TIDMXAF
RNS Number : 6607Y
Xafinity PLC
07 December 2017
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED IN IT IS NOT FOR
RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY
OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA,
JAPAN OR THE REPUBLIC OF SOUTH AFRICA OR INTO ANY OTHER
JURISDICTION WHERE TO DO SO MIGHT CONSTITUTE A VIOLATION OR BREACH
OF ANY APPLICABLE LAW. PLEASE SEE THE IMPORTANT NOTICE AT THE OF
THIS ANNOUNCEMENT.
THIS ANNOUNCEMENT, WHICH DOES NOT CONSTITUTE A PROSPECTUS OR
PROSPECTUS EQUIVALENT DOCUMENT, IS NOT AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES, AND NEITHER THIS
ANNOUNCEMENT NOR ANYTHING HEREIN FORMS THE BASIS FOR ANY CONTRACT
OR COMMITMENT WHATSOEVER.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.
7 December 2017
Xafinity plc
Proposed Acquisition of Punter Southall Holdings Limited for up
to GBP153 million
Proposed Firm Placing and Placing and Open Offer to raise GBP70
million
Introduction
Xafinity plc ("Xafinity" or the "Company"), the pensions
actuarial, consulting and administration business, today announces
the proposed acquisition from Punter Southall Group Limited ("PS
Topco") of its actuarial consulting, pensions administration and
investment consulting businesses (the "Target Group") for a total
consideration of up to approximately GBP153 million (the
"Acquisition").
The consideration for the Acquisition will be satisfied through
the payment of GBP92,520,000 in cash, the issue of 25,766,871
Completion Shares, the transfer of the operating company of
Xafinity's HR Trustees business to PS Topco at an agreed value of
GBP8,480,000, and the potential issue of up to 6,134,969 Earn Out
Shares pursuant to a contingent deferred consideration
mechanism.
The cash component of the consideration is proposed to be
financed by a combination of (a) a Firm Placing and Placing and
Open Offer (the "Capital Raising") to raise in aggregate
approximately GBP70 million (before expenses) and (b) funds drawn
down under New Debt Facilities totalling GBP80 million (which
replaces an existing debt facility of GBP38 million and will
provide GBP42 million of incremental debt capacity).
The Target Group comprises three businesses: (i) the Actuarial
Consulting Business, which provides actuarial advice to the
trustees or employer sponsors of approximately 425 UK occupational
pension schemes; (ii) the Pensions Administration Business, which
administers pensions for approximately 380,000 scheme members
belonging to more than 200 UK occupational pension schemes; and
(iii) the Investment Consulting Business, which provides specialist
consulting services, including investment strategy, risk management
and investment governance, to the trustees or employer sponsors of
over 115 UK occupational pension schemes.
The Target Group reported revenue for the year ended 31 December
2016 of approximately GBP51 million and Adjusted EBITDA of
approximately GBP11 million.
The Acquisition is conditional upon, among other things,
Xafinity Shareholders' approval and receipt of proceeds from the
Capital Raising, and is expected to complete on 11 January
2018.
Highlights of the Acquisition
-- The Xafinity Directors believe that the strategic rationale
for the Acquisition is compelling and that the Acquisition
represents an opportunity for Xafinity to progress its strategy of
consolidating the mid-market in actuarial, investment and
administrative services to trustees and sponsors of UK DB Schemes,
by creating a new leading player with increased capability to
challenge the Global Consultancies.
-- The Xafinity Directors believe that the Target Group's
businesses are highly complementary to Xafinity's. In particular,
the Xafinity Directors believe that the two groups' actuarial,
investment consulting and administration businesses, each of which
has a strong market reputation, a diversified client base,
long-standing client relationships and a collegiate employee
culture, are very well suited to a combination within the Enlarged
Group.
-- The Xafinity Directors believe that the Acquisition will
enable clients of both Xafinity and the Target Group to benefit
from the combined capabilities of the Enlarged Group. In the
Board's view, Xafinity has market-leading offerings in certain
areas, including de-risking activity through its Centre of
Excellence, in technology (with the development of "Radar",
Xafinity's actuarial and investment software) and in relation to
the DC market with the National Pension Trust. Xafinity has had
success introducing these offerings to its own client base and, the
Xafinity Directors believe, such services are also likely to be
attractive to the Target Group's clients following Completion.
Similarly, there are areas of expertise within the Target Group
that are stronger than Xafinity's relative capabilities (for
example, in the area of pension scheme administration, where
significant growth has been achieved, taking on some of the largest
contracts in the market, and advice on corporate mergers and
acquisitions activity through Punter Southall Transaction
Services). The Xafinity Directors consider that the Acquisition
would enable both firms to 'level up' in such areas across the
Enlarged Group.
-- The markets in which both the Xafinity Group and the Target
Group operate are fragmented. The Xafinity Directors believe that
the combination of Xafinity's businesses with the Target Group will
create the largest "pure-play" pensions consultancy firm in the UK.
As a result, the Board believes the Enlarged Group would have a
high profile in the pensions industry which is expected to lead to
an increase in the number of invitations and opportunities received
by Xafinity to tender for services to trustees of DB Schemes for
the provision of actuarial, administration and/or investment
consulting services. The Xafinity Directors believe that the
Enlarged Group would have access to a greater proportion of market
opportunities in future by providing a compelling alternative to
the Global Consultancies, by virtue of its increased scale and
profile.
-- The disposal of Xafinity's HR Trustees business as part of
the consideration for the Acquisition removes a potential barrier
to growth for Xafinity, because Xafinity's addressable market is
reduced by HR Trustees' clients due to the potential conflict of
interest that would or could arise if HR Trustees and Xafinity were
to share a client.
-- The Target Group achieved revenue of approximately GBP51
million and adjusted EBITDA (including PS Group central cost
allocations of GBP4.3 million) of approximately GBP11 million for
the year ended 31 December 2016. In connection with the
Acquisition, the Company and PS Topco have agreed a Transitional
Services Agreement, under which PS Topco will continue to provide
overhead services support and services to the Target Group for up
to two years after Completion for a basic charge of GBP2.125
million per annum.
-- The Acquisition is expected by the Xafinity Directors to be
earnings enhancing for the Group for the financial year ending 31
March 2019 and materially earnings enhancing thereafter.
Paul Cuff & Ben Bramhall, co-CEOs of Xafinity plc, said:
"We are delighted to announce the merger of Xafinity and the
actuarial, administration and investment consulting divisions of
Punter Southall. The deal will create the largest "pure-play"
pensions consultancy firm in the UK market. We both have a personal
and long-standing affiliation with Punter Southall, and we believe
that the addition of their like-minded and high-quality staff will
contribute significantly to Xafinity's position in the market. This
transaction marks another significant step in our strategy towards
becoming the pre-eminent mid-tier pensions consultancy firm in the
UK, with the combination of these businesses providing an expanded,
yet focused, offering for clients that will position us as the
primary alternative to the big three Global Consultancies."
John Batting, CEO of Punter Southall's Actuarial Consulting
Business, said:
"This morning's announcement is very exciting news for clients
and employees of the actuarial, administration and investment
consultancy businesses at Punter Southall. This deal will bring
together complementary businesses that will ultimately provide
increased scale and expertise, an enhanced range and quality of
service. Paul and Ben's history with Punter Southall, and their
clear understanding of our reputation and culture has been vitally
important to this merger, and I am confident that our current
employees will benefit from this unique opportunity to be part of a
publicly listed company poised for an exciting growth journey."
The Acquisition
Xafinity has entered into a conditional agreement with PS Topco
to acquire Punter Southall Holdings Limited ("Target Holdco"), the
holding company of the Target Group. The Company will also acquire
certain minority interests in the Target Group pursuant to the
Acquisition.
The consideration due under the Acquisition Agreement will be
satisfied through:
-- a payment of GBP92,520,000 in cash;
-- the issue of 25,766,871 Completion Shares (valued, for the
purposes of the Acquisition, at 163 pence per Completion Share,
being approximately GBP42 million in aggregate), representing
approximately 12.6 per cent of the Company's Enlarged Share Capital
following the completion of the Capital Raising and Completion;
-- the transfer (pursuant to the Disposal Agreement) by Xafinity
Consulting to PS Topco of the entire issued share capital of HR
Trustees at an agreed value, for the purposes of such transfer, of
GBP8,480,000; and
-- the issue of up to 6,134,969 Earn Out Shares (valued, for the
purposes of the Acquisition, at the same price per share as the
Completion Shares, being a maximum of approximately GBP10 million
in aggregate) following Completion, pursuant to a contingent
deferred consideration mechanism.
The consideration is subject to a post-Completion adjustment,
the quantum of which will be calculated by reference to the net
working capital position and the cash and debt positions of,
respectively, the Target Group and HR Trustees. The Group's HR
Trustees business accounted for approximately five per cent of the
Group's revenues for the year ended 31 March 2017 at GBP2.55
million.
Shareholder approval
The Acquisition is of sufficient size relative to the Group to
constitute a Class 1 transaction under the Listing Rules, and is
therefore conditional, among other things, on the approval of all
of the Resolutions by the Shareholders at the General Meeting to be
held at 10.30 a.m. on 4 January 2018. Although the Disposal is
conditional on Completion, it does not, of itself, require the
approval of Shareholders.
The Capital Raising
The Capital Raising, which has been fully underwritten by
Liberum, comprises the issue of 41,176,470 Capital Raising Shares
at an Offer Price of 170 pence per share (representing
approximately 23.1 per cent of the Enlarged Share Capital following
completion of the Capital Raising) to raise gross proceeds of
approximately GBP70 million. It is expected that the Capital
Raising Shares will be admitted to the premium segment of the
Official List and to trading on the London Stock Exchange's Main
Market, and that dealings in the Capital Raising Shares will
commence, at 8.00 a.m. on 5 January 2018.
The Firm Placing and the Placing are being conducted by way of
an accelerated bookbuild on the Company's behalf by Liberum and
Zeus Capital as Joint Bookrunners. The bookbuild will open with
immediate effect following this Announcement. The timing of the
closing of the bookbuild, the final size of the Firm Placing, the
final size of the Placing and Open Offer and final allocations of
Capital Raising Shares are at the discretion of Liberum. A further
announcement will be made following closing of the book, confirming
the final details of the Capital Raising.
Completion of the Acquisition is expected to take place on 11
January 2018, on which date it is expected that the Completion
Shares will be admitted to the premium listing segment of the
Official List and to trading on the London Stock Exchange's Main
Market. The Capital Raising is not conditional on completion of the
Acquisition.
Key Terms of the Capital Raising
The Company is proposing to raise gross proceeds of
approximately GBP70 million by way of the Capital Raising which, in
addition to the funds drawn down under the New Debt Facilities,
will be used to fund the Acquisition (and expenses incurred in
connection with the Acquisition).
The Company has today entered into the Sponsor and Placing
Agreement under which Liberum and Zeus Capital have agreed to use
their respective reasonable endeavours to procure Firm Placees for
the Firm Placing Shares to be issued pursuant to the Firm Placing
and Placing Placees for the Open Offer Shares not taken up by
Qualifying Shareholders under the Open Offer, failing which,
Liberum has agreed to subscribe for such Firm Placing Shares or
Open Offer Shares itself.
The Capital Raising is conditional upon, among other things:
-- the Resolutions being passed by the Shareholders at the General Meeting;
-- the Sponsor and Placing Agreement having become unconditional
in all respects save for the conditions relating to Admission of
the Capital Raising Shares and not having been terminated in
accordance with its terms before Admission of the Capital Raising
Shares becomes effective; and
-- Admission of the Capital Raising Shares becoming effective by
not later than 8.00 a.m. on 5 January 2018 (or such later time
and/or date as the Joint Bookrunners, the Sponsor and the Company
may agree, being not later than 8.00 a.m. on 19 January 2018).
If the conditions to the Capital Raising (further details of
which are set out in this announcement, below) are not satisfied
or, if applicable, waived, the Capital Raising will not
proceed.
Firm Placing
The Firm Placing is proposed to raise gross proceeds of GBP52.1
million for the Company. The Firm Placing Shares are not subject to
clawback and are not part of the Placing and Open Offer. The Firm
Placing is subject to the same conditions as the Placing and Open
Offer.
Liberum, in consultation with Zeus Capital and the Company,
reserves the right to alter the relative sizes of the Firm Placing
and the Placing and Open Offer.
Placing and Open Offer
The Placing and Open Offer is proposed to raise gross proceeds
of GBP17.9 million for the Company. The Placing Shares will be
subject to clawback to satisfy valid applications by Qualifying
Shareholders under the Open Offer. To the extent that the Open
Offer Shares are not taken up by Qualifying Shareholders under the
Open Offer, an equivalent number of shares will be subscribed by
institutional investors pursuant to the Placing.
Open Offer Entitlements
Qualifying Shareholders will have the opportunity under the Open
Offer to subscribe for Open Offer Shares at the Offer Price,
payable in full on application and free of expenses, pro-rata to
their holding of Existing Ordinary Shares, on the following
basis:
1 Open Offer Share for every 13 Existing Ordinary Shares
held by them and registered in their names at the Record Date.
