Guinness Peat Group plc Cash Offer Facility for Staveley Industries plc

gpgplc.com

Guinness Peat Group plc Cash Offer Facility for Staveley Industries plc

Guinness Peat Group plcCash Offer Facility forStaveley Industries plcTHIS DOCUMENT ISIMPORTANT AND REQUIRESYOUR IMMEDIATEATTENTION.If you are in any doubt aboutthe Offer facility or the actionyou should take, you arerecommended to seekimmediately your own financialadvice from your stockbroker,bank manager, solicitor,accountant or other independentprofessional adviser dulyauthorised under the FinancialServices Act 1986.If you have sold or otherwisetransferred all your StaveleyShares, please send this documentand the accompanying Form ofAcceptance and reply-paidenvelope, as soon as possible, tothe purchaser or transferee or tothe stockbroker, bank or other agentthrough whom the sale or transferwas effected for delivery to thepurchaser or transferee.GPGCASH OFFER FACILITY FOR STAVELEY INDUSTRIES PLC


CONTENTSPageLetter from the Chairman of GPG 3Letter from Deloitte & Touche Corporate Finance1. Introduction 52. The Offer 63. Financial Effects of Acceptance 74. Background to and Reasons for the Offer 95. Conditions and Further Terms of the Offer 96. Information on GPG and Staveley 107. Employees 108. Staveley Share Schemes 109. United Kingdom Taxation 1110. Procedure for Acceptance of the Offer 1111. Settlement 1512. Compulsory Acquisition 1613. Further Information 1614. Action to be Taken 16AppendicesI: Conditions and Further Terms of the Offer 18Part A: Conditions of the Offer 18Part B: Further Terms of the Offer 23Part C: Form of Acceptance 31II: Financial Information on the GPG Group 37III: Financial Information on the Staveley Group 39IV: Additional Information 59Definitions 652


Deloitte & Touche Corporate FinanceStonecutter Court1 Stonecutter StreetLondonEC4A 4TR23 August 2000To Staveley Shareholders and, for information only, to participants in the Staveley ShareSchemesDear Staveley Shareholder,Cash Offer for Staveley Industries plc1. IntroductionDeloitte & Touche Corporate Finance today announced a cash offer on behalf ofGPG Acquisitions, a wholly-owned subsidiary of GPG, to acquire the whole ofthe issued and to be issued ordinary share capital of Staveley not already ownedby GPG.The Offer values the issued share capital of Staveley at approximately £69.8million on the basis of the Basic Offer described in paragraph 2(a) below (or£29.8 million assuming all Staveley Shareholders elect for the Alternativedescribed in paragraph 2(b) below). GPG currently owns 33,774,700 StaveleyShares, representing approximately 29.0 per cent. of Staveley’s issued sharecapital.The Offer is final and will not be increased. 1This letter contains the formal Offer by Deloitte & Touche Corporate Finance onbehalf of GPG Acquisitions and is accompanied by, and should be read inconjunction with, the Form of Acceptance.Your attention is drawn to the letter from the Chairman of GPG, on pages 3and 4 of this document, which sets out the reasons for the Offer and why youshould accept it.If you wish to accept the Offer, you are urged to complete and return yourForm of Acceptance without delay and, in any event, so as to be received byComputershare Services PLC at P.O. Box 859, The Pavilions, Bridgwater Road,Bristol BS99 1XZ by no later than 3.00 p.m. on 13 September 2000. StaveleyShareholders should note that, whether or not extended beyond such date, theOffer will in any event lapse and cease to be capable of further acceptance if ithas not become or been declared unconditional in all respects on or before thedate immediately prior to the Dividend Payment Date.1GPG Aquisitions reserves the right to increase or otherwise amend the Offer should a competitive situation arise orshould the Panel otherwise agree.5


A flow chart illustrating the choices for Staveley Shareholders available under theOffer is set out below:Are you on the Staveley Register on theRecord Date?YESNOYou may accept either theBasic Offer or theAlternative.You may accept theAlternative.BASIC OFFERDo you wish to accept theBasic Offer or the Alternative?ALTERNATIVEDo you wish to accept theAlternative?YESInitially, in order to be valid,acceptances for the BasicOffer must be received by nolater than 13 September2000. If extended, it will notin any event be available foracceptance beyond the dateimmediately prior to theDividend Payment Date.Have you accepted withinthe period described in thebox immediately above?YESNOYou may accept the Alternative, ifit remains open for acceptance.Initially, in order to be valid, acceptancesfor the Alternative must be received byno later than 13 September 2000.Whether extended or not, the Offer willlapse if it has not become or beendeclared unconditional in all respects onor before the date immediately prior tothe Dividend Payment Date. If by thenthe Offer has become or is declaredunconditional in all respects, only theAlternative will remain open foracceptance for a further period of at least14 days.Provided the Offer hasbecome or been declaredunconditional in all respects,your Staveley Shares will betransferred together with theright to receive the SpecialInterim Dividend. You willno longer be entitled toreceive the Special InterimDividend but instead willreceive, as part of theconsideration for the Offer,an amount equal to theSpecial Interim Dividend oneach Staveley Share inrespect of which you havevalidly accepted the BasicOffer.NOIs the Alternative stillopen for acceptance?You will not be eligibleto accept the Alternative.NOYESHave you accepted theAlternative within theperiod described in the boximmediately above?YESProvided the Offer hasbecome or been declaredunconditional in all respects,your Staveley Shares will betransferred but, if eligible, youwill retain the right to receivethe Special Interim Dividend.8


4. Background to and Reasons for the OfferThe background to, and reasons for, the Offer are set out in the letter from SirRon Brierley, the Chairman of GPG, on pages 3 and 4 of this document.5. Conditions and Further Terms of the Offer(a) The Basic OfferUnder the Basic Offer, if the Offer is successful, Staveley Shares validlyaccepted will be acquired fully paid and free from all liens, equities,charges, encumbrances, rights of pre-emption and other interests andtogether with all rights now or hereafter attaching thereto, including theright to receive and retain all dividends and other distributions declared,made or payable on or after 23 August 2000, including the Special InterimDividend.However, for administrative convenience, if the Offer is successful, aStaveley Shareholder will receive from Staveley in respect of each of hisStaveley Shares for which he has validly accepted the Basic Offer, anamount equal to the Special Interim Dividend on the Dividend PaymentDate, notwithstanding that he has transferred the right to receive thesame to GPG Acquisitions. He will be treated as holding the amountreceived as nominee for GPG Acquisitions and a corresponding amountwill be set off against the total consideration due to him. As the amountis received by him as a nominee for GPG Acquisitions, it should not betreated as a dividend receipt for tax purposes and he will not be entitledto utilise any tax credit attaching to the Special Interim Dividend. Uponexercise of the set off, the amount will instead be treated as part of theconsideration due to him.As a consequence, Staveley Shareholders who validly accept the BasicOffer may receive part of the consideration due to them earlier than theywould otherwise be entitled under the rules of the City Code on Takeoversand Mergers.(b)The AlternativeUnder the Alternative, if the Offer is successful, Staveley Shares validlyaccepted will be acquired fully paid and free from all liens, equities,charges, encumbrances, rights of pre-emption and other interests andtogether with all rights now or hereafter attaching thereto, including theright to receive and retain all dividends and other distributions declared,made or payable on or after 23 August 2000, other than the Special InterimDividend. Staveley Shareholders who accept the Alternative will, ifeligible, retain the right to receive the Special Interim Dividend.The conditions of the Offer, together with the further terms of the Offer, are setout in Appendix I to this document. Staveley Shareholders are also referred tothe provisions relating to acceptance and settlement set out in paragraphs 10and 11 below.9


6. Information on GPG and Staveley(a) GPGGPG is a strategic investment holding company whose shares are listed onthe London, Australian and New Zealand Stock Exchanges. The GPGGroup invests in a wide range of sectors.Since the current management took control in 1990, GPG has made anumber of strategic investments, mostly in Australia and New Zealandbut also in the United States and, increasingly, the United Kingdom. Itmakes selective investments, predominantly in public companies, for thepurpose of enhancing and realising additional value by means ofappropriate levels of shareholder influence and control.For the year ended 31 December 1999, GPG’s consolidated turnover was£103.8 million (1998: £176.0 million, as restated) and profit before taxationwas £120.7 million (1998: £29.4 million). Shareholders’ funds at 31December 1999 were £283.9 million (1998: £167.1 million).The major component of the 1999 profit after tax of £115.2 million was the£95.5 million surplus on the sale of shares in Tyndall Australia. The boardof GPG believes that the year 2000 will be an active and hopefullyrewarding one for GPG, although, without the benefit of the Tyndallsurplus, the profit will be substantially less than in 1999.GPG Acquisitions, which is used for general corporate purposes, is awholly-owned subsidiary of GPG.Further information on GPG is set out in Appendix II to this document.(b)StaveleyStaveley provides technical services which are designed to support theoperation of the facilities and assets of its customers. In the UK, Staveleyprovides facilities management services (together with mechanical,electrical and fabric maintenance services) to commercial, retail,industrial, local authority and MoD premises through Integral and arange of contracting services in banks, factories and retail premisesthrough EI-WHS, MJN Colston and Hall & Kay. Staveley also providestesting services through SNDT and SSNA in the United States.For the period ended 1 April 2000, Staveley’s consolidated turnover was£281.9 million (1999: £295.0 million) and profits/(losses) before taxationwere £2.4 million (1999: (£6.2 million)) and consolidated net assets andshareholders’ funds as at 1 April 2000 were £53.7 million (1999: £51.9million).7. EmployeesFollowing implementation of the Offer, the existing rights of all Staveleyemployees, including pension rights, will be fully safeguarded.8. Staveley Share SchemesThe Offer extends to any Staveley Shares unconditionally allotted or issuedprior to the date on which the Offer closes (or such earlier date asGPG Acquisitions may, subject to the Code, determine) as a result of the10


exercise of options granted under the Staveley Share Schemes. To the extent thatsuch options are not exercised and in the event that the Offer becomes or isdeclared unconditional in all respects, appropriate proposals will be put toholders of options under the Staveley Share Schemes. Such proposals will notextend to options which have been granted at an exercise price in excess of theOffer price.9. United Kingdom TaxationGenerally, if successful, the Offer should result, in the case ofStaveley Shareholders who accept the Basic Offer, in the aggregate amount ofthe consideration received by such Shareholders (i.e. 60 pence per Share) beingtreated as a capital receipt for the purposes of UK taxation of chargeable gains.In contrast, Staveley Shareholders who elect for the Alternative will receive 25.6pence per Share, which will be treated for the purpose of UK taxation as acapital receipt in their hands. Staveley Shareholders who elect for theAlternative will also, if eligible, receive the Special Interim Dividend of 34.4pence per Share, which will be taxed in their hands as UK dividend income.Staveley Shareholders are referred to paragraph 7 of Appendix IV for asummary of the UK tax consequences for certain Staveley Shareholders ofaccepting the Offer. However, the taxation consequences for StaveleyShareholders depend on their own circumstances. All Staveley Shareholdersare strongly recommended to consult their professional advisers if they are inany doubt about their taxation position.10. Procedure for Acceptance of the OfferThis section should be read together with the instructions and the notes on theForm of Acceptance which are deemed to form part of the terms of the Offer.(a)Completion of Form of AcceptanceYou should note that if you hold Staveley Shares in both certificated anduncertificated form (that is, in CREST), you should complete a separateForm of Acceptance for each holding. In addition, you should completeseparate Forms of Acceptance for Staveley Shares held in uncertificatedform, but under different member account IDs, and for Staveley Sharesheld in certificated form but under different designations. AdditionalForms of Acceptance are available from Computershare Services PLC atP.O. Box 859, The Pavilions, Bridgwater Road, Bristol BS99 1XZ.(i)To accept the Offer in respect of your Staveley SharesTo accept the Offer you must complete Boxes 1 and 4 (and, if yourStaveley Shares are in CREST, Box 5). In all cases you must sign Box3 on the enclosed Form of Acceptance in the presence of a witness,who should also sign in accordance with the instructions printedon the Form. By inserting a number of Staveley Shares in Box 1, youwill be indicating your intention to accept the Basic Offer in respectof such Staveley Shares, less such number of Staveley Shares as maybe inserted in Box 2 (see (ii) below).Subject to the following, if you do not insert a number in Box 1, oryou insert a number in Box 1 which exceeds your holding of Staveley11


Shares, a valid acceptance of the Basic Offer will be deemed to bemade in respect of all the Staveley Shares held by you (or, if anumber is inserted in Box 2, all of the balance of such holding, ifany). However, if the Basic Offer is no longer open for acceptance orif you were not on the Staveley Register on the Record Date, a validacceptance of the Alternative will be deemed to be made in respect ofall of such Shares or of such lesser number as may be inserted inBox 2.(ii)To elect for the Alternative in respect of your Staveley SharesTo elect for the Alternative in respect of some or all of your StaveleyShares, you should complete Box 2 in addition to completing theForm of Acceptance as set out in (i) above.In all cases you must sign Box 3 on the Form of Acceptance in thepresence of a witness, who should also sign in accordance with theinstructions printed on the Form.If you have any questions as to how to complete the Form of Acceptanceor wish to receive additional Forms of Acceptance, please telephoneComputershare Services PLC on 0870 702 0100.(b)(c)Return of Form of AcceptanceTo accept the Offer, the completed Form of Acceptance should be returned(whether or not your Staveley Shares are in CREST), by post or by hand toComputershare Services PLC at P.O. Box 859, The Pavilions, BridgwaterRoad, Bristol BS99 1XZ or (during normal business hours) by hand only toComputershare Services PLC at 7th Floor, Jupiter House, Triton Court,14 Finsbury Square, London EC2A 1BR together (unless your shares are inCREST) with the relevant share certificate(s) and/or other document(s) oftitle (see paragraphs (c) and (d) below), as soon as possible, but in anyevent so as to be received by no later than 3.00 p.m. on 13 September2000. A reply-paid envelope is enclosed for your convenience. Noacknowledgement of receipt of documents will be given.Staveley Shares in certificated form – Documents of titleIf your Staveley Shares are in certificated form, the completed, signed andwitnessed Form of Acceptance should be accompanied by the relevantshare certificate(s) and/or other document(s) of title. If for any reason therelevant share certificate(s) and/or the other documents of title is/are lostor not readily available, you should nevertheless complete, sign and returnthe Form of Acceptance as stated above so as to be received byComputershare Services PLC no later than 3.00 p.m. on 13 September2000. You should send with the Form of Acceptance any share certificate(s)and/or other document(s) of title which you may have available and aletter stating that the remaining document(s) will follow as soon aspossible or that you have lost one or more of your share certificate(s) and/or other document(s) of title. You should then arrange for the relevantshare certificate(s) and/or other document(s) of title to be forwarded assoon as possible. If you have lost your share certificate(s) and/or otherdocument(s) of title, you should contact Staveley’s registrars, CapitaIRG plc, Bourne House, 34 Beckenham Road, Beckenham, Kent BR3 4TU12


