TIDMTRE TIDMLEAF
RNS Number : 2881E
Trading Emissions PLC
17 December 2009
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NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO OR
FROM AUSTRALIA, CANADA OR JAPAN OR ANY JURISDICTION WHERE TO DO SO WOULD
CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF ANY SUCH JURISDICTION
17 December 2009
RECOMMENDED MERGER OF TRADING EMISSIONS PLC
AND LEAF CLEAN ENERGY COMPANY
Summary
* The Boards of Trading Emissions plc ("Trading Emissions") and Leaf Clean Energy
Company ("Leaf Clean") are pleased to announce today that they have reached
agreement on the terms of a recommended all-share merger of Leaf Clean and
Trading Emissions under which all of the issued and to be issued share capital
of Trading Emissions would be acquired by Leaf Clean.
* The Merger is to be implemented by means of a scheme of arrangement of Trading
Emissions under section 152 of the Isle of Man Companies Act 1931, which
requires the approval of Trading Emissions Shareholders and the sanction of the
Scheme by the Court.
* The Trading Emissions Board and the Leaf Clean Board believe that the Merger has
strategic and financial logic for Trading Emissions and Leaf Clean and offers
shareholders the opportunity to benefit from the growth opportunity expected to
result from combining the two companies.
* Trading Emissions is a closed-end investment company that specialises in
renewable energy projects and emissions instruments such as carbon credits. Leaf
Clean is a closed-end investment company specialising in clean energy companies
and projects, primarily in North America.
* The Merger will create the largest carbon focused company quoted in London with
a balanced portfolio of renewable energy and other carbon exposed assets in US,
Asia, Africa and Latin America.
* The Merger will be conducted on a formula asset value basis which is common
practice for investment company mergers.
* Under the Scheme Trading Emissions Shareholders will receive the following:
For every Trading Emissions Share such number of New Leaf Clean Shares as
shall have a value (calculated by reference to the Formula Asset Value of an
existing Leaf Clean Share at the Calculation Date) equal to 100 per cent. of the
Formula Asset Value of a Trading Emissions Share at the Calculation Date.
* For illustrative purposes only, had the Calculation Date been on 14 December
2009 (being the latest practicable date prior to this announcement) Trading
Emissions and Leaf Clean estimate that:
* FAV per Trading Emissions Share would have been approximately 161.6 pence and
FAV per Leaf Clean Share would have been approximately 98.4 pence;
* a Trading Emissions Shareholder would therefore have been entitled to
approximately 1.6424 New Leaf Clean Shares for every Trading Emissions Share
held;
* the Closing Price per Leaf Clean Share on 16 December 2009 was 77.5 pence,
therefore the implied offer price for each Trading Emissions Share would have
been 127.3 pence; and
* on the basis of the illustration above, the Merger would result in the issue in
aggregate of 422,810,148 New Leaf Clean Shares representing approximately 69.7
per cent. of the enlarged share capital of Leaf Clean.
* Following completion of the Merger:
* the initial composition of the board of the Enlarged Group will be Neil Eckert
as non-executive chairman and Malcolm Gillies, Bran Keogh, J. Curtis Moffatt,
Bertrand Rassool, Peter Vanderpump and Nigel Wood as non-executive directors. It
is the intention to strengthen such board as soon as is practicable by adding an
additional non-executive director who is likely to have experience of private
equity investments;
* EEA, which currently acts as investment adviser to both Trading Emissions and
Leaf Clean, will be appointed to act as investment adviser to the Enlarged Group
under a new investment advisory agreement, further details of which are set out
below; and
* subject to satisfying eligibility criteria, Leaf Clean intends to make an
application to obtain a primary listing on the Official List as soon as
possible. This is expected to occur during the second half of 2010. As the
Merger constitutes a reverse takeover of Leaf Clean under the AIM Rules and will
result in an automatic cancellation of the admission to trading of Leaf Clean
Shares on AIM, Leaf Clean will initially be applying for re-admission to AIM
upon completion of the Merger.
* Following the Merger, the Enlarged Group will have an aggregated FAV of
approximately GBP596.7 million (with GBP416.0 million attributable to Trading
Emissions and GBP180.7 million attributable to Leaf Clean) based on an
illustrative calculation date as at 14 December 2009.
* Following the Merger, the Enlarged Group will be well funded, with last reported
audited cash balances (restricted and unrestricted cash) as at 30 June 2009 of
approximately GBP178.1 million and GBP102.0 million for Trading Emissions and
Leaf Clean respectively.
* Those Trading Emissions Directors who hold Trading Emissions Shares have
irrevocably undertaken to vote, or to procure votes in favour of the resolutions
to be proposed at the Court Meeting and the Trading Emissions EGM in respect of
their own beneficial holdings, representing approximately 0.7 per cent. of the
existing issued share capital of Trading Emissions. In addition, the Leaf Clean
Directors have irrevocably undertaken to vote, or to procure votes in favour of
the resolutions to be proposed at the Leaf Clean EGM relating to the Merger in
respect of their own beneficial holdings, representing approximately 0.1 per
cent. of the existing issued share capital of Leaf Clean.
* In addition, irrevocable undertakings to vote, or to procure votes, in favour of
the Trading Emissions Resolutions and the Leaf Clean Resolutions have been
received from Trading Emissions Shareholders representing approximately 46.3 per
cent. of the voting rights of Trading Emissions and from Leaf Clean Shareholders
representing 43.0 per cent of the voting rights of Leaf Clean, respectively.
* Letters of intent to vote, or to procure votes, in favour of the Trading
Emissions Resolutions and the Leaf Clean Resolutions have been received from
Trading Emissions Shareholders representing 15.8 per cent. of the voting rights
of Trading Emissions and from Leaf Clean Shareholders representing 10.4 per
cent. of the voting rights of Leaf Clean, respectively.
* Therefore, irrevocable undertakings and letters of intent to vote, or to procure
to vote, in favour of the Trading Emissions Resolutions and the Leaf Clean
Resolutions have been received from Trading Emissions Shareholders representing
62.8 per cent. of the voting rights of Trading Emissions and from Leaf Clean
Shareholders representing 53.5 per cent. of the voting rights of Leaf Clean
respectively.
* The Merger will be subject to the Conditions and further terms set out in
Appendix I to this announcement and to be set out in the Scheme Document,
including, amongst other things, the sanction of the Court and the approval of
the shareholders of both Trading Emissions and Leaf Clean.
* Trading Emissions intends to post the Scheme Document as soon as practicable
after the publication of this announcement.
Commenting on the Merger, Neil Eckert, Non-Executive Chairman of Trading
Emissions, said:
"The proposed merger of these two well matched and highly complementary
businesses provides compelling benefits for their shareholders with important
scale and geographic diversification giving greater opportunity to benefit from
the expected growth in a globally developing clean energy industry".
Commenting on the Merger, Peter Tom, Non-Executive Chairman of Leaf Clean, said:
"A merger with Trading Emissions would give Leaf Clean shareholders the
opportunity to gain additional exposure to the carbon market and increase its
geographic diversification. The increased scale of the combined group will put
Leaf Clean in a stronger position to take advantage of the growing opportunities
in clean energy."
The summary forms part of and should be read in conjunction with this
announcement and the Appendices. Appendix I of the announcement sets out the
conditions and principal further terms of the Merger. Further details of the
calculation of Trading Emissions Shareholder entitlements under the Scheme are
set out in Appendix II of this announcement. Appendix III of the announcement
contains information on sources and bases used in the announcement. Appendix IV
of the announcement contains further details of the irrevocable undertakings and
letters of intent. Certain terms used in the announcement are defined in
Appendix V of the announcement.
Liberum Capital Limited is acting as nominated adviser and Rule 3 adviser to
Trading Emissions in respect of the Merger.
Cenkos Securities plc is acting as nominated adviser and financial adviser to
Leaf Clean in respect of the Merger. Enquiries:
Trading Emissions (via Haggie Financial PR) Leaf Clean (via Bulletin PR)
Neil Eckert Peter Tom
Malcolm Gillies Bran Keogh
Liberum Capital Limited Cenkos Securities plc
(nominated adviser and Rule 3 adviser to (nominated adviser and financial
adviser to Leaf Clean)
Trading Emissions)
Tel: +44 (0) 20 3100 2000 Tel: +44 (0) 20 7397 8900
Steve Pearce Ivonne Cantú
Tom Fyson Elizabeth Bowman
Haggie Financial PR Bulletin PR
(PR adviser to Trading Emissions) (PR adviser to Leaf Clean)
Tel: +44 (0) 20 7417 8989 Tel: +44 (0) 7947 915028
Peter RigbyIan Beestin
Alexandra Parry
Important information
This announcement is not intended to, and does not constitute, or form part of,
an offer or an invitation to purchase or subscribe for any securities or a
solicitation of an offer to buy any securities in any jurisdiction in which such
offer or solicitation is unlawful. The Merger relates to the shares of Trading
Emissions, an Isle of Man company, and this announcement has been prepared in
connection with a proposal in relation to a scheme of arrangement pursuant to,
and for the purposes of complying with, Isle of Man law and the Code. The
information disclosed in this announcement may not be the same as that which
would have been disclosed if this announcement had been prepared in accordance
with the laws of jurisdictions outside the Isle of Man.
This announcement does not constitute a prospectus or a prospectus equivalent
document. Shareholders of Trading Emissions and Leaf Clean are advised to read
carefully the formal documentation in relation to the Merger once it has been
despatched. The proposals of the Merger will be made solely through the Scheme
Document, which will contain the full terms and conditions of the Scheme,
including details of how to vote with respect to the Scheme. Any acceptance or
other response to the proposals should be made only on the basis of the
information in the Scheme Document.
The Trading Emissions Directors accept responsibility for all the information
contained in this Announcement except for that information for which the Leaf
Clean Directors accept responsibility. To the best of the knowledge and belief
of the Trading Emissions Directors (who have taken all reasonable care to ensure
that such is the case), the information contained in this document for which
they are responsible is in accordance with the facts and does not omit anything
likely to affect the import of such information.
The Leaf Clean Directors accept responsibility for all information in this
Announcement relating to Leaf Clean, the Leaf Clean Group and its directors. To
the best of the knowledge and belief of the Leaf Clean Directors (who have taken
all reasonable care to ensure that such is the case), the information contained
in this document for which they are responsible is in accordance with the facts
and does not omit anything likely to affect the import of such information.
Liberum Capital, which is authorised and regulated in the United Kingdom by the
Financial Services Authority, is acting exclusively as nominated adviser and
Rule 3 adviser to Trading Emissions in respect of the Merger, and for no one
else in relation to the Merger and will not be responsible to anyone other than
Trading Emissions for providing the protections afforded to the clients of
Liberum Capital nor for providing advice in relation to the Merger or any other
matter referred to herein. Liberum Capital will not regard any other person
(whether or not a recipient of this announcement) as its client in relation to
the Merger and will not be responsible to anyone other than Trading Emissions
for providing any advice in relation to the Merger, the contents of this
announcement or any transaction or arrangement referred to herein. No liability
whatsoever is accepted by Liberum Capital for the accuracy of any information or
opinions contained in this announcement (other than its advice to the Trading
Emissions Board) or for the omission of any material information.
Cenkos Securities, which is authorised and regulated in the United Kingdom by
the Financial Services Authority, is acting as nominated adviser and financial
adviser to Leaf Clean in respect of the Merger, and no one else in connection
with the Merger and will not be responsible to anyone other than Leaf Clean for
providing the protections afforded to the clients of Cenkos Securities nor for
providing advice in relation to the Merger or any other matter referred to
herein. Cenkos Securities will not regard any other person (whether or not a
recipient of this announcement) as its client in relation to the Merger and will
not be responsible to anyone other than Leaf Clean for providing any advice in
relation to the Merger, the contents of this announcement or any transaction or
arrangement referred to herein. No liability whatsoever is accepted by Cenkos
Securities for the accuracy of any information or opinions contained in this
announcement (other than its advice to the Leaf Clean Board) or for the omission
of any material information.
Overseas jurisdictions
The release, publication or distribution of this announcement in jurisdictions
other than the United Kingdom may be restricted by law and therefore persons
into whose possession this announcement comes should inform themselves about,
and observe, any applicable legal and regulatory requirements. Any failure to
comply with the applicable requirements may constitute a violation of the
securities laws of any such jurisdiction.
In particular, this announcement is not an offer of securities for sale in the
United States, Australia, Canada or Japan and the New Leaf Clean Shares, which
will be issued in connection with the Scheme, have not been, and will not be,
registered under the Securities Act of 1933, as amended (the "Securities Act")
or under the securities law of any state, district or other jurisdiction of the
United States, Australia, Canada or Japan and no regulatory clearance in respect
of the New Leaf Clean Shares has been, or will be, applied for in any
jurisdiction other than the United Kingdom. The New Leaf Clean Shares may not be
offered, sold, resold, delivered or distributed, directly or indirectly, in,
into or from the United States absent registration under the Securities Act or
pursuant to an exemption from registration thereunder. The New Leaf Clean Shares
may not be offered, sold, resold, delivered or distributed, directly or
indirectly, in, into or from Canada, Australia or Japan or to, or for the
account or benefit of, any resident of Australia, Canada or Japan absent an
exemption from registration or an exemption under relevant securities law. It is
expected that the New Leaf Clean Shares will be issued in reliance upon the
exemption from the registration requirements of the Securities Act provided by
Section 3(a)(10) thereof. Under applicable US securities laws, Trading Emissions
Shareholders (whether or not US persons) who are or will be "affiliates" of
Trading Emissions or Leaf Clean prior to, or of Leaf Clean after, the Effective
Date may be subject to timing, manner of sale and volume restrictions on the
sale of the New Leaf Clean Shares received in connection with the Scheme under
Rule 145 under the Securities Act. Trading Emissions Shareholders in the United
States should note that the Scheme relates to the shares of an Isle of Man
company that is a "foreign private issuer" as defined under Rule 3b-4 under the
US Securities Exchange Act of 1934, as amended (the "Exchange Act") and will be
governed by Isle of Man law. Neither the proxy solicitation nor the tender offer
rules under the Exchange Act will apply to the Scheme. Moreover, the Scheme will
be subject to the disclosure requirements and practices applicable in the UK to
schemes of arrangement, which differ from the disclosure requirements of the US
proxy solicitation rules and tender offer rules. Financial information included
in this announcement and the Scheme documentation has been or will have been
prepared in accordance with accounting standards applicable in the UK that may
not be comparable to the accounting standards applicable to financial statements
of US companies.
