TIDMECSC
RNS Number : 9740U
Daisy Corporate Services Trading Ld
31 March 2023
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 OF
THAT JURISDICTION.
THIS ANNOUNCEMENT IS DEEMED BY DAISY CORPORATE SERVICES TRADING
LIMITED AND ECSC GROUP PLC TO CONTAIN INSIDE INFORMATION AS
STIPULATED UNDER THE MARKET ABUSE REGULATION NO 596/2014
(INCORPORATED INTO UK LAW BY VIRTUE OF THE EUROPEAN UNION
(WITHDRAWAL) ACT 2018 AS AMED BY VIRTUE OF THE MARKET ABUSE
(AMMENT) (EU EXIT) REGULATIONS 2019). UPON THE PUBLICATION OF THIS
ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INSIDE
INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.
FOR IMMEDIATE RELEASE
31 March 2023
RECOMMED CASH ACQUISITION
of
ECSC GROUP PLC
by
DAISY CORPORATE SERVICES TRADING LIMITED
to be effected
by way of a scheme of arrangement
under Part 26 of the Companies Act 2006
Summary
-- The boards of Daisy Corporate Services Trading Limited
("Daisy") and ECSC Group plc ("ECSC" or the "Company") are pleased
to announce that they have reached agreement on the terms of a
recommended cash acquisition by Daisy of the entire issued and to
be issued share capital of ECSC (the "Acquisition").
-- It is intended that the Acquisition will be implemented by
way of a Court-sanctioned scheme of arrangement under Part 26 of
the Companies Act and will be subject to approval of the Scheme at
the Court Meeting and the Resolutions at the General Meeting.
-- Under the terms of the Acquisition, each ECSC Shareholder
will be entitled to receive:
54.02 pence in cas h for each ECSC Share held
-- The Acquisition values the entire issued and to be issued
share capital of ECSC at approximatel y GBP5.4 million.
-- The Cash Consideration represents a premium of approximately:
o 170.1 per cent. to the closing price of 20.0 pence per ECSC
Share on the Last Practicable Date;
o 138.0 per cent. to the volume weighted average price per ECSC
Share for the three month period ended on the Last Practicable
Date; and
o 46.0 per cent. to the volume weighted average price per ECSC
Share for the twelve month period ended on the Last Practicable
Date.
-- The Daisy Directors believe that ECSC represents an
opportunity to acquire a cyber focused company which is a strong
fit with the existing business and operations of the Cyber &
Operational Resilience Division of Daisy Corporate Services.
Enhancing the Daisy Corporate Services cyber capability is a key
strategic priority to facilitate DCS's growth plans and to meet
customer demand. ECSC provides highly complementary services
(within high growth markets) to DCS's current Operational
Resilience offerings. In addition, the Acquisition will provide
significant opportunities for cross-selling into Daisy's wider
Managed Service customer base.
-- The Cash Consideration payable to Scheme Shareholders under
the terms of the Acquisition will be funded from existing cash
resources of the Daisy Group.
Recommendation
-- The ECSC Directors, who have been so advised by Allenby
Capital Limited ("Allenby") as to the financial terms of the
Acquisition, unanimously consider the terms of the Acquisition to
be fair and reasonable. In providing financial advice to the ECSC
Directors, Allenby has taken into account the commercial
assessments of the ECSC Directors. Allenby is providing independent
financial advice to the ECSC Directors for the purposes of Rule 3
of the Code.
-- Accordingly, the ECSC Directors intend to recommend
unanimously that ECSC Shareholders vote, or procure votes, in
favour of the Scheme at the Court Meeting and the Resolutions to be
proposed at the General Meeting (or, if (with the consent of the
Takeover Panel) Daisy exercises its right to implement the
Acquisition by way of a Takeover Offer, accept, or procure
acceptances of, such Takeover Offer).
-- Under the terms of his service contract, Matthew Briggs
(Chief Executive Officer of ECSC) is contractually entitled to a
cash bonus of GBP 167,143 up on the sale of ECSC which is
calculated as follows: (i) 50% of his base salary plus car
allowance; and (ii) 1.5% of the purchase price payable on the sale
of ECSC. This bonus would be payable to Matthew Briggs upon the
Scheme becoming Effective which is expected in early June 2023.
Irrevocable undertakings
-- All of the ECSC Directors who hold ECSC Shares (in a personal
capacity or through members of their immediate families, related
trusts or their nominee or nominees) have irrevocably undertaken to
vote, or procure votes, in favour of the Scheme at the Court
Meeting and the Resolutions to be proposed at the General Meeting
(or, if (with the consent of the Takeover Panel) Daisy exercises
its right to implement the Acquisition by way of a Takeover Offer,
to accept, or procure acceptances of, such Takeover Offer) in
respect of their own beneficial holdings (and the beneficial
holdings of members of their Immediate families or related trusts
or nominee(s)) in respect o f 2,686,544 ECSC Shares, representing,
in aggregate, 26.85 per cent. of the ECSC Shares in issue as at the
close of business on the Last Practicable Date.
-- In addition to the irrevocable undertakings from the ECSC
Directors, Daisy has also received irrevocable undertakings to
vote, or procure votes, in favour of the Scheme at the Court
Meeting and the Resolutions to be proposed at the General Meeting
(or, if (with the consent of the Takeover Panel) Daisy exercises
its right to implement the Acquisition by way of a Takeover Offer,
to accept, or procure acceptances of, such Takeover Offer) from
ECSC Shareholders (other than the ECSC Directors and members of
their immediate families, related trusts or their nominee or
nominees) in respect of 910,764 ECSC Shares, in aggregate,
representing approximately 9.10 per cent. of the ECSC Shares in
issue as at the close of business on the Last Practicable Date.
-- Therefore, as at the date of this Announcement, Daisy has
received irrevocable undertakings to vote, or procure votes, in
favour of the Scheme at the Court Meeting and the Resolutions to be
proposed at the General Meeting (or, if (with the consent of the
Takeover Panel) Daisy exercises its right to implement the
Acquisition by way of a Takeover Offer, to accept, or procure
acceptances of, such Takeover Offer) with respect to a total of
3,597,308 ECSC Shares, in aggregate, representing approximately
35.95 per cent. of the ECSC Shares in issue as at the close of
business on the Last Practicable Date.
-- Full details of the irrevocable undertakings received by
Daisy are set out in Appendix III to this Announcement.
Scheme Document
-- It is intended that the Acquisition will be implemented by
way of a Court-sanctioned scheme of arrangement under Part 26 of
the Companies Act (or, if Daisy elects and with the consent of the
Takeover Panel, a Takeover Offer). The purpose of the Scheme is to
provide for Daisy to become the owner of the entire issued and to
be issued ordinary share capital of ECSC. The Scheme will be put to
ECSC Shareholders at the Court Meeting and at the General Meeting.
In order to become Effective, the Scheme must be approved by a
majority in number of the ECSC Shareholders voting at the Court
Meeting, either in person or by proxy, representing at least 75 per
cent. in value of the Scheme Shares voted. The Resolutions required
to implement the Scheme must also be approved by the requisite
majority of ECSC Shareholders at the General Meeting.
-- The Acquisition is subject to the Conditions and further
terms set out in Appendix I to this Announcement and to be set out
in the Scheme Document.
-- Further details of the Acquisition will be contained in the
Scheme Document which is intended to be sent to ECSC Shareholders,
along with the notices of the Court Meeting and the General Meeting
and the Forms of Proxy, as soon as reasonably practicable and, in
any event within 28 days of the date of this Announcement, unless
Daisy and ECSC otherwise agree, and the Takeover Panel consents, to
a later date. The Scheme Document will be made available by ECSC
and Daisy at www.ecsc.co.uk, and
www.daisyuk.tech/offer-for-ecsc-group-plc/, subject to certain
restrictions to persons in Restricted Jurisdictions).
-- Subject to the Conditions and certain further terms set out
in Appendix I to this Announcement, the Scheme is expected to
become Effective in early June 2023.
Comments on the Acquisition
Commenting on the Acquisition, Matthew Briggs, Chief Executive
Officer of ECSC, said:
"As a board, having carefully considered the pros and cons of
being acquired by Daisy, we determined the pros significantly
outweigh the cons. Whilst the strategy for ECSC is underway, there
are some inevitable headwinds from increased competition, pricing
pressures and wage inflation especially in the technology sector.
Taking these factors into account, together with a strategy which
can only be executed over a 12-24 month period due to the nature of
'big ticket' contract negotiations, the opportunity to be acquired
by Daisy at a significant share price premium and a 'ready made'
cross sell client base makes this acquisition very attractive for
ECSC.
"We are excited by the prospect of what can be achieved as Daisy
and ECSC come together. Under Daisy ownership the ECSC Directors
believe there is a very real prospect that ECSC can become the UK's
leading cyber security organisation, providing excellent career
opportunities and delivering best in class cyber solutions for new
and existing clients."
Neil Thompson, Chief Executive Officer of Daisy said:
"We're really excited about adding ECSC's longstanding and
highly complementary Cyber expertise to Daisy's existing
Operational Resilience Division, and wider Managed Service
business.
Our people are looking forward to working together, and the
skill sets the ECSC team bring will further enhance the market
leading IT services we provide to our customers."
This summary should be read in conjunction with, and is subject
to, the full text of this Announcement and its Appendices.
In particular, the Acquisition is subject to the Conditions and
further terms as set out in Appendix I (and the full terms and
conditions to be set out in the Scheme Document). Appendix II
contains details of sources of information and bases of calculation
contained in this Announcement. Appendix III contains certain
details relating to the irrevocable undertakings referred to in
this Announcement. Appendix IV contains definitions of certain
terms used in this Announcement.
Enquiries:
Media enquiries for Daisy
Michelle Brodrick Tel: +44 (0) 0333 015
7141
Ernst & Young LLP (Financial adviser to Daisy)
Tel: +44 (0) 20 7951
Richard Pulford / Tom Watson/ Chinmay 2000
Punekar / William Farrow (Corporate
Finance)
ECSC Group plc
Ian Mann, Executive Chairman Tel: +44 (0) 1274 736
223
Matthew Briggs, Chief Executive Officer
Allenby Capital Limited (Rule 3 adviser,
Nominated Adviser and Corporate Broker
to ECSC)
David Hart / Nick Athanas / David Worlidge Tel: +44 (0) 203 328
/ Piers Shimwell / Dan Dearden-Williams 5656
(Corporate Finance)
Tony Quirke (Sales and Corporate Broking)
Press enquiries
Clare Macdonald, Marketing Director Tel: +44 (0) 1274 736
223
DWF Law LLP is providing legal advice to Daisy. Freeths LLP is
providing legal advice to ECSC.
Important Notices
Ernst & Young LLP ("EY"), which is authorised and regulated
by the Financial Conduct Authority ("FCA") in the United Kingdom,
is acting exclusively for Daisy and for no one else in connection
with the matters set out in this Announcement. EY will not regard
any other person as its client in relation to the matters referred
to in this Announcement and will not be responsible to anyone other
than Daisy for providing the protections afforded to clients of EY
nor for providing advice in relation to the Acquisition, the
contents of this Announcement or any other matters referred to in
this Announcement. Neither EY nor any of its affiliates owes or
accepts any duty, liability or responsibility whatsoever (whether
direct or indirect, whether in contract, in tort, under statute or
otherwise) to any person who is not a client of EY in connection
with the matters referred to in this Announcement, or
otherwise.
Allenby Capital Limited ("Allenby"), which is authorised and
regulated in the United Kingdom by the FCA, is acting exclusively
for the Company and for no one else in connection with matters set
out in this Announcement. Allenby will not regard any other person
as its client in relation to the matters referred to in this
Announcement and will not be responsible to anyone other than the
Company for providing the protections afforded to clients of
Allenby, or for providing advice in relation to the Acquisition,
the contents of this Announcement or any other matters referred to
in this Announcement. Neither Allenby nor any of its affiliates
owes or accepts any duty, liability or responsibility whatsoever
(whether direct or indirect, whether in contract, in tort, under
statute or otherwise) to any person who is not a client of Allenby
in connection with the matters referred to in this Announcement, or
otherwise.
This Announcement is for information purposes only and is not
intended to and does not constitute, or form part of, any offer,
invitation, inducement or the solicitation of an offer to purchase
or otherwise acquire, subscribe for, sell or otherwise dispose of
or exercise rights in respect of any securities, or the
solicitation of any vote or approval of an offer to buy securities
in any jurisdiction (pursuant to the Acquisition or otherwise) nor
shall there be any sale, issuance or transfer of any securities
pursuant to the Acquisition in any jurisdiction in contravention of
any applicable laws.
The Acquisition will be made solely through the Scheme Document
and the accompanying Forms of Proxy, which will contain the full
terms and conditions of the Acquisition and the Scheme, including
details of how to vote in respect of the Acquisition and the
Scheme. Any approval, decision or other response to the Acquisition
and/or the Scheme should be made only on the basis of the
information in the Scheme Document. Scheme Shareholders are
strongly advised to read the formal documentation in relation to
the Acquisition and the Scheme carefully once it becomes available
because it will contain important information relating to the
Acquisition.
This Announcement does not constitute a prospectus or a
prospectus equivalent document.
This Announcement has been prepared for the purpose of complying
with English law, the Code 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 of jurisdictions outside the United Kingdom.
The statements contained in this Announcement are made as at the
date of this Announcement, unless some other time is specified in
relation to them, and service of this Announcement shall not give
rise to any implication that there has been no change in the facts
set out in this Announcement since such date.
Overseas shareholders
The release, publication or distribution of this Announcement in
certain jurisdictions other than the United Kingdom may be
restricted by law and the ability of ECSC Shareholders who are not
resident in the United Kingdom to participate in the Acquisition
may be restricted by the laws and/or regulations of those
jurisdictions. Persons who are not resident in the United Kingdom,
or who are subject to laws of any jurisdiction other than the
United Kingdom, should inform themselves about, and observe, any
applicable requirements. Any person (including, without limitation,
nominees, trustees and custodians) who would, or otherwise intends
to, forward this Announcement, the Scheme Document or any
accompanying document to any jurisdiction outside the United
Kingdom should refrain from doing so and seek appropriate
professional advice before taking any action. In particular, the
ability of persons who are not resident in the United Kingdom to
vote their ECSC Shares at the Court Meeting and/or the General
Meeting, or to execute and deliver Forms of Proxy appointing
another to vote their ECSC Shares in respect of the Court Meeting
and/or the General Meeting on their behalf, may be affected by the
laws of the relevant jurisdiction in which they are located.
Any failure to comply with applicable legal or regulatory
requirements may constitute a violation of the laws and/or
regulations of any such jurisdiction. To the fullest extent
permitted by applicable law, the companies and persons involved in
the Acquisition disclaim any responsibility and liability for the
violation of such restrictions by any person.
