Stock Exchange Announcements


REG-T&F Informa PLC Acquisition - Part 2
RNS Number:9792M TF Informa PLC Part 2 : For preceding part double-click [nRNSA9792M] - Clear strategic and commercial logic for this unique acquisition - Continued development of T&F Informa's multi-format approach to the provision of specialist content through publishing, events and through performance improvement services - Strong geographic and sector fit with T&F Informa's existing events operations - Entry into the high growth and resilient performance improvement market - Accelerated organic revenue growth prospects - Significant improvement in cross-marketing through doubling of database to more than 20 million names - Maintenance of well-balanced portfolio of products combining operationally geared businesses and non-cyclical businesses with repeating and resilient revenue streams - Acquisition is expected to enhance significantly T&F Informa's earnings per share (before amortisation of goodwill and exceptional items) in the first full financial year(2)(2) - Acquisition is expected to produce annualised efficiency savings of Ł8 million in 2006 and Ł11 million by 2007 mainly from property, IT systems, procurement and central overheads savings - Current year trading has started well for T&F Informa with performance in-line with its expectations, reflecting the growth in a number of its key markets. IIR's first quarter trading has been strong - Consideration for the acquisition to be funded initially in full from a new debt facility and subsequently in part from a fully underwritten 2 for 5 Rights Issue at 265p per Ordinary Share to raise Ł311 million, net of expenses - Greenhill has acted as exclusive financial adviser on the acquisition, Hoare Govett is acting as sole underwriter and broker to the Rights Issue and ABN AMRO Bank is acting as mandated lead arranger of the debt facility Commenting on the Acquisition, Peter Rigby, T&F Informa's Chief Executive said: "The acquisition of IIR significantly extends our events business and gives us a substantial and immediate position in the rapidly growing performance improvement market. We know the IIR events business well and it will clearly complement our existing events business, geographically and by sector. IIR's performance improvement business, with its highly respected brands, strong market positions and high cash generation is a unique opportunity to enter an attractive market which we see as offering strong recurring revenue streams. We expect the acquisition of IIR to be significantly earnings enhancing. We are acquiring a complementary business which is well established in growing market sectors and which is highly cash generative. I look forward to welcoming the employees of IIR into the newly enlarged T&F Informa Group." This summary should be read in conjunction with the full text of the following announcement. Appendix I contains the definitions of certain terms used in this announcement, Appendix II contains summaries of the Acquisition Agreement and New Facility Agreement. A presentation to analysts will be held at ABN AMRO, 250 Bishopsgate, London EC2M 4AA at 10:00 a.m. (London time) today. Press Enquiries: T&F Informa +44 20 7017 5000 Peter Rigby David Gilbertson Anthony Foye Greenhill +44 20 7440 0400 Financial adviser Simon Borrows Peter Bell Gregory Miller Hoare Govett +44 20 7678 8000 Broker Sara Coghill Andrew Chapman Caroline Griffiths Financial Dynamics +44 20 7831 3113 Press Relations Tim Spratt Charles Palmer (1) Financial information regarding IIR has been extracted from the audited consolidated financial statements of IIR Holdings Limited and adjusted to reflect businesses and assets that will be transferred out of IIR prior to completion of the Acquisition Agreement. This financial information is subject to further adjustment to present it on a basis consistent with T&F Informa's accounting policies and International Financial Reporting Standards (IFRS). It is not anticipated that other than as disclosed in this announcement these adjustments will be material. A circular containing a prospectus will be posted to shareholders in due course which will include adjusted financial information relating to IIR's three year history. 2 This statement should not be interpreted to mean that the future earnings per share of T&F Informa will necessarily match or exceed its historical published earnings per share. Greenhill & Co. International LLP, which is regulated in the United Kingdom by the Financial Services Authority, is acting for T&F Informa plc and no one else in connection with the Acquisition and will not be responsible to anyone other than T&F Informa plc for providing the protections afforded to clients of Greenhill & Co. International LLP or for providing advice in relation to the Acquisition or the Rights Issue. Hoare Govett Limited, which is regulated in the United Kingdom by the Financial Services Authority, is acting for T&F Informa plc as sole broker and underwriter (in connection with the Rights Issue) no one else in connection with the Acquisition and Rights Issue and will not be responsible to anyone other than T& F Informa plc for providing the protections afforded to clients of Hoare Govett Limited or for providing advice in relation to the Acquisition or the Rights Issue. The release, publication or distribution of this announcement in certain