NOT FOR RELEASE,
PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR
INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD
CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH
JURISDICTION
THIS ANNOUNCEMENT
CONTAINS INSIDE INFORMATION
FOR IMMEDIATE
RELEASE
9 April 2024
RECOMMENDED CASH ACQUISITION
OF
GRESHAM TECHNOLOGIES PLC
BY
ALLIANCE BIDCO LTD
(a company owned indirectly by funds managed
or advised by STG Partners, LLC ("STG"))
to be implemented by means of a scheme of
arrangement
under Part 26 of the Companies Act 2006
Summary
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The boards of Alliance Bidco Ltd ("Bidco") and Gresham Technologies plc
("Gresham") are pleased to
announce they have reached agreement on the terms and conditions of
a recommended cash offer by Bidco for the entire issued and to be
issued ordinary share capital of Gresham (the "Acquisition"). 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 2006.
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Under the terms of the Acquisition, each Gresham
Shareholder will be entitled to receive:
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for each Gresham Share: 163 pence in cash (the
"Cash Offer")
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In addition, prior to the Effective Date the Gresham
Directors intend to declare and settle an interim dividend in
respect of the year ended 31 December 2023 of 0.75 pence per
Gresham Share (the "Permitted
Dividend").
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The Cash Offer and the Permitted Dividend together
aggregate to 163.75 pence per Gresham Share which represents a
premium of approximately:
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26.94 per cent. to the closing price of 129.00 pence
per Gresham Share on 8 April 2024 (being the Last Practicable
Date);
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31.42 per cent. to the volume weighted average price
of 124.60 pence per Gresham Share for the three months to 8 April
2024 (being the Last Practicable Date); and
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33.24 per cent. to the volume weighted average price
of 122.90 pence per Gresham Share for the six months to 8 April
2024 (being the Last Practicable Date).
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The Acquisition values the entire issued and to be
issued ordinary share capital of Gresham at approximately £146.7
million on a fully diluted basis and implies an enterprise value of
approximately £141.9 million which equates to a multiple of 30.8
times the Gresham Directors' estimate of Gresham's FY2023 adjusted
cash EBITDA.
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STG, Bidco and Gresham have agreed to the declaration
and payment of the Permitted Dividend without any reduction to the
Cash Offer. If, on or after the date of this Announcement and
before the Effective Date, any dividend and/or other distribution
and/or other return of capital is declared, made or paid or becomes
payable in respect of Gresham Shares (other than the Permitted
Dividend), Bidco reserves the right to reduce the consideration
payable under the terms of the Acquisition by an amount up to the
aggregate amount of such dividend and/or distribution and/or return
of capital, in which case any reference in this Announcement to the
consideration payable under the terms of the Acquisition will be
deemed to be a reference to the consideration as so reduced. Any
exercise by Bidco of its rights referred to in this paragraph shall
be the subject of an announcement and, for the avoidance of doubt,
shall not be regarded as constituting any revision or variation of
the terms of the Acquisition. In such circumstances, Gresham
Shareholders will be entitled to retain any such dividend,
distribution or other return of capital declared, made or paid or
which becomes payable.
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The Acquisition is intended to be effected by way of a
Scheme. However, Bidco reserves the right to elect to implement the
Acquisition by way of an Offer (subject to the consent of the
Panel).
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The Acquisition is conditional on, inter alia, the
approval of Gresham Shareholders and subject to the further
Conditions and terms set out in Appendix 1 to this Announcement
(which will be set out in full in the Scheme Document (or, if the
Acquisition is implemented by way of an Offer, the Offer
Document)).
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The terms of the Acquisition will be put to Gresham
Shareholders at the Court Meeting and the General Meeting. The
Court Meeting and the General Meeting are required to enable
Gresham Shareholders to consider and, if thought fit, vote in
favour of the Scheme and the resolutions to implement the Scheme.
In order to become Effective, the Scheme must be approved at the
Court Meeting by a majority in number of Scheme Shareholders,
present and voting (to the extent permitted pursuant to the
Takeover Code, applicable law or the direction or order of the
Court whose sanction is required for the Scheme), whether in person
or by proxy, representing at least 75 per cent. of the votes
attached to the Scheme Shares cast by those Scheme Shareholders at
the Court Meeting. The Scheme also requires the passing at the
General Meeting of the Special Resolution. The General Meeting is
expected to take place immediately after the Court Meeting. The
Special Resolution is to authorise the Gresham Directors to give
effect to the Scheme and deal with certain ancillary matters, and
requires the approval by Gresham Shareholders representing at least
75 per cent. of the votes cast at the General Meeting (either in
person or by proxy).
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Recommendation
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The Gresham Directors, who have been so advised by
Houlihan Lokey as to the financial terms of the Acquisition,
consider the terms of the Acquisition to be fair and reasonable. In
providing its advice to the Gresham Directors, Houlihan Lokey has
taken into account the commercial assessments of the Gresham
Directors. Houlihan Lokey is providing independent financial advice
to the Gresham Directors for the purposes of Rule 3 of the Takeover
Code.
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Accordingly, the Gresham Directors intend unanimously
to recommend that Gresham Shareholders vote in favour of the Scheme
at the Court Meeting and in favour of the Special Resolution to be
proposed at the General Meeting (or in the event that the
Acquisition is implemented by way of an Offer, to accept or procure
acceptance of the Offer), as the Gresham Directors who are
interested in Gresham Shares have irrevocably undertaken to do in
respect of their own beneficial holdings (and those of their
connected persons) amounting, in aggregate, to 446,986 Gresham
Shares representing approximately 0.53 per cent. of the ordinary
share capital of Gresham in issue on the Last Practicable Date.
Further details of these irrevocable undertakings, including the
circumstances in which they cease to be binding, are set out in
Appendix 3 to this Announcement.
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Background to and
reasons for the Gresham Directors' recommendation
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The Gresham Board remains confident in the
execution of its strategy for Gresham and in the potential for
further value creation for Gresham Shareholders over the longer
term. However, it recognises that uncertainties and risks exist to
the delivery of that strategy in the short to medium-term, many of
which are beyond Gresham's control. In particular, the Gresham
Board would highlight the current challenging nature of Gresham's
end markets, which are consolidating and where customers are slower
to replace legacy technologies with modern alternatives, which can
impact Gresham's sales pipeline.
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The Gresham Board's stated ambition to scale
Gresham's core software business and become a £100 million annual
recurring revenue business is reliant, not only on Gresham's
ability to successfully compete for accretive acquisitions but also
on significant investment in Research & Development and Sales
& Marketing to maintain Gresham's competitive position, fully
capitalise on innovations such as Floe and deliver consistently
high levels of organic growth. The Gresham Board notes that the
growth in Clareti Control ARR has slowed in recent months.
Competition remains intense and the Gresham Board notes that many
of Gresham's competitors are often larger, privately owned, free
from the constraints and requirements of the public markets and
backed with substantial financing. The Gresham Board believes that,
if Gresham cannot effectively fund high levels of organic growth
and participate materially in the expected consolidation of the
financial services data management software market, its competitive
advantage in global financial markets is likely to be impacted over
the medium to long term.
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On the basis of a net cash position of £4.8
million as at 31 December 2023, the Cash Offer values Gresham at
12.9 times adjusted EBITDA and 30.8 times adjusted cash EBITDA for
the year ended 31 December 2023 as estimated by the Gresham Board
and detailed further in paragraph 8 of this Announcement. Having
sought to obtain competitive alternative proposals, the Gresham
Board considers the above multiples to be attractive.
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In addition, the Gresham Board recognises that
the market in Gresham Shares is relatively illiquid, with average
daily volumes traded during the twelve-month period ended 8 April
2024 being only 107,615 Gresham Shares. This low level of liquidity
can make it challenging for Gresham Shareholders to monetise their
holdings in the market should they so wish.
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The Gresham Board believes that the Cash Offer
will provide Gresham Shareholders with the opportunity to receive
an immediate and certain value per Gresham Share in cash at a fair
premium (of 26.94 per cent. to the closing price of a Gresham Share
on 8 April 2024, the Last Practicable Date) that may not otherwise
be available and would, in any event, be subject to the successful
execution of Gresham's strategy and the realisation of its
longer-term growth prospects.
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The Gresham Board notes that Kestrel Partners
LLP, which has a representative on the Gresham Board and is
Gresham's largest shareholder with an interest in approximately
23.85 per cent. of the issued Gresham Shares, is supportive of the
Acquisition and has given an irrevocable undertaking to Bidco to
vote in favour of the Scheme. The Gresham Board also notes that
Bidco have received irrevocable undertakings and letters of intent
to vote in favour of the Scheme from Gresham Shareholders,
including Kestrel Partners LLP, over, in aggregate, 45.42 per cent.
of the issued Gresham Shares. This level of shareholder support for
the Acquisition is indicative, in the Gresham Board's opinion, of
the challenges Gresham faces in optimising shareholder value as a
standalone, small cap listed entity.
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Accordingly, after careful consideration, the
Gresham Board intends unanimously to recommend that Gresham
Shareholders vote in favour of the Scheme at the Court Meeting and
the Special Resolution to be proposed at the General
Meeting.
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Background to and
reasons for the Acquisition
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Bidco believes the Acquisition represents a compelling
opportunity to acquire an attractive and well-established business
providing post-trade processing solutions to capital markets
participants. Gresham is well-positioned as a data control,
reconciliation and post-trade workflow vendor to the financial
services sector across the EMEA, North America and APAC
regions.
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Bidco also believes that the Acquisition represents an
exciting opportunity to combine Gresham with its portfolio company,
Alveo, which Bidco acquired in January 2023 with the aim of
building a global and differentiated enterprise data management and
governance platform for the capital markets tech ecosystem. Alveo
is an enterprise data management software platform that is uniquely
focused on providing cleansing, validating and normalising market,
pricing, and reference data for distribution to various systems
within the post-trade processing ecosystem. Bidco views Gresham,
which offers separate non-competing functionality, as an important
step towards building a platform of scale, which will expand the
use cases from market and pricing data to serving operational
trade, position, and cash. The combination of Gresham and Alveo is
expected to expand the combined business' value proposition to
collect, control and ensure the quality of the critical datasets
required by capital markets participants to mitigate operational
and financial risk, whilst maintaining compliance with increasing
regulatory scrutiny.
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Gresham has a blue-chip customer base and has a track
record of customer growth and, in conjunction with STG and Alveo,
Bidco expects to leverage its extensive global network, resources
and experience to achieve greater client penetration in the end
markets that Gresham currently serves.
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Bidco recognises the investment and progress the
Gresham management team has made over recent years, driven by
organic product innovation and several acquisitions that have
created a portfolio which includes next-generation, SaaS-based,
mission-critical products; in particular, the development and
scaling of Clareti Control and, more recently, Floe, Gresham's
next-generation smart bank account platform. Bidco sees Clareti
Control, which has increasingly contributed a larger share of
Gresham Group revenues over time, as a bespoke product in the
financial services reconciliation market with robust capabilities
in both inter-system reconciliations ("non-standardised"
reconciliations) and cash/nostro and securities reconciliations
("standardised" reconciliations). Bidco believes Gresham, with its
support, will realise its full potential. The Gresham target
market, whilst challenging near term, exhibits durable market
tailwinds driven by an accelerating adoption of cloud and business
demand for automation solutions. Bidco also believes that the
additional scale from a combination with Alveo will enable a more
effective sales execution whilst optimising operating costs.
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Bidco believes the combination of Gresham and Alveo
could enjoy accelerated growth through a common go-to-market
strategy; Gresham and Alveo both focus on critical albeit distinct
capital markets solutions where requisite demand is driven by
regulatory compliance and requirements for risk mitigation,
workflow optimisation and cost reduction through adoption of cloud
software and managed services.
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The combined segments for Alveo's pricing data on the
one hand, and Gresham's reconciled trade data on the other, fuels
essential processing systems and offers a potential for cross-sell
opportunities. Bidco anticipates that the combination will enable
the relevant product offerings to become embedded more deeply into
capital markets workflows and further benefit from a common
Data-as-a-Service (DaaS) and Managed Services infrastructure.
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In summary, Bidco believes that Gresham is a highly
complementary business to Alveo, with clear alignment in purpose
and values, and the Acquisition is an exciting opportunity to
expand and enhance the separate solutions and services offered to
both companies' customers and the broader capital markets
industry.
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Irrevocable
Undertakings and Letters of Intent
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In total, including the irrevocable undertakings from
the Gresham Directors described below, Bidco has received
irrevocable undertakings to vote (or, where applicable, procure
voting) in favour of the Scheme at the Court Meeting and the
Special Resolution to be proposed at the General Meeting (or in the
event that the Acquisition is implemented by an Offer, to accept or
procure acceptance of such Offer) in respect of, in aggregate,
24,772,833 Gresham Shares, representing approximately 29.54 per
cent. of the existing issued ordinary share capital of Gresham as
at the Last Practicable Date.
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The Gresham Directors have irrevocably undertaken to
vote (or, where applicable, procure voting) in favour of the Scheme
at the Court Meeting and the Special Resolution to be proposed at
the General Meeting (or in the event that the Acquisition is
implemented by an Offer, to accept or procure acceptance of such
Offer) in respect of their own beneficial holdings (and those of
their connected persons) amounting to, in aggregate, 446,986
Gresham Shares, representing approximately 0.53 per cent. of the
existing issued ordinary share capital of Gresham as at the Last
Practicable Date.
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Bidco has also received irrevocable undertakings from
Kestrel Partners LLP and Herald Investment Trust plc to vote in
favour of the Scheme at the Court Meeting and the Special
Resolution to be proposed at the General Meeting (or in the event
that the Acquisition is implemented by an Offer, to accept or
procure acceptance of such Offer) in respect of, in aggregate,
24,325,847 Gresham Shares, representing approximately 29.00 per
cent. of the existing issued ordinary share capital of Gresham as
at the Last Practicable Date.
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Bidco has also received non-binding and revocable
letters of intent from Schroder Investment Management Limited,
Amati Global Investors Limited and J O Hambro Capital Management
Limited to vote in favour of the Scheme at the Court Meeting and
the Special Resolution to be proposed at the General Meeting (or in
the event that the Acquisition is implemented by an Offer, to
accept or procure acceptance of such Offer) in respect of, in
aggregate, 13,325,000 Gresham Shares, representing approximately
15.89 per cent. of the existing issued ordinary share capital of
Gresham as at the Last Practicable Date.
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Therefore, Bidco has received irrevocable undertakings
and letters of intent in respect of, in aggregate, 38,097,833
Gresham Shares, representing approximately 45.42 per cent. of the
existing issued ordinary share capital of Gresham as at the Last
Practicable Date.
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Further details of these irrevocable undertakings and
the letters of intent are set out at in Appendix 3 to this
Announcement.
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Information relating
to Bidco and STG
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Bidco is a private limited company incorporated in
England and Wales on 19 December 2022 and is owned indirectly by
funds managed or advised by STG. Bidco was formed for the purposes
of the purchase of Alveo in January 2023 and is the holding company
of Alveo.
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STG is a strategic private equity firm with over 20
years' experience investing in enterprise software and data-centric
companies. STG's portfolio is currently comprised of approximately
29 international technology companies, which collectively have more
than 13,000 employees. Today STG has approximately USD 10 billion
under management.
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Information relating
to Gresham
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Gresham is a bespoke software company that specialises
in providing real-time solutions for data integrity and control,
banking integration, payments and cash management. Its customers
include some of the world's largest financial institutions and
corporates, all of whom are served locally from offices located in
the United Kingdom, Europe, North America and Asia Pacific.
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Gresham's award-winning Clareti software platform is
highly flexible and scalable, available on-site or in the cloud,
and designed to address its customers' most challenging financial
control, risk management, data governance and regulatory compliance
problems.
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Gresham will publish its annual
report and audited accounts for the year ended 31 December 2023 on
or prior to 30 April 2024.
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Timetable and
conditions
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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 2006 (although Bidco reserves
the right to implement the Acquisition by way of an Offer, subject
to the consent of the Panel).
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Accordingly, the terms of the Acquisition will be put
to Gresham Shareholders at the Court Meeting and the General
Meeting. In order to become Effective, the Scheme must be approved
at the Court Meeting by a majority in number of Scheme
Shareholders, present and voting (to the extent permitted pursuant
to the Takeover Code, applicable law or the direction or order of
the Court whose sanction is required for the Scheme), whether in
person or by proxy, representing at least 75 per cent. of the votes
attached to the Scheme Shares cast by those Scheme Shareholders.
The Scheme also requires the passing at the General Meeting of the
Special Resolution. The General Meeting is expected to take place
immediately after the Court Meeting. The Special Resolution is to
authorise the Gresham Directors to give effect to the Scheme and
deal with certain ancillary matters, and requires the approval by
Gresham Shareholders representing at least 75 per cent. of the
votes cast at the General Meeting (either in person or by
proxy).
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The Acquisition is conditional on, amongst other
things, the receipt or waiver of foreign investment clearance in
the United Kingdom, the United States, Australia and
Luxembourg.
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The Acquisition will be on the terms and subject to
the Conditions set out in Appendix 1 to this Announcement and the
full terms and conditions to be set out in the Scheme Document (or,
if the Acquisition is implemented by way of an Offer, the Offer
Document). Full details of the Acquisition will be provided in the
Scheme Document. It is expected that the Scheme Document,
containing further information about the Acquisition and notices of
the Meetings, together with the associated forms of proxy, will be
despatched to Gresham Shareholders as soon as reasonably
practicable and, in any event, within 28 days of this Announcement
(or such later time as Gresham, Bidco and the Panel may agree) and
the Meetings are expected to be held shortly thereafter. An
expected timetable of key events relating to the Acquisition will
be provided in the Scheme Document. Subject to certain restrictions
relating to persons resident in Restricted Jurisdictions, the
Scheme Document will also be made available on Gresham's website at
www.greshamtech.com/invest-in-us.
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The Scheme is expected to become Effective during the
third quarter of the calendar year 2024, subject to the
satisfaction or (where applicable) waiver of the Conditions.
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Commenting on the Acquisition, Richard Last, Chairman
of Gresham, said:
"We believe the Cash Offer provides a good
opportunity for Gresham Shareholders to realise fair and certain
value and an exciting way for Gresham to compete more effectively
in its global markets and to continue the Clareti journey started
over a decade ago."
Commenting on the Acquisition, Marc Bala, Managing
Director at STG and a director of Bidco, said:
"We couldn't be more excited about bringing together
two leading financial technology providers and leveraging the
respective strengths of each company to drive greater value for our
combined customers. By combining Gresham with Alveo we will create
a capital markets data management specialist that offers clients
greater scale and a range of solutions to facilitate their business
processes. We look forward to welcoming Gresham to the STG
family."
This summary should
be read in conjunction with, and is subject to, the full text of
this Announcement and the Appendices. The Acquisition will be
subject to the Conditions and other terms set out in this
Announcement and to the full terms and conditions which will be set
out in the Scheme Document (or, if the Acquisition is implemented
by way of an Offer, the Offer Document). The Conditions to, and
certain further terms of, the Acquisition are set out in Appendix 1
to this Announcement. The sources and bases of calculation of
certain information contained in this Announcement are set out in
Appendix 2 to this Announcement. Details of irrevocable
undertakings and letters of intent received by Bidco are set out in
Appendix 3 to this Announcement. Certain terms used in this
Announcement are defined in Appendix 4 to this
Announcement.
Enquiries:
Bidco
Marc Bala / Ishan Manaktala / Ben Livingston / Kial
Kaiser
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Enquiries via
William Blair
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William Blair International,
Limited
(Financial Adviser to STG and
Bidco)
Dominic Emery / Hanan Lee / Jakub Lenart / Robert von Martens
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+44 (0) 20 7868 4440
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Gresham
Ian Manocha / Tom Mullan
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+44 (0) 20 7653 0200
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Houlihan Lokey
Advisory Limited
(Financial Adviser and Rule 3
Adviser to Gresham)
Mark Fisher / Tim Richardson / Elliot Reader / Jack Durston
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+44 (0) 20 7839 3355
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Singer Capital
Markets Advisory LLP
(Corporate Broker to
Gresham)
Shaun Dobson / Jen Boorer
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+44 (0) 20 7496 3000
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Alma
Strategic Communications
(PR
Adviser to Gresham)
Josh Royston / Hilary Buchanan / Will
Ellis Hancock
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+44 (0) 20 3405 0205
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Paul Hastings (Europe) LLP is acting as legal adviser
to STG and Bidco.
Taylor Wessing LLP is acting as legal adviser to
Gresham.
Important notices relating to financial advisers
William Blair
International, Limited ("William
Blair"), which is authorised and regulated by the Financial
Conduct Authority in the United Kingdom, is acting exclusively for
STG and Bidco and no one else in connection with the subject matter
of this Announcement and will not be responsible to anyone other
than STG and Bidco for providing the protections afforded to the
clients of William Blair, or for providing advice in connection
with the subject matter of this Announcement. Neither William Blair
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 William Blair in connection
with the subject matter of this Announcement, any statement
contained herein or otherwise.
