TNG.L Regulatory News (TNG)

16 Jun 2005 07:00

Documedia Solutions PLC16 June 2005 Press Release 16 June 2005 Documedia Solutions plc To be renamed Tangent Communications PLC Proposed acquisition of Tangent Communications Ltd Proposed waiver of rule 9 of the City Code Proposed capital increase Proposed name change Application for admission to trading on AIM Documedia Solutions plc ("Documedia" or the "Company") has conditionally agreedto acquire the entire issued share capital of Tangent Communications Ltd ("Tangent Group" or "Tangent"), the 100 per cent parent company of London Digital Printing Group Ltd. ("London Digital") ("the Acquisition"). London Digital provides a creative and digital print service utilising leading edge technology. Its business has many similar and complementary characteristics to Documedia and the Directors believe the Acquisition represents an opportunity to acquire a business with significant upside potential in its own right and additional synergistic benefits when combined with the existing business. Highlights • The Acquisition constitutes a reverse takeover of Documedia and requires the prior approval of shareholders • The holders of 54 per cent. of Documedia's Ordinary Shares have undertaken to vote in favour of the resolutions at the EGM • It is proposed that the Company changes its name to Tangent Communications PLC ("Tangent") following the EGM • Nicholas and Timothy Green, Directors of London Digital would then be appointed to the Board as Joint Chief Executives • Acquisition of the entire issued share capital of Tangent in consideration of the issue of 55 million New Ordinary Shares • The Consideration Shares will represent approximately 57.8 per cent. of the Enlarged Share Capital • Nicholas Green said, "Advertisers want to talk to people directly and as individuals and we have the technology that enables them to do it. The combined company we have created today will give us the platform to take advantage of the massive shift in marketing spend away from traditional outlets towards personalised messaging in all its forms. The combined business will have some 105 employees and pro-forma sales of £8 million. Merging the two businesses will enable the immediate rationalisation of properties in central London and removes the duplication of production resources which, in turn, will lead to significant cost savings for the enlarged business and will provide immediate capacity to grow sales." Information on Tangent and London Digital London Digital was founded in 1975 as The London Black and White CompanyLimited. Since 1997 it has become a supplier of digital print and customiseddirect marketing services. Tangent acquired London Digital in July 2000. Michael Green, the former Chairmanof Carlton Communications plc owns 100 per cent. of Tangent. London Digital has its production operations and offices in Soho, centralLondon, with 30 full-time employees. It provides a creative and digital printservice utilising leading edge technology and was recently selected by HewlettPackard as one of its five UK Platinum partners. London Digital was also thefirst company in the UK to install DirectSmile imaging software which interfacesexclusively with Hewlett Packard printing technology. London Digital has a range of in-house scanning, reprographic finishing andphotographic facilities to support clients' production needs and a large formatbusiness, which supplies services to the advertising, architecture, museum andfashion communities. Many of the UK's leading direct marketing agencies work with London Digital,including Tequila, and members of the WPP Group plc. The Directors believe thatthese relationships can help the Enlarged Group to develop concepts andsolutions for innovative marketing campaigns that incorporate print and,increasingly, multi-media distribution. Further details concerning the background to and reasons for the proposedacquisition, details on the companies, the proposed board of directors andadmission to AIM are set out below. For further information, please contact: Tangent Communications Nicholas Green/Timothy Green Tel: + 44 (0) 20 7663 6464 Documedia Solutions plcHerbert Maxwell Tel: + 44 (0) 20 7663 6464 Collins Stewart Limited Chris Wells/Seema Paterson Tel: + 44 (0) 20 7523 8350 Brunswick Andrew Garfield Tel: + 44 (0) 20 7396 5337 Collins Stewart, which is regulated in the United Kingdom by The FinancialServices Authority, is nominated adviser and broker to the Company and will actas nominated adviser and broker to the Company following Admission, and will notbe responsible to anyone other than the Company for providing the protectionsafforded to clients of Collins Stewart or for providing advice in relation tothe matters contained in this announcement or any matter concerning theProposals or Admission. The responsibility of Collins Stewart as nominatedadviser and broker to the Company after Admission are and will be owed solely tothe London Stock Exchange. This Announcement does not constitute an offer to sell or an invitation tosubscribe for, or the solicitation of an offer to buy or subscribe for NewOrdinary Shares in any jurisdiction where such an offer or solicitation isunlawful and is not for distribution in or into the United States, Canada,Japan, Australia, Ireland or South