20 March 2008

Recommended cash offer for ArmorGroup International plc by G4S (March 2008) Limited (a wholly-owned subsidiary of G4S plc)


Summary


The boards of directors of G4S and ArmorGroup are pleased to announce that they have reached agreement on the terms of a recommended cash offer for ArmorGroup by Bidco (a wholly-owned subsidiary of G4S) at a price of 80 pence in cash for each ArmorGroup Share, valuing the entire issued and to be issued share capital of ArmorGroup at approximately £43.6 million.


ArmorGroup’s proposed final dividend in respect of the year ended 31 December 2007 of 1.5 pence per ArmorGroup Share, announced by ArmorGroup today, is included in the Offer Price and hence such final dividend will not be paid if the Offer becomes or is declared wholly unconditional.


G4S is the world’s leading international security solutions group, which specialises in assessing current and future risks and developing secure solutions to minimise their impact across a wide range of geographic markets and business sectors. G4S is a major provider of risk management and protection to governments and major corporate customers around the world and is an expert in all aspects of local and international secure logistics.


ArmorGroup is a leading provider of defensive, protective security services to national governments, multinational corporations and international peace and security agencies operating in hazardous environments. It has approximately 8,500 employees and 38 offices in 27 countries.


The price of 80 pence for each ArmorGroup Share represents:

- a premium of approximately 127.0 per cent. to 35.25 pence, being the Closing Price per ArmorGroup Share on 26 February 2008, the Business Day prior to ArmorGroup’s announcement that it was in discussions with a number of parties regarding a possible offer for ArmorGroup; and

- a premium of approximately 156.8 per cent. to 31.15 pence, being the average Closing Price per ArmorGroup Share over the three month period up to and including 26 February 2008.


The ArmorGroup Board, which has been so advised by Rothschild, considers the terms of the Offer to be fair and reasonable. In providing its advice, Rothschild has taken into account the commercial assessments of the ArmorGroup Directors. Accordingly, the ArmorGroup Board intends unanimously to recommend that ArmorGroup Shareholders accept the Offer, as the ArmorGroup Directors who hold ArmorGroup Shares have themselves irrevocably undertaken to do in respect of their own beneficial holdings (and, where applicable, those of their wives) totalling, in aggregate, 1,231,049 ArmorGroup Shares, representing approximately 2.30 per cent. of ArmorGroup’s existing issued share capital.


Bidco has also received irrevocable undertakings from Baird Capital Partners Europe Limited, Industrial & Financial Investments Co. and Lansdowne Partners Limited to accept, or procure the acceptance of, the Offer in respect of their entire ArmorGroup shareholdings totalling, in aggregate, 27,096,842 ArmorGroup Shares, representing approximately 50.73 per cent. of ArmorGroup’s existing issued share capital.


Accordingly, Bidco has received, in aggregate, irrevocable undertakings to accept the Offer in respect of 28,327,891 ArmorGroup Shares representing approximately 53.03 per cent. of ArmorGroup’s existing issued share capital.


Commenting on today's announcement, Nick Buckles, Chief Executive Officer of G4S, said:

“The acquisition of ArmorGroup represents an important and logical step in delivering our strategy for accelerated growth and development and we are pleased that the ArmorGroup Board has decided to unanimously recommend the Offer. ArmorGroup’s experience in providing protective security and other related services, its international presence and strong customer relationships means that it is a natural fit with our existing business.”
Commenting on the Offer, Sir Malcolm Rifkind, Chairman of ArmorGroup, said:

“The Offer by Bidco announced today gives ArmorGroup shareholders the prospect of a cash exit at an attractive price when considered against the potential of ArmorGroup as a standalone business. The ArmorGroup Board believes that Bidco’s Offer is full and fair and, accordingly, the ArmorGroup Board is pleased to recommend it to shareholders.

The ArmorGroup Board also believes that G4S’s proven track record of integrating and developing companies it has acquired, its strong management and financial resources and its commitment to high quality operating standards will help to strengthen ArmorGroup’s position in what continues to be a developing market.”
Greenhill is acting as financial adviser to G4S and Rothschild is acting as financial adviser to ArmorGroup.


This summary should be read in conjunction with the accompanying full text of the following Announcement (including the appendices) which sets out further details of the Offer and which forms an integral part of this Announcement.