The Acquisition will not be made, directly or indirectly, in or
into or by use of the mails or any other means or instrumentality
(including, without limitation, telephonic or electronic) of
interstate or foreign commerce of, or any facility of a national,
state or other securities exchange of, a Restricted Jurisdiction,
and no person may vote in favour of the Acquisition by any such
use, means, instrumentality or facility or from within a Restricted
Jurisdiction. Accordingly, copies of this Announcement and formal
documentation relating to the Acquisition are not being, and must
not be, directly or indirectly, mailed or otherwise forwarded or
distributed in, into or from a Restricted Jurisdiction and persons
receiving this Announcement (including custodians, nominees and
trustees) must not distribute or send it in, into or from a
Restricted Jurisdiction.
Forward-looking statements
This Announcement may contain certain "forward-looking
statements" with respect to Daisy, the Daisy Group, ECSC and/or the
ECSC Group. All statements other than statements of historical
fact, are or may be deemed to be, forward-looking statements.
Forward-looking statements are based on current expectations and
projections about future events and are therefore subject to known
and unknown risks and uncertainties which could cause actual
results, performance or events to differ materially from the future
results, performance or events expressed or implied by the
forward-looking statements. Forward-looking statements often, but
not always, use words such as "anticipate", "target", "expect",
"estimate", "intend", "plan", "goal", "believe", "will", "may",
"should", "would", "could" or other words or terms of similar
meaning or the negative thereof. Forward-looking statements include
statements relating to the following: (i) future capital
expenditures, expenses, revenues, earnings, synergies, economic
performance, indebtedness, financial condition, dividend policy,
losses and future prospects; (ii) business and management
strategies and the expansion and growth of the Daisy Group or the
ECSC Group and potential synergies resulting from the Acquisition;
and (iii) the expected timing and scope of the Acquisition. Such
statements are qualified in their entirety by the inherent risks
and uncertainties surrounding future expectations.
Such forward-looking statements involve risks and uncertainties
that could significantly affect expected results and are based on
certain key assumptions. Many factors could cause actual results to
differ materially from those projected or implied in any
forward-looking statements. Due to such uncertainties and risks,
readers are cautioned not to place undue reliance on such
forward-looking statements, which speak only as of the date of this
Announcement. Any forward-looking statements made in this
Announcement on behalf of Daisy or ECSC are made as of the date of
this Announcement based on the opinions and estimates of directors
of Daisy or ECSC, respectively. Each of Daisy, any company in the
Daisy Group, ECSC, any company in the ECSC Group and their
respective members, directors, officers, employees, advisers and
any person acting on behalf of one or more of them, expressly
disclaims any intention or obligation to update or revise any
forward-looking or other statements contained in this Announcement,
whether as a result of new information, future events or otherwise,
except as required by applicable law. None of Daisy, any company in
the Daisy Group, ECSC, or any company in the ECSC Group, or their
respective members, directors, officers or employees, advisers or
any person acting on their behalf, provides any representation,
assurance or guarantee that the occurrence of the events expressed
or implied in any forward-looking statements in this Announcement
will actually occur.
No forward-looking or other statements have been reviewed by the
auditors of Daisy or any company in the Daisy Group or ECSC. All
subsequent oral or written forward-looking statements attributable
to Daisy, any company in the Daisy Group, ECSC, or any company in
the ECSC Group or to any of their respective members, directors,
officers, advisers or employees or any person acting on their
behalf are expressly qualified in their entirety by the cautionary
statements above.
No profit forecasts or estimates
Save as expressly set out herein, no statement in this
Announcement is intended, or shall be deemed to be as a profit
forecast or profit estimate for any period and no statement in this
Announcement should be interpreted to mean that cash flow from
operations, earnings or earnings per ordinary share, or income for
ECSC for the current or future financial years would necessarily
match or exceed the historical published cash flow from operations,
earnings, earnings per share or income of ECSC.
Right to switch to a Takeover Offer
Daisy reserves the right to elect, with the consent of the
Takeover Panel, to implement the Acquisition by way of a Takeover
Offer for the entire issued and to be issued ordinary share capital
of ECSC as an alternative to the Scheme. In such an event, the
Takeover Offer will be implemented on the same terms or, if Daisy
so decides (with the consent of the Takeover Panel), on such other
terms being no less favourable (subject to appropriate amendments),
so far as applicable, as those which would apply to the Scheme and
subject to the amendment referred to in Appendix I to this
Announcement.
Publication on website and availability of hard copies
In accordance with Rule 26.1 and 26.2 of the Code, a copy of
this Announcement will be made available (subject to certain
restrictions relating to persons resident in Restricted
Jurisdictions), free of charge, on Daisy's website at
www.daisyuk.tech/offer-for-ecsc-group-plc/ and ECSC's website at
www.ecsc.co.uk by no later than 12:00 noon on the Business Day
following this Announcement. Neither the contents of these websites
nor the content of any other website accessible from hyperlinks on
such websites is incorporated into, or forms part of, this
Announcement.
In accordance with Rule 30.3 of the Code, a person so entitled
may request a hard copy of this Announcement, free of charge, by
contacting EY on +44 (0) 20 7951 2000 or Allenby Capital on +44 (0)
20 3328 5656. For persons who receive a copy of this Announcement
in electronic form or via a website notification, a hard copy of
this Announcement will not be sent unless so requested. In
accordance with Rule 30.3 of the Code, a person so entitled may
also request that all future documents, announcements and
information to be sent to them in relation to the Acquisition
should be in hard copy form.
Information relating to ECSC Shareholders
Please be aware that addresses, electronic addresses and certain
information provided by ECSC Shareholders, persons with information
rights and other relevant persons for the receipt of communications
from ECSC may be provided to Daisy during the Offer Period as
required under Section 4 of Appendix 4 of the Code to comply with
Rule 2.11(c) of the Code.
Rounding
Certain figures included in this Announcement have been
subjected to rounding adjustments. Accordingly, figures shown for
the same category presented in different tables may vary slightly
and figures shown as totals in certain tables may not be an
arithmetic aggregation of the figures that precede them.
Disclosure requirements of the Code
Under Rule 8.3(a) of the Code, any person who is interested in 1
per cent. or more of any class of relevant securities of an offeree
company or of any securities exchange offeror (being any offeror
other than an offeror in respect of which it has been announced
that its offer is, or is likely to be, solely in cash) must make an
Opening Position Disclosure following the commencement of the offer
period and, if later, following the announcement in which any
securities exchange offeror is first identified. An Opening
Position Disclosure must contain details of the person's interests
and short positions in, and rights to subscribe for, any relevant
securities of each of: (i) the offeree company and (ii) any
securities exchange offeror(s). An Opening Position Disclosure by a
person to whom Rule 8.3(a) applies must be made by no later than
3.30 pm on the 10th Business Day following the commencement of the
offer period and, if appropriate, by no later than 3.30 pm on the
10th Business Day following the announcement in which any
securities exchange offeror is first identified. Relevant persons
who deal in the relevant securities of the offeree company or of a
securities exchange offeror prior to the deadline for making an
Opening Position Disclosure must instead make a Dealing
Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes,
interested in 1 per cent. or more of any class of relevant
securities of the offeree company or of any securities exchange
offeror must make a Dealing Disclosure if the person deals in any
relevant securities of the offeree company or of any securities
exchange offeror. A Dealing Disclosure must contain details of the
dealing concerned and of the person's interests and short positions
in, and rights to subscribe for, any relevant securities of each
of: (i) the offeree company and (ii) any securities exchange
offeror, save to the extent that these details have previously been
disclosed under Rule 8 of the Code. A Dealing Disclosure by a
person to whom Rule 8.3(b) applies must be made by no later than
3.30 pm on the Business Day following the date of the relevant
dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of an offeree company or a
securities exchange offeror, they will be deemed to be a single
person for the purpose of Rule 8.3 of the Code.
Opening Position Disclosures must also be made by the offeree
company and by any offeror, and Dealing Disclosures must also be
made by the offeree company, by any offeror and by any persons
acting in concert with any of them (see Rules 8.1, 8.2 and 8.4 of
the Code).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Takeover Panel's website at www.thetakeoverpanel.org.uk,
including details of the number of relevant securities in issue,
when the offer period commenced and when any offeror was first
identified. You should contact the Takeover Panel's Market
Surveillance Unit on +44 (0) 20 7638 0129 if you are in any doubt
as to whether you are required to make an Opening Position
Disclosure or a Dealing Disclosure.
Rule 2.9 disclosure
In accordance with Rule 2.9 of the Code, ECSC confirms that, as
at the close of business on the Last Practicable Date, it has
10,007,588 ordinary shares of 1 pence each in issue and admitted to
trading on the AIM market of the London Stock Exchange. The Company
does not hold any ECSC Shares in treasury. The International
Securities Identification Number for ECSC Shares is
GB00BYMJ4J99.
Electronic communications
Please be aware that all addresses, electronic addresses (if
any) and certain other information provided by the ECSC
Shareholders, persons with information rights and other relevant
persons for the receipt of communications from ECSC may be provided
to offerors (including Daisy) during the Offer Period as required
under Section 4 of Appendix 4 of the Code to comply with Rule
2.11(c) of the Code.
General
If you are in any doubt about the contents of this Announcement
or the action you should take, you are recommended to seek your own
independent financial advice immediately from your stockbroker,
bank manager, solicitor or independent financial adviser duly
authorised under the Financial Services and Markets Act 2000 (as
amended) if you are resident in the United Kingdom or, if not, from
another appropriate authorised independent financial adviser.
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 OF
THAT JURISDICTION.
THIS ANNOUNCEMENT IS DEEMED BY DAISY CORPORATE SERVICES TRADING
LIMITED AND ECSC GROUP PLC TO CONTAIN INSIDE INFORMATION AS
STIPULATED UNDER THE MARKET ABUSE REGULATION NO 596/2014
(INCORPORATED INTO UK LAW BY VIRTUE OF THE EUROPEAN UNION
(WITHDRAWAL) ACT 2018 AS AMED BY VIRTUE OF THE MARKET ABUSE
(AMMENT) (EU EXIT) REGULATIONS 2019). UPON THE PUBLICATION OF THIS
ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INSIDE
INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.
FOR IMMEDIATE RELEASE
31 March 2023
RECOMMED CASH ACQUISITION
of
ECSC GROUP PLC
by
DAISY CORPORATE SERVICES TRADING LIMITED
to be effected
by way of a Court-sanctioned scheme of arrangement
under Part 26 of the Companies Act 2006
1. Introduction
The boards of Daisy Corporate Services Trading Limited (" Daisy
") and ECSC Group plc (" ECSC " or the " Company ") are pleased to
announce that they have reached agreement on the terms of a
recommended cash acquisition by Daisy of the entire issued and to
be issued share capital of ECSC (the " Acquisition "). It is
intended that the Acquisition will be implemented by way of a
Court-sanctioned scheme of arrangement under Part 26 of the
Companies Act and will be subject to approval of the Scheme at the
Court Meeting and the Resolutions at the General Meeting.
2. The Acquisition
The Acquisition, which will be on the terms and subject to the
Conditions set out below and in Appendix I to this Announcement,
and to be set out in the Scheme Document, will be made on the
following basis:
54.02 pence in cash for each ECSC Share
The Acquisition values the entire issued and to be issued
ordinary share capital of ECSC at approximately GBP5.4 million.
The Cash Consideration represents a premium of
approximately:
-- 170.1 per cent. to the closing price of 20.0 pence per ECSC
Share on the Last Practicable Date;
-- 138.0 per cent. to the volume weighted average price per ECSC
Share for the three month period ended on the Last Practicable
Date; and
-- 46.0 per cent. to the volume weighted average price per ECSC
Share for the twelve month period ended on the Last Practicable
Date.
The Acquisition is conditional, amongst other things, on the
Scheme becoming Effective no later than the Long Stop Date.
The ECSC Shares will be acquired by Daisy with full title
guarantee, fully paid and free from all liens, equitable interests,
charges, encumbrances, rights of pre-emption and any other third
party rights or interests whatsoever and together with all rights
existing at the date of this Announcement or thereafter attaching
thereto, including (without limitation) the right to receive and
retain, in full, all dividends and other distributions (if any)
declared, made or paid or any other return of capital (whether by
way of reduction of share capital or share premium account or
otherwise) made on or after the date of this Announcement in
respect of the ECSC Shares.
If any dividend or other distribution in respect of the ECSC
Shares is declared, paid or made on or after the date of this
Announcement, Daisy reserves the right to reduce the consideration
payable for each ECSC Share under the terms of the Acquisition by
the amount per ECSC Share of such dividend or distribution
although, in such circumstances, ECSC Shareholders would be
entitled to retain any such dividend or distribution declared, made
or paid.
3. Recommendation
The ECSC Directors, who have been so advised by Allenby as to
the financial terms of the Acquisition, consider the terms of the
Acquisition to be fair and reasonable. In providing financial
advice to the ECSC Directors, Allenby has taken into account the
commercial assessments of the ECSC Directors. Allenby is providing
independent financial advice to the ECSC Directors for the purposes
of Rule 3 of the Code.
Accordingly, the ECSC Directors intend to recommend unanimously
that ECSC Shareholders vote, or procure votes, in favour of the
Scheme at the Court Meeting and the Resolutions to be proposed at
the General Meeting (or, if (with the consent of the Takeover
Panel) Daisy exercises its right to implement the Acquisition by
way of a Takeover Offer, accept, or procure acceptances of, such
Takeover Offer), as all the ECSC Directors who hold Scheme Shares
(in a personal capacity or through members of their immediate
families, related trusts or a nominee or nominees) have irrevocably
undertaken to do, or procure to be done, in respect of their own
beneficial holdings i n respect of 2,686,544 ECSC Shares,
representing, in aggregate, 26.85 per cent. of the ECSC Shares in
issue as at the close of business on the Last Practicable Da
te.
Under the terms of his service contract, Matthew Briggs (Chief
Executive Officer of ECSC) is contractually entitled to a cash
bonus o f GBP 167,143 upon the s ale of ECSC which is calculated as
follows: (i) 50% of his base salary plus car allowance; and (ii)
1.5% of the purchase price payable on the sale of ECSC. This bonus
would be payable to Matthew Briggs upon the Scheme becoming
Effective, which is expected in early June 2023.
4. Background to, and reasons for, the Acquisition
The Acquisition will be completed by Daisy Corporate Services
("DCS") which focuses on secure IT, communications, cloud services,
operational resilience and cyber security solutions for mid-market,
large corporate enterprises and public sector organisations.
The Daisy Directors believe that ECSC represents an opportunity
to acquire a cyber focussed company which is a strong fit with the
existing business and operations of the Cyber & Operational
Resilience Division of Daisy Corporate Services. Enhancing the
Daisy Corporate Services cyber capability is a key strategic
priority to facilitate DCS growth plans and to meet customer
demand. ECSC provides highly complementary services (within high
growth markets) to DCS's current Operational Resilience offerings.
