TIDMBILL
RNS Number : 4894Y
Billing Services Group Limited
06 December 2017
NEWS RELEASE
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR
INDIRECTLY, WITHIN, INTO OR IN THE UNITED STATES, AUSTRALIA,
CANADA, JAPAN, NEW ZEALAND, THE REPUBLIC OF IRELAND OR THE REPUBLIC
OF SOUTH AFRICA.
6 December 2017
Billing Services Group Limited
('BSG' or the 'Company')
Tender Offer
BSG is pleased to announce that it proposes to return up to
US$5.0 million to Shareholders by way of a Tender Offer at a price
of US$0.0425 per Share. In aggregate the Company intends to redeem
up to 117,647,059 Shares, representing 41.7 per cent. of the
Company's Issued Capital.
Under the Companies Act 1981 of Bermuda and the AIM Rules, the
Tender Offer does not require the approval of Shareholders at a
general meeting. A Circular is being posted to Shareholders later
today which will also be available on the Company's website
www.bsgclearing.com.
Further details of the Tender Offer are set out below.
Expected Timetable for the Tender Offer*
Publication of the Circular 6 December 2017
Latest time and date for receipt of Forms 1.00 p.m. 14 December 2017
of Tender and TTE Instructions from CREST
Shareholders
Closing Time and Date 1.00 p.m. 14 December 2017
Record Date and Time close of business on 14
December 2017
Outcome of Tender Offer announced by 8.00 a.m. on 15 December
2017
Cancellation of Tender Shares 5.00 p.m. on 21 December
2017
Cheques despatched for Tendered Shares by 21 December 2017
in certificated form and payment through
CREST for Tendered Shares in uncertificated
form
CREST accounts credited for revised holdings by 21 December 2017
of Shares
Despatch of balance share certificates by 21 December 2017
for unsold Shares
* All times shown are references to London time unless otherwise
stated. The dates and times given are indicative only and are based
on the Company's current expectations and may be subject to change.
If any of the times and/or dates above change the revised times
and/or dates will be notified to Shareholders by announcement
through the Regulatory News Service of the London Stock
Exchange.
Unless otherwise defined herein, capitalised terms used in this
announcement shall have the same meaning as defined in the
Circular.
Further information:
Billing Services Group Limited +1 210 949 7000
Norm Phipps
finnCap Limited +44 (0)20 7220 0500
Stuart Andrews/Scott Mathieson
BSG Media Relations +1 210 326 8992
Leslie Komet Ausburn
The information communicated in this announcement is inside
information for the purposes of Article 7 of Regulation
596/2014.
About BSG:
BSG has locations in San Antonio, Texas, USA and Aldermaston,
United Kingdom, and is traded on the London Stock Exchange (AIM:
BILL). For more information on BSG, visit www.bsgclearing.com.
Forward Looking Statements
Certain statements in this announcement are "Forward Looking
Statements." These Forward Looking Statements are not based on
historical facts but rather on the Directors' expectations
regarding the Company's future growth, results of operations,
revenues, profits, dividends, performance, future capital and other
expenditures (including the amount, nature and sources of funding
thereof), competitive advantages, business prospects and
opportunities. Such Forward Looking Statements reflect management's
current beliefs and assumptions and are based on information
currently available to management. Forward Looking Statements
involve significant known and unknown risks and uncertainties. A
number of factors could cause actual results to differ materially
from the results discussed in the Forward Looking Statements
including risks associated with vulnerability to general economic
market and business conditions, competition, environmental and
other regulatory changes, actions by governmental authorities, the
availability of capital markets, reliance on key personnel,
uninsured and underinsured losses and other factors, many of which
are beyond the control of the Company. Although the Forward Looking
Statements contained in this Document are based upon what
management believes to be reasonable assumptions, the Company
cannot assure investors that actual results will be consistent with
these Forward Looking Statements.
