TIDMFAN TIDMETQ
RNS Number : 2707F
Volution Group plc
11 November 2015
Not for release, publication or distribution, in whole or in
part, in or into any jurisdiction where to do so would constitute a
violation of the relevant laws of such jurisdiction.
FOR IMMEDIATE RELEASE
11 November 2015
RECOMMENDED CASH ACQUISITION
of
ENERGY TECHNIQUE PLC
by
VOLUTION GROUP PLC
to be effected by
a Scheme of Arrangement under Part 26 of the Companies Act
2006
Summary
The boards of directors of Volution Group plc ("Volution") and
Energy Technique plc ("ETQ") are pleased to announce that they have
reached agreement on the terms and conditions of a recommended cash
acquisition by which the entire issued and to be issued share
capital of ETQ will be acquired by Volution.
Under the terms of the Acquisition, each Scheme Shareholder will
receive 345 pence in cash for each Scheme Share.
The price of 345 pence per Scheme Share represents a premium of
approximately:
-- 18.9 per cent. to the volume-weighted average ETQ share price
of 290 pence for the twelve-month period ended 25 February 2015
(being the last business day prior to the commencement of the Offer
Period); and
-- 10.4 per cent. to the closing ETQ share price of 312.5 pence
on 25 February 2015 (being the last business day prior to the
commencement of the Offer Period).
The Acquisition values ETQ's existing issued and to be issued
ordinary share capital (assuming full exercise of options granted
under the ETQ Share Scheme) at approximately GBP9.25 million on a
fully diluted basis.
It is intended that the Acquisition will be implemented by means
of a Court-sanctioned scheme of arrangement under Part 26 of the
Companies Act.
The ETQ Directors, who have been so advised by Cavendish as to
the financial terms of the Acquisition, consider the terms of the
Acquisition to be fair and reasonable. In providing its advice,
Cavendish has taken into account the commercial assessments of the
ETQ Directors.
Accordingly, the ETQ Directors have unanimously approved the
Acquisition and intend to recommend that ETQ Shareholders vote in
favour of the Scheme at the Court Meeting and the resolutions to be
proposed at the General Meeting as they have irrevocably undertaken
to do in respect of their own beneficial holdings of, in aggregate,
408,340 issued ETQ Shares representing approximately 17.08 per
cent. of the existing issued ordinary share capital of ETQ on 10
November 2015 (being the last business day prior to the date of
this announcement).
In addition to the irrevocable undertakings from the ETQ
Directors, Volution has also received irrevocable undertakings from
each of Peter Gyllenhammar, James Lugg, John Cawthorne and Danny
Francis to vote in favour of the Scheme at the Court Meeting and
the resolution to be proposed at the General Meeting in respect of
their own beneficial holdings of, in aggregate, 1,173,227 ETQ
Shares, representing approximately 49.08 per cent. of the existing
issued ordinary share capital of ETQ on 10 November 2015 (being the
last business day prior to the date of this announcement) and
irrevocable undertakings from the ETQ Directors and Gordon Winter
to vote in favour of the Scheme at the Court Meeting and the
resolution to be proposed at the General Meeting in respect of
their own beneficial holdings of, in aggregate, 199,831 ETQ Shares
which are the subject of the ETQ Share Scheme, to the extent that
these options are exercised.
The irrevocable undertakings from the ETQ Directors, Peter
Gyllenhammar, James Lugg, John Cawthorne, Danny Francis and Gordon
Winter will cease to be binding only if the Scheme or Offer lapses
or is withdrawn and no new, revised or replacement Scheme or Offer
is announced in accordance with Rule 2.7 of the Code, in its place
or is announced, in accordance with Rule 2.7 of the Code, at the
same time. The undertakings will remain binding in the event that a
higher competing offer for ETQ is made.
Further details of these irrevocable undertakings are set out in
Appendix 3 to this announcement.
Volution has therefore received irrevocable undertakings to vote
in favour of the Scheme at the Court Meeting and the resolutions to
be proposed at the General Meeting in respect of, in aggregate,
1,581,567 ETQ Shares representing, in aggregate, approximately
66.16 per cent. of the existing issued ordinary share capital of
ETQ on 10 November 2015 (being the last business day prior to the
date of this announcement) and 199,831 ETQ Shares which are the
subject of the ETQ Share Scheme.
It is expected that the Scheme Document, containing further
information about the Acquisition and notices of the Court Meeting
and General Meeting, together with the Forms of Proxy, will be
posted to ETQ Shareholders and (for information only) participants
in the Share Scheme as soon as practicable and, in any event,
within 28 days of this announcement (unless the Panel agrees
otherwise). It is anticipated that the Acquisition will complete by
the end of 2015.
Commenting on this announcement, Ronnie George, CEO of Volution
Group plc, said:
"We are delighted to have received the ETQ board's unanimous
recommendation of our offer. This proposed acquisition is
consistent with our stated strategy of making disciplined and value
enhancing acquisitions. We believe that ETQ has a strong presence
as a supplier to the UK New Build Commercial market which is highly
complementary to our strong position in the UK New Build
Residential sector. We are excited by the growth prospects for ETQ
and increasing our scale in the Commercial HVAC sector. We believe
the acquisition will deliver value for our shareholders and
consolidate our position in the UK HVAC market."
Leigh Stimpson, CEO of Energy Technique plc, added:
"Since we began our discussions with the Volution group, it has
been evident that there is a compelling fit between the businesses
in terms of culture, technology and market opportunity. The ETQ
Board is confident that this transaction is great news for our
employees and customers alike."
This summary should be read in conjunction with, and is subject
to, the full text of the following announcement (including its
Appendices). The Acquisition will be subject to the Conditions and
certain further terms set out in Appendix 1 and to the full terms
and conditions to be set out in the Scheme Document. Appendix 2
contains the sources and bases of certain information contained in
this summary and the following announcement. Appendix 3 contains
details of the irrevocable undertakings received by Volution.
Appendix 4 contains the definitions of certain terms used in this
summary and the following announcement.
Enquiries
Volution Group plc
Ronnie George +44 (0) 1293 441501
Ian Dew +44 (0) 1293 441536
Liberum Capital Limited (Financial Adviser and Broker to
Volution Group plc)
Neil Patel/Richard Bootle +44 (0) 20 3100 2222
Brunswick (Financial Public Relations Adviser to Volution Group
plc)
Craig Breheny/Simone +44 (0) 20 7404 5959
Selzer/ volution@brunswickgroup.com
Chris Buscombe
Energy Technique plc
Leigh Stimpson +44 (0) 20 8783 0033
Rob Unsworth +44 (0) 20 8783 0033
Cavendish Corporate Finance LLP (Financial Adviser to Energy
Technique plc)
Andrew Jeffs/Philip
Barker +44 (0) 20 7908 6000
finnCap Ltd (Nominated Adviser and Broker to Energy Technique
plc)
Ed Frisby/Scott Mathieson +44 (0) 20 7220 0500
Further information
This announcement is not intended to and does not constitute, or
form part of, an offer, invitation or the solicitation of an offer
to purchase, otherwise acquire, subscribe for, sell or otherwise
dispose of any securities, or the solicitation of any vote or
approval in any jurisdiction, pursuant to the Acquisition or
otherwise, nor shall there be any sale, issuance or transfer of
securities of ETQ in any jurisdiction in contravention of
applicable law. The Acquisition will be made solely by means of the
Scheme Document, which will contain the full terms and conditions
of the Acquisition including details of how to vote in respect of
the Scheme. Any vote in respect of the Scheme or other response in
relation to the Acquisition should be made only on the basis of the
information contained in the Scheme Document.
Liberum Capital Limited, which is authorised and regulated in
the United Kingdom by the FCA, is acting exclusively for Volution
and no--one else in connection with the Acquisition and will not be
responsible to anyone other than Volution for providing the
protections afforded to clients of Liberum nor for providing advice
in relation to the Acquisition or any other matters referred to in
this announcement.
Cavendish Corporate Finance LLP, which is authorised and
regulated in the United Kingdom by the FCA, is acting exclusively
for ETQ and no-one else in connection with the Acquisition and will
not be responsible to anyone other than ETQ for providing the
protections afforded to clients of Cavendish nor for providing
advice in relation to the Acquisition or any other matters referred
to in this announcement.
finnCap Ltd, which is authorised and regulated in the United
Kingdom by the FCA, is acting for ETQ in relation to the matters
described in this announcement and is not advising any other
person, and accordingly will not be responsible to anyone other
than ETQ for providing the protections afforded to clients of
finnCap Ltd or for providing advice in relation to the matters
described in this announcement.
Overseas jurisdictions
The availability of the Acquisition to ETQ Shareholders who are
not resident in and citizens of the UK may be affected by the laws
of the relevant jurisdictions in which they are located or of which
they are citizens. Persons who are not resident in the UK should
inform themselves of, and observe, any applicable legal or
regulatory requirements of their jurisdictions. Further details in
relation to overseas shareholders will be contained in the Scheme
Document.
(MORE TO FOLLOW) Dow Jones Newswires
November 11, 2015 02:09 ET (07:09 GMT)
The release, publication or distribution of this announcement in
or into jurisdictions other than the UK may be restricted by law
and therefore any persons who are subject to the law of any
jurisdiction other than the UK should inform themselves about, and
observe, any applicable requirements. Any failure to comply with
the applicable restrictions may constitute a violation of the
securities laws of any such jurisdiction. To the fullest extent
permitted by applicable law, the companies and persons involved in
the Acquisition disclaim any responsibility or liability for the
violation of such restrictions by any person. This announcement has
been prepared for the purposes of complying with English law, the
AIM Rules, the rules of the London Stock Exchange and the Code and
the information disclosed may not be the same as that which would
have been disclosed if this announcement had been prepared in
accordance with the laws of jurisdictions outside of England.
Copies of this announcement and the formal documentation
relating to the Scheme and the Acquisition will not be and must not
be, mailed or otherwise forwarded, distributed or sent in, into or
from any jurisdiction where to do so would violate the laws of that
jurisdiction.