Houlihan Lokey
Advisory Limited ("Houlihan
Lokey"), which is authorised and regulated by the Financial
Conduct Authority in the United Kingdom, is acting exclusively as
financial adviser and Rule 3 adviser to Gresham and no one else in
connection with the matters set out in this Announcement and will
not be responsible to anyone other than Gresham for providing the
protections afforded to clients of Houlihan Lokey or for providing
advice in relation to matters referred to in this Announcement.
Neither Houlihan Lokey 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 Houlihan Lokey in connection with this Announcement, any
statement contained herein or otherwise.
Singer Capital
Markets Advisory LLP ("Singer Capital Markets"), which is authorised and regulated by the
Financial Conduct Authority in the United Kingdom, is acting
exclusively for Gresham and no-one else in connection with the
subject matter of this Announcement and will not be responsible to
anyone other than Gresham for providing the protections afforded to
clients of Singer Capital Markets or for providing advice in
relation to the subject matter of this Announcement or any other
matter referred to in this Announcement.
Each of William
Blair, Houlihan Lokey and
Singer Capital Markets have given and not withdrawn their consent to
the publication of this Announcement with the inclusion herein of
the references to their respective names and (where applicable)
advice in the form and context in which they appear.
Further information
This Announcement is
for information purposes only and is not intended to, and does not,
constitute or form part of any offer or inducement to sell or an
invitation to purchase, otherwise acquire, subscribe for, sell or
otherwise dispose of, any securities or the solicitation of an
offer to buy any securities, any vote or approval in any
jurisdiction pursuant to the Acquisition or otherwise. The
Acquisition will be implemented solely pursuant to the terms of the
Scheme Document (or, if the Acquisition is implemented by way of an
Offer, the Offer Document), which will contain the full terms and
conditions of the Acquisition, including details of what action is
required from Gresham Shareholders in respect of the Acquisition.
Any decision in respect of, or other response to, the Acquisition
should be made only on the basis of the information in the Scheme
Document (or, if the Acquisition is implemented by way of an Offer,
the Offer Document).
Gresham and Bidco
shall prepare the Scheme Document (or, if the Acquisition is
implemented by way of an Offer, the Offer Document) to be
distributed to Gresham Shareholders. Gresham and Bidco urge Gresham
Shareholders to read the Scheme Document in its entirety (or, if
the Acquisition is implemented by way of an Offer, the Offer
Document) when it becomes available because it will contain
important information relating to the Acquisition including details
of how to vote in respect of the Scheme.
This Announcement
does not constitute a prospectus or prospectus equivalent
document.
Bidco reserves the
right to elect to implement the Acquisition by way of an Offer as
an alternative to the Scheme (subject to the Panel's consent). In
such event, the Acquisition will be implemented on substantially
the same terms, so far as applicable, as those which will apply to
the Scheme, subject to appropriate amendments to reflect, among
other things, the change in method of effecting the Acquisition
(including, without limitation: (i) the inclusion of an acceptance
condition set at 90 per cent. of the Gresham Shares to which such
Offer relates (or such other percentage as Bidco may, subject to
the rules of the Takeover Code and with the consent of the Panel,
decide); and (ii) those required by, or deemed appropriate by,
Bidco under applicable law). Further, if sufficient acceptances of
such Offer are received and/or sufficient Gresham Shares are
otherwise acquired, it is the intention of Bidco to apply the
provisions of Chapter 3 of Part 28 of the Companies Act 2006 to
acquire compulsorily any outstanding Gresham Shares to which such
Offer relates.
If you are in any doubt about the contents of this
Announcement or the action you should take, you are recommended to
seek your own independent financial advice immediately from your
stockbroker, bank manager, solicitor, accountant or independent
financial adviser duly authorised under the Financial Services and
Markets Act 2000 (as amended) if you are resident in the United
Kingdom or, if not, from another appropriately authorised
independent financial adviser.
Overseas Shareholders
This Announcement
has been prepared in accordance with and for the purpose of
complying with the laws of England and Wales, the Takeover Code,
the Market Abuse Regulation and the Disclosure Guidance and
Transparency Rules and information disclosed may not be the same as
that which would have been disclosed if this Announcement had been
prepared in accordance with the laws of jurisdictions outside
England.
The release,
publication or distribution of this Announcement in or into certain
jurisdictions other than the United Kingdom may be restricted by
law and therefore any persons who are subject to the laws of any
jurisdiction other than the United Kingdom should inform themselves
of, and observe, any applicable requirements of their
jurisdictions.
The availability of
the Acquisition to Gresham Shareholders who are not resident in and
citizens of the United Kingdom may be affected by the laws and/or
regulations of the relevant jurisdictions in which they are located
or of which they are citizens. Persons who are not resident in and
citizens of the United Kingdom should inform themselves of, and
observe, any applicable legal or regulatory requirements of their
jurisdictions. In particular, the ability of persons who are not
resident in and citizens of the United Kingdom to vote their Scheme
Shares with respect to the Scheme at the Court Meeting, or to
execute and deliver forms of proxy appointing another person to
vote at the Court Meeting on their behalf, may be affected by the
laws of the relevant jurisdictions in which they are located or of
which they are a citizen. Gresham Shareholders who are in any doubt
regarding such matters should consult an appropriate independent
financial adviser in their relevant jurisdiction without delay. Any
failure to comply with the applicable restrictions may constitute a
violation of the securities laws of any such jurisdiction. To the
fullest extent permitted by applicable law, the companies and
persons involved in the Acquisition disclaim any responsibility or
liability for the violation of such restrictions by any
person.
Unless otherwise
determined by Bidco or required by the Takeover Code, and permitted
by applicable law and regulation, participation in the Acquisition
will not be made available, directly or indirectly, in, into or
from a Restricted Jurisdiction where to do so would violate the
laws in that jurisdiction and no person may vote in favour of the
Acquisition by any such use, means, instrumentality or from within
a Restricted Jurisdiction or any other jurisdiction if to do so
would constitute a violation of the laws of that jurisdiction.
Accordingly, copies of this Announcement and any formal
documentation relating to the Acquisition are not being, and must
not be, directly or indirectly, mailed or otherwise forwarded,
distributed or sent in, into or from any Restricted Jurisdiction
and persons receiving this Announcement and all such documents
relating to the Acquisition (including, without limitation, agents,
custodians, nominees and trustees) must not, directly or
indirectly, mail or otherwise forward, distribute or send them in,
into or from any Restricted Jurisdiction. Doing so may render
invalid any related purported vote in respect of the Acquisition.
If the Acquisition is implemented by way of an Offer (unless
otherwise permitted by applicable law and regulation), the Offer
may not be made directly or indirectly, in or into, or by the use
of mails or any means or instrumentality (including, but not
limited to, facsimile, e-mail or other electronic transmission,
telex or telephone) of interstate or foreign commerce of, or of any
facility of a national, state or other securities exchange of, any
Restricted Jurisdiction and the Offer may not be capable of
acceptance by any such use, means, instrumentality or
facilities.
Further details in
relation to Overseas Shareholders will be contained in the Scheme
Document (or, if the Acquisition is implemented by way of an Offer,
the Offer Document).
Notice to US investors in Gresham
Gresham Shareholders
in the United States should note that the Acquisition relates to
the shares of an English company and is proposed to be made by
means of a scheme of arrangement provided for under, and governed
by, the laws of England and Wales.
Neither the proxy
solicitation nor the tender offer rules under the U.S Securities
Exchange Act of 1934, as amended (the "US Exchange Act") will apply to the Scheme. Moreover, the
Scheme will be subject to the disclosure and procedural
requirements and practices applicable in the United Kingdom to
schemes of arrangement, which differ from the disclosure and
procedural requirements of US tender offer and proxy solicitation
rules. If, in the future and subject to the consent of the Panel,
Bidco exercises the right to implement the Acquisition by way of an
Offer and determines to extend the offer into the United States,
the Acquisition will be made in compliance with applicable United
States laws and regulations, including any applicable exemptions
under the US Exchange Act. Such an Offer would be made in the
United States by Bidco and no one else. In accordance with normal
United Kingdom practice and consistent with Rule 14e-5 under the US
Exchange Act, Bidco, certain affiliated companies and the nominees
or brokers (acting as agents) may make certain purchases of, or
arrangements to purchase, shares in Gresham outside such Offer
during the period in which such Offer would remain open for
acceptance. If such purchases or arrangements to purchase were to
be made they would be made outside the United States either in the
open market at prevailing prices or in private transactions at
negotiated prices and would comply with applicable law, including,
to the extent applicable, the US Exchange Act. Any information
about such purchases will be disclosed as required in the United
Kingdom, will be reported to a Regulatory Information Service and
will be available on the London Stock Exchange website at
www.londonstockexchange.com.
The financial
information included in this Announcement and the Scheme Document
(or, if the Acquisition is implemented by way of an Offer, the
Offer Document) has been or will have been prepared in accordance
with generally accepted accounting principles of the United Kingdom
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
United States ("US GAAP").
US GAAP differs in certain significant respects from accounting
standards applicable in the United Kingdom. None of the financial
information in this document has been audited in accordance with
auditing standards generally accepted in the United States or the
auditing standards of the Public Company Accounting Oversight Board
(United States).
Neither the
Acquisition nor this Announcement have been approved or disapproved
by the US Securities and Exchange Commission, any state securities
commission in the United States or any other US regulatory
authority, nor have any such authorities passed upon or determined
the adequacy
or accuracy of the
information contained in this Announcement or the merits of the
Acquisition. Any representation to the contrary is a criminal
offence in the United States.
The receipt of
consideration by a US holder for the transfer of its Gresham Shares
pursuant to the Acquisition may be a taxable transaction for US
federal income tax purposes and under applicable US state and
local, as well as non-US and other, tax laws. Each Gresham
Shareholder is urged to consult their independent professional
adviser immediately regarding the tax consequences of the
Acquisition applicable to them, including under applicable US
federal, state and local, as well as non-US and other, tax
laws.
It may be difficult
for US holders of Gresham Shares to enforce their rights and any
claim arising out of the US federal laws or to enforce against them
a judgment of a US court predicated upon the securities laws of the
United Kingdom, since Bidco and Gresham are incorporated in a
non-US jurisdiction, and some or all of their officers and
directors may be residents of countries other than the United
States. US holders of Gresham Shares may not be able to sue a
non-US company or its officers or directors in a non-US court for
violations of the US securities laws. Further, it may be difficult
to compel a non-US company and its affiliates to subject themselves
to a US court's judgment.
Cautionary note regarding forward-looking
statements
This Announcement
(including information incorporated by reference in this
Announcement), oral statements made regarding the Acquisition, and
other information published by Bidco and Gresham contain certain
statements which are, or may be deemed to be, "forward-looking
statements". Forward-looking statements are prospective in nature
and are not based on historical facts, but rather on current
expectations and projections of the management of Bidco and Gresham
about future events, and are therefore subject to risks and
uncertainties which could cause actual results to differ materially
from the future results expressed or implied by the forward-looking
statements.
The forward-looking
statements contained in this Announcement include statements
relating to the expected effects of the Acquisition on Bidco and
Gresham (including their future prospects, developments and
strategies), the expected timing and scope of the Acquisition and
other statements other than historical facts. Forward-looking
statements often, but not always, use words such as "anticipate",
"target", "expect", "estimate", "intend", "plan", "goal",
"believe", "hope", "aims", "continue", "will", "may", "should",
"would", "could", or other words of similar meaning or derivatives
thereof. These statements are based on assumptions and assessments
made by Gresham and/or Bidco in light of their experience and their
perception of historical trends, current conditions, future
developments and other factors they believe appropriate. By their
nature, forward-looking statements involve risk and uncertainty,
because they relate to events and depend on circumstances that will
occur in the future and the factors described in the context of
such forward-looking statements in this Announcement could cause
actual results and developments to differ materially from those
expressed in or implied by such forward-looking statements and as
such are qualified in their entirety. These factors include, but
are not limited to: the ability to complete the Acquisition; the
ability to obtain requisite regulatory and shareholder approvals
and the satisfaction of other Conditions on the proposed terms and
schedule; changes in the global political, economic, business and
competitive environments and in market and regulatory forces;
changes in future exchange and interest rates; changes in tax
rates; future business combinations or disposals; changes in
general economic and business conditions; changes in the behaviour
of other market participants; changes in the anticipated benefits
from the proposed transaction not being realised as a result of
changes in general economic and market conditions in the countries
in which Bidco and Gresham operate, weak, volatile or illiquid
capital and/or credit markets, changes in the degree of competition
in the geographic and business areas in which Bidco and Gresham
operate and changes in laws or in supervisory expectations or
requirements.
Forward-looking
statements may include statements relating to the following: (i)
future capital expenditures, expenses, revenues, earnings,
synergies, economic performance, indebtedness, financial condition,
dividend policy, losses and future prospects; (ii) business and
management strategies and the expansion and growth of Gresham's
operations and potential synergies resulting from the Acquisition;
and (iii) the effects of global economic conditions and
governmental regulation on Gresham's business.
Such forward-looking
statements involve known and unknown risks and uncertainties that
could significantly affect expected results and are based on
certain key assumptions. Many factors may cause the actual results,
performance or achievements of Gresham to be materially different
from any future results, performance or achievements expressed or
implied by the forward-looking statements. These factors include
changes in the global, political, economic, business, competitive,
market and regulatory forces, future exchange and interest rates,
changes in tax rates and future business combinations or
disposals.
No member of
Gresham, nor any of its associates, directors, officers, employees
or advisers, provides any representation, assurance or guarantee
that the occurrence of the events expressed or implied in any
forward-looking statements in this Announcement will actually
occur.
Although it is
believed that the expectations reflected in such forward-looking
statements are reasonable, no assurance can be given that such
expectations will prove to have been correct and you are therefore
cautioned not to place any reliance on these forward-looking
statements which speak only as at the date of this Announcement.
Neither Gresham nor Bidco assumes any obligation to update or
correct the information contained in this Announcement (whether as
a result of new information, future events or otherwise), except as
required by applicable law.
Dealing and opening position disclosure
requirements
Under Rule 8.3(a) of
the Takeover Code, any person who is interested in one per cent. or
more of any class of relevant securities of an offeree company or
of any securities exchange offeror (being any offeror other than an
offeror in respect of which it has been announced that its offer
is, or is likely to be, solely in cash) must make an Opening
Position Disclosure following the commencement of the offer period
and, if later, following the announcement in which any securities
exchange offeror is first identified.
An Opening Position
Disclosure must contain details of the person's interests and short
positions in, and rights to subscribe for, any relevant securities
of each of (i) the offeree company and (ii) any securities exchange
offeror(s). An Opening Position Disclosure by a person to whom Rule
8.3(a) applies must be made by no later than 3.30 p.m. (London
time) on the 10th Business Day following the commencement of the
offer period and, if appropriate, by no later than 3.30 p.m.
(London time) on the 10th Business Day following the announcement
in which any securities exchange offeror is first identified.
Relevant persons who deal in the relevant securities of the offeree
company or of a securities exchange offeror prior to the deadline
for making an Opening Position Disclosure must instead make a
Dealing Disclosure.
Under Rule 8.3(b) of
the Takeover Code, any person who is, or becomes, interested in one
per cent. or more of any class of relevant securities of the
offeree company or of any securities exchange offeror must make a
Dealing Disclosure if the person deals in any relevant securities
of the offeree company or of any securities exchange offeror. A
Dealing Disclosure must contain details of the dealing concerned
and of the person's interests and short positions in, and rights to
subscribe for, any relevant securities of each of (i) the offeree
company and (ii) any securities exchange offeror, save to the
extent that these details have previously been disclosed under Rule
8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies
must be made by no later than 3.30 p.m. (London time) on the
Business Day following the date of the relevant dealing. If two or
more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of an offeree company or a
securities exchange offeror, they will be deemed to be a single
person for the purpose of Rule 8.3.
Opening Position
Disclosures must also be made by the offeree company and by any
offeror and Dealing Disclosures must also be made by the offeree
company, by any offeror and by any persons acting in concert with
any of them (see Rules 8.1, 8.2 and 8.4). Details of the offeree
and offeror companies in respect of whose relevant securities
Opening Position Disclosures and Dealing Disclosures must be made
can be found in the Disclosure Table on the Takeover Panel's
website at www.thetakeoverpanel.org.uk,
including details of the number of relevant securities in issue,
when the offer period commenced and when any offeror was first
identified. You should contact the Panel's Market Surveillance Unit
on +44 (0)20 7638 0129 if you are in any doubt as to whether you
are required to make an Opening Position Disclosure or a Dealing
Disclosure.
Publication on a website
In accordance with
Rule 26.1 of the Takeover Code, a copy of this Announcement and the
documents required to be published under Rule 26 of the Takeover
Code will be made available, subject to certain restrictions
relating to persons resident in Restricted Jurisdictions, on
Gresham's website at www.greshamtech.com/invest-in-us by no later than 12
noon (London time) on the first Business Day following the date of
this Announcement. For the avoidance of doubt, neither the contents
of this website nor any website accessible from hyperlinks is
incorporated into or forms part of this Announcement.
No profit forecasts, estimates or quantified benefits
statements
Save for the profit
estimates set out in paragraph 8.1 of this Announcement, no
statement in this Announcement is intended to constitute a profit
forecast, profit estimate or quantified benefits statement for any
period and no statement in this Announcement should be interpreted
to mean that the earnings or future earnings per share of or
dividends or future dividends per share of Gresham for the current
or future financial years will necessarily match or exceed the
historical published earnings or earnings per share or dividends
per share of Gresham.
Requesting hard copy documents
In accordance with
Rule 30.3 of the Takeover Code, Gresham Shareholders, persons with
information rights and participants in the Gresham Share Plans may
request a hard copy of this Announcement by contacting Gresham's
registrars, Equiniti on +44 (0)371 384 2050. Calls are charged at the standard
geographic rate and will vary by provider. Calls outside the United
Kingdom will be charged at the applicable international rate. Lines
are open between 08:30 - 17:30, Monday to Friday excluding public
holidays in England and Wales; or (ii) by submitting a request in
writing to Equiniti at
Aspect House, Spencer Road, Lancing, West Sussex BN99
6DA. Please note
that Equiniti
cannot provide any financial,
legal or tax advice and calls may be recorded and monitored for
security and training purposes. For persons who receive a copy of
this Announcement in electronic form or via a website notification,
a hard copy of this Announcement will not be sent unless so
requested. Such persons may also request that all future documents,
announcements and information to be sent to them in relation to the
Acquisition should be in hard copy form.
Electronic communications
Please be aware that
addresses, electronic addresses and certain other information
provided by Gresham Shareholders, persons with information rights
and other relevant persons for the receipt of communications from
Gresham may be provided to Bidco during the Offer Period as
required under Section 4 of Appendix 4 of the Takeover Code to
comply with Rule 2.11(c) of the Takeover Code.
Rounding
Certain figures
included in this Announcement have been subjected to rounding
adjustments. Accordingly, figures shown for the same category
presented in different tables may vary slightly and figures shown
as totals in certain tables may not be an arithmetic aggregation of
figures that precede them.
General
If the Acquisition
is effected by way of an Offer, and such an Offer becomes or is
declared unconditional in all respects and sufficient acceptances
are received, Bidco intends to exercise its rights to apply the
provisions of Chapter 3 of Part 28 of the Companies Act 2006 so as
to acquire compulsorily the remaining Gresham Shares in respect of
which the Offer has not been accepted.
Investors should be
aware that Bidco may purchase Gresham Shares otherwise than under
any Offer or the Scheme, including pursuant to privately negotiated
purchases.
Rule 2.9 of the Takeover Code
For the purposes of
Rule 2.9 of the Takeover Code, Gresham confirms that, as at
8 April 2024 (being the Last
Practicable Date), it had 83,874,458 ordinary shares of 5 pence
each ("Ordinary Shares") in
issue and admitted to trading on the Main Market of the London
Stock Exchange. Gresham does not hold any Ordinary Shares in
treasury. The International Securities Identification Number (ISIN)
for the Ordinary Shares is GB0008808825.
Disclaimer
The information
contained herein does not constitute an offer to sell, nor a
solicitation of an offer to buy, any security, and may not be used
or relied upon in connection with any offer or solicitation. The
information contained herein is not for publication or distribution
to persons in the United States. Any securities referred to herein
have not been and will not be registered under the U.S. Securities
Act of 1933, as amended, and may not be offered or sold without
registration thereunder or pursuant to an available exemption
therefrom. Any offering of securities to be made in the United
States would have to be made by means of an offering document that
would be obtainable from the issuer or its agents and would contain
detailed information about the issuer of the securities and its
management, as well as financial information. The securities may
not be offered or sold in the United States absent registration or
an exemption from registration. The Acquisition will be subject to English
law, the jurisdiction of the Court, and the applicable requirements
of the Takeover Code, the Panel, the London Stock Exchange, the
Financial Conduct Authority and the Registrar of
Companies.
NOT FOR RELEASE,
PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR
INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD
CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH
JURISDICTION
FOR IMMEDIATE
RELEASE
THIS ANNOUNCEMENT
CONTAINS INSIDE INFORMATION
9 APRIL
2024
RECOMMENDED CASH ACQUISITION
OF
GRESHAM TECHNOLOGIES PLC
BY
ALLIANCE BIDC LTD
(a company owned indirectly by funds managed
or advised by STG Partners, LLC ("STG"))
to be implemented by means of a scheme of
arrangement
under Part 26 of the Companies Act 2006
1.
