Tissue Regenix Group Regulatory News (TRX)

10 Jun 2005 07:01

Torex Retail PLC10 June 2005 Friday 10 June 2005 TOREX RETAIL PLC TOREX RETAIL ENTERS HOSPITALITY SYSTEMS MARKET AND EXPANDS GEOGRAPHIC PRESENCE WITH £72.7 MILLION OFFER FOR XN CHECKOUT HOLDINGS PLC • Entry into complementary Hospitality & Leisure sector of retail systems market:- - Market leader in UK managed pubs & restaurants - Buoyant market conditions - Leading products based on modern technology - Enhances potential for organic growth • Increases critical mass and scale:- - Adds initial 40,000 installed EPOS devices worldwide - Strong blue chip customer base including Mitchells & Butlers, Wolverhampton & Dudley, the Spirit Group, Young's and Stena Line - High proportion of recurring maintenance and support revenue streams • Strengthens Global Footprint • Transaction meets with Torex Retail's strict criteria:- - Expected to have accretive effect on earnings per share in first year (*) - Profitable business with established client base - Potential operational synergies and economies of scale within enlarged group - Immediate cross-selling opportunities from enhanced customer base and geographic reach • Recommended Offer: for each XN Checkout Share 2.547 New Torex Retail Shares - Values XN Checkout at approximately £72.7m (*) This statement does not constitute a profit forecast nor should it beinterpreted to mean that future earnings per share of Torex Retail following theOffer becoming or being declared unconditional in all respects will necessarilymatch or exceed historical earnings per share of Torex Retail Rob Loosemore, Chairman of Torex Retail, commented: "This transaction will bring an additional dimension to Torex Retail, becoming amarket leader in the rapidly growing complementary sectors of hospitality andgaming. The Enlarged Torex Group not only provides further organic revenuegrowth opportunities and operational synergies and economies of scale, but alsocreates a broader based business with a genuine global footprint." Ed Dayan, Chief Executive of XN Checkout, commented: "We are looking forward to becoming part of one of the world's largest retailsolutions providers. We believe this will enhance our ability to win businessfrom the large multi-national hospitality, hotel and gaming chains. We areparticularly excited about the opportunity to sell our market leading productsthrough Torex Retail's recently established US operation." There will be an analyst briefing today at 10.30am at the offices of CitigateDewe Rogerson, 3 London Wall Buildings, London Wall, EC2. Ends. Contacts: Torex Retail PlcRob Loosemore - ChairmanRichard Thompson - Finance DirectorTel: 020 7638 9571 until middayThereafter: 0870 050 9900 XN Checkout Holdings PlcEd Dayan - Chief ExecutiveChris Ford - Finance DirectorTel: 020 7638 9571 until middayThereafter: 01582 869 600 Citigate Dewe RogersonGinny PulbrookSeb HoyleTel: 020 7638 9571 For further information on XN Checkout please see: www.xncheckout.com About Torex Retail plc - www.torexretail.com Torex Retail is a leading independent provider of innovative retail technologysolutions to many of the world's principal retailers. Since the company'sflotation in March 2004 Torex Retail has achieved rapid growth across all of itsmarkets and has rigorously pursued its goal of becoming the provider of choice.As a result, the company now has a presence in all of the major markets aroundthe world and has built a strong platform for future growth in line with itsstrategy. Torex Retail's product and solution set spans high street and out-of-town retailas well as the petroleum and convenience sector and with over 2,000 customerrelationships, including Tesco, Woolworth, Selfridges, Shell and Argos, thecompany has earned a leading reputation amongst retailers. Torex Retail has morethan 1,000 staff based across the UK, Europe, South-East Asia and the UnitedStates. Notice: The XN Checkout Directors accept responsibility for the information contained in this document relatingto XN Checkout and its subsidiaries, themselves and their immediate families and connected persons. TheTorex Directors accept responsibility for all the other information contained in this document. To thebest of the knowledge and belief of the Torex Directors and the XN Checkout Directors (who have taken allreasonable care to ensure that such is the case) the information contained herein for which they arerespectively responsible is in accordance with the facts and does not omit anything likely to affect theimport of such information. This document has been issued by Evolution Securities Limited. Evolution Securities Limited which isregulated in the UK by the Financial Services Authority, acting exclusively for Torex Retail inconnection with the Offer and no one else and will not be responsible to anyone other than Torex Retailfor providing the protections afforded to clients of Evolution Securities Limited nor for providingadvice in relation to the Offer. No offer or invitation to acquire or exchange securities in Torex Retail or XN Checkout is being madenow. Any such offer or invitation will only be made in documents to be published in due course (if any)and any such acquisition or exchange should be made solely on the basis of information contained in anysuch documents. The Offer will not be made, directly or indirectly, in or into, or by the use of mails or any means orinstrumentality (including, without limitation, telephonically or electronically) of interstate orforeign commerce of, or any facility of a national securities exchange of, the United States, Canada,Australia or Japan and the Offer will not be capable of acceptance by any such use, means,instrumentality or facilities from or within the United States, Canada, Australia or Japan. Accordingly,copies of this announcement and any related documents are not being, and must not be, directly orindirectly, mailed or otherwise forwarded, distributed or sent in or into or from the United States,Canada, Australia or Japan and persons receiving this announcement and any related document (includingcustodians, nominees and trustees) must not mail or otherwise forward, distribute or send it in, into orfrom the United States, Canada, Australia or Japan or such other jurisdiction where to do so wouldconstitute a violation of the relevant laws of such jurisdiction. Doing so may render invalid anypurposed acceptance of the Offer. The availability of the Offer to persons who are not resident in the United Kingdom may be affected bythe laws of the relevant jurisdictions. Persons who are not resident in the United Kingdom should informthemselves about and observe any applicable requirements. The Panel wishes to draw attention to certain UK dealing disclosure requirements following theannouncement of the Offer. An "offer period" is deemed to commence at the time when an announcement ismade of a proposed or possible offer, with or without terms. Accordingly, the offer period began on 6June 2005. Terms defined in the Announcement attached to this document shall have the same meaning herein unless thecontext requires otherwise. The above disclosure requirements