Africa. The New Ordinary Shares have notbeen, and will not be registered under the United States Securities Act of 1933(as amended) or under the applicable laws of Canada, Japan, Australia, Irelandor South Africa and, subject to certain exceptions, may not be offered for saleor subscription, or sold or subscribed, directly or indirectly, within theUnited States, Canada, Japan, Australia, Ireland or South Africa or to or by anynational, resident or citizen of such countries. The distribution of thisannouncement in other jurisdictions may be restricted by law and thereforepersons into whose possession this announcement comes should inform themselvesabout and observe any such restriction. Any failure to comply with theserestrictions may constitute a violation of the securities laws of any suchjurisdictions. No person is authorised, in connection with the Proposals, togive any information or make any representation other than as contained in thisannouncement and, if given or made, such information or representation must notbe relied upon as having been authorised by the Company or Collins Stewart ortheir respective directors. Other than shareholders of Documedia Solutions plc, the Admission Document dated16 June 2005 (which, inter alia, incorporates a circular to Shareholders) ("theCircular") is directed only at persons having professional experience in mattersrelating to investments (being "investment professionals" within the meaning ofarticle 19(5) of the Financial Services and Markets Act 2000 (FinancialPromotion) Order 2001) and the investments or investment activities to which theCircular relates are available only to such persons and will be engaged in onlywith such persons. Persons who do not have professional experience in mattersrelating to investments (and who are not Shareholders) should not rely on theCircular nor take any action upon it, but should return it immediately toCollins Stewart, 88 Wood Street, London EC2V 7QR. The following information has been extracted without material adjustment fromthe Admission document incorporating, inter alia, a circular to DocumediaShareholders dated 16 June 2005 (the "AIM admission document") to be sent toDocumedia's shareholders today. Introduction It was announced today that the Company has conditionally agreed, subject to,inter alia, Shareholders' approval, to acquire the whole of the issued sharecapital of Tangent Communications Ltd, the 100 per cent. parent company ofLondon Digital Printing Group Ltd. The consideration for the Acquisition is tobe satisfied by the issue to the Vendor of a total of 55 million New OrdinaryShares, which, at the issue price of 5 pence per share, values Tangent at £2.75million. At the closing price of 5.88 pence (the latest closing price prior tothe posting of the AIM admission document) the value of Tangent is £3.23million. The Issue Price represents a discount of approximately 15 per cent. tothe closing price prior to the posting of the AIM admission document. The Acquisition constitutes a reverse takeover of the Company under the AIMRules by virtue of its size and a change of control under the City Code. Theprior approval of Shareholders at the EGM is therefore required. If theResolutions are duly passed at the EGM, the Company's existing quotation on AIMwill be cancelled and the Company will apply for the Enlarged Share Capital tobe admitted to trading on AIM. Background to and Reasons for Acquisition Following the sale of its stationery business in October 2004, Documediarecently announced its first annual trading profit. Documedia is nowconcentrating on the core business of its Marketing Services. This is its"on-line" platform that allows large corporates to generate local marketingcampaigns whilst controlling centrally their brand and spend. Recent newbusiness wins continue the encouraging trend of last year with furtherendorsement from major companies and a number of trials of the Company's servicenow in progress. The Existing Directors are however conscious that the size of the Company doesrestrict its capacity for growth. They have therefore reviewed the market placefor other businesses operating in the same sector to expand and maximise theutilisation of the Company's current facility. Operators that contain similar"back office" facilities with modern "on-line" technology are few. London Digital's business has many similar characteristics to the Companyincluding the opportunity to combine their operating facilities. The combinationshould give much greater market visibility, opportunity for cross selling,utilisation of technology and substantial operational efficiencies LondonDigital also brings a strong management team. The Existing Directors believe that the Acquisition represents an opportunity toacquire a business with significant upside potential in its own right andadditional synergistic benefits when combined with the existing business of theCompany. The Existing Directors believe that this potential, if realised,justifies the Acquisition and the price being paid to acquire Tangent andtherefore the dilution to existing shareholders caused by the issue of the NewOrdinary Shares. It is proposed that the name of the Company be changed to Tangent CommunicationsPLC. Information on Tangent and London Digital London Digital was founded in 1975 