20 Jun 2019 07:00
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) NO.596/2014
FOR IMMEDIATE RELEASE
20 June 2019
RECOMMENDED CASH ACQUISITIONOFPremier Technical Services Group PLC ("PTSG")BYBernard Bidco LIMITED ("BIDCO")
a newly-incorporated company established on behalf of Macquarie Principal Finance Pty Limited, UK branch and a wholly-owned subsidiary of Macquarie Group Limited
to be implemented by means of a Court-sanctioned scheme of arrangementunder Part 26 of the Companies Act 2006
Summary
· The board of Bidco and the Independent Directors of PTSG are pleased to announce that they have reached agreement on the terms of a recommended all cash offer pursuant to which Bidco, a newly-incorporated company established on behalf of Macquarie Principal Finance Pty Limited, UK branch and a wholly-owned subsidiary of Macquarie Group Limited, will acquire the entire issued and to be issued share capital of PTSG (the "Acquisition"). It is intended that the Acquisition will be effected by means of a Court-sanctioned scheme of arrangement (the "Scheme") between PTSG and the PTSG Shareholders under Part 26 of the Companies Act 2006.
· Under the terms of the Acquisition, PTSG Shareholders will be entitled to receive:
210.1 pence in cash for each PTSG Share held (the "Acquisition Price")
· The Acquisition Price reflects the fact that PTSG Shareholders will be entitled to receive and retain the Final Dividend of 0.9 pence per PTSG Share approved by PTSG Shareholders at the Annual General Meeting held on 17 June 2019 and which is payable on 19 July 2019 to PTSG Shareholders who are on the register of members of PTSG at close of business on 28 June 2019.
· The Acquisition values the entire issued and to be issued ordinary share capital of PTSG (excluding the E Ordinary Shares to be acquired by Bidco as described in paragraph 11 of the main body of this Announcement below) at approximately £265.3 million on a fully diluted basis. The Acquisition Price of 210.1 pence for each PTSG Share represents a premium of approximately:
- 141.5 per cent. to the Closing Price of 87 pence per PTSG Share on 19 June 2019 being the last Business Day before the date of this Announcement (the "Latest Practicable Date");
- 72.2 per cent. to the volume weighted average price of 122 pence per PTSG Share for the 12 month period ended on the Latest Practicable Date;
- 304.0 per cent. to the price of 52 pence per PTSG Share at which PTSG Shares were issued upon its admission to AIM in February 2015;
- 33.4 per cent. to the price of 157.5 pence per PTSG Share at which PTSG Shares were issued upon its last placing in October 2018; and
- 59.2 per cent. to the Closing Price of 132 pence per PTSG Share on 26 March 2019, being the date on which PTSG released its final results for the year ended 31 December 2018.
Recommendation
· As certain PTSG Directors, namely Paul Teasdale and Roger Teasdale, Chief Executive Officer and Managing Director of PTSG respectively, have agreed to reinvest the proceeds from the sale of a proportion of their PTSG Shares to Bidco at the Acquisition Price in the Bidco Group (the "Reinvestment Arrangements") and will also participate in a new management incentivisation plan (the "MIP") which Bidco intends to put in place after completion of the Acquisition, the Board of PTSG has constituted a committee comprised of the Independent Directors of PTSG for the purposes of evaluating and recommending the Acquisition. Neither Paul Teasdale nor Roger Teasdale has participated in the appraisal of the Acquisition by the Independent Directors of PTSG or the decision of the Independent Directors of PTSG to recommend the Acquisition to PTSG Shareholders.
· The Independent Directors of PTSG, who have been so advised by KPMG as to the financial terms of the Acquisition, unanimously consider the terms of the Acquisition to be fair and reasonable. In providing its advice to the Independent Directors, KPMG has taken into account the commercial assessments of the Independent Directors. KPMG is providing independent financial advice to the Independent Directors of PTSG for the purposes of Rule 3 of the Takeover Code.
· Accordingly, the Independent Directors intend to recommend unanimously that PTSG Shareholders approve the Scheme at the Court Meeting and vote in favour of the PTSG Resolutions at the General Meeting and, in the case of John Foley and Mark Watford (the only Independent Directors that hold PTSG Shares), have irrevocably undertaken to do so in respect of their own beneficial holdings totalling in aggregate 18,561,483 PTSG Shares, representing approximately 14.7 per cent. of the issued share capital of PTSG (and representing approximately 19.1 per cent. of the PTSG Shares eligible to vote at the Court Meeting) as at the Latest Practicable Date.
Reinvestment Arrangements and MIP
· In view of Paul Teasdale and Roger Teasdale's extensive experience in the PTSG Group's business and track record of driving growth and profitability at PTSG, the board of Bidco believes that the ongoing participation of these individuals in the business after the Effective Date is an important element of the Acquisition. Paul Teasdale and Roger Teasdale will continue as Chief Executive Officer and Managing Director respectively following completion of the Acquisition.
· Pursuant to the Reinvestment Arrangements:
- Paul Teasdale and Roger Teasdale have agreed to reinvest £16,311,537.40 and £1,805,069.40 respectively in the Bidco Group (from the proceeds of sale at the Acquisition Price of 7,763,702 and 859,148 PTSG Shares beneficially owned by them respectively); and
- certain other senior managers have agreed to invest or (from the proceeds of sale of certain shares in PTSG beneficially owned by them) reinvest in aggregate £1,493,830.40 in the Bidco Group.
· If the Scheme becomes Effective, Bidco intends to put in place the MIP for the senior management of PTSG, including Paul Teasdale, Roger Teasdale and the other senior managers participating in the Reinvestment Arrangements. Other participants in the MIP will be agreed following completion of the Acquisition. Details of the MIP are set out in paragraph 9 of the main body of this Announcement below.
· For the purposes of Rule 16.2 of the Takeover Code, KPMG has confirmed that, in its opinion, the terms of the Reinvestment Arrangements and the MIP are fair and reasonable so far as the Independent Shareholders are concerned. In providing its opinion, KPMG has taken into account the commercial assessments of the Independent Directors.
· Under the Reinvestment Arrangements, each of Paul Teasdale, Roger Teasdale and the other senior managers participating in the Reinvestment Arrangements who hold (or will hold) PTSG Shares have agreed to be bound (or procure that their connected persons who are not entitled to vote on the Scheme are bound) by the terms of the Scheme in respect of all of the PTSG Shares held by them other than those PTSG Shares which are subject to the Reinvestment Arrangements and which are to be acquired by Bidco outside the Scheme. In the case of Paul Teasdale, this is in respect of 11,740,089 PTSG Shares; in the case of Roger Teasdale, this is in respect of 8,430,836 PTSG Shares; and in the case of the other senior managers participating in the Reinvestment Arrangements who hold (or will hold) PTSG Shares, this is in respect of 252,104 PTSG Shares in aggregate. None of these individuals are permitted to vote at the Court Meeting or on the resolution to approve the Reinvestment Arrangements and the MIP that is to be proposed at the General Meeting and they have therefore also committed not to vote on these matters.
· Paul Teasdale and Roger Teasdale have irrevocably undertaken in respect of 19,503,791 and 9,289,984 PTSG Shares respectively (being their entire beneficial holding of PTSG Shares) to vote in favour of the special resolution to approve all actions necessary for carrying the Scheme into effect and the adoption of the Amended PTSG Articles to be proposed at the General Meeting (which they are permitted to vote on). They have also irrevocably undertaken in respect of 11,740,089 and 8,430,836 PTSG Shares respectively (being all of the PTSG Shares held by them other than those PTSG Shares which are subject to the Reinvestment Arrangements) that in the event the Acquisition is effected by way of a Takeover Offer, they will assent such PTSG Shares to such Takeover Offer in accordance with the procedure set out in the relevant offer document containing such Takeover Offer.
Irrevocable undertakings and letter of intent
· In addition to the irrevocable undertakings given by the Independent Directors, Paul Teasdale and Roger Teasdale as referred to above, Bidco has received irrevocable undertakings to vote in favour of the Scheme at the Court Meeting, and in favour of the PTSG Resolutions to be proposed at the General Meeting, from Hawk Investment Holdings Limited and First Pacific Advisors LP in respect of, in aggregate, 24,226,100 PTSG Shares representing approximately 19.19 per cent. of PTSG's issued share capital (and approximately 24.92 per cent of the PTSG Shares eligible to vote at the Court Meeting) as at the Latest Practicable Date.
· Bidco has also received a non-binding letter of intent from Amati Global Investors Limited in its capacity as appointed investment manager of Amati AIM VCT plc and TB Amati UK Smaller Companies Fund to vote in favour of the Scheme at the Court Meeting and in favour of the PTSG Resolutions to be proposed at the General Meeting in respect of 4,058,299 PTSG Shares representing approximately 3.21 per cent. of PTSG's issued share capital (and approximately 4.17 per cent of the PTSG Shares eligible to vote at the Court Meeting) as at the Latest Practicable Date.
· Bidco has therefore received commitments from Paul Teasdale and Roger Teasdale and irrevocable undertakings and a letter of intent from other PTSG Shareholders in respect of a total number of 75,639,657 PTSG Shares representing, in aggregate, approximately 59.90 per cent. of PTSG's issued share capital (and approximately 48.18 per cent of the PTSG Shares eligible to vote at the Court Meeting) as at the Latest Practicable Date.
· Further details of the irrevocable undertakings and the letter of intent given to Bidco (and the circumstances in which such arrangements will cease to be binding or otherwise fall away) are set out in Appendix 3.
Information on Bidco, Macquarie Group and PTSG
· Bidco is a wholly-owned indirect subsidiary of Macquarie Group Limited, established by Macquarie Principal Finance Pty Limited, UK branch for the purpose of making the Acquisition.
· Macquarie Group is a diversified international provider of specialist investment banking and financial services. Headquartered in Sydney Australia, Macquarie Group now generates more than 60% of its total income from regions outside of its home market, with over 15,700 employees in 25 countries globally.
· Macquarie Group opened its London headquarters 30 years ago in 1989, which was the first office outside of Australia. Today Macquarie Group is one of the largest infrastructure investors in the UK, serving primary corporate and institutional clients and holding market-leading positions across infrastructure project advisory, asset management and commodities trading - with around 1,800 members of staff based in its London, Reading and Edinburgh offices.
· Macquarie Group Limited, the ultimate parent undertaking of Macquarie Group has been listed on the Australian Securities Exchange since 1996 and has a current market capitalisation in excess of A$40 billion. Macquarie Group Limited is rated A- by Fitch and A3 (long term) by Moody's.
· As at 31 March 2019, the Macquarie Group manages approximately £305.8 billion of assets around the world, invested across a variety of sectors.
· Macquarie Principal Finance Pty Limited operates within the Corporate and Asset Finance division of Macquarie Group and is Macquarie Group's principal balance sheet investment platform employing over 70 investment professionals globally. Since inception in 2009, Macquarie Principal Finance Pty Limited has deployed A$38 billion globally across a variety of sectors.
· PTSG, headquartered in West Yorkshire, was founded in 2007 with the objective of building the UK's leading provider of tech-enabled specialist testing and compliance services through a combination of acquisitions and organic growth.
· The Group has four divisions Access & Safety, Electrical Services, Building Access Specialists and Fire Solutions and has over 1,200 employees serving over 20,000 customers across over 180,000 assets.
· In February 2015 the Company floated on the AIM market at an issue price of 52 pence per share. The proceeds of the flotation were used to support strong organic and inorganic growth, with the PTSG Group having made a further 15 acquisitions since that date, diversifying and strengthening its service offering by acquiring transformative and key market players in its chosen sub sectors.
· The Company has continued to experience strong growth, generating 31 per cent. annual revenue growth to £69.1 million in the financial year ended 31 December 2018, of which 19 per cent. was attributable to organic growth. The Company benefits from high-margin recurring testing and compliance revenue streams, at 62 per cent. gross profit contribution in the year ended 31 December 2018, and a customer retention rate in excess of 88 per cent. over the same period.
Dividends
· If any dividend or other distribution is authorised, declared, made or paid in respect of PTSG Shares on or after the date of this Announcement and before the Effective Date, other than the Final Dividend (which PTSG Shareholders shall be entitled to retain), Bidco reserves the right to reduce the Acquisition Price by an amount up to the amount of such dividend or other distribution, in which case eligible PTSG Shareholders will be entitled to receive or retain such dividend or other distribution.
Timetable and Conditions
· It is intended that the Acquisition will be implemented by way of a court-sanctioned scheme of arrangement under Part 26 of the Companies Act 2006. However, Bidco reserves the right to elect to implement the Acquisition by way of a Takeover Offer, subject to the Panel's consent.
· The cash consideration payable by Bidco to PTSG Shareholders pursuant to the Acquisition will be financed by a combination of equity financing to be provided by the Macquarie Group pursuant to the Share Subscription Agreement and debt financing to be provided under the Senior Facilities Agreement.
· The Acquisition will be put to PTSG Shareholders at the Court Meeting and at the General Meeting. In order to become Effective, the Scheme must be approved by a majority in number of the Independent Shareholders voting at the Court Meeting, either in person or by proxy, representing at least 75 per cent. in value of the Scheme Shares voted by such Independent Shareholders. In addition, at the General Meeting to implement the Scheme: (i) a special resolution to approve all actions necessary for carrying the Scheme into effect and the adoption of the Amended PTSG Articles must be passed by PTSG Shareholders representing at least 75 per cent. of the votes cast on that resolution; and (ii) an ordinary resolution to approve the Reinvestment Arrangements and the MIP must be passed (on a poll) by Independent Shareholders representing a simple majority of the votes cast on that resolution.
· As a result of the Reinvestment Arrangements and their interest in the MIP, Paul Teasdale, Roger Teasdale and the other senior managers participating in the Reinvestment Arrangements are not entitled to vote their PTSG Shares at the Court Meeting or on the resolution to approve the Reinvestment Arrangements and the MIP at the General Meeting. All of these individuals are however entitled to vote their PTSG Shares on the special resolution to approve all actions necessary for carrying the Scheme into effect and the adoption of the Amended PTSG Articles to be proposed at the General Meeting.
· The Acquisition will be made in accordance with the Takeover Code and on the terms and subject to the Conditions which are set out in Appendix 1 to this Announcement and on the further terms and conditions that will be set out in the Scheme Document.
· It is expected that the Scheme Document, containing further information about the Acquisition and notices of the Court Meeting and the General Meeting, together with the Forms of Proxy will be published as soon as practicable and, in any event, within 28 days of this Announcement, unless PTSG and Bidco otherwise agree, and the Panel consents, to a later date. It is expected that the Scheme will become Effective by the end of July 2019, subject to the satisfaction of the Conditions and the further terms set out in Appendix 1 to this Announcement.
Commenting on the Acquisition, John Foley, Chairman of PTSG, said:
"PTSG undertook an IPO in February 2015 with a clear plan to grow both organically and through carefully selected acquisitions. Between the financial year ended 31 December 2015 and the last financial year ended 31 December 2018, reported revenue and adjusted EBITDA have grown at an average annual rate of 39 per cent. and 40 per cent. respectively. PTSG continues to have a significant pipeline of carefully identified acquisition opportunities which it would like to execute to confirm a strong position in the chosen niche specialist testing and compliance sectors in which it operates.
Against the backdrop of an increasingly competitive market for acquisitions, with a need to close deals quickly and fund them effectively, I believe that Macquarie's deep access to funding will better position PTSG to continue with its acquisitive growth strategy. The Acquisition represents a 304 per cent. premium to PTSG shareholders who invested upon flotation in 2015, and a 141.5 per cent. premium to the most recent closing share price. The Independent Directors are recommending that PTSG shareholders vote in favour of the Acquisition."
Commenting on the Acquisition, Adam Joseph, Senior Managing Director, Macquarie Principal Finance Europe, said:
"We are pleased that the Independent Directors of PTSG are recommending this takeover offer. We view PTSG as a highly attractive leader in its chosen specialist markets, with a strong track record of performance and reputation for quality, value and safety. Health and safety is an increasingly key focus for businesses and PTSG's expertise means it will continue to play a critical role in providing safe working environments which comply with regulations and other requirements. We see a strong opportunity to partner with the management team in continuing to grow the business in core and adjacent markets, both organically and via strategic acquisitions, which is why we have made this compelling offer to shareholders at an attractive premium."
Advisers
KPMG is acting as lead financial adviser to PTSG in respect of the Acquisition. Pinsent Masons LLP is acting as legal adviser to PTSG. Numis is acting as financial adviser, nominated adviser and broker to PTSG.
Rothschild & Co is acting as financial adviser to Bidco in respect of the Acquisition. Travers Smith LLP is acting as legal adviser to Bidco.
This summary should be read in conjunction with, and is subject to, the full text of this Announcement and its Appendices. The Acquisition will be subject to the Conditions and further terms set out in Appendix 1 to this Announcement and to the full terms and conditions which will be set out in the Scheme Document. Appendix 2 to this Announcement contains the sources of information and bases of calculations of certain information contained in this Announcement. Appendix 3 contains a summary of the irrevocable undertakings and the letter of intent received in relation to the Acquisition. Appendix 4 contains definitions of certain expressions used in this summary and in this Announcement.
This announcement is being made on behalf of PTSG by Adam Coates, Company Secretary of PTSG.
Enquiries:
Bidco/Macquarie Group Tel: + 44 (0) 20 3037 2000
Victoria Webb
Rothschild & Co (Financial adviser to Bidco) Tel: + 44 (0) 207 280 5000Stuart Vincent
Robert Dunnett
Alistair Allen
Premier Technical Services Group plc Tel: + 44 (0) 1977 668 771
Paul Teasdale, Chief Executive Officer
KPMG LLP (Lead financial adviser to PTSG) Tel: + 44 (0)207 311 1000
Manuel Sammut
Helen Roxburgh
Giles Taylor
Numis Securities Limited (Financial adviser, Tel: + 44 (0) 207 260 1000
nominated adviser and broker to PTSG)
Stuart Skinner
Kevin Cruickshank
Michael Burke
Hudson Sandler (Public relations adviser to PTSG) Tel: + 44 (0) 207 796 4133
Charlie Jack
Important notices
Rothschild & Co, which is authorised and regulated in the United Kingdom by the FCA, is acting exclusively as financial adviser to Bidco and no one else in connection with the Acquisition or any matters referred to in in this Announcement. In connection with such matters, Rothschild & Co, its affiliates and its or their respective directors, officers, employees and agents will not regard any other person as their client, nor will they be responsible to anyone other than Bidco for providing the protections afforded to their clients or for providing advice in relation to the Acquisition, the contents of this Announcement or any other matter referred to in this Announcement or owe or accept any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise to any person other than Bidco in connection with the matters referred to in this Announcement, or otherwise.
