£1.4 BILLION TECHNICOLOR DEAL FINALISED

CARLTON have announced that contracts have been signed with Thomson for the proposed disposal of Technicolor for £1.4 billion.
Under the terms of the transaction Thomson will pay a consideration, which values Technicolor at £1.4 billion.
The transaction remains subject to approval by Carlton Shareholders and various regulatory approvals.
Thomson will acquire Technicolor, excluding Screenvision, the US cinema advertising group, they will pay a net cash present value of £913 million, of which £507 million will be payable on completion. The remaining £406 million will be payable in four equal instalments, together with accrued interest, on the first four anniversaries of completion.
Thomson will issue to Carlton bonds carrying entitlement to 15.5 million new Thomson shares. Following the maturity of the bonds after one year, Carlton will, based on Thomson’s current issued share capital, become a 5.5 per cent shareholder in Thomson and will be able to retain or sell part or all of their holding.
Carlton have agreed in principle to participate in Thomson’s TAK European interactive television joint venture with Microsoft by way of an equity investment of up to £10 million. Carlton and Thomson have agreed in principle to form a 50/50 joint venture, under which Carlton and Technicolor will jointly develop their screen advertising businesses in the US.
In addition, Carlton and Thomson will enter into a strategic co-operation, which will focus on the development of their respective activities, particularly in digital and interactive television.
Carlton have agreed to pay a termination fee of £27 million if, in certain circumstances the contract for disposal is terminated. However, Carlton would only be liable for the termination fee if they complete the sale of all or a substantial part of Technicolor to a third party within 12 months of such termination.
On completion of the transaction, it is intended that Michael Green, Chairman of Carlton will be proposed as a Non- Executive Director of the Board of Thomson.
The transaction remains subject to a number of conditions, including regulatory approvals and approval by both Carlton and Thomson shareholders. It is expected that the proposed disposal will be completed by March 2001. (CMcL)