TIDMBHRD
RNS Number : 8675Q
MSQ Partners Limited
24 June 2020
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION
WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR
REGULATIONS OF SUCH JURISDICTION
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) No. 596/2014
FOR IMMEDIATE RELEASE
24 June 2020
RECOMMED CASH ACQUISITION
of
Be Heard Group plc
by
MSQ Partners Ltd
a company ultimately owned and controlled by Ensco 1314
Limited
to be effected by means of a Court-sanctioned scheme of
arrangement under Part 26 of the Companies Act 2006
Summary
-- The Board of Bidco and the Independent Directors of Be Heard
are pleased to announce that they have reached agreement on the
terms of a recommended cash offer, to be made by Bidco, to acquire
the entire issued and to be issued share capital of Be Heard.
-- Bidco is a wholly owned subsidiary of Midco, which is a
wholly owned subsidiary of Topco. The shareholders of Topco are the
LDC Funds and various members of the Wider Bidco Group management
team.
-- Under the terms of the Acquisition, each Scheme Shareholder will be entitled to receive:
for each Scheme Share held 0.5 pence in cash
-- The Offer Price values the entire issued and to be issued
share capital of Be Heard at approximately GBP6.2 million on a
fully diluted basis.
-- The Offer Price represents a premium of approximately:
-- 17.6 per cent. to the Closing Price of 0.43 pence per Be
Heard Share on the Last Practicable Date;
-- 92.3 per cent. to the Closing Price of 0.26 pence per Be
Heard Share on 8 June 2020, being the Business Day prior to the
start of the Offer Period;
-- 117.4 per cent. to the Closing Price of 0.23 pence per Be
Heard Share on 17 April 2020, being the Business Day prior to the
release of Be Heard's audited final results for the 12 months
ending 31 December 2019; and
-- 83.8 per cent. to the average Closing Price of 0.27 pence per
Be Heard Share during the three-month period ended on the Last
Practicable Date.
-- The Rollover Managers have agreed with Bidco, pursuant to the
Rollover Manager Arrangements, to exchange their Be Heard Shares
for shares to be ultimately issued by Topco, the ultimate holding
company of Bidco.
-- Certain of the Rollover Managers and certain ex-employees of
the Be Heard Group have also agreed to amend the basis on which
their pre-existing entitlement to the remaining balance of deferred
consideration amounts due to them by the Company will be paid.
-- In addition, certain employees of the Be Heard Group are
being given the opportunity to subscribe for sweet equity in Topco
and certain members of the senior management team of the Be Heard
Group are being given the opportunity to subscribe for loan notes
to be issued by Topco.
-- Upon the Scheme becoming Effective, Be Heard will dispose of
the entire issued share capital of The Corner to the Corner
Purchasers.
-- The Acquisition is intended to be effected by means of a
scheme of arrangement under Part 26 of the Companies Act (or if
Bidco elects, with the consent of the Panel, by way of a Takeover
Offer) and will be subject to the approval of the Scheme at the
Court Meeting and the Resolutions at the General Meeting.
Independent Directors
-- In light of his interest in the Rollover Manager
Arrangements, Ben Rudman, Chief Operating Officer of Be Heard, has
not participated in the appraisal by the Board of Be Heard of the
Acquisition. The Board of Be Heard has constituted a committee
comprised of the Independent Directors for the purpose of
evaluating and recommending the Acquisition to Be Heard
Shareholders.
-- The Independent Directors are David Morrison, Simon Pyper,
David Wilkinson and David Poutney, who are Non-Executive Chairman,
Chief Executive Officer, Senior Independent Non-Executive Director
and Non-Executive Director of Be Heard respectively.
Recommendation
-- The Independent Directors, who have been so advised by Cairn
as to the financial terms of the Acquisition, unanimously consider
the terms of the Acquisition to be fair and reasonable. In
providing its advice to the Independent Directors, Cairn has taken
into account the commercial assessments of the Independent
Directors. Cairn is providing independent financial advice to the
Independent Directors for the purposes of Rule 3 of the Code.
-- Accordingly, the Independent Directors unanimously intend to
recommend that Be Heard Shareholders vote in favour of the Scheme
at the Court Meeting and the Resolutions to be proposed at the
General Meeting as they have irrevocably undertaken to do in
respect of their own beneficial holdings, amounting to, in
aggregate, 23,610,378 Be Heard Shares and representing
approximately 1.89 per cent. of the Be Heard Shares.
Irrevocable undertakings and support for the Acquisition
-- In addition to the Directors, Bidco has received irrevocable
undertakings from certain other Be Heard Shareholders, excluding
the Rollover Managers, to vote (or to procure the voting) in favour
of the Scheme at the Court Meeting and the Resolutions to be
proposed at the General Meeting (or, in the event that the
Acquisition is implemented by way of a Takeover Offer, to accept or
procure acceptance of the Takeover Offer) in respect of a total of
517,922,913 Be Heard Shares, representing, in aggregate,
approximately 41.54 per cent. of the Be Heard Shares (and
representing approximately 52.39 per cent. of the Be Heard Shares
eligible to vote at the Court Meeting, approximately 52.39 per
cent. of the Be Heard Shares eligible to vote at the General
Meeting in respect of the Rollover Managers Resolution, 46.10 per
cent. of the Be Heard Shares eligible to vote at the General
Meeting in respect of the Earn Out Resolution and 46.83 per cent.
of the Be Heard Shares eligible to vote at the General Meeting in
respect of the Corner Resolution), in each case as at the Last
Practicable Date.
-- In light of their interests in the Rollover Manager
Arrangements described in paragraph 11.1 of this Announcement, the
Rollover Managers will not be entitled to vote at the Court Meeting
and will not be entitled to vote at the General Meeting in respect
of the Rollover Managers Resolution. However, each of the Rollover
Managers have provided Bidco with an irrevocable undertaking to
vote (or procure the voting) in favour of the Special Resolution to
approve, inter alia , the implementation of the Scheme to be
proposed at the General Meeting (or, in the event that the
Acquisition is implemented by way of a Takeover Offer, to accept or
procure acceptance of the Takeover Offer), the Earn Out Resolution
and the Corner Resolution in respect of 258,301,333 Be Heard
Shares, being their entire beneficial holdings of Be Heard Shares
and representing, in aggregate, approximately 20.72 per cent. of
the Be Heard Shares, approximately 22.99 per cent. of the Be Heard
Shares eligible to vote in respect of the Earn Out Resolution and
approximately 23.35 per cent. of the Be Heard Shares eligible to
vote in respect of the Corner Resolution, in each case as at the
Last Practicable Date. These irrevocable undertakings remain
binding even in the event of a higher competing offer.
-- Further details of these irrevocable undertakings are set out
in Appendix III to this Announcement.
Rollover Manager Arrangements
-- Pursuant to the Rollover Manager Arrangements, the Rollover
Managers have agreed to exchange their Be Heard Shares for
securities that will ultimately be issued by Topco via an exchange
mechanism, thereby aligning their economic interests with the
performance of the Wider Bidco Group by way of participation in the
equity structure of Topco. The Rollover Manager Arrangements will
result in the Rollover Managers owning shares in Topco in the
manner more particularly described in paragraph 11.1 of this
Announcement.
-- The Independent Directors support Bidco's belief that the
ongoing employment of the Rollover Managers by the Be Heard Group
is an important element of the Acquisition, and are pleased that
they will continue as employees of the Be Heard Group and as
investors in Topco following completion of the Acquisition.
Sweet Equity Arrangements
-- Pursuant to the Sweet Equity Arrangements, the Sweet Equity
Participants will receive equity in Topco to further incentivise
them. The Sweet Equity Arrangements will result in the Sweet Equity
Participants owning shares in Topco more particularly described in
paragraph 11.2 of this Announcement.
-- The Independent Directors support Bidco's belief that the
ongoing employment of the Sweet Equity Participants by the Be Heard
Group is an important element of the Acquisition, and are pleased
that they will continue as employees of the Be Heard Group in their
current roles and as investors in Topco following completion of the
Acquisition.
Earn Out Arrangements
-- Pursuant to the Earn Out Arrangements, the Leaver Earn Out
Participants have agreed to amend the basis on which their
pre-existing entitlement to the remaining balance of deferred
consideration amounts due to them will be paid by the Company,
which includes the reduction in the aggregate amount of the
payments and a deferral of a portion of the deferred consideration
over a 3 year period.
-- The Independent Directors support Bidco's belief that the
Earn Out Arrangements are an important element of the Acquisition,
and are pleased that they have been successfully negotiated between
the relevant parties.
The Corner Disposal
-- As part of the Acquisition, it has been agreed that The
Corner will be transferred to the Corner Purchasers.
-- The Independent Directors support Bidco's belief that the
Corner Disposal is the right thing for the parties involved and for
the continuing business of the Enlarged Group following completion
of the Acquisition, and are pleased that this has been successfully
negotiated between the relevant parties.
Scheme Document
-- The Scheme Document will include further information about
the Acquisition, together with notices convening the Court Meeting
and the General Meeting and the expected timetable of the Scheme,
and will specify the actions recommended to be taken by Be Heard
Shareholders. The Scheme Document will be sent to Be Heard
Shareholders as soon as reasonably practicable and, in any event
(save with the consent of the Panel), within 28 days of this
Announcement and will be made available by Be Heard and Bidco at
www.beheardpartnership.com/investors and www.msqpartners.com
respectively (subject to certain restrictions in relation to
persons in any Restricted Jurisdiction).
-- The Acquisition will be conditional, amongst other things, on the following matters:
-- the approval of the Scheme by a majority in number of the
Scheme Shareholders, either in person or by proxy, representing at
least 75 per cent. in value of the Be Heard Shares voted;
-- the approval by Be Heard Shareholders, representing at least
75 per cent. of the votes cast, of the Special Resolution;
-- the approval on a poll by Be Heard Rollover Independent
Shareholders, representing a simple majority of the votes cast, of
the Rollover Managers Resolution;
-- the approval on a poll by Be Heard Earn Out Independent
Shareholders, representing a simple majority of the votes cast, of
the Earn Out Resolution;
-- the approval on a poll by Be Heard Corner Independent
Shareholders, representing a simple majority of the votes cast, of
the Corner Resolution;
-- the sanction of the Scheme by the Court;
-- the Scheme becoming Effective by no later than the Long Stop Date; and
-- the satisfaction of the other Conditions set out in Appendix I to this Announcement.
Comments on the Acquisition
Commenting on the Acquisition, David Morrison, Chairman of Be
Heard said:
" There is compelling commercial logic in bringing together the
two complementary businesses of Be Heard and MSQ Partners. We
expect the combined business to be better placed to win more and
larger clients both within the United Kingdom and internationally,
particularly in North America and South East Asia. Moreover, with
the support of LDC, it will have potential access to capital to
fund further growth.
In reaching the decision to recommend this offer, the Board of
Be Heard considered in detail the best interests of all
stakeholders in the Company. We believe that MSQ Partners' offer
provides a sensible outcome for shareholders, management and other
stakeholders. In particular, the cash offer provides certainty of
value for shareholders, at a level that is in excess of the returns
that we consider Be Heard could generate in the foreseeable future
by continuing to trade on a standalone basis. "
Commenting on the Acquisition, Peter Reid, Chief Executive
Officer of Bidco said:
" We are delighted that the Independent Directors are
recommending our offer to acquire Be Heard. We believe there are a
number of benefits to both MSQ Partners and Be Heard that would
come out of this proposed deal, particularly in relation to access
to a wider portfolio of clients and technical knowledge. The
Acquisition will enable MSQ Partners to accelerate our ability to
win more, and larger, clients, grow our base in London and roll-out
Be Heard's capabilities across our global offices. "
The person responsible for arranging the release of this
Announcement on behalf of Bidco is Peter Reid, a director of
Bidco.
General
This summary should be read in conjunction with, and is subject
to, the full text of this Announcement (including its
Appendices).
The Acquisition will be subject to the Conditions and further
terms set out in Appendix I to this Announcement and to the full
terms and conditions which will be set out in the Scheme Document.
Appendix II to this Announcement contains the sources of and bases
of calculation for certain information contained in this
Announcement. Appendix III to this Announcement contains a summary
of the irrevocable undertakings received in relation to the
Acquisition. Appendix IV to this Announcement contains definitions
of certain expressions used in this summary and in this
Announcement.
Enquiries:
MSQ Partners Ltd Tel: +44 (0) 203
026 6608
Dan Yardley
Zeus Capital Limited (Financial Adviser to Tel: +44 (0) 161
Bidco) 831 1512
Richard Darlington / Dan Bate
Be Heard Group plc Tel: +44 (0) 203
828 6269
David Morrison / Simon Pyper
Cairn Financial Advisers LLP (Financial Adviser Tel: +44 (0) 207
and Rule 3 Adviser to Be Heard) 213 0880
James Lewis / Jo Turner
Dowgate Capital Limited (Broker to Be Heard) Tel: +44 (0) 203
903 7715
James Serjeant
Hudson Sandler (Financial PR for Be Heard) Tel: +44 (0) 207
796 4133
Daniel de Belder / Nick Lyon
Addleshaw Goddard LLP is providing legal advice to Bidco.
Osborne Clarke LLP is providing legal advice to Be Heard.
Important notices
Zeus Capital, which is authorised and regulated in the United
Kingdom by the Financial Conduct Authority, is acting exclusively
as financial adviser to Bidco and for no one else in connection
with the Acquisition or any matters referred to in this
Announcement and will not be responsible to anyone other than Bidco
for providing the protections afforded to its clients nor for
providing advice in relation to the Acquisition, the contents of
this Announcement or any other matters referred to in this
Announcement.
Cairn, which is authorised and regulated in the United Kingdom
by the Financial Conduct Authority, is acting exclusively for Be
Heard and for no one else in connection with the Acquisition or any
matters referred to in this Announcement and will not be
responsible to anyone other than Be Heard for providing the
protections afforded to its clients nor for providing advice in
relation to the Acquisition, the contents of this Announcement or
any other matters referred to in this Announcement.
This Announcement is for information purposes only and is not
intended to and does not constitute, or form part of, any offer,
invitation, inducement or the solicitation of an offer to purchase
or otherwise acquire, subscribe for, sell or otherwise dispose of
or exercise rights in respect of any securities, or the
solicitation of any vote or approval of an offer to buy, securities
in any jurisdiction (pursuant to the Acquisition or otherwise) nor
shall there be any sale, issuance or transfer of any securities
pursuant to the Acquisition in any jurisdiction in contravention of
any applicable laws.
The Acquisition will be made solely by means of the Scheme
Document (or, if the Acquisition is implemented by way of a
Takeover Offer, any document by which the Takeover Offer is made),
which will contain the full terms and conditions of the
Acquisition, including details of how to vote in respect of the
Scheme and the Resolutions proposed at the General Meeting. Any
decision, vote or other response in respect of the Acquisition
should be made only on the basis of information contained in the
Scheme Document. Be Heard will prepare the Scheme Document to be
distributed to Be Heard Shareholders at no cost to them. Be Heard
Shareholders are advised to read the formal documentation in
relation to the Acquisition carefully once it becomes available
because it will contain important information relating to the
Acquisition.
This Announcement does not constitute a prospectus or a
prospectus exempted document.
This Announcement has been prepared for the purpose of complying
with English law and the Code and the information disclosed may not
be the same as that which would have been disclosed if this
Announcement had been prepared in accordance with the laws of
jurisdictions outside the United Kingdom.
Overseas jurisdictions
The release, publication or distribution of this Announcement in
certain jurisdictions other than the United Kingdom may be
restricted by law and the ability of Be Heard Shareholders who are
not resident in the United Kingdom to participate in the
Acquisition may be restricted by the laws and/or regulations of
those jurisdictions. In particular, the ability of persons who are
not resident in the United Kingdom to vote their Scheme Shares with
respect to the Scheme at the Court Meeting or with respect to the
Resolutions at the General Meeting, or to execute and deliver Forms
of Proxy appointing another to vote at the Court Meeting and/or
General Meeting on their behalf, may be affected by the laws of the
relevant jurisdictions in which they are located. Therefore, any
persons who are subject to the laws and regulations of any
jurisdiction other than the United Kingdom and Be Heard
Shareholders who are not resident in the United Kingdom should
inform themselves of, and observe, any applicable requirements in
their jurisdiction. Any failure to comply with the applicable
requirements may constitute a violation of the laws and/or
regulations of any such jurisdiction. To the fullest extent
permitted by applicable law, the Wider Bidco Group and persons
involved in the Acquisition disclaim any responsibility or
liability for the violation of such restrictions by any person.
The Acquisition will not be made, directly or indirectly, in,
into or from a Restricted Jurisdiction where to do so would violate
the laws of that jurisdiction and no person may vote in favour of
the Acquisition by any use, means, instrumentality or form within a
Restricted Jurisdiction or any other jurisdiction if to do so would
constitute a violation of the laws of that jurisdiction.
Accordingly, copies of this Announcement and any formal
documentation relating to the Acquisition are not being, and must
not be, directly or indirectly, mailed or otherwise forwarded,
distributed or sent in or into or from any Restricted Jurisdiction
and persons receiving such documents (including custodians,
nominees and trustees) must not mail or otherwise forward,
distribute or send them in or into or from any Restricted
Jurisdiction. Doing so may render invalid any related purported
vote in respect of acceptance of the Acquisition.
This Announcement has been prepared for the purposes of
complying with English law and the Code and the information
disclosed may not be the same as that which would have been
disclosed if this Announcement had been prepared in accordance with
the laws of jurisdictions outside England.
If the Acquisition is implemented by way of a Takeover Offer
(unless otherwise permitted by applicable law and regulation), the
Takeover Offer may not be made, directly or indirectly, in or into
or by use of the mails or any other means or instrumentality
(including, without limitation, facsimile, e-mail or other
electronic transmission, telex or telephone) of interstate or
foreign commerce of, or any facility of a national, state or other
securities exchange of, any Restricted Jurisdiction and the
Takeover Offer will not be capable of acceptance by any such use,
means, instrumentality or facilities or from within any Restricted
Jurisdiction.
Further details in relation to Be Heard Shareholders in overseas
jurisdictions will be contained in the Scheme Document.
Notice to US investors
Be Heard Shareholders in the United States should note that the
Acquisition relates to the securities of a company organised under
the laws of England and Wales and is proposed to be effected by
means of a scheme of arrangement under the laws of England and
Wales. This Announcement, the Scheme Document and certain other
documents relating to the Acquisition have been or will be prepared
in accordance with English law, the Code and UK disclosure
requirements, format and style, all of which differ from those in
the United States. 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
Acquisition is subject to the disclosure requirements of and
practices applicable in the United Kingdom to schemes of
arrangement, which differ from the disclosure requirements of the
United States tender offer and proxy solicitation rules.
None of the securities referred to in this Announcement have
been approved or disapproved by the SEC, any state securities
commission in the United States or any other US regulatory
authority, nor have such authorities passed upon or determined the
adequacy or accuracy of the information contained in this document.
Any representation to the contrary is a criminal offence in the
United States.
Be Heard's financial statements, and all financial information
that is included in this Announcement or that may be included in
the Scheme Document or any other documents relating to the
Acquisition, have been prepared in accordance with International
Financial Reporting Standards and may not be comparable to
financial statements of companies in the United States or other
companies whose financial statements are prepared in accordance
with US generally accepted accounting principles. If Bidco
exercises its right, in the circumstances provided for in this
Announcement, to implement the Acquisition by way of a Takeover
Offer, such Takeover Offer will only be made in the United States
in accordance with the US Exchange Act.
In accordance with normal UK practice and pursuant to Rule
14e-5(b) of the US Exchange Act, Bidco, certain affiliated
companies and their respective nominees or brokers (acting as
agents) may make certain purchases of, or arrangements to purchase,
Be Heard Shares, other than pursuant to the Acquisition, until the
date on which the Takeover Offer and/or Scheme becomes Effective,
lapses or is otherwise withdrawn. If such purchases or arrangements
to purchase were to be made, they would be made outside the US and
would comply with applicable law, including the US Exchange Act.
