25 Nov 2011 07:00
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN OR INTO OR FROM ANY RESTRICTED JURISDICTION OR WHERE IT WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF ANY SUCH JURISDICTION
RECOMMENDED CASH OFFER
by
OVAL (2245) LIMITED
for
COSALT PLC
The Independent Directors of Cosalt plc ('Cosalt') and the Board of Oval (2245) Limited ('Oval') announce that they have reached an agreement on the terms of a recommended cash offer to be made by Oval for the entire issued and to be issued ordinary share capital of Cosalt, other than an aggregate of 60,998,069 Cosalt Shares (representing approximately 15.08 per cent. of the entire existing ordinary share capital of Cosalt) beneficially owned by David Ross.
Oval is a limited company wholly owned by David Ross, chairman of Cosalt, and Oval has been established specifically for the purposes of making the Offer.
SUMMARY OF THE OFFER
Under the terms of the Offer, Cosalt Shareholders will be entitled to receive 0.1 pence per Cosalt Share in cash.
The Offer values the entire issued and to be issued share capital of Cosalt at approximately £400,000 and implies an enterprise value of £14.4m.
The Offer Price represents:
a discount of approximately 87.18 per cent. to the Closing Price of 0.78 pence for each Cosalt Share on 16 November 2011, the last dealing day prior to the commencement of the Offer Period.
a discount of approximately 71.43 per cent. to the Closing Price of 0.35 pence for each Cosalt Share on 24 November 2011, being the last business day prior to the publication of this Announcement.
BACKGROUND TO AND REASONS FOR THE OFFER
The deterioration in the Company's trading as outlined in section 7 of this Announcement together with the current level of net indebtedness in the Cosalt Group of approximately £14.0 million and a pension deficit of approximately £9 million as at 30 June 2011 has resulted in a high degree of uncertainty over the ability of the Company to be able to continue as a going concern. David Ross has, in recent years, provided significant levels of funding to the Cosalt Group. This includes £10.4 million of equity funding since 2006, as well as £2.6 million of loans and £4.6 million of bank guarantees currently outstanding. The Company requires a significant injection of capital to provide the necessary funding for the business to ensure it can meet its obligations and provide time to seek a turnaround in the performance of the business. A number of the Company's largest shareholders have indicated that currently they do not wish to invest further cash into the business. On acquiring control David Ross intends to recapitalise the Group to provide funds to allow it to continue to trade. Given the financial position that the Company is in, David Ross believes that to preserve the Company's future and to provide the opportunity to existing investors to recover what little value remains in the Cosalt Group's equity, that it is in Cosalt Shareholders' interests to accept the Offer.
Oval believes that it is no longer appropriate to maintain the Company's listing as it is disproportionately restrictive and costly for a business of its size and that it would be easier to address the Company's issues as a private company. Oval therefore intends to take the Company private and to address the issues that have affected the Cosalt Group's trading away from the public markets.
Commenting on the offer David Ross, chairman of Oval said: "This Offer represents an opportunity to preserve the Company as a going concern and to provide the necessary investment to rebuild the Company."
Commenting on the offer Maurice White, Senior Independent Non-executive Director of Cosalt, said: "The Company is in a difficult situation. A practical solution is required to secure the future of the business and therefore the Independent Directors are unanimously recommending the offer to shareholders."
BOARD SUPPORT
The Independent Cosalt Directors, having been so advised by Evolution, consider the terms of the offer to be fair and reasonable. In providing advice to the Independent Cosalt Directors, Evolution has taken into account the commercial assessments of the Independent Cosalt Directors. Accordingly the Independent Cosalt Directors unanimously recommend Cosalt Shareholders to accept the Offer.
Oval has received an irrevocable undertaking from Sovereign Holding, the beneficial owner of 74,276,918 Cosalt Shares, representing approximately 18.37 per cent. of the existing issued ordinary share capital of Cosalt to procure the acceptance of the offer from Lynchwood Nominees (who holds the shares as nominee for Sovereign Holding).
The conditions and certain terms of the Offer are set out in this Announcement together with certain information on Cosalt and on Oval. Further information on the Offer, Cosalt, Oval and the expected timetable of principal events will be set out in the Offer Document to be published shortly and by no later than 23 December 2011.
This summary should be read in conjunction with, and is subject to, the full text of the following Announcement. Appendix II and Appendix III of the following Announcement contain the sources and bases of certain information and definitions of certain terms respectively, both used in this summary and in the following Announcement.
Enquiries
WH Ireland (financial adviser to Oval) | |
James Joyce | Tel: +44 (0)20 7220 1666 |
Evolution Securities (financial adviser to Cosalt) | |
Joanne Lake / Peter Steel | Tel: +44 (0)113 243 1619 |
RLM Finsbury (PR adviser to Oval) | |
James Leviton | Tel: +44 (0) 20 7251 3801 |
Cardew Group (PR adviser to Cosalt) | |
Tim Robertson / Sophie Leigh Pemberton | Tel: +44 (0) 20 7930 0777 |
CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS
This Announcement contains certain forward looking statements with respect to the financial condition, results of operations and business of Oval and Cosalt or the Cosalt Group and certain plans and objectives of the Oval Board and the Cosalt Board. These forward looking statements can be identified by the fact that they do not relate to historical or current facts. Forward looking statements often use words such as "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", "will", "may", "should", "would", "could" or the negative form of these terms and similar expressions. These statements are based on assumptions and assessments made by the Oval Board and the Cosalt Board in the light of their experience and their perception of historical trends, current conditions, expected future developments and other factors they believe appropriate. By their nature, forward looking statements involve risk and uncertainty and the factors described in the context of such forward looking statements in this Announcement could cause actual results and developments to differ materially from those expressed in or implied by such forward looking statements.
Should one or more of these risks or uncertainties materialise, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this Announcement. Except as required by the FSA, the London Stock Exchange or any other applicable law, Oval and Cosalt assume no obligation to update or correct the information contained in this Announcement.
IMPORTANT INFORMATION
The Offer Document and (in the case of Cosalt Shares held in certificated form) the Form of Acceptance will be posted to Cosalt Shareholders shortly and by no later than 23 December 2011, other than in relation to those in a Restricted Jurisdiction and the Offer will remain open for acceptance until Day 21.
The Oval Directors accept responsibility for the information contained in this Announcement other than: (i) the information relating to Cosalt Group, Cosalt Directors, their immediate families, related trusts and connected persons and (ii) the recommendations and opinions of the Independent Cosalt Directors relating to the Offer. To the best of the knowledge and belief of the Oval Directors (who have taken all reasonable care to ensure that such is the case), the information contained in this Announcement for which they are responsible is in accordance with the facts and does not omit anything likely to affect the import of such information.
