<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): January 28, 1999
-----------------
TRW Inc.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Ohio 1-2384 34-0575430
------------------ ----------------------- -----------------------
(State or other (Commission File Number) (I.R.S. Employer
jurisdiction of Identification Number)
incorporation)
1900 Richmond Road, Cleveland, Ohio 44124
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(216) 291-7000
N/A
- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE> 2
Item 5. Other Events.
On January 28, 1999, TRW Inc. (the "Registrant") and LucasVarity plc
("LucasVarity") announced that they had reached agreement on the terms of a
recommended cash offer (the "Offer") to be made on behalf of the Registrant to
acquire the entire issued share capital of LucasVarity. Pursuant to the Offer,
which was approved by the board of directors of both companies, the Registrant
will pay 288 pence for each ordinary share (the "Ordinary Shares") of
LucasVarity and pound sterling 28.80 for each American Depositary Share of
LucasVarity, each representing ten Ordinary Shares and evidenced by American
Depositary Receipts for an aggregate value of the issued share capital of Essex
of pound sterling 4.0 billion.
The foregoing description of the Offer is qualified in its entirety by
reference to the Registrant's press release and the press announcement of the
Registrant and LucasVarity both dated January 28, 1999, copies of each of which
are attached as exhibits 99(a) and 99(b) hereto and are incorporated by
reference herein in their entirety.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits
99(a) Registrant's press release dated January 28, 1999.
99(b) Press announcement of the Registrant and LucasVarity plc
dated January 28, 1999.
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TRW INC.
Date: January 28, 1999 By: /s/ David B. Goldston
---------------------
David B. Goldston
Assistant General Counsel and
Assistant Secretary
<PAGE> 4
EXHIBIT INDEX
Exhibit No.
99(a) Registrant's press release dated January 28, 1999.
99(b) Press announcement of the Registrant and LucasVarity plc dated
January 28, 1999.
<PAGE> 1
Exhibit 99(a)
[TRW LOGO] [LUCASVARITY PLC LOGO]
FOR IMMEDIATE RELEASE
TRW INC. TO ACQUIRE LUCASVARITY PLC
CREATING WORLD'S PREMIER INDEPENDENT AUTOMOTIVE SUPPLIER
-$7.0 billion cash tender offer values LucasVarity plc at 288p per share-
- - The combination of TRW and LucasVarity creates a global supplier of high
technology and superior quality systems and services with nearly $19
billion in revenue that will deliver immediate returns to shareholders and
pave the way for rapid growth in all of its global automotive markets
- - In automotive, TRW will be a global leader in integrated vehicle control
systems and modules (which include steering, suspension, anti-lock brakes,
traction control and active vehicle stability) to pair with its leading
positions in occupant restraint safety systems
- - The technological capabilities and customer base of TRW's space, defense
and information technology businesses will be enhanced with the addition of
the LucasVarity aerospace business
- - TRW will add considerably to its superior financial, technological and
operational scale
- - The transaction is expected to be accretive to earnings per share even
before the benefits of synergies in 1999 (excluding one time deal costs)
- - TRW believes that cost savings opportunities are expected to exceed $200
million annually by the end of 2001
- - TRW is committed to strong investment grade debt ratings and to maintaining
financial flexibility
CLEVELAND, OHIO, and LONDON, ENGLAND, January 28, 1999 - TRW Inc. (NYSE: TRW,
LSE: TRW) and LucasVarity plc (NYSE: LVA, LSE: LVA) today jointly announced that
TRW will launch an all-cash tender offer to acquire all of the outstanding
common shares of LucasVarity in a transaction that values LucasVarity at
approximately $7.0 billion. This is the
- more -
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2
largest cash acquisition in the history of the automotive supply industry. The
offer, at 288p per share (approximately $47.35 per ADR) represents a premium of
41% over the closing share price of LucasVarity on December 31, 1998.TRW has
received fully underwritten financing from J.P. Morgan, Bank of America, and
Citibank.
The Boards of Directors of both companies have approved the transaction and
LucasVarity's Board of Directors has entered into irrevocable undertakings to
support it. The transaction, which is subject to normal closing conditions, is
expected to close in the second quarter of this year.
The transaction is expected to be immediately accretive (excluding one-time deal
costs). Cost saving synergies are expected to exceed $200 million annually by
2001. With total revenues of nearly $19 billion, the combined entity will be an
industry leader in integrated vehicle control systems and modules (which include
steering, suspension, anti-lock brakes, traction control and active vehicle
stability). TRW is already the global leader in most of its automotive products
including occupant restraint safety systems (airbags, seat belts, crash sensors,
and "smart" systems).
Mr. Joseph T. Gorman, Chairman and CEO of TRW said: "This transaction is a great
fit for our automotive business and gives us the scale to be a leader in
integrated vehicle control systems and modules. Specifically, it enables the
integration of TRW's steering and suspension businesses with LucasVarity's
braking business into the next generation of vehicle control systems. In
addition, the combination of our electronics businesses provides global scale to
accelerate growth. This unique opportunity allows us to take a leadership role
responding to
- more -
<PAGE> 3
3
global outsourcing trends in the industry. LucasVarity's strong aerospace
business extends the technological capabilities and customer base of our space,
defense and information technology businesses, and adds significantly to our
breadth. Finally, we are financing the transaction with cash and are committed
to maintaining strong investment grade debt ratings."
Mr. Gorman added, "I'm delighted to welcome Victor Rice and his associates to
TRW. Everybody involved in this transaction shares the same strategic vision and
commitment to drive this company forward. Together we will make the enlarged
group far more than its individual constituent parts."
Mr. Victor Rice, CEO of LucasVarity, will be named Vice Chairman of TRW and head
of the combined automotive operations, reporting to Mr. Gorman. He is expected
to be elected a director of the company.
"This all-cash offer is an excellent transaction for our shareholders," stated
Mr. Edmund Wallis, Chairman of LucasVarity. "The benefits of the two companies'
complementary products and services are reflected in the full and fair price we
have received for LucasVarity."
Mr. Rice said, "For our employees, this represents a tremendous opportunity to
become part of a dynamic global leader in technology, manufacturing and service.
My colleagues and I look forward to working closely with Joe and his team to
realize the great potential our two companies offer each other and the customers
we serve."
J. P. Morgan & Co. Incorporated acted as advisor to TRW while the Lazard Houses
and Rosenfeld & Company advised LucasVarity.
- more -
<PAGE> 4
4
TRW Inc. is headquartered in Cleveland, Ohio, with plants across North America
and Europe. The company has $11.9 billion of sales, of which $7.2 billion are
derived from the automotive industry with $4.7 billion from space, defense and
information systems. Its key products include occupant restraint systems; power
rack and pinion steering; electronics, engine valves and fastening systems.
LucasVarity plc is a UK company with shares traded in London and, in the form of
ADRs, on the New York Stock Exchange. The company has $6.8 billion of sales,
$5.6 billion of which are derived from the automotive industry and $1.2 billion
from aerospace.
Certain statements contained in this press release, particularly those regarding
synergies, future performance and costs, depend on certain events, risks and
uncertainties that may be outside of the companies' control. Additional
information concerning factors that could cause actual results to differ
materially from the forward looking statements are discussed in the companies'
Form 10-K and other reports filed with the Securities and Exchange Commission.
More information on the acquisition and both companies is available on the TRW
Inc. web site at www.trw.com and the LucasVarity plc web site at
www.lucasvarity.com
Contacts: TRW Inc. LucasVarity plc
-------- ---------------
Larry Edelman (Investors) Joe Cantie (Investors)
+1 216 291-7506 +44 171 647 0520
Jay McCaffrey (Media) Nick Jones (Media)
+1 216 291-7179 +1 212 688-6840
Owen Blicksilver (Media)
Dewe Rogerson
+1 212 419-4283
<PAGE> 1
Exhibit 99(b)
28 January, 1999
Not for release, publication or distribution in or into Canada, Australia or
Japan.
TRW INC.
