PTCM Porta Communications Plc

TIDMPTCM

RNS Number : 8679B

Porta Communications PLC

11 June 2019

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY IN OR INTO ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION.

FOR IMMEDIATE RELEASE

The information communicated in this announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.

11 June 2019

Recommended All-share merger

of

Porta Communications plc ("Porta")

and

SEC S.p.A. ("SEC")

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

Summary

-- The Boards of SEC and Porta are pleased to announce the terms of a recommended merger of the two companies. The merger will be effected by means of a Court-sanctioned scheme of arrangement between Porta and the Scheme Shareholders under Part 26 of the Companies Act pursuant to which SEC will acquire the entire issued and to be issued ordinary share capital of Porta Communications plc (the "Merger").

   --    Under the terms of the Scheme, Scheme Shareholders will be entitled to receive: 

1 New SEC Share for every 88.4955752 Scheme Shares

-- The exchange ratio of New SEC Shares to Scheme Shares has been determined by reference to the average daily volume weighted average price over the six months to 5 April 2019 for each of the Porta Shares and the SEC Shares.

-- The Merger represents a value of approximately 0.88 pence per Scheme Share based upon the SEC Closing Price on 7 June 2019, being the latest practicable date prior to the date of this announcement, valuing Porta at approximately GBP4.46 million.

-- The number of New SEC Shares expected to be issued pursuant to the terms of the Scheme is 4,755,162.

-- The Merger is expected to result in Scheme Shareholders owning 26.04 per cent. of the share capital of the Combined Group, and following the RGL Conversion, owning 44.32 per cent. of the share capital of the Combined Group.

-- If any dividend or other distribution or return of value is proposed, declared, made, paid or becomes payable by Porta in respect of the Porta Shares on or after the date of this announcement and prior to the Scheme becoming Effective, SEC will have the right to reduce the value of the consideration payable for each Porta Share by up to the amount per Porta Share of such dividend, distribution or return of value.

Porta Recommendation

-- The Porta Independent Directors, being the Porta Directors with the exception of Fiorenzo Tagliabue, who is the Chief Executive Officer of SEC and so is precluded from participating in the deliberations of the Porta Directors concerning the Merger (the "Porta Independent Directors"), who have been advised by Grant Thornton as to the financial terms of the Merger, consider the terms of the Merger to be fair and reasonable. In providing its advice to the Porta Independent Directors, Grant Thornton has taken into account the commercial assessment of the Porta Independent Directors. Grant Thornton is providing independent financial advice to the Porta Independent Directors for the purposes of Rule 3 of the Code.

-- Accordingly, the Porta Independent Directors intend to recommend that Porta Shareholders, to the extent they are entitled to do so, vote in favour of the Scheme at the Court Meeting and the resolutions to be proposed at the Porta General Meeting.

SEC Recommendation

-- The SEC Board, which has been so advised by Arden, believes the Merger and the resolutions to be proposed at the SEC General Meeting to be in the best interests of SEC and SEC Shareholders as a whole. Arden is providing independent financial advice to the SEC Directors for the purposes of Rule 3 of the Code. Accordingly:

o the SEC Directors intend to recommend unanimously that SEC Shareholders vote in favour of the resolutions to be proposed at the SEC General Meeting to approve the Merger and related matters; and

o Fiorenzo Tagliabue and Silvia Mazzucca, his wife, have undertaken to vote in favour of the resolutions to be proposed at the SEC General Meeting to approve the Merger and related matters in respect of their own legal and beneficial holdings of SEC Shares (and those of connected persons) amounting to, in aggregate, 8,920,100 SEC Shares, representing approximately 66.06 per cent. of the existing issued share capital of SEC.

Shareholdings and Irrevocable Undertakings

-- SEC owns 85,714,286 Porta Shares, representing approximately 16.92 per cent. of the share capital of Porta in issue on 7 June 2019 (being the latest practicable date prior to the date of this announcement).

-- The Porta Independent Directors have given irrevocable undertakings to SEC in respect of their own entire legal and beneficial holdings of Porta Shares (and those of their connected persons) to vote in favour of the Scheme at the Court Meeting and the resolutions to be proposed at the Porta General Meeting, amounting to, in aggregate, 34,433,427 Porta Shares, representing approximately 6.80 per cent. of the Porta Shares in issue on 7 June 2019 (being the latest practicable date prior to the date of this announcement) and 8.18 per cent. of the Scheme Shares.

-- SEC has also received irrevocable undertakings to vote (or procure the vote) in favour of the Scheme at the Court Meeting and the resolutions to be proposed at the Porta General Meeting from certain Porta Shareholders amounting to, in aggregate, 113,242,008 Porta Shares, representing 22.36 per cent. of the Porta Shares in issue on 7 June 2019 (being the latest practicable date prior to the date of this announcement) and 26.91 per cent. of the Scheme Shares.

RGL Conversion

-- RGL and Porta entered into a convertible loan agreement on 10 April 2019 (the "Convertible Loan Agreement"). Under the terms of that agreement, RGL agreed to make available to Porta a convertible loan facility of GBP5,687,328.16 on the terms and subject to the conditions set out in the Convertible Loan Agreement.

-- RGL has now entered into an undertaking in favour of Porta pursuant to which RGL has agreed to convert GBP5,303,727.43 (the "Relevant Debt") of the capital and interest owing by Porta to RGL under the Convertible Loan Agreement into 530,372,743 new Ordinary Shares in the capital of Porta (the "Conversion Shares"). RGL has undertaken that: (i) immediately following the release of this announcement, it shall deliver a conversion notice to Porta; (ii) subject to the resolutions to be proposed at the Porta General Meeting having been approved by the requisite majorities and to the Scheme having become effective pursuant to its terms, RGL applies to Porta for the allotment to RGL of the Conversion Shares in full and final settlement of the Relevant Debt; (iii) RGL acknowledges that the Conversion Shares will be allotted to RGL subject to the terms and conditions set out in the New Articles; and (iv) RGL acknowledges that the Conversion Shares when allotted to RGL will be subject to a compulsory acquisition right to be set out in the New Articles which when exercised will result in RGL acquiring the Offeror Exchange Shares in exchange for the Conversion Shares. RGL and Porta have agreed that, subject to and on the Scheme having become effective pursuant to its terms, the Convertible Loan Agreement will be amended and restated to reflect the terms and conditions on which the remaining capital owing by Porta to RGL under the Convertible Loan Agreement following the allotment of the Conversion Shares will be lent. The remaining capital owing following the allotment of the Conversion Shares will be GBP383,600.73. The terms and conditions of the amended and restated Convertible Loan Agreement will include a repayment date of 10 April 2024 and an interest rate of 0 per cent.. RGL shall have the option under the amended and restated Convertible Loan Agreement to convert on (i) completion of any transaction, dealing, sale or disposal the effect of which is that there is a transfer of 100 per cent. of the shares in SEC or the whole or a substantial part of SEC's business or assets or (ii) otherwise on the repayment date all of the capital and/or interest owing on such date into shares in SEC, subject to the restriction that, if such conversion would result in RGL and its affiliates (or any of them) holding more than 29.99 per cent. of the capital of SEC, the number of shares in SEC that RGL is able to receive under that conversion will be limited to an amount that would ensure that RGL and its affiliates (or any of them) hold no more than 29.99 per cent. of the capital of SEC. Should that restriction apply on a conversion on the repayment date, any capital and/or interest that remains owing to RGL must be repaid in cash and such amounts will attract an interest rate of 4 per cent.

-- SEC has entered into an undertaking in favour of RGL which contains certain undertakings from RGL and SEC in respect of the sale and purchase of the Conversion Shares by RGL in exchange for the allotment of the Offeror Exchange Shares. SEC has undertaken that: (i) subject to the resolutions to be proposed at the Porta General Meeting having been approved by the requisite majorities, to the Scheme having become effective pursuant to its terms and the Conversion Shares having been allotted to RGL, SEC shall exercise, or procure the exercise of, the compulsory acquisition right to be set out in the New Articles which when exercised will result in RGL acquiring the Offeror Exchange Shares in exchange for the Conversion Shares; (ii) SEC shall convene the SEC General Meeting to seek the requisite authority required by SEC in respect of the allotment of the Offeror Exchange Shares to RGL; (iii) subject to the resolutions to be proposed at the SEC General Meeting having been approved by the requisite majorities and the Scheme having become effective pursuant to its terms, SEC shall allot the

Offeror Exchange Shares to RGL and SEC has further undertaken that; (a) the Offeror Exchange Shares shall be allotted to RGL credited as fully paid up in cash and having the rights attributed to them as set out in SEC's by-laws; (b) the Offeror Exchange Shares shall be allotted to RGL free from all encumbrances; (c) the Offeror Exchange Shares be allotted to RGL on terms that they will rank equally in all respects with the Offeror Shares in issue on the date the Scheme becomes effective; (d) SEC has undertaken to submit an application for admission to the London Stock Exchange; and (e) to pay all such fees and to supply all such information, give all such undertakings, execute all such deeds and documents and generally do all such things as may be required by the London Stock Exchange in connection with admission of the Offeror Exchange Shares to trading on AIM.

Description of Hawk Bond

-- Porta issued a GBP4,460,243 discounted capital bond in favour of Hawk on 3 August 2017 (the "Hawk Bond"). Porta and Hawk have now entered into a deed of variation relating to the Hawk Bond pursuant to which they have agreed to extend the redemption date referred to in the Hawk Bond from 14 April 2021 to 14 April 2023 and, as a consequence, to increase the nominal value of the Hawk Bond to GBP4,841,748 thereby reducing the implied interest rate from 8 per cent. to 6 per cent. per annum, in each case subject to the Scheme having become effective pursuant to its terms.

General

   --    The Scheme and Merger are conditional on, amongst other things: 

o all resolutions necessary to approve and implement the Scheme, amend the articles of Porta and approve the allotment of the Conversion Shares being duly passed by the requisite majority or majorities at the Porta General Meeting and the Court Meeting;

o the sanction of the Scheme by the Court and the Scheme becoming effective;

o the passing at the SEC General Meeting of such resolution or resolutions as are necessary to approve, implement and effect the Merger and the allotment of the New SEC Shares and the Offeror Exchange Shares;

o no Qualifying SEC Shareholder having validly exercised, in the period of 30 days following the date on which the SEC Capital Increase Resolution is filed with the Italian Companies Registrar, its right under Article 2440, para. 6, of the Italian Civil Code to request a court in the Republic of Italy to appoint an independent expert to make an expert appraisal of the value of the Scheme Shares for the purposes of the Italian Civil Code;

o no circumstances arising since the date of the Independent Expert Appraisal which, under the provisions of the Italian Civil Code relating to contributions in kind, require SEC to obtain a second expert appraisal from an independent expert (meeting the requirements of article 2343 of the Italian Civil Code) in respect of the value of the Scheme Shares and which prohibit SEC from filing the statement required by Article 2343-quater, para. 3, of the Italian Civil Code; and

o the Conditions and further terms not otherwise identified above to which the Scheme and the Merger are subject, as set out in Appendix 1 to this announcement, either being satisfied or (with the exception of certain conditions which are not capable of waiver) waived.

-- As a result of its size, the Merger constitutes a reverse takeover for SEC under the AIM Rules. Accordingly, SEC is required to seek the approval of its shareholders for the Merger at the SEC General Meeting. SEC will publish the Admission Document and make application for admission of the Combined Group to AIM.

-- The Scheme Document, which will contain further information about the Merger, the Scheme, and the notices of the Court Meeting and the Porta General Meeting, and the Forms of Proxy, will be published as soon as practicable and, in any event, within 28 days of the date of this announcement, unless SEC and Porta agree, and the Panel consents, to a later date.

-- It is intended that the Admission Document and the SEC Circular, which will contain further information about the Merger, will be published at or around the same time as the Scheme Document is made available to Porta Shareholders.

-- It is expected that the Scheme will become Effective by no later than 30 September 2019, subject to the satisfaction or waiver of the Conditions and certain further terms set out in Appendix 1 to this announcement.

-- SEC reserves the right to elect (subject to the consent of the Panel) to implement the Merger by way of a Takeover Offer at any time before the Scheme becomes Effective, or following its withdrawal, in which case additional documents will be dispatched to Porta Shareholders. In such event, the Merger will be implemented on the same terms, so far as applicable, as those which would apply to the Scheme, subject to appropriate amendments, including (without limitation and subject to the consent of the Panel) the inclusion of an acceptance condition set at 90 per cent. (or such lesser percentage (being more than 50 per cent.) as SEC may determine) of the shares to which such offer relates).

Commenting on the Merger, Fiorenzo Tagliabue, CEO of SEC, said:

"The merger of Porta and SEC will benefit both SEC and its existing global development plan, growing the business and expanding commercial reach and knowledge. The Porta business complements the existing SEC footprint and reach.

I believe this combination has a solid basis derived from nearly two and a half years of commercial partnership between SEC and Porta with the potential for further synergies. The Combined Group will be better equipped to compete globally, with an expanded commercial and technological product base to deliver added value strategic advice to our clients."

Commenting on the Merger, John Foley, Chairman of Porta, said:

"The bringing together of these two organisations will create a strategic communications group of scale that has global reach but, importantly, key local market expertise.

The combined group will create a Top 30 global firm (Holmes Report) that can offer what we believe our clients are increasingly seeking - c-suite strategic communications advice through a genuine integrated offering across research and insights, financial and corporate communications, public affairs, stakeholder engagement, public relations and digital communications."

The Merger will be subject to the Conditions and certain further terms set out in Appendix 1 to this announcement and to the full terms and conditions which will be set out in the Scheme Document. The bases of calculations and sources of certain financial information contained in this announcement, and certain additional financial and operational information, are set out in Appendix 2 to this announcement. Details of the irrevocable undertakings received by SEC and Porta in relation to the Merger are set out in Appendix 3 to this announcement. Certain definitions and terms used in this announcement are set out in Appendix 4 to this announcement.

This summary should be read in conjunction with, and is subject to, the following full text of this announcement and the Appendices.

 
 Enquiries 
 SEC S.p.A                                     +39 02.624999.1 
 Fiorenzo Tagliabue, CEO 
  www.secglobalnetwork.com 
 
 Porta Communications plc                  +44 (0)20 7680 6550 
 Rhydian Bankes, CFO 
  www.portacomms.com 
 
 Arden Partners plc                        +44 (0)20 7614 5900 
 (Financial Adviser, Nominated Adviser 
  and Broker to SEC) 
  Tom Price 
  Steve Douglas 
  Benjamin Cryer 
  Maria Gomez de Olea 
 
 Newgate Communications                   +44 (0) 20 7680 6550 
 (Media Enquiries) 
  Bob Huxford 
  Adam Lloyd 
  porta@newgatecomms.com 
 
 Grant Thornton UK LLP                      +44 (0)20 383 5100 
 (Financial Adviser and Nominated 
  Adviser to Porta) 
  Philip Secrett 
  Samantha Harrison 
  Ben Roberts 
  Seamus Fricker 
 
 N+1 Singer                                +44 (0)20 7496 3000 
 (Broker to Porta) 
  Mark Taylor 
  Lauren Kettle 
 

Disclaimers

Grant Thornton UK LLP, which, in the United Kingdom, is authorised and regulated by the Financial Conduct Authority, is acting exclusively and respectively for Porta and no one else in connection with this announcement and the matters referred to herein and will not be responsible to anyone other than Porta for providing the protections afforded to clients of Grant Thornton UK LLP nor for providing advice in relation to the contents of this announcement and the matters referred to herein. Grant Thornton UK LLP has given and not withdrawn its consent to the inclusion in this announcement of reference to its advice to the Porta Directors in the form and context in which it appears.

