Honeywell International Inc 24 January 2006 Not for release, publication or distribution in or into Australia, Canada, Japan or the United States or any other jurisdiction where it would be unlawful to do so FOR IMMEDIATE RELEASE January 24, 2006 INCREASED CASH OFFER BY UBS INVESTMENT BANK ON BEHALF OF Honeywell ACQUISITIONS II LIMITED FOR First Technology PLC Introduction On December 19, 2005, the boards of Honeywell and First Technology announced that they had agreed the terms of a recommended all cash offer for the entire issued and to be issued share capital of First Technology to be made by UBS on behalf of Honeywell at 275 pence per First Technology Share. On January 20, 2006, the boards of Danaher Corporation and First Technology announced that they had agreed the terms of a recommended cash offer for the entire issued and to be issued share capital of First Technology at 330 pence per First Technology Share (the "Danaher Offer"). Honeywell now announces that it has revised the terms of its cash offer for the entire issued and to be issued share capital of First Technology made by UBS on behalf of Honeywell Acquisitions II on the basis set out in this announcement (the "Increased Offer") and which otherwise is on the terms and conditions set out in the offer document dated January 16, 2006 (the "Offer Document") Increased Offer The Increased Offer is made on the following basis: For each First Technology Share 385 pence in cash. The Increased Offer values the entire current issued share capital of First Technology at approximately £290 million and represents a premium of: - approximately 89.7 per cent to the closing middle market price of 203 pence per First Technology Share on December 9, 2005, the last business day prior to the commencement of the Offer Period; - approximately 7.5 per cent to the closing middle market price of 358 pence per First Technology Share on January 24, 2006, the business day of this announcement; and - approximately 16.7 per cent to the Danaher Offer of 330 pence per First Technology Share. Honeywell Acquisitions II intends to seek a recommendation for the Increased Offer from the board of First Technology. The document containing the terms and conditions of the Increased Offer (the "Increased Offer Document") will be despatched to First Technology Shareholders as soon as practicable together with additional Forms of Acceptance. The existing Forms of Acceptance remain valid for use in connection with the Increased Offer. First Technology Shareholders who have already accepted the Offer need take no further action in order to receive the revised consideration payable under the Increased Offer. Reasons for the Increased Offer The acquisition's strategic value remains compelling to Honeywell at the Increased Offer price in light of the strong fit and realizable cost synergies between its Life Safety division, which includes Zellweger Analytics, a global leader in gas detection, and First Technology's gas sensing and gas detection businesses. Honeywell's prior experience successfully integrating acquisitions, such as Zellweger and Novar in 2005, makes it confident that it can achieve these cost synergies. Furthermore, the opportunity for sales, channel and distribution synergies between First Technology and Honeywell's $10 billion Automation and Control Solutions business represents real potential upside to its valuation model. The transaction is expected to have an accretive impact on Honeywell's 2007 earnings per share. (1) Options and irrevocable undertakings Honeywell Acquisitions II has been granted options by each of Artemis Investment Management Limited, Jupiter Asset Management Limited and UBS Global Asset Management (UK) Limited to acquire, in aggregate, 10,787,076 First Technology Shares representing approximately 14.3 per cent. of First Technology's existing issued share capital. As referred to below, such holdings of these First Technology Shareholders comprise all or part of (as the case may be) their holdings that are subject to irrevocable undertakings to accept the Increased Offer. In accordance with the terms of certain of the irrevocable undertakings to accept the Offer, such irrevocable undertakings shall continue to apply in respect of the Increased Offer and, accordingly, Honeywell Acquisitions II has received irrevocable undertakings to accept the Increased Offer from the following First Technology Shareholders: (a) the directors of First Technology, in respect of 333,215 First Technology Shares, in aggregate, representing approximately 0.4 per cent. of the existing issued share capital of First Technology; and (b) Artemis Investment Management Limited, Jupiter Asset Management Limited, Morley Fund Management Limited, Sterling Investment Group Limited and UBS Global Asset Management (UK) Limited in respect of 22,067,093 First Technology Shares, in aggregate, representing approximately 29.3 per cent. of the existing issued share capital of First Technology. The irrevocable undertakings provided by Bruce D Atkinson