TIDMTOL TIDMEVT
RNS Number : 1553B
ToLuna plc
14 February 2011
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD
CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF THAT
JURISDICTION
EMBARGOED FOR RELEASE AT 07.00 ON 14 FEBRUARY 2011
14 February 2011
ACQUISITION
OF
TOLUNA PLC ("TOLUNA")
BY
ITWP ACQUISITIONS LIMITED ("ITWP")
to be implemented by way of a scheme of arrangement
under Part 26 of the Companies Act 2006
Summary of the Acquisition
-- The Independent Directors of ToLuna are pleased to announce
the terms of a proposed acquisition of ToLuna by ITWP (the
"Acquisition").
-- The Acquisition will be made by ITWP. ITWP is a newly
incorporated company formed for the purpose of implementing the
Acquisition. ITWP is supported by Verlinvest, a significant
shareholder in ToLuna.
-- Following the completion of the Acquisition, ITWP intends to
appoint Frederic-Charles Petit, Founder and Chief Executive of
ToLuna, as a director of ITWP and to ask him to continue in his
current role as leader of the executive management team of the
ToLuna Group.
-- Under the terms of the Acquisition, the consideration per
ToLuna Share comprises:
-- 102 pence in cash;
-- 116 ITWP Shares;
-- B Loan Notes with a nominal value of 79 pence; and
-- C Loan Notes with a nominal value of 23 pence.
-- A mix-and-match facility will be made available to allow
ToLuna Shareholders to elect, subject to availability, to vary the
proportions in which they receive cash, ITWP Shares and Loan
Notes.
-- Because of the elections certain ToLuna Shareholders have
irrevocably undertaken to make (as further described in the full
text of this announcement), sufficient cash will be available to
allow those ToLuna Shareholders who so elect to receive all of the
consideration for their ToLuna Shares in the form of 320 pence in
cash per ToLuna Share.
-- TOLUNA SHAREHOLDERS WHO DO NOT RETURN A FORM OF ELECTION
ACCORDING TO THE INSTRUCTIONS WHICH WILL BE CONTAINED IN THE SCHEME
DOCUMENT WILL BE DEEMED TO HAVE MADE AN ELECTION TO RECEIVE 320
PENCE IN CASH PER TOLUNA SHARE. THE FULL DETAILS OF THE
MIX-AND-MATCH FACILITY ARE DESCRIBED IN SECTION 4 OF THE FULL TEXT
OF THIS ANNOUNCEMENT.
-- The Independent Directors, who have been so advised by
Merchant Securities, consider 320 pence in cash per ToLuna Share,
which is available as an option under the mix-and-match facility as
part of the terms of the Acquisition, to be fair and reasonable to
ToLuna Shareholders. In providing the Independent Directors with
advice, Merchant Securities has taken account of the commercial
assessments of the Independent Directors.
-- The Independent Directors, accordingly, intend unanimously to
recommend that all ToLuna Shareholders eligible to vote at the
Meetings vote in favour of the resolutions to be proposed at such
meetings and that all ToLuna Shareholders (other than those who
have already made irrevocable undertakings to the contrary or who
are party to the Contribution and Sale Agreements) elect to receive
320 pence in cash per ToLuna Share under the mix-and-match
facility. The terms of this recommendation are described in section
6 of the full text of this announcement.
-- 320 pence per ToLuna Share represents a premium of:
-- 30.6 per cent. to the closing price per ToLuna Share of
245.00 pence on 11 February 2011, being the last business day prior
to the Announcement Date; and
-- 27.7 per cent. to the average closing price per ToLuna Share
of 250.61 pence for the three months ended 11 February 2011.
-- 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, further details of which are contained in the
full text of this announcement.
-- Implementation of the Scheme will be subject to a number of
conditions including the passing of a resolution by a majority in
number of those Scheme Shareholders present (in person or by proxy)
and voting at the Court Meeting representing at least 75 per cent.
in value of all ToLuna Shares eligible to vote on the Scheme and
the passing of the ToLuna Resolutions and the Ordinary Resolution
at the ToLuna General Meeting.
-- ITWP has received irrevocable undertakings from Eurovestech
plc ("Eurovestech"), Invesco Asset Management Limited ("Invesco"),
and the Independent Directors who hold ToLuna Shares to vote in
favour of the Scheme (including the required resolutions) in
respect of their entire beneficial holdings of ToLuna Shares
amounting, in aggregate, to 30,120 964 ToLuna Shares. These shares
represent approximately 59.6 per cent. of the existing issued share
capital of ToLuna, or approximately 77.3 per cent. of the issued
share capital of ToLuna excluding shares held by the parties to the
Contribution and Sale Agreements which cannot be voted in the
Scheme. Further details of these irrevocable undertakings are set
out in Appendix 2 to this announcement.
-- It is expected that the Scheme Document will be posted to
ToLuna Shareholders within 28 days of the date of this announcement
and that the Scheme will become effective in during April 2011,
subject to the satisfaction of regulatory and all other relevant
conditions, including the conditions as set out in Appendix 1 to
this announcement.
-- ITWP attaches great importance to the skills and experience
of the existing ToLuna management and employees of ToLuna. ITWP has
given assurances to the Independent Directors that, on the
Acquisition becoming effective, the existing employment rights,
including pensions rights, of all ToLuna Group employees will be
observed. ITWP has no current intention to change the location of
ToLuna Group's places of business.
Commenting on the Acquisition, Frederic de Mevius, Founder and
Managing Director of Verlinvest, and Non-Executive Director of
ToLuna, said:
"Verlinvest is excited to strengthen its involvement with
ToLuna, a unique firm with a well-respected brand and excellent
prospects. We have supported the business since becoming a
shareholder in June 2009 and we believe that the business will
continue to develop under the strategies being pursued by
Frederic-Charles Petit. We are pleased to have received the
Independent Directors' recommendation of the cash element of the
offer and we are looking forward to further developing ToLuna's
business."
Frederic-Charles Petit, Founder and Chief Executive Officer of
ToLuna, said:
"It is great for ToLuna to have the support of Verlinvest for
this transaction which is a great growth and long term investment
opportunity for the group, which will benefit from significant new
investment and an increased focus on technology-driven tools and
solutions. We will accelerate the development of ToLuna's online
offering to allow more clients to gain insights from access to
ToLuna's unique global panel. I am also very pleased that
Eurovestech and Invesco will continue to be supportive shareholders
following the acquisition."
George Kynoch, Chairman of the Board of Directors of ToLuna,
said:
"Since joining AIM in 2005, ToLuna has grown rapidly to become
the leading independent provider of online panels. In this time,
ToLuna has created significant value for its shareholders and this
offer is the culmination of that progress."
Terms used in this summary but not defined herein shall have the
meaning given to them in the full text of the announcement.
This summary should be read in conjunction with, and is subject
to, the full text of this announcement including the
Appendices.
Appendix 1 sets out the Conditions and certain further terms of
the Acquisition. Appendix 2 contains details relating to the
irrevocable undertakings given by Eurovestech, Invesco and certain
of the Independent Directors including, in the case of Eurovestech
and Invesco, the elections which they have undertaken to make under
the mix-and-match facility. Part I of Appendix 3 contains details
of the ITWP Shares and Loan Notes offered as consideration by ITWP
in connection with the Acquisition. Part II of Appendix 3 contains
risk factors which are relevant to the ITWP Shares and Loan Notes.
Appendix 4 contains the definitions of certain terms used in this
announcement.
Enquiries
Perella Weinberg Partners (sole financial adviser to ITWP and
Verlinvest)
Tel: +44 (0)20 7268 2800
Philip Yates
Graham Davidson
James Triggs
Merchant Securities Limited (sole financial adviser and
Nominated Adviser to ToLuna)
Tel: +44 (0)20 7628 2200
David Worlidge
Simon Clements
Bidhi Bhoma
Key Terms Of The Acquisition
1. Introduction
The Independent Directors of ToLuna are pleased to announce the
terms of a proposed acquisition of ToLuna by ITWP (the
"Acquisition").
The Acquisition will be made by ITWP, a newly incorporated
company formed by Verlinvest for the purpose of implementing the
Acquisition and with the financial support of Verlinvest, a
significant shareholder in ToLuna.
Following the completion of the Acquisition Frederic-Charles
Petit, Founder and Chief Executive of ToLuna, will be appointed as
a director of ITWP and will continue in his current role as leader
of the executive management team of the ToLuna Group.
2. The Acquisition
Under the terms of the Acquisition, each Scheme Shareholder at
the Scheme Record Time will be entitled to receive:
For each ToLuna Share -- 102 pence in cash;
-- 116 ITWP Shares;
-- B Loan Notes with a nominal value of
79 pence; and
-- C Loan Notes with a nominal value of
23 pence.
A mix-and-match facility will be made available to allow ToLuna
Shareholders to elect, subject to availability, to vary the
proportions in which they receive cash, ITWP Shares and Loan
Notes.
Because of the elections certain ToLuna Shareholders have
irrevocably undertaken to make (further details of which are
described below), sufficient cash will be available to allow those
ToLuna Shareholders who so elect to receive all of the
consideration in respect of their ToLuna Shares in the form of 320
pence in cash per ToLuna Share.
TOLUNA SHAREHOLDERS WHO DO NOT RETURN A FORM OF ELECTION
ACCORDING TO THE INSTRUCTIONS WHICH WILL BE CONTAINED IN THE SCHEME
DOCUMENT WILL BE DEEMED TO HAVE MADE AN ELECTION TO RECEIVE 320
PENCE IN CASH PER TOLUNA SHARE.
The Independent Directors intend unanimously to recommend that
all ToLuna Shareholders eligible to vote at the Meetings vote in
favour of the resolutions to be proposed at such meetings and that
all ToLuna Shareholders (other than those who have already made
irrevocable undertakings to the contrary or who are party to the
Contribution and Sale Agreements) elect to receive 320 pence in
cash per ToLuna Share under the mix-and-match facility. The terms
of this recommendation are described in section 6 of this
announcement.
320 pence in cash per share represents a premium of:
-- 30.6 per cent. to the closing price per ToLuna Share of
245.00 pence on 11 February 2011, being the last business day prior
to the Announcement Date; and
-- 27.7 per cent. to the average closing price per ToLuna Share
of 250.61 pence for the three months ended 11 February 2011.
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, further details of which are contained in section 13
below.
Save to the extent cancelled pursuant to the Scheme, the ToLuna
Shares will be acquired by ITWP fully paid and free from all liens,
equitable interests, charges, encumbrances and other third party
rights of any nature whatsoever and together with all rights
attaching to them including the right to receive and retain all
dividends and distributions (if any) declared, made or payable
after the date of this announcement.
The Acquisition will be subject to the Conditions and further
terms set out in Appendix 1 to this announcement and to be set out
in the Scheme Document.
3. ITWP Shares and Loan Notes
ITWP has decided to offer, as part of the consideration for the
Acquisition, 116 ITWP Shares for each ToLuna Share. The ITWP Shares
will have proportional voting rights and will rank pari passu in
all economic respects with the other shares in ITWP. The ITWP
Shares will have a nominal value of 1 penny per ITWP Share.