Arden Partners plc, which, in the United Kingdom, is authorised and regulated by the Financial Conduct Authority, is acting exclusively and respectively for SEC and no one else in connection with this announcement and the matters referred to herein and will not be responsible to anyone other than SEC for providing the protections afforded to clients of Arden Partners plc nor for providing advice in relation to the contents of this announcement and the matters referred to herein. Arden Partners plc has given and not withdrawn its consent to the inclusion in this announcement of reference to its advice to the SEC Directors in the form and context in which it appears.

IMPORTANT NOTES

Publication of certain documents in connection with the Merger

The release, publication or distribution of this announcement in jurisdictions other than the United Kingdom may be restricted by law and therefore persons into whose possession this announcement comes should inform themselves about and observe any applicable restrictions or requirements. Any failure to comply with such restrictions may constitute a violation of the securities laws of any such jurisdiction. To the fullest extent possible, the companies involved in the Merger disclaim any responsibility or liability for the violation of such requirements by any person. This announcement has been prepared for the purposes of complying with English law, the Code, the rules of the London Stock Exchange and the AIM Rules and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws and regulations of any jurisdiction outside England and Wales.

This announcement is for information purposes only. It is not intended to and does not constitute, an offer or form part of any offer or an invitation to purchase, subscribe for, sell or issue, any securities or a solicitation of any offer to purchase, subscribe for, sell or issue any securities pursuant to this announcement or otherwise in any jurisdiction in which such offer or solicitation is unlawful. This announcement does not comprise a prospectus or a prospectus equivalent document. The Merger will be effected solely by means of the Scheme Document which, together with the Forms of Proxy, will contain the full terms and conditions of the Merger, including details of how to vote in respect of the Scheme.

It is expected that the Scheme Document (including notices of the Porta Meetings), together with (in the case of Porta Shareholders who hold their shares in certificated form) the relevant Forms of Proxy, will be issued to Porta Shareholders as soon as is reasonably practicable and in any event within 28 days of this announcement, unless otherwise agreed with the Panel.

It is expected that the Admission Document and the SEC Circular will be posted to SEC Shareholders at or around the same time as the Scheme Document is made available to Porta Shareholders.

Those documents will also be made available at the same time on SEC's website at https://www.secglobal.com/investors/proposed-merger-with-porta/ and on Porta's website at www.portacomms.com. Notwithstanding the above, those documents will not be posted into, or made available within, a Restricted Jurisdiction and may not be capable of being accessed by Restricted Overseas Persons. Porta urges Porta Shareholders to read the Scheme Document, when it becomes available, in its entirety because it will contain important information in relation to the Merger. Any vote in respect of the Scheme or other response in relation to the Merger should be made only on the basis of the information contained in the Scheme Document.

SEC urges SEC Shareholders to read the Admission Document and the SEC Circular, when they become available, in their entirety because they will contain important information in relation to the Merger. Any vote by SEC Shareholders in respect of the Merger or other response in relation to the Merger should be made only on the basis of the information contained in the Admission Document and the SEC Circular.

The statements contained herein 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 forth herein since such date. Nothing contained in this announcement shall be deemed to be a forecast, projection or estimate of the future financial performance of Porta or, or of SEC or of the Combined Group, except where otherwise stated.

Overseas jurisdictions

The release, publication or distribution of this announcement in jurisdictions other than the United Kingdom may be restricted by law and therefore any persons who are subject to the laws of any jurisdiction other than the United Kingdom should inform themselves about, and observe, any applicable requirements. In particular, the ability of persons who are not resident in the United Kingdom to vote their Porta Shares in respect of the Scheme at the Porta Meetings, to execute and deliver Forms of Proxy appointing another to vote at the Porta Meetings on their behalf, may be affected by the laws of the relevant jurisdictions in which they are located. This announcement has been prepared for the purpose of complying with English law and the Code and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws of jurisdictions outside the United Kingdom.

Copies of this announcement and any formal documentation relating to the Merger are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in or into or from any Restricted Jurisdiction and persons receiving such documents (including custodians, nominees and trustees) must not mail or otherwise forward, distribute or send them in or into or from any Restricted Jurisdiction. If the Merger is implemented by way of a Takeover Offer (unless otherwise permitted by applicable law and regulation), the Takeover Offer may not be made, directly or indirectly, in or into, or by the use of mails or any means or instrumentality (including, but not limited to, facsimile, email or other electronic transmission, telex or telephone) of interstate or foreign commerce of, or of any facility of a national, state or other securities exchange of any Restricted Jurisdiction and the Takeover Offer may not be capable of acceptance by any such use, means, instrumentality or facilities.

Please be aware that addresses, electronic addresses and certain other information provided by Porta Shareholders, persons with information rights and other relevant persons for the receipt of communications from Porta may be provided to SEC during the Offer Period as required under Section 4 of Appendix 4 of the Code.

Notice to US investors

Neither the United States Securities and Exchange Commission nor any other US federal or state securities commission or regulatory authority has reviewed, approved or disapproved this Announcement or any of the proposals described in this Announcement or the New SEC Shares or passed an opinion on the accuracy or the adequacy of this Announcement. Any representation to the contrary is a criminal offence in the United States.

The Merger relates to shares of a UK company and is proposed to be effected by means of a scheme of arrangement under the laws of England and Wales. A transaction effected by means of a scheme of arrangement is not subject to the proxy solicitation or tender offer rules under the US Securities Exchange Act of 1934. Accordingly, the Scheme is subject to the disclosure requirements, rules and practices applicable in the United Kingdom to schemes of arrangement, which differ from the requirements of the US proxy solicitation and tender offer rules. However, if SEC exercises its right to implement the Merger by means of an Offer, such Offer will be made in compliance with all applicable laws and regulations, including Section 14(e) of the US Exchange Act and Regulation 14E thereunder. Such an Offer would be made in the United States by SEC and no one else. In addition to any such Offer, SEC, certain affiliated companies and the nominees or brokers (acting as agents) may make certain purchases of, or arrangements to purchase, shares in Porta outside such Offer during the period in which such Offer would remain open for acceptance. If such purchases or arrangements to purchase were to be made they would be made outside of the United States and would comply with applicable law and regulation, including the US Exchange Act. Any information about such purchases will be disclosed as required in the UK, will be reported to a Regulatory Information Service and will be available on the London Stock Exchange website www.londonstockexchange.com.

The New SEC Shares have not been, and will not be, registered under the US Securities Act or under the securities laws of any state or other jurisdiction of the United States. Accordingly, the New SEC Shares may not be offered, sold, resold, delivered, distributed or otherwise transferred, directly or indirectly, in or into or from the United States absent registration under the US Securities Act or an exemption therefrom. The New SEC Shares are expected to be issued in reliance upon the exemption from the registration requirements of the US Securities Act provided by Section 3(a)(10) thereof. Porta Shareholders who will be affiliates of SEC after the Effective Date will be subject to certain US transfer restrictions relating to the New SEC Shares received pursuant to the Scheme. For the purposes of qualifying for the exemption from the registration requirements of the US Securities Act afforded by Section 3(a)(10), Porta will advise the Court that its sanctioning of the Scheme will be relied upon by SEC as an approval of the Scheme following a hearing on its fairness to Porta Shareholders. The receipt of New SEC Shares pursuant to the Merger by a US Porta Shareholder will be a taxable transaction for US federal income tax purposes and may also be a taxable transaction under applicable state and local tax laws, as well as foreign and other tax laws. Each Porta Shareholder is urged to consult his independent professional advisor immediately regarding the tax consequences of the Merger.

It may be difficult for US Porta Shareholders to enforce their rights and claims arising out of the US federal securities laws, since SEC and Porta are located in countries other than the United States, and some or all of their officers and directors may be residents of countries other than the United States. US Porta Shareholders may not be able to sue a non-US company or its officers or directors in a non-US court for violations of the US securities laws. Further, it may be difficult to compel a non-US company and its affiliates to subject themselves to a US court's judgment.

In accordance with normal UK practice and pursuant to Rule 14e-5(b) of the US Exchange Act, SEC, certain affiliated companies and the nominees and brokers (acting as agents) may make certain purchases of, or arrangements to purchase shares in Porta outside of the US, other than pursuant to the Merger, until the date on which the Merger and/or the Scheme becomes effective, lapses or is otherwise withdrawn. If such purchases or arrangements to purchase were to be made they would occur either in the open market at prevailing prices or in private transactions at negotiated prices and comply with applicable law and regulation, including the US Exchange Act. Any information about such purchases or arrangements to purchase will be disclosed as required in the United Kingdom, will be reported to a Regulatory Information Service and will be available on the London Stock Exchange website www.londonstockexchange.com.

Notice to Hong Kong investors

WARNING

The contents of this document have not been reviewed by any regulatory authority in Hong Kong. You are advised to exercise caution in relation to the offer. If you are in any doubt about any of the contents of this document, you should obtain independent professional advice.

This document is not to be released, issued, copied, published or distributed, in whole or in part, directly or indirectly to any person in Hong Kong who is not a shareholder of Porta at the date hereof.

Notice to Australian investors

The Merger relates to the shares of a UK company and is to be made by means of a scheme of arrangement provided for under English company law. The offer of SEC Shares under the scheme of arrangement will be made in Australia in reliance on the relief from the requirements of Chapter 6D of the Corporations Act 2001 (Cth) granted by ASIC Corporations (Compromises or Arrangements) Instrument 2015/358. Accordingly, this announcement is not a prospectus or other disclosure document for the purposes of Chapter 6D of the Corporations Act 2001 (Cth) and no such prospectus or other disclosure document will be provided to Australian investors in connection with the Merger. The Merger is subject to the disclosure requirements and practices applicable in the UK to schemes of arrangement, which may differ from the requirements of Australian schemes of arrangement. However, if SEC exercises its right, in the circumstances provided for in this Announcement, to implement the Merger by way of a Takeover Offer, any offer of securities in connection with such Takeover Offer will only be made in Australia if an exemption or relief from the requirements to issue a prospectus or other disclosure document under Chapter 6D of the Corporations Act 2001 (Cth) is available.

Notice regarding financial information

The financial information included in this announcement relating to Porta has been prepared in accordance with accounting standards applicable in the United Kingdom that may not be comparable to the financial statements of US or Australian companies (or companies in any other jurisdiction). US generally accepted accounting principles ("US GAAP") and Australian generally accepted accounting principles differ in certain significant respects from each of UK GAAP and IFRS. None of the financial information in this announcement has been audited in accordance with auditing standards generally accepted in the United States or Australia, or the auditing standards of the Public Company Accounting Oversight Board (United States) or the Auditing and Assurance Standards Board (Australia).

Cautionary note regarding forward-looking statements

This announcement, including certain information incorporated by reference, contains certain forward-looking statements with respect to the financial condition, results of operations and business of Porta or the Porta Group and SEC or the SEC Group and certain plans and objectives of the Porta Board and the SEC Board. These forward-looking statements can be identified by the fact that they do not relate 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 Porta Board and the SEC Board in the light of their experience and their perception of historical trends, current conditions, expected future developments and other factors they believe appropriate. 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. Except as required by the FCA, the London Stock Exchange, the AIM Rules, the Code or any other applicable law, Porta and SEC assume no obligation to update or correct the information contained in this announcement.

No profit forecasts or estimates

No statement in this announcement is intended as a profit forecast or estimate for any period and no statement in this announcement should be interpreted to mean that earnings or earnings per ordinary share for SEC or Porta, as appropriate, for the current or future financial years would necessarily match or exceed the historical published earnings or earnings per ordinary share for SEC or Porta, as appropriate.

Disclosure requirements of the Takeover Code

Under Rule 8.3(a) of the Takeover Code, any person who is interested in one per cent. or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified.

An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of: (i) the offeree company; and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) of the Takeover Code applies must be made by no later than 3.30 p.m. (London time) on the 10th Business Day following the commencement of the offer period and, if appropriate, by no later than 3.30 p.m. (London time) on the 10th Business Day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Takeover Code, any person who is, or becomes, interested in one per cent. or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of: (i) the offeree company; and (ii) any securities exchange offeror(s), except to the extent that these details have previously been disclosed under Rule 8 of the Takeover Code. A Dealing Disclosure by a person to whom Rule 8.3(b) of the Takeover Code applies must be made by no later than 3.30 p.m. (London time) on the Business Day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3 of the Code.

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 of the Takeover Code).

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

Publication of this announcement and availability of hard copies

A copy of this announcement and the display documents required to be published pursuant to Rule 26.1 and Rule 26.2 of the Code will be available, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, on SEC's and Porta 's websites at https://www.secglobal.com/investors/proposed-merger-with-porta/ and www.portacomms.com by no later than 12 noon on 12 June 2019 until the end of the Offer Period.

Neither the content of Porta's website nor the content of any websites accessible from hyperlinks on such website (or any other websites) are incorporated into, or form part of, this announcement nor, unless previously published by means of a Regulatory Information Service, should any such content be relied upon in reaching a decision regarding the matters referred to in this announcement.

In addition, a hard copy of this announcement and any information incorporated by reference in this announcement may be requested free of charge by contacting Anna Milito or Enrico Viganò (+39 02 624999.1) or by writing to them at milito@secrp.com or vigano@secrp.com.

Porta Shareholders may also request that all future documents, announcements and information to be sent to them in relation to the Scheme should be in hard copy form.

The Scheme is subject to the provisions of the Code.

Rounding

Certain figures included in this announcement have been subject to rounding adjustments. Accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them.

Inside information and Market Abuse Regulation

Certain Porta Shareholders were, with the consent of the Panel, formally brought inside in order to discuss giving irrevocable commitments to vote in favour of the Scheme. That inside information is set out in this announcement and has been disclosed as soon as possible in accordance with paragraph 7 of article 17 of MAR. Therefore, those persons that received inside information in a market sounding are no longer in possession of inside information relating to Porta and SEC, and their respective securities.

The person responsible for arranging release of this announcement on behalf of SEC is Fiorenzo Tagliabue, CEO.

The person responsible for arranging release of this announcement on behalf of Porta is Rhydian Bankes, CFO.

Status of announcement

This announcement does not constitute a prospectus or prospectus equivalent document.

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY IN OR INTO ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION.

FOR IMMEDIATE RELEASE

The information communicated in this announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.

11 June 2019

Recommended all-share merger

of

Porta Communications plc ("Porta")

and

SEC S.p.A ("SEC")

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

   1.    Introduction 

The Boards of SEC and Porta are pleased to announce the terms of a recommended merger of the two companies. The merger will be effected by means of a Court-sanctioned scheme of arrangement of Porta under Part 26 of the Companies Act pursuant to which SEC will acquire the entire issued and to be issued ordinary share capital of Porta Communications plc (the "Merger"). The Merger is classified as a reverse takeover for SEC under the AIM Rules and will therefore require the approval of the SEC Shareholders at the SEC General Meeting.

This announcement explains the background to the Merger and the reasons why the Porta Independent Directors recommend that Scheme Shareholders vote in favour of the Scheme at the Court Meeting and that Porta Shareholders vote in favour of the resolutions to be proposed at the Porta General Meeting as they have undertaken to do in respect of their own beneficial interests in Porta Shares amounting, in aggregate, to 34,433,427 Porta Shares, representing at the date of this announcement approximately 6.80 per cent. of the existing issued share capital of Porta.