(telephone no. 020 8639 2000) for a letter of indemnity for lost sharecertificate(s) and/or other document(s) of title which, when completed inaccordance with the instructions given, should be returned toComputershare Services PLC at either of the addresses set out inparagraph (b) above.(d)Additional procedures for Staveley Shares in uncertificated form (thatis, in CREST)If your Staveley Shares are in uncertificated form, you should insert in Box5 of the Form of Acceptance the participant ID and member account IDunder which such Staveley Shares are held by you in CREST andotherwise complete and return the Form of Acceptance as described inparagraphs (a) and (b) above. In addition, you should take (or procure tobe taken) the action set out below to transfer the Staveley Shares in respectof which you wish to accept the Offer to an escrow balance (that is, issue aTTE instruction) specifying Computershare Services PLC (in its capacity asa CREST participant under the participant ID referred to below) as theescrow agent, as soon as possible and in any event so that the transfer toescrow settles no later than 3.00 p.m. on 13 September 2000.If you are a CREST sponsored member, you should refer to your CRESTsponsor before taking any action. Your CREST sponsor will be able toconfirm details of your participant ID and the member account ID underwhich your Staveley Shares are held. In addition, only your CRESTsponsor will be able to send the required TTE instruction to CRESTCo inrelation to your Staveley Shares.You should send (or, if you are a CREST sponsored member, procure thatyour CREST sponsor sends) a TTE instruction to CRESTCo which must beproperly authenticated in accordance with CRESTCo’s specifications andwhich must contain, in addition to the other information that is requiredfor a TTE instruction to settle in CREST, the following details:rrrrrrthe number of Staveley Shares to be transferred to an escrow balance;your member account ID. This must be the same member account IDas the member account ID inserted in Box 5 of the Form ofAcceptance;your participant ID. This must be the same participant ID as thatinserted in Box 5 of the Form of Acceptance;the participant ID of the Escrow Agent (namely ComputershareServices PLC in its capacity as a CREST receiving agent). This is3RA28;the member account ID of the Escrow Agent. This is STAVELEY;the Form of Acceptance reference number. This is the referencenumber that appears next to Box 5 on page 3 of the Form ofAcceptance. This reference number should be inserted in the firsteight characters of the shared note field on the TTE instruction. Suchinsertion will enable Computershare Services PLC to match the TTEinstruction to your Form of Acceptance. You should keep a separaterecord of this reference number for future reference;13


rrrthe intended transfer to escrow settlement date. This should be assoon as possible and in any event not later than 3.00 p.m. on13 September 2000;the Corporate Action ISIN, which is GB0008423542;the Corporate Action Number for the Offer. This is allocated byCRESTCo and can be found by viewing the relevant CorporateAction Details in CREST; andr the Delivery Instructions with a priority of 80.After settlement of the TTE instruction, you will not be able to access theStaveley Shares concerned in CREST for any transaction or chargingpurposes. If the Offer becomes or is declared unconditional in all respects,the Escrow Agent will transfer the Staveley Shares concerned to itself inaccordance with paragraphs (e) and (f) of Part C of Appendix I of thisdocument.You are recommended to refer to the CREST manual published byCRESTCo for further information on the CREST procedures outlinedabove. For ease of processing, you are requested, wherever possible, toensure that a Form of Acceptance relates to only one transfer to escrow.If no Form of Acceptance reference number, or an incorrect Form ofAcceptance reference number, is included on the TTE instruction,GPG Acquisitions may treat any amount of Staveley Shares transferredto an escrow balance in favour of the Escrow Agent specified above fromthe participant ID and member account ID identified in the TTEinstruction as relating to any Form(s) of Acceptance which relate(s) tothe same member account ID and participant ID (up to the amount ofStaveley Shares inserted or deemed to be inserted on the Form ofAcceptance concerned).You should note that CRESTCo does not make available specialprocedures, in CREST, for any particular corporate action. Normalsystem timings and limitations will therefore apply in connection with aTTE instruction and its settlement. You should therefore ensure that allnecessary action is taken by you (or by your CREST sponsor) to enableany TTE instruction relating to your Staveley Shares to settle prior to3.00 p.m. on 13 September 2000. In this regard, you are referred inparticular to those sections of the CREST manual concerning practicallimitations of the CREST system and timings.GPG Acquisitions will make an appropriate announcement if any of thedetails contained in this paragraph (d) alter for any reason in any respectthat is material to Staveley Shareholders.(e)Deposits of Staveley Shares into, and withdrawals of Staveley Sharesfrom, CRESTNormal CREST procedures (including timings) apply in relation to anyStaveley Shares that are, or are to be, converted from uncertificated tocertificated form, or from certificated to uncertificated form, during thecourse of the Offer (whether any such conversion arises as a result of atransfer of Staveley Shares or otherwise). Holders of Staveley Shares who14


are proposing so to convert any such Staveley Shares are recommended toensure that the conversion procedures are implemented in sufficient timeto enable the person holding or acquiring the Staveley Shares as a result ofthe conversion to take all necessary steps in connection with an acceptanceof the Offer (in particular, as regards delivery of share certificate(s) orother document(s) of title or transfers to an escrow balance as describedabove) prior to 3.00 p.m. on 13 September 2000.(f)Validity of acceptanceWithout prejudice to Part B of Appendix I of this document,GPG Acquisitions reserves the right (subject to the provisions of theCode) to treat as valid in whole or in part any acceptance of the Offerwhich is not entirely in order or which is not accompanied by the relevantTTE instruction or (as applicable) the relevant share certificate(s) and/orother document(s) of title. In that event, no payment of cash under theOffer will be made until after the relevant TTE instruction has settled or(as applicable) the relevant share certificate(s) and/or other document(s)of title or indemnities satisfactory to GPG Acquisitions have been received.If you are in any doubt as to the procedure for acceptance, pleasetelephone Computershare Services PLC on 0870 702 0100. You arereminded that, if you are a CREST sponsored member, you should contactyour CREST sponsor before taking any action.(g)Overseas shareholdersThe attention of Staveley Shareholders who are citizens or residents ofjurisdictions outside the United Kingdom, or who are nominees of, orcustodians or trustees for, any such person, or who intend to forward thisdocument to any jurisdiction outside the United Kingdom, is drawn toparagraph 6 of Part B of Appendix I to this document and to the relevantprovisions of the Form of Acceptance, which they should read beforetaking any action.The availability of the Offer to persons not resident in the United Kingdommay be affected by the laws of the relevant jurisdictions. Persons who aresubject to the laws of any jurisdiction other than the United Kingdomshould inform themselves about and observe any applicable requirements.11. SettlementSubject to the Offer becoming or being declared unconditional in all respects(and except as provided in paragraph 5(b) of Part B of Appendix I to thisdocument in the case of Staveley Shareholders who accept the Basic Offer)settlement of the consideration to which any Staveley Shareholder is entitledunder the Offer will be effected (i) in the case of acceptances received, valid andcomplete in all respects, by the date on which the Offer becomes or is declaredunconditional in all respects, within 14 days of such date; or (ii) in the case ofacceptances received, valid and complete in all respects, after the date on whichthe Offer becomes or is declared unconditional in all respects but while itremains open for acceptance, within 14 days of such receipt, in the followingmanner:15


(a)(b)Staveley Shares in certificated formWhere an acceptance relates to Staveley Shares in certificated form,settlement of any cash due will be dispatched by first class post (or by suchother method as the Panel may approve). All such payments will be madein pounds sterling by cheque drawn on a branch of a UK clearing bank.Staveley Shares in uncertificated form (that is, in CREST)Where an acceptance relates to Staveley Shares in uncertificated form, thecash consideration to which the accepting Staveley Shareholder is entitledwill be paid by means of CREST by GPG Acquisitions procuring thecreation of an assured payment obligation in favour of the acceptingStaveley Shareholder’s payment bank in respect of the cash considerationdue, in accordance with the CREST assured payment arrangements.GPG Acquisitions reserves the right to settle all or any part of theconsideration referred to in this paragraph (b) for all or any acceptingStaveley Shareholder(s) in the manner referred to in paragraph (a) aboveif, for any reason, it wishes to do so.(c)GeneralIf the Offer does not become or is not declared unconditional in all respects(i) completed Form(s) of Acceptance, share certificate(s) and/or otherdocument(s) of title will be returned by post (or such other method as maybe approved by the Panel), within 14 days of the Offer lapsing, to theperson or agent whose name and address is set out in Box 6 of the Form ofAcceptance or, if none is set out, to the first named or sole holder at hisregistered address and (ii) the Escrow Agent will, immediately after thelapsing of the Offer (or within such longer period, not exceeding 14 daysafter the Offer lapses, as the Panel may approve), give TFE instructions toCRESTCo to transfer all Staveley Shares held in escrow balances and inrelation to which it is the Escrow Agent for the purposes of the Offer to theoriginal available balances of the Staveley Shareholders concerned.All documents and remittances sent by, to or from Staveley Shareholdersor their appointed agents will be sent at their own risk.12. Compulsory AcquisitionIf GPG Acquisitions receives acceptances under the Offer in respect of, and/orotherwise acquires, 90 per cent. or more of the Staveley Shares to which theOffer relates and the Offer becomes unconditional in all respects,GPG Acquisitions will exercise its rights pursuant to the provisions ofsections 428 to 430F of the Act to acquire compulsorily the remaining StaveleyShares.13. Further InformationYour attention is drawn to the further information contained in the Appendiceswhich form part of this document.14. Action to be TakenIf you wish to accept the Offer, please return the Form of Acceptance dulycompleted (whether your Staveley Shares are in CREST or not) by post or by16


hand to Computershare Services PLC at P.O. Box 859, The Pavilions,Bridgwater Road, Bristol BS99 1XZ or (during normal business hours) byhand only to Computershare Services PLC at 7th Floor, Jupiter House, TritonCourt, 14 Finsbury Square, London EC2A 1BR, as soon as possible and, in anyevent, to be received by no later than 3.00 p.m. on 13 September 2000. Theprocedure for acceptance is set out in paragraph 10 of this letter and in theForm of Acceptance.Yours sincerelyROBIN P BINKSPartnerFor and on behalf of Deloitte & Touche Corporate Finance17


Appendix IConditions and Further Terms of the OfferPart A: Conditions of the OfferThe Offer, which is made by Deloitte & Touche Corporate Finance on behalf ofGPG Acquisitions, will comply with the Code and will be governed by English law and besubject to the jurisdiction of the courts of England. The Offer will be made on the terms andconditions set out in this Offer Document and in the Form of Acceptance.1. Conditions of the OfferThe Offer will be subject to the following conditions:(a)(b)(c)valid acceptances being received (and not, where permitted, withdrawn) by3.00 p.m. on 13 September 2000 (or such later time(s) and/or date(s) asGPG Acquisitions may, subject to the rules of the Code, decide) in respect of suchnumber of Staveley Shares which, together with Staveley Shares acquired oragreed to be acquired before or during the offer period, either pursuant to theOffer or otherwise, results in GPG Acquisitions and any persons acting in concertwith it holding Staveley Shares carrying, in aggregate, more than 50 per cent. ofthe voting rights then exercisable at a general meeting of Staveley, including forthis purpose to the extent (if any) required by the Panel, any such voting rightsattaching to any Staveley Shares that may be unconditionally allotted or issuedbefore the Offer becomes or is declared unconditional as to acceptances whetherpursuant to the exercise of any outstanding conversion or subscription rights orotherwise, and for this purpose Shares which have been unconditionally allottedbut not issued shall be deemed to carry the voting rights which they will carry onbeing entered into the Staveley register;the Office of Fair Trading indicating, in terms satisfactory to GPG Acquisitions,that it is not the intention of the Secretary of State for Trade and Industry to referthe proposed acquisition of Staveley by GPG Acquisitions or any matter arisingtherefrom to the Competition Commission;no government or governmental, quasi-governmental, supranational, statutory,administrative or regulatory body, authority, court, trade agency, association,institution, environmental body or any other person or body in any jurisdiction(each a ‘‘Relevant Authority’’) having decided to take, instituted, implemented orthreatened any action, proceedings, suit, investigation, enquiry or reference, ormade, proposed or enacted any statute, regulation, order or decision or taken anyother steps and there not continuing to be outstanding any statute, regulation,order or decision, which would or might:(i)(ii)make the Offer or the acquisition of any Staveley Shares, or control ofStaveley by GPG Acquisitions void, illegal or unenforceable, or otherwiserestrict, restrain, prohibit, delay or interfere with the implementationthereof, or impose additional conditions or obligations with respect thereto,or require amendment thereof or otherwise challenge or interferetherewith;require or prevent the divestiture by Staveley or any of its subsidiaries orsubsidiary undertakings or any associated undertaking or any company ofwhich 20 per cent. or more of the voting capital is held by theStaveley Group or any partnership, joint venture, firm or company inwhich any member of the Staveley Group may be interested (the ‘‘widerStaveley Group’’) or by GPG or any of its subsidiaries or subsidiary18


undertakings or any associated undertaking or any company of which20 per cent. or more of the voting capital is held by the GPG Group or anypartnership, joint venture, firm or company in which any member of theGPG Group may be interested (the ‘‘wider GPG Group’’) of all or anyportion of their respective businesses, assets or property or impose anylimitation on the ability of any of them to conduct their respectivebusinesses or own any of their assets or property;(iii)(iv)(v)impose any limitation on or result in a delay in the ability of any member ofthe wider Staveley Group or the wider GPG Group to acquire or to hold orto exercise effectively any rights of ownership of shares or loans orsecurities convertible into shares in any member of the widerStaveley Group or of the wider GPG Group held or owned by it or toexercise management control over any member of the wider Staveley Groupor of the wider GPG Group;require any member of the wider GPG Group or the wider Staveley Groupto acquire or offer to acquire any shares or other securities in any memberof the wider Staveley Group;otherwise materially and adversely affect the assets, business, profits orprospects of any member of the wider GPG Group or of any member of thewider Staveley Group;and all applicable waiting and other time periods during which any suchRelevant Authority could decide to take, institute, implement or threaten anysuch action, proceedings, suit, investigation, enquiry or reference having expired,lapsed or been terminated;(d)(e)all necessary filings having been made, all applicable waiting periods (includingany extensions thereof) under any applicable legislation or regulations of anyjurisdiction having expired, lapsed or been terminated, in each case in respect ofthe Offer and the acquisition of any Staveley Shares, or of control of Staveley, byGPG Acquisitions, and all authorisations, orders, recognitions, grants, consents,licences, confirmations, clearances, permissions and approvals (‘‘Authorisations’’)necessary or appropriate in any jurisdiction for, or in respect of, the Offer and theproposed acquisition of any Staveley Shares, or of control of Staveley, byGPG Acquisitions and to carry on the business of any member of the wider GPGGroup or of the wider Staveley Group having been obtained, in terms and in aform satisfactory to GPG Acquisitions, from all appropriate Relevant Authoritiesand from any persons or bodies with whom any member of the wider GPGGroup or the wider Staveley Group has entered into contractual arrangementsand all such Authorisations remaining in full force and effect at the time at whichthe Offer becomes unconditional in all respects and GPG Acquisitions having noknowledge of an intention or proposal to revoke, suspend or modify or not torenew any of the same and all necessary statutory or regulatory obligations in anyjurisdiction having been complied with;there being no provision of any arrangement, agreement, licence, permit or otherinstrument to which any member of the wider Staveley Group is a party or by orto which any such member or any of their assets is or may be bound, entitled orbe subject to and which, in consequence of the Offer or the acquisition of anyStaveley Shares, or control of Staveley, by GPG Acquisitions or otherwise, wouldor might, to an extent which is material, result in:(i)any monies borrowed by, or other indebtedness actual or contingent of, anysuch member of the wider Staveley Group being or becoming repayable or19


being capable of being declared repayable immediately or prior to its ortheir stated maturity or the ability of any such member to borrow monies orincur any indebtedness being inhibited;(ii)(iii)(iv)(v)(vi)(vii)the creation of any mortgage, charge or other security interest over thewhole or any part of the business, property or assets of any such member orany such security (whenever arising or having arisen) being enforced orbecoming enforceable;any such arrangement, agreement, licence or instrument being terminatedor adversely modified or any action being taken of an adverse nature orany obligation arising thereunder;any assets of any such member being disposed of or charged, or rightarising under which any such asset could be required to be disposed of orcharged, other than in the ordinary course of business;the interest or business of any such member of the wider Staveley Group inor with any firm or body or person, or any agreements or arrangementsrelating to such interest or business, being terminated or adverselymodified or affected;any such member ceasing to be able to carry on business under any nameunder which it presently does so;the creation of liabilities (actual or contingent) by any such member; or(viii) the financial or trading position of any such member being prejudiced oradversely affected;(f)except as publicly announced by delivery of an announcement to the CompanyAnnouncements Office of the London Stock Exchange by Staveley prior to23 August 2000, no member of the wider Staveley Group having, since 1 April2000:(i)(ii)(iii)(iv)(v)issued, agreed to issue or proposed the issue of additional shares orsecurities of any class, or securities convertible into, or exchangeable for orrights, warrants or options to subscribe for or acquire, any such shares,securities or convertible securities (save as between Staveley andwholly-owned subsidiaries of Staveley and save for options granted, andfor any Staveley Shares allotted upon exercise of options granted, under theStaveley Share Schemes) before the date hereof, or redeemed, purchased orreduced any part of its share capital;recommended, declared, paid or made or proposed to recommend, declare,pay or make any bonus, dividend or other distribution other than toStaveley or a wholly-owned subsidiary of Staveley;agreed, authorised, proposed or announced its intention to propose anymerger or demerger or acquisition or disposal of assets or shares (otherthan in the ordinary course of trading) or to any material change in its shareor loan capital;issued, authorised or proposed the issue of any debentures or incurred anyindebtedness or contingent liability;acquired or disposed of or transferred, mortgaged or encumbered any assetor any right, title or interest in any asset (other than in the ordinary courseof trading);20