Trading Emissions and Leaf Clean are companies incorporated and registered in
the Isle of Man and the Cayman Islands, respectively. All or a substantial
portion of the assets of Trading Emissions, Leaf Clean or their respective
directors and officers may be located outside of the United States and, as a
result, it may not be possible to satisfy a judgment against Trading Emissions,
Leaf Clean or their respective directors and officers in the United States or to
enforce a judgment obtained by US courts against Trading Emissions, Leaf Clean
or their respective directors and officers outside the United States.
If the Merger is implemented by way of a takeover offer, it will be made in
accordance with the applicable US tender offer rules and applicable US
securities laws. If the Merger is implemented by way of a takeover offer, Leaf
Clean does not presently intend to register the New Leaf Clean Shares to be
issued in connection with such offer under the Securities Act or under the
securities laws of any state, district, or other jurisdiction of the United
States and any issuance of New Leaf Clean Shares in a takeover offer will be
conducted pursuant to applicable exemptions from, or in a transaction not
subject to, the registration requirements of the Securities Act or such other
securities laws.
Forward looking statements
This announcement may contain statements about the Trading Emissions Group and
the Leaf Clean Group that are or may be forward-looking statements. All
statements other than statements of historical facts included in this
announcement may be forward-looking statements. Without limitation, any
statements preceded or followed by or that include the words "targets", "plans",
"believes", "expects", "aims", "intends", "will", "may", "anticipates",
"estimates", "projects" or words or terms of similar substance or the negative
thereof are forward-looking statements. Forward-looking statements 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 the operations of the
Trading Emissions Group or the Leaf Clean Group; and (iii) the effects of
government regulation on the business of the Trading Emissions Group or the Leaf
Clean Group.
These forward-looking statements are not guarantees of future performance. They
have not been reviewed by the auditors of Trading Emissions or Leaf Clean. These
forward-looking statements involve known and unknown risks, uncertainties and
other factors which may cause the actual results, performance or achievements of
any such person, or industry results, to be materially different from any
results, performance or achievements expressed or implied by such
forward-looking statements. These forward-looking statements are based on
numerous assumptions regarding the present and future business strategies of
such persons and the environment in which each will operate in the future. You
are cautioned not to place undue reliance on the forward-looking statements,
which speak only as of the date they were made. All subsequent oral or written
forward-looking statements attributable to the Trading Emissions Group or the
Leaf Clean Group or any of their members or any persons acting on their behalf
are expressly qualified in their entirety by the cautionary statement above. All
forward-looking statements included in this announcement are based on
information available on the date hereof. Neither Trading Emissions nor Leaf
Clean undertakes any obligation to update publicly or revise any forward-looking
statements.
Dealing disclosure requirements
Under the provisions of Rule 8.3 of the Code, if any person is or becomes
"interested" (directly or indirectly) in one per cent. or more of any class of
"relevant securities" of Leaf Clean or Trading Emissions, all "dealings" in any
"relevant securities" of that company (including by means of an option in
respect of or a derivative referenced to, any such "relevant securities") must
be publicly disclosed by no later than 3.30 p.m. (London time) on the Business
Day following the date of the relevant transaction. This requirement will
continue until the Effective Date or until the date on which the Scheme lapses
or is otherwise withdrawn or on which the "offer period" otherwise ends (or, if
Leaf Clean elects to effect the Merger by way of a takeover offer, until the
date on which such offer becomes or is declared, unconditional as to
acceptances, lapses or is otherwise withdrawn or on which the "offer period"
otherwise ends). If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire an "interest" in "relevant
securities" of Leaf Clean or Trading Emissions, they will be deemed to be a
single person for the purpose of Rule 8.3.
Under the provisions of Rule 8.1 of the Code, all "dealings" in "relevant
securities" of Leaf Clean or of Trading Emissions by Leaf Clean or Trading
Emissions, or by any of their respective "associates", must be disclosed by no
later than 12.00 noon (London time) on the London business day following the
date of the relevant transaction.
A disclosure table, giving details of the companies in whose "relevant
securities" "dealings" should be disclosed, and the number of such securities in
issue, can be found on the Panel's website at www.thetakeoverpanel.org.uk.
"Interests in securities" arise, in summary, when a person has long economic
exposure, whether conditional or absolute, to changes in the price of
securities. In particular, a person will be treated as having an "interest" by
virtue of the ownership or control of securities, or by virtue of any option in
respect of, or derivative referenced to, securities.
Terms in quotation marks are defined in the Code, which can also be found on the
Panel's website. If you are in any doubt as to whether or not you are required
to disclose a "dealing" under Rule 8, you should consult the Panel's website at
www.thetakeoverpanel.org.uk or contact the Panel on telephone number +44(0) 20
7638 0129, or fax number +44(0) 20 7236 7013.
Publication of this announcement
A copy of this announcement is available, subject to certain restrictions
relating to persons resident in restricted jurisdictions, on Trading Emissions's
website www.tradingemissionsplc.com and Leaf Clean's website
www.leafcleanenergy.com.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO OR
FROM AUSTRALIA, CANADA OR JAPAN OR ANY JURISDICTION WHERE TO DO SO WOULD
CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF ANY SUCH JURISDICTION
17 December 2009
RECOMMENDED MERGER OF TRADING EMISSIONS PLC
AND LEAF CLEAN ENERGY COMPANY
1. Introduction
The Boards of Trading Emissions plc ("Trading Emissions") and Leaf Clean Energy
Company ("Leaf Clean") are pleased to announce today that they have reached
agreement on the terms of a recommended all-share merger of Leaf Clean and
Trading Emissions under which all of the issued and to be issued share capital
of Trading Emissions would be acquired by Leaf Clean. The Merger will constitute
a reverse takeover for Leaf Clean under the AIM Rules. The Merger is to be
implemented by means of a scheme of arrangement between Trading Emissions and
the Scheme Shareholders under section 152 of the Isle of Man Companies Act 1931,
which requires the approval of Trading Emissions Shareholders and the sanction
of the Scheme by the Court.
The Merger will create the largest carbon focused company quoted in London with
a balanced portfolio of carbon credits, renewable energy projects and other
carbon exposed assets in US, Asia, Africa and Latin America.
Following the Merger, the Enlarged Group will have an aggregated FAV of
approximately GBP596.7 million (with GBP416.0 million attributable to Trading
Emissions and GBP180.7 million attributable to Leaf Clean) based on an
illustrative calculation date as at 14 December 2009.
Following the Merger, the Enlarged Group will be well funded, with last reported
audited cash balances (restricted and unrestricted cash) as at 30 June 2009 of
approximately GBP178.1 million and GBP102.0 million for Trading Emissions and
Leaf Clean respectively.
The Merger will be conducted on a formula asset value basis which is common
practice for investment company mergers, further details of which are set out in
paragraph 2 below and Appendix II of this announcement.
Following completion of the Merger:
* the initial composition of the board of the Enlarged Group will be Neil Eckert
as non-executive chairman and Malcolm Gillies, Bran Keogh, J. Curtis Moffatt,
Bertrand Rassool, Peter Vanderpump and Nigel Wood as non-executive directors. It
is the intention to strengthen such board as soon as is practicable by adding an
additional non-executive director who is likely to have experience of private
equity investments;
* EEA, which currently acts as investment adviser to both Trading Emissions and
Leaf Clean, will be appointed to act as investment adviser to the Enlarged Group
under a new investment advisory agreement, further details of which are set out
below; and
* subject to satisfying eligibility criteria, Leaf Clean intends to make an
application to obtain a primary listing on the Official List as soon as
possible. This is expected to occur during the second half of 2010. As the
Merger constitutes a reverse takeover for Leaf Clean under the AIM Rules and
will result in an automatic cancellation of the admission to trading of Leaf
Clean Shares on AIM, Leaf Clean will initially be applying for re-admission to
AIM upon completion of the Merger.
2. Terms of the Merger
It is intended that the Merger will be implemented by way of a court approved
scheme of arrangement under section 152 of the Act. The purpose of the Scheme is
to enable Leaf Clean to acquire the whole of the issued and to be issued
ordinary share capital of Trading Emissions. The Scheme is expected to become
effective in February 2010.
Under the Scheme Trading Emissions Shareholders will receive the following:
For every Trading Emissions Share such number of New Leaf Clean Shares as
shall have a value (calculated by reference to the Formula Asset Value of an
existing Leaf Clean Share at the Calculation Date) equal to 100 per cent. of the
Formula Asset Value of a Trading Emissions Share at the Calculation Date.
If the Scheme becomes effective, all the Scheme Shares will be transferred to
Leaf Clean and, in exchange, Trading Emissions Shareholders will be entitled to
receive New Leaf Clean Shares based on the respective Formula Asset Values of
Trading Emissions and Leaf Clean as at the Calculation Date. Further details of
the calculation of Trading Emissions Shareholder entitlements are set out in
Appendix II of this announcement.
For illustrative purposes only, had the Calculation Date been on 14 December
2009 (being the latest practicable date prior to this announcement) Trading
Emissions and Leaf Clean estimate that:
* FAV per Trading Emissions Share would have been approximately 161.6 pence and
FAV per Leaf Clean Share would have been approximately 98.4 pence;
* a Trading Emissions Shareholder would therefore have been entitled to
approximately 1.6424 New Leaf Clean Shares for every Trading Emissions Share
held;
* the Closing Price per Leaf Clean Share on 16 December 2009 was 77.5 pence,
therefore the implied offer price for each Trading Emissions Share would have
been 127.3 pence; and
* on the basis of the illustration above, the Merger would result in the issue in
aggregate of 422,810,148 New Leaf Clean Shares representing approximately 69.7
per cent. of the enlarged share capital of Leaf Clean.
This illustration and the estimates on which it is based should not be
considered or relied upon as indicative or an estimate of the actual Trading
Emissions FAV or Leaf Clean FAV. In particular, it should be noted that the FAV
per Trading Emissions Share on any particular day is dependent, among other
things, on carbon prices, which are volatile. Carbon prices on 14 December 2009
(being the latest practicable date prior to this announcement) have been used to
calculate the estimate of the FAV per Trading Emissions Share for the purposes
of the illustration above.
If the Scheme becomes effective, Trading Emissions will become a wholly-owned
subsidiary of Leaf Clean on the Effective Date and Scheme Shareholders will
receive the relevant consideration referred to above.
Fractions of New Leaf Clean Shares will not be allotted or issued pursuant to
the Scheme and fractional entitlements will be rounded down to the nearest whole
number of New Leaf Clean Shares. The Merger will be subject to the Conditions
and further terms set out in Appendix I to this announcement and to be set out
in the Scheme Document, and include approval of the Scheme by the Trading
Emissions Shareholders, approval of the Merger by the Leaf Clean Shareholders
and the sanction of the Scheme by the Court. The Scheme can only become
effective if all the Conditions have been satisfied or, where relevant, waived.
Subject to satisfying eligibility criteria, Leaf Clean intends to make an
application to obtain a primary listing on the Official List as soon as
possible. This is expected to occur during the second half of 2010. As the
Merger constitutes a reverse takeover for Leaf Clean under the AIM Rules and
will result in an automatic cancellation of the admission to trading of Leaf
Clean Shares on AIM, Leaf Clean will initially be applying for re-admission to
AIM upon completion of the Merger. In the event that any subsequent applications
to the UK Listing Authority and the London Stock Exchange for admission to the
Official List and admission to trading on the Main Market respectively are not
made or are unsuccessful, Leaf Clean's shares will remain admitted to trading on
AIM.
3. Background to and reasons for the Merger
The Trading Emissions Board and the Leaf Clean Board believe that the Merger has
strategic and financial logic for Trading Emissions and Leaf Clean. The Merger
will create an international clean energy investment company with a balanced
portfolio of clean energy assets and investments in North American and
international markets.
The Trading Emissions Board and the Leaf Clean Board believe that the Merger
will build on the existing strategies of the Trading Emissions Group and the
Leaf Clean Group and combine their complementary skills and operations. The
Merger is expected to put the Enlarged Group in a better position to capture the
growth opportunities that the Trading Emissions Board and the Leaf Clean Board
expect in the clean energy sectors.
The Trading Emissions Board and the Leaf Clean Board believe that the Merger
will create a combined investment company with enhanced prospects. The Enlarged
Group will benefit from:
* enhanced market position, scale and growth platform in the clean energy arena;
* exposure to a more diversified clean energy asset portfolio with further
potential for value growth;
* income from the Enlarged Group's portfolio of assets which would help fund the
Enlarged Group's long-term development plans;
* operational, strategic and cost synergies through shared infrastructure of
closely aligned operations; and
* a broader institutional shareholder base and the potential for increased
liquidity for shareholders of the Enlarged Group.
The Merger consists of a share for share exchange on a formula asset value
basis. The Trading Emissions Directors believe that, in exchanging their Scheme
Shares for New Leaf Clean Shares, the Trading Emissions Shareholders will
continue to maintain an exposure to Trading Emissions' investment activities in
the fast developing carbon markets and established portfolio of carbon assets as
well as gaining exposure to Leaf Clean's portfolio of clean energy investments.
4. Recommendation of Trading Emissions Board
The Trading Emissions Directors, who have been so advised by Liberum Capital,
consider the terms of the Merger to be fair and reasonable. In providing advice
to the Trading Emissions Directors, Liberum Capital has taken into account the
commercial assessments of the Trading Emissions Directors.
Accordingly, the Trading Emissions Directors have unanimously agreed to
recommend that Trading Emissions Shareholders vote in favour of the Scheme and
the resolutions to be proposed at the Court Meeting and the Trading Emissions
EGM, as they have undertaken to do in respect of their own beneficial holdings
of 1,885,007 Trading Emissions Shares (representing, in aggregate, approximately
0.7 per cent. of the existing issued ordinary share capital of Trading
Emissions).
Trading Emissions Shareholders considering voting in favour of the Scheme and
the Trading Emissions Resolutions are referred to the investment considerations
which will be set out in the Scheme Document. If Trading Emissions Shareholders
are in any doubt as to the action they should take, they should seek their own
financial advice from an independent financial adviser.