are set out in more detail in Rule 8 of the Code. In particular, Rule8.3 requires public disclosure of dealings during the offer period by persons who own or control, or whowould as a result of any transaction own or control, one per cent. or more of any class of the relevantsecurities of XN Checkout. Relevant securities include XN Checkout Shares, securities of XN Checkoutcarrying conversion or subscription rights into its shares, options in respect of and derivativesreferenced to its shares. In the case of the Offer, this requirement will apply until the first closingdate of the Offer or, if later, the date when the Offer becomes or is declared unconditional as toacceptances or lapses. If you are in any doubt as to the application of Rule 8 to you, please contactan independent financial advisor authorised under the Financial Services andMarkets Act 2000, consult the Panel's website at www.thetakeoverpanel.org.uk orcontact the Panel on telephone number +44 20 7638 0129; fax +44 20 7236 7013. Recommended Offer by Evolution Securities Limited on behalf of Torex Retail Plcfor the entire share capital of XN Checkout Holdings Plc 10 June 2005 1. Introduction The Boards of Torex Retail and XN Checkout announce the terms of a recommended offer to be made by Evolution on behalfof Torex Retail for the whole of the issued and to be issued share capital of XN Checkout. 2. The Offer On behalf of Torex Retail, Evolution will offer to acquire all of the XN Checkout Shares on the following basis: for each XN Checkout Share 2.547 New Torex Shares and so in proportion for any other number of XN Checkout Shares held. Based on the Closing Price of 104p per Torex Share on the business day immediately prior to the date of thisannouncement, the Offer values each XN Checkout Share at approximately 264.9 pence. This represents a premium ofapproximately 8.6 per cent. over the middle market price of an XN Checkout Share of 244p at the close of business on 3June 2005, being the last business day before announcement on 6 June 2005 that it was in bid discussions, and a premiumof approximately 24.2 per cent. over the average middle market price of a XN Checkout Share in the 6 months before XNCheckout's announcement on 6 June 2005 of 213.2p. The Offer values the entire issued share capital of XN Checkout at approximately £72.7 million. The XN Checkout Shares will be acquired under the Offer fully paid and free from all liens, equities, charges,encumbrances and other interests and together with all rights now or hereafter attaching to them, including the rightto receive all dividends declared, made or paid after the date of this announcement. The New Torex Shares to be issued pursuant to the Offer will, when issued, be credited as fully paid and free from allliens, charges and encumbrances whatsoever and will rank pari passu in all respects with the existing Torex Shares.Fractions of New Torex Shares will not be allotted or issued pursuant to the Offer but will be aggregated and retainedfor the benefit of Torex Retail. The Offer will be made in accordance with the requirements of the City Code and will be subject to the conditions setout in Appendix I, the Offer Document and the Form of Acceptance. The Offer will extend to the holders of all existing issued XN Checkout Shares and to the holders of any XN CheckoutShares which are unconditionally allotted or issued prior to the date on which the Offer closes (or such earlier dateas Torex Retail may, subject to the City Code, decide) including XN Checkout Shares to be issued pursuant to theexercise of options under the XN Checkout Share Option Schemes or otherwise. Full acceptance of the Offer by holders of XN Checkout Shares (excluding any XN Checkout Shares resulting from theexercise of any options under the XN Checkout Share Option Schemes) will result in the issue of approximately 69.9million New Torex Shares, representing approximately 26.6 per. cent of the enlarged issued Torex Retail share capital 3. Irrevocable undertakings to accept the Offer Edwin Dayan, Chief Executive of XN Checkout, has entered into an irrevocable undertaking to accept, or procure theacceptance of, the Offer when made in respect of his entire beneficial holding of XN Checkout Shares comprising, inaggregate, 7,939,868 XN Checkout Shares which represent approximately 28.9 per cent. of the existing issued sharecapital of XN Checkout. Christopher Moore, Non-Executive Chairman of XN Checkout (who is also Chief Executive of TorexRetail), Maarten Hemsley, Non-Executive Director of XN Checkout, and Chris Ford, Finance Director of XN Checkout, haveentered into irrevocable undertakings to accept, or procure the acceptance of, the Offer when made in respect of theirentire beneficial holdings of XN Checkout Shares comprising, in aggregate, 2,600,217 XN Checkout Shares which representapproximately 9.5 per cent. of the existing issued share capital of XN Checkout (of which 2,580,497 XN Checkout Shares,comprising approximately 9.4 per cent. of the issued XN Checkout share capital, are shares held by Christopher Moore).These undertakings, which are conditional upon the Offer Document being posted within 28 days of the date of thisannouncement, will continue to be binding even in the event of a higher competing offer for XN Checkout being announcedand cannot be withdrawn other than in the event of the Offer lapsing or being withdrawn. Accordingly, irrevocable undertakings to accept, or procure acceptance of, the Offer have been received from XNCheckout Shareholders who, in aggregate, have an interest in 10,540,085 XN Checkout Shares, representing approximately38.5 per cent. of the existing issued share capital of XN Checkout. Save for the holding of Christopher Moore and the irrevocable undertakings referred to above, neither Torex Retail nor,so far as Torex Retail is aware, any party acting in concert with Torex Retail, owns or controls any XN Checkout Sharesor holds any options to purchase (or rights to subscribe for) XN Checkout Shares or has entered into any derivativesreferenced to XN Checkout Shares which remain outstanding nor has Torex Retail nor, so far as Torex Retail is aware,any associate of Torex Retail procured any irrevocable commitments or letters of intent to accept the Offer. 