NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO OR FROM ANY RESTRICTED JURISDICTIONS OR JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION.
THE FOLLOWING ANNOUNCEMENT IS AN ADVERTISEMENT AND NOT A PROSPECTUS OR A PROSPECTUS EQUIVALENT DOCUMENT AND INVESTORS SHOULD NOT MAKE ANY INVESTMENT DECISION IN RELATION TO THE NEW SHARES EXCEPT ON THE BASIS OF THE INFORMATION IN THE SCHEME DOCUMENT, THE PROSPECTUS AND THE CIRCULAR WHICH ARE BEING PUBLISHED TODAY.
FOR IMMEDIATE RELEASE
23 May 2017
Recommended all-share offer by John Wood Group PLC (“Wood Group”) for Amec Foster Wheeler plc (“Amec Foster Wheeler”)
Publication of Prospectus and Circular (this “Announcement”)
On 13 March 2017 the Boards of Wood Group and Amec Foster Wheeler jointly announced that they had reached agreement on the terms of a unanimously recommended all-share offer for Amec Foster Wheeler (the “Combination”) (the “Original Announcement”). The Wood Group Board believes that the Combination will accelerate delivery of Wood Group’s strategic objectives to improve its service offering in project delivery, to enhance capability across the value chain in core oil and gas markets, and to broaden and deepen end market and customer exposure.
Unless otherwise defined in this Announcement, terms defined in Wood Group’s Original Announcement of the Combination on 13 March 2017 have the same meaning where used in this Announcement.
Under the terms of the Combination, Amec Foster Wheeler Shareholders will receive 0.75 new Wood Group Shares for each Amec Foster Wheeler Share. Based on the Closing Price of £7.52 per Wood Group Share on 10 March 2017, this represents a value of approximately £5.64 per Amec Foster Wheeler Share and a premium of 15.3 per cent. to the Closing Price of £4.89 on 10 March 2017 (being the last Business Day before the date of the Original Announcement).
Today, Wood Group published a Circular and a Prospectus ahead of the Wood Group General Meeting, scheduled for 11.00 a.m. on 15 June 2017. Approval will be sought from Wood Group Shareholders for the Combination to be effected by a scheme of arrangement of Amec Foster Wheeler.
The Circular and the Prospectus have each been approved by the UK Listing Authority and are now available at www.woodgroup.com. A copy of each of the Circular and the Prospectus has been submitted to the National Storage Mechanism and will shortly be available for viewing at www.morningstar.co.uk/uk/nsm. Amec Foster Wheeler has separately published a Scheme Document ahead of its own General Meeting on 15 June 2017.
The Combination is intended to result in:
- the creation of a global leader in project, engineering and technical services delivery across a broad range of industrial markets, predominantly focussed on oil & gas which represents c. 55 per cent. of pro-forma revenues across upstream, midstream and downstream;
- accelerated delivery of Wood Group’s strategic objectives to improve its asset life cycle service offering in project delivery, to enhance capability across the value chain in core oil and gas markets, and to broaden and deepen end market and customer exposure and reduce earnings volatility through oil and gas cycles;
- Wood Group’s measured risk appetite continuing in a flexible asset light model with revenues derived principally from reimbursable work; and
- superior returns from the delivery of significant cost and revenue synergies. The level of annual pre-tax cost synergies arising from the transaction by the end of the third year following completion of the Combination (“Completion”) was increased to £150m per annum from £110m per annum on 5 April 2017 and has been further increased to at least £165m per annum, again by the end of the third year following the completion of the Combination, in the Circular and the Prospectus released today.
The Combined Group will be led by Robin Watson as Chief Executive and David Kemp as CFO. Ian Marchant will continue as Chair. As disclosed in the circular and the prospectus, on completion, certain members of the Amec Foster Wheeler Board will join the Board of the Combined Group. Roy Franklin will join as Deputy Chair and Senior Independent Director, and Ian McHoul and Linda Adamany will be appointed as non-executive directors.