RECOMMENDED CASH OFFER
FOR
LUCASVARITY PLC
- - TRW and LucasVarity announce a recommended cash offer to be made by
J.P. Morgan on behalf of a wholly-owned subsidiary of TRW to acquire
the entire issued share capital of LucasVarity at 288p per LucasVarity
Share and (pound)28.80 per LucasVarity ADS.
- - The Offer values the entire issued share capital of LucasVarity at
(pound)4.0 billion.
- - The Offer represents a 1.5 per cent. premium over the middle market
price of 283.8p per LucasVarity Share on the London Stock Exchange at
the close of business on 27 January, 1999, the last business day prior
to the date of this announcement, and a 33.8 per cent. premium over the
middle market price of 215.3p per LucasVarity Share at the close of
business on 5 January, 1999, the last business day prior to the
announcement by LucasVarity concerning a possible business combination.
- - The Offer represents an exit price earnings multiple of 18.0 times
LucasVarity's earnings per share before exceptional items under UK GAAP
for the year ended 31 January, 1998 and a multiple of 22.7 times
LucasVarity's basic earnings per share under US GAAP for the year ended
31 January, 1998.
- - Directors of LucasVarity have irrevocably undertaken to accept the
Offer in respect of their holdings of LucasVarity Securities.
Mr. Victor Rice, CEO of LucasVarity, will be named Vice Chairman of TRW
and head of the combined automotive operations. He is expected to be
elected a Director of TRW.
- - LucasVarity and TRW have entered into an agreement which provides for
payment of a termination fee of (pound)30.0 million ($49.8 million) to
TRW in certain circumstances.
- - Holders of LucasVarity Shares (other than US Persons and certain other
overseas shareholders) may elect to receive Loan Notes as an
alternative to the cash consideration.
Commenting on the Offer, Joe Gorman, Chairman of TRW, said today:
1
<PAGE> 2
"This transaction is a great fit for our automotive business and gives us the
scale to be a leader in integrated vehicle control systems and modules.
Specifically, it enables the integration of TRW's steering and suspension
businesses with LucasVarity's braking business into the next generation of
vehicle control systems. In addition, the combination of our electronics
businesses provides global scale to accelerate growth. This unique opportunity
allows us to take a leadership role responding to global outsourcing trends in
the industry. LucasVarity's strong aerospace business extends the technological
capabilities and customer base of our space, defense and information technology
businesses, and adds significantly to our breadth. Finally, we are financing
the transaction with cash and are committed to maintaining strong investment
grade debt ratings".
Ed Wallis, Chairman of LucasVarity said:
"This all-cash offer is an excellent transaction for our shareholders." "The
benefits of the two companies' complementary products and services are reflected
in the full and fair price we have received for LucasVarity."
Victor Rice said:
"For our employees, this represents a tremendous opportunity to become part of a
dynamic global leader in technology, manufacturing and service. My colleagues
and I look forward to working closely with Joe and his team to realise the great
potential our two companies offer each other and the customers we serve."
This summary should be read in conjunction with the attached announcement.
<TABLE>
<CAPTION>
PRESS ENQUIRIES:
<S> <C>
TRW Inc.
Larry Edelman + 1 216 291 7506
J.P. Morgan
Sarah Nash (New York) + 1 212 483 2323
Daniel Chamier (London) + 44 171 600 2300
Citigate Dewe Rogerson
Richard Simonelli (New York) + 1 212 688 6840
Martin Jackson (London) + 44 171 638 9571
LucasVarity plc
Joseph Cantie (Investors) +44 171 647 0520
Nicholas Jones (Media) + 44 171 647 0617
Lazard Brothers & Co., Limited + 44 171 588 2721
Marcus Agius
Julian Goodwin
</TABLE>
2
<PAGE> 3
J.P. Morgan, which is regulated in the UK by The Securities and Futures
Authority Limited, is acting for TRW and no one else in connection with the
Offer and will not be responsible to anyone other than TRW for providing the
protections afforded to customers of J.P. Morgan or for giving advice in
relation to the Offer.
Lazard Brothers & Co., Limited, which is regulated in the UK by The Securities
and Futures Authority Limited, is acting for LucasVarity and no one else in
connection with the Offer and will not be responsible to anyone other than
LucasVarity for providing the protections afforded to customers of Lazard
Brothers & Co., Limited or for giving advice in relation to the Offer.
The Offer (including the Loan Note Alternative) is not being made, directly or
indirectly, in or into Canada, Australia or Japan. Accordingly, neither copies
of this announcement nor any related Offer documentation are to be mailed or
otherwise distributed or sent in or into Canada, Australia or Japan.
The Loan Notes that may be issued pursuant to the Offer will not be listed on
any stock exchange and have not been, and will not be, registered under the US
Securities Act of 1933, as amended, nor under any relevant securities laws of
any state of the US and the relevant clearances will not be obtained from the
regulatory authority of any province or territory of Canada. The Loan Notes are
not being offered, sold or delivered, directly or indirectly, to US Persons or
into Canada, Australia or Japan, or into any other jurisdiction if to do so
would constitute a violation of relevant laws in such jurisdiction.
These press-related materials are not an extension of a tender offer in the US
for LucasVarity Securities. TRW intends to extend the tender offer in the US at
some future time and will satisfy the procedural and filing requirements of the
Williams Act of the US securities laws at that time to the extent applicable
thereto.
TRW cautions that certain forward-looking statements contained in this
announcement or other statements which may be made about the transaction,
including, without limitation, the effect of the combination of TRW and
LucasVarity on TRW's earnings and cash flows, are qualified by important factors
that could cause actual operating results to differ materially from those
described herein or any such statements, including, among others, the following,
in addition to factors that affect other companies in the businesses of TRW and
LucasVarity or that are referred to in their periodic reports to shareholders or
public filings: (i) unanticipated events and circumstances may occur rendering
the transaction less beneficial to TRW than anticipated; (ii) TRW and
LucasVarity face intense competition in their markets and there is, accordingly,
no guarantee that after consummation of the transaction TRW will achieve the
expected financial and operating results and synergies; and (iii) the ability of
TRW and LucasVarity to integrate successfully their operations and thereby
achieve the anticipated cost savings and be in a position to take advantage of
potential opportunities for growth. Results actually achieved may differ
materially from the expected results described herein or any such statements.
TRW hereby undertakes no obligation to update any forward looking statement.
3
<PAGE> 4
28 January, 1999
Not for release, publication or distribution in or into Canada, Australia or
Japan.
TRW INC.
RECOMMENDED CASH OFFER
FOR
LUCASVARITY PLC
INTRODUCTION
The Boards of TRW and LucasVarity announce that agreement has been reached on
the terms of a recommended cash offer to be made by J.P. Morgan on behalf of a
wholly-owned subsidiary of TRW to acquire the entire issued and to be issued
share capital of LucasVarity.
The Offer of 288p for each LucasVarity Share and (pound)28.80 for each
LucasVarity ADS values the entire issued share capital of LucasVarity at
(pound)4.0 billion.
IRREVOCABLE UNDERTAKINGS
The Directors of LucasVarity have irrevocably undertaken to accept the Offer in
respect of their holdings of LucasVarity Securities, amounting in aggregate to
464,572 LucasVarity Securities, representing 0.03 per cent.
of LucasVarity's issued share capital.
LUCASVARITY RECOMMENDATION
The Directors of LucasVarity, other than Mr. R.M. Gates for the reason set out
below, who have been so advised by Lazard Brothers & Co., Limited, consider the
terms of the Offer to be fair and reasonable and will recommend that holders of
LucasVarity Securities accept the Offer. In providing advice to the Directors of
LucasVarity, Lazard Brothers & Co., Limited has taken into account such
Directors' commercial assessments.
The recommendation to accept the Offer comes from the Directors of LucasVarity
excluding Mr. R.M. Gates who, due to his role as a Director of both LucasVarity
and TRW has not participated in any discussions or decisions of the Boards of
LucasVarity or TRW in relation to the Offer.
