TIDMLOG
RNS Number : 4918E
CGI Group Inc.
31 May 2012
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN
PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD
CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH
JURISDICTION
31 May 2012
RECOMMENDED CASH ACQUISITION
of
LOGICA PLC by
CGI GROUP HOLDINGS EUROPE LIMITED (a wholly owned subsidiary of
CGI Group Inc.)
to be effected by means of a Scheme of Arrangement under Part 26
of the Companies Act 2006
Summary
-- The boards of directors of Logica plc ("Logica") and CGI
Group Inc. ("CGI") are pleased to announce that they have reached
agreement on the terms of a recommended cash acquisition of Logica
by CGI Holdings Europe Limited ("CGI Europe"), a wholly owned
subsidiary of CGI, pursuant to which CGI Europe will acquire the
entire issued and to be issued ordinary share capital of Logica
(the "Acquisition"). The Acquisition will be implemented by way of
a scheme of arrangement.
-- Under the terms of the Acquisition:
Logica Shareholders will be entitled to receive 105 pence in
cash per Logica Share.
The Acquisition price represents a premium of approximately:
-- 59.8 per cent. to the Closing Price per Logica Share of 65.70
pence on 30 May 2012 (being the last Dealing Day prior to the date
of this announcement);
-- 49.6 per cent. to the average Closing Price of approximately
70.20 pence per Logica Share for the one month period ending on 30
May 2012 (being the last Dealing Day prior to this announcement);
and
-- 32.8 per cent. to the average Closing Price of approximately
79.05 pence per Logica Share for the six month period ending on 30
May 2012 (being the last Dealing Day prior to this
announcement).
-- The Acquisition values the entire issued and to be issued
ordinary share capital of Logica at approximately GBP1.7 billion
(C$2.8 billion) on the basis of a fully diluted share capital of
1,646 million Logica Shares (net of option proceeds) (assuming that
all rights in respect of in-the-money options under the Logica
Share Schemes are exercised on the basis explained in this
announcement).
-- In addition, the Acquisition implies an enterprise value
multiple of approximately 6.6 times Logica's EBITDA for the 12
months ended 31 December 2011.
-- The consideration payable under the Acquisition will be
funded through a combination of the proceeds from the issuance of
subscription receipts exchangeable for new shares in CGI to Caisse
de depot et placement du Quebec ("CDP") and debt funding from
Canadian Imperial Bank of Commerce ("CIBC"), National Bank of
Canada ("NBC") and The Toronto-Dominion Bank ("TD") to CGI pursuant
to term credit facilities under a new credit agreement and a
backstop revolving credit facility under the same agreement or, if
such backstop revolving credit facility is cancelled, from a
syndicate of lenders including NBC, CIBC and TD pursuant to a
revolving credit facility under the existing credit agreement.
-- It is intended that the Acquisition be implemented by means
of a Court-sanctioned scheme of arrangement under Part 26 of the
2006 Act, further details of which are contained in the full text
of this announcement. CGI Europe reserves the right, subject to the
consent of the Panel, to effect the Acquisition by way of a
Takeover Offer.
-- The Logica Directors, who have been so advised by Rothschild,
Bank of America Merrill Lynch and Deutsche Bank, as the independent
financial advisers for the purposes of Rule 3 of the Code, consider
the terms of the Acquisition to be fair and reasonable. In
providing advice to the Logica Directors, Rothschild, Bank of
America Merrill Lynch and Deutsche Bank have each taken into
account the commercial assessments of the Logica Directors.
-- Accordingly, the Logica Directors intend unanimously to
recommend that Logica Shareholders vote in favour of the Scheme at
the Court Meeting and in favour of the General Meeting Resolutions
as each Logica Director has irrevocably undertaken to do in respect
of Logica Shares he/she beneficially owns, being in aggregate a
total of 2,563,207 Logica Shares, representing approximately 0.16
per cent. of the ordinary share capital of Logica in issue on 30
May 2012 (being the latest practicable date prior to this
announcement). The irrevocable undertakings given by the Logica
Directors will remain in full force and effect if the Acquisition
is effected by way of a Takeover Offer and will cease to be binding
only if the Scheme and, if applicable, any Takeover Offer lapses or
is withdrawn and no new, revised or replacement scheme of
arrangement or takeover offer by CGI Europe is or has been
announced in accordance with Rule 2.7 of the Code. Further details
of these irrevocable undertakings are set out in Appendix III to
this announcement.
-- In addition to the irrevocable undertakings received from the
Logica Directors, CGI Europe has also received irrevocable
undertakings from Schroder and Artemis, institutional shareholders
of Logica, to vote in favour of the Scheme at the Court Meeting and
in favour of the General Meeting Resolutions, in respect of a total
of 292,127,041 Logica Shares, representing approximately 18.03 per
cent. of the ordinary share capital of Logica in issue on 30 May
2012 (being the latest practicable date prior to this
announcement). The irrevocable undertakings received from Schroder
and Artemis will cease to be binding if a competing offer is
announced under Rule 2.7 of the Code which has a value of 10 per
cent. or more above 105 pence per Logica Share (in the case of
Artemis only, where such competing offer is all in cash), unless
CGI Europe has announced an improvement to the terms of the
Acquisition within seven days of the competing offer being
announced (in the case of Schroder) or made (in the case of
Artemis) on terms at least as favourable as under the competing
offer (in the case of Schroder only, in the reasonable opinion of
Schroder). Further details of these irrevocable undertakings are
set out in Appendix III to this announcement.
-- In aggregate, therefore, irrevocable undertakings to vote in
favour of the Scheme at the Court Meeting and in favour of the
General Meeting Resolutions have been received in respect of a
total of 294,690,248 Logica Shares, representing approximately
18.19 per cent. of the ordinary share capital of Logica in issue on
30 May 2012 (being the latest practicable date prior to this
announcement).
-- CGI is a public company incorporated under the laws of the
Province of Quebec, Canada. Founded in 1976 and headquartered in
Montreal, CGI is one of the largest independent providers of
information technology and business process services to clients
worldwide. CGI provides end-to-end services with approximately
31,000 professionals located in offices and centres of excellence
in Canada, the United States, Europe and Asia Pacific. As at 31
March 2012, CGI's annualized revenue was approximately C$4.3
billion and its order backlog was approximately C$13.1 billion. CGI
shares are listed on the TSX (GIB.A) and the NYSE (GIB) and are
included in both the Dow Jones Sustainability Index and the
FTSE4Good Index. As at 30 May 2012 (being the latest practicable
date prior to this announcement) CGI had a market capitalisation of
C$5.4 billion (GBP3.4 billion).
-- The Acquisition will be subject to the satisfaction or waiver
of the Conditions set out in Appendix I to this announcement and in
the Scheme Document. It is expected that the Scheme Document,
containing further information about the Acquisition and notices of
the Court Meeting and General Meeting, together with the Forms of
Proxy, will be posted to Logica Shareholders within 28 days of the
date of this announcement and the Scheme will be effective by the
end of September 2012, subject to the Conditions and certain
further terms set out in Appendix I to this announcement.
Commenting on the Acquisition, Michael Roach, President and
Chief Executive Officer of CGI, said:
"This announcement is consistent with our profitable growth
strategy and with our belief that global consolidation of our
industry is both necessary and inevitable. Logica is a leading
business and technology service company with talented and committed
employees and long-term client relationships. It further
underscores our ongoing commitment to support our clients as they
expand their businesses locally and globally. In addition to
operational breadth and depth, the combined business will have
critical mass and key blue chip client relationships.
We warmly welcome Logica's professionals and believe that the
combined business will provide new and larger growth opportunities
for both CGI's and Logica's employees and clients, as well as
offering CGI shareholders the same superior and industry leading
returns we have delivered historically. We believe we have found
the right acquisition at the right price and at the right time to
create one of the very few truly independent global end-to-end
technology services providers."
Commenting on the Acquisition, David Tyler, Chairman of Logica,
said:
"Over the past few years Logica has successfully integrated its
European businesses into a single organisation with a clear brand
and position in its main markets. Significant investments have been
made in sales and marketing. It has established a strong presence
in outsourcing which now represents 45 per cent. of the business.
Logica has also cut overhead and staff costs substantially and
offshore numbers have more than doubled, improving its cost
competitiveness.
At the same time, industry dynamics have continued to develop.
Competitive intensity has increased as the industry has globalised
and scale has become an ever more important factor in cost
competitiveness and service. Additionally, in Logica's main
European markets there is considerable economic uncertainty, which
affects confidence and demand from both public and private
clients.
Following an approach by CGI, the two companies engaged in a
period of discussion around the possibility of combining the
businesses. The Logica Directors consider there to be a strong
industrial logic for the proposed combination with CGI. It meets
clients' requirements for a more comprehensive international
presence and offers them the benefits of scale. Given the very
limited geographic overlap and CGI's strong reputation for
successful integration, we believe this transaction will offer
great opportunities for Logica's people. For our shareholders, the
offer represents an opportunity to realise a substantial premium in
cash to the current share price."
This summary should be read in conjunction with, and is subject
to, the accompanying full text of this announcement which sets out
further details of the Acquisition and which forms an integral part
of this announcement (including Appendices). Appendix I to this
announcement contains the Conditions to, and certain further terms
of, the Acquisition. Appendix II to this announcement contains
further details of the sources of information and bases of
calculations set out in this announcement. Appendix III to this
announcement contains further details of the irrevocable
undertakings received by CGI Europe. Appendix VIII to this
announcement contains definitions of certain expressions used in
this summary and in this announcement.
Enquiries:
CGI Group Inc.
Lorne Gorber Tel: +1 514 841 3355
Goldman Sachs International (financial Tel: +44 (0) 20 7774
adviser to CGI) 1000
Gregg Lemkau
Nick Harper
Nicholas van den Arend
RLM Finsbury (public relations adviser Tel: +44 (0) 20 7251
to CGI) 3801
James Murgatroyd
Logica plc Tel: +44 (0) 20 7637
9111
Investor relations: Karen Keyes
Media relations: Louise Fisk
Rothschild (joint financial adviser to Tel: +44 (0) 20 7280
Logica) 5000
Warner Mandel
Jeremy Millard
Nick Ivey
Bank of America Merrill Lynch (joint financial Tel: +44 (0) 20 7628
adviser and joint corporate broker to 1000
Logica)
Simon Gorringe
Guy Hayward-Cole
Andrew Tusa
Deutsche Bank (joint financial adviser Tel: +44 (0) 20 7545
and joint corporate broker to Logica) 8000
Charles Wilkinson
Richard Sheppard
Charles Bryant
Brunswick (public relations adviser to Tel: +44 (0) 20 7404
Logica) 5959
Sarah West
Jonathan Glass
Goldman Sachs International, which is authorised and regulated
in the United Kingdom by the FSA, is acting for CGI and CGI Europe
and no one else in connection with the Acquisition and will not be
responsible to anyone other than CGI and CGI Europe for providing
the protections afforded to clients of Goldman Sachs International,
or for giving advice in connection with the Acquisition or any
matter referred to herein.
Rothschild, which is authorised and regulated in the United
Kingdom by the FSA, is acting exclusively for Logica and no one
else in connection with the Acquisition and will not be responsible
to anyone other than Logica for providing the protections afforded
to clients of Rothschild or for providing advice in connection with
the Acquisition or in relation to matters described in this
announcement or any transaction or arrangement referred to
herein.
Bank of America Merrill Lynch, which is authorised and regulated
in the United Kingdom by the FSA, is acting exclusively for Logica
and for no one else in connection with the Acquisition and will not
be responsible to any person other than Logica for providing the
protections afforded to clients of Bank of America Merrill Lynch,
or for providing advice in relation to the Acquisition, the content
of this announcement or any matter referred to herein.
Deutsche Bank AG, London Branch is authorised under German
Banking Law (competent authority: BaFin - Federal Financial
Supervisory Authority) and authorised and subject to limited
regulation by the Financial Services Authority. Details about the
extent of Deutsche Bank AG, London Branch's authorisation and
regulation by the Financial Services Authority are available on
request. Deutsche Bank AG, London Branch is acting as financial
adviser to Logica and no one else in connection with the
Acquisition or the contents of this announcement and will not be
responsible to any person other than Logica for providing the
protections afforded to clients of Deutsche Bank AG, London Branch,
nor for providing advice in relation to the Acquisition or any
matters referred to in this announcement.
This announcement is for information purposes only and is not
intended to and does not constitute or form part of an offer to
sell or otherwise dispose of or invitation to purchase or otherwise
acquire any securities or the solicitation of any vote or approval
in any jurisdiction, nor shall there be any sale, issue or transfer
of the securities referred to in this announcement in any
jurisdiction in contravention of applicable law. The Acquisition
will be made solely through the Scheme Document and the
accompanying Forms of Proxy, which will together contain the full
terms and conditions of the Acquisition, including details of how
to vote in respect of the Acquisition. Any vote in respect of the
Scheme or other response in relation to the Acquisition should be
made only on the basis of the information contained in the Scheme
Document.
This announcement has been prepared for the purpose of complying
with the laws of England and Wales and the Code and the information
disclosed may not be the same as that which would have been
disclosed if this announcement had been prepared in accordance with
the laws of jurisdictions outside England and Wales.
Overseas Shareholders
The release, publication or distribution of this announcement in
certain jurisdictions may be restricted by law. Persons who are not
resident in the United Kingdom or who are subject to other
jurisdictions should inform themselves of, and observe, any
applicable requirements. Further details in relation to Overseas
Shareholders will be contained in the Scheme Document.
The Acquisition relates to the shares of an English company and
is proposed to be effected by means of a scheme of arrangement
under the laws of England and Wales. Neither the proxy solicitation
rules nor (unless implemented by means of a Takeover Offer) the
tender offer rules under the US Securities Exchange Act of 1934, as
amended, will apply to the Acquisition. Moreover, the Acquisition
is subject to the disclosure requirements and practices applicable
in the United Kingdom and under the City Code to schemes of
arrangement, which differ from the disclosure requirements of the
US proxy solicitation rules and tender offer rules. If CGI
exercises its right to implement the Acquisition of the Logica
Shares by way of a Takeover Offer, the Takeover Offer will be made
in compliance with applicable US securities laws and
regulations.
Unless otherwise determined by CGI Europe or required by the
Code, and permitted by applicable law and regulation, the
Acquisition will not be made available, directly or indirectly, in,
into or from a Restricted Jurisdiction where to do so would violate
the laws in that jurisdiction and no person may vote in favour of
the Scheme by any such use, means, instrumentality or form within a
Restricted Jurisdiction or any other jurisdiction if to do so would
constitute a violation of the laws of that jurisdiction.
Accordingly, copies of this announcement and all documents relating
to the Acquisition are not being, and must not be, directly or
indirectly, mailed or otherwise forwarded, distributed or sent in,
into or from a Restricted Jurisdiction where to do so would violate
the laws in that jurisdiction, and persons receiving this
announcement and all documents relating to the Acquisition
(including custodians, nominees and trustees) must not mail or
otherwise distribute or send them in, into or from such
jurisdictions where to do so would violate the laws in that
jurisdiction.
The availability of the Acquisition to Logica Shareholders who
are not resident in the United Kingdom may be affected by the laws
of the relevant jurisdictions in which they are resident. Persons
who are not resident in the United Kingdom should inform themselves
of, and observe, any applicable requirements.
Forward Looking Statements
This announcement (including information incorporated by
reference in this announcement), oral statements made regarding the
Acquisition and other information published by CGI and Logica
contains statements that are or may be forward looking statements.
Forward-looking statements are prospective in nature and are not
based on historical facts, but rather on current expectations and
projections of the management of CGI and Logica about future
events, and are therefore subject to risks and uncertainties which
could cause actual results to differ materially from the future
results expressed or implied by the forward-looking statements. The
forward-looking statements contained in this announcement include
statements relating to the expected effects of the Acquisition on
CGI and Logica, the expected timing and scope of the Acquisition
and other statements other than historical facts. 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", "should", "could", "would", "may", "anticipates",
"estimates", "synergy", "cost-saving", "projects", "goal",
"strategy", "budget", "forecast" or "might" 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 CGI's or
Logica's operations and potential synergies resulting from the
Acquisition; and (iii) the effects of government regulation on
CGI's or Logica's business.
These forward looking statements are not guarantees of future
financial performance. Except as expressly provided in this
announcement, they have not been reviewed by the auditors of CGI or
Logica or their respective financial advisers. Such forward looking
statements involve known and unknown risks and uncertainties that
could significantly affect expected results and are based on
certain key assumptions. Many factors could cause actual results to
differ materially from those projected or implied in any forward
looking statements. These factors include the satisfaction of the
Conditions, as well as additional factors, such as: fluctuations in
the capital markets; fluctuations in interest and exchange rates;
increased regulation or regulatory scrutiny; the occurrence of
unforeseen disasters or catastrophes; political or economic
instability in principal markets; adverse outcomes in litigation;
and general, local and global economic, political, business and
market conditions. Other unknown or unpredictable factors could
cause actual results to differ materially from those in the
forward-looking statements. Such forward-looking statements should
therefore be construed in the light of such factors. Neither CGI
nor Logica, nor any of their respective associates or directors,
officers or advisers, provides any representation, assurance or
guarantee that the occurrence of the events expressed or implied in
any forward-looking statements in this announcement will actually
occur. Due to such uncertainties and risks, readers are cautioned
not to place undue reliance on such forward looking statements,
which speak only as of the date hereof. All subsequent oral or
written forward looking statements attributable to CGI or Logica or
any of their respective members, directors, officers or employees
or any persons acting on their behalf are expressly qualified in
their entirety by the cautionary statement above. CGI and Logica
disclaim any obligation to update or revise any forward looking or
other statements contained herein other than in accordance with
their legal and regulatory obligations.
Profit Forecast
The Logica Profit Forecast is a profit forecast for the purposes
of Rule 28 of the Code. As such it is a requirement under the Code
that the Logica Profit Forecast be reported on by Logica's
reporting accountants and financial advisers. The bases and
assumptions behind the Logica Profit Forecast and the reports of
the Logica Financial Advisers and PricewaterhouseCoopers are set
out in Appendix V to this announcement. The Logica Financial
Advisers and PricewaterhouseCoopers have given and not withdrawn
their consent to publication of their reports in the form and
context in which they are included.
