to all Qualifying Shareholders regardless of the size of
their holdings;
* it means Qualifying Shareholders who participate will receive, for Ordinary
Shares successfully tendered, a Tender Price that represents a premium of
12.4 per cent. to the closing price of 93.4 pence per Ordinary Share on the
Latest Practicable Date (being 25 October 2021) and a premium of 16.9 per
cent. to the volume weighted average price per Ordinary Share over the one
month to the Latest Practicable Date;
* it provides Qualifying Shareholders who wish to reduce their holdings of
Ordinary Shares with an opportunity to do so at a market-driven price with
an appropriate premium; and
* it permits Shareholders who wish to retain their current investment in
FirstGroup and their Ordinary Shares to do so and no Shareholder is
required to participate in the Tender Offer.
The Tender Offer will reduce the number of Ordinary Shares in issue, and so
should, assuming earnings stay the same, have a positive impact on the Group's
earnings per share (as the Company intends to cancel all of the Ordinary Shares
acquired in connection with the Tender Offer).
Coast Capital Management currently controls, in aggregate, 156,749,809 Ordinary
Shares, representing approximately 12.82 per cent. of the Issued Ordinary Share
Capital as at the Latest Practicable Date. Coast Capital Management intends to
participate in the Tender Offer in full, and has irrevocably undertaken to vote
in favour of the Resolutions and to tender, in aggregate, 156,749,809 Ordinary
Shares under the Tender Offer at the Tender Price. Further details of this
irrevocable undertaking are set out in the Circular.
General Meeting to approve the Tender Offer and the potential further phase of
the Return of Value
The Tender Offer will require the approval of Shareholders at a general meeting
of the Company, which will be held at Queen Elizabeth II Centre, Broad
Sanctuary, Westminster, London, SW1P 3EE on 18 November 2021 at 11:00am.
There is no guarantee that the Tender Offer will return the full sum of £500
million to Qualifying Shareholders. If the full £500 million is not returned
through the Tender Offer, if there is sufficient surplus, the Board intends to
return approximately £50 million of the surplus by way of a share buyback, with
any meaningful surplus above this amount being returned by way of a special
dividend (the "Special Dividend") (with accompanying Share Consolidation). The
Company is therefore also taking the opportunity at the General Meeting to
consider certain matters in addition to the Tender Offer Resolution which would
require Shareholder approval if, to complete the Return of Value, the New
Buyback Authority were to be used or a Special Dividend were to be paid,
including:
* a resolution authorising the Company to purchase up to a maximum of
122,281,244 Ordinary Shares, representing approximately 10 per cent. of the
Issued Ordinary Share Capital as at the Latest Practicable Date, which
would be used to return to Shareholders approximately £50 million of the
Net Disposal Proceeds not returned through the Tender Offer (the "New
Buyback Authority"). This New Buyback Authority would replace the Existing
Buyback Authority which was approved at the Company's AGM on 13 September
2021; and
* a resolution authorising the Board to effect a consolidation and
sub-division of the Company's share capital (the "Share Consolidation"),
which may be appropriate if a Special Dividend is paid to ensure that the
market price per New Ordinary Share immediately after the payment of the
Special Dividend would be approximately equal to the market price per
Ordinary Share immediately before such payment.
By requesting these authorities now, the Board is seeking to ensure that the
Company will be able to act quickly and without the delay and cost of convening
a further general meeting if the Board does subsequently decide to return a
portion of the £500 million not returned by the Tender Offer by way of a
repurchase of Ordinary Shares and, if applicable, payment of a Special Dividend
(with accompanying Share Consolidation). Further information about the New
Buyback Authority and the Share Consolidation is set out in the Circular.
It is noted that there is no guarantee that, if the full £500 million is not
returned through the Tender Offer, any repurchase of Ordinary Shares or Special
Dividend for any surplus not returned will be paid, as such matters will be
subject to the determination of the Board at the relevant time, including an
assessment of prevailing equity market conditions, the capital needs of the
Group, the sufficiency of distributable reserves and other factors, and the
Board reserves the right to pursue alternative uses of the available funds,
including for alternative share buybacks or dividends, or investment purposes.
2. THE TER OFFER
Overview of the Tender Offer
It is proposed that up to 476,190,476 Ordinary Shares (representing
approximately 38.9 per cent. of the Issued Ordinary Share Capital as at the
Latest Practicable Date) be purchased under the Tender Offer, for a maximum
aggregate cash consideration of £500 million.