KPMG, which is authorised and regulated in the United Kingdom by the FCA, is acting exclusively as lead financial adviser to PTSG and for no one else in connection with the Acquisition or any matters referred to in this Announcement and will not be responsible to anyone other than PTSG for providing the protections afforded to its clients nor for providing advice in relation to the Acquisition, the contents of this Announcement or any other matters referred to in this Announcement. Neither KPMG nor any of its affiliates, respective directors, officers, employees and agents owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of KPMG in connection with the matters referred to in this Announcement, or otherwise.
Numis Securities Limited ("Numis"), which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting as financial adviser, nominated adviser and broker exclusively for PTSG and no one else in connection with the matters set out in this announcement and will not regard any other person as its client in relation to the matters in this announcement and will not be responsible to anyone other than PTSG for providing the protections afforded to clients of Numis, nor for providing advice in relation to any matter referred to herein.
This Announcement is for information purposes only and is not intended to and does not constitute, or form part of, an offer to sell or an invitation to purchase any securities or a solicitation of an offer to buy, otherwise acquire, subscribe for, sell or otherwise dispose of any securities pursuant to the Acquisition or otherwise, nor shall there be any purchase, sale, issuance or exchange of securities or such solicitation in any jurisdiction in which such offer, invitation, solicitation, purchase, sale, issuance or exchange is unlawful. The Acquisition will be made solely by means of the Scheme Document (or, if applicable, the offer document containing any Takeover Offer) and the accompanying Forms of Proxy, which will contain the full terms and conditions of the Acquisition, including details of how to vote in respect of the resolutions proposed in connection with the Acquisition. Any approval, decision in respect of, or other response to, the Acquisition should be made only on the basis of the information contained in the Scheme Document (or, if applicable, the offer document containing any Takeover Offer).
This Announcement has been prepared in connection with proposals in relation to a scheme of arrangement pursuant to and for the purpose of complying with English law, the Takeover Code and the AIM Rules and information disclosed may not be the same as that which would have been disclosed if this Announcement had been prepared in accordance with the laws of jurisdictions outside the United Kingdom. Nothing in this Announcement should be relied on for any other purpose.
The statements contained in this Announcement are made as at the date of this Announcement, unless some other time is specified in relation to them, and the release of this Announcement shall not give rise to any implication that there has been no change in the facts set out in this Announcement since such date.
PTSG and Bidco urge PTSG Shareholders to read the Scheme Document when it becomes available because it will contain important information relating to the Acquisition.
Overseas jurisdictions
The release, publication or distribution of this Announcement in jurisdictions other than the United Kingdom may be restricted by the laws and/or regulations of those jurisdictions and therefore persons into whose possession this Announcement comes who are subject to the laws and/or regulations of any jurisdiction other than the United Kingdom should inform themselves about and observe any such applicable restrictions in their jurisdiction. In particular, the ability of persons who are not resident in the United Kingdom to vote their PTSG Shares with respect to the Scheme at the Court Meeting, or to appoint another person as proxy to vote at the Court Meeting on their behalf, may be affected by the laws of the relevant jurisdiction in which they are located. Further details in relation to the Overseas Shareholders will be contained in the Scheme Document. Any failure to comply with any such restrictions may constitute a violation of the securities laws of any such jurisdiction. To the fullest extent permitted by applicable law, the companies and persons involved in the Acquisition disclaim any responsibility or liability for the violation of such restrictions by any person.
Unless otherwise determined by Bidco or required by the Takeover Code, and permitted by applicable law and regulation, the Acquisition will not be made available, directly or indirectly, in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction and no person may vote in favour of the Scheme by any such means from within a Restricted Jurisdiction or any other jurisdiction if to do so would constitute a violation of the laws of that jurisdiction. Accordingly, copies of this Announcement and all documents relating to the Acquisition are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction, and persons receiving this Announcement and all documents relating to the Acquisition (including custodians, nominees and trustees) must not mail or otherwise distribute or send them in, into or from such jurisdictions where to do so would violate the laws in that jurisdiction. If the Acquisition is implemented by Takeover Offer (unless otherwise permitted by applicable law or regulation), the Takeover Offer may not be made, directly or indirectly, in or into or by use of the mails or any other means or instrumentality (including, without limitation, facsimile, email or other electronic transmission, telex or telephone) of interstate or foreign commerce of, or any facility of a national state or other securities exchange of any Restricted Jurisdiction) and the Takeover Offer will not be capable of acceptance by any such use, means instrumentality or facilities or from or within any Restricted Jurisdiction.
The availability of the Acquisition to PTSG Shareholders who are not resident in the United Kingdom may be affected by the laws of the relevant jurisdictions in which they are resident. Persons who are not resident in the United Kingdom should inform themselves of, and observe, any applicable requirements.
Further details in relation to Overseas Shareholders will be contained in the Scheme Document.
Additional information for US investors
PTSG Shareholders in the United States should note that the Acquisition relates to the securities of a company incorporated in England and is proposed to be effected by means of a scheme of arrangement under the laws of England and Wales. This Announcement, the Scheme Document and certain other documents relating to the Acquisition have been or will be prepared in accordance with English law, the Takeover Code and UK disclosure requirements, format and style, all of which differ from those in the United States. A transaction effected by means of a scheme of arrangement is not subject to the tender offer rules or the proxy solicitation rules under the US Exchange Act. Accordingly, the Acquisition is subject to the disclosure requirements of and practices applicable in the United Kingdom to schemes of arrangement, which differ from the disclosure requirements of the United States tender offer and proxy solicitation rules. If, in the future, Bidco exercises the right to implement the Acquisition by way of a Takeover Offer and determines to extend the offer into the United States, the Acquisition will be made in compliance with applicable United States laws and regulations, including any applicable exemptions under the US Exchange Act.
PTSG's financial statements, and all financial information that is included in this Announcement or that may be included in the Scheme Document, or any other documents relating to the Acquisition, have been or will be prepared in accordance with IFRS and may not be comparable to financial statements of companies in the United States or other companies whose financial statements are prepared in accordance with US generally accepted accounting principles.
The receipt of cash pursuant to the Acquisition by a US holder as consideration for the transfer of its PTSG Shares pursuant to the Scheme will likely be a taxable transaction for United States federal income tax purposes and under applicable United States state and local, as well as foreign and other, tax laws. Each PTSG Shareholder is urged to consult his independent professional adviser immediately regarding the tax consequences of the Acquisition applicable to him.
It may be difficult for US holders to enforce their rights and claims arising out of US federal securities laws, since Bidco and PTSG are located in countries other than the US, and some or all of their officers and directors may be residents of countries other than the US. US holders may not be able to sue a non-US company or its officers or directors in a non-US court for violations of US securities laws. Further, it may be difficult to compel a non-US company and its affiliates to subject themselves to a US court's judgement.
In accordance with normal practice in the UK and consistent with Rule 14e-5(b) of the US Exchange Act, Bidco, certain affiliated companies and their nominees or brokers (acting as agents) may make certain purchases of, or arrangements to purchase, shares in PTSG outside the US, other than pursuant to the Acquisition, until the date on which the Acquisition and/or Scheme becomes Effective, lapses or is otherwise withdrawn. If such purchases or arrangements to purchase were to be made they would occur either in the open market at prevailing prices or in private transactions at negotiated prices and comply with applicable law, including the US Exchange Act. Any information about such purchases or arrangements to purchase will be disclosed as required in the United Kingdom, will be reported to a Regulatory Information Service and will be available on the London Stock Exchange website at www.londonstockexchange.com.
Forward-looking statements
This Announcement (including information incorporated by reference in this Announcement), oral statements made regarding the Acquisition, and other information published by Bidco, Macquarie Group or PTSG contain statements about Bidco, Macquarie Group and/or PTSG that are or may be deemed to be forward-looking statements. All statements other than statements of historical facts included in this Announcement may be forward-looking statements. Without limitation, any statements preceded or followed by or that include the words "targets", "plans", "believes", "expects", "aims", "intends", "will", "may", "anticipates", "estimates", "hopes" "projects", "continue", "schedule" or words or terms of similar substance or the negative thereof, are forward-looking statements. Forward-looking statements include statements relating to the following: (i) future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects; (ii) business and management strategies and the expansion and growth of Bidco's, Macquarie Group's or PTSG's operations and potential synergies resulting from the Acquisition; and (iii) the effects of government regulation on Bidco's, Macquarie Group's or PTSG's business.
These forward-looking statements are not guarantees of future performance. By their nature, such forward-looking statements involve known and unknown risks and uncertainties that could significantly affect expected results and are based on certain key assumptions. Many factors could cause actual results to differ materially from those projected or implied in any forward-looking statements. Many of these risks and uncertainties relate to factors that are beyond the entities' ability to control or estimate precisely. These factors include, but are not limited to, the satisfaction of the conditions to the Acquisition, as well as additional factors, such as changes in political and economic conditions, changes in the level of capital investment, retention of key employees, changes in customer habits, success of business and operating initiatives and restructuring objectives, impact of any acquisitions or similar transactions, changes in customers' strategies and stability, competitive product and pricing measures, changes in the regulatory environment, fluctuations of interest and exchange rates, the outcome of any litigation. For a discussion of important factors which could cause actual results to differ from forward-looking statements in relation to the PTSG Group, refer to the annual report for PTSG for the financial year ended 31 December 2018. Neither Bidco, Macquarie Group or PTSG, nor any of their respective associates or directors, officers or advisers, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this Announcement will actually occur. Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date of this Announcement. All subsequent oral or written forward-looking statements attributable to Bidco, Macquarie Group or PTSG or any of their respective members, directors, officers or employees or any persons acting on their behalf are expressly qualified in their entirety by the cautionary statement above. Bidco, Macquarie Group and PTSG disclaim any obligation to update any forward-looking or other statements contained in this Announcement, except as required by applicable law.
No profit forecasts or estimates
No statement in this Announcement is intended as a profit forecast or estimate for any period and no statement in this Announcement should be interpreted to mean that earnings or earnings per share for PTSG for the current or future financial years would necessarily match or exceed the historical published earnings or earnings per share for PTSG.
Disclosure requirements of the Takeover Code (the "Code")
Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s), save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.
If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).
Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.
Right to switch to a Takeover Offer
Bidco reserves the right to elect, with the consent of the Panel, to implement the Acquisition by way of a Takeover Offer for the entire issued and to be issued share capital of PTSG as an alternative to the Scheme. In such an event, the Takeover Offer will be implemented on the same terms or, if Bidco so decides, on such other terms being no less favourable (subject to appropriate amendments), so far as applicable, as those which would apply to the Scheme and subject to the amendment referred to in Part B of Appendix 1 to this Announcement.
Publication of this Announcement on website
A copy of this Announcement and the documents required to be published pursuant to Rules 26.1 and 26.2 of the Takeover Code will be available, free of charge, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, on PTSG's website at www.ptsg.co.uk/offer-for-ptsg/ and on Bidco's website at www.macquarie.com/uk/about/investors/graphite by no later than 12:00 p.m. on the Business Day following this Announcement.
For the avoidance of doubt, the contents of this website and any websites accessible from hyperlinks on this website are not incorporated into and do not form part of this Announcement.
Information relating to PTSG Shareholders
Please be aware that addresses, electronic addresses and certain information provided by PTSG Shareholders, persons with information rights and other relevant persons for the receipt of communications from PTSG may be provided to Bidco during the Offer Period as required under Section 4 of Appendix 4 of the Takeover Code to comply with Rule 2.11(c) of the Takeover Code.
Right to receive documents in hard copy form
Any person entitled to receive a copy of documents, announcements and information relating to the Acquisition is entitled to receive such documents in hard copy form free of charge. A person may also request that all future documents, announcements and information in relation to the Acquisition are sent to them in hard copy form. Hard copies of such documents, announcements (including this Announcement), and information will not be sent unless requested.
A hard copy of this Announcement may be requested by contacting Link Market Services Ltd on 0871 664 0300, calls cost 12p per minute plus your phone company's access charge. If you are outside the United Kingdom, please call +44 371 664 0300. Calls outside the United Kingdom will be charged at the applicable international rate. Lines are open between 9.00 am - 5.30 pm, Monday to Friday excluding public holidays in England and Wales.
Rounding
Certain figures included in this Announcement have been subjected to rounding adjustments. Accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them.
Rule 2.9
For the purposes of Rule 2.9 of the Takeover Code, PTSG confirms that, as at the Latest Practicable Date, it had in issue 126,266,615 ordinary shares of 0.01 each. The International Securities Identification Number ("ISIN") number of the ordinary shares is GB00BV9FPW93.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) NO.596/2014
FOR IMMEDIATE RELEASE
20 June 2019
RECOMMENDED CASH ACQUISITIONOFPremier Technical Services Group PLC ("PTSG")BYbERNARD bIDCO LIMITED ("BIDCO")a newly-incorporated company established on behalf of Macquarie Principal Finance Pty Limited, UK branch as a wholly-owned subsidiary of Macquarie Group Limited
to be implemented by means of a Court-sanctioned scheme of arrangementunder Part 26 of the Companies Act 2006
1. Introduction
The board of Bidco and the Independent Directors of PTSG are pleased to announce that they have reached agreement on the terms of a recommended all cash offer pursuant to which Bidco, a newly-incorporated company established on behalf of Macquarie Principal Finance Pty Limited, UK branch and a wholly-owned subsidiary of Macquarie Group Limited, will acquire the entire issued and to be issued share capital of PTSG (the "Acquisition"). The Acquisition is intended to be implemented by means of a Court-sanctioned scheme of arrangement between PTSG and the PTSG Shareholders under Part 26 of the Companies Act 2006.
2. The Acquisition
Acquisition Price
Under the terms of the Acquisition, which will be subject to the Conditions and further terms set out in Appendix 1 to this Announcement and to be set out in the Scheme Document, PTSG Shareholders will be entitled to receive:
210.1 pence in cash for each PTSG Share held (the "Acquisition Price")
The Acquisition Price reflects the fact that PTSG Shareholders will be entitled to receive and retain the Final Dividend of 0.9 pence per PTSG Share approved by PTSG Shareholders at the Annual General Meeting held on 17 June 2019 and which is payable on 19 July 2019 to PTSG Shareholders who are on the register of members of PTSG at close of business on 28 June 2019.
The Acquisition values the entire issued and to be issued ordinary share capital of PTSG (excluding the E Ordinary Shares to be acquired by Bidco as described in paragraph 11 below) at approximately £265.3 million on a fully diluted basis. The Acquisition Price of 210.1 pence for each PTSG Share represents a premium of approximately:
· 141.5 per cent. to the Closing Price of 87 pence per PTSG Share on 19 June 2019 being the last Business Day before the date of this Announcement (the "Latest Practicable Date");
· 72.2 per cent. to the volume weighted average price of 122 pence per PTSG Share for the 12 month period ended on the Latest Practicable Date;
· 304.0 per cent. to the price of 52 pence per PTSG Share at which PTSG Shares were issued upon its admission to AIM in February 2015;
· 33.4 per cent. to the price of 157.5 pence per PTSG Share at which PTSG Shares were issued upon its last placing in October 2018; and
· 59.2 per cent. to the Closing Price of 132 pence per PTSG Share on 26 March 2019, being the date on which PTSG released its final results for the year ended 31 December 2018.
Dividends
If any dividend or other distribution is authorised, declared, made or paid in respect of PTSG Shares on or after the date of this Announcement and before the Effective Date, other than the Final Dividend (which PTSG Shareholders shall be entitled to retain), Bidco reserves the right to reduce the Acquisition Price by an amount up to the amount of such dividend or other distribution, in which case eligible PTSG Shareholders will be entitled to receive or retain such dividend or other distribution.
Expected Timetable
It is expected that the Scheme Document will be published as soon as practicable and, in any event, within 28 days of this Announcement, unless PTSG and Bidco otherwise agree, and the Panel consents, to a later date. It is expected that the Court Meeting and the General Meeting will be held in July 2019 and that, subject to the satisfaction of the Conditions and the further terms set out in Appendix 1 to this Announcement, the Scheme is expected to become Effective by the end of July 2019.
3. Background to and reasons for the Acquisition
Bidco believes that PTSG has a number of highly attractive investment characteristics:
· Leading market positions in its chosen specialist niches within the UK support services sector;
· Diversified and highly visible revenue streams, with a reputation for strong customer service which is borne out by robust renewal and retention rates;
· Strong financial and operational performance led by a highly experienced management team;
· A reputation for quality, value and safety, delivered through PTSG's large base of skilled engineers and supported by its proprietary technology platform, Clarity;
· Organic growth opportunities presented by expansion of PTSG's existing service lines and increased cross-selling across a diverse portfolio of over 20,000 customers; and
· Track record of successfully supplementing organic growth with strategic acquisitions.
The Macquarie Group and funds managed by the Macquarie Group have significant experience of supporting growing, entrepreneur-led support service businesses where investment in the platform combined with the potential to deploy additional follow on capital can drive growth further.
Bidco believes that, under private ownership and with Macquarie Group's support and expertise, PTSG would be better able to capitalise on additional growth and investment opportunities available in its core markets. Bidco believes that it is ideally placed to assist PTSG in executing its growth strategy under private ownership.
4. Recommendation from the Independent Directors
Certain PTSG Directors, namely Paul Teasdale and Roger Teasdale, Chief Executive Officer and Managing Director of PTSG respectively, have agreed to reinvest the proceeds from the sale of a proportion of their PTSG Shares to Bidco at the Acquisition Price in the Bidco Group (the "Reinvestment Arrangements"). Paul Teasdale and Roger Teasdale will also participate in a new management incentivisation plan (the "MIP") which Bidco intends to put in place after completion of the Acquisition. The Board of PTSG has therefore constituted a committee comprised of the Independent Directors of PTSG for the purposes of evaluating and recommending the Acquisition. Neither Paul Teasdale nor Roger Teasdale has participated in the appraisal of the Acquisition by the Independent Directors of PTSG or the decision of the Independent Directors of PTSG to recommend the Acquisition to PTSG Shareholders.
