REG - Pearson Funding Five - Tender Offer

PearsonAnnouncement

06/03/2019 11:35

RNS Number : 0376S
Pearson Funding Five PLC
06 March 2019
 


PEARSON FUNDING FIVE PLC ANNOUNCES CASH TENDER OFFER FOR ITS €500,000,000 1.875 PER CENT. NOTES DUE 2021 ISSUED BY PEARSON FUNDING FIVE PLC AND GUARANTEED BY PEARSON PLC
 
NOT FOR DISTRIBUTION IN OR INTO OR TO ANY PERSON LOCATED OR RESIDENT IN THE UNITED STATES, ITS TERRITORIES AND POSSESSIONS (INCLUDING PUERTO RICO, THE U.S. VIRGIN ISLANDS, GUAM, AMERICAN SAMOA, WAKE ISLAND AND THE NORTHERN MARIANA ISLANDS), ANY STATE OF THE UNITED STATES OR THE DISTRICT OF COLUMBIA OR TO ANY U.S. PERSON.
 
6 March 2019
 
London - Pearson plc (the Guarantor) together with its subsidiary Pearson Funding Five plc (the Company), hereby announce the Company's invitation to eligible holders (subject to the offer restrictions referred to below) of the Company's outstanding €500,000,000 1.875 per cent. notes due 2021 guaranteed by the Guarantor (ISIN: XS1068765418) (the Notes) to tender their Notes for purchase by the Company for cash (the Offer).
 
The Offer is made on the terms and subject to the conditions set out in the tender offer memorandum dated 6 March 2019 (the Tender Offer Memorandum).
 
Copies of the Tender Offer Memorandum are (subject to distribution restrictions) available from the Tender Agent as set out below. Capitalised terms used in this announcement but not defined have the meanings given to them in the Tender Offer Memorandum.
 



Notes


ISIN


Outstanding Nominal Amount


Purchase Yield


Target Acceptance Amount **




€500,000,000 1.875 per cent. notes due 2021


XS1068765418


€250,000,000


0 per cent.*


An aggregate nominal amount of €75,000,000



*     For information purposes only, the Purchase Price determined in the manner described in "The Offer - Purchase Price" in the Tender Offer Memorandum, will be 104.084 per cent., if the Settlement Date is 15 March 2019. Should the Settlement Date be postponed, the Purchase Price will be recalculated and will be announced, for information purposes only, as provided in "The Offer - Announcements - General" in the Tender Offer Memorandum.
** The Company reserves the right, in its sole and absolute discretion and for any reason, to increase or decrease the Target Acceptance Amount.
 
Rationale for the Offer
 
The Offer is consistent with the Group's twin strategy of (i) extending its debt maturities where appropriate; and (ii) optimising the balance between term bond debt and revolving bank debt, given that the latter is more flexible and can be varied according to the seasonality of the business.
 
The Offer will be funded initially using available cash balances and later in the year by drawing on the Group's Revolving Credit Facility, and will therefore have no material impact on the Group's net debt. The Group's principal Revolving Credit Facility is for $1,190 million and matures in February 2024, subject to two one-year extension options at the discretion of each bank.
 
Notes purchased by the Company pursuant to the Offer will be cancelled. Notes which have not been validly purchased pursuant to the Offer will remain outstanding.
 
The Group means the Guarantor and its consolidated subsidiaries.
 
Purchase Price and Accrued Interest
 
For information purposes only, the Purchase Price (as defined below) will, when determined in the manner described herein on the basis of a Settlement Date of 15 March 2019, be 104.084 per cent. Should the Settlement Date differ from 15 March 2019, the Purchase Price will be recalculated, all as described below.
 
The Company will pay, for Notes accepted by it for purchase pursuant to the Offer, a price (the Purchase Price, expressed as a percentage and rounded to the third decimal place, with 0.0005 being rounded upwards) as described below.
 
The Purchase Price in respect of the Notes shall be determined in the manner described in the Tender Offer Memorandum by reference to a yield of 0 per cent. (the Purchase Yield). 
 