Full details of the Tender Offer, including the terms and conditions on which
it is made, are set out in Part IV (Details of the Tender Offer) of the
Circular and in the Tender Form. Shareholders do not have to tender any
Ordinary Shares.
All Qualifying Shareholders who are on the Register at 6.00 p.m. on 29 November
2021 are entitled, but not required, to tender some or all of their Ordinary
Shares for purchase by Goldman Sachs, acting as principal, pursuant to the
requirements set out in the Circular.
Tenders will only be accepted at the Tender Price. The Tender Price represents
a premium of 12.4 per cent. to the closing price of 93.4 pence per Ordinary
Share on the Latest Practicable Date and represents a premium of 16.9 per cent.
to the volume weighted average price per Ordinary Share over the one month to
the Latest Practicable Date.
Subject to satisfaction of the Conditions to the Tender Offer, Ordinary Shares
which are successfully tendered under the Tender Offer will be purchased at a
price of 105 pence per Ordinary Share.
The Issued Ordinary Share Capital on the Latest Practicable Date was
1,222,969,677. If the Tender Offer is implemented in full, this will result in
the purchase of 476,190,476 Ordinary Shares (representing approximately 38.9
per cent. of the Issued Ordinary Share Capital of FirstGroup on the Latest
Practicable Date). The Issued Ordinary Share Capital of FirstGroup following
the cancellation of the Ordinary Shares (after FirstGroup has acquired all
validly tendered and purchased Ordinary Shares from Goldman Sachs) will be
746,621,972, assuming no further options are exercised for newly issued shares
in the interim. Shareholders should note that the Issued Ordinary Share Capital
numbers referred to in this paragraph take no account of any further dilution
which may be caused by the Share Plans, which is explained in further detail in
the Circular.
The Tender Offer is to be effected by Goldman Sachs (acting as principal and
not as agent, nominee or trustee) purchasing Ordinary Shares from Shareholders.
Goldman Sachs, in turn, has the right to require the Company to purchase from
it, and can be required by the Company to sell to it, such Ordinary Shares at
the Tender Price under an option agreement (the "Option Agreement"), details of
which are set out in the Circular. All Ordinary Shares purchased by the
Company from Goldman Sachs pursuant to the Option Agreement will be cancelled.
Options available to Shareholders in respect of the Tender Offer
Qualifying Shareholders are not obliged to tender any Ordinary Shares if they
do not wish to do so. If no action is taken by Qualifying Shareholders, there
will be no change to the number of Ordinary Shares that they hold and they will
receive no cash as a result of the Tender Offer.
Each Qualifying Shareholder who wishes to participate in the Tender Offer is
entitled to submit a tender to sell some or all of their Ordinary Shares.
The total number of Ordinary Shares tendered by any Qualifying Shareholder
should not exceed the total number of Ordinary Shares registered in the name of
that Qualifying Shareholder at the Record Date. For example, a Qualifying
Shareholder may decide to tender 50 per cent. of their Ordinary Shares, but if
a Qualifying Shareholder returned a tender purporting to offer for sale more
than 100 per cent. of their Ordinary Shares, they would be deemed to have
tendered only the number of Ordinary Shares actually owned by that Shareholder
on the Record Date, with the tender in respect of any additional shares being
deemed invalid.
Once made, any tender of Ordinary Shares will be irrevocable.
The Tender Offer will open on 28 October 2021 (unless such date is altered by
the Company in accordance with the Tender Offer). The Tender Offer will close
at 1.00 p.m. on 29 November 2021 and tenders received after that time will not
be accepted (unless the Closing Date is extended by the Company in accordance
with the Tender Offer).
Shareholders should note that the Tender Offer is conditional on, among other
things, the passing at the General Meeting of the Tender Offer Resolution as
set out in the Notice of General Meeting.
Number of Ordinary Shares that will be purchased pursuant to the Tender Offer
All Shareholders who tender Ordinary Shares will receive the Tender Price,
subject, where applicable, to the scaling-down arrangements set out in the
Circular. Accordingly, where scaling-down applies there is no guarantee that
all of the Ordinary Shares which are tendered by Qualifying Shareholders will
be accepted for purchase.
If more than 476,190,476 Ordinary Shares are validly tendered by Shareholders,
acceptances of validly tendered Ordinary Shares will be scaled-down to
determine the extent to which individual tenders are accepted.
These scaling-down arrangements are set out in full in the Circular and should
be read in full.
