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  • Media Pack 2023

RECOMMENDED CASH OFFER FOR ALVIS PLC BY GENERAL DYNAMICS

March 11, 2004 by

11 March 2004. The boards of General Dynamics Corporation and Alvis plc announce that they have agreed to the terms of a recommended cash offer for the entire issued and to be issued share capital of Alvis, to be made by Morgan Stanley & Co. Limited on behalf of General Dynamics Holdings Limited outside the United States, and by General Dynamics Holdings in the United States. General Dynamics and Alvis have complementary strengths in technology and market presence, and the combined business will create new opportunities in Europe, the US and other markets.

The Offer for each Alvis Share will be 280 pence in cash, and values the existing issued share capital of Alvis at approximately £309 million. A Loan Note Alternative will also be made available.

The Offer represents a premium of approximately:

­ 33.0 per cent. to the closing middle-market price of 210.5 pence per Alvis Share on 10 March 2004, the last business day prior to the date of this announcement;

­ 46.3 per cent. to the average middle-market closing price of 191.4 pence per Alvis Share during the three months prior to 10 March 2004; and

­ 51.1 per cent. to the average middle-market closing price of 185.3 pence per Alvis Share during the 52 weeks ended 10 March 2004.

The Directors of Alvis, who have been so advised by Lazard & Co., Limited, consider the terms of the Offer to be fair and reasonable so far as Alvis Shareholders taken as a whole are concerned and intend to unanimously recommend that Alvis Shareholders accept the Offer. The Directors of Alvis have irrevocably undertaken to accept the Offer in respect of their entire beneficial holdings of, in aggregate, 773,052 Alvis Shares representing approximately 0.7 per cent. of the existing issued share capital of Alvis. In providing advice to the Directors, Lazard has taken into account the commercial assessments of the Directors.

Commenting on the Offer, Nicholas Prest, Chairman and Chief Executive of Alvis, said: “We are pleased to unanimously recommend the Offer, which we believe is attractive and in the best interests of Alvis and its Shareholders.”

Commenting on the Offer, Nicholas D. Chabraja, Chairman and Chief Executive Officer of General Dynamics, said: “We regard Alvis as an excellent strategic fit with General Dynamics, and are pleased to make this offer, which provides an opportunity for Alvis Shareholders to realise their investment for cash at a significant premium to the recent market price.”

This summary should be read in conjunction with the full text of the following announcement. Appendix III to the following announcement contains definitions of certain terms used in this summary and the following announcement.

Morgan Stanley is acting for General Dynamics and General Dynamics Holdings and no one else in connection with the Offer and will not be responsible to anyone other than General Dynamics and General Dynamics Holdings for providing the protections afforded to clients of Morgan Stanley nor for providing advice in connection with the Offer, the contents of this announcement or any transaction or arrangement referred to herein.

Lazard is acting for Alvis and no one else in connection with the Offer and will not be responsible to anyone other than Alvis for providing the protections afforded to clients of Lazard nor for providing advice in connection with the Offer, the contents of this announcement or any transaction or arrangement referred to herein.

Hoare Govett is acting for Alvis and no one else in connection with the Offer and will not be responsible to anyone other than Alvis for providing the protections afforded to clients of Hoare Govett nor for providing advice in connection with the Offer, the contents of this announcement or any transaction or arrangement referred to herein.

The Offer will not be made, directly or indirectly, in or into Canada, Australia or Japan and will not be capable of acceptance from within Canada, Australia or Japan.

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