5. Recommendation of Leaf Clean Board
The Merger is conditional on the approval by Leaf Clean Shareholders of the Leaf
Clean Resolutions at the Leaf Clean EGM. The Leaf Clean Board has unanimously
agreed to recommend that Leaf Clean Shareholders vote in favour of the Leaf
Clean Resolutions, as they have undertaken to do in respect of their own
beneficial holdings of 127,500 Leaf Clean Shares (representing, in aggregate,
approximately 0.1 per cent. of the existing issued ordinary share capital of
Leaf Clean).
6. Information on Trading Emissions
Trading Emissions is a closed-end investment company that specialises in
renewable energy projects and emissions instruments such as carbon credits. The
Company was incorporated in the Isle of Man on 15 March 2005 as a public limited
company and in April 2005 its shares were admitted to trading on the AIM market
of the London Stock Exchange.
Trading Emissions' market capitalisation on 16 December 2009 (being the latest
practicable date prior to the date of this announcement) was approximately
GBP238.1 million. The Closing Price per Trading Emissions Share on 16 December
2009 (being the latest practicable date prior to the date of this announcement)
was 92.5 pence and its last published net asset value per Trading Emissions
Share as at 30 June 2009 was 150.45 pence.
Trading Emissions' principal objective is to make capital profits from
purchasing emissions assets at appropriate prices. The core part of the
portfolio is in the form of long positions in carbon assets, although some
trading takes place. Trading Emissions also invests in other selected emissions
assets. In addition, Trading Emissions seeks to generate income from the
provision of finance for selected programmes such as aggregation, monetisation,
collateralisation and other approaches to carbon trading.
Trading Emissions' investment strategy follows two underlying principles:
* the creative deployment of capital to obtain carbon credits at reasonable
prices, such investments including the use of equity, debt and various
instruments such as Emission Reduction Purchase Agreements; and
* the rapid adaptation to changing market conditions and emerging opportunities.
EEA acts as principal investment adviser to Trading Emissions, with
responsibility for originating, appraising and presenting investment proposals
to Trading Emissions in accordance with the investment policy and objectives
that the Trading Emissions Board sets out from time to time. The decision as to
whether or not to make an investment is made solely at the discretion of the
Trading Emissions Board.
7. Information on Leaf Clean
Leaf Clean is a closed-end investment company incorporated and registered in the
Cayman Islands on 14 May 2007. Leaf Clean was established to acquire interests
in, own, operate and manage clean energy companies and projects primarily in
North America. Clean energy includes activities such as the production of
alternative fuels, renewable power generation and the use of technologies to
reduce the environmental impact of traditional energy. The shares of Leaf Clean
were admitted to trading on the AIM market of the London Stock Exchange on 28
June 2007 when dealings also commenced.
Leaf Clean's market capitalisation on 16 December 2009 (being the latest
practicable date prior to the date of this announcement) was approximately
GBP142.3 million. The Closing Price per Leaf Clean Share on 16 December 2009
(being the latest practicable date prior to the date of this announcement) was
77.5 pence and its last published net asset value per Leaf Clean Share as at 30
June 2009 was 104 pence.
Leaf Clean seeks to achieve long term capital appreciation primarily through
making privately negotiated acquisitions of interests (principally equity but
also equity-related and subordinated or mezzanine debt securities) in both
projects and companies which own assets in or participate in the clean energy
sector and through the generation and commercialisation of carbon credits
derived from these projects.
EEA also acts as investment adviser to Leaf Clean pursuant to the terms of an
asset advisory agreement. On behalf of Leaf Clean, EEA sources investment
opportunities in the renewable and alternative energy markets and provides
screening, evaluation, development, operation and maintenance services for
renewable and alternative energy assets. The decision as to whether or not to
make an investment is made solely at the discretion of the Leaf Clean Board.
8. Board of directors, key management and employees
The Boards of Trading Emissions and Leaf Clean have agreed a unified board drawn
from a combination of the current directors within both Trading Emissions and
Leaf Clean. The initial composition of the board of the Enlarged Group will be
Neil Eckert as non-executive chairman and Malcolm Gillies, Bran Keogh, J. Curtis
Moffatt, Bertrand Rassool, Peter Vanderpump and Nigel Wood, as non-executive
directors. Philip Scales will continue as company secretary but not as a
director. It is the intention to strengthen the board of the Enlarged Group as
soon as is practicable by adding an additional non-executive director who is
likely to have experience of private equity investments. At the same time, the
future requirements of the Enlarged Group are being assessed to ensure that the
Enlarged Group's board going forward will have an appropriate mix of expertise
and experience.
Upon completion of the Merger, EEA, which currently acts as investment adviser
to both Trading Emissions and Leaf Clean, will be appointed to act as investment
adviser to the Enlarged Group.
The Trading Emissions Group has no employees. Each of the Trading Emissions
Directors holds office pursuant to a letter of appointment. Notwithstanding this
position, Leaf Clean has given assurances to Trading Emissions that any existing
employment rights of the management of Trading Emissions and its subsidiaries
will be safeguarded, as required by applicable law, upon the Merger becoming
effective or being declared unconditional in all respects.
9. Irrevocable undertakings and letters of intent
Those Trading Emissions Directors who hold Trading Emissions Shares have
irrevocably undertaken to vote or procure votes in favour of the Trading
Emissions Resolutions in respect of their own beneficial holdings of 1,885,007
Trading Emissions Shares representing, in aggregate, approximately 0.7 per cent.
of the voting rights of Trading Emissions.
In addition, further irrevocable undertakings to vote, or to procure votes, in
favour of the Trading Emissions Resolutions have been secured from certain
Trading Emissions Shareholders in respect of, in aggregate, 119,138,803 Trading
Emissions Shares, representing approximately 46.3 per cent. of the voting rights
of Trading Emissions.
Furthermore, Trading Emissions has received non-legally binding letters of
intent from certain Trading Emissions Shareholders to vote, or to procure votes,
in favour of the Trading Emissions Resolutions in respect of 40,557,526 Trading
Emissions Shares, representing approximately 15.8 per cent. of the voting rights
of Trading Emissions.
Those Leaf Clean Directors who hold Leaf Clean Shares have irrevocably
undertaken to vote, or to procure votes, in favour of the Leaf Clean Resolutions
in respect of their own beneficial holdings of 127,500 Leaf Clean Shares
representing, in aggregate, approximately 0.1 per cent. of the voting rights of
Leaf Clean.
In addition, further irrevocable undertakings to vote or procure votes in favour
of the Leaf Clean Resolutions have been secured from certain Leaf Clean
Shareholders in respect of, in aggregate, 79,044,600 Leaf Clean Shares,
representing approximately 43.0 per cent. of the voting rights of Leaf Clean.
In addition, Leaf Clean has received non-legally binding letters of intent from
certain Leaf Clean Shareholders to vote or procure votes in favour of the Leaf
Clean Resolutions in respect of 19,040,000 Leaf Clean Shares, representing
approximately 10.4 per cent. of the voting rights of Leaf Clean.
Therefore, irrevocable undertakings and letters of intent to vote, or to procure
to votes, in favour of the Trading Emissions Resolutions and the Leaf Clean
Resolutions have been received from Trading Emissions Shareholders representing
62.8 per cent. of the voting rights of Trading Emissions and from Leaf Clean
Shareholders representing 53.5 per cent. of the voting rights of Leaf Clean
respectively.
Further details of these irrevocable undertakings and letters of intent are set
out in Appendix IV to this announcement.
10. New Leaf Clean Shares
The New Leaf Clean Shares proposed to be issued to Trading Emissions
Shareholders pursuant to the Scheme will be new ordinary shares in the share
capital of Leaf Clean. The New Leaf Clean Shares will be issued credited as
fully paid, will rank equally in all respects with the existing Leaf Clean
Shares and will be entitled to all dividends and other distributions declared by
Leaf Clean at any time after the date of their issue. The New Leaf Clean Shares
may be held in uncertificated form.
Further details of the New Leaf Clean Shares will be set out in the Scheme
Document.
11. Investment Advisory Arrangements
Investment Advisory Agreement
Upon completion of the Merger, the existing investment advisory agreements
between EEA and each of Leaf Clean and Trading Emissions will be terminated and
replaced with the new Investment Advisory Agreement pursuant to which EEA will
be appointed as investment adviser to the Enlarged Group.
The Investment Advisory Agreement is for an initial 24 month period from the
Effective Date and shall be terminable by Leaf Clean on 12 months' prior written
notice to take effect no earlier than the expiry of the initial 24 month period.
The Investment Advisory Agreement may also be terminated (a) by Leaf Clean on
one month's notice if EEA is in material breach of any term of the Investment
Advisory Agreement and has failed to remedy such breach having been given
reasonable opportunity (being not less than 30 business days) to remedy such
breach; (b) by EEA if Leaf Clean fails to make any payment due under, or
otherwise is in material breach of any term of, the Investment Advisory
Agreement and fails to remedy the same (within 20 business days in the case of
any non-payment and otherwise after reasonable opportunity, being not less than
30 business days); and (c) by either Leaf Clean or EEA on one month's notice if
the other becomes subject to any insolvency or similar event.
EEA shall be entitled under the Investment Advisory Agreement to receive a
quarterly management fee (payable in advance) equal to a percentage of the gross
asset value of the Enlarged Group's portfolio as determined in accordance with
such agreement (the "Management Fee"). The relevant percentage will be set on
the Calculation Date and will represent the weighted average of the management
fees currently payable to EEA by each of Leaf Clean and Trading Emissions based
on their relative gross assets. The Management Fee shall be payable quarterly in
advance on the basis of the gross asset value of Leaf Clean as at the quarter
dates ending 31 March, 30 June, 30 September and 31 December.
The Investment Adviser shall also be entitled to receive a performance fee equal
to 20 per cent. of the amount by which the market capitalisation of Leaf Clean
as at the end of a performance period exceeds the higher of (a) the Starting
Market Capitalisation (as defined below) grossed up at an annual rate of 8 per
cent. and adjusted to allow for the issue of further shares and for dividends
and other distributions paid to shareholders; and (b) the market capitalisation
of Leaf Clean (adjusted to allow for the issue of further shares and for
dividends and other distributions) as at the end of the latest performance
period (if any) when a performance fee was paid.
The Starting Market Capitalisation of Leaf Clean for the purposes of calculating
the performance fee payable under the Investment Advisory Agreement shall be
determined by reference to a share price per Leaf Clean Share representing a
weighted average (based on relative Formula Asset Values) of the performance fee
hurdle rates for each of Leaf Clean and Trading Emissions under their current
arrangements with EEA (being 119.8p and 221.5p, respectively). Based on the
Formula Asset Value estimates contained in this announcement, this would equate
to a post-Merger price per Leaf Clean Share of 130p.
The first performance period will be from the Effective Date to 30 June 2010 and
all subsequent performance periods will run from 1 July to 30 June. Of the
performance fee paid to EEA, 67 per cent. will be in cash and, subject, inter
alia, to applicable law, any relevant shareholder approval, the articles of
association of Leaf Clean and any applicable rules of the London Stock Exchange
or the interests of EEA (together with its affiliates) not exceeding 20 per
cent. or more of the issued share capital of Leaf Clean, the balance shall be
payable in Leaf Clean Shares.
Leaf Clean has agreed to indemnify EEA and its associates (as defined in the
FSA's handbook of rules and guidance), agents, delegates, employees,
shareholders, representatives and officers (each an "Indemnified Party") in
respect of any losses incurred by them in connection with the Indemnified Party
being associated with or otherwise acting on behalf of or in furtherance of what
the Indemnified Party reasonably believed to be in the interests of Leaf Clean
including, inter alia, by reason of having provided services under the
Investment Advisory Agreement, except to the extent such losses are finally
determined to have resulted from the negligence, wilful default or fraud of an
Indemnified Party or from a breach of the Investment Advisory Agreement.
The new Investment Advisory Agreement also provides that in no event will the
aggregate liability of EEA and its Associates (as defined in the FSA's handbook
of rules and guidance) under the Investment Advisory Agreement exceed GBP100
million.
EEA, as Leaf Clean's investment adviser, is a related party of Leaf Clean for
the purposes of the AIM Rules. Further, EEA Group Limited has, at 16 December
2009, beneficial holdings of 10,473,307 Trading Emissions Shares and will
participate in the Merger on the same terms as other Trading Emissions
Shareholders. The Leaf Clean Directors consider, to the extent that the entry
into of the Investment Advisory Agreement by EEA and/or participation in the
Merger as a Trading Emissions Shareholder constitutes a transaction with a
related party for the purposes of Rule 13 of the AIM Rules, and having consulted
with Cenkos Securities, Leaf Clean's nominated adviser, that all such
arrangements are fair and reasonable insofar as Leaf Clean's shareholders are
concerned.
Trading Emissions IAA Amendment Agreements
Under the terms of Trading Emissions' existing investment advisory agreement
with EEA, the performance fee for Trading Emissions' financial year ended 30
June 2008 was GBP40,487,000 (the "2008 Performance Fee"). In accordance with the
terms of the Performance Fee Amendment Agreement, the 2008 Performance Fee was
deferred such that it shall be payable in five equal annual instalments (each an
"Annual Instalment").
Pursuant to the terms of the Deed of Novation, the parties have agreed, subject
to and conditional upon the Scheme becoming effective, that Leaf Clean shall
perform, and be bound by, the existing Performance Fee Amendment Agreement in
place of Trading Emissions, subject to certain amendments to the Performance Fee
Amendment Agreement made by the Deed of Novation.
To date, the first Annual Instalment has been discharged by a cash payment by
Trading Emissions to EEA of the sum of GBP8,097,400 and the second Annual
Instalment has been discharged by a cash payment by Trading Emissions to EEA of
the sum of GBP4,048,700 with the balance of GBP4,048,700 being satisfied by the
allotment and issue to EEA of 2,313,543 Trading Emissions Shares. Under the
existing Performance Fee Amendment Agreement, each of the remaining Annual
Instalments are to be satisfied by the cash sum of GBP4,048,700 and the
allotment and issue to EEA of 2,313,543 Trading Emissions Shares credited as
fully paid.