The Independent Directors of PTSG, who have been so advised by KPMG as to the financial terms of the Acquisition, consider the terms of the Acquisition to be fair and reasonable. In providing its advice to the Independent Directors, KPMG has taken into account the commercial assessments of the Independent Directors. KPMG is providing independent financial advice to the Independent Directors for the purposes of Rule 3 of the Takeover Code.
Accordingly, the Independent Directors of PTSG intend to recommend unanimously that PTSG Shareholders approve the Scheme at the Court Meeting and vote in favour of the PTSG Resolutions at the General Meeting as John Foley and Mark Watford (the only Independent Directors that hold PTSG Shares) have irrevocably undertaken to do in respect of their own beneficial holdings totalling in aggregate 18,561,483 PTSG Shares, representing approximately 14.7 per cent. of the issued share capital of PTSG (and approximately 19.1 per cent. of the PTSG Shares eligible to vote at the Court Meeting) as at the Latest Practicable Date.
5. Background to and reasons for the recommendation from the Independent Directors
PTSG was founded in 2007 with the aim of becoming the UK's leading provider of niche specialist services in its chosen markets. Initially the PTSG Group focused on its position within the Access and Safety markets, but its founders believed that its operating model was capable of expansion into other markets. The PTSG Group's operating model has, over the years, remained virtually unchanged. It produces efficient results, measured both in terms of high customer and contract retention rates, as well as significant gross and net margins as a direct result of the efficiencies created by its operating model. However, the provision of PTSG's services has now been augmented by its proprietary IT software including its internally developed operating system, Clarity. This has allowed PTSG to effectively increase and manage the size and scale of its operations and, in the Independent Directors' opinion, allowed it to become a leading provider of tech-enabled specialist testing and compliance services in its chosen sub sectors.
The PTSG Group initially sought to consolidate what were then widely fragmented sections of identified niche specialist services sub sectors to its construction, property management and facilities management customer base. It sought growth by making carefully selected acquisitions coupled with the organic growth resulting from the operation of its efficient operating model to a wider customer base. Prior to its IPO in February 2015, the PTSG Group had made 12 relatively small acquisitions to expand its service offering - acquisitions and organic growth were funded through its own cash flow and conservatively managed levels of bank debt. Since its IPO at a share price of 52 pence, PTSG has grown very strongly with revenue increasing at an average annual rate of 39 per cent. from £25.8 million in the financial year ended 31 December 2015 to £69.1 million in the financial year ended 31 December 2018, and with EBITDA growing at an average annual rate of 40 per cent., from £6.2 million to £17.1 million, over the same period.
Once admitted to the public markets, PTSG used its status to undertake larger acquisitions with a view to making transformational moves in order to strengthen its market position in the sectors in which it operated. PTSG occupies a position amongst the market leaders in the four clearly identified market sectors in which it operates. More recent acquisitions have been specifically aimed at increasing the size and scale of PTSG's testing and repair activities.
Since the date of PTSG's IPO, the marketplace for acquisitions has become increasingly competitive. PTSG has created a single entity which is capable of effectively delivering a wide range of specialist services to its chosen customer base. PTSG continues to have a very strong pipeline of carefully selected acquisition opportunities. The need to execute and fund transactions in a timely and efficient manner has become increasingly more important and this is the key benefit offered by Bidco to PTSG through the Acquisition. The ability to accelerate PTSG's strategic acquisition plans will further cement its current first mover advantage position.
It is the unanimous view of PTSG's Independent Directors that the Acquisition provides an opportunity for PTSG Shareholders to realise compelling value in cash today, rather than funding growth plans for the Company now and waiting to realise the value of the investment.
The Acquisition Price, which the Independent Directors believe will be attractive to PTSG Shareholders, represents a premium of approximately:
· 141.5 per cent. to the Closing Price of 87 pence per PTSG Share on the Latest Practicable Date;
· 72.2 per cent. to the volume weighted average price of 122 pence per PTSG Share for the 12 month period ended on the Latest Practicable Date;
· 304.0 per cent. to the price of 52 pence per PTSG Share at which PTSG Shares were issued upon its admission to AIM in February 2015;
· 33.4 per cent. to the price of 157.5 pence per PTSG Share at which PTSG Shares were issued upon its last placing in October 2018; and
· 59.2 per cent. to the Closing Price of 132 pence per PTSG Share on 26 March 2019, being the date on which PTSG released its final results for the year ended 31 December 2018.
The Independent Directors believe that the Offer reflects a full value for the current business and also a fair price for a properly funded acquirer which has the ability to expand and fund the PTSG Group's clearly identified acquisition and growth plans. The Acquisition represents a price in excess of the highest Closing Price which shares in PTSG have achieved since its IPO in 2015. Accordingly, the Independent Directors believe that PTSG Shareholders should have the opportunity to realise their investment in PTSG on the terms proposed by Bidco.
In addition, the Independent Directors have taken into account the fact that Bidco has received support from certain PTSG Shareholders, together with the support of the Independent Directors of PTSG, with aggregate irrevocable undertakings, excluding those given by Paul Teasdale and Roger Teasdale, received in respect of 42,787,583 PTSG Shares representing approximately 33.88 per cent. of the existing issued share capital of PTSG (representing approximately 44.01 per cent. of the PTSG Shares eligible to vote at the Court Meeting) on the Latest Practicable Date.
The Independent Directors have given due consideration to Bidco's strategic objectives and welcome Bidco's stated intentions concerning the PTSG management and employees, locations of business and strategic plans. In particular, the Independent Directors are pleased that Bidco does not intend to initiate any headcount reductions within the PTSG Group as a result of the Acquisition. The Independent Directors also welcome Bidco's confirmation that, following completion of the Acquisition, the existing contractual and statutory employment rights of all PTSG Group management and employees will be fully safeguarded in accordance with applicable law. The Independent Directors welcome Bidco's confirmation that it does not intend to make any reduction to the level of employer contributions into PTSG's pension schemes. The Independent Directors further welcome the confirmation that Bidco has no intention to make any changes to PTSG's headquarters and headquarters' functions.
Neither Paul Teasdale nor Roger Teasdale has participated in the appraisal of the Acquisition by the Independent Directors of PTSG nor the decision of the Independent Directors to recommend the Acquisition to PTSG Shareholders, as a result of the conflict of interests arising from their participation in the Reinvestment Arrangements and the MIP, which are described more fully below.
The same conflict of interests preclude Paul Teasdale and Roger Teasdale from voting on the resolution to approve the Scheme at the Court Meeting and the resolution to approve the Reinvestment Arrangements and the MIP at the General Meeting, although they will be entitled to vote on the special resolution to approve all matters necessary to give effect to the Scheme and the adoption of the Amended PTSG Articles.
6. Irrevocable undertakings and letter of intent
Bidco has received irrevocable undertakings from John Foley and Mark Watford, the only Independent Directors that hold PTSG Shares, as described in paragraph 4 above in respect of a total of 18,561,483 PTSG Shares, representing approximately 14.7 per cent. of the issued share capital of PTSG (and approximately 19.1 per cent. of the PTSG Shares eligible to vote at the Court Meeting) as at the Latest Practicable Date.
Under the Reinvestment Arrangements, each of Paul Teasdale, Roger Teasdale and the other senior managers participating in the Reinvestment Arrangements who hold (or will hold) PTSG Shares have agreed to be bound (or procure that their connected persons who are not entitled to vote on the Scheme are bound) by the terms of the Scheme in respect of all of the PTSG Shares held by them other than those PTSG Shares which are subject to the Reinvestment Arrangements and which are to be acquired by Bidco outside the Scheme. In the case of Paul, this is in respect of 11,740,089 PTSG Shares (representing approximately 9.30 per cent. of PTSG's issued share capital as at the Latest Practicable Date); in the case of Roger, 8,430,836 PTSG Shares (representing approximately 6.68 per cent. of PTSG's issued share capital as at the Latest Practicable Date); and in the case of the other senior managers participating in the Reinvestment Arrangements who hold (or will hold) PTSG Shares, 252,104 PTSG Shares in aggregate (representing in aggregate approximately 0.2 per cent. of PTSG's issued share capital as at the Latest Practicable Date). None of these individuals is permitted to vote at the Court Meeting or on the resolution to approve the Reinvestment Arrangements and the MIP that is to be proposed at the General Meeting and they have therefore also committed not to vote on these matters.
Paul Teasdale and Roger Teasdale have irrevocably undertaken in respect of 19,503,791 and 9,289,984 PTSG Shares respectively (being their entire beneficial holding of PTSG Shares representing approximately 15.45 per cent. and 7.36 per cent. respectively of PTSG's issued share capital as at the Latest Practicable Date) to vote in favour of the special resolution to approve all actions necessary for carrying the Scheme into effect and the adoption of the Amended PTSG Articles to be proposed at the General Meeting (which they are permitted to vote on). They have also irrevocably undertaken in respect of 11,740,089 and 8,430,836 PTSG Shares respectively (being all of the PTSG Shares held by them, other than those PTSG Shares which are subject to the Reinvestment Arrangements, representing approximately 9.30 per cent. and 6.68 per cent. respectively of PTSG's issued share capital as at the Latest Practicable Date) that in the event the Acquisition is effected by way of a Takeover Offer, they will assent such PTSG Shares to such Takeover Offer in accordance with the procedure set out in the relevant offer document containing such Takeover Offer.
Bidco has also received irrevocable undertakings to vote in favour of the Scheme at the Court Meeting, and in favour of the PTSG Resolutions to be proposed at the General Meeting, from Hawk Investment Holdings Limited and and First Pacific Advisors LP in respect of, in aggregate, 24,226,100 PTSG Shares representing approximately 19.19 per cent. of PTSG's issued share capital (and approximately 24.92 per cent of the PTSG Shares eligible to vote at the Court Meeting) as at the Latest Practicable Date.
In addition, Bidco has received a non-binding letter of intent from Amati Global Investors Limited in its capacity as appointed investment manager of Amati AIM VCT plc and TB Amati UK Smaller Companies Fund to vote in favour of the Scheme at the Court Meeting and in favour of the PTSG Resolutions to be proposed at the General Meeting in respect of 4,058,299 PTSG Shares representing approximately 3.21 per cent. of PTSG's issued share capital (and approximately 4.17 per cent of the PTSG Shares eligible to vote at the Court Meeting) as at the Latest Practicable Date
Bidco has therefore received commitments from Paul Teasdale and Roger Teasdale and irrevocable undertakings and a letter of intent from other PTSG Shareholders in respect of a total number of 75,639,657 PTSG Shares representing, in aggregate, approximately 59.90 per cent. of PTSG's issued share capital (and approximately 48.18 per cent of the PTSG Shares eligible to vote at the Court Meeting) as at the Latest Practicable Date.
Further details of these irrevocable undertakings and the letter of intent (and the circumstances in which such arrangements will cease to be binding or otherwise fall away) are set out in Appendix 3.
7. Information on Macquarie Group and Bidco
Macquarie Group
Macquarie Group is a diversified international provider of specialist investment banking and financial services. Headquartered in Sydney Australia, Macquarie Group now generates more than 60% of its total income from regions outside of its home market, with over 15,700 employees in 25 countries globally.
Macquarie Group opened its London headquarters 30 years ago in 1989, which was the first office outside of Australia. Today Macquarie Group is one of the largest infrastructure investors in the UK, serving primary corporate and institutional clients and holding market-leading positions across infrastructure project advisory, asset management and commodities trading - with around 1,800 members of staff based in its London, Reading and Edinburgh offices.
Macquarie Group Limited, the ultimate parent undertaking of Macquarie Group has been listed on the Australian Securities Exchange since 1996 and has a current market capitalisation in excess of A$40 billion. Macquarie Group Limited is rated A- by Fitch and A3 (long term) by Moody's.
As at 31 March 2019, the Macquarie Group manages approximately £305.8 billion of assets around the world, invested across a variety of sectors.
Macquarie Principal Finance Pty Limited operates within the Corporate and Asset Finance division of Macquarie Group and is Macquarie Group's principal balance sheet investment platform employing over 70 investment professionals globally. Since inception in 2009, Macquarie Principal Finance Pty Limited has deployed A$38 billion globally across a variety of sectors.
Bidco
Bidco is a newly incorporated private company limited by shares registered in England and Wales and established by Macquarie Principal Finance Pty Limited, UK branch for the purposes of implementing the Acquisition. Bidco is indirectly wholly owned by Macquarie Group Limited. Save for its activities in connection with the making, implementation and financing of the Acquisition, Bidco has not traded prior to the date of this Announcement nor has it entered into any obligation other than in connection with the Acquisition.
8. Information on PTSG
PTSG was founded in 2007 with the objective of building the UK's leading provider of tech-enabled specialist testing and compliance services through a combination of acquisitions and organic growth.
Today the PTSG Group, through its four divisions - Access & Safety, Electrical Services, Building Access Specialists and Fire Solutions - is amongst the leading providers of specialist services to a number of niche markets in the United Kingdom. The Group is headquartered in Castleford, West Yorkshire, with 31 operational bases across the UK, and a distribution centre in Castleford. The PTSG Group has over 1,200 employees, including 800 highly skilled engineers, and serves over 20,000 customers across over 180,000 assets.
In February 2015 the Company floated on the AIM market at 52 pence per share, following year-on-year growth fuelled by an impressive acquisition track record and double-digit organic revenue growth. The proceeds of the flotation were used to further accelerate the growth of the Group and it has made a further 15 acquisitions to date, diversifying and strengthening its service offering by acquiring transformative and key market players in its chosen sub sectors.
The Company has continued to experience strong growth, generating 31 per cent. annual revenue growth to £69.1 million in the financial year ended 31 December 2018, of which 19 per cent. was attributable to organic growth. The Company benefits from high-margin recurring testing and compliance revenue streams, at 62 per cent. gross profit contribution in the year ended 31 December 2018, and a customer retention rate in excess of 88 per cent. over the same period.
9. Reinvestment Arrangements and MIP
In view of Paul Teasdale and Roger Teasdale's extensive experience in the PTSG Group's business and track record of driving growth and profitability at PTSG, the board of Bidco believes that the ongoing participation of these individuals in the business after the Effective Date is an important element of the Acquisition. Paul Teasdale and Roger Teasdale will continue as Chief Executive Officer and Managing Director respectively following completion of the Acquisition.
Reinvestment Arrangements
A summary of the proposed Reinvestment Arrangements is as follows:
· The Share Reinvestment Arrangements comprise: (i) the reinvestment by Paul Teasdale and Roger Teasdale of £16,311,537.40 and £1,805,069.40 respectively from the proceeds of sale at the Acquisition Price of 7,763,702 and 859,148 PTSG Shares respectively held by them pursuant to the terms of the Share Reinvestment Agreement; and (ii) the investment or (from the proceeds of sale of certain shares in PTSG beneficially owned by them) reinvestment by the other senior managers participating in the Reinvestment Arrangements of, in aggregate, £1,493,830.40 in the Bidco Group, in each case for ordinary shares and preference shares in Midco, which is a parent undertaking of Bidco.
· Under the Reinvestment Arrangements, each of Paul Teasdale, Roger Teasdale and the other senior managers participating in the Reinvestment Arrangements who hold (or will hold) PTSG Shares have agreed to be bound (or procure that their connected persons who are not entitled to vote on the Scheme are bound) by the terms of the Scheme in respect of all of the PTSG Shares held by them other than those PTSG Shares which are subject to the Reinvestment Arrangements and which are to be acquired by Bidco outside the Scheme. In the case of Paul, this is in respect of 11,740,089 PTSG Shares; in the case of Roger, 8,430,836 PTSG Shares; and in the case of the other senior managers participating in the Reinvestment Arrangements who hold (or will hold) PTSG Shares, 252,104 PTSG Shares in aggregate. None of these individuals is permitted to vote at the Court Meeting or on the resolution to approve the Reinvestment Arrangements and the MIP that is to be proposed at the General Meeting and they have therefore also committed not to vote on these matters.
· The Investment Agreement sets out the terms on which Paul Teasdale and Roger Teasdale and the other senior managers participating in the Reinvestment Arrangements will hold their investment in ordinary and preference shares in Midco. In the Investment Agreement, Paul Teasdale and Roger Teasdale will give business warranties regarding the information provided to the Macquarie Group, compliance with laws and key licences required by the PTSG business. The warranties are subject to customary limitations.
· Paul Teasdale and Roger Teasdale have irrevocably undertaken in respect of 19,503,791 and 9,289,984 PTSG Shares respectively (being their entire beneficial holding of PTSG Shares) to vote in favour of the special resolution to approve all actions necessary for carrying the Scheme into effect and the adoption of the Amended PTSG Articles to be proposed at the General Meeting (which they are permitted to vote on). They have also irrevocably undertaken in respect of 11,740,089 and 8,430,836 PTSG Shares respectively (being all of the PTSG Shares held by them other than those PTSG Shares which are subject to the Reinvestment Arrangements) that in the event the Acquisition is effected by way of a Takeover Offer, that they will assent such PTSG Shares to such Takeover Offer in accordance with the procedure set out in the relevant offer document containing such Takeover Offer.
MIP
Bidco believes that the ongoing participation and incentivisation of key management in the PTSG Group is vital following completion of the Acquisition. Accordingly, if the Scheme becomes Effective, it intends to put in place the MIP. Paul Teasdale, Roger Teasdale and the other senior managers participating in the Reinvestment Arrangements will participate in the MIP. Other participants in the MIP will be agreed between Midco and Paul Teasdale in his capacity as Chief Executive Officer of PTSG following completion of the Acquisition.
A summary of the proposed terms of the MIP is as follows:
· 20 per cent. of the fully diluted equity share capital of Midco (a parent undertaking of Bidco) as at the Effective Date will be made available to MIP participants ("Sweet Equity Shares").
· The Sweet Equity Shares will rank behind the preference shares to be issued by the Bidco Group to members of the Macquarie Group pursuant to the Share Subscription Agreement and Paul Teasdale and Roger Teasdale and the other senior managers pursuant to the Reinvestment Arrangements.
· The Sweet Equity Shares will be non-voting.
