DUBLIN, Ireland, Oct. 22, 2004 (PRIMEZONE) --
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS NOT FOR
RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE UNITED STATES,
CANADA, AUSTRALIA OR JAPAN
For Immediate Release
21 October 2004
Possible Cash Offer for Royal Doulton plc
Proposed Fully Underwritten EURO100 million Rights Issue
New Banking Facilities Secured
Trading Update
Waterford Wedgwood plc, ("the Group" or "Waterford Wedgwood") the
luxury lifestyle group, today announces that it is in advanced
discussions about a possible cash offer for Royal Doulton plc
("Royal Doulton"), one of the world's leading chinaware
manufacturers and owner of the Royal Doulton, Minton and Royal
Albert brands.
The Group also announces a proposed fully underwritten rights
issue of approximately EURO100 million, and that it has secured
new banking facilities and repaid its existing senior facilities
in theirentirety.
Offer for Royal Doulton Under Discussion
The Boards of Waterford Wedgwood and Royal Doulton are in
advanced discussions regarding a possible recommended offer for
Royal Doulton by Waterford Wedgwood. Due diligence has been
completed to the satisfaction of Waterford Wedgwood, but certain
other matters remain to be resolved and consequently there can
be no certainty that a formal offer will be made. Any formal
offer is expected to be 12 pence in cash per Royal Doulton share
and, subject to the resolution of these matters, the Board of
Royal Doulton intends to recommend such an offer.
Waterford Wedgwood currently holds 21.16% of Royal Doulton shares
and these would not be the subject of the possible offer. Sir
Anthony O'Reilly, Chairman of Waterford Wedgwood, and Mr Peter
John Goulandris, Deputy Chairman of Waterford Wedgwood, between
them own a further 3.99% of Royal Doulton shares; these would be
the subject of the possible offer.
A further announcement will be made in due course.
Fully Underwritten EURO100 million Rights Issue
- Proposed Rights Issue on the basis of 5 New Stock Units for
every 3 Stock Units held by qualifying stockholders (on a
record date to be determined) at EURO0.06 per New Stock Unit
(approximately 1.66 billion New Stock Units). Rights Issue is
fully underwritten by a company controlled by Sir Anthony
O'Reilly and Mr Peter John Goulandris (70% of the Rights
Issue), and by Davy (30% of the Rights Issue)
- Rights Issue price represents a discount of 53.8% to the
closing price of EURO0.13 per Stock Unit on 20 October, 2004
- O'Reilly and Goulandris families have confirmed their
intention to take up their full rights entitlements
- Rights Issue fully covers the cost of the equity component of
the possible Royal Doulton acquisition
- Rights Issue is conditional on an announcement by the Group
of a firm intention to make an offer for Royal Doulton but
is not conditional on completion of the Royal Doulton
acquisition
- Rights Issue is also conditional on, inter alia, the grant
by the Irish Takeover Panel of a waiver under Rule 9 of the
Irish Takeover Rules and on independent shareholder
approval, each in respect of the underwriting arrangements.
It is also conditional on shareholders approving an increase
in the authorised share capital of the Group and the renewal
of various allotment authorities.
New Banking Arrangements Secured
A new facility led by Burdale Financial Limited, a subsidiary
of Wachovia Corporation, replaces in full the previous bank
syndicate. The new facility is secured on the assets of the
Group and has a term of up to four years. With less
restrictive covenants, the new facility offers greater
flexibility and scope. It has also facilitated the repayment
of existing senior facilities.
Strategic and Trading Update
Our Plan for Growth, announced earlier this year, is underway.
Our working capital programme will be completed by December
2005 with major advances expected to be made by March 2005. The
capacity utilisation of our Wedgwood factories will be
transformed with concomitant efficiencies by the acquisition of
Royal Doulton, should that take place. Focused marketing
initiatives have been introduced to drive revenue growth over
the next few years.
However, sales for the six months to 30 September 2004 were
disappointing at EURO356 million. On a like-for-like basis
(excluding exchange and All-Clad), sales were 5% below the
corresponding period last year and, as a consequence, the
pre-tax result for the six months is likely to be
significantly below consensus market expectations. Some of
the reduction in sales is because we have refocused our
retail distribution in the United States.
At Waterford Wedgwood's Annual General Meeting held today
in Dublin, the following comments were made:
Sir Anthony O'Reilly, Chairman of Waterford Wedgwood, said:
"The past three years have been turbulent and we would not
deny that the financial performance of the company continues
to disappoint us all.
"Although the current environment remains challenging, in
the past six months we have made many changes and put in
place some important foundations for future growth. Today
is an important day in the history of Waterford Wedgwood.
"The possible acquisition of Royal Doulton would transform
Wedgwood. The benefits of such a deal are immediately
apparent. With Royal Doulton's restructuring largely
completed, we could add Royal Doulton's revenues to our
top-line sales without greatly increasing our costs. This
would increase the profitability of the combined
businesses.
"The fact that the O'Reilly and Goulandris families are
underwriting most of the Rights Issue is proof positive of
our belief in Waterford Wedgwood and its world-class
portfolio of products."
Redmond O'Donoghue, Group Chief Executive, said:
"Today's announcements are very significant. If the
acquisition of Royal Doulton takes place, the very
material investment that we have made in recent years in
our manufacturing facilities will enable us to integrate
Royal Doulton with minimal disruption and lay down the
foundation for improved profitability.
"Our new bank facility provides us with a greater
degree of flexibility, enhances our liquidity and allows
us the freedom to operate our business, focusing on cash
generation in the short-term. While trading performance
in the six months to 30 September wasbehind last year,
we are confident that planned marketing initiatives
and the previously announced cost saving measures will
lead to a reversal of this trend."
The contents of this announcement have been prepared by
and are the sole responsibility of Waterford Wedgwood,
and have been approved by J&E Davy ("Davy") for the
purposes of section 21(2)(b) of the Financial Services
and Markets Act 2000 of the United Kingdom. Davy
is acting for Waterford Wedgwood and no one else in
connection with the Rights Issue and will not be
responsible to anyone other than Waterford Wedgwood
for providing the protections afforded to the clients
of Davy or for providing advice in connection with
the Rights Issue.
Lazard & Co., Limited, is acting for Waterford Wedgwood
in connection with the possible offer and no-one else,
and will not be responsible to anyone other than
Waterford Wedgwood for providing the protections
afforded to clients of Lazard & Co., Limited or for
providing advice in relation to the possible offer.
This announcement shall not constitute, or form part of,
an offer of,or the solicitation of any offer, to subscribe
for or buy any of the Rights Issue Stock Units to be
issued or sold in connection with the Rights Issue.
Offers should only be made on the basis of the information
contained in the Prospectus to be issued in due course in
connection with the Rights Issue and any supplements
thereto. The Prospectus will contain detailed information
about the Rights Issue, Waterford Wedgwood and its
management, as well as financial information.
The offer of the Rights Issue Stock Units in certain
jurisdictions may be restricted by law and therefore
potential investors should inform themselves about and
observe any such restrictions. This announcement does
not contain or constitute an offer of securities for
sale in the United States. The securities referred to
herein have not been and will not be registered under
the US Securities Act of 1933, as amended (the "US
Securities Act") and may not be offered or sold in the
United States absent registration or an exemption from
registration under the US Securities Act. This
announcement and the information contained herein is
not for release, publication or distribution in or
into the United States, Canada, Australia or Japan.
This information is provided by RNS
The company news service from the London Stock Exchange