TAX.L Regulatory News (TAX)

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. 

FOR IMMEDIATE RELEASE

22 February 2019

 RECOMMENDED CASH ACQUISITION

of

Tax Systems plc ("Tax Systems")

by

Stripes Bidco Limited ("Bidco")

a wholly owned subsidiary of funds managed by Bowmark Capital LLP and its affiliates

to be effected by means of a scheme of arrangement under Part 26 of the Companies Act 2006

Publication and Posting of Scheme Document

On 13 February 2019, the Independent Directors of Tax Systems and the Board of Bidco announced that they had reached agreement on the terms of a recommended cash offer pursuant to which Bidco will acquire the entire issued and to be issued share capital of Tax Systems. The Acquisition will be implemented by way of a Court-sanctioned scheme of arrangement pursuant to Part 26 of the Companies Act 2006.

Tax Systems announces that on 21 February 2019 it posted a scheme document (the "Scheme Document") to Scheme Shareholders, together with the associated Forms of Proxy. The Scheme Document contains, amongst other things, a letter from the Chairman of Tax Systems, an explanatory statement from finnCap and Oakley Advisory, the full terms and conditions of the Scheme, notices convening the Court Meeting and the General Meeting, an expected timetable of principal events and details of the actions to be taken by Scheme Shareholders and Tax Systems Shareholders (as applicable).

Capitalised terms in this announcement, unless otherwise defined, have the meaning given to them in the Scheme Document.

Notice of Shareholder Meetings

The Court Meeting and the General Meeting will both be held at the offices of K&L Gates LLP, One New Change, London EC4M 9AF on 15 March 2019. The Court Meeting will start at 10.00 a.m. and the General Meeting will start at 10.10 a.m.

As further detailed in the Scheme Document, to become effective, the Scheme will require, among other things, the approval of Scheme Shareholders at the Court Meeting and the passing of the Resolutions at the General Meeting. It is important that, for the Court Meeting in particular, as many votes as possible are cast so that the Court may be satisfied that there is a fair and reasonable representation of the opinion of the Scheme Shareholders. Scheme Shareholders are therefore strongly urged to complete, sign and return the Forms of Proxy (once received), or, alternatively, submit your proxy by electronic means, for both the Court Meeting and the General Meeting, as soon as possible.

If Tax Systems Shareholders pass the necessary resolutions at the aforementioned meetings, it is anticipated that the Scheme Court Hearing will be held on or around 22 March 2019 and that the Scheme will become effective on or around 25 March 2019.

Publication of the Scheme Document

The Scheme Document will today be made available, subject to certain restrictions, on Tax System's website at www.taxsystems.com/announcement and will be posted today by Tax Systems to all Tax Systems Shareholders.

A helpline is available for Tax Systems Shareholders. If you have any questions relating to the Scheme Document please contact Computershare on 0370 707 1238 or +44 370 707 1238 if calling from outside the United Kingdom. Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. The helpline is open between 8:30 am and 5:30 pm, Monday to Friday excluding public holidays in England and Wales. Please note that Computershare cannot provide any financial, legal or tax advice and calls may be recorded and monitored for security and training purposes.

Expected Timetable of Principal Events

The Scheme Documents contain an expected timetable of principal events relating to the Scheme, which is also set out in an Appendix to this announcement.

Enquiries:

Further information

This announcement is not intended to and does not constitute, or form part of, an offer, invitation or the solicitation of an offer to purchase, 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 Tax Systems in any jurisdiction in contravention of applicable law. This announcement contains the full terms and conditions of the Acquisition including details of how to vote in respect of the Scheme. Any vote in respect of the Scheme or other response in relation to the Acquisition should be made only on the basis of the information contained in this announcement.

Oakley Advisory, which is authorised and regulated in the United Kingdom by the FCA, is acting exclusively as financial adviser to Tax Systems and for no-one else in connection with the Acquisition and will not be responsible to anyone other than Tax Systems for providing the protections afforded to its clients nor for providing advice in relation to the Acquisition or any other matters referred to in this announcement.

finnCap, which is authorised and regulated in the United Kingdom by the FCA, is acting as financial adviser, nominated adviser and broker to Tax Systems and for no-one else in connection with the Acquisition and will not be responsible to anyone other than Tax Systems for providing the protections afforded to its clients nor for providing advice in relation to the Acquisition or any other matters referred to in this announcement.