· The Sweet Equity Shares shall be entitled to a performance-based ratchet. The ratchet will operate such that MIP participants shall be entitled to an additional amount of the fully diluted share capital of Midco up to a maximum of 40 per cent. of the incremental equity proceeds on an exit, calculated on a stepped basis on a net return for the Macquarie Group of between 2.5 x money multiple and 20 per cent. IRR and 4.0 x money multiple and 32 per cent. IRR.
· The Sweet Equity Shares are subject to leaver provisions pursuant to which such shares could be acquired by Midco, an employee benefit trust or other employees of the Bidco Group in circumstances where the holder of such shares ceases to be employed or engaged by the Bidco Group. The price at which such acquisition would be made is dependent on the circumstances in which such person ceases to be employed or engaged by the Bidco Group.
· Certain holders of Sweet Equity Shares shall have a right in certain circumstances to (i) require that all of their shares are acquired (provided that the cessation of their employment is within the 12 month period of the Effective Date and, in certain circumstances, only where the PTSG business has achieved agreed performance targets) and (ii) retain a portion of their shares, in each case upon such shareholder ceasing to be employed or engaged by the Bidco Group.
· If an exit has not occurred within 6 years of the Effective Date, the MIP participants (provided they hold not less than 5% of the ordinary shares) shall have the right to request that the Midco board considers the initiation of a process to effect an exit. If an exit has not occurred before the date falling three months prior to the seventh anniversary of the Effective Date, the MIP participants (provided they hold not less than 5% of the ordinary shares) shall have the right to initiate a process to transfer the entire issued share capital of Midco to a third party purchaser. Topco shall have a right of first offer to acquire the shares held by the MIP participants before such shares are offered to a third party purchaser.
· Customary restrictions on transfer, pre-emption rights and majority drag and tag will apply in respect of transfers of shares in Midco.
Following the successful completion of the Acquisition:
· Paul Teasdale will hold 158,582 ordinary shares and 16,059,748 preference shares, representing 10.51 per cent. of the then issued ordinary and preference share capital of Midco;
· Roger Teasdale will hold 16,738 ordinary shares and 1,695,124 preference shares, representing 1.11 per cent. of the then issued ordinary and preference share capital of Midco;
· the other senior managers participating in the Reinvestment Arrangements will hold in aggregate 14,092 ordinary shares and 1,427,247 preference shares, representing 0.93 per cent. of the then issued ordinary and preference share capital of Midco; and
· Paul Teasdale and Roger Teasdale will each be allocated 19 per cent. of the Sweet Equity Shares. The other senior managers participating in the Reinvestment Arrangements will be allocated in aggregate 10.7 per cent. of the Sweet Equity Shares. Other participants in the MIP will be agreed following completion of the Acquisition.
Approval of the Reinvestment Arrangements and MIP
The Independent Shareholders will be asked at the General Meeting to approve the Reinvestment Arrangements and MIP described in this paragraph 9 by voting on the relevant resolution. Pursuant to Rule 16.2 of the Takeover Code, neither Paul Teasdale, Roger Teasdale, nor the other senior managers participating in the Reinvestment Arrangements, nor their respective connected persons nor any person holding PTSG Shares on behalf of them and/or any of their connected persons will be entitled to vote on such resolution and voting on this resolution will be by way of a poll.
The Independent Directors intend to unanimously recommend that the Independent Shareholders vote in favour of the resolution to approve the Reinvestment Arrangements and MIP described in this paragraph 9. KPMG considers that the terms of the Reinvestment Arrangements and the MIP are fair and reasonable so far as the Independent Shareholders are concerned. In forming this view, KPMG has taken into account the commercial assessments of the Independent Directors.
The Acquisition will be conditional, amongst other things, on the Independent Shareholders approving the Reinvestment Arrangements and MIP by an ordinary resolution to be taken on a poll at the General Meeting as described above.
Other than the Reinvestment Arrangements and the proposed MIP described in this paragraph 9 and the irrevocable undertakings entered into by the directors of PTSG referred to in paragraph 6 of this Announcement, or as otherwise described in this Announcement, there are no arrangements or understandings between Macquarie Group or Bidco and/or any person acting in concert with Macquarie Group and/or Bidco and the management or directors of PTSG having any connection with or dependence upon the Acquisition.
Further details of the terms of the Reinvestment Arrangements and the MIP will be set out in the Scheme Document.
10. Management, employees, research and development, locations of business and pension schemes
Bidco intends that, following completion of the Acquisition, the existing contractual and statutory employment rights of all PTSG Group management and employees will be fully safeguarded in accordance with applicable law.
Bidco does not intend to make any change to the conditions of employment or the balance of the skills and functions of the employees and management, other than those disclosed in paragraph 9 regarding new management incentivisation arrangements.
Bidco does not intend to initiate any headcount reductions within PTSG as a result of the Acquisition.
Over the last 11 years the PTSG Group has acquired 27 businesses and expects to continue to supplement its organic growth with strategic acquisitions. As a result of the integration of any such future acquisitions with the rest of the PTSG Group's businesses it is possible that some unnecessary duplication of roles and/or opportunities for streamlining PTSG's operations may be identified which may require some headcount reduction. In addition, some consolidation of the property portfolio may be considered appropriate as a result of such acquisitions. Any decisions on the integration of such future acquisitions will be unaffected by the Acquisition.
Bidco does not intend to make any changes to any employer contributions made by the PTSG Group into personal or other pension schemes. The PTSG Group does not participate in any defined benefit pension scheme.
The non-executive directors of PTSG, being Michael Higgins and Alan Howarth, have agreed to resign from their office as PTSG Directors with effect from completion of the Acquisition.
Bidco intends to support PTSG management and its current strategy to develop the company by way of continued investment in the expansion of PTSG's service portfolio and the cross selling of its diversified offering to new and existing customers, investment in technology, such as the business proprietary platform, Clarity, to improve customer service and business efficiency and to provide support in the ongoing integration of recent acquisitions, delivering further operational and financial improvement.
Bidco will also seek to assist PTSG management in identifying, assessing and financing the acquisition of complementary companies, in line with PTSG's proven strategy of pursuing organic growth supplemented by strategic acquisition.
Save as disclosed above arising from the ongoing integration of acquired businesses, Bidco has no intention to make any changes in location of PTSG's headquarters and headquarters' functions, operations and places of business.
Bidco does not envisage any other changes with regard to the redeployment of PTSG's existing material fixed assets. Owing to the nature of its business, PTSG has no research and development function.
PTSG Shares are currently admitted to trading on the AIM market operated by the London Stock Exchange. As set out in paragraph 15 below, before the Effective Date, an application will be made to the London Stock Exchange for the cancellation of the admission to trading of PTSG Shares on AIM and to de-list PTSG from AIM, to take effect on the Business Day following the Effective Date. Trading in PTSG Shares is expected to end at the close of business on the Business Day before the Effective Date, assuming that the Scheme has been approved at Court and by PTSG Shareholders.
No statements in this paragraph 10 are "post-offer undertakings" for the purposes of Rule 19.5 of the Takeover Code.
11. PTSG Share Plans and other company arrangements
EMI Options
In June 2014, PTSG granted options over up to 10,000 E Ordinary Shares in the Company of £1.00 each ("E Ordinary Shares") to several senior managers with an exercise price of £1.00 per share (the "EMI Options", the "EMI Option Plan"). The EMI Options in respect of, in aggregate, 7,126 E Ordinary Shares have been exercised prior to this Announcement conditional upon the Effective Date. As these E Ordinary Shares will not be subject to the Scheme, agreements have been entered into with each holder of EMI Options (each an "E Shareholder") pursuant to which Bidco shall acquire these E Ordinary Shares conditional upon the Scheme becoming Effective for a consideration of £566.38 per E Ordinary Share, which is the amount to which the holders are entitled under the rights attaching to the E Ordinary Shares contained in PTSG's articles of association and following the remuneration committee of the Board of PTSG exercising its discretion in accordance with the terms of the EMI Option Plan. The balance of the EMI Options to acquire 2,874 E Ordinary Shares will lapse on the Effective Date. Certain of the senior managers participating in the Reinvestment Arrangement who hold EMI Options have agreed to reinvest a proportion of the proceeds of sale of the E Ordinary Shares held by them in the Bidco Group under the Reinvestment Arrangements described in paragraph 9.
B Ordinary Shares
Four individuals each hold 179 redeemable B ordinary shares in the capital of one of PTSG's wholly owned subsidiaries ("B Ordinary Shares"). Upon a change of control of PTSG, the articles of association of this subsidiary provide that all of the B Ordinary Shares in issue must be redeemed for an amount equal to the nominal value of the B Ordinary Shares plus an amount that is calculated by reference to the net profit of the wholly owned subsidiary. A share purchase agreement has been entered into between PTSG and the holders of these B Ordinary Shares pursuant to which PTSG has agreed to acquire the B Ordinary Shares for a consideration of £558.66 per B Ordinary Share conditional upon the Scheme becoming Effective and following the remuneration committee of the Board of PTSG agreeing the price with the holders of B Ordinary Shares as part of an arm's length negotiation.
Bonus Arrangements
Bonuses of £1,698,113 and £686,792 will be paid by PTSG to Andrew Dack (the Group Sales Director of PTSG) and Mark Watford (the Finance Director of PTSG) respectively conditional on the Scheme becoming effective, such bonuses to be paid net of any applicable income tax and employee's National Insurance contributions. The bonus payments have been agreed by the remuneration committee of the Board of PTSG and will be paid in full and final settlement of outstanding equity incentive arrangements that had previously been offered to Andrew Dack and Mark Watford, namely (i) the commitment by PTSG to issue shares pursuant to the addendum to Andrew Dack's employment contract with PTSG Electrical Services Limited dated 4 November 2011 and (ii) the commitment by PTSG to grant an interest to Mark Watford in respect of 850,000 ordinary shares in the Company pursuant to a joint share ownership plan. These individuals have agreed as part of the bonus awards to waive any further claim to be granted the right to acquire or be issued with shares or securities in the capital of PTSG.
A Ordinary Share
PTSG Access and Safety Limited's ("A&S") share capital consisted of 250,000 ordinary shares held by PTSG together with 1 A ordinary share (the "A Ordinary Share") held by Hallco 1766 Limited ("Hallco"). Hallco is a company of which Paul Teasdale, the Chief Executive Officer of PTSG, is the sole director and shareholder. This reflects an arrangement that A&S and Hallco entered into in 2008 as a means of recognising Paul Teasdale's contribution to the business and his importance to its future performance. At the time when the arrangement was made, A&S was the only trading subsidiary within the Group. The arrangement was disclosed in PTSG's AIM admission document, where there was the intention stated that, subject to having distributable profits, A&S would make dividend payments on the A Ordinary Share. Dividend payments have subsequently been made in each year since IPO.
The Independent Directors and the Remuneration Committee of PTSG, having reviewed the arrangement, believe it is no longer commercially fit for purpose for the PTSG Group. Accordingly, following receipt of professional independent advice on the market value of the A Ordinary Share, they concluded that A&S should simplify its share capital through a reduction of capital and cancellation of the A Ordinary Share, for which Hallco would receive consideration of £3.33 million over a period of five years. They believe that the change puts Hallco, and therefore Paul Teasdale, in no better or worse position than he is currently. This corporate action occurred on 18 June 2019 and was not conditional on the Acquisition being consummated by Bidco.
12. Financing
The cash consideration payable by Bidco to PTSG Shareholders pursuant to the Acquisition will be financed by a combination of equity financing from the Macquarie Group through the Share Subscription Agreement and debt financing to be provided under the Senior Facilities Agreement.
Under the terms of the Senior Facilities Agreement, Bidco has agreed that, save as required by the Takeover Code, the Panel, the Court and/or any applicable law or regulation or with the consent of the Agent (as defined in the Senior Facilities Agreement) it will not amend, vary, waive or otherwise modify the terms and conditions of the Acquisition to the extent such amendment, variance, waiver or modification would be materially prejudicial to the interests of the finance parties under the Senior Facilities Agreement.
Rothschild & Co, in its capacity as the financial adviser to Bidco, is satisfied that sufficient resources are available to Bidco to enable it to satisfy in full the cash consideration payable under the Scheme.
13. Offer-related arrangements
Confidentiality Agreement
Macquarie Principal Finance Pty Limited, UK branch and PTSG entered into a confidentiality agreement on 4 March 2019 (the "Confidentiality Agreement") pursuant to which Macquarie Principal Finance Pty Limited has undertaken to keep confidential, and to procure that certain of its representatives keep confidential, information relating to PTSG and/or to the Acquisition, to use such information solely for the agreed purposes in relation to the Acquisition and not to disclose it to third parties (other than to permitted disclosees) unless required by law or regulation.
Pursuant to the terms of the Confidentiality Agreement, Macquarie Principal Finance Pty Limited has also agreed to customary standstill arrangements pursuant to which, without the prior written consent of PTSG, it and any persons acting in concert with it will not acquire PTSG Shares or any interest in PTSG Shares for 12 months following the date of the Confidentiality Agreement. These restrictions fall away immediately following the making of this Announcement. If the Acquisition does not complete, the confidentiality obligations shall remain in force for a period of two years from the date of the Confidentiality Agreement.
14. Structure of the Acquisition
It is intended that the Acquisition will be implemented by means of a Court-approved scheme of arrangement between PTSG and PTSG Shareholders under Part 26 of the Companies Act 2006. Bidco reserves the right to elect to implement the Acquisition by way of a Takeover Offer (with the consent of the Panel).
The purpose of the Scheme is to provide for Bidco to become the holder of the entire issued and to be issued share capital of PTSG. This is to be achieved by the transfer of the PTSG Shares to Bidco, in consideration for which the PTSG Shareholders will receive the cash consideration on the basis set out in paragraph 2 of this Announcement. The cash consideration payable to PTSG Shareholders under the terms of the Acquisition will be rounded down to the nearest penny.
The Acquisition will be put to PTSG Shareholders at the Court Meeting and at the General Meeting. In order to become Effective, the Scheme must be approved by a majority in number of the Independent Shareholders voting (and entitled to vote) at the Court Meeting, either in person or by proxy, representing at least 75 per cent. in value of the Scheme Shares voted by such Independent Shareholders. In addition, at the General Meeting to implement the Scheme: (i) a special resolution to approve all actions necessary for carrying the Scheme into effect and the adoption of the Amended PTSG Articles must be passed by PTSG Shareholders representing at least 75 per cent. of the votes cast on that resolution; and (ii) an ordinary resolution to approve the Reinvestment Arrangements and MIP must be passed (on a poll) by Independent Shareholders representing a simple majority of the votes cast on that resolution. The General Meeting will be held immediately after the Court Meeting.
The Scheme will also be subject to the Conditions and further terms set out in Appendix 1 to this Announcement and to be set out in the Scheme Document.
Once the necessary approvals from PTSG Shareholders have been obtained and the other Conditions have been satisfied or (where applicable) waived, the Scheme must be sanctioned by the Court (with or without modification but with any such modification being acceptable to PTSG and Bidco). The Scheme will only become Effective upon delivery of the Court Order to the Registrar of Companies. Upon the Scheme becoming Effective, it will be binding on all PTSG Shareholders, irrespective of whether or not they attended or voted at the Court Meeting or the General Meeting (and if they attended and voted, whether or not they voted in favour of the resolutions proposed at such meetings).
The Acquisition will lapse if:
· the Court Meeting and the General Meeting are not held by the 22nd day after the expected date of such meetings as set out in the Scheme Document (or such later date as may be agreed between Bidco and PTSG);
· the Court Hearing is not held by the 22nd day after the expected date of such hearing as set out in the Scheme Document (or such later date as may be agreed between Bidco and PTSG); or
· the Scheme does not become Effective by the Long Stop Date (or such later date as may be agreed between Bidco and PTSG, with the consent of the Court or the Panel, if required).
Further details of the Scheme, including an indicative timetable for its implementation, will be set out in the Scheme Document, which, together with the Forms of Proxy, is expected to be dispatched to PTSG Shareholders as soon as practicable and, in any event, within 28 days of this Announcement. It is expected that the Court Meeting and the General Meeting will be held in July 2019 and that, subject to the satisfaction of the Conditions and the further terms set out in Appendix 1 to this Announcement, the Scheme is expected to become Effective by the end of July 2019.
15. De-listing and re-registration
It is expected that dealings in PTSG Shares will be suspended at 7.30 a.m. London time on the Effective Date. Before the Scheme becomes Effective and in accordance with the AIM Rules it is intended that an application will be made to the London Stock Exchange for admission of the PTSG Shares to trading on AIM to be cancelled on the Business Day following the Effective Date. The last day of dealings in, and for registration of transfers of, PTSG Shares is therefore expected to be the Business Day before the Effective Date. No dealings in PTSG Shares will be registered after this date.
On the Effective Date, share certificates in respect of PTSG Shares will cease to be valid and should, if so requested by PTSG, be sent to PTSG for cancellation. On the Effective Date, entitlements to PTSG Shares held within the CREST system will be cancelled.
It is also intended that, following the Scheme becoming Effective, PTSG will be re-registered as a private company under the relevant provisions of the Companies Act 2006.
16. Disclosure of Interests in PTSG
As at the close of business on the Latest Practicable Date, save for the irrevocable undertakings referred to in paragraphs 6 and 9 of this Announcement and the Reinvestment Arrangements, neither Bidco, nor any of its directors, nor, so far as Bidco is aware, any person acting in concert (within the meaning of the Takeover Code) with it for the purposes of the Acquisition had:
(i) any interest in or right to subscribe for any relevant securities of PTSG;
(ii) any short positions in respect of relevant securities of PTSG (whether conditional or absolute and whether in the money or otherwise), including any short position under a derivative, any agreement to sell or any delivery obligation or right to require another person to purchase or take delivery;
(iii) borrowed or lent any relevant securities of PTSG (including, for these purposes, any financial collateral arrangements of the kind referred to in Note 4 on Rule 4.6 of the Takeover Code); or
(iv) entered into any dealing arrangement of the kind referred to in Note 11 on the definition of acting in concert in the Takeover Code.