In addition, the Acquisition will provide significant opportunities
for cross-selling into Daisy's wider Managed Service customer
base.
5. Background to, and reasons for, the recommendation
The ECSC Directors have evaluated the terms of the Acquisition
on behalf of ECSC Shareholders as a whole and, as a board, have
held discussions with Daisy regarding those terms. These
discussions have resulted in the Acquisition being proposed to be
made 54.02 pence in cash for each ECSC Share.
The ECSC Directors are fully confident in the ongoing execution
of its strategy under the leadership of Matthew Briggs (who was
appointed as CEO on 28 July 2022) as a standalone business and that
this strategy would continue to deliver long-term value for ECSC
Shareholders.
However, the ECSC Directors are cognisant that the current
strategy is likely to take a period of time to fully implement,
especially given that Managed and Detection Response contracts
typically take several months from first contact to the execution
of a contract.
In addition, whilst the outlook for ECSC's strategy is
favourable, it will require scale to take full advantage of the
opportunities available, and to fulfil its full potential. ECSC may
also need to access additional growth capital to strengthen its
balance sheet.
The ECSC Directors do not believe that access to such additional
capital is readily available to ECSC via the capital markets at a
price that would enable it to deliver shareholder value in the
short to medium term. The ECSC Directors believe that the
Acquisition will provide the necessary resources required to scale
the ECSC business whilst also removing the costs and regulatory
constraints of being a UK publicly quoted company.
Taking this into account, together with, inter alia, the
significant share price premium offered and the substantial
cross-selling opportunities that are likely to be provided by
becoming part of the wider Daisy Group, the board of ECSC believes
that the rationale for the Acquisition is compelling and that the
terms of the Acquisition recognise the quality of ECSC's business,
its potential and longer-term prospects.
In reaching its conclusion, the ECSC Board considered:
-- the terms of the Acquisition in relation to the value and
prospects of ECSC's business;
-- that the Cash Consideration under the Acquisition represents the premia set out in paragraph 2 above;
-- the great importance that Daisy attaches to the skills,
knowledge, and expertise of ECSC's existing management and
employees and the recognition that the skillset of the employees is
a key driver of the Acquisition. The ECSC Directors also note that
Daisy will focus on the successful operational and
cultural integration of the ECSC employees.
-- the impact of the Acquisition on all stakeholders, including
Daisy's intentions for the ECSC business, including continuing
office presence in Bradford and the assurances given by Daisy in
relation to ECSC employees;
-- that the combination with Daisy's extensive client base will
provide the ingredients for what the ECSC Directors believe could
become the UK's leading cyber security organisation whilst also
potentially
delivering 'best in class' cyber solutions to current and future clients;
-- that Daisy intends to carry out an integration review of ECSC's business in order to determine the best way to combine ECSC's and Daisy's businesses. Following the review, Daisy has stated that integration decisions could involve headcount reduction although assurances have been given that such reduction in headcount should be limited in numbers and will be focused on duplicate roles, in particular back office staff. Daisy has also indicated that finalisation of the integration plan will be subject
to engagement with appropriate stakeholders; and
-- that the Acquisition provides ECSC Shareholders with the
opportunity to receive full cash value for ECSC now, without any of
the inherent execution, industry and macroeconomic risks facing the
business.
The ECSC Board believes that at the current time the Acquisition
is the optimal strategy available to the management of ECSC to
enable shareholders to realise value from their investment in
ECSC.
Accordingly, following careful consideration of the above
factors, the ECSC Directors believe that the Acquisition is in the
best interests of ECSC Shareholders, as a whole, and therefore
unanimously intend to recommend the Acquisition to ECSC
Shareholders.
6. Irrevocable undertakings
Daisy has received irrevocable undertakings to vote, or procure
votes, in favour of the Scheme at the Court Meeting and the
Resolutions to be proposed at the General Meeting (or, if Daisy,
with the consent of the Takeover Panel, exercises its right to
implement the Acquisition by way of a Takeover Offer, to accept, or
procure acceptances of, such Takeover Offer) from all of the ECSC
Directors who hold ECSC Shares (in a personal capacity or through
members of their immediate families, related trusts or a nominee or
nominees) in respect of their entire beneficial holdings (and the
beneficial holdings of members of their immediate families or
related trusts or their nominee(s)) of ECSC Shares, amounting t o
2,686,544 ECSC Shares, in aggregate, representing approximately
26.85 per cent. of the ECSC Shares in issue as at the close of
business on the Last Practicable Date.
Daisy has also received irrevocable undertakings to vote, or
procure votes, in favour of the Scheme at the Court Meeting and the
Resolutions to be proposed at the General Meeting (or, if (with the
consent of the Takeover Panel) Daisy exercises its right to
implement the Acquisition by way of a Takeover Offer, to accept, or
procure acceptances of, such Takeover Offer) from ECSC Shareholders
in respect of 910,764 ECSC Shares, in aggregate, representing
approximately 9.10 per cent. of the ECSC Shares in issue as at the
close of business on the Last Practicable Date.
Therefore, as at the date of this Announcement, Daisy has
received irrevocable undertakings to vote, or procure votes, in
favour of the Scheme at the Court Meeting and the Resolutions to be
proposed at the General Meeting (or, if (with the consent of the
Takeover Panel) Daisy exercises its right to implement the
Acquisition by way of a Takeover Offer, to accept, or procure
acceptances of, such Takeover Offer) with respect to a total of
3,597,308 ECSC Shares, in aggregate, representing approximately
35.95 per cent. of the ECSC Shares in issue as at the close of
business on the Last Practicable Date.
Full details of the irrevocable undertakings received by Daisy
are set out in Appendix III to this Announcement.
7. Information on the Daisy Group and Daisy
Daisy Group is an independent UK provider of end-to-end business
technology and communications services to small-to-medium,
mid-market and large enterprises. Over the last two decades, Daisy
Group has grown to be one of the largest providers of
communications and IT solutions across the UK.
The Daisy Group has successfully executed multiple acquisitions
as part of its corporate development strategy which has created a
diverse and well-balanced product portfolio, to meet the evolving
needs of its customers.
Daisy Corporate Services (DCS) has a portfolio spanning Modern
Workplace, Connectivity, Unified Communications, Cloud, Cyber
Security and Operational Resilience, serving more than 2,000
businesses across all sectors. DCS's growth plans include offering
end to-end-cyber security solutions by leveraging its technical
expertise, brand strength and strong partnerships with its clients
and vendors.
8. Information on ECSC
Established in 2000 by Ian Mann , ECSC is a full service cyber
security service provider. ECSC provides expert security breach
prevention, detection and response support to organisations across
all sectors.
ECSC operates from two Security Operations Centres (SOCs), one
in Yorkshire, UK, and the other in Brisbane, Australia. ECSC's
Managed and Detection Response ("MDR") division offers flexible
24/7/365 cyber security managed detection and response support to
its client. ECSC's Assurance Division provides guidance,
certification to industry standards and extensive testing services
to allow organisations to improve, and demonstrate, their cyber
security effectiveness.
ECSC's client base ranges from e-commerce start-ups to global
blue-chip organisations.
In the year to 31 December 2021, ECSC generated revenue of
GBP6.1 million and an adjusted EBITDA of GBP0.2 million.
9. Financing
The Cash Consideration payable to Scheme Shareholders under the
terms of the Acquisition will be funded from the existing cash
resources of the Daisy Group.
EY, as financial adviser to Daisy, is satisfied that sufficient
cash resources are available to Daisy to enable it to satisfy, in
full, the consideration payable to ECSC Shareholders under the
terms of the Acquisition.
10. Management, employees, research and development and locations of the ECSC Group
Daisy attaches great importance to the skills, knowledge, and
expertise of ECSC's existing management and employees. Due to the
nature of the ECSC business, the skillset of the employees is a key
driver of the rationale for the Acquisition and Daisy intends to
focus on the successful operational and cultural integration of the
ECSC employees. Daisy confirms that it intends to safeguard fully
the existing employment and pension rights of all ECSC management
and employees in accordance with applicable law and to comply with
ECSC's pension obligations for existing employees and members of
ECSC's pension schemes.
After the Scheme becomes effective, Daisy intends to engage with
ECSC employees in order to carry out an integration review of
ECSC's business with the aim of determining the best way to combine
ECSC's and Daisy's businesses. The review is expected to take
approximately three months to complete and will focus on
establishing an integration plan to maximise the complementary
strengths of ECSC's and Daisy's respective businesses. It is
anticipated that the integration plan will include steps that can
be taken to realise cost synergies from combining the two
businesses and this may include supplier consolidation and
headcount synergies. Daisy anticipates that there will be limited
headcount reductions across ECSC Group as a whole, with the most
significant of the headcount reductions being duplicate roles,
particularly back office functions. The back office functions
currently represent approximately 20% of total ECSC headcount.
Whilst Daisy currently has no plans to move ECSC staff from the
Bradford head office, dependant on the outcome of lease
negotiations in respect of ECSC's Bradford office, which would be
expected to occur during the second half of 2023, Daisy will also
consider whether to integrate ECSC's Bradford office with Daisy's
nearby office in Birstall into one location.
Following completion of the Acquisition, a number of PLC-related
functions will be removed as these will be unnecessary, which will
require headcount reduction. However, save as noted herein, Daisy
does not intend to make any material changes to the conditions of
employment or the balance of skills and functions of the employees
of ECSC.
Save as referred to above, Daisy confirms that it has no plans
currently to: (i) change the principal locations of ECSC's
business; (ii) redeploy any of ECSC's material fixed assets; or
(iii) make any material changes to ECSC's research and development
functions.
11. Current trading and outlook
Outlook
On 28 February 2023 ECSC announced an unaudited trading update
for the 12 months ended 31 December 2022. Following a stronger
second half of trading, ECSC anticipates reporting revenues for the
year ended 31 December 2022 of GBP5.8 million and a small loss for
the year at the adjusted EBITDA level.
The assurance division (testing, standards and certification
services) generated revenue growth of 10% in the second half of the
year to GBP1.62 million while ECSC expects to report Assurance
revenue for the year ended 31 December 2022 of GBP3.1 million.
During the year ECSC won new contracts in its MDR division
across a range of sectors. When combined with successful MDR
renewals, the MDR order book grew to GBP2.3 million as at 31
December 2022 (31 December 2021: GBP2.2 million).
Closing cash balances as at the end of December 2022 amounted to
GBP0.6 million and ECSC had net borrowings of GBP0.9 million as at
that date.
12. Rule 28 of the Takeover Code
For the purposes of Rule 28 of the Takeover Code, the Company
restates the profit forecast given in its trading update on 28
February 2023 of a small, adjusted EBITDA loss for the year ended
31 December 2022. The ECSC Directors believe that this remains
valid and confirm that the profit forecast has been properly
compiled on the basis of the assumptions stated and that the basis
of accounting used is consistent with the Company's accounting
policies.
13. Acquisition-related arrangements
Confidentiality Agreement
Daisy Intermediate Holdings Limited (a holding company of Daisy)
and ECSC entered into a confidentiality agreement on 30 November
2022 pursuant to which Daisy and members of the Daisy Group have
agreed to keep confidential information about ECSC and not to
disclose to third parties (other than permitted recipients and with
certain other customary exceptions) confidential information
disclosed by ECSC unless required by law or regulation. These
confidentiality obligations remain in force until the earlier of
completion of the Acquisition or 30 November 2025.
Service Agreement Bonus
Under the terms of his service contract, Matthew Briggs (Chief
Executive Officer of ECSC) is contractually entitled to a cash
bonus of GBP167,143 upon the sale of ECSC which is calculated as
follows: (i) 50% of his base salary plus car allowance; and (ii)
1.5% of the purchase price payable on the sale of ECSC. This bonus
would be payable to Matthew Briggs upon the Scheme becoming
Effective, which is expected in early June 2023.
14. Structure of the Acquisition
Scheme
It is intended that the Acquisition will be effected by way of a
Court-sanctioned scheme of arrangement between ECSC and the Scheme
Shareholders under Part 26 of the Companies Act.
The purpose of the Scheme is to provide for Daisy to become the
owner of the entire issued and to be issued ordinary share capital
of ECSC. Under the Scheme, the Acquisition is to be achieved by
the:
-- transfer of the Scheme Shares held by Scheme Shareholders to
Daisy in consideration for which the ECSC Shareholders will receive
cash consideration on the basis set out in paragraph 2 (The
Acquisition) of this Announcement; and
-- passing of the Resolutions at the General Meeting (including
amendments to ECSC's articles of association to ensure that any
ECSC Shares issued between approval of the Scheme at the Court
Meeting and the Scheme Record Time will be subject to the Scheme
and that any ECSC Shares issued after the Scheme Record Time will
automatically be acquired by Daisy).
Approval by Court Meeting and General Meeting
In order to become Effective, the Scheme requires the:
(a) satisfaction (or, where applicable, waiver) of the Conditions;
(b) approval of a majority in number of the Scheme Shareholders
who vote, representing not less than 75 per cent. in value of the
Scheme Shares voted, either in person or by proxy, at the Court
Meeting; and
(c) approval by the requisite majority of the Resolutions at the
General Meeting (to be held directly after the Court Meeting)
necessary in order to implement the Scheme.
Application to Court to sanction the Scheme
Once the requisite approvals have been obtained at the Court
Meeting and the General Meeting and the other Conditions have been
satisfied or (where applicable) waived, the Scheme must be
sanctioned by the Court at the Court Hearing.
The Scheme will become Effective in accordance with its terms on
delivery of the Court Order to the Registrar of Companies. Upon the
Scheme becoming Effective, it will be binding on all Scheme
Shareholders, irrespective of whether or not they attended and/or
voted at the Court Meeting or General Meeting, or whether they
voted in favour of, or against, the Scheme.
Full details of the Scheme to be set out in the Scheme
Document
The Scheme will be subject to the satisfaction (or, where
applicable, waiver) of the Conditions and the full terms and
conditions to be set out in the Scheme Document. Further details of
the Scheme will be set out in the Scheme Document, including the
expected timetable and the action to be taken by Scheme
Shareholders.
The Scheme will be governed by the laws of England and Wales.
The Scheme will be subject to the applicable requirements of the
Code, the Takeover Panel, the London Stock Exchange, the FCA and
the AIM Rules.
If the Scheme does not become effective on or before the Long
Stop Date (or such later date as Daisy and ECSC may, with the
consent of the Takeover Panel and, if required, the Court, agree)
it will lapse and the Acquisition will not proceed (unless the
Takeover Panel otherwise consents).
It is expected that the Scheme Document will be posted to ECSC
Shareholders, and, for information only, to participants in the
ECSC Share Schemes, along with the notices of the Court Meeting and
the General Meeting and the Forms of Proxy, within 28 days of the
date of this Announcement, unless Daisy and ECSC otherwise agree,
and the Takeover Panel consents, to a later date.