Expected timetable
The following dates and times are subject to change and will depend on, among other things, the date on which antitrust (and other) Conditions to the Scheme are satisfied or waived:
Publication of Wood Group Prospectus and Circular 23 May 2017
Publication of Amec Foster Wheeler Scheme Document 23 May 2017
Wood Group General Meeting 15 June 2017
Amec Foster Wheeler General Meeting 15 June 2017
Court Meeting 15 June 2017
Scheme Court Hearing to sanction the Scheme “D” (a date expected to be in the fourth quarter of 2017, subject to regulatory clearances)
Effective Date D+1
Admission of New Wood Group Shares on London Stock Exchange By 8.00 a.m. on D+2
Enquiries
Wood Group
Andrew Rose, Head of Investor Relations Tel: +44 (0)12 2453 2716
J.P. Morgan Cazenove (financial adviser and corporate broker to Wood Group)
Michael Wentworth-Stanley / Dag Skattum Tel: +44 (0)20 7742 4000
Richard Perelman / James Robinson
Credit Suisse (financial adviser and corporate broker to Wood Group)
Jonathan Grundy / John Hannaford Tel: +44 (0)20 7888 8888
James Peterkin / Joe Hannon
Brunswick (Public Relations Adviser to Wood Group)
Patrick Handley Tel: +44 (0)20 7404 5959
Notes to Editors
Wood Group is an international energy services company with around US$5bn sales and operating in more than 40 countries. The Group designs, modifies, constructs and operates industrial facilities mainly for the oil & gas sector, right across the asset life cycle. We enhance this with a wide range of specialist technical solutions including our world leading subsea, automation and integrity solutions. Our real differentiator is our range of services, the quality of our delivery, the passion of our people, our culture and values. We are extending the scale and scope of our core services into adjacent industries. Visit Wood Group at www.woodgroup.com and connect with us on LinkedIn and Twitter.
Board Appointments
Roy Franklin is currently a non-executive director of Amec Foster Wheeler, Deputy Chairman of Statoil ASA and a non-executive director of Santos Ltd. He was previously Chairman of Keller Group plc.
Ian McHoul is currently CFO of Amec Foster Wheeler and a non-executive director of Britvic plc. He was previously a non-executive director of Premier Foods plc.
Linda Adamany is currently a non-executive director of Amec Foster Wheeler, a non-executive director of Coeur Mining, Inc. and a non-executive director of Leucadia National Corporation. She was previously a non-executive director of National Grid plc.
No further information is required to be disclosed in respect of the new Wood Group Directors pursuant to Listing Rule 9.6.13R.
Update to the Wood Group Quantified Financial Benefits Statement
The Quantified Financial Benefits Statement, containing statements of estimated cost savings and synergies arising from the Combination, is set out below:
The Wood Group Directors are confident that, as a direct result of the Combination, the Combined Group could generate attractive synergies and create additional shareholder value.
The Original Announcement included statements of estimated pre-tax cost synergies expected to arise from the Combination of at least £110m per annum, by the end of the third year following Completion. On 5 April 2017, the Wood Group Directors updated an estimate of the pre-tax cost synergies expected to arise from the Combination from at least £110m per annum to at least £150m per annum by the end of the third year following Completion. The Wood Group Directors have now further increased their estimate of pre-tax cost synergies to at least £165m per annum, again by the end of the third year following Completion. In US$, the pre-tax cost synergies have increased from approximately US$134m per annum to approximately US$200m per annum, using the same US dollar:sterling exchange rate of 1.2171:1 as set out in the Original Announcement. The Wood Group Directors believe that these pre-tax cost synergies further enhance the attractiveness of the Combination.
The increase in the expected level of pre-tax cost synergies is attributable to a more developed assessment of the synergy opportunity carried out since the Original Announcement, which has enabled a refinement of the synergy initiatives and the related risk adjustments incorporated in the underlying calculations.
The expected sources of quantified cost synergies, which are in addition to synergies previously targeted and already underway by Wood Group and Amec Foster Wheeler separately, comprise:
- operating efficiencies: approximately 50 per cent. of the identified cost synergies are expected to be generated from economies of scale in addressable operating cost, efficiencies in operational procurement spend and the reduction of duplicate costs across country and regional leadership;
- corporate efficiencies: approximately 20 per cent. of the identified cost synergies are expected to be generated from the reduction of duplicate costs across board and executive leadership teams, in addition to other corporate and group functional costs; and
- administration efficiencies: approximately 30 per cent. of the identified cost synergies are expected to be generated from the consolidation of overlapping office locations, the elimination of duplicated IT systems and the reduction of duplicate costs across central support functions.
Approximately 30 per cent. of the identified cost synergies are expected to be realised by the end of the first year following Completion, rising to 70 per cent. by the end of the second year following Completion and to 100 per cent. by the end of the third year following Completion.
These anticipated cost synergies, which are reported under the City Code as set out in Appendix I of the Scheme Document, reflect both the beneficial elements and the costs, and will accrue as a direct result of the Combination and would not be achieved on a standalone basis.
Wood Group estimates that realisation of these cost synergies would give rise to one-off costs of approximately £190 million (US$231 million) incurred in the first three years post-Completion.
Aside from the one-off costs referred to above, the Wood Group Directors do not expect any material dis-synergies to arise in connection with the Combination. Paragraph 17 of Part II of the Scheme Document describes the proposal of a remedy commitment that Wood Group has made to the CMA. Should such proposed remedy commitment be agreed with the CMA and implemented, it is anticipated that approximately £25m per annum of the pre-tax cost synergies would not be achieved. Furthermore, approximately £25m of the one-off costs to realise the cost synergies would not be incurred. In US$, the reduction in cost synergies would be approximately US$30m per annum and the reduction in one-off costs approximately US$30m, using the same US dollar:sterling exchange rate of 1.2171:1 as set out in the original announcement of the Combination on 13 March 2017.
