TNG.L Regulatory News (TNG)

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 OR REGULATIONS OF SUCH JURISDICTION

For immediate release

4 March 2016

MANDATORY INCREASED CASH OFFER

for

TANGENT COMMUNICATIONS PLC

by

TANGENT HOLDINGS UK LIMITED

1 INTRODUCTION

Background

It was announced on 10 February 2016 that the board of Tangent Holdings UK Limited ("Bidco") and the independent directors of Tangent Communications PLC ("Tangent") had reached agreement on the terms of a recommended cash offer (the "Original Offer") at 2.25 pence per Tangent Share (the "Original Offer Price"), to be made by certain members of the management team of Tangent (acting through Bidco), for the whole of the issued and to be issued share capital of Tangent. On 12 February 2016 Bidco published an offer document setting out the full terms and conditions of the Original Offer (the "Original Offer Document").

On 29 February 2016 Writtle Holdings Limited ("Writtle") announced a firm intention to make a recommended cash offer for the whole of the issued and to be issued share capital of Tangent at a price of 3.0 pence per Tangent Share. Writtle published its offer document on 1 March 2016.

Acquisition of Tangent Shares

Following the first closing date of the Offer, Bidco has agreed to acquire 15,796,154 Tangent Shares at a price of 4.0 pence per share (the "Acquisition"), representing in aggregate approximately 5.69% of the existing issued share capital of Tangent. The Acquisition is expected to settle on 8 March 2016 at which time Bidco may count them towards the satisfaction of the acceptance condition of the Offer.

Acceptances as at 3.00pm on 3 March 2016

As at 3.00pm on 3 March 2016, Bidco had received valid acceptances of the Original Offer in respect of 96,817,497 Tangent Shares, representing approximately 34.85% of the existing issued share capital of Tangent, all of which Bidco may count towards the satisfaction of the acceptance condition of the Offer.

The first closing date of the Offer was 1.00pm today. Following receipt by Bidco of confirmation from its receiving agents of the level of acceptances as at the first closing date a further announcement of acceptance levels complying with Rule 17.1 of the Takeover Code will be made.

Major irrevocable commitments

As set out in the Rule 2.7 Announcement, Bidco has procured irrevocable commitments from certain shareholders of Tangent who are not directors of Tangent to accept (or procure the acceptance of) the Offer in respect of their Tangent Shares, which, in aggregate, relate to 28,700,000 Tangent Shares, representing approximately 10.33% of Tangent's issued share capital. As at 3.00pm on 3 March 2016, these shareholders had not accepted the Offer. These irrevocable commitments remain binding in respect of the Increased Offer to the extent the relevant Tangent Shares have not been accepted to the Original Offer.

2 INCREASED OFFER UNDER RULE 9 OF THE TAKEOVER CODE

As a result of the Acquisition, Bidco is required, in accordance with the Takeover Code, to increase the Offer Price to 4.0 pence per Tangent Share and to revise the conditions of the Offer to reflect the requirements of the Takeover Code in respect of mandatory offers made under Rule 9 of the Takeover Code. Further details of the revised conditions of the Offer are set out in paragraph 3.

The board of Bidco are therefore pleased to announce an increased Offer Price of 4.0 pence in cash per Tangent Share (the "Increased Offer" and the "Increased Offer Price").

The Increased Offer values the whole of the issued and to be issued share capital of Tangent at approximately £11.91 million (assuming exercise and settlement in full of all outstanding options and awards granted under the Tangent Share Schemes with exercise prices at or below the Increased Offer Price).

The Increased Offer Price represents:

· an increase of 1.75 pence per Tangent Share over the Original Offer Price;

· a premium of approximately 190.91% to the Closing Price of 1.38 pence per Tangent Share on 9 February 2016 (being the last Business Day immediately preceding the date of the Rule 2.7 Announcement);

· a premium of approximately 177.17% to the average Closing Price of 1.44 pence per Tangent Share over the one month period to 9 February 2016 (being the last Business Day immediately preceding the date of the Rule 2.7 Announcement); and

· a premium of approximately 141.37% to the average Closing Price of 1.66 pence per Tangent Share over the three month period to 9 February 2016 (being the last Business Day immediately preceding the date of the Rule 2.7 Announcement).

In accordance with Rule 32.1 of the Takeover Code, a revised offer document (the "Revised Offer Document") containing details of the Increased Offer and of the revisions to the conditions to the Increased Offer will be sent to Tangent Shareholders as soon as practicable. The Revised Offer Document will also be made available on Bidco's website (http://www.paminvestments.com).