Appendix I sets out the conditions and certain further terms of the Offer. Appendix II contains source notes relating to certain information contained in this Announcement. Appendix III contains certain details relating to the irrevocable undertakings given by the ArmorGroup Directors and certain other ArmorGroup Shareholders. Certain terms used in this Announcement are defined in Appendix IV to this Announcement.


Enquiries:


G4S Tel: +44 (0) 1293 554400
Debbie McGrath (Group Communications Director)
Helen Parris (Director of Investor Relations)

Greenhill (financial adviser to G4S) Tel: +44 (0)20 7198 7400
Simon Borrows
David Wyles
Ben Loomes

Deutsche Bank Toby Clark Tel: +44 (0)20 7545 8000

Bell Pottinger Corporate & Financial (PR adviser to G4S) Tel: +44 (0)20 7861 3030
Stephen Benzikie
Olly Scott

ArmorGroup Patrick Toyne Sewell (Director of Communications) Tel: +44 (0)20 7808 5800 or +44 (0)7767 498 195

Rothschild (financial adviser to ArmorGroup) Tel: +44 (0)20 7280 5000
Philip Swatman
Guy Mullin-Henderson
Dev Tanna

Hoare Govett (broker to ArmorGroup) Tel: +44 (0)20 7678 8000
Ranald McGregor-Smith


Greenhill, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for G4S and Bidco and no-one else in connection with the Offer and will not be responsible to anyone other than G4S or Bidco for providing the protections afforded to clients of Greenhill nor for providing advice in relation to the Offer, the content of this Announcement, or any transaction, arrangement or matter referenced herein.

Rothschild, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for ArmorGroup and no-one else in connection with the Offer and will not be responsible to anyone other than ArmorGroup for providing the protections afforded to clients of Rothschild nor for providing advice in relation to the Offer, the content of this Announcement, or any transaction, arrangement or matter referenced herein.

Deutsche Bank, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for G4S and Bidco and no-one else in connection with the Offer and will not be responsible to anyone other than G4S and Bidco for providing the protections afforded to clients of Deutsche Bank nor for providing advice in relation to the Offer, the content of this Announcement, or any transaction, arrangement or matter referenced herein.

Hoare Govett, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for ArmorGroup and no-one else in connection with the Offer and will not be responsible to anyone other than ArmorGroup for providing the protections afforded to clients of Hoare Govett nor for providing advice in relation to the Offer, the content of this Announcement, or any transaction, arrangement or matter referenced herein.

This Announcement is not intended to and does not constitute, or form any part of, an offer to sell or the solicitation of an offer to subscribe for or buy any securities, nor shall there be any sale, issue or transfer of the securities referred to in this Announcement in any jurisdiction in contravention of any applicable law. The Offer will be made solely by means of the Offer Document and, in the case of certificated ArmorGroup Shares, the Form of Acceptance accompanying the Offer Document.

This Announcement is not for publication or distribution, directly or indirectly, in or into the United States of America (including its territories and possessions, any state of the United States and the District of Columbia). The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended. Any Offer in the United States will be made pursuant to an exemption from certain US tender offer rules provided by Rule 14(d)-1(c) under the U.S. Exchange Act of 1934, as amended (the “Exchange Act”), if available.

The availability of the Offer to ArmorGroup Shareholders who are citizens or residents of jurisdictions outside the United Kingdom may be affected by the laws of their relevant jurisdiction. Such persons should inform themselves of, and observe, any applicable legal or regulatory requirements of their jurisdiction. If you remain in any doubt, you should consult your professional adviser in the relevant jurisdiction without delay.

Any acceptance or other response to the Offer should be made only on the basis of information referred to in the Offer Document which Bidco intends to despatch as soon as is reasonably practicable to ArmorGroup Shareholders and, for information only, to participants in the ArmorGroup Share Schemes.

The G4S Directors and the Bidco Directors accept responsibility for the information contained in the above summary and this Announcement other than information relating to the ArmorGroup Group, the ArmorGroup Directors and their immediate families, related trusts and controlled companies. To the best of the knowledge and belief of the G4S Directors and the Bidco Directors (who have taken all reasonable care to ensure that such is the case), the information contained in this summary and the attached Announcement for which they accept responsibility is in accordance with the facts and does not omit anything likely to affect the import of such information.