Introduction
The boards of Alliance Bidco Ltd ("Bidco") and Gresham Technologies plc
("Gresham") are pleased to
announce that they have reached agreement on the terms and
conditions of a recommended offer by Bidco for the entire issued
and to be issued ordinary share capital of Gresham (the
"Acquisition"). 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
2006 (although Bidco reserves the right to effect the Acquisition
by way of an Offer, subject to the consent of the Panel).
2.
The Acquisition
Under the terms of the Acquisition, which will be
subject to the Conditions and further terms set out in Appendix 1
to this Announcement and the full terms and conditions to be set
out in the Scheme Document (or, if the Acquisition is implemented
by way of an Offer, the Offer Document), each Gresham Shareholder
will be entitled to receive:
for each Gresham Share: 163 pence in cash (the
"Cash Offer")
In addition, prior to the Effective Date the Gresham
Directors intend to declare and settle an interim dividend in
respect of the year ended 31 December 2023 of 0.75 pence per
Gresham Share (the "Permitted
Dividend").
The Cash Offer and the Permitted Dividend together
aggregate to 163.75 pence per Gresham Share which represents a
premium of approximately:
●
|
26.94 per cent. to the closing price of 129.00 pence
per Gresham Share on 8 April 2024 (being the Last Practicable
Date);
|
●
|
31.42 per cent. to the volume weighted average price
of 124.60 pence per Gresham Share for the three months to 8 April
2024 (being the Last Practicable Date); and
|
●
|
33.24 per cent. to the volume weighted average price
of 122.90 pence per Gresham Share for the six months to 8 April
2024 (being the Last Practicable Date).
|
The Acquisition values the entire issued and to be
issued ordinary share capital of Gresham at approximately £146.7
million on a fully diluted basis and implies an enterprise value of
approximately £141.9 million which equates to a multiple of 30.8
times the Gresham Directors' estimate of Gresham's FY2023 adjusted
cash EBITDA.
The Scheme Shares will be acquired pursuant to the
Acquisition fully paid and free from all liens, charges, equities,
encumbrances, rights of pre-emption and any other interest of any
nature whatsoever and together with all rights attaching thereto,
including without limitation voting rights and the rights to
receive and retain in full all dividends and distributions (if any)
announced, declared, made or paid with a record date on or after
the Scheme Record Time.
STG, Bidco and Gresham have agreed to the declaration
and payment of the Permitted Dividend without any reduction to the
Cash Offer. If, on or after the date of this Announcement and
before the Effective Date, any dividend and/or other distribution
and/or other return of capital is declared, made or paid or becomes
payable in respect of Gresham Shares (other than the Permitted
Dividend), Bidco reserves the right to reduce the consideration
payable under the terms of the Acquisition by an amount up to the
aggregate amount of such dividend and/or distribution and/or return
of capital, in which case any reference in this Announcement to the
consideration payable under the terms of the Acquisition will be
deemed to be a reference to the consideration as so reduced. Any
exercise by Bidco of its rights referred to in this paragraph shall
be the subject of an announcement and, for the avoidance of doubt,
shall not be regarded as constituting any revision or variation of
the terms of the Acquisition. In such circumstances, Gresham
Shareholders will be entitled to retain any such dividend,
distribution or other return of capital declared, made or paid or
which becomes payable.
3.
Background to and reasons for the Acquisition
Bidco believes the Acquisition represents a compelling
opportunity to acquire an attractive and well-established business
providing post-trade processing solutions to capital markets
participants. Gresham is well-positioned as a data control,
reconciliation and post-trade workflow vendor to the financial
services sector across the EMEA, North America and APAC
regions.
Bidco also believes that the Acquisition represents an
exciting opportunity to combine Gresham with its portfolio company,
Alveo, which Bidco acquired in January 2023 with the aim of
building a global and differentiated enterprise data management and
governance platform for the capital markets tech ecosystem. Alveo
is an enterprise data management software platform that is uniquely
focused on providing cleansing, validating and normalising market,
pricing, and reference data for distribution to various systems
within the post-trade processing ecosystem. Bidco views Gresham,
which offers separate non-competing functionality, as an important
step towards building a platform of scale, which will expand the
use cases from market and pricing data to serving operational
trade, position, and cash. The combination of Gresham and Alveo is
expected to expand the combined business' value proposition to
collect, control and ensure the quality of the critical datasets
required by capital markets participants to mitigate operational
and financial risk, whilst maintaining compliance with increasing
regulatory scrutiny.
Gresham has a blue-chip customer base and has a track
record of customer growth and in conjunction with STG and Alveo,
Bidco expects to leverage its extensive global network, resources
and experience to achieve greater client penetration in the end
markets that Gresham currently serves.
Bidco recognises the investment and progress the
Gresham management team has made over recent years, driven by
organic product innovation and several acquisitions that have
created a portfolio which includes next-generation, SaaS-based,
mission-critical products; in particular, the development and
scaling of Clareti Control and more recently, Floe, Gresham's
next-generation smart bank account platform. Bidco sees Clareti
Control, which has increasingly contributed a larger share of
Gresham Group revenues over time, as a bespoke product in the
financial services reconciliation market with robust capabilities
in both inter-system reconciliations ("non-standardised"
reconciliations) and cash/nostro and securities reconciliations
("standardised" reconciliations). Bidco believes Gresham, with its
support, will realise its full potential. The Gresham target
market, whilst challenging near term, exhibits durable market
tailwinds driven by an accelerating adoption of cloud and business
demand for automation solutions. Bidco also believes the additional
scale from a combination with Alveo will enable a more effective
sales execution whilst optimising operating costs.
Bidco believes the combination of Gresham and Alveo
could enjoy accelerated growth through a common go-to-market
strategy; Gresham and Alveo both focus on critical albeit distinct
capital markets solutions where requisite demand is driven by
regulatory compliance and requirements for risk mitigation,
workflow optimisation and cost reduction through adoption of cloud
software and managed services.
The combined segments for Alveo's pricing data on the
one hand, and Gresham's reconciled trade data on the other, fuels
essential processing systems and offers a potential for cross-sell
opportunities. Bidco anticipates that the combination will enable
the relevant product offerings to become embedded more deeply into
capital markets workflows and further benefit from a common
Data-as-a-Service (DaaS) and Managed Services infrastructure.
In summary, Bidco believes that Gresham is a highly
complementary business to Alveo, with clear alignment in purpose
and values, and the Acquisition is an exciting opportunity to
expand and enhance the separate solutions and services offered to
both companies' customers and the broader capital markets
industry.
4.
Recommendation
The Gresham Directors, who have been so advised by
Houlihan Lokey as to the financial terms of the Acquisition,
consider the terms of the Acquisition to be fair and reasonable. In
providing its advice to the Gresham Directors, Houlihan Lokey has
taken into account the commercial assessments of the Gresham
Directors. Houlihan Lokey is providing independent financial advice
to the Gresham Directors for the purposes of Rule 3 of the Takeover
Code.
Accordingly, the Gresham Directors intend unanimously
to recommend that Gresham Shareholders vote in favour of the Scheme
at the Court Meeting and in favour of the Special Resolution to be
proposed at the General Meeting (or in the event that the
Acquisition is implemented by way of an Offer, to accept or procure
acceptance of the Offer), as the Gresham Directors who are
interested in Gresham Shares have irrevocably undertaken to do in
respect of their own beneficial holdings (and those of their
connected persons) amounting, in aggregate, to 446,986 Gresham
Shares representing approximately 0.53 per cent. of the ordinary
share capital of Gresham in issue on the Last Practicable Date.
Further details of these irrevocable undertakings, including the
circumstances in which they cease to be binding, are set out in
paragraph 9 below and in Appendix 3 to this Announcement.
5.
Background to and reasons for the Gresham Directors'
recommendation
Whilst evaluating the terms of the Cash Offer,
the Gresham Board has considered in detail the ongoing
opportunities and risks facing Gresham as a small,
standalone listed entity.
The Gresham Board notes the good
progress in Gresham's operational and financial
performance in recent years and, in particular, the discontinuation
of the lower margin legacy IT contracting services business
(announced on 17 November 2023) and the strategic focus on
transforming Gresham into a pure-play SaaS
business.
The Gresham Board remains confident
in the execution of its strategy for Gresham and in
the potential for further value creation for Gresham
Shareholders over the longer term. However, it recognises
that uncertainties and risks exist to the delivery of that strategy
in the short to medium-term, many of which are beyond
Gresham's control. In particular, the Gresham
Board would highlight the current challenging nature
of Gresham's end markets, which are consolidating and
where customers are slower to replace legacy technologies with
modern alternatives, which can impact Gresham's sales
pipeline.
The Gresham Board's stated ambition
to scale Gresham's core software business and become a
£100 million annual recurring revenue business is reliant, not only
on Gresham's ability to successfully compete for
accretive acquisitions but also on significant investment in
Research & Development and Sales & Marketing to
maintain Gresham's competitive position, fully
capitalise on innovations such as Floe and deliver consistently
high levels of organic growth. The Gresham Board notes
that the growth in Clareti Control ARR has slowed in recent months.
Competition remains intense and the Gresham Board
notes that many of Gresham's competitors are often
larger, privately owned, free from the constraints and requirements
of the public markets and backed with substantial financing.
The Gresham Board believes that, if Gresham
cannot effectively fund high levels of organic growth and
participate materially in the expected consolidation of the
financial services data management software market, its competitive
advantage in global financial markets is likely to be impacted over
the medium to long term.
On the basis of a net cash position of £4.8
million as at 31 December 2023, the Cash Offer values
Gresham at 12.9 times adjusted EBITDA and 30.8 times adjusted
cash EBITDA for the year ended 31 December 2023 as estimated by
the Gresham Board and detailed further in paragraph 8
below. Having sought to obtain competitive alternative proposals,
the Gresham Board considers the above multiples to be
attractive.
In addition, the Gresham Board
recognises that the market in Gresham Shares is
relatively illiquid, with average daily volumes traded during the
twelve-month period ended 8 April 2024 being only 107,615
Gresham Shares. This low level of liquidity can make it
challenging for Gresham Shareholders to monetise their
holdings in the market should they so wish.
The Gresham Board believes that the
Cash Offer will provide Gresham Shareholders with the
opportunity to receive an immediate and certain value per
Gresham Share in cash at a fair premium (of 26.94 per cent.
to the closing price of a Gresham Share on 8 April
2024, the Last Practicable Date) that may not otherwise be
available and would, in any event, be subject to the successful
execution of Gresham's strategy and the realisation of
its longer-term growth prospects.
The Gresham Board notes that
Kestrel Partners LLP, which has a representative on the
Gresham Board and is Gresham's largest
shareholder with an interest in approximately 23.85 per cent. of
the issued Gresham Shares, is supportive of the
Acquisition and has given an irrevocable undertaking to Bidco to
vote in favour of the Scheme. The Gresham Board also
notes that Bidco have received irrevocable undertakings and letters
of intent to vote in favour of the Scheme from Gresham
Shareholders, including Kestrel Partners LLP, over, in
aggregate, 45.42 per cent. of the issued Gresham
Shares. This level of shareholder support for the Acquisition
is indicative, in the Gresham Board's opinion, of the
challenges Gresham faces in optimising shareholder
value as a standalone, small cap listed entity.
In summary, taking all the above into account
the Gresham Board believes that the Cash Offer fairly
recognises the medium-term risks and prospects of Gresham
in its current form as a standalone, small cap listed
entity, is in the best interests of Gresham and
that Gresham Shareholders should be given
this opportunity to realise value.
In addition to the financial terms of the
Acquisition, in its evaluation of Bidco as a suitable owner
of Gresham from the perspective of all Gresham
stakeholders, the Gresham Board has also taken
into account Bidco's intentions for the business, management and
employees and other stakeholders of Gresham as set out
in paragraph 14 below.
The Gresham Board acknowledges the
strategic rationale of combining Alveo and Gresham and
notes that Bidco, through Alveo, will be aware of the obligations
that go with being providers of mission critical solutions to
customers regulated capital markets. The Gresham Board
is pleased that Bidco has stated that the Acquisition of
Gresham represents an important step towards building a
differentiated platform of scale in the capital markets tech
ecosystem with the potential for accelerated growth.
The Gresham Board is also pleased
that Bidco attaches great importance to the skills and experience
of Gresham's management and employees and recognises
the important contribution that they have made to the success
of Gresham to date.
The Gresham Board acknowledges
that, following the Effective Date, as part of their detailed
evaluation for optimising the combination of Gresham
and Alveo, Bidco will seek to establish an operating
structure which optimises the resource footprints of both Alveo
and Gresham and which may result in some re-allocation
of employees across functions and/or a reduction in headcount in
certain overlapping functions in Alveo and Gresham.
The Gresham Board notes that such functions
potentially include central corporate and internal support
functions, including Gresham's listed company
functions.
Whilst the Gresham Board regrets
any necessity for headcount reductions, it acknowledges the likely
benefits to Gresham in the next phase of its growth
and of a combination with Alveo, and anticipates ongoing
Gresham employees will be able to benefit from potential new
opportunities within the combined business.
The Gresham Board notes that Bidco
does not have any intention of making material changes to the
conditions of employment of Gresham's management or
employees and will fully safeguard the existing employment rights
of all Gresham employees.
Accordingly, after careful consideration,
the Gresham Board intends unanimously to recommend
that Gresham Shareholders vote in favour of the Scheme
at the Court Meeting and the Special Resolution to be proposed at
the General Meeting.
6.
Information relating to Bidco and STG
Bidco is a private limited company incorporated in
England and Wales on 19 December 2022 and is owned indirectly by
funds managed or advised by STG. Bidco was formed for the purposes
of the purchase of Alveo in January 2023 and is the holding company
of Alveo.
STG is a strategic private equity
firm with over 20 years' experience investing in enterprise
software and data-centric companies. STG's portfolio is currently
comprised of approximately 29 international technology companies,
which collectively have more than 13,000 employees. Today STG has
approximately USD 10 billion under management.
7.
Information relating to Gresham
Gresham Technologies plc is a bespoke software company
specialising in providing real-time solutions for data integrity
and control, banking integration, payments and cash management.
Gresham's award-winning Clareti software platform is highly
flexible and scalable, available on-site or in the cloud, and
designed to address its customers' most challenging financial
control, risk management, data governance and regulatory compliance
problems.
Gresham has approximately 270 customers across 30
countries, including some of the world's largest financial
institutions and corporates.
Gresham was established in 1972 and the Gresham Shares
were admitted to trading on the Main Market of the London Stock
Exchange in 1995. Gresham is headquartered in the City of London
and services its customers from offices located in the United
Kingdom, Europe, North America and Asia Pacific.
For its financial year ended 31 December 2022, Gresham
reported revenues of £48.7 million (2021: £37.0 million), adjusted
EBITDA of £10.3 million (2021: £7.2 million) and cash EBITDA of
£4.4 million (2021: £2.5 million).
Gresham will publish its annual
report and audited accounts for the year ended 31 December 2023 on
or prior to 30 April 2024.
8.
Gresham profit estimates and current trading
8.1
Gresham
profit
estimates
Background
On 11 January 2024, Gresham announced a trading
update (the "Trading
Announcement") for FY2023 which included a statement that
Gresham expected to report Adjusted EBITDA and Cash EBITDA for
FY2023 at least in line with then current market expectations.
Gresham also noted in the Trading Announcement: that
"Adjusted EBITDA" was defined as earnings before interest,
taxation, depreciation and amortisation for continuing operations,
adjusted to add back share-based payment charges and exceptional
items; that "Cash EBITDA" was defined as Adjusted EBITDA less
capitalised development spend and IFRS 16 lease related cash
payments; and that the then market expectations for FY2023 were for
Adjusted EBITDA of £11.0 million and Cash EBITDA of £4.6
million.
The above statements constitute ordinary course
profit estimates for Gresham within the meaning of Note 2 of Rule
28.1 of the Takeover Code (the "Gresham Profit Estimates").
Gresham
Directors'
confirmation
The Gresham Directors have considered the Gresham
Profit Estimates and confirm that the Gresham Profit Estimates
remain valid as at the date of this Announcement. The Gresham
Directors confirm that the Gresham Profit Estimates were properly
compiled in the manner stated below and that the basis of
accounting used is consistent with Gresham's current accounting
policies, which are in accordance with IFRS.
Following discussions with Gresham's auditors during
the ongoing FY2023 year end audit process, the Gresham Board is
considering adjusting its approach to the recognition of software
revenues from contracts where software is deployed "on premise",
i.e. not hosted by the Company, from an annual to a monthly basis.
Whilst no final decision has been taken, the Gresham Board notes
that if such an adjustment were implemented with regards FY2023, it
would have only an immaterial impact on Gresham's revenues and on
the Gresham Profit Estimates and would have no impact on cashflows
whatsoever.
Basis of
preparation
The Gresham Profit Estimates were based on the
unaudited management accounts of Gresham for FY2023 and were
prepared in accordance with the Alternative Performance Measure
guidelines used by the Gresham Directors to measure business
performance. The Gresham Profit Estimates are not based on any
assumptions.
8.2
Gresham
current
trading
Trading in the period since the release of the
Trading Announcement has been in line with the Gresham Directors'
expectations.
Following the discontinuation of its legacy
sub-contracting business with effect from January 2024, Gresham has
been focused on the provision of its higher margin Clareti Control
solutions. The Gresham Group started the current year with over £38
million of revenue under contract, and has signed several new
Clareti Control contracts since then. Gresham's current pipeline of
opportunities provides adequate coverage for the remainder of the
year. As previously highlighted, the Gresham Directors note that
the challenging macro environment and tighter customer budgets
continue to impact the sales cycle and business planning.
9.
Irrevocable Undertakings
and Letters of Intent
In total, including the irrevocable undertakings from
the Gresham Directors described below, Bidco has received
irrevocable undertakings to vote (or, where applicable, procure
voting) in favour of the Scheme at the Court Meeting and the
Special Resolution to be proposed at the General Meeting (or in the
event that the Acquisition is implemented by an Offer, to accept or
procure acceptance of such Offer) in respect of, in aggregate,
24,772,833 Gresham Shares, representing approximately 29.54 per
cent. of the existing issued ordinary share capital of Gresham as
at the Last Practicable Date.
The Gresham Directors have irrevocably undertaken to
vote (or, where applicable, procure voting) in favour of the Scheme
at the Court Meeting and the Special Resolution to be proposed at
the General Meeting (or in the event that the Acquisition is
implemented by an Offer, to accept or procure acceptance of such
Offer) in respect of their own beneficial holdings (and those of
their connected persons) amounting, in aggregate, to 446,986
Gresham Shares representing approximately 0.53 per cent. of the
existing ordinary share capital of Gresham as at the Last
Practicable Date.
In addition to the irrevocable undertakings from
Gresham Directors described above, Bidco has also received
irrevocable undertakings to vote (or, where applicable, procure
voting) in favour of the Scheme at the Court Meeting and the
Special Resolution to be proposed at the General Meeting (or in the
event that the Acquisition is implemented by an Offer, to accept or
procure acceptance of such Offer) from Kestrel Partners LLP in
respect of 20,004,573 Gresham Shares (the "Kestrel Irrevocable") and Herald
Investment Trust plc in respect of 4,321,274 Gresham Shares (the
"Herald Irrevocable"),
representing in aggregate approximately 29.00 per cent. of the
existing issued ordinary share capital of Gresham as at as at the
Last Practicable Date.
These irrevocable undertakings cease to be binding,
inter alia, on the earlier of the Long-Stop Date and the date on
which the Acquisition (whether implemented by way of a Scheme or an
Offer) is withdrawn or lapses in accordance with its terms, save
where such lapse or withdrawal is as a result of Bidco exercising
its right to implement the Acquisition by way of an Offer rather
than by way of a Scheme or vice versa in accordance with the
Takeover Code. The Kestrel Irrevocable will also cease to be
binding if any third party announces a firm intention to make an
offer in accordance with Rule 2.7 of the Takeover Code for all of
the issued and to be issued ordinary share capital of Gresham which
puts a value on each Gresham Share of at least 188 pence, and by no
later than 5:00pm on the fifth business day after the date on which
such an offer is made, the consideration per Gresham Share offered
by Bidco is not increased by Bidco such that Bidco's offer is of a
value equal to or exceeding such higher competing offer made by the
relevant third party. The Herald Irrevocable will also cease to be
binding if any third party announces a firm intention to make an
offer in accordance with Rule 2.7 of the Takeover Code for all of
the issued and to be issued ordinary share capital of Gresham which
puts a value on each Gresham Share of at least 188 pence, and by no
later than 5:00pm on the fifth business day after the date on which
such an offer is made, the consideration per Gresham Share offered
by Bidco is not increased by Bidco such that Bidco's offer is of a
value equal to or exceeding 10% above such higher competing offer
made by the relevant third party.
Bidco has also received non-binding letters of intent
from Schroder Investment Management Limited, Amati Global Investors
Limited and J O Hambro Capital Management Limited to vote in favour
of the Scheme at the Court Meeting and the Special Resolution to be
proposed at the General Meeting (or in the event that the
Acquisition is implemented by an Offer, to accept or procure
acceptance of such Offer) in respect of, in aggregate, 13,325,000
Gresham Shares, representing approximately 15.89 per cent. of the
existing issued ordinary share capital of Gresham as at the Last
Practicable Date.
