BLTG.L Regulatory News (BLTG)

6 April 2016

BLANCCO TECHNOLOGY GROUP PLC ("Blancco" or the "Company")

TENDER OFFER

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY IN, OR INTO OR FROM AUSTRALIA, CANADA, JAPAN, NEW ZEALAND, RUSSIA OR SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL.

The Company announces the proposed return of a maximum of £50 million to the Company's Eligible Shareholders by means of a tender offer

On 5 February 2016 the Company, formerly known as Regenersis plc, announced that it had entered into a conditional sale and purchase agreement to dispose of its Repair Services Business (the "Repair Services Business") to CTDI Repair Services Limited (the "Purchaser"), a wholly owned subsidiary of Communications Test Design, Inc., ("CTDI") for cash consideration of €103.5 million (the "Disposal") and its intention to return capital to Eligible Shareholders of around £50 million in the second quarter of 2016 by way of tender offer (the "Tender Offer"). The Company's ordinary shareholders approved the Disposal and the Tender Offer at a General Meeting held on 2 March 2016 and the completion of the Disposal was announced on 4 April 2016. At the same General Meeting the Ordinary Shareholders also passed a resolution approving the cancellation of the entire balance standing to the credit of the share premium account of the Company.

Key elements of the Tender Offer are:

· up to £50 million available to be returned to Eligible Shareholders via the purchase of a maximum of 23,255,813 Ordinary Shares, representing a maximum of approximately 29.4 per cent. of the Issued Ordinary Share Capital of the Company at 5 April 2016;

· Ordinary Shares may be tendered within a price range of 215 pence to 250 pence per Ordinary Share (representing a discount of 6.1 per cent. to a premium of 9.2 per cent. to the closing price of 229 pence on 5 April 2016);

· the Tender Offer is structured using a Strike Price mechanism. All successfully tendered Ordinary Shares will be acquired at the Strike Price; and

· the closing time and date is 1.00 p.m. (UK time) on 4 May 2016, with proceeds expected to be despatched to Eligible Shareholders by 16 May 2016.

It is expected that a circular of the Company in relation to the Tender Offer dated 6 April 2016 (the "Circular") will be posted to Eligible Shareholders later today.

Certain of the Directors currently intend to tender some or all of their beneficial holdings of Ordinary Shares, as set out in the Circular.

Structure of the Tender Offer

The Tender Offer will be implemented on the basis of Peel Hunt LLP ("Peel Hunt") acquiring, as principal, the successfully tendered Ordinary Shares at a "Strike Price". In turn, Peel Hunt has the right to require the Company to purchase such Ordinary Shares from it at the same price under the Option Agreement entered into between the Company and Peel Hunt. If Peel Hunt does not exercise its right to require the Company to purchase such Ordinary Shares, the Company has the right to require Peel Hunt to sell such Ordinary Shares to it at the same price. The Company intends to cancel the Ordinary Shares purchased by it under the Option Agreement.

Eligible Shareholders can decide whether they want to tender all, some or none of their Ordinary Shares.

It is proposed that a maximum of 23,255,813 Ordinary Shares be purchased under the Tender Offer, representing approximately 29.4 per cent, of the Company's issued share capital as at 5 April 2016, the latest practicable date for such determination prior to the publication of the Circular, for a maximum aggregate consideration of £50 million.

Tenders may be made in the range of 215 pence to 250 pence per Ordinary Share inclusive (the "Price Range"). 215 pence per Ordinary Share represents a discount of 6.1 per cent, and 250 pence per Ordinary Share represents a premium of 9.2 per cent, to the closing price of 229 pence per Ordinary Share on 5 April 2016. 215 pence per Ordinary Share represents a premium of 10.3 per cent, to the volume weighted average price over the three months to 5 April 2016 and 250 pence per Ordinary Share represents a premium of 28.2 per cent. 215 pence per Ordinary Share represents a premium of 11.4 per cent, to the closing price of 193 pence the day before the announcement of the Disposal on 5 February 2016 and 250 pence per Ordinary Share represents a premium of 29.5 per cent.