ITWP has also decided to offer, as part of the consideration for
the Acquisition, B Loan Notes and C Loan Notes. Any B Loan Notes
and C Loan Notes (which ITWP has not already redeemed - see
paragraph below) will be converted into ITWP Shares at a rate of
one ITWP Share for each penny in nominal value of Loan Notes on the
earlier of an Exit Event and 30 June 2012.
ITWP may, however, redeem the B Loan Notes and/or the C Loan
Notes prior to an Exit Event or 30 June 2012. It is ITWP's current
intention to redeem B Loan Notes in the amount of GBP25.0 million
by 30 June 2011 (ITWP has procured a bank guarantee for this
purpose). Neither the B Loan Notes nor the C Loan Notes will bear
interest.
None of the ITWP Shares, B Loan Notes or C Loan Notes will be
admitted to trading on AIM or any other stock exchange.
Further details about the ITWP Shares, the Loan Notes (including
arrangements for their redemption) and the bank guarantees are set
out in Part I of Appendix 3. Further details about the risk factors
which are relevant to the ITWP Shares and Loan Notes are set out in
Part II of Appendix 3.
4. Mix-and-match facility
A mix-and-match facility will be made available to allow ToLuna
Shareholders to elect, subject to availability, to receive 320
pence in cash per ToLuna Share or a combination of cash, ITWP
Shares and Loan Notes. The elections are subject to the following
restrictions:
-- the total number of ITWP Shares to be issued by ITWP as
consideration in relation to the Acquisition will not exceed
5,097,791,912;
-- the total maximum nominal value of B Loan Notes to be issued
by ITWP as consideration in relation to the Acquisition will not
exceed GBP35 000,000;
-- the total maximum nominal value of C Loan Notes to be issued
by ITWP as consideration in relation to the Acquisition will not
exceed GBP10 472,501.40; and
-- the total maximum amount of cash to be paid by ITWP to Scheme
Shareholders as consideration in relation to the Acquisition will
not exceed GBP44,825,411.64.
ToLuna Shareholders are recommended to consider carefully, in
the light of their own investment objectives and having taken
independent advice appropriate to their own financial
circumstances, if they wish to elect for any equity in the form of
unlisted ITWP Shares and/or Loan Notes.
ToLuna Shareholders may elect under the terms of the Acquisition
to vary the proportions in which they receive cash consideration,
ITWP Shares and Loan Notes. In respect of each of their ToLuna
Shares, ToLuna Shareholders can elect to receive (instead of the
consideration as described in section 2 of this announcement):
320 pence in cash;
320 ITWP Shares;
320 pence in nominal value of B Loan Notes;
or
320 pence in nominal value of C Loan Notes.
ITWP's ability to satisfy elections for cash, ITWP Shares or
Loan Notes under the mix-and-match facility will depend, inter
alia, on countervailing elections being made by other ToLuna
Shareholders. ITWP has already received irrevocable undertakings
from certain ToLuna Shareholders to make elections under the
mix-and-match facility sufficient to allow all other ToLuna
Shareholders to receive 320 pence in cash per ToLuna Share if they
so elect.
To the extent that other ToLuna Shareholders elect to receive
their consideration in forms other than cash, the amount of ITWP
Shares and Loan Notes received by Eurovestech and Invesco will be
scaled back based on their shareholdings in ToLuna, their elections
for ITWP Shares and Loan notes, the elections of other shareholders
for ITWP Shares and Loan Notes and the amount of ITWP Shares and
Loan Notes available under the Acquisition, and Eurovestech and
Invesco will instead receive a portion of cash consideration for
their ToLuna Shares.
TOLUNA SHAREHOLDERS WHO DO NOT RETURN A FORM OF ELECTION
ACCORDING TO THE INSTRUCTIONS WHICH WILL BE CONTAINED IN THE SCHEME
DOCUMENT WILL BE DEEMED TO HAVE MADE AN ELECTION TO RECEIVE 320
PENCE IN CASH PER TOLUNA SHARE. ITWP HAS INFORMED TOLUNA THAT AS A
RESULT OF ELECTIONS THAT EUROVESTECH AND INVESCO HAVE COMMITTED TO
MAKE, THERE WILL BE SUFFICIENT CASH AVAILABLE TO SATISFY IN FULL
ANY ELECTIONS TO RECEIVE CASH CONSIDERATION MADE OR DEEMED TO BE
MADE BY ANY OTHER TOLUNA SHAREHOLDER. THEREFORE, SHOULD ANY TOLUNA
SHAREHOLDER NOT COMPLETE A FORM OF ELECTION HE WILL RECEIVE 320
PENCE IN CASH PER TOLUNA SHARE (SUBJECT TO THE SCHEME PROCEEDING
AND EUROVESTECH AND INVESCO MAKING ELECTIONS IN ACCORDANCE WITH
THEIR IRREVOCABLE COMMITMENTS AS DESCRIBED IN APPENDIX 2).
5. Background to and reasons for the Acquisition
Verlinvest is a Belgian family-owned investment holding company
which undertakes private equity investments, either directly or
indirectly through various subsidiaries. ToLuna is, in the view of
Verlinvest, a perfect complement to Verlinvest's existing portfolio
of investments in consumer product and service companies that
capture long-term consumer trends and stay abreast of changing
consumer behaviour.
Verlinvest has supported the growth and development of ToLuna
since becoming a shareholder in July 2009, when it invested to
support the acquisition of Greenfield Online ISS. Since this
investment, ToLuna has continued to grow rapidly into an extremely
attractive, globally diversified, unique company with a
well-respected brand. Verlinvest believes it can continue to foster
ToLuna's development through significant new investment and by
providing new strategic direction.
ITWP believes that ToLuna is at a crucial stage of its
development. Following the Acquisition, ITWP intends, with the
support of Verlinvest, to take significant steps aimed at
accelerating ToLuna's growth. ToLuna's core activities will
continue to be developed and strengthened. Significant investment
will be made in the business to support the accelerated development
and commercial marketing of technology-driven tools and solutions,
including ToLuna's QuickSurveys and online community toluna.com.
This investment will also enable ToLuna to grow its business in
geographic markets in which the market research industry is less
mature, including in the Asia Pacific region.
As a result of pursuing this strategic direction, ITWP is
targeting enhanced long-term revenue growth for ToLuna. Following
the Acquisition, and as a result of the significant investment
required to accelerate ToLuna's development, the risks associated
with the short-term financial and operating performance of ToLuna
are likely to increase significantly. As a result, ITWP believes
the development of ToLuna under this strategy is much better suited
to private ownership.
6. Recommendation
In connection with the Acquisition, the Independent Directors
have given careful consideration to the fundamental value of ToLuna
and the broader dynamics of the online sample and survey technology
solutions industry. In addition, the Independent Directors have
taken into account the factors set out in section 10 below. As a
result, the Independent Directors, who have been so advised by
Merchant Securities, believe that a value of 320 pence per ToLuna
Share is fair and reasonable.
The Independent Directors, who have been so advised by Merchant
Securities, consider that the value of the consideration for the
Acquisition, comprising ITWP Shares, Loan Notes and cash, is
difficult to determine, subject to significant uncertainty and may
be less than 320 pence per ToLuna Share. Therefore, the Independent
Directors are unable to state that they believe that the terms of
the Acquisition are fair and reasonable.
However, the Independent Directors note that Invesco and
Eurovestech have given ITWP irrevocable undertakings to elect to
receive all of their consideration under the Acquisition solely in
the form of ITWP Shares and Loan Notes. In the event that the
Acquisition is implemented by way of the Scheme and Invesco and
Eurovestech elect to receive all of their consideration in
accordance with their irrevocable undertakings, then all other
ToLuna Shareholders who are the subject of the Scheme will be able
to receive 320 pence in cash per ToLuna Share under the
mix-and-match facility. The Independent Directors, who have been so
advised by Merchant Securities, consider that 320 pence in cash,
which is available as an option under the mix-and-match facility,
is fair and reasonable consideration for a ToLuna Share.
In providing advice to the Independent Directors, Merchant
Securities has taken into account the commercial assessments of the
Independent Directors.
Until such time as Invesco and Eurovestech deliver their
elections to receive all of their consideration in accordance with
their irrevocable undertakings, there can be no absolute certainty
that the remaining ToLuna Shareholders will be able to receive 320
pence in cash per ToLuna Share. However, the Independent Directors
recommend that all ToLuna Shareholders eligible to vote at the
General Meeting vote in favour of the resolutions to be proposed at
the meetings and that all ToLuna Shareholders (other than those who
have already made irrevocable undertakings to the contrary) elect
to receive 320 pence in cash per ToLuna Share under the
mix-and-match facility in the expectation that Invesco and
Eurovestech make elections in accordance with their irrevocable
undertakings. In the event that Invesco and/or Eurovestech do not
make an election in accordance with their irrevocable undertakings
prior to the closing date for elections to be made under the
Scheme, the Independent Directors will withdraw their
recommendation and will not present the Scheme to the Court.
Richard Bernstein, one of the Independent Directors, is the
chief executive of Eurovestech. Whilst Eurovestech accepts that the
consideration it is receiving may have a value less than the
consideration the other ToLuna Shareholders (apart from Invesco)
are receiving, it is content to accept such consideration to
facilitate a partial exit for itself, albeit on 30 June 2011, and a
full exit in cash at a fair and reasonable value for other ToLuna
Shareholders (apart from Invesco). Furthermore, the Acquisition
allows Eurovestech to receive a minimum cash payment in June 2011
in excess of 50 per cent. of its current market capitalisation
whilst retaining a reduced minority holding in an unlisted growing
technology business that Eurovestech has been an investor in since
ToLuna's inception in 2000.
Accordingly, the Independent Directors intend unanimously to
recommend that all ToLuna Shareholders eligible to vote at the
Meetings vote in favour of the resolutions to be proposed at the
Meetings and that all ToLuna Shareholders (other than those who
have already made irrevocable undertakings to the contrary) elect
to receive 320 pence in cash per ToLuna Share under the
mix-and-match facility (or, in the event that the Acquisition is
implemented by means of an Offer, to accept the Offer and elect to
receive 320 pence in cash per ToLuna Share under the mix-and-match
facility) as all of the Independent Directors have irrevocably
undertaken so to do in respect of their own aggregate beneficial
holdings of 171,428 ToLuna Shares (representing approximately 0.3
per cent. of the current issued share capital of ToLuna).
The Independent Directors make no recommendation regarding any
election under the mix-and-match facility other than the election
for 320 pence in cash per ToLuna Share.
ToLuna Shareholders are recommended to consider carefully, in
the light of their own investment objectives and having taken
independent advice appropriate to their own financial
circumstances, if they wish to elect for any equity in the form of
unlisted ITWP Shares and/or Loan Notes.
7. Irrevocable undertakings
ToLuna has received irrevocable undertakings (including those
from the Independent Directors who hold ToLuna Shares) to vote in
favour of the resolutions relating to the Acquisition at the
Meetings, including the vote under Rule 16.2 as described in
paragraph (b) of section 9 of this announcement, (or in the event
that the Acquisition is implemented by means of an Offer, to accept
or procure acceptance of the Offer) in respect of ToLuna Shares
representing, in aggregate, 30,120,964 ToLuna Shares (being
approximately 59.6 per cent. of the current issued share capital of
ToLuna or approximately 77.3 per cent. of the issued share capital
of ToLuna excluding shares held by the parties to the Contribution
and Sale Agreements which cannot be voted in the Scheme).