Under the terms of the Deed of Novation, Leaf Clean shall, subject to and
conditional upon the Scheme becoming effective, satisfy the cash payment
obligations in respect of each Annual Instalment and, in respect of each such
Annual Instalment, allot and issue to EEA (or as it may direct) such number of
Leaf Clean Shares (credited as fully paid) as shall represent the number of Leaf
Clean Shares that would be transferred to a holder of 2,313,543 Trading
Emissions Shares pursuant to and under the terms of the Merger. The Annual
Instalments will be payable shortly after 1 September in 2010, 2011 and 2012,
respectively. However, under the terms of the Side Letter, conditional on the
Scheme becoming effective, EEA has agreed that an Annual Instalment will be
payable only if the average closing bid price per Leaf Clean Share for the last
five dealing days of the immediately preceding financial year (the "Reference
Price") was not lower than a hurdle price equal to:
Leaf Clean FAV x 129.75p
Trading Emissions FAV
(adjusted as appropriate to reflect dividends or distributions made by Leaf
Clean) (the "Hurdle Price").
If any Annual Instalment is not paid because the Reference Price at the relevant
year-end was lower than the Hurdle Price, such Annual Instalment(s) will become
payable on the first subsequent 1 September following the first year end date
with respect to which the Reference Price equals or exceeds the Hurdle Price.
In the event of a change of control of Leaf Clean, or if Leaf Clean enters into
an insolvency event or fails to make a payment of the Annual Instalments in
accordance with the terms of the Performance Fee Amendment Agreement, then the
cash value for each of the outstanding Annual Instalments shall immediately
become payable in cash on the date upon which such event occurs. In such event,
Leaf Clean shall no longer have any obligation to allot and issue Leaf Clean
Shares to EEA under the terms of the Performance Fee Amendment Agreement.
12. Implementation Agreement and break fees
On 17 December 2009, Leaf Clean and Trading Emissions entered into the
Implementation Agreement. Pursuant to the terms of the Implementation Agreement,
Leaf Clean and Trading Emissions have each undertaken, subject to the fiduciary
duties of the Leaf Clean Directors or the Trading Emissions Directors (as
appropriate) and any applicable laws and regulations, to co-operate and take all
steps as are within its power and are necessary and reasonable to implement the
Merger as soon as reasonably practicable.
Furthermore, each of the parties has agreed, amongst other things, that, prior
to the earlier of the Effective Date and the termination of the Implementation
Agreement, it will not, and will procure that no member of its Group will,
subject to the fiduciary duties of the Leaf Clean Directors or the Trading
Emissions Directors (as appropriate) or as required by law or regulation or the
Panel or with the prior consent of the other party (such consent not to be
unreasonably withheld or delayed):
* carry on business other than in the ordinary course and consistent in all
material respects with past practice;
* amend its memorandum or articles of association (other than in connection with
the resolutions to be proposed at the Trading Emissions EGM or the Leaf Clean
EGM, as the case may be);
* take any action which would require the approval of the relevant shareholders in
general meeting or the consent of the Panel under Rule 21 of the Code or which
would involve it in a substantial transaction under rule 12 of the AIM Rules;
* recommend, declare, pay or make or propose to recommend, declare, pay or make
any bonus issue, dividend or other distribution, whether payable in cash or
otherwise;
* allot, issue, increase, repay or authorise or propose the issue of, any share
capital or any securities convertible into share capital, or rights, warrants or
options to acquire any share capital, or any securities convertible into share
capital, or enter into other agreements or commitments of any character
obligating it to issue any such shares or convertible securities, or permit any
member of its Group to do any of the foregoing, whether with respect to its own
share capital (or securities convertible into or rights exercisable therefor or
otherwise obligating the issue thereof) or the share capital of the relevant
party (or securities convertible into the same or rights exercisable therefor or
otherwise obligating the issue thereof);
* redeem, purchase or otherwise acquire any interest in any of its issued share
capital;
* take any step in relation to its business which is reasonably likely to have the
effect of preventing or materially delaying satisfaction of or materially
increasing the cost of satisfaction of any of the Conditions in accordance with
its terms or omit to take any step it would otherwise take in the ordinary
course of business which step, if taken, is reasonably likely to have the effect
of satisfying any of the Conditions in accordance with its terms;
* alter the nature or scope of its business in any way which is material in the
context of either party and its Group taken as a whole or of the Merger;
* enter into, amend, supplement or terminate any agreement which is material in
the context of the Merger;
* take any action, or refrain from taking any action, which may result in EEA not
entering into and/or performing its obligations under the Investment Advisory
Agreement; or
* enter into an agreement or assume any obligation to do any of the foregoing.
Trading Emissions and Leaf Clean have also undertaken to notify the other
immediately of any approach that is made to it or any other member of its Group
or its directors, employees, advisors or agents in relation to a competing
transaction and the material terms of such transaction and to keep the other
party informed as to the progress of such approach.
Trading Emissions has agreed to pay Leaf Clean a break fee of GBP1.5 million
(inclusive of any amounts in respect of VAT) if, following execution of the
Implementation Agreement:
(i)the recommendation by the Trading Emissions Directors to Trading Emissions
Shareholders to vote in favour of the Trading Emissions Resolutions is not
unanimously given or is withdrawn, modified or qualified; or
(ii)Trading Emissions commits a breach of the Implementation Agreement the
effect of which is material in the context of the Merger; or
(iii)a third party offer (howsoever structured) is announced for Trading
Emissions at a time when the Merger has not lapsed or been withdrawn and such
offer subsequently becomes or is declared wholly unconditional or is completed.
Leaf Clean has agreed to pay Trading Emissions a break fee of GBP1.5 million
(inclusive of any amounts in respect of VAT) if, following execution of the
Implementation Agreement:
(i)the recommendation by the Leaf Clean Directors to Leaf Clean Shareholders to
vote in favour of the Leaf Clean Resolutions is not unanimously given or is
withdrawn, modified or qualified; or
(ii)Leaf Clean commits a breach of the Implementation Agreement the effect of
which is material in the context of the Merger; or
(iii)a third party offer (howsoever structured) is announced for Leaf Clean at a
time when the Merger has not lapsed or been withdrawn and such offer
subsequently becomes or is declared wholly unconditional or is completed.
The obligations of the parties under the Implementation Agreement to implement
and consummate the Merger will terminate:
* by mutual consent of the parties (where required, with the consent of the
Panel);
* by notice given by a party in the event of a material breach by the other party
of any term of the Implementation Agreement which, if capable of remedy, it has
failed to remedy within five Business Days of a notice from the party requesting
the same;
* by notice given by either of the parties to the other if the Trading Emissions
Resolutions or the Leaf Clean Resolutions are not duly passed or the Scheme is
not sanctioned by the Court at the Court Hearing, unless the parties have agreed
within 10 Business Days of such event to implement the Merger by way of the
Offer;
* if the Merger is implemented by way of the Offer and the Offer lapses in
accordance with its terms or is withdrawn or is not made in accordance with the
Code;
* by notice given by a party entitled to invoke a Condition to the other in the
event that such Condition is not satisfied by the specified time for
satisfaction or becomes incapable of satisfaction and the invocation of such
Condition is permitted by the Panel;
* by notice given by either of the parties to the other if it is announced that
(a) the Trading Emissions Directors have determined not to give unanimously, or
to withdraw, modify or qualify, the recommendation of the Trading Emissions
Directors to the Trading Emissions Shareholders to vote in favour of the Trading
Emissions Resolutions, or (b) the Leaf Clean Directors have determined not to
give unanimously, or to withdraw, modify or qualify, the recommendation of the
Leaf Clean Directors to the Leaf Clean Shareholders to vote in favour of the
Leaf Clean Resolutions;
* by notice given by either of the parties to the other if a third party competing
transaction becomes or is declared wholly unconditional or is completed; or
* if the Effective Date has not occurred on or before the Long Stop Date.
13. Structure of the Merger
It is intended that the Merger will be
implemented by means of a scheme of arrangement between Trading Emissions and
the Scheme Shareholders under section 152 of the Act. The procedure involves an
application by Trading Emissions to the Court to sanction the Scheme and to
confirm the transfer of the Scheme Shares to Leaf Clean, in consideration for
which Scheme Shareholders will receive New Leaf Clean Shares (as described in
paragraph 2 above).
To become effective, the Scheme requires, amongst other things, the approval of
a majority in number of the Scheme Shareholders present and voting in person or
by proxy at the Court Meeting, representing not less than 75 per cent. in value
of the Scheme Shares held by such Scheme Shareholders, together with the
sanction of the Court and the passing of the resolutions necessary to implement
the Scheme at the Trading Emissions EGM. The Scheme will become effective in
accordance with its terms following delivery of an office copy of the Court
Order to the Financial Supervision Commission.
Upon the Scheme becoming effective, it will be binding on all Scheme
Shareholders, irrespective of whether or not they attended or voted at the Court
Meeting or the Trading Emissions EGM.
The Merger is subject to the Conditions set out in Appendix I of this
announcement and to be set out in the Scheme Document, including the obtaining
of relevant regulatory approvals, approvals of Leaf Clean Shareholders as
referred to in paragraph 14 below, approvals by Trading Emissions Shareholders
and the sanction of the Scheme by the Court. The Scheme Document will include
full details of the Scheme, together with notices of the Court Meeting and the
Trading Emissions EGM and the expected timetable. The Scheme Document will be
despatched to Trading Emissions Shareholders as soon as possible.
Leaf Clean and Trading Emissions reserve the right to implement the Merger by
way of a takeover offer. In such event, such offer will be implemented on the
same terms so far as applicable, subject to appropriate amendments, including
(without limitation and subject to the consent of the Panel) an acceptance
condition set at 90 per cent. (or such lesser percentage (being more than 50 per
cent.) as Leaf Clean may decide) in nominal value of the Trading Emissions
Shares to which such offer relates.
14. Leaf Clean Shareholder approvals
As a result of the scale of the transaction, the Merger constitutes a "reverse
take-over" for Leaf Clean under the AIM Rules. Accordingly, Leaf Clean will be
required to seek the approval of the Leaf Clean Shareholders for the Merger at
the Leaf Clean EGM.
Leaf Clean is required to prepare and send to the Leaf Clean Shareholders a
circular summarising the background to and reasons for the Merger (which will
include a notice convening the Leaf Clean EGM for the purpose of considering
and, if thought fit, passing resolutions to approve, amongst other things, (i)
the Merger and (ii) the issue of the New Leaf Clean Shares pursuant to the
Scheme and the Investment Advisory Agreement. The Merger is conditional on,
amongst other things, the requisite resolutions being passed by the Leaf Clean
Shareholders at the Leaf Clean EGM.
15. Admission to the Official List
of the London Stock Exchange
Subject to satisfying eligibility criteria, Leaf Clean intends to make an
application to obtain a primary listing on the Official List as soon as
possible. This is expected to occur during the second half of 2010. As the
Merger constitutes a reverse takeover for Leaf Clean under the AIM Rules and
will result in an automatic cancellation of the admission to trading of Leaf
Clean Shares on AIM, Leaf Clean will initially be applying for re-admission to
AIM upon completion of the Merger. In the event that any subsequent applications
to the UK Listing Authority and the London Stock Exchange for admission to the
Official List and admission to trading on the Main Market respectively are not
made or are unsuccessful, Leaf Clean's shares will remain admitted to trading on
AIM.
16. Cancellation of Trading Emissions Shares
It is intended that prior to the Scheme becoming effective, and subject to
applicable requirements of the London Stock Exchange, an application will be
made to the London Stock Exchange for the cancellation of the admission of the
Trading Emissions Shares to trading on AIM. It is expected that such
cancellation will take effect on the Effective Date.
On the Effective Date, share certificates in respect of the Scheme Shares will
cease to be valid and should be destroyed. In addition, on the Effective Date,
entitlements to Scheme Shares held within the CREST system will be cancelled.
17. Overseas shareholders
The implications of the Scheme for persons not resident in the United Kingdom
and/or ability of such persons to receive New Leaf Clean Shares as consideration
for their Trading Emissions Shares under the Merger may be affected by the laws
of the relevant jurisdiction. Such persons should inform themselves about, and
observe, any applicable requirements. In particular, where the delivery of New
Leaf Clean Shares to a Trading Emissions Shareholder would or may infringe the
laws of any jurisdiction or require the obtaining of governmental or other
consents or registrations or filings which Leaf Clean or Trading Emissions are
unable to obtain or with which Leaf Clean or Trading Emissions is unable to
comply, or which Leaf Clean or Trading Emissions regard as unduly onerous, Leaf
Clean or Trading Emissions may elect that the New Leaf Clean Shares should be
delivered to a nominee and sold with the proceeds of sale being remitted to the
relevant Trading Emissions Shareholder. No assurance can be given as to the
price that will be received on such sale of New Leaf Clean Shares.
Further details in relation to overseas Trading Emissions Shareholders will be
contained in the Scheme Document.
18. Interests in Trading Emissions
securities held by Leaf Clean and its concert parties and significant
shareholders of the Enlarged Group
As at the close of business on 16 December 2009, being the latest practicable
date prior to the date of this announcement, EEA Group Limited holds
10,473,307 Trading Emissions Shares, representing approximately 4.1 per cent. of
Trading Emissions' existing issued share capital.
In addition, Invesco Asset Management Limited ("Invesco") holds
83,908,986 Trading Emissions Shares, representing approximately 32.59 per cent.
of Trading Emissions' existing issued share capital. Invesco also holds
59,000,000 Leaf Clean shares, representing approximately 32.1 per cent. of Leaf
Clean's existing issued share capital, and has given an irrevocable undertaking
to vote in favour of all resolutions at the Trading Emissions EGM and the Leaf
Clean EGM. It is therefore likely that Invesco will have an interest in the
Enlarged Group that is greater than 30 per cent. of the entire issued share
capital.
In addition, Simon Shaw, the majority shareholder of EEA, holds 169,464 Trading
Emissions Shares, representing approximately 0.1 per cent. of Trading Emissions'
existing issued share capital.
Save as disclosed in this announcement, neither Leaf Clean nor any of the
directors of Leaf Clean nor, so far as Leaf Clean is aware, any party acting in
concert with Leaf Clean, has any interest in, or right to subscribe for, any
Trading Emissions Shares or securities convertible or exchangeable into Trading
Emissions Shares ('Trading Emissions Securities'), nor does any such person have
any short position (whether conditional or absolute and whether in the money or
otherwise) including short positions under derivatives or arrangement in
relation to Trading Emissions Securities. For these purposes, 'arrangement'
includes any indemnity or option arrangement or any agreement or understanding,
formal or informal, of whatever nature, relating to Trading Emissions Securities
which may be an inducement to deal or refrain from dealing in such securities.