Therefore, Bidco has received irrevocable undertakings
and letters of intent in respect of, in aggregate, 38,097,833
Gresham Shares, representing approximately 45.42 per cent. of the
existing issued ordinary share capital of Gresham as at the Last
Practicable Date.
Further details of these irrevocable undertakings
(including the circumstances in which they cease to be binding) are
set out in Appendix 3 to this Announcement.
10.
Financing of the Acquisition
The cash consideration payable by Bidco pursuant to
the Acquisition will be financed through a combination of equity
and debt financing. The equity financing will be provided by the
STG Funds and the remaining funding is to be provided by debt
financing available to Bidco.
William Blair, as financial adviser to Bidco, is
satisfied that sufficient financial resources are available to
Bidco to enable it to satisfy in full the cash consideration
payable to Gresham Shareholders under the terms of the
Acquisition.
Further information on the financing of the
Acquisition will be set out in the Scheme Document (or, if the
Acquisition is implemented by way of an Offer, the Offer
Document).
11.
Offer-related Arrangements
11.1
Confidentiality Agreement
STG and Gresham have entered into a mutual
confidentiality agreement in relation to the Acquisition dated 23
January 2024 (the "Confidentiality
Agreement"), pursuant to which STG has undertaken, amongst
other things, to: (i) keep confidential information relating to
Gresham and the Acquisition and not to disclose it to third parties
(other than certain permitted parties) unless required by a court
of competent jurisdiction or by any requirement or request of any
competent judicial, government or regulatory body or in order to
comply with the FCA's Listing Rules, Disclosure Guidance and
Transparency Rules, the Market Abuse Regulation or any other laws
or regulations or the provisions of the Takeover Code; and (ii) use
the confidential information only in connection with the
Acquisition. These confidentiality obligations will remain in force
until the earlier of completion of the Acquisition and 12 months
from the date on which Gresham publicly releases the announcement
of its audited results for the financial year ended 31 December
2023. The Confidentiality Agreement contains standstill provisions
which restricted STG and its connected persons from acquiring or
offering to acquire interests in securities of Gresham; those
restrictions ceased to apply upon the making of this
Announcement.
12.
Structure of and Conditions to the Acquisition
Structure of the
Acquisition
It is intended that the Acquisition will be
implemented by way of a Court-sanctioned scheme of arrangement
between Gresham and the Scheme Shareholders, under Part 26 of the
Companies Act 2006 (although Bidco reserves the right to implement
the Acquisition by way of an Offer, subject to the consent of the
Panel). The procedure involves, among other things, an application
by Gresham to the Court to sanction the Scheme.
The purpose of the Scheme is to provide for Bidco to
become the owner of the entire issued and to be issued ordinary
share capital of Gresham. This is to be achieved by the transfer of
Gresham Shares to Bidco in consideration for which Gresham
Shareholders will receive the cash consideration due under the Cash
Offer, to be effected pursuant to the Scheme. The transfer to Bidco
of the Gresham Shares is intended to result in Gresham becoming a
wholly-owned subsidiary of Bidco.
Conditions to the
Acquisition
The Scheme and Acquisition will be subject to the
Conditions and certain further terms referred to in Appendix 1 to
this Announcement and to be set out in the Scheme Document when
issued. In particular, the Scheme will only become Effective if,
among other things, the following events occur on or before 11.59pm
(London time) on the Long-Stop Date:
●
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a resolution to approve the Scheme is passed by a
majority in number of Scheme Shareholders present and voting (and
entitled to vote) at the Court Meeting, either in person or by
proxy, representing 75 per cent. or more in value of the Gresham
Shares voted by those Scheme Shareholders;
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●
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the Special Resolution passed by the requisite
majority of Gresham Shareholders at the General Meeting;
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●
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following the Court Meeting and General Meeting, the
Scheme is sanctioned by the Court (without modification, or with
modification on terms agreed by Bidco and Gresham); and
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●
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following such sanction by the Court, a copy of the
Scheme Court Order is delivered to the Registrar of Companies.
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Additionally, the Scheme will lapse if, amongst other
things:
●
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the Court Meeting and General Meeting are not held on
or before the 22nd day after the expected date of such meetings,
which will be set out in the Scheme Document in due course (or such
later date as may be agreed by Bidco and Gresham);
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●
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the Scheme Court Hearing is not held on or before the
22nd day after the expected date of such hearing, which will be set
out in the Scheme Document in due course (or such later date as may
be agreed by Bidco and Gresham); or
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●
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the Scheme does not become Effective on or before
11.59pm (London time) on the Long-Stop Date (or such later date as
may be agreed by Bidco and Gresham with, if required, the consent
of the Panel and, if required, with the consent of the Court).
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Bidco may only invoke a Condition so as to cause the
Acquisition not to proceed, lapse or to be withdrawn with the
consent of the Panel. Certain Conditions are not subject to this
requirement. Further details are set out in Parts A and B of
Appendix 1 to this Announcement. Once the necessary approvals from
Gresham Shareholders have been obtained and the other Conditions
have been satisfied or (where applicable) waived and the Scheme has
been approved by the Court, the Scheme will become Effective upon
delivery of the Scheme Court Order to the Registrar of Companies.
Subject to, amongst other things, the satisfaction of the
Conditions, the Scheme is expected to become Effective during the
third quarter of 2024.
Upon the Scheme becoming Effective: (i) it will be
binding on all Scheme Shareholders, irrespective of whether or not
they attended or voted at the Court Meeting or the General Meeting
(and if they attended and voted, whether or not they voted in
favour); and (ii) share certificates in respect of Gresham Shares
will cease to be valid and entitlements to Gresham Shares held
within the CREST system will be cancelled.
Any Gresham Shares issued before the Scheme Record
Time will be subject to the terms of the Scheme. The Special
Resolution to be proposed at the General Meeting will, amongst
other matters, provide that the Articles be amended to incorporate
provisions requiring any Gresham Shares issued after the Scheme
Record Time (other than to Bidco and/or their nominees) to be
automatically transferred to Bidco on the same terms as the
Acquisition (other than terms as to timings and formalities). The
provisions of the Articles (as amended) will avoid any person
(other than Bidco and their nominees) holding shares in the capital
of Gresham after the Effective Date.
If the Scheme does not become Effective on or before
11.59pm (London time) on the Long-Stop Date, it will lapse and the
Acquisition will not proceed (unless Bidco and Gresham otherwise
agree and the Panel otherwise consents).
The Scheme Document will include full details of the
Scheme, together with notices of the Court Meeting and the General
Meeting. The Scheme Document will also contain the expected
timetable for the Acquisition and will specify the necessary
actions to be taken by Gresham Shareholders. It is expected that
the Scheme Document, together with the Forms of Proxy and the Form
of Election, will be posted to Gresham Shareholders and, for
information only, to persons with information rights and to holders
of options and awards granted under the Gresham Share Plans within
28 days of this Announcement (or such later time as Bidco and
Gresham and the Panel may agree).
13.
Disclosure of Interests in Gresham
Save as disclosed in this Announcement, as at close of
business on 8 April 2024 (being the Last Practicable Date) neither
Bidco, nor any of its directors, nor, so far as Bidco is aware, any
person acting in concert (within the meaning of the Takeover Code)
with Bidco has:
a)
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any interest in, or right to subscribe for, any
relevant securities of Gresham;
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b)
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any short positions in respect of relevant Gresham
Shares (whether conditional or absolute and whether in the money or
otherwise), including any short position under a derivative, any
agreement to sell or any delivery obligation or right to require
another person to purchase or take delivery;
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c)
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any dealing arrangement of the kind referred to in
Note 11 on the definition of acting in concert in the Takeover Code
in relation to Gresham Shares or in relation to any securities
convertible or exchangeable into Gresham Shares; nor
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d)
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borrowed or lent any Gresham Shares (including, for
these purposes, any financial collateral arrangements of the kind
referred to in Note 4 on Rule 4.6 of the Takeover Code) save for
any borrowed shares which have been either on-lent or resold.
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'Interests in securities' for these purposes arise, in
summary, when a person has long economic exposure, whether absolute
or conditional, to changes in the price of securities (and a person
who only has a short position in securities is not treated as
interested in those securities). In particular, a person will be
treated as having an 'interest' by virtue of the ownership, voting
rights or control of securities, or by virtue of any agreement to
purchase, option in respect of, or derivative referenced to
securities.
14.
Strategic plans with regard to the business, directors, management,
employees, pensions and locations of the Gresham Group
14.1 Strategic
plans for Gresham
As set out in paragraph 5 above, Bidco believes that
the Acquisition has a compelling strategic rationale and Bidco
plans to integrate Gresham's business with Alveo's following the
Effective Date.
Prior to this Announcement, consistent with market
practice, Bidco has been granted customary access to Gresham's
senior management and company information for the purposes of
acquisition-level business due diligence. However, Bidco has not
yet had access to sufficiently detailed operational information to
formulate a detailed strategy for its plans to integrate Gresham
with Alveo.
Following the Acquisition becoming Effective, Bidco,
in conjunction with Alveo, intends to work with Gresham's senior
management to undertake a more detailed evaluation of Gresham and
its operations and how to optimise the combination of the two
businesses (the "Evaluation"). Whilst the
parameters of the Evaluation have not yet been finalised, it is
expected to include a review of Gresham's customers and products,
the roles and responsibilities of its employees, Gresham's
operating locations and its management incentivisation
arrangements. Bidco expects that the Evaluation will be completed
within approximately 6 months from the Effective Date. The purpose
of the Evaluation will be to validate the assumptions underlying
Bidco's investment thesis for the combination of Gresham and Alveo,
which has been developed through the management meetings held as
part of its acquisition-level business due diligence review.
14.2
Headquarters, locations, fixed assets and research and
development
Bidco plans to integrate Gresham's business with
Alveo's following the Effective Date.
This is expected to involve, amongst other things, a
rationalisation of Gresham's physical operating locations
(including the consolidation of Alveo and Gresham's headquarters
into, and headquarter functions within, a single office location),
by way of non-renewal of leases upon expiry, lease exits and / or
exploring the possibility of sub-letting, with the objective of
reducing rental and lease expenses over time. As part of the
Evaluation, Bidco will review and consider the most appropriate
timing and strategy for the consolidation of Gresham's operating
locations. Bidco expects to rationalise a minority of Gresham's
locations internationally, and may consider, over time, a
combination of office locations with Alveo in the UK where this can
be achieved without impacting the culture and operations of the
business, and in line with lease renewal dates. Gresham does not
have significant fixed assets (other than premises) and Bidco
envisages no material redeployment of the fixed assets of
Gresham.
As part of the Evaluation, Bidco intends to review
both Alveo and Gresham's research and development functions in
order to invest in the products of both companies, to support more
effectively Alveo and Gresham's (the "Combined Group") customers globally.
Bidco values highly the long-standing customer relationships of
both companies and is deeply invested in ensuring the success of
these customers.
14.3 Employees
and Management
Bidco attaches great importance to the skills and
experience of Gresham's management and employees and recognises the
important contribution that the management team and employees of
Gresham have made to the success of Gresham. As part of the
Evaluation, Bidco intends to discuss with, and further draw upon,
Gresham management's experience to gain a full understanding of the
organisation, and the roles and responsibilities of employees
within the business in order to ensure a successful combination
with Alveo.
Bidco does not have any intention of making material
changes to the conditions of employment of the Gresham's employees
or management. Following the Effective Date, Bidco intends to
review the operations of Gresham. This will include an assessment
of any overlap of roles currently undertaken by Gresham and Alveo
personnel. Bidco intends to retain the best talent across the
Combined Group to deliver its enhanced growth strategy. Bidco
therefore cannot be certain what impact there will be on the
employment of, and the balance of skills and functions of the
management and employees of the Combined Group. The finalisation
and implementation of workforce integration will be subject to
detailed and comprehensive planning as part of the Evaluation
referred to above. This process is expected to result in some
headcount reductions and / or optimisation, which may be
substantial in the context of the Combined Group. Bidco confirms
that it intends to fully safeguard the existing statutory
employment rights of all of Gresham's management and employees.
In addition, certain corporate, administrative and
support functions, related to Gresham's status as a publicly traded
company, may no longer be required on a standalone basis, or else
may be reduced in scope.
It is intended that, upon the Acquisition becoming
Effective, each of Gresham's Non-Executive Directors shall resign
from his office as a director of Gresham.
14.4 Existing
rights and pensions
As noted above, Bidco intends to fully safeguard the
existing employment rights of the management and employees of
Gresham, including in relation to pensions, in accordance with
applicable law.
Gresham makes contributions to its workplace pension
plan operated by Aviva on behalf of qualifying employees, and Bidco
intends that these arrangements will remain in place. Bidco does
not intend to make any material changes to this pension plan.
No member of the Gresham Group participates in a
defined benefit pension scheme.
14.5
Incentivisation arrangements
Following the Effective Date, Bidco intends to review
the management, governance and incentive structure of Gresham.
Bidco has not entered into, and has not had
discussions on the terms of, any form of incentivisation
arrangement with members of Gresham's management. Any discussions
with Gresham's management about the terms, content, scope or form
of such incentivisation arrangements will not take place until
after the Effective Date.
Bidco may have such discussions for certain members of
the Gresham management team following the Effective Date in order
that it may put in place incentive arrangements for certain members
of the Gresham management team following completion of the
Acquisition to achieve short-term and long-term objectives,
commensurate with the position, relative contribution of the
individual to the overall company, compensation history and private
company norms.
14.6 Trading
facilities
Gresham Shares are currently listed on the Official
List and admitted to trading on the London Stock Exchange. As set
out in paragraph 18 below, it is intended that on or shortly after
the Effective Date a request will be made to the London Stock
Exchange to cancel trading in Gresham Shares on the Main Market and
to de-list Gresham from the Official List, following which Gresham
would be re-registered as a private limited company.
None of the statements in this paragraph 14 are
"post-offer undertakings" for the purposes of Rule 19.5 of the
Takeover Code.
15.
Gresham Share Plans
Participants in the Gresham Share Plans and in the
Invested Bonus Share Plan will be contacted regarding the effect of
the Acquisition on their rights under the Gresham Share Plans and,
in the case of the Gresham Share Plans an appropriate proposal will
be made to such participants to the extent required pursuant to
Rule 15 of the Takeover Code in due course. Further details of the
impact of the Scheme on each of the Gresham Share Plans and the
Invested Bonus Share Plan and the proposals shall be included in
the Scheme Document (or, if the Acquisition is implemented by way
of an Offer, the Offer Document).
16.
Opening Position Disclosure
In connection with the Acquisition, Bidco will make a
public Opening Position Disclosure setting out details of its
interests or short positions in, or rights to subscribe for, any
relevant securities of Gresham by no later than 12 noon on 23 April
2024.
Bidco's Opening Position Disclosure will include
details of any interests or short positions in, or rights to
subscribe for, any relevant securities of Gresham held by all
persons acting in concert with Bidco.
17.
The Scheme
It is intended that the Acquisition will be effected
by means of the Scheme between Gresham and the Scheme Shareholders
(although Bidco reserves the right to implement the Acquisition by
way of an Offer, subject to the consent of the Panel).
The purpose of the Scheme is to provide for Bidco to
become owner of the entire issued and to be issued ordinary share
capital of Gresham. This is to be achieved by the transfer of the
Scheme Shares held by Scheme Shareholders to Bidco, in
consideration for which the Scheme Shareholders will receive the
cash consideration on the basis set out in paragraph 2 of this
Announcement.
The Acquisition shall be subject to the Conditions and
further terms set out below and in Appendix 1 to this Announcement
and to full terms and conditions to be set out in the Scheme
Document. The Scheme shall only become Effective, if, among other
things, the following events occur on or before 11.59 p.m. on the
Long-Stop Date (or such later date as Bidco and Gresham may, with
the consent of the Panel, agree and, if required, as the Court may
approve):
a)
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the approval of the Scheme by a majority in number of
Scheme Shareholders present and voting (and entitled to vote) at
the Court Meeting, either in person or by proxy and who represent
at least 75 per cent. of the votes attached to the Scheme Shares
cast by those Scheme Shareholders (or the relevant class or classes
thereof, if applicable);
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b)
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the Special Resolution being duly passed by Gresham
Shareholders representing at least 75 per cent. of the votes cast
at the General Meeting (either in person or by proxy);
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c)
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following the Court Meeting and General Meeting, the
sanction of the Scheme by the Court (with or without modification
but subject to any modification being on terms acceptable to
Gresham and Bidco); and
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d)
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following such sanction by the Court, the delivery of
a copy of the Scheme Court Order to the Registrar of Companies for
registration.
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The Scheme shall lapse (under the authority of Rule
13.5(b) of the Takeover Code) if:
●
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the Court Meeting and the General Meeting are not
held by the 22nd day after the expected date of
such meetings to be set out in the Scheme Document in due course
(or such later date as may be agreed between Bidco and
Gresham);
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●
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the Scheme Court Hearing is not held by the
22nd day after the expected date of such hearing to
be set out in the Scheme Document in due course (or such later date
as may be agreed between Bidco and Gresham); or
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●
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the Scheme does not become effective by no later than
11.59 p.m. on the Long-Stop Date (or such later date as may be
agreed between Bidco and Gresham, with the consent of the Panel,
and (if required) as the Court may allow),
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provided, however, that the deadlines for the timing
of the Court Meeting, the General Meeting and the Scheme Court
Hearing as set out above may be waived by Bidco, and the deadline
for the Scheme to become effective may be extended by agreement
between Gresham and Bidco (with the consent of the Panel, and (if
required) as the Court may allow).
As set out in Appendix 1 to this Announcement, the
Acquisition is conditional, amongst other things, on the receipt or
waiver of foreign investment clearance in the United Kingdom, the
United States, Australia and Luxembourg.
The Scheme Document will include full details of the
Scheme. It is expected that the Scheme Document, containing further
information about the Acquisition and notices of the Meetings,
together with the associated forms of proxy, will be despatched to
Gresham Shareholders as soon as reasonably practicable and, in any
event, within 28 days of this Announcement (or such later time as
Bidco, Gresham and the Panel may agree) and the Meetings are
expected to be held shortly thereafter. An expected timetable of
key events relating to the Acquisition will be provided in the
Scheme Document.
If any Condition in paragraph 2 of Appendix 1 to this
Announcement is not capable of being satisfied by the date
specified therein, Bidco shall make an announcement through a
Regulatory Information Service as soon as practicable and, in any
event, by not later than 7.00 a.m. (London time) on the Business
Day following the date so specified, stating whether Bidco has
invoked that Condition, (where applicable) waived that Condition
or, with the agreement of Gresham, specified a new date by which
that Condition must be satisfied.
Once the necessary approvals from Gresham Shareholders
have been obtained and the other Conditions have been satisfied or
(where applicable) waived and the Scheme has been approved by the
Court, the Scheme will become Effective upon delivery of the Scheme
Court Order to the Registrar of Companies. Subject to, amongst
other things, the satisfaction of the Conditions, the Scheme is
expected to become Effective during the third quarter of 2024. If
the Scheme does not become Effective on or before the Long-Stop
Date, it will lapse and the Acquisition will not proceed (unless
Bidco and Gresham otherwise agree, with the consent of the
Panel).
Upon the Scheme becoming Effective: (i) it will be
binding on all Gresham Shareholders, irrespective of whether or not
they attended or voted at the Meetings (and if they attended and
voted, whether or not they voted in favour); and (ii) share
certificates in respect of Gresham Shares will cease to be valid
and entitlements to Gresham Shares held within the CREST system
will be cancelled. The consideration for the Acquisition (pursuant
to the Cash Offer) will be despatched to Scheme Shareholders no
later than 14 days after the Effective Date in accordance with the
requirements of the Takeover Code.
Any Gresham Shares issued before the Scheme Record
Time will be subject to the terms of the Scheme and any Gresham
Shares issued following the Scheme Record Time will be transferred
to Bidco (or as it may direct) in exchange for the same
consideration as would be due under the Scheme (in each case,
subject to the Scheme becoming Effective in accordance with its
terms). The Special Resolution to be proposed at the General
Meeting will, amongst other matters, provide that the Articles be
amended to incorporate provisions requiring any Gresham Shares
issued after the Scheme Record Time (other than to Bidco and/or
their nominees) to be automatically transferred to Bidco on the
same terms as the Acquisition (other than terms as to timings and
formalities). The provisions of the Articles (as amended) will
avoid any person (other than Bidco and their nominees) holding
shares in the capital of Gresham after the Effective Date.
Bidco reserves the right to elect to implement the
Acquisition by way of an Offer as an alternative to the Scheme
(subject to the consent of the Panel). In such event, the
Acquisition will be implemented on substantially the same terms, so
far as applicable, as those which will apply to the Scheme, subject
to appropriate amendments to reflect, among other things, the
change in method of effecting the Acquisition (including, without
limitation: (i) the inclusion of an acceptance condition set at 90
per cent. of the Gresham Shares to which such Offer relates (or
such other percentage as Bidco may, subject to the rules of the
Takeover Code and with the consent of the Panel, decide); and (ii)
those required by, or deemed appropriate by, Bidco under applicable
law). Further, if sufficient acceptances of such Offer are received
and/or sufficient Gresham Shares are otherwise acquired, it is the
intention of Bidco to apply the provisions of the Companies Act
2006 to acquire compulsorily any outstanding Gresham Shares to
which such Offer relates.