Over the longer term, the Wood Group Board believes that the Combined Group would also have the potential to realise additional revenue synergies that are not included in the Quantified Financial Benefits Statement, from the delivery of an expanded range of services to an enlarged customer base, a broader offering in the core oil and gas market, cross selling, pull through opportunities and insourcing by the Combined Group of currently outsourced activity.
None of the statements contained above is intended as a profit forecast and should not be interpreted as such.
Bases of belief
In preparing the Quantified Financial Benefits Statement, Amec Foster Wheeler has provided Wood Group with certain operating and financial information to facilitate a detailed analysis in support of evaluating the potential synergies available from the Combination. In circumstances where data has been limited for commercial or other reasons, Wood Group management has made estimates and assumptions to aid its development of individual synergy initiatives.
The cost base used as the basis for the quantified exercise is Amec Foster Wheeler’s 2016 cost base, consistent with Amec Foster Wheeler’s 2016 unaudited full year trading update provided by Amec Foster Wheeler to Wood Group and released by Amec Foster Wheeler on 13 March 2017. Wood Group adjusted this information to take into account recent cost savings announced by Amec Foster Wheeler on 27 October 2016.
The assessment and quantification of the expected synergies have in turn been informed by Wood Group management’s industry experience as well as their experience of executing and integrating past acquisitions.
In arriving at the estimate of synergies set out in this Announcement, the Wood Group Board has assumed that Amec Foster Wheeler’s support function activities, such as Finance and Human Resources, will transition onto Wood Group’s existing systems.
In general, the synergy assumptions have in turn been risk adjusted, exercising a degree of prudence in the calculation of the estimated synergy benefit set out above.
The Wood Group Board has, in addition, made the following assumptions, all of which are outside the influence of the Wood Group Board:
- there will be no material impact on the underlying operations of either company or their ability to continue to conduct their businesses;
- there will be no material change to macroeconomic, political, regulatory or legal conditions in the markets or regions in which Wood Group and Amec Foster Wheeler operate that materially impact on the implementation or costs to achieve the proposed cost savings;
- there will be no material change in current foreign exchange rates; and
- there will be no change in tax legislation or tax rates or other legislation or regulation in the countries in which Wood Group and Amec Foster Wheeler operate that could materially impact the ability to achieve any benefits.
This analysis assumes no business disposal other than as referred to above.
Reports
As required by Rule 28.1(a) of the City Code, PwC, as reporting accountants to Wood Group, and J.P. Morgan Cazenove and Credit Suisse, as financial advisers to Wood Group, have provided the opinions required under that Rule relating to the Quantified Financial Benefits Statement set out above. Copies of these reports are set out below. Any references to anticipated synergies should be read in conjunction with these reports. PwC, J.P. Morgan Cazenove and Credit Suisse have each given and have not withdrawn their consent to the publication of their respective report in the form and context in which it is included.
Notes
The statements of estimated synergies relate to future actions and circumstances which, by their nature, involve risks, uncertainties and contingencies. As a result, the synergies referred to may not be achieved, or may be achieved later or sooner than estimated, or those achieved could be materially different from those estimated.
Due to the scale of the Combined Group, there may be additional changes to the Combined Group’s operations. As a result, and given the fact that the changes relate to the future, the resulting synergies may be materially greater or less than those estimated.
No statement in the Quantified Financial Benefits Statement or in this Announcement generally should be interpreted to mean that earnings, earnings per share or income, cash flow from operations or free cash flow for the Combined Group for the current or future financial years would necessarily match or exceed the historical published earnings, earnings per share or income, cash flow from operations or free cash flow for Wood Group, Amec Foster Wheeler or the Combined Group (as appropriate).
PRICEWATERHOUSECOOPERS LLP REPORT ON QUANTIFIED FINANCIAL BENEFITS STATEMENT
The Directors
John Wood Group PLC
15 Justice Mill Lane
Aberdeen
AB11 6EQ
J.P Morgan Limited
25 Bank Street
Canary Wharf
London
E14 5JP
Credit Suisse International
One Cabot Square
London
E14 4QJ
(J.P. Morgan Limited and Credit Suisse International together the “Financial Advisers”)
23 May 2017
Dear Ladies and Gentlemen,
Updated Quantified Financial Benefits Statement by John Wood Group PLC
We report on the quantified financial benefits statement (the “Statement”) by the Directors included in the Scheme Document dated 23 May 2017 (the “Investment Circular”) to the effect that:
“The JWG Directors are confident that, as a direct result of the Combination, the Combined Group could generate attractive synergies and create additional shareholder value.
