MGP.L Regulatory News (MGP)

9 Jan 2008 08:46

Mercury Group PLC09 January 2008 9 January 2008 Mercury Group Plc (the "Company") Further re: Acquisition of Smith Melzack Pepper Angliss Limited The Company announces that it has entered into a Settlement Agreement with thevendors of Smith Melzack Pepper Angliss Limited ("SMPA") ("the Vendors"), whichwas acquired by the Company on 28 February 2005. Under the terms of the original sale and purchase agreement, the Vendors wereentitled to receive, under certain circumstances, deferred consideration andfurther deferred consideration. In November 2006, the Company notified the Vendors of certain claims for breachof warranty relating to PAYE claims ("the PAYE Claim"). The Company and the Vendors have agreed that in settlement of the PAYE Claim andany other warranty claims whether now or in the future, certain of theentitlement of the Vendors to the deferred consideration and the furtherdeferred consideration shall be set-off against the PAYE Claim, and the finalamount of the deferred consideration and further deferred consideration is£182,000 to be satisfied as follows: (a) as to 50 per cent. of such sum by the issue and allotment to the Vendors of,in aggregate, 4,550,000 ordinary shares in the issued share capital of theCompany ("Deferred Consideration Shares"); and (b) as to the remaining 50 per cent. by the issue of £91,000 in nominal amountof convertible unsecured loan stock ("Loan Stock"). The Loan Stock is convertible into ordinary shares in the Company at any time upto the first anniversary of issue at the rate of 50 ordinary shares for every £1nominal of Loan Stock. If the Loan Stock is not converted by such time, it shallbe repaid on the first anniversary of issue, together with interest accrued. TheLoan Stock will carry interest of 1.5 per cent. over three month LIBOR payablequarterly in arrears. The number of Deferred Consideration Shares and the nominal amount of the LoanStock shall be increased in equal proportions if and to the extent that theamount paid by the Company in full and final settlement of the PAYE Claim isless than £110,560. Any further ordinary shares will be issued at a price of 2pper share and any Loan Stock will be issued at par. Ronnie Franks, Stuart Sandler, Clive Orman, Alan Kleinman, Paul Vernon-Smith andColin Povey, who are directors of the Company and/or SMPA, comprise the Vendors.Accordingly, the Settlement Agreement is classified as a related partytransaction under the AIM Rules. The independent directors consider, havingconsulted with John East & Partners Limited, that the terms of the transactionare fair and reasonable insofar as the shareholders of Mercury are concerned. Application will be made for 4,550,000 ordinary shares to be admitted to tradingon the AIM Market and dealings are expected to commence on 14 January 2008. Enquiries: Mercury Group Plc George Kynoch - Chairman 020 7343 4000 John East & Partners Limited David Worlidge 020 7628 2200 This information is provided by RNS The company news service from the London Stock Exchange