The Cosalt Directors accept responsibility for the information contained in this Announcement relating to Cosalt Group, Cosalt Directors, their immediate families, related trusts and connected persons (other than the recommendation(s) and opinions of the Independent Cosalt Directors relating to the Offer, for which only the Independent Cosalt Directors accept responsibility as set out below and other than paragraph 8 for which the Oval Directors accepts responsibility). To the best of the knowledge and belief of the Cosalt Directors (who have taken all reasonable care to ensure that such is the case), the information contained in this Announcement for which they are responsible is in accordance with the facts and does not omit anything likely to affect the import of such information.
The Independent Cosalt Directors accept responsibility for the recommendation and opinions of the Independent Cosalt Directors relating to the Offer. To the best of the knowledge and belief of the Independent Cosalt Directors (who have taken all reasonable care to ensure that such is the case), the information contained in this Announcement for which they are responsible is in accordance with the facts and does not omit anything likely to affect the import of such information.
Evolution, which is authorised and regulated in the United Kingdom by the FSA, is acting exclusively for Cosalt and no one else in connection with the Offer and will not be responsible to anyone other than Cosalt for providing the protections afforded to clients of Evolution nor for providing advice in relation to the Offer or any other matter or arrangement referred to in this Announcement.
WH Ireland, which is authorised and regulated in the United Kingdom by the FSA, is acting exclusively for Oval and no one else in connection with the Offer and will not be responsible to anyone other than Oval for providing the protections afforded to clients of WH Ireland nor for providing advice in relation to the Offer or any other matter or arrangement referred to in this Announcement.
The release, publication or distribution of this Announcement in jurisdictions other than the United Kingdom may be restricted by law and therefore persons into whose possession this Announcement comes should inform themselves about, and observe, such restrictions. Any failure to comply with the restrictions may constitute a violation of the securities laws of any such jurisdiction. The following Announcement has been prepared in accordance with English law and the Code and information disclosed may not be the same as that which would have been prepared in accordance with the laws of jurisdictions outside England.
This Announcement does not constitute an offer or an invitation to purchase or subscribe for any securities or the solicitation of any vote or approval in any jurisdiction pursuant to the Offer or otherwise. The Offer will be made solely by means of the Offer Document and the Form of Acceptance (in respect of certificated Cosalt Shares), which will contain the full terms and conditions of the Offer, including details of how the Offer may be accepted. Any acceptance or other response to the Offer should be made only on the basis of the information in the Offer Document and the Form of Acceptance (in the case of certificated Cosalt Shares). This announcement does not constitute a prospectus or prospectus equivalent document.
Unless otherwise determined by Oval and permitted by applicable law and regulation, the Offer will not be made, directly or indirectly, in or into, or by the use of the mails or by any means or instrumentality (including, without limitation, telephonically or electronically) of interstate or foreign commerce, or any facility of a national securities exchange, of a Restricted Jurisdiction (including the United States, Canada, Australia or Japan) and the Offer will not be capable of acceptance by any such use, means, instrumentality or facility or from within a Restricted Jurisdiction. Accordingly, copies of this Announcement are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in or into or from a Restricted Jurisdiction and persons receiving this Announcement (including, without limitation, custodians, nominees and trustees) must not mail or otherwise forward, distribute or send it in or into or from a Restricted Jurisdiction. Doing so may render invalid any purported acceptance of the Offer. The availability of the Offer to persons who are not resident in the United Kingdom may be affected by the laws of the relevant jurisdictions. Persons who are not resident in the United Kingdom should inform themselves about and observe any applicable requirements.
DEALING DISCLOSURE REQUIREMENTS
Under Rule 8.3(a) of the Code, any person who is interested in 1 per cent. or more of any class of relevant securities of an offeree company or of any paper 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 paper 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) an offeree company and (ii) any paper 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 p.m. (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 p.m. (London time) on the 10th business day following the announcement in which any paper offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a paper 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 per cent. or more of any class of relevant securities of the offeree company or of any paper offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree or of any paper 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) an offeree company and (ii) any paper 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 p.m. (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 the offeree company or a paper 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 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. If you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure, you should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129.
FURTHER INFORMATION
Please be aware that addresses, electronic addresses and certain other information provided by Cosalt Shareholders, persons with information rights and other relevant persons for the receipt of communications from the Cosalt Group may be provided to Oval during the Offer Period as required under Section 4 of Appendix 4 of the Code.
In accordance with Rule 2.10 of the City Code on Takeovers and Mergers, Cosalt confirms that it has 404,403,397 ordinary shares of 1 pence each in issue and admitted to trading on the Main Market of the London Stock Exchange. The ISIN reference for these securities is GB0002265055.
If you are in any doubt about the action you should take, you are recommended to seek your own personal financial advice immediately from your stockbroker, bank manager, solicitor, accountant or independent financial adviser authorised under the Financial Services and Market Act 2000 (as amended) if you are resident in the United Kingdom or, if not, from another appropriately authorised independent financial adviser.
Copies of this Announcement and the irrevocable undertaking can be found at Cosalt's website at www.cosalt.com.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN OR INTO OR FROM ANY RESTRICTED JURISDICTION OR WHERE IT WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF ANY SUCH JURISDICTION
RECOMMENDED CASH OFFER
by
OVAL
for
COSALT PLC
1. Introduction
Oval and the Independent Cosalt Directors are pleased to announce they have agreed the terms of a recommended cash offer to be made by Oval to acquire the entire issued and to be issued ordinary share capital of Cosalt other than an aggregate of 60,998,069 Cosalt Shares (representing approximately 15.08 per cent. of the entire existing issued ordinary share capital of Cosalt beneficially held by David Ross) at 0.1 pence per Cosalt Share.
2. Terms of the Offer
Oval hereby offers to acquire, on the terms of and subject to the conditions set out in Appendix I of this Announcement, all the issued and to be issued ordinary share capital of Cosalt other than an aggregate of 60,998,069 Cosalt Shares (representing approximately 15.08 per cent. of the entire existing issued ordinary share capital of Cosalt beneficially held by David Ross) on the following basis:
for each Cosalt Share 0.1 pence in cash
The Offer values the entire issued and to be issued share capital of Cosalt at approximately £400,000 and each Cosalt Share at 0.1 pence. At 0.1 pence, the Offer represents:
a discount of approximately 87.18 per cent. to the Closing Price of 0.78 pence for each Cosalt Share on 16 November 2011, being the last business day prior to the commencement of the Offer Period;
a discount of approximately 71.43 per cent. to the Closing Price of 0.35 pence for each Cosalt Share on 24 November 2011, being the last business day prior to the Announcement; and
The Offer values the entire issued and to be issued Share capital of Cosalt at approximately £400,000 and implies an enterprise value of approximately £14.4 million.
3. Recommendation
The Independent Cosalt Directors, having been so advised by Evolution, consider the terms of the offer to be fair and reasonable. In providing advice to the Independent Cosalt Directors, Evolution has taken into account the commercial assessments of the Independent Cosalt Directors. Accordingly the Independent Cosalt Directors unanimously recommend Cosalt Shareholders to accept the Offer.