Eligible Shareholders can tender their Ordinary Shares in the following ways:

· submit a tender at whatever is determined to be the Strike Price (referred to as a "Strike Price Tender");

· submit a tender at a single price in the Price Range; or

· submit tenders at different prices in the Price Range (including a Strike Price Tender) in respect of different parcels of Ordinary Shares.

Any tender other than a Strike Price Tender must be expressed in whole pence per Ordinary Share and in increments of five pence at one of the share prices indicated on the Tender Form (in the case of certificated Ordinary Shares) or by TTE Instruction (in the case of uncertificated Ordinary Shares) as explained in the Circular.

The Strike Price

A single price per Ordinary Share will be applied to all Ordinary Shares purchased by Peel Hunt pursuant to the Tender Offer, being the Strike Price.

The Strike Price will be the lowest price per Ordinary Share in the Price Range that will allow Peel Hunt to purchase the maximum number of Ordinary Shares for a total cost not exceeding £50 million or, if the aggregate value of all Ordinary Shares validly tendered by Eligible Shareholders is less than £50 million, such lesser number of Ordinary Shares as are validly tendered pursuant to the Tender Offer.

All Eligible Shareholders who tender Ordinary Shares at a price at or below the Strike Price or as Strike Price Tenders will receive the Strike Price for all successful tenders accepted, subject, where applicable, to the scaling-back arrangements described below.

Number of Ordinary Shares to be purchased

Provided the conditions in the Circular are met, if the aggregate value at the Strike Price of all validly tendered Ordinary Shares is £50 million or less, then all Ordinary Shares validly tendered will be purchased at the Strike Price.

If the aggregate value at the Strike Price of all validly tendered Ordinary Shares exceeds £50 million, not all of the Ordinary Shares validly tendered will be accepted and purchased. In these circumstances, the number of Ordinary Shares which will be accepted and purchased will be as follows:

a. all valid tenders of Ordinary Shares at a price at or (if applicable) below the Strike Price or as a Strike Price Tender by an Eligible Shareholder will be scaled down pro-rata to the total number of Ordinary Shares so tendered by that Eligible Shareholder, such that the total cost of Ordinary Shares purchased pursuant to the Tender Offer does not exceed £50 million; and

b. all tenders of Ordinary Shares at a price above the Strike Price will be rejected and will not be purchased by Peel Hunt.

Once lodged (in the case of a Tender Form) or settled (in the case of a TTE Instruction) such Tender shall be irrevocable.

Ordinary Shares will be purchased pursuant to the Tender Offer on 16 May 2016 and as such any shares tendered in the Tender Offer will still receive the dividend announced on 8 March 2016.

Successfully tendered Ordinary Shares will be purchased free of commission and dealing charges.

Any Ordinary Shares repurchased by the Company from Peel Hunt following the purchase of the same by Peel Hunt from Ordinary Shareholders, will be cancelled. Ordinary Shareholders who tender Ordinary Shares pursuant to the Tender Offer will still receive the dividend of 0.66 pence per share declared on 8 March 2016 but will not rank for any other future dividends. Any rights of Ordinary Shareholders who do not tender their Ordinary Shares will be unaffected.

Subject to any applicable rules and regulations, the Company reserves the right at any time prior to the announcement of the results of the Tender Offer, and with the prior consent of Peel Hunt, to extend the period during which the Tender Offer is open, based on market conditions and/or other factors.

Circumstances in which the Tender Offer may not proceed

The Tender Offer is conditional on, among other things, receipt of valid tenders in respect of at least 790,226 Ordinary Shares (representing approximately 1.0 per cent. of the Issued Ordinary Share Capital as at 5 April 2016, being the latest practicable date prior to the publication of the Circular) by 1.00 p.m. (UK time) on the Closing Date and the other Conditions specified in the Circular.

