SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
_______________
FORM 6-K
REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
Date: 28 June 2004
NATIONAL GRID TRANSCO plc
(Registrant’s Name)
| 1-3 Strand |
| London |
| WC2N 5EH |
| (Registrant’s Address) |
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 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]
If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorised.
| NATIONAL GRID TRANSCO plc | |
| s/Richard A. Eves | |
| By:_________________________ | |
| Name: Richard A. Eves | |
| Title: Assistant Secretary |
Date: June 28, 2004
ANNEX 1 - Summary
FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
Report of Foreign Issuer
Pursuant to Rule 13a – 16 or 15d – 16 of
The Securities Exchange Act of 1934
Announcement sent to the London Stock Exchange
for 28 June, 2004
| National Grid Transco plc |
| 1-3 Strand |
| London |
| WC2N 5EH |
| United Kingdom |
Announcement to The London Stock Exchange
DATE DETAILS
28.6.04 Acquisition by NGT of the UK operations of Crown Castle, International, Inc.
ANNEX 2 - Copy Announcement as sent
FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
Report of Foreign Issuer
Pursuant to Rule 13a – 16 or 15d – 16 of
The Securities Exchange Act of 1934
Announcement to the London Stock Exchange
for 28 June 2004
| National Grid Transco plc ('NGT') |
| 1-3 Strand |
| London |
| WC2N 5EH |
| United Kingdom |
EMBARGOED UNTIL 11.30 AM 28 June 2004
NATIONAL GRID TRANSCO ANNOUNCES
ACQUISITION OF CROWN CASTLE UK
o UK operations of Crown Castle acquired for cash consideration of 1.1bn pounds*
o In line with NGT's strategy to exploit its network management skills
o Places NGT in a leading position in the growing mobile and broadcast infrastructure markets
o Pre-synergies: cashflow enhancing immediately; earnings enhancing** in the first full year after completion
o Integration savings 18m pounds per annum from combination with Gridcom UK
National Grid Transco plc ("NGT") today announces that it has reached agreement on the terms of an acquisition of the UK operations
of Crown Castle International, Inc. ("Crown Castle UK") for a cash consideration of around 1.1 billion pounds *.
NGT will merge Crown Castle UK with Gridcom, its wholly owned subsidiary, creating a combined business that will be the major
independent provider of infrastructure to the mobile telecommunications operators in the UK, with a substantial portfolio of almost
5,000 active sites. Crown Castle UK is also one of the two providers of infrastructure for transmission of terrestrial analogue and
digital television and radio in the UK and is particularly well positioned for the move towards digital television. The new business
will initially trade under the "Crown Castle UK" brand name.
For the year ended 31 December 2003, Crown Castle UK had earnings before interest, tax, depreciation and goodwill amortisation of
101 million pounds*** on revenues of 233 million pounds and had net assets of 337 million pounds.
* the total consideration of $2,035 million is subject to normal completion adjustments less an amount reflecting customer
prepayments. This adjusted USD amount has already been bought forward and is expected to amount to around 1.1bn pounds. Consideration
will be satisfied by general corporate debt.
** before goodwill amortisation and exceptional items
*** adjusted to exclude 5 million pounds of management fees payable to Crown Castle International, Inc. and share option expenses
Roger Urwin, Chief Executive of NGT, said:
"Crown Castle UK is a high quality infrastructure business with low risk characteristics. It is a natural extension of our own
towers and sites business, Gridcom, and is clearly consistent with National Grid Transco's core focus on owning, operating and
managing networks. Combining Crown Castle UK with Gridcom will, we believe, create value from integration savings and the
opportunities presented by growth in the mobile and broadcast infrastructure markets."
John Kelly, Chief Executive of Crown Castle International, said:
"We are proud of the success of our UK operations but recognise that this is the right time for us to realise the value we have
created so that we can focus our attention and resources on growth opportunities in the US. In National Grid Transco we have found an
excellent long term owner of the business, for the benefit of its customers and employees."
Acquisition benefits
The acquisition of Crown Castle UK:
- makes NGT a leader in the growing mobile and broadcast infrastructure markets while exploiting NGT's core skills of owning,
managing and maintaining network infrastructure;
- is expected to enhance NGT's cash flow per share immediately following completion without taking account of synergies;
- is expected to enhance NGT's earnings per share (before goodwill amortisation and exceptional items), excluding the benefits
of synergies, in the first full financial year after completion; and
- provides significant opportunities to create value from the combination of Gridcom and Crown Castle UK:
- NGT plans to achieve annualised cost savings of 18 million pounds in the mobile infrastructure business by the end of the first
full financial year. These represent some 11 per cent of the enlarged business' controllable cost base; and
- the increased scale and broader portfolio of undeveloped mobile sites strongly positions the business to exploit the
expected growth in the mobile infrastructure market.
Management
Peter Abery, currently CEO of Crown Castle UK, will become CEO of the enlarged business following completion of the transaction.
Steven Marshall, currently CEO of Gridcom UK, will become COO with responsibility for managing the integration process. Andrew Sloey,
currently Finance Director of Crown Castle UK will become Finance Director of the enlarged business.
Approval process
The acquisition is conditional upon approvals from the Office of Fair Trading and from the US Federal Communications Commission, and
upon certain change of control consents. Completion is expected to take around 3 months.
Bear Stearns International acted as the financial adviser to NGT on the transaction. In addition, Rothshild provided independent
valuation advice to the Board of NGT.