Guaranteed Entitlement
The Guaranteed Entitlement is only relevant if the Tender Offer is
oversubscribed. Tenders in respect of approximately 38.9 per cent. of each
holding of Ordinary Shares of every Qualifying Shareholder on the Record Date
will be accepted in full at the Tender Price and will not be scaled down. This
percentage is known as the "Guaranteed Entitlement". Qualifying Shareholders
may tender Ordinary Shares in excess of their Guaranteed Entitlement. However,
if the Tender Offer is oversubscribed, the tender of such excess Ordinary
Shares will only be successful to the extent that other Shareholders have
tendered less than their Guaranteed Entitlement.
These Guaranteed Entitlement arrangements are set out in full in the Circular
and should be read in full.
Circumstances in which the Tender Offer may not proceed
There is no guarantee that the Tender Offer will take place. The Tender Offer
is conditional on the passing of the Tender Offer Resolution set out in the
Notice of General Meeting. The Tender Offer is also conditional on other
matters, including:
* receipt of valid tenders in respect of at least 12,228,124 Ordinary Shares
(representing approximately 1 per cent. of the Issued Ordinary Share
Capital as at the Latest Practicable Date) by 1.00 p.m. on the Closing Date
and there continuing to be valid tenders in respect of at least such number
of Ordinary Shares; and
* the Tender Offer not having been terminated in accordance with its terms
and the Company having confirmed to Goldman Sachs that it will not exercise
its right to require Goldman Sachs not to proceed with the Tender Offer.
The Board has reserved the right, at any time prior to the Tender Offer
becoming unconditional, to require Goldman Sachs not to proceed with the Tender
Offer if the Board concludes that the implementation of the Tender Offer is no
longer in the best interests of the Company and/or Shareholders as a whole. The
Board has also reserved the right, at any time prior to the announcement of the
results of the Tender Offer, with the prior consent of Goldman Sachs, to revise
the aggregate value of the Tender Offer, or to extend the period during which
the Tender Offer is open, based on market conditions and/or other factors,
subject to compliance with applicable legal and regulatory requirements.
If the Tender Offer does not occur, the Group will have on its balance sheet
the £500 million of cash that is proposed to be returned pursuant to the Return
of Value. Holding this amount of cash means that the Group is likely to receive
a reduced return on capital while the Board considers how best to deploy or
return these funds to Shareholders. The Board is of the opinion that, subject
to any value-creating alternatives, this cash is surplus to the requirements of
the Group and that it would be in the best interests of the Company and
Shareholders as a whole not to retain this cash on the Group's balance sheet
but to return it to Shareholders by other means, such as a special dividend,
for example.
Results announcement and Unconditional Date
As set out in the timetable below, it is expected that the results of the
Tender Offer will be announced on 2 December 2021, at which time the Tender
Offer is expected to become unconditional subject to the Conditions described
in the Circular having been satisfied. Until such time as the Tender Offer
becomes unconditional, the Tender Offer will be subject to the Conditions
described in the Circular. Settlement is then expected to take place as set out
in the timetable below.
Full terms and conditions of the Tender Offer
Full details of the Tender Offer, including the terms and conditions on which
it is made and some questions and answers related to the Return of Value are
set out in the Circular.
3. EXPECTED TIMETABLE
Tender Offer opens 28 October 2021
Latest time and date for receipt of Forms of Proxy 11:00 a.m. on 16 November
for the General Meeting 2021
General Meeting 11:00a.m. on 18 November
2021
Latest time and date for receipt of Tender Forms and 1.00 p.m. on 29 November
share certificates or other documents of title for 2021
tendered certificated Ordinary Shares (i.e. close of
the Tender Offer)
Latest time and date for settlement of TTE 1.00 p.m. on 29 November
Instructions for tendered uncertificated Ordinary 2021
Shares (i.e. close of the Tender Offer)
Record Date for the Tender Offer 6.00 p.m. on 29 November
2021
Announcement of the results of the Tender Offer 2 December 2021
Unconditional Date for the Tender Offer and purchase 2 December 2021
of Ordinary Shares under the Tender Offer
CREST accounts credited for revised uncertificated 7 December 2021
shareholdings of Ordinary Shares (or, in the case of
unsuccessful tenders, for entire holdings of
Ordinary Shares)
CREST accounts credited in respect of Tender Offer 7 December 2021
proceeds for uncertificated Ordinary Shares
Cheques despatched in respect of Tender Offer 16 December 2021
proceeds for certificated Ordinary Shares
Return of share certificates in respect of 16 December 2021
unsuccessful tenders of certificated Ordinary Shares
Despatch of balance share certificates in respect of 16 December 2021
unsold Ordinary Shares in certificated form
Each of the times and dates in the table set out above is indicative only and
may be subject to change by FirstGroup, in which event details of the new times
and dates will be notified to Shareholders by announcement through a Regulatory
Information Service.