These purchases and activities by exempt principal traders which
are required to be made public in the United Kingdom pursuant to
the Code will be reported to a Regulatory Information Service and
will be available on the London Stock Exchange website at
www.londonstockexchange.com. This information will also be publicly
disclosed in the US to the extent that such information is made
public in the United Kingdom.
The receipt of cash pursuant to the Acquisition by a US
Shareholder as consideration pursuant to the terms of the
Acquisition may be a taxable transaction for US federal income tax
purposes and under applicable US state and local, as well as
foreign and other, tax laws. Each US Shareholder is urged to
consult his or her independent professional adviser immediately
regarding the tax consequences of the Acquisition applicable to him
or her.
Forward-looking statements
This Announcement contains certain statements about Topco, Bidco
and Be Heard that are, or may be deemed to be, "forward-looking
statements" which are prospective in nature. All statements other
than statements of historical fact, are or may be deemed to be,
forward-looking statements. Forward-looking statements are based on
current expectations and projections about future events and are
therefore subject to known and unknown risks and uncertainties
which could cause actual results, performance or events to differ
materially from the future results, performance or events expressed
or implied by the forward-looking statements. Often, but not
always, forward-looking statements can be identified by the use of
forward-looking words such as "plans", "expects", "is expected",
"is subject to", "budget", "scheduled", "estimates", "forecasts",
"intends", "anticipates", "believes", "targets", "aims",
"projects", "goal", "objective", "outlook", "risks", "seeks" or
words or terms of similar substance or the negative thereof, as
well as variations of such words and phrases or statements that
certain actions, events or results "may", "could", "should",
"would", "might", "probably" or "will" be taken, occur or be
achieved. Such statements are qualified in their entirety by the
inherent risks and uncertainties surrounding future expectations.
Forward-looking statements include, but are not limited to,
statements relating to the following: (a) future capital
expenditures, expenses, revenues, economic performance, financial
conditions, dividend policy, losses and future prospects, (b)
business and management strategies and the expansion and growth of
the operations of Topco, Bidco or Be Heard and (c) the effects of
government regulation on the business of Topco, Bidco or Be Heard.
Such forward-looking statements involve risks and uncertainties
that could significantly affect expected results and are based on
certain key assumptions. There are many factors which could cause
actual results to differ materially from those expressed or implied
in forward-looking statements. Among such factors 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 disposals. Such
statements are qualified in their entirety by the inherent risks
and uncertainties surrounding future expectations.
Due to such uncertainties and risks, readers are cautioned not
to place undue reliance on such forward-looking statements, which
speak only as at the date of this Announcement. By their nature,
forward-looking statements involve known and unknown risks and
uncertainties because they relate to future events and depend on
circumstances that will occur in the future or assumptions about
what will happen in the future. The factors described in the
context of forward-looking statements in this Announcement may
cause the actual results, performance or achievements of any such
person, or industry results and developments, to be materially
different from any results, performance or achievements expressed
or implied by such forward-looking statements. Any forward-looking
statements made in this Announcement on behalf of Topco, Bidco or
Be Heard are made as at the date of this Announcement based on the
opinions and estimates of directors of Topco, Bidco and Be Heard,
respectively. Each of Topco, Bidco and Be Heard, and their
respective members, directors, officers, employees, advisers and
any person acting on behalf of one or more of them, expressly
disclaims any intention or obligation to update or revise any
forward-looking or other statement contained in this Announcement,
whether as a result of new information, future events or otherwise,
except as required by applicable law. Neither Topco, Bidco, Be
Heard, nor their respective members, directors, officers or
employees, advisers or any person acting on their behalf, provides
any representation, assurance or guarantee that the occurrence of
the events expressed or implied in any forward-looking statement in
this Announcement will actually occur.
No forward-looking or other statements have been reviewed by the
auditors of Topco, Bidco or Be Heard. All subsequent oral or
written forward-looking statements attributable to Topco, Bidco, Be
Heard or to any of their respective members, directors, officers,
advisers or employees or any person acting on their behalf are
expressly qualified in their entirety by the cautionary statements
above.
Rounding
Certain figures included in this Announcement have been
subjected to rounding adjustments. Accordingly, figures shown for
the same category presented in different tables may vary slightly
and figures shown as totals in certain tables may not be an
arithmetic aggregation of the figures that precede them.
No profit forecasts or estimates
Save as set out in paragraph 10 of this Announcement, nothing in
this Announcement is intended or shall be deemed to be a forecast,
projection or estimate of the future financial performance of
Topco, Bidco or Be Heard for any period and no statement in this
Announcement should be interpreted to mean that cash flow from
operations, earnings, earnings per share or income for the current
or future financial years would necessarily match or exceed the
historical published cash flow from operations, earnings, earnings
per share or income of Be Heard.
Disclosure requirements of the Code
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) of the Code applies must be made by no
later than 3:30 p.m. on the 10(th) Business Day following the
commencement of the Offer Period and, if appropriate, by no later
than 3:30 p.m. 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(s), save to the extent that these details have previously
been disclosed under Rule 8 of the Code. A Dealing Disclosure by a
person to whom Rule 8.3(b) of the Code applies must be made by no
later than 3:30 p.m. 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 normally be deemed to be a
single person for the purpose of Rule 8.3 of the Code.
Opening Position Disclosures must also be made by the offeree
company and by any offeror and Dealing Disclosures must also be
made by the offeree company, by any offeror and by any persons
acting in concert with any of them (see Rules 8.1, 8.2 and 8.4 of
the Code).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Panel's website at www.thetakeoverpanel.org.uk, including
details of the number of relevant securities in issue, when the
offer period commenced and when any offeror was first identified.
You should contact the Panel's Market Surveillance Unit on +44
(0)20 7638 0129 if you are in any doubt as to whether you are
required to make an Opening Position Disclosure or a Dealing
Disclosure.
Publication on website
A copy of this Announcement and the display documents required
to be published pursuant to Rule 26 of the Code will be made
available free of charge, subject to certain restrictions relating
to persons resident in Restricted Jurisdictions, on Be Heard's
website at www.beheardpartnership.com/investors by no later than
noon on the Business Day immediately following this Announcement.
Neither the content of any website referred to in this Announcement
nor the content of any website accessible from hyperlinks is
incorporated into, or forms part of, this Announcement.
Requesting hard copy documents
Any person who is entitled to be sent a copy of this
Announcement under the Code may request a hard copy of this
Announcement (and any information incorporated by reference in this
Announcement) by contacting Philip Marsden, Company Secretary of Be
Heard, on +44 (0)20 2838 6264.
Save as otherwise referred to above, a hard copy of this
Announcement will not be sent unless requested. Any such person may
also request that all future documents, announcements and
information in relation to the Acquisition should be sent to them
in hard copy form.
Electronic communications
Please be aware that all addresses, electronic addresses (if
any) and certain other information provided by the Be Heard
Shareholders and other relevant persons for the receipt of
communications from Be Heard may be provided to offerors (including
Bidco) during the Offer Period as required under Section 4 of
Appendix 4 of the Code to comply with Rule 2.11(e) of the Code.
General
If you are in any doubt about the contents of this Announcement
or the action you should take, you are recommended to seek your own
independent financial advice immediately from your stockbroker,
bank manager, solicitor or independent financial adviser duly
authorised under the Financial Services and Markets Act 2000 (as
amended from time to time) if you are resident in the United
Kingdom or, if not, from another appropriate authorised independent
financial adviser.
Time
All times stated in this Announcement are London times, unless
otherwise stated.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION
WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR
REGULATIONS OF SUCH JURISDICTION
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) No. 596/2014
FOR IMMEDIATE RELEASE
24 June 2020
RECOMMED ACQUISITION
of
Be Heard Group plc
by
MSQ Partners Ltd
a company ultimately owned and controlled by Ensco 1314 Limited
to be effected by means of a Court-sanctioned scheme of
arrangement under Part 26 of the Companies Act 2006
1. Introduction
The Board of Bidco and the Independent Directors of Be Heard are
pleased to announce that they have reached agreement on the terms
of a recommended cash offer to be made by Bidco to acquire the
entire issued and to be issued share capital of Be Heard.
It is intended that the Acquisition will be implemented by way
of a Court sanctioned scheme of arrangement under Part 26 of the
Companies Act. Bidco reserves the right to elect, with the consent
of the Panel, to implement the Acquisition by way of a Takeover
Offer for the entire issued and to be issued ordinary share capital
of Be Heard as an alternative to the Scheme.
2. The Acquisition
Under the terms of the Acquisition, which shall be subject to
the Conditions and further terms set out in Appendix I to this
Announcement and to be set out in the Scheme Document, Scheme
Shareholders shall be entitled to receive:
for each Scheme Share held 0.5 pence in cash
The Acquisition values the entire issued and to be issued share
capital of Be Heard at approximately GBP6.2 million on a fully
diluted basis.
The Offer Price represents a premium of approximately:
-- 17.6 per cent. to the Closing Price of 0.43 pence per Be
Heard Share on the Last Practicable Date;
-- 92.3 per cent. to the Closing Price of 0.26 pence per Be
Heard Share on 8 June 2020, being the Business Day prior to the
start of the Offer Period ;
-- 117.4 per cent. to the Closing Price of 0.23 pence per Be
Heard Share on 17 April 2020, being the Business Day prior to the
release of Be Heard's audited final results for the 12 months
ending 31 December 2019; and
-- 83.8 per cent. to the average Closing Price of 0.27 pence per
Be Heard Share during the three-month period ended on the Last
Practicable Date.
3. Conditions to the Acquisition
The Acquisition will be subject to the Conditions and further
terms set out in Appendix I to this Announcement and which will be
set out in the Scheme Document, including:
-- the approval of the Scheme by a majority in number of the
Scheme Shareholders, either in person or by proxy, representing at
least 75 per cent. in value of the Be Heard Shares voted;
-- the approval by Be Heard Shareholders, representing at least
75 per cent. of the votes cast, of the Special Resolution;
-- the approval on a poll by Be Heard Rollover Independent
Shareholders, representing a simple majority of the votes cast, of
the Rollover Managers Resolution;
-- the approval on a poll by Be Heard Earn Out Independent
Shareholders, representing a simple majority of the votes cast, of
the Earn Out Resolution;
-- the approval on a poll by Be Heard Corner Independent
Shareholders, representing a simple majority of the votes cast, of
the Corner Resolution;
-- the sanction of the Scheme by the Court;
-- the Scheme becoming Effective by no later than the Long Stop Date; and
-- the satisfaction of the other Conditions set out in Appendix I to this Announcement.
4. Background to and reasons for the Acquisition
The Wider Bidco Group is an international marketing group, which
completed a secondary management buy-out supported by LDC, an
established UK mid-market private equity group, on 10 May 2019. The
Acquisition will enable Bidco to accelerate the expansion plans put
forward at the time of LDC's investment by adding complementary
offerings to its existing group of agencies.
Both Be Heard and the Wider Bidco Group have developed, in
parallel, a complementary, multi-disciplinary offer, and both have
an established history of employee share ownership in each
business. It is envisaged that there would be a number of benefits
of joining the two businesses together, including accelerating the
ability to win more, and larger, clients, accelerating the Wider
Bidco Group's growth by building scale and increasing the Wider
Bidco Group's technical capabilities, particularly in digital tech
and analytics. The combination would also provide the Enlarged
Group with additional scale in the core London market, and enable
the Wider Bidco Group to roll-out Be Heard's capabilities across
the Wider Bidco Group's global footprint in the UK, USA and Asia.
Bidco expects that, following the Acquisition, Be Heard could
derive a number of benefits from being part of the Wider Bidco
Group. These include revenue and cost synergies, access to a wider
portfolio of customers and technical knowledge, and potential
access to capital with the support of LDC.
5. Recommendation by the Independent Directors
Independent Directors
-- In light of his interest in the Rollover Manager
Arrangements, Ben Rudman, Chief Operating Officer of Be Heard, has
not participated in the appraisal by the Board of Be Heard of the
Acquisition. The Board of Be Heard has constituted a committee
comprised of the Independent Directors for the purpose of
evaluating and recommending the Acquisition to Be Heard
Shareholders.
-- The Independent Directors are David Morrison, Simon Pyper,
David Wilkinson and David Poutney, who are Non-Executive Chairman,
Chief Executive Officer, Senior Independent Non-Executive Director
and Non-Executive Director of Be Heard respectively.
Recommendation
-- The Independent Directors, who have been so advised by Cairn
as to the financial terms of the Acquisition, unanimously consider
the terms of the Acquisition to be fair and reasonable. In
providing its advice to the Independent Directors, Cairn has taken
into account the commercial assessments of the Independent
Directors . Cairn is providing independent financial advice to the
Independent Directors for the purposes of Rule 3 of the Code.
-- Accordingly, the Independent Directors unanimously intend to
recommend that Be Heard Shareholders vote in favour of the Scheme
at the Court Meeting and the Resolutions to be proposed at the
General Meeting as they have irrevocably undertaken to do in
respect of their own beneficial holdings, amounting to, in
aggregate, 23,610,378 Be Heard Shares and representing
approximately 1.89 per cent. of the Be Heard Shares.
6. Background to and reasons for the Independent Directors' recommendation
As outlined in paragraph 9 below, Be Heard is constrained by its
capital structure and, in particular, its earn out and debt
servicing obligations. These balance sheet constraints limit the Be
Heard Group's ability to invest in those Be Heard Group companies
that are delivering growth and bring into focus the strategic
challenges facing the Board of Be Heard more generally. Broadly,
the Independent Directors believe that the choice is either to
continue to slowly trade out of the current financial constraints
with the real possibility of losing the founders and other key
employees, or otherwise to consider alternative options that might
deliver a more rapid and satisfactory outcome for all of the
stakeholders in the Be Heard Group.
Whilst the industrial logic behind the original acquisition
strategy was and remains robust, the execution, management and
financing of the acquisitions left the Be Heard Group, at the
beginning of 2020, sub-scale and with very limited ability to raise
additional funding. Therefore, the risks of continuing on the
current basis and trading out of the Be Heard Group's current
financial constraints are not, the Independent Directors believe,
insubstantial, with success dependent upon benign market
conditions, good client retention and, most importantly, the
retention of key employees.
Given these factors, the Board of Be Heard has since last year
spoken to numerous parties, including Bidco, that have expressed an
interest in acquiring the Be Heard Group. The Acquisition is the
culmination of these discussions. In addition, the Independent
Directors have taken into account the fact that Bidco has received
irrevocable undertakings from certain Be Heard Shareholders,
together with the support of the Independent Directors, in respect
of 799,834,624 Be Heard Shares, representing approximately 64.15
per cent. of the Be Heard Shares (and approximately 54.78 per cent.
of the Be Heard Shares eligible to vote at the Court Meeting) as at
the Last Practicable Date.
The Independent Directors have also given due consideration to
Bidco's strategic objectives and welcome Bidco's stated intentions
concerning the Be Heard Group's management and employees, locations
of business and strategic plans. The Independent Directors also
welcome Bidco's confirmation that, following the completion of the
Acquisition, the existing contractual and statutory employment
rights of all Be Heard Group management and employees will be fully
safeguarded in accordance with applicable law, including employer
contributions into Be Heard's pension scheme. The Independent
Directors further welcome the confirmation that Bidco does not
intend to make any immediate restructurings or changes in location
of Be Heard's headquarters and headquarter functions, operations
and places of business.
With this in mind, it is the unanimous view of the Independent
Directors that the Acquisition reflects a full value for the Be
Heard Group and also a fair price for a properly funded acquirer
and provides an opportunity for Be Heard Shareholders to realise
value in cash in the immediate term, whilst ensuring the long-term
future of the Be Heard Group's business, albeit under different
ownership.
7. Irrevocable Undertakings
In addition to the Directors, Bidco has received irrevocable
undertakings from certain other Be Heard Shareholders, excluding
the Rollover Managers, to vote (or to procure the voting) in favour
of the Scheme at the Court Meeting and the Resolutions to be
proposed at the General Meeting (or, in the event that the
Acquisition is implemented by way of a Takeover Offer, to accept or
procure acceptance of the Takeover Offer) in respect of a total of
517,922,913 Be Heard Shares, representing, in aggregate,
approximately 41.54 per cent. of the Be Heard Shares (and
representing approximately 52.39 per cent. of the Be Heard Shares
eligible to vote at the Court Meeting, approximately 52.39 per
cent. of the Be Heard Shares eligible to vote at the General
Meeting in respect of the Rollover Managers Resolution, 46.10 per
cent. of the Be Heard Shares eligible to vote at the General
Meeting in respect of the Earn Out Resolution and 46.83 per cent.
of the Be Heard Shares eligible to vote at the General Meeting in
respect of the Corner Resolution), in each case as at the Last
Practicable Date.
In light of their interests in the Rollover Manager Arrangements
described in paragraph 11.1 of this Announcement, the Rollover
Managers will not be entitled to vote at the Court Meeting and will
not be entitled to vote at the General Meeting in respect of the
Rollover Managers Resolution. However, each of the Rollover
Managers has provided Bidco with an irrevocable undertaking to vote
(or procure the voting) in favour of the Special Resolution to
approve, inter alia , the implementation of the Scheme to be
proposed at the General Meeting (or, in the event that the
Acquisition is implemented by way of a Takeover Offer, to accept or
procure acceptance of the Takeover Offer), the Earn Out Resolution
and the Corner Resolution in respect of 258,301,333 Be Heard
Shares, being their entire beneficial holdings of Be Heard Shares
and representing, in aggregate, approximately 20.72 per cent. of
the Be Heard Shares, approximately 22.99 per cent. of the Be Heard
Shares eligible to vote in respect of the Earn Out Resolution and
approximately 23.35 per cent. of the Be Heard Shares eligible to
vote in respect of the Corner Resolution, in each case as at the
Last Practicable Date. These irrevocable undertakings remain
binding even in the event of a higher competing offer.
Further details of these irrevocable undertakings are set out in
Appendix III to this Announcement.
8. Information on Bidco and LDC
Bidco
Bidco is a wholly owned subsidiary of Midco, which is a wholly
owned subsidiary of Topco. The shareholders of Topco are the LDC
Funds and various members of the Wider Bidco Group management team.
The board of directors of Topco is led by Charles Courtier
(Non-Executive Chairman), and comprises of Peter Reid (Chief
Executive), Daniel Yardley (Chief Financial Officer), Kate Howe,
who has recently joined from Dentsu Aegis Network UK, (Executive
Director), Patrick Sellers (Non-Executive Director), Jonathan Bell
(LDC appointed Non-Executive Director) and John Clarke (LDC
appointed Non-Executive Director).
The Wider Bidco Group
The Wider Bidco Group is an international marketing group with
around 525 employees. Headquartered in the UK, the Wider Bidco
Group has a number of international offices and operates six agency
brands, spanning advertising (The Gate), public relations (Smarts),
customer acquisition marketing (Stack), digital marketing
(twentysix), design and brand strategy (Holmes & Marchant) and
B2B (Stein IAS). Its key clients include Unilever, Peugeot, Nestle
and HM Government. It has an established culture of senior
management shared ownership which helps promote effective
collaboration.
Since its inception in December 2011, Bidco has gone through two
private equity backed investments growing net fee income to
approximately GBP48.0 million for the year ended February 2020.
LDC
LDC is an established UK mid-market private equity specialist
with nearly 40 years' experience of working with management teams.
LDC is an active private equity investor in the UK market,
investing through multiple cycles.
9. Information on Be Heard
Background
Be Heard was incorporated on 17 September 2014 with the aim of
becoming one of the United Kingdom's leading digital media services
groups, focused on helping clients to maximise their return on
investment in digital marketing. It was admitted to trading on AIM
on 23 November 2015. Since admission, Be Heard has grown to around
275 employees, including 35 employees who will leave the business
as part of the Corner Disposal, and has key clients including
Vodafone, Unilever and GSK.
Acquisitions
Be Heard's strategic model was to acquire digitally biased
businesses, which could either operate individually or collectively
to deliver compelling and beneficial outcomes for their clients. To
that end, in a little over a two-year period, Be Heard completed
the following five acquisitions:
-- Agenda21 - acquired in November 2015 and is a digital media
planning and buying business which optimises media and content
across connected devices.
