Business
Further re Offer for Newbury
Further re Offer for Newbury.
About this update from Coats Group Plc
[{"type":"text","content":"\n Guinness Peat Group PLC\n17 January 2008\n\n\n Not for release, publication or distribution, in whole or in part, in, into or\n from the US, Canada or Australia or any jurisdiction where to do so would\n constitute a violation of the laws of such jurisdiction.\n\n\n GPG Acquisitions No. 5 Limited\n\n (a wholly owned subsidiary of Guinness Peat Group plc)\n\n FURTHER RE: CASH OFFER FOR NEWBURY RACECOURSE PLC\n\n17 January 2008\n\nGPG Acquisitions notes the second defence circular, posted on 15 January 2008 by\nNewbury Racecourse. The new information published therein succeeds only in\nemphasizing the attractions for Shareholders of GPG's Offer. In particular:\n\n1. Although not highlighted, the circular discloses current independent \n valuations of Newbury Racecourse's property and business assets and the \n taxation payable on disposal of its surplus land assuming there were no \n rollover relief on future reinvestment. On this basis Newbury Racecourse's\n current pro forma net asset value is £10.55 per Share, some 4 per cent. less\n than GPG's premium Offer of £11 per Share.\n\n2. The Newbury Board's proposed 10 year property development project, when \n compared to the alternative of seeking planning consent and then disposing \n of its surplus land would, even on its own optimistic assumptions, only \n produce an extra 43 pence per Share, or a very marginal 3.3 per cent.\n increase. This pales into insignificance when weighed against the risks \n involved in exposing Newbury Racecourse to the vagaries of the property \n market for an extended period and diversifying into a new area of operation \n in which its relevant management experience is meagre.\n\n3. Shareholders should note that, notwithstanding the Newbury Board's rhetoric \n about the Company's \"potential\", it remains the case that it has been unable \n to confirm that the project will produce net returns to Newbury Racecourse, \n in today's monetary terms, in excess of GPG's criterion of £7 per Share.\n\n4. From the Newbury Board's somewhat evasive comments about current trading, \n Shareholders can only conclude that for 2007 it will report its fifth \n consecutive year of operating losses.\n\nGPG is more convinced than ever that its premium Offer of £11 cash per Newbury\nRacecourse Share provides an attractive alternative to the dubious economics and\ns...