relating to 82,073 First Technology Shares, representing approximately 0.109 per cent. of the existing issued share capital of First Technology, Patrick Burgess relating to 7,500 First Technology Shares, representing approximately 0.010 per cent. of the existing issued share capital of First Technology, Oliver G Burns relating to 5,500 First Technology Shares, representing approximately 0.007 per cent. of the existing issued share capital of First Technology, Michael G Firth relating to 3,550 First Technology Shares, representing approximately 0.005 per cent. of the existing issued share capital of First Technology, Cody Z Slater relating to 15,000 First Technology Shares, representing approximately 0.020 per cent. of the existing issued share capital of First Technology, Dr Frederick J Westlake relating to 15,000 First Technology Shares, representing approximately 0.020 per cent. of the existing issued share capital of First Technology, Ralph R Whitney Jr. relating to 121,877 First Technology Shares, representing approximately 0.162 per cent. of the existing issued share capital of First Technology, and Jeff G Wood relating to 82,715 First Technology Shares, representing approximately 0.110 per cent. of the existing issued share capital of First Technology, will cease to be binding only if the Increased Offer lapses or is withdrawn and will remain binding if a higher competing offer is made for First Technology. The irrevocable undertaking provided by Morley Fund Management Limited relating to 7,480,957 First Technology Shares, representing approximately 9.9 per cent. of the existing issued share capital of First Technology, will cease to be binding if the Increased Offer lapses or is withdrawn or in the event of an announcement of a competing offer representing at least a 5 per cent. premium to the value of the Increased Offer and which is not exceeded by Honeywell Acquisitions II. The irrevocable undertaking provided by Sterling Investment Group Limited relating to 3,496,708 First Technology Shares, representing approximately 4.6 per cent. of the existing issued share capital of First Technology, will cease to be binding if the Increased Offer lapses or is withdrawn or in the event of an announcement of a competing offer representing at least a 10 per cent. premium to the value of the Increased Offer and which is not at least matched by Honeywell Acquisitions II. The irrevocable undertakings provided by Artemis Investment Management Limited, which Honeywell Acquisitions II has now been informed relates to 3,383,754 First Technology Shares, representing approximately 4.5 per cent. of the existing issued share capital of First Technology, and Jupiter Asset Management Limited relating to 2,974,400 First Technology Shares, representing approximately 3.9 per cent. of the existing issued share capital of First Technology, will cease to be binding if the Increased Offer lapses or is withdrawn or in the event of an announcement of a competing offer representing at least a 10 per cent. premium to the value of the Increased Offer and which is not at least matched by Honeywell Acquisitions II. As referred to above, options to acquire First Technology Shares have been granted to Honeywell Acquisitions II by Artemis Investment Management Limited and Jupiter Asset Management Limited from the holdings to which their respective irrevocable undertaking to accept the Increased Offer relates, such options being granted in respect of 3,383,754 First Technology Shares representing approximately 4.5 per cent. of the existing issued share capital of First Technology by Artemis Investment Management Limited and in respect of 3,074,400 First Technology Shares representing approximately 4.1 per cent. of the existing issued share capital of First Technology by Jupiter Asset Management Limited. The irrevocable undertaking provided by UBS Global Asset Management (UK) Limited relating to 4,731,274 First Technology Shares, representing approximately 6.3 per cent. of the existing issued share capital of First Technology will cease to be binding if the Increased Offer lapses or is withdrawn or in the event of an announcement of a competing offer representing at least a 5 per cent. premium to the value of the Increased Offer and which is not at least matched by Honeywell Acquisitions II. As referred to above, UBS Global Asset Management (UK) Limited has granted Honeywell Acquisitions II an option to acquire First Technology Shares from the holdings to which its irrevocable undertaking to accept the Increased Offer relates, such option being granted in respect of 4,328,922 First Technology Shares representing approximately 5.7 per cent. of the existing issued share capital of First Technology. Acceptance levels and market purchases As at 3.00 p.m. (London time) on January 24, 2006, Honeywell Acquisitions II had received valid acceptances of the Offer in respect of a total of 3,823,018 First Technology Shares representing approximately 5.1 per cent. of First Technology's existing issued share capital. The