The Announcement included statements of estimated pre-tax cost synergies expected to arise from the Combination of at least £110 million per annum by the end of the third year following completion of the Combination. On 5 April 2017, the JWG Directors updated this estimate of the pre-tax cost synergies expected to arise from the Combination from at least £110 million per annum to at least £150 million per annum by the end of the third year following completion of the Combination. The JWG Directors have now further increased their estimate of pre-tax cost synergies to at least £165 million per annum by the end of the third year following completion of the Combination.
In US dollars, the pre-tax cost synergies have increased from approximately US$134 million per annum to approximately US$200 million per annum, using the same US dollar:sterling exchange rate of 1.2171:1 as set out in the Announcement. The JWG Directors believe that these pre-tax cost synergies further enhance the attractiveness of the Combination.
The increase in the expected level of pre-tax cost synergies is attributable to a more developed assessment of the synergy opportunity carried out since the Announcement, which has enabled a refinement of the synergy initiatives and the related risk adjustments incorporated in the underlying calculations.
The expected sources of quantified cost synergies, which are in addition to synergies previously targeted and already underway by JWG and Amec Foster Wheeler separately, comprise:
(i) operating efficiencies: approximately 50 per cent. of the identified cost synergies are expected to be generated from economies of scale in addressable operating cost, efficiencies in operational procurement spend and the reduction of duplicate costs across country and regional leadership;
(ii) corporate efficiencies: approximately 20 per cent. of the identified cost synergies are expected to be generated from the reduction of duplicate costs across board and executive leadership teams, in addition to other corporate and group functional costs; and
(iii) administration efficiencies: approximately 30 per cent. of the identified cost synergies are expected to be generated from the consolidation of overlapping office locations, the elimination of duplicated IT systems and the reduction of duplicate costs across central support functions.
Approximately 30 per cent.of the identified cost synergies are expected to be realised by the end of the first year following completion of the Combination, rising to 70 per cent. by the end of the second year following completion of the Combination and to 100 per cent. by the end of the third year following completion of the Combination.
These anticipated cost synergies, which are reported under the City Code as set out in Appendix I of this document, reflect both the beneficial elements and the costs, and will accrue as a direct result of the Combination and would not be achieved on a standalone basis.
JWG estimates that realisation of these cost synergies would give rise to one-off costs of approximately £190 million (US$231 million) incurred in the first three years post-completion of the Combination.
Aside from the one-off costs referred to above, the JWG Directors do not expect any material dis-synergies to arise in connection with the Combination. Paragraph 17 of this Part II of this document describes the proposal of a remedy commitment that JWG has made to the CMA. Should such proposed remedy commitment be agreed with the CMA and implemented, it is anticipated that approximately £25 million per annum of the pre-tax cost synergies would not be achieved. Furthermore, approximately £25 million of the one-off costs to realise the cost synergies would not be incurred. In US dollars, the reduction in cost synergies would be approximately US$30 million per annum and the reduction in one-off costs approximately US$30 million, using the same US dollar:sterling exchange rate of 1.2171:1 as set out in the Announcement.”
This Statement has been made in the context of disclosure inthe Investment Circular setting out the bases of belief of the Directors supporting the Statement and their analysis and explanation of the underlying constituent elements.
This report is required by Rule 28.1(a)(i) of the City Code on Takeovers and Mergers (the “Code”) and is given for the purpose of complying with that rule and for no other purpose.
Responsibilities
It is the responsibility of the John Wood Group PLC Board to make the Statement in accordance with the Code.
It is our responsibility to form our opinion as required by Rule 28.1(a)(i) of the Code, as to whether the Statement has been properly compiled on the basis stated.
Save for any responsibility which we may have to those persons to whom this report is expressly addressed or to the shareholders of John Wood Group PLC as a result of the inclusion of this report in the Announcement, and for any responsibility arising under Rule 28.1(a)(i) of the Code to any person as and to the extent therein provided, to the fullest extent permitted by law we do not assume any responsibility and will not accept any liability to any other person for any loss suffered by any such other person as a result of, arising out of, or in connection with this report or our statement, required by and given solely for the purposes of complying with Rule 23.2(b) of the Code, consenting to its inclusion in the Investment Circular.
Basis of Opinion
We conducted our work in accordance with the Standards for Investment Reporting issued by the Auditing Practices Board in the United Kingdom. We have discussed the Statement together with the relevant bases of belief (including sources of information and assumptions) with the John Wood Group PLC Board and with the Financial Advisers. Our work did not involve any independent examination of any of the financial or other information underlying the Statement.