GCA Altium, which is authorised and regulated in the United Kingdom by the FCA, is acting exclusively as financial adviser to Bidco and Bowmark and for no-one else in connection with the Acquisition and will not be responsible to anyone other than Bidco and Bowmark for providing the protections afforded to its clients nor for providing advice in relation to the Acquisition or any other matter referred to in this announcement.

Overseas jurisdictions

The availability of the Acquisition to Tax Systems Shareholders who are not resident in and citizens of the UK may be affected by the laws of the relevant jurisdictions in which they are located or of which they are citizens. Persons who are not resident in the UK should inform themselves of, and observe, any applicable legal or regulatory requirements of their jurisdictions.

The release, publication or distribution of this announcement in or into jurisdictions other than the UK may be restricted by law and therefore any persons who are subject to the law of any jurisdiction other than the UK should inform themselves about, and observe, any applicable requirements. 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 purposes of complying with English law, the AIM Rules, the rules of the London Stock Exchange and the 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 of England.

Copies of this announcement and the formal documentation relating to the Scheme and the Acquisition will not be, and must not be, mailed or otherwise forwarded, distributed or sent in, into or from any jurisdiction where to do so would violate the laws of that jurisdiction.

Notice to US Investors

US Holders should note that the Acquisition relates to the securities of a UK company, is subject to UK disclosure requirements (which are different from those of the US) and is proposed to be implemented under a scheme of arrangement provided for under English company law. Under the present circumstances, a transaction effected by means of a scheme of arrangement is not subject to the tender offer rules under the US Exchange Act. Accordingly, the Scheme will be subject to UK disclosure requirements and practices, which are different from the disclosure requirements of the US tender offer and proxy solicitation rules. The financial information included in this announcement has been or will have been prepared in accordance with IFRS and thus 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 US.

Neither the SEC nor any securities commission of any state of the US nor any other US regulatory authority has approved the Acquisition, passed upon the fairness of the Acquisition or passed upon the adequacy or accuracy of this announcement. Any representation to the contrary is a criminal offence in the US.

The receipt of cash pursuant to the Acquisition by a direct or indirect US Holder as consideration for the transfer of its Scheme Shares pursuant to the Scheme may be a taxable transaction for US federal income tax purposes and under applicable US state and local, as well as foreign and other, tax laws. Each Tax Systems 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 the US federal securities laws, since Tax Systems is located outside the US, and some or all of its 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 the Code, normal UK practice and pursuant to Rule 14e-5(b) of the US Exchange Act, Bidco or its nominees, or its brokers (acting as agents), may from time to time make certain purchases of, or arrangements to purchase, Tax Systems Shares outside of the United States, other than pursuant to the Acquisition, until the date on which the Acquisition and/or Scheme becomes effective, lapses or is otherwise withdrawn. These purchases and activities by exempt principal traders which are required to be made public in the United Kingdom pursuant to the Code will be reported to a Regulatory Information Service and will be available on the London Stock Exchange website at www.londonstockexchange.com. This information will also be publicly disclosed in the United States to the extent that such information is made public in the United Kingdom.

Forward looking statements

This announcement (including information incorporated by reference in this announcement), oral statements made regarding the Acquisition, and other information published by Tax Systems and Bidco contain statements which are, or may be deemed to be, "forward-looking statements". 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 Tax Systems and Bidco 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 include statements relating to the expected effects of the Acquisition on Tax Systems and Bidco, the expected timing and scope of the Acquisition and other statements other than historical facts. Often, but not always, forward-looking statements can be identified by the use of forward-looking words such as "plans", "expects" or "does not expect", "is expected", "is subject to", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "should", "would", "might" or "will" be taken, occur or be achieved. Although Tax Systems and Bidco believe that the expectations reflected in such forward-looking statements are reasonable, Tax Systems and Bidco can give no assurance that such expectations will prove to be correct. 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. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements.