The following text has been extracted from the Circular:
1 INTRODUCTION
1.1 On 6 December 2017, the Board announced its intention to
provide Shareholders with an opportunity to realise all or some of
their investment in the Company by offering them the chance to
tender to the Company up to all of their Shares by way of a Tender
Offer. In aggregate, the Company intends to redeem up to an
aggregate of 117,647,059 Shares representing 41.7 per cent. of the
Issued Capital, at a price of US$0.0425 per Ordinary Share and for
aggregate consideration of US$5,000,000 if the Tender Offer is
fully subscribed.
1.2 The Circular sets out the background to and reasons for the
Tender Offer and the reasons why the Board has resolved that the
Company make the Tender Offer. The terms and conditions of and the
procedure for participating in the Tender Offer are also set out in
the Circular and details can be found in Part II of the Circular
and in the accompanying Form of Tender.
1.3 Under the Act and the AIM Rules, the Tender Offer does not
require the approval at a general meeting of the Shareholders.
1.4 Shareholders do not have to accept the Tender Offer.
Following the Tender Offer, the Board will continue to operate its
business in accordance with its current strategy and will seek to
grow the Company's operating revenue and profits. Those
Shareholders who do not accept the Tender Offer will have a
proportionately larger interest in the Issued Capital following
completion of the Tender Offer.
1.5 Although Shareholders should take their own tax advice on
the implications of the Tender Offer for them, the Directors
believe the Tender Offer (as opposed to a cash dividend) is a tax
efficient method of returning value to Shareholders.
2 CURRENT OPERATIONS AND TRADING OF THE COMPANY
Summary and highlights of Interim Results
2.1 On 13 September 2017 the Company released its Interim
Results. Shareholders are advised to review the Interim Results in
detail concurrent with the Circular as the Interim Results provide
the most comprehensive review of the Company's financial
performance and trading for the period to 30 June 2017. Set out
below is a summary of the operational highlights in the period to
30 June 2017:
(a) trading for the six months ended 30 June 2017 was in line
with the Board's expectations and consistent with the recent
trading conditions experienced by the Company;
(b) the Company completed the delivery of the new Wi-Fi Location
Data Service (WLDS) product to AT&T, Boingo and Telus;
(c) the Company signed a new contract with XLN (a UK-based
business telecom provider) to provide Wi-Fi hub services;
(d) the Company extended its hotspot finder and connection
product suite with delivery to VAST Networks (a Wi-Fi network
infrastructure provider based in South Africa);
(e) the Company enhanced the hub service product suite to
include Alerting, and delivered to AT&T;
(f) the Company signed three new Third Party Verification (TPV)
service agreements with Park Power, Pivot Health and National
Health Plans and Benefits; and
(g) the Company deployed TPV services to eight states on behalf of Direct Energy.
Current Trading and Outlook
2.2 In 2016, the Company initiated a strategic review to assist
the Board in determining the future composition of the group,
including its capital structure and business lines. This review is
ongoing, and the decision to make this Tender Offer and return
US$5,000,000 to shareholders represents one of the initial
conclusions of the review. In addition, the Company is in
discussions to sell its Wi-Fi data solutions business. Following a
sale of the Wi-Fi data solutions business, if successful, the board
will consider further cash distributions and other actions with
respect to the legacy businesses.
2.3 The Company expects that revenues in the second half of 2017
will compare unfavourably with the second half of 2016 due to
AT&T's discontinuation of third-party billing in December 2016,
as described in the Company's announcements dated 9 August 2016, 12
September 2016 and 29 March 2017, together with the secular decline
in billable long distance and operator service calls initiated on
wireline phones.
2.4 The Company's direct billing initiative has developed solid
traction and the Directors expect this to continue over the course
of 2017. However, as evidenced by our year-to-date financial
performance, this initiative does not offset AT&T's
discontinuation of third-party billing described above.