Two major ToLuna Shareholders, Eurovestech and Invesco, have
irrevocably undertaken to elect to receive their consideration in
the proportions set out below:
-- in the case of Eurovestech, 1,051,828,838 ITWP Shares,
GBP35,000,000 in nominal value of B Loan Notes and GBP2,187,046.02
in nominal value of C Loan Notes.
-- in the case of Invesco, 3,984,772,542 ITWP Shares and
GBP8,285,455.38 in nominal value of C Loan Notes.
Immediately following the issue of their respective ITWP Shares,
Eurovestech and Invesco will enter into the Shareholders' Agreement
as holders of more than five per cent. of the ITWP Shares
respectively. Further details concerning the Shareholders'
Agreement are set out in Part I of Appendix 3.
The commitments given by Invesco and Eurovestech to vote in
favour of the resolutions relating to the Acquisition at the
Meetings may only be revoked if a third party bidder makes an offer
to all ToLuna Shareholders to acquire their ToLuna Shares which, in
the case of Invesco, represents an overall improvement to the terms
of the Acquisition (in Invesco's reasonable opinion) and, in the
case of Eurovestech, for a consideration in cash that exceeds 375
pence per ToLuna Share. The undertakings will cease to be binding
if the Acquisition lapses or is withdrawn.
Further details of the irrevocable undertakings are given in
Appendix 2 to this announcement.
8. Information relating to ITWP
(a) ITWP
ITWP is a newly incorporated company formed by Verlinvest in
England and Wales under the Companies Act to effect the acquisition
of ToLuna. ITWP has not traded prior to the date of this
Announcement (except for entering into transactions relating to the
Acquisition).
The Shareholders' Agreement covers certain aspects of the
governance of ITWP including the sale and transfer of securities.
Further details concerning the Shareholders' Agreement are set out
in Part I of Appendix 3.
(b) Verlinvest
Verlinvest is a Belgian family-owned investment holding company
which undertakes private equity investments, either directly or
indirectly through various subsidiaries. Verlinvest was established
in 1995 and is based in Brussels. It currently has around EUR350
million of assets under management.
(c) Arrangements between Verlinvest and ITWP
Under the terms of the Verlinvest Contribution Agreement,
Verlinvest will receive 4,822,583,580 ITWP Shares and C Loan Notes
with a nominal value of GBP10,027,498.60 in exchange for its
contribution of ToLuna Shares to ITWP.
9. Management Arrangements
(a) Executive Management
Frederic-Charles Petit is the founder and Chief Executive
Officer of ToLuna. He holds a Masters degree in comparative
jurisprudence from New York University and a diploma in advanced
studies in international economic law from the Sorbonne in Paris
(D. E. A.). He practiced as a French lawyer in the corporate
department of Allen & Overy's Paris office, before establishing
the ToLuna Group in May 2000. Since founding ToLuna, he has led the
development and growth of the business for over ten years.
Following the Scheme becoming effective, Frederic-Charles Petit
will be appointed as a director of ITWP and will continue in his
role as Chief Executive of the ToLuna Group.
(b) Arrangements between Frederic-Charles Petit and ITWP
Under the terms of the FP Contribution Agreement and FP Share
Purchase Agreement, Frederic-Charles Petit will receive
consideration on different terms from other ToLuna Shareholders.
Frederic-Charles Petit will receive different consideration in view
of his role as ongoing manager of the business and consistent with
the provisions of Rule 16 of the Code.
Frederic-Charles Petit will, pursuant to the terms of the FP
Contribution Agreement, receive 919,074,240 ITWP Shares as
consideration for contributing to ITWP 2,872,107 ToLuna Shares
(with an agreed price of 320 pence per ToLuna Share).
Frederic-Charles Petit will also, pursuant to the terms of the FP
Share Purchase Agreement, receive GBP4 500,000 in nominal value of
A Loan Notes as consideration for selling to ITWP 1,406,250 ToLuna
Shares with an agreed price of 320 pence per ToLuna Share.
Frederic-Charles Petit will remain in place to operate the
business once the Scheme becomes effective and will continue to be
employed on the same terms as govern his current employment by
ToLuna. ToLuna Shareholders will be asked at the ToLuna General
Meeting to approve the FP Transactions described in this paragraph
(b) by voting on the Ordinary Resolution. ToLuna Shareholders are
being given an opportunity to vote on the FP Transactions in
compliance with the requirements of Rule 16.2 (c) of the Code.
Frederic-Charles Petit and Verlinvest will not be entitled to vote
on the Ordinary Resolution and voting on this resolution will be by
way of a poll.
For the purposes of Rule 16.2 of the Code, Merchant Securities
considers the terms of the FP Transactions to be fair and
reasonable in so far as the ToLuna Shareholders are concerned.
In addition, ITWP intends to provide equity incentive schemes to
members of the ToLuna executive management team. These schemes are
likely to include the distribution of additional share options in
ITWP (or its subsidiaries) and a mechanism to provide additional
compensation once certain thresholds of returns to other ITWP
shareholders are reached. No further details of the equity
incentive schemes have been decided upon and ITWP does not intend
to enter into any such arrangements until the Scheme becomes
effective.
10. Information relating to ToLuna
(a) Background
ToLuna enables organisations to generate valuable customer
insight by combining its online market research panel and industry
leading technology. ToLuna provides a comprehensive proven,
scalable solution that enables companies to answer questions of
their target audience quickly and efficiently. ToLuna leverages a
unique approach to respondent recruitment and engagement with its
online 'community' and proprietary respondent engagement
methodologies and guarantees that the data clients receive is of
the highest quality. Further, ToLuna provides one of the industry's
leading technology suites, enabling hundreds of market research
organizations and agencies worldwide to create surveys, manage
panels and build online communities. ToLuna's products include
PanelPortal(TM), AutomateSurvey(TM), IVR(TM) and QuickSurveys(TM).
ToLuna has offices in the US, Canada, UK, France (headquarters),
The Netherlands, Romania, Germany, India, Australia, Japan and
China.
The ToLuna business was founded in 2000 by Frederic-Charles
Petit, its current Chief Executive Officer. It is incorporated in
England and Wales and currently trades on AIM under the ticker
TOL.
(b) Current trading
ToLuna, the leading independent provider of online panels,
communities and technology services to the market research
industry, expects to report revenues for the year ended 31 December
2010 of GBP73.6 million, compared with GBP49.5 million in 2009. The
revenues for 2010 include a full year contribution from Greenfield
Online ISS which was acquired in July 2009. Although revenues were
slightly below market expectations overall, Europe and Asia Pacific
regions showed strong growth. Asia Pacific is one of the fastest
growing regions for the global market research industry with
Australia, India, Korea and Japan also becoming important markets
for ToLuna. The revenue for the Europe region increased over pro
forma revenues for 2009 by 10 per cent. and by 62 per cent. for the
Asia Pacific region. However, US revenues suffered a decline of
approximately 6 per cent. compared to proforma revenues for 2009.
The ToLuna Group believes that the decline in US revenues has now
been stemmed. The Group's revenues increased by 2 per cent. over
the pro forma revenues for the Group for 2009.
The integration of Greenfield Online was completed in the first
half of 2010 and since then significant changes have been made
within the US operations, new initiatives are being undertaken and
early in 2011 George Terhanian, previously with Harris Interactive,
was appointed President of ToLuna USA, to reignite growth in the
US. The ToLuna Directors expect the impact of these changes to be
reflected in the second half of 2011.
ToLuna has again generated positive operational cash flows
during the year and at the year end had net cash of more than GBP13
million.
11. ToLuna management, employees and locations
ITWP attaches great importance to the skills and experience of
the existing ToLuna management and employees of ToLuna. ITWP has
given assurances to the Independent Directors that, on the Scheme
becoming effective, the existing employment rights, including
pensions rights, of all ToLuna Group employees will be observed.
ITWP has no current intention to change the location of ToLuna
Group's places of business.
12. ToLuna Share Plans
The Acquisition will include any ToLuna Shares unconditionally
allotted or issued before the Scheme Record Time (or until such
earlier date as, subject to the Code, ITWP may decide), including
those allotted or issued as a result of the exercise of options or
vesting of awards under the ToLuna Share Plans.
Appropriate proposals will be made, on or shortly after the date
of the Scheme Document, to the participants in the ToLuna Share
Plans.
13. Structure of the Acquisition
It is intended that the Acquisition will be effected by way of a
Court sanctioned scheme of arrangement under Part 26 of the
Companies Act. The Scheme is an arrangement between ToLuna and the
Scheme Shareholders and is subject to the approval of the
Court.
The purpose of the Scheme is to provide for ITWP to become the
owner of the whole of the issued ordinary share capital of ToLuna.
This is to be achieved by the cancellation of the Scheme Shares
held by ToLuna Shareholders and the application of the reserve
arising from such cancellation in paying up in full a number of new
ToLuna Shares (which is equal to the number of Scheme Shares
cancelled) and issuing them to ITWP, as a result of which Scheme
Shareholders will receive consideration on the basis set out in
section 2 of this announcement or in accordance with the elections
made under the mix-and-match facility on the basis set out in
section 4 of this announcement.
The Scheme requires the approval of Scheme Shareholders by the
passing of a resolution at the Court Meeting, expected to be held
in April 2011. The resolution must be approved by a majority in
number of the Scheme Shareholders present and voting, either in
person or by proxy, representing not less than 75 per cent. in
value of the ToLuna Shares held by such Scheme Shareholders.
Implementation of the Scheme will also require the passing of the
ToLuna Resolutions (requiring the approval of ToLuna Shareholders
representing at least 75 per cent. of the votes cast at the ToLuna
General Meeting, which will be held immediately after the Court
Meeting). In respect of the ToLuna Resolutions, the ToLuna
Shareholders will be entitled to cast one vote for each ToLuna
Share held.
Following the Meetings, the Scheme and the related reduction of
ToLuna's share capital must be sanctioned by the Court and will
only become effective upon delivery to the Registrar of Companies
of a copy of the Scheme Court Order (sanctioning the Scheme) and of
the Reduction Court Order (confirming the Reduction of Capital of
ToLuna forming part of the Scheme) and the registration of such
order. 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 ToLuna General
Meeting.
Further details of the Scheme will be contained in the Scheme
Document which is expected to be posted to ToLuna Shareholders
within 28 days of the date of this announcement. It is anticipated
that the Scheme will become effective during April 2011, subject to
the satisfaction of regulatory and all other relevant conditions.
The Scheme is subject to certain Conditions and certain further
terms referred to in Appendix 1 of this announcement and to be set
out in the Scheme Document. Further details on the timetable for
the implementation of the Scheme will be set out in the Scheme
Document.
ITWP reserves the right, subject to the prior consent of the
Panel, to elect to implement the acquisition of the ToLuna Shares
by way of an Offer. In such event, such takeover offer will be
implemented on the same terms (subject to appropriate amendments as
described in Part II of Appendix 1), so far as applicable, as those
which would apply to the Scheme. Furthermore, if sufficient
acceptances of such offer are received and/or sufficient ToLuna
Shares are otherwise acquired, it is the intention of ITWP to apply
the provisions of section 979 of the Companies Act to acquire
compulsorily any outstanding ToLuna Shares to which such offer
relates.