Conditions to the Acquisition
The Acquisition will be subject to the Conditions and further
terms set out in Appendix I to this Announcement and to be set out
in the Scheme Document.
The Scheme will be conditional, amongst other things, upon:
(a) the approval of the Scheme by a majority in number
representing not less than 75 per cent. in value of the Scheme
Shareholders entitled to vote and present and voting, either in
person or by proxy, at the Court Meeting or at any adjournment,
postponement or reconvention of such meeting to be held on or
before the 22nd day after the expected date of the Court Meeting to
be set out in the Scheme Document in due course (or such later date
as may be agreed between Daisy and ECSC and the Court may
allow);
(b) the passing of the Resolutions by the requisite majority at
the General Meeting or at any adjournment, postponement or
reconvention of that meeting to be held on or before the 22nd day
after the expected date of the General Meeting to be set out in the
Scheme Document (or such later date, if any, as Daisy and ECSC may
agree and the Court may allow); and
(c) the sanction of the Scheme on or before the 22nd day after
the expected date of the Court Hearing to be set out in the Scheme
Document in due course (or such later date as may be agreed between
Daisy and ECSC and the Court may allow) and the delivery of an
office copy of the Court Order to the Registrar of Companies.
Scheme timetable / further information
(d) A full anticipated timetable will be set out in the Scheme
Document which will be posted to ECSC Shareholders and, for
information only, to participants in the ECSC Share Schemes, along
with the notices of the Court Meeting and the General Meeting and
the Forms of Proxy, within 28 days of the date of this Announcement
(unless Daisy and ECSC otherwise agree, and the Takeover Panel
consents, to a later date). Subject to certain restrictions
relating to persons resident in Restricted Jurisdictions, the
Scheme Document will also be made available on Daisy's website at
www.daisyuk.tech/offer-for-ecsc-group-plc/ and ECSC's website at
www.ecsc.co.uk
At this stage, subject to the approval and availability of the
Court (which is subject to change), Daisy and ECSC expect the
Scheme to become Effective at the beginning of June 2023.
Right to switch to a Takeover Offer
Daisy reserves the right to elect, with the consent of the
Takeover Panel, to implement the Acquisition by way of a Takeover
Offer for the entire issued and to be issued ordinary share capital
of ECSC as an alternative to the Scheme. In such an event, the
Takeover Offer will be implemented on the same terms or, if Daisy
so decides (with the consent of the Takeover Panel), on such other
terms being no less favourable (subject to appropriate amendments),
so far as applicable, as those which would apply to the Scheme and
subject to the amendment referred to in paragraph 5 of Part B of
Appendix I to this Announcement.
15. Cancellation of admission to trading on AIM and re-registration
Prior to the Scheme becoming Effective and subject to any
applicable requirements of the AIM Rules, Daisy intends to procure
the making of an application by ECSC for cancellation of the
admission to trading on AIM of the ECSC Shares on the first
Business Day following the Effective Date.
Share certificates in respect of the ECSC Shares will cease to
be valid and should be destroyed following the Effective Date. In
addition, entitlements to ECSC Shares held within the CREST system
are expected to be cancelled on the first Business Day following
the Effective Date.
As soon as practicable after the Effective Date and after the
cancellation of the admission to trading on AIM of the ECSC Shares,
it is intended that ECSC will be re-registered as a private limited
company under the relevant provisions of the Companies Act.
16. ECSC Share Schemes
As at the Last Practicable Date 1,013,702 options remained
outstanding under the ECSC Share Schemes, of which 6,411 have an
exercise price below 54.02 pence and will be valid for exercise
prior to the Effective Date.
With the consent of the Takeover Panel no proposals will be made
under Rule 15 of the Code to participants in the ECSC Share Schemes
whose options have an exercise price above 54.02 pence. An
appropriate proposal will be made in respect of those options with
an exercise price below 54.02 pence.
Participants will be contacted regarding the effect of the
Acquisition on their rights under the ECSC Share Plans. Further
details of the impact of the Scheme on the options outstanding
under the ECSC Share Schemes will be set out in the Scheme
Document.
17. Disclosure of interests in ECSC
As at the close of business on the Last Practicable Date, save
for the irrevocable undertakings referred to in paragraph 6
(Irrevocable undertakings) above, none of Daisy nor any Daisy
Director nor, so far as Daisy is aware, any person acting, or
deemed to be acting, in concert with Daisy:
(a) had an interest in, or right to subscribe for, relevant securities of ECSC;
(b) had any short position in (whether conditional or absolute
and whether in the money or otherwise), including any short
position under a derivative, any agreement to sell or any delivery
obligation or right to require another person to purchase or take
delivery of, relevant securities of ECSC;
(c) had procured an irrevocable commitment or letter of intent
to accept the terms of the Acquisition in respect of relevant
securities of ECSC; or
(d) had borrowed or lent any ECSC Shares.
Furthermore, save for the irrevocable undertakings described in
paragraph 6 (Irrevocable undertakings) above, no arrangement exists
between Daisy or ECSC or a person acting in concert with Daisy or
ECSC in relation to ECSC Shares. For these purposes, an
"arrangement" includes any indemnity or option arrangement, any
agreement or any understanding, formal or informal, of whatever
nature, relating to ECSC Shares which may be an inducement to deal
or refrain from dealing in such securities.
18. General
The Acquisition will be subject to the Conditions and other
terms set out in this Announcement and to the full terms and
conditions which will be set out in the Scheme Document. Appendix I
to this Announcement contains a summary of the principal terms and
conditions. It is expected that the Scheme Document will be posted
to ECSC Shareholders, and, for information only, to participants in
the ECSC Share Schemes, along with the notices of the Court Meeting
and the General Meeting and the Forms of Proxy, within 28 days of
the date of this Announcement, unless Daisy and ECSC otherwise
agree, and the Takeover Panel consents, to a later date.
In deciding whether or not to vote, or procure votes, in favour
of the Scheme at the Court Meeting and the Resolutions to be
proposed at the General Meeting, ECSC Shareholders should rely on
the information contained, and follow the procedures described, in
the Scheme Document.
EY and Allenby have each given and not withdrawn their consent
to the publication of this Announcement with the inclusion herein
of the references to their names in the form and context in which
they appear.
Appendix II contains details of sources of information and bases
of calculation contained in this Announcement. Appendix III
contains certain details relating to the irrevocable undertakings
referred to in this Announcement. Appendix IV contains definitions
of certain terms used in this Announcement.
19. Documents on display
(a) Copies of this Announcement and the following documents
will, by no later than 12 noon on the Business Day following the
date of this Announcement, be made available on Daisy's website at
www.daisyuk.tech/offer-for-ecsc-group-plc/ and ECSC's website at
www.ecsc.co.uk until the end of the Offer Period:
-- the Confidentiality Agreement;
-- the written consents provided by each of EY and Allenby;
-- the irrevocable undertakings referred to in paragraph 6
(Irrevocable undertakings) above and described in Appendix III to
this Announcement.
Enquiries:
Media enquiries for Daisy
Michelle Brodrick Tel: +44 (0) 0333 015
7141
Ernst & Young LLP (Financial adviser to Daisy)
Richard Pulford / Tom Watson/ Chinmay Tel: +44 (0) 20 7951
Punekar / William Farrow (Corporate 2000
Finance)
ECSC Group plc
Ian Mann, Executive Chairman Tel: +44 (0) 1274 736
223
Matthew Briggs, Chief Executive Officer
Allenby Capital Limited (Rule 3 adviser,
Nominated Adviser and Corporate Broker
to ECSC)
David Hart / Nick Athanas / David Worlidge Tel: +44 (0) 203 328
/ Piers Shimwell / Dan Dearden-Williams 5656
(Corporate Finance)
Tony Quirke (Sales and Corporate Broking)
Press enquiries
Clare Macdonald, Marketing Director Tel: +44 (0) 1274 736
223
Ernst & Young LLP ("EY"), which is authorised and regulated
by the Financial Conduct Authority ("FCA") in the United Kingdom,
is acting exclusively for Daisy and for no one else in connection
with the matters set out in this Announcement. EY will not regard
any other person as its client in relation to the matters referred
to in this Announcement and will not be responsible to anyone other
than Daisy for providing the protections afforded to clients of EY
nor for providing advice in relation to the Acquisition, the
contents of this Announcement or any other matters referred to in
this Announcement. Neither EY nor any of its affiliates owes or
accepts any duty, liability or responsibility whatsoever (whether
direct or indirect, whether in contract, in tort, under statute or
otherwise) to any person who is not a client of EY in connection
with the matters referred to in this Announcement, or
otherwise.
Allenby Capital Limited ("Allenby"), which is authorised and
regulated in the United Kingdom by the FCA, is acting exclusively
for the Company and for no one else in connection with matters set
out in this Announcement. Allenby will not regard any other person
as its client in relation to the matters referred to in this
Announcement and will not be responsible to anyone other than the
Company for providing the protections afforded to clients of
Allenby, or for providing advice in relation to the Acquisition,
the contents of this Announcement or any other matters referred to
in this Announcement. Neither Allenby nor any of its affiliates
owes or accepts any duty, liability or responsibility whatsoever
(whether direct or indirect, whether in contract, in tort, under
statute or otherwise) to any person who is not a client of Allenby
in connection with the matters referred to in this Announcement, or
otherwise.
This Announcement is for information purposes only and is not
intended to and does not constitute, or form part of, any offer,
invitation, inducement or the solicitation of an offer to purchase
or otherwise acquire, subscribe for, sell or otherwise dispose of
or exercise rights in respect of any securities, or the
solicitation of any vote or approval of an offer to buy securities
in any jurisdiction (pursuant to the Acquisition or otherwise) nor
shall there be any sale, issuance or transfer of any securities
pursuant to the Acquisition in any jurisdiction in contravention of
any applicable laws.
The Acquisition will be made solely through the Scheme Document
and the accompanying Forms of Proxy, which will contain the full
terms and conditions of the Acquisition and the Scheme, including
details of how to vote in respect of the Acquisition and the
Scheme. Any approval, decision or other response to the Acquisition
and/or the Scheme should be made only on the basis of the
information in the Scheme Document. Scheme Shareholders are
strongly advised to read the formal documentation in relation to
the Acquisition and the Scheme carefully once it becomes available
because it will contain important information relating to the
Acquisition.
This Announcement does not constitute a prospectus or a
prospectus equivalent document.
This Announcement has been prepared for the purpose of complying
with English law, the Code 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 of jurisdictions outside the United Kingdom.
The statements contained in this Announcement are made as at the
date of this Announcement, unless some other time is specified in
relation to them, and service of this Announcement shall not give
rise to any implication that there has been no change in the facts
set out in this Announcement since such date.
Overseas shareholders
The release, publication or distribution of this Announcement in
certain jurisdictions other than the United Kingdom may be
restricted by law and the ability of ECSC Shareholders who are not
resident in the United Kingdom to participate in the Acquisition
may be restricted by the laws and/or regulations of those
jurisdictions. Persons who are not resident in the United Kingdom,
or who are subject to laws of any jurisdiction other than the
United Kingdom, should inform themselves about, and observe, any
applicable requirements. Any person (including, without limitation,
nominees, trustees and custodians) who would, or otherwise intends
to, forward this Announcement, the Scheme Document or any
accompanying document to any jurisdiction outside the United
Kingdom should refrain from doing so and seek appropriate
professional advice before taking any action. In particular, the
ability of persons who are not resident in the United Kingdom to
vote their ECSC Shares at the Court Meeting and/or the General
Meeting, or to execute and deliver Forms of Proxy appointing
another to vote their ECSC Shares in respect of the Court Meeting
and/or the General Meeting on their behalf, may be affected by the
laws of the relevant jurisdiction in which they are located.
Any failure to comply with applicable legal or regulatory
requirements may constitute a violation of the laws and/or
regulations of any such jurisdiction. To the fullest extent
permitted by applicable law, the companies and persons involved in
the Acquisition disclaim any responsibility and liability for the
violation of such restrictions by any person.
The Acquisition will not be made, directly or indirectly, in or
into or by use of the mails or any other means or instrumentality
(including, without limitation, telephonic or electronic) of
interstate or foreign commerce of, or any facility of a national,
state or other securities exchange of, a Restricted Jurisdiction,
and no person may vote in favour of the Acquisition by any such
use, means, instrumentality or facility or from within a Restricted
Jurisdiction. Accordingly, copies of this Announcement and formal
documentation relating to the Acquisition are not being, and must
not be, directly or indirectly, mailed or otherwise forwarded or
distributed in, into or from a Restricted Jurisdiction and persons
receiving this Announcement (including custodians, nominees and
trustees) must not distribute or send it in, into or from a
Restricted Jurisdiction.
Forward-looking statements
This Announcement may contain certain "forward-looking
statements" with respect to Daisy, the Daisy Group, ECSC and/or the
ECSC Group. All statements other than statements of historical
fact, are or may be deemed to be, forward-looking statements.
Forward-looking statements are based on current expectations and
projections about future events and are therefore subject to known
and unknown risks and uncertainties which could cause actual
results, performance or events to differ materially from the future
results, performance or events expressed or implied by the
forward-looking statements. Forward-looking statements often, but
not always, use words such as "anticipate", "target", "expect",
"estimate", "intend", "plan", "goal", "believe", "will", "may",
"should", "would", "could" or other words or terms of similar
meaning or the negative thereof. Forward-looking statements include
statements relating to the following: (i) future capital
expenditures, expenses, revenues, earnings, synergies, economic
performance, indebtedness, financial condition, dividend policy,
losses and future prospects; (ii) business and management
strategies and the expansion and growth of the Daisy Group or the
ECSC Group and potential synergies resulting from the Acquisition;
and (iii) the expected timing and scope of the Acquisition. Such
statements are qualified in their entirety by the inherent risks
and uncertainties surrounding future expectations.
Such forward-looking statements involve risks and uncertainties
that could significantly affect expected results and are based on
certain key assumptions. Many factors could cause actual results to
differ materially from those projected or implied in any
forward-looking statements. Due to such uncertainties and risks,
readers are cautioned not to place undue reliance on such
forward-looking statements, which speak only as of the date of this
Announcement. Any forward-looking statements made in this
Announcement on behalf of Daisy or ECSC are made as of the date of
this Announcement based on the opinions and estimates of directors
of Daisy or ECSC, respectively. Each of Daisy, any company in the
Daisy Group, ECSC, any company in the ECSC Group and their
respective members, directors, officers, employees, advisers and
any person acting on behalf of one or more of them, expressly
disclaims any intention or obligation to update or revise any
forward-looking or other statements contained in this Announcement,
whether as a result of new information, future events or otherwise,
except as required by applicable law. None of Daisy, any company in
the Daisy Group, ECSC or any company in the ECSC Group, nor their
respective members, directors, officers or employees, advisers or
any person acting on their behalf, provides any representation,
assurance or guarantee that the occurrence of the events expressed
or implied in any forward-looking statements in this Announcement
will actually occur.
