Corero Network Regulatory News (CNS)

30 March 2017

Corero Network Security plc

("Corero" or the "Company")

Proposed Fundraising

Corero Network Security plc (AIM: CNS), the AIM listed network security company, today announces its intention to raise approximately £5.0 million from a proposed conditional placing and subscription (the "Fundraising"). It is expected that the Fundraising, when launched, will be conducted at a price of 5.0 pence per new ordinary share of 1 pence each ("Ordinary Share") (the "Placing Price").

Jens Montanana, the Company's Chairman, has indicated to the Board that he proposes to subscribe for no less than £4.2 million of the Fundraising. Mr Montanana has communicated to the Board that any such proposed investment in the Company will be conditional on him increasing his shareholding in the Company to above 50 per cent. of the issued share capital of the Company as enlarged by the Fundraising. As Mr Montanana currently holds 34.1 per cent. of the Company's issued share capital, without a waiver of the obligations under Rule 9 of the Takeover Code ("Rule 9 Waiver"), he would be obliged to make a general offer to Company shareholders if he increased his shareholding. Further Mr Montanana and Andrew Miller, who is deemed to be acting in concert with Mr Montanana (together, the "Concert Party"), have an interest in the Company over a total of 2,921,000 options over Ordinary Shares ("CP Share Options"). Should the Concert Party exercise their rights under the CP Share Options without a Rule 9 Waiver, they would be obliged to make a general offer to Company shareholders. Accordingly, the Company is seeking consent from the Panel on Takeovers and Mergers ("Panel") to waive the obligation on the Concert Party to make a general offer that would otherwise arise as a result of the issue of Ordinary Shares to the Concert Party under the Fundraising and/or the exercise of the CP Share Options.

The Panel's waiver (if given) will be subject to the approval of independent shareholders, being shareholders excluding both members of the Concert Party and any other shareholders who subscribe for Ordinary Shares in the Fundraising ("Independent Shareholders"), taken on a poll at a general meeting of the Company. 

A circular containing a notice of general meeting is currently being prepared by the Company and will be sent to shareholders when the Fundraising announcement is made (assuming that the Fundraising proceeds). In the notice of general meeting, Independent Shareholders will be asked to consider and vote on the resolution approving the Rule 9 Waiver on a poll and shareholders as a whole will be asked to approve the issue of Ordinary Shares pursuant to the Fundraising. The circular will be sent to all shareholders in due course and an announcement will be made when the circular is posted.

In the event that a Rule 9 Waiver is not obtained or the authorities necessary to authorise the Directors to complete the Fundraising are not approved by the requisite majorities or if the Company for whatever reason decides not to proceed with, and make, the Fundraising, the Company will be required to immediately secure alternative financing. The Company cannot be certain that suitable financing would be available in the required amounts or on acceptable terms for the working capital requirements of the Company.

Further details on the Fundraising will be released in due course alongside the Company's annual audited results for the year ended 31 December 2016.

This announcement contains inside information.

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About Corero Network Security

Corero Network Security is a leader in real-time, high-performance DDoS defense solutions. Service providers, hosting providers and online enterprises rely on Corero's award winning technology to eliminate the DDoS threat to their environment through automatic attack detection and mitigation, coupled with complete network visibility, analytics and reporting. This next-generation technology provides a First Line of Defense® against DDoS attacks in the most complex environments while enabling a more cost effective economic model than previously available. For more information, visit www.corero.com