4. Information on Torex Retail Torex Retail is a leading international provider of innovative retail managementtechnology solutions. With an historic strength in Electronic Point of Sale(EPOS) systems, Torex Retail has a broadly based portfolio of solutions coveringboth the in-store and enterprise activities of retailers. The solution setcovers the requirements of retailers of all sizes across the high street,convenience sector, leisure centres and petrol stations. Torex Retail has alarge customer base with over 2,000 customer relationships throughout the world,including Tesco, Woolworths, Selfridges, Argos and Shell. Torex Retail has over1,000 staff based in the UK, Europe and the US. The Torex Group was founded as "Smart Terminals Limited" in 1983 with acommission to provide a bespoke in-store solution for Argos, which remains a keycustomer today. Christopher Moore, the current Chief Executive, joined the Torexgroup in 1989 and grew the business organically over several years before it wasreversed into Torex PLC in 1996. The Torex Retail business was expanded by the Torex PLC management team (led atthat time by Christopher Moore with Rob Loosemore and Mark Pearman (who are allnow Directors of Torex Retail) joining shortly afterwards) through acquisitionand organic growth. The Company acquired the Torex Retail business from TorexPLC in February 2004 for £64.5 million and floated on AiM in March 2004. The Torex Group has continued to emphasise the provision of a 'one stop shop'for a retailer's requirements for store solutions. Torex Retail is able toprovide a complete service from project inception through to hardwareacquisition, software provision and building, configuration and installation ofthe system. It is also able to provide a full hardware and software support andmaintenance service for clients. Members of the Torex Group work in closepartnership with leading hardware manufacturers and technology providers such asIBM, Microsoft and SAP, whilst retaining their commitment to open systems tomaintain the flexibility to deliver maximum value to its customers. 5. Information on XN Checkout XN Checkout is the market leader for the provision of EPOS hardware and software solutions into the UK managed pub andbar sector, with over 4,000 systems installed. It has been successful in broadening its target markets to includerestaurants, hotels, retail shops and gaming hardware and software solutions. Co-founded in 1982 by the chiefexecutive Edwin Dayan, XN Checkout created one of the first touch-till systems for pubs and has over 20 years'experience of manufacturing hardware and more recently developing innovative web-based software solutions for the EPOSmarket. This technology is now being used in the hospitality, gaming and retail and SME hospitality sectors. XN Checkout benefits from long-standing client relationships with leading leisure and hospitality businesses includingMitchells & Butlers, Wolverhampton & Dudley, the Spirit Group, Young's and Stena Line. XN Checkout has around 200staff, is based in Dunstable, Bedfordshire and has offices in Singapore, Malaysia, South Korea, Australia, SouthAfrica, the US and Germany. XN Checkout floated on AiM in June 2004. In the year ended 31 December 2004 XN Checkout reported revenues of £18.3million (2003: £14.3 million) and profit before tax of £1.7 million (2003: £2.2 million loss). The strong performancein 2004 arose from a combination of increased revenues, improved gross margins and tight control of overheads.Hospitality revenues, which comprised 74 per cent. of revenues, increased by 43 per cent. following a doubling in newproject activity and a small increase in recurring revenues. Gross margins benefited from the sale of a greaterproportion of internally developed solutions. Net assets at 31 December 2004 stood at £6.4 million (2003: £3.9 millionnet liabilities). The XN Checkout Group currently has three core hospitality software solutions, giving it the ability to address areasas diverse as managed and leasehold pub sites, nightclubs, ferries, contract catering, restaurants, hotels, coffeeshops and retail outlets. XN Checkout's strategy is to continue to expand its reach into complementary areas ofhospitality, gaming and retail. It has recently expanded its activities in the gaming sector and, in January 2005,acquired ACE Casino Equipment (Pty) Limited, which is a developer and manufacturer of cashless payment and managementsystems for casinos. 6. Background to and reasons for the Offer The application software element of the retail systems market, of which leisure and hospitality forms part, is highlyfragmented from the supply side both globally and at the local country market levels. The Torex Directors and the XNCheckout Directors believe there is a clear opportunity to create a market leading application software supplier on aninternational basis through a combination of organic growth and acquisitions. The consolidation of the retail systems market at this time is particularly attractive as the Torex Directors and XNCheckout Directors believe that the market is set to experience a period of strong growth. It is believed thatretailers will be compelled to replace systems which were purchased in the late 1990s to achieve Year 2000 compliancewhich are now reaching the end of their useful life either in terms of technology platform or insufficient hardwareprocessing power to produce the data to drive complex Customer Relationship Management, Enterprise Resource Planningand supply chain systems. A key part of Torex Retail's strategy is therefore to expand its customer base and geographic presence and create abusiness of sufficient critical mass to become the international market leader in the supply of retail applicationsoftware. The Torex Directors and XN Checkout Directors believe that large retailers are conservative and would welcomethe advent of a clear market leader with a strong global sales and support capability to match their own internationalestates and ambitions. The large hardware and technology vendors and consultants are also influential in the retailsystems market and the Torex Directors believe that an Enlarged Torex Group will have a better chance of partneringthese organisations. XN Checkout provides entry for Torex Retail into the highly complementary leisure and hospitality sector of the retailsystems market. Whilst the functional requirements of this market sector differ in some respects from mainstreamretail, the principal application is still based around taking money at the point of sale, which is the core activityand technological requirement for Torex Retail. With its market leading technology in the supply of EPOS and managementsystems to pubs and restaurants in the UK, XN Checkout is well positioned to exploit the current favourable marketconditions particularly as part of the Enlarged Torex Group with its enhanced critical mass and extended geographicreach. The Directors of Torex Retail and XN Checkout believe there is a particularly good opportunity to market XNCheckout's products in the US through Retail Store Systems, Torex Retail's recently acquired US operation. XN Checkout has invested heavily over the last two years in the development of its product portfolio. The XN CheckoutDirectors believe that the benefits of this investment are starting to materialise and would be enhanced by the greatercritical mass, complementary geographical presence and other resources of the Enlarged Torex Group. In particular,being part of the Enlarged Torex Group should enable the XN Checkout Group to compete more effectively for businesswith the large international hospitality, gaming and hotel chains. The complementary nature of XN Checkout's geographic operations extends Torex Retails's reach and creates a genuinelyglobal business with a presence in the UK, the US, Europe, South Africa, East Asia and Australia. The Torex Directors and the XN Checkout Directors believe that there will also be immediate opportunities forcross-selling products into their