4
<PAGE> 5
THE OFFER
The Offer, which will be subject to the conditions and further terms set out in
Appendix I and to be set out in the Offer Document, will be made on the
following basis:
for each LucasVarity Share 288p in cash
for each LucasVarity ADS (pound)28.80 in cash
The Offer represents a premium of 1.5 per cent. over the middle market price of
a LucasVarity Share of 283.8p prevailing at the close of business on 27 January,
1999, the last business day prior to the date of this announcement, and a 33.8
per cent. premium over the middle market price of 215.3p per LucasVarity Share
at the close of business on 5 January, 1999, the last business day prior to the
announcement by LucasVarity concerning a possible business combination. The
Offer represents a multiple of 18.0 times LucasVarity's earnings per share
before exceptional items of 16.0p per LucasVarity Share for the year ended 31
January 1998 under UK GAAP, and a multiple of 22.7 times LucasVarity's basic
earnings per share of 12.7p for the same period under US GAAP.
TRW and LucasVarity have entered into an arrangement under which LucasVarity has
agreed to pay a fee of (pound)30.0 million ($49.8 million) to TRW in the event
of the occurrence of any one of certain specified events, including the lapse or
withdrawal of the Offer by reason of a competing offer recommended by the
LucasVarity Directors or by reason of the LucasVarity Directors withdrawing or
modifying their approval of the Offer.
The Offer will be subject to the applicable requirements of both the City Code
in the UK and US federal securities laws, except to the extent that exemptive
relief from the US federal securities laws has been granted by the SEC.
The LucasVarity Shares will be acquired by the Offeror under the Offer fully
paid and free from all liens, equities, charges, encumbrances, rights of
preemption and other third party rights or interests of any nature whatsoever
and together with all rights now or hereafter attaching thereto, including the
right to receive and retain in full all dividends and other distributions
declared, made or paid hereafter.
THE LOAN NOTE ALTERNATIVE
Accepting LucasVarity Shareholders (other than US Persons and certain overseas
shareholders) will be entitled to elect to receive Loan Notes to be issued by
the Offeror instead of some or all of the cash consideration which would
otherwise be receivable under the Offer on the following basis:
for every (pound)1 of cash consideration (pound)1 nominal of Loan Notes
The Loan Notes will be issued, credited as fully paid, in multiples of (pound)1
nominal amount. Fractional entitlements to Loan Notes will be disregarded. The
Loan Notes will bear interest from the date on which the Offer becomes or is
declared unconditional in all respects at a rate of 1 per cent per annum below
LIBOR for six month sterling deposits, as certified by J.P. Morgan, payable six
monthly in
5
<PAGE> 6
arrears. The Loan Notes will be transferable, but no application will be made
for them to be listed or dealt in on any stock exchange. The Loan Notes will be
redeemable at the holder's option, in part or in whole, on 30 June, 2000 and at
the end of every six month period thereafter, and any Loan Notes not previously
repaid, redeemed or purchased will be repaid in full at par on 31 December,
2003.
J.P. Morgan has advised that, based on current market conditions, its estimate
of the value of the Loan Notes, if they had been in issue on 27 January, 1999,
would have been approximately 98.5p per (pound)1 in nominal value.
If valid elections for the Loan Note Alternative do not require the issue of
Loan Notes exceeding (pound)10 million in nominal value of Loan Notes, no Loan
Notes will be issued unless TRW determines otherwise, and LucasVarity
Shareholders who have elected for the Loan Note Alternative will then receive
cash in accordance with the terms of the Offer.
The obligations of the Offeror as the issuer of the Loan Notes will be
guaranteed by TRW. In considering the Loan Note Alternative, LucasVarity
Shareholders should note that, except for the guarantee of the Loan Notes by
TRW, the Loan Notes will not be guaranteed or secured and the terms of the Loan
Notes will not prohibit or limit the TRW Group from incurring other indebtedness
or taking other actions which could affect the value of the Loan Notes or
require TRW to effect a repurchase offer, redemption or other action if TRW
effects certain transactions.
The Loan Note Alternative will be conditional upon the Offer becoming or being
declared unconditional in all respects and will remain open for so long as the
Offer remains open for acceptance. A summary of the principal terms of the Loan
Notes is set out in Appendix II.
REASONS FOR THE OFFER
The automotive components industry is consolidating rapidly and TRW believes
that the leading participants in the industry will be those capable of
delivering superior technology and systems on a global basis to customers who
increasingly require total systems solutions. TRW believes that the combination
of TRW and LucasVarity creates one of the world's pre-eminent automotive
organisations, capable of providing its customers globally with state-of-the-art
engineering and manufacturing capabilities, as well as strengthening their
aerospace businesses. TRW expects to achieve in excess of $200 million in annual
cost saving synergies by 2001 and the transaction to be immediately accretive to
TRW's earnings per share.
OPTIONS UNDER THE LUCASVARITY SHARE OPTION SCHEMES
The Offer will extend to any LucasVarity Shares which are unconditionally
allotted or issued while the Offer remains open for acceptance (or such earlier
date as TRW may, subject to the City Code, decide), pursuant to the exercise of
options under the LucasVarity Share Option Schemes.
Appropriate proposals will, in due course, be put to the holders of options who
do not, or who are unable to, exercise the options granted to them under the
LucasVarity Share Option Schemes once the Offer becomes or is declared
unconditional in all respects.
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<PAGE> 7
HOLDINGS IN LUCASVARITY SHARES
Except for Mr. R.M. Gates, who owns 1,701 LucasVarity ADSs and who holds options
over 124,200 LucasVarity Shares, neither TRW, nor any of its Directors nor, so
far as TRW is aware, any person acting in concert with TRW, owns or controls any
LucasVarity Securities or has any option to acquire any LucasVarity Securities,
or has entered into any derivative referenced to LucasVarity Securities which
remain outstanding or (other than as disclosed above) has received any
irrevocable commitment to accept the Offer.
INFORMATION ON LUCASVARITY
The LucasVarity Group designs, manufactures and supplies advanced technology
systems, products and services in the world's automotive and aerospace
industries. It is one of the ten largest independent automotive suppliers in the
world by turnover.
It is a major producer of braking systems and components for cars and light
trucks and of fuel injection systems for the diesel engine industry including
cars, vans, trucks and off-highway and industrial applications. It is also a
major producer of electrical and electronic systems for the automotive industry
and is a leading provider of after-market products and services.
The LucasVarity Group's aerospace division provides the global aerospace
industry with high integrity systems in engine controls, electrical power
generation and management, flight controls and cargo handling, all backed by a
worldwide customer support operation.
For the year ended 31 January, 1998, the LucasVarity Group reported profit
before tax and exceptional items of (pound)329 million on turnover of
(pound)4,681 million. The LucasVarity Group's net income for the year was
(pound)209 million under UK GAAP, and (pound)180 million under US GAAP. As at 31
January, 1998, the LucasVarity Group had shareholder's equity of (pound)458
million under UK GAAP and (pound)2,184 million under US GAAP. As at 31 December,
1998, LucasVarity and its subsidiaries employed approximately 51,000 employees.
For the quarter ended 31 October, 1998, the LucasVarity Group reported turnover
of (pound)1,033 million and profit before tax of (pound)71 million. Under UK
GAAP net income for the quarter was (pound)42 million, and under US GAAP net
income was (pound)57 million. Shareholder's equity under UK GAAP was
(pound)1,048 million, and was (pound)2,286 million under US GAAP.
Based on a closing middle market price of 283.8p on the London Stock Exchange on
27 January, 1999 (the last business day prior to the date of this announcement),
LucasVarity had a market capitalisation of (pound)4.0 billion.
INFORMATION ON TRW
TRW is an international company which designs, manufactures and sells products
and provides systems engineering, research and technical services for industry
and the US government in two industry segments: Automotive and Space, Defense &
Information Systems. TRW's principal services and products include automotive
systems and components; spacecraft; software and systems engineering support
services; and electronic systems, equipment and services.
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<PAGE> 8
For the year ended 31 December, 1998, TRW generated revenues of US$11,886
million and income before taxes of US$746 million. As at 31 December, 1998, TRW
had net assets, under US GAAP, of US$1,913 million.
