SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Private
Issuer
Pursuant to Rule 13a -16 or 15d -16
of
the Securities Exchange Act of 1934
Report on Form 6-K of 20 March 2006
The BOC Group plc
Chertsey Road, Windlesham,
Surrey GU20 6HJ
England
(Name and address of registrant's principal executive office)
Indicate by check mark whether the registrant files or will file annual reports
under cover of Form 20-F or Form 40-F.
Form 20-F X Form 40-F
--- ---
Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(1):
Yes: |_| No: |X|
Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(7):
Yes: |_| No: |X|
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|
Enclosures: Shareholder communication regarding the pre-conditional
recommended cash offer for The BOC Group plc by Linde AG
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THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. IF YOU ARE IN
ANY DOUBT AS TO THE ACTION YOU SHOULD TAKE YOU ARE RECOMMENDED TO SEEK YOUR OWN
PERSONAL FINANCIAL ADVICE FROM YOUR STOCKBROKER, BANK MANAGER, SOLICITOR,
ACCOUNTANT OR OTHER FINANCIAL ADVISOR DULY AUTHORISED UNDER THE FINANCIAL
SERVICES AND MARKETS ACT 2000. IF YOU HAVE SOLD OR TRANSFERRED ALL YOUR ORDINARY
SHARES IN THE BOC GROUP plc ("BOC") YOU SHOULD FORWARD THIS DOCUMENT TO THE
PURCHASER OR TRANSFEREE OR TO THE PERSON THROUGH WHOM THE SALE OR TRANSFER WAS
EFFECTED FOR TRANSMISSION TO THE PURCHASER OR TRANSFEREE.
THIS DOCUMENT DOES NOT CONSTITUTE AN OFFER OR INVITATION TO PURCHASE ANY
SECURITIES. BOC SHAREHOLDERS ARE ADVISED TO READ CAREFULLY THE FORMAL
DOCUMENTATION IN RELATION TO THE OFFER ONCE IT HAS BEEN DESPATCHED.
[THE BOC GROUP logo] Registered Office:
Chertsey Road
Windlesham
Surrey
GU20 6HJ
Registered in England No. 22096
17 March 2006
To the holders of BOC Ordinary shares and, for information only, to the holders
of 12 1/4% Unsecured Loan Stock 2012/17 and participants in BOC share option
schemes.
Dear Shareholder
Pre-conditional recommended cash offer for BOC by Linde AG
On 30 January 2006 I wrote to you concerning the announcement made on 24 January
2006 that BOC had received an unsolicited preliminary proposal from Linde AG
("Linde"). The Board of directors of BOC (the "Board") stated in the
announcement that it had unanimously rejected the proposal because of its
pre-conditions and its failure to value fully the growth prospects of BOC.
Linde also issued an announcement on 24 January 2006 that confirmed its approach
and sought the support of the BOC Board for a proposal that was based on an all
cash offer of 1,500 pence per share. After considering Linde's announcement and
having regard to both the price being offered and the lack of certainty that a
transaction would complete, the Board re-stated its unanimous rejection of the
proposal at the AGM.
Since then Linde has improved its proposal in terms of the price to be offered
and has clarified the availability of finance and the viability of its strategy
to obtain the critical regulatory approvals.
On 6 March the Boards of directors of Linde and BOC announced (the
"Announcement") that they had reached agreement on the terms of a
pre-conditional recommended cash offer by Linde for the entire issued and to be
issued share capital of BOC (the "Offer"). This letter contains a summary of
certain key issues set out in the Announcement. A copy of the full Announcement
is available on our website (www.boc.com).
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The terms and conditions of the Offer
Under the terms of the Offer, BOC shareholders will receive 1,600 pence in cash
for each BOC Share and BOC ADS holders will receive 3,200 pence in cash for each
BOC ADS (each BOC ADS representing two BOC Shares). The Offer values BOC's
existing issued share capital at approximately (pound)8.2 billion.
It is intended that the Offer, the making of which will be subject to certain
pre-conditions referred to below being satisfied, will be implemented by way of
a Court-approved scheme of arrangement under section 425 of the Companies Act
(the "Scheme").
A Loan Note alternative (interest-bearing debt securities) will also be made
available to all BOC shareholders other than to those in the United States,
Canada, Australia or Japan (unless an exemption under the relevant securities
laws is applicable). This may improve the tax position for some shareholders.
Shareholders should take advice on this from their financial advisers in due
course.
The Offer will not be made until regulatory clearances have either been obtained
from both US and European competition authorities or until such pre-conditions
have been waived by Linde. If these pre-conditions have not been satisfied by 31
May 2006, BOC will be permitted to pay a second interim dividend to BOC
shareholders, up to a maximum amount of 27 pence per BOC Share. If payable, the
amount of the dividend would be equal to 3.375 pence per BOC Share for each
consecutive period of seven days (but will not accrue for part of such a period)
during the period commencing 1 June 2006 and ending on the earlier of (a) 26
July 2006 and (b) the date on which Linde announces the satisfaction of the
pre-conditions. If the pre-conditions have been satisfied by 31 May 2006, no
part of the dividend will either accrue or be paid.