4. Irrevocable undertaking
Oval has received an irrevocable undertaking from Sovereign Holding, the beneficial owner of 74,276,918 Cosalt Shares, representing approximately 18.37 per cent. of the existing issued ordinary share capital of Cosalt to procure the acceptance of the offer from Lynchwood Nominees (who holds the shares as nominee for Sovereign Holding).
The aggregate of David Ross's existing interest in the Company of 15.08 per cent. and the irrevocable undertaking amount to 33.45 per cent. of the entire issued ordinary share capital of Cosalt.
5. Information on Oval
Oval is a private limited company incorporated in England and Wales on 17 November 2011 specifically for the purpose of making the Offer. Since its incorporation, Oval has not traded, other than to the extent necessary to finance and make the Offer. Oval's sole shareholder is David Ross.
The Offer will be financed out of Oval's existing cash resources, further details of which will be set out in the Offer Document. WH Ireland, financial advisers to Oval is satisfied that sufficient resources are available to Oval to satisfy the Offer.
6. Information on Cosalt
Cosalt was renamed and admitted to trading on the London Stock Exchange in 1971, having initially traded as the Great Grimsby Coal, Salt and Tanning Company.
Their acquisition of the GTC Group in 2007 increased their presence and service capability in the oil and gas sector. The Company now trades in the UK and Norway in the safety and protection services and equipment to the renewable energy and the offshore oil & gas industries.
More recently the Company has disposed of certain elements of its business in order to refocus on its established offshore business and the recently launched renewables business. On 26 August 2011 Cosalt completed the sale of its marine business to Survitec, generating net proceeds of £27 million. Proceeds from the sale were used to reduce the group's borrowings and re-focus the business on providing services to the offshore industries.
On 1 September 2011 Cosalt released its interim results for the six months ended 30 June 2011. Save as disclosed in this paragraph 6, there have been no material changes in the financial or trading position of the Company since that date.
Turnover and the operating loss from continuing operations before special items was £20.9 million (2010: £20.1 million) and £1.8 million (2010: profit of £0.1m) respectively. Special items from continuing operations for the period were £6.7 million: £3.6 million are non-cash relating to a write down in property values and impairment of goodwill, the balance are re-structuring, amortisation of intangibles, refinancing and litigation costs.
Cosalt also announced on 1 September 2011 the appointment of a new Chief Executive Officer, Trevor Sands, who joined the Company from Emerson Electric Inc. In addition, Cosalt announced the appointment of a new Chief Financial Officer, Dolores Douglas.
On 19 October 2011 Cosalt released a trading update stating that the Cosalt Board expected the Cosalt Group's trading for the year to 31 December 2011 to be significantly lower than the Cosalt Board's previous expectations. The delayed sale of the marine business earlier in the year and the resulting pressure on cashflow has had an adverse effect on margins of its offshore division and had delayed the rollout of the South East contract in Cosalt's workwear division. The Cosalt Board instigated a full review of Cosalt's operations and future funding requirements.
The following text has been extracted from Cosalt's interim management statement of 17 November 2011:
"Pressure has continued, since the October announcement, on the Group's cash flows and financial position. The Cosalt Group currently has net indebtedness of £12.3 million (bank borrowings of £8.8 million and shareholder and other loans of £3.5 million) and management is maintaining an ongoing dialogue with the Company's lenders. The Board is now of the view that the Company may well utilise its available facilities, of £14.9 million, in full before the end of the current financial year.
During the period, external trading conditions in the Cosalt Group's offshore and workwear markets continue to improve, however, the Cosalt Group has been unable to fully capitalise on this, primarily due to the pressure on working capital."
The following text has been extracted from a further announcement made by the Company on 23 November 2011:
"its cashflow position has continued to deteriorate such that the Company now has £900,000 of bank facilities available, which represents sufficient working capital only until 30 November 2011. The Company is therefore now in urgent discussions with its major shareholders and banking partners. The Board is in the process of appointing restructuring advisers."
Cosalt announces today that its banking partners have confirmed that they are not currently prepared to advance any further funding to the Group. The Board has appointed PWC as restructuring advisers to assist in the assessment of options available to the Company for the realisation of assets or refinancing. The Board also continues to discuss with David Ross provision of additional working capital funding until mid-December 2011, the earliest date by which David Ross' offer could be declared unconditional. In light of these developments, David Ross has now indicated that, should he acquire control of the Group, he would be prepared to provide, subject to certain conditions, £5 million of funding to the Group as described in further detail in section 7 below.
7. Background to and reasons for recommending the Offer
In considering the Offer and their recommendation, the Independent Cosalt Directors have taken into account a number of factors, including the Cosalt Group's current trading and future prospects, its financial position, the feasibility of other available options and the interests of shareholders and other stakeholders.
Background
Cosalt's trading record and ability to generate cash has been generally poor for several years and this has created substantial ongoing pressure on the Cosalt Group's funding position. In order to alleviate this, in August 2009, the Company undertook a £17 million (net) fundraising by way of a deeply discounted placing and open offer.
Trading conditions have since continued to be difficult leading to weak cash generation and further pressure on the Cosalt Group's funding position. This has been exacerbated by an alleged fraud at the Company's Aberdeen offshore operation, which resulted in both a significant cash outflow and necessitated a revision of this division's accounting records. The Company's ongoing litigation against the Melville family in relation to this matter has also diverted management attention away from day to day trading throughout this period.
Another pressure on the Cosalt Group's funding position is the need to reduce the funding deficit on the Pension Scheme of £9.0 million as at 30 June 2011, as measured in accordance with International Accounting Standards. Until March 2011, the Cosalt Group was required to make monthly payments of £0.1 million as part of the deficit recovery plan. These payments have ceased for 18 months, but will recommence in October 2012.
The above factors contributed to the Cosalt Board's decision to sell the Cosalt Group's marine division. This was completed in August 2011 realising net proceeds of £27 million, which were applied to reduce bank indebtedness. Shareholder loans and guarantees were also put in place at that time, as a condition of HSBC and RBS, the Cosalt Group's senior lenders, continuing to make sufficient bank facilities available to meet the Group's anticipated working capital requirements.
Current trading and funding
On 19 October 2011, the Company announced that cash flow pressures had adversely affected margins at the Cosalt Group's offshore division and had delayed the rollout of the South-East contract in the workwear division. The pressure on cash flows and the Cosalt Group's financial position has continued; the following is an extract from the Company's Interim Management Statement made on 17 November 2011:
"Cosalt announces its interim management statement in respect of the period from 1 July 2011 to 16 November 2011.
During the period, the delayed sale of Cosalt's marine division to Survitec was finally completed on 26 August 2011 and generated proceeds of £27 million, which were applied to reduce the Company's bank debt. Immediately following the sale of marine, net indebtedness stood at £7.3 million.
Since that date, trading has continued to be challenging and a trading update was announced on 19 October 2011, stating that the Cosalt Group's trading for the year to 31 December 2011 was expected to be significantly lower than the Cosalt Board's previous expectations and that the Cosalt Board had instigated a full review of the Cosalt Group's operations and future funding requirements. The review is still ongoing.