Tangent Shareholders who have previously validly accepted the Original Offer will automatically be deemed to have accepted the Increased Offer by virtue of their prior acceptances and therefore need take no further action. For the avoidance of doubt, all Tangent Shareholders who accepted the Original Offer will receive the Increased Offer Price in respect of their Tangent Shares once the Increased Offer is declared unconditional in all respects.

3 REVISED CONDITIONS OF THE INCREASED OFFER

As the Increased Offer is being made in accordance with Rule 9 of the Takeover Code, the Increased Offer will be subject only to the following condition:

"Bidco having received by no later than 1.00 pm (London time) on 22 March 2016 (or such later time(s) and/or date(s) as Bidco may (subject to the Takeover Code or with the consent of the Panel, decide) valid acceptances of the Offer (which have not been, where permitted, withdrawn) which, together with Tangent Shares acquired or agreed to be acquired by Bidco (or any person acting in concert with Bidco) before or during the Offer, will result in Bidco and any person acting in concert with it holding Tangent Shares carrying, in aggregate, more than 50 per cent. of the voting rights then normally exercisable at a general meeting of Tangent (including for this purpose, to the extent, if any, required by the Panel, any voting rights attaching to shares which are unconditionally allotted or issued before the Offer becomes or is declared unconditional as to acceptances, whether pursuant to the exercise of conversion or subscription rights or otherwise).

For the purpose of this condition, Tangent Shares that are unconditionally allotted but not issued shall be deemed to carry the voting rights which they will carry upon issue."

The further terms of the Original Offer set out in sections B to D (inclusive) of Part III of the Original Offer Document will remain unchanged under the Increased Offer, save that certain dates have been revised in accordance with the Takeover Code following the publication of Writtle's offer document. Accordingly, Day 39 is now 9 April 2016, Day 46 is now 16 April 2016 and Day 60 is now 30 April 2016.

The Increased Offer will be a revision to the Offer and shall be construed accordingly.

4 Closing Date of the Increased Offer

The Increased Offer will remain open for acceptance until 1.00 pm on the next closing date of the Increased Offer, which is anticipated to be 22 March 2016, which will be at least 14 days following the date on which the Revised Offer Document is published (or such later date as Bidco may determine).

Any extensions of the Increased Offer will be publicly announced no later than 8.00 am on the Business Day following the date on which the Increased Offer was otherwise due to expire, or such later date or time as the Panel may agree.

5 ACTION TO BE TAKEN

Tangent Shareholders who have not yet accepted the Original Offer are urged to accept the Increased Offer as soon as possible and, in any event, by no later than 1.00 pm on the next closing date to be set out in the Revised Offer Document. To do so:

· Tangent Shareholders who hold their Tangent Shares in certificated form (that is, not in CREST) should complete and return the Form of Acceptance which accompanied the Original Offer Document or the Revised Form of Acceptance which will accompany the Revised Offer Document.

· Tangent Shareholders who hold their Tangent Shares in uncertificated form (that is, in CREST) should ensure that an Electronic Acceptance is made by them or on their behalf and that settlement occurs. Tangent Shareholders who hold their Tangent Shares as a CREST sponsored member should refer to their CREST sponsor as only their CREST sponsor will be able to send the necessary instructions to Euroclear.

6 Acceptances and irrevocable commitments

Bidco will make a further announcement not later than 8.00am on Monday 7 March 2016 in respect of the level of acceptances received in respect of the Offer at the first closing date of the Offer, being 1.00pm today.

7 Financing of the Increased Offer

The Increased Offer will be financed entirely from the existing cash resources made available to Bidco from Portland. Tangent Industries Limited has made available an increased facility of up to £11,925,000 in aggregate to Portland to finance the Increased Offer. The loan is repayable over a 5 year term and carries an interest rate of 5% over the base rate of the Bank of England from time to time. The loan is unsecured and does not contain covenants in favour of the lender. Portland has advanced funds to Bidco on the same basis as the loan to it from Tangent Industries Limited.

WH Ireland, which is acting as financial adviser to Bidco, is satisfied that sufficient resources are available to Bidco to enable it to satisfy, in full, the cash consideration payable to Tangent Shareholders under the Increased Offer.

8 intentions of bidco regarding the business, employees and pension schemes of tangent

As a consequence of the substantially higher price of the Increased Offer, the statements of intention regarding the business, employees and pension schemes set out in the Original Offer Document are intended to be revised by Bidco in the Revised Offer Document.