jurisdictions may be restricted by law and therefore persons in such jurisdictions into which this announcement is released, published or distributed should inform themselves about and observe such restrictions. THIS ANNOUNCEMENT DOES NOT CONSTITUTE, OR FORM PART OF, AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO SUBSCRIBE FOR OR BUY ANY SECURITIES, NOR THE SOLICITATION OF ANY VOTE OR APPROVAL IN ANY JURISDICTION, NOR SHALL THERE BE ANY SALE, ISSUE OR TRANSFER OF THE SECURITIES REFERRED TO IN THIS ANNOUNCEMENT IN ANY JURISDICTION IN CONTRAVENTION OF APPLICABLE LAW. NOT FOR DISTRIBUTION OR TRANSMISSION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA, THE REPUBLIC OR IRELAND OR THE REPUBLIC OF SOUTH AFRICA. Proposed Ł768 million acquisition of IIR extends T&F Informa's multi-format approach to provision of specialist information Proposed 2 for 5 Rights Issue at 265p to raise Ł311 million net Introduction The Board of T&F Informa plc ("T&F Informa") announces the proposed acquisition of IIR Holdings Limited ("IIR") for a cash consideration of US$1.4 billion (Ł768 million). IIR's events division organises conferences, seminars and exhibitions and through its performance improvement business provides performance analysis, diagnostics and customised training services. In the year to 31 December 2004 IIR increased revenues to $572.6 million (Ł312.9 million) and improved EBITA to $87.8 million (Ł48.0 million)(3)(3). The Directors believe that the Acquisition represents a unique opportunity for T &F Informa to advance its strategy of developing its multi-format approach to the provision of specialist content through publishing, events and through customised performance improvement services. The Acquisition enables T&F Informa to enter the growing performance improvement market, giving scale and excellence in an important information delivery area and providing opportunities to leverage T&F Informa's industry sector expertise in IIR's performance improvement markets. Both IIR's and T&F Informa's events divisions have operated in the events market for some thirty years. The two organisations' events divisions are operated with similar business models and management styles through highly incentivised local management teams across a range of countries, closely supervised by senior management. T&F Informa is therefore well placed to run a large scale events business and understands the cultural and operational requirements of developing and managing such a business effectively. The Acquisition will continue T&F Informa's strategy of building a well-balanced and robust portfolio of assets. The Enlarged Group is expected to continue to demonstrate attractive growth characteristics during periods of economic upturn through its operationally geared events businesses, while exhibiting profit resilience through its more defensive publishing and performance improvement training businesses in times of economic slowdown. The Acquisition is expected to enhance significantly T&F Informa's earnings per share (before goodwill amortisation and exceptional items) in the first full financial year after the Acquisition.(4)(4) T&F Informa also announces that it is raising Ł311 million, net of expenses, by way of a proposed Rights Issue to part finance the Acquisition. The Rights Issue has been fully underwritten by Hoare Govett. Qualifying Shareholders will be offered New Ordinary Shares under the Rights Issue at a price of 265 pence per new Ordinary Share on the basis of 2 new Ordinary Shares for every 5 existing Ordinary Shares. The balance of the purchase price for the Acquisition will be funded by the New Facility. In view of the size of the Acquisition, it is conditional upon, inter alia, T&F Informa shareholder approval and competition and regulatory clearances in the United States and Germany. The Acquisition is not conditional upon the Rights Issue becoming unconditional; in the event that the Rights Issue does not become unconditional, the amount being borrowed under the New Facility shall be increased to fund the entire consideration. The Rights Issue is not conditional upon the Acquisition completing, although it is subject to shareholder approval. In the event that T&F Informa receives the required approvals to complete the Acquisition prior to the Rights Issue becoming unconditional and payment for the shares being received, then the New Facility will be used to fund fully the Acquisition. Part of this facility will then be repaid when the proceeds of the Rights Issue have been received. Development of T&F Informa The Merger on 10 May 2004 of Informa and Taylor & Francis created a new international force in the provision of specialist information through T&F Informa's publishing, events and data businesses employing some 4,000 people. The integration of the two groups is now complete and the combined Group has started to benefit from both the revenue and cost synergies which the Merger created. Following the Merger, the Group's three operating divisions of Academic, Professional and Commercial have all performed well, combining organic growth with good contributions from acquisitions made in 2003, including CRC Press, PJB, MMS and from Marcel Dekker in early 2004. T&F Informa's events business demonstrated strong growth in 2004 as a result of a recovery in corporate spending and new event launches and this has continued into 