The Scheme Document, which will contain further information about the Merger, the Scheme, the notices of the Court Meeting, the Porta General Meeting, and the Forms of Proxy, will be published as soon as practicable and, in any event, within 28 days of the date of this announcement, unless both SEC and Porta agree, and the Panel consents, to a later date.

The Scheme will be subject to the Conditions set out below and in Appendix 1 to this announcement and the full terms and conditions to be set out in the Scheme Document.

   2.    Terms of the Merger 

Under the terms of the Scheme, which is subject to the Conditions set out in Appendix 1 of this announcement and to the full terms and conditions to be set out in the Scheme Document, Scheme Shareholders on the register of members of Porta at the Scheme Record Time will be entitled to receive:

1 New SEC Share for every 88.4955752 Scheme Shares

-- The exchange ratio of New SEC Shares to Scheme Shares has been determined by reference to the average daily volume weighted average price over the six months to 5 April 2019 for each of the Porta Shares and the SEC Shares.

-- The Merger represents a value of approximately 0.88 pence per Scheme Share based upon the SEC Closing Price on 7 June 2019, being the latest practicable date prior to the date of this announcement, representing:

o a premium of 95.87 per cent. to the Porta Closing Price on 7 June 2019, being the latest practicable date prior to the date of this announcement, and

o a premium of 48.65 per cent. to the 30-day volume weighted average price per Porta Share as at close of business on 7 June 2019 (being the latest practicable date prior to the date of this announcement).

The New SEC Shares will be allotted and issued credited as fully paid and will rank pari passu in all respects with the existing SEC Shares in issue at the time the New SEC Shares are allotted and issued pursuant to the Merger, including the right to receive and retain dividends and other distributions declared, made or paid by reference to a record date falling after the Effective Date.

The existing SEC Shares are admitted to trading on AIM. The Merger will constitute a reverse takeover for SEC for the purposes of the AIM Rules; accordingly, SEC is required to seek the approval of its shareholders for the Merger at the SEC General Meeting. Application will be made for the admission of the share capital of the Combined Group to trading on AIM. It is expected that Admission will become effective and that trading in the share capital of the Combined Group will commence at 8:00 a.m. on the Business Day following the Effective Date which, subject to the satisfaction of certain conditions, including the sanction of the Scheme by the Court, is expected to occur by no later than 30 September 2019.

The Scheme requires the Scheme Shareholders to vote in favour of the Scheme at the Court Meeting, the Porta Shareholders to vote in favour of the resolutions to be proposed at the Porta General Meeting and the SEC Shareholders to vote in favour of the resolutions to be proposed at the SEC General Meeting. If the Scheme becomes Effective, it will be binding on all Scheme Shareholders irrespective of whether or not they attended or voted and, if they voted, whether they voted for or against the Scheme, at the Court Meeting or the Porta General Meeting. Upon the Scheme becoming Effective, Porta will become a wholly owned subsidiary of SEC. The Scheme and Merger are conditional on, amongst other things:

-- all resolutions necessary to approve and implement the Scheme, amend the articles of Porta and approve the allotment of the Conversion Shares being duly passed by the requisite majority or majorities at the Porta General Meeting and the Court Meeting;

   --    the sanction of the Scheme by the Court and the Scheme becoming Effective; 

-- the passing at the SEC General Meeting of such resolution or resolutions as are necessary to approve, implement and effect the Merger and the allotment of the New SEC Shares and the Offeror Exchange Shares;

-- no Qualifying SEC Shareholder having validly exercised, in the period of 30 days following the date on which the SEC Capital Increase Resolution is filed with the Italian Companies Registrar, its right under Article 2440, para. 6, of the Italian Civil Code to request a court in the Republic of Italy to appoint an independent expert to make an expert appraisal of the value of the Scheme Shares for the purposes of the Italian Civil Code;

-- no circumstances arising since the date of the Independent Expert Appraisal which, under the provisions of the Italian Civil Code relating to contributions in kind, require SEC to obtain a second expert appraisal from an independent expert (meeting the requirements of article 2343 of the Italian Civil Code) in respect of the value of the Scheme Shares and which prohibit SEC from filing the statement required by Article 2343-quater, para. 3, of the Italian Civil Code; and

-- the Conditions and further terms not otherwise identified above to which the Scheme and the Merger are subject, as set out in Appendix 1 to this announcement, either being satisfied or (with the exception of certain conditions which are not capable of waiver) waived.

If any dividend or other distribution or return of value is proposed, declared, made, paid or becomes payable by Porta in respect of the Porta Shares on or after the date of this announcement and prior to the Scheme becoming Effective, SEC will have the right to reduce the value of the consideration payable for each Porta Share by up to the amount per Porta Share of such dividend, distribution or return of value.

   3.    Background to and reasons for the Merger 

Porta and SEC are AIM-quoted groups that share a similar vision and entrepreneurial approach, driving growth organically, via acquisitions and start-ups. Today Porta has 16 offices in 7 countries including a strong presence in Asia Pacific ("APAC") whilst SEC has 14 offices in 6 countries in continental Europe as well as an office in Colombia. Both organisations have won numerous awards for the impact and quality of their work.

On 3 August 2017, SEC made a GBP3 million strategic equity investment in Porta and its founder and Chief Executive Officer, Fiorenzo Tagliabue, joined the Porta Board as Non-Executive Deputy Chairman. Since then SEC and Porta have entered into the SEC Convertible Loan Agreement and SEC has provided financing to Porta in accordance with the terms of that agreement. As at 7 June 2019 (being the latest practicable date prior to the date of this announcement) SEC held a 16.92 per cent. stake in Porta and is Porta's largest individual shareholder. Since that date, the two groups have worked together and gained a good understanding of each other's vision, strategic priorities, culture and management style.

The Boards believe that the strategic communications advisory industry is rapidly evolving, shifting away from commodity offerings and seeing a growth in demand for c-suite strategic advice, an integrated offering and local expertise to assist clients where markets, politics, media and community intersect across multiple-jurisdictions. The ability to deliver to this changing market is seen as a key strength of both the Porta and SEC businesses.

It is anticipated that a combination of SEC and Porta, with the resultant portfolio of services and capabilities, will strengthen the position of the enlarged business as a more broadly-based international communications group. It is anticipated that the benefits to both Porta and SEC of the Merger will include:

Expansion of a global footprint

Porta and SEC have a complementary geographic network with very limited geographic crossover. Porta has 16 offices in 7 countries including a strong presence in APAC whilst SEC has 15 offices in 7 countries, primarily across continental Europe. Based on combined reported 2018 revenue, the merger of the two groups would create a Top 30 global strategic communications advisory firm (Holmes Report 2019).

The Merger is therefore expected to provide clients with a consistent, integrated service across a significantly enlarged, owned office network. This will give access to key European markets, and a geopolitical hub in Brussels for Porta clients, and access to the APAC region through Porta's agency offices in Greater China, Singapore and across Australia for SEC clients. The combined businesses will have greater scale and, the SEC Directors believe, greater capacity for sustainable growth to expand into remaining priority markets in North America (New York/ Washington) and for further expansion in Latin America, China and key markets in South East Asia.

Extended product offering

The combined business will have an enhanced range of products and services than each group is currently able to offer individually. For example, the Combined Group will be able to roll out Porta's internationally strong financial communications offering including its 24-hour crisis communications service and expert digital practice across the whole of the Combined Group's client base.

This is expected to support the roll-out of proprietary new market research and communications product offerings across the Combined Group's geographic footprint. In particular, SEC is currently about to launch a set of tools for use in assessing and predicting reputation management, advocacy and stakeholder management. These tools utilise artificial intelligence and machine learning technology being developed by SEC. The Boards believe that the application of such new technology based products across the Combined Group's client base will enhance the business development and commercial positioning of the Combined Group.

The Porta Independent Directors have considered the opportunities which the Merger presents for enhancing the value of the Combined Group for the benefit of both Porta Shareholders and the Porta's staff and employees. Together with the more sustainable capital structure of the Combined Group, incorporating the proposed RGL debt conversion, the Porta Independent Directors consider that the Merger is in the best interests of Porta's Shareholders and its stakeholders.

   4.    Recommendation of the Merger by the Porta Independent Directors 

The Porta Independent Directors, who have been so advised by Grant Thornton as to the financial terms of the Merger, consider the terms of the Merger to be fair and reasonable. In providing their financial advice to the Porta Independent Directors, Grant Thornton has taken into account the commercial assessments of the Porta Independent Directors. Grant Thornton is providing independent financial advice to the Porta Independent Directors for the purposes of Rule 3 of the Code.

Accordingly, the Porta Independent Directors intend to recommend unanimously that Porta Shareholders vote in favour of the Scheme at the Court Meeting and the resolutions to be proposed at the Porta General Meeting as all Porta Independent Directors holding Porta Shares have irrevocably undertaken to do so in respect of their own holdings of Porta Shares, being a total of 34,433,427 Porta Shares, (representing, in aggregate, approximately 6.80 per cent. of the ordinary share capital of Porta in issue on 7 June 2019 (being the latest practicable date prior to the date of this announcement)).

   5.    Recommendation of the Merger by the SEC Directors 

The SEC Board, having been so advised by Arden, believes that the Merger and the resolutions to be proposed at the SEC General Meeting are in the best interests of SEC and SEC Shareholders as a whole.

Accordingly, the SEC Directors intend to recommend unanimously that SEC Shareholders vote in favour of the resolutions to be proposed at the SEC General Meeting to approve the Merger and related matters, which will be described in the SEC Circular.

   6.    Irrevocable undertakings 

Irrevocable undertakings relating to the Scheme, Court Meeting and Porta General Meeting

The Porta Directors, with the exception of Fiorenzo Tagliabue, have irrevocably undertaken to vote in favour of the Scheme at the Court Meeting and the resolutions to be proposed at the Porta General Meeting in respect of their own entire legal and beneficial holdings of Porta Shares (and those of connected persons) amounting to, in aggregate, 34,433,427 Porta Shares, representing approximately 6.80 per cent. of the Porta Shares in issue on 7 June 2019 (being the latest practicable date prior to the date of this announcement) and 8.18 per cent. of the Scheme Shares.

SEC has also received irrevocable undertakings to vote (or procure the vote) in favour of the Scheme at the Court Meeting and the resolutions to be proposed at the Porta General Meeting from certain Porta Shareholders amounting to, in aggregate, 113,242,008 Porta Shares, representing 22.36 per cent. of the Porta Shares in issue on 7 June 2019 (being the latest practicable date prior to the date of this announcement) and 26.91 per cent. of the Scheme Shares.

SEC has therefore received irrevocable undertakings in respect of a total of 147,675,435 Porta Shares, representing, in aggregate approximately 29.15 per cent. of the Porta Shares in issue on 7 June 2019 (being the latest practicable date prior to the date of this announcement), to vote in favour of the Scheme at the Court Meeting and 35.09 per cent. of the Scheme Shares in issue on 7 June 2019 (being the latest practicable date prior to the date of this announcement) to vote in favour of the resolutions to be proposed at the Porta General Meeting.

Voting intentions relating to the SEC General Meeting

Fiorenzo Tagliabue and Silvia Mazzucca, his wife, have undertaken to vote in favour of the resolutions to be proposed at the SEC General Meeting to approve the Merger and related matters in respect of their own legal and beneficial holdings of SEC Shares (and those connected persons) amounting to, in aggregate, 8,920,100 SEC Shares, representing approximately 66.06 per cent. of the existing issued share capital of SEC.

   7.    Information on Porta 

Porta is the holding company of a network of communications and marketing agencies across the UK, Middle East and Asia Pacific primarily operating under the Newgate Communications brand. Its purpose is to build and protect brands and reputations, solving problems with evidence, enthusiasm, creativity and integrity. The Porta Group's strategy is to leverage its specialised and research-backed communications offering across the key practice areas of financial, corporate, public affairs, engagement and digital, to provide clients with integrated communications across its network of offices around the world. The Porta Group's teams operate within sectors where it has in-depth strategic expertise, and technical and regulatory knowledge.

2018 was a pivotal point in the transformation of the Porta Group. During the year, the business was simplified and re-structured and its companies Newgate, Redleaf and Publicasity were merged into one company - Newgate Communications Limited - operating under the brands "Newgate Communications" and "Publicasity" in order to achieve operational efficiencies and performance. These operational changes were driven to position the Porta Group to deliver both sustainable and positive results to shareholders, primarily operating under the Newgate Communications brand.

Results Overview

In its final results for the year ended 31 December 2018, which were announced on 10 April 2019, Porta reported revenue of GBP35.9 million (2017: GBP40.3 million) and Adjusted EBITDA of GBP1.9 million (2017: GBP2.8 million).

The 2018 results reflected the appointment at the end of April that year of two of Porta's most successful business operators, Emma Kane and Brian Tyson, as Joint Group Chief Executives. They implemented a detailed strategic plan focused on simplifying the business, reducing Porta's exposure to risk, whilst delivering operational efficiencies and driving improved performance.

Significant progress has been made in transforming the prospects for the Porta Group and its operational restructuring is in its final stages of completion. Achieving revenue growth is now the focus of the management, particularly in Porta's largest regions in the UK and Australia. Since the year end, the restructured UK business has performed in line with the Board's expectations. The IPO and M&A transaction work pipeline in the UK is still affected by continuing political uncertainty, although the position in Australia is now encouraging with increased workflow as a result of an uptick in economic activity there following the conclusion of recent state and federal elections. Future political events and level of economic activity in the regions in which Porta operates will affect demand for its services.

As at 31 December 2018, Porta had total borrowings of approximately GBP12.6 million (2017: GBP11.9 million). Since the year end, Porta has entered into an agreement with RGL under which GBP0.5m of accrued interest was written off. The remaining GBP5.7 million of capital and interest due to RGL was re-financed with a new facility from RGL ("Convertible Loan Agreement"). As detailed below, the Convertible Loan Agreement will be partially converted, subject to certain conditions relating to the Merger completing.

   8.    RGL Debt Conversion 

RGL and Porta entered into the Convertible Loan Agreement on 10 April 2019 under which RGL agreed to make available to Porta a convertible loan facility of GBP5,687,328.16 on the terms and subject to the conditions set out in the Convertible Loan Agreement.