Since the Statement and the assumptions on which it is based relate to the future and may therefore be affected by unforeseen events, we can express no opinion as to whether the actual benefits achieved will correspond to those anticipated in the Statement and the differences may be material.
Our work has not been carried out in accordance with auditing or other standards and practices generally accepted in the United States of America or other jurisdictions and accordingly should not be relied upon as if it had been carried out in accordance with those standards and practices.
Opinion
In our opinion, on the basis of the foregoing, the Statement has been properly compiled on the basis stated.
Yours faithfully
PricewaterhouseCoopers LLP
Chartered Accountants
PricewaterhouseCoopers LLP is a limited liability partnership registered in England with registered number OC303525. The registered office of PricewaterhouseCoopers LLP is 1 Embankment Place, London WC2N 6RH. PricewaterhouseCoopers LLP is authorised and regulated by the Financial Conduct Authority for designated investment business.
REPORT FROM J.P. MORGAN CAZENOVE AND CREDIT SUISSE
The Directors
John Wood Group PLC
15 Justice Mill Lane
Aberdeen
AB11 6EQ
23 May 2017
Dear Ladies and Gentlemen,
Updated Quantified Financial Benefits Statement by John Wood Group PLC (“JWG”)
We refer to the quantified financial benefits statement, the bases of belief thereof and the notes thereto (together, the “Statement”) made by JWG, set out in the scheme document dated 23 May 2017 (the “Scheme Document”), for which the Board of Directors of JWG (the “Directors”) are solely responsible under Rule 28.1(a)(ii) of the City Code on Takeovers and Mergers (the “Code”).
We have discussed the Statement (including the assumptions, accounting policies, bases of calculation and sources of information referred to therein), with the Directors and those officers and employees of JWG who have developed the underlying plans as well as with PricewaterhouseCoopers LLP. The Statement is subject to uncertainty as described in the announcement and our work did not involve an independent examination of any of the financial or other information underlying the Statement.
We have relied upon the accuracy and completeness of all the financial and other information provided to us by or on behalf of JWG and/or Amec Foster Wheeler, or otherwise discussed with or reviewed by us, and we have assumed such accuracy and completeness for the purposes of providing this letter.
We do not express any view as to the achievability of the quantified financial benefits identified by the Directors.
We have also reviewed the work carried out by PricewaterhouseCoopers LLP and have discussed with it its opinion addressed to you and us on this matter and which is set out in the Scheme Document, and the accounting policies and bases of calculation for the Statement.
On the basis of the foregoing, we consider that the Statement, for which the Directors are solely responsible, for the purposes of the Code, has been prepared with due care and consideration.
This letter is provided to you solely in connection with Rule 28.1(a)(ii) of the Code and for no other purpose. We accept no responsibility to JWG, Amec Foster Wheeler or their shareholders or any person other than the Directors of JWG in respect of the contents of this letter. We are acting exclusively as financial advisers to JWG and no one else in connection with the Combination between JWG and Amec Foster Wheeler and it was for the purpose of complying with Rule 28.1(a)(ii) of the Code that JWG requested J.P. Morgan Limited and Credit Suisse International to prepare this report on the Statement. No person other than the Directors of JWG can rely on the contents of, or the work undertaken in connection with, this letter, and to the fullest extent permitted by law, we expressly exclude and disclaim all liability (whether in contract, tort or otherwise) to any other person, in respect of this letter, its contents or the work undertaken in connection with this letter or any of the results that can be derived from this letter or any written or oral information provided in connection with this letter.
Yours faithfully,
J.P. Morgan Limited and Credit Suisse International
Cautionary Note Regarding Forward-Looking Statements
This Announcement contains certain forward-looking statements with respect to the financial condition, results of operations and business of Amec Foster Wheeler and certain plans and objectives of Wood Group with respect thereto. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often use words such as “anticipate”, “target”, “expect”, “estimate”, “intend”, “plan”, “goal”, “believe”, “hope”, “aims”, “continue”, “will”, “may”, “should”, “would”, “could”, or other words of similar meaning. These statements are based on assumptions and assessments made by Amec Foster Wheeler, and/or Wood Group in light of their experience and their perception of historical trends, current conditions, future developments and other factors they believe appropriate. By their nature, forward-looking statements involve risk and uncertainty, because they relate to events and depend on circumstances that will occur in the future and the factors described in the context of such forward-looking statements in this Announcement could cause actual results and developments to differ materially from those expressed in or implied by such forward-looking statements. Although it is believed that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct and you are therefore cautioned not to place undue reliance on these forward-looking statements which speak only as at the date of this Announcement. Neither Amec Foster Wheeler nor Wood Group assumes any obligation to update or correct the information contained in this Announcement (whether as a result of new information, future events or otherwise), except as required by applicable law.