No forward-looking or other statements have been reviewed by the
auditors of Daisy or ECSC. All subsequent oral or written
forward-looking statements attributable to Daisy, any member of the
Daisy Group, ECSC or any company in the ECSC Group or to any of
their respective members, directors, officers, advisers or
employees or any person acting on their behalf are expressly
qualified in their entirety by the cautionary statements above.
No profit forecasts or estimates
Save as expressly set out herein, no statement in this
Announcement is intended, or shall be deemed to be as a profit
forecast or profit estimate for any period and no statement in this
Announcement should be interpreted to mean that cash flow from
operations, earnings or earnings per ordinary share, or income for
ECSC for the current or future financial years would necessarily
match or exceed the historical published cash flow from operations,
earnings, earnings per share or income of ECSC.
Right to switch to a Takeover Offer
Daisy reserves the right to elect, with the consent of the
Takeover Panel, to implement the Acquisition by way of a Takeover
Offer for the entire issued and to be issued ordinary share capital
of ECSC as an alternative to the Scheme. In such an event, the
Takeover Offer will be implemented on the same terms or, if Daisy
so decides (with the consent of the Takeover Panel), on such other
terms being no less favourable (subject to appropriate amendments),
so far as applicable, as those which would apply to the Scheme and
subject to the amendment referred to in Appendix I to this
Announcement.
Publication on website and availability of hard copies
In accordance with Rule 26.1 and 26.2 of the Code, a copy of
this Announcement will be made available (subject to certain
restrictions relating to persons resident in Restricted
Jurisdictions), free of charge, on Daisy's website at
www.daisyuk.tech/offer-for-ecsc-group-plc/ and ECSC's website at
www.ecsc.co.uk by no later than 12:00 noon on the Business Day
following this Announcement. Neither the contents of these websites
nor the content of any other website accessible from hyperlinks on
such websites is incorporated into, or forms part of, this
Announcement.
In accordance with Rule 30.3 of the Code, a person so entitled
may request a hard copy of this Announcement, free of charge, by
contacting EY on +44 (0) 20 7951 2000 or Allenby Capital on +44 (0)
20 3328 5656. For persons who receive a copy of this Announcement
in electronic form or via a website notification, a hard copy of
this Announcement will not be sent unless so requested. In
accordance with Rule 30.3 of the Code, a person so entitled may
also request that all future documents, announcements and
information to be sent to them in relation to the Acquisition
should be in hard copy form.
Information relating to ECSC Shareholders
Please be aware that addresses, electronic addresses and certain
information provided by ECSC Shareholders, persons with information
rights and other relevant persons for the receipt of communications
from ECSC may be provided to Daisy during the Offer Period as
required under Section 4 of Appendix 4 of the Code to comply with
Rule 2.11(c) of the Code.
Rounding
Certain figures included in this Announcement have been
subjected to rounding adjustments. Accordingly, figures shown for
the same category presented in different tables may vary slightly
and figures shown as totals in certain tables may not be an
arithmetic aggregation of the figures that precede them.
Disclosure requirements of the Code
Under Rule 8.3(a) of the Code, any person who is interested in 1
per cent. or more of any class of relevant securities of an offeree
company or of any securities exchange offeror (being any offeror
other than an offeror in respect of which it has been announced
that its offer is, or is likely to be, solely in cash) must make an
Opening Position Disclosure following the commencement of the offer
period and, if later, following the announcement in which any
securities exchange offeror is first identified. An Opening
Position Disclosure must contain details of the person's interests
and short positions in, and rights to subscribe for, any relevant
securities of each of: (i) the offeree company and (ii) any
securities exchange offeror(s). An Opening Position Disclosure by a
person to whom Rule 8.3(a) applies must be made by no later than
3.30 pm on the 10th Business Day following the commencement of the
offer period and, if appropriate, by no later than 3.30 pm on the
10th Business Day following the announcement in which any
securities exchange offeror is first identified. Relevant persons
who deal in the relevant securities of the offeree company or of a
securities exchange offeror prior to the deadline for making an
Opening Position Disclosure must instead make a Dealing
Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes,
interested in 1 per cent. or more of any class of relevant
securities of the offeree company or of any securities exchange
offeror must make a Dealing Disclosure if the person deals in any
relevant securities of the offeree company or of any securities
exchange offeror. A Dealing Disclosure must contain details of the
dealing concerned and of the person's interests and short positions
in, and rights to subscribe for, any relevant securities of each
of: (i) the offeree company and (ii) any securities exchange
offeror, save to the extent that these details have previously been
disclosed under Rule 8 of the Code. A Dealing Disclosure by a
person to whom Rule 8.3(b) applies must be made by no later than
3.30 pm on the Business Day following the date of the relevant
dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of an offeree company or a
securities exchange offeror, they will be deemed to be a single
person for the purpose of Rule 8.3 of the Code.
Opening Position Disclosures must also be made by the offeree
company and by any offeror, and Dealing Disclosures must also be
made by the offeree company, by any offeror and by any persons
acting in concert with any of them (see Rules 8.1, 8.2 and 8.4 of
the Code).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Takeover Panel's website at www.thetakeoverpanel.org.uk,
including details of the number of relevant securities in issue,
when the offer period commenced and when any offeror was first
identified. You should contact the Takeover Panel's Market
Surveillance Unit on +44 (0) 20 7638 0129 if you are in any doubt
as to whether you are required to make an Opening Position
Disclosure or a Dealing Disclosure.
Rule 2.9 disclosure
In accordance with Rule 2.9 of the Code, ECSC confirms that, as
at the close of business on the Last Practicable Date, it has
10,007,588 ordinary shares of 1 penny each in issue and admitted to
trading on the AIM market of the London Stock Exchange. The Company
does not hold any ECSC Shares in treasury. The International
Securities Identification Number for ECSC Shares is GB00BYMJ4J99
.
Electronic communications
Please be aware that all addresses, electronic addresses (if
any) and certain other information provided by the ECSC
Shareholders, persons with information rights and other relevant
persons for the receipt of communications from ECSC may be provided
to offerors (including Daisy) during the Offer Period as required
under Section 4 of Appendix 4 of the Code to comply with Rule
2.11(c) of the Code.
APPIX I
CONDITIONS AND CERTAIN FURTHER TERMS OF THE ACQUISITION
Part A: Conditions to the Scheme and the Acquisition
The Acquisition is conditional upon the Scheme becoming
unconditional and effective, subject to the Code, by not later than
5pm on the Long Stop Date or such later date (if any) as Daisy and
ECSC may agree and (if required) the Court and Takeover Panel
allow.
1. The Scheme shall be subject to the following conditions:
(a)
(i) its approval by a majority in number of the ECSC
Shareholders who are on the register of members of ECSC at the
Voting Record Time and who are present and vote, whether in person
or by proxy, at the Court Meeting (or at any adjournment thereof)
(and at any separate class meeting which may be required by the
Court) and who represent 75 per cent. or more in value of the ECSC
Shares voted by those ECSC Shareholders; and
(ii) such Court Meeting (or any adjournment thereof) being held
on or before the 22nd day after the expected date of the Court
Meeting to be set out in the Scheme Document (or such later date,
if any, as Daisy and ECSC may agree with the consent of the
Takeover Panel and the Court may allow);
(b)
(i) the passing of the Resolutions by the requisite majorities
at the General Meeting (or at any adjournment thereof); and
(ii) such General Meeting (or any adjournment thereof) being
held on or before the 22nd day after the expected date of the
General Meeting to be set out in the Scheme Document (or such later
date, if any, as Daisy and ECSC may agree with the consent of the
Takeover Panel and the Court may allow);
(c)
(i) the sanction of the Scheme by the Court (with or without
modification but subject to any modification being on terms
acceptable to Daisy and ECSC) at the Court Hearing; and
(ii) such Court Hearing being held on or before the 22nd day
after the expected date of the Court Hearing to be set out in the
Scheme Document (or such later date, if any, as Daisy and ECSC may
agree with the consent of the Takeover Panel and the Court may
allow); and
(d) delivery of a copy of the Court Order to the Registrar of Companies.
2. In addition, subject as stated in Part B below and to the
requirements of the Takeover Panel and in accordance with the Code,
the Acquisition shall be conditional upon the following Conditions
and, accordingly, the Court Order shall not be delivered to the
Registrar of Companies unless the Conditions referred to in this
paragraph 2 (as amended, if appropriate) have been satisfied or,
where relevant, waived prior to the Scheme being sanctioned by the
Court in accordance with the Condition in paragraph 1(c)(i)
above:
(a) NS&I Act
a notification having been made and accepted under the NS&I
Act and one of the following having occurred:
(i) the Secretary of State confirming before the end of the 30
working days review period that no further action will be taken in
relation to the Acquisition; or
(ii) the receipt of a final notification confirming that the
Secretary of State will take no further action in relation to the
call-in notice and the Acquisition pursuant to section 26(1)(b) of
the NS&I Act; or
(iii) the Secretary of State makes a final order pursuant to
section 26(1)((a) of the NS&I Act in relation to the
Acquisition, provided that such an order would not prevent
completion of the Acquisition, and subject to such remedies or
conditions under Part 2 of the NS&I Act as are reasonably
acceptable to Daisy (and, to the extent relevant, all conditions or
obligations contained in such an order necessary for completion of
the Acquisition having been satisfied or complied with or any
restriction preventing completion of the Acquisition having been
lifted or released);
(b) Antitrust and regulatory
no Third Party (including antitrust regulators) having given
notice of a decision to take, institute, implement or threaten any
action, proceeding, suit, investigation, enquiry or reference (and,
in each case, not having withdrawn the same), or having required
any action to be taken or otherwise having done anything, or having
enacted, made or proposed any statute, regulation, decision, order
or change to published practice (and in each case, not having
withdrawn the same) and there not continuing to be outstanding any
statute, regulation, decision or order which would or might
reasonably be expected to, in any case to an extent or in a manner
which is or would be material and adverse in the context of the
Wider ECSC Group taken as a whole or in the context of the
Acquisition:
(i) require, prevent or materially delay the divestiture or
materially alter the terms envisaged for such divestiture by any
member of the Daisy Group or by any member of the Wider ECSC Group
of all or any material part of their respective businesses, assets,
properties or any shares or other securities (or the equivalent) in
any member of the Wider ECSC Group or any member of the Daisy Group
or impose any material limitation on the ability of all or any of
them to conduct their respective businesses (or any part thereof)
or to own, control or manage any of their respective assets or
properties (or any part thereof);
(ii) except pursuant to Chapter 3 of Part 28 of the Companies
Act in the event that Daisy elects to implement the Acquisition by
way of a Takeover Offer, require any member of the Daisy Group or
the Wider ECSC Group to acquire or offer to acquire any shares,
other securities (or the equivalent) or interest in any member of
the Wider ECSC Group or any material asset owned by any Third Party
(other than in connection with the implementation of the
Acquisition);
(iii) impose any material and adverse limitation on, or result
in a material and adverse delay in, the ability of any member of
the Daisy Group, directly or indirectly, to acquire, hold or
exercise effectively all or any rights of ownership in respect of
shares or loans or securities convertible into shares or other
securities (or the equivalent) in ECSC or on the ability of any
member of the Wider ECSC Group or any member of the Daisy Group,
directly or indirectly, to hold or exercise effectively all or any
rights of ownership in respect of shares or loans or any other
securities (or the equivalent) in, or to exercise voting or
management control over, any other member of the Wider ECSC
Group;
(iv) make the Acquisition, its implementation or the acquisition
or proposed acquisition of any shares or other securities in, or
control or management of, ECSC by any member of the Daisy Group
void, unenforceable and/or illegal under the laws of any relevant
jurisdiction, or otherwise, directly or indirectly, prevent or
prohibit, restrict, restrain or delay or otherwise interfere with
the implementation of, or impose additional conditions or
obligations with respect to, or otherwise challenge, impede,
interfere or require material and adverse amendment to the terms of
the Acquisition or the acquisition or proposed acquisition of any
shares or other securities in, or control or management of, ECSC by
any member of the Daisy Group;
(v) impose any material limitation on, or result in material
delay in, the ability of any member of the Daisy Group or any
member of the Wider ECSC Group to conduct, integrate or co-ordinate
all or any part of its business with all or any part of the
business of any other member of the Daisy Group and/or the Wider
ECSC Group;
(vi) result in any member of the Wider ECSC Group or any member
of the Daisy Group ceasing to be able to carry on business under
any name under which it currently does so in any jurisdiction (the
consequences of which are material and adverse in the context of
either the Daisy Group or the Wider ECSC Group, taken as a whole);
or
(vii) otherwise materially and adversely affect all or any of
the business, assets, liabilities or profits, of any member of the
Wider ECSC Group or any member of the Daisy Group,
and all applicable waiting and other time periods (including any
extensions thereof) during which any such Third Party could decide
to take, institute, implement or threaten any such action,
proceeding, suit, investigation, enquiry or reference or take any
other step under the laws of any relevant jurisdiction in respect
of the Acquisition or the acquisition or proposed acquisition of
any ECSC Shares or other securities in, or control or management
of, ECSC or otherwise intervene having expired, lapsed or been
terminated;
(c) Other regulatory approvals
each Governmental Entity, which regulates or licenses any member
of the ECSC Group or any other body corporate in which any member
of the ECSC Group has an interest in shares, and whose prior
approval, consent or non-objection to any change in control, or
acquisition of (or increase in) control in respect of that or any
other member of the ECSC Group is required, or any Governmental
Entity, whose prior approval, consent or non-objection of the
Acquisition is otherwise required, or from whom one or more
material licences or permissions are required in order to complete
the Acquisition, having given its approval, non-objection or
legitimate deemed consent or consent in writing thereto and, as the
case may be, having granted such licences and permissions (in each
case where required and on terms reasonably satisfactory to
Daisy);
(d) Notifications, waiting periods and authorisations
all material notifications, filings or applications which are
necessary having been made in connection with the Acquisition and
all necessary waiting and other time periods (including any
extensions thereof) under any applicable legislation or regulation
of any jurisdiction having expired, lapsed or been terminated or
waived (as appropriate) and all statutory and regulatory
obligations in any jurisdiction having been complied with, in each
case, in respect of the Scheme and the Acquisition and all
Authorisations required by applicable law in any jurisdiction for,
or in respect of, the Acquisition and, except pursuant to Chapter 3
of Part 28 of the Companies Act, the acquisition or the proposed
acquisition of any shares or other securities in, or control or
management of, ECSC or any other member of the Wider ECSC Group by
any member of the Daisy Group having been obtained in terms and in
a form reasonably acceptable to Daisy from all appropriate Third
Parties or (without prejudice to the generality of the foregoing)
from any person or bodies with whom any member of the Wider ECSC
Group or the Daisy Group has entered into material contractual
arrangements and all such Authorisations required by applicable law
to carry on the business of any member of the Wider ECSC Group in
any jurisdiction having been obtained and all such Authorisations
remaining in full force and effect at the time at which the
Acquisition becomes otherwise wholly unconditional and there being
no notice or intimation of an intention to revoke, suspend,
restrict, modify or not to renew such Authorisations;
(e) ECSC Shareholder resolution
no member of the Wider ECSC Group having taken (or agreed or
proposed to take) any action that requires, or would require, the
consent of the Takeover Panel or the approval of ECSC Shareholders
in accordance with, or as contemplated by, Rule 21.1 of the Code
unless such consent has been obtained, or the requirement for such
consent is disapplied by the Takeover Panel;
(f) Certain matters arising as a result of any arrangement, agreement, etc.