The Scheme will be governed by English law and will be
subject to the jurisdiction of the Court. The Scheme will be
subject to the applicable requirements of the Takeover Code, the
Panel, the London Stock Exchange, the Financial Conduct Authority
and the Registrar of Companies.
18.
Cancellation of trading and re-registration
Gresham Shares are currently admitted to trading on
the Main Market of the London Stock Exchange. It is intended that,
shortly before the Effective Date, an application will be made to
the London Stock Exchange for the cancellation of trading in
Gresham Shares on the London Stock Exchange's Main Market for
listed securities and to the Financial Conduct Authority for the
cancellation of the listing of Gresham Shares on the Official List,
in each case to take effect on or shortly after the Effective
Date.
It is expected that the last day of dealings in
Gresham Shares on the Main Market of the London Stock Exchange will
be the date of the Scheme Court Hearing and that no transfers will
be registered after 6.00 p.m. (London time) on that date.
On the Effective Date, share certificates in respect
of Gresham Shares will cease to be valid and entitlements to
Gresham Shares held within the CREST system will be cancelled.
It is also proposed that, on or shortly after the
Effective Date and after the Gresham Shares are delisted, Gresham
will be re-registered as a private limited company under the
relevant provisions of the Companies Act 2006. A resolution to
approve the re-registration will be proposed at the General
Meeting.
19.
Consents
Each of William Blair, Houlihan Lokey and Singer
Capital Markets have given and not withdrawn their consent to the
publication of this Announcement with the inclusion herein of the
references to their names and (where applicable) advice in the form
and context in which they appear.
20.
Overseas Shareholders
The availability of the Acquisition to Gresham
Shareholders who are not resident in and citizens of the United
Kingdom may be affected by the laws and/or regulations of the
relevant jurisdiction in which they are located or in which they
are citizens. Therefore, any persons who are subject to the laws
and/or regulations of any jurisdiction other than the United
Kingdom should inform themselves about and observe any applicable
legal or regulatory requirements in their jurisdiction. Further
details in relation to Overseas Shareholders are set out below in
this Announcement and will be set out in the Scheme Document (or,
if the Acquisition is implemented by way of an Offer, the Offer
Document). If you are in any doubt you should consult your
professional adviser in the relevant jurisdiction without
delay.
21.
Documents available for inspection
Copies of the following documents will by no later
than 12 noon on the first Business Day following the date of this
Announcement be published on Gresham's website at https://www.greshamtech.com/invest-in-us, in each case
subject to certain restrictions relating to persons resident in
Restricted Jurisdictions:
●
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this Announcement;
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●
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the Confidentiality Agreement;
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●
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the irrevocable undertakings and letters of intent
listed in Appendix 3 to this Announcement
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●
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the documents entered into for the financing of the
Acquisition referred to in paragraph 10 above; and
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●
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the consent letters from each of the advisers
referred to in paragraph 19 above.
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The contents of the website referred to in this
Announcement are not incorporated into and do not form part of this
Announcement.
22.
General
The Acquisition will be made on the terms and subject
to the Conditions set out in Appendix 1 to this Announcement, and
to the full terms and conditions to be set out in the Scheme
Document. The formal Scheme Document comprising the Cash Offer to
Gresham Shareholders will be sent to Gresham Shareholders within 28
days of this Announcement (or on such later date as may be agreed
between Bidco and Gresham with the consent of the Panel). The
sources and bases of calculation of certain information contained
in this Announcement are set out in Appendix 2 to this
Announcement. Details of irrevocable undertakings and letters of
intent received by Bidco are set out in Appendix 3 to this
Announcement. Certain terms used in this Announcement are defined
in Appendix 4 to this Announcement.
Enquiries:
Bidco
Marc Bala / Ishan Manaktala / Ben Livingston / Kial Kaiser
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Enquiries via
William Blair
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William Blair International,
Limited
(Financial Adviser to STG and
Bidco)
Dominic Emery / Hanan Lee / Jakub Lenart / Robert von Martens
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+44 (0) 20 7868 4440
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Gresham
Ian Manocha / Tom Mullan
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+44 (0) 20 7653 0200
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Houlihan Lokey
Advisory Limited
(Financial Adviser and Rule 3
Adviser to Gresham)
Mark Fisher / Tim Richardson / Elliot Reader / Jack Durston
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+44 (0) 20 7839 3355
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Singer Capital
Markets Advisory LLP
(Corporate Broker to
Gresham)
Shaun Dobson / Jen Boorer
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+44 (0) 20 7496 3000
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Alma
Strategic Communications
(PR
Adviser to Gresham)
Josh Royston / Hilary Buchanan / Will
Ellis Hancock
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+44 (0) 20 3405 0205
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Paul Hastings (Europe) LLP is acting as legal adviser to STG and
Bidco.
Taylor Wessing LLP is acting as legal adviser to
Gresham.
Important notices relating to financial advisers
William Blair
International, Limited ("William
Blair"), which is authorised and regulated by the Financial
Conduct Authority in the United Kingdom, is acting exclusively for
STG and Bidco and no one else in connection with the subject matter
of this Announcement and will not be responsible to anyone other
than STG and Bidco for providing the protections afforded to the
clients of William Blair, or for providing advice in connection
with the subject matter of this Announcement. Neither William Blair
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 William Blair in connection
with the subject matter of this Announcement, any statement
contained herein or otherwise.
Houlihan Lokey
Advisory Limited ("Houlihan
Lokey"), which is authorised and regulated in the United
Kingdom by the Financial Conduct Authority, is acting exclusively
as financial adviser and Rule 3 adviser to Gresham and no one else
in connection with the matters set out in this Announcement and
will not be responsible to anyone other than Gresham for providing
the protections afforded to clients of Houlihan Lokey or for
providing advice in relation to matters referred to in this
Announcement. Neither Houlihan Lokey 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 Houlihan Lokey in connection with this
Announcement, any statement contained herein or
otherwise.
Singer Capital
Markets Advisory LLP ("Singer Capital Markets"), which is authorised and regulated in the
United Kingdom by the Financial Conduct Authority, is acting
exclusively for Gresham and no-one else in connection with the
subject matter of this Announcement and will not be responsible to
anyone other than Gresham for providing the protections afforded to
clients of Singer Capital Markets or for providing advice in
relation to the subject matter of this Announcement or any other
matter referred to in this Announcement.
Each of William
Blair, Houlihan Lokey and
Singer Capital Markets have given and not withdrawn their consent to
the publication of this Announcement with the inclusion herein of
the references to their respective names and (where applicable)
advice in the form and context in which they appear.
Further information
This Announcement is
for information purposes only and is not intended to, and does not,
constitute or form part of any offer or inducement to sell or an
invitation to purchase, otherwise acquire, subscribe for, sell or
otherwise dispose of, any securities or the solicitation of an
offer to buy any securities, any vote or approval in any
jurisdiction pursuant to the Acquisition or otherwise. The
Acquisition will be implemented solely pursuant to the terms of the
Scheme Document (or, if the Acquisition is implemented by way of an
Offer, the Offer Document), which will contain the full terms and
conditions of the Acquisition, including details of what action is
required from Gresham Shareholders in respect of the Acquisition.
Any decision in respect of, or other response to, the Acquisition
should be made only on the basis of the information in the Scheme
Document (or, if the Acquisition is implemented by way of an Offer,
the Offer Document).
Gresham and Bidco
shall prepare the Scheme Document (or, if the Acquisition is
implemented by way of an Offer, the Offer Document) to be
distributed to Gresham Shareholders. Gresham and Bidco urge Gresham
Shareholders to read the Scheme Document in its entirety (or, if
the Acquisition is implemented by way of an Offer, the Offer
Document) when it becomes available because it will contain
important information relating to the Acquisition including details
of how to vote in respect of the Scheme.
This Announcement
does not constitute a prospectus or prospectus equivalent
document.
Bidco reserves the
right to elect to implement the Acquisition by way of an Offer as
an alternative to the Scheme (subject to the Panel's consent). In
such event, the Acquisition will be implemented on substantially
the same terms, so far as applicable, as those which will apply to
the Scheme, subject to appropriate amendments to reflect, among
other things, the change in method of effecting the Acquisition
(including, without limitation: (i) the inclusion of an acceptance
condition set at 90 per cent. of the Gresham Shares to which such
Offer relates (or such other percentage as Bidco may, subject to
the rules of the Takeover Code and with the consent of the Panel,
decide); and (ii) those required by, or deemed appropriate by,
Bidco under applicable law). Further, if sufficient acceptances of
such Offer are received and/or sufficient Gresham Shares are
otherwise acquired, it is the intention of Bidco to apply the
provisions of Chapter 3 of Part 28 of the Companies Act 2006 to
acquire compulsorily any outstanding Gresham Shares to which such
Offer relates.
If you are in any doubt about the contents of this
Announcement or the action you should take, you are recommended to
seek your own independent financial advice immediately from your
stockbroker, bank manager, solicitor, accountant or independent
financial adviser duly authorised under the Financial Services and
Markets Act 2000 (as amended) if you are resident in the United
Kingdom or, if not, from another appropriately authorised
independent financial adviser.
Overseas Shareholders
This Announcement
has been prepared in accordance with and for the purpose of
complying with the laws of England and Wales, the Takeover Code,
the Market Abuse Regulation and the Disclosure Guidance and
Transparency Rules and information disclosed may not be the same as
that which would have been disclosed if this Announcement had been
prepared in accordance with the laws of jurisdictions outside
England.
The release,
publication or distribution of this Announcement in or into certain
jurisdictions other than the United Kingdom may be restricted by
law and therefore any persons who are subject to the laws of any
jurisdiction other than the United Kingdom should inform themselves
of, and observe, any applicable requirements of their
jurisdictions.
The availability of
the Acquisition to Gresham Shareholders who are not resident in and
citizens of the United Kingdom may be affected by the laws and/or
regulations of the relevant jurisdictions in which they are located
or of which they are citizens. Persons who are not resident in and
citizens of the United Kingdom should inform themselves of, and
observe, any applicable legal or regulatory requirements of their
jurisdictions. In particular, the ability of persons who are not
resident in and citizens of the United Kingdom to vote their Scheme
Shares with respect to the Scheme at the Court Meeting, or to
execute and deliver forms of proxy appointing another person to
vote at the Court Meeting on their behalf, may be affected by the
laws of the relevant jurisdictions in which they are located or of
which they are a citizen. Gresham Shareholders who are in any doubt
regarding such matters should consult an appropriate independent
financial adviser in their relevant jurisdiction without delay. Any
failure to comply with the applicable restrictions may constitute a
violation of the securities laws of any such jurisdiction. To the
fullest extent permitted by applicable law, the companies and
persons involved in the Acquisition disclaim any responsibility or
liability for the violation of such restrictions by any
person.
Unless otherwise
determined by Bidco or required by the Takeover Code, and permitted
by applicable law and regulation, participation in the Acquisition
will not be made available, directly or indirectly, in, into or
from a Restricted Jurisdiction where to do so would violate the
laws in that jurisdiction and no person may vote in favour of the
Acquisition by any such use, means, instrumentality or from within
a Restricted Jurisdiction or any other jurisdiction if to do so
would constitute a violation of the laws of that jurisdiction.
Accordingly, copies of this Announcement and any formal
documentation relating to the Acquisition are not being, and must
not be, directly or indirectly, mailed or otherwise forwarded,
distributed or sent in, into or from any Restricted Jurisdiction
and persons receiving this Announcement and all such documents
relating to the Acquisition (including, without limitation, agents,
custodians, nominees and trustees) must not, directly or
indirectly, mail or otherwise forward, distribute or send them in,
into or from any Restricted Jurisdiction. Doing so may render
invalid any related purported vote in respect of the Acquisition.
If the Acquisition is implemented by way of an Offer (unless
otherwise permitted by applicable law and regulation), the Offer
may not be made directly or indirectly, in or into, or by the use
of mails or any means or instrumentality (including, but not
limited to, facsimile, e-mail or other electronic transmission,
telex or telephone) of interstate or foreign commerce of, or of any
facility of a national, state or other securities exchange of, any
Restricted Jurisdiction and the Offer may not be capable of
acceptance by any such use, means, instrumentality or
facilities.
Further details in
relation to Overseas Shareholders will be contained in the Scheme
Document (or, if the Acquisition is implemented by way of an Offer,
the Offer Document).
Notice to US investors in Gresham
Gresham Shareholders
in the United States should note that the Acquisition relates to
the shares of an English company and is proposed to be made by
means of a scheme of arrangement provided for under, and governed
by, the laws of England and Wales.
Neither the proxy
solicitation nor the tender offer rules under the U.S. Securities
Exchange Act of 1934, as amended (the "US Exchange Act") will apply to the Scheme. Moreover, the
Scheme will be subject to the disclosure and procedural
requirements and practices applicable in the United Kingdom to
schemes of arrangement, which differ from the disclosure and
procedural requirements of US tender offer and proxy solicitation
rules. If, in the future and subject to the consent of the Panel,
Bidco exercises the right to implement the Acquisition by way of an
Offer and determines to extend the offer into the United States,
the Acquisition will be made in compliance with applicable United
States laws and regulations, including any applicable exemptions
under the US Exchange Act. Such an Offer would be made in the
United States by Bidco and no one else. In accordance with normal
United Kingdom practice and consistent with Rule 14e-5 under the US
Exchange Act, Bidco, certain affiliated companies and the nominees
or brokers (acting as agents) may make certain purchases of, or
arrangements to purchase, shares in Gresham outside such Offer
during the period in which such Offer would remain open for
acceptance. If such purchases or arrangements to purchase were to
be made they would be made outside the United States either in the
open market at prevailing prices or in private transactions at
negotiated prices and would comply with applicable law, including,
to the extent applicable, the US Exchange Act. Any information
about such purchases will be disclosed as required in the United
Kingdom, will be reported to a Regulatory Information Service and
will be available on the London Stock Exchange website at
www.londonstockexchange.com.
The financial
information included in this Announcement and the Scheme Document
(or, if the Acquisition is implemented by way of an Offer, the
Offer Document) has been or will have been prepared in accordance
with generally accepted accounting principles of the United Kingdom
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
United States ("US GAAP").
US GAAP differs in certain significant respects from accounting
standards applicable in the United Kingdom. None of the financial
information in this document has been audited in accordance with
auditing standards generally accepted in the United States or the
auditing standards of the Public Company Accounting Oversight Board
(United States).
Neither the
Acquisition nor this Announcement have been approved or disapproved
by the US Securities and Exchange Commission, any state securities
commission in the United States or any other US regulatory
authority, nor have any such authorities passed upon or determined
the adequacy
or accuracy of the
information contained in this Announcement or the merits of the
Acquisition. Any representation to the contrary is a criminal
offence in the United States.
The receipt of
consideration by a US holder for the transfer of its Gresham Shares
pursuant to the Acquisition may be a taxable transaction for US
federal income tax purposes and under applicable US state and
local, as well as non-US and other, tax laws. Each Gresham
Shareholder is urged to consult their independent professional
adviser immediately regarding the tax consequences of the
Acquisition applicable to them, including under applicable US
federal, state and local, as well as non-US and other, tax
laws.
It may be difficult
for US holders of Gresham Shares to enforce their rights and any
claim arising out of the US federal laws or to enforce against them
a judgment of a US court predicated upon the securities laws of the
United Kingdom, since Bidco and Gresham are incorporated in a
non-US jurisdiction, and some or all of their officers and
directors may be residents of countries other than the United
States. US holders of Gresham Shares may not be able to sue a
non-US company or its officers or directors in a non-US court for
violations of the US securities laws. Further, it may be difficult
to compel a non-US company and its affiliates to subject themselves
to a US court's judgment.
Cautionary note regarding forward-looking
statements
This Announcement
(including information incorporated by reference in this
Announcement), oral statements made regarding the Acquisition, and
other information published by Bidco and Gresham contain certain
statements which are, or may be deemed to be, "forward-looking
statements". Forward-looking statements are prospective in nature
and are not based on historical facts, but rather on current
expectations and projections of the management of Bidco and Gresham
about future events, and are therefore subject to risks and
uncertainties which could cause actual results to differ materially
from the future results expressed or implied by the forward-looking
statements.
The forward-looking
statements contained in this Announcement include statements
relating to the expected effects of the Acquisition on Bidco and
Gresham (including their future prospects, developments and
strategies), the expected timing and scope of the Acquisition and
other statements other than historical facts. Forward-looking
statements often, but not always, use words such as "anticipate",
"target", "expect", "estimate", "intend", "plan", "goal",
"believe", "hope", "aims", "continue", "will", "may", "should",
"would", "could", or other words of similar meaning or derivatives
thereof. These statements are based on assumptions and assessments
made by Gresham and/or Bidco in light of their experience and their
perception of historical trends, current conditions, future
developments and other factors they believe appropriate. By their
nature, forward-looking statements involve risk and uncertainty,
because they relate to events and depend on circumstances that will
occur in the future and the factors described in the context of
such forward-looking statements in this Announcement could cause
actual results and developments to differ materially from those
expressed in or implied by such forward-looking statements and as
such are qualified in their entirety. These factors include, but
are not limited to: the ability to complete the Acquisition; the
ability to obtain requisite regulatory and shareholder approvals
and the satisfaction of other Conditions on the proposed terms and
schedule; changes in the global political, economic, business and
competitive environments and in market and regulatory forces;
changes in future exchange and interest rates; changes in tax
rates; future business combinations or disposals; changes in
general economic and business conditions; changes in the behaviour
of other market participants; changes in the anticipated benefits
from the proposed transaction not being realised as a result of
changes in general economic and market conditions in the countries
in which Bidco and Gresham operate, weak, volatile or illiquid
capital and/or credit markets, changes in, the degree of
competition in the geographic and business areas in which Bidco and
Gresham operate and changes in laws or in supervisory expectations
or requirements.
Forward-looking
statements may include statements relating to the following: (i)
future capital expenditures, expenses, revenues, earnings,
synergies, economic performance, indebtedness, financial condition,
dividend policy, losses and future prospects; (ii) business and
management strategies and the expansion and growth of Gresham's
operations and potential synergies resulting from the Acquisition;
and (iii) the effects of global economic conditions and
governmental regulation on Gresham's business.
Such forward-looking
statements involve known and unknown risks and uncertainties that
could significantly affect expected results and are based on
certain key assumptions. Many factors may cause the actual results,
performance or achievements of Gresham to be materially different
from any future results, performance or achievements expressed or
implied by the forward-looking statements. These factors include
changes in the global, political, economic, business, competitive,
market and regulatory forces, future exchange and interest rates,
changes in tax rates and future business combinations or
disposals.
No member of
Gresham, nor any of its associates, directors, officers, employees
or advisers, provides any representation, assurance or guarantee
that the occurrence of the events expressed or implied in any
forward-looking statements in this Announcement will actually
occur.
Although it is
believed that the expectations reflected in such forward-looking
statements are reasonable, no assurance can be given that such
expectations will prove to have been correct and you are therefore
cautioned not to place any reliance on these forward-looking
statements which speak only as at the date of this Announcement.
Neither Gresham nor Bidco assumes any obligation to update or
correct the information contained in this Announcement (whether as
a result of new information, future events or otherwise), except as
required by applicable law.
Dealing and opening position disclosure
requirements
Under Rule 8.3(a) of
the Takeover Code, any person who is interested in one per cent. or
more of any class of relevant securities of an offeree company or
of any securities exchange offeror (being any offeror other than an
offeror in respect of which it has been announced that its offer
is, or is likely to be, solely in cash) must make an Opening
Position Disclosure following the commencement of the offer period
and, if later, following the announcement in which any securities
exchange offeror is first identified.
An Opening Position
Disclosure must contain details of the person's interests and short
positions in, and rights to subscribe for, any relevant securities
of each of (i) the offeree company and (ii) any securities exchange
offeror(s). An Opening Position Disclosure by a person to whom Rule
8.3(a) applies must be made by no later than 3.30 p.m. (London
time) on the 10th Business Day following the commencement of the
offer period and, if appropriate, by no later than 3.30 p.m.
(London time) on the 10th Business Day following the announcement
in which any securities exchange offeror is first identified.
Relevant persons who deal in the relevant securities of the offeree
company or of a securities exchange offeror prior to the deadline
for making an Opening Position Disclosure must instead make a
Dealing Disclosure.
Under Rule 8.3(b) of
the Takeover Code, any person who is, or becomes, interested in one
per cent. or more of any class of relevant securities of the
offeree company or of any securities exchange offeror must make a
Dealing Disclosure if the person deals in any relevant securities
of the offeree company or of any securities exchange offeror. A
Dealing Disclosure must contain details of the dealing concerned
and of the person's interests and short positions in, and rights to
subscribe for, any relevant securities of each of (i) the offeree
company and (ii) any securities exchange offeror, save to the
extent that these details have previously been disclosed under Rule
8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies
must be made by no later than 3.30 p.m. (London time) on the
Business Day following the date of the relevant dealing. If two or
more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of an offeree company or a
securities exchange offeror, they will be deemed to be a single
person for the purpose of Rule 8.3.