Pressure has continued, since the October announcement, on the Cosalt Group's cashflows and financial position. The Cosalt Group currently has net indebtedness of £12.3 million (bank borrowings of £8.8 million and shareholder and other loans of £3.5 million) and management is maintaining an ongoing dialogue with the Company's lenders. The Cosalt Board is now of the view that the Company may well utilise its available facilities, of £14.9 million, in full before the end of the current financial year.
During the period, external trading conditions in the Group's offshore and workwear markets continue to improve, however, the Group has been unable to fully capitalise on this, primarily due to the pressure on working capital."
The following text has been extracted from a further announcement made by the Company on 23 November 2011:
"its cashflow position has continued to deteriorate such that the Company now has only £900,000 of bank facilities available, which represents sufficient working capital only until 30 November 2011. The Company is therefore now in urgent discussions with its major shareholders and banking partners. The Board is in the process of appointing restructuring advisors"
As described above, Cosalt's banking partners have confirmed that they are not currently prepared to advance any further funding to the Group and the Board has also appointed PWC as restructuring advisers.
The Independent Cosalt Directors are of the view that these cashflow difficulties will remain for the foreseeable future and believe that any improvement in the Group's future prospects would be hindered as a result. It is unclear how the Cosalt Group would be able to make any further unforeseen payments or commitments without David Ross' continuing support. Further details of the arrangements with David Ross will be set out in the Offer Document.
The Cosalt Group is required to repay its banking facilities and shareholder loans by 31 December 2012. In light of the Group's expected future trading prospects and funding position the Independent Cosalt Directors believe that considerable uncertainty exists around the Group's ability to complete a fundraising within the required timeframe.
Reasons for recommending the Offer
David Ross has, in recent years, provided significant amounts of funding to the Group. This includes £10.4 million of equity funding since 2006, as well as £2.6 million of loans and £4.6 million of bank guarantees currently outstanding. As described above, David Ross has also indicated that, should he acquire control of Cosalt, it is his intention to provide further funding to the Cosalt Group to allow it to move forward on a sound and lasting footing, to which end he intends to provide £5 million to the Company subject to, inter-alia:
(a) valid acceptances of the Offer of not less than 90 per cent. (or such lower level as Oval may agree); and
(b) agreeing acceptable terms with the Company, its Senior Lenders and the trustees of the Cosalt Pension Scheme in relation to the purposes for which the money may be used and the provision of suitable security arrangements;
The Independent Cosalt Directors believe that, without a further significant injection of funding, the above issues cast doubt over the Cosalt Group's ability to continue as a going concern in its present form. Key existing shareholders have been consulted as part of this process and are not currently prepared to inject further equity into the Cosalt Group. Even if existing or new shareholders were prepared to put further equity into the Group, there can be no guarantee that such equity would be made available on a timely basis and any such equity fundraising would be substantially dilutive to the interests of any existing shareholders not participating in the fundraising. In the view of the Independent Cosalt Directors, other courses of action, such as the sale of some of the Company's remaining assets or businesses, do not present a viable alternative to David Ross' offer as they would be unlikely to produce any value for shareholders due to the Cosalt Group's net indebtedness.
The Independent Cosalt Directors therefore believe that, taking into account the Company's current difficult financial position and the expectation that the pressure on the Cosalt Group's cash flow situation will continue, the Offer represents the most realistic means of securing the Company's future.
8. Directors, management and employees
The Oval Board has given assurances to the Independent Cosalt Directors that, following the Offer becoming or being declared unconditional in all respects, the existing employment rights, of all current Cosalt Group employees will be fully safeguarded. The Oval Board has further confirmed that it will use its reasonable endeavours to ensure that all pension rights will be fully safeguarded.
Each of the Independent Cosalt Directors has signed conditional letters of resignation confirming and agreeing that upon the Offer becoming or being declared unconditional in all respects they will resign from the Cosalt Board.
Trevor Sands will continue as the Chief Executive Officer of Cosalt after the Offer has completed.
It is Oval's intention to retain the Group's existing business and to make available significant additional capital to expand the Group's business for the benefit of the Group's customers and suppliers. Oval would look to make efficiencies within the head office function and would look to offer attractive relocation packages for any affected employees.
9. Cosalt Share Option Schemes and Deferred Shares
The Offer extends to any Cosalt Shares which are issued or unconditionally allotted and fully paid (or credited as fully paid) before the date on which the Offer closes (or such earlier date as Oval may, subject to the Code decide, not being earlier than the date on which the Offer becomes or is declared unconditional as to acceptances or, if later, Day 21), including any such shares unconditionally allotted or issued pursuant to options/awards under the Cosalt Share Option Schemes.
To the extent that options/awards remain unexercised at the time the Offer becomes or is declared wholly unconditional, appropriate proposals will be made by Oval to participants in the Cosalt Share Option Schemes once the Offer becomes or is declared wholly unconditional.
The Offer does not extend to the Company's Deferred Shares.
10. Disclosure of interest in Cosalt
As at the date of publication of this Announcement, the chairman of Oval, David Ross has a beneficial interest in 60,998,069 shares representing approximately 15.08 per cent. of the issued ordinary share capital of Cosalt. Except for these Cosalt Shares neither Oval, any of Oval's Directors, their immediate families or related trusts, nor so far as Oval is aware any party acting in concert with Oval, has any interest in or right to subscribe in respect of any relevant securities of Cosalt or has any short positions in respect of relevant securities of Cosalt, or has borrowed or lent any relevant security of Cosalt.
11. Further Information
The Cosalt Shares to be acquired by Oval pursuant to the Offer will be acquired fully paid and free from all liens, equities, charges, encumbrances, rights of pre-emption and other third party rights and interests of any nature whatsoever and together with all rights now or hereafter attaching thereto, including the right to receive and retain all dividends and other distributions (if any) declared, paid or made on or after the date of this Announcement.
There are no agreements or arrangements to which Oval is a party which relate to the circumstances in which it may or may not invoke or seek to invoke a condition of the Offer.
12. Compulsory acquisition, cancellation of admission to trading and re-registration
If Oval receives acceptances under the Offer in respect of, and/or otherwise acquires, 90 per cent. or more of the Cosalt Shares and the Offer becomes or is declared unconditional in all respects, then Oval intends to exercise its rights pursuant to the provisions of sections 974 to 991 (inclusive) of the Companies Act 2006 to acquire compulsorily any outstanding Cosalt Shares not acquired or agreed to be acquired pursuant to the Offer or otherwise.
In addition, as soon as it is appropriate to do so, and subject to the conditions of the Offer having been satisfied or (if capable of waiver) waived and subject to any applicable legal or regulatory requirements, Oval intends to procure that Cosalt cancels the admission of the Cosalt Shares to trading on the London Stock Exchange. The cancellation of the trading of the Cosalt Shares will significantly reduce the liquidity and marketability of any Cosalt Shares not assented to the Offer and their value may be affected in consequence as there will be no market facility for dealing Cosalt Shares. It is anticipated that, should such an application be made, cancellation of Cosalt's admission to trading will take effect no earlier than 20 business days following the date the Offer becomes or is declared unconditional in all respects. Further details will be announced as appropriate.
