TIDMMTEC TIDMNWKI
RNS Number : 3399D
Matchtech Group PLC
28 January 2015
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY IN, INTO OR FROM ANY JURISDICTION
WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF
SUCH JURISDICTION
For immediate release
28 January 2015
Recommended Acquisition
of
NETWORKERS INTERNATIONAL PLC
by
MATCHTECH GROUP PLC
(to be implemented by way of a scheme of arrangement under Part
26 of the Companies Act)
Summary
-- The Boards of Matchtech Group plc ("Matchtech") and
Networkers International plc ("Networkers") are pleased to announce
that they have reached agreement on the terms of a recommended
acquisition under which Matchtech will acquire the entire issued
and to be issued share capital of Networkers. It is intended that
the Acquisition be implemented by means of a Court-sanctioned
scheme of arrangement under Part 26 of the Companies Act.
-- Under the terms of the Acquisition, which is subject to the
Conditions and further terms set out in Appendix I to this
Announcement, if the Scheme becomes Effective, Scheme Shareholders
will be entitled to receive:
for each Networkers Share 34 pence in cash; and
0.063256 New Matchtech Shares
-- Based on the Closing Price of the Matchtech Shares on 27
January 2015 (being the latest practicable date prior to this
Announcement), the Acquisition represents an indicative value of
67.4 pence per Networkers Share and values the entire issued and to
be issued share capital of Networkers on a fully diluted basis at
approximately GBP57.9 million.
-- The indicative value of 67.4 pence per Networkers Share
represents a premium of approximately:
o 22.5 per cent. over the Closing Price of 55.0 pence per
Networkers Share on 27 January 2015 (being the latest practicable
date prior to this Announcement);
o 28.6 per cent. to the average Closing Price per Networkers
Share for the one month period up to and including 27 January 2015
(being the latest practicable date prior to this Announcement);
and
o 20.4 per cent. to the average Closing Price per Networkers
Share for the twelve month period up to and including 27 January
2015 (being the latest practicable date prior to this
Announcement).
-- If the Scheme becomes Effective, the Acquisition will result
in Scheme Shareholders holding approximately 17.9 per cent. of the
issued share capital of Matchtech and the existing Matchtech
Shareholders holding approximately 82.1 per cent. of the issued
share capital of Matchtech.
-- Following completion of the Acquisition, Matchtech Shares
will continue to be admitted to trading on AIM.
-- The Matchtech Directors and Networkers Directors consider
that the Acquisition represents an opportunity to create a
specialist recruiter of scale in the UK and internationally. The
Matchtech Board believes this will lead to enhanced value for the
shareholder base of the Combined Group.
-- The Matchtech Board believes the Acquisition will accelerate
its vision to become the market leading specialist recruiter in
engineering and technology, in the UK and internationally, as it
can assist to:
o sharpen focus on key niche markets in the white collar
recruitment space, adding Networkers' Telecoms and Technology
expertise to Matchtech's existing strength in Engineering and
Technology, and enabling the Combined Group to capitalise on the
convergence of the skill sets demanded by these markets;
o continue improvements in gross profitability as Networkers'
higher price points and percentage gross margins are added to
Matchtech's improving performance in this area;
o allow Matchtech to internationalise its existing service
offering by leveraging Networkers' existing global infrastructure,
thereby lowering the cost, time and risk of Matchtech's planned
geographic expansion and allowing Matchtech to better address the
skill shortage issues reported by its clients worldwide; and
o improve opportunities for candidates by enhancing Matchtech's
international capability; for example, UK qualified engineers are
increasingly seeking to gain experience globally.
-- The Matchtech Directors expect the Acquisition to be earnings
enhancing in the first full financial year([1]) .
-- The Matchtech Board has separately announced this morning
that Adrian Gunn, the current Chief Executive Officer of Matchtech
believes that this is the appropriate time to bring forward his
retirement from the business (which he originally planned for
2016), and is stepping down with immediate effect. In consequence,
Brian Wilkinson will move from being Executive Chairman to being
Chief Executive Officer; and Ric Piper, currently Senior
Independent Non-Executive Director of Matchtech, will assume the
role of Interim Non-Executive Chairman until a permanent
replacement is identified.
-- It is intended that, following completion of the Acquisition,
a new management board will be formed to develop the strategy for
the Combined Group going forward led by Brian Wilkinson and
including Tony Dyer as Group Chief Financial Officer and Keith
Lewis as Chief Operating Officer of the existing Matchtech
businesses, along with the current Networkers Chief Executive,
Spencer Manuel, and Networkers Chief Financial Officer, Jon
Plassard.
-- It is also intended that Roger Goodman, currently
Non-Executive Chairman of Networkers, will join the Matchtech Board
as a Non-Executive Director.
-- It is intended that the Acquisition will be implemented by
means of a Court-sanctioned scheme of arrangement under Part 26 of
the Companies Act (or, if Matchtech elects and the Takeover Panel
consents, an Offer). The Acquisition is conditional on, among other
things, (i) the approval of Scheme Shareholders at the Court
Meeting and the passing of the Resolutions by Networkers
Shareholders at the General Meeting and (ii) the sanction of the
Scheme and confirmation of the Capital Reduction by the Court.
-- The Networkers Directors, who have been so advised by
Liberum, consider the terms of the Acquisition to be fair and
reasonable. In providing its advice to the Networkers Directors,
Liberum has taken into account the commercial assessments of the
Networkers Directors. The Networkers Directors intend to recommend
unanimously that Networkers Shareholders vote (or procure votes) in
favour of the Scheme at the Court Meeting and the Resolutions at
the General Meeting, or in the event that the Acquisition is
implemented by way of an Offer, Networkers Shareholders accept (or
procure acceptance of) the Offer, as Networkers Directors who hold
Networkers Shares have irrevocably undertaken to do in respect of
their entire beneficial holdings in Networkers amounting to, in
aggregate, 41,597,703 Networkers Shares, representing approximately
49.5 per cent. of the Networkers issued share capital.
-- Matchtech has also received irrevocable undertakings to vote
or procure votes in favour of the Scheme at the Court Meeting and
the Resolutions at the General Meeting (or in the event that the
Acquisition is implemented by way of an Offer, to accept the Offer)
from Jon Moulton, Hargreave Hale and Dowgate Capital in respect of
19,688,328 Networkers Shares, in aggregate, representing
approximately 23.4 per cent. of Networkers' issued share
capital.
-- As a result, holders of a total of 61,286,031 Networkers
Shares, representing approximately 72.9 per cent. of Networkers'
issued share capital have committed to vote in favour of the Scheme
at the Court Meeting and the Resolutions at the General Meeting (or
in the event that the Acquisition is implemented by way of an
Offer, accept (or procure acceptance of) the Offer).
-- Further details of the Acquisition will be contained in the
Scheme Document which is intended to be posted to Networkers
Shareholders along with notices of the Court Meeting and General
Meeting and the Forms of Proxy as soon as practicable and, unless
the Panel consents otherwise, within 28 days of the date of this
Announcement.
-- Commenting on the Acquisition, Brian Wilkinson, Chief Executive Officer of Matchtech, said:
"We're delighted to have reached agreement with the Networkers
board of directors and are very excited with the prospects of the
enlarged group. We continue to see major opportunities in our core
markets of white collar engineering and technology recruitment.
Both digitization and converging technology is creating further
opportunities in these areas and the addition of telecoms
recruitment to our portfolio creates an even stronger specialist
Group. In addition, Networkers' long-standing, substantial and
profitable overseas operations will enable us to accelerate the
introduction of our Engineering services to our international
customers with a considerably reduced cost, risk and time
profile."
-- Commenting on the Acquisition, Spencer Manuel, Chief Executive Officer of Networkers, said:
"Networkers has enjoyed loyal support from its shareholders as
an independent company since it was admitted to AIM in 2006. The
Acquisition provides Networkers Shareholders with an opportunity to
realise part of their investment at a premium for cash today and
the Board believes the compelling characteristics of the combined
business will be positive for its shareholders, customers and
employees."
Enquiries
Matchtech Group plc
Brian Wilkinson Tel: +44 (0) 1489 898989
Tony Dyer
------------------------------- ---------------------------
Numis
(Financial Adviser, NOMAD and
Broker to Matchtech) Tel: +44(0) 20 7260 1000
Michael Meade
James Serjeant
Kevin Cruickshank
------------------------------- ---------------------------
Newgate
(PR adviser to Matchtech)
Andrew Jones Tel: +44(0) 20 7680 6524
Rob Newman
Ed Treadwell
------------------------------- ---------------------------
Networkers International plc
Spencer Manuel
Jon Plassard Tel: +44 20 8315 9000
------------------------------- ---------------------------
Liberum
(Financial Adviser and NOMAD
to Networkers) Tel: +44(0) 20 3100 2000
Steve Pearce
Tom Fyson
Robert Morton
Josh Hughes
------------------------------- ---------------------------
Numis Tel: +44 (0) 20 7260 1000
(Broker to Networkers)
David Poutney
------------------------------- ---------------------------
This summary should be read in conjunction with the full text of
the following Announcement and its Appendices.
The Conditions to, and certain further terms of, the
Acquisition, are set out in Appendix I. Appendix II to this
Announcement contains certain sources of information and bases of
calculation contained in this Announcement. Information in respect
of the Irrevocable Undertakings is set out in Appendix III to this
Announcement. Certain terms used in this Announcement are defined
in Appendix IV to this Announcement.
Important disclaimers (including in relation to securities laws
restrictions)
Numis, which is authorised and regulated by the Financial
Conduct Authority, has been Networkers' nominated adviser and
corporate broker. In addition, Numis is nominated adviser to
Matchtech and is acting as its broker and financial adviser in
connection with the offer referred to above. Upon release of this
Announcement, Numis is stepping down as nominated adviser to
Networkers and is being replaced by Liberum Capital Limited but
will continue to act as corporate broker to Networkers. Numis will
not be responsible to any other parties other than Matchtech in
connection with the contents of this Announcement or for providing
the protections afforded to clients of Numis, or for providing
advice in relation to the contents of this Announcement or any
matters referred to herein.
Liberum, which is authorised and regulated in the United Kingdom
by the Financial Conduct Authority, is acting exclusively for
Networkers as adviser for the purposes of Rule 3 of the Code in
connection with the Acquisition and no one else and will not be
responsible to anyone other than Networkers for providing the
protections afforded to customers of Liberum or for providing
advice in relation to the Acquisition or any matter referred to
herein.
This Announcement is for information purposes only and is not
intended to and does not constitute, or form any part of, an offer
to sell or an invitation to purchase or subscribe for any
securities or the solicitation of any vote or approval in any
jurisdiction pursuant to the Acquisition or otherwise. The
Acquisition will be made solely by means of the Scheme Document
(or, if applicable, the Offer Document), which will contain the
full terms and conditions of the Acquisition, including details of
how to vote in respect of the Acquisition. Any decision in respect
of, or other response to, the Acquisition, should be made only on
the basis of the information contained in the Scheme Document (or,
if applicable, the Offer Document).
This Announcement does not constitute a prospectus or a
prospectus equivalent document.
This Announcement has been prepared for the purpose of complying
with English law and the Code and the information disclosed may not
be the same as that which would have been disclosed if this
Announcement had been prepared in accordance with the laws of
jurisdictions outside of England.
Overseas Shareholders
The availability of New Matchtech Shares and the release,
publication or distribution of this Announcement in certain
jurisdictions may be restricted by law. Persons who are not
resident in the United Kingdom or who are subject to the laws of
other jurisdictions should inform themselves of, and observe, any
applicable requirements. Networkers Shareholders who are in any
doubt regarding such matters should consult an appropriate
independent adviser in the relevant jurisdiction without delay.
The laws of the relevant jurisdictions may affect the
availability of the Acquisition 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 failure to comply with the
applicable requirements may constitute a violation of the laws
and/or regulations of any such jurisdiction. To the fullest extent
permitted by applicable law, the companies and persons involved in
the Scheme disclaim any responsibility and liability for the
violation of such restrictions by any person.
The Acquisition will not be made available, directly or
indirectly, in a Restricted Jurisdiction, and the Acquisition will
not be capable of acceptance from within a Restricted Jurisdiction.
Accordingly, copies of this Announcement and all other
documentation relating to the Acquisition are not being, and must
not be, directly or indirectly, mailed or otherwise forwarded or
distributed in, into or from a Restricted Jurisdiction and persons
receiving this Announcement (including custodians, nominees and
trustees) must not distribute or send it into or from a Restricted
Jurisdiction. Further details in relation to overseas Networkers
Shareholders will be contained in the Scheme Document.
The Acquisition relates the shares in an English company and it
is proposed to be made by means of a scheme of arrangement provided
for under English company law. The scheme of arrangement will
relate to the shares of an English company that is a "foreign
private issuer" as defined under Rule 3b-4 under the US Securities
Exchange Act of 1934, as amended (the "Exchange Act"). A
transaction effected by means of a scheme of arrangement is not
subject to the shareholder vote, proxy and tender offer rules under
the Exchange Act. Accordingly, the Acquisition is subject to the
disclosure requirements and practices applicable in the UK to
scheme of arrangement, which differ from the disclosure
requirements and practices of US shareholder vote, proxy and tender
offer rules. Financial information included in the relevant
documentation will have been prepared in accordance with accounting
standard applicable in the UK and may not be comparable to the
financial statement of US companies.
This Announcement is not an offer of securities for sale in the
United States. The New Matchtech Shares which will be issued in
connection with the Acquisition have not been, will not be and are
not required to be registered with the US Securities and Exchange
Commission (the "SEC") under the Securities Act of 1933, as amended
(the "US Securities Act") or under the securities laws of any
state, district or other jurisdiction of the United States, and may
not be offered, sold, delivered or transferred except pursuant to
an available exemption from or in a transaction not subject to the
registration requirements of the US Securities Act and applicable
US state securities laws.
Neither the SEC nor any other US federal or state securities
commission or regulatory authority has approved or disapproved the
New Matchtech Shares or passed an opinion upon the fairness or
merits of such securities or upon the accuracy or adequacy of the
disclosures contained in this document. Any representation to the
contrary is a criminal offence in the United States.
In the event that Matchtech extends the Acquisition into the
U.S. at some future time, it will do so in satisfaction of the
procedural and filing requirements of the U.S. securities laws at
that time, to the extent applicable thereto.