RGL has now entered into an undertaking in favour of Porta pursuant to which RGL has agreed to convert GBP5,303,727.43 (the "Relevant Debt") of the capital and interest owing by Porta to RGL under the Convertible Loan Agreement into 530,372,743 new Porta Shares (the "Conversion Shares"). RGL has undertaken that: (i) immediately following the release of this announcement, it shall deliver a conversion notice to Porta; (ii) subject to the resolutions to be proposed at the Porta General Meeting having been approved by the requisite majorities and to the Scheme having become effective pursuant to its terms, RGL applies to Porta for the allotment to RGL of the Conversion Shares in full and final settlement of the Relevant Debt; (iii) RGL acknowledges that the Conversion Shares will be allotted to RGL subject to the terms and conditions set out in the New Articles; and (iv) RGL acknowledges that the Conversion Shares when allotted to RGL will be subject to a compulsory acquisition right to be set out in the New Articles which when exercised will result in RGL acquiring the Offeror Exchange Shares in exchange for the Conversion Shares. RGL and Porta have agreed that, subject to and on the Scheme having become effective pursuant to its terms, the Convertible Loan Agreement will be amended and restated to reflect the terms and conditions on which the remaining capital owing by Porta to RGL under the Convertible Loan Agreement following the allotment of the Conversion Shares will be lent. The remaining capital owing following the allotment of the Conversion Shares will be GBP383,600.73. The terms and conditions of the amended and restated Convertible Loan Agreement will include a repayment date of 10 April 2024 and an interest rate of 0 per cent. RGL shall have the option under the amended and restated Convertible Loan Agreement to convert all of the capital and/or interest owing on the repayment date into shares in SEC on that repayment date, subject to the restriction that, if such conversion would result in RGL and its affiliates (or any of them) holding more than 29.99 per cent. of the capital of SEC, the number of shares in SEC that RGL is able to receive under that conversion will be limited to an amount that would ensure that RGL and its affiliates (or any of them) hold no more than 29.99 per cent. of the capital of SEC. Should that restriction apply on a conversion, any capital and/or interest that remains owing to RGL must be repaid in cash and such amounts will attract an interest rate of 4 per cent.

SEC has entered into an undertaking in favour of RGL which contains certain undertakings from RGL and SEC in respect of the sale and purchase of the Conversion Shares by RGL in exchange for the allotment of Offeror Exchange Shares. SEC has undertaken that: (i) subject to the resolutions to be proposed at the Porta General Meeting having been approved by the requisite majorities, to the Scheme having become effective pursuant to its terms and the Conversion Shares having been allotted to RGL, SEC shall exercise, or procure the exercise of, the compulsory acquisition right to be set out in the New Articles which when exercised will result in RGL acquiring the Offeror Exchange Shares in exchange for the Conversion Shares; (ii) SEC shall convene the SEC General Meeting to seek the requisite authority required by SEC in respect of the allotment of the Offeror Exchange Shares to RGL; (iii) subject to the resolutions to be proposed at the SEC General Meeting having been approved by the requisite majorities and the Scheme having become effective pursuant to its terms, SEC shall allot the Offeror Exchange Shares to RGL and SEC has further undertaken that (a) the Offeror Exchange Shares shall be allotted to RGL credited as fully paid up in cash and having the rights attributed to them as set out in SEC's by-laws; (b) the Offeror Exchange Shares shall be allotted to RGL free from all encumbrances; (c) the Offeror Exchange Shares be allotted to RGL on terms that they will rank equally in all respects with the SEC Shares in issue on the date the Scheme becomes effective; (d) SEC has undertaken to submit an application for admission to the London Stock Exchange; and (e) to pay all such fees and to supply all such information, give all such undertakings, execute all such deeds and documents and generally do all such things as may be required by the London Stock Exchange in connection with admission of the Offeror Exchange Shares to trading on AIM.

   9.    Hawk Bond 

Porta issued a GBP4,460,243 discounted capital bond in favour of Hawk on 3 August 2017 (the "Hawk Bond"). Porta and Hawk have now entered into a deed of variation relating to the Hawk Bond pursuant to which they have agreed to extend the redemption date referred to in the Hawk Bond from 14 April 2021 to 14 April 2023 and, as a consequence, to increase the nominal value of the Hawk Bond to GBP4,841,748 thereby reducing the implied interest rate from 8 per cent. to 6 per cent. per annum, in each case subject to the Scheme having become effective pursuant to its terms.

10. Porta Share Schemes

Participants in the Porta Share Schemes will be contacted separately in due course regarding the effect of the Scheme on their rights under the Porta Share Schemes. As all the outstanding options granted under the Porta Share Schemes are substantially underwater, no further proposals will be made to such participants.

11. Cancellation of admission to trading on AIM and admission

An application will be made to the London Stock Exchange prior to the Effective Date to cancel the admission of the Porta Shares to trading on AIM with effect from shortly after the Effective Date once the Scheme has become Effective in accordance with its terms.

It is intended that dealing in Porta Shares will be suspended on AIM on or around the Effective Date.

On the Effective Date, Porta will become a wholly owned subsidiary of SEC (and consequently, the Combined Group). It is intended that admission of the share capital of the Combined Group will become effective on the Business Day following the Effective Date, being no later than 30 September 2019.

12. Future intentions for Porta, its management and employees, and the Combined Group

Porta and SEC attach great importance to the skills and experience of the existing management and employees of both businesses and believe that they will benefit from enhanced career and business opportunities within the combined business.

Assuming the Scheme becomes unconditional, SEC envisages that operations will continue from all of SEC's and Porta's sites for the next 12 months under the existing local management structure. The future development of the business, as determined by SEC in its ongoing strategy for the Combined Group, will be implemented by the management of those sites. Of necessity, the merger of two AIM quoted businesses will result in certain Board and executive management changes, as described below.

Staff Terms and Conditions

SEC confirms that, save for those changes specified to the executive management and Combined Group Board, as detailed below, it has no intention to make material changes to the conditions of employment of SEC or Porta employees and intends to safeguard fully the existing employment and pension rights of Porta local management and employees in accordance with applicable law and to comply with Porta's pension obligations for existing employees and members of Porta's pension schemes.

The SEC Board envisages revenue synergies from the Merger as set out under 'Background and reasons for the Merger' above. In addition, it believes that some cost savings will be available from an operational and administrative review of the Combined Group, which is likely to be required following the Merger. Whilst any review is subject to detailed planning and the overall impact of this is not expected to be material to the Combined Group as a whole, finalisation of any such plan would be subject to appropriate engagement with stakeholders, including employee representative bodies. The SEC board does not envisage a material number of job losses, nor does it envisage any change in the balance of the skills and functions of the employees and management.

Both SEC and Porta are cognisant that in order to incentivise management, appropriate arrangements for the Combined Group will be required. Consequently, the board of the Combined Group will review suitable structures, which may include share-based awards, and performance criteria with the view of implementing new executive and senior management arrangements within six months of the Scheme becoming effective.

Operations

Following completion of the Merger, it is intended that the Porta and SEC holding company names will cease to be used and that SEC, as holding company for the Combined Group, will change its name. The majority of Porta's agencies now operate under the "Newgate" brand and it is also proposed that this brand is retained in order to grant business continuity and connectivity with existing clients. A review will be undertaken to ascertain whether the "Newgate" brand can be further leveraged across the Combined Group.

The UK is the only region where SEC and Porta both have an operational presence. It is intended that, following completion of the Merger, the UK regional office network will be integrated, to make most efficient use of the Combined Group's leased office premises. There are no other likely repercussions of the Merger on the business locations of the Combined Group.

The Combined Group's focus will be to build the group profitably, organically, by acquisition and by funding start-ups. It is expected that the Combined Group will make further investments in Asia and also review expansion opportunities into North America (New York and Washington) and in Latin America.

On completion of the Merger, SEC intends to maintain Porta's headquarter functions in London, given its importance as a global financial centre. The corporate head office of the Combined Group will remain in Milan.

SEC does not intend to redeploy fixed assets of Porta following completion of the Merger.

Management

Following completion of the Merger, it is intended that Fiorenzo Tagliabue, the current Chief Executive Officer of SEC, will become Chief Executive Officer of the Combined Group. He will be joined as executive director on the Combined Group's Board by Emma Kane and Brian Tyson, the current Joint Chief Executive Officers of Porta, and Tom Parker and Mark Glover, SEC Chief Sales Officer and Newington's Managing Director respectively. In addition, Rhydian Bankes, the current Porta Chief Financial Officer, will become Chief Financial Officer of the Combined Group.

Following Admission, the Board of the Combined Group is expected to be composed of 11 Directors of whom four will be non-executive Directors. John Foley will join the Board of the Combined Group from Admission as a non-executive Chairman, to assist with the integration of the two businesses and to advise on the development of the Combined Group thereafter. Luigi Roth will remain on the SEC Board and serve as Deputy Chairman of the Combined Group.

The current Management Committee operating in SEC is intended to be enlarged to comprise country and regional CEOs from the Combined Group. The Board will appoint the Chairperson of the Management Committee. The Management Committee will have responsibility for business development of the Combined Group and will report to the Group CEO, Fiorenzo Tagliabue. The final make-up of this group will be detailed in the Admission Document.

SEC may review the Board of the Combined Group and the Management Committee organisation and operation during the three year period following Admission, if necessary.

Research and Development functions of Porta

Porta has no dedicated research and development function.

No statements in this paragraph 12 constitute "post-offer undertakings" for the purposes of Rule 19.5 of the Code.

13. The Scheme and the Porta Meetings

The Merger is being implemented by means of a scheme of arrangement between Porta and the Scheme Shareholders pursuant to the provisions of Part 26 of the Act. The Scheme involves the transfer of the Scheme Shares to SEC in consideration for which Porta Shareholders (save in respect of the Restricted Shares) will receive the Consideration, being 1 New SEC Share for every 88.4955752 Scheme Shares.

Upon the Scheme becoming Effective, SEC will become the owner of the whole of the issued share capital of Porta.

To become Effective, the Scheme requires, amongst other things, the approval at the Court Meeting of a majority in number representing 75 per cent. or more in value of the Scheme Shareholders present and voting, either in person or by proxy, at the Court Meeting, or at any adjournment thereof, and the passing of the resolutions to be proposed at the Porta General Meeting (or at any adjournment thereof) necessary to give effect to the Scheme , the amendment to the articles of Porta and to approve the allotment of the Conversion Shares. Following the Court Meeting and the Porta General Meeting and the satisfaction (or, where applicable, waiver) of the other Conditions, the Scheme must also be sanctioned by the Court at the Scheme Sanction Hearing. The Scheme will take effect when the Scheme Court Order has been delivered to the Registrar of Companies. If the Scheme becomes Effective, it will be binding on all Scheme Shareholders irrespective of whether they attended or voted and, if they voted, whether they voted for or against the Scheme at the Court Meeting or on any resolution to be proposed at the Porta General Meeting.

SEC reserves the right to elect (subject to the consent of the Panel) to implement the Merger by way of a Takeover Offer at any time before the Scheme becomes Effective, or following its withdrawal, in which case additional documents will be posted to Porta Shareholders. In such event, the Merger will be implemented on the same terms, so far as applicable, as those which would apply to the Scheme, subject to appropriate amendments, including (without limitation and subject to the consent of the Panel) the inclusion of an acceptance condition set at 90 per cent. (or such lesser percentage (being more than 50 per cent.) as SEC may determine) of the shares to which such offer relates).

The Scheme Document, containing further information about the Merger and notices convening the Court Meeting and the Porta General Meeting, will be posted to Porta Shareholders in due course (and, in any event, within 28 days of this announcement, unless otherwise agreed with the Panel) and the Scheme is expected to become Effective by no later than 30 September 2019, subject to the satisfaction of the Conditions and further terms set out in Appendix 1.

14. Permitted Offer-related Arrangements

On 23 April 2019, Porta and SEC entered into a confidentiality agreement in customary form in relation to the proposed transaction. The confidentiality agreement contained certain undertakings in relation to the use and non-disclosure of certain confidential information.

The confidentiality agreement also contained provisions prohibiting, subject to certain exceptions in relation to general advertising and recruitment agencies, the solicitation of employees or officers of each of Porta or SEC. These restrictions were binding for the duration of the restricted period which, in this context, is the period commencing on the date of the confidentiality agreement and ending 18 months thereafter.

The confidentiality agreement also contained certain restrictions on each of Porta and SEC in relation to the acquisition of securities in the other. These restrictions were to remain in place for the standstill period which, in this context, is the period commencing on the date of the confidentiality agreement and ending 9 months thereafter. The restrictions on the acquisition of securities set out in the confidentiality agreement cease to apply if, among other matters, during the standstill period either party announces a firm intention to make an offer to acquire the other party in accordance with Rule 2.7 of the Code which is recommended by the board of Porta.

15. Related Party Transactions

Morton PTC Limited, as the trustee of the Morton Family Trust, is the legal owner of Hawk (a substantial shareholder of the Company) and, as the trustee of the Edward Morton Family Trust, is the legal owner of RGL. Consequently, the variation to the Hawk Bond and the RGL undertaking constitute related party transactions pursuant to Rule 13 of the AIM Rules for Companies for Porta. The Porta Directors consider, having consulted with Porta's nominated adviser, that the terms of these transactions are fair and reasonable insofar as Porta's shareholders are concerned.

16. Disclosure of interests

As at the close of business on 7 June 2019, being the latest practicable date prior to the publication of this announcement SEC held 85,714,286 Porta Shares, representing 16.92 per cent. of the Porta Shares and SEC had a right to subscribe for Porta Shares in accordance with the terms and conditions of the SEC Convertible Loan Agreement. SEC confirms that no other holding of Porta Shares or right to subscribe for Porta Shares is required to be disclosed by it under Rule 8.1(a) of the Takeover Code.

As at the close of business on 7 June 2019, being the latest practicable date prior to the publication of this announcement, except as disclosed in this paragraph, neither SEC nor any of the SEC Directors nor, so far as the SEC Directors are aware, any person acting, or deemed to be acting, in concert with SEC:

   --    had an interest in, or right to subscribe for, relevant securities of Porta; 

-- had any short position in (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 of, relevant securities of Porta;

   --    had borrowed or lent any Porta Shares; or 

-- is party to any dealing arrangement of the kind referred to in Note 11 of the definition of acting in concert in the Code in relation to Porta Shares.

17. Publication of associated documents on websites

In accordance with Rule 26.2 of the Code, copies of the following documents will by no later than 12 noon (London time) on 12 June 2019 be published on Porta's website (www.portacomms.com) and SEC's website (https://www.secglobal.com/investors/proposed-merger-with-porta/) until the end of the Offer Period:

   --    a copy of this announcement; 
   --    the confidentiality agreement referred to in paragraph 14 above; 
   --    the undertaking in respect of the RGL Debt Conversion; 
   --    the Conversion Shares Undertaking; and 
   --    the irrevocable undertakings referred to above at paragraph 6 and in Appendix 3. 
 
 Enquiries 
 SEC S.p.A                                     +39 02.624999.1 
 Fiorenzo Tagliabue, CEO 
  www.secglobalnetwork.com 
 
 Porta Communications plc                  +44 (0)20 7680 6550 
 Rhydian Bankes, CFO 
  www.portacomms.com 
 
 Arden Partners plc                        +44 (0)20 7614 5900 
 (Financial Adviser, Nominated Adviser 
  and Broker to SEC) 
  Tom Price 
  Steve Douglas 
  Benjamin Cryer 
  Maria Gomez de Olea 
 
 Newgate Communications 
  (Media Enquiries) 
  Bob Huxford 
  Adam Lloyd 
  porta@newgatecomms.com                  +44 (0) 20 7680 6550 
 
 Grant Thornton UK LLP                     +44 (0) 20 383 5100 
 (Financial Adviser and Nominated 
  Adviser to Porta) 
  Philip Secrett 
  Samantha Harrison 
  Ben Roberts 
  Seamus Fricker 
 
 N+1 Singer                                +44 (0)20 7496 3000 
 (Broker to Porta) 
  Mark Taylor 
  Lauren Kettle 
 

Disclaimers

Grant Thornton UK LLP, which, in the United Kingdom, is authorised and regulated by the Financial Conduct Authority, is acting exclusively and respectively for Porta and no one else in connection with this announcement and the matters referred to herein and will not be responsible to anyone other than Porta for providing the protections afforded to clients of Grant Thornton UK LLP nor for providing advice in relation to the contents of this announcement and the matters referred to herein. Grant Thornton UK LLP has given and not withdrawn its consent to the inclusion in this announcement of reference to its advice to the Porta Directors in the form and context in which it appears.