TRW's common stock is listed on the New York, Chicago, Pacific, Philadelphia,
London and Frankfurt stock exchanges. As at the close of trading on the New York
Stock Exchange on 27 January, 1999 (the last business day prior to the date of
this announcement) TRW had a market capitalisation of US$ 6.1 billion.
MANAGEMENT AND EMPLOYEES
Mr Victor Rice, CEO of LucasVarity, will be named Vice Chairman of TRW and head
of the combined automotive operations, reporting to Mr Gorman. He is expected to
be elected a Director of TRW.
The Board of TRW confirms that the existing employment rights, including pension
rights, of all employees will not be adversely affected by reason of the Offer.
OFFER DOCUMENTATION
J.P. Morgan, on behalf of the Offeror, will despatch the Offer document to
LucasVarity Shareholders as soon as practicable.
GENERAL
(a) The Offer will be subject to the applicable requirements of both the
City Code and US federal securities laws, except to the extent that
exemptive relief from the US federal securities laws is granted by the
SEC.
(b) The availability of the Offer to persons not resident in the UK or the
US may be affected by the laws of the relevant jurisdiction. Any
persons who are subject to the laws of any jurisdiction other than the
UK or the US should inform themselves about and observe any applicable
requirements.
(c) The Offer will be open for at least 20 business days from the date of
the Offer Document.
(d) It is TRW's intention, following the Offer becoming or being declared
unconditional in all respects and subject to applicable requirements of
the London and New York stock exchanges, that LucasVarity should apply
to those exchanges for the LucasVarity Shares and LucasVarity ADSs
respectively to be delisted. Delisting would significantly reduce the
liquidity and marketability of any LucasVarity Shares and LucasVarity
ADSs not assented to the Offer.
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<PAGE> 9
(e) This announcement does not constitute an invitation to purchase any
securities.
(f) The definitions of certain expressions used in this announcement are
contained in Appendix III.
<TABLE>
<CAPTION>
PRESS ENQUIRIES:
<S> <C>
TRW Inc. + 1 216 291 7506
Larry Edelman
J.P. Morgan
Sarah Nash (New York) + 1 212 483 2323
Daniel Chamier (London) + 44 171 600 2300
Citigate Dewe Rogerson
Richard Simonelli (New York) + 1 212 688 6840
Martin Jackson (London) + 44 171 638 9571
LucasVarity
Joseph Cantie (Investors) +44 171 647 0520
Nicholas Jones (Media) + 44 171 647 0617
Lazard Brothers & Co., Limited + 44 171 588 2721
Marcus Agius
Julian Goodwin
</TABLE>
J.P. Morgan, which is regulated in the UK by The Securities and Futures
Authority Limited, is acting for TRW and no one else in connection with the
Offer and will not be responsible to anyone other than TRW for providing the
protections afforded to customers of J.P. Morgan or for giving advice in
relation to the Offer.
Lazard Brothers & Co., Limited, which is regulated in the UK by The Securities
and Futures Authority Limited, is acting for LucasVarity and no one else in
connection with the Offer and will not be responsible to anyone other than
LucasVarity for providing the protections afforded to customers of Lazard
Brothers & Co., Limited or for giving advice in relation to the Offer.
The Offer (including the Loan Note Alternative) is not being made, directly or
indirectly, in or into, Canada, Australia or Japan. Accordingly, neither copies
of this announcement nor any related Offer documentation are to be mailed or
otherwise distributed or sent in or into Canada, Australia or Japan.
The Loan Notes that may be issued pursuant to the Offer will not be listed on
any stock exchange and have not been, and will not be, registered under the US
Securities Act of 1933, as amended, nor under any relevant securities laws of
any state of the US and the relevant clearances will not be obtained from the
regulatory authority of any province or territory of Canada. The Loan Notes are
not being offered, sold or delivered, directly or indirectly, to US Persons or
into Canada, Australia or Japan, or into any other jurisdiction if to do so
would constitute a violation of relevant laws in such jurisdiction.
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These press-related materials are not an extension of a tender offer in the US
for LucasVarity Securities. TRW intends to extend the tender offer in the US at
some future time and will satisfy the procedural and filing requirements of the
Williams Act of the US securities laws at that time to the extent applicable
thereto.
TRW cautions that certain forward looking statements contained in this
announcement or other statements which may be made about the transaction,
including, without limitation, the effect of the combination of TRW and
LucasVarity on TRW's earnings and cash flows, are qualified by important factors
that could cause actual operating results to differ materially from those
described herein or any such statements, including, among others, the following,
in addition to factors that affect other companies in the businesses of TRW and
LucasVarity or that are referred to in their periodic reports to shareholders or
public filings: (i) unanticipated events and circumstances may occur rendering
the transaction less beneficial to TRW than anticipated; (ii) TRW and
LucasVarity face intense competition in their markets and there is, accordingly,
no guarantee that after consummation of the transaction TRW will achieve the
expected financial and operating results and synergies; and (iii) the ability of
TRW and LucasVarity to integrate successfully their operations and thereby
achieve the anticipated cost savings and be in a position to take advantage of
potential opportunities for growth. Results actually achieved thus may differ
materially from the expected results described herein or any such statements.
TRW hereby undertakes no obligation to update any forward looking statement.
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APPENDIX I
CONDITIONS OF THE OFFER
The Offer, which will be made by J.P. Morgan on behalf of the Offeror, will
comply with the applicable rules and regulations of the London Stock Exchange
and the City Code and with US federal securities laws (except to the extent that
exemptive relief has been granted by the SEC). In addition, the Offer will be
governed by English law and will be subject to the jurisdiction of the courts of
England and will be made on the terms and conditions set out in the Offer
Document and related Acceptance Forms.
The Offer will be subject to the following conditions:
(a) valid acceptances being received (and not, where permitted, withdrawn) by
the First Closing Date of the Offer (or such later time(s) and/or date(s)
as Offeror may, with the consent of the Panel or in accordance with the
rules of the City Code, decide) in respect of not less than 90 per cent.