The Purchase Price will be determined in accordance with market convention and expressed as a percentage of the nominal amount of the Notes, and is intended to reflect a yield to maturity of the Notes on the Settlement Date equal to the Purchase Yield.  Specifically, the Purchase Price will equal (a) the value of all remaining payments of principal and interest on the Notes up to and including the scheduled maturity date of the Notes, minus (b) the Accrued Interest.
 
The Company will also pay, in relation to the Notes, an Accrued Interest Payment in respect of Notes accepted for purchase pursuant to the Offer.
 
Acceptance Amount and Scaling
 
Target Acceptance Amount and Acceptance Amount
If the Company decides, in its sole and absolute discretion, to accept valid tenders of Notes pursuant to the Offer, it proposes to accept for purchase up to €75,000,000 in aggregate nominal amount of Notes (the Target Acceptance Amount), although the Company reserves the right to increase, in its sole and absolute discretion, the Target Acceptance Amount at any time, including after the Expiration Deadline (as defined below) (the final aggregate amount of Notes accepted for purchase pursuant to the Offer being the Acceptance Amount).
If the Company accepts any Notes for purchase and the aggregate nominal amount of the Notes validly tendered for purchase is greater than the Acceptance Amount, the Company intends to accept Notes for purchase in the manner set out under "Scaling" below, such that the aggregate nominal amount of the Notes accepted for purchase pursuant to the Offer is no greater than the Acceptance Amount. See further "Scaling" below.
 
Scaling
 
The Company is under no obligation to accept for purchase any Notes tendered pursuant to the Offer. The acceptance for purchase by the Company of Notes tendered pursuant to the Offer is at the sole and absolute discretion of the Company and tenders may be rejected by the Company for any reason in its sole and absolute discretion. The amount of Notes that are purchased pursuant to the Offer will be based on the Target Acceptance Amount, and tenders of Notes may be pro-rated.
 
In the circumstances in which a valid tender of Notes pursuant to the Offer is to be accepted, at the sole and absolute discretion of the Company, on a pro rata basis, each such valid tender of Notes will be scaled by a factor (each a Pro-Ration Factor) equal to (i) the Acceptance Amount, divided by (ii) the aggregate nominal amount of Notes validly tendered pursuant to the Offer (subject to adjustment to allow for the aggregate nominal amount of Notes accepted for purchase, following the rounding of tenders of such Notes as described below, to equal the Acceptance Amount exactly).
 
Each tender of Notes that is scaled in this manner will be rounded down to the nearest €1,000, unless such rounding would result in Notes being returned to the relevant Noteholders in an aggregate nominal amount which is less than the minimum denomination (as described below) of the Notes in which case such tender of Notes will be rounded down such that the minimum denomination (as described below) of the Notes would be returned to the relevant Noteholders. In any case, the Company will only accept valid tenders of Notes to the extent any such pro-rating would not result in the relevant Noteholder transferring Notes to the Company in an aggregate nominal amount which is less than the minimum denomination (as described below) of the Notes.
 
Tender Instructions
 
In order to participate in, and be eligible to receive the Purchase Price and Accrued Interest Payment pursuant to, the Offer, Noteholders must validly tender their Notes by delivering, or arranging to have delivered on their behalf, a valid Tender Instruction that is received by the Tender Agent by 4.00 p.m. (London time) on 12 March 2019 (the Expiration Deadline).
 
Tender Instructions will be irrevocable except in the limited circumstances described in the Tender Offer Memorandum.
 
Tender Instructions must be submitted in respect of a nominal amount of Notes of no less than €100,000, being the minimum denomination of the Notes, and may, in each case, be submitted in integral multiples of €1,000 above €100,000. A separate Tender Instruction must be completed on behalf of each beneficial owner.
 