Cancellation of admission to trading on the London Stock Exchange would significantly reduce the liquidity and marketability of any Cosalt Shares in respect of which acceptances of the Offer are not submitted.
It is also proposed that, in due course, Oval will seek to procure the re-registration of Cosalt as a private limited company under the relevant provisions of the Companies Act 2006.
13. Issued share capital
In accordance with Rule 2.10 of the Code, Cosalt confirms that it has 404,403,397 ordinary shares of 1pence each in issue and admitted to trading on the Main Market of the London Stock Exchange. The ISIN reference for these securities is GB0002265055.
14. General
The Offer Document and Form of Acceptance will be published and posted to Cosalt Shareholders and, for information only, to participants in the Cosalt Share Option Schemes and persons with information rights as soon as practicable and in any event, within 28 days of this Announcement other than in relation to anyone in a Restricted Jurisdiction. The Offer Document will also be made available to the employees of Cosalt or their representatives.
The availability of the Offer to persons who are not resident in the United Kingdom may be affected by the laws of their relevant jurisdiction. Such persons should inform themselves of, and observe, any applicable legal or regulatory requirements of their jurisdiction. Further details in relation to overseas shareholders will be contained in the Offer Document.
The Offer referred to in the Offer Document will not be made, directly or indirectly, in, into or by use of the mails of, or by any means or instrumentality (including, without limitation, telephonically or electronically) of interstate or foreign commerce of, or any facilities of a nationals securities exchange of, the United States, Canada, Australia or Japan or any other jurisdiction if to do so would constitute a violation of the relevant laws of such jurisdiction. This announcement does not constitute an offer in the United States, Canada, Australia or Japan or any such other jurisdiction and the Offer will not be capable of acceptance by any such use, means, instrumentally or facilities or otherwise from or within the United States, Canada, Australia or Japan or any such other jurisdiction. Accordingly the Offer Document is not being, and should not be, mailed, transmitted or otherwise distributed, in whole or in part, in or into or from the United States, Canada, Australia or Japan or any such other jurisdiction.
Cosalt Shareholders (including, without limitation, nominees, trustee or custodians) must not forward the Offer Document to the United States, Canada, Australia, Japan or any other such jurisdiction.
This Announcement does not constitute an offer or an invitation to purchase any securities.
The Offer will be made solely by the Offer Document and the Form of Acceptance, which contain the full terms and conditions of the Offer, including details of how the Offer may be accepted.
Appendix III contains definitions of the terms used in this Announcement.
APPENDIX 1
CONDITIONS AND FURTHER TERMS OF THE OFFER
PART A: CONDITIONS OF THE OFFER
The Offer is subject to the following conditions and (in respect of certificated Cosalt Shares) the terms set out in the Form of Acceptance and to the applicable rules and regulations of the London Stock Exchange and the Code and is governed by English law and subject to the jurisdiction of the courts of England:
(a) valid acceptances of the Offer being received (and not, where permitted, withdrawn) by not later than 1.00 p.m. on Day 21 or such later time(s) and/or date(s) as Oval may, with the consent of the Panel or subject to the Code, decide in respect of not less than 90 per cent. (or such lower percentage as Oval may decide) in nominal value of Cosalt Shares to which the Offer relates and not less than 90 per cent. (or such lower percentage as Oval may decide) of the voting rights carried by Cosalt Shares to which the Offer relates, provided that this condition will not be satisfied unless Oval and/or any of its wholly-owned subsidiaries shall have acquired or agreed to acquire (whether pursuant to the Offer or otherwise), Cosalt Shares carrying, in aggregate, more than 50 per cent. of the voting rights then normally exercisable at a general meeting of Cosalt (including for this purpose, to the extent (if any) required by the Panel, any voting rights attaching to any Cosalt Shares which may be unconditionally allotted or issued before the Offer becomes or is declared unconditional as to acceptances, whether pursuant to the exercise of any outstanding conversion or subscription rights or otherwise). For the purpose of this condition:
(i) the expression "Cosalt Shares to which the Offer relates'' shall be construed in accordance with sections 974 to 991 (inclusive) of the Companies Act 2006;
(ii) Cosalt Shares which have been unconditionally allotted but not issued shall be deemed to carry the voting rights which they will carry on issue; and
(iii) valid acceptances shall be treated as having been received in respect of any Cosalt Shares that Oval shall, pursuant to section 979(8) and, if applicable, section 979(9) of the Companies Act 2006, be treated as having acquired or unconditionally contracted to acquire by virtue of acceptances of the Offer;
(b) to the extent that the acquisition of Cosalt Shares would constitute a relevant merger within the meaning of section 23 of the Enterprise Act 2002, the Office of Fair Trading indicating, in terms reasonably satisfactory to Oval, that it does not intend to refer the proposed acquisition of Cosalt by Oval, or any aspect of it, to the Competition Commission;
(c) no central bank, government or governmental, quasi-governmental, supranational, statutory, administrative or regulatory body (save for the Pensions Regulator), or any court, institution, investigative body, association, trade agency or professional or environmental body or any other similar person or body in any jurisdiction (each, a "Relevant Authority'') having decided to take, institute, implement or threaten any action, proceeding, suit, investigation, enquiry or reference or enacted, made or proposed any statute, regulation, decision or order or having taken any other step or done anything and there not continuing to be outstanding any statute, regulation, decision or order which would or might reasonably be expected to:
(i) restrict or restrain, prohibit, delay, impose additional adverse conditions or obligations with respect to, or otherwise interfere with the implementation of, the Offer or the acquisition of any Cosalt Shares by Oval or any matters arising therefrom;
(ii) result in a delay in the ability of Oval, or render Oval unable, to acquire some or all of the Cosalt Shares;
(iii) require, prevent or delay the divestiture (or alter the terms envisaged for such divestiture) by any member of the wider Cosalt Group of all or any portion of their respective businesses, assets or properties or impose any limitation on the ability of any of them to conduct their businesses or own their respective assets or properties or any part thereof;
(iv) impose any limitation on, or result in a delay in, the ability of Oval to acquire or hold or exercise effectively, directly or indirectly, all or any rights of ownership of shares or other securities of any member of the wider Cosalt Group or on the ability of any member of the wider Cosalt Group to hold or exercise effectively, directly or indirectly, all or any rights of ownership of shares or other securities or to exercise management control over any other member of the wider Cosalt Group;
(v) require any member of the wider Cosalt Group to offer to acquire any shares or other securities or rights thereover in any member of the wider Cosalt Group owned by any third party;