Forward Looking Statements
This Announcement contains certain forward-looking statements
with respect to Matchtech and Networkers. These forward-looking
statements can be identified by the fact that they do not relate
only to historical or current facts. Forward-looking statements
often use words such as "anticipate", "target", "expect",
"estimate", "intend", "plan", "goal", "believe", "aim", "will",
"may", "would", "could" or "should" or other words of similar
meaning or the negative thereof. Forward-looking statements
include, without limitation, statements relating to the following:
(i) future capital expenditures, expenses, revenues, economic
performance, financial conditions, dividend policy, losses and
future prospects; (ii) business and management strategies and the
expansion and growth of the operations of the Matchtech Group or
the Networkers Group; and (iii) the effects of government
regulation on the business of the Matchtech Group or the Networkers
Group.
These forward-looking statements involve known and unknown
risks, uncertainties and other factors which may cause the actual
results, performance or achievements of any such person, or
industry results, to be materially different from any results,
performance or achievements expressed or implied by such
forward-looking statements. These forward-looking statements are
based on numerous assumptions regarding the present and future
business strategies of such persons and the environment in which
each will operate in the future. Given these risks and
uncertainties, potential investors should not place any reliance on
forward-looking statements which refer only to the position as at
the date of this Announcement. All subsequent oral or written
forward-looking statements attributable to Matchtech or Networkers
or any persons acting on their behalf are expressly qualified in
their entirety by the cautionary statement above. None of Matchtech
or Networkers undertakes any obligation to update publicly or
revise forward-looking statements, whether as a result of new
information, future events or otherwise, except to the extent
legally required.
Disclosure Requirements of the Code
Under Rule 8.3(a) of the Code, any person who is interested in
one per cent. or more of any class of relevant securities of an
offeree company or of any securities exchange offeror (being any
offeror other than an offeror in respect of which it has been
announced that its offer is, or is likely to be, solely in cash)
must make an Opening Position Disclosure following the commencement
of the offer period and, if later, following the announcement in
which any securities exchange offeror is first identified. An
Opening Position Disclosure must contain details of the person's
interests and short positions in, and rights to subscribe for, any
relevant securities of each of (i) the offeree company and (ii) any
securities exchange offeror(s). An Opening Position Disclosure by a
person to whom Rule 8.3(a) applies must be made by no later than
3.30 pm (London time) on the 10th business day following the
commencement of the offer period and, if appropriate, by no later
than 3.30 pm (London time) on the 10th business day following the
announcement in which any securities exchange offeror is first
identified. Relevant persons who deal in the relevant securities of
the offeree company or of a securities exchange offeror prior to
the deadline for making an Opening Position Disclosure must instead
make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes,
interested in 1% or more of any class of relevant securities of the
offeree company or of any securities exchange offeror must make a
Dealing Disclosure if the person deals in any relevant securities
of the offeree company or of any securities exchange offeror. A
Dealing Disclosure must contain details of the dealing concerned
and of the person's interests and short positions in, and rights to
subscribe for, any relevant securities of each of (i) the offeree
company and (ii) any securities exchange offeror, save to the
extent that these details have previously been disclosed under Rule
8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies
must be made by no later than 3.30 pm (London time) on the business
day following the date of the relevant dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of an offeree company or a
securities exchange offeror, they will be deemed to be a single
person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree
company and by any offeror and Dealing Disclosures must also be
made by the offeree company, by any offeror and by any persons
acting in concert with any of them (see Rules 8.1, 8.2 and
8.4).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Takeover Panel's website at www.thetakeoverpanel.org.uk,
including details of the number of relevant securities in issue,
when the offer period commenced and when any offeror was first
identified. You should contact the Panel's Market Surveillance Unit
on +44 (0)20 7638 0129 if you are in any doubt as to whether you
are required to make an Opening Position Disclosure or a Dealing
Disclosure.
No profit forecasts or estimates
No statement in this Announcement is intended as a profit
forecast or estimate for any period and no statement in this
Announcement should be interpreted to mean that earnings or
earnings per ordinary share, for Matchtech or Networkers,
respectively for the current or future financial years would
necessarily match or exceed the historical published earnings or
earnings per ordinary share for Matchtech or Networkers,
respectively.
Right to switch to an Offer
Matchtech reserves the right to elect (with the consent of the
Takeover Panel) to implement the Acquisition by way of an Offer for
the entire issued and to be issued share capital of Networkers as
an alternative to the Scheme. In such an event, the Offer will be
implemented on the same terms (subject to appropriate amendments),
so far as applicable, as those which would apply to the Scheme and
subject to the amendment referred to in Appendix I to this
Announcement.
Publication on website
In accordance with Rule 26.1 of the Code, a copy of this
Announcement will be made available (subject to certain
restrictions relating to persons resident in Restricted
Jurisdictions), free of charge, at www.matchtechgroupplc.com and
http://info.networkersplc.com by no later than 12 noon on 29
January 2015.
Neither the contents of the websites nor the content of any
other website accessible from hyperlinks on such websites is
incorporated into, or forms part of, this Announcement.
You will not be sent a hard copy of this announcement unless you
request one. You may request a hard copy of this announcement, free
of charge, by contacting Freddie Naylor-Leyland of Numis at
f.naylor-leyland@numis.com or by submitting a request in writing to
Freddie Naylor-Leyland at Numis Securities Limited, 10 Paternoster
Square, London, EC4M 7LT. Networkers Shareholders may also request
that all future documents, announcements and information to be sent
to them in relation to the Acquisition should be in hard copy
form.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY IN, INTO OR FROM ANY JURISDICTION
WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF
SUCH JURISDICTION
For immediate release
28 January 2015
Recommended Acquisition
of
NETWORKERS INTERNATIONAL PLC
by
MATCHTECH GROUP PLC
(to be implemented by way of a scheme of arrangement under Part
26 of the Companies Act)
1. Introduction
The Matchtech Board and the Networkers Board are pleased to
announce that they have reached agreement on the terms of a
recommended acquisition under which Matchtech will acquire the
entire issued and to be issued share capital of Networkers. It is
intended that the Acquisition be implemented by means of a
Court-sanctioned scheme of arrangement under Part 26 of the
Companies Act.
2. Summary of the terms of the Acquisition
The Acquisition will be on the terms and subject to the
Conditions set out in Appendix I to this Announcement and to be set
out in the Scheme Document.
Under the terms of the Acquisition, if the Scheme becomes
Effective, Scheme Shareholders will be entitled to receive:
for each Networkers Share 34 pence in cash; and
0.063256 New Matchtech Shares
Based on the Closing Price of the Matchtech Shares on 27 January
2015 (being the latest practicable date prior to this
Announcement), the Acquisition represents an indicative value of
67.4 pence per Networkers Share and values the entire issued and to
be issued share capital of Networkers on a fully diluted basis at
approximately GBP57.9 million.
The indicative value of 67.4 pence per Networkers Share
represents a premium of approximately:
-- 22.5 per cent. over the Closing Price of 55.0 pence per
Networkers Share on 27 January 2015 (being the latest practicable
date prior to this Announcement);
-- 28.6 per cent. to the average Closing Price per Networkers
Share for the one month period up to and including 27 January 2015
(being the latest practicable date prior to this Announcement);
and
-- 20.4 per cent. to the average Closing Price per Networkers
Share for the 12 month period up to and including 27 January 2015
(being the latest practicable date prior to this Announcement).
If the Scheme becomes Effective, it will result in the allotment
and issue of approximately 5.4 million New Matchtech Shares to
Scheme Shareholders, which would result in former Networkers
Shareholders holding approximately 17.9 per cent. of the enlarged
issued share capital of Matchtech and Matchtech's issued share
capital increasing by approximately 21.8 per cent. If the Scheme
becomes Effective and New Matchtech Shares are issued to Networkers
Shareholders, the holdings of existing Matchtech Shareholders will
be diluted such that they will hold approximately 82.1 per cent. of
the enlarged issued share capital of Matchtech.
Following completion of the Acquisition, Matchtech Shares will
continue to be admitted to trading on AIM.
The Networkers Shares will be acquired by Matchtech (or its
nominee) with full title guarantee, fully paid and free from all
liens, equitable interests, charges, encumbrances, rights of
pre-emption and any other third party rights or interests
whatsoever and together with all rights existing at the date of
this Announcement or thereafter attaching thereto, including
(without limitation) the right to receive and retain, in full, all
dividends and other distributions (if any) declared, made or paid
or any other return of capital (whether by way of reduction of
share capital or share premium account or otherwise) made on or
after the date of this Announcement in respect of the Networkers
Shares.
If any dividend or other distribution in respect of the
Networkers Shares is declared, paid or made on or after the date of
this Announcement, Matchtech reserves the right to reduce the
consideration payable for each Networkers Share under the terms of
the Acquisition by the amount per Networkers Share of such dividend
or distribution.
3. Background to and reasons for the Acquisition
The Acquisition will enable Matchtech to accelerate the 2017
Vision referenced in the Chairman's Statement in Matchtech's 2014
Annual Report. This sets out Matchtech's ambition to become the
market leading specialist recruiter in engineering and technology;
the employer of choice in the recruitment industry; and the best
partner to its clients and candidates; whilst developing a strong
international business and delivering increased value for
investors.
The Matchtech Directors believe that the Acquisition is
strategically compelling, addressing all aspects of Matchtech's
stated strategy:
Sharpening focus - both Matchtech and Networkers follow market
segmentation principles, with recruitment teams aligned to clearly
defined industry sectors/segments and skill sets. The Acquisition
consolidates Matchtech's position as the UK's largest white collar
engineering recruitment firm and through the proposed combination
it would become the fifth largest UK technology recruitment
business.
Sector convergence - Engineering, Technology and Telecoms skill
sets are converging rapidly and the Combined Group is well placed
to capitalise on the opportunities this presents.
Moving up the value chain - Matchtech has achieved organic
improvement in gross profit margin in recent years, to 10.0% in the
year to 31 July 2014 (2013: 9.4%), and expects this trend to
continue. Networkers operates at higher price points than
Matchtech, achieving a gross profit margin of 17.0% in the interim
period to 30 June 2014, and Matchtech believes that the business
combination will allow for the sharing of best practice in this
area.
Going global - the Acquisition will enable Matchtech to further
internationalise the service it currently provides to its clients
by leveraging Networkers' existing international infrastructure.
This global footprint will lower both the costs and risks of
Matchtech's planned geographical expansion and will enable faster
implementation of Matchtech's existing plans. The Acquisition will
bring a previously missing competence in multi-site,
multi-jurisdiction management to Matchtech. In addition, the
combination of Networkers' international candidate database with
Matchtech's largely UK contractor base will allow the Matchtech
Group to better address the skill shortage issues reported by its
clients worldwide.
Improved opportunities for candidates - by enhancing Matchtech's
international capability Matchtech will increase its attractiveness
to UK qualified engineers, who are highly valued throughout the
world and are increasingly seeking to gain experience on the
largest and most prestigious global projects.
Overall the Acquisition creates a more geographically balanced
business with scale in fast growing international markets whilst
maintaining a healthy contract: permanent NFI split. Based on an
illustrative combination of Matchtech's results for the year to 31
July 2014 and Networkers' performance in the 12 month period to 30
June 2014 (based on its interim results to 30 June 2014 plus H2
results for the year ending 31 December 2013), the combined NFI of
the businesses would be split 73% Contract, 27% Permanent (in line
with the existing Matchtech business) and 72% UK, 28% Rest of World
(compared to 98% UK, 2% Rest of World for Matchtech in the year to
31 July 2014).
In summary, the Matchtech Board believes that the Acquisition
will generate enhanced value for Matchtech Shareholders.
4. Recommendation
The Networkers Directors, who have been so advised by Liberum,
consider the terms of the Acquisition to be fair and reasonable. In
providing its advice to the Networkers Directors, Liberum has taken
into account the commercial assessments of the Networkers
Directors.
Accordingly, the Networkers Directors unanimously recommend that
Networkers Shareholders vote in favour of the Scheme at the Court
Meeting and the Resolutions at the General Meeting (or in the event
that the Acquisition is implemented by way of an Offer, to accept
or procure acceptance of such Offer), as they have each irrevocably
committed to do in respect of the 41,597,703 Networkers Shares
which they control, representing approximately 49.5 per cent. of
Networkers' issued share capital.
5. Background to and reasons for the recommendation
Networkers was admitted to trading on AIM in May 2006 via the
reverse takeover of Streetnames PLC by Networkers, with the
acquisition shares being issued at a price of 26 pence per
share.
Since its admission to trading on AIM, Networkers has
successfully executed its strategy of supplying clients locally,
regionally and internationally with highly skilled staff on a
permanent and temporary basis, in the Telecoms, IT and Energy and
Engineering sectors. Networkers has increased its international
footprint with offices in Canada, Malaysia and Singapore. In
addition it has acquired and successfully integrated three
companies into its three core sectors - MSB in 2006 (IT), Comms
Group in 2009 (Telecom) and Cappo in 2014 (Oil & Gas). The
acquisition of Cappo increased the international footprint further
with an office into Qatar.
Profits before tax have grown from GBP3.6 million for the 13
month period ended 31 December 2006 to GBP7.1 million in the year
ended 31 December 2013. This has been achieved without the need by
Networkers to raise any significant additional equity finance since
its admission to trading on AIM in 2006.
While Networkers Shareholders have enjoyed significant value
accretion since its admission to trading on AIM as a result of
Networkers pursuing this strategy, the market for Networkers Shares
has remained relatively illiquid. Matchtech made a proposal to the
Networkers Directors in December 2014 of offer terms which
represented a compelling strategic combination of the two
businesses and an exit for Networkers Shareholders at a premium.
Whilst the Networkers Directors anticipate a period of continuing
organic growth, and the markets in which Networkers operates
present acquisition opportunities, the Networkers Directors are
conscious of the potential risks and timescales involved with
achieving material strategic scale from which Networkers
Shareholders could derive the associated benefits.
After due consideration, the Networkers Directors have concluded
that Matchtech's proposal substantially recognises Networkers'
growth prospects and provides a degree of certainty in the form of
a partial cash exit to Networkers Shareholders today. In addition,
the element of consideration in the form of Matchtech shares gives
Networkers Shareholders exposure to the future growth prospects of
the enlarged Matchtech entity which, the Networkers Directors
believe, is capable of deriving the benefits of strategic scale and
improved stock market liquidity from which Networkers Shareholders
do not currently benefit.