(vi)(vii)entered into or varied or announced its intention to enter into or vary anycontract, arrangement or commitment (whether in respect of capitalexpenditure or otherwise) which is of a long-term or unusual nature orinvolves or could involve an obligation of a nature or magnitude which ismaterial in the context of the Staveley Group;entered into or proposed or announced its intention to enter into anyreconstruction, amalgamation, transaction or arrangement (otherwise thanin the ordinary course of business);(viii) taken or proposed any corporate action or had any legal proceedingsinstigated or threatened against it for its winding-up, dissolution orreorganisation or for the appointment of a receiver, administrator,administrative receiver, trustee or similar officer of all or any of its assetsand revenues (or any analogous proceedings or appointment in anyoverseas jurisdiction);(ix)(x)(xi)(xii)been unable, or admitted in writing that it is unable, to pay its debts orhaving stopped or suspended (or threatened to stop or suspend) paymentof its debts generally or ceased or threatened to cease carrying on all or asubstantial part of its business;entered into or varied or made any offer to enter into or vary the terms ofany service agreement or arrangement with any of the directors of Staveley;waived, compromised or settled any claim which is material in the contextof the wider Staveley Group; orentered into any agreement, arrangement or commitment or passed anyresolution with respect to any of the transactions or events referred to inthis paragraph (f);(g)since 1 April 2000, except as publicly announced by delivery of an announcementto the Company Announcements Office of the London Stock Exchange byStaveley prior to 23 August 2000:(i)there having been no adverse change in the business, assets, financial ortrading position or profits or prospects of any member of the widerStaveley Group;(ii) no litigation, arbitration proceedings, prosecution or other legalproceedings having been instituted, announced or threatened by oragainst or remaining outstanding against any member of the widerStaveley Group and no enquiry or investigation by or complaint orreference to any Relevant Authority against or in respect of any member ofthe wider Staveley Group having been threatened, announced or institutedor remaining outstanding;(h)GPG Acquisitions not having discovered that:(i) the financial, business or other information concerning the widerStaveley Group as contained in the information publicly announced ordisclosed at any time by or on behalf of any member of the widerStaveley Group either contains a misrepresentation of fact or omits to statea fact necessary to make the information contained therein not misleading;or21


(ii)any member of the wider Staveley Group is subject to any liability,contingent or otherwise, which is not disclosed in the annual report andaccounts of Staveley for the financial year ended 1 April 2000; and(i)GPG Acquisitions not having discovered that, save as publicly announced bydelivery of an announcement to the Company Announcements Office of theLondon Stock Exchange by Staveley prior to 23 August 2000:(i)(ii)(iii)(iv)any past or present member of the wider Staveley Group has not compliedwith all applicable legislation or regulations of any jurisdiction or anynotice or requirement of any Relevant Authority with regard to the storage,disposal, discharge, spillage, leak or emission of any waste or hazardoussubstance or any substance likely to impair the environment or harmhuman health, which non-compliance would be likely to give rise to anyliability (whether actual or contingent) on the part of any member of thewider Staveley Group;there has been a disposal, spillage, emission, discharge or leak of waste orhazardous substance or any substance likely to impair the environment orharm human health on, or from, any land or other asset now or previouslyowned, occupied or made use of by any past or present member of thewider Staveley Group, or in which any such member may now orpreviously have had an interest, which would be likely to give rise to anyliability (whether actual or contingent) on the part of any member of thewider Staveley Group;there is or is likely to be any obligation or liability (whether actual orcontingent) to make good, repair, reinstate or clean up any property now orpreviously owned, occupied or made use of by any past or present memberof the wider Staveley Group, or in which any such member may now orpreviously have had an interest, under any environmental legislation orregulation or notice, circular or order of any Relevant Authority in anyjurisdiction; orcircumstances exist whereby a person or class of persons would be likely tohave any claim or claims in respect of any product or process ofmanufacture, or materials used therein, now or previously manufactured,sold or carried out by any past or present member of the wider StaveleyGroup, which claim or claims would be likely to affect adversely anymember of the wider Staveley Group.GPG Acquisitions reserves the right to waive, in whole or in part, all or any ofconditions (b) to (i) inclusive. GPG Acquisitions also reserves the right, subject to theconsent of the Panel, to extend the time allowed under the Code for satisfaction ofcondition (a) until such time as conditions (b) to (i) have been satisfied, fulfilled or, tothe extent permitted, waived. If GPG Acquisitions is required by the Panel to make anoffer for Staveley Shares under the provisions of Rule 9 of the Code, GPG Acquisitionsmay make such alterations to the above conditions, including condition (a) above, as arenecessary to comply with the provisions of that Rule.The Offer will lapse unless the conditions set out above (other than condition (a) to theOffer) are fulfilled or (if capable of waiver) waived or, where appropriate, have beendetermined by GPG Acquisitions in its reasonable opinion to be or to remain satisfiedby no later than the earlier of the date immediately prior to the Dividend Payment Dateand whichever is the later of 4 October 2000 and the 21st day after the date on whichcondition (a) is satisfied (or, in each case, such later date as the Panel may agree).GPG Acquisitions shall be under no obligation to waive or treat as satisfied any of22


conditions (b) to (i) inclusive by a date earlier than the latest date specified above for thesatisfaction thereof, notwithstanding that the other conditions of the Offer may at suchearlier date have been waived or fulfilled or satisfied and that there are at such earlierdate no circumstances indicating that any of such conditions may not be capable offulfilment or satisfaction.The Offer will lapse if it is referred to the Competition Commission before 3.00 p.m. on13 September 2000 or the date on which the Offer become, or is declared unconditionalas to acceptances, whichever is the later. If the Offer so lapses, the Offer will cease to becapable of further acceptance and accepting Staveley Shareholders andGPG Acquisitions will cease to be bound by Forms of Acceptance submitted beforethe time when the Offer lapses.2. Further Terms(a) The Offer will extend to all Staveley Shares unconditionally allotted or issued onthe date on which the Offer is made and any further Staveley Sharesunconditionally allotted or issued while the Offer remains open for acceptance(or such earlier date or dates as GPG Acquisitions may decide).(b)(c)The Staveley Shares are to be acquired by GPG Acquisitions fully paid and freefrom all liens, charges and encumbrances, rights of pre-emption and any otherthird party rights of any nature whatsoever and (save as provided in paragraph(c) below) together with all rights attaching thereto, including the right to alldividends or other distributions declared, paid or made on or after 23 August2000.Staveley Shares in respect of which a valid election for the Alternative has beenmade will be acquired without the right to receive the Special Interim Dividend.Part B: Further Terms of the OfferThe conditions in Part A of this Appendix I and the following further terms apply to the Offerunless the context otherwise requires.Except where the context requires otherwise, any reference in this document and in the Formof Acceptance:(i)(ii)(iii)(iv)(v)to the ‘‘Offer’’ will mean the Offer (including the Basic Offer and the Alternative) andwill include any revision, variation or renewal thereof or extension thereto and anyalternative in connection therewith;to the Offer ‘‘becoming unconditional’’ will include the Offer being or becoming orbeing declared unconditional;to the Offer being or becoming or being declared ‘‘unconditional’’ will be construed asthe Offer being or becoming or being declared unconditional as to acceptances whetheror not any other condition of the Offer remains to be fulfilled;to the ‘‘acceptance condition’’ means the condition as to acceptances of the Offer set outin paragraph (a) of Part A of this Appendix I and references to the Offer becomingunconditional as to acceptances will be construed accordingly;to the ‘‘Offer Document’’ will mean this document and any other document containingdetails of the Offer.1. Acceptance Period and Acceptance Condition(a) The Offer will initially be open for acceptance until 3.00 p.m. on 13 September2000. Although no revision is envisaged, if the Offer is revised it will remain open23


for acceptance for a period of at least 14 days (or such other period as may bepermitted by the Panel) following the date on which the revised Offer is posted toStaveley Shareholders. Except with the consent of the Panel, no revision of theOffer may be made or posted to Staveley Shareholders after the date which is14 days before the date immediately prior to the Dividend Payment Date. This iscurrently expected to be 14 September 2000.(b)The Offer, whether revised or not, shall not (without the consent of the Panel) becapable of becoming unconditional after midnight on the date immediately priorto the Dividend Payment Date (this is currently expected to be 28 September2000) (or any other time and/or date beyond which GPG Acquisitions has stated(and not withdrawn such statement) that the Offer will not be extended), nor ofbeing kept open for acceptance after that time and/or date, unless it haspreviously become unconditional, provided that GPG Acquisitions reserves theright, with the permission of the Panel, to extend the time for the Offer to becomeunconditional to any later time(s) and/or date(s).Except with the consent of the Panel, GPG Acquisitions may not, for the purposeof determining whether the acceptance condition has been satisfied, take intoaccount acceptances received or purchases of Staveley Shares made after 1.00 p.m.on the date immediately prior to the Dividend Payment Date (this is currentlyexpected to be 28 September 2000) (or any other time(s) and/or date(s) beyondwhich GPG Acquisitions has stated (and not withdrawn such statement) that theOffer will not be extended) or such later time(s) and/or date(s) asGPG Acquisitions, with the permission of the Panel, may determine. If thelatest time at which the Offer may become unconditional is extended beyondmidnight on such date, acceptances received and purchases made in respect ofwhich the relevant documents are received by Computershare Services PLC after1.00 p.m. on the relevant date may (except where the Code permits) only be takeninto account with the agreement of the Panel.(c)(d)If the Offer becomes unconditional, it will remain open for acceptance for not lessthan 14 days from the date on which it would otherwise have expired (save thatthe Basic Offer will not in any event be available for acceptance beyond the dateimmediately prior to the Dividend Payment Date). If the Offer has becomeunconditional and it is stated that the Offer will remain open until further notice,then not less than 14 days’ notice in writing will be given to those StaveleyShareholders who have not accepted the Offer prior to the closing of the Offer.If a competitive situation arises (as determined by the Panel) after a ‘‘no increase’’and/or a ‘‘no extension’’ statement has been made by or on behalf ofGPG Acquisitions in relation to the Offer, GPG Acquisitions may, if it hasspecifically reserved the right to do so at the time such statement is made, orotherwise with the consent of the Panel, choose not to be bound by or withdrawsuch statement and be free to revise or extend the Offer provided it complies withthe requirements of the Code and in particular that (i) it makes an announcementto such effect as soon as possible and in any event within four business days afterthe firm announcement of the competing offer or other competitive situation andnotifies Staveley Shareholders to that effect in writing at the earliest opportunityor, in the case of Staveley Shareholders with registered addresses outside theUnited Kingdom or whom GPG Acquisitions reasonably believes to be nominees,custodians or trustees holding Staveley Shares for such persons, byannouncement in the United Kingdom at the earliest opportunity; and (ii) anyStaveley Shareholders who accepted the Offer after the date of the ‘‘no increase’’or ‘‘no extension’’ statement are given a right of withdrawal as described inparagraph 3(c) below.24


(e)(f)For the purpose of determining at any particular time whether the acceptancecondition has been fulfilled, GPG Acquisitions shall not be bound (unlessotherwise required by the Panel) to take into account any Staveley Sharesnormally carrying voting rights which have been issued or unconditionallyallotted or which arise as the result of the exercise of conversion rights beforesuch time unless Staveley has notified Computershare Services PLC, before thattime in writing, of the relevant details of such issue, allotment or conversion priorthereto at the addresses and by the methods of delivery referred to in paragraph10(b) of the letter from Deloitte & Touche Corporate Finance in this document.Notification by telex, facsimile or other electronic transmission will not besufficient.GPG Acquisitions and Deloitte & Touche Corporate Finance reserve the right totreat as valid in whole or in part acceptances of the Offer which are not entirely inorder or which are not accompanied by the relevant share certificate(s) and/orother relevant document(s) of title or not accompanied by the relevant TTEinstruction (subject to paragraphs 5(d)(i) and (ii) of this Part B).2. Announcements(a) Without prejudice to paragraph 3(a) below, by 8.00 a.m. on the next business day(the ‘‘relevant day’’) following the day on which the Offer is due to expire orbecomes or is declared unconditional or is revised or extended (or such later timeor date as the Panel may agree), GPG Acquisitions will make an appropriateannouncement and will simultaneously inform the London Stock Exchange of theposition. Such announcement will also state (unless otherwise permitted by thePanel) the total number of Staveley Shares and rights over Staveley Shares (asnearly as practicable):(i)(ii)(iii)for which acceptances of the Offer have been received (showing the extent,if any, to which such acceptances have been received from any personacting in concert or deemed to be acting in concert with GPG Acquisitionsfor the purposes of the Offer);acquired or agreed to be acquired by or on behalf of GPG Acquisitions orany person acting in concert or deemed to be acting in concert withGPG Acquisitions for the purposes of the Offer during the course of theoffer period;held by or on behalf of GPG Acquisitions or any person acting in concert ordeemed to be acting in concert with GPG Acquisitions for the purposes ofthe Offer prior to the offer period,and will specify the percentage of the Staveley Shares represented by each ofthese figures. Any decision to extend the time and/or date by which theacceptance condition has to be fulfilled may be made at any time up to, and willbe announced not later than, 8.00 a.m. on the relevant day (or such later timeand/or date as the Panel may agree) and the announcement will state the nextexpiry date (unless the Offer is unconditional, in which case the announcementmay state that the Offer will remain open until further notice). In computing thenumber of Staveley Shares represented by acceptances and/or purchases, theremay be included or excluded for announcement purposes, subject to paragraph5(d) below, acceptances and purchases not in all respects in order or notaccompanied by the relevant share certificate(s) and/or other document(s) of titleor not accompanied by the relevant TTE instruction or which are subject toverification.25


(b)In this Appendix I, references to the making of an announcement or the giving ofnotice by or on behalf of GPG Acquisitions include the release of anannouncement by Deloitte & Touche Corporate Finance or public relationsconsultants on behalf of GPG Acquisitions and the delivery by hand or telephone,telex or facsimile or other electronic transmission of an announcement to theLondon Stock Exchange. An announcement made otherwise than to the LondonStock Exchange shall be notified simultaneously (unless the Panel agreesotherwise) to the London Stock Exchange.3. Rights of Withdrawal(a) If GPG Acquisitions, having announced the Offer to be unconditional, fails tocomply by 3.30 p.m. on the relevant day (or such later time(s) and/or date(s) asthe Panel may agree) with any of the other requirements specified in paragraph2(a) above, an accepting Staveley Shareholder may (unless the Panel otherwiseagrees) immediately thereafter withdraw his acceptance of the Offer by writtennotice signed by such shareholder (or his agent duly appointed in writing andevidence of whose appointment satisfactory to GPG Acquisitions is producedwith the notice) given by post or by hand to Computershare Services PLC, at P.O.Box 859, The Pavilions, Bridgwater Road, Bristol BS99 1XZ or (during normalbusiness hours) by hand only to Computershare Services PLC at 7th Floor, JupiterHouse, Triton Court, 14 Finsbury Square, London EC2A 1BR receiving suchnotice on behalf of GPG Acquisitions. Subject to paragraph 1(b) above, this rightof withdrawal may be terminated not less than eight days after the relevant dayby GPG Acquisitions confirming, if such be the case, that the Offer is stillunconditional and complying with the other relevant requirements specified inparagraph 2(a) above. If any such confirmation is given, the first period of 14 daysreferred to in paragraph 1(c) will run from the date of that confirmation andcompliance.(b)(c)(d)(e)If by 3.00 p.m. on 4 October 2000 (or such later time and/or date as the Panel mayagree) the Offer has not become unconditional, an accepting Staveley Shareholdermay withdraw his acceptance of the Offer at any time thereafter in the mannerreferred to in paragraph 3(a) above before the earlier of (i) the time that the Offerbecomes unconditional; and (ii) the final time for lodgement of acceptances of theOffer which can be taken into account in accordance with paragraph 1(b) above.If a ‘‘no increase’’ and/or ‘‘no extension’’ statement has been withdrawn inaccordance with paragraph 1(d) above, any acceptance of the Offer after suchstatement is made may be withdrawn thereafter in the manner referred to inparagraph 3(a) above not later than the eighth day after the date on which noticeof the withdrawal of such statement is posted to Staveley Shareholders.Except as provided by this paragraph 3 (and subject to paragraph 4 below),acceptances and elections shall be irrevocable.In this paragraph, ‘‘written notice’’ (including any letter of appointment, directionor authority) means notice in writing bearing the original signature(s) of therelevant accepting Staveley Shareholder(s) or his/their agent(s) duly appointedin writing (satisfactory evidence of whose appointment must be produced withthe notice). Notification by telex or facsimile or other electronic transmission orcopies will not be sufficient to constitute written notice.4. Revised Offer(a) Although no such revision is envisaged, if the Offer (in its original or anypreviously revised form(s)) is revised (either in its terms or conditions or in thevalue or form of the consideration offered or otherwise), and any such revised26