2005. Since the Merger, T&F Informa has continued its strategy of providing specialist content and access to academic, professional and business communities worldwide. The Merger enabled T&F Informa to do this through publications, events and training and through a wider geographic and sector customer base. T&F Informa also seeks to develop and acquire strong brands looking to enhance its US presence and further develop into other high growth economies. In 2004, T&F Informa specifically identified training as an attractive and complementary market where it could further exploit its specialist information offering. Information on IIR IIR's events division organises conferences, seminars and exhibitions and its performance improvement business provides performance analysis, diagnostics and customised training to primarily US based corporations and governments. In the year to 31 December 2004 it had revenues of $572.6 million (Ł312.9 million) and EBITA of $87.8 million (Ł48.0 million) (this included a 5 month contribution from Robbins-Gioia (acquired in July 2004) of $42.5 million and $7.0m million revenue and EBITA, respectively). IIR was founded in 1973 by Irvine Laidlaw (now Lord Laidlaw of Rothiemay), its current majority shareholder and Chairman. IIR operates through two business divisions: - Events ("Events"), representing 49% of 2004 revenues - Performance Improvement ("PI"), representing 51% of 2004 revenues IIR has delivered substantial growth over five years through the development and realignment of its Events business by foc using on larger scale events, by taking advantage of improving economic conditions to drive organic revenues through new event launches and through selected acquisitions in PI. IIR operates across 70 countries and the Group employs approximately 3,000 people. IIR has also developed its portfolio of companies to have a greater resilience to economic cycles and enjoys strong client retention rates and repeating revenue streams with an increasing proportion of government revenues leading to good revenue predictability across its operations. In Events, IIR continually tests many new formats. This approach has led to the development of larger scale, industry leading 'must-attend' events which generate higher delegate revenues, increased sponsor and exhibitor revenues and a higher degree of resilience in an economic downturn. These events have been replicated in several markets. In 2004, approximately 56% of IIR's Events revenue was derived from these large-scale 'must-attend' industry events. In PI, the business enjoys long term relationships with its clients which include approximately half of the Fortune 500 and a broad cross-section of US Government departments. This results in estimated repeat business levels of approximately 75%. Operating leverage in Events has enabled IIR to take advantage of improving economic conditions and grow through increased demand for new events, increased delegate numbers and higher sponsorship levels. IIR has also grown through acquisitions. Since 1997 it has made seven acquisitions in PI including Robbins-Gioia in July 2004 for $80 million, AchieveGlobal in 2000 for $100 million and ESI International for $50 million in 1997. IIR has developed these acquired businesses and replicated them outside of their core US markets and significant opportunities remain to exploit this further. IIR's management has concentrated on developing the sales capacity of the businesses that it has acquired in PI utilising its strong sales organisation. T&F Informa expects to be able to also benefit from these skills. T&F Informa is not acquiring certain assets (the Excluded Assets) that will be transferred out of IIR by completion, such as Abbey Business Services. Financial Performance The table below presents IIR's revenues and EBITA for the two years ended 31 December 2004. Financial years ended 31 December 2003 2004 * 2003 2004 US$m US$m GBPm GBPm Revenue 476.3 572.6 293.1 312.9 EBITA 42.8 87.8 26.3 48.0 * Includes a 5 month contribution from Robbins-Gioia of $42.5 million of revenues and $7.0 million of EBITA ** Financials have been converted at the following average annual exchange rates: $1.625:Ł1 in 2003 and $1.83: Ł1 in 2004 The financial information is extracted from IIR Group's consolidated audited accounts which were prepared under the transitional arrangements for International Financial Reporting Standards as published by the International Accounting Standards Board. This financial information has been adjusted to reflect the removal of the Excluded Assets that T&F Informa, as part of the Acquisition, is not buying. The divisional financial information is extracted from unaudited management accounts. The Circular that T&F Informa will send to its shareholders to request approval of the Acquisition will include an accountant's report on the IIR financial information on the basis of T&F Informa's current accounting policies and IFRS and a reconciliation between the audited accounts and the Excluded Assets. Following an independent review with IIR and its auditors, T&F Informa does not expect that there will be material adjustments to the financial information in this announcement other than in respect of net assets where there is expected to be a significant restatement by approximately $15 million and in respect of an estimated $8m deduction from EBITA in 2004 