All references to times in the timetable above are to London times.
4. DIVIDS
It is not expected that the Tender Offer will have any impact on FirstGroup's
intention in respect of dividends as stated in the financial policy framework
set out in the Transaction Circular and in the results announcement of 27 July
2021, which is to commence payment of a regular dividend during the financial
year ending March 2023. The Group is targeting the annual dividend amount to be
around three times covered by a new Rail-adjusted Profit After Tax measure,
assuming normalisation of trading conditions post-pandemic.
In addition to the Return of Value, the Board reiterates its commitment to
keeping the balance sheet position of the ongoing Group under review and will
consider the prospects for making further additional distributions to
Shareholders in due course, following crystallisation of the First Transit
Earnout (as defined in the Transaction Circular and fair valued in the Group's
recent full year results at $140 million for accounting purposes), realisation
of value from the sale of the properties retained and consideration deferred in
the recent sale of Greyhound Lines Inc. to FlixMobility GmbH, and the potential
release of monies from pension escrow (of up to £117 million). The Board also
notes the capacity to increase gearing over time, as end market conditions and
hence business performance improves.
5. IRREVOCABLE UNDERTAKING
The Company has received an irrevocable undertaking from Coast Capital
Management, in its capacity as a controller of Ordinary Shares in the Company
and, as such, a major shareholder in the Company, to support the Tender Offer.
Pursuant to that irrevocable undertaking Coast Capital Management has committed
to validly tender, or to procure the valid tender of, 156,749,809 Ordinary
Shares (representing approximately 12.82 per cent of the total issued share
capital of the Company) in accordance with the procedure specified in the
Circular. The Ordinary Shares which are the subject of the undertaking will be
tendered as soon as possible and in any event within ten days of the
publication of the Circular. Coast Capital Management has also undertaken to
vote in favour of the Resolutions and not to sell, or otherwise dispose of, the
Ordinary Shares which are the subject of the undertaking or to acquire any
additional Ordinary Shares or interest in the Company.
6. TAKEOVER CODE
Rule 9 of the Takeover Code applies to any person who acquires an interest in
shares which, when taken together with shares in which persons acting in
concert with him are interested, carry 30 per cent. or more of the voting
rights of a company which is subject to the Takeover Code. Any such person is
required to make a general offer to all shareholders of that company to acquire
their shares in cash at not less than the highest price paid by such person, or
by any person acting in concert with him, for any interest in shares within the
12 months prior to the offer. Such an offer under Rule 9 of the Takeover Code
must also be made where any person who, together with persons acting in concert
with him, holds not less than 30 per cent. but not more than 50 per cent. of
the voting rights in the company and such person, or any person acting in
concert with him, acquires an interest in any other shares which increase the
percentage of shares carrying voting rights in which he is interested.
When a company purchases its own voting shares, any resulting increase in the
percentage of voting rights held by a shareholder, or group of shareholders
acting in concert, will be treated as an acquisition for the purpose of Rule 9.
Goldman Sachs may purchase, as principal and not as agent, nominee or trustee,
Ordinary Shares under the Tender Offer, which could result in Goldman Sachs
owning 30 per cent. or more of the Issued Ordinary Share Capital. It is also
possible that entities within the group of which Goldman Sachs is part hold or
come to hold other interests in the Issued Ordinary Share Capital and that, in
certain cases, those interests could be subject to aggregation with any
Ordinary Shares acquired under the Tender Offer for the purposes of Rule 9 of
the Takeover Code. As such, it is possible that the aggregated holdings of
Goldman Sachs and persons in concert with it could result in a requirement to
make a general offer under Rule 9.
Goldman Sachs has indicated its intention that, shortly after the purchase of
Ordinary Shares under the Tender Offer, it will sell all those Ordinary Shares
to the Company for cancellation. Accordingly, a waiver has been obtained from
the Panel on Takeovers and Mergers in respect of the application of Rule 9 to
the purchase by Goldman Sachs of Ordinary Shares under the Tender Offer.
7. FINANCIAL ADVICE
The Board has received financial advice from Goldman Sachs and J.P. Morgan in
relation to the Return of Value. In providing their financial advice, Goldman
Sachs and J.P. Morgan have relied upon the Board's commercial assessments of
the Return of Value.
