The Increased Offer comprises:
More Value:1.4 new OM Shares for each LSE Share, valuing each LSE Share at GBP35.83
More Cash: Majority Cash Alternative giving GBP20.00 in cash and 0.5 new OM Shares for each LSE Share, valuing each LSE Share at GBP32.79
More Influence: LSE Shareholders could own up to 33 per cent. of the enlarged OM Group
Clear Governance: Two independent directors on LSE's Board Appointment of new directors to OM's Board to represent new OM Shareholders
Active participation of members, customers and end-usersin dedicated working groups reporting directly to LSE's Board
Strong Leadership: Per E. Larsson, President and Chief Executive Officer of OM, to be appointed Chairman of LSE.
Commenting, Per E. Larsson, President and Chief Executive Officer of OM, said: 'On any rational measure we have made the case for ownership of LSE. LSE has failed its shareholders with its inability to deliver a strategy to face up to the commercially competitive world it now inhabits.
LSE lacks the culture, commercial management and internal technology resources to make necessary fundamental changes. It is now up to shareholders to decide to equip LSE with the means to compete. A change to commercial ownership and management is required.
This Increased Offer for LSE with its substantial cash component demonstrates our determination to win. It represents full value for LSE Shareholders and, as they could hold up to 33 per cent. of the enlarged OM Group, gives them significant influence in OM. We therefore repeat our invitation to LSE's Board to talk to us now.'
Terms of the Increased Offer
Under the Increased Offer, OM is offering LSE Shareholders for each LSE Share held:
1.4 new OM Shares, valuing each LSE Share at GBP35.83 or GBP20.00 in cash and 0.5 new OM Shares (Majoritty Cash Alternative), valuin each LSE Share at GBP32.79.
On the basis of OM's closing share price of SEK369 on 12 October 2000 (the latest practicable date prior to this announcement) and an exchange rate of SEK14.42:GBP1.00 (as published in the Financial Times on that date), the basic terms of the Increased Offer value LSE at approximately GBP1,064 million and the Majority Cash Alternative values LSE at approximately GBP974 million. The basic terms of the Increased Offer represent a premium of approximately 53 per cent. to the closing price of an LSE Share on 25th August 2000, the pre-offer reference price.
The Increased Offer also includes an Additional Cash Election. This will entitle LSE Shareholders who have elected for the Majority Cash Alternative to receive a greater proportion of their consideration in cash to the extent that other LSE Shareholders accept the Increased Offer under its basic terms. There is also a Loan Note Alternative.
LSE's EGM to lift the 4.9 per cent. ownership restriction
The current ownership structure cannot be changed without a change in LSE's Articles regarding the 4.9 per cent. ownership restriction. LSE's Board has sought to stifle debate regarding OM's offer and to block OM's bid by trying to rush through a vote at the EGM called by LSE's Board for 19 October 2000. OM has urged LSE to delay this EGM until the final fortnight of OM's offer process, to ensure that, in accordance with the City Code, LSE Shareholders have been able to receive all material information on LSE.
Notwithstanding that LSE's Board is not prepared to adjourn the EGM until the final fortnight of the offer process, OM urges LSE Shareholders to vote in favour of the Board's resolution.
Even if the resolution is not passed, OM's offer will not lapse or be withdrawn and will continue at least for the expected full 60 day period allowed under the City Code. If OM is in a position to declare the Increased Offer unconditional as to acceptances, OM will take the further steps available to it in order for the offer to be completed successfully.
To accept the Increased Offer
Revised Forms of Acceptance in respect of the Increased Offer should be received not later than 3.00pm on 27 October 2000 (or such later time(s) and date(s) as OM may, subject to The City Code on Takeovers and Mergers, decide). Further copies of the Increased Offer Document and the Revised Form of Acceptance will be available from Capita IRG Plc by post or collection by hand from Capita IRG Plc, New Issues Department, PO Box 166, Bourne House, 34 Beckenham Road, Kent, BR3 4TH or, by hand only (during normal business hours), from Capita IRG Plc, 23 Ironmonger Lane, London EC2.
In addition, the Increased Offer Document will be available on OM's website at www.omgroup.com later today.