relating to the application of IFRS 2 (share-based payments) for stock options of one individual which are being satisfied as part of the Acquisition. During the period 1997 to 2000 IIR experienced rapid expansion in all of its businesses as the global economy grew, leading to higher demand for conferences, availability of sponsorship and higher demand for customised performance improvement training. The aftermath of the terrorist attack in New York on September 11, 2001 combined with both a slowing global economy and the SARS epidemic in Asia adversely impacted revenues between 2001 and 2003. The more recent recovery in the global economy which has led to higher corporate spend and increased demand for corporate events has resulted in 2004 revenue growth of 20.2% and EBITA growth of 105.3%. In 2004, IIR generated 51% of its revenues from North America, 17% from Continental Europe, 17% from the UK, 9% from the Middle East and South Africa and 6% from the rest of the world. IIR has increased EBITA margins from 9.0% in 2003 to 15.3% in 2004 and is a highly cash generative business converting approximately 100% of EBITA to cash. As at 31 December 2004, after adjusting for the Excluded Assets, IIR had net assets of $112 million (Ł58.4 million) including goodwill. As noted above, T&F Informa will restate this for IFRS and under its own accounting policies in its Circular to shareholders and it is anticipated that net assets including goodwill will be significantly lower by approximately $15 million (Ł7.8 million). Events (2004 revenues $278.0 million (Ł151.9 million), EBITA $44.3 million (Ł24.2 million)) IIR organises the following types of events: niche conferences covering topical issues; annuals and forums which are medium to large industry conferences; sales led events with a primary focus on sponsorship and showcase revenue; large scale events which are positioned as major 'must attend' events serving an industry or sector and guru events promoting the expertise of thought-leaders. ' The strategy of the events business has been to move away from smaller conferences and focus on larger events that have higher repeat delegates, attract greater sponsorship and hence higher revenue predictability and growth. IIR's objective is for each of these larger events to become an industry standard in their particular sector and hence that event for practitioners becomes a 'must attend'. Large-scale events produced by IIR focus on the following industries; Finance, Telecoms, Life Sciences, Pharmaceutical and Information Technology utilising highly respected brands including: Super Return, Clinical Trials Congress, GAIM, Tetra, 3G Hong Kong and the Leaders conferences. Training seminar products include: public courses for business executives in technical and professional development subjects; and on-site courses for individual companies. In 2005, IIR is expected to produce over 1,400 conferences, 5,200 training events and 23 industry leading exhibitions. Of these approximately 430 will be large scale industry events. In addition, IIR maintains high quality global marketing databases containing approximately 12 million names. The events business consists of 22 individual companies, which serve over 54 industry sectors and operate in 30 countries. Principal business centres are located in the UK, the US, Germany, and Dubai. IIR's 23 industry-leading trade and consumer shows focus on the following key sectors; Electricity & Power, Printing, Luxury Yachts, Commercial Property and Healthcare. These demonstrate a high degree of visibility of revenues due to exhibition bookings in advance and strong exhibitor repeat rates. In 2006, IIR will stage the next IPEX event for the printing industry, which is held every four years, and is believed to be one of the larger business-to-business exhibitions in the UK. In addition, the business operates Middle East Electricity, Arab Health, the China, Audio and Lighting Manufacturers (CALM) Expo in Beijing and the PALME exhibition in Singapore. Performance Improvement division (PI) (2004 revenues $294.6 million (Ł161.0 million), EBITA $43.5 million (Ł23.8 million) including a 5 month contribution from Robbins-Gioia) IIR is a leader in the fragmented performance improvement market. PI provides performance analysis, diagnostics and customised training to corporates and governments. PI uses its specialist professionals to work with clients to identify and resolve business and training issues and produce tailored operational programs. PI implements these bespoke programs frequently across entire workforces or departments through a variety of customised off-site, on-site and electronic products enabling a transformation of the skills of the employees. Mentoring and monitoring, after the initial program delivery, are integral parts of the overall contract and ensure key performance improvement objectives have been met. The performance improvement market is highly fragmented and IIR has built a leading position over the last eight years and is one of the largest independent providers of performance improvement services. Simba(5)(5) estimates that the US outsourced skills training and e-learning market (excluding information technology) was $5.1bn in 2004, having increased by 11% compared to 2003. It estimates this market will grow at a compound average growth rate of 7.4% over the period 2004 to 2008. PI