Fractions of Ordinary Shares will not be allotted and each
Qualifying Shareholder's entitlement under the Open Offer will be
rounded down to the nearest whole number. Fractional entitlements
to Open Offer Shares will be aggregated and will ultimately accrue
for the benefit of the Company under the Placing.
Excess Application Facility
Under the Open Offer, Qualifying Shareholders will also be
offered the opportunity to subscribe for Excess Shares in excess of
their Open Offer Entitlements pursuant to the Excess Application
Facility. The Excess Application Facility will comprise Open Offer
Shares that are not taken up by Qualifying Shareholders under the
Open Offer pursuant to their Open Offer Entitlements, which have
been clawed back from Placing Placees. Qualifying Shareholders'
applications for Excess Shares will, therefore, be satisfied only
to the extent that corresponding applications by other Qualifying
Shareholders are made for less than their pro rata Open Offer
Entitlements. If there is an over-subscription resulting from
excess applications, allocations in respect of such excess
applications will be scaled-back at the absolute discretion of
Liberum, in consultation with Zeus Capital and the Company, who
will have regard to the pro rata number of Excess Shares applied
for by Qualifying Shareholders under the Excess Application
Facility. No assurances can therefore be given that applications by
Qualifying Shareholders under the Excess Application Facility will
be met in full, in part or at all.
Liberum, in consultation with Zeus Capital and the Company,
reserves the right to alter the relative sizes of the Firm Placing
and the Placing and Open Offer.
Terms used in this announcement and not defined in Appendix I to
this announcement shall have the meaning given to them in the
Prospectus. Appendix II to this announcement sets out the terms and
conditions of the Firm Placing and Placing.
Expected indicative timetable Time and date
(abridged)
Record Date for Open Offer 6.00 p.m. on 5
Entitlements and Excess Open December 2017
Offer Entitlements under the
Open Offer
Ex-entitlement date for the 7 December 2017
Open Offer
Publication of Prospectus, 8 December 2017
the Application Form and Form
of Proxy
Latest time and date for receipt 10.30 a.m. on
of Forms of Proxy / CREST 2 January 2018
Proxy Instructions
Latest time and date for receipt 11.00 a.m. on
of completed Application Forms 2 January 2018
and payment in full under
the Open Offer or settlement
or relevant CREST instructions
(as appropriate)
Announcement of results of 3 January 2018
Capital Raising through a
Regulatory Information Service
General Meeting of Xafinity 10.30 a.m. on
plc 4 January 2018
Admission of the Capital Raising 8.00 a.m. on 5
Shares and commencement of January 2018
dealings
Admission of the Completion 8.00 a.m. on 11
Shares and commencement of January 2018
dealings
Date of Completion 11 January 2018
Issue of Earn Out Shares (if following publication
any) of 2019 Xafinity
Accounts
For further information please contact:
Xafinity plc +44 (0) 118
Paul Cuff, Co-CEO 918 5110
Deloitte LLP (Sponsor and Financial +44 (0) 20
Adviser) 7936 3000
Byron Griffin
Chris Nicholls
Peter Stewart
Zeus Capital Limited (Joint Bookrunner +44 (0) 20
and Sole Broker) 3829 5000
Martin Green
Pippa Underwood
John Goold
Liberum Capital Limited (Joint
Bookrunner and Sole Underwriter)
Richard Crawley
Robert Morton +44 (0) 20
Cameron Duncan 3100 2000
Camarco
Ed Gascoigne-Pees +44 (0) 20
Nick Hennis 3757 4980
Notes to Editors
Xafinity is a UK specialist in pensions actuarial, consulting
and administration, providing a wide range of services to over 550
pension scheme clients. The Company combines expertise, insight and
technology to address the needs of both pension trustees and
sponsoring companies. The Xafinity Group has more than 400
employees, of which approximately 90 per cent are client facing,
with offices in Reading, Leeds, Stirling, Belfast, London and
Manchester providing it with access to staff, expertise and clients
in geographic locations across the UK.
IMPORTANT NOTICE
This announcement is an advertisement and does not constitute a
prospectus or prospectus equivalent document. Nothing in this
announcement should be interpreted as a term or condition of the
Capital Raising. Investors should not subscribe for or purchase any
New Ordinary Shares except on the basis of the information
contained in the Prospectus expected to be published tomorrow or
otherwise incorporated by reference into the Prospectus. The
Prospectus, when published, will be made available on the Company's
website (www.xafinity.com) and be available for inspection during
normal business hours on any day (except Saturdays, Sundays and
bank holidays in England and Wales) free of charge at the offices
of Macfarlanes LLP, 20 Cursitor Street, London EC4A 1LT, from the
date of this announcement to the date one month from the date of
Admission of the Completion Shares.
This announcement does not constitute or form part of any offer
or invitation to purchase, or otherwise acquire, subscribe for,
sell, otherwise dispose of or issue, or any solicitation of any
offer to sell, otherwise dispose of, issue, purchase, otherwise
acquire or subscribe for, any security in the capital of the
Company in any jurisdiction.
The information contained in this announcement is not for
release, publication or distribution to persons in the United
States, Australia, Canada, Japan or the Republic of South Africa or
in any jurisdiction where to do so would breach any applicable law.
The New Ordinary Shares have not been and will not be registered
under the securities laws of such jurisdictions and may not be
offered, sold, taken up, exercised, resold, renounced, transferred
or delivered, directly or indirectly, within such jurisdictions
except pursuant to an exemption from and in compliance with any
applicable securities laws. No public offer of the New Ordinary
Shares is being made by virtue of this announcement in or into the
United States, Australia, Canada, Japan or the Republic of South
Africa or any other jurisdiction outside the United Kingdom in
which such offer would be unlawful. No action has been or will be
taken by the Company, the Directors, Deloitte, Zeus Capital or
Liberum, or any other person to permit a public offering or
distribution of this announcement or any other offering or
publicity materials or the New Ordinary Shares in any jurisdiction
where action for that purpose may be required, other than in the
United Kingdom.
THIS ANNOUNCEMENT DOES NOT CONTAIN OR CONSTITUTE AN OFFER FOR
THE SOLICITATION OF AN OFFER TO PURCHASE SECURITIES IN THE UNITED
STATES. THE SECURITIES REFERRED TO HEREIN HAVE NOT BEEN AND WILL
NOT BE REGISTERED UNDER THE US SECURITIES ACT, OR WITH ANY
SECURITIES REGULATORY AUTHORITY OF ANY STATE OF THE UNITED STATES
OR OTHER JURISDICTION AND MAY NOT BE OFFERED, SOLD, RESOLD,
TRANSFERRED OR DELIVERED WITHIN THE UNITED STATES EXCEPT PURSUANT
TO AN EXEMPTION FROM OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE US SECURITIES ACT AND IN
COMPLIANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OR
OTHER JURISDICTION OF THE UNITED STATES. THERE WILL BE NO PUBLIC
OFFER OF SECURITIES IN THE UNITED STATES.
This announcement has been issued by, and is the sole
responsibility of, the Company.
Deloitte Corporate Finance, a division of Deloitte LLP
("Deloitte"), has been appointed as sponsor and financial adviser
to the Company. Deloitte is authorised and regulated in the United
Kingdom by the FCA in respect of regulated activities and is acting
exclusively for the Company and no one else in connection with the
transactions and arrangements described in this announcement.
Deloitte will not regard any other person (whether or not a
recipient of this announcement) as a client in relation to the
transactions and arrangements described in this announcement and
will not be responsible for providing the protections afforded to
Deloitte's clients nor for giving advice in relation to the
contents of this announcement or the transactions and arrangements
described in this announcement. Deloitte is not responsible for the
contents of this announcement.
Zeus Capital Limited ("Zeus Capital") has been appointed as
joint bookrunner and sole broker to the Company. Zeus Capital is
authorised and regulated in the United Kingdom by the FCA and is
acting exclusively for the Company and no one else in connection
with the transactions and arrangements described in this
announcement. Zeus Capital will not regard any other person
(whether or not a recipient of this announcement) as a client in
relation to the transactions and arrangements described in this
announcement and will not be responsible for providing the
protections afforded to Zeus Capital's clients nor for giving
advice in relation to the contents of this announcement or the
transactions and arrangements described in this announcement. Zeus
Capital is not responsible for the contents of this
announcement.
Liberum Capital Limited ("Liberum") has been appointed as joint
bookrunner and sole underwriter to the Company. Liberum is
authorised and regulated in the United Kingdom by the FCA and is
acting exclusively for the Company and no one else in connection
with the transactions and arrangements described in this
announcement. Liberum will not regard any other person (whether or
not a recipient of this announcement) as a client in relation to
the transactions and arrangements described in this announcement
and will not be responsible for providing the protections afforded
to Liberum's clients nor for giving advice in relation to the
contents of this announcement or the transactions and arrangements
described in this announcement. Liberum is not responsible for this
announcement.
This announcement has been prepared for the purposes of
complying with the applicable laws and regulations of the United
Kingdom 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 of the United Kingdom.
Note regarding forward-looking statements:
This announcement includes statements that are, or may be deemed
to be, forward-looking statements. These forward-looking statements
can be identified by the use of forward-looking terminology,
including the terms anticipates, believes, estimates, expects,
intends, may, plans, projects, should or will, or, in each case,
their negative or other variations or comparable terminology, or by
discussions of strategy, plans, objectives, goals, future events or
intentions. These forward-looking statements include all matters
that are not historical facts. They appear in a number of places
throughout this announcement and include, but are not limited to,
statements regarding the Company's and/or Directors' intentions,
beliefs or current expectations concerning, amongst other things,
the Group's results of operations, financial position, prospects,
growth, strategies and expectations for the pensions actuarial,
consulting and administration market.
Any forward-looking statements in this announcement reflect the
Company's current view with respect to future events and are
subject to risks relating to future events and other risks,
uncertainties and assumptions relating to the Group's operations,
results of operations and growth strategy. Investors should
specifically consider the factors identified in this announcement
which could cause actual results to differ before making an
investment decision. Subject to the requirements of the Prospectus
Rules, the Disclosure Requirements, the Transparency Rules and the
Listing Rules, none of the Company, the Directors, Deloitte, Zeus
Capital and Liberum undertakes any obligation publicly to release
the result of any revisions to any forward-looking statements in
this announcement that may occur due to any change in the Company's
expectations or to reflect events or circumstances after the date
of this announcement. Past performance of the Company is not
necessarily indicative of future performance.
You are advised to read this announcement and, once available,
the Prospectus and the information incorporated by reference
therein, in their entirety for a further discussion of the factors
that could affect the Company's, the Group's or the Target Group's
future performance, and the industries in which they operate. In
light of these risks, uncertainties and assumptions, the events
described in the forward-looking statements in this announcement
may not occur.
Neither the content of the Company's website (or any other
website) nor any website accessible by hyperlinks on the Company's
website (or any other website) is incorporated in, or forms part
of, this announcement.
Any person receiving this announcement is advised to exercise
caution in relation to the Capital Raising. If in any doubt about
any of the contents of this announcement, independent professional
advice should be obtained.
This summary should be read in conjunction with the full text of
the announcement which follows.
Xafinity plc
Proposed Acquisition of Punter Southall Holdings Limited for up
to GBP153 million
and
Firm Placing and Placing and Open Offer to raise GBP70
million
1 Introduction
1.1 The Acquisition
Xafinity has today announced that it has entered into the
Acquisition Agreement with Punter Southall Group Limited ("PS
Topco") to acquire Punter Southall Holdings Limited ("Target
Holdco"), the holding company of the Target Group. The Company will
also acquire certain minority interests in the Target Group
pursuant to the Acquisition.
The Acquisition Agreement is conditional and provides for a
total consideration of up to approximately GBP153 million. It is
currently anticipated that completion of the Acquisition in
accordance with the terms of the Acquisition Agreement
("Completion") will occur on or around 11 January 2018.
The consideration due under the Acquisition Agreement will be
satisfied through:
-- a payment of GBP92,520,000 in cash;
-- the issue of 25,766,871 Completion Shares (valued, for the
purposes of the Acquisition, at 163 pence per Completion Share,
being approximately GBP42 million in aggregate), representing
approximately 12.6 per cent of the Company's Enlarged Share Capital
following the completion of the Capital Raising and Completion;
-- the transfer (pursuant to the Disposal Agreement) by Xafinity
Consulting to PS Topco of the entire issued share capital of HR
Trustees at an agreed value, for the purposes of such transfer, of
GBP8,480,000; and
-- the issue of up to 6,134,969 Earn Out Shares (valued, for the
purposes of the Acquisition, at the same price per share as the
Completion Shares, being a maximum of approximately GBP10 million
in aggregate) following Completion, pursuant to a contingent
deferred consideration mechanism.