Opening Position
Disclosures must also be made by the offeree company and by any
offeror and Dealing Disclosures must also be made by the offeree
company, by any offeror and by any persons acting in concert with
any of them (see Rules 8.1, 8.2 and 8.4). Details of the offeree
and offeror companies in respect of whose relevant securities
Opening Position Disclosures and Dealing Disclosures must be made
can be found in the Disclosure Table on the Takeover Panel's
website at www.thetakeoverpanel.org.uk,
including details of the number of relevant securities in issue,
when the offer period commenced and when any offeror was first
identified. You should contact the Panel's Market Surveillance Unit
on +44 (0)20 7638 0129 if you are in any doubt as to whether you
are required to make an Opening Position Disclosure or a Dealing
Disclosure.
Publication on a website
In accordance with
Rule 26.1 of the Takeover Code, a copy of this Announcement and the
documents required to be published under Rule 26 of the Takeover
Code will be made available, subject to certain restrictions
relating to persons resident in Restricted Jurisdictions, on
Gresham's website at www.greshamtech.com/invest-in-us by no later than 12
noon (London time) on the first Business Day following the date of
this Announcement. For the avoidance of doubt, neither the contents
of this website nor any website accessible from hyperlinks is
incorporated into or forms part of this Announcement.
No profit forecasts, estimates or quantified benefits
statements
Save for the profit
estimates set out in paragraph 8.1 of this Announcement, no
statement in this Announcement is intended to constitute a profit
forecast, profit estimate or quantified benefits statement for any
period and no statement in this Announcement should be interpreted
to mean that the earnings or future earnings per share of or
dividends or future dividends per share of Gresham for the current
or future financial years will necessarily match or exceed the
historical published earnings or earnings per share or dividends
per share of Gresham.
Requesting hard copy documents
In accordance with
Rule 30.3 of the Takeover Code, Gresham Shareholders, persons with
information rights and participants in the Gresham Share Plans may
request a hard copy of this Announcement by contacting Gresham's
registrars, Equiniti: (i) on +44 (0)371 384 2050. Calls are charged at the standard
geographic rate and will vary by provider. Calls outside the United
Kingdom will be charged at the applicable international rate. Lines
are open between 08:30 - 17:30, Monday to Friday excluding public
holidays in England and Wales; or (ii) by submitting a request in
writing to Equiniti at
Aspect House, Spencer Road, Lancing, West Sussex BN99
6DA. Please note
that Equiniti
cannot provide any financial,
legal or tax advice and calls may be recorded and monitored for
security and training purposes. For persons who receive a copy of
this Announcement in electronic form or via a website notification,
a hard copy of this Announcement will not be sent unless so
requested. Such persons may also request that all future documents,
announcements and information to be sent to them in relation to the
Acquisition should be in hard copy form.
Electronic communications
Please be aware that
addresses, electronic addresses and certain other information
provided by Gresham Shareholders, persons with information rights
and other relevant persons for the receipt of communications from
Gresham may be provided to Bidco during the Offer Period as
required under Section 4 of Appendix 4 of the Takeover Code to
comply with Rule 2.11(c) of the Takeover Code.
Rounding
Certain figures
included in this Announcement have been subjected to rounding
adjustments. Accordingly, figures shown for the same category
presented in different tables may vary slightly and figures shown
as totals in certain tables may not be an arithmetic aggregation of
figures that precede them.
General
If the Acquisition
is effected by way of an Offer, and such an Offer becomes or is
declared unconditional in all respects and sufficient acceptances
are received, Bidco intends to exercise its rights to apply the
provisions of Chapter 3 of Part 28 of the Companies Act 2006 so as
to acquire compulsorily the remaining Gresham Shares in respect of
which the Offer has not been accepted.
Investors should be
aware that Bidco may purchase Gresham Shares otherwise than under
any Offer or the Scheme, including pursuant to privately negotiated
purchases.
Rule 2.9 of the Takeover Code
For the purposes of
Rule 2.9 of the Takeover Code, Gresham confirms that, as at
8 April 2024 (being the Last
Practicable Date), it had 83,874,458 ordinary shares of 5 pence
each ("Ordinary Shares") in
issue and admitted to trading on the Main Market of the London
Stock Exchange. Gresham does not hold any Ordinary Shares in
treasury. The International Securities Identification Number (ISIN)
for the Ordinary Shares is GB0008808825.
APPENDIX 1
CONDITIONS TO AND CERTAIN FURTHER TERMS OF THE ACQUISITION
Part A: Conditions to the Scheme and the
Acquisition
Long-Stop Date
1.
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The Acquisition will be conditional
upon the Scheme becoming unconditional and becoming Effective,
subject to the provisions of the Takeover Code, by no later than
11.59 p.m. on the Long-Stop Date or such later date (if any) as
Bidco and Gresham may, with the consent of the Panel, agree and (if
required) as the Court may approve, or the Panel may
require.
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Scheme approval
2.
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The Scheme will be subject to the
following conditions:
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(a)
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(i) its approval by a majority in
number representing not less than 75 per cent. in value of the
Scheme Shares held by Scheme Shareholders who are on the register
of members of Gresham at the Scheme Voting Record Time, present and
voting (and entitled to vote), either in person or by proxy, at the
Court Meeting, and (ii) such Court Meeting being held on or before
the 22nd day after the expected date of the Court
Meeting to be set out in the Scheme Document in due course (or such
later date as may, with the consent of the Panel, be agreed between
Bidco and Gresham (and that the Court may approve if so
required));
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(b)
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(i) the Special Resolution being
duly passed at the General Meeting (or any adjournment thereof),
and (ii) such General Meeting being held on or before the
22nd day after the expected date of the General Meeting
to be set out in the Scheme Document in due course (or such later
date as may, with the consent of the Panel, be agreed between Bidco
and Gresham (and that the Court may approve if so
required));
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(c)
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the sanction of the Scheme by the
Court with or without modification (but subject to any such
modification being acceptable to Bidco and Gresham) and the
delivery of a copy of the Scheme Court Order to the Registrar of
Companies for registration; and
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(d)
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the Scheme Court Hearing being held
on or before the 22nd day after the expected date of the
Scheme Court Hearing to be set out in the Scheme Document in due
course (or such later date as may, with the consent of the Panel,
be agreed between Bidco and Gresham (and that the Court may approve
if so required)).
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General Conditions
3.
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In addition, subject as stated in
Part B of this Appendix 1, Bidco and Gresham 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 such Conditions (as amended if
appropriate) have been satisfied or, where relevant,
waived:
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Regulatory approvals
United
Kingdom
(a)
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the United Kingdom Secretary of
State:
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(i)
|
notifying Bidco, in accordance with
section 14(8)(b)(ii) of the National Security and Investment Act
2021 (the "NSI Act"), that no further action shall be taken under
the NSI Act in relation to the Acquisition; or
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(ii)
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giving a final notification before
the end of the assessment period that no further action in relation
to the call-in notice is to be taken, in accordance with section
26(1)(b) of the NSI Act; or
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(iii)
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making a final order before the end
of the assessment period, in accordance with section 26(1)(a) of
the NSI Act, in terms which permit the Acquisition to
proceed;
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United
States
(b)
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the submission of a Commodities
Classification Automated Tracking System request to the Department
of Commerce's Bureau of Industry and Security for each
Gresham-developed software, including source code
therefor;
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Australia
(c)
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insofar as such a notification is
considered necessary by Bidco, a notification of the Acquisition
having been made to and accepted by or on behalf of the Treasurer
of the Commonwealth of Australia (the "Treasurer") pursuant to the
Foreign Acquisitions and Takeovers Act 1975 (Cth) ("FATA") and one
of the following having occurred:
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(i)
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Bidco receiving written notice under
the FATA by or on behalf of the Treasurer that there is no
objection to the Acquisition, on an unconditional basis or subject
to conditions that Bidco, acting reasonably, does not consider to
be materially detrimental to it;
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(ii)
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the Treasurer becoming precluded
from making an order or decision under Division 2 of Part 3 of the
FATA in relation to the Acquisition;
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(iii)
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where an interim order is made and
registered under section 68 of the FATA in respect of the
Acquisition, and the subsequent period for making an order or
decision under section 67, 69, 74 or 75 of the FATA in relation to
the Acquisition elapses without the Treasurer making such an order
or decision; or
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(iv)
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Bidco having received written notice
by or on behalf of the Treasurer that the FATA does not apply to
the Acquisition;
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Luxembourg
(d)
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insofar as such a notification is
deemed necessary by Bidco, a notification of the Acquisition having
been made to and accepted by or on behalf of the Luxembourg
Ministry of Economy pursuant to the Luxembourg law of 14 July 2023
introducing a foreign direct investment screening mechanism in
Luxembourg (the "FDI Screening Law") and one of the following
having occurred:
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(i)
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Bidco receiving formal notice under
the FDI Screening Law by or on behalf of the Luxembourg Ministry of
Economy that it has decided not to open a screening procedure
pursuant to Article 5(1) of the FDI Screening Law; or
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(ii)
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where a screening procedure is
opened pursuant to Article 5(1) of the FDI Screening Law, Bidco
receiving formal notice that the Luxembourg Ministry of Economy has
taken all decisions and granted all approvals necessary to permit
the Acquisition to proceed, as provided for in Article 8 of the FDI
Screening Law, in each case on terms reasonably satisfactory to
Bidco; or
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(iii)
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where the time limits set forth in
the FDI Screening Law elapse;
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Certain matters arising as a result of any
arrangement, agreement, etc.
(e)
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except as Disclosed, there being no
provision of and/or no event having occurred under any agreement,
arrangement, licence, lease, franchise, permit or other instrument
to which any member of the Wider Gresham Group is a party or by or
to which any such member or any of its assets may be bound,
entitled or subject or any event or circumstance, which in
consequence of the Scheme, the Acquisition or the proposed
acquisition by any member of the Wider Bidco Group of any shares or
other securities (or equivalent) in Gresham or because of a change
in the control or management of any member of the Wider Gresham
Group or otherwise, would or might reasonably be expected to result
in, in each case to an extent which is material in the context of
the Wider Gresham Group taken as a whole or to the financing of the
Acquisition:
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(i)
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any monies borrowed by, or any other
indebtedness, actual or contingent, of, or grant available to any
member of the Wider Gresham Group being or becoming repayable, or
capable of being declared repayable, immediately or prior to its or
their stated maturity date or repayment date, or the ability of any
such member to borrow monies or incur any indebtedness being
withdrawn or inhibited or being capable of becoming or being
withdrawn or inhibited;
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(ii)
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save in the ordinary and usual
course of business, the creation or enforcement of any mortgage,
charge, encumbrance or other security interest over the whole or
any part of the business, property or assets of any member of the
Wider Gresham Group or any such mortgage, charge, encumbrance or
other security interest (whenever created, arising or having
arisen) becoming enforceable;
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(iii)
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any such agreement, arrangement,
licence, lease, franchise, permit or other instrument being
terminated or the rights, liabilities, obligations or interests of
any member of the Wider Gresham Group being adversely modified or
adversely affected or any obligation or liability arising or any
adverse action being taken or arising thereunder;
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(iv)
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any liability of any member of the
Wider Gresham Group to make any severance, termination, bonus or
other payment to any of its directors, or other
officers;
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(v)
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the rights, liabilities,
obligations, interests or business of any member of the Wider
Gresham Group under any such arrangement, agreement, licence,
permit, lease or instrument or the interests or business of any
member of the Wider Gresham Group in or with any other person or
body or firm or company (or any arrangement or agreement relating
to any such interests or business) being or becoming capable of
being terminated, or adversely modified or adversely affected or
any onerous obligation or liability arising or any adverse action
being taken thereunder;
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(vi)
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any member of the Wider Gresham
Group ceasing to be able to carry on business under any name under
which it presently carries on business;
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(vii)
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the value of, or the financial or
trading position or prospectus of, any member of the Wider Gresham
Group being prejudiced or adversely affected; or
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(viii)
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the creation or acceleration of any
liability (actual or contingent) by any member of the Wider Gresham
Group (including any material tax liability), excluding trade
creditors and other liabilities incurred in the ordinary course of
business;
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Other Third Party clearances
(f)
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except as Disclosed, no Third Party
having given notice of a decision to take, institute, implement or
threaten any action, proceeding, suit, investigation, enquiry or
reference, or having required any action to be taken or otherwise
having done anything, or having enacted, made or proposed any
statute, regulation, decision, order or change to published
practice (and in each case, not having withdrawn the same) and
there not continuing to be any outstanding statute, regulation,
decision or order which would or might reasonably be expected
to:
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(i)
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require, prevent or materially delay
the divestiture, or materially alter the terms envisaged for any
such divestiture by any member of the Wider Bidco Group or any
member of the Wider Gresham Group of all or any portion of their
respective businesses, assets or property or impose any limitation
on the ability of any of them to conduct their respective
businesses (or any part thereof) or to own, control or manage any
of their respective assets or properties (or any part thereof)
which, in any such case, is material in the context of the Wider
Gresham Group or the Wider Bidco Group in either case taken as a
whole;
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(ii)
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except pursuant to Chapter 3 of Part
28 of the Companies Act 2006, require any member of the Wider Bidco
Group or the Wider Gresham Group to acquire or offer to acquire any
shares, other securities (or the equivalent) or interest in any
member of the Wider Gresham Group or the Wider Bidco Group or any
asset owned by any Third Party which is material in the context of
the Wider Bidco Group or the Wider Gresham Group, in either case
taken as a whole (other than in the implementation of the Scheme
and/or the Acquisition);
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(iii)
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impose any material limitation on,
or result in a material delay in, the ability of any member of the
Wider Bidco Group directly or indirectly to acquire or to hold or
to exercise effectively all or any rights of ownership in respect
of shares or loans or securities convertible into shares or any
other securities (or the equivalent) in any member of the Wider
Gresham Group or the Wider Bidco Group or to exercise management
control over any such member;
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(iv)
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otherwise adversely affect the
business, assets, profits or prospects of any member of the Wider
Bidco Group or of any member of the Wider Gresham Group in a manner
which is adverse to and material in the context of the Wider Bidco
Group or the Wider Gresham Group, in either case taken as a
whole;
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(v)
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make the Scheme, the Acquisition,
its implementation or the acquisition or proposed acquisition by
Bidco or any member of the Wider Bidco Group of any shares or other
securities in, or control or management of Gresham void, illegal,
and/or unenforceable under the laws of any jurisdiction, or
otherwise, directly or indirectly, restrain, restrict, prohibit,
delay or otherwise interfere with the same, or impose additional
conditions or obligations with respect thereto, or otherwise
challenge, impede, interfere or require material amendment of the
Scheme, the Acquisition, its implementation or the acquisition or
proposed acquisition by Bidco or any member of the Wider Bidco
Group of any shares or other securities in, or control or
management of Gresham;
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(vi)
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impose any limitation on the ability
of any member of the Wider Gresham Group to conduct, integrate or
co-ordinate all or any part of its business with all or any part of
the businesses of any other members of the Wider Gresham Group or
the Wider Bidco Group which is adverse to and material in the
context of the Wider Bidco Group taken as a whole; or
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(vii)
|
result in any member of the Wider
Gresham Group or Wider Bidco Group ceasing to be able to carry on
business under any name under which it presently does
so,
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and all applicable waiting and other
time periods (including any extensions thereof) during which any
such Third Party could decide to take, institute, implement or
threaten in writing any such action, proceeding, suit,
investigation, enquiry or reference or take any other step under
the laws of any jurisdiction in respect of the Scheme, the
Acquisition or the acquisition or proposed acquisition of any
Gresham Shares or otherwise intervene having expired, lapsed or
been terminated;
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(g)
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other than in relation to the
matters referred to in Conditions (a) to (d) above, all
notifications, filings or applications which are deemed by Bidco to
be necessary or reasonably considered to be required in any
relevant jurisdiction having been made in connection with the
Acquisition and all necessary waiting and other time periods
(including any extensions thereof) under any applicable legislation
or regulation of any jurisdiction having expired, lapsed or been
terminated (as appropriate) and all statutory or regulatory
obligations in any jurisdiction having been complied with in
connection with the Scheme, the Acquisition, its implementation or
the acquisition by any member of the Wider Bidco Group of any
shares or other securities in, or control or management of, Gresham
and all authorisations, orders, recognitions, grants, consents,
licences, confirmations, clearances, permissions and approvals
reasonably deemed necessary or appropriate by Bidco or any member
of the Wider Bidco Group for or in respect of the Scheme, the
Acquisition, its implementation or the proposed acquisition of any
shares or other securities in, or control or management of, Gresham
by any member of the Wider Bidco Group having been obtained in
terms and in a form satisfactory to Bidco from all appropriate
Third Parties or persons with whom any member of the Wider Gresham
Group has entered into contractual arrangements and all such
authorisations, orders, recognitions, grants, consents, licences,
confirmations, clearances, permissions and approvals together with
all authorisations orders, recognitions, grants, licences,
confirmations, clearances, permissions and approvals necessary or
appropriate to carry on the business of any member of the Wider
Gresham Group remaining in full force and effect and all filings
necessary for such purpose have been made and there being no notice
or intimation of any intention to revoke or not to renew any of the
same at the time at which the Offer becomes otherwise unconditional
and all necessary statutory or regulatory obligations in any
jurisdiction having been complied with;
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(h)
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no temporary restraining order,
preliminary or permanent injunction, preliminary or permanent
enjoinment, or other order issued and being in effect by a court or
other Third Party which has the effect of making the Acquisition or
any acquisition or proposed acquisition of any shares or other
securities or control or management of, any member of the Wider
Gresham Group by any member of the Wider Bidco Group, or the
implementation of either of them, void, voidable, illegal and/or
unenforceable under the laws of any relevant jurisdiction, or
otherwise directly or indirectly prohibiting, preventing,
restraining, restricting, delaying or otherwise interfering with
the completion or the approval of the Acquisition or any matter
arising from the proposed acquisition of any shares or other
securities in, or control or management of, any member of the Wider
Gresham Group by any member of the Wider Bidco Group;
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Certain events occurring since 30 June 2023
(i)
|
except as Disclosed, no member of
the Wider Gresham Group having, since 30 June 2023:
|
|
(i)
|
issued or agreed to issue or
authorised or proposed or announced its intention to authorize or
propose the issue of, additional shares of any class, or securities
or securities convertible into, or exchangeable for, or rights,
warrants or options to subscribe for or acquire, any such shares or
securities or convertible securities or transferred, or sold or
agreed to transfer or sell or authorised or proposed the transfer
or sale of Gresham Shares out of treasury (except, where relevant,
as between Gresham and wholly-owned subsidiaries of Gresham or
between the wholly-owned subsidiaries of Gresham and except for the
issue or transfer out of treasury or any employee benefit trust of
Gresham Shares on or in connection with the exercise of share
options or vesting of share awards in the ordinary course under the
Gresham Share Plans);
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(ii)
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except for the Permitted Dividend,
recommended, declared, paid or made or resolved to recommend,
declare, pay or make any bonus, dividend or other distribution
(whether payable in cash or otherwise) other than the Permitted
Dividend and dividends (or other distributions whether payable in
cash or otherwise) lawfully paid or made by any wholly-owned
subsidiary of Gresham to Gresham or any of its wholly-owned
subsidiaries;
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(iii)
|
other than pursuant to the
Acquisition (and except for transactions between Gresham and its
wholly-owned subsidiaries or between the wholly-owned subsidiaries
of Gresham and transactions in the ordinary course of business),
implemented, effected, authorised, proposed or announced its