19. Securities in issue
In accordance with Rule 2.10 of the Code, as at close of business on 16 December
2009, being the last Business Day prior to this announcement, Trading Emissions
had 257,431,973 ordinary shares of GBP0.01 each in issue (ISIN number
GB00B073G363) and Leaf Clean had 183,633,773 ordinary shares of GBP0.0001 each
in issue (ISIN number KYG541351014).
20. General and documentation
The Scheme will be governed by Isle of Man law and will be subject to the
jurisdiction of the Court.
The Merger will be subject to the Conditions and further terms set out herein
and in Appendix I and to the full terms and conditions which will be set out in
the Scheme Document. Further details of the calculation of Trading Emissions
Shareholder entitlements under the Scheme are set out in Appendix II of this
announcement. The bases and sources of certain information contained in this
announcement are set out in Appendix III. Appendix IV contains further details
of the irrevocable undertakings and letters of intent. Certain definitions and
terms used in this announcement are set out in Appendix V.
The Scheme Document will be sent to Trading Emissions Shareholders other than
certain overseas shareholders in due course. At the same time or as nearly as
practicable at the same time as these documents are sent to Trading Emissions
Shareholders, the Leaf Clean Shareholder Circular convening the Leaf Clean EGM
will be sent to Leaf Clean Shareholders.
APPENDIX I
CONDITIONS TO, AND FURTHER TERMS OF, THE MERGER
PART A: CONDITIONS TO THE MERGER
1.The Merger is conditional upon the Scheme becoming unconditional and becoming
effective, subject to the Code, by no later than the Long Stop Date or such
later date (if any) as Trading Emissions and Leaf Clean may, with the consent of
the Panel, agree and (if required) the Court may allow.
2.The Scheme is conditional upon:
(a) approval of the Scheme by a
majority in number of the Scheme Shareholders entitled to vote and
present and voting, either in person or by proxy, at the Court Meeting,
representing no less than
75 per cent. in value of the Scheme Shares
so voted;
(b) all resolutions in connection with, or necessary to approve and
implement, the Scheme as set
out in the notice of the
Trading Emissions EGM being duly passed by the requisite majority at
the Trading Emissions EGM or at any adjournment of that meeting;
(c) the sanction of the Scheme (without modification or with modification
as agreed by Trading
Emissions and Leaf Clean) by the
Court and the delivery for registration of an office copy of the
Court Order to the Financial Supervision Commission; and
(d) all resolutions necessary to approve, implement and effect the
Merger being duly passed at the
Leaf Clean EGM as set out
in the notice of the Leaf Clean EGM.
3.Trading Emissions and Leaf Clean have agreed that, subject as stated below,
the Merger is also conditional upon the following Conditions, and, accordingly,
that the necessary actions to make the Scheme effective will not be taken unless
such Conditions (as amended if appropriate) have been satisfied or waived:
(a)admission of the Leaf Clean Shares (including the New Leaf Clean Shares) to
trading on AIM becoming effective in accordance with the AIM Rules or if Leaf
Clean so determines (subject to the consent of the Panel) the London Stock
Exchange agreeing to admit such shares to trading on AIM subject to the
allotment of such New Leaf Clean Shares and/or the Scheme becoming or being
declared unconditional in all respects;
(b)except as (i) publicly announced in accordance with the AIM Rules or
Disclosure and Transparency Rules or other applicable requirements by Leaf Clean
or Trading Emissions prior to the Announcement Date; (ii) fairly disclosed in
writing by or on behalf of Trading Emissions to Leaf Clean or by or on behalf of
Leaf Clean to Trading Emissions (as the case may be) prior to the Announcement
Date in connection with the Merger; (iii) disclosed in the annual report and
accounts for Leaf Clean for the period ended 30 June 2009; or (iv) disclosed in
the annual report and accounts for Trading Emissions for the period ended 30
June 2009, there being no provision of any agreement, arrangement, licence,
permit or other instrument to which any member of the Wider Leaf Clean Group or
Wider Trading Emissions Group is a party or by or to which any such member or
any of its assets may be bound, entitled or subject, which in consequence of the
Merger or the proposed acquisition of any shares or other securities in Leaf
Clean or Trading Emissions or because of a change in the control or management
of Leaf Clean or Trading Emissions or otherwise, would or might reasonably be
expected to result (in each case to an extent which is adverse to and material
in the context of the Wider Leaf Clean Group or the Wider Trading Emissions
Group taken as a whole (as the case may be)) in:
(i)any such agreement, arrangement, licence, permit or instrument or the rights,
liabilities, obligations or interests of any such member thereunder being
terminated or modified or affected or any obligation or liability arising or any
action being taken thereunder;
(ii)any monies borrowed by or any other indebtedness (actual or contingent) of
or grant available to, any such member, being or becoming repayable or capable
of being declared repayable immediately or earlier than their or its stated
maturity date or repayment date or the ability of any such member to borrow
monies or incur any indebtedness being withdrawn or inhibited or being capable
of becoming or being withdrawn or inhibited;
(iii)any assets or interests of any such member being or falling to be disposed
of or charged or any right arising under which any such asset or interest could
be required to be disposed of or charged;
(iv)the creation or enforcement of any mortgage, charge or other security
interest over the whole or any part of the business, property or assets of any
such member;
(v)the rights, liabilities, obligations or interests of any such member in or
the business of any such member with, any person, firm or body (or any
arrangement or arrangements relating to any such interest or business) being
terminated, adversely modified or affected;
(vi)the value of any such member or its financial or trading position or
prospects being prejudiced or adversely affected;
(vii)any such member ceasing to be able to carry on business under any name
under which it presently does so; or
(viii)the creation of any liability, actual or contingent, by any such member,
and no event having occurred which, under any provision of any agreement,
arrangement, licence, permit or other instrument to which any member of the
Wider Leaf Clean Group or the Wider Trading Emissions Group is a party or by or
to which any such member or any of its assets may be bound, entitled or subject,
would result in or would reasonably be expected to result in any of the events
or circumstances as are referred to in sub-paragraphs (i) to (viii) of this
paragraph 3(b) (in each case to an extent which is material in the context of
the Wider Leaf Clean Group as a whole or the Wider Trading Emissions Group as a
whole);
(c)no government or governmental, quasi-governmental, supranational, statutory,
regulatory, environmental or investigative body, court, trade agency,
association, institution or any other body or person whatsoever in any
jurisdiction (each a "Third Party") having decided to take, institute, implement
or threaten any action, proceeding, suit, investigation, enquiry or reference,
or enacted or made any statute, regulation, decision or order, or having taken
any other steps which would or would reasonably be expected to (in each case to
an extent which is material in the context of the Wider Leaf Clean Group as a
whole or the Wider Trading Emissions Group as a whole):
(i)require, prevent or delay the divestiture, or alter the terms envisaged for
any proposed divestiture by any member of the Wider Leaf Clean Group or any
member of the Wider Trading Emissions Group of all or any portion of their
respective businesses, assets or property or impose any material limitation on
the ability of any of them to conduct their respective businesses (or any of
them) or to own any of their respective assets or properties or any material
part thereof;
(ii)require, prevent or delay the divestiture by any member of the Wider Leaf
Clean Group of any shares or other securities in Trading Emissions;
(iii)impose any limitation on, or result in a delay in, the ability of any
member of the Wider Leaf Clean Group or the Wider Trading Emissions Group
directly or indirectly to acquire or to hold or to exercise effectively 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
Trading Emissions Group or the Wider Leaf Clean Group or to exercise management
control over any such member;
(iv)otherwise adversely affect the business, assets or profits of any member of
the Wider Leaf Clean Group or of any member of the Wider Trading Emissions
Group;
(v)make the Merger or its implementation or the acquisition or proposed
acquisition by Leaf Clean or any member of the Wider Leaf Clean Group of any
shares or other securities in, or control of Trading Emissions void, illegal
and/or unenforceable under the laws of any jurisdiction, or otherwise directly
or indirectly, restrain, restrict, prohibit, delay or otherwise materially
interfere with the same, or impose additional conditions or obligations with
respect thereto, or otherwise challenge or materially interfere therewith;
(vi)require any member of the Wider Leaf Clean Group or the Wider Trading
Emissions Group to offer to acquire any shares or other securities (or the
equivalent) or interest in any member of the Wider Trading Emissions Group or
the Wider Leaf Clean Group owned by any third party; or
(vii)result in any member of the Wider Leaf Clean Group or the Wider Trading
Emissions Group ceasing to be able to carry on business under any name under
which it presently does so,
and all applicable waiting and other time periods during which any such Third
Party could institute, implement or threaten any action, proceeding, suit,
investigation, enquiry or reference or any other step under the laws of any
jurisdiction in respect of the Merger or the acquisition or proposed acquisition
of any Trading Emissions Shares having expired, lapsed or been terminated;
(d)all necessary filings or applications having been made in connection with the
Merger and all statutory or regulatory obligations in any jurisdiction having
been complied with in connection with the Merger or the acquisition by any
member of the Wider Leaf Clean Group of any shares or other securities in, or
control of, Trading Emissions and all authorisations, orders, recognitions,
grants, consents, licences, confirmations, clearances, permissions and approvals
(collectively "Consents") reasonably deemed necessary for, or in respect of, the
Merger or the proposed acquisition of any shares or other securities in, or
control of, Trading Emissions by any member of the Wider Leaf Clean Group having
been obtained in terms and in a form reasonably satisfactory to Leaf Clean and
Trading Emissions from all appropriate Third Parties or persons with whom any
member of the Wider Leaf Clean Group or the Wider Trading Emissions Group has
entered into contractual arrangements, and all such Consents together with all
material Consents reasonably necessary to carry on the business of any member of
the Wider Leaf Clean Group or the Wider Trading Emissions Group remaining in
full force and effect and all filings necessary for such purpose having 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 Merger otherwise becomes
effective and all necessary statutory or regulatory obligations in any
jurisdiction having been complied with in all material respects;
(e)except as (i) publicly announced in accordance with the AIM Rules or
Disclosure and Transparency Rules by Leaf Clean or Trading Emissions prior to
the Announcement Date; (ii) fairly disclosed in writing by or on behalf of
Trading Emissions to Leaf Clean or by or on behalf of Leaf Clean to Trading
Emissions (as the case may be) prior to the Announcement Date in connection with
the Merger; (iii) disclosed in the annual report and accounts for Leaf Clean for
the period ended 30 June 2009; or (iv) disclosed in the annual report and
accounts for Trading Emissions for the period ended 30 June 2009, no member of
the Wider Leaf Clean Group or Wider Trading Emissions Group (as the case may be)
having, since 30 June 2009;
(i)save as between Leaf Clean and wholly-owned subsidiaries of Leaf Clean or
between Trading Emissions and wholly owned subsidiaries of Trading Emissions
issued, authorised or proposed the issue of additional shares of any class;
(ii)save as between Leaf Clean and wholly-owned subsidiaries of Leaf Clean or
Trading Emissions and wholly-owned subsidiaries of Trading Emissions issued or
agreed to issue, authorised or proposed the issue of securities convertible into
shares of any class or rights, warrants or options to subscribe for or acquire,
any such shares or convertible securities;
(iii)other than to another member of the Leaf Clean Group or the Trading
Emissions Group and save as provided for in respect of Leaf Clean or Trading
Emissions in this announcement, recommended, declared, paid or made or proposed
to recommend, declare, pay or make any bonus, dividend or other distribution
whether payable in cash or otherwise;
(iv)save pursuant to the Merger and save for intra-Leaf Clean Group or
intra-Trading Emissions Group transactions, merged or demerged with any body
corporate or acquired or disposed of or transferred, mortgaged or charged or
created any security interest over any assets or any right, title or interest in
any asset (including shares and trade investments) or authorised or proposed or
announced any intention to propose any merger, demerger, acquisition or
disposal, transfer, mortgage, charge or security interest which, in any case, is
not in the ordinary course of business and is material in the context of the
Wider Leaf Clean Group taken as a whole or the Wider Trading Emissions Group
taken as a whole;
(v)save for intra-Leaf Clean Group or intra-Trading Emissions Group
transactions, made or authorised or proposed or announced an intention to
propose any change in its loan capital;
(vi)issued, authorised or proposed the issue of any debentures or (save for
intra-Leaf Clean Group or intra-Trading Emissions Group transactions), save in
the ordinary course of business, incurred or increased any indebtedness or
become subject to any guarantee or contingent liability, which in any case is
material in the context of the Wider Leaf Clean Group taken as a whole or the
Wider Trading Emissions Group taken as a whole;
(vii)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 to the matters mentioned in sub-paragraph (i) above, made any other
change to any part of its share capital;
(viii)implemented, or authorised, proposed or announced its intention to
implement, any reconstruction, amalgamation, scheme, commitment or other
transaction or arrangement which, in any case, is not in the ordinary course of
business and is material in the context of the Wider Leaf Clean Group taken as a
whole or the Wider Trading Emissions Group taken as a whole, or entered into or
changed the terms of any contract with any director or senior executive;
(ix)entered into or varied or authorised, proposed or announced its intention to
enter into or vary any contract, transaction or commitment (whether in respect
of capital expenditure or otherwise) which is of a long term, onerous or unusual
nature or magnitude or which is or would be reasonably likely to be materially
restrictive on the businesses of the Wider Trading Emissions Group or the Wider
Leaf Clean Group taken as a whole 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 in each such case is or would be reasonably likely to be
material in the context of the Wider Trading Emissions Group taken as a whole or
the Wider Leaf Clean Group taken as a whole;
(x)(other than in respect of a member which is dormant and was solvent at the
relevant time) taken any corporate action or had any legal proceedings started
or threatened against it for its winding-up, dissolution or reorganisation or
for the appointment of a receiver, administrative receiver, administrator,
trustee or similar officer of all or any of its assets or revenues or any
analogous proceedings in any jurisdiction or had any such person appointed;
(xi)entered into any contract, transaction or arrangement which would be
restrictive on the business of any member of the Wider Trading Emissions Group
or the Wider Leaf Clean Group other than of a nature and of extent which is
normal in the context of the business concerned, to an extent which is or would
be reasonably likely to be material in the context of the Wider Trading
Emissions Group taken as a whole or Wider Leaf Clean Group taken as a whole;
(xii)waived or compromised any claim otherwise than in the ordinary course of
business and in any case which is or would be reasonably likely to be material
in the context of the Wider Leaf Clean Group taken as a whole or the Wider