US Holders should note that the Acquisition relates to the
securities of a UK company, is subject to UK disclosure
requirements (which are different from those of the US) and is
proposed to be implemented under a scheme of arrangement provided
for under English company law. A transaction effected by means of a
scheme of arrangement is not subject to the tender offer rules
under the US Exchange Act. Accordingly, the Scheme will be subject
to UK disclosure requirements and practices, which are different
from the disclosure requirements of the US tender offer and proxy
solicitation rules. The financial information included in this
announcement and the Scheme documentation has been or will have
been prepared in accordance with IFRS and thus may not be
comparable to financial information of US companies or companies
whose financial statements are prepared in accordance with
generally accepted accounting principles in the US. If Volution
exercises its right to implement the acquisition of the ETQ Shares
by way of a takeover offer, such offer will be made in compliance
with applicable US tender offer and securities laws and
regulations.
The receipt of cash pursuant to the Acquisition by a US Holder
as consideration for the transfer of its Scheme Shares pursuant to
the Scheme may be a taxable transaction for US federal income tax
purposes and under applicable US state and local, as well as
foreign and other, tax laws. Each ETQ Shareholder is urged to
consult his independent professional adviser immediately regarding
the tax consequences of the Acquisition applicable to him.
It may be difficult for US Holders to enforce their rights and
claims arising out of the US federal securities laws, since
Volution and ETQ are located in countries other than the US, and
some or all of their officers and directors may be residents of
countries other than the US. US Holders may not be able to sue a
non-US company or its officers or directors in a non-US court for
violations of US securities laws. Further, it may be difficult to
compel a non-US company and its affiliates to subject themselves to
a US court's judgement.
In accordance with normal UK practice and pursuant to Rule
14e-5(b) of the US Exchange Act, Volution or its nominees, or its
brokers (acting as agents), may from time to time make certain
purchases of, or arrangements to purchase, ETQ Shares outside of
the United States, other than pursuant to the Acquisition, until
the date on which the Acquisition and/or Scheme becomes effective,
lapses or is otherwise withdrawn. These purchases may occur either
in the open market at prevailing prices or in private transactions
at negotiated prices. Any information about such purchases will be
disclosed as required in the UK, will be reported to a Regulatory
Information Service of the London Stock Exchange and will be
available on the London Stock Exchange website,
www.londonstockexchange.com.
Forward looking statements
This announcement (including information incorporated by
reference in this announcement), oral statements made regarding the
Acquisition, and other information published by Volution and ETQ
may contain statements which are, or may be deemed to be,
"forward-looking statements". Forward-looking statements are
prospective in nature and are not based on historical facts, but
rather on current expectations and projections of the management of
Volution and ETQ about future events, and are therefore subject to
risks and uncertainties which could cause actual results to differ
materially from the future results expressed or implied by the
forward-looking statements.
The forward-looking statements contained in this announcement
include statements relating to the expected effects of the
Acquisition on Volution and ETQ, the expected timing and scope of
the Acquisition and other statements other than historical facts.
Often, but not always, forward-looking statements can be identified
by the use of forward-looking words such as "plans", "expects" or
"does not expect", "is expected", "is subject to", "budget",
"scheduled", "estimates", "forecasts", "intends", "anticipates" or
"does not anticipate", or "believes", or variations of such words
and phrases or statements that certain actions, events or results
"may", "could", "should", "would", "might" or "will" be taken,
occur or be achieved. Although Volution and ETQ believe that the
expectations reflected in such forward-looking statements are
reasonable, Volution and ETQ can give no assurance that such
expectations will prove to be correct. By their nature,
forward-looking statements involve risk and uncertainty because
they relate to events and depend on circumstances that will occur
in the future. There are a number of factors that could cause
actual results and developments to differ materially from those
expressed or implied by such forward-looking statements.
These factors include, but are not limited to: the ability to
consummate the Acquisition; the ability to obtain requisite
regulatory and shareholder approvals and the satisfaction of other
Conditions; the ability of Volution and ETQ to successfully
integrate their respective operations and retain key employees; the
potential impact of the announcement or consummation of the
Acquisition on relationships, including with employees, suppliers,
customers and competitors; changes in general economic, business
and political conditions, including changes in the financial
markets; significant competition that Volution and ETQ face;
compliance with extensive government regulation; the combined
company's ability to make acquisitions and its ability to integrate
or manage such acquired businesses. Other unknown or unpredictable
factors could cause actual results to differ materially from those
in the forward-looking statements. Such forward-looking statements
should therefore be construed in the light of such factors. Neither
Volution nor ETQ, nor any of their respective associates or
directors, officers or advisers, provides any representation,
assurance or guarantee that the occurrence of the events expressed
or implied in any forward-looking statements in this announcement
will actually occur. You are cautioned not to place undue reliance
on these forward-looking statements. Other than in accordance with
their legal or regulatory obligations (including under the AIM
Rules and the Disclosure and Transparency Rules of the FCA, as
applicable), neither Volution nor ETQ is under any obligation, and
Volution and ETQ expressly disclaim any intention or obligation, to
update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise.
Dealing disclosure requirements
Under Rule 8.3(a) of the Code, any person who is interested in
one 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 (London time) on the 10(th) business day
following the commencement of the offer period and, if appropriate,
by no later than 3.30 pm (London time) on the 10(th) 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 one per cent. or more of any class of relevant
securities of the offeree company or of any securities exchange
offeror must make a Dealing Disclosure if the person deals in any
relevant securities of the offeree company or of any securities
exchange offeror. A Dealing Disclosure must contain details of the
dealing concerned and of the person's interests and short positions
in, and rights to subscribe for, any relevant securities of each of
(i) the offeree company and (ii) any securities exchange
offeror(s), save to the extent that these details have previously
been disclosed under Rule 8. A Dealing Disclosure by a person to
whom Rule 8.3(b) applies must be made by no later than 3.30 pm
(London time) on the business day following the date of the
relevant dealing.
(MORE TO FOLLOW) Dow Jones Newswires
November 11, 2015 02:09 ET (07:09 GMT)
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of an offeree company or a
securities exchange offeror, they will be deemed to be a single
person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree
company and by any offeror and Dealing Disclosures must also be
made by the offeree company, by any offeror and by any persons
acting in concert with any of them (see Rules 8.1, 8.2 and
8.4).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the 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 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.
Publication on website
A copy of this announcement will be made available, subject to
certain restrictions relating to persons resident in Restricted
Jurisdictions, on Volution's website at www.volutiongroupplc.com
and ETQ's website at www.diffusion-group.com by no later than 12.00
noon (London time) on the business day following this announcement.
For the avoidance of doubt, the contents of these websites are not
incorporated by reference and do not form part of this
announcement.
Requesting hard copy documents
You may request a hard copy of this announcement by contacting
the Company Secretary of ETQ during business hours on +44 (0) 20
8783 0033 or by submitting a request in writing to the Company
Secretary of ETQ at the registered office of ETQ, at 47 Central
Avenue, West Molesey, Surrey, KT8 2QZ. 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. You may also request that all future
documents, announcements and information to be sent to you in
relation to the Acquisition should be in hard copy form.
Electronic Communications
Please be aware that addresses, electronic addresses and certain
other information provided by ETQ Shareholders, persons with
information rights and other relevant persons for the receipt of
communications from ETQ may be provided to Volution during the
offer period as required under Section 4 of Appendix 4 of the Code
in order to comply with Rule 2.12(c).
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 figures that precede them.
Not for release, publication or distribution, in whole or in
part, in or into any jurisdiction where to do so would constitute a
violation of the relevant laws of such jurisdiction.
11 November 2015
RECOMMENDED CASH ACQUISITION
of
ENERGY TECHNIQUE PLC
by
VOLUTION GROUP PLC
to be effected by
a Scheme of Arrangement under Part 26 of the Companies Act
2006
1. Introduction
The boards of directors of Volution Group plc ("Volution") and
Energy Technique plc ("ETQ") are pleased to announce that they have
reached agreement on the terms and conditions of a recommended cash
acquisition by which the entire issued and to be issued share
capital of ETQ will be acquired by Volution. It is intended that
the Acquisition will be implemented by means of a Court-sanctioned
scheme of arrangement under Part 26 of the Companies Act.
2. The Acquisition
Under the terms of the Acquisition, which will be subject to the
Conditions and further terms set out in Appendix 1 to this
announcement and to be set out in the Scheme Document, the Scheme
Shareholders at the Scheme Record Time will be entitled to
receive:
for each Scheme Share 345 pence in cash
The price of 345 pence in cash for each Scheme Share represents
a premium of approximately:
-- 18.9 per cent. to the volume-weighted average ETQ share price
of 290 pence for the twelve-month period ended 25 February 2015
(being the last business day prior to the commencement of the Offer
Period); and
-- 10.4 per cent. to the closing ETQ share price of 312.5 pence
on 25 February 2015 (being the last business day prior to the
commencement of the Offer Period).
The Acquisition values ETQ's entire issued and to be issued
ordinary share capital (assuming full exercise of options granted
under the ETQ Share Scheme) at approximately GBP9.25 million on a
fully diluted basis.
3. Background to and reasons for the Acquisition
Volution was admitted to the London Stock Exchange on 23 June
2014. One of Volution's strategies is to acquire and integrate
businesses with well-established brands in the HVAC and ventilation
market, operating in markets underpinned by favourable structural
and regulatory dynamics and with an emphasis on heat recovery
systems.
ETQ's trading subsidiary, Diffusion, is a designer, manufacturer
and distributor of fan coils and commercial heating products to the
commercial and residential sectors. Fan coil units, which are
manufactured by Diffusion, are a device consisting of a heating or
cooling coil and fan. It is part of a heating, ventilation and air
conditioning ("HVAC") system that is found in residential and
commercial buildings and is used to control the temperature in the
space where it is installed.
For the 12 month period ended 31 March 2015, fan coil sales
accounted for 81 per cent. of ETQ's revenue and the balance was in
commercial heating. An average of approximately 30 per cent. of
ETQ's fan coil sales over the past two years were in the
residential sector in projects such as the Riverlight project in
Nine Elms, the Shard (both residential & commercial), Holland
Green and 1 Tower Bridge. With the Acquisition, Volution will
acquire an established designer, manufacturer and distributor of
fan coils and commercial heating products to the UK HVAC
sector.