operates under the following eight companies: - Robbins-Gioia: program, project and portfolio management and consultancy - ESI: project and contract management and business analysis - AchieveGlobal: sales performance, customer service, leadership and teamwork training - Forum: leadership, customer service and sales performance training - Huthwaite: sales performance improvement - Omega Performance: credit, sales, customer service, contact centres and wealth management for financial services - Communispond: business communications and presentation skills - PTI: technical and regulatory training for pharmaceutical related companies. Revenues are generated through the sale of materials and product, content licensing, public and on-site training, course and material customisation, royalties and consulting services. Clients include approximately 60% of the Fortune 250, approximately half of the Fortune 500 and a broad cross section of US Government departments. IIR's PI business has strong brand names with a good market reputation based on its high quality intellectual property. IIR is positioned to expand its service offering overseas. PI has significantly strengthened its defensive qualities with the expansion of its government client base. For example, ESI has grown its US Government revenue contribution from 13% of sales in the year to 31 December 2000 to 27% in the year to 31 December 2004. Robbins-Gioia generated 83% of its revenue from the government sector in the year to 31 December 2004. These relationships are generally embedded and long term in nature. There are expansion opportunities with other US Government departments and internationally. Background to and reasons for the Acquisition The Directors believe that the Acquisition represents a unique opportunity for T &F Informa to advance its strategy of developing its multi-format approach to the provision of specialist content through publishing, events and now through performance improvement services. Through the combination of IIR's and T&F Informa's complementary events operations, the Acquisition will create a major and highly attractive global events business. It will also provide an entry into the high growth and resilient performance improvement market, giving scale and excellence in an important information delivery area. T&F Informa believes that through IIR's existing PI business it can leverage its sector expertise, particularly in telecoms and pharmaceuticals, to cross-sell existing products and drive growth in PI's own product offering. The performance improvement market is a new one for T&F Informa, but is highly complementary with T&F Informa's events, training and publishing activities. The Directors believe that the key characteristics of IIR's PI operations (including well respected brand names, varied and loyal customer base, strong cash conversion combined with high levels of repeatable and predictable revenues) are highly attractive. IIR and T&F Informa's conference divisions have operated in the conference and training market for some thirty years. The two organisations' conference businesses are operated with similar business models and management styles through highly incentivised local management teams across a range of geographies closely supervised by senior management. T&F Informa is therefore well placed to understand the dynamics of running a large scale events business such as IIR and of managing the cultural and operational requirements of developing such a business effectively. In addition, IIR has a well-established management structure and a management team with an average tenure of 12 years that will add experience and expertise to T&F Informa's existing events division management base. The Directors of T&F Informa are focussed on retaining IIR's key employees who they see as important to the continued success of the IIR business. There is a compelling strategic and commercial logic for this acquisition: - Highly complementary events businesses T&F Informa and IIR have strengths in different sectors and geographies of the global conference market. The Enlarged Group will have increased scale in key markets such as the US, the UK, Dubai and Germany. In the UK, IIR is strong in finance, having events such as SuperReturn whereas T&F Informa is strong in telecoms and law with its 3GSM event and Legal IT Forum. In the US, IIR has a successful domestic conference business, an area in which T&F Informa's existing conference operation is relatively small. In addition, the Acquisition enables T&F Informa to extend its reach with further growth into regions such as Eastern Europe and Russia, China, the Middle East and Latin America. IIR has increasingly focused its business on developing large-scale events, while T&F Informa continues to focus on smaller conferences notwithstanding its larger events such as its annual 3GSM event. - Entry into Performance Improvement market IIR offers T&F Informa an attractive opportunity to gain a leading performance improvement business and is a logical extension of T&F Informa's existing information delivery formats. The key attributes of PI are its long-term embedded relationships, partnership approach with its clients (generating resilient, repeating revenue streams) and excellent proprietary and licensed intellectual property which are complementary with T&F Informa's existing businesses. In