(vi) make the Offer or its implementation or the proposed acquisition by Oval of any shares or other securities in Cosalt or the acquisition or control of Cosalt or any member of the wider Cosalt Group, illegal, void or unenforceable in or under the laws of any jurisdiction or directly or indirectly restrict or delay, prohibit or otherwise interfere with the implementation of, or impose additional conditions or obligations with respect to, or otherwise challenge, the Offer or the acquisition of any shares in Cosalt, or control of Cosalt, by Oval;
(vii) result in any member of the wider Cosalt Group ceasing to be able to carry on business under any name under which it presently does so, the consequences of which would be material in the context of Cosalt Group taken as a whole;
(viii) impose any limitation on the ability of Oval or the wider Cosalt Group to conduct or co-ordinate or integrate its business, or any part of it, with the business of Oval or the wider Cosalt Group; or
(ix) otherwise adversely affect the business, assets, prospects or profits of Oval or the wider Cosalt Group;
and all applicable waiting and other time periods during which any such Relevant Authority could decide to take, institute, implement or threaten any such action, proceeding, suit, investigation, enquiry or reference or otherwise intervene having expired, lapsed or been terminated;
(d) all authorisations, orders, grants, recognitions, consents, confirmations, clearances, licences, permissions and approvals ("authorisations'') required by law in any jurisdiction for or in respect of the Offer and the proposed acquisition of any shares or securities, directly or indirectly, in, or control of, Cosalt or any member of the wider Cosalt Group by Oval having been obtained in terms and/or form reasonably satisfactory to Oval from all appropriate Relevant Authorities or (without prejudice to the generality of the foregoing) from any persons or bodies with whom Oval or the wider Cosalt Group has entered into contractual arrangements and such authorisations together with all authorisations necessary for any member of the wider Cosalt Group to carry on its business remaining in full force and effect and there being no notice or intimation of any intention to revoke, suspend, materially modify or not to renew the same and all necessary filings having been made, all appropriate waiting and other time periods (including extensions thereto) under any applicable legislation and regulations in any jurisdiction having expired, lapsed or been terminated and all necessary statutory or regulatory obligations in any jurisdiction in respect of the Offer or the proposed acquisition of Cosalt by Oval or of any Cosalt Shares or any matters arising therefrom having been complied with;
(e) save as Disclosed, there being no provision of any agreement, permit, lease, licence or other instrument to which any member of the wider Cosalt Group is a party or by or to which it or any of its assets may be bound or subject which, as a consequence of the making or implementation of the Offer or the acquisition by Oval directly or indirectly of Cosalt or because of a change in the control or management of Cosalt or any member of the wider Cosalt Group, could or might reasonably be expected to result in, to an extent which is material in the context of the wider Cosalt Group in each case, any of the following:
(i) any monies borrowed by, or other indebtedness (actual or contingent) of, or grant available to, any member of the wider Cosalt Group becoming repayable or capable of being declared repayable immediately or earlier than the stated maturity or repayment date or the ability of any member of the wider Cosalt Group to borrow moneys or incur indebtedness being or becoming capable of being withdrawn or inhibited;
(ii) any such agreement, arrangement, permit, lease, licence or other instrument or any right, interest, liability or obligation of any member of the wider Cosalt Group therein, being terminated or adversely modified or affected or any adverse action being taken or any onerous obligation or liability arising thereunder;
(iii) any mortgage, charge or other security interest being created over the whole or any part of the business, property or assets of any member of the wider Cosalt Group or any such security (whenever arising) becoming enforceable;
(iv) the value of any member of the wider Cosalt Group or its financial or trading position or prospects being prejudiced or adversely affected;
(v) any assets or interests of any member of the wider Cosalt Group being or falling to be charged or disposed of or any right arising under which any such asset or interest could be required to be disposed of or charged otherwise than in the ordinary course of business;
(vi) the rights, liabilities, obligations or interests or business of any member of the wider Cosalt Group in or with any other person, firm or company (or any arrangement relating to such interest or business) being terminated or adversely modified or affected;
(vii) any member of the wider Cosalt Group ceasing to be able to carry on business under any name under which it currently does so; or
(viii) the creation of any liability, actual or contingent, by any member of the wider Cosalt Group;
(f) since 30 June 2011, save as Disclosed, no member of Cosalt Group having:
(i) (save for Cosalt Shares issued pursuant to the exercise of options granted under Cosalt Share Option Schemes or as between Cosalt and wholly-owned subsidiaries of Cosalt ("Intra-Cosalt Group Transactions")) issued or agreed to issue or authorised or proposed the issue of additional shares of any class or securities convertible into or rights, warrants or options to subscribe for or acquire any such shares or convertible securities;
(ii) other than to another member of Cosalt Group, recommended, declared, paid or made or proposed to recommend, declare, pay or make any dividend, bonus or other distribution (whether payable in cash or otherwise) other than dividends lawfully paid to Cosalt or wholly-owned subsidiaries of Cosalt;
(iii) save for Intra-Cosalt Group Transactions, merged or demerged with or acquired any body corporate, partnership or business;
(iv) save for Intra-Cosalt Group Transactions, acquired, or (other than in the ordinary course of business) disposed of, transferred, mortgaged or charged or created any security interest over any asset or any right, title or interest in any asset (including shares and trade investments) or authorised, proposed or announced any intention to do so which, in any such case, is material in the context of the Cosalt Group taken as a whole;
(v) save for Intra-Cosalt Group Transactions, issued or authorised or proposed the issue of any debentures or incurred or increased any indebtedness or contingent liability or made, authorised, proposed or announced an intention to propose any change in its share or loan capital;
(vi) entered into or varied or announced its intention to enter into or vary any contract, transaction, commitment or arrangement (whether in respect of capital expenditure or otherwise) which is of a long term or unusual nature or which involves or could involve an obligation of a nature or magnitude which, in any such case, is material in the context of Cosalt Group taken as a whole or which is or is likely to be restrictive in any material respect on the business of any member of the wider Cosalt Group or Oval;
(vii) entered into, implemented, authorised or proposed any reconstruction, amalgamation, scheme of arrangement or other transaction or arrangement otherwise than in the ordinary course of business or announced any intention to do so;
(viii) entered into, or varied in any material respect the terms of, any contract or agreement with any of the directors or senior executives of Cosalt or any of its subsidiaries;
(ix) taken or proposed any corporate action or had any legal proceedings started or threatened against it or had any petition presented for its winding-up (voluntary or otherwise), dissolution or reorganisation or for the appointment of a receiver, administrator, administrative receiver, trustee or similar officer of all or any of its assets and/or revenues or any analogous proceedings in any jurisdiction;