"interests in securities" for these purposes arise, in summary, when a person has long economic exposure, whether absolute or conditional, to changes in the price of securities (and a person who only has a short position in securities is not treated as interested in those securities). In particular, a person will be treated as having an 'interest' by virtue of the ownership, voting rights or control of securities, or by virtue of any agreement to purchase, option in respect of, or derivative referenced to, securities.
"relevant securities of PTSG" are PTSG Shares or securities convertible or exchangeable into PTSG Shares.
In the interests of secrecy prior to this Announcement, it has not been practicable for Bidco to make enquiries of all of its concert parties in advance of the release of this Announcement. Therefore, if Bidco becomes aware, following the making of such enquiries, that any of its concert parties have any such interests in relevant securities of PTSG, all relevant details in respect of Bidco's concert parties will be included in Bidco's Opening Position Disclosure in accordance with Rule 8.1(a) and Note 2(a)(i) on Rule 8 of the Takeover Code which must, unless there are no such interests of which Bidco is aware, be made on or before 12 noon (London time) on the 10th Business Day following the date of this Announcement.
17. Overseas Shareholders
The availability of the Acquisition and the distribution of this Announcement to PTSG Shareholders who are not resident in the United Kingdom may be affected by the laws and/or regulations of the relevant jurisdiction. Such persons should inform themselves of, and observe, any applicable legal or regulatory requirements of their jurisdiction. PTSG Shareholders who are in any doubt regarding such matters should consult an appropriate independent professional adviser in the relevant jurisdiction without delay.
This Announcement does not constitute an offer for sale for any securities or an offer or an invitation to purchase any securities. PTSG Shareholders are advised to read carefully the Scheme Document and related forms of proxy once these have been dispatched.
18. General
The Acquisition will be made subject to the Conditions and further terms set out in Appendix 1 to this Announcement and to be set out in the Scheme Document. The bases and sources of certain financial information contained in this Announcement are set out in Appendix 2 to this Announcement. A summary of the irrevocable undertakings and the letter of intent given in relation to the Acquisition is contained in Appendix 3 to this Announcement. Certain terms used in this Announcement are defined in Appendix 4 to this Announcement.
Bidco reserves the right, subject to the prior consent of the Panel, to elect to implement the Acquisition by way of a Takeover Offer for the entire issued and to be issued share capital of PTSG not already held by Bidco, as an alternative to the Scheme. In such an event, such offer will be implemented on the same terms (subject to appropriate amendments as described in Part B of Appendix 1), so far as applicable, as those which would apply to the Scheme.
If the Acquisition is effected by way of a Takeover Offer and such offer becomes or is declared unconditional in all respects and sufficient acceptances are received, Bidco intends to make a request to the London Stock Exchange to cancel trading in PTSG Shares on its market for listed securities and exercise its rights to apply the provisions of Chapter 3 of Part 28 of the Companies Act 2006 to acquire compulsorily the remaining PTSG Shares in respect of which the Takeover Offer has not been accepted.
Investors should be aware that Bidco may purchase PTSG Shares otherwise than under any Takeover Offer or scheme of arrangement relating to the Acquisition, such as in open market or privately negotiated purchases.
The Scheme will be governed by English law and will be subject to the jurisdiction of the courts of England and Wales. The Scheme will be subject to the applicable requirements of the Takeover Code, the Panel, the AIM Rules, the London Stock Exchange and the FCA.
Rothschild & Co. has given and not withdrawn its consent to the publication of this Announcement with the inclusion herein of the references to its name in the form and context in which it appears.
KPMG has given and not withdrawn its consent to the publication of this Announcement with the inclusion herein of the references to its name in the form and context in which it appears.
Numis has given and not withdrawn its consent to the publication of this Announcement with the inclusion herein of the references to its name in the form and context in which it appears.
19. Documents available on website
Copies of the following documents will be made available on PTSG's website at www.ptsg.co.uk/offer-for-ptsg/ and on Macquarie Group's website at www.macquarie.com/uk/about/investors/graphite by no later than 12 noon London time on the Business Day following this Announcement until the end of the Acquisition:
· a copy of this Announcement;
· the Senior Facilities Agreement and other documents relating to the debt financing of the Acquisition;
· the Share Subscription Agreement;
· the irrevocable undertakings and the letter of intent referred to in paragraphs 6 and 9 above and summarised in Appendix 3 to this Announcement;
· the written consents of Rothschild & Co., KPMG and Numis; and
· the Confidentiality Agreement referred to in paragraph 13 above.
Copies of the documents relating to the Reinvestment Arrangements (as well as the other documents required to be made available under Rule 26.3 of the Takeover Code) will be made available, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, on PTSG's website at www.ptsg.co.uk/offer-for-ptsg/ and on Macquarie Group's website at www.macquarie.com/uk/about/investors/graphite from the time the Scheme Document is published until the end of the Acquisition.
This announcement is being made on behalf of PTSG by Adam Coates, Company Secretary of PTSG.
Enquiries:
Bidco/Macquarie Group Tel: + 44 (0) 20 3037 2000
Victoria Webb
Rothschild & Co (Financial adviser to Bidco) Tel: + 44 (0) 207 280 5000Stuart Vincent
Robert Dunnett
Alistair Allen
Premier Technical Services Group plc Tel: + 44 (0) 1977 668 771
Paul Teasdale, Chief Executive Officer
KPMG LLP (Lead financial adviser to PTSG) Tel: + 44 (0)207 311 1000
Manuel Sammut
Helen Roxburgh
Giles Taylor
Numis Securities Limited (Financial adviser, Tel: + 44 (0) 207 260 1000
nominated adviser and broker to PTSG)
Stuart Skinner
Kevin Cruickshank
Michael Burke
Hudson Sandler (Public relations adviser to PTSG) Tel: + 44 (0) 207 796 4133
Charlie Jack
Important notices
Rothschild & Co, which is authorised and regulated in the United Kingdom by the FCA, is acting exclusively as financial adviser to Bidco and no one else in connection with the Acquisition or any matters referred to in in this Announcement. In connection with such matters, Rothschild & Co, its affiliates and its or their respective directors, officers, employees and agents will not regard any other person as their client, nor will they be responsible to anyone other than Bidco for providing the protections afforded to their clients or for providing advice in relation to the Acquisition, the contents of this Announcement or any other matter referred to in this Announcement or owe or accept any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person other than Bidco in connection with the matters referred to in this Announcement, or otherwise.
KPMG, which is authorised and regulated in the United Kingdom by the FCA, is acting exclusively as lead financial adviser to PTSG and for no one else in connection with the Acquisition or any matters referred to in this Announcement and will not be responsible to anyone other than PTSG for providing the protections afforded to its clients nor for providing advice in relation to the Acquisition, the contents of this Announcement or any other matters referred to in this Announcement. Neither KPMG nor any of its affiliates, respective directors, officers, employees and agents owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of KPMG in connection with the matters referred to in this Announcement, or otherwise.
Numis, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting as financial adviser, nominated adviser and broker exclusively for PTSG and no one else in connection with the matters set out in this announcement and will not regard any other person as its client in relation to the matters in this announcement and will not be responsible to anyone other than PTSG for providing the protections afforded to clients of Numis, nor for providing advice in relation to any matter referred to herein.
This Announcement is for information purposes only and is not intended to and does not constitute, or form part of, an offer to sell or an invitation to purchase any securities or a solicitation of an offer to buy, otherwise acquire, subscribe for, sell or otherwise dispose of any securities pursuant to the Acquisition or otherwise, nor shall there be any purchase, sale, issuance or exchange of securities or such solicitation in any jurisdiction in which such offer, invitation, solicitation, purchase, sale, issuance or exchange is unlawful. The Acquisition will be made solely by means of the Scheme Document (or, if applicable, the offer document containing any Takeover Offer) and the accompanying Forms of Proxy, which will contain the full terms and conditions of the Acquisition, including details of how to vote in respect of the resolutions proposed in connection with the Acquisition. Any approval, decision in respect of, or other response to, the Acquisition should be made only on the basis of the information contained in the Scheme Document (or, if applicable, the offer document containing any Takeover Offer).
This Announcement has been prepared in connection with proposals in relation to a scheme of arrangement pursuant to and for the purpose of complying with English law, the Takeover Code and the AIM Rules and information disclosed may not be the same as that which would have been disclosed if this Announcement had been prepared in accordance with the laws of jurisdictions outside the United Kingdom. Nothing in this Announcement should be relied on for any other purpose.
The statements contained in this Announcement are made as at the date of this Announcement, unless some other time is specified in relation to them, and the release of this Announcement shall not give rise to any implication that there has been no change in the facts set out in this Announcement since such date.
PTSG and Bidco urge PTSG Shareholders to read the Scheme Document when it becomes available because it will contain important information relating to the Acquisition.
Overseas jurisdictions
The release, publication or distribution of this Announcement in jurisdictions other than the United Kingdom may be restricted by the laws and/or regulations of those jurisdictions and therefore persons into whose possession this Announcement comes who are subject to the laws and/or regulations of any jurisdiction other than the United Kingdom should inform themselves about and observe any such applicable restrictions in their jurisdiction. In particular, the ability of persons who are not resident in the United Kingdom to vote their PTSG Shares with respect to the Scheme at the Court Meeting, or to appoint another person as proxy to vote at the Court Meeting on their behalf, may be affected by the laws of the relevant jurisdiction in which they are located. Further details in relation to the Overseas Shareholders will be contained in the Scheme Document. Any failure to comply with any such restrictions may constitute a violation of the securities laws of any such jurisdiction. To the fullest extent permitted by applicable law, the companies and persons involved in the Acquisition disclaim any responsibility or liability for the violation of such restrictions by any person.
Unless otherwise determined by Bidco or required by the Takeover Code, and permitted by applicable law and regulation, the Acquisition will not be made available, directly or indirectly, in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction and no person may vote in favour of the Scheme by any such means from within a Restricted Jurisdiction or any other jurisdiction if to do so would constitute a violation of the laws of that jurisdiction. Accordingly, copies of this Announcement and all documents relating to the Acquisition are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction, and persons receiving this Announcement and all documents relating to the Acquisition (including custodians, nominees and trustees) must not mail or otherwise distribute or send them in, into or from such jurisdictions where to do so would violate the laws in that jurisdiction. If the Acquisition is implemented by Takeover Offer (unless otherwise permitted by applicable law or regulation), the Takeover Offer may not be made, directly or indirectly, in or into or by use of the mails or any other means or instrumentality (including, without limitation, facsimile, email or other electronic transmission, telex or telephone) of interstate or foreign commerce of, or any facility of a national state or other securities exchange of any Restricted Jurisdiction) and the Takeover Offer will not be capable of acceptance by any such use, means instrumentality or facilities or from or within any Restricted Jurisdiction.
The availability of the Acquisition to PTSG Shareholders who are not resident in the United Kingdom may be affected by the laws of the relevant jurisdictions in which they are resident. Persons who are not resident in the United Kingdom should inform themselves of, and observe, any applicable requirements.
Further details in relation to Overseas Shareholders will be contained in the Scheme Document.
Additional information for US investors
PTSG Shareholders in the United States should note that the Acquisition relates to the securities of a company incorporated in England and is proposed to be effected by means of a scheme of arrangement under the laws of England and Wales. This Announcement, the Scheme Document and certain other documents relating to the Acquisition have been or will be prepared in accordance with English law, the Takeover Code and UK disclosure requirements, format and style, all of which differ from those in the United States. A transaction effected by means of a scheme of arrangement is not subject to the tender offer rules or the proxy solicitation rules under the US Exchange Act. Accordingly, the Acquisition is subject to the disclosure requirements of and practices applicable in the United Kingdom to schemes of arrangement, which differ from the disclosure requirements of the United States tender offer and proxy solicitation rules. If, in the future, Bidco exercises the right to implement the Acquisition by way of a Takeover Offer and determines to extend the offer into the United States, the Acquisition will be made in compliance with applicable United States laws and regulations, including any applicable exemptions under the US Exchange Act.
PTSG's financial statements, and all financial information that is included in this Announcement or that may be included in the Scheme Document, or any other documents relating to the Acquisition, have been or will be prepared in accordance with IFRS and may not be comparable to financial statements of companies in the United States or other companies whose financial statements are prepared in accordance with US generally accepted accounting principles.
The receipt of cash pursuant to the Acquisition by a US holder as consideration for the transfer of its PTSG Shares pursuant to the Scheme will likely be a taxable transaction for United States federal income tax purposes and under applicable United States state and local, as well as foreign and other, tax laws. Each PTSG Shareholder is urged to consult his independent professional adviser immediately regarding the tax consequences of the Acquisition applicable to him.
It may be difficult for US holders to enforce their rights and claims arising out of US federal securities laws, since Bidco and PTSG are located in countries other than the US, and some or all of their officers and directors may be residents of countries other than the US. US holders may not be able to sue a non-US company or its officers or directors in a non-US court for violations of US securities laws. Further, it may be difficult to compel a non-US company and its affiliates to subject themselves to a US court's judgement.
In accordance with normal practice in the UK and consistent with Rule 14e-5(b) of the US Exchange Act, Bidco, certain affiliated companies and their nominees or brokers (acting as agents) may make certain purchases of, or arrangements to purchase, shares in PTSG outside the US, other than pursuant to the Acquisition, until the date on which the Acquisition and/or Scheme becomes Effective, lapses or is otherwise withdrawn. If such purchases or arrangements to purchase were to be made they would occur either in the open market at prevailing prices or in private transactions at negotiated prices and comply with applicable law, including the US Exchange Act. Any information about such purchases or arrangements to purchase will be disclosed as required in the United Kingdom, will be reported to a Regulatory Information Service and will be available on the London Stock Exchange website at www.londonstockexchange.com.
Forward-looking statements
This Announcement (including information incorporated by reference in this Announcement), oral statements made regarding the Acquisition, and other information published by Bidco, Macquarie Group or PTSG contain statements about Bidco, Macquarie Group and/or PTSG that are or may be deemed to be forward-looking statements. All statements other than statements of historical facts included in this Announcement may be forward-looking statements. Without limitation, any statements preceded or followed by or that include the words "targets", "plans", "believes", "expects", "aims", "intends", "will", "may", "anticipates", "estimates", "hopes" "projects", "continue", "schedule" or words or terms of similar substance or the negative thereof, are forward-looking statements. Forward-looking statements include statements relating to the following: (i) future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects; (ii) business and management strategies and the expansion and growth of Bidco's, Macquarie Group's or PTSG's operations and potential synergies resulting from the Acquisition; and (iii) the effects of government regulation on Bidco's, Macquarie Group's or PTSG's business.
These forward-looking statements are not guarantees of future performance. By their nature, such forward-looking statements involve known and unknown risks and uncertainties that could significantly affect expected results and are based on certain key assumptions. Many factors could cause actual results to differ materially from those projected or implied in any forward-looking statements. Many of these risks and uncertainties relate to factors that are beyond the entities' ability to control or estimate precisely. These factors include, but are not limited to, the satisfaction of the conditions to the Acquisition, as well as additional factors, such as changes in political and economic conditions, changes in the level of capital investment, retention of key employees, changes in customer habits, success of business and operating initiatives and restructuring objectives, impact of any acquisitions or similar transactions, changes in customers' strategies and stability, competitive product and pricing measures, changes in the regulatory environment, fluctuations of interest and exchange rates, the outcome of any litigation. For a discussion of important factors which could cause actual results to differ from forward-looking statements in relation to the PTSG Group, refer to the annual report for PTSG for the financial year ended 31 December 2018. Neither Bidco, Macquarie Group or PTSG, nor any of their respective associates or directors, officers or advisers, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this Announcement will actually occur. Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date of this Announcement. All subsequent oral or written forward-looking statements attributable to Bidco, Macquarie Group or PTSG or any of their respective members, directors, officers or employees or any persons acting on their behalf are expressly qualified in their entirety by the cautionary statement above. Bidco, Macquarie Group and PTSG disclaim any obligation to update any forward-looking or other statements contained in this Announcement, except as required by applicable law.
No profit forecasts or estimates
No statement in this Announcement is intended as a profit forecast or estimate for any period and no statement in this Announcement should be interpreted to mean that earnings or earnings per share for PTSG for the current or future financial years would necessarily match or exceed the historical published earnings or earnings per share for PTSG.
Disclosure requirements of the Takeover Code (the "Code")
Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s), save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.
If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).
Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.
Right to switch to a Takeover Offer
Bidco reserves the right to elect, with the consent of the Panel, to implement the Acquisition by way of a Takeover Offer for the entire issued and to be issued share capital of PTSG as an alternative to the Scheme. In such an event, the Takeover Offer will be implemented on the same terms or, if Bidco so decides, on such other terms being no less favourable (subject to appropriate amendments), so far as applicable, as those which would apply to the Scheme and subject to the amendment referred to in Part B of Appendix 1 to this Announcement.
Publication of this Announcement on website
A copy of this Announcement and the documents required to be published pursuant to Rules 26.1 and 26.2 of the Takeover Code will be available, free of charge, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, on PTSG's website at www.ptsg.co.uk/offer-for-ptsg/ and on Bidco's website at www.macquarie.com/uk/about/investors/graphite by no later than 12:00 p.m. on the Business Day following this Announcement.
For the avoidance of doubt, the contents of this website and any websites accessible from hyperlinks on this website are not incorporated into and do not form part of this Announcement.
Information relating to PTSG Shareholders
Please be aware that addresses, electronic addresses and certain information provided by PTSG Shareholders, persons with information rights and other relevant persons for the receipt of communications from PTSG may be provided to Bidco during the Offer Period as required under Section 4 of Appendix 4 of the Takeover Code to comply with Rule 2.11(c) of the Takeover Code.
Right to receive documents in hard copy form
Any person entitled to receive a copy of documents, announcements and information relating to the Acquisition is entitled to receive such documents in hard copy form free of charge. A person may also request that all future documents, announcements and information in relation to the Acquisition are sent to them in hard copy form. Hard copies of such documents, announcements (including this Announcement), and information will not be sent unless requested.
A hard copy of this Announcement may be requested by contacting Link Market Services Ltd on 0871 664 0300, calls cost 12p per minute plus your phone company's access charge. If you are outside the United Kingdom, please call +44 371 664 0300. Calls outside the United Kingdom will be charged at the applicable international rate. Lines are open between 9.00 am - 5.30 pm, Monday to Friday excluding public holidays in England and Wales.