except as Disclosed, there being no provision of any
arrangement, agreement, lease, licence, franchise, permit or other
instrument to which any member of the Wider ECSC Group is a party
or by or to which any such member or any of its assets is or may be
bound, entitled or subject, which, as a consequence of the
Acquisition or the acquisition or the proposed acquisition by any
member of the Daisy Group of any shares or other securities (or the
equivalent) in ECSC or because of a change in the control or
management of any member of the Wider ECSC Group or otherwise,
would or might reasonably be expected to result in (in each case to
an extent or in a manner which is material and adverse in the
context of the Wider ECSC Group, taken as a whole):
(i) any monies borrowed by, or any other indebtedness or
liabilities, actual or contingent, of, or any grant available to,
any such member being or becoming repayable, or capable of being
declared repayable, immediately or prior to its or their stated
maturity date or repayment date, or the ability of any such member
to borrow monies or incur any indebtedness being withdrawn or
inhibited or being capable of becoming or being withdrawn or
inhibited;
(ii) the creation, save in the ordinary and usual course of
business, or enforcement of any mortgage, charge or other security
interest over the whole or any part of the business, property or
assets of such member or any such mortgage, charge or other
security interest (whenever created, arising or having arisen)
becoming enforceable;
(iii) any such arrangement, agreement, lease, licence,
franchise, permit or other instrument or the rights, liabilities,
obligations or interests of any such member in or with any other
person (or any arrangement or arrangements relating to any such
interests or business) being materially and adversely modified or
materially and adversely affected or any material obligation or
liability arising or any material and adverse action being, or
becoming capable of being terminated taken or arising
thereunder;
(iv) any material liability of any such member to make any
severance, termination, bonus or other payment to any of its
directors or other officers;
(v) the rights, liabilities, obligations, interests or business
of any such member or any member of the Wider ECSC Group under any
such arrangement, agreement, licence, permit, lease or instrument
or the interests or business of any such member or any member of
the Wider ECSC Group in or with any other person or body or firm or
company (or any arrangement relating to any such interests or
business) being or becoming capable of being terminated, or
materially and adversely modified or affected or any materially
onerous obligation or liability arising or any material and adverse
action being taken thereunder;
(vi) any such member ceasing to be able to carry on business
under any name under which it presently carries on business; or
(vii) the creation or acceleration of any liability (actual or
contingent) by any such member other than trade creditors or other
liabilities incurred in the ordinary course of business.
(g) Certain events occurring since 30 June 2022
except as Disclosed, no member of the Wider ECSC Group having
since 30 June 2022
(i) issued or agreed to issue or authorised or proposed or
announced its intention to authorise or propose the issue of
additional shares of any class, or securities or securities
convertible into, or exchangeable for, or rights, warrants or
options to subscribe for or acquire, any such shares, securities or
convertible securities or transferred or sold or agreed to transfer
or sell or authorised or proposed the transfer or sale of ECSC
Shares out of treasury (except, where relevant, as between ECSC and
wholly-owned subsidiaries of ECSC or between the wholly-owned
subsidiaries of ECSC and except for the issue of ECSC Shares
pursuant to or in connection with the exercise or vesting of
options or awards granted under, or the grant of options or awards
under the ECSC Share Schemes);
(ii) recommended, declared, paid or made or proposed to
recommend, declare, pay or make any bonus, dividend or other
distribution (whether payable in cash or otherwise) other than
dividends (or other distributions whether payable in cash or
otherwise) lawfully paid or made by any wholly-owned subsidiary of
ECSC to ECSC or any of its wholly-owned subsidiaries;
(iii) other than pursuant to the Acquisition (and except for
transactions between ECSC and its wholly-owned subsidiaries or
between the wholly-owned subsidiaries of ECSC and transactions in
the ordinary course of business) implemented, effected, authorised
or proposed or announced its intention to implement, effect,
authorise or propose any merger, demerger, reconstruction,
amalgamation, scheme, commitment or acquisition or disposal of
assets or shares or loan capital (or the equivalent thereof) in any
undertaking or undertakings in any such case to an extent which is
material in the context of the Wider ECSC Group, taken as a
whole;
(iv) except for transactions between ECSC and its wholly-owned
subsidiaries or between the wholly-owned subsidiaries of ECSC and
transactions in the ordinary course of business, disposed of, or
transferred, mortgaged or created any security interest over any
material asset or any right, title or interest in any material
asset or authorised, proposed or announced any intention to do
so;
(v) except for transactions between ECSC and its wholly-owned
subsidiaries or between the wholly-owned subsidiaries of ECSC,
issued, authorised or proposed or announced an intention to
authorise or propose the issue of or made any change in or to the
terms of any debentures or become subject to any contingent
liability or incurred or increased any indebtedness which, in any
such case, is material in the context of the Wider ECSC Group,
taken as a whole;
(vi) entered into or varied or authorised, proposed or announced
its intention to enter into or vary any contract, arrangement,
agreement, transaction or commitment (whether in respect of capital
expenditure or otherwise) except in the ordinary course of business
which is of a long term, unusual or onerous nature or magnitude or
which involves or could involve an obligation of a material nature
or magnitude which is reasonably likely to be materially
restrictive on the business of any member of the Wider ECSC Group
and which, taken together with any other such contract,
arrangement, agreement, transaction or commitment is material in
the context of the Wider ECSC Group, taken as a whole;
(vii) save as agreed with the Takeover Panel, entered into or
materially varied the terms of, or made any offer (which remains
open for acceptance) to enter into or vary to a material extent the
terms of any contract, service agreement, commitment or arrangement
with any director or senior executive of any member of the Wider
ECSC Group save for usual annual salary reviews, such entry,
variation or authorisation being material in the context of the
Wider ECSC Group taken as a whole;
(viii) save as agreed with the Takeover Panel, proposed, agreed
to provide or modified the terms of any share option scheme,
incentive scheme or other benefit relating to the employment or
termination of employment of any employee of the Wider ECSC Group,
otherwise than in the ordinary course of business and in accordance
with the terms of the Acquisition;
(ix) purchased, redeemed or repaid or announced any proposal to
purchase, redeem or repay any of its own shares or other securities
or reduced or made any other change to any part of its share
capital;
(x) waived, compromised or settled any claim where such waiver,
settlement or compromise would have a material and adverse effect
on the financial position of the Wider ECSC Group, taken as a
whole;
(xi) terminated or varied the terms of any agreement or
arrangement between any member of the Wider ECSC Group and any
other person in a manner which would or might reasonably be
expected to have a material and adverse effect on the financial
position of the Wider ECSC Group, taken as a whole;
(xii) save in connection with the Acquisition and the Scheme,
made any alteration to its memorandum, articles of association or
other incorporation documents or any alteration to the memorandum,
articles of association or other incorporation documents of any
other member of the Wider ECSC Group which is material in the
context of the Wider ECSC Group;
(xiii) other than as required by applicable law, made or agreed
or consented to any significant change to:
(A) the terms of the trust deeds and rules constituting the
pension scheme(s) established by any member of the Wider ECSC Group
for its directors, employees or their dependants;
(B) the contributions payable to any such scheme(s) or to the
benefits which accrue, or to the pensions which are payable,
thereunder;
(C) the basis on which qualification for, or accrual or
entitlement to, such benefits or pensions are calculated or
determined; or
(D) the basis upon which the liabilities (including pensions) of
such pension schemes are funded, valued, made, agreed or consented
to,
to an extent which is in any such case material in the context
of the Wider ECSC Group, taken as a whole;
(xiv) been unable, or admitted in writing that it is unable, to
pay its debts or commenced negotiations with one or more of its
creditors with a view to rescheduling or restructuring any of its
indebtedness, or having stopped or suspended (or threatened to stop
or suspend) payment of its debts generally or ceased or threatened
to cease carrying on all or a substantial part of its business
which is material in the context of the Wider ECSC Group, taken as
a whole;
(xv) (other than in respect of a member of the Wider ECSC Group
which is dormant and was solvent at the relevant time) taken or
proposed any steps, corporate action or had any legal proceedings
instituted or threatened against it in relation to the suspension
of payments, a moratorium of any indebtedness, its winding-up
(voluntary or otherwise), dissolution, reorganisation or for the
appointment of a receiver, administrator, manager, administrative
receiver, trustee or similar officer of all or any material part of
its assets or revenues or any analogous or equivalent steps or
proceedings in any jurisdiction or appointed any analogous person
in any jurisdiction or had any such person appointed;
(xvi) Except for transactions between ECSC and its wholly-owned
subsidiaries or between the wholly-owned subsidiaries, made,
authorised, proposed or announced an intention to propose any
change in its loan capital which is material in the context of the
Wider ECSC Group taken as a whole;
(xvii) entered into, implemented or authorised the entry into,
any joint venture, asset or profit sharing arrangement, partnership
or merger of business or corporate entities, which, in any such
case, is material in the context of the Wider ECSC Group, taken as
a whole; or
(xviii) entered into any agreement, arrangement, commitment or
contract or passed any resolution or made any offer (which remains
open for acceptance) with respect to, or announced an intention to,
or to propose to, effect any of the transactions, matters or events
referred to in this Condition (f);
(h) No adverse change, litigation, regulatory enquiry or similar
except as Disclosed, since 30 June 2022 there having been:
(i) no material and adverse change and no circumstance having
arisen which would or might reasonably be expected to result in any
material and adverse change in, the business, assets, liabilities,
shareholders' equity, financial or trading position or profits or
operational performance of any member of the Wider ECSC Group which
is material in the context of the Wider ECSC Group, taken as a
whole;
(ii) other than pursuant to the Acquisition and the Scheme no
litigation, arbitration proceedings, prosecution or other legal
proceedings (including, without limitation, with respect to
intellectual property rights owned or used by the ECSC Group which
are material in the context of the Wider ECSC Group) to which any
member of the Wider ECSC Group is or may become a party (whether as
a claimant, defendant or otherwise) having been announced,
threatened in writing, implemented or instituted by or against or
remaining outstanding against or in respect of, any member of the
Wider ECSC Group, in each case which would or might reasonably be
expected to have a material adverse effect on the Wider ECSC Group,
taken as a whole;
(iii) no enquiry, review or investigation by, or complaint or
reference to, any Third Party against or in respect of any member
of the Wider ECSC Group (or any person in respect of which any such
member has or may have responsibility or liability) having been
threatened, announced, implemented or instituted or remaining
outstanding by, against or in respect of any member of the Wider
ECSC Group, in each case, which would or might reasonably be
expected to have a material adverse effect on the Wider ECSC Group,
taken as a whole;
(iv) no contingent or other liability having arisen or become
apparent to Daisy or increased other than in the ordinary course of
business which would or might reasonably be expected to affect
adversely the business, assets, financial or trading position or
profits of any member of the Wider ECSC Group to an extent which is
material in the context of the Wider ECSC Group, taken as a whole;
and
(v) no steps having been taken and no omissions having been made
which are reasonably likely to result in the withdrawal,
cancellation, termination or modification of any licence held by
any member of the Wider ECSC Group which is necessary for the
proper carrying on of its business and the withdrawal,
cancellation, termination or modification of which would or might
reasonably be expected to have a material adverse effect on the
Wider ECSC Group, taken as a whole; or
(i) No discovery of certain matters regarding information and
liabilities, corruption and intellectual property
except as Disclosed, Daisy not having discovered, in each case,
to an extent which is material and adverse in the context of the
Wider ECSC Group taken as a whole or in the context of the
Acquisition, that:
(i) any financial, business or other information concerning the
Wider ECSC Group announced publicly prior to the date of this
Announcement or disclosed to any member of the Daisy Group by or on
behalf of any member of the Wider ECSC Group prior to the date of
this Announcement is materially misleading, contains a material
misrepresentation of any fact, or omits to state a fact necessary
to make that information not misleading (and which was not
subsequently publicly corrected before the date of this
Announcement or otherwise to Daisy or its professional
advisers);
(ii) any member of the Wider ECSC Group is subject to any
liability, contingent or otherwise;
(iii) any past or present member of the Wider ECSC Group has not
complied in any material respect with all applicable legislation,
regulations of any jurisdiction or any Authorisations relating to
the use, treatment, storage, carriage, disposal, discharge,
spillage, release, leak or emission of any waste or hazardous
substance or any substance likely to impair the environment
(including any property) or harm human or animal health or
otherwise relating to environmental matters or the health and
safety of humans, which non-compliance would be likely to give rise
to any material liability including any penalty for non-compliance
(whether actual or contingent) on the part of any member of the
Wider ECSC Group;
(iv) there has been a material disposal, discharge, spillage,
accumulation, release, leak, emission or the migration, production,
supply, treatment, storage, transport or use of any waste or
hazardous substance or any substance likely to impair the
environment (including any property) or harm human or animal health
which (whether or not giving rise to non-compliance with any law or
regulation), would be likely to give rise to any material liability
(whether actual or contingent) on the part of any member of the
Wider ECSC Group;
(v) there is, or is reasonably likely to be, any material
obligation or liability (whether actual or contingent) or
requirement to make good, remediate, repair, reinstate or clean up
any property or asset currently or previously owned, occupied,
operated or made use of or controlled by any past or present member
of the Wider ECSC Group (or on its behalf), or in which any such
member may have, or previously have had or be deemed to have had,
an interest, under any environmental legislation, common law,
regulation, notice, circular, Authorisation or order of any Third
Party in any jurisdiction or to contribute to the cost thereof or
associated therewith or indemnify any person in relation
thereto;
(vi) circumstances exist (whether as a result of the making of
the Acquisition or otherwise) which would be reasonably likely to
lead to any Third Party instituting (or whereby any member of the
Wider ECSC Group would be likely to be required to institute) an
environmental, audit or take any steps which would, in any such
case, be reasonably likely to result in any actual or contingent
liability to improve or install new plant or equipment or to make
good, repair, reinstate or clean up any property of any description
or any asset now or previously owned, occupied or made use of by
any past or present member of the Wider ECSC Group (or on its
behalf) or by any person for which a member of the Wider ECSC Group
is or has been responsible, or in which any such member may have,
or previously have had or be deemed to have had, an interest;
(vii) any member of the Wider ECSC Group is subject to any
liability, actual or contingent and which has arisen otherwise than
in the ordinary course of business, which is not disclosed in the
unaudited interim financial statements for the period ending 30
June 2022;
(viii) circumstances exist whereby a person has, or class of
persons have, or is reasonably likely to have, any legitimate claim
or claims against any member of the Wider ECSC Group in respect of
any product or process, or materials used therein, now or
previously manufactured, sold, supplied or carried out by any past
or present member of the Wider ECSC Group;
(ix) any member of the Wider ECSC Group or any person that
performs or has performed services for or on behalf of any such
member is or has engaged in any activity, practice or conduct which
would constitute an offence under the Bribery Act 2010, the US
Foreign Corrupt Practices Act of 1977 or any other anti-corruption
legislation applicable to the Wider ECSC Group; or any person that
performs or has performed services for or on behalf of the Wider
ECSC Group is or has at any time engaged in any activity, practice
or conduct in connection with the performance of such services
which would constitute an offence under the Bribery Act 2010, the
US Foreign Corrupt Practices Act of 1977 or any other applicable
anti-corruption legislation applicable to the Wider ECSC Group;
(x) any past or present member of the Wider ECSC Group has
engaged in any activity or business with, or made any investments
in, or made any payments to any government, entity or individual
covered by any of the economic sanctions administered by the United
Nations or the European Union (or any of their respective member
states) or the United States Office of Foreign Assets Control or
any other governments or supranational body or authority in any
jurisdiction;
(xi) any asset of any member of the Wider ECSC Group constitutes
criminal property as defined by section 340(3) of the Proceeds of
Crime Act 2002 (but disregarding paragraph (b) of that
definition);
(xii) no circumstance having arisen or event having occurred in
relation to any intellectual property owned or used by any member
of the Wider ECSC Group, which would have a material adverse effect
on the Wider ECSC Group, taken as a whole, including:
(A) any member of the Wider ECSC Group losing its title to any
of its intellectual property, or any intellectual property owned by
the Wider ECSC Group being revoked, cancelled or declared
invalid;
(B) any claim being asserted or threatened by any person
challenging the ownership of any member of the Wider ECSC Group to,
or the validity or effectiveness of, any of its intellectual
property; or
(C) any agreement regarding the use of any intellectual property
licensed to or by any member of the Wider ECSC Group being
terminated or varied.