The consideration is subject to a post-Completion adjustment,
the quantum of which will be calculated by reference to the net
working capital position and the cash and debt positions of,
respectively, the Target Group and HR Trustees.
The cash component of the consideration is proposed to be
financed by a combination of (a) the Firm Placing and Placing and
Open Offer to raise in aggregate approximately GBP70 million
(before expenses) and (b) funds drawn down under the New Debt
Facilities totalling GBP80 million (which replaces an existing debt
facility of GBP38 million and will provide GBP42 million of
incremental debt capacity). If the Capital Raising does not proceed
then the Acquisition will not proceed.
Part of the consideration, comprising the Earn Out Shares, is
both contingent and deferred. PS Topco's and the Minority Sellers'
respective entitlements to Earn Out Shares, if any, will be
calculated by reference to the 2019 Xafinity Accounts.
HR Trustees is the operating company of the Xafinity Group's
non-core independent trustee business. The Disposal is (pursuant to
the Disposal Agreement) conditional, and completion thereof will
occur immediately, upon Completion. Further information on the
Disposal is set out at below.
Following Completion, certain Acquisition Share Awards will be
made under the Xafinity PSP to current Target Group employees. The
Acquisition Share Awards will be made in two tranches, with the
first tranche to be made as soon as practicable after Completion.
The first tranche of the Acquisition Share Awards (relating to
1,533,742 Ordinary Shares) are proposed to have no performance
conditions and to be excluded for the purposes of the dilution
limits in rule 3.1 of the Xafinity PSP and rule 5.2 of the Xafinity
Sharesave Plan. Accordingly, Resolution 5, to be proposed at the
General Meeting, seeks Shareholders' consent to amend the Rules of
the Xafinity PSP and the Rules of the Xafinity Sharesave Plan for
this purpose.
In the immediate term, the Group's and Target Group's businesses
will continue to trade under their current brands, in each case
with a tagline of "Part of Xafinity Punter Southall". The Directors
have set a target of April 2018 for a decision to be reached on the
future branding strategy for the Enlarged Group.
The Board believes that the Acquisition represents a compelling
and highly attractive opportunity to create a new leading
mid-market player in the provision of actuarial, investment
advisory and administration services, with the potential to
challenge and more effectively compete with the Global
Consultancies. For further information on the background to, and
reasons for, the Acquisition, see paragraph 2, below.
1.2 The Target Group
The Target Group, which operates across nine UK offices and has
approximately 450 employees, comprises three businesses: (i) the
Actuarial Consulting Business, (ii) the Pensions Administration
Business and (iii) the Investment Consulting Business. These
businesses can be summarised as follows:
-- The Actuarial Consulting Business provides actuarial advice
to the trustees or employer sponsors of approximately 425 UK
occupational pension schemes.
-- The Pensions Administration Business administers pensions for
approximately 380,000 scheme members belonging to more than 200 UK
occupational pension schemes.
-- The Investment Consulting Business provides specialist
consulting services, including investment strategy, risk management
and investment governance, to the trustees or employer sponsors of
over 115 UK occupational pension schemes.
The Target Group reported revenue for the year ended 31 December
2016 of approximately GBP51 million and Adjusted EBITDA of
approximately GBP11 million.
The Xafinity Directors believe that the two groups' comparable
actuarial, investment consulting and administration businesses,
each of which has a strong market reputation, a diversified client
base, long-standing client relationships and a collegiate employee
culture, are very well suited to a combination within the Enlarged
Group.
1.3 The Capital Raising
As more fully described below, the Company proposes to undertake
the Capital Raising to raise gross proceeds of approximately GBP70
million, the net proceeds of which will be used to fund (together
with the funds from the New Debt Facilities) the cash component of
the consideration payable under the Acquisition Agreement and the
associated transaction fees.
The Capital Raising comprises the issue of, in aggregate,
41,176,470 Capital Raising Shares at an Offer Price of 170 pence
per share. The Firm Placing Shares have been conditionally placed
with institutional and other investors by the Joint Bookrunners.
The Open Offer Shares have been conditionally placed with
institutional and other investors by the Joint Bookrunners, subject
to clawback to satisfy valid applications by Qualifying
Shareholders under the Open Offer.
The Capital Raising is being fully underwritten by Liberum,
subject to, and in accordance with, the terms and conditions of the
Sponsor and Placing Agreement.
The Offer Price represents a discount of 1.7 per cent to the
Closing Price of 173.0 pence per Ordinary Share on 6 December 2017
(being the last Business Day before the announcement of the Capital
Raising). The Capital Raising is conditional, among other things,
on the approval of the Acquisition and related matters at the
General Meeting.
While the Capital Raising will not proceed if the Acquisition
Agreement has been terminated before Admission of the Capital
Raising Shares, the Capital Raising is not conditional upon
Completion. In the event that the Capital Raising proceeds but the
Acquisition does not complete, the Xafinity Directors' current
intention is that the proceeds of the Capital Raising which were to
be used to fund the cash consideration payable under the
Acquisition and to pay the expenses of the Acquisition will be
invested on a short-term basis, and the balance of the proceeds
will be applied in reducing the Group's net debt, while the
Xafinity Directors evaluate other appropriate acquisition
opportunities. If no appropriate opportunities can be found on
acceptable terms, the Xafinity Directors will consider how best to
return surplus capital to Shareholders. Such a return could result
in certain costs and complexities such that any return of capital
may be less than the amount subscribed for in the Capital Raising.
The Xafinity Directors would expect to effect such a return within
12 months of the Acquisition failing to complete, if no appropriate
opportunities to use funds can be found.
Applications will be made for the Capital Raising Shares to be
admitted to the premium segment of the Official List and to trading
on the London Stock Exchange's Main Market (together "Admission of
the Capital Raising Shares"). It is expected that Admission of the
Capital Raising Shares will become effective and that dealings in
the Capital Raising Shares will commence at 8.00 a.m. on 5 January
2018. Additionally, applications will be made for the Completion
Shares to be admitted to the premium segment of the Official List
and to trading on the London Stock Exchange's Main Market
(together, "Admission of the Completion Shares"). It is expected
that Admission of the Completion Shares will become effective and
that dealings in Completion Shares will commence at 8.00 a.m. on 11
January 2018.
1.4 The New Debt Facilities
On 7 December 2017 the Company's existing debt facilities
(pursuant to the Existing Facilities Agreement) were amended and
restated to increase the aggregate facilities available thereunder
to GBP80 million of committed facilities to be advanced by certain
lenders, including HSBC Bank plc and The Governor and Company of
the Bank of Ireland.
The New Debt Facilities comprise two revolving credit
facilities: "Facility A" and "Facility B". Subject to the terms of
the Amended Facilities Agreement, Facility A is available for
drawing in a maximum aggregate amount of GBP38 million and Facility
B is available for drawing in a maximum aggregate amount of GBP42
million.
Facility A may be utilised for the purpose of funding the
general corporate and working capital purposes of the Group,
including, but not limited to, the refinancing of any existing
financial indebtedness of the Group. Facility B may be utilised for
the financing of or payment of any costs, expenses and fees in
connection with the Acquisition. Thereafter, Facility B may be used
for the same purpose as Facility A.
The Amended Facilities Agreement also provides the Company with
the ability to request (on an uncommitted basis) that the total
commitments thereunder be increased by a further GBP20 million.
1.5 The Proposed Directors
The Board currently comprises four Executive Directors and three
Non-Executive Directors. It is proposed that, with effect from
Completion, the following individuals will join the Board in the
following roles:
-- John Batting (Executive Director)
-- Jonathan Punter (Non-Executive Director)
Jonathan Punter is currently a director of PS Topco and John
Batting is one of the Minority Sellers.
1.6 Shareholder approval
The Acquisition is of sufficient size relative to the Group to
constitute a Class 1 transaction under the Listing Rules, and is
therefore conditional, among other things, on the approval of all
of the Resolutions by the Shareholders at the General Meeting to be
held at 10.30 a.m. on 4 January 2018. Although the Disposal is
conditional on Completion, it does not, of itself, require the
approval of Shareholders.
2 Background to and reasons for the Acquisition, the Disposal and the Capital Raising
2.1 The Acquisition
The Xafinity Directors believe that the Target Group's business
is highly complementary to Xafinity's. The overall market for the
provision of actuarial, investment and administrative services to
UK DB Schemes can be segmented broadly into three categories: (i)
the "big three" (namely, the Global Consultancies); (ii) the
mid-market (which currently includes both the Xafinity Group and
the Target Group); and (iii) the smaller regional market.
The Acquisition represents an opportunity for Xafinity to
progress its strategy of consolidating the mid-market in actuarial,
investment and administrative services to trustees and sponsors of
UK DB Schemes, by creating a new leading player with increased
capability to challenge the Global Consultancies.
The Xafinity Directors believe that, as a result of the
Acquisition, the Enlarged Group will benefit from enhanced
opportunities for growth, for the following reasons:
-- The Enlarged Group would have a high profile in the pensions
industry, which the Board believes may lead to an increase in the
number of invitations and opportunities received by Xafinity to
tender for services to trustees of DB Schemes for the provision of
actuarial, administration and/or investment consulting services.
The markets in which both the Xafinity Group and the Target Group
operate are fragmented, and some tender opportunities may not be
received by either of them. The Xafinity Directors believe that the
Enlarged Group could have access to a greater proportion of market
opportunities in future by providing a compelling alternative to
the Global Consultancies, by virtue of its increased scale and
profile.
-- The Xafinity Directors believe that a key benefit of the
Acquisition would be to strengthen the overall capabilities of the
Xafinity Group and the Target Group. In the Board's view, Xafinity
has market-leading offerings in certain areas, including de-risking
activity through the Centre of Excellence, in technology (with the
development of "Radar", Xafinity's actuarial and investment
software) and in relation to the DC market with the National
Pension Trust. Xafinity has had success introducing these offerings
to its own client base and, the Xafinity Directors believe, such
services are also likely to be attractive to the Target Group's
clients following Completion. Similarly, there are areas of
expertise within the Target Group that are stronger than Xafinity's
relative capabilities (for example, in the area of pension scheme
administration, where significant growth has been achieved, taking
on some of the largest contracts in the market, and advice on
corporate mergers and acquisitions activity through Punter Southall
Transaction Services). The Xafinity Directors consider that the
Acquisition would enable both firms to 'level up' in such areas
across the Enlarged Group.
-- The Xafinity Directors believe that the Enlarged Group would
be well-placed to benefit from some of the potential outcomes of
the CMA's review of investment consulting activity. This is an area
of the Group's and the Target Group's services where the
significant majority of the market (around 80 per cent) is
concentrated in the Global Consultancies, which the FCA and the CMA
have decided merits investigation for a variety of reasons. The
Xafinity Directors believe that the Enlarged Group, which would be
the largest "pure play" pensions consulting firm in the UK outside
of the Global Consultancies, could benefit from any movement of
clients or business away from the Global Consultancies in this
market, with both the Xafinity and Punter Southall investment
consulting businesses having a good reputation for high quality in
this market.
A key challenge in any merger of "people businesses" is the
cultural fit between the groups. Some members of the senior
management team of Xafinity know the Target Group very well: each
of the Co-Chief Executive Officers of the Xafinity Group previously
worked in the Target Group (Paul Cuff for seven years, Ben Bramhall
for six years), where they both trained and qualified as actuaries
at the beginning of their careers, and have retained strong
relationships with senior staff in the Target Group. The Xafinity
Directors believe that this should be of significant benefit in the
context of integrating the two businesses, and the Xafinity
Directors therefore believe that the post-Acquisition businesses
would be well-placed to succeed in the future.
Furthermore, the deferral of a proportion of the share
consideration due under the Acquisition Agreement (comprising the
Earn Out Shares), and the post-Acquisition shareholding of PS
Group, creates a significant alignment of interests during the
period of integration, with all parties being motivated to seek to
achieve a seamless transition.
2.2 The Disposal
The Disposal represents an opportunity for Xafinity to divest a
non-core business at the same time as undertaking an acquisition
which complements the Group's strategy.
HR Trustees provides professional trustee services to
approximately 100 UK occupational pension schemes. HR Trustees and
Xafinity's consulting business operate independently, to protect
the current Xafinity Group against a potential conflict of interest
that would or could arise if HR Trustees and Xafinity were to share
a client. As such, HR Trustees effectively represents a barrier to
growth for Xafinity, because Xafinity's addressable market is
reduced by HR Trustees' clients. Although this restriction has a
relatively small effect in a comparatively large wider market, it
would become a greater issue if Xafinity and/or HR Trustees were to
grow their market share in future. The Disposal solves this
issue.
Each UK DB Scheme will typically have a number of individual
trustees on its trustee board. Given the increased requirements and
complexity of running a UK DB Scheme, there is an increasing trend
towards pension schemes including at least one professional trustee
on their trustee board. Even where a professional trustee is not
appointed to the trustee board, many pension schemes will use the
services of a professional trustee in certain situations such as
significant ad hoc projects.
After the Disposal, PS Group will have a larger professional
trustee business, as HR Trustees would be merged with the PS
Independent Trustees business. The Enlarged Group would seek to
maintain a good relationship with the PS Independent Trustees
business going forward, and the Xafinity Directors believe that
there could be the potential for future opportunities to provide
services to that business in the future.
2.3 The Capital Raising
The Company is proposing to raise gross proceeds of
approximately GBP70 million by way of the Capital Raising which, in
addition to the funds drawn down under the New Debt Facilities,
will be used to fund the Acquisition (and expenses incurred in
connection with the Acquisition). If the Capital Raising does not
proceed then the Acquisition will not proceed.
The Board considers the Firm Placing, Placing and Open Offer to
be a suitable fundraising structure as it provides Shareholders
with the flexibility to enable them to participate in the Capital
Raising.
The Board believes that undertaking the Capital Raising at the
Offer Price represents an attractive opportunity for the Company to
secure equity funding for the Acquisition, and maintain sufficient
capacity to pursue further growth opportunities that may arise in
the future, whether by way of further acquisitions or through
investment into the Xafinity Group's (or, following Completion, the
Enlarged Group's) existing platform.
3 Financial impact of the Acquisition and use of proceeds
The Board expects the Acquisition to be earnings enhancing for
the Group for the year ending 31 March 2019 and materially earnings
enhancing thereafter. However, no statement in this announcement
should be interpreted to mean that the future earnings per share of
the Enlarged Group will necessarily match or exceed the historical
published earnings per share of the Group.
The Company proposes to use the net proceeds of the Capital
Raising of approximately GBP65.8 million to fund part of the cash
consideration payable under the Acquisition Agreement and the
associated transaction fees, with the balance of such cash
consideration being financed pursuant to one or more drawdowns
under the New Debt Facilities. The cash consideration payable under
the terms of the Acquisition Agreement is GBP92,520,000. The
Company will incur commissions, adviser fees and expenses of
approximately GBP7.4 million in connection with the Acquisition and
the Capital Raising.
Shareholders should note that, while the Capital Raising will
not proceed if the Acquisition Agreement has been terminated before
Admission of the Capital Raising Shares, the Capital Raising is not
conditional upon Completion. After Admission of the Capital Raising
Shares, the Acquisition could fail to complete. In the event that
the Capital Raising proceeds but the Acquisition does not complete,
the Xafinity Directors' current intention is that the proceeds of
the Capital Raising which were to be used to fund the cash
consideration payable under the Acquisition and to pay the expenses
of the Acquisition will be invested on a short-term basis, and the
balance of the proceeds will be applied in reducing the Group's net
debt, while the Xafinity Directors evaluate other appropriate
acquisition opportunities. If no appropriate opportunities can be
found on acceptable terms, the Xafinity Directors will consider how
best to return surplus capital to Shareholders. Such a return could
result in certain costs and complexities such that any return of
capital may be less than the amount subscribed for in the Capital
Raising. The Xafinity Directors would expect to effect such a
return within 12 months of the Acquisition failing to complete, if
no appropriate opportunities to use funds can be found.
4 Summary information on the Xafinity Group and its current trading
4.1 Overview
Xafinity is a pensions actuarial, consulting and administration
business providing a wide range of services to over 550 pension
scheme clients. The Company combines expertise, insight and
technology to address the needs of both pension trustees and
sponsoring companies. The Xafinity Group has more than 400
employees, of which approximately 90 per cent are client facing,
with offices in Reading, Leeds, Stirling, Belfast, London and
Manchester providing it with access to staff, expertise and clients
in geographic locations across the UK.
Xafinity enjoys very high levels of client loyalty with 80 per
cent of the top 20 fee payers having been clients for over 10
years. This, combined with the predictable nature of the activities
carried out by the Xafinity Group, means that a high proportion of
the Xafinity Group's revenues repeat each year.
Xafinity's principal businesses operate in three key markets:
(i) the Xafinity Pensions Advisory and Administration Business and
the HR Trustees business operate primarily in the UK DB market;
(ii) Xafinity's Master Trust platform, called the National Pension
Trust, operates in the UK DC market; and (iii) the SSAS and SIPP
Business operates in the UK SSAS and SIPP services market.
The principal activity of the Company is that of a holding
company for the Xafinity Group. The Company has been listed on the
premium segment of the London Stock Exchange's Main Market since 16
February 2017.
4.2 Current trading and prospects
The Group's performance since 30 September 2017 has remained in
line with the Board's expectations, with a number of new client
wins built on robust trading momentum and delivery of the Company's
strategy to build market share in the pensions advisory sphere. The
revenues from these new client wins are expected to have a positive
incremental effect on the Company through the remainder of the
current financial year. Trading conditions remain strong and, with
a strong pipeline of visible new opportunities, the Board looks
forward to the rest of the financial year with confidence.
5 Summary information on the Target Group and its current trading
5.1 Overview
PS Group was established in 1988 to provide actuarial,
administration and investment consulting services to UK
occupational pension schemes. Two of the founders of PS Group were
Jonathan Punter and Stuart Southall.
The Target Group operates three of the PS Group's key
businesses. They are:
-- the Actuarial Consulting Business, which provides actuarial
advice to the trustees or employer sponsors of approximately 425 UK
occupational pension schemes;
-- the Pensions Administration Business, which administers
pensions for approximately 380,000 scheme members belonging to more
than 200 UK occupational pension schemes; and
-- the Investment Consulting Business, which provides specialist
consulting services, including investment strategy, risk management
and investment governance, to the trustees or employer sponsors of
over 115 UK occupational pension schemes.
The Xafinity Directors believe the Target Group to be a
high-quality business with operations that are very similar in
nature to those of the Xafinity Group.
In the combined historical financial information for the year
ending 31 December 2016, the Target Group reported revenue of
GBP51.0 million, underlying operating profit of GBP10.6 million and
gross assets of GBP26.0 million.
5.2 Current trading and prospects
The Target Group's business, in common with the Xafinity Group,
enjoys a high proportion of revenue which is recurring or
repeatable in nature, as well as a stable employee cost base. Since
31 December 2016, the Target Group has continued to trade in line
with the expectations of the Target Group's management, with
continued revenue growth due to significant new client wins in the
Pensions Administration Business.
6 Summary of the key terms of the Acquisition
6.1 Acquisition Agreement and ancillary documents
In order to implement the Acquisition, the Company and PS Topco
have entered into the Acquisition Agreement. Under the terms of the
Acquisition Agreement, and subject to the conditions thereunder
being satisfied, the Company will (through Xafinity CRL) acquire
Target Holdco (and each of its subsidiaries and subsidiary
undertakings), the Minority Shares and the PL B Shares, in
consideration for (i) aggregate cash consideration of GBP92,520,000
(subject to a post-Completion adjustment mechanism), (ii) the issue
of 25,766,871 Completion Shares (valued at approximately GBP42
million in aggregate), (iii) the transfer (pursuant to the Disposal
Agreement) by Xafinity Consulting to PS Topco of the entire issued
share capital of HR Trustees (valued at GBP8,480,000 for the
purposes of such transfer), and (iv) the issue of up to 6,134,969
Earn Out Shares (attributing a maximum value to such shares for the
purposes of the Acquisition at GBP10 million). The total
consideration is valued at up to approximately GBP153 million.
Completion is conditional, among other things, on: (i) the
Resolutions being passed without amendment; (ii) the Sponsor and
Placing Agreement not being terminated or lapsing in accordance
with its terms prior to Admission of the Capital Raising Shares;
and (iii) the granting by the FCA of approval in relation to the
change of control of PS Investment Consulting, together with
certain other conditions to Completion (including with respect to
the times by which Admission of the Capital Raising Shares and
Admission of the Completion Shares must occur).
6.2 Class 1 transaction approvals
Owing to its size, the Acquisition constitutes a Class 1
transaction for the purposes of the Listing Rules, and therefore
requires approval from Shareholders. Accordingly, a General Meeting
has been convened for 4 January 2018 for the purpose, among other
things, of passing a Resolution approving the Acquisition.
7 Financing the Acquisition
The consideration due under the Acquisition Agreement includes a
cash component, the transfer of the shares in HR Trustees, and the
issue of the Consideration Shares (comprising the Completion Shares
and, if any, the Earn Out Shares).
The cash component of the consideration is proposed to be
financed by a combination of (a) the Firm Placing and Placing and
Open Offer to raise in aggregate approximately GBP70 million
(before expenses) and (b) funds drawn down under the New Debt
Facilities totalling GBP80 million (which replaces an existing debt
facility of GBP38 million and will provide GBP42 million of
incremental debt capacity).
Subject to the satisfaction of the other conditions to
Completion, the Company will apply for the Completion Shares to be
admitted to listing on the premium segment of the Official List and
to trading on the London Stock Exchange's Main Market.
The Completion Shares (and, if applicable, any Earn Out Shares)
will be issued to PS Topco and the Minority Sellers in the
proportions agreed under the Acquisition Agreement. PS Topco's and
the Minority Sellers' holdings of Ordinary Shares will, following
Completion, be subject to the Lock-in Deeds entered into by,
respectively, PS Topco and the Minority Sellers, the Company and
the Joint Bookrunners.
The Completion Shares (and, if any, the Earn Out Shares) will,
when issued and fully paid, rank pari passu in all respects with
the Existing Ordinary Shares (and the Capital Raising Shares),
including the right to receive all dividends or other distributions
declared after the date of their issue. The Completion Shares (and,
if any, the Earn Out Shares) will be in registered form and capable
of being held in certificated form or uncertificated form in
CREST.
Application will be made for the Completion Shares to be
admitted to listing on the premium segment of the Official List and
to trading on the London Stock Exchange's Main Market for listed
securities. It is expected that Admission of the Completion Shares
will become effective at 8.00 a.m. on 11 January 2018.
8 Integration, management and employees following the Acquisition
Xafinity is in the process of finalising a detailed programme to
integrate the Target Group within the equivalent actuarial
consulting, pensions administration and investment consulting
businesses of the Xafinity Group as efficiently as possible. The
Xafinity Directors attach great importance to the skills and
experience of the management and employees of the Target Group, and
believe that they will be an important factor in the success of the
Enlarged Group.
In connection with the Acquisition, the Company and PS Topco
have agreed a Transitional Services Agreement, under which PS Topco
will provide certain IT, finance, human resources, legal and
compliance and facilities management services to the Target Group
for up to two years after Completion. In the year ended 31 December
2016, the Target Group was charged GBP4.3 million by the wider PS
Group in relation to the provision of overhead services support.
This reflected the PS Group's internal charging model. The Target
Group will continue to receive the benefit of overhead services
support pursuant to the Transitional Services Agreement for two
years following Completion and will, pursuant to the terms of the
Transitional Services Agreement, pay up to GBP2.125 million per
annum for such services (subject to additional charges that may be
agreed). This charge was set by reference to the current per capita
cost of the equivalent overheads within the Xafinity Group.
However, the pricing mechanics under the Transitional Services
Agreement should not be considered to be a guide to the cost of
providing such services within the Enlarged Group after the
expiration of the Transitional Services Agreement.
Anticipated additional net costs are estimated by management to
be approximately GBP4 million during the 27 months following
Completion. Such costs are associated with integration and the
Enlarged Group's increased scale as a result of the Acquisition.
Approximately two thirds of such costs relate to integration and
are one-off in nature. The remainder relate to investing in
functional capabilities of the Enlarged Group to ensure adequate
resourcing.
Xafinity's management have developed an integration and business
plan for the acquisition and integration of the Target Group and
are well progressed on both preparation for 'day 1' implementation
from Completion as well as a detailed programme for the business
thereafter. In the immediate term, the Group's and Target Group's
businesses will continue to trade under their current brands, in
each case with a tagline of "Part of Xafinity Punter Southall". The
Directors have set a target of April 2018 for a decision to be
reached on the future branding strategy for the Enlarged Group.
9 Principal terms of the Capital Raising
9.1 Overview
The Company proposes to issue Capital Raising Shares pursuant to
the Capital Raising to raise approximately GBP70 million, before
expenses. The Joint Bookrunners have made arrangements to
conditionally place the Firm Placing Shares with Firm Placees, and
to conditionally place the Open Offer Shares with Placing Placees
subject to clawback to satisfy valid applications by Qualifying
Shareholders under the Open Offer, in each case pursuant to the
Sponsor and Placing Agreement, or failing which, in the case of
Liberum, to subscribe for such Firm Placing Shares or such Open
Offer Shares itself.
The Offer Price was set having regard to the prevailing market
conditions and the size of the Capital Raising. The Offer Price
represents a discount of approximately 1.7 per cent to the Closing
Price of 173.0 per Existing Ordinary Share on 6 December 2017
(being the last Business Day before the announcement of the Capital
Raising).
The Capital Raising is conditional, among other things, on:
-- the Resolutions being passed by the Shareholders at the General Meeting;
-- the Company having complied with its obligations under the
Sponsor and Placing Agreement that fall to be performed on or prior
to Admission of the Capital Raising Shares;
-- the Sponsor and Placing Agreement having become unconditional
in all respects save for the conditions relating to Admission of
the Capital Raising Shares, and not having been terminated in
accordance with its terms;
-- the Acquisition Agreement being entered into, becoming
unconditional in all respects (other than conditions relating to
Admission of the Capital Raising Shares, the Admission of the
Completion Shares and the granting by the FCA of approval in
relation to the change of control of PS Investment Consulting) and
not having been terminated in accordance with its terms;
-- the Amended Facilities Agreement being entered into, becoming
unconditional in all respects (other than customary certain funds
conditions and conditions relating solely to Admission of the
Capital Raising Shares or Completion) and not having been
terminated in accordance with its terms;
-- Admission of the Capital Raising Shares becoming effective by
not later than 8.00 a.m. on 5 January 2018 (or such later time
and/or date as the Joint Bookrunners, the Sponsor and the Company
may agree, being not later than 8.00 a.m. on 19 January 2018);
and
-- in the good faith opinion of the Joint Bookrunners, between
the date of the Sponsor and Placing Agreement and Admission of the
Capital Raising Shares, there having been no material adverse
change in the legal condition or the earnings, management, business
affairs, solvency or prospects of the Group, or of the Enlarged
Group (taken as a whole), whether or not arising in the ordinary
course of business.
The Capital Raising is expected to result in 41,176,470 Capital
Raising Shares being issued (representing approximately 23.1 per
cent of the Enlarged Share Capital immediately following Admission
of the Capital Raising Shares). Subject to Completion, the Capital
Raising Shares will represent approximately 20.2 per cent of the
Enlarged Share Capital immediately following Admission of the
Completion Shares. The issue of the Capital Raising Shares is
subject to the terms and conditions of the Sponsor and Placing
Agreement.
Assuming Completion takes place, the Capital Raising proceeds of
approximately GBP65.8 million (net of expenses) will be applied,
together with the funds drawn down under the New Debt Facilities,
to finance the cash consideration payable under the Acquisition
Agreement, and associated transaction costs.
The Capital Raising Shares will, when issued and fully paid,
rank pari passu in all respects with the Existing Ordinary Shares,
including the right to receive all dividends or other distributions
declared after the date of their issue. The Capital Raising Shares
will be in registered form and capable of being held in
certificated form or uncertificated form in CREST.
Application will be made for the Capital Raising Shares to be
admitted to listing on the premium segment of the Official List and
to trading on the London Stock Exchange's Main Market for listed
securities. It is expected that Admission of the Capital Raising
Shares will become effective and dealings in the Capital Raising
Shares will commence at 8.00 a.m. on 5 January 2018.
9.2 The Firm Placing
The Joint Bookrunners, as agents of the Company, have made
arrangements to conditionally place the Firm Placing Shares with
certain institutional investors at the Offer Price, or failing
which, in the case of Liberum, to subscribe for such Firm Placing
Shares itself, subject to the terms and conditions of the Sponsor
and Placing Agreement.
The Firm Placing will proceed subject to Shareholder approval of
the Resolution to disapply pre-emption rights in relation to the
allotment of the Firm Placing Shares pursuant to the Firm Placing
and to Shareholder approval of the other Resolutions, and subject
to the other conditions of the Capital Raising being satisfied. The
Firm Placing Shares are not subject to clawback, and do not form
part of the Placing and Open Offer.
While the Firm Placing will not proceed if the Acquisition
Agreement has been terminated before Admission of the Capital
Raising Shares, the Firm Placing is not conditional on the
Acquisition proceeding and may proceed even if the Acquisition does
not. In this scenario the Firm Placing would only relate to an
investment in the Group and not an investment in the Enlarged
Group.
The Firm Placing Shares represent approximately 74.4 per cent of
the Capital Raising Shares and approximately 17.2 per cent of the
Enlarged Share Capital immediately following Admission of the
Capital Raising Shares. Subject to Completion, the Firm Placing
Shares will represent approximately 15.0 per cent of the Enlarged
Share Capital immediately following Admission of the Completion
Shares.
9.3 The Open Offer
Qualifying Shareholders are invited, subject to the terms and
conditions of the Open Offer, to subscribe for Open Offer Shares
pro rata to their holdings as at the Record Date at the Offer Price
of 170 pence per share, payable in full in cash on application,
free of all expenses, on the basis of: 1 Open Offer Share for every
13 Existing Ordinary Shares, in each case rounded down to the
nearest whole number of Open Offer Shares.
To the extent that the Open Offer Shares are not taken up by
Qualifying Shareholders under the Open Offer, an equivalent number
of shares will be subscribed by institutional investors pursuant to
the Placing.
Under the Open Offer, Qualifying Shareholders will also be
offered the opportunity to subscribe for Excess Shares in excess of
their Open Offer Entitlements pursuant to the Excess Application
Facility. The Excess Application Facility will comprise Open Offer
Shares that are not taken up by Qualifying Shareholders under the
Open Offer pursuant to their Open Offer Entitlements. Qualifying
Shareholders' applications for Excess Shares will, therefore, be
satisfied only to the extent that corresponding applications by
other Qualifying Shareholders are made for less than their pro rata
Open Offer Entitlements. If there is an over-subscription resulting
from excess applications, allocations in respect of such excess
applications will be scaled-back at the absolute discretion of
Liberum, in consultation with Zeus Capital and the Company, who
will have regard to the pro rata number of Excess Shares applied
for by Qualifying Shareholders under the Excess Application
Facility. No assurances can therefore be given that applications by
Qualifying Shareholders under the Excess Application Facility
will be met in full, in part or at all.
The Open Offer is not a rights issue. Qualifying CREST
Shareholders should note that, although the Open Offer Entitlements
and Excess Open Offer Entitlements will be admitted to CREST and be
enabled for settlement in CREST, the Open Offer Entitlements and
Excess Open Offer Entitlements will not be tradeable or listed and
applications in respect of the Open Offer may only be made by the
Qualifying Shareholder originally entitled or by a person entitled
by virtue of a bona fide market claim raised by Euroclear's Claims
Processing Unit. Qualifying Non-CREST Shareholders should note that
their Application Form is not a negotiable document and cannot be
traded. Qualifying Shareholders should be aware that, in the Open
Offer, unlike in a rights issue, any Open Offer Shares not applied
for under the Open Offer will not be sold in the market or placed
for the benefit of Qualifying Shareholders who do not apply under
the Open Offer, and Qualifying Shareholders who do not apply to
take up their Open Offer Entitlements and/or Excess Open Offer
Entitlements will have no rights under the Open Offer or receive
any proceeds from it.
The Open Offer will proceed, subject to Shareholder approval of
the Resolution to disapply pre-emption rights in relation to the
allotment of the Open Offer Shares pursuant to the Placing and Open
Offer, and to Shareholder approval of the other Resolutions, and
subject to the other conditions of the Capital Raising being
satisfied.
While the Open Offer will not proceed if the Acquisition
Agreement has been terminated before Admission of the Capital
Raising Shares, the Open Offer is not conditional on the
Acquisition proceeding and may proceed even if the Acquisition does
not. In this scenario the Open Offer would only relate to an
investment in the Group and not an investment in the Enlarged
Group.
The Open Offer Shares represent approximately 25.6 per cent of
the Capital Raising Shares and approximately 5.9 per cent of the
Enlarged Share Capital immediately following Admission of the
Capital Raising Shares. Subject to Completion, the Open Offer
Shares will represent approximately 5.2 per cent of the Enlarged
Share Capital immediately following Admission of the Completion
Shares.
The rights attaching to the Open Offer Shares will be uniform in
all respects and will form a single class for all purposes. The
Open Offer Shares are not being made available in whole or in part
to the public except under the terms of the Open Offer. In the
event that the Open Offer does not become unconditional by 8.00
a.m. on 5 January 2018 (or such later time and/or date as the Joint
Bookrunners, the Sponsor and the Company may agree, being not later
than 8.00 a.m. on 19 January 2018), the Open Offer will lapse and
application monies will be returned by post to applicants, at the
applicants' risk and without payment of interest, to the address
set out on the Application Form, within 14 days thereafter.
9.4 The Placing
The Joint Bookrunners, as agents of the Company, have made
arrangements to conditionally place the Open Offer Shares with
institutional investors at the Offer Price, or failing which, in
the case of Liberum, to subscribe for such Open Offer Shares
itself.
The commitments of the Placing Placees are subject to clawback
in respect of valid applications for Open Offer Shares by
Qualifying Shareholders pursuant to the Open Offer.
Subject to waiver or satisfaction of the conditions and the
Sponsor and Placing Agreement not being terminated or lapsing in
accordance with its terms, if valid applications are not received
from Qualifying Shareholders for all of the Open Offer Shares by
11.00 a.m. on 2 January 2018, the number of Open Offer Shares not
so applied for will be subscribed for at the Offer Price by such
Placing Placees pursuant to the Placing or, failing which, will be
subscribed for by Liberum subject to the terms and conditions of
the Sponsor and Placing Agreement.
The Placing will proceed, subject to Shareholder approval of the
Resolution to disapply pre-emption rights in relation to the
allotment of the Open Offer Shares pursuant to the Placing and Open
Offer and to Shareholder approval of the other Resolutions, and
subject to the other conditions of the Capital Raising being
satisfied.
While the Placing will not proceed if the Acquisition Agreement
has been terminated before Admission of the Capital Raising Shares,
the Placing is not conditional on the Acquisition proceeding and
may proceed even if the Acquisition does not. In this scenario the
Placing would only relate to an investment in the Group and not an
investment in the Enlarged Group.
9.5 Effect of the Capital Raising
Immediately following Admission of the Capital Raising Shares,
the Enlarged Share Capital is expected to be 178,072,714 Ordinary
Shares. On this basis, the Capital Raising Shares will represent
approximately 23.1 per cent of the Enlarged Share Capital
immediately following Admission of the Capital Raising Shares.
Subject to Completion, the Capital Raising Shares will represent
approximately 20.2 per cent of the Enlarged Share Capital
immediately following Admission of the Completion Shares.
Qualifying Shareholders who take up their Open Offer
Entitlements under the Open Offer in full (but not any Excess Open
Offer Entitlements) will suffer a maximum dilution of approximately
17.2 per cent to their ownership and voting interests in the
Company. Qualifying Shareholders who do not take up any of their
Open Offer Entitlements under the Open Offer and do not participate
in the Firm Placing or the Placing, and Shareholders who are not
eligible to participate in the Open Offer or in the Firm Placing or
the Placing, will suffer a maximum dilution of approximately 23.1
per cent to their ownership and voting interests in the Company by
virtue of the issue of the Capital Raising Shares pursuant to the
Capital Raising.
The Completion Shares will represent approximately 12.6 per cent
of the Enlarged Share Capital immediately following Admission of
the Completion Shares. The proportion of the Company's share
capital represented by the Earn Out Shares will depend on the
number of Earn Out Shares issued (if any) in accordance with the
Acquisition Agreement, and on the number of Ordinary Shares in
issue at the time of such issue (which would take place following
the publication of the 2019 Xafinity Accounts).
10 Recommendation and voting intentions
The Board considers the Acquisition, the Capital Raising and the
Resolutions to be in the best interests of the Company and its
Shareholders taken as a whole. Accordingly, the Board unanimously
recommends that Shareholders vote in favour of the Resolutions, as
all of the Xafinity Directors intend to do in respect of their own
beneficial shareholdings, amounting to 2,859,692 Ordinary Shares in
aggregate as at the Latest Practicable Date (representing
approximately 2.09 per cent of the Existing Ordinary Shares).
11 Further Information
Further details of the Acquisition and the Capital Raising,
together with a notice convening a General Meeting to consider the
Acquisition and the Capital Raising, will be contained in the
combined class 1 circular and prospectus which is expected to be
sent to Shareholders on or around 8 December 2017.
Expected timetable of principal events
All times are London times. Each of the times and dates stated
in the table below is indicative only and is subject to change. If
any of the times and/or dates below change, the Company will
announce such changes through a Regulatory Information Service.
Time and date
Record Date for Open Offer Entitlements 6.00 p.m. on
and Excess Open Offer Entitlements 5 December 2017
under the Open Offer
Announcement of the Acquisition 7 December 2017
and the Capital Raising
Ex-entitlement date for the 7 December 2017
Open Offer
Publication and posting of the 8 December 2017
Prospectus, the Application
Form and Form of Proxy
Open Offer Entitlements and 8.00 a.m. on
Excess Open Offer Entitlements 11 December 2017
enabled in CREST and credited
to stock accounts of Qualifying
CREST Shareholders in CREST
Recommended latest time for 4.30 p.m. on
requesting withdrawal of Open 22 December 2017
Offer Entitlements and Excess
Open Offer Entitlements from
CREST
Latest time and date for depositing 3.00 p.m. on
Open Offer Entitlements and 27 December 2017
Excess Open Offer Entitlements
into CREST
Latest time and date for splitting 3.00 p.m. on
of Application Forms (to satisfy 28 December 2017
bona fide market claims only)
Latest time and date for receipt 10.30 a.m. on
of Forms of Proxy / CREST Proxy 2 January 2018
Instructions
Latest time and date for receipt 11.00 a.m. on
of completed Application Forms 2 January 2018
and payment in full under the
Open Offer or settlement or
relevant CREST instructions
(as appropriate)
Announcement of results of Capital 3 January 2018
Raising through a Regulatory
Information Service
General Meeting of Xafinity 10.30 a.m. on
plc 4 January 2018
Admission of the Capital Raising 8.00 a.m. on
Shares and commencement of dealings 5 January 2018
Capital Raising Shares credited as soon as practicable
to CREST accounts (uncertificated after Admission
holders only) of the Capital
Raising Shares
Despatch of definitive share no later than
certificates in respect of the 9 January 2018
Capital Raising Shares (where
applicable)
Admission of the Completion 8.00 a.m. on
Shares and commencement of dealings 11 January 2018
Date of Completion 11 January 2018
Issue of Earn Out Shares (if following publication
any) of 2019 Xafinity
Accounts
APPIX I: DEFINITIONS
In this announcement, the following expression have the
following meanings unless the context requires otherwise:
"2019 Xafinity the audited consolidated statement
Accounts" of profit and loss (or income
statement and statement of comprehensive
income) in respect of the Xafinity
Group for the financial year ending
31 March 2019;
"Acquisition" the proposed acquisition of the
entire issued share capital of
Target Holdco, the holding company
of the Target Group, pursuant
to the Acquisition Agreement;
"Acquisition the agreement dated 7 December
Agreement" 2017 between the Company and PS
Topco pursuant to which the Company
conditionally agreed to acquire,
or procure the acquisition through
Xafinity CRL of, the entire issued
share capital of Target Holdco,
the holding company of the Target
Group, the Minority Shares and
the PL B Shares;
"Acquisition the awards over Ordinary Shares
Share Awards" to be granted to certain Target
Group employees following the
Acquisition;
"Actuarial Consulting the actuarial consulting business
Business" of Punter Southall Holdings Limited,
conducted through Punter Southall
Limited, as conducted at the date
of the Prospectus;
"Adjusted EBITDA" profit from operating activities
before depreciation, amortization,
share-based payment costs and
exceptional items;
"Admission of the admission of the Firm Placing
the Capital Shares and the Open Offer Shares
Raising Shares" by the UKLA to listing on the
premium segment of the Official
List and by the London Stock Exchange
to trading on the Main Market;
"Admission of the admission of the Completion
the Completion Shares by the UKLA to listing
Shares" on the premium segment of the
Official List and by the London
Stock Exchange to trading on the
Main Market;
"Amended Facilities the Existing Facilities Agreement
Agreement" as amended and restated on 7 December
2017;
"Board" or "Xafinity the board of directors of Xafinity;
Board"
"Business Day" a day (not being a Saturday, Sunday
or public holiday) on which banks
are generally open for business
in London, United Kingdom;
"Capital Raising" the Firm Placing and the Placing
and Open Offer;
"Capital Raising the Firm Placing Shares and the
Shares" Open Offer Shares;
"certificated" a share or other security (as
or "in certificated appropriate) not in uncertificated
form" form (that is, not in CREST);
"Closing Price" the closing middle market quotation
of an Existing Ordinary Share
as derived from SEDOL;
"Company" or Xafinity plc;
"Issuer" or
"Xafinity"
"Completion" completion of the Acquisition
in accordance with the terms of
the Acquisition Agreement;
"Consideration the Completion Shares and, if
Shares" any, the Earn Out Shares;
"CREST" the computerised settlement system
operated by Euroclear to facilitate
the transfer of title to shares
in uncertificated form;
"CREST Proxy has the meaning given to it in
Instruction" the notes to the Notice of General
Meeting;
"DB" defined benefit;
"DC" defined contribution;
"Deloitte" or Deloitte Corporate Finance, a
"Sponsor" division of Deloitte LLP;
"Directors" the Xafinity Directors and the
Proposed Directors;
"Disposal" the proposed sale of the entire
issued share capital of HR Trustees,
pursuant to the Disposal Agreement;
"Disposal Agreement" the agreement dated 7 December
2017 between PS Topco and Xafinity
Consulting pursuant to which Xafinity
Consulting conditionally agreed
to sell the entire issued share
capital of HR Trustees;
"Earn Out Shares" up to 6,134,969 new Ordinary Shares
proposed to be issued by the Company
after Completion, conditional
upon the deferred consideration
mechanism in the Acquisition Agreement;
"Enlarged Group" the Xafinity Group as enlarged
by the Acquisition and the proceeds
of the Capital Raising (following
Completion, Admission of the Capital
Raising Shares and Admission of
the Completion Shares, as applicable);
"Enlarged Share the Ordinary Shares in issue in
Capital" the capital of the Company following
the Admission of the Capital Raising
Shares and/or the Admission of
the Completion Shares, as the
context requires;
"Excess Application the facility for Qualifying Shareholders
Facility" to apply for Excess Shares in
excess of their Open Offer Entitlements;
"Excess Open in respect of each Qualifying
Offer Entitlements" Shareholder who has taken up his
Open Offer Entitlement in full,
the entitlement (in addition to
the Open Offer Entitlement) to
apply for Excess Shares, up to
the number of Open Offer Shares,
pursuant to the Excess Application
Facility, which may be subject
to scaling-back in accordance
with the terms of the Prospectus;
"Excess Shares" Open Offer Shares which may be
applied for in addition to Open
Offer Shares applied for pursuant
to Open Offer Entitlements;
"Excluded Territories" means each of Australia, Canada,
Japan, South Africa and the United
States, together with any other
jurisdiction where the availability
of the Capital Raising would breach
any applicable laws or regulations
and "Excluded Territory" shall
mean any of them;
"Executive Directors" the executive Directors of the
Company from time to time;
"Existing Facilities the secured credit facility with
Agreement" HSBC Bank plc as sole lender entered
into by the Company and certain
other companies in the Xafinity
Group on 24 January 2017;
"Existing Ordinary the 136,896,244 Ordinary Shares
Shares" in issue at the date of this announcement;
"FCA" the UK Financial Conduct Authority
(or any successor regulatory organisation);
"Firm Placee" means any person that has conditionally
agreed to subscribe for Firm Placing
Shares;
"Firm Placing" means the conditional placing
of the Firm Placing Shares on
the terms and conditions contained
in the Sponsor and Placing Agreement;
"Firm Placing the 30,645,990 new Ordinary Shares
Shares" which are to be issued pursuant
to the Firm Placing;
"FSMA" the Financial Services and Markets
Act 2000, as amended from time
to time;
"General Meeting" the general meeting of the Company
proposed to be held in the Windsor
Room at Phoenix House, 1 Station
Hill, Reading, Berkshire RG1 1NB
at 10.30 a.m. on 4 January 2018,
to approve the Resolutions;
"Global Consultancies" Willis Towers Watson, Mercer and
Aon Hewitt;
"Group" or "Xafinity the Company and its subsidiaries
Group" and subsidiary undertakings;
"HR Trustees" HR Trustees Limited;
"Investment the investment consulting business
Consulting Business" of the Target Group, conducted
through PS Investment Consulting,
as carried on at the date of the
Prospectus;
"Joint Bookrunners" Zeus Capital and Liberum;
"Latest Practicable 5 December 2017;
Date"
"Liberum" Liberum Capital Limited;
"LLP" limited liability partnership;
"London Stock London Stock Exchange plc (or
Exchange" any successor organisation);
"Main Market" the London Stock Exchange's Main
Market for listed securities;
"Minority Sellers" means John Batting, David Watkins
and Richard Thomas;
"New Debt Facilities" the new debt facilities to be
made available pursuant to the
Amended Facilities Agreement;
"New Ordinary the new Ordinary Shares to be
Shares" issued pursuant to the Firm Placing,
the Open Offer or the Acquisition;
"Non-Executive the Directors other than the Executive
Directors" Directors from time to time;
"Offer Price" 170 pence per Capital Raising
Share;
"Official List" the Official List of the UKLA;
"Open Offer" the offer to Qualifying Shareholders
constituting an offer to apply
for the Open Offer Shares at the
Offer Price on the terms and subject
to the conditions set out in the
Prospectus and, in the case of
the Qualifying Non-CREST Shareholders,
the Application Form;
"Open Offer the pro rata entitlement of Qualifying
Entitlement" Shareholders to subscribe for
1 Open Offer Share for every 13
Existing Ordinary Shares registered
in their name as at the Record
Date, on and subject to the terms
of the Open Offer;
"Open Offer the 10,530,480 New Ordinary Shares
Shares" to be offered to Qualifying Shareholders
pursuant to the Open Offer and
to Placing Placees pursuant to
the Placing;
"Ordinary Shares" the ordinary shares of GBP0.0005
each in the capital of the Company;
"Pensions Administration the pensions administration business
Business" of the Target Group, conducted
through PSAHL and PS Administration
Limited, as carried on at the
date of the Prospectus;
"Punter Southall the pensions transactions advice
Transaction business of the Target Group;
Services"
"PL B Shares" the four B ordinary shares of
GBP0.01 each in the capital of
Punter Southall Limited;
"Placee" a Firm Placee and/or a Placing
Placee;
"Placing" the conditional placing of the
Open Offer Shares at the Offer
Price to Placees in accordance
with the terms of the Sponsor
and Placing Agreement, subject
to clawback to satisfy valid applications
by Qualifying Shareholders under
the Open Offer;
"Placing Placee" any person who has agreed or shall
agree to subscribe for Open Offer
Shares pursuant to the Placing,
subject to clawback to satisfy
valid applications by Qualifying
Shareholders under the Open Offer;
"Proposed Directors" John Batting and Jonathan Punter,
who it is proposed will be appointed
to the Xafinity Board with effect
from Completion;
"PS Group" PS Topco and its subsidiary undertakings
(including, prior to Completion,
the Target Group);
"PS Topco" Punter Southall Group Limited;
"PSAHL" PS Administration Holdings Limited;
"PS Investment Punter Southall Investment Consulting
Consulting" Limited;
"Qualifying holders of Ordinary Shares on
Shareholders" the register of members of the
Company at the Record Date, excluding
Overseas Shareholders with a registered
address, or which are resident,
in any Excluded Territory;
"Record Date" 6.00 p.m. on 5 December 2017;
"Regulation Regulation D under the US Securities
D" Act;
"Regulation Regulation S under the US Securities
S" Act;
"Resolutions" the resolutions set out in the
Notice of General Meeting;
"SEDOL" the London Stock Exchange Daily
Official List;
"Shareholder" a holder of Ordinary Shares from
time to time;
"Sponsor and the conditional sponsor and placing
Placing Agreement" agreement dated 7 December 2017
entered into between the Company,
Deloitte, Zeus Capital and Liberum;
"Target Group" Target Holdco and its subsidiaries
and subsidiary undertakings as
at the date of the Prospectus;
"US Securities the US Securities Act of 1933,
Act" as amended;
"UK Defined defined benefit schemes in the
Benefit Schemes" United Kingdom;
or "UK DB Schemes"
"UK Listing the FCA in its capacity as the
Authority" or competent authority for the purpose
"UKLA" of Part VI of FSMA;
"United Kingdom" the United Kingdom of Great Britain
or "UK" and Northern Ireland;
"Xafinity Directors" the directors of Xafinity at the
date of this announcement, whose
names are set out in the Prospectus;
and
"Zeus Capital" Zeus Capital Limited.
Appendix II: Terms and Conditions of the Firm Placing and the Placing Issue
1 Introduction
Participation in the Firm Placing and/or the Placing is only
available to persons who are invited to participate by the Joint
Bookrunners. These terms and conditions apply to persons making an
offer to subscribe for Firm Placing Shares under the Firm Placing
and/or Open Offer Shares under the Placing. The Placee hereby
agrees with the Joint Bookrunners and the Company to be bound by
these terms and conditions as being the terms and conditions upon
which Firm Placing Shares will be sold under the Firm Placing and
Open Offer Shares will be sold under the Placing (as applicable). A
Placee shall, without limitation, become so bound if Liberum
confirms its allocation (either orally or in writing including by
way of email) of Firm Placing Shares under the Firm Placing and/or
Open Offer Shares under the Placing (as applicable) to such
Placee.
Upon being notified of its allocation of Firm Placing Shares
under the Firm Placing and/or Open Offer Shares under the Placing
and Open Offer (the "Placing Commitment"), a Placee shall, subject
to the provisions (relating to clawback of the Open Offer Shares)
of paragraph 6, below, with respect to the Open Offer Shares
allocated to such Placee, be contractually committed to acquire the
number of Firm Placing Shares and/or Open Offer Shares allocated to
them and, to the fullest extent permitted by law, will be deemed to
have agreed not to exercise any rights to rescind or terminate or
otherwise withdraw from such commitment. Dealing may not begin
before any notification is made.
2 Agreement to Acquire Firm Placing Shares and/or Open Offer Shares
The Capital Raising is conditional upon the Sponsor and Placing
Agreement becoming unconditional in all respects by 8.00 a.m. on 5
January 2018 (or such later time and/or date as the Joint
Bookrunners, the Sponsor and the Company, respectively, may agree,
being not later than 8.00 a.m. on 19 January 2018) and the Sponsor
and Placing Agreement not being terminated or lapsing in accordance
with its terms.
The Joint Bookrunners' and Deloitte's obligations under the
Sponsor and Placing Agreement are conditional on, among other
things:
(a) the Resolutions being passed by the Shareholders at the General Meeting;
(b) the Company having complied with its obligations under the
Sponsor and Placing Agreement that fall to be performed on or prior
to Admission of the Capital Raising Shares and which are, in the
reasonable opinion of Deloitte and the Joint Bookrunners, material
in the context of the Capital Raising;
(c) the Acquisition Agreement being entered into, becoming
unconditional in all respects (other than conditions relating to
Admission of the Capital Raising Shares, Admission of the
Completion Shares and the granting by the FCA of approval in
relation to the change of control of PS Investment Consulting) and
not having been terminated in accordance with its terms;
(d) the Amended Facilities Agreement being entered into,
becoming unconditional in all respects (other than customary
certain funds conditions and conditions relating solely to
Admission of the Capital Raising Shares or Completion) and not
having been terminated in accordance with its terms;
(e) Admission of the Capital Raising Shares becoming effective
by not later than 8.00 a.m. on 5 January 2018 (or such later time
and/or date as the Joint Bookrunners, the Sponsor and the Company
may agree, being not later than 8.00 a.m. on 19 January 2018);
and
(f) in the good faith opinion of the Joint Bookrunners and
Deloitte, between the date of the Sponsor and Placing Agreement and
Admission of the Capital Raising Shares, there having been no
material adverse change in the financial, operational or legal
condition or the earnings, management, business affairs, solvency
or prospects of the Group, or of the Enlarged Group (taken as a
whole), whether or not arising in the ordinary course of
business.
Subject to the above conditions, a Placee agrees to become a
Shareholder and agrees to acquire Firm Placing Shares and/or Open
Offer Shares (as applicable) at the Offer Price. The number of Firm
Placing Shares issued to such Placee under the Firm Placing and/or
Open Offer Shares issued to such Placee under the Placing (as
applicable) shall be in accordance with the arrangements described
above, subject to the provisions of paragraph 6, below, with
respect to the Open Offer Shares.
In the event that the Capital Raising does not proceed then the
Acquisition will not proceed. If the Capital Raising proceeds to
Completion, the net proceeds of the Capital Raising will be used to
part fund the consideration payable under the Acquisition Agreement
for the Acquisition. While the Capital Raising will not proceed if
the Acquisition Agreement has been terminated before Admission of
the Capital Raising Shares, the Capital Raising is not conditional
on Completion. If Completion does not occur, the Xafinity Directors
will consider how best to return the net proceeds of the Capital
Raising to Shareholders. Such a return could result in certain
costs and complexities such that any return of capital may be less
than the amount subscribed for in the Capital Raising.
3 Payment for Firm Placing Shares and Open Offer Shares
Each Placee undertakes to pay the Offer Price for each Firm
Placed Share and/or Open Offer Share issued to such Placee in such
manner and on the due time and date as shall be directed by
Liberum. In the event of any failure by a Placee to pay as so
directed by Liberum, the relevant Placee shall be deemed hereby to
have appointed Liberum or any nominee of Liberum as its agent and
to use its reasonable endeavours to sell (in one or more
transactions) any or all of the Firm Placing Shares and Open Offer
Shares in respect of which payment shall not have been made as so
directed and to have agreed to indemnify on demand Liberum in
respect of any liability for UK stamp duty and/or stamp duty
reserve tax arising in respect of any such sale or sales.
The Placee will, however, remain liable for any shortfall below
the aggregate amount owed by such Placee and it may be required to
bear any tax or other charges (together with any interest or
penalties) which may arise upon the sale of such Firm Placing
Shares and/or Open Offer Shares on such Placee's behalf.
In addition, Placees should note that they will be liable for
any capital duty, stamp duty and all other stamp, issue,
securities, transfer, registration, documentary or other duties or
taxes (including any interest, fines or penalties relating thereto)
payable outside the UK by them or any other person on the
acquisition by them of any Firm Placing Shares and/or Open Offer
Shares or the agreement by them to acquire any Firm Placing Shares
and/or Open Offer Shares.
4 Representations and Warranties
By participating in the Firm Placing and/or the Placing, a
Placee (and any person acting on such Placee's behalf) irrevocably
acknowledges, confirms, undertakes, represents, warrants and agrees
(as the case may be) with the Joint Bookrunners and the Company,
the following:
(a) the Placee has read this announcement (including this
appendix) in its entirety and acknowledges that its participation
in the Firm Placing and/or the Placing (as applicable) shall be
made solely on the terms and subject to the conditions set out in
these terms and conditions, the Sponsor and Placing Agreement and
the Articles. Such Placee agrees that these terms and conditions
and the allocation confirmation from Liberum (either orally or in
writing including by way of email) to such Placee represents the
whole and only agreement between the Placee, Liberum and the
Company in relation to the Placee's participation in the Firm
Placing and/or the Placing (as applicable) and supersedes any
previous agreement between any of such parties in relation to such
participation. Accordingly, all other terms, conditions,
representations, warranties and other statements which would
otherwise be implied (by law or otherwise) shall not form part of
these terms and conditions. Such Placee agrees that none of the
Company, the Joint Bookrunners nor any of their respective officers
or directors will have any liability for any such other information
or representation and irrevocably and unconditionally waives any
rights it may have in respect of any such other information or
representation;
(b) the Placee has the power and authority to subscribe for the
Firm Placing Shares under the Firm Placing and/or the Open Offer
Shares under the Placing (as applicable) and to execute and deliver
all documents necessary for such subscription;
(c) the Placee has received this announcement and all such
information as it deems necessary to make an investment decision in
relation to the Firm Placing Shares and/or the Open Offer Shares
and it has made its own assessment of the Firm Placing Shares
and/or the Open Offer Shares and has relied on its own
investigation of the business, financial or other position of the
Company in agreeing to participate in the Firm Placing and/or the
Placing;
(d) the Placee's agreement to subscribe for the Open Offer
Shares under the Placing and/or the Firm Placing Shares under the
Firm Placing (as applicable) is not by way of acceptance of a
public offer made or to be made in this announcement but is by way
of a collateral contract and, accordingly, section 87Q of FSMA does
not entitle it to withdraw its acceptance in the event that the
Company publishes a supplementary prospectus in connection with the
Capital Raising and/or Admission of the Capital Raising Shares.
Without prejudice to such acknowledgement, if the Placee is so
entitled to withdraw, it irrevocably agrees (if applicable) not to
exercise any such rights and to confirm its acceptance of the offer
to participate in the Capital Raising on the same terms immediately
after any such right to withdraw arises;
(e) the Placee understands and accepts that by offering such
Open Offer Shares and/or Firm Placing Shares, neither Joint
Bookrunner is making any recommendations to or advising such Placee
regarding the suitability or merits of any transaction that such
Placee may enter into in connection with the Capital Raising or
otherwise and that such Placee is not, and does not regard itself
as, a client of either Joint Bookrunner or Deloitte in connection
with the Capital Raisings, and that the Joint Bookrunners and
Deloitte are acting solely for the Company in relation to the
Capital Raising, the Acquisition and Admission of the Capital
Raising Shares as set out in this announcement and will not be
responsible to such Placee for providing the protections afforded
to their clients or for advising such Placee on the transactions
and arrangements proposed in this announcement, nor do the contents
or receipt of this announcement constitute the giving of investment
advice by either Joint Bookrunner or Deloitte to such Placee;
(f) these terms and conditions and this announcement are
exclusively the responsibility of the Company and neither Joint
Bookrunner nor Deloitte nor any of their respective affiliates nor
any person acting on its or their behalf will be responsible for or
shall have liability for any information, representation or
statement contained therein and neither Joint Bookrunner nor
Deloitte nor any of their respective affiliates nor any person
acting on its or their behalf will be responsible or liable for a
Placee's decision to accept its Firm Placing Shares and/or Open
Offer Shares;
(g) the Placee has not relied on either Joint Bookrunner nor any
person affiliated with either Joint Bookrunner in connection with
any investigation of the accuracy of any information contained in
this announcement or its investment decision and the Placee has
relied on its own investigation with respect to the Firm Placing
Shares and/or the Open Offer Shares and the Company in connection
with its investment decision;
(h) it has made its own assessment of the Company and the terms
of the Firm Placing and Placing based on this announcement
(including this appendix) and the Company's publicly available
information, such information being all that it deems necessary to
make an investment decision in respect of the Capital Raising
Shares and that it has neither received nor relied on any
information given or representations, warranties or statements made
by either Joint Bookrunner, Deloitte or the Company or any of their
affiliates or any person acting on behalf of any of them and
neither Joint Bookrunner, Deloitte, nor the Company nor any of
their affiliates not any person acting on behalf of any of them
will be liable for any Placee's decision to accept an invitation to
participate in the Firm Placing and/or Placing based on any
information, representation, warranty or statement other than that
contained in this announcement;
(i) neither Joint Bookrunner nor any of their respective
officers, directors and employees shall, save in the event of fraud
on their part (and to the extent permitted by the rules of the FCA)
be liable to Placees for any matter arising out of the role of
either Joint Bookrunner as agent, broker or otherwise in connection
with the Firm Placing and Placing and that where any such liability
nevertheless arises as a matter of law the Placee will immediately
waive any claim against the Zeus Capital Group and the Liberum
Group and any of their respective officers, directors and employees
which it may have in respect thereof. In these terms and
conditions, the expression "Zeus Capital Group" means Zeus Capital
and its ultimate holding company(ies) and all direct and indirect
subsidiary undertakings of such holding company(ies) and "Liberum
Group" means Liberum and its ultimate holding company(ies) and all
direct and indirect subsidiary undertakings of such holding
company(ies);
(j) the Placee has complied with all such laws and such Placee
will not infringe any applicable law as a result of such Placee's
agreement to purchase Firm Placing Shares under the Firm Placing
and/or Open Offer Shares under the Placing (as applicable) and/or
acceptance thereof or any actions arising from such Placee's rights
and obligations under their agreement to purchase Firm Placing
Shares under the Firm Placing and/or Open Offer Shares under the
Placing (as applicable) and/or acceptance thereof or under the
Articles;
(k) the Placee has accepted that its application is irrevocable
and if for any reason it becomes necessary to adjust the expected
timetable as set out in this announcement, the Company will make an
appropriate announcement to a Regulatory Information Service giving
details of the revised dates. In particular, Liberum shall, in
agreement with the Company, Zeus Capital and Deloitte, be entitled
to extend the last time and/or date for applications under the Firm
Placing and/or the Placing, and any such extension will not affect
applications already made, which will continue to be
irrevocable;
(l) to the fullest extent permitted by law, the Placee
acknowledges and agrees to the disclaimers contained in this
announcement and acknowledges and agrees to comply with the selling
restrictions set out in this announcement;
(m) the Firm Placing Shares and Open Offer Shares have not been
and will not be registered under the US Securities Act, or under
the securities legislation of, or with any securities regulatory
authority of, any state or other jurisdiction of the United States
or under the applicable securities laws of any other Excluded
Territories or where to do so may contravene local securities laws
or regulations;
(n) the Placee is either (A) a person located outside the United
States and is subscribing for Firm Placing Shares and/or Open Offer
Shares only in "offshore transactions" as defined in and pursuant
to Regulation S, or (B) within the United States and a QIB within
the meaning of Rule 144A under the US Securities Act and is not
acquiring Firm Placing Shares and/or Open Offer Shares with a view
to the offer, sale, resale, transfer, delivery or distribution,
directly or indirectly, of any Firm Placing Shares or Open Offer
Shares in or into the United States, and has or have executed and
delivered a US investor representation letter substantially in the
form set out in the letter provided to it by the Joint Bookrunners
to the addressees specified therein;
(o) the Placee is not acquiring Firm Placing Shares and/or Open
Offer Shares as a result of any "directed selling efforts" as
defined in Regulation S or as a result of any form of "general
solicitation" or "general advertising" (within the meaning of Rule
502(c) of Regulation D;
(p) the Placee is not a resident of Australia, Canada, Japan,
South Africa or any other jurisdiction where the availability of
the Capital Raising would breach any applicable laws or regulations
and acknowledges that the Firm Placing Shares and the Open Offer
Shares have not been and will not be registered nor will a
prospectus be prepared in respect of the Firm Placing Shares and/or
the Open Offer Shares under the securities legislation of the
United States or any other Excluded Territory and, subject to
certain exceptions, may not be offered or sold, directly or
indirectly, in or into those jurisdictions;
(q) the Placee does not have a registered address in, and is not
a citizen, resident or national of, any jurisdiction in which it is
unlawful to make or accept an offer of the Firm Placing Shares or
Open Offer Shares and it is not acting on a non-discretionary basis
for any such person;
(r) the Placee has not, directly or indirectly, distributed,
forwarded, transferred or otherwise transmitted this announcement
or any other offering materials concerning the Firm Placing or the
Placing to any persons within the United States or any other
Excluded Territory, nor will it do any of the foregoing;
(s) the Placee accepts that if either or both of the Firm
Placing and/or the Placing does not proceed, or the conditions to
the Sponsor and Placing Agreement are not satisfied, or the Firm
Placing Shares or Open Offer Shares for which valid applications
are received and accepted are not admitted to listing on the
premium segment of the Official List and to trading on the London
Stock Exchange's Main Market, for any reason whatsoever, then
neither Joint Bookrunner, nor the Company, nor persons controlling,
controlled by or under common control with any of them nor any of
their respective employees, agents, officers, members,
stockholders, partners or representatives, shall have any liability
whatsoever to it or any other person;
(t) in the case of a person who confirms to Liberum on behalf of
a Placee an agreement to purchase Firm Placing Shares under the
Firm Placing and/or Open Offer Shares under the Placing and/or who
authorises Liberum to notify such Placee's name to the Registrars,
that person represents and warrants that he has authority to do so
on behalf of the Placee;
(u) the Placee is aware of, and has complied with, its
obligations under the Criminal Justice Act 1993, the Market Abuse
Regulation and the Proceeds of Crime Act 2002;
(v) in respect of each person on whose behalf the Placee is
subscribing for Firm Placing Shares and/or Open Offer Shares (i)
the Placee has complied with the customer due diligence measures
required by the Money Laundering Regulations in relation to its
client (and any beneficial owner), (ii) the Placee has complied
fully with all other obligations imposed by the Money Laundering
Regulations, and (iii) the Placee will provide Liberum on demand
with any information it may require for the purposes of its
compliance with the Money Laundering Regulations and any related or
similar rules, regulations or guidelines, issued, administered or
enforced by any government agency having jurisdiction in respect
thereof;
(w) the Placee is not, and is not applying as nominee or agent
for, a person to whom the issue of any Firm Placing Shares and/or
Open Offer Shares (as applicable) would give rise to a liability
under any of sections 67, 70, 93 and 96 of the Finance Act 1986
(depositary receipts and clearance services), and that the Firm
Placing Shares and/or the Open Offer Shares (as applicable) are not
being acquired in connection with arrangements to issue depositary
receipts or to issue or transfer Firm Placing Shares and/or Open
Offer Shares (as applicable) into a clearing system;
(x) the Placee is acting as principal only in respect of the
Firm Placing and/or the Placing or, if it is acting for any other
person: (i) it is duly authorised to do so and has full power to
make the acknowledgments, warranties, representations, undertakings
and agreements herein on behalf of each such person; and (ii) it is
and will remain liable to the Company and/or Liberum for the
performance of all its obligations as a Placee in respect of the
Firm Placing and/or the Placing (regardless of the fact that it is
acting for another person);
(y) if a financial intermediary, as that term is used in Article
3(2) of the Prospectus Directive, represents, warrants and
undertakes that the Firm Placing Shares and/or the Open Offer
Shares purchased by it in the Firm Placing and/or the Placing will
not be acquired on a non-discretionary basis on behalf of, nor will
they be acquired with a view to their offer or resale to, persons
in a Member State of the European Economic Area which has
implemented the Prospectus Directive other than persons who are
"qualified investors" within the meaning of the law in the relevant
Member State implementing Article 2(1)(e)(i), (ii) or (iii) of the
Prospectus Directive (each a "Qualified Investor"), or in
circumstances in which the prior consent of Liberum has been given
to the offer or resale;
(z) the Placee has not offered or sold and will not offer or
sell any Firm Placing Shares and/or Open Offer Shares to persons in
the United Kingdom, except to persons whose ordinary activities
involve them in acquiring, holding, managing or disposing of
investments (as principal or agent) for the purposes of their
business or otherwise in circumstances which have not resulted and
which will not result in an offer to the public in the United
Kingdom within the meaning of section 85(1) of FSMA;
(aa) the Placee has not offered or sold and will not, prior to
Admission of the Capital Raising Shares, offer or sell any Firm
Placing Shares and/or Open Offer Shares to persons in the European
Economic Area except to persons whose ordinary activities involve
them in acquiring, holding, managing or disposing of investments
(as principal or agent) for the purposes of their business or
otherwise in circumstances which have not resulted in and which
will not result in an offer to the public (within the meaning of
the Prospectus Directive) in any member state of the European
Economic Area;
(bb) if the Placee is a resident in a member state of the
European Economic Area (other than the United Kingdom), the Placee
is a Qualified Investor;
(cc) if the Placee is within the United Kingdom, the Placee is
(a) a person falling within (i) Article 19(5) of the Financial
Services and Markets Act 2000 (Financial Promotion) Order 2005 (the
"FPO") or (ii) Article 49(2)(a) to (d) of the FPO, and could, if
they were a client of Liberum, be categorised as a "Professional
Client" or "Eligible Counterparty" within the meaning of Chapter 3
of the FCA's Conduct of Business Sourcebook and undertakes that it
will acquire, hold, manage or dispose of any Firm Placing Shares
and/or Open Offer Shares that are allocated to it for the purposes
of its business or (b) a qualified investor (as that term is
defined in section 86(7) of FSMA) or (c) a person to whom this
announcement may otherwise be lawfully communicated;
(dd) the Placee's participation in the Firm Placing and/or the
Placing and Open Offer will not require it to make a mandatory
offer under Rule 9 of the City Code on Takeovers and Mergers;
(ee) the Placee is not subscribing for Firm Places Shares and/or
Open Offer Shares pursuant to an agreement or understanding
(whether formal or informal) with another person or persons or to
obtain or consolidate control of the Company;
(ff) the Placee has only communicated or caused to be
communicated and will only communicate or cause to be communicated
any invitation or inducement to engage in investment activity
(within the meaning of section 21 of FSMA) relating to the Firm
Placing Shares and/or the Open Offer Shares (as applicable) in
circumstances in which section 21(1) of FSMA does not require
approval of the communication by an authorised person;
(gg) the Placee acknowledges and agrees that no action has been
or will be taken by either the Company or the Joint Bookrunners or
any person acting on behalf of the Company or the Joint Bookrunners
that would, or is intended to, permit a public offer of the Firm
Placing Shares and/or the Open Offer Shares in any country or
jurisdiction where any such action for that purpose is
required;
(hh) the exercise by either Joint Bookrunner or Deloitte of any
rights or discretions under the Sponsor and Placing Agreement shall
be within each of their absolute discretions and the Joint
Bookrunners and Deloitte need not have any reference to any Placee
and shall have no liability to any Placee whatsoever in connection
with any decision to exercise or not to exercise any such right and
each Placee agrees that it shall have no rights against either
Joint Bookrunner or Deloitte or any of their respective directors
or employees under the Sponsor and Placing Agreement;
(ii) the Placee irrevocably appoints any director of Liberum as
its agent for the purposes of executing and delivering to the
Company and/or the Registrars any documents on its behalf necessary
to enable it to be registered as the holder of any of the Firm
Placing Shares and/or Open Offer Shares agreed to be taken up by it
under the Firm Placing and/or the Placing and otherwise to do all
acts, matters and things as may be necessary for, or incidental to,
its acquisition of any Firm Placing Shares and/or Open Offer Shares
in the event of its failure so to do;
(jj) the Placee acknowledges that any money held in an account
with or on behalf of a Joint Bookrunner on behalf of the Placee
and/or any person acting on behalf of the Placee will not be
treated as client money within the meaning of the rules and
regulations of the FCA. The Placee further acknowledges that the
money will not be subject to the protections conferred by the
client money rules. As a consequence, this money will not be
segregated from such Joint Bookrunner's money in accordance with
the client money rules and will be used by such Joint Bookrunner in
the course of their own business and the Placee will rank only as a
general creditor of such Joint Bookrunner;
(kk) the Placee accepts that the allocation of Open Offer Shares
and Firm Placing Shares shall be determined by Liberum in its
absolute discretion, but in consultation with the Company and Zeus
Capital, that Liberum may scale down any commitments for this
purpose on such basis as they may determine;
(ll) except as set out in paragraph (mm), below, represents and
warrants that it has neither received nor relied on any "inside
information" (for the purposes of the Market Abuse Regulation and
section 56 of the Criminal Justice Act 1993) concerning the Company
prior to or in connection with accepting the invitation to
participate in the Firm Placing and/or the Placing and is not
purchasing Firm Placing Shares and/or Open Offer Shares on the
basis of material non-public information;
(mm) if it has received any "inside information" (for the
purposes of the Market Abuse Regulation and section 56 of the
Criminal Justice Act 1993) in relation to the Company and its
securities, it confirms that it has received such information
within the market soundings regime provided for in Article 11 of
the Market Abuse Regulation and associated delegated regulations
and it has not: (i) dealt (or attempted to deal) in the securities
of the Company; (ii) encouraged, recommended or induced another
person to deal in the securities of the Company; or (iii)
unlawfully disclosed inside information to any person, prior to the
information being made publicly available; and
(nn) time shall be of the essence as regards its obligations to
settle payment for the Firm Placing Shares and/or Open Offer Shares
comprised in its Placing Commitment and to comply with its other
obligations under the Firm Placing and/or the Placing.
5 Off-set
(a) If the relevant Placee is also a Qualifying Shareholder and
it applies to subscribe for Open Offer Shares to which it is
entitled under the Open Offer in accordance with its terms, such
Placee can elect to have all or part of the number of Open Offer
Shares (subject to clawback) comprised in its Placing Commitment
reduced by up to the number of Open Offer Shares which it has
validly applied and paid for under the Open Offer ("Off-Set").
(b) If the relevant Placee is also a Qualifying Shareholder and
wishes to take advantage of the Off-Set arrangements, it should
notify Liberum without delay and in any event by 4.30 p.m. on 22
December 2017, in which case Liberum will issue the relevant
instruction form. If the completed instruction form has not been
received by Liberum by 11.00 a.m. on 2 January 2018, the relevant
Placee will be deemed to have waived its right of Off-Set.
(c) By accepting the Placing Commitment, the Placee agrees and
acknowledges that to the extent that other Placees who are
Qualifying Shareholders and who qualify for Off-Set take up Open
Offer Shares under the Open Offer and elect to reduce the number of
Open Offer Shares for which they are obliged to subscribe under
their Placing Commitment, the number of Open Offer Shares subject
to clawback which form part of its Placing Commitment may be
proportionately increased (although it will not exceed the maximum
number of such Placing Shares for which it has agreed to
subscribe).
6 Clawback of Open Offer Shares
The Open Offer Shares to be issued under the Placing are subject
to clawback to satisfy valid applications received from Qualifying
Shareholders under the Open Offer and, at the discretion of Liberum
(in consultation with the Company and Zeus Capital) under the
Excess Application Facility. The number of Open Offer Shares to be
clawed back from Placees will be calculated pro rata to each
Placee's commitment to subscribe for the Open Offer Shares.
7 Miscellaneous
The rights and remedies of each Joint Bookrunner, Deloitte, the
Registrars and the Company under these terms and conditions are in
addition to any rights and remedies which would otherwise be
available to each of them and the exercise or partial exercise of
one will not prevent the exercise of others.
All documents will be sent at the Placee's risk. They may be
sent by post to such Placee at an address notified to the relevant
Joint Bookrunner.
The provisions of these terms and conditions of the Firm Placing
and/or the Placing may be waived, varied or modified as regards
specific Placees or on a general basis by Liberum, in its absolute
discretion, in consultation with the Company and Zeus Capital.
The contract to subscribe for Firm Placing Shares and/or Open
Offer Shares (as applicable) and the appointments and authorities
mentioned herein will be governed by, and construed in accordance
with, English law. For the exclusive benefit of the Joint
Bookrunners, Deloitte, the Company and the Registrars, each Placee
irrevocably submits to the exclusive jurisdiction of the courts of
England and Wales in respect of these matters. This does not
prevent an action being taken against a Placee in any other
jurisdiction. Each Placee waives any objection to proceedings in
the courts of England and Wales on the ground of venue or on the
ground that proceedings have been brought in an inconvenient
forum.
In the case of a joint agreement to subscribe for Firm Placing
Shares and/or Open Offer Shares (as applicable), references to a
"Placee" in these terms and conditions are to each of such Placees,
and such joint Placees' liability is joint and several.
This information is provided by RNS
The company news service from the London Stock Exchange
END
ACQTRBATMBMMMTR
(END) Dow Jones Newswires
December 07, 2017 02:01 ET (07:01 GMT)
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