Rounding
Certain figures included in this Announcement have been subjected to rounding adjustments. Accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them.
Rule 2.9
For the purposes of Rule 2.9 of the Takeover Code, PTSG confirms that, as at the Latest Practicable Date, it had in issue 126,266,615 ordinary shares of 0.01 each. The International Securities Identification Number ("ISIN") number of the ordinary shares is GB00BV9FPW93.
Appendix 1CONDITIONS AND FURTHER TERMS OF THE ACQUISITION
PART A: CONDITIONS TO THE SCHEME AND THE ACQUISITION
Long Stop Date
1. The Acquisition will be conditional upon the Scheme becoming unconditional and being Effective, subject to the Takeover Code, by no later than the Long Stop Date or such later date (if any) as Bidco and PTSG may, with the consent of the Panel, agree and (if required) the Court may allow.
Scheme approval
2. The Scheme will be conditional upon:
(a)
(i) its approval by a majority in number of the Independent Shareholders who are on the register of members of PTSG at the Scheme Voting Record Time and who are present and vote, whether in person or by proxy, at the Court Meeting and at any separate class meeting which may be required by the Court (or at any adjournment of that meeting) and who represent at least 75 per cent. in value of the Scheme Shares voted by those Independent Shareholders; and
(ii) such Court Meeting being held on or before the 22nd day after the expected date of such meeting to be set out in the Scheme Document in due course (or such later date (if any) as may be agreed by Bidco and PTSG and the Court may allow).
(b) the resolution required to approve actions necessary to implement the Scheme and adopt the Amended PTSG Articles being duly passed by the requisite majority of PTSG Shareholders at the General Meeting (or at any adjournment thereof) and such General Meeting being held on or before the 22nd day after the expected date of such meeting as set out in the Scheme Document (or such later date (if any) as may be agreed by Bidco and PTSG and the Court may allow).
(c)
(i) the sanction of the Scheme by the Court (with or without modification but subject to any modification being on terms acceptable to PTSG and Bidco) and the delivery of a copy of the Court Order to the Registrar of Companies; and
(ii) the Court Hearing being held on or before the 22nd day after the expected date of such hearing to be set out in the Scheme Document in due course (or such later date (if any) as may be agreed by Bidco and PTSG and the Court may allow).
(d) the resolution required to approve the Reinvestment Arrangements and the MIP having been duly passed at the General Meeting pursuant to Rule 16.2 of the Takeover Code.
In addition, subject as stated in Part B below, and to the requirements of the Panel, the Acquisition will be conditional upon the following Conditions and, accordingly, the Court Order will not be delivered to the Registrar of Companies unless such Conditions (as amended if appropriate) have been satisfied or, where relevant, waived:
Notifications, waiting periods and Authorisations
3. all material notifications, filings or applications which are necessary or reasonably considered appropriate or necessary by Bidco having been made in connection with the Acquisition and all necessary waiting periods (including any extensions thereof) under any applicable legislation or regulation of any relevant jurisdiction reasonably deemed necessary having expired, lapsed or been terminated (as appropriate) and all necessary statutory and regulatory authorisations and consents in any relevant jurisdiction having been complied with in each case in respect of the Acquisition and its implementation and all Authorisations reasonably deemed necessary or appropriate for or in respect of the Acquisition and, except pursuant to Chapter 3 of Part 28 of the Companies Act 2006, the acquisition of any shares or other securities in, or control or management of, PTSG or any other member of the Wider PTSG Group by any member of the Wider Bidco Group having been obtained in terms and in a form reasonably satisfactory to Bidco from all appropriate Third Parties or (without prejudice to the generality of the foregoing) from any person or bodies with whom any member of the Wider PTSG Group or the Wider Bidco Group has entered into existing contractual arrangements and all such Authorisations that are necessary to carry on the business of any member of the Wider PTSG Group in any relevant jurisdiction having been obtained and all such Authorisations remaining in full force and effect at the time at which the Acquisition becomes otherwise wholly unconditional and there being no notice or intimation of an intention to revoke, suspend, restrict, modify or not to renew such Authorisations;
General antitrust and regulatory
4. no antitrust regulator or Third Party having given notice of a decision to take, institute, implement or threaten any action, proceeding, suit, investigation, enquiry or reference (and in each case, not having withdrawn the same), or having required any action to be taken or otherwise having done anything, or having enacted, made or proposed any statute, regulation, decision, order or change to published practice (and in each case, not having withdrawn the same) and there not continuing to be outstanding any statute, regulation, decision or order which would or might reasonably be expected to, in any case to an extent or in a manner which is or would be material in the context of the Wider PTSG Group taken as a whole or in the context of the Acquisition:
(a) require, prevent or materially delay the divestiture or materially alter the terms envisaged for such divestiture by any member of the Wider Bidco Group or by any member of the Wider PTSG Group of all or any material part of their respective businesses, assets or properties or impose any material limitation on the ability of all or any of them to conduct their respective businesses (or any part thereof) or to own, control or manage any of their assets or properties (or any part thereof);
(b) except pursuant to Chapter 3 of Part 28 of the Companies Act 2006, require any member of the Wider Bidco Group or the Wider PTSG Group to acquire or offer to acquire any shares, other securities (or the equivalent) or interest in any member of the Wider PTSG Group or any asset owned by any Third Party (other than in the implementation of the Acquisition);
(c) impose any material limitation on, or result in a delay in, the ability of any member of the Wider Bidco Group directly or indirectly to acquire, hold or to exercise effectively all or any rights of ownership in respect of shares or other securities in PTSG or on the ability of any member of the Wider PTSG Group or any member of the Wider Bidco Group directly or indirectly to hold or exercise effectively all or any rights of ownership in respect of shares or other securities (or the equivalent) in, or to exercise voting or management control over, any member of the Wider PTSG Group;
(d) otherwise materially adversely affect any or all of the business, assets, profits or prospects of any member of the Wider PTSG Group or any member of the Wider Bidco Group;
(e) result in any member of the Wider PTSG Group or any member of the Wider Bidco Group ceasing to be able to carry on business under any name under which it presently carries on business;
(f) make the Acquisition, its implementation or the acquisition of any shares or other securities in, or control or management of, PTSG by any member of the Wider Bidco Group void, unenforceable and/or illegal under the laws of any relevant jurisdiction, or otherwise, directly or indirectly prevent or prohibit, restrict, restrain, or delay or otherwise materially interfere with the implementation of, or impose additional materially adverse conditions or obligations with respect to, or otherwise challenge, impede, interfere or require material amendment of the Acquisition or the acquisition of any shares or other securities in, or control or management of, PTSG by any member of the Wider Bidco Group;
(g) require, prevent or materially delay a divestiture by any member of the Wider Bidco Group of any shares or other securities (or the equivalent) in any member of the Wider PTSG Group or any member of the Wider Bidco Group; or
(h) impose any limitation on the ability of any member of the Wider Bidco Group or any member of the Wider PTSG Group to conduct, integrate or co-ordinate all or any part of its business with all or any part of the business of any other member of the Wider Bidco Group and/or the Wider PTSG Group,
and all applicable waiting and other time periods (including any extensions thereof) during which any such antitrust regulator or Third Party could decide to take, institute, implement or threaten any such action, proceeding, suit, investigation, enquiry or reference or take any other step under the laws of any relevant jurisdiction in respect of the Acquisition or the acquisition of any PTSG Shares or otherwise intervene having expired, lapsed or been terminated;
Certain matters arising as a result of any arrangement, agreement, etc.
5. except as Disclosed, there being no provision of any arrangement, agreement, lease, licence, permit or other instrument to which any member of the Wider PTSG Group is a party or by or to which any such member or any of its assets is or may be bound, entitled or subject to or any event or circumstance which, as a consequence of the Acquisition or the proposed acquisition by any member of the Wider Bidco Group of any shares or other securities (or the equivalent) in PTSG or because of a change in the control or management of any member of the Wider PTSG Group or otherwise, would or might reasonably be expect to result in, in each case to an extent which is material in the context of the Wider PTSG Group as a whole:
(a) any monies borrowed by, or any other indebtedness, actual or contingent, of, or any grant available to, any member of the Wider PTSG Group being or becoming repayable, or capable of being declared repayable, immediately or before its or their stated maturity date or repayment date, or the ability of any such member to borrow monies or incur any indebtedness being withdrawn or inhibited or being capable of becoming or being withdrawn or inhibited;
(b) save in the ordinary course of business, the creation or enforcement of any mortgage, charge or other security interest over the whole or any part of the business, property or assets of any member of the Wider PTSG Group or any such mortgage, charge or other security interest (whenever created, arising or having arisen) being enforced or becoming enforceable;
(c) any such arrangement, agreement, lease, licence, permit or other instrument being terminated or becoming capable of being terminated or adversely modified or the rights, liabilities, obligations or interests of any member of the Wider PTSG Group being adversely modified or adversely affected or any obligation or liability arising or any adverse action being taken or arising thereunder;
(d) any liability of any member of the Wider PTSG Group to make any severance, termination, bonus or other payment to any of its directors, or other officers;
(e) the rights, liabilities, obligations, interests or business of any member of the Wider PTSG Group or any member of the Wider Bidco Group under any such arrangement, agreement, licence, permit, lease or instrument or the interests or business of any member of the Wider PTSG Group or any member of the Wider Bidco Group in or with any other person or body or firm or company (or any arrangement or arrangement relating to any such interests or business) being or becoming capable of being terminated, or adversely modified or affected or any onerous obligation or liability arising or any adverse action being taken thereunder;
(f) any member of the Wider PTSG Group ceasing to be able to carry on business under any name under which it presently carries on business;
(g) the value of, or the financial or trading position or prospects of, any member of the Wider PTSG Group being prejudiced or adversely affected; or
(h) the creation or acceleration of any liability (actual or contingent) by any member of the Wider PTSG Group other than trade creditors or other liabilities incurred in the ordinary course of business or in connection with the Acquisition,
and, except as Disclosed, no event having occurred which, under any provision of any arrangement, agreement, licence, permit, lease or other instrument to which any member of the Wider PTSG Group is a party or by or to which any such member or any of its assets are bound, entitled or subject, would or might result in any of the events or circumstances as are referred to in Conditions 5(a) to (h).
Certain events occurring since 31 December 2018
6. Except as Disclosed, no member of the Wider PTSG Group having since 31 December 2018:
(a) issued or agreed to issue or authorised or proposed or announced its intention to authorise or propose the issue, of additional shares of any class, or securities or securities convertible into, or exchangeable for, or rights, warrants or options to subscribe for or acquire, any such shares, securities or convertible securities or transferred or sold or agreed to transfer or sell or authorised or proposed the transfer or sale of PTSG Shares out of treasury (except, where relevant, as between PTSG and wholly-owned subsidiaries of PTSG or between the wholly-owned subsidiaries of PTSG and except for the issue or transfer out of treasury of PTSG Shares on the exercise of employee share options or vesting of employee share awards in the ordinary course under the EMI Option Plan);
(b) other than the Final Dividend, recommended, declared, paid or made or proposed to recommend, declare, pay or make any bonus, dividend or other distribution (whether payable in cash or otherwise) other than dividends (or other distributions whether payable in cash or otherwise) lawfully paid or made by any wholly-owned subsidiary of PTSG to PTSG or any of its wholly-owned subsidiaries;
(c) other than pursuant to the Acquisition (and except for transactions between PTSG and its wholly-owned subsidiaries or between the wholly-owned subsidiaries of PTSG and transactions in the ordinary course of business) implemented, effected, authorised or proposed or announced its intention to implement, effect, authorise or propose any merger, demerger, reconstruction, amalgamation, scheme, commitment or offer or disposal of assets or shares or loan capital (or the equivalent thereof);
(d) except for transactions between PTSG and its wholly-owned subsidiaries or between the wholly-owned subsidiaries of PTSG and except for transactions in the ordinary course of business disposed of, or transferred, mortgaged or created any security interest over any material asset or any right, title or interest in any asset or authorised, proposed or announced any intention to do so, in any such case to an extent which is material in the context of the Wider PTSG Group taken as a whole;
(e) (except for transactions between PTSG and its wholly-owned subsidiaries or between the wholly-owned subsidiaries of PTSG) issued, authorised or proposed or announced an intention to authorise or propose, the issue of or made any change in or to the terms of any debentures or become subject to any contingent liability or incurred or increased any indebtedness, which is material in the context of the Wider PTSG Group taken as a whole or is material in the context of the Acquisition;
(f) entered into or varied or authorised, proposed or announced its intention to enter into or vary any contract, arrangement, agreement, transaction or commitment (whether in respect of capital expenditure or otherwise) which is of a long term, unusual or onerous nature or magnitude or which is or which involves or could involve an obligation of a nature or magnitude which is or could reasonably be expected to be restrictive on the business of any member of the Wider PTSG Group which, taken together with any other such transaction, arrangement, agreement, contract or commitment, is material in the context of the Wider PTSG Group taken as a whole;
(g) entered into or materially varied the terms of, or made any offer (which remains open for acceptance) to enter into or vary the terms of any contract, service agreement, commitment or arrangement with any director or, except for salary increases, bonuses or variations of terms in the ordinary course, senior executive of any member of the Wider PTSG Group;
(h) proposed, agreed to provide or modified the terms of any share option scheme, incentive scheme or other benefit constituting a material change relating to the employment or termination of employment of a material person employed by the Wider PTSG Group;
(i) purchased, redeemed or repaid or announced any proposal to purchase, redeem or repay any of its own shares or other securities or reduced or, except in respect of the matters mentioned in sub-paragraph (a) above, made any other change to any part of its share capital;
(j) except in the ordinary course of business, waived, compromised or settled any claim;
(k) terminated or varied the terms of any agreement or arrangement between any member of the Wider PTSG Group and any other person in a manner which would or might reasonably be expected to have a material adverse effect on the financial position of the Wider PTSG Group taken as a whole;
(l) made any material alteration to its memorandum or articles of association or other incorporation documents (in each case, other than in connection with the Scheme);
(m) except in relation to changes made or agreed as a result of, or arising from, changes to legislation, made or agreed or consented to any material change to:
(i) the terms of the trust deeds and rules constituting the pension scheme(s) established by any member of the Wider PTSG Group for its directors, employees or their dependants;
(ii) the contributions payable to any such scheme(s) or to the benefits which accrue, or to the pensions which are payable, thereunder;
(iii) the basis on which qualification for, or accrual or entitlement to, such benefits or pensions are calculated or determined; or
(iv) the basis upon which the liabilities (including pensions) of such pension schemes are funded, valued, made, agreed or consented to;
(n) been unable, or admitted in writing that it is unable, to pay its debts or commenced negotiations with one or more of its creditors with a view to rescheduling or restructuring any of its indebtedness, or having stopped or suspended (or threatened to stop or suspend) payment of its debts generally or ceased or threatened to cease carrying on all or a substantial part of its business which is material in the context of the Wider PTSG Group taken as a whole;
(o) (other than in respect of a member which is dormant and was solvent at the relevant time or any intra-PTSG Group transactions) taken or proposed any steps, corporate action or had any legal proceedings instituted or threatened against it in relation to the suspension of payments, a moratorium of any indebtedness, its winding-up (voluntary or otherwise), dissolution, reorganisation or for the appointment of a receiver, administrator, manager, administrative receiver, trustee or similar officer of all or any of its assets or revenues or any analogous or equivalent steps or proceedings in any jurisdiction or appointed any analogous person in any jurisdiction or had any such person appointed, in each case which is material in the context of the Wider PTSG Group taken as a whole;
(p) (except for transactions between PTSG and its wholly-owned subsidiaries or between the wholly-owned subsidiaries), made, authorised, proposed or announced an intention to propose any change in its loan capital;
(q) entered into, implemented or authorised the entry into, any joint venture, asset or profit sharing arrangement, partnership or merger of business or corporate entities; or
(r) entered into any agreement, arrangement, commitment or contract or passed any resolution or made any offer (which remains open for acceptance) with respect to or announced an intention to, or to propose to, effect any of the transactions, matters or events referred to in this Condition 6;
No adverse change, litigation, regulatory enquiry or similar
7. except as Disclosed, since 31 December 2018 there having been:
(a) no adverse change and no circumstance having arisen which would or might be expected to result in any adverse change in, the business, assets, financial or trading position or profits or prospects or operational performance of any member of the Wider PTSG Group which is material in the context of the Wider PTSG Group taken as a whole or is material in the context of the Acquisition;
(b) no litigation, arbitration proceedings, prosecution or other legal proceedings having been threatened, announced or instituted by or against or remaining outstanding against or in respect of, any member of the Wider PTSG Group or to which any member of the Wider PTSG Group is or may become a party (whether as claimant, defendant or otherwise) having been threatened, announced, instituted or remaining outstanding by, against or in respect of, any member of the Wider PTSG Group, in each case which is or might reasonably be expected to be material in the context of the Wider PTSG Group taken as a whole or is material in the context of the Acquisition;
(c) no enquiry, review or investigation by, or complaint or reference to, any Third Party against or in respect of any member of the Wider PTSG Group having been threatened, announced or instituted or remaining outstanding by, against or in respect of any member of the Wider PTSG Group, in each case which might reasonably be expected to have a material adverse effect on the Wider PTSG Group taken as a whole or is material in the context of the Acquisition;
(d) no contingent or other liability having arisen or become apparent to Bidco (other than in the ordinary course of business) or increased which is reasonably likely to affect adversely the business, assets, financial or trading position or profits or prospects of any member of the Wider PTSG Group to an extent which is material in the context of the Wider PTSG Group taken as a whole or is material in the context of the Acquisition; and
(e) no steps having been taken and no omissions having been made which are reasonably likely to result in the withdrawal, cancellation, termination or modification of any licence held by any member of the Wider PTSG Group which is necessary for the proper carrying on of its business and the withdrawal, cancellation, termination or modification of which might reasonably be expected to have a material adverse effect on the Wider PTSG Group taken as a whole or is material in the context of the Acquisition;
No discovery of certain matters regarding information, liabilities and environmental issues
8. except as Disclosed, Bidco not having discovered that:
(a) any financial, business or other information concerning the Wider PTSG Group publicly announced before the date of the Announcement or disclosed at any time to any member of the Wider Bidco Group by or on behalf of any member of the Wider PTSG Group before the date of the Announcement is misleading, contains a material misrepresentation of any fact, or omits to state a fact necessary to make that information not misleading (and which was not subsequently publicly corrected before the date of this Announcement or otherwise to Bidco);
(b) any member of the Wider PTSG Group is subject to any liability, contingent or otherwise which is material in the context of the Wider PTSG Group taken as a whole or material in the context of the Acquisition;
(c) any past or present member of the Wider PTSG Group has not complied with all applicable legislation or regulations of any jurisdiction or any Authorisations relating to the use, treatment, storage, carriage, disposal, discharge, spillage, release, leak or emission of any waste or hazardous substance or any substance likely to impair the environment (including property) or harm human or animal health or otherwise relating to environmental matters or the health and safety of humans, which non-compliance would be likely to give rise to any material liability including any penalty for non-compliance (whether actual or contingent) on the part of any member of the Wider PTSG Group, in each case to an extent which is material in the context of the Wider PTSG Group taken as a whole or material in the context of the Acquisition;
(d) there has been a disposal, discharge, spillage, accumulation, release, leak, emission or the migration, production, supply, treatment, storage, transport or use of any waste or hazardous substance or any substance likely to impair the environment (including any property) or harm human or animal health which (whether or not giving rise to non-compliance with any law or regulation), would be likely to give rise to any material liability (whether actual or contingent) on the part of any member of the Wider PTSG Group, in each case to an extent which is material in the context of the Wider PTSG Group taken as a whole or material in the context of the Acquisition; or
(e) there is or is reasonably likely to be any obligation or liability (whether actual or contingent) or requirement to make good, remediate, repair, reinstate or clean up any property, currently or previously owned, occupied, operated or made use of or controlled by any past or present member of the Wider PTSG Group (or on its behalf), or in which any such member may have or previously have had or be deemed to have had an interest, under any environmental legislation, common law, regulation, notice, circular, Authorisation or order of any Third Party in any jurisdiction or to contribute to the cost thereof or associated therewith or indemnify any person in relation thereto which in each case is material in the context of the Wider PTSG Group taken as a whole or in the context of the Acquisition;
Anti-corruption, sanctions and criminal property
9. except as Disclosed, Bidco not having discovered:
(a) (i) any past or present member, director, officer or employee of the Wider PTSG Group is or has at any time engaged in any activity, practice or conduct would constitute an offence under the Bribery Act 2010, the US Foreign Corrupt Practices Act of 1977 or any other anti-corruption legislation applicable to the Wider PTSG Group; or (ii) any person that performs or has performed services for or on behalf of the Wider PTSG Group is or has at any time engaged in any activity, practice or conduct in connection with the performance of such services which would constitute an offence under the Bribery Act 2010, the US Foreign Corrupt Practices Act of 1977 or any other applicable anti-corruption legislation;
(b) any asset of any member of the Wider PTSG Group constitutes criminal property as defined by section 340(3) of the Proceeds of Crime Act 2002 (but disregarding paragraph (b) of that definition);
(c) any past or present member, director, officer or employee of the Wider PTSG Group, or any other person for whom any such person may be liable or responsible, has engaged in any business with, made any investments in, made any funds or assets available to or received any funds or assets from: (i) any government, entity or individual in respect of which US or European Union persons, or persons operating in those territories, are prohibited from engaging in activities or doing business, or from receiving or making available funds or economic resources, by applicable US or European Union laws or regulations, including the economic sanctions administered by the United States Office of Foreign Assets Control or HM Treasury & Customs; or (ii) any government, entity or individual targeted by any of the economic sanctions of the United Nations, the United States, the European Union or any of their respective member states; or
(d) a member of the Wider PTSG Group has engaged in any transaction which would cause any member of the Wider Bidco Group to be in breach of any applicable law or regulation upon its acquisition of PTSG, including the economic sanctions of the United States Office of Foreign Assets Control or HM Treasury & Customs, or any government, entity or individual targeted by any of the economic sanctions of the United Nations, the United States, the European Union or any of its member states.
