TIDMCLSU TIDMTTM
RNS Number : 1115Z
ClearStar,Inc.
16 September 2020
Not for release, publication or distribution, in whole or in
part, directly or indirectly, in, into or from any jurisdiction
where to do so would constitute a violation of the relevant laws or
regulations of such jurisdiction.
FOR IMMEDIATE RELEASE
The announcement contains inside information.
Recommended offer
for
ClearStar, Inc. ("ClearStar")
by
Hanover Bidco 1 Limited ("Hanover Bidco")
(an investment vehicle owned by Hanover Act ive Equity Fund II,
S.C.A. SICAV-RAIF)
-- The ClearStar Independent Directors and the Directors of
Hanover Bidco are pleased to announce that they have reached
agreement on the terms of a recommended offer to be made by Hanover
Bidco for the entire issued and to be issued ordinary share capital
of ClearStar.
-- The Cash Consideration payable to ClearStar Shareholders
under the Offer will be 40 pence in cash for each ClearStar
Share.
-- The Offer values the issued share capital of ClearStar at approximately GBP14.7 million.
-- The Offer represents a premium of 23 per cent. over the
Closing Price of 32.5 pence per ClearStar Share on the Latest
Practicable Date.
-- As an alternative to the Cash Consideration to which they
would otherwise be entitled under the Offer, eligible ClearStar
Shareholders together with connected family trusts holding 25 per
cent. or more of the voting rights in ClearStar who execute an
Accredited Investor Letter will be entitled to elect in respect of
all (but not part only) of their holding of ClearStar Shares to
receive 2 Hanover Bidco Shares for every 5 ClearStar Shares. As a
result of Robert Vale's election for the Unlisted Share
Alternative, it has been determined by the board of ClearStar that
he should not be treated as an independent director for the
purposes of the recommendation of the Offer. Accordingly, Robert
Vale has taken no part in the consideration of the Offer by the
ClearStar Independent Directors.
-- The Offer is conditional upon, amongst other things, Hanover
Bidco receiving valid acceptances (which have not been withdrawn)
in respect of and/or having otherwise acquired or agreed to
acquire, ClearStar Shares which constitute more than 50 per cent.
of the voting rights attaching to the issued ClearStar Shares.
-- Hanover Bidco has received irrevocable undertakings from each
of the ClearStar Directors who are interested in ClearStar Shares
to accept (or, in respect of the ClearStar Shares beneficially
owned by that ClearStar Director, procure acceptance of) the Offer.
Such ClearStar Shares amount to, in aggregate, 14,218,325 ClearStar
Shares, representing approximately 39.1 per cent. of ClearStar's
existing issued share capital as at the Latest Practicable Date.
Amongst the ClearStar Directors, Robert Vale has also undertaken to
elect for the Unlisted Share Alternative. Hanover Bidco has also
received irrevocable undertakings from ClearStar Shareholders
William White (together with shares held by his wife) and David
Pattillo in respect of 5,175,400 ClearStar Shares. These
irrevocable undertakings remain binding even in the event of a
higher competing offer. Such ClearStar Shares together amount to,
in aggregate, 19,393,725 ClearStar Shares, representing
approximately 53.3 per cent. of ClearStar's existing issued share
capital as at the Latest Practicable Date. Hanover Bidco has also
received a letter of intent from Artemis Investment Management LLP
to procure the acceptance of the Offer in respect of 791,500
ClearStar Shares.
-- In total, Hanover Bidco has therefore received irrevocable
undertakings and a letter of intent in respect of 20,185,225
ClearStar Shares, representing approximately 55.5 per cent. of
ClearStar's issued share capital as at the Latest Practicable
Date.
-- The ClearStar Independent Directors, who have been so advised
by finnCap as to the financial terms of the Offer in so far as they
relate to the Cash Consideration, consider the terms of the Offer
in so far as they relate to the Cash Consideration to be fair and
reasonable and in the best interests of ClearStar and ClearStar
Shareholders as a whole. In providing advice to the ClearStar
Independent Directors, finnCap has taken into account the
commercial assessments of the ClearStar Independent Directors.
-- Accordingly, the ClearStar Independent Directors intend to
unanimously recommend that ClearStar Shareholders accept the Offer
and elect for the Cash Consideration.
-- The ClearStar Independent Directors offer no view on the Unlisted Share Alternative
-- ClearStar is not subject to the UK Takeover Code or any
requirements of the UK Takeover Panel.
Commenting on the Offer, Barney Quinn, Chairman of ClearStar
said:
"Having served as Chairman of ClearStar since the IPO six years
ago, I have been delighted to see the growth of our business, with
the company now recognised as having market-leading employment and
medical background screening technologies. On behalf of ClearStar's
Board, I would like to thank the management team under the
leadership of Bob Vale and Ken Dawson and our employees for making
ClearStar the company it is today. Up until the outbreak of
COVID-19, ClearStar had a good start to the year, and then saw
excellent improvement from May onwards following the significant
impact on revenues in March and April. However, we have not yet
seen a return in much of our traditional business and the ongoing
challenges created by the pandemic means that there remains
significant near-term uncertainty. The Hanover offer provides us
with the financial certainty to continue building our business and
enable our employees to play a major role in transforming our
industry for the benefit of our customers."
Commenting on the Offer, Matthew Peacock of Hanover Investors
said:
"We are delighted to be announcing this recommended cash offer
for ClearStar. ClearStar is an excellent company with significant
growth potential and we are committed to investing in the business
to drive further value. Operating in a fast-moving and
consolidating industry, we believe access to significant capital
will be key to ClearStar's future success, and that it will be
better served in this regard as a private company. Our proposal
provides ClearStar shareholders with a clear opportunity to realise
value at a significant premium to the current share price."
This summary should be read in conjunction with the full text of
the following announcement including the Appendices. The conditions
and certain further terms of the Offer are set out in Appendix I to
this announcement. Appendix II contains details of the Unlisted
Share Alternative. Appendix III contains details of the irrevocable
undertakings and letter of intent given to Hanover Bidco. Appendix
IV contains the definitions of certain terms used in this
announcement.
The person responsible for making this announcement on behalf of
ClearStar is Nicholas Dufour, General Counsel and Corporate
Secretary.
Further information
This announcement is for information purposes only and is not
intended to and does not constitute, or form part of, any offer to
sell or subscribe for or an invitation to purchase or subscribe for
any securities or the solicitation of any vote or approval in the
United States or any other jurisdiction pursuant to the Offer or
otherwise, nor shall there be any sale, issuance or transfer of
securities of ClearStar in the United States or any other
jurisdiction in contravention of applicable law.
Any acceptance or other response to the Offer should only be
made on the basis of information contained in the Offer Document
(which will contain the full terms and conditions of the Offer) and
the Form of Acceptance/Election. ClearStar Shareholders are advised
to read the formal documentation in relation to the Offer carefully
once it has been dispatched.
Please be aware that addresses, electronic addresses and certain
other information provided by ClearStar Shareholders, persons with
information rights and other relevant persons in connection with
the receipt of communications from ClearStar may be provided to
Hanover Bidco during the offer period.
Overseas jurisdictions
The availability of Hanover Bidco Shares in, and the release,
publication or distribution of this announcement and/or any
accompanying documents (in whole or in part) in jurisdictions other
than the United Kingdom may be restricted by law and therefore any
persons who are subject to the laws of any jurisdiction other than
the United Kingdom should inform themselves about, and observe, any
applicable requirements.
ClearStar Shareholders who are in any doubt regarding such
matters should consult an appropriate independent adviser in the
relevant jurisdiction without delay. Any failure to comply with
such restrictions and/or requirements may constitute a violation of
the securities laws of any such jurisdiction.
This announcement has been prepared for the purposes of
complying with English law, the laws of the Cayman Islands and the
AIM Rules 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 and regulations of any
jurisdiction outside the United Kingdom.
The Offer will be subject to the applicable requirements of
English Law, the laws of the Cayman Islands, the AIM Rules, the UK
Financial Conduct Authority and section 14(e) of, and Regulation
14E under, the Exchange Act. ClearStar is not subject to the UK
Takeover Code or any requirements of the UK Takeover Panel.
Unless otherwise determined by Hanover Bidco, and permitted by
applicable law and regulation, the Offer shall 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 accept the Offer 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 Offer are not being,
and must not be, directly or indirectly, mailed or otherwise
forwarded, distributed or sent in or into or from any Restricted
Jurisdiction where to do so would violate the laws in that
jurisdiction, and persons receiving such documents (including
custodians, nominees and trustees) must not mail or otherwise
forward, distribute or send them in or into or from any Restricted
Jurisdiction where to do so would violate the laws in that
jurisdiction.
Any failure to comply with the applicable restrictions may
constitute a violation of the securities laws of any such
jurisdiction and, to the fullest extent permitted by applicable
law, ClearStar and Hanover Bidco disclaim any responsibility or
liability for the violation of such restrictions by any person.
The availability of the Offer to ClearStar 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.
Notes to US investors
The Offer is being made in the United States pursuant to Section
14(e) of, and Regulation 14E under, the Exchange Act, and pursuant
to an exemption from the registration requirement of the Securities
Act for transactions not involving a public offering and, in
accordance with the requirements of the laws of the Cayman Islands.
The Hanover Bidco Shares to be issued pursuant to the Offer have
not been and will not be registered under the Securities Act or
under the relevant securities laws of any state or territory or
other jurisdiction of the United States. There will be no public
offering of Hanover Bidco Shares in the United States.
The Offer is being made for the securities of a Cayman Islands
incorporated company with its shares admitted to trading on AIM.
The Offer is not subject to United States disclosure requirements.
The financial information on ClearStar included in this
announcement has been extracted from ClearStar financial statements
which are stated by ClearStar to have been prepared in accordance
with US GAAP.
The receipt of cash pursuant to the Offer by a US holder of
ClearStar Shares may be a taxable transaction for US federal income
tax purposes and under applicable US state and local, as well as
foreign and other, tax laws. Each ClearStar Shareholder is urged to
consult his or her independent professional adviser immediately
regarding the tax consequences of accepting the Offer.