addition, there are likely to be significant opportunities to use T&F Informa's sector expertise by leveraging IIR's performance improvement skills into T&F Informa's top industry sectors. T&F Informa's access to experts in specialist sectors should also provide PI with new client introduction opportunities. - Combined marketing strengths and customer files IIR provides an opportunity for T&F Informa to cross-promote and enhance existing market sector positions (for example, in financial services, pharmaceutical, biotech and telecoms). The Enlarged Group will be able to harness greater marketing strength by broadening its distribution and client reach by leveraging IIR's customer database of 12 million names with its own database of 10 million names. - Increased operational and financial scale and geographic reach The Enlarged Group will have enhanced financial strength, increased scale and geographic reach to drive both organic and acquisition-led growth and to invest and compete more effectively in its core and new markets. In particular, the Enlarged Group will generate an estimated 40% of its revenue in North America. A combination of the two groups' events businesses will significantly extend the Enlarged Group's strength further in other geographical jurisdictions, notably Russia and Eastern Europe, Asia and the Middle East and Latin America. - Well balanced and robust portfolio The Acquisition will continue T&F Informa's strategy of having a well-balanced and robust portfolio of assets. Key to this is T&F Informa's ability to demonstrate attractive growth characteristics during periods of economic upturn through its operationally geared events businesses, while exhibiting profit resilience through its more defensive publishing and PI businesses in times of economic slowdown. IIR offers this balance through its robust high repeat revenues from 'must attend' events and long term relationships that it has developed in PI, whilst also having a scaleable model in strong economic markets. - New publishing opportunities There will be opportunities to extend T&F Informa's existing publications expertise into IIR's performance improvement sectors where T&F Informa has either no or a limited presence (this will include sectors such as sales, leadership and project and contract management). The merger of Informa and Taylor & Francis has demonstrated the strong benefits from combining a publishing driven business with an events business and generating revenues by cross-selling between these two delivery channels. T&F Informa has an excellent track record in acquiring and integrating businesses. T&F Informa intends to maintain IIR's brands, operating structure and full product range. The Directors of T&F Informa believe that the Acquisition will generate annualised efficiency savings of Ł8 million in 2006 and Ł11 million in 2007 from areas including property, IT systems, procurement and central overhead savings with expected one-off costs of Ł7.7 million occurring by the end of 2006. Financial effects of the Acquisition The Directors of T&F Informa believe the Acquisition will significantly enhance T&F Informa's earnings per share (before goodwill amortisation and exceptional items) in the first full financial year after the Acquisition. This statement should not be interpreted to mean that the future earnings per share of T&F Informa will necessarily match or exceed its historical published earnings per share. The Board believes that the Acquisition will position the Enlarged Group well for good medium-term organic growth and for continuing high cash generation. The Board expects that the post-tax return on Acquisition will cover the Company's estimated cost of capital in the first full year of ownership. On the basis of IIR and T&F Informa's actual 2004 revenues management estimates that a combination of the two groups from 1 January 2004 would have produced the following balanced revenue split: 26% subscriptions, 33% events, 15% copy sales, 22% performance improvement and 4% advertising. Through its organic development and future acquisitions, T&F Informa intends to continue to focus on building a portfolio which derives broadly half of its revenues from repeating revenue streams and half from more operationally geared activities. This will enable it to capture more growth opportunities in its chosen vertical markets. The T&F Informa Board expects that, on the basis of the Rights Issue becoming unconditional, the ratio of net debt to earnings before interest, tax, depreciation, amortisation and exceptional items will be approximately 4.4 times at completion of the Acquisition and expect that it will fall to around 4 times by the year end. Details of the Acquisition The terms of the Acquisition Agreement are summarised in Appendix II of this announcement. Financing the Acquisition T&F Informa will use the net funds raised by the Rights Issue, expected to be approximately Ł311 million, after expenses, to part finance the Acquisition. The balance will be provided from a New Facility of Ł1,250 million (existing facilities will also be refinanced from this facility). In the unlikely event that the Rights Issue does not become unconditional, T&F Informa will finance the entire consideration for the Acquisition from the New Facility. The terms of the New Facility Agreement are summarised in Appendix II of this announcement. The