PART B: CERTAIN FURTHER TERMS OF THE ACQUISITION
1. To the extent permitted by law and subject to the requirements of the Panel in accordance with the Takeover Code, Bidco reserves the right to waive:
(a) any of the Conditions set out in the above Conditions 1 and 2 only in so far as they relate to the deadlines for the timing of the Court Meeting, the General Meeting and the Court Hearing respectively. The deadline for the Scheme to become Effective may be extended by agreement between the Company and Bidco (with the Panel's consent and, if required, the Court's approval). If any such deadline is not met, Bidco will make an announcement by 8.00am on the Business Day following such deadline confirming whether it has invoked or waived the relevant Condition or agreed with PTSG to extend the deadline in relation to the relevant Condition. In all other respects, Conditions 1 and 2 cannot be waived; and
(b) in whole or in part, all or any of the above Conditions 3 to 9 (inclusive) by no later than 11.59 p.m. on the date immediately preceding the date of the Court Hearing.
2. Bidco will, immediately prior to the Court Hearing, provide notice in writing to PTSG that either: (i) the Conditions in paragraphs 3 to 9 (above) have each been satisfied or that Bidco has waived or treated as waived such Conditions; or (ii) it intends to invoke or treat as incapable of satisfaction each or any Condition, which will always be subject to the Panel's consent.
3. If Bidco is required by the Panel to make a Takeover Offer for PTSG Shares under the provisions of Rule 9 of the Takeover Code, Bidco may make such alterations to any of the above Conditions and terms of the Acquisition as are necessary to comply with the provisions of that Rule.
4. Bidco will be under no obligation to waive (if capable of waiver) or to treat as fulfilled any of the Conditions by a date earlier than the latest date for the fulfilment of that Condition notwithstanding that the other Conditions of the Acquisition 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.
5. The Acquisition shall lapse and shall not become Effective if:
(a) insofar as the Acquisition or any matter arising from or relating to the Scheme or a Takeover Offer constitutes a concentration with a European community dimension within the scope of the Regulation, the European Commission either initiates proceedings under Article 6(1)(c) of the Regulation or makes a referral to a competent authority in the United Kingdom under Article 9(1) of the Regulation and there is then a CMA Phase 2 Reference; or
(b) the Acquisition or any matter arising from or relation to the Scheme or Acquisition becomes subject to a CMA Phase 2 Reference,
in each case before the date of the Court Meeting.
6. The PTSG Shares to be acquired pursuant to the Acquisition will be acquired fully paid and free from all liens, equities, charges, encumbrances, options, rights of pre-emption and any other third party rights and interests of any nature and together with all rights now or hereafter attaching or accruing to them, including, without limitation, voting rights and (other than the Final Dividend and subject to paragraph 7 below) the right to receive and retain in full all dividends and other distributions (if any) declared, made or paid, or any other return of capital (whether by reduction of share capital or share premium account or otherwise) made, on or after the Effective Date.
7. Subject to the terms of the Scheme, if, on or after the date of this Announcement, any dividend or other distribution is announced (excluding the Final Dividend), Bidco reserves the right (without prejudice to any right of Bidco to invoke Condition 6(b) in Part A of this Appendix 1) to reduce the Acquisition Price by the amount of any such dividend or other distribution, in which case: (a) any reference in this Announcement or in the Scheme Document to the Acquisition Price for the PTSG Shares will be deemed to be a reference to the Acquisition Price as so reduced; and (b) the relevant eligible PTSG Shareholders will be entitled to receive and retain such dividend or distribution. To the extent that any such dividend or distribution announced, declared or paid is: (x) transferred pursuant to the Acquisition on a basis which entitles Bidco to receive the dividend or distribution and to retain it; or (y) cancelled, the Acquisition Price will not be subject to change in accordance with this paragraph. Any exercise by Bidco of its rights referred to in this paragraph shall be the subject of an announcement and the consent of the Panel and, for the avoidance of doubt, shall not be regarded as constituting any revision or variation of the Acquisition.
8. Under Rule 13.5(a) of the Takeover Code, Bidco may not invoke a Condition so as to cause the Acquisition not to proceed, to lapse or any offer to be withdrawn unless the circumstances which give rise to the right to invoke the Condition are of material significance to Bidco in the context of the Acquisition. Conditions 1 and 2 (and any Takeover Offer acceptance condition adopted on the basis specified in paragraphs 3 or 9 of this Part B) are not subject to this provision of the Takeover Code.
9. Bidco reserves the right to elect (with the consent of the Panel) to implement the Acquisition by way of a Takeover Offer as an alternative to the Scheme. In such event, the Acquisition will be implemented on substantially the same terms (subject to appropriate amendments, including (without limitation) an acceptance condition set at 90 per cent. (or such lesser percentage, being more than 50 per cent., as Bidco may decide) of the shares to which such offer relates, so far as applicable) as those which would apply to the Scheme.
10. The availability of the Acquisition to persons 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.
11. The Acquisition is not being made, directly or indirectly, in, into or from, or by use of the mails of, or by any means of instrumentality (including, but not limited to, facsimile, e-mail or other electronic transmission, telex or telephone) of interstate or foreign commerce of, or of any facility of a national, state or other securities exchange of, any Restricted Jurisdiction where to do so would violate the laws of that jurisdiction.
12. The Scheme will be governed by laws of England and Wales and is subject to the jurisdiction of the English courts and to the Conditions and further terms set out in this Appendix 1. The Acquisition will be subject to the applicable requirements of the Takeover Code, the Panel, the AIM Rules, the London Stock Exchange and the FCA.
13. Each of the Conditions will be regarded as a separate Condition and will not be limited by reference to any other Condition.
Appendix 2SOURCES OF INFORMATION AND BASES OF CALCULATION
1. The value placed by the Acquisition on the existing issued and to be issued share capital of PTSG on a fully diluted basis is based upon:
(a) 126,266,615 PTSG Shares in issue as at the Latest Practicable Date (and assuming no PTSG Shares held in treasury); and
(b) 7,126 E Ordinary Shares of £1.00 each in the capital of PTSG to be issued after the date of this Announcement, subject to the Effective Date occurring on or before the Long Stop Date, following the exercise of EMI Options over 7,126 E Ordinary Shares prior to this Announcement.
2. The number of PTSG Shares eligible to vote on:
(a) the Scheme at the Court Meeting is 97,220,736 PTSG Shares;
(b) the ordinary resolution to approve the Reinvestment Arrangements and MIP at the General Meeting is 97,218,515 PTSG Shares; and
(c) the special resolution to approve all actions necessary for carrying the Scheme into effect and the adoption of the Amended PTSG Articles at the General Meeting is 126,266,615 PTSG Shares.
3. The Closing Price on the Latest Practicable Date is taken from the Daily AIM List.
4. Volume-weighted average prices have been derived from Bloomberg and have been rounded to the nearest single penny.
5. Unless otherwise stated, the financial information relating to PTSG is extracted from the audited consolidated financial statements of PTSG for the financial years ended 31 December 2015 and 31 December 2018, as relevant, prepared in accordance with IFRS.
6. Certain figures included in this Announcement have been subject to rounding adjustments.
Appendix 3IRREVOCABLE UNDERTAKINGS AND LETTER OF INTENT
1. Summary of Irrevocable Undertakings and Letter of Intent received
Name of beneficial holder | Number of PTSG Shares in respect of which undertaking is given | Percentage of shares able to vote at Court Meeting % | Percentage of shares able to vote on the Ordinary Resolution % | Percentage of shares able to vote on the Special Resolution % |
|
|
|
|
|
Independent Directors |
|
|
|
|
John Foley | 18,503,791 | 19.03 | 19.03 | 14.65 |
Mark Watford | 57,692 | 0.06 | 0.06 | 0.05 |
|
|
|
|
|
Non-Independent Directors |
|
|
|
|
Paul Teasdale | 19,503,791 | - | - | 15.45 |
Roger Teasdale | 9,289,984 | - | - | 7.36 |
|
|
|
|
|
Other PTSG Shareholders |
|
|
|
|
Hawk Investment Holdings Limited | 12,089,450 | 12.44 | 12.44 | 9.57 |
First Pacific Advisors LP | 12,136,650 | 12.48 | 12.48 | 9.61 |
Amati Global Investors Limited | 4,058,299 | 4.17 | 4.17 | 3.21 |
|
|
|
|
|
Total Irrevocable Undertakings and Letter of Intent | 75,639,657 | 48.18 | 48.18 | 59.90 |
Total eligible PTSG Shares |
| 97,220,736 | 97,218,515 | 126,266,615 |
2. Irrevocable Undertakings from the Independent Directors
John Foley has given an irrevocable undertaking to vote or procure the votes to approve the Scheme at the Court Meeting and to vote or procure the votes in favour of the PTSG Resolutions at the General Meeting in respect of his own beneficial holdings totalling 18,503,791 PTSG Shares, representing approximately 14.65 per cent. of the issued share capital of PTSG (and approximately 19.03 per cent. of the PTSG Shares eligible to vote at the Court Meeting) as at the Latest Practicable Date.
Mark Watford has given an irrevocable undertaking to vote or procure the votes to approve the Scheme at the Court Meeting and to vote or procure the votes in favour of the PTSG Resolutions at the General Meeting in respect of his own beneficial holdings totalling 57,692 PTSG Shares, representing approximately 0.05 per cent. of the issued share capital of PTSG (and approximately 0.06 per cent. of the PTSG Shares eligible to vote at the Court Meeting) as at the Latest Practicable Date.
In the event that Bidco exercises its right to implement the Acquisition by way of a Takeover Offer, these irrevocable undertakings extend to include an obligation to accept or procure the acceptance of such offer.
These irrevocable undertakings remain binding in the event a higher competing offer is made for PTSG and will only cease to be binding if:
· Bidco announces, with the consent of the Panel, that it does not intend to make or proceed with the Acquisition and no new, revised or replacement offer is announced by Bidco in accordance with Rule 2.7 of the Takeover Code at the same time; or
· in the event that the Acquisition is implemented by way of a Takeover Offer (and not a Scheme), the offer document containing such Takeover Offer is not posted within 28 days of the date of the announcement under Rule 2.7 of the Takeover Code of such Takeover Offer, or within such longer period as Bidco and PTSG may, with the consent of the Panel, determine; or
· the Scheme (or Takeover Offer, as applicable) lapses or is withdrawn and no new, revised or replacement offer or scheme has then been announced in its place in accordance with Rule 2.7 of the Takeover Code, or is announced by Bidco in accordance with Rule 2.7 of the Takeover Code within 10 Business Days; or
· any other offer for the entire issued share capital of PTSG is declared wholly unconditional or otherwise becomes effective.
3. Irrevocable Undertakings from Paul Teasdale and Roger Teasdale
Each of Paul Teasdale and Roger Teasdale have irrevocably undertaken in respect of 19,503,791 and 9,289,984 PTSG Shares respectively (being their entire beneficial holding of PTSG Shares representing approximately 15.45 per cent. and 7.36 per cent. respectively of PTSG's issued share capital as at the Latest Practicable Date) to vote in favour of the special resolution to approve all actions necessary for carrying the Scheme into effect and the adoption of the Amended PTSG Articles to be proposed at the General Meeting. These individuals are not entitled to vote at the Court Meeting, and are not entitled to vote at the General Meeting in respect of the resolution to approve the Reinvestment Arrangements and the MIP, and they have therefore also committed not to vote on these matters.
Paul Teasdale and Roger Teasdale have also irrevocably undertaken in respect of 11,740,089 and 8,430,836 PTSG Shares respectively (being all of the PTSG Shares held by them other than those PTSG Shares which are subject to the Reinvestment Arrangements representing approximately 9.30 per cent. and 6.68 per cent. respectively of PTSG's issued share capital as at the Latest Practicable Date) that in the event the Acquisition is effected by way of a Takeover Offer, that they will assent such PTSG Shares to such Takeover Offer in accordance with the procedure set out in the relevant offer document containing such Takeover Offer.
These irrevocable undertakings remain binding in the event a higher competing offer is made for PTSG and will only cease to be binding if:
· Bidco announces, with the consent of the Panel, that it does not intend to make or proceed with the Acquisition and no new, revised or replacement offer or scheme is announced by the Bidder in accordance with rule 2.7 of the Takeover Code at the same time; or
· the Scheme (or Takeover Offer, as applicable) lapses or is withdrawn and no new, revised or replacement offer or scheme has then been announced in its place in accordance with Rule 2.7 of the Takeover Code, or is announced by Bidco in accordance with Rule 2.7 of the Takeover Code within 10 Business Days.
4. Further PTSG Shareholder Irrevocable Undertakings
Hawk Investment Holdings Limited
Hawk Investment Holdings Limited has given an irrevocable undertaking to vote or procure the votes to approve the Scheme at the Court Meeting and to vote or procure the votes in favour of the PTSG Resolutions at the General Meeting in respect of 12,089,450 PTSG Shares, representing approximately 9.57 per cent. of the issued share capital of PTSG (and approximately 12.44 per cent. of the PTSG Shares eligible to vote at the Court Meeting) as at the Latest Practicable Date.
In the event that Bidco exercises its right to implement the Acquisition by way of a Takeover Offer, this irrevocable undertaking extends to include an obligation to accept or procure the acceptance of such offer.
This irrevocable undertaking remains binding in the event a higher competing offer is made for PTSG and will only cease to be binding if:
· Bidco announces, with the consent of the Panel, that it does not intend to make or proceed with the Acquisition and no new, revised or replacement offer is announced by Bidco in accordance with Rule 2.7 of the Takeover Code at the same time; or
· the Scheme (or Takeover Offer, as applicable) lapses or is withdrawn and no new, revised or replacement offer or scheme has then been announced in its place in accordance with Rule 2.7 of the Takeover Code, or is announced by Bidco in accordance with Rule 2.7 of the Takeover Code within 5 Business Days; or
· any other offer for the entire issued share capital of PTSG is declared wholly unconditional or otherwise becomes effective.
This irrevocable undertaking prevents Hawk Investment Holdings Limited from selling all or any part of its holding of PTSG Shares or acquiring or otherwise dealing (as defined in the Takeover Code) in PTSG Shares.
