TIDMMRN
RNS Number : 0863E
MMGG Acquisition Limited
25 May 2012
EMBARGOED 09.00AM 25 MAY 2012
25 May 2012
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD
CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF THAT
JURISDICTION
RECOMMENDED CASH OFFER BY MMGG ACQUISITION PLC ("MMGG") FOR
MORSON GROUP PLC ("MORSON")
Summary
-- The board of MMGG and the Independent Director are pleased to
announce that they have reached agreement on the terms of a
recommended cash offer, with a loan note alternative to be made by
MMGG, for the whole of the issued and to be issued share capital of
Morson;
-- The offer for the entire issued and to be issued share
capital of Morson will be 50 pence in cash for each Morson Share,
valuing the existing issued share capital of Morson at
approximately GBP23 million;
-- MMGG has decided to offer a loan note alternative to the Cash
Offer in the form of the Offer Loan Notes. Morson Shareholders must
elect to accept either the Cash Offer or the Loan Note Alternative
for their entire shareholding;
-- In aggregate, MMGG has received irrevocable undertakings to
accept or procure acceptance of the Offer in respect of a total of
26,014,380 Morson Shares, representing 57.37 per cent. of the
existing issued share capital of Morson;
-- The Independent Director, who has received advice from W H
Ireland Limited, considers the terms of the Offer to be fair and
reasonable. However, the Independent Director does not express any
view on the terms of the Loan Note Alternative. In providing such
advice to the Independent Director, W H Ireland Limited has relied
upon the Independent Director's commercial assessments.
-- The Offer Price represents a premium of 20.5 per cent. to the
Closing Price of 41.5 pence per Morson Share on 24 May 2012, being
the last Business Day prior to the Offer being announced;
-- MMGG was incorporated in England and Wales on 5 March 2012
for the purpose of making the Offer. The shares in MMGG are owned
by the Management Team namely Gerrard Godfrey Mason (Chairman),
Gerard Anthony Mason (Group Chief Executive), Paul John Gilmour
(Group Finance Director) and Kevin Patrick Gorton (Group Managing
Director). The Management Team has irrevocably undertaken to accept
the Loan Note Alternative in respect of all the Morson Shares in
which they are interested, namely 21,209,630 Morson Shares
representing 46.78 per cent of the existing issued share capital of
Morson.
PRESS ENQUIRIES
For further information contact:
MMGG
Ged Mason 0161 707 1516
Paul Gilmour 0161 707 1516
Morson
Ian Knight 07775 941804
SPARK Advisory Partners Limited (financial adviser
to MMGG)
Matt Davis, Partner 020 3368 3552
Mark Brady, Partner 020 3368 3551
W H Ireland Limited (financial adviser to Morson)
Adrian Hadden, Managing
Director 020 7220 1751
Nick Field, Corporate Finance
Executive 020 7220 1658
This summary should be read in conjunction with the full text of
the attached announcement.
Apart from the responsibilities, if any, which may be imposed on
SPARK Advisory Partners Limited by the Financial Services and
Markets Act 2000, the European Communities (Markets in Financial
Instruments) Regulations 2007 (as amended) or the regulatory
regimes established thereunder or the Code, SPARK Advisory Partners
Limited does not accept any responsibility whatsoever for the
contents of this announcement or for any statements made or
purported to be made by it or on its behalf in connection with the
Offer. SPARK Advisory Partners Limited accordingly disclaims all
and any liability whether arising in tort, contract or otherwise
(save as referred to above) which it might otherwise have in
respect of this announcement or any such statement.
Apart from the responsibilities, if any, which may be imposed on
W H Ireland Limited by the Financial Services and Markets Act 2000,
the European Communities (Markets in Financial Instruments)
Regulations 2007 (as amended) or the regulatory regimes established
thereunder or the Code, W H Ireland Limited does not accept any
responsibility whatsoever for the contents of this announcement or
for any statements made or purported to be made by it or on its
behalf in connection with the Offer. W H Ireland Limited
accordingly disclaims all and any liability whether arising in
tort, contract or otherwise (save as referred to above) which it
might otherwise have in respect of this announcement or any such
statement. SPARK Advisory Partners Limited, which is authorised and
regulated in the United Kingdom by the Financial Services
Authority, is acting exclusively for MMGG and no-one else in
connection with the Offer and will not be responsible to any person
other than MMGG for providing the protections afforded to customers
of SPARK Advisory Partners Limited or for providing advice in
relation to the Offer or any other matter referred to in this
announcement.
SPARK Advisory Partners Limited has given and not withdrawn its
written consent to the release of this announcement with the
inclusion of the reference to its name in the form in which it is
included.
W H Ireland Limited, which is authorised and regulated in the
United Kingdom by the Financial Services Authority, is acting
exclusively for Morson in connection with the Offer and will not be
responsible to any person other than Morson for providing the
protections afforded to clients of W H Ireland Limited or for
providing advice in relation to the Offer or any other matter
referred to in this announcement.
W H Ireland Limited has given and not withdrawn its written
consent to the release of this announcement with the inclusion of
the reference to its name in the form in which it is included.
This announcement does not constitute, or form part of, any
offer for, or any solicitation of any offer for, securities. Any
acceptance or other response to the Offer should be made only on
the basis of information contained or referred to in the Offer
Document which MMGG intends to despatch shortly to Morson
Shareholders and, for information only, to holders of options under
the Morson Share Schemes.
The availability of the Offer to persons who are not resident in
the United Kingdom may be affected by the laws of their relevant
jurisdiction. Such persons should inform themselves of, and
observe, any applicable legal or regulatory requirements of their
jurisdiction. Further details in relation to overseas shareholders
will be contained in the Offer Document. Unless otherwise
determined by MMGG and permitted by applicable law and regulation,
subject to certain exceptions, the Offer is not being made and will
not be made, directly or indirectly, in or into, and the Offer will
not be capable of acceptance from a Restricted Jurisdiction.
Accordingly, unless otherwise determined by MMGG, copies of this
announcement, the Offer Document, the Form of Acceptance and any
other related document are not being, and must not be, directly or
indirectly, mailed or otherwise forwarded, distributed or sent in
or into or from a Restricted Jurisdiction and persons receiving
such documents (including custodians, nominees and trustees) must
not mail or otherwise distribute or send them in, into or from such
jurisdictions as doing so may be a breach of applicable law and
regulation in that jurisdiction and may make invalid any purported
acceptance of the Offer by persons in any such jurisdiction. This
announcement does not constitute an offer in a Restricted
Jurisdiction and the Offer will not be capable of acceptance by any
such use, means, instrumentality or facilities or otherwise from or
within a Restricted Jurisdiction. Accordingly this announcement is
not being, and should not be, mailed, transmitted or otherwise
distributed, in whole or in part, in or into or from a Restricted
Jurisdiction.
Morson Shareholders (including, without limitation, nominees,
trustees or custodians) must not forward this announcement to a
Restricted Jurisdiction
CAUTIONARY NOTICE REGARDING FORWARD LOOKING STATEMENTS
This document contains certain forward-looking statements with
respect to the financial condition, results of operations and
business of the Morson Group and certain plans and objectives of
the boards of directors of Morson and MMGG. These forward-looking
statements can be identified by the fact that they do not relate
only to historical or current facts. Forward-looking statements
often use words such as "anticipate", "target", "expect",
"estimate", "intend", "plan", "goal", "believe", "will", "may",
"should", "would", "could" or other words of similar meaning. These
statements are based on assumptions and assessments made by the
Management Team and MMGG in light of their experience and their
perception of historical trends, current conditions, expected
future developments and other factors they believe appropriate.
Forward-looking statements also include statements about MMGG's
beliefs and expectations related to the Offer being declared wholly
unconditional, benefits that would be afforded to customers, and
benefits to MMGG that are expected to be obtained as a result of
the Offer being declared wholly unconditional. There can be no
assurance that the Offer will be declared wholly unconditional. By
their nature, forward-looking statements involve risk and
uncertainty, and the factors described in the context of such
forward-looking statements in this announcement could cause actual
results and developments to differ materially from those expressed
in or implied by such forward-looking statements.
Should one or more of these risks or uncertainties materialise,
or should underlying assumptions prove incorrect, actual results
may vary materially from those described in this announcement.
The statements contained in this announcement are made as at the
date of this announcement, unless some other time is specified in
relation to them, and service of this announcement shall not give
rise to any implication that there has been no change in the facts
set out in this announcement since such date. Nothing contained in
this document shall be deemed to be a forecast, projection or
estimate of the future financial performance of Morson or MMGG
except where expressly stated.
All subsequent oral or written forward looking statements
attributable to MMGG or Morson or any of their respective members,
directors, officers or employees or any persons acting on their
behalf are expressly qualified in their entirety by the cautionary
statement above. All forward looking statements included in this
announcement are based on information available to MMGG and Morson
on the date hereof and are made only as of the date of this
announcement. Undue reliance should not be placed on such forward
looking statements.
Subject to compliance with the Code, neither Morson nor MMGG
intends, or undertakes any obligation, to update any information
contained in this announcement.
DEALING DISCLOSURE REQUIREMENTS
Under Rule 8.3(a) of the Code, any person who is interested in
1% or more of any class of relevant securities of an offeree
company or of any paper offeror (being any offeror other than an
offeror in respect of which it has been announced that its offer
is, or is likely to be, solely in cash) must make an Opening
Position Disclosure following the commencement of the offer period
and, if later, following the announcement in which any paper
offeror is first identified.
An Opening Position Disclosure must contain details of the
person's interests and short positions in, and rights to subscribe
for, any relevant securities of each of (i) the offeree company and
(ii) any paper offeror(s). An Opening Position Disclosure by a
person to whom Rule 8.3(a) applies must be made by no later than
3.30 pm (London time) on the 10th business day following the
commencement of the offer period and, if appropriate, by no later
than 3.30 pm (London time) on the 10th business day following the
announcement in which any paper offeror is first identified.
Relevant persons who deal in the relevant securities of the offeree
company or of a paper offeror prior to the deadline for making an
Opening Position Disclosure must instead make a Dealing
Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes,
interested in 1% or more of any class of relevant securities of the
offeree company or of any paper offeror must make a Dealing
Disclosure if the person deals in any relevant securities of the
offeree company or of any paper offeror. A Dealing Disclosure must
contain details of the dealing concerned and of the person's
interests and short positions in, and rights to subscribe for, any
relevant securities of each of (i) the offeree company and (ii) any
paper offeror, save to the extent that these details have
previously been disclosed under Rule 8. A Dealing Disclosure by a
person to whom Rule 8.3(b) applies must be made by no later than
3.30 pm (London time) on the business day following the date of the
relevant dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of an offeree company or a paper
offeror, they will be deemed to be a single person for the purpose
of Rule 8.3.
Opening Position Disclosures must also be made by the offeree
company and by any offeror and Dealing Disclosures must also be
made by the offeree company, by any offeror and by any persons
acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Takeover Panel's website at www.thetakeoverpanel.org.uk,
including details of the number of relevant securities in issue,
when the offer period commenced and when any offeror was first
identified. If you are in any doubt as to whether you are required
to make an Opening Position Disclosure or a Dealing Disclosure, you
should contact the Panel's Market Surveillance Unit on +44 (0)20
7638 0129.
You should note that, for the purposes of the above summary of
Rule 8 of the Code, MMGG is not treated as a paper offeror and
therefore there is no requirement to disclose interests or dealings
in the shares of MMGG under Rule 8 of the Code.
Publication on website
A copy of this announcement will be available free of charge,
subject to certain restrictions relating to persons in Restricted
Jurisdictions, on MMGG's website at www.MMGG.co.uk and on Morson's
website at www.Morson.com by no later than 12.00 p.m. (London time)
on 28 May 2012.
Neither the content of the websites referred to in this
announcement nor the content of any website accessible from
hyperlinks on MMGG's website and/or Morson's website (or any other
website) is incorporated into, or forms part of, this
announcement.
EMBARGOED 09.00AM 25 MAY 2012
25 May 2012
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD
CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF THAT
JURISDICTION
RECOMMENDED CASH OFFER BY MMGG ACQUISITION PLC ("MMGG") FOR
MORSON GROUP PLC ("MORSON")
1. Introduction
The board of MMGG and the Independent Director are pleased to
announce that they have reached agreement on the terms of a
recommended cash offer, with a loan note alternative (further
details of which are given in paragraph 4 below), to be made by
MMGG for the whole of the issued and to be issued share capital of
Morson.
The Offer values each Morson Share at 50 pence and Morson's
existing issued share capital at approximately GBP23 million.
The Offer Price represents a premium of 20.5 per cent. to the
Closing Price of 41.5 pence per Morson Share on 24 May 2012, being
the last Business Day prior to the Offer being announced. In
aggregate, MMGG has received irrevocable undertakings to accept or
procure acceptance of the Offer in respect of a total of 26,014,380
Morson Shares, representing 57.37 per cent. of the existing issued
share capital of Morson.
2. Recommendation
The Independent Director, who has been so advised by W H Ireland
Limited, considers the terms of the Offer to be fair and
reasonable. However, the Independent Director does not express any
view on the terms of the Loan Note Alternative. In providing its
advice to the Independent Director, W H Ireland Limited has taken
into account the commercial assessments of the Independent
Director. WH Ireland is acting as the independent financial adviser
to Morson for the purposes of providing independent financial
advice to the Independent Director on the Offer under Rule 3.1 of
the Code.
Accordingly, the Independent Director recommends that Morson
Shareholders accept the Cash Offer as he has irrevocably undertaken
to do in respect of his own beneficial shareholding of 20,000
Morson Shares (representing approximately 0.04 per cent. of the
existing issued share capital of Morson).
The Independent Director, who has been so advised by WH Ireland
Limited, considers that whilst the nominal value at completion of
the Loan Note Alternative may be the same as that of the Cash
Offer, additional risk attaches to the Loan Note Alternative,
arising from inter alia, the possibility that the Company will in
due course become a private limited company, the significant
increase in the indebtedness of the Company that will arise should
the Offer proceed and the claims of other creditors (including
Barclays) ranking ahead of the Loan Note Alternative and therefore
gives no recommendation to Morson Shareholders in relation to the
Loan Note Alternative.
3. The Offer
The Offer, which will be on the terms and subject to the
conditions set out below and in Appendix I, and to be set out in
full in the Offer Document and, in relation to certificated
shareholders, the Form of Acceptance, will be made on the following
basis:
For each Morson Share 50 pence in cash
Morson Shares will be acquired by MMGG pursuant to the Offer
fully paid and free from all liens, equities, charges, equitable
interests, encumbrances, rights of pre-emption and other third
party rights and/or interests of any nature whatsoever and together
with all rights attaching to them, now or in the future, including
the right to receive and retain all dividends, interest and other
distributions declared, paid or made in the future.
As an alternative to the cash consideration which they would
otherwise be entitled to receive, Morson Shareholders will be able
to elect to receive Offer Loan Notes, which will be issued on the
basis of 50 pence in nominal value of Offer Loan Notes for each
Morson Share.