Timing
It is expected that the Scheme document and proxy form will be posted to BOC
shareholders shortly after the satisfaction or waiver of the regulatory
pre-conditions. It is not yet possible to give an indication of when this will
be achieved. Linde is confident that the pre-conditions will be satisfied in a
timely manner, subject to agreement with the appropriate authorities on
reasonable divestments.
Background to the Board's decision
BOC is one of the world's leading industrial gases companies. BOC's strong
financial performance over recent years has produced consistent improvements in
its return on capital employed and, with its excellent team of employees driving
the business, has delivered significant value to BOC shareholders.
In assessing Linde's proposal, the BOC Board has had regard to both the price
being offered and the likelihood that a transaction would complete. The BOC
Board, which has been so advised by JPMorgan Cazenove and Merrill Lynch,
considers the terms of the Offer to be fair and reasonable. In providing their
advice, JPMorgan Cazenove and Merrill Lynch have taken into account the
commercial assessments of the directors of BOC. The Offer is materially more
attractive than Linde's initial proposal and represents a significant premium to
the BOC share price prior to the approach from Linde; a premium of approximately
40 per cent. to the average closing price of 1,143 pence per BOC Share during
the three months up to and including 23 January 2006 (being the last business
day prior to the announcement by BOC that it had received an approach from
Linde). In the view of the BOC Board it is a full and fair price, taking into
account the prospects for the BOC business and the strategic options available
to the BOC Group. In light of the financing arrangements which Linde has made
and its plans to address any concerns raised by competition authorities, the BOC
Board believes that this is an offer that will ultimately be delivered to BOC
shareholders.
Accordingly, the BOC Board intends to recommend that BOC shareholders vote in
favour of the Scheme, which it considers to be in the best interests of BOC
shareholders as a whole.
Rationale for the combination
The transaction provides the opportunity for Linde and BOC to create a leading
worldwide focused industrial gases business with combined gas and engineering
sales of around (euro)11.9 billion. The combination of Linde and BOC would
result in a much larger, global gas player with complementary
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products and geographic positions. Such a combination would be very well
positioned in the key high growth products and regions of the gases industry and
would be better able to serve its customers worldwide.
In addition to the improved growth prospects of the enlarged group, Linde
believes the combination creates an opportunity to deliver synergies through the
combined group, prior to any one-off expenses, of approximately (euro)250
million per annum, to be fully realised during 2009. These synergies are
expected to be predominantly based on joint supply management optimisation and
combined procurement volumes and a reduction in selling, general and
administrative expenses.
Through a rapid but smooth integration and transformation, as well as the mutual
exchange of best practices in all functions, regions and market segments, the
combined group will strive to unlock value opportunities for shareholders,
customers and employees. Linde believes that the acquisition will further
enhance its proven capability to execute a profitable growth strategy and is
expected to be accretive in terms of earnings per share during 2008.
Management, employees and pensions
Linde attaches great importance to the skills and experience of the existing
management and employees of BOC. Linde and BOC's businesses are very
complementary on a geographic basis and Linde expects that BOC managers and
employees will play an important role in the enlarged group as well as
benefiting from greater opportunities within it. Accordingly, it is Linde's
intention to employ the best talents in the combined group. Further, Linde has
confirmed that the existing employment rights, including pension rights, of all
employees of BOC will be fully safeguarded.
Linde, BOC and the trustees of the BOC UK Defined Benefit Pension Schemes
(having regard to the interests of active, deferred and retired members) have
reached agreement in respect of BOC's obligations in relation to the funding of
such schemes following completion of the Offer and the agreement has been
cleared by the Pensions Regulator.
Share options
Participants in BOC Group's share schemes will be contacted regarding the effect
of the Offer on their rights and appropriate proposals will be made to
participants in due course (including a cashless exercise facility). Details of
these proposals will be set out in the Scheme document and in documents to be
sent to option holders.
Overseas shareholders
The availability of the Offer to shareholders resident in a country outside the
UK may be affected by the laws of that country. Shareholders who are not
resident in the UK should inform themselves about and observe any applicable
requirements.
What happens next?
Further information will be contained in the Scheme document when posted,
subject to fulfilment or waiver of the pre-conditions of the Offer, and until
then there is no action that BOC shareholders can take.
You may wish to check that your registered details are recorded correctly. If
there is an error you should write to Lloyds TSB Registrars, Shareholder
Services, The Causeway, Worthing, West Sussex, BN99 6DA, England.