The Tender Offer is also conditional on, inter alia, there not arising any material adverse change or certain other force majeure events prior to the closing of the Tender Offer.

Full details of the Tender Offer, including the terms and Conditions on which it is made, are set out in the Circular.

Timetable

The expected timetable is as follows:

Notes:

(1) Future dates are indicative only and may be subject to change by the Company, in which event details of the new times and dates will be notified via a Regulatory Information Service.

(2) References to times in this timetable are to London time. 

Financial Advice

The Board has received financial advice from Peel Hunt and Panmure Gordon (UK) Limited ("Panmure Gordon") in relation to the Tender Offer. In providing their financial advice Peel Hunt and Panmure Gordon have relied on the Board's commercial assessments.

No recommendation

Although the Board believes that the return of capital by means of a Tender Offer is in the best interests of the Ordinary Shareholders as a whole and has approved the Tender Offer, the Board is not making a recommendation to Eligible Shareholders in relation to participation in the Tender Offer itself. Whether or not Eligible Shareholders decide to tender all or any of their Ordinary Shares will depend, among other things, on their view of the Company's prospects and their own individual circumstances, including their tax position. Eligible Shareholders should make their own decision in respect of participation in the Tender Offer and are recommended to consult their duly authorised independent advisers.

Posting of Circular

The Circular which contains the full terms and Conditions of the Tender Offer, instructions to Eligible Shareholders on how to tender their Ordinary Shares should they choose to do so, together with a Tender Form, is expected to be posted to Eligible Shareholders today.

A copy of the Circular will shortly be available to view on the Company's website at www.blancco.com 

Enquiries:

Cautionary Statement

Peel Hunt and Panmure Gordon, each of which is authorised by the FCA in the United Kingdom, are acting exclusively for the Company and no-one else in connection with the Tender Offer and will not regard any other person (whether or not a recipient of the Circular or this announcement) as a client in relation to the Tender Offer and will not be responsible to anyone other than the Company for providing the protections afforded to their respective clients or for providing advice in relation to the Tender Offer or any other matter referred to in the Circular or this announcement. Peel Hunt's responsibilities as the Company's nominated adviser and joint broker under the AIM Rules and the AIM Rules for Nominated Advisers and Panmure Gordon's responsibilities as the Company's joint broker under the AIM Rules are owed to the London Stock Exchange and the Company and not to any other person. No representation or warranty, express or implied, is made by Peel Hunt or Panmure Gordon as to any of the contents of this announcement or the Circular.

Apart from the responsibilities and liabilities, if any, which may be imposed on Peel Hunt and Panmure Gordon by FSMA or the regulatory regime established thereunder, Peel Hunt and Panmure Gordon do not accept any responsibility or liability whatsoever for the contents of the Circular or this announcement, and no representation or warranty, express or implied, is made by Peel Hunt or Panmure Gordon in relation to the contents of the Circular or this announcement, including their accuracy, completeness or verification or for any other statement made or purported to be made by it, or on its behalf, in connection with the Company or the Tender Offer. To the fullest extent permissible Peel Hunt and Panmure Gordon accordingly disclaim all and any responsibility or liability whether arising in tort, contract or otherwise (save as referred to above) which it might otherwise have in respect of the contents of the Circular or this announcement or any such statement.

This announcement contains (or may contain) certain forward-looking statements with respect to the Company's current expectations and projections about future events. These statements, which sometimes use, but are not limited to, words such as 'anticipate', 'believe', 'intend', 'estimate', 'expect' and words of similar meaning, reflect the directors' beliefs and expectations and involve a number of risks, uncertainties and assumptions that could cause actual results and performance to differ materially from any expected future results or performance expressed or implied by the forward-looking statement. Statements contained in this announcement regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. The information contained in this announcement is subject to change without notice and, except as required by applicable law, neither the Company, Peel Hunt nor Panmure Gordon assumes any responsibility or obligation to update publicly or review any of the forward-looking statements contained herein. You should not place undue reliance on forward-looking statements, which speak only as of the date of this announcement.