Accordingly, the Networkers Directors have concluded that the
Acquisition is fair and reasonable and intend to recommend
unanimously that Networkers Shareholders vote in favour of the
resolutions at the Court Meeting and the General Meeting to approve
and implement the Scheme as the Networkers Directors have
irrevocably undertaken to do in respect of the Networkers Shares
they control, amounting to, in aggregate, 41,597,703 Networkers
Shares, representing approximately 49.5 per cent. of the Networkers
issued share capital.
6. Financial effects of the Acquisition
The Matchtech Directors have carefully reviewed the business and
prospects of the Combined Group following the Acquisition and
expect the Acquisition to be earnings enhancing in the first full
financial year([2]) .
7. Irrevocable undertakings
Matchtech has received irrevocable undertakings to vote in
favour of the Scheme at the Court Meeting and the Resolutions at
the General Meeting (or in the event that the Acquisition is
implemented by way of an Offer, to accept the Offer) from the
following Networkers Shareholders:
(a) Networkers Directors, in respect of the 41,597,703
Networkers Shares, in aggregate, which they control, representing
approximately 49.5 per cent. of the issued share capital of
Networkers; and
(b) Jon Moulton, Hargreave Hale and Dowgate Capital in respect
of 19,688,328 Networkers Shares, in aggregate, representing
approximately 23.4 per cent. of the issued share capital of
Networkers.
In aggregate, therefore, Matchtech has received irrevocable
undertakings to vote in favour of the Scheme at the Court Meeting
and the Resolutions at the General Meeting (or in the event that
the Acquisition is implemented by way of an Offer, to accept the
Offer) in respect of a total of 61,286,031 Networkers Shares,
representing approximately 72.9 per cent. of the entire issued
share capital of Networkers.
Further details of these irrevocable undertakings are set out in
Appendix III of this Announcement.
8. Information on Matchtech
Matchtech
Matchtech was established in 1984 and admitted to trading on AIM
in 2006. Matchtech has become one of the UK's top specialist
recruitment companies and generated annual revenue in excess of
GBP450m in the year to 31 July 2014.
Matchtech offers permanent and contracting recruitment solutions
and is expanding its international offering in line with its
strategic vision to 2017. Matchtech is split into two business
units, Engineering and Professional Services.
The Engineering business unit operates under the Matchtech brand
in six key markets, Aerospace, Automotive, Energy, Infrastructure,
Maritime and General Engineering.
Engineering is predominantly a contract focused brand with 80%
of its NFI in the interim period to 31 January 2015 generated from
contract recruitment and 20% from permanent placements.
The Professional Services business unit operates under four
brands in the Technology and Professional Staffing markets.
Professional Services generated 58% of its NFI in the interim
period to 31 January 2015 from contract recruitment and 42% from
permanent placements.
In the year to 31 July 2014, Matchtech generated 98% of NFI in
the UK.
Current trading, trends and prospects
For the year ended 31 July 2014, Matchtech reported revenue of
GBP451.6m, NFI of GBP45.0m (including a GBP1.8m contribution from
the Provanis acquisition made during the year), EBITA of GBP13.6m,
adjusted profit before tax of GBP12.6m and adjusted EPS of 39.1
pence. As at 31 July 2014, Matchtech had net debt of GBP3.1m.
Matchtech has also today released its Pre-close Trading Update
for the six months ending 31 January 2015.
Since Matchtech's last update on 14 November 2014, Matchtech has
continued to see strong demand in the UK and worldwide for skilled
engineers. The Matchtech Board believes that the Matchtech Group is
well placed to continue to benefit from this demand due to its
market leading position, balanced business model of contract and
permanent recruitment and Matchtech's niche focus within the
engineering and technology sectors.
The Matchtech Board expects the results for the full year to be
in line with its expectations.
9. Information on Networkers
Networkers was established in 2000 before being admitted to
trading on AIM in 2006 via a reverse takeover. It is a global
recruitment company specialised in delivering bespoke recruitment
services to some of the world's leading organisations. Working
within specialist market sectors, Networkers' focus is on supplying
clients with high skilled staff on a permanent and temporary basis
locally, regionally and internationally.
Networkers specialises in the Telecoms, IT and Energy and
Engineering sectors, with NFI for the six month period ended 30
June 2014 split as to 46% Telco, 38% IT and 16% Energy and
Engineering. The Energy and Engineering division is the newest
division within the group having been established five years
ago.
Networkers has operations in the UK and internationally, with
its last interim results statement announced in September 2014
showing Networkers as having 387 employees as at 30 June 2014, of
which 173 were based outside of the UK. In the same period, NFI was
split between contract and permanent placements as to 72% contract
and 28% permanent.
Current trading, trends and prospects
For the six months ending 30 June 2014, Networkers reported
revenue of GBP81m, NFI of GBP13.8m, adjusted profit before tax of
GBP2.7m and adjusted EPS of 2.13 pence. As at 30 June 2014,
Networkers had net debt of GBP5.7m.
Networkers has also today released its Pre-close Statement and
Trading Update covering the year ended 31 December 2014.
Trading activity during the second half of the year was much
improved compared with H1. This was driven by improved market
conditions in the Networkers Group's Telecoms division as well as
continued strong growth in the Energy and Engineering division. The
second half of the year's trading also showed an improvement
compared to H2 last year.
On a full year basis, the Networkers Group expects NFI and
underlying business performance to be in line with Networkers
management's expectations.
10. Networkers Share Schemes
Appropriate proposals will be made in due course to participants
in the Networkers Share Schemes. The Acquisition will extend to any
Networkers Shares (including any Treasury Shares) which are
unconditionally allotted, issued or transferred, on or prior to the
Scheme Record Time to satisfy the exercise of existing options
under the Networkers Share Schemes on or prior to the Scheme Record
Time. The Acquisitionwill not extend to any Networkers Shares
allotted, issued or transferred from Treasury to satisfy such
options exercised at any time after the Scheme Record Time. In the
event that the Scheme is sanctioned by the Court, the Networkers
Shares held in Treasury by Networkers will be cancelled prior to
the Scheme Record Time. Any Networkers Shares allotted, issued or
transferred after the Scheme Record Time to satisfy such options
will, subject to the Scheme becoming effective, be immediately
transferred to Matchtech (or its nominee) in exchange for the same
consideration as Networkers Shareholders will be entitled to
receive under the terms of the Acquisition. The terms of this
exchange are to be set out in the proposed amendments to the
Networkers' articles of association which will be considered at the
General Meeting.
Participants in the Networkers Share Schemes will be contacted
separately regarding the effect of the Acquisition on their options
under the Networkers Share Schemes and the actions they may take in
respect of those options.
11. Financing of the Acquisition
The cash consideration payable under the terms of the
Acquisition (together with part of the costs and expenses payable
in connection with the Acquisition) will be funded by the proceeds
of a facility agreement (the "HSBC Facility Agreement") which
Matchtech has entered into with HSBC Bank plc ("HSBC"). The HSBC
Facility Agreement is comprised of a term loan facility of GBP30
million.
Under the HSBC Facility Agreement, Matchtech has agreed, among
other things:
(a) except as required by law or regulation (including the
Code), the Panel, an order of the Court, or with the consent of
HSBC, not to waive, amend, declare or treat as satisfied any
condition of the Announcement where to do so would be materially
prejudicial to the interests of HSBC;
(b) (if Matchtech elects to make the Acquisition by way of an
Offer), not declare the Offer unconditional as to acceptances until
Matchtech has received valid acceptances (which have not been
withdrawn) in respect of not less than 90 per cent. of the shares
in Networkers to which the Offer relates.
Numis, financial adviser to Matchtech, is satisfied that
resources are available to Matchtech to enable it to satisfy in
full the cash consideration payable under the terms of the
Acquisition.
12. Management, employees and location of the business
The Matchtech Board has separately announced this morning that
Adrian Gunn, the current Chief Executive Officer of Matchtech
believes that this is the appropriate time to bring forward his
retirement from the business (which he originally planned for 2016)
and is stepping down with immediate effect. In consequence, Brian
Wilkinson will move from being Executive Chairman to being Chief
Executive Officer; and Ric Piper, currently Senior Independent
Non-Executive Director of Matchtech, will assume the role of
Interim Non-Executive Chairman until a permanent replacement is
identified.
It is intended that, following completion of the Acquisition, a
new management board will be formed to develop the strategy for the
Combined Group going forward led by Brian Wilkinson in his new role
as Group Chief Executive, Tony Dyer as Group Chief Financial
Officer and Keith Lewis as Chief Operating Officer of the existing
Matchtech businesses, along with the current Networkers Chief
Executive, Spencer Manuel, and Networkers Chief Financial Officer,
Jon Plassard.
It is also intended that Roger Goodman, currently Non-Executive
Chairman of Networkers, will join the Matchtech Board as a
Non-Executive Director.
Matchtech attaches great importance to the skills, knowledge and
expertise of Networkers' existing management and employees and
believes that they will be well placed to benefit from enhanced
career and business opportunities as part of the Combined Group.
Matchtech also recognises the strength of the Networkers brand and
intends to retain it at an operating level.
The Matchtech Board recognises that in order to achieve some of
the expected benefits of the Acquisition, it will be necessary to
perform a detailed review of how best to integrate Networkers into
the Combined Group. This review will be carried out by the new
management board to identify integration and market opportunities.
The analysis carried out to date has indicated the potential to
generate cost-savings for the Combined Group in areas where there
is an overlap of functions, which could involve some headcount
reductions, although Matchtech has not yet developed proposals as
to how such headcount reductions will be implemented. Following
completion of the Acquisition, Matchtech will seek to reduce costs
where appropriate which have historically been related to
Networkers' status as a publicly traded company and otherwise.
The review will also consider the Combined Group's operations
and resources in order to ensure that they are optimal for the
Combined Group's business. The number of employees and locations
actually affected by the Acquisition will depend on the outcome of
the detailed review.
Matchtech has given assurances to the Networkers Directors and
confirms that the existing contractual and statutory employment
rights of all Networkers employees - including rights to
participate in applicable pension and retirement plans, or
comparable plans - will be fully respected following completion of
the Acquisition. In addition, Matchtech intends to put in place
appropriate retention plans for those individuals who are
identified as key to the ongoing success of the Combined Group.
The Combined Group's headquarters and registered office will be
located at Matchtech's office at 1450 Parkway, Solent Business
Park, Whiteley, Fareham, Hampshire PO15 7AF.
13. Accounting considerations
The Combined Group will adopt Matchtech's accounting policies.
Matchtech's financial year ends on 31 July and Networkers'
financial year ends on 31 December. It is currently intended that
the Combined Group will have a 31 July financial year end. For
accounting purposes, it is expected that Networkers will be
consolidated into Matchtech's balance sheet. It is intended that
Networkers' assets and liabilities will be fair valued following
completion of the Acquisition resulting in the fair valuation of
Networkers' net assets being included on the Combined Group's
balance sheet.
14. Dividends and dividend policy
The Matchtech Board intends to continue Matchtech's current
progressive dividend policy and will decide the absolute level of
any future dividends taking into account the Combined Group's
underlying earnings, cash flows, capital investment plans and the
prevailing market outlook.
15. Acquisition related arrangements
Confidentiality Agreement
Matchtech and Networkers entered into a confidentiality
agreement dated 12 December 2014 pursuant to which each of
Matchtech and Networkers have agreed to keep confidential
information about the other party and not to disclose to third
parties (other than permitted recipients) confidential information
exchanged by them unless required by law or regulation (the
"Confidentiality Agreement"). The Confidentiality Agreement also
contains customary provisions relating to non-solicitation of the
other party's senior employees, customers and suppliers. The
Confidentiality Agreement will remain in force until completion of
the Acquisition, or for a period of two years from the date of the
Confidentiality Agreement.
Lock-Up Agreements
Jon Plassard, Spencer Manuel, Scott Simons and Saul Penhallow
have entered into lock-up agreements dated 27 January 2015 with
Matchtech pursuant to which they have each agreed, subject to
certain customary exceptions, not to dispose of any of their
respective interests in all or any of the New Matchtech Shares
which they are to receive pursuant to the Acquisition for a period
of two (2) years from the Effective Date or, if earlier, until the
date such relevant individual has his position as a director or
employee of Matchtech or Networkers terminated by the Company or
Networkers other than for misconduct, misfeasance, gross negligence
or serious breach of any material condition of employment (the
"Lock-Up Agreements").
16. Structure of the Acquisition
Scheme
It is intended that the Acquisition will be effected by a
Court-sanctioned scheme of arrangement between Networkers and the
Scheme Shareholders under Part 26 of the Companies Act, and will
involve, among other things, a reduction of capital under section
641 of the Companies Act. The purpose of the Scheme is to provide
for Matchtech to become the owner of the whole of the issued and to
be issued share capital of Networkers. Under the Scheme, the
Acquisition is to be principally achieved by:
(a) the cancellation of the Scheme Shares held by Scheme
Shareholders in consideration for which the Scheme Shareholders
will receive consideration on the basis set out in paragraph 2 of
this Announcement;
(b) amendments to Networkers' articles of association to ensure
that any Networkers Shares issued or transferred from Treasury
(other than the New Networkers Shares to be issued to Matchtech or
any subsidiaries or nominees of Matchtech) (for example as a result
of the exercise of options granted under the Networkers Share
Schemes) between the approval of the Scheme at the Court Meeting
and the Scheme Record Time will be subject to the Scheme or after
the Scheme Record Time will automatically be acquired by Matchtech
(or its nominee); and
(c) the issue of New Networkers Shares to Matchtech (or its
nominee) provided for in the Scheme.
Approval by Court Meeting and General Meeting
In order to become Effective, the Scheme requires:
(a) the satisfaction (or, where applicable, waiver) of the Conditions (see below);
(b) the approval of a majority in number of the Scheme
Shareholders present and voting at the Court Meeting either in
person or by proxy, representing not less than 75 per cent. in
value of the Scheme Shares voted by those Scheme Shareholders. At
the Court Meeting, voting will be by poll and not on a show of
hands and each Scheme Shareholder present in person or by proxy
will be entitled to one vote for each Scheme Share held; and
(c) the approval of the Resolutions by not less than 75 per
cent. of the votes cast, either in person or by proxy, at the
General Meeting.
Application to Court to sanction the Scheme and confirmation of
the Capital Reduction
Once the approval of the Scheme Shareholders to the Scheme has
been obtained at the Court Meeting and the approval of the
Networkers Shareholders to the Resolutions relating to the
Acquisition at the General Meeting, the Scheme (including,
confirmation of the Capital Reduction) must be sanctioned by the
Court at the Court Hearings.