(x) waived or compromised any claim other than in the ordinary course of business;
(xi) made any material amendment to its memorandum or articles of association;
(xii) in relation to pension schemes established for its directors and/or other employees and/or their dependents, made or agreed to or consented to any change to: (A) the terms of the trust deeds constituting such pension schemes or to the benefits which accrue; (B) the pensions which are payable under them; (C) the basis on which qualifications for or accrual of 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
(E) the trustees of such pension schemes;
(xiii) purchased, redeemed or repaid or proposed the purchase, redemption or repayment of any of its own shares or other securities or reduced or made any other change to any part of its share capital;
(xiv) been unable or admitted that it is unable to pay its debts 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; and
(xv) entered into, varied or modified any contract, commitment or agreement with respect to any of the transactions, matters or events referred to in this condition (f) or announced an intention to do so;
(g) since 30 June 2011, save as Disclosed:
(i) no litigation, arbitration, prosecution or other legal proceedings having been instituted, announced or threatened or become pending or remaining outstanding by or against any member of the wider Cosalt Group or to which any member of the wider Cosalt Group is or may become a party (whether as claimant, respondent or otherwise) and no enquiry or investigation by or complaint or reference to any Relevant Authority or other investigative body having been threatened, announced, implemented or instituted or remaining outstanding against or in respect of any member of the wider Cosalt Group which, in any such case, would or might reasonably be expected adversely to affect any member of the wider Cosalt Group to an extent which is material in the context of Cosalt Group taken as a whole;
(ii) no material adverse change having occurred in the business, assets, financial or trading position, profits or prospects of the wider Cosalt Group taken as a whole;
(iii) no contingent or other liability having arisen which might reasonably be expected adversely to materially affect the wider Cosalt Group taken as a whole;
(iv) no investigation by any Relevant Authority having been threatened, announced, implemented or instituted or remaining outstanding which in any case would be likely to have a material adverse effect on the financial position of Cosalt Group taken as a whole;
(h) save as Disclosed, Oval not having discovered that:
(i) any business, financial or other information concerning any member of the wider Cosalt Group publicly disclosed or disclosed to Oval at any time by or on behalf of any member of Cosalt Group is misleading, contains a misrepresentation of fact or omits to state a fact necessary to make the information contained therein not misleading which, in any such case, is material in the context of the wider Cosalt Group taken as a whole;
(ii) any member of the wider Cosalt Group is subject to any liability, actual or contingent which is not Disclosed and which is material in the context of the wider Cosalt Group taken as a whole;
(iii) any past or present member of the wider Cosalt Group has not complied with all applicable legislation or regulations of any jurisdiction with regard to the storage, disposal, discharge, spillage, leak or emission of any waste or hazardous substance or any substance likely to impair the environment or to harm human health or otherwise relating to environmental matters (which non-compliance might give rise to any liability (whether actual or contingent) on the part of any member of the wider Cosalt Group which is material in the context of Cosalt Group taken as a whole) or that there has otherwise been any such disposal, discharge, spillage, leak or emission (whether or not the same constituted a non-compliance by any person with any such legislation or regulations and wherever the same may have taken place) which in any such case might give rise to any liability (whether actual or contingent) on the part of any member of the wider Cosalt Group which is material in the context of Cosalt Group taken as a whole;
(iv) there is, or is likely to be, any liability (whether actual or contingent) to make good, repair, reinstate or clean up any property now or previously owned, occupied or made use of by any past or present member of the wider Cosalt Group or any controlled waters under any environmental legislation, regulation, notice, circular or order of any Relevant Authority or otherwise and which is material in the context of Cosalt Group taken as a whole; or
(v) circumstances exist (whether as a result of the making of the Offer or otherwise) which would be likely to lead to any Relevant Authority instituting, or whereby any member of the wider Cosalt Group or Oval would be likely to be required to institute, an environmental audit or take any other steps which in any such case would be likely to result in any actual or contingent liability on the part of any member of the wider Cosalt Group or Oval to improve or install new plant or equipment or make good, repair, re-instate or clean up any land or other asset now or previously owned, occupied or made use of by any member of the wider Cosalt Group which liability is or is likely to be material in the context of Cosalt Group taken as a whole.
Oval reserves the right to waive all or any of conditions (b) to (h) (inclusive) above, in whole or in part. Conditions (b) to (h) (inclusive) must be fulfilled or waived by midnight on the 21st day after the later of Day 21 and the date on which condition (a) is fulfilled (or such later date as the Panel may agree). Oval shall be under no obligation to waive or treat as fulfilled any of conditions (b) to (h) (inclusive) by a date earlier than the latest date specified above for the fulfilment thereof notwithstanding that the other conditions of the Offer may at such earlier date have been waived or fulfilled and that there are at such earlier date no circumstances indicating that any of such conditions may not be capable of fulfilment.
If Oval is required by the Panel to make an offer for Cosalt Shares under the provisions of Rule 9 of the Code, Oval may make such alterations to the conditions as are necessary to comply with the provisions of that Rule.
The Offer will lapse if, before 3.00 p.m. on the first closing date of the Offer or the date on which the Offer becomes or is declared unconditional as to acceptances (whichever is later), (i) the Offer or any part of it is referred to the Competition Commission; or (ii) following a request to the European Commission under Article 22(3) of the EC Merger Regulation in relation to the Offer or any part of it, which request is accepted by the European Commission, the European Commission initiates proceedings under Article 6(1)(c) of the EC Merger Regulation.
If the Offer lapses, it will cease to be capable of further acceptance and accepting Cosalt Shareholders and Oval will cease to be bound by acceptances submitted on or before the time when the Offer lapses.
APPENDIX II
BASES AND SOURCES
Unless otherwise stated in this Announcement:
(a) financial information relating to Cosalt has been extracted from the audited accounts of Cosalt for the financial year ended 31 December 2010, its interim results for 6 months ended June 2011 or otherwise is derived from the Company's management information;
(b) the amount of the cash payment in respect of full acceptance of the Offer is calculated based upon the number of Cosalt Shares in issue (as described in sub-paragraph (c) above) resulting in a cash payment of approximately £400,000;
(c) all share prices for Cosalt Shares are derived from Daily Official List; and
(d) all prices quoted for Cosalt Shares are Closing Prices.