First Pacific
First Pacific Advisors LP acting on behalf of (i) FPA Value Partners Fund, a Series of FPA Hawkeye Fund, LLC and (ii) FPA Global Opportunity Fund, a Series of FPA Hawkeye Fund, LLC (together "First Pacific") has given an irrevocable undertaking to vote or procure the votes to approve the Scheme at the Court Meeting and to vote or procure the votes in favour of the PTSG Resolutions at the General Meeting in respect of 12,136,650 PTSG Shares (comprising 1,177,617 PTSG Shares beneficially held by FPA Value Partners Fund and 10,959,033 PTSG Shares beneficially held by FPA Global Opportunity Fund), representing approximately 9.61 per cent. of the issued share capital of PTSG (and approximately 12.48 per cent. of the PTSG Shares eligible to vote at the Court Meeting) as at the Latest Practicable Date.
In the event that Bidco exercises its right to implement the Acquisition by way of a Takeover Offer, this irrevocable undertaking extends to include an obligation to accept or procure the acceptance of such offer.
This irrevocable undertaking will cease to be binding if:
· Bidco announces, with the consent of the Panel, that it does not intend to make or proceed with the Acquisition and no new, revised or replacement offer is announced by Bidco in accordance with Rule 2.7 of the Takeover Code at the same time; or
· the Scheme (or Takeover Offer, as applicable) lapses or is withdrawn and no new, revised or replacement offer or scheme has then been announced in its place in accordance with Rule 2.7 of the Takeover Code, or is announced by Bidco in accordance with Rule 2.7 of the Takeover Code within 5 Business Days; or
· any other offer for the entire issued share capital of PTSG is declared wholly unconditional or otherwise becomes effective.
This irrevocable undertaking does not prevent First Pacific accepting or voting in favour of a proposal made by any third party for all of the issued ordinary share capital of PTSG provided that (i) the value of that proposal (in the reasonable opinion of KPMG, acting as lead financial adviser to PTSG) exceeds the value of the consideration under the Acquisition by more than ten per cent.; (ii) such proposal is recommended by the Independent Directors; and (iii) a period of ten days has elapsed from the announcement of such third party offer without Bidco having revised the terms of the Acquisition so that (in the reasonable opinion of KPMG, acting as lead financial adviser to PTSG) the value of the revised Acquisition exceeds the value of the offer by such third party.
This irrevocable undertaking does not prevent First Pacific from selling all or any part of its holding of PTSG Shares to a third party. If First Pacific does sell any such PTSG Shares, the provisions of this irrevocable undertaking shall immediately cease to apply in respect of the PTSG Shares which are sold by First Pacific.
5. PTSG Shareholder Letter of Intent
Amati
Amati Global Investors Limited, in its capacity as appointed investment manager of Amati AIM VCT plc and TB Amati UK Smaller Companies Fund (together "Amati"), has given a non-binding letter of intent to vote or instruct the exercise of the voting rights to approve the Scheme at the Court Meeting and to vote or instruct the exercise of the voting rights in favour of the PTSG Resolutions at the General Meeting (or, in the event that the Acquisition is implemented by way of a Takeover Offer, to accept the Takeover Offer) in respect of 4,058,299 PTSG Shares (comprising 1,683,692 PTSG Shares registered in the name of Amati AIM VCT plc and 2,374,607 PTSG Shares registered in the name of TB Amati UK Smaller Companies Fund), representing approximately 3.21 per cent. of the issued share capital of PTSG (and approximately 4.17 per cent. of the PTSG Shares eligible to vote at the Court Meeting) as at the Latest Practicable Date.
Appendix 4DEFINITIONS
The following definitions apply throughout this Announcement unless the context requires otherwise:
"Acquisition" the direct or indirect acquisition by Bidco of the entire issued and to be issued share capital of PTSG, to be implemented by means of the Scheme (or by way of a Takeover Offer under certain circumstances described in this Announcement) and, where the context requires, any subsequent revision, variation, extension or renewal thereof;
"Acquisition Price" the consideration payable under the Acquisition in respect of a PTSG Share;
"AIM" or "AIM Market" the AIM Market of the London Stock Exchange;
"AIM Rules" the AIM Rules for Companies published by the London Stock Exchange, as amended from time to time;
"Amended PTSG Articles" the articles of association of PTSG as at the date of this Announcement, as amended to include provisions, in terms approved by Bidco, that avoid any person (other than Bidco or its nominee) remaining as a holder of PTSG Shares after the Effective Date, such proposed amendment to be set out in full in the notice of the General Meeting;
"Announcement" this announcement;
"Annual General Meeting" the annual general meeting of PTSG Shareholders held on 17 June 2019;
"A Ordinary Share" the A ordinary share of £1.00 in the capital of PTSG Access and Safety Limited held by Hallco 1766 Limited;
"Australian Securities Exchange" the Australian Securities Exchange, ASX Ltd;
"Authorisations" regulatory authorisations, orders, recognitions, grants, consents, clearances, confirmations, certificates, licences, permissions or approvals;
"B Ordinary Shares" B Ordinary Shares of £0.25 each in the capital of PTSG Electrical Services Limited;
"Bidco" Bernard Bidco Limited, a private company limited by shares incorporated in England and Wales with registered number 11976442 and which has its registered office at Ropemaker Place, 28 Ropemaker Street, London, United Kingdom, EC2Y 9HD;
"Bidco Group" Topco and its subsidiary undertakings (including Bidco);
"Business Day" a day (other than Saturdays, Sundays and public holidays in the UK) on which banks are generally open for normal business in the City of London;
"Closing Price" the closing middle market price of a PTSG Share on a particular trading day as derived from the Daily AIM List;
"CMA" the Competition and Markets Authority, a UK statutory body established under the Enterprise and Regulatory Reform Act 2013;
"CMA Phase 2 Reference" a decision by the CMA to refer the Acquisition or any part of it under section 33 of the Enterprise Act 2002 (as amended);
"Conditions" the conditions to the implementation of the Acquisition, as set out in Appendix 1 to this Announcement and to be set out in the Scheme Document;
"Confidentiality Agreement" the confidentiality agreement between Macquarie Principal Finance Pty Limited and PTSG dated 4 March 2019;
"Court" the High Court of Justice in England and Wales;
"Court Hearing" the hearing at which the Court sanctions the Scheme under section 899 of the Companies Act 2006;
"Court Meeting" the meeting of Scheme Shareholders to be convened pursuant to an order of the Court pursuant to the Companies Act 2006 for the purpose of considering and, if thought fit, approving the Scheme, including any adjournment thereof;
"Court Order" the order of the Court sanctioning the Scheme;
"CREST" the system for the paperless settlement of trades in securities and the holding of uncertificated securities operated by Euroclear;
"Daily AIM List" the AIM Appendix to the Daily Official List;
"Daily Official List" the Daily Official List published by the London Stock Exchange;
"Dealing Disclosure" an announcement pursuant to Rule 8 of the Takeover Code containing details of dealings in interests in relevant securities of a party to an offer;
"Disclosed" the information which has been fairly disclosed by, or on behalf of, PTSG: (i) in the information made available to Bidco (or Bidco's advisers) in the data room established by PTSG for the purposes of the Acquisition prior to the date of the Announcement; (ii) in the annual report of the PTSG Group for the financial year ended 31 December 2018; (iii) in this Announcement; (iv) in any other announcement to a Regulatory Information Service by, or on behalf of, PTSG before the date of this Announcement in accordance with the Market Abuse Regulation; or (v) as otherwise fairly disclosed to Macquarie Group or Bidco (or their respective officers, employees, agents or advisers) in writing before the date of this Announcement;
"Effective Date" the date on which either: (i) the Scheme becomes effective in accordance with its terms; or (ii) (if Bidco elects to implement the Acquisition by way of a Takeover Offer), the date on which such Takeover Offer becomes or is declared unconditional in all respects in accordance with the requirements of the Takeover Code, and "Effective" shall be construed accordingly;
"EMI Options" or "EMI Option Plan" the options granted by PTSG over up to 10,000 E Ordinary Shares to several senior managers with an exercise price of £1.00 per share;
"E Ordinary Shares" E Ordinary Shares of £1.00 each in the capital of the Company;
"Euroclear" Euroclear UK and Ireland Limited;
"European Commission" the Commission of the European Union;
"European Union" the European economic and political union between 28 EU countries;
"Excluded Shares" (i) any PTSG Shares which are registered in the name of or beneficially held by Bidco or any other member of the Wider Bidco Group or any of their respective members or nominees; and (ii) any PTSG Shares held in Treasury;
"FCA" or "Financial Conduct Authority" the Financial Conduct Authority acting in its capacity as the competent authority for the purposes of Part VI of the UK Financial Services and Markets Act 2000, or any successor regulatory body;
"Final Dividend" the final dividend of 0.9 pence per PTSG Share approved by PTSG Shareholders at the Annual General Meeting held on 17 June 2019;
"Fitch" Fitch Ratings, Inc.;
"Forms of Proxy" the forms of proxy in connection with each of the Court Meeting and General Meeting which will accompany the Scheme Document;
"General Meeting" the general meeting of PTSG Shareholders (including any adjournment thereof) to be convened for the purposes of seeking approval of the PTSG Resolutions to be adopted in connection with the Scheme;
"IFRS" International Financial Reporting Standards;
"Independent Directors" the directors of PTSG other than Paul Teasdale and Roger Teasdale;
"Independent Shareholders" the PTSG Shareholders other than Paul Teasdale, Roger Teasdale and the other senior managers participating in the Reinvestment Arrangements, their respective connected persons or persons holding PTSG Shares on behalf of them or any of their respective connected persons (except in relation to the Court Meeting where Independent Shareholders shall also include spouses and civil partners of the other senior managers participating in the Reinvestment Arrangements);
"Investment Agreement" the subscription and shareholders' agreement dated 19 June 2019 and entered into between Macquarie European Investment Holdings Limited, Topco, Midco, Paul Teasdale, Roger Teasdale and the other senior managers participating in the Reinvestment Arrangements;
"IPO" Initial Public Offering;
"IRR" the internal rate of return;
"ISIN" International Securities Identification Number;
"KPMG" KPMG LLP, a limited liability partnership registered in England and Wales with registered number OC301540 and which has its registered office at 15 Canada Square, London E14 5GL;
"Latest Practicable Date" 19 June 2019;
"London Stock Exchange" London Stock Exchange plc;
"Long Stop Date" 31 December 2019 or such later date as may be agreed by PTSG and Bidco (with the Panel's consent);
"Macquarie Group" Macquarie Group Limited and its subsidiary undertakings;
"Midco" Bernard Midco Limited, a private company limited by shares incorporated in England and Wales with registered number 11974583 and which has its registered office at Ropemaker Place, 28 Ropemaker Street, London, United Kingdom, EC2Y 9HD;
"MIP" the proposed management incentivisation plan to be put in place after the Scheme has become Effective, as described in paragraph 9;
"Moody's" Moody's Investors Service, Inc.;
"Numis" Numis Securities Limited;
"Offer Period" the offer period (as defined by the Takeover Code) relating to PTSG, which commenced on the date of this Announcement;
"Opening Position Disclosure" has the same meaning as in Rule 8 of the Takeover Code;
"Overseas Shareholders" PTSG Shareholders (or nominees of, or custodians or trustees for PTSG Shareholders) not resident in, or nationals or citizens of the United Kingdom;
"Panel" the Panel on Takeovers and Mergers;
"PTSG" or the "Company" Premier Technical Services Group plc a public company limited by shares incorporated in England and Wales with registered number 06005074 and which has its registered office at 13-14 Flemming Court, Castleford, West Yorkshire, WF10 5HW;
"PTSG Directors" the directors of PTSG;
"PTSG Group" or "Group" PTSG and its subsidiaries and subsidiary undertakings from time to time;
"PTSG Resolutions" such shareholder resolutions of PTSG as are necessary to approve, implement and effect the Scheme and the Acquisition, including (without limitation) resolutions to approve the Amended PTSG Articles and the Reinvestment Arrangements and the MIP;
"PTSG Shareholders" the holders of PTSG Shares;
"PTSG Shares" the existing unconditionally allotted or issued and fully paid ordinary shares of £0.01 each in the capital of PTSG and any further such ordinary shares which are unconditionally allotted or issued before the Scheme becomes Effective;
"Regulation" Council Regulation (EC) 139/2004;
"Regulatory Information Service" a service approved by the London Stock Exchange for the distribution to the public of announcements and included within the list maintained on the London Stock Exchange's website;
"Reinvestment Arrangements" the Share Reinvestment Agreement and the Investment Agreement;
"Reinvestment Shares" 7,763,702 of the PTSG Shares registered in the name or beneficially owned by Paul Teasdale, 859,148 of the PTSG Shares registered in the name of or beneficially owned by Roger Teasdale and 1,843 of the E Ordinary Shares in aggregate registered in the name of or beneficially owned by certain of the other senior managers participating in the Reinvestment Arrangements, in each case which are subject to the Share Reinvestment Agreement;
"Restricted Jurisdiction" any jurisdiction into which, or from which, making the Acquisition or this Announcement available would violate the laws of that jurisdiction;
"Rothschild & Co" N M Rothschild & Sons Limited, a company limited by shares incorporated in England and Wales with registered number 00925279 and which has its registered office at New Court, St Swithin's Lane, London EC4N 8AL;
"Scheme" the proposed scheme of arrangement under Part 26 of the Companies Act 2006 between PTSG and PTSG Shareholders in connection with the Acquisition, with or subject to any modification, addition or condition approved or imposed by the Court and agreed by PTSG and Bidco;
"Scheme Document" the document to be sent to PTSG Shareholders containing, amongst other things, the full terms and conditions of the Scheme and the notices convening the Court Meeting and General Meeting;
"Scheme Record Time" the time and date specified in the Scheme Document, expected to be 6.00 p.m. on the Business Day immediately prior to the Effective Date;
"Scheme Shares" all PTSG Shares:
(i) in issue at the date of the Scheme Document;
(ii) (if any) issued after the date of the Scheme Document and before the Scheme Voting Record Time; and
(iii) (if any) issued at or after the Scheme Voting Record Time but on or before the Scheme Record Time either on terms that the original or any subsequent holders thereof are bound by the Scheme or in respect of which such holders are, or shall have agreed in writing to be, so bound,
in each case excluding any Excluded Shares and any PTSG Shares which are Reinvestment Shares;
"Scheme Shareholder" a holder of Scheme Shares;
"Scheme Voting Record Time" the date and time specified in the Scheme Document by reference to which entitlement to vote at the Court Meeting will be determined, expected to be 6.00pm on the day which is two days before the Court Meeting or, if the Court Meeting is adjourned, 6.00pm on the day which is two days before the date of such adjourned Court Meeting;
"Senior Facilities Agreement" means the senior facilities agreement dated 19 June 2019 and entered into between (1) Bernard Parentco Limited (as Parent), (2) Bidco (as Original Borrower), (3) the companies listed in Part 1 of Schedule 1 therein (as Original Borrowers), (4) the companies listed in Part 1 of Schedule 1 therein (as Original Guarantors), (5) Baring Asset Management Limited and Ardian Private Debt acting via Bonnefont 2 S.à r.l. (acting through its compartment K) (as Arrangers and Super Senior Arrangers), (6) Massachusetts Mutual Life Insurance Company, Barings Global Private Loans 3 S.à r.l., BCF Europe Funding Limited, Barings European Private Loans 2 S.à r.l., BAYVK R PD 1 Loan S.à r.l., Barings BDC, Inc., Barings Segregated Loans 3 S.à r.l., Barings Segregated Loans 2 S.à r.l. and Ardian Private Debt acting via Bonnefont 2 S.à r.l. (acting through its compartment K) (as Original Lenders) (7) Lucid Agency Services Limited (as Agent) and (8) Lucid Trustee Services Limited (as Security Agent);
"Share Reinvestment Agreement" the share reinvestment agreement dated 19 June 2019 between Bidco, Midco, Bernard Parentco Limited, Paul Teasdale, Roger Teasdale and certain of the other senior managers participating in the Reinvestment Arrangements;
"Share Subscription Agreement" the share subscription agreement dated 19 June 2019 between Topco and Macquarie European Investment Holdings Limited;
"Significant Interest" in relation to an undertaking, a direct or indirect interest of 20 per cent, or more of the total voting rights conferred by the equity share capital (as defined in section 548 of the Companies Act 2006) of such undertaking or (ii) the relevant partnership interest;
"Sweet Equity Shares" 20 per cent. of the fully diluted equity share capital of Midco (a parent undertaking of Bidco) as at the Effective Date which will be made available to MIP participants;
"Takeover Code" the City Code on Takeovers and Mergers;
"Takeover Offer" a takeover offer as defined in Chapter 3 of Part 28 of the Companies Act 2006;
"Third Party" each of a central bank, government or governmental, quasi- governmental, supranational, statutory, regulatory, environmental, administrative, fiscal or investigative body, court, trade agency, association, institution, environmental body, employee representative body or any other body or person whatsoever in any jurisdiction;
"Topco" Bernard Topco Limited, a private company limited by shares incorporated in England and Wales with registered number 11974335 and which has its registered office at Ropemaker Place, 28 Ropemaker Street, London, United Kingdom, EC2Y 9HD;
"United Kingdom" or "UK" the United Kingdom of Great Britain and Northern Ireland;
"United Nations" the international organization founded in 1945 with 193 Member States;
"United States" or "US" the United States of America, its territories and possessions, any state of the United States of America, the District of Columbia and all other areas subject to its jurisdiction and any political sub-division thereof;
"US Exchange Act" the United States Securities Exchange Act of 1933, and the rules and regulations promulgated thereunder;
"Wider Bidco Group" Macquarie Group Limited and its subsidiary and associated undertakings (including Bidco) and any other body corporate, partnership, joint venture or person in which Macquarie Group Limited and all such undertakings (aggregating their interests) have a Significant Interest; and
"Wider PTSG Group" PTSG and its subsidiary and associated undertakings and any other body corporate, partnership, joint venture or person in which PTSG and all such undertakings (aggregating their interests) have a Significant Interest.
For the purposes of this Announcement, "subsidiary", "subsidiary undertaking", "undertaking" and "associated undertaking" have the respective meanings given thereto by the Companies Act 2006.
All references to "pounds", "pounds Sterling", "Sterling", "£", "pence", "penny" and "p" are to the lawful currency of the United Kingdom and references "Australian Dollars" or "A$" are to the lawful currency of Australia.
All the times referred to in this Announcement are London times unless otherwise stated.
References to the singular include the plural and vice versa.