Trading Emissions Group taken as a whole; or
(xiii)entered into any contract, commitment, arrangement or agreement otherwise
than in the ordinary course of business or passed any resolution or made any
offer (which remains open for acceptance) with respect to or announced any
intention to, or to propose to, effect any of the transactions, matters or
events referred to in this condition;
(f)since 30 June 2009 and save as (i) publicly announced in accordance with the
AIM Rules or Disclosure and Transparency Rules by Leaf Clean or Trading
Emissions prior to the Announcement Date; (ii) fairly disclosed in writing by or
on behalf of Trading Emissions to Leaf Clean or by or on behalf of Leaf Clean to
Trading Emissions (as the case may be) prior to the Announcement Date in
connection with the Merger; (iii) disclosed in the annual report and accounts
for Leaf Clean for the period ended 30 June 2009; or (iv) disclosed in the
annual report and accounts for Trading Emissions for the period ended 30 June
2009 (as the case may be):
(i)no material adverse change or deterioration having occurred in the business,
assets, financial or trading position or profits of the Wider Leaf Clean Group
or the Wider Trading Emissions Group taken as a whole;
(ii)no litigation, arbitration proceedings, prosecution or other legal
proceedings to which any member of the Wider Leaf Clean Group or the Wider
Trading Emissions Group is or may become a party (whether as a plaintiff,
defendant or otherwise) and no investigation by any Third Party against or in
respect of any member of the Wider Leaf Clean Group or the Wider Trading
Emissions Group having been instituted, announced or threatened by or against or
remaining outstanding in respect of any member of the Wider Leaf Clean Group or
the Wider Trading Emissions Group which in any such case would have or would
reasonably be expected to have a material adverse effect on the Wider Leaf Clean
Group or the Wider Trading Emissions Group as a whole;
(iii)no contingent or other liability having arisen which would have or would
reasonably be expected to have a material adverse effect on the Wider Leaf Clean
Group or the Wider Trading Emissions Group as a whole; or
(iv)no steps having been taken which are likely to result in the withdrawal,
cancellation, termination or modification of any licence held by any member of
the Wider Leaf Clean Group or the Wider Trading Emissions Group which is
necessary for the proper carrying on of its business and the absence of which in
any case would have or would reasonably be expected to have a material adverse
effect on the Wider Leaf Clean Group or the Wider Trading Emissions Group as a
whole;
(g)save as (i) publicly announced in accordance with the AIM Rules or Disclosure
and Transparency Rules by Leaf Clean or Trading Emissions prior to the
Announcement Date; (ii) fairly disclosed in writing by or on behalf of Trading
Emissions to Leaf Clean or by or on behalf of Leaf Clean to Trading Emissions
(as the case may be) prior to the Announcement Date in connection with the
Merger; (iii) disclosed in the annual report and accounts for Leaf Clean for the
period ended 30 June 2009; or (iv) disclosed in the annual report and accounts
for Trading Emissions for the period ended 30 June 2009, Leaf Clean not having
discovered in relation to the Wider Trading Emissions Group and Trading
Emissions not having discovered in relation to the Wider Leaf Clean Group that:
(i)any financial, business or other information concerning the Wider Leaf Clean
Group or the Wider Trading Emissions Group as contained in the information
publicly disclosed or disclosed to Leaf Clean at any time by or on behalf of any
member of the Wider Trading Emissions Group, or to Trading Emissions at any time
by or on behalf of any member of the Wider Leaf Clean Group, is materially
misleading, contains a material misrepresentation of fact or omits to state a
fact necessary to make that information not materially misleading;
(ii)any member of the Wider Leaf Clean Group or the Wider Trading Emissions
Group is subject to any liability (contingent or otherwise) which is material in
the context of the Leaf Clean Group or the Trading Emissions Group as a whole
which is not disclosed in the annual report and accounts of Trading Emissions
for the period ended 30 June 2009 or of Leaf Clean for the period ended 30 June
2009; or
(iii)any information which adversely affects the import of any information
disclosed at any time by or on behalf of any member of the Wider Leaf Clean
Group or the Wider Trading Emissions Group and which is material in the context
of the Wider Leaf Clean Group or Wider Trading Emissions Group, in each case
when taken as a whole;
(h)Leaf Clean not having discovered in relation to the Wider Trading Emissions
Group and Trading Emissions not having discovered in relation to the Wider Leaf
Clean Group that:
(i)any past or present member of the Wider Leaf Clean Group or the Wider Trading
Emissions Group has failed to comply with any and/or all applicable legislation
or regulations, of any jurisdiction with regard to the disposal, spillage,
release, discharge, leak or emission of any waste or hazardous substance or any
substance likely to impair the environment or harm human health or animal health
or otherwise relating to environmental matters, or that there has otherwise been
any such disposal, spillage, release, discharge, leak or emission (whether or
not the same constituted a non-compliance by any person with any such
legislation or regulations, and wherever the same may have taken place) any of
which disposal, spillage, release, discharge, leak or emission would be likely
to give rise to any liability (actual or contingent) on the part of any member
of the Wider Leaf Clean Group or the Wider Trading Emissions Group and which is
material in the context of the Wider Leaf Clean Group or the Wider Trading
Emissions Group as a whole; or
(ii)there is, or is likely to be, for that or any other reason whatsoever, any
liability (actual or contingent) of any past or present member of the Wider Leaf
Clean Group or the Wider Trading Emissions Group to make good, repair, reinstate
or clean up any property or any controlled waters now or previously owned,
occupied, operated or made use of or controlled by any such past or present
member of the Wider Leaf Clean Group or the Wider Trading Emissions Group, under
any environmental legislation, regulation, notice, circular or order of any
government, governmental, quasi-governmental, state or local government,
supranational, statutory or other regulatory body, agency, court, association or
any other person or body in any jurisdiction and which is material in the
context of the Wider Leaf Clean Group or the Wider Trading Emissions Group as a
whole; and
(i)no circumstance having arisen which would, if subsisting upon and remaining
unremedied after the Merger taking effect, entitle Leaf Clean to terminate the
Investment Advisory Agreement.
4.Subject to the requirements of the Panel in accordance with the Code:
(a)Leaf Clean reserves the right to waive, in whole or in part, all or any of
the above conditions, except conditions 1, 2 and 3(a), so far as they relate to
Trading Emissions, the Wider Trading Emissions Group, or any part thereof; and;
(b)Trading Emissions reserves the right to waive, in whole or in part, all or
any of the above conditions, except conditions 1, 2 and 3(a), so far as they
relate to Leaf Clean, the Wider Leaf Clean Group, or any part thereof.
PART B: CERTAIN FURTHER TERMS
1.The Merger will not proceed if, before the date of the Court Meeting and the
Trading Emissions EGM: (a) the Merger is referred to the Competition Commission
in the United Kingdom; (b) the European Commission initiates proceedings under
Article 6(1)(c) of the Merger Regulation in relation to the Merger; or (c) there
is a reference to the Competition Commission following a referral by the
European Commission under Article 9.1 of the Merger Regulation.
2.Leaf Clean and Trading Emissions reserve the right to implement the Merger by
way of a takeover offer. In such event, such offer will be implemented on the
same terms so far as applicable (subject to appropriate amendments, including
(without limitation and subject to the consent of the Panel) an acceptance
condition set at 90 per cent. (or such lesser percentage (being more than 50 per
cent.) as Leaf Clean may decide) in nominal value of the Trading Emissions
Shares to which such offer relates).
3.The implications of the Scheme and the Merger for overseas shareholders may be
affected by the laws of the relevant jurisdictions. Overseas shareholders should
inform themselves about and observe any applicable legal requirements.
4.The Scheme will be governed by the laws of the Isle of Man and is subject to
the jurisdiction of the Court.
APPENDIX II
FORMULAE FOR CALCULATIONS OF TRADING EMISSIONS FAV
AND LEAF CLEAN FAV
The aggregate number of New Leaf Clean Shares which each Scheme Shareholder will
be entitled to receive in consideration for the transfer of his Scheme Shares to
Leaf Clean will be calculated by dividing the Trading Emissions FAV by the Leaf
Clean FAV (the "FAV Ratio") and multiplying the Scheme Shareholder's aggregate
holding of Scheme Shares by the FAV Ratio. Fractions of New Leaf Clean Shares
will not be allotted or issued pursuant to the Scheme and fractional
entitlements will be rounded down to the nearest whole number of New Leaf Clean
Shares. The number of Scheme Shares held by a Scheme Shareholder will be taken
as at the close of business on the Scheme Record Date.
The Trading Emissions FAV and Leaf Clean FAV will be calculated as provided
below. Both Formula Asset Values will be calculated in pence, rounded down to
four decimal places, with 0.00005 pence being rounded downwards.
Accordingly, the Trading Emissions FAV will be:
(A + B + C + D + E) - (F + G + H + I + (J + K) / 2)
L
and the Leaf Clean FAV will be:
(A + B + C + D + E) - (F + G + H + I + (J + K) / 2)
M
where in relation to each company:
A is the value of those investments
of the relevant company, as at the close of business on the Calculation
Date, which are listed or dealt in on a recognised stock exchange, calculated
by reference to the bid
quotations or prices at the close of business
on the Calculation Date. In the case of debt related
securities
(including convertible debt securities), the value of the investment is the bid
quotation or price
as at the close of business on the Calculation
Date, subject to adjustment to exclude any accrual of
interest up to
the close of business on the Calculation Date. The quotation or price shall be
taken from
the principal stock exchange or market where the relevant
investment is listed or dealt in, as shown by
the exchange's or
market's recognised method of publication of prices for such
investments;
B is the value of those investments of the relevant
company, as at the close of business on the Calculation
Date, which
are dealt in on an "over-the-counter" market calculated by reference to the
average of the
average prices marked for those investments on each of
the five business days up to and including the
Calculation Date on
which there were dealings recorded, as shown by the relevant market's recognised
method of publication of prices for such investments;
C is
the value of all those traded options and futures contracts to which the
relevant company is party as
at the close of business on the
Calculation Date which are traded on a stock, commodities, financial
futures or other securities exchange, calculated by reference to the official
middle closing prices on the
Calculation Date, as shown by the
relevant exchange's recognised method of publication of such prices;
D
is the value of all other investments of the relevant company which will be
valued as at the close of
business on the Calculation Date at fair
values as agreed between the boards of Trading Emissions and
Leaf
Clean or, failing such agreement, as determined by an independent
expert;
E is the actual amount as at the close of business on the
Calculation Date of any sums due to the relevant
parent company from
debtors (for these purposes including any dividends receivable on investments
quoted as ex-dividend and any accrual of interest, up to the close of
business on the Calculation Date, on
debt related securities but
excluding any dividend, distribution or interest unlikely to be received or the
amount of which has been taken into account in the value of any of the
investments comprised in A to D
above), any prepaid expenses, any tax
recoverable, any cash and deposits with or balances at banks,
bills
receivable or money market instruments of the relevant company (together in each
case with
accrued interest less an accrual for any associated tax) and
the fair value of any other tangible assets not
otherwise accounted for,
determined by agreement between the boards of Trading Emissions and Leaf
Clean or, failing such agreement, as determined by an independent
expert;
F is the principal amount as at the close of business on the
Calculation Date of any outstanding borrowings
of the relevant company
plus accrued but not paid interest, commitment fees incurred but not paid and
other charges up to and including that date;
G is the amount
of any dividend or other distribution declared or announced on or before the
Calculation
Date so far as not previously paid, as determined by
agreement between the boards of Trading
Emissions and Leaf Clean or,
failing such agreement, as determined by an independent expert;
H is
the amount of any taxation payable to any taxation authority including HMRC (net
of any repayment
receivable from HMRC), making provision for a
corporation tax charge on the net profits for all applicable
periods
up to the Calculation Date, and offsetting from such sum any recoverable foreign
withholding
taxes and any recoverable UK income tax as agreed between
the boards of Trading Emissions and Leaf
Clean or, failing such
agreement, as determined by an independent expert;
I is the amount
which fairly reflects at the close of business on the Calculation Date all other
accrued
liabilities of the relevant parent company including a fair
provision for any contingent liabilities (including
liabilities to
taxation, whether or not deferred) or losses including disputed claims) in so
far as not
otherwise taken into account as agreed between the boards of
Trading Emissions and Leaf Clean or,
failing such agreement, as
determined by an independent expert, but excluding accrued liabilities also
included in J and K below;
J is the amount of transaction costs
incurred by Trading Emissions in relation to the Merger;
K is the
amount of transaction costs incurred by Leaf Clean in relation to the Merger;
L is the total number of Trading Emissions Shares in issue as at
close of business on the Calculation
Date; and
M is the
total number of Leaf Clean Shares in issue (less any Leaf Clean Shares held in
treasury) as at
close of business on the Calculation Date.
Notes:
1. For the purposes of the above calculations, the value of assets and
liabilities denominated in currencies other than sterling shall be notionally
converted at the bid rates of exchange in London between sterling and such other
currencies at the close of business on the Calculation Date, as agreed by the
boards of Trading Emissions and Leaf Clean or, failing such agreement, as
determined by an independent expert.
2. In the case of A to D above, if there has been any general suspension of
trading on the relevant stock exchange or market, or if it was closed for
business, on the Calculation Date, the value of the investments concerned shall
be taken as at the close of business on the immediately preceding date on which
there was trading on the relevant stock exchange or market, except that if there
has been a material adverse change in the financial position of the underlying
investment, a fair provision determined by agreement between the boards of
Trading Emissions and Leaf Clean or, failing such agreement, as determined by an
independent expert, shall be made to reflect the adverse change in the value of
the investment.
3. Subject to Note 2 above, in the case of A to D above:
(a) where no price is quoted in respect of any such investment or where
dealings in such investment have been suspended on any relevant date or, in the
case of B above, if there have been no dealings recorded in respect of any such
investment for any of the 5 business days up to and including the Calculation
Date; and
(b) where any such investment as is referred to therein is, as at the
Calculation Date, subject to any legally binding obligation on the relevant
company to dispose of the same, whether as a result of the Merger or otherwise,
at a price less than that determined in accordance with A to D above, as the
case may be, or to a legally binding entitlement of the relevant company to
dispose of the same, whether as a result of the Merger or otherwise, at a price
higher than that so determined, then such investment shall be valued at such
other price unless such obligation or entitlement is unconditionally and
irrevocably waived or lapses before the close of business on the Calculation
Date.