-- MMT - acquired in May 2016 and is a technical consultancy
specialising in the delivery of effective digital solutions.
-- Kameleon - acquired in November 2016 and is a
business-to-business marketing and social influencer business.
-- Freemavens - 75 per cent. acquired in February 2017 and is a
technology and data-driven consultancy, transforming businesses by
turning big data into insights, strategy and practical ideas.
-- The Corner - acquired in December 2017 and is a brand and
creative company which helps clients become more relevant to their
audience through new thinking and new ideas.
Trading since formation
Since its formation, the Be Heard Group has delivered revenue
and adjusted EBITDA growth; however, initially, this was achieved
primarily through its acquisition strategy, and organic growth was
below the levels anticipated. In the period leading up to the end
of 2018, the Be Heard Group's performance in certain areas was
below expectations and this led to the installation of a new
management team under Simon Pyper as interim Chief Executive
Officer in September 2018.
Simon and the new management team reviewed the operating model
of the Be Heard Group, with the aim of improving both profitability
and the working capital position, whilst maintaining investment in
key areas of the business.
Following the implementation of the measures by the new
management team the Be Heard Group has improved revenues and EBITDA
for the financial years ending 31 December 2018 and 31 December
2019. This was primarily driven by strong performance within MMT
and Freemavens, both of which had double digit growth for the past
three years, with MMT's net revenues growing from GBP5.0 million in
2016 to GBP15.2 million in 2019, and Freemavens' from approximately
GBP1.9 million to GBP4.3 million in the same period.
The outlook for 2020 prior to the Covid-19 pandemic remained
broadly neutral, though it did reflect some additional uncertainty
brought about by the United Kingdom's decision to leave the
European Union. Trading in the current financial year started well
and was in line with the Be Heard Directors' expectations, but the
Covid-19 pandemic and government measures to prevent the spread of
the virus are expected to have an adverse impact on the Be Heard
Group's business in this financial year.
Earn outs, balance sheet and access to capital
As is typical within the marketing services sector, each of Be
Heard's acquisitions comprised an initial payment on completion,
with the majority of the balance of the consideration deferred
through various "earn out" arrangements. As at 31 December 2019,
the Be Heard Group's cash earn out liability was GBP8.7 million,
excluding the put and call arrangements to acquire the remaining 25
per cent. of Freemavens' issued share capital not already owned by
the Be Heard Group.
In addition, the Be Heard Group issued GBP4.0 million of
convertible loan notes in November 2017 to part finance the initial
consideration for the acquisition of The Corner. Therefore,
excluding the Freemavens put and call options, the Be Heard Group
had approximately GBP12.7 million of liabilities relating to
historic acquisitions as at 31 December 2019.
The Be Heard Group's earn out liabilities and debt obligations
severely restrict its access to new capital, and also sharply limit
the ability of the Be Heard Group to invest in the companies
acquired. These constraints, combined with the weak share price
resulting from the succession of profit warnings, fetter an
acquisition-led strategy. As a consequence, the Be Heard Group has
had to consider alternative options for growth.
10. Current trading for Be Heard
On 20 April 2020, Be Heard announced the final results of the Be
Heard Group for the 12 months ended 31 December 2019. The full year
results announcement included the following statement on the
current trading and outlook for the Group for the year ended 31
December 2020, made on the basis of accounting consistent with the
Company's accounting policies, which the Be Heard Directors confirm
remains valid:
" The evolving Covid-19 pandemic is having, and will continue to
have a material and adverse impact on the demand and supply side of
economies throughout the world. The effects of this economic shock
will no doubt be profound, even if it should prove to be
short-lived. With regards to the Group, we expect a reduction to
our earnings for the current financial year as clients adopt a
cautious approach and look to defer or curtail engagements, but the
full impact is impossible to assess at present and we have been
guardedly encouraged by both the extension of existing contracts
and new business activity in certain areas.
In mitigation, the Group's response to the sudden economic and
operational challenges brought about by the Covid-19 pandemic, has
been both decisive and quickly implemented. Consequently, we do
expect to remain both profitable (adjusted EBITDA) and cash
generative. "
11. Rollover Manager Arrangements, Sweet Equity Arrangements,
Earn Out Arrangements and the Corner Disposal
11.1 Rollover Manager Arrangements
Pursuant to the Rollover Manager Arrangements:
(a) the Rollover Managers have agreed to exchange their Be Heard
Shares for ordinary shares and ratchet shares that will ultimately
be issued by Topco via an exchange mechanism, thereby aligning
their economic interests with the Wider Bidco Group by way of
participation in the equity structure of Topco in any equity
proceeds over GBP5,000,000 (the " Economic Entitlement ");
(b) the Rollover Managers (other than the Freemavens
Shareholders) have agreed to amend the basis on which their
pre-existing entitlement to the remaining balance of deferred
consideration amounts due to them under the terms of sale and
purchase agreements entered into with the Company in relation to
historical acquisitions, will be paid by the Company. The
amendments include a reduction in the aggregate amount of the
payments for the relevant Rollover Managers to be made and a
deferral of the payment of a portion of the deferred consideration
over a 3 year period, subject to the target company meeting certain
EBITDA or revenue performance thresholds;
(c) the Freemavens Shareholders are entering into the Freemavens
SPA, pursuant to which they will transfer their shares in
Freemavens to Be Heard in exchange for a combination of cash
consideration, and the issue of loan notes in Be Heard, which will,
in turn, be exchanged for ordinary shares and ratchet shares that
will ultimately be issued by Topco via an exchange mechanism;
(d) two of the Rollover Managers, Ben Rudman and James Cannings,
are also investing GBP125,000 and GBP100,000 respectively for a
combination of ordinary equity and loan notes in Topco (the "
Additional Investment ") pursuant to the Subscription Letters;
(e) Ben Rudman will be appointed as a director of Topco upon the
Scheme becoming Effective and will enter into a new service
agreement with Topco (the " Service Agreement ") on terms that are
consistent with executives of the Wider Bidco Group; and
(f) sweet equity arrangements have been put in place pursuant to
which Ben Rudman and certain of the Rollover Managers have
subscribed for equity in Topco in order to incentivise them.
Pursuant to the terms of the Subscription Letters, the Rollover
Managers Sweet Equity Participants are subscribing for 1.00 per
cent. of the Economic Entitlement in Topco (including an
entitlement of 0.50 per cent. to Ben Rudman). As a result, an
aggregate of 1.00 per cent. of the Economic Entitlement in Topco
would be allocated to such individuals on, or shortly after, the
Effective Date.
Pursuant to (a), (d) and (f), the Rollover Managers' Economic
Entitlement in Topco as part of the Rollover Manager Arrangements,
which is conditional upon the Scheme having become Effective in
accordance with its terms, is as follows:
Shareholder shareholding % value % Economic
in Be Heard rollover Entitlement
into Topco in Topco
equity
Chris Palengat 0.37% 100% 0.84%
------------- ------------ -------------
Andrzej Moyseowicz 0.37% 100% 0.84%
------------- ------------ -------------
Richard Armstrong 5.88% 100% 0.73%
------------- ------------ -------------
Ben Rudman 5.59% 100% 1.44%
------------- ------------ -------------
James Cannings 5.59% 100% 0.89%
------------- ------------ -------------
Remaining Rollover
Managers (in aggregate) 2.91% 100% 0.87%
------------- ------------ -------------
TOTAL 20.72% 5.61%
------------- ------------ -------------
Details of the agreements and approvals required to effect the
Rollover Manager Arrangements are more particularly described
below.
11.2 Sweet Equity Arrangements
Sweet equity arrangements will also be put in place pursuant to
which the Sweet Equity Participants will be entitled to subscribe
for equity in Topco in order to incentivise them (the " Sweet
Equity Arrangements ").
Pursuant to the terms of the Shareholders Agreement and/or
Subscription Letters, the Sweet Equity Participants will be
entitled to subscribe for an aggregate of 1.75 per cent. of the
Economic Entitlement in Topco on, or shortly after, the Effective
Date on the basis subscriptions are received from all of the Sweet
Equity Participants. None of the Sweet Equity Participants hold Be
Heard Shares.
11.3 Earn Out Arrangements
Under the terms of sale and purchase agreements entered into by
the Company in relation to historical acquisitions, the Leaver Earn
Out Participants, who are no longer employees of the Company, were
entitled to elements of deferred consideration based on certain
performance targets being met by the relevant target company. The
cash amounts due have crystallised but have not been paid to date.
The Leaver Earn Out Participants, who have a pre-existing
contractual entitlement to the payment of the deferred
consideration, have agreed to an amendment to the basis on which
their deferred consideration will be paid, which includes a
reduction in the aggregate amount of the payments to be made and a
deferral of the payment of a portion of the deferred consideration
over a 3 year period, subject to the target company meeting certain
EBITDA performance thresholds .
Details of the agreements and approvals required to effect the
Earn Out Arrangements are more particularly described below.
11.4 Corner Disposal
The Company acquired the entire issued share capital of The
Corner in 2017. As part of the Acquisition, it has been agreed that
The Corner will be transferred to the Corner Purchasers for an
aggregate consideration of GBP535,000, which shall be set off
against part of the balance of deferred consideration due to be
paid by Be Heard to the Corner Purchasers.
The agreements to be entered into to effect the Corner Disposal
are more particularly described below.
11.5 Agreements effecting the Rollover Manager Arrangements, the
Sweet Equity Arrangements, the Earn Out Arrangement and the Corner
Disposal
The Rollover Managers, the Sweet Equity Participants, the Leaver
Earn Out Participants and the Corner Purchasers have entered into a
number of agreements with Bidco to effect the Rollover Manager
Arrangements, the Sweet Equity Arrangements, the Earn Out
Arrangements and the Corner Disposal.
11.5.1 Rollover Manager Arrangements
The Rollover Managers have entered into a number of conditional
agreements with Bidco and the Company, as relevant, to effect the
Rollover Manager Arrangements as follows:
Sale and Purchase Agreement
A conditional Sale and Purchase Agreement dated on or around the
date of this Announcement entered into by, inter alia, the Rollover
Managers and Bidco provides for the sale by each Rollover Manager
of his Be Heard Shares in consideration for loan notes to be issued
by Bidco. The Rollover Managers hold 258,301,333 Be Heard Shares in
aggregate which will have an aggregate value of GBP1,291,506.
Pursuant to the Sale and Purchase Agreement, loan notes with an
aggregate principal amount of GBP1,291,506 will be issued by Bidco
to the Rollover Managers (the " Bidco Rollover Notes ").
Freemavens Sale and Purchase Agreement and Deed of Variation
A conditional deed of variation dated on or around the date of
this Announcement between the Company, the Freemavens Shareholders
and Freemavens in relation to the Freemavens Shareholders
Agreement. The deed of variation, which is conditional upon the
Scheme becoming Effective, provides for the amendment of the
Freemavens Shareholders Agreement to remove the put and call option
arrangement pursuant to which the Company would be entitled to
acquire the shares held in Freemavens by the Freemavens
Shareholders in certain circumstances.
A conditional sale and purchase agreement dated on or around the
date of this Announcement entered into between the Company, Bidco
and the Freemavens Shareholders provides for the sale by each of
the Freemavens Shareholders of their shares in Freemavens
conditional upon the Scheme becoming Effective, in consideration
for the payment of GBP1.0 million in cash and the issue of
GBP800,000 loan notes in Be Heard (the " Company Loan Notes ") upon
completion and an element of deferred consideration, up to a
maximum amount of GBP1.2 million, payable over a three year period
following completion but dependent on certain EBITDA targets being
met by Freemavens. Following completion of the Freemavens SPA,
Freemavens will become a wholly owned subsidiary of Be Heard. The
Freemavens Shareholders Agreement will also be terminated with
effect from completion of the Freemavens SPA.
Company Put and Call Option Deed
The Company Put and Call Option Deed provides for the transfer
by the Freemavens Shareholders, by means of a put and call option,
of the Company Loan Notes to Bidco. The Freemavens Shareholders
will exchange the Company Loan Notes in consideration for the Bidco
Rollover Notes.
Bidco Put and Call Option Deed
The Bidco Put and Call Option Deed provides for the transfer by
the Rollover Managers, by means of a put and call option, of the
Bidco Rollover Notes. The Rollover Managers will be issued Bidco
Rollover Notes by Bidco either under the Sale and Purchase
Agreement or the Company Put and Call Option Deed (in the case of
the Freemavens Shareholders). The Rollover Managers will exchange
the Bidco Rollover Notes in consideration for the issue by Midco of
loan notes of an aggregate principal amount of GBP2,091,506 (the "
Midco Rollover Notes ").
Midco Put and Call Option Deed
The Midco Put and Call Option Deed provides for the transfer by
the Rollover Managers, by means of a put and call option, of the
Midco Rollover Notes. The Rollover Managers will be issued Midco
Rollover Notes by Bidco under the Bidco Put and Call Option Deed.
The Rollover Managers will exchange the Midco Rollover Notes for,
in aggregate, 233,800 shares in Topco.
Shareholders' Agreement
The Shareholders' Agreement sets out the terms on which, amongst
other things, the Rollover Managers will hold their investment in
Topco in the form of 297,873 shares in Topco following the
completion of the series of puts and calls provided for by the
Company Put and Call Option Deed, the Bidco Put and Call Option
Deed, the Midco Put and Call Option Deed and the subscription
letters to be entered into by certain of the Rollover Managers (the
" Subscription Letters ").
Following the Effective Date, the Rollover Managers will hold in
aggregate, approximately 5.61 per cent. of the Economic Entitlement
in Topco.
Ratchet provisions within the Articles of Association of
Topco
Topco's articles of association contain a ratchet mechanism
applicable to the ratchet shares which enables the holders of the
ratchet shares to participate in a proportion of the proceeds on
any sale of Topco depending on the LDC Funds realising a minimum
return on their investment.
There are two target return levels that the LDC Funds must
attain in order for the ratchet shares to participate in a share of
the proceeds, based on (i) a multiple of the amount of return on
investment received by the LDC Funds being at least 2.5 times the
amount invested and received by way of dividend or return of
capital and (ii) with an internal rate of return of at least 25 per
cent. (the " Hurdles "). If the Hurdles are met, then the holders
of the ratchet shares will participate in 5 per cent. of the excess
over and above the amount required to achieve the Hurdles, with the
shares held by the LDC Funds receiving 5 per cent. less of the
excess. The Rollover Managers will hold 25 per cent. of the ratchet
shares.
Kameleon Supplemental Agreement
The conditional Kameleon Supplemental Agreement provides for the
amendment of the terms on which the deferred consideration owed by
the Company to the Kameleon Earn Out Holder is to be paid. The
Kameleon Supplemental Agreement provides for the payment of
deferred consideration, up to a maximum amount of GBP537,500 over a
three year period following completion but dependent on certain
revenue targets being met by Kameleon.
MMT Supplemental Agreement
The conditional MMT Supplemental Agreement provides for the
amendment of the terms on which the deferred consideration owed by
the Company to the MMT Rollover Managers is to be paid. The MMT
Supplemental Agreement provides for the payment of GBP1,432,500
cash upon completion and an element of deferred consideration, up
to a maximum amount of GBP2,530,050, payable over a three year
period following completion, but dependent on certain EBITDA
targets being met by MMT.
11.5.2 Sweet Equity Arrangements
Certain of the Sweet Equity Participants have entered into the
Shareholders Agreement, a conditional agreement with Topco to
effect the Sweet Equity Arrangements.
The Shareholders' Agreement sets out the terms on which, amongst
other things, certain of the Sweet Equity Participants will hold
their investment in Topco in the form of 51,651 shares in Topco
following their subscription pursuant to the terms of the
Shareholders' Agreement.
The remaining Sweet Equity Participants will be entitled to
subscribe for equity in Topco pursuant to subscription letters. If
fully subscribed, they will hold 25,826 shares in Topco.
Following the Effective Date, the Sweet Equity Participants will
hold in aggregate, approximately 1.75 per cent. of the Economic
Entitlement in Topco.
11.5.3 Earn Out Arrangements
The Leaver Earn Out Participants, the Company and Bidco have
entered into a number of agreements with the Company to effect the
Earn out Arrangements, as follows:
Agenda21 Supplemental Agreement
The conditional Agenda21 Supplemental Agreement provides for the
amendment of the terms on which the deferred consideration owed by
the Company to the Agenda21 Earn Out Holders is to be paid. The
Agenda21 Supplemental Agreement provides for the payment of
GBP113,989 cash upon completion and an element of deferred
consideration, up to a maximum amount of GBP113,989, payable over a
year period following completion but dependent on certain EBITDA
targets being met by Agenda21.
MMT Supplemental Agreement
The conditional MMT Supplemental Agreement provides for the
amendment of the terms on which the deferred consideration owed by
the Company to Ian Stanton is to be paid. The MMT Supplemental
Agreement provides for the payment of deferred consideration, up to
a maximum amount of GBP32,189, payable within a three year period
following completion but dependent on certain EBITDA targets being
met by MMT.
11.5.4 Corner Disposal
The Corner Purchasers, the Company and Bidco have entered into a
number of agreements to effect the Corner Disposal, as follows:
Corner SPA
The Corner SPA provides for the transfer of the entire issued
share capital of The Corner by the Company to the Corner Purchasers
for an aggregate consideration of GBP535,000, such amount to be set
off against a proportion of deferred consideration owed by the
Company to the Corner Purchasers. The purchase price will be
subject to a post-completion adjustment based on the working
capital of The Corner.
Kameleon BPA
The Kameleon BPA provides for the transfer of the Kameleon
business and related assets by The Corner to Kameleon prior to
completion of the Corner SPA, for a consideration equal to the book
value of the Kameleon business and related assets as at completion
of the Kameleon BPA.
Corner TSA
Under the terms of the Corner TSA, the Company will provide
certain standard transitional services to The Corner for an initial
three month term from the completion of the Corner SPA, extendable
by a further three months on agreement by the parties. The fee for
such services will be GBP2,000 (plus VAT) per month.
11.6 Approval of the Rollover Manager Arrangements, the Earn Out
Arrangements and the Corner Disposal
Pursuant to Rules 16.1 and 16.2 of the Code the relevant
independent Be Heard Shareholders will be asked at the General
Meeting to approve the Rollover Manager Arrangements, the Earn Out
Arrangements and the Corner Disposal described in this paragraph 11
of this Announcement by voting on the Rollover Managers Resolution,
the Earn Out Resolution and the Corner Resolution as set out
below.
11.6.1 The Rollover Managers Resolution
The Rollover Managers Resolution relates to the approval by the
Be Heard Rollover Independent Shareholders of the Rollover Manager
Arrangements as required pursuant to note (2) on Rule 16.1 and Rule
16.2 of the Code.
None of the Rollover Managers who hold Be Heard Shares nor their
connected persons, nor any person holding Be Heard Shares on behalf
of the Rollover Managers and/or any of their connected persons will
be entitled to vote on the Rollover Managers Resolution.
11.6.2 The Earn Out Resolution
The Earn Out Resolution relates to the approval by the Be Heard
Earn Out Independent Shareholders of the Earn Out Arrangements as
required pursuant to note (2) on Rule 16.1 of the Code.
None of the Leaver Earn Out Participants who hold Be Heard
Shares nor their connected persons, nor any person holding Be Heard
Shares on behalf of the Leaver Earn Out Participants and/or any of
their connected persons will be entitled to vote on the Earn Out
Resolution.
11.6.3 The Corner Resolution
The Corner Resolution relates to the approval by the Be Heard
Corner Independent Shareholders of the Corner Disposal as required
pursuant to note (2) on Rule 16.1 of the Code.
None of the Corner Purchasers who hold Be Heard Shares nor their
connected persons, nor any person holding Be Heard Shares on behalf
of the Corner Purchasers and/or any of their connected persons will
be entitled to vote on the Corner Resolution.
Voting on the Rollover Managers Resolution, the Earn Out
Resolution and the Corner Resolution will be by way of a poll.