14. Financing of the Acquisition
The maximum amount of cash consideration payable by ITWP to
Scheme Shareholders in relation to the Acquisition will be
GBP44,825,411.64. This amount will be funded using Verlinvest's
existing cash resources with which it has committed to fund ITWP
for the purposes of the Acquisition.
ITWP has procured bank guarantees to support the redemption of a
total amount of GBP29,500,000 in nominal value of A Loan Notes and
B Loan Notes by 30 June 2011 (being, the redemption of all the A
Loan Notes (in the total amount of GBP4,500,000) and B Loan Notes
(in the total amount of GBP25,000,000). These guarantees are more
fully described in Part I of Appendix 3. Perella Weinberg Partners
is satisfied that sufficient financial resources are available to
ITWP to satisfy in full the total maximum cash consideration of
GBP44,825,411.64 that is payable under the Acquisition and to
support the redemption of GBP29,500,000 in nominal value of A Loan
Notes and B Loan Notes by 30 June 2011.
15. Cancellation of admission to trading on AIM
Upon or shortly after the Scheme becoming effective, the London
Stock Exchange will be requested to cancel trading in ToLuna Shares
on the AIM market of the London Stock Exchange.
On the Scheme Effective Date, share certificates in respect of
the ToLuna Shares will cease to be valid and should be destroyed.
In addition, entitlements to ToLuna Shares held within the CREST
system will be cancelled on the Scheme Effective Date.
16. Implementation Agreement
ToLuna and ITWP have entered into an Implementation Agreement
which contains, among other things, certain obligations and
commitments in relation to implementation of the Acquisition. The
Implementation Agreement also contains an inducement fee
arrangement, a non-solicitation undertaking and a provision to give
ITWP an opportunity to match any rival offers which are received.
Further information regarding this agreement will be set out in the
Scheme Document. A brief summary of the inducement fee arrangement,
non-solicitation undertaking and right to match are set out
below.
Inducement Fee and Break Fee
In consideration of ITWP making the Acquisition, ToLuna has
agreed to pay to ITWP an inducement fee of the lesser of (i)
GBP1,300,000; and (ii) the maximum amount of fee which ToLuna is
permitted to pay under the Code (in each case inclusive of any
amounts in respect of value added tax save to the extent that such
value added tax is recoverable by ToLuna, in which event the
inducement fee shall be exclusive of any amounts in respect of
value added tax) (the "Inducement Fee").
The Inducement Fee will be payable if, after this announcement
is released and prior to the Scheme lapsing or being withdrawn
(subject to certain exceptions):
(a) an Alternative Proposal is the subject of an announcement
under Rule 2.4 or Rule 2.5 of the Code and:
(i) such Alternative Proposal (whether or not recommended by the
Independent Directors) becomes wholly unconditional, becomes
effective or otherwise completes; or
(ii) that Alternative Proposal is referred to the competition
authorities, lapses, and the relevant third party makes another
Alternative Proposal which completes, or becomes effective or
becomes or is declared unconditional in all respects within twelve
months of the date of the this announcement,
(b) ToLuna is in breach of certain non-solicitation warranties
given to ITWP pursuant to the Implementation Agreement; or
(c) all or any of the Independent Directors either: (i) fail
unanimously to recommend the Acquisition in the Scheme Document in
accordance with the recommendation contained in this announcement
or (ii) withdraw or adversely modify or qualify their unanimous
recommendation of the Acquisition contained in this
announcement.
Nothing in the agreement obliges ToLuna to pay any amount which
the Panel determines would not be permitted by Rule 21.2 of the
Code.
Non-solicitation
ToLuna undertakes to ITWP that none of the Independent Directors
shall directly or indirectly, solicit or otherwise seek to procure
any Alternative Proposal or provide any information or assistance
to any person contemplating or seeking an Alternative Proposal.
This undertaking shall not prevent ToLuna from taking any action or
omitting to take any action to the extent required by virtue of the
fiduciary duties of the ToLuna Directors (acting in good faith) or
under the provisions of the Code or to the extent required by law
or any applicable regulatory body or by the rules and regulations
of the London Stock Exchange.
ToLuna shall notify ITWP as soon as reasonably practicable on
receipt of an Alternative Proposal which the Independent Directors
determine they would be prepared to issue a recommendation in
respect of (to the exclusion of the Acquisition) and which, if
recommended by the ToLuna Directors, would be capable of
announcement as a recommended offer in accordance with Rule 2.5 of
the Code.
ToLuna has also agreed that it will promptly provide ITWP with
the terms of such Alternative Proposal, including the value of any
offer consideration.
Right to match
If ToLuna notifies ITWP of an Alternative Proposal which, in the
ToLuna Directors would be prepared to recommend ("Superior
Proposal"), ToLuna has agreed to provide ITWP with reasonable
details of such approach and the terms proposed by the relevant
third party. ToLuna has also agreed not to accept, recommend,
approve or enter into any agreement to implement such Superior
Proposal; or withhold, withdraw or adversely modify its
recommendation in respect of the Scheme, until ITWP fails, within
three Business Days of being notified of the Superior Proposal, to
confirm to ToLuna that it intends to revise its offer.
Related Party Transaction
The entering into of the Implementation Agreement by ToLuna with
ITWP, a company wholly-owned by Verlinvest, which is a substantial
shareholder of ToLuna, is deemed to be a related party transaction
under the AIM Rules. The Independent Directors consider, having
consulted with Merchant Securities, that the terms of the
Implementation Agreement are fair and reasonable so far as the
ToLuna Shareholders are concerned.
17. Disclosure of interests in ToLuna
As at close of business on 11 February 2011, the last
practicable date prior to the date of this announcement, other than
as disclosed below, neither ITWP, nor any directors of ITWP, nor,
so far as ITWP is aware, any person acting in concert with ITWP,
has any interest in or right to subscribe for any relevant ToLuna
securities.
(a) Verlinvest
As at close of business on 11 February 2011, the last
practicable date prior to the date of this announcement, Verlinvest
held interests in 7 266,667 ToLuna Shares.
(b) Frederic-Charles Petit
As at close of business on 11 February 2011, the last
practicable date prior to the date of this announcement,
Frederic-Charles Petit held interests in 4,278,357 ToLuna
Shares.
In addition Frederic-Charles Petit held options over 542,857
ToLuna Shares, of which options over 276,190 were fully vested and
immediately exercisable.
18. General
The Acquisition will be subject to the Conditions and certain
further terms set out in Appendix 1 and the further terms and
conditions set out in the Scheme Document when issued. Appendix 2
contains details relating to the irrevocable undertakings given by
Eurovestech, Invesco and certain of the Independent Directors
including, in the case of Eurovestech and Invesco, the elections
which they have undertaken to make under the mix-and-match
facility. Part I of Appendix 3 contains details of the Loan Notes
and ITWP Shares offered as consideration. Part II of Appendix 3
contains risk factors which are relevant to the ITWP Shares and
Loan Notes. Appendix 4 contains the definitions of certain terms
used in this announcement.
FURTHER INFORMATION
This announcement is not intended to, and does not, constitute
or form part of an offer to sell, or otherwise dispose of, or
constitute an invitation or the solicitation of an offer to
purchase, subscribe for or otherwise acquire any securities or the
solicitation of any vote or approval in any jurisdiction, pursuant
to the Acquisition or otherwise. The Acquisition will be made
solely by means of the Scheme Document, which will contain the full
terms and conditions of the Acquisition (including details of how
to vote in respect of the Scheme). Any vote in respect of the
Scheme should be made only on the basis of the information
contained in the Scheme Document. ToLuna Shareholders are advised
to read the formal documentation in relation to the Acquisition
carefully, once it has been dispatched.
Please be aware that addresses, electronic addresses and certain
other information provided by ToLuna Shareholders, persons with
information rights and other relevant persons for the receipt of
communications from ToLuna may be provided to ITWP during the offer
period as required under Section 4 of Appendix 4 of the Code.
Perella Weinberg Partners UK LLP, which is authorised and
regulated in the United Kingdom by the FSA, is acting exclusively
for ITWP and Verlinvest and for no one else in connection with the
Acquisition and is not advising any other person or treating any
other person as its client in relation thereto and will not be
responsible to anyone other than ITWP and Verlinvest for providing
the protections afforded to clients of Perella Weinberg Partners UK
LLP, or for giving advice to any other person in relation to the
Acquisition, the contents of this announcement or any other matter
referred to herein. Neither Perella Weinberg Partners UK LLP nor
any of its subsidiaries, branches or affiliates owes or accepts any
duty, liability or responsibility whatsoever (whether direct or
indirect, whether in contract, in tort, under statute or otherwise)
to any person who is not a client of Perella Weinberg Partners UK
LLP in connection with this announcement, any statement contained
herein or otherwise.
Merchant Securities Limited, which is authorised and regulated
in the United Kingdom by the FSA, is acting exclusively for ToLuna
and for no one else in connection with the Acquisition and will not
be responsible to any person other than ToLuna for providing the
protections afforded to clients of Merchant Securities Limited, nor
for providing advice in relation to the Acquisition, the content of
this announcement or any matter referred to herein. Neither
Merchant Securities Limited nor any of its subsidiaries, branches
or affiliates owes or accepts any duty, liability or responsibility
whatsoever (whether direct or indirect, whether in contract, in
tort, under statute or otherwise) to any person who is not a client
of Merchant Securities Limited in connection with this
announcement, any statement contained herein or otherwise.
ITWP reserves the right to elect (with the consent of the Panel)
to implement the Acquisition by means of an Offer. In such event,
the Offer will be implemented on substantially the same terms,
subject to appropriate amendments, as those which would apply to
the Scheme. If the Acquisition is implemented by means of an Offer,
it will be made in accordance with the requirements of applicable
law, including US securities laws, to the extent applicable.
OVERSEAS JURISDICTIONS
The distribution of this announcement in jurisdictions other
than the United Kingdom may be restricted by law and the
availability of the Acquisition to ToLuna Shareholders who are not
resident in the UK may be affected by the laws of the relevant
jurisdictions. Therefore any persons who are subject to the law of
any jurisdiction other than the UK should inform themselves about,
and observe, any applicable requirements.
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 of England.
Notice to US investors in ToLuna
The Acquisition relates to the shares of a UK company, is
subject to UK disclosure requirements (which are different from
those of the US) and is proposed to be made by means of a scheme of
arrangement provided for under English company law. A transaction
effected by means of a scheme of arrangement is not subject to the
tender offer rules under the US Exchange Act. Accordingly, the
Acquisition is subject to the disclosure requirements and practices
applicable in the UK to schemes of arrangement which differ from
the disclosure requirements of the US tender offer rules. Financial
information included in this announcement has been prepared, unless
specifically stated otherwise, in accordance with accounting
standards applicable in the UK and thus may not be comparable to
the financial information of US companies or companies whose
financial statements are prepared in accordance with generally
accepted accounting principles in the US. If ITWP exercises its
right to implement the Acquisition by way of an Offer, the Offer
will be made in compliance with applicable US laws and
regulations.