Morson Shareholders must elect to receive either cash or Offer
Loan Notes for their entire holding of Morson Shares. There is no
option for Morson Shareholders to accept the Offer and elect to
receive partly cash and partly Offer Loan Notes.
4. The Loan Note Alternative
MMGG has decided to offer a loan note alternative to the Cash
Offer in the form of the Offer Loan Notes.
The Offer Loan Notes will be created by a resolution of the
Board of MMGG (or a duly authorised committee thereof) and will be
constituted by the Offer Loan Note Instrument executed as a deed by
MMGG.
The issue of the Offer Loan Notes will be conditional on the
Offer being declared wholly unconditional.
The Offer Loan Notes will not be transferable.
No application will be made for the Offer Loan Notes to be
listed or dealt in on any stock exchange.
The Offer Loan Notes will not be qualifying corporate bonds for
United Kingdom taxation purposes for Morson Shareholders who are
individuals.
The Offer Loan Notes will bear interest at 4% per annum but this
interest will be accrued and only paid when the Offer Loan Notes
are redeemed. The Offer Loan Notes are, on the face of the Offer
Loan Note Instrument, redeemable on 1 January 2018. However,
payments under the Offer Loan Notes are subject to the terms of the
Intercreditor Agreement and it cannot be guaranteed that redemption
will occur on that date. Morson Shareholders who elect to receive
Offer Loan Notes must accede to the terms of the Intercreditor
Agreement on such terms as Barclays may require. A summary of the
terms of the Intercreditor Agreement is set out in Part B of
Appendix II.
MMGG may (subject to the terms of the Intercreditor Agreement),
at any time, elect to redeem all or any part of the Offer Loan
Notes (or any Offer Loan Notes or part of any Offer Loan Notes held
by certain of the Offer Loan Noteholders as the board of MMGG may
elect).
Morson Shareholders should consider carefully, in light of their
own investment objectives and tax position, whether they wish to
elect for the Offer Loan Notes under the Loan Note Alternative and
are strongly advised to seek their own independent financial advice
before making any such election.
Further information on the Offer Loan Notes is given in Part A
of Appendix II.
5. Background to and Reasons for the Offer
Background to the Offer
In Morson's admission document dated 27 March 2006, by which the
Morson Shares were admitted to trading on AIM at a price of 160
pence per Morson Share, it was stated that:
"Admission will give the Group access to a new source of funds
and tradeable shares to facilitate the Group's future growth, both
organically and by acquisition. The Directors believe that a
quotation on AIM will raise the status and market profile of the
Group, promoting further awareness of Morson and that this
increased awareness will strengthen the Group's ability to attract
new business and take advantage of growth opportunities.
In addition, the Directors believe that Admission will provide
liquidity and a value for the Company's equity which, in
conjunction with the EMI scheme, will help the Group to continue to
attract, motivate and retain staff of an appropriate calibre to
achieve the growth opportunities."
Mindful of the factors below, set alongside the statement from
the AIM admission document, the Management Team have been
evaluating the continued appropriateness of the Company's admission
to trading on AIM.
Share price volatility
Since its admission to trading on AIM in 2006, Morson's share
price has been extremely volatile, rising to a high of
approximately 258 pence per Morson Share in June 2007 and falling
to a low of approximately 39 pence per Morson Share in February of
this year and as recently as 10 April this year.
During this time, the Group has continued to report profits
above those recorded at the time of its admission to trading on AIM
and yet its share price has, since 29 May 2008, remained below the
price at which admission occurred, namely 160p. This has defeated
one of the core reasons for the original admission, namely to
attract, motivate and retain staff of an appropriate calibre to
achieve the growth opportunities which the Company intended to
achieve through share options and share ownership. The volatility
in the share price has resulted in options being granted with
exercise prices, ranging from 89.5 - 245 pence per Morson Share,
which are now substantially above the current share price and those
that subscribed for shares at admission are now sitting on
substantial losses, despite the Group delivering continued
profitability in difficult UK economic conditions.
Management believes that it will have a greater chance of
attracting, retaining and incentivising key personnel with bonus
and/or share option arrangements, which may not comply with
corporate governance guidelines for an AIM company and therefore
may not be acceptable to institutional investors and the broader
market if the Company were to remain admitted to trading on
AIM.
Furthermore, the Management Team believes that concern about the
Company's share price performance may result in a loss of
confidence when approaching contract renewals. The Management Team
also believes that the relative decline in the Company's share
price may be utilised by competitors in an effort to imply
financial distress despite the Company's performance in difficult
UK economic conditions. The Management Team had believed that the
Company's admission to AIM would strengthen its ability to gain and
retain business. It is their current opinion that, as a result of
share price volatility and the Company's depressed market
capitalisation, being AIM listed now weakens Morson's competitive
positioning.
Business Transition
Despite the current UK economic climate, the Group has been able
to maintain a substantial level of profit. This has been achieved
despite the loss in recent years of a number of significant
contracts and reduced volumes on others; including the cessation of
the Nimrod aircraft programme contributing to the closure of the
BAe site at Woodford, the supply of workers to Magnox, and the loss
of the "Trackforce" contract with Metronet. The Group has won new
work and renewed some existing contracts. However, new contracts
are predominantly obtained by a competitive tender process and
renewals are typically negotiated with pressure for margin
reductions but with enhancement of quality of service. The Morson
Board believes that the economic outlook remains challenging in the
UK, with Government expenditure under pressure and whilst there is
commitment to long term projects such as HS2 and Crossrail, the
material benefits that could accrue to the Group are uncertain and
a number of years away.
The Morson Board has commenced the process of transitioning the
business from one that is predominantly UK-centric to one that is
able to take advantage of overseas opportunities. In addition, the
Morson Board has invested in new offices in the UK, in permanent
staff and Morson Projects. This strategy of investment for growth
is one that, in the short to medium term, may impact on future
cashflow and profits. The Management Team believes that this
strategy will, over time, prove to enhance the security and
sustainability of revenues, but acknowledges that the risk profile
of the business may, for the foreseeable future, be higher than
Morson Shareholders currently envisage. The Management Team
believes this may impact on the Company's share price. Accordingly,
Management believes that the transition of the business would be
best achieved in the more flexible private company environment.
Current Trading and future prospects
As the Morson Board has stated in the preliminary results for
the year ended 31 December 2011, released on 30 March 2012, the
2011 financial year was a challenging one. The markets in which the
Group operates are competitive and varying levels of confidence
amongst the Group's client base, due to wider economic uncertainty,
has affected demand.
Whilst the Group has been successful in maintaining key client
relationships in its core business, this has been achieved with
downward pressure on margins and/or payment terms. Furthermore,
five of the contracts under which the Group derives significant
turnover are due for renewal or extension in 2012. If the recent
trend of margin erosion and extension of credit terms were applied
to all these contracts it would put further pressure on cash flow.
Such pressure would hamper the Group's plans for overseas expansion
and further reduce the likelihood of a return to dividend payments.
In such circumstances, the Morson Board may be forced into action
to preserve cash flow at the expense of revenue and profit. The
Management Team believe that such action, whilst necessary, could
have a detrimental impact on Morson's share price.
As a result of margin erosion and increased costs, the Morson
Directors believe the Group has to work harder to stand still in
terms of profits.
Morson Projects
The trading of Morson Projects has deteriorated over the past
two years as it is achieving lower gross profit margins and
incurring increased overhead costs. Morson Projects has a different
business model to core recruitment operations requiring longer term
investment in often fixed price contracts which the Morson
Directors believe to be inherently more risky than core
recruitment. To demonstrate this further on 7 May 2012, Morson
Projects received an unquantified claim from a client regarding a
specific piece of work. In the limited time since the claim was
received Morson Projects has not received full details of the
claim, the circumstances surrounding the claim and quantification
of the claim. Accordingly the merits of the claim have not been
fully assessed, but this claim may lead to litigation in due
course. The Management Team believes Morson Projects has strong
defences to any such claim and, in any event, carries professional
indemnity insurance which should mitigate the position and, to the
extent there is any merit in the claim, Morson Projects may also
have claims against third parties regarding the work involved.
Whilst the Management Team are confident about the outcome of this
claim and are proceeding with the Offer as previously envisaged,
the Bank have concluded that there is a risk of a cash loss and
have put further clauses into their facility agreement which relate
specifically to this claim, as set out in paragraph 8. Morson
Projects also requires more working capital and fixed asset
expenditure. The Management Team believes that this activity is not
well understood by the stock market and that the value of Morson
Projects is not truly reflected in Morson's market capitalisation.
As a result, it is the Management Team's belief that this business
unit would sit better as part of a private company.
These factors, taken together, have reduced the visibility
previously enjoyed by the Morson Board when forecasting
profitability, increasing the risk that the Group will perform
below market expectations. Mindful of the share price impact that
arises from the publication of negative news, the Management Team
believes that shareholder value could be considerably eroded if
future market expectations fail to be met.
Cash flow and dividends
In its trading statements issued in December 2011 and February
2012, the Morson Board highlighted that the Group's cash position
had been negatively impacted by the lengthening of some trading
cycles and the investment in development of overseas opportunities
which has led to a substantial increase in net debt. These factors
contributed to the decision to suspend dividend payments by the
Company. In light of the current trading environment and the
business transition referred to above, the Company can offer no
guarantee that dividend payments will be recommenced when the
position is next reviewed as part of the interim results process in
September 2012. The Management Team believe that a number of
shareholders invested in the Company to take advantage of dividend
income. As a result, the Management Team believes that, in light of
the change of circumstances, it is appropriate to put forward the
Offer so that such Morson Shareholders can receive value for their
shareholding in Morson at a premium to the pre-announcement share
price.
The Offer Price
The Offer is to be funded through the Management Team's own
resources, bank leverage and the Offer Loan Notes. The valuation of
Morson at the Offer Price is principally a function of the leverage
made available by Barclays to make the Offer. The Offer values
Morson at a level at which the Management Team believe future debt
service can be achieved without putting at risk the continuing
stakeholders' investment and employment prospects of the staff
employed in the Group.
6. Background to the Recommendation
The Independent Director has considered the terms of the Cash
Offer and recommends, having been so advised by WH Ireland Limited,
that all Morson Shareholders should accept the Cash Offer for their
Morson Shares at a price of 50 pence per Morson Share.
The Independent Director believes that, for reasons set out
below, in the absence of an offer for the Company, there can be no
guarantee that Morson Shareholders (especially those with
significant shareholdings) will be able to sell their entire
shareholding in Morson in the market, should they wish to do so, at
a price of 50 pence or better, in the short to medium term.
In addition, given the receipt of irrevocable undertakings
amounting to 57.37 per cent. of Morson's issued share capital,
there is a likelihood that if the Offer proceeds Morson will be
delisted, and that shareholders choosing not to accept the Offer
would be unable easily to realise value for their shareholdings and
experience the elevated risks attached to investment in an unquoted
company.
The Independent Director therefore advises that each Morson
Shareholder should consider carefully the information set out below
in making a decision as to whether to accept the Offer.
In deciding to recommend the Cash Offer, the Independent
Director has taken into account the factors set out below. This is
not intended to be an exhaustive list of relevant factors and
Morson Shareholders should consider their individual circumstances
carefully before deciding whether to accept the Offer.
The economic and trading environment
- Macroeconomic weakness in the Company's principal geographic
markets, accompanied by a general fiscal tightening that has
significantly, negatively impacted a number of the Group's larger
customers who rely on defence and other spending by governments for
substantial amounts of their revenues;
- Industry overcapacity, in the Morson Projects business in
particular, which has resulted from falling demand, leading to
significantly increased competition for contracts, and accompanying
reduction in profit margins and deterioration in other terms;
- Risks associated with the business plan being pursued by the
Management Team. It is probable that underperforming operations
such as the UK projects and permanent recruitment businesses will
require further restructuring and that development of the overseas
businesses will continue to require substantial investment; and
- Demands on the Company's cash flow from impending contract
renewals, the need to renew existing banking facilities during 2013
and 2014, continued efforts to develop underperforming areas of the
Group and the need to reduce indebtedness which are likely to
impact the ability of the Company to reinstate dividend
payments.
Incentivisation of directors and key staff
- The Independent Director would draw Morson Shareholders'
attention to the likely negative impact on the business and
motivation and morale of key senior managers if the current process
does not conclude with the successful completion of the Offer.
The market in Morson Shares
- The Company is exposed to the infrastructure and capital goods
markets, which are highly cyclical and can in periods of recession
therefore fall out of favour with investors;
- Over recent years the Company's share price has declined from
over GBP2.50 to around 80p in the second half of 2011, and fallen
further to around 40p following announcement of the dividend
suspension in December 2011. This decline indicates negative market
sentiment, arising from concerns around the sector and the
underlying trading performance of the Company, as well as the
suspension of the dividend. It appears unlikely that catalysts for
a significant improvement in the market perception of the Company
will arise in the short to medium term, particularly given the
challenges posed to a return to dividends by the Company's
indebtedness and other demands on cashflow;
- The lack of trading liquidity in Morson Shares, arising in
part from the large shareholding of the Management Team, has made
it challenging for potential new investors to become Morson
Shareholders and is believed to be likely to have deterred others.
The average daily trading volume in Morson Shares for the 12 month
period ended 24 May 2012 was 53,984 Morson Shares being 0.1 per
cent. of Morson's existing issued share capital;
- The shareholding of the Management Team (46.78 per cent.) is
likely to deter others from making a competing offer for the
Company; and
- The level of irrevocable acceptances secured for the Offer is
such that as the Offer proceeds the probability that the Company
will be delisted is significant and in this situation the liquidity
of shareholders would be substantially curtailed, restricting
further their ability to realise value for their Morson
Shareholdings .
Accordingly, the Independent Director believes that the Cash
Offer represents an appropriate way for Morson Shareholders to
realise value for their investment at a premium to the prevailing
share price.
It should be noted however that the Independent Director's
recommendation only applies to the Cash Offer and does not apply to
the Loan Note Alternative, as he considers that whilst the nominal
value at completion of the Loan Note Alternative may be the same as
that of the Cash Offer, additional risk attaches to the Loan Note
Alternative, arising from inter alia, the possibility that the
Company will in due course become a private limited company, the
significant increase in the indebtedness of the Company that will
arise should the Offer proceed and the claims of other creditors
(including Barclays) ranking ahead of the Loan Note
Alternative.
7. Irrevocable Undertakings to Accept the Offer
In aggregate, MMGG has received irrevocable undertakings to
accept or procure acceptance of the Offer in respect of a total of
26,014,380 Morson Shares, representing 57.37 per cent. of the
existing issued share capital of Morson.
Details of these undertakings are set out in Appendix IV. Morson
Shareholders should be aware that the Management Team has
irrevocably undertaken to accept the Loan Note Alternative in
respect of their entire combined interests of 21,209,630 Morson
Shares amounting to approximately 46.78 per cent. of the existing
issued share capital of Morson.