representative customer bases. In addition there are potential operational synergiesand economies of scale within the Enlarged Torex Group. It is anticipated that XN Checkout will be able to use TorexRetail's implementation and support infrastructure in the UK for activities that are currently outsourced by XNCheckout and there is also the potential to share marketing and technology development costs. The Torex Directors believe that the combination of the two businesses has a strong commercial rationale and expect itto have an accretive effect on Torex Retail's earnings per share in the first year following completion of the Offer(this statement does not constitute a profit forecast nor should it be interpreted to mean that future earnings pershare of Torex Retail following the Offer becoming or being declared unconditional in all respects will necessarilymatch or exceed historical earnings per share of Torex Retail). Both Torex Retail and XN Checkout have benefited from an active acquisition strategy in the recent past and it isanticipated that further acquisitions to capture additional market share and expand overseas will remain a key elementof the strategy of the Enlarged Torex Group alongside organic growth. In this regard Torex Retail is also delighted toannounce that the Royal Bank of Scotland Plc has been appointed its new lead bank providing a £150 million senior debtfacility, part of which will be available for potential future acquisitions. 7. Current Trading A copy of the statement released at Torex Retail's Annual General Meeting on 28 April 2005 is set out in Appendix IIIof the announcement. Torex Retail continues to enjoy strong trading and the Torex Directors remain very positive aboutthe outlook for the full year. XN Checkout has, traditionally, enjoyed stronger profit and cash generation in the second half of the year than in thefirst half. The Board of XN Checkout believes that this pattern will continue and remains confident of achieving fullyear expectations. This is further emphasised by some recent new business wins. 8. Directors and employees Board of the Enlarged Torex Group If the Offer becomes or is declared unconditional, Edwin Dayan will join theTorex Board as an Executive Director. Following the Offer becoming or being declared unconditional in all respects, the Board of Directors of the EnlargedTorex Group will comprise: Name Proposed role Current roleRobert Loosemore Chairman Chairman, Torex RetailChristopher Moore Chief Executive Officer Chief Executive Officer, Torex RetailEdwin Dayan Executive Director Chief Executive Officer, XN CheckoutNigel Horn Director of Legal Services Director of Legal Services, Torex RetailMark Pearman Business Development Business Development Director, Director Torex RetailRichard Thompson Group Finance Director Group Finance Director, Torex RetailGeoffrey Forster Non Executive Director Non Executive Director, Torex RetailDavid Hallett Non Executive Director Non Executive Director, Torex Retail Mr Dayan has entered into a service contract with Torex Retail which isconditional upon the Offer becoming unconditional in all respects. The servicecontract is terminable by either party on 6 months' written notice. Mr Dayanwill be entitled to a salary of £150,000 per year which shall be reviewedannually and may, at the discretion of the Board, be entitled to participate inany bonus scheme applicable to employees of Mr Dayan's status as Torex Retailmay operate from time to time. Mr Dayan will also be entitled to the normalbenefits provided by Torex Retail from time to time to employees of similarstatus, including a car allowance, and may participate in the life assurance,medical expenses and medical health schemes operated by Torex Retail. Mr Dayanmay join Torex Retail's contributory pension scheme and Torex Retail mustcontribute an amount of not less than ten per cent. of his salary to such schemeon his behalf. Mr Dayan will also be eligible to participate in Torex Retail'sshare option plans subject to applicable performance conditions. Chris Ford, Finance Director of XN Checkout, will continue with his role at anoperational level in the Enlarged Torex Group. Employees The Board of Torex Retail has confirmed that, following the Offer becoming or being declared unconditional in allrespects, the existing employment rights, including pension rights, of all employees of the XN Checkout Group will befully safeguarded. 9. Accounting policies and year end of the Enlarged Torex Group The Enlarged Torex Group will adopt Torex Retail's year end of 31 December and its accounting policies. The Board ofTorex Retail believes that the impact of the differences between the accounting policies of Torex Retail and XNCheckout will not be significant. 10. Related Party Transaction The Offer constitutes a related party transaction (as defined in the AiM Rules) because Christopher Moore is a director of both Torex Retail (Chief Executive Officer) and XN Checkout (Non Executive Chairman). 11. Financial effects of acceptance of the Offer The financial effects for XN Checkout Shareholders of acceptance of the Offerare set out in Appendix IV. 12. XN Checkout Share Option Schemes The Offer will extend to holders of XN Checkout Shares issued or unconditionally allotted upon the exercise of rightsunder the XN Checkout Share Option Schemes whilst the Offer remains open for acceptance (or by such earlier date as,subject to the City Code, Torex Retail may decide). To the extent that such options have not been exercised in full,once the Offer becomes or is declared unconditional in all respects, appropriate proposals will be made in due courseto participants in the XN Checkout Share Option Schemes. 13. Break fee agreement Torex Retail and XN Checkout have entered into a break fee agreement, pursuant to which XN Checkout has agreed to payTorex Retail a fee of approximately £0.7million (being 1 per cent. of the value of the Offer) in the event of the Offernot proceeding by reason of: (a) the Directors of XN Checkout withdrawing or adversely modifying their recommendation of the Offer or failing tocontinue their recommendation of the Offer in any subsequent circular or document required to be issued to the XNCheckout Shareholders (unless such withdrawal or modification arises from an announcement by Torex Retail of a materialadverse change in the business or financial condition of Torex Retail) or recommending a Third Party Transaction andthereafter the Offer not being made (with the consent of the Panel), lapsing or being withdrawn; or (b) a Third Party Announcement being made and the Third Party Transaction referred to in such announcement or anyother Third Party Transaction (which is announced within 60 days of the release of this announcement) becoming or beingdeclared unconditional in all respects or being completed and the Offer not being made (with the consent of the Panel),lapsing or being withdrawn. Pursuant to the terms of the break free agreement, XN Checkout has also agreed that neither it, nor any of itssubsidiaries will enter into any inducement fee or break fee agreement or arrangement whereby XN Checkout will pay anyparty (other than Torex Retail or a member of the Torex Retail Group or a person acting in concert with Torex Retail),any amount in the event that a Third Party Transaction does not become unconditional in all respects or fails tocomplete, prior to the date which is 45 days after the Offer lapses or is withdrawn. 