This announcement is neither an offer to purchase nor a solicitation of an offer to sell Ordinary Shares. The Tender Offer is made only pursuant to the Circular and the related Tender Form with respect to the Ordinary Shares. The Tender Offer is not being made to, holders of Ordinary Shares residing in any jurisdiction in which the making of the Tender Offer would not be in compliance with the laws of that jurisdiction.

Notice to US Shareholders

The Tender Offer relates to securities in a non-US company which is registered in England and Wales and is subject to the disclosure requirements, rules and practices applicable to companies listed in the UK, which differ from those of the United States in certain material respects. The Circular has been prepared in accordance with UK style and practice for the purpose of complying with English law and the AIM Rules, and US Shareholders should read the entire Circular, including Part V (Certain Taxation Considerations in relation to the Tender Offer) of the Circular. The financial information relating to the Company included in the Circular has not been prepared in accordance with generally accepted accounting principles in the United States and thus may not be comparable to financial information relating to US companies. The Tender Offer is not subject to the disclosure and other procedural requirements of Regulation 14D under the US Securities Exchange Act of 1934 (the "Exchange Act"). The Tender Offer will be made in the United States in accordance with the requirements of Regulation 14E under the Exchange Act to the extent applicable. Certain provisions of Regulation 14E under the Exchange Act are not applicable to the Tender Offer by virtue of Rule 14d-1(d) under the Exchange Act. US Shareholders should note that the Company is not listed on a US securities exchange and is not subject to the periodic reporting requirements of the Exchange Act and is not required to, and does not, file any reports with the SEC thereunder.

It may be difficult for US Shareholders to enforce certain rights and claims arising in connection with the Tender Offer under US federal securities laws since the Company is located outside the United States and most of its officers and directors may reside outside the United States. It may not be possible to sue a non-US company or its officers or directors in a non-US court for violations of US securities laws. It also may not be possible to compel a non-US company or its affiliates to subject themselves to a US court's judgment.

In accordance with normal United Kingdom market practice and pursuant to Rule 14e-5(b)(12) under the Exchange Act, the Company or its nominees or brokers may from time to time make certain purchases of, or arrangements to purchase Ordinary Shares outside the United States, otherwise than pursuant to the Tender Offer, before or during the period in which the Tender Offer remains open for acceptance, such as in open market purchases at prevailing prices or privately negotiated purchases at negotiated prices. Such purchases, or arrangements to purchase, will comply with all applicable United Kingdom rules, including the rules of the London Stock Exchange.

Information regarding such purchases and activities which is required to be made public in the United Kingdom will be reported to a Regulatory Information Service and will be available to all investors (including US investors) on the London Stock Exchange website at www.londonstockexchange.com.

The receipt of cash pursuant to the Tender Offer by an Eligible Shareholder who is a US holder (as defined in Part V (Certain Taxation Considerations in relation to the Tender Offer) of the Circular) will be a taxable transaction for US federal income tax purposes. In addition, as described in section B, paragraph 5 of Part V (Certain Taxation Considerations in relation to the Tender Offer), of the Circular, holders may be subject to US backup withholding and information reporting on payments with respect to the Tender Offer made (or deemed made) within the United States. Part V (Certain Taxation Considerations in relation to the Tender Offer) of the Circular further sets forth certain US federal income tax consequences of the Tender Offer under current US law. However, each Eligible Shareholder should consult and seek individual advice from an appropriate professional adviser.

Neither the SEC nor any US state securities commission has approved or disapproved of this transaction or passed upon the merits of fairness of such transaction or passed upon the adequacy of the information contained in the Circular. Any representation to the contrary is a criminal offence.