intention to implement, effect, authorise or propose any merger,
demerger, reconstruction, amalgamation, sub-division, scheme,
commitment or acquisition or disposal of assets or shares or loan
capital (or the equivalent thereof) in any undertaking or
undertakings;
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(iv)
|
except for transactions between
Gresham and its wholly-owned subsidiaries or between the
wholly-owned subsidiaries of Gresham and transactions in the
ordinary course of business, disposed of, or transferred, mortgaged
or charged, or created any security interest over any asset or any
right, title or interest in any asset (including shares and trade
investments) or authorised, proposed or announced any intention to
do so;
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|
(v)
|
except for transactions between
Gresham and its wholly-owned subsidiaries or between the
wholly-owned subsidiaries of Gresham, in each case entered into in
the ordinary course of business, entered into, implemented or
authorised the entry into, any joint venture, asset or profit
sharing arrangement, partnership or merger of business or corporate
entities;
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|
(vi)
|
except for transactions between
Gresham and its wholly-owned subsidiaries or between the
wholly-owned subsidiaries of Gresham, issued, authorised or
proposed or announced an intention to authorise or propose, the
issue of or made any change in or to the terms of any debentures or
become subject to any contingent liability or incurred or increased
any indebtedness;
|
|
(vii)
|
made any alteration to its
memorandum or articles of association or other incorporation
documents (in each case other than in connection with the
Scheme);
|
|
(viii)
|
except for transactions between
Gresham and its wholly-owned subsidiaries or between the
wholly-owned subsidiaries of Gresham, made, authorised, proposed or
announced an intention to propose any change in its loan
capital;
|
|
(ix)
|
except for transactions between
Gresham and its wholly-owned subsidiaries or between the
wholly-owned subsidiaries of Gresham, in each case entered into in
the ordinary course, issued, authorised or proposed or announced an
intention to authorise or propose the issue of any debentures, or
any change in or to the terms of any debentures or become subject
to any contingent liability or incurred or increased any
indebtedness which is or might reasonably be expected to be
material in the context of the Wider Gresham Group taken as a whole
or material in the context of the Acquisition;
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(x)
|
purchased, redeemed or repaid or
announced any proposal to purchase, redeem or repay any of its own
shares or other securities or reduced or, save in respect of the
matters mentioned in sub-paragraph (i) above, made any other change to
any part of its share capital;
|
|
(xi)
|
entered into or varied or
authorised, proposed or announced its intention to enter into or
vary any contract, arrangement, agreement, transaction or
commitment (whether in respect of capital expenditure or otherwise)
which is of a long term, onerous or unusual nature or magnitude or
which is or might reasonably be expected to be restrictive on the
businesses of any member of the Wider Gresham Group or the Wider
Bidco Group or which involves or could involve an obligation of
such a nature or magnitude or which is other than in the ordinary
course of business and which is material in the context of the
Wider Gresham Group taken as a whole;
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(xii)
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entered into or materially varied
the terms of, or made any offer (which remains open for acceptance)
to enter into or materially vary the terms of any contract, service
agreement, commitment or arrangement with any director or, except
for salary increases or bonuses in the ordinary course for any
senior executive of Gresham, and other than as agreed by the Panel
and Bidco;
|
|
(xiii)
|
(other than in respect of a member
of the Wider Gresham Group which is dormant and was solvent at the
relevant time) taken or proposed any steps, corporate action or had
any legal proceedings started or threatened against it in relation
to the suspension of payments, a moratorium of indebtedness, its
winding-up (voluntary or otherwise), dissolution or reorganisation
or for the appointment of a receiver, administrative receiver,
administrator, trustee or similar officer of all or any of its
assets or revenues or any analogous or equivalent steps or
proceedings in any jurisdiction or appointed any analogous person
in any jurisdiction or had any such person appointed;
|
|
(xiv)
|
been unable, or admitted in writing
that it is unable, to pay its debts when they fall due or commenced
negotiations with one or more of its creditors with a view to
rescheduling or restructuring any of its indebtedness, 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;
|
|
(xv)
|
entered into any contract,
transaction or arrangement which would be restrictive on the
business of any member of the Wider Gresham Group or the Wider
Bidco Group other than to a nature and extent which is normal in
the context of the business concerned;
|
|
(xvi)
|
terminated or varied the terms of
any agreement or arrangement between any member of the Wider
Gresham Group and any other person in a manner which would or might
reasonably be expected to be materially adverse to the Wider
Gresham Group taken as a whole or is material in the context of the
Acquisition;
|
|
(xvii)
|
waived, compromised or settled any
claim or regulatory proceeding (whether actual or threatened) by or
against any member of the Wider Gresham Group which would or might
reasonably be expected to be materially adverse to the Wider
Gresham Group taken as a whole or is material in the context of the
Acquisition, otherwise than in the ordinary course of
business;
|
|
(xviii)
|
made, proposed or agreed or
consented to or procured any change to, or the custodian or trustee
of any scheme having made a change to (to an extent which would or
might reasonably be expected to be materially adverse to the Wider
Gresham Group taken as a whole or to be material in the context of
the Acquisition):
|
|
|
(1)
|
the terms of the trust deeds and
rules constituting the pension scheme(s) established by any member
of the Wider Gresham Group for its directors, employees, former
employees or their dependents;
|
|
|
(2)
|
the contributions payable to any
such scheme(s) or to the benefits which accrue or to the pensions
which are payable thereunder;
|
|
|
(3)
|
the basis on which qualification
for, or accrual or entitlement to, such benefits or pensions are
calculated or determined; or
|
|
|
(4)
|
the basis upon which the liabilities
(including pensions) of such pension schemes are funded, valued,
made, agreed or consented to;
|
|
(xix)
|
carried out any act:
|
|
|
(1)
|
which would or might reasonably be
expected to lead to the commencement of the winding up of any
pension scheme(s) established by any member of the Wider Gresham
Group for its directors, former directors, employees, former
employees or their dependants;
|
|
|
(2)
|
which would or might reasonably be
expected to create a material debt owed by an employer to any such
plan; or
|
|
|
(3)
|
which would or might reasonably be
expected to accelerate any obligation on any employer to fund or
pay additional contributions to any such plan;
|
|
(xx)
|
proposed, agreed to provide or
modified the terms of any share option scheme, incentive scheme,
retention scheme or other benefit (including compensation) relating
to the employment or termination of employment of any person
employed by the Wider Gresham Group other than in accordance with
the terms of the Acquisition or, if required by the Takeover Code,
as agreed by the Panel and/or Bidco; or
|
|
(xxi)
|
entered into any agreement,
arrangement, commitment or contract or passed any resolution or
made any offer (which remains open for acceptance) with respect to
or announced an intention to, or to propose to, effect any of the
transactions, matters or events referred to in this Condition;
or
|
|
(xxii)
|
other than with the consent of
Bidco, having taken (or agreed or proposed to take) any action
which requires, or would require, the consent of the Panel or the
approval of Gresham Shareholders in general meeting in accordance
with, or as contemplated by, Rule 21.1 of the Takeover
Code,
|
|
and, for the purposes of
paragraphs (i) to (v) (inclusive), (viii)
and (ix)
of this Condition, the term "Gresham Group" shall
mean Gresham and its wholly-owned subsidiaries;
|
No material adverse change, litigation, regulatory
enquiry or similar
(j)
|
except as Disclosed, since 30 June
2023, there having been:
|
|
(i)
|
no adverse change or deterioration
having occurred, and no circumstance having arisen which would or
might reasonably be expected to result in any adverse change or
deterioration, in the business, assets, financial or trading
position or profits or prospects or operational performance of any
member of the Wider Gresham Group which is material in the context
of the Wider Gresham Group taken as a whole;
|
|
(ii)
|
no litigation, arbitration
proceedings, prosecution or other legal proceedings having been
threatened, announced or instituted by or against or remaining
outstanding against or in respect of, any member of the Wider
Gresham Group or to which any member of the Wider Gresham Group is
or may become a party (whether as a plaintiff, defendant or
otherwise) and no investigation or other regulatory proceedings by
any Third Party having been threatened, announced, instituted or
remain outstanding by, against or in respect of any member of the
Wider Gresham Group, in each case which might reasonably be
expected to have a material adverse effect on the Wider Gresham
Group taken as a whole;
|
|
(iii)
|
no enquiry, review or investigation
by (or complaint or reference to) any Third Party or other
investigative body against or in respect of any member of the Wider
Gresham Group having been threatened, announced, instituted or
remaining outstanding by, against or in respect of any member of
the Wider Gresham Group, in each case which might reasonably be
expected to have a material adverse effect on the Wider Gresham
Group taken as a whole;
|
|
(iv)
|
no contingent or other liability
having arisen or become apparent to Bidco or increased which
affects, or which would be reasonably likely to affect, adversely
the business, assets, financial or trading position or profits or
prospects of any member of the Wider Gresham Group to an extent
which is material in the context of the Wider Gresham
Group;
|
|
(v)
|
no steps having been taken, and no
omissions having been made, which are reasonably likely to result
in the withdrawal, cancellation, termination or modification of any
licence held by any member of the Wider Gresham Group which is
necessary for the proper carrying on of its business and the
withdrawal, cancellation, termination or modification of which
might reasonably be expected to have a material adverse effect on
the Wider Gresham Group taken as a whole; and
|
|
(vi)
|
no member of the Wider Gresham Group
having conducted its business in material breach of any applicable
laws and regulations;
|
No discovery of certain matters regarding information,
liabilities and environmental issues
(k)
|
since 30 June 2023, except as
Disclosed, Bidco not having discovered:
|
|
(i)
|
that any financial, business or
other information concerning the Wider Gresham Group as publicly
announced prior to the date of this Announcement or disclosed at
any time to any member of the Wider Bidco Group or to any of their
advisers by or on behalf of any member of the Wider Gresham Group
prior to the date of this Announcement is misleading, contains a
misrepresentation of any fact, or omits to state a fact necessary
to make that information not misleading, in any such case to a
material extent in the context of the Wider Gresham Group taken as
a whole;
|
|
(ii)
|
that any member of the Wider Gresham
Group is subject to any liability (contingent or otherwise) and
which is material in the context of the Wider Gresham Group taken
as a whole;
|
|
(iii)
|
that any past or present member of
the Wider Gresham Group has failed to comply in any respect with
any applicable legislation, regulations or other requirements of
any jurisdiction or any Authorisations relating to the use,
treatment, storage, carriage, disposal, discharge, spillage,
release, leak or emission of any waste or hazardous substance or
any substance likely to impair the environment (including property)
or harm human health or otherwise relating to environmental matters
or the health and safety of humans, which non-compliance would be
likely to give rise to any liability including any penalty for
non-compliance (whether actual or contingent) on the part of any
member of the Wider Gresham Group which is material in the context
of the Wider Gresham Group taken as a whole;
|
|
(iv)
|
that there is or is reasonably
likely to be any obligation or liability (whether actual or
contingent) or requirement to make good, remediate, repair,
reinstate or clean up any property, asset or any controlled waters
currently or previously owned, occupied, operated or made use of or
controlled by any past or present member of the Wider Gresham Group
(or on its behalf), or in which any such member may have or
previously have had or be deemed to have had an interest, under any
environmental legislation, common law, regulation, notice,
circular, Authorisation or order of any Third Party or any other
person or body in any jurisdiction or to contribute to the cost
thereof or associated therewith or indemnify any person in relation
thereto, in each case which is material in the context of the Wider
Gresham Group taken as a whole;
|
|
(v)
|
that circumstances exist (whether as
a result of the Acquisition or otherwise) which would be reasonably
likely to lead to any Third Party instituting, or whereby any past
or present member of the Wider Gresham Group would be likely to be
required to institute, an environmental audit or take any other
steps which would in any such case be reasonably likely to result
in any liability (whether actual or contingent) to improve, modify
existing or install new plant, machinery or equipment or carry out
changes in the processes currently carried out or make good,
remediate, repair, re-instate or clean up any land or other asset
currently or previously owned, occupied or made use of by any past
or present member of the Wider Gresham Group (or on its behalf) or
by any person for which a member of the Wider Gresham Group is or
has been responsible, or in which any such member may have or
previously have had or be deemed to have had an interest, in each
case which is material in the context of the Wider Gresham Group
taken as a whole; or
|
|
(vi)
|
any information which affects the
import of any information disclosed at any time by or on behalf of
any member of the Wider Gresham Group in a manner which is
materially adverse in the context of the Acquisition;
|
Anti-corruption, sanctions, criminal property, IT
(l)
|
no past or present member, director,
officer, employee or agent of the Wider Gresham Group or any person
that performs or has performed services (or otherwise acts or has
acted) for or on behalf of any such company being or at any time
having been engaged in any activity, practice or conduct which
would constitute an offence under the Bribery Act 2010, the US
Foreign Corrupt Practices Act of 1977 or any other anti-corruption
legislation applicable to the Wider Gresham Group;
|
(m)
|
no asset nor any member of the Wider
Gresham Group constituting criminal property as defined by section
340(3) of the Proceeds of Crime Act 2002 (but disregarding
paragraph (f) of
that definition);
|
(n)
|
no past or present member, director,
officer, employee or agent of the Wider Gresham Group or any person
that performs or has performed services for or on behalf of any
such member, director, officer or employee being or at any time
having been engaged in any activity or business with, made any
investments in, made any funds or assets available to or received
any funds or assets from:
|
|
(i)
|
any government, entity or individual
in respect of which US or European Union persons, or persons
operating in those territories, are prohibited from engaging in
activities or doing business, or from receiving or making available
funds or economic resources, by US or European Union laws or
regulations, including the economic sanctions administered by the
United States Office of Foreign Assets Control, or HM Treasury
& Customs; or
|
|
(ii)
|
any government, entity or individual
targeted or covered by any of the economic sanctions administered
or imposed by the United Nations, the US (including, without
limitation, the United States Office of Foreign Assets Control),
the United Kingdom, the European Union (or any of its respective
member states) or any other governments or supranational body or
authority in any jurisdiction, save that this shall not apply if
and to the extent that it is or would be unenforceable by reason of
breach of any applicable Blocking Law, in each case to an extent
which is material in the context of the Wider Gresham Group taken
as a whole;
|
(o)
|
no member of the Wider Gresham Group
being or at any time having been engaged in a transaction which
would cause any member of the Wider Bidco Group to be in breach of
any applicable law or regulation on completion of the Acquisition,
including the economic sanctions administered by the United States
Office of Foreign Assets Control or HM Treasury & Customs or
any government, entity or individual targeted by any of the
economic sanctions of the United Nations, United States, the United
Kingdom or the European Union or any of its member states or any
other governments or supranational body or authority in any
jurisdiction, save that this shall not apply if and to the extent
that it is or would be unenforceable by reason of breach of any
applicable Blocking Law; and
|
(p)
|
no disruption having occurred in the
operation of the Wider Gresham Group as a result of issues relating
to information technology or any failure or other substandard
performance of any such information technology (including, without
limitation, any information security breach or unauthorised access
of, or unauthorised acts in relation to, any such information
technology), in each case which is material in the context of the
Wider Gresham Group.
|
Part B: Certain further terms
1.
|
Subject to the requirements of the
Panel, in accordance with the Takeover Code, Bidco reserves the
right, in its sole discretion, to waive:
|
|
a)
|
the deadline set out in Condition 1
in Part A of this Appendix 1, and any of the deadlines set out in
Condition 2 in Part A of this Appendix 1 for the timing of the
Court Meeting and the General Meeting. If any such deadline is not
met, Bidco will make an announcement by 8.00 a.m. on the Business
Day following such deadline confirming whether it has invoked or
waived the relevant Condition or agreed with Gresham to extend the
deadline in relation to the relevant Condition. In all other
respects, Condition 2 in Part A of this Appendix 1 cannot be
waived; and
|
|
b)
|
in whole or in part, all or any of
Conditions 3(a) to (p) (inclusive) in Part A of this Appendix
1.
|
2.
|
Conditions 3(a) to (p) (inclusive)
in Part A of this Appendix 1 must be fulfilled or waived by Bidco
by no later than 11.59 p.m. on the date immediately preceding the
date of the Scheme Court Hearing, failing which the Scheme will
lapse.
|
3.
|
Bidco shall be under no obligation
to waive (if capable of waiver), to determine to be or remain
satisfied or to treat as satisfied or fulfilled any of the
Conditions capable of waiver by a date earlier than the latest date
specified above for the fulfilment or waiver thereof,
notwithstanding that the other Conditions of the Acquisition may at
such earlier date have been waived or fulfilled and that there are
at such earlier date no circumstances indicating that any of such
Conditions may not be capable of fulfilment.
|
4.
|
If Bidco is required by the Panel to
make an offer for Gresham Shares under the provisions of Rule 9 of
the Takeover Code, Bidco may make such alterations to any of the
above Conditions and terms of the Acquisition as are necessary to
comply with the provisions of that Rule.
|
5.
|
Under Rule 13.5(a) of the Takeover
Code and subject to paragraph 6 below, Bidco may only invoke a
Condition so as to cause the Acquisition not to proceed, to lapse
or to be withdrawn with the consent of the Panel. The Panel will
normally only give its consent if the circumstances which give rise
to the right to invoke the Condition are of material significance
to Bidco in the context of the Acquisition. This will be judged by
reference to the facts of each case at the time that the relevant
circumstances arise.
|
6.
|
Condition 1 (subject to Rule 12 of
the Takeover Code), Conditions 2(a)(i), 2(b)(i), 2(c) and 2(d)
above and, if applicable, any acceptance condition if the
Acquisition is implemented by means of an Offer, are not subject to
Rule 13.5(a) of the Takeover Code.
|
7.
|
Any Condition that is subject to
Rule 13.5(a) may be waived by Bidco.
|
8.
|
The Gresham Shares acquired under
the Acquisition will be acquired fully paid and free from all
liens, equities, charges, encumbrances, options, rights of
pre-emption and any other third party rights and interests of any
nature and together with all rights now or hereafter attaching or
accruing to them, including, without limitation, voting rights and
the right to receive and retain in full all dividends and other
distributions (if any) announced, declared, made or paid, or any
other return of capital (whether by reduction of share capital or
share premium account or otherwise) made, in each case by reference
to a record date falling on or after the Effective Date.
|
9.
|
If, on or after the date of this
Announcement but prior to the Effective Date, any dividend and/or
other form of capital return or distribution is announced,
declared, made or paid or becomes payable in respect of Gresham
Shares (other than the Permitted Dividend), Bidco reserves the
right to reduce the consideration payable under the terms of the
Cash Offer by an amount up to the aggregate amount of such dividend
and/or distribution and/or return of capital, in which case any
reference in this Announcement to the consideration payable under
the Cash Offer will be deemed to be a reference to the
consideration as so reduced. Any exercise by Bidco of its rights
referred to in this paragraph shall be the subject of an
announcement and, for the avoidance of doubt, shall not be regarded
as constituting any revision or variation of the terms of the
Scheme. In such circumstances, Gresham Shareholders would be
entitled to retain any such dividend, distribution or other return
of capital declared, made or paid which becomes payable. If and to
the extent that any such dividend, distribution or other return of
capital (other than the Permitted Dividend) is announced, declared,
made or paid or becomes payable and is either: (i) transferred
pursuant to the Acquisition on a basis which entitles Bidco to
receive the dividend, distribution or other return of capital and
to retain it; or (ii) cancelled before payment, the consideration
payable under the terms of the Cash Offer shall not be subject to
change in accordance with this paragraph 9. Any exercise by Bidco of its rights
referred to in this paragraph 9
shall not be regarded as constituting any revision
or variation of the terms of the Acquisition.
|
10.
|
Bidco reserves the right to elect to
implement the Acquisition by way of an Offer as an alternative to
the Scheme (subject to the consent of the Panel). In such event,
the Offer will be implemented on substantially the same terms, so
far as applicable, as those which would apply to the Scheme,
subject to appropriate amendments to reflect, among other things,
the change in the method of effecting the Acquisition (including,
without limitation: (i) the inclusion of an acceptance condition
set at 90 per cent. of the Gresham Shares to which such Offer
relates (or such other percentage as Bidco may, subject to the
rules of the Takeover Code and with the consent of the Panel,
decide); and (ii) those required by, or deemed appropriate by,
Bidco under applicable law). Further, if sufficient acceptances of
such Offer are received and/or sufficient Gresham Shares are
otherwise acquired, it is the intention of Bidco to apply the
provisions of the Companies Act 2006 to acquire compulsorily any
outstanding Gresham Shares to which such offer relates.
|
11.
|
The availability of the Acquisition
to persons not resident in the United Kingdom may be affected by
the laws or regulatory requirements of the relevant jurisdictions.
Persons who are not resident in the United Kingdom should inform
themselves about and observe any applicable
requirements.
|
12.
|
The Acquisition is not being made,
directly or indirectly, in, into or from, or by use of the mails
of, or by any means of instrumentality (including, but not limited
to, facsimile, e-mail or other electronic transmission, telex or
telephone) of interstate or foreign commerce of, or of any facility
of a national, state or other securities exchange of, any
Restricted Jurisdiction.
|
13.
|
This Announcement and any rights or
liabilities arising hereunder, the Acquisition and the Scheme, and
any proxies will be governed by English law and be subject to the
jurisdiction of the Court and to the Conditions and further terms
set out in this Appendix 1 and to be set out in the Scheme
Document. The Acquisition will be governed by the laws of England
and Wales and be subject to the jurisdiction of the English courts
and to the Conditions set out above. The Scheme will be subject to
the applicable requirements of English law, the Takeover Code, the
Panel, the London Stock Exchange, the Registrar of Companies and
the Financial Conduct Authority.
|
14.
|
Each of the Conditions shall be
regarded as a separate Condition and shall not be limited by
reference to any other Condition.
|
APPENDIX 2
SOURCES AND BASES OF INFORMATION
In this Announcement, unless otherwise stated or the
context otherwise requires, the following sources have been
used:
1.
|
historical financial information
relating to the Gresham Group has been extracted or derived
(without any adjustment) from the 2022 Gresham Annual Report and
the Trading Announcement announced on 11 January 2024;
|
2.
|
as at the close of business on 8
April 2024 (being the Last Practicable Date), there were 83,874,458
Gresham Shares in issue. The International Securities
Identification Number (ISIN) for Gresham Shares is
GB0008808825;
|
3.
|
the value attributable to the entire
issued ordinary share capital of Gresham is based on the fully
diluted share capital of Gresham (being 89,559,438 Gresham Shares).