2.5 As set out in the Interim Results, the Company performed a
qualitative analysis for goodwill impairment and determined that it
was more likely than not that there was no impairment at 30 June
2017. The continued declining revenue of the wireline business,
along with an associated decrease in operating income has now led
the Board to conclude that an impairment of goodwill should be made
in the next reported accounts and it is expected that this
impairment will be not less than US$16 million. Such a non-cash
impairment loss will result in a lower level of income in the year
ended 31 December 2017 and will reduce shareholders' equity.
2.6 Following the completion of the Tender Offer, the Company
will continue to operate its business in accordance with its
operational model.
3 REASONS FOR THE TER OFFER
The Directors consider that the Tender Offer:
(a) provides an opportunity for Eligible Shareholders who opt to
tender their Shares to the Company to realise the value of their
investment, providing a return of cash now and liquidity which may
not otherwise be available through the market; and
(b) allows Shareholders the opportunity to dispose of Shares
efficiently and free of dealing costs.
4 THE TER OFFER
4.1 Eligible Shareholders are invited to tender their Shares for
purchase by the Company on the terms and subject to the conditions
set out in Part II of the Circular: in the case of Eligible
Shareholders holding certificated Common Shares, in the Form of
Tender and, in the case of Eligible Shareholders holding Depositary
Interests, by sending a TTE Instruction.
4.2 The maximum number of Shares that will be purchased by the
Company under the Tender Offer is 117,647,059 (representing 41.7
per cent. of the Issued Capital). The Company will satisfy payment
for Tendered Shares entirely from its own resources.
4.3 The Tender Offer is being made available to all Eligible
Shareholders on the Register as at the Record Date (other than
certain Overseas Shareholders, as described in paragraph 10 of this
Part I). Eligible Shareholders may tender: (a) some; (b) all; or
(c) none of the Shares registered in their name on the Record Date,
however, only one tender may be made in respect of any single
Share. The total number of Shares tendered by any Eligible
Shareholder should not exceed the total number of Shares registered
in such Eligible Shareholder's name.
4.4 Pursuant to the Tender Offer, Eligible Shareholders may sell
more than their Tender Entitlement to the extent that other
Shareholders tender less than their Tender Entitlement. If at the
Closing Time any Shareholders have tendered less than their Tender
Entitlement under the Tender Offer, surplus tenders will be
accepted in proportion to the number of additional Shares tendered
so that the total number of Shares purchased pursuant to the Tender
Offer does not exceed 117,647,059. Tendered Shares will be acquired
with full title guarantee, free of all liens, charges,
restrictions, claims, equitable interests and encumbrances and
together with all rights attaching to them.
4.5 The Shares tendered by Eligible Shareholders will be
cancelled and thus the overall number of Common Shares issued by
the Company will be reduced by the number of Tendered Shares. The
practical effect of this is that, following completion of the
Tender Offer, each remaining Common Share will (immediately
following such cancellation) represent a greater percentage of the
Company's issued share capital than it does as part of the Issued
Capital.
4.6 All Shares which are successfully tendered and accepted by
the Company (at its sole discretion) will be purchased at the
Purchase Price. No Shares tendered or purported to be tendered at
any price other than the Purchase Price will be purchased by the
Company.
4.7 To be valid, Forms of Tender must be received by the
Receiving Agent, and in the case of a TTE Instruction must settle,
no later than by 1:00 p.m. on 14 December 2017.
4.8 Eligible Shareholders do not have to tender any Shares if
they do not wish to, but, once submitted, a Form of Tender and/or a
TTE Instruction is irrevocable and cannot be withdrawn. Eligible
Shareholders should note that, once tendered, Shares may not be
sold, transferred, charged or otherwise disposed of. Shareholders
who do not want to participate in the Tender Offer should not
complete the Form of Tender and will not be required to make a TTE
Instruction.