The receipt of cash pursuant to the Acquisition by a US Holder
as consideration for the cancellation of its ToLuna Shares pursuant
to the Scheme may be a taxable transaction for United States
federal income tax purposes and under applicable United States
state and local, as well as foreign and other, tax laws. Each
ToLuna Shareholder is urged to consult his independent professional
adviser immediately regarding the tax consequences of the
Acquisition applicable to him.
It may be difficult for US Holders to enforce their rights and
claims arising out of United States federal securities laws, since
ITWP and ToLuna are located in countries other than the United
States, and some or all of their officers and directors may be
residents of countries other than the United States. US Holders may
not be able to sue a non-United States company or its officers or
directors in a non-United States court for violations of United
States securities laws. Further, it may be difficult to compel a
non-United States company and its affiliates to subject themselves
to a United States court's judgement.
In accordance with normal UK practice and pursuant to Rule
14e-5(b) of the US Exchange Act, ITWP or its nominees, or its
brokers (acting as agents), may from time to time make certain
purchases of, or arrangements to purchase, ToLuna Shares outside of
the United States, other than pursuant to the Acquisition, until
the date on which the Acquisition and/or Scheme becomes effective,
lapses or is otherwise withdrawn. These purchases may occur either
in the open market at prevailing prices or in private transactions
at negotiated prices. Any information about such purchases will be
disclosed as required in the UK will be reported to a Regulated
Information Service and will be available on the London Stock
Exchange website at
londonstockexchange.com/exchange/news/market-news/market-news-home.html.
FORWARD-LOOKING STATEMENTS
This announcement (including information incorporated by
reference in this announcement) includes "forward-looking
statements". These statements are based on the current expectations
of the management of ITWP and ToLuna and are naturally subject to
uncertainty and changes in circumstances. The forward-looking
statements contained herein include statements about the expected
effects of the Acquisition, the expected timing and scope of the
Acquisition and are not based on historical facts. As such, they
are prospective in nature. Forward-looking statements include,
without limitation, statements typically containing words such as
"believes", "intends", "expects", "anticipates", "targets"
"estimates" and words of similar import or variations of such words
and phrases or statements that certain actions, events, or results
"may", "could", "should", "would", "might" or "will" be taken,
occur, or be achieved. Although ToLuna and ITWP believe that the
expectations reflected in such forward-looking statements are
reasonable, ToLuna and ITWP can give no assurance that such
expectations will prove to have been correct. By their nature,
forward-looking statements involve risk and uncertainty because
they relate to events and depend on circumstances that will occur
in the future. There are a number of factors that could cause
actual results and developments to differ materially from those
expressed or implied by such forward-looking statements. These
factors include, but are not limited to, the satisfaction of the
conditions to the Acquisition and additional factors such as: local
and global political and economic conditions; foreign exchange rate
fluctuations and interest rate fluctuations (including those from
any potential credit rating decline) and legal or regulatory
developments and changes. Other unknown or unpredictable factors
could cause actual results to differ materially from those in the
forward-looking statements. Given these risks and uncertainties,
investors should not place undue reliance on forward-looking
statements as a prediction of actual results. Neither ToLuna nor
ITWP undertake any obligation to update publicly or revise
forward-looking statements, whether as a result of new information,
future events or otherwise, except to the extent legally
required.
DEALING DISCLOSURE REQUIREMENTS
Under Rule 8.3(a) of the Code, any person who is interested in
one per cent. or more of any class of relevant securities of an
offeree company or of any paper offeror (being any offeror other
than an offeror which has 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 paper 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 (i) the offeree company
and (ii) any paper offeror(s). An Opening Position Disclosure by a
person to whom Rule 8.3(a) applies must be made by no later than
3.30 pm (London time) on the 10th business day following the
commencement of the offer period and, if appropriate, by no later
than 3.30 pm (London time) on the 10th business day following the
announcement in which any paper offer is first identified. Relevant
persons who deal in the relevant securities of the offeree company
or of a paper 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 paper offeror must make
a Dealing Disclosure if the person deals in any relevant securities
of the offeree company or of any paper 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 paper offeror, save to the extent that these details have
previously been disclosed under Rule 8. A Dealing Disclosure by a
person to whom Rule 8.3(b) applies must be made by no later than
3.30 pm (London time) on the business day following the date of the
relevant dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of ToLuna, they will be deemed to
be a single person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree
company and by any offeror and Dealing Disclosures must also be
made by the offeree company, by any offeror and by any persons
acting in concert with any of them (see Rules 8.1, 8.2 and
8.4).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Takeover Panel's website at www.thetakeoverpanel.org.uk,
including details of the number of relevant securities in issue,
when the offer period commenced and when any offeror was first
identified. If you are in any doubt as to whether you are required
to make an Opening Position Disclosure or a Dealing Disclosure, you
should contact the Panel's Market Surveillance Unit on +44 (0)20
7638 0129.
Rule 2.10 disclosure
In accordance with Rule 2.10 of the Code, the current issued
share capital of ToLuna comprises 50,522,827 ordinary shares of
GBP0.01 each. The ISIN number for the ordinary shares is
GB00B073PB75.
Publication on websites
In accordance with Rule 19.11 of the Code, a copy of this
announcement will be available on ToLuna's website (www.ToLuna.com)
by no later than 12 noon on 15 February 2011.
Appendix 1
CONDITIONS AND CERTAIN FURTHER TERMS OF THE ACQUISITION
Part 1
CONDITIONS OF THE ACQUISITION
1. The Acquisition will be conditional upon the Scheme becoming
unconditional and becoming effective subject to the Code, by no
later than 30 June 2011 or such later date (if any) as ITWP and
ToLuna may, with the consent of the Panel, agree and (if required)
the Court may allow.
2. The Scheme will be conditional upon:
(a) its approval by a majority in number, representing 75 per
cent. or more in value, of the Scheme Shareholders (or the relevant
class or classes thereof, if applicable) present and voting, either
in person or by proxy, at the Court Meeting and at any separate
class meeting which may be required by the Court or at any
adjournment of any such meeting;
(b) each resolution required or necessary for the approval of
the Scheme or its implementation, to be set out in the notice of
the ToLuna General Meeting in the Scheme Document, being duly
passed by the requisite majority at the ToLuna General Meeting or
at any adjournment of that meeting;
(c) the sanction of the Scheme with or without modification (but
subject to any such modification being acceptable to ITWP), and the
confirmation of the Reduction of Capital by the Court; and
(d) the delivery to the Registrar of Companies for registration
of office copies of the Scheme Court Order, the Reduction Court
Order and the Statement of Capital and, if the Court so orders for
the Scheme to become effective, the registration by the Registrar
of Companies of the Reduction Court Order and the Statement of
Capital.
3. In addition, ITWP and ToLuna 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 the following Conditions (as amended if appropriate)
have been satisfied or, where relevant, waived:
(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 or other body (including any professional or
environmental body) or person in any jurisdiction (each a "Relevant
Authority") having decided to take, instituted or threatened any
action, proceeding, suit, investigation, enquiry or reference or
enacted, made or proposed and there not continuing to be
outstanding any statute, regulation, order or decision that would
or might be reasonably expected to:
(i) make the Acquisition or its implementation or the
acquisition or the proposed acquisition of any shares in, or
control of, ToLuna by ITWP or any member of the ITWP Group void,
unenforceable or illegal or directly or indirectly prohibit or
otherwise materially restrict, delay or interfere with the
implementation of, or impose material additional conditions or
obligations with respect to, or otherwise challenge, the
Acquisition or its implementation or the acquisition or the
proposed acquisition of any shares in, or control of, ToLuna by
ITWP or any member of the ITWP Group;
(ii) require, prevent or materially delay the divestiture (or
materially alter the terms of any proposed divestiture) by any
member of the ITWP Group or the ToLuna Group of all or any
substantial 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
any of their respective assets or properties in each case to an
extent which is material in the context of the ITWP Group taken as
a whole or, as the case may be, the ToLuna Group taken as a
whole;
(iii) impose any material limitation on, or result in any
material delay in, the ability of any member of the ITWP 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 ToLuna Group or on the ability of any member of the
ToLuna Group to hold or 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 ToLuna Group in each case to
an extent which is material in the context of the ITWP Group taken
as a whole or, as the case may be, the ToLuna Group taken as a
whole;
(iv) require any member of the ITWP Group or of the ToLuna Group
(other than pursuant to the Acquisition) to acquire or offer to
acquire any shares or other securities (or the equivalent) in any
member of the ToLuna Group or any member of the ITWP Group where
such acquisition would be material in the context of the ITWP Group
taken as a whole or, as the case may be, the ToLuna Group taken as
a whole;
(v) impose any material limitation on the ability of any member
of the ITWP Group or the ToLuna 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 ITWP Group and/or the
ToLuna Group in each case in a manner which would be material in
the context of the ITWP Group taken as a whole or, as the case may
be, the ToLuna Group taken as a whole; or
(vi) otherwise materially and adversely affect the business,
assets, financial or trading position or profits or prospects of
any member of the ITWP Group or of the ToLuna Group to an extent
which is material in the context of the ToLuna Group taken as a
whole or, as the case may be, the ITWP Group taken as a whole,
and all applicable waiting and other time periods 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;
(b) all necessary filings having been made and all appropriate
waiting periods (including any extensions thereof) under any
applicable legislation or regulation of any jurisdiction having
expired, lapsed or been terminated in each case in respect of the
Acquisition or its implementation or the acquisition or the
proposed acquisition of any shares in, or control of, ToLuna by
ITWP and all authorisations, orders, grants, recognitions,
confirmations, licences, consents, clearances, permissions and
approvals ("Authorisations") necessary or appropriate in any
jurisdiction for or in respect of the Acquisition or its
implementation or the acquisition or the proposed acquisition of
any shares in, or control of, ToLuna by ITWP being obtained in
terms and in a form reasonably satisfactory to ITWP from
appropriate Relevant Authorities or from any persons or bodies with
whom any member of the ITWP Group or the ToLuna Group has entered
into contractual arrangements (in each case where the absence of
such authorisation would have a material adverse effect on the
ToLuna Group taken as a whole) and such authorisations together
with all authorisations necessary or appropriate for any member of
the ToLuna Group to carry on its business (where such business is
material in the context of the ToLuna Group taken as a whole)
remaining in full force and effect and no intimation of any
intention to revoke, suspend, restrict or modify or not to renew
any of the same having been made and all necessary statutory or
regulatory obligations in any jurisdiction having been complied
with;
(c) save as fairly disclosed to ITWP before the Announcement
Date, there being no provision of any agreement, arrangement,
licence or other instrument to which any member of the ToLuna 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
Acquisition or its implementation or the acquisition or proposed
acquisition by ITWP or any member of the ITWP Group of any shares
in, or change in the control or management of, ToLuna or otherwise,
would or could (to an extent which is materially adverse in the
context of the ToLuna Group taken as a whole) reasonably be
expected to result in:
(i) any material amount of monies borrowed by or any other
material indebtedness (actual or contingent) of any such member of
the ToLuna 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 material
indebtedness being withdrawn or inhibited;
(ii) the creation or enforcement of any mortgage, charge or
other security interest over the whole or any substantial part of
