UK: Jarvis Porter cash offer for Darby Group

Jarvis Porter Group has made a GBP 7.46 million offer for flat and bent glass manufacturers Darby Group. The Board of Jarvis Porter Group announced on19 March 2003 the cash offer by Strand Partners of…

Jarvis Porter Group has made a GBP 7.46 million offer for flat and bent glass manufacturers Darby Group. The Board of Jarvis Porter Group announced on19 March 2003 the cash offer by Strand Partners of GBP 0.27 per Darby Group share, on behalf of Jarvis Porter, to acquire the entire issued and to be issued share capital of Darby. The Jarvis offer values Darby at around GBP 7.46 million. Subject to the offer becoming or being declared unconditional in all respects, both the Final Dividend and the Special Dividend, proposed by the Darby board of on 6 March 2003 and totalling GBP 0.01 per Darby Share, will no longer be paid. Commenting on the offer, Darby Chairman, Stephen Knight, said: “The Independent Directors are unable to recommend acceptance of the Offer, because they believe it falls short of a price that fully reflects the future potential of the Company as indicated by the recent trading performance. However, they recognise that in the current uncertain market conditions Darby Shareholders may choose to take advantage of a cash offer at a premium to the current Darby share price.” Darby said that the offer represents a premium of approximately 21.35% over the closing middle market price of GBP 0.2225 pence per Darby Share on 18 March 2003, the last business day before the announcement. Jarvis Porter says it has received a letter from Erudite UK, a company owned by Darby non-executive director Peter Gyllenhammar, indicating that it is willing to accept the offer in respect of 8,262,799 Darby Shares, representing approximately 29.90% of the existing issued ordinary share capital of Darby. Jarvis Porter said that it has also received letters of intent to accept the offer in respect of 5,115,000 Darby Shares representing approximately 18.51% of the existing issued ordinary share capital of Darby from certain Darby Shareholders including funds managed by JOHCM who hold, in total, 1,065,000 Darby Shares or approximately 3.85% of the entire issued ordinary share capital of Darby. Accordingly, the irrevocable undertaking and letters of intent already received by Jarvis Porter count as provisional acceptance of the offer in respect of 48.41% of Darby issued ordinary share capital, or 13,377,799 shares in total. The Independent Directors of Darby are not in favour the offer, believing that the price is too low to make it recommendable to Darby Shareholders, because it does not fully recognise the future potential of Darby as indicated by the recent trading performance. Christopher Mills is a director of both JOHCM and Jarvis Porter. JOHCM is therefore considered to be acting in concert with Jarvis Porter and Mills for the purposes of the offer. Mills beneficially owns 100,000 Darby Shares representing approximately 0.36% of the entire issued ordinary share capital of Darby. Gyllenhammar is a non-executive director of Montpellier and by virtue of his 50% interest in the private Swedish investment company Forvaltnings AB Browallia, which indirectly owns 51.03% of the issued share capital of Montpellier, is also considered by the Panel to be a controlling shareholder of Montpellier. Montpellier currently holds 12,775,000 shares in Jarvis Porter, which is 26.64% of its issued share capital, and therefore both Gyllenhammar and Montpellier are also considered to be acting in concert for the purposes of the offer. Accordingly, the Concert Party holds, in total 9,427,799 Darby Shares, representing 34.12% of the entire issued ordinary share capital of Darby. Commenting on the offer, Jarvis Porter Chairman, Michael Maher, said: “As previously announced, we have been searching for suitable investment opportunities and we believe that the acquisition of Darby will provide an excellent investment for Jarvis Porter“s shareholders and a strong platform for future growth.”