4.9 Shareholders should note that the Company is entitled not
to, and will not, proceed with the Tender Offer if the Directors
determine, prior to close of business on the Record Date, that:
(a) the Board cannot be satisfied on reasonable grounds that the
Company is, or immediately after completion of the Tender Offer
will be unable to, satisfy the solvency test prescribed by the
Act;
(b) the Board in its absolute discretion concludes that the
Tender Offer would no longer be likely to promote the success of
the Company for the benefit of Shareholders as a whole; or
(c) there shall occur any material adverse change in national or
international, financial, economic, political or market conditions;
or
which, in respect of (b) and (c) above, in the reasonable
opinion of the Directors of the Company, renders the Tender Offer
temporarily or permanently impractical or inadvisable (taking into
account the background to and reasons for the Tender Offer); the
Company shall in such a case terminate the Tender Offer and shall,
as soon as reasonably practicable thereafter, notify the Eligible
Shareholders affected in writing (and return Tendered Shares as
soon as reasonably practicable).
4.10 Unless the Tender period is extended (at the sole
discretion of the Board) the Tender Offer will remain open from the
date of the Circular until 1:00 p.m. on the Record Date (in the
event of an extension of the Tender Period the Company will notify
all Shareholders through the Regulatory News Service of the London
Stock Exchange on the day any extension is approved).
4.11 In the event that the Tender Offer is cancelled or
withdrawn by the Company (at its sole discretion), the Company will
notify all Shareholders through the Regulatory News Service of the
London Stock Exchange on the day the Tender Offer is cancelled or
withdrawn. Neither the Company nor any Director shall have any
liability to any Shareholder for any loss, damage or costs caused
to such Shareholder as a direct or indirect result of the Tender
Offer and/or its withdrawal or cancellation.
4.12 The Purchase Price is net of all direct costs and expenses
incurred by the Company in connection with the Tender Offer and
therefore the Purchase Price is the actual amount which will be
received from the Company per Ordinary Share successfully sold by
an Eligible Shareholder under the Tender Offer.
4.13 Allocation policy
Each Eligible Shareholder is entitled to sell its Tender
Entitlement of Shares registered in his/her/its name on the Record
Date, rounded down to the nearest whole number of Shares. Eligible
Shareholders may sell more than their Tender Entitlement to the
extent that other Shareholders tender less than their Tender
Entitlement. To the extent that any Shareholders have tendered less
than their Tender Entitlement under the Tender Offer, surplus
tenders will be accepted in proportion to the number of additional
Shares tendered so that the total number of Shares purchased
pursuant to the Tender Offer does not exceed 117,647,059.
5 TAKEOVER CODE
The Company is incorporated in Bermuda and is not subject to the
City Code. Accordingly, the Company is not subject to takeover
regulation in the UK. Investors should be aware in particular that
the protections afforded to shareholders by the City Code which are
designed to regulate the way in which the purchase by a company of
its own shares is conducted will not be available. Neither the
Bye-laws nor Bermuda law contain provisions which provide
protections analogous to those provided by the City Code. For the
avoidance of doubt, no offer will be required to be made under Rule
9 of the City Code, or otherwise, as a result of the Tender
Offer.
6 TAXATION
No advice is provided by the Company regarding taxation.
Shareholders are strongly advised to consult their professional
advisers about their own personal tax position arising in
connection with the Tender Offer.
7 CLOSING TIME AND RECORD DATE
Only Eligible Shareholders who hold Shares at the Closing Time
on the Record Date are eligible to participate in the Tender Offer
in respect of those Shares so held.
Any Shareholder holding shares in certificated form who returns
a Form of Tender is required to return also the relevant share
certificate or a completed letter of indemnity in lieu thereof by
Closing Time on the Record Date.
8 OVERSEAS SHAREHOLDERS
8.1 US Shareholders should refer to the Notice to US
Shareholders attached to the Circular for instructions on how they
can participate in the Tender Offer.
8.2 The Tender Offer is not available to Shareholders whose
address, as stated on either of the Registers, is in a Restricted
Jurisdiction, or who are resident in a Restricted Jurisdiction. The
Board shall use its discretion in deciding whether the Tender Offer
is made available to Shareholders whose address or place of
residence is not in a Restricted Jurisdiction but is outside of the
UK. A Restricted Jurisdiction includes Australia, Canada, Japan,
New Zealand, the Republic of Ireland, the Republic of South Africa,
or any other jurisdiction where the mailing of the Circular or the
making of the Tender Offer into such jurisdiction would constitute
a violation of the laws of such jurisdiction.