8. Financing of the Offer
Full acceptance of the Offer (other than in respect of the
interests of the Management Team), in cash, will result in the
payment by MMGG of approximately GBP12.067 million in cash to
Morson Shareholders. The cash consideration provided by MMGG in
support of the Cash Offer is being financed by debt financing being
provided by Gerard Anthony Mason and Barclays.
MMGG has entered into a facilities agreement with Barclays
whereby Barclays will provide certain facilities to assist in
financing the consideration under the Offer and any squeeze out of
shares following the Offer, the costs of the Offer and refinancing
certain existing financial indebtedness of the Morson Group. The
facilities, which amount to up to GBP14 million, comprise a term
loan of up to GBP12 million which is repayable in quarterly
instalments over a four year period from the date on which the
Offer is declared unconditional and a term loan of up to
GBP2million which is repayable on the date which falls four years
from the date on which the Offer is declared unconditional. In
certain circumstances, the facilities may be repayable earlier,
including in circumstances where the claim against Morson Projects
referred to in paragraph 5 above involves Morson Projects incurring
an aggregate liability equal to or in excess of GBP1 million taking
into account any relevant net insurance recovery (after taking into
account any excess payable in respect of such insurance
recovery).
MMGG has entered into a facility agreement with Gerard Anthony
Mason whereby he will provide GBP2,500,000 of loans to assist in
financing the consideration under, and the costs of, the Offer.
Repayment of this facility is due on 30 June 2017. In certain
circumstances, these facilities may be repayable earlier. In any
event, repayment of this facility issubject to the terms of the
Intercreditor Agreement.
SPARK Advisory Partners Limited is satisfied that sufficient
resources are available to MMGG to satisfy in full the cash
consideration payable pursuant to the Offer.
9. Information on MMGG
MMGG was incorporated in England and Wales on 5 March 2012 for
the purpose of making the Offer. All of the issued ordinary shares
in MMGG are owned by the Management Team comprising Gerrard Godfrey
Mason (Chairman), Gerard Anthony Mason (Group Chief Executive),
Paul John Gilmour (Group Finance Director) and Kevin Patrick Gorton
(Group Managing Director).
To date, MMGG has neither traded nor engaged in any activities,
other than those in relation to its incorporation, re-registration
as a public limited company, the issuing of shares to the
Management Team and the making of the Offer.
10. Information on Morson
Morson operates through three main subsidiaries, Morson Human
Resources Limited, which trades as Morson International, and Morson
Wynnwith Limited, both of which provide specialist engineering and
technical personnel and Morson Projects Limited, which provides
outsourced engineering and project management design services.
Nuclear, aerospace, rail and power are the core markets in which
Morson operates. However, a wide range of ancillary engineering and
design markets also draw on the Group's engineering talent. The
Morson Board believes that other areas, including
telecommunications, oil and gas, marine and automotive provide
opportunities for growth. Morson seeks to work in partnership with
its customers in order to seek to establish common goals for
efficiency, innovation and technical expertise. This approach
provides Morson with knowledge of the needs and aims of clients,
enabling Morson to make changes and improvements to its service.
The Morson Board believes that success in its markets can be
achieved by securing and maintaining long-term relationships with
customers.
Morson released its preliminary final results on 30 March 2012
and published its annual report and accounts for the year ended 31
December 2011 on 17 April 2012. The annual report is available on
Morson's website.
11. Current trading and future prospects of MMGG
To date, MMGG has neither traded nor engaged in any activities,
other than those in relation to its incorporation, its
re-registration as a public limited company, the issuing of shares
to the Management Team and the making of the Offer.
MMGG currently has in issue 50,000 ordinary shares of GBP1 each
which are fully paid and which are held by the Management Team as
follows:
MMGG Shareholder Number of ordinary shares
in MMGG held
----------------------- --------------------------
Gerrard Godfrey Mason 23,600
----------------------- --------------------------
Gerard Anthony Mason 23,600
----------------------- --------------------------
Paul John Gilmour 1,400
----------------------- --------------------------
Kevin Patrick Gorton 1,400
----------------------- --------------------------
12. Management and Employees
The MMGG Board attaches great importance to the skills and
experience of the management and employees of Morson. The MMGG
Board has provided assurances to the Independent Director that,
upon the Offer becoming or being declared unconditional in all
respects, the existing employment rights of all employees of Morson
will be fully safeguarded.
No change is expected to the current locations of the Group's
places of business.
In addition, following the Offer becoming unconditional in all
respects, key members of the Management Team will remain in their
current roles with no changes to their current terms and conditions
of employment.
The Independent Director of Morson has agreed to resign subject
to and with effect from the Offer being declared unconditional in
all respects. Particulars of the payments to the Independent
Director in respect of termination of his appointment as a director
(and in accordance with the terms of his letter of appointment)
will be set out in full in the Offer Document).
13. Morson Share Option Schemes
The Offer extends to any Morson Shares which are unconditionally
allotted or issued whilst the Offer remains open for acceptance (or
by such earlier time and/or date as MMGG may, subject to the Code
and/or with the consent of the Panel, determine, but not being
earlier than the date on which the Offer becomes or is declared
unconditional as to acceptances) as a result of the exercise of
options or other awards granted under the Morson Share Schemes.
Participants in the Morson Share Schemes will be contacted
separately regarding the effect of the Offer on their options and
MMGG and Morson will make appropriate proposals to the holders of
any in-the-money options. However, as has been outlined in
paragraph 5 above, at the Offer Price, none of the options granted
under the Morson Share Option Schemes would be in-the-money
options.
14. Disclosure of Interests in Morson
Other than pursuant to the irrevocable undertakings referred to
in paragraph 7 above, MMGG confirms that it does not currently hold
any interest in Morson Shares.
MMGG is, however, acting in concert with the Management Team
which has the interests in Morson Shares set out below:
Name Number of Morson Percentage
Shares holding
G G Mason(1) 9,984,215 22.02
G A Mason(2) 10,906,090 24.05
P J Gilmour 630,000 1.39
K P Gorton 611,200 1.35
Note
1. Of these Morson Shares included in G G Mason's holding,
921,875 are held by the trustees of a discretionary trust of which
G G Mason is a trustee.
2. Of these Morson Shares included in G A Mason's holding,
921,875 are held by the trustees of a discretionary trust of which
G G Mason is a trustee. These shares are included in G A Mason's
holding by reason of the inclusion of G A Mason's children as
beneficiaries. G A Mason has no beneficial interest in these
shares.
15. Securities in Issue
As at the close of business on, 24 May, 2012, there were
45,343,750 Morson Shares in issue.
16. Cancellation of Trading, Re-registration and compulsory acquisition
If MMGG acquires or agrees to acquire, by virtue of its
shareholding and acceptances of the Offer, issued share capital
carrying 75 per cent. or more of the voting rights of Morson, MMGG
intends to procure that Morson applies for cancellation of the
trading in Morson Shares on AIM not less than 20 Business Days
following MMGG first having acquired or agreed to acquire such
issued share capital and thereafter to procure that the Company is
re-registered as a private limited company. However, even though
the Company would no longer be a public company, it would still
remain subject to the provisions of the City Code for a period of
10 years from its re-registration as a private limited company.
If sufficient valid acceptances of the Offer are received and/or
sufficient Morson Shares are otherwise acquired, MMGG intends to
apply the provisions of sections 979 to 982 (inclusive) of the
Companies Act to acquire compulsorily any outstanding Morson Shares
to which the Offer relates.
17. General
The Offer Document will be posted to Morson Shareholders as soon
as practicable and, in any event (save with the consent of the
Panel), within 28 days of the date of this announcement.
The Offer will be made solely by the Offer Document and the Form
of Acceptance, which will contain the full terms and conditions of
the Offer, including details of how the Offer may be accepted.
Appendix V contains definitions of the terms used in this
announcement.
18 Offer-related arrangements
MMGG and Morson entered into an agreement on 14 March 2012 (the
"Confidentiality Agreement") pursuant to which, amongst other
things, MMGG has undertaken to (i) keep confidential certain
non-public information it receives relating to the Morson Group,
(ii) use such information solely for the purpose of evaluating a
possible offer for Morson and (iii) not to disclose such
information to third parties (other than certain permitted
disclosees) unless required by law, regulation, a court of
competent jurisdiction or any governmental or competent regulatory
authority.
MMGG has further undertaken that subject to certain limited
exclusions, during the period of two years from the date
negotiations cease it will not directly or indirectly solicit,
endeavour to entice away or offer to employ or to enter into any
contract for services with any person who is (i) in a managerial,
supervisory, technical or sales capacity of any member of the
Morson Group or (ii) is a consultant to any member of the Morson
Group where the person in question has confidential information or
would be in a position to exploit any member of the Morson Group's
trade connections.
MMGG has entered into a facility agreement with Gerard Anthony
Mason, further details of which are set out in paragraph 8
above.
19 Documents on display
Copies of the following documents will, subject to certain
restrictions relating to persons in Restricted Jurisdictions, be
made available free of charge on MMGG's and Morson's websites at
www.MMGG.co.uk and www.Morson.com respectively by no later than
12:00 p.m. (London time) on the Business Day following this
announcement until the end of the Offer Period:
- this announcement;
- the irrevocable undertakings referred to in paragraph 7 above
and described in Appendix IV to this announcement;
- the facilities agreement and the facility agreement referred
to in paragraph 8 above;
- the Intercreditor Agreement referred to in paragraphs 4 and 8
above; and
- the Confidentiality Agreement referred to in paragraph 18
above.
Neither the content of the websites referred to in this
announcement nor the content of any website accessible from
hyperlinks on MMGG's website and/or Morson's website (or any other
website) is incorporated into, or forms part of, this
announcement.
PRESS ENQUIRIES
For further information contact:
MMGG
Ged Mason 0161 707 1516
Paul Gilmour 0161 707 1516
Morson
Ian Knight 07775 941804
SPARK Advisory Partners Limited (financial adviser
to MMGG)
Matt Davis, Partner 020 3368 3552
Mark Brady, Partner 020 3368 3551
W H Ireland Limited (financial adviser to Morson)
Adrian Hadden, Managing
Director 020 7220 1751
Nick Field, Corporate Finance
Executive 020 7220 1658
Apart from the responsibilities, if any, which may be imposed on
SPARK Advisory Partners Limited by the Financial Services and
Markets Act 2000, the European Communities (Markets in Financial
Instruments) Regulations 2007 (as amended) or the regulatory
regimes established thereunder or the Code, SPARK Advisory Partners
Limited does not accept any responsibility whatsoever for the
contents of this announcement or for any statements made or
purported to be made by it or on its behalf in connection with the
Offer. SPARK Advisory Partners Limited accordingly disclaims all
and any liability whether arising in tort, contract or otherwise
(save as referred to above) which it might otherwise have in
respect of this announcement or any such statement.
Apart from the responsibilities, if any, which may be imposed on
W H Ireland Limited by the Financial Services and Markets Act 2000,
the European Communities (Markets in Financial Instruments)
Regulations 2007 (as amended) or the regulatory regimes established
thereunder or the Code, W H Ireland Limited does not accept any
responsibility whatsoever for the contents of this announcement or
for any statements made or purported to be made by it or on its
behalf in connection with the Offer. W H Ireland Limited
accordingly disclaims all and any liability whether arising in
tort, contract or otherwise (save as referred to above) which it
might otherwise have in respect of this announcement or any such
statement.
SPARK Advisory Partners Limited, which is authorised and
regulated in the United Kingdom by the Financial Services
Authority, is acting exclusively for MMGG and no-one else in
connection with the Offer and will not be responsible to any person
other than MMGG for providing the protections afforded to customers
of SPARK Advisory Partners Limited or for providing advice in
relation to the Offer or any other matter referred to in this
announcement.
SPARK Advisory Partners Limited has given and not withdrawn its
written consent to the release of this announcement with the
inclusion of the reference to its name in the form in which it is
included.
W H Ireland Limited, which is authorised and regulated in the
United Kingdom by the Financial Services Authority, is acting
exclusively for Morson in connection with the Offer and will not be
responsible to any person other than Morson for providing the
protections afforded to clients of W H Ireland Limited or for
providing advice in relation to the Offer or any other matter
referred to in this announcement.
W H Ireland Limited has given and not withdrawn its written
consent to the release of this announcement with the inclusion of
the reference to its name in the form in which it is included.
This announcement does not constitute, or form part of, any
offer for, or any solicitation of any offer for, securities. Any
acceptance or other response to the Offer should be made only on
the basis of information contained or referred to in the Offer
Document which MMGG intends to despatch shortly to Morson
Shareholders and, for information only, to holders of options under
the Morson Share Schemes.
The availability of the Offer to persons who are not resident in
the United Kingdom may be affected by the laws of their relevant
jurisdiction. Such persons should inform themselves of, and
observe, any applicable legal or regulatory requirements of their
jurisdiction. Further details in relation to overseas shareholders
will be contained in the Offer Document.
The availability of the Offer to persons who are not resident in
the United Kingdom may be affected by the laws of their relevant
jurisdiction. Such persons should inform themselves of, and
observe, any applicable legal or regulatory requirements of their
jurisdiction. Further details in relation to overseas shareholders
will be contained in the Offer Document. Unless otherwise
determined by MMGG and permitted by applicable law and regulation,
subject to certain exceptions, the Offer is not being made and will
not be made, directly or indirectly, in or into, and the Offer will
not be capable of acceptance from a Restricted Jurisdiction.
Accordingly, unless otherwise determined by MMGG, copies of this
announcement, the Offer Document, the Form of Acceptance and any
other related document are not being, and must not be, directly or
indirectly, mailed or otherwise forwarded, distributed or sent in
or into or from a Restricted Jurisdiction and persons receiving
such documents (including custodians, nominees and trustees) must
not mail or otherwise distribute or send them in, into or from such
jurisdictions as doing so may be a breach of applicable law and
regulation in that jurisdiction and may make invalid any purported
acceptance of the Offer by persons in any such jurisdiction. This
announcement does not constitute an offer in a Restricted
Jurisdiction and the Offer will not be capable of acceptance by any
such use, means, instrumentality or facilities or otherwise from or
within any Restricted Jurisdiction. Accordingly this announcement
is not being, and should not be, mailed, transmitted or otherwise
distributed, in whole or in part, in or into or from any Restricted
Jurisdiction.
Morson Shareholders (including, without limitation, nominees,
trustees or custodians) must not forward this announcement to any
Restricted Jurisdiction.
CAUTIONARY NOTICE REGARDING FORWARD LOOKING STATEMENTS
This document contains certain forward-looking statements with
respect to the financial condition, results of operations and
business of the Morson Group and certain plans and objectives of
the boards of directors of Morson and MMGG. These forward-looking
statements can be identified by the fact that they do not relate
only to historical or current facts. Forward-looking statements
often use words such as "anticipate", "target", "expect",
"estimate", "intend", "plan", "goal", "believe", "will", "may",
"should", "would", "could" or other words of similar meaning. These
statements are based on assumptions and assessments made by the
Management Team and MMGG in light of their experience and their
perception of historical trends, current conditions, expected
future developments and other factors they believe appropriate.