Part B: Certain further terms of the Acquisition
1. Subject to the requirements of the Takeover Panel, Daisy
reserves the right in its sole discretion to waive (if capable of
waiver), in whole or part:
(a) any of the Conditions set out in the above Condition 1 of
Part A relating to the timing of the Court Meeting, the General
Meeting and the sanctioning of the Scheme. If any of the deadlines
for those events are not met, Daisy shall make an announcement by
8.00 a.m. on the Business Day following such deadline confirming
whether it has invoked or waived the relevant Condition or agreed
with ECSC to extend the deadline in relation to the relevant
Condition; and
(b) in whole or in part, all or any of the above Conditions 2(a)
(NS&I Act) to (i) (No discovery of certain matters regarding
information and liabilities, corruption and intellectual property)
of Part A (inclusive),
in all other respects, Conditions 1 and 2 cannot be waived.
2. Conditions 2(a) (NS&I Act) to (i) (No discovery of
certain matters regarding information and liabilities, corruption
and intellectual property) of Part A (inclusive) must be fulfilled
or waived by no later than 11:59 p.m. on the date immediately
preceding the date of the Court Hearing, failing which the Scheme
will lapse or, if the Acquisition is implemented by way of a
Takeover Offer, no later than as permitted by the Takeover Panel.
Daisy shall be under no obligation to waive or treat as satisfied
any of the Conditions by a date earlier than the latest date
specified above for the fulfilment or waiver thereof,
notwithstanding that any such Condition or the other Conditions of
the Scheme and the Acquisition may at such earlier date have been
waived or fulfilled and that there are at such earlier date no
circumstances indicating that any of such Conditions may not be
capable of fulfilment.
3. Under Rule 13.5 of the Code, Daisy may not invoke a Condition
so as to cause the Scheme not to proceed, or to lapse, or so as to
cause any Takeover Offer to lapse or be withdrawn, unless the
circumstances which give rise to the right to invoke the Condition
are of material significance to Daisy in the context of the
Acquisition. Condition 1 of Part A (and, if applicable, any
acceptance condition adopted on the basis specified in paragraph 5
below in relation to any Takeover Offer) and paragraph 6 below are
not subject to this provision of the Code.
4. If Daisy is required by the Takeover Panel to make an offer
for ECSC Shares under the provisions of Rule 9 of the Code, Daisy
may make such alterations to the Conditions and further terms of
the Acquisition as are necessary to comply with the provisions of
that Rule.
5. Daisy reserves the right to elect (with the consent of the
Takeover Panel) to implement the Acquisition by making, directly or
indirectly through a subsidiary or nominee of Daisy, a Takeover
Offer as an alternative to the Scheme. In such event, the Takeover
Offer will be implemented on the same terms or, if Daisy so decides
(with the consent of the Takeover Panel), on such other terms being
no less favourable, subject to appropriate amendments, as far as
applicable, as those which would apply to the Scheme. The
acceptance condition would be set at 90 per cent. of the shares to
which such Takeover Offer relates (or such lesser percentage, being
more than 50 per cent., as Daisy may decide with the consent of the
Takeover Panel). Further, if sufficient acceptances of the Takeover
Offer are received and/or sufficient ECSC Shares are otherwise
acquired, it is the intention of Daisy to apply the provisions of
the Companies Act to compulsorily acquire any outstanding ECSC
Shares to which such Takeover Offer relates.
6. The Acquisition will lapse and shall not become effective if
(unless otherwise agreed with the Takeover Panel) if:
(a) in so far as the Acquisition or any matter arising from or
relating to the Scheme or Acquisition constitutes a concentration
with a Community dimension within the scope of the Regulation, the
European Commission either initiates proceedings under Article
6(1)(c) of the Regulation or makes a referral to a competent
authority of the United Kingdom under Article 9(1) of the
Regulation and there is then a CMA Phase 2 Reference; or
(b) in so far as the Acquisition or any matter arising from the
Scheme or Acquisition does not constitute a concentration with a
Community dimension within the scope of the Regulation, the Scheme
or Acquisition or any matter arising from or relating to the
Acquisition becomes subject to a CMA Phase 2 Reference,
in each case, before the date of the Court Meeting.
7. Daisy reserves the right, with the prior consent of the
Takeover Panel, for any other member of the Daisy Group from time
to time to implement the Acquisition.
8. The ECSC Shares shall be acquired by Daisy, pursuant to the
Acquisition, with full title guarantee, fully paid and free from
all liens, equitable interests, charges, encumbrances, rights of
pre-emption and any other third party rights and interests
whatsoever and together with all rights existing at the date of
this Announcement or thereafter attaching thereto, including
(without limitation) the right to receive and retain, in full, all
dividends and other distributions (if any) declared, made or paid
or any other return of capital (whether by way of reduction of
share capital or share premium account or otherwise) made on or
after the date of this Announcement in respect of the ECSC
Shares.
9. Subject to the terms of the Scheme, if after the date of this
Announcement but prior to the Effective Date, any dividend or other
distribution is declared, paid or made or becomes payable by ECSC,
Daisy reserves the right (without prejudice to any right of Daisy,
with the consent of the Takeover Panel, to invoke Condition
2(g)(ii) above) to reduce the Cash Consideration payable under the
terms of the Acquisition by the aggregate amount of such dividend
or distribution and, accordingly, the relevant eligible ECSC
Shareholders would be entitled to retain any such dividend or
distribution declared, made or paid. Furthermore, Daisy reserves
the right to reduce the Cash Consideration payable in respect of an
ECSC Share in such circumstances as are, and by such amount as is,
permitted by the Takeover Panel.
If any such dividend or distribution occurs, any reference in
this Announcement to the consideration payable or the Cash
Consideration shall be deemed to be a reference to the Cash
Consideration as so reduced. If such reduction occurs,
notwithstanding the terms on which the ECSC Shares are expressed to
be acquired by Daisy pursuant to the Acquisition in Appendix I, the
ECSC Shares shall be acquired by or on behalf of Daisy pursuant to
the acquisition together with all rights now and hereafter
attaching to such ECSC Shares including, without limitation, voting
rights and the right to receive and retain, in full, all dividends
and other distributions (if any) declared, made or paid or any
other return of capital (whether by way of reduction of share
capital or share premium account or otherwise) made on or after the
date of this Announcement.
To the extent that such a dividend or distribution has been
declared, paid, made or is payable and it is: (i) transferred
pursuant to the Acquisition on a basis which entitles Daisy to
receive the dividend or distribution and to retain it; or (ii)
cancelled, the Cash Consideration will not be subject to change in
accordance with this paragraph.
Any exercise by Daisy of its rights referred to in this
paragraph shall be the subject of an announcement and, for the
avoidance of doubt, shall not be regarded as constituting any
revision or variation of the terms of the Acquisition or the
Scheme.
10. The availability of the Acquisition to persons not resident
in the United Kingdom may be affected by the laws of relevant
jurisdictions. Therefore any persons who are subject to the laws of
any jurisdiction other than the United Kingdom and any ECSC
Shareholders who are not resident in the United Kingdom will need
to inform themselves about and observe any applicable
requirements.
11. Unless otherwise determined by Daisy or required by the Code
and permitted by applicable law and regulations, the Acquisition is
not being, and will not be, made, directly or indirectly, in, into
or by the use of the mails of, or by any other means or
instrumentality (including, but not limited to, facsimile, email or
other electronic transmission, telex or telephone) of interstate or
foreign commerce of, or of any facility of a national, state or
other securities exchange of, any Restricted Jurisdiction and no
person may vote in favour of the Acquisition by any such use,
means, instrumentality or facility or from within a Restricted
Jurisdiction.
12. Each of the Conditions shall be regarded as a separate
Condition and shall not be limited by reference to any other
Condition.
13. This Announcement and any rights or liabilities arising
hereunder, the Acquisition, the Scheme and the Forms of Proxy will
be governed by English law and will be subject to the jurisdiction
of the English courts. The Acquisition shall be subject to the
applicable requirements of the Code, the Takeover Panel, the London
Stock Exchange, the FCA and the AIM Rules.
APPIX II
SOURCES OF INFORMATION AND BASES OF CALCULATION
In this Announcement:
1. Unless otherwise stated, financial information relating to
ECSC has been extracted or derived (without material adjustment)
from the audited consolidated financial statements of ECSC for the
financial year ended 31 December 2021 or ECSC's half-year report
for the six months ended 30 June 2022 or the trading update
announcement released by ECSC on 28 February 2023.
2. References to the existing issued share capital of ECSC are
to the number of ECSC Shares in issue as at the close of business
on the Last Practicable Date, which was 10,007,588 ECSC Shares. The
Company does not hold any Ordinary Shares in treasury. The
international securities identification number for the ECSC Shares
is GB00BYMJ4J99 .
3. The fully diluted share capital of ECSC has been calculated
based on 10,013,999 ECSC Shares, being:
-- the number of existing ECSC Shares set out in paragraph 2 of
this Appendix II above; plus
-- a further 6,411 ECSC Shares which are expected to be issued
under the terms of the ECSC Share Schemes.
4. Unless otherwise stated, all prices for ECSC Shares are the
mid-market Closing Price for the relevant date.
5. The Closing Prices of ECSC Shares are taken from the AIM
Appendix to the London Stock Exchange Daily Official List.
6. The volume weighted average prices for ECSC Shares are taken from Bloomberg.
1.
APPIX III
DETAILS OF IRREVOCABLE UNDERTAKINGS
Daisy has received irrevocable undertakings from the following
holders or controllers of ECSC Shares to vote, or procure votes, in
favour of the Scheme at the Court Meeting and the Resolutions to be
proposed at the General Meeting (or, if (with the consent of the
Takeover Panel) Daisy exercises its right to implement the
Acquisition by way of a Takeover Offer, to accept, or procure
acceptances of, such Takeover Offer) in respect of 3,597,308 ECSC
Shares, in aggregate, representing approximately 35.95 per cent. of
the issued share capital of ECSC as at the close of business on the
Last Practicable Date, comprised as follows:
Irrevocable undertakings
ECSC Directors
Name Number of ECSC Shares Percentage of ECSC Shares in issue/%
Ian Mann 2,388,756 23.87
Lucy Sharp 250,807 2.51
David Mathewson 35,419 0.35
Gemma Basharan 11,562 0.12
Total 2,686,544 26.85
Each of the ECSC Directors listed above has irrevocably
undertaken to Daisy that he will exercise or, where applicable,
procure the exercise of, all votes (whether on a show of hands or a
poll and whether in person or by proxy) in relation to the ECSC
Shares held by him or members of his immediate family, related
trusts or nominee(s) (together with any ECSC Shares issued after
the date of the undertaking and attributable to, or derived from,
such shares) at the Court Meeting and the General Meeting (in each
case, including any adjournment thereof) in favour of the Scheme
and the Resolutions, respectively (or, if (with the consent of the
Takeover Panel) Daisy exercises its right to implement the
Acquisition by way of a Takeover Offer, to accept, or procure
acceptances of, such Takeover Offer in respect of all the ECSC
Shares held by him or members of his immediate family, related
trusts or nominee(s)).
These irrevocable commitments extend to any ECSC Shares arising
from the exercise of options and/or awards held under the ECSC
Share Schemes prior to the date of the Court Meeting and the
General Meeting.
The irrevocable undertakings from the ECSC Directors will only
lapse and cease to be binding if:
-- the Scheme Document is not published within 28 days (or such
longer period as Daisy and ECSC may agree with the consent of the
Takeover Panel) after the date of this Announcement;
-- the Scheme lapses or is withdrawn in accordance with its
terms (for the avoidance of doubt, this shall not apply where the
Scheme lapses or is withdrawn solely as a result of Daisy
exercising its right to implement the Acquisition by way of
Takeover Offer rather than a Scheme); or
-- any event occurs or becomes known to Daisy before despatch of
the Scheme Document or the Takeover Offer document (as the case may
be) as a result of which the Takeover Panel requires or agrees that
Daisy need not make the Acquisition and no new, revised or
replacement Scheme or Takeover Offer is announced in accordance
with Rule 2.7 of the Code at the same time.