8.3 The making of the Tender Offer in, or to persons resident
in, jurisdictions outside the United Kingdom or custodians,
nominees or trustees for persons who are citizens, residents or
nationals of jurisdictions outside the United Kingdom may be
prohibited or affected by the laws of the relevant overseas
jurisdiction. Shareholders who are Overseas Shareholders should
inform themselves about and observe any applicable legal or
regulatory requirements. It is the responsibility of any such
Shareholder wishing to tender Shares to satisfy himself as to the
full observance of the laws of the relevant jurisdiction in
connection therewith, including the obtaining of any governmental,
exchange control or other consents which may be required, the
compliance with other necessary formalities and the payment of any
issue, transfer or other taxes due in such jurisdiction. If you are
in any doubt about your position, you should consult your
professional adviser in the relevant jurisdiction.
8.4 Shareholders will be responsible for any such issue,
transfer or other taxes payable and the Company and any person
acting on their behalf shall be fully indemnified and held harmless
by such Shareholder for any such issue, transfer or other taxes
such person may be required to pay. No steps have been taken to
register or qualify the Tender Offer or to authorise the extending
of the Tender Offer or the distribution of the Circular, the Form
of Tender and any related documents in any territory outside the
United Kingdom.
8.5 A Shareholder will be deemed not to have tendered Shares pursuant to the Tender Offer if:
(a) such Shareholder is unable to make the representations and
warranties set out in paragraph 5 of Part II of the Circular (in
the case of Shareholders holding their interest in certificated
form) and paragraph 6 of Part II of the Circular (in the case of
Shareholders holdings Depositary Interests); or
(b) such Shareholder completes Box 1 of a Form of Tender with an
address in any Restricted Jurisdiction or has a registered address
in any Restricted Jurisdiction and in either case such Shareholder
does not insert in Box 1 of a Form of Tender the name and address
of the person or agent outside of any Restricted Jurisdiction to
whom he wishes the consideration to which he is entitled under the
Tender Offer to be sent, subject to the provisions of this
paragraph and applicable law; or
(c) such Shareholder inserts in Box 4A or 4B of a Form of Tender
the name and address of a person or agent in any Restricted
Jurisdiction to whom he wishes the consideration to which such
Shareholder is entitled under the Tender Offer to be sent; or
(d) the Form of Tender received from him is in an envelope
postmarked in, or which otherwise appears to the Company or its
agents to have been sent from any Restricted Jurisdiction.
8.6 The Company reserves the right, in its absolute discretion,
to investigate in relation to any Tender, whether the
representations and warranties in paragraphs 5 and 6 (as
applicable) of Part II of the Circular are correct and, if such
investigation is undertaken and as a result the Company determines
(for any reason) that such representation and warranty is not
correct, such Tender shall not be valid.
8.7 The provisions in this paragraph 8 and/or any other terms of
the Tender Offer relating to Overseas Shareholders, may be waived,
varied or modified as regards a specific Shareholder or on a
general basis by the Company in its absolute discretion but only if
the Company is satisfied that such waiver, variation or
modification will not constitute or give rise to breach of
applicable securities or other laws. References to a "Shareholder"
shall include references to the persons executing Forms of Tender
and and/or submitting a TTE Instruction, and in the event of more
than one person executing Forms of Tender, the provisions in
paragraph 8.5 above shall apply to them jointly and severally.