Offer represents on the date on which such revision is announced (on such basisas Deloitte & Touche Corporate Finance may consider appropriate) animprovement (or no diminution) in the value of the consideration comparedwith that previously offered, the benefit of the revised Offer will, subject asprovided in paragraphs 4(b), 4(c) and 6 below, be made available to any StaveleyShareholder who has accepted the Offer in its original or previously revisedform(s), and not validly withdrawn such acceptance (each a ‘‘PreviousAcceptor’’). The acceptance by or on behalf of a Previous Acceptor of the Offerin its original or any previously revised form(s) shall, subject as provided inparagraphs 4(b), 4(c) and 6 below, be deemed to be an acceptance of the Offer asso revised and shall, subject as aforesaid, also constitute a separate appointmentof each of GPG Acquisitions and its directors and any partner of Deloitte &Touche Corporate Finance as his attorney and/or agent with authority to acceptany such revised Offer on behalf of such Previous Acceptor and, if such revisedOffer includes alternative forms of consideration, to make on his behalf electionsfor and/or to accept such alternative forms of consideration on his behalf in suchproportions as such attorney and/or agent in his absolute discretion thinks fitand to execute on behalf of and in the name of such Previous Acceptor all suchfurther documents (if any) and take such further actions (if any) as may berequired to give effect to such acceptances and/or elections. In making any suchacceptances or making any such elections, the attorney and/or agent shall takeinto account the nature of any previous acceptances and/or elections made by oron behalf of the Previous Acceptor and such other facts or matters as he mayreasonably consider relevant.(b)(c)(d)(e)The deemed acceptances and elections referred to in this paragraph 4 shall notapply and the authorities conferred by paragraph 4(a) above shall not beexercised if, as a result thereof, the Previous Acceptor would (on such basis asDeloitte & Touche Corporate Finance may consider appropriate) thereby receiveand/or retain (as appropriate) less consideration in aggregate under the Offer orotherwise than would have been received and/or retained (as appropriate) inaggregate consideration as a result of acceptance of the Offer in the form in whichit was originally accepted and/or elected by such Previous Acceptor or on hisbehalf (unless such Previous Acceptor has previously agreed to receive and/orretain (as appropriate) less in aggregate consideration).The deemed acceptances and elections referred to in this paragraph 4 shall notapply and the authorities conferred by this paragraph 4 shall be ineffective to theextent that a Previous Acceptor shall lodge with Computershare Services PLC ateither of the addresses set out in paragraph 3(a) above within 14 days of theposting of the document pursuant to which the revision of the Offer is madeavailable to Staveley Shareholders (or such later date as GPG Acquisitions maydetermine), a Form of Acceptance or some other form issued by or on behalf ofGPG Acquisitions in which he validly elects to receive the considerationreceivable by him under such revised Offer in some other manner.The authorities conferred by this paragraph 4 and any acceptance of a revisedOffer and/or any alternative pursuant thereto shall be irrevocable unless anduntil the Previous Acceptor becomes entitled to withdraw his acceptance underparagraph 3 above and duly does so.Subject to paragraph 6 below, GPG Acquisitions reserves the right to treat anexecuted Form of Acceptance relating to the Offer (in its original or anypreviously revised form(s)) which is received (or dated) on or after theannouncement or issue of the Offer in any revised form as a valid acceptanceof the revised Offer and, where applicable, a valid election for any alternative27


form of consideration made available pursuant thereto, and such acceptance shallconstitute an authority in the terms of paragraph 4(a) above on behalf of therelevant Staveley Shareholder.5. General(a) Save with the consent of the Panel and GPG Acquisitions, the Offer will lapseunless all conditions relating to the Offer have been satisfied or (if capable ofwaiver) waived or, where appropriate, have been determined byGPG Acquisitions in its reasonable opinion to be or remain satisfied, by theearlier of the date immediately prior to the Dividend Payment Date andwhichever is the later of 4 October 2000 and the 21st day after the date on whichcondition (a) is satisfied (or, in each case, such later date as GPG Acquisitionsmay, with the consent of the Panel, decide). If the Offer lapses for any reason, theOffer will cease to be capable of further acceptance and Staveley Shareholdersand GPG Acquisitions will cease to be bound by prior acceptances.GPG Acquisitions shall be under no obligation to waive or treat as satisfiedany of the conditions (b) to (i) (inclusive) in Part A of this Appendix I by a dateearlier than the latest date specified or referred to above for the satisfactionthereof notwithstanding that such condition or the other conditions of the Offermay at such earlier date have been waived or satisfied and that there are at suchearlier date no circumstances indicating that any of such conditions may not becapable of being satisfied.(b)(c)(d)Notwithstanding paragraph (c) below, GPG Acquisitions shall be entitled to setoff against the consideration due to any Staveley Shareholder an amount equal tothe Special Interim Dividend paid to him in respect of each Staveley Share forwhich he has validly accepted the Basic Offer.Subject to paragraph (b) above, save with the consent of the Panel, settlement ofthe consideration to which any Staveley Shareholder is entitled under the Offerwill be implemented in full in accordance with the terms of the Offer withoutregard to any lien, right of set-off, counterclaim or other analogous right to whichGPG Acquisitions may otherwise be, or claim to be, entitled as against suchStaveley Shareholder and will be effected in the manner described in paragraph11 of the letter from Deloitte & Touche Corporate Finance contained in thisdocument.Notwithstanding the right reserved by GPG Acquisitions and Deloitte & ToucheCorporate Finance to treat a Form of Acceptance as valid even though not entirelyin order or not accompanied by the relevant share certificate(s) and/or otherdocument(s) of title, or not accompanied by the relevant transfer to escrow,except as otherwise agreed with the Panel:(i)(ii)(iii)an acceptance of the Offer will only be counted towards fulfilling theacceptance condition if the requirements of Note 4 and, if applicable, Note6 on Rule 10 of the Code are satisfied in respect of it;a purchase of Staveley Shares by GPG Acquisitions or its nominee(s) or, ifGPG Acquisitions is required to make a Rule 9 offer, a person acting inconcert with GPG Acquisitions, if any, will only be counted towardsfulfilling the acceptance condition if the requirements of Note 5 and, ifapplicable, Note 6 of Rule 10 of the Code are satisfied in respect of it; andthe Offer will not become unconditional unless Computershare ServicesPLC has issued a certificate to GPG Acquisitions or Deloitte & ToucheCorporate Finance which states the number of Staveley Shares in respect of28


which acceptances have been received which comply with paragraph (i)above, and the number of Staveley Shares otherwise acquired, whetherbefore or during the offer period, which comply with the requirements ofparagraph (ii) above. Copies of such certificate will be sent to the Panel andto Staveley’s financial adviser as soon as possible after issue.(e)(f)(g)(h)The terms, provisions, instructions and authorities contained in or deemed to beincorporated in the Form of Acceptance will also constitute part of the terms ofthe Offer. Words and expressions defined in this document have the samemeanings when used in the Form of Acceptance unless the context otherwiserequires. The provisions of this Appendix I shall be deemed to be incorporated inthe Form of Acceptance.The Offer and the Form of Acceptance and all acceptances and elections inrespect of the Offer, or pursuant thereto, and all contracts made pursuant theretoand any action taken or made or deemed to be taken or made under any of theforegoing shall be governed by and construed in accordance with English law.Execution by or on behalf of a Staveley Shareholder of a Form of Acceptanceconstitutes his irrevocable submission in relation to all matters arising out of or inconnection with the Offer and the Form of Acceptance to the jurisdiction of thecourts of England and his agreement that nothing shall limit the right ofGPG Acquisitions to bring any action, suit or proceeding arising out of or inconnection with the Offer or the Form of Acceptance in any other mannerpermitted by law or in any court of competent jurisdiction.All references in this document and in the Form of Acceptance to 13 September2000 shall (except in the definition of ‘‘offer period’’ and in paragraph 1(a) aboveand where the context otherwise requires) be deemed, if the expiry date of theOffer is extended, to refer to the expiry date of the Offer as so extended.Any omission or failure to dispatch this document, the Form of Acceptance orany notice required to be dispatched under the terms of the Offer to, or anyfailure to receive the same by, any person to whom the Offer is made, or shouldbe made, shall not invalidate the Offer in any way or create any implication thatthe Offer has not been made to any such person. Subject to paragraph 6 below,the Offer extends to persons to whom the Offer is made or should be made but towhom this document, the Form of Acceptance or any related offering documentsmay not be dispatched or by whom such documents may not be received, andsuch persons may collect copies of these documents from ComputershareServices PLC at either of the addresses set out in paragraph 3(a) above.(i) Notwithstanding any other provision in this Part B of Appendix I,GPG Acquisitions and Deloitte & Touche Corporate Finance reserve the rightto treat acceptances of the Offer and/or elections pursuant thereto as valid ifreceived by or on behalf of either of them at any place or places or in any mannerdetermined by either of them otherwise than as set out in this document or in theForm of Acceptance.(j)All powers of attorney, appointments of agents and authorities in the termsconferred by or referred to in this Appendix I or in the Form of Acceptance aregiven by way of security for the performance of the obligations of the StaveleyShareholder concerned and are irrevocable in accordance with section 4 of thePowers of Attorney Act 1971 unless and until the donor of such power of attorneyor authority or appointment validly withdraws his acceptance in accordance withparagraph 3 above.29


(k)(l)(m)(n)(o)(p)(q)(r)No acknowledgement of receipt of any Form of Acceptance, transfer by means ofCREST, share certificate(s) and/or other document(s) of title will be given. Allcommunications, notices, certificates, documents of title and remittances to bedelivered by or sent to or from Staveley Shareholders (or their designatedagent(s)) will be delivered by or sent to or from such Staveley Shareholders (ortheir designated agent(s)) at their own risk.If the Offer lapses, the Form of Acceptance, share certificate(s) and/or otherdocument(s) of title will be returned by post (or such other method as may beapproved by the Panel) within 14 days of the Offer lapsing, at the risk of theperson entitled thereto, to the person or agent whose name and address is set outin the relevant box in the Form of Acceptance or, if none is set out, to the firstnamedor sole holder at his registered address. Computershare Services PLC will,immediately after the lapsing of the Offer (or within such longer period as thePanel may permit, not exceeding 14 days after the lapsing of the Offer), giveinstructions to CRESTCo to transfer all Staveley Shares held in escrow balancesand in relation to which it is the Escrow Agent for the purposes of the Offer to theoriginal available balances of the Staveley Shareholders concerned.In relation to any acceptance of the Offer in respect of a holding of StaveleyShares which is in uncertificated form, GPG Acquisitions reserves the right tomake such alterations, additions or modifications as may be necessary ordesirable to give effect to any purported acceptance of the Offer, whether in orderto comply with the facilities or requirements of CREST or otherwise, providedsuch alterations, additions or modifications are consistent with the requirementsof the Code or are otherwise made with the consent of the Panel.The Offer is made at 3.00 p.m. on 23 August 2000 and is capable of acceptancefrom and after that date. The Offer is being made by means of this document.Copies of this document, the Form of Acceptance and any related documentsmay be collected from Computershare Services PLC at either of the addresses setout in paragraph 3(a) above.If sufficient Staveley Shares are acquired, whether pursuant to acceptances of theOffer or otherwise, GPG Acquisitions intends to apply the provisions of sections428-430F of the Act to acquire compulsorily any outstanding Staveley Shares towhich the Offer relates.All references in this Appendix I to any statute or statutory provision shallinclude a statute or statutory provision which amends, consolidates or replacesthe same (whether before or after the date hereof).The Offer extends to all the Staveley Shares unconditionally allotted or issued on23 August 2000 and any further Staveley Shares unconditionally allotted orissued while the Offer remains open for acceptance (or such earlier date or datesas GPG Acquisitions may decide).The Staveley Shares are to be acquired by GPG Acquisitions fully paid and freefrom all liens, charges and encumbrances, rights of pre-emption and any otherthird party rights of any nature, whatsoever and (save as set out in paragraph 2(c)of Part A of this Appendix I) together with all rights attaching thereto includingthe right to all dividends or other distributions declared paid or made on or after23 August 2000.6. Overseas Shareholders(a) The making of the Offer in, or to Staveley Shareholders resident in, or citizens ornationals of, jurisdictions outside the United Kingdom, or to persons who are30


custodians, nominees of or trustees for, citizens, residents or nationals of suchjurisdictions, may be prohibited or affected by the laws of the relevant overseasjurisdiction. Such persons should inform themselves about and observe anyapplicable legal requirements. It is the responsibility of any such person wishingto accept the Offer to satisfy himself as to the full observance of the laws of therelevant jurisdiction in connection therewith, including the obtaining of anygovernmental, exchange control or other consents, which may be required or thecompliance with other necessary formalities and the payment of any issue,transfer or other taxes due in such jurisdiction. Any such person will beresponsible for any such issue, transfer or other taxes or other requisite paymentsby whomsoever payable and GPG Acquisitions and Deloitte & Touche CorporateFinance and any person acting on their behalf shall be fully indemnified and heldharmless by such person for any such issue, transfer or other taxes asGPG Acquisitions and Deloitte & Touche Corporate Finance may be requiredto pay.(b)GPG Acquisitions reserves the right to notify any matter, including the fact thatthe Offer has been made, to all or any Staveley Shareholders:(i)(ii)with a registered address outside the United Kingdom; orwhom GPG Acquisitions knows to be a custodian, trustee or nomineeholding Staveley Shares for persons who are citizens, residents or nationalsof jurisdictions outside the United Kingdom,by announcement or by paid advertisement in a daily national newspaperpublished and circulated in the United Kingdom (in which event such noticeshall be deemed to have been sufficiently given, notwithstanding any failure byany such Staveley Shareholder to receive or see such notice) and all references inthis document to notice or the provision of information in writing by or on behalfof GPG Acquisitions shall be construed accordingly.(c)The provisions of this paragraph 6 override any terms of the Offer inconsistentwith them. The provisions of this paragraph 6 and/or any other terms of theOffer relating to overseas Staveley Shareholders may be waived, varied ormodified as regards specific Staveley Shareholder(s) or on a general basis byGPG Acquisitions in its absolute direction. References in this paragraph 6 to aStaveley Shareholder shall include the person or persons executing a Form ofAcceptance and, in the event of more than one person executing a Form ofAcceptance, the provisions of this paragraph shall apply to them jointly and toeach of them.Overseas shareholders should inform themselves about and observe any applicable legalor regulatory requirements. If you are in any doubt about your position you should consultyour professional adviser in the relevant territory.Part C: Form of AcceptanceEach Staveley Shareholder by whom, or on whose behalf, a Form of Acceptance is executedirrevocably undertakes, represents, warrants and agrees to and with GPG Acquisitions,Deloitte & Touche Corporate Finance and Computershare Services PLC (so as to bind him, hispersonal representatives, heirs, successors and assigns) to the following effect:(a)that the execution of the Form of Acceptance, whether or not any other boxes arecompleted shall constitute:31