as The London Black and White CompanyLimited. Since 1997 it has become a leading supplier of digital print andcustomised direct marketing services. Tangent acquired London Digital in July 2000. Michael Green, the former chairmanof Carlton Communications plc owns 100 per cent. of Tangent. London Digital has its production operations and offices in Soho central Londonwith 29 full-time employees. It provides a creative and digital print serviceutilising leading edge technology and was recently selected by Hewlett Packardas one of its five UK Platinum partners. London Digital was also the firstcompany in the UK to install DirectSmile imaging software which interfacesexclusively with Hewlett Packard printing technology. London Digital has a range of services, including in-house scanning,reprographic finishing and photographic facilities to support clients'production needs and a large format business which supplies services to theadvertising, architecture, museum and fashion communities. Many of the UK's leading direct marketing agencies work with London Digitalincluding Tequila, and members of the WPP Group PLC. The Directors believe thatthese relationships can help the Enlarged Group to develop concepts andsolutions for innovative marketing campaigns incorporating print and,increasingly, multi-media distribution. The business of London Digital comprises: DIGITAL PRINTING -- ON DEMAND SERVICES: These include small and large formatdigital printing providing full colour, fast turn around, cost effectiveservices for over 200 clients in the retail, creative and design agencies,financial services and architecture industries. London Digital is able to achieve fast turnaround of large volume orders. Recentwork undertaken includes overnight production of 15,000 copies of KPMG'ssummary of the 2005 Budget. DIRECT MARKETING SERVICES: In April 2003, London Digital launched a newdivision, London Digital Marketing ("LDM") to help develop direct marketingcampaigns for clients directly and with agencies. Examples of campaigns include:Sainsburys' "retention birthday mailer" for which London Digital producesapproximately 300,000 personalised birthday cards each month for Nectar Cardholders. This campaign, managed by Tequila, (the largest UK direct marketingagency), won Gold, Silver and Bronze awards at the Sales Promotions Awards 2005.London Digital also produces loan packs which are posted daily for a leadingloan company. London Digital connects directly to their call centre and web siteand downloads data on a daily basis to produce highly customised loan packswhich are printed and released in the post the same day. LDM has invested in DirectSmile imaging software which enables personalisedunique images to be included within digital prints. In addition to using printas the medium for direct marketing, LDM is able to format its digital printingoutput for e-mail and SMMS. London Digital's Hewlett Packard printing pressesare able to personalise in both images and text on a page by page basis. Financial Information on London Digital The trading record of London Digital set out below is extracted from theAccountants' Report in Part IV of the AIM admission document. Year ended 31 December 2004 £'000Turnover 2,499Operating profit 19Profit before taxation 32 Current trading and future prospects of the Tangent Group Current trading for the Tangent Group in 2005 is in line with budget, withbusiness across both of its disciplines remaining strong. On demand serviceshave increased in 2005 with particular growth coming from the financial servicessector in the run up to the 2005 Budget. The core business, direct marketing,has continued to grow during this year. The Directors believe that new agencieswill be receptive to the personalisation opportunity which the business ofLondon Digital presents and the number of campaigns moving from traditionalprinting methods over to digital continues. Strategy of the Enlarged Group The Enlarged Group will, from Admission, be a marketing services company. Italready has a diversified client base, and will offer a wide range ofleading-edge services. The Directors believe that the size of the Enlarged Group and the combination ofthe different technology offerings of Documedia and London Digital respectivelywill place the Enlarged Group in a strong position to increase its market share.Following Admission, the Enlarged Group intends to capitalise on its strength toincrease its share of the growing digital print market, particularly in the areaof personalised marketing. In 2004 over £1 billion was spent on direct marketingin the United Kingdom. The formation of the Enlarged Group will create a group with the scale andcapacity to pitch for larger contracts than those currently being undertaken byLondon Digital or Documedia individually, and the ability to supply a higherproportion of clients' digital production requirements. The increased scale ofthe Enlarged Group's operations will also create increased buying power whichthe Directors intend to use to negotiate better terms with technology andmaterial suppliers. London Digital and Documedia have complementary businesses in personalisedmarketing whereby London Digital is primarily focused on direct mail andDocumedia specialises in marketing brochures and posters produced via on-lineordering