In the event that the Scheme is sanctioned by the Court, the
Networkers Shares still held in Treasury by Networkers will be
cancelled prior to the Scheme Record Time.
The Scheme will become Effective in accordance with its terms on
delivery of the Scheme Court Order, the Reduction Court Order and
the Statement of Capital giving details of Networkers' share
capital, as altered by the Capital Reduction, attached thereto to
the Registrar of Companies, and, in relation to the Capital
Reduction, the Reduction Court Order and attached minutes being
filed with and registered by the Registrar of Companies. Upon the
Scheme becoming Effective, it will be binding on all Scheme
Shareholders, irrespective of whether or not they attended or voted
at the Court Meeting or General Meeting, or whether they voted in
favour of or against the Scheme and the consideration due under the
Acquisition will be dispatched by Matchtech to Scheme Shareholders
no later than 14 days after the Effective Date.
Full details of the Scheme to be set out in the Scheme
Document
The Scheme is subject to the satisfaction (or, where applicable,
waiver) of the Conditions and the full terms and conditions to be
set out in the Scheme Document. The Scheme Document will include
full details of the Scheme, together with notices of the Court
Meeting and the General Meeting and the expected timetable, and
will specify the action to be taken by Scheme Shareholders.
The Scheme will be governed by English law. The Scheme will be
subject to the applicable requirements of the Code, the Takeover
Panel, the London Stock Exchange, the FCA and the AIM Rules.
The Scheme will contain a provision for Networkers and Matchtech
jointly to consent, on behalf of all persons concerned, to any
modification of or addition to the Scheme or to any condition that
the Court may approve or impose. Networkers has been advised that
the Court would be unlikely to approve any modification of, or
addition to, or impose a condition to the Scheme which might be
material to the interests of the Scheme Shareholders unless the
Scheme Shareholders were informed of such modification, addition or
condition. It would be a matter for the Court to decide, in its
discretion, whether or not a further meeting of the Scheme
Shareholders should be held in these circumstances.
It is expected that the Scheme Document will be dispatched to
Networkers Shareholders and, for information only, to participants
in the Networkers Share Schemes as soon as practicable and, in any
event, within the next 28 days (or such later date as may be agreed
with the Panel).
Conditions to the Acquisition
The Conditions to the Acquisition are set out in full in
Appendix I to this Announcement.
The Scheme is conditional, among other things, upon:
(a) the Scheme becoming Effective by the Long Stop Date or such
later date as Networkers and Matchtech may, with the consent of the
Takeover Panel, agree and (if required) the Court may approve,
failing which the Scheme will lapse;
(b) the approval of the Scheme by a majority in number of the
Scheme Shareholders voting, either in person or by proxy, at the
Court Meeting, representing not less than 75 per cent. in value of
the Scheme Shares voting, either in person or by proxy, at the
Court Meeting;
(c) the passing of all Resolutions by the requisite majority at the General Meeting; and
(d) the sanction of the Scheme and subsequent confirmation of
the Capital Reduction by the Court (in either case, with or without
modification on terms agreed by Networkers and Matchtech) and the
delivery of office copies of the Court Orders and the Statement of
Capital to the Registrar of Companies and, if the Court so orders
for the Scheme to become Effective, registration of the Reduction
Court Order confirming the Capital Reduction and Statement of
Capital with the Registrar of Companies.
Scheme timetable/further information
A full anticipated timetable will be set out in the Scheme
Document. At this stage, subject to the approval and availability
of the Court (which is subject to change), Matchtech's expected
timetable for the implementation of the Acquisition is as
follows:
Dispatch of Scheme Document, 12 February 2015 (or as soon
together with the Forms as reasonably practicable thereafter)
of Proxy
Court Meeting to approve 9 March 2015 (or as soon as
Scheme reasonably practicable thereafter)
General Meeting to approve 9 March 2015 (or as soon as
Resolutions reasonably practicable thereafter)
Scheme Court Hearing to 30 March 2015 (or as soon as
approve Scheme reasonably practicable thereafter)
Reduction Court Hearing 1 April 2015 (or as soon as
to approve the Reduction reasonably practicable thereafter)
of Capital
Effective Date 2 April 2015 (or the Business
Day following the Reduction
Court Hearing)
Dispatch of cash consideration Within 14 days after the Effective
Date
If the Acquisition does not become Effective by the Long Stop
Date, the Acquisition will lapse except where the approval of
Scheme Shareholders at the Court Meeting and the Networkers
Shareholders at the General Meeting is obtained before this date,
in which case the Long Stop Date for the Acquisition may be
extended to such later date as Networkers and Matchtech may agree
and, if appropriate, the Court and the Takeover Panel may
approve.
Right to switch to an Offer
Matchtech reserves the right to elect (with the consent of the
Takeover Panel) to implement the Acquisition by way of an Offer for
the entire issued and to be issued share capital of Networkers as
an alternative to the Scheme. In such an event, the Offer will be
implemented on the same terms (subject to appropriate amendments),
so far as applicable, as those which would apply to the Scheme and
subject to the amendment referred to in paragraph 4 of Part 2 of
Appendix I to this Announcement.
17. De-listing and re-registration as a private limited company
De-listing
It is intended that Matchtech will procure that Networkers
cancels the admission of the Networkers Shares to trading on AIM on
or shortly after the Effective Date.
It is intended that dealings in Networkers Shares shall be
cancelled at close of business in London on 2 April 2015 and that
no transfers of Networkers Shares (other than to Matchtech and/or
its nominee(s)) will be registered after that time.
Re-registration as a private limited company
It is also intended that Networkers be re-registered as a
private limited company as soon as practicable after the Effective
Date.
18. New Matchtech Shares
The New Matchtech Shares will, when issued, be ordinary shares
in the capital of Matchtech with a nominal value of GBP0.01 each,
will be fully paid and rank pari passu in all respects with the
Matchtech Shares then in issue.
The aggregate number of New Matchtech Shares to which a Scheme
Shareholder will be entitled shall, in each case, be rounded down
to the nearest whole number of New Matchtech Shares. Fractions of
New Matchtech Shares will not be allotted or issued to Scheme
Shareholders. Fractional entitlements will be aggregated and sold
in the market after the Effective Date and the net proceeds (after
dealing costs) of sale will be paid in cash to the Scheme
Shareholders entitled thereto as nearly as practicable in
accordance with what would otherwise have been their respective
fractional entitlements.
Once the Scheme becomes Effective, New Matchtech Shares will be
allotted to Scheme Shareholders. Application will be made for the
New Matchtech Shares to be admitted to trading on AIM. It is
expected that admission to trading on AIM will become effective,
and that dealings in the New Matchtech Shares will commence, on the
date on which the Scheme becomes Effective.
The existing Matchtech Shares are already admitted to CREST. It
is expected that all of the New Matchtech Shares, when issued and
fully paid, will be capable of being held and transferred by means
of CREST. It is expected that the New Matchtech Shares will trade
under ISIN GB001B1FMDQ43.
Further details on admission to trading, dealing and settlement
will be included in the Scheme Document.
19. Disclosure of interests in Networkers
Matchtech confirms that it is making on the date of this
Announcement an Opening Position Disclosure, setting out the
details required to be disclosed by it under Rule 8.1(a) of the
Code.
As at the close of business on 27 January 2015, being the latest
practicable date prior to this Announcement, save for the
irrevocable undertakings referred to in paragraph 7 above, none of
Matchtech or any Matchtech Directors or, so far as Matchtech is
aware, any person acting, or deemed to be acting, in concert with
Matchtech:
(a) had an interest in, or right to subscribe for, relevant securities of Networkers;
(b) had any short position in (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, relevant securities of Networkers;
(c) had procured an irrevocable commitment or letter of intent
to accept the terms of the Acquisition in respect of relevant
securities of Networkers; or
(d) had borrowed or lent any Networkers Shares.
Furthermore, save for the irrevocable undertakings described in
paragraph 7 above, no arrangement exists between Matchtech or
Networkers or a person acting in concert with Matchtech or
Networkers in relation to Networkers Shares. For these purposes, an
arrangement includes any indemnity or option arrangement, any
agreement or any understanding, formal or informal, of whatever
nature, relating to Networkers Shares which may be an inducement to
deal or refrain from dealing in such securities.
20. Rule 2.10 disclosure
In accordance with Rule 2.10 of the Code:
(a) Networkers confirms that as at the close of business on 27
January 2015, being the last Business Day before this Announcement,
it had 84,056,832 Networkers Shares in issue with voting rights.
This number excludes 8,446,155 Networkers Shares held in Treasury.
The ISIN for the Networkers Shares is GB00B1319W10; and
(b) Matchtech confirms that as at the close of business on 27
January 2015, being the last Business Day before this Announcement,
it had 24,966,817 Matchtech Shares in issue with voting rights. The
ISIN for the Matchtech Shares is GB001B1FMDQ43.
21. General
The Acquisition will be subject to the Conditions and other
terms set out in this Announcement and to the full terms and
conditions which will be set out in the Scheme Document. The
Conditions to, and certain further terms of, the Acquisition, are
set out in Appendix I. Appendix II to this Announcement contains
certain sources of information and bases of calculation contained
in this Announcement. Information in respect of the Irrevocable
Undertakings is set out in Appendix III to this Announcement.
Certain terms used in this Announcement are defined in Appendix IV
to this Announcement.
Numis and Liberum have each given and not withdrawn their
consent to the publication of this Announcement with the inclusion
herein of the references to their names in the form and context in
which they appear.
22. Documents on display
Copies of the following documents required to be published
pursuant to Rules 26.1 and 26.2 of the Code will be published,
subject to certain restrictions relating to persons resident in any
Restricted Jurisdiction, on Matchtech's website at
www.matchtechgroupplc.com and on Networkers' website at
http://info.networkersplc.com by no later than noon on the Business
Day following this Announcement:
(a) a copy of this Announcement;
(b) the Confidentiality Agreement;
(c) the Lock-Up Agreements;
(d) the irrevocable undertakings listed in Appendix III; and
(e) the Finance Documents.
Neither the contents of Networkers' website or the contents of
Matchtech's website, nor the content of any other website
accessible from hyperlinks on either such website, is incorporated
into or forms part of, this Announcement.
You will not be sent a hard copy of this Announcement unless you
request one. You may request a hard copy of this announcement, free
of charge, by contacting Freddie Naylor-Leyland of Numis at
f.naylor-leyland@numis.com or by submitting a request in writing to
Freddie Naylor-Leyland at Numis Securities Limited, 10 Paternoster
Square, London, EC4M 7LT. Networkers Shareholders may also request
that all future documents, announcements and information to be sent
to them in relation to the Acquisition should be in hard copy
form.
Enquiries
Matchtech Group plc
Brian Wilkinson Tel: +44 (0) 1489 898989
Tony Dyer
Numis
(Financial Adviser, NOMAD and
Broker to Matchtech) Tel: +44(0)20 7260 1000
Michael Meade
James Serjeant
Kevin Cruickshank
Newgate Threadneedle
(PR adviser to Matchtech)
Andrew Jones Tel: +44(0) 20 7680 6524
Rob Newman
Networkers International plc
Spencer Manuel
Jon Plassard Tel: +44 20 8315 9000
Liberum
(Financial Adviser and NOMAD
to Networkers) Tel: +44 (0)20 3100 2000
Steve Pearce
Tom Fyson
Robert Morton
Josh Hughes
Numis Tel: +44 (0) 20 7260 1000
(Broker to Networkers)
David Poutney
Important disclaimers (including in relation to securities laws
restrictions)
Numis, which is authorised and regulated by the Financial
Conduct Authority, has been Networkers' nominated adviser and
corporate broker. In addition, Numis is nominated adviser to
Matchtech and is acting as its broker and financial adviser in
connection with the offer referred to above. Upon release of this
Announcement, Numis is stepping down as nominated adviser to
Networkers and is being replaced by Liberum Capital Limited but
will continue to act as corporate broker to Networkers. Numis will
not be responsible to any other parties other than Matchtech in
connection with the contents of this Announcement or for providing
the protections afforded to clients of Numis, or for providing
advice in relation to the contents of this Announcement or any
matters referred to herein.
Liberum, which is authorised and regulated in the United Kingdom
by the Financial Conduct Authority, is acting exclusively for
Networkers as adviser for the purposes of Rule 3 of the Code in
connection with the Acquisition and no one else and will not be
responsible to anyone other than Networkers for providing the
protections afforded to customers of Liberum or for providing
advice in relation to the Acquisition or any matter referred to
herein.
This Announcement is for information purposes only and is not
intended to and does not constitute, or form any part of, an offer
to sell or an invitation to purchase or subscribe for any
securities or the solicitation of any vote or approval in any
jurisdiction pursuant to the Acquisition or otherwise. The
Acquisition will be made solely by means of the Scheme Document
(or, if applicable, the Offer Document), which will contain the
full terms and conditions of the Acquisition, including details of
how to vote in respect of the Acquisition. Any decision in respect
of, or other response to, the Acquisition, should be made only on
the basis of the information contained in the Scheme Document (or,
if applicable, the Offer Document).
This Announcement does not constitute a prospectus or a
prospectus equivalent document.
This Announcement has been prepared for the purpose of complying
with English law and the Code and the information disclosed may not
be the same as that which would have been disclosed if this
Announcement had been prepared in accordance with the laws of
jurisdictions outside England.
Overseas Shareholders
The availability of New Matchtech Shares in and the release,
publication or distribution of this Announcement in certain
jurisdictions may be restricted by law. Persons who are not
resident in the United Kingdom or who are subject to the laws of
other jurisdictions should inform themselves of, and observe, any
applicable requirements. Networkers Shareholders who are in any
doubt regarding such matters should consult an appropriate
independent adviser in the relevant jurisdiction without delay.
The laws of the relevant jurisdictions may affect the
availability of the Acquisition 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 failure to comply with the
applicable requirements may constitute a violation of the laws
and/or regulations of any such jurisdiction. To the fullest extent
permitted by applicable law, the companies and persons involved in
the Scheme disclaim any responsibility and liability for the
violation of such restrictions by any person.
The Acquisition will not be made available, directly or
indirectly, in a Restricted Jurisdiction, and the Acquisition will
not be capable of acceptance from within a Restricted Jurisdiction.
Accordingly, copies of this Announcement and all other
documentation relating to the Acquisition are not being, and must
not be, directly or indirectly, mailed or otherwise forwarded or
distributed in, into or from a Restricted Jurisdiction and persons
receiving this Announcement (including custodians, nominees and
trustees) must not distribute or send it into or from a Restricted
Jurisdiction. Further details in relation to overseas Networkers
Shareholders will be contained in the Scheme Document.