The Volution Directors believe that the Acquisition is also
compelling for the following reasons:
Structural growth from regulatory drivers - New residential
buildings are increasingly subject to a suite of legislative
measures such as the European Energy Performance of Buildings
Directive ("EPBD"), which mandates all new buildings to be "nearly
zero-energy" by 2020 across Europe and is aimed at reducing carbon
emissions, and improving energy efficiency in buildings. This can
be done by a combination of increasing air-tightness, improving
insulation and the use of energy efficient ventilation solutions.
As buildings are becoming better insulated to comply with these
regulatory measures, the risk of overheating is increasing. For
many residential developments, it is becoming increasingly popular
to include comfort cooling to ensure that home owners have the best
possible environment to live in. Accordingly, much like the demand
for Volution Group's energy efficient mechanical extract
ventilation ("MEV") systems and mechanical ventilation with heat
recovery ("MVHR") products, there are significant structural growth
opportunities for manufacturers of high quality manufactured fan
coils, particularly those with a focus on residential
applications.
Complementary technology - Volution is a leader in the UK in the
manufacture and design of MVHR products, particularly in
residential new build dwellings. Both ventilation and cooling
strategies are designed together, by building services consultants,
as there is a relationship between them within the services
package. MVHR helps to pre-warm incoming air from the outgoing
stale air in the winter and provide cooler external air (through
the summer bypass) in the summer. The fan coil further heats or
cools the incoming air to the desired temperature. Accordingly,
ETQ's technology will be complementary to that offered by the
Volution Group.
Enhanced sales channels & customer relationships - The
Volution Directors estimate that ETQ has approximately a 25 per
cent. market share of the fan coil market in the UK. ETQ has an
end-user base which includes Land Securities, Stanhope Properties,
Grosvenor Estates, British Land, Marks & Spencer, Boots, Tesco
and Sainsbury's. Volution believes lead sharing and coordinated
sales efforts will be possible after the Acquisition. The Volution
Directors believe that, with ETQ's reputation as a leader in the
markets in which it operates, the Acquisition will provide
opportunities to secure additional contracts for fan coil and MVHR
products in new build residential and commercial buildings. In
addition, end-users of the Volution Group will benefit from having
access to an enhanced product portfolio and customer service.
Enhanced capacity - ETQ's manufacturing facility in Molesey is
currently operating at close to maximum capacity and the Volution
Directors believe that there should be opportunities to enhance
manufacturing capacity when the ETQ business is combined with the
enlarged Volution Group.
Financial metrics - The Volution Directors expect the
Acquisition to be earnings enhancing in the first full financial
year.
4. Recommendation
The ETQ Directors, who have been so advised by Cavendish as to
the financial terms of the Acquisition, consider the terms of the
Acquisition to be fair and reasonable. In providing its advice,
Cavendish has taken into account the commercial assessments of the
ETQ Directors.
(MORE TO FOLLOW) Dow Jones Newswires
November 11, 2015 02:09 ET (07:09 GMT)
Accordingly, the ETQ Directors have unanimously approved the
Acquisition and intend to recommend that ETQ Shareholders vote in
favour of the Scheme at the Court Meeting and the resolutions to be
proposed at the General Meeting as they have irrevocably undertaken
to do in respect of their own beneficial holdings of, in aggregate,
408,340 issued ETQ Shares representing approximately 17.08 per
cent. of ETQ's issued ordinary share capital as at 10 November 2015
(being the last business day prior to the date of this
announcement).
5. Background to and reasons for the recommendation
As announced by ETQ on 26 February 2015, the ETQ Board decided
that it would be in the best interests of ETQ Shareholders to offer
ETQ for sale by means of a formal sale process. Cavendish was
appointed to conduct the formal sale process and a number of
potentially interested parties were contacted.
The ETQ Directors believe there is a strong commercial and
cultural fit between ETQ and Volution, in terms of their
strategies, products and service offerings. The ETQ Directors
believe that combining the two businesses will create a larger and
stronger group within the HVAC sector.
The offer price represents a 10.4 per cent. premium to the ETQ
closing price on the last trading day prior to the start of the
Offer Period and a 18.9 per cent premium to the volume-weighted
average ETQ share price for the twelve-month period ended 25
February 2015 being the last business day prior to the commencement
of the Offer Period. The ETQ Directors believe the Offer represents
significant value for all ETQ Shareholders and, given the limited
liquidity in ETQ Shares, provides an opportunity for ETQ
Shareholders to fully monetise their shareholdings at an attractive
price.
6. Irrevocable Undertakings
As stated above, all of the ETQ Directors who hold ETQ Shares
have irrevocably undertaken to vote in favour of the Scheme at the
Court Meeting and the resolutions to be proposed at the General
Meeting in respect of their entire beneficial holdings of, in
aggregate, 408,340 issued ETQ Shares representing approximately
17.08 per cent. of the existing issued ordinary share capital of
ETQ on 10 November 2015 (being the last business day prior to the
date of this announcement).
In addition, Volution has received irrevocable undertakings from
each of Peter Gyllenhammar, James Lugg, John Cawthorne and Danny
Francis to vote in favour of the Scheme at the Court Meeting and
the resolutions to be proposed at the General Meeting in respect of
their entire beneficial holdings of, in aggregate, 1,173,227 ETQ
Shares, representing approximately 49.08 per cent. of the existing
issued ordinary share capital of ETQ on 10 November 2015 (being the
last business day prior to the date of this announcement) and
irrevocable undertakings from the ETQ Directors and Gordon Winter
to vote in favour of the Scheme at the Court Meeting and the
resolution to be proposed at the General Meeting in respect of
their own beneficial holdings of, in aggregate, 199,831 ETQ Shares
which are the subject of the ETQ Share Scheme, to the extent that
these options are exercised.
The undertakings from the ETQ Directors and Peter Gyllenhammar,
James Lugg, John Cawthorne, Danny Francis and Gordon Winter will
cease to be binding only if the Scheme or Offer lapses or is
withdrawn and no new, revised or replacement Scheme or Offer is
announced in accordance with Rule 2.7 of the Code, in its place or
is announced, in accordance with Rule 2.7 of the Code, at the same
time. The undertakings will remain binding in the event that a
higher competing offer for ETQ is made.
In total, therefore, Volution has received irrevocable
undertakings to vote in favour of the Scheme at the Court Meeting
and the resolutions to be proposed at the General Meeting in
respect of 1,581,567 ETQ Shares which represent approximately 66.16
per cent. of the existing issued ordinary share capital of ETQ on
10 November 2015 (being the last business day prior to the date of
this announcement) and 199,831 ETQ Shares which are the subject of
the ETQ Share Scheme.
Further details of these irrevocable undertakings are set out in
Appendix 3 to this announcement. If the Acquisition is subsequently
structured as a takeover offer, all the above undertakings will
take effect as irrevocable undertakings to accept such offer.
7. Information relating to Volution
Volution operates through two divisions: the Ventilation Group,
which principally supplies ventilation products for residential
construction applications in the UK, Sweden, Norway and Germany and
ventilation products for commercial construction applications in
the UK. The Ventilation Group also supplies other products such as
hand-driers and electric heaters. The other division, Torin-Sifan,
supplies motors, fans and blowers to OEMs of heating and
ventilation products for both residential and commercial
construction applications in Europe.
The Volution Directors believe that Volution is a market leader
in the UK residential ventilation products market, one of the
leading suppliers in the UK commercial ventilation products market
(excluding air handling units), a market leader in the Swedish
residential ventilation products market and a market leader in the
German decentralised heat recovery residential ventilation systems
market. With the addition of the Ventilair Group, the Volution
Directors believe that Volution is also a leading operator in the
Belgian residential heat recovery market with a growing position in
the ventilation solutions for the commercial market.
Volution was admitted to trading on the Premium Segment of the
Main Market of the London Stock Exchange on 23 June 2014 with a
stated strategy to gain market share through a combination of
organic growth and selective acquisitions. Since its IPO, Volution
has completed two acquisitions, the first, Brüggemann
Energiekonzepte GmbH, a supplier of decentralised heat recovery
ventilation in North Germany, and the second, Ventilair Group
International BVBA, a leading manufacturer and distributor of
residential ventilation products in the Belgian market with
additional sales offices in the Netherlands and France. Both of
these acquisitions are in addition to the acquisition of Fresh in
2012, PAX in 2013 and inVENTer in 2014 and have extended Volution's
strong track record of integrating businesses into the Group. The
Volution Directors believe that ETQ, with its complementary
technology, product portfolio and experienced management team,
would be an excellent fit with the Volution Group.
Current trading, trends and prospects
On 16 October 2015, Volution released its preliminary results
for the 12 month period ended 31 July 2015 reporting revenue of
GBP130.2 million, adjusted EBITDA of GBP32.1 million, adjusted
profit before tax of GBP27.5 million and adjusted EPS of 11.0 pence
(a 25 per cent. increase on the prior period). As at 31 July 2015,
Volution has net debt of GBP21.2 million, leaving scope for further
acquisitions.
In its preliminary results, Volution reinforced its publicly
stated ambition to make further earnings enhancing
acquisitions.
8. Information relating to ETQ
ETQ's trading subsidiary, ET Environmental Limited trading as
"Diffusion", is a manufacturer of fan coils and commercial heating
products to the UK commercial and residential sectors with a
well-known end-user base, well-known brand and over 50 years of
trading experience. The Diffusion brand is recognised by the UK
heating ventilation and air conditioning sector ("HVAC") as highly
engineered, quality products providing strong performance and
energy efficiency. For the year ended 31 March 2015, ETQ generated
sales of GBP10.775 million.
Diffusion's products are supplied into commercial offices,
hotels, airports, retail outlets, schools, and residential
developments. Business risk is reduced by third-party M&E
contractors installing Diffusion's products. Fan coils are supplied
to developments of the major UK property owning companies.
Commercial heating end users include retail units, banks and
hotels.
Diffusion operates from a 30,000 sq. ft. facility in West
Molesey, Surrey, conveniently placed to serve its principal London
and South East market.
9. Financing
The cash consideration payable by Volution under the terms of
the Acquisition will be funded from existing cash resources and
drawdowns that have been made from existing borrowing facilities of
Volution.
Liberum, the financial adviser to Volution, is satisfied that
resources are available to Volution to satisfy in full the cash
consideration payable under the terms of the Acquisition.
10. Management and employees
Volution attaches great importance to the skills and experience
of the existing management and employees of ETQ and expects that
they will continue to contribute to the success of ETQ following
completion of the Acquisition. Volution also recognises the
strength of the ETQ brand and intends to retain it.