There are several factors which could cause actual results to differ materially from those expressed or implied in forward-looking statements. Among the factors that could cause actual results to differ materially from those described in the forward-looking statements are changes in the global, political, economic, business, competitive, market and regulatory forces, future exchange and interest rates, changes in tax rates and future business combinations or dispositions.
Additional risk factors that may affect future results are contained in Amec Foster Wheeler’s Form 20-F for the year ended 31 December 2016 (available at www.amecfw.com and www.sec.gov). These risk factors expressly qualify all forward-looking statements contained in this Announcement and should also be considered by the reader.
For a discussion of important factors which could cause actual results to differ from forward-looking statements relating to Wood Group and the WG Group, refer to Wood Group’s annual report and accounts for the year ended 31 December 2016. Each forward-looking statement speaks only as of the date of this Announcement. None of Wood Group, the WG Group, Amec Foster Wheeler or the Amec Foster Wheeler Group undertakes any obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except to the extent legally required. In light of these risks, results could differ materially from those stated, implied or inferred from the forward-looking statements contained in this Announcement.
Further Information
This Announcement is for information purposes only and is not intended to and does not constitute or form part of any offer to sell or subscribe for or any invitation to purchase or subscribe for or otherwise acquire or dispose of any securities or the solicitation of any vote or approval in any jurisdiction pursuant to the Combination or otherwise, nor will there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law. The Combination will be made solely pursuant to the terms of the Scheme Document setting out the particulars of the proposed Scheme between Amec Foster Wheeler and the Amec Foster Wheeler Shareholders to implement the Combination with or subject to any modification, addition or condition approved or imposed by the Court and agreed by Amec Foster Wheeler and Wood Group (or, in the event that the Combination is to be implemented by means of an Offer, the Offer Document), which, together with the forms of proxy that will accompany the Scheme Document, contain the full terms and conditions of the Scheme, including details of how to vote in respect of the Combination. Any decision in respect of, or other response to, the Combination by Amec Foster Wheeler Shareholders should be made only on the basis of the information contained in the Scheme Document.
Amec Foster Wheeler has prepared the Scheme Document to be distributed to Amec Foster Wheeler Shareholders. Wood Group has prepared the Circular and has made available the Prospectus containing information on the New Wood Group Shares and the Combined Group. Wood Group urges Wood Group Shareholders to read the Prospectus to be published by Wood Group and the Circular carefully when they become available because they contain important information in relation to the Scheme, the New Wood Group Shares and the Combined Group. Amec Foster Wheeler urges Amec Foster Wheeler Shareholders to read the Scheme Document and the Prospectus carefully because they contain important information in relation to the Scheme, the New Wood Group Shares and the Combined Group. Any vote in respect of resolutions to be proposed at the Wood Group General Meeting to approve the Combination, the Scheme or related matters, should be made only on the basis of the information contained in the Scheme Document, the Prospectus and, the Circular.
This Announcement does not constitute a prospectus or prospectus equivalent document.
The Combination will be subject to the applicable requirements of the City Code, the UK Panel on Takeovers and Mergers, the London Stock Exchange and the UK Listing Authority.
Please be aware that addresses, electronic addresses and certain other information provided by Amec Foster Wheeler Shareholders, persons with information rights and other relevant persons for the receipt of communications from Amec Foster Wheeler may be provided to Wood Group during the offer period as required under Section 4 of Appendix 4 of the City Code to comply with Rule 2.11(c) of the City Code.
Overseas jurisdictions
The release, publication or distribution of this Announcement in jurisdictions other than the United Kingdom may be restricted by law and therefore any persons who are subject to the laws of any jurisdiction other than the United Kingdom should inform themselves about, and observe any applicable requirements. In particular, the ability of persons who are not resident in the United Kingdom to vote their Amec Foster Wheeler shares with respect to the Scheme at the Court Meeting, or to execute and deliver Forms of Proxy appointing another to vote at the Court Meeting on their behalf, may be affected by the laws of the relevant jurisdictions in which they are located. Any failure to comply with such requirements may constitute a violation of the securities laws of any such jurisdiction. To the fullest extent permitted by applicable law, the companies and other persons involved in the Combination disclaim any responsibility or liability for any violation of such restrictions by any person. This Announcement has been prepared for the purpose of complying with English law and the City Code and the information disclosed may not be the same as that which would have been disclosed if this Announcement had been prepared in accordance with the laws of jurisdictions outside the United Kingdom. Unless otherwise determined by Wood Group or required by the City Code, and permitted by applicable law and regulation, the Combination will not be made available directly or indirectly in, into or from any Restricted Jurisdiction or where to do so would violate the laws of a jurisdiction, and the Combination will not be capable of acceptance from or within a Restricted Jurisdiction.