Dealing Disclosure Requirements
Under Rule 8.3(a) of the Code, any person who is interested in 1
per cent. or more of any class of relevant securities of an offeree
company or of any paper offeror (being any offeror other than an
offeror in respect of which it has been announced that its offer
is, or is likely to be, solely in cash) must make an Opening
Position Disclosure following the commencement of the offer period
and, if later, following the announcement in which any paper
offeror is first identified. An Opening Position Disclosure must
contain details of the person's interests and short positions in,
and rights to subscribe for, any relevant securities of each of (i)
the offeree company and (ii) any paper offeror(s). An Opening
Position Disclosure by a person to whom Rule 8.3(a) applies must be
made by no later than 3.30 pm (London time) on the 10th business
day following the commencement of the offer period and, if
appropriate, by no later than 3.30 pm (London time) on the 10th
business day following the announcement in which any paper offeror
is first identified. Relevant persons who deal in the relevant
securities of the offeree company or of a paper offeror prior to
the deadline for making an Opening Position Disclosure must instead
make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes,
interested in 1 per cent. or more of any class of relevant
securities of the offeree company or of any paper offeror must make
a Dealing Disclosure if the person deals in any relevant securities
of the offeree company or of any paper offeror. A Dealing
Disclosure must contain details of the dealing concerned and of the
person's interests and short positions in, and rights to subscribe
for, any relevant securities of each of (i) the offeree company and
(ii) any paper offeror, save to the extent that these details have
previously been disclosed under Rule 8. A Dealing Disclosure by a
person to whom Rule 8.3(b) applies must be made by no later than
3.30 pm (London time) on the business day following the date of the
relevant dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of an offeree company or a paper
offeror, they will be deemed to be a single person for the purpose
of Rule 8.3.
Opening Position Disclosures must also be made by the offeree
company and by any offeror and Dealing Disclosures must also be
made by the offeree company, by any offeror and by any persons
acting in concert with any of them (see Rules 8.1, 8.2 and
8.4).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Panel's website at www.thetakeoverpanel.org.uk, including
details of the number of relevant securities in issue, when the
offer period commenced and when any offeror was first identified.
If you are in any doubt as to whether you are required to make an
Opening Position Disclosure or a Dealing Disclosure, you should
contact the Panel's Market Surveillance Unit on +44 (0) 20 7638
0129.
Information Relating to Logica Shareholders
Please be aware that addresses, electronic addresses and certain
information provided by Logica Shareholders, persons with
information rights and other relevant persons for the receipt of
communications from Logica may be provided to CGI Europe during the
offer period as requested under Section 4 of Appendix 4 of the Code
to comply with Rule 2.12(c).
Publication on Website
A copy of this announcement will be available free of charge
(subject to any applicable restrictions with respect to persons
resident in Restricted Jurisdictions) on Logica's and CGI's
websites (www.logica.com and www.cgi.com respectively) by no later
than 12 noon (London time) on 1 June 2012.
Rule 2.10 Requirement
In accordance with Rule 2.10 of the Code, Logica confirms that
at the date of this announcement, it has in issue and admitted to
trading on Euronext Amsterdam and the main market of the London
Stock Exchange 1,620,160,491 ordinary shares of 10 pence each
(excluding ordinary shares held in treasury). The International
Securities Identification Number (ISIN) of the Logica Shares is
GB0005227086.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN
PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD
CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH
JURISDICTION
31 May 2012
RECOMMENDED CASH ACQUISITION
of
LOGICA PLC by
CGI GROUP HOLDINGS EUROPE LIMITED (a wholly owned subsidiary of
CGI Group Inc.)
to be effected by means of a Scheme of Arrangement under Part 26
of the Companies Act 2006
1 Introduction
The boards of directors of Logica and CGI are pleased to
announce that they have reached agreement on the terms of a
recommended cash acquisition of Logica by CGI Europe, a
wholly-owned subsidiary of CGI, pursuant to which CGI Europe will
acquire the entire issued and to be issued ordinary share capital
of Logica. It is intended that the Acquisition be implemented by
means of a Court-sanctioned scheme of arrangement under Part 26 of
the 2006 Act.
2 The Acquisition
Under the terms of the Acquisition, which 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, Logica
Shareholders will be entitled to receive:
105 pence in cash per Logica Share
The Acquisition price represents a premium of approximately:
-- 59.8 per cent. to the Closing Price per Logica Share of 65.70
pence on 30 May 2012 (being the last Dealing Day prior to the date
of this announcement);
-- 49.6 per cent. to the average Closing Price of approximately
70.20 pence per Logica Share for the one month period ending on 30
May 2012 (being the last Dealing Day prior to this announcement);
and
-- 32.8 per cent. to the average Closing Price of approximately
79.05 pence per Logica Share for the six month period ending on 30
May 2012 (being the last Dealing Day prior to this
announcement).
The Acquisition values the entire issued and to be issued
ordinary share capital of Logica at approximately GBP1.7 billion
(C$2.8 billion) on the basis of a fully diluted share capital of
1,646 million Logica Shares (net of option proceeds) (assuming that
all rights in respect of in-the-money options under the Logica
Share Schemes are exercised on the basis explained in this
announcement).
In addition, the Acquisition implies an enterprise value
multiple of approximately 6.6 times Logica's EBITDA for the 12
months ended 31 December 2011.
The Acquisition will be funded through a combination of the
proceeds from the issuance of subscription receipts exchangeable
for new shares in CGI to CDP and debt funding from CIBC, TD and
NBC. Goldman Sachs, financial adviser to CGI and CGI Europe, is
satisfied that sufficient cash resources are available to CGI
Europe to enable it to satisfy in full the consideration payable to
Logica Shareholders in connection with the Acquisition.
3 Background to and reasons for the Acquisition
CGI strongly believes that the acquisition of Logica represents
an attractive opportunity to expand its global footprint and
strengthen its capabilities across the five key attributes of a
global leader in IT and business process services:
-- People and culture:an exceptional and talented team driven
towards the common goal of client success and, as owners, benefit
from a performance-based culture;
-- Client proximity with blended global delivery: enhanced
intimacy and service delivery bringing the best capabilities and
its solutions to clients anywhere in the world, all the time;
-- End-to-end capabilities:enhanced global offering with
expanded platforms and the ability to cover the entire customer IT
services supply chain;
-- Operational excellence:proven methodologies and frameworks to
ensure on-time, on-budget project delivery; and
-- Mission critical intellectual property: expanded portfolio
creates opportunities for profitable revenue growth, improved
quality mix and over time, increased margins.
As a European business and technology service company Logica has
unique strengths in its understanding of the European IT services
market, its expertise across industry verticals and its intimate
knowledge of its clients' businesses that enable Logica to create
value for clients.
The proposed combination of CGI and Logica would create a
leading player in the IT services sector worldwide with a
meaningful presence in the Americas, Europe and Asia. Additionally,
the combined resources of the two companies would provide an ideal
platform to serve clients locally and globally, to win larger scale
outsourcing opportunities, and to offer the combined client base a
diverse portfolio of services and IP-led solutions, both in North
America and Europe.
The combined business is expected to deliver integration
benefits totalling GBP125 million (C$200 million) by the end of the
third financial year following completion. These benefits are
expected to be realised at a one-off cost of GBP165 million (C$265
million) over three years. Including the impact of the expected
financial benefits, the Acquisition is expected to be immediately
and significantly accretive in the range of 25 per cent. to 30 per
cent. to CGI's adjusted earnings per share excluding integration
and acquisition related costs. The accretion rate is expected to
accelerate throughout the three year integration period following
completion of the Acquisition. In addition, it is anticipated
further revenue opportunities will be available to the combined
business through the enhanced offering of both geographic and
product services to clients of both CGI and Logica.
4 Recommendation
The Logica Directors, who have been so advised by Rothschild,
Bank of America Merrill Lynch and Deutsche Bank, as the independent
financial advisers for the purposes of Rule 3 of the Code, consider
the terms of the Acquisition to be fair and reasonable. In
providing advice to the Logica Directors, Rothschild, Bank of
America Merrill Lynch and Deutsche Bank have each taken into
account the commercial assessments of the Logica Directors.
Accordingly, the Logica Directors intend unanimously to
recommend Logica Shareholders to vote in favour of the Scheme at
the Court Meeting and the General Meeting Resolutions, as each
Logica Director has irrevocably undertaken to do in respect of his
own beneficial holdings of Logica Shares (further details of these
irrevocable undertakings are contained in paragraph 5 below).
5 Irrevocable undertakings
CGI Europe has received irrevocable undertakings from each of
the Logica Directors to vote in favour of the Scheme at the Court
Meeting and in favour of the General Meeting Resolutions, in
respect of a total of 2,563,207 Logica Shares, representing
approximately 0.16 per cent. of the ordinary share capital of
Logica in issue on 30 May 2012 (being the latest practicable date
prior to this announcement). The irrevocable undertakings given by
the Logica Directors will remain in full force and effect if the
Acquisition is effected by way of a Takeover Offer and will cease
to be binding only if the Scheme and, if applicable, any Takeover
Offer lapses or is withdrawn and no new, revised or replacement
scheme of arrangement or takeover offer is or has been announced by
CGI Europe in accordance with Rule 2.7 of the Code.
CGI Europe has also received irrevocable undertakings from
Schroder and Artemis, institutional shareholders of Logica, to vote
in favour of the Scheme at the Court Meeting and the General
Meeting Resolutions, in respect of a total of 292,127,041 Logica
Shares, representing approximately 18.03 per cent. of the ordinary
share capital of Logica in issue on 30 May 2012 (being the latest
practicable date prior to this announcement).
The irrevocable undertakings received from Schroder and Artemis
will cease to be binding if a competing offer is announced under
Rule 2.7 of the Code which has a value of 10 per cent. or more
above 105 pence per Logica Share (in the case of Artemis only,
where such competing offer is all in cash), unless CGI Europe has
announced an improvement to the terms of the Acquisition within
seven days of the competing offer being announced (in the case of
Schroder) or made (in the case of Artemis), on terms at least as
favourable as under the competing offer (in the case of Schroder
only, in the reasonable opinion of Schroder).
In aggregate, therefore, CGI Europe has received irrevocable
undertakings in respect of a total of 294,690,248 Logica Shares,
representing approximately 18.19 per cent. of the share capital of
Logica in issue on 30 May 2012 (being the latest practicable date
prior to this announcement).
Further details of the irrevocable undertakings are set out in
Appendix III to this announcement.
Copies of the irrevocable undertakings will be on display on
Logica's and CGI's websites (www.logica.com and www.cgi.com
respectively) from 12 noon on 1 June 2012 until the end of the
Acquisition.
6 Background to and reasons for the recommendation
Over the past few years Logica has successfully integrated its
European businesses into a single organisation with a clear brand
and position in its main markets. Significant investments have been
made in sales and marketing. It has established a strong presence
in outsourcing which now represents 45 per cent. of the business.
Over the five years to December 2012, Logica's cost initiatives are
expected to deliver approximately GBP200 million per annum of
savings in overhead and staff costs. Offshore numbers have more
than doubled, improving Logica's cost competitiveness. The
accelerated restructuring programme announced in December 2011
ensured that the cost base of the business was adjusted to reflect
a worsening economic climate, while creating the room to invest in
platform-based services and the systems and tools needed to
continue to transform the business.
At the same time, industry dynamics have continued to develop.
Competitive intensity has increased as the industry has globalised
and scale has become an ever more important factor in cost
competitiveness and service. Additionally, in Logica's main
European markets there is considerable economic uncertainty, which
affects confidence and demand from both public and private
clients.
Following an approach by CGI, the two companies engaged in a
period of discussion around the possibility of combining the
businesses. The Logica Directors consider there to be a strong
industrial logic for the proposed combination with CGI. It meets
clients' requirements for a more comprehensive international
presence and offers them the benefits of scale. Specifically, the
combination with CGI will accelerate Logica's ability to support
European clients wherever they operate in the world and ensure that
its platforms can be sold to a wider global client base. The Logica
Directors believe that being part of a larger and financially
strong international group will accelerate the transformation of
the business and will be beneficial for Logica's clients and
people.
A combination with CGI will create one of the leading players
worldwide with a differentiated services portfolio and strong
market positions in North America and Europe. Both organisations
have a focus on client intimacy and proximity enabling the delivery
of high quality services both globally and locally, supported by
approximately 72,000 IT professionals.
The Logica Directors' unanimous intention to recommend that
Logica Shareholders vote in favour of the Acquisition follows a
thorough assessment of the terms of the Acquisition by the Logica
Directors, including taking advice from the Logica Financial
Advisers as laid out in this announcement. In arriving at their
decision to recommend the Acquisition, the Logica Directors have
considered the standalone prospects of Logica. The Logica Directors
have also taken into account the views of two of Logica's largest
shareholders, Artemis and Schroder.
The terms of the Acquisition represent a substantial premium, in
cash, equivalent to approximately:
-- 59.8 per cent. to the Closing Price per Logica Share of 65.70
pence on 30 May 2012 (being the last Dealing Day prior to the date
of this announcement);
-- 49.6 per cent. to the average Closing Price of approximately
70.20 pence per Logica Share for the one month period ending on 30
May 2012 (being the last Dealing Day prior to this announcement);
and
-- 32.8 per cent. to the average Closing Price of approximately
79.05 pence per Logica Share for the six month period ending on 30
May 2012 (being the last Dealing Day prior to this
announcement).
Following careful consideration of the above factors, the Logica
Directors intend unanimously to recommend that Logica Shareholders
vote in favour of the Acquisition, as they have committed to do in
respect of their entire beneficial holdings of Logica Shares.
7 Information on CGI and CGI Europe
CGI
CGI is a public company incorporated under the laws of the
Province of Quebec, Canada. Founded in 1976 and headquartered in
Montreal, CGI is one of the largest independent providers of
information technology and business process services to clients
worldwide. CGI provides end-to-end services with approximately
31,000 professionals located in offices and centres of excellence
in Canada, the United States, Europe and Asia Pacific. As at 31
March 2012, CGI's annualized revenue was approximately C$4.3
billion and its order backlog was approximately C$13.1 billion. CGI
shares are listed on the TSX (GIB.A) and the NYSE (GIB) and are
included in both the Dow Jones Sustainability Index and the
FTSE4Good Index. As at 30 May 2012 (being the latest practicable
date prior to this announcement) CGI had a market capitalisation of
C$5.4 billion (GBP3.4 billion).
CGI Europe
CGI Europe is a wholly-owned subsidiary of CGI and acts as a
holding company for CGI's existing European subsidiaries.
8 Information on Logica
Logica is a business and technology services company, employing
41,000 people. It provides business consulting, systems integration
and outsourcing to clients around the world, including many
European public sector agencies and businesses. Logica's clients
include leading European oil and gas companies, leading European
utilities and leading European telecoms companies. Logica's
strengths relate to its understanding of the European IT services
market and its deep domain knowledge across multiple industry
verticals, including Transport, Trade and Industrial, Public
Sector, Energy and Utilities, Financial Services and Telecoms and
Media. Logica Shares are listed on the London Stock Exchange and
Euronext Amsterdam.
Logica offers the following services to its clients:
Outsourcing
Logica combines onsite, onshore, nearshore and offshore
resources to create a blended delivery model to enable clients to
outsource the management of applications, infrastructure and
business processes. For the year ended 31 December 2011,
Outsourcing represented 45 per cent. of Logica's revenue.
Systems Integration
Logica's vendor-independent approach and strong sector and
technology knowledge helps clients adapt packaged systems, modify
existing systems and design new systems in order to integrate
business practices and technology. For the year ended 31 December
2011, Systems Integration represented 43 per cent. of Logica's
revenue.
Business Consulting
Logica provides consulting advice to help its clients transform
operations, shape and implement change and evolve IT systems and
services to meet business demands. For the year ended 31 December
2011, Business Consulting represented 12 per cent. of Logica's
revenue.
For the twelve months ending 31 December 2011, Logica reported
revenue of GBP3.9 billion and adjusted operating profit of GBP114
million.
9 Logica current trading
The Logica Interim Management Statement, including unaudited
financial information for the three months ended 31 March 2012, is
included as Appendix IV to this announcement.
10 Management, employees and locations
For more than 36 years, CGI has had a dream upon which the
company has been built: "To create an environment in which we enjoy
working together and, as owners, building a company we can be proud
of." This approach has been an important factor in creating a
growing and financially stable company with a track record of
consistent financial performance and a strategy to continue acting
as a global consolidator in the IT services market.
In line with this approach, CGI has a long-standing policy of
recognising that people are one of its most important assets, which
is strongly aligned with Logica's philosophy regarding clients and
people. With more than 85 per cent. of employees also being
shareholders, CGI consistently demonstrates one of the lowest
attrition rates in the IT services industry. Consequently, CGI
attaches great importance to the skills and experience of Logica's
management team and employees.
Following completion of the Acquisition, CGI intends to combine
its operations with Logica's over a three year integration period
under CGI's brand. The combination is expected to deliver
integration benefits which, once realised, should enable the
combined entity to be more competitive in the IT services market
through a combination of expanded breadth of product and service
offerings, combined talent and extended market coverage.
Realisation of the integration benefits is subject to a detailed
review of the operations to assess and identify opportunities
(subject to any applicable law and consultation processes)
including the potential for the removal of duplication, optimising
fixed assets (e.g. real estate and telephony) and combining
procurement. In addition, the review will seek to identify
opportunities arising from expanded product and service offerings,
team alignment and a combined customer base.
CGI has assured the Logica Directors that existing employment
rights, including pension entitlements, of all Logica employees
will be fully respected following completion of the
Acquisition.
CGI fully respects the different employee representation
structures across the countries in which Logica operates, and
recognises the constructive relationship that Logica has developed
with employee representative groups across its business. CGI is
committed to continuing to support this.
The non-executive directors of Logica intend to resign as Logica
Directors on the completion of the Acquisition.
11 Logica Share Schemes and other incentive matters
Appendix VI summarises the arrangements proposed to be
implemented in relation to the Logica Share Schemes in connection
with the Acquisition, together with certain other matters relating
to management incentivisation.