The Acquisition relates the shares in an English company and it
is proposed to be made by means of a scheme of arrangement provided
for under English company law. The scheme of arrangement will
relate to the shares of an English company that is a "foreign
private issuer" as defined under Rule 3b-4 under the US Securities
Exchange Act of 1934, as amended (the "Exchange Act"). A
transaction effected by means of a scheme of arrangement is not
subject to the shareholder vote, proxy and tender offer rules under
the Exchange Act. Accordingly, the Acquisition is subject to the
disclosure requirements and practices applicable in the UK to
scheme of arrangement, which differ from the disclosure
requirements and practices of US shareholder vote, proxy and tender
offer rules. Financial information included in the relevant
documentation will have been prepared in accordance with accounting
standard applicable in the UK and may not be comparable to the
financial statement of US companies.
This Announcement is not an offer of securities for sale in the
United States. The New Matchtech Shares which will be issued in
connection with the Acquisition have not been, will not be and are
not required to be registered with the US Securities and Exchange
Commission (the "SEC") under the Securities Act of 1933, as amended
(the "US Securities Act") or under the securities laws of any
state, district or other jurisdiction of the United States, and may
not be offered, sold, delivered or transferred except pursuant to
an available exemption from or in a transaction not subject to the
registration requirements of the US Securities Act and applicable
US state securities laws.
Neither the SEC nor any other US federal or state securities
commission or regulatory authority has approved or disapproved the
New Matchtech Shares or passed an opinion upon the fairness or
merits of such securities or upon the accuracy or adequacy of the
disclosures contained in this document. Any representation to the
contrary is a criminal offence in the United States.
In the event that Matchtech extends the Acquisition into the
U.S. at some future time, it will do so in satisfaction of the
procedural and filing requirements of the U.S. securities laws at
that time, to the extent applicable thereto.
Forward Looking Statements
This Announcement contains certain forward-looking statements
with respect to Matchtech and Networkers. These forward-looking
statements can be identified by the fact that they do not relate
only to historical or current facts. Forward-looking statements
often use words such as "anticipate", "target", "expect",
"estimate", "intend", "plan", "goal", "believe", "aim", "will",
"may", "would", "could" or "should" or other words of similar
meaning or the negative thereof. Forward-looking statements
include, without limitation, statements relating to the following:
(i) future capital expenditures, expenses, revenues, economic
performance, financial conditions, dividend policy, losses and
future prospects; (ii) business and management strategies and the
expansion and growth of the operations of the Matchtech Group or
the Networkers Group; and (iii) the effects of government
regulation on the business of the Matchtech Group or the Networkers
Group.
These forward-looking statements involve known and unknown
risks, uncertainties and other factors which may cause the actual
results, performance or achievements of any such person, or
industry results, to be materially different from any results,
performance or achievements expressed or implied by such
forward-looking statements. These forward-looking statements are
based on numerous assumptions regarding the present and future
business strategies of such persons and the environment in which
each will operate in the future. Given these risks and
uncertainties, potential investors should not place any reliance on
forward-looking statements which refer only to the position as at
the date of this Announcement. All subsequent oral or written
forward-looking statements attributable to Matchtech or Networkers
or any persons acting on their behalf are expressly qualified in
their entirety by the cautionary statement above. None of Matchtech
or Networkers undertakes any obligation to update publicly or
revise forward-looking statements, whether as a result of new
information, future events or otherwise, except to the extent
legally required.
Disclosure Requirements of the Code
Under Rule 8.3(a) of the Code, any person who is interested in
1% or more of any class of relevant securities of an offeree
company or of any securities exchange offeror (being any offeror
other than an offeror in respect of which it has been announced
that its offer is, or is likely to be, solely in cash) must make an
Opening Position Disclosure following the commencement of the offer
period and, if later, following the announcement in which any
securities exchange offeror is first identified. An Opening
Position Disclosure must contain details of the person's interests
and short positions in, and rights to subscribe for, any relevant
securities of each of (i) the offeree company and (ii) any
securities exchange offeror(s). An Opening Position Disclosure by a
person to whom Rule 8.3(a) applies must be made by no later than
3.30 pm (London time) on the 10th business day following the
commencement of the offer period and, if appropriate, by no later
than 3.30 pm (London time) on the 10th business day following the
announcement in which any securities exchange offeror is first
identified. Relevant persons who deal in the relevant securities of
the offeree company or of a securities exchange offeror prior to
the deadline for making an Opening Position Disclosure must instead
make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes,
interested in 1% or more of any class of relevant securities of the
offeree company or of any securities exchange offeror must make a
Dealing Disclosure if the person deals in any relevant securities
of the offeree company or of any securities exchange offeror. A
Dealing Disclosure must contain details of the dealing concerned
and of the person's interests and short positions in, and rights to
subscribe for, any relevant securities of each of (i) the offeree
company and (ii) any securities exchange offeror, save to the
extent that these details have previously been disclosed under Rule
8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies
must be made by no later than 3.30 pm (London time) on the business
day following the date of the relevant dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of an offeree company or a
securities exchange offeror, they will be deemed to be a single
person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree
company and by any offeror and Dealing Disclosures must also be
made by the offeree company, by any offeror and by any persons
acting in concert with any of them (see Rules 8.1, 8.2 and
8.4).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Takeover Panel's website at www.thetakeoverpanel.org.uk,
including details of the number of relevant securities in issue,
when the offer period commenced and when any offeror was first
identified. You should contact the Panel's Market Surveillance Unit
on +44 (0)20 7638 0129 if you are in any doubt as to whether you
are required to make an Opening Position Disclosure or a Dealing
Disclosure.
No profit forecasts or estimates
No statement in this Announcement is intended as a profit
forecast or estimate for any period and no statement in this
Announcement should be interpreted to mean that earnings or
earnings per ordinary share, for Matchtech or Networkers,
respectively for the current or future financial years would
necessarily match or exceed the historical published earnings or
earnings per ordinary share for Matchtech or Networkers,
respectively.
Right to switch to an Offer
Matchtech reserves the right to elect (with the consent of the
Takeover Panel) to implement the Acquisition by way of an Offer for
the entire issued and to be issued share capital of Networkers as
an alternative to the Scheme. In such an event, the Offer will be
implemented on the same terms (subject to appropriate amendments),
so far as applicable, as those which would apply to the Scheme and
subject to the amendment referred to in Appendix I to this
Announcement.
Publication on website
In accordance with Rule 26.1 of the Code, a copy of this
Announcement will be made available (subject to certain
restrictions relating to persons resident in Restricted
Jurisdictions), free of charge, at www.matchtechgroupplc.com and
http://info.networkersplc.com by no later than 12 noon on 29
January 2015.
Neither the contents of the websites nor the content of any
other website accessible from hyperlinks on such websites is
incorporated into, or forms part of, this Announcement.
You will not be sent a hard copy of this announcement unless you
request one. You may request a hard copy of this announcement, free
of charge, by contacting Freddie Naylor-Leyland of Numis at
f.naylor-leyland@numis.com or by submitting a request in writing to
Freddie Naylor-Leyland at Numis Securities Limited, 10 Paternoster
Square, London, EC4M 7LT. Networkers Shareholders may also request
that all future documents, announcements and information to be sent
to them in relation to the Acquisition should be in hard copy
form.
APPENDIX I
CONDITIONS AND FURTHER TERMS OF THE ACQUISITION
The Acquisition will be subject to the applicable requirements
of the Code, the Panel, the London Stock Exchange, the AIM Rules
and the FCA.
The Scheme will be governed by English law and will be subject
to the exclusive jurisdiction of the English courts. In addition,
it will be subject to the terms and conditions set out below and to
be set out in the Scheme Document.
Matchtech reserves the right to elect (with the consent of the
Panel) to implement the Acquisition by way of an Offer.
Each of the Conditions shall be regarded as a separate Condition
and shall not be limited by reference to any other Condition.
PART 1: Conditions of the Acquisition
The Acquisition will be subject to the satisfaction of the
following Conditions:
Scheme approval
The Acquisition will be conditional upon the Scheme becoming
unconditional and becoming Effective by no later than the Long Stop
Date.
(A) The Scheme will be conditional upon:
(i) its approval by a majority in number representing not less
than 75% in value of the Scheme Shareholders who are on the
register of members of Networkers at the Voting Record Time and who
are present and voting, either in person or by proxy, at the Court
Meeting and at any separate class meeting which may be required by
the Court or at any adjournment of any such meeting on or before
the 22(nd) day after the expected date of the Court Meeting to be
set out in the Scheme Document (or such later date, if any, as
Matchtech and Networkers may, subject to the Takeover Code or with
the consent of the Panel, agree and, if required, the Court may
approve);
(ii) all resolutions necessary to approve and implement the
Scheme and Capital Reduction being duly passed by the requisite
majority or majorities at the General Meeting or at any adjournment
of that meeting on or before the 22(nd) day after the expected date
of the General Meeting to be set out in the Scheme Document (or
such later date, if any, as Matchtech and Networkers may, subject
to the Takeover Code or with the consent of the Panel, agree and,
if required, the Court may approve);
(iii) the sanction of the Scheme by the Court and the
confirmation of the Capital Reduction by the Court, in each case
without modification or with modification on terms acceptable to
Matchtech and Networkers, on or before the 22(nd) day after the
expected date of the Court Hearing to be set out in the Scheme
Document (or such later date, if any, as Matchtech and Networkers
may, subject to the Takeover Code or with the consent of the Panel,
agree and, if required, the Court may approve) and:
(a) the delivery of office copies of each of the Court Orders
and of the Statement of Capital to the Registrar of Companies;
and
(b) if the Court so orders for it to become effective, the
registration of the Reduction Court Order and the Statement of
Capital by the Registrar of Companies;
(iv) the London Stock Exchange having acknowledged to Matchtech
or its agent (and such acknowledgement not having been withdrawn)
that the application for the admission of the New Matchtech Shares
to trading on AIM has been approved and (after satisfaction of any
conditions to which such approval is expressed to be subject
("admission conditions")) will become effective as soon as a
dealing notice has been issued by the London Stock Exchange and any
admission conditions having been satisfied and (ii) the London
Stock Exchange having acknowledged to Matchtech or its agent (and
such acknowledgement not having been withdrawn) that the New
Matchtech Shares will be admitted to trading on AIM; and
(v) the Scheme becoming effective on or before 6.00 p.m. on the Long Stop Date.
In addition, subject as stated to Part 2 of this Appendix I and
to the requirements of the Panel, the Acquisition will be
conditional upon the following Conditions and, accordingly, the
necessary actions to make the Scheme Effective will not be taken
unless the following Conditions (as amended if appropriate) have
been satisfied (and continue to be satisfied pending the
commencement of the Scheme Court Hearing) or, where relevant,
waived in writing prior to the Scheme being sanctioned by the
Court:
General anti-trust and regulatory
(B) no Third Party having given notice of its decision or
threatened to take, institute or implement any action, proceeding,
suit, investigation, enquiry or reference, or having required any
action or step to be taken or otherwise having done anything or
having enacted, made or proposed any statute, regulation, decision,
order or change to published practice (and in each case, not having
withdrawn the same) and there not continuing to be outstanding any
statute, regulation, decision or order that would or might
reasonably be expected to (in any case to an extent or in a manner
which is material in the context of the Wider Networkers Group or
the Wider Matchtech Group, as the case may be, in each case, taken
as a whole):
(i) make the Acquisition, its implementation or the acquisition
or proposed acquisition of any shares or other securities in, or
control or management of, Networkers by any member of the Wider
Matchtech Group, void, illegal and/or unenforceable under the laws
of any relevant jurisdiction, or otherwise directly or indirectly
prevent, prohibit, or restrain, restrict, materially delay or
otherwise to a material extent interfere with the implementation
of, or impose material additional conditions or obligations with
respect to, or otherwise impede, challenge, interfere, hinder the
Acquisition or its implementation or require material amendment to
the terms of the Acquisition or the acquisition or proposed
acquisition of any Networkers Shares, or voting control of,
Networkers by any member of the Wider Matchtech Group, or otherwise
challenge or interfere therewith;
(ii) require, prevent or materially delay the divestiture or
materially alter the terms envisaged for any proposed divestiture
by any member of the Wider Matchtech Group or by any member of the
Wider Networkers Group of all or any material part of their
respective businesses, assets or property or impose any material
limitation on the ability of all or any of them to conduct their
respective businesses (or any part thereof) or to own or voting
control any of their assets or properties (or any material part
thereof);
(iii) impose any material limitation on, or result in a material
delay in, the ability of any member of the Wider Matchtech Group
directly or indirectly to acquire, hold or to exercise effectively
all or any rights of ownership in respect of shares or loans or
securities convertible into shares or any other securities (or the
equivalent) in Networkers or on the ability of any member of the
Wider Networkers Group or any member of the Wider Matchtech Group
directly or indirectly to hold or exercise effectively all or any
rights of ownership in respect of shares or loans or securities
convertible into shares or any other securities (or the equivalent)
in, or to exercise voting or management control over, any member of
the Wider Networkers Group;
(iv) require, prevent or materially delay a divestiture, or
materially alter the terms envisaged for any proposed divestiture
by any member of the Wider Matchtech Group or the Wider Networkers
Group of any shares or other securities (or the equivalent) in any
member of the Wider Networkers Group or any member of the Wider
Matchtech Group;
(v) except pursuant to Chapter 3 of Part 28 of the Companies Act
in the event that Matchtech elects to implement the Acquisition by
way of an Offer, require any member of the Wider Matchtech Group or
the Wider Networkers Group to acquire, or offer to acquire any
shares or other securities (or the equivalent) or interest in any
member of the Wider Networkers Group or any asset owned by any
third party (other than in connection with the implementation of
the Acquisition);
(vi) impose any material limitation on, or result in a material
delay in, the ability of any member of the Wider Matchtech Group or
any member of the Wider Networkers Group to integrate all or any
part of its business with all or any part of the business of any
other member of the Wider Matchtech Group and/or the Wider
Networkers Group;
(vii) require any member of the Wider Networkers Group to
relinquish, terminate or amend in any way that is material any
contract to which any member of the Wider Networkers Group is a
party;
(viii) result in any member of the Wider Networkers Group or any
member of the Wider Matchtech Group ceasing to be able to carry on
business under any name under which it currently does so in any
jurisdiction; or
(ix) otherwise materially adversely affect all or any of the
business, assets or liabilities, profits or prospects of any member
of the Wider Networkers Group or any member of the Wider Matchtech
Group;
and all applicable waiting and other time periods (including any
extensions thereof) during which any such Third Party could decide
to take, institute, implement or threaten any such action,
proceeding, suit, investigation, enquiry or reference or take any
other step under the laws of any jurisdiction in respect of the
Acquisition or the acquisition or proposed acquisition of any
Networkers Shares or voting control of, Networkers or otherwise
intervene having expired, lapsed or been terminated;
Notifications, waiting periods and Authorisations
(C) all material notifications, filings or applications which
are necessary having been made in connection with the Acquisition
and all necessary waiting or other time periods (including any
extensions thereof) under any applicable legislation or regulations
of any relevant jurisdiction having expired, lapsed or been
terminated (as appropriate) and all statutory and regulatory
obligations in any jurisdiction having been complied with in each
case in respect of the Acquisition in each case where the absence
of such notification, filing or application would have a material
adverse effect on the Wider Networkers Group or the Wider Matchtech
Group, as the case may be, in each case, taken as a whole and all
Authorisations which are necessary in any relevant jurisdiction for
or in respect of the Acquisition or the acquisition or the proposed
acquisition of any shares or other securities in, or control of,
Networkers or any other member of the Wider Networkers Group by any
member of the Wider Matchtech Group having been obtained in terms
and in a form reasonably satisfactory to Matchtech from all
relevant Third Parties or (without prejudice to the generality of
the foregoing) from any persons or bodies with whom any member of
the Wider Networkers Group has entered into contractual
arrangements and all such Authorisations necessary to carry on the
business of any member of the Wider Networkers Group in any
jurisdiction having been obtained and all such Authorisations
remaining in full force and effect and there being no written
notice of any intention to revoke, suspend, restrict, impede,
modify or not to renew such Authorisations, in each such case to an
extent or in a manner which is material in the context of the Wider
Networkers Group or the Wider Matchtech Group, as the case may be,
in each case, taken as a whole;
Certain matters arising as a result of any arrangement,
agreement, etc.