Events


Times and Dates
(All times are London time)
 




Commencement of the Offer


6 March 2019
 




Expiration Deadline


4.00 p.m. on 12 March 2019
 




Announcement of Results


As soon as reasonably practicable on 13 March 2019




Settlement Date


15 March 2019
 



 
The Company is not under any obligation to accept any tender of Notes for purchase pursuant to the Offer. Tenders of Notes for purchase may be rejected in the sole discretion of the Company for any reason and the Company is not under any obligation to Noteholders to furnish any reason or justification for refusing to accept a tender of Notes for purchase. For example, tenders of Notes for purchase may be rejected if the Offer is terminated, if the Offer does not comply with the relevant requirements of a particular jurisdiction or for any other reason.
 
The Company may, in its sole discretion, extend, re-open, amend, waive any condition of or terminate the Offer at any time, including in respect of the Target Acceptance Amount in respect of the Notes (subject to applicable law and as provided in the Tender Offer Memorandum), and the above times and dates are subject to the Company's right to so extend, re-open, amend and/or terminate the Offer.
 
Noteholders are advised to check with any bank, securities broker or other intermediary through which they hold Notes when such intermediary would need to receive instructions from a Noteholder in order for that Noteholder to be able to participate in, or (in the limited circumstances in which revocation is permitted) revoke their instruction to participate in, the Offer by the deadlines specified above and in the Tender Offer Memorandum.  The deadlines set by any such intermediary and each Clearing System for the submission and withdrawal of Tender Instructions will be earlier than the relevant deadlines specified above and in the Tender Offer Memorandum.
 
Unless stated otherwise, announcements in connection with the Offer will be made (i) by publication through RNS and (ii) by the delivery of notices to the Clearing Systems for communication to Direct Participants.  Such announcements may also be made on the relevant Reuters Insider Screen and/or by the issue of a press release to a Notifying News Service.  Copies of all such announcements, press releases and notices can also be obtained upon request from the Tender Agent, the contact details for which are below.  Significant delays may be experienced where notices are delivered to the Clearing Systems and Noteholders are urged to contact the Tender Agent for the relevant announcements during the course of the Offer.  In addition, Noteholders may contact the Dealer Manager for information using the contact details below.
 
Noteholders are advised to read carefully the Tender Offer Memorandum for full details of and information on the procedures for participating in the Offer.
 
BNP Paribas is acting as Dealer Manager for the Offer and Lucid Issuer Services Limited is acting as Tender Agent.
 
Further Information
 
Questions and requests for assistance in connection with the Offer may be directed to:
 



Dealer Manager




 
BNP Paribas
 
10 Harewood Avenue
London NW1 6AA
United Kingdom
 
Telephone: +44 (0) 20 7595 8668
Attention: Liability Management Group
Email:
liability.management@bnpparibas.com
 



 
Questions and requests for assistance in connection with the delivery of Tender Instructions including requests for a copy of the Tender Offer Memorandum may be directed to the Tender Agent.
 



Tender Agent
 
Lucid Issuer Services Limited
Tankerton Works
12 Argyle Walk
London WC1H 8HA
United Kingdom
 
Telephone: +44 (0)20 7704 0880
Attention: Thomas Choquet]
Email: pearson@lucid-is.com



 
DISCLAIMER This announcement must be read in conjunction with the Tender Offer Memorandum. This announcement and the Tender Offer Memorandum contain important information which should be read carefully before any decision is made with respect to the Offer. If you are in any doubt as to the contents of this announcement or the Tender Offer Memorandum or the action you should take, you are recommended to seek your own financial and legal advice, including as to any tax consequences, immediately from your broker, bank manager, solicitor, accountant or other independent financial or legal adviser. Any individual or company whose Notes are held on its behalf by a broker, dealer, bank, custodian, trust company or other nominee or intermediary must contact such entity if it wishes to participate in the Offer. None of the Company, the Guarantor, the Dealer Manager and the Tender Agent, or any of their respective directors, officers, employees, agents or affiliates make any representation or recommendation whatsoever regarding the Offer, or any recommendation as to whether Noteholders should tender Notes in any of the Offer.
 