(or such lower percentage as Offeror may decide) in nominal value of
LucasVarity Securities to which the Offer relates, provided that this
condition will not be satisfied unless Offeror and/or its wholly-owned
subsidiaries shall have acquired or agreed (unconditionally or subject
only to conditions which will be fulfilled upon the Offer becoming or
being declared unconditional in all respects) to acquire (whether
pursuant to the Offer or otherwise) LucasVarity Securities carrying, in
aggregate, more than 50 per cent. of the voting rights then normally
exercisable at general meetings of LucasVarity, including for this
purpose (to the extent, if any, required by the Panel) any such voting
rights attaching to any LucasVarity Securities that are unconditionally
allotted or issued before the Offer becomes or is declared unconditional
as to acceptances, whether pursuant to the exercise of any outstanding
subscription or conversion rights or otherwise, and for this purpose:
(i) the expression "LucasVarity Securities to which the Offer
relates" shall be construed in accordance with sections 428 to
430F of the Companies Act 1985;
(ii) LucasVarity Securities which have been unconditionally
allotted shall be deemed to carry the voting rights which they
will carry upon their being entered in the register of members
of LucasVarity; and
(iii) valid acceptances shall be treated as having been received in
respect of any LucasVarity Securities which the Offeror shall,
pursuant to section 429(8) of the Companies Act 1985, be
treated as having acquired or contracted to acquire by virtue
of acceptances of the Offer,
provided that, unless Offeror otherwise determines, this condition (a)
can only be treated as satisfied at a time when all of the other
conditions in paragraphs (b) to (i) inclusive are either satisfied or
(if capable of waiver) waived;
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(b) no Relevant Authority having intervened in a manner which would or
might reasonably be expected to:
(i) make the Offer, its implementation or the acquisition or
proposed acquisition by The Offeror or any member of the Wider
Offeror Group of any shares or other securities in, or control
of, LucasVarity void, illegal and/or unenforceable in or under
the laws of any relevant jurisdiction, or otherwise directly
or indirectly materially restrain, prevent, prohibit, restrict
or delay the Offer or such acquisition or impose additional
materially adverse conditions or obligations with respect to
the Offer or such acquisition, or otherwise materially impede,
challenge or interfere with the Offer or such acquisition, or
require material amendment to the terms of the Offer or the
proposed acquisition of any LucasVarity Securities or the
acquisition of control of LucasVarity by the Offeror;
(ii) require, restrain, prevent, prohibit, restrict or delay the
divestiture by any member of the Wider TRW Group of any shares
or other securities (or the equivalent) in LucasVarity where
the same is materially adverse to the TRW Group;
(iii) require, restrain, prevent, prohibit, restrict or delay the
divestiture by any member of the Wider TRW Group or by any
member of the Wider LucasVarity Group of all or any portion of
their respective businesses, assets or properties or impose
any limitation on the ability of any of them to conduct any of
their respective businesses or to own any of their respective
assets or properties or any part thereof (in any case to an
extent which is material in the context of the TRW Group or
the LucasVarity Group, as the case may be, taken as a whole);
(iv) impose any limitation on, or result in a delay in, the ability
of any member of the Wider TRW Group or any member of the
Wider LucasVarity Group to acquire or to hold or to exercise
effectively, directly or indirectly, all or any rights of
ownership in respect of shares or other securities (or the
equivalent) in, or to exercise management control over, any
member of the Wider TRW Group or any member of the Wider
LucasVarity Group (in any case to an extent which is material
in the context of the TRW Group or the LucasVarity Group, as
the case may be, taken as a whole);
(v) save pursuant to the Offer or Part XIII of the Companies Act
1985, require any member of the Wider TRW Group or the Wider
LucasVarity Group to acquire, or to offer to acquire, any
shares or other securities (or the equivalent) in any member
of the Wider TRW Group or any member of the Wider LucasVarity
Group owned by any third party (in any case to an extent which
is material in the context of the TRW Group or the LucasVarity
Group, as the case may be, taken as a whole);
(vi) impose any limitation on the ability of any member of the
Wider TRW Group or any member of the Wider LucasVarity Group
to integrate or co-ordinate its business, or any material part
of it, with the businesses of any other member of the Wider
TRW Group or the Wider LucasVarity Group (in any case to an
extent which is material in the context of the TRW Group or
the LucasVarity Group, as the case may be, taken as a whole);
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(vii) result in any member of the Wider TRW Group or the Wider
LucasVarity Group ceasing to be able to carry on business
under any name under which it presently does so (the
consequences of which would be material in the context of the
TRW Group or the LucasVarity Group, as the case may be, taken
as a whole;
(viii) otherwise adversely affect any or all of the businesses,
assets, profits or prospects of any member of the Wider
LucasVarity Group or any member of the Wider TRW Group (in any
case to an extent which is material in the context of the TRW
Group or the LucasVarity Group, as the case may be, taken as a
whole).
and all applicable waiting and other time periods during which any
Relevant Authority could intervene in such a way under the laws of any
relevant jurisdiction having expired, lapsed or been terminated;
(c)
(i) the European Commission indicating in terms satisfactory to
Offeror that it does not intend to initiate proceedings under
Article 6(1)(c) of Council Regulation (EEC) 4064/89, as
amended (the "Regulation") in respect of the proposed
acquisition of LucasVarity by Offeror or any matters arising
therefrom and that in any event there will not be a referral
to a competent authority or a dealing with the proposed
acquisition of LucasVarity by Offeror by the European
Commission pursuant to Article 9(1) of the Regulation; and
(ii) all necessary filings having been made and all or any
applicable waiting periods (including any extensions thereof)
under the US Hart-Scott-Rodino Antitrust Improvements Act 1976
and the regulations thereunder having expired, lapsed or been
terminated as appropriate in each case in respect of the
proposed acquisition of LucasVarity by Offeror or any matters
arising therefrom;
(d)
(i) all necessary notifications and filings having been made, all
necessary waiting and other time periods under any applicable
legislation or regulation of any relevant jurisdiction having
expired, lapsed or been terminated, all necessary governmental
approvals or authorizations under any applicable legislation
or regulation of any relevant jurisdiction having been
obtained, and all statutory or regulatory obligations in any
relevant jurisdiction having been complied with in each case
in connection with the Offer or the acquisition of any shares
or other securities (or the equivalent) in, or control of,
LucasVarity or any other member of the Wider LucasVarity Group
by any member of the Wider TRW Group; and
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(ii) all Authorisations necessary in any relevant jurisdiction for
or in respect of the Offer or the acquisition or proposed
acquisition of any shares or other securities (or the
equivalent) in, or control of, LucasVarity or any other member
of the Wider LucasVarity Group by any member of the Wider TRW
Group or the carrying on by any member of the Wider
LucasVarity Group of its business (where the absence of such
Authorisation would have an adverse effect which is material
to the LucasVarity Group taken as a whole) having been
obtained, in terms and in a form reasonably satisfactory to
Offeror, from all appropriate Relevant Authorities and all
such Authorisations remaining in full force and effect at the
time when the Offer becomes otherwise unconditional in all
respects and there being no notice or intimation of any
intention to revoke or not to renew any of the same;
(e) there being no provision of any arrangement, agreement, licence,
permit, franchise or other instrument to which any member of the Wider
LucasVarity Group is a party, or by or to which any such member or any
of its assets is or are or may be bound, entitled or subject or any
circumstance, which, in each case in consequence of the Offer or the
acquisition or proposed acquisition of any shares or other securities
(or the equivalent) in, or control of, LucasVarity or any other member
of the Wider LucasVarity Group by any member of the Wider TRW Group or
otherwise, would or might reasonably be expected to result in which, in
any case,would be material in the context of the LucasVarity Group
taken as a whole:
(i) any monies borrowed by or any other indebtedness or
liabilities, actual or contingent, of, or grant available to,
any member of the Wider LucasVarity Group being or becoming
repayable or capable of being declared repayable immediately
or prior to its stated repayment date, or the ability of any
member of the Wider LucasVarity Group to borrow monies or to
incur any indebtedness being withdrawn or inhibited or
becoming capable of being withdrawn;
(ii) the creation or enforcement of any mortgage, charge or other
security interest over the whole or any part of the business,
property, assets or interests of any member of the Wider
LucasVarity Group or any such mortgage, charge or other
security interest becoming enforceable;
(iii) any such arrangement, agreement, licence, permit, franchise or
instrument which is, or the rights, liabilities, obligations
or interests of any member of the Wider LucasVarity Group
thereunder, being, or becoming capable of being, terminated or
adversely modified or affected or any adverse action being
taken or any obligation or liability arising thereunder;
(iv) any asset or interest of any member of the Wider LucasVarity
Group being or falling to be disposed of or charged or any
right arising under which any such asset or interest could be
required to be disposed of or charged, in each case otherwise
than in the ordinary course of business;
(v) any member of the Wider LucasVarity Group ceasing to be able
to carry on business under any name under which it presently
does so;
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(vi) the creation of liabilities actual or contingent by any such
member, otherwise than in the ordinary course of business;
(vii) the rights, liabilities or interests of any member of the
Wider LucasVarity Group under any such arrangement, agreement,
licence, permit, franchise or other instrument or the
interests or business of any such member in or with any other
person, firm, company or body (or any arrangement or
arrangements relating to any such interests or business) being
terminated, adversely modified or affected; or
(viii) the financial or trading position of any member of the Wider
LucasVarity Group being materially adversely prejudiced or
affected;
and no event having occurred which, under any provision of any such
arrangement, agreement, licence, permit or other instrument, would or