ECSC Shareholders (other than the ECSC Directors)
Name Number of ECSC Percentage of ECSC Shares
Shares in issue/%
Phil McLear 472,290 4.72
Ian Castle 237,441 2.37
Paul Lambsdown 201,033 2.01
Total 910,764 9.10
Each of the ECSC Shareholders listed above has irrevocably
undertaken to Daisy that he will exercise or, where applicable,
procure the exercise of, all votes (whether on a show of hands or a
poll and whether in person or by proxy) in relation to the ECSC
Shares held by him or members of his immediate family, related
trusts or nominee(s) (together with any ECSC Shares issued after
the date of the undertaking and attributable to, or derived from,
such shares) at the Court Meeting and the General Meeting (in each
case, including any adjournment thereof) in favour of the Scheme
and the Resolutions, respectively (or, if (with the consent of the
Takeover Panel) Daisy exercises its right to implement the
Acquisition by way of a Takeover Offer, to accept, or procure
acceptances of, such Takeover Offer in respect of all the ECSC
Shares held by him or members of his immediate family, related
trusts or nominee(s)).
The irrevocable undertakings from the ECSC Shareholders above
will only lapse and cease to be binding if:
-- the Scheme Document is not published within 28 days (or such
longer period as Daisy and ECSC may agree with the consent of the
Takeover Panel) after the date of this Announcement;
-- the Scheme lapses or is withdrawn in accordance with its
terms (for the avoidance of doubt, this shall not apply where the
Scheme lapses or is withdrawn solely as a result of Daisy
exercising its right to implement the Acquisition by way of
Takeover Offer rather than a Scheme); or
-- any event occurs or becomes known to Daisy before despatch of
the Scheme Document or the Takeover Offer document (as the case may
be) as a result of which the Takeover Panel requires or agrees that
Daisy need not make the Acquisition and no new, revised or
replacement Scheme or Takeover Offer is announced in accordance
with Rule 2.7 of the Code at the same time.
The irrevocable undertaking given by Ian Castle will, in
addition to the above events, lapse and cease to be binding if
before 3.00 p.m. on 16 May 2023, any third party announces a firm
intention (in accordance with Rule 2.7 of the Code) to make an
offer to acquire all of the equity share capital of ECSC (a) which
is recommended by the board of ECSC, (b) the making of which is not
subject to any condition precedent and (c) which in the opinion of
Allenby Capital Limited values each ECSC Share at more than 10 per
cent. higher than 54.02 pence.
APPIX IV
DEFINITIONS
1. In this Announcement, the following words and expressions
have the following meanings, unless the context requires
otherwise:
"Acquisition" the recommended cash acquisition
of the entire issued and to
be issued ordinary share capital
of ECSC to be made by Daisy
to be effected by way of the
Scheme (or, if Daisy so elects
and subject to the Takeover
Panel's consent, a Takeover
Offer) on the terms and subject
to the conditions set out in
this Announcement and to be
set out in the Scheme Document;
"AIM" AIM, a market operated by the
London Stock Exchange;
"AIM Rules" the AIM Rules for Companies,
as published by the London Stock
Exchange (as amended from time
to time);
"Allenby" Allenby Capital Limited, acting
as Rule 3 adviser, nominated
adviser and corporate broker
to ECSC;
"Announcement" this Announcement of the Acquisition
made in accordance with Rule
2.7 of the Code;
"Authorisations" authorisations, orders, recognitions,
grants, consents, clearances,
confirmations, certificates,
licences, permissions, determinations,
exemptions or approvals;
"Business Day" a day, other than a Saturday,
Sunday, public holiday or bank
holiday, on which banks are
generally open for normal business
in the City of London;
"Cash Consideration" the consideration of 54.02 pence
per ECSC Share, payable in cash
in accordance with the terms
of the Acquisition;
"Closing Price" in respect of an ECSC Share
on any particular day, the price
at which the last trade was
made, as derived from the AIM
appendix to the Daily Official
List on that day;
"CMA" the Competition and Markets
Authority, being the independent
body which conducts inquiries
into mergers, markets and the
regulation of the major regulated
industries in the United Kingdom
(or any successor body or bodies
carrying out the same functions
in the United Kingdom from time
to time);
"CMA Phase 2 Reference" a reference pursuant to sections
22 or 33, 45 or 62 of the Enterprise
Act 2002 of the Acquisition
to the chair of the CMA for
the constitution of a group
under Schedule 4 to the Enterprise
and Regulatory Reform Act 2013;
"Code" the City Code on Takeovers and
Mergers;
"Community" the European Community;
"Companies Act" the Companies Act 2006, as amended;
"Conditions" the conditions to the implementation
of the Scheme and the Acquisition,
which are set out in Appendix
I to this Announcement and will
be set out in the Scheme Document;
"Confidentiality Agreement" the confidentiality agreement
entered into on 30 November
2022 between Daisy Intermediate
Holdings Limited (a holding
company of Daisy) and ECSC;
"Court" the High Court of Justice in
England and Wales;
"Court Hearing" the hearing by the Court to
sanction the Scheme and, if
such hearing is adjourned, references
to the commencement of any such
hearing shall mean the commencement
of the final adjournment thereof;
"Court Meeting" the meeting (or any adjournment,
postponement or reconvention
thereof) of the holders of Scheme
Shares (or the relevant class
or classes thereof) to be convened
by order of the Court pursuant
to section 896 of the Companies
Act to consider and, if thought
fit, approve the Scheme (with
or without modification);
"Court Order" the order of the Court sanctioning
the Scheme under Part 26 of
the Companies Act;
"CREST" the relevant system (as defined
in the Regulations) in respect
of which Euroclear UK & Ireland
Limited is the Operator (as
defined in the Regulations);
"Daily Official List" the Daily Official List of the
London Stock Exchange;
"Daisy Corporate Services" the Corporate Services Division
or "DCS" of Daisy Group;
"Daisy" Daisy Corporate Services Trading
Limited, a private limited company
incorporated in England and
Wales with registered number
2888250 and having its registered
office at Lindred House, 20
Lindred Road, Brierfield, Nelson,
Lancashire BB9 5SR;
"Daisy Directors" the directors of Daisy and Daisy
Holdco;
"Daisy Group" Daisy Holdco and its subsidiary
and associated undertakings;
"Daisy Holdco" Daisy Holdco Limited, a private
limited company incorporated
in England and Wales with registered
number 13083567 and having its
registered office at Lindred
House, 20 Lindred Road, Brierfield,
Nelson, Lancashire BB9 5SR;
"Dealing Disclosure" has the same meaning as in Rule
8 of the Code;
"Disclosed" (a) matters fairly disclosed
in the information made available
to Daisy (or Daisy's advisers)
in the data room established
by ECSC for the purposes of
the Acquisition;
(b) information included in
the annual report and accounts
of the ECSC Group for the financial
year ended 31 December 2021;
(c) information included in
ECSC's half-year report for
the six months ended 30 June
2022;
(d) information disclosed in
a public announcement to a RIS
made by ECSC prior to the date
of this Announcement; or
(e) disclosed in this Announcement;
"Disclosure Table" the disclosure table on the
Takeover Panel's website at
www.thetakeoverpanel.org.uk;
"ECSC" ECSC Group plc, a public limited
company incorporated in England
and Wales with registered number
03964848 and having its registered
office at 28 Campus Road, Listerhills
Science Park, Bradford, West
Yorkshire, BD7 1HR;
"ECSC Articles" ECSC's articles of association
currently adopted and filed
with the Registrar of Companies;
"ECSC Directors" the directors of ECSC;
"ECSC Group" ECSC and its subsidiaries and
subsidiary undertakings;
"ECSC Share Schemes" the ECSC Group Plc EMI Share
Option Plan and the ECSC Group
Plc Non-Executive Share Option
Scheme, pursuant to which ECSC
may grant options/awards from
time to time;
"ECSC Shareholders" the holders of ECSC Shares;
"ECSC Shares" ordinary shares of 1 pence each
in the capital of ECSC;
"Effective" in the context of the Acquisition:
(a) if the Acquisition is implemented
by way of a Scheme, the Scheme
having become effective in accordance
with its terms, upon the delivery
of the Court Order to the Registrar
of Companies; or (b) if the
Acquisition is implemented by
way of a Takeover Offer, the
Takeover Offer having become,
or been declared, unconditional
in all respects in accordance
with the requirements of the
Code;
"Effective Date" the date upon which:
(a) the Scheme becomes Effective;
or
(b) if Daisy elects for, and
the Takeover Panel consents
to, the implementation of the
Acquisition by way of a Takeover
Offer, the Takeover Offer becomes
Effective;
"Excluded Shares" any ECSC Shares legally or beneficially
held by any member of the Daisy
Group;
"EY" Ernst & Young LLP, financial
adviser to Daisy;
"FCA" the UK Financial Conduct Authority
or its successor from time to
time;
"Forms of Proxy" the forms of proxy for use at
the Court Meeting and the General
Meeting, respectively, which
will accompany the Scheme Document;
"General Meeting" the general meeting (or any
adjournment, postponement or
reconvention thereof) of ECSC
Shareholders to be convened
in connection with the Scheme;
"Governmental Entity" any supranational, national,
state, municipal, local or foreign
government, any instrumentality,
subdivision, court, arbitrator
or arbitrator panel, regulatory
or administrative agency or
commission, or other authority
thereof, or any regulatory or
quasi-regulatory organisation
or private body exercising any
regulatory, taxing, importing
or other governmental or quasi-governmental
authority;
"ICT" information and communications
technology;
"Last Practicable Date" 30 March 2023, being the last
practicable date prior to the
publication of this Announcement;
"London Stock Exchange" London Stock Exchange Plc;
"Long Stop Date" 31 July 2023 or such later date
(if any) as Daisy and ECSC may,
with the consent of the Takeover
Panel, agree and (if required)
the Court may allow;
"NS&I Act" the National Security and Investment
Act 2021, together with its
secondary legislation and associated
regulatory rules;
"Offer Period" the period which commenced on
the date of this Announcement
and ending on the date on which
the Acquisition becomes Effective,
lapses or is withdrawn (or such
other date as the Takeover Panel
may decide);
"Opening Position Disclosure" has the same meaning as in Rule
8 of the Takeover Code;
"Registrar of Companies" the Registrar of Companies in
England and Wales;
"Regulations" the Uncertificated Securities
Regulations 2001 (SI 2001/3755);
"Resolutions" the resolutions to be proposed
by ECSC at the General Meeting
in connection with, amongst
other things, the approval of
the Scheme, the amendment of
the ECSC Articles and such other
matters as may be necessary
to implement the Scheme and
the proposed cancellation of
the admission to trading on
AIM of the ECSC Shares upon
the Scheme becoming Effective;
"Restricted Jurisdiction" any jurisdiction where local
laws or regulations may result
in a significant risk of civil,
regulatory or criminal exposure
if information concerning the
Acquisition is sent or made
available in that jurisdiction;
"RIS" a service approved by the London
Stock Exchange for the distribution
to the public of announcements
and included within the list
maintained on the London Stock
Exchange's website;
"Scheme" the proposed scheme of arrangement
under Part 26 of the Companies
Act to effect the Acquisition
between ECSC and the Scheme
Shareholders (the full terms
of which will be set out in
the Scheme Document), with or
subject to any modification,
addition or condition which
Daisy and ECSC may agree, and,
if required, the Court may approve
or impose;
"Scheme Document" the document to be despatched
to (among others) ECSC Shareholders
containing, amongst other things,
the terms and conditions of
the Scheme, the notices convening
the Court Meeting and the General
Meeting and the particulars
required by section 897 of the
Companies Act;
"Scheme Record Time" the time and date to be specified
in the Scheme Document, expected
to be 6:00 p.m. on the Business
Day immediately prior to the
Effective Date;
"Scheme Shareholders" holders of Scheme Shares;
"Scheme Shares" the ECSC Shares:
(a) in issue at the date of
the Scheme Document;
(b) (if any) issued after the
date of the Scheme Document
and prior to the Voting Record
Time; and
(c) (if any) issued at or after
the Voting Record Time but at
or before the Scheme Record
Time in respect of which the
original or any subsequent holder
thereof is bound by the Scheme
or shall by such time have agreed
in writing to be bound by the
Scheme,
in each case other than any
Excluded Shares;
"Secretary of State" the Secretary of State for Business
and Trade;
"Substantial Interest" in relation to an undertaking,
a direct or indirect interest
of 10 per cent. or more of the
total voting rights conferred
by the equity share capital
(as defined in section 548 of
the Companies Act) of such undertaking;
"Takeover Offer" should the Acquisition be implemented
by way of a takeover offer as
defined in Chapter 3 of Part
28 of the Companies Act, the
offer to be made by or on behalf
of Daisy to acquire the entire
issued and to be issued ordinary
share capital of ECSC and, where
the context requires, any subsequent
revision, variation, extension
or renewal of such offer;
"Takeover Panel" the UK Panel on Takeovers and
Mergers;
"Third Party" each of a central bank, government
or governmental, quasi-governmental,
supranational, statutory, regulatory,
professional or investigative
body or authority (including
any antitrust or merger control
authority), court, trade agency,
professional association, institution,
works council, employee representative
body or any other similar body
or person whatsoever in any
jurisdiction;
"Treasury Shares" any ECSC Shares which are for
the time being held by ECSC
as treasury shares (within the
meaning of the Companies Act);
"United Kingdom" or "UK" the United Kingdom of Great
Britain and Northern Ireland;
"United States" or "US" the United States of America,
its territories and possessions,
all areas subject to its jurisdiction
or any subdivision thereof,
any state of the United States
of America and the District
of Columbia;
"US Exchange Act" the United States Securities
Exchange Act of 1934 and the
rules and regulations promulgated
thereunder;
"Voting Record Time" the date and time specified
in the Scheme Document by reference
to which entitlements to vote
on the Scheme will be determined,
expected to be 6.00 pm on the
day which is two days before
the date of the Court Meeting
or, if the Court Meeting is
adjourned, 6.00 pm on the second
day before the date of such
adjourned meeting;
"Wider ECSC Group" ECSC, its subsidiary undertakings,
associated undertakings and
any other undertaking, body
corporate, partnership, joint
venture or person in which ECSC
and/or such undertakings (aggregating
their interests) have a direct
or indirect Substantial Interest
or the equivalent; and
"GBP" or "pence" pounds sterling or pence, the
lawful currency of the UK.
2. In this Announcement:
(a) all times referred to are to London time unless otherwise stated;
(b) references to the singular include the plural and vice
versa, unless the context otherwise requires;
(c) "subsidiary" , "subsidiary undertaking" and "undertaking"
have the meanings given by the Companies Act and "associated
undertaking" has the meaning given to it by paragraph 19 of
Schedule 6 of the Large and Medium-sized Companies and Groups
(Accounts and Reports) Regulations 2008, other than paragraph 1(b)
thereof which shall be excluded for this purpose; and
(d) all references to statutory provision or law or to any order
or regulation shall be construed as a reference to that provision,
law, order or regulation as extended, modified, replaced or
re-enacted from time to time and statutory instruments, regulations
and orders from time to time made thereunder or deriving validity
therefrom.
This information is provided by RNS, the news service of the
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END
OFFWPUWCWUPWGUG
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