9 ACTION TO BE TAKEN IN RESPECT OF THE TENDER OFFER
9.1 Eligible Shareholders who hold Common Shares in certificated form (that is, not in CREST)
Eligible Shareholders who hold Common Shares in certificated
form and who wish to participate in the Tender Offer should follow
the instructions on the accompanying Form of Tender and in Part II
of the Circular and return it by post or by hand (during normal
business hours only) to the Receiving Agent, Link Asset Services,
Corporate Actions, The Registry, 34 Beckenham Road, Beckenham,
Kent, BR3 4TU so as to arrive by no later than the Closing Time on
the Record Date. A pre-paid envelope accompanies this document for
this purpose (for use in the UK only). Eligible Shareholders who
hold their Common Shares in certificated form should also send
their share certificate(s) or other documents of title in respect
of the Common Shares tendered with their Form of Tender.
The execution of the Form of Tender will constitute the
irrevocable appointment of any director or officer of the Company,
or other person(s) nominated by the Company, as a Shareholder's
attorney and/or agent ("Attorney") and an irrevocable instruction
and authorisation for the Attorney to complete and execute all or
any instruments of transfer and/or other documents at the
Attorney's absolute discretion in relation to the Common Shares
being tendered by that Shareholder.
COMPLETED FORMS OF TENDER MUST BE RECEIVED BY NOT LATER THAN
1:00 p.m. ON 14 DECEMBER 2017.
Further details of the procedure for tendering and settlement
are set out in Part II of the Circular and on the accompanying Form
of Tender. Further copies of the Form of Tender may be obtained on
request from Link Asset Services on 0371 664 0321. Calls are
charged at the standard geographic rate and will vary by provider.
Calls outside the United Kingdom will be charged at the applicable
international rate. The helpline is open between 9:00 a.m. and 5.30
p.m., Monday to Friday excluding public holidays in England and
Wales. Please note that Link Asset Services cannot provide any
financial, legal or tax advice and calls may be recorded and
monitored for security and training purposes.
9.2 Eligible Shareholders who hold Depositary Interests
Eligible Shareholders who hold Depository Interests are not
required to complete a Form of Tender. They are therefore not being
sent a Form of Tender with the Circular. Eligible Shareholders who
hold their interest in Common Shares in uncertificated form in
CREST and who wish to tender all or any of their Shares under the
Tender Offer should tender electronically through CREST so that the
TTE Instruction settles no later than 1:00 p.m. on 14 December
2017.
Further details of the procedures for tendering and settlement
are set out in Part II of the Circular.
9.3 US Shareholders
US Shareholders should refer to the Notice to US Shareholders
attached to the Circular for instructions on how they can
participate in the Tender Offer.
9.4 Eligible Shareholders who do not want to participate in the Tender Offer
Eligible Shareholders who do not want to participate in the
Tender Offer do not need to take any action and should not complete
the Form of Tender or make a TTE Instruction.
10 ADDITIONAL INFORMATION
If you are in any doubt about the completion of the Form of
Tender or submission of a TTE Instruction please contact Link Asset
Services on 0371 664 0321. Calls are charged at the standard
geographic rate and will vary by provider. Calls outside the United
Kingdom will be charged at the applicable international rate. The
helpline is open between 9:00 a.m. and 5.30 p.m., Monday to Friday
excluding public holidays in England and Wales. Please note that
Link Asset Services cannot provide any financial, legal or tax
advice and calls may be recorded and monitored for security and
training purposes.
For legal reasons neither the Receiving Agent nor the Company
will be able to give advice on the merits of the Tender Offer or to
provide legal, financial or taxation advice, and accordingly
Shareholders should consult with their stockbroker, solicitor,
accountant, bank manager or other independent professional adviser
for such advice.
11 NO RECOMMENDATION
The Directors make no recommendation to Shareholders in relation
to whether or not tendering for sale any of their Shares pursuant
to the Tender Offer is in their best interests. Whether or not
Eligible Shareholders decide to tender any of their Shares will
depend, among other things, on their individual circumstances,
including their tax position, and on their view of the Company's
prospects, and the management's experience and ability to identify
suitable acquisition targets in the future. Shareholders in any
doubt as to the action they should take should consult an
appropriately qualified independent financial adviser authorised
under the Financial Services and Market Act 2000.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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