8. RECOMMATION
The Board considers the Return of Value and the Resolutions to be in the best
interests of Shareholders as a whole. Accordingly, the Board recommends that
Shareholders vote in favour of the Resolutions to be proposed at the General
Meeting, as the Directors intend to do for their respective individual
beneficial holdings of, in aggregate, 751,483 Ordinary Shares, representing
approximately 0.06 per cent. of the Issued Ordinary Share Capital as at the
Latest Practicable Date.
The Board makes no recommendation to Shareholders in relation to participation
in the Tender Offer itself. Whether or not Shareholders decide to tender all
or any of their Ordinary Shares will depend on, among other things, their view
of FirstGroup's prospects and their own individual circumstances, including
their tax position. Shareholders need to take their own decision and are
recommended to consult their duly authorised independent advisers.
9. DIRECTORS' INTENTIONS
Each of the Directors has confirmed that they do not intend to tender through
the Tender Offer any of their current individual beneficial holding of Ordinary
Shares.
DEFINITIONS
The following definitions apply throughout this announcement unless the context
requires otherwise:
AGM annual general meeting;
Board or Directors the board of directors of FirstGroup;
Business Day a day other than a Saturday or Sunday or
public holiday in England and Wales on which
banks are open in London for general
commercial business;
certificated or in certificated recorded on the Register as being held in
form certificated form (that is, not in CREST);
CERTS the US Department of the Treasury's
Coronavirus Economic Relief for Transportation
Services scheme;
Closing Date the latest time and date at which the Tender
Offer shall close;
Coast Capital Management Coast Capital Management LP;
Company or FirstGroup FirstGroup PLC, a public limited company
incorporated in Scotland with registered
number SC157176, whose registered office is at
395 King Street, Aberdeen, AB24 5RP;
Conditions has the meaning given to that term in
paragraph 2.1 of Part IV (Details of the
Tender Offer) of the Circular;
CREST the paperless settlement procedure operated by
Euroclear enabling system securities to be
evidenced otherwise than by certificates and
transferred otherwise than by written
instrument;
CREST Manual the rules governing the operation of CREST as
published by Euroclear and as amended from
time to time;
CREST Member a person who has been admitted by Euroclear as
a system-member (as defined in the CREST
Regulations);
CREST Participant a person who is, in relation to CREST, a
system participant (as defined in the CREST
Regulations);
CREST Regulations the Uncertificated Securities Regulations 2001
(SI 2001/3755), as amended from time to time;
Disclosure Guidance and the disclosure guidance and transparency rules
Transparency Rules made under Part VI of FSMA (and contained in
the FCA's publication of the same name), as
amended from time to time;
Equiniti Equiniti Limited, a limited company
incorporated in England and Wales with
registered number 6226088, whose registered
office is at Aspect House, Spencer Road,
Lancing, West Sussex, BN99 6DA;
Euroclear Euroclear UK & Ireland Limited, the operator
of CREST;
Existing Buyback Authority the general authority to buy back up to a
maximum of 122,246,788 Ordinary Shares,
representing approximately 10 per cent. of the
Issued Ordinary Share Capital, that was
approved by Shareholders at the Company's AGM
held on 13 September 2021;
Financial Advisers J.P. Morgan and Goldman Sachs together;
Form of Proxy the form of proxy enclosed with the Circular
(where applicable) for use by Shareholders in
connection with the General Meeting;
FSMA Financial Services and Markets Act 2000, as
amended from time to time;
General Meeting the General Meeting of the Company to be held
at Queen Elizabeth II Centre, Broad Sanctuary,
Westminster, London, SW1P 3EE on 18 November
2021 at 11:00am;
Goldman Sachs Goldman Sachs International;
Group FirstGroup together with its subsidiaries and
subsidiary undertakings;
Guaranteed Entitlement has the meaning given to that term under
"Guaranteed Entitlement" at section 2 (The
Tender Offer) of this announcement;
Issued Ordinary Share Capital the Company's issued ordinary share capital,
excluding any treasury shares from time to
time;
J.P. Morgan or J.P. Morgan J.P. Morgan Securities plc;
Cazenove
Latest Practicable Date 25 October 2021, being the latest practicable
date prior to the publication of the Circular;
Listing Rules the listing rules made under Part VI of FSMA
(and contained in the FCA's publication of the
same name), as amended from time to time;
London Stock Exchange London Stock Exchange plc;
Main Market the main market for listed securities
maintained by the London Stock Exchange;
Market Abuse Regulation Regulation (EU) No. 596/2014 of the European
Parliament and of the Council of 16 April 2014
on market abuse, and any implementing
legislation, in each case as it forms part of
retained EU law as defined in the European
Union (Withdrawal) Act 2018;
Member Account ID the identification code or number attached to
any member account in CREST;
Net Disposal Proceeds has the meaning given to that term under
"Background to the Offer" in section 1
(Background to And Benefits Of The Tender
Offer) of this announcement;
New Buyback Authority the authority to buy back up to a maximum of
122,281,244 Ordinary Shares, representing
approximately 10 per cent. of the Issued
Ordinary Share Capital as at the Latest