The Independent Directors support Bidco's belief that the
ongoing participation of the Rollover Managers and the Sweet Equity
Participants in the Company is an important element of the
Acquisition, and are pleased that they will continue as employees
of the Be Heard Group and investors in the Wider Bidco Group
following completion of the Acquisition. Additionally, the
Independent Directors support Bidco's belief that the Earn Out
Arrangements and the Corner Disposal are important elements of the
Acquisition, and are pleased that they have been successfully
negotiated between the relevant parties.
11.7 Independent Directors Recommendation
The Independent Directors unanimously intend to recommend that
the Be Heard Rollover Independent Shareholders vote in favour of
the Rollover Managers Resolution at the General Meeting. For the
purposes of Rules 16.1 and 16.2 of the Code, Cairn has confirmed to
the Independent Directors that, in its opinion, the terms of the
Rollover Manager Arrangements are fair and reasonable so far as the
Be Heard Rollover Independent Shareholders are concerned. In
providing this opinion, Cairn has taken into account the commercial
assessments of the Independent Directors.
The Independent Directors unanimously intend to recommend that
the Be Heard Earn Out Independent Shareholders vote in favour of
the Earn Out Resolution at the General Meeting. For the purposes of
Rule 16.1 of the Code, Cairn has confirmed to the Independent
Directors that, in its opinion, the terms of the Earn Out
Arrangements are fair and reasonable so far as the Be Heard Earn
Out Independent Shareholders are concerned. In providing this
opinion, Cairn has taken into account the commercial assessments of
the Independent Directors.
The Independent Directors unanimously intend to recommend that
the Be Heard Corner Independent Shareholders vote in favour of the
Corner Resolution at the General Meeting. For the purposes of Rule
16.1 of the Code, Cairn has confirmed to the Independent Directors
that, in its opinion, the terms of the Corner Documents are fair
and reasonable so far as the Be Heard Corner Independent
Shareholders are concerned. In providing this opinion, Cairn has
taken into account the commercial assessments of the Independent
Directors.
The Acquisition will be conditional upon, amongst other
things:
(a) the Be Heard Rollover Independent Shareholders approving the Rollover Managers Resolution;
(b) the Be Heard Earn Out Independent Shareholders approving the Earn Out Resolution; and
(c) the Be Heard Corner Independent Shareholders approving the Corner Resolution,
at the General Meeting.
Further details on the terms of the Rollover Manager
Arrangements, the Sweet Equity Arrangements, the Earn Out
Arrangements and the Corner Documents will be set out in the Scheme
Document.
Other than the Rollover Manager Arrangements, the Sweet Equity
Arrangements, the Earn Out Arrangements and the Corner Documents,
there are no arrangements or understandings between Bidco and/or
any person acting in concert with Bidco and the management or
directors of Be Heard having any connection with or dependence upon
the Acquisition.
12. Be Heard convertible bond instrument
In connection with its acquisition of The Corner, the Company
entered into a bond instrument on or around 29 November 2017
constituting up to GBP4.0 million convertible bonds (the " Bond
Instrument ").
The convertible bonds were issued under the Bond Instrument to a
small number of holders, of which the Gresham Bondholders currently
account for approximately 66 per cent. in principal amount.
Pursuant to the terms of the Bond Instrument, the holders are
entitled to the payment of a redemption premium in addition to the
repayment of principal.
Bidco and the Company have agreed with each of the Bondholders
that the Company will, in respect of all such bonds as are held by
each Bondholder, within 14 days of the Effective Date, repay the
principal in full and exchange the redemption premium for new
unsecured guaranteed loan notes constituted by a loan note
instrument to be entered into by the Company (" Loan Notes "). The
Loan Notes will be issued within 14 days of the Effective Date and
will carry a coupon of 10 per cent per annum. The Loan Notes will
be redeemable in two equal tranches, together with accrued interest
on such sums. The first tranche will be redeemed 6 months from the
date of issue and the second tranche will be redeemed 9 months from
the date of issue. The Company will also be entitled to redeem all
or part of the Loan Notes ahead of the prescribed redemption dates.
The obligations of Be Heard in respect of the Loan Notes will be
guaranteed by Midco pursuant to a guarantee to be entered into by
Midco.
As a condition of the Loan Notes, for so long as there are Loan
Notes in issue, the holders of the Loan Notes may, by way of a
special resolution, appoint an observer (and the Company shall
procure such appointment takes effect) who shall be entitled to
receive monthly financial reports and annual accounts in respect of
the Wider Bidco Group. For such time as the aggregate principal
amount of Loan Notes outstanding for the time being is not equal to
or less than 20 per cent. of the initial principal amount of Loan
Notes issued, the observer will also be entitled to receive notice
of, and attend, all board meetings of Midco, but will not be
entitled to vote at such meetings nor count towards the quorum. The
right to receive notice of, and attend, all board meetings of
Midco, will fall away in the event that the aggregate principal of
Loan Notes outstanding for the time being is equal to or less than
20 per cent. of the initial principal amount of Loan Notes
issued.
Bidco and the Company have agreed that the above-mentioned
repayment, conversion and Loan Note terms agreed with the
Bondholders will, in accordance with Rule 15 of the Code, be
offered to all other holders of the convertible bonds after the
publication of this Announcement.
13. Long term incentive plan awards
The Company has implemented a long term incentive plan (the
"LTIP") for its employees under which awards (the "LTIP Awards" )
have been granted to acquire Be Heard Shares, including an award
granted to Simon Pyper, the Chief Executive Officer of the Company.
The LTIP Awards are exercisable within the one month period
following notification of the sanction of the Scheme by the Court.
However, exercise of the LTIP Awards is normally conditional upon
the achievement of certain performance conditions which are not
currently met, nor will they be met at the time the Scheme is due
to be sanctioned by the Court. Under the existing LTIP rules
previously adopted by the Company, the Company has a general
discretion to determine the extent to which an LTIP Award will vest
in connection with a takeover offer. The remuneration committee of
the Company, exercising its pre-existing discretion, has previously
resolved to permit the LTIP Award granted to Simon Pyper to be
exercised in full in connection with any takeover offer for the
Company regardless of whether the relevant performance conditions
will be met. The remuneration committee has resolved that the LTIP
Awards granted to other individuals will not be capable of exercise
to any extent in connection with the Acquisition due to the failure
to meet the relevant performance conditions. As a result, the LTIP
Award granted to Simon Pyper will vest and become exercisable in
full in connection with the Offer and the remaining LTIP Awards
will lapse.
Under the LTIP rules, the Company has the power to settle awards
by making a cash payment instead of delivering Be Heard Shares, and
it is proposed that Simon Pyper will receive a cash payment from
the Company equal to the number of Be Heard Shares subject to his
LTIP Award multiplied by the Offer Price (subject to the deduction
of any income tax and employee National Insurance contributions, as
required). This cash cancellation payment will put Simon Pyper in
the same net position as if he were to exercise his LTIP Award in
respect of Be Heard Shares and receive the same consideration as
the other Be Heard Shareholders.
14. Financing arrangements
The cash consideration payable by Bidco to Be Heard Shareholders
pursuant to the Acquisition, including the amount required to
refinance the existing facilities of Be Heard with Barclays Bank
plc, will be funded through Bidco's existing cash resources and an
unsecured intercompany loan from Topco to Bidco via Midco. The loan
is ultimately being funded through a combination of debt and equity
financing by LDC and the executive directors of Topco and through
debt facilities arranged with HSBC Bank plc pursuant to the
Facilities Agreement. In connection with their funding of Topco,
each of LDC and the executive directors of Topco has entered into
the Subscription Arrangements.
Zeus Capital, in its capacity as financial adviser to Bidco, is
satisfied that sufficient resources are available to Bidco to
enable it to satisfy, in full, the cash consideration payable to
Scheme Shareholders under the terms of the Acquisition.
15. Intentions in respect of Be Heard's management, employees and locations
Overall Strategic Plan
Bidco believes that, following the Acquisition, Be Heard's
agencies will complement the existing agencies within the Wider
Bidco Group by providing relevant, additional services and
enhancing its existing multi-disciplinary offer. Further, Bidco
expects that Be Heard could derive a number of benefits from being
part of the Wider Bidco Group. These include revenue and cost
synergies, access to a wider portfolio of customers and technical
knowledge, and potential access to capital with the support of LDC.
Bidco believes that, under its private ownership and supported by
its access to capital and Topco expertise, Be Heard would be better
able to capitalise on additional growth and investment
opportunities available in its end markets. Bidco, supported by
Topco, will actively monitor these additional opportunities and
pursue them where appropriate.
Additionally, to maximise collaboration, Bidco intends to
combine the Agenda 21 agency with The Gate agency's media team to
strengthen the Gate's digital media capabilities and to bring those
employees and assets which will transfer from The Corner under the
Kameleon BPA within the Stack agency.
Intentions with Respect to Be Heard Management
Bidco intends to support Be Heard's management to develop the
Company by way of investment in staff and operational capacity to
support the expansion of Be Heard's global operations and service
offerings.
Each of the Non-Executive directors of Be Heard (being David
Morrison, David Wilkinson and David Poutney) and executive director
Simon Pyper (Chief Executive Officer) will resign. These
resignations will be subject to, and take effect from, the Scheme
becoming Effective (or, in the event that the Acquisition is
implemented by a Takeover Offer, the Takeover Offer becoming or
being declared wholly unconditional).
Following the Acquisition, Bidco intends to continue the
employment of Ben Rudman (Chief Operating Officer and co-founder of
MMT) and for him to become an executive director of Topco,
performing very similar duties as he currently does within Be Heard
. Proposed changes to his employment terms are outlined in
paragraph 11.1.
Intentions with Respect to Be Heard Employees
Bidco recognises the contribution made by the Be Heard
management team in developing its business and attaches great
importance to their skills and experience. Bidco intends to support
the Be Heard management team in the execution of their long-term
strategy.
In line with this strategy, Bidco does not intend to initiate
any headcount reductions, but will be undertaking a potential
review of core support functions (finance, HR and IT) across the Be
Heard Group and the Wider Bidco Group which could lead to a limited
number of redundancies or redeployments in the event that
duplication exists within the Be Heard Group as a result of the
Acquisition, and expects that the vast majority of existing
employees of Be Heard will continue to contribute to Be Heard's
ongoing success.
There are presently 43 Be Heard employees that have been placed
on furlough pursuant to the Government's Coronavirus Job Retention
Scheme. There is a desire to facilitate the return to work for
those employees as the economics of the Be Heard agencies improve
in the period of Covid recovery; however the situation relating to
the Covid Pandemic is inherently unpredictable and so Bidco is
currently unable to determine if, how and when the un-furloughing
of those employees might take place.
Save as disclosed in paragraph 11 of this Announcement, Bidco
confirms that:
-- following the Scheme becoming Effective, the existing
contractual and statutory employment rights, including in relation
to pensions, of Be Heard's management and employees will be fully
safeguarded in accordance with applicable law. Bidco does not
intend to make any material change to the conditions of employment
or in the balance of skills and functions of the management and
employees of Be Heard. Bidco does not intend to make any changes
with regards to Be Heard's existing pension schemes, the accrual of
benefits to existing members or the admission of new members to
such pension schemes; and
-- it has not entered into, and has not had discussions on
proposals to enter into, any form of incentivisation or any other
arrangements with the management and employees of Be Heard.
Intentions regarding Be Heard Headquarters and Other Items
Following the Scheme becoming Effective, Bidco does not intend
to make any immediate restructurings or changes in location of Be
Heard's headquarters and headquarter functions, operations and
places of business. However, it is likely that within 12 months of
the Acquisition, Bidco will seek to merge some of its offices into
fewer locations, but all of the staff in those offices will still
be located in offices in Central London.
There are no plans to change or redeploy the fixed assets of Be
Heard. Additionally, owing to the nature of the business, Be Heard
has no research and development function. Bidco has no plans to
change this. It is also intended that, shortly after the Effective
Date, Be Heard will be re-registered as a private limited pursuant
to the relevant provisions of the Companies Act. Therefore, it is
intended that the listing of Be Heard Shares on AIM will be
cancelled immediately after the Scheme becomes Effective or
promptly thereafter.
No statements in this paragraph 15 are "post-offer undertakings"
for the purposes of Rule 19.5 of the Code.
16. Structure of the Acquisition and the Scheme Document
Scheme
It is intended that the Acquisition will be effected by a
Court-sanctioned scheme of arrangement between Be Heard and the
Scheme Shareholders under Part 26 of the Companies Act. Bidco
reserves the right to elect to implement the Acquisition by way of
a Takeover Offer (with the consent of the Panel).
The purpose of the Scheme is to enable Bidco to become the owner
of the Scheme Shares.
Under the Scheme, the Scheme Shares will be transferred to Bidco
in consideration for the Scheme Shareholders receiving the Offer
Price on the basis set out in paragraph 2 of this Announcement. The
Scheme will be subject to the Conditions and further terms referred
to in Appendix I to this Announcement and to be set out in the
Scheme Document. The Acquisition will lapse if the Scheme does not
become Effective by the Long Stop Date.
Approval by the Court Meeting and the General Meeting
In order to become Effective, the Scheme requires:
(a) the approval of a majority in number of the Scheme
Shareholders entitled to vote, representing not less than 75 per
cent. in value of the Scheme Shares voted, either in person or by
proxy, at the Court Meeting. At the Court Meeting, voting will be
by poll and not on a show of hands and, other than holders of
Excluded Shares (including the Rollover Managers, who are precluded
from voting by virtue of their interest in the Acquisition,
including the Rollover Manager Arrangements), all Be Heard
Shareholders appearing on Be Heard's register of members at the
Voting Record Time will be entitled to vote at the Court Meeting
and to cast one vote for each Scheme Share held;
(b) the approval of not less than 75 per cent. of the votes
cast, either in person or by proxy, of the Special Resolution to be
proposed at the General Meeting (to be held directly after the
Court Meeting) necessary in order to implement the Scheme,
including to approve amendments to Be Heard's articles of
association to ensure that any Be Heard Shares issued after the
approval of the Scheme at the Court Meeting and the Scheme Record
Time will be (i) subject to the Scheme and (ii) automatically
acquired by Bidco ( or its nominee(s)) on the same terms as under
the Scheme. This will avoid any person (other than Bidco or its
nominee(s)) being left with Be Heard Shares after the Effective
Date. At the General Meeting, all Be Heard Shareholders appearing
on Be Heard's register of members at the Voting Record Time will be
entitled to vote on the Special Resolution and to cast one vote for
each Be Heard Share held;
(c) the approval, on a poll by a simple majority of the votes
cast by Be Heard Rollover Independent Shareholders, either in
person or by proxy, of the Rollover Managers Resolution. At the
General Meeting, all Be Heard Rollover Independent Shareholders
appearing on Be Heard's register of members at the Voting Record
Time will be entitled to vote on the Rollover Managers Resolution
and to cast one vote for each Be Heard Share held ;
(d) the approval, on a poll by a simple majority of the votes
cast by Be Heard Earn Out Independent Shareholders, either in
person or by proxy, of the Earn Out Resolution. At the General
Meeting, all Be Heard Earn Out Independent Shareholders appearing
on Be Heard's register of members at the Voting Record Time will be
entitled to vote on the Earn Out Resolution and to cast one vote
for each Be Heard Share held ;
(e) the approval, on a poll by a simple majority of the votes
cast by Be Heard Corner Independent Shareholders, either in person
or by proxy, of the Corner Resolution. At the General Meeting, all
Be Heard Corner Independent Shareholders appearing on Be Heard's
register of members at the Voting Record Time will be entitled to
vote on the Corner Resolution, and to cast one vote for each Be
Heard Share held ; and
(f) all of the other Conditions to be satisfied or (where applicable) waived.
For the avoidance of doubt, the Conditions described in
paragraphs (a), (b), (c), (d) and (e) cannot be waived.
Application to the Court to sanction the Scheme
Once the necessary approvals have been obtained at the Be Heard
Meetings, and the other Conditions have been satisfied or (where
applicable) waived (save for the Condition set out at paragraph
2(f) of Part A of Appendix I to this Announcement), in order for
the Scheme to be capable of becoming Effective, it must be
sanctioned by the Court at the Scheme Court Hearing.
The Scheme will only become Effective once a copy of the Scheme
Court Order is delivered to the Registrar of Companies.
Lapsing of the Acquisition
The Acquisition will lapse if, amongst other things:
(a) the approval of the requisite majority of Be Heard
Shareholders at the Court Meeting is not obtained on or before the
22nd day after the expected date of the Court Meeting to be set out
in the Scheme Document (or such later date, if any, as Bidco and Be
Heard may agree and the Court may allow); or
(b) the approval of the requisite majority of Be Heard
Shareholders to pass the Special Resolution to be proposed at the
General Meeting is not obtained on or before the 22nd day after the
expected date of the General Meeting to be set out in the Scheme
Document (or such later date, if any, as Bidco and Be Heard may
agree and the Court may allow); or
(c) the approval, on a poll of the requisite majority of Be
Heard Shareholders who are respectively entitled to vote on the
relevant resolution, of the Rollover Managers Resolution, the Earn
Out Resolution and the Corner Resolution required pursuant to Rule
16 of the Code is not obtained on or before the 22nd day after the
expected date of the General Meeting to be set out in the Scheme
Document (or such later date, if any, as Bidco and Be Heard may
agree and the Court may allow); or
(d) the sanction of the Scheme by the Court (without
modification or with modification on terms acceptable to Bidco and
Be Heard) and the delivery of a copy of the Scheme Court Order to
the Registrar of Companies does not take place by the Long Stop
Date.
Scheme becoming Effective
Upon the Scheme becoming Effective, it will be binding on all
Scheme Shareholders, irrespective of whether or not they attended
or voted at the Court Meeting or the General Meeting, or whether
they voted in favour of or against the Scheme.
The cash consideration due to Scheme Shareholders will be
dispatched no later than 14 days after the Effective Date. Upon the
Scheme becoming Effective, certificates in respect of Scheme Shares
will cease to be valid and entitlements to Scheme Shares held
within the CREST system, or any other analogous system, will be
cancelled.
Scheme Document
The Scheme Document will include full details of the Scheme,
together with notices convening the Court Meeting and the General
Meeting and the expected timetable for the Scheme, and will specify
the action to be taken by Be Heard Shareholders.
It is expected that the Scheme Document, together with the Forms
of Proxy, will be dispatched to Be Heard Shareholders within 28
days of the date of this Announcement, unless Bidco and Be Heard
otherwise agree, and the Panel consents, to a later date.
General
The Scheme will be governed by the laws of England and Wales.
The Scheme will be also subject to the applicable requirements of
the Code, the Panel, the London Stock Exchange and the Financial
Conduct Authority.
17. Interests of Bidco in Be Heard Shares
Bidco made a public Opening Position Disclosure setting out
details required to be disclosed by it under Rule 8.1(a) of the
Code on 23 June 2020. It confirmed that Bidco is aware that those
acting in concert with Bidco (within the meaning of the Code) had
interests in 522,473,304 Be Heard Shares, representing
approximately 41.90 per cent. of the Be Heard Shares in issue.
Save as referred to above and in respect of the irrevocable
undertakings referred to in paragraph 7 of this Announcement, as at
the Last Practicable Date, neither Bidco, nor any of their
respective directors, nor, so far as Bidco is aware, any person
acting in concert (within the meaning of the Code) with Bidco had
(i) any interest in or right to subscribe for Be Heard Shares; nor
(ii) any short positions in respect of relevant Be Heard Shares
(whether conditional or absolute and whether in the money or
otherwise), including any short position under a derivative, any
agreement to sell, any delivery obligation or right to require
another person to purchase or take delivery; nor (iii) borrowed or
lent any Be Heard Shares (including, for these purposes, any
financial collateral arrangements of the kind referred to in Note 4
on Rule 4.6 of the Code); nor (iv) is a party to any dealing
arrangement of the kind referred to in Note 11 on the definition of
acting in concert in the Code.
'Interests in securities' for these purposes arise, in summary,
when a person has long economic exposure, whether absolute or
conditional, to changes in the price of securities (and a person
who only has a short position in securities is not treated as
interested in those securities). In particular, a person will be
treated as having an 'interest' by virtue of the ownership, voting
rights or control of securities, or by virtue of any agreement to
purchase, option in respect of, or derivative referenced to,
securities.