systems. The Enlarged Group intends to use its combined experience inthese markets to cross-sell its services. The Enlarged Group intends to explore the opportunity to integrate its servicesinto a digital network which could develop business internationally,particularly with agencies with global operations. The New Board has confirmed that the existing employment rights, includingpension rights, of all employees will be fully safeguarded. Financial Effects of the Acquisition The Acquisition is expected to increase substantially the revenues of the Groupand strengthen the Group's balance sheet. It is a term of the Acquisition thatLondon Digital's balance sheet will contain at least £500,000 of cash oncompletion of the Acquisition. An unaudited pro forma statement of consolidated net assets of the EnlargedGroup, prepared for illustrative purposes only, showing the impact of theAcquisition and the Capital Increase is set out in Part VI of the AIM admissiondocument. Terms of the Acquisition The Company has agreed to acquire the entire issued share capital of Tangent fora consideration of £2,750,000 to be satisfied by the issue to the Vendor of theConsideration Shares. The Company proposes to issue the Consideration Sharespursuant to the Acquisition at the Issue Price. The Issue Price represents adiscount of approximately 10 per cent. to the average share price for the threemonths to 15 June 2005 and a discount of approximately 4 per cent. to theaverage share price for the year to 15 June 2005 (being the latest practicabledate prior to the publication of the AIM admission document). The ConsiderationShares will represent 57.8 per cent. of the Enlarged Share Capital. TheConsideration Shares will be issued credited as fully paid and will rank paripassu in all respects with the Existing Ordinary Shares, including rights todividends. The Acquisition is conditional inter alia on: (i) the approval of the Resolutions to be proposed at the EGM; (ii) the receipt by Collins Stewart of confirmation that the Panel will not require the Concert Party to make a general offer to acquire the whole of the share capital of the Company; and (iii) Admission Further information on the Acquisition Agreement can be found in the AIMadmission document. Acquisition of Shares by Proposed Directors Messrs. Nicholas and Timothy Green have agreed to purchase 2,500,000 newOrdinary Shares each from the Vendor. The transaction will take place on theday of completion of the Acquisition or shortly thereafter. The price will beequal to the Issue Price and is payable in cash. New Equity Incentive Proposals The Board intends, following Admission, to implement proposals to provide forequity incentives to Directors and other senior managers through the grant ofoptions to acquire Ordinary Shares. These incentives will be granted eitherunder a new scheme or through the Schemes up to a maximum aggregate amount,together with the existing options under the Schemes, of 15 per cent. of theEnlarged Share Capital. The new incentives will be administered by theRemuneration Committee of the Board. The Directors intend that options grantedunder these proposals will be subject to a range of challenging performancecriteria appropriate to roles of participating executives. New Board On Admission, Messrs. Marsland, Bendall, O'Connor, Stanley and Tayler will eachresign as directors of the Company and Messrs. Caldecote, Timothy Green andNicholas Green will join the Board. The New Board will comprise: • Nicholas Green, JOINT CHIEF EXECUTIVE OFFICER (AGED 32). Prior to joining London Digital, Nicholas was part of the launch team of Advertising.com Europe. Advertising.com is a performance based marketing company which was acquired by AOL in 2004 for $439 million. Nicholas was involved in sales and marketing and the acquisition of DayRates. Prior to this Nicholas spent 6 years at Teletext Ltd, joining in 1992 for the launch and held a number of positions which included in his last years Group Advertising Manager with specific responsibilities across Display sales. Prior to this Nicholas spent one and a half years at the Daily Telegraph newspaper on classified sales. • Timothy Green, JOINT CHIEF EXECUTIVE OFFICER (AGED 29). Prior to joining London Digital, Timothy was part of the launch team of Unanimis Consulting Ltd. Unanimis Consulting Ltd is an internet sales company providing commercial services for web properties such as ebay, lastminute.com and the BBC. Prior to this Timothy was part of the commercial launch team for Ask Jeeves UK and responsible for £1 million of annual sales. Prior to this Timothy spent 1 year at Euromoney Institutional Investor plc in a sales role following his degree at Nottingham University. • Piers Caldecote, NON-EXECUTIVE CHAIRMAN (AGED 58). Piers Caldecote was an associate director at Carlton Communications Plc between 1990 to 2004 covering strategy and mergers and acquisitions. Prior to that, he worked in the city as an investment analyst, latterly for Chase Manhattan Securities. • Herbert Maxwell, FINANCE DIRECTOR (AGED 58) After obtaining an engineering degree at Cambridge University, Herbert joined KPMG in 1969. He has been finance director of a number of entrepreneurial, growing companies. Before joining Documedia he was finance director of MSL Group Ltd