level of acceptances of the Offer referred to above includes acceptances received pursuant to irrevocable undertakings to accept the Offer from Oliver G Burns, in respect of his entire holding of 5,500 First Technology Shares representing approximately 0.007 per cent. of First Technology's existing issued share capital and from Sterling Investment Group Limited in respect of its entire holding of 3,496,708 First Technology Shares representing approximately 4.6 per cent. of First Technology's existing issued ordinary share capital. None of the acceptances of the Offer referred to above were received from persons acting in concert with Honeywell. As a result of purchases announced on January 17, 2005, Honeywell Acquisitions II holds 3,172,497 First Technology Shares representing approximately 4.2 per cent. of First Technology's existing issued ordinary share capital. Aggregating the options to acquire First Technology Shares and irrevocable undertakings to accept the Increased Offer referred to in this announcement with the acceptances which Honeywell Acquisitions II has already received to its Offer and the purchases made by Honeywell Acquisitions II referred to above, Honeywell Acquisitions II has acquired or contracted to acquire a total of 25,993,615 First Technology Shares representing in aggregate approximately 34.5 per cent. of First Technology's existing issued share capital. All First Technology Shares currently held by Honeywell Acquisitions II and First Technology Shares in respect of which a valid acceptance of the Offer has been received may be counted towards satisfaction of the acceptance condition to which the Increased Offer is subject. In addition all First Technology Shares which are subject to the irrevocable undertakings referred to above (but in respect of which a valid acceptance has not yet been received) or which are subject to the options referred to above may, when a valid acceptance is received in respect thereof or when such option is exercised (as the case may be), be counted towards satisfaction of the acceptance condition to which the Increased Offer is subject. Inducement Fee As was announced on December 19, 2005, First Technology and Honeywell have entered into an inducement fee arrangement. Under that arrangement First Technology is obliged to pay Honeywell an inducement fee equal to one per cent. of the issued (and, to the extent permitted under the Code, to be issued) share capital of First Technology, now calculated by reference to the Increased Offer price (subject to upward adjustment by reference to any higher amount offered by Honeywell for First Technology), less any amounts payable as an inducement fee under the terms of an inducement fee letter entered into by First Technology with Hg in November 2005 (inclusive of any irrecoverable VAT), if the Increased Offer lapses. The inducement fee agreement contains certain other undertakings by First Technology including First Technology's agreement not to solicit or initiate the submission of any proposal or offer from any person other than Honeywell relating to a possible offer for or sale of the shares in First Technology (or the sale of a material part of First Technology and its subsidiaries' businesses taken together) and to notify Honeywell of any such proposal or offer it may receive (other than from a person from whom it had already received a proposal for a possible offer for its shares as at December 19, 2005). General Save as referred to in this announcement or in the Offer Document, neither Honeywell Acquisitions II nor any person acting in concert with Honeywell Acquisitions II, had an interest in or a right to subscribe for relevant securities of First Technology or had any short position (whether conditional or absolute and whether in the money or otherwise), including any short position under a derivative, any agreement to sell or any delivery obligation or right to require another person to purchase or take delivery of any relevant securities of First Technology and neither Honeywell Acquisitions II nor any person acting in concert with Honeywell Acquisitions II had borrowed or lent relevant securities of First Technology, save for any borrowed First Technology Shares which have been either on-lent or sold. Terms defined in the Offer Document have the same meanings in this announcement, save where the context otherwise requires. The Increased Offer will be subject to the applicable requirements of the City Code. The Increased Offer Document will be despatched to First Technology Shareholders as soon as practicable. Enquiries Honeywell Tel: +32 2 728-2588 Elma Peters UBS Tel: +44 (0) 20 7567-8000 (Financial adviser and broker to Honeywell) Aidan Clegg Hugo Robinson Citigate Dewe Rogerson Tel: +44 (0) 20 7282-2920 (Public relations adviser to Honeywell) Sarah Gestestner (1) The statement that the transaction will offer earnings accretion in 2007 should not be taken to mean that First Technology's earnings per share in 2007 or any other period will necessarily be