Practicable Date, for which approval will be
sought for at the General Meeting;
New Ordinary Shares Ordinary Shares owned by Shareholders
following any Share Consolidation, such
Shareholders owning the same proportion of the
Company as they did immediately prior to the
Share Consolidation taking effect (subject to
the treatment of fractional entitlements) but
holding a smaller number of new Ordinary
Shares than the number of Ordinary Shares held
immediately prior to the Share Consolidation;
Notice of General Meeting the notice of the General Meeting which is set
out at the end of the Circular;
Option Agreement has the meaning given to that term under
"Options available to Shareholders in respect
of the Tender Offer" at section 2 (The Tender
Offer) of this announcement, details of which
are set out at paragraph 6 of Part VII
(Additional Information) of the Circular;
Ordinary Shares ordinary shares with a nominal value of 5
pence each in the capital of FirstGroup (or,
where the context requires, with such other
nominal value as an ordinary share in the
Company may have following any Share
Consolidation);
Overseas Shareholder a Shareholder who is resident in, or a citizen
of, a jurisdiction outside the United Kingdom;
Participant ID the identification code or membership number
used in CREST to identify a particular CREST
Member or other CREST Participant;
Qualifying Shareholders Shareholders other than those with a
registered address in any of the Restricted
Jurisdictions;
Record Date 6.00 p.m. on 29 November 2021 or such other
time and date as may be determined by the
Company in its sole discretion in the event
that the Closing Date is altered in accordance
with paragraph 2.22 of Part IV (Details of
the Tender Offer) of the Circular;
Register the register of members of FirstGroup;
Regulatory Information Service or one of the regulatory information services
RIS authorised by the FCA to receive, process and
disseminate regulatory information from listed
companies;
Resolutions the resolutions to be proposed at the General
Meeting, as set out in the Notice of General
Meeting;
Restricted Jurisdictions Australia and New Zealand;
Return of Value has the meaning given to that term under
"Background to the Offer" in section 1
(Background To And Benefits Of The Tender
Offer) of this announcement;
Share Consolidation has the meaning given to that term under
"General Meeting to approve the Tender Offer
and the potential further phase of the Return
of Value" in section 1 (Background To And
Benefits Of The Tender Offer) of this
announcement;
Shareholders holders of Ordinary Shares from time to time;
Special Dividend has the meaning given to that term under
"General Meeting to approve the Tender Offer
and the potential further phase of the Return
of Value" in section 1 (Background To And
Benefits Of The Tender Offer) of this
announcement;
subsidiary has the meaning given to that term in section
1159 of the Companies Act 2006;
subsidiary undertaking has the meaning given to that term in section
1162 of the Companies Act 2006;
Takeover Code the City Code on Takeovers and Mergers;
Tender Form the tender form issued with the Circular to
Qualifying Shareholders who hold their
Ordinary Shares in certificated form;
Tender Offer the invitation by Goldman Sachs to
Shareholders to tender Ordinary Shares for
purchase by Goldman Sachs on the terms and
subject to the conditions set out in the
Circular and also, in the case of certificated
Ordinary Shares only, the Tender Form (and,
where the context so requires, the associated
repurchase of such Ordinary Shares by the
Company from Goldman Sachs);
Tender Offer Resolution the resolution which seeks shareholder
approval for the Tender Offer under the
requirements of the Listing Rules;
Tender Price 105 pence, being the price per Ordinary Share
at which Ordinary Shares will be purchased
pursuant to the Tender Offer;
Transaction has the meaning given to that term under
"Background to the Offer" in section 1
(Background To And Benefits Of The Tender
Offer) of this announcement;
Transaction Circular has the meaning given to that term under
"Background to the Offer" in section 1
(Background To And Benefits Of The Tender
Offer) of this announcement;
TTE Instruction a transfer to escrow instruction (as defined
by the CREST Manual);
UK DB Pension Schemes the First UK Bus Pension Scheme and the
FirstGroup Pension Scheme;
UK or United Kingdom the United Kingdom of Great Britain and
Northern Ireland;
uncertificated or in recorded on the Register as being held in
uncertificated form uncertificated form in CREST and title to
which, by virtue of the CREST Regulations, may
be transferred by means of CREST;
Unconditional Date the date on and time at which the Tender Offer
becomes unconditional, which is expected to be
on 2 December 2021;
US or United States the United States of America, its territories
and possessions, any state of the United
States of America, the District of Columbia
and all other areas subject to its
jurisdiction;
US Exchange Act the US Securities Exchange Act of 1934, as
amended from time to time; and
US Shareholder a Shareholder who, for US federal income tax
purposes, is a beneficial owner of Ordinary
Shares and who is: (i) an individual that is a
citizen or resident of the United States, (ii)
a corporation, or other entity taxable as a
corporation, created or organized in or under
the laws of the United States, any state
therein or the District of Columbia, or (iii)
an estate or trust the income of which is
subject to US federal income taxation
regardless of its source.