Arden Partners plc, which, in the United Kingdom, is authorised and regulated by the Financial Conduct Authority, is acting exclusively and respectively for SEC and no one else in connection with this announcement and the matters referred to herein and will not be responsible to anyone other than SEC for providing the protections afforded to clients of Arden Partners plc nor for providing advice in relation to the contents of this announcement and the matters referred to herein. Arden Partners plc has given and not withdrawn its consent to the inclusion in this announcement of reference to its advice to the SEC Directors in the form and context in which it appears.

IMPORTANT NOTES

Publication of certain documents in connection with the Merger

The release, publication or distribution of this announcement in jurisdictions other than the United Kingdom may be restricted by law and therefore persons into whose possession this announcement comes should inform themselves about and observe any applicable restrictions or requirements. Any failure to comply with such restrictions may constitute a violation of the securities laws of any such jurisdiction. To the fullest extent possible, the companies involved in the Merger disclaim any responsibility or liability for the violation of such requirements by any person. This announcement has been prepared for the purposes of complying with English law, the Code, the rules of the London Stock Exchange and the AIM Rules and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws and regulations of any jurisdiction outside England and Wales or the laws, rules and regulations applicable to securities listed on any other securities exchange.

This announcement is for information purposes only. It is not intended to and does not constitute, an offer or form part of any offer or an invitation to purchase, subscribe for, sell or issue, any securities or a solicitation of any offer to purchase, subscribe for, sell or issue any securities pursuant to this announcement or otherwise in any jurisdiction in which such offer or solicitation is unlawful. This announcement does not comprise a prospectus or a prospectus equivalent document. The Merger will be effected solely by means of the Scheme Document which, together with the Forms of Proxy, will contain the full terms and conditions of the Merger, including details of how to vote in respect of the Scheme.

It is expected that the formal Scheme Document (including notices of the Porta Meetings), together with (in the case of Porta Shareholders who hold their shares in certificated form) the relevant Forms of Proxy, will be posted to Porta Shareholders as soon as is reasonably practicable and in any event within 28 days of this announcement, unless otherwise agreed with the Panel.

It is expected that the Admission Document and the SEC Circular will be posted to SEC Shareholders as soon as is reasonably practicable following publication of the Scheme Document.

Those documents will also be made available at the same time on SEC's website at https://www.secglobal.com/investors/proposed-merger-with-porta/ and on Porta's website at www.portacomms.com. Notwithstanding the above, those documents will not be posted into, or made available within, a Restricted Jurisdiction and may not be capable of being accessed by Restricted Overseas Persons. Porta urges Porta Shareholders to read the Scheme Document, when it becomes available, in its entirety because it will contain important information in relation to the Merger. Any vote in respect of the Scheme or other response in relation to the Merger should be made only on the basis of the information contained in the Scheme Document.

SEC urges SEC Shareholders to read the Admission Document and the SEC Circular, when it becomes available, in its entirety because it will contain important information in relation to the Merger. Any vote by SEC Shareholders in respect of the Merger or other response in relation to the Merger should be made only on the basis of the information contained in the Admission Document and the Scheme Document.

The statements contained herein 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 forth herein since such date. Nothing contained in this announcement shall be deemed to be a forecast, projection or estimate of the future financial performance of Porta or, or of SEC or of the Combined Group, except where otherwise stated.

Overseas jurisdictions

The release, publication or distribution of this announcement in jurisdictions other than the United Kingdom may be restricted by law and therefore any persons who are subject to the laws of any jurisdiction other than the United Kingdom should inform themselves about, and observe, any applicable requirements. In particular, the ability of persons who are not resident in the United Kingdom to vote their Porta Shares in respect of the Scheme at the Porta Meetings, to execute and deliver Forms of Proxy appointing another to vote at the Porta Meetings on their behalf, may be affected by the laws of the relevant jurisdictions in which they are located. This announcement has been prepared for the purpose of complying with English law and the Code and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws of jurisdictions outside England and Wales or the laws, rules and regulations applicable to securities listed on any other securities exchange.

Copies of this announcement and any formal documentation relating to the Merger are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in or into or from any Restricted Jurisdiction and persons receiving such documents (including custodians, nominees and trustees) must not mail or otherwise forward, distribute or send them in or into or from any Restricted Jurisdiction. If the Merger is implemented by way of a Takeover Offer (unless otherwise permitted by applicable law and regulation), the Takeover Offer may not be made, directly or indirectly, in or into, or by the use of mails or any means or instrumentality (including, but not limited to, facsimile, email or other electronic transmission, telex or telephone) of interstate or foreign commerce of, or of any facility of a national, state or other securities exchange of any Restricted Jurisdiction and the Takeover Offer may not be capable of acceptance by any such use, means, instrumentality or facilities.

Please be aware that addresses, electronic addresses and certain other information provided by Porta Shareholders, persons with information rights and other relevant persons for the receipt of communications from Porta may be provided to SEC during the Offer Period as required under Section 4 of Appendix 4 of the Code.

Notice to US investors

Neither the United States Securities and Exchange Commission nor any other US federal or state securities commission or regulatory authority has reviewed, approved or disapproved this Announcement or any of the proposals described in this Announcement or the New SEC Shares or passed an opinion on the accuracy or the adequacy of this Announcement. Any representation to the contrary is a criminal offence in the United States.

The Merger relates to shares of a UK company and is proposed to be effected by means of a scheme of arrangement under the laws of England and Wales. A transaction effected by means of a scheme of arrangement is not subject to the proxy solicitation or tender offer rules under the US Securities Exchange Act of 1934. Accordingly, the Scheme is subject to the disclosure requirements, rules and practices applicable in the United Kingdom to schemes of arrangement, which differ from the requirements of the US proxy solicitation and tender offer rules. However, if SEC exercises its right to implement the Merger by means of an Offer, such Offer will be made in compliance with all applicable laws and regulations, including Section 14(e) of the US Exchange Act and Regulation 14E thereunder. Such an Offer would be made in the United States by SEC and no one else. In addition to any such Offer, SEC, certain affiliated companies and the nominees or brokers (acting as agents) may make certain purchases of, or arrangements to purchase, shares in Porta outside such Offer during the period in which such Offer would remain open for acceptance. If such purchases or arrangements to purchase were to be made they would be made outside of the United States and would comply with applicable law and regulation, including the US Exchange Act. Any information about such purchases will be disclosed as required in the UK, will be reported to a Regulatory Information Service and will be available on the London Stock Exchange website www.londonstockexchange.com.

The New SEC Shares have not been, and will not be, registered under the US Securities Act or under the securities laws of any state or other jurisdiction of the United States. Accordingly, the New SEC Shares may not be offered, sold, resold, delivered, distributed or otherwise transferred, directly or indirectly, in or into or from the United States absent registration under the US Securities Act or an exemption therefrom. The New SEC Shares are expected to be issued in reliance upon the exemption from the registration requirements of the US Securities Act provided by Section 3(a)(10) thereof. Porta Shareholders who will be affiliates of SEC after the Effective Date will be subject to certain US transfer restrictions relating to the New SEC Shares received pursuant to the Scheme. For the purposes of qualifying for the exemption from the registration requirements of the US Securities Act afforded by Section 3(a)(10), Porta will advise the Court that its sanctioning of the Scheme will be relied upon by SEC as an approval of the Scheme following a hearing on its fairness to Porta Shareholders. The receipt of New SEC Shares pursuant to the Merger by a US Porta Shareholder will be a taxable transaction for US federal income tax purposes, and may also be a taxable transaction under applicable state and local tax laws, as well as foreign and other tax laws. Each Porta Shareholder is urged to consult his independent professional advisor immediately regarding the tax consequences of the Merger.

It may be difficult for US Porta Shareholders to enforce their rights and claims arising out of the US federal securities laws, since SEC and Porta are located in countries other than the United States, and some or all of their officers and directors may be residents of countries other than the United States. US Porta Shareholders may not be able to sue a non-US company or its officers or directors in a non-US court for violations of the US securities laws. Further, it may be difficult to compel a non-US company and its affiliates to subject themselves to a US court's judgment.

In accordance with normal UK practice and pursuant to Rule 14e-5(b) of the US Exchange Act, SEC, certain affiliated companies and the nominees and brokers (acting as agents) may make certain purchases of, or arrangements to purchase shares in Porta outside of the US, other than pursuant to the Merger, until the date on which the Merger and/or the Scheme becomes effective, lapses or is otherwise withdrawn. If such purchases or arrangements to purchase were to be made they would occur either in the open market at prevailing prices or in private transactions at negotiated prices and comply with applicable law and regulation, including the US Exchange Act. Any information about such purchases or arrangements to purchase will be disclosed as required in the United Kingdom, will be reported to a Regulatory Information Service and will be available on the London Stock Exchange website www.londonstockexchange.com.

Notice to Hong Kong investors

WARNING

The contents of this document have not been reviewed by any regulatory authority in Hong Kong. You are advised to exercise caution in relation to the offer. If you are in any doubt about any of the contents of this document, you should obtain independent professional advice.

This document is not to be released, issued, copied, published or distributed, in whole or in part, directly or indirectly to any person in Hong Kong who is not a shareholder of Porta at the date hereof.

Notice to Australian investors

The Merger relates to the shares of a UK company and is to be made by means of a scheme of arrangement provided for under English company law. The offer of SEC Shares under the scheme of arrangement will be made in Australia in reliance on the relief from the requirements of Chapter 6D of the Corporations Act 2001 (Cth) granted by ASIC Corporations (Compromises or Arrangements) Instrument 2015/358. Accordingly, this announcement is not a prospectus or other disclosure document for the purposes of Chapter 6D of the Corporations Act 2001 (Cth) and no such prospectus or other disclosure document will be provided to Australian investors in connection with the Merger. The Merger is subject to the disclosure requirements and practices applicable in the UK to schemes of arrangement, which may differ from the requirements of Australian schemes of arrangement. However, if SEC exercises its right, in the circumstances provided for in this Announcement, to implement the Merger by way of a Takeover Offer, any offer of securities in connection with such Takeover Offer will only be made in Australia if an exemption or relief from the requirements to issue a prospectus or other disclosure document under Chapter 6D of the Corporations Act 2001 (Cth) is available.

Notice regarding financial information

The financial information included in this announcement relating to Porta has been prepared in accordance with accounting standards applicable in the United Kingdom that may not be comparable to the financial statements of US or Australian companies (or companies in any other jurisdiction). US generally accepted accounting principles ("US GAAP") and Australian generally accepted accounting principles differ in certain significant respects from each of UK GAAP and IFRS. None of the financial information in this announcement has been audited in accordance with auditing standards generally accepted in the United States or Australia, or the auditing standards of the Public Company Accounting Oversight Board (United States) or the Auditing and Assurance Standards Board (Australia).

Cautionary note regarding forward-looking statements

This announcement, including certain information incorporated by reference, contains certain forward-looking statements with respect to the financial condition, results of operations and business of Porta or the Porta Group and SEC or the SEC Group and certain plans and objectives of the Porta Board and the SEC Board. These forward-looking statements can be identified by the fact that they do not relate 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 Porta Board and the SEC Board in the light of their experience and their perception of historical trends, current conditions, expected future developments and other factors they believe appropriate. 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. Except as required by the FCA, the London Stock Exchange, the AIM Rules, the Code or any other applicable law, Porta and SEC assume no obligation to update or correct the information contained in this announcement.

No profit forecasts or estimates

No statement in this announcement is intended as a profit forecast or estimate for any period and no statement in this announcement should be interpreted to mean that earnings or earnings per ordinary share for SEC or Porta, as appropriate, for the current or future financial years would necessarily match or exceed the historical published earnings or earnings per ordinary share for SEC or Porta, as appropriate.

Disclosure requirements of the Takeover Code

Under Rule 8.3(a) of the Takeover Code, any person who is interested in one per cent. or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified.

An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of: (i) the offeree company; and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) of the Takeover Code applies must be made by no later than 3.30 p.m. (London time) on the 10th Business Day following the commencement of the offer period and, if appropriate, by no later than 3.30 p.m. (London time) on the 10th Business Day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Takeover Code, any person who is, or becomes, interested in one per cent. or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of: (i) the offeree company; and (ii) any securities exchange offeror(s), except to the extent that these details have previously been disclosed under Rule 8 of the Takeover Code. A Dealing Disclosure by a person to whom Rule 8.3(b) of the Takeover Code applies must be made by no later than 3.30 p.m. (London time) on the Business Day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3 of the Code.

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 of the Takeover Code).

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

Publication of this announcement and availability of hard copies

A copy of this announcement and the display documents required to be published pursuant to Rule 26.1 and Rule 26.2 of the Code will be available, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, on SEC's and Porta's websites at https://www.secglobal.com/investors/proposed-merger-with-porta/and www.portacomms.com by no later than 12 noon on 12 June 2019 until the end of the Offer Period.

Neither the content of Porta's website nor the content of any websites accessible from hyperlinks on such website (or any other websites) are incorporated into, or form part of, this announcement nor, unless previously published by means of a Regulatory Information Service, should any such content be relied upon in reaching a decision regarding the matters referred to in this announcement.

In addition, a hard copy of this announcement and any information incorporated by reference in this announcement may be requested free of charge by contacting Anna Milito or Enrico Viganò (+39 02 624999.1) or by writing to them at milito@secrp.com or vigano@secrp.com.

Porta Shareholders may also request that all future documents, announcements and information to be sent to them in relation to the Scheme should be in hard copy form.

The Scheme is subject to the provisions of the Code.

Rounding

Certain figures included in this announcement have been subject to rounding adjustments. Accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them.

Inside information and Market Abuse Regulation

Certain Porta Shareholders were, with the consent of the Panel, formally brought inside in order to discuss giving irrevocable commitments to vote in favour of the Scheme. That inside information is set out in this announcement and has been disclosed as soon as possible in accordance with paragraph 7 of article 17 of MAR. Therefore, those persons that received inside information in a market sounding are no longer in possession of inside information relating to Porta and SEC, and their respective securities.

The person responsible for arranging release of this announcement on behalf of SEC is Fiorenzo Tagliabue.

The person responsible for arranging release of this announcement on behalf of Porta is Rhydian Bankes, CFO.

Status of announcement

This announcement does not constitute a prospectus or prospectus equivalent document.

APPIX 1

CONDITIONS TO THE IMPLEMENTATION, AND CERTAIN FURTHER TERMS, OF THE SCHEME AND THE MERGER

Part A: Conditions to the Scheme

1) The Merger will be conditional upon the Scheme becoming unconditional and becoming Effective, subject to the Takeover Code, by no later than 30 September 2019, or such later date (if any) as SEC and Porta may agree and (if required) the Court and the Panel may allow.

   2)    The Scheme is conditional upon satisfaction of the following Conditions: 

a. its approval by a majority in number representing 75 per cent. or more in value of the Scheme Shareholders present and voting, either in person or by proxy, at the Court Meeting and at any separate class meeting which may be required by the Court or at any adjournment of any such meeting;

b. all resolutions necessary to approve and implement the Scheme, amend the articles of Porta and approve the allotment of the Conversion Shares being duly passed by the requisite majority or majorities at the Porta General Meeting;

c. the sanction of the Scheme with or without modification (but subject to any such modification being acceptable to SEC and Porta and approved by the Court); and

d. the delivery of a certified copy of the Scheme Court Order to the Registrar of Companies, within seven days of the making of such Order.