greater or less than those of prior periods UBS Limited ("UBS" or "UBS Investment Bank") is acting for Honeywell and Honeywell Acquisitions II in connection with the Increased Offer and no one else and will not be responsible to anyone other than Honeywell or Honeywell Acquisitions II for providing the protections afforded to customers of UBS or for providing advice in relation to the Increased Offer. This announcement does not constitute an offer to sell or an invitation to purchase or subscribe for any securities or the solicitation of an offer to buy or subscribe for any securities pursuant to the Increased Offer or otherwise. The Increased Offer will be made solely by the Increased Offer Document and the Form of Acceptance accompanying the Increased Offer Document, which will contain the full terms and conditions of the Increased Offer, including details of how the Increased Offer may be accepted. The laws of the relevant jurisdictions may affect the availability of the Increased Offer to persons who are not resident in the United Kingdom. Persons who are not resident in the United Kingdom or who are subject to laws of any jurisdiction other than the United Kingdom, should inform themselves about, and observe, any applicable requirements. Any person (including nominees, trustees and custodians) who would, or otherwise intends to, forward this announcement, the Increased Offer Document and the Form of Acceptance or any accompanying document to any jurisdiction outside the United Kingdom should refrain from doing so and seek appropriate professional advice before taking any action. The Increased Offer will not be made, directly or indirectly, in or into or by use of the mails or any other means or instrumentality (including, without limitation, telephonic or electronic) of interstate or foreign commerce of, or any facility of a national, state or other securities exchange of, Australia, Canada, Japan or the United States, and the Increased Offer will not be capable of acceptance by any such use, means, instrumentality or facility or from within Australia, Canada, Japan or the United States. Accordingly, copies of this announcement and formal documentation relating to the Increased Offer are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed in or into or from Australia, Canada, Japan or the United States and persons receiving this announcement (including custodians, nominees and trustees) must not distribute or send it into or from Australia, Canada, Japan or the United States. Doing so may render invalid any related purported acceptance of the Increased Offer. These press-related materials are not an extension of the Increased Offer in the US. In the event that Honeywell extends the Increased Offer in the US at some future time, it will do so in satisfaction of the procedural and filing requirements of the US securities laws at that time, to the extent applicable thereto. Dealing Disclosure Requirements Under the provisions of Rule 8.3 of the Code, if any person is, or becomes, "interested" (directly or indirectly) in one per cent. or more of any class of "relevant securities" of First Technology, all "dealings" in any "relevant securities" of that company (including by means of an option in respect of, or a derivative referenced to, any such "relevant securities") must be publicly disclosed by no later than 3.30 pm (London time) on the London business day following the date of the relevant transaction. This requirement will continue until the date on which the Increased Offer becomes, or is declared, unconditional as to acceptances, lapses or is otherwise withdrawn or on which the "offer period" otherwise ends. If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire an "interest" in "relevant securities" of First Technology, they will be deemed to be a single person for the purposes of Rule 8.3. Under the provisions of Rule 8.1 of the Code, all "dealings" in "relevant securities" of First Technology by Honeywell or First Technology, or by any of their respective "associates", must be disclosed by no later than 12.00 noon (London time) on the London business day following the date of the relevant transaction. A disclosure table, giving details of the companies in whose "relevant securities" "dealings" should be disclosed, and the number of such securities in issue, can be found on the Takeover Panel's website at www.thetakeoverpanel.org.uk. "Interests in securities" arise, in summary, when a person has long economic exposure, whether conditional or absolute, to changes in the price of securities. In particular, a person will be treated as having an "interest" by virtue of the ownership or control of securities, or by virtue of any option in respect of, or derivative referenced to, securities. Terms in quotation marks are defined in the Code. If you are in any doubt as to whether or not you are required to disclose a "dealing" under Rule 8, you should consult the Panel. This information is provided by RNS The company news service from the London Stock Exchange