the business property or assets of any such member of the ToLuna
Group or any such security interest (whenever arising or having
arisen) becoming enforceable;
(iii) any material assets or interest of any such member of the
ToLuna Group being or falling to be disposed of or charged or any
right arising under which any such asset or interest could be
required to be disposed of or charged, other than in the ordinary
course of trading;
(iv) the rights, liabilities, obligations, interests or business
of any such member of the ToLuna Group in or with any other person,
firm or company (or any agreements or arrangements relating to such
interest or business) being terminated or materially and adversely
affected;
(v) any such member of the ToLuna Group ceasing to be able to
carry on business under any name under which it presently does so,
where such a result would be material in the context of the ToLuna
Group taken as a whole;
(vi) the value of any such member of the ToLuna Group or its
financial or trading position or prospects being prejudiced or
materially and adversely affected;
(vii) any such agreement, arrangement, licence or other
instrument being terminated or materially and adversely modified or
any onerous obligation arising or any material adverse action being
taken or arising thereunder; or
(viii) the creation of any material liabilities (actual or
contingent) by any such member,
and no event having occurred which, under any provision of any
agreement arrangement, licence or other instrument to which any
member of the ToLuna Group is a party or by or to which any such
member or any of its assets may be bound or be subject, would or
could reasonably be expected to result in any events or
circumstances as are referred to in subparagraphs (i) to (viii) of
this paragraph (g) in any case where such result would be material
in the context of the ToLuna Group taken as a whole;
(d) except as disclosed in the Annual Report and Accounts or as
publicly announced to a Regulatory Information Service by or on
behalf of ToLuna or as otherwise fairly disclosed to ITWP before
the Announcement Date or as permitted under the Implementation
Agreement, no member of the ToLuna Group having since 30 June,
2010:
(i) issued or agreed to issue or authorised the issue of
additional shares of any class, or securities convertible into, or
rights, warrants or options to subscribe for or acquire, any such
shares or convertible securities or transferred or sold any shares
out of treasury save as between ToLuna and wholly-owned
subsidiaries of ToLuna prior to the Announcement Date or upon the
exercise of rights to subscribe for ToLuna Shares pursuant to
options granted under any ToLuna Share Plans prior to the
Announcement Date or the granting of awards under those plans in
the ordinary course of business in a manner consistent with past
practice;
(ii) recommended, declared, paid or made any bonus, dividend or
other distribution, whether payable in cash or otherwise, other
than a distribution by any wholly-owned subsidiary of ToLuna;
(iii) implemented or authorised any merger or demerger or
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 which in any case is material;
(iv) implemented or authorised any reconstruction, amalgamation,
scheme or other similar transaction or arrangement (other than in
the ordinary course of business);
(v) 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, otherwise than upon the exercise of rights to
subscribe for ToLuna Shares pursuant to options granted under any
ToLuna Share Plans prior to the Announcement Date or the granting
of awards under those plans in the ordinary course of business in a
manner consistent with past practice;
(vi) made or authorised any change in its loan capital or issued
or authorised the issue of any debentures or (other than in the
ordinary course of business and save as between ToLuna and
wholly-owned subsidiaries of ToLuna) incurred or increased any
indebtedness or contingent liability of any aggregate amount which
is material;
(vii) 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 or
otherwise) which is outside the ordinary course of business or
which is of a long term, onerous or unusual nature or magnitude or
which involves an obligation of a nature or magnitude which is
material;
(viii) entered into any contract, commitment or arrangement
which would be restrictive on the business of any member of the
ToLuna Group or the ITWP Group (other than to a nature and extent
which is normal in the context of the business concerned) where
such restriction is material;
(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;
(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;
(xi) (other than in respect of a member of the ToLuna Group
which is dormant and was solvent at the relevant time) taken any
corporate action or had any legal proceedings started or threatened
against it for its winding-up (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;
(xii) 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 ToLuna Group which together
or separately is material;
(xiii) made any alteration to its articles of association;
(xiv) entered into or varied the terms of, or terminated or
given notice of termination of, any service agreement or
arrangement with any director or senior executive of any member of
the ToLuna Group;
(xv) agreed to provide, or agreed to modify 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 ToLuna Group; or
(xvi) entered into any contract, commitment or arrangement or
passed any resolution or made any offer (which remains open for
acceptance) with respect to, or proposed or announced any intention
to effect or propose, any of the transactions, matters or events
referred to in this condition;
and for the purpose of this condition "material" shall mean
material in the context of the ToLuna Group taken as a whole;
(e) since 30 June, 2010 (except as disclosed in the Annual
Report and Accounts or as publicly announced to a Regulatory
Information Service by or on behalf of ToLuna before the
Announcement Date or fairly disclosed to ITWP prior to the
Announcement Date):
(i) no adverse change having occurred in the business, assets,
financial or trading position or profits or prospects of any member
of the ToLuna Group which is material in the context of the ToLuna
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 ToLuna Group or to which any member of
the ToLuna 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
ToLuna Group having been threatened, announced, instituted or
remaining outstanding by, against or in respect of any member of
the ToLuna Group which would or might reasonably be expected
materially and adversely to affect the ToLuna Group taken as a
whole; and
(iii) no contingent or other liability having arisen which would
or might reasonably be expected materially and adversely to affect
any member of the ToLuna Group taken as a whole;
(f) ITWP not having discovered (except to the extent otherwise
disclosed in the Annual Report and Accounts or as publicly
announced to a Regulatory Information Service by or on behalf of
ToLuna before the Announcement Date or fairly disclosed to ITWP
prior to the Announcement Date):
(i) that any financial, business or other information disclosed
at any time by any member of the ToLuna Group is misleading,
contains a misrepresentation of fact or omits to state a fact
necessary to make the information contained therein not misleading
which in any case is material and adverse to the financial or
trading position of the ToLuna Group taken as a whole;
(ii) that any member of the ToLuna Group is subject to any
liability, contingent or otherwise, which is not disclosed in the
Annual Report and Accounts, and which is material in the context of
the ToLuna Group taken as a whole;
(iii) that any member of the ToLuna Group has failed to comply
with any applicable legislation or regulations of any jurisdiction
or any notice or requirement of any Relevant Authority with regard
to the storage, disposal, discharge, spillage, release, leak or
emission of any waste or hazardous or harmful substance or any
substance likely to impair the environment or harm human or animal
health or otherwise relating to environmental matters or that there
has otherwise been any such storage, disposal, discharge, spillage,
release, leak or emission (whether or not the same constituted
non-compliance by any person with any such legislation or
regulation, and whenever the same may have taken place), any of
which non--compliance would be likely to give rise to any liability
(whether actual or contingent) or cost on the part of any member of
the ToLuna Group and which is material in the context of the ToLuna
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
ToLuna Group under any environmental legislation, regulation,
notice, circular or order of any Relevant Authority in any
jurisdiction and which is material in the context of the ToLuna
Group taken as a whole.
Conditions 3(a) to (f) inclusive must be fulfilled, be
determined by ITWP to be or remain satisfied or (if capable of
waiver) be waived by ITWP immediately preceding the Scheme Court
Hearing, failing which the Scheme shall lapse.
To the extent permitted by law and subject to the requirements
of the Panel, ITWP reserves the right to waive all or any of
Conditions 3(a) to (f) inclusive, in whole or in part. ITWP shall
be under no obligation to waive or treat as fulfilled any such
Conditions by any date earlier than the date specified above in
Condition 1 notwithstanding that the other Conditions (or any of
them) may at such earlier date have been waived or fulfilled and
that there are at such earlier date no circumstances indicating
that such Conditions may not be capable of fulfilment.
If ITWP is required by the Panel to make an offer or offers for
any ToLuna Shares under Rule 9 of the Code, ITWP may make such
alterations to the Conditions as are necessary to comply with that
Rule.
Part 2
CERTAIN FURTHER TERMS OF THE ACQUISITION
1. ITWP reserves the right to elect (with the consent of the
Panel) to implement the Acquisition by way of an Offer as it may
determine in its absolute discretion. In such event, such offer
will be implemented on the same terms, so far as applicable, as
those which would apply to the Scheme, subject to appropriate
amendments to reflect the change in method of effecting the
Acquisition, which may include changing the consideration structure
under the terms and conditions of the Acquisition and (without
limitation and subject to the consent of the Panel) an acceptance
condition set at a level which would result in ITWP holding a
number of shares in ToLuna carrying no less than 75 per cent. (or
such lesser percentage, being more than 50 per cent., as ITWP may
decide) of the voting rights attached to all ToLuna shares
including, for this purpose, any such voting rights attaching to
ToLuna Shares that are unconditionally allotted or issued before
the takeover offer becomes or is declared unconditional as to
acceptances, whether pursuant to the exercise of any outstanding
subscription or conversion rights or otherwise.
2. The availability of the Offer to persons not resident in the
United Kingdom may be affected by the laws of the relevant
jurisdictions. Persons who are not resident in the United Kingdom
should inform themselves about and observe any applicable
requirements.
3. The Acquisition will be governed by English law and be
subject to the jurisdiction of the English courts and to the
conditions set out in this document and in the formal Scheme
Document.
Appendix 2
Irrevocable Undertakings
The following holders of ToLuna Shares have given irrevocable
undertakings: (i) to vote in favour of the Scheme and the
resolutions to be proposed at the Court Meeting and the ToLuna
General Meeting, including the vote under Rule 16.2 as described in
paragraph (b) of section 9 of this announcement; and (ii) if the
Acquisition is subsequently structured as an Offer, to accept any
such offer made by ITWP:
Percentage of
issued share
capital excluding
shares held by
Percentage of Verlinvest and
issued share Frederic-Charles
Name Number of shares capital of ToLuna Petit
ToLuna Shareholders
Invesco 15,041,619 29.8% 38.6%
Eurovestech 14,907,917 29.5% 38.2%
Non-executive
directors
Richard Bernstein 100,000 0.2% 0.3%
Perry Crosthwaite 71,428 0.1% 0.2%
Total 30,120,964 59.6% 77.3%
Eurovestech and Invesco have irrevocably undertaken to elect to
receive their consideration in the proportions set out below:
-- in the case of Eurovestech, 1,051,828,838 ITWP Shares,
GBP35,000,000 in nominal value of B Loan Notes and GBP2,187,046.02
in nominal value of C Loan Notes.
-- in the case of Invesco, 3,984,772,542 ITWP Shares and
GBP8,285,455.38 in nominal value of C Loan Notes.
To the extent that other ToLuna Shareholders elect to receive
their consideration in forms other than cash, the amount of ITWP
Shares and Loan Notes received by Eurovestech and Invesco will be
scaled back based on their shareholdings in ToLuna, their elections
for ITWP Shares and Loan notes, the elections of other shareholders
for ITWP Shares and Loan Notes and the amount of ITWP Shares and
Loan Notes available under the Acquisition, and Eurovestech and
Invesco will instead receive a portion of cash consideration for
their ToLuna Shares.
On issue of the ITWP Shares, Eurovestech and Invesco will enter
into the Shareholders' Agreement as holders of more than 5 per
cent. of the ITWP Shares respectively. The Shareholders' Agreement
covers certain aspects of the governance of the company including
the sale and transfer of securities.
The commitments to vote in favour of the resolutions relating to
the Acquisition at the Meetings may only be revoked if a third
party bidder makes an offer to all ToLuna Shareholders to acquire
their ToLuna Shares which, in the case of Invesco, represents an
overall improvement to the terms of the Acquisition (in Invesco's
reasonable opinion) and, in the case of Eurovestech, for a
consideration in cash that exceeds 375 pence per ToLuna Share. The
undertakings will cease to be binding if the Acquisition lapses or
is withdrawn.