Forward-looking statements also include statements about MMGG's
beliefs and expectations related to the Offer being declared wholly
unconditional, benefits that would be afforded to customers, and
benefits to MMGG that are expected to be obtained as a result of
the Offer being declared wholly unconditional. There can be no
assurance that the Offer will be declared wholly unconditional. By
their nature, forward-looking statements involve risk and
uncertainty, and the factors described in the context of such
forward-looking statements in this announcement could cause actual
results and developments to differ materially from those expressed
in or implied by such forward-looking statements.
Should one or more of these risks or uncertainties materialise,
or should underlying assumptions prove incorrect, actual results
may vary materially from those described in this announcement.
The statements contained in this announcement are made as at the
date of this announcement, unless some other time is specified in
relation to them, and service of this announcement shall not give
rise to any implication that there has been no change in the facts
set out in this announcement since such date. Nothing contained in
this document shall be deemed to be a forecast, projection or
estimate of the future financial performance of Morson or MMGG
except where expressly stated.
All subsequent oral or written forward looking statements
attributable to MMGG or Morson or any of their respective members,
directors, officers or employees or any persons acting on their
behalf are expressly qualified in their entirety by the cautionary
statement above. All forward looking statements included in this
announcement are based on information available to MMGG and Morson
on the date hereof and are made only as of the date of this
announcement. Undue reliance should not be placed on such forward
looking statements.
Subject to compliance with the Code, neither Morson nor MMGG
intends, or undertakes any obligation, to update any information
contained in this announcement.
APPENDIX I
Conditions and Certain Further Terms of the Offer
A. Conditions of the Offer
The Offer will be subject to the following conditions:
(a) valid acceptances of the Offer being received (and not,
where permitted, withdrawn) by 1.00 p.m. on the first closing date
(or such later time(s) and/or date(s) as MMGG may, subject to the
rules of the Code or with the consent of the Panel, decide) in
respect of not less than 90 per cent. (or such lesser percentage as
MMGG may decide) in nominal value of the Morson Shares to which the
Offer relates, and not less than 90 per cent. (or such lesser
percentage as MMGG may decide) of the voting rights carried by the
Morson Shares to which the Offer relates, provided that this
condition will not be satisfied unless MMGG shall have acquired or
agreed to acquire, whether pursuant to the Offer or otherwise,
Morson Shares carrying in aggregate more than 50 per cent. of the
voting rights then exercisable at a general meeting of Morson
including, to the extent (if any) required by the Panel, any voting
rights attaching to any Morson Shares which are unconditionally
allotted before the Offer becomes or is declared unconditional as
to acceptances pursuant to the exercise of any outstanding
conversion or subscription rights or otherwise. For the purposes of
this condition:
(i) Morson Shares which have been unconditionally allotted but
not issued before the Offer becomes or is declared unconditional as
to acceptances, whether pursuant to the exercise of any outstanding
subscription or conversion rights or otherwise, shall be deemed to
carry the voting rights which they will carry upon issue; and
(ii) the expressions "Morson Shares to which the Offer relates"
and "associates" shall be construed in accordance with sections 974
to 991 of the Companies Act 2006;
(b) each clearance or consent of, filing with, or notice to, any
Third Party (as defined below) that is reasonably considered by
MMGG to be necessary or appropriate in connection with the Offer or
its implementation, including the acquisition of any share or
securities in, or control of, any member of the Wider Morson Group,
in any country, territory or jurisdiction in which a member of the
Wider MMGG Group or the Wider Morson Group is established or
conducts business, having been granted, filed or delivered (as
appropriate), in each case in terms satisfactory to MMGG;
(c) no antitrust regulator, central bank, government or
governmental, quasi-governmental, supranational, statutory,
regulatory or investigative body, authority, court, trade agency,
association or institution or professional or environmental body or
any other similar person or body whatsoever in any relevant
jurisdiction (each a "Third Party") having, without the consent of
MMGG, decided to take, institute, implement or threaten any action,
proceedings, suit, investigation, enquiry or reference or having
required any action to be taken or information to be provided or
otherwise having done anything or having made, proposed or enacted
any statute, regulation, order or decision or having done anything
which would or might reasonably be expected to:
(i) make the Offer or its implementation, or the acquisition or
the proposed acquisition by MMGG of any shares or other securities
in, or control or management of, Morson or the Wider Morson Group
void, unlawful, illegal or unenforceable in any jurisdiction, or
otherwise directly or indirectly restrain, prohibit, restrict,
prevent or delay the same or impose additional conditions or
financial or other obligations with respect thereto, or otherwise
challenge or interfere therewith, or require adverse amendment to
the Offer or the acquisition of any shares or other securities in,
or control or management of, Morson by MMGG;
(ii) require, prevent or materially delay the divestiture or
alter the terms envisaged for any proposed divestiture by MMGG or
any member of the Wider MMGG Group of any Morson Shares or of any
shares in a member of the Wider Morson Group;
(iii) require, prevent or materially delay the divestiture or
alter the terms envisaged for any proposed divestiture by any
member of the Wider MMGG Group or by any member of the Wider Morson
Group of all or any material portion of their respective
businesses, assets or property, or (to an extent which is material
in the context of the Offer or the Wider Morson Group concerned
taken as a whole) impose any limit on the ability of any of them to
conduct their respective businesses (or any of them) or to own or
control any of their respective assets or properties or any part
thereof;
(iv) impose any material limitation on, or result in any
material delay in, the ability of any member of the Wider MMGG
Group or any member of the Wider Morson Group to acquire, hold or
exercise effectively, directly or indirectly, all or any rights of
ownership of Morson Shares or any shares or securities convertible
into Morson Shares or to exercise voting or management control over
any member of the Wider Morson Group or any member of the Wider
MMGG Group in any such case which is material in the context of the
Wider Morson Group;
(v) except pursuant to Chapter 3 of Part 28 of the Companies Act
require any member of the Wider MMGG Group and/or of the Wider
Morson Group to acquire or offer to acquire any shares or other
securities (or the equivalent) in and/or indebtedness of any member
of the Wider Morson Group owned by or owed to any Third Party in
circumstances which would impose on any member of the MMGG Group or
any member of the Morson Group a liability which is material in the
context of the Wider MMGG Group or the Wider Morson Group as the
case may be;
(vi) impose any material limitation on the ability of any member
of the Wider MMGG Group and/or of the Wider Morson Group to
integrate or co-ordinate its business, or any material part of it,
with the business of any member of the Wider Morson Group or of the
Wider MMGG Group respectively; or
(vii) otherwise adversely affect any or all of the businesses,
assets, prospects, profits or financial or trading position of any
member of the Wider Morson Group or any member of the Wider MMGG
Group to an extent which is material in the context of the Offer or
any such group taken as a whole,
and all applicable waiting and other time periods during which
any Third Party could institute, implement or threaten any such
actions, proceedings, suit, investigation, enquiry or reference
under the laws of any relevant jurisdiction, having expired, lapsed
or been terminated;
(d) all necessary filings and applications having been made and
all necessary waiting and other time periods (including any
extensions thereof) under any applicable legislation or regulations
of any relevant jurisdiction having expired, lapsed or been
terminated and all statutory or regulatory obligations in any
relevant jurisdiction having been complied with in each case as may
be necessary in connection with the Offer and its implementation or
the acquisition or proposed acquisition by MMGG or any member of
the Wider MMGG Group of any shares or other securities in, or
control of, Morson or any member of the Wider Morson Group and all
authorisations, orders, recognitions, grants, consents, clearances,
confirmations, licences, certificates, permissions and approvals
("Authorisations") which are material and necessary or appropriate
for or in respect of the Offer or the acquisition or proposed
acquisition by MMGG of any shares or other securities in, or
control of, Morson or the carrying on by any member of the Wider
Morson Group of its business or in relation to the affairs of any
member of the Wider Morson Group having been obtained in terms and
in a form reasonably satisfactory to MMGG from all appropriate
Third Parties and all such Authorisations remaining in full force
and effect and all filings necessary for such purpose having been
made and there being no notice or intimation of any intention to
revoke, suspend, restrict or amend or not renew the same at the
time at which the Offer becomes or is declared wholly unconditional
in each case where the absence of such Authorisation would have a
material adverse effect on the Wider Morson Group or on the Wider
MMGG Group taken as a whole;
(e) except as publicly announced by Morson prior to 25 May 2012
through a Regulatory Information Service (an "RIS") or disclosed in
writing to MMGG prior to 25 May 2012, there being no provision of
any arrangement, agreement, licence or other instrument to which
any member of the Wider Morson Group is a party or by or to which
any such member or any of its respective assets is or are or may be
bound, entitled or subject or any circumstance which, in
consequence of the making or implementation of the Offer or the
proposed acquisition of any shares or other securities in, or
control of, Morson by MMGG or because of a change in the control or
management of Morson or otherwise, could reasonably be expected to
result in (to an extent which is material in the context of the
Wider Morson Group taken as a whole):
(i) any indebtedness or liabilities actual or contingent of, or
any grant available to, any member of the Wider Morson Group being
or becoming repayable or capable of being declared repayable
immediately or prior to its stated maturity or the ability of any
such member to borrow monies or incur any indebtedness being
withdrawn or inhibited or capable of being withdrawn or
inhibited;
(ii) the creation or enforcement of any mortgage, charge or
other security interest over the whole or any material part of the
business, property, assets or interests of any member of the Wider
Morson Group or any such security (whenever created, arising or
having arisen) being enforced or becoming enforceable;
(iii) any such arrangement, agreement, licence or instrument or
the rights, liabilities, obligations, or interests of any member of
the Wider Morson Group under any such arrangement, agreement,
licence or instrument (or any arrangement, agreement, licence or
instrument relating to any such right, liability, obligation,
interest or business) or the interests or business of any such
member in or with any other person, firm, company or body being or
becoming capable of being terminated or adversely modified or
adversely affected or any adverse action being taken or any onerous
obligation or liability arising thereunder;
(iv) any asset or interest of any member of the Wider Morson
Group being or failing to be disposed of or charged (otherwise than
in the ordinary course of business) or ceasing to be available to
any member of the Wider Morson Group or any right arising under
which any such asset or interest could be required to be disposed
of or charged or could cease to be available to any member of the
Wider Morson Group;
(v) any member of the Wider Morson Group ceasing to be able to
carry on business under any name under which it presently does
so;
(vi) any member of the Wider MMGG Group and/or of the Wider
Morson Group being required to acquire or repay any shares in
and/or indebtedness of any member of the Wider Morson Group owned
by any Third Party;
(vii) any change in or effect on the ownership or use of any
intellectual property rights owned or used by any member of the
Wider Morson Group;
(viii) the value or financial or trading position of any member
of the Wider Morson Group being prejudiced or adversely affected in
a manner which would be material in the context of the Wider Morson
Group taken as a whole; or
(ix) the creation of any material liability, actual or
contingent, by any member of the Wider Morson Group (other than in
the ordinary course of business),
and no event having occurred which, under any provision of any
such arrangement, agreement, licence or other instrument, might
reasonably be expected to result in any of the events referred to
in this condition (e) to an extent which would be material in the
context of the Wider Morson Group taken as a whole;
(f) since 31 December 2011 and except as disclosed in Morson's
annual report and accounts for the year ended 31 December 2011 or
as disclosed by or on behalf of Morson to MMGG or its advisers in
writing prior to 25 May 2012 or as otherwise publicly announced by
Morson on or prior to 25 May 2012 through a RIS, no member of the
Wider Morson Group having:
(i) issued or agreed to issue or authorised or proposed the
issue of additional shares or securities of any class, or
securities convertible into or exchangeable for shares, or rights,
warrants or options to subscribe for or acquire any such shares,
securities or convertible securities (save for issues between
Morson and any of its wholly-owned subsidiaries or between such
wholly-owned subsidiaries and save for options as disclosed to MMGG
granted under the Morson Share Option Schemes before 25 May 2012 or
the issue of any Morson Shares allotted upon the exercise of
options granted before 25 May 2012 under the Morson Share Schemes)
or redeemed, purchased, repaid or reduced or proposed the
redemption, purchase, repayment or reduction of any part of its
share capital or any other securities;
(ii) recommended, declared, made or paid or proposed to
recommend, declare, make or pay any bonus, dividend or other
distribution whether payable in cash or otherwise other than any
distribution by any wholly-owned subsidiary within the Morson
Group;
(iii) save as between Morson and its wholly-owned subsidiaries,
effected, authorised, proposed or announced its intention to
propose any change in its share or loan capital which in each case
would be material in the context of the Wider Morson Group taken as
a whole;
(iv) save as between Morson and its wholly-owned subsidiaries,
effected, authorised, proposed or announced its intention to
propose any merger, demerger, reconstruction, arrangement,
amalgamation, commitment or scheme or any material acquisition or
disposal or transfer of assets or shares (other than in the
ordinary course of business) or any right, title or interest in any
assets or shares or other transaction or arrangement in respect of
itself or another member of the Wider Morson Group which in each
case would be material in the context of the Wider Morson Group
taken as a whole;
(v) acquired or disposed of or transferred (other than in the
ordinary course of business) or mortgaged, charged or encumbered
any assets or shares or any right, title or interest in any assets
or shares (other than in the ordinary course of business) or
authorised the same or entered into, varied or terminated or
authorised, proposed or announced its intention to enter into,
vary, terminate or authorise any agreement, arrangement, contract,
transaction or commitment (other than in the ordinary course of
business and whether in respect of capital expenditure or
otherwise) which is of a loss-making, long-term or unusual or
onerous nature or magnitude, or which involves or could involve an
obligation of such a nature or magnitude, in each case which is
material in the context of the Wider Morson Group taken as a
whole;
(vi) entered into any agreement, contract, transaction,
arrangement or commitment (other than in the ordinary course of
business) which is material in the context of the Wider Morson
Group taken as a whole;
(vii) entered into any contract, transaction or arrangement
which would be restrictive on the business of any member of the
Wider Morson Group or the Wider MMGG Group or which is or could
involve obligations which would or might reasonably be expected to
be so restrictive;
(viii) issued, authorised or proposed the issue of or made any
change in or to any debentures, or (other than in the ordinary
course of business) incurred or increased any indebtedness or
liability, actual or contingent, which is material in the context
of the Wider Morson Group taken as a whole;
(ix) been unable or admitted that it is unable to pay its debts
or having stopped or suspended (or threatened to stop or suspend)
payment of its debts generally or ceased or threatened to cease
carrying on all or a substantial part of its business or proposed
or entered into any composition or voluntary arrangement with its
creditors (or any class of them) or the filing at court of
documentation in order to obtain a moratorium prior to a voluntary
arrangement or, by reason of actual or anticipated financial
difficulties, commenced negotiations with one or more of its