None of the Dealer Manager, the Tender Agent and any of their respective directors, officers, employees, agents or affiliates assumes any responsibility for the accuracy or completeness of the information concerning the Offer, the Company, any of its affiliates (including the Guarantor) or the Notes contained in this announcement or in the Tender Offer Memorandum. None of the Company, the Guarantor, the Dealer Manager, the Tender Agent and any of their respective directors, officers, employees, agents or affiliates of such person, is acting for any Noteholder, or will be responsible to any Noteholder for providing any protections which would be afforded to its clients or for providing advice in relation to the Offer, and accordingly none of the Dealer Manager, the Tender Agent and any of their respective directors, officers, employees, agents or affiliates assumes any responsibility for any failure by the Company or the Guarantor to disclose information with regard to the Company or the Notes which is material in the context of the Offer and which is not otherwise publicly available.
 
OFFER AND DISTRIBUTION RESTRICTIONS
 
NOT FOR DISTRIBUTION IN OR INTO OR TO ANY PERSON LOCATED OR RESIDENT IN THE UNITED STATES, ITS TERRITORIES AND POSSESSIONS (INCLUDING PUERTO RICO, THE U.S. VIRGIN ISLANDS, GUAM, AMERICAN SAMOA, WAKE ISLAND AND THE NORTHERN MARIANA ISLANDS), ANY STATE OF THE UNITED STATES OR THE DISTRICT OF COLUMBIA OR TO ANY U.S. PERSON.
 
Neither this announcement nor the Tender Offer Memorandum constitutes an offer to buy or the solicitation of an offer to sell Notes (and tenders of Notes in the Offer will not be accepted from Noteholders) in any circumstances in which such offer or solicitation is unlawful. In those jurisdictions where the securities, blue sky or other laws require the Offer to be made by a licensed broker or dealer and the Dealer Manager or any of the Dealer Manager's affiliates is such a licensed broker or dealer in any such jurisdiction, the Offer shall be deemed to be made by the Dealer Manager or such affiliate, as the case may be, on behalf of the Company in such jurisdiction.
 
The distribution of this announcement and the Tender Offer Memorandum in certain jurisdictions may be restricted by law. Persons into whose possession this announcement or the Tender Offer Memorandum comes are required by each of the Company, the Guarantor, the Dealer Manager and the Tender Agent to inform themselves about, and to observe, any such restrictions.
 
United States
 
The Offer is not being made, and will not be made, directly or indirectly in or into, or by use of the mails of, or by any means or instrumentality of interstate or foreign commerce of or of any facilities of a national securities exchange of, the United States or to any U.S. Person (as defined in Regulation S of the United States Securities Act of 1933, as amended (each a U.S. Person)). This includes, but is not limited to, facsimile transmission, electronic mail, telex, telephone, the internet and other forms of electronic communication. Notes may not be tendered in the Offer by any such use, means, instrumentality or facility from or within the United States or by persons located or resident in the United States or by, or by any person acting for the account or benefit of, a U.S. Person. Accordingly, copies of this announcement, the Tender Offer Memorandum and any other documents or materials relating to the Offer are not being, and must not be, directly or indirectly mailed or otherwise transmitted, distributed or forwarded (including, without limitation, by custodians, nominees or trustees) in or into the United States or to any persons located or resident in the United States or to any U.S. Person. Any purported tender of Notes in the Offer resulting directly or indirectly from a violation of these restrictions will be invalid and any purported tender of Notes made by, or by any person acting for the account or benefit of, a U.S. Person or by a person located in the United States or any agent, fiduciary or other intermediary acting on a non-discretionary basis for a principal giving instructions from within the United States will be invalid and will not be accepted.
 
Each holder of Notes participating in the Offer will represent that it is not a U.S. Person, it is not located in the United States and is not participating in the Offer from the United States, or it is acting on a non-discretionary basis for a principal located outside the United States that is not giving an order to participate in the Offer from the United States and is not a U.S. Person. For the purposes of this and the above paragraph, United States means the United States of America, its territories and possessions (including Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana Islands), any state of the United States of America and the District of Columbia.
 