Copies of this Announcement and any documentation relating to the Combination are not being, and must not be, directly or indirectly, mailed, transmitted or otherwise forwarded, distributed or sent in or into or from any Restricted Jurisdiction and persons receiving such documents (including custodians, nominees and trustees) must not mail or otherwise forward, distribute or send it in or into or from any Restricted Jurisdiction where to do so would violate the laws in that jurisdiction, and persons receiving this Announcement and any documents relating to the Combination (including custodians, nominees and trustees) must not mail or otherwise distribute or send them in, into or from such jurisdictions where to do so would violate the laws in that jurisdiction.
If the Combination is implemented by way of an Offer (unless otherwise permitted by applicable law and regulation), the Offer may not be made directly or indirectly, in or into, or by the use of mails or any means or instrumentality (including, but not limited to, facsimile, e-mail or other electronic transmission, telex or telephone) of interstate or foreign commerce of, or of any facility of a national, state or other securities exchange of any Restricted Jurisdiction and the Offer may not be capable of acceptance by any such use, means, instrumentality or facilities.
The availability of New Wood Group Shares under the Combination to Amec Foster Wheeler Shareholders who are not resident in the United Kingdom or the ability of those persons to hold such shares may be affected by the laws or regulatory requirements of the jurisdiction in which they are resident. Persons who are not resident in the United Kingdom should inform themselves of, and observe, any applicable legal or regulatory requirements.
The New Wood Group Shares may not be offered, sold or delivered, directly or indirectly, in, into or from any Restricted Jurisdiction or to, or for the account or benefit of, any restricted overseas persons (being any Amec Foster Wheeler Shareholders resident in, or nationals or citizens of, Restricted Jurisdictions or who are nominees or custodians, trustees or guardians for, citizens, residents or nationals of such Restricted Jurisdictions) except pursuant to an applicable exemption from, or in a transaction not subject to, applicable securities laws of those jurisdictions. Further details in relation to any Amec Foster Wheeler Shareholders who are resident in, ordinarily resident in, or citizens of, jurisdictions outside the United Kingdom, are contained in the Scheme Document.
Additional information for US investors
Notice to US investors in Amec Foster Wheeler: the Combination relates to the shares of an English company and is being made by means of a scheme of arrangement provided for under English company law. A transaction effected by means of a scheme of arrangement is not subject to the tender offer rules or the proxy solicitation rules under the US Exchange Act, and it is expected that any New Wood Group Shares to be issued pursuant to the Scheme to Amec Foster Wheeler Shareholders would be issued in reliance upon the exemption from the registration requirements under the US Securities Act, provided by Section 3(a)(10) thereof. Under applicable US securities laws, persons (whether or not US persons) who are or will be "affiliates" (within the meaning of Rule 144 of the US Securities Act) of Amec Foster Wheeler or Wood Group prior to, or of Wood Group after, the Effective Date, will be subject to certain transfer restrictions relating to the New Wood Group Shares received in connection with the Combination. Accordingly, the Combination is subject to the disclosure requirements and practices applicable in the United Kingdom to schemes of arrangement which differ from the disclosure requirements of United States tender offer and proxy solicitation rules and the US Securities Act. If, in the future, Wood Group exercises the right to implement the Combination by way of a takeover offer and determines to extend the offer into the United States, the Combination will be made in compliance with applicable United States laws and regulations, including any applicable exemptions under the US Exchange Act. Financial information included in this Announcement and the Scheme Document has been or will have been prepared in accordance with accounting standards applicable in the United Kingdom that may not be comparable to financial information of US companies or companies whose financial statements are prepared in accordance with generally accepted accounting principles in the United States.
The receipt of consideration by a US holder for the transfer of its Amec Foster Wheeler shares pursuant to the Scheme may be a taxable transaction for United States federal income tax purposes and under applicable United States state and local, as well as foreign and other, tax laws. Each Amec Foster Wheeler shareholder is urged to consult his independent professional adviser immediately regarding the tax consequences of the Combination applicable to him.
It may be difficult for US holders of Amec Foster Wheeler shares to enforce their rights and any claim arising out of the US federal laws, since Wood Group and Amec Foster Wheeler are located primarily in a non-US jurisdiction, and some or all of their officers and directors may be residents of a non-US jurisdiction. US holders of Amec Foster Wheeler shares may not be able to sue a non-US company or its officers or directors in a non-US court for violations of the US securities laws. Further, it may be difficult to compel a non-US company and its affiliates to subject themselves to a US court’s judgement.
Securities issued pursuant to the Scheme will not be registered under any US state securities laws and may only be issued to persons resident in a state pursuant to an exemption from the registration requirements of the securities laws of such state.
