Case Studies
Castle Support Services Plc
Deal Type: Rule 3 advice in respect of a recommended cash offer from Sulzer (UK) Holdings Limited (a wholly owned subsidiary of Sulzer Limited)
Deal Size: £127.5 million
In May 2010, Strand Hanson was appointed to advise the board of Castle Support Services plc (“Castle”), the provider of high quality specialist electro-mechanical inspection, maintenance and repair services, on a recommended cash offer by a wholly-owned UK subsidiary of Sulzer Limited (“Sulzer”) for a total consideration of £127.5 million. The Sulzer Group, listed on the SIX Swiss Exchange with a market capitalisation of more than CHF3 billion, specialises in the manufacture of industrial machinery and equipment, surface technology and rotating equipment maintenance. The offer price represented a 70.1% premium to the closing price prior to the announcement by Castle that it had received a number of provisional approaches.
Strand Hanson acted as financial adviser and the mandate included independent advice to the board as to whether the terms of the offer were fair and reasonable, the procurement of irrevocable undertakings from Castle’s major shareholders and assistance in negotiations with both Sulzer and its advisers. The transaction was executed in accordance with a very tight timetable, ahead of anticipated adverse CGT changes in the coalition Government’s Emergency Budget, with the offer being declared wholly unconditional within just one day of launch following the receipt of valid acceptances in respect of more than 94.5% of the issued share capital held outside treasury.
Sibir Energy Plc
Deal Type: Tender Offer by Gazpromneft followed by negotiation of the terms of a recommended offer for minority stakeholders
Deal Size: £327 million + £126.4 million
In May 2009, having previously given advice to Sibir Energy plc (“Sibir” or the “Company”) in relation to a Tender Offer by Gazpromneft valued at £327 million, Strand Hanson advised the Board of Directors of Sibir on the recommended cash offer by Gazpromneft to acquire minority shareholdings in the Company for a total consideration of £126.4 million. The offer valued Sibir’s entire issued share capital at £1.9 billion, making it the largest company listed on AIM by market capitalisation.
Strand Hanson was engaged as financial advisor to the Board of Sibir, and the mandate included detailed valuation analysis, advice to the Independent Board of the Company and negotiation with Gazpromneft and its advisors.
Sibir, has subsequently been de-listed from AIM and is now managed from Moscow.
Solomon Capital Limited
Deal Type: Strategic advice to investor taking a significant stake in a listed PLC
Deal Size: £12 million
In May, 2009 Strand Hanson was engaged to advise Solomon Capital Limited (“Solomon”) on its participation in a placing by Metals Exploration plc (“Metals Exploration” or the “company”) to raise £12 million. The placing took Solomon’s total shareholding in Metals Exploration from 29.9% to 44.1% of its issued share capital.
Strand Hanson provided advice to Solomon prior to the deal, relating to the level of its investment, its second in to Metals Exploration, Takeover Code implications of the investment and the ultimate structure of the underwritten placing.
Strand Hanson successfully negotiated the terms of Solomon’s investment Metals Exploration and its advisors and the following has enabled Metals Exploration to considerably accelerate its business plan.
Celtic Resources Plc
Deal Type: Contested Takeover
Deal Size: £173.0 million
In December, 2008 the Board of Celtic Resources plc (“Celtic” or the “Company”) recommended a cash offer from JSC Severstal (“Severstal”), valuing Celtic at £173.0 million.
Strand Hanson was engaged to advise Celtic, its existing client, on an initial approach from Severstal several months prior to the ultimate announcement of the recommended offer.
Strand Hanson’s mandate included the assessment of the original proposal put to the Company, subsequent valuation and structured negotiations with Severstal and its advisers and liaison with the Irish Takeover Panel.
Negotiations led to a significant increased offer to all Celtic shareholders, at a significant premium to the prevailing price prior to Severstal’s initial approach.
Celtic is now a private company and subsidiary of Severstal, while Strand Hanson is working with the Executive Management team on various other projects.