It is currently envisaged that, following completion of the
Acquisition, ETQ will be incorporated into the UK Ventilation Group
and all existing executive management of ETQ will be retained. The
existing executive management will directly report to the managing
director of the UK Ventilation Group. However, when ETQ ceases to
be an AIM traded company following completion of the Acquisition,
it is expected that the ETQ Non-Executive Director and the Company
Secretary will cease their respective roles as these roles will no
longer be required.
Volution confirms that it intends to safeguard fully the
existing employment rights of all ETQ management and employees in
accordance with applicable law and to comply with Volution's
pension obligations for existing employees and members of ETQ 's
pension schemes.
(MORE TO FOLLOW) Dow Jones Newswires
November 11, 2015 02:09 ET (07:09 GMT)
ETQ's manufacturing facility in Molesey is currently operating
at close to maximum capacity and the Volution Directors believe
that there is scope for increasing output. Volution intends to
review the operations of the ETQ business following completion of
the Acquisition and explore certain ways of enhancing manufacturing
capacity. While no decisions have yet been made, this could involve
the redeployment of some of ETQ's fixed assets to another of the
Volution Group's factories if that is considered the most efficient
manner to expand ETQ's manufacturing capacity. If such redeployment
did occur, it could result in a small number of employees at ETQ's
Molesey site connected with the operation of such assets being
affected in the event they were unable to move to the Volution
Group's operating site or be redeployed within the enlarged
Volution Group.
11. ETQ Share Scheme
There are currently 333,050 options outstanding under the ETQ
Share Scheme.
It is envisaged that the holders of options under the ETQ Share
Scheme will become entitled to exercise their options and will be
able to participate in the Acquisition in the event that they
choose to exercise their options.
Participants in the ETQ Share Scheme will be contacted regarding
the effect of the Acquisition on their rights (if any) and
appropriate proposals will be made to such participants in due
course. Details of these proposals will be set out in the Scheme
Document and in separate letters to be sent to participants in the
ETQ Share Scheme.
12. Offer-related Arrangements
On 14 July 2015, Volution and Cavendish (on behalf of ETQ)
entered into a confidentiality agreement in relation to the
Acquisition, pursuant to which, amongst other things, Volution
undertook, subject to certain exceptions (including the provisions
of the Code), to keep information relating to ETQ confidential and
not to disclose it to third parties. The confidentiality agreement
further includes customary non-solicitation provisions.
13. Structure of the Acquisition
It is intended that the Acquisition will be implemented by way
of a Court-sanctioned scheme of arrangement between ETQ and the
Scheme Shareholders, under Part 26 of the Companies Act. The
procedure involves, among other things, an application by ETQ to
the Court to sanction the Scheme, in consideration for which the
Scheme Shareholders will receive cash on the basis described in
paragraph 2 above. The purpose of the Scheme is for Volution to
become the owner of the entire issued and to be issued share
capital of ETQ.
The Scheme is subject to the Conditions and certain further
terms referred to in Appendix 1 to this announcement and to be set
out in the Scheme Document, and will only become effective if,
among other things, the following events occur on or before 29
February 2016 or such later date as Volution and ETQ may, with the
consent of the Panel, agree and, if required, the Court may
approve:
-- resolutions to approve the Scheme are passed by a majority in
number of the Scheme Shareholders present and voting (and entitled
to vote) at the Court Meeting, either in person or by proxy,
representing three-quarters or more in value of each class of the
Scheme Shares held by those Scheme Shareholders;
-- the Resolution necessary to implement the Scheme is passed by
the requisite majority of ETQ Shareholders at the General
Meeting;
-- the Scheme is sanctioned (with or without modification, on
terms agreed by Volution and ETQ) by the Court; and
-- an office copy of the Scheme Court Order is delivered to the Registrar of Companies.
Upon the Scheme becoming effective: (i) it will be binding on
all Scheme Shareholders, irrespective of whether or not they
attended or voted at the Court Meeting or the General Meeting (and
if they attended and voted, whether or not they voted in favour);
and (ii) share certificates in respect of Scheme Shares will cease
to be valid and entitlements to Scheme Shares held within the CREST
system will be cancelled.
If the Scheme does not become effective on or before 29 February
2016 (or such later date as Volution and ETQ may, with the consent
of the Panel and, if required, the Court, agree), it will lapse and
the Acquisition will not proceed (unless the Panel otherwise
consents).
The Scheme Document will include full details of the Scheme,
together with notices of the Court Meeting and the General Meeting.
The Scheme Document will also contain the expected timetable for
the Acquisition, and will specify the necessary actions to be taken
by ETQ Shareholders. The Scheme Document will be posted to ETQ
Shareholders and, for information only, to persons with information
rights and to holders of options and awards granted under the ETQ
Share Scheme, as soon as practicable. Subject, amongst other
things, to the satisfaction or waiver of the Conditions, it is
expected that the Scheme will become effective on 21 December
2015.
14. Delisting and re-registration
It is intended that dealings in ETQ Shares will be suspended at
7.30 a.m. (London time) on the day of the Scheme Court Hearing. It
is further intended that an application will be made to the London
Stock Exchange for the cancellation of trading of the ETQ Shares on
AIM, with effect as of, or shortly following, the Effective
Date.
It is also intended that, following the Scheme becoming
effective, ETQ will be re-registered as a private company under the
relevant provisions of the Companies Act.
15. Disclosure of interests in ETQ relevant securities
Volution confirms that it is making on the date of this
announcement an Opening Position Disclosure, setting out the
details required to be disclosed by it under Rule 8.1(a) of the
Code.
ETQ confirms that it is making on the date of this announcement
an Opening Position Disclosure, setting out the details required to
be disclosed by it under Rule 8.2(a) of the Code.
Except for the irrevocable undertakings referred to in paragraph
6 above, as at close of business on 10 November 2015 (being the
latest practicable date prior to the date of this announcement),
neither Volution, nor any of the Volution Directors or any member
of the Volution Group, nor, so far as the Volution Directors are
aware, any person acting in concert (within the meaning of the
Code) with Volution for the purposes of the Acquisition had any
interest in, right to subscribe for, or had borrowed or lent any
ETQ Shares or securities convertible or exchangeable into ETQ
Shares, nor did any such person have any short position (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 take delivery, or any dealing arrangement of the kind referred
to in Note 11 of the definition of acting in concert in the Code,
in relation to ETQ Shares or in relation to any securities
convertible or exchangeable into ETQ Shares in the twelve months
preceding the date of this announcement.
16. Overseas shareholders
The availability of the Acquisition or the distribution of this
announcement to ETQ Shareholders who are not resident in the United
Kingdom may be affected by the laws of their relevant jurisdiction.
Such persons should inform themselves of, and observe, any
applicable legal or regulatory requirements of their jurisdiction.
ETQ Shareholders who are in any doubt regarding such matters should
consult an appropriate independent professional adviser in the
relevant jurisdiction without delay.
This announcement does not constitute an offer for sale for any
securities or an offer or an invitation to purchase any securities.
ETQ Shareholders are advised to read carefully the Scheme Document
and related Forms of Proxy once these have been dispatched.
17. Documents published on a website
Copies of the following documents will, by no later than 12.00
noon (London time) on 12 November 2015, be published on ETQ's
website at www.diffusion-group.com and Volution's website at
www.volutiongroupplc.com until completion of the Acquisition:
-- the irrevocable undertakings referred to in paragraph 6;
-- the confidentiality agreement referred to in paragraph 12; and
-- this announcement.
18. General
The Acquisition will be subject to the Conditions and certain
further terms set out in Appendix 1 and the further terms and
conditions to be set out in the Scheme Document when issued.
The Scheme will be governed by English law and will be subject
to the jurisdiction of the courts of England and Wales. The Scheme
will be subject to the applicable requirements of the Code, the
Panel and the London Stock Exchange.
The bases and sources of certain financial information contained
in this announcement are set out in Appendix 2. Certain terms used
in this announcement are defined in Appendix 4.
Enquiries
Volution Group plc
Ronnie George +44 (0) 1293 441501
Ian Dew +44 (0) 1293 441536
Liberum Capital Limited (Financial Adviser and Broker to
Volution Group plc)
Neil Patel/Richard Bootle +44 (0) 20 3100 2222
Brunswick (Financial Public Relations Adviser to Volution Group
plc)
Craig Breheny/Simone +44 (0) 20 7404 5959
Selzer/ volution@brunswickgroup.com
Chris Buscombe
Energy Technique plc
Leigh Stimpson +44 (0) 20 8783 0033
Rob Unsworth +44 (0) 20 8783 0033
Cavendish Corporate Finance LLP (Financial Adviser to Energy
Technique plc)
Andrew Jeffs/Philip
Barker +44 (0) 20 7908 6000
finnCap Ltd (Nominated Adviser and Broker to Energy Technique
plc)
Ed Frisby/Scott Mathieson +44 (0) 20 7220 0500
Further information
(MORE TO FOLLOW) Dow Jones Newswires
November 11, 2015 02:09 ET (07:09 GMT)
This announcement is not intended to and does not constitute, or
form part of, an offer, invitation or the solicitation of an offer
to purchase, otherwise acquire, subscribe for, sell or otherwise
dispose of any securities, or the solicitation of any vote or
approval in any jurisdiction, pursuant to the Acquisition or
otherwise, nor shall there be any sale, issuance or transfer of
securities of ETQ in any jurisdiction in contravention of
applicable law. The Acquisition will be made solely by means of the
Scheme Document, which will contain the full terms and conditions
of the Acquisition including details of how to vote in respect of
the Scheme. Any vote in respect of the Scheme or other response in
relation to the Acquisition should be made only on the basis on the
information contained in the Scheme Document.
Liberum Capital Limited, which is authorised and regulated in
the United Kingdom by the FCA, is acting exclusively for Volution
and no--one else in connection with the Acquisition and will not be
responsible to anyone other than Volution for providing the
protections afforded to clients of Liberum nor for providing advice
in relation to the Acquisition or any other matters referred to in
this announcement.