Contact details
National Grid Transco:
Investors
Alexandra Morton +44 (0)20 7004 3170 +44 (0)7768 554879(m)
Terry McCormick +44 (0)20 7004 3171 +44 (0)7768 045139(m)
Louise Clamp +44 (0)20 7004 3172 +44 (0)7768 555641(m)
Media
Clive Hawkins +44 (0)20 7004 3147 +44 (0) 7836 357173
Citigate Dewe Rogerson +44 (0)20 7638 9571
Anthony Carlisle +44 (0)7973 611888(m)
An analyst presentation will be held at Cazenove, 20 Moorgate, London EC2R 6DA at 2.15pm for 2.30pm (UK time) today.
Live telephone coverage of analyst presentation - password National Grid Transco
Dial in number +44 (0)20 8322 3156
Telephone replay of the analyst presentation (available until 12 July 2004)
Dial in number +44 (0)20 7081 9440
Replay account number 963158
Recording number 6999516
Live webcast of presentation will also be available at www.ngtgroup.com
Photographs are available on www.newscast.co.uk
Cautionary statement
This announcement contains certain statements that are neither reported financial results nor other historical information. These
statements are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. Because these forward-looking statements are subject to assumptions, risks
and uncertainties, actual future results may differ materially from those expressed in or implied by such statements. Many of these
assumptions, risks and uncertainties relate to factors that are beyond National Grid Transco's ability to control or estimate
precisely, such as delays in obtaining or adverse conditions contained in regulatory approvals, competition and industry
restructuring, changes in economic conditions, currency fluctuations, changes in interest and tax rates, changes in energy market
prices, changes in historical weather patterns, changes in laws, regulations or regulatory policies, developments in legal or public
policy doctrines, technological developments, the failure to retain key management, the availability of new acquisition opportunities
or the timing and success of future acquisition opportunities. Other factors that could cause actual results to differ materially
from those described in this announcement include the ability to integrate the US and UK businesses acquired by or merged with
National Grid Transco or to continue to realise the expected synergies from such integrations, the failure for any reason to achieve
reductions in costs or to achieve operational efficiencies, unseasonable weather impacting on demand for electricity and gas, the
behaviour of UK electricity market participants on system balancing, the timing of amendments in prices to shippers in the UK gas
market, the performance of National Grid Transco's pension schemes and the regulatory treatment of pension costs, the impact of any
potential separation and disposal by National Grid Transco of any UK gas distribution network(s) and any adverse consequences arising
from outages on or otherwise affecting energy networks owned and/or operated by National Grid Transco. For a more detailed
description of these assumptions, risks and uncertainties, together with any other risk factors, please see National Grid Transco's
filings with the United States Securities and Exchange Commission (and in particular the Directors' Operating and Financial Review
section filed with its most recent Annual Report on Form 20-F). Recipients are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this announcement. National Grid Transco does not undertake any
obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of
this announcement.
Notes to Editors
National Grid Transco
NGT is an international network infrastructure business, whose principal activities are in the regulated transmission and
distribution of electricity and gas. In the UK it owns and operates the high-voltage electricity transmission network in England and
Wales, and Britain's natural gas transportation system. In the US it is one of the top ten electricity companies, with the largest
electricity transmission and distribution network in the New England/New York region.
Prior to the merger which formed NGT (the "Merger"), National Grid and Lattice had separately been using their own networks to
develop site rental businesses that provided infrastructure to mobile telecommunication operators under the Gridcom and SST brands.
Following the Merger, National Grid's and Lattice's businesses were combined to create Gridcom UK. Under a new management team led
by Steven Marshall, CEO, Gridcom UK has seen a marked improvement in its market position and profitability. Gridcom UK is now the
third largest independent mobile infrastructure provider in the UK with c.1,400 active sites and c.2,800 tenants.
Crown Castle
Crown Castle International Corp. engineers, deploys, owns and operates technologically advanced shared wireless infrastructure,
including extensive networks of towers and rooftops. The company offers wireless communications coverage to 68 of the top 100 United
States markets and to more than 92 percent of the Australian population. Crown Castle International owns, operates and manages over
10,600 and over 1,300 wireless communication sites in the US and Australia, respectively.
Crown Castle UK, headquartered in Warwick, was formed in 1997 following the privatisation of BBC Home Service Transmission Division.
Crown Castle UK is the leading independent provider of infrastructure to the mobile telecommunications operators in the UK.
Independent players have entered this market in the past 7 years and now have an overall market share of 18%, the remainder still
being provided by the mobile operators. With c.3,500 active sites and c.10,200 mobile tenants, Crown Castle UK is the leading
provider amongst the independent players.
It is also one of the two providers of terrestrial infrastructure for the transmission of analogue and digital television and radio
broadcasts in the UK, owning some c.750 towers and associated transmission equipment and managing the transmission network. In
addition to traditional analogue services, Crown Castle UK has a strong position in the growing digital television market, owning 2
of the 6 licences and providing infrastructure services to all the Freeview channels and the BBC and BSkyB.
In the mobile infrastructure market, capacity expansion of 2G and the build out of 3G networks are expected to drive substantial
growth in the number of mobile tenants over the next five years. The potential for outsourcing by the mobile telecommunication
operators and the development of new technologies should provide further growth opportunities. In the broadcast infrastructure
market, growth is expected to be driven by extended geographic coverage, increasing household penetration of digital television
services and an increasing number of digital television channels as switch-off of the analogue television signal occurs.