APPENDIX III
DEFINITIONS
"Announcement" | this announcement
|
"Approved Scheme" | Cosalt 1996 Company Share Option Plan
|
"business day" | a day (not being a Saturday, a Sunday or a public holiday) on which clearing banks in the City of London are open for normal business |
"Canada" | Canada, its possessions, provinces and territories and all areas subject to its jurisdiction or any political subdivision thereof |
"Capita Registrars'' or "Escrow Agent" | Capita Registry, The Registry 34 Beckenham Road, Beckenham, Kent BR3 4TU |
"Certificated'' or "in certificated form'' | in relation to a share or other security, not in uncertificated form (that is, not in CREST) |
"Closing Price" | the closing middle market quotation of a share as derived from the Daily Official List |
"Code'' | the City Code on Takeovers and Mergers |
"connected person" | has the meaning given to that term in section 252 of the Companies Act 2006 |
"Cosalt'' or the "Company" | Cosalt |
"Cosalt Directors'' or "Cosalt Board" | the directors of Cosalt at the date of this Announcement |
"Cosalt Group'' | Cosalt and its existing subsidiary undertakings |
"Cosalt Options" | options or other rights to acquire Cosalt Shares under Cosalt Share Option Schemes or otherwise |
"Cosalt Optionholders" | holders of Cosalt Options |
"Cosalt Share Option Schemes'' | the approved scheme and the unapproved scheme |
"Cosalt Shareholders'' | holders of Cosalt Shares |
"Cosalt Shares'' | the existing issued fully paid ordinary shares of 1 pence each in the capital of Cosalt and any further such shares which are unconditionally allotted or issued and fully paid or credited as fully paid before the date on which the Offer closes (or such earlier date, not being earlier than the date on which the Offer becomes or is declared unconditional as to acceptances as Oval may, subject to the Code, decide) |
"CREST'' | the relevant system (as defined in the Regulations) in respect of which Euroclear is the operator |
"CREST Manual" | the manual issued by Euroclear from time to time |
"CREST member'' | a person who has been admitted by Euroclear as a system-member (as defined in the Regulations) |
"CREST participant'' | a person who is, in relation to CREST, a system - participant (as defined in the Regulations) |
"CREST payment" | has the meaning given to that term in the CREST Manual |
"CREST sponsor'' | a CREST participant admitted to CREST as a CREST sponsor |
"CREST sponsored member'' | a CREST member admitted to CREST as a sponsored member |
"Daily Official List'' | the Daily Official List of the London Stock Exchange |
"Day 21" | the date which falls 21 days after the offer document is posted |
"Dealing Disclosure" | the announcement concerning dealings in relevant securities of any party to the Offer required for the purposes of Rule 8 of the Code |
"Deferred Shares" | deferred shares of 24 pence each in the capital of the Company |
"Disclosed" | means (i) as disclosed in Cosalt's report and accounts for the year ended 31 December 2010; (ii) as publicly announced by Cosalt (by the delivery of an announcement to an authorised Regulatory Information Service prior to 24 November 2011); (iii) as disclosed in the Offer Document; or (iv) as otherwise disclosed in writing, or in the documentation or written information provided, to Oval or its advisers by or on behalf of Cosalt prior to 24 November 2011 in the context of the Offer or (v) as received by and within the actual knowledge of David Ross in his position as a Cosalt Director or matters of which David Ross ought reasonably to have knowledge in his position as a Cosalt Director |
"EC Merger Regulation" | Council Regulation 139/2004/EC (as amended) |
"Electronic Acceptance" | the inputting and settling of a TTE Instruction which constitutes or is deemed to constitute an acceptance of the Offer on the terms set out in the Offer Document |
"electronic form" | as defined in the Code |
"ESA Instruction" | an Escrow Account Adjustment Input (AESN), transaction type "ESA" (as described in the CREST Manual) |
"Euroclear'" | Euroclear UK & Ireland Limited |
"Evolution" | Evolution Securities Limited, Cosalt's Rule 3 Advisor |
"Form of Acceptance'' | the form of acceptance and authority relating to the Offer in respect of certificated Cosalt Shares |
"FSA" | the UK Financial Services Authority |
"FSMA" | the Financial Services and Markets Act 2000 (as amended) |
"GTC Group" | GTC Group Limited |
"hard copy form" | as defined in the Code |
"HMRC" | HM Revenue & Customs |
"HSBC" | HSBC Bank plc |
"Independent Cosalt Directors'' | the Cosalt Directors other than David Ross, and Trevor Sands |
"Japan" | Japan, its cities, prefectures, territories and possessions |
"Listing Rules" | the Listing Rules of the FSA made pursuant to section 73A of the Financial Services and Markets Act 2000 |
"London Stock Exchange'' | London Stock Exchange plc |
"Member account ID'' | the identification code or number attached to any member account in CREST |
"Offer'' | the offer by Oval, on the terms and subject to the conditions set out in the Offer Document and the Form of Acceptance (in respect of certificated Cosalt Shares), to acquire all of the Cosalt Shares (including, where the context requires, any subsequent revision, variation, extension or renewal of such offer) |
"Offer Document'' | the offer document |
"Offer Period'' | the period commencing 17 November 2011 and ending in accordance with the rules of the Code |
"Official List" | the Official List of the UK Listing Authority |
"Opening Position Disclosure" | the announcement containing details of interests or short positions in, or rights to subscribe for, any relevant securities of a party to the Offer if the person concerned has such a position required for the purposes of Rule 8 of the Code |
"Oval Directors'' or "Oval Board" | the directors of Oval as at the date of this Announcement |
"Panel'' | the Panel on Takeovers and Mergers |
"Participant ID'' | the identification code or membership number used in CREST to identify a particular CREST member or other CREST participant |
"Pensions Act" | the Pensions Act 1995 |
"Pensions Regulator" | the UK Pensions Regulator |
"Pension Scheme" | the Cosalt plc Retirement Benefit Plan |
"Pension Scheme Trustees" | the trustees of the Pension Scheme |
"Performance Share Plan" | Cosalt Performance Share Plan |
"Persons with information rights" | as defined in the Code |
"Pounds", "£" or "pence" | the lawful currency of the United Kingdom |
"Preference Shares" | 7.5 per cent. cumulative preference shares in the capital of the Company |
"RBS" | Royal Bank of Scotland plc |
"Regulations'' | the Uncertificated Securities Regulations 2001 (S.I. 2001 No. 3755) |
"Regulatory Information Service" | any channel recognised as a channel for the dissemination of regulatory information by listed companies as defined in the Listing Rules |
"Restricted Jurisdiction" | the United States, Canada, Australia or Japan or any other jurisdiction where extension or acceptance of the Offer would violate the law of that jurisdiction |
"RPI" | Retail Price Index |
"Senior Lenders" | HSBC and RBS |
"Share Option Schemes" | the Approved Scheme and the Unapproved Scheme |
"Sovereign Holding" | Sovereign Holding Limited |
"Survitec" | Survitec Group Limited, a company incorporated in England and Wales with registered number 905173 |
"Survitec Group" | Survitec and its subsidiaries and subsidiary undertakings from time to time |
"TTE Instruction'' | a transfer to escrow instruction (as defined in the CREST Manual) |
"Unapproved Scheme" | Cosalt 1996 Unapproved Executive Option Scheme |
"Uncertificated'' or "in uncertificated form'' | in relation to a share or other security, recorded on the relevant register in uncertificated form in CREST and title to which, by virtue of the Regulations, may be transferred by means of CREST |
"United Kingdom'' or "UK'' | the United Kingdom of Great Britain and Northern Ireland |
"UK Listing Authority" | the FSA acting in its capacity as the competent authority for the purposes of Part VI of the Financial Services and Markets Act 2000 |
"US" or "United States" | the United States of America, its territories and possessions, any state of the United States of America and the District of Columbia and all other areas subject to its jurisdiction |
"WH Ireland" | WH Ireland Limited, Oval's financial advisor |
"wider Cosalt Group'' | Cosalt, its subsidiaries, subsidiary undertakings and associated undertakings and any other body corporate, partnership, joint venture or person in which Cosalt and such undertakings (aggregating their interests) have an interest in 20% or more of the voting or equity capital (or the equivalent) |