23 August, 2012
Abbey plc (“Abbey” or “the Company”)
Publication of Response Document from the Independent Directors of Abbey in respect of the Unconditional Mandatory Offer by Gallagher Holdings Limited (“Gallagher Holdings”) for the entire issued and to be issued ordinary share capital of Abbey not already owned by Gallagher Holdings
Abbey announces that the Independent Directors of Abbey, being all of the Directors of Abbey other than Messrs. Charles Gallagher and David Gallagher, have today written to Shareholders setting out a response (“Response Document”) to the unconditional Mandatory Offer by Gallagher Holdings to purchase the whole of the issued and to be issued share capital not already owned by Gallagher Holdings (“Mandatory Offer”).
The terms of the Mandatory Offer, together with a number of Company specific and macro factors, have caused the Independent Directors to conclude that it is not possible to give a firm recommendation to all Shareholders to accept or reject the Mandatory Offer and that it is more appropriate for them to set out the arguments for acceptance and for rejection of the Mandatory Offer.
In particular, the Independent Directors are of the view that since the Mandatory Offer envisages a broadly unchanged continuation of the operations, business strategy, employment conditions and management of the Abbey Group, together with, in certain circumstances retention of the listing of the Company’s shares, it may accommodate those Shareholders who wish to remain invested in Abbey, alongside Gallagher Holdings. Conversely for those Shareholders concerned about, inter alia, a diminution in liquidity or in value in the Company’s shares following the completion of the Mandatory Offer and/or wishing to realise all or some of their investment in Abbey at a premium to the Pre-Announcement Market Price of £4.68 per share, acceptance of the Mandatory Offer may be advisable.
The key considerations which the Independent Directors believe Shareholders should have regard to in deciding what action should be taken in respect of the Mandatory Offer are as follows:
• The Offer Price of £5.30 represents a premium of approximately 13.2% to the Pre-Announcement Market Price but a discount of 16.0% to the NAV per share (based on the net assets shown in the 30 April, 2012 balance sheet).
• The Mandatory Offer is already unconditional as Gallagher Holdings owns more than 50% of the Existing Issued Share Capital. Under the Irish Takeover Rules, Gallagher Holdings will be permitted to increase their holding without incurring any further obligation to make any offer. To the extent that the free float of the Company is further reduced whether as a result of acceptances under the Mandatory Offer or market acquisitions by Gallagher Holdings, this would be expected to have an adverse impact on liquidity in the market for Abbey Shares.
• Gallagher Holdings has long been the largest shareholder in Abbey and Charles Gallagher has been Executive Chairman since 1993. Gallagher Holdings has indicated that it does not envisage any changes to the Abbey Group’s management, employees, operations or strategic plans. However Gallagher Holdings will be able to exercise significant influence over Abbey, whether or not it acquires any further Abbey Shares.
• Gallagher Holdings has indicated that it does not currently intend to seek the de-listing of Abbey Shares and that it considers the de-listing to be a matter for the board of directors of Abbey. The Independent Directors consider the quotation of Abbey on ESM and AIM to be of value and would not expect to support its cancellation following completion of the Mandatory Offer unless the compulsory acquisitions had also become applicable. If the Ordinary Shares ceased to be quoted, their marketability would be very limited.
Further more detailed information on the factors of relevance to Shareholders in deciding what action should be taken in respect of the Mandatory Offer is set out in the Response Document. The Independent Directors have been advised by Davy Corporate Finance. In providing its advice Davy Corporate Finance has taken into account the commercial assessments of the Independent Directors.
The Response Document containing the letter from the Independent Directors has been issued in accordance with Rules 25 and 30.3 of the Irish Takeover Rules. The Response Document may be viewed on the Abbey website, at www.abbeyplc.ie.
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The Response Document can be accessed by clicking on the link below: