TIDMARP
RNS Number : 6979D
Towry Holdings Limited
02 February 2015
Not for release, publication or distribution, in whole or in
part, in, into or from any jurisdiction where to do so would
constitute a violation of the relevant laws of such
jurisdiction.
2 February 2015
Recommended Offer
for
Ashcourt Rowan plc ("Ashcourt Rowan")
by
Towry Finance Company Limited ("Towry Finance")
a wholly-owned subsidiary of
Towry Holdings Limited ("Towry")
The Boards of Towry and Ashcourt Rowan are pleased to announce
that they have reached agreement on the terms of a recommended
offer by Towry Finance for the entire issued and to be issued share
capital of Ashcourt Rowan. The Transaction is to be effected by
means of a Court-sanctioned scheme of arrangement under Part 26 of
the Companies Act 2006 (or by the Offer under certain circumstances
described in this document).
Highlights
-- Under the terms of the Transaction, Ashcourt Rowan
Shareholders will be entitled to receive:
for each Ashcourt Rowan Share: 270 pence in cash
plus a principal amount of 5 pence in Loan Notes
-- The cash element of the Transaction Consideration represents:
_ a premium of 60.2 per cent. to the Closing Price of 168.5 pence per Ashcourt Rowan Share on 30 January 2015 (being the last Business Day before this announcement);
_ a premium of 52.7 per cent. to the average Closing Price of
approximately 176.9 pence per Ashcourt Rowan Share for the three
month period ending on 30 January 2015 (being the last Business Day
before this announcement); and
_ a value of approximately GBP97 million for Ashcourt Rowan's
entire issued and to be issued share capital.
-- The Towry and Ashcourt Rowan combination will create a major
player in the UK private wealth market, better able to meet the
needs of, and offer a broader range of services to, clients. Given
the high degree of complementarity between the two businesses, both
Towry's and Ashcourt Rowan's Boards believe that the combination
has a clear strategic and financial rationale. The combination is
expected to be one of the top 20 players in the UK private wealth
market by assets under management.
-- The Ashcourt Rowan Directors, who have been so advised by
Cantor Fitzgerald (as the independent adviser for the purposes of
Rule 3 of the City Code), consider the terms of the Transaction to
be fair and reasonable. In providing its advice Cantor Fitzgerald
has taken into account the commercial assessments of the Ashcourt
Rowan Directors. Accordingly, the Ashcourt Rowan Directors intend
unanimously to recommend that Ashcourt Rowan Shareholders vote in
favour of the resolutions relating to the Transaction at the
Meetings as Jonathan Polin, the only Ashcourt Rowan Director who is
also an Ashcourt Rowan Shareholder, has irrevocably undertaken to
do in respect of his own beneficial holding of 231,645 Ashcourt
Rowan Shares, in aggregate representing approximately 0.65 per
cent. of Ashcourt Rowan's issued share capital on 30 January 2015
(being the last Business Day before this announcement). Further
details of this irrevocable undertaking are set out at paragraph 14
of and Appendix 4 to the full announcement.
-- In addition, certain other Ashcourt Rowan Shareholders have
given irrevocable undertakings to vote in favour of the Scheme in
respect of, in aggregate, 27,642,701 Ashcourt Rowan Shares. On 30
January 2015 (being the last Business Day before this announcement)
these irrevocable undertakings together represented approximately
77.89 per cent. of the existing issued share capital of Ashcourt
Rowan. Further details of these irrevocable undertakings are set
out at paragraph 14 of and Appendix 4 to the full announcement.
-- Subject to obtaining regulatory and other approvals, the
Scheme is expected to become effective within approximately three
months of the date of this Announcement.
-- Ashcourt Rowan provides a range of expert, integrated wealth
management and employee benefits consultancy services for
individuals, families, charities and trusts, business owners and
employers. Ashcourt Rowan manages or has under influence over GBP5
billion in assets, of which GBP2.3 billion are on a discretionary
or managed basis, from 16 offices in the UK with around 340
staff.
-- Towry manages or advises on over GBP6 billion in assets and
is one of the leading firms of wealth advisers in the UK with
around 800 employees serving clients from a national network of
approximately 20 offices. Towry specialises in providing financial
planning and discretionary investment management services to
private individuals including entrepreneurs, business owners,
directors and senior executives with investable assets in excess of
GBP250,000, and has approximately 22,000 clients.
-- Towry is principally owned by funds managed by Palamon
Capital Partners, LP (a leading European private equity partnership
that invests growth capital in European lower mid-market
companies).
-- Commenting on today's announcement, Ron Sandler the Chairman of Towry said:
"The combination of the Towry and Ashcourt Rowan businesses will
bring an exciting opportunity to create one of the largest
companies in the UK private wealth management sector. Our highly
complementary business models will deliver significant client
benefits, providing access to a broader range of services and
investment solutions. Ashcourt Rowan has developed into a high
quality business following a period of reorganisation and with a
strong cultural fit, the combined entity will be well positioned to
take advantage of further growth opportunities as the market
continues to evolve."
-- Commenting on the Transaction, Hugh Ward the Chairman of Ashcourt Rowan said:
"We are pleased that our recent discussions with Towry have been
concluded positively and that the loyalty shown by our shareholders
has been rewarded by this offer for Ashcourt Rowan. Our executive
team has worked tirelessly to execute a recovery of Ashcourt
Rowan's position since joining in late 2011 and effecting the
placing in December 2011. The offer price of 275 pence per Ashcourt
Rowan Share represents a fair price for the business, is a 4.7
times increase in the market capitalisation of the Ashcourt Rowan
Group since 1 December 2011 and is testament to the dedication,
passion and drive of all our staff. I believe that the combined
entity will be well placed on completion to benefit from the growth
dynamics of the wealth management industry over the coming years
and provide an outstanding platform for key professionals in the
sector."
This summary should be read in conjunction with the following
full announcement and the Appendices.
The Transaction will be subject to the Conditions and other
terms set out in this announcement and to the full terms and
conditions which will be set out in the Scheme Document. The terms
of the Loan Notes are set out in Appendix 2 to the full
announcement. Appendix 3 to the full announcement contains bases
and sources of certain information contained in this announcement.
Details of irrevocable undertakings received by Towry are set out
in Appendix 4 to the full announcement. Certain terms used in this
announcement are defined in Appendix 5 to the full
announcement.
Enquiries:
Towry
Rob Devey Tel: (+44) 1344 828292
Morgan Stanley (Financial adviser
to Towry)
Matthew Jarman Tel: (+44) 20 7425 8000
Shirav Patel
Instinctif Partners (Public Relations
adviser to Towry)
Tony Friend Tel: (+44) 20 7457 2020
Nick Woods
Ashcourt Rowan
Jonathan Polin Tel: (+44) 20 7871 7373
Cantor Fitzgerald (Lead financial adviser, Rule 3 adviser, NOMAD and
broker to Ashcourt Rowan)
Rishi Zaveri Tel: (+44) 20 7894 7000
Rick Thompson
Will Goode
Keefe, Bruyette & Woods, a Stifel Company (Financial adviser to Ashcourt
Rowan)
John Paul McGrath Tel: (+44) 20 7663 5400
Stephen Howard
Maitland (Public Relations adviser
to Ashcourt Rowan)
Neil Bennett Tel: (+44) 20 7379 5151
Daniel Yea
Martin Barrow
This announcement is not intended to and does not constitute or
form part of any offer to sell or subscribe for or any invitation
to purchase or subscribe for any securities or the solicitation of
any vote or approval in any jurisdiction pursuant to the
Transaction or otherwise. The Transaction will be made solely
pursuant to the terms of the Scheme Document, which will contain
the full terms and conditions of the Transaction, including details
of how to vote in respect of the Transaction. Any decision in
respect of, or other response to, the Transaction should be made
only on the basis of the information contained in the Scheme
Document.
This announcement does not constitute a prospectus or prospectus
equivalent document.
The release, publication or distribution of this announcement in
jurisdictions other than the United Kingdom may be restricted by
law and therefore any persons who are subject to the laws of any
jurisdiction other than the United Kingdom should inform themselves
about, and observe any applicable requirements. In particular, the
ability of persons who are not resident in the United Kingdom to
vote their Ashcourt Rowan Shares with respect to the Scheme at the
Court Meeting, or to execute and deliver forms of proxy appointing
another to vote at the Court Meeting on their behalf, may be
affected by the laws of the relevant jurisdictions in which they
are located. This announcement has been prepared for the purpose of
complying with English law and the City Code and the information
disclosed may not be the same as that which would have been
disclosed if this announcement had been prepared in accordance with
the laws of jurisdictions outside the United Kingdom.
Copies of this announcement and any formal documentation
relating to the Transaction are not being, and must not be,
directly or indirectly, mailed or otherwise forwarded, distributed
or sent in or into or from any Restricted Jurisdiction and persons
receiving such documents (including custodians, nominees and
trustees) must not mail or otherwise forward, distribute or send it
in or into or from any Restricted Jurisdiction. If the Transaction
is implemented by way of an Offer (unless otherwise permitted by
applicable law and regulation), the Offer may not be made directly
or indirectly, in or into, or by the use of mails or any means or
instrumentality (including, but not limited to, facsimile, e-mail
or other electronic transmission, telex or telephone) of interstate
or foreign commerce of, or of any facility of a national, state or
other securities exchange of any Restricted Jurisdiction and the
Offer may not be capable of acceptance by any such use, means,
instrumentality or facilities.
Notice to US investors in Ashcourt Rowan: the Transaction
relates to the shares of an English company and is being made by
means of a scheme of arrangement provided for under English company
law. A transaction effected by means of a scheme of arrangement is
not subject to the tender offer rules or the proxy solicitation
rules under the US Exchange Act. Accordingly, the Transaction is
subject to the disclosure requirements and practices applicable in
the United Kingdom to schemes of arrangement which differ from the
disclosure requirements of United States tender offer and proxy
solicitation rules. If, in the future, Towry Finance exercises the
right to implement the Transaction by way of a takeover offer and
determines to extend the offer into the United States, the
Transaction will be made in compliance with applicable United
States laws and regulations. Financial information included in this
announcement and the Scheme Document has been or will have been
prepared in accordance with accounting standards applicable in the
United Kingdom that may not be comparable to financial information
of US companies or companies whose financial statements are
prepared in accordance with generally accepted accounting
principles in the United States.
It may be difficult for US holders of Ashcourt Rowan Shares to
enforce their rights and any claim arising out of the US federal
laws, since Ashcourt Rowan and Towry are located in a non-US
jurisdiction, and some or all of their officers and directors may
be residents of a non-US jurisdiction. US holders of Ashcourt Rowan
Shares may not be able to sue a non-US company or its officers or
directors in a non-US court for violations of the US securities
laws. Further, it may be difficult to compel a non-US company and
its affiliates to subject themselves to a US court's judgement.
Morgan Stanley, which is authorised by the Prudential Regulation
Authority and regulated by the FCA and the Prudential Regulation
Authority in the UK, is acting exclusively for Towry and no one
else in connection with the Transaction and will not be responsible
to anyone other than Towry for providing the protections afforded
to clients of Morgan Stanley or for providing advice in relation to
the Transaction or any other matters referred to in this
announcement.
Keefe, Bruyette & Woods which is authorised and regulated by
the FCA in the UK, is acting exclusively for Ashcourt Rowan and no
one else in connection with the Transaction and will not be
responsible to anyone other than Ashcourt Rowan for providing the
protections afforded to clients of Keefe, Bruyette & Woods or
for providing advice in relation to the Transaction or any other
matters referred to in this announcement.
Cantor Fitzgerald which is authorised and regulated by the FCA
in the UK, is acting exclusively for Ashcourt Rowan and no one else
in connection with the Transaction and will not be responsible to
anyone other than Ashcourt Rowan for providing the protections
afforded to clients of Cantor Fitzgerald or for providing advice in
relation to the Transaction or any other matters referred to in
this announcement.
Cautionary Note Regarding Forward-Looking Statements
This announcement contains certain forward-looking statements
with respect to the financial condition, results of operations and
business of Ashcourt Rowan and certain plans and objectives of
Towry with respect thereto. These forward-looking statements can be
identified by the fact that they do not relate only to historical
or current facts. Forward-looking statements often use words such
as "anticipate", "target", "expect", "estimate", "intend", "plan",
"goal", "believe", "hope", "aims", "continue", "will", "may",
"should", "would", "could", or other words of similar meaning.
These statements are based on assumptions and assessments made by
Ashcourt Rowan, and/or Towry in light of their experience and their
perception of historical trends, current conditions, future
developments and other factors they believe appropriate. By their
nature, forward-looking statements involve risk and uncertainty,
because they relate to events and depend on circumstances that will
occur in the future and the factors described in the context of
such forward-looking statements in this document could cause actual
results and developments to differ materially from those expressed
in or implied by such forward-looking statements. Although it is
believed that the expectations reflected in such forward-looking
statements are reasonable, no assurance can be given that such
expectations will prove to have been correct and you are therefore
cautioned not to place undue reliance on these forward-looking
statements which speak only as at the date of this document.
Neither Ashcourt Rowan or Towry assumes any obligation to update or
correct the information contained in this document (whether as a
result of new information, future events or otherwise), except as
required by applicable law.
There are several factors which could cause actual results to
differ materially from those expressed or implied in
forward-looking statements. Among the factors that could cause
actual results to differ materially from those described in the
forward-looking statements are changes in the global, political,
economic, business, competitive, market and regulatory forces,
future exchange and interest rates, changes in tax rates and future
business combinations or dispositions.
Dealing and Opening Position Disclosure Requirements
Under Rule 8.3(a) of the Code, any person who is interested in
one per cent. or more of any class of relevant securities of an
offeree company or of any securities exchange offeror (being any
offeror other than an offeror in respect of which it has been
announced that its offer is, or is likely to be, solely in cash)
must make an Opening Position Disclosure following the commencement
of the offer period and, if later, following the announcement in
which any securities exchange offeror is first identified.
An Opening Position Disclosure must contain details of the
person's interests and short positions in, and rights to subscribe
for, any relevant securities of each of (i) the offeree company and
(ii) any securities exchange offeror(s). An Opening Position
Disclosure by a person to whom Rule 8.3(a) applies must be made by
no later than 3.30 pm (London time) on the 10(th) business day
following the commencement of the offer period and, if appropriate,
by no later than 3.30 pm (London time) on the 10(th) business day
following the announcement in which any securities exchange offeror
is first identified. Relevant persons who deal in the relevant
securities of the offeree company or of a securities exchange
offeror prior to the deadline for making an Opening Position
Disclosure must instead make a Dealing Disclosure. Under Rule
8.3(b) of the Code, any person who is, or becomes, interested in
one per cent. or more of any class of relevant securities of the
offeree company or of any securities exchange offeror must make a
Dealing Disclosure if the person deals in any relevant securities
of the offeree company or of any securities exchange offeror. A
Dealing Disclosure must contain details of the dealing concerned
and of the person's interests and short positions in, and rights to
subscribe for, any relevant securities of each of (i) the offeree
company and (ii) any securities exchange offeror, save to the
extent that these details have previously been disclosed under Rule
8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies
must be made by no later than 3.30 pm (London time) on the business
day following the date of the relevant dealing. If two or more
persons act together pursuant to an agreement or understanding,
whether formal or informal, to acquire or control an interest in
relevant securities of an offeree company or a securities exchange
offeror, they will be deemed to be a single person for the purpose
of Rule 8.3.
Opening Position Disclosures must also be made by the offeree
company and by any offeror and Dealing Disclosures must also be
made by the offeree company, by any offeror and by any persons
acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Takeover Panel's website at www.thetakeoverpanel.org.uk,
including details of the number of relevant securities in issue,
when the offer period commenced and when any offeror was first
identified. If you are in any doubt as to whether you are required
to make an Opening Position Disclosure or a Dealing Disclosure, you
should contact the Panel's Market Surveillance Unit on +44 (0)20
7638 0129.
Information relating to Ashcourt Rowan Shareholders
Please be aware that addresses, electronic addresses and certain
other information provided by Ashcourt Rowan Shareholders, persons
with information rights and other relevant persons for the receipt
of communications from Ashcourt Rowan may be provided to Towry
Finance during the Offer Period as required under Section 4 of
Appendix 4 to the City Code.
Publication on Website
A copy of this announcement will be available free of charge,
subject to certain restrictions relating to persons resident in any
Restricted Jurisdictions, on Towry's website at www.towry.com and
on Ashcourt Rowan's website at www.ashcourtrowan.com by no later
than 12:00 noon (London time) on the Business Day following the
date of this announcement in accordance with Rule 30.4 of the City
Code.
The contents of Towry's websiteand Ashcourt Rowan's websites are
not incorporated into and do not form part of this
announcement.
Ashcourt Rowan Shareholders may request a hard copy of this
announcement by contacting Scott Burns of CMS Cameron McKenna LLP
during business hours on +44 131 228 8000 or by submitting a
request in writing to CMS Cameron McKenna, Saltire Court, 20 Castle
Terrace, Edinburgh EH1 2EN.
Not for release, publication or distribution, in whole or in
part, in, into or from any jurisdiction where to do so would
constitute a violation of the relevant laws of such
jurisdiction.
Recommended Offer
for
Ashcourt Rowan plc
by
Towry Finance Company Limited
a wholly-owned subsidiary of
Towry Holdings Limited
1. Introduction
The Boards of Towry and Ashcourt Rowan are pleased to announce
that they have reached agreement on the terms of a recommended
offer by Towry Finance for the entire issued and to be issued share
capital of Ashcourt Rowan.
2. The Transaction
It is intended that the Transaction will be implemented by way
of a Court-sanctioned scheme of arrangement under Part 26 of the
Companies Act 2006. The purpose of the Scheme is to enable Towry
Finance to acquire the whole of the issued and to be issued share
capital of Ashcourt Rowan. Under the terms of the Scheme, which
will be subject to the Conditions and other terms set out in this
announcement and to further terms to be set out in the Scheme
Document, Ashcourt Rowan Shareholders will receive:
for each Ashcourt Rowan Share: 270 pence in cash
plus a principal amount of 5 pence in Loan Notes
The cash element of the Transaction Consideration
represents:
_ a premium of 60.2 per cent. to the Closing Price of 168.5 pence per Ashcourt Rowan Share on 30 January 2015 (being the last Business Day before this announcement);
_ a premium of 52.7 per cent. to the average Closing Price of
approximately 176.9 pence per Ashcourt Rowan Share for the three
month period ending on 30 January 2015 (being the last Business Day
before this announcement); and
_ a value of approximately GBP97 million for Ashcourt Rowan's
entire issued and to be issued share capital.
The terms of the Loan Notes are set out in Appendix 2 to this
announcement.
In the event that the Transaction is to be implemented by way of
an Offer, the Ashcourt Rowan Shares will be acquired pursuant to
the Offer fully paid and free from all liens, charges, equitable
interests, encumbrances and rights of pre-emption and any other
interests of any nature whatsoever and together with all rights
attaching thereto. Any Ashcourt Rowan Shares transferred to Towry
Finance pursuant to the Scheme will be transferred on the same
basis.
3. Background to and reasons for the Transaction
The combination of the Towry and Ashcourt Rowan businesses will
create a major player in the UK private wealth market in which
clients are demonstrating an increasing demand for advice. Both
entities have a highly complementary offering, given their
planning-led wealth management business models and the combination
will deliver significant client benefits through access to a much
broader range of services and investment solutions. The combination
is expected to be one of the top 20 players in the UK private
wealth market by assets under management.
Ashcourt Rowan has made significant progress with its programme
of reorganisation and change over the last three years. Towry too
has been shaping its future business strategy, restructuring its
infrastructure, building new capability and developing its client
proposition to enable it to take advantage of increasing
opportunity in the market place - both in terms of acquisitions and
organic growth generated by the increased need for advice. The
combination of Ashcourt Rowan and Towry will be a powerful one,
with increased focus on growing a market leading position and
extending the deep-rooted relationships each business already has
with clients, employees and distribution partners.
The combined business will provide the additional scale and
scope to compete effectively in a competitive but growing
marketplace. It will also offer the opportunity to realise further
meaningful cost synergies.
Towry fully recognises the value of Ashcourt Rowan's geographic
footprint with its high quality work force and believes that the
cultural fit between the two businesses is strong. Towry has a
track record of successfully acquiring and integrating businesses,
having acquired twelve companies over the past decade. It is
well-placed to combine responsibly the strengths of the two
companies to benefit clients and take advantage of potential growth
opportunities.
It is anticipated that, following a suitable transition period,
the Enlarged Group will operate under the Towry brand.
Subject to obtaining regulatory and other approvals, the Scheme
is expected to become effective within approximately three months
of the date of this Announcement.
4. Recommendation
The Ashcourt Rowan Directors, who have been so advised by Cantor
Fitzgerald (as the independent adviser for the purposes of Rule 3
of the City Code), consider the terms of the Transaction to be fair
and reasonable. In providing its advice Cantor Fitzgerald has taken
into account the commercial assessments of the Ashcourt Rowan
Directors.
Accordingly, the Ashcourt Rowan Directors intend unanimously to
recommend that Ashcourt Rowan Shareholders vote in favour of the
Scheme (or in the event that the Transaction is implemented by way
of an Offer, to accept or procure acceptance of such offer) as
Jonathan Polin, the only Ashcourt Rowan Director who is also an
Ashcourt Rowan Shareholder, has irrevocably undertaken to do in
respect of his own beneficial holding of 231,645 Ashcourt Rowan
Shares, in aggregate representing approximately 0.65 per cent. of
Ashcourt Rowan's issued share capital.
5. Background to and reasons for recommendation
In the financial year ended 31 March 2011, following a reported
a loss of GBP16.8 million, Ashcourt Rowan commenced a review of
strategy which resulted in a plan to effect some changes to
Ashcourt Rowan's senior management. After conducting a search, the
Ashcourt Rowan Board decided to appoint Jonathan Polin as Group
Chief Executive Officer in September 2011, with a brief to turn
Ashcourt Rowan's fortunes around.
The period following the appointment of Jonathan Polin as Chief
Executive Officer in September 2011 has been one of significant
transformation for the Ashcourt Rowan Group, particularly in terms
of the structure of the management team and the refinement of the
Ashcourt Rowan Group's strategy into one focused on integrated
wealth management. Since his appointment, Jonathan Polin, together
with Ashcourt Rowan's senior management team, has driven a
programme to restructure the business. As a result, the business is
now leaner, scaleable and more focused.
In November 2011, under its new leadership team, Ashcourt Rowan
announced a cash placing to raise GBP8.5 million of gross proceeds
at a price of 100 pence per share by means of a placing of new
shares to new and existing investors in order to strengthen its
balance sheet, improve its regulatory capital position and execute
its redefined strategy.
During the subsequent two years, Ashcourt Rowan made substantial
operating improvements including major cost reductions, moving to a
scaleable, largely outsourced operating platform, disposal of
non-core businesses, alignment of employee incentives with
performance, and hiring of experienced talent.
In recent years there has been a considerable degree of
consolidation in the wealth management and advice sector. In
addition to its organic growth strategy Ashcourt Rowan has actively
pursued an inorganic strategy through acquisitions, with the aim of
further improving profitability by increasing its level of assets
under management under its now scaleable operating platform.
In August 2013 Ashcourt Rowan announced the acquisition of the
assets of Generali Portfolio Management (UK) Limited which added
GBP215 million in assets under management and influence and GBP1.9
million of annual revenue. In December 2013 Ashcourt Rowan
announced its acquisition of UK Wealth Management Limited, which
added GBP1.3 billion of assets under management and influence,
GBP8.8 million of annualised revenues and had associated cost
synergies for the enlarged Ashcourt Rowan Group. Ashcourt Rowan has
also been successful in hiring a number of private client
investment management teams with discretionary and/or advisory
books of business. These initiatives collectively have created a
group which, as at 30 September 2014, had GBP5.3 billion of assets
under management and influence.
Towry is an established wealth management and advice industry
leader with GBP6 billion of assets under management and advice.
Since being acquired by Palamon Capital Partners, LP in 2006 Towry
has completed 12 acquisitions.
Towry's business is in the opinion of the Ashcourt Rowan Board
very similar to Ashcourt Rowan's, albeit further on in its
development and operating at a higher EBITDA margin. Following
discussions between Ashcourt Rowan and Towry, the decision was
taken to create a leading player in the wealth and advisory space
by combining both businesses. The Enlarged Group will have assets
under management and influence of GBP11 billion and pro forma
run-rate revenues of approximately GBP138 million (based on Towry's
management estimates for the 12 month period ending 31 December
2014).
The proposed offer by Towry Finance of 275 pence per Ashcourt
Rowan Share represents an opportunity for Ashcourt Rowan
Shareholders to benefit from the considerable work undertaken by
Jonathan Polin and the new management team since they joined
Ashcourt Rowan. When recommending the Transaction the Ashcourt
Rowan Board considered the pricing uplift to historical and current
trading levels. The cash element of the Transaction Consideration
represents:
-- a 123.1 per cent. uplift on the share price since 2 September
2011, when Jonathan Polin joined Ashcourt Rowan;
-- a 170 per cent. uplift on the share placing price in November 2011; and
-- a 60.2 per cent. premium to the current trading price of
168.5 pence (as at close of business on 30 January 2015).
While the Ashcourt Rowan Board is confident about the future
growth prospects for Ashcourt Rowan, there is always an element of
business plan execution risk. Taking into account the terms of the
offer by Towry Finance, the Ashcourt Rowan Directors believe that
the Transaction provides Ashcourt Rowan Shareholders with an
attractive premium and intend unanimously to recommend that
Ashcourt Rowan Shareholders vote in favour of the Scheme at the
Court Meeting and the special resolutions to be proposed at the
Ashcourt Rowan General Meeting.
In giving their recommendation, the Ashcourt Rowan Directors
considered the Transaction in relation to the value and prospects
of the underlying Ashcourt Rowan business segments and the
potential medium term stand-alone value of Ashcourt Rowan.
Furthermore, there will be significant business benefits for
Ashcourt Rowan and its clients from the Transaction, including
business scale, investment in growth and opportunities to further
leverage the operational platforms across the UK from an enhanced
branch network.
6. Information relating to Ashcourt Rowan
Ashcourt Rowan is a leading UK-focused provider of integrated
wealth management and financial advice and employee benefits
consultancy services for individuals, families, charities and
trusts, managing, as at 30 September 2014, total assets under
management and influence ("AUM/I") of GBP5.3 billion.
The firm, headquartered in London, employs 340 people (FTE) in
16 office locations across the UK, including Bath, Bournemouth,
Brighton, Cambridge, Chelmsford, Exeter, Leeds, Macclesfield,
Maidstone, Manchester, Rugby, Salisbury, St Andrews, Winchester and
York.
Ashcourt Rowan's operations are split across three core
divisions:
-- Ashcourt Rowan Asset Management ("ARAM") consists of 32
investment managers servicing around 9,000 discretionary clients
with an average portfolio size of GBP250,000. Funds under
management are sourced from a combination of external IFAs, direct
and through ARFP (see below).
-- Ashcourt Rowan Financial Planning ("ARFP") consists of 68
financial planners servicing over 50,000 clients, providing
financial planning services. Introduces client funds into ARAM for
discretionary/managed services.
-- Ashcourt Rowan Corporate Solutions ("ARCS") consists of 14
corporate consultants and advisers with an offering that covers
group plans, actuarial services, employee benefits, annuities and
protection. ARCS was added following the acquisition of UK Wealth
Management Limited which completed in April 2014.
In the twelve month period ended 31 March 2014, Ashcourt Rowan
reported revenue of GBP31.5 million, underlying EBITDA of GBP3.8
million and a pre-tax loss of GBP2 million, with assets under
management and influence of GBP4 billion.
Ashcourt Rowan recently announced interim results for the six
months to 30 September 2014, reporting revenues of GBP19.9 million,
assets under management and influence of GBP5.3 billion and a loss
before tax of GBP0.7 million. This can be broken down as shown
below:
Business AUM/I Revenue
GBPbn GBPm
ARAM 2.48 10.7
ARFP 2.78 8.0
ARCS 0.06 1.2
------ --------
Total 5.32 19.9
====== ========
In addition to its GBP2.48 billion of assets under management or
influence, ARFP also advises and earns fees on GBP1.3 billion of
ARAM's GBP2.48 billion of assets under management or influence.
By mandate AUM/I
GBPbn
Discretionary and
managed 2.3
Other 3.0
-------
Total 5.3
=======
7. Information relating to Towry
Towry manages or advises on over GBP6 billion in assets and is
one of the leading firms of wealth advisers in the UK with around
800 employees serving clients from a national network of
approximately 20 offices. Towry specialises in providing financial
planning and discretionary investment management services to
private individuals including entrepreneurs, business owners,
directors and senior executives with investable assets in excess of
GBP250,000, and has approximately 22,000 clients.
Towry is principally owned by funds managed by Palamon Capital
Partners, LP (a leading European private equity partnership that
invests growth capital in European lower mid-market companies).
8. Management, employees and locations
Towry has given assurances to the Ashcourt Rowan Directors that,
upon and following completion of the Transaction, it intends to
fully safeguard the existing employment rights of the management
and employees of the Ashcourt Rowan Group.
On completion, Towry will conduct a full review of the combined
business to identify realisable cost synergies, including the
overlap in office locations and duplicate business activity, which
will lead to some redundancies. The number of employees and
locations actually affected will depend on the outcome of the
review.
The Ashcourt Rowan Directors will resign from the Ashcourt Rowan
Board with effect from completion of the Transaction and Ashcourt
Rowan's senior management team comprising Jonathan Polin (the Group
Chief Executive Officer), Alfio Tagliabue (the Group Chief
Financial Officer) and Steve Haines (the Head of Governance) will
all be leaving the Ashcourt Rowan Group on completion of the
Transaction.
The change of control of Ashcourt Rowan triggered by the
completion of the Transaction will cause 30 per cent. of the
Executives' existing contractual awards under the GSOP to "vest".
This will result in payments by Ashcourt Rowan to the Executives of
the following amounts in cash on completion of the Transaction
based on the cash element of the Transaction Consideration of 270
pence per Ashcourt Rowan Share:
Jonathan Polin GBP1,736,448
Alfio Tagliabue GBP400,581
Steve Haines Nil
In addition, Ashcourt Rowan intends to treat intended GSOP
awards notified to the Executives (and to other employees of
Ashcourt Rowan) in August 2014 as having been made, to deem 30 per
cent. of these intended awards to have vested on the Scheme
becoming effective and to compensate the Executives (and other
relevant Ashcourt Rowan employees) accordingly by the payment of ex
gratia compensation amounts to each of them. This will result in
payments by Ashcourt Rowan to the Executives of the following
amounts in cash on completion of the Transaction based on the cash
element of the Transaction Consideration of 270 pence per Ashcourt
Rowan Share:
Jonathan Polin GBP434,112
Alfio Tagliabue GBP81,000
Steve Haines GBP338,727
These payments are subject to the approval of the Ashcourt Rowan
Shareholders, as explained below.
All Ashcourt Rowan employees holding existing or intended awards
under the GSOP are also to receive cash payments in respect of
vested or deemed vested GSOP awards. Accordingly, an aggregate
amount of approximately GBP1,432,724 will be paid on the completion
of the Transaction to Ashcourt Rowan employees other than the
Executives in respect of vested or deemed vested GSOP awards.
In addition to any contractual payments the Executives may be
entitled to receive from Ashcourt Rowan under their service and
employment contracts and the contractual and ex gratia payments
referred to above to be made in respect of the GSOP, Ashcourt Rowan
has agreed, subject to shareholder approval and completion of the
Transaction, to make further ex gratia severance payments to each
of the Executives by way of compensation for loss of office and/or
termination of their employment following the completion of the
Transaction. These payments are being made (i) to compensate the
Executives in respect of the loss of future benefits potentially
attainable under the GSOP; and (ii) to incentivise the Executives
to facilitate the smooth implementation of the Scheme and assist,
prior to the Scheme becoming effective, with Ashcourt Rowan
employee retention and identification of potential cost synergies
for the Enlarged Group. The payments to be made are as follows:
Jonathan Polin GBP1,967,279
Alfio Tagliabue GBP436,480
Steve Haines GBP307,004
These payments will be payable by Ashcourt Rowan at the same
time as the Loan Notes are to be redeemed and are subject to
certain conditions being met and to the approval of Ashcourt Rowan
Shareholders as noted below. In addition, if the amount payable on
redemption of the Loan Notes by Towry exceeds the nominal amount of
the Loan Notes at the Effective Date, each Executive's further ex
gratia severance payment for compensation for loss of office and/or
termination of employment (as set out immediately above) will be
reduced by a pro rata percentage of the aggregate amount of the
excess.
The proposed ex gratia payments to each of Jonathan Polin and
Alfio Tagliabue are required to be approved by a simple majority of
independent Ashcourt Rowan Shareholders. It is proposed that
approval be obtained by way of separate resolutions at the Ashcourt
Rowan General Meeting. It is also proposed to seek independent
Ashcourt Rowan Shareholders' approval for the proposed payment to
Steve Haines at the Ashcourt Rowan General Meeting.
Ashcourt Rowan has entered into Settlement Agreements to give
effect to the terms of this paragraph 8, but the making of the ex
gratia payments noted above under the Settlement Agreements is
conditional on the Ashcourt Rowan Shareholder approvals being
obtained and on completion of the Transaction.
Towry intends to put in place appropriate incentivisation
arrangements for the current management and staff of Ashcourt Rowan
following completion of the Transaction. No detailed discussions
have taken place to date between Ashcourt Rowan and Towry in
relation to such arrangements and no agreements or arrangements
have been entered into at the current time.
9. Ashcourt Rowan Share Schemes
Participants in the Ashcourt Rowan Share Schemes will be
contacted regarding the effect of the Transaction on their rights
under those schemes and provided with further details concerning
the proposals which will be made to them in due course. Details of
the proposals will be set out in the Scheme Document or, as the
case may be, the Offer Document and in separate letters to be sent
to participants in the Ashcourt Rowan Share Schemes.
10. Financing of the Transaction
The cash consideration payable to Ashcourt Rowan Shareholders
pursuant to the Transaction will be provided by Towry Finance
partly from a new bank facility and partly from Towry's existing
cash resources.
Morgan Stanley is satisfied that sufficient resources are
available to Towry Finance to satisfy in full the cash
consideration payable pursuant to the Transaction.
Further information on the financing of the Transaction will be
set out in the Scheme Document.
11. Confidentiality agreement
Ashcourt Rowan and Towry entered into a mutual confidentiality
agreement on 28 July 2014 pursuant to which each of Ashcourt Rowan
and Towry has undertaken to keep certain information relating to
the Transaction and the other party confidential and not to
disclose that information to third parties (other than to specified
recipients) unless required by law or regulation. These
confidentiality obligations will remain in force following
completion of the Transaction.
12. Opening Position Disclosure
In connection with the Transaction and on the date of this
announcement, Towry Finance will make a public Opening Position
Disclosure setting out details of its interests or short positions
in, or rights to subscribe for, any relevant securities of Ashcourt
Rowan.
It has not been practicable for Towry Finance to make enquiries
of all its concert parties in advance of releasing this opening
position disclosure. Therefore, this disclosure may not include all
the relevant details in respect of Towry Finance's concert parties.
Towry Finance confirms that further disclosure in accordance with
Rule 8.1(a) and Note 2(a)(i) on Rule 8 of the City Code will be
made as soon as possible, if required.
13. Scheme of Arrangement
It is intended that the Transaction will be effected by a
Court-sanctioned scheme of arrangement between Ashcourt Rowan and
the Scheme Shareholders under Part 26 of the Companies Act 2006.
The purpose of the scheme is to provide for Towry Finance to become
the owner of the whole of the issued and to be issued share capital
of Ashcourt Rowan.
Under the Scheme, the Scheme Shares will be transferred to Towry
Finance in consideration for which Scheme Shareholders will receive
consideration on the basis set out in paragraph 2 of this
announcement.
The Transaction will be subject to the Conditions and further
terms and conditions referred to in Appendix 1 to this announcement
and to be set out in the Scheme Document. The consent of the
Majority Lenders under, and as defined in, the Facilities Agreement
will be required for the waiver, amendment or release of any
material term or condition of the Scheme or, as the case may be,
the Offer and for these purposes any term or condition relating to
competition, FCA or other regulatory approvals will be deemed to be
material. The Conditions include (i) a long-stop date of 2 August
2015 by which the Scheme must become effective (unless extended
with the agreement of Towry Finance and Ashcourt Rowan); (ii) a
condition that the Meetings are held no later than the 22(nd) day
after the expected date of the Meetings to be set out in the Scheme
Document in due course (or such later date as may be agreed between
Towry Finance and Ashcourt Rowan); and (iii) a condition that the
Scheme is sanctioned by the Court.
To become effective, the Scheme requires the approval of Scheme
Shareholders by the passing of a special resolution at the Court
Meeting. The resolution must be approved by a majority in number of
the Scheme Shareholders present and voting (and entitled to vote),
either in person or by proxy, representing not less than 75 per
cent. of the Scheme Shares held by such Scheme Shareholders and the
passing of a special resolution at the Ashcourt Rowan General
Meeting, requiring the approval of Ashcourt Rowan Shareholders
representing at least 75 per cent. of the votes cast at the
Ashcourt Rowan General Meeting (either in person or by proxy). The
Ashcourt Rowan General Meeting will be held immediately after the
Court Meeting. In respect of the special resolution at the Ashcourt
Rowan General Meeting, Ashcourt Rowan Shareholders will be entitled
to cast one vote for each Scheme Share held.
Following the Meetings, the Scheme must be sanctioned by the
Court. The Scheme will only become effective once a copy of the
Scheme Court Order is delivered to the Registrar of Companies.
Upon the Scheme becoming effective, it will be binding on all
Ashcourt Rowan Shareholders, irrespective of whether or not they
attended or voted at the Meetings and the cash consideration will
be despatched by Towry Finance to Scheme Shareholders no later than
14 days after the Effective Date.
The Scheme Document will include full details of the Scheme,
together with notices of the Court Meeting and the Ashcourt Rowan
General Meeting and the expected timetable, and will specify the
action to be taken by Scheme Shareholders. The Scheme Document will
be sent to Ashcourt Rowan Shareholders as soon as reasonably
practicable.
The Scheme will be governed by English law and will be subject
to the applicable requirements of the City Code, the Panel, the
London Stock Exchange and the AIM Rules.
14. Irrevocable Undertakings
Towry has received irrevocable undertakings to vote in favour of
the Scheme at the Court Meeting and the resolutions to be proposed
at the Ashcourt Rowan General Meeting in respect of a total of
27,874,346 Ashcourt Rowan Shares, representing in aggregate
approximately 78.54 per cent. of Ashcourt Rowan's existing issued
share capital, further details of which are set out below.
Ashcourt Rowan Directors' irrevocable undertakings
Jonathan Polin, the only Ashcourt Rowan Director who is also an
Ashcourt Rowan Shareholder, has irrevocably undertaken to vote in
favour of the Scheme in respect of his own beneficial holding of
231,645 Ashcourt Rowan Shares, in aggregate representing
approximately 0.65 per cent. of Ashcourt Rowan's issued share
capital. See Appendix 4 for further details of this irrevocable
undertaking, including the circumstances in which it ceases to be
binding.
Other irrevocable undertakings
Towry has also received irrevocable undertakings from certain
other Ashcourt Rowan Shareholders to vote in favour of the Scheme
at the Court Meeting and the resolutions to be proposed at the
Ashcourt Rowan General Meeting (save that these irrevocable
undertakings do not extend to the resolutions relating to the
payments to the Executives detailed in paragraph 8 of this
announcement) in respect of a total of 27,642,701 Ashcourt Rowan
Shares, representing approximately 77.89 per cent. of Ashcourt
Rowan's issued share capital. See Appendix 4 for further details of
these irrevocable undertakings, including the circumstances in
which they cease to be binding.
15. Cancellation of AIM quotation and re-registration
Prior to the Scheme becoming effective, a request will be made
to the London Stock Exchange to cancel trading in Ashcourt Rowan
Shares on AIM on the first Business Day following the Effective
Date.
Share certificates in respect of the Ashcourt Rowan Shares will
cease to be valid and should be destroyed on the first Business Day
following the Effective Date.
In addition, entitlements held within the CREST system to the
Ashcourt Rowan Shares will be cancelled on the first Business Day
following the Effective Date.
As soon as possible after the Effective Date, it is intended
that Ashcourt Rowan will be re-registered as a private limited
company.
16. Documents available for inspection
Copies of the following documents will be made available on
Towry's website at www.towry.com and on Ashcourt Rowan's website at
www.ashcourtrowan.com by no later than 12:00 noon (London time) on
the Business Day following the date of this announcement:
-- the irrevocable undertakings referred to in paragraph 14 and
set out in Appendix 4 to this announcement;
-- the confidentiality agreement referred to in paragraph 11;
-- the Settlement Agreements referred to in paragraph 8; and
-- in respect of the new bank facility referred to in paragraph 10:
o the Facilities Agreement; and
o the arrangement fee letter.
The contents of Towry's and Ashcourt Rowan's websites are not
incorporated into and do not form part of this announcement.
17. General
Towry Finance reserves the right to elect (with the consent of
the Panel) to implement the Transaction by way of an Offer for the
entire issued and to be issued share capital of Ashcourt Rowan not
already held by Towry Finance as an alternative to the Scheme. In
such an event an Offer will be implemented on the same terms
(subject to appropriate amendments), so far as applicable, as those
which would apply to the Scheme and subject to the amendment
referred to in Appendix 1 of this announcement regarding the
acceptance condition for such an offer.
If the Transaction is effected by way of an Offer and such Offer
becomes or is declared unconditional in all respects and sufficient
acceptances are received Towry Finance intends to: (i) request that
the London Stock Exchange cancel trading in Ashcourt Rowan Shares
on AIM; and (ii) exercise its rights to apply the provisions of
Chapter 3 of Part 28 of the Companies Act 2006 to acquire
compulsorily the remaining Ashcourt Rowan Shares in respect of
which the Offer has not been accepted.
The Transaction will be subject to the Conditions and other
terms set out in this announcement and to the full terms and
conditions which will be set out in the Scheme Document. The terms
of the Loan Notes are set out in Appendix 2 to this announcement.
Appendix 3 to this announcement contains bases and sources of
certain information contained in this announcement. Details of
irrevocable undertakings received by Towry are set out in Appendix
4 to this announcement. Certain terms used in this announcement are
defined in Appendix 5 to this announcement.
This announcement is not intended to and does not constitute or
form part of any offer to sell or subscribe for or any invitation
to purchase or subscribe for any securities or the solicitation of
any vote or approval in any jurisdiction pursuant to the
Transaction or otherwise. The Transaction will be made solely
pursuant to the terms of the Scheme Document, which will contain
the full terms and conditions of the Transaction, including details
of how to vote in respect of the Transaction. Any decision in
respect of, or other response to, the Transaction should be made
only on the basis of the information contained in the Scheme
Document.
This announcement does not constitute a prospectus or prospectus
equivalent document.
The release, publication or distribution of this announcement in
jurisdictions other than the United Kingdom may be restricted by
law and therefore any persons who are subject to the laws of any
jurisdiction other than the United Kingdom should inform themselves
about, and observe any applicable requirements. In particular, the
ability of persons who are not resident in the United Kingdom to
vote their Ashcourt Rowan Shares with respect to the Scheme at the
Court Meeting, or to execute and deliver forms of proxy appointing
another to vote at the Court Meeting on their behalf, may be
affected by the laws of the relevant jurisdictions in which they
are located. This announcement has been prepared for the purpose of
complying with English law and the City Code and the information
disclosed may not be the same as that which would have been
disclosed if this announcement had been prepared in accordance with
the laws of jurisdictions outside the United Kingdom.
Copies of this announcement and any formal documentation
relating to the Transaction are not being, and must not be,
directly or indirectly, mailed or otherwise forwarded, distributed
or sent in or into or from any Restricted Jurisdiction and persons
receiving such documents (including custodians, nominees and
trustees) must not mail or otherwise forward, distribute or send it
in or into or from any Restricted Jurisdiction. If the Transaction
is implemented by way of an Offer (unless otherwise permitted by
applicable law and regulation), the Offer may not be made directly
or indirectly, in or into, or by the use of mails or any means or
instrumentality (including, but not limited to, facsimile, e-mail
or other electronic transmission, telex or telephone) of interstate
or foreign commerce of, or of any facility of a national, state or
other securities exchange of any Restricted Jurisdiction and the
Offer may not be capable of acceptance by any such use, means,
instrumentality or facilities.
Notice to US investors in Ashcourt Rowan: the Transaction
relates to the shares of an English company and is being made by
means of a scheme of arrangement provided for under English company
law. A transaction effected by means of a scheme of arrangement is
not subject to the tender offer rules or the proxy solicitation
rules under the US Exchange Act. Accordingly, the Transaction is
subject to the disclosure requirements and practices applicable in
the United Kingdom to schemes of arrangement which differ from the
disclosure requirements of United States tender offer and proxy
solicitation rules. If, in the future, Towry Finance exercises the
right to implement the Transaction by way of a takeover offer and
determines to extend the offer into the United States, the
Transaction will be made in compliance with applicable United
States laws and regulations. Financial information included in this
announcement and the Scheme Document has been or will have been
prepared in accordance with accounting standards applicable in the
United Kingdom that may not be comparable to financial information
of US companies or companies whose financial statements are
prepared in accordance with generally accepted accounting
principles in the United States.
It may be difficult for US holders of Ashcourt Rowan Shares to
enforce their rights and any claim arising out of the US federal
laws, since Ashcourt Rowan and Towry are located in a non-US
jurisdiction, and some or all of their officers and directors may
be residents of a non-US jurisdiction. US holders of Ashcourt Rowan
Shares may not be able to sue a non-US company or its officers or
directors in a non-US court for violations of the US securities
laws. Further, it may be difficult to compel a non-US company and
its affiliates to subject themselves to a US court's judgement.
Morgan Stanley, which is authorised by the Prudential Regulation
Authority and regulated by the FCA and the Prudential Regulation
Authority in the UK, is acting exclusively for Towry and no one
else in connection with the Transaction and will not be responsible
to anyone other than Towry for providing the protections afforded
to clients of Morgan Stanley or for providing advice in relation to
the Transaction or any other matters referred to in this
announcement.
Keefe, Bruyette & Woods which is authorised and regulated by
the FCA in the UK, is acting exclusively for Ashcourt Rowan and no
one else in connection with the Transaction and will not be
responsible to anyone other than Ashcourt Rowan for providing the
protections afforded to clients of Keefe, Bruyette & Woods or
for providing advice in relation to the Transaction or any other
matters referred to in this announcement.
Cantor Fitzgerald which is authorised and regulated by the FCA
in the UK, is acting exclusively for Ashcourt Rowan and no one else
in connection with the Transaction and will not be responsible to
anyone other than Ashcourt Rowan for providing the protections
afforded to clients of Cantor Fitzgerald or for providing advice in
relation to the Transaction or any other matters referred to in
this announcement.
Cautionary Note Regarding Forward-Looking Statements
This announcement contains certain forward-looking statements
with respect to the financial condition, results of operations and
business of Ashcourt Rowan and certain plans and objectives of
Towry with respect thereto. These forward-looking statements can be
identified by the fact that they do not relate only to historical
or current facts. Forward-looking statements often use words such
as "anticipate", "target", "expect", "estimate", "intend", "plan",
"goal", "believe", "hope", "aims", "continue", "will", "may",
"should", "would", "could", or other words of similar meaning.
These statements are based on assumptions and assessments made by
Ashcourt Rowan, and/or Towry in light of their experience and their
perception of historical trends, current conditions, future
developments and other factors they believe appropriate. By their
nature, forward-looking statements involve risk and uncertainty,
because they relate to events and depend on circumstances that will
occur in the future and the factors described in the context of
such forward-looking statements in this document could cause actual
results and developments to differ materially from those expressed
in or implied by such forward-looking statements. Although it is
believed that the expectations reflected in such forward-looking
statements are reasonable, no assurance can be given that such
expectations will prove to have been correct and you are therefore
cautioned not to place undue reliance on these forward-looking
statements which speak only as at the date of this document.
Neither Ashcourt Rowan or Towry assumes any obligation to update or
correct the information contained in this document (whether as a
result of new information, future events or otherwise), except as
required by applicable law.
There are several factors which could cause actual results to
differ materially from those expressed or implied in
forward-looking statements. Among the factors that could cause
actual results to differ materially from those described in the
forward-looking statements are changes in the global, political,
economic, business, competitive, market and regulatory forces,
future exchange and interest rates, changes in tax rates and future
business combinations or dispositions.
Dealing and Opening Position Disclosure Requirements
Under Rule 8.3(a) of the Code, any person who is interested in
one per cent. or more of any class of relevant securities of an
offeree company or of any securities exchange offeror (being any
offeror other than an offeror in respect of which it has been
announced that its offer is, or is likely to be, solely in cash)
must make an Opening Position Disclosure following the commencement
of the offer period and, if later, following the announcement in
which any securities exchange offeror is first identified.
An Opening Position Disclosure must contain details of the
person's interests and short positions in, and rights to subscribe
for, any relevant securities of each of (i) the offeree company and
(ii) any securities exchange offeror(s). An Opening Position
Disclosure by a person to whom Rule 8.3(a) applies must be made by
no later than 3.30 pm (London time) on the 10(th) business day
following the commencement of the offer period and, if appropriate,
by no later than 3.30 pm (London time) on the 10(th) business day
following the announcement in which any securities exchange offeror
is first identified. Relevant persons who deal in the relevant
securities of the offeree company or of a securities exchange
offeror prior to the deadline for making an Opening Position
Disclosure must instead make a Dealing Disclosure. Under Rule
8.3(b) of the Code, any person who is, or becomes, interested in
one per cent. or more of any class of relevant securities of the
offeree company or of any securities exchange offeror must make a
Dealing Disclosure if the person deals in any relevant securities
of the offeree company or of any securities exchange offeror. A
Dealing Disclosure must contain details of the dealing concerned
and of the person's interests and short positions in, and rights to
subscribe for, any relevant securities of each of (i) the offeree
company and (ii) any securities exchange offeror, save to the
extent that these details have previously been disclosed under Rule
8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies
must be made by no later than 3.30 pm (London time) on the business
day following the date of the relevant dealing. If two or more
persons act together pursuant to an agreement or understanding,
whether formal or informal, to acquire or control an interest in
relevant securities of an offeree company or a securities exchange
offeror, they will be deemed to be a single person for the purpose
of Rule 8.3.
Opening Position Disclosures must also be made by the offeree
company and by any offeror and Dealing Disclosures must also be
made by the offeree company, by any offeror and by any persons
acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Takeover Panel's website at www.thetakeoverpanel.org.uk,
including details of the number of relevant securities in issue,
when the offer period commenced and when any offeror was first
identified. If you are in any doubt as to whether you are required
to make an Opening Position Disclosure or a Dealing Disclosure, you
should contact the Panel's Market Surveillance Unit on +44 (0)20
7638 0129.
APPENDIX 1
CONDITIONS TO AND CERTAIN FURTHER TERMS OF THE TRANSACTION
Part A: Conditions of the Scheme and the Transaction
The Transaction will be conditional upon the Scheme becoming
unconditional and becoming effective by no later than 2 August
2015, or such later date (if any) as Towry Finance and Ashcourt
Rowan may, with the consent of the Panel, agree and the Court may
allow.
(A) The Scheme will be conditional upon:
(i) its approval by a majority in number representing not less
than three-fourths in value of the Scheme Shareholders (or the
relevant class or classes thereof, if applicable) present and
voting, either in person or by proxy, at the Court Meeting and at
any separate class meeting which may be required by the Court or at
any adjournment of any such meeting on or before the 22(nd) day
after the expected date of the Court Meeting to be set out in the
Scheme Document in due course (or such later date, if any, as Towry
Finance and Ashcourt Rowan may agree and the Court may allow);
(ii) the special resolution necessary to approve and implement
the Scheme being duly passed by the requisite majority or
majorities at the Ashcourt Rowan General Meeting or at any
adjournment of that meeting on or before the 22(nd) day after the
expected date of the Ashcourt Rowan General Meeting to be set out
in the Scheme Document in due course (or such later date, if any,
as Towry Finance and Ashcourt Rowan may agree and the Court may
allow); and
(iii) the sanction of the Scheme by the Court with or without
modification (but subject to any such modification being acceptable
to Towry Finance and Ashcourt Rowan) and the delivery of a copy of
the Scheme Court Order to the Registrar of Companies in England and
Wales;
In addition, Towry Finance and Ashcourt Rowan have agreed that
the Transaction will be conditional upon the following conditions
and, accordingly, the necessary actions to make the Scheme
effective will not be taken unless the following conditions (as
amended if appropriate) have been satisfied or, where relevant,
waived:
(B) in respect of Towry Finance, each parent undertaking of
Towry Finance and any other person that is under a duty to give a
notice under section 178 of FSMA in respect of the Transaction, the
appropriate regulator (as defined in section 178(2A) of FSMA) of
each UK authorised person (as defined in section 191G of FSMA) over
which the Transaction contemplates an acquisition of control:
(i) giving notice for the purpose of section 189(4)(a) of FSMA
that it has determined to approve such acquisition of control;
or
(ii) giving notice for the purpose of section 189(7) of FSMA
that it has determined to approve such acquisition of control, on
terms satisfactory to Towry Finance (acting reasonably); or
(iii) being treated, by virtue of section 189(6) of FSMA, as
having approved such acquisition of control,
where references to FSMA are read, where applicable, with the
Financial Services and Markets Act 2000 (Controllers) (Exemptions)
Order 2009;
(C) no government, governmental, quasi-governmental,
supranational, statutory or regulatory body, trade agency,
association, institution or professional body having responsibility
for the regulation or supervision of banking, consumer credit or
financial services having:
(i) withdrawn or refused to renew, or threatened to withdraw or
to refuse to renew, any licence or permission; or
(ii) instituted, implemented, taken or omitted, or threatened to
take or to omit, any other action,
the effect of which would be materially and adversely to affect
the businesses, assets, prospects or profits of the Wider Towry
Group (taken as a whole) or of the Wider Ashcourt Rowan Group
(taken as a whole), and upon no such licences or permissions
terminating or otherwise becoming invalid as a result of the
Transaction or its implementation the effect of which would be
materially and adversely to affect the businesses, assets,
prospects or profits of the Wider Ashcourt Rowan Group (taken as a
whole);
(D) except as Disclosed, there being no provision of any
agreement, arrangement, licence, permit or other instrument to
which any member of the Wider Ashcourt Rowan Group is a party or by
or to which any such member or any of its assets is, are, or may be
bound, entitled or subject, which in each case in consequence of
the Transaction or the proposed acquisition of any shares or other
securities in Ashcourt Rowan or because of a change in the control
or management of Ashcourt Rowan or otherwise, would or might
reasonably be expected to, in each case to an extent which is
material in the context of the Wider Ashcourt Rowan Group as a
whole, result in:
(i) any moneys borrowed by or any other indebtedness (actual or
contingent) of, or grant available to any such member, being or
becoming repayable or capable of being declared repayable
immediately or earlier than their or its stated maturity date or
repayment date or the ability of any such member to borrow moneys
or incur any indebtedness being withdrawn or inhibited or being
capable of becoming or being withdrawn or inhibited;
(ii) any such agreement, arrangement, licence, permit or
instrument or the rights, liabilities, obligations or interests of
any such member thereunder being terminated or modified or
adversely affected or any obligation or liability arising or any
adverse action being taken or arising thereunder;
(iii) any assets or interests of any such member being or
falling to be disposed of or charged or any right arising under
which any such asset or interest could be required to be disposed
of or charged;
(iv) the creation (other than in the ordinary course of
business) or enforcement of any mortgage, charge or other security
interest over the whole or any part of the business, property or
assets of any such member;
(v) the rights, liabilities, obligations or interests of any
such member in, or the business of any such member with, any
person, firm or body (or any arrangement or arrangements relating
to any such interest or business) being terminated, adversely
modified or adversely affected;
(vi) the value of any such member or its financial or trading
position or prospects being prejudiced or adversely affected;
(vii) any such member ceasing to be able to carry on business
under any name under which it presently does so; or
(viii) the creation (other than in the ordinary course of
business) of any liability, actual or contingent, by any such
member,
and no event having occurred which, under any provision of any
such agreement, arrangement, licence, permit or other instrument to
which any member of the Wider Ashcourt Rowan Group is a party or by
or to which any such member or any of its assets may be bound,
entitled or subject, would, or is reasonably be expected to, result
in any of the events or circumstances as are referred to in
sub-paragraphs (i) to (viii) of this condition (D) in each case to
an extent which is material in the context of the Wider Ashcourt
Rowan Group;
(E) no government or governmental, quasi-governmental, supranational, statutory, regulatory, environmental or investigative body, court, trade agency, association, institution or any other body or person whatsoever in any jurisdiction (each a "Third Party") having decided to take, institute, implement or threaten any action, proceeding, suit, investigation, enquiry or reference, or enacted, made or proposed any statute, regulation, decision or order, or having taken any other steps which would or would reasonably be expected to (to an extent which is material in the context of the Wider Ashcourt Rowan Group or the Wider Towry Group, as the case may be, in either case, taken as a whole):
(i) require, prevent or materially delay the divestiture, or
materially alter the terms envisaged for any proposed divestiture
by any member of the Wider Towry Group or any member of the Wider
Ashcourt Rowan Group of all or any portion of their respective
businesses, assets or property or impose any material limitation on
the ability of any of them to conduct their respective businesses
(or any of them) or to own any of their respective assets or
properties or any part thereof;
(ii) require, prevent or materially delay the divestiture by any
member of the Wider Towry Group of any shares or other securities
in Ashcourt Rowan;
(iii) impose any limitation on, or result in a delay in, the
ability of any member of the Wider Towry Group directly or
indirectly to acquire or to hold or to exercise effectively any
rights of ownership in respect of shares or securities in any
member of the Wider Ashcourt Rowan Group or the Wider Towry Group
or to exercise management control over any such member;
(iv) otherwise materially adversely affect the business, assets,
prospects or profits of any member of the Wider Towry Group or of
any member of the Wider Ashcourt Rowan Group;
(v) make the Transaction or its implementation or the
acquisition or proposed acquisition by Towry Finance or any member
of the Wider Towry Group of any shares or other securities in, or
control of Ashcourt Rowan void, illegal, and/or unenforceable under
the laws of any jurisdiction, or otherwise, directly or indirectly,
restrain, prohibit, materially delay, restrict or otherwise
interfere with the same, or impose material additional conditions
or obligations with respect thereto, or otherwise materially
challenge or interfere therewith;
(vi) except pursuant to Sections 974 to 991 of the Companies Act
2006, require any member of the Wider Towry Group or the Wider
Ashcourt Rowan Group to offer to acquire any shares or other
securities (or the equivalent) or interest in any member of the
Wider Ashcourt Rowan Group or the Wider Towry Group owned by any
third party;
(vii) impose any material limitation on the ability of any
member of the Wider Ashcourt Rowan Group or the Wider Towry Group
to co-ordinate its business, or any part of it, with the businesses
of any other members; or
(viii) result in any member of the Wider Ashcourt Rowan Group or
Wider Towry Group ceasing to be able to carry on business under any
name under which it presently does so,
and all applicable waiting and other time periods during which
any such Third Party could institute, implement or threaten any
action, proceeding, suit, investigation, enquiry or reference or
any other step under the laws of any jurisdiction in respect of the
Transaction or the acquisition or proposed acquisition of any
Ashcourt Rowan Shares having expired, lapsed or been
terminated;
(F) all necessary filings or applications having been made in
connection with the Transaction and all material statutory or
regulatory obligations in any jurisdiction having been complied
with in connection with the Transaction or the acquisition by any
member of the Wider Towry Group of any shares or other securities
in, or control of, Ashcourt Rowan and all authorisations, orders,
recognitions, grants, consents, licences, confirmations,
clearances, permissions and approvals reasonably deemed necessary
or appropriate by Towry Finance or any member of the Wider Towry
Group for or in respect of the Transaction or the proposed
acquisition of any shares or other securities in, or control of,
Ashcourt Rowan by any member of the Wider Towry Group having been
obtained in terms and in a form reasonably satisfactory to Towry
Finance from all appropriate Third Parties or persons with whom any
member of the Wider Ashcourt Rowan Group has entered into
contractual arrangements and all such authorisations, orders,
recognitions, grants, consents, licences, confirmations,
clearances, permissions and approvals together with all
authorisations orders, recognitions, grants, licences,
confirmations, clearances, permissions and approvals reasonably
considered necessary or appropriate to carry on the business of any
member of the Wider Ashcourt Rowan Group remaining in full force
and effect and all filings reasonably considered necessary for such
purpose have been made and there being no notice or intimation of
any intention to revoke or not to renew any of the same at the time
at which the Transaction becomes otherwise unconditional and all
necessary statutory or regulatory obligations in any jurisdiction
having been complied with;
(G) except as Disclosed, no member of the Wider Ashcourt Rowan
Group having, since 30 September 2014:
(i) save as between Ashcourt Rowan and wholly-owned subsidiaries
of Ashcourt Rowan or for Ashcourt Rowan Shares issued pursuant to
the vesting of awards granted under the Ashcourt Rowan Share
Schemes, issued, authorised or proposed the issue of additional
shares of any class;
(ii) save as between Ashcourt Rowan and wholly-owned
subsidiaries of Ashcourt Rowan or for the grant of awards under the
Ashcourt Rowan Share Schemes, issued or agreed to issue, authorised
or proposed the issue of securities convertible into shares of any
class or rights, warrants or options to subscribe for, or acquire,
any such shares or convertible securities;
(iii) other than to another member of the Ashcourt Rowan Group,
recommended, declared, paid or made any bonus issue, dividend or
other distribution whether payable in cash or otherwise;
(iv) save for intra-Ashcourt Rowan Group transactions, merged or
demerged with any body corporate or acquired or disposed of or
transferred, mortgaged or charged or created any security interest
over any asset or any right, title or interest in any asset
(including shares and trade investments), in each case which asset
is material in the context of the Wider Ashcourt Rowan Group taken
as a whole, or authorised the same, other than in the ordinary
course of business;
(v) save for intra-Ashcourt Rowan Group transactions, made or
authorised or proposed or announced an intention to propose any
change in its loan capital;
(vi) issued or authorised the issue of any debentures or (save
for intra-Ashcourt Rowan Group transactions or save in the ordinary
course of business) incurred or increased any material indebtedness
or become subject to any material contingent liability;
(vii) purchased, redeemed or repaid any of its own shares or
other securities or reduced or, save in respect to the matters
mentioned in sub-paragraph (i) above, made any other change to any
part of its share capital;
(viii) other than pursuant to the Transaction, implemented or
authorised any reconstruction, amalgamation, scheme or other
transaction or arrangement otherwise than in the ordinary course of
business or entered into or changed the terms of any contract with
any director or senior executive;
(ix) entered into, varied or authorised, any material contract,
transaction or commitment (whether in respect of capital
expenditure or otherwise) which is of a long term, onerous or
unusual nature or magnitude or which is or is reasonably likely to
be restrictive on the businesses of any member of the Wider
Ashcourt Rowan Group or the Wider Towry Group in a manner which is
material or which is other than in the ordinary course of business
and which in each case, is material in the context of the Wider
Ashcourt Rowan Group taken as a whole;
(x) (other than in respect of a member which is dormant and was
solvent at the relevant time) taken any corporate action or had any
legal proceedings started or threatened against it for its
winding-up, dissolution or reorganisation or for the appointment of
a receiver, administrative receiver, administrator, trustee or
similar officer of all or any of its assets or revenues or any
analogous proceedings in any jurisdiction or had any such person
appointed;
(xi) waived or compromised any claim otherwise than in the
ordinary course of business where such waiver or compromise would
have a material adverse effect on the financial position of the
Wider Ashcourt Rowan Group taken as a whole or is material in the
context of the Transaction;
(xii) entered into any contract, commitment, arrangement or
agreement otherwise than in the ordinary course of business and
which, in each case, is material in the context of the Wider
Ashcourt Rowan Group taken as a whole or passed any resolution or
made any offer (which remains open for acceptance) with respect to
or announced any intention to, or to propose to, effect any of the
transactions, matters or events referred to in this condition;
(xiii) having made or agreed or consented to any change to:
(1) the terms of the trust deeds constituting the pension
scheme(s) established by any member of the Wider Ashcourt Rowan
Group for its directors, employees or their dependents;
(2) the contributions payable to any such scheme(s) or to the
benefits which accrue or to the pensions which are payable
thereunder;
(3) the basis on which qualification for, or accrual or
entitlement to, such benefits or pensions are calculated or
determined; or
(4) the basis upon which the liabilities (including pensions) of
such pension schemes are funded, valued or made;
(xiv) proposed, agreed to provide or modified the terms of any
share option scheme, incentive scheme or other benefit relating to
the employment or termination of employment of any person employed
by the Wider Ashcourt Rowan Group; or
(xv) having taken (or agreed or proposed to take) any action
which requires, or would require, the consent of the Panel or the
approval of Ashcourt Rowan Shareholders in general meeting in
accordance with, or as contemplated by, Rule 21.1 of the City Code
other than in relation to the Transaction,
and, for the purposes of paragraphs (iii), (iv), (v) and (vi) of
this condition, the term "Ashcourt Rowan Group" shall mean Ashcourt
Rowan and its wholly-owned subsidiaries;
(H) except as Disclosed, since 30 September 2014:
(i) no adverse change or deterioration having occurred in the
business, assets, financial or trading position or profits or
prospects of any member of the Wider Ashcourt Rowan Group which is
material in the context of the Wider Ashcourt Rowan Group taken as
a whole save as a consequence of the proposed Transaction;
(ii) no litigation, arbitration proceedings, prosecution or
other legal proceedings to which any member of the Wider Ashcourt
Rowan Group is or may become a party (whether as a plaintiff,
defendant or otherwise) and (other than as a result of the
Transaction) no investigation by any Third Party against or in
respect of any member of the Wider Ashcourt Rowan Group having been
instituted announced or threatened by or against or remaining
outstanding in respect of any member of the Wider Ashcourt Rowan
Group which in any and each such case might reasonably be expected
to have a material adverse affect on the Wider Ashcourt Rowan Group
taken as a whole;
(iii) no contingent or other liability of any member of the
Wider Ashcourt Rowan Group having arisen or become apparent to
Towry Finance which might reasonably be expected to have a material
adverse affect on the Wider Ashcourt Rowan Group taken as a whole;
and
(iv) no formal steps having been taken by any relevant regulator
which are likely to result in the withdrawal, cancellation,
termination or modification of any licence held by any member of
the Wider Ashcourt Rowan Group which is necessary for the proper
carrying on of its business and the withdrawal, cancellation,
termination or modification of which might reasonably be expected
to have a material adverse effect on the Wider Ashcourt Rowan Group
taken as a whole; and
(I) except as Disclosed, Towry Finance not having discovered:
(i) that any financial, business or other information concerning
the Wider Ashcourt Rowan Group as contained in the information
disclosed at any time by or on behalf of any member of the Wider
Ashcourt Rowan Group whether publicly, to any member of the Wider
Towry Group, or to any of their advisers or otherwise is
misleading, contains a material misrepresentation of fact or omits
to state a fact necessary to make that information not misleading,
in each such case to an extent which is material in the context of
the Wider Ashcourt Rowan Group taken as a whole;
(ii) that any member of the Wider Ashcourt Rowan Group is
subject to any liability (contingent or otherwise) which is
material in the context of the Wider Ashcourt Rowan Group taken as
a whole; or
(iii) any information which affects the import of any
information disclosed at any time by or on behalf of any member of
the Wider Ashcourt Rowan Group to an extent which is material in
the context of the Wider Ashcourt Rowan Group taken as a whole.
For the purposes of these conditions the "Wider Ashcourt Rowan
Group" means Ashcourt Rowan and its subsidiary undertakings,
associated undertakings and any other undertaking in which Ashcourt
Rowan and/or such undertakings (aggregating their interests) have a
significant interest and the "Wider Towry Group" means Towry and
its subsidiary undertakings, associated undertakings and any other
undertaking in which Towry and/or such undertakings (aggregating
their interests) have a significant interest and for these purposes
"subsidiary undertaking" and "undertaking" have the meanings given
by the Companies Act 2006, "associated undertaking" has the meaning
given by paragraph 19 of Schedule 6 to the Large and Medium-sized
Companies and Groups (Accounts and Reports) Regulations 2008 other
than paragraph 19(1)(b) of Schedule 6 to those Regulations which
shall be excluded for this purpose, and "significant interest"
means a direct or indirect interest in twenty per cent. or more of
the equity share capital (as defined in the Companies Act
2006).
Part B: Certain further terms of the Transaction
Towry Finance reserves the right to waive, in whole or in part,
all or any of conditions (A) to (I) above, except for conditions
(A) and (B), which cannot be waived.
Condition (B) must be fulfilled by, and conditions (C) to (I)
(inclusive) fulfilled or waived by, no later than 11.59 p.m. on the
date immediately preceding the date of the Scheme Court Hearing,
failing which the Scheme will lapse. Towry Finance shall be under
no obligation to waive or treat as satisfied any of conditions (C)
to (I) (inclusive) by a date earlier than the latest date specified
above for the fulfilment or waiver thereof, notwithstanding that
the other conditions of the offer may at such earlier date have
been waived or fulfilled and that there are at such earlier date no
circumstances indicating that any of such conditions may not be
capable of fulfilment.
If Towry Finance is required by the Panel to make an offer for
Ashcourt Rowan Shares under the provisions of Rule 9 of the City
Code, Towry Finance may make such alterations to any of the above
conditions as are necessary to comply with the provisions of that
Rule.
The Transaction will lapse if there is a Phase 2 CMA Reference
in respect of the Transaction before the Court Meeting and the
Ashcourt Rowan General Meeting.
Towry Finance reserves the right to elect (with the consent of
the Panel) to implement the Transaction by way of a takeover offer
(as defined in Part 28 of the Companies Act 2006). In such event,
such offer will be implemented on the same terms, so far as
applicable, as those which would apply to the Scheme, subject to
appropriate amendments, including (without limitation and subject
to the consent of the Panel) an acceptance condition that is set at
90 per cent. (or such lesser percentage, as Towry Finance may
decide) (i) in nominal value of the shares to which such offer
relates; and (ii) of the voting rights attached to those shares,
and that is subject to Towry Finance and/or (with the consent of
the Panel) any members of the Wider Towry Group having acquired or
agreed to acquire, whether pursuant to the offer or otherwise,
shares carrying more than 50 per cent. of the voting rights
normally exercisable at a general meeting of Ashcourt Rowan,
including, for this purpose, any such voting rights attaching to
Ashcourt Rowan Shares that are unconditionally allotted or issued
before the takeover offer becomes or is declared unconditional as
to acceptances, whether pursuant to the exercise of any outstanding
subscription or conversion rights or otherwise.
The availability of the Transaction to persons not resident in
the United Kingdom may be affected by the laws of the relevant
jurisdictions. Persons who are not resident in the United Kingdom
should inform themselves about and observe any applicable
requirements.
The Transaction will be governed by English law and be subject
to the jurisdiction of the English courts, to the conditions set
out below and in the formal Scheme Document. The Transaction will
comply with the applicable rules and regulations of the FCA, the
London Stock Exchange and the City Code.
Each of the Conditions shall be regarded as a separate Condition
and shall not be limited by reference to any other Condition.
APPENDIX 2
TERMS OF THE LOAN NOTES
1. The Loan Notes will be issued by Towry and will:
(A) be redeemable on the earlier of:
(i) (x) if a Listing has not occurred, the date Palamon ceases
to control at least 50% of the voting rights in Towry or ceases to
hold at least 30% of the issued share capital of Towry (excluding
any share capital with a fixed return), or (y) if a Listing has
occurred, the date Palamon ceases to control at least 30% of the
issued share capital of Towry (excluding any share capital with a
fixed return);
(ii) completion of any refinancing in full of Towry whether or
not such refinancing is made available in whole or in part by
existing lenders and regardless of the structure or nature of any
replacement or additional facility; and
(iii) seven years following their date of issue,
provided that save as set out in paragraph 4 below redemption
will in any case occur only when the lenders under the Facilities
Agreement have been repaid in full, with prepayment following a
change of control under paragraph 1(A)(i) above or a refinancing
under paragraph 1(A)(ii) above constituting a repayment in full for
these purposes;
(B) be non-transferrable (subject to certain limited exceptions,
including to permit transfers to companies within the same group,
by an investment fund to funds managed by the same fund manager and
to any other noteholder who acquired their Loan Notes pursuant to
the Scheme or as the case may be Offer);
(C) be unsecured; and
(D) be unlisted.
2. If the Loan Notes have not been redeemed in full by 1 January
2017, the amount payable on redemption will be increased by 20 per
cent. and from that date the Loan Notes will accrue interest on the
amount payable on redemption at the rate of 20 per cent. compounded
annually, to be paid only on redemption;
3. If the Loan Notes have not been redeemed in full by 1 January
2017, Towry will use commercially reasonable endeavours either to
procure the occurrence of the events set out in paragraphs 1(A)(i)
or 1(A)(ii) above or to obtain the consent of its lenders to the
redemption
4. If between the date of issue of the Loan Notes and the date
all sums payable in respect of the Loan Notes have been paid, Towry
pays any dividend or makes any other distribution it will apply an
amount equal to the lower of (i) the aggregate amount of such
dividend or other distribution and (ii) the aggregate amount
outstanding under the Loan Notes, in satisfying the amount due
under the Loan Notes.
5. Full details of the Loan Notes will be contained in the Scheme Document.
APPENDIX 3
SOURCES OF INFORMATION AND BASES OF CALCULATION
In this announcement:
1. Unless otherwise stated:
-- financial information relating to the Towry Group has been
extracted or derived (without any adjustment) from the audited
annual report and accounts for Towry for the year ended 31 December
2013; and
-- financial information relating to the Ashcourt Rowan Group
has been extracted or derived (without any adjustment) from the
audited annual report and accounts for Ashcourt Rowan for the year
ended 31 March 2014 and Ashcourt Rowan's announcement dated 26
November 2014 of its half yearly results for the six months ended
30 September 2014 (which are unaudited).
2. The cash value of the Transaction is calculated on the basis
of the fully diluted number of Ashcourt Rowan Shares in issue
referred to in paragraph 4 below and excludes, for the avoidance of
doubt, the value of the Loan Notes.
3. As at the close of business on 30 January 2015, being the
last business day prior to the date of this announcement, Ashcourt
Rowan had in issue 35,489,566 Ashcourt Rowan Shares. The
International Securities Identification Number for Ashcourt Rowan
Shares is GB00B6540P35.
4. The fully diluted share capital of Ashcourt Rowan (being
35,836,540 Ashcourt Rowan Shares) is calculated on the basis
of:
-- the number of issued Ashcourt Rowan Shares referred to in paragraph 3 above; and
-- any further Ashcourt Rowan Shares which may be issued on or
after the date of this announcement on the exercise of options or
vesting of awards under the Ashcourt Rowan Share Schemes, amounting
in aggregate to 346,974 Ashcourt Rowan Shares.
5. Unless otherwise stated, all prices and closing prices for
Ashcourt Rowan Shares are closing middle market quotations derived
from the London Stock Exchange Daily Official List (SEDOL).
6. The premium calculations to the price per Ashcourt Rowan
Share have been calculated by reference to a price of 168.5 pence
per Ashcourt Rowan Share (being the closing price on 30 January
2015, the last business day prior to the date of this announcement)
and exclude the value of the Loan Notes.
7. The average closing price per Ashcourt Rowan Share of 176.9
pence over the three month period ended 30 January 2015 is derived
from data provided by Factset.
APPENDIX 4
DETAILS OF IRREVOCABLE UNDERTAKINGS
Ashcourt Rowan Directors' irrevocable undertakings
Name of Ashcourt Number of Ashcourt Percentage of Ashcourt
Rowan Director Rowan Shares Rowan issued share
capital
------------------ ------------------- -----------------------
Jonathan Polin 231,645 0.65
------------------ ------------------- -----------------------
This irrevocable undertaking remains binding in the event that a
higher competing offer for Ashcourt Rowan is made, but ceases to be
binding if:
(A) the Scheme Document is not published within 28 days of the
date of this announcement (or such later date as the Panel may
agree);
(B) the Scheme is withdrawn or lapses in accordance with its
terms, except where the Scheme is withdrawn or lapses as a result
of Towry Finance exercising its right to implement the Transaction
by way of an Offer in accordance with the City Code;
(C) in the event that the Transaction is implemented by way of
an Offer, the Offer lapses or is withdrawn
(D) the price per Ashcourt Rowan Share as included in the Scheme
Document or Offer Document (as applicable) is less than 275 pence;
or
(E) the Scheme does not become effective prior to 2 August 2015.
Other irrevocable undertakings
Name of Ashcourt Number of Ashcourt Percentage of Ashcourt
Rowan Shareholder Rowan Shares Rowan issued share
capital
----------------------- ------------------- -----------------------
Tetragon Financial
Group 10,472,500 29.51
----------------------- ------------------- -----------------------
The Jodi One Trust 4,463,798 12.58
----------------------- ------------------- -----------------------
The Major Trust 3,422,637 9.64
----------------------- ------------------- -----------------------
Kestrel Investment
Partners 3,383,909 9.53
----------------------- ------------------- -----------------------
River and Mercantile 2,036,664 5.74
----------------------- ------------------- -----------------------
Artemis 1,750,000 4.93
----------------------- ------------------- -----------------------
Cygnet Capital 1,080,760 3.05
----------------------- ------------------- -----------------------
Micro Trading Capital 1,032,433 2.91
----------------------- ------------------- -----------------------
Total 27,642,701 77.89
----------------------- ------------------- -----------------------
Each of these irrevocable undertakings cease to be binding
if:
(A) the Scheme Document is not published within 28 days of the
date of this announcement (or such later date as the Panel may
agree);
(B) the Scheme is withdrawn or lapses in accordance with its terms;
(C) the price per Ashcourt Rowan Share as included in the Scheme
Document or Offer Document (as applicable) is less than 275
pence;
(D) the Scheme does not become effective prior to 2 August 2015;
(E) any other person (other than Jonathan Polin) holding shares,
securities, options, swaps, warrants or other instruments in
Ashcourt Rowan provides any irrevocable undertaking in respect of
the Transaction which is on terms significantly different to the
terms of these irrevocable undertakings;
(F) any third party announces before the Ashcourt Rowan General
Meeting and the Court Meeting a firm intention to make a general
offer (whether by way of an offer or a scheme of arrangement) for
all Ashcourt Rowan Shares not already owned by such third party
which provides for an amount or value of consideration that
represents, at the sole determination of each Ashcourt Rowan
Shareholder who has given the irrevocable undertaking, an
improvement to the Transaction Consideration; or
(G) the Transaction is implemented by way of an Offer, in which
case each of the Ashcourt Rowan Shareholders named immediately
above has indicated only a non-binding intention to accept or
procure acceptance of the Offer.
APPENDIX 5
DEFINITIONS
"AIM" the Alternative Investment Market
of the London Stock Exchange
"Ashcourt Rowan" Ashcourt Rowan plc, incorporated
in England and Wales with registered
number 05406945
"Ashcourt Rowan Directors" the directors of Ashcourt Rowan
as at the date of this announcement
or, where the context so requires,
the directors of Ashcourt Rowan
from time to time
"Ashcourt Rowan General the general meeting of Ashcourt
Meeting" Rowan Shareholders to be convened
to consider and if thought fit pass,
amongst other things, a special
resolution in relation to the Scheme
and the Transaction
"Ashcourt Rowan Group" Ashcourt Rowan and its Subsidiary
and associated undertakings
"Ashcourt Rowan Share Schemes" the Ashcourt Rowan plc Long Term
Incentive Plan, Ashcourt Rowan plc
Share Incentive Plan and the contracts
for differences comprising the Ashcourt
Rowan Growth Securities Ownership
Plan
"Ashcourt Rowan Shareholders" the holders of Ashcourt Rowan Shares
"Ashcourt Rowan Shares" the ordinary shares of 20 pence
each in the capital of Ashcourt
Rowan
"Board" the board of directors
"Business Day" a day, (other than a Saturday, Sunday,
public or bank holiday) on which
banks are generally open for business
in London other than solely for
trading and settlement in Euro
"Cantor Fitzgerald" Cantor Fitzgerald Europe, an unlimited
liability company which is authorised
and regulated by the FCA and whose
registered address is 1 Churchill
Place, London E14 5RB
"City Code" the City Code on Takeovers and Mergers
"Closing Price" the closing middle market quotations
of a share derived from the Daily
Official List of the London Stock
Exchange
"Conditions" the conditions of the Transaction
set out in Appendix 1 to this announcement
"Court" the High Court of Justice in England
and Wales
"Court Meeting" the meeting of the Ashcourt Rowan
Shareholders convened by order of
the Court pursuant to section 899
of the Companies Act 2006 for the
purpose of considering and, if thought
fit, approving the Scheme (with
or without amendment) and any adjournment
thereof
"CREST" the relevant system (as defined
in the Uncertificated Securities
Regulations 2001 (SI 2001/3755)
in respect of which Euroclear UK
& Ireland Limited is the Operator
(as defined in the Regulations)
"Disclosed" the information which has been fairly
disclosed by or on behalf of Ashcourt
Rowan:
(i) in the annual report and accounts
of the Ashcourt Rowan Group for
the financial year ended 31 March
2014; (ii) in the half yearly results
announcement of the Ashcourt Rowan
Group for the six months to 30 September
2014; (iii) in this announcement;
(iv) in any other public announcement
by, or on behalf of, Ashcourt Rowan
in accordance with the Listing Rules,
Disclosure Rules, Transparency Rules
or AIM Rules (as applicable) prior
to the date of this announcement;
(v) in writing prior to the date
of this announcement and addressed
directly to the Board of Towry;
(vi) prior to the date of this announcement
to Towry or its financial, accounting,
legal or tax advisers (specifically
as advisers in relation to the Transaction);
or (vii) fairly, in the virtual
data room operated by or on behalf
of Ashcourt Rowan in respect of
the Transaction prior to 21 January
2015.
"EBITDA" earnings before interest, taxes,
depreciation and amortisation
"Effective Date" the date on which the Scheme becomes
effective in accordance with its
terms
"Enlarged Group" the Ashcourt Rowan Group and the
Towry Group following completion
of the Transaction
"Executives" Jonathan Polin, Alfio Tagliabue
and Steve Haines
"Facilities Agreement" the GBP169,000,000 facility agreement
dated 1 February 2015 between, amongst
others, Towry as parent, Towry Finance
as original borrower, certain Subsidiaries
of Towry (as guarantors), GE Corporate
Finance Bank SAS, HSBC Bank plc,
The Royal Bank of Scotland plc and
Intermediate Capital Managers Limited
as mandated lead arrangers and The
Royal Bank of Scotland plc as agent
and security agent, as it may be
amended from time to time
"FCA" the Financial Conduct Authority
"GSOP" the Ashcourt Rowan Growth Securities
Ownership Plan approved by Ashcourt
Rowan Shareholders in 2012 and known
as the "Ashcourt Rowan 2012 Share
Based Incentive Plan"
"Keefe, Bruyette & Woods" Stifel Nicolaus Europe Limited,
trading as Keefe, Bruyette & Woods
Europe
"Listing" (i) a successful application being
made for the admission of any part
of the share capital of any member
of the Towry Group (or holding company
of any member of the Towry Group)
to the Official List maintained
by the FCA and the admission of
any part of the share capital of
any member of the Towry Group (or
holding company of any member of
the Towry Group) to trading on the
London Stock Exchange; or (ii) the
grant of permission to deal in any
part of the issued share capital
of any member of the Towry Group
(or holding company of any member
of the Towry Group) on AIM or the
Main Board or the Growth Market
of the ICAP Securities & Derivatives
Exchange (ISDX) or on any recognised
investment exchange (as that term
is used in the Financial Services
and Markets Act 2000) or in or on
any exchange or market replacing
the same or any other exchange or
market in any country
"Loan Notes" the loan notes to be issued by Towry
to Ashcourt Rowan Shareholders as
part of the Transaction Consideration,
the terms of which are set out in
Appendix 2
"London Stock Exchange" London Stock Exchange plc
"Long-Stop Date" 2 August 2015
"Meetings" the Court Meeting and the Ashcourt
Rowan General Meeting
"Morgan Stanley" Morgan Stanley & Co. International
plc
"Offer" should the Transaction be implemented
by way of a takeover offer as defined
in Chapter 3 of Part 28 of the Companies
Act 2006, the offer to be made by
or on behalf of Towry to acquire
the entire issued and to be issued
ordinary share capital of Ashcourt
Rowan and, where the context admits,
any subsequent revision, variation,
extension or renewal of such offer
"Offer Document" should the Transaction be implemented
by means of the Offer, the document
to be sent to Ashcourt Rowan Shareholders
which will contain, amongst other
things, the terms and conditions
of the Offer
"Offer Period" the period commencing on 2 February
2015 and ending on the earlier of
the date on which the Scheme becomes
effective and/or the date on which
the Scheme lapses or is withdrawn
(or such other date as the Panel
may decide)
"Opening Position Disclosure" an announcement containing details
of interests or short positions
in, or rights to subscribe for,
any relevant securities of a party
to the offer if the person concerned
has such a position
"Overseas Shareholders" Scheme Shareholders who are resident
in, ordinarily resident in, or citizens
of, jurisdictions outside the United
Kingdom
"Palamon" Palamon Capital Partners, L.P. and
any trust, fund or other entity
which is advised or managed by,
or is under the control of, Palamon
Capital Partners, L.P. or any of
its affiliates (other than any portfolio
investment or portfolio company)
"Panel" the Panel on Takeovers and Mergers
"Phase 2 CMA Reference" a referral to the Chair of the Competition
and Markets Authority for the constitution
of a group under Schedule 4 to the
Enterprise and Regulatory Reform
Act 2013
"Restricted Jurisdiction" any jurisdiction where local laws
or regulations may result in a significant
risk of civil, regulatory or criminal
exposure if information concerning
the Transaction is sent or made
available to Ashcourt Rowan Shareholders
in that jurisdiction
"Scheme" the proposed scheme of arrangement
under Part 26 of the Companies Act
2006 between Ashcourt Rowan and
Ashcourt Rowan Shareholders to implement
the Transaction
"Scheme Court Hearing" the hearing of the Court to sanction
the Scheme under section 899 of
the Companies Act 2006
"Scheme Court Order" the order of the Court sanctioning
the Scheme under section 899 of
the Companies Act 2006
"Scheme Document" the document to be dispatched to
Ashcourt Rowan Shareholders including
the particulars required by section
897 of the Companies Act 2006
"Scheme Shareholder" holders of Scheme Shares
"Scheme Shares" 1. the Ashcourt Rowan Shares in
issue at the date of the Scheme
Document;
2. any Ashcourt Rowan Shares issued
after the date of the Scheme Document
and prior to the Voting Record Time;
and
3. any Ashcourt Rowan Shares issued
at or after the Voting Record Time
and prior to 6.00 p.m. on the day
before the date on which the Scheme
Court Order is made in respect of
which the original or any subsequent
holder thereof is bound by the Scheme,
or shall by such time have agreed
in writing to be bound by the Scheme
"Settlement Agreements" the settlement agreements entered
into between Ashcourt Rowan and
each of the Executives dated 1 February
2015 in terms of which Ashcourt
Rowan has agreed (subject to the
approval of Ashcourt Rowan Shareholders
being obtained at the Ashcourt Rowan
General Meeting and the completion
of the Transaction) to make certain
contractual and ex gratia payments
to the Executives, as further described
in paragraph 8 of this announcement
"Subsidiary" has the meaning given in section
1159 of the Companies Act 2006
"Towry" Towry Holdings Limited, incorporated
in England and Wales with registered
number 04773122
"Towry Finance" Towry Finance Company Limited, incorporated
in England and Wales with registered
number 05721344
"Towry Group" Towry and its Subsidiary and associated
undertakings
"Transaction" the proposed acquisition of the
entire issued and to be issued share
capital of Ashcourt Rowan by Towry
Finance, to be effected by the Scheme
as described in this document (or
by the Offer under certain circumstances
described in this document)
"Transaction Consideration" the consideration payable in respect
of the Ashcourt Rowan Shares in
connection with the Transaction
"UK" or "United Kingdom" the United Kingdom of Great Britain
and Northern Ireland
"US" or "United States" the United States of America, its
territories and possessions, any
state of the United States of America
and the District of Columbia
"Voting Record Time" 6.00 p.m. on the day prior to the
day immediately before the Court
Meeting or any adjournment thereof
(as the case may be)
"Wider Ashcourt Rowan Group" has the meaning given in Appendix
1
"Wider Towry Group" has the meaning given in Appendix
1
526720425a
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The company news service from the London Stock Exchange
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