12 Financing
The cash consideration payable under the Acquisition is being
financed by a combination of:
-- cash proceeds from the issuance of C$999,999,995.86 of
subscription receipts of CGI (the "Subscription Receipts") to CDP
pursuant to a subscription agreement dated 31 May 2012 (the
"Subscription Agreement") entered into by CDP and CGI a
subscription receipt agreement dated 31 May 2012 (the "Subscription
Receipt Agreement") entered into by CDP, CGI and Computershare
Trust Company of Canada, as subscription receipt agent (the
"Subscription Receipt Agent") and a registration rights agreement
(the "Registration Rights Agreement") which CGI and CDP have agreed
to enter into prior to or at completion of the Acquisition; and
-- debt to be provided by CIBC, NBC and TD under a credit
agreement dated as of 31 May 2012 co-arranged by CIBC, National
Bank Financial and TD Securities (the "Credit Agreement"), which
provides for GBP1.245 billion senior unsecured term loan credit
facilities and a C$1.5 billion senior unsecured backstop revolving
credit facility (the "Backstop Revolving Credit Facility") to be
available to CGI to finance in part the Acquisition, the fees and
expenses incurred in connection therewith and the repayment of all
indebtedness of the Logica Group outstanding on the day of the
Acquisition; provided, however, that if the Backstop Revolving
Credit Facility is cancelled as contemplated in the Credit
Agreement, CGI will access the revolving credit facility available
to it under the C$1.5 billion credit agreement dated as of 2
December 2011 with, inter alios, NBC, as administrative agent of
the lenders, and NBC, Caisse centrale Desjardins, CIBC, Citibank,
N.A., Canadian Branch, TD and the other financial institutions
named therein, as lenders.
Subscription Agreement, Subscription Receipt Agreement and
Registration Right Agreement
Further details of the equity subscription agreements are set
out in Appendix VII.
Credit Agreement
Under the Credit Agreement, CGI has agreed, among other things,
that:
-- except as required by the Panel, the Court, the Code or any
other applicable law, regulation or regulatory body, it shall not
waive, amend or modify any condition or permit the waiver,
amendment or modification of any condition of the Scheme if such
waiver, amendment or modification is material and would reasonably
be expected to have a material adverse effect on the Scheme or
material effect on the interests of any of the Finance Parties
without the consent of the Co-Lead Arrangers and the Majority
Lenders (as each such term is defined in the Credit Agreement)
(such consent not to be unreasonably withheld or delayed); and
-- it shall not permit CGI Europe to declare the Takeover Offer
unconditional as to acceptances until CGI Europe has acquired or
unconditionally contracted to acquire not less than 90 per cent. in
value of the shares to which the Takeover Offer relates and, where
the shares are voting shares, not less than 90 per cent. of the
voting rights carried by those shares (or in each case, if required
by the Panel and agreed by the Co-Lead Arrangers (as such term is
defined in the Credit Agreement), such lesser percentage (being at
least 75 per cent.) as the Panel specifies).
Goldman Sachs, financial adviser to CGI and CGI Europe, is
satisfied that sufficient cash resources are available to CGI
Europe to enable it to satisfy in full the consideration payable to
Logica Shareholders in connection with the Acquisition.
13 Confidentiality Agreement
Logica and CGI entered into a confidentiality agreement on 27
April 2012 (the "Confidentiality Agreement"), pursuant to which,
amongst other things, CGI has undertaken to, unless Logica gives
its express consent in writing, (i) keep confidential certain
non-public information relating to the Logica Group; (ii) use such
information solely for the purpose of evaluating, negotiating,
advising upon or implementing a potential transaction; and (iii)
not to disclose such information to third parties (other than
certain permitted disclosees) unless permitted by the terms of the
Confidentiality Agreement.
CGI has further undertaken that it will not, and will procure
that none of its group entities will, directly or indirectly,
without Logica's prior written consent:
-- for a period of 12 months from the date of the
Confidentiality Agreement, employ or offer to employ, or solicit
for employment or endeavour to entice away, any individual who is
at any time during that period: (i) an officer of, or an employee
holding an executive or management position with, Logica or any of
its group undertakings and with whom CGI and/or its group
undertakings had direct contact in their consideration of a
potential transaction with Logica; or (ii) a member of the Logica
Executive Committee or specified senior executives, provided that
the placing of an advertisement of a post available to members of
the public generally and the employment of any persons pursuant to
any such advertisement shall not be considered as a breach of the
Confidentiality Agreement; and
-- for a period of 24 months from the date of the
Confidentiality Agreement, use in any way any Confidential
Information (as defined in the Confidentiality Agreement) in order
to deal with or seek to agree to deal with, or seek the custom of,
any of Logica's customers or customers of any of its group
undertakings which is or has been such a customer at any time in
the 24 months from the date of the Confidentiality Agreement or the
12 months before the date of the Confidentiality Agreement,
provided that CGI and its group undertakings shall not be prevented
by this undertaking from dealing with any existing or prospective
customers in the ordinary course of business, as long as CGI or
they do not refer in any way to the proposed transaction or refer
in any way to Confidential Information.
The undertakings set out in the Confidentiality Agreement
terminate 24 months after the date of the Confidentiality
Agreement.
14 Cooperation Agreement
Logica and CGI Europe entered into a cooperation agreement on 31
May 2012 in connection with the Acquisition (the "Cooperation
Agreement").
Pursuant to the Cooperation Agreement, (i) Logica and CGI Europe
have each agreed to co-operate in relation to the obtaining of any
and all consents, clearances, permissions and waivers as may be
necessary, and the making of all filings as may be necessary, from
or under the law, regulations or practices applied by any
applicable regulatory authority in connection with the Acquisition;
and (ii) Logica and CGI Europe have each agreed to work together to
implement certain appropriate proposals in relation to the Logica
Share Schemes and the employment benefits more fully detailed in
paragraph 11 above and Appendix VI.
15 Conditions
The Scheme is subject to the Conditions and further terms set
out in Appendix I to this announcement and to be set out in the
Scheme Document.
The Conditions in paragraph 1 of Appendix I to this announcement
provide that the Acquisition is conditional on:
-- the approval of the Scheme by a majority in number of the
Scheme Shareholders present and voting (and entitled to vote),
representing not less than 75 per cent. in value of the Scheme
Shares voted, either in person or by proxy, at the Court Meeting no
later than 20 August 2012 or such later date (if any) selected by
Logica as CGI Europe may agree;
-- the approval of the General Meeting Resolutions by the Logica
Shareholders by the requisite majorities at the General Meeting no
later than 20 August 2012 or such later date (if any) selected by
Logica as CGI Europe may agree; and
-- the sanction of the Scheme by the Court (in either case, with
or without modification but subject to any modification being on
terms acceptable to Logica and CGI Europe), confirmation of the
Capital Reduction and the registration of the Court Orders and the
Statement of Capital with the Registrar of Companies no later than
16 November 2012.
Any Logica Shares issued before the Reduction Record Time will
be subject to the terms of the Scheme. The Amended Logica Articles
will include provisions requiring any Logica Shares issued after
the Reduction Record Time (other than to CGI Europe and/or its
nominees) to be automatically transferred to CGI Europe on the same
terms as the Acquisition (other than terms as to timings and
formalities). The provisions of the Amended Logica Articles will
avoid any person (other than CGI Europe and its nominee(s)),
holding shares in the capital of Logica after the Effective
Date.
16 Structure of the Acquisition
It is intended that the Acquisition will be effected by means of
a Court-sanctioned scheme of arrangement under Part 26 of the 2006
Act. The Scheme is an arrangement between Logica and the Scheme
Shareholders and is subject to the approval of the Court.
The purpose of the Scheme is to provide for CGI Europe to become
the holder of the entire issued and to be issued ordinary share
capital of Logica. This is to be achieved by the cancellation of
the Scheme Shares held by Scheme Shareholders and the application
of the reserve arising from such cancellation in paying up in full
a number of new shares in Logica (which is equal, in nominal value,
to the number of Scheme Shares cancelled) and issuing them to CGI
Europe, as a result of which Scheme Shareholders will receive cash
consideration on the basis set out in paragraph 2 of this
announcement.
The Scheme requires the approval of Scheme Shareholders at the
Court Meeting. The resolution to approve the Scheme at the Court
Meeting must be approved by a majority in number of the Scheme
Shareholders present and voting (and entitled to vote), either in
person or by proxy, representing not less than 75 per cent. in
value of the Scheme Shares held by such Scheme Shareholders.
Implementation of the Scheme will also require the passing of the
resolutions to approve certain matters relating to the Scheme and
the Capital Reduction (requiring approval by the requisite
majorities at the General Meeting, which will be held immediately
after the Court Meeting).
Once the necessary approvals from Logica Shareholders have been
obtained and the other Conditions have been satisfied or (where
applicable) waived, the Scheme must be approved by the Court. The
Scheme will then become effective upon delivery of the Court
Order(s) and the Statement of Capital as approved by the Court to
the Registrar of Companies.
Upon the Scheme becoming effective:
-- it will be binding on all Scheme Shareholders, irrespective
of whether or not they attended or voted at the Court Meeting or
the General Meeting (and if they attended whether or not they voted
in favour); and
-- share certificates in respect of Logica Shares will cease to
be valid and entitlements to Logica Shares held within the CREST
system will be cancelled.
Further details of the Scheme, including an indicative timetable
for the Acquisition, will be set out in the Scheme Document, which
is expected to be despatched to Logica Shareholders and, for
information only, to persons with information rights and to holders
of options granted under the Logica Share Schemes, as soon as
practicable and, in any event, within 28 days of the date of this
announcement.
CGI Europe reserves the right, subject to Panel consent, to
elect to implement the Acquisition by way of a Takeover Offer on
terms more fully described in paragraph 19 below.
17 Disclosure of interests in Logica Shares
As at the close of business on 30 May 2012, being the last
practicable date prior to the publication of this announcement,
save for: (i) the disclosures in this paragraph 17; and (ii) the
irrevocable undertakings referred to in paragraph 5 above, none of
CGI Europe or any of its respective directors or any member of the
CGI Group or, so far as CGI Europe is aware, any person acting, or
deemed to be acting, in concert with CGI Europe:
-- has an interest in, or right to subscribe for or has borrowed
or lent any Logica Shares or any securities convertible or
exchangeable into Logica Shares (including pursuant to any long
exposure, whether conditional or absolute, to changes in the price
of securities);
-- has the right to subscribe for or purchase the same or hold
any options (including traded options) in respect of or has any
right to acquire any Logica Shares or holds any derivatives
referenced to Logica Shares;
-- has any short position in (whether conditional or absolute
and whether in-the-money or otherwise), including any short
position under a derivative, any agreement to sell or any delivery
obligation or right to require another person to purchase or take
delivery in relation to Logica Shares or derivatives referenced to
Logica Shares; or
-- has procured an irrevocable commitment or letter of intent to
vote in favour of the Acquisition in respect of Logica Shares or
derivatives referenced to Logica Shares.
Furthermore, no arrangement exists with CGI Europe or Logica or
any person acting in concert with CGI Europe or Logica in relation
to Logica Shares. For these purposes, an "arrangement" includes any
indemnity or option arrangement, any agreement or any
understanding, formal or informal, of whatever nature, relating to
Logica Shares which may be an inducement to deal or refrain from
dealing in such securities.
18 Delisting and re-registration
It is intended that dealings in Logica Shares will be suspended
at 5.00 p.m. London time on the Business Day prior to the Effective
Date. It is further intended that an application will be made to
each of the UK Listing Authority and Euronext Amsterdam on the
Effective Date for the cancellation of trading in Logica Shares on
its market for listed securities and the UK Listing Authority will
be requested to cancel the listing of Logica Shares on the Official
List to take effect shortly after the Effective Date.
On the Effective Date, share certificates in respect of Logica
Shares will cease to be valid and should be destroyed. In addition,
entitlements to Logica Shares held within the CREST system will be
cancelled.
It is also intended that, following the Effective Date and after
its shares are delisted, Logica will be re-registered as a private
limited company pursuant to the relevant provisions of the 2006
Act.
19 General
CGI Europe reserves the right, subject to Panel consent, to
elect to implement the Acquisition by way of a Takeover Offer as an
alternative to the Scheme. In such event, the Acquisition will be
implemented on substantially the same terms as those which would
apply to the Scheme (subject to appropriate amendments, including
an acceptance condition set at 90 per cent. of the shares to which
such offer relates or such lesser percentage, being more than 50
per cent., as CGI Europe may decide and the Panel may agree).
The Acquisition will be subject to the Conditions and other
terms set out in Appendix I to this announcement and set out in the
Scheme Document and the Forms of Proxy. The Scheme Document will
include full details of the Scheme, together with notices of the
Court Meeting and the General Meeting and the expected timetable of
the Acquisition.
The Acquisition will be governed by English law and will be
subject to the jurisdiction of the courts of England and Wales and
subject to the applicable requirements of the Code, the Panel, the
London Stock Exchange, Euronext Amsterdam and the FSA.
The bases and sources of certain financial information contained
in this announcement are set out in Appendix II. Certain terms used
in this announcement are defined in Appendix VIII.
20 Documents on display
Copies of the following documents will be made available on
Logica's and CGI's websites at www.logica.com and www.cgi.com
respectively by no later than 12 noon (London time) on 1 June 2012
until the end of the Offer Period:
-- the irrevocable undertakings referred to in paragraph 5 above
and summarised in Appendix III to this announcement;
-- the Subscription Agreement and the Subscription Receipt
Agreement referred to in paragraph 12 above (these two documents
will be in French and translations will be made available on
Logica's and CGI's websites by no later than 12 noon (London time)
on 6 June 2012 until the end of the Offer Period);
-- the Registration Rights Agreement (attached as a Schedule, in
English to the Subscription Agreement) referred to in paragraph 12
above;
-- the Credit Agreement referred to in paragraph 12 above;
-- the Fee Letter;
-- the Syndication Letter;
-- the Confidentiality Agreement referred to in paragraph 13 above; and
-- the Cooperation Agreement referred to in paragraph 14 above.
Note: Unredacted documentation relating to certain arrangements,
including market flex, connected with the financing of the
Acquisition will be put on display on Logica's and CGI's websites
following release of the Scheme Document.
Enquiries:
CGI Group Inc.
Lorne Gorber Tel: +1 514 841 3355
Goldman Sachs International (financial Tel: +44 (0) 20 7774
adviser to CGI) 1000
Gregg Lemkau
Nick Harper
Nicholas van den Arend
RLM Finsbury (public relations adviser Tel: +44 (0) 20 7251
to CGI) 3801
James Murgatroyd
Logica plc Tel: +44 (0) 20 7637
9111
Investor relations: Karen Keyes
Media relations: Louise Fisk
Rothschild (joint financial adviser to Tel: +44 (0) 20 7280
Logica) 5000
Warner Mandel
Jeremy Millard
Nick Ivey
Bank of America Merrill Lynch (joint financial Tel: +44 (0) 20 7628
adviser and joint corporate broker to 1000
Logica)
Simon Gorringe
Guy Hayward-Cole
Andrew Tusa
Deutsche Bank (joint financial adviser Tel: +44 (0) 20 7545
and joint corporate broker to Logica) 8000
Charles Wilkinson
Richard Sheppard
Charles Bryant
Brunswick (public relations adviser to Tel: +44 (0) 20 7404
Logica) 5959
Sarah West
Jonathan Glass
Goldman Sachs International, which is authorised and regulated
in the United Kingdom by the FSA, is acting for CGI and CGI Europe
and no one else in connection with the Acquisition and will not be
responsible to anyone other than CGI and CGI Europe for providing
the protections afforded to clients of Goldman Sachs International,
or for giving advice in connection with the Acquisition or any
matter referred to herein.
Rothschild, which is authorised and regulated in the United
Kingdom by the FSA, is acting exclusively for Logica and no one
else in connection with the Acquisition and will not be responsible
to anyone other than Logica for providing the protections afforded
to clients of Rothschild or for providing advice in connection with
the Acquisition or in relation to matters described in this
announcement or any transaction or arrangement referred to
herein.
Bank of America Merrill Lynch, which is authorised and regulated
in the United Kingdom by the FSA, is acting exclusively for Logica
and for no one else in connection with the Acquisition and will not
be responsible to any person other than Logica for providing the
protections afforded to clients of Bank of America Merrill Lynch,
or for providing advice in relation to the Acquisition, the content
of this announcement or any matter referred to herein.
Deutsche Bank AG, London Branch is authorised under German
Banking Law (competent authority: BaFin - Federal Financial
Supervisory Authority) and authorised and subject to limited
regulation by the Financial Services Authority. Details about the
extent of Deutsche Bank AG, London Branch's authorisation and
regulation by the Financial Services Authority are available on
request. Deutsche Bank AG, London Branch is acting as financial
adviser to Logica and no one else in connection with the
Acquisition or the contents of this announcement and will not be
responsible to any person other than Logica for providing the
protections afforded to clients of Deutsche Bank AG, London Branch,
nor for providing advice in relation to the Acquisition or any
matters referred to in this announcement.
This announcement is for information purposes only and is not
intended to and does not constitute or form part of an offer to
sell or otherwise dispose of or invitation to purchase or otherwise
acquire any securities or the solicitation of any vote or approval
in any jurisdiction, nor shall there be any sale, issue or transfer
of the securities referred to in this announcement in any
jurisdiction in contravention of applicable law. The Acquisition
will be made solely through the Scheme Document and the
accompanying Forms of Proxy, which will together contain the full
terms and conditions of the Acquisition, including details of how
to vote in respect of the Acquisition. Any vote in respect of the
Scheme or other response in relation to the Acquisition should be
made only on the basis of the information contained in the Scheme
Document.
This announcement has been prepared for the purpose of complying
with the laws of England and Wales and the Code and the information
disclosed may not be the same as that which would have been
disclosed if this announcement had been prepared in accordance with
the laws of jurisdictions outside England and Wales.
Overseas Shareholders
The release, publication or distribution of this announcement in
certain jurisdictions may be restricted by law. Persons who are not
resident in the United Kingdom or who are subject to other
jurisdictions should inform themselves of, and observe, any
applicable requirements. Further details in relation to Overseas
Shareholders will be contained in the Scheme Document.
The Acquisition relates to the shares of an English company and
is proposed to be effected by means of a scheme of arrangement
under the laws of England and Wales. Neither the proxy solicitation
rules nor (unless implemented by means of a Takeover Offer) the
tender offer rules under the US Securities Exchange Act of 1934, as
amended, will apply to the Acquisition. Moreover, the Acquisition
is subject to the disclosure requirements and practices applicable
in the United Kingdom and under the City Code to schemes of
arrangement, which differ from the disclosure requirements of the
US proxy solicitation rules and tender offer rules. If CGI
exercises its right to implement the Acquisition of the Logica
Shares by way of a Takeover Offer, the Takeover Offer will be made
in compliance with applicable US securities laws and
regulations.