Cavendish Corporate Finance LLP, which is authorised and
regulated in the United Kingdom by the FCA, is acting exclusively
for ETQ and no-one else in connection with the Acquisition and will
not be responsible to anyone other than ETQ for providing the
protections afforded to clients of Cavendish nor for providing
advice in relation to the Acquisition or any other matters referred
to in this announcement..
finnCap Ltd, which is authorised and regulated in the United
Kingdom by the FCA, is acting for ETQ in relation to the matters
described in this announcement and is not advising any other
person, and accordingly will not be responsible to anyone other
than ETQ for providing the protections afforded to clients of
finnCap Ltd or for providing advice in relation to the matters
described in this announcement.
Overseas jurisdictions
The availability of the Acquisition to ETQ Shareholders who are
not resident in and citizens of the UK may be affected by the laws
of the relevant jurisdictions in which they are located or of which
they are citizens. Persons who are not resident in the UK should
inform themselves of, and observe, any applicable legal or
regulatory requirements of their jurisdictions. Further details in
relation to overseas shareholders will be contained in the Scheme
Document.
The release, publication or distribution of this announcement in
or into jurisdictions other than the UK may be restricted by law
and therefore any persons who are subject to the law of any
jurisdiction other than the UK should inform themselves about, and
observe, any applicable requirements. Any failure to comply with
the applicable restrictions may constitute a violation of the
securities laws of any such jurisdiction. To the fullest extent
permitted by applicable law, the companies and persons involved in
the Acquisition disclaim any responsibility or liability for the
violation of such restrictions by any person. This announcement has
been prepared for the purposes of complying with English law, the
AIM Rules, the rules of the London Stock Exchange and the Code and
the information disclosed may not be the same as that which would
have been disclosed if this announcement had been prepared in
accordance with the laws of jurisdictions outside of England.
Copies of this announcement and the formal documentation
relating to the Scheme and the Acquisition will not be and must not
be, mailed or otherwise forwarded, distributed or sent in, into or
from any jurisdiction where to do so would violate the laws of that
jurisdiction.
US Holders should note that the Acquisition relates to the
securities of a UK company, is subject to UK disclosure
requirements (which are different from those of the US) and is
proposed to be implemented under a scheme of arrangement provided
for under English company law. A transaction effected by means of a
scheme of arrangement is not subject to the tender offer rules
under the US Exchange Act. Accordingly, the Scheme will be subject
to UK disclosure requirements and practices, which are different
from the disclosure requirements of the US tender offer and proxy
solicitation rules. The financial information included in this
announcement and the Scheme documentation has been or will have
been prepared in accordance with IFRS and thus may not be
comparable to financial information of US companies or companies
whose financial statements are prepared in accordance with
generally accepted accounting principles in the US. If Volution
exercises its right to implement the acquisition of the ETQ Shares
by way of a takeover offer, such offer will be made in compliance
with applicable US tender offer and securities laws and
regulations.
The receipt of cash pursuant to the Acquisition by a US Holder
as consideration for the transfer of its Scheme Shares pursuant to
the Scheme may be a taxable transaction for US federal income tax
purposes and under applicable US state and local, as well as
foreign and other, tax laws. Each ETQ Shareholder is urged to
consult his independent professional adviser immediately regarding
the tax consequences of the Acquisition applicable to him.
It may be difficult for US Holders to enforce their rights and
claims arising out of the US federal securities laws, since
Volution and ETQ are located in countries other than the US, and
some or all of their officers and directors may be residents of
countries other than the US. US Holders may not be able to sue a
non-US company or its officers or directors in a non-US court for
violations of US securities laws. Further, it may be difficult to
compel a non-US company and its affiliates to subject themselves to
a US court's judgement.
In accordance with normal UK practice and pursuant to Rule
14e-5(b) of the US Exchange Act, Volution or its nominees, or its
brokers (acting as agents), may from time to time make certain
purchases of, or arrangements to purchase, ETQ Shares outside of
the United States, other than pursuant to the Acquisition, until
the date on which the Acquisition and/or Scheme becomes effective,
lapses or is otherwise withdrawn. These purchases may occur either
in the open market at prevailing prices or in private transactions
at negotiated prices. Any information about such purchases will be
disclosed as required in the UK, will be reported to a Regulatory
Information Service of the London Stock Exchange and will be
available on the London Stock Exchange website,
www.londonstockexchange.com.
Forward looking statements
This announcement (including information incorporated by
reference in this announcement), oral statements made regarding the
Acquisition, and other information published by Volution and ETQ
may contain statements which are, or may be deemed to be,
"forward-looking statements". Forward-looking statements are
prospective in nature and are not based on historical facts, but
rather on current expectations and projections of the management of
Volution and ETQ about future events, and are therefore subject to
risks and uncertainties which could cause actual results to differ
materially from the future results expressed or implied by the
forward-looking statements.
The forward-looking statements contained in this announcement
include statements relating to the expected effects of the
Acquisition on Volution and ETQ, the expected timing and scope of
the Acquisition and other statements other than historical facts.
Often, but not always, forward-looking statements can be identified
by the use of forward-looking words such as "plans", "expects" or
"does not expect", "is expected", "is subject to", "budget",
"scheduled", "estimates", "forecasts", "intends", "anticipates" or
"does not anticipate", or "believes", or variations of such words
and phrases or statements that certain actions, events or results
"may", "could", "should", "would", "might" or "will" be taken,
occur or be achieved. Although Volution and ETQ believe that the
expectations reflected in such forward-looking statements are
reasonable, Volution and ETQ can give no assurance that such
expectations will prove to be correct. By their nature,
forward-looking statements involve risk and uncertainty because
they relate to events and depend on circumstances that will occur
in the future. There are a number of factors that could cause
actual results and developments to differ materially from those
expressed or implied by such forward-looking statements.
These factors include, but are not limited to: the ability to
consummate the Acquisition; the ability to obtain requisite
regulatory and shareholder approvals and the satisfaction of other
Conditions; the ability of Volution and ETQ to successfully
integrate their respective operations and retain key employees; the
potential impact of the announcement or consummation of the
Acquisition on relationships, including with employees, suppliers,
customers and competitors; changes in general economic, business
and political conditions, including changes in the financial
markets; significant competition that Volution and ETQ face;
compliance with extensive government regulation; the combined
company's ability to make acquisitions and its ability to integrate
or manage such acquired businesses. Other unknown or unpredictable
factors could cause actual results to differ materially from those
in the forward-looking statements. Such forward-looking statements
should therefore be construed in the light of such factors. Neither
Volution nor ETQ, nor any of their respective associates or
directors, officers or advisers, provides any representation,
assurance or guarantee that the occurrence of the events expressed
or implied in any forward-looking statements in this announcement
will actually occur. You are cautioned not to place undue reliance
on these forward-looking statements. Other than in accordance with
their legal or regulatory obligations (including under the AIM
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Rules and the Disclosure and Transparency Rules of the FCA, as
applicable), neither Volution nor ETQ is under any obligation, and
Volution and ETQ expressly disclaim any intention or obligation, to
update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise.
Dealing disclosure requirements
Under Rule 8.3(a) of the Code, any person who is interested in
one 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 (London time) on the 10(th) business day
following the commencement of the offer period and, if appropriate,
by no later than 3.30 pm (London time) on the 10(th) 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 one per cent. or more of any class of relevant
securities of the offeree company or of any securities exchange
offeror must make a Dealing Disclosure if the person deals in any
relevant securities of the offeree company or of any securities
exchange offeror. A Dealing Disclosure must contain details of the
dealing concerned and of the person's interests and short positions
in, and rights to subscribe for, any relevant securities of each of
(i) the offeree company and (ii) any securities exchange
offeror(s), save to the extent that these details have previously
been disclosed under Rule 8. A Dealing Disclosure by a person to
whom Rule 8.3(b) applies must be made by no later than 3.30 pm
(London time) on the business day following the date of the
relevant dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of an offeree company or a
securities exchange offeror, they will be deemed to be a single
person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree
company and by any offeror and Dealing Disclosures must also be
made by the offeree company, by any offeror and by any persons
acting in concert with any of them (see Rules 8.1, 8.2 and
8.4).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the 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 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.
Publication on website
A copy of this announcement will be made available, subject to
certain restrictions relating to persons resident in Restricted
Jurisdictions, on Volution's website at www.volutiongroupplc.com
and ETQ's website at www.diffusion-group.com by no later than 12.00
noon (London time) on the business day following this announcement.
For the avoidance of doubt, the contents of these websites are not
incorporated by reference and do not form part of this
announcement.
Requesting hard copy documents
You may request a hard copy of this announcement by contacting
the Company Secretary of ETQ during business hours on +44 (0) 8783
0033 or by submitting a request in writing to the Company Secretary
of ETQ at the registered office of ETQ, at 47 Central Avenue, West
Molesey, Surrey, KT8 2QZ. 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. You may also request that all future documents,
announcements and information to be sent to you in relation to the
Acquisition should be in hard copy form.
Electronic Communications
Please be aware that addresses, electronic addresses and certain
other information provided by ETQ Shareholders, persons with
information rights and other relevant persons for the receipt of
communications from ETQ may be provided to Volution during the
offer period as required under Section 4 of Appendix 4 of the Code
in order to comply with Rule 2.12(c).
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 figures that precede them.
Appendix 1
Conditions and Certain Further Terms of the Scheme and the
Acquisition
A. Conditions to the Scheme and Acquisition
1. The Acquisition will be conditional upon the Scheme becoming
unconditional and becoming effective, subject to the provisions of
the Code, by no later than 29 February 2016 or such later date (if
any) as Volution and ETQ may agree (if required), with the consent
of the Panel and (if required) the Court may approve.
2. The Scheme will be conditional upon:
(a) the approval of the Scheme at the Court Meeting (or at any
adjournment thereof, provided that the Court Meeting may not be
adjourned beyond 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 (if any) as Volution and ETQ may agree and the court may
allow and approve) by a majority in number of the Scheme
Shareholders entitled to vote present and voting, either in person
or by proxy, representing 75 per cent. or more in nominal value of
each class of the Scheme Shares held by those Scheme
Shareholders;
(b) all resolutions in connection with or required to approve
and implement the Scheme as set out in the notice of the General
Meeting (including, without limitation, the Resolution) being duly
passed by votes in favour representing at least 75 per cent. of the
votes cast in person or by proxy by ETQ Shareholders at the General
Meeting (or at any adjournment thereof, provided that the General
Meeting may not be adjourned beyond the 22nd day after the expected
date of the General Meeting to be set out in the Scheme Document in
due course or such later date (if any) as Volution and ETQ may
agree and the court may allow and approve); and
(c) the sanction of the Scheme without modification or with
modification on terms acceptable to Volution and ETQ (provided that
the Scheme Court Hearing may not be adjourned beyond the 22nd day
after the expected date of the Scheme Court Hearing to be set out
in the Scheme Document in due course or such later date (if any) as
Volution and ETQ may agree and the court may allow and approve) and
the delivery of an office copy of the Scheme Court Order to the
Registrar of Companies.