IMPORTANT STATEMENT
This announcement does not constitute or form part of an offer or invitation,
or a solicitation of any offer or invitation, to purchase any Ordinary Shares
or other securities.
The full terms and conditions of the Tender Offer will be set out in the
Circular, which Shareholders are advised to read in full. Any response to the
Tender Offer should be made only on the basis of the information in the
Circular.
J.P. Morgan Securities plc (which conducts its U.K. investment banking
activities as J.P. Morgan Cazenove) ("J.P. Morgan"), which is authorised by the
Prudential Regulation Authority and regulated by the Financial Conduct
Authority and the Prudential Regulation Authority in the United Kingdom, is
acting as lead joint sponsor, joint financial adviser and joint corporate
broker exclusively for FirstGroup and for no one else in connection with the
Return of Value and will not be responsible to anyone other than FirstGroup for
providing the protections afforded to clients of J.P. Morgan or for providing
advice in relation to the matters described in this announcement.
Goldman Sachs International ("Goldman Sachs"), which is authorised by the
Prudential Regulation Authority and regulated by the Financial Conduct
Authority and the Prudential Regulation Authority in the United Kingdom, is
acting as joint sponsor, joint financial adviser and joint corporate broker
exclusively for FirstGroup and for no one else in connection with the Return of
Value and will not be responsible to anyone other than FirstGroup for providing
the protections afforded to clients of Goldman Sachs or for providing advice in
relation to the matters described in this announcement.
Apart from the responsibilities and liabilities, if any, which may be imposed
on J.P. Morgan and Goldman Sachs (the "Financial Advisers") under FSMA or the
regulatory regime established thereunder: (i) neither of the Financial Advisers
or any persons associated or affiliated with either of them accepts any
responsibility whatsoever or makes any warranty or representation, express or
implied, in relation to the contents of this announcement, including its
accuracy, completeness or verification or for any other statement made or
purported to be made by, or on behalf of it, FirstGroup or the Directors, in
connection with FirstGroup and/or the Tender Offer; and (ii) each of the
Financial Advisers accordingly disclaims, to the fullest extent permitted by
law, all and any liability whatsoever, whether arising in tort, contract or
otherwise (save as referred to above) which they might otherwise be found to
have in respect of this announcement or any such statement.
Cautionary statement regarding forward-looking statements
This announcement includes statements that are, or may be deemed to be,
forward-looking statements. These forward-looking statements can be identified
by the use of forward-looking terminology, including the terms anticipates,
believes, could, estimates, expects, intends, may, plans, projects, should or
will, or, in each case, their negative or other variations or comparable
terminology, or by discussions of strategy, plans, objectives, goals, future
events or intentions. By their nature, forward-looking statements involve risk
and uncertainty because they relate to future events and circumstances.
Forward-looking statements may, and often do, differ materially from actual
results. Any forward-looking statements in this announcement reflect
FirstGroup's current view with respect to future events and are subject to
risks relating to future events and other risks, uncertainties and assumptions
relating to the Group and its operations, results of operations and growth
strategy. Other than in accordance with its legal or regulatory obligations
(including under the Listing Rules, the Disclosure Guidance and Transparency
Rules, the Market Abuse Regulation and the rules of the London Stock Exchange),
FirstGroup is not under any obligation and FirstGroup expressly disclaims any
intention or obligation (to the maximum extent permitted by law) to update or
revise any forward-looking statements, whether as a result of new information,
future events or otherwise.
Overseas Shareholders
The availability of the Tender Offer to Shareholders who are not resident in
the United Kingdom may be affected by the laws of the relevant jurisdiction in
which they are located. Shareholders who are not resident in the United Kingdom
should read paragraph 6 of Part IV (Details of the Tender Offer) of the
Circular and should inform themselves about, and observe, any applicable legal
or regulatory requirements. In addition, the attention of Shareholders who are
resident in the United States is drawn to the section for US Shareholders
below.