The Offer will be made by Hanover Bidco and no one else.
It may be difficult for US holders of ClearStar Shares to
enforce their rights and any claim arising out of US federal
securities laws, since Hanover Bidco is incorporated under the laws
of England and Wales, and ClearStar is incorporated under the laws
of the Cayman Islands and some of their officers and directors are
residents of non-US jurisdictions. US holders of ClearStar Shares
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 judgment.
This announcement does not constitute an offer of securities for
sale in the United States or an offer to acquire securities in the
United States. No offer to acquire securities or to exchange
securities for other securities has been made, or will be made,
directly or indirectly, in or into, or by the use of the mails of,
or by any means or instrumentality of interstate or foreign
commerce or any facilities of a national securities exchange of,
the United States or any other country in which such offer may not
be made other than: (i) in accordance with the tender offer
requirements under the Exchange Act, or the securities laws of such
other country, as the case may be; or (ii) pursuant to an available
exemption from such requirements.
Neither the US Securities and Exchange Commission nor any US
state securities commission has approved or disapproved the Offer,
passed comment upon the fairness or merits of the Offer or passed
comment upon the adequacy or completeness of this announcement. Any
representation to the contrary is a criminal offence in the United
States.
To the extent permitted by applicable law, in accordance with
normal UK market practice, Hanover Bidco or its nominees or brokers
(acting as agents) or their respective affiliates may from time to
time make certain purchases of, or arrangements to purchase, shares
or other securities in ClearStar, other than pursuant to the Offer,
at any time prior to completion of the Offer. These purchases may
occur either in the open market at prevailing prices or in private
transactions at negotiated prices. Any such purchases, or
arrangements to purchase, will comply with all applicable UK and
Cayman Islands rules, the AIM Rules and Rule 14e-5 under the
Exchange Act. To the extent required by the applicable law, any
information about such purchases will be disclosed on a next day
basis to a Regulatory Information Service including the Regulatory
News Service on the London Stock Exchange website,
www.londonstockexchange.com. To the extent that such information is
made public in the United Kingdom, this information will also be
deemed to be publicly disclosed in the United States.
Notes regarding Hanover Bidco Shares
The Hanover Bidco Shares to be issued pursuant to the Offer have
not been and will not be registered under the relevant securities
laws of any Restricted Jurisdiction. No prospectus in relation to
the Hanover Bidco Shares has been, or will be, lodged with, or
registered by, the FCA in the United Kingdom. Accordingly, the
Hanover Bidco Shares are not being, and may not be, offered, sold,
resold, delivered, distributed or otherwise transferred, directly
or indirectly in or into the United States, Canada, Australia or
Japan or any other jurisdiction if to do so would constitute a
violation of relevant laws of, or require registration thereof in,
such jurisdiction (absent registration under relevant securities
laws or pursuant to an exemption, if available, from any applicable
registration requirements and otherwise in compliance with all
applicable laws).
The Hanover Bidco Shares are not being, and may not be, offered,
sold, resold, delivered, distributed or otherwise transferred,
directly or indirectly, to the public in the Cayman Islands. For
these purposes, the expression "public" does not include an
exempted or ordinary non-resident company registered under the
Companies Law (2020 Revision), or a foreign company registered
under Part IX of that Law, or any such company acting as general
partner of a partnership registered under the Exempted Limited
Partnership Law (2018 Revision), or any director or officer of the
same acting in such capacity.
Forward-looking statements
This announcement contains certain forward-looking statements,
including statements regarding Hanover Bidco and ClearStar and
their plans, objectives and expected performance. Such statements
relate to events and depend on circumstances that will occur in the
future and are subject to risks, uncertainties and assumptions.
There are a number of factors which could cause actual results and
developments to differ materially from those expressed or implied
by such forward-looking statements, including, among others: the
enactment of legislation or regulation that may impose costs or
restrict activities; the re-negotiation of contracts or licences;
fluctuations in demand and pricing in the employee screening
industry; fluctuations in exchange controls; changes in government
policy and taxations; industrial disputes; war and terrorism. These
forward-looking statements speak only as at the date of this
announcement.
No profit forecasts or estimates
No statement in, or referred to in, this announcement or
incorporated by reference into this announcement is intended as or
shall be deemed to be a profit forecast or estimate for any period.
No statement in, or referred to in, this announcement or
incorporated by reference into this announcement should be
interpreted to mean that cash flow from operations, free cash flow,
earnings or earnings per share for ClearStar, Hanover Bidco or the
enlarged Hanover Bidco Group (as applicable) for the current or
future financial years would necessarily match or exceed the
historic published cash flow from operations, free cash flow,
earnings or earnings per share for ClearStar, Hanover Bidco or the
enlarged Hanover Bidco Group (as applicable).
Publication of this announcement
A copy of this announcement will be available subject to certain
restrictions relating to persons resident in Restricted
Jurisdictions on Hanover Bidco's website at
www.hanoverinvestors.com and ClearStar's website at
www.clearstar.net.
The contents of Hanover Bidco's website and ClearStar's website
are not incorporated into and do not form part of this
announcement.
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.
Definitions
Certain words and terms used in this announcement are defined in
Appendix IV of this announcement.
Time
All times shown in this announcement are London times, unless
otherwise stated.
Not for release, publication or distribution, in whole or in
part, directly or indirectly, in, into or from any jurisdiction
where to do so would constitute a violation of the relevant laws or
regulations of such jurisdiction.
FOR IMMEDIATE RELEASE 16 September 2020
The announcement contains inside information
Recommended offer
for
ClearStar, Inc. ("ClearStar")
by
Hanover Bidco 1 Limited ("Hanover Bidco")
(an investment vehicle owned by Hanover Act ive Equity Fund II,
S.C.A. SICAV-RAIF)
1. Introduction
The ClearStar Independent Directors and the directors of Hanover
Bidco are pleased to announce that they have reached an agreement
on the terms of a recommended offer, to be made by Hanover Bidco,
to acquire the entire issued and to be issued share capital of
ClearStar.
The terms of the Offer are set out in paragraph 2 below and
consist, inter alia, of the Cash Consideration and an Unlisted
Share Alternative.
The Offer is conditional upon, amongst other things, Hanover
Bidco receiving valid acceptances (which have not been withdrawn)
in respect of and/or having otherwise acquired or agreed to acquire
ClearStar Shares which constitute more than 50 per cent. of the
voting rights attaching to the ClearStar Shares.
Hanover Bidco has received irrevocable undertakings and a letter
of intent to accept the Offer in respect of an aggregate of
20,185,225 ClearStar Shares representing 55.5 per cent. of
ClearStar's issued share capital as at the Latest Practicable Date
(see paragraph 7 below for further details). As a result of Robert
Vale's election for the Unlisted Share Alternative, it has been
determined by the board of ClearStar that he should not be treated
as an independent ClearStar Director for the purposes of the
recommendation of the Offer. Accordingly, Robert Vale has taken no
part in the consideration of the Offer by the ClearStar Independent
Directors.
The ClearStar Independent Directors, who have been so advised by
finnCap as to the financial terms of the Offer in so far as they
relate to the Cash Consideration, consider the terms of the Offer
in so far as they relate to the Cash Consideration to be fair and
reasonable and in the best interests of ClearStar and ClearStar
Shareholders as a whole. In providing advice to the ClearStar
Independent Directors, finnCap has taken into account the
commercial assessments of the ClearStar Independent Directors.
Accordingly, the ClearStar Independent Directors intend to
unanimously recommend that ClearStar Shareholders accept the Offer
and elect for the Cash Consideration.
The ClearStar Independent Directors offer no view on the
Unlisted Share Alternative.
2. Summary of Terms
The Offer will be subject to the conditions and further terms
set out in Appendix I to this announcement and to be set out in the
Offer Document and will be made on the following basis:
for each ClearStar Share 40 pence in cash
The ClearStar Shares will be acquired under the Offer fully paid
and free from all liens, equitable interests, charges,
encumbrances, options, rights of pre-emption and any other third
party rights or interests of any nature whatsoever and together
with all rights attaching thereto, including the right to receive
and retain all dividends and other distributions and returns of
value declared, paid or made after the Offer becomes or is declared
unconditional in all respects.
The Offer values the issued share capital of ClearStar at
approximately GBP14.7 million.
The Offer represents a premium of 23 per cent. over the Closing
Price of 32.5 pence per ClearStar Share on the Latest Practicable
Date.
If any dividend or other distribution or return of value is
proposed, declared, made, paid or becomes payable by ClearStar in
respect of a ClearStar Share on or after the date of this
announcement and prior to the Offer becoming or being declared
unconditional in all respects, Hanover Bidco will have the right to
reduce the value of the consideration payable for each ClearStar
Share by up to the amount per ClearStar Share of such dividend,
distribution or return of value except where the ClearStar Share is
or will be acquired pursuant to the Offer on a basis which entitles
Hanover Bidco to receive the dividend, distribution or return of
value and to retain it.
If any such dividend, distribution or return of value is paid or
made after the date of this announcement and Hanover Bidco
exercises its rights described above, ClearStar Shareholders will
be entitled to receive and retain that dividend (or other
distribution or return of value) and any reference in this
announcement to the consideration payable under the Offer shall be
deemed to be a reference to the consideration as so reduced. Any
exercise by Hanover Bidco of its rights referred to in this
paragraph shall be the subject of an announcement and, for the
avoidance of doubt, shall not be regarded as constituting any
revision or variation of the terms of the Offer.
As an alternative to the Cash Consideration to which they would
otherwise be entitled under the Offer, eligible ClearStar
Shareholders together with connected family trusts holding 25 per
cent. or more of the voting rights in ClearStar who execute an
Accredited Investor Letter will be entitled to elect in respect of
all (but not part only) of their holding of ClearStar Shares to
receive:
for every 5 ClearStar 2 Hanover Bidco Shares
Shares
The Unlisted Share Alternative is conditional upon the Offer
becoming or being declared unconditional in all respects. The
Unlisted Share Alternative will remain open for acceptance for as
long as the Offer remains open for acceptance.