That has been calculated on the basis of: (a) 83,874,458 Gresham
Shares in issue on 8 April 2024 (being the Last Practicable Date);
and (b) up to a further 5,684,980 Gresham Shares which may be
issued on or after the date of this Announcement, but before the
Scheme Record Time, following the exercise of options and vesting
of awards under the Gresham Share Plans;
|
4.
|
all prices and closing prices for
Gresham Shares are closing middle market quotations derived from
the London Stock Exchange Daily Official List (SEDOL);
and
|
5.
|
volume-weighted average prices have
been derived from Bloomberg and have been rounded to the nearest
single decimal place.
|
APPENDIX 3
DETAILS OF IRREVOCABLE UNDERTAKINGS AND LETTERS OF INTENT
1.
Gresham Directors
The Gresham Directors who are interested in Gresham
Shares have given irrevocable undertakings to vote (or, where
applicable, procure voting) in favour of the Scheme at the Court
Meeting and the Special Resolution to be proposed at the General
Meeting (or in the event that the Acquisition is implemented by an
Offer, to accept or procure acceptance of such Offer) in respect of
their own beneficial holdings (and those of their connected
persons) of Gresham Shares:
Name
|
Total Number of
Gresham Shares
|
Percentage of existing issued Gresham share
capital
|
Ian Manocha
|
166,640
|
0.20 per cent.
|
Thomas Mullan
|
76,054
|
0.09 per cent.
|
Andrew Balchin
|
17,608
|
0.02 per cent.
|
Jennifer Knott
|
31,250
|
0.04 per cent.
|
Oliver Scott
|
155,434
|
0.19 per cent.
|
The irrevocable undertakings given by the above named
Gresham Directors require them to vote in favour of the Scheme at
the Court Meeting.
The irrevocable undertakings provided by each of the
above named Gresham Directors shall cease to be binding on the
earlier of the following occurrences: (i) if the Scheme Document or
the Offer Document (as the case may be) has not been published
within 28 days of the issue of this Announcement (or within such
longer period as Bidco, with the consent of the Panel, determines),
provided that if Bidco elects to exercise its right to implement
the Acquisition by way of an Offer, the time period in this
paragraph (i) shall be extended to refer to within 28 days of the
issue of the press announcement announcing the change in structure
(or such other date for the publication of the Offer Document as
the Panel may require); or (ii) on the earlier of (I) the Long-Stop
Date; or (II) the date on which the Acquisition (whether
implemented by way of a Scheme or Offer) is withdrawn or lapses in
accordance with its terms, or fails to be sanctioned by the Court
and/or approved by a General Meeting in the case of a Scheme
(unless the Acquisition is withdrawn or lapses solely as a result
of Bidco exercising its right to implement the Acquisition by way
of an Offer rather than by way of a Scheme) and no new, revised or
replacement takeover offer or scheme of arrangement is or has been
announced by Bidco, in accordance with Rule 2.7 of the Takeover
Code, within 10 Business Days after any such lapse or renewal.
2.
Gresham Shareholders (other than the Gresham Directors)
In addition to the above mentioned Gresham Directors,
each of the following Gresham Shareholders has given an irrevocable
undertaking to vote (or, where applicable, procure voting) in
favour of the Scheme at the Court Meeting and the Special
Resolution to be proposed at the General Meeting (or in the event
that the Acquisition is implemented by an Offer, to accept or
procure acceptance of such Offer) in respect of the Gresham Shares
in which it is interested.
Name
|
Total Number of
Gresham Shares
|
Percentage of existing issued
Gresham share capital
|
Kestrel Partners LLP
|
20,004,573
|
23.85
|
Herald Investment Trust plc
|
4,321,274
|
5.15
|
The obligations contained in the irrevocable
undertakings provided by each of the named Gresham Shareholders
(other than Gresham Directors) above lapse and cease to have effect
if: (i) the Acquisition has not completed by 5.00 p.m. on the
Long-Stop Date; or (ii) the Acquisition (whether implemented by way
of a Scheme or an Offer) lapses or is withdrawn in a manner which
is permitted by the Panel, save where such lapse or withdrawal is
as a result of Bidco exercising its right to implement the
Acquisition by way of an Offer rather than by way of a Scheme or
vice versa in accordance with the Takeover Code.
The Kestrel Irrevocable will also cease to be binding
if any third party announces a firm intention to make an offer in
accordance with Rule 2.7 of the Takeover Code for all of the issued
and to be issued ordinary share capital of Gresham which puts a
value on each Gresham Share of at least 188 pence, and by no later
than 5:00pm on the fifth business day after the date on which such
an offer is made, the consideration per Gresham Share offered by
Bidco is not increased by Bidco such that Bidco's offer is of a
value equal to or exceeding such higher competing offer made by the
relevant third party.
The Herald Irrevocable will also cease to be binding
if any third party announces a firm intention to make an offer in
accordance with Rule 2.7 of the Takeover Code for all of the issued
and to be issued ordinary share capital of Gresham which puts a
value on each Gresham Share of at least 188 pence, and by no later
than 5:00pm on the fifth business day after the date on which such
an offer is made, the consideration per Gresham Share offered by
Bidco is not increased by Bidco such that Bidco's offer is of a
value equal to or exceeding 10% above such higher competing offer
made by the relevant third party.
3.
Letters of Intent
Schroder Investment Management Limited, Amati Global
Investors Limited and J O Hambro Capital Management Limited have
each given a non-binding, revocable letter of intent to vote (or,
where applicable, procure voting) in favour of the Scheme at the
Court Meeting and the Special Resolution to be proposed at the
General Meeting (or in the event that the Acquisition is
implemented by an Offer, to accept or procure acceptance of such
Offer) in respect of, in aggregate, 13,325,000 Gresham Shares,
representing approximately 15.89 per cent. of the existing issued
ordinary share capital of Gresham and 15.89 per cent. of the Scheme
Shares eligible to vote at the Court Meeting, in each case, as at
the Last Practicable Date.
Further, Schroder Investment Management Limited and J
O Hambro Capital Management Limited have indicated in their
respective letters that they will vote (or, where applicable,
procure voting) in favour of the Scheme at the Court Meeting and
the Special Resolution to be proposed at the General Meeting (or in
the event that the Acquisition is implemented by an Offer, to
accept or procure acceptance of such Offer) in respect of their
respective Gresham Shares, even if a third party other than Bidco
or a subsidiary of Bidco or any person acting in concert with Bidco
announces its firm intention to make an offer in accordance with
Rule 2.7 of the Takeover Code to acquire all of the issued and to
be issued ordinary share capital of Gresham which puts a value on
each Gresham Share of less than 180 pence (in respect of Schroder
Investment Management Limited) or less than 188 pence (in respect
of J O Hambro Capital Management Limited).
APPENDIX 4
DEFINITIONS
"2022 Gresham Annual
Report"
|
the annual report and audited accounts of Gresham for
the year ended 31 December 2022;
|
"Acquisition"
|
the proposed acquisition of the entire issued and to
be issued share capital of Gresham (other than Excluded Shares) by
Bidco, to be effected by means of the Scheme, or should Bidco so
elect (subject to consent of the Panel, if required), by means of
an Offer and, where the context admits, any subsequent revision,
variation, extension or renewal thereof;
|
"Announcement"
|
this Announcement (including the summary of the full
announcement) made pursuant to Rule 2.7 of the Takeover Code;
|
"Articles"
|
the articles of association of Gresham, as amended
from time to time;
|
"Authorisations"
|
regulatory authorisations, orders, recognitions,
grants, consents, clearances, confirmations, certificates,
licences, permissions or approvals in each case of a Third
Party;
|
"Bidco"
|
Alliance Bidco Ltd, a private limited company
incorporated in England and Wales on 19 December 2022 with
registered number 14547056 and whose registered office is at 32
Cornhill, London, England, EC3V 3SG;
|
"Bidco
Group"
|
Bidco and its subsidiary undertakings and, where the
context permits, each of them;
|
"Blocking
Law"
|
(i) any provision of Council Regulation (EC) No
2271/1996 of 22 November 1996 (or any law or regulation
implementing such Regulation in any member state of the European
Union or the United Kingdom); (ii) any provision of Council
Regulation (EC) No 2271/1996 of 22 November 1996, as it forms part
of domestic law of the United Kingdom by virtue of the European
Union (Withdrawal) Act 2018; or (iii) any similar blocking or
anti-boycott law;
|
"Business
Day"
|
any day (excluding any Saturday or Sunday or any
public holiday in England) on which banks in the City of London are
generally open for business;
|
"Cash
Offer"
|
163 pence per Scheme Share;
|
"Companies Act
2006"
|
the United Kingdom Companies Act 2006 (as amended
from time to time);
|
"Conditions"
|
the conditions to the implementation of the
Acquisition, as set out in Appendix 1 to this Announcement and to
be set out in the Scheme Document;
|
"Confidentiality
Agreement"
|
has the meaning given to it in paragraph 11.1 of this
Announcement;
|
"Court"
|
the High Court of Justice in England and Wales;
|
"Court
Meeting"
|
the meeting or meetings of the Scheme Shareholders
(or any class or classes thereof) to be convened by order of the
Court pursuant to section 896 of the Companies Act 2006 (notice of
which will be set out in the Scheme Document) for the purpose of
considering and, if thought fit, approving the Scheme (with or
without amendment) and any adjournment, postponement or
reconvention thereof;
|
"CREST"
|
the system for the paperless settlement of trades in
securities and the holding of uncertificated securities operated by
Euroclear in accordance with the Crest Regulations;
|
"CREST
Regulations"
|
the Uncertificated Securities Regulations 2001 (SI
2001 No. 2001/ 3755) as transposed into United Kingdom law by EUWA
and as further amended by secondary legislation made under EUWA
from time to time;
|
"Dealing
Disclosure"
|
has the same meaning as in Rule 8 of the Takeover
Code;
|
"Disclosed"
|
the information disclosed by or on behalf of
Gresham:
(i)
in the 2022 Gresham Annual Report;
(ii) in
Gresham's financial results for the six month period ended
30 June 2023;
(iii) in this
Announcement;
(iv) in any
other announcement to a Regulatory
Information Service prior to the publication of this
Announcement; and
(v) as otherwise
fairly disclosed in writing by or on behalf of Gresham to
Bidco or STG (or each of their
respective officers, employees, agents or advisers in
their capacity as such) prior to the date of this
Announcement (including via the virtual data room
operated by or on behalf of Gresham in respect of the
Acquisition);
|
"Disclosure Guidance
and Transparency Rules"
|
the disclosure guidance and transparency rules made
by the Financial Conduct Authority and forming part of the
Financial Conduct Authority's handbook of rules and guidance, as
amended from time to time;
|
"DSBP"
|
the Gresham Deferred Share Bonus Plan, adopted on 11
December 2017 and as amended from time to time (and including the
United States Restricted Share Unit Award Sub-Plan thereto);
|
"EBITDA"
|
earnings before interest, taxation, depreciation and
amortisation;
|
"Effective"
|
in the context of the Acquisition: (i) if the
Acquisition is implemented by way of the Scheme, the Scheme having
become effective pursuant to its terms; or (ii) if the Acquisition
is implemented by way of the Offer, the Offer having been declared
or having become unconditional in all respects in accordance with
the requirements of the Takeover Code;
|
"Effective
Date"
|
the date on which the Scheme becomes Effective;
|
"Euroclear"
|
Euroclear UK & Ireland Limited (a company
incorporated in England and Wales with registered number 02878738,
being the operator of CREST);
|
"EUWA"
|
the European Union (Withdrawal) Act 2018;
|
"Excluded
Shares"
|
any Gresham Shares which are:
(i) held by Gresham as treasury shares
(within the meaning of the Companies Act);
(ii) registered in the name of, or
beneficially owned by, Bidco or any other member of the Wider Bidco
Group; or
(iii) registered in the name of, or
beneficially owned by STG,
in each case, at the relevant time;
|
"FY2023"
|
the financial year of Gresham ended 31 December
2023;
|
"General
Meeting"
|
the general meeting of Gresham Shareholders
(including any adjournment thereof) to be convened in connection
with the Scheme for the purpose of considering and, if thought fit,
approving the Special Resolution;
|
"Gresham"
|
Gresham Technologies plc, a public limited company
incorporated in England and Wales on 14 September 1972 with
registered number 01072032 and whose registered office is at
Aldermary House, 10-15 Queen Street, London, EC4N 1TX;
|
"Gresham
Directors" or "Gresham
Board"
|
the directors of Gresham as at the date of this
Announcement or, where the context so requires, the directors of
Gresham from time to time;
|
"Gresham
Group"
|
Gresham and its subsidiary undertakings and, where
the context permits, each of them;
|
"Gresham
Shareholders"
|
the holders of Gresham Shares;
|
"Gresham
Shares"
|
the existing unconditionally allotted or issued fully
paid ordinary shares of 5 pence each in the capital of Gresham and
any further such ordinary shares which are unconditionally allotted
or issued before (i) the Scheme becomes Effective or (ii) if the
Acquisition is implemented by way of an Offer, before the Offer
having been declared or having become unconditional in accordance
with the requirements of the Takeover Code;
|
"Gresham Share
Plans"
|
(i) the Gresham Enterprise Management Incentive Plan,
adopted on 30 December 2010 and as amended from time to time; (ii)
the Gresham Unapproved Plan, adopted on 30 December 2010 and as
amended from time to time; (iii) the DSBP; and (iv) the Gresham
Performance Share Plan, adopted on 30 December 2020, and as amended
from time to time;
|
"Houlihan
Lokey"
|
Houlihan Lokey Advisory Limited;
|
"Invested Bonus
Share Plan"
|
the arrangement connected with the DSBP pursuant to
which participants purchase Gresham Shares with their bonus and
hold or have such Gresham Shares held pursuant to certain
conditions;
|
"Last Practicable
Date"
|
8 April 2024, being the last practicable date prior
to publication of this Announcement;
|
"London Stock
Exchange"
|
London Stock Exchange plc or its successor;
|
"Long-Stop
Date"
|
9 January 2025 or such later date as may be agreed in
writing by Bidco and Gresham (with the Panel's consent and as the
Court may approve (if such approval(s) is or are required));
|
"Main
Market"
|
the market of that name operated by the London Stock
Exchange;
|
"Market Abuse
Regulation"
|
the United Kingdom version of the Market Abuse
Regulation (EU) No 596/2014, which came into effect on 1 January
2021 when the EU Market Abuse Regulation (EU) No 596/2014 was
incorporated into United Kingdom domestic law by EUWA, with certain
modifications;
|
"Meetings"
|
the Court Meeting and the General Meeting and, where
the context permits, each of them;
|
"Non-Executive
Directors"
|
means Richard Last, Andy Balchin, Jenny Knott and
Oliver Scott;
|
"Offer"
|
if, subject to the consent of the Panel, the
Acquisition is implemented by way of a takeover offer as defined in
Chapter 3 of Part 28 of the Companies Act 2006, the offer to be
made by or on behalf of Bidco to acquire the entire issued and to
be issued ordinary share capital of Gresham and, where the context
admits, any subsequent revision, variation, extension or renewal of
such offer;
|
"Offer
Document"
|
should the Acquisition be implemented by means of an
Offer, the document to be published by or on behalf of Bidco in
connection with the Offer, containing, inter alia, the terms and conditions
of the Offer;
|
"Offer
Period"
|
the Offer Period (as defined by the Takeover Code)
relating to Gresham commencing on the date of this Announcement and
ending on the earlier of the date on which the Scheme becomes
Effective and/or the date on which the Scheme lapses or is
withdrawn (or such other date as the Panel may decide);
|
"Official
List"
|
the Official List of the Financial Conduct
Authority;
|
"Opening Position
Disclosure"
|
has the same meaning as in Rule 8 of the Takeover
Code;
|
"Overseas
Shareholders"
|
Gresham Shareholders who are resident in, ordinarily
resident in, or citizens of, jurisdictions outside the United
Kingdom;
|
"Panel"
|
the Panel on Takeovers and Mergers;
|
"Permitted
Dividend"
|
the interim dividend of 0.75 pence per Gresham Share
for the year ended 31 December 2023 which is to be paid prior to
the Effective Date;
|
"Registrar of
Companies"
|
the Registrar of Companies in England and Wales;
|
"Regulatory
Information Service"
|
a regulatory information service as defined in the
Financial Conduct Authority Handbook;
|
"Restricted
Jurisdiction"
|
any jurisdiction where local laws or regulations may
result in a significant risk of civil, regulatory or criminal
exposure if information concerning the Acquisition is sent or made
available to Gresham Shareholders in that jurisdiction;
|
"Scheme"
|
the proposed scheme of arrangement under Part 26 of
the Companies Act 2006 between Gresham and Scheme Shareholders to
implement the Acquisition, with or subject to any modification,
addition or condition approved or imposed by the Court and agreed
to by Gresham and Bidco;
|
"Scheme Court
Hearing"
|
the hearing by the Court of the application to
sanction the Scheme pursuant to section 899 of the Companies Act
2006 and any adjournment, postponement or reconvening thereof;
|
"Scheme Court
Order"
|
the order of the Court sanctioning the Scheme under
section 899 of the Companies Act 2006;
|
"Scheme
Document"
|
the document to be despatched to Gresham Shareholders
and persons with information rights setting out, among other
things, the details of the Acquisition, an explanatory statement in
accordance with section 897 of the Companies Act 2006, the full
terms and conditions of the Scheme and containing the notices
convening the Court Meeting and the General Meeting;
|
"Scheme Record
Time"
|
the time and date specified as such in the Scheme
Document, expected to be 6.00 p.m. on the Business Day immediately
prior to the Effective Date, or such other time as Gresham and
Bidco may agree;
|
"Scheme
Shareholder"
|
a holder of Scheme Shares;
|
"Scheme
Shares"
|
(i) the Gresham Shares in issue at the
date of the Scheme Document;
(ii) any Gresham Shares issued after the
date of the Scheme Document and prior to the Scheme Voting Record
Time; and
(iii) any Gresham Shares issued at or after the
Scheme Voting Record Time and prior to the Scheme Record Time in
respect of which the original or any subsequent holder thereof is
bound by the Scheme, or shall by such time have agreed in writing
to be bound by the Scheme,
and, in each case, remaining in issue at the Scheme
Record Time but excluding any Excluded Shares;
|
"Scheme Voting
Record Time"
|
the date and time specified in the Scheme Document by
reference to which entitlement to vote at the Court Meeting will be
determined;
|
"Significant
Interest"
|
in relation to an undertaking, a direct or indirect
interest of 20 per cent. or more of the total voting rights
conferred by the equity share capital of such undertaking;
|
"Singer Capital
Markets"
|
Singer Capital Markets Advisory LLP;
|
"Special
Resolution"
|
the special resolution to be proposed at the General
Meeting for the purposes of authorising the Gresham Directors to
take such action as they consider necessary to implement the Scheme
and which must be passed by Gresham Shareholders (to the extent
permitted to vote pursuant to the Takeover Code, applicable law or
the direction or order of the Court whose sanction is required for
the Scheme) representing 75 per cent. or more of the votes cast
(either in person or by proxy) at the General Meeting;
|
"STG"
|
STG Partners, LLC;
|
"STG
Funds"
|
STG Allegro, L.P., STG Allegro-A, L.P. and STG
Allegro Executive Fund, L.P.;
|
"Takeover
Code"
|
the City Code on Takeovers and Mergers of the United
Kingdom issued by the Panel, as amended from time to time;
|
"Third
Party"
|
each of a central bank, government or governmental,
quasi-governmental, supranational, statutory, regulatory,
environmental, administrative, fiscal or investigative body, court,
trade agency, association, institution, employee representative
body or any other body or person whatsoever in any
jurisdiction;
|
"United
Kingdom"
|
the United Kingdom of Great Britain and Northern
Ireland;
|
"US" or
"United States"
|
the United States of America, its territories and
possessions, any state of the United States of America and the
District of Columbia;
|
"US Exchange
Act"
|
US Securities Exchange Act of 1934 (as amended), and
the rules and regulations promulgated thereunder;
|
"Wider Bidco
Group"
|
Bidco and its subsidiaries, subsidiary undertakings,
associated undertakings and any other body corporate, partnership,
joint venture or person in which Bidco and/or such subsidiaries or
undertakings (aggregating their interests) have a Significant
Interest;
|
"Wider Gresham
Group"
|
Gresham and its subsidiaries, subsidiary
undertakings, associated undertakings and any other body corporate,
partnership, joint venture or person in which Gresham and/or such
subsidiaries or undertakings (aggregating their interests) have a
Significant Interest; and
|
"William
Blair"
|
William Blair International, Limited.
|
For the purposes of this Announcement:
· "subsidiary", "subsidiary undertaking" and
"undertaking" have the
respective meanings given by the Companies Act 2006 and
"associated undertaking"
has the meaning given by paragraph 19 of Schedule 6 to the Large
and Medium-sized Companies and Groups (Accounts and Reports)
Regulations 2008 (other than paragraph 19(1)(b) of Schedule 6 to
those Regulations which shall be excluded for this purpose);
· all references to a
statutory provision or law or to any order or regulation shall be
construed as a reference to that provision, law, order or
regulation as extended, modified, replaced or re-enacted from time
to time and all statutory instruments, regulations and orders from
time to time made thereunder or validly deriving therefrom;
· all references to time
are to London time unless otherwise stated;
· all references to
"£" and "pence" are to the lawful currency of
the United Kingdom; and
· references to the
singular include the plural and vice versa.