FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
For the month of October
Commission File Number
WATERFORD WEDGWOOD PLC
(Translation of registrant's name into English)
1/2 UPPER HATCH ST, DUBLIN 2, IRELAND
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F.
Form 20-F..X.. Form 40-F.....
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes ..... No ..X...
If "Yes" is marked, indicate below the file number assigned to the registrant
in connection with Rule 12g3-2(b): 82- ________
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS NOT FOR RELEASE,
PUBLICATION OR DISTRIBUTION IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA OR
JAPAN
For Immediate Release
21 October 2004
Possible Cash Offer for Royal Doulton plc
Proposed Fully Underwritten EUR100 million Rights Issue
New Banking Facilities Secured
Trading Update
Waterford Wedgwood plc, ("the Group" or "Waterford Wedgwood") the luxury
lifestyle group, today announces that it is in advanced discussions about a
possible cash offer for Royal Doulton plc ("Royal Doulton"), one of the world's
leading chinaware manufacturers and owner of the Royal Doulton, Minton and Royal
Albert brands.
The Group also announces a proposed fully underwritten rights issue of
approximately EUR100 million, and that it has secured new banking facilities and
repaid its existing senior facilities in their entirety.
Offer for Royal Doulton Under Discussion
The Boards of Waterford Wedgwood and Royal Doulton are in advanced discussions
regarding a possible recommended offer for Royal Doulton by Waterford Wedgwood.
Due diligence has been completed to the satisfaction of Waterford Wedgwood, but
certain other matters remain to be resolved and consequently there can be no
certainty that a formal offer will be made. Any formal offer is expected to be
12 pence in cash per Royal Doulton share and, subject to the resolution of these
matters, the Board of Royal Doulton intends to recommend such an offer.
Waterford Wedgwood currently holds 21.16% of Royal Doulton shares and these
would not be the subject of the possible offer. Sir Anthony O'Reilly, Chairman
of Waterford Wedgwood, and Mr Peter John Goulandris, Deputy Chairman of
Waterford Wedgwood, between them own a further 3.99% of Royal Doulton shares;
these would be the subject of the possible offer.
A further announcement will be made in due course.
Fully Underwritten EUR100 million Rights Issue
- - Proposed Rights Issue on the basis of 5 New Stock Units for every 3 Stock
Units held by qualifying stockholders (on a record date to be determined)
at EUR0.06 per New Stock Unit (approximately 1.66 billion New Stock
Units). Rights Issue is fully underwritten by a company controlled by Sir
Anthony O'Reilly and Mr Peter John Goulandris (70% of the Rights Issue),
and by Davy (30% of the Rights Issue)
- - Rights Issue price represents a discount of 53.8% to the closing price of
EUR0.13 per Stock Unit on 20 October, 2004
- - O'Reilly and Goulandris families have confirmed their intention to take up
their full rights entitlements
- - Rights Issue fully covers the cost of the equity component of the possible
Royal Doulton acquisition
- - Rights Issue is conditional on an announcement by the Group of a firm
intention to make an offer for Royal Doulton but is not conditional on
completion of the Royal Doulton acquisition
- - Rights Issue is also conditional on, inter alia, the grant by the Irish
Takeover Panel of a waiver under Rule 9 of the Irish Takeover Rules and on
independent shareholder approval, each in respect of the underwriting
arrangements. It is also conditional on shareholders approving an
increase in the authorised share capital of the Group and the renewal of
various allotment authorities.
New Banking Arrangements Secured
A new facility led by Burdale Financial Limited, a subsidiary of Wachovia
Corporation, replaces in full the previous bank syndicate. The new facility is
secured on the assets of the Group and has a term of up to four years. With less
restrictive covenants, the new facility offers greater flexibility and scope. It
has also facilitated the repayment of existing senior facilities.
Strategic and Trading Update
Our Plan for Growth, announced earlier this year, is underway. Our working
capital programme will be completed by December 2005 with major advances
expected to be made by March 2005. The capacity utilisation of our Wedgwood
factories will be transformed with concomitant efficiencies by the acquisition
of Royal Doulton, should that take place. Focused marketing initiatives have
been introduced to drive revenue growth over the next few years.