Fractional entitlements to Hanover Bidco Shares under the
Unlisted Share Alternative will be rounded down to the nearest
whole number and will not be allotted or issued to ClearStar
Shareholders but will be disregarded.
Further details of the Unlisted Share Alternative are set out in
Appendix II.
3. Background to and reasons for the Offer
Hanover Investors recognises the strength of ClearStar as a
provider of employment intelligence. However, Hanover Investors
believes that ClearStar will be better positioned for success in a
private equity environment with improved access to capital and a
longer term investment horizon.
The Offer represents an opportunity for a certain cash exit for
ClearStar Shareholders at a significant premium to the Closing
Price on the Latest Practicable Date.
Hanover Bidco confirms that, following implementation of the
Offer, the existing contractual and statutory employment rights,
including in relation to pensions, of all ClearStar employees will
be honoured.
Hanover Bidco views ClearStar as a growth investment and intends
to invest materially in order to drive growth while ensuring that
customer service remains best in class. Key investment areas will
include technology, finance and sales. In addition, Hanover Bidco
intends to support ClearStar with any equity required to grow the
business inorganically through domestic and international
acquisitions.
Hanover Bidco has no intentions to make any change to
ClearStar's principal places of business, including the location of
ClearStar's headquarters and headquarters' functions, or fixed
assets.
On or shortly after the date the Offer becomes or is declared
unconditional in all respects it is proposed that the non-executive
ClearStar Directors will resign from the board of ClearStar and
will be replaced by directors appointed by Hanover Bidco. Hanover
Bidco is not currently contemplating any employee redundancies, and
will instead seek to review and improve ClearStar's remuneration
schemes to ensure that key executives are retained.
4. Background to and reasons for ClearStar Independent Directors' recommendation
ClearStar's core business, as a human capital integrity and risk
mitigation company, is to provide background check reports for
employment screening purposes. ClearStar has a very clear and
focused strategy to expand and upscale its direct client base while
also growing its range of medical screening solutions. With
investment in sales and marketing as well as enhancing its
portfolio of products, including the launch of breath alcohol
screening, ClearStar saw good growth in both revenues and adjusted
EBITDA in 2019.
Given ClearStar's strong customer relationships and pipeline of
opportunities, this momentum continued into the early months of
2020 and as a result the ClearStar Directors remain confident in
the long term prospects of ClearStar. However, COVID-19 has created
significant near term uncertainty. With the widespread recruitment
freezes and job losses as a result of the pandemic, screening
volumes were significantly reduced in March and April 2020 across
all of the Company's channels and services . Whilst ClearStar has
seen improvements in its revenue since May, the ClearStar
Independent Directors are conscious that the fourth quarter is a
historically slow quarter for the industry which could be
accentuated by the additional uncertainty created by the 2020
presidential election in the United States in November. As a
result, the ClearStar Independent Directors are uncertain as to the
potential near term impact on revenue for the current financial
year and the consequential knock on effect of any delays in
converting the near-term pipeline of opportunities.
The ClearStar Independent Directors also believe that to exploit
fully the available market opportunity, through organic growth and
by taking advantage of the consolidation opportunities available in
the background screening industry due to the current economic
environment, ClearStar will need to have a more balanced capital
structure requiring additional investment. Set against a background
of a declining pool of readily available capital and increased
difficulty in fundraising for small cap companies such as ClearStar
there is no certainty that such funding would be available.
Furthermore, were such funding to be achieved, such additional
investment would lead to inevitable dilution.
Many competitors of ClearStar are now owned and/or backed by
private equity firms with a focus on growth on a longer-term basis
than is typical in a public company environment, which provides
them with the expertise and financial resources needed to develop
technologies to maintain and/or gain a competitive edge in the
industry. In the view of the ClearStar Independent Directors, the
Offer allows ClearStar Shareholders to realise a full cash exit at
an attractive price. In view of the limited trading liquidity in
ClearStar Shares this was an important factor in considering the
recommendation and the ClearStar Independent Directors believe that
the Offer presents an opportunity for all ClearStar Shareholders to
realise their investment in ClearStar at a premium to the
prevailing share price which may not otherwise be achievable in the
near-term future due to the near term economic uncertainty in
ClearStar's markets and ClearStar's limited trading liquidity.
Having taken into account these matters, the ClearStar
Independent Directors believe that the terms of the Offer to are
fair and reasonable in so far as they relate to the Cash
Consideration and that the Offer is in the best interests of
ClearStar Shareholders, employees and customers as a whole, and
therefore unanimously recommend that ClearStar Shareholders accept
the Offer by Hanover Bidco.
5. Information regarding ClearStar
ClearStar is a technology and service provider to the background
check and medical screening industries, mainly supporting
background screening companies, employers and employees with their
recruitment and employment application decisions. ClearStar
primarily provides employment intelligence to its clients through a
suite of IT applications for day-to-day use in their business.
Employment intelligence aims to improve business insight to support
better recruitment and other decisions affecting employees
generally, by increasing the quality, reliability and visibility of
information available to management.
The IT suite consists of a collection of applications that
utilises data from over 3,000 sources ranging from résumés to
records with local authorities. ClearStar's primary business
involves searching the relevant source of data for specific
employment intelligence information based on clients' bespoke
requirements for its employment applicants and workforce integrity.
ClearStar extracts the required input and this information is then
processed, allowing the client to make a swift decision in respect
of the relevant applicant, thereby minimising bottlenecks in the
hiring process, and/or maintaining timely workforce compliance.
ClearStar is incorporated in the Cayman Islands and is therefore
not subject to the UK Takeover Code and is not subject to the
jurisdiction of the UK Takeover Panel.
6. Information regarding the Hanover Fund and Hanover Bidco
6.1 The Hanover Fund
HAEF II GP S.a.r.l. (the "General Partner") is the general
partner of Hanover Active Equity Fund II, S.C.A. SICAV-RAIF (the
"Hanover Fund"). The Hanover Fund is a Luxembourg investment
company formed to invest in small-cap public companies and private
equity situations, primarily in the UK and Nordics, and currently
has a total of approximately GBP190 million in committed
capital.
Hanover Investors Management (Malta) Limited (the "Hanover
Manager") has been appointed by the General Partner as the manager
of the Hanover Fund and in turn Hanover Investors Management LLP
("Hanover Investors") provides certain investment advisory services
to the Hanover Manager in respect of the Hanover Fund.
Hanover Investors was registered on 7 January 2005 and is
authorised and regulated by the FCA. Matthew Peacock is the
founding partner of Hanover Investors.
6.2 Hanover Bidco
Hanover Bidco is a newly incorporated company formed at the
direction of Hanover Investors (on behalf of the Hanover Fund) for
the purpose of implementing the Offer. Hanover Bidco is currently
wholly owned by Hanover Holdco 1 Limited which is wholly owned by
the Hanover Fund.
Hanover Bidco is a private limited company incorporated in
England and Wales on 4 June 2020 under the UK Companies Act with
registered number 12646050. It has its registered office at 25
Savile Row, London, England, W1S 2ER.
7. Irrevocable Undertakings and Letter of Intent
Hanover Bidco has received irrevocable undertakings from each of
the ClearStar Directors who are interested in ClearStar Shares to
accept (or, in respect of the ClearStar Shares beneficially owned
by that ClearStar Director, procure acceptance of) the Offer. Such
ClearStar Shares amount to, in aggregate, 14,218,325 ClearStar
Shares, representing approximately 39.1 per cent. of ClearStar's
existing issued share capital as at the Latest Practicable Date.
Amongst the ClearStar Directors, Robert Vale has also undertaken to
elect for the Unlisted Share Alternative. These irrevocable
undertakings remain binding even in the event of a higher competing
offer.
Hanover Bidco has received irrevocable undertakings from David
Pattillo and William White to accept (or, in respect of the
ClearStar Shares beneficially owned by them, procure acceptance of)
the Offer. Such ClearStar Shares amount to, in aggregate, 5,175,400
ClearStar Shares, representing approximately 14.2 per cent. of
ClearStar's existing issued share capital as at the Latest
Practicable Date. These irrevocable undertakings remain binding
even in the event of a higher competing offer.
Hanover Bidco has also received a letter of intent from Artemis
Investment Management LLP to procure the acceptance of the Offer in
respect of 791,500 ClearStar Shares.
In total, Hanover Bidco has therefore received irrevocable
undertakings and a letter of intent in respect of 20,185,225
ClearStar Shares, representing approximately 55.5 per cent. of
ClearStar's existing issued share capital as at the Latest
Practicable Date.
Further details in respect of irrevocable undertakings received
by Hanover Bidco are set out in Appendix III of this
announcement.
8. Financing of the Offer
The Cash Consideration due under the Offer will be funded by
cash from the equity subscription of Hanover Bidco A Shares by the
Hanover Fund.
Pursuant to a subscription agreement, the General Partner has
agreed, on behalf of the Hanover Fund, that it or one of its wholly
owned subsidiaries will subscribe for a sufficient number of
Hanover Bidco A Shares at a price of GBP1 per Hanover Bidco A Share
so as to provide Hanover Bidco with the amount required to satisfy
the aggregate Cash Consideration payable in accordance with the
Offer (excluding any ClearStar Shares for which irrevocable
undertakings electing for the Unlisted Share Alternative have been
received by Hanover Bidco as of the date of this announcement). The
obligation to subscribe for Hanover Bidco A Shares is conditional
upon the Offer becoming or having been declared unconditional in
all respects in accordance with its terms.
Hanover Bidco has confirmed to ClearStar that sufficient cash
resources are available to the Hanover Fund to satisfy the total
Cash Consideration payable pursuant to the terms of the Offer. Full
acceptances of the Offer would involve a maximum cash payment of
approximately GBP10.8 million (excluding any ClearStar Shares for
which irrevocable undertakings electing for the Unlisted Share
Alternative have been received by Hanover Bidco as of the date of
this announcement).
9. ClearStar Share Schemes
Under the terms of the Offer, all participants who hold options
under the ClearStar Share Scheme where the exercise price per
ClearStar Share subject to an option is less than the price per
ClearStar Share available under the Offer will are able: (i) either
to exercise their option(s) up to the date of closing of the Offer
and accept the Offer after which any unexercised option(s) will
lapse; or (ii) to agree that their option(s) lapse in exchange for
a payment from Hanover Bidco equal to the excess of the price per
ClearStar Share available under the Offer over the exercise price
of the option(s).
The Offer extends to any ClearStar Shares unconditionally
allotted or issued and any Treasury Shares unconditionally sold or
transferred by ClearStar, in each case, prior to the date on which
the Offer closes (or such earlier date as Hanover Bidco may
determine) as a result of the exercise of options granted under the
ClearStar Share Schemes.
The ClearStar Share Schemes will terminate on closing of the
Offer, and options which have not been exercised prior to that time
will automatically lapse.
Participants in the ClearStar Share Schemes will be contacted
separately regarding the effect of the Acquisition on their rights
under the ClearStar Share Schemes.
10. Cancellation of listing of ClearStar Shares and compulsory acquisition
If the Offer becomes or is declared unconditional in all
respects and Hanover Bidco has by virtue of its shareholdings and
acceptances of its Offer acquired, or agreed to acquire, ClearStar
Shares carrying at least 75 per cent. of the voting rights of
ClearStar, Hanover Bidco intends to procure the making of an
application by ClearStar for cancellation of the admission to
trading of ClearStar Shares on AIM. A notice period of not less
than 20 Business Days prior to the cancellation will commence on
the date on which the Offer becomes or is declared unconditional in
all respects provided Hanover Bidco has obtained 75 per cent. or
more of the voting rights as described above or otherwise as soon
as Hanover Bidco obtains 75 per cent. or more of the voting rights
as described above. ClearStar will announce when the relevant
voting threshold has been attained by Hanover Bidco, that the
notice period has commenced and of the anticipated date of
cancellation of the admission to trading of ClearStar Shares on
AIM. Delisting would significantly reduce the liquidity and
marketability of all ClearStar Shares not assented to the Offer at
that time.
If the Offer becomes or is declared unconditional in all
respects and Hanover Bidco acquires, through acceptances under the
Offer and/or otherwise acquires, 90 per cent. or more of the
ClearStar Shares to which the Offer relates, Hanover Bidco will
exercise its rights pursuant to the provisions of section 88 of the
Cayman Companies Law in connection with the Offer, Hanover Bidco
intends to apply such provisions to acquire compulsorily any
ClearStar Shares not acquired or agreed to be acquired by or on
behalf of Hanover Bidco pursuant to the Offer or otherwise on the
same terms as the Offer.
11. Offer related arrangement
On the Latest Practicable Date, Hanover Bidco, Hanover Investors
and ClearStar entered into the Tender Offer Agreement under which
the parties have agreed that the obligation to make an offer to all
ClearStar Shareholders if Hanover Bidco becomes interested in 30
per cent. or more of voting rights in ClearStar in accordance with
article 46.1 of the articles of association of ClearStar will be
unanimously waived by the ClearStar Independent Directors in
respect of the gathering of irrevocable undertakings in excess of
30 per cent. of the voting rights in ClearStar and in respect of
the making of the Offer on the terms and conditions set out in the
Offer Document.
The Tender Offer Agreement also contains certain undertakings,
assurances and confirmations among the parties, including with
respect to the co-operation of the parties relating to the
implementation of the Offer. Pursuant to the Tender Offer
Agreement, the parties agreed to co-operate and assist each other
in obtaining any clearances required to satisfy the Conditions and
the Tender Offer Agreement also sets out their agreement as to the
treatment, in relation to the Offer, of participants in the
ClearStar Share Schemes.
12. Further information
Your attention is drawn to the further information contained in
the Appendices which form part of this announcement.
Action to be taken
If you wish to accept the Offer in respect of ClearStar Shares
in certificated form (that is not in CREST), please return the Form
of Acceptance/Election duly completed, by post or by hand (during
normal business hours only) to the Receiving Agent, Link Group,
Corporate Actions, The Registry, 34 Beckenham Road, Beckenham, Kent
BR3 4TU, United Kingdom as soon as possible and, in any event, to
be received by no later than 1.00 p.m. on the First Closing Date.
The procedure for acceptance will be set out in the Offer Document
and in the Form of Acceptance/Election.
If you wish to accept the Offer in respect of your ClearStar DIs
(that is in CREST), please send (or, if you are a CREST sponsored
member procure that your CREST sponsor sends) a TTE Instruction in
accordance with the procedure set out in the Offer Document and in
the Form of Acceptance/Election, as soon as possible and in any
event so that the TTE Instruction settles not later than 1.00 p.m.
on the First Closing Date.
The person responsible for making this announcement on behalf of
ClearStar is Nicolas Dufour, General Counsel and Corporate
Secretary.
Enquiries:
Hanover +44 20 7766 8400
Matthew Peacock, Fred Lundqvist
-----------------
ClearStar, Inc. + 1 877 796 2559
-----------------
Robert Vale, Chief Executive Officer
Jennifer Balleza, Chief Financial Officer
-----------------
finnCap Ltd. +44 20 7220 0500
-----------------
Jonny Franklin-Adams, Marc Milmo, Simon Hicks
- Corporate Finance
Andrew Burdis, Tim Harper - ECM
-----------------
Luther Pendragon Ltd. +44 20 7618 9100
-----------------
Harry Chathli, Claire Norbury, Joe Quinlan
-----------------
Addleshaw Goddard LLP and Maples and Calder LLP are retained as
legal advisers to ClearStar. Herbert Smith Freehills LLP is
retained as legal adviser to Hanover Bidco.
Important notice
The statements contained in this announcement are not to be
construed as legal, business, financial or tax advice. If you are
in any doubt about the Offer or the contents of this announcement,
you should consult your own legal, financial and/or tax adviser for
legal, business, financial and/or tax advice.
Further information
This announcement is for information purposes only and is not
intended to and does not constitute, or form part of, any offer to
sell or subscribe for or an invitation to purchase or subscribe for
any securities or the solicitation of any vote or approval in the
United States or any other jurisdiction pursuant to the Offer or
otherwise, nor shall there be any sale, issuance or transfer of
securities of ClearStar in the United States or any other
jurisdiction in contravention of applicable law.
Any acceptance or other response to the Offer should only be
made on the basis of information contained in the Offer Document
(which will contain the full terms and conditions of the Offer) and
the Form of Acceptance/Election. ClearStar Shareholders are advised
to read the formal documentation in relation to the Offer carefully
once it has been dispatched.
Please be aware that addresses, electronic addresses and certain
other information provided by ClearStar Shareholders, persons with
information rights and other relevant persons in connection with
the receipt of communications from ClearStar may be provided to
Hanover Bidco during the offer period.
Overseas jurisdictions
The availability of Hanover Bidco Shares in, and the release,
publication or distribution of this announcement and/or any
accompanying documents (in whole or in part) in jurisdictions other
than the United Kingdom may be restricted by law and therefore any
persons who are subject to the laws of any jurisdiction other than
the United Kingdom should inform themselves about, and observe, any
applicable requirements.
ClearStar Shareholders who are in any doubt regarding such
matters should consult an appropriate independent adviser in the
relevant jurisdiction without delay. Any failure to comply with
such restrictions and/or requirements may constitute a violation of
the securities laws of any such jurisdiction.
This announcement has been prepared for the purposes of
complying with English law, the laws of the Cayman Islands and the
AIM Rules 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 and regulations of any
jurisdiction outside the United Kingdom.
The Offer will be subject to the applicable requirements of
English Law, the laws of the Cayman Islands, the AIM Rules, the UK
Financial Conduct Authority and section 14(e) of, and Regulation
14E under, the Exchange Act. ClearStar is not subject to the UK
Takeover Code or any requirements of the UK Takeover Panel.
Unless otherwise determined by Hanover Bidco, and permitted by
applicable law and regulation, the Offer shall 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 accept the Offer 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 Offer are not being,
and must not be, directly or indirectly, mailed or otherwise
forwarded, distributed or sent in or into or from any Restricted
Jurisdiction where to do so would violate the laws in that
jurisdiction, and persons receiving such documents (including
custodians, nominees and trustees) must not mail or otherwise
forward, distribute or send them in or into or from any Restricted
Jurisdiction where to do so would violate the laws in that
jurisdiction.
Any failure to comply with the applicable restrictions may
constitute a violation of the securities laws of any such
jurisdiction and, to the fullest extent permitted by applicable
law, ClearStar, and Hanover Bidco disclaim any responsibility or
liability for the violation of such restrictions by any person.
The availability of the Offer to ClearStar 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.
Notes to US investors
The Offer is being made in the United States pursuant to Section
14(e) of, and Regulation 14E under, the Exchange Act, and pursuant
to an exemption from the registration requirement of the Securities
Act for transactions not involving a public offering and, in
accordance with the requirements of the laws of the Cayman Islands.
The Hanover Bidco Shares to be issued pursuant to the Offer have
not been and will not be registered under the Securities Act or
under the relevant securities laws of any state or territory or
other jurisdiction of the United States. There will be no public
offering of Hanover Bidco Shares in the United States.
The Offer is being made for the securities of a Cayman Islands
incorporated company with its shares admitted to trading on AIM.
The Offer is not subject to United States disclosure requirements.
The financial information on ClearStar included in this
announcement has been extracted from ClearStar financial statements
which are stated by ClearStar to have been prepared in accordance
with US GAAP.
The receipt of cash pursuant to the Offer by a US holder of
ClearStar Shares may be a taxable transaction for US federal income
tax purposes and under applicable US state and local, as well as
foreign and other, tax laws. Each ClearStar Shareholder is urged to
consult his or her independent professional adviser immediately
regarding the tax consequences of accepting the Offer.
The Offer will be made by Hanover Bidco and no one else.
It may be difficult for US holders of ClearStar Shares to
enforce their rights and any claim arising out of US federal
securities laws, since Hanover Bidco is incorporated under the laws
of England and Wales, and ClearStar is incorporated under the laws
of the Cayman Islands and some of their officers and directors are
residents of non-US jurisdictions. US holders of ClearStar Shares
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 judgment.
This announcement does not constitute an offer of securities for
sale in the United States or an offer to acquire securities in the
United States. No offer to acquire securities or to exchange
securities for other securities has been made, or will be made,
directly or indirectly, in or into, or by the use of the mails of,
or by any means or instrumentality of interstate or foreign
commerce or any facilities of a national securities exchange of,
the United States or any other country in which such offer may not
be made other than: (i) in accordance with the tender offer
requirements under the Exchange Act, or the securities laws of such
other country, as the case may be; or (ii) pursuant to an available
exemption from such requirements.
Neither the US Securities and Exchange Commission nor any US
state securities commission has approved or disapproved the Offer,
passed comment upon the fairness or merits of the Offer or passed
comment upon the adequacy or completeness of this announcement. Any
representation to the contrary is a criminal offence in the United
States.
To the extent permitted by applicable law, in accordance with
normal UK market practice, Hanover Bidco or its nominees or brokers
(acting as agents) or their respective affiliates may from time to
time make certain purchases of, or arrangements to purchase, shares
or other securities in ClearStar, other than pursuant to the Offer,
at any time prior to completion of the Offer. These purchases may
occur either in the open market at prevailing prices or in private
transactions at negotiated prices. Any such purchases, or
arrangements to purchase, will comply with all applicable UK and
Cayman Islands' rules, the AIM Rules and Rule 14e-5 under the
Exchange Act. To the extent required by the applicable law, any
information about such purchases will be disclosed on a next day
basis to a Regulatory Information Service including the Regulatory
News Service on the London Stock Exchange website,
www.londonstockexchange.com. To the extent that such information is
made public in the United Kingdom, this information will also be
deemed to be publicly disclosed in the United States.
Notes regarding Hanover Bidco Shares
The Hanover Bidco Shares to be issued pursuant to the Offer have
not been and will not be registered under the relevant securities
laws of any Restricted Jurisdiction. No prospectus in relation to
the Hanover Bidco Shares has been, or will be, lodged with, or
registered by, the FCA in the United Kingdom. Accordingly, the
Hanover Bidco Shares are not being, and may not be, offered, sold,
resold, delivered, distributed or otherwise transferred, directly
or indirectly in or into the United States, Canada, Australia or
Japan or any other jurisdiction if to do so would constitute a
violation of relevant laws of, or require registration thereof in,
such jurisdiction (absent registration under relevant securities
laws or pursuant to an exemption, if available, from any applicable
registration requirements and otherwise in compliance with all
applicable laws).
The Hanover Bidco Shares are not being, and may not be, offered,
sold, resold, delivered, distributed or otherwise transferred,
directly or indirectly, to the public in the Cayman Islands. For
these purposes, the expression "public" does not include an
exempted or ordinary non-resident company registered under the
Companies Law (2020 Revision), or a foreign company registered
under Part IX of that Law, or any such company acting as general
partner of a partnership registered under the Exempted Limited
Partnership Law (2018 Revision), or any director or officer of the
same acting in such capacity.
Forward-looking statements
This announcement contains certain forward-looking statements,
including statements regarding Hanover Bidco and ClearStar and
their plans, objectives and expected performance. Such statements
relate to events and depend on circumstances that will occur in the
future and are subject to risks, uncertainties and assumptions.
There are a number of factors which could cause actual results and
developments to differ materially from those expressed or implied
by such forward-looking statements, including, among others: the
enactment of legislation or regulation that may impose costs or
restrict activities; the re-negotiation of contracts or licences;
fluctuations in demand and pricing in the employee screening
industry; fluctuations in exchange controls; changes in government
policy and taxations; industrial disputes; war and terrorism. These
forward-looking statements speak only as at the date of this
announcement.
No profit forecasts or estimates
No statement in, or referred to in, this announcement or
incorporated by reference into this announcement is intended as or
shall be deemed to be a profit forecast or estimate for any period.
No statement in, or referred to in, this announcement or
incorporated by reference into this announcement should be
interpreted to mean that cash flow from operations, free cash flow,
earnings or earnings per share for ClearStar, Hanover Bidco or the
enlarged Hanover Bidco Group (as applicable) for the current or
future financial years would necessarily match or exceed the
historic published cash flow from operations, free cash flow,
earnings or earnings per share for ClearStar, Hanover Bidco or the
enlarged Hanover Bidco Group (as applicable).
Publication of this announcement
A copy of this announcement will be available subject to certain
restrictions relating to persons resident in Restricted
Jurisdictions on Hanover Bidco's website at
www.hanoverinvestors.com and ClearStar's website at
www.clearstar.net.
The contents of Hanover Bidco's website and ClearStar's website
are not incorporated into and do not form part of this
announcement.
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.
Definitions
Certain words and terms used in this announcement are defined in
Appendix IV of this announcement.
Time
All times shown in this announcement are London times, unless
otherwise stated.
Appendix I
Conditions and further terms of the Offer
Part A
Conditions of the Offer
The Offer and any dispute or claim arising out of, or in
connection with, it (whether contractual or non-contractual in
nature) will be governed by, and construed in accordance with,
English law and be subject to the jurisdiction of the courts of
England. The Offer will be made on the terms and conditions set out
in the Offer Document.
Conditions
The Offer is subject to the following Conditions:
1. Acceptance Condition
valid acceptances being received by 1.00 p.m. on the First
Closing Date (or such later time(s) and date(s) prior to the Long
Stop Date as Hanover Bidco may decide) in respect of ClearStar
Shares which, taken together with all other ClearStar Shares that
Hanover Bidco (and /or its nominee) shall have acquired or agreed
to acquire, whether pursuant to the Offer or otherwise, carry, in
aggregate, more than 50 per cent. of the voting rights then
exercisable at a general meeting of ClearStar, including for this
purpose, any such voting rights attaching to any ClearStar Shares
that may be unconditionally allotted or issued before the Offer
becomes or is declared unconditional as to acceptances whether
pursuant to the exercise of any outstanding conversion or
subscription rights or otherwise, and for this purpose:
1.1 ClearStar Shares which have been unconditionally allotted
but not issued before the Offer becomes or is declared
unconditional as to acceptances, whether pursuant to the exercise
of any outstanding subscription or conversion rights or otherwise,
shall be deemed to carry the voting rights they will carry upon
issue;
1.2 the acceptances received pursuant to the Offer are or will
be treated as valid acceptances for the purposes of section 88 of
the Cayman Companies Law; and
1.3 all percentages of voting rights and share capital are to be
calculated by reference to the percentage held and in issue outside
treasury,
and in addition, the Offer will be conditional upon the
following Conditions and, accordingly, the Offer will not become or
be declared unconditional in all respects unless the following
Conditions (as amended if appropriate) have been satisfied, or
where relevant, waived by Hanover Bidco;
2. General antitrust, regulatory and third party clearances
2.1 no government or governmental, quasi-governmental,
supranational, statutory, administrative or regulatory body,
authority, court, trade agency, association, institution,
environmental body, Merger Control Authority or any other person or
body in any jurisdiction (each a "Relevant Authority") having
decided to take, instituted, implemented or threatened any action,
proceedings, suit, investigation, enquiry or reference, or made,
proposed or enacted any statute, regulation, order or decision or
taken any other steps and there not continuing to be outstanding
any statute, regulation, order or decision, which would or
might:
2.1.1 make the Offer or the acquisition of any ClearStar Shares,
or control of ClearStar by Hanover Bidco void, illegal or
unenforceable or otherwise restrict, restrain, prohibit, delay or
interfere with the implementation thereof, or impose additional
conditions or obligations with respect thereto, or require material
amendment thereof or otherwise challenge or interfere
therewith;
2.1.2 require or prevent the divestiture by any member of the
ClearStar Group or any company of which 20 per cent. or more of the
voting capital is held by any member of the ClearStar Group or any
partnership, joint venture, firm or company in which any member of
the ClearStar Group may hold a 20 per cent. or more direct or
indirect interest (the "wider ClearStar Group") or by any member of
the Hanover Bidco Group or any company of which 20 per cent. or
more of the voting capital is held by the Hanover Bidco Group or
any partnership, joint venture, firm or company in which any member
of the Hanover Bidco Group may hold a 20 per cent. or more direct
or indirect interest (the "wider Hanover Bidco Group") of all or
any material portion of their respective businesses, assets or
property or impose any material limitation on the ability of any of
them to conduct their respective businesses or own any of their
assets or property;
2.1.3 impose any limitation on or result in a delay in the
ability of any member of the wider ClearStar Group or the wider
Hanover Bidco Group to acquire or to hold or to exercise
effectively any rights of ownership of shares or loans or
securities convertible into shares in any member of the wider
ClearStar Group or of the wider Hanover Bidco Group held or owned
by it or to exercise management control over any member of the
wider ClearStar Group or of the wider Hanover Bidco Group in each
case which is material in the context of the Offer;
2.1.4 require any member of the wider Hanover Bidco Group or the
wider ClearStar Group to acquire or offer to acquire any shares or
other securities in any member of the wider ClearStar Group in each
case which is material in the context of the Offer; or
2.1.5 otherwise materially and adversely affect the assets,
business, profits or prospects of any member of the wider Hanover
Bidco Group or of any member of the wider ClearStar Group in each
case which is material in the context of the Offer,
and all applicable waiting and other time periods during which
any such Relevant Authority could decide to take, institute,
implement or threaten any such action, proceeding, suit,
investigation, enquiry or reference having expired, lapsed or been
terminated;
2.2 all necessary notifications and filings having been made,
all applicable waiting periods (including any extensions thereof)
under any applicable legislation or regulations of any jurisdiction
having expired, lapsed or been terminated, in each case in respect
of the Offer and the acquisition of any ClearStar Shares, or of
control of ClearStar, by Hanover Bidco, and all authorisations,
orders, recognitions, grants, consents, licences, confirmations,
clearances, permissions and approvals ("Authorisations") necessary
in any jurisdiction for, or in respect of, the Offer and the
proposed acquisition of any ClearStar Shares, or of control of
ClearStar, by Hanover Bidco and to carry on the business of any
member of the wider Hanover Bidco Group or of the wider ClearStar
Group having been obtained, in terms and in a form reasonably
satisfactory to Hanover Bidco, from all appropriate Relevant
Authorities and from any persons or bodies with whom any member of
the wider Hanover Bidco Group or the wider ClearStar Group has
entered into contractual arrangements (where the absence of any
such Authorisations would be material and adverse in the context of
the Offer) and all such Authorisations remaining in full force and
effect at the time at which the Offer becomes unconditional in all
respects and, save as Disclosed, Hanover Bidco having no knowledge
of an intention or proposal to revoke, suspend or modify or not to
renew any of the same and all necessary statutory or regulatory
obligations in any jurisdiction having been complied with;
3. Matters arising as a result of any arrangement, agreement etc
3.1 save as Disclosed, there being no provision of any
arrangement, agreement, licence, permit or other instrument to
which any member of the wider ClearStar Group is a party or by or
to which any such member or any of their assets is or may be bound,
entitled or be subject to and which, in consequence of the Offer or
the acquisition or proposed acquisition of any ClearStar Shares, or
control of ClearStar, by Hanover Bidco or otherwise, would or would
reasonably, result in (in each case to an extent which is material
in the context of the wider ClearStar Group when taken as a
whole):
3.1.1 any monies borrowed by, or other indebtedness actual or
contingent of, or grant available to, any such member of the wider
ClearStar Group being or becoming repayable or being capable of
being declared immediately or prior to its or their stated maturity
or the ability of any such member to borrow monies or incur any
indebtedness being inhibited or becoming capable of being
withdrawn;
3.1.2 the creation or enforcement of any mortgage, charge or
other security interest over the whole or any part of the business,
property or assets of any such member or any such security
(whenever arising or having arisen) being enforced or becoming
enforceable;
3.1.3 any such arrangement, agreement, licence or instrument
being terminated or adversely modified or affected, or any action
being taken of an adverse nature or any obligation or liability
arising thereunder;
3.1.4 any assets of any such member being disposed of or
charged, or right arising under which any such asset could be
required to be disposed of or charged, other than in the ordinary
course of business;
3.1.5 the interest or business of any such member of the wider
ClearStar Group in or with any firm or body or person, or any
agreements or arrangements relating to such interest or business,
being terminated or adversely modified or affected;
3.1.6 any such member ceasing to be able to carry on business
under any name under which it presently does so;
3.1.7 the creation of liabilities (actual or contingent) by any such member; or
3.1.8 the financial or trading position of any such member being
prejudiced or adversely affected,
and no event having occurred which, under any provision of any
arrangement, agreement, licence or other instrument to which any
member of the wider ClearStar Group is a party, or to which any
such member or any of its assets may be bound, entitled or subject,
could result in any of the events or circumstances as are referred
to in paragraphs (3.1.1 to 3.1.8) of this condition 3.1;
4. Events since 31 December 2019
4.1 save as Disclosed, no member of the wider ClearStar Group having, since 31 December 2019:
4.1.1 issued, agreed to issue or proposed the issue of
additional shares or securities of any class, or securities
convertible into, or exchangeable for or rights, warrants or
options to subscribe for or acquire, any such shares, securities or
convertible securities (save as,(a) between ClearStar and
wholly-owned subsidiaries of ClearStar before the date hereof or
(b) upon, pursuant to or in respect of the exercise and/or vesting
of any options or awards granted under the ClearStar Share
Schemes), or redeemed, purchased or reduced any part of its share
capital;
4.1.2 sold or transferred or agreed to sell or transfer any Treasury Shares;
4.1.3 recommended, declared, paid or made or proposed to
recommend, declare, pay or make any dividend or other distribution
other than to ClearStar or a wholly-owned subsidiary of
ClearStar;
4.1.4 agreed, authorised, proposed or announced its intention to
propose any merger or demerger or acquisition or disposal of assets
or shares (other than in the ordinary course of trading) or to any
material change in its share or loan capital;
4.1.5 issued, authorised or proposed the issue of any debentures
or incurred any indebtedness or contingent liability;
4.1.6 acquired or disposed of or transferred, mortgaged or
encumbered any asset or any right, title or interest in any asset
(other than in the ordinary course of trading);
4.1.7 other than in the ordinary course of business, entered
into or varied or announced its intention to enter into or vary any
contract, arrangement or commitment (whether in respect of capital
expenditure or otherwise) which is of a long-term or unusual nature
or involves or could involve an obligation of a nature or
magnitude;
4.1.8 entered into or proposed or announced its intention to
enter into any reconstruction, amalgamation, transaction or
arrangement (otherwise than in the ordinary course of
business);
4.1.9 taken any action nor having had any steps taken or legal
proceedings started or threatened against it for its winding-up or
dissolution or for it to enter into any arrangement or composition
for the benefit of its creditors, or for the appointment of a
receiver, administrator, trustee or similar officer if it or any of
its assets (or any analogous proceedings or appointment in any
overseas jurisdiction) (in each case to an extent which is material
in the context of the wider ClearStar Group taken as a whole);
4.1.10 been unable, or admitted in writing that it is unable, to
pay its debts 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;
4.1.11 entered into or varied or made any offer to enter into or
vary the terms of any service agreement or arrangement with any of
the ClearStar Directors to a material extent;
4.1.12 waived, compromised or settled any claim which is
material in the context of the wider ClearStar Group taken as a
whole; or
4.1.13 entered into, or made an offer (which remains open for
acceptance) to enter into, any agreement, arrangement or commitment
or passed any resolution with respect to any of the transactions or
events referred to in this paragraph 4.1;
5. No adverse change, litigation, or similar
5.1 since 31 December 2019, save as Disclosed:
5.1.1 there having been no adverse change in the business,
assets, financial or trading position or profits or prospects of
any member of the wider ClearStar Group;
5.1.2 no litigation, arbitration proceedings, prosecution or
other legal proceedings having been instituted, announced or
threatened by or against or remaining outstanding against any
member of the wider ClearStar Group and no enquiry or investigation
by or complaint or reference to any Relevant Authority against or
in respect of any member of the wider ClearStar Group having been
threatened, announced or instituted or remaining outstanding in
each case which would have a material adverse effect on the wider
ClearStar Group when taken as a whole; and
5.1.3 no contingent or other liability having arisen or been
incurred which might reasonably be expected to have a material
adverse effect on the wider ClearStar Group when taken as a
whole;
5.2 Hanover Bidco not having discovered that, save as Disclosed,
the financial, business or other information concerning the wider
ClearStar Group which has been Disclosed at any time by or on
behalf of any member of the wider ClearStar Group whether publicly
(by the delivery of an announcement to a Regulatory Information
Service) or to Hanover Bidco or its professional advisers, either
contains a misrepresentation of fact or omits to state a fact
necessary to make the information contained therein not misleading
and has a material adverse effect on the wider ClearStar Group when
taken as a whole;
6. Anti-corruption and sanctions
6.1 any past or present member, director, officer or employee of
the wider ClearStar Group is engaging in or has at any time during
the course of such person's employment with, or performance of
services for or on behalf of, the wider ClearStar Group engaged in
an activity, practice or conduct which would constitute an offence
under the UK Bribery Act 2010, the US Foreign Practices Act of 1977
or any other applicable anti-corruption legislation or
regulation;
6.2 any past or present member, director, officer or employee of
the wider ClearStar Group is engaging in or has at any time engaged
in any act of bribery or 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, the US Foreign Corrupt Practices Act 1977, as amended, or any
other anti-corruption legislation applicable to the wider ClearStar
Group, in each case which is material in the context of the wider
ClearStar Group when taken as a whole;
6.3 any asset of any member of the wider ClearStar Group
constitutes criminal property as defined by section 340(3) of the
Proceeds of Crime Act 2002 (but disregarding paragraph (b) of that
definition);
6.4 any past or present member, director, officer or employee of
the ClearStar Group has engaged in any business with, made any
investments in, or made any funds or assets available to or
received any funds or asset from: (a) any government, entity or
individual in respect of which US, UK or European Union persons, or
persons operating in those territories, are prohibited from
engaging in activities or doing business, or from receiving or
making available funds or economic resources, by US, UK or European
Union laws or regulations, including the economic sanctions
administered by the United States Office of Foreign Assets Control
or HM Revenue & Customs; or (b) any government, entity or
individual named by any of the economic sanctions of the United
Nations, the United States, the United Kingdom, the European Union
or any of its member states, save that this shall not apply if and
to the extent it is or would be unenforceable by reason of breach
of any applicable Blocking Law; or
6.5 any member of the ClearStar Group being engaged in any
transaction which would cause Hanover Bidco to be in material
breach of any law or regulation upon its acquisition of ClearStar,
including the economic sanctions of the United States Office of
Foreign Assets Control, or HM Revenue & Customs, or any
government, entity or individual targeted by any of the economic
sanctions of the United Nations, the United States, the United
Kingdom, the European Union or any of its member states, save that
this shall not apply if and to the extent it is or would be
unenforceable by reason of breach of any applicable Blocking
Law;
7. Environmental
7.1 any past or present member of the wider ClearStar Group has
not complied with all applicable legislation or regulations of any
jurisdiction or any notice or requirement of any Relevant Authority
with regard to the storage, disposal, discharge, spillage, leak or
emission of any waste or hazardous substance or any substance
likely to impair the environment or harm human health which
non-compliance would be likely to give rise to any liability
(whether actual or contingent) on the part of any member of the
wider ClearStar Group which is material in the context of the wider
ClearStar Group when taken as a whole;
7.2 there has been a disposal, spillage, emission, discharge or
leak of waste or hazardous substance or any substance likely to
impair the environment or harm human health on, or from, any land
or other asset now or previously owned, occupied or made use of by
any past or present member of the wider ClearStar Group, or in
which any such member may now or previously have had an interest,
which would be likely to give rise to any liability (whether actual
or contingent) on the part of any member of the wider ClearStar
Group which is material in the context of the wider ClearStar Group
when taken as a whole;
7.3 there is or is likely to be any obligation or liability
(whether actual or contingent) to make good, repair, reinstate or
clean up any property now or previously owned, occupied or made use
of by any past or present member of the wider ClearStar Group or in
which any such member may now or previously have had an interest
under any environmental legislation or regulation or notice,
circular or order of any Relevant Authority in any jurisdiction
which is material in the context of the wider ClearStar Group when
taken as a whole; or
7.4 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, now
or previously manufactured, sold or carried out by any past or
present member of the wider ClearStar Group which claim or claims
would be likely to affect adversely any member of the wider
ClearStar Group which is material in the context of the wider
ClearStar Group when taken as a whole.
Part B
WaIver and invocation of Conditions
1. To the extent permitted by law, Hanover Bidco reserves the
right to waive, in whole or in part, all or any of the conditions
set out in paragraphs 2 to 7 (inclusive) of Part A of this Appendix
I , in its sole discretion.
2. The Offer will lapse unless all of the conditions set out in
paragraphs 1 to 7 (inclusive) of Part A of this Appendix I have
been fulfilled or where appropriate, have been determined by
Hanover Bidco to be waived or to be or remain satisfied, by
midnight on the 21st day after the later of:
2.1 the First Closing Date; and
2.2 the date on which the Offer becomes or is declared unconditional as to acceptances,
or, in each case, such later date as Hanover Bidco and ClearStar
may agree, being no later than the Long Stop Date.
3. Subject to paragraph 4 of this Part B, Hanover Bidco shall be
under no obligation to waive (if capable of waiver), to determine
to be or remain satisfied or to treat as fulfilled any of the
Conditions set out in paragraphs 2 to 7 (inclusive) of Part A of
this Appendix I by a date earlier than the latest date specified
above in paragraph 2 of this Part B for the fulfilment or waiver
thereof, notwithstanding that the other Conditions may at such
earlier date have been waived or fulfilled and that there are at
such earlier date no circumstances indicating that any of such
Conditions may not be capable of fulfilment.
4. Hanover Bidco has undertaken to ClearStar pursuant to the
Tender Offer Agreement to waive or to seek to invoke any
unfulfilled Conditions to the Offer not later than 8.00 a.m. on the
Business Day after the date that the Acceptance Condition set out
in paragraph 1 of Part A of this Appendix I has become or been
declared satisfied.
Part C
Form of the offer
Hanover Bidco reserves the right, with the consent of ClearStar,
to elect to implement the acquisition of the ClearStar Shares by
way of a Scheme or a Merger.
Appendix II
Information on the Unlisted Share Alternative
1. Terms
As an alternative to all of the Cash Consideration to which they
would otherwise be entitled under the Offer, eligible ClearStar
Shareholders together with their connected family trusts holding 25
per cent. or more of the voting rights in ClearStarand who execute
an Accredited Investor Letter will be able to elect for the
Unlisted Share Alternative to receive Hanover Bidco Shares in
respect of all (but not part only) of their holding of ClearStar
Shares, subject to the terms and conditions of the Unlisted Share
Alternative.
As at the Latest Practicable Date, Bidco was wholly owned by
Hanover Holdco 1 Limited which is wholly owned by the Hanover Fund.
Hanover Holdco 1 Limited holds Bidco A Shares. Following the Offer
becoming or being declared unconditional in all respects, neither
the Hanover Fund or the Hanover Investors will be issued with any
Hanover Bidco Shares, but may subsequently subscribe for further
Hanover Bidco A Shares.
Fractions of Hanover Bidco Ordinary Shares will not be allotted
or issued pursuant to the Offer to ClearStar Shareholders and
entitlements will instead be rounded down to the nearest whole
number of Hanover Bidco Ordinary Shares. No cash consideration will
be paid for fractional entitlements.
The Hanover Bidco Shares to be issued under the Unlisted Share
Alternative will be issued credited as fully paid and will rank
pari passu in all economic respects with all the Hanover Bidco A
Shares, including the right to receive in full all dividends and
other distributions, if any, declared, made or paid after the date
hereof.
The Hanover Bidco Shares will be B ordinary shares of GBP1 each
in the capital of Hanover Bidco and they will:
-- rank pari passu in all economic respects with all the Hanover Bidco A Shares;
-- not be listed or traded on the AIM or any other regulated exchange or market;
-- be non-transferable (except with Hanover Bidco's consent or
to family members or family trusts);
-- not carry any voting rights;
-- not give the right to be represented at the board of directors of Hanover Bidco;
-- be subject to a customary drag-along right for the benefit of
the holders of Hanover Bidco A Shares;
-- benefit from acustomary tag-along right;
-- entitle their holder during a period of six months from when
the Offer becomes or is declared unconditional in all respects to
request the holders of Hanover Bidco A Shares to purchase their
Hanover Bidco Shares at a price in cash equal to the Cash
Consideration;
-- benefit from customary information rights; and
-- benefit from certain limited minority protections, including
a veto (requiring the approval of a majority of Hanover Bidco
Shares) to certain corporate actions, including an issue of shares
or other securities on a non pre-emptive basis where such holder
has not been offered the opportunity to subscribe
pre-emptively.
2. Availability
The Unlisted Share Alternative will only be implemented if the
Offer becomes or has been declared unconditional in all respects in
accordance with its terms.
The availability of the Unlisted Share Alternative to certain
overseas shareholders will be restricted. If Hanover Bidco believes
that an election for the Unlisted Share Alternative by any
ClearStar Shareholder may infringe applicable legal or regulatory
requirements, or may result in a requirement for a registration
under the Securities Act, the Exchange Act or any other securities
laws in the United States, or the securities laws of any other
Restricted Jurisdiction, Hanover Bidco will have the right to deem
that such ClearStar Shareholder has not validly elected for the
Unlisted Share Alternative and such ClearStar Shareholder will
instead receive the Cash Consideration in accordance with the terms
of the Offer.
Robert Vale, the CEO of ClearStar, has confirmed that he has
agreed to participate in the Unlisted Share Alternative and
subscribe for the following number of Hanover Bidco Shares:
Director Total of ClearStar Number of Hanover Bidco
Shares Shares
Robert Vale 9,693,000 3,877,200
3. Risk factors
The Hanover Bidco Shares will be unlisted, not admitted to
trading on any stock exchange, not capable of being deposited in an
ADR programme and will be subject to, among other things,
restrictions on transfer.
Eligible ClearStar Shareholders should ascertain whether
acquiring or holding the Hanover Bidco Shares is affected by the
laws of the relevant jurisdiction in which they reside and consider
whether Hanover Bidco Shares are a suitable investment in light of
their own personal circumstances and are, therefore, strongly
recommended to seek their own independent financial, tax and legal
advice in light of their own particular circumstances and
investment objectives before deciding whether to elect for the
Unlisted Share Alternative. Any decision to elect for the Unlisted
Share Alternative should be based on independent financial, tax and
legal advice and a full consideration of this announcement
(including the factors listed below).
The attention of eligible ClearStar Shareholders, who may be
considering electing for the Unlisted Share Alternative, is drawn
to certain risk factors and other investment considerations
relevant to such an election, which include, inter alia, the
following:
-- Hanover Bidco is an unlisted private limited company and
there currently is, and there is expected to continue to be, no
market in Hanover Bidco Shares;
-- Hanover Bidco Shares will not be listed or traded on the AIM
or any other regulated exchange or market;
-- Hanover Bidco Shares are non-transferable (except with
Hanover Bidco's consent or to family members or a family
trust);
-- Hanover Bidco will not be subject to the disclosure,
corporate governance and shareholder protection requirements of any
recognised investment exchange;
-- Hanover Bidco Shares will not carry any voting rights and
ClearStar Shareholders electing for the Unlisted Share Alternative
will, thus, have very limited influence over decisions made by
Hanover Bidco;
-- the Hanover Bidco Shares held by eligible electing ClearStar
Shareholders will represent a minority interest in Hanover Bidco
and Hanover Fund will have control over Hanover Bidco;
-- Hanover Bidco Shares will not give the right to be
represented at the board of directors of Hanover Bidco;
-- the structuring and future operation of Hanover Bidco may not
be tax efficient for electing ClearStar Shareholders. ClearStar
Shareholders considering electing to receive Unlisted Share
Alternative should seek their own tax advice;
-- further issues of Hanover Bidco Shares or other shares in
Hanover Bidco may have a dilutive effect on ClearStar Shareholders
who elect to become holders of Hanover Bidco Ordinary Shares;
and
-- no dividends or other distributions are currently
contemplated in respect of the Hanover Bidco Shares.
Appendix III
Information on the Irrevocable Undertakings AND LETTER OF
INTENT
1. Irrevocable undertakings electing for the Unlisted Share
Alternative from ClearStar Directors
Robert Vale, the CEO of ClearStar, has given an irrevocable
undertaking to, among other things:
-- accept or procure acceptance of the Offer: and
-- elect for the Unlisted Share Alternative,
in relation to the ClearStar Shares currently held by him, as
well as any further ClearStar Shares which he may become the
registered or beneficial owner of or otherwise interested in.
This irrevocable undertaking remains binding even in the event
of a higher competing offer.
Name Number of ClearStar Percentage of ClearStar
Shares issued share capital
Robert Vale 9,693,000 26.7
2. Irrevocable undertakings electing for the Cash Consideration from ClearStar Directors
The following ClearStar Directors have given irrevocable
undertakings to, among other things, to accept or procure
acceptance of the Offer in relation to the following ClearStar
Shares currently held by them, as well as any further ClearStar
Shares which they may become the registered or beneficial owner of
or otherwise interested in. These ClearStar Directors are not
eligible to validly elect for the Unlisted Share Alternative. These
irrevocable undertakings remain binding even in the event of a
higher competing offer.
Name Number of ClearStar Percentage of ClearStar
Shares issued share capital
Barney Quinn 309,325 0.85
Kenneth Dawson 4,090,000 11.2
Robert Vale 9,693,000 26.7
Andr é Schnabl 126,000 0.35
3. Irrevocable undertakings from other ClearStar Shareholders
The following ClearStar Shareholders have given an irrevocable
undertakings to, among other things, accept or procure acceptance
of the Offer in relation to the following ClearStar Shares
currently held by them, as well as any further ClearStar Shares
which they may become the registered or beneficial owner of or
otherwise interested in. These ClearStar Shareholders are not
eligible validly to elect for the Unlisted Share Alternative. These
irrevocable undertakings remains binding even in the event of a
higher competing offer.
Name Number of ClearStar Percentage of ClearStar
Shares issued share capital
William White (together
with shares held
by his wife) 3,811,500 10.4
David Pattillo 1,363,900 3.75
4. Irrevocable undertakings from other ClearStar Shareholders
Artemis Investment Management LLP has given a letter of intent
to Hanover Bidco to procure the acceptance of the Offer in respect
of 791,500 ClearStar Shares.
Save for the irrevocable undertakings and letter of intent
referred to in this Appendix III, and the Tender Offer Agreement,
Hanover Bidco does not have any arrangement with any person
relating to relevant securities of ClearStar.
Appendix IV
DEFINITIONS
The following definitions apply throughout this announcement
unless the context requires otherwise:
"Accredited Investor the letter in relation to the Offer
Letter" whereby a US person represents and
warrants to Hanover Bidco, among other
things, that he/she is an "accredited
investor" for the purposes of the Securities
Act
"Acquisition" the proposed acquisition by Hanover
Bidco of the entire issued and to be
issued share capital of ClearStar to
be implemented by means of the Offer
or, should Hanover Bidco so elect,
by means of a Scheme or Merger
"AIM" the Alternative Investment Market of
the London Stock Exchange
"AIM Rules" the AIM Rules for companies issued
by the London Stock Exchange
"Australia" the Commonwealth of Australia, its
states, territories and possessions
"Blocking Law" any provision of Council Regulation
(EC) No. 2271/1996 of 22 November 1996
(or any law implementing such Regulation
in any Member State of the European
Union or the United Kingdom) or any
similar blocking or anti-boycott law
"Business Day" a day (other than a Saturday or Sunday)
on which banks are open for general
business in London
"Canada" Canada, its provinces and territories
and all areas subject to its jurisdiction
and any political sub-division thereof
"Cash Consideration" the consideration of 40 pence per ClearStar
Share, payable in cash in accordance
with the terms and conditions of the
Offer
"Cayman Companies Law" the Companies Law (2020 Revision) of
the Cayman Islands (as amended)
"certificated" or "in a share or other security which is
certificated form" not in uncertificated form (that is,
not in CREST)
"ClearStar" ClearStar, Inc. an exempted company
incorporated in the Cayman Islands
with limited liability with number
MC-287331
"ClearStar DI" the dematerialised depositary interests
which are transferred through the CREST
system and represent the underlying
ClearStar Shares that are held on trust
by the depositary for the holders of
the depositary interests
"ClearStar Directors" the directors of ClearStar as at the
date of this announcement
"ClearStar Group" ClearStar and its subsidiary undertakings
"ClearStar Independent Barney Quinn, André Schnabl and
Directors" Kenneth Dawson
"ClearStar Share Schemes" any applicable employee share plans
of ClearStar
"ClearStar Shareholders" holders of ClearStar Shares from time
or "Shareholders" to time
"ClearStar Shares" the existing unconditionally allotted
or issued and fully paid ordinary shares
of US$0.0001 each in the capital of
ClearStar and any further such shares
which are unconditionally allotted
or issued and fully paid, and any Treasury
Shares unconditionally sold or transferred
by ClearStar, in each case, before
the date on which the Offer closes
(or such earlier date(s) as Hanover
Bidco may determine), including any
such shares so unconditionally allotted
or issued pursuant to the exercise
of options granted under the ClearStar
Share Schemes
"Closing Price" the closing price of a ClearStar Share
as derived from the daily official
list of the London Stock Exchange on
any particular date
"Conditions" the conditions to the Offer set out
in of Part A of Appendix I of this
announcement, and a "Condition" means
any one of them
"CREST" the relevant system (as defined in
the Regulations) in respect of which
Euroclear is the Operator (as defined
in the Regulations)
"CREST sponsor" a CREST participant admitted to CREST
as a CREST sponsor
"CREST sponsored member" a CREST member admitted to CREST as
a sponsored member
"Depositary" Link Market Services Trustees Limited
"Depositary Interests" the dematerialised depositary interests
or "DIs" in respect of ClearStar Shares issued
by the Depositary
"Disclosed" information which has been:
(i) fairly disclosed by, or on behalf
of, ClearStar to Hanover Bidco on or
before the date of this announcement;
(ii) disclosed in the annual report
and accounts for ClearStar for the
financial year ended 31 December 2019;
(iii) disclosed in the interim results
for the six months ended 30 June 2020;
(iv) disclosed in any announcement
to a RIS by, or on behalf of, ClearStar,
prior to the publication of this announcement;
or
(v) disclosed in this announcement.
"Euroclear" Euroclear UK & Ireland Limited, the
operator of CREST
"Exchange Act" the US Securities Exchange Act of 1934,
as amended
"FCA" the UK Financial Conduct Authority
or its successor from time to time
"finnCap " finnCap Limited, financial adviser
and nominated adviser to ClearStar
"First Closing Date" the date which is 20 US Business Days
after posting of the Offer Document
"Form of Acceptance/Election" the form of acceptance and election
for use by ClearStar Shareholders who
hold their ClearStar Shares in certificated
form in connection with the Offer
"General Partner" HAEF II GP S.a.r.l.
"Hanover Bidco" Hanover Bidco 1 Limited
"Hanover Bidco Group" Hanover Bidco and its subsidiary undertakings
"Hanover Bidco A Shares" A ordinary shares of GBP1 each in the
capital of Hanover Bidco
"Hanover Bidco Shares" non-voting B ordinary shares of GBP1
each in the capital of Hanover Bidco
to be issued credited as fully paid
pursuant to the Unlisted Share Alternative
"Hanover Fund" Hanover Active Equity Fund II, S.C.A.
SICAV-RAIF
"Hanover Investors" Hanover Investors Management LLP
"Hanover Manager" Hanover Investors Management (Malta)
Limited
"Latest Practicable 15 September 2020, being the last Business
Date" Day prior to the date of this announcement
"London Stock Exchange" London Stock Exchange plc
"Long Stop Date" 31 December 2020
"Merger" a statutory merger under Part XVI of
the Cayman Companies Law
"Merger Control Authority" any national, supra-national or regional,
government or governmental, quasi-governmental,
statutory, regulatory or investigative
body or court, in any jurisdiction,
responsible for the review and/or approval
of mergers, acquisitions, concentrations,
joint ventures, or any other similar
matter
"Offer" the recommended offer to be made by
Hanover Bidco to acquire all of the
issued and to be issued ClearStar Shares
subject to the terms and the conditions
to be set out in the Offer Document
and the Form of Acceptance/Election
relating thereto, and including, where
the context so permits, the Unlisted
Share Alternative, and, where the context
so requires, any subsequent revision,
variation, extension or renewal of
such offer
"Offer Document" the document to be sent to ClearStar
Shareholders on behalf of Hanover Bidco
containing the terms and conditions
of the Offer
"Receiving Agent" Link Group, a trading name of Link
Market Services Limited
"Regulations" the Uncertificated Securities Regulations
2001 (S.I. 2001/3755)
"Regulatory Information a primary information provider which
Service" or "RIS" has been approved by the FCA to disseminate
regulated information
"Restricted Jurisdiction" any jurisdiction where local laws or
regulations may result in a significant
risk of civil, regulatory or criminal
exposure if information concerning
the Offer is sent or made available
to ClearStar Shareholders in that jurisdiction
including Australia, Canada, Japan
and the United States
"Scheme" a scheme under section 86 of the Cayman
Companies Law
"Securities Act" the US Securities Act of 1933, as amended
"subsidiary" and "subsidiary have the meanings given to them in
undertaking" the UK Companies Act
"Tender Offer Agreement" means the tender offer agreement entered
into between Hanover Bidco, the Hanover
Fund, Hanover Investors and ClearStar
on the Latest Practicable Date to regulate
their conduct in respect of the Offer
"Treasury Shares" ClearStar Shares held in the name of
ClearStar as treasury shares in accordance
with the Cayman Companies Law
"TTE Instruction" a Basic Offer TTE Instruction or an
Alternative TTE instruction (as the
context requires)
"UK" or "United Kingdom" the United Kingdom of Great Britain
and Northern Ireland
"UK Companies Act" the Companies Act 2006
"UK Takeover Code" the City Code on Takeovers and Mergers
"UK Takeover Panel" the Panel on Takeovers and Mergers
"uncertificated" or a share or other security title to
"in uncertificated form" which is recorded on the relevant register
of the share or security concerned
as being held in uncertificated form
in CREST and title to which, by virtue
of the Regulations, may be transferred
by means of CREST
"Unlisted Share Alternative" the alternative whereby certain eligible
ClearStar Shareholders who validly
accept the Offer and execute an Accredited
Investor Letter may irrevocably elect
to receive Hanover Bidco Shares instead
of the Cash Consideration to which
they would otherwise have been entitled
under the Offer, as referred to in
Appendix II of this announcement
"United States of America", the United States of America, its territories
"US" or "United States" and possessions, any state of the United
States of America, the District of
Columbia, and all other areas subject
to its jurisdiction
"US Business Day" a day (other than a Saturday or Sunday)
on which banks are open for general
business in New York
"US Persons" as defined in Regulation S under the
Securities Act
"US$" or "dollar" dollar, the lawful currency for the
time being of the US and references
to "cent" and "c" shall be construed
accordingly
"GBP" or "Sterling" pounds sterling, the lawful currency
for the time being of the UK and references
to "pence" and "p" shall be construed
accordingly
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