might reasonably be expected to result in any of the events or
circumstances which are referred to in paragraphs (i) to (viii) of this
condition (e);
(f) since 31 January, 1998 and except as disclosed in LucasVarity's annual
report and accounts for the year then ended or as disclosed in the
quarterly statement of LucasVarity for the nine months ended on 31
October, 1998 or as otherwise publicly announced by LucasVarity (by the
delivery of an announcement to the Company Announcements Office of the
London Stock Exchange or by filing with the SEC) prior to the 27
January, 1999:
(i) issued or agreed to issue additional shares of any class, or
securities convertible into, or rights, warrants or options to
subscribe for or acquire, any such shares or convertible
securities (save as between LucasVarity and wholly-owned
subsidiaries of LucasVarity and except for any options granted
under the LucasVarity Share Option Schemes prior to the last
business day prior to 27 January, 1999;
(ii) recommended, declared, paid or made any bonus issue of
securities, dividend or other distribution (save as between
LucasVarity and wholly-owned subsidiaries of LucasVarity)
whether in cash or otherwise;
(iii) made or committed to make any change in its share or (save as
between LucasVarity and wholly-owned subsidiaries of
LucasVarity) loan capital;
(iv) other than in the ordinary course of business, merged with or
demerged or acquired any body corporate or acquired or
disposed of or transferred, mortgaged or charged or created
any security interest over any assets or any right, title or
interest in any assets (including shares and trade
investments);
(v) issued or agreed to issue any debentures or (save in the
ordinary course of business) incurred or increased any
indebtedness or contingent liability (save as between
LucasVarity and wholly-owned subsidiaries of LucasVarity)
which, in any such case, is material of the LucasVarity Group
taken as a whole;
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(vi) purchased, redeemed or repaid any of its own shares or other
securities or reduced or made any other change to any part of
its share capital;
(vii) entered into or varied any contract, transaction, arrangement
or commitment (whether in respect of capital expenditure or
otherwise) which:
(A) is of a long term, onerous or unusual nature or
magnitude; or
(B) could reasonably be expected to be restrictive on the
business of any member of the Wider LucasVarity Group or
any member of the Wider TRW Group which, in any such
case, is material of the LucasVarity Group taken as a
whole; or
(C) involves or would involve an obligation of a long term,
onerous or unusual nature or magnitude or which could be
restrictive on the business of any member of the Wider
LucasVarity Group or any member of the Wider TRW Group
which, in any such case, is material of the LucasVarity
Group taken as a whole;
(viii) entered into or varied or made any offer (which remains open
for acceptance) to enter into or vary the terms of any
contract with any of the directors or senior executives of
LucasVarity;
(ix) taken or proposed any corporate action or had any legal
proceedings instituted or threatened against it or petition
(not of a frivolous or vexatious nature) presented for its
winding-up (voluntarily or otherwise), dissolution or
reorganisation or for the appointment of a receiver,
administrator, administrative receiver, trustee or similar
officer of all or any of its assets and revenues or for any
analogous proceedings or steps in any jurisdiction or for the
appointment of any analogous person in any jurisdiction which
in any case is material in the context of the LucasVarity
Group taken as a whole;
(x) been unable or admitted in writing that it is unable to pay
its debts or having stopped or suspended (or threatened to
stop or suspend) payment of its debts generally or ceased or
threatened to cease carrying on all or a substantial part of
its business which in any case is material in the context of
the LucasVarity Group taken as a whole;
(xi) waived or compromised any material claim in the context of the
Wider LucasVarity Group taken as a whole;
(xii) made any alteration to its memorandum or articles of
association, or other incorporation documents which is
material in the context of the LucasVarity Group taken as a
whole; or
(xiii) entered into any agreement, contract or commitment or made any
offer (which remains open for acceptance) with respect to any
of the transactions, matters or events referred to in this
condition (f);
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(g) since 31 January, 1998 and except as disclosed in LucasVarity's annual
report and accounts for the year then ended or as disclosed in the
quarterly statement of LucasVarity for the nine months ended on 31
October, 1998 or as otherwise publicly announced by LucasVarity (by the
delivery of an announcement to the Company Announcements Office of the
London Stock Exchange or by filing with the SEC) prior to the last
Business Day prior to 27 January, 1999:
(i) there having been no adverse change or deterioration or
development involving a prospective adverse change in the
financial or trading position or profits of any material
member of the Wider LucasVarity Group which is material in the
context of the LucasVarity Group taken as a whole;
(ii) no litigation, arbitration proceedings, prosecution or other
legal proceedings to which any member of the Wider LucasVarity
Group is or may become a party (whether as plaintiff or
defendant or otherwise) or any investigation (save as a result
of the Offer) by any Relevant Authority having been
threatened, announced or instituted by or against or in
respect of any member of the Wider LucasVarity Group or
remaining outstanding against or in respect of any member of
the Wider LucasVarity Group which, in any such case, is
material in the context of the LucasVarity Group taken as a
whole;
(iii) no contingent or other liability having arisen or become
apparent or increased which would or could reasonably be
expected materially and adversely to affect the LucasVarity
Group taken as a whole; and
(iv) there having been no inquiry or investigation (save as a
result of the Offer) by, or complaint, or reference to, any
Relevant Authority of a material nature to LucasVarity in
respect of any member of the Wider LucasVarity Group and no
such enquiry, investigation, complaint or reference having
been threatened, announced, implemented, instituted or
remaining outstanding which, in any such case, is material in
the context of the LucasVarity Group taken as a whole;
(h) (except as disclosed in LucasVarity's annual report and accounts for
the financial year ended 31 January, 1998 or as disclosed in the
quarterly statement for the nine months ended 31 October, 1998 or as
otherwise publicly announced by LucasVarity (by delivery of an
announcement to the Company Announcements Office of the London Stock
Exchange or by filing with the SEC) prior to 27 January, 1999 the
Offeror not having discovered that any material financial or business
or other information concerning the Wider LucasVarity Group disclosed
at any time by or on behalf of any member of the Wider LucasVarity
Group, whether publicly, to any member of the Wider TRW Group or
otherwise, is materially misleading or contains a misrepresentation of
fact or omits to state a fact necessary to make any information
contained therein not misleading in any case which has not subsequently
been corrected by such disclosure and which, in any such case, is
material in the context of the LucasVarity Group as a whole; or
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(i) The Offeror not having discovered:
(i) that any past or present member of the Wider LucasVarity
Group has not complied with all applicable legislation or
regulations of any jurisdiction with regard to the disposal,
discharge, spillage, leak or emission of any waste or
hazardous substance or any substance likely to impair the
environment or harm human health, or otherwise relating to
environmental matters, or that there has otherwise been any
such disposal, discharge, spillage, leak or emission
(whether or not the same constituted a non-compliance by any
person with any such legislation or regulations and wherever
the same may have taken place) which, in any such case,
would be likely to give rise to any material liability
(whether actual or contingent) on the part of any member of
the Wider LucasVarity Group which, in any such case, is
material in the context of the LucasVarity Group taken as a
whole;
(ii) that there is, or is likely to be, any material liability,
whether actual or contingent, to make good, repair,
reinstate or clean up any property now or previously owned,
occupied or made use of by any past or present member of the
Wider LucasVarity Group or in which any such member may have
or previously have had or be deemed to have had an
interest under any environmental legislation, regulation,
notice, circular or order of any relevant authority or
Relevant Authority or otherwise which, in any such case,
would be material in the context of the LucasVarity Group
taken as a whole;
(iii) there has occurred (1) a declaration of a banking moratorium
or any suspension of payments in respect of banks in the US,
(2) any material limitation (whether or not mandatory) by
any government or governmental, administrative or
regulatory authority or agency, domestic or foreign, on, the
extension of credit by banks or other lending institutions
or, (3) a commencement of a war or outbreak or escalation of
armed hostilities or other national calamity directly
involving the US and there being a reasonable likelihood
that such event would or might reasonably be expected to
have an adverse effect which is material in the context of
the LucasVarity Group taken as a whole.
For the purpose of these conditions:
(a) "Relevant Authority" means any government, government department or
governmental, quasi-governmental, supranational, statutory, regulatory,
administrative or investigative body, authority (including any national
anti-trust or merger control authorities), court, trade agency,
association, institution or professional or environmental body or any
other person or body whatsoever in any relevant jurisdiction;
(b) a Relevant Authority shall be regarded as having "intervened" if it has
decided to take, institute, implement or threaten any action,
proceedings, suit, investigation, inquiry or reference or made,
proposed or enacted any statute, regulation, decision or order or taken
any measures or other steps or required any action to be taken or
information to be provided or otherwise having done anything and
"intervene" shall be construed accordingly;
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(c) "Authorisations" means authorisations, orders, grants, recognitions,
determinations, certificates, confirmations, consents, licences,
clearances, permissions, exemptions and approvals;
(d) "the Wider LucasVarity Group" means LucasVarity and its subsidiary
undertakings and any other undertakings in which LucasVarity and such
undertakings (aggregating their interests) have a substantial interest
and "the Wider TRW Group" means TRW and its subsidiary undertakings and
any other undertakings in which TRW and such undertakings (aggregating
their interests) have a substantial interest and, for these purposes,
"subsidiary undertaking" and "undertaking" have the meanings given by
the Companies Act 1985 and "substantial interest" means a direct or
indirect interest in 20 per cent. or more of the equity capital of an
undertaking.
