|
FOR IMMEDIATE RELEASE |
16 August 2006 |
RECOMMENDED CASH OFFER
for
eircom Group plc (“eircom”)
by
BCM Ireland Holdings Limited
(“BCMIH”)
BCMIH CONCLUDES A$6.1 BILLION FINANCING PACKAGE
1. Introduction
On 23 May 2006 the Independent Directors* of eircom and the board of directors of BCMIH announced that they had reached agreement on the terms of a recommended Cash Offer under which BCMIH will acquire the entire issued and to be issued ordinary share capital of eircom not already owned by BCMIH. The Offer is to be effected by means of a scheme of arrangement under section 425 of the Companies Act. BCMIH is a company that has been formed for the purposes of Babcock & Brown Capital Limited (“BCM”) and the eircom Employee Share Ownership Trust (“ESOT”) jointly making the Offer. eircom Shareholders, at a meeting on the 26 July 2006 in Dublin Ireland, voted in favour of the Scheme.
The final Court Hearing to sanction the Scheme and confirm the Capital Reduction is expected to occur on 17 August 2006, with the Effective Date of the Scheme expected to be 18 August 2006. Application has been made by eircom (1) to the Irish Stock Exchange for the cancellation of the listing of Ordinary Shares from the official list of the Irish Stock Exchange with effect from the Effective Date; and (2) to the UK Listing Authority for the cancellation of the listing of Ordinary Shares from the official list of the Financial Services Authority and the cancellation of trading in said shares on the Irish Stock Exchange and the London Stock Exchange with effect from the Effective Date.
2. Financing
BCMIH is pleased to announce that it has finalised the terms of its debt financing package in relation to the recommended offer (the “Offer”) for eircom.
Rob Topfer Executive Director of Babcock & Brown Capital (“BCM”) said “eircom is a highly recognised name in the European credit markets and we worked with our underwriting banks to achieve a very attractive rating and debt package”
“The Senior Debt Facilities and the Floating Rate Note benefited from exceptionally strong investor demand, with the pricing on both facilities significantly below that assumed in our business plan. Assuming a 3 month EURIBOR rate of 3.19%, the weighted average cost of debt would be 6.00%. Assuming swapped rates of 3.71%, the weighted average cost of debt is 6.52%1.”
“Moodys and S&P have assigned corporate ratings of Ba3 / BB- and subordinated ratings of B2 / B.”
The debt financing is comprised of €3.65 billion of Senior Secured Facilities (including €150 million of undrawn revolving facility) and a €350 million Senior Floating Rate Note. The key terms of the debt package are:
|
Facility |
Amount (EUR m) |
Maturity |
Repayment |
Margin (bps)
|
|
Term Loan A |
650 |
7 years |
Amortising |
EURIBOR + 200 |
|
Term Loan B |
1,250 |
8 years |
Bullet |
EURIBOR + 237.5 |
|
Term Loan C |
1,250 |
9 years |
Bullet |
EURIBOR + 275 |
|
Total First Lien Debt |
3,150 |
|
|
|
|
Second Lien |
350 |
9.5 years |
Bullet |
EURIBOR + 425 |
|
Total Senior Debt |
3,500
|
|
|
|
|
Revolving Credit Facility |
150 |
7 years |
Bullet |
EURIBOR + 200
|
|
Total Senior Facilities |
3,650
|
|
|
|
|
Floating Rate Notes (+) |
350 |
10 years |
Bullet |
EURIBOR + 500
|
|
Total Debt |
4,000 |
|
|
|
General
Definitions used in this announcement have the same meaning as set out in the announcement dated 23 May 2006
This announcement does not constitute an offer to sell or an invitation to purchase or subscribe for any securities. Any decision in relation to the Offer should be made only on the basis of the information contained in the Scheme Document or any document by which the Offer is made.
Under the provisions of Rule 8.3 of the City Code, if any person is, or becomes, “interested” (directly or indirectly) in 1 per cent. or more of any class of “relevant securities” of eircom, all “dealings” in any “relevant securities” of eircom (including by means of an option in respect of, or a derivative referenced to, any such “relevant securities”) must be publicly disclosed by no later than 3.30 p.m. (London time) on the London business day following the date of the relevant transaction. This requirement will continue until the date on which the Scheme becomes effective, lapses or is otherwise withdrawn or on which the “offer period” otherwise ends. If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire an “interest” in “relevant securities” of eircom, they will be deemed to be a single person for the purpose of Rule 8.3.
Under the provisions of Rule 8.1 of the City Code, all “dealings” in “relevant securities” of eircom by BCMIH or eircom, or by any of their respective “associates”, must be disclosed by no later than 12.00 noon (London time) on the London business day following the date of the relevant transaction.
A disclosure table, giving details of the companies in whose “relevant securities” “dealings” should be disclosed, and the number of such securities in issue, can be found on the Takeover Panel's website at www.thetakeoverpanel.org.uk .
“Interests in securities” arise, in summary, when a person has long economic exposure, whether conditional or absolute, to changes in the price of securities. In particular, a person will be treated as having an “interest” by virtue of the ownership or control of securities, or by virtue of any option in respect of, or derivative referenced to, securities.
Terms in quotation marks are defined in the City Code, which can also be found on the Panel's website. If you are in any doubt as to whether or not you are required to disclose a “dealing” under Rule 8, you should consult the Panel.
JPMorgan Cazenove, which is regulated in the United Kingdom by the Financial Services Authority, is acting for BCMIH and no one else in connection with the Offer and will not be responsible to anyone other than BCMIH for providing the protections afforded to customers of JPMorgan Cazenove or for providing advice in relation to the Offer.
Davy, which is regulated by the Financial Regulator under the Investment Intermediaries Act 1995, is acting as broker to BCMIH and is also giving financial advice to BCMIH and no one else in connection with the Offer and will not be responsible to anyone other than BCMIH for providing the protections afforded to its customers or for providing advice in relation to the Offer or any matter or arrangement referred to herein.
BCMIH
Robert Topfer
Rex Comb
Tel: +44 (0)20 7203 7300
JPMorgan Cazenove (Financial adviser to BCM and BCMIH)
Robert McGuire
Edward Banks
Andrew Truscott
Tel: +44 (0)20 7588 2828
Davy (Broker to BCMIH)
Ivan Murphy
Paul Burke
Tel: +353 (0)1 679 6363
Wilson Hartnell Public Relations (Public relations adviser to BCMIH)
Brian Bell
Tel: +353 (0)1 669 0273
*The representatives of the ESOT on the eircom Board have absented themselves from eircom Board discussions in relation to the Offer. Peter Lynch has absented himself from the deliberations of the Board of the ESOT Trustee in relation to the Offer.
+ Non call 1 year with prepayment penalty of 102% in Year 2 and 101% in Year 3
1 BCM have entered into interest rate swaps in respect of EUR 2,500 million of debt facilities with 50% for 3 years and 50% for 5 years
END