Unless otherwise determined by CGI Europe or required by the
Code, and permitted by applicable law and regulation, the
Acquisition will not be made available, directly or indirectly, in,
into or from a Restricted Jurisdiction where to do so would violate
the laws in that jurisdiction and no person may vote in favour of
the Scheme by any such use, means, instrumentality or form within a
Restricted Jurisdiction or any other jurisdiction if to do so would
constitute a violation of the laws of that jurisdiction.
Accordingly, copies of this announcement and all documents relating
to the Acquisition are not being, and must not be, directly or
indirectly, mailed or otherwise forwarded, distributed or sent in,
into or from a Restricted Jurisdiction where to do so would violate
the laws in that jurisdiction, and persons receiving this
announcement and all documents relating to the Acquisition
(including custodians, nominees and trustees) must not mail or
otherwise distribute or send them in, into or from such
jurisdictions where to do so would violate the laws in that
jurisdiction.
The availability of the Acquisition to Logica Shareholders who
are not resident in the United Kingdom may be affected by the laws
of the relevant jurisdictions in which they are resident. Persons
who are not resident in the United Kingdom should inform themselves
of, and observe, any applicable requirements.
Forward Looking Statements
This announcement (including information incorporated by
reference in this announcement), oral statements made regarding the
Acquisition and other information published by CGI and Logica
contains statements that are or may be forward looking statements.
Forward-looking statements are prospective in nature and are not
based on historical facts, but rather on current expectations and
projections of the management of CGI and Logica about future
events, and are therefore subject to risks and uncertainties which
could cause actual results to differ materially from the future
results expressed or implied by the forward-looking statements. The
forward-looking statements contained in this announcement include
statements relating to the expected effects of the Acquisition on
CGI and Logica, the expected timing and scope of the Acquisition
and other statements other than historical facts. 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", "should", "could", "would", "may", "anticipates",
"estimates", "synergy", "cost-saving", "projects", "goal",
"strategy", "budget", "forecast" or "might" 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 CGI's or Logica's operations and potential synergies
resulting from the Acquisition; and (iii) the effects of government
regulation on CGI's or Logica's business.
These forward looking statements are not guarantees of future
financial performance. Except as expressly provided in this
announcement, they have not been reviewed by the auditors of CGI or
Logica or their respective financial advisers. Such forward looking
statements involve known and unknown risks and uncertainties that
could significantly affect expected results and are based on
certain key assumptions. Many factors could cause actual results to
differ materially from those projected or implied in any forward
looking statements. These factors include the satisfaction of the
Conditions, as well as additional factors, such as: fluctuations in
the capital markets; fluctuations in interest and exchange rates;
increased regulation or regulatory scrutiny; the occurrence of
unforeseen disasters or catastrophes; political or economic
instability in principal markets; adverse outcomes in litigation;
and general, local and global economic, political, business and
market conditions. Other unknown or unpredictable factors could
cause actual results to differ materially from those in the
forward-looking statements. Such forward-looking statements should
therefore be construed in the light of such factors. Neither CGI
nor Logica, nor any of their respective associates or directors,
officers or advisers, provides any representation, assurance or
guarantee that the occurrence of the events expressed or implied in
any forward-looking statements in this announcement will actually
occur. Due to such uncertainties and risks, readers are cautioned
not to place undue reliance on such forward looking statements,
which speak only as of the date hereof. All subsequent oral or
written forward looking statements attributable to CGI or Logica or
any of their respective members, directors, officers or employees
or any persons acting on their behalf are expressly qualified in
their entirety by the cautionary statement above. CGI and Logica
disclaim any obligation to update or revise any forward looking or
other statements contained herein other than in accordance with
their legal and regulatory obligations.
Profit Forecast
The Logica Profit Forecast is a profit forecast for the purposes
of Rule 28 of the Code. As such it is a requirement under the Code
that the Logica Profit Forecast be reported on by Logica's
reporting accountants and financial advisers. The bases and
assumptions behind the Logica Profit Forecast and the reports of
the Logica Financial Advisers and PricewaterhouseCoopers are set
out in Appendix V to this announcement. The Logica Financial
Advisers and PricewaterhouseCoopers have given and not withdrawn
their consent to publication of their reports in the form and
context in which they are included.
Dealing Disclosure Requirements
Under Rule 8.3(a) of the Code, any person who is interested in 1
per cent. or more of any class of relevant securities of an offeree
company or of any paper offeror (being any offeror other than an
offeror in respect of which it has been announced that its offer
is, or is likely to be, solely in cash) must make an Opening
Position Disclosure following the commencement of the offer period
and, if later, following the announcement in which any paper
offeror is first identified. An Opening Position Disclosure must
contain details of the person's interests and short positions in,
and rights to subscribe for, any relevant securities of each of (i)
the offeree company and (ii) any paper offeror(s). An Opening
Position Disclosure by a person to whom Rule 8.3(a) applies must be
made by no later than 3.30 pm (London time) on the 10th business
day following the commencement of the offer period and, if
appropriate, by no later than 3.30 pm (London time) on the 10th
business day following the announcement in which any paper offeror
is first identified. Relevant persons who deal in the relevant
securities of the offeree company or of a paper offeror prior to
the deadline for making an Opening Position Disclosure must instead
make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes,
interested in 1 per cent. or more of any class of relevant
securities of the offeree company or of any paper offeror must make
a Dealing Disclosure if the person deals in any relevant securities
of the offeree company or of any paper offeror. A Dealing
Disclosure must contain details of the dealing concerned and of the
person's interests and short positions in, and rights to subscribe
for, any relevant securities of each of (i) the offeree company and
(ii) any paper offeror, save to the extent that these details have
previously been disclosed under Rule 8. A Dealing Disclosure by a
person to whom Rule 8.3(b) applies must be made by no later than
3.30 pm (London time) on the business day following the date of the
relevant dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of an offeree company or a paper
offeror, they will be deemed to be a single person for the purpose
of Rule 8.3.
Opening Position Disclosures must also be made by the offeree
company and by any offeror and Dealing Disclosures must also be
made by the offeree company, by any offeror and by any persons
acting in concert with any of them (see Rules 8.1, 8.2 and
8.4).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Panel's website at www.thetakeoverpanel.org.uk, including
details of the number of relevant securities in issue, when the
offer period commenced and when any offeror was first identified.
If you are in any doubt as to whether you are required to make an
Opening Position Disclosure or a Dealing Disclosure, you should
contact the Panel's Market Surveillance Unit on +44 (0) 20 7638
0129.
Information Relating to Logica Shareholders
Please be aware that addresses, electronic addresses and certain
information provided by Logica Shareholders, persons with
information rights and other relevant persons for the receipt of
communications from Logica may be provided to CGI Europe during the
offer period as requested under Section 4 of Appendix 4 of the Code
to comply with Rule 2.12(c).
Publication on Website
A copy of this announcement will be available free of charge
(subject to any applicable restrictions with respect to persons
resident in Restricted Jurisdictions) on Logica's and CGI's
websites (www.logica.com and www.cgi.com respectively) by no later
than 12 noon (London time) on 1 June 2012.
Rule 2.10 Requirement
In accordance with Rule 2.10 of the Code, Logica confirms that
at the date of this announcement, it has in issue and admitted to
trading on Euronext Amsterdam and the main market of the London
Stock Exchange 1,620,160,491 ordinary shares of 10 pence each
(excluding ordinary shares held in treasury). The International
Securities Identification Number (ISIN) of the Logica Shares is
GB0005227086.
APPENDIX I CONDITIONS AND CERTAIN FURTHER TERMS OF THE
ACQUISITION
The Acquisition will comply with the rules and regulations of
the FSA, the London Stock Exchange, Euronext Amsterdam and the Code
to the extent applicable.
Part A: Conditions of the Scheme
The Acquisition will be conditional upon the Scheme becoming
unconditional and effective, subject to the Code, by no later than
16 November 2012 or such later date (if any) as CGI Europe and
Logica may, with the consent of the Panel and (if required) the
Court, agree.
1 The Scheme will be conditional upon:
1.1 its approval by a majority in number representing not less
than 75 per cent. in value of the Scheme Shareholders who are on
the register of members of Logica at the Scheme Voting Record Time,
and who are present and vote, whether in person or by proxy, at the
Court Meeting (or any adjournment thereof), at a Court Meeting held
no later than 20 August 2012 or such later date (if any) selected
by Logica as CGI Europe may agree;
1.2 resolutions in connection with or required to approve and
implement the Scheme and approve the Capital Reduction and the
adoption of the Amended Logica Articles being duly passed by the
Logica Shareholders by the requisite majority or majorities at a
General Meeting held no later than 20 August 2012 or such later
date (if any) selected by Logica as CGI Europe may agree;
1.3 the sanction of the Scheme by the Court (with or without
modification but subject to any modification being on terms
acceptable to Logica and CGI Europe);
1.4 confirmation of the Capital Reduction by the Court; and
1.5 (a) the delivery of copies of the Sanction Court Order, the
Reduction Court Order and the Statement of Capital to the Registrar
of Companies and (b) if so ordered by the Court in order to take
effect, the registration of the Reduction Court Order and the
Statement of Capital by the Registrar of Companies.
2 Subject as stated in Part B below and to the requirements of
the Panel, the Acquisition is conditional upon the following
Conditions and, accordingly, the necessary actions to make the
Scheme effective will not be taken unless such Conditions (as
amended if appropriate) have been satisfied and continue to be
satisfied immediately prior to the Court hearing to sanction the
Scheme or, where relevant, waived by CGI Europe immediately prior
to the Court hearing to sanction the Scheme:
Antitrust, regulatory and authorisations
(a) (i) (A) the European Commission making a decision, in terms
reasonably satisfactory to CGI Europe, that, in connection with the
Acquisition, or any aspect of the Acquisition, it will not initiate
proceedings under Article 6(1)(c) of the Council Regulation; or
(B) the European Commission not having issued a decision within
the required deadlines, with the consequence that the Acquisition
is deemed compatible with the internal market pursuant to Article
10(6) of the Council Regulation;
(ii) (A) in the event of a referral of the Acquisition or any
aspect of the Acquisition to a competent authority of a European
Union or EFTA state in accordance with Article 9(3)(b) or 9(5) of
the Council Regulation, such competent authority adopting a
clearance decision within the first phase of its relevant
proceedings and, to the extent applicable, the European Commission
making a decision that it will not initiate proceedings under
Article 6(1)(c) of the Council Regulation; or
(B) the competent authority mentioned in Condition 2(a)(ii) (A)
above not having issued a decision within the required deadlines,
with the consequence that the Acquisition is deemed approved
according to local competition laws;
(b) (i) all necessary notifications and filings having been made
and all applicable waiting periods (including any extensions
thereof) under the United States Hart-Scott-Rodino Antitrust
Improvements Act of 1976 (as amended) and the rules and regulations
made thereunder having expired, lapsed or been terminated as
appropriate in each case in respect of the Acquisition; and
(ii) no order or injunction having been made by a court of
competent jurisdiction in the United States that prohibits the
consummation of the Acquisition;
(c) other than as set out in paragraphs (a) and (b) (inclusive),
all material notifications, filings or applications which are
necessary under any applicable legislation or regulation of any
relevant jurisdiction in connection with the Acquisition having
been made and all necessary waiting periods (including any
extensions thereof) under any applicable legislation or regulation
of any relevant jurisdiction having expired, lapsed or been
terminated (as appropriate) and all statutory and regulatory
obligations in any relevant jurisdiction having been complied with,
in connection with the Acquisition and the acquisition or the
proposed acquisition of any shares or other securities in, or
control or management of, Logica or any other member of the Wider
Logica Group by any member of the Wider CGI Group (including
necessary consents and approvals from any Security Agency), and all
Authorisations necessary in respect thereof having been obtained in
terms and in a form reasonably satisfactory to CGI Europe from all
appropriate Third Parties or (without prejudice to the generality
of the foregoing) from any person or bodies with whom any member of
the Wider Logica Group has entered into contractual arrangements
(including necessary consents and approvals from any Security
Agency) and all such Authorisations necessary to carry on the
business of any member of the Wider Logica Group in any relevant
jurisdiction remaining in full force and effect at the time at
which the Acquisition becomes otherwise wholly unconditional and no
notice of an intention to revoke, suspend, restrict, modify or not
to renew such Authorisations having been issued;
(d) no Third Party having taken, instituted or implemented any
action, proceeding, suit, investigation, enquiry or reference (and,
in each case, not having withdrawn the same), or enacted, made or
proposed any statute, regulation, decision or order (and, in each
case, not having withdrawn the same), or having taken any other
steps which would or might reasonably be expected to:
(i) require, prevent or materially delay the divestiture or
materially alter the terms envisaged for such divestiture by any
member of the Wider CGI Group or by any member of the Wider Logica
Group of all or a material portion of their respective businesses,
assets or property or impose any material limitation on the ability
of all or any of them to conduct their respective businesses (or
any of them) or to own, control or manage any of their respective
assets or properties (or any part thereof);
(ii) require any member of the Wider CGI Group or the Wider
Logica Group to offer to acquire a material number of shares or
other securities or interest in any member of the Wider Logica
Group or Wider CGI Group (other than in connection with the
implementation of the Acquisition);
(iii) impose any material limitation on, or result in a material
delay in, the ability of any member of the Wider CGI Group directly
or indirectly to acquire, hold or to exercise effectively any
rights of ownership in respect of shares or any other securities in
Logica or on the ability of any member of the Wider CGI Group or
the Wider Logica Group to exercise management control over any
member of the Wider Logica Group;
(iv) otherwise materially adversely affect any or all of the
business, assets, or profits, of any member of the Wider Logica
Group;
(v) result in any member of the Wider Logica Group ceasing to be
able to carry on business under any name under which it presently
does so;
(vi) make the Acquisition, its implementation or the acquisition
or proposed acquisition of any shares or other securities in, or
control or management of, Logica by any member of the Wider CGI
Group void, unenforceable and/or illegal under the laws of any
applicable jurisdiction, or otherwise prevent or prohibit,
materially restrict, materially restrain or materially delay or
otherwise materially interfere with the implementation of the
Acquisition, or impose material additional conditions or
obligations with respect thereto, or otherwise challenge or
materially interfere therewith (including, for the avoidance of
doubt, any injunction, order or decision by, or at the request of,
a Security Agency);
(vii) require, prevent or delay the divestiture by any member of
the Wider CGI Group of any shares or other securities in any member
of the Wider Logica Group; or
(viii) impose any material limitation on the ability of any
member of the Wider CGI Group or of any member of the Wider Logica
Group to integrate or coordinate all or any part of its business
with all or any part of the business of any other member of the
Wider CGI Group and/or the Wider Logica Group,
and all applicable waiting and other time periods (including any
extensions thereof) during which any such Third Party could take,
institute, implement or threaten any such action, proceeding, suit,
investigation, enquiry or reference or any other step under the
laws of any applicable jurisdiction in respect of the Acquisition
or the acquisition or proposed acquisition of any Logica Shares or
otherwise intervene in respect thereof having expired, lapsed or
been terminated;
Certain matters arising as a result of any agreement,
arrangement, etc.
(e) save as Fairly Disclosed, there being no provision of any
agreement, arrangement, lease, licence, franchise, permit or other
instrument to which any member of the Wider Logica Group is a party
or by or to which any such member or any of its assets is or may be
bound or be subject which, as a consequence of the Acquisition or
the acquisition or the proposed acquisition by any member of the
Wider CGI Group of any shares or other securities in Logica or
because of a change in the control or management of any member of
the Wider Logica Group, which would or might reasonably be expected
to result in, in each case to an extent which is material in the
context of the Wider Logica Group taken as a whole:
(i) any monies borrowed by, or any other indebtedness (actual or
contingent) of, or any grant available to, any member of the Wider
Logica Group being or becoming repayable, or capable of being
declared repayable, immediately or prior to its or their stated
maturity date or repayment date, or the ability of any such member
to borrow monies or incur any indebtedness being withdrawn or
inhibited or being capable of becoming or being withdrawn or
inhibited;
(ii) 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 member of the Wider Logica Group or any
such mortgage, charge or other security interest (whenever created,
arising or having arisen) becoming enforceable;
(iii) any such agreement, arrangement, lease, licence,
franchise, permit or other instrument being terminated or the
rights, liabilities, obligations or interests of any member of the
Wider Logica Group being adversely modified or adversely affected
or any obligation or liability arising or any adverse action being
taken or arising thereunder;
(iv) any liability of any member of the Wider Logica Group to
make any severance, termination, bonus or other payment to any of
its directors or other officers;
(v) any member of the Wider Logica Group ceasing to be able to
carry on business under any name under which it presently does
so;
(vi) any material assets or interests of, or any material assets
the use of which is enjoyed by, any member of the Wider Logica
Group being or falling to be disposed of or charged or any right
arising under which any such assets or interest could be required
to be disposed of or charged or cease to be available to any member
of the Wider Logica Group otherwise than in the ordinary course of
business;
(vii) the rights, liabilities, obligations or interests of any
member of the Wider Logica Group in, or the business of any member
of the Wider Logica Group with, any person, firm or body (or any
arrangement or arrangements relating to any such interest or
business) being terminated, adversely modified or affected;
(viii) the value or the financial or trading position of any
member of the Wider Logica Group being prejudiced or adversely
affected; or
(ix) the creation of any liability (actual or contingent) by any
member of the Wider Logica Group, other than trade creditors or
other liabilities incurred in the ordinary course of business,
and no event having occurred which, under any provision of any
agreement, arrangement, licence, permit, franchise, lease or other
instrument to which any member of the Wider Logica Group is a party
or by or to which any such member or any of its assets are bound,
entitled or subject, would or might reasonably be expected to
result in any of the events or circumstances as are referred to in
sub-paragraphs (i) to (ix) above of this Condition, in each case to
an extent which is material in the context of the Wider Logica
Group taken as a whole;
Certain events occurring since 31 December 2011
(f) save as Fairly Disclosed, no member of the Wider Logica
Group having, since 31 December 2011:
(i) issued or agreed to issue or authorised or announced its
intention to authorise or propose the issue, of additional shares
of any class, or securities or securities convertible into, or
exchangeable for, or rights, warrants or options to subscribe for
or acquire, any such shares, securities or convertible securities
or transferred or sold or agreed to transfer or sell or authorised
or proposed the transfer or sale of Logica Shares out of treasury
(except, in each case, where relevant, as between Logica and wholly
owned subsidiaries of Logica or between the wholly owned
subsidiaries of Logica and except for the issue or transfer out of
treasury of Logica Shares on the exercise of employee share options
or vesting of employee share awards in the ordinary course under
the Logica Share Schemes);
(ii) 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) other than
dividends (or other distributions whether payable in cash or
otherwise) lawfully paid or made by any wholly owned subsidiary of
Logica to Logica or any of its wholly owned subsidiaries, save for
the net final dividend of 2.3 pence per Logica Share in respect of
the year ended 31 December 2011 which was paid on 16 May 2012;
(iii) other than pursuant to the Acquisition (and except for
transactions between Logica and its wholly owned subsidiaries or
between wholly owned subsidiaries of Logica or in the ordinary
course of business), implemented, effected, authorised or announced
its intention to implement, effect or authorise any merger,
demerger, reconstruction, amalgamation, scheme, commitment or
acquisition or disposal of assets or shares or loan capital (or the
equivalent thereof) in any undertaking or undertakings, in each
case to an extent which is material in the context of the Wider
Logica Group taken as a whole;
(iv) except for transactions between Logica and its wholly owned
subsidiaries or between the wholly owned subsidiaries of Logica,
disposed of, or transferred, mortgaged or created any security
interest over any material asset or any right, title or interest in
any material asset or authorised or announced any intention to do
so, in each case other than in the ordinary course of business and
to an extent which is material in the context of the Wider Logica
Group taken as a whole;
(v) issued, authorised or announced an intention to authorise
the issue of or made any change in or to the terms of any
debentures or become subject to any contingent liability or (other
than trade credit incurred in the ordinary course of business)
incurred or increased any indebtedness except as between Logica and
any of its wholly owned subsidiaries or between wholly owned
subsidiaries of Logica, in each case to an extent which is material
in the context of the Wider Logica Group taken as a whole;
(vi) entered into or varied or authorised or announced its
intention, other than in the ordinary course of business, to enter
into or vary any material contract, arrangement, agreement,
transaction or commitment (whether in respect of capital
expenditure or otherwise) which is of a long term, unusual or
onerous nature or magnitude or which involves an obligation of such
nature or magnitude, in each case to an extent which is material in
the context of the Wider Logica Group taken as a whole;
(vii) entered into or varied the terms of, or made any offer
(which remains open for acceptance) to enter into or vary the terms
of any contract, service agreement, commitment or arrangement with
any director or senior executive of Logica;
(viii) proposed, agreed to provide or modified the terms of any
share option scheme, incentive scheme or other benefit relating to
the employment or termination of employment of any employee of the
Wider Logica Group;
(ix) purchased, redeemed or repaid or announced any proposal to
purchase, redeem or repay any of its own shares or other securities
or reduced or made any other change to any part of its share
capital (except, in each case, where relevant, as between Logica
and wholly owned subsidiaries of Logica or between the wholly owned
subsidiaries of Logica and except for the issue or transfer out of
treasury of Logica Shares on the exercise of employee share options
or vesting of employee share awards under the Logica Share Schemes
as Fairly Disclosed);
(x) otherwise than in respect of claims between Logica and its
wholly owned subsidiaries, waived, compromised or settled any
claim, other than in the ordinary course of business, in each case
to an extent which is material in the context of the Wider Logica
Group taken as a whole;
(xi) terminated or varied the terms of any agreement or
arrangement between any member of the Wider Logica Group and any
other person, in a manner which would have a material adverse
effect on the financial position of the Wider Logica Group taken as
a whole;
(xii) save as required in connection with the adoption of the
Amended Logica Articles, made any alteration to its memorandum or
articles of association or other incorporation documents to an
extent which is material in the context of the Acquisition;
(xiii) made or agreed or consented to any material change to the
terms of the trust deeds and rules constituting the pension schemes
established for its directors, employees or their dependants or to
the benefits which accrue, or to the pensions which are payable,
thereunder, or to the basis on which qualification for, or accrual
or entitlement to, such benefits or pensions are calculated or
determined or to the basis upon which the liabilities (including
pensions) of such pension schemes are funded or made, or the manner
in which the assets of the previous schemes are invested or the
basis or rate of employer contribution to a pension scheme or
agreed or consented to any change to the trustees involving the
appointment of a trust corporation, in each case to an extent which
is material in the context of the Wider Logica Group taken as a
whole;
(xiv) been unable, or admitted in writing that it is unable, to
pay its debts or commenced negotiations with one or more of its
creditors with a view to rescheduling or restructuring any of its
indebtedness, or having stopped or suspended (or threatened to stop
or suspend) payment of its debts generally or ceased or threatened
to cease carrying on all or a substantial part of its business, in
each case to an extent which is material in the context of the
Wider Logica Group taken as a whole;
(xv) (other than in respect of a member of the Wider Logica
Group which is dormant and was solvent at the relevant time) taken
any steps, corporate action or had any legal proceedings instituted
or threatened in writing against it in relation to the suspension
of payments, a moratorium of any indebtedness, its winding-up
(voluntary or otherwise), dissolution, reorganisation or for the
appointment of a receiver, administrator, manager, administrative
receiver, trustee or similar officer of all or any material part of
its assets or revenues or any analogous or equivalent steps or
proceedings in any jurisdiction or appointed any analogous person
in any jurisdiction or had any such person appointed, in each case
to an extent which is material in the context of the Wider Logica
Group taken as a whole;
(xvi) (other than for transactions between Logica and its
wholly-owned subsidiaries or between the wholly owned subsidiaries
of Logica), made, authorised or announced an intention to propose
any change in its loan capital, in each case to an extent which is
material in the context of the Wider Logica Group taken as a
whole;
(xvii) entered into any contract, transaction or arrangement
which would be restrictive on the business of any member of the
Wider Logica Group or the Wider CGI Group, as the case may be,
other than to a nature and extent which is normal in the context of
the business concerned, in each case to an extent which is material
in the context of the Wider Logica Group taken as a whole; or
(xviii) entered into any agreement, arrangement, commitment or
contract or passed any resolution or made any offer (which remains
open for acceptance) with respect to or announced an intention to,
or to propose to, effect any of the transactions, matters or events
referred to in this Condition;
No adverse change, litigation, regulatory enquiry or similar
(g) since 31 December 2011 and save as Fairly Disclosed:
(i) there having been no adverse change in the business, assets,
financial or trading position or profits, of any member of the
Wider Logica Group to an extent which is material in the context of
the Wider Logica Group taken as a whole;
(ii) no litigation, arbitration proceedings, prosecution or
other legal proceedings having been threatened, announced or
instituted by or against or remaining outstanding against or in
respect of, any member of the Wider Logica Group or to which any
member of the Wider Logica Group is or may become a party (whether
as claimant, defendant or otherwise) and no investigation by any
Third Party against or in respect of any member of the Wider Logica
Group having been threatened, announced, instituted or remaining
outstanding by, against or in respect of, any member of the Wider
Logica Group, in each case to an extent which is material in the
context of the Wider Logica Group taken as a whole;
(iii) no enquiry, review or investigation by, or complaint or
reference to, any Third Party against or in respect of any member
of the Wider Logica Group having been threatened, announced or
instituted or remaining outstanding by, against or in respect of
any member of the Wider Logica Group, in each case to an extent
which is material in the context of the Wider Logica Group taken as
a whole;
(iv) no contingent or other liability having arisen or increased
which would be likely to adversely affect any member of the Wider
Logica Group, in each case to an extent which is material in the
context of the Wider Logica Group taken as a whole; and
(v) no steps having been taken and no omissions having been made
which are reasonably likely to result in the withdrawal,
cancellation, termination or modification of any licence held by
any member of the Wider Logica Group which is necessary for the
proper carrying on of its business, and the withdrawal,
cancellation, termination or modification of which would have a
material adverse effect on the Wider Logica Group taken as a
whole;
No discovery of certain matters regarding information,
environmental issues, liabilities, corruption and intellectual
property
(h) save as Fairly Disclosed, CGI Europe not having discovered:
(i) that any financial, business or other information concerning
the Wider Logica Group Publicly Announced prior to the Announcement
Date or disclosed to any member of the Wider CGI Group at any time
prior to the Announcement Date by or on behalf of any member of the
Wider Logica Group is materially misleading, contains a material
misrepresentation of any fact or omits to state a fact necessary to
make that information not materially misleading, in each case to an
extent which is material in the context of the Wider Logica Group
taken as a whole;
(ii) any information which affects the import of any information
Publicly Announced prior to the Announcement Date by or on behalf
of any member of the Wider Logica Group, in each case to an extent
which is material in the context of the Wider Logica Group taken as
a whole;
(iii) that any past or present member of the Wider Logica Group
has not complied in any material respect with all applicable
legislation, regulations of any jurisdiction or any notice or
requirement of any Authorisation relating to the use, treatment,
storage, carriage, disposal, discharge, spillage, release, leak or
emission of any waste or hazardous substance or any substance
likely to impair the environment (including property) or harm human
health or otherwise relating to environmental matters or the health
and safety of humans, which non-compliance would be likely to give
rise to any material liability including any penalty for
non-compliance (whether actual or contingent) on the part of any
member of the Wider Logica Group, in each case to an extent which
is material in the context of the Wider Logica Group taken as a
whole;
(iv) that there is or is reasonably likely to be any material
obligation or liability (whether actual or contingent) or
requirement to make good, remediate, repair, reinstate or clean up
any property, asset or any controlled waters currently or
previously owned, occupied, operated or made use of or controlled
by any past or present member of the Wider Logica Group (or in
which any such member may have or previously have had or be deemed
to have had an interest), under any environmental legislation,
common law, regulation, notice, circular, Authorisation or order of
any Third Party in any jurisdiction or to contribute to the cost
thereof or associated therewith or to indemnify any person in
relation thereto, in each case to an extent which is material in
the context of the Wider Logica Group taken as a whole;
(v) that circumstances exist whereby a person or class of
persons would be likely to have any claim or claims in respect of
any product or process of manufacture or materials used therein
currently or previously manufactured, sold or carried out by any
past or present member of the Wider Logica Group which claim or
claims would be likely to affect any member of the Wider Logica
Group, in each case which is material in the context of the Wider
Logica Group taken as a whole;
(vi) that any past or present member of the Wider Logica Group
has paid or agreed to pay any bribe including any "inducement fee",
given or agreed to give any similar gift or benefit or paid or
agreed to pay to a concealed bank account or fund to or for the
account of, any customer, supplier, governmental official or
employee, representative of a political party, or other person for
the purpose of obtaining or retaining business or otherwise engaged
in any activity, done such things (or omitted to do such things) in
contravention of the UK Bribery Act 2010, as amended, or the US
Foreign Corrupt Practices Act of 1977, as amended; or
(vii) that any past or present member of the Wider Logica Group
has engaged in any business with or made any investments in, or
made any payments to, (A) any government, entity or individual with
which US or Canadian or European Union persons are prohibited from
engaging in activities or doing business by US or Canadian or
European Union laws or regulations, including the economic
sanctions administered by the United States Office of Foreign
Assets Control or (B) any government, entity or individual targeted
by any of the economic sanctions of the United Nations or the
European Union or any of their respective member states; and
(i) since 31 December 2011 and save as Fairly Disclosed, no
circumstance having arisen or event having occurred in relation to
any intellectual property owned, used or licensed by the Wider
Logica Group or to any third parties, including:
(i) any member of the Wider Logica Group losing its title to any
intellectual property or any intellectual property owned by the
Wider Logica Group being revoked, cancelled or declared
invalid;
(ii) any agreement regarding the use of any intellectual
propertylicensed to or by any member of the Wider Logica Group
being terminated or varied; or
(iii) any claim being filed suggesting that any member of the
Wider Logica Group infringed the intellectual property rights of a
third party or any member of the Wider Logica Group being found to
have infringed the intellectual property rights of a third
party,
in each case which is material in the context of the Wider
Logica Group taken as a whole.
Part B: Certain further terms of the Acquisition
3 To the extent permitted by law and subject to the requirements
of the Panel, CGI Europe reserves the right to waive in whole or in
part, all or any of the Conditions set out in paragraph 2
above.
4 The Acquisition will lapse and the Scheme will not proceed,
if, prior to the commencement of the Court Meeting, the European
Commission adopts a decision pursuant to Article 6(1)(c) of the
Council Regulation initiating proceedings in relation to the
Acquisition or any matter arising from the Acquisition, or any
matter arising from the Acquisition (including, but not limited to,
any public interest consideration) is referred to the Competition
Commission in the United Kingdom.
5 If CGI Europe is required by the Panel to make an offer for
Logica Shares under the provisions of Rule 9 of the Code, CGI
Europe may make such alterations to any of the Conditions and terms
of the Acquisition as are necessary to comply with the provisions
of that Rule.
6 Conditions 2 (a) to (i) (inclusive) must be fulfilled, be
determined by CGI Europe to be or remain fulfilled or (if capable
of waiver) be waived by 11.59 p.m. on the date immediately
preceding the date of the Scheme Court Hearing, failing which the
Scheme will lapse.
Notwithstanding the paragraph above and subject to the
requirements of the Panel, CGI Europe reserves the right in its
sole discretion to waive all or any of Conditions 2(a) to (i)
inclusive, in whole or in part and to proceed with the Scheme Court
Hearing prior to the fulfilment, satisfaction or waiver of any of
Conditions 2(a) to (i) inclusive.
CGI Europe shall be under no obligation to waive (if capable of
waiver), to determine to be or remain fulfilled or to treat as
fulfilled any of Conditions 2 (a) to (i) (inclusive) by a date
earlier than the latest date specified above for the fulfilment of
that Condition, notwithstanding that the other Conditions (or any
of them) may at such earlier date have been waived (if capable of
waiver) or fulfilled and that there are, at such earlier date, no
circumstances indicating that any such Condition may not be capable
of fulfilment.
7 CGI Europe reserves the right to elect, with the prior written
consent of the Panel, to implement the Acquisition by way of a
Takeover Offer. In such event, the Acquisition will be implemented
on substantially the same terms subject to appropriate amendments,
including (without limitation) an acceptance condition set at 90
per cent. (or such less percentage, being more than 50 per cent.,
as CGI Europe may, subject to the rules of the Code and the consent
of the Panel, decide) of the shares to which such offer relates, so
far as applicable, as those which would apply to the Scheme.
8 The availability of the Acquisition to persons not resident in
the United Kingdom may be affected by the laws of the Restricted
Jurisdictions. Persons who are not resident in the United Kingdom
should inform themselves about and observe any applicable
requirements.
9 The Acquisition is not being made, directly or indirectly, in,
into or from, or by use of the mails of, or by any means of
instrumentality (including, but not limited to, facsimile, e-mail
or other electronic transmission, telex or telephone) of interstate
or foreign commerce of, or of any facility of a national, state or
other securities exchange of, any jurisdiction where to do so would
violate the laws of that jurisdiction.
10 In the event that the Acquisition is to be implemented by way
of a Takeover Offer, Logica Shares will be acquired under the
Acquisition free from all liens, equities, charges, encumbrances
and other interests and together with all rights attaching thereto,
including voting rights and the right to receive and retain in full
all dividends and other distributions (if any) announced, declared,
made or paid on or after 17 May 2012. Any New Logica Shares will be
issued on the same basis. Insofar as a dividend or other
distribution is proposed, declared, made or payable by Logica in
respect of a Logica Share on or after 17 May 2012, the price
payable under the Acquisition in respect of that Logica Share will
be reduced by the amount of the dividend and/or distribution,
except insofar as the Logica Share is or will be acquired pursuant
to the Acquisition on a basis which entitles CGI Europe alone to
receive the dividend or distribution directly from Logica and to
retain it.
11 Rule 13.5(a) of the Code states that "an offeror should not
invoke any condition or pre-condition so as to cause the offer not
to proceed, to lapse or be withdrawn unless the circumstances which
give rise to the right to invoke the condition or pre-condition are
of material significance to the offeror in the context of the
offer." The Conditions in paragraphs 1 and (with respect to a
decision by the European Commission under Article 6(1)(c) or,
following a referral by the European Commission pursuant to Article
9(3)(b) or 9(5), a decision by the competent authority in the
United Kingdom to refer the matter to the Competition Commission)
paragraph 2(a) of Part A are not subject to Rule 13.5(a) of the
Code.
12 The Acquisition will be governed by English law and will be
subject to the jurisdiction of the English courts and to the
Conditions and further terms set out in this Appendix I and to be
set out in the Scheme Document.
APPENDIX II SOURCES OF INFORMATION AND BASES OF CALCULATION
In this announcement, unless otherwise stated, or the context
otherwise requires, the following bases and sources have been
used:
1. Financial information relating to:
-- Logica is extracted (without adjustment) from the audited
consolidated financial statements for the Logica Group for the
financial year ended 31 December 2011; and
-- CGI is extracted (without material adjustment) from the
audited consolidated financial statements of CGI for the financial
year ended 30 September 2011.
2. The value of the Acquisition is calculated on the basis of
the fully diluted number of Logica Shares (at the Acquisition
price) in issue referred to in paragraph 4.
3. As at the Close of Business on 30 May 2012, being the last
practicable date before the date of this announcement, Logica had
in issue 1,620,160,491 Logica Shares. The International Securities
Identification Number for Logica Shares is GB0005227086.
4. The fully diluted share capital of Logica (being
1,646,488,083 Logica Shares) is calculated on the basis of
1,620,160,491 Logica Shares in issue on 30 May 2012, and in
addition up to 26,327,592 further Logica Shares which may be issued
on or after the Announcement Date following the exercise of
options, or settled via alternative means, which have a price of
105 pence or less, or via the vesting of awards under the Logica
Share Schemes on the basis explained in this announcement.
5. Unless otherwise stated, all prices and closing prices for
Logica Shares are closing middle market quotations derived from the
Daily Official List.
6. The premium calculations per Logica Shares have been calculated by reference to:
-- 59.8 per cent. to the Closing Price per Logica Share of 65.70
pence on 30 May 2012 (being the last Dealing Day prior to the date
of this announcement);
-- 49.6 per cent. to the average Closing Price of approximately
70.20 pence per Logica Share for the one month period ending on 30
May 2012 (being the last Dealing Day prior to this announcement);
and
-- 32.8 per cent. to the average Closing Price of approximately
79.05 pence per Logica Share for the six month period ending on 30
May 2012 (being the last Dealing Day prior to this
announcement).
7. The reference to the implied enterprise value multiple is
based on the value of Logica's fully diluted share capital (as
calculated in note 4 above) assuming 105 pence per Logica Share
plus Logica's net debt as at 31 December 2011 of GBP321.6 million
all divided by Logica's EBITDA of GBP311.5m for the year ended 31
December 2011.
8. Unless otherwise stated in this announcement GBP1 = C$1.60.
APPENDIX III IRREVOCABLE UNDERTAKINGS
The following holders or controllers of Logica Shares have given
irrevocable undertakings to vote in favour of the Scheme at the
Court Meeting and in favour of the General Meeting Resolutions:
PART A
Number of Logica Shares under Logica
Name Number of Logica Shares % of Logica Shares in issue Share Schemes
David Tyler 386,298 0.02 nil
Sergio Giacoletto 23,493 0.00 nil
Jan Babiak 14,246 0.00 nil
Noel Harwerth 30,701 0.00 nil
Dr. Wolfhart Hauser 66,540 0.00 nil
Frederic Rose 67,268 0.00 nil
Andrew Green 1,849,492 0.11 1,562,526
Himanshu Raja 125,169 0.01 1,153,932
TOTAL 2,563,207 0.16 2,716,458
CGI Europe has received irrevocable undertakings from the Logica
Directors in respect of their own beneficial holdings of Logica
Shares, representing approximately 0.16 per cent. of the existing
issued share capital of Logica:
(a) to cast (or procure the casting of) all voting rights
attaching to such Logica Shares in favour of the Scheme at the
Court Meeting and in favour of each of the General Meeting
Resolutions; and
(b) if the Acquisition is structured as a Takeover Offer, to
accept or procure the acceptance of such Takeover Offer in respect
of all such Logica Shares.
The irrevocable undertakings given by the Logica Directors will
cease to be binding if:
(a) CGI Europe announces, with the consent of the Panel, that it
does not intend to make or proceed with the Acquisition and no new,
revised or replacement Scheme or Takeover Offer is announced by CGI
Europe in accordance with Rule 2.7 of the Code at the same time;
or
(b) the Scheme does not become effective or, as applicable, the
Takeover Offer lapses or is withdrawn and no new, revised or
replacement Scheme or Takeover Offer is or has been announced in
accordance with Rule 2.7 of the Code.
PART B
Number of Logica Shares under Logica Share
Name Number of Logica Shares % of Logica Shares in issue Schemes
Schroder 232,291,961 14.34 nil
Artemis 59,835,080 3.69 nil
TOTAL 292,127,041 18.03 nil
Schroder
CGI Europe has received an irrevocable undertaking from Schroder
in respect of 232,291,961 Logica Shares which it manages on behalf
of clients and in respect of which it is able to exercise
discretionary and voting control to procure the casting of all
voting rights attaching to such Logica Shares in favour of the
Scheme at the Court Meeting and in favour of the General Meeting
Resolutions (or, if the Acquisition is implemented by way of a
Takeover Offer, to procure the acceptance of the Takeover Offer in
accordance with its terms in respect of all such Logica Shares).
Such Logica Shares represent approximately 14.34 per cent. of the
existing issued ordinary share capital of Logica.
The irrevocable undertaking received from Schroder will cease to
be binding if:
(a) the Scheme Document or Offer Document, as the case may be,
has not been posted within 28 days after the date of this
announcement (or within such longer period as CGI Europe, with the
consent of the Panel, determines, being not more than eight weeks
after the date of this announcement);
(b) the Scheme terminates or lapses in accordance with its terms
or otherwise becomes incapable of ever becoming effective, provided
that CGI Europe has not, within 12 days of the Scheme having so
terminated or lapsed, announced in accordance with Rule 2 of the
Code that it intends to implement the Acquisition by way of a
Takeover Offer or any new scheme of arrangement;
(c) in the event that the Acquisition is implemented by way of a
Takeover Offer, the Takeover Offer is withdrawn or lapses; or
(d) a third party announces in accordance with Rule 2.7 of the
Code a firm intention to make or makes a competing offer (howsoever
structured) without preconditions on terms which represent an
improvement of 10 per cent. or more on the value of the
consideration offered under the Acquisition as at the date on which
such competing offer is announced unless CGI Europe has announced
an improvement to the terms of the Acquisition within seven days of
such competing offer being announced such that the terms of the
improved Acquisition are (in the reasonable opinion of Schroder) at
least as favourable as under the competing offer.
Artemis
CGI Europe has received an irrevocable undertaking from
Artemisin respect of 59,835,080 Logica Shares which it manages on
behalf of clients and in respect of which it is able to exercise
discretionary and voting control, representing approximately 3.69
per cent. of the existing issued ordinary share capital of
Logica:
(a) to cast (or procure the casting of) all voting rights
attaching to such Logica Shares in favour of the Scheme at the
Court Meeting and in favour of each of the General Meeting
Resolutions; and
(b) if the Acquisition is structured as a Takeover Offer, to
accept or procure the acceptance of such Takeover Offer in respect
of all such Logica Shares.
The irrevocable undertaking given by Artemis will cease to be
binding if:
(a) CGI Europe announces, with the consent of the Panel, that it
does not intend to make or proceed with the Acquisition and no new,
revised or replacement Scheme or Takeover Offer is announced by CGI
Europe in accordance with Rule 2.7 of the Code at the same time;
or
(b) the Scheme does not become effective or, as applicable, the
Takeover Offer lapses or is withdrawn and no new, revised or
replacement scheme of arrangement or takeover offer is or has been
announced in accordance with Rule 2.7 of the Code; or
(c) a third party announces in accordance with Rule 2.7 of the
Code a firm intention to make or makes a competing offer (howsoever
structured) without preconditions where the consideration is
payable entirely in cash on terms which represent an improvement of
10 per cent. or more on the value of the consideration offered
under the Acquisition as at the date on which such competing offer
is announced unless CGI Europe has announced an improvement to the
terms of the Acquisition within seven days of such competing offer
being made such that the terms of the improved Acquisition are at
least as favourable as under the competing offer.
APPENDIX IV LOGICA INTERIM MANAGEMENT STATEMENT
Logica reiterates full year guidance with its first quarter
results
At its Annual General Meeting being held today, Logica will
comment on trading for the first quarter of 2012. The following is
the interim management statement based on unaudited results for the
three months ended 31 March 2012.
Headlines(1)
-- New orders totalling GBP1,057 million, 23% of 2011 record order book of GBP4.6 billion
-- Revenue stable at 2011 level
-- Good progress on delivering our 2012 objectives
-- Restructuring programme fully on track
-- Full year guidance remains unchanged
(1) Unless otherwise stated, all headline numbers relate to pro
forma numbers as defined on page 8.
Three months to March Three months to March
------------------------------------------------------- ----------------------------- ------------------------
GBPm 2012 2011 Change 2011 Change
Pro forma Actual
------------------------------------------------------- ------ ----------- -------- ------------ ----------
Orders 1,057 1,393 (24)% 1,399 (24)%
------------------------------------------------------- ------ ----------- -------- ------------ ----------
Revenue 971 974 0% 978 (1)%
------------------------------------------------------- ------ ----------- -------- ------------ ----------
Outsourcing backlog 2,513 2,623 (4)% 2,615 (4)%
------------------------------------------------------- ------ ----------- -------- ------------ ----------
Consulting and Professional Services book to bill (%) 108 114 n.a. 114 n.a.
------------------------------------------------------- ------ ----------- -------- ------------ ----------
Commenting on today's announcement, Andy Green, CEO, said:
"This is a solid performance underpinning our full year
guidance. We have made good progress with clients in delivering
against current contracts as well as winning and implementing new
business. Our restructuring actions are fully on track and will
help drive improvement in profitability in the second half."
Outlook
Our full year revenue and margin guidance remains unchanged
despite our expectation of a subdued second quarter given the
impact of elections in several countries and a cautious economic
outlook for our main markets. Full year revenue growth is expected
to be in the range of -2% to +2% and we expect our full year 2012
operating margin to be above 6.5% even in tough market
conditions.*
We have made good progress with our restructuring programmes in
the Benelux, Sweden and Infrastructure Management (IM). We continue
to expect to see the savings of GBP25 to GBP35 million coming
through, largely in the second half of the year.
We expect to deliver against our key 2012 objectives. Our
Benelux business will return to profit in 2012; our Swedish
business will deliver an improved margin and our IM business will
be strongly competitive going forward.
Net debt/EBITDA at the end of 2012 is expected to be around
1.0x, after the expected cash impact of the restructuring of
between GBP60 to GBP70 million (the bulk of which will be in the
first half).
* See Profit Forecast report in Appendix V for Logica plc for
the year ending 31 December 2012
Progress on execution and control
Our continued focus on strengthening delivery assurance and our
contract accounting Centre of Excellence are aimed at ensuring that
we implement projects successfully for our clients, resolve issues
as they arise and take a prudent view on contracts, to allow us to
deliver high quality earnings. We are making good progress in fully
embedding the processes across the organisation.
Progress with clients
Our progress with clients continues to be based on delivering
against current contracts as well as winning and implementing new
business. We are seeing a wide spread of smaller and medium sized
orders in the pipeline with good opportunities in the Public Sector
and Transport, Trade and Industrial (TTI).
We continue to deliver well against longer term contracts like
the Crown Prosecution Service where our work successfully
implementing case management reached its tenth year. Q1 also marked
the first anniversary of our major contracts with Shell and SOCA,
with transition completed on both contracts.
Our new orders in the quarter totalled GBP1,057 million, against
a record order book in the first quarter of last year (Q1 2011:
GBP1,393 million) when we signed a number of long term Outsourcing
contracts.
Progress on labour
The increase in employee numbers over the last twelve months to
41,267 (Q1 2011:39,864) was due to the addition of 1,200 through
the Grupo Gesfor acquisition in May 2011.
Growth in headcount in our offshore centres over the last year
was 24%, with approximately 7,300 in these centres at the end of
March (Q1 2011: 5,900). We have now reached 1,000 employees in the
Philippines, a 40% increase since the first quarter of 2011.
With attrition running at around 13% (Q1 2011:14%), we are
continuing to recruit in areas of high demand across most of our
markets.
The restructuring programme announced on 14 December 2011 is
fully on track.
Service line performance
Outsourcing
Three months to March
------------------------------ --------------------------
GBPm 2012 2011 Change
------------------------------ ------- ------- --------
Backlog at end of period 2,513 2,623 (4)%
Orders 448 749 (40)%
Revenue 407 409 0%
------------------------------ ------- ------- --------
Orders by type 2012 2011 Change
Applications Management (AM) 186 302 (38)%
Infrastructure Management
(IM) 212 267 (21)%
Business Process Outsourcing
(BPO) 50 180 (72)%
------------------------------ ------- ------- --------
Revenue by type 2012 2011 Change
------------------------------ ------- ------- --------
Applications Management (AM) 196 211 (7)%
Infrastructure Management
(IM) 166 155 7%
Business Process Outsourcing
(BPO) 45 43 5%
------------------------------ ------- ------- --------
Orders in the quarter were GBP448 million (Q1 2011: GBP749
million), reflecting the uneven nature of contract awards in this
part of the business and the strong order performance in Q1
2011.
We signed a seven-year BPO contract for meter-2-cash and
customer management services for Danish utility Tre-for. During the
quarter we also signed new contracts with Energy and Utilities and
Trade, Transport and Industrial clients in France. Since the end of
the quarter we signed a five-year managed services contract with
Queensland Rail worth AUD $33 million (GBP21 million) to transition
and manage the State-owned rail company's newly-established ICT
infrastructure platform.
Revenue for the quarter was stable on 2011 at GBP407 million, as
we have reached a steady state of delivery into a number of
significant contracts in Northern and Central Europe and Sweden. In
the first quarter of 2011 we also saw the implementation of various
Applications Management contracts in France.
Consulting and Professional Services
Three months to March
---------------- --------------------------
GBPm 2012 2011 Change
----------------
Book to bill % 108 114 n.a.
Orders 609 644 (5)%
Revenue 564 565 0%
---------------- ------- ------ ---------
Book to bill remains strong at 108% (Q1 2011: 114%), with a good
level of orders signed particularly in Northern and Central Europe.
This was partially offset by weaker performances in the UK and
Sweden.
Consulting and Professional Services revenue showed a resilient
performance - flat at GBP564 million (Q1 2011: GBP565 million).
Segmental performance
France
Three months to
March
----------------------------- ---------------------
GBPm 2012 2011 Change
----------------------------- ----- ----- -------
Orders 240 222 8%
Consulting and Professional
Services book to bill % 96 103 n.a.
Revenue 217 219 (1)%
----------------------------- ----- ----- -------
Order intake for the first quarter was strong, up 8% on the
first quarter of last year, with good performance in the
Outsourcing business, particularly with our Trade, Transport and
Industrial clients. During the quarter we also renewed a series of
contracts with Energy and Utilities clients.
As anticipated, Consulting and Professional Services book to
bill was below 2011 as a result of the uncertainty surrounding the
French elections and slow decision making in Financial
Services.
Revenue was down 1% to GBP217 million, as a result of lower
utilisation than Q1 2011. This expected slowdown in activity was
against a very strong start in 2011, when we implemented a number
of important Applications Management contracts.
Northern and Central Europe
Three months to
March
----------------------------- ---------------------
GBPm 2012 2011 Change
----------------------------- ----- ----- -------
Orders 340 241 41%
Consulting and Professional
Services book to bill % 162 132 n.a.
Revenue 210 206 2%
----------------------------- ----- ----- -------
Order intake saw a 41% increase on the first quarter of last
year, primarily driven by orders signed in Denmark and a number of
small wins in Finland and Germany.
Consulting and Professional Services book to bill was very
strong at 162%.
We signed contracts with Finnish energy and utilities providers
Savon Voima and Tripower, using Microsoft Dynamics in order to
increase the range of services available online and allowing their
customers to react faster to changes in the energy market. In
Germany we signed a four-year Applications Management contract with
Barmer GEK, the largest statutory health insurer in the country for
the development, test and support of their operational application
systems.
Revenue for the quarter was up 2% to GBP210 million, with growth
in Energy and Utilities and Financial Services offsetting a weaker
performance in Transport, Trade and Industrial and Telecoms.
UK
Three months to
March
----------------------------- ---------------------
GBPm 2012 2011 Change
----------------------------- ----- ----- -------
Orders 101 515 (80)%
Consulting and Professional
Services book to bill % 74 101 n.a.
Revenue 191 179 7%
----------------------------- ----- ----- -------
Total orders in the first quarter were GBP101 million (2011 Q1:
GBP515 million).
Total order intake and Consulting and Professional Services book
to bill were down on a very strong first quarter in 2011,
reflecting the uneven nature of contract awards in an
Outsourcing-led business on the back of previously disclosed
contracts with the Serious Organised Crime Agency (SOCA) and Shell.
Excluding these orders, the underlying order performance was 5%
down year on year.
Revenue was up 7% to GBP191 million with good performance in
both Outsourcing and Consulting and Professional Services. System
design and third party implementation work under our major
contracts with Shell and SOCA, together with good growth in Energy
and Utilities and the Public Sector drove the strong performance
year on year.
Sweden
Three months to
March
----------------------------- ---------------------
GBPm 2012 2011 Change
----------------------------- ----- ----- -------
Orders 159 159 0%
Consulting and Professional
Services book to bill % 68 127 n.a.
Revenue 154 155 (1)%
----------------------------- ----- ----- -------
Order intake was GBP159 million, in line with the first quarter
of last year. The increase of new Outsourcing orders signed was
offset by a slow start to the year in Consulting and Professional
Services.
Revenue was down 1% on 2011 at GBP154 million, with commercial
sectors down 2% as a result of the weaker demand in Financial
Services and Telecoms.
We have made good progress on implementing the restructuring
programme. We continue to expect this to contribute to improved
margin in Sweden.
Our expectation of second half growth is based on a solid longer
term pipeline and backlog despite continued softness in shorter
term work.
Benelux
Three months to
March
----------------------------- ---------------------
GBPm 2012 2011 Change
----------------------------- ----- ----- -------
Orders 113 169 (33)%
Consulting and Professional
Services book to bill % 101 97 n.a.
Revenue 111 118 (6)%
----------------------------- ----- ----- -------
New orders signed in the quarter totalled GBP113 million and
included a new case management project with the European Patent
Office and a new SEPA win with a large Dutch financial services
client.
The 33% decrease in orders was against a strong first quarter of
2011 when we won an EUR80 million (GBP66 million) Outsourcing
contract with an important Dutch client.
Revenue was down 6% to GBP111 million as a result of weakness in
the Financial Services sector.
The restructuring programme is on track with the majority of
exits expected in the second and third quarters of the year. We
remain confident that this will result in a return to profitability
in 2012.
International
Three months to
March
----------------------------- ---------------------
GBPm 2012 2011 Change
----------------------------- ----- ----- -------
Orders 104 87 20%
Consulting and Professional
Services book to bill % 110 122 n.a.
Revenue 88 97 (9)%
----------------------------- ----- ----- -------
We saw a strong start of the year in orders, up 20% on 2011 as a
result of Outsourcing contract wins in our Australian business.
Revenue was down 9% against the first quarter of 2011. The
phasing of new Australian contracts and the ramp down of growth in
Brazil under a number of contracts slowed revenue in the quarter,
despite good growth in North America.
Since the end of the quarter we also signed a five-year managed
services contract with Queensland Rail worth AUD $33 million (GBP21
million) to transition and manage the State-owned rail company's
newly-established ICT infrastructure platform.
The new orders signed in the quarter will be significant
contributors to returning the cluster back to revenue growth in the
second half.
Financial position
Net debt/EBITDA at the end of 2012 is expected to be around
1.0x, after the expected cash impact of the restructuring of
between GBP60 to GBP70 million (the bulk of which will be in the
first half).
As disclosed in the 2011 Annual Report and Accounts, the Group
received a EUR59 million VAT claim from French tax authorities in
2009. This claim related to the VAT treatment of goods exported
from France during the years 2004 to 2006. The Administrative Court
of Montreuil has now rendered an adverse ruling on the claim and
Logica is required to make a cash payment of EUR59 million to the
French tax authorities, which includes penalties and interest.
The Group continues to consider this claim without merit and is
exercising its right to appeal, including challenging the demand
for payment through the appropriate channels. This is likely to
result in a protracted legal process.
APPENDIX V LOGICA PROFIT FORECAST
PART A: PROFIT FORECAST FOR LOGICA PLC FOR THE FINANCIAL YEAR
ENDING 31 DECEMBER 2012
1. GENERAL
Logica made the following public announcement on 11 May 2012
within its first quarter earning release:
"Our full year revenue and margin guidance remains unchanged
despite our expectation of a subdued second quarter given the
impact of elections in several countries and a cautious economic
outlook for our main markets. Full year revenue growth is expected
to be in the range of -2% to +2% and we expect our full year 2012
operating margin to be above 6.5% even in tough market
conditions."
In the above statement, full year revenue growth relates to the
anticipated revenue growth for the financial year ended 31 December
2012 compared with the reported revenue for the financial year
ending 31 December 2011 reported in Logica's 2011 Annual Report and
Accounts adjusted for acquisitions ("pro-forma revenue") and
rebased to 2012 average exchange rates. Operating margin is defined
as the operating margin adjusted for depreciation and amortisation
of intangibles, exceptional items and for the effect of
acquisitions and disposals.
The guidance given on 11 May 2012 set an expectation of an
adjusted operating profit higher than GBP253 million based on a
GBP/EUR exchange rate for 2011 of GBP1: EUR1.15. The actual profit
in a situation where the minimum guidance of minus 2% revenue and
margin of 6.5% was achieved will depend on the actual exchange
rates. Assuming an average exchange rate of GBP1: EUR1.23, the
expectation of full year operating profit, before exceptional
items, would be higher than GBP242 million.
The above statement "the expectation of full year operating
profit, before exceptional items, would be higher than GBP242
million,"* for the financial year ending 31 December 2012
constitutes a profit forecast for the purposes of the Code. The
Logica Directors have considered and reconfirm the Logica Profit
Forecast.
2. BASIS OF PREPARATION
The Logica Profit Forecast has been prepared on a basis
consistent with the accounting policies for Logica, which are in
accordance with IFRS and those which Logica anticipates will be
applicable for the full year ending 31 December 2012.
The Logica Directors have prepared the Logica Profit Forecast
based on the unaudited management accounts for the 4 month period
from 1 January 2012 to 30 April 2012 and a forecast of the results
for the 8 month period ending 31 December 2012.
3. ASSUMPTIONS
The Logica Directors have prepared the Logica Profit Forecast on
the basis of the following assumptions:
3.1 Factors outside the influence or control of Logica Directors
-- There will be no material change to existing prevailing
global, and in particular European, macroeconomic and political
conditions during the year ending 31 December 2012.
-- There will be no material changes in market conditions within
the European IT services industry over the 8 month forecast period
to 31 December 2012 in relation to either customer demand or
competitive environment.
-- The announcement of the proposed acquisition of Logica by CGI
will not result in any material changes to Logica's obligations to
clients, its ability to negotiate new business, resolve contract
disputes or to the retention of key management.
-- The Euro and Rupee exchange rates, and inflation and tax
rates in Logica's principal markets will remain materially
unchanged from the prevailing rates.
-- There will be no material change in Logica's labour costs,
including medical and pension and other post-retirement benefits
driven by external parties or regulations.
-- There will be no material adverse events that will have a
significant impact on Logica's financial performance
-- There will be no material change in legislation or regulatory
requirements impacting on Logica's operations or its accounting
policies.
3.2 Factors within the influence or control of the Logica Directors
-- Current contract negotiations with a number of clients will
conclude materially as the Logica Directors would reasonably expect
based on Logica's past experience.
-- No material new client contract issues will arise beyond
those that are already known to the Logica Directors at the current
time and built into the forecasts.
-- The Logica Profit Forecast excludes any exceptional
transaction and transition costs associated with the proposed
acquisition of Logica by CGI.
-- There will be no material acquisitions or disposals of
businesses during the financial year ending 31 December 2012.
-- There will be no material change in the present management or
control of Logica or its existing operational strategy.
The Logica Directors who are solely responsible for the Logica
Profit Forecast have received the following letters from
PricewaterhouseCoopers, Rothschild, Deutsche Bank and Bank of
America Merrill Lynch relating to the Logica Profit Forecast.
PART B: PWC LETTER
The Directors
Logica PLC
250 Brook Drive Green Park Reading, RG2 6UA
N M Rothschild & Sons Limited
New Court
St Swithin's Lane
London
EC4N 8AL
Merrill Lynch International
2 King Edward Street
London
EC1A 1HQ
Deutsche Bank AG, London Branch
Winchester House
1 Great Winchester Street
London
EC2N 2DB
31 May 2012
Dear Sirs
Logica PLC
We report on the profit forecast comprising the statement by
Logica PLC (the "Company") and its subsidiaries (together the
"Group") for the year ending 31 December 2012: "the expectation of
full year operating profit, before exceptional items, would be
higher than GBP242 million." (the "Profit Forecast"). The Profit
Forecast and the material assumptions upon which it is based, are
set out in Part A of Appendix V of the joint announcement issued by
the Company and CGI Holdings Europe Limited (a wholly owned
subsidiary of CGI Group Inc.) ("CGI") under Rule 2.7 of the City
Code on Takeovers and Mergers issued by the Panel on Takeovers and
Mergers (the "City Code") dated 31 May 2012 (the "Rule 2.7
Announcement").
This report is required by Rule 28.3(b) of the City Code and is
given for the purpose of complying with that rule and for no other
purpose. Accordingly, we assume no responsibility in respect of
this report to CGI or any other person connected to, or acting in
concert with, CGI or to any other person who is seeking or may in
future seek to acquire control of the Company (an "Alternative
Offeror") or to any other person connected to or acting in concert
with an Alternative Offeror.
Responsibilities
It is the responsibility of the directors of the Company (the
"Directors") to prepare the Profit Forecast in accordance with the
requirements of the City Code.
It is our responsibility to form an opinion as required by Rule
28.3(b) of the City Code as to the proper compilation of the Profit
Forecast and to report that opinion to you.
Save for any responsibility which we may have to those persons
to whom this report is expressly addressed and to the shareholders
of the Company and for any responsibility arising under Rule
28.3(b) of the City Code to any person as and to the extent therein
provided, to the fullest extent permitted by law we do not assume
any responsibility and will not accept any liability to any other
person for any loss suffered by any such other person as a result
of, arising out of, or in connection with this report or our
statement, required by and given solely for the purposes of
complying with Rule 28.4 of the City Code, consenting to its
inclusion in the Rule 2.7 Announcement.
Basis of Preparation of the Profit Forecast
The Profit Forecast has been prepared on the basis stated in
Part A of Appendix V of the Rule 2.7 Announcement and is based on
the unaudited management accounts for the four months ended 30
April 2012 and a forecast to 31 December 2012. The Profit Forecast
is required to be presented on a basis consistent with the
accounting policies of the Group.
Basis of Opinion
We conducted our work in accordance with the Standards for
Investment Reporting issued by the Auditing Practices Board in the
United Kingdom. Our work included evaluating the basis on which the
historical financial information included in the Profit Forecast
has been prepared and considering whether the Profit Forecast has
been accurately computed based upon the disclosed assumptions and
the accounting policies of the Group. Whilst the assumptions upon
which the Profit Forecast are based are solely the responsibility
of the Directors, we considered whether anything came to our
attention to indicate that any of the assumptions adopted by the
Directors which, in our opinion, are necessary for a proper
understanding of the Profit Forecast have not been disclosed or if
any material assumption made by the Directors appears to us to be
unrealistic.
We planned and performed our work so as to obtain the
information and explanations we considered necessary in order to
provide us with reasonable assurance that the Profit Forecast has
been properly compiled on the basis stated.
Since the Profit Forecast and the assumptions on which it is
based relate to the future and may therefore be affected by
unforeseen events, we can express no opinion as to whether the
actual results reported will correspond to those shown in the
Profit Forecast and differences may be material.
Opinion
In our opinion, the Profit Forecast has been properly compiled
on the basis of the assumptions made by the Directors and the basis
of accounting used is consistent with the accounting policies of
the Group.
Yours faithfully
PricewaterhouseCoopers LLP
Chartered Accountants
PART C: RULE 3 FINANCIAL ADVISERS' LETTER
Merrill Lynch International Deutsche Bank AG, London N M Rothschild & Sons
2 King Edward Street Branch Limited
London EC1A 1HQ Winchester House New Court,
1 Great Winchester St Swithin's Lane,
Street London EC4N 8AL
London EC2N 2DB
Authorised and regulated
by the Financial Services Authorised under German Authorised and regulated
Authority Banking Law (competent by the Financial Services
authority: BaFin - Authority
Federal
Financial Supervisory
Authority) and authorised
and subject to limited
regulation by the UK
Financial Services
Authority
To:
The Board of Directors
Logica Plc.
250 Brook Drive
Green Park
Reading, RG2 6UA
31 May 2012
Dear Sirs
REPORT ON THE PROFIT FORECAST OF LOGICA PLC (THE "COMPANY")
We refer to the profit forecast made by the Company, being the
statement made by the Company that the expectation of full year
operating profit, before exceptional items, would be higher than
GBP242m (the "Profit Forecast").
We have discussed the Profit Forecast and the bases and
assumptions on which it is made with you and with
PricewaterhouseCoopers LLP, the Company's reporting accountants. We
have also discussed the accounting policies and bases of
calculation for the Profit Forecast with you and with
PricewaterhouseCoopers LLP. We have also considered the letter
dated the same date as above from PricewaterhouseCoopers LLP
addressed to you and to us on these matters. We have relied upon
the accuracy and completeness of all the financial and other
information discussed with us and have assumed such accuracy and
completeness for the purposes of providing this letter. You have
confirmed to us that all information relevant to the Profit
Forecast has been disclosed to us.
On the basis of the foregoing, we consider that the Profit
Forecast, for which you, as directors of the Company are solely
responsible, has been made with due care and consideration.
This letter is provided to you solely in connection with Rule
28.3(b) and Rule 28.4 of the City Code on Takeovers and Mergers and
for no other purpose. No person other than the directors of the
Company can rely on the contents of this letter and to the fullest
extent permitted by law, we exclude all liability to any other
person other than to you, the directors of the Company, in respect
of this letter or the work undertaken in connection with this
letter.
We have given and have not withdrawn our respective consents to
the publication of this letter accompanying the Profit
Forecast.
Yours faithfully,
Merrill Lynch International Deutsche Bank AG, London N M Rothschild & Sons
Branch Limited
APPENDIX VI LOGICA SHARE SCHEMES AND OTHER INCENTIVE MATTERS
Logica Share Schemes
Options and awards granted under the Logica Share Schemes which
are not already exercisable or vested will become exercisable or
will vest as a result of the Acquisition. Letters will be sent to
the participants in the Logica Share Schemes explaining the effect
of the Scheme on their share options and awards.
All Logica Shares issued or transferred on the exercise of
options or vesting of awards under the Logica Share Schemes before
the relevant record date for the Scheme ("Scheme Record Time") will
be subject to the terms of the Scheme. The Scheme will not extend
to Logica Shares issued after the Scheme Record Time. However, it
is proposed to amend the articles of association of Logica at the
General Meeting to provide that, if the Scheme becomes effective,
any Logica Share issued or transferred after the Scheme Record Time
will be automatically transferred to CGI in consideration for the
payment by CGI of 105 pence in cash for each Logica Share so
transferred.
The Logica 2005 Sharesave Scheme and Logica 2005 International
Sharesave Scheme (together the Logica Sharesave Schemes)
Options granted under the Logica Sharesave Schemes will be
exercisable for a period of six months following the Effective Date
(as the board of Logica has exercised its power to extend the
exercise period beyond the basic one month specified in the plan
rules). These options will only be exercisable to the extent of
savings made under the related savings contract at the time of
exercise together with any accrued interest or bonus due.
CGI Europe intends to offer compensation to certain participants
in the Logica Sharesave Schemes who exercise their options in the
six month period following the Effective Date in recognition of the
early exercise of their options. The compensation payable will be
equal to the gain (that is 105 pence per Logica Share minus the
relevant exercise price) for each additional Logica Share the
participant would have received had he/she continued saving for an
additional period of 12 months from the Effective Date or, if
shorter, until the maturity of his/her savings contract. The
options to which this compensation proposal relates are those
granted in 2010 at an exercise price of 96 pence per share and
those granted in 2012 at an exercise price of 71 pence per
share.
Options under the Logica Sharesave Schemes will cease to be
exercisable after the date falling six months after the Effective
Date but participants may continue to hold their options and,
subject to the rules of the Logica Sharesave Schemes, exercise
those options on the maturity of the related savings contract.
Participants who choose to do this will not be entitled to the
compensation payment described above.
Logica Employee Share Matching Plan
Under this all-employee plan, participants' rights to free
matching shares will be exercisable over the full number of Logica
Shares under the award at the time of the Acquisition. Participants
would continue to have a right to exercise at a later date, but as
they would have disposed of the underlying invested shares, the
number of matching free shares would be reduced on a pro-rata
basis.
Logica Executive Share Plans
The Executive Share Plans comprise the Restricted Share Plan
("RSP"), the Partners' Incentive Plan ("PIP"), the Partners'
Performance Multiplier Plan ("PPMP"), the Deferred Investment Share
Plan ("DISP") and the Long Term Incentive Plan ("LTIP").
Outstanding awards under the Executive Share Plans would normally
vest at various dates up to mid-2015. The number of Logica Shares
which may be released to participants on vesting of the awards is,
under certain plans, determined by the extent to which applicable
performance conditions are satisfied. These awards will vest
immediately on completion of the Acquisition to the extent that the
Logica Remuneration Committee (the "Committee") determines, subject
to the rules of each of the plans.
In the case of the RSP, PIP and PPMP, the Committee has broad
discretion to determine vesting levels, having regard to factors
including any performance conditions and time elapsed. To encourage
the retention of senior executives and management of Logica
(including the Logica Executive Directors), and with the agreement
of CGI Europe, the Committee will exercise its discretions under
these plans so that:
(a) 50 per cent. of each participant's aggregate share awards
under these plans will vest on the sanction of the Scheme and
become due on the Effective Date. The relevant number of Logica
Shares will be acquired by participants at that time and
subsequently would be acquired, by CGI Europe under the Scheme and
the relevant cash proceeds paid to participants, subject to the
participant's right to elect to receive the cash proceeds on 30
April 2013 instead; and
(b) the balance of 50 per cent. of the Logica Shares under these
aggregate awards would vest and be satisfied in equal amounts on 31
May 2013 and 31 January 2014. Vesting of each tranche of shares
would be dependent on the participant remaining in service until
the stated date, or if he/she has ceased employment, the
participant not having ceased employment through resignation (other
than constructive dismissal) or dismissal for cause (defined by
reference to the participant's terms of employment as in force on 1
May 2012). In the event of a participant's cessation of employment
where entitlement to vesting of an award is preserved, such award
will vest on the cessation date and payment in respect of that
award will be made no later than 14 days after the date of
cessation.
In the case of the DISP and LTIP, the Committee is unlikely to
be able to determine that any material number of Logica Shares will
vest on the Acquisition. In relation to these plans, CGI Europe has
agreed to make a cash payment equal to the amount due on full
vesting of the Logica Shares under these awards (or will procure
that Logica makes such a payment). The payment will be made in
three instalments on the same basis as payment under the other
Executive Share Plans as set out in (a) and (b) above. Likewise,
entitlement to the May 2013 and January 2014 instalments would be
subject to the same employment-related conditions as set out in (b)
above. This arrangement relates to an aggregate of 3,282,600 Logica
Shares (having a value of GBP3.57 million at the Acquisition
price), of which 569,539 (GBP620,797) relate to Andy Green and
374,522 (GBP408,229) relate to Himanshu Raja. Rothschild, Bank of
America Merrill Lynch and Deutsche Bank each consider these
proposals to be fair and reasonable.
Logica 1996 Executive Share Option Scheme
Options granted under the scheme are already exercisable and
will remain exercisable, subject to the rules of the scheme, until
the tenth anniversary of the relevant option grant date.
Other incentive matters
In relation to the service contracts of the Logica Executive
Directors and the seven other persons comprising the Logica
Executive Committee, CGI Europe has agreed that if any of those
individuals is dismissed (or constructively dismissed) before 31
January 2014 his service contracts will be honoured without
mitigation and with contractual payments in lieu of notice being
made at the time of their cessation of employment.
In relation to bonuses for the 2012 financial year, Logica and
CGI Europe have agreed that the Logica Executive Directors and
Logica Executive Committee members will, at the time of completion
of the Acquisition, be paid "at target" bonuses prorated to reflect
the duration of the 2012 financial year up to closing.
The arrangements in relation to service contracts and 2012
bonuses for Logica's Executive Directors and Executive Committee
members have been implemented with CGI Europe's agreement in order
to ensure that Logica's senior team remains focused on ensuring
stability in the business at a potentially unsettling time for
clients, employees and other stakeholders.
Rothschild, Bank of America Merrill Lynch and Deutsche Bank each
consider these proposals to be fair and reasonable.
APPENDIX VII FURTHER DETAILS ON THE EQUITY FINANCING
ARRANGEMENTS
Subscription Agreement and Subscription Receipt Agreement
Pursuant to the Subscription Agreement, CDP has subscribed for
46,707,146 Subscription Receipts, at a price of C$21.41 per
Subscription Receipt, for aggregate gross proceeds of
C$999,999,995.86. The aggregate subscription price is held in
escrow by the Subscription Receipt Agent in accordance with the
Subscription Receipt Agreement. The subscription has been made on a
prospectus exempt basis under applicable Canadian law.