(i)(ii)(iii)(iv)(v)an acceptance of the Offer in respect of the relevant Staveley Shareholder’s entireholding of Staveley Shares (or such lesser number as may have been inserted inBox 1 of the Form of Acceptance);an acceptance of the Basic Offer in respect of the number of Staveley Shares asmay have been inserted in Box 1 of the Form of Acceptance less such number ofStaveley Shares as may be inserted in Box 2 of the Form of Acceptance;(if no number is inserted in Box 1, or a number is inserted in Box 1 which exceedsthe relevant Staveley Shareholder’s holding of Staveley Shares) an acceptance ofthe Basic Offer in respect of the Staveley Shareholder’s entire holding of StaveleyShares or, if a number is inserted in Box 2, all of the balance of such holding(provided that if the Basic Offer is no longer open for acceptance or if the relevantStaveley Shareholder is not on the Staveley Register on the Record Date, anacceptance of the Alternative will be deemed to have been made in respect of allof such Shares or of such lesser number as may be inserted in Box 2);an election for the Alternative in respect of the number of Staveley Sharesinserted in Box 2 of the Form of Acceptance;an undertaking to execute any further documents, take any further action andgive any further assurances which may be required to enable GPG Acquisitionsto obtain the full benefit of the terms of this Appendix I and/or to perfect any ofthe authorities expressed to be given hereunder or otherwise in connection withsuch Staveley Shareholder’s acceptance of the Offer; andin each case on and subject to the terms and conditions set out or referred to in thisdocument and the Form of Acceptance and, subject only to the rights of withdrawal setout in paragraph 3 of Part B of this Appendix I, each such acceptance and Alternativeshall be irrevocable;(b)(c)that the Staveley Shares in respect of which the Offer is accepted or deemed to beaccepted are sold free from all liens, charges, equitable interests, encumbrances, rightsof pre-emption and any other third party rights and interests of any nature whatsoeverand (save as set out in paragraph 2(c) of Part A of this Appendix I) together with allrights attaching thereto on or after 23 August 2000 including, without limitation, votingrights and the right to receive and retain all dividends or other distributions declared,paid or made on or after 23 August 2000;that the execution of the Form of Acceptance and its delivery to ComputershareServices PLC constitutes, subject to the Offer becoming unconditional in all respects inaccordance with its terms, the irrevocable separate appointment of each ofGPG Acquisitions, and its respective directors, authorised representatives and agentsand the partners of Deloitte & Touche Corporate Finance as such Staveley Shareholder’sattorney and/or agent (the ‘‘attorney’’), and an irrevocable instruction to the attorney (inaccordance with section 4 of the Powers of Attorney Act 1971) to complete and executeall or any form(s) of transfer and/or other document(s) at the discretion of the attorneyin relation to the Staveley Shares referred to in paragraph (a)(i) above, in respect ofwhich the accepting Staveley Shareholder has not validly withdrawn the acceptance, infavour of GPG Acquisitions or such other person or persons as GPG Acquisitions or itsagents may direct and to deliver such form(s) of transfer and/or other document(s) atthe discretion of the attorney together with any share certificate(s) and/or otherdocument(s) of title relating to such Staveley Shares for registration within six monthsof the Offer becoming unconditional in all respects and to do all such other acts andthings as may in the opinion of the attorney be necessary or expedient for the purposesof, or in connection with, the acceptance of the Offer and to vest in GPG Acquisitions orits nominee(s) the Staveley Shares as aforesaid;32


(d)(e)that the execution of the Form of Acceptance and its delivery to ComputershareServices PLC constitutes the irrevocable appointment of Computershare Services PLCas such Staveley Shareholder’s attorney and/or agent (the ‘‘attorney’’) and with anirrevocable instruction and authority to the attorney (i) subject to the Offer becomingunconditional in all respects in accordance with its terms and to an accepting StaveleyShareholder not having validly withdrawn the acceptance, to transfer to itself (or tosuch other person or persons as GPG Acquisitions or its agents may direct) by means ofCREST all or any of the Relevant Staveley Shares (as defined below) (but not exceedingthe aggregate number of Staveley Shares in respect of which the Offer is accepted ordeemed to be accepted and in respect of which acceptance has not been validlywithdrawn) and (ii), if the Offer does not become unconditional in all respects, to giveinstructions to CRESTCo, immediately after the lapsing of the Offer (or within suchlonger period as the Panel may permit, not exceeding 14 days from the lapsing of theOffer), to transfer all Relevant Staveley Shares to the original available balance of anaccepting Staveley Shareholder, and for the purposes of this paragraph (d) ‘‘RelevantStaveley Shares’’ means Staveley Shares in uncertificated form and in respect of which atransfer or transfers to escrow has or have been effected pursuant to the proceduresdescribed in paragraph 10(d) of the letter from Deloitte & Touche Corporate Financecontained in this document and where the transfer(s) to escrow was or were made inrespect of Staveley Shares, held under the same member account ID and participant IDas the member account ID and participant ID relating to the Form of Acceptanceconcerned (but irrespective of whether or not any Form of Acceptance referencenumber, or a Form of Acceptance reference number corresponding to that appearing onthe Form of Acceptance concerned, was included in the TTE instruction concerned);that the execution of the Form of Acceptance and delivery to Computershare ServicesPLC constitutes, subject to the Offer becoming unconditional in all respects inaccordance with its terms and to the accepting Staveley Shareholder not having validlywithdrawn the acceptance, a separate and irrevocable authority and request:(i)(ii)(iii)to Staveley or its agents to procure the registration of the transfer of the StaveleyShares referred to in paragraph (a)(i) above in certificated form pursuant to theOffer and the delivery of the share certificate(s) and/or any document(s) of titlein respect thereof to GPG Acquisitions or as it may direct;if the Staveley Shares concerned are in certificated form (subject to the provisionsof paragraph 6 of Part B of this Appendix I), to GPG Acquisitions, or its respectiveagents, to procure the dispatch by post (or such other method as may beapproved by the Panel) of a cheque in respect of any cash consideration to whichsuch Staveley Shareholder is entitled, at the risk of such Staveley Shareholder, tothe person or agent whose name and address is set out in Box 6 of the Form ofAcceptance or, if none is set out, to the first-named or sole holder at his registeredaddress;if the Staveley Shares concerned are in uncertificated form, to GPG Acquisitionsor its respective agents (subject to the provisions of paragraph 6 of Part B of thisAppendix I) to procure the creation of an assured payment obligation in favour ofthe Staveley Shareholder’s payment bank in accordance with the CREST assuredpayment arrangements in respect of any cash consideration provided thatGPG Acquisitions may (if, for any reason, it wishes to do so) determine that all orany part of any such cash consideration shall be paid by cheque dispatched bypost to which such Staveley Shareholder is entitled provided that paragraph (ii)above shall apply to the dispatch of any consideration by post pursuant to thisparagraph (iii); and33


(iv)to GPG Acquisitions or its respective agents to execute such documents and dosuch things to procure the satisfaction of any obligation owed by such StaveleyShareholder in relation to passing on tax credit information in respect of theSpecial Interim Dividend.(f)(g)that the execution of the Form of Acceptance and its delivery to ComputershareServices PLC constitutes a separate authority to each of GPG Acquisitions and itsrespective directors and the partners of Deloitte & Touche Corporate Finance in theterms of paragraph 4 of Part B of this Appendix I;that, subject to the Offer becoming unconditional in all respects in accordance with itsterms (or, in the case of voting by proxy, if the Offer will become unconditional in allrespects or lapse depending upon the outcome of the resolution in question or in suchother circumstances as GPG Acquisitions may request and the Panel may permit), inrespect of the Staveley Shares in respect of which the Offer has been accepted, or isdeemed to be accepted, which acceptance has not been validly withdrawn, and whichhave not been registered in the name of GPG Acquisitions or as it may direct:(i)(ii)GPG Acquisitions or its agents shall be entitled to direct the exercise of any votesand any or all other rights and privileges (including the right to requisition theconvening of a general meeting or separate class meeting of Staveley) attaching toany such Staveley Shares;the execution of a Form of Acceptance by a Staveley Shareholder shall constitutewith regard to such Staveley Shares:-(A)(B)(C)an authority to Staveley or its agents from such Staveley Shareholders tosend any notice, circular, warrant or other document or communicationwhich may be required to be sent to him as a member of Staveley(including any share certificate(s) or other document(s) of title issued as aresult of conversion of such Staveley Shares into certificated form) toGPG Acquisitions at its registered office;an authority to GPG Acquisitions, its agents and the partners of Deloitte &Touche Corporate Finance to sign any consent to short notice of a generalmeeting or separate class meeting on his behalf and/or to execute a form ofproxy in respect of such Staveley Shares appointing any person nominatedby GPG Acquisitions to attend general meetings and separate classmeetings of Staveley or its members or any of them (and anyadjournment thereof) and to exercise the votes attaching to such StaveleyShares on his behalf, such votes (where relevant) to be cast so far aspossible to satisfy any outstanding condition of the Offer; andthe agreement of such Staveley Shareholder not to exercise any of suchrights without the consent of GPG Acquisitions and the irrevocableundertaking of such Staveley Shareholder not to appoint a proxy for or toattend any such general meeting or separate class meeting;(h)that he will deliver to Computershare Services PLC, at either of the addresses set out inparagraph 10(b) of the letter from Deloitte & Touche Corporate Finance contained inthis document, his share certificate(s) and/or other document(s) of title in respect of theStaveley Shares in certificated form referred to in paragraph (a)(i) of this Part C and inrelation to which acceptance has not been validly withdrawn, or an indemnityacceptable to GPG Acquisitions in lieu thereof, as soon as possible and in any eventwithin six months of the Offer becoming unconditional in all respects;34


(i)(j)(k)(l)(m)(n)(o)(p)(q)(r)that he will take (or procure to be taken) the action set out in paragraph 10(d) of theletter from Deloitte & Touche Corporate Finance contained in this document to transferall Staveley Shares in respect of which the Offer has been accepted or is deemed to havebeen accepted and not validly withdrawn held by him in uncertificated form to anescrow balance as soon as possible and in any event so that the transfer to escrow settleswithin six months of the Offer becoming unconditional in all respects;that if, for any reason, any Staveley Shares in respect of which a transfer to escrowbalance has been effected in accordance with paragraph 10(d) of the letter from Deloitte& Touche Corporate Finance contained in this document are converted to certificatedform, he will (without prejudice to paragraph (g)(ii)(A) above) immediately deliver orprocure the immediate delivery of the share certificate(s) or other document(s) of title inrespect of all such Staveley Shares as so converted to Computershare Services PLC ateither of the addresses referred to in paragraph 10(b) of the letter from Deloitte &Touche Corporate Finance contained in this document or to GPG Acquisitions at itsregistered office or as GPG Acquisitions or its agents may direct;that the creation of an assured payment obligation in favour of his payment bank inaccordance with the CREST assured payments arrangements as referred to inparagraph (e)(iii) above shall, to the extent of the obligation so created, discharge infull any obligation of GPG Acquisitions to pay him the cash consideration to which he isentitled pursuant to the Offer;that, if he accepts the Offer, he will do all such acts and things as shall, in the opinion ofGPG Acquisitions or Computershare Services PLC, be necessary or expedient to vest inGPG Acquisitions or its nominee(s) or such other person as GPG Acquisitions maydecide title to the number of Staveley Shares inserted or deemed to be inserted in Box 1of the Form of Acceptance and all such acts and things as may be necessary orexpedient to enable Computershare Services PLC to perform its functions as EscrowAgent for the purposes of the Offer;that the terms and conditions of the Offer contained in this document shall beincorporated in and form part of the Form of Acceptance, which shall be read andconstrued accordingly;that he agrees to ratify each and every act or thing which may be done or effected byGPG Acquisitions or any of their respective directors or agents or Staveley or its agentsor the partners of Deloitte & Touche Corporate Finance, as the case may be, in theproper exercise of any of the powers and/or authorities hereunder;that he will do all such acts and things as shall be necessary or expedient to vest inGPG Acquisitions (or its nominees or such other person as it may decide) the StaveleyShares to which such acceptance relates;that on execution and delivery, any Form of Acceptance shall take effect as a deed;that if any provision of Part B or Part C of this Appendix I shall be unenforceable orinvalid or shall not operate so as to afford GPG Acquisitions or Computershare ServicesPLC or any authorised representative of any of them or their respective agents or any ofthe partners of Deloitte & Touche Corporate Finance the benefit or authority expressedto be given therein, he shall with all practicable speed do all such acts and things andexecute all such documents as may be required to enable those persons to secure the fullbenefits of Part B or Part C of this Appendix I; andthat he submits, in relation to all matters arising out of the Offer and the Form ofAcceptance, to the jurisdiction of the English courts.35


References in this Part C to a Staveley Shareholder shall include references to the person orpersons executing a Form of Acceptance and in the event of more than one person executing aForm of Acceptance, the provisions of this Part C shall apply to them jointly and to each ofthem.36


Appendix IIFinancial Information on the GPG GroupA. Nature of Financial InformationThe financial information in this Appendix II relating to the GPG Group is extractedwithout material adjustment from the audited consolidated accounts of GPG Group forthe two years ended 31 December 1999.The financial information in this Appendix II does not constitute statutory accountswithin the meaning of section 240 of the Act. Statutory accounts for the GPG Group inrespect of the two years ended 31 December 1999, on which unqualified audit reportshave been given by PricewaterhouseCoopers, have been delivered to the Registrar ofCompanies.B. Consolidated profit and loss accounts of GPGThe summarised consolidated profit and loss accounts of GPG for each of the two yearsended 31 December 1999 are set out below:1998 1999£‘000 £‘000as restatedTurnover 176,025 103,774Operating profitContinuing operations 13,884 12,177Discontinued operations 14,436 11,048Group operating profit 28,320 23,225Income from interests in associated undertakings and jointventures 1,618 2,550Profit on disposal of businesses — 95,498Profit on ordinary activities before interest 29,938 121,273Interest payable and similar charges (528) (619)Profit on ordinary activities before taxation 29,410 120,654Tax on profit on ordinary activities (2,810) (5,462)Profit on ordinary activities after taxation 26,600 115,192Equity minority interests (6,526) (3,246)Profit for the year attributable to GPG shareholders 20,074 111,946Equity dividends proposed/payable (2,515) (4,695)Profit retained for the year 17,559 107,251Earnings per ordinary share (pence) – basic 4.48p 23.99pEarnings per ordinary share (pence) – diluted 4.41p 23.66pDividends per ordinary share (pence) 0.545p 1.00p37


CConsolidated balance sheets of GPGThe consolidated assets and liabilities of GPG as at 31 December 1999 are set out below:1999£‘000Fixed assetsTangible assets 1,665Investments 181,408183,073Current assetsDebtors 11,501Development work in progress 3,053Investments 36,747Cash at bank and in hand 85,044136,345Creditors: amounts falling due within one yearTrade and other creditors (26,292)Borrowings (2,632)Net current assets 107,421Creditors: amounts falling due after one yearTrade and other creditors (83)Borrowings (451)(534)Provisions for liabilities and charges (2,539)Net assets 287,421Capital and reservesShare capital 46,953Share premium account 21,635Profit and loss account 215,321Equity shareholders’ funds 283,909Minority interests (equity) 3,512Net assets 287,42138


Appendix IIIFinancial Information on the Staveley GroupANature of the Financial InformationThe financial information contained in this Appendix III relating to the Staveley Groupis extracted without material adjustment from the audited consolidated accounts ofStaveley for the three periods ended 1 April 2000.The financial information contained in this Appendix III does not constitute statutoryaccounts within the meaning of section 240 of the Act. Statutory accounts for the threeperiods ended 1 April 2000, on which unqualified audit reports have been given byPricewaterhouseCoopers, have been delivered to the Registrar of Companies.In the period ended 28 March 1998, the operating profit for continuing operationsincludes a contribution of £12.6 million in respect of British Salt. British Salt’scontribution in the periods ended 3 April 1999 and 1 April 2000 is included indiscontinued operations.39


BConsolidated profit and loss accounts of StaveleyThe consolidated profit and loss accounts of Staveley for each of the three periodsended 1 April 2000 extracted from the published audited consolidated profit and lossaccounts for those periods are set out below:Note 2000 1999 1998£m £m £mTurnoverContinuing operations 252.6 262.5 287.7Discontinued operations 29.3 32.5 106.1Total turnover 1 281.9 295.0 393.8Operating profit/(loss)Continuing operations before exceptional items 0.2 (3.9) 13.4Exceptional items (6.0) (8.4) (2.0)Continuing operations (5.8) (12.3) 11.4Discontinued operations before exceptionalitems 9.6 11.1 (0.9)Exceptional items — (0.3) (1.3)Discontinued operations 9.6 10.8 (2.2)Total operating profit/(loss) 1 3.8 (1.5) 9.2Loss on sale or termination of discontinuedoperations — (2.1) (79.6)Profit on disposal of fixed assets of continuingoperations 0.5 — —(Loss)/profit on ordinary activities beforeinterest 4.3 (3.6) (70.4)Net interest charge 3 (1.9) (2.6) (3.7)(Loss)/profit on ordinary activities beforetaxation 2.4 (6.2) (74.1)Tax on (loss)/profit on ordinary activities 4 (1.8) (2.2) (0.8)(Loss)/profit on ordinary activities after taxation 5 0.6 (8.4) (74.9)Dividends 6 — (2.9) (10.5)Retained (deficit)/profit 16 0.6 (11.3) (85.4)(Loss)/earnings per ordinary share 7Basic 0.6p (7.2)p (64.4)pDiluted 0.6p (7.2)p (64.2)pDividends per share 6 0.0p 2.5p 9.0p40