(D) except as Fairly Disclosed, there being no provision of any
agreement, arrangement, licence, permit or other instrument to
which any member of the Wider Networkers Group is a party, or by or
to which any such member or any of its assets is or are or may be
bound, entitled or subject or any event or circumstance, which, in
each case as a consequence of the Acquisition, or the acquisition
or proposed acquisition of any Networkers Shares, or because of a
change in the voting control of Networkers, would or would
reasonably be expected to result in (in any case to an extent that
is or would be material in the context of the Wider Networkers
Group taken as a whole):
(i) any monies borrowed by, or any other indebtedness (actual or
contingent) of, or any grant available to, any member of the Wider
Networkers Group being or becoming repayable or being capable of
being declared repayable, immediately or prior to its or their
stated maturity date or repayment date, or the ability of any such
member to borrow monies or incur any indebtedness being withdrawn
or being capable of becoming withdrawn;
(ii) any such agreement, arrangement, licence, permit or other
instrument being terminated or the rights, liabilities, obligations
or interest of any member of the Wider Networkers Group thereunder,
being terminated or adversely modified or affected or any onerous
obligation or liability arising or any adverse action being taken
or arising thereunder;
(iii) any member of the Wider Networkers Group ceasing to be
able to carry on its business under any name under which it
currently does so;
(iv) any assets or interests of or used by any member of the
Wider Networkers Group being or being required to be disposed of or
charged or ceasing to be available to any such member or any right
arising under which any such asset or interest would be required to
be disposed of or charged or cease to be available to such member,
in each case otherwise than in the ordinary course of business;
(v) the creation, save in the ordinary course of business, or
enforcement of any mortgage, charge or other security interest over
the whole or any part of the business, property or assets of any
member of the Wider Networkers Group or any such security (whenever
created, arising or having arisen) becoming enforceable;
(vi) except as agreed by Networkers and Matchtech any liability
of any member of the Wider Networkers Group to make any severance,
termination, bonus or other payment to any of its directors or
other officers;
(vii) any requirement on any member of the Wider Networkers
Group to acquire, subscribe, pay up or repay any shares or other
securities;
(viii) the rights, liabilities, obligations or interests of any
member of the Wider Networkers Group in, or the business of any
such member under any such agreement, arrangement, licence, permit
or other instrument or the interests or business of any such member
in or with, any person, firm, company or body (or any arrangement
or arrangements relating to any such interest or business) being or
becoming capable of being terminated, or adversely modified or
affected or any onerous obligation or liability arising or any
adverse action being taken thereunder; or
(ix) the financial or trading position or prospects of any
member of the Wider Networkers Group being prejudiced or adversely
affected;
and no event having occurred which, under any provision of any
agreement, arrangement, licence, permit or other instrument to
which any member of the Wider Networkers Group is a party or under
which any of its assets are or may be bound or subject, would
result in any of the events or circumstances as are referred to in
sub-paragraphs (i) to (ix) of this Condition;
Certain events occurring since 31 December 2013
(E) since 31 December 2013, except as Fairly Disclosed, no
member of the Wider Networkers Group having:
(i) save, where relevant, as between Networkers and any of its
wholly-owned subsidiaries or between the wholly-owned subsidiaries
of Networkers or upon the exercise of rights to subscribe for
Networkers Shares pursuant to the exercise of options granted under
any of the Networkers Share Schemes in the ordinary course of
business and except for the issue or transfer out of treasury to
the extent agreed between Matchtech and Networkers, issued or
agreed to issue or authorised or announced its intention to
authorise or propose the issue of additional shares (or other
securities) of any class, or securities or securities convertible
into or exchangeable for, or rights, warrants or options to
subscribe for or acquire, any such shares, securities or
convertible securities or transferred or sold, or agreed to
transfer or sell or authorised the transfer or sale of any shares
out of treasury or purchased, redeemed or reduced or repaid or
announced any proposal to purchase, redeem or repay any of its own
shares or other securities or reduced or made any other change to
any part of its share capital;
(ii) other than dividends (or other distributions whether
payable in cash or otherwise) lawfully paid or made by any
wholly-owned subsidiary of Networkers to Networkers or any of its
wholly-owned subsidiaries, recommended, declared, paid or made or
proposed to recommend, declare, pay or make any bonus, dividend or
other distribution whether payable in cash or otherwise;
(iii) save for transactions between Networkers and any of its
wholly-owned subsidiaries or between the wholly-owned subsidiaries
of Networkers or pursuant to the Acquisition or otherwise in the
ordinary course, disposed of or transferred, mortgaged or created
any security interest over any material assets or any right, title
or interest in any material asset (including shares or loan capital
(or the equivalent thereof) in any undertaking or undertakings and
further including trade investments) or implemented, effected,
authorised or announced any intention to implement, effect or
authorise any reconstruction, amalgamation, scheme, commitment,
acquisition, disposal, transfer, mortgage, charge or security
interest (which, in the case of any transfer, mortgage, charge or
security interest, is other than in the ordinary course of
business) and in any case to an extent that is or would be material
in the context of the Wider Networkers Group taken as a whole;
(iv) save for transactions between Networkers and any of its
wholly-owned subsidiaries or between the wholly-owned subsidiaries
of Networkers, made or authorised or announced an intention to
propose any change in its loan capital or issued or authorised the
issue of any debentures;
(v) entered into, implemented or authorised the entry into of,
any joint venture, asset or profit sharing arrangement, partnership
or merger of business or corporate entities which in any case is
material in the context of the Wider Networkers Group taken as a
whole;
(vi) save for transactions between Networkers and any of its
wholly-owned subsidiaries or between the wholly-owned subsidiaries
of Networkers or otherwise in the ordinary course, issued or agreed
to issue or authorised or announced an intention to authorise the
issue of, or made a material change in or to the terms of any
debentures or (save for trade credit incurred in the ordinary
course of business), incurred or increased, or agreed to incur or
increase, any indebtedness or become, or agreed to become, subject
to any liability (actual or contingent) to an extent which is
material in the context of the Wider Networkers Group taken as a
whole;
(vii) entered into or varied, or made any offer to enter into or
vary, the terms of any contract, agreement or arrangement with any
director or senior executive of any member of the Wider Networkers
Group which in any case is material in the context of the Wider
Networkers Group taken as a whole;
(viii) entered into or varied or announced its intention to
enter into or vary any material agreement, contract, transaction,
arrangement or commitment (whether in respect of capital
expenditure or otherwise) other than in the ordinary course of
business which is of a long-term, onerous or unusual nature or
magnitude or which is or involves or could reasonably be expected
to involve an obligation of a nature or magnitude which is or could
be reasonably likely to be materially restrictive or onerous on the
business of any member of the Wider Networkers Group or the Wider
Matchtech Group which taken together with any other such material
agreement, contract, transaction, arrangement or commitment is
reasonably likely to be material in the context of the Wider
Networkers Group taken as a whole;
(ix) other than in respect of a member which is dormant and was
solvent at the relevant time, taken or proposed any step or
corporate action, or had any legal proceedings instituted or
threatened in writing against it, in relation to the suspension of
payments, a moratorium of any indebtedness, its winding-up
(voluntary or otherwise), dissolution or reorganisation or for the
appointment of a receiver, administrative receiver, administrator,
manager, trustee or similar officer of all or any material part of
its assets or revenues or any analogous or equivalent steps or
proceedings in any jurisdiction or appointed any analogous person
in any jurisdiction or had any such person appointed and in any
case to an extent that is or would be material in the context of
the Wider Networkers Group taken as a whole;
(x) been unable, or admitted in writing that it is unable, to
pay its debts or commenced negotiations with one or more of its
creditors with a view to rescheduling or restructuring any of its
indebtedness, or having stopped or suspended (or threatened to stop
or suspend) payment of its debts generally or ceased or threatened
to cease carrying on all or a substantial part of its business;
(xi) waived, compromised or settled any claim which is material
in the context of the Wider Networkers Group taken as a whole
otherwise than in the ordinary course of business;
(xii) terminated or varied the terms of any agreement or
arrangement between any member of the Wider Networkers Group and
any other person in a manner which would or might reasonably be
expected to have a material adverse effect on the financial
position of the Wider Networkers Group taken as a whole;
(xiii) made or agreed or consented to any change in any material respect to:
(a) the terms of the trust deeds constituting the pension
scheme(s) established by any member of the Wider Networkers Group
for its directors, employees or their dependants;
(b) the contributions payable to any such scheme(s) or to the
benefits which accrue or to the pensions which are payable
thereunder;
(c) the basis on which qualification for, or accrual or
entitlement to, such benefits or pensions are calculated or
determined;
(d) the basis upon which the liabilities (including pensions) of
such pension schemes are funded or made, or agreed or consented
to,
in a manner which, in any such case, is material in the context
of the Wider Networkers Group taken as a whole;
(xiv) save as agreed in writing by Matchtech, proposed, agreed
to provide or modified the terms of any share option scheme,
pension scheme obligations, incentive scheme or other benefit
relating to the employment or termination of employment of any
person employed by the Wider Networkers Group, which are material
in the context of the Wider Networkers Group taken as a whole;
(xv) made any alteration to the articles of association or other
incorporation documents of Networkers or any material alteration to
the memorandum or articles of association of any member of the
Networkers Group (in each case, other than an alteration in
connection with the Scheme) which in any such case is material in
the context of the Acquisition as a whole; or
(xvi) taken (or agreed or proposed to take) any action which
requires, or would require, the consent of the Panel or the
approval of Networkers Shareholders in general meeting in
accordance with, or as contemplated by, Rule 21.1 of the Code;
No adverse change, litigation, regulatory enquiry or similar
(F) since 31 December 2013, except as Fairly Disclosed, there having been:
(i) no material adverse change in the business, assets,
liabilities, financial or trading position or prospects of any
member of the Wider Networkers Group which, in any such case, is
material in the context of the Wider Networkers Group taken as a
whole;
(ii) no litigation, arbitration proceedings, prosecution or
other legal proceedings having been initiated, announced or
threatened in writing by or against any member of the Wider
Networkers Group and no enquiry, or investigation by, or complaint
or reference to, any Third Party against or in respect of any
member of the Wider Networkers Group (or any person in respect of
which any such member has responsibility or liability) having been
threatened in writing, announced, instituted by or against or
remaining outstanding against or in respect of any member of the
Wider Networkers Group which, in any such case, has had, or would
reasonably be expected to have, a material adverse effect on the
Wider Networkers Group taken as a whole;
(iii) no contingent or other material liability in respect of
any member of the Wider Networkers Group having arisen or become
apparent to Matchtech or increased which has had, or would
reasonably be likely to have, a material adverse effect on the
business, assets, financial or trading position or profits or
prospects of any member of the Wider Networkers Group to an extent
which is material in the context of the Wider Networkers Group
taken as a whole; and
(iv) no amendment or termination of any material joint venture
or material partnership to which any member of the Wider Networkers
Group is a party having been agreed or permitted; and
(v) no action having been taken and no omissions having been
made which are reasonably likely to lead to or result in the
withdrawal, cancellation, termination, modification or variation of
any Authorisation held by or on behalf of any member of the Wider
Networkers Group which is necessary for the proper carrying on of
its business and the withdrawal, cancellation, termination or
modification of which has had, or would reasonably be expected to
have, a material adverse effect on the Wider Networkers Group taken
as a whole;
No discovery of certain matters regarding information and
liabilities
(G) except as Fairly Disclosed, Matchtech not having discovered:
(i) that any financial, business or other information concerning
the Wider Networkers Group as contained in the information publicly
disclosed prior to the date of the Announcement at any time by or
on behalf of any member of the Wider Networkers Group or disclosed
at any time to any member of the Wider Matchtech Group by or on
behalf of any member of the Wider Networkers Group in the context
of the Acquisition is materially misleading, contains a
misrepresentation of any material fact or omits to state a fact
necessary to make that information not misleading in any material
respect, in each case to an extent which is, in any case itself or
together with other factors, material in the context of the Wider
Networkers Group taken as a whole;
(ii) that any member of the Wider Networkers Group or any
partnership, company or other entity in which any member of the
Wider Networkers Group has a significant economic interest and
which is not a subsidiary undertaking of Networkers is otherwise
than in the ordinary course of business subject to any liability
(contingent or otherwise) which, in any such case, is material in
the context of the Wider Networkers Group taken as a whole;
Anti-corruption, sanctions and criminal property
(H) except as Fairly Disclosed, Matchtech not having discovered:
(i) any past or present member, director, officer or employee of
the Wider Networkers Group, or any other person for whom any member
of the Wider Networkers Group is liable or responsible, has not
complied with the OECD Convention on Combating Bribery of Foreign
Public Officials in International Business Transactions and any
laws implementing the same, the U.K. Bribery Act 2010 and/or the
U.S. Foreign Corrupt Practices Act of 1977;
(ii) any past or present member of the Wider Networkers Group
has engaged in any business with or made any investments in, or
made any payments to, (a) any government, entity or individual with
which U.S. or E.U. persons are prohibited from engaging in
activities or doing business by U.S. or E.U. laws or regulations,
including the economic sanctions administered by the United States
Office of Foreign Assets Control, or (b) any government, entity or
individual targeted by any of the economic sanctions of the United
Nations or the European Union or any of their respective member
states; and
(iii) any asset of any member of the Wider Networkers Group
constitutes criminal property as defined by Section 340(3) of the
Proceeds of Crime Act 2002 in circumstances that are material.