In the event that:
(a) Invesco revokes its commitment to vote in favour of the
resolutions relating to the Acquisition at the Meetings due to a
third party bidder making an offer to all ToLuna Shareholders to
acquire their ToLuna Shares and Invesco does not otherwise vote in
favour of such resolutions; or
(b) Invesco fails to vote in favour of the resolutions relating
to the Acquisition at the Meetings.
Eurovestech will pay ITWP a sum not exceeding GBP1,300,000 to
compensate it for its abortive costs (as long as the payment of
such fee is lawful and is not determined by the Panel to be
prohibited by the Code). This fee will not, however, be payable in
the event that:
(a) the Acquisition is declared wholly unconditional or
otherwise completes in accordance with the Code; or
(b) ITWP receives a sum from ToLuna of no less than GBP1,300,000
as part of the Inducement Fee.
Appendix 3
PART i
ITWP SHARES, LOAN NOTES, GUARANTEES AND SHAREHOLDERS'
AGREEMENT
1. ITWP SHARES
The ITWP Shares will have a nominal value of 1 penny per share,
will be issued credited as fully paid, will have proportional
voting rights, will rank pari passu in all respects with the
existing ITWP Shares and will be entitled to all dividends and
other distributions declared or paid by ITWP after the Scheme
becomes effective. ITWP Shares will not be admitted to trading on
AIM or any other stock exchange.
2. Loan Notes and guarantees
ITWP has decided to offer part of the consideration in the form
of Loan Notes. These Loan Notes will not bear interest and it is
ITWP's current intention to redeem some or all of the Loan Notes
before 30 June 2011. After 30 June 2012, any Loan Notes which
remain outstanding will be compulsorily converted into ITWP shares,
subject to conditions, at a rate of one ITWP Share for each 1 penny
in nominal value of Loan Notes. Upon the occurrence of an Exit
Event, all Loan Notes will compulsorily convert into ITWP Shares at
a rate of one ITWP Share for each 1 penny in nominal value of Loan
Notes. In addition to the Loan Notes, there will be a class of A
Loan Notes, redeemable in full on the earlier of an Exit Event, 30
June 2011 or ITWP giving the A Loan Noteholders requisite notice of
redemption. The A Loan Notes will rank senior and in priority to
the B Loan Notes, which will in turn rank senior and in priority to
the C Loan Notes. The A Loan Notes will be issued to
Frederic-Charles Petit as described in paragraph (b) of section 9
of this announcement.
Verlinvest and Eurovestech will agree to work together with ITWP
to use reasonable endeavours (but without recourse to the
shareholders of ITWP) to secure sufficient external debt financing
to redeem some or all of the Loan Notes by 30 June 2011. ITWP
commits to redeem by 30 June 2011 (i) all of the A Loan Notes (i.e.
in the total amount of GBP4,500,000) and (ii) B Loan Notes in the
amount of GBP25,000,000 (the "First Redemption").
Verlinvest will procure that ITWP is provided with debt and/or
equity funding to the extent that external debt financing is not
available to ITWP to pay all amounts payable under the First
Redemption. Verlinvest will also procure that irrevocable bank
guarantees for a total amount of GBP29,500,000 be provided in
favour of ITWP to guarantee ITWP's payment obligations under the
First Redemption. To the extent that (i) Verlinvest provides debt
and/or equity funding to ITWP and/or (ii) such guarantees are
called upon then Verlinvest will be issued Senior Loan Notes in an
amount equal to any amounts it provides in debt and/or equity
financing and/or which are called under the guarantees (in addition
to the GBP10,027,498.60 of C Loan Notes to be issued to
Verlinvest). The Senior Loan Notes are to rank senior and in
priority to the B Loan Notes and the C Loan Notes (subject to the
commitment of ITWP in respect of the First Redemption).
Any cash raised (save for any cash raised in relation to the
acquisition of ToLuna Shares issued pursuant to the ToLuna Share
Plans) as a result of a debt refinancing by ITWP in excess of the
amount required to fund the First Redemption that is sufficient to
redeem all (and not part only) of any B Loan Notes that are not
redeemed on the First Redemption shall be applied to redeem all
(and not part only) of the outstanding B Loan Notes (the "Second
Redemption").
Any cash raised (save for any cash raised in relation to the
acquisition of ToLuna Shares issued pursuant to the ToLuna Share
Plans) as a result of a debt refinancing by ITWP in excess of the
amounts required to fund (a) the First Redemption; and (b) the
Second Redemption that is sufficient to redeem all (and not part
only) of the C Loan Notes shall be applied to redeem all (and not
part only) of the C Loan Notes (the "Third Redemption").
ITWP may, at any time, elect redeem all of the B Loan Notes or,
if all B Loan Notes have been redeemed, all of the C Loan Notes. If
only part of a class of Loan Notes (i.e. a part of the B Loan Notes
or a part of the C Loan Notes) are to be redeemed, ITWP shall
redeem the relevant Loan Notes on a pro rata basis as between the
holders of those Loan Notes.
Subject to the rights described above and save for any cash
raised in relation to the acquisition of ToLuna Shares issued
pursuant to the ToLuna Share Plans, the proceeds of any other debt
or equity funding obtained by ITWP shall be applied to redeeming
the Loan Notes in order of seniority on a pro rata basis as between
the holders of those Loan Notes.
3. sHAREHOLDERS' AGREEMENT AND ARTICLES OF ASSOCIATION
On issue of the ITWP Shares to them, Eurovestech and Invesco
will enter into the Shareholders' Agreement as holders of more than
five per cent. of the ITWP Shares respectively. The parties to the
Shareholders' Agreement at that time are to be ITWP, Verlinvest,
Frederic-Charles Petit, Eurovestech and Invesco.
Director provisions
The number of directors which certain shareholders shall be
entitled to nominate for appointment is as follows:
(a) Verlinvest may nominate for appointment three persons as
directors;
(b) Frederic-Charles Petit may be appointed as a director for so
long as he holds at least 50,000,000 ITWP Shares and is chief
executive officer or is otherwise a member of senior management. If
Frederic-Charles Petit holds at least 175,000,000 ITWP Shares and
is not chief executive officer or otherwise a member of senior
management and provided he is not already a director of ITWP then
he may nominate one person for appointment as a director;
(c) on the date of the Shareholders' Agreement any person (other
than Verlinvest and Frederic-Charles Petit) who holds ITWP Shares
representing not less than seven per cent. of the shares in ITWP
may appoint one person as a director provided that no more than six
directors are appointed as directors of ITWP in total; and
(d) in the event that:
(i) a director ceases to be a director as a result of his
appointer ceasing to hold ITWP Shares representing not less than
seven per cent. of the shares in ITWP or a director who is removed
is not replaced by his appointing shareholder within seven business
days, or
(ii) any person holds ITWP Shares representing not less than
seven per cent. of the shares in ITWP (other than Verlinvest,
Frederic-Charles Petit and any shareholder whose appointee
continues to be a director of ITWP in accordance with paragraph (c)
above) following any transfer of ITWP Shares or following any
change in ownership of the share capital of ITWP,
then the person holding the largest number of ITWP Shares in
excess of seven per cent. and who is party to the Shareholders'
Agreement may nominate one person as a director of ITWP subject
always to the maximum number of directors of ITWP.
The quorum for board meetings is two directors, of whom at least
one is a director appointed by Verlinvest for so long as Verlinvest
and its affiliates hold 35 per cent. or more of ITWP Shares.
Share transfer and pre-emption provisions
No party to the Shareholders' Agreement may transfer any ITWP
Shares or Loan Notes unless such transfer is a Permitted Transfer
under ITWP's articles of association. ITWP's articles of
association provide that a Permitted Transfer is, amongst other
things, (i) a transfer by an individual to a family member or to
the trustees of a family trust, and (ii) a transfer to an affiliate
provided that the transferee enters into a deed of adherence to the
Shareholders' Agreement and the transferor and the transferee
remain jointly and severally liable in respect of the transferred
shares.
Subject to the above restrictions, share transfers shall be
subject to general pre-emption rights in favour of other
shareholders in ITWP.
Drag-along rights, tag-along rights and Exit Events
At any time prior to an Exit Event, other than in the case of a
Permitted Transfer, no person shall transfer any ITWP Shares unless
an offer has been made to all other shareholders in ITWP to acquire
the same proportion of their ITWP Shares as that being proposed by
the proposed transferor on the same terms as those applying to the
proposed transfer.
At any time whilst Verlinvest and its affiliates hold at least
35 per cent. of the ITWP Shares and they propose to transfer all of
such shares to any other person, all other shareholders shall, if
so required by Verlinvest, transfer all (and not only part) of
their ITWP Shares to the proposed transferee on the same terms as
those applying to the proposed transfer, provided that: (i) if such
proposed transfer is made to an affiliate of Verlinvest that
Verlinvest will only be able to exercise its rights where at least
50 per cent. of the other shareholders consent to such a transfer,
or (ii) the consideration the other shareholders will receive in
connection with the proposed transfer is in the form of cash or
securities which are listed and admitted to trading on a recognised
investment exchange, or (iii) the other shareholders receive
consideration in cash at the date of the proposed transfer with an
element of deferred consideration by way of earn out payable in
cash or consideration readily convertible to cash within a period
of 18 months from the date of the proposed transfer, and, in each
case, the consideration receivable by the other shareholders does
not represent less than 100 pence for each ITWP Share (subject to
adjustment on any capitalisation issue).
It is the intention of the parties that an Exit Event is
achieved within five years of the date the initial investors are
entered in the register of members as the holders of ITWP Shares.
The articles of association prescribe the manner in which the
shareholders may bring about an Exit Event should such an Exit
Event not have been achieved within the intended period.
Reserved Matters
Certain actions of ITWP will require the prior approval of
Verlinvest for so long as Verlinvest and its affiliates together
hold at least 35 per cent. of the ITWP Shares. These actions
include, amongst other things, altering ITWP's articles of
association, any change to the nature and scope of the business of
any group company of ITWP, issuing any new shares, declaring or
paying any dividends and the transfer of ITWP Shares representing
less than 20 per cent. of ITWP Shares in issue at the date of the
transfer provided such transfers are not Permitted Transfers.
PART II
ITWP SHARES AND LOAN NOTES RISK FACTORS
1. Neither the ITWP Shares nor the Loan Notes will not be listed
on any stock exchange, nor is it the current intention to offer any
trading facility for the ITWP Shares or the Loan Notes.
2. It is envisaged that pursuant to the Shareholders' Agreement,
Verlinvest, Eurovestech, Invesco and Frederic-Charles Petit will
each have governance rights as regards ITWP, including the right to
appoint director(s) of ITWP upon the Scheme becoming effective.
3. ITWP Shares and Loan Notes will not be transferable except in
limited circumstances.
4. The holders of ITWP Shares and the holders of the Loan Notes
will not enjoy any minority protections or other rights save for
those rights reflected in Part I of this Appendix 3 to or as
described in the Scheme Document and for those rights prescribed by
applicable law.