creditors with a view to rescheduling any of its indebtedness;
(x) made, or announced any proposal to make, any change or
addition which is material in the context of the Wider Morson Group
as a whole to any retirement, death or disability benefit or any
other employment-related benefit of or in respect of any of its
directors, employees, former directors or former employees;
(xi) save as between Morson and its wholly-owned subsidiaries,
granted any lease or third party rights in respect of any of the
leasehold or freehold property owned or occupied by it or
transferred or otherwise disposed of any such property, in each
case which is material in the context of the Wider Morson Group as
a whole;
(xii) entered into or varied or made any offer (which remains
open for acceptance) to enter into or vary the terms of any service
agreement with any director or senior executive of Morson or any
director or senior executive of the Wider Morson Group;
(xiii) taken or proposed any corporate action or had any legal
proceedings started or threatened against it for its winding-up
(voluntary or otherwise), dissolution, striking-off or
reorganisation or for the appointment of a receiver, administrator
(including the filing of any administration application, notice of
intention to appoint an administrator or notice of appointment of
an administrator), administrative receiver, trustee or similar
officer of all or any material part of its assets or revenues or
for any analogous proceedings or steps in any jurisdiction or for
the appointment of any analogous person in any jurisdiction;
(xiv) made any amendment to its memorandum or articles of association;
(xv) waived or compromised any claim or authorised any such
waiver or compromise, save in the ordinary course of business,
which is material in the context of the Wider Morson Group taken as
a whole;
(xvi) taken, entered into or had started or threatened against
it in a jurisdiction outside England and Wales any form of
insolvency proceeding or event similar or analogous to any of the
events referred to in conditions (i)(ix) and (xiii) above; or
(xvii) agreed to enter into or entered into an agreement or
arrangement or commitment or passed any resolution or announced any
intention with respect to any of the transactions, matters or
events referred to in this condition (f);
(g) except as publicly announced by Morson prior to 25 May 2012
through a RIS or disclosed in writing to MMGG prior to 25 May 2012
and save as disclosed in the annual report and accounts of Morson
for the financial year ended 31 December 2011, since 31 December
2011:
(i) there having been no material adverse change or
deterioration in the business, assets, financial or trading
position or profits or prospects of the Wider Morson Group taken as
a whole;
(ii) no material litigation, arbitration proceedings,
prosecution or other legal proceedings to which any member of the
Wider Morson Group is or may become a party (whether as claimant or
defendant or otherwise), and no material enquiry or investigation
by or complaint or reference to any Third Party, against or in
respect of any member of the Wider Morson Group, having been
threatened, announced or instituted or remaining outstanding by,
against or in respect of any member of the Wider Morson Group in
any way which is material in the context of the Wider Morson Group
taken as a whole; and
(iii) no contingent or other liability having arisen or become
apparent or increased which might be reasonably likely in either
case to have a material adverse effect on the Wider Morson Group
taken as a whole;
(h) save as disclosed by or on behalf of Morson to MMGG or its
advisers in writing prior to 25 May 2012 MMGG not having
discovered:
(i) that any financial, business or other information concerning
Morson or the Wider Morson Group which is contained in the
information publicly disclosed at any time by or on behalf of any
member of the Wider Morson Group either publicly or in the context
of the Offer contains a misrepresentation of fact which has not,
prior to 25 May 2012, been corrected by public announcement through
an RIS or omits to state a fact necessary to make the information
contained therein not misleading;
(ii) any information which affects the import of any such
information as is mentioned in condition (h)(i); or
(iii) that any member of the Wider Morson Group is subject to
any liability, contingent or otherwise, which is not disclosed in
the annual report and accounts of Morson for the financial year
ended 31 December 2011
in each case which has or may reasonably have a material adverse
effect in the context of the Wider Morson Group taken as a
whole;
(i) save as disclosed by or on behalf of Morson to MMGG or its
advisers in writing prior to 25 May 2012, MMGG not having
discovered that:
(i) any past or present member of the Wider Morson Group has
failed to comply with any and/or all applicable legislation or
regulation, of any jurisdiction with regard to the disposal,
spillage, release, discharge, leak or emission of any waste or
hazardous substance or any substance likely to impair the
environment or harm human health or animal health or otherwise
relating to environmental matters, or that there has otherwise been
any such disposal, spillage, release, discharge, leak or emission
(whether or not the same constituted a non-compliance by any person
with any such legislation or regulations, and wherever the same may
have taken place) any of which disposal, spillage, release,
discharge, leak or emission would be likely to give rise to any
liability (actual or contingent) on the part of any member of the
Wider Morson Group and which is material in the context of the
Wider Morson Group taken as a whole; or
(ii) there is, or is likely to be, for that or any other reason
whatsoever, any liability (actual or contingent) of any past or
present member of the Wider Morson Group to make good, repair,
reinstate or clean up any property or any controlled waters now or
previously owned, occupied, operated or made use of or controlled
by any such past or present member of the Wider Morson Group, under
any environmental legislation, regulation, notice, circular or
order of any government, governmental, quasi-governmental, state or
local government, supranational, statutory or other regulatory
body, agency, court, association or any other person or body in any
jurisdiction and which is material in the context of the Wider
Morson Group taken as a whole.
MMGG reserves the right to waive all or any of conditions (c) to
(i) inclusive, in whole or in part.
Condition (b) must be fulfilled or waived within 21 days after
the later of the first closing date of the Offer and the date on
which condition (a) is fulfilled and conditions (c) to (i)
inclusive must be satisfied as at, or waived on or before, midnight
on the 21st day after the later of the first closing date of the
Offer and the date on which condition (a) is fulfilled (or in each
such case such later date as MMGG may, with the consent of the
Panel, agree), failing which the Offer will lapse provided that
MMGG shall be under no obligation to waive or treat as fulfilled
any of conditions (c) to (i) inclusive by a date earlier than the
latest date specified above for the fulfilment thereof
notwithstanding that the other conditions of the Offer may at such
earlier date have been fulfilled and that there are at such earlier
date no circumstances indicating that any of such conditions may
not be capable of fulfilment.
Except with the Panel's consent, MMGG will not invoke any of the
above conditions (except for the acceptance condition in (a) and
the conditions in (b) above) so as to cause the Offer not to
proceed, to lapse or to be withdrawn unless the circumstances which
give rise to the right to invoke the relevant conditions are of
material significance to MMGG in the context of the Offer.
B. Certain Further Terms of the Offer
Except where the context otherwise requires, references in this
Part B of this Appendix and in the Form of Acceptance (i) to the
Offer shall mean the Offer and shall include any revision or
extension thereof and (ii) to the Offer becoming unconditional
shall include references to the Offer becoming or being declared
unconditional and shall be construed as references to the Offer
becoming or being declared unconditional as to acceptances whether
or not any other condition of the Offer remains to be fulfilled.
References to acceptance of the Offer shall include deemed
acceptance of the Offer.
1. Acceptance period
(a) The Offer will initially remain open for acceptance until
1.00 p.m. on the first closing date. Although no revision is
envisaged, if the Offer (in its original or previously revised
form) is revised it will remain open for acceptance for a period of
at least 14 days (or such other period as may be permitted by the
Panel) from the date of posting of written notification of the
revision to Shareholders. Except with the consent of the Panel, no
such written notification of the revision of the Offer may be
posted to Shareholders after 46 days after the posting of the Offer
Document or, if later, the date which is 14 days before the last
date on which the Offer can become unconditional.
(b) The Offer, whether revised or not, shall not (except with
the consent of the Panel) be capable of becoming unconditional
after midnight 60 days after the posting of the Offer Document (or
on any earlier date beyond which MMGG has stated (and not, where
permitted, withdrawn such statement) that the Offer will not be
extended), nor of being kept open after that time unless it has
previously become unconditional. However, MMGG reserves the right,
with the permission of the Panel, to extend the Offer to later
times and/or dates. Except with the consent of the Panel, MMGG may
not, for the purpose of determining whether the condition as to
acceptances set out in paragraph (a) of Part A of this Appendix
(the "acceptance condition") has been satisfied, take into account
acceptances received or purchases of Morson Shares in respect of
which all relevant electronic instructions or documents are
received by Capita Registrars after 1.00 p.m. on the 60th day after
the posting of the Offer Document (or any earlier time or date
beyond which MMGG has stated that the Offer will not be extended
and in respect of which it has not withdrawn that statement) or
such later time and/or date as the case may be to which the Offer
has been extended. If the Offer is extended beyond midnight on the
60th day after the posting of the Offer Documentacceptances
received and purchases made in respect of which relevant electronic
instructions or documents have been received by Capita Registrars
after 1.00 p.m. on the relevant date may (except where the Code
otherwise permits) only be taken into account with the agreement of
the Panel.
(c) If the Offer becomes unconditional, it will remain open for
acceptance for not less than 14 days from the date on which it
would otherwise have expired. If the Offer has become unconditional
and it is stated by MMGG that the Offer will remain open until
further notice, then not less than 14 days' notice will be given to
those holders of Morson Shares who have not accepted the Offer
prior to the closing of the Offer.
(d) If a competitive situation arises after MMGG has given a "no
extension" statement or a "no increase" statement (as referred to
in the Code), MMGG may (if it has specifically reserved the right
to do so at the time such statement was made or otherwise with the
consent of the Panel) choose not to be bound by or withdraw the
terms of such statement and be free to extend or increase the
Offer, provided that notice is given to that effect as soon as
possible and in any event within four business days after the
announcement of the competing offer and Shareholders are informed
in writing thereof or, in the case of Shareholders with registered
addresses outside the United Kingdom or whom MMGG knows to be
nominees holding Morson Shares for such persons, by announcement in
the United Kingdom at the earliest practicable opportunity. If MMGG
has given a "no increase" statement or a "no extension" statement,
MMGG may (if it has specifically reserved the right to do so at the
time such statement was made or in such other circumstances as may
be permitted by the Panel) choose not to be bound by the terms of
such statement if it would otherwise prevent the posting of an
increased or improved Offer which is recommended for acceptance by
the Independent Director.
(e) If a competitive situation arises and is continuing 60 days
after the posting of the Offer Document, MMGG will enable holders
of Morson Shares in uncertificated form who have not already
validly accepted the Offer but who have previously accepted the
competing offer to accept the Offer by a special form of acceptance
to take effect 60 days after the posting of the Offer Document. It
shall be a condition of such special form of acceptance being a
valid acceptance of the Offer that (i) it is received by Capita
Registrars on or before 60 days after the posting of the Offer
Document, (ii) the relevant Shareholder shall have applied to
withdraw his acceptance of the competing offer but that the Morson
Shares to which such withdrawal relates shall not have been
released from escrow before the 60(th) day after the posting of the
Offer Document by the escrow agent to the competing offer and (iii)
the Morson Shares to which the special form of acceptance relates
are not transferred to escrow in accordance with the procedure for
acceptance set out in the letter from MMGG contained in the Offer
Document on or before 60 days after the posting of the Offer
Document, but an undertaking is given that they will be so
transferred as soon as possible thereafter. Shareholders wishing to
use such forms of acceptance should apply to Capita Registrars on
0871 664 0321 from within the UK or on +44 20 8639 3399 if calling
from outside the UK between 9.00a.m. and 5.30p.m. Monday to Friday.
Calls to the Capita Registrars 0871 664 0321 number are charged at
10 pence per minute (including VAT) plus any of your service
provider's network extras. Calls to the Capita Registrars +44 20
8639 3399 number from outside the UK are charged at applicable
international rates. Different charges may apply to calls made from
mobile telephones and calls may be recorded and monitored randomly
for security and training purposes. Capita Registrars cannot
provide advice on the merits of the Offer nor give any financial,
legal or tax advice. Notwithstanding the right to use such special
form of acceptance, holders of Morson Shares in uncertificated form
may not use a form of acceptance (or any other purported acceptance
form) for the purpose of accepting the Offer in respect of such
shares.
(f) For the purpose of determining at any particular time
whether the acceptance condition has been satisfied, MMGG shall not
be bound (unless otherwise required by the Panel) to take into
account any Morson Shares which have been unconditionally allotted
or issued before such time unless Capita Registrars has received
written notice on behalf of MMGG, from Morson or its agents, at the
address specified in paragraph 3(a) below of the relevant details
of such allotment or issue before that time. Notification by telex
or facsimile or other electronic transmission will not be
sufficient notice for these purposes.
2. Announcements
(a) Without prejudice to paragraph 3 below, by 8.00 a.m. on the
business day following the day on which the Offer is due to expire
or becomes or is declared unconditional or is revised or extended
(as the case may be) (or such later time or date as the Panel may
agree) (the "relevant day") , MMGG will make an appropriate
announcement to a Regulatory Information Service (an "RIS") of the
position. Such announcement will also state (unless otherwise
permitted by the Panel):
(i) the total number of Morson Shares and rights over Morson
Shares (as nearly as practicable) for which acceptances of the
Offer have been received, specifying the extent to which
acceptances have been received from persons acting in concert with
MMGG or in respect of shares which are the subject of an
irrevocable commitment or letter of intent procured by MMGG or its
associates;
(ii) details of any relevant securities (as defined by the Code)
of Morson in which MMGGor any person acting in concert with it has
an interest or in respect of which any such person has a right to
subscribe in each case specifying the nature of the interests and
rights concerned. Similar details of any short positions (whether
conditional or absolute and whether in the money or otherwise),
including any short position under a derivative, any agreement to
sell or any delivery obligation or right to require another person
to purchase or take delivery, will also be stated;
(iii) details of any relevant securities of Morson in respect of
which MMGGor any of its associates has an outstanding irrevocable
commitment or letter of intent;
(iv) details of any relevant securities of Morson which MMGG or
any person acting in concert with it has borrowed or lent, other
than any borrowed shares which have been on-lent or sold; and
(v) the total number of shares which MMGG may count towards
satisfaction of the acceptance condition,
and will specify in each case the percentage of each class of
relevant securities of Morson represented by these figures.
Any decision to extend the date and/or time by which the
acceptance condition has to be fulfilled may be made at any time up
to, and will be announced not later than, 8.00 a.m. on the relevant
day (or such later time and/or date as the Panel may agree) and the
announcement will state the next expiry time and date (unless the
Offer is then unconditional, in which case the announcement may
state that the Offer will remain open until further notice). In
computing the number of shares which MMGG may count towards
satisfaction of the acceptance condition, there may, at the
discretion of MMGG, be included or excluded for announcement
purposes acceptances and purchases which are not complete in all
respects or are subject to verification provided that such
acceptances or purchases of Morson Shares may only be included if
they could be counted towards fulfilling the acceptance condition
in accordance with paragraph 6(j) below and the provisions of the
Code.
