M&C Saatchi Regulatory News (SAA)

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN OR INTO ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION.

FOR IMMEDIATE RELEASE.

17 June 2022

FINAL[i] CASH AND SHARE ACQUISITION

OF

M&C SAATCHI PLC

BY

NEXT FIFTEEN COMMUNICATIONS GROUP PLC

Acquisition Update

Publication of Circular and Notice of General Meeting

On 20 May 2022, the board of Next Fifteen Communications Group plc ("Next 15") and the M&C Saatchi Independent Directors announced the terms of a recommended cash and share acquisition by which the entire issued and to be issued ordinary share capital of M&C Saatchi plc ("M&C Saatchi") will be acquired by Next 15, to be effected by means of a court sanctioned scheme of arrangement between M&C Saatchi and the M&C Saatchi Shareholders under Part 26 of the Companies Act 2006 (the "Acquisition") (the "2.7 Announcement").

On 9 June 2022, the board of Next 15 announced that the terms of the Acquisition, as set out in the 2.7 Announcement, are final[ii] and will not be increased, except that Next 15 reserves the right to increase the offer price if there is an announcement on or after 9 June 2022 of an offer or a possible offer for M&C Saatchi by a third-party offeror or potential offeror, other than ADV.

The M&C Saatchi board recommendation

Today, the board of M&C Saatchi announced that it had posted the Scheme Document to M&C Saatchi Shareholders. The board of Next 15 notes that, in that announcement, the board of M&C Saatchi stated that it had modified its recommendation of the Acquisition, such that it now recommends that M&C Saatchi Shareholders do not vote in favour of the Scheme as a result of the recent decline in Next 15's share price.

The Next 15 board's views on the Acquisition

The board of Next 15 is disappointed by this decision but welcomes the continued strong support of the M&C Saatchi Directors and M&C Saatchi's executive committee for the strategic, commercial, employee and cultural merits of the Next 15 Acquisition. As set out in the 2.7 Announcement, the boards of both companies and the senior management of M&C Saatchi believe there is a strong strategic complementarity between the businesses. Furthermore, the board of Next 15 believes that the terms of the Acquisition, which were recommended by the board of M&C Saatchi in the 2.7 Announcement, remain full and fair in respect of the cash consideration and the proportion of the share capital of the enlarged group which would be owned by M&C Saatchi Shareholders.

The board of Next 15 notes that the price of Next 15 Shares has declined since the 2.7 Announcement, but further notes that the performance of Next 15's Shares since 4 January 2022 (the day prior to the first announcement of discussions between ADV and M&C Saatchi) has been similar to relevant market indices and sector peers and that the price of M&C Saatchi Shares has been supported over that period by the ADV Offer and the proposed Acquisition.

The board of Next 15 believes that the Acquisition represents the most attractive of the choices facing M&C Saatchi Shareholders and provides the greatest opportunities for the future development of M&C Saatchi's businesses. The board of M&C Saatchi has set out very clearly the reasons why it believes the Acquisition represents a better alternative than the ADV Offer for M&C Saatchi and M&C Saatchi Shareholders, and has stated clearly its continued strong support for the strategic, commercial, employee and cultural merits of the Acquisition. The board of Next 15 therefore urges M&C Saatchi Shareholders to vote in favour of the Scheme and to take no action in relation to the ADV Offer.

As stated in Next 15's announcements on 20 May 2022 and 6 June 2022, the revenue growth of the Next 15 Group has continued to be strong, helped by the strength of the US dollar. For the three-month period to 30 April 2022, the Next 15 Group's total revenues increased by approximately 68 per cent. compared with the same period last year, to £130 million, with organic revenue growth of approximately 37 per cent. Trading has continued to be strong throughout May 2022 and adjusted profit before tax remains ahead of management expectations.

Posting of the Next 15 Circular

The board of Next 15 announces that it has today posted a circular to its shareholders (the "Next 15 Circular") which contains a notice of general meeting of the Company (the "Next 15 General Meeting") to be held at 10.00 a.m. on 19 August 2022 in relation to the Acquisition. The Next 15 General Meeting has been called to seek authority from Next 15 Shareholders to allot and issue the New Next 15 Shares to the shareholders of M&C Saatchi pursuant to the terms of the Acquisition.

Further detail is set out in the Next 15 Circular, which is also available to view on Next 15's website at www.next15.com/investors/.

