Colt rejects Fidelity offer

Source: Colt

The independent directors of Colt Group S.A. ("Colt" or "the Company") note the announcement today of a cash offer for the ordinary shares in Colt not already owned by FMR LLC, FIL Limited and certain affiliated parties (together "Fidelity") at a price of 190 pence per share (the "Offer").

The independent directors have appointed Barclays Bank PLC acting through its Investment Bank ("Barclays") as independent financial adviser.

The independent directors believe that the Offer undervalues the Company and its prospects and accordingly the independent directors, having been so advised by Barclays, consider that the financial terms of the Offer are not fair to the independent shareholders of Colt. The independent directors believe that the financial terms of the Offer may be considered by some shareholders to be acceptable in the circumstances, and accordingly make no recommendation to shareholders whether or not to accept the Offer.

Over the course of 2015, the management of Colt has been working on a plan to refocus the Company's activities and significantly improve its financial performance (the "New Business Plan"). The Board has provisionally approved the New Business Plan and further details will be announced in due course.

The independent directors' assessment of what can be achieved through delivery of the New Business Plan has been an important factor in reaching the conclusion that the Offer undervalues the Company and its prospects. The independent directors also believe that a sale of the Company to a third party purchaser could potentially achieve a price significantly higher than the Offer. However, the independent directors note the commitment by Fidelity that it will not sell or take any other steps to dispose of its Colt Shares to any third party prior to 31 December 2016, and believe that without a change of approach by Fidelity there is no prospect of obtaining that additional value for shareholders.

The independent directors recognise that some shareholders may prefer the certainty provided by a cash offer now and accordingly, if requested by Fidelity, the independent directors will facilitate the Offer by convening a meeting of the shareholders to consider the resolutions required to implement the Offer and, if those resolutions are passed, will agree to the termination of the Relationship Agreement.
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