C. Balance Sheet of StaveleyThe balance sheets of Staveley as at 3 April 1999 and 1 April 2000 are set out below:Note 2000 1999£m £mFixed assetsTangible assets 8 64.6 67.9Investments 9 — 5.064.6 72.9Current assetsStocks 10 7.1 8.4Debtors 11 64.8 69.8Cash at bank 24.0 33.395.9 111.5Creditors: amounts falling due within one yearBorrowings 12 (24.9) (24.9)Other 13 (77.4) (71.3)(102.3) (96.2)Net current assets/(liabilities) (6.4) 15.3Total assets less current liabilities 58.2 88.2Creditors: amounts falling due after one yearBorrowings 12 — (28.5)Provisions for liabilities and charges 14 (4.5) (7.8)Net assets 53.7 51.9Capital and reservesCalled up share capital 15 29.1 29.1Share premium account 16 4.4 4.4Revaluation reserve 16 28.6 29.5Other reserves 16 1.0 1.0Profit and loss account 16 (9.4) (12.1)Equity shareholders’ funds 53.7 51.941


D. Consolidated Cash Flow Statements Of StaveleyThe consolidated cash flow statements of Staveley for the 53 weeks ended 3 April 1999and the 52 weeks ended 1 April 2000 are set out below:Note 1999£m2000£mCash inflow from operating activities 18 17.3 21.4Returns on investments and servicing of finance 19 (3.5) (2.0)Taxation (3.5) 0.9Capital expenditure 19 (6.5) (1.1)Acquisitions and disposals 19 34.6 —Equity dividends paid (10.4) —Cash inflow before use of liquid resources and financing 28.0 19.2Management of liquid resources 19 2.0 (13.5)Financing: 19Redemption of shares (0.9) —Decrease in debt (17.1) (28.5)Increase/(decrease) in cash 12.0 (22.8)Reconciliation of net cash flow to movement in net debt 20Increase/(decrease) in cash 12.0 (22.8)Cash outflow from decrease in debt 17.1 28.5Cash (inflow)/outflow from (decrease)/increase in liquidresources (2.0) 13.5Change in net debt resulting from cash flows 27.1 19.2Currency translation differences (1.2) —Movement in net debt in the period 25.9 19.2Opening net debt (46.0) (20.1)Closing net debt (20.1) (0.9)42


E. Notes to the Accounts of StaveleyAccounting PoliciesThe following is a summary of the principal accounting policies adopted in thepreparation of these financial statements which have been consistently applied:Basis of ConsolidationThe financial statements are prepared in accordance with the historical cost conventionmodified by the revaluation of certain assets. They comply with accounting standardsapplicable in the UK and, where relevant, they reflect Financial Reporting Standardsissued since the last period end.The consolidated financial statements combine the financial statements of the parentand its subsidiary companies which are made up to the same date. The results ofsubsidiaries sold or acquired are consolidated up to, or from, the date control passes. Inthe case of acquisitions, any difference in the price paid for new interests over the fairvalue of the net tangible assets at that date is capitalised as goodwill which isdepreciated over a maximum of twenty years. Prior to the 1999 financial statements,goodwill arising on acquisitions was transferred to reserves but this policy was changedfollowing the issue of accounting standard FRS 10 ‘Goodwill and intangible assets’.TurnoverTurnover, which excludes value added tax and sales between group companies,represents the amounts receivable by the group in respect of goods supplied andservices rendered.Research and DevelopmentExpenditure on research and development is written off when incurred, except for thecost of developing major new product lines which may be deferred to the periodswhich will benefit from the sales of those products.DepreciationDepreciation is calculated to write off the costs or valuation of fixed assets on a straightline basis over the expected useful lives of the assets concerned. For this purpose theprincipal lives adopted are as follows:Freehold buildings50 yearsLeasehold buildings 50 years maximum or over the term of the lease if shorterGeneral manufacturing plant 15 years maximumProcess plant50 years maximumThe group undertakes a review for impairment of a fixed asset or goodwill if events orchanges in circumstances indicate that the carrying amount of the fixed asset orgoodwill may not be recoverable. To the extent that the carrying amount exceeds therecoverable amount, that is the higher of net realisable value and value in use, the fixedasset or goodwill is written down to its recoverable amount.Mineral ReservesMineral reserves are carried in the balance sheet at valuation. No charge is made to theprofit and loss account in respect of annual diminution as the expected future life ofthese reserves would make such a charge immaterial.Earnings per shareFRS 14 ‘Earnings per share’ has been adopted and consequently basic and dilutedearnings per share have been calculated in accordance with new methodology. Basicand diluted earnings per share for 1998 have been recalculated on the new basis.43


ProvisionsProvision is made on the basis of the present value of future cash flows wheneverunavoidable losses are expected to arise from obligations which exist at the balancesheet date. These obligations take the form of leases of properties which are no longeroccupied either by the group or by sub-tenants.Leased AssetsAssets acquired under finance leases, which transfer to the lessee substantially allbenefits and risks of ownership, and the capital element of the related rental obligations,are included in the balance sheet. The interest element of rental obligations is chargedagainst profit in proportion to the reducing capital element outstanding. Rentals inrespect of operating leases are written off to the profit and loss account on a straight linebasis over the period of the lease.Stocks, Work in Progress and Long-Term ContractsStocks and work in progress are stated at the lower of cost and net realisable value. Ingeneral, cost is determined on a first in first out basis and includes transport andhandling costs. In the case of manufactured products, cost includes all directexpenditure and production overheads based on the normal level of activity. Netrealisable value is the price at which the stocks can be realised in the normal course ofbusiness after allowing for the costs of realisation and, where appropriate, the cost ofconversion from their existing state to a finished condition. Provision is made forobsolete, slow moving and defective stocks.Long-term contracts are generally those exceeding a year in duration and are valued atcost, comprising direct expenditure and the relevant production overheads, plus theprofit attributable to the work performed to date. The amounts recoverable from suchcontracts, being the excess of their valuation over payments received and receivable areincluded in debtors. Provision is made for all losses expected to arise on completion ofthe contracts entered into at the balance sheet date, whether or not work on these hascommenced.Deferred TaxProvision is made for deferred tax using the liability method but not where, in theopinion of the directors, the potential tax liability is remote.Foreign Currency TranslationSales and results of overseas subsidiary companies and all foreign currency assets andliabilities are translated into sterling at the rates of exchange ruling at the balance sheetdate. Translation differences on the opening net assets of these companies are takendirectly to reserves and set off against differences arising on borrowings hedging thisexposure. This hedging policy has since the year end been discontinued.Pension CostsThe pension schemes of the group are classified as either defined-benefit ordefined-contribution schemes. In the former case, the cost to the group is, withactuarial advice, spread over the employees’ service lives. In the latter case, the chargefor pension costs is equal to the contributions payable to the schemes.Financial InstrumentsThe group’s only significant financial instruments are borrowings and liquid resources.The accounting treatment of financial instruments is explained in note 21.44


Notes to the accounts for the period ended 1 April 20001. Turnover, Profit and Net Assets2000£m1999£mTurnover by market supplied:United Kingdom 221.4 229.2USA 52.2 53.6Europe 3.3 7.9Rest of world 5.0 4.3281.9 295.0Continuing2000£mDiscontinued2000£mTotal2000£mContinuing1999£mDiscontinued1999£mAnalysis of operating costs:Cost of sales 199.4 11.5 210.9 215.1 12.1 227.2Distribution costs — 3.1 3.1 — 3.3 3.3Administrative expenses 53.5 5.1 58.6 51.8 6.0 57.8Other operating income (0.5) — (0.5) (0.5) — (0.5)Total 252.4 19.7 272.1 266.4 21.4 287.8Total1999£mTurnover2000£mOperatingprofit/(loss)2000£mNet assets2000£mTurnover1999£mOperatingprofit/(loss)1999£mNet assets1999£mSegmental analysis of results excluding exceptional items:Testing services 58.0 0.8 21.6 59.1 4.0 20.0Facilities services 54.5 (1.7) 4.0 65.5 (6.0) 7.4Contracting 140.1 2.8 (18.6) 137.9 (2.6) (8.3)Central — (1.7) (3.6) — 0.7 1.4Continuing operations 252.6 0.2 3.4 262.5 (3.9) 20.5Discontinued operations 29.3 9.6 51.2 32.5 11.1 51.5Total 281.9 9.8 54.6 295.0 7.2 72.0Segmental analysis of results including exceptional items:Testing services 58.0 0.8 21.6 59.1 3.6 20.0Facilities services 54.5 (1.7) 4.0 65.5 (9.7) 7.4Contracting 140.1 2.8 (18.6) 137.9 (2.9) (8.3)Central — (7.7) (3.6) — (3.3) 1.4Continuing operations 252.6 (5.8) 3.4 262.5 (12.3) 20.5Discontinued operations 29.3 9.6 51.2 32.5 10.8 51.5Total 281.9 3.8 54.6 295.0 (1.5) 72.0OriginUK and Europe 224.8 3.6 36.8 237.0 (5.0) 50.9USA and other 57.1 0.2 21.4 58.0 3.5 19.7281.9 3.8 58.2 295.0 (1.5) 70.6Staveley Central (3.6) 1.4Total capital employed 54.6 72.0Net debt (see note 20) (0.9) (20.1)Consolidated net assets 53.7 51.9The exceptional items in 2000 are included in administrative expenses. £7.7 million ofthe exceptional items in 1999 are included in cost of sales and £1 million inadministrative expenses.45


1. Turnover, Profit and Net Assets (continued)2000 1999£m £mOperating profit/loss is stated after charging:Depreciation charge for the periodExceptional provision for impairment:Land and buildings 1.0 —Fixed asset investments 5.0 —Tangible fixed assets 6.0 5.7Auditors’ remuneration:For audit work 0.3 0.5For other services in the UK 0.1 0.1Research and development expenditure — 0.7Operating lease rentals:Hire of plant and equipment 3.4 3.3Other 3.3 3.32. Directors and employees2000 1999The monthly average number of personnel employed inthe business areas was:Testing services 1,380 1,247Facilities services 1,085 1,377Contracting 1,506 1,478Central 19 223,990 4,124Discontinued operations 155 1944,145 4,3182000 1999£m £mStaff costs were:Aggregate gross wages and salaries 96.9 97.0National insurance contributions 7.5 6.7Pension costs 3.3 1.0107.7 104.73. Interest2000 1999£m £mInterest on bank loans and overdrafts 2.0 2.3Interest on other loans 0.5 1.6Interest payable and similar charges 2.5 3.9Less: interest receivable 0.6 1.31.9 2.646


4. Tax on profit/loss on ordinary activities2000 1999£m £mThe charge for taxation is made as follows:UK corporation tax at 30% (1999: 31%) 1.8 —Advance corporation tax — 2.6Overseas taxation 0.3 0.3Prior year adjustments for UK corporation tax (0.3) (0.7)1.8 2.25. Profit/loss for the periodOf the consolidated profit/loss attributable to the shareholders of Staveley Industriesplc, a profit of £4.0 million (1999: £19.2 million) has been taken up in the accounts of theparent company of which £3.0 million is considered distributable. As permitted bysection 230 of the Companies Act 1985, the parent company’s own profit and lossaccount has not been included in these amounts.6. Dividends2000 1999£m £mInterim 0p (1999: 2.5p) per ordinary share — 2.97. Earnings/loss per shareBasic earnings/loss per share is calculated by dividing the group’s profit for the periodof £0.6 million (1999: £8.4 million loss) by the weighted average number of ordinaryshares in issue during the period of 116,378,258 (1999: 116,378,258). For the calculationof diluted earnings/loss per share the weighted average number is the same in 2000 butincreased to 117,112,215 in 1999 by options on 654,833 shares under share savingsschemes and on 79,124 shares under executive share option schemes. In addition, thedirectors consider it appropriate to show alternative calculations based on profitsexcluding the impact of exceptional items which can be reconciled to the basiccalculation as follows:2000 2000 2000 1999 1999 1999£mBasicpencepershareDilutedpencepershare £mBasicpencepershareDilutedpencepershareEarnings/(loss) 0.6 0.6 0.6 (8.4) (7.2) (7.2)Add:Exceptionaloperating costs 6.0 5.1 5.1 8.7 7.5 7.5Loss on the saleof discontinuedoperations — — — 2.1 1.8 1.8Tax relief thereon — — — (1.0) (0.9) (0.9)6.0 5.1 5.1 9.8 8.4 8.4Adjusted earnings 6.6 5.7 5.7 1.4 1.2 1.247


8. Tangible fixed assetsFreeholdproperties£mLongleases£mShortleases£mPlant andequipment£mTotal£mCost or valuationAt 4 April 1999 38.2 1.7 2.9 65.9 108.7Additions — — 0.1 5.2 5.3Disposals (1.8) (0.2) (0.6) (3.1) (5.7)At 1 April 2000 36.4 1.5 2.4 68.0 108.3Cost or valuation comprisesCost 0.6 0.4 2.4 68.0 71.41996 Valuation 35.8 1.1 — — 36.9Accumulated depreciationAt 4 April 1999 2.8 0.2 1.8 36.0 40.8Charge for period 1.4 0.5 0.2 4.9 7.0Disposals (0.3) (0.2) (0.3) (3.3) (4.1)At 1 April 2000 3.9 0.5 1.7 37.6 43.7Net book valueAt 1 April 2000 32.5 1.0 0.7 30.4 64.6At 3 April 1999 35.4 1.5 1.1 29.9 67.9a) The historical cost and related depreciation of those assets included at valuationare as follows:Freeholdproperties£mLongleases£mCostAt 1 April 2000 8.7 1.2At 3 April 1999 9.8 1.2DepreciationAt 1 April 2000 3.5 0.3At 3 April 1999 3.9 0.3Net book valueAt 1 April 2000 5.2 0.9At 3 April 1999 5.9 0.9b) The transitional provisions of FRS15 ‘Tangible Fixed Assets’ have been applied inthese accounts such that the existing book amounts have been retained and thevaluation of freehold properties and long leases is not being updated. The date ofthe most recent valuation was March 1996.48


9. Fixed Asset Investments2000£m1999£mShares at cost 2.0 2.0Loan 3.0 3.05.0 5.0Less: amounts written off (5.0) —The movements in the period were as follows:At 4 April 1999 5.0Amounts written off in the period (see note 1) (5.0)At 1 April 2000 —— 5.0The principal companies are British Salt, Staveley NDT Technologies Inc and StaveleyServices North America Inc.These companies are included in the consolidated accounts and their share capital of allclasses is 100% owned. At the period end British Salt, which is incorporated in GreatBritain and registered in England, had a share capital consisting of ‘‘A’’ shares and‘‘B’’ shares held by Staveley Industries plc. The other two companies are incorporated inthe USA and have a share capital consisting of common stock held by a subsidiary.Other subsidiaries are included in a full list to be filed with the company’s annualreturn.10. Stocks2000£m1999£mRaw materials and consumables 4.4 5.1Work in progress 0.7 0.9Finished goods and goods for resale 2.0 2.47.1 8.411. Debtors2000£m1999£mAmounts falling due within one year:Trade debtors 53.8 55.5Amounts recoverable on contracts 6.0 7.5Other debtors 1.9 3.1Corporation tax recoverable 0.6 2.6Prepayments and accrued income 2.5 1.164.8 69.849


12. BorrowingsAmounts falling due:Withinone year£m2000 1999After Withinone year one year£m£mAfterone year£m6.64% senior notes — — 24.9 —Bank loans and overdrafts 24.9 — — 28.5Total 24.9 — 24.9 28.5The senior notes were repaid on 20 July 1999.2000£m1999£mBank loans and overdrafts are repayable:Within one year 24.9 —Between 2 and 5 years — 28.5Total 24.9 28.5Bank loans of £24.9 million in the group bear interest at rates ranging from 6.97% to7.06%. They were repaid on 10 April 2000 following the sale of the salt business.13. Other Creditors2000£m1999£mPayments received on account 13.6 11.5Trade creditors 42.9 40.1Other creditors including taxation and social security 7.4 6.3Accruals and deferred income 13.5 13.477.4 71.3Other creditors including taxation and social security includes corporate taxation of£2.5 million (1999: £1.8 million) in the group.50


14. Provisions for Liabilities and ChargesAt 4 April1999£mTransferfrom P&Laccount£mUtilised inthe period£mAt 1 April2000£mPensions and similarobligations 0.7 0.1 (0.1) 0.7Other provisions:Committed costs in respectof discontinuedoperations 1.0 — (0.3) 0.7Property leases expiring inyears up to 2011 3.5 0.2 (1.3) 2.4Onerous contracts 1.2 0.1 (0.9) 0.4Reorganisation costs 1.4 0.2 (1.3) 0.3Total 7.8 0.6 (3.9) 4.5The provision made for deferred taxation and other potential liabilities for deferredtaxation are set out below:Amount unprovided2000 1999£m£mProvision made2000 1999£m£mAccelerated tax allowances 1.1 2.2 — —Revaluation — 3.8 — —Other (1.1) (6.0) — —— — — —The deferred tax asset shown under ‘‘Other’’ arises principally from short term timingdifferences. The value of the asset has been restricted to the aggregate value of potentialdeferred liabilities.51