where he was involved in a management buyout and subsequent trade sale. He has been the finance director of Documedia since it floated in May 2000. Following Admission, Warren Tayler will cease to be a Director and to otherwisehave an active involvement in the affairs of the Enlarged Group. Accordingly,Warren Tayler intends to reduce his shareholding in the Company, as does theExebridge Trust whose beneficiaries include members of his family. The City Code The Acquisition of Tangent gives rise to certain considerations under the CityCode. Brief details of the Panel, the City Code and the protections they affordto Shareholders are described below. The City Code has not and does not seek to have, the force of law. It has,however, been acknowledged by both the UK government and other UK regulatoryauthorities that those who seek to take advantage of the facilities of thesecurities markets in the UK should conduct themselves in matters relating totakeovers in accordance with high business standards and so according to theCity Code. The City Code is issued and administered by the Panel. The City Code applies toall takeovers and merger transactions, however effected, where the offereecompany is, inter alia, a listed or unlisted public company resident in the UKand to certain categories of private limited companies. Documedia is such acompany and its Shareholders are entitled to the protections afforded by theCity Code. Pursuant to Rule 9 of the City Code, any person who acquires shares which, whentaken together with shares already held by him or shares held or acquired bypersons acting in concert with him, carry 30 per cent. or more of the votingrights of a company subject to the City Code, is normally required to make ageneral offer to all shareholders in that company in cash to acquire theremaining shares in the company not already held by them at the highest pricepaid for any shares in the Company in the previous 12 months by the personrequired to make the offer or any person acting in concert with him. Further, when any person, or group of persons acting in concert, holds shareswhich carry not less than 30 per cent. but not more than 50 per cent. of thevoting rights of a company subject to the City Code, such person or persons, maynot normally acquire further shares which increase the percentage of the votingrights in the company held by them, without making a general offer to allshareholders in that company in cash to acquire the remaining shares in thecompany not already held by them at the highest price paid for any shares in theCompany in the previous 12 months by the person required to make the offer orany person acting in concert with him. Under the City Code, persons acting in concert comprise persons who, pursuant toan agreement or understanding (whether formal or informal), actively co-operate,through the acquisition by any of them of shares in a company, to obtain orconsolidate control of that company. The Panel has deemed the Vendor, NicholasGreen and Timothy Green to be acting in concert for the purposes of the CityCode. Following Admission and on completion of the Acquisition and the transactionsdescribed in "Acquisition of Shares by Proposed Directors" earlier, the ConcertParty's shareholding will amount to approximately 57.8 per cent. of the EnlargedShare Capital which will be held as follows: Number of Ordinary Shares Percentage of Enlarged Share Capital following Admission Michael Green 50,000,000 52.6% Timothy Green 2,500,000 2.6% Nicholas Green 2,500,000 2.6% Nicholas Green TOTAL 55,000,000 57.8% Notes 1 It is expected that Nicholas and Timothy Green will also participate in theequity incentive proposals described in the paragraph above titled "New EquityIncentive Proposals" Further information on the members of the Concert Party is set out in paragraph2 of Part VII of the AIM admission document. When a concert party holds over 50 per cent. in a company, no obligationsnormally arise from acquisitions by any member of the concert party. However,the acquisition by a single member of the concert party who holds less than 50per cent. of shares sufficient to increase his holding to 30 per cent. or more,may be regarded by the Panel as giving rise to an obligation to make an offerfor the entire company. The Panel has agreed however to waive the obligation to make a general offerthat would otherwise arise on completion of the Proposals, subject to theapproval of independent Shareholders. Accordingly, Resolution 2 is beingproposed at the Extraordinary General Meeting and will be taken on a poll. To bepassed, Resolution 2 will require the approval of a simple majority of votescast on that poll. No member of the Concert Party will be entitled to vote onResolution 2. Following completion of the Proposals, the members of the Concert Party willbetween them hold more than 50 per cent. of the issued voting share capital ofthe Company and (for so long as they continue to be treated as acting inconcert) may accordingly increase their aggregate holding without incurring anyfurther obligation under Rule 9 of the Code to make a general offer. The Panelshould be consulted, however, before any individual member of the Concert Partyincreases his holding to 30 per cent. or more or, if such holding is already notless than 30 per cent. (but