5. The value of the ITWP Shares and the Loan Notes will be
subject to the same market and trading risks as are faced by ToLuna
currently, including the risk in the trading performance of
ToLuna.
6. Shareholders in ITWP may be required in the future to sell
their ITWP Shares under the terms of a "drag along" provision in
the articles of association of ITWP.
7. Holders of ITWP Shares and Loan Notes will not be afforded
the same level of protections and disclosure of information that
they currently benefit from as ToLuna Shareholders as a company
whose shares are traded on AIM.
8. The B Loan Notes and C Loan Notes will be compulsorily
converted into ITWP Shares at a rate of one ITWP Share for each 1
penny in nominal value on the earlier of an Exit Event and 30 June
2012. ITWP may, however, redeem the B Loan Notes and the C Loan
Notes prior to an Exit Event or 30 June 2012.
appendix 4
Definitions
The following definitions apply throughout this announcement,
unless otherwise stated or the context requires otherwise.
"Acquisition" the proposed acquisition by ITWP of the existing
issued and to be issued share capital of ToLuna,
on the terms and subject to the conditions set
out in this announcement and to be set out in
the Scheme Document (and, where the context so
requires, any subsequent revision, variation,
extension or renewal of such acquisition)
together with the other matters relevant thereto
to be considered at the Court Meeting and the
ToLuna General Meeting and related arrangements
regarding the Contribution Shares;
"A Loan Notes" the A loan notes to be issued by ITWP;
"A Loan Noteholders" all the holders of the A Loan Notes from time to
time;
"AIM Rules" the rules published by the London Stock
Exchange, which set out the rules and
responsibilities in relation to AIM traded
companies;
"Alternative Proposal" a proposed offer, scheme of arrangement, merger,
acquisition, recapitalisation or other business
combination relating to any direct or indirect
acquisition of thirty per cent. or more of the
ToLuna Shares or all or a substantial part of
the business or assets of the ToLuna Group
proposed by any third party which is not a
concert party of ITWP, whether in one
transaction or a series of transactions;
"Announcement Date" 14 February 2011;
"Annual Report and the annual audited report and accounts of ToLuna
Accounts" for the year ended 31 December 2009;
"authorisations" all authorisations, orders, grants,
recognitions, confirmations, licences, consents,
clearances, permissions and approvals;
"B Loan Notes" the B loan notes to be issued by ITWP;
"business day" a day on which the London Stock Exchange is open
for the transaction of business;
"C Loan Notes" the C loan notes to be issued by ITWP;
"Code" the City Code on Takeovers and Mergers of the
United Kingdom (as amended);
"Companies Act" the Companies Act 2006 (as amended);
"Conditions" the conditions to the Acquisition which are set
out in Part I of Appendix 1 to this
announcement;
"Contribution and the FP Contribution Agreement, the FP Share
Sale Agreements" Purchase Agreement and the Verlinvest
Contribution Agreement;
"Court" the High Court of Justice of England and Wales;
"Court Meeting" the meeting of Scheme Shareholders to be
convened pursuant to an order of the Court
pursuant to Part 26 of the 2006 Act for the
purpose of considering and, if thought fit,
approving the Scheme (with or without
modification), and any adjournment thereof;
"Exit Event" a flotation on a main or secondary stock
exchange, refinancing, trade sale or merger or
similar operation such that the Shareholders
realise all or, at their option, some of their
initial equity investment (subject to any
customary lock-up terms which may be required to
facilitate an initial public offering);
"FP Contributed 2,872,107 of the ToLuna Shares beneficially
Shares" owned by Frederic-Charles Petit which shall be
contributed to ITWP in accordance with the terms
of the FP Contribution Agreement;
"FP Contribution the conditional deed dated 14 February 2011 and
Agreement" entered into between ITWP and Frederic-Charles
Petit pursuant to which ITWP has agreed to
acquire the FP Contributed Shares conditional
on, inter alia, the Scheme becoming effective;
"FP Purchased Shares" 1,406,250 of the ToLuna Shares beneficially
owned by Frederic-Charles Petit which shall be
sold to ITWP in accordance with the terms of the
FP Share Purchase Agreement;
"FP Share Purchase the conditional deed dated 14 February 2011 and
Agreement" entered into between ITWP and Frederic-Charles
Petit pursuant to which ITWP has agreed to
purchase the FP Purchased Shares conditional on,
inter alia, the Scheme becoming effective;
"FP Transactions" the transactions to be undertaken pursuant to
the FP Contribution Agreement and the FP Share
Purchase Agreement;
"FSA" the United Kingdom Financial Services Authority;
"FSMA" the Financial Services and Markets Act 2000;
"Independent Directors" the directors of ToLuna other than Frederic de
Mevius and Frederic-Charles Petit;
"Implementation the implementation agreement between ITWP and
Agreement" ToLuna dated 14 February 2011;
"Inducement Fee" has the meaning given to it in paragraph 16 of
this announcement;
"ITWP" ITWP Acquisitions Limited, a company
incorporated in England and Wales (with
registered number 07493527) with its registered
office at 20-22 Bedford Row, London, WC1R 4JS;
"ITWP Group" ITWP and its associated undertakings and any
other undertakings in which ITWP and such
undertakings (aggregating their interests) have
a substantial interest;
"ITWP Shares" ordinary shares of 1 penny each in the capital
of ITWP;
"Loan Notes" together, the B Loan Notes and the C Loan Notes;
"Listing Rules" the rules and regulations made by the FSA in its
capacity as the UK Listing Authority under FSMA,
and contained in the UK Listing Authority's
publication of the same name;
"Loan Notes" the B Loan Notes and the C Loan Notes;
"London Stock Exchange" London Stock Exchange plc;
"Meetings" the Court Meeting and/or the ToLuna General
Meeting as the case may be;
"Merchant Securities Merchant Securities Limited;
"
"Offer" a takeover offer (as defined in section 974 of
the Companies Act) which ITWP may elect (with
the consent of the Panel) to make for the issued
and to be issued share capital of ToLuna not
already owned by ITWP in accordance with the
Implementation Agreement;
"Ordinary Resolution" the ordinary resolution to be proposed at the
ToLuna General Meeting in accordance with the
requirements of the Code to approve certain
arrangements between ITWP and Frederic-Charles
Petit;
"Panel" the Panel on Takeovers and Mergers;
"Perella Weinberg Perella Weinberg Partners UK LLP;
Partners"
"Reduction Court the order of the Court confirming the Reduction
Order" of Capital under section 648 of the Companies
Act;
"Reduction of Capital" the reduction of ToLuna's share capital by the
cancellation and extinguishing of the Scheme
Shares provided for by the Scheme pursuant to
section 648 of the Companies Act;
"Regulatory Information any of the services set out in Appendix 3 to the
Service" Listing Rules;
"Relevant Authority" government or governmental, quasi-governmental,
supranational, statutory, administrative or
regulatory body or association, institution or
agency (including any trade agency) or any court
or other body (including any professional or
environmental body) or person in any
jurisdiction;
"Scheme" the proposed scheme of arrangement under Part 26
of the Companies Act between ToLuna and Scheme
Shareholders, with or subject to any
modification, addition or condition thereto
approved or imposed by the Court and agreed to
by ITWP;
"Scheme Court Hearing" the hearing at which the Scheme Court Order is
sought;
"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 ToLuna
Shareholders following the date of this
announcement containing, amongst other things,
the terms and conditions of the Scheme and the
notices of the Meetings;
"Scheme Effective the date on which the Scheme becomes effective;
Date"
"Scheme Record Time" 6.00 p.m. on the Business Day immediately
preceding the date on which the Scheme becomes
effective pursuant to its terms;
"Scheme Shareholders" the holders of Scheme Shares;
"Scheme Shares" all ToLuna Shares: (i) in issue at
the date of the Scheme Document; and
(ii) (if any) issued after the date
of the Scheme Document and before
the Voting Record Time; and (iii)
(if any) issued at or after the
Voting Record Time but on or before
the Scheme Record Time either on
terms that the original or any
subsequent holders thereof shall be
bound by the Scheme or in respect of
which the holders thereof have
agreed in writing to be bound by the
Scheme, but excluding any ToLuna
Shares beneficially owned by any
member of the ITWP Group, Verlinvest
or Frederic-Charles Petit;
"Senior Loan Notes" the unsecured senior loan notes to be issued by
ITWP;
"Shareholders' Agreement" the shareholders' agreement to be entered into
in respect of ITWP;
"Statement of Capital" the statement of capital (approved by the Court)
showing with respect to ToLuna's share capital,
as altered by the Reduction Court Order
confirming the Reduction of Capital, the
information required by section 649 of the
Companies Act;
"subsidiary", "subsidiary have the meanings given by the Companies Act,
undertaking", "undertaking" other than paragraph 20(1)(b) of Schedule 4A to
and "associated that Act which shall be excluded for this
undertaking" purpose, and "substantial interest" means a
direct or indirect interest in 10 per cent. or
more of the equity share capital (as defined in
that Act) of any undertaking;
"ToLuna" ToLuna plc, a company incorporated in England
and Wales (with registered number 05395024) with
its registered office at 29 Curzon Street,
London, W1J JTZ;
"ToLuna Directors" the directors of ToLuna;
"ToLuna General the general meeting of ToLuna to be convened in
Meeting" connection with the Acquisition and any
adjournment thereof;
"ToLuna Group" ToLuna, its subsidiaries and subsidiary
undertakings;
"ToLuna Resolutions" the special resolutions to approve, amongst
other things, the cancellation of the existing
issued share capital of ToLuna and such other
matters as may be necessary to implement the
Scheme in the form set out in the Scheme
Document;
"ToLuna Shareholders" the holders of ToLuna Shares, from time to time;
"ToLuna Shares" ordinary shares of GBP0.01 each in the capital
of ToLuna;
"ToLuna Share Plans" the ToLuna 2005 Unapproved Share Option Plan;
"United Kingdom" the United Kingdom of Great Britain and Northern
or "UK" Ireland;
"United States" the United States of America, its territories
or "US" and possessions, any state of the United States
of America, the District of Columbia and all
other areas subject to its jurisdiction;
"UK Listing Authority" the Financial Services Authority in its capacity
as the competent authority under the Financial
Services and Markets Act 2000;
"US Holders" the holders of ToLuna Shares who are resident in
the United States;
"Verlinvest" Verlinvest SA, a private limited liability
company incorporated under the laws of Belgium
under number 455030364 and with its registered
office at Place E. Flagey 18 - B-1050 Brussels;
and
"Verlinvest Contribution the conditional deed dated 14 February 2011 and
Agreement" entered into between ITWP and Verlinvest
pursuant to which ITWP has agreed to acquire the
Verlinvest Shares conditional on, inter alia,
the Scheme becoming effective;
"Verlinvest Shares" the 7,266,667 ToLuna Shares beneficially owned
by Verlinvest; and
"Voting Record Time" the time and date specified in the Scheme
Document by reference to which entitlement to
vote on the Scheme will be determined, expected
to be 6.00 p.m. on the day which is two days
before the date of the Court Meeting or, if the
Court Meeting is adjourned, 6.00 p.m. on the day
which is two days before the date of such
adjourned Court Meeting.
Words importing the singular shall include the plural and vice
versa, and words importing the masculine gender shall include the
feminine or neutral gender.
All times referred to in this announcement are London times.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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