Capitalised terms used but not defined in this announcement shall have the meanings given to them in the Next 15 Circular.

Acquisition Terms

Based on the Closing Price per Next 15 Ordinary Share on 19 May 2022, being the business day prior to the 2.7 Announcement, of 1266.0 pence, the Acquisition values each M&C Saatchi Share at 247.2 pence, comprising 0.1637 of a New Next 15 Share and 40 pence in cash. The Acquisition values the entire issued and to be issued ordinary share capital of M&C Saatchi at approximately:

Based on the Closing Price of a Next 15 Share on 16 June 2022, being the last practicable date prior to release of this announcement, of 910.0 pence, the Acquisition values each M&C Saatchi Share at 189.0 pence.

Transaction structure and timetable

The Acquisition is subject to the Conditions and further terms set out in the Scheme Document. The Conditions include, inter alia, regulatory approvals in Australia, the UK and the US. Next 15 currently expects that the Regulatory Condition that will take longest to satisfy is the FIRB Condition (set out in paragraph 3(c)(iii) of Part A of Appendix 1 to the 2.7 Announcement). Next 15 included the FIRB Condition as its confirmatory due diligence identified that M&C Saatchi undertakes activities in Australia which require regulatory approval under the FATA before control over M&C Saatchi can be acquired. Failure to comply with the FATA can expose the bidder to potential investigation, infringement notices, civil and criminal liability.

Subject to satisfaction of the Conditions, currently, the Acquisition is expected to complete early in the fourth quarter of 2022.

Sources and bases of information

Appendix 2 of the 2.7 Announcement contains the sources and bases of certain information used in this announcement, save in relation to (a) the Acquisition value per M&C Saatchi Share of 189.0 pence as at 16 June 2022, which is based upon (i) the Closing Price per Next 15 Share on 16 June 2022 of 910.0 pence; (ii) the exchange ratio of 0.1637 of a New Next 15 Share per M&C Saatchi Share; and (iii) the cash component of the Acquisition of 40 pence in cash for each M&C Saatchi Share; and (b) the Acquisition values on a fully diluted basis which are based upon M&C Saatchi's fully diluted share capital of 123,662,611 as at 16 June 2022.

Enquiries:

Important Information

Smith Square Partners LLP, which is authorised and regulated by the FCA in the United Kingdom, is acting exclusively for Next 15 and no one else in connection with the Acquisition and other matters set out in this announcement and will not be responsible to anyone other than Next 15 for providing the protections afforded to clients of Smith Square Partners, or for providing advice in connection with the Acquisition or any matter referred to herein. Neither Smith Square Partners nor any of its affiliates 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 Smith Square Partners in connection with this announcement, any statement contained herein or otherwise.

Numis Securities, which is authorised and regulated by the Financial Conduct Authority in the United Kingdom, is acting exclusively for Next 15 as nominated adviser and broker, and exclusively for M&C Saatchi as joint financial advisor and joint broker, and no one else in connection with the Acquisition and will not be responsible to anyone other than Next 15 and M&C Saatchi for providing the protections afforded to clients of Numis nor for providing advice in relation to the Acquisition or any other matters referred to in this announcement. Neither Numis nor any of its affiliates 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 Numis in connection with this announcement, any statement contained herein or otherwise.

Joh. Berenberg, Gossler & Co. KG, London Branch ("Berenberg"), which is authorised and regulated by the German Federal Financial Supervisory Authority (BaFin) and is deemed authorised and regulated by the FCA in the United Kingdom, is acting exclusively for Next 15 and no one else in connection with the Acquisition and other matters set out in this Announcement and will not be responsible to anyone other than Next 15 for providing the protections afforded to clients of Berenberg, or for providing advice in connection with the Acquisition or any matter referred to herein. Neither Berenberg nor any of its affiliates 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 Berenberg in connection with this Announcement, any statement contained herein or otherwise.

Further information

This announcement is for information purposes only and is not intended to and does not constitute or form part of an offer, invitation or the solicitation of an offer or invitation to purchase, or otherwise acquire, subscribe for, sell or otherwise dispose of any securities or the solicitation of any vote or approval in any jurisdiction pursuant to the Acquisition or otherwise nor shall there be any sale, issuance or transfer of securities of Next 15 or M&C Saatchi pursuant to the Acquisition in any jurisdiction in contravention of applicable laws. The Acquisition will be implemented solely pursuant to the terms of the Scheme Document (or, in the event that the Acquisition is to be implemented by means of an Offer, the offer Document), which contains the full terms and conditions of the Acquisition, including details of how to vote in respect of the Acquisition. Any decision in respect of, or other response to, the Acquisition should be made on the basis of the information contained in the Scheme Document.

Next 15 urges M&C Saatchi Shareholders to read the Scheme Document carefully because it contains important information in relation to the Acquisition, the New Next 15 Shares and the Enlarged Group. Next 15 urges Next 15 Shareholders to read the Next 15 Circular carefully. Any vote in respect of resolutions to be proposed at the M&C Saatchi Meetings or the Next 15 General Meeting to approve the Acquisition, the Scheme or related matters, should be made only on the basis of the information contained in the Scheme Document (in the case of the M&C Saatchi Shareholders), and the Next 15 Circular (in the case of Next 15 Shareholders).

This announcement does not constitute a prospectus or prospectus equivalent document.

Overseas jurisdictions

The release, publication or distribution of this announcement in or into jurisdictions other than the United Kingdom may be restricted by law and therefore any persons who are subject to the laws of any jurisdiction other than the United Kingdom should inform themselves about, and observe any applicable legal or regulatory requirements. In particular, the ability of persons who are not resident in the United Kingdom to vote their M&C Saatchi Shares with respect to the Scheme at the M&C Saatchi Court Meeting, or to execute and deliver forms of proxy appointing another to vote at the M&C Saatchi Court Meeting on their behalf, may be affected by the laws of the relevant jurisdictions in which they are located. Any failure to comply with the applicable 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. This announcement has been prepared for the purpose of complying with English law and the Takeover Code and the 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.

Unless otherwise determined by Next 15 or required by the Takeover Code, and permitted by applicable law and regulation, the availability of New Next 15 Shares to be issued pursuant to the Acquisition to M&C Saatchi Shareholders 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 Acquisition by any such use, means, instrumentality or form 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 any formal documentation relating to the Acquisition are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in or into or from any Restricted Jurisdiction or any other jurisdiction where to do so would constitute a violation of the laws of that jurisdiction, and persons receiving such documents (including custodians, nominees and trustees) must not mail or otherwise forward, distribute or send such documents in or into or from any Restricted Jurisdiction. Doing so may render invalid any related purported vote in respect of the Acquisition. If the Acquisition is implemented by way of a Takeover Offer (unless otherwise permitted by applicable law and regulation), the Takeover Offer may not be made directly or indirectly, in or into, or by the use of mails or any means or instrumentality (including, but not limited to, facsimile, e-mail or other electronic transmission or telephone) of interstate or foreign commerce of, or of any facility of a national, state or other securities exchange of any Restricted Jurisdiction and the Takeover Offer may not be capable of acceptance by any such use, means, instrumentality or facilities or from within any Restricted Jurisdiction.

The availability of New Next 15 Shares pursuant to the Acquisition to M&C Saatchi Shareholders who are not resident in the United Kingdom or the ability of those persons to hold such shares may be affected by the laws or regulatory requirements 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 legal or regulatory requirements. M&C Saatchi Shareholders who are in doubt about such matters should consult an appropriate independent professional adviser in the relevant jurisdiction without delay.

Further details in relation to M&C Saatchi Shareholders in overseas jurisdictions are contained in the Scheme Document.

The Acquisition is be subject to the applicable requirements of the Takeover Code, the Panel, the London Stock Exchange and the FCA.

Additional information for US Investors

The Acquisition relates to the shares of a company incorporated in England and Wales and is proposed to be effected by means of a scheme of arrangement under Part 26 of the Companies Act 2006 that will be governed by the laws of England and Wales. 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 and practices applicable in the United Kingdom to schemes of arrangement which differ from the disclosure requirements of United States tender offer and proxy solicitation rules. If, in the future, Next 15 exercises the right to implement the Acquisition by way of a Takeover Offer and determines to extend the Takeover Offer into the United States, the Acquisition will be made in compliance with applicable United States laws and regulations.

Financial information included in this announcement and the Scheme Documentation has been or will have been prepared in accordance with accounting standards applicable in the United Kingdom that may not be comparable to financial information of US companies or companies whose financial statements are prepared in accordance with generally accepted accounting principles in the United States.

It may be difficult for US holders of M&C Saatchi Shares to enforce their rights and any claim arising out of the US federal laws, since M&C Saatchi and Next 15 are located in a non-US jurisdiction, and some or all of their officers and directors may be residents of a non-US jurisdiction. US holders of M&C Saatchi Shares may not be able to sue a non-US company or its officers or directors in a non-US court for violations of the 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.

The New Next 15 Shares to be issued pursuant to the Scheme have not been and will not be registered under the US Securities Act or the securities laws of any state or other jurisdiction of the United States and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the US Securities Act and such other laws. The Acquisition is intended to be carried out under a scheme of arrangement under Part 26 of the Companies Act 2006 (which requires the approval of the Scheme Shareholders). If so, it is expected that any New Next 15 Shares to be issued pursuant to the Scheme to M&C Saatchi Shareholders will be issued in reliance upon the exemption from the registration requirements of the US Securities Act, provided by Section 3(a)(10) thereof. The New Next 15 Shares issued pursuant to the Scheme will not be registered under any US state securities laws and may only be issued to persons resident in a state pursuant to an exemption from the registration requirements of the securities laws of such state.

Publication on website and availability of hard copies

A copy of this announcement will be available, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, for inspection on Next 15's website www.next15.com/investors/ by no later than 12 noon (London time) on the Business Day following this announcement. For the avoidance of doubt, the contents of the websites referred to in this announcement are not incorporated into and do not form part of this announcement.

Next 15 Shareholders may request a hard copy of this announcement by contacting Next 15's registrars, Link Group, 0371 664 0300. Calls are charged at the standard geographic rate and will vary by provider. From overseas please call +44 (0)371 664 0300. Calls from outside the United Kingdom will be charged at the applicable international rate. Lines are open between 9.00 a.m. and 5.30 p.m. Monday to Friday excluding public holidays in England and Wales.

Cautionary note regarding forward looking statements

This announcement (including information incorporated by reference into this announcement), oral statements regarding the Acquisition and other information published by Next 15 contain certain forward looking statements with respect to the financial condition, strategies, objectives, results of operations and businesses of Next 15 and its group and certain plans and objectives with respect to the Enlarged Group. These forward looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward looking statements are prospective in nature and are not based on historical facts, but rather on current expectations and projections of the management of Next 15 about future events, and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward looking statements. The forward looking statements contained in this announcement may include statements relating to the expected effects of the Acquisition on Next 15 and M&C Saatchi, the expected timing and scope of the Acquisition and other statements other than historical facts. Forward looking statements often use words such as "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", "hope", "aims", "continue", "will", "may", "should", "would", "could", or other words of similar meaning. These statements are based on assumptions and assessments made by Next 15 in light of its experience and its perception of historical trends, current conditions, future developments and other factors they believe appropriate. By their nature, forward looking statements involve risk and uncertainty, because they relate to events and depend on circumstances that will occur in the future and the factors described in the context of such forward looking statements in this Announcement could cause actual results and developments to differ materially from those expressed in or implied by such forward looking statements. Although it is believed that the expectations reflected in such forward looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct and readers are therefore cautioned not to place undue reliance on these forward looking statements.

There are several factors which could cause actual results to differ materially from those expressed or implied in forward looking statements. Among the factors that could cause actual results to differ materially from those described in the forward looking statements are changes in the global, political, economic, business, competitive, market and regulatory forces, future exchange and interest rates, changes in tax rates and future business acquisitions or dispositions. For a discussion of important factors which could cause actual results to differ from forward looking statements in relation to the Next 15 Group or the M&C Saatchi Group, refer to the annual report and accounts of the Next 15 Group for the financial year ended 31 January 2022 and of the M&C Saatchi Group for the financial year ended 31 December 2021, respectively.

Each forward looking statement speaks only as at the date of this Announcement. Neither Next 15 nor its group assumes any obligation to update or correct the information contained in this announcement (whether as a result of new information, future events or otherwise), except as required by applicable law.

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.

No profit forecasts or estimates

No statement in this announcement (including any statement of estimated synergies) 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 or dividend per share for Next 15, M&C Saatchi or the Enlarged Group, as appropriate, for the current or future financial years would necessarily match or exceed the historical published earnings or earnings per share or dividend per share for Next 15, M&C Saatchi or the Enlarged Group as appropriate.

Dealing and Opening Position Disclosure requirements

Under Rule 8.3(a) of the Takeover Code, any person who is interested in one per cent. 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 Takeover Code, any person who is, or becomes, interested in one per cent. 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 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 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.