14. Settlement, admission to trading on AiM and dealings Application will be made to the London Stock Exchange for the New Torex Shares to be admitted to trading on AiM.Certificates for the New Torex Shares will be despatched to XN Checkout Shareholders who hold their XN Checkout Sharesin certificated form (that is, not in CREST) and CREST stock accounts will be credited in respect of those XN CheckoutShareholders who hold their XN Checkout Shares in uncertificated form (that is, in CREST) (i) in the case ofacceptances received, complete in all respects, by the date on which the Offer becomes or is declared unconditional inall respects, by no later than 14 days after such date, or (ii) in the case of acceptances received, complete in allrespects, after the date on which the Offer becomes or is declared unconditional in all respects but while it remainsopen for acceptance, within 14 days of such receipt. Further details on settlement, listing and dealing will be included in the Offer Document. 15. Compulsory acquisition, cancellation of trading of XN Checkout Shares on AiM and re-registration Upon the Offer becoming or being declared unconditional in all respects, it is the intention of Torex Retail, ifsufficient acceptances of the Offer are received and/or sufficient XN Checkout Shares are otherwise acquired, to applythe provisions of Part XIIIA of the Companies Act to acquire compulsorily any outstanding XN Checkout Shares to whichthe Offer relates, on the same terms as the Offer. It is also intended that following the Offer becoming or being declared unconditional in all respects, and subject tothe requirements of the AiM Rules, that Torex Retail will procure that XN Checkout applies for the cancellation oftrading of XN Checkout Shares on AiM. Such cancellation would significantly reduce the liquidity and marketability ofany XN Checkout Shares not assented to the Offer. It is anticipated that such cancellation will take effect no earlierthan 20 business days after the Offer becomes or is declared unconditional in all respects. It is also proposed that, in due course, Torex Retail will seek to procure the re-registration of XN Checkout as aprivate company under the relevant provisions of the Companies Act. 16. Extraordinary General Meeting of Torex Retail An Extraordinary General Meeting will be convened in due course at which resolutions will be proposed to increase TorexRetail's authorised share capital and to authorise the directors of Torex Retail to allot the New Torex Shares to beissued pursuant to the Offer and to give general authority to the directors of Torex Retail to allot further new TorexShares in order to give them the flexibility, amongst other things, to make further acquisitions. 17. Recommendation of the Torex Board The Independent Torex Directors, who have consulted with Evolution, consider the terms of the Offer to be fair andreasonable insofar as Torex Retail's Shareholders are concerned. In consulting with the Independent Torex Directors,Evolution has taken into account the commercial assessments of the Independent Torex Directors. Accordingly, the Independent Torex Directors intend unanimously to recommend Torex Retail Shareholders to vote infavour of the resolutions to be proposed at the Extraordinary General Meeting, as they intend to do in respect of theirown holdings of Torex Shares amounting, in aggregate, to 28,316,349 Torex Shares comprising approximately 14.7 percent. of the existing issued share capital of Torex Retail. 18. Recommendation of the XN Checkout Board The Independent XN Checkout Directors, who have been so advised by Daniel Stewart, considerthe terms of the Offer to be fair and reasonable insofar as the XN Checkout Shareholders areconcerned. In providing advice to the Independent XN Checkout Directors, Daniel Stewart hastaken into account the commercial assessments of the Independent XN Checkout Directors. Accordingly, the Independent XN Checkout Directors intend unanimously to recommend XN CheckoutShareholders to accept the Offer, when made, as they and certain of their connected personshave irrevocably undertaken so to do in respect of their own respective beneficialshareholdings amounting to, in aggregate, 7,959,588 XN Checkout Shares representingapproximately 29.0 per cent. of the existing issued share capital of XN Checkout. Christopher Moore is a director and shareholder of both Torex Retail and XN Checkout and,accordingly, has not joined in the recommendation of the Offer by either the Torex Board orthe XN Checkout Board. Enquiries: Torex Retail Plc XN Checkout Holdings Plc+ 44 (0) 870 050 9900 + 44 (0)1582 869 600Robert Loosemore/Richard Thompson Edwin Dayan/Chris Ford Evolution Securities Limited Daniel Stewart & Company PLC+ 44 (0) 20 7071 4300 + 44 (0) 20 7374 6789Tim Worlledge/Jeremy Ellis Lindsay Mair/Tom Jenkins 19. Miscellaneous This announcement has been issued by Evolution Securities Limited. Evolution SecuritiesLimited, which is regulated in the UK by the Financial Services Authority, is actingexclusively for Torex Retail in connection with the Offer and no one else and will not beresponsible to anyone other than Torex Retail for providing the protections afforded toclients of Evolution Securities Limited nor for providing advice in relation to the Offer. Daniel Stewart & Company PLC, which is regulated in the UK by the Financial ServicesAuthority, is acting as financial advisor to XN Checkout and no one else in connection withthe Offer and will not be responsible to anyone other than XN Checkout for providing theprotections afforded to clients of Daniel Stewart & Company PLC nor for providing advice inrelation to the Offer. No offer or invitation to acquire or exchange securities in Torex Retail or XN Checkout isbeing made now. Any such offer or invitation will only be made in documents to be publishedin due course (if any) and any such acquisition or exchange should be made solely on the basisof information contained in any such documents. The Offer will not be made, directly or indirectly, in or into, or by the use of mails or anymeans or instrumentality (including, without limitation, telephonically or electronically) ofinterstate or foreign commerce of, or any facility of a national securities exchange of, theUnited States, Canada, Australia or Japan and the Offer will not be capable of acceptance byany such use, means, instrumentality or facilities from or within the United States, Canada,Australia or Japan. Accordingly, copies of this announcement and any related documents arenot being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributedor sent in or into or from the United States, Canada, Australia or Japan and persons receivingthis announcement and any related document (including custodians, nominees and trustees) mustnot mail or otherwise forward, distribute