3. In addition, Volution and ETQ have agreed that, subject as
stated in Part B below, the Acquisition will be conditional upon
the following matters and, accordingly, the necessary actions to
make the Scheme effective will not be taken unless such conditions
(as amended, if appropriate) have been satisfied or, where
relevant, waived:
(a) no Third Party having intervened (as defined below) and
there not continuing to be outstanding any statute, regulation or
order of any Third Party, in each case which would or might
reasonably be expected to:
(i) make the Scheme or the Acquisition or, in each case, its
implementation or the acquisition or proposed acquisition by
Volution or any member of the Wider Volution Group of any shares or
other securities in, or control or management of, ETQ or any member
of the Wider ETQ Group void, illegal or unenforceable in any
jurisdiction, or otherwise directly or indirectly prevent,
prohibit, restrain, restrict or delay the same or impose additional
conditions or obligations with respect to the Scheme or the
Acquisition or such acquisition, or otherwise impede, challenge or
interfere with the Scheme or Acquisition or such acquisition, or
require amendment to the terms of the Scheme or Acquisition or the
acquisition or proposed acquisition of any ETQ Shares or the
acquisition of control or management of ETQ or the Wider ETQ Group
by Volution or any member of the Wider Volution Group;
(ii) limit or delay, or impose any limitations on, the ability
of any member of the Wider Volution Group or any member of the
Wider ETQ Group to acquire or to hold or to exercise effectively,
directly or indirectly, all or any rights of ownership in respect
of shares or other securities in, or to exercise voting or
management control over, any member of the Wider ETQ Group or any
member of the Wider Volution Group;
(iii) require, prevent or delay the divestiture or alter the
terms envisaged for any proposed divestiture by any member of the
Wider Volution Group of any shares or other securities in ETQ or of
all or any material portion of their respective businesses, assets
or properties or limit the ability of any of them to conduct any of
their respective businesses or to own or control any of their
respective material assets or material properties or any part
thereof;
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(iv) except pursuant to sections 974 to 991 of the Companies
Act, require any member of the Wider Volution Group or of the Wider
ETQ Group to acquire, or to offer to acquire, any shares or other
securities (or the equivalent) in any member of either group owned
by any third party;
(v) limit the ability of any member of the Wider Volution Group
or of the Wider ETQ Group to conduct in any material respect or
integrate or co--ordinate its business, or any part of it, with the
businesses or any part of the businesses of any other member of the
Wider Volution Group or of the Wider ETQ Group;
(vi) result in any member of the Wider ETQ Group or the Wider
Volution Group ceasing to be able to carry on business under any
name under which it presently does so; or
(vii) otherwise materially adversely affect any or all of the
business, assets, profits, financial or trading position or
prospects of any member of the Wider ETQ Group or of the Wider
Volution Group,
and all applicable waiting and other time periods during which
any Third Party could intervene under the laws of any relevant
jurisdiction having expired, lapsed or been terminated;
(b) all Authorisations (other than those set out in paragraph 2
above), which are necessary or are reasonably considered necessary
by Volution in any relevant jurisdiction for or in respect of the
Scheme or Acquisition or the acquisition or proposed acquisition of
any shares or other securities in, or control or management of, ETQ
or any other member of the Wider ETQ Group by any member of the
Wider Volution Group or the carrying on by any member of the Wider
ETQ Group of its business having been obtained, in terms and in a
form satisfactory to Volution (acting reasonably), from all
appropriate Third Parties or from any persons or bodies with whom
any member of the Wider ETQ Group has entered into contractual
arrangements, in each case where the absence of such Authorisation
would or might reasonably be expected to have a material adverse
effect on the ETQ Group taken as a whole and all such
Authorisations remaining in full force and effect and there being
no notice or intimation of any intention to revoke, suspend,
restrict, modify or not to renew any of the same;
(c) since 31 March 2015 and except as Disclosed, there being no
provision of any arrangement, agreement, licence, permit, franchise
or other instrument to which any member of the Wider ETQ Group is a
party, or by or to which any such member or any of its assets is or
are or may be bound, entitled or subject or any circumstance,
which, in each case as a consequence of the Scheme or Acquisition
or the acquisition or proposed acquisition of any shares or other
securities in, or control of, ETQ or any other member of the Wider
ETQ Group by any member of the Wider Volution Group or otherwise,
would or might reasonably be expected to result in (in any case to
an extent which would or might reasonably be expected to be
material in the context of the ETQ 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 member of the Wider ETQ Group being or becoming repayable or
capable of being declared repayable immediately or prior to its
stated maturity date or repayment date or the ability of any member
of the Wider ETQ Group to borrow monies or incur any indebtedness
being withdrawn or inhibited or becoming capable of being withdrawn
or inhibited;
(ii) the creation or enforcement of any mortgage, charge or
other security interest over the whole or any part of the business,
property, assets or interests of any member of the Wider ETQ Group
or any such mortgage, charge or other security interest (wherever
created, arising or having arisen) becoming enforceable;
(iii) any such arrangement, agreement, licence, permit,
franchise or instrument, or the rights, liabilities, obligations or
interests of any member of the Wider ETQ Group thereunder, being,
or becoming capable of being, terminated or adversely modified or
affected or any adverse action being taken or any obligation or
liability arising thereunder;
(iv) any liability of any member of the Wider ETQ Group to make
any severance, termination, bonus or other payment to any employee
or key producer of the Wider ETQ Group;
(v) any asset or interest of any member of the Wider ETQ Group
being or falling to be disposed of or charged or ceasing to be
available to any member of the Wider ETQ Group or any right arising
under which any such asset or interest could be required to be
disposed of or could cease to be available to any member of the
Wider ETQ Group otherwise than in the ordinary course of
business;
(vi) any member of the Wider ETQ Group ceasing to be able to
carry on business under any name under which it presently does
so;
(vii) the creation of any liabilities (actual or contingent) by
any member of the Wider ETQ Group;
(viii) the rights, liabilities, obligations or interests of any
member of the Wider ETQ Group under any such arrangement,
agreement, licence, permit, franchise or other instrument or the
interests or business of any such member in or with any other
person, firm, company or body (or any arrangement or arrangements
relating to any such interests or business) being terminated or
adversely modified or affected; or
(ix) the financial or trading position or prospects or the value
of any member of the Wider ETQ Group being prejudiced or adversely
affected,
and no event having occurred which, under any provision of any
such arrangement, agreement, licence, permit or other instrument,
would or would reasonably be expected to result in any of the
events or circumstances which are referred to in paragraphs (i) to
(ix) of this Condition 3(c) in any case to an extent which would or
might reasonably be expected to be material in the context of the
ETQ Group taken as a whole;
(d) since 31 March 2015 and except as Disclosed, no member of the Wider ETQ Group having:
(i) entered into, terminated or varied the terms of or made any
offer (which remains open for acceptance) to enter into or vary the
terms of, any contract, agreement, commitment, transaction or
arrangement with any person employed by any member of the Wider ETQ
Group, including entering into any such arrangement which would or
might reasonably be expected to result in any liability of any
member of the Wider ETQ Group to make any severance, termination,
bonus or other payments to any of its directors or other officers,
which would or might reasonably be expected to be material in the
context of the Acquisition or which would or might reasonably be
expected to have a material adverse effect on the financial
position or prospects of the ETQ Group taken as a whole;
(ii) proposed, agreed to provide or modified the terms of any
share option scheme, incentive scheme or other material benefit
relating to the employment or termination of employment of any
person employed by the Wider ETQ Group;
(iii) made or agreed or consented to:
(A) any material change to:
(I) the terms of the trust deeds constituting the pension
scheme(s) established for its directors, employees or their
dependants; or
(II) the contributions payable to any such scheme(s) or to the
benefits which accrue or to the pensions which are payable
thereunder; or
(III) the basis on which qualification for, or accrual or
entitlement to such benefits or pensions are calculated or
determined; or
(IV) the basis upon which the liabilities (including pensions)
or such pension schemes are funded, valued or made,
(B) any change to the trustees including the appointment of a trust corporation;
in each case, which would or might reasonably be expected to
have a material effect in the context of the ETQ Group taken as a
whole;
(iv) issued or agreed to issue, or authorised the issue of,
additional shares of any class, or securities convertible into or
exercisable or exchangeable for, or rights, warrants or options to
subscribe for or acquire, any such shares or convertible securities
or transferred or sold any shares out of treasury, in all such
cases, other than as between ETQ and wholly--owned subsidiaries of
ETQ or any shares issued or shares transferred from treasury upon
the exercise of any options or vesting of awards granted under the
ETQ Share Scheme;
(v) purchased or redeemed or repaid any of its own shares or
other securities or reduced or made any other change to any part of
its share capital to an extent which (other than in the case of
ETQ) would or might reasonably be expected to be material in the
context of the ETQ Group taken as a whole;
(vi) recommended, declared, paid or made any dividend or other
distribution whether payable in cash or otherwise or made any bonus
issue (other than to ETQ or a wholly--owned subsidiary of ETQ);
(vii) made or authorised any change in its loan capital;
(viii) entered into, implemented or authorised the entry into,
any joint venture, asset or profit sharing arrangement, partnership
or merged with, demerged or acquired any body corporate,
partnership or business or acquired or disposed of or transferred,
mortgaged, charged or created any security interest over any assets
or any right, title or interest in any assets (including shares in
any undertaking and trade investments) or authorised the same (in
each case to an extent which would or might reasonably be expected
to be material in the context of the ETQ Group taken as a
whole);
(ix) issued or authorised the issue of, or made any change in or
to, any debentures or (except in the ordinary course of business or
except as between ETQ and its wholly-owned subsidiaries or between
such wholly-owned subsidiaries) incurred or increased any
indebtedness or liability (actual or contingent) which in any case
would or might reasonably be expected to be material in the context
of the ETQ Group taken as a whole;
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(x) entered into, varied, or authorised any agreement,
transaction, arrangement or commitment (whether in respect of
capital expenditure or otherwise) which:
(A) is of a long term, onerous or unusual nature or magnitude or
which is reasonably likely to involve an obligation of such nature
or magnitude; or
(B) is likely to restrict the business of any member of the Wider ETQ Group; or
(C) is other than in the ordinary course of business,
and which would or might reasonably be expected to be material
in the context of the ETQ Group taken as a whole;
(xi) entered into, implemented, effected or authorised any
merger, demerger, reconstruction, amalgamation or scheme in respect
of itself or another member of the Wider ETQ Group;
(xii) taken any corporate action or had any legal proceedings
instituted or threatened against it or petition presented or order
made for its winding--up (voluntarily or otherwise), dissolution or
reorganisation or for the appointment of a receiver, administrator,
administrative receiver, trustee or similar officer of all or any
material part of its assets and revenues or any analogous
proceedings in any jurisdiction or appointed any analogous person
in any jurisdiction which in any case would or might reasonably be
expected to be material in the context of the ETQ Group taken as a
whole;
(xiii) been unable, or admitted in writing that it is unable, to
pay its debts or having stopped or suspended (or threatened to stop
or suspend) payment of its debts generally or ceased or threatened
to cease carrying on all or a substantial part of its business;
(xiv) waived or compromised any claim otherwise than in the
ordinary course of business which would or might reasonably be
expected to be material in the context of the ETQ Group taken as a
whole;
(xv) made any alteration to its memorandum or articles of
association other than in connection with the Scheme; or
(xvi) entered into any agreement, commitment or arrangement or
passed any resolution or made any offer (which remains open for
acceptance) or proposed or announced any intention with respect to
any of the transactions, matters or events referred to in this
Condition 3(d);
(e) since 31 March 2015 and except as Disclosed:
(i) there having been no adverse change or deterioration in the
business, assets, financial or trading positions or profits or
prospects of any member of the Wider ETQ Group which in any case
would or would reasonably be expected to be material in the context
of the ETQ Group taken as a whole;
(ii) no contingent or other liability of any member of the Wider
ETQ Group having arisen or become apparent or increased which in
any case would or would reasonably be expected to be material in
the context of the ETQ Group taken as a whole;
(iii) no litigation, arbitration proceedings, prosecution or
other legal proceedings to which any member of the Wider ETQ Group
is or may become a party (whether as plaintiff, defendant or
otherwise) having been threatened, announced, implemented or
instituted by or against or remaining outstanding against or in
respect of any member of the Wider ETQ Group which in any case
would or would reasonably be expected to be material in the context
of the ETQ Group taken as a whole;
(iv) (other than as a result of the Acquisition) no enquiry or
investigation by, or complaint or reference to, any Third Party
having been threatened, announced, implemented, instituted by or
against or remaining outstanding against or in respect of any
member of the Wider ETQ Group which in any case would or would
reasonably be expected to be material in the context of the ETQ
Group taken as a whole;
(v) other than with the consent of Volution, no action having
been taken or proposed by any member of the Wider ETQ Group, or
having been approved by ETQ Shareholders or consented to by the
Panel, which falls or would fall within or under Rule 21.1 of the
Code or which otherwise is or would be materially inconsistent with
the implementation by Volution of the Acquisition on the basis
contemplated as at the date of this announcement; and
(vi) no member of the Wider ETQ Group having conducted its
business in breach of any applicable laws and regulations which in
any case would or would reasonably be expected to be material in
the context of the ETQ Group taken as a whole;
(f) Volution not having discovered:
(i) that any financial or business or other information
concerning the Wider ETQ Group disclosed at any time by or on
behalf of any member of the Wider ETQ Group, whether publicly, to
any member of the Wider Volution Group or to any of their advisers
or otherwise, is misleading or contains any misrepresentation of
fact or omits to state a fact necessary to make any information
contained therein not misleading and which was not subsequently
corrected before the date of this announcement by disclosure either
publicly or otherwise to Volution to an extent which in any case
would or might reasonably be expected to be material in the context
of the ETQ Group taken as a whole;
(ii) that any member of the Wider ETQ Group is subject to any
liability (actual or contingent) which is not Disclosed and which
in any case would or might reasonably be expected to be material in
the context of the ETQ Group taken as a whole;
(iii) any past or present member of the Wider ETQ Group has not
complied in all material respects with all applicable legislation,
regulations or other requirements 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 property) or harm human health or otherwise
relating to environmental matters or the health and safety of
humans, which non-compliance would be likely to give rise to any
material liability including any penalty for non-compliance
(whether actual or contingent) on the part of any member of the
Wider ETQ Group;
(iv) there is any liability (actual or contingent) of any past
or present member of the Wider ETQ Group under any environmental
legislation, regulation, notice, circular or order of any
government, governmental, quasi-governmental, state or local
government, supranational, statutory or other regulatory body,
agency, court, association or any other person or body in any
jurisdiction and which is material in the context of the Wider ETQ
Group taken as a whole and which was not Disclosed; or
(v) circumstances exist that were not Disclosed which would or
might reasonably be expected to lead to any Third Party
instituting, or whereby any member of the Wider Volution Group or
any present or past member of the Wider ETQ Group would or might
reasonably be expected to be required to institute, an
environmental audit or take any other steps which would or might
reasonably be expected to result in any material liability (whether
actual or contingent) to improve, modify existing or install new
plant, machinery or equipment or carry out changes in the processes
currently carried out or make good, remediate, repair, re-instate
or clean up any land or other asset currently or previously owned,
occupied or made use of by any past or present member of the Wider
ETQ Group,
4. For the purpose of these Conditions:
(a) "Disclosed" means the information disclosed by or on behalf
of ETQ (a) in the annual report and accounts of the ETQ Group for
the financial year ended 31 March 2015; (b) the interim results of
the ETQ Group for the six month period ended on 30 September 2015;
(c) in this announcement; (d) in any other announcement to a
Regulatory Information Service by or on behalf of ETQ prior to the
publication of this announcement; (e) by ETQ in the Data Room
before the date of this announcement;
(b) "Data Room" means the virtual data room hosted by Sterling
of 63 Queen Victoria Street, London, EC4N 4UA in relation to
ETQ;
(c) "Third Party" means any central bank, government, government department or governmental, quasi--governmental, supranational, statutory, regulatory, environmental or investigative body, authority (including any national or supranational anti--trust or merger control authority), court, trade agency, association, institution or professional or environmental body or any other person or body whatsoever in any relevant jurisdiction, including, for the avoidance of doubt, the Panel;
(d) a Third Party shall be regarded as having "intervened" if,
in relation to the matters referred to in paragraph 3(a) above, it
has decided to take, or has publicly announced an intention, to
take, institute, implement or threaten any action, proceeding,
suit, investigation, enquiry or reference or made, proposed or
enacted any statute, regulation, decision or order or taken any
measures or other steps or required any action to be taken or
information to be provided or otherwise having done anything and
"intervene" shall be construed accordingly; and
(e) "Authorisations" means authorisations, orders, grants,
recognitions, determinations, certificates, confirmations,
consents, licences, clearances, provisions and approvals.
B. Certain further terms of the Scheme and the Acquisition
1. Conditions 3(a) to 3(f) (inclusive) must be fulfilled, or
remain satisfied or (if capable of waiver) be waived by 11.59 p.m.
on the date immediately preceding the date of the Scheme Court
Hearing, failing which the Scheme will lapse and will not
proceed.
2. Notwithstanding paragraph 1 above and subject to the
requirements of the Panel, Volution reserves the right in its sole
discretion to waive all or any of Conditions 3(a) to 3(f)
inclusive, in whole or in part and to proceed with the Scheme Court
Hearing prior to the fulfilment, satisfaction or waiver of any of
the Conditions 3(a) to 3(f) inclusive.
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3. Volution shall be under no obligation to waive (if capable of
waiver), or to treat as fulfilled any of Conditions 3(a) to 3(f)
(inclusive) by a date earlier than the latest date specified above
for the fulfilment of that condition, notwithstanding that the
other Conditions may at such earlier date have been waived or
fulfilled and that there are, at such earlier date, no
circumstances indicating that any Condition may not be capable of
fulfilment.
4. Volution reserves the right to elect to implement the
Acquisition by way of a takeover offer (as defined in Part 28 of
the Companies Act), subject to the Panel's consent. In such event,
such Offer will be implemented on the same terms and conditions
(subject to appropriate amendments, including (without limitation)
an acceptance condition set at 75 per cent. (or such other
percentage (being more than 50 per cent.) as Volution may decide
(subject to the Panel's consent) of the shares to which such Offer
relates) so far as applicable, as those which would apply to the
Scheme.
5. If the Panel requires Volution to make an offer or offers for
any ETQ Shares under the provisions of Rule 9 of the Code, Volution
may make such alterations to the Conditions as are necessary in
order to comply with the provisions of that Rule.
6. The Acquisition will be subject, inter alia, to the
Conditions and certain further terms which are set out in this
Appendix 1 and those terms which will be set out in the Scheme
Document and such further terms as may be required in order to
comply with the AIM Rules and the provisions of the Code.
7. The Acquisition will lapse if the UK Competition and Markets
Authority makes a reference initiating a Phase 2 investigation
before the later of the Court Meeting and the General Meeting.
8. ETQ Shares will be acquired by Volution fully paid and free
from all liens, equitable interests, charges, encumbrances and
other third party rights of any nature whatsoever and together with
all rights attaching to them, including (without limitation) the
right to receive and retain in full all dividends and other
distributions (if any) declared, made or payable after the date of
this announcement 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.
9. This announcement and any rights or liabilities arising
hereunder, the Acquisition, the Scheme, and any proxies will be
governed by English law and be subject to the jurisdiction of the
courts of England and Wales. The Scheme will be subject to the
applicable requirements of the Code, the Panel, the London Stock
Exchange and the AIM Rules.
10. Any persons who are subject to the laws of any jurisdiction
other than the United Kingdom should inform themselves about and
observe any applicable requirements. Further information in
relation to overseas shareholders will be contained in the Scheme
Document.
11. Each of the Conditions shall be regarded as a separate
Condition and shall not be limited by reference to any other
Condition.
Appendix 2
Bases and Sources
(a) The value attributed to the existing issued and to be issued
ordinary share capital of ETQ is based upon 2,390,516 ETQ Shares in
issue on 10 November 2015, being the last dealing day prior to the
date of this announcement and the net dilutive impact of 291,057
ETQ Shares which are the subject of options and/or awards granted
under the ETQ Share Scheme.
(b) Unless otherwise stated, the financial information on ETQ is
extracted (without material adjustment) from ETQ's Annual Report
and Accounts for the year ended 31 March 2015.
(c) The closing prices of the ETQ Shares on 25 February 2015 are
taken from the Daily Official List.
(d) The volume weighted average price for the ETQ Shares is derived from Bloomberg.
Appendix 3
Details of Irrevocable Undertakings
Directors' Irrevocable Undertakings
The following holders of ETQ Shares have given irrevocable
undertakings to vote in favour of the Scheme at the Court Meeting
and the resolutions to be proposed at the General Meeting in
relation to the following ETQ Shares which are currently in
issue:
Name Number Percentage
of ETQ of total ETQ
Shares Shares
Leigh Stimpson 176,754 7.39
Walter Goldsmith 109,980 4.60
Martin Reid 121,606 5.09
Total 408,340 17.08
The undertakings from the ETQ Directors in relation to their ETQ
Shares currently in issue will cease to be binding only if the
Scheme or Offer lapses or is withdrawn and no new, revised or
replacement Scheme or Offer is announced in accordance with Rule
2.7 of the Code (which represents no diminution in the value of, or
change to the form of, the consideration being offered and which
contains no material changes to the commercial terms of, and no
material changes to the conditions to, the Acquisition, which are
less favourable to acceptors than those contained in this
announcement or as may otherwise be required to comply with the
requirements of the Panel, the Financial Conduct Authority or
London Stock Exchange plc), in its place or is announced, in
accordance with Rule 2.7 of the Code, at the same time. The
undertakings will remain binding in the event that a higher
competing offer for ETQ is made.
ETQ Shareholders' Irrevocable Undertakings
The following holders of ETQ Shares have given irrevocable
undertakings to vote in favour of the Scheme at the Court Meeting
and the resolutions to be proposed at the General Meeting in
relation to the following ETQ Shares which are currently in
issue:
Name Number Percentage
of ETQ of total ETQ
Shares Shares
Peter Gyllenhammar 605,612 25.33
James Lugg 260,931 10.92
John Cawthorne 224,480 9.39
Danny Francis 82,204 3.44
Total 1,173,227 49.08
The undertakings from Peter Gyllenhammar, James Lugg, John
Cawthorne and Danny Francis will cease to be binding only if the
Scheme or Offer lapses or is withdrawn and no new, revised or
replacement Scheme or Offer is announced in accordance with Rule
2.7 of the Code (which represents no diminution in the value of, or
change to the form of, the consideration being offered and which
contains no material changes to the commercial terms of, and no
material changes to the conditions to, the Acquisition, which are
less favourable to acceptors than those contained in this
announcement or as may otherwise be required to comply with the
requirements of the Panel, the Financial Conduct Authority or
London Stock Exchange plc), in its place or is announced, in
accordance with Rule 2.7 of the Code, at the same time. The
undertakings will remain binding in the event that a higher
competing offer for ETQ is made.
ETQ Optionholders' Irrevocable Undertakings
The following holders of options in respect of ETQ Shares
granted under the ETQ Share Scheme have given irrevocable
undertakings to vote in favour of the Scheme at the Court Meeting
and the resolutions to be proposed at the General Meeting in
relation to the following ETQ Shares which are to be issued under
the ETQ Share Scheme, to the extent that these options are
exercised:
Name Number of ETQ Shares
under
the ETQ Share Scheme
Leigh Stimpson 83,263
Martin Reid 83,263
Gordon Winter 33,305
Total 199,831
The undertakings from Leigh Stimpson, Martin Reid and Gordon
Winter in relation to their ETQ Shares which are to be issued under
the ETQ Share Scheme will cease to be binding only if the Scheme or
Offer lapses or is withdrawn and no new, revised or replacement
Scheme or Offer is announced in accordance with Rule 2.7 of the
Code (which represents no diminution in the value of, or change to
the form of, the consideration being offered and which contains no
material changes to the commercial terms of, and no material
changes to the conditions to, the Acquisition, which are less
favourable to acceptors than those contained in this announcement
or as may otherwise be required to comply with the requirements of
the Panel, the Financial Conduct Authority or London Stock Exchange
plc), in its place or is announced, in accordance with Rule 2.7 of
the Code, at the same time. The undertakings will remain binding in
the event that a higher competing offer for ETQ is made.
Appendix 4
Definitions
The following definitions apply throughout this announcement
unless the context requires otherwise.
"GBP", "Sterling", the lawful currency of the
"pence" or "p" UK
"Acquisition" the direct or indirect acquisition
of the entire issued and
to be issued share capital
of ETQ by Volution (other
than ETQ Shares already
held by Volution, if any)
to be implemented by way
of the Scheme or (should
Volution so elect, subject
to the consent of the Panel)
by way of the Offer
"AIM Rules" the AIM Rules for Companies
published by the London
Stock Exchange from time
to time
"AIM" AIM, a market operated by
the London Stock Exchange
"Cavendish" Cavendish Corporate Finance
LLP
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"Code" the City Code on Takeovers
and Mergers
"Companies Act" the Companies Act 2006,
as amended from time to
time
"Conditions" the conditions to the implementation
of the Acquisition (including
the Scheme) as set out in
Appendix 1 to this announcement
and to be set out in the
Scheme Document
"Court Meeting" the meeting of the Scheme
Shareholders to be convened
by order of the Court pursuant
to section 896 of the Companies
Act, notice of which will
be set out in the Scheme
Document, for the purpose
of approving the Scheme,
including any adjournment
thereof
"Court" the High Court of Justice
of England and Wales
"CREST" the relevant system (as
defined in the Uncertificated
Securities Regulations 2001
(SI 2001/3755)) in respect
of which Euroclear UK &
Ireland Limited is the Operator
(as defined in such Regulations)
in accordance with which
securities may be held and
transferred in uncertificated
form
"Daily Official AIM appendix of the daily
List" official list of the London
Stock Exchange
"Dealing Disclosure" an announcement pursuant
to Rule 8 of the Code containing
details of dealings in interests
in relevant securities of
a party to an offer
"Effective Date" the date upon which the
Scheme becomes effective
in accordance with its terms
"ETQ Directors" the directors of ETQ
"ETQ Group" ETQ and its subsidiary undertakings
"ETQ Share Scheme" ETQ's EMI share option scheme
"ETQ Shareholders" the registered holders of
ETQ Shares from time to
time
"ETQ Shares" ordinary shares of 10 pence
each in the capital of ETQ
"ETQ" Energy Technique plc
"Excluded Shares" (i) any ETQ Shares beneficially
owned by Volution or any
other member of the Volution
Group; (ii) any ETQ Shares
held in treasury by ETQ
and (iii) any other ETQ
Shares which Volution and
ETQ agree will not be subject
to the Scheme
"FCA" the Financial Conduct Authority
"Forms of Proxy" the form of proxy in connection
with each of the Court Meeting
and the General Meeting,
which shall accompany the
Scheme Document
"General Meeting" the general meeting of ETQ
Shareholders to be convened
in connection with the Scheme,
notice of which will be
set out in the Scheme Document,
including any adjournment
thereof
"IFRS" International Financial
Reporting Standards as adopted
by the European Union
"Liberum" Liberum Capital Limited
"London Stock Exchange" London Stock Exchange plc
"Offer" if (subject to the consent
of the Panel) Volution elects
to effect the Acquisition
by way of a takeover offer,
the offer to be made by
or on behalf of Volution
to acquire the issued and
to be issued ordinary share
capital of ETQ on the terms
and subject to the conditions
to be set out in the related
offer document
"Offer Period" the offer period (as defined
in the Code) relating to
ETQ, which commenced on
26 February 2015
"Panel" the Panel on Takeovers and
Mergers
"Registrar of Companies" the Registrar of Companies
in England and Wales
"Regulatory Information any information service
Service" authorised from time to
time by the FCA for the
purpose of disseminating
regulatory announcements
"Resolution" the resolution to be proposed
by ETQ at the General Meeting
in connection with, among
other things, the approval
of the Scheme and the alteration
of ETQ's articles of association
and such other matters as
may be necessary to implement
the Scheme and the delisting
of the ETQ Shares
"Restricted Jurisdictions" any jurisdiction where the
extension or availability
of the Scheme or Offer would
breach any applicable law
"Scheme Court Hearing" the hearing of the Court
to sanction the Scheme
"Scheme Court Order" the order of the Court sanctioning
the Scheme under Part 26
of the Companies Act
"Scheme Document" the document to be sent
to (among others) ETQ Shareholders
containing and setting out,
among other things, the
full terms and conditions
of the Scheme and containing
the notices convening the
Court Meeting and General
Meeting
"Scheme Record the time and date specified
Time" as such 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" ETQ Shares:
(a) in issue as at the date
of the Scheme Document;
(b) (if any) issued after
the date of the Scheme Document
and prior to the Scheme
Voting Record Time; and
(c) (if any) issued on or
after the Scheme Voting
Record Time and before the
Scheme Record Time, either
on terms that the original
or any subsequent holders
thereof shall be bound by
the Scheme or in respect
of which the holders thereof
shall have agreed in writing
to be bound by the Scheme,
but in each case other than
the Excluded Shares
"Scheme Voting the time and date specified
Record Time" in the Scheme Document by
reference to which entitlement
to vote on the Scheme will
be determined
"Scheme" the scheme of arrangement
proposed to be made under
Part 26 of the Companies
Act between ETQ and the
Scheme Shareholders, with
or subject to any modification,
addition or condition approved
or imposed by the Court
and agreed to by ETQ and
Volution
"Substantial Interest" a direct or indirect interest
in 20 per cent. or more
of the voting equity capital
(MORE TO FOLLOW) Dow Jones Newswires
November 11, 2015 02:09 ET (07:09 GMT)
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