PART 2: Certain further terms of the Acquisition
1. Subject to the requirements of the Panel, Matchtech reserves
the right in its sole discretion to waive (if capable of waiver) in
whole or in part all or any of the above Conditions, except for
Condition (A) (Scheme approval), which cannot be waived.
2. Conditions (B) (General anti-trust and regulatory) to (H)
(Anti-corruption, sanctions and criminal property) (inclusive) must
be fulfilled, be determined by Matchtech to be or remain satisfied
or waived by, no later than the commencement of the Scheme Court
Hearing, failing which the Acquisition will lapse. Matchtech shall
be under no obligation to waive or treat as satisfied any of
Conditions (B) (General anti-trust and regulatory) to (H)
(Anti-corruption, sanctions and criminal property) (inclusive) by a
date earlier than the latest date specified above for the
fulfilment, satisfaction or waiver thereof, notwithstanding that
any such Condition or the other Conditions of the Scheme and the
Acquisition may at such earlier date have been waived, satisfied or
fulfilled and that there are at such earlier date no circumstances
indicating that any of such Conditions may not be capable of
fulfilment.
3. If Matchtech is required by the Panel to make an offer for
any Networkers Shares under the provisions of Rule 9 of the Code,
Matchtech may make such alterations to the Conditions and further
terms of the Acquisition as are necessary to comply with the
provisions of that Rule.
4. Matchtech reserves the right to elect with the consent of the
Takeover Panel (where necessary), to elect to implement the
Acquisition by way of an Offer. In such event, the Acquisition will
be implemented on substantially the same terms, subject to
appropriate amendments, as those which would apply to the
Acquisition. The acceptance condition would be set at 90 per cent.
of the shares to which such Offer relates (or such lesser
percentage (being more than 50 per cent.) as Matchtech may decide
with the consent of the Takeover Panel). Further, if sufficient
acceptances of the Offer are received and/or sufficient Networkers
Shares are otherwise acquired, it is the intention of Matchtech to
apply the provisions of the Companies Act to compulsorily acquire
any outstanding Networkers Shares to which such Offer relates.
5. The availability of the Acquisition to Networkers
Shareholders who are not resident in the United Kingdom may be
affected by the laws of relevant jurisdictions. Therefore any
persons who are subject to the laws of any jurisdiction other than
the United Kingdom and any Networkers Shareholders who are not
resident in the United Kingdom will need to inform themselves
about, and observe, any applicable requirements.
6. Unless otherwise determined by Matchtech or required by the
Code and permitted by applicable law and regulation, the
Acquisition is not being made, and will not be made, directly or
indirectly, in or into any Restricted Jurisdiction or by the use of
the mails of, or by any other means or instrumentality (including,
without limitation, electronic mail, fax transmission, telex,
telephone, internet or other forms of electronic communication) of
interstate or foreign commerce of, or any facility of a national
state or other securities exchange of any other Restricted
Jurisdiction and will not be capable of acceptance by any such use,
means, instrumentality or facility or from any Restricted
Jurisdiction.
7. Networkers Shares which will be acquired under the
Acquisition will be acquired with full title guarantee, fully paid
and free from all liens, equities, charges, encumbrances, options,
rights of pre-emption and any other third party rights and
interests of any nature and together with all rights now or
hereafter attaching or accruing to them, including voting rights
and the right to receive and retain in full all dividends and other
distributions (if any), and any other return of capital (whether by
way of reduction of share capital or share premium account or
otherwise), declared, made or paid on or after the date of this
Announcement.
8. Fractions of New Matchtech Shares will not be allotted or
issued to Scheme Shareholders. Fractional entitlements will be
aggregated and sold in the market and the net proceeds of sale
distributed to the Scheme Shareholders entitled thereto.
9. The Acquisition shall lapse (unless otherwise agreed with the Takeover Panel) if:
(a) in so far as the Acquisition or any matter arising from the
Scheme or Acquisition constitutes a concentration with a Community
dimension within the scope of the Regulation, the European
Commission either initiates proceedings under Article 6(1)(c) of
the Regulation or makes a referral to a competent authority of the
United Kingdom under Article 9(1) of the Regulation and there is
then a CMA Phase 2 Reference; or
(b) in so far as the Acquisition or any matter arising from the
Scheme or Acquisition does not constitute a concentration with a
Community dimension within the scope of the Regulation, the Scheme
or Acquisition or any matter arising from or relating to the
Acquisition becomes subject to a CMA Phase 2 Reference,
in each case, before the date of the Court Meeting. In such
event, neither Networkers, Matchtech nor any Networkers Shareholder
will be bound by any term of the Scheme.
APPENDIX II
SOURCES OF INFORMATION AND BASES OF CALCULATION
In this Announcement:
(i) Unless otherwise stated, financial information concerning
Networkers has been extracted (without material adjustment) from
Networkers' 2013 Annual Report.
(ii) Unless otherwise stated, financial information concerning
Matchtech has been extracted (without material adjustment) from
Matchtech's 2014 Annual Report.
(iii) As at the close of business on 27 January 2015, being the
latest practicable date before the date of this Announcement,
Networkers had 84,056,832 Networkers Shares in issue and Matchtech
had 24,966,817 Matchtech Shares in issue.
(iv) The value of the Acquisition is based upon the cash
consideration due under the terms of the Acquisition and on the
basis of the issued and to be issued share capital of Networkers
referred to in paragraph (vi) below and references to the fully
diluted share capital of Networkers should be construed
accordingly.
(v) The maximum number of New Matchtech Shares to be issued
pursuant to the Acquisition is 5,439,190 New Matchtech Shares. The
calculation of the maximum number of New Matchtech Shares to be
issued in respect of the Acquisition is based upon the average of
the Closing Price per Matchtech Share for the ten (10) Business
Days ending on 27 January 2015, being the last practicable date
before the date of this Announcement.
(vi) The issued and to be issued share capital of Networkers is calculated on the basis of:
-- the number of issued Networkers Shares on 27 January 2015,
being the last practicable date before the date of this
Announcement, being 84,056,832 Networkers Shares (excluding shares
in Treasury); and
-- any further Networkers Shares which are intended to be issued
(or transferred from Treasury) on or after the date of this
Announcement on the exercise of options under the Networkers Share
Schemes, which options have been granted on or before the date of
this Announcement, amounting in aggregate to 1,930,097 Networkers
Shares (excludes further options in respect of 2,972,913 Networkers
Shares which are not anticipated to be exercised under the terms of
the Acquisition).
(vii) Unless otherwise stated, all prices for Networkers Shares
and Matchtech Shares are the Closing Price for the relevant
dates.
(viii) The premium calculations per Networkers Share have been calculated with reference to:
-- the Closing Price of 55.0 pence per Networkers Share on 27
January 2015, being the last practicable date before the date of
this Announcement;
-- the average Closing Price of 52.4 pence per Networkers Share
for the one (1) month period immediately preceding 27 January 2015,
being the last practicable date before the date of this
Announcement; and
-- the average Closing Price of 55.9 pence per Networkers Share
for the twelve (12) month period immediately preceding 27 January
2015, being the last practicable date before the date of this
Announcement.
(ix) The statements that the Acquisition is expected to be
earnings enhancing for Matchtech relates to future actions and
circumstances, which, by their nature, involve risks, uncertainties
and other factors. These statements do not constitute a profit
forecast and should not be interpreted to mean that earnings for
that year or any subsequent financial period would necessarily
match or be greater than those for any preceding financial period.
Earnings in this context represent net after tax earnings before
non-recurring operating items and non-operating items.
(x) "Adjusted profit before tax" means profit before tax and
amortisation of acquired intangibles.
(xi) "Adjusted EPS" means EPS excluding amortisation of acquired intangibles.
APPENDIX III
IRREVOCABLE UNDERTAKINGS
Networkers Directors' Irrevocable Undertakings
Matchtech has received irrevocable commitments from each of the
members of the Networkers Board who control Networkers Shares, as
listed below, representing in aggregate approximately 49.5 per
cent. of the existing issued ordinary share capital of Networkers.
These commitments require the relevant member of the Networkers
Board to vote or procure that the registered holder votes in favour
of the Scheme at the Court Meeting and the Resolutions at the
General Meeting (or, in the event the Acquisition is implemented by
means of an Offer, to accept, or procure acceptance of, the
Offer).
Name of Networkers Number of Networkers % of Networkers
Director Shares issued share capital
Nigel Wray 14,129,264 16.8%
Spencer Manuel 13,101,535 15.6%
Jon Plassard 13,099,927 15.6%
Neville Roger Goodman 1,266,977 1.5%
TOTAL 41,597,703 49.5%
These irrevocable commitments will continue to be binding in the
event that a higher competing offer is made for Networkers.
These irrevocable commitments will cease to be binding on the
earliest to occur of the following events:
-- if the Scheme Document or Offer Document, as the case may be,
is not posted within 28 days after the release of this Announcement
(or such later date as Matchtech and Networkers agree in writing
with the consent of the Panel);
-- if the Acquisition is implemented by way of an Offer and such
Offer lapses or is withdrawn without becoming or being declared
unconditional in all respects;
-- if Matchtech announces, with the consent of any relevant
authority (if required) and before the Scheme Document (or, if
applicable, the Offer Document) is posted, that it does not intend
to proceed with the Acquisition; or
-- if the Scheme lapses or is withdrawn or otherwise becomes
incapable of becoming Effective or has not become Effective on or
before 30 June 2015 (or such later date as Matchtech and Networkers
agree in writing and that the Court with the consent of the Panel,
if required, approves).
Shareholders' Irrevocable Undertakings
Matchtech has received irrevocable commitments from the
following Networkers Shareholders in respect of their own
beneficial holdings of Networkers Shares, representing in aggregate
approximately 23.4 per cent. of the existing issued ordinary share
capital of Networkers. These commitments are subject to certain
limitations and exceptions as described below.
These commitments require each such Networkers Shareholder to
vote or procure that the registered holder votes in favour of the
Scheme at the Court Meeting and the Resolutions at the General
Meeting (or, in the event the Acquisition is implemented by means
of an Offer, to accept, or procure acceptance of, the Offer).
Name of Networkers Number of Networkers % of Networkers
Shareholder Shares issued share capital
Jon Moulton 8,279,128 9.8%
Dowgate Capital 6,234,200 7.4%
Hargreave Hale 5,175,000 6.2%
TOTAL 19,688,328 23.4%
Jon Moulton
The irrevocable commitments given by Jon Moulton will continue
to be binding in the event that a higher competing offer is made
for Networkers save as set out below. The irrevocable commitments
given by Jon Moulton will cease to be binding on the earliest to
occur of the following events:
-- if the Acquisition is implemented by way of an Offer and the
Offer lapses or is withdrawn without becoming or being declared
unconditional in all respects;
-- if Matchtech announces, with the consent of any relevant
authority (if required) and before the Scheme Document or Offer
Document is posted, that it does not intend to proceed with the
Acquisition and no new, revised or replacement Scheme or Offer is
announced by Matchtech in accordance with the Code at the same time
or within 28 days thereafter;
-- if the Scheme does not become effective by 30 June 2015 (or
such later date as Jon Moulton agrees in writing); or
-- if:
o a competing offer for the entire issued and to be issued
ordinary share capital of Networkers has been announced in
accordance with the requirements of the Code that values each
ordinary share in the capital of Networkers at a price which equals
or exceeds 110% of the value of the consideration per Networkers
Share available under the terms of the Acquisition, having regard
to the total amount of the cash and non-cash elements of the
Acquisition and the competing offer;
o Matchtech does not, within ten days of announcement of the
competing offer, announce a revised offer which Jon Moulton
determines values each Networkers Share at a price equal to or
greater than the value of the consideration per Networkers Share
under the relevant competing offer, having regard to the total
amount of the cash and non-cash elements of the revised offer and
the competing offer; and
o Jon Moulton notifies Matchtech within ten days of the expiry
of such ten day period that his obligations under the irrevocable
commitments have ceased to have effect.
Dowgate Capital
The irrevocable commitments given by Dowgate Capital will
continue to be binding in the event that a higher competing offer
is made for Networkers. The irrevocable commitments given by
Dowgate Capital will cease to be binding on the earliest to occur
of the following events:
-- if the Acquisition is implemented by way of an Offer and the
Offer lapses or is withdrawn without becoming or being declared
unconditional in all respects;
-- if Matchtech announces, with the consent of any relevant
authority (if required) and before the Scheme Document or Offer
Document is posted, that it does not intend to proceed with the
Acquisition and no new, revised or replacement Scheme or Offer is
announced by Matchtech in accordance with the Code at the same time
or within 28 days thereafter; or
-- if the Scheme does not become effective by 30 June 2015 (or
such later date as Dowgate Capital agrees in writing).
