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  News – 31 July 2007  
     
  AMSTRAD OFFER ANNOUNCEMENT  
     
 

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  Not for release, publication or distribution in whole or in part in, into or from any jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction  
     
 
RECOMMENDED CASH OFFER
by
SKY DIGITAL SUPPLIES LIMITED
a wholly-owned subsidiary of
BRITISH SKY BROADCASTING GROUP PLC
for
AMSTRAD PLC
 
     
  Summary  
  • The Boards of Sky and Amstrad are pleased to announce that they have agreed the terms of a recommended cash offer to be made by Sky Digital Supplies, a wholly-owned subsidiary of Sky, for the entire issued and to be issued share capital of Amstrad.

• The Offer is 150 pence in cash for each Amstrad Share, valuing the entire issued share capital of Amstrad at approximately £125.0 million.

• The Offer represents a premium of approximately 23.7 per cent. to the Closing Price of 121.25 pence for each Amstrad Share on 30 July 2007, the last business day prior to the date of this announcement.

• A Loan Note Alternative is being made available to Amstrad Shareholders (other than Restricted Overseas Persons) who validly accept the Offer on the basis of £1 in nominal value of Loan Notes for each £1 of cash consideration.
 
  The Amstrad Directors, who have been so advised by Rothschild, consider the terms of the Offer to be fair and reasonable and unanimously recommend that Amstrad Shareholders accept the Offer, as the Amstrad Directors have irrevocably undertaken to do (or procure to be done) in respect of their own beneficial interests and holdings (including, in respect of Sir Alan Sugar, those Amstrad Shares held by Amshold Limited, a company controlled by Sir Alan) representing approximately 27.9 per cent. of the issued share capital of Amstrad. In providing advice to the Amstrad Directors, Rothschild has taken into account the commercial assessments of the Amstrad Directors.

Sky has received irrevocable undertakings to accept (or procure the acceptance of) the Offer from the Amstrad Directors, as well as irrevocable undertakings and a letter of intent from certain other Amstrad Shareholders, in respect of, in aggregate, 37,306,097 Amstrad Shares, representing approximately 44.8 per cent. of the issued share capital of Amstrad.

In its capacity as a major supplier to the Sky Group, Amstrad currently designs and develops set-top boxes to the Sky Group’s specification and then contracts out the manufacturing to specialists in electronics manufacturing services (EMS). In the financial year ended 30 June 2007, Amstrad supplied approximately 30 per cent. of the set-top boxes purchased by the Sky Group and Sky believes that the Sky Group accounted for approximately 75 per cent. of Amstrad’s revenues.

The acquisition of Amstrad will provide Sky with an in-house design and development capability, which Sky believes will deliver significant operational and financial benefits and enable the Sky Group to source some of its products directly from specialist electronics manufacturers. The acquisition of Amstrad will provide the Sky Group with:

• an in-house product design and development capability, creating significant potential cost savings and facilitating enhanced future technological innovation;

• an ability to accelerate the development of new and more innovative products for customers;

• greater control over product design and technical specification and enhanced flexibility to deliver continual improvement in product quality;

• a significant reduction in procurement costs within its supply chain as margin currently generated by Amstrad on the supply of equipment to the Sky Group will be retained within the Sky business; and

• an expected enhancement to the Sky Group’s earnings within the current financial year.1

1This statement does not constitute a profit forecast and should not be interpreted to mean that earnings per share for the financial year ending 30 June 2008 or any subsequent financial period will necessarily be greater than those for any preceding financial period.

The Offer Document and the Form of Acceptance will be posted to Amstrad Shareholders (and, for information only, to Amstrad Optionholders) today. Copies of the Offer Document and the Form of Acceptance will be available from Capita Registrars at Corporate Actions, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU and from Merrill Lynch at Merrill Lynch Financial Centre, 2 King Edward Street, London EC1A 1HQ.

Commenting on the Offer, Sky's Chief Executive Officer, James Murdoch, said:

"Sky and Amstrad have had a long and positive relationship. The acquisition accelerates supply chain improvement and will help us to drive innovation and efficiency for the benefit of our customers."

Commenting on the Offer, Amstrad's Chairman and Chief Executive, Sir Alan Sugar, said:

"Amstrad has worked closely with Sky for many years and I cannot imagine a better home for the Amstrad business and its talented people. Our companies share the entrepreneurial spirit of bringing innovation to the largest number of customers. Sky is a great British success story. I’m proud to have worked so closely with it, and I look forward to continuing to play a part in this exciting business."

 
  Enquiries
Sky
Analysts / Investors:
Andrew Griffith
+44 (0) 20 7705 3000
Robert Kingston
+44 (0) 20 7705 3000
Press:
Robert Fraser
+44 (0) 20 7705 3000
 
     
     
  Amstrad plc
Register No. 955321
Brentwood House
169 Kings Road
Brentwood
Essex CM14 4EF

Press Enquiries:
Andrew Bloch/David Fraser– Frank PR
Tel: 0207 693 6999
e-mail: amstrad@frankpr.it
 
     
 

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