not more than 50 per cent.) before any increase ofsuch holding. No member of the Concert Party has purchased Ordinary Shares in the 12 monthspreceding the date of the AIM admission document. The Rule 9 Waiver will beinvalid if purchases of Ordinary Shares are made by any member of the ConcertParty in the period between the date of the AIM admission document and the EGM.Each member of the Concert Party has undertaken to the Company that he will notmake any such purchases of Ordinary Shares. Lock-up Arrangements The Vendor has agreed that (save in limited circumstances) for a period of 6months from Admission he will not dispose of any Ordinary Shares. In thesubsequent 6 month period any disposals made by the Vendor are to be madethrough Collins Stewart or the then broker of the Company and in such orderlymanner as Collins Stewart or such broker shall acting reasonably determine. By separate deeds, each other member of the Concert Party, namely Nicholas Greenand Timothy Green, has entered into lock-up arrangements similar to thoseapplying to the Vendor as outlined above except that each of Nicholas Green andTimothy Green has agreed that (save in limited circumstances) for a period of 12months from Admission he will not dispose of any Ordinary Shares. Dividend Policy The Company is currently unable to pay a dividend due to the deficit in itsdistributable reserves. In the medium to long term however, the New Board intends to pursue aprogressive dividend policy in line with the Enlarged Group's achieved rate ofgrowth in earnings over time whilst maintaining a suitable level of dividendcover and retaining sufficient earnings to fund the development and growth ofthe Enlarged Group. The New Ordinary Shares will rank in full for all dividends or otherdistributions declared, made or paid in respect of the ordinary share capital ofthe Company following Admission. Financial Calendar It is the Company's present intention to retain the current year end of Februaryfor the Enlarged Group. The New Board will reassess this position once theEnlarged Group has started trading and will inform shareholders as necessary ofany proposed changes. Annual General Meeting The Directors' report and the audited accounts of the Company in respect of thefinancial year ended 28 February 2005 were sent to Shareholders on 6 June 2005.Together with the AIM admission document, the notice convening the AnnualGeneral Meeting will be sent to Shareholders. The resolutions to be proposed at the Annual General Meeting will be as follows: (a) to receive the report of the Directors and the audited accounts for the financial year ended 28 February 2005; (b) to appoint UHY Hacker Young as auditors and to authorise the directors to fix their remuneration; (c) to re-elect John Bendall as a director of the Company; (d) to re-elect Warren Tayler as a director of the Company; (e) to re-elect James Marsland as a director of the Company; and (f) to transact any other business of the Company. Admission to AIM, Dealings and Settlement The Acquisition constitutes both a reverse takeover of the Company under the AIMRules by virtue of its size and a change of control under the City Code. TheAcquisition therefore requires the prior approval of Shareholders at theExtraordinary General Meeting to be held on 11 July 2005. Resolutions will beproposed at the EGM, inter alia, to approve the Acquisition. If the Resolutionsare duly passed at the EGM, the Company's existing quotation on AIM will becancelled and the Company will apply for the Enlarged Share Capital to beadmitted to trading on AIM. It is expected that dealings on AIM and settlement in CREST in the ExistingOrdinary Shares will continue until close of business on 11 July 2005. At thattime it is intended that the register of members will be closed for transfers ofExisting Ordinary Shares held in both certificated and uncertificated form. Application will be made for the Enlarged Share Capital to be admitted totrading on AIM. Subject to the approval of shareholders being given at the EGMand completion of the Acquisition, it is anticipated that Admission will becomeeffective and that trading in the Ordinary Shares on AIM and settlement in CRESTwill commence on the trading day following the EGM. Extraordinary General Meeting At the end of the AIM admission document there is a notice convening anExtraordinary General Meeting of the Company, which is to be held at 10.05 a.m.on -11 July 2005, or as soon thereafter as the Annual General Meeting of theCompany convened for 10.00 a.m. on -11 July 2005 is concluded or adjourned, atthe offices of Rosenblatt, 9-13 St. Andrew Street, London EC4A 3AF. TheResolutions to be proposed at the EGM will be as follows: (a) to approve the Acquisition; (b) to approve the Waiver; (c) to increase the authorised share capital of the Company from £575,000 to £1,426,700 by the creation of 85,170,000 Ordinary Shares; (d) to grant authority to the directors of the Company pursuant to section 80 of the Act to allot relevant securities, inter alia, as consideration of the Acquisition and for other limited purposes; (e) to empower the directors of the Company pursuant to section 95 of the Act to allot equity securities for cash otherwise than pro rata to existing Shareholders up to an aggregate nominal value of £47,556.67, being approximately 5 per cent. of the Enlarged Share Capital; and (f) to change the name of the Company to Tangent Communications PLC. Resolutions (a) to (d) (inclusive) will be proposed as ordinary resolutions andresolutions (e) to (f) (inclusive) will be proposed as special resolutions. Irrevocable undertakings The Existing Directors (and their immediate families and connected persons),have given irrevocable undertakings to vote in favour of the resolutions to beproposed at the EGM in respect of, in aggregate, 21,665,893 Ordinary Shares,representing approximately 54.0 per cent. of the existing issued ordinary sharecapital of the Company. Recommendation The Existing Directors, who have been so advised by Collins Stewart, considerthat the Proposals (including the waiver of any requirement under Rule 9 of theTakeover Code for the Concert Party, to make a general offer to Shareholders) tobe fair and reasonable. In providing advice to the Existing Directors, CollinsStewart has taken into account the Existing Directors' commercial assessments.The Existing Directors also consider the Acquisition including the Waiverreferred to above to be in the best interests of the Company and itsShareholders as a whole. Accordingly, the Existing Directors recommend that youvote in favour of the Resolutions to be proposed at the Extraordinary GeneralMeeting, as they (and their immediate families and connected persons) haveirrevocably undertaken to do in respect of their own shareholdings, which inaggregate amount to 54.0 per cent. of the issued share capital of the company. APPENDIX EXPECTED TIMETABLE Latest time and date for receipt of Forms of Proxy for the Annual 10.00 a.m. on 9 JulyGeneral MeetingLatest time and date for receipt of Forms of Proxy 10.05 a.m. on 9 July for the Extraordinary General MeetingAnnual General Meeting 10.00 a.m. on 11 JulyExtraordinary General Meeting * 10.05 a.m.* - on 11 JulyDealings in the New Ordinary Shares to commence and in the Existing 12 July 2005Ordinary Shares to recommence on AIM and CREST accounts credited Definitive share certificates despatched by 19 July 2005* or as soon thereafter as the AGM has concluded ISSUE STATISTICS * Total number of Ordinary Shares in issue prior to the Proposals 40,113,340 Number of New Ordinary Shares being issued pursuant to the Acquisition 55,000,000Total number of Ordinary Shares in issue following the Proposals 95,113,340 Issue Price 5pMarket capitalisation of the Company at the Issue Price immediately following Admission £4,755,667 DEFINITIONS The following definitions apply throughout the AIM admission document unlessotherwise stated or the context otherwise requires: "Acquisition" the proposed acquisition by the Company of the entire issued share capital of Tangent from the Vendor pursuant to the Acquisition Agreement"Acquisition Agreement" the conditional agreement between the Vendor and the Company dated16 June 2005 relating to the acquisition by the Company of the entire issued share capital of Tangent Communications Ltd, particulars of which are set out in paragraph 11.1.2 of Part VII of the AIM admission document"Admission" the admission of the Enlarged Share Capital to trading on AIM becoming effective in accordance with the AIM Rules"AIM" the market of that name operated by the London Stock Exchange"AIM Rules" the rules for AIM companies as in force at the date of the AIM admission document issued by the London Stock Exchange"Approved Scheme" the Documedia Solutions plc Approved Share Option Scheme"Articles" the Company's articles of association"Capital Increase" the proposed increase of the share capital of the Company to be effected pursuant to Resolution 3 set out in the notice of EGM at the end of the AIM admission document"City Code" the City Code on Takeovers and Mergers"Collins Stewart" Collins Stewart Limited"Combined Code" the principles of good governance and code of practice prepared by the Committee on Corporate Governance chaired by Sir Ronald Hampel, published in June 1998 as amended from time to time"Company" or "Documedia" Documedia Solutions plc and its subsidiaries "Concert Party" Michael Green, Nicholas Green and Timothy Green"Consideration Shares" the 55,000,000 New Ordinary Shares in aggregate to be issued to the Vendor at the Issue Price pursuant to the terms of the Acquisition Agreement"CREST" the electronic settlement system operated by CRESTCo Limited, which facilitates the transfer of title to shares in uncertificated form"CREST Regulations" the Uncertificated Securities Regulations 2001 (SI 2001/No. 3755)"Directors" the Existing Directors and the New Directors"EGM" or "Extraordinary General Meeting" the extraordinary general meeting of the Company convened for 10.05 a.m. on 11 July 2005, or as soon thereafter as the Annual General Meeting of the Company convened for 10.00 a.m. on 11 July 2005 is concluded or adjourned or any adjournment thereof, notice of which is set out at the end of the AIM admission document"EMI Share Option Scheme" the Documedia Solutions plc EMI Share Option Scheme"Enlarged Group" the Group as enlarged by the Acquisition"Enlarged Share Capital" the issued ordinary share capital of the Company on Admission "ESOT" the Documedia Solutions plc Employee Share Ownership Trust"Existing Directors" or "Board" the existing