These factors include, but are not limited to: the ability to consummate the Acquisition; the ability to obtain requisite shareholder approval and the satisfaction of other Conditions on the proposed terms and schedule; the ability of Tax Systems and Bidco to successfully integrate their respective operations and retain key employees; the potential impact of the announcement or consummation of the Acquisition on relationships, including with employees, suppliers, customers and competitors; and changes in general economic, business and political conditions; the combined company's ability to make acquisitions and its ability to integrate or manage such acquired businesses. Other unknown or unpredictable factors could cause actual results to differ materially from those in the forward-looking statements. Such forward-looking statements should therefore be construed in the light of such factors. Neither Tax Systems nor Bidco, 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. You are cautioned not to place undue reliance on these forward-looking statements. Other than in accordance with their legal or regulatory obligations (including under the AIM Rules and the Disclosure Guidance and Transparency Rules of the FCA, as applicable), neither Tax Systems nor Bidco is under any obligation, and Tax Systems and Bidco expressly disclaim any intention or obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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 ordinary share, for Bidco or Tax Systems, respectively for the current or future financial years would necessarily match or exceed the historical published earnings or earnings per ordinary share for Bidco or Tax Systems, respectively.

Dealing disclosure requirements

Under Rule 8.3(a) of the Code, any person who is interested in 1 per cent. or more of any class of relevant securities of an offeree company or of any 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 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 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.

Publication on website

A copy of this announcement will be made available, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, on Tax Systems' website at www.taxsystems.com/announcements by no later than 12 noon (London time) on the Business Day following the date of this announcement and will continue to be made available on these websites during the Offer Period. For the avoidance of doubt, the contents of these websites are not incorporated by reference and do not form part of this announcement.

Requesting hard copy documents

In accordance with Rule 30.3 of the Code, a person so entitled may request a hard copy of this announcement by submitting a request in writing to Computershare, Corporate Actions Projects, Bristol BS99 6AH or by calling Computershare on 0370 707 1238 or +44 370 707 1238 if calling from outside the United Kingdom. Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. The helpline is open between 8:30 am and 5:30 pm, Monday to Friday excluding public holidays in England and Wales. Please note that Computershare cannot provide any financial, legal or tax advice and calls may be recorded and monitored for security and training purposes.

For persons who receive a copy of this announcement in electronic form or via a website notification, a hard copy of this announcement will not be sent unless so requested. You may also request that all future announcements, announcements and information to be sent to you in relation to the Acquisition should be in hard copy form.

APPENDIX

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

The following indicative timetable sets out the expected dates for implementation of the Acquisition. All times shown in this document are London times unless otherwise stated. 

Notes:

(1) All times set out in this timetable refer to London time unless otherwise stated.

(2) It is requested that the BLUE Forms of Proxy for the Court Meeting be lodged by 10.00 a.m. on 13 March 2019 or, if the Court Meeting is adjourned, not later than 48 hours prior to the time appointed for the Court Meeting (excluding any part of such 48 hour period falling on a weekend or a public holiday in the UK unless otherwise announced). BLUE Forms of Proxy not so lodged may be handed to Computershare (on behalf of the chairman of the Court Meeting) before the start of the Court Meeting and will still be valid.

(3) WHITE Forms of Proxy for the General Meeting must be lodged by 10.10 a.m. on 13 March 2019 or, if the General Meeting is adjourned, not later than 48 hours prior to the time appointed for the adjourned Meeting (excluding any part of such 48 hour period falling on a weekend or a public holiday in the UK unless otherwise announced).

(4) If either the Court Meeting or the General Meeting is adjourned, the Scheme Voting Record Time for the relevant adjourned meeting will be 6.00 p.m. on the day falling two Business Days before the date of the adjourned meeting.

(5) Or as soon thereafter as the Court Meeting shall have concluded.

(6) These times and dates are indicative only and will depend on, among other things, the dates upon which (a) the Court sanctions the Scheme; and (b) the Conditions are satisfied or (where applicable) waived.

(7) The latest date by which the Scheme must be implemented may be extended by agreement between Tax Systems and Bidco with the prior consent of the Panel and (if required) the approval of the Court.

To the extent any of the above expected dates or times change, Tax Systems will give notice of any such changes and details of the revised dates and/or times to Tax Systems Shareholders by issuing an announcement through a Regulatory Information Service.