18. Acquisition related arrangements
On 25 June 2019, Be Heard and Bidco entered into a standstill
agreement pursuant to which Bidco and the Wider Bidco Group agreed
to be restricted from acquiring or seeking to acquire interests in
relevant securities of Be Heard with those restrictions ceasing to
apply on publication of this Announcement.
On 25 June 2019, Be Heard and Bidco entered into a mutual
non-disclosure agreement pursuant to which both Be Heard and Bidco
agreed to keep confidential certain information supplied by the
other for the purposes of considering the proposed Acquisition.
19. Cancellation of admission to trading and re-registration of Be Heard
Prior to the Scheme becoming Effective, application will be made
to the London Stock Exchange for admission of the Be Heard Shares
to trading on AIM to be cancelled immediately after the Scheme
becomes Effective or promptly thereafter. The last day of dealings
in, and for registration of transfers of, Be Heard Shares is
expected to be on the Business Day immediately prior to the Scheme
Court Hearing and no transfers will be registered after 6.00 p.m.
on that date. No dealings in Be Heard Shares will be registered
after this date.
On the Effective Date, Be Heard will become a wholly-owned
subsidiary of Bidco and share certificates in respect of the Be
Heard Shares will cease to be valid and should be destroyed. In
addition, entitlements to Be Heard Shares held within the CREST
system will be cancelled on the Effective Date.
It is also intended that, shortly after the Effective Date, Be
Heard will be re-registered as a private limited company pursuant
to the relevant provisions of the Companies Act.
20. Documents available on website
Copies of the following documents will, in accordance with Rule
26.2 of the Code, be made available, subject to certain
restrictions relating to persons resident in Restricted
Jurisdictions, on Be Heard's website at
www.beheardpartnership.com/investors and on Bidco's website at
www.msqpartners.com by no later than 12 noon on the Business Day
following the date of this Announcement until the end of the Offer
Period:
-- a copy of this Announcement;
-- the irrevocable undertakings referred to in paragraph 7 of this Announcement;
-- the written consents of each of Zeus Capital and Cairn referred to in paragraph 23 below;
-- the Rollover Manager Arrangements referred to in paragraph 11.5.1 of this Announcement;
-- the Facilities Agreement referred to in paragraph 14 of this Announcement;
-- the Earn Out Arrangements referred to in paragraph 11.5.3 of
this Announcement, and the historical sale and purchase agreements
to which they relate;
-- the Corner Documents referred to in paragraph 11.5.4 of this Announcement; and
-- the non-disclosure agreement and standstill agreement
described in paragraph 18 of this Announcement.
21. Dividends
The Be Heard Shares to be acquired under the Acquisition shall
be acquired fully paid and free from all liens, charges, equitable
interests, encumbrances, rights of pre-emption and any other rights
and interests of any nature whatsoever and together with all rights
now and hereafter attaching thereto, including voting rights and
the right to receive and retain in full all dividends and other
distributions (if any) declared, made or paid on or after the date
of this Announcement.
If any dividend or other distribution or return of value or
capital is authorised, declared, made or paid in respect of Be
Heard Shares on or after the date of this Announcement and prior to
the Effective Date, Bidco reserves the right to reduce the Offer
Price by an amount up to the per share amount of such dividend or
other distribution or return, except where the Be Heard Shares are
or will be acquired pursuant to the Scheme on a basis which
entitles Bidco to receive the dividend, distribution or return and
to retain it.
If any such dividend, distribution or return is authorised,
declared, paid or made after the date of this Announcement and
Bidco exercises its rights described above, any reference in this
Announcement to the consideration payable under the Scheme shall be
deemed to be a reference to the consideration as so reduced. Any
exercise by Bidco of its rights referred to in this paragraph shall
be the subject of an announcement and, for the avoidance of doubt,
shall not be regarded as constituting any revision or variation of
the terms of the Scheme.
22. General
The Acquisition and the Scheme will be subject to the Conditions
and certain further terms set out in Appendix I to this
Announcement and to the full terms and conditions to be set out in
the Scheme Document. Appendix II to this Announcement contains the
sources and bases of certain information contained in this
Announcement. Appendix III to this Announcement contains a summary
of the irrevocable undertakings received in relation to the
Acquisition. Appendix IV to this Announcement contains the
definitions of certain terms used in this Announcement.
Bidco reserves the right, subject to the prior consent of the
Panel, to elect to implement the Acquisition by way of a Takeover
Offer for the entire issued and to be issued share capital of Be
Heard, as an alternative to the Scheme. In such an event, such
offer will be implemented on the same terms (subject to appropriate
amendments described in Part B of Appendix I to this Announcement),
so far as applicable, as those which would apply to the Scheme.
If the Acquisition is effected by way of a Takeover Offer and
such offer becomes or is declared unconditional in all respects and
sufficient acceptances are received, Bidco intends to exercise its
rights to apply the provisions of Chapter 3 of Part 28 of the
Companies Act to acquire compulsorily the remaining Be Heard Shares
in respect of which the Takeover Offer has not been accepted.
Investors should be aware that Bidco may purchase Be Heard
Shares otherwise than under any Takeover Offer or scheme of
arrangement relating to the Acquisition, such as privately
negotiated purchases.
The availability of any such Takeover Offer to persons not
resident in the United Kingdom may be affected by the laws of the
relevant jurisdictions. Such persons should inform themselves about
and observe any applicable requirements.
23. Consents
Zeus Capital has given and has not withdrawn its written consent
to the issue of this Announcement with the inclusion herein of the
references to its name in the form and context in which it
appears.
Cairn has given and has not withdrawn its written consent to the
issue of this Announcement with the inclusion herein of the
references to its name in the form and context in which it
appears.
Enquiries:
MSQ Partners Ltd Tel: +44 (0) 203
026 6608
Dan Yardley
Zeus Capital Limited (Financial Adviser to Tel: +44 (0) 161
Bidco) 831 1512
Richard Darlington / Dan Bate
Be Heard Group plc Tel: +44 (0) 203
828 6269
David Morrison / Simon Pyper
Cairn Financial Advisers (Financial Adviser Tel: +44 (0) 207
and Rule 3 Adviser to Be Heard) 213 0880
James Lewis / Jo Turner
Dowgate Capital Limited (Broker to Be Heard) Tel: +44 (0) 203
903 7715
James Serjeant
Hudson Sandler (Financial PR for Be Heard) Tel: +44 (0) 207
796 4133
Daniel de Belder / Nick Lyon
Addleshaw Goddard LLP is providing legal advice to Bidco.
Osborne Clarke LLP is providing legal advice to Be Heard.
Important notices
Zeus Capital, which is authorised and regulated in the United
Kingdom by the Financial Conduct Authority, is acting exclusively
as financial adviser to Bidco and for no one else in connection
with the Acquisition or any matters referred to in this
Announcement and will not be responsible to anyone other than Bidco
for providing the protections afforded to its clients nor for
providing advice in relation to the Acquisition, the contents of
this Announcement or any other matters referred to in this
Announcement.
Cairn, which is authorised and regulated in the United Kingdom
by the Financial Conduct Authority, is acting exclusively for Be
Heard and for no one else in connection with the Acquisition or any
matters referred to in this Announcement and will not be
responsible to anyone other than Be Heard for providing the
protections afforded to its clients nor for providing advice in
relation to the Acquisition, the contents of this Announcement or
any other matters referred to in this Announcement.
This Announcement is for information purposes only and is not
intended to and does not constitute, or form part of, any offer,
invitation, inducement or the solicitation of an offer to purchase
or otherwise acquire, subscribe for, sell or otherwise dispose of
or exercise rights in respect of any securities, or the
solicitation of any vote or approval of an offer to buy, securities
in any jurisdiction (pursuant to the Acquisition or otherwise) nor
shall there be any sale, issuance or transfer of any securities
pursuant to the Acquisition in any jurisdiction in contravention of
any applicable laws.
The Acquisition will be made solely by means of the Scheme
Document (or, if the Acquisition is implemented by way of a
Takeover Offer, any document by which the Takeover Offer is made),
which will contain the full terms and conditions of the
Acquisition, including details of how to vote in respect of the
Scheme and the Resolutions proposed at the General Meeting. Any
decision, vote or other response in respect of the Acquisition
should be made only on the basis of information contained in the
Scheme Document. Be Heard will prepare the Scheme Document to be
distributed to Be Heard Shareholders at no cost to them. Be Heard
Shareholders are advised to read the formal documentation in
relation to the Acquisition carefully once it becomes available
because it will contain important information relating to the
Acquisition.
This Announcement does not constitute a prospectus or a
prospectus exempted document.
This Announcement has been prepared for the purpose of complying
with English law and the Code and the information disclosed may not
be the same as that which would have been disclosed if this
Announcement had been prepared in accordance with the laws of
jurisdictions outside the United Kingdom.
Overseas jurisdictions
The release, publication or distribution of this Announcement in
certain jurisdictions other than the United Kingdom may be
restricted by law and the ability of Be Heard Shareholders who are
not resident in the United Kingdom to participate in the
Acquisition may be restricted by the laws and/or regulations of
those jurisdictions. In particular, the ability of persons who are
not resident in the United Kingdom to vote their Scheme Shares with
respect to the Scheme at the Court Meeting or with respect to the
Resolutions at the General Meeting, or to execute and deliver Forms
of Proxy appointing another to vote at the Court Meeting and/or
General Meeting on their behalf, may be affected by the laws of the
relevant jurisdictions in which they are located. Therefore, any
persons who are subject to the laws and regulations of any
jurisdiction other than the United Kingdom and Be Heard
Shareholders who are not resident in the United Kingdom should
inform themselves of, and observe, any applicable requirements in
their jurisdiction. Any failure to comply with the applicable
requirements may constitute a violation of the laws and/or
regulations of any such jurisdiction. To the fullest extent
permitted by applicable law, the Wider Bidco Group and persons
involved in the Acquisition disclaim any responsibility or
liability for the violation of such restrictions by any person.
The Acquisition will not be made, directly or indirectly, in,
into or from a Restricted Jurisdiction where to do so would violate
the laws of that jurisdiction and no person may vote in favour of
the Acquisition by any use, means, instrumentality or form within a
Restricted Jurisdiction or any other jurisdiction if to do so would
constitute a violation of the laws of that jurisdiction.
Accordingly, copies of this Announcement and any formal
documentation relating to the Acquisition are not being, and must
not be, directly or indirectly, mailed or otherwise forwarded,
distributed or sent in or into or from any Restricted Jurisdiction
and persons receiving such documents (including custodians,
nominees and trustees) must not mail or otherwise forward,
distribute or send them in or into or from any Restricted
Jurisdiction. Doing so may render invalid any related purported
vote in respect of acceptance of the Acquisition.
This Announcement has been prepared for the purposes of
complying with English law and the Code and the information
disclosed may not be the same as that which would have been
disclosed if this Announcement had been prepared in accordance with
the laws of jurisdictions outside England.
If the Acquisition is implemented by way of a Takeover Offer
(unless otherwise permitted by applicable law and regulation), the
Takeover Offer may not be made, directly or indirectly, in or into
or by use of the mails or any other means or instrumentality
(including, without limitation, facsimile, e-mail or other
electronic transmission, telex or telephone) of interstate or
foreign commerce of, or any facility of a national, state or other
securities exchange of, any Restricted Jurisdiction and the
Takeover Offer will not be capable of acceptance by any such use,
means, instrumentality or facilities or from within any Restricted
Jurisdiction.
Further details in relation to Be Heard Shareholders in overseas
jurisdictions will be contained in the Scheme Document.
Notice to US investors
Be Heard Shareholders in the United States should note that the
Acquisition relates to the securities of a company organised under
the laws of England and Wales and is proposed to be effected by
means of a scheme of arrangement under the laws of England and
Wales. This Announcement, the Scheme Document and certain other
documents relating to the Acquisition have been or will be prepared
in accordance with English law, the Code and UK disclosure
requirements, format and style, all of which differ from those in
the United States. 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
Acquisition is subject to the disclosure requirements of and
practices applicable in the United Kingdom to schemes of
arrangement, which differ from the disclosure requirements of the
United States tender offer and proxy solicitation rules.
None of the securities referred to in this Announcement have
been approved or disapproved by the SEC, any state securities
commission in the United States or any other US regulatory
authority, nor have such authorities passed upon or determined the
adequacy or accuracy of the information contained in this document.
Any representation to the contrary is a criminal offence in the
United States.
Be Heard's financial statements, and all financial information
that is included in this Announcement or that may be included in
the Scheme Document or any other documents relating to the
Acquisition, have been prepared in accordance with International
Financial Reporting Standards and may not be comparable to
financial statements of companies in the United States or other
companies whose financial statements are prepared in accordance
with US generally accepted accounting principles. If Bidco
exercises its right, in the circumstances provided for in this
Announcement, to implement the Acquisition by way of a Takeover
Offer, such Takeover Offer will only be made in the United States
in accordance with the US Exchange Act.
In accordance with normal UK practice and pursuant to Rule
14e-5(b) of the US Exchange Act, Bidco, certain affiliated
companies and their respective nominees or brokers (acting as
agents) may make certain purchases of, or arrangements to purchase,
Be Heard Shares, other than pursuant to the Acquisition, until the
date on which the Takeover Offer and/or Scheme becomes Effective,
lapses or is otherwise withdrawn. If such purchases or arrangements
to purchase were to be made, they would be made outside the US and
would comply with applicable law, including the US Exchange Act.
These purchases and activities by exempt principal traders which
are required to be made public in the United Kingdom pursuant to
the Code will be reported to a Regulatory Information Service and
will be available on the London Stock Exchange website at
www.londonstockexchange.com. This information will also be publicly
disclosed in the US to the extent that such information is made
public in the United Kingdom.
The receipt of cash pursuant to the Acquisition by a US
Shareholder as consideration pursuant to the terms of the
Acquisition may be a taxable transaction for US federal income tax
purposes and under applicable US state and local, as well as
foreign and other, tax laws. Each US Shareholder is urged to
consult his or her independent professional adviser immediately
regarding the tax consequences of the Acquisition applicable to him
or her.
Forward-looking statements
This Announcement contains certain statements about Topco, Bidco
and Be Heard that are, or may be deemed to be, "forward-looking
statements" which are prospective in nature. All statements other
than statements of historical fact, are or may be deemed to be,
forward-looking statements. Forward-looking statements are based on
current expectations and projections about future events and are
therefore subject to known and unknown risks and uncertainties
which could cause actual results, performance or events to differ
materially from the future results, performance or events expressed
or implied by the forward-looking statements. Often, but not
always, forward-looking statements can be identified by the use of
forward-looking words such as "plans", "expects", "is expected",
"is subject to", "budget", "scheduled", "estimates", "forecasts",
"intends", "anticipates", "believes", "targets", "aims",
"projects", "goal", "objective", "outlook", "risks", "seeks" or
words or terms of similar substance or the negative thereof, as
well as variations of such words and phrases or statements that
certain actions, events or results "may", "could", "should",
"would", "might", "probably" or "will" be taken, occur or be
achieved. Such statements are qualified in their entirety by the
inherent risks and uncertainties surrounding future expectations.
Forward-looking statements include, but are not limited to,
statements relating to the following: (a) future capital
expenditures, expenses, revenues, economic performance, financial
conditions, dividend policy, losses and future prospects, (b)
business and management strategies and the expansion and growth of
the operations of Topco, Bidco or Be Heard and (c) the effects of
government regulation on the business of Topco, Bidco or Be Heard.
Such forward-looking statements involve risks and uncertainties
that could significantly affect expected results and are based on
certain key assumptions. There are many
factors which could cause actual results to differ materially
from those expressed or implied in forward-looking statements.
Among such factors 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 disposals. Such statements are qualified
in their entirety by the inherent risks and uncertainties
surrounding future expectations.
Due to such uncertainties and risks, readers are cautioned not
to place undue reliance on such forward-looking statements, which
speak only as at the date of this Announcement. By their nature,
forward-looking statements involve known and unknown risks and
uncertainties because they relate to future events and depend on
circumstances that will occur in the future or assumptions about
what will happen in the future. The factors described in the
context of forward-looking statements in this Announcement may
cause the actual results, performance or achievements of any such
person, or industry results and developments, to be materially
different from any results, performance or achievements expressed
or implied by such forward-looking statements. Any forward-looking
statements made in this Announcement on behalf of Topco, Bidco or
Be Heard are made as at the date of this Announcement based on the
opinions and estimates of directors of Topco, Bidco and Be Heard,
respectively. Each of Topco, Bidco and Be Heard, and their
respective members, directors, officers, employees, advisers and
any person acting on behalf of one or more of them, expressly
disclaims any intention or obligation to update or revise any
forward-looking or other statement contained in this Announcement,
whether as a result of new information, future events or otherwise,
except as required by applicable law. Neither Topco, Bidco, Be
Heard, nor their respective members, directors, officers or
employees, advisers or any person acting on their behalf, provides
any representation, assurance or guarantee that the occurrence of
the events expressed or implied in any forward-looking statement in
this Announcement will actually occur.
No forward-looking or other statements have been reviewed by the
auditors of Topco, Bidco or Be Heard. All subsequent oral or
written forward-looking statements attributable to Topco, Bidco, Be
Heard or to any of their respective members, directors, officers,
advisers or employees or any person acting on their behalf are
expressly qualified in their entirety by the cautionary statements
above.
Rounding
Certain figures included in this Announcement have been
subjected to rounding adjustments. Accordingly, figures shown for
the same category presented in different tables may vary slightly
and figures shown as totals in certain tables may not be an
arithmetic aggregation of the figures that precede them.
No profit forecasts or estimates
Save as set out in paragraph 10 of this Announcement, nothing in
this Announcement is intended or shall be deemed to be a forecast,
projection or estimate of the future financial performance of
Topco, Bidco or Be Heard for any period and no statement in this
Announcement should be interpreted to mean that cash flow from
operations, earnings, earnings per share or income for the current
or future financial years would necessarily match or exceed the
historical published cash flow from operations, earnings, earnings
per share or income of Be Heard.
Disclosure requirements of the Code
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) of the Code applies must be made by no
later than 3:30 p.m. on the 10(th) Business Day following the
commencement of the Offer Period and, if appropriate, by no later
than 3:30 p.m. 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(s), save to the extent that these details have previously
been disclosed under Rule 8 of the Code. A Dealing Disclosure by a
person to whom Rule 8.3(b) of the Code applies must be made by no
later than 3:30 p.m. 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 normally be deemed to be a
single person for the purpose of Rule 8.3 of the Code.
Opening Position Disclosures must also be made by the offeree
company and by any offeror and Dealing Disclosures must also be
made by the offeree company, by any offeror and by any persons
acting in concert with any of them (see Rules 8.1, 8.2 and 8.4 of
the Code).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Panel's website at www.thetakeoverpanel.org.uk, including
details of the number of relevant securities in issue, when the
offer period commenced and when any offeror was first identified.
You should contact the Panel's Market Surveillance Unit on +44
(0)20 7638 0129 if you are in any doubt as to whether you are
required to make an Opening Position Disclosure or a Dealing
Disclosure.
Publication on website and availability of hard copies
A copy of this Announcement and the display documents required
to be published pursuant to Rule 26 of the Code will be made
available free of charge, subject to certain restrictions relating
to persons resident in Restricted Jurisdictions, on Be Heard's
website at www.beheardpartnership.com/investors by no later than
noon on the Business Day immediately following this Announcement.
Neither the content of any website referred to in this Announcement
nor the content of any website accessible from hyperlinks is
incorporated into, or forms part of, this Announcement.
Requesting hard copy documents
Any person who is entitled to be sent a copy of this
Announcement under the Code may request a hard copy of this
Announcement (and any information incorporated by reference in this
Announcement) by contacting Philip Marsden, Company Secretary of Be
Heard, on +44 (0)20 2838 6264.