4. The independent expert referred to in this appendix shall mean a member of
the London Investment Banking Association or a member firm of the London Stock
Exchange or a member of the Institute of Chartered Accountants in England and
Wales (not connected with any of the parties to this transaction) selected by
the boards of Trading Emissions and Leaf Clean. In making any determination
referred to in this appendix, the boards of Trading Emissions and Leaf Clean or
any independent expert, as the case may be, shall act as experts and not as
arbitrators, and their determination shall, in the absence of fraud (and subject
to any agreement otherwise between Trading Emissions and Leaf Clean), be final
and legally binding on all interested parties and, in the absence of fraud, none
of them shall be under any liability to any person by reason thereof or by
anything done or omitted to be done by them for the purposes thereof or in
connection therewith.
5. With regard to D above, any unquoted investments shall be valued by the
directors of the relevant company on the basis of the BVCA guidelines.
6. With regard to D and/or E above, the boards of Trading Emissions and Leaf
Clean and, if appointed, any independent expert shall have regard, inter alia,
to the following when determining the valuation of any investment or other asset
(which shall be calculated on the basis of a notional sale by a willing seller
to a willing buyer, without regard to any additional value that might be
attributed to the investment or asset by any special category of potential
purchaser):
(a) the existence of any pre-emption rights or obligations of such investment
or asset or any other restrictions on the transfer or disposal of the same which
may exist or which may arise as a consequence of the proposed transfer of such
investment or asset or as a consequence of the transfer of such investment or
asset to any party on the winding up of the relevant company;
(b) the marketability of such investment or asset; and
(c) the terms of any recent dealings in such investment or asset.
7. With regard to E above, the boards of Trading Emissions and Leaf Clean
and, if appointed, the independent expert, shall, except in the case of debtors
and tangible assets, be bound by the actual amount of such items and, in the
case of debtors and tangible assets, shall have regard to but shall not be bound
by the accounting policies used by the relevant company in its audited financial
statements for the period ended 30 June 2009 in the case of Trading Emissions
and 30 June 2009 in the case of Leaf Clean.
8. With regard to I above, all liabilities or contingent liabilities of Leaf
Clean under the Investment Advisory Agreement and Trading Emissions IAA
Amendment Agreements shall be excluded but all liabilities and contingent
liabilities of Trading Emissions and Leaf Clean under the existing investment
advisory agreements between those persons respectively and EEA shall be
included. In the case of Trading Emissions, the calculation of I above shall
specifically further include all liabilities and contingent liabilities under an
investment advisory agreement dated 14 April 2005 (as amended) and Performance
Fee Amendment Agreement in each case between Trading Emissions and EEA.
9. The asset adviser and administrator, being EEA and Chamberlain Fund
Services Ltd respectively in the case of Trading Emissions and EEA and EHM
International Ltd respectively in the case of Leaf Clean, shall in each case
prepare for the relevant company information, comparative analysis and
supporting data to facilitate each of the respective Boards of Trading Emissions
and Leaf Clean in calculating each company's FAV on the Calculation Date. Such
calculations will also be submitted to each other party's financial advisers,
namely Liberum Capital on behalf of Trading Emissions and Cenkos Securities on
behalf of Leaf Clean.
APPENDIX III
SOURCES AND BASES OF INFORMATION
1.Unless otherwise stated:
(a)the financial information relating to Trading Emissions has been extracted
(without material adjustment) from the audited consolidated accounts for the
Trading Emissions Group for the year ended 30 June 2009 reported under IFRS; and
(b)the financial information relating to Leaf Clean has been extracted (without
material adjustment) from the audited accounts for the Leaf Clean Group for the
year ended 30 June 2009.
2.As at the close of business on 16 December 2009 (being the latest practicable
date prior to the date of this announcement), Trading Emissions had in issue
257,431,973 ordinary shares of GBP0.01 each and Leaf Clean had in issue
183,633,773 ordinary shares of GBP0.0001 each. The International Securities
Identification Number for Trading Emissions Shares is GB00B073G363 and for Leaf
Clean Shares is KYG541351014.
APPENDIX IV
IRREVOCABLE UNDERTAKINGS AND LETTERS OF INTENT
Part A - Irrevocable Undertakings
The following Trading Emissions Directors have given irrevocable undertakings to
vote in favour of the Trading Emissions Resolutions at the Trading Emissions EGM
and the Court Meeting in respect of the number of Trading Emissions Shares set
out below:
+-------------------------+-------------------------+--------------------------+
| Name | Number of Trading | Percentage of Trading |
| | Emissions Shares | Emissions issued share |
| | | capital |
+-------------------------+-------------------------+--------------------------+
| | | |
+-------------------------+-------------------------+--------------------------+
| Neil Eckert | 1,818,300 | 0.71 |
+-------------------------+-------------------------+--------------------------+
| Malcolm Gillies | 66,707 | 0.03 |
+-------------------------+-------------------------+--------------------------+
| Total | 1,885,007 | 0.73 |
+-------------------------+-------------------------+--------------------------+
The undertakings given by the Trading Emissions Directors (described above) will
cease to be binding if the Scheme does not become effective in accordance with
its terms, or if the Scheme otherwise fails to be sanctioned by the Court and/or
approved at the Court Meeting held to approve the Scheme, or the Scheme is
withdrawn.
The following Leaf Clean Directors have given irrevocable undertakings to vote
in favour of the Leaf Clean Resolutions at the Leaf Clean EGM in respect of the
number of Leaf Clean Shares set out below:
+-------------------------+-------------------------+-------------------------+
| Name | Number of Leaf Clean | Percentage of Leaf |
| | Shares | Clean issued share |
| | | capital |
+-------------------------+-------------------------+-------------------------+
| | | |
+-------------------------+-------------------------+-------------------------+
| Peter Tom | 50,000 | 0.03 |
+-------------------------+-------------------------+-------------------------+
| J. Curtis Moffatt | 16,500 | 0.01 |
+-------------------------+-------------------------+-------------------------+
| Bran Keogh | 50,000 | 0.03 |
+-------------------------+-------------------------+-------------------------+
| Peter O'Keefe | 11,000 | 0.01 |
+-------------------------+-------------------------+-------------------------+
| Total | 127,500 | 0.07 |
+-------------------------+-------------------------+-------------------------+
The undertakings given by the Leaf Clean Directors (described above) will cease
to be binding if the Scheme does not become effective in accordance with its
terms,, or if the Scheme otherwise fails to be sanctioned by the Court and/or
approved at the Court Meeting held to approve the Scheme, or the Scheme is
withdrawn.
The following Trading Emissions Shareholders have given irrevocable undertakings
to vote, or to procure votes in favour of the Trading Emissions Resolutions at
the Trading Emissions EGM and the Court Meeting in respect of the number of
Trading Emissions Shares set out below:
+-------------------------+-------------------------+-------------------------+
| Trading Emissions | Number of Trading | Percentage of Trading |
| Shareholder | Emissions Shares | Emissions issued share |
| | | capital |
+-------------------------+-------------------------+-------------------------+
| | | |
+-------------------------+-------------------------+-------------------------+
| Aviva Investors Global | 9,289,000 | 3.6 |
| Services Limited | | |
+-------------------------+-------------------------+-------------------------+
| EEA Global Limited | 10,473,307 | 4.1 |
+-------------------------+-------------------------+-------------------------+
| Invesco Asset | 83,908,986 | 32.6 |
| Management Limited | | |
+-------------------------+-------------------------+-------------------------+
| Jupiter Asset | 15,467,510 | 6.0 |
| Management Limited | | |
+-------------------------+-------------------------+-------------------------+
| | | |
+-------------------------+-------------------------+-------------------------+
| Total | 119,138,803 | 46.3 |
+-------------------------+-------------------------+-------------------------+
The undertakings given by EEA Global Limited and Jupiter Asset Management
Limited (described above) will cease to be binding if the Scheme does not become
effective in accordance with its terms, or if the Scheme otherwise fails to be
sanctioned by the Court and/or approved at the Court Meeting held to approve the
Scheme, or the Scheme is withdrawn, or if an announcement of a firm intention to
make a competing offer for the whole of the issued share capital of either
Trading Emissions or Leaf Clean is made by a third party, provided that the
consideration is in cash and it represents at least 90 per cent. of the higher
of the FAV of a Trading Emissions Share as set out in the illustration to this
announcement or (ii) the FAV of a Trading Emissions Share as published by
Trading Emissions or Leaf Clean after the Announcement Date.
The undertaking by Aviva Investors Global Services Limited will also cease to be
binding if a third party announces a firm intention to make an offer under Rule
2.5 of the Code for all of the Trading Emissions Shares which, in its reasonable
opinion, is not less than 5 per cent. greater than the value per share for each
Trading Emissions Share as part of the Merger.
The undertaking by Invesco Asset Management Limited will cease to be binding if
the Scheme does not become effective in accordance with its terms, or if the
Scheme otherwise fails to be sanctioned by the Court and/or approved at the
Court Meeting held to approve the Scheme, or the Scheme is withdrawn, or if a
third party announces a firm intention to make an offer under Rule 2.5 of the
Code for all of the Trading Emission Shares which, in its reasonable opinion,
represents an improvement to the terms of the Scheme or the Offer.
The following Leaf Clean Shareholders have given irrevocable undertakings to
vote, or to procure votes, in favour of the Leaf Clean Resolutions at the Leaf
Clean EGM in respect of the number of Leaf Clean Shares set out below:
+-------------------------+-------------------------+-------------------------+
| Leaf Clean Shareholder | Number of Leaf Clean | Percentage of Leaf |
| | Shares | Clean issued share |
| | | capital |
+-------------------------+-------------------------+-------------------------+
| | | |
+-------------------------+-------------------------+-------------------------+
| Aviva Investors Global | 10,044,600 | 5.5 |
| Services Limited | | |
+-------------------------+-------------------------+-------------------------+
| Invesco Asset | 59,000,000 | 32.1 |
| Management Limited | | |
+-------------------------+-------------------------+-------------------------+
| Jupiter Asset | 10,000,000 | 5.4 |
| Management Limited | | |
+-------------------------+-------------------------+-------------------------+
| | | |
+-------------------------+-------------------------+-------------------------+
| Total | 79,044,600 | 43.0 |
+-------------------------+-------------------------+-------------------------+
The undertaking given by Jupiter Asset Management Limited (described above) will
cease to be binding if the Scheme does not become effective in accordance with
its terms, or if the Scheme otherwise fails to be sanctioned by the Court and/or
approved at the Court Meeting held to approve the Scheme, or the Scheme is
withdrawn, or if an announcement of a firm intention to make a competing offer
for the whole of the issued share capital of either Trading Emissions or Leaf
Clean is made by a third party, provided that the consideration is in cash and
it represents at least 90 per cent. of the higher of (i) the FAV of a Leaf Clean
Share as set out in the illustration to this announcement or (ii) the FAV of a
Leaf Clean Share as published by Trading Emissions or Leaf Clean after the
Announcement Date.
The undertaking by Aviva Investors Global Services Limited will also cease to
binding if a third party announces a firm intention to make an offer under Rule
2.5 of the Code for all of the Leaf Clean Shares which, in its reasonable
opinion, is not less than 5 per cent. greater than the value per share for each
Leaf Clean Share as part of the Merger.
The undertaking by Invesco Asset Management Limited will cease to be binding if
the Scheme does not become effective in accordance with its terms, or if the
Scheme otherwise fails to be sanctioned by the Court and/or approved at the
Court Meeting held to approve the Scheme, or the Scheme is withdrawn, or if a
third party announces a firm intention to make an offer under Rule 2.5 of the
Code for all of the Leaf Clean Shares which, in its reasonable opinion,
represents an improvement to the terms of the Scheme or the Offer.