However, sales for the six months to 30 September 2004 were disappointing at
EUR356 million. On a like-for-like basis (excluding exchange and All-Clad),
sales were 5% below the corresponding period last year and, as a consequence,
the pre-tax result for the six months is likely to be significantly below
consensus market expectations. Some of the reduction in sales is because we have
refocused our retail distribution in the United States.
At Waterford Wedgwood's Annual General Meeting held today in Dublin, the
following comments were made:
Sir Anthony O'Reilly, Chairman of Waterford Wedgwood, said:
"The past three years have been turbulent and we would not deny that the
financial performance of the company continues to disappoint us all.
"Although the current environment remains challenging, in the past six months we
have made many changes and put in place some important foundations for future
growth. Today is an important day in the history of Waterford Wedgwood.
"The possible acquisition of Royal Doulton would transform Wedgwood. The
benefits of such a deal are immediately apparent. With Royal Doulton's
restructuring largely completed, we could add Royal Doulton's revenues to our
top-line sales without greatly increasing our costs. This would increase the
profitability of the combined businesses.
"The fact that the O'Reilly and Goulandris families are underwriting most of the
Rights Issue is proof positive of our belief in Waterford Wedgwood and its
world-class portfolio of products."
Redmond O'Donoghue, Group Chief Executive, said:
"Today's announcements are very significant. If the acquisition of Royal Doulton
takes place, the very material investment that we have made in recent years in
our manufacturing facilities will enable us to integrate Royal Doulton with
minimal disruption and lay down the foundation for improved profitability.
"Our new bank facility provides us with a greater degree of flexibility,
enhances our liquidity and allows us the freedom to operate our business,
focusing on cash generation in the short-term. While trading performance in the
six months to 30 September was behind last year, we are confident that planned
marketing initiatives and the previously announced cost saving measures will
lead to a reversal of this trend."
For further information, please contact:
Waterford Wedgwood +353 (0) 1 4781 855
Redmond O'Donoghue, CEO
Paul D'Alton, Chief Financial Officer
Lazard (Enquiries re Possible Offer) +44 (0) 207 187 2000
Nicholas Shott/David Reitman
Davy (Rights Issue) +353 (0) 1 6796 363
Hugh McCutcheon/Eugenee Mulhern
College Hill (Investor Relations) + 44 (0) 7798 843276
Kate Pope/Mark Garraway
Powerscourt (UK and International Media) + 44 (0) 20 7236 5619
Rory Godson/John Murray
Dennehy Associates (Irish Media) + 353 (1) 676 4733
Michael Dennehy
The contents of this announcement have been prepared by and are the sole
responsibility of Waterford Wedgwood, and have been approved by J&E Davy
("Davy") for the purposes of section 21(2)(b) of the Financial Services and
Markets Act 2000 of the United Kingdom. Davy is acting for Waterford Wedgwood
and no one else in connection with the Rights Issue and will not be responsible
to anyone other than Waterford Wedgwood for providing the protections afforded
to the clients of Davy or for providing advice in connection with the Rights
Issue.
Lazard & Co., Limited, is acting for Waterford Wedgwood in connection with the
possible offer and no-one else, and will not be responsible to anyone other than
Waterford Wedgwood for providing the protections afforded to clients of Lazard &
Co., Limited or for providing advice in relation to the possible offer.
This announcement shall not constitute, or form part of, an offer of, or the
solicitation of any offer, to subscribe for or buy any of the Rights Issue Stock
Units to be issued or sold in connection with the Rights Issue. Offers should
only be made on the basis of the information contained in the Prospectus to be
issued in due course in connection with the Rights Issue and any supplements
thereto. The Prospectus will contain detailed information about the Rights
Issue, Waterford Wedgwood and its management, as well as financial information.
The offer of the Rights Issue Stock Units in certain jurisdictions may be
restricted by law and therefore potential investors should inform themselves
about and observe any such restrictions. This announcement does not contain or
constitute an offer of securities for sale in the United States. The securities
referred to herein have not been and will not be registered under the US
Securities Act of 1933, as amended (the "US Securities Act") and may not be
offered or sold in the United States absent registration or an exemption from
registration under the US Securities Act. This announcement and the information
contained herein is not for release, publication or distribution in or into the
United States, Canada, Australia or Japan.
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, thereunto duly authorized.
Waterford Wedgwood PLC
(Registrant)
By: Patrick Dowling
(Signature)*
Date: 21 October 2004