Kevin Cameron (executive Director) and Nigel Kissack (Non-executive Director) intend to resign as directors of Tangent on the Increased Offer becoming unconditional in all respects. Kevin Cameron will continue in his current role within Tangent's executive management.

9 Tangent Share Schemes

Participants in the Tangent Share Schemes will be contacted to explain the effect of the Increased Offer on the proposals which have been made in respect of their options and awards.

10 Cancellation of admission to trading on AIM, compulsory acquisition of Tangent Shares and re-registration as private limited company

As soon as it is appropriate to do so, and subject to the Increased Offer becoming declared unconditional in all respects and subject to any applicable requirements of the London Stock Exchange and the AIM Rules, Bidco intends to procure that Tangent applies to the London Stock Exchange for the admission to trading on AIM of the Tangent Shares to be cancelled. It is anticipated that such cancellation will take effect no earlier than twenty Business Days after Bidco has, by virtue of acceptances of the Offer and/or other acquisitions of Tangent Shares, acquired or agreed to acquire issued share capital carrying 75% of the voting rights of Tangent. Cancellation of admission to trading on AIM will significantly reduce the liquidity and marketability of any Tangent Shares in respect of which valid acceptances of the Offer are not submitted.

If sufficient valid acceptances are received, Bidco intends to apply the provisions of sections 979-991 (inclusive) of the Companies Act 2006 to acquire compulsorily, on the same terms as the Increased Offer, any outstanding Tangent Shares to which the Offer relates.

It is also proposed that Tangent will be re-registered as a private limited company in due course.

11 Disclosure of Interests

At the close of business on 3 March 2016, being the latest practicable date before this announcement:

· The persons acting in concert with Bidco (including, without limitation, the directors of Bidco together with their close relatives and related trusts and other Interested Persons) were interested, in aggregate, in 92,669,165 Tangent Shares, representing approximately 33.36% of Tangent's issued share capital. Certain directors of Bidco have a right to subscribe for, in aggregate, 17,193,308 Tangent Shares. Further details of those interests are set out in Appendix 2 to this announcement;

· There are no persons with whom Bidco or any person acting in concert with Bidco had any arrangement (including any indemnity or option arrangement), agreement or understanding, formal or informal, of whatever nature relating to relevant Tangent securities which may be an inducement to deal or refrain from dealing; and

· Neither Bidco nor any person acting in concert with Bidco had any short position in any Tangent Shares (whether conditional or absolute and whether in the money or otherwise) including any short position under a derivative, in Tangent Shares, nor any arrangement in relation to any Tangent Shares, nor had Bidco or any person acting in concert with Bidco borrowed or lent any relevant Tangent securities.

In addition, Bidco is interested in 15,546,154 Tangent Shares pursuant to the Acquisition, representing approximately 5.60% of the existing issued share capital of Tangent. It is anticipated that the Acquisition will settle on 8 March 2016.

12 General

Terms and expressions used in this announcement shall, unless otherwise defined therein and save as the context otherwise requires, have the meanings given to them in the Original Offer Document dated 12 February 2016.

WH Ireland, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority is acting for Bidco in connection with the Increased Offer and no-one else and will not be responsible to anyone other than Bidco for providing the protections afforded to customers of WH Ireland or for providing advice in relation to the Increased Offer.

Please note that addresses, electronic addresses and certain other information provided by Tangent Shareholders and other relevant persons for the receipt of communications from Tangent may be provided to an offeror as required under Section 4 of Appendix 4 to the Takeover Code.

Any person who has received this announcement in electronic form or by means of a website publication may request a copy of this announcement in hard copy form and may request that all future documents, announcements and information sent to him in relation to the Increased Offer be in hard copy form. Unless so requested, a hard copy of this announcement will not be sent to you. This announcement and all future documents, announcements and information can be requested in hard copy form (free of charge), by submitting a request in writing to the Company Secretary, Tangent Communications PLC, Threeways House, 40-44 Clipstone Street, London W1W 5DW or by calling the company secretary Jamie Beaumont on +44(0)20 7462 6101.

Further information

This announcement is not intended to, and does not, constitute or form part of any 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 Increased Offer or otherwise. The Increased Offer will be made solely by means of the Revised Offer Document and the Revised Form of Acceptance accompanying the Revised Offer Document, which will contain the full terms and conditions of the Increased Offer, including details of how the Increased Offer may be accepted. Any response to the Increased Offer should be made only on the basis of information contained in the Increased Offer Document. Tangent Shareholders are advised to read the formal documentation in relation to the Increased Offer carefully once it has been despatched.