Subject to the requirements of the Panel, the Offeror reserves the right to
waive all or any of the above conditions, in whole or in part, except condition
(a).
The Offeror reserves the right, subject to the consent of the Panel, to extend
the time allowed under the City Code for satisfaction of condition (a) until
such time as conditions (b) to (j) inclusive have been satisfied, fulfilled or,
to the extent permitted, waived. The Offeror shall be under no obligation to
waive (if capable of waiver) or treat as fulfilled any of conditions (b) to (j)
(inclusive) by a date earlier than the latest date for the fulfilment thereof
notwithstanding that the other conditions of the Offer may at such earlier date
have been waived or fulfilled and that there are at such earlier date no
circumstances indicating that any of such conditions may not be capable of
fulfilment.
The Offeror will not invoke any of the conditions (e) to (i) in relation to
circumstances which would otherwise give rise to the right to invoke such
condition where there has been fair disclosure in writing of such circumstances
to TRW or its advisers prior to the date of this announcement.
If the Offeror is required by the Panel to make an offer for LucasVarity
Securities under the provisions of Rule 9 of the Code, the Offeror may make such
alterations to the conditions of the Offer, including condition (a), as are
necessary to comply with the provisions of that Rule.
The Offer will lapse if the European Commission either (i) initiates proceedings
under Article 6(1)(c) of the Regulation or (ii) if there is a reference to the
Monopolies and Mergers Commission following a referral to a competent authority
of the UK under Article 9(I) of the Regulation before, in each case, the later
of 3.00 p.m. London time on the First Closing Date and the date when the Offer
becomes or is declared unconditional as to acceptances.
If the Offer lapses, the Offer will cease to be capable of further acceptance
and holders of LucasVarity Securities accepting the Offer and the Offeror shall
upon the Offer lapsing cease to be bound by acceptances delivered on or before
the date on which the Offer lapses.
The Offer and all contracts arising under it will be governed by English law.
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APPENDIX II
PRINCIPAL TERMS OF THE LOAN NOTES
The Loan Notes will be created by a resolution of the board of directors of the
Offeror (or a duly authorised committee thereof) and will be constituted by the
Loan Note Instrument. The issue of the Loan Notes will be conditional on the
Offer becoming or being declared unconditional in all respects. If valid
elections for the Loan Note Alternative have not been received in respect of at
least (pound)10 million nominal value of Loan Notes by the time the Offer
becomes or is declared unconditional in all respects, no Loan Notes will be
issued, in which event all LucasVarity Shareholders accepting the Offer
including those electing the Loan Note Alternative will receive cash in
accordance with the terms of the Offer. The Loan Notes have not been, and will
not be, registered under the US Securities Act. The Loan Note Alternative is not
available to any person who is a citizen or resident of the US, Canada,
Australia or Japan or certain other jurisdictions, and no prospectus in relation
to the Loan Notes has been, or will be, lodged with or, registered by, the
Australian Securities Commission. The Loan Note Instrument will contain
provisions, among other things, to the effect set out below.
1. FORM AND STATUS
The Loan Notes will be issued by the Offeror in amounts and integral multiples
of (pound)1 and will constitute unsecured obligations of the Offeror. The Loan
Note Instrument will not contain any restrictions on borrowing, disposals or
charging of assets by the Offeror.
2. INTEREST
(a) Interest on the Loan Notes will accrue from day to day and will be
payable (subject to any requirement to deduct tax therefrom) in arrears
on 30 June and 31 December in each year (or, if such a day is not a
business day, on the next following business day) ("interest payment
dates") in respect of the interest periods (as defined below) at a rate
calculated as provided in paragraph (b) below, except that the first
payment of interest on the Loan Notes, which will be made on 31
December, 1999, will be in respect of the period from (and including)
the first date of issue of any of the Loan Notes to (and including) 31
December, 1999. The period from (and including) the first date of issue
of any of the Loan Notes to (and including) 31 December, 1999 and the
period from (but excluding) 31 December, 1999, or any subsequent
interest payment date, to (and including) the next following interest
payment date, is referred to as an "interest period".
(b) The rate of interest on the Loan Notes for each interest period will be
the rate per annum calculated by the Offeror to be 1 per cent. below
LIBOR at or about 11.00 a.m.(London time) on the first business day of
the relevant interest period.
(c) If a rate of interest cannot be established in accordance with the
provisions of this paragraph 2 for any interest period, then the rate
of interest on the Loan Notes for such interest period shall be
calculated by reference to such rate as the Offeror shall reasonably
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<PAGE> 21
determine on the basis of quotations made for six month sterling
deposits of similar size in any other appropriate inter-bank market or
markets as the Offeror may reasonably select.
(d) Each instalment of interest shall be calculated on the basis of a 365
day year and the actual number of days elapsed in the relevant interest
period.
3. REPAYMENT AND REDEMPTION
(a) A holder of Loan Notes ("Noteholder") shall be entitled to require the
Offeror to repay the whole (whatever the amount) or any part
(being (pound)100 nominal amount or any integral multiple thereof) of
the principal amount of his holding of Loan Notes at par, together with
accrued interest thereon (subject to any requirement to deduct tax
therefrom) up to (and including) the date of repayment, on any interest
payment date falling on or after 30 June 2000, by giving not less than
30 days' prior notice in writing to the Registrars accompanied by
certificate(s) for all the Loan Notes to be repaid and a notice of
redemption (duly completed) in the prescribed form endorsed on the Loan
Notes to be repaid.
(b) If, at any time, the principal amount of the Loan Notes outstanding is
20 per cent. or less of the total nominal amount of Loan Notes which
have been issued prior to that time, the Offeror shall have the right,
on giving to the remaining Noteholders not less than 30 days' notice in
writing expiring on 30 June, 2000 or on any subsequent interest payment
date, to redeem all (but not some only) of the Loan Notes at their
principal amount together with accrued interest thereon (subject to any
requirement to deduct tax therefrom) up to (and including) the date of
redemption.
(c) The Offeror will have the right to redeem on any interest payment date
the Loan Notes at par together with accrued interest up to (and
including) the date of redemption (subject to any requirement to deduct
tax therefrom) on 30 days' written notice to the Noteholders if the
Offeror is advised by legal counsel that interest payable under the
Loan Notes will fall to be treated as non-deductible for US federal
income tax purposes due to a change in law after the date on which the
Offer is made.
(d) Any Loan Notes not previously repaid, redeemed or purchased will be
repaid in full at par on 31 December, 2003 together with accrued
interest thereon (subject to any requirement to deduct tax therefrom)
up to (and including) that date.
(e) Each holder of the Loan Notes shall have the right to acquire (by
subscription at nominal value of an amount up to or equal to such
Noteholder's holding of Loan Notes, such amount to be payable in full
on subscription) additional loan notes to be issued by a subsidiary of
the Offeror ("Additional Notes") on terms and conditions substantially
the same as those applicable to the Loan Notes, except as follows:
(i) the rate of interest on the Additional Notes shall be one half
of one per cent. below the rate per annum referred to in
paragraph 2 above; and
(ii) the Additional Notes shall not carry any rights to acquire
additional securities.
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(f) A Noteholder may require the Offeror to repay at par all of the Notes
held by him, together with accrued interest, if any of the following
events occurs:
(i) the Offeror fails to pay within 21 days of the due date any
principal or interest payable in respect of the Notes;
(ii) an order is made by a competent court or an effective
resolution is passed for winding-up the Offeror or the
Guarantor, (as defined in the Loan Note Instrument) (other
than a voluntary winding-up for the purposes of an
amalgamation, reconstruction or merger on terms previously
approved by an Extraordinary Resolution);
(iii) an encumbrancer takes possession of, or an administrator or
administrative receiver or manager or a receiver is
appointed of or over, the whole (or substantially the
whole) of the undertaking or property of the Offeror
or the Guarantor, unless the same is removed, stayed, paid
out or discharged within 60 days.
4. PURCHASE OF LOAN NOTES
The Offeror will be entitled at any time to purchase any Loan Notes at any price
by tender (available to all Noteholders alike), private treaty or otherwise by
agreement with the relevant Noteholder(s).
5. CANCELLATION
Any Loan Notes repaid or redeemed under paragraph 3 above or purchased under
paragraph 4 above shall be cancelled and shall not be available for re-issue.
6. SUBSTITUTION AND EXCHANGE
The Loan Note Instrument will contain provisions entitling the Offeror to
substitute any other member of the TRW Group as the principal debtor under the
Loan Notes, or to require Noteholders to exchange the Loan Notes for loan notes
issued on the same terms, mutatis mutandis, by one or more of such members
provided that (a) TRW guarantees such member's obligations thereunder, and (b)
the Offeror's right to require substitution by such member as a principal debtor
will be exercisable only if prior clearance has been obtained from the Inland
Revenue to the effect that the substitution will not be treated as a disposal of
the Loan Notes for the purpose of UK taxation of chargeable gains. References to
the Offeror in this summary except in (a) shall be construed to apply to the
substitute or substitutes (if any) from time to time of the Offeror.
7. MODIFICATIONS
The provisions of the Loan Note Instrument and the rights of the Noteholders
will be subject to modification, abrogation or compromise in any respect with
the sanction of an Extraordinary Resolution (as defined in the Loan Note
Instrument) of the Noteholders, and the consent of the Offeror. The Offeror may
amend the provisions of the Loan Note Instrument without such sanction or
consent if such amendment is of a formal, minor or technical nature and such
amendment would not be materially prejudicial to Noteholders or is to correct a
manifest error.
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8. REGISTRATION AND TRANSFER
The Loan Notes will be in registered form and transferable, except into certain
overseas jurisdictions, in amounts or integral multiples of (pound)100 or of the
entire holding of the Noteholder, provided that transfers will not be registered
during the 21 days immediately preceding an interest payment date.
9. PRESCRIPTION
Noteholders will cease to be entitled to amounts in respect of interest which
remain unclaimed for a period of five years and to amounts due in respect of
principal which remain unclaimed for a period of ten years, in each case from
the date on which the relevant payment first becomes due, and such amounts shall
revert to the Offeror upon the giving of 30 days' written notice to a
Noteholder.
10. RESTRICTIONS ON OWNERSHIP AND TRANSFER
The Loan Notes have not been and will not be registered under the US Securities
Act and no steps have been taken to qualify the Loan Notes for distribution in
any province or territory of Canada and no prospectus in relation to the Loan
Notes has been, or will be, lodged with or registered by the Australian
Securities Commission. Accordingly, unless an exemption under the US Securities
Act or other applicable securities laws is available, the Loan Note Alternative
is not available in the US, Canada, Australia or Japan or to Restricted Overseas
Persons and the Loan Notes may not be directly or indirectly offered, sold or
delivered in or into the US, Canada, Australia or Japan or to or for the account
or benefit of any Restricted Overseas Persons.
For these purposes, "Restricted Overseas Person" means either a person
(including an individual, partnership, unincorporated syndicate, limited
liability company, unincorporated organisation, trust, trustee, administrator or
other legal representative) in or resident in the US, Canada, Australia or
Japan, or a US Person.
11. NO LISTING
No application has been made or is intended to be made to any stock exchange for
the Loan Notes to be listed or otherwise traded.
12. GUARANTEE
The Loan Notes will be guaranteed by TRW.
13. GOVERNING LAW
The Loan Notes and the Loan Note Instrument will be governed by and construed in
accordance with the laws of England.
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APPENDIX III
DEFINITIONS
The following definitions apply throughout this announcement, unless the context
requires otherwise:
"Acceptance Forms" the Form of Acceptance and, in respect of
holders of LucasVarity ADSs only, the
letter of transmittal and the notice of
guaranteed delivery to accompany the Offer
Document
"business day" a day (excluding Saturday and Sunday)
or a US federal holiday or UK Bank Holiday,
consisting of the time period from 12.01 am
until and including 12.00 midnight (New York
City time)
"City Code" the City Code on Takeovers and Mergers
"First Closing Date" 3.00pm (London time), 10.00am (New York City
time) on the day following the 20th Business
Day from the date of the Offer Document
unless and until the Offeror, with the
consent of the Panel or in accordance with
the City Code, shall have extended the
Offer, in which case the term "First Closing
Date" shall mean the latest time and date at
which the Offer, as so extended by the
Offeror will expire or, if earlier, the time
at which the conditions to the Offer in
Appendix I are satisfied, fulfilled or to
the extent permitted waived
"Form of Acceptance" the Form of Acceptance, Authority and
Election relating to the Offer for use by
LucasVarity Shareholders
"J.P. Morgan" Morgan Guaranty Trust Company of New York
"LIBOR" the London inter-bank offered rate
"Loan Notes" the unsecured loan notes to be issued
by the Offeror pursuant to the Loan Note
Alternative, the principal terms of which
are described in this announcement
"Loan Note Alternative" the alternative whereby LucasVarity
Shareholders (other than certain overseas
shareholders) validly accepting the Offer
may elect to receive Loan Notes instead of
all or part of the cash consideration to
which they would otherwise be entitled
under the Offer
"Loan Note Instrument" the loan note instrument constituting the
Loan Notes
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"LucasVarity" LucasVarity plc
"LucasVarity ADS" an American Depository Share of LucasVarity
each representing 10 LucasVarity Shares
"LucasVarity Group" LucasVarity and its subsidiaries and
subsidiary undertakings
"LucasVarity Securities" LucasVarity Shares and LucasVarity ADSs
"LucasVarity Share" an ordinary share of 25p each in LucasVarity
"LucasVarity Share Option the LucasVarity 1996 Executive Share Option
Schemes" Scheme, the Lucas Varity 1996
Savings-Related Share Option Scheme, the
LucasVarity Global Share Plan, the Lucas
Industries 1994 Executive Share Option
Scheme, the Lucas Industries Executive Share
Option Scheme (1984), the Lucas Industries
Employees' 1991 Savings-Related Share Option
Scheme, the Varity Corporation Executive
Stock Option Plan and the Varity Corporation
Shareholder Value Incentive Plan
"LucasVarity Shareholder" a holder of an LucasVarity Share, either
directly or through the holding of an
LucasVarity ADS
"Offer" the recommended cash offer by J.P. Morgan on
behalf of a wholly-owned subsidiary of TRW
on the terms and conditions set out in this
announcement and the Offer Document and the
relevant Acceptance Form including, where
the context requires, the Loan Note
Alternative and any subsequent revision,
variation, extension or renewal of such
offer and such alternative for all the
issued and to be issued LucasVarity
Securities
"Offer Document" any document containing the Offer
"Offeror" TRW Automotive UK, a wholly-owned subsidiary
of TRW
"Panel" the Panel on Takeovers and Mergers
"London Stock Exchange" London Stock Exchange Limited
"SEC" the US Securities and Exchange Commission
"TRW" TRW Inc.
"TRW Group" TRW Inc. and its subsidiaries and subsidiary
undertakings
"UK" or "UK" the United Kingdom of Great Britain and
Northern Ireland
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"UK GAAP" generally accepted accounting principles in
the United Kingdom
"US" or "US" the United States of America and its
territories and possessions and all other
areas subject to its jurisdiction
"US GAAP" generally accepted accounting principles in
the United States
"US Persons" US persons as described in Regulation S of
the US Securities Act
"US Securities Act" the US Securities Act of 1933, as amended
and the rules and regulations promulgated
thereunder
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