Funds managed or advised by Morgan Stanley Infrastructure Inc. entered into scheme of arrangement to make a recommended offer to acquire Augean plc for approximately £380 million.
Morgan expects that, upon the Scheme becoming Effective, each of the Non-Executive Directors of the Augean Board will resign from their office as a Director of Augean. The Board of Morgan also confirms that, upon the Scheme becoming Effective, the existing contractual and statutory employment rights, including pension rights, of all management and employees of the Augean Group will be fully safeguarded, and envisages that there will be no material change in their conditions of employment or in their balance of the skills and functions. In order to become Effective, the Scheme must be approved by a majority in number of the Scheme Shareholders present and voting (and entitled to vote) at the Court Meeting, either in person or by proxy, representing 75% in value of the Scheme Shares held by those Scheme Shareholders. In addition, the implementation of the Scheme must also be approved by most of the Augean Shareholders at the General Meeting, the sanction of the Scheme by the Court and the Scheme becoming Effective by not later than the Long Stop Date, failing which the Scheme will lapse. The Augean Directors, who have been so advised by Rothschild & Co as to the financial terms of the Offer, consider the terms of the Offer to be fair and reasonable. Accordingly, the Augean Directors intend to recommend unanimously that Augean Shareholders vote, or procure the voting, in favor of the Scheme at the Court Meeting and vote, or procure the voting, in favor of the Resolutions to be proposed at the General Meeting. All Augean Directors who hold interests in Augean Shares have irrevocably undertaken to do, or procure to be done, in respect of their own beneficial holdings of 4,789,732 Augean Shares, in aggregate, representing approximately 4.56% of the Augean Shares in issue on the Latest Practicable Date. In addition to the irrevocable undertakings from the Augean Directors, Morgan has also received irrevocable undertakings from the Harwood Entities, Gresham House Strategic plc and Hargreave Hale Limited (on behalf of Marlborough UK Micro-Cap Growth Fund) to vote, or procure the voting, in favor of the Scheme at the Court Meeting and vote, or procure the voting, in favor of the Resolutions to be proposed at the General Meeting or, if (subject to the terms of the Co-operation Agreement and with the consent of the Panel) Morgan exercises its right to implement the Offer by way of a Takeover Offer, to accept, or procure the acceptance of such Takeover Offer in respect of a total of 25,100,000, 5,870,604 and 12,500,000 Augean Shares, in aggregate, representing approximately 23.91%, 5.59% and 11.91% respectively of the Augean Shares in issue on the Latest Practicable Date. The irrevocable undertakings will cease to be binding, inter alia, if any third party announces an offer in accordance with Rule 2.7 of the Code for the entire issued and to be issued ordinary share capital of Augean and the consideration payable for each Augean Share under such proposal meets set criteria. As of August 24, 2021, the Augean Directors have withdrawn their recommendation of the Morgan Stanley offer and urge Augean Shareholders to take no action in relation to the offer. As of September 8, 2021, the offer has received Augean shareholders approval and sanction by the court. It is intended that the London Stock Exchange will be requested to cancel trading in Augean Shares on AIM on or shortly after the Effective Date. The Scheme is expected to become Effective on September 27, 2021 and long stop date is December 31, 2021. On the basis that neither MSI Bidco nor Eleia Bidco have declared their offers final, such that either offer may be further increased or otherwise revised, a competitive situation continues to exist. Accordingly, the Board of Augean has agreed with the Panel Executive, MSI Bidco and Eleia Bidco an orderly framework for the resolution of this competitive situation by auction procedure by September 21, 2021. As of the end of 1 October 2021, conditions 2(a)(ii) and 2(b)(ii), as set out in the Scheme Document, have not been satisfied. This announcement confirms that the Antwerp Management Limited Auction Offer has now lapsed.
Ravi Gupta and Robert Barnes of N.M. Rothschild & Sons Limited acted as independent financial advisor and fairness provider to the Augean Directors and Augean Plc. Jen Boorer and Rachel Hayes of Singer Capital Markets Advisory LLP acted as nominated advisor to Augean Plc. Charles Montgomerie, Charles Spencer and Thomas Angove of Greenhill & Co. International LLP acted as lead financial advisor and White & Case LLP acted as legal advisor to Morgan Stanley Infrastructure. Tom Mercer, James Fletcher, Harry Thimont, and Nicholas Gardner of Ashurst acted as legal advisor to Augean. Paul Bundred, Lorna Shearin, Harry Le May of Jefferies International Limited acted as financial advisor to Morgan Stanley Infrastructure Inc. in the deal.