Hargreave Hale
The irrevocable commitments given by Hargreave Hale will
continue to be binding in the event that a higher competing offer
is made for Networkers save as set out below. The irrevocable
commitments given by Hargreave Hale will cease to be binding on the
earliest to occur of the following events:
-- if the Acquisition is implemented by way of an Offer and the
Offer lapses or is withdrawn without becoming or being declared
unconditional in all respects;
-- if Matchtech announces, with the consent of any relevant
authority (if required) and before the Scheme Document or Offer
Document is posted, that it does not intend to proceed with the
Acquisition and no new, revised or replacement Scheme or Offer is
announced by Matchtech in accordance with the Code at the same time
or within 28 days thereafter;
-- if the Scheme does not become effective by 30 June 2015 (or
such later date as Hargreave Hale agrees in writing); or
-- if
o a competing offer for the entire issued and to be issued
ordinary share capital of Networkers has been announced in
accordance with the requirements of the Code that values each
ordinary share in the capital of Networkers at a price which equals
or exceeds 110% of the value of the consideration per Networkers
Share available under the terms of the Acquisition, having regard
to the total amount of the cash and non-cash elements of the
Acquisition and the competing offer;
o Matchtech does not, within ten days of announcement of the
competing offer, announce a revised offer which Hargreave Hale
determines values each Networkers Share at a price equal to or
greater than the value of the consideration per Networkers Share
under the relevant competing offer, having regard to the total
amount of the cash and non-cash elements of the revised offer and
the competing offer; and
o Hargreave Hale notifies Matchtech within ten days of the
expiry of such ten day period that its obligations under the
irrevocable commitments have ceased to have effect.
APPENDIX IV
DEFINITIONS
The following definitions apply throughout this Announcement,
unless the context otherwise requires:
Acquisition the recommended acquisition by Matchtech
for the entire issued and to be issued
share capital of Networkers, to be implemented
by the Scheme as described in this Announcement
(or Offer under certain circumstances
as described in this Announcement) on
the terms and subject to the conditions
to be set out in the Scheme Document
including, where the context requires,
any subsequent revision, variation,
extension or renewal of such offer and
includes any election available thereunder
AIM the AIM Market of the London Stock Exchange
AIM Rules the AIM Rules for Companies as published
by the London Stock Exchange (as amended
from time to time)
Announcement this announcement, made in accordance
with Rule 2.7 of the Code, dated 27
January 2015, including its summary
and Appendices
Authorisations for the purposes of the Conditions,
means authorisations, orders, grants,
recognitions, determinations, confirmations,
consents, licences, clearances, permissions,
exemptions and approvals
Business Day a day (other than a Saturday, Sunday
or a public holiday) on which banks
in the City of London are open for business
generally
Capital Reduction the proposed reduction of the current
issued and to be issued ordinary share
capital of Networkers pursuant to the
Scheme
Code or Takeover Code the City Code on Takeovers and Mergers
Closing Price the middle market price for a Networkers
Share or Matchtech Shares, as the case
may be, at the close of business on
the day to which the price relates,
derived from the AIM appendix to the
Daily Official List for that day
CMA Phase 2 Reference a reference pursuant to sections 22,
33, 45 or 62 of the Enterprise Act 2002
of the Acquisition to the chair of the
Competition and Markets Authority for
the constitution of a group under Schedule
4 to the Enterprise and Regulatory Reform
Act 2013 (as amended)
Combined Group following completion of the Acquisition,
the combined Matchtech Group and Networkers
Group
Community the European Community
Companies Act the Companies Act 2006, as amended from
time to time
Competition and Markets the independent public body which conducts
Authority second phase, in-depth inquiries into
mergers, markets and the regulation
of the major regulated industries in
the United Kingdom (or any successor
body or bodies carrying out the same
functions in the United Kingdom from
time to time)
Conditions the conditions of the Acquisition, as
set out in Appendix I to this Announcement
and to be set out in the Scheme Document
Confidentiality Agreement has the meaning given to that term in
paragraph 15 of this Announcement
Court the High Court of Justice in England
and Wales
Court Hearings the Scheme Court Hearing and the Reduction
Court Hearing
Court Meeting the meeting or meetings of the Scheme
Shareholders (or the relevant class
or classes thereof) as may be convened
pursuant to an order of the Court under
section 896 of the Companies Act for
the purposes of considering and, if
thought fit, approving the Scheme (with
or without amendment) including any
adjournment thereof, notice of which
is to be contained in the Scheme Document
Court Orders the Scheme Court Order and the Reduction
Court Order
CREST the relevant system (as defined in the
CREST Regulations) for paperless settlement
of share transfers and the holding of
shares in uncertificated form in respect
of which Euroclear UK & Ireland Limited
is the Operator (as defined in the CREST
Regulations)
CREST Regulations the Uncertificated Securities Regulations
2001 (SI 2001/3755)
Daily Official List the Daily Official List published by
the London Stock Exchange
EBITA earnings before interest, tax and amortisation
Effective in the context of the Acquisition: (i)
if the Acquisition is implemented by
way of a Scheme, the Scheme having become
fully effective in accordance with its
terms, upon the delivery of the Court
Order and Statement of Capital relating
to the Capital Reduction to the Registrar
of Companies and, if the Court so orders,
registration by the Registrar of Companies;
or (ii) if the Acquisition is implemented
by way of an Offer, the Offer having
been declared or become unconditional
in all respects in accordance with the
requirements of the Code
Effective Date the date upon which:
(a) the Scheme becomes Effective; or
(b) if Matchtech elects and the Takeover
Panel consents to implement the Acquisition
by way of an Offer, the Offer becomes
Effective
EPS earnings per share
Fairly Disclosed the information which has been fairly
disclosed: (i) in any document delivered
prior to the date of this Announcement
by or on behalf of Networkers to Matchtech
or Matchtech's financial, accounting,
tax or legal advisers (specifically
as Matchtech's advisers in relation
to the Acquisition), including not limited
to minutes so delivered of any disclosure
meetings and any information disclosed
in electronic form by way of a data
room or otherwise; (ii) in Networkers'
2013 Annual Report, Networkers' interim
results for the six month period to
30 June 2014 or Networkers' trading
update for the year ended 31 December
2014 as provided to Matchtech prior
to the date of this Announcement; (iii)
in any public announcement by Networkers
published through a Regulatory Information
Service prior to the date of this Announcement;
or (iv) in this Announcement
FCA or Financial Conduct the U.K. Financial Conduct Authority
Authority or its successor from time to time
Finance Documents (a) the HSBC Facility Agreement;
(b) the floating charge between HSBC
and Matchtech Group (UK) Limited;
(c) the floating charge between HSBC
and Connectus Technology Ltd;
(d) the floating charge between HSBC
and Barclay Meade Ltd;
(e) the floating charge between HSBC
and Alderwood Education Ltd;
(f) the deed of priority between (1)
HSBC, (2) HSBC Invoice Finance (UK)
Limited (3) Matchtech Group UK Limited,
(4) Connectus Technology Ltd, (5) Barclay
Meade Ltd and (6) Alderwood Education
Ltd; and
(g) the fee letter from HSBC to Matchtech
Forms of Proxy the forms of proxy in connection with
each of the Court Meeting and the General
Meeting, which shall accompany the Scheme
Document
General Meeting the general meeting (or any adjournment,
postponement or reconvention thereof)
of Networkers to be convened in connection
with the Scheme, notice of which is
to be contained in the Scheme Document
HSBC has the meaning given to that term in
paragraph 11 of this Announcement
HSBC Facility Agreement has the meaning given to that term in
paragraph 11 of this Announcement
Irrevocable Undertakings the irrevocable undertakings to vote
(or procure votes) in favour of the
Acquisition from Networkers Shareholders
received by Matchtech, details of which
are set out in Appendix III to this
Announcement
ISIN International Securities Identification
Number
Liberum Liberum Capital Limited
Lock-Up Agreements has the meaning given to that term in
paragraph 15 of this Announcement
London Stock Exchange London Stock Exchange plc
Long Stop Date 30 June 2015, or such later date, if
any, as Matchtech and Networkers may,
subject to the Takeover Code and the
consent of the Panel, agree and, if
required, the Court may approve
Matchtech Matchtech Group plc, a public limited
company incorporated in England and
Wales with registered number 4426322
and with its registered address at 1450
Parkway, Solent Business Park, Whiteley,
Fareham, Hampshire PO15 7AF
Matchtech Board the board of directors of Matchtech
Matchtech Directors the directors of Matchtech and Matchtech
Director means any one of them
Matchtech Group Matchtech and its subsidiary undertakings
and associated undertakings
Matchtech Shareholders holders of Matchtech Shares
Matchtech Shares the ordinary shares of GBP0.01 each
in the capital of Matchtech
Matchtech's 2014 Annual the Annual Report and Accounts of Matchtech
Report for the financial year ended 31 July
2014
Meetings the Court Meeting and the General Meeting
Networkers Networkers International plc, a public
limited company incorporated in England
and Wales with registered number 03950639
and with its registered office at Hanover
Place, 8 Ravensbourne Road, Bromley
BR1 1HP
Networkers Board the board of directors of Networkers
Networkers Directors the directors of Networkers and Networkers
Director means any one of them
Networkers Group Networkers and its subsidiary undertakings
and associated undertakings and, where
the context permits, each of them
Networkers Share Schemes the Networkers International plc Share
Option Scheme, the Networkers International
plc EMI Scheme, the Networkers International
plc 2007 Approved Share Option Scheme
and the Networkers International plc
2014 Unapproved Share Option Plan
Networkers Shareholders holders of Networkers Shares
Networkers Shares the ordinary shares of GBP0.01 each
in the capital of Networkers
Networkers' 2013 Annual the Annual Report and Accounts of Networkers
Report for the year ended 31 December 2013
New Matchtech Shares the new Matchtech Shares to be issued
to Scheme Shareholders in connection
with the Acquisition
New Networkers Shares the new Networkers Shares to be issued
credited as fully paid pursuant to and
in accordance with the Scheme
NFI Net Fee Income
Numis Numis Securities Limited
Offer or Takeover Offer should the Acquisition be implemented
by way of a takeover offer as defined
in Chapter 3 of Part 28 of the Companies
Act, the recommended offer to be made
by or on behalf of Matchtech to acquire
the entire issued and to be issued share
capital of Networkers and, where the
context admits, any subsequent revision,
variation, extension or renewal of such
offer
Offer Document in the event Matchtech elects to implement
the Acquisition by means of an Offer,
the document containing the Offer to
be sent to Networkers Shareholders
Opening Position Disclosure has the meaning given to that term in
the Code
Reduction Court Hearing the hearing (or any adjournment thereof)
at which the Reduction Court Order will
be sought
Reduction Court Order the order of the Court under section
648 of the Companies Act confirming
the Capital Reduction
Registrar of Companies the Registrar of Companies in England
or Companies House and Wales
Regulation Council Regulation (EC) No139/2004
Regulatory Information any information service authorised from
Service time to time by the FCA for the purposes
of disseminating regulatory announcements
Resolutions the resolutions to be proposed by Networkers
at the General Meeting in connection
with, amongst other things, the approval
of the Scheme and confirmation of the
Capital Reduction, the amendment of
Networkers' articles of association
and such other matters as may be necessary
to implement the Scheme and the delisting
of the Networkers Shares
Restricted Jurisdiction any jurisdiction where local laws or
regulations may result in a significant
risk of civil, regulatory or criminal
exposure if information concerning the
Acquisition is sent or made available
in that jurisdiction
Scheme or Scheme of the scheme of arrangement under Part
Arrangement 26 of the Companies Act proposed to
be entered into between Networkers and
the Scheme Shareholders to be described
in the Scheme Document, the principal
terms of which are set out in this Announcement
(with or subject to any modification,
addition or condition which Networkers
and Matchtech may agree and, if required,
the Court may approve or impose)
Scheme Court Hearing the hearing of the Court to sanction
the Scheme under section 899 of the
Companies Act and if such hearing is
adjourned references to commencement
of any such hearing shall mean the commencement
of the final adjournment thereof
Scheme Court Order the order of the Court sanctioning the
Scheme under section 899 of the Companies
Act
Scheme Document the document to be dispatched to Networkers
Shareholders containing the terms and
conditions of the Acquisition and the
particulars required by section 897
of the Companies Act
Scheme Record Time the time and date specified in the Scheme
Document, expected to be 6.00 p.m. on
the Business Day immediately prior to
the date of the Reduction Court Hearing
Scheme Shareholders holders of Scheme Shares
Scheme Shares shall mean:
(i) Networkers Shares in issue at the
date of the Scheme Document;
(ii) any Networkers Shares issued after
the date of the Scheme Document and
prior to the Voting Record Time; and
(iii) any Networkers Shares issued at
or after the Voting Record Time but
at or prior to the Scheme Record Time
in respect of which the original or
any subsequent holder thereof is bound
by the Scheme, or shall by such time
have agreed in writing to be bound by
the Scheme,
in each case, save for any Networkers
Shares legally or beneficially held
by any member of the Matchtech Group
Statement of Capital the statement of capital (approved by
the Court) showing, with respect to
Networkers' share capital as altered
by the Reduction Court Order, the information
required by section 649 of the Companies
Act
subsidiary undertaking, shall have the meanings given by the
associated undertaking Companies Act
and undertaking
Takeover Panel or Panel the UK Panel on Takeovers and Mergers
Third Party a central bank, government or governmental,
quasi-governmental, supranational, statutory,
regulatory, professional, environmental
or investigative body or authority (including
any anti-trust or merger control authority),
court, trade agency, professional association,
institution, works council, employee
representative body or any other body
or person whatsoever in any relevant
jurisdiction
Treasury or Treasury shares held as treasury shares as provided
Shares for in section 724 of the Companies
Act
U.K. , UK or United the United Kingdom of Great Britain
Kingdom and Northern Ireland
U.S., US or United States the United States of America, its possessions
and territories, all areas subject to
its jurisdiction or any subdivision
thereof, any State of the United States
and the District of Columbia
Voting Record Time 6.00 p.m. on the day prior to the day
immediately before the Court Meeting
Wider Matchtech Group Matchtech and its subsidiary undertakings,
associated undertakings and any other
undertaking, body corporate, partnership,
joint venture or person in which Matchtech
and/or such undertakings (aggregating
their interests) have a direct or indirect
interest in 10% or more of the voting
rights or equity share capital (as defined
in the Companies Act) or the equivalent
Wider Networkers Group Networkers and its subsidiary undertakings,
associated undertakings and any other
undertaking, body corporate, partnership,
joint venture or person in which Networkers
and/or such undertakings (aggregating
their interests) have a direct or indirect
interest in 10% or more of the voting
rights or equity share capital (as defined
in the Companies Act) or the equivalent
GBP or pounds sterling pounds sterling, the lawful currency
of the United Kingdom
All times referred to in this Announcement are to London time
unless otherwise stated.
([1]) This statement should not be construed as a profit
forecast or interpreted to mean that the future earnings per share,
profits, margins or cash-flows of the Combined Group will
necessarily be greater than the historic published figures.
([2]) This statement should not be construed as a profit
forecast or interpreted to mean that the future earnings per share,
profits, margins or cash-flows of the Combined Group will
necessarily be greater than the historic published figures.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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