or send it in, into or from the United States,Canada, Australia or Japan or such other jurisdiction where to do so would constitute aviolation of the relevant laws of such jurisdiction. Doing so may render invalid any purposedacceptance of the Offer. The availability of the Offer to persons who are not resident in the United Kingdom may beaffected by the laws of the relevant jurisdictions. Persons who are not resident in theUnited Kingdom should inform themselves about and observe any applicable requirements. The Panel wishes to draw attention to certain UK dealing disclosure requirements following theannouncement of the Offer. An "offer period" is deemed to commence at the time when anannouncement is made of a proposed or possible offer, with or without terms. Accordingly, theoffer period began on 6 June 2005. The above disclosure requirements are set out in more detail in Rule 8 of the Code. Inparticular, Rule 8.3 requires public disclosure of dealings during the offer period by personswho own or control, or who would as a result of any transaction own or control, one per cent.or more of any class of the relevant securities of XN Checkout and Torex Retail. Relevantsecurities include XN Checkout Shares and Torex Retail Shares, securities of XN Checkout andTorex Retail carrying conversion or subscription rights into such shares, options in respectof and derivatives referenced to such shares. In the case of the Offer, this requirement willapply until the first closing date of the Offer or, if later, the date when the Offer becomesor is declared unconditional as to acceptances or lapses. If you are in any doubt as to the application of Rule 8 to you, please contact an independentfinancial advisor authorised under the Financial Services and Markets Act 2000, consult thePanel's website at www.thetakeoverpanel.org.uk or contact the Panel on telephone number +44 207638 0129; fax +44 20 7236 7013. The XN Checkout Directors accept responsibility for the information contained in thisannouncement relating to XN Checkout and its subsidiaries, themselves and their immediatefamilies and connected persons. The Torex Directors accept responsibility for all the otherinformation contained in this announcement. To the best of the knowledge and belief of theTorex Directors and the XN Checkout Directors (who have taken all reasonable care to ensurethat such is the case) the information contained herein for which they are respectivelyresponsible is in accordance with the facts and does not omit anything likely to affect theimport of such information. APPENDIX I CONDITIONS The Offer, which will be made by Evolution on behalf of Torex Retail, willcomply with the applicable rules and regulations of the City Code. The Offerwill be governed by English law and will be subject to the jurisdiction of thecourts of England and to the terms and conditions set out in the Offer Documentand Form of Acceptance The Offer will be subject to the following conditions: (a) valid acceptances being received (and not, where permitted,withdrawn) by no later than 3.00 p.m. on the first closing date of the Offer (orsuch later time(s) and/or date(s) as Torex Retail may, subject to the rules ofthe Code, decide) in respect of not less than 90 per cent. (or such lesserpercentage as Torex Retail may decide) of the XN Checkout Shares to which theOffer relates, provided that, unless agreed by the Panel, this condition willnot be satisfied unless Torex Retail and/or its wholly-owned subsidiaries haveacquired or agreed to acquire (pursuant to the Offer or otherwise), directly orindirectly, XN Checkout Shares carrying, in aggregate, over 50 per cent. of thevoting rights then normally exercisable at a general meeting of XN Checkout onsuch basis as may be required by the Panel (including for this purpose, to theextent (if any) required by the Panel, any voting rights attaching to any shareswhich are unconditionally allotted or issued before the Offer becomes or isdeclared unconditional as to acceptances, whether pursuant to the exercise ofconversion or subscription rights or otherwise); and for this purpose (i) theexpression "XN Checkout Shares to which the Offer relates" shall be construed inaccordance with sections 428-430F of the Companies Act; and (ii) shares whichhave been unconditionally allotted shall be deemed to carry the voting rightswhich they will carry on issue; (b) the Office of Fair Trading indicating, in terms satisfactory to TorexRetail, that it is not the intention of the Secretary of State for Trade andIndustry to refer the proposed acquisition of XN Checkout by Torex Retail, orany matters arising therefrom, to the Competition Commission; (c) the passing at an extraordinary general meeting (or at anyadjournment thereof) of Torex Retail of any resolution or resolutions which arenecessary to increase the authorised share capital of Torex Retail and to grantthe directors of Torex Retail authority to allot the New Torex Shares in orderto implement the Offer and the acquisition of XN Checkout; (d) the London Stock Exchange agreeing to admit the New Torex Shares totrading on AiM (subject only to the allotment of such shares) and such admissionbecoming effective in accordance with the AiM Rules; (e) no central bank, government or governmental, quasi-governmental,supranational, statutory or regulatory body, or any court, institution,investigative body, association, trade agency or professional or environmentalbody or (without prejudice to the generality of the foregoing) any other personor body in any jurisdiction (each, a "Relevant Authority") having decided totake, instituted, implemented or threatened any action, proceedings, suit,investigation or enquiry or enacted, made or proposed any statute, regulation ororder or otherwise taken any other step or done any thing, and there not beingoutstanding any statute, legislation or order, that would or might be reasonablybe expected to: (i) restrict, restrain, prohibit, delay, impose additional conditions orobligations with respect to, or otherwise interfere with the implementation of,the Offer or the acquisition of any XN Checkout Shares by Torex Retail or anymatters arising therefrom; (ii) result in a delay in the ability of Torex Retail, or render TorexRetail unable, to acquire some or all of the XN Checkout Shares; (iii) require, prevent, delay or effect the divestiture by Torex Retail orany of its subsidiaries, subsidiary undertakings or associated undertakings(including any company of which 20 per cent. or more of the voting capital isheld by the Torex Group or any partnership, joint venture, firm or company inwhich any of them may be interested) (together the "wider Torex Group") or XNCheckout or any of its subsidiaries, subsidiary undertakings or associatedundertakings (including any company of which 20 per cent. or more of the votingcapital is held by the XN Checkout Group or any partnership, joint venture, firmor company in which any of them may be interested) (together the "wider XNCheckout Group") of all or any portion of their respective businesses, assets orproperty or of any XN Checkout Shares or other securities in XN Checkout