15. Share Capital2000 1999£m £mAuthorised:196,240,000 (1999: 196,240,000) ordinary shares of 25p each 49.1 49.1Allotted, called up and fully paid:116,378,258 (1999: 116,378,258) ordinary shares of 25p each 29.1 29.1(a)At 1 April 2000 there were options outstanding under the share savings schemeto subscribe for ordinary shares at prices between 83p and 171p (1999: same) pershare. The options are linked to a Save-As-You-Earn contract which maturesupon the completion of either 36 or 60 months’ payments deducted from pay.The options are exercisable for a six month period following maturity of theSAYE contract, and the earliest dates of exercise fall between the present time and1 October 2003. At 1 April 2000 options were outstanding over a total of 1,331,212(1999: 1,912,581) ordinary shares.(b)At 1 April 2000 there were options outstanding under the executive share optionschemes for a total of 3,591,559 (1999: 2,245,960) ordinary shares of the companyat subscription prices of between 69p and 244p (1999: 75p and 244p) per shareexercisable at various dates from the present time to 2 August 2009.(c) A special resolution passed by members at the annual general meeting for 1999authorised the company to make market purchases of up to 11,637,800 of thecompany’s ordinary shares. The authority expires at this year’s annual generalmeeting or 7 December 2000 if earlier. No such purchases were made during theperiod under review nor have any such purchases been made after the periodend.16. ReservesSharepremiumaccountProfit andlossaccountRevaluationreserveOtherreservesTotal£m £m £m £m £mAt 4 April 1999 4.4 29.5 1.0 (12.1) 22.8Retained profit for the period — — — 0.6 0.6Revaluation surplus now realised — (0.9) — 0.9 —Goodwill included in the profiton sale of fixed assets whichwas written off to reserves inprior years — — — 1.2 1.2At 1 April 2000 4.4 28.6 1.0 (9.4) 24.6Goodwill included in the profit on sale of fixed assets relates to Hastings CateringSpares which was sold during the year having been previously part of FacilitiesServices. Currency translation adjustments arise from the retranslation into sterling atclosing rates of exchange of the opening net assets of overseas operations and theforeign currency borrowings financing them. Goodwill written-off on the acquisition ofsubsidiaries at 1 April 2000 amounted to £40.1 million (1999: £41.3 million).52


17. Leasing ObligationsProperty leasesOther leases2000 1999 2000 1999£m £m £m £mAnnual rentals payable by the group onoperating leases expiring:Within 1 year 0.1 0.1 0.4 0.5Between 2 and 5 years 0.5 0.3 1.9 2.5Over 5 years 0.7 0.3 — 0.11.3 0.7 2.3 3.118. Reconciliation of Operating Profit/loss to Operating Cash FlowsContinuingoperationsDiscontinuedoperations Total2000 1999 2000 1999 2000 1999£m £m £m £m £m £mOperating profit/(loss) (5.8) (12.3) 9.6 10.8 3.8 (1.5)Depreciation charges 9.6 3.5 2.4 2.2 12.0 5.7Decrease/(increase) instocks 0.8 1.0 — (0.2) 0.8 0.8Decrease/(increase) indebtors 2.9 11.7 (0.6) 1.0 2.3 12.7Increase/(decrease) increditors 2.2 (0.2) 0.3 (0.2) 2.5 (0.4)Net cash inflow fromoperating activities 9.7 3.7 11.7 13.6 21.4 17.353


19. Analysis of Cash Flows for Headings Netted in the Cash Flow Statement2000 1999£m £mReturns on investments and servicing of financeInterest received 0.6 1.3Interest paid (2.6) (4.8)(2.0) (3.5)Capital ExpenditurePurchase of tangible fixed assets (5.3) (6.7)Sale of tangible fixed assets 4.2 0.2Net cash outflow for capital expenditure (1.1) (6.5)Acquisitions and disposalsSale and termination of businesses — 34.6Management of liquid resourcesNet cash (placed on)/withdrawn from term deposits (13.5) 2.0FinancingRedemption of preference shares — (0.9)Debt due within a year:Repayment of loan notes (25.6) —Bank loans drawn down 26.1 —Bank loans repaid (29.0) (9.0)Debt due beyond a year: bank loans repaid — (8.0)Capital element of finance lease rental payments — (0.1)(28.5) (17.1)Net cash outflow from financing (28.5) (18.0)20. Analysis of Net DebtAt 4 April1999 Cash flowOtherchangesAt 1 April2000£m £m £m £mCash at bank (excluding termdeposits) 30.9 (22.8) — 8.1Term deposits 2.4 13.5 — 15.933.3 24.0Debt due after one year (28.5) — 28.5 —Debt due within a year (24.9) 28.5 (28.5) (24.9)(20.1) 19.2 — (0.9)54


21. Financial InstrumentsThe group’s financial instruments, other than derivatives, comprise borrowings andliquid resources whose main purpose is to finance operations. The group also entersinto derivative transactions in the form of forward foreign currency contracts to managecurrency risks arising from the group’s operations. It is, and has been throughout theperiod, the group’s policy that no trading in financial instruments shall be undertaken.Short term debtors and creditors have been excluded from all the following disclosuresother than currency risk disclosures.The main risks arising from the group’s financial instruments are interest rate risk,liquidity risk and foreign currency risk.The policies adopted throughout the period in respect of these risks are summarisedbelow.Interest rate riskThe group financed its operations through a mixture of bank borrowings, which are allat floating rates, and equity capital. The sale of the salt business after the year endfinanced the repayment of those borrowings.Liquidity riskFollowing the sale of the salt business, the company is currently reviewing methods bywhich surplus cash may be returned to shareholders.Foreign currency riskThe group’s only significant overseas subsidiaries operate in the USA and theirrevenues and expenses are denominated in US dollars. In order to protect the groupbalance sheet from fluctuations in the sterling/US dollar exchange rate, the group’sborrowings had the facility to be drawn in US dollars so that they could be used tohedge the net investment in those subsidiaries. Following repayment of thoseborrowings after the year end it was decided to discontinue this hedging policy.The group’s UK businesses operate mainly within the UK. To eliminate currencyexposures that arise on business transacted in currencies other than sterling, forwardcurrency contracts are taken out at the time of commitment to a transaction.55


2000 1999£m £mFinancial assetsThe group had the following financial assets at the period end:Sterling deposits 19.2 26.7Other deposits and bank balances 4.8 6.6Total assets held at floating interest rates 24.0 33.3Other assets on which no interest is paid:Loan to the purchaser of Chronos Richardson’s US business — 3.0Redeemable preference shares in the purchaser of ChronosRichardson’s European business — 2.0Total 24.0 38.3Financial liabilitiesThe group had the following financial liabilities at the period end:Floating rate bank loans 25.0 28.5Floating rate loan notes — 12.5Fixed rate loan notes — 12.4Financial liabilities which do not bear interest 0.5 0.1Total 25.5 53.5The financial liabilities at the period end were all payable in one year or less. With theexception of the floating rate bank loans in 1999 which were drawn in sterling, theseliabilities were denominated in US dollars.The group’s undrawn committed borrowing facilities nominally available at the periodend in respect of which all conditions precedent had been met totalled £17.5 million.These facilities expired on the sale of the salt business in April.2000Book value£m2000Fair value£m1999Book value£m1999Fair value£mFair value of financial assets andliabilitiesPrimary financial instruments heldor issued to finance the group’soperations:Short term financial liabilities (25.5) (25.5) (25.0) (25.1)Long term borrowings — — (28.5) (28.5)Interest bearing assets 24.0 24.0 33.3 33.3Non-interest bearing assets — — 5.0 5.0Derivative financial instruments heldto manage the interest rate profile:Interest rate swaps — — — 0.2Interest bearing assets are short term money market deposits and the bank loansincluded in long term borrowings bear floating interest rates based on LIBOR.Consequently, in both cases, fair values closely approximate book values.56


Gains and losses on derivative financial instruments used for hedging are notrecognised until the exposure that is being hedged is itself recognised. The profits andlosses arising from forward foreign currency contracts are incorporated in the value ofthe transaction being hedged.22. Pension SchemesIn the UK the group’s pension schemes are of the defined-benefit type and areadministered in accordance with the advice of independent, professionally qualifiedactuaries. Elsewhere, they are for the most part of the defined-contribution type. TheUK scheme is externally funded. For the purpose of determining pension costs, anactuarial valuation was carried out on 6 April 1999 using the projected unit method.The main long-term assumptions were that the investment return for active memberswould be 6.7% per annum pre-retirement and 5.7% per annum post retirement and forexisting pensioners 4.7% per annum and that annual increases in pensions and earningswould be 2.8% and 3.8% respectively. The market valuation of the scheme’s assets atthat date was £189 million and their actuarial valuation represented 107% of the valueof the accrued benefits. The pension cost charge for the period in respect of all grouppension schemes was £3.3 million (1999: £1 million), see note 2.During the period, the Staveley Industries Retirement Benefits Scheme held on average88,127 ordinary shares of the company. This holding represented less than 0.1% of boththe scheme’s total assets and of the company’s issued ordinary share capital.23. Contingent Liabilitiesa) Contingent liabilities at 1 April 2000 in respect of performance bonds, tenderbonds and guarantees for third parties amounted to £12.3 million for thecompany and group (1999: £16.1 million for the company and group). Thecompany has also issued certain guarantees in respect of the liabilities of itssubsidiary companies arising in the normal course of their trading activities.b) The company also guaranteed the bank borrowings of British Salt. Theseamounted at the end of the period to £25.0 million but have since been repaidfollowing the disposal of the Salt division.c) The company and certain subsidiaries are parties to legal actions and claimsarising in the ordinary course of business, which the directors are advised andbelieve are likely to be resolved without significant effect on the net assets of thebusiness.24. Related Party TransactionsThe disposals of the Weigh-Tronix group and Chronos Richardson in 1998 were topurchasers connected with senior members of their respective management teams.The Weigh-Tronix personnel concerned were J McCann (chief executive of theWeigh-Tronix group), D Castle (vice president of Weigh-Tronix Inc), L Gunning(managing director of Salter Weigh-Tronix) and R Evans (managing director ofSalter Housewares Limited) who became shareholders in the purchasing company oncompletion. The Chronos Richardson management team comprised AM Sanderson andK Peach, both directors of Chronos Richardson Limited, and K Schroth, manufacturingdirector of Chronos Richardson, and they were the equity shareholders in thepurchasing company.In the case of Chronos Richardson, the consideration for the sale was £5 millioncomprising £2 million redeemable preference shares issued by the purchaser inexchange for the issued share capital of Chronos Richardson Limited and ChronosRichardson GmbH and £3 million cash to acquire the business of Chronos RichardsonInc. This sum was lent by a subsidiary to the purchaser and was repayable in April57


2003. Staveley Industries also provided the purchaser with a working capital facility of£1.5 million and with facilities for the issue of performance bonds of up to £5.5 millionuntil October 1998 and, subsequently, £5 million. Staveley Industries leases to ChronosRichardson Limited at £27,000 per annum the property in Nottingham, England, whichis Chronos Richardson’s headquarters’ site. A subsidiary leases property in Hennef,Germany, to Chronos Richardson GmbH at a monthly rent of DM42,625. On 21 June 2000Staveley Industries announced the sale for £1 of its £5 million investment in ChronosRichardson to Babcock International Group PLC. The working capital and performancebond facilities were cancelled as part of this transaction.25. Post Balance Sheet EventsOn 7 April 2000 the sale of the salt business was completed and on 10 April bankborrowings of £25 million were repaid from the proceeds. The pro forma balance sheetset out below has been drawn up from the consolidated balance sheet at 1 April 2000and the effect of the subsequent events:Groupbalance sheet£mEffect ofdisposal£mPro formabalance sheet£mFixed assets 64.6 (46.8) 17.8Net current assets:Stocks 7.1 (3.0) 4.1Debtors 64.8 (6.1) 58.7Cash at bank 24.0 52.5 76.5Creditors excluding borrowings (77.4) 0.2 (77.2)Borrowings (24.9) 24.9 —Provisions for liabilities and charges (4.5) — (4.5)Net assets 53.7 21.7 75.4Capital and reservesShare capital 29.1 — 29.1Share premium 4.4 — 4.4Revaluation reserve 28.6 (28.1) 0.5Other reserves 1.0 — 1.0Profit and loss account (9.4) 49.8 40.453.7 21.7 75.458


Appendix IVAdditional Information1. ResponsibilityThe directors of GPG Acquisitions (whose names are set out in paragraph 2(a) below)and the directors of GPG (whose names are set out in paragraph 2(b) below) acceptresponsibility for the information contained in this document, save that the onlyresponsibility accepted by them in respect of the information in this document relatingto Staveley and to the directors of Staveley, which has been compiled from publishedsources, is to ensure that such information has been correctly and fairly reproduced andpresented. Subject as aforesaid, to the best of the knowledge and belief of the directorsof GPG and GPG Acquisitions (who have taken all reasonable care to ensure that such isthe case), the information contained in this document is in accordance with the factsand does not omit anything likely to affect the import of such information.2. Directors and Registered Offices(a) The directors of GPG Acquisitions are as follows:Trevor Jorgen Nielsen BeyerClinton John GleaveJames Richard RussellThe principal and registered office of GPG Acquisitions is at 2nd floor,21-26 Garlick Hill, London EC4V 2AU.(b)The directors of GPG and their respective functions are as follows:Sir Ron Brierley – ChairmanTrevor Jorgen Nielsen Beyer – Non Executive DirectorAnthony Ian Gibbs – Executive DirectorBlake Andrew Nixon – Executive DirectorDr. Gary Hilton Weiss – Executive DirectorThe principal and registered office of GPG is at 2nd floor, 21-26 Garlick Hill,London EC4V 2AU.(c)As far as GPG and GPG Acquisitions are aware, the directors of Staveley are asfollows:Graham John Stewart Wilson – ChairmanChristopher John Stewart Woodwark – Chief ExecutiveRichard Lawrence Todd – Finance Director and Company SecretaryRichard Chalmers Gordon Fortin – Non Executive DirectorBlake Andrew Nixon – Non Executive DirectorThe principal and registered office of Staveley is at Staveley House, 11 DingwallRoad, Croydon, Surrey CR9 3DB.(d)In view of Mr. Nixon’s position as a director of both GPG and Staveley, he hastaken no part in the deliberations by the board of directors of GPG in relation tothe Offer.59


3. Market QuotationsThe following table sets out the closing middle market quotations for Staveley Shares asderived from the London Stock Exchange Daily Official List, for the first dealing day ineach of the six months immediately prior to the date of this document and for 22 August2000 (being the latest practicable date prior to the publication of this document and thelast dealing day prior to the commencement of the offer period):DateStaveley Shareprice (p)1 March 2000 58.53 April 2000 552 May 2000 651 June 2000 47.53 July 2000 591 August 2000 5422 August 2000 58.54. Shareholdings and Dealings(a) Definitions and referencesFor the purposes of this Appendix IV:(i) ‘‘disclosure period’’ means the period commencing on 23 August 1999(being the date 12 months prior to the commencement of the offer period)and ending on 22 August 2000 (being the latest practicable date prior to thepublication of this document);(ii)(iii)ownership or control of 20 per cent. or more of the equity share capital of acompany is regarded as the test of associated company status and ‘‘control’’means a holding, or aggregated holdings, of shares carrying 30 per cent. ormore of the voting rights attributable to the share capital of a companywhich are currently exercisable at a general meeting, irrespective ofwhether the holding or holdings give(s) de facto control; and‘‘relevant securities’’ means Staveley Shares or any other securities ofStaveley convertible or exchangeable into, or rights to subscribe for, oroptions (including traded options) in respect of, or derivatives referencedto, such shares.(b)Interests and dealings in Staveley Shares(i) At the close of business on 22 August 2000 (being the latest practicable dateprior to the publication of this document), GPG was beneficially interestedin 33,774,700 Staveley Shares.60