Italy
 
None of the Offer, this announcement, the Tender Offer Memorandum or any other document or materials relating to the Offer have been or will be submitted to the clearance procedures of the Commissione Nazionale per le Società e la Borsa (CONSOB) pursuant to Italian laws and regulations. The Offer is being carried out in Italy as an exempted offer pursuant to article 101-bis, paragraph 3-bis of the Legislative Decree No. 58 of 24 February 1998, as amended (the Financial Services Act) and article 35-bis, paragraph 4 of CONSOB Regulation No. 11971 of 14 May 1999, as amended. Holders or beneficial owners of Notes that are resident and/or located in Italy can tender Notes for purchase in the Offer through authorised persons (such as investment firms, banks or financial intermediaries permitted to conduct such activities in the Republic of Italy in accordance with the Financial Services Act, CONSOB Regulation No. 16190 of 29 October 2007, as amended, and Legislative Decree No. 385 of 1 September 1993, as amended) and in compliance with any other applicable laws and regulations and with any requirements imposed by CONSOB and any other Italian authority.
 
Each intermediary must comply with the applicable laws and regulations concerning information duties vis-à-vis its clients in connection with the Notes or the Offer.
 
United Kingdom
 
The communication of this announcement, the Tender Offer Memorandum and any other documents or materials relating to the Offer is not being made and such documents and/or materials have not been approved by an authorised person for the purposes of section 21 of the Financial Services and Markets Act 2000. Accordingly, this announcement, the Tender Offer Memorandum and such documents and/or materials are not being distributed to, and must not be passed on to, persons in the United Kingdom other than (i) to those persons in the United Kingdom falling within the definition of investment professionals (as defined in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the Financial Promotion Order)), (ii) to those persons who are within Article 43(2) of the Financial Promotion Order, including existing members and creditors of the Company, (iii) to those persons who are outside the United Kingdom, or (iv) to any other persons to whom it may otherwise lawfully be made under the Financial Promotion Order.
 
France
 
The Offer is not being made, directly or indirectly, to the public in the Republic of France (France). Neither this announcement, the Tender Offer Memorandum nor any other document or material relating to the Offer has been or shall be distributed to the public in France and only (i) providers of investment services relating to portfolio management for the account of third parties (personnes fournissant le service d'investissement de gestion de portefeuille pour compte de tiers) and/or (ii) qualified investors (investisseurs qualifiés), other than individuals, acting for their own account, all as defined in, and in accordance with, Articles L.411-1, L.411-2 and D.411-1 of the French Code monétaire et financier, are eligible to participate in the Offer. This announcement and the Tender Offer Memorandum have not been and will not be submitted for clearance to nor approved by the Autorité des Marchés Financiers.
 
Belgium
 
Neither this announcement, the Tender Offer Memorandum nor any other documents or materials relating to the Offer have been submitted to or will be submitted for approval or recognition to the Belgian Financial Services and Markets Authority (Autoriteit voor financiële diensten en markten / Autorité des services marchés financiers) and, accordingly, no Offer may be made in Belgium by way of a public offering, as defined in Articles 3 and 6 of the Belgian Law of 1 April 2007 on public takeover bids as amended or replaced from time to time. Accordingly, the Offer may not be advertised and the Offer will not be extended, and neither this announcement, the Tender Offer Memorandum nor any other documents or materials relating to the Offer (including any memorandum, information circular, brochure or any similar documents) has been or shall be distributed or made available, directly or indirectly, to any person in Belgium other than "qualified investors" in the sense of Article 10 of the Belgian Law of 16 June 2006 on the public offer of placement instruments and the admission to trading of placement instruments on regulated markets (as amended or replaced from time to time), acting on their own account. Insofar as Belgium is concerned, this announcement and the Tender Offer Memorandum have been issued only for the personal use of the above qualified investors and exclusively for the purpose of the Offer. Accordingly, the information contained in this announcement and the Tender Offer Memorandum may not be used for any other purpose or disclosed to any other person in Belgium.




This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
 
END
 
 
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