directors of Documedia, namely Warren Tayler, John Bendall, James Marsland, Herbert Maxwell, Mark O'Connor and Nicholas Stanley"Existing Ordinary Shares" the 40,113,340 existing issued ordinary shares of 1p each in the Company at the date of the AIM admission document"Form of Proxy" the form of proxy accompanying this document to be used by Shareholders in respect of the EGM"FSA" The Financial Services Authority"FSMA" the Financial Services and Markets Act 2000"Group" Documedia Solutions plc and its subsidiaries, immediately prior to Admission"Issue Price" 5 pence per New Ordinary Share"London Digital" London Digital Printing Group Ltd, a wholly owned subsidiary of Tangent through which the business of the Tangent Group is principally conducted"London Stock Exchange" the London Stock Exchange plc"New Board" the new board of the Company following Admission comprising Nicholas Green, Timothy Green, Piers Caldecote and Herbert Maxwell"New Directors" or "Proposed Directors" Nicholas Green, Timothy Green and Piers Caldecote"New Ordinary Shares" the new Ordinary Shares to be allotted and issued pursuant to the Proposals and to be issued to the Vendor as consideration pursuant to the Acquisition Agreement"Official List" the Official List of the UK Listing Authority "Ordinary Shares" Ordinary shares of 1p each in the capital of the Company"Panel" The Panel on Takeovers and Mergers"POS Regulations" The Public Offers of Securities Regulations 1995"Proposals" together, the proposed Acquisition, Capital Increase and Admission"Resolutions" the resolutions to be proposed at the EGM, as set out in the notice of EGM at the end of the AIM admission document"Schemes" together the Approved Scheme, the Unapproved Scheme and the EMI Share Option Scheme "Shareholders" holders of Existing Ordinary Shares "Tangent Communications Ltd" Tangent Communications Ltd "Tangent Communications Ltd Shares" ordinary shares of £1 each in the capital of Tangent Communications "Tangent Group" Tangent Communications Ltd and its subsidiaries "Unapproved Scheme" the Documedia Solutions plc Unapproved Share Option Scheme "Vendor" or "Michael Green" Michael Green "Waiver" the waiver by the Panel of the obligation of the Concert party to make a general offer under Rule 9 of the City Code Collins Stewart, which is regulated in the United Kingdom by The FinancialServices Authority, is nominated adviser and broker to the Company and will actas nominated adviser and broker to the Company following Admission and no oneelse, and will not be responsible to anyone other than the Company for providingthe protections afforded to clients of Collins Stewart or for providing advicein relation to the matters contained in this announcement or any matterconcerning the Proposals or Admission. The responsibility of Collins Stewart asnominated adviser and broker to the Company after Admission are and will be owedsolely to the London Stock Exchange. This Announcement does not constitute an offer to sell or an invitation tosubscribe for, or the solicitation of an offer to buy or subscribe for NewOrdinary Shares in any jurisdiction where such an offer or solicitation isunlawful and is not for distribution in or into the United States, Canada,Japan, Australia, Ireland or South Africa. The New Ordinary Shares have notbeen, and will not be registered under the United States Securities Act of 1933(as amended) or under the applicable laws of Canada, Japan, Australia, Irelandor South Africa and, subject to certain exceptions, may not be offered for saleor subscription, or sold or subscribed, directly or indirectly, within theUnited States, Canada, Japan, Australia, Ireland or South Africa or to or by anynational, resident or citizen of such countries. The distribution of thisannouncement in other jurisdictions may be restricted by law and thereforepersons into whose possession this announcement comes should inform themselvesabout and observe any such restriction. Any failure to comply with theserestrictions may constitute a violation of the securities laws of any suchjurisdictions. No person is authorised, in connection with the Proposals, togive any information or make any representation other than as contained in thisannouncement and, if given or made, such information or representation must notbe relied upon as having been authorised by the Company or Collins Stewart ortheir respective directors. Other than shareholders of Documedia Solutions plc, the Admission Document dated16 June 2005 (which, inter alia, incorporates a circular to Shareholders) ("theCircular") is directed only at persons having professional experience in mattersrelating to investments (being "investment professionals" within the meaning ofarticle 19(5) of the Financial Services and Markets Act 2000 (FinancialPromotion) Order 2001) and the investments or investment activities to which theCircular relates are available only to such persons and will be engaged in onlywith such persons. Persons who do not have professional experience in mattersrelating to investments (and who are not Shareholders) should not rely on theCircular nor take any action upon it, but should return it immediately toCollins Stewart, 88 Wood Street, London EC2V 7QR. This information is provided by RNS The company news service from the London Stock Exchange