Overseas territories

The distribution of this announcement in jurisdictions other than the United Kingdom may be restricted by law and the ability of Tangent Shareholders who are not resident in the United Kingdom to participate in the Increased Offer may be affected by the laws of the relevant jurisdictions. Therefore any persons who are subject to the law of any jurisdiction other than the United Kingdom should inform themselves about, and observe, any applicable requirements. 

This announcement has been prepared for the purposes 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 jurisdiction outside of England and Wales. This announcement should not be forwarded or transmitted in or into any jurisdiction in which such act would constitute a violation of the relevant laws in such jurisdiction.

Further information in relation to Overseas Shareholders will be set out in the Revised Offer Document.

Documents published on a website

The following documents will be made available on Bidco's website (http://www.paminvestments.com) by no later than 12.00 noon on the Business Day following the date of this announcement until the end of the Offer Period:

· a copy of this announcement;

· a copy of the Rule 2.7 Announcement;

· a copy of the announcement of the posting of the Original Offer Document;

· the irrevocable commitments procured by Bidco in relation to the Offer;

· the financing documents referred to in the Rule 2.7 Announcement and in paragraph 7;

· the memorandum in respect of the Tangent Share Option Schemes referred to in the Rule 2.7 Announcement;

· Stockdale's consent letter referred to in the Rule 2.7 Announcement;

· WH Ireland's consent letter referred to in the Rule 2.7 Announcement and in respect of this announcement;

· the Confidentiality Agreement;

· the articles of association of Bidco; and

· the Original Offer Document and Form of Acceptance.

The contents of Bidco's website are not incorporated into and do not form part of this announcement.

Forward-looking statements

This document may contain "forward-looking statements" concerning the Tangent Group and the Bidco Group. Generally, the words "anticipate", "believe", "estimate", "expect", "forecast", "intend", "may", "plan", "project", "should" and similar expressions identify forward-looking statements. Such statements reflect the relevant company's current views with respect to future events and are subject to risks and uncertainties that could cause the actual results to differ materially from those expressed in the forward-looking statements. Many of these risks and uncertainties relate to factors that are beyond the companies' abilities to control or estimate precisely, such as changes in general economic and business conditions, changes in currency exchange rates and interest rates, lack of acceptance of new exchange rates and interest rates, introduction of competing products or services, lack of acceptance of new products or services, changes in business strategy and the behaviour of other market participants and therefore undue reliance should not be placed on such statements. Neither Tangent nor Bidco intends or assumes any obligation to update these forward-looking statements other than as required by law.

Dealing disclosure requirements

Under Rule 8.3(a) of the Takeover 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 Takeover 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, 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 http://www.thetakeoverpanel.org.uk/, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. If you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure, you should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129.

Appendix 1

SOURCES OF INFORMATION AND BASES OF CALCULATIONS

In this announcement, unless otherwise stated, or the context otherwise requires, the following bases and sources have been used:

(a) The financial information on Tangent is extracted (without material adjustment) from Tangent's Annual Report and Accounts for the financial year ended 28 February 2015 and the unaudited interim financial statements of Tangent for the six months ended 31 August 2015.

(b) The value attributed to Tangent's entire issued and to be issued share capital as implied by the Increased Offer Price is based on 281,429,851 Tangent Shares in issue (including 3,636,432 Tangent Shares held in treasury) as at close of business on 3 March 2016 (being the latest practicable date prior to the date of this announcement) plus a maximum of 16,735,341 Tangent Shares which will be the result of the vesting or exercise of options and/or settlement of awards in respect of or referable to Tangent Shares which have an exercise price of less than the Increased Offer Price.

(c) All percentages of voting rights, issued share capital and relevant Tangent securities are calculated by reference to the relevant percentage held and in issue outside treasury.

(d) All Closing Prices for Tangent Shares have been derived from the AIM Appendix to the London Stock Exchange Daily Official List.

(e) All references to time in this announcement are to London, UK, time unless otherwise stated.

(f) 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.

(a)

Appendix 2

Disclosure of Interests

Bidco is interested in 15,546,154 Tangent Shares pursuant to the Acquisition, representing approximately 5.60% of the existing issued share capital of Tangent. It is anticipated that the Acquisition will settle on 8 March 2016.

As at close of business on 3 March 2016 (being the latest practicable date before the date of this announcement), persons acting in concert with Bidco were interested in the following Tangent Shares, all of which have been accepted to the Offer:

As at close of business on 3 March 2016 (being the latest practicable date before the date of this announcement), persons acting in concert with Bidco had a right to subscribe for the following Tangent Shares: