14 June 2024
STM Group
Plc
("STM" or
"the Company" or "the Group")
Proposed transfer of all
members out of Workplace Pensions Master Trust
STM Group Plc (AIM: STM),
the cross-border provider of retirement solutions,
life assurance products and related administrative services,
announces an update on its planned strategy in relation to the UK
master trust market.
As detailed previously within the
announcement of Jambo SRC Limited's ("Jambo") firm intention to
make an offer for STM in accordance with Rule 2.7 of the Takeover
Code (the "Rule 2.7 Announcement") and Scheme of Arrangement
Document dated 9 October 2023 and 7 November 2023
respectively, ahead of receiving an approach from Jambo, the STM
Board was considering the sale of the Master Trust as part of its
strategy review in relation to the UK workplace pension master
trust market. As also detailed in the Rule 2.7
announcement, STM agreed with Jambo to continue to explore its
options for the Master Trust. STM currently carries on its UK
workplace pensions business through the Options Master Trust
("OMT"), which is administered by Options Corporate Pensions UK
limited ("OCPL").
The workplace pensions sector has
undergone a significant amount of consolidation in the past few
years and the continued pressure on margins, as well as additional
regulatory costs and burdens, means that a smaller innovative
master trust is less commercially viable.
STM, after considering the various
potential partners in the market, is pleased to announce that it
has signed a commercial agreement with Smart Pension Limited ("SPL"
or "Smart"). The agreement will invite the OMT trustees (the
"Trustees") to consider and, if they conclude it is
appropriate, approve Smart as the default
provider, and, subject to regulatory approval by The
Pensions Regulator ("tPR"), will allow the Trustees to plan
for an orderly transfer of members over time from the OMT to
Smart's own Master Trust.
OCPL recorded revenues of £4.5
million and a profit before tax of £0.5 million for the financial
year ending 31 December 2023. The Options Master Trust has a
membership (including deferred members) in excess of 300,000
individuals, across circa 3,700 participating
employers.
Under the commercial agreement, OCPL
will be paid by Smart for each member that transfers to Smart, the
exact consideration per member being dependent on whether the
member remains a contributing member; or whether they are a
preserved member. In addition, the consideration per member varies
dependent on the member's pension pot, with those members that have
a pot below the current Government threshold of £102, and are a
preserved member, being transferred at nil value.
Subject to approval by the trustees
and tPR and completion of the proposed transfer, it is anticipated
under the commercial agreement that the existing OMT membership
book will attract an overall consideration of c£4.7 million, with a
maximum possible consideration of £4.8 million, which will be paid
over the course of the next twenty-four months. The consideration
will initially be retained by STM, with further use of proceeds to
be decided by the Board of the Company as they are received over
the three years following completion of the transaction.
The exact timing of the payments
will be dependent on when new contributions are received into
Smart's Master Trust for active members and upon the bulk transfer
to Smart of historic contributions and assets for active and other
Options members. The final thirty per cent. of the expected
consideration will be payable twelve months after the date of the
bulk transfer, so as to allow for a truing-up for the final numbers
of members transferring. Once the bulk transfer has occurred, OCPL,
in conjunction with the Trustees, will then wind-down the OMT in an
orderly fashion.
In addition to the above commercial
agreement, STM has also entered into an introducer agreement with
Smart under which STM will receive an introductory commission for
new members to be introduced to SPL by existing and new business
relationships. The introducer agreement has the potential to
deliver significant additional benefit to STM, with advantageous
terms available for twelve months for introductions from existing
STM business relationships, and a period of three years on
different terms for new business relationships introduced.
The introductory commission is capped, and a reasonable expectation
would be that the introducer agreement might generate between £1
million and £5 million of revenue over the three year
period.
The agreements with Smart will
include companies affiliated with Jambo, once Jambo becomes the
shareholder controller of STM.
Alan Kentish, CEO of STM Group, commented:
"We have got to know the Smart team over the last
18 months, and have been impressed with their vision and supporting
technology. We believe that Smart would provide a good
home for our membership base, and that it will always act in the
members' interests. Whilst STM, has grown its master trust business
since acquiring it in 2019, and had created an innovative business
model as an alternative to the one-size fits all master trust, it
is clear that continuing regulatory burdens and consolidation
activity mean that it is an opportune time for STM to proceed with
its strategy of transferring the UK master trust
operation."
Jamie Fiveash, CEO of Smart UK, added:
"I'm delighted that the agreement announced today
will enable us to further expand the benefits of Smart Pension to
be provided to more UK pension savers within the Options Master
Trust, bringing value, along with our best in class customer
experience and technology, to all its members. As a market-leading
consolidator, we look forward both to another successful
partnership and implementation, and to further opportunities with
the wider STM and Jambo Group."
This announcement contains inside
information in relation to STM for the purposes of Article 7 of the
Market Abuse Regulation. The person responsible for arranging
the release of this announcement on behalf of STM is Alan
Kentish.
Capitalised terms used in this
announcement (the "Announcement") shall, unless otherwise defined,
have the same meanings as set out in the Scheme Document. All
references to times in this Announcement are to London, United
Kingdom time unless stated otherwise.
For
further information:
STM
Group Plc
|
|
Alan Kentish, Chief Executive
Officer
|
Via Walbrook PR
|
|
|
Cavendish Capital Markets Limited (Financial Adviser,
Nominated Adviser and Broker to STM)
|
|
Matt Goode / Emily Watts / Abigail
Kelly - Corporate Finance
Tim Redfern (ECM)
|
Tel: +44 (0) 20 7220 0500
|
|
|
Walbrook
|
www.walbrookpr.com
|
Tom Cooper / Joseph
Walker
|
Tel: +44 (0) 20 7933 8780
|
|
Mob: +44
(0) 797 122 1972
|
|
STM@walbrookpr.com
|
IMPORTANT NOTICES
Overseas Shareholders
The release, publication or
distribution of this Announcement in jurisdictions other than the
United Kingdom or the Isle of Man may be restricted by law and/or
regulations. Persons who are not resident in the United Kingdom or
the Isle of Man or who are subject to the laws and regulations of
other jurisdictions should inform themselves of, and observe, any
applicable requirements. Unless otherwise determined by Bidco or
required by the Takeover Code, and permitted by applicable law and
regulation, the Acquisition shall not be made available, in whole
or in part, directly or indirectly, in, into or from a Restricted
Jurisdiction where to do so would violate the laws or regulations
in that jurisdiction and no person may vote in favour of the
Acquisition 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 forward, distribute or send them in, into or from such
jurisdictions where to do so would violate the laws in those
jurisdictions. If the Acquisition is implemented by way of a
Takeover Offer (unless otherwise permitted by applicable law and
regulation), such Takeover Offer may not be made available directly
or indirectly, into or from or by the use of mails or any means or
instrumentality (including, but not limited to, facsimile, e-mail
or other electronic transmission, telex or telephone) of interstate
or foreign commerce of, or of any facility of a national, state or
other securities exchange of any Restricted Jurisdiction and the
Takeover Offer may not be capable of acceptance by any such use,
means, instrumentality or facilities.
The availability of the Acquisition
to STM Shareholders who are not resident in the United Kingdom or
the Isle of Man (and, in particular, their ability to vote their
Scheme Shares with respect to the Scheme at the Court Meeting, or
to appoint another person as proxy to vote at the Court Meeting on
their behalf) may be affected by the laws of the relevant
jurisdictions in which they are resident. Persons who are not
resident in the United Kingdom or the Isle of Man should inform
themselves of, and observe, any applicable requirements, as any
failure to comply with such requirements may constitute a violation
of the securities laws of any such jurisdiction. To the fullest
extent permitted by applicable law, the companies and persons
involved in the Acquisition disclaim any responsibility or
liability for the violation of such restrictions by any person. The
Acquisition shall be subject to the applicable requirements of the
Companies Act, the Court, the Takeover Code, the Panel, the London
Stock Exchange, the Financial Conduct Authority and the AIM Rules.
Further details in relation to Overseas Shareholders will be
contained in the Scheme Document.
Additional Information for US
Investors
The Acquisition is being made to
acquire the securities of an Isle of Man company by means of a
scheme of arrangement provided for under Part X of the Companies
Act. A transaction effected by means of a scheme of arrangement is
not subject to the proxy solicitation or tender offer rules under
the US Exchange Act. Accordingly, the Scheme will be subject to
disclosure requirements and practices applicable to schemes of
arrangement involving a target company incorporated in the Isle of
Man admitted to trading on AIM, which are different from the
disclosure requirements of the US under the US proxy solicitation
and tender offer rules. The financial information included in this
Announcement and the Scheme documentation has been or will have
been prepared in accordance with accounting standards applicable in
the Isle of Man and the UK and thus may not be comparable to
financial information of US companies or companies whose financial
statements are prepared in accordance with generally accepted
accounting principles in the US.
Neither the US Securities and
Exchange Commission nor any US state securities commission has
approved or disproved or passed judgment upon the fairness or the
merits of the Acquisition or determined if this Announcement is
adequate, accurate or complete.
If Bidco were to elect to implement
the Acquisition by means of a Takeover Offer, such Takeover Offer
would be made in compliance with applicable US laws and
regulations, including to the extent applicable Section 14(e) of
the US Exchange Act and Regulation 14E thereunder, and in
accordance with the Takeover Code. Such a takeover would be made in
the United States by Bidco and no one else.
The receipt of cash pursuant to the
Acquisition by a US holder as consideration for the transfer of its
Scheme Shares pursuant to the Scheme may be a taxable transaction
for United States federal income tax purposes and under applicable
United States state and local, as well as foreign and other, tax
laws. Each STM Shareholder is urged to consult his or her
independent professional adviser immediately regarding the tax
consequences of the Acquisition applicable to him.
It may be difficult for US holders
to enforce their rights and any claims arising out of the US
federal securities laws, since STM is located in a country other
than the US, and all of its officers and directors are residents of
countries other than the US. US holders may not be able to sue a
non-US company or its officers or directors in a non-US court for
violations of US securities laws. Further, it may be difficult to
compel a non-US company and its affiliates to subject themselves to
a US court's judgement.
In accordance with normal UK
practice and consistent with Rule 14e-5 under the US Exchange Act,
Bidco, certain affiliated companies and the nominees or brokers
(acting as agents) may from time to time make certain purchases of,
or arrangements to purchase, shares in STM outside of the US, other
than pursuant to the Acquisition, until the date on which the
Acquisition and/or Scheme becomes effective, lapses or is otherwise
withdrawn. If such purchases or arrangements to purchase were to be
made they would occur either in the open market at prevailing
prices or in private transactions at negotiated prices and will
comply with applicable law, including to the extent applicable the
US Exchange Act. Any information about such purchases or
arrangements to purchase will be disclosed as required in the
United Kingdom, will be reported to a Regulatory Information
Service and will be available on the London Stock Exchange website
at www.londonstockexchange.com. This information will also be
publicly disclosed in the US to the extent that such information is
made public in the UK.
Disclosure Requirements of the Takeover Code
Under Rule 8.3(a) of the Takeover
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 securities exchange offeror (being any offeror
other than an offeror in respect of which it has been announced
that its offer is, or is likely to be, solely in cash) must make an
Opening Position Disclosure following the commencement of the offer
period and, if later, following the announcement in which any
securities exchange offeror is first identified. An Opening
Position Disclosure must contain details of the person's interests
and short positions in, and rights to subscribe for, any relevant
securities of each of: (i) the offeree company; and (ii) any
securities exchange offeror(s). An Opening Position Disclosure by a
person to whom Rule 8.3(a) applies must be made by no later than
3.30 p.m. (London time) on the 10th Business Day following the
commencement of the offer period and, if appropriate, by no later
than 3.30 p.m. (London time) on the 10th Business Day following the
announcement in which any securities exchange offeror is first
identified. Relevant persons who deal in the relevant securities of
the offeree company or of a securities exchange offeror prior to
the deadline for making an Opening Position Disclosure must instead
make a Dealing Disclosure.
Under Rule 8.3(b) of the Takeover
Code, any person who is, or becomes, interested in 1 per cent. or
more of any class of relevant securities of the offeree company or
of any securities exchange offeror must make a Dealing Disclosure
if the person deals in any relevant securities of the offeree
company or of any securities exchange offeror. A Dealing Disclosure
must contain details of the dealing concerned and of the person's
interests and short positions in, and rights to subscribe for, any
relevant securities of each of: (i) the offeree company; and (ii)
any securities exchange offeror(s), save to the extent that these
details have previously been disclosed under Rule 8. A Dealing
Disclosure by a person to whom Rule 8.3(b) applies must be made by
no later than 3.30 p.m. (London time) on the Business Day following
the date of the relevant dealing.
If two or more persons act together
pursuant to an agreement or understanding, whether formal or
informal, to acquire or control an interest in relevant securities
of an offeree company or a securities exchange offeror, they will
be deemed to be a single person for the purpose of Rule
8.3.
Opening Position Disclosures must
also be made by the offeree company and by any offeror and Dealing
Disclosures must also be made by the offeree company, by any
offeror and by any persons acting in concert with any of them (see
Rules 8.1, 8.2 and 8.4).
Details of the offeree and offeror
companies in respect of whose relevant securities Opening Position
Disclosures and Dealing Disclosures must be made can be found in
the Disclosure Table on the Panel's website at
www.thetakeoverpanel.org.uk, including details of the number of
relevant securities in issue, when the offer period commenced and
when any offeror was first identified. You should contact the
Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are
in any doubt as to whether you are required to make an Opening
Position Disclosure or a Dealing Disclosure.
Electronic Communications
Please be aware that addresses,
electronic addresses and certain information provided by STM
Shareholders and other relevant persons for the receipt of
communications from STM may be provided to Bidco during the Offer
Period as requested under Section 4 of Appendix 4 of the Takeover
Code to comply with Rule 2.11(c) of the Takeover Code.
Publication on Website and Availability of Hard
Copies
A copy of this Announcement and the
documents required to be published by Rule 26 of the Takeover Code
shall be made available subject to certain restrictions relating to
persons resident in Restricted Jurisdictions on STM'S website at
https://www.stmgroupplc.com/possible-offer-for-stm-group-plc by no
later than 12 noon (London time) on the Business Day following this
Announcement. For the avoidance of doubt, the contents of this
website are not incorporated into and do not form part of this
Announcement.
STM Shareholders may request hard
copies of this Announcement by contacting Computershare Investor
Services (Jersey) Limited at 13 Castle Street, St. Helier, Jersey
Channel Islands, JE1 1ES or on +44 (0370) 707 4040 between 9:00
a.m. and 5:00 p.m. (London time) Monday to Friday (public holidays
excepted). Calls to this number from persons who are not resident
in Jersey are charged at the applicable international rate. Calls
from a mobile device may incur network extras.
STM Shareholders may also request
that all future documents, announcements and information to be sent
to them in relation to the Acquisition should be in hard copy form.
If an STM Shareholder has received this Announcement in electronic
form, copies of this Announcement and any document or information
incorporated by reference into this Announcement will not be
provided unless such a request is made.
Rounding
Certain figures included in this
Announcement have been subjected to rounding adjustments.
Accordingly, figures shown for the same category presented in
different tables may vary slightly and figures shown as totals in
certain tables may not be an arithmetic aggregation of the figures
that precede them.
General
If you are in any doubt about the
contents of this Announcement or the action you should take, you
are recommended to seek your own independent financial advice
immediately from your stockbroker, bank manager, solicitor
accountant or independent financial adviser duly authorised under
the Financial Services and Markets Act 2000 (as amended) if you are
a resident in the United Kingdom or, if not, from another
appropriately authorised independent financial adviser.
Notes to editors:
STM is a multi-jurisdictional
financial services group traded on AIM, a market operated by the
London Stock Exchange. The Group specialises in the administration
of client assets in relation to retirement, estate and succession
planning and wealth structuring.
Today, the Group has operations in
the UK, Gibraltar, Malta, Australia and Spain. STM has developed a
range of pension products for UK nationals and internationally
domiciled clients and has two Gibraltar life assurance companies
which provide life insurance bonds - wrappers in which a variety of
investments, including investment funds, can be held.
STM's growth strategy is focussed on
both organic initiatives and strategic acquisitions.
Further information on STM Group can
be found at
www.stmgroupplc.com