Any correspondence sent to Lloyds TSB Registrars should refer to The BOC Group
plc, stating your full registered name and address and, if available, your full
account number. For The BOC Group this starts with 0385.
We will keep you informed, as appropriate, of further developments.
Yours faithfully
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Rob Margetts CBE
Chairman
This document is a summary and should be read accordingly. Except where
otherwise indicated, capitalised terms in this document have the same meanings
as defined in the Announcement. The full text of the Announcement can be
obtained on written request from The Company Secretary, The BOC Group plc,
Chertsey Road, Windlesham, Surrey, GU20 6HJ, England. It may also be viewed on
The BOC Group website BOC.com.
The directors of The BOC Group plc accept responsibility for the information
contained in this letter. To the best of the knowledge and belief of the
directors of The BOC Group plc (who have taken all reasonable care to ensure
that such is the case), the information contained in this letter is in
accordance with the facts and does not omit anything likely to affect the import
of such information.
JPMorgan Cazenove, which is regulated in the UK by the FSA, is acting
exclusively for BOC and no one else in connection with the Offer and will not be
responsible to anyone other than BOC for providing the protections afforded to
clients of JPMorgan Cazenove nor for providing advice in relation to the Offer
or any other matters referred to in this document.
JPMorgan Cazenove has given and not withdrawn its written consent to the issue
of this document with the inclusion of the references to its name in the form
and context in which they appear.
Merrill Lynch is acting exclusively for BOC and no one else in connection with
the Offer and will not be responsible to anyone other than BOC for providing the
protections afforded to clients of Merrill Lynch or for providing advice in
relation to the Offer or any other matters referred to in this document.
Merrill Lynch has given and not withdrawn its written consent to the issue of
this document with the inclusion of the references to its name in the form and
context in which they appear.
The Offer, including the Loan Note alternative, will not be made, directly or
indirectly, in or into and will not be capable of acceptance in or from Canada,
Australia or Japan (unless an exemption under the relevant securities laws is
applicable).
The Loan Notes to be issued in connection with the Offer may not (unless an
exemption under the relevant securities laws is applicable) be offered, sold,
resold, delivered or transferred, directly or indirectly, in or into the United
States, Canada, Australia or Japan or any other jurisdiction if to do so would
constitute a violation of the relevant laws of, or require registration thereof
in, such jurisdiction or to, or for the account or benefit of, a person located
in the United States, Canada, Australia or Japan.
Notice to US Investors in BOC: The Offer relates to the shares of a UK company
and is proposed to be made by means of a scheme of arrangement provided for
under English company law. A transaction effected by means of a scheme of
arrangement is not subject to the tender offer rules under the US Securities
Exchange Act. Accordingly, the Offer is subject to the disclosure requirements
and practices applicable in the UK to schemes of arrangement which differ from
the disclosure requirements of the US tender offer
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rules. Financial information included in the relevant documentation will have
been prepared in accordance with accounting standards applicable in the UK and
Germany that may not be comparable to the financial statements of US companies.
If Linde exercises its right to implement the Offer by way of a takeover offer,
the Offer will be made in compliance with the applicable US laws and
regulations.
Forward Looking Statements
This document includes "forward-looking statements" under United States
securities laws. These statements are based on the current expectations of the
management of BOC and Linde and are naturally subject to uncertainty and changes
in circumstances. The forward-looking statements contained herein include
statements about the expected effects on Linde of the Offer, the expected timing
and scope of the Offer, anticipated earnings enhancements, estimated cost
savings and other synergies, costs to be incurred in achieving synergies,
potential disposals and other strategic options and all other statements in this
document other than historical facts. Forward-looking statements include,
without limitation, statements typically containing words such as "intends",
"expects", "anticipates", "targets", "estimates" and words of similar import. By
their nature, forward-looking statements involve risk and uncertainty because
they relate to events and depend on circumstances that will occur in the future.
There are a number of factors that could cause actual results and developments
to differ materially from those expressed or implied by such forward-looking
statements. These factors include, but are not limited to, the satisfaction of
the pre-conditions and the conditions to the Offer, and Linde's ability to
successfully integrate the operations and employees of BOC, as well as
additional factors, such as changes in economic conditions, changes in the level
of capital investment by the semiconductor industry, success of business and
operating initiatives and restructuring objectives, customers' strategies and
stability, changes in the regulatory environment, fluctuations in interest and
exchange rates, the outcome of litigation, government actions and natural
phenomena such as floods, earthquakes and hurricanes. Other unknown or
unpredictable factors could cause actual results to differ materially from those
in the forward-looking statements. Neither BOC nor Linde undertake any
obligation to update publicly or revise forward-looking statements, whether as a
result of new information, future events or otherwise, except to the extent
legally required.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant, The BOC Group plc, has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Date: 20 March 2006
By: /s/ Carol Hunt
-------------------------------
Name: Carol Hunt
Title: Deputy Company Secretary
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