For the purpose of qualifying for the exemption provided by Section 3(a)(10) of the US Securities Act, Amec Foster Wheeler will advise the Court that its sanctioning of the Scheme will be relied on by Wood Group as an approval of the Scheme following a hearing on its fairness to Amec Foster Wheeler Shareholders, at which Court hearing all Amec Foster Wheeler Shareholders are entitled to attend in person or though counsel to support or oppose the sanctioning of the Scheme and with respect to which notification will be given to all such holders.
In accordance with normal UK practice and, if applicable, pursuant to Rule 14e-5(b) of the US Exchange Act, Wood Group or its nominees, or its brokers (acting as agents), may from time to time make certain purchases of, or arrangements to purchase, Amec Foster Wheeler shares outside of the US, other than pursuant to the Combination, until the date on which the Scheme becomes effective or lapses or is otherwise withdrawn. In addition, in accordance with the City Code, normal United Kingdom market practice and Rule 14e-5(b) of the US Exchange Act, J.P. Morgan Cazenove and Credit Suisse, while serving as financial advisers and brokers to Wood Group, will each continue to act as exempt principal traders in Amec Foster Wheeler shares on the London Stock Exchange. These purchases and activities by exempt principal traders, which may occur either in the open market at prevailing prices or in private transactions at negotiated prices, and are required to be made public in the United Kingdom pursuant to the City Code, will be reported to a Regulatory Information Service and will be available on the London Stock Exchange website at www.londonstockexchange.com.
Publication on website and availability of hard copies
A copy of this Announcement and the documents required to be published by Rule 26 of the City Code will be made available, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, on Wood Group’s website at www.woodgroup.com by no later than 12 noon (London time) on the Business Day following this Announcement. For the avoidance of doubt, the contents of those websites are not incorporated into and do not form part of this Announcement.
Wood Group Shareholders may request a hard copy of this Announcement by: (i) contacting Equiniti during business hours on 0333 207 6546 if calling from the United Kingdom, or +44 121 415 0808 if calling from outside the United Kingdom (lines are open from 8.30am to 5.30pm, Monday to Friday (excluding public holidays in England and Wales)); or (ii) by submitting a request in writing to Equiniti at Equiniti Limited, Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA, United Kingdom. If you have received this Announcement in electronic form, copies of this Announcement and any document or information incorporated by reference into this Announcement will not be provided unless such a request is made. Wood Group Shareholders may also request that all future documents, announcements and information to be sent to them in relation to the Combination should be in hard copy form.
If you are in any doubt about the contents of this Announcement or the action you should take, you are recommended to seek your own independent financial advice immediately from your stockbroker, bank manager, solicitor, accountant or independent financial adviser duly authorised under the Financial Services and Markets Act 2000 (as amended) if you are resident in the United Kingdom or, if not, from another appropriately authorised independent financial adviser.
J.P. Morgan Cazenove
J.P. Morgan Limited, which conducts its UK investment banking business as J.P. Morgan Cazenove (“J.P. Morgan Cazenove”), is authorised and regulated in the United Kingdom by the FCA. J.P. Morgan Cazenove is acting exclusively for Wood Group and no one else in connection with the Combination and the matters set out in this Announcement and will not be responsible to anyone other than Wood Group for providing the protections afforded to clients of J.P. Morgan Cazenove or its affiliates, or for providing advice in relation to the Combination or any other matters referred to in this Announcement.
Credit Suisse
Credit Suisse International (“Credit Suisse”), which is authorised by the Prudential Regulation Authority and regulated by the FCA and PRA in the United Kingdom, is acting as financial adviser exclusively for Wood Group and no one else in connection with the Combination and the matters set out in this Announcement and will not be responsible to anyone other than Wood Group for providing the protections afforded to clients of Credit Suisse, nor for providing advice in relation to the Combination, the content of this Announcement or any matter referred to herein. Neither Credit Suisse nor any of its subsidiaries, branches or affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Credit Suisse in connection with this Announcement, any statement contained herein or otherwise.
Quantified Financial Benefits Statement
The statements in the Quantified Financial Benefits Statement relate to future actions and circumstances which, by their nature, involve risks, uncertainties and contingencies. As a result, the cost savings and synergies referred to may not be achieved, may be achieved later or sooner than estimated, or those achieved could be materially different from those estimated.
No statement in the Quantified Financial Benefits Statement, or this Announcement generally, should be construed as a profit forecast or interpreted to mean that the Combined Group’s earnings in the first full year following the Effective Date, or in any subsequent period, would necessarily match or be greater than or be less than those of Wood Group and/or Amec Foster Wheeler for the relevant preceding financial period or any other period. For the purposes of Rule 28 of the City Code, the Quantified Financial Benefits Statement contained in this Announcement is the responsibility of Wood Group and the Wood Group Directors.
Synergy Numbers
The synergy numbers are unaudited and based on analysis by Wood Group’s management and on Wood Group’s internal records.
Rounding
Certain figures included in this Announcement have been subjected to rounding adjustments.