Part B - Letters of Intent
Letters of intent to vote, or procure the voting of the relevant shares, in
favour of the Trading Emissions Resolutions and the Leaf Clean Resolutions have
been received as follows:
+--------------------+--------------+--------------+--------------+--------------+
| Shareholder | Number of | Percentage | Number of | Percentage |
| | Trading | of Trading | Leaf Clean | of Leaf |
| | Emissions | Emissions | Shares | Clean issued |
| | Shares | issued share | | share |
| | | capital | | capital |
+--------------------+--------------+--------------+--------------+--------------+
| | | | | |
+--------------------+--------------+--------------+--------------+--------------+
| Moore Capital | 40,557,526 | 15.8 | 6,540,000 | 3.6 |
| Management L.P. | | | | |
+--------------------+--------------+--------------+--------------+--------------+
| Stark investments | | | 12,500,000 | 6.8 |
| (UK) Limited | | | | |
+--------------------+--------------+--------------+--------------+--------------+
| Total | 40,557,526 | 15.8 | 19,040,000 | 10.4 |
+--------------------+--------------+--------------+--------------+--------------+
APPENDIX V
DEFINITIONS
In this announcement, the following definitions apply unless the context
requires otherwise:
+-----------------------+-----------------------------------------------------+
| Act | the Isle of Man Companies Act 1931, as amended |
+-----------------------+-----------------------------------------------------+
| AIM | the AIM market of the London Stock Exchange |
+-----------------------+-----------------------------------------------------+
| AIM Rules | the AIM Rules for Companies |
+-----------------------+-----------------------------------------------------+
| Announcement or | this announcement made by Trading Emissions and |
| announcement | Leaf Clean pursuant to Rule 2.5 of the Code |
| | regarding the proposed merger of Trading Emissions |
| | and Leaf Clean by means of the Scheme |
+-----------------------+-----------------------------------------------------+
| Announcement Date | 17 December 2009, being the date of this |
| | Announcement |
+-----------------------+-----------------------------------------------------+
| Business Day | a day (excluding Saturdays, Sundays and UK public |
| | holidays) on which banks are generally open for |
| | business in London and the Isle of Man |
+-----------------------+-----------------------------------------------------+
| Calculation Date | for the purposes of the Scheme, the time and date |
| | on which Trading Emissions' FAV and Leaf Clean's |
| | FAV will be calculated, being close of business on |
| | the day which is seven days before the date of the |
| | Scheme Court Hearing or, if that day is not a |
| | Business Day, the next following Business Day |
+-----------------------+-----------------------------------------------------+
| Cenkos Securities | Cenkos Securities plc, Leaf Clean's financial |
| | adviser |
+-----------------------+-----------------------------------------------------+
| Closing Price | the closing middle market quotation of a relevant |
| | share as derived from the Daily Official List or |
| | the London Stock Exchange's website |
+-----------------------+-----------------------------------------------------+
| Code | the United Kingdom City Code on Takeover and |
| | Mergers |
+-----------------------+-----------------------------------------------------+
| Companies Act 2006 | the United Kingdom Companies Act 2006, as amended |
+-----------------------+-----------------------------------------------------+
| Competition | the independent public body established by the |
| Commission | Competition Act 1998 |
+-----------------------+-----------------------------------------------------+
| Conditions | the conditions to the implementation of the Merger |
| | set out in Appendix I to this Announcement |
+-----------------------+-----------------------------------------------------+
| Court | the High Court of Justice of the Isle of Man |
+-----------------------+-----------------------------------------------------+
| Court Meeting | the meeting of the holders of Scheme Shares |
| | convened by order of the Court pursuant to section |
| | 152 of the Act to consider and, if thought fit, |
| | approve the Scheme (with or without amendment) (and |
| | any adjournment thereof) |
+-----------------------+-----------------------------------------------------+
| Court Order | the order of the Court sanctioning the Scheme under |
| | section 152 of the Act |
+-----------------------+-----------------------------------------------------+
| Daily Official List | the daily official list of the London Stock |
| | Exchange |
+-----------------------+-----------------------------------------------------+
| Deed of Novation | the deed of novation, amendment and restatement |
| | between Leaf Clean, Trading Emissions and EEA dated |
| | 17 December 2009 |
+-----------------------+-----------------------------------------------------+
| Disclosure and | the Disclosure and Transparency Rules, as published |
| Transparency Rules | by the Financial Services Authority |
+-----------------------+-----------------------------------------------------+
| EEA | EEA Fund Management Limited, a company incorporated |
| | in England and Wales with registered number |
| | 04872946 and whose registered office is at 7th |
| | Floor, 22 Billiter Street, London EC3M 2RY |
+-----------------------+-----------------------------------------------------+
| Effective Date | the date on which the Scheme becomes effective in |
| | accordance with its terms |
+-----------------------+-----------------------------------------------------+
| Enlarged Group | the combined Trading Emissions Group and the Leaf |
| | Clean Group following completion of the Merger |
+-----------------------+-----------------------------------------------------+
| Financial Services | the UK Financial Services Authority |
| Authority or FSA | |
+-----------------------+-----------------------------------------------------+
| Financial Supervision | the Isle of Man Financial Supervision Commission's |
| Commission | Companies Registry |
+-----------------------+-----------------------------------------------------+
| Formula Asset Value | in respect of Trading Emissions or Leaf Clean, the |
| or FAV | amount calculated as such at any date in accordance |
| | with the formula set out in Appendix II of this |
| | announcement |
+-----------------------+-----------------------------------------------------+
| Group | in relation to any person, that person and any |
| | companies which are holding companies, subsidiaries |
| | or subsidiary undertakings of it or of any such |
| | holding company |
+-----------------------+-----------------------------------------------------+
| HMRC | Her Majesty's Revenue & Customs |
+-----------------------+-----------------------------------------------------+
| IFRS | International Financial Reporting Standards, as |
| | adopted by the European Union |
+-----------------------+-----------------------------------------------------+
| Implementation | the implementation agreement between Trading |
| Agreement | Emissions and Leaf Clean dated 17 December 2009 in |
| | connection with the implementation of the Scheme |
+-----------------------+-----------------------------------------------------+
| Investment Advisory | the investment advisory agreement between Leaf |
| Agreement | Clean, Trading Emissions and EEA dated 17 December |
| | 2009 |
+-----------------------+-----------------------------------------------------+
| Liberum Capital | Liberum Capital Limited, Trading Emissions' |
| | financial adviser |
+-----------------------+-----------------------------------------------------+
| Leaf Clean | Leaf Clean, an exempted company incorporated with |
| | limited liability in the Cayman Islands on 14 May |
| | 2007 with registered number MC-187481 and having |
| | its registered office at P.O. Box 309GT, Ugland |
| | House, South Church Street, George Town, Grand |
| | Cayman, Cayman Islands |
+-----------------------+-----------------------------------------------------+
| Leaf Clean Board | the board of directors of Leaf Clean |
+-----------------------+-----------------------------------------------------+
| Leaf Clean Directors | Peter Tom, J. Curtis Moffatt, Bran Keogh and Peter |
| | O'Keefe |
+-----------------------+-----------------------------------------------------+
| Leaf Clean EGM or | the extraordinary general meeting (or any |
| Leaf Clean | adjournment thereof) of the holders of Leaf Clean |
| Extraordinary General | Shares to be convened to consider and, if thought |
| Meeting | fit, to approve the resolution(s) to be proposed |
| | thereat in connection with the Scheme (or, if |
| | relevant, the takeover offer) and such other |
| | matters as may be agreed between Leaf Clean and |
| | Trading Emissions as necessary or desirable for the |
| | purposes of implementing the Scheme (or, if |
| | relevant, the takeover offer) |
+-----------------------+-----------------------------------------------------+
| Leaf Clean FAV | the Formula Asset Value as at the Calculation Date |
| | attributable to Leaf Clean as determined in |
| | accordance with the formulae set out in Appendix II |
| | of this announcement |
+-----------------------+-----------------------------------------------------+
| Leaf Clean Group | Leaf Clean and its Group |
+-----------------------+-----------------------------------------------------+
| Leaf Clean | the resolutions to be proposed at the Leaf Clean |
| Resolutions | EGM in connection with the Scheme and such other |
| | resolutions as may be agreed between Leaf Clean and |
| | Trading Emissions as necessary or desirable for the |
| | purposes of implementing the Scheme and the Merger |
+-----------------------+-----------------------------------------------------+
| Leaf Clean | the circular to Leaf Clean Shareholders enclosing a |
| Shareholder Circular | notice of the Leaf Clean EGM |
+-----------------------+-----------------------------------------------------+
| Leaf Clean | the holders of the Leaf Clean Shares from time to |
| Shareholders | time |
+-----------------------+-----------------------------------------------------+
| Leaf Clean Shares | ordinary shares of GBP0.0001 each in the capital of |
| | Leaf Clean |
+-----------------------+-----------------------------------------------------+
| London Stock Exchange | London Stock Exchange plc or its successor |
+-----------------------+-----------------------------------------------------+
| Long Stop Date | 90 calendar days from the date of posting the |
| | Scheme Document to Trading Emissions Shareholders |
+-----------------------+-----------------------------------------------------+
| Main Market | the Main Market of the London Stock Exchange |
+-----------------------+-----------------------------------------------------+
| Meetings | the Court Meeting and the Trading Emissions EGM |
+-----------------------+-----------------------------------------------------+
| Merger | the proposed merger of Leaf Clean and Trading |
| | Emissions to be implemented by way of the Scheme |
| | and the other matters relevant thereto to be |
| | considered at the Court Meeting and the Trading |
| | Emissions EGM or, in Leaf Clean's and Trading |
| | Emissions' absolute discretion, with the consent of |
| | the Panel, by way of a takeover offer |
+-----------------------+-----------------------------------------------------+
| Merger Regulation | Council Regulation (EC) 139/2004 |
+-----------------------+-----------------------------------------------------+
| NAV or Net Asset | unaudited net asset value calculated in accordance |
| Value | with applicable accounting policies |
+-----------------------+-----------------------------------------------------+
| New Leaf Clean Shares | the new Leaf Clean Shares to be allotted and issued |
| | to Trading Emissions Shareholders pursuant to the |
| | Scheme |
+-----------------------+-----------------------------------------------------+
| Official List | the Official List of the UK Listing Authority |
+-----------------------+-----------------------------------------------------+
| Panel | the United Kingdom Panel on Takeovers and Mergers |
+-----------------------+-----------------------------------------------------+
| Performance Fee | the performance fee amendment agreement between EEA |
| Amendment Agreement | and Trading Emissions dated 16 October 2008 |
+-----------------------+-----------------------------------------------------+
| Scheme | the proposed scheme of arrangement to be made under |
| | section 152 of the Act between Trading Emissions |
| | and the Scheme Shareholders, with or subject to any |
| | modification, addition or condition approved or |
| | imposed by the Court and agreed to by Trading |
| | Emissions and Leaf Clean, particulars of which will |
| | be set out in the Scheme Document |
+-----------------------+-----------------------------------------------------+
| Scheme Court Hearing | the hearing by the Court of the petition to |
| | sanction the Scheme |
+-----------------------+-----------------------------------------------------+
| Scheme Document | the document to be posted to the Trading Emissions |
| | Shareholders as soon as practicable following the |
| | Announcement Date containing and setting out, |
| | amongst other things, the terms and conditions of |
| | the Scheme and the Merger, certain information |
| | about Leaf Clean and Trading Emissions, the Scheme |
| | and the notices convening the Court Meeting and the |
| | Trading Emissions EGM |
+-----------------------+-----------------------------------------------------+
| Scheme Record Time | 6:00 p.m. (London time) on the Business Day before |
| | the Effective Date |
+-----------------------+-----------------------------------------------------+
| Scheme Shareholders | the holders of Scheme Shares |
+-----------------------+-----------------------------------------------------+
| Scheme Shares | (i) the Trading |
| | Emissions Shares in |
| | issue at the date of |
| | the Scheme; |
| | (ii) any Trading |
| | Emissions Shares |
| | issued after the |
| | date of the Scheme |
| | and before the |
| | Voting Record Time; |
| | (iii) any Trading |
| | Emissions Shares |
| | issued at or after |
| | the Voting Record |
| | Time and before the |
| | Scheme Record Time |
| | in respect of which |
| | the original or any |
| | subsequent holders |
| | thereof are, or |
| | shall have agreed in |
| | writing to be, bound |
| | by the Scheme |
+-----------------------+-----------------------------------------------------+
| Securities Act | the US Securities Act of 1933, as amended |
+-----------------------+-----------------------------------------------------+
| Side Letter | the side-letter agreement between Leaf Clean and |
| | EEA dated 17 December 2009 |
+-----------------------+-----------------------------------------------------+
| takeover offer | a takeover offer as such term is defined in section |
| | 974 of the Companies Act 2006 |
+-----------------------+-----------------------------------------------------+
| Trading Emissions or | Trading Emissions PLC, a company incorporated in |
| the Company | the Isle of Man with registered number 113037C and |
| | whose registered office is at 3rd Floor, Exchange |
| | House, 54-62 Athol Street, Douglas, Isle of Man, |
| | IM1 1JD |
+-----------------------+-----------------------------------------------------+
| Trading Emissions | the board of directors of Trading Emissions |
| Board | |
+-----------------------+-----------------------------------------------------+
| Trading Emissions | Neil Eckert, Malcolm Gillies, Bertrand Rassool, |
| Directors | Philip Scales, Peter Vanderpump and Nigel Wood |
+-----------------------+-----------------------------------------------------+
| Trading Emissions EGM | the extraordinary general meeting of Trading |
| or Trading Emissions | Emissions (and any adjournment thereof) to be |
| Extraordinary General | convened for the purposes of considering and, if |
| Meeting | thought fit, approving certain resolutions required |
| | to implement the Scheme and the Merger |
+-----------------------+-----------------------------------------------------+
| Trading Emissions FAV | the Formula Asset Value as at the Calculation Date |
| | attributable to Trading Emissions as determined in |
| | accordance with the formulae set out in Appendix II |
| | of this announcement |
+-----------------------+-----------------------------------------------------+
| Trading Emissions | Trading Emissions and its Group |
| Group | |
+-----------------------+-----------------------------------------------------+
| Trading Emissions IAA | the Deed of Novation and the Side Letter |
| Amendment Agreements | |
+-----------------------+-----------------------------------------------------+
| Trading Emissions | the resolutions to be proposed at the Court Meeting |
| Resolutions | and the Trading Emissions EGM in connection with |
| | the Scheme and Merger and such other resolutions as |
| | may be agreed between Leaf Clean and Trading |
| | Emissions as necessary or desirable for the |
| | purposes of implementing the Scheme and the Merger |
+-----------------------+-----------------------------------------------------+
| Trading Emissions | the holders of Trading Emissions Shares, from time |
| Shareholders | to time |
+-----------------------+-----------------------------------------------------+
| Trading Emissions | the ordinary shares of GBP0.01 each in the capital |
| Shares | of Trading Emissions |
+-----------------------+-----------------------------------------------------+
| UK Listing Authority | the Financial Services Authority in its capacity as |
| | the competent authority under the Financial |
| | Services and Markets Act 2000 |
+-----------------------+-----------------------------------------------------+
| UK or United Kingdom | the United Kingdom of Great Britain and Northern |
| | Ireland |
+-----------------------+-----------------------------------------------------+
| US or United States | the United States of America, its territories and |
| | possessions, any state of the United States of |
| | America and the District of Columbia |
+-----------------------+-----------------------------------------------------+
| Voting Record Time | 6.00 p.m. (London time) on the day which is two |
| | days before the date of the Court Meeting or, if |
| | the Court Meeting is adjourned, 6.00 p.m. (London |
| | time) on the day which is two days before the date |
| | of such adjourned meeting |
+-----------------------+-----------------------------------------------------+
| Wider Leaf Clean | Leaf Clean, its subsidiaries, subsidiary |
| Group | undertakings and associated undertakings and any |
| | other body corporate, partnership, joint venture or |
| | person in which Leaf Clean and such undertakings |
| | (aggregating their interests) have a direct or |
| | indirect interest of 20 per cent. or more of the |
| | voting or equity capital or the equivalent |
+-----------------------+-----------------------------------------------------+
| Wider Trading | Trading Emissions, its subsidiaries, subsidiary |
| Emissions Group | undertakings and associated undertakings and any |
| | other body corporate, partnership, joint venture or |
| | person in which Trading Emissions and such |
| | undertakings (aggregating their interests) have a |
| | direct or indirect interest of 20 per cent. or more |
| | of the voting or equity capital or the equivalent |
+-----------------------+-----------------------------------------------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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