(b) References in this Appendix to the making of an announcement
or giving of notice by MMGG include the release of an announcement
by public relations consultants or by SPARK Advisory Partners
Limited, in each case on behalf of MMGG, and the delivery by hand,
telephone, telex or facsimile transmission or other electronic
transmission of an announcement to a RIS. An announcement made
otherwise than to a RIS will be notified simultaneously to a RIS
(unless the Panel otherwise agrees).
(c) Without limiting the manner in which MMGG may choose to make
any public statement and subject to MMGG's obligations under
applicable law, including the Code, MMGG will have no obligation to
publish, advertise or otherwise communicate any such public
announcement other than by making release to a RIS.
3. Rights of withdrawal
(a) If MMGG, having announced the Offer to be unconditional,
fails to comply by 3.30 p.m. on the relevant day (as defined in
paragraph 2 of this Part B) (or such later time(s) and/or date(s)
as the Panel may agree) with any of the other requirements
specified in paragraph 2(a) above, an accepting certificated
Shareholder may (unless the Panel otherwise agrees) immediately
thereafter withdraw his acceptance by written notice (as defined in
paragraph 3(d) below) given by post or by hand (during normal
business hours only) to Capita Registrars Corporate Actions, The
Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU on behalf of
MMGG. Alternatively, in the case of Morson Shares in uncertificated
form, withdrawals can be effected in the manner set out in
paragraph 3(e) below. Subject to paragraph 1(b) above, this right
of withdrawal may be terminated not less than eight days after the
relevant day by MMGG confirming, if that is the case, that the
Offer is still unconditional and complying with the other
requirements specified in paragraph 2(a) above. If any such
confirmation is given, the first period of 14 days referred to in
paragraph 1(c) above will run from the date of such confirmation
and compliance.
(b) If by 1.00 p.m. on the 42(nd) day after the posting of the
Offer Document (or such later time(s) and/or date(s) as the Panel
may agree) the Offer has not become unconditional, an accepting
Shareholder may withdraw his acceptance at any time thereafter at
the address and in the manner referred to in paragraph 3(a) above
(or, in the case of Morson Shares in uncertificated form, in the
manner set out in paragraph 3(e) below) before the earlier of:
(i) the time that the Offer becomes unconditional; and
(ii) the final time for lodgement of acceptances which can be
taken into account in accordance with paragraph 1(b) above.
If the Panel determines that Morson is not permitted to invoke,
or cause or permit MMGG to invoke, a condition to the Offer, it may
instead determine that Shareholders shall be entitled to withdraw
their acceptances on such terms and by such time as the Panel may
determine and notwithstanding that the Offer has become
unconditional as to acceptances. The Panel may also determine that
the timetable applicable to the Offer shall be varied in such
manner as it may determine. Exercise of such withdrawal rights by
accepting Shareholders could result in the Offer, if it has by then
become unconditional as to acceptances, ceasing to be unconditional
as to acceptances.
(c) If after a competitive situation has arisen MMGG chooses not
to be bound by a "no extension" statement or a "no increase"
statement in accordance with paragraph 1(d) above, any Shareholder
who accepts the Offer after the date of such statement may withdraw
his acceptance thereafter at the address and in the manner referred
to in paragraph 3(a) above (or, in the case of Morson Shares held
in uncertificated form, in the manner set out in paragraph 3(e)
below) not later than the eighth day after the date of posting of
written notice to that effect by MMGG to the relevant
Shareholders.
(d) Except as provided by this paragraph 3, acceptances of the
Offer shall be irrevocable. In this paragraph 3 "written notice"
(including any letter of appointment, direction or authority) means
notice in writing bearing the original signature(s) of the relevant
accepting Shareholder(s) or their agent(s) duly appointed in
writing (evidence of whose appointment, in a form reasonably
acceptable to MMGG, is produced with the notice). Notification by
telex or facsimile or other electronic transmissions or copies will
not be sufficient. No notice which is postmarked in or otherwise
appears to have been sent from any Restricted Jurisdiction will be
treated as valid.
(e) In the case of Morson Shares held in uncertificated form, if
withdrawals are permitted pursuant to paragraphs 3(a), (b) or (c)
above, an accepting Shareholder may withdraw his acceptance through
CREST by sending (or, if a CREST sponsored member, procuring that
his CREST sponsor sends) an ESA instruction to settle in CREST in
relation to each Electronic Acceptance to be withdrawn. Each ESA
instruction must, in order for it to be valid and settle, include
the following details:
-- the number of Morson Shares to be withdrawn, together with
their ISIN number, which is GB00B0R7WP21;
-- the member account ID of the accepting shareholder, together with his participant ID;
-- the member account ID of the Escrow Agent included in the
relevant Electronic Acceptance, relevant to the option elected for,
together with the Escrow Agent's participant ID, which is RA10;
-- the CREST transaction ID of the Electronic Acceptance to be
withdrawn to be inserted in the shared note field;
-- the intended settlement date for the withdrawal;
-- the corporate action number for the Offer which is allocated
by Euroclear UK & Ireland and can be found by viewing the
relevant corporate action details in CREST; and
-- input with standard delivery instruction priority of 80.Any
such withdrawal will be conditional upon Capita Registrars
verifying that the withdrawal request is validly made. Accordingly,
Capita Registrars will, on behalf of MMGG, reject or accept the
withdrawal by transmitting in CREST a receiving agent reject (AEAD)
or receiving agent accept (AEAN) message.
(f) Immediately (or within such longer period not exceeding 14
days, as the Panel may permit) upon an accepting shareholder
validly withdrawing his acceptance:
(i) in respect of Morson Shares held in certificated form the
share certificate(s) and/or other document(s) of title will be
returned by post (or such other method as may be approved by the
Panel) at the risk of the Shareholder concerned, to the person or
agent whose name and address is set out in the Form of Acceptance
or, if no address is set out, to the first-named holder at his
registered address; and
(ii) in respect of Morson Shares held in uncertificated form
Capita Registrars will give instructions to Euroclear UK &
Ireland to transfer all Morson Shares held in escrow balances and
in relation to which it is the Escrow Agent for the purposes of the
Offer to the original available balances of the Shareholder
concerned.
(g) Morson Shares in respect of which acceptances have been
properly withdrawn in accordance with this paragraph 3 of this Part
B may subsequently be re-assented to the Offer by following one of
the procedures described in the Offer Document, at any time while
the Offer remains open for acceptance.
(h) Any question as to the validity (including time of receipt)
of any notice of withdrawal will be determined by MMGG whose
determination (save as the Panel otherwise determines) will be
final and binding. None of MMGG, Morson, Capita Registrars or any
other person will be under any duty to give notification of any
defect in any notice of withdrawal or will incur any liability for
failure to do so.
4. The Loan Note Alternative
(a) As an alternative to receiving cash under the Offer, Morson
Shareholders may elect to receive the Loan Note Alternative in
respect of their total shareholding, which subject to the terms of
the Offer, is available to accepting Morson Shareholders for as
long as the Offer remains open for acceptance. Morson Shareholders
who elect to receive Offer Loan Notes must accede to the terms of
the Intercreditor Agreement.
(b) No election for the Loan Note Alternative will be valid
unless the following has occurred by the time and date on which the
Loan Note Alternative closes:
(i) if the Morson Shares to which the acceptance relates are in
certificated form, receipt of the Form of Acceptance containing a
valid acceptance of the Offer and a valid election for the Loan
Note Alternative (including acceding to the Intercreditor
Agreement), duly completed in all respects and accompanied by all
relevant share certificate(s) and/or other documents(s) of title;
or
(ii) if the Morson Shares to which the acceptance relates are in
uncertificated form, settlement of an Alternative TTE instruction
in favour of the Escrow Agent in relation to those Morson Shares,
in accordance with the procedures described in the Offer Document.
Shareholders are also required to accede to the Intercreditor
agreement.
(c) If (in respect of Morson Shares held in certificated form)
any Form of Acceptance which includes an election for the Loan Note
Alternative is either received after the time and date the Loan
Note Alternative has closed or is received before such time but is
not valid or complete in all respects at such time and date, such
election shall, for all purposes, be void and the Morson
Shareholder purporting to make such election shall not, for any
purpose, be entitled to receive any consideration under the Loan
Note Alternative, but the acceptance, if otherwise valid, shall be
deemed to be an acceptance of the basic terms of the Offer in
respect of the number of Morson Shares inserted or deemed to be
inserted in Box 1 of the Form of Acceptance and the relevant Morson
Shareholder will, on the Offer becoming or being declared wholly
unconditional, be entitled to receive the consideration due under
the basic terms of the Offer.
(d) If (in respect of Morson Shares held in uncertificated form)
any alternative TTE Instruction in favour of the Escrow Agent is
made but the Shareholder does not accede to the terms of the
Intercreditor Agreement either before the time and date the Loan
Note Alternative has closed or such agreement so acceding is
received before such time but is not valid or complete in all
respects at such time and date, such election shall, for all
purposes, be void and the Morson Shareholder purporting to make
such election shall not, for any purpose, be entitled to receive
any consideration under the Loan Note Alternative, but the
acceptance, if otherwise valid, shall be deemed to be an acceptance
of the terms of the Offer in respect of the number of Morson Shares
in respect of which the alternative TTE Instruction relates and the
relevant Morson Shareholder will, on the Offer becoming or being
declared wholly unconditional, be entitled to receive the
consideration due under the basic terms of the Offer.
5. Revised Offer
(a) Although no revision of the Offer is envisaged, if the Offer
(in its original or any previously revised form(s)) is revised
(either in its terms or conditions or in the value or form of the
consideration offered or otherwise) (which MMGG reserves the right
to do) and such revision represents on the date on which such
revision is announced (on such basis as SPARK Advisory Partners
Limited may consider appropriate) an improvement (or no diminution)
in the value of the consideration compared with that previously
offered, the benefit of the revised Offer will (subject to
paragraphs 5(b), 5(c) and 7 below) be made available to a
Shareholder who has accepted the Offer (in its original or
previously revised form(s)) and not previously withdrawn such
acceptance (a "Previous Acceptor").
The acceptance by or on behalf of a Previous Acceptor of the
Offer (in its original or any previously revised form(s)) shall,
subject as provided below, be deemed an acceptance of the Offer as
so revised and shall also constitute a separate appointment of MMGG
or SPARK Advisory Partners Limited or any director of MMGG as his
attorney and agent to accept any such revised Offer on behalf of
such Previous Acceptor and, if such revised Offer includes
alternative forms of consideration, to make elections and/or accept
such alternative forms of consideration in such proportions as such
attorney and/or agent in his absolute discretion thinks fit and to
execute on behalf of and in the name of such Previous Acceptor all
such further documents (if any) as may be required to give effect
to such acceptances and/or elections. In making any such acceptance
or election, such attorney and/or agent shall take into account the
nature of any previous acceptances and/or elections made by the
Previous Acceptor and such other facts or matters as he may
reasonably consider relevant.
(b) The deemed acceptances and/or elections referred to in
paragraph 5(a) above shall not apply and the authorities conferred
by paragraph 5(a) above shall not be exercised if, as a result
thereof, a Previous Acceptor would (on such basis as SPARK Advisory
Partners Limited may advise MMGG) receive less in aggregate
consideration than he would have received as a result of his
acceptance of the Offer in the form in which it was originally
accepted by him or on his behalf unless the Previous Acceptor has
previously otherwise agreed in writing. The authorities conferred
by paragraph 5(a) of this Part B shall not be exercised in respect
of any election available under the revised Offer save in
accordance with this paragraph 5(b).
(c) The deemed acceptances and/or elections referred to in
paragraph 5(a) above shall not apply and the authorities conferred
by paragraph 5(a) above shall be ineffective to the extent that a
Previous Acceptor (i) in respect of Morson Shares in certificated
form, shall lodge, within 14 days of the posting of the document
pursuant to which the revision of the Offer referred to in
paragraph 5(a) above is made available to the Shareholders (or such
later date as MMGG may determine), a form in which he validly
elects to receive the consideration receivable by him under that
revised Offer in some other manner than that set out in his
original acceptance or (ii) in respect of Morson Shares in
uncertificated form, sends (or, if a CREST sponsored member,
procures that his CREST sponsor sends) an ESA instruction to settle
in CREST in relation to each Electronic Acceptance in respect of
which an election is to be varied. Each ESA instruction must, in
order for it to be valid and settle, include the following
details:
-- the number of Morson Shares in respect of which the changed
election is made, together with their ISIN number, which is
GB00B0R7WP21 ;
-- the member account ID of the Previous Acceptor, together with his participant ID;
-- the member account ID of the Escrow Agent included in the
relevant Electronic Acceptance, relevant to the option elected for,
together with the Escrow Agent's participant ID, which is RA10;
-- the CREST transaction ID of the Electronic Acceptance in
respect of which the election is to be changed;
-- the intended settlement date for the changed election;
-- the corporate action number for the Offer which is allocated
by Euroclear UK & Ireland and can be found by viewing the
relevant corporate action details in CREST;
-- input with standard delivery instruction priority of 80;
and, in order that the desired change of election can be
effected, must include:
-- the member account ID of the Escrow Agent relevant to the new election.
Any such change of election will be conditional upon Capita
Registrars verifying that the request is validly made. Accordingly,
Capita Registrars will, on behalf of MMGG, reject or accept the
requested change of election by transmitting in CREST a receiving
agent reject (AEAD) or receiving agent accept (AEAN) message.
(d) The authorities referred to in this paragraph 5 and any
acceptance of a revised Offer and/or election pursuant thereto
shall be irrevocable unless and until the Previous Acceptor becomes
entitled to withdraw his acceptance under paragraph 3 above and
duly and validly does so.
(e) MMGG reserves the right to treat an executed Form of
Acceptance or TTE instruction relating to the Offer (in its
original or any previously revised form(s)) which is received after
the announcement or issue of the Offer in any revised form as a
valid acceptance of the revised Offer and such acceptance shall
constitute an authority in the terms of this paragraph 5 mutatis
mutandis on behalf of the relevant Shareholder.
6. General
(a) Except with the consent of the Panel, the Offer will lapse
unless all the conditions (other than the acceptance condition)
have been fulfilled by or (if capable of waiver) waived by or
(where appropriate) determined by MMGG in its reasonable opinion to
be or to remain satisfied as at midnight on the 42(nd) day after
the posting of the Offer Document or within 21 days after the date
on which the Offer becomes or is declared unconditional, whichever
is the later or such later date as MMGG, with the consent of the
Panel, may decide. If the Offer is referred to the Competition
Commission before the later of the first closing date and the date
when the Offer becomes or is declared unconditional, the Offer will
lapse. If the Offer lapses for any reason, the Offer will cease to
be capable of further acceptance and Shareholders who have accepted
the Offer and MMGG will cease to be bound by acceptances delivered
on or before the date on which the Offer so lapses.
(b) All communications, notices, certificates, documents of
title and remittances to be delivered by or to or sent to or from
Shareholders or as otherwise directed will be delivered by or to or
sent to or from them (or their designated agents) at their
risk.