Pursuant to the Subscription Receipt Agreement, the Subscription
Receipts will be automatically exchanged, without additional
payment, for Class A subordinate voting shares of CGI ("CGI
Shares") on a one-for-one basis, and the aggregate subscription
price for the Subscription Receipts will be released by the
Subscription Receipt Agent to CGI immediately prior to completion
of the Acquisition, subject to the satisfaction or waiver of the
following conditions:
-- that except to the extent required by the Code, the Panel,
the Court, or any other applicable law, regulation or regulatory
body, the Conditions shall have been satisfied without amendment or
without being waived, except for any amendment or waiver that is
not material and does not have a material adverse effect on the
interest of holders of Subscription Receipts;
-- that there shall have been no increase in the price per share
payable in the Acquisition;
-- that the Debt Financing Agreements shall not have been
amended or waived, except as contemplated therein or for any
amendment or waiver that is not material and does not have a
material adverse economic effect on the Debt Financing;
-- that certain specified material representations and
warranties of CGI set out in the Subscription Agreement shall not
have ceased to be true and accurate in all material respects;
and
-- that CGI shall have obtained all requisite consents, waivers
and authorizations required by the competent authorities, including
regulatory and stock exchange authorities, in relation to the
issuance of the underlying CGI Shares.
If these conditions are not satisfied or waived on or prior to
the date that is 180 days following the date of the Subscription
Receipt Agreement (27 November 2012), or if the Acquisition lapses
or is withdrawn, then the Subscription Receipts will be
automatically terminated and cancelled, and the aggregate
subscription price plus accrued interest will be returned by the
Subscription Receipt Agent to the holders of Subscription
Receipts.
The Subscription Agreement contains customary representations
and warranties by CDP to CGI and an indemnity from CDP in favour of
CGI in respect of breaches of covenants or representations and
warranties by CDP. The Subscription Agreement also contains
customary representations and warranties by CGI to CDP and an
indemnity from CGI in favour of CDP in respect of breaches of
covenants or representations and warranties by CGI and in respect
of orders, investigations or other proceedings prohibiting,
restricting or materially affecting the trading or distribution of
the Subscription Receipts or underlying CGI Shares. The
representations, warranties and indemnities will be in effect for a
period of two years following completion of the Acquisition, except
for customary exceptions for tax matters and in the case of
fraud.
Under the Subscription Agreement, CDP has reserved the right to
syndicate a portion of its participation in the Subscription
Receipts to reduce its ownership or control over CGI Shares to
below 20 per cent. (on a non-diluted basis), taking into account
the Subscription Receipts and the CGI Shares already owned or
controlled by CDP, and CGI has undertaken to cooperate with CDP and
provide all required documentation, at CDP's expense, to ensure the
success of such syndication. In the event that such syndication is
completed prior to or concurrently with closing of the Acquisition,
CGI will participate in the selection process of the syndicate
members to reasonably ensure the profile and financial capacity of
the potential investor.
The Subscription Agreement provides that, for the period prior
to the completion of the Acquisition, CGI has undertaken to send to
CDP a copy of any agreement relating to the subscription to
Subscription Receipts for CGI Shares (or securities convertible
into CGI Shares) by any investor other than CDP within five days of
such subscription. To the extent that the terms and conditions
offered to such other investor are more advantageous, CDP has
reserved the right to require the same terms and conditions by
written notice to CGI within five days of receipt of the relevant
subscription agreement.
The Subscription Agreement also provides that, for the period
prior to completion of the Acquisition, CGI will notify CDP, for
information purposes only and without thereby conferring any right
on CDP, as soon as possible of the occurrence of any material
adverse change, to the knowledge of CGI, affecting CGI, Logica, the
Acquisition, or the Debt Financing, in each case, subject to any
confidentiality obligation of CGI.
Pursuant to the Subscription Agreement, CGI will reimburse, up
to an aggregate maximum amount of C$100,000, the fees and expenses
incurred by CDP in connection with the Subscription Agreement,
including reasonable fees and disbursements of legal counsel.
Registration Rights Agreement
Pursuant to the Subscription Agreement, CGI and CDP have agreed
to enter into the Registration Rights Agreement prior to or at
completion of the Acquisition.
Pursuant to the Registration Rights Agreement, CDP will have the
right, as long as it beneficially owns or exercises control or
direction over 15 per cent. or more of the outstanding CGI Shares,
to recommend to CGI one nominee to be part of any slate proposed by
CGI and included in a proxy circular relating to the election of
directors of CGI, provided that the CDP nominee shall have no
material relationship with CGI or CDP, that he/she shall be
eligible to serve as a director under CGI's laws of incorporation
and articles and that his/her nomination shall be subject to a
favourable recommendation of the Corporate Governance Committee of
CGI's Board of directors.
The Registration Rights Agreement will provide that CDP will be
entitled, at any time and from time to time, as long as it
beneficially owns or exercises control or direction over 20 per
cent. or more of all outstanding CGI Shares, to require CGI to file
a Canadian prospectus and take such other steps as may be
reasonably necessary to facilitate a secondary offering in Canada,
at CDP's expense, the whole upon the terms and conditions set forth
in the Registration Rights Agreement.
In addition, if CGI proposes to make a distribution in Canada
for its own account or if an existing shareholder proposes to make
a distribution in Canada through a secondary offering, CGI will be
required, at that time, upon request by CDP, provided that it
beneficially owns or exercises control or direction over 15 per
cent. of the outstanding CGI Shares, use commercially reasonable
efforts to cause to be included in such distribution the CGI Shares
that CDP has requested to be included, up to a maximum of 15 per
cent. of the CGI Shares to be offered in such distribution, with
expenses to be shared on a pro rata basis, the whole upon the terms
and conditions set forth in the Registration Rights Agreement.
The Registration Rights Agreement will provide that, in
connection with any prospectus-exempt sale by CDP in Canada or in
the US, CGI will be required to use commercially reasonable
efforts, at CDP's expense, to assist CDP and its representatives in
the preparation of the required documentation and to allow any
prospective buyer to conduct reasonable due diligence on CGI.
If CGI proposes to file a registration statement for the
distribution of CGI Shares to the public in the United States, CDP
and CGI will, prior to such distribution taking place, supplement
the Registration Rights Agreement so as to provide CDP with
registration rights enabling distribution of CGI Shares to the
public in the United States. that are substantially equivalent to
the registration rights that will be provided under the
Registration Rights Agreement.
APPENDIX VIII DEFINITIONS
The following definitions apply throughout this announcement
unless the context requires otherwise.
"2006 Act" the UK Companies Act 2006, as amended;
"Acquisition" the acquisition by CGI Europe of the
entire issued and to be issued ordinary
share capital of Logica at a price
of 105 pence per Logica Share to be
effected by means of the Scheme (or,
subject to the consent of the Panel,
a Takeover Offer) including, where
the context so requires, any subsequent
variation, revision, extension or
renewal thereof;
"Amended Logica Articles" the articles of association of Logica
as at the Announcement Date, as amended
to include provisions, in terms approved
by CGI Europe, that avoid any person
(other than CGI Europe or its nominee(s))
remaining as a holder of Logica Shares
after the Effective Date, such proposed
amendments to be set out in full in
the notice of the General Meeting
in the Scheme Document;
"Announcement Date" 31 May 2012;
"Annual Report" the annual report and accounts of
Logica for the year ended 31 December
2011;
"Artemis" Artemis Investment Management LLP;
"Authorisations" regulatory authorisations, orders,
recognitions, grants, consents, clearances,
confirmations, certificates, licences,
permissions or approvals;
"Backstop Revolving Credit has the meaning given to it in paragraph
Facility" 12 of this Announcement;
"Bank of America Merrill Merrill Lynch International, a subsidiary
Lynch" of Bank of America Corporation;
"Business Day" a day (other than Saturdays, Sundays
and public holidays) on which banks
are open for business in London, United
Kingdom and Montreal, Canada;
"CGI" CGI Group Inc., a company incorporated
in the Province of Quebec, Canada;
"CGI Europe" CGI Group Holdings Europe Limited,
a company incorporated in England
and Wales and a wholly-owned subsidiary
of CGI;
"CGI Group" CGI, its subsidiaries and subsidiary
undertakings;
"CGI Shares" has the meaning given to it in paragraph
12 of this Announcement;
"CDP" Caisse de depot et placement du Quebec;
"CIBC" Canadian Imperial Bank of Commerce;
"Capital Reduction" the reduction of Logica's share capital
under Section 648 of 2006 Act provided
for in connection with the Scheme;
"Close of Business" 6.00 p.m. of a relevant Business Day;
"Closing Price" the middle market price of a Logica
Share at the close of business on
the day to which such price relates,
as derived from the Daily Official
List of the London Stock Exchange
for that day or from Bloomberg in
the case of average Closing Prices
for certain periods to which such
average relates to;
"Code" the City Code on Takeovers and Mergers;
"Conditions" the Conditions to the Acquisition,
as set out in Appendix I of this announcement
and to be set out in the Scheme Document;
"Council Regulation" Council Regulation (EC) 139/2004,
as amended;
"Court" the High Court of Justice in England
and Wales;
"Court Meeting" the meeting of Scheme Shareholders
(and any adjournment thereof) to be
convened pursuant to an order of the
Court under Part 26 of the 2006 Act
for the purposes of considering and,
if thought fit, approving the Scheme
(with or without amendment);
"Court Orders" the orders of the Court sanctioning
the Scheme and confirming the related
Capital Reduction;
"Credit Agreement" has the meaning given to it in paragraph
12 of this Announcement;
"CREST" a relevant system (as defined in the
Regulations) in respect of which Euroclear
is the Operator (as defined in the
Regulations);
"Daily Official List" the daily official list of the London
Stock Exchange;
"Dealing Day" a day on which dealing in domestic
securities may take place on, and
with the authority of the London Stock
Exchange;
"Debt Financing" the new credit facilities made available
to CGI under the Debt Financing Agreements;
"Dealing Disclosure" has the same meaning as in Rule 8
of the Code;
"Debt Financing Agreements" the Credit Agreement, the Fee Letter
and the Syndication Letter;
"Deutsche Bank" Deutsche Bank AG, London Branch;
"Effective Date" the date on which the Scheme becomes
effective in accordance with its terms;
"Excluded Shares" any Logica Shares which are registered
in the name of or beneficially owned
by any member of the CGI Group or
its nominee(s) and any Logica Shares
held in treasury;
"Executive Share Plan" the Restricted Share Plan, the Logica
Partners Incentive Plan, the Logica
Partners Performance Multiplier Plan,
the Long Term Incentive Plan, the
Deferred Investment Share Plan (formerly
the Executive Equity Partnership Plan);
"Fairly Disclosed" information:
(a) which has been fairly disclosed
in writing by or on behalf of Logica
to CGI or its advisers prior to the
Announcement Date;
(b) which has been Publicly Announced;
or
(c) set out in this announcement;
"Fee Letter" the fee letter dated 31 May 2012 addressed
to CGI by CIBC, NBC and TD
"Forms of Proxy" the forms of proxy for use at the
Court Meeting and the General Meeting;
"FSA" the United Kingdom Financial Services
Authority in its capacity as the competent
authority for the purposes of Part
VI of the FSMA;
"FSMA" the UK Financial Services and Markets
Act 2000, as amended;
"General Meeting" the general meeting of Logica Shareholders
(including any adjournment thereof)
to be convened in connection with
the Scheme;
"General Meeting Resolutions" the resolutions to be proposed at
the General Meeting;
"Goldman Sachs" Goldman Sachs International;
"Interim Management Statement" the interim management statement issued
by Logica on 11 May 2012 including
unaudited financial information for
the three months ended 31 March 2012
as set out in Appendix IV to this
announcement;
"Logica" Logica plc, a company incorporated
in England and Wales;
"Logica Directors" the directors of Logica as at the
date of this announcement;
"Logica Executive Committee" Joao Baptista, Gary Bullard, Serge
Dubrana, Joe Hemming, Stephen Kelly,
Jean-Marc Lazzari, and Amanda Mesler;
"Logica Executive Directors" Andrew Green and Himanshu Raja;
"Logica Financial Advisers" Rothschild, Bank of America Merrill
Lynch and Deutsche Bank;
"Logica Group" Logica, its subsidiaries and subsidiary
undertakings;
"Logica Profit Forecast" the statement in italics and marked
with an asterisk in paragraph 1 of
Part A of Appendix V of this announcement,
as reported on by PricewaterhouseCoopers
and the Logica Financial Advisers
and otherwise referred to or reproduced
elsewhere in this announcement;
"Logica Share Schemes" the Logica Sharesave Schemes, the
Logica Employee Share Matching Plan,
the Logica 1996 Executive Share Option
Scheme and the Logica Executive Share
Plans;
"Logica Shareholders" holders of Logica Shares;
"Logica Shares" ordinary shares of 10 pence each in
the capital of Logica;
"London Stock Exchange" London Stock Exchange plc, a company
incorporated in England and Wales;
"Logica Trading Update" Logica's trading update dated 14 December
2011, in which the board of Logica
announced its intention to accelerate
its restructuring programme;
"NBC" National Bank of Canada;
"New Logica Shares" the new Logica Shares to be issued
to CGI Europe or its nominee(s) in
accordance with the Scheme;
"Offer Period" the offer period (as defined by the
Code) relating to Logica, which commenced
on 31 May 2012;
"Opening Position Disclosure" has the same meaning as in Rule 8
of the Code;
"Overseas Shareholders" Logica Shareholders with registered
addresses outside the United Kingdom
or who are not resident in the United
Kingdom;
"Panel" the Panel on Takeovers and Mergers;
"PricewaterhouseCoopers" PricewaterhouseCoopers LLP;
"Publicly Announced" disclosed (a) in any public announcement
by Logica to any Regulatory Information
Service on or before 5:00 p.m. on
30 May 2012 or (b) in the Annual Report;
"Reduction Court Order" the order of the Court which confirms
the Capital Reduction;
"Reduction Record Time" the time and date specified as such
in the Scheme Document expected to
be 6.00 p.m. on the Business Day immediately
preceding the date upon which the
Capital Reduction Court Order is made;
"Registrar of Companies" the Registrar of Companies in England
and Wales;
"Registration Rights Agreement" has the meaning given to it in paragraph
12 of this Announcement;
"Regulations" the Uncertificated Securities Regulations
2001 (SI 2001 No. 3755), as amended
from time to time;
"Regulatory Information a service approved by the London Stock
Service" Exchange for the distribution to the
public of announcements and included
within the list maintained on the
London Stock Exchange's website;
"Restricted Jurisdiction" any jurisdiction where extension or
acceptance of the proposed Acquisition
would violate the law of that jurisdiction;
"Rothschild" N M Rothschild and Sons Limited;
"Sanction Court Order" the order of the Court sanctioning
the Scheme;
"Scheme" or "Scheme of the proposed scheme of arrangement
Arrangement" under Part 26 of the 2006 Act to be
posted by Logica to the Scheme Shareholders,
the full terms of which will be set
out in the Scheme Document with or
subject to any modification, addition
or condition which CGI Europe and
Logica may agree, and if required,
the Court may approve or impose;
"Scheme Court Hearing" the hearing of the Court to sanction
the Scheme;
"Scheme Document" the document to be sent by Logica
to Logica Shareholders, containing
and setting out the Scheme, the notices
convening the Court Meeting, the General
Meeting and the further particulars
required by Part 26 of the 2006 Act;
"Scheme Shares" the Logica Shares:
(a) in issue at the date of the Scheme
Document;
(b) if any, issued after the date
of the Scheme Document and before
the Scheme Voting Record Time; and
(c) if any, issued at or after the
Scheme Voting Record Time and before
the Reduction 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,
in each case other than any Excluded
Shares;
"Scheme Shareholders" the holders of Scheme Shares;
"Scheme Voting Record the date and time specified in the
Time" Scheme Document by reference to which
entitlement to vote at the Court Meeting
will be determined, expected to be
6.00 p.m. on the day which is 2 days
before the Court Meeting or, if the
Court Meeting is adjourned, 6.00 p.m.
on the day which is 2 days before
the date of such adjourned Court Meeting;
"Schroder" Schroder Investment Management Limited;
"Security Agency" any governmental or regulatory body
competent to take action or impose
restrictions in connection with the
Acquisition by reference to its implications
for any aspect of public policy, law
and order, national security, policing,
defence, or military procurement;
"Statement of Capital" the statement of capital (approved
by the Court) showing, with respect
to Logica's share capital, as altered
by the Capital Reduction Court Order,
the information required by Section
649 of the 2006 Act;
"Subscription Agreement" has the meaning given to it in paragraph
12 of this Announcement;
"Subscription Receipts" has the meaning given to it in paragraph
12 of this Announcement;
"Subscription Receipt has the meaning given to it in paragraph
Agent" 12 of this Announcement;
"Subscription Receipt has the meaning given to it in paragraph
Agreement" 12 of this Announcement;
"Substantial Interest" in relation to an undertaking, a direct
or indirect interest of 20 per cent.
or more of the total voting rights
conferred by the equity share capital
(as defined in Section 548 of the
2006 Act) of such undertaking;
"Syndication Letter" a syndication letter dated 31 May
2012 addressed to CGI by CIBC, NBC
and TD;
"Takeover Offer" should the Acquisition be implemented
by way of a takeover offer, a takeover
offer made by CGI Europe to acquire
the issued and to be issued Logica
Shares and, where the context so requires,
any revision, variation, extension
or renewal of such offer;
"TD" The Toronto-Dominion Bank;
"Third Party" each of a central bank, government
or governmental, quasi-governmental,
supranational, statutory, regulatory,
environmental, administrative, fiscal
or investigative body, court, trade
agency, association, institution or
any other body or person whatsoever
(including for the avoidance of doubt
any Security Agency) in any jurisdiction;
"TSX" Toronto Stock Exchange;
"United Kingdom" or "UK" the United Kingdom of Great Britain
and Northern Ireland;
"United States" or "US" the United States of America, its
territories and possessions, any State
of the United States of America and
the District of Columbia;
"Wider CGI Group" CGI, its subsidiary undertakings,
associated undertakings and any other
undertakings in which that company
and such undertakings (aggregating
their interests) have a Substantial
Interest; and
"Wider Logica Group" Logica, its subsidiary undertakings,
associated undertakings and any other
undertakings in which that company
and such undertakings (aggregating
their interests) have a Substantial
Interest.
For the purposes of this announcement, "subsidiary", "subsidiary
undertaking", "parent undertaking", "undertaking" and "associated
undertaking" have the respective meanings given thereto by the 2006
Act, but for this purpose ignoring paragraph 20(l)(b) of Schedule
4A of the Companies Act 1985, as amended.
All the times referred to in this announcement are London times
unless otherwise stated.
References to the singular include the plural and vice
versa.
GBP and pence means pounds and pence sterling, the lawful
currency of the United Kingdom.
C$ means Canadian dollars, the lawful currency of Canada.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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