orimpose any limitation on the ability of any of them to conduct their respectivebusinesses or own their respective assets or properties or any part thereof; (iv) impose any limitation on, or result in any delay in, the ability ofany member of the wider Torex Group to acquire or hold or exercise effectively,directly or indirectly, all or any rights of all or any of the XN CheckoutShares (whether acquired pursuant to the Offer or otherwise) or to exercisemanagement control over any member of the wider XN Checkout Group or on theability of any member of the wider XN Checkout Group to hold or exerciseeffectively, directly or indirectly, all or any rights of ownership of shares orother securities (or the equivalent) in, or to exercise management control over,any other member of the wider XN Checkout Group, in each case to an extent whichis material in the context of the wider Torex Group taken as a whole or, as thecase may be, the wider XN Checkout Group taken as a whole; (v) require any member of the wider XN Checkout Group or the wider TorexGroup to offer to acquire any shares or other securities or rights thereoverowned by any third party in any member of the wider XN Checkout Group or in anymember of the wider Torex Group where such acquisition would be material in thecontext of the wider XN Checkout Group taken as a whole or the wider Torex Grouptaken as a whole, as the case may be; (vi) make the Offer or its implementation or the proposed acquisition ofXN Checkout or any member of the wider XN Checkout Group or of any XN CheckoutShares or any other shares or securities in, or control of, XN Checkout,illegal, void or unenforceable in or under the laws of any jurisdiction; (vii) impose any limitation on the ability of any member of the wider TorexGroup or the wider XN Checkout Group to integrate or co-ordinate its business,or any part of it, with the business of any other member of the wider TorexGroup and/or the wider XN Checkout Group; or (viii) otherwise adversely affect any or all of the businesses, assets,prospects or profits of any member of the wider Torex Group or the wider XNCheckout Group or the exercise of rights of shares of any company in the XNCheckout Group to an extent which is material in the context of the wider XNCheckout Group taken as a whole or, as the case may be, the wider Torex Grouptaken as a whole, and all applicable waiting and other time periods during which such RelevantAuthority could institute, implement or threaten any such action, proceeding,suit, investigation, enquiry or reference or otherwise intervene having expired,lapsed or been terminated; (f) all authorisations, orders, grants, consents, clearances, licences,permissions and approvals, in any jurisdiction, deemed necessary or appropriateby Torex Retail for or in respect of the Offer, the proposed acquisition of anyshares or securities in, or control of, XN Checkout or any member of the widerXN Checkout Group by any member of the wider Torex Group or the carrying on ofthe business of any member of the wider XN Checkout Group or the wider TorexGroup, the issue of the New Torex Shares or any matters arising therefrom beingobtained in terms satisfactory to Torex Retail and XN Checkout from allappropriate Relevant Authorities or (without prejudice to the generality of theforegoing) from any persons or bodies with whom any members of the wider XNCheckout Group have entered into contractual arrangements (in each case wherethe absence of such authorisation would have a material and adverse effect onthe wider XN Checkout Group taken as a whole) and such authorisations, orders,grants, consents, clearances, licences, permissions and approvals remaining infull force and effect and there being no written notice or intimation of anyintention to revoke, suspend or restrict or not to renew any of the same and allnecessary filings having been made, all appropriate waiting and other timeperiods (including extensions thereto) under any applicable legislation andregulations in any jurisdiction having expired, lapsed or been terminated andall necessary statutory or regulatory obligations in any jurisdiction in respectof the Offer or the proposed acquisition of XN Checkout by Torex Retail or ofany XN Checkout Shares or any matters arising therefrom having been compliedwith; (g) appropriate assurances being received, in terms satisfactory to TorexRetail, from the Relevant Authorities or any party with whom any member of thewider XN Checkout Group has any contractual or other relationship that theinterests held by any member of the wider XN Checkout Group under licences,leases, consents, permits and other rights will not be adversely amended orotherwise affected by the Offer or the proposed acquisition of XN Checkout orany XN Checkout Shares or any matters arising therefrom, that such licences,leases, consents, permits and other rights are in full force and effect and thatthere is no intention to revoke or amend any of the same; (h) there being no provision of any agreement, instrument, permit,licence or other arrangement to which any member of the wider XN Checkout Groupis a party or by or to which it or any of its assets may be bound or subjectwhich, as a consequence of the Offer or the acquisition of XN Checkout or any XNCheckout Shares or because of a change in the control or management of XNCheckout or any member of the XN Checkout Group or any matters arising therefromor otherwise, could or might (in any such case to an extent which is materiallyadverse in the context of the wider XN Checkout Group taken as a whole)reasonably be expected to have the result that: (i) any moneys borrowed by, or other indebtedness, actual or contingent,of, or grant available to, any member of the wider XN Checkout Group becomes oris capable of being declared repayable immediately or earlier than the repaymentdate stated in such agreement, instrument or other arrangement or the ability ofany member of the wider XN Checkout Group to borrow moneys or incur indebtednessis withdrawn, inhibited or adversely affected; (ii) any mortgage, charge or other security interest is created over thewhole or any part of the business, property or assets of any member of the widerXN Checkout Group or any such security (whenever arising) becomes enforceable; (iii) any such agreement, instrument, permit, licence or otherarrangement, or any right, interest, liability or obligation of any member ofthe wider XN Checkout Group therein, is terminated or adversely modified oraffected or any action is taken or onerous obligation arises thereunder; (iv) the value of any member of the wider XN Checkout Group or itsfinancial or trading position is prejudiced or adversely affected; (v) any material asset or, other than in the ordinary course of business,any asset of the wider XN Checkout Group being or falling to be charged ordisposed of; (vi) the rights, liabilities, obligations or interests or business of anymember of the wider XN Checkout Group in or with any other person, firm orcompany (or any arrangement relating to such interest or business) isterminated, modified or adversely affected; or (vii) any member of the wider