(c) The expression "Offer Period" when used in this document
means the period commencing on the date of this announcement until
whichever of the following dates shall be the latest: (i)the first
closing date, (ii) the date on which the Offer lapses and (iii) the
date on which the Offer becomes wholly unconditional.
(d) All references in the Offer Document and in the Form of
Acceptance to the first closing date, shall (except in paragraphs
1(a) and 6(c) above and where the context otherwise requires)be
deemed, if the expiry date of the Offer shall be extended, to refer
to the expiry date of the Offer as so extended.
(e) Except with the consent of the Panel, settlement of the
consideration to which any Shareholder is entitled under the Offer
will be implemented in full in accordance with the terms of the
Offer without regard to any lien, right of set-off, counterclaim or
other analogous right to which MMGG may otherwise be, or claim to
be, entitled as against such Shareholderand will be effected by the
despatch of cheques or the crediting of CREST accounts or the issue
and despatch of Offer Loan Note certificates:
(i) in the case of acceptances received, complete in all
respects (including the relevant transfer to escrow or (as
applicable) receipt of the relevant share certificate(s) and/or
other document(s) of title or indemnities satisfactory to MMGG), by
the date on which the Offer becomes or is declared unconditional in
all respects, and will be effected by the dispatch of cheques or
the crediting of CREST accounts within 14 calendar days of such
date or the issue and despatch of Offer Loan Note certificates;
or
(ii) in the case of acceptances of the Offer received, complete
in all respects, after the date on which the Offer becomes or is
declared unconditional in all respects, but while it remains open
for acceptance, within 14 calendar days of such receipt.
All cash payments (other than payments made by means of CREST)
will be made in pounds sterling by cheque drawn on a branch of a UK
clearing bank. Unless otherwise determined by MMGG, no
consideration will be sent to any address in a Restricted
Jurisdiction.
(f) The instructions, authorities and provisions contained in,
or deemed to be incorporated in, the Form of Acceptance constitute
part of the terms of the Offer. Words and expressions defined in
this document have the same meanings when used in the Form of
Acceptance unless the context otherwise requires.
(g) The Offer and all acceptances thereof and all elections
thereunder or pursuant thereto and the Form of Acceptance,
Electronic Acceptance and all contracts made pursuant thereto and
action taken or made or deemed to be taken or made under any of the
foregoing shall be governed by and construed in accordance with
English law.
(h) Any omission to despatch this document, the Form of
Acceptance or any notice required to be given under the terms of
the Offer to, or any failure to receive the same by, any person to
whom the Offer is made or should be made shall not invalidate the
Offer in any way or create any implication that the Offer has not
been made to any such person. Subject to paragraph 7 below, the
Offer extends to any such person and to all Shareholders to whom
this document and the Form of Acceptance may not have been
despatched or by whom such documents may not be received and such
persons may collect the relevant documents from Capita Registrars
at its address set out in paragraph 3(a) above.
(i) MMGG and SPARK Advisory Partners Limited reserve the right
to treat acceptances of the Offer as valid if received by or on
behalf of either of them at any place or places or in any manner
determined by either of them otherwise than as stated in this
document or in the Form of Acceptance. Neither MMGG, nor any agent
acting on behalf of MMGG, shall have any liability to any person
for any loss or alleged loss arising from any decision as to the
treatment of acceptances of the Offer or otherwise in connection
therewith.
(j) Notwithstanding the right reserved by MMGG to treat an
acceptance of the Offer as valid even though (in the case of Morson
Shares held in certificated form) the relevant Form of Acceptance
is not entirely in order or not accompanied by the relevant share
certificate(s) and/or other document(s) of title, except with the
consent of the Panel:
(i) an acceptance of the Offer will only be counted towards
fulfilling the acceptance condition if the requirements of Note 4
and, if applicable, Note 6 of Rule 10 of the Code are satisfied in
respect of it;
(ii) a purchase of Morson Shares by MMGG or its nominee(s) (or,
if MMGG is required to make an offer under Rule 9 of the Code, a
person acting in concert withMMGG) will only be counted towards
fulfilling the acceptance condition if the requirements of Note 5
and, if applicable, Note 6 of Rule 10 of the Code are satisfied in
respect of it; and
(iii) Morson Shares which have been borrowed by MMGG will not be
counted towards fulfilling the acceptance condition.
Save as set out in paragraphs 1(e) and 6(c) above , the Offer
may not be accepted otherwise than by means of a form of acceptance
or TTE instruction.
(k) Except with the consent of the Panel, the Offer will not
become unconditional unless Capita Registrars has issued a
certificate to MMGG or SPARK Advisory Partners Limited (or their
respective agents) which states the number of Morson Shares in
respect of which acceptances have been received and the number (if
any) of Morson Shares otherwise acquired, whether before or during
the Offer Period, which comply with paragraph 6(j) above.
(l) If the Offer does not become unconditional in all respects:
(i) in respect of Morson Shares held in certificated form the
share certificate(s) and/or other document(s) of title will be
returned by post (or such other method as may be approved by the
Panel) within 14 days of the Offer lapsing, at the risk of the
Shareholder concerned, to the person or agent whose name and
address is set out in the Form of Acceptance or, if no address is
set out, to the first-named holder at his registered address;
and
(ii) in respect of Morson Shares held in uncertificated form
Capita Registrars will, immediately after the lapsing of the Offer
(or within such longer period as the Panel may permit, not
exceeding 14 days after the lapsing of the Offer), give
instructions to Euroclear UK & Ireland to transfer all Morson
Shares held in escrow balances and in relation to which it is the
Escrow Agent for the purposes of the Offer to the original
available balances of the Shareholders concerned.
(m) For the purposes of this document, the time of receipt of a
TTE instruction, an ESA instruction or an Electronic Acceptance
shall be the time at which the relevant instruction settles in
CREST.
(n) All powers of attorney and authorities on the terms
conferred by or referred to in this Part B or in the Form(s) of
Acceptance are given by way of security for the performance of the
obligations of the Shareholder concerned and are irrevocable in
accordance with section 4 of the Powers of Attorney Act 1971,
except in the circumstances where the donor of such power of
attorney or authority validly withdraws his acceptance in
accordance with paragraph 3 above.
(o) If sufficient Morson Shares are acquired by MMGG, whether
pursuant to acceptances of the Offer or otherwise, MMGG intends to
apply the provisions of sections 974 to 991 of the Companies Act
2006 to acquire compulsorily any outstanding Morson Shares. If MMGG
acquires or agrees to acquire, by virtue of its shareholding and
acceptances of the Offer, issued share capital carrying 75 per
cent. or more of the voting rights of Morson, MMGG intends to
procure that Morson applies for cancellation of the trading in
Morson Shares on AIM not less than 20 business days following MMGG
first having acquired or agreed to acquire such issued share
capital and thereafter to procure that the Company applies to be
re-registered as a private limited company under the Companies
Act,
(p) No acknowledgement of receipt of any Form of Acceptance,
share certificate(s) and/or other document(s) of title, or of any
TTE instruction will be given by MMGG or Spark Advisory Partners
Limited or any of their respective agents.
(q) The Offer will be made by an Offer Document to be issued
within 28 days of the date of this announcement and will be capable
of acceptance from and after that time. The Offer will be notified
to certain Shareholders by means of an advertisement to be inserted
in the London Gazette promptly following the date of the Offer
Document. Copies of this document, and, once issued, the Offer
Document, the Form of Acceptance and any related documents are or
will be available for collection from Capita Registrars, The
Registry, 34 Beckenham Road, Beckenham, Kent, BR3 4TU.
(r) In relation to any acceptance of the Offer in respect of a
holding of Morson Shares which are held in uncertificated form in
CREST, MMGG reserves the right to make such alterations, additions
or modifications to the terms of the Offer as may be necessary or
desirable to give effect to any acceptance of the Offer, whether in
order to comply with the facilities or requirements of CREST or
otherwise to confer on MMGG or, as the case may be, the relevant
Shareholder the benefits and entitlements provided for under the
terms of the Offer, provided that such alterations, additions or
modifications are consistent with the requirements of the Code or
are otherwise made with the consent of the Panel.
(s) MMGG may, with the agreement of the Independent Director and
the Panel, elect to implement the acquisition by way of a court
sanctioned scheme of arrangement under Part 26 of the Companies
Act. Any such scheme of arrangement will be implemented on the same
terms (subject to appropriate amendments), so far as applicable, as
those which would apply to the Offer.
(t) If the Panel requires MMGG to make an offer for any Morson
Shares under the provisions of Rule 9 of the Code, MMGG may make
such alterations to the Conditions, including condition (a) of Part
A of this Appendix, as are necessary to comply with the provisions
of that rule.
7. Overseas Shareholders of Morson
(a) The making of the Offer in, or to, certain persons who are
citizens, residents or nationals of, jurisdictions outside the
United Kingdom may be prohibited or affected by the laws of the
relevant jurisdiction. Shareholders in that position should inform
themselves about and observe any applicable legal or regulatory
requirements. It is the responsibility of any such person wishing
to accept the Offer to satisfy himself as to the full observance of
the laws and regulatory requirements of the relevant jurisdiction
or territory in connection therewith, including the obtaining of
any governmental, exchange control or other consents which may be
required, or the compliance with other necessary formalities and
the payment of any issue, transfer or other taxes due in such
jurisdiction. Any such shareholder will be responsible for any
payment of any issue, transfer or other taxes or other requisite
payments due in such jurisdiction by whomsoever payable, and MMGG
and Spark Advisory Partners Limited and any person acting on their
behalf shall be entitled to be fully indemnified and held harmless
by such shareholder for any such issue, transfer or other taxes as
such person may be required to pay.
If you are an Overseas Shareholder and are in any doubt as to
your position, you should consult your independent financial
adviser in the relevant jurisdiction.
(b) In particular, the Offer is not being made, directly or
indirectly, in a Restricted Jurisdiction, or by use of the mails of
or by any means or instrumentality of interstate or foreign
commerce of, or of any facilities of a national securities exchange
of, any Restricted Jurisdiction. This includes, but is not limited
to, the post, facsimile transmission, e-mail, telex, the internet
and telephone. The Offer cannot be accepted by any such use, means
or instrumentality or from within any Restricted Jurisdiction.
Accordingly, copies of this document, the Offer Document with the
Form of Acceptance and any related offering documents, are not
being mailed or otherwise distributed or sent into any Restricted
Jurisdiction, including to Shareholders with registered addresses
in any Restricted Jurisdiction, or to persons whom MMGG knows to be
nominees, trustees or custodians holding Morson Shares for such
persons. Persons receiving such documents (including, without
limitation, custodians, nominees and trustees) must not distribute
or send them in, into or from any Restricted Jurisdiction, or use
such mails or any such means or instrumentality for any purpose,
directly or indirectly, in connection with the Offer, and doing so
will render invalid any related purported acceptance of the Offer.
Persons wishing to accept the Offer must not use such mails or any
such means, instrumentality or facility for any purpose directly or
indirectly related to the acceptance of the Offer.
Envelopes containing a Form of Acceptance must not be postmarked
in any Restricted Jurisdiction, or otherwise despatched from any
Restricted Jurisdiction, and all acceptors must provide addresses
outside any Restricted Jurisdiction for the remittance of cash or
the return of the Form of Acceptance, Morson share certificate(s)
and/or other document(s) of title.
(c) Notwithstanding the other provisions of this paragraph 7,
MMGG may at its sole discretion provide cash consideration to a
person in or resident of any Restricted Jurisdiction if requested
to do so by or on behalf of that person and if MMGG and/or SPARK
Advisory Partners Limited is satisfied in that particular case that
to do so will not constitute a breach of any securities or other
relevant legislation of any Restricted Jurisdiction, as
appropriate.
APPENDIX II
A - Summary of the Terms of the Offer Loan Notes
The Offer Loan Notes
The Offer Loan Notes will be created by a resolution of the MMGG
Board (or a duly authorised committee thereof) and will be
constituted by the Offer Loan Note Instrument executed as a deed by
MMGG.
The issue of the Offer Loan Notes will be conditional on the
Offer being declared wholly unconditional.
The Offer Loan Notes will not be transferable.
No application will be made for the Offer Loan Notes to be
listed or dealt in on any stock exchange.
The Offer Loan Notes will not be qualifying corporate bonds for
United Kingdom taxation purposes for Morson Shareholders who are
individuals.
The Offer Loan Notes will bear interest at 4% per annum but this
interest will be accrued and only paid when the Offer Loan Notes
are redeemed. The Offer Loan Notes are, on the face of the Offer
Loan Note Instrument, redeemable on 1 January 2018. However,
payments under the Offer Loan Notes are subject to the terms of the
Intercreditor Agreement and it cannot be guaranteed that redemption
will occur on that date. The Offer Loan Notes are and shall remain
unguaranteed, unsecured and unsubordinated.
MMGG may, at any time, elect to redeem all or any part of the
Offer Loan Notes (or any Offer Loan Notes or part of any Offer Loan
Notes held by certain Offer Loan Noteholders as the board of MMGG
may elect), but subject to the terms of the Intercreditor
Agreement.
The Offer Loan Note Instrument
The Offer Loan Note Instrument will contain provisions, among
other things, to the effect set out below.
(a) Form and status
The Offer Loan Notes will be issued by MMGG, credited as fully
paid, in denominations or multiples of 50 pence nominal value and
shall be held subject to and with the benefit of the conditions and
the provisions set out in the Offer Loan Note Instrument. The Offer
Loan Notes constitute direct, unsecured obligations of MMGG but
subject to the terms of the Intercreditor Agreement with
Barclays.
(b) Interest
Interest shall accrue at the rate of 4% per annum but such
interest shall not be compounded and not paid until redemption of
the Offer Loan Notes.
(c) Redemption
Subject to the Intercreditor Agreement, MMGG may, at any time,
elect to redeem all or any part of the Offer Loan Notes (or any
Offer Loan Notes or part of any Offer Loan Notes held by certain
Offer Loan Noteholders as the board of MMGG may elect) at par
(together with any accrued interest), without penalty, by serving
written notice on the Offer Loan Noteholders in question in advance
of any such redemption specifying the amount of the Offer Loan
Notes which are to be redeemed.
The Offer Loan Notes are, on the face of the Offer Loan Note
Instrument, redeemable on 1 January 2018. However, payments under
the Offer Loan Notes are subject to the terms of the Intercreditor
Agreement with Barclays and it cannot be guaranteed that redemption
will occur on that date.
(d) Purchase and cancellation
Subject to the Intercreditor Agreement, MMGG may purchase Offer
Loan Notes at any time from any person. All Offer Loan Notes
purchased by MMGG shall be cancelled and MMGG may not reissue the
same.
(e) Transfer
An Offer Loan Noteholder may not transfer his interest in any
Offer Loan Notes.