Save as otherwise referred to above, a hard copy of this
Announcement will not be sent unless requested. Any such person may
also request that all future documents, announcements and
information in relation to the Acquisition should be sent to them
in hard copy form.
Electronic communications
Please be aware that all addresses, electronic addresses (if
any) and certain other information provided by the Be Heard
Shareholders and other relevant persons for the receipt of
communications from Be Heard may be provided to offerors (including
Bidco) during the Offer Period as required under Section 4 of
Appendix 4 of the Code to comply with Rule 2.11(e) of the Code.
General
If you are in any doubt about the contents of this Announcement
or the action you should take, you are recommended to seek your own
independent financial advice immediately from your stockbroker,
bank manager, solicitor or independent financial adviser duly
authorised under the Financial Services and Markets Act 2000 (as
amended from time to time) if you are resident in the United
Kingdom or, if not, from another appropriate authorised independent
financial adviser.
Time
All times stated in this Announcement are London times, unless
otherwise stated.
Appendix I
Conditions and further terms of the Acquisition and the
Scheme
Part A: Conditions to the Acquisition
1. The Acquisition is conditional upon the Scheme becoming
unconditional and becoming Effective, subject to the Code, by no
later than 11.59 p.m. on the Long Stop Date or such later date (if
any) as Bidco and Be Heard may agree and (if required) the Panel
and the Court may allow.
2. The Scheme shall be conditional on the following conditions:
Scheme approval
(a) the approval of the Scheme at the Court Meeting or at any
adjournment of any such meeting, provided that the Court Meeting
may not be adjourned beyond the 22nd day after the expected date of
the Court Meeting to be set out in the Scheme Document (or such
later date, if any, as Bidco and Be Heard may agree and the Court
may allow), by a majority in number of the Be Heard Shareholders
entitled to vote representing 75 per cent. or more in value (or the
relevant class or classes thereof, if applicable) present and
voting, either in person or by proxy;
(b) the Special Resolution required to approve and implement the
Scheme as set out in the notice of the General Meeting being duly
passed by the requisite majority required to pass such resolution
at the General Meeting or at any adjournment of that meeting,
provided that the General Meeting may not be adjourned beyond the
22nd day after the expected date of the General Meeting to be set
out in the Scheme Document (or such later date, if any, as Bidco
and Be Heard may agree and the Court may allow);
(c) the Rollover Managers Resolution required pursuant to Rules
16.1 and 16.2 of the Code to approve the Rollover Manager
Arrangements as set out in the notice of the General Meeting being
duly passed on a poll at the General Meeting or at any adjournment
of that meeting by a majority of the Be Heard Rollover Independent
Shareholders present and voting, either in person or by proxy,
provided that the General Meeting may not be adjourned beyond the
22nd day after the expected date of the General Meeting to be set
out in the Scheme Document (or such later date, if any, as Bidco
and Be Heard may agree and the Court may allow);
(d) the Earn Out Resolution required pursuant to Rule 16.1 of
the Code to approve the Earn Out Arrangements as set out in the
notice of the General Meeting being duly passed on a poll at the
General Meeting or at any adjournment of that meeting by a majority
of the Be Heard Earn Out Independent Shareholders present and
voting, either in person or by proxy, provided that the General
Meeting may not be adjourned beyond the 22nd day after the expected
date of the General Meeting to be set out in the Scheme Document
(or such later date, if any, as Bidco and Be Heard may agree and
the Court may allow);
(e) the Corner Resolution required pursuant to Rule 16.1 of the
Code to approve the Corner Disposal as set out in the notice of the
General Meeting being duly passed on a poll at the General Meeting
or at any adjournment of that meeting by a majority of the Be Heard
Corner Independent Shareholders present and voting, either in
person or by proxy, provided that the General Meeting may not be
adjourned beyond the 22nd day after the expected date of the
General Meeting to be set out in the Scheme Document (or such later
date, if any, as Bidco and Be Heard may agree and the Court may
allow); and
(f) the sanction of the Scheme by the Court (without
modification or with modification on terms acceptable to Bidco and
Be Heard) and the delivery of a copy of the Scheme Court Order to
the Registrar of Companies.
3. In addition, Be Heard and Bidco have agreed that the
Acquisition will be conditional upon the following conditions and,
accordingly, the necessary actions to make the Scheme Effective
will not be taken unless each of such conditions (as amended, if
appropriate) have been satisfied or, where relevant, waived by
Bidco:
Other Third Party clearances
(a) no government or governmental, quasi-governmental,
supranational, statutory, administrative or regulatory body or
association, institution or agency (including any trade agency) or
any court tribunal in any jurisdiction (each a " Relevant Authority
") having taken or instituted or given written notice of any
action, proceeding, suit, investigation, enquiry or reference (and,
in each case, not having withdrawn the same) or enacted, made or
proposed and there not continuing to be outstanding any statute,
regulation, order or decision that would or might reasonably be
expected to:
(i) make the Acquisition or its implementation or other
acquisition of Be Heard Shares, or control or management of Be
Heard by Bidco or any member of the Wider Bidco Group void,
unenforceable or illegal in any jurisdiction or directly or
indirectly prohibit or otherwise materially restrict, materially
delay or materially interfere with the implementation of, or impose
material additional conditions or obligations with respect to, or
otherwise materially challenge or require material amendment to the
terms of, the Scheme or the Acquisition or other acquisition of any
Be Heard Shares, or control or management of Be Heard by Bidco or
any member of the Wider Bidco Group;
(ii) require, prevent or materially delay the divestiture (or
alter the terms of any proposed divestiture) by the Wider Bidco
Group (as a result of or in connection with the Acquisition) or the
Wider Be Heard Group of all or any material part of their
respective businesses, assets or properties or impose any material
limitation on their ability to conduct all or any part of their
respective businesses and to own, control or manage any of their
respective assets or properties;
(iii) impose any limitation on, or result in any material delay
in, the ability of any member of the Wider Bidco Group to acquire
or hold or to exercise effectively, directly or indirectly, all or
any rights of ownership of shares or other securities (or the
equivalent) in, or to exercise management control over, any member
of the Wider Be Heard Group or on the ability of any member of the
Wider Be Heard Group to hold or to exercise effectively, directly
or indirectly, all or any rights of ownership of shares or other
securities (or the equivalent) in, or to exercise management
control over, any other member of the Wider Be Heard Group to an
extent which is material in the context of the Wider Be Heard Group
taken as a whole or the Wider Bidco Group taken as a whole or
material in the context of the Acquisition (as the case may
be);
(iv) except pursuant to Chapter 3 of Part 28 of the Companies
Act, require any member of the Wider Bidco Group (as a result of or
in connection with the Acquisition) or of the Wider Be Heard Group
to acquire or offer to acquire any shares or other securities (or
the equivalent) or interest in any member of the Wider Be Heard
Group or any member of the Wider Bidco Group owned by a third party
(other than in the implementation of the Acquisition);
(v) require the divestiture by any member of the Wider Bidco
Group of any shares, securities or any other interests in any
member of the Wider Be Heard Group or Wider Bidco Group;
(vi) impose any material limitation on, or result in any
material delay in, the ability of any member of the Wider Bidco
Group or the Wider Be Heard Group to integrate or co-ordinate its
business, or any part of it, with the businesses or any part of the
businesses of any other member of the Wider Bidco Group and/or the
Wider Be Heard Group;
(vii) result in any member of the Wider Be Heard Group ceasing
to be able to carry on business under any name under which it
presently does so, to an extent which is material in the context of
the Wider Be Heard Group taken as a whole or the Wider Bidco Group
taken as a whole or material in the context of the Acquisition (as
the case may be); or
(viii) otherwise materially and adversely affect the business,
assets, financial or trading position or profits of any member of
the Wider Be Heard Group,
and all applicable waiting and other time periods (including
extensions thereof) during which any such Relevant Authority could
decide to take, institute or threaten any such action, proceeding,
suit, investigation, enquiry or reference having expired, lapsed or
been terminated; provided that, for the avoidance of doubt, this
paragraph 3 (a) shall not apply to any action taken by a Relevant
Authority in relation to a contract or arrangement with a member of
the Wider Be Heard Group entered into in the normal course of its
business;
(b) other than in relation to the approvals referred to in
paragraph 3 (a) of this Appendix I, all material filings,
applications and/or notifications which are necessary under
applicable legislation or regulation of any relevant jurisdiction
having been made and all relevant waiting periods and other time
periods (including any extensions thereof) under any applicable
legislation or regulation of any relevant jurisdiction having
expired, lapsed or been terminated and all applicable statutory or
regulatory obligations in any jurisdiction having been complied
with, in each case in respect of the Scheme and the Acquisition,
or, except pursuant to Chapter 3 of Part 28 of the Companies Act,
other acquisition of any shares or other securities in, or control
or management of, Be Heard or any member of the Wider Be Heard
Group by any member of the Wider Bidco Group or (except as
Disclosed) the carrying on by any member of the Wider Be Heard
Group of its business;
(c) other than in relation to the approvals referred to in
paragraph 3(a) of this Appendix I, all Authorisations which are
necessary in any jurisdiction for or in respect of the Acquisition
and other acquisition of any Be Heard Shares, or control of Be
Heard , by Bidco or any member of the Wider Bidco Group being
obtained on terms and in a form reasonably satisfactory to Bidco
from appropriate Relevant Authorities, or (except as Disclosed)
from any persons or bodies with whom any member of the Wider Be
Heard Group has entered into contractual arrangements or material
business relationships, and such Authorisations, together with all
other Authorisations necessary for any member of the Wider Be Heard
Group to carry on its business (except as Disclosed) (where the
absence of any such Authorisations would be material and adverse in
the context of the Acquisition) remaining in full force and effect
and no written notice of any intention to revoke, suspend, restrict
or modify or not to renew any of the same having been given;
Confirmation of absence of adverse circumstances
(d) except as Disclosed, there being no provision of any
agreement, arrangement, licence, lease, franchise, permit or other
instrument to which any member of the Wider Be Heard Group is a
party or by or to which any such member or any of its assets is or
may be bound, entitled or subject which, as a result of the
implementation of the Acquisition or other acquisition by Bidco or
any member of the Wider Bidco Group of any Be Heard Shares, or
change in the control or management of Be Heard , would or would
reasonably be expected to result in (in each case to an extent
which is material in the context of the Wider Be Heard Group taken
as a whole):
(i) any monies borrowed by or any other indebtedness (actual or
contingent) of, or any grant available to, any member of the Wider
Be Heard Group becoming repayable, or capable of being declared
repayable, immediately or earlier than the stated repayment date or
the ability of such member to borrow monies or incur any
indebtedness being withdrawn or inhibited;
(ii) other than in the normal course of its business, the
creation or enforcement of any mortgage, charge or other security
interest over the whole or any material part of the business,
property or assets of any member of the Wider Be Heard Group or any
such mortgage, charge or other security interest (whenever arising
or having arisen) becoming enforceable;
(iii) any material rights, assets or interests of any member of
the Wider Be Heard Group being or falling to be disposed of or
ceasing to be available to any member of the Wider Be Heard Group
or any right, under which any such asset or interest could be
required to be disposed of or could cease to be available to any
member of the Wider Be Heard Group, being exercised or reasonably
likely to be exercised;
(iv) the interest or business of any member of the Wider Be
Heard Group in or with any other person, firm or company (or any
agreements or arrangements relating to such interest or business)
being terminated or adversely modified or affected;
(v) any member of the Wider Be Heard Group ceasing to be able to
carry on business under any name under which it presently does
so;
(vi) the value of any member of the Wider Be Heard Group or its
financial or trading position or prospects being prejudiced or
adversely affected;
(vii) any such agreement, arrangement, licence, lease,
franchise, permit or other instrument being terminated or the
rights, liabilities, obligations or interests of any member of the
Wider Be Heard Group being adversely modified or adversely affected
or any obligation or liability arising or any adverse action being
taken or arising thereunder;
(viii) the creation or acceleration of any liability of any
member of the Wider Be Heard Group to make any severance,
termination, bonus or other payment to any of its directors or
other officers;
(ix) the creation or acceleration of any liability (actual or
contingent) of any member of the Wider Be Heard Group, other than
trade creditors or other liabilities incurred in the normal course
of business; or
(x) any requirement on any member of the Wider Be Heard Group to
acquire, subscribe, pay up or repay any shares or other securities
(or the equivalent),
and no event having occurred which, under any provision of any
agreement, arrangement, licence or other instrument to which any
member of the Wider Be Heard Group is a party or by or to which any
such member or any of its assets is or may be bound or subject,
would or would reasonably be expected to result in any events or
circumstances as are referred to in this paragraph 3(d) (in each
case to an extent which is material in the context of the Wider Be
Heard Group taken as a whole);
No material transactions, claims or changes in the conduct of
the business of the Wider Be Heard Group
(e) except as Disclosed, no member of the Wider Be Heard Group
having since 31 December 2019:
(i) issued or agreed to issue or authorised or proposed the
issue of additional shares of any class, or securities convertible
into, or exchangeable for, or rights, warrants or options to
subscribe for or acquire, any such shares or convertible or
exchangeable securities or transferred or sold (or agreed to
transfer or sell) any shares out of treasury (except as between Be
Heard and its wholly-owned subsidiaries or solely between
wholly-owned subsidiaries of Be Heard or for Be Heard Shares issued
pursuant to the exercise of options or vesting of awards granted in
the ordinary course);
(ii) recommended, declared, paid or made or resolved to
recommend, declare, pay or make any bonus, dividend or other
distribution, whether payable in cash or otherwise, other than
dividends or other distributions, whether payable in cash or
otherwise, lawfully paid or made by any wholly-owned subsidiary of
Be Heard to Be Heard or any of its wholly-owned subsidiaries;
(iii) (except for transactions between Be Heard and its
wholly-owned subsidiaries, or between its wholly-owned subsidiaries
or transactions in the normal course of business) implemented or
authorised, or announced its intention to implement or authorise,
any merger, demerger, reconstruction, amalgamation, scheme or
commitment, acquired or disposed of or transferred, mortgaged or
charged, or created any other security interest over, any asset or
any right, title or interest in any asset (in each case to an
extent which is material in the context of the Wider Be Heard Group
taken as a whole);
(iv) entered into, or authorised the entry into, any joint
venture, asset or profit sharing arrangement, partnership or merger
of businesses or corporate entities (in each case to an extent
which is material in the context of the Wider Be Heard Group taken
as a whole);
(v) other than pursuant to the Acquisition and except for
transactions between Be Heard and its wholly-owned subsidiaries or
between wholly-owned subsidiaries of Be Heard , implemented or
authorised any reconstruction, amalgamation, scheme or other
transaction or arrangement with a substantially equivalent effect
(in each case to an extent which is material in the context of the
Wider Be Heard Group taken as a whole);
(vi) purchased, redeemed or repaid any of its own shares or
other securities or reduced or made or authorised any other change
in its share capital (except, in each case, where relevant, as
between Be Heard and its wholly-owned subsidiaries or solely
between wholly-owned subsidiaries of Be Heard) ;
(vii) made or authorised any change in its loan capital or
issued or authorised the issue of any debentures or incurred or
increased any indebtedness (except in the normal course of
business) or contingent liability (except, in each case, where
relevant, as between Be Heard and wholly-owned subsidiaries of Be
Heard or between the wholly-owned subsidiaries of Be Heard ) (in
each case to an extent which is material in the context of the
Wider Be Heard Group taken as a whole);
(viii) entered into, varied or terminated, or authorised the
entry into, variation or termination of, any contract, commitment
or arrangement (whether in respect of capital expenditure, real
estate or otherwise) which is outside the normal course of business
or which is of a long term, onerous or unusual nature or magnitude
or which involves, or would reasonably be expected to involve, an
obligation of a nature or magnitude which is materially restrictive
on the business of any member of the Wider Be Heard Group (in each
case to an extent which is material in the context of the Wider Be
Heard Group taken as a whole);
(ix) been unable or deemed unable, or admitted in writing that
it is unable, to pay its debts as they fall due or having stopped
or suspended (or threatened to stop or suspend) payment of its
debts generally or ceased or threatened to cease carrying on all or
a substantial part of its business (in each case to an extent which
is material in the context of the Wider Be Heard Group taken as a
whole);
(x) commenced negotiations with any of its creditors or taken
any step with a view to rescheduling or restructuring any of its
indebtedness or entered into a composition, compromise, assignment
or arrangement with any of its creditors, whether by way of a
voluntary arrangement, scheme of arrangement, deed of compromise or
otherwise (in each case to an extent which is material in the
context of the Wider Be Heard Group taken as a whole);
(xi) (other than in respect of a member of the Wider Be Heard
Group which is dormant and solvent at the relevant time) taken any
corporate action or had any legal proceedings started, served or
threatened against it or any documents filed or faxed in court for
its winding-up (voluntary or otherwise), dissolution or
reorganisation (or for any analogous proceedings or steps in any
jurisdiction) or for the appointment of a liquidator, provisional
liquidator, receiver, administrator, administrative receiver,
trustee or similar officer (or for the appointment of any analogous
person in any jurisdiction) of all or any of its assets and
revenues or had written notice given of the intention to appoint
any of the foregoing to it (in each case to an extent which is
material in the context of the Wider Be Heard Group taken as a
whole);
(xii) except in the normal course of business, waived,
compromised, settled, abandoned or admitted any dispute, claim or
counter-claim, whether made or potential and whether by or against
any member of the Wider Be Heard Group (in each case to an extent
which is material in the context of the Wider Be Heard Group taken
as a whole);
(xiii) made any material alteration to its constitutional
documents (other than the amendments to Be Heard's articles of
association as required in connection with the Acquisition);
(xiv) entered into, or varied the terms of, or terminated or
given notice of termination of, in each case except in the normal
course of business, any service agreement, commitment or
arrangement with any director or senior executive of any member of
the Wider Be Heard Group;
(xv) proposed, agreed to provide, or agreed to modify to any
material extent 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 any member of the Wider Be
Heard Group; or
(xvi) entered into any contract, commitment or arrangement or
passed any resolution or made any offer (which remains open for
acceptance) to effect, or proposed or announced any intention to
effect, any of the transactions, matters or events referred to in
this paragraph 3(e) (otherwise than where permitted or referred to
in this paragraph 3(e));
No material adverse change
(f) except as Disclosed, since 31 December 2019 :
(i) no adverse change having occurred, and no circumstances
having arisen which would reasonably be expected to result in any
adverse change, in the business, assets, financial or trading
position or profits of any member of the Wider Be Heard Group (in
each case to an extent which is material in the context of the
Wider Be Heard Group taken as a whole);
(ii) no litigation, arbitration proceedings, prosecution or
other legal proceedings in any jurisdiction having been threatened,
announced, instituted or remaining outstanding by, against or in
respect of any member of the Wider Be Heard Group or to which any
member of the Wider Be Heard Group is a party (whether as claimant
or defendant or otherwise) and no investigation by any Relevant
Authority or other investigative body against or in respect of any
member of the Wider Be Heard Group having been threatened,
announced, instituted or remaining outstanding by, against or in
respect of any member of the Wider Be Heard Group (in each case to
an extent which is material in the context of the Wider Be Heard
Group taken as a whole);
(iii) no enquiry, review or investigation by, or complaint or
reference to, any Third Party against or in respect of any member
of the Wider Be Heard Group having been threatened in writing,
announced or instituted or remaining outstanding by, against or in
respect of any member of the Wider Be Heard Group, in each case to
an extent which is material in the context of the Wider Be Heard
Group taken as a whole;
(iv) no steps having been taken and no omissions having been
made which would result in the withdrawal, cancellation,
termination or modification of any licence held by any member of
the Wider Be Heard Group which is necessary for the proper carrying
on of its business, and the withdrawal, cancellation, termination
or modification of which would have a material adverse effect on
the Wider Be Heard Group taken as a whole; or
(v) no contingent or other liability having arisen outside the
normal course of business which would or would reasonably be
expected to adversely affect any member of the Wider Be Heard Group
(in each case to an extent which is material in the context of the
Wider Be Heard Group taken as a whole);
No discovery of certain matters
(g) except as Disclosed, Bidco has not discovered that:
(i) any financial, business or other information concerning the
Wider Be Heard Group publicly announced or disclosed in the context
of the Acquisition on or prior to the date of this Announcement at
any time by any member of the Wider Be Heard Group is misleading,
contains a misrepresentation of fact or omits to state a fact
necessary to make the information contained therein not misleading
(in each case to an extent which is material in the context of the
Wider Be Heard Group taken as a whole);
(ii) there is any information which renders inaccurate any
information publicly announced or disclosed in the context of the
Acquisition prior to the date of this Announcement by or on behalf
of any member of the Wider Be Heard Group (in each case to an
extent which is material in the context of the Wider Be Heard Group
taken as a whole);
(iii) any member of the Wider Be Heard Group is subject to any
liability, contingent or otherwise, other than in the normal course
of business (in each case to an extent which is material in the
context of the Wider Be Heard Group taken as a whole); or
(iv) there is or is likely to be any obligation or liability
(whether actual or contingent) to make good, repair, re-instate or
clean up any property now or previously owned, occupied, operated
or made use of or controlled by any past or present member of the
Wider Be Heard Group under any environmental legislation,
regulation, notice, circular or order of any Relevant Authority in
any jurisdiction (in each case to an extent which is material in
the context of the Wider Be Heard Group taken as a whole);
Anti-corruption, sanctions and criminal property
(h) save as Disclosed, Bidco has not discovered (in each case to
an extent which is material in the context of the Wider Be Heard
Group taken as a whole) that:
(i) any past or present member, director or officer of the Wider
Be Heard Group is or has at any time engaged in any activity,
practice or conduct which would constitute an offence under the
Bribery Act 2010, the US Foreign Corrupt Practices Act of 1977 or
any other applicable anti-corruption legislation;
(ii) any asset of any member of the Wider Be Heard Group
constitutes criminal property as defined by section 340(3) of the
Proceeds of Crime Act 2002 (but disregarding paragraph (b) of that
definition);
(iii) any past or present member, director or officer of the
Wider Be Heard Group, or any other person for whom any such person
may be liable or responsible, has engaged in any business with,
made any investments in, made any funds or assets available to or
received any funds or assets from: (a) any government, entity or
individual in respect of which US or European Union persons, or
persons operating in those territories, are prohibited from
engaging in activities or doing business, or from receiving or
making available funds or economic resources, by US or European
Union laws or regulations, including the economic sanctions
administered by the US Office of Foreign Assets Control, or HM
Treasury in the UK; or (b) any government, entity or individual
targeted by any of the economic sanctions of the United Nations,
the US, the European Union or any of its member states; or
(iv) any member of the Wider Be Heard Group has been engaged in
any transaction with any person targeted by any of the economic
sanctions of the United Nations, the US, the European Union or any
of its member states which would cause Bidco to be in breach of any
law or regulation upon its acquisition of Be Heard, including the
economic sanctions of the US Office of Foreign Assets Control, or
HM Treasury & Customs in the UK;
Intellectual Property
(i) save as Disclosed, Bidco has not discovered that:
(i) any member of the Wider Be Heard Group does not own or have
licensed to it or otherwise possess legally enforceable rights to
use all intellectual property that is:
-- required or reasonably necessary for the conduct of its
business of the relevant member of the Wider Be Heard Group as
currently conducted; or
-- under development for such business;
(ii) any member of the Wider Be Heard Group has infringed any
intellectual property rights of any third party where the
consequences of which would be material in the context of the Wider
Be Heard Group taken as a whole;
(iii) any intellectual property held by any member of the Wider
Be Heard Group that is material in the context of the Wider Be
Heard Group taken as a whole is not valid and subsisting; or
(iv) any persons who are now, or within the last five years have
been, employees, consultants or contractors of any member of the
Wider Be Heard Group have failed to execute proprietary information
and confidentiality agreements, where such failure is material in
the context of the Wider Be Heard Group taken as a whole; and
No tax abuse or avoidance notice
(j) except as Disclosed, Bidco has not discovered that any
member of the Wider Be Heard Group has received any notice,
assessment or claim from any tax authority to the effect that:
(i) such member has advised on or knowingly been involved in any
transaction or series of transactions the main purpose, or one of
the main purposes, of which was the avoidance of tax, either for
itself or any customer of the Wider Be Heard Group;
(ii) any such member has advised on or been party to any
arrangements that were notifiable under the disclosure of tax
avoidance scheme rules provided for in part 7 of the Finance Act
2004, Schedule 11A VAT 1994 or Schedule 17 of the Finance (No.2)
Act 2017 (and, in each case, related regulations), either for
itself of any customer of the Wider Be Heard Group and which were
not so notified;
(iii) any such member has advised on or taken any action as a
result of which it could be treated as having enabled abusive tax
arrangements within the meaning of Schedule 16 Finance (No.2) Act
2017; or
(iv) any circumstances have arisen which would result in any
such member being guilty of an offence under section 45 or section
46 of the Criminal Finances Act 2017.