Rights Issue is not conditional on completion of the Acquisition and the Acquisition is not conditional on the Rights Issue becoming unconditional. In the unlikely event that the Acquisition does not complete, the Board's current intention is to use the proceeds to pay down the Company's existing debt where appropriate and to continue to consider actively other acquisition opportunities. If neither of these is appropriate it may also then consider a potential return of surplus capital to shareholders. Current trading The current year has started well and the Group is performing in line with its expectations. With the integration of Informa and Taylor & Francis now complete, the merger benefits are coming through as planned and T&F Informa is benefiting from the growth in a number of its key markets. T&F Informa has a well balanced portfolio combining complementary skill sets in publishing and events that will allow it to continue to develop new products around its sector leading international brands. One year on from the Merger, T&F Informa is well placed to grow both organically and through selective acquisitions. IIR's first quarter trading has been strong. The directors believe that, taking account of the expected benefits of the Acquisition the Enlarged Group is well positioned for continuing growth and success in the next current financial year and beyond. Principal Terms of the Rights Issue The Company proposes to raise approximately Ł311 million, net of expenses, by way of the Rights Issue. The Issue Price of 265 pence per New Ordinary Share represents a discount of approximately 35% to the closing middle market price of 407 pence per Ordinary Share on 31 May 2005 (being the last business day prior to the announcement of the Rights Issue). The Company proposes to offer up to 120,144,109 New Ordinary Shares, in aggregate, by way of rights, to Qualifying Shareholders at 265 pence per share, payable in full on acceptance on the basis of: 2 New Ordinary Shares for every 5 Ordinary Shares held by Qualifying Shareholders on the record date for the Rights Issue and so in proportion for any other Ordinary Shares then held, and otherwise on the terms and conditions to be set out in the Prospectus and, in the case of Qualifying non-CREST Shareholders only, the Provisional Allotment Letter. The New Ordinary Shares will, when issued and fully paid, rank equally in all respects with the existing Ordinary Shares. Fractional entitlements to New Ordinary Shares will be disregarded. Holdings of Ordinary Shares in certificated and uncertificated form will be treated as separate holdings for the purpose of calculating entitlements under the Rights Issue. The Rights Issue is conditional, inter alia, upon the following: a) the passing of the Resolution to be proposed at the EGM; b) the Underwriting Agreement not having been terminated by Hoare Govett (pursuant to its rights to do so in certain circumstances) prior to satisfaction of the condition in sub-paragraph (c) below and otherwise becoming unconditional in all respects; c) relevant approval and publication of the Prospectus and Admission having become effective by not later than 8.00 am on 15 July 2005. The Rights Issue is not conditional on the Acquisition being completed. The Rights Issue has been fully underwritten by Hoare Govett save in respect of any new ordinary shares which may be issued between today's date and the record date for the Rights Issue. The full terms and conditions of the Rights Issue will be detailed in a Prospectus, which is expected to be posted to Qualifying Shareholders (other than certain non-UK shareholders) in around two weeks time. Dividends T&F Informa intends to maintain its current dividend policy and adjust future ordinary dividend payments per share to take account of the bonus element of the Rights Issue. Extraordinary General Meeting and Circular to Shareholders In view of its size, the Acquisition is conditional upon, inter alia, the approval of the Acquisition by the Company's shareholders, obtaining competition approvals in Germany and the US and regulatory approvals in the United States. A Circular containing a notice convening the Extraordinary General Meeting will be posted to shareholders in around two weeks time. The purpose of this Extraordinary General Meeting is to seek approval of the ordinary resolution to facilitate the Rights Issue and approve the Acquisition and other related matters. The Circular to shareholders shall include, as required by the Prospectus Directive, a list of risk factors. This shall include general business risks, risks relating to the Enlarged Group and risks relating to the Acquisition. Other A presentation to analysts will be held at ABN AMRO, 250 Bishopsgate, London EC2M 4AA at 10:00 a.m. (London time) today. $ amounts have been translated at the appropriate average exchange rate or spot exchange rate for the relevant time period or date. All other $ amounts have been translated at a ratio of Ł1 : $ 1.823 Press Enquiries: T&F Informa +44 20 7017 5000 Hoare Govett +44 20 7678 8000 Peter Rigby Broker David Gilbertson Sara Coghill Anthony Foye Andrew Chapman Caroline Griffiths Greenhill +44 20 7440 0400 Financial Dynamics +44 20 7831 3113 Financial adviser Press Relations Simon Borrows Tim Spratt Peter Bell Charles Palmer Gregory Miller More to follow, for following part double-click [nRN2A9792M]