The Tender Offer is not being made, directly or indirectly, in or into, or by
use of the mails of, or by any means or instrumentality (including, without
limitation, facsimile transmission, telex, telephone and e-mail) of interstate
or foreign commerce of, or any facilities of a national securities exchange of,
any Restricted Jurisdiction and the Tender Offer cannot be accepted by any such
use, means, instrumentality or facility or from within any Restricted
Jurisdiction. Accordingly, unless otherwise determined by the Company and
permitted by applicable law and regulation, neither the Circular nor the Tender
Form nor any related document is being, nor may it be, directly or indirectly,
mailed, transmitted or otherwise forwarded, distributed, or sent in, into or
from any Restricted Jurisdiction, and persons receiving the Circular, the
Tender Form and/or any related document (including, without limitation,
trustees, nominees or custodians) must not mail or otherwise forward,
distribute or send it in, into or from such Restricted Jurisdiction, as to do
so may invalidate any purported acceptance of the Tender Offer. Any person
(including, without limitation, trustees, nominees or custodians) who would or
otherwise intends to, or who may have a contractual or legal obligation to,
forward the Circular, the Tender Form and/or any related document to any
jurisdiction outside the United Kingdom, should seek appropriate advice before
taking any action.
U.S. Shareholders
The Tender Offer is not subject to the disclosure and other procedural
requirements of Rule 13e-4 or Regulation 14D under the US Securities Exchange
Act of 1934 (the "US Exchange Act"). The Tender Offer will be made in the US in
accordance with the requirements of Regulation 14E under the US Exchange Act to
the extent applicable. Certain provisions of Regulation 14E under the US
Exchange Act are not applicable to the Tender Offer by virtue of Rule 14d-1(d)
under the US Exchange Act. Goldman Sachs will act as US dealer manager with
respect to the Tender Offer in the United States to the extent required. US
Shareholders should note that the Ordinary Shares are not listed on a US
securities exchange and the Company is not subject to the periodic reporting
requirements of the US Exchange Act and is not required to, and does not, file
any reports with the US Securities and Exchange Commission thereunder.
It may be difficult for US Shareholders to enforce certain rights and claims
arising in connection with the Tender Offer under US federal securities laws
since the Company is located outside the US and most of its officers and
directors may reside outside the US. It may not be possible to sue a non-US
company or its officers or directors in a non-US court for violations of US
federal securities laws. It also may not be possible to compel a non-US company
or its affiliates to subject themselves to a US court's judgment.
The receipt of cash pursuant to the Tender Offer by a Shareholder who is a US
person will be a taxable transaction for US federal income tax purposes. The
Circular sets out a guide to certain US tax consequences of the Tender Offer
for Shareholders under current US law. However, each such Shareholder should
consult and seek individual advice from an appropriate professional adviser.
To the extent permitted by applicable law and in accordance with normal UK
practice, the Company, Goldman Sachs or any of their respective affiliates, may
make certain purchases of, or arrangements to purchase, Ordinary Shares outside
the United States during the period in which the Tender Offer remains open for
participation, including sales and purchases of Ordinary Shares effected by
Goldman Sachs acting as market maker in the Ordinary Shares. These purchases,
or other arrangements, may occur outside the United States either in the open
market at prevailing prices or in private transactions at negotiated prices. In
order to be excepted from the requirements of Rule 14e-5 under the US Exchange
Act by virtue of Rule 14e-5(b)(12) thereunder, such purchases, or arrangements
to purchase, must comply with applicable English law and regulation, including
the Listing Rules, and the relevant provisions of the US Exchange Act. Any
information about such purchases will be disclosed as required in the UK and
the US and, if required, will be reported via a Regulatory Information Service
and will be available on the London Stock Exchange website at http://
www.londonstockexchange.com.
While the Tender Offer is being made available to Shareholders in the US, the
right to tender Ordinary Shares is not being made available in any jurisdiction
in the US in which the making of the Tender Offer or the right to tender such
Ordinary Shares would not be in compliance with the laws of such jurisdiction.
This announcement has not been approved, disapproved or otherwise recommended
by the US Securities and Exchange Commission or any US state securities
commission and such authorities have not confirmed the accuracy or determined
the adequacy of this announcement. Any representation to the contrary is a
criminal offence in the US.
END
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October 27, 2021 02:00 ET (06:00 GMT)
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