Part B: Conditions to the Merger

3) Subject to Part C below, the Merger is also conditional upon the following Conditions, and accordingly, the necessary actions to make the Scheme effective shall not be taken unless the following Conditions have been satisfied or (where applicable) waived:

a. the passing at the SEC General Meeting of such resolution or resolutions as are necessary to approve, implement and effect the Merger including a resolution or resolutions to approve the Merger and to authorise the creation and allotment of the New SEC Shares and the Offeror Exchange Shares;

b. the London Stock Exchange having acknowledged to SEC or its agent (and such acknowledgement not having been withdrawn) that the share capital of the Combined Group will be readmitted to trading on AIM and the New SEC Shares will be admitted to trading on AIM;

c. no Qualifying SEC Shareholder having validly exercised, in the period of 30 days following the date on which the SEC Capital Increase Resolution is filed with the Italian Companies Registrar, its right under Article 2440, para. 6, of the Italian Civil Code to request a court in the Republic of Italy to appoint an independent expert to make an expert appraisal of the value of the Scheme Shares for the purposes of the Italian Civil Code;

d. no circumstances arising since the date of the Independent Expert Appraisal which, under the provisions of the Italian Civil Code relating to contributions in kind, require SEC to obtain a second expert appraisal from an independent expert (meeting the requirements of article 2343 of the Italian Civil Code) in respect of the value of the Scheme Shares and which prohibit SEC from filing the statement required by Article 2343-quater, para. 3, of the Italian Civil Code;

e. no government or governmental, quasi-governmental, supranational, statutory, administrative or regulatory body, authority, court, trade agency, professional body, association, institution, environmental body or other body or person whatsoever in any jurisdiction (each a "Relevant Authority") having decided to take, institute, implement or threaten, and there not continuing to be outstanding, any action, proceedings, suit, investigation, enquiry or reference, or made, proposed or enacted any statute, regulation, order or decision, or taken any other steps, that would or might (in a manner or to an extent which is material in the context of the SEC Group or the Porta Group as the case may be):

i) make the Scheme or the acquisition or the proposed acquisition of any Porta Shares or other securities in, or control or management of, Porta or any other member of the Porta Group or the carrying on by any member of the Porta Group of its business void, unenforceable or illegal or directly or indirectly restrict, prohibit, delay or otherwise interfere with the implementation of, or impose additional conditions or obligations with respect to, or otherwise challenge, the Scheme or the acquisition or the proposed acquisition of any Porta Shares or other securities in, or control or management of, Porta or any other member of the Porta Group or the carrying on by any member of the Porta Group of its business;

   ii)    require, prevent or delay a divestiture by any member of the SEC Group of any Porta Shares; 

iii) require, prevent or delay the divestiture or alter the terms of any proposed divestiture by any member of the SEC Group or by any member of the Porta Group of all or any part of their respective businesses, assets or property or impose any limitation on the ability of any of them to conduct all or any portion of their respective businesses or to own all or any portion of their respective assets or property;

iv) impose any limitation on or result in a delay in the ability of any member of the SEC Group or of any member of the Porta Group to acquire or hold or to exercise effectively, directly or indirectly, all or any rights of ownership in respect of shares or loans or securities convertible into shares or the equivalent in the SEC Group or of any member of the Porta Group respectively or to exercise management control over any such member;

v) require any member of the SEC Group or any member of the Porta Group to offer to acquire directly or indirectly any shares or other securities in any member of the Porta Group owned by any third party;

vi) affect adversely the assets, business, profits, financial or trading position or prospects of any member of the SEC Group or any member of the Porta Group to an extent which is material in the context respectively of the Porta Group or the SEC Group;

vii) result in any member of the Porta Group or any member of the SEC Group ceasing to be able to carry on business under any name under which it presently carries on business;

viii) otherwise, directly or indirectly, materially prevent or prohibit, restrict, restrain or delay or otherwise to a material extent interfere with the implementation of, or impose material additional conditions or obligations with respect to, or otherwise materially challenge, impede, interfere or require material amendment of, the Scheme or the acquisition or proposed acquisition of any shares or other securities in, or control or management of, Porta or any member of the Porta Group; or

ix) impose any material limitation on the ability of any member of the SEC Group or of any member of the Porta Group to conduct, integrate or co-ordinate all or any part of its business with all or any part of the business of any other member of the SEC Group and/or the Porta Group to an extent which is material in the context respectively of the Porta Group or the SEC Group;

and all applicable waiting and other time periods during which any such Relevant Authority could decide to take, implement, threaten or institute any such action, proceedings, suit, investigation, enquiry or reference under the laws of any jurisdiction having expired, lapsed or been terminated;

f. all material mandatory filings, notifications or applications having been made, all applicable waiting periods (including any extensions thereof) under any applicable legislation or regulations of any jurisdiction having expired, lapsed or been terminated and all statutory or regulatory obligations in any relevant jurisdiction having been complied with or obtained, in each case in respect of the Scheme or the acquisition or the proposed acquisition of any Porta Shares or other securities in, or control or management of, Porta or any other member of the Porta Group or the carrying on by any member of the Porta Group of its business;

g. all authorisations, orders, grants, recognitions, confirmations, consents, clearances, licences, permissions, exemptions and approvals ("Authorisations") necessary or appropriate or required for or in respect of the Scheme or the acquisition or the proposed acquisition of any Porta Shares or other securities in, or control or management of, Porta or any other member of the Porta Group or to carry on the business of any member of the Porta Group or SEC having been obtained, in terms and in a form reasonably satisfactory to SEC, from all appropriate Relevant Authorities and from any persons or bodies with whom any member of the Porta Group or SEC has entered into contractual arrangements and all such Authorisations remaining in full force and effect and there being no notice or intimation of any intention to revoke, suspend, restrict, modify or not to renew any of the same and all necessary statutory or regulatory obligations in any jurisdiction having been complied with;

h. save as Disclosed to SEC, there being no provision of any agreement, arrangement, licence, permit or other instrument to which any member of the Porta Group is a party or by or to which any such member or any of its assets is or are or may be bound, entitled or subject and which, in consequence of the Scheme or the Offer or the acquisition or proposed acquisition of any Porta Shares or other securities in, or control or management of, Porta or any other member of the Porta Group, or the issuance or proposed issuance of New SEC Shares to Scheme Shareholders, or otherwise, could or might result in, or might reasonably be expected to result in:

i) any monies borrowed by, or any other indebtedness (actual or contingent) of any such member of the Porta Group, which is material in the context of the Porta Group, being or becoming repayable or capable of being declared repayable immediately or earlier than the repayment date stated in such agreement, arrangement, licence, permit or other instrument, or the ability of any such member to borrow monies or incur any indebtedness being withdrawn or inhibited or becoming capable of being withdrawn or inhibited;

ii) the interests or business of any member of the Porta Group in or with any other person, firm, company or body (or any arrangements relating to such interests or business) being terminated, modified or adversely affected, which is material in the context of the Porta Group;

iii) any material assets of any member of the Porta Group being or falling to be disposed of or charged in any manner howsoever or any right arising under which any such asset or interest could be required to be disposed of or charged in any manner howsoever;

iv) the creation or enforcement of any mortgage, charge or other security interest over the whole or any part of the business, property, assets or interests of any member of the Porta Group or any such mortgage, charge or other security interest (whenever created, arising or having arisen) becoming enforceable;

v) any such agreement, arrangement, licence, permit or other instrument, or the rights, liabilities, obligations or interests of any member of the Porta Group thereunder, being, or becoming capable of being, terminated or adversely modified or adversely affected or any obligation or liability arising or any adverse action being taken or arising thereunder, which is material in the context of the Porta Group;

vi) any liability of any member of the Porta Group to make any severance, termination, bonus or other payment to any of its directors or other officers, which is material in the context of the Porta Group;

vii) the rights, liabilities, obligations, interests or business of any member of the Porta Group under any such arrangement, agreement, licence, permit, lease or instrument or the interests or business of any member of the Porta Group in or with any other person or body or firm or company (or any arrangement or arrangement relating to any such interests or business) being or becoming capable of being terminated, or adversely modified or affected in a manner that is materially adverse to the Porta Group as a whole;

viii) any member of the Porta Group ceasing to be able to carry on business under any name under which it presently carries on business;

ix) the value of, or the financial or trading position or prospects of, any member of the Porta Group being prejudiced or adversely affected, which is material in the context of the Porta Group; or

x) the creation or acceleration of any liability (actual or contingent) by any member of the Porta Group other than trade creditors or other liabilities incurred in the ordinary course of business;

and no event having occurred which, under any provision of any such agreement, arrangement, licence, permit or other instrument to which any member of the Porta Group is a party or by or to which any such member or any of its assets are bound, entitled or subject, would or might reasonably be expected to result in any of the events or circumstances as are referred to in Conditions 3(h)(i) to (x);

   i.      no member of the Porta Group having since 31 December 2018, save as Disclosed to SEC: 

i) issued or agreed to issue, or authorised or proposed or announced its intention to authorise or propose the issue of, additional shares of any class, or securities or securities convertible into, or exchangeable for, or rights, warrants or options to subscribe for or acquire, any such shares, securities or convertible securities or transferred or sold, or agreed to transfer or sell or authorised or proposed the transfer or sale of, Porta Shares out of treasury;

ii) recommended, declared, paid or made or proposed to declare, pay or make any bonus issue, dividend or other distribution in respect of the share capital of Porta;

iii) merged with any body corporate or implemented, effected, authorised, proposed or announced any intention to implement, effect, authorise or propose any merger, demerger, reconstruction, amalgamation, partnership, joint venture, scheme, commitment, acquisition, disposal, transfer, mortgage or charge of or granting of any security over assets or shares or loan capital (or the equivalent thereof) in any undertaking or undertakings;

iv) purchased or redeemed or repaid any of its own shares or other securities or reduced or made any other change to any part of its share capital;

v) issued, authorised or proposed or announced an intention to authorise or propose the issue of any debentures or made any change in or to the terms of any debentures or incurred or increased any indebtedness or become subject to any contingent liability which is material in the context of the Porta Group taken as a whole or in the context of the Merger;

vi) entered into, varied or authorised any contract, arrangement, agreement, transaction or commitment (whether in respect of capital expenditure or otherwise) which is of a long term, unusual or onerous nature or magnitude or which is or could reasonably be expected to be materially restrictive or onerous on the business of any member of the Porta Group and which is material in the context of the Porta Group taken as a whole or in the context of the Merger;

vii) entered into or varied the terms of, or made any offer (which remains open for acceptance) to enter into or vary the terms of any contract, service agreement, commitment or arrangement with any director or senior executive of any member of the Porta Group;

viii) proposed, agreed to provide or modified the terms of any share option scheme, incentive scheme or other benefit (including in relation to any personal defined contribution or defined benefit pension scheme) relating to the employment or termination of employment of any employee of the Porta Group;

ix) been unable, or admitted in writing that it is unable, to pay its debts or commenced negotiations with one or more of its creditors with a view to rescheduling or restructuring any of its indebtedness, 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;

x) taken or proposed any steps, corporate action or had any legal proceedings instituted or threatened against it in relation to the suspension of payments, a moratorium of any indebtedness, its winding-up (voluntary or otherwise), dissolution, reorganisation or for the appointment of a receiver, administrator, manager, administrative receiver, trustee or similar officer of all or any material part of its assets or revenues or any analogous or equivalent steps or proceedings in any jurisdiction or appointed any analogous person in any jurisdiction or had any such person appointed;

xi) (other than in connection with the Scheme) made any alteration to its memorandum or articles of association;

xii) waived or compromised or settled any claim in respect of the Porta Group which is material in the context of the Porta Group taken as a whole or in the context of the Merger; or

xiii) entered into any contract, commitment or agreement to, or passed any resolution with respect to, or announced any intention to, or to propose to, effect any of the transactions or events referred to in this paragraph;

   j.     since 31 December 2018, and save as Disclosed to SEC: 

i) no adverse change and no circumstance having arisen which would or might reasonably be expected to result in any adverse change in the business, assets, financial or trading position or profits or prospects or operational performance of any member of the Porta Group which in any such case is, or might reasonably be expected to be, material in the context of the Porta Group taken as a whole or in the context of the Merger;

ii) no litigation, arbitration proceedings, prosecution or other legal proceedings to which any member of the Porta Group is or may become a party (whether as plaintiff, defendant or otherwise) having been threatened, announced or instituted or remaining outstanding in respect of any member of the Porta Group and which in any such case is likely to adversely affect any member of the Porta Group to an extent which is, or might reasonably be expected to be, material in the context of the Porta Group taken as a whole or in the context of the Merger;

iii) no enquiry or investigation by, or complaint or reference to, any Relevant Authority having been threatened, announced, implemented or instituted by or against or remaining outstanding against or in respect of any member of the Porta Group which is, or which might reasonably be expected to be, material in the context of the Porta Group taken as a whole or in the context of the Merger; or

iv) no contingent or other liability having arisen or been incurred or become apparent or increased which is, or might reasonably be expected to be, material in the context of the Porta Group taken as a whole or in the context of the Merger;

   k.    save as Disclosed to SEC, SEC not having discovered: 

i) that any financial or business or other information concerning the Porta Group disclosed at any time, whether publicly or otherwise, by or on behalf of any member of the Porta Group, to SEC or its advisers is misleading or contains a material misrepresentation of fact or omits to state a fact necessary to make the information contained therein not misleading which is, or might reasonably be expected to be, material in the context of the Porta Group taken as a whole or in the context of the Merger;

ii) that any partnership, company or other entity in which any member of the Porta Group has an interest and which is not a subsidiary undertaking of Porta is subject to any liability, contingent or otherwise, which is or might reasonably be expected to material in the context of the Porta Group taken as a whole or in the context of the Merger; or

iii) any information which affects the import of any information disclosed at any time by or on behalf of any member of the Porta Group to an extent which is material in the context of the Porta Group taken as a whole or in the context of the Merger;

iv) any past or present member of the Porta Group has not complied with all applicable legislation or regulations of any jurisdiction or any notice or requirement of any Relevant Authority or all contractual provisions relating in each case to the protection of the environment or planning or health and safety including those relating to the storage, carriage, disposal, discharge, spillage or leak of waste or disposal or emission of any hazardous substance or any substance likely to impair the environment or harm human health which noncompliance would be likely to give rise to any liability (whether actual or contingent) on the part of any member of the Porta Group or SEC Group which is, or might reasonably be expected to be, material in the context of the Porta Group taken as a whole or in the context of the Merger or SEC Group (as appropriate) in the context of the Merger;

v) there has been a disposal, discharge, spillage or leak of waste or disposal or emission of any hazardous substance or any substance likely to impair the environment or harm human health on, or from, any land, or other asset, owned, occupied, managed or made use of at any time by any past or present member of the Porta Group, or in which any such member may now or previously have had an interest, which would be likely to give rise to any liability (whether actual or contingent) on the part of any member of the Porta Group or the SEC Group which in any such case is, or might reasonably be expected to be, material in the context of the Porta Group taken as a whole or in the context of the Merger;

vi) there is or is likely to be any obligation or liability (whether actual or contingent) to make good, repair, re-instate or clean up any property now or previously owned, occupied or made use of by any past or present member of the Porta Group or in which any such member may now or previously have had an interest under any environmental legislation or regulation or notice, circular or order of any Relevant Authority in any jurisdiction which in any such case is, or might reasonably be expected to be, material in the context of the Porta Group taken as a whole or in the context of the Merger; or

vii) any member of the Porta Group or any person that performs or has performed services for or on behalf of any such member is or has engaged in any activity, practice or conduct which would constitute an offence under the Bribery Act 2010 or any other applicable anti-corruption legislation;

   l.      since 31 December 2018, and save as Disclosed to Porta: 

i) no adverse change and no circumstance having arisen which would or might reasonably be expected to result in any adverse change in the business, assets, financial or trading position or profits or prospects or operational performance of any member of the SEC Group which in any such case is, or might reasonably be expected to be, material in the context of the Porta Group taken as a whole or in the context of the Merger;

ii) Porta not having discovered that any financial or business or other information concerning the SEC Group disclosed at any time, whether publicly or otherwise, by or on behalf of any member of the SEC Group, to Porta or its advisers is misleading or contains a material misrepresentation of fact or omits to state a fact necessary to make the information contained therein not misleading which is, or might reasonably be expected to be, material in the context of the Porta Group taken as a whole or in the context of the Merger;

iii) Porta not having discovered any information which affects the import of any information disclosed at any time by or on behalf of any member of the SEC Group to an extent which is material in the context of the Porta Group taken as a whole or in the context of the Merger;

iv) no litigation, arbitration proceedings, prosecution or other legal proceedings to which any member of the SEC Group is or may become a party (whether as plaintiff, defendant or otherwise) having been threatened, announced or instituted or remaining outstanding in respect of any member of the SEC Group and which in any such case is likely to adversely affect any member of the SEC Group to an extent which is, or might reasonably be expected to be, material in the context of the Porta Group taken as a whole or in the context of the Merger;

v) Porta not having discovered that any partnership, company or other entity in which any member of the SEC Group has an interest and which is not a subsidiary undertaking of SEC is subject to any liability, contingent or otherwise, which is or might reasonably be expected to be material in the context of the Porta Group taken as a whole or in the context of the Merger.