XN Checkout Group ceases to be able to carryon business under any name under which it currently does so; (i) save as Disclosed, no member of the XN Checkout Group having since31 December 2004 (the date to which XN Checkout's last published auditedaccounts were made up): (i) (save as between XN Checkout and wholly-owned subsidiaries of XNCheckout) issued or agreed to issue or authorised or proposed the issue ofadditional shares of any class or issued or authorised or proposed the issue ofor granted securities convertible into or rights, warrants or options tosubscribe for or acquire such shares or convertible securities or redeemed,purchased or reduced or announced any intention to do so or made any otherchange to any part of its share capital; (ii) recommended, declared, paid or made or proposed to recommend,declare, pay or make any dividend, bonus or other distribution other thandividends lawfully paid by a member of the XN Checkout Group to another memberof the XN Checkout Group; (iii) authorised or proposed or announced its intention to propose anymerger or acquisition or disposal or transfer of assets or shares or any changein its share or loan capital; (iv) issued or authorised or proposed the issue of any debentures or, toan extent which is material, incurred or increased any indebtedness orcontingent liability; (v) disposed of or transferred, mortgaged or encumbered any asset or anyright, title or interest in any asset or entered into or varied any contract,commitment or arrangement (whether in respect of capital expenditure orotherwise) which is of a long term or unusual nature or which involves or couldinvolve an obligation of a nature or magnitude which is material or authorised,proposed or announced any intention to do so; (vi) entered into or varied or proposed to enter into or vary anycontract, reconstruction, amalgamation, arrangement or other transaction whichis of a long term or unusual or onerous nature or is otherwise than in theordinary course of business or announced any intention to do so; (vii) entered into, or varied the terms of, any contract or agreement withany of the directors or, to the extent material, senior executives of XNCheckout; (viii) taken or proposed any corporate action or had any legal proceedingsstarted or threatened against it for its winding-up, dissolution orreorganisation or for the appointment of a receiver, administrator,administrative receiver, trustee or similar officer (or for the appointment ofany analogous person in any jurisdiction) of all or any of its assets andrevenues; (xi) waived or compromised any claim other than in the ordinary course ofbusiness which is material; (x) made any amendment to its memorandum or articles of association; (xi) entered into any contract, transaction or arrangement which is or isreasonably likely to be restrictive on the business of any member of the widerXN Checkout Group other than to a nature or extent which is not material in thecontext of the business concerned; (xii) entered into any contract, commitment or agreement with respect toany of the transactions or events referred to in this condition (i); and (xiii) been unable or admitted that it is unable to pay its debts or havingstopped or suspended (or threatened to stop or suspend) payment of its debtsgenerally or ceased or threatened to cease carrying on all or a substantial partof its business; for the purposes of this condition "material" shall mean material in the contextof the wider XN Checkout Group taken as a whole; (j) save as Disclosed, in relation to the XN Checkout Groupsince 31 December 2004: (i) no litigation, arbitration, prosecution or other legalproceedings having been instituted, announced or threatened or become pending orremained outstanding by or against any member of the wider XN Checkout Group orto which any member of the wider XN Checkout Group is or may become a party(whether as claimant, defendant or otherwise) which could or might reasonably beexpected to affect materially and adversely the XN Checkout Group taken as awhole; (ii) no adverse change having occurred in the business, assets, financialor trading position, profits or prospects of any member of the wider XN CheckoutGroup which is material in the context of the wider XN Checkout Group taken as awhole; and (iii) no investigation by any Relevant Authority having been threatened,announced, implemented or instituted or remaining outstanding in respect anymember of the wider XN Checkout Group which could or might reasonably beexpected to materially and adversely affect the wider XN Checkout Group taken asa whole; and (k) Torex Retail not having discovered that: (i) any business, financial or other information concerning any memberof the wider XN Checkout Group disclosed by or on behalf of any member of thewider XN Checkout Group, either contains a misrepresentation of fact or omits tostate a fact necessary to make the information contained therein not misleadingwhich is, in any case, material and adverse to the financial or trading positionof the wider XN Checkout Group taken as a whole; or (ii) any member of the wider XN Checkout Group is subject to anyliability, actual or contingent, which is not disclosed in the annual report andaccounts of XN Checkout for the financial year ended 31 December 2004 and ismaterial in the context of the wider XN Checkout Group taken as a whole. The Offer will lapse if the Offer or the proposed acquisition of XN Checkout byTorex Retail or any matter arising therefrom is referred to the CompetitionCommission before the first closing date of the Offer or the date when the Offerbecomes or is declared unconditional as to acceptances, whichever is the later. Conditions (c) and (d) must be fulfilled within 21 days after the later of thefirst closing date of the Offer and the date on which condition (a) isfulfilled. Torex Retail reserves the right to waive condition (b) and all orany of conditions (e) to (k) inclusive, in whole or in part. The Offer willlapse unless all the above conditions are fulfilled or (if capable of waiver)waived or, where appropriate, determined by Torex Retail to have been or remainsatisfied by midnight on the day which is 21 days after the later of the firstclosing date and the date on which the Offer becomes or is declaredunconditional as to acceptances (or such later date as Torex Retail may, withthe consent of the Panel, decide). Torex Retail shall be under no obligation towaive or treat as fulfilled any of condition (b) and conditions (e) to (k)inclusive by a date earlier than the date specified above for the fulfilmentthereof notwithstanding that the other conditions of the Offer may at suchearlier date have been waived or fulfilled and that there are at such earlierdate no circumstances indicating that any of such conditions may not be capableof fulfilment. If Torex Retail is required by the Panel to make an offer for XN Checkout Sharesunder the provisions of Rule 9 of the Code, Torex Retail may make suchalterations to the conditions as are necessary to comply with the provisions ofthat Rule. "Disclosed" means (i) as disclosed in XN Checkout's report and accounts for the