Offer for Water Hall Group plc
The Independent Director of Water Hall Group plc and the Independent Petards Directors announce that they have reached an agreement on the terms of a recommended offer to be made by Petards for the entire issued and to be issued ordinary share capital of Water Hall.
SUMMARY OF THE OFFER
Under the terms of the Offer, Water Hall Shareholders will be entitled to receive 12.5 New Petards Shares and £2 nominal convertible loan notes per 100 Water Hall Shares. The Convertible Loan Notes, details of which are set out below, convert into Petards Shares at a price of 8p, are unsecured, are redeemable at par 5 years from the date of issue and carry a coupon of 7.0 per cent. per annum.
The Offer values the entire issued and to be issued share capital of Water Hall (assuming full conversion of the Water Hall Loan Note) at approximately £3.56 million, assuming a price per Petards share of 16.5p, the closing mid market price as at close of business on 28 June 2013 (being the last practicable date prior to the date of this Announcement), and valuing the Convertible Loan Notes at nominal value.
The Offer values each Water Hall Share at approximately 4p which represents a premium of approximately 100 per cent. to the closing mid market price of 2 pence for each Water Hall Share as at the close of business on 28 June 2013, (being the last practicable date prior to the date of this Announcement).
BACKGROUND TO AND REASONS FOR THE OFFER
Petards was recently informed by its Bankers that its overdraft facilities amounting to £1.65 million would be withdrawn. On 28 June 2013 Water Hall announced that it had acquired the Petards Bank Debt.
In conjunction with this announcement, Water Hall has agreed to continue to make a £1.65 million working capital facility available to Petards.
In view of Water Hall's 29.99% shareholding in Petards and ownership of Petards' current debt (as on 28 June 2013) and in the absence of any credible alternative in the time available, the Independent Petards Directors and the Independent Water Hall Director have agreed the Offer as the most realistic means of securing the Company's future.
In the absence of the Water Hall Facility Petards would not have been able to continue trading as alternatives sources of finance were not available in the necessary time frame.
The Offer provides Petards with access to the Water Hall Facility and, if completed, will allow Petards effectively to acquire its own debt, 29.99% of its existing share capital, and the remaining cash balances of Water Hall.
Commenting on the Offer Roger Musson, the Independent Director of Water Hall, said: "Petards is in a difficult situation. A practical solution is required to secure the future of the business and therefore I as the Independent Director recommend the offer to Water Hall Shareholders."
The conditions and certain terms of the Offer are set out in this Announcement together with certain information on Water Hall and on Petards. Further information on the Offer (including the terms and conditions to which he Offer will be subject) Water Hall, Petards and the expected timetable of principal events will be set out in the Offer Document and the Form of Acceptance.
This summary should be read in conjunction with, and is subject to, the full text of the following Announcement. Appendix II and Appendix III of the following Announcement contain the sources and bases of certain information and definitions of certain terms respectively, used both in this summary and in the following Announcement.