The ArmorGroup Directors accept responsibility for the information in the above summary and this Announcement relating to them and their immediate families, related trusts and controlled companies and the ArmorGroup Group.

This Announcement has been prepared for the purposes of complying with English law, the City Code and the Listing Rules and information disclosed may not be the same as that which would have been disclosed if this Announcement had been prepared in accordance with the laws of jurisdictions outside England.

The Offer will be subject to the applicable rules and regulations of the Financial Services Authority, the London Stock Exchange and the City Code.

Dealing Disclosure Requirements

Under the provisions of Rule 8.3 of the Code, if any person is, or becomes, "interested" (directly or indirectly) in 1% or more of any class of "relevant securities" of ArmorGroup, all "dealings" in any "relevant securities" of that company (including by means of an option in respect of, or a derivative referenced to, any such "relevant securities") must be publicly disclosed by no later than 3.30 p.m. (London time) on the Business Day following the date of the relevant transaction. This requirement will continue until the date on which the Offer becomes, or is declared, unconditional as to acceptances or is otherwise withdrawn or on which the "offer period" otherwise ends. If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire an "interest" in "relevant securities" of ArmorGroup, they will be deemed to be a single person for the purpose of Rule 8.3.

Under the provisions of Rule 8.1 of the Code, all "dealings" in "relevant securities" of ArmorGroup by Bidco, G4S or ArmorGroup, or by any of their respective "associates", must be disclosed by no later than 12.00 noon (London time) on the Business Day following the date of the relevant transaction.

A disclosure table, giving details of the companies in whose "relevant securities" "dealings" should be disclosed, and the number of such securities in issue, can be found on the Panel's website at www.thetakeoverpanel.org.uk

"Interests in securities" arise, in summary, when a person has long economic exposure, whether conditional or absolute, to changes in price of securities. In particular, a person will be treated as having an "interest" by virtue of the ownership or control of securities, or by virtue of any option in respect of, or derivative referenced to, securities.

Terms in quotation marks are defined in the Code, which can also be found on the Panel's website. If you are in any doubt as to whether or not you are required to disclose a "dealing" under Rule 8 of the Code, you should contact an independent financial adviser authorised under the Financial Services and Markets Act 2000 or consult the Panel’s website or contact the Panel on telephone number +44 (0)20 7638 0129.

Forward-looking Statements

This Announcement contains statements about G4S, Bidco and ArmorGroup that are or may be forward looking statements. All statements other than statements of historical facts included in this Announcement may be forward looking statements. Forward looking statements often use words such as “target”, “plan”, “believe”, “expect”, “aim”, “intend”, “will”, “should”, “could”, “would”, “may”, “consider”, “anticipate”, “estimate”, “synergy”, “cost saving”, “project”, “goal” or “strategy” or words or terms of similar substance or the negative thereof. Forward looking statements include statements relating to the following: (i) the expected timetable for implementing the Offer, future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects of G4S, Bidco or ArmorGroup; (ii) business and management strategies and the expansion and growth of G4S’s, Bidco’s or ArmorGroup’s operations and potential synergies resulting from the acquisition of ArmorGroup by Bidco; and (iii) the effects of government regulation on G4S’s, Bidco’s or ArmorGroup’s business.

These forward looking statements are not guarantees of future performance. They have not been reviewed by the auditors of G4S or ArmorGroup. These forward looking statements involve known and unknown risks, uncertainties and other factors which may cause them to differ from the actual results, performance or achievements expressed or implied by such forward looking statements. These forward looking statements are based on numerous assumptions regarding the present and future business strategies of such persons and the environment in which each will operate in the future. Investors are cautioned not to place undue reliance on the forward looking statements, which speak only as of the date they were made.

All subsequent written and oral forward-looking statements attributable to G4S or ArmorGroup or persons acting on behalf of either of them are expressly qualified in their entirety by the cautionary statements above. Subject to compliance with the City Code, none of G4S, Bidco or ArmorGroup intends, or undertakes any obligation, to update any information contained in this Announcement.

ArmorGroup Shares in issue
In accordance with Rule 2.10 of the Code, ArmorGroup confirms that it has 53,416,509 ordinary shares of 1 pence each in issue and admitted to trading on the Official List under the UK ISIN code GB00B049FG32.