Part C: Certain further terms of the Scheme and the Merger

1) If SEC is required by the Panel to make an offer for Scheme Shares under the provisions of Rule 9 of the Takeover Code, SEC may make such alterations to any of the above Conditions and terms of the Offer as are necessary to comply with the provisions of that Rule.

2) Conditions 3 (e) to (l) (inclusive) must be fulfilled or waived by no later than 11.59 p.m. on the date immediately preceding the Scheme Court Hearing, failing which the Scheme will lapse. To the extent permitted by law and subject to the requirements of the Takeover Panel, SEC reserves the right to waive all or any of Conditions 3 (e) to (k) in whole or in part and Porta reserves the right to waive Condition 3 (l) in whole or in part. Neither SEC nor Porta (as the case may be) shall be under any obligation to waive or to treat as fulfilled any of Conditions 3 (e) to (k) (inclusive) (in the case of SEC) or 3(l) (in the case of Porta) before 11.59 p.m. on the date immediately preceding the Scheme Court Hearing, notwithstanding that the other Conditions of the Offer may at such earlier date have been waived or fulfilled and that there are at such earlier date no circumstances indicating that any of such Conditions may not be capable of fulfilment.

3) The availability of the Offer to persons not resident in the United Kingdom may be affected by the laws of the relevant jurisdictions. Persons who are not resident in the United Kingdom should inform themselves about and observe any applicable requirements.

4) The availability of the New SEC Shares to persons not resident in the United Kingdom may be affected by the laws of the relevant jurisdictions. Persons who are not resident in the United Kingdom should inform themselves about and observe any applicable requirements.

5) The New SEC Shares to be issued under the Scheme will be issued credited as fully paid and will rank in full for all dividends and other distributions, if any, declared, made or paid after the Effective Date and otherwise shall rank pari passu with the issued ordinary shares in SEC.

6) Fractions of New SEC Shares will not be allotted or issued to Scheme Shareholders and the entitlements of Scheme Shareholders will be rounded down to the nearest whole number of New SEC Shares.

7) The Merger will not be made, directly or indirectly, in or into, or by use of the mails of, or by any means or instrumentality (including, without limitation, facsimile transmission, telex, telephone, internet or e-mail) of interstate or foreign commerce of, or of any facility of a national securities exchange of, any Restricted Jurisdiction and the Merger will not be capable of acceptance by any such use, means, instrumentality or facility or from within the any Restricted Jurisdiction.

8) Porta Shares which will be acquired under the Merger will be acquired fully paid and free from all liens, equities, charges, encumbrances, options, rights of pre-emption and any other third party rights and interests of any nature and together with all rights now or hereafter attaching or accruing to them, including voting rights and the right to receive and retain in full all dividends and other distributions (if any) declared, made or paid on or after the date of this announcement.

9) Under Rule 13.5 of the Takeover Code, SEC may not invoke a condition to the Offer 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 condition are of material significance to SEC in the context of the Offer. The determination of whether or not such a condition can be invoked would be determined by the Panel. The conditions contained in Conditions 1, 2, 3(a), 3(b), 3(c) and 3(d) are not subject to this provision of the Takeover Code.

10) Under Rule 13.6 of the Takeover Code, Porta may not invoke or cause or permit SEC to invoke any condition to the Offer unless the circumstances which give rise to the right to invoke the condition are of material significance to the Porta Shareholders in the context of the Offer. The determination of whether or not such a condition can be invoked would be determined by the Panel. The conditions contained in Conditions 1, 2, 3(a) and 3(b) are not subject to this provision of the Takeover Code.

11) The Offer is governed by the law of England and Wales and is subject to the jurisdiction of the English courts and to the Conditions and further terms set out in this announcement. The Scheme will be implemented in accordance with applicable English law and will be subject to the applicable requirements of the Takeover Code, the Panel and the London Stock Exchange (including the AIM Rules).

APPIX 2

SOURCES AND BASES OF CALCULATION

In this Announcement:

   (i)     The value attributed to the Offer is based on: 

a) The value of GBP0.78 per SEC Share, being the closing price on AIM on 7 June 2019 (being the latest practicable date prior to the date of this Announcement);

   b)     dividing by the agreed exchange ratio of 88.4955752; and 
   c)      multiplying by the number of Porta Shares in issue, being 506,525,115. 

(ii) Unless otherwise stated, all closing share prices for Porta Shares referred to in this Announcement are closing middle market quotations derived from Fidessa.

(iii) The premium calculations to the price per Porta Share have been calculated by reference to a price of 0.45 pence per Porta Share, being the Closing Price on 7 June 2019, being the latest practicable date prior to the date of this Announcement.

(iv) The premium calculations to the volume weighted average price per Porta Share have been calculated by reference to the volume weighted average of the daily volume weighted price, being 0.59 pence per Porta Share over 30 days to 7 June 2019, being the latest practicable date prior to the date of this Announcement (sourced from Fidessa).

(v) References to a percentage of Porta Shares are based on the 506,525,115 Porta Shares in issue on 7 June 2019, being the latest practicable date prior to the date of this Announcement.

(vi) References to a percentage of SEC Shares are based on the 13,502,533 SEC Shares in issue on 7 June 2019, being the latest practicable date prior to the date of this Announcement.

(vii) References to a percentage of Scheme Shares are based on the 506,525,115 Porta Shares in issue minus the 85,714,286 Porta Shares held by SEC, which equates to 420,810,829 Scheme Shares as at 7 June 2019, being the latest practicable date prior to the date of this Announcement.

(viii) Unless otherwise stated, the financial information relating to Porta has been extracted or derived (without any adjustment) from the audited consolidated accounts of Porta for the financial year ended 31 December 2018, prepared in accordance with IFRS.

(ix) Unless otherwise stated, the financial information relating to SEC has been extracted or derived (without any adjustment) from the audited consolidated accounts of SEC for the financial year ended 31 December 2018, prepared in accordance with IFRS.

All references to times in this Announcement are to London times unless otherwise stated.

APPIX 3

SCHEDULE OF IRREVOCABLE UNDERTAKINGS

Porta Directors

Irrevocable undertakings

All Porta Directors who hold Porta Shares or otherwise control the voting rights in respect of such Porta Shares have, on the basis set out below, given irrevocable undertakings to SEC to vote (or procure the vote) in favour of the Scheme and the Court Meeting and the Resolutions to be proposed at the Porta General Meeting.

 
        Name of Porta Director        Number of Porta   Percentage of 
                                       Shares            Porta issued share 
                                                         capital 
Emma Kane                                  22,696,504                 4.48% 
                                 --------------------  -------------------- 
John Foley                                  5,665,079                 1.12% 
                                 --------------------  -------------------- 
Brian Tyson                                 4,534,614                 0.90% 
                                 --------------------  -------------------- 
Gene Golembiewski                           1,412,230                 0.28% 
                                 --------------------  -------------------- 
Rhydian Bankes                                125,000                 0.02% 
                                 --------------------  -------------------- 
Total                                      34,433,427                 6.80% 
                                 --------------------  -------------------- 
 

All of these irrevocable undertakings terminate and automatically cease to have any effect:

(a) if the Announcement (as defined in the undertakings) is not released by 11:59 pm (London time) on 11 June 2019 or such later date as the SEC and Porta may agree;

(b) if the Scheme Circular or Offer Document is not published within 28 days of the date of release of the Announcement (or within such longer period as SEC and Porta, with the consent of the Panel, agree); or

   (c)           on the earlier of: 
   (i)     the Long Stop Date; and 

(ii) the time and date on which the Transaction lapses, is withdrawn or otherwise terminates in accordance with its terms;

(d) if SEC publicly announces, with the consent of any relevant authority (if required) and before the Scheme Document or Offer Document is posted, that it does not intend to proceed with the Transaction;

(e) if the Transaction is implemented by way of a Scheme, the Scheme or any resolution proposed which is required to implement the Scheme is not approved by the requisite majority of shareholders of Porta at the General Meeting or the Court Meeting; and

(f) if any competing offer for the issued and to be issued ordinary share capital of Porta is made which is declared unconditional in all respects (if implemented by way of a takeover offer) or otherwise becomes effective (if implemented by way of a scheme of arrangement).

These undertakings will remain binding in the event that a higher competing offer for Porta is made.

Porta Shareholders

Irrevocable undertakings

SEC has received irrevocable undertakings to vote (or procure the vote) in favour of the Scheme and the Court Meeting and the Resolutions to be proposed at the Porta General Meeting from the following Porta Shareholders:

 
        Name of Porta Shareholder        Number of Porta   Percentage of 
                                          Shares            Porta issued share 
                                                            capital 
Hawk Investment Holdings 
 Limited                                      74,929,077                14.79% 
                                    --------------------  -------------------- 
Retro Grand Limited                           30,262,931                 5.98% 
                                    --------------------  -------------------- 
Groundlinks Limited                            6,750,000                 1.33% 
                                    --------------------  -------------------- 
Hawk Pension Fund Limited                        850,000                 0.17% 
                                    --------------------  -------------------- 
Serrafina Holdings Limited                       450,000                 0.09% 
                                    --------------------  -------------------- 
Total                                        113,242,008                22.36% 
                                    --------------------  -------------------- 
 

All of these irrevocable undertakings terminate and automatically cease to have any effect:

(a) the Announcement has not been issued by 11:59 pm (London time) on 11 June 2019 or such later time and/or date as SEC and Porta may agree, being no later, in any event, than 11.59 p.m. on 12 June 2019;

(b) the Scheme Circular or Offer Document is not published within 28 days of the date of release of the Announcement (or within such longer period as SEC, with the consent of the Panel, determines);

(c) the Scheme or an Offer announced in implementation of the Transaction has not become effective or been declared unconditional in all respects in accordance with the requirements of the Code (as the case may be) prior to 11:59pm on 30 September 2019; or

(d) the Transaction, if made, terminates, lapses or is withdrawn as the case may be, or, if applicable, the Scheme does not become effective in accordance with its terms.

These undertakings will remain binding in the event that a higher competing offer for Porta is made.

SEC shareholders

Irrevocable undertakings

The following holders of SEC Shares have, on the basis set out below, given irrevocable undertakings to SEC and Porta to vote (or procure the vote) in favour of the resolutions to be proposed at the SEC General Meeting.

 
 Name of SEC Shareholder    Number of SEC Shares   Percentage of SEC 
                                                    issued share capital 
 Fiorenzo Tagliabue                    8,273,100                   61.27 
                           ---------------------  ---------------------- 
 Silvia Anna Mazzucca                    647,000                    4.79 
                           ---------------------  ---------------------- 
 Total                                 8,920,100                   66.06 
                           ---------------------  ---------------------- 
 

APPIX 4

DEFINITIONS

In this announcement, the following words and expressions have the following meaning, unless the context requires otherwise:

 
 "Act" or "Companies         the Companies Act 2006 (as amended from time 
  Act"                        to time) 
 "Adjusted EBITDA"           Adjusted EBITDA excludes acquisition and reorganisation 
                              costs, non-recurring property costs, exceptional 
                              legal and consultancy costs, share based payments, 
                              security impairment, revaluation of contingent 
                              consideration and provision of vendor loan 
                              guarantee 
                            -------------------------------------------------------- 
 "Admission"                 the admission of the share capital of the 
                              Combined Group to AIM in conjunction with 
                              the Merger 
                            -------------------------------------------------------- 
 "Admission Document"        the admission document to be published by 
                              SEC and posted to SEC Shareholders in connection 
                              with the Merger and for the purposes of Admission 
                            -------------------------------------------------------- 
 "AIM"                       the AIM Market of the London Stock Exchange 
                            -------------------------------------------------------- 
 "AIM Rules"                 the rules applicable to companies governing 
                              their admission to AIM, and following admission 
                              their continuing obligations to AIM, as set 
                              out in the AIM Rules for Companies published 
                              by the London Stock Exchange from time to 
                              time 
                            -------------------------------------------------------- 
 "Arden"                     Arden Partners plc, incorporated in England 
                              and Wales with registered number 04427253 
                            -------------------------------------------------------- 
 "Business Day"              a day (excluding Saturdays, Sundays and public 
                              or bank holidays) on which banks are open 
                              for business in London 
                            -------------------------------------------------------- 
 "certificated"              where a share or other security is not in 
  or in "certificated         uncertificated form (that is, not in CREST) 
  form" 
                            -------------------------------------------------------- 
 "Closing Price(s)"          the closing middle market quotation of a share 
                              as derived from the Daily Official List 
                            -------------------------------------------------------- 
 "Code" or "Takeover         the City Code on Takeovers and Mergers as 
  Code"                       issued from time to time by or on behalf of 
                              the Panel 
                            -------------------------------------------------------- 
 "Combined Group"            the combined businesses of the SEC Group and 
                              the Porta Group following completion of the 
                              Merger 
                            -------------------------------------------------------- 
 "Conditions"                the conditions to the Merger (including the 
                              Scheme) which are set out in Appendix 1 of 
                              this announcement and will be included in 
                              the Scheme Document 
                            -------------------------------------------------------- 
 "Consideration"             the consideration payable to Scheme Shareholders 
                              from SEC pursuant to the terms of Scheme 
                            -------------------------------------------------------- 
 "Conversion Shares"         530,372,743 Porta Shares to be allotted to 
                              RGL in connection with the RGL Debt Conversion 
                            -------------------------------------------------------- 
 "Conversion Shares          the sale and purchase of the Conversion Shares 
  Exchange"                   by RGL to SEC in accordance with the provisions 
                              of the New Articles and the Conversion Shares 
                              Undertaking 
                            -------------------------------------------------------- 
 "Conversion Shares          the undertaking given by SEC in favour of 
  Undertaking"                RGL in respect of the sale and purchase of 
                              the Conversion Shares by RGL in exchange for 
                              the allotment of New SEC Shares 
                            -------------------------------------------------------- 
 "Convertible Loan           the convertible loan agreement entered into 

  Agreement"                  between RGL and Porta, dated 10 April 2019 
                            -------------------------------------------------------- 
 "Court"                     the High Court of Justice of England and Wales 
                            -------------------------------------------------------- 
 "Court Meeting"             the court hearing at which Porta will seek 
                              an order sanctioning the Scheme pursuant to 
                              Part 26 of the Act 
                            -------------------------------------------------------- 
 "CREST"                     the relevant system (as defined in the CREST 
                              Regulations) in respect of which Euroclear 
                              UK & Ireland Limited is the Operator (as defined 
                              in the CREST Regulations) in accordance with 
                              which securities may be held and transferred 
                              in uncertificated form 
                            -------------------------------------------------------- 
 "CREST Regulations"         the Uncertificated Securities Regulations 
                              2001 (SI 2001 2001/3755) 
                            -------------------------------------------------------- 
 "Daily Official             the daily official list of the London Stock 
  List"                       Exchange 
                            -------------------------------------------------------- 
 "Dealing Disclosure"        an announcement pursuant to Rule 8 of the 
                              Code containing details of dealings in relevant 
                              securities of any party to an offer 
                            -------------------------------------------------------- 
 "Disclosed"                 the information which has been fairly disclosed 
                              by or on behalf of Porta: (i) in writing prior 
                              to the date of this announcement to SEC or 
                              SEC's professional advisers (in their capacity 
                              as such in relation to the Merger); (ii) in 
                              the Annual Report and Accounts of the Porta 
                              Group for the financial year ended 31 December 
                              2018; (iii) in this announcement; or (iv) 
                              in any other public announcement made by Porta 
                              after 10 April 2019 and prior to the date 
                              of this Announcement in accordance with the 
                              Market Abuse Regulation, the AIM Rules or 
                              the Disclosure Guidance and Transparency Rules 
                            -------------------------------------------------------- 
 "Disclosure Guidance        the Disclosure Guidance and Transparency Rules 
  and Transparency            published by the FCA under FSMA and contained 
  Rules"                      in the FCA's publication of the same name 
                              (as amended from time to time) 
                            -------------------------------------------------------- 
 "EBITDA"                    Earnings before interest, tax, depreciation 
                              and amortisation 
                            -------------------------------------------------------- 
 "Effective"                 in the context of the Merger: 
                              (i) if the Merger is implemented by way of 
                              the Scheme, the Scheme having become effective 
                              in accordance with its terms; or 
                              (ii) if the Merger is implemented by way of 
                              a Takeover Offer, the Takeover Offer having 
                              been declared or become unconditional in all 
                              respects 
                            -------------------------------------------------------- 
 "Effective Date"            the date on which the Scheme Court Order is 
                              delivered to the Registrar of Companies 
                            -------------------------------------------------------- 
 "Excluded Shares"           any Porta Shares: 
 
                              a. beneficially owned by SEC or any other 
                              member of the SEC Group; and 
                              b. held by Porta in treasury 
                            -------------------------------------------------------- 
 "FCA"                       the Financial Conduct Authority 
                            -------------------------------------------------------- 
 "FCA Handbook"              the FCA Handbook of rules and guidance published 
                              by the FCA (as amended from time to time) 
                            -------------------------------------------------------- 
 "FSMA"                      the Financial Services and Markets Act 2000 
                              (as amended from time to time) 
                            -------------------------------------------------------- 
 "Forms of Proxy"            as the context may require, either or both 
                              of (i) the pink form of proxy for use at the 
                              Court Meeting, and (ii) the white form of 
                              proxy for use at the Porta General Meeting, 
                              each of which shall accompany the Scheme Document 
                            -------------------------------------------------------- 
 "Grant Thornton"            Grant Thornton UK LLP 
                            -------------------------------------------------------- 
 "Hawk"                      Hawk Investment Holdings Limited 
                            -------------------------------------------------------- 
 "Hawk Bond"                 discounted capital bond issued by Porta to 
                              Hawk 
                            -------------------------------------------------------- 
 "IFRS"                      International Financial Reporting Standards 
                              as adopted by the European Union 
                            -------------------------------------------------------- 
 "Independent Expert         means the expert appraisal to be drafted pursuant 
  Appraisal"                  to article 2343-ter of the Italian Civil Code 
                              in respect of the issue of the New SEC Shares 
                              in connection with the Merger 
                            -------------------------------------------------------- 
 "Italian Civil              means the Italian civil code, enacted by Royal 
  Code"                       Decree No. 262 of 16 March 1942, as subsequently 
                              amended and supplemented 
                            -------------------------------------------------------- 
 "London Stock               London Stock Exchange plc 
  Exchange" 
                            -------------------------------------------------------- 
 "Long Stop Date"            means 11.59 p.m. (UK time) on 30 September 
                              2019 
                            -------------------------------------------------------- 
 "MAR"                       the Market Abuse Regulation (2014/596/EU) 
                            -------------------------------------------------------- 
 "members"                   unless the context otherwise requires, those 
                              persons listed on the register of members 
                              of Porta from time to time 
                            -------------------------------------------------------- 
 "Merger"                    the proposed acquisition by SEC of the entire 
                              issued and to be issued ordinary share capital 
                              of Porta (not already held by or on behalf 
                              of SEC), to be implemented by way of the Scheme 
                              or (should SEC so elect, subject to the consent 
                              of the Panel) by way of a Takeover Offer 
                            -------------------------------------------------------- 
 "Newington"                 Newington Communications Limited, a company 
                              incorporated in England and Wales with registered 
                              number 05674779 
                            -------------------------------------------------------- 
 "Newgate"                   Newgate Communications Limited 
                            -------------------------------------------------------- 
 "New Articles"              the Articles of Association of Porta to be 
                              adopted by Porta in conjunction with Merger, 
                              if approved by the requisite majority at the 
                              Porta General Meeting 
                            -------------------------------------------------------- 
 "New SEC Shares"            the SEC Shares which are to be issued to pursuant 
                              to the Merger 
                            -------------------------------------------------------- 
 "Offeror Exchange           5,993,212 SEC Shares, being SEC Shares which 
  Shares"                     are to be issued to RGL in connection with 
                              the Conversion Shares Exchange 
                            -------------------------------------------------------- 
 "Offer Period"              the period commencing on 10 April 2019 and 
                              ending in accordance with the rules of the 
                              Code 
                            -------------------------------------------------------- 
 "Opening Position           an announcement required for the purposes 

  Disclosure"                 of Rule 8 of the Code containing details of 
                              interests or short positions in, or rights 
                              to subscribe for, any relevant securities 
                              of a party to the Merger if the person concerned 
                              has such a position 
                            -------------------------------------------------------- 
 "Panel"                     the UK Panel on Takeovers and Mergers 
                            -------------------------------------------------------- 
 "Porta"                     Porta Communications plc, a company incorporated 
                              in England and Wales with registered number 
                              05353387 
                            -------------------------------------------------------- 
 "Porta Directors"           the directors of Porta as at the date of this 
  or "Porta Board"            announcement or, where the context so requires, 
                              the directors of Porta from time to time 
                            -------------------------------------------------------- 
 "Porta General              the general meeting of Porta to be convened 
  Meeting"                    in connection with the Scheme and the Merger, 
                              notice of which will be set out in the Scheme 
                              Document, including any adjournment thereof 
                            -------------------------------------------------------- 
 "Porta Group"               Porta, its subsidiaries and subsidiary undertakings 
                              from time to time 
                            -------------------------------------------------------- 
 "Porta Independent          the Porta Directors, save for Fiorenzo Tagliabue 
  Directors" 
                            -------------------------------------------------------- 
 "Porta Meetings"            the Court Meeting and the Porta General Meeting 
                            -------------------------------------------------------- 
 "Porta Shares"              the ordinary shares of one pence each in the 
                              share capital of Porta 
                            -------------------------------------------------------- 
 "Porta Shareholder"         holders of Porta Shares 
                            -------------------------------------------------------- 
 "pounds", "GBP",            the lawful currency of the United Kingdom 
  "p" or "Sterling" 
                            -------------------------------------------------------- 
 "Qualifying SEC             means a SEC Shareholder or SEC Shareholders 
  Shareholder"                holding at least 5 per cent. of the total 
                              issued share capital of SEC 
                            -------------------------------------------------------- 
 "Registrar of               the Registrar of Companies in England and 
  Companies"                  Wales 
                            -------------------------------------------------------- 
 "Regulatory Information     one of the regulatory information services 
  Service"                    authorised by the FCA to receive, process 
                              and disseminate regulatory information in 
                              respect of companies trading on AIM 
                            -------------------------------------------------------- 
 "Relevant Debt"             GBP5,303,727.43 
                            -------------------------------------------------------- 
 "Restricted Jurisdiction"   any jurisdiction where local laws or regulations 
                              may result in a significant risk of civil, 
                              regulatory or criminal exposure if information 
                              concerning the Merger is sent or made available 
                              to Porta Shareholders in that jurisdiction 
                            -------------------------------------------------------- 
 "Restricted Overseas        a person (including, without limitation, an 
  Person"                     individual, partnership, unincorporated syndicate, 
                              limited liability company, unincorporated 
                              organisation, trust, trustee, executor, administrator 
                              or other legal representative) in, or resident 
                              in, or any person whom Porta reasonably believes 
                              to be in, or resident in, a Restricted Jurisdiction 
                              (or any custodian, nominee or trustee for 
                              such person) 
                            -------------------------------------------------------- 
 "RGL"                       Retro Grand Limited, a company incorporated 
                              in the British Virgin Islands with registered 
                              number 373821 
                            -------------------------------------------------------- 
 "RGL Debt Conversion"       the conversion of the Relevant Debt into the 
                              Conversion Shares 
                            -------------------------------------------------------- 
 "Scheme"                    the proposed scheme of arrangement under Part 
                              26 of the Act between Porta and the Scheme 
                              Shareholders, with or subject to any modification, 
                              addition or condition approved or imposed 
                              by the Court and agreed to by Porta and SEC 
                            -------------------------------------------------------- 
 "Scheme Court               the order of the Court sanctioning the Scheme 
  Order"                      under Part 26 of the Act 
                            -------------------------------------------------------- 
 "Scheme Document"           the document to be sent to (among others) 
                              Porta Shareholders and persons with information 
                              rights containing and setting out, amongst 
                              other things, the Scheme, the full terms and 
                              conditions of the Scheme and the notices convening 
                              the Porta Meetings and associated forms of 
                              proxy 
                            -------------------------------------------------------- 
 "Scheme Record              the time and date specified in the Scheme 
  Time"                       Document, expected to be 6.00 p.m. on the 
                              Business Day immediately prior to the Effective 
                              Date 
                            -------------------------------------------------------- 
 "Scheme Sanction            the hearing of the Court to sanction the Scheme 
  Hearing" 
                            -------------------------------------------------------- 
 "Scheme Shareholders"       holders of Scheme Shares from time to time 
                            -------------------------------------------------------- 
 "Scheme Shares"             Porta Shares: 
                              a. in issue at the date of the Scheme Document; 
 
                              b. (if any) issued after the date of the Scheme 
                              Document, but before the Voting Record Time; 
                              and 
 
                              c. (if any) issued at or after the Voting 
                              Record Time and before the Scheme Record Time, 
                              either on terms that the original or any subsequent 
                              holders thereof shall be bound by the Scheme 
                              or in respect of which the holders thereof 
                              shall have agreed in writing to be bound by 
                              the Scheme, 
 
                              but in each case other than the Excluded Shares 
                            -------------------------------------------------------- 
 "SEC"                       SEC S.p.A., a company incorporated in Italy 
                              with company number 09628510159 
                            -------------------------------------------------------- 
 "SEC Capital Increase       means the resolution to be proposed at the 
  Resolution"                 SEC General Meeting for the approval of the 
                              issue of the New SEC Shares in connection 
                              with the Merger 
                            -------------------------------------------------------- 
 "SEC Circular"              the circular to be published by SEC and to 
                              be posted to SEC Shareholders in connection 
                              with the Merger and attaching the notice of 
                              the SEC General Meeting 
                            -------------------------------------------------------- 
 "SEC Convertible            The convertible loan agreement between Porta 
  Loan Agreement"             and SEC dated 10 April 2019 pursuant to which 
                              SEC made a convertible loan facility available 
                              to Porta 
                            -------------------------------------------------------- 
 "SEC Directors"             the directors of SEC as at the date of this 
  or "SEC Board"              announcement or, where the context so requires, 
                              the directors of SEC from time to time 
                            -------------------------------------------------------- 
 "SEC General Meeting"       the general meeting of SEC to be convened 
                              in connection with the Merger, notice of which 
                              will be set out in the SEC Circular, including 
                              any adjournment thereof 

                            -------------------------------------------------------- 
 "SEC Group"                 SEC, its subsidiaries and subsidiary undertakings 
                              from time to time 
                            -------------------------------------------------------- 
 "SEC Shares"                ordinary shares of no expressed par value 
                              in the capital of SEC 
                            -------------------------------------------------------- 
 "SEC Shareholders"          the registered holders of SEC Shares from 
                              time to time 
                            -------------------------------------------------------- 
 "Takeover Offer"            a takeover offer as defined in Part 28 of 
                              the Act 
                            -------------------------------------------------------- 
 "UK" or "United             the United Kingdom of Great Britain and Northern 
  Kingdom"                    Ireland 
                            -------------------------------------------------------- 
 "UK GAAP"                   generally accepted accounting principles in 
                              the United Kingdom 
                            -------------------------------------------------------- 
 "uncertificated"            in respect of a share or other security, where 
  or                          that share or other security is recorded on 
  in "uncertificated          the relevant register of the share or security 
  form"                       concerned as being held in uncertificated 
                              form in CREST and title to which may be transferred 
                              by means of CREST 
                            -------------------------------------------------------- 
 "US" or "United             the United States of America, its territories 
  States"                     and possessions, any state of the United States 
                              and the District of Columbia and all other 
                              areas subject to its jurisdiction 
                            -------------------------------------------------------- 
 "US Exchange Act"           the US Securities Exchange Act 1934, as amended 
                            -------------------------------------------------------- 
 "US Securities              the US Securities Act 1933, as amended 
  Act" 
                            -------------------------------------------------------- 
 "Voting Record              the date and time to be specified in the Scheme 
  Time"                       Document 
                            -------------------------------------------------------- 
 

For the purposes of this Announcement, "subsidiary", "subsidiary undertaking", "undertaking" and "associated undertaking" have the meanings given by the Act.

References to an enactment include references to that enactment as amended, replaced, consolidated or re-enacted.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

SOAEALKFFAKNEFF

(END) Dow Jones Newswires

June 11, 2019 13:29 ET (17:29 GMT)