Part B Waiver or invocation of the Conditions
1. The Scheme will not become Effective unless all of the
Conditions have been fulfilled or (if capable of waiver) waived by
Bidco or, where appropriate, have been determined by Bidco to be or
remain to be satisfied by no later than the Long Stop Date.
2. Bidco reserves the right in its sole discretion (subject to
the requirements of the Code and the Panel) to waive:
(a) those parts of all or any of the Conditions set out in
paragraph 2 of Part A of this Appendix 1 relating to the deadlines
for the Court Meeting, General Meeting and/or the Scheme Court
Hearing. If any such deadline is not met, Bidco shall make an
announcement by 8.00 a.m. on the Business Day following such
deadline confirming whether it has invoked the relevant Condition,
waived the relevant deadlines or agreed with Be Heard to extend the
relevant deadline; or
(b) in whole or in part, all or any of Conditions 3(a) to (j)
inclusive of Part A of this Appendix 1 above. Conditions 1 and 2
are not capable of waiver.
3. Bidco shall be under no obligation to waive (if capable of
waiver), to determine to be or remain satisfied or to treat as
fulfilled any of the Conditions in Part A above by a date earlier
than the latest date specified above for the fulfilment of that
condition, notwithstanding that the other Conditions may at such
earlier date have been waived or fulfilled and that there are, at
such earlier date, no circumstances indicating that any Condition
may not be capable of fulfilment.
4. Under Rule 13.5(a) of the Code, Bidco may not invoke a
Condition to the Acquisition so as to cause the Acquisition not to
proceed, to lapse or to be withdrawn unless the circumstances which
give rise to the right to invoke the Condition are of material
significance to Bidco in the context of the Acquisition. Conditions
2(a), 2(b), 2(c), 2(d), 2(e) and 2(f) and if applicable, any
acceptance condition if the Acquisition is implemented by means of
a Takeover Offer, are not subject to this provision of the
Code.
Part C Implementation by way of Takeover Offer
Bidco reserves the right to elect, subject to the consent of the
Panel, to implement the Acquisition by way of a Takeover Offer. In
such event, such Takeover Offer will be implemented on
substantially the same terms and conditions, so far as applicable,
as those which would apply to the Scheme subject to appropriate
amendments, including (without limitation) an acceptance condition
set at 90 per cent. (or such other percentage (being more than 50
per cent.) as Bidco may decide (subject to the Panel's consent))
(i) in nominal value of the shares to which such Takeover Offer
relates; and (ii) of the voting rights attaching to those shares.
In the event that the Acquisition is implemented by way of a
Takeover Offer, the Be Heard Shares acquired under the Acquisition
will be acquired fully paid and free from all liens, equities,
charges, encumbrances, options, rights of pre-emption and any other
third party rights and interests of any nature and together with
all rights now or hereafter attaching or accruing to them,
including voting rights and the right to receive and retain in full
all dividends and other distributions (if any).
Part D: Certain further terms of the Acquisition
1. The Acquisition shall lapse unless all the above Conditions
in paragraphs 1 and 2 of Part A of this Appendix have been
fulfilled before the Scheme Court Hearing. Such date may not be
further extended, other than with the agreement of Bidco, Be Heard
and the Panel.
2. If Bidco is required by the Panel to make an offer for Be
Heard Shares under the provisions of Rule 9 of the Code, Bidco may
make such alterations to any of the above Conditions and terms of
the Acquisition as are necessary to comply with the provisions of
that Rule.
3. The Be Heard Shares to be acquired under the Acquisition
shall be acquired fully paid and free from all liens, charges,
equitable interests, encumbrances, rights of pre-emption and any
other rights and interests of any nature whatsoever and together
with all rights now and hereafter attaching thereto, including
voting rights and the right to receive and retain in full all
dividends and other distributions (if any) declared, made or paid
on or after the date of this Announcement. Accordingly, insofar as
any dividend or other distribution or return of value or capital is
authorised, declared, made or paid in respect of Be Heard Shares on
or after the date of this Announcement and prior to the Effective
Date, Bidco reserves the right to reduce the consideration payable
in respect of each Be Heard Share by the amount of any such
dividend or other distribution or return except where the Be Heard
Shares are or will be acquired pursuant to the Scheme on a basis
which entitles Bidco to receive the dividend, distribution or
return and to retain it.
4. The availability of the Acquisition to persons not resident
in the United Kingdom may be affected by the laws of the relevant
jurisdictions. Persons who are not resident in the United Kingdom
should inform themselves about and observe any applicable
requirements.
5. The Acquisition is governed by English law and is subject to
the jurisdiction of the English courts and to the Conditions and
further terms set out in this Appendix and those terms which will
be set out in the Scheme Document. The Acquisition shall be subject
to the applicable requirements of the Code, the London Stock
Exchange, the Panel and the Financial Conduct Authority.
6. The Acquisition shall lapse, and shall no longer bind Scheme
Shareholders or Bidco if:
(a) in so far as the Acquisition or any matter arising from or
relating to the Acquisition, the European Commission either
initiates proceedings under Article 6(1)(c) of the Regulation or
makes a referral to a competent authority in the United Kingdom
under Article 9(1) of the Regulation and there is then any CMA
Reference; or
(b) in so far as the Acquisition or any matter arising from the
Acquisition does not constitute a concentration with a Community
dimension within the scope of the Regulation, the Acquisition or
any matter arising from or relating to the Acquisition becomes
subject to any CMA Reference,
in each case, before the date of the Court Meeting.
7. Unless otherwise determined by Bidco or required by the Code,
the Acquisition is not being made, directly or indirectly, in or
into, or by use of the mails or any other means or instrumentality
(including, without limitation, facsimile, e-mail or other
electronic transmission, telex or telephone) of interstate or
foreign commerce of, or any facility of a national, state or other
securities exchange of, any Restricted Jurisdiction and shall not
be capable of acceptance by any such use, means, instrumentality or
facility or from within any Restricted Jurisdiction.
8. Each of the Conditions shall be regarded as a separate
Condition and shall not be limited by reference to any other
Condition.
Appendix II
Sources of information and bases of calculation
In this Announcement, unless otherwise stated, or the context
otherwise requires, the bases and sources used are set out
below.
1. Unless otherwise stated, financial information relating to Be
Heard has been extracted or derived (without any adjustment) from
Be Heard's audited consolidated financial statements for the
financial year ended 31 December 2019.
2. As at the Last Practicable Date, Be Heard's issued share
capital consisted of 1,246,826,584 Be Heard Shares.
3. The International Securities Identification Number for the Be
Heard Shares is GB00BT6SJV45.
4. The value of the issued and to be issued share capital of Be
Heard of GBP6.2 million has been calculated by multiplying 0.5
pence per share by the number of issued and to be issued, which
consists of 1,246,826,584 Be Heard Shares in aggregate in issue as
at the Last Practicable Date.
Appendix III
Irrevocable Undertakings
1. Rollover Managers irrevocable undertakings
Each Rollover Manager including Ben Rudman, who is a Be Heard
Director, has given an irrevocable undertaking to vote (or procure
the voting) in favour of the Special Resolution to be proposed at
the General Meeting, (or, in the event that the Acquisition is
implemented by way of a Takeover Offer, to accept, or procure the
acceptance of, the Takeover Offer) in relation to the following Be
Heard Shares, in which he or his family members are beneficially
interested:
Name Number of Be Heard Percentage of Be
Shares in respect Heard Shares at the
of which undertaking Last Practicable Date
is given
Ben Rudman 69,726,942 5.59
---------------------- -----------------------
James Cannings 69,726,942 5.59
---------------------- -----------------------
Mark Starling 12,130,361 0.97
---------------------- -----------------------
Nick Bygate 10,977,861 0.88
---------------------- -----------------------
Rob Yardy 4,912,665 0.39
---------------------- -----------------------
Rohan Desai 4,591,385 0.37
---------------------- -----------------------
Yasser Abbasi 3,608,862 0.29
---------------------- -----------------------
Chis Palengat 4,651,883 0.37
---------------------- -----------------------
Andrzej Moyseowicz 4,651,883 0.37
---------------------- -----------------------
Richard Armstrong 73,322,549 5.88
---------------------- -----------------------
These irrevocable undertakings will cease to be binding if:
(a) Bidco announces that it does not intend to proceed with the
Acquisition and no new, revised or replacement Scheme or Takeover
Offer is announced by Bidco or any other member of the Bidco Group
contemporaneously in accordance with Rule 2.7 of the Code;
(b) the Acquisition has lapsed or been withdrawn and no new,
revised or replacement Scheme or Takeover Offer has previously been
announced by Bidco in accordance with Rule 2.7 of the Code, or is
announced by Bidco contemporaneously in accordance with Rule 2.7 of
the Code; or
(c) if the Scheme has not become effective prior to 30 October
2020 (or such later time or date as Be Heard and Bidco agree in
writing with the consent of the Panel).
2. Be Heard Independent Director's irrevocable undertakings
Each Independent Director who holds Be Heard Shares has given an
irrevocable undertaking to vote (or procure the voting) in favour
of the Scheme at the Court Meeting and the Resolutions to be
proposed at the General Meeting (or in the event that the
Acquisition is implemented by way of a Takeover Offer, to accept,
or procure the acceptance of, the Takeover Offer) in relation to
the following Be Heard Shares, in which he or his family members
are beneficially interested:
Name Number of Be Percentage Percentage of
Heard Shares of Be Heard Scheme Shares
in respect of Shares at the at the Last
which undertaking Last Practicable Practicable
is given Date Date
Simon Pyper 4,138,456 0.33 0.42
------------------- ------------------ ---------------
David Morrison 3,142,857 0.25 0.32
------------------- ------------------ ---------------
David Wilkinson 3,136,208 0.25 0.32
------------------- ------------------ ---------------
David Poutney 13,192,857 1.06 1.33
------------------- ------------------ ---------------
The irrevocable undertakings given by each of the Be Heard
Non-Executive Directors also contain provisions effecting the
agreement referred to at paragraph 12 of this Announcement.
These irrevocable undertakings will cease to be binding if:
(a) Bidco announces that it does not intend to proceed with the
Acquisition and no new, revised or replacement Scheme or Takeover
Offer is announced by Bidco or any other member of the Bidco Group
contemporaneously in accordance with Rule 2.7 of the Code;
(b) the Acquisition has lapsed or been withdrawn and no new,
revised or replacement Scheme or Takeover Offer has previously been
announced by Bidco in accordance with Rule 2.7 of the Code, or is
announced by Bidco contemporaneously in accordance with Rule 2.7 of
the Code; or
(c) if the Scheme has not become effective prior to 30 October
2020 (or such later time or date as Be Heard and Bidco agree in
writing with the consent of the Panel).
3. Other Be Heard Shareholders' irrevocable undertakings
Certain other Be Heard Shareholders have given irrevocable
undertakings to vote (or procure the voting) in favour of the
Scheme at the Court Meeting and the Resolutions to be proposed at
the General Meeting (or in the event that the Acquisition is
implemented by way of a Takeover Offer, to accept, or procure the
acceptance of, the Takeover Offer) in relation to the following Be
Heard Shares:
Name Number of Be Percentage Percentage
Heard Shares of Be Heard of Scheme
in respect of Shares at Shares at
which undertaking the Last Practicable the Last
is given Date Practicable
Date
Gresham House Asset
Management Limited 153,659,325 12.32 15.54
------------------- ---------------------- -------------
Nigel Wray 64,476,000 5.17 6.52
------------------- ---------------------- -------------
Pete Robins 59,040,542 4.74 5.97
------------------- ---------------------- -------------
Rhys Williams 51,878,974 4.16 5.25
------------------- ---------------------- -------------
Neil Hourston 46,924,363 3.76 4.75
------------------- ---------------------- -------------
Neil Simpson 46,924,363 3.76 4.75
------------------- ---------------------- -------------
Tom Ewart 46,924,363 3.76 4.75
------------------- ---------------------- -------------
Herald Investment
Management Limited 35,615,617 2.86 3.60
------------------- ---------------------- -------------
Stephen Dover 9,040,453 0.73 0.91
------------------- ---------------------- -------------
Ian Stanton 3,438,913 0.28 0.35
------------------- ---------------------- -------------
Total 517,922,913 41.54 52.39
------------------- ---------------------- -------------
The irrevocable undertakings given by Gresham House Asset
Management Limited and Herald Investment Management Limited also
contain the provisions effecting the agreement referred to in
paragraph 12 of this Announcement
The irrevocable undertaking given by Gresham House Asset
Management Limited will cease to be binding if:
(a) Bidco announces, with the consent of the Panel and before
the Scheme Document is published, that it does not intend to
proceed with the Acquisition and no new, revised or replacement
Scheme or Takeover Offer is announced by Bidco or any other member
of the Bidco Group contemporaneously in accordance with Rule 2.7 of
the Code;
(b) if the Scheme has not become effective prior to 30 October
2020 (or such later time or date as Be Heard and Bidco agree in
writing with the consent of the Panel);
(c) a third party announces a firm intention to make an offer
for all of the issued shares in the capital of Be Heard (other than
shares already owned by that third party) pursuant to the Code and
the terms of that offer include a consideration of 0.7p (or higher)
per Be Heard Share, whether such consideration is satisfied in cash
or otherwise;
(d) the Acquisition has lapsed or been withdrawn and no new,
revised or replacement Scheme or Takeover Offer has previously been
announced by Bidco in accordance with Rule 2.7 of the Code, or is
announced by Bidco contemporaneously in accordance with Rule 2.7 of
the Code; or
(e) the Scheme Document has not been posted to Be Heard's
shareholders within 28 days of the date of this Announcement or,
where the Acquisition is implemented by way of a Takeover Offer,
the Takeover Offer document is not posted to Be Heard's
shareholders within the permitted period under the Code or as
otherwise agreed with the Panel.
The irrevocable undertaking given by Herald Investment
Management Limited will cease to be binding if:
(a) Bidco announces, with the consent of the Panel and before
the Scheme Document is published, that it does not intend to
proceed with the Acquisition and no new, revised or replacement
Scheme or Takeover Offer is announced by Bidco or any other member
of the Bidco Group contemporaneously in accordance with Rule 2.7 of
the Code;
(b) if the Scheme has not become effective prior to 30 October
2020 (or such later time or date as Be Heard and Bidco agree in
writing with the consent of the Panel);
(c) a third party announces a firm intention to make an offer
for all of the issued shares in the capital of Be Heard (other than
shares already owned by that third party) pursuant to the Code and
the terms of that third party offer values each Be Heard Share at
more than 10 per cent higher than the value under the
Acquisition;
(d) the Acquisition has lapsed or been withdrawn and no new,
revised or replacement Scheme or Takeover Offer has previously been
announced by Bidco in accordance with Rule 2.7 of the Code, or is
announced by Bidco contemporaneously in accordance with Rule 2.7 of
the Code; or
(e) the Scheme Document has not been posted to Be Heard's
shareholders within 28 days of the date of this Announcement or,
where the Acquisition is implemented by way of a Takeover Offer,
the Takeover Offer document is not posted to Be Heard's
shareholders within the permitted period under the Code or as
otherwise agreed with the Panel.