(f) Modification
Subject to the Intercreditor Agreement, the Offer Loan Note
Instrument and the rights of the Offer Loan Noteholders may be
modified, abrogated, compromised or extinguished with the sanction
of a special resolution of the Offer Loan Noteholders. Under the
terms of the Offer Loan Note Instrument, a special resolution is
defined as a resolution passed at a meeting of the Offer Loan
Noteholders (duly convened and held in accordance with the
provisions of Schedule 3 of the Offer Loan Note Instrument) by a
majority consisting of not less than 51% of the persons voting (in
person or by proxy) upon a show of hands and, if a poll is
demanded, by a majority consisting of not less than 51% of the
votes given (in person or by proxy) on the poll.
(g) Governing law
The Offer Loan Notes and the Offer Loan Note Instrument will be
governed by, and construed in accordance with, English law.
B - Summary of the Intercreditor Agreement
The Intercreditor Agreement has been entered into on 24 May 2012
between Barclays Bank PLC (in various capacities), Gerard Anthony
Mason and MMGG and the companies named therein (as debtors and
intra-group lenders). Following the Offer being declared wholly
unconditional and Morson being re-registered as a private limited
company, certain members of the Morson Group are required to accede
to the terms of the Intercreditor Agreement. It is a term of the
Offer that persons accepting the Offer and electing for the Loan
Note Alternative must, for such election to be valid, accede to the
terms of the Intercreditor Agreement as subordinated lenders.
Morson Shareholders should be aware that the terms of the
Intercreditor Agreement make it uncertain when any payments,
whether of interest or principal or otherwise, may be made pursuant
to the Offer Loan Notes notwithstanding the terms of the Offer Loan
Note Instrument.
The Intercreditor Agreement contains provisions, among other
things, to the effect set out below.
(a) Ranking
The parties to the Intercreditor Agreement (including those who
accede to its terms) agree that monies owed to Barclays under the
terms of its various facilities (which currently include the
facilities referred to in paragraph 8 of this announcement as well
as other facilities made available to members of the Morson Group
(e.g. an overdraft facility, a confidential invoice discounting
facility, hedging and other facilities) (as amended or varied or
supplemented from time to time) will rank in priority to any monies
payable under the Mason Loan, the Offer Loan Notes and any intra
group obligations between MMGG and members of the Morson Group.
Monies payable after Barclays has been repaid in full or as
permitted by the Intercreditor Agreement will firstly be repaid
pursuant to the Mason Loan, secondly the Offer Loan Notes and
thirdly any intra group obligations between MMGG and members of the
Morson Group.
(b) Security
The parties to the Intercreditor Agreement (including those who
accede to its terms) agree that any security granted will secure
monies due to Barclays which ranks, as referred to in (a) above in
priority to other security. Barclays has security by a debenture
granted by both MMGG and the Morson Group and will take, inter
alia, further security from the Morson Group following the Offer
being declared wholly unconditional and Morson being re-registered
as a private limited company. The Mason Loan is secured in MMGG and
he will take, inter alia, further security from the Morson Group
following the Offer being declared wholly unconditional and Morson
being re-registered as a private limited company which will rank
behind that of Barclays as referred to in (a) above. The Offer Loan
Notes are neither guaranteed or secured.
(c) Payments
The terms of the Intercreditor Agreement mean that payments to
Barclays can be made without restriction. Payments in respect of
the Mason Loan are subject to certain conditions, and/or the
satisfaction of certain financial covenants and the receipt of
certain information and certificates from MMGG. In addition,
payments in respect of the Mason Loan may be made in certain
circumstances where the Company is deemed to have excess cashflow
(as defined in the Intercreditor Agreement) but there can be no
certainty such circumstances will occur. Payments under the Offer
Loan Notes cannot be made until Barclays have been repaid to their
satisfaction and in any event only with the consent of Gerard
Anthony Mason whilst the Mason Loan remains outstanding in whole or
in part.
(d) Amendments to Offer Loan Notes
Whilst the Offer Loan Note Instrument permits amendments in
certain circumstances, no amendments (unless of a minor or
administrative nature) may be made without the consent of Barclays
(whilst they have any of their facilities outstanding) and Gerard
Anthony Mason (whilst any of the Mason Loan remains
outstanding).
(e) Enforcement
No enforcement action may be taken by Gerard Anthony Mason in
respect of the Mason Loan until Barclays have been repaid to its
satisfaction and by the holders of the Offer Loan Notes in respect
of amounts due under the Offer Loan Notes until Barclays have been
repaid to their satisfaction and the Mason Loan has been
repaid.
APPENDIX III
Sources and Bases of Information
Unless otherwise stated in this announcement:
1. The value attributed to the issued share capital of Morson is
based on 45,343,750 Morson Shares in issue as at 24 May 2012, being
the last practicable date prior to the date of this
announcement.
2. The financial information relating to Morson has been
extracted (without any adjustment) from the audited consolidated
financial statements of Morson for the relevant years, prepared in
accordance with IFRS.
3. All prices quoted for Morson Shares have been derived from
the Daily Official List and represent Closing Prices on the
relevant dates(s).
APPENDIX IV
Part 1: Irrevocable Undertakings to accept the Cash Offer
Name of Morson Number of Morson Percentage of
Shareholder Shares Morson issued
share capital
------------------------ ------------------ ----------------
HSBC Global Custody
Nominee (UK) Ltd
A/C 912109 (1)(2) 185,350 0.41
------------------------ ------------------ ----------------
HSBC Global Custody
Nominee (UK) Ltd
A/C 811597 (1)(2) 2,090,000 4.61
------------------------ ------------------ ----------------
Statestreet Nominees
Ltd A/C 2GHL (1)(2) 2,450,000 5.40
------------------------ ------------------ ----------------
BNP Paribas Securities
Nominees Ltd Des:
309304 (1)(2) 59,400 0.13
------------------------ ------------------ ----------------
I G Knight (1) 20,000 0.04
------------------------ ------------------ ----------------
Note
These irrevocable undertakings cease to be binding if:
1. the Offer Document is not posted by 30 June 2012; or
2. prior to the Offer being declared unconditional a person
other than the Offeror announces a firm intention to make an offer
to acquire the entire issued share capital of the Company at a
price not less than 10 per cent. above the value of the Offer.
Part 2: Irrevocable Undertakings to accept the Offer Loan
Notes
Irrevocable Undertakings
Name of Morson Number of Morson Percentage of
Shareholder Shares Morson issued
share capital
----------------- ------------------ ----------------
G G Mason (1) 9,984,215 22.02
----------------- ------------------ ----------------
G A Mason (2) 9,984,215 22.02
----------------- ------------------ ----------------
P J Gilmour 630,000 1.39
----------------- ------------------ ----------------
K P Gorton 611,200 1.35
----------------- ------------------ ----------------
Note
1. Of the Morson Shares included in G G Mason's holding, 921,875
are held by the trustees of a discretionary trust of which G G
Mason is a trustee.
2. The Morson Shares included in G A Mason's irrevocable
undertaking are 921,875 less than those in G A Mason's director's
interests. The interests include the Morson Shares referred to in
Note 1 above, over which G A Mason has no ability to accept the
Offer.
APPENDIX V
Definitions
In this announcement the following expressions have the
following meaning:
"Accounting Date" 31 December 2011
"AIM" the AIM market of the
London Stock Exchange
"Announcement Date" 25 May 2012
"Authorisations" authorisations, orders,
recognitions, grants,
consents, licences, confirmations,
clearances, permissions
and approvals
"Barclays" Barclays Bank PLC
"Business Day" any day (other than a
Saturday or Sunday or
a public holiday) on which
banks generally are open
for business in London
(other than solely for
settlement and trading
in euro)
"Capita Registrars" A trading name of Capita
Registrars Limited
"Cash Offer" the recommended cash offer
to be made by MMGG to
acquire all of the issued
and to be issued Morson
Shares on the terms and
subject to the conditions
to be set out in the Offer
Document and the Form
of Acceptance and, where
the context so requires,
any subsequent revision,
variation, extension or
renewal thereof
"Closing Price" the closing middle-market
quotation of a Morson
Share as derived from
the Daily Official List
"Code" or "City the City Code on Takeovers
Code" and Mergers as from time
to time interpreted by
the Panel
"Companies Act" the Companies Act 2006,
or "Companies Act as amended
2006"
"Daily Official the official list of share
List" prices produced by the
London Stock Exchange
"Directors" the directors of Morson
and "Director" means any
one of them
"Disclosed" fairly disclosed in writing
by or on behalf of Morson
to MMGG or its advisers
"first closing the date falling 21 days
date" after the date on which
the Offer Document is
posted
"Form of Acceptance" the form of acceptance
and authority relating
to the Offer which will
accompany the Offer Document
"FSA" the Financial Services
Authority of the United
Kingdom
"FSMA" the Financial Services
and Markets Act 2000,
as amended
"HS2" High Speed 2 which is
a planned high-speed railway
between London and the
Midlands, Northern England
and, potentially at a
later stage, the central
belt of Scotland
"Independent Director" Ian Graham Knight, the
only Director who is not
also a member of the Management
Team
"intellectual property" all patents, trademarks,
trade names, service marks,
copyrights, designs, databases
and any applications therefore,
schematics, technology,
know--how, computer software,
programs or applications
(in both source code and
object code form), and
tangible or intangible
proprietary information
or material
"Intercreditor the intercreditor agreement
Agreement" to be entered into between
amongst others, MMGG (in
various capacities), Barclays
and Gerard Anthony Mason
(and others from time
to time) on 24 May 2012,
further details of which
are set out in the Offer
Document and the Form
of Acceptance
"legal proceedings" actions, suits, proceedings,
investigations, references
or enquiries
"Loan Note Alternative" the option whereby Morson
Shareholders may elect
to receive Offer Loan
Notes instead of all of
the cash consideration
to which they would otherwise
be entitled under the
Offer
"London Stock Exchange" London Stock Exchange
plc
"Management Team" each of Gerrard Godfrey
or "Management" Mason, Gerard Anthony
Mason, Paul John Gilmour
and Kevin Patrick Gorton
"Mason Loan" the loan to MMGG from
Gerard Anthony Mason described
in paragraph 8 of this
announcement
"MMGG" or "Offeror" MMGG Acquisition PLC registered
with company number 07976532
and whose registered office
is at c/o Atticus Legal
LLP, Castlefield House,
Liverpool Road, Manchester,
M3 4SB
"MMGG Board" or the board of directors
"MMGG Directors" of MMGG
"Morson" or "Company" Morson Group plc registered
with company number 05111937
and whose registered office
is at Adamson House, Centenary
Way, Salford, Manchester,
M50 1RD
"Morson Board" the board of directors
or "Morson Directors" of Morson
"Morson Group" Morson, its subsidiaries
or "Group" and its subsidiary undertakings
"Morson Projects" Morson Projects Limited,
a subsidiary of the Company
"Morson Shareholders" the holders of Morson
or "Shareholders" Shares from time to time
"Morson Shares" the existing unconditionally
allotted or issued and
fully paid ordinary shares
of five pence each of
Morson and any further
such shares which are
unconditionally allotted
or issued fully paid,
or credited as fully paid,
before the date on which
the Offer closes (or before
such earlier date as MMGG
may, subject to the Code,
decide, not being earlier
than (a) the date on which
the Offer becomes or is
declared unconditional
as to acceptances or (b),
if later, the first closing
date of the Offer)
"Morson Share Schemes" The Morson Enterprise
Management Incentive Scheme
2006, the Morson Unapproved
Share Option Scheme 2006
and the Morson Group plc
2008 Discretionary Share
Option Plan UK Approved
Addendum
"Offer" the offer to be made by
MMGG to acquire all of
the issued and to be issued
Morson Shares on the terms
and subject to the conditions
to be set out in the Offer
Document and the Form
of Acceptance and, where
the context so requires,
any subsequent revision,
variation, extension or
renewal thereof and includes
any election available
in connection with it
"Offer Document" the document to be sent
to Morson Shareholders
and, for information only,
"Offer Loan Note to holders of options
Instrument" under the Morson Share
Schemes which will contain
the Offer
an instrument to be executed
by MMGG creating the Offer
Loan Notes
"Offer Loan Noteholders" holders of Offer Loan
Notes from time to time
"Offer Loan Notes" the unguaranteed and unsecured
loan notes in MMGG to
be issued as an alternative
to the Cash Offer, further
details of which are set
out in the Offer Document
and the Form of Acceptance
"Offer Price" the sum of 50 pence per
Morson Share
"Opening Price" the opening middle-market
quotation of a Morson
Share as derived from
the Daily Official List
"Panel" the Panel on Takeovers
and Mergers
"Publicly Announced" specifically disclosed
in the annual report and
accounts of Morson for
the year ended on the
Accounting Date, in this
announcement or in any
other announcement made
to a Regulatory Information
Service since the date
of publication of such
report and accounts and
prior to the Announcement
Date
"Regulatory Information as defined in the UK Listing
Service" Rules
"relevant persons" governments, governmental,
quasi--governmental, supra-national,
statutory, investigative,
regulatory or administrative
bodies or trade agencies,
associations, institutions
or courts, or professional
or environmental bodies,
or any other persons or
bodies whatsoever in any
jurisdiction
"Restricted Jurisdiction" the United States, Canada,
Japan, Australia and any
other jurisdiction where
local laws or regulations
may result in a significant
risk of civil, regulatory
or criminal exposure for
MMGG or Morson if information
or documentation concerning
the Offer is sent or made
available to Morson Shareholders
in that jurisdiction
"SPARK Advisory SPARK Advisory Partners
Partners" Limited, financial adviser
to MMGG
"Subsidiary Undertaking" has the same meaning as
in section 1162 of the
Companies Act 2006 of
England and Wales
"Subsidiary" has the same meaning as
in section 1159(1) of
the Companies Act 2006
"substantial interest" a direct or indirect interest
in 20 per cent or more
"TTE Instruction" of the equity capital
of an undertaking
a transfer to escrow instruction
(as defined by the Crest
manual issued to CrestCo
from time to time)
"third party" person, firm, company
or body
"UK" or "United the United Kingdom of
Kingdom" Great Britain and Northern
Ireland and its dependent
territories
"UK Listing Rules" means the Listing Rules
made by the FSA under
section 73A of FSMA
"United States" the United States of America,
or "US" its territories and possessions,
any state of the United
States and the District
of Columbia and all other
areas subject to its jurisdiction
"US Securities the US Securities Act
Act" 1933, and the rules and
regulations promulgated
under it
"Wider Morson Group" as the context requires,
Morson, its subsidiaries,
subsidiary undertakings,
associated undertakings
and any other body corporate,
partnership, joint venture
or person in which Morson
and/or such undertakings
(aggregating their interests)
have a direct or indirect
interest in 20 per cent.
or more of the voting
or equity capital or equivalent
"Wider MMGG Group" as the context requires,
MMGG, its subsidiaries,
subsidiary undertakings,
associated undertakings
and any other body corporate,
partnership, joint venture
or person in which MMGG
and/or such undertakings
(aggregating their interests)
have an interest of more
than 20 per cent. of the
voting or equity capital
or equivalent
In this document references to time are to London time.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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