(ii)(iii)The following dealings for value in Staveley Shares by GPG have takenplace during the disclosure period:Number ofStaveleySharesPrice perStaveleyShare (p)DateTransaction6 September 1999 Purchase 600,000 67p27 September 1999 Disposal 15,000 65p28 September 1999 Disposal 15,000 65p30 September 1999 Purchase 1,750,000 65p1 October 1999 Purchase 2,325,000 65p4 October 1999 Purchase 250,000 65p5 October 1999 Purchase 634,300 65.5p5 October 1999 Purchase 600,000 65.5p18 October 1999 Purchase 1,800,000 65.5p3 November 1999 Purchase 150,000 65p3 November 1999 Purchase 250,000 68pSave as disclosed in this paragraph 4(b), as at 22 August 2000 (being thelatest practicable date prior to the publication of this document), neitherGPG nor GPG Acquisitions, nor any director of GPG or GPG Acquisitions,nor any member of the immediate families nor any related trust of any suchdirector, nor any person acting in concert with GPG or GPG Acquisitionsfor the purpose of the Offer, owned, controlled or (in the case of thedirectors of GPG and GPG Acquisitions and their immediate families) wasinterested, directly or indirectly, in any relevant securities nor has any suchperson dealt for value in relevant securities during the disclosure period.(c)GeneralNeither GPG nor GPG Acquisitions nor any person acting in concert with GPG orGPG Acquisitions has any arrangement (including indemnity or optionarrangements), agreement or understanding, formal or informal, of whatevernature, with any person relating to relevant securities which may be aninducement to deal or refrain from dealing.5. Financing Arrangements(a) Full acceptance of the Basic Offer would involve a maximum cash payment ofapproximately £52.5 million in cash by GPG Acquisitions. The considerationunder the Offer will be financed principally from two of GPG’s existing bankfacilities: a facilities agreement dated 22 November 1996 between GPG and HSBCBank plc (‘‘HSBC’’) (as amended by amended facility letters dated 26 November1997 and 11 December 1998, and as further amended by an amendmentagreement dated 22 December 1999 between GPG, Guinness Peat Group NewZealand Limited (‘‘GPGNZ’’) and HSBC and an amendment agreement dated 18April 2000 between the same parties) providing a £40,000,000 unsecuredcommitted revolving cash advances facility to GPG and, if requested by GPG,to GPGNZ, for a period of 5 years from 22 November 1996 at a rate of interestequivalent to 1.00 per cent. per annum above LIBOR from time to time plus anadditional regulatory cost rate in respect of any drawings denominated insterling; and a facility letter dated 24 December 1996 between GPG, GPG(Australia Finance) Pty Limited (‘‘GPG Australia’’) and HSBC Bank AustraliaLimited (‘‘HSBC Australia’’) (as amended by an amendment letter dated 3February 1999 and as further amended by an amendment agreement dated 28April 2000) providing an AUS $30,000,000 multi-option unsecured facilityincorporating a revolving cash advance and note facilities until 30 November61


2001 at a rate of interest of the sum of 1.00 per cent. per annum and the ratequoted by the Bank as that at which it would purchase bills of exchange acceptedby itself with an aggregate face value comparable to the amount of the drawingconcerned and for a term comparable to the period in question at or about10.00am (Sydney time) on the date of commencement of such period. In addition,GPG has agreed to pay certain fees and expenses to both HSBC and HSBCAustralia in connection with the facilities. GPG has agreed to put GPGAcquisitions in funds to implement the Offer. Neither the payment of intereston, nor payment of, nor security for, any liability (contingent or otherwise) ofGPG Acquisitions will depend to any significant extent on the business ofStaveley. The remainder of the consideration will be financed from GPG’sexisting cash resources.(b)Deloitte & Touche Corporate Finance is satisfied that GPG Acquisitions has thenecessary financial resources available to satisfy full acceptance of the Offer.6. Sources of Information(a) The closing middle market prices or quotations of Staveley Shares are derivedfrom the London Stock Exchange Daily Official List.(b)(c)(d)Unless otherwise stated, financial and operating information relating to Staveleyhas been derived from its published annual audited reports and accounts.References to the value of the Offer assume the number of Staveley Sharescurrently in issue to be 116,378,258 (as disclosed in the Annual Report andAccounts for Staveley for the period ended 1 April 2000 (the ‘‘Accounts’’)) ofwhich 33,774,700 are already owned by GPG. References to the value of the Offerassuming the exercise of all outstanding options are based upon the StaveleyShares currently in issue as referred to above, and the 4,922,771 Shares whichwere, at 1 April 2000, the subject of options granted under the Staveley ShareSchemes (as disclosed in the Accounts).The statement that ‘‘the Basic Offer Price of 60 pence represents a small discountto Staveley’s pro forma net assets of 64.8 pence per Share and is believed by GPGto be fair, after allowing for the settlement of outstanding contingencies’’ issourced from:(i)(ii)the net asset value of Staveley of £75.4 million as set out in the pro formabalance sheet at Note 26 to the Accounts (drawn up from the consolidatedbalance sheet contained in the Accounts and the effect of subsequentevents), divided by the 116,378,258 Staveley Shares described above; anddeducting £5.9 million as described in research notes published byCazenove & Co. dated June 2000 and 7 August 2000 which identify,respectively, contingencies and provisions including for dilapidations andlegal actions in respect of contracts totalling £5 million and also identifyAdvance Corporation Tax of £0.9 million as becoming invalidated by thepayment of the Special Interim Dividend.7. United Kingdom TaxationThe statements below are intended only as a general guide to current UK tax law andInland Revenue practice. They are intended only for shareholders who are resident orordinarily resident in the UK for tax purposes, who hold their Staveley Shares as aninvestment, and who are the beneficial owners thereof.Any person who is in any doubt as to his tax position or who may be subject to tax inany other jurisdiction should consult his professional adviser.62


Acceptance of the OfferStaveley Shareholders who accept the Offer will be making a disposal for the purposesof UK taxation of chargeable gains, which, depending on their specific circumstancesand the availability of any exemption or relief, may give rise to a chargeable gain orallowable loss for the purpose of UK taxation of chargeable gains.In the computation of any gain, an indexation allowance may be available to StaveleyShareholders who are within the charge to UK corporation tax, and also to Shareholderswho are individuals in respect of Staveley Shares held before 31 March 1998. In the caseof Staveley Shareholders who are individuals, taper relief may also be available inrespect of Staveley Shares held on or after 5 April 1998.In addition, in the case of Staveley Shareholders who are individuals, any gain up toany unused part of the annual exempt amount (currently £7,100) will not give rise toany liability to tax, but it is noted, as explained above, that individuals who are higherrate taxpayers and who accept the Alternative, will in any event have a liability toincome tax in respect of the Special Interim Dividend.The Directors of GPG Acquisitions have been advised that although no advanceclearance has been obtained from the Inland Revenue, Section 703 of the Income andTaxes Act 1988 (the anti-avoidance provisions relating to certain transactions insecurities) should not be applicable.Consequences of accepting the Basic OfferBecause the effect of the Basic Offer should be to transfer the entitlement to the SpecialInterim Dividend to GPG Acquisitions, Staveley Shareholders who accept the BasicOffer should not be treated, for the purposes of UK taxation, as receiving that dividend.Instead the Special Interim Dividend should be treated as received by GPG Acquisitionsand no UK taxation consequences should arise for such Staveley Shareholders, whetherindividuals or corporate, in respect of the Special Interim Dividend.Any gain or loss arising to Staveley Shareholders who accept the Basic Offer should becomputed, broadly, by deducting from the aggregate of consideration received(i.e. 60 pence per Share) an appropriate amount representing, in the case of eachsuch Shareholder, his base cost in each relevant Share.For administrative convenience, a Staveley Shareholder who validly accepts the BasicOffer will still receive a cheque from Staveley for the Special Interim Dividend on theDividend Payment Date. As this is effectively received as a nominee forGPG Acquisitions and will not be treated as a dividend receipt for tax purposes aStaveley Shareholder should not be entitled to utilise any tax credit attaching to theSpecial Interim Dividend. GPG Acquisitions will arrange on behalf of the StaveleyShareholder to satisfy any obligation he may have in respect of passing on the tax creditinformation to GPG Acquisitions.Consequences of accepting the AlternativeStaveley Shareholders who accept the Alternative will, if eligible, also retain any right toreceive the Special Interim Dividend, at a rate of 34.4 pence per Staveley Share. StaveleyShareholders who are within the charge to UK corporation tax will not normally beliable to any corporation tax in respect of the Special Interim Dividend.Individual Staveley Shareholders who accept the Alternative will be liable to income taxin respect of the receipt of the Special Interim Dividend. Such shareholders should,generally, be entitled to a tax credit in respect of that dividend, amounting to one ninthof the amount of the cash representing that dividend. The tax credit will discharge theincome tax liability of individuals who are not liable to UK income tax at a rate greaterthan the basic rate. Higher rate taxpayers will be liable to income tax at a rate of 32.5 per63


cent. of the amount of the cash dividend plus the tax credit, so that an individualStaveley Shareholder who is a higher rate taxpayer will have a liability, after taking intoaccount the tax credit, equal to 25 per cent. of the cash amount of the Special InterimDividend received.Any gain or loss associated with the acceptance of the Alternative by StaveleyShareholders should be computed, broadly, by deducting from the considerationreceived (i.e. 25.6 pence per Share) an appropriate amount representing, in the case ofeach such Shareholder, his base cost in each relevant Share.8. Other Information(a) No agreement, arrangement or understanding (including any compensationarrangement) exists between GPG or GPG Acquisitions or any party acting inconcert with either of them and any of the directors, recent directors,shareholders or recent shareholders of Staveley which has any connection with,or dependence on, or which is conditional upon the outcome of the Offer.(b) There is no agreement, arrangement or understanding whereby the beneficialownership of any of the Staveley Shares to be acquired pursuant to the Offer willbe transferred to any person, but GPG Acquisitions reserves the right to transferany such shares to any member of the GPG Group.(c) Neither the directors of GPG nor the Directors of GPG Acquisitions are aware ofany material changes in the financial or trading position of Staveley since 1 April2000 (the date to which the last audited accounts of Staveley have been prepared).(d) GPG Acquisitions is a wholly-owned subsidiary of GPG and was incorporated inEngland and Wales on 31 October 1997. GPG Acquisitions has not traded since itsincorporation and as at 23 August 2000 it had issued share capital of £50,000consisting of 50,000 ordinary shares of £1 each, all of which were paid up as to aquarter and issued to GPG (save for 1 ordinary share which was issued to GMGroup Finance Limited as nominee for GPG).(e) Deloitte & Touche Corporate Finance has given and not withdrawn its writtenconsent to the issue of this document and to the inclusion of the references to itsname in the form and context in which they appear.9. Documents Available for InspectionCopies of the following documents will be available for inspection at the offices ofHerbert Smith, Exchange House, Primrose Street, London EC2A 2HS, during usualbusiness hours on any weekday (Saturdays and public holidays excepted) during theoffer period:(a) the Memoranda and Articles of Association of GPG Acquisitions and GPG;(b) the audited consolidated accounts of GPG and the audited accounts ofGPG Acquisitions for the two financial years ended 31 December 1998 and 31December 1999;(c) the documents relating to financing arrangements for the Offer as referred to inparagraph 5(a) of this Appendix IV;(d) the research notes published by Cazenove & Co. refered to in paragraph 6(d) ofthis Appendix IV;(e) the written consent referred to in paragraph 8(e) above; and(f) this document and the Form of Acceptance.23 August 200064


DEFINITIONSThe following definitions apply throughout this document and the accompanying Form of Acceptance unless thecontext requires otherwise:‘‘the Act’’‘‘Alternative’’‘‘Basic Offer’’‘‘certificated’’ or‘‘in certificated form’’‘‘Code’’‘‘CREST’’‘‘CRESTCo’’‘‘CREST member’’‘‘CREST participant’’‘‘CREST sponsor’’‘‘CREST sponsored member’’‘‘Deloitte & Touche CorporateFinance’’‘‘Dividend Payment Date’’‘‘Escrow Agent’’the Companies Act 1985 (as amended)the alternative offer made on the ex dividend basis described in paragraph 2 (b)of the letter from Deloitte & Touche Corporate Finance set out in this documentthe basic offer made on the cum dividend basis described in paragraph 2 (a) ofthe letter from Deloitte & Touche Corporate Financea share or other security which is not in uncertificated form (that is, not inCREST)the City Code on Takeovers and Mergersthe relevant system (as defined in the Regulations) in respect of whichCRESTCo is the Operator (as defined in the Regulations)CRESTCo Limiteda person who has been admitted by CRESTCo as a system-member (as definedin the Regulations)a person who is, in relation to CREST, a system-participant (as defined in theRegulations)a CREST participant admitted to CREST as a CREST sponsora CREST participant admitted to CREST, as a CREST sponsor, being asponsoring system-participant (as defined in the Regulations)Deloitte & Touche Corporate Finance, a division of Deloitte & Touche, financialadviser to GPG Group29 September 2000, or any later date on which the Special Interim Dividend isscheduled to be paidComputershare Services PLC in its capacity as escrow agent (as defined by theCREST Manual issued by CRESTCo)‘‘Form of Acceptance’’ the form of acceptance, authority and election relating to the Offeraccompanying this document‘‘GPG’’‘‘GPG Acquisitions’’‘‘GPG Group’’‘‘London Stock Exchange’’‘‘member account ID’’‘‘Offer’’‘‘Offer Document’’Guinness Peat Group plcGPG Acquisitions No.3 plc, a wholly-owned subsidiary of GPGGPG and its subsidiary undertakingsLondon Stock Exchange plcthe identification code or number attached to any member account in CRESTthe cash offer being made by Deloitte & Touche Corporate Finance on behalf ofGPG Acquisitions to acquire all of the Staveley Shares not already held by GPG,subject to the terms and conditions set out in this document and in the Form ofAcceptance, and including, where the context so permits, the Basic Offer and/or Alternative and, where the context so requires, any subsequent revision,variation, extension or renewal of such offerthis document65


‘‘offer period’’the period commencing on (and including) 23 August 2000 until whichever ofthe following dates and times shall be the latest:(i)(ii)3.00 p.m. on 13 September 2000; andthe earlier of:(a)(b)the time at which the Offer lapses; andthe time at which the Offer becomes unconditional‘‘Panel’’‘‘participant ID’’‘‘Record Date’’the Panel on Takeovers and Mergersthe identification code or membership number used in CREST to identify aparticular CREST member or a CREST participantthe record date for payment of the Special Interim Dividend, which is currentlyanticipated to be 8 September 2000‘‘Regulations’’ The Uncertificated Securities Regulations 1995 (SI 1995 No. 95/3272)‘‘Special Interim Dividend’’‘‘Staveley’’‘‘Staveley Group’’‘‘Staveley Register’’‘‘Staveley Shareholders’’ or‘‘Shareholders’’‘‘Staveley Shares’’ or‘‘Shares’’‘‘Staveley Share Schemes’’‘‘subsidiary’’ and‘‘subsidiary undertaking’’‘‘TFE Instruction’’‘‘TTE Instruction’’‘‘uncertificated’’ or‘‘in uncertificated form’’‘‘UK’’ or ‘‘United Kingdom’’‘‘UK Listing Authority’’the special interim dividend of 34.4 pence per Staveley Share in respect of thecurrent financial year to 31 March 2001 announced by the board of Staveley on7 August 2000Staveley Industries plcStaveley, its subsidiaries and subsidiary undertakingsthe register of Staveley Shareholdersholders of Staveley Sharesthe existing unconditionally allotted or issued and fully paid ordinary shares of25 pence each in the capital of Staveley and any further such shares which areunconditionally allotted or issued and fully paid before the date on which theOffer closes (or such earlier date(s) as GPG Acquisitions may, subject to theCode, determine), including any such shares so unconditionally allotted orissued pursuant to the exercise of options granted under the Staveley ShareSchemesthe Staveley Industries Share Savings Scheme and the Staveley IndustriesExecutive Share Option Schemes 1992 and 1996have the meanings given to them in the Acta Transfer from Escrow instruction (as defined by the CREST Manual issued byCRESTCo)a Transfer to Escrow instruction (as defined by the CREST Manual issued byCRESTCo)a share or other security, title to which is recorded on the relevant register ofthe share or security concerned as being held in uncertificated form in CRESTand title to which, by virtue of the Regulations, may be transferred by means ofCRESTthe United Kingdom of Great Britain and Northern Irelandthe Financial Services Authority as the competent authority for listing in theUnited Kingdom under Part IV of the Financial Services Act 198666


Printed by Burrups, a St Ives Company B602063London Paris Frankfurt Luxembourg New York Philadelphia Washington DC Hong Kong Tokyo

More magazines by this user
Similar magazines