The remaining irrevocable undertakings referred to in this
paragraph 3 of Appendix III will cease to be binding if:
(a) Bidco announces that it does not intend to proceed with the
Acquisition and no new, revised or replacement Scheme or Takeover
Offer is announced by Bidco or any other member of the Bidco Group
contemporaneously in accordance with Rule 2.7 of the Code;
(b) the Acquisition has lapsed or been withdrawn and no new,
revised or replacement Scheme or Takeover Offer has previously been
announced by Bidco in accordance with Rule 2.7 of the Code, or is
announced by Bidco contemporaneously in accordance with Rule 2.7 of
the Code; or
(c) if the Scheme has not become effective prior to 30 October
2020 (or such later time or date as Be Heard and Bidco agree in
writing with the consent of the Panel).
Appendix IV
Definitions
"Acquisition" the proposed recommended acquisition by Bidco
of the entire issued and to be issued share
capital of Be Heard by means of the Scheme,
on the terms and subject to the conditions
set out in this Announcement and to be set
out in the Scheme Document (or, in certain
circumstances described in this Announcement,
the Takeover Offer)
"Additional Investment" has the meaning given in paragraph 11.1(d)
of this Announcement
"Agenda21" Agenda 21 Digital Holding Limited, a company
incorporated in England and Wales (registered
number 9790018) whose registered office address
is at 53 Frith Street, London W1D 4SN
"Agenda21 Earn Out Holders" each of Stephen Dover, Peter Robins and Rhys
Williams
"Agenda21 Supplemental the supplemental agreement entered into on
Agreement" or around the date of this Announcement between
the Agenda21 Earn Out Holders, the Company
and Bidco
"AIM" AIM, a market operated by the London Stock
Exchange
"Announcement" means this announcement made pursuant to Rule
2.7 of the Code
"Authorisations" regulatory authorisations, orders, recognitions,
grants, consents, clearances, confirmations,
certificates, licences, permissions or approvals
"Be Heard" or the "Company" Be Heard Group plc, a company incorporated
in England and Wales (registered number 9223440)
whose registered office is at 53 Frith Street,
London W1D 4SN
"Be Heard Directors" the directors of Be Heard at the date of this
Announcement
"Be Heard Group" Be Heard and its subsidiary undertakings and,
where the context permits, each of them
"Be Heard Corner Independent means the Be Heard Shareholders except the
Shareholders" Corner Purchasers, their connected persons,
any person holding Be Heard Shares on behalf
of any Corner Purchaser and/or any of their
connected persons
"Be Heard Earn Out Independent means the Be Heard Shareholders except the
Shareholders" Leaver Earn Out Participants, their connected
persons, any person holding Be Heard Shares
on behalf of any Leaver Earn Out Participant
and/or any of their connected persons
"Be Heard Meetings" the Court Meeting and the General Meeting
"Be Heard Non-Executive David Morrison and David Poutney
Directors"
"Be Heard Rollover Independent means the Be Heard Shareholders except the
Shareholders" Rollover Managers, their connected persons,
any person holding Be Heard Shares on behalf
of any Rollover Manager and/or any of their
connected persons
"Be Heard Share" an ordinary share of GBP0.01 in the capital
of Be Heard
"Be Heard Shareholders" the holders of Be Heard Shares from time to
time
"Bidco" or "MSQ Partners" MSQ Partners Ltd, a company incorporated in
England and Wales (registered number 07745643)
whose registered office address is at 90 Tottenham
Court Road, London, W1T 4TJ
"Bidco Group" Bidco and its subsidiary undertakings and,
where the context permits, each of them
"Bidco Put and Call Option the conditional put and call option deed entered
Deed" into on or around the date of this Announcement
between Midco and the Rollover Managers
"Board" the board of directors of Bidco or Be Heard
(as applicable)
"Bondholders" Gresham House Asset Management Limited (on
behalf of the Gresham Bondholders), the Be
Heard Non-Executive Directors and Herald Investment
Management Limited
"Business Day" a day (other than Saturdays, Sundays and public
or bank holidays in the UK) on which banks
are generally open for business in the City
of London
"Cairn" means Cairn Financial Advisers LLP, the independent
financial adviser to Be Heard for the purposes
of Rule 3 of the Code
"Closing Price" the closing middle market quotation of a Be
Heard Share as derived from the AIM Appendix
of the Daily Official List save that quotations
for 23 June 2020 have been derived from the
website of the London Stock Exchange
"CMA Reference" a reference of the Acquisition 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
"Code" the City Code on Takeovers and Mergers, issued
and as amended from time to time by the Panel
"Companies Act" the Companies Act 2006, as amended from time
to time
"Company Put and Call Option the conditional put and call option deed dated
Deed" on or around the date of this Announcement
between Bidco and the Freemavens Shareholders
"Competition and Markets a UK statutory body established under the Enterprise
Authority" and Regulatory Reform Act 2013
"Conditions" the conditions to the Acquisition (including
the Scheme) set out in Part A of Appendix I
to this Announcement and to be set out in the
Scheme Document
"Corner Disposal" the proposed disposal of the entire issued
share capital of The Corner by Be Heard to
the Corner Purchasers
"Corner Documents" the Corner SPA, the Corner TSA and the Kameleon
BPA
"Corner Purchasers" each of Tom Ewart, Neil Simpson and Neil Hourston
"Corner Resolution" the ordinary resolution approving the Corner
Disposal and the Corner Documents to be proposed
at the General Meeting and to be held on a
poll of the Be Heard Corner Independent Shareholders
"Corner SPA" the conditional share purchase agreement entered
into on or around the date of this Announcement
between Be Heard, the Corner Purchasers and
Bidco relating to the Corner Disposal
"Corner TSA" the conditional transitional services agreement
entered into on or around the date of this
Announcement between the Company, The Corner
and Bidco relating to the Corner Disposal
"Court" the High Court of Justice in England and Wales
"Court Meeting" the meeting(s) of the Scheme Shareholders to
be convened by order of the Court pursuant
to section 896 of the Companies Act, notice
of which will be set out in the Scheme Document,
for the purposes of considering, and if thought
fit, approving the Scheme (with or without
amendment) and any adjournment, postponement
or reconvention thereof
"CREST" the relevant system (as defined in the Uncertificated
Securities Regulations 2001 (SI 2001/3755)
in respect of which Euroclear is the Operator
(as defined in such Regulations) for the paperless
settlement of trades in securities and the
holding of uncertificated securities
"Dealing Disclosure" has the meaning given to it by Rule 8 of the
Code
"Disclosed" information which has been:
(a) disclosed in the annual report and accounts
for Be Heard for the financial period ended
31 December 2019;
(b) disclosed in any announcement made by Be
Heard to a Regulatory Information Service during
the 12 month period prior to the publication
of this Announcement; or
(c) disclosed in this Announcement
"Earn Out Arrangements" the arrangements between Be Heard and the Leaver
Earn Out Participants as documented in the
MMT Supplemental Agreement (in so far as it
relates to Ian Stanton only) and the Agenda21
Supplemental Agreement
"Earn Out Resolution" the ordinary resolution to approve the Earn
Out Arrangements to be proposed at the General
Meeting and to be held on a poll of the Be
Heard Earn Out Independent Shareholders
"EBITDA" earnings before interest, taxes, depreciation
and amortisation
"Economic Entitlement" has the meaning given in paragraph 11.1(a)
of this Announcement
"Effective" the Scheme having become effective in accordance
with its terms, upon delivery of the Scheme
Court Order to the Registrar of Companies
"Effective Date" the date upon which the Scheme becomes Effective
"Enlarged Group" the Wider Bidco Group as enlarged by the Acquisition
"Euroclear" Euroclear UK and Ireland Limited
"Excluded Shares" (a) any of the Be Heard Shares held by Bidco
or, directly or indirectly, by any of the LDC
Funds;
(b) any Be Heard Shares held in treasury for
the time being; and
(c) any Be Heard Shares registered in the name
of or beneficially owned by the Rollover Managers,
their nominees or any person acting in concert
with the Rollover Managers for the purposes
of the Code at any relevant date or time
"Facilities Agreement" the facilities agreement dated 10 May 2019
and as amended and restated on or around the
date of this Announcement, and made between
Topco as the company, Topco and certain of
its subsidiaries as original borrowers and
original guarantors, HSBC UK Bank plc as arranger,
original lender, agent and security agent and
HSBC Bank plc as original hedge counterparty
"Financial Conduct Authority" the UK Financial Conduct Authority or its successor
for the time being
"Forms of Proxy" the forms of proxy for use at the Court Meeting
and at the General Meeting which will accompany
the Scheme Document
"Freemavens" Freemavens Limited, a company incorporated
in England and Wales (registered number 8269001)
whose registered office address is at 53 Frith
Street, London W1D 4SN
"Freemavens Shareholders" each of Chris Palengat and Andrzej Moyseowicz
"Freemavens Shareholders the shareholders agreement entered into on
Agreement" 9 February 2017 between the Company, Freemavens
and the Freemavens Shareholders (as amended,
varied and supplemented)
"Freemavens SPA" the conditional sale and purchase agreement
entered into on or around the date of this
Announcement between the Freemavens Shareholders,
the Company and Bidco
"General Meeting" the general meeting of Be Heard Shareholders
(including any adjournment thereof) to be convened
in connection with the Scheme, notice of which
will be set out in the Scheme Document
"Gresham Bondholders" Gresham House Strategic plc, Gresham House
plc and Gresham Strategic Public Equity Fund
LP
"Independent Directors" each of Simon Pyper, David Morrison, David
Wilkinson and David Poutney
"Kameleon" Kameleon Worldwide Limited, a company incorporated
in England and Wales (registered number 6611178)
whose registered office address is at 53 Frith
Street, London W1D 4SN
"Kameleon BPA" the business purchase agreement entered into
on or around the date of this Announcement
between The Corner, Kameleon and Bidco
"Kameleon Earn Out Holder" Richard Armstrong, who holds Be Heard Shares
"Kameleon Supplemental the supplemental agreement entered into on
Agreement" or around the date of this Announcement between
the Kameleon Earn Out Holder, the Company and
Bidco
"Last Practicable Date" 23 June 2020 , being the last practicable date
prior to the publication of this Announcement
"LDC" Lloyds Development Capital, the private equity
arm of Lloyds Banking Group
"LDC Funds" LDC VIII LP and LDC Parallel VIII LP
"Leaver Earn Out Participants" the Agenda21 Earn Out Holders and Ian Stanton
"London Stock Exchange" London Stock Exchange plc
"Long Stop Date" 5.00 p.m. on 30 October 2020, or such later
date (if any) as may be agreed by Bidco and
Be Heard (with the consent of the Panel) and
the approval of the Court (if such approval
is required)
"Midco" MSQ Partners Group Limited, a company incorporated
in England and Wales (registered number 09044213)
whose registered office address is at 90 Tottenham
Court Road, London, W1T 4TJ
"Midco Put and Call Option the conditional put and call option deed entered
Deed" into on or around the date of this Announcement
between Topco and the Rollover Managers
"MMT" MMT Ltd, a company incorporated in England
and Wales (registered number 3681297) whose
registered office address is at 1a Uppingham
Gate, Ayston Road, Uppingham, Oakham, Rutland,
LE15 9NY
"MMT Rollover Managers" Ben Rudman, James Cannings and certain other
employees of the Be Heard Group, all of whom
hold Be Heard Shares
"MMT Supplemental Agreement" the supplemental agreement entered into on
or around the date of this Announcement between
the MMT Rollover Managers, Ian Stanton, the
Company and Bidco
"Offer Period" in relation to the Acquisition , has the meaning
given to it in the Code, which period commenced
on 9 June 2020
"Offer Price" 0.5 pence per Be Heard Share
"Opening Position Disclosure" has the meaning given to it in Rule 8 of the
Code
"Panel" the Panel on Takeovers and Mergers
"Put and Call Option Deeds" the Company Put and Call Option Deed, the Bidco
Put and Call Option Deed and the Midco Put
and Call Option Deed
"Registrar of Companies" the Registrar of Companies in England and Wales
"Regulation" Council Regulation (EC) No 139/2004
"Regulatory Information an information service authorised from time
Service" to time by the Financial Conduct Authority
for the purposes of disseminating regulatory
announcements
"Relevant Authority" has the meaning given to it in paragraph 3(a)
of Appendix I to this Announcement
"Resolutions" together, the Special Resolution, the Rollover
Managers Resolution, the Earn Out Resolution
and the Corner Resolution
"Restricted Jurisdiction" any jurisdiction where local laws or regulations
may result in a significant risk of civil,
regulatory or criminal exposure if the information
concerning the Acquisition is sent or made
available to Be Heard Shareholders in that
jurisdiction
"Rollover Manager Arrangements" the arrangements between, amongst others, Topco
and the Rollover Managers as documented in
the Service Agreement, the Additional Investment,
the Sale and Purchase Agreement, the Freemavens
SPA, the Put and Call Option Deeds, the Shareholders'
Agreement, the Kameleon Supplemental Agreement
and the MMT Supplemental Agreement as it relates
to the MMT Rollover Managers
"Rollover Managers" MMT Rollover Managers, Freemavens Shareholders
and Kameleon Earn Out Holder, all of whom hold
Be Heard Shares
"Rollover Managers Resolution" the ordinary resolution to approve the Rollover
Manager Arrangements to be proposed at the
General Meeting and to be held on a poll of
the Be Heard Rollover Independent Shareholders
"Rollover Managers Sweet each of Ben Rudman and certain other Rollover
Equity Participants" Managers, all of whom hold Be Heard Shares
"Sale and Purchase Agreement" the conditional sale and purchase agreement
entered into on or around the date of this
Announcement between Bidco and the Rollover
Managers
"Scheme" the proposed scheme of arrangement under Part
26 of the Companies Act between Be Heard and
the Scheme Shareholders to implement the Acquisition
with or subject to any modification, addition
or condition approved or imposed by the Court
(where applicable) and agreed by Be Heard and
Bidco
"Scheme Court Hearing" the hearing of the Court to sanction the Scheme
under section 899 of the Companies Act
"Scheme Court Order" the order of the Court sanctioning the Scheme
under section 899 of the Companies Act
"Scheme Document" the document to be despatched to (among others)
Be Heard Shareholders including, among other
things, details of the Scheme required by section
897 of the Companies Act, the full terms and
conditions of the Scheme and the notices of
the Be Heard Meetings
"Scheme Record Time" the time and date to be specified as such in
the Scheme Document or such later time and/or
date as Bidco and Be Heard may agree
"Scheme Shareholder" holders of Scheme Shares
"Scheme Shares" all Be Heard Shares:
(a) in issue at the date of the Scheme Document;
(b) issued after the date of the Scheme Document
but before the Voting Record Time (if any);
or
(c) issued at or after the Voting Record Time
and before the Scheme Record Time in respect
of which the original or any subsequent holders
thereof are, or shall have agreed in writing
to be, bound by the Scheme (if any),
in each case excluding the Excluded Shares
"SEC" US Securities and Exchange Commission
"Service Agreement" has the meaning given in paragraph 11.1(e)
of this Announcement
"Shareholders Agreement" the conditional subscription and shareholders'
agreement entered into on or around the date
of this Announcement between the Rollover Managers,
certain of the Sweet Equity Participants, Topco,
LDC (Managers) Limited and the LDC Funds
"Significant Interest" in relation to an undertaking, a direct or
indirect interest of 20 per cent. or more of
(i) the total voting rights conferred by the
equity share capital (as defined in section
548 of the Companies Act) of such undertaking
or (ii) the relevant partnership interest
"Special Resolution" the special resolution to be proposed by Be
Heard at the General Meeting in connection
with, amongst other things, the approval of
the Scheme, the alteration of Be Heard's articles
of association and such other matters as may
be necessary to implement the Scheme and the
cancellation of trading of the Be Heard Shares
"Subscription Arrangements" share subscription letter(s) from certain of
the Topco executives and the LDC Funds to Topco
subscribing for ordinary shares and loan notes
in Topco conditional upon the Scheme having
become Effective in accordance with its terms
"Subscription Letters" has the meaning given in paragraph 11.5.1 of
this Announcement
"Sweet Equity Arrangements" has the meaning given in paragraph 11.2 of
this Announcement
"Sweet Equity Participants" certain employees of the Be Heard Group who
do not hold Be Heard Shares
"Takeover Offer" should the Acquisition be implemented by way
of a takeover offer (as defined in Chapter
3 of Part 28 of the Companies Act), the offer
to be made by or on behalf of Bidco to acquire
the entire issued and to be issued share capital
of Be Heard and, where the context requires,
any subsequent revision, variation, extension
or renewal of such offer and includes any election
available thereunder
"The Corner" The Corner Communications (London) Limited,
a company incorporated in England and Wales
(registered number 7904124) whose registered
office address is at 1 Richmond Mews, London,
W1D 3DA
"Third Party" each of a central bank, government or governmental,
quasi-governmental, supranational, statutory,
regulatory, environmental, administrative,
fiscal or investigative body, court, trade
agency, association, institution, environmental
body, employee representative body or any other
body or person whatsoever performing a similar
function in any jurisdiction
"Topco" Ensco 1314 Limited, a company incorporated
in England and Wales (registered number 11649494)
whose registered office is at 90 Tottenham
Court Road, London, England, W1T 4TJ, the ultimate
holding company of Bidco
"UK" or "United Kingdom" the United Kingdom of Great Britain and Northern
Ireland
"United States" or "US" the United States of America, its territories
and possessions, any state of the United States
of America and the District of Columbia and
all other areas subject to its jurisdiction
"US Exchange Act" the US Securities Exchange Act of 1934, as
amended from time to time
"US Securities Act" the US Securities Act of 1933, as amended from
time to time
"US Shareholder" a Be Heard Shareholder resident or located
in the United States
"Voting Record Time" the date and time specified in the Scheme Document
by reference to which entitlement to vote at
the Court Meeting or the General Meeting (as
applicable) will be determined, expected to
be 6.00 p.m. on the day which is two Business
Days before the date of the Court Meeting or
General Meeting (as applicable) or, if the
Court Meeting or General Meeting (as applicable)
is adjourned, 6.00 p.m. on the day which is
two Business Days before the date of such adjourned
meeting
"Wider Be Heard Group" Be Heard and its subsidiaries, subsidiary undertakings,
associated undertakings and any other body
corporate, partnership, joint venture or person
in which Be Heard and all such undertakings
(aggregating their interests) have a Significant
Interest or which have a Significant Interest
in Be Heard or any other member of the Wider
Be Heard Group
"Wider Bidco Group" Bidco and its subsidiaries, subsidiary undertakings,
associated undertakings, holding companies,
and their respective subsidiaries, subsidiary
undertakings, associated undertakings, holding
companies and any other body corporate, partnership,
joint venture or person in which Bidco and
all such undertakings (aggregating their interests)
have a Significant Interest or which have a
Significant Interest in Bidco or any other
member of the Wider Bidco Group, in each case
other than any member of the Wider Be Heard
Group
"Zeus Capital" Zeus Capital Limited, financial adviser to
Bidco in relation to the Acquisition.
For the purposes of this Announcement:
a) " subsidiary ", " subsidiary undertaking ", " undertaking "
and " associated undertaking " have the respective meanings given
thereto by the Companies Act.
b) All references to " pounds ", " pounds Sterling ", " Sterling
", " GBP ", " pence ", " penny " and " p " are to the lawful
currency of the United Kingdom.
c) All references to " Euro" or " EUR" refer to the European
currency unit, a single currency for certain members of the
European Union managed by the European Central Bank.
d) All references to " US dollars" or " US$" refer are to the
lawful currency of the United States.
e) References to the singular include the plural and vice versa.
f) References to an enactment include references to that
enactment as amended, replaced, consolidated or re-enacted by or
under any other enactment before or after the date of this
Announcement;
g) All references to statutory provision or law or to any order
or regulation shall be construed as a reference to that provision,
law, order or regulation as extended, modified, replaced or
re-enacted from time to time and all statutory instruments,
regulations and orders from time to time made thereunder or
deriving validity therefrom;
h) The words " other ", " includes ", " including ", in
particular and words of similar effect shall not